G.R. No.

L-46296

September 24, 1991

EPITACIO DELIMA, PACLANO DELIMA, FIDEL DELIMA, VIRGILIO DELIMA, GALILEO DELIMA, JR.,
BIBIANO BACUS, OLIMPIO BACUS and PURIFICACION BACUS, petitioners,
vs.
HON. COURT OF APPEALS, GALILEO DELIMA (deceased), substituted by his legal heirs, namely:
FLAVIANA VDA. DE DELIMA, LILY D. ARIAS, HELEN NIADAS, ANTONIO DELIMA, DIONISIO DELIMA,
IRENEA DELIMA, ESTER DELIMA AND FELY DELIMA, respondents.
Gabriel J. Canete for petitioners.
Emilio Lumontad, Jr. for private respondents.

MEDIALDEA, J.:p
This is a petition for review on certiorari of the decision of the Court of Appeals reversing the trial
court's judgment which declared as null and void the certificate of title in the name of
respondents' predecessor and which ordered the partition of the disputed lot among the parties
as co-owners.
The antecedent facts of the case as found both by the respondent appellate court and by the
trial court are as follows:
During his lifetime, Lino Delima acquired Lot No. 7758 of the Talisay-Minglanilla Friar Lands Estate
in Cebu by sale on installments from the government. Lino Delima later died in 1921 leaving as
his only heirs three brothers and a sister namely: Eulalio Delima, Juanita Delima, Galileo Delima
and Vicente Delima. After his death, TCT No. 2744 of the property in question was issued on
August 3, 1953 in the name of the Legal Heirs of Lino Delima, deceased, represented by Galileo
Delima.
On September 22, 1953, Galileo Delima, now substituted by respondents, executed an affidavit
of "Extra-judicial Declaration of Heirs." Based on this affidavit, TCT No. 2744 was cancelled and
TCT No. 3009 was issued on February 4,1954 in the name of Galileo Delima alone to the
exclusion of the other heirs.
Galileo Delima declared the lot in his name for taxation purposes and paid the taxes thereon
from 1954 to 1965.
On February 29, 1968, petitioners, who are the surviving heirs of Eulalio and Juanita Delima, filed
with the Court of First Instance of Cebu (now Regional Trial Court) an action for reconveyance
and/or partition of property and for the annulment of TCT No. 3009 with damages against their
uncles Galileo Delima and Vicente Delima,. Vicente Delima was joined as party defendant by the
petitioners for his refusal to join the latter in their action.
On January 16, 1970, the trial court rendered a decision in favor of petitioners, the dispositive
portion of which states:
IN VIEW OF THE FOREGOING CONSIDERATIONS, the following are the declared owners of Lot No.
7758 of the Talisay-Minglanilla Friar Lands Estate presently covered by transfer Certificate of Title
No. 3009, each sharing a pro-indiviso share of one-fourth;
1)

Vicente Delima (one-fourth)

2)
Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio Bacus and Purificacion Bacus (onfourth);
3)
Heirs of Eulalio Delima, namely Epitacio, Pagano, Fidel, Virgilio and Galileo Jr., all surnamed
Delima (one-fourth); and
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).
Transfer Certificate of Title No. 3009 is declared null and void and the Register of Deeds of Cebu
is ordered to cancel the same and issue in lieu thereof another title with the above heirs as proindiviso owners.
After the payment of taxes paid by Galileo Delima since 1958, the heirs of Galileo Delima are
ordered to turn a over to the other heirs their respective shares of the fruits of the lot in question
computed at P170.00 per year up to the present time with legal (interest).
Within sixty (60) days from receipt of this decision the parties are ordered to petition the lot in
question and the defendants are directed to immediately turn over possession of the shares here
awarded to the respective heirs.
Defendants are condemned to pay the costs of the suit.
The counterclaim is dismissed.
SO ORDERED. (pp. 54-55, Rollo)
Not satisfied with the decision, respondents appealed to the Court of Appeals. On May 19, 1977,
respondent appellate court reversed the trial court'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
(Galileo Delima) alone paid the remaining balance of the purchase price of the lot and the realty
taxes thereon (p. 26, Rollo).
Hence, this petition was filed with the petitioners alleging that the Court of Appeals erred:
1)
In not holding that the right of a co-heir to demand partition of inheritance is
imprescriptible. If it does, the defenses of prescription and laches have already been waived.
2)

In disregarding the evidence of the petitioners.(p.13, Rollo)

