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Republic of the Philippines the lease as alleged by the defendant in his answer; that the said contract of lease

is answer; that the said contract of lease of July

SUPREME COURT 24,1905, is null and void for being executed without the intervention and consent of two coowners,
Manila Ramon Melencio and Jose P. Melencio, and without the marital consent of the husbands of
Juliana and Ruperta Melencio; that the lessee has repeatedly violated the terms and conditions of
EN BANC the said contract; and that Liberata Macapagal, in her capacity as administratrix of the property of
her deceased husband, could not lawfully and legally execute a contract of lease with the
conditions and terms similar to that of the one under consideration, and that from this it follows that
G.R. No. L-32047 November 1, 1930
she could not ratify the said lease as claimed by the defendant.


On January 21,1928, Liberata Macapagal Viuda de Melencio, duly appointed and qualified as
MELENCIO, plaintiffs-appellants,
administratrix of the estate of her deceased husband, Ramon Melencio, filed a petition praying to
be allowed to join the plaintiffs as party to the present case, which petition was granted in open
DY TIAO LAY, defendant-appellee.
court on January 31,1928. Her amended complaint of intervention of February 14,1928, contains
allegations similar to those alleged in the complaint of the original plaintiffs, and she further alleges
Jose V. Valladolid, Jose P. Melencio and Camus and Delgado for appellants. that the defendant-appellee has occupied the land in question ever since November, 1920, under
Araneta and Zaragoza for appellee. and by virtue of a verbal contract of lease for a term from month to month. To this complaint of
intervention, the defendant-appellee filed an answer reproducing the allegations contained in his
answer reproducing the allegations contained in his answer to the complaint of the original
plaintiffs and setting up prescription as a further special defense.

OSTRAND, J.: It appears from the evidence that the land in question was originally owned by one Julian
Melencio. He died prior to the year 1905 leaving his widow, Ruperta Garcia, and his five children,
On August 1,1927, the plaintiffs, Manuel, Mariano, Pura and Caridad Melencio, brought the Juliana, Ramon, Ruperta, Pedro R., and Emilio Melencio. Emilio Melencio also died before 1905,
present action against the defendant-appellee, Dy Tiao Lay for the recovery of the possession of a his son Jose P. Melencio, then a minor, succeeding to his interest in the said parcel of land by
parcel of land situated in the town of Cabanatuan, Nueva Ecija, and containing an area of representation. A question has been raised as to whether the land was community property of the
4,628.25 square meters. The plaintiffs further demand a monthly rental of P300 for the use and marriage of Julian Melencio and Ruperta Garcia, but the evidence is practically undisputed that
occupation of the parcel from May, 1926, until the date of the surrender to them of the possession Ruperta Garcia in reality held nothing but a widow's usufruct in the land.
thereof; and that if it is found that the said appellee was occupying the said parcel of land by virtue
of a contract of lease, such contract should be declared null and void for lack of consent, On July 24,1905, Ruperta Garcia, Pedro R. Melencio, Juliana Melencio, and Ruperta Melencio
concurrence, and ratification by the owners thereof. executed a contract of lease of the land in favor of one Yap Kui Chin, but neither Jose P. Melencio
nor Ramon Melencio were mentioned in the lease. The term of the lease was for twenty years,
In his answer, the defendant pleaded the general issue, and as special defenses, he alleged in extendible for a like period at the option of the lessee. The purpose of the lessee was to establish
substance that he was occupying the said tract of land by virtue of a contract of lease executed on a rice mill on the land, with the necessary buildings for warehouses and for quarters for the
July 24,1905, in favor of his predecessor in interest, by Ruperta Garcia, Pedro Melencio, Juliana employees, and it was further stipulated that at the termination of the original period of the lease,
Melencio, and Ruperta Melencio under the terms specified therein, and which contract is still in or the extension therof, the lessors might purchase all the buildings and improvements on the land
force; that Liberata Macapagal, the mother of the plaintiffs, in her capacity as judicial administratrix at a price to be fixed by experts appointed by the parties, but that if the lessors should fail to take
of the estate of Ramon Melencio, one of the original coowners of the parcel of land in question, advantage of that privilege, the lease would continue for another and further period of twenty
actually recognized and ratified the existence and validity of the contract aforesaid by virtue of the years. The document was duly acknowledged but was never recorded with the register of deeds.
execution of a public document by her on or about November 27,1920, and by collecting from the The original rent agreed upon was P25 per month, but by reason of the construction of a street
assignees of the original lessee the monthly rent for the premises until April 30, 1926; and that through the land, the monthly rent was reduced of P20.20.
said defendant deposits with the clerk of court the sum of P20.20 every month as rent thereof and
that as a counterclaim, he seeks the recovery of P272 for goods and money delivered by him to Shortly after the execution of the lease, the lessee took possession of the parcel in question and
the plaintiffs. erected the mill as well as the necessary buildings, and it appears that in matters pertaining to the
lease, he dealt with Pedro R. Melencio, who from 1905 until his death in 1920, acted as manager
The plaintiffs filed a reply to the answer alleging, among other things, that Ruperta Garcia was not of the property held in common by the heirs of Julian Melencio and Ruperta Garcia. The original
one of the coowners of the land in question; that the person who signed the alleged contract of lessee, Yap Kui Chin, died in 1912, and the lease, as well as the other property, was transferred to
lease never represented themselves as being the sole and exclusive owners of the land subject to Uy Eng Jui who again transferred it to Uy Eng Jui & Co., an unregistered partnership. Finally the
lease came into the hands of Dy Tiao Lay, the herein defendant-appellee.
Ramon Melencio died in 1914, and his widow, Liberata Macapagal, was appointed administratrix The second proposition is likewise of little merit. Under the circumstances, the provision in the
of his estate. In 1913 the land which includes the parcel in question was registered under the contract that the lessee, at any time before he erected any building on the land, might rescind the
Torrens system. The lease was not mentioned in the certificate of title, but it was stated that one lease, can hardly be regarded as a violation of article 1256 of the Civil Code.
house and three warehouses on the land were the property of Yap Kui Chin.
The third and fourth proposition are, in our opinion, determinative of the controversy. The court
In 1920 the heirs of Julian Melencio made an extrajudicial partition of parts of the inheritance, and below based its decision principally on the case of Enriquez vs. A.S. Watson & Co. (22 Phil., 623),
among other things, the land here in question fell to the share of the children of Ramon Melencio, and on the resolution of the Direccion General de los Registros dated April 26,1907.
who are the original plaintiffs in the present case. Their mother, Liberata Macapagal, as (Jurisprudencia Civil, vol.107, p. 222.) An examination of the Enriquez case will show that it differs
administratrix of the estate of her deceased husband, Ramon, collected the rent for the lease at materially from the present. In that case all of the coowners of a lot and building executed a
the rate of P20.20 per month until the month of May,1926, when she demanded of the lessee that contract of lease of the property for the term of eighteen years in favor of A. S. Watson & Co.; one
the rent should be increased to P300 per month, and she was then informed by the defendant that of the owners was minor, but he was represented by his legally appointed guardian, and the action
a written lease existed and that according to the terms thereof, the defendant was entitled to an of the latter in signing the lease on behalf of the minor was formally approved by the Court of First
extension of the lease at the original rental. The plaintiffs insisted that they never had any Instance. In the present case only a small majority of the coowners executed the lease here in
knowledge of the existence of such a contract of lease and maintained that in such case the lease question, and according to the terms of the contract the lease might be given a duration of sixty
was executed without their consent and was void. It may be noted that upon careful search, a years; that is widely different from a lease granted by all of the coowners for a term of only
copy of the contract of lease was found among the papers of the deceased Pedro R, Melencio. eighteen years.
Thereafter the present action was brought to set aside the lease and to recover possession of the
land. Upon trial, the court below rendered judgment in favor of the defendant declaring the lease The resolution of April 26,1907, is more in point. It relates to the inscription or registration of a
valid and ordering the plaintiffs to pay the P272 demanded by the defendant in his counterclaim. contract of lease of some pasture grounds. The majority of the coowners of the property executed
From this judgment the plaintiffs appealed. the lease for the term of twelve years but when the lessees presented the lease for inscription in
the registry of property, the registrar denied the inscription on the ground that the term of the lease
The contention of the appellants is that the aforesaid contract of lease (Exhibit C) is null and void exceeded six years and that therefore the majority of the coowners lacked authority to grant the
for the following reasons: lease. The Direccion General de los Registros held that the contract of lease for a period
exceeding six years, constitutes a real right subject to registry and that the lease in question was
1. That Exhibit C calls for an alteration of the property in question and therefore ought to valid.
have been signed by all the coowners as by law required in the premises.
The conclusions reached by the Direccion General led to considerable criticism and have been
2. That the validity and fulfillment of the said agreement of lease were made to depend overruled by a decision of the Supreme Court of Spain dated June 1,1909. In that decision the
upon the will of the lessee exclusively. court made the following statement of the case (translation):

3. That the said contract of lease being for a term of over six years, the same is null and The joint owners of 511 out of 1,000 parts of the realty denominated El Mortero, leased
void pursuant to the provision of article 1548 of the Civil Code. out the whole property for twelve years to Doña Josefa de la Rosa; whereupon the Count
and Countess Trespalacios together with other coowners brought this suit to annul the
lease and, in view of the fact that the land was indivisible, prayed for its sale by public
4. That the duration of the same is unreasonably long, thus being against public policy.
auction and the distribution of the price so obtained; they alleged that they neither took
part nor consented to the lease; that the decision of the majority of part owners referred to
5. That the defendant-appellee and his predecessors in interest repeatedly violated the in article 398 of the Code, implies a common deliberation on the step to be taken , for to
provisions of the agreement. do without it, would, even more than to do without the minority, be nothing less than
plunder; and that, even if this deliberation were not absolutely necessary, the power of the
The first proposition is based on article 397 of the Civil Code which provides that "none of the majority would still be confined to decisions touching the management and enjoyment of
owners shall, without the consent of the others, make any alterations in the common property the common property, and would not include acts of ownership, such as a lease for
even though such alterations might be advantageous to all." We do not think that the alterations twelve years, which according to the Mortgage Law gives rise to a real right, which must
are of sufficient importance to nullify the lease, especially so since none of the coowners objected be recorded, and which can be performed only by the owners of the property leased.
to such alterations until over twenty years after the execution of the contract of lease. The decision
of this court in the case of Enriquez vs. A. S. Watson and Co. (22 Phil., 623), contains a full The part owners who had executed the contract prayed in reconvention that it held valid
discussion of the effect of alterations of leased community property, and no further discussion for all the owners in common, and if this could not be, then for all those who had signed it,
upon the point need here be considered. and for the rest, for the period of six years; and the Audiencia of Caceres having rendered
judgment holding the contract null and void, and ordering the sale of the realty and the
distribution of the price, the defendants appealed alleging under the third and fourth the Code to give a lease for a period of over six years, and the joint owners constituting a
assignments of error, that the judgment was a violation of article 398 of the Civil Code, legal majority, who may decide to lease out the indivisible property, with respect to the
which is absolute and sets no limit of time for the efficacy of the decisions arrived at by shares of the other coowners; and having come to the conclusion that the contract is null
the majority of the part owners for the enjoyment of the common property, citing the and void, there is no need to discuss the first two assignments of error which refer to
decisions of June 30th, 1897, of July 8th,1902, and of October 30th, 1907; under the fifth another of the bases adopted, however erroneously, by the trial court;
assignments of error the appellants contended that in including joint owners among those
referred to in said article, which sets certain limits to the power of leasing, in the course of Considering that the sixth assignment of error is without merit, inasmuch as the joint
the management of another's property, the court applied article 1548 unduly; and by the ownership of property is not a sort of agency and cannot be governed by the provisions
seventh assignments of error, they maintained the judgment appealed from also violated relating to the latter contract; whence, article 1727 of the Code alleged to have been
article 1727, providing that the principal is not bound where his agent has acted beyond violated, can no more be applied, than, the question of the validity or nullity of the lease
his authority; whence it may be inferred that if in order to hold the contract null and void, being raise, upon the contract as celebrated, it would be allowable to modify
the majority of the part owners are looked upon as managers or agents exercising limited a posteriorisome one or other of the main conditions stipulated, like that regarding the
powers, it must at least be conceded that in so far as the act in question lies within the duration of the lease, for this would amount to a novation; still less allowable would it be
scope of their powers, it is valid; the contract cannot be annulled in toto. to authorize diverse periods for the different persons unequally interested in the
The Supreme Court held that the appeal from the decision of the Audiencia of Caceres was not
well taken and expressed the following consideranda: Taking into consideration articles 398,1548, and 1713 of the Civil Code and following the aforesaid
decision of June 1,1909, we hold that the contract of lease here in question is null and void.
Considering that, although as a rule the contract of lease constitutes an act of
management, as this court has several times held, cases may yet arise, either owing to It has been suggested that by reason of prescription and by acceptance of benefits under the
the nature of the subject matter, or to the period of duration, which may render it lease, the plaintiffs are estopped to question the authority for making the lease.To this we may
imperative to record the contract in the registry of property, in pursuance of the Mortgage answer that the burden of proof of prescription devolved upon the defendant and that as far as we
Law, where the contract of lease may give rise to a real right in favor of the lessee, and it can find, there is no proof that Ramon Melencio and his successors ever had knowledge of the
would then constitute such a sundering of the ownership as transcends mere existence of the lease in question prior to 1926. We cannot by mere suspicion conclude that they
management; in such cases it must of necessity be recognized that the part owners were informed of the existence of the document and its terms; it must be remembered that under a
representing the greater portion of the property held in common have no power to lease strict interpretation of the terms of the lease, the lessees could remain indefinitely in their tenancy
said property for a longer period than six years without the consent of all the coowners, unless the lessors could purchase the mill and the buildings on the land. In such circumstances,
whose propriety rights, expressly recognized by the law, would by contracts of long better evidence than that presented by the defendant in regard to the plaintiff's knowledge of the
duration be restricted or annulled; and as under article 1548 of the Civil Code such lease must be required.
contracts cannot be entered into by the husband with respect to his wife's property, by the
parent or guardian with respect to that of the child or ward, and by the manager in default
of special power, since the contract of lease only produces personal obligations, and The fact that Ramon during his lifetime received his share of the products of land owned in
cannot without the consent of all persons interested or express authority from the owner, common with his coheirs is not sufficient proof of knowledge of the existence of the contract of
be extended to include stipulations which may alter its character, changing it into a lease when it is considered that the land in question was only a small portion of a large tract which
contract of partial alienation of the property leased; Pedro R. Melencio was administering in connection with other community property.

The appealed judgment as to the validity of the lease is therefore reversed, and it is ordered that
Considering that, applying this doctrine to the case before us, one of the grounds upon
the possession of the land in controversy be delivered to the intervenor Liberata Macapagal in her
which the judgment appealed from, denying the validity of the lease made by the majority
capacity as administratrix of the estate of the deceased Ramon Melencio. It is further ordered that
of the part owners of the pasture land El Mortero is based, must be upheld; to wit, that the
the defendant pay to said administratrix a monthly rent of P50 for the occupation of the land from
period of duration is twelve years and the consent of all the coowners has not been
May 1st, 1926, until the land is delivered to the administratrix. The sum of P272 demanded by the
obtained; hence, the third, fourth. and fifth assignments of error are without merit; firstly,
because article 398 of the Civil Code, alleged to have been violated, refers to acts defendant in his counterclaim may be deducted from the total amount of the rent due and unpaid.
decided upon by the majority of the part owners, touching the management and The building erected on the land by the defendant and his predecessors in interest may be
enjoyment of the common property, and does not contradict what we have stated in the removed by him, or otherwise disposed of, within six months from the promulgation of this
decision. Without costs. So ordered.
foregoing paragraph; secondly because although the cases cited were such as arose
upon leases for more than six years, yet this point was not raised on appeal, and could
not therefore be passed upon; and thirdly, because it cannot be denied that there is an Avanceña, C.J., , Malcolm, Johns, Romualdez, and Villa-Real, JJ., concur.
analogy between a manager without special authority, who is forbidden by article 1548 of Jonhson, J., I reserve my vote.
Republic of the Philippines and rents and collections made thereon. In return for all this undertaking and obligation assumed
SUPREME COURT by Araneta Inc., particularly the financial burden, it was to receive 50 per cent of the gross selling
Manila price of the lots, and any rents that may be collected from the property, while in the process of
sale, the remaining 50 per cent to be divided in equal portions among the three co-owners so that
EN BANC each will receive 16.33 per cent of the gross receipts.

G.R. No. L-3404 April 2, 1951 Because of the importance of paragraphs 9, 11 and 15 of the contract (Exh. 6), for purposes of
reference we are reproducing them below:
ANGELA I. TUASON, plaintiff-appellant,
vs. (9) This contract shall remain in full force and effect during all the time that it may be
ANTONIO TUASON, JR., and GREGORIO ARANETA, INC., defendants-appellees. necessary for the PARTY OF THE SECOND PART to fully sell the said property in small
and subdivided lots and to fully collect the purchase prices due thereon; it being
understood and agreed that said lots may be rented while there are no purchasers
Alcuaz & Eiguren for appellant. thereof;
Araneta & Araneta for appellees.
(11) The PARTY OF THE SECOND PART (meaning Araneta Inc.) is hereby given full
power and authority to sign for and in behalf of all the said co-owners of said property all
contracts of sale and deeds of sale of the lots into which this property might be
In 1941 the sisters Angela I. Tuason and Nieves Tuason de Barreto and their brother Antonio subdivided; the powers herein vested to the PARTY OF THE SECOND PART may, under
Tuason Jr., held a parcel of land with an area of 64,928.6 sq. m. covered by Certificate of Title No. its own responsibility and risk, delegate any of its powers under this contract to any of its
60911 in Sampaloc, Manila, in common, each owning an undivided 1/3 portion. Nieves wanted officers, employees or to third persons;
and asked for a partition of the common property, but failing in this, she offered to sell her 1/3
portion. The share of Nieves was offered for sale to her sister and her brother but both declined to (15) No co-owner of the property subject-matter of this contract shall sell, alienate or
buy it. The offer was later made to their mother but the old lady also declined to buy, saying that if dispose of his ownership, interest or participation therein without first giving preference to
the property later increased in value, she might be suspected of having taken advantage of her the other co-owners to purchase and acquire the same under the same terms and
daughter. Finally, the share of Nieves was sold to Gregorio Araneta Inc., a domestic corporation, conditions as those offered by any other prospective purchaser. Should none of the co-
and a new Certificate of Title No. 61721 was issued in lieu of the old title No. 60911 covering the owners of the property subject-matter of this contract exercise the said preference to
same property. The three co-owners agreed to have the whole parcel subdivided into small lots acquire or purchase the same, then such sale to a third party shall be made subject to all
and then sold, the proceeds of the sale to be later divided among them. This agreement is the conditions, terms, and dispositions of this contract; provided, the PARTIES OF THE
embodied in a document (Exh. 6) entitled "Memorandum of Agreement" consisting of ten pages,
FIRST PART (meaning Angela and Antonio) shall be bound by this contract as long as
dated June 30, 1941.
controlled by the members of the Araneta family, who are stockholders of the said
Before, during and after the execution of this contract (Exh. 6), Atty. J. Antonio Araneta was acting corporation at the time of the signing of this contract and/or their lawful heirs;
as the attorney-in-fact and lawyer of the two co-owners, Angela I. Tuason and her brother Antonio
Tuason Jr. At the same time he was a member of the Board of Director of the third co-owner, On September 16, 1944, Angela I. Tuason revoked the powers conferred on her attorney-in-fact
Araneta, Inc.
and lawyer, J. Antonio Araneta. Then in a letter dated October 19, 1946, Angela notified Araneta,
Inc. that because of alleged breach of the terms of the "Memorandum of Agreement" (Exh. 6) and
The pertinent terms of the contract (Exh. 6) may be briefly stated as follows: The three co-owners abuse of powers granted to it in the document, she had decided to rescind said contract and she
agreed to improve the property by filling it and constructing roads and curbs on the same and then asked that the property held in common be partitioned. Later, on November 20, 1946, Angela filed
subdivide it into small lots for sale. Araneta Inc. was to finance the whole development and a complaint in the Court of First Instance of Manila asking the court to order the partition of the
subdivision; it was prepare a schedule of prices and conditions of sale, subject to the subject to property in question and that she be given 1/3 of the same including rents collected during the
the approval of the two other co-owners; it was invested with authority to sell the lots into which time that the same including rents collected during the time that Araneta Inc., administered said
the property was to be subdivided, and execute the corresponding contracts and deeds of sale; it property.
was also to pay the real estate taxes due on the property or of any portion thereof that remained
unsold, the expenses of surveying, improvements, etc., all advertising expenses, salaries of The suit was administered principally against Araneta, Inc. Plaintiff's brother, Antonio Tuason Jr.,
personnel, commissions, office and legal expenses, including expenses in instituting all actions to one of the co-owners evidently did not agree to the suit and its purpose, for he evidently did not
eject all tenants or occupants on the property; and it undertook the duty to furnish each of the two agree to the suit and its purpose, for he joined Araneta, Inc. as a co-defendant. After hearing and
co-owners, Angela and Antonio Tuason, copies of the subdivision plans and the monthly sales
after considering the extensive evidence introduce, oral and documentary, the trial court presided likewise paid taxes, commissions and other expenses incidental to its obligations as
over by Judge Emilio Peña in a long and considered decision dismissed the complaint without denied in the agreement.
pronouncement as to costs. The plaintiff appealed from that decision, and because the property is
valued at more than P50,000, the appeal came directly to this Court. With respect to the charged that Gregorio Araneta, Incorporated has failed to submit to
plaintiff a copy of the subdivision plains, list of prices and the conditions governing the
Some of the reasons advanced by appellant to have the memorandum contract (Exh. 6) declared sale of subdivided lots, and monthly statement of collections form the sale of the lots, the
null and void or rescinded are that she had been tricked into signing it; that she was given to Court is of the opinion that it has no basis. The evidence shows that the defendant
understand by Antonio Araneta acting as her attorney-in-fact and legal adviser that said contract corporation submitted to the plaintiff periodically all the data relative to prices and
would be similar to another contract of subdivision of a parcel into lots and the sale thereof conditions of the sale of the subdivided lots, together with the amount corresponding to
entered into by Gregorio Araneta Inc., and the heirs of D. Tuason, Exhibit "L", but it turned out that her. But without any justifiable reason, she refused to accept them. With the indifferent
the two contracts widely differed from each other, the terms of contract Exh. "L" being relatively attitude adopted by the plaintiff, it was thought useless for Gregorio Araneta, Incorporated
much more favorable to the owners therein the less favorable to Araneta Inc.; that Atty. Antonio to continue sending her statement of accounts, checks and other things. She had shown
Araneta was more or less disqualified to act as her legal adviser as he did because he was one of on various occasions that she did not want to have any further dealings with the said
the officials of Araneta Inc., and finally, that the defendant company has violated the terms of the corporation. So, if the defendant corporation proceeded with the sale of the subdivided
contract (Exh. 6) by not previously showing her the plans of the subdivision, the schedule of prices lots without the approval of the plaintiff, it was because it was under the correct
and conditions of the sale, in not introducing the necessary improvements into the land and in not impression that under the contract exhibit 6 the decision of the majority co-owners is
delivering to her her share of the proceeds of the rents and sales. binding upon all the three.