The issue to be resolved in the instant case is whether or not petitioners' action for partition is
already barred by the statutory period provided by law which shall enable Galileo Delima to
perfect his claim of ownership by acquisitive prescription to the exclusion of petitioners from
their shares in the disputed property. Article 494 of the Civil Code expressly provides:
Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may
demand at any time the partition of the thing owned in common, insofar as his share is
concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of time, not
exceeding ten years, shall be valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so
long as he expressly or impliedly recognizes the co-ownership.
As a rule, possession by a co-owner will not be presumed to be adverse to the others, but will be
held to benefit all. It is understood that the co-owner or co-heir who is in possession of an
inheritance pro-indiviso for himself and in representation of his co-owners or co-heirs, if, as such
owner, 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).
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 coowners 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 partition can no longer be invoked or applied when one of the co-owners has adversely
possessed the property as exclusive owner for a period sufficient to vest ownership by
prescription.
It is settled that possession by a co-owner or co-heir is that of a trustee. In order that such
possession is considered adverse to the cestui que trust amounting to a repudiation of the coownership, the following elements must concur: 1) that the trustee has performed unequivocal
acts amounting to an ouster of the cestui que trust; 2) that such positive acts of repudiation had
been made known to the cestui que trust; and 3) that the evidence thereon should be clear and
conclusive (Valdez v. Olorga, No. L-22571, May 25, 1973, 51 SCRA 71; Pangan v. Court of
Appeals, No. L-39299, October 18, 1988, 166 SCRA 375).
We have held that when a co-owner of the property in question executed a deed of partition and
on the strength thereof obtained the cancellation of the title in the name of their predecessor
and the issuance of a new one wherein he appears as the new owner of the property, thereby in
effect denying or repudiating the ownership of the other co-owners over their shares, the statute
of limitations started to run for the purposes of the action instituted by the latter seeking a
declaration of the existence of the co-ownership and of their rights thereunder (Castillo v. Court
of Appeals, No. L-18046, March 31, 1964, 10 SCRA 549). Since an action for reconveyance of land
based on implied or constructive trust prescribes after ten (10) years, it is from the date of the
issuance of such title that the effective assertion of adverse title for purposes of the statute of
limitations is counted (Jaramil v. Court of Appeals, No. L-31858, August 31, 1977, 78 SCRA 420).
Evidence shows that TCT No. 2744 in the name of the legal heirs of Lino Delima, represented by
Galileo Delima, was cancelled by virtue of an 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
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
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
prescription. Hence, when petitioners filed their action for reconveyance and/or to compel
partition 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.

ACCORDINGLY, the petition is hereby DENIED and the assailed decision of the Court of Appeals
dated May 19, 1977 is AFFIRMED
G.R. No. L-57062 January 24, 1992
MARIA DEL ROSARIO MARIATEGUI, ET AL., petitioners,
vs.
HON. COURT OF APPEALS, JACINTO MARIATEGUI, JULIAN MARIATEGUI and PAULINA MARIATEGUI,
respondents.
Montesa, Albon & Associates for petitioners.
Parmenio B. Patacsil, Patacsil Twins Law Office for the heirs of the late Maria del Rosario
Mariategui.
Tinga, Fuentes & Tagle Firm for private respondents.

BIDIN, J.:
This is a petition for review on certiorari of the decision * of the Court of Appeals dated
December 24, 1980 in CA-G.R. No. 61841, entitled "Jacinto Mariategui, et al. v. Maria del Rosario
Mariategui, et al.," reversing the judgment of the then Court of First Instance of Rizal, Branch VIII
** at Pasig, Metro Manila.
The undisputed facts are as follows:
Lupo Mariategui died without a will on June 26, 1953 (Brief for respondents, Rollo, pp. 116; 8).
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 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 and left a son named Ruperto. With his second wife, Flaviana Montellano, he begot a
daughter named Cresenciana who was born on May 8, 1910 (Rollo, Annex "A", p. 36).
Lupo Mariategui and Felipa Velasco (Lupo's third wife) got married sometime in 1930. They had
three children, namely: Jacinto, born on July 3, 1929, Julian, born on February 16, 1931 and
Paulina, born on April 19, 1938. Felipa Velasco Mariategui died in 1941 (Rollo, Ibid).
At the time of his death, Lupo Mariategui left certain properties which he acquired when he was
still unmarried (Brief for respondents, Rollo, pp. 116; 4). These properties are described in the
complaint as Lots Nos. 163, 66, 1346 and 156 of the Muntinglupa Estate (Rollo, Annex "A", p. 39).
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 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-mentioned heirs.
Subsequently, the registered owners caused the subdivision of the said lot into Lots Nos. 163-A
to 163-H, for which separate transfer certificates of title were issued to the respective parties
(Rollo, ibid).

On April 23, 1973, Lupo's children by his third marriage with Felipa Velasco (Jacinto, Julian and
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 the adjudication of Lot No. 163 to their co-heirs, they (children of the third marriage) were
deprived 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
(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,
p. 13). Thereafter, they filed a motion to dismiss on the grounds of lack of cause of action and
prescription. They specifically contended that the complaint was one for recognition of natural
children. On August 14, 1974, the motion to dismiss was denied by the trial court, in an order the
dispositive portion of which reads:
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 motion to dismiss is
therefore denied for lack of merit.
SO ORDERED. (Ibid, p. 37).
However, on February 16, 1977, the complaint as well as petitioners' counterclaim were
dismissed by the trial court, in its decision stating thus:
The plaintiffs' right to inherit depends upon the acknowledgment or recognition of their
continuous enjoyment and possession of status of children of their supposed father. The
evidence fails to sustain either premise, and it is clear that 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
committed an error ". . . in not finding that the parents of the appellants, Lupo Mariategui and
Felipa Velasco (were) lawfully married, and in holding (that) they (appellants) are not legitimate
children of their said parents, thereby divesting them of their inheritance . . . " (Rollo, pp. 14-15).
On December 24, 1980, the Court of Appeals rendered a decision declaring all the children and
descendants of Lupo Mariategui, including appellants Jacinto, Julian and Paulina (children of the
third marriage) as entitled to equal shares in the estate of Lupo Mariategui; directing the
adjudicatees in the extrajudicial partition of real properties who eventually acquired transfer
certificates of title thereto, to execute deeds of reconveyance in favor, and for the shares, of
Jacinto, Julian and Paulina provided rights of innocent third persons are not prejudiced otherwise
the said adjudicatees shall reimburse the said heirs the fair market value of their shares; and
directing all the parties to submit to the lower court a project of partition in the net estate of
Lupo Mariategui after payment of taxes, other government charges and outstanding legal
obligations.
The defendants-appellees filed a motion for reconsideration of said decision but it was denied for
lack of merit. Hence, this petition which was given due course by the court on December 7,
1981.
The petitioners submit to the Court the following issues: (a) whether or not prescription barred
private respondents' right to demand the partition of the estate of Lupo Mariategui, and (b)
whether or not the private respondents, who belatedly filed the action for recognition, were able
to prove their successional rights over said estate. The resolution of these issues hinges,