We have examined Exh. "L" and compared the same with the contract (Exh. 6) and we agree with The Court feels that recission of the contract exhibit 6 is not minor violations of the terms
the trial court that in the main the terms of both contracts are similar and practically the same. of the agreement, the general rule is that "recission will not be permitted for a slight or
Moreover, as correctly found by the trial court, the copies of both contracts were shown to the casual breach of the contract, but only for such breaches as are so substantial and
plaintiff Angela and her husband, a broker, and both had every opportunity to go over and fundamental as to defeat the object of the parties in making the agreement" (Song Fo &
compare them and decide on the advisability of or disadvantage in entering into the contract (Exh. Co. vs. Hawaiian-Philippine Co., 47 Phil. 821).
6); that although Atty. Antonio Araneta was an official of the Araneta Inc.; being a member of the
Board of Directors of the Company at the time that Exhibit "6" was executed, he was not the party As regards improvements, the evidence shows that during the Japanese occupation from 1942
with which Angela contracted, and that he committed no breach of trust. According to the evidence and up to 1946, the Araneta Inc. although willing to fill the land, was unable to obtain the
Araneta, the pertinent papers, and sent to her checks covering her receive the same; and that as equipment and gasoline necessary for filling the low places within the parcel. As to sales, the
a matter of fact, at the time of the trial, Araneta Inc., had spent about P117,000 in improvement evidence shows that Araneta Inc. purposely stopped selling the lots during the Japanese
and had received as proceeds on the sale of the lots the respectable sum of P1,265,538.48. We occupantion, knowing that the purchase price would be paid in Japanese military notes; and Atty.
quote with approval that portion of the decision appealed from on these points: Araneta claims that for this, plaintiff should be thankfull because otherwise she would have
received these notes as her share of the receipts, which currency later became valueles.
The evidence in this case points to the fact that the actuations of J. Antonio Araneta in
connection with the execution of exhibit 6 by the parties, are above board. He committed But the main contention of the appellant is that the contract (Exh. 6) should be declared null and
nothing that is violative of the fiduciary relationship existing between him and the plaintiff. void because its terms, particularly paragraphs 9, 11 and 15 which we have reproduced, violate
The act of J. Antonio Araneta in giving the plaintiff a copy of exhibit 6 before the same the provisions of Art. 400 of the Civil Code, which for the purposes of reference we quote below:
was executed, constitutes a full disclosure of the facts, for said copy contains all that
appears now in exhibit 6.
ART. 400. No co-owner shall be obliged to remain a party to the community. Each may, at
any time, demand the partition of the thing held in common.
Plaintiff charges the defendant Gregorio Araneta, Inc. with infringing the terms of the
contract in that the defendant corporation has failed (1) to make the necessary
Nevertheless, an agreement to keep the thing undivided for a specified length of time, not
improvements on the property as required by paragraphs 1 and 3 of the contract; (2) to
exceeding ten years, shall be valid. This period may be a new agreement.
submit to the plaintiff from time to time schedule of prices and conditions under which the
subdivided lots are to be sold; and to furnish the plaintiff a copy of the subdivision plans, a
copy of the monthly gross collections from the sale of the property. We agree with the trial court that the provisions of Art. 400 of the Civil Code are not applicable.
The contract (Exh., 6) far from violating the legal provision that forbids a co-owner being obliged to
remain a party to the community, precisely has for its purpose and object the dissolution of the co-
The Court finds from the evidence that he defendant Gregorio Araneta, Incorporated has
ownership and of the community by selling the parcel held in common and dividing the proceeds
substantially complied with obligation imposed by the contract exhibit 6 in its paragraph 1,
of the sale among the co-owners. The obligation imposed in the contract to preserve the co-
and that for improvements alone, it has disbursed the amount of P117,167.09. It has
ownership until all the lots shall have been sold, is a mere incident to the main object of dissolving
the co-owners. By virtue of the document Exh. 6, the parties thereto practically and substantially
entered into a contract of partnership as the best and most expedient means of eventually
dissolving the co-ownership, the life of said partnership to end when the object of its creation shall
have been attained.

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

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

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

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

So ordered.

Pablo, Bengzon, Padilla, Tuason, Reyes, Jugo and Bautista Angelo, JJ., concur.
Paras, C. J., I certify that Mr. Justice Feria voted to affirm.
Republic of the Philippines The lot in question was mortgaged by the decedent to the Rural Bank of
SUPREME COURT Tuguegarao (designated as Mortgagee bank, for brevity) on several occasions
Manila before the last, being on March 9, 1956 and 29, 1958.

SECOND DIVISION On August 15, 1958, Francisco Gosiengfiao died intestate survived by his heirs,
namely: Third-Party Defendants: wife Antonia and Children Amparo, Carlos,
Severino and herein plaintiffs-appellants Grace, Emma, Ester, Francisco, Jr.,
Norma, Lina (represented by daughter Pinky Rose), and Jacinto.
G.R. No. 101522 May 28, 1993
The loan being unpaid, the lot in dispute was foreclosed by the mortgagee bank
and in the foreclosure sale held on December 27, 1963, the same was awarded
to the mortgagee bank as the highest bidder.
DIONISIA M. AQUINO, and JOSE N.T. AQUINO, petitioners,
HON. COURT OF APPEALS, (Sixteenth Division), GRACE GOSIENGFIAO, assisted by her On February 7, 1964, third-party defendant Amparo Gosiengfiao-Ibarra
husband GERMAN GALCOS; ESTER GOSIENGFIAO, assisted by her husband AMADOR redeemed the property by paying the amount of P1,347.89 and the balance of
BITONA; FRANCISCO GOSIENGFIAO, JR., NORMA GOSIENGFIAO, and PINKY ROSE P423.35 was paid on December 28, 1964 to the mortgagee bank.
GUENO, respondents.
On September 10, 1965, Antonia Gosiengfiao on her behalf and that of her minor
The Baristers Law Office for petitioners. children Emma, Lina, Norma together with Carlos and Severino executed a
"Deed of Assignment of the Right of Redemption" in favor of Amparo G. Ibarra
appearing in the notarial register of Pedro (Laggui) as Doc. No. 257, Page No. 6,
Simeon T. Agustin for private respondents.
Book No. 8, Series of 1965.

On August 15, 1966, Amparo Gosiengfiao sold the entire property to defendant
Leonardo Mariano who subsequently established residence on the lot subject of
NOCON, J.: this controversy. It appears in the Deed of Sale dated August 15, 1966 that
Amparo, Antonia, Carlos and Severino were signatories thereto.
Before Us is a petition foe review of the decision, dated May 13, 1991 of the Court of Appeals in
CA-G.R. CV No. 13122, entitled Grace Gosiengfiao, et al. v. Leonardo Mariano v. Amparo Sometime in 1982, plaintiff-appellant Grace Gosiengfiao learned of the sale of
Gosiengfiao 1 raising as issue the distinction between Article 10882 and Article 16203 of the Civil said property by the third-party defendants. She went to the Barangay Captain
Code. and asked for a confrontation with defendants Leonardo and Avelina Mariano to
present her claim to said property.
The Court of Appeals summarized the facts as follows:
On November 27, 1982, no settlement having been reached by the parties, the
It appears on record that the decedent Francisco Gosiengfiao is the registered Barangay captain issued a certificate to file action.
owner of a residential lot located at Ugac Sur, Tuguegarao, Cagayan, particularly
described as follows, to wit: On December 8, 1982, defendant Leonardo Mariano sold the same property to
his children Lazaro F. Mariano and Dionicia M. Aquino as evidenced by a Deed
"The eastern portion of Lot 1351, Tuguegarao Cadastre, and of Sale notarized by Hilarion L. Aquino as Doc. No. 143, Page No. 19, Book No.
after its segregation now designated as Lot 1351-A, Plan PSD- V, Series of 1982.
67391, with an area of 1,1346 square meters."
On December 21, 1982, plaintiffs Grace Gosiengfiao, et al. filed a complaint for
and covered by Transfer Certificate of Title No. T-2416 recorded in the Register "recovery of possession and legal redemption with damages" against defendants
of Deeds of Cagayan. Leonardo and Avelina Mariano. Plaintiffs alleged in their complaint that as co-
heirs and co-owners of the lot in question, they have the right to recover their
respective shares in the same, and property as they did not sell the same, and
the right of redemption with regard to the shares of other co-owners sold to the purchased the said property from the mortgagee bank (highest, bidder in the
defendants. foreclosure sale) after the redemption period had already expired and after the
mortgagee bank had consolidated it title in which case there would no longer be
Defendants in their answer alleged that the plaintiffs has (sic) no cause of action any co-ownership to speak of .6
against them as the money used to redeem lot in question was solely from the
personal funds of third-party defendant Amparo Gosiengfiao-Ibarra, who The decision of the Court of Appeals is supported by a long line of case law which states that a
consequently became the sole owner of the said property and thus validly sold redemption by a co-owner within the period prescribed by law inures to the benefit of all the other
the entire property to the defendants, and the fact that defendants had already co-owners.7
sold the said property to the children, Lazaro Mariano and Dionicia M. Aquino.
Defendants further contend that even granting that the plaintiffs are co-owners The main argument of petitioners in the case at bar is that the Court of Appeals incorrectly applied
with the third-party defendants, their right of redemption had already been barred Article 1620 of the Civil Code, instead of Article 1088 of the same code which governs legal
by the Statute of Limitations under Article 1144 of the Civil Code, if not by redemption by co-heirs since the lot in question, which forms part of the intestate estate of the late
laches.4 Francisco Gosiengfiao, was never the subject of partition or distribution among the heirs, thus,
private respondents and third-party defendants had not ceased to be co-heirs.
After trial on the merits, the Regional Trial Court of Cagayan, Branch I, rendered a decision dated
September 16, 1986, dismissing the complaint and stating that respondents have no right of On that premise, petitioners further contend that the right of legal redemption was not timely
ownership or possession over the lot in question. The trial court further said that when the subject exercised by the private respondents, since Article 1088 prescribes that the same must be done
property foreclosed and sold at public auction, the rights of the heirs were reduced to a mere right within the period of one month from the time they were notified in writing of the sale by the vendor.
of redemption. And when Amparo G. Ibarra redeemed the lot from the Rural Bank on her own
behalf and with her own money she became the sole owner of the property. Respondents' having
According to Tolentino, the fine distinction between Article 1088 and Article 1620 is that when the
failed to redeem the property from the bank or from Amparo G. Ibarra, lost whatever rights the
might have on the property.5 sale consists of an interest in some particular property or properties of the inheritance, the right
redemption that arises in favor of the other co-heirs is that recognized in Article 1620. On the other
hand, if the sale is the hereditary right itself, fully or in part, in the abstract sense, without
The Court of Appeals in its questioned decision reversed and set aside the ruling of the trial court specifying any particular object, the right recognized in Article 1088 exists.8
and declared herein respondents as co-owners of the property in the question. The Court of
Appeals said:
Petitioners allege that upon the facts and circumstances of the present case, respondents failed to
exercise their right of legal redemption during the period provided by law, citing as authority the
The whole controversy in the case at bar revolves on the question of "whether or case of Conejero, et al., v. Court of Appeals, et al.9 wherein the Court adopted the principle that
not a co-owner who redeems the whole property with her own personal funds the giving of a copy of a deed is equivalent to the notice as required by law in legal redemption.
becomes the sole owner of said property and terminates the existing state of co-
We do not dispute the principle laid down in the Conejero case. However, the facts in the said
case are not four square with the facts of the present case. In Conejero, redemptioner Enrique
Admittedly, as the property in question was mortgaged by the decedent, a co- Conejero was shown and given a copy of the deed of sale of the subject property. The Court in
ownership existed among the heirs during the period given by law to redeem the that case stated that the furnishing of a copy of the deed was equivalent to the giving of a written
foreclosed property. Redemption of the whole property by a co-owner does not notice required by law. 11
vest in him sole ownership over said property but will inure to the benefit of all co-
owners. In other words, it will not end to the existing state of co-ownership.
Redemption is not a mode of terminating a co-ownership. The records of the present petition, however, show no written notice of the sale being given
whatsoever to private respondents. Although, petitioners allege that sometime on October 31,
1982 private respondent, Grace Gosiengfiao was given a copy of the questioned deed of sale and
xxx xxx xxx shown a copy of the document at the Office of the Barangay Captain sometime November 18,
1982, this was not supported by the evidence presented. On the contrary, respondent, Grace
In the case at bar, it is undisputed and supported by records, that third-party Gosiengfiao, in her testimony, declared as follows:
defendant Amparo G. Ibarra redeemed the propety in dispute within the one year
redemption period. Her redemption of the property, even granting that the money Q. When you went back to the residence of Atty. Pedro Laggui
used was from her own personal funds did not make her the exclusive owner of were you able to see him?
the mortgaged property owned in common but inured to the benefit of all co-
owners. It would have been otherwise if third-party defendant Amparo G. Ibarra
A. Yes, I did. Q. And what was the reply of Don Mariano and Dr. Mariano to
the information given to them by Brgy. Captain Bassig regarding
Q. When you saw him, what did you tell? your claim?

A. I asked him about the Deed of Sale which Mrs. Aquino had A. He insisted that the lot is already his because of the Deed of
told me and he also showed me a Deed of Sale. I went over the Sale. I asked for the exact copy so that I could show to him that
Deed of Sale and I asked Atty. Laggui about this and he I did not sign and he said he does not have a copy. 12
mentioned here about the names of the legal heirs. I asked why
my name is not included and I was never informed in writing The above testimony was never refuted by Dr. Mariano who was present before Brgy. Captain
because I would like to claim and he told me to better consult Bassig.
my own attorney.
The requirement of a written notice has long been settled as early as in the case of Castillo
Q. And did you go? v. Samonte,13 where this Court quoted the ruling in Hernaez v. Hernaez, 32 Phil., 214, thus:

A. Yes, I did. Both the letter and spirit of the New Civil Code argue against any attempt to
widen the scope of the notice specified in Article 1088 by including therein any
Q. What kind of copy or document is that? other kind of notice, such as verbal or by registration. If the intention of the law
had been to include verbal notice or any other means of information as sufficient
to give the effect of this notice, then there would have been no necessity or
A. It is a deed of sale signed by my mother, sister Amparo and
reasons to specify in Article 1088 of the New Civil Code that the said notice be
my brothers.
made in writing for, under the old law, a verbal notice or information was
sufficient. 14
Q. If shown to you the copy of the Deed of Sale will you be able
to identify it?
Moreover, petitioners themselves adopted in their argument respondents' allegation In their
complaint that sometime on October, 1982 they sought the redemption of the property from
A. Yes, sir.11 spouses Leonardo Mariano and Avelina Tigue, by tendering the repurchase money of P12,000.00,
which the spouses rejected.15 Consequently, private respondents exercised their right of
Thereafter, Grace Gosiengfiao explicitly stated that she was never given a copy of the said Deed redemption at the first opportunity they have by tendering the repurchase price to petitioners. The
of Sale. complaint they filed, before the Barangay Captain and then to the Regional Trial Court was
necessary to assert their rights. As we learned in the case of Castillo, supra:
Q. Where did Don Mariano, Dr. Mariano and you see each
other? It would seem clear from the above that the reimbursement to the purchaser
within the period of one month from the notice in writing is a requisite or condition
A. In the house of Brgy. Captain Antonio Bassig. precedent to the exercise of the right of legal redemption; the bringing of an
action in court is the remedy to enforce that right in case the purchaser refuses
the redemption. The first must be done within the month-period; the second
Q. What transpired in the house of the Brgy. Captain when you within the prescriptive period provided in the Statute of Limitation. 16
saw each other there?
The ruling in Castillo v. Samonte; supra, was reiterated in the case of Garcia v. Calaliman, where
A. Brgy. Captain Bassig informed my intention of claiming the We also discussed the reason for the requirement of the written notice. We said:
lot and I also informed him about the Deed of Sale that was not
signed by me since it is mine it is already sold and I was
informed in writing about it. I am a legal heir and I have also the Consistent with aforesaid ruling, in the interpretation of a related provision (Article
right to claim. 1623 of the New Civil Code) this Court had stressed that written notice is
indispensable, actual knowledge of the sale acquired in some other manners by
the redemptioner, notwithstanding. He or she is still entitled to written notice, as
exacted by the code to remove all uncertainty as to the sale, its terms and its
validity, and to quiet and doubt that the alienation is not definitive. The law not
having provided for any alternative, the method of notifications remains
exclusive, though the Code does not prescribe any particular form of written
notice nor any distinctive method written notification of redemption (Conejero et
al. v. Court of Appeals et al., 16 SCRA 775 [1966]; Etcuban v. Court of Appeals,
148 SCRA 507 [1987]; Cabrera v. Villanueva, G.R. No. 75069, April 15,
1988).17 (Emphasis ours)

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

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

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


Narvasa, C.J., Padilla and Nocon, JJ., concur.

Republic of the Philippines her children Rosita Aquitania Belmonte, Remedios Aquitania Misa, Manuel Aquitania,
SUPREME COURT Sergio Aquitania and Aurora Aquitania sold to Elena Pajimula, the remaining 2/3 western
Manila portion of Lot No. 802 with an area of 958 square meters (Annex C of the complaint).

EN BANC The action of the plaintiff is premised on the claim of co-ownership. From the deed of sale
executed in favor of the plaintiff, it can be seen that the 1/3 portion sold to plaintiff is
G.R. No. L-24419 July 15, 1968 definitely identified as the 1/3 portion located on the southeastern part of Lot No. 802 and
specifically bounded on the north by De Guzman Street, on the east by Posadas Street,
on the south by Perez Street, and on the west by remaining portion of the same lot, which
LEONORA ESTOQUE, plaintiff-appellant,
contained an area of 640 square meters. And in the deed of sale executed by Crispina
Perez and her children in favor of defendant Elena Pajimula over the remaining 2/3
ELENA M. PAJIMULA, assisted by her husband CIRIACO PAJIMULA, defendants-appellees.
portion of Lot No. 802, said portion is identified as the western portion of Lot No. 802
which is bounded on the north by De Guzman Street, on the east by properties of
Jesus P. Mapanao for plaintiff-appellant. Leonarda Estoque, on the south by the national road and on the west by Lots Nos. 799
Vergara and Dayot for defendants-appellees. and 801, containing an area of 598 square meters.

REYES, J.B.L., J.: The appellant's stand is that the deed in her favor was inoperative to convey the southeastern
third of Lot 802 of the Rosario Cadastre notwithstanding the description in the deed itself, for the
Direct appeal from an order of the Court of First Instance of La Union, in its Civil Case No. 1990, reason that the vendor, being a mere co-owner, had no right to sell any definite portion of the land
granting a motion to dismiss the complaint for legal redemption by a co-owner (retracto legal de held in common but could only transmit her undivided share, since the specific portion
comuneros) on account of failure to state a cause of action. corresponding to the selling co-owner is not known until partition takes place (Lopez vs. Ilustre, 5
Phil. 567; Ramirez vs. Bautista, 14 Phil. 528). From this premise, the appellant argues that the
The basic facts and issues are stated in the decision appealed from, as follows: sale in her favor, although describing a definite area, should be construed as having conveyed
only the undivided 1/3 interest in Lot 802 owned at the time by the vendor, Crispina Perez Vda. de
Aquitania. Wherefore, when the next day said vendor acquired the 2/3 interest of her two other co-
Plaintiff based her complaint for legal redemption on a claim that she is a co-owner of Lot owners, Lot 802 became the common property of appellant and Crispina Perez. Therefore,
No. 802, for having purchased 1/3 portion thereof, containing an area of 640 square appellant argues, when Crispina sold the rest of the property to appellee Pajimula spouses, the
meters as evidenced by a deed of sale, Annex "A", which was executed on October 28, former was selling an undivided 2/3 that appellant, as co-owner, was entitled to redeem, pursuant
1951 by Crispina Perez de Aquitania, one of the co-owners, in her favor. to Article 1620 of the New Civil Code.

On the other hand, the defendant, who on December 30, 1959 acquired the other 2/3 ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares
portion of Lot No. 802 from Crispina Aquitania and her children, claimed that the plaintiff of all the other co-owners or of any of them, are sold to a third person. If the price of the
bought the 1/3 southeastern portion, which is definitely identified and segregated, hence alienation is grossly excessive the redemptioner shall pay only a reasonable one.
there existed no co-ownership at the time and after said plaintiff bought the aforesaid
portion, upon which right of legal redemption can be exercised or taken advantage of.
Should two or more co-owners desire to exercise the right of redemption, they may only
do so in proportion to the share they may respectively have in the thing owned in
From the complaint, it would appear that Lot No. 802 of the Cadastral survey of Rosario, common.
covered by original certificate of title No. RO-2720 (N.A.) was originally owned by the late
spouses, Rosendo Perez and Fortunata Bernal, who were survived by her children,
namely, Crispina Perez, Lorenzo Perez and Ricardo Perez. Ricardo Perez is also now The lower court, upon motion of defendant, dismissed the complaint, holding that the deeds of
dead. On October 28, 1951, Crispina P. Vda. de Aquitania sold her right and participation sale show that the lot acquired by plaintiff Estoque was different from that of the defendants
in Lot No. 802 consisting of 1/3 portion with an area of 640 square meters to Leonora Pajimula; hence they never became co-owners, and the alleged right of legal redemption was not
Estoque (Annex A of the complaint). On October 29, 1951, Lorenzo Perez, Crispina proper. Estoque appealed.
Perez and Emilia P. Posadas, widow of her deceased husband, Ricardo Perez for herself
and in behalf of her minor children, Gumersindo, Raquel, Emilio and Ricardo, Jr., We find no error in the order of dismissal, for the facts pleaded negate the claim that appellant
executed a deed of extrajudicial settlement wherein Lorenzo Perez, Emilia P. Posadas Estoque ever became a co-owner of appellees Pajimula.
and her minor children assigned all their right, interest and participation in Lot No. 802 to
Crispina Perez (Annex B of the complaint). On December 30, 1959, Crispina Perez and
(1) The deed of sale to Estoque (Annex A of the complaint) clearly specifies the object sold as the
southeastern third portion of Lot 802 of the Rosario Cadastre, with an area of 840 square meters,
more or less. Granting that the seller, Crispina Perez Vda. de Aquitania could not have sold this
particular portion of the lot owned in common by her and her two brothers, Lorenzo and Ricardo
Perez, by no means does it follow that she intended to sell to appellant Estoque her 1/3 undivided
interest in the lot forementioned. There is nothing in the deed of sale to justify such inference. That
the seller could have validly sold her one-third undivided interest to appellant is no proof that she
did choose to sell the same. Ab posse ad actu non valet illatio.

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

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

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

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

Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ.,
Republic of the Philippines the defendant that she was processed the sum of P300,000.00 by the JK
SUPREME COURT Exports, Inc. which will also take charge of the interest of the loan.
Concluding, the trial court ruled:
Absent (of) any evidence that the property in question is the
G.R. No. 75884 September 24, 1987 capital of the deceased husband brought into the marriage, said
property should be presumed as acquired during the marriage
ONG, petitioners,
vs. After the dissolution of the marriage with the death of plaintiff's
THE HON. COURT OF APPEALS, ALLIED BANKING CORPORATION and the CITY SHERIFF husband, the plaintiff acquired, by law, her conjugal share,
OF QUEZON CITY, respondents. together with the hereditary rights thereon. (Margate vs.
Rabacal, L-14302, April 30, 1963). Consequently, the mortgage
constituted on said property, upon express authority of plaintiff,
notwithstanding the lack of judicial approval, is valid, with
respect to her conjugal share thereon, together with her
hereditary rights.

This is a petition for review on certiorari of the March 21, 1986 Decision * of the Court of Appeals
On appeal by petitioner, respondent Court of Appeals affirmed, with modification, the appealed
in AC-G.R. CV No. 02635, "Julita Ong etc. vs. Allied Banking Corp. et al." affirming, with decision (Record, pp. 19-22). The dispositive portion of the appellate court's decision reads:
modification, the January 5, 1984 Decision of the Regional Trial Court of Quezon City in Civil Case
No. Q-35230.
WHEREFORE, with the modification that the extrajudicial foreclosure
proceedings instituted by defendant against plaintiff shall be held in abeyance to
The uncontroverted facts of this case, as found by the Court of Appeals, are as follows:
await the final result of Civil Case No. 107089 of the Court of First Instance of
Manila, 6th Judicial District Branch XXXII, entitled "IN THE MATTER OF THE
...: Two (2) parcels of land in Quezon City Identified as Lot No. 12, Block 407, INTESTATE ESTATE OF THE LATE ALFREDO ONG BIO: JULITA GO ONG,
Psd 37326 with an area of 1960.6 sq. m. and Lot No. 1, Psd 15021, with an area ADMINISTRATRIX". In pursuance with which the restraining order of the lower
of 3,660.8 sq. m. are covered by Transfer Certificate of Title No. 188705 in the court in this case restraining the sale of the properties levied upon is hereby
name of "Alfredo Ong Bio Hong married to Julita Go Ong "(Exh. D). Alfredo Ong ordered to continue in full force and effect coterminous with the final result of Civil
Bio Hong died on January 18, 1975 and Julita Go Ong was appointed Case No. 107089, the decision appealed from is hereby affirmed. Costs against
administratrix of her husband's estate in Civil Case No. 107089. The letters of plaintiff-appellant.
administration was registered on TCT No. 188705 on October 23, 1979.
Thereafter, Julita Go Ong sold Lot No. 12 to Lim Che Boon, and TCT No. 188705 SO ORDERED.
was partially cancelled and TCT No. 262852 was issued in favor of Lim Che
Boon covering Lot No. 12 (Exh. D-4). On June 8, 1981 Julita Go Ong through her
attorney-in-fact Jovita K. Yeo (Exh. 1) mortgaged Lot No. 1 to the Allied Banking On April 8, 1986, petitioner moved for the reconsideration of the said decision (Ibid., pp. 24-29),
Corporation to secure a loan of P900,000.00 obtained by JK Exports, Inc. The but in a Resolution dated September 11, 1986, respondent court denied the motion for lack of
mortgage was registered on TCT No. 188705 on the same date with the following merit (Ibid., p. 23). Hence, the instant petition (Ibid., pp. 6-17).
notation: "... mortgagee's consent necessary in case of subsequent alienation or
encumbrance of the property other conditions set forth in Doc. No. 340, Page No. The Second Division of this Court, in a Resolution dated November 19, 1986 (Rollo, p. 30),
69, Book No. XIX, of the Not. Public of Felixberto Abad". On the loan there was without giving due course to the petition, resolved to require private respondent to comment
due the sum of P828,000.00 and Allied Banking Corporation tried to collect it thereon and it did on February 19, 1987 (Ibid., pp. 37-42). Thereafter, in a Resolution dated April
from Julita Go Ong, (Exh. E). Hence, the complaint alleging nullity of the contract 6, 1987, the petition was given due course and the parties were required to file their respective
for lack of judicial approval which the bank had allegedly promised to secure from memoranda (Ibid., p. 43).
the court. In response thereto, the bank averred that it was plaintiff Julita Go Ong
who promised to secure the court's approval, adding that Julita Go Ong informed
Petitioner filed her Memorandum on May 13, 1987 (Ibid., pp. 45-56), while private respondent filed termination of the co-ownership (Philippine National Bank vs. Court of Appeals, 98 SCRA 207
its Memorandum on May 20, 1987 (Ibid., pp. 62-68). [1980]).