however, on the resolution of the preliminary matter, i.e., the nature of the complaint filed by the
private respondents.
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
repeatedly acknowledged and confirmed plaintiffs as his children and the latter, in turn, have
continuously enjoyed such status since their birth"; and "on the basis of their relationship to the
deceased Lupo Mariategui and in accordance with the law on intestate succession, plaintiffs are
entitled to inherit shares in the foregoing estate (Record on Appeal, pp. 5 & 6). It prayed, among
others, that plaintiffs be declared as children and heirs of Lupo Mariategui and adjudication in
favor of plaintiffs their lawful shares in the estate of the decedent (Ibid, p. 10).
A perusal of the entire allegations of the complaint, however, shows that the action is principally
one of partition. The allegation with respect to the status of the private respondents was raised
only collaterally to assert their rights in the estate of the deceased. Hence, the Court of Appeals
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
282 [1988]).
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 plaintiff is entitled based on the facts alleged by him in his complaint, although it is not the
relief demanded, is what determines the nature of the action (1 Moran, p. 127, 1979 ed., citing
Baguioro vs. Barrios, et al., 77 Phil. 120).
With respect to the legal basis of private respondents' demand for partition of the estate of Lupo
Mariategui, the Court of Appeals aptly held that the private respondents are legitimate children
of the deceased.
Lupo Mariategui and Felipa Velasco were alleged to have been lawfully married in or about 1930.
This fact is based on the declaration communicated by Lupo Mariategui to Jacinto who testified
that "when (his) father was still living, he was able to mention to (him) that he and (his) mother
were able to get married before a Justice of the Peace of Taguig, Rizal." The spouses deported
themselves as husband and wife, and were known in the community to be such. Although no
marriage certificate was introduced to this effect, no evidence was likewise offered to controvert
these facts. Moreover, the mere fact that no record of the marriage exists does not invalidate the
marriage, provided all requisites for its validity are present (People vs. Borromeo, 133 SCRA 106
[1984]).
Under these circumstances, a marriage may be presumed to have taken place between Lupo and
Felipa. The laws presume that a man and a woman, deporting themselves as husband and wife,
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 ordinary course of nature and the ordinary habits of life (Section 5 (z), (bb), (cc),
Rule 131, Rules of Court; Corpus v. Corpus, 85 SCRA 567 [1978]; Saurnaba v. Workmen's
Compensation, 85 SCRA 502 [1978]; Alavado v. City Gov't. of Tacloban, 139 SCRA 230 [1985];
Reyes v. Court of Appeals, 135 SCRA 439 [1985]).
Courts look upon the presumption of marriage with great favor as it is founded on the following
rationale:
The basis of human society throughout the civilized world is that of marriage. Marriage in this
jurisdiction is not only a civil contract, but it is a new relation, an institution in the maintenance
of which the public is deeply interested. Consequently, every intendment of the law leans toward
legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the
absence of any counterpresumption or evidence special to that case, to be in fact married. 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 constant violation of decency and of
law . . . (Adong vs. Cheong Seng Gee, 43 Phil. 43, 56 [1922] quoted in Alavado vs. City
Government of Tacloban, 139 SCRA 230 [1985]).
So much so that once a man and a woman have lived as husband and wife and such relationship
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).
The Civil Code provides for the manner under which legitimate filiation may be proven. However,
considering the effectivity of the Family Code of the Philippines, the case at bar must be decided
under a new if not entirely dissimilar set of rules because the parties have been overtaken by
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
eliminated (Castro vs. Court of Appeals, 173 SCRA 656 [1989]).
Article 172 of the said Code provides that the filiation of legitimate children may be established
by the record of birth appearing in the civil register or a final judgment or by the open and
continuous possession of the status of a legitimate child.
Evidence on record proves the legitimate filiation of the private respondents. Jacinto's birth
certificate is a record of birth referred to in the said article. Again, no evidence which tends to
disprove facts contained therein was adduced before the lower court. In the case of the two other
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.
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, the private respondents and Lupo lived together until Lupo's death in 1953. It should be
noted that even the trial court mentioned in its decision the admission made in the affidavit of
Cresenciana Mariategui Abas, one of the petitioners herein, that " . . . Jacinto, Julian and Paulina
Mariategui ay pawang mga kapatid ko sa
ama . . ." (Exh. M, Record on Appeal, pp. 65-66).
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
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 as the heirs for whose benefit prescription is invoked, have not expressly or impliedly
repudiated the co-ownership. In other words, prescription of an action for partition does not lie
except when the co-ownership is properly repudiated by the co-owner (Del Banco vs.
Intermediate Appellate Court, 156 SCRA 55 [1987] citing Jardin vs. Hollasco, 117 SCRA 532
[1982]).
Otherwise stated, a co-owner cannot acquire by prescription the share of the other co-owners
absent a clear repudiation of co-ownership duly communicated to the other co-owners (Mariano
vs. De Vega, 148 SCRA 342 [1987]). Furthermore, an action to demand partition is imprescriptible
and cannot be barred by laches (Del Banco vs. IAC, 156 SCRA 55 [1987]). On the other hand, an
action for partition may be seen to be at once an action for declaration of co-ownership and for
segregation and conveyance of a determinate portion of the property involved (Roque vs. IAC,
165 SCRA 118 [1988]).

Petitioners contend that they have repudiated the co-ownership when they executed the
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 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]).
In their complaint, private respondents averred that in spite of their demands, petitioners, except
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
by the petitioners in their answer (Ibid, p. 14), was never successfully refuted by them. Put
differently, in spite of petitioners' undisputed knowledge of their relationship to private
respondents 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 deceased father and had been assured by the latter (Maria del Rosario) not
to worry because they will get some shares. As a matter of fact, sometime in 1969, Jacinto
constructed a house where he now resides on Lot No. 163 without any complaint from
petitioners.
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:
Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by
repudiation (of the co-ownership). The act of repudiation, in turn, is subject to certain conditions:
(1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made known
to the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in
possession through open, continuous, exclusive, and notorious possession of the property for the
period required by law.
xxx

xxx

xxx

It is true that registration under the Torrens system is constructive notice of title, but it has
likewise been our holding that the Torrens title does not furnish shield for fraud. It is therefore no
argument to say that the act of registration is equivalent to notice of repudiation, assuming there
was one, notwithstanding the long-standing rule that registration operates as a universal notice
of title.
Inasmuch as petitioners registered the properties in their names in fraud of their co-heirs
prescription can only be deemed to have commenced from the time private respondents
discovered the petitioners' act of defraudation (Adille vs. Court of Appeals, supra). Hence,
prescription definitely may not be invoked by petitioners because private respondents
commenced the instant action barely two months after learning that petitioners had registered in
their names the lots involved.
WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals dated
December 24, 1980 is Affirmed.
G.R. No. L-3404
ANGELA I. TUASON, plaintiff-appellant,
vs.
ANTONIO TUASON, JR., and GREGORIO ARANETA, INC., defendants-appellees.
Alcuaz & Eiguren for appellant.
Araneta & Araneta for appellees.

MONTEMAYOR, J.:
In 1941 the sisters Angela I. Tuason and Nieves Tuason de Barreto and their brother Antonio
Tuason Jr., held a parcel of land with an area of 64,928.6 sq. m. covered by Certificate of Title No.
60911 in Sampaloc, Manila, in common, each owning an undivided 1/3 portion. Nieves wanted
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 buy it. The offer was later made to their mother but the old lady also declined to buy, saying
that if the property later increased in value, she might be suspected of having taken advantage
of her daughter. Finally, the share of Nieves was sold to Gregorio Araneta Inc., a domestic
corporation, and a new Certificate of Title No. 61721 was issued in lieu of the old title No. 60911
covering the same property. The three co-owners agreed to have the whole parcel subdivided
into small lots and then sold, the proceeds of the sale to be later divided among them. This
agreement is embodied in a document (Exh. 6) entitled "Memorandum of Agreement" consisting
of ten pages, dated June 30, 1941.
Before, during and after the execution of this contract (Exh. 6), Atty. J. Antonio Araneta was
acting 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 coowner, Araneta, Inc.
The pertinent terms of the contract (Exh. 6) may be briefly stated as follows: The three coowners agreed to improve the property by filling it and constructing roads and curbs on the same
and then subdivide it into small lots for sale. Araneta Inc. was to finance the whole development
and subdivision; it was prepare a schedule of prices and conditions of sale, subject to the subject
to the approval of the two other co-owners; it was invested with authority to sell the lots into
which the property was to be subdivided, and execute the corresponding contracts and deeds of
sale; it 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 personnel, commissions, office and legal expenses, including expenses in instituting
all actions to eject all tenants or occupants on the property; and it undertook the duty to furnish
each of the two co-owners, Angela and Antonio Tuason, copies of the subdivision plans and the
monthly sales and rents and collections made thereon. In return for all this undertaking and
obligation assumed by Araneta Inc., particularly the financial burden, it was to receive 50 per
cent of the gross selling 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 each will receive 16.33 per cent of the gross receipts.
Because of the importance of paragraphs 9, 11 and 15 of the contract (Exh. 6), for purposes of
reference we are reproducing them below:
(9) This contract shall remain in full force and effect during all the time that it may be 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 thereof;
(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 subdivided; the powers herein
vested to the PARTY OF THE SECOND PART may, under its own responsibility and risk, delegate
any of its powers under this contract to any of its officers, employees or to third persons;
(15) No co-owner of the property subject-matter of this contract shall sell, alienate or dispose of
his ownership, interest or participation therein without first giving preference to the other coowners to purchase and acquire the same under the same terms and conditions as those offered