The sole issue in this case is — Consequently, in the case at bar, the trial court and the Court of Appeals cannot be faulted in
ruling that the questioned mortgage constituted on the property under administration, by authority
WHETHER OR NOT THE MORTGAGE CONSTITUTED OVER THE PARCEL OF LAND UNDER of the petitioner, is valid, notwithstanding the lack of judicial approval, with respect to her conjugal
PETITIONER'S ADMINISTRATION IS NULL AND VOID FOR WANT OF JUDICIAL APPROVAL. share and to her hereditary rights. The fact that what had been mortgaged was in custodia legis is
immaterial, insofar as her conjugal share and hereditary share in the property is concerned for
after all, she was the ABSOLUTE OWNER thereof. This ownership by hers is not disputed, nor is
The instant petition is devoid of merit.
there any claim that the rights of the government (with reference to taxes) nor the rights of any heir
or anybody else have been prejudiced for impaired. As stated by Associate Justice (later Chief
The well-settled rule that the findings of fact of the trial court are entitled to great respect, carries Justice) Manuel Moran in Jakosalem vs. Rafols, et al., 73 Phil. 618 —
even more weight when affirmed by the Court of Appeals as in the case at bar.
The land in question, described in the appealed decision, originally belonged to
In brief, the lower court found: (1) that the property under the administration of petitioner — the Juan Melgar. The latter died and the judicial administration of his estate was
wife of the deceased, is a community property and not the separate property of the latter; (2) that commenced in 1915 and came to a close on December 2, 1924, only. During the
the mortgage was constituted in the wife's personal capacity and not in her capacity as pendency of the said administration, that is, on July 5, 1917, Susana Melgar,
administratrix; and (3) that the mortgage affects the wife's share in the community property and daughter of the deceased Juan Melgar, sold the land with the right of repurchase
her inheritance in the estate of her husband. to Pedro Cui, subject to the stipulation that during the period for the repurchase
she would continue in possession of the land as lessee of the purchase. On
Petitioner, asserting that the mortgage is void for want of judicial approval, quoted Section 7 of December 12, 1920, the partition of the estate left by the deceased Juan Melgar
Rule 89 of the Rules of Court and cited several cases wherein this Court ruled that the regulations was made, and the land in question was adjudicated to Susana Melgar. In 1921,
provided in the said section are mandatory. she conveyed, in payment of professional fees, one-half of the land in favor of
the defendant-appellee Nicolas Rafols, who entered upon the portion thus
While petitioner's assertion may have merit insofar as the rest of the estate of her husband is conveyed and has been in possession thereof up to the present. On July 23,
concerned the same is not true as regards her conjugal share and her hereditary rights in the 1921, Pedro Cui brought an action to recover said half of the land from Nicolas
estate. The records show that petitioner willingly and voluntarily mortgaged the property in Rafols and the other half from the other defendants, and while that case was
question because she was processed by JK Exports, Inc. the sum of P300,000.00 from the pending, or about August 4, 1925, Pedro Cui donated the whole land in question
proceeds of the loan; and that at the time she executed the real estate mortgage, there was no to Generosa Teves, the herein plaintiff-appellant, after trial, the lower court
court order authorizing the mortgage, so she took it upon herself, to secure an order. rendered a decision absolving Nicolas Rafols as to the one-half of the land
conveyed to him by Susana Melgar, and declaring the plaintiff owner of the other
half by express acknowledgment of the other defendants. The plaintiff appealed
Thus, in confirming the findings of the lower court, as supported by law and the evidence, the from that part of the judgment which is favorable to Nicolas Rafols.
Court of Appeals aptly ruled that Section 7 of Rule 89 of the Rules of Court is not applicable, since
the mortgage was constituted in her personal capacity and not in her capacity as administratrix of
the estate of her husband. The lower court absolved Nicolas Rafols upon the theory that Susana Melgar
could not have sold anything to Pedro Cui because the land was then in custodia
legis, that is, under judicial administration. This is error. That the land could not
Nevertheless, petitioner, citing the cases of Picardal, et al. vs. Lladas (21 SCRA 1483) ordinary be levied upon while in custodia legis, does not mean that one of the
and Fernandez, et al. vs. Maravilla (10 SCRA 589), further argues that in the settlement heirs may not sell the right, interest or participation which he has or might have in
proceedings of the estate of the deceased spouse, the entire conjugal partnership property of the the lands under administration. The ordinary execution of property in custodia
marriage is under administration. While such may be in a sense true, that fact alone is not legis is prohibited in order to avoid interference with the possession by the court.
sufficient to invalidate the whole mortgage, willingly and voluntarily entered into by the petitioner. But the sale made by an heir of his share in an inheritance, subject to the result
An opposite view would result in an injustice. Under similar circumstances, this Court applied the of the pending administration, in no wise stands in the way of such
provisions of Article 493 of the Civil Code, where the heirs as co-owners shall each have the full administration.
ownership of his part and the fruits and benefits pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even effect of the alienation or mortgage, with respect to the co-
owners, shall be limited to the portion which may be allotted to him in the division upon the The reference to judicial approval in Sec. 7, Rule 89 of the Rules of Court cannot adversely affect
the substantiverights of private respondent to dispose of her Ideal [not inchoate, for the conjugal
partnership ended with her husband's death, and her hereditary rights accrued from the moment
of the death of the decedent (Art. 777, Civil Code) share in the co-heirship and/or co-ownership
formed between her and the other heirs/co-owners (See Art. 493, Civil Code, supra.). Sec. 7, Art.
89 of the Civil Code applies in a case where judicial approval has to be sought in connection with,
for instance, the sale or mortgage of property under administration for the payment, say of a
conjugal debt, and even here, the conjugal and hereditary shares of the wife are excluded from
the requisite judicial approval for the reason already adverted to hereinabove, provided of course
no prejudice is caused others, including the government.

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

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


Yap (Chairman), Melencio-Herrera, Padilla and Sarmiento, JJ., concur.

Republic of the Philippines The decedent was succeeded by eight heirs, two of whom are the petitioners herein, and the
SUPREME COURT others are the private respondents.
Due to the prolonged pendency of the case before the respondent Court for sixteen years,
SECOND DIVISION respondents-heirs filed a "Motion for Approval of Sale", on October 4, 1989. The said sale involved
the properties covered by Transfer Certificate of Title Nos. 155569, 120145, 9145, and 18709, all
of which are registered in Quezon City, and form part of the estate. The consideration for said lots
was twelve (12) million pesos and by that time, they already had a buyer. It was further stated in
said Motion that respondents-heirs have already received their proportionate share of the six (6)
G.R. No. 102380 January 18, 1993
million pesos paid by the buyer, Yu Hwa Ping, as earnest money; that the balance of
P6,000,000.00 is more than enough to pay the unsettled claims against the estate. Thus, they
HERODOTUS P. ACEBEDO and DEMOSTHENES P. ACEBEDO, petitioners, prayed for the Court to direct the administrator, Herodotus Acebedo (referred to as petitioner-
vs. administrator hereafter):
1. to sell the properties mentioned in the motion;
HWA PING, respondents.
2. with the balance of P6 million, to pay all the claims against the Estate; and
Heminio L. Ruiz for petitioners.
3. to distribute the residue among the Heirs in final settlement of the Estate.
Vicente D. Millora for private respondents.

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

Romero A. Yu for respondent Yu Hua Ping.
Sale", to wit:

1. That he has learned that some of the heirs herein have sold some real estate
property of the Estate located at Balintawak, Quezon City, without the knowledge
CAMPOS, JR., J.: of the herein administrator, without the approval of this Honorable Court and of
some heirs, and at a shockingly low price;
The lower court's jurisdiction in approving a Deed of Conditional Sale executed by respondents-
heirs and ordering herein administrator-petitioner Herodotus Acebedo to sell the remaining 2. That he is accordingly hereby registering his vehement objection to the
portions of said properties, despite the absence of its prior approval as a probate court, is being approval of the sale, perpetrated in a manner which can even render the
challenged in the case at bar. proponents of the sale liable for punishment for contempt of this Honorable
The late Felix Acebedo left an estate consisting of several real estate properties located in
Quezon City and Caloocan City, with a conservative estimated value of about P30 million. Said 3. The herein Administrator instead herein prays this Honorable Court to
estate allegedly has only the following unsettled claims: authorize the sale of the above mentioned property of the Estate to generate
funds to pay certain liabilities of the Estate and with the approval of this
a. P87,937.00 representing unpaid real estate taxes due Quezon City; Honorable Court if warranted, to give the heirs some advances chargeable
against theirs (sic) respective shares, and, for the purpose to authorize the herein
b. P20,244.00 as unpaid real estate taxes due Caloocan City; Administrator, and the other heirs to help the Administrator personally or through
a broker, to look for a buyer for the highest obtainable price, subject always to
the approval of this Honorable Court.1
c. The unpaid salaries/allowances of former Administrator Miguel Acebedo, and
the incumbent Administrator Herodotus Acebedo; and
On October 30, 1989, herein petitioners moved to be given a period of forty-five (45) days within
which to look for a buyer who will be willing to buy the properties at a price higher than
d. Inheritance taxes that may be due on the net estate. P12,000,000.00.
The case was set for hearing on December 15, 1989. However, by said date, petitioners have not Petitioners, then, instead filed a "Supplemental Opposition" to the approval of the Deed of
found any buyer offering better terms. Thus, they asked the Court, on February 8, 1990, for an in Conditional Sale.
extendible period of thirty days to look for a buyer.
On March 29, 1991, the respondent Court issued the challenged Order, the dispositive portion of
Petitioner-administrator then filed a criminal complaint for falsification of a public document against which states, to wit:
Yu Hwa Ping and notary public Eugenio Obon on February 26, 1990. He initiated this complaint
upon learning that it was Yu Hwa Ping who caused the notarization of the Deed of Conditional WHEREFORE, the Order dated August 7, 1990, is hereby lifted, reconsidered
Sale wherein allegedly petitioner-administrator's signature was made to appear. He also learned and set aside, and another one is hereby issued as follows:
that after he confronted the notary public of the questioned document, the latter revoked his
notarial act on the same.
1. Approving the conditional sale, dated September 10, 1989, executed by the
heirs-movants, in favor of Yu Hwa Ping, pertaining to their respective shares in
On April 2, 1990, petitioner-administrator filed the civil action to secure the declaration by the the properties covered by TCT Nos. 155569, 120145, 1945 and 18709 of the
Court of the nullity of the Deed of Conditional Sale and the Deed of Absolute Sale. Register of Deeds of Quezon City;

The period granted herein petitioners having lapsed without having found a buyer, petitioner 2. Ordering the administrator Herodotus Acebedo to sell the remaining portions
Demosthenes Acebedo sought to nullify the Orders granting them several periods within which to of the said properties also in favor of Yu Hwa Ping at the same price as the sale
look for a better buyer. Respondents filed a comment thereon. executed by the herein heirs-movants;

Having miserably failed to find a better buyer, after seven long months, petitioner-administrator 3. Ordering Yu Hwa Ping to deposit with the Court the total remaining balance of
filed another "Opposition to Approval of Sale", dated May 10, 1990, maintaining that the sale the purchase price for the said lots within TWENTY (20) DAYS from notice
should wait for the country to recover from the effects of the coup d'etat attempts, otherwise, the hereof;
properties should be divided among the heirs.
4. The motion to cite former administrator Miguel Acebedo in contempt of court,
On June 21, 1990, petitioners filed a "Motion for Leave of Court to Mortgage and Lease some of resulting from his failure to submit the owner's copy of TCT Nos. 155569, and
the Properties of the Estate". To this Motion, respondents filed an Opposition on the following 120145 is hereby denied.3
grounds : that the motion is not proper because of the pending motion to approve the sale of the
same properties; that said conditional sale was initiated by petitioner-administrator who had earlier
Yu Hwa Ping, on April 4, 1991, deposited the remaining balance of the purchase price for the
signed a receipt for P500,000.00 as earnest money; that the approval of the sale would mean Yu
properties subject of the Deed of Conditional Sale in the amount of P6,500,000.00.
Hwa Ping's assumption of payment of the realty taxes; that the estate has no further debts and
thus, the intestate administrator may be terminated.
Petitioners herein received the questioned Order on April 11, 1991. Twenty one (21) days
thereafter, they filed a Motion for Reconsideration, praying that the Court reinstate its Order of
On August 17, 1990, respondent Court issued an Order, the dispositive portion of which, stated,
August 17, 1990. To this, private respondents filed their Opposition.4
among others, to wit:2

Instead of making a reply, petitioners herein filed a Supplemental Motion for Reconsideration. The
b. the motion filed by the heirs-movants, dated October 4, 1989, praying that the
motions for reconsideration of herein petitioners were denied by the respondent Court on August
new administrator be directed to sell the properties covered by TCT Nos.
23, 1991.
155569, 120145, 9145 and 18709, in favor of Yu Hwa Ping is hereby denied; and

c. the new administrator is hereby granted leave to mortgage some properties of On September 23, 1991, herein petitioners filed a Motion for Partial Reconsideration, hoping for
the estate at a just and reasonable amount, subject to the approval of the Court. the last time that they would be able to convince the Court that its Order dated March 29, 1991 in
effect approving the conditional sale is erroneous and beyond its jurisdiction.
On December 4, 1990, the respondent Judge issued an order resolving to call the parties to a
On October 17, 1991, the respondent Court denied the Motion for Partial Reconsideration for "lack
conference on December 17, 1990. The conference was held, but still the parties were unable to
of merit".
arrive at an agreement. So, on January 4, 1991, it was continued, wherein the parties actually
agreed that the heirs be allowed to sell their shares of the properties to Yu Hwa Ping for the price
already agreed upon, while herein petitioners negotiate for a higher price with Yu Hwa Ping. On November 7, 1991, private respondents filed a Motion for Execution of the Order dated March
29, 1991. This was pending resolution when the petitioners filed this Petition for Certiorari.
The controversy in the case at bar revolves around one question: Is it within the jurisdiction of the As early as 1942, this Court has recognized said right of an heir to dispose of property under
lower court, acting as a probate court, to issue an Order approving the Deed of Conditional Sale administration. In the case of Teves de Jakosalem vs. Rafols, et al.,14 it was said that the sale
executed by respondents-heirs without prior court approval and to order herein Administrator to made by an heir of his share in an inheritance, subject to the result of the pending administration,
sell the remaining portion of said properties? in no wise, stands in the way of such administration. The Court then relied on the provision of the
Old Civil Code, Article 440 and Article 339 which are still in force as Article 533 and Article 493,
We answer in the positive? respectively, in the new Civil Code. The Court also cited the words of a noted civilist, Manresa:
"Upon the death of a person, each of his heirs 'becomes the undivided owner of the whole estate
left with respect to the part or portion which might be adjudicated to him, a community of
In the case of Dillena vs. Court of Appeals,5 this Court made a pronouncement that it is within the ownership being thus formed among the co-owners of the estate which remains undivided'."
jurisdiction of the probate court to approve the sale of properties of a deceased person by his
prospective heirs before final adjudication. Hence, it is error to say that this matter should be
threshed out in a separate action. Private respondents having secured the approval of the probate court, a matter which is
unquestionably within its jurisdiction, and having established private respondents' right to alienate
the decedent's property subject of administration, this Petition should be dismissed for lack of
The Court further elaborated that although the Rules of Court do not specifically state that the sale merit.
of an immovable property belonging to an estate of a decedent, in a special proceeding, should be
made with the approval of the court, this authority is necessarily included in its capacity as a
probate court. Therefore, it is clear that the probate court in the case at bar, acted within its PREMISES considered, Petition is hereby DISMISSED. With Costs.
jurisdiction in issuing the Order approving the Deed of Conditional Sale.
We cannot countenance the position maintained by herein petitioners that said conditional sale is
null and void for lack of prior court approval. The sale precisely was made conditional, the Narvasa, C.J., Feliciano, Regalado and Nocon, JJ., concur.
condition being that the same should first be approved by the probate court.

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

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

The right of an heir to dispose of the decedent's property, even if the same is under administration,
is based on the Civil Code provision9 stating that the possession of hereditary property is deemed
transmitted to the heir without interruption and from the moment of the death of the decedent, in
case the inheritance is accepted. Where there are however, two or more heirs, the whole estate of
the decedent is, before its partition, owned in common by such heirs. 10

The Civil Code, under the provisions on co-ownership, further qualifies this right.11 Although it is
mandated that each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and thus may alienate, assign or mortgage it, and even substitute
another person in its enjoyment, the effect of the alienation or the mortgage, with respect to 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.12 In other words, the law does not prohibit a co-owner from
selling, alienating or mortgaging his ideal share in the property held in common. 13
Republic of the Philippines As regards Lot No. 1091, Donato executed on May 28, 1974 a Deed of Sale over the same in
SUPREME COURT favor of petitioner Juliana P. Fanesa, his daughter. 5
In the meantime, sometime in 1952, for non-payment of taxes, Lot No. 1091 was forfeited and sold
THIRD DIVISION at a public auction, with the Provincial Government of Negros Occidental being the buyer. A
Certificate of Sale over the land was executed by the Provincial Treasurer in favor of the Provincial
Board of Negros Occidental. 6

G.R. No. 61584 November 25, 1992 On May 29, 1974, Juliana P. Fanesa redeemed the property from the Provincial Government of
Negros Occidental for the amount of P2,959.09. 7
vs. On learning of these transactions, respondents children of the late Pascual Paulmitan filed on
COURT OF APPEALS, ALICIO PAULMITAN, ELENA PAULMITAN, ABELINO PAULMITAN, January 18, 1975 with the Court of First Instance of Negros Occidental a Complaint against
ANITA PAULMITAN, BAKING PAULMITAN, ADELINA PAULMITAN and ANITO petitioners to partition the properties plus damages.
PAULMITAN, respondents.
Petitioners set up the defense of prescription with respect to Lot No. 757 as an affirmative
defense, contending that the Complaint was filed more than eleven years after the issuance of a
transfer certificate of title to Donato Paulmitan over the land as consequence of the registration
with the Register of Deeds, of Donato's affidavit extrajudicially adjudicating unto himself Lot No.
757. As regards Lot No. 1091, petitioner Juliana P. Fanesa claimed in her Answer to the
Complaint that she acquired exclusive ownership thereof not only by means of a deed of sale
This is a petition for review on certiorari seeking the reversal of the decision 1 of the Court of executed in her favor by her father, petitioner Donato Paulmitan, but also by way of redemption
Appeals, dated July 14, 1982 in CA-G.R. No. 62255-R entitled "Alicio Paulmitan, et al. v. Donato from the Provincial Government of Negros Occidental.
Sagario Paulmitan, et al." which affirmed the decision 2 of the then Court of First Instance (now
RTC) of Negros Occidental, 12th Judicial District, Branch IV, Bacolod City, in Civil Case No.
Acting on the petitioners' affirmative defense of prescription with respect to Lot No. 757, the trial
court issued an order dated April 22, 1976 dismissing the complaint as to the said property upon
finding merit in petitioners' affirmative defense. This order, which is not the object of the present
The antecedent facts are as follows: petition, has become final after respondents' failure to appeal therefrom.