by any other prospective purchaser. Should none of the co-owners of the property subject-matter
of this contract exercise the said preference to acquire or purchase the same, then such sale to a
third party shall be made subject to all the conditions, terms, and dispositions of this contract;
provided, the PARTIES OF THE FIRST PART (meaning Angela and Antonio) shall be bound by this
contract as long as the PARTY OF THE SECOND PART, namely, the GREGORIO ARANETA, INC. is
controlled by the members of the Araneta family, who are stockholders of the said corporation at
the time of the signing of this contract and/or their lawful heirs;
On September 16, 1944, Angela I. Tuason revoked the powers conferred on her attorney-in-fact
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 abuse of powers granted to it in the document, she had decided to rescind said contract and
she asked that the property held in common be partitioned. Later, on November 20, 1946,
Angela filed a complaint in the Court of First Instance of Manila asking the court to order the
partition of the property in question and that she be given 1/3 of the same including rents
collected during the time that the same including rents collected during the time that Araneta
Inc., administered said property.
The suit was administered principally against Araneta, Inc. Plaintiff's brother, Antonio Tuason Jr.,
one of the co-owners evidently did not agree to the suit and its purpose, for he evidently did not
agree to the suit and its purpose, for he joined Araneta, Inc. as a co-defendant. After hearing and
after considering the extensive evidence introduce, oral and documentary, the trial court
presided over by Judge Emilio Pea in a long and considered decision dismissed the complaint
without 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.
Some of the reasons advanced by appellant to have the memorandum contract (Exh. 6) declared
null and void or rescinded are that she had been tricked into signing it; that she was given to
understand by Antonio Araneta acting as her attorney-in-fact and legal adviser that said contract
would be similar to another contract of subdivision of a parcel into lots and the sale thereof
entered into by Gregorio Araneta Inc., and the heirs of D. Tuason, Exhibit "L", but it turned out
that the two contracts widely differed from each other, the terms of contract Exh. "L" being
relatively much more favorable to the owners therein the less favorable to Araneta Inc.; that Atty.
Antonio Araneta was more or less disqualified to act as her legal adviser as he did because he
was one of the officials of Araneta Inc., and finally, that the defendant company has violated the
terms of the contract (Exh. 6) by not previously showing her the plans of the subdivision, the
schedule of prices and conditions of the sale, in not introducing the necessary improvements into
the land and in not delivering to her her share of the proceeds of the rents and sales.
We have examined Exh. "L" and compared the same with the contract (Exh. 6) and we agree with
the trial court that in the main the terms of both contracts are similar and practically the same.
Moreover, as correctly found by the trial court, the copies of both contracts were shown to the
plaintiff Angela and her husband, a broker, and both had every opportunity to go over and
compare them and decide on the advisability of or disadvantage in entering into the contract
(Exh. 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 with which Angela contracted, and that he committed no breach of trust. According to
the evidence Araneta, the pertinent papers, and sent to her checks covering her receive the
same; and that as a matter of fact, at the time of the trial, Araneta Inc., had spent about
P117,000 in improvement and had received as proceeds on the sale of the lots the respectable
sum of P1,265,538.48. We quote with approval that portion of the decision appealed from on
these points:
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 nothing
that is violative of the fiduciary relationship existing between him and the plaintiff. The act of J.

Antonio Araneta in giving the plaintiff a copy of exhibit 6 before the same was executed,
constitutes a full disclosure of the facts, for said copy contains all that appears now in exhibit 6.
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 improvements on the
property as required by paragraphs 1 and 3 of the contract; (2) to 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.
The Court finds from the evidence that he defendant Gregorio Araneta, Incorporated has
substantially complied with obligation imposed by the contract exhibit 6 in its paragraph 1, and
that for improvements alone, it has disbursed the amount of P117,167.09. It has likewise paid
taxes, commissions and other expenses incidental to its obligations as denied in the agreement.
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 sale of subdivided
lots, and monthly statement of collections form the sale of the lots, the Court is of the opinion
that it has no basis. The evidence shows that the defendant corporation submitted to the plaintiff
periodically all the data relative to prices and conditions of the sale of the subdivided lots,
together with the amount corresponding to her. But without any justifiable reason, she refused to
accept them. With the indifferent attitude adopted by the plaintiff, it was thought useless for
Gregorio Araneta, Incorporated to continue sending her statement of accounts, checks and other
things. She had shown on various occasions that she did not want to have any further dealings
with the said corporation. So, if the defendant corporation proceeded with the sale of the
subdivided lots without the approval of the plaintiff, it was because it was under the correct
impression that under the contract exhibit 6 the decision of the majority co-owners is binding
upon all the three.
The Court feels that recission of the contract exhibit 6 is not minor violations of the terms of the
agreement, the general rule is that "recission will not be permitted for a slight or casual breach
of the contract, but only for such breaches as are so substantial and fundamental as to defeat
the object of the parties in making the agreement" (Song Fo & Co. vs. Hawaiian-Philippine Co., 47
Phil. 821).
As regards improvements, the evidence shows that during the Japanese occupation from 1942
and up to 1946, the Araneta Inc. although willing to fill the land, was unable to obtain the
equipment and gasoline necessary for filling the low places within the parcel. As to sales, the
evidence shows that Araneta Inc. purposely stopped selling the lots during the Japanese
occupantion, knowing that the purchase price would be paid in Japanese military notes; and Atty.
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.
But the main contention of the appellant is that the contract (Exh. 6) should be declared null and
void because its terms, particularly paragraphs 9, 11 and 15 which we have reproduced, violate
the provisions of Art. 400 of the Civil Code, which for the purposes of reference we quote below:
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.
Nevertheless, an agreement to keep the thing undivided for a specified length of time, not
exceeding ten years, shall be valid. This period may be a new agreement.
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-ownership and of the community by selling the parcel held in common and dividing the
proceeds of the sale among the co-owners. The obligation imposed in the contract to preserve
the co-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 tenyears 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.
G.R. No. L-4656

November 18, 1912

RICARDO PARDELL Y CRUZ and

VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-appellees,
vs.
GASPAR DE BARTOLOME Y ESCRIBANO and
MATILDE ORTIZ Y FELIN DE BARTOLOME, defendants-appellants.
Gaspar de Bartolome, in his own behalf.
B. Gimenez Zoboli, for appellees.

TORRES, J.:
This is an appeal by bill of exceptions, from the judgment of October 5, 1907, whereby the
Honorable Dionisio Chanco, judge, absolved the defendants from the complaint, and the plaintiff
from a counterclaim, without special finding as to costs.

Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de Pardell, the first of whom,
absent in Spain by reason of his employment, conferred upon the second sufficient and ample
powers to appear before the courts of justice, on June 8, 1905, in his written complaint, alleged
that the plaintiff, Vicente Ortiz, and the defendant, Matilde Ortiz, are the duly recognized natural
daughters of the spouses Miguel Ortiz and Calixta Felin y Paula who died in Vigan, Ilocos Sur, in
1875 and 1882, respectively; that Calixta Felin, prior to her death, executed on August 17, 1876,
a nuncupative will in Vigan whereby she made her four children, named Manuel, Francisca,
Vicenta, and Matilde, surnamed Ortiz y Felin, her sole and universal heirs of all her property; that,
of the persons enumerated, Manuel died before his mother and Francisca a few years after her
death, leaving no heirs by force of law, and therefore the only existing heirs of the said testatrix
are the plaintiff Vicenta Ortiz and the defendant Matilde Ortiz; that, aside from some personal
property and jewelry already divided among the heirs, the testatrix possessed, at the time of the
execution of her will, and left at her death the real properties which, with their respective cash
values, are as follows:
1. A house of strong material, with the lot on which it is built, situated on Escolta Street, Vigan,
and valued at
P6,000.00
2. A house of mixed material, with the lot on which it stands, at No. 88 Washington Street, Vigan;
valued at
1,500.00
3. A lot on Magallanes Street, Vigan; valued at
100.00
4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at
60.00
5. A parcel of rice land in the pueblo of Santa Lucia; valued at
86.00
6. Three parcels of land in the pueblo of Candon; valued at
150.00
Total 7,896.00
That, on or about the first months of the year 1888, the defendants, without judicial
authorization, nor friendly or extrajudicial agreement, took upon themselves the administration
and enjoyment of the said properties and collected the rents, fruits, and products thereof, to the
serious detriment of the plaintiffs' interest; that, notwithstanding the different and repeated
demands extrajudicially made upon Matilde Ortiz to divide the aforementioned properties with
the plaintiff Vicente and to deliver to the latter the one-half thereof, together with one-half of the
fruits and rents collected therefrom, the said defendant and her husband, the self-styled
administrator of the properties mentioned, had been delaying the partition and delivery of the
said properties by means of unkept promises and other excuses; and that the plaintiffs, on
account of the extraordinary delay in the delivery of one-half of said properties, or their value in
cash, as the case might be, had suffered losses and damages in the sum of P8,000. Said counsel
for the plaintiffs therefore asked that judgment be rendered by sentencing the defendants,
Gaspar de Bartolome, and Matilde Ortiz Felin de Bartolome, to restore and deliver to the plaintiffs
one-half of the total value in cash, according to appraisal, of the undivided property specified,
which one-half amounted approximately to P3,948, or if deemed proper, to recognize the plaintiff
Vicenta Ortiz to be vested with the full and absolute right of ownership to the said undivided onehalf of the properties in question, as universal testamentary heir thereof together with the
defendant Matilde Ortiz, to indemnify the plaintiffs in the sum of P8,000, for losses and damages,
and to pay the costs.
Counsel for the defendants, in his answer denied the facts alleged in paragraphs 1, 4, 6, 7, and 8
thereof, inasmuch as, upon the death of the litigating sister's brother Manuel, their mother, who
was still living, was his heir by force of law, and the defendants had never refused to give to the
plaintiff Vicente Ortiz her share of the said properties; and stated that he admitted the facts
alleged in paragraph 2, provided it be understood, however, that the surname of the defendant's
mother was Felin, and not Feliu, and that Miguel Ortiz died in Spain, and not in Vigan; that he
also admitted paragraph 3 of the complaint, with the difference that the said surname should be
Felin, and likewise paragraph 5, except the part thereof relating to the personal property and the
jewelry, since the latter had not yet been divided; that the said jewelry was in the possession of
the plaintiffs and consisted of: one Lozada gold chronometer watch with a chain in the form of a
bridle curb and a watch charm consisting of the engraving of a postage stamp on a stone