Agatona Sagario Paulmitan, who died sometime in 1953, 3 left the two following parcels of land Trial proceeded with respect to Lot No. 1091. In a decision dated May 20, 1977, the trial court
located in the Province of Negros Occidental: (1) Lot No. 757 with an area of 1,946 square meters decided in favor of respondents as to Lot No. 1091. According to the trial court, the respondents,
covered by Original Certificate of Title (OCT) No. RO-8376; and (2) Lot No. 1091 with an area of as descendants of Agatona Sagario Paulmitan were entitled to one-half (1/2) of Lot No. 1091, pro
69,080 square meters and covered by OCT No. RO-11653. From her marriage with Ciriaco indiviso. The sale by petitioner Donato Paulmitan to his daughter, petitioner Juliana P. Fanesa, did
Paulmitan, who is also now deceased, Agatona begot two legitimate children, namely: Pascual not prejudice their rights. And the repurchase by Juliana P. Fanesa of the land from the Provincial
Paulmitan, who also died in 1953, 4 apparently shortly after his mother passed away, and Donato Government of Negros Occidental did not vest in Juliana exclusive ownership over the entire land
Paulmitan, who is one of the petitioners. Petitioner Juliana P. Fanesa is Donato's daughter while but only gave her the right to be reimbursed for the amount paid to redeem the property. The trial
the third petitioner, Rodolfo Fanes, is Juliana's husband. Pascual Paulmitan, the other son of court ordered the partition of the land and directed petitioners Donato Paulmitan and Juliana P.
Agatona Sagario, is survived by the respondents, who are his children, name: Alicio, Elena, Fanesa to pay private respondents certain amounts representing the latter's share in the fruits of
Abelino, Adelina, Anita, Baking and Anito, all surnamed Paulmitan. the land. On the other hand, respondents were directed to pay P1,479.55 to Juliana P. Fanesa as
their share in the redemption price paid by Fanesa to the Provincial Government of Negros
Until 1963, the estate of Agatona Sagario Paulmitan remained unsettled and the titles to the two Occidental. The dispositive portion of the trial court's decision reads:
lots mentioned above remained in the name of Agatona. However, on August 11, 1963, petitioner
Donato Paulmitan executed an Affidavit of Declaration of Heirship, extrajudicially adjudicating unto WHEREFORE, judgment is hereby rendered on the second cause of action
himself Lot No. 757 based on the claim that he is the only surviving heir of Agatona Sagario. The pleaded in the complain as follows:
affidavit was filed with the Register of Deeds of Negros Occidental on August 20, 1963, cancelled
OCT No. RO-8376 in the name of Agatona Sagario and issued Transfer Certificate of Title (TCT)
1. The deed of sale (Exh. "F") dated May 28, 1974 is valid insofar as the one-half
No. 35979 in Donato's name.
undivided portion of Lot 1091 is concerned as to vest ownership over said half
portion in favor of defendant Juliana Fanesa and her husband Rodolfo Fanesa, their mother died intestate. At that stage, the children of Donato and Pascual did not yet have any
while the remaining half shall belong to plaintiffs, pro-indiviso; right over the inheritance since "[i]n every inheritance, the relative nearest in degree excludes the
more distant
2. Lot 1091, Cadastral Survey of Pontevedra, Province of Negros Occidental, ones." 11 Donato and Pascual excluded their children as to the right to inherit from Agatona
now covered by TCT No. RO-11653 (N.A.), is ordered partitioned. The parties Sagario Paulmitan, their mother.
must proceed to an actual partition by property instrument of partition, submitting
the corresponding subdivision within sixty (60) days from finality of this decision, From the time of the death of Agatona Sagario Paulmitan to the subsequent passing away of her
and should they fail to agree, commissioners of partition may be appointed by the son Pascual in 1953, the estate remained unpartitioned. Article 1078 of the Civil Code provides:
Court; "Where there are two or more heirs, the whole estate of the decedent is, before its partition,
owned in common by such heirs, subject to the payment of debts of the deceased." 12 Donato and
3. Pending the physical partition, the Register of Deeds of Negros Occidental is Pascual Paulmitan were, therefore, co-owners of the estate left by their mother as no partition was
ordered to cancel Original Certificate of Title No. RO-11653 (N.A.) covering Lot ever made.
1091, Pontevedra Cadastre, and to issue in lieu thereof a new certificate of title in
the name of plaintiffs and defendants, one-half portion each,pro-indiviso, as When Pascual Paulmitan died intestate in 1953, his children, the respondents, succeeded him in
indicated in paragraph 1 above; the co-ownership of the disputed property. Pascual Paulmitan's right of ownership over an
undivided portion of the property passed on to his children, who, from the time of Pascual's death,
4. Plaintiffs are ordered to pay, jointly and severally, defendant Juliana Fanesa became co-owners with their uncle Donato over the disputed decedent estate.
the amount of P1,479.55 with interest at the legal rate from May 28, 1974 until
paid; Petitioner Juliana P. Fanesa claims ownership over Lot No. 1091 by virtue of two transactions,
namely: (a) the sale made in her favor by her father Donato Paulmitan; and (b) her redemption of
5 Defendants Donato Sagario Paulmitan and Juliana Paulmitan Fanesa are the land from the Provincial of Negros Occidental after it was forfeited for non-payment of taxes.
ordered to account to plaintiffs and to pay them, jointly and severally, the value of
the produce from Lot 1091 representing plaintiffs' share in the amount of When Donato Paulmitan sold on May 28, 1974 Lot No. 1091 to his daughter Juliana P. Fanesa, he
P5,000.00 per year from 1966 up to the time of actual partition of the property, was only a co-owner with respondents and as such, he could only sell that portion which may be
and to pay them the sum of P2,000.00 as attorney's fees as well as the costs of allotted to him upon termination of the co-ownership. 13 The sale did not prejudice the rights of
the suit. respondents to one half (1/2) undivided share of the land which they inherited from their father. It
did not vest ownership in the entire land with the buyer but transferred only the seller's pro-
xxx xxx xxx indiviso share in the property 14 and consequently made the buyer a co-owner of the land until it is
partitioned. In Bailon-Casilao v. Court of Appeals, 15 the Court, through Justice Irene R. Cortes,
outlined the effects of a sale by one co-owner without the consent of all the co-owners, thus:
On appeal, the Court of Appeals affirmed the trial court's decision. Hence this petition.
The rights of a co-owner of a certain property are clearly specified in Article 493
To determine the rights and obligations of the parties to the land in question, it is well to review, of the Civil Code, Thus:
initially, the relatives who survived the decedent Agatona Sagario Paulmitan. When Agatona died
in 1953, she was survived by two (2) sons, Donato and Pascual. A few months later in the same
year, Pascual died, leaving seven children, the private respondents. On the other had, Donato's Art. 493. Each co-owner shall have the full ownership of his part and of the fruits
sole offspring was petitioner Juliana P. Fanesa. and benefits pertaining thereto, and he may therefore alienate, assign or
mortgage it and even substitute another person its enjoyment, except when
personal rights are involved. But the effect of the alienation or mortgage, with
At the time of the relevant transactions over the properties of decedent Agatona Sagario
respect to the co-owners, shall be limited to the portion which may be allotted to
Paulmitan, her son Pascual had died, survived by respondents, his children. It is, thus, tempting to
him in the division upon the termination of the co-ownership. [Emphasis
apply the principles pertaining to the right of representation as regards respondents. It must, supplied.]
however, be borne in mind that Pascual did no predecease his mother, 8 thus precluding the
operation of the provisions in the Civil Code on the right of representation 9 with respect to his
children, the respondents. When Agatona Sagario Paulmitan died intestate in 1952, her two (2) As early as 1923, this Court has ruled that even if a co-owner sells the whole
sons Donato and Pascual were still alive. Since it is well-settled by virtue of Article 777 of the Civil property as his, the sale will affect only his own share but not those of the other
Code that "[t]he rights to the succession are transmitted from the moment of the death of the co-owners who did not consent to the sale [Punsalan v. Boon Liat, 44 Phil. 320
decedent," 10 the right of ownership, not only of Donato but also of Pascual, over their respective (1923)]. This is because under the aforementioned codal provision, the sale or
shares in the inheritance was automatically and by operation of law vested in them in 1953 when other disposition affects only his undivided share and the transferee gets only
what would correspond to his grantor in the partition of the thing owned in no doubt that redemption of property entails a necessary expense. Under the
common [Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of Civil Code:
the sales made by Rosalia and Gaudencio Bailon which are valid with respect to
their proportionate shares, and the subsequent transfers which culminated in the Art. 488. Each co-owner shall have a right to compel the other co-owners to
sale to private respondent Celestino Afable, the said Afable thereby became a contribute to the expenses of preservation of the thing or right owned in common
co-owner of the disputed parcel of land as correctly held by the lower court since and to the taxes. Any one of the latter may exempt himself from this obligation by
the sales produced the effect of substituting the buyers in the enjoyment thereof renouncing so much of his undivided interest as may be equivalent to his share
[Mainit v. Bandoy, 14 Phil. 730 (1910)]. of the expenses and taxes. No such waiver shall be made if it is prejudicial to the
From the foregoing, it may be deduced that since a co-owner is entitled to sell his
undivided share, a sale of the entire property by one co-owner without the The result is that the property remains to be in a condition of co-ownership. While
consent of the other co-owners is not null and void. However, only the rights of a vendee a retro, under Article 1613 of the Code, "may not be compelled to
the co-owner-seller are transferred, thereby making the buyer a co-owner of the consent to a partial redemption," the redemption by one co-heir or co-owner of
property. the property in its totality does not vest in him ownership over it. Failure on the
part of all the co-owners to redeem it entitles the vendee a retro to retain the
Applying this principle to the case at bar, the sale by petitioner Donato Paulmitan of the land to his property and consolidate title thereto in his name (Supra, art. 1607). But the
daughter, petitioner Juliana P. Fanesa, did not give to the latter ownership over the entire land but provision does not give to the redeeming co-owner the right to the entire
merely transferred to her the one half (1/2) undivided share of her father, thus making her the co- property. It does not provide for a mode of terminating a co-ownership.
owner of the land in question with the respondents, her first cousins.
Although petitioner Fanesa did not acquire ownership over the entire lot by virtue of the
Petitioner Juliana P. Fanesa also claims ownership of the entire property by virtue of the fact that redemption she made, nevertheless, she did acquire the right to reimbursed for half of the
when the Provincial Government of Negros Occidental bought the land after it was forfeited for redemption price she paid to the Provincial Government of Negros Occidental on behalf of her co-
non-payment of taxes, she redeemed it. owners. Until reimbursed, Fanesa hold a lien upon the subject property for the amount due her. 17

The contention is without merit. Finally, petitioners dispute the order of the trial court, which the Court of Appeals affirmed, for
them to pay private respondents P5,000.00 per year from 1966 until the partition of the estate
The redemption of the land made by Fanesa did not terminate the co-ownership nor give her title which represents the share of private respondents in the fruits of the land. According to
to the entire land subject of the co-ownership. Speaking on the same issue raised by petitioners, petitioners, the land is being leased for P2,000.00 per year only. This assigned error, however
the Court, in Adille v. Court of Appeals, 16 resolved the same with the following pronouncements: raises a factual question. The settled rule is that only questions of law may be raised in a petition
for review. As a general rule, findings of fact made by the trial court and the Court of Appeals are
final and conclusive and cannot be reviewed on appeal. 18
The petition raises a purely legal issue: May a co-owner acquire exclusive
ownership over the property held in common?
WHEREFORE, the petition is DENIED and the decision of the Court of Appeals AFFIRMED.
Essentially, it is the petitioners' contention that the property subject of dispute
devolved upon him upon the failure of his co-heirs to join him in its redemption SO ORDERED.
within the period required by law. He relies on the provisions of Article 1515 of
the old Civil Code, Article 1613 of the present Code, giving the vendee a retro the Gutierrez, Jr., Bidin, Davide, Jr., Romero and Melo, JJ., concur.
right to demand redemption of the entire property.

There is no merit in this petition.

The right of repurchase may be exercised by co-owner with respect to his share
alone (CIVIL CODE, art. 1612, CIVIL CODE (1889), art. (1514.). While the
records show that petitioner redeemed the property in its entirety, shouldering the
expenses therefor, that did not make him the owner of all of it. In other words, it
did not put to end the existing state of co-ownership (Supra, Art. 489). There is
Republic of the Philippines Because of the refusal of respondent to give in to petitioner's demands, the latter filed on 12
SUPREME COURT January 1979 an action to compel the sale of the house and lot so that the they could divide the
Manila proceeds between them.

FIRST DIVISION 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) to respondent. Petitioner also prayed for monthly rentals
for the use of the house by respondent after their father died.

G.R. No. 76351 October 29, 1993 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 the sale 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
VIRGILIO B. AGUILAR, petitioner,
the property.
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 the pre-trial order, with private respondent
Jose F. Manacop for petitioner.
executing a special power of attorney to his lawyer to appear at the pre-trial and enter into any
amicable settlement in his behalf.1
Siruello, Muyco & Associates Law Office for private respondent.
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 accompanying his 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
This is a petition for review on certiorari seeking to reverse and set aside the Decision of the Court motion and directed that the pre-trial should continue as scheduled.
of Appeals in CA-GR CV No. 03933 declaring null and void 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 When the case was called for pre-trial as scheduled on 26 April 1979, plaintiff and his counsel
First Instance of Rizal, Pasay City, Branch 30, and directing the trial court to set the case for pre- appeared. Defendant did not appear; neither his counsel in whose favor he executed a special
trial conference. power of attorney to represent him at the pre-trial. Consequently, the trial court, on motion of
plaintiff, declared defendant as in default and ordered reception of plaintiff's evidence ex parte.
Petitioner Virgilio and respondent Senen are brothers; Virgilio is the youngest of seven (7) children
of the late Maximiano Aguilar, while Senen is the fifth. On 28 October 1969, the two brothers On 7 May 1979, defendant through counsel filed an omnibus motion to reconsider the order of
purchased a house and lot in Parañaque where their father could spend and enjoy his remaining default and to defer reception of evidence. The trial court denied the motion and plaintiff presented
years in a peaceful neighborhood. Initially, the brothers agreed that Virgilio's share in the co- his evidence.
ownership was two-thirds while that of Senen was one-third. By virtue of a written memorandum
dated 23 February 1970, Virgilio and Senen agreed that henceforth their interests in the house
On 26 July 1979, rendering judgment by default against defendant, the trial court found him and
and lot should be equal, with Senen assuming the remaining mortgage obligation of the original
plaintiff to be co-owners of the house and lot, in equal shares on the basis of their written
owners with the Social Security System (SSS) in exchange for his possession and enjoyment of agreement. However, it ruled that plaintiff has been deprived of his participation in the property by
the house together with their father.
defendant's continued enjoyment of the house and lot, free of rent, despite demands for rentals
and continued maneuvers of defendants, to delay partition. The trial court also upheld the right of
Since Virgilio was then disqualified from obtaining a loan from SSS, the brothers agreed that the plaintiff as co-owner to demand partition. Since plaintiff could not agree to the amount offered by
deed of sale would be executed and the title registered in the meantime in the name of Senen. It defendant for the former's share, the trial court held that this property should be sold to a third
was further agreed that Senen would take care of their father and his needs since Virgilio and his person and the proceeds divided equally between the parties.
family were staying in Cebu.
The trial court likewise ordered defendant to vacate the property and pay plaintiff P1,200.00 as
After Maximiano Aguilar died in 1974, petitioner demanded from private respondent that the latter rentals2 from January 1975 up to the date of decision plus interest from the time the action was
vacate the house and that the property be sold and proceeds thereof divided among them. filed.
On 17 September 1979, defendant filed an omnibus motion for new trial but on 22 October 1979 Moreover, the trial court denied the motion for postponement three (3) days before the scheduled
the trial court denied the motion. pre-trial. If indeed, counsel for respondent could not attend the pre-trial on the scheduled date,
respondent at least should have personally appeared in order not to be declared as in default. But,
Defendant sought relief from the Court of Appeals praying that the following orders and decision of since nobody appeared for him, the order of the trial court declaring him as in default and directing
the trial court be set aside: (a) the order of 23 April 1970 denying defendants motion for the presentation of petitioner's evidence ex parte was proper.7
postponement of the pre-trial set on 26 April 1979; (b) the order of 26 April 1979 declaring him in
default and authorizing plaintiff to present his evidence ex-parte; (e) the default judgment of 26 With regard to the merits of the judgment of the trial court by default, which respondent appellate
July 1979; and, (d) the order dated 22 October 1979 denying his omnibus motion for new trial. court did not touch upon in resolving the appeal, the Court holds that on the basis of the pleadings
of the parties and the evidence presented ex parte, petitioner and respondents are co-owners of
On 16 October 1986, the Court of Appeals set aside the order of the trial court of 26 April 1979 as subject house and lot in equal shares; either one of them may demand the sale of the house and
well as the assailed judgment rendered by default., The appellate court found the explanation of lot at any time and the other cannot object to such demand; thereafter the proceeds of the sale
counsel for defendant in his motion to cancel pre-trial as satisfactory and devoid of a manifest shall be divided equally according to their respective interests.
intention to delay the disposition of the case. It also ruled that the trial court should have granted
the motion for postponement filed by counsel for defendant who should not have been declared as Private respondent and his family refuse to pay monthly rentals to petitioner from the time their
in default for the absence of his counsel. father died in 1975 and to vacate the house so that it can be sold to third persons. Petitioner
alleges that respondent's continued stay in the property hinders its disposal to the prejudice of
Petitioner now comes to us alleging that the Court of Appeals erred (1) in not holding that the petitioner. On the part of petitioner, he claims that he should be paid two-thirds (2/3) of a monthly
motion of defendant through counsel to cancel the pre-trial was dilatory in character and (2) in rental of P2,400.00 or the sum of P1,600.00.
remanding the case to the trial court for pre-trial and trial.
In resolving the dispute, the trial court ordered respondent to vacate the property so that it could
The issues to be resolved are whether the trial court correctly declared respondent as in default for be sold to third persons and the proceeds divided between them equally, and for respondent to
his failure to appear at the pre-trial and in allowing petitioner to present his evidence ex-parte, and pay petitioner one-half (1/2) of P2,400.00 or the sum of P1,200.00 as monthly rental, conformably
whether the trial court correctly rendered the default judgment against respondent. with their stipulated sharing reflected in their written agreement.

We find merit in the petition. 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 which we here declare to commence only after the
trial court ordered respondent to vacate in accordance with its order of 26 July 1979.
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-trial conference 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 Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the co-
scheduled pre-trial, the trial, court has authority to declare respondent in default.5 ownership, and that each co-owner may demand at any time partition of the thing owned in
common insofar as his share is concerned. Corollary to this rule, Art. 498 of the Code states that
whenever the thing is essentially, indivisible and the co-owners cannot agree that it be, allotted to
Although respondent's counsel filed a motion to postpone pre-trial hearing, the grant or denial
one of them who shall indemnify the others, it shall be sold and its proceeds accordingly
thereof is within the sound discretion of the trial court, which should take into account two factors distributed. This is resorted to (1) when the right to partition the property is invoked by any of the
in the grant or denial of motions for postponement, namely: (a) the reason for the postponement co-owners but because of the nature of the property it cannot be subdivided or its subdivision
and (b) the merits of the case of movant.6
would prejudice the interests of the co-owners, and (b) the co-owners are not in agreement as to
who among them shall be allotted or assigned the entire property upon proper reimbursement of
In the instant case, the trial court found the reason stated in the motion of counsel for respondent the co-owners. In one case,8 this Court upheld the order of the trial court directing the holding of a
to cancel the pre-trial to be without merit. Counsel's explanation that he had to go to by boat as public sale of the properties owned in common pursuant to Art. 498 of the Civil Code.
early as 25 March 1979 to fetch his wife and accompany her to a wedding in Dumaguete City on
27 April 1979 where she was one of the principal sponsors, cannot be accepted. We find it
However, being a co-owner respondent has the right to use the house and lot without paying any
insufficient to justify postponement of the pre-trial, and the Court of Appeals did not act wisely in
compensation to petitioner, as he may use the property owned in common long as it is in
overruling the denial. We sustain the trial court and rule that it did not abuse its discretion in
accordance with the purpose for which it is intended and in a manner not injurious to the interest
denying the postponement for lack of merit. Certainly, to warrant a postponement of a mandatory
of the other co-owners.9 Each co-owner of property held pro indiviso exercises his rights over the
process as pre-trial would require much more than mere attendance in a social function. It is time whole property and may use and enjoy the same with no other limitation than that he shall not
indeed we emphasize that there should be much more than mere perfunctory treatment of the pre- injure the interests of his co-owners, the reason being that until a division is made, the respective
trial procedure. Its observance must be taken seriously if it is to attain its objective, i.e., the speedy share of each cannot be determined and every co-owner exercises, together with his co-
and inexpensive disposition of cases.
participants joint ownership over the pro indiviso property, in addition to his use and enjoyment of
same. 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 allegation that he has been preventing the sale of the
property by his continued occupancy of the premises, justice and equity demand that respondent
and his family 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 appertaining to 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, the co-ownership was deemed terminated and
the right to enjoy the possession jointly also ceased. Thereafter, the continued stay of respondent
and his family in the house prejudiced the interest of petitioner as the property should have been
sold and the proceeds divided equally between them. To this extent 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 decision of 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 to vacate 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 with interest at the legal rate
from the time he received the decision of the trial court directing him to vacate until he effectively
leaves the premises.

The trial court is further directed to take immediate steps to implement this decision conformably
with Art. 498 of the Civil Code and the Rules of Court. This decision is final and executory.


Cruz, Davide, Jr., Quiason, JJ., concur.

Republic of the Philippines Alipio Moreto died intestate on June 30, 1943 leaving as his heir herein plaintiff Josefina Moreto.
Manila Pablo Moreto died intestate on April 25, 1942 leaving no issue and as his heirs his brother plaintiff
Leandro Moreto and the other plaintiffs herein.
On May 6, 1946, Monica Maniega died intestate in Calamba, Laguna.
G.R. No. L-33187 March 31, 1980
On July 30, 1952, or more than six (6) years after the death of his wife Monica Maniega, Flaviano
CORNELIO PAMPLONA alias GEMINIANO PAMPLONA and APOLONIA ONTE, petitioners, Moreto, without the consent of the heirs of his said deceased wife Monica, and before any
vs. liquidation of the conjugal partnership of Monica and Flaviano could be effected, executed in favor
VIVENCIO MORETO, VICTOR MORETO, ELIGIO MORETO, MARCELO MORETO, PAULINA of Geminiano Pamplona, married to defendant Apolonia Onte, the deed of absolute sale (Exh. "1")
MORETO, ROSARIO MORETO, MARTA MORETO, SEVERINA MENDOZA, PABLO covering lot No. 1495 for P900.00. The deed of sale (Exh. "1") contained a description of lot No.
MENDOZA, LAZARO MENDOZA, VICTORIA TUIZA, JOSEFINA MORETO, LEANDRO 1495 as having an area of 781 square meters and covered by transfer certificate of title No. 14570
MORETO and LORENZO MENDOZA, respondents. issued in the name of Flaviano Moreto, married to Monica Maniega, although the lot was acquired
during their marriage. As a result of the sale, the said certificate of title was cancelled and a new
E.P. Caguioa for petitioners. transfer certificate of title No. T-5671 was issued in the name of Geminiano Pamplona married to
Apolonia Onte (Exh. "A").
Benjamin C. Yatco for respondents.
After the execution of the above-mentioned deed of sale (Exh. "1"), the spouses Geminiano
Pamplona and Apolonia Onte constructed their house on the eastern part of lot 1496 as Flaviano
Moreto, at the time of the sale, pointed to it as the land which he sold to Geminiano Pamplona.
Shortly thereafter, Rafael Pamplona, son of the spouses Geminiano Pamplona and Apolonia
GUERRERO, J.: Onte, also built his house within lot 1496 about one meter from its boundary with the adjoining lot.
The vendor Flaviano Moreto and the vendee Geminiano Pamplona thought all the time that the
This is a petition for certiorari by way of appeal from the decision of the Court of Appeals 1 in CA- portion of 781 square meters which was the subject matter of their sale transaction was No. 1495
G.R. No. 35962-R, entitled "Vivencio Moreto, et al., Plaintiff-Appellees vs. Cornelio Pamplona, et and so lot No. 1495 appears to be the subject matter in the deed of sale (Exh. "1") although the
al., Defendants-Appellants," affirming the decision of the Court of First Instance of Laguna, Branch fact is that the said portion sold thought of by the parties to be lot No. 1495 is a part of lot No.
I at Biñan. 1496.

The facts, as stated in the decision appealed from, show that: From 1956 to 1960, the spouses Geminiano Pamplona and Apolonio Onte enlarged their house
and they even constructed a piggery corral at the back of their said house about one and one-half
Flaviano Moreto and Monica Maniega were husband and wife. During their marriage, they meters from the eastern boundary of lot 1496.
acquired adjacent lots Nos. 1495, 4545, and 1496 of the Calamba Friar Land Estate, situated in
Calamba, Laguna, containing 781-544 and 1,021 square meters respectively and covered by On August 12, 1956, Flaviano Moreto died intestate. In 1961, the plaintiffs demanded on the
certificates of title issued in the name of "Flaviano Moreto, married to Monica Maniega." defendants to vacate the premises where they had their house and piggery on the ground that
Flaviano Moreto had no right to sell the lot which he sold to Geminiano Pamplona as the same
The spouses Flaviano Moreto and Monica Maniega begot during their marriage six (6) children, belongs to the conjugal partnership of Flaviano and his deceased wife and the latter was already
namely, Ursulo, Marta, La Paz, Alipio, Pablo, and Leandro, all surnamed Moreto. dead when the sale was executed without the consent of the plaintiffs who are the heirs of Monica.
The spouses Geminiano Pamplona and Apolonia Onte refused to vacate the premises occupied
by them and hence, this suit was instituted by the heirs of Monica Maniega seeking for the
Ursulo Moreto died intestate on May 24, 1959 leaving as his heirs herein plaintiffs Vivencio, declaration of the nullity of the deed of sale of July 30, 1952 above-mentioned as regards one-half
Marcelo, Rosario, Victor, Paulina, Marta and Eligio, all surnamed Moreto. of the property subject matter of said deed; to declare the plaintiffs as the rightful owners of the
other half of said lot; to allow the plaintiffs to redeem the one-half portion thereof sold to the
Marta Moreto died also intestate on April 30, 1938 leaving as her heir plaintiff Victoria Tuiza. defendants. "After payment of the other half of the purchase price"; to order the defendants to
vacate the portions occupied by them; to order the defendants to pay actual and moral damages
La Paz Moreto died intestate on July 17, 1954 leaving the following heirs, namely, herein plaintiffs and attorney's fees to the plaintiffs; to order the defendants to pay plaintiffs P120.00 a year from
Pablo, Severina, Lazaro, and Lorenzo, all surnamed Mendoza.
August 1958 until they have vacated the premises occupied by them for the use and occupancy of The fundamental and crucial issue in the case at bar is whether under the facts and circumstances
the same. duly established by the evidence, petitioners are entitled to the full ownership of the property in
litigation, or only one-half of the same.
The defendants claim that the sale made by Flaviano Moreto in their favor is valid as the lot sold is
registered in the name of Flaviano Moreto and they are purchasers believing in good faith that the There is no question that when the petitioners purchased the property on July 30, 1952 from
vendor was the sole owner of the lot sold. Flaviano Moreto for the price of P900.00, his wife Monica Maniega had already been dead six
years before, Monica having died on May 6, 1946. Hence, the conjugal partnership of the spouses
After a relocation of lots 1495, 1496 and 4545 made by agreement of the parties, it was found out Flaviano Moreto and Monica Maniega had already been dissolved. (Article 175, (1) New Civil
that there was mutual error between Flaviano Moreto and the defendants in the execution of the Code; Article 1417, Old Civil Code). The records show that the conjugal estate had not been
deed of sale because while the said deed recited that the lot sold is lot No. 1495, the real intention inventoried, liquidated, settled and divided by the heirs thereto in accordance with law. The
of the parties is that it was a portion consisting of 781 square meters of lot No. 1496 which was the necessary proceedings for the liquidation of the conjugal partnership were not instituted by the
subject matter of their sale transaction. heirs either in the testate or intestate proceedings of the deceased spouse pursuant to Act 3176
amending Section 685 of Act 190. Neither was there an extra-judicial partition between the
surviving spouse and the heirs of the deceased spouse nor was an ordinary action for partition
After trial, the lower court rendered judgment, the dispositive part thereof being as follows:
brought for the purpose. Accordingly, the estate became the property of a community between the
surviving husband, Flaviano Moreto, and his children with the deceased Monica Maniega in the
WHEREFORE, judgment is hereby rendered for the plaintiffs declaring the deed concept of a co-ownership.
of absolute sale dated July 30, 1952 pertaining to the eastern portion of Lot 1496
covering an area of 781 square meters null and void as regards the 390.5 square
The community property of the marriage, at the dissolution of this bond by the
meters of which plaintiffs are hereby declared the rightful owners and entitled to
death of one of the spouses, ceases to belong to the legal partnership and
its possession.
becomes the property of a community, by operation of law, between the surviving
spouse and the heirs of the deceased spouse, or the exclusive property of the
The sale is ordered valid with respect to the eastern one-half (1/2) of 1781 widower or the widow, it he or she be the heir of the deceased spouse. Every co-
square meters of Lot 1496 measuring 390.5 square meters of which defendants owner shall have full ownership of his part and in the fruits and benefits derived
are declared lawful owners and entitled to its possession. therefrom, and he therefore may alienate, assign or mortgage it, and even
substitute another person in its enjoyment, unless personal rights are in question.
After proper survey segregating the eastern one-half portion with an area of (Marigsa vs. Macabuntoc, 17 Phil. 107)
390.5 square meters of Lot 1496, the defendants shall be entitled to a certificate
of title covering said portion and Transfer Certificate of Title No. 9843 of the office In Borja vs. Addision, 44 Phil. 895, 906, the Supreme Court said that "(t)here is no reason in law
of the Register of Deeds of Laguna shall be cancelled accordingly and new titles why the heirs of the deceased wife may not form a partnership with the surviving husband for the
issued to the plaintiffs and to the defendants covering their respective portions. management and control of the community property of the marriage and conceivably such a
partnership, or rather community of property, between the heirs and the surviving husband might
Transfer Certificate of Title No. 5671 of the office of the Register of Deeds of be formed without a written agreement." In Prades vs. Tecson, 49 Phil. 230, the Supreme Court
Laguna covering Lot No. 1495 and registered in the name of Cornelio Pamplona, held that "(a)lthough, when the wife dies, the surviving husband, as administrator of the
married to Apolonia Onte, is by virtue of this decision ordered cancelled. The community property, has authority to sell the property with•ut the concurrence of the children of
defendants are ordered to surrender to the office of the Register of Deeds of the marriage, nevertheless this power can be waived in favor of the children, with the result of
Laguna the owner's duplicate of Transfer Certificate of Title No. 5671 within thirty bringing about a conventional ownership in common between the father and children as to such
(30) days after this decision shall have become final for cancellation in property; and any one purchasing with knowledge of the changed status of the property will
accordance with this decision. acquire only the undivided interest of those members of the family who join in the act of
Let copy of this decision be furnished the Register of Deeds for the province of
Laguna for his information and guidance. It is also not disputed that immediately after the execution of the sale in 1952, the vendees
constructed their house on the eastern part of Lot 1496 which the vendor pointed out to them as
With costs against the defendants. 2 the area sold, and two weeks thereafter, Rafael who is a son of the vendees, also built his house
within Lot 1496. Subsequently, a cemented piggery coral was constructed by the vendees at the
back of their house about one and one-half meters from the eastern boundary of Lot 1496. Both
The defendants-appellants, not being satisfied with said judgment, appealed to the Court of vendor and vendees believed all the time that the area of 781 sq. meters subject of the sale was
Appeals, which affirmed the judgment, hence they now come to this Court. Lot No. 1495 which according to its title (T.C.T. No. 14570) contains an area of 781 sq. meters so
that the deed of sale between the parties Identified and described the land sold as Lot 1495. But We reject respondent Court's ruling that the sale was valid as to one-half and invalid as to the
actually, as verified later by a surveyor upon agreement of the parties during the proceedings of other half for the very simple reason that Flaviano Moreto, the vendor, had the legal right to more
the case below, the area sold was within Lot 1496. than 781 sq. meters of the communal estate, a title which he could dispose, alienate in favor of the
vendees-petitioners. The title may be pro-indiviso or inchoate but the moment the co-owner as
Again, there is no dispute that the houses of the spouses Cornelio Pamplona and Apolonia Onte vendor pointed out its location and even indicated the boundaries over which the fences were to
as well as that of their son Rafael Pamplona, including the concrete piggery coral adjacent thereto, be erectd without objection, protest or complaint by the other co-owners, on the contrary they
stood on the land from 1952 up to the filing of the complaint by the private respondents on July 25, acquiesced and tolerated such alienation, occupation and possession, We rule that a factual
1961, or a period of over nine (9) years. And during said period, the private respondents who are partition or termination of the co-ownership, although partial, was created, and barred not only the
the heirs of Monica Maniega as well as of Flaviano Moreto who also died intestate on August 12, vendor, Flaviano Moreto, but also his heirs, the private respondents herein from asserting as
1956, lived as neighbors to the petitioner-vendees, yet lifted no finger to question the occupation, against the vendees-petitioners any right or title in derogation of the deed of sale executed by said
possession and ownership of the land purchased by the Pamplonas, so that We are persuaded vendor Flaiano Moreto.
and convinced to rule that private respondents are in estoppel by laches to claim half of the
property, in dispute as null and void. Estoppel by laches is a rule of equity which bars a claimant Equity commands that the private respondents, the successors of both the deceased spouses,
from presenting his claim when, by reason of abandonment and negligence, he allowed a long Flaviano Moreto and Monica Maniega be not allowed to impugn the sale executed by Flaviano
time to elapse without presenting the same. (International Banking Corporation vs. Yared, 59 Phil. Moreto who indisputably received the consideration of P900.00 and which he, including his
92) children, benefitted from the same. Moreover, as the heirs of both Monica Maniega and Flaviano
Moreto, private respondents are duty-bound to comply with the provisions of Articles 1458 and
We have ruled that at the time of the sale in 1952, the conjugal partnership was already dissolved 1495, Civil Code, which is the obligation of the vendor of the property of delivering and transfering
six years before and therefore, the estate became a co-ownership between Flaviano Moreto, the the ownership of the whole property sold, which is transmitted on his death to his heirs, the herein
surviving husband, and the heirs of his deceased wife, Monica Maniega. Article 493 of the New private respondents. The articles cited provide, thus:
Civil Code is applicable and it provides a follows:
Art. 1458. By the contract of sale one of the contracting parties obligates himself
Art. 493. Each co-owner shall have the full ownership of his part and of the fruits to transfer the ownership of and to deliver a determinate thing, and the other part
and benefits pertaining thereto, and he may therefore alienate, assign or to pay therefore a price certain in money or its equivalent.
mortgage it, and even substitute another person in its enjoyment, except when
personal rights are involve. But the effect of the alienation or the mortgage, with A contract of sale may be absolute or conditionial.
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. Art. 1495. The vendor is bound to transfer the ownership of and deliver, as well
as warrant the thing which is the object of the sale.
We agree with the petitioner that there was a partial partition of the co-ownership when at the time
of the sale Flaviano Moreto pointed out the area and location of the 781 sq. meters sold by him to Under Article 776, New Civil Code, the inheritance which private respondents received from their
the petitioners-vendees on which the latter built their house and also that whereon Rafael, the son deceased parents and/or predecessors-in-interest included all the property rights and obligations
of petitioners likewise erected his house and an adjacent coral for piggery. which were not extinguished by their parents' death. And under Art. 1311, paragraph 1, New Civil
Code, the contract of sale executed by the deceased Flaviano Moreto took effect between the
Petitioners point to the fact that spouses Flaviano Moreto and Monica Maniega owned three parties, their assigns and heirs, who are the private respondents herein. Accordingly, to the private
parcels of land denominated as Lot 1495 having an area of 781 sq. meters, Lot 1496 with an area respondents is transmitted the obligation to deliver in full ownership the whole area of 781 sq.
of 1,021 sq. meters, and Lot 4545 with an area of 544 sq. meters. The three lots have a total area meters to the petitioners (which was the original obligation of their predecessor Flaviano Moreto)
of 2,346 sq. meters. These three parcels of lots are contiguous with one another as each is and not only one-half thereof. Private respondents must comply with said obligation.
bounded on one side by the other, thus: Lot 4545 is bounded on the northeast by Lot 1495 and on
the southeast by Lot 1496. Lot 1495 is bounded on the west by Lot 4545. Lot 1496 is bounded on The records reveal that the area of 781 sq. meters sold to and occupied by petitioners for more
the west by Lot 4545. It is therefore, clear that the three lots constitute one big land. They are not than 9 years already as of the filing of the complaint in 1961 had been re-surveyed by private land
separate properties located in different places but they abut each other. This is not disputed by surveyor Daniel Aranas. Petitioners are entitled to a segregation of the area from Transfer
private respondents. Hence, at the time of the sale, the co-ownership constituted or covered these Certificate of Title No. T-9843 covering Lot 1496 and they are also entitled to the issuance of a
three lots adjacent to each other. And since Flaviano Moreto was entitled to one-half pro-indiviso new Transfer Certificate of Title in their name based on the relocation survey.
of the entire land area or 1,173 sq. meters as his share, he had a perfect legal and lawful right to
dispose of 781 sq. meters of his share to the Pamplona spouses. Indeed, there was still a
remainder of some 392 sq. meters belonging to him at the time of the sale.
WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby
AFFIRMED with modification in the sense that the sale made and executed by Flaviano Moreto in
favor of the petitioners-vendees is hereby declared legal and valid in its entirely.

Petitioners are hereby declared owners in full ownership of the 781 sq. meters at the eastern
portion of Lot 1496 now occupied by said petitioners and whereon their houses and piggery coral

The Register of Deeds of Laguna is hereby ordered to segregate the area of 781 sq. meters from
Certificate of Title No. 9843 and to issue a new Transfer Certificate of Title to the petitioners
covering the segregated area of 781 sq. meters.

No costs.


Teehankee (Chairman), Makasiar, Fernandez, De Castro and Melencio-Herrera, JJ., concur.

Republic of the Philippines According to the contract of lease (Exh. 1) the term of the lease was for five
SUPREME COURT years from January 24, 1956 at a rental of P5,000 a year, the first year's rental to
Manila be paid on February 1, 1956, the second on February 1, 1957 and the rental for
the last three years on February 1, 1958. The first year's rental was paid on time.
In the meantime, Tomas de Castro died.

In the month of November, 1956, plaintiff as lessee and defendant Arsenio de

G.R. No. L-25014 October 17, 1973 Castro, Sr. as one of the lessors, agreed to set aside and annul the contract of
lease and for this purpose an agreement (Exh. A) was signed by them, Exhibit A
as signed by plaintiff and defendant shows that Felisa Cruz Vda. de Castro,
widow of Tomas de Castro, was intended to be made a party thereof in her
capacity as representative of the heirs of Tomas Castro.
the deceased defendant-appellant ARSENIO DE CASTRO, SR.)., petitioners,
GREGORIO ATIENZA, respondent. Condition No. 2 of Exhibit A reads as follows:

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

TEEHANKEE, J.: Felisa Cruz Vda. de Castro refused to sign Exhibit A. Defendant did not pay the
P2,500.00 which under the above-quoted paragraph of Exhibit A, he should have
The Court rejects petitioners' appeal as without merit and affirms the judgment of the appellate paid on December 30, 1956. Demand for payment was made by plaintiff's
court. Petitioners' predecessor-in-interest as co-owner of an undivided one-half interest in the counsel on January 7, 1957 but to no avail, hence the present action.
fishpond could validly lease his interest to a third party, respondent Atienza, independently of his
co-owner (although said co-owner had also leased his other undivided one-half interest to the On the conflicting contentions between the parties as to who between them would attend to
same third party) and could likewise by mutual agreement independently cancel his lease securing the signature of Mrs. Felisa Cruz Vda. de Castro (widow of Tomas de Castro) to the
agreement with said third party. Said predecessor-in-interest (and petitioners who have substituted agreement of cancellation of the lease with respondent Atienza, the appellate court found that "the
him as his heirs) therefore stands liable on his express undertaking to refund the advance rental testimony of the defendant (Arsenio de Castro, Sr.) ... supports the contention of the plaintiff
paid to him by the lessee on the cancelled lease and cannot invoke the non-cancellation of the co- (Atienza) "that it was the defendant Arsenio who was interested and undertook to do so, citing
owner's lease to elude such liability. Arsenio's own declaration that "I agreed to sign this document (referring to the cancellation)
because of my desire to cancel our original agreement" and that his purpose in obtaining the
The Court of Appeals, in its decision affirming in toto the judgment of the Manila court of first cancellation of said lease agreement with plaintiff Atienza was "(B)ecause I had the intention of
instance ordering therein defendant-appellant Arsenio de Castro, Sr. (now deceased and having said fishpond leased to other persons and I cannot lease it to third parties unless I can
substituted by above-named petitioners as his heirs) "to return to the plaintiff (respondent) secure the signature of Felisa Vda. de Castro."
Gregorio Atienza the sum P2,500.00 with legal interest from the date of the filing of complaint until
fully paid plus the sum of P250.00 as attorney's fees and the costs of the suit", found the following The appellate court thus held in effect that as Arsenio "was the one interested in cancelling the
facts to undisputed: lease (Exh. 1), it stands to reason that he most probably undertook to obtain the signature of Mrs.
Castro [widow and successor-in-interest of his brother Tomas]" and that he could not invoke his
On January 24, 1956 the brothers Tomas de Castro and Arsenio de Castro, Sr. own failure to obtain such signature to elude his own undertaking and liability to refund respondent
leased to plaintiff a fishpond containing an area of 26 hectares situated in Polo, (plaintiff) his share of the rental paid in advance by respondent on the cancelled lease in the sum
Bulacan and forming part of a bigger parcel of land covered by Transfer of P2,500.00.
Certificate of Title No. 196450 of the registry of the property of Bulacan. The
lessors are co-owners in equal shares of the leased property.
The appellate court furthermore correctly held that the consent or concurrence of Felisa Vda. de
Castro (as co-owner in succession of Tomas) was not an essential condition to the validity and
effectivity of the agreement of cancellation of the lease (Exhibit A) as between Arsenio and
respondent-lessee, contrary to petitioners' claim, holding that "(S)ince there is no specific provision
in Exhibit A supporting defendant's claim, we are not prepared to supply such condition unless the
same can be deduced from other evidence or unless the terms of Exhibit A cannot be performed
by plaintiff and defendant without Mrs. Castro being bound as a party thereto."

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

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

The appellate court's judgment is fully supported by the Civil Code provisions on the rights and
prerogatives of co-owners, and specifically by Article 493 which expressly provides that

Art. 493. Each co-owner shall have the full ownership of his part and of the fruits
and benefitspertaining thereto, and he may therefore alienate, assign or
mortgage it, and even substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may be alloted to
him in the division upon the termination of the co-ownership. *

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

Makalintal, Actg. C.J., Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ.,
FIRST DIVISION Respondents filed a "Motion for Preliminary Hearing" claiming that the defenses alleged in their
Answer are valid grounds for dismissal of the complaint for lack of jurisdiction over the person of
G.R. No. 137152 January 29, 2001 the defendants and lack of cause of action. Respondents prayed that the affirmative defenses be
set for preliminary hearing and that the complaint be dismissed.4 Petitioner replied.
vs. On November 5, 1997, petitioner filed an Amended Complaint and named as an additional
ANTONIO N., FRANCISCO N., THELMA N., EUSEBIO N., RODOLFO N., all surnamed defendant Virginia N. Aguilar and, at the same time, substituted Eusebio Aguilar with his heirs.
AGUILAR, respondents. Petitioner also excluded from expropriation TCT No. 59870 and thereby reduced the area sought
to be expropriated from three (3) parcels of land to two (2) parcels totalling 1,636 square meters
under TCT Nos. 63766 and 63767.5

The Amended Complaint was admitted by the trial court on December 18, 1997. Respondents,
This is a petition for review under Rule 45 of the Rules of Court of the Orders dated September 17,
who, with the exception of Virginia Aguilar and the Heirs of Eusebio Aguilar had yet to be served
1998 and December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City1 dismissing the
with summons and copies of the Amended Complaint, filed a "Manifestation and Motion" adopting
petitioner's Amended Complaint in SCA No. 1427 for expropriation of two (2) parcels of land in
their "Answer with Counterclaim" and "Motion for Preliminary Hearing" as their answer to the
Mandaluyong City. 1âwphi1.nêt
Amended Complaint.6

The antecedent facts are as follows:

The motion was granted. At the hearing of February 25, 1998, respondents presented Antonio
Aguilar who testified and identified several documentary evidence. Petitioner did not present any
On August 4, 1997, petitioner filed with the Regional Trial Court, Branch 168, Pasig City a evidence. Thereafter, both parties filed their respective memoranda.7
complaint for expropriation entitled "City of Mandaluyong, plaintiff v. Antonio N., Francisco N,
Thelma N, Eusebio N, Rodolfo N., all surnamed Aguilar, defendants." Petitioner sought to
On September 17, 1998, the trial court issued an order dismissing the Amended Complaint after
expropriate three (3) adjoining parcels of land with an aggregate area of 1,847 square meters declaring respondents as "small property owners" whose land is exempt from expropriation under
registered under Transfer Certificates of Title Nos. 59780, 63766 and 63767 in the names of the Republic Act No. 7279. The court also found that the expropriation was not for a public purpose for
defendants, herein respondents, located at 9 de Febrero Street, Barangay Mauwag, City of petitioner's failure to present any evidence that the intended beneficiaries of the expropriation are
Mandaluyong; on a portion of the 3 lots, respondents constructed residential houses several landless and homeless residents of Mandaluyong. The court thus disposed of as follows:
decades ago which they had since leased out to tenants until the present; on the vacant portion of
the lots, other families constructed residential structures which they likewise occupied; in 1983, the
lots were classified by Resolution No. 125 of the Board of the Housing and Urban Development "WHEREFORE, the Amended Complaint is hereby ordered dismissed without
Coordinating Council as an Area for Priority Development for urban land reform under pronouncement as to cost.
Proclamation Nos. 1967 and 2284 of then President Marcos; as a result of this classification, the
tenants and occupants of the lots offered to purchase the land from respondents, but the latter SO ORDERED."8
refused to sell; on November 7, 1996, the Sangguniang Panlungsod of petitioner, upon petition of
the Kapitbisig, an association of tenants and occupants of the subject land, adopted Resolution Petitioner moved for reconsideration. On December 29, 1998, the court denied the motion. Hence
No. 516, Series of 1996 authorizing Mayor Benjamin Abalos of the City of Mandaluyong to initiate this petition.
action for the expropriation of the subject lots and construction of a medium-rise condominium for
qualified occupants of the land; on January 10, 1996, Mayor Abalos sent a letter to respondents
Petitioner claims that the trial court erred
offering to purchase the said property at P3,000.00 per square meter; respondents did not answer
the letter. Petitioner thus prayed for the expropriation of the said lots and the fixing of just
compensation at the fair market value of P3,000.00 per square meter.2 "IN UPHOLDING RESPONDENT'S CONTENTION THAT THEY QUALIFY AS SMALL
In their answer, respondents, except Eusebio N. Aguilar who died in 1995, denied having received
a copy of Mayor Abalos' offer to purchase their lots. They alleged that the expropriation of their Petitioner mainly claims that the size of the lots in litigation does not exempt the same from
land is arbitrary and capricious, and is not for a public purpose; the subject lots are their only real expropriation in view of the fact that the said lots have been declared to be within the Area for
property and are too small for expropriation, while petitioner has several properties inventoried for Priority Development (APD) No. 5 of Mandaluyong by virtue of Proclamation No. 1967, as
socialized housing; the fair market value of P3,000.00 per square meter is arbitrary because the amended by Proclamation No. 2284 in relation to Presidential Decree No. 1517.10 This declaration
zonal valuation set by the Bureau of Internal Revenue is P7,000.00 per square meter. As allegedly authorizes petitioner to expropriate the property, ipso facto, regardless of the area of the
counterclaim, respondents prayed for damages of P21 million.3 land.
Presidential Decree (P.D.) No. 1517, the Urban Land Reform Act, was issued by then President (f) Privately-owned lands.
Marcos in 1978. The decree adopted as a State policy the liberation of human communities from
blight, congestion and hazard, and promotion of their development and modernization, the Where on-site development is found more practicable and advantageous to the
optimum use of land as a national resource for public welfare. 11 Pursuant to this law, Proclamation beneficiaries, the priorities mentioned in this section shall not apply. The local government
No. 1893 was issued in 1979 declaring the entire Metro Manila as Urban Land Reform Zone for units shall give budgetary priority to on-site development of government lands."
purposes of urban land reform. This was amended in 1980 by Proclamation No. 1967 and in 1983
by Proclamation No. 2284 which identified and specified 245 sites in Metro Manila as Areas for
Priority Development and Urban Land Reform Zones. Lands for socialized housing are to be acquired in the following order: (1) government lands; (2)
alienable lands of the public domain; (3) unregistered or abandoned or idle lands; (4) lands within
the declared Areas for Priority Development (APD), Zonal Improvement Program (ZIP) sites, Slum
In 1992, the Congress of the Philippines passed Republic Act No. 7279, the "Urban Development Improvement and Resettlement (SIR) sites which have not yet been acquired; (5) BLISS sites
and Housing Act of 1992." The law lays down as a policy that the state, in cooperation with the which have not yet been acquired; and (6) privately-owned lands.
private sector, undertake a comprehensive and continuing Urban Development and Housing
Program; uplift the conditions of the underprivileged and homeless citizens in urban, areas and
There is no dispute that the two lots in litigation are privately-owned and therefore last in the order
resettlement areas by making available to them decent housing at affordable cost, basic services
of priority acquisition. However, the law also provides that lands within the declared APD's which
and employment opportunities and provide for the rational use and development of urban land to
have not yet been acquired by the government are fourth in the order of priority. According to
bring about, among others, equitable utilization of residential lands; encourage more effective
petitioner, since the subject lots lie within the declared APD, this fact mandates that the lots be
people's participation in the urban development process and improve the capability of local
given priority in acquisition.14
government units in undertaking urban development and housing programs and
projects.12 Towards this end, all city and municipal governments are mandated to conduct
an inventory of all lands and improvements within their respective localities, and in coordination Section 9, however, is not a single provision that can be read separate from the other provisions of
with the National Housing Authority, the Housing and Land Use Regulatory Board, the National the law. It must be read together with Section 10 of R.A. 7279 which also provides:
Mapping Resource Information Authority, and the Land Management Bureau, identify lands for
socialized housing and resettlement areas for the immediate and future needs of the "Section 10. Modes of Land Acquisition. — The modes of acquiring lands for purposes of
underprivileged and homeless in the urban areas, acquire the lands, and dispose of said lands to this Act shall include, among others, community mortgage, land swapping, land assembly
the beneficiaries of the program.13 or consolidation, land banking, donation to the Government, joint-venture agreement,
negotiated purchase, and expropriation: Provided, however, That expropriation shall be
The acquisition of lands for socialized housing is governed by several provisions in the law. resorted to only when other modes of acquisition have been exhausted: Provided,
Section 9 of R.A. 7279 provides: further, That where expropriation is resorted to, parcels of land owned by small
property owners shall be exempted for purposes of this Act: Provided, finally, That
abandoned property, as herein defined, shall be reverted and escheated to the State in a
"Sec. 9. Priorities in the Acquisition of Land. — Lands for socialized housing shall be
proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.15
acquired in the following order:

For the purposes of socialized housing, government-owned and foreclosed properties

(a) Those owned by the Government or any of its subdivisions, instrumentalities,
shall be acquired by the local government units, or by the National Housing Authority
or agencies, including government-owned or controlled corporations and their
subsidiaries; primarily through negotiated purchase: Provided, That qualified beneficiaries who are
actual occupants of the land shall be given the right of first refusal."
(b) Alienable lands of the public domain;
Lands for socialized housing under R.A. 7279 are to be acquired in several modes. Among these
modes are the following: (1) community mortgage; (2) land swapping, (3) land assembly or
(c) Unregistered or abandoned and idle lands; consolidation; (4) land banking; (5) donation to the government; (6) joint venture agreement; (7)
negotiated purchase; and (8) expropriation. The mode of expropriation is subject to two conditions:
(d) Those within the declared Areas for Priority Development, Zonal Improvement (a) it shall be resorted to only when the other modes of acquisition have been exhausted; (b)
Program sites, and Slum Improvement and Resettlement Program sites which parcels of land owned by small property owners are exempt from such acquisition.
have not yet been acquired;
Section 9 of R.A. 7279 speaks of priorities in the acquisition of lands. It enumerates the type of
(e) Bagong Lipunan Improvement of Sites and Services or BLISS Sites which lands to be acquired and the heirarchy in their acquisition. Section 10 deals with the modes of
have not yet been acquired; land acquisition or the process of acquiring lands for socialized housing. These are two different
things. They mean that the type of lands that may be acquired in the order of priority in
Section 9 are to be acquired only in the modes authorized under Section 10. The acquisition "Section 3 x x x (q). "Small property owners" refers to those whose only real property
of the lands in the priority list must be made subject to the modes and conditions set forth in the consists of residential lands not exceeding three hundred square meters (300 sq.m.) in
next provision. In other words, land that lies within the APD, such as in the instant case, may be highly urbanized cities and eight hundred square meters (800 sq.m.) in other urban
acquired only in the modes under, and subject to the conditions of, Section 10. areas."