mounted in gold and bearing the initials M. O., a pair of cuff buttons made of gold coins, four
small gold buttons, two finger rings, another with the initials M. O., and a gold bracelet; and that
the defendants were willing to deliver to the plaintiffs, in conformity with their petitions, one-half
of the total value in cash, according to appraisement, of the undivided real properties specified in
paragraph 5, which half amounted to P3,948.
In a special defense said counsel alleged that the defendants had never refused to divide the
said property and had in fact several years before solicited the partition of the same; that, from
1886 to 1901, inclusive, there was collected from the property on Calle Escolta the sum of 288
pesos, besides a few other small amounts derived from other sources, which were delivered to
the plaintiffs with other larger amounts, in 1891, and from the property on Calle Washington,
called La Quinta, 990.95 pesos, which proceeds, added together, made a total of 1,278.95 pesos,
saving error or omission; that, between the years abovementioned, Escolta, and that on Calle
Washington, La Quinta, 376.33, which made a total of 1,141.71, saving error or omission; that, in
1897, the work of reconstruction was begun of the house on Calle Escolta, which been destroyed
by an earthquake, which work was not finished until 1903 and required an expenditure on the
part of the defendant Matilde Ortiz, of 5,091.52 pesos; that all the collections made up to August
1, 1905, including the rent from the stores, amounted to only P3,654.15, and the expenses, to
P6,252.32, there being, consequently, a balance of P2,598.17, which divided between the sisters,
the plaintiff and the defendant, would make the latter's share P1,299.08; that, as shown by the
papers kept by the plaintiffs, in the year 1891 the defendant Bartolome presented to the
plaintiffs a statement in settlements of accounts, and delivered to the person duly authorized by
the latter for the purpose, the sum of P2,606.29, which the said settlement showed was owing
his principals, from various sources; that, the defendant Bartolome having been the
administrator of the undivided property claimed by the plaintiffs, the latter were owing the
former legal remuneration of the percentage allowed by law for administration; and that the
defendants were willing to pay the sum of P3,948, one-half of the total value of the said
properties, deducting therefrom the amount found to be owing them by the plaintiffs, and asked
that judgment be rendered in their favor to enable them to recover from the latter that amount,
together with the costs and expenses of the suit.
The defendants, in their counter claim, repeated each and all of the allegations contained in each
of the paragraphs of section 10 of their answer; that the plaintiffs were obliged to pay to the
administrator of the said property the remuneration allowed him by law; that, as the revenues
collected by the defendants amounted to no more than P3,654.15 and the expenditures incurred
by them, to P6,252.32, it followed that the plaintiffs owed the defendants P1,299.08, that is onehalf of the difference between the amount collected from and that extended on the properties,
and asked that judgment be therefore rendered in their behalf to enable them to collect this sum
from the plaintiffs, Ricardo Pardell and Vicenta Ortiz, with legal interest thereon from December
7, 1904, the date when the accounts were rendered, together with the sums to which the
defendant Bartolome was entitled for the administration of the undivided properties in question.
By a written motion of August 21, 1905, counsel for the plaintiffs requested permission to amend
the complaint by inserting immediately after the words "or respective appraisal," fifth line of
paragraph 5, the phrase "in cash in accordance