Petitioner claims that it had faithfully observed the different modes of land acquisition for "Small-property owners" are defined by two elements: (1) those owners of real property whose
socialized housing under R.A. 7279 and adhered to the priorities in the acquisition for socialized property consists of residential lands with an area of not more than 300 square meters in highly
housing under said law.16 It, however, did not state with particularity whether it exhausted the urbanized cities and 800 square meters in other urban areas; and (2) that they do not own real
other modes of acquisition in Section 9 of the law before it decided to expropriate the subject lots. property other than the same.
The law states "expropriation shall be resorted to when other modes of acquisition have been
exhausted." Petitioner alleged only one mode of acquisition, i.e., by negotiated purchase. The case at bar involves two (2) residential lots in Mandaluyong City, a highly urbanized city. The
Petitioner, through the City Mayor, tried to purchase the lots from respondents but the latter lot under TCT No. 63766 is 687 square meters in area and the second under TCT No. 63767 is
refused to sell.17 As to the other modes of acquisition, no mention has been made. Not even 949 square meters, both totalling 1,636 square meters in area. TCT No. 63766 was issued in the
Resolution No. 516, Series of 1996 of the Sangguniang Panlungsod authorizing the Mayor of names of herein five (5) respondents, viz:
Mandaluyong to effect the expropriation of the subject property states whether the city government
tried to acquire the same by community mortgage, land swapping, land assembly or consolidation,
land banking, donation to the government, or joint venture agreement under Section 9 of the law. "FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N.
married to Teresita Puig; all of legal age, Filipinos."28
Section 9 also exempts from expropriation parcels of land owned by small property
owners.18 Petitioner argues that the exercise of the power of eminent domain is not anymore
TCT No. 63767 was issued in the names of the five (5) respondents plus Virginia Aguilar, thus:
conditioned on the size of the land sought to be expropriated.19 By the expanded notion of public
use, present jurisprudence has established the concept that expropriation is not anymore confined
to the vast tracts of land and landed estates, but also covers small parcels of land. 20 That only a "FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N.
few could actually benefit from the expropriation of the property does not diminish its public use AGUILAR, JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR,
character.21 It simply is not possible to provide, in one instance, land and shelter for all who need married to Teresita Puig; and VIRGINIA N. AGUILAR, single, all of legal age, Filipinos."29
Respondent Antonio Aguilar testified that he and the other registered owners are all siblings who
While we adhere to the expanded notion of public use, the passage of R.A. No. 7279, the "Urban inherited the subject property by intestate succession from their parents.30 Their father died in
Development and Housing Act of 1992" introduced a limitation on the size of the land sought to be 1945 and their mother in 1976.31Both TCT's were issued in the siblings' names on September 2,
expropriated for socialized housing. The law expressly exempted "small property owners" from 1987.31 In 1986, however, the siblings agreed to extrajudicially partition the lots among
expropriation of their land for urban land reform. R.A. No. 7279 originated as Senate Bill No. 234 themselves, but no action was taken by them to this end. It was only eleven (11) years later, on
authored by Senator Joey Lina23 and House Bill No. 34310. Senate Bill No. 234 then provided that November 28, 1997 that a survey of the two lots was made33 and on February 10, 1998, a
one of those lands not covered by the urban land reform and housing program was "land actually consolidation subdivision plan was approved by the Lands Management Service of the
used by small property owners within the just and equitable retention limit as provided under this Department of Environment and Natural Resources.34 The co-owners signed a Partition
Act."24"Small property owners" were defined in Senate Bill No. 234 as: Agreement on February 24, 199835 and on May 21, 1998, TCT Nos. 63766 and 63767 were
cancelled and new titles issued in the names of the individual owners pursuant to the Partition
"4. Small Property Owners — are those whose rights are protected under Section 9,
Article XIII of the Constitution of the Philippines, who own small parcels of land within the
fair and just retention limit provided under this Act and which are adequate to meet the Petitioner argues that the consolidation of the subject lots and their partition was made more than
reasonable needs of the small property owner's family and their means of livelihood.25 six (6) months after the complaint for expropriation was filed on August 4, 1997, hence, the
partition was made in bad faith, for the purpose of circumventing the provisions of R.A. 7279.36
The exemption from expropriation of lands of small-property owners was never questioned on the
Senate floor.26This exemption, although with a modified definition, was actually retained in the At the time of filing of the complaint for expropriation, the lots subject of this case were owned in
consolidation of Senate Bill No. 234 and House Bill No. 34310 which became R.A. No. 7279. 27 common by respondents; Under a co-ownership, the ownership of an undivided thing or right
belongs to different persons.37During the existence of the co-ownership, no individual can claim
The question now is whether respondents qualify as "small property owners" as defined in Section title to any definite portion of the community property until the partition thereof; and prior to the
3 (q) of R.A. 7279. Section 3 (q) provides: partition, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire
land or thing.38 Article 493 of the Civil Code however provides that:
"Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and "... subject to x x x, and to the prov. of Sec. 4 Rule 74 of the Rules of Court with respect to
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and the inheritance left by the deceased Eusebio N. Aguilar."53
even substitute another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with respect to the co-owners Eusebio died on March 23, 1995,54 and, according to Antonio's testimony, the former was survived
shall be limited to the portion which may be allotted to him in the division upon termination by five (5) children.55 Where there are several co-owners, and some of them die, the heirs of those
of the co-ownership.39 who die, with respect to that part belonging to the deceased, become also co-owners of the
property together with those who survive.56 After Eusebio died, his five heirs became co-owners of
Before partition in a co-ownership, every co-owner has the absolute ownership of his undivided his 347 square-meter portion. Dividing the 347 square meters among the five entitled each heir to
interest in the common property. The co-owner is free to alienate, assign or mortgage his interest, 69.4 square meters of the land subject of litigation.
except as to purely personal rights.40 He may also validly lease his undivided interest to a third
party independently of the other co-owners.41The effect of any such transfer is limited to the Consequently, the share of each co-owner did not exceed the 300 square meter limit set in R.A.
portion which may be awarded to him upon the partition of the property.42 7279. The second question, however, is whether the subject property is the only real property of
respondents for them to comply with the second requisite for small property owners.
Article 493 therefore gives the owner of an undivided interest in the property the right to freely sell
and dispose of his undivided interest.43 The co-owner, however, has no right to sell or alienate a Antonio Aguilar testified that he and most of the original co-owners do not reside on the subject
concrete specific or determinate part of the thing owned in common, because his right over the property but in their ancestral home in Paco, Manila.57 Respondents therefore appear to own real
thing is represented by a quota or ideal portion without any physical adjudication.44 If the co-owner property other than the lots in litigation. Nonetheless, the records do not show that the ancestral
sells a concrete portion, this, nonetheless, does not render the sale void. Such a sale affects only home in Paco, Manila and the land on which it stands are owned by respondents or anyone of
his own share, subject to the results of the partition but not those of the other co-owners who did them. Petitioner did not present any title or proof of this fact despite Antonio Aguilar's testimony.
not consent to the sale.45
On the other hand, respondents claim that the subject lots are their only real property 58 and that
In the instant case, the titles to the subject lots were issued in respondents' names as co-owners they, particularly two of the five heirs of Eusebio Aguilar, are merely renting their houses and
in 1987—ten (10) years before the expropriation case was filed in 1997. As co-owners, all that the therefore do not own any other real property in Metro Manila.59 To prove this, they submitted
respondents had was an ideal or abstract quota or proportionate share in the lots. This, however, certifications from the offices of the City and Municipal Assessors in Metro Manila attesting to the
did not mean that they could not separately exercise any rights over the lots. Each respondent had fact that they have no registered real property declared for taxation purposes in the respective
the full ownership of his undivided interest in the property. He could freely sell or dispose of his cities. Respondents were certified by the City Assessor of Manila; 60 Quezon City;61Makati
interest independently of the other co-owners. And this interest could have even been attached by City;62 Pasay City;63 Paranaque;64 Caloocan City;65 Pasig City;66 Muntinlupa;67 Marikina;68 and the
his creditors.46 The partition in 1998, six (6) months after the filing of the expropriation case, then municipality of Las Piñas69 and the municipality of San Juan del Monte70 as having no real
terminated the co-ownership by converting into certain and definite parts the respective undivided property registered for taxation in their individual names.1âwphi1.nêt
shares of the co-owners.47The subject property is not a thing essentially indivisible. The rights of
the co-owners to have the property partitioned and their share in the same delivered to them
Finally, this court notes that the subject lots are now in the possession of respondents. Antonio
cannot be questioned for "[n]o co-owner shall be obliged to remain in the co-ownership."48 The
Aguilar testified that he and the other co-owners filed ejectment cases against the occupants of
partition was merely a necessary incident of the co-ownership;49 and absent any evidence to the
contrary, this partition is presumed to have been done in good faith. the land before the Metropolitan Trial Court, Mandaluyong, Branches 59 and 60. Orders of eviction
were issued and executed on September 17, 1997 which resulted in the eviction of the tenants
and other occupants from the land in question.71
Upon partition, four (4) co-owners, namely, Francisco, Thelma, Rodolfo and Antonio Aguilar each
had a share of 300 square meters under TCT Nos. 13849, 13852, 13850, 13851.50 Eusebio
IN VIEW WHEREOF, the petition is DENIED and the orders dated September 17. 1998 and
Aguilar's share was 347 square meters under TCT No. 13853 51 while Virginia Aguilar's was 89
square meters under TCT No. 13854.52 December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City in SCA No. 1427

It is noted that Virginia Aguilar, although granted 89 square meters only of the subject lots, is, at
the same time, the sole registered owner of TCT No. 59780, one of the three (3)
titles initially sought to be expropriated in the original complaint. TCT No. 59780, with a land area
of 211 square meters, was dropped in the amended complaint. Eusebio Aguilar was granted 347 Davide, Jr., Kapunan, Pardo, and Ynares-Santiago, JJ., concur.
square meters, which is 47 square meters more than the maximum of 300 square meters set by
R.A. 7279 for small property owners. In TCT No. 13853, Eusebio's title, however, appears the
following annotation:
Republic of the Philippines Since the execution of the two deeds of absolute sale, the vendees, brothers Melecio and Pedro,
SUPREME COURT had been paying the real property taxes for their respectively purchased properties. 6 They also
Manila had been in possession of their purchased properties which, being planted to palay and peanuts,
were segregated from the rest of Lot 4685 by dikes. 7
More than thirteen years later or on November 21, 1966, the counsel of the Oliveras brothers
G.R. No. L-29727 December 14, 1988 wrote the heirs of Lorenzo Lopez reminding them of the Oliverases' demands to partition the
property so that they could acquire their respective titles thereto without resorting to court action,
and that, should they fail to respond, he would be forced to file a case in court. 8 Apparently, the
Lopezes did not answer said letter since on December 15, 1966, the Oliveras brothers and their
MINOR, plaintiffs-appellees,
wives filed a complaint for partition and damages 9 in the Court of First Instance of Pangasinan. 10
GASPAR, CORAZON LOPEZ, ALEJANDRO CACAYURIN, FAUSTINA BOTUYAN, MODESTO The Oliverases stated in their complaint that possession of the disputed properties was delivered
SALAZAR, ADORACION BOTUYAN, CLAUDIO GANOTICE and ENONG to them with the knowledge and consent of the defendants; that they had been paying the real
BOTUYAN, defendants-appellants. estate taxes thereon; that prior to the sale, said properties were offered to the other co-owners for
sale but they refused to buy them; that on February 18, 1953, the transactions were duly
annotated and entered in the Memorandum of encumbrances of OCT No. 15262 as adverse
Venancio B. Fernando for defendants-appellants.
claims; and that their desire to segregate the portions of Lot 4685 sold to them was frustrated by
defendants' adamant refusal to lend them the owner's duplicate of OCT No. 15262 and to execute
a deed of partition of the whole lot.

FERNAN, C.J.: In claiming moral damages in the amount of P2,000.00 plaintiffs alleged that defendants also
refused to allow them to survey and segregate the portions bought by them. Plaintiffs prayed that
This case exemplifies the Filipino custom of keeping inherited property in a prolonged juridical the court order the defendants to partition Lot 4685 and to allow them to survey and segregate the
condition of co-owner ship. portions they had purchased. They also demanded payment of P800.00 as attorney's fees and
cost of the suit.
Lorenzo Lopez owned Lot 4685 of the Cadastral survey of Villasis, Pangasinan with an area of
69,687 square meters as evidenced by Original Certificate of Title No. 15262. 1 In December, In their answer, the defendants alleged that no sale ever transpired as the alleged vendors could
1931, Lorenzo Lopez died, 2 leaving said property to his wife, Tomasa Ramos and six (6) children. not have sold specific portions of the property; that plaintiffs' possession and occupation of specific
From that time on, the heirs of Lorenzo Lopez did not initiate any moves to legally partition the portions of the properties being illegal, they could not ripen into ownership; and that they were not
property. under any obligation to lend their copy of the certificate of title or to accede to plaintiffs' request for
the partition or settlement of the property. As special and affirmative defenses, the defendants
More than twenty-one years later, or on February 11, 1953, Tomasa Ramos and her eldest son, contended that the deeds of sale were null and void and hence, unenforceable against them; that
Candido Lopez, executed a deed of absolute sale of the "eastern undivided four thousand two the complaint did not state a cause of action and that the cause or causes of action if any, had
hundred and fifty seven-square meters (4,257) more or less, of the undivided portion of (their) prescribed.
interests, rights and participation" over Lot 4685, in favor of the spouses Melecio Oliveras and
Aniceta Minor, in consideration of the amount of one thousand pesos (P1,000). 3 Defendants averred in their counterclaim that despite repeated demands, plaintiffs refused and
failed to vacate the premises; that the properties occupied by the plaintiffs yielded an average net
On the same day, Tomasa and Candido executed another deed of absolute sale of the "undivided" produce in palay and peanuts in the amount of P1,600.00 annually, and that the complaint was
four thousand two hundred and fifty-seven (4,257) square meters of the "eastern part" of Lot 4685 filed to harass them. They prayed for the dismissal of the complaint and the payment of P1,600.00
in favor of the spouses Pedro Oliveras and Teodora Gaspar, also in consideration of per year from 1953 until plaintiffs shall have vacated the premises and P1,000.00 for attorney's
P1,000. 4 Each of the said documents bear the thumbmark of Tomasa and the signature of fees.
Plaintiffs filed an answer to defendants' counterclaim, denying all the allegations therein and
In his affidavit also executed on February 11, 1953, Candido stated that a month prior to the stating that defendants never demanded that plaintiffs vacate the portions of Lot 4685 they had
execution of the deed of sale in favor of Melecio Oliveras, he offered his: "undivided portion" of Lot bought.
4685 to his "adjacent owners" but none of them was "in a position to purchase" said property. 5
The lower court explored the possibility of an amicable settlement between the parties without In the instant case, the heirs of Lorenzo Lopez maintained the co-ownership for more than twenty
success. Hence, it set the case for trial and thereafter, it rendered a years. We hold that when Candido and his mother (who died before the filing of the complaint for
decision 11 declaring valid the deeds of absolute sale 12 and ordering the defendants to allow the partition) sold definite portions of Lot 4685, they validly exercised dominion over them because, by
segregation of the sold portions of Lot 4685 by a licensed surveyor in order that the plaintiffs could operation of law, the co-ownership had ceased. The filing of the complaint for partition by the
obtain their respective certificates of title over their portions of said lot. Oliverases who, as vendees, are legally considered as subrogated to the rights of Candido over
portions of Lot 4685 in their possession, 16 merely served to put a stamp of formality on Candido's
In resolving the case, the lower court passed upon the issue of whether the two deeds of absolute otherwise accomplished act of terminating the co-ownership.
sale were what they purported to be or merely mortgage documents. It considered as indicia of
plaintiffs' absolute dominion over the portions sold to them their actual possession thereof without The action for partition has not prescribed. Although the complaint was filed thirteen years from
any opposition from the defendants until the filing of the complaint, their payment of taxes thereon the execution of the deeds of sale and hence, as contended by the defendants-appellants,
and their having benefited from the produce of the land. The court ruled that the defendants' prescription might have barred its filing under the general provision of Article 1144 (a) of the Civil
testimonial evidence that the deeds in question were merely mortgage documents cannot Code, Article 494 specifically mandates that each
overcome the evidentiary value of the public instruments presented by the plaintiffs. co-owner may demand at any time the partition of the thing owned in common insofar as his share
is concerned. Hence, considering the validity of the conveyances of portions of Lot 4685 in their
On the issue of whether the two deeds of absolute sale were null and void considering that the favor and as subrogees of Candido Lopez, the Oliverases' action for partition was timely and
land subject thereof had not yet been partitioned, the court observed that the total area of 8,514 properly filed. 17
square meters sold to plaintiffs by Candido was less than his share should Lot 4685 with an area
of 69,687 square meters be divided among the six children of Lorenzo Lopez and their mother. In We cannot write finis to this decision without commenting on the compliance with the resolution of
this connection, the lower court also found that during his lifetime, and before Candido got September 1, 1986 of counsel for defendants-appellants. In said resolution, the court required the
married, Lorenzo Lopez had divided Lot 4685 among his children who then took possession of parties to move in the premises "considering the length of time that this case has remained
their respective shares. * pending in this Court and to determine whether or not there might be supervening events which
may render the case moot and academic. 18 In his manifestation and motion dated August 12,
The defendants appealed said decision to this Court contending that the lower court erred in 1987, said counsel informed the Court that he had contacted the defendants-appellants whom he
declaring the two deeds of absolute sale as valid, in ordering the segregation of the sold portions advised "to move in the premises which is the land in question and to maintain the status quo with
of Lot 4685 to enable the plaintiffs to obtain their respective certificates of title, and in not respect to their actual possession thereon" and that he had left a copy of said resolution with the
considering their defense of prescription. defendants-appellants" for their guidance in the compliance of their obligations (sic) as specified in
resolution." 19
The extrinsic validity of the two deeds of absolute sale is not in issue in this case in view of the
finding of the trial court that the defendants admittedly do not question their due execution. 13 What
should pre-occupy the Court is the intrinsic validity of said deeds insofar as they pertain to sales of Obviously, said counsel interpreted literally the Court's directive "to move in the premises." For the
designated portions of an undivided, co-owned property. enlightenment of said counsel and all others of similar perception, a "move in the premises"
resolution is not a license to occupy or enter the premises subject of litigation especially in cases
involving real property. A "move in the premises" resolution simply means what is stated therein:
In a long line of decisions, this Court has held that before the partition of a land or thing held in
the parties are obliged to inform the Court of developments pertinent to the case which may be of
common, no individual co-owner can claim title to any definite portion thereof. All that the co-owner help to the Court in its immediate disposition.
has is an Ideal or abstract quota or proportionate share in the entire land or thing. 14

WHEREFORE, the decision of the lower court insofar as it declares the validity of the two deeds of
However, the duration of the juridical condition of co-ownership is not limitless. Under Article 494
sale and directs the partition of Lot 4685, is AFFIRMED. The lower court is hereby ordered to
and 1083 of the Civil Code, co-ownership of an estate should not exceed the period of twenty (20)
facilitate with dispatch the preparation of a project of partition which it should thereafter approve.
years. And, under the former article, any agreement to keep a thing or property undivided should This decision is immediately executory. No costs.
be for a ten-year period only. Where the parties stipulate a definite period of in division which
exceeds the maximum allowed by law, said stipulation shall be void only as to the period beyond
such maximum.15 SO ORDERED.

Although the Civil Code is silent as to the effect of the in division of a property for more than Gutierrez, Jr., Bidin and Cortes, JJ., concur.
twenty years, it would be contrary to public policy to sanction co-ownership beyond the period set
by the law. Otherwise, the 20-year limitation expressly mandated by the Civil Code would be Feliciano, J., concur in the result.
rendered meaningless.
Republic of the Philippines On February 29, 1968, petitioners, who are the surviving heirs of Eulalio and Juanita Delima, filed
SUPREME COURT with the Court of First Instance of Cebu (now Regional Trial Court) an action for reconveyance
Manila and/or partition of property and for the annulment of TCT No. 3009 with damages against their
uncles Galileo Delima and Vicente Delima,. Vicente Delima was joined as party defendant by the
FIRST DIVISION petitioners for his refusal to join the latter in their action.

G.R. No. L-46296 September 24, 1991 On January 16, 1970, the trial court rendered a decision in favor of petitioners, the dispositive
portion of which states:
vs. owners of Lot No. 7758 of the Talisay-Minglanilla Friar Lands Estate presently covered by
HON. COURT OF APPEALS, GALILEO DELIMA (deceased), substituted by his legal heirs, transfer Certificate of Title No. 3009, each sharing a pro-indiviso share of one-fourth;
DIONISIO DELIMA, IRENEA DELIMA, ESTER DELIMA AND FELY DELIMA, respondents. 1) Vicente Delima (one-fourth)

Gabriel J. Canete for petitioners. 2) Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio Bacus and Purificacion Bacus
Emilio Lumontad, Jr. for private respondents. (on-fourth);

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

MEDIALDEA, J.: 4) The Heirs of Galileo Delima, namely Flaviana Vda. de Delima, Lily D. Arias, Helen
Niadas and Dionisio, Antonio, Eotu Irenea, and Fely, all surnamed Delima (one-fourth).
This is a petition for review on certiorari of the decision of the Court of Appeals reversing the trial
court's judgment which declared as null and void the certificate of title in the name of respondents' Transfer Certificate of Title No. 3009 is declared null and void and the Register of Deeds
predecessor and which ordered the partition of the disputed lot among the parties as co-owners. of Cebu is ordered to cancel the same and issue in lieu thereof another title with the
above heirs as pro-indiviso owners.
The antecedent facts of the case as found both by the respondent appellate court and by the trial
court are as follows: After the payment of taxes paid by Galileo Delima since 1958, the heirs of Galileo Delima
are ordered to turn a over to the other heirs their respective shares of the fruits of the lot
During his lifetime, Lino Delima acquired Lot No. 7758 of the Talisay-Minglanilla Friar Lands in question computed at P170.00 per year up to the present time with legal (interest).
Estate in Cebu by sale on installments from the government. Lino Delima later died in 1921
leaving as his only heirs three brothers and a sister namely: Eulalio Delima, Juanita Delima, Within sixty (60) days from receipt of this decision the parties are ordered to petition the
Galileo Delima and Vicente Delima. After his death, TCT No. 2744 of the property in question was lot in question and the defendants are directed to immediately turn over possession of the
issued on August 3, 1953 in the name of the Legal Heirs of Lino Delima, deceased, represented shares here awarded to the respective heirs.
by Galileo Delima.
Defendants are condemned to pay the costs of the suit.
On September 22, 1953, Galileo Delima, now substituted by respondents, executed an affidavit of
"Extra-judicial Declaration of Heirs." Based on this affidavit, TCT No. 2744 was cancelled and TCT The counterclaim is dismissed.
No. 3009 was issued on February 4,1954 in the name of Galileo Delima alone to the exclusion of
the other heirs.
SO ORDERED. (pp. 54-55, Rollo)
Galileo Delima declared the lot in his name for taxation purposes and paid the taxes thereon from
1954 to 1965. Not satisfied with the decision, respondents appealed to the Court of Appeals. On May 19, 1977,
respondent appellate court reversed the trial court's decision and upheld the claim of Galileo
Delima that all the other brothers and sister of Lino Delima, namely Eulalio, Juanita and Vicente,
had already relinquished and waived their rights to the property in his favor, considering that he partition can no longer be invoked or applied when one of the co-owners has adversely possessed
(Galileo Delima) alone paid the remaining balance of the purchase price of the lot and the realty the property as exclusive owner for a period sufficient to vest ownership by prescription.
taxes thereon (p. 26, Rollo).
It is settled that possession by a co-owner or co-heir is that of a trustee. In order that such
Hence, this petition was filed with the petitioners alleging that the Court of Appeals erred: possession is considered adverse to the cestui que trust amounting to a repudiation of the co-
ownership, the following elements must concur: 1) that the trustee has performed unequivocal acts
1) In not holding that the right of a co-heir to demand partition of inheritance is amounting to an ouster of the cestui que trust; 2) that such positive acts of repudiation had been
imprescriptible. If it does, the defenses of prescription and laches have already been made known to the cestui que trust; and 3) that the evidence thereon should be clear and
waived. 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).
2) In disregarding the evidence of the petitioners.(p.13, Rollo)
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 issue to be resolved in the instant case is whether or not petitioners' action for partition is
the issuance of a new one wherein he appears as the new owner of the property, thereby in effect
already barred by the statutory period provided by law which shall enable Galileo Delima to perfect
denying or repudiating the ownership of the other co-owners over their shares, the statute of
his claim of ownership by acquisitive prescription to the exclusion of petitioners from their shares
limitations started to run for the purposes of the action instituted by the latter seeking a declaration
in the disputed property. Article 494 of the Civil Code expressly provides:
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
Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may implied or constructive trust prescribes after ten (10) years, it is from the date of the issuance of
demand at any time the partition of the thing owned in common, insofar as his share is such title that the effective assertion of adverse title for purposes of the statute of limitations is
concerned. counted (Jaramil v. Court of Appeals, No. L-31858, August 31, 1977, 78 SCRA 420).

Nevertheless, an agreement to keep the thing undivided for a certain period of time, not Evidence shows that TCT No. 2744 in the name of the legal heirs of Lino Delima, represented by
exceeding ten years, shall be valid. This term may be extended by a new agreement. Galileo Delima, was cancelled by virtue of an affidavit executed by Galileo Delima and that on
February 4, 1954, Galileo Delima obtained the issuance of a new title in Ms name numbered TCT
A donor or testator may prohibit partition for a period which shall not exceed twenty years. No. 3009 to the exclusion of his co-heirs. The issuance of this new title constituted an open and
clear repudiation of the trust or co-ownership, and the lapse of ten (10) years of adverse
Neither shall there be any partition when it is prohibited by law. possession by Galileo Delima from February 4, 1954 was sufficient to vest title in him by
prescription. As the certificate of title was notice to the whole world of his exclusive title to the land,
such rejection was binding on the other heirs and started as against them the period of
No prescription shall run in favor of a co-owner or co-heir against his co-owners or co- prescription. Hence, when petitioners filed their action for reconveyance and/or to compel partition
heirs so long as he expressly or impliedly recognizes the co-ownership. on February 29, 1968, such action was already barred by prescription. Whatever claims the other
co-heirs could have validly asserted before can no longer be invoked by them at this time.
As a rule, possession by a co-owner will not be presumed to be adverse to the others, but will be
held to benefit all. It is understood that the co-owner or co-heir who is in possession of an ACCORDINGLY, the petition is hereby DENIED and the assailed decision of the Court of Appeals
inheritance pro-indiviso for himself and in representation of his co-owners or co-heirs, if, as such dated May 19, 1977 is AFFIRMED.
owner, he administers or takes care of the rest thereof with the obligation of delivering it to his co-
owners or co-heirs, is under the same situation as a depository, a lessee or a trustee (Bargayo v.
Camumot, 40 Phil, 857; Segura v. Segura, No. L-29320, September 19, 1988, 165 SCRA 368). SO ORDERED.
Thus, an action to compel partition may be filed at any time by any of the co-owners against the
actual possessor. In other words, no prescription shall run in favor of a co-owner against his co- Narvasa (Chairman), Cruz and Griño-Aquino, JJ., concur.
owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership (Del Blanco
v. Intermediate Appellate Court, No. 72694, December 1, 1987, 156 SCRA 55).

However, from the moment one of the co-owners claims that he is the absolute and exclusive
owner of the properties and denies the others any share therein, the question involved is no longer
one of partition but of ownership (De Castro v. Echarri, 20 Phil. 23; Bargayo v. Camumot, supra;
De los Santos v. Santa Teresa, 44 Phil. 811). In such case, the imprescriptibility of the action for
Republic of the Philippines At the time of his death, Lupo Mariategui left certain properties which he acquired when he was
SUPREME COURT still unmarried (Brief for respondents, Rollo, pp. 116; 4). These properties are described in the
Manila complaint as Lots Nos. 163, 66, 1346 and 156 of the Muntinglupa Estate (Rollo, Annex "A", p. 39).

THIRD DIVISION On December 2, 1967, Lupo's descendants by his first and second marriages, namely, Maria del
Rosario, Urbana, Ruperto, Cresencia, all surnamed Mariategui and Antero, Rufina, Catalino,
Maria, Gerardo, Virginia and Federico, all surnamed Espina, executed a deed of extrajudicial
partition whereby they adjudicated unto themselves Lot No. 163 of the Muntinglupa Estate.
Thereafter, Lot No. 163 was the subject of a voluntary registration proceedings filed by the
G.R. No. L-57062 January 24, 1992
adjudicatees under Act No. 496, and the land registration court issued a decree ordering the
registration of the lot. Thus, on April 1, 1971, OCT No. 8828 was issued in the name of the above-
MARIA DEL ROSARIO MARIATEGUI, ET AL., petitioners, mentioned heirs. Subsequently, the registered owners caused the subdivision of the said lot into
vs. Lots Nos. 163-A to 163-H, for which separate transfer certificates of title were issued to the
MARIATEGUI, respondents.
On April 23, 1973, Lupo's children by his third marriage with Felipa Velasco (Jacinto, Julian and
Montesa, Albon & Associates for petitioners. Paulina) filed with the lower court an amended complaint claiming that Lot No. 163 together with
Lots Nos. 669, 1346 and 154 were owned by their common father, Lupo Mariategui, and that, with
Parmenio B. Patacsil, Patacsil Twins Law Office for the heirs of the late Maria del Rosario the adjudication of Lot No. 163 to their co-heirs, they (children of the third marriage) were deprived
Mariategui. of their respective shares in the lots. Plaintiffs pray for partition of the estate of their deceased
father and annulment of the deed of extrajudicial partition dated December 2, 1967
Tinga, Fuentes & Tagle Firm for private respondents. (Petition, Rollo, p. 10). Cresencia Mariategui Abas, Flaviana Mariategui Cabrera and Isabel
Santos were impleaded in the complaint as unwilling defendants as they would not like to join the
suit as plaintiffs although they acknowledged the status and rights of the plaintiffs and agreed to
the partition of the parcels of land as well as the accounting of their fruits (Ibid., Rollo, p. 8; Record
on Appeal, p. 4).
The defendants (now petitioners) filed an answer with counterclaim (Amended Record on Appeal,
This is a petition for review on certiorari of the decision * of the Court of Appeals dated December p. 13). Thereafter, they filed a motion to dismiss on the grounds of lack of cause of action and
24, 1980 in CA-G.R. No. 61841, entitled "Jacinto Mariategui, et al. v. Maria del Rosario Mariategui, prescription. They specifically contended that the complaint was one for recognition of natural
et al.," reversing the judgment of the then Court of First Instance of Rizal, Branch VIII ** at Pasig, children. On August 14, 1974, the motion to dismiss was denied by the trial court, in an order the
Metro Manila. dispositive portion of which reads:

The undisputed facts are as follows: It is therefore the opinion of the Court that Articles 278 and 285 of the Civil Code
cited by counsel for the defendants are of erroneous application to this case. The
Lupo Mariategui died without a will on June 26, 1953 (Brief for respondents, Rollo, pp. 116; 8). motion to dismiss is therefore denied for lack of merit.
During his lifetime, Lupo Mariategui contracted three (3) marriages. With his first wife, Eusebia
Montellano, who died on November 8, 1904, he begot four (4) children, namely: Baldomera, Maria SO ORDERED. (Ibid, p. 37).
del Rosario, Urbana and Ireneo. Baldomera died and was survived by her children named Antero,
Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed Espina. Ireneo also died However, on February 16, 1977, the complaint as well as petitioners' counterclaim were dismissed
and left a son named Ruperto. With his second wife, Flaviana Montellano, he begot a daughter by the trial court, in its decision stating thus:
named Cresenciana who was born on May 8, 1910 (Rollo, Annex "A", p. 36).
The plaintiffs' right to inherit depends upon the acknowledgment or recognition of
Lupo Mariategui and Felipa Velasco (Lupo's third wife) got married sometime in 1930. They had their continuous enjoyment and possession of status of children of their
three children, namely: Jacinto, born on July 3, 1929, Julian, born on February 16, 1931 and supposed father. The evidence fails to sustain either premise, and it is clear that
Paulina, born on April 19, 1938. Felipa Velasco Mariategui died in 1941 (Rollo, Ibid). this action cannot be sustained. (Ibid, Rollo, pp. 67-68)
The plaintiffs elevated the case to the Court of Appeals on the ground that the trial court With respect to the legal basis of private respondents' demand for partition of the estate of Lupo
committed an error ". . . in not finding that the parents of the appellants, Lupo Mariategui and Mariategui, the Court of Appeals aptly held that the private respondents are legitimate children of
Felipa Velasco (were) lawfully married, and in holding (that) they (appellants) are not legitimate the deceased.
children of their said parents, thereby divesting them of their inheritance . . . " (Rollo, pp. 14-15).
Lupo Mariategui and Felipa Velasco were alleged to have been lawfully married in or about 1930.
On December 24, 1980, the Court of Appeals rendered a decision declaring all the children and This fact is based on the declaration communicated by Lupo Mariategui to Jacinto who testified
descendants of Lupo Mariategui, including appellants Jacinto, Julian and Paulina (children of the that "when (his) father was still living, he was able to mention to (him) that he and (his) mother
third marriage) as entitled to equal shares in the estate of Lupo Mariategui; directing the were able to get married before a Justice of the Peace of Taguig, Rizal." The spouses deported
adjudicatees in the extrajudicial partition of real properties who eventually acquired transfer themselves as husband and wife, and were known in the community to be such. Although no
certificates of title thereto, to execute deeds of reconveyance in favor, and for the shares, of marriage certificate was introduced to this effect, no evidence was likewise offered to controvert
Jacinto, Julian and Paulina provided rights of innocent third persons are not prejudiced otherwise these facts. Moreover, the mere fact that no record of the marriage exists does not invalidate the
the said adjudicatees shall reimburse the said heirs the fair market value of their shares; and marriage, provided all requisites for its validity are present (People vs. Borromeo, 133 SCRA 106
directing all the parties to submit to the lower court a project of partition in the net estate of Lupo [1984]).
Mariategui after payment of taxes, other government charges and outstanding legal obligations.
Under these circumstances, a marriage may be presumed to have taken place between Lupo and
The defendants-appellees filed a motion for reconsideration of said decision but it was denied for Felipa. The laws presume that a man and a woman, deporting themselves as husband and wife,
lack of merit. Hence, this petition which was given due course by the court on December 7, 1981. have entered into a lawful contract of marriage; that a child born in lawful wedlock, there being no
divorce, absolute or from bed and board is legitimate; and that things have happened according to
The petitioners submit to the Court the following issues: (a) whether or not prescription barred the ordinary course of nature and the ordinary habits of life (Section 5 (z), (bb), (cc), Rule 131,
private respondents' right to demand the partition of the estate of Lupo Mariategui, and (b) Rules of Court; Corpus v. Corpus, 85 SCRA 567 [1978]; Saurnaba v. Workmen's Compensation,
whether or not the private respondents, who belatedly filed the action for recognition, were able to 85 SCRA 502 [1978]; Alavado v. City Gov't. of Tacloban, 139 SCRA 230 [1985]; Reyes v. Court of
prove their successional rights over said estate. The resolution of these issues hinges, however, Appeals, 135 SCRA 439 [1985]).
on the resolution of the preliminary matter, i.e., the nature of the complaint filed by the private
respondents. Courts look upon the presumption of marriage with great favor as it is founded on the following
The complaint alleged, among other things, that "plaintiffs are the children of the deceased
spouses Lupo Mariategui . . . and Felipa Velasco"; that "during his lifetime, Lupo Mariategui had The basis of human society throughout the civilized world is that of marriage.
repeatedly acknowledged and confirmed plaintiffs as his children and the latter, in turn, have Marriage in this jurisdiction is not only a civil contract, but it is a new relation, an
continuously enjoyed such status since their birth"; and "on the basis of their relationship to the institution in the maintenance of which the public is deeply interested.
deceased Lupo Mariategui and in accordance with the law on intestate succession, plaintiffs are Consequently, every intendment of the law leans toward legalizing matrimony.
entitled to inherit shares in the foregoing estate (Record on Appeal, pp. 5 & 6). It prayed, among Persons dwelling together in apparent matrimony are presumed, in the absence
others, that plaintiffs be declared as children and heirs of Lupo Mariategui and adjudication in of any counterpresumption or evidence special to that case, to be in fact married.
favor of plaintiffs their lawful shares in the estate of the decedent (Ibid, p. 10). The reason is that such is the common order of society and if the parties were
not what they thus hold themselves out as being, they would be living in the
A perusal of the entire allegations of the complaint, however, shows that the action is principally constant violation of decency and of
one of partition. The allegation with respect to the status of the private respondents was raised law . . . (Adong vs. Cheong Seng Gee, 43 Phil. 43, 56 [1922] quoted in Alavado
only collaterally to assert their rights in the estate of the deceased. Hence, the Court of Appeals vs. City Government of Tacloban, 139 SCRA 230 [1985]).
correctly adopted the settled rule that the nature of an action filed in court is determined by the
facts alleged in the complaint constituting the cause of action (Republic vs. Estenzo, 158 SCRA So much so that once a man and a woman have lived as husband and wife and such relationship
282 [1988]). is not denied nor contradicted, the presumption of their being married must be admitted as a fact
(Alavado v. City Gov't. of Tacloban,supra).
It has been held that, if the relief demanded is not the proper one which may be granted under the
law, it does not characterize or determine the nature of plaintiffs' action, and the relief to which The Civil Code provides for the manner under which legitimate filiation may be proven. However,
plaintiff is entitled based on the facts alleged by him in his complaint, although it is not the relief considering the effectivity of the Family Code of the Philippines, the case at bar must be decided
demanded, is what determines the nature of the action (1 Moran, p. 127, 1979 ed., citing Baguioro under a new if not entirely dissimilar set of rules because the parties have been overtaken by
vs. Barrios, et al., 77 Phil. 120). events, to use the popular phrase (Uyguangco vs. Court of Appeals, G.R. No. 76873, October 26,
1989). Thus, under Title VI of the Family Code, there are only two classes of children — legitimate
and illegitimate. The fine distinctions among various types of illegitimate children have been In their complaint, private respondents averred that in spite of their demands, petitioners, except
eliminated (Castro vs. Court of Appeals, 173 SCRA 656 [1989]). the unwilling defendants in the lower court, failed and refused to acknowledge and convey their
lawful shares in the estate of their father (Record on Appeal, p. 6). This allegation, though denied
Article 172 of the said Code provides that the filiation of legitimate children may be established by by the petitioners in their answer (Ibid, p. 14), was never successfully refuted by them. Put
the record of birth appearing in the civil register or a final judgment or by the open and continuous differently, in spite of petitioners' undisputed knowledge of their relationship to private respondents
possession of the status of a legitimate child. who are therefore their co-heirs, petitioners fraudulently withheld private respondent's share in the
estate of Lupo Mariategui. According to respondent Jacinto, since 1962, he had been inquiring
from petitioner Maria del Rosario about their (respondents) share in the property left by their
Evidence on record proves the legitimate filiation of the private respondents. Jacinto's birth deceased father and had been assured by the latter (Maria del Rosario) not to worry because they
certificate is a record of birth referred to in the said article. Again, no evidence which tends to will get some shares. As a matter of fact, sometime in 1969, Jacinto constructed a house where he
disprove facts contained therein was adduced before the lower court. In the case of the two other now resides on Lot No. 163 without any complaint from petitioners.
private respondents, Julian and Paulina, they may not have presented in evidence any of the
documents required by Article 172 but they continuously enjoyed the status of children of Lupo
Mariategui in the same manner as their brother Jacinto. Petitioners' registration of the properties in their names in 1971 did not operate as a valid
repudiation of the co-ownership. In Adille vs. Court of Appeals (157 SCRA 455, 461-462 [1988]),
the Court held:
While the trial court found Jacinto's testimonies to be inconsequential and lacking in substance as
to certain dates and names of relatives with whom their family resided, these are but minor details.
The nagging fact is that for a considerable length of time and despite the death of Felipa in 1941, Prescription, as a mode of terminating a relation of co-ownership, must have
the private respondents and Lupo lived together until Lupo's death in 1953. It should be noted that been preceded by repudiation (of the co-ownership). The act of repudiation, in
even the trial court mentioned in its decision the admission made in the affidavit of Cresenciana turn, is subject to certain conditions: (1) a co-owner repudiates the co-ownership;
Mariategui Abas, one of the petitioners herein, that " . . . Jacinto, Julian and Paulina Mariategui ay (2) such an act of repudiation is clearly made known to the other co-owners; (3)
pawang mga kapatid ko sa the evidence thereon is clear and conclusive; and (4) he has been in possession
ama . . ." (Exh. M, Record on Appeal, pp. 65-66). through open, continuous, exclusive, and notorious possession of the property
for the period required by law.
In view of the foregoing, there can be no other conclusion than that private respondents are
legitimate children and heirs of Lupo Mariategui and therefore, the time limitation prescribed in xxx xxx xxx
Article 285 for filing an action for recognition is inapplicable to this case. Corollarily, prescription
does not run against private respondents with respect to the filing of the action for partition so long It is true that registration under the Torrens system is constructive notice of title,
as the heirs for whose benefit prescription is invoked, have not expressly or impliedly repudiated but it has likewise been our holding that the Torrens title does not furnish shield
the co-ownership. In other words, prescription of an action for partition does not lie except when for fraud. It is therefore no argument to say that the act of registration is
the co-ownership is properly repudiated by the co-owner (Del Banco vs. Intermediate Appellate equivalent to notice of repudiation, assuming there was one, notwithstanding the
Court, 156 SCRA 55 [1987] citing Jardin vs. Hollasco, 117 SCRA 532 [1982]). long-standing rule that registration operates as a universal notice of title.

Otherwise stated, a co-owner cannot acquire by prescription the share of the other co-owners Inasmuch as petitioners registered the properties in their names in fraud of their co-heirs
absent a clear repudiation of co-ownership duly communicated to the other co-owners (Mariano prescription can only be deemed to have commenced from the time private respondents
vs. De Vega, 148 SCRA 342 [1987]). Furthermore, an action to demand partition is imprescriptible discovered the petitioners' act of defraudation (Adille vs. Court of Appeals, supra). Hence,
and cannot be barred by laches (Del Banco vs. IAC, 156 SCRA 55 [1987]). On the other hand, an prescription definitely may not be invoked by petitioners because private respondents commenced
action for partition may be seen to be at once an action for declaration of co-ownership and for the instant action barely two months after learning that petitioners had registered in their names
segregation and conveyance of a determinate portion of the property involved (Roque vs. IAC, the lots involved.
165 SCRA 118 [1988]).
WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals dated
Petitioners contend that they have repudiated the co-ownership when they executed the December 24, 1980 is Affirmed.
extrajudicial partition excluding the private respondents and registered the properties in their own
names (Petition, p. 16; Rollo, p. 20). However, no valid repudiation was made by petitioners to the SO ORDERED.
prejudice of private respondents. Assuming petitioners' registration of the subject lot in 1971 was
an act of repudiation of the co-ownership, prescription had not yet set in when private respondents
filed in 1973 the present action for partition (Ceniza vs. C.A., 181 SCRA 552 [1990]). Gutierrez, Jr., Feliciano, Davide, Jr. and Romero, JJ., concur.
FIRST DIVISION 18. In case of substantial increase/s of prices of the materials, like cement, G.I.
corrugated sheets, the said contract price shall be adjusted accordingly as to the
G.R. No. 124899 March 30, 2004 particular item/s of (sic) material/s involved in the increase/s of prices;

RENATO C. SALVADOR, petitioner, xxx

COURT OF APPEALS, MARIA ROMAYNE MIRANDA and GILBERT MIRANDA, respondents. 20. All other matters relating to the project not stipulated in this contract are deemed not
included herein unless the parties may agree on said matters in writing;
x x x.6
Work on the Project began sometime in July 1990 upon Gilbert’s payment of ₱797,328.70 as
The Case twenty per cent (20%) down payment. Salvador periodically submitted progress billings, which
Gilbert promptly paid. The billings included work on the structures stipulated in the Contract, as
well as additional works and change orders.
Before the Court is a petition for review1 assailing the Decision2 of 30 April 1996 of the Court of
Appeals in CA-G.R. CV No. 39661. The Court of Appeals set aside the Decision3 of 18 August
1992 of the Regional Trial Court of San Mateo, Rizal, Branch 76, in Civil Case No. 754. The trial In December 1990, however, Salvador demanded that Gilbert pay the following amounts in
court dismissed petitioner’s complaint and respondents’ counterclaims for insufficiency of basis. addition to the Contract Price: (1) ₱39,000 or a 20% fee on ₱196,000 worth of filling materials
The appellate court found for respondents, and directed petitioner to pay damages. respondents themselves supplied for the Project; (2) a 20% escalation or adjustment of the unpaid
balance of the Contract Price in the amount of ₱637,862.96; and (3) billing for alleged additional
works in the amount of ₱399,190.46.
Antecedent Facts

Salvador was particularly insistent on the escalation of the Contract Price. In his first letter dated
Maria Romayne Miranda ("Romayne") is the owner of a parcel of land ("Property") with an area of
18 December 1990, Salvador informed Gilbert that the prices of construction materials had
17,748 square meters in Cabcaben, Mariveles, Bataan. The Property is registered with the
increased by "about forty (40%) percent."7 Two days later, Salvador wrote again to advise Gilbert
Register of Deeds of Bataan under TCT No. T-129442.
that although the Project was almost 90% completed, the latter’s failure to grant the escalation
would leave Salvador with "no choice but to stop operation and wait for you (Gilbert) to initiate a
Romayne appointed her cousin, Gilbert Miranda ("Gilbert"), as her attorney-in-fact under a renegotiation."8
General Power of Attorney4 dated 15 April 1990. Romayne authorized Gilbert to execute contracts
on her behalf and to manage her properties, including the Property subject of the present case, Gilbert responded by requesting for a detailed computation of the proposed escalation. On 25
and to perform other acts in her place.
December 1990, Salvador submitted a breakdown of the services and construction work done on
the Project. The breakdown included the total cost of each service and the portion of the Contract
On 9 July 1990, Gilbert, as Romayne’s agent, entered into a Development and Construction Price still due for each service. To arrive at the proposed escalation of ₱637,862.96, the
Contract5 ("Contract") with Renato C. Salvador ("Salvador"), a duly licensed contractor and computation merely imposed a uniform increase of 20% on the outstanding balance still payable
proprietor of Montariza Construction. The Contract was for the development of the Property into on each service.9
the Haven of Peace Memorial Park ("Project") and the construction of several structures for that
purpose. Salvador agreed to undertake the Project for the consideration of ₱3,986,643.50 Dissatisfied with the computation, Gilbert required Salvador to submit receipts showing the
("Contract Price").
purchase of construction materials used in the Project, the dates of purchase of these materials,
and the increase in their prices. Gilbert pointed out that he had already paid a total of
Salvador undertook to complete the Project within 180 working days from receipt of the down ₱3,775,804.80 for work on the Project and that the remaining balance due under the Contract was
payment, with a grace period of 45 working days. The Contract also contained the following ₱210,838.71. Salvador agreed to submit the required documents while Gilbert agreed to release
provisions: an additional ₱120,065.80. Thus, only ₱90,772.91 of the Contract Price remained unpaid.

17. In case of changes, alterations or deviations in the plans, specifications and bill of Gilbert also paid Salvador an additional ₱100,00010 and ₱150,00011 as advances on the
materials hereinabove mentioned as may be necessary in the course of the escalation of the Contract Price. However, citing paragraph 17 of the Contract, Gilbert contended
implementation of the development and construction, the same shall be mutually agreed that further demands for additional costs and escalation were baseless and unreasonable.
upon by the herein parties in writing;
On 11 January 1991, Salvador reiterated his "last and final demand" that Gilbert pay within 5 days The totality of the evidence adduced in this case would show the need for the herein parties to
a total of ₱1,076,253.32 – representing the 20% charge on filling materials, the 20% escalation of make a true and honest accounting of all the expenses incurred in the implementation of the
the Contract Price and the latest billing for additional works. Otherwise, Salvador would stop work subject construction contract, in the presence of an independent third party. As it now stands,
on the Project because he had "no more funds and resources to continue the plaintiff’s cause of action herein is insufficiently supported, wanting in fact [and] in credible and
operation."12 Salvador ceased construction work on the Project on 14 January 1991. competent basis, as afore-discussed.

In a letter dated 16 January 1991, Salvador informed Gilbert that his office had received a notice WHEREFORE, premises considered, judgment is hereby rendered dismissing the instant case for
of illegal construction ("DPWH Notice") from the Balanga, Bataan district office of the Department insufficiency of basis. No pronouncement as to costs.
of Public Works and Highways. The DPWH Notice,13 copy of which Salvador attached to his letter,
was dated 8 January 1991 and received by one of Salvador’s engineers on 15 January Defendants’ counterclaims are likewise dismissed for insufficiency of basis.
1991.14 The DPWH Notice stated that the Project had no building permit and ordered Salvador to
stop immediately all building activities and to contact the district office within 3 days. Salvador
reminded Gilbert that it was the latter’s responsibility under the Contract to secure the necessary
permits and licenses for the Project.
Salvador appealed the trial court’s decision to the Court of Appeals.
A few days later, Gilbert received a demand letter from Salvador’s counsel requiring the payment
of ₱1,076,253.32 and 10% attorney’s fees within 3 days. On 31 January 1991, Salvador filed The Ruling of the Court of Appeals
before the trial court a complaint for collection of sum of money and damages or for declaration of
claim as lien against Romayne and Gilbert ("respondents"). The Court of Appeals upheld the denial of Salvador’s claims. However, the appellate court ruled
that the receipts submitted by respondents during the trial adequately established the damage
In March 1991, Gilbert replaced Salvador with a new contractor and ejected Salvador’s crew from respondents sustained when Salvador ceased work on the Project. The Court of Appeals also
the Project site. found Salvador in bad faith for stopping the construction of the Project without valid reasons.

The Ruling of the Trial Court The Court of Appeals granted respondents’ counterclaims and awarded damages:

After trial on the merits, the trial court dismissed Salvador’s complaint and respondents’ WHEREFORE, premises considered, the judgment of the lower court is hereby REVERSED and
counterclaims for insufficiency of basis. SET ASIDE and a new one is entered:

The trial court observed that the escalation clause in the Contract required Salvador to specify the a) Dismissing the Complaint;
materials the prices of which had increased. Since the documents submitted by Salvador did not
specify these materials, the trial court held that there was no basis for an adjustment or escalation b) Ordering plaintiff to reimburse defendant the amount of ₱1,685,532.48 representing the
of the Contract Price. amount spent by the defendant in completing the project herself less the ₱90,772.91 that
defendant admitted to be the balance of her obligation to plaintiff as of December 28,
The trial court likewise ruled that Salvador failed to prove that the parties had agreed on the 1990;
₱399,190.46 worth of additional work performed on the Project. There was neither a written
agreement nor notice to respondents that Salvador would undertake such additional work. c) Ordering plaintiff to pay defendant ₱100,000.00 moral damages and ₱50,000.00
exemplary damages;
The trial court denied Salvador’s claim for ₱39,000 or 20% of the cost of filling materials for lack of
basis. The evidence showed that respondents themselves purchased the filling materials for d) Ordering plaintiff to pay defendant ₱20,000.00 as attorney’s fees.
₱196,000 and had them delivered to the Project site. Salvador merely caused the spreading of the
filling materials. The trial court ruled that no provision in the Contract or subsequent written Cost against plaintiff-appellant.16
agreement justified the 20% charge on materials not procured or delivered by Salvador.
Hence, the instant petition.
The salient portion of the trial court’s decision reads as follows:
The Issues
The petition contends that: There are two requisites in order that a contractor may claim additional costs:

1. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING PETITIONER TO Art. 1724. The contractor who undertakes to build a structure or any other work for a stipulated
REIMBURSE THE PRIVATE RESPONDENTS OF ₱1,685,532.4817 ALLEGEDLY SPENT IN price, in conformity with plans and specifications agreed upon with the landowner, can neither
COMPLETING THE PROJECT; withdraw from the contract nor demand an increase in the price on account of the higher cost of
labor or materials, save when there has been a change in the plans and specifications, provided:
ADJUSTMENT OR ESCALATION OF THE CONTRACT PRICE HAD NO REASONABLE BASIS, (1) Such change has been authorized by the proprietor in writing; and
CLEAR EVIDENCE; (2) The additional price to be paid to the contractor has been determined in writing by
both parties.21
PETITIONER WERE NOT AUTHORIZED, IN THE LIGHT OF THE ADMISSION OF THE Compliance with both of these requirements is a condition precedent to the recovery of additional
OBLIGATION BY PRIVATE RESPONDENTS AND THE CLEAR EVIDENCE. costs.22 Even the absence of one of the elements required by Article 1724 bars recovery.23

4. THE COURT OF APPEALS ERRED IN HOLDING THAT THE ACT OF PETITIONER IN In the present case, Salvador failed to present any written authority from respondents for any
STOPPING WORK IN THE PROJECT WAS DUE TO NON-PAYMENT OF THE ESCALATED change in the plans or specifications agreed upon in the Contract. Salvador also failed to present
PRICE AND ADDITIONAL WORKS, CONTRARY TO THE CLEAR EVIDENCE.18 any agreement on the price for such additional work. Salvador did not notify respondents in
advance of the additional work he performed on the Project. The Contract did not authorize
The central issues left for the resolution of this Court are: (1) whether Salvador’s claims for Salvador to determine unilaterally the changes to be made in the Project, or what price to charge
additional work, including the 20% charge on filling materials, and escalation of the Contract Price for such changes. Not having fulfilled any of the requirements in Article 1724, Salvador’s claim of
are valid; and (2) whether respondents are entitled to their counterclaim and damages. ₱399,190.46 for alleged additional works has no legal basis.

The Ruling of the Court On the other hand, Salvador’s demand for an escalation of the Contract Price hinges on
paragraph 1824 of the Contract.
The petition is partly meritorious.
Construction contracts may provide for the escalation or increase of the price originally agreed
The Claims for Additional Works Done on the Project upon by the parties in certain instances. As the Court explained in Baylen Corporation v. Court of
and for Escalation of the Contract Price
Escalation clauses in construction contracts commonly provide for increases in the contract price
under certain specified circumstances, e.g., as the cost of selected commodities (cement, fuel,
It is evident from the issues raised that the petition seeks a review of some of the factual findings
steel bars) or the cost of living in the general community (as measured by, for instance, the
of the Court of Appeals.
Consumer Price Index officially published regularly by the Central Bank) move up beyond
specified levels. (Emphasis supplied)
Petitions for review on certiorari under Rule 45 are generally limited to questions of law. Moreover,
factual findings of the Court of Appeals, particularly when they affirm those of the trial court, are
The parties may validly agree on an escalation clause.26 However, the enforceability of an
binding on this Court.19
escalation clause is subject to the conditions stipulated in the contract.27

Upon examining the evidence, the trial and appellate courts found that: (1) respondents did not
Paragraph 18 of the Contract expressly provides for the escalation or adjustment of the Contract
authorize additional works on the Project nor agree to a price for such works; and (2) Salvador did
Price in the event of "substantial increase/s of prices of the materials, like cement, G.I. corrugated
not specify the particular items or materials which had increased in price. The Court will not disturb
sheets."28 Clearly, paragraph 18 of the Contract authorizes an escalation of the Contract Price
these factual findings absent compelling or exceptional reasons.20
only if there are substantial increases in the prices of materials such as cement and G.I.
corrugated sheets. Absent substantial increases in the prices of materials used in the Project,
Given these facts, we rule that the law and the Contract do not allow petitioner’s claims for paragraph 18 would not apply.
additional works and escalation of the Contract Price.
The records show that respondents were amenable to an escalation of the Contract Price, and unilaterally imposed by Philippine National Bank pursuant to an escalation clause, and declared
that they in fact paid Salvador ₱250,000 in anticipation of the escalation. Respondents were that:
merely insisting that Salvador comply with what the Contract required, that is, specify the increase
in the prices of particular materials purchased for the Project. Under paragraph 18, Salvador had In order that obligations arising from contracts may have the force of law between the parties,
the obligation to show that there were substantial increases in the prices of particular materials there must be mutuality between the parties based on their essential equality. A contract
used in the Project. The trial and appellate courts found, and the records support the finding, that containing a condition which makes its fulfillment dependent exclusively upon the uncontrolled will
Salvador did not comply with this obligation. of one of the contracting parties, is void (Garcia vs. Rita Legarda, Inc., 21 SCRA 555). Hence,
even assuming that the ₱1.8 million loan agreement between the PNB and private respondent
Salvador contends that the computation29 he submitted dated 25 December 1990 sufficiently gave the PNB a license (although in fact there was none) to increase the interest rate at will during
complied with the conditions of paragraph 18. He alleges that the 20% increase in the cost of the the term of the loan, that license would have been null and void for being violative of the principle
services enumerated in the computation necessarily included the increase in the prices of the of mutuality essential in contracts. It would have invested the loan agreement with the character of
materials used. He had also informed respondents earlier that the prices of construction materials a contract of adhesion, where the parties do not bargain on equal footing, the weaker party’s (the
had increased by as much as 40%. Salvador further argues that the burden of proof had shifted to debtor) participation being reduced to the alternative "to take it or leave it" (Qua vs. Law Union &
respondents to present a "counter-computation" as to what they considered the correct escalation Rock Insurance Co., 95 Phil. 85). Such a contract is a veritable trap for the weaker party whom the
of the Contract Price. courts of justice must protect against abuse and imposition.36

We do not agree. Moreover, the computation Salvador submitted plainly shows a 20% increase in the cost of
services. The Contract does not authorize any escalation in the cost of services Salvador would
Salvador supplied the materials for the construction of the Project.30 Salvador would thus be in the render to the Project.
best position to provide the actual increases in the prices of the materials. Salvador also alleged
that the prices of construction materials rose substantially since the Project began in July 1990. We agree with the trial court that Salvador has no basis to charge respondents a fee of 20% or
The rule is that he who alleges a fact has the burden of proving it. 31 Salvador never presented ₱39,000 on filling materials that respondents supplied to the Project. Salvador himself testified
receipts, billings from suppliers or similar documents substantiating his claim. Indeed, Salvador’s that: (1) respondents ordered and purchased the filling materials for ₱196,000; and (2)
obdurate refusal to provide the simple details required by the Contract puzzles the Court. respondents caused the delivery of the materials to the Project site.37 Neither the Contract nor any
other document presented during trial provided for a 20% charge on materials that respondents
A contract is the law between the parties and they are bound by its stipulations.32 If the terms of a supplied to the Project. On the contrary, under paragraph 20 of the Contract, "matters relating to
contract are clear and leave no doubt upon the intention of the contracting parties, the literal the Project not stipulated in this contract are deemed not included herein unless the parties may
meaning of its stipulations shall control.33 agree on said matters in writing." Under the Contract, Salvador had the obligation to supply the
materials for the construction of the Project.38 We cannot penalize respondents and reward
Salvador for respondents’ act in assuming part of Salvador’s obligation under the Contract when
Under the terms of paragraph 18 of the Contract, the Contract Price "shall be adjusted accordingly Salvador himself did not object to such act.
as to the particular item/s o[r] materials involved in the increase/s of prices." 34 This stipulation is
plainly worded, requiring no interpretation. The Contract Price could be adjusted only up to the
actual increase in the prices of "particular item/s or materials" used in the Project. Respondents’ Counterclaim and the Damages

Paragraph 18 of the Contract did not give Salvador the right to determine arbitrarily the proportion Awarded by the Court of Appeals
or amount of the escalation in the Contract Price. The Contract requires that any escalation in the
Contract Price must result from "substantial increase/s" in the prices of "particular item/s or The trial court ruled that respondents’ counterclaim had no basis. On appeal, the Court of Appeals
materials" used in the Project. This certainly excludes escalation based on estimates or blanket reversed this ruling and ordered Salvador to reimburse respondents ₱1,594,759.57, representing
increases. The computation Salvador provided failed to identify the particular materials that had the amount allegedly spent by respondents in completing the Project less the ₱90,772.91 balance
increased in price and the amount of such price increases. His general claim that the prices of of the Contract Price. On the ground that Salvador was in bad faith, the appellate court also
construction materials had increased by 40% was not sufficient under the terms of paragraph 18. awarded respondents ₱100,000 in moral damages, ₱50,000 in exemplary damages and ₱20,000
There was thus no basis for Salvador’s demand of a blanket 20% increase on all materials. in attorney’s fees.

Assuming arguendo that the Contract authorized Salvador to determine unilaterally the escalation While factual findings of the lower courts are generally conclusive on this Court, the rule is subject
of the Contract Price, such a provision would be void for violating the principle of mutuality.35 In to certain exceptions, as when the findings of fact of the trial court and Court of Appeals diverge.39
Philippine National Bank v. Court of Appeals, the Court struck down the increases in interest rates
The Court of Appeals concluded that Salvador stopped work on the Project due to respondents’ The DPWH Notice suspended the running of the period given to Salvador to complete the Project.
failure to accede to his demand for payment of the price escalation. The evidence on record Respondents were not able to show that the DPWH lifted the cease-and-desist order, or that they
supports this. Salvador sent respondents several letters threatening to halt construction of the subsequently secured a building permit. Since respondents failed to prove that they had fulfilled
Project precisely for this reason. their obligation under the Contract, Salvador’s failure to complete the Project within the contract
period cannot be attributed solely to his voluntary work stoppage. There is, therefore, no legal
Salvador maintains, however, that he was merely complying with the DPWH Notice when he basis to grant respondents’ counterclaim for ₱1,685,532.48, the amount they allegedly spent to
stopped all construction activities on 14 January 1991. This argument does not convince us. complete the Project.
Despite Salvador’s claim that he received the DPWH Notice on 14 January 1991, the DPWH
Notice itself shows that a certain Dennis Coronado received the notice on 15 January 1991, 40 the Respondents point out that when a new contractor took over to complete the Project, no one from
day after Salvador ceased to work on the Project. the DPWH stopped the Project, showing that Salvador could also have completed the Project
even without the required building permit.45 Respondents betray a disturbingly cavalier attitude
In a contract involving reciprocal obligations, the rules on when a party may be declared in default towards the strict requirements of the law, including the Sanitation Code, 46 in establishing a
are found in Article 1169: memorial park or cemetery. The State strictly regulates the establishment of memorial parks or
cemeteries because they affect public health. Memorial parks or cemeteries must be located and
constructed without contaminating rivers, underground water tables and the surrounding areas.47
Art. 1169. Those obliged to deliver or to do something, incur in delay from the time the obligee
judicially or extrajudicially demands from them the fulfillment of their obligation.
We also find untenable the award of moral and exemplary damages, as well as attorney’s fees to
respondents. A breach of contract may give rise to an award of moral damages if the party guilty
of the breach acted fraudulently or in bad faith.48 In this case, both parties did not comply with their
obligations under the Contract. Respondents must share part of the blame for the stoppage of
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to work on the Project, as the stoppage was partly due to respondents’ failure to obtain the
comply in a proper manner with what is incumbent upon him. From the moment one of the parties necessary building permit. Likewise, a breach of contract may give rise to exemplary damages
fulfills his obligation, delay by the other begins.41 (Emphasis supplied.) only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent
manner.49 Neither the records nor the decisions of the trial and appellate courts indicate that
Although Salvador stopped work on the Project in breach of the Contract and in violation of the Salvador behaved in such a manner and to such degree as to warrant the grant of exemplary
law,42 respondents were likewise remiss in their obligations under the Contract. Paragraph 7 of the damages. We also delete the award of attorney’s fees since none of the grounds for awarding
Contract states: attorney’s fees under Article 2208 of the Civil Code applies to the present case.

7. The project owner shall be responsible in applying for and obtaining at his/her own expens/es WHEREFORE, the Decision of 30 April 1996 of the Court of Appeals in CA-G.R. CV No. 39661 is
(sic) whatever permits, licenses and/or documents as may be necessary from the Government or REVERSED. The Decision of 18 August 1992 of the Regional Trial Court of San Mateo, Rizal,
any of its agencies, or otherwise; xxx Branch 76, in Civil Case No. 754, dismissing petitioner Renato C. Salvador’s complaint as well as
respondents Maria Romayne Miranda and Gilbert Miranda’s counterclaims, is REINSTATED. No
The National Building Code requires a building permit on all construction projects. 43 In the present pronouncement as to costs.
case, the parties were able to start and even almost complete the Project without a building
permit. The failure of respondents to secure the required building permit constitutes a breach of SO ORDERED.
their obligation under the Contract. Even if Salvador did not voluntarily stop working on the
Project, he would not have been able to complete the Project because of the cease-and-desist Davide, Jr., C.J., (Chairman), Panganiban, Ynares-Santiago, and Azcuna, JJ., concur.
order from the DPWH.

Thus, we cannot attribute Salvador’s failure to complete the Project within the contract period
solely to his voluntary work stoppage. Paragraph 6 of the Contract provides:

6. That should there be any restraining order and/or injunction from the court or any legal authority
which will cause stoppage of the work of the CONTRACTOR relating to the said project, the same
should be considered as [a] fortuitous event and/or force majeure, and the time of stoppage of
work shall be deducted from the agreed time of completion of the project;44 (Emphasis supplied)
Republic of the Philippines from his aunt Aspren. According to him, his mother’s inheritance is 142.5 sq. m., that is, 114 sq. m.
SUPREME COURT from Doroteo plus 28.5 sq. m. from Dionisia. Since the area he occupies is only 132 sq. m., 10 he
Manila claims that respondents encroach on his share by 39 sq. m.11

FIRST DIVISION The Case For Respondents

G.R. No. 184109 February 1, 2012 Respondents agree that Doroteo’s five children each inherited 114 sq. m. of Lot No. 552.
However, Macario’s share increased when he received Dionisia’s share. Macario’s increased
CELERINO E. MERCADO, Petitioner, share was then sold to his son Roger, respondents’ husband and father. Respondents claim that
vs. they rightfully possess the land they occupy by virtue of acquisitive prescription and that there is
BELEN* ESPINOCILLA** AND FERDINAND ESPINOCILLA, Respondents. no basis for petitioner’s claim of encroachment.12

DECISION The Trial Court’s Decision

VILLARAMA, JR., J.: On May 15, 2006, the Regional Trial Court (RTC) ruled in favor of petitioner and held that he is
entitled to 171 sq. m. The RTC found that petitioner inherited 142.5 sq. m. from his mother
Salvacion and bought 28.5 sq. m. from his aunt Aspren. The RTC computed that Salvacion,
The Case
Aspren, Isabel and Macario each inherited 142.5 sq. m. of Lot No. 552. Each inherited 114 sq. m.
from Doroteo and 28.5 sq. m. from Dionisia. The RTC further ruled that Macario was not entitled to
Petitioner Celerino E. Mercado appeals the Decision1 dated April 28, 2008 and Resolution2 dated 228 sq. m. Thus, respondents must return 39 sq. m. to petitioner who occupies only 132 sq. m.13
July 22, 2008 of the Court of Appeals (CA) in CA-G.R. CV No. 87480. The CA dismissed
petitioner’s complaint3 for recovery of possession, quieting of title, partial declaration of nullity of
There being no public document to prove Dionisia’s donation, the RTC also held that Macario’s
deeds and documents, and damages, on the ground of prescription.
1948 affidavit is void and is an invalid repudiation of the shares of his sisters Salvacion, Aspren,
and Isabel in Dionisia’s share. Accordingly, Macario cannot acquire said shares by prescription.
The Antecedent Facts The RTC further held that the oral partition of Lot No. 552 by Doroteo’s heirs did not include
Dionisia’s share and that partition should have been the main action. Thus, the RTC ordered
Doroteo Espinocilla owned a parcel of land, Lot No. 552, with an area of 570 sq. m., located at partition and deferred the transfer of possession of the 39 sq. m. pending partition. 14 The
Magsaysay Avenue, Zone 5, Bulan, Sorsogon. After he died, his five children, Salvacion, Aspren, dispositive portion of the RTC decision reads:
Isabel, Macario, and Dionisia divided Lot No. 552 equally among themselves. Later, Dionisia died
without issue ahead of her four siblings, and Macario took possession of Dionisia’s share. In an WHEREFORE, in view of the foregoing premises, the court issues the following ORDER, thus -
affidavit of transfer of real property4 dated November 1, 1948, Macario claimed that Dionisia had
donated her share to him in May 1945.
a) Partially declaring the nullity of the Deed of Absolute Sale of Property dated August 9,
1977 x x x executed by Macario Espinocilla, Betty E. Gullaba and Saida E. Gabelo in
Thereafter, on August 9, 1977, Macario and his daughters Betty Gullaba and Saida Gabelo favor of Roger Espinocilla, insofar as it affects the portion or the share belonging to
sold5 225 sq. m. to his son Roger Espinocilla, husband of respondent Belen Espinocilla and father Salvacion Espinocilla, mother of [petitioner,] relative to the property left by Dionisia
of respondent Ferdinand Espinocilla. On March 8, 1985, Roger Espinocilla sold 6 114 sq. m. to Espinocilla, including [Tax Declaration] No. 13667 and other documents of the same
Caridad Atienza. Per actual survey of Lot No. 552, respondent Belen Espinocilla occupies 109 sq. nature and character which emanated from the said sale;
m., Caridad Atienza occupies 120 sq. m., Caroline Yu occupies 209 sq. m., and petitioner,
Salvacion's son, occupies 132 sq. m.7
b) To leave as is the Deeds of Absolute Sale of May 11, 1983 and March 8, 1985, it
having been determined that they did not involve the portion belonging to [petitioner] x x
The Case For Petitioner x.

Petitioner sued the respondents to recover two portions: an area of 28.5 8 sq. m. which he bought c) To effect an effective and real partition among the heirs for purposes of determining the
from Aspren and another 28.5 sq. m. which allegedly belonged to him but was occupied by exact location of the share (114 sq. m.) of the late Dionisia Espinocilla together with
Macario’s house.9 His claim has since been modified to an alleged encroachment of only 39 sq. m. the 28.5 sq. m. belonging to [petitioner’s] mother Salvacion, as well as, the exact location
that he claims must be returned to him. He avers that he is entitled to own and possess 171 sq. m. of the 39 sq. m. portion belonging to the [petitioner] being encroached by the
of Lot No. 552, having inherited 142.5 sq. m. from his mother Salvacion and bought 28.5 sq. m.
[respondents], with the assistance of the Commissioner (Engr. Fundano) appointed by Here, petitioner himself admits the adverse nature of respondents’ possession with his assertion
this court. that Macario’s fraudulent acquisition of Dionisia’s share created a constructive trust. In a
constructive trust, there is neither a promise nor any fiduciary relation to speak of and the so-
d) To hold in abeyance the transfer of possession of the 39 sq. m. portion to the called trustee (Macario) neither accepts any trust nor intends holding the property for the
[petitioner] pending the completion of the real partition above-mentioned.15 beneficiary (Salvacion, Aspren, Isabel). The relation of trustee and cestui que trust does not in fact
exist, and the holding of a constructive trust is for the trustee himself, and therefore, at all times
adverse.21 Prescription may supervene even if the trustee does not repudiate the relationship. 22
The CA Decision

Then, too, respondents’ uninterrupted adverse possession for 55 years of 109 sq. m. of Lot No.
On appeal, the CA reversed the RTC decision and dismissed petitioner’s complaint on the ground
552 was established. Macario occupied Dionisia’s share in 1945 although his claim that Dionisia
that extraordinary acquisitive prescription has already set in in favor of respondents. The CA found
donated it to him in 1945 was only made in a 1948 affidavit. We also agree with the CA that
that Doroteo’s four remaining children made an oral partition of Lot No. 552 after Dionisia’s death
Macario’s possession of Dionisia’s share was public and adverse since his other co-owners, his
in 1945 and occupied specific portions. The oral partition terminated the co-ownership of Lot No.
three other sisters, also occupied portions of Lot No. 552. Indeed, the 1977 sale made by Macario
552 in 1945. Said partition also included Dionisia’s share because the lot was divided into four
and his two daughters in favor of his son Roger confirms the adverse nature of Macario’s
parts only. And since petitioner’s complaint was filed only on July 13, 2000, the CA concluded that
possession because said sale of 225 sq. m.23 was an act of ownership over Macario’s original
prescription has set in.16 The CA disposed the appeal as follows:
share and Dionisia’s share. In 1985, Roger also exercised an act of ownership when he sold 114
sq. m. to Caridad Atienza. It was only in the year 2000, upon receipt of the summons to answer
WHEREFORE, the appeal is GRANTED. The assailed May 15, 2006 Decision of the Regional petitioner’s complaint, that respondents’ peaceful possession of the remaining portion (109 sq. m.)
Trial Court (RTC) of Bulan, Sorsogon is hereby REVERSED and SET ASIDE. The Complaint of was interrupted. By then, however, extraordinary acquisitive prescription has already set in in favor
the [petitioner] is hereby DISMISSED. No costs.17 of respondents. That the RTC found Macario’s 1948 affidavit void is of no moment. Extraordinary
prescription is unconcerned with Macario’s title or good faith. Accordingly, the RTC erred in ruling
The Instant Petition that Macario cannot acquire by prescription the shares of Salvacion, Aspren, and Isabel, in
Dionisia’s 114-sq. m. share from Lot No. 552.
The core issue to be resolved is whether petitioner’s action to recover the subject portion is barred
by prescription. Moreover, the CA correctly dismissed petitioner’s complaint as an action for reconveyance based
on an implied or constructive trust prescribes in 10 years from the time the right of action
Petitioner confirms oral partition of Lot No. 552 by Doroteo's heirs, but claims that his share accrues.24 This is the other kind of prescription under the Civil Code, called extinctive prescription,
increased from 114 sq. m. to 171 sq. m. and that respondents encroached on his share by 39 sq. where rights and actions are lost by the lapse of time.25 Petitioner’s action for recovery of
m. Since an oral partition is valid, the corresponding survey ordered by the RTC to identify the 39 possession having been filed 55 years after Macario occupied Dionisia’s share, it is also barred by
sq. m. that must be returned to him could be made.18Petitioner also alleges that Macario extinctive prescription. The CA while condemning Macario’s fraudulent act of depriving his three
committed fraud in acquiring his share; hence, any evidence adduced by him to justify such sisters of their shares in Dionisia’s share, equally emphasized the fact that Macario’s sisters
acquisition is inadmissible. Petitioner concludes that if a person obtains legal title to property by wasted their opportunity to question his acts.
fraud or concealment, courts of equity will impress upon the title a so-called constructive trust in
favor of the defrauded party.19 WHEREFORE, we DENY the petition for review on certiorari for lack of merit and AFFIRM the
assailed Decision dated April 28, 2008 and Resolution dated July 22, 2008 of the Court of Appeals
The Court’s Ruling in CA-G.R. CV No. 87480.

We affirm the CA ruling dismissing petitioner’s complaint on the ground of prescription.1âwphi1 No pronouncement as to costs.

Prescription, as a mode of acquiring ownership and other real rights over immovable property, is SO ORDERED.
concerned with lapse of time in the manner and under conditions laid down by law, namely, that
the possession should be in the concept of an owner, public, peaceful, uninterrupted, and
adverse. Acquisitive prescription of real rights may be ordinary or extraordinary. Ordinary
acquisitive prescription requires possession in good faith and with just title for 10 years. In
extraordinary prescription, ownership and other real rights over immovable property are acquired
through uninterrupted adverse possession for 30 years without need of title or of good faith.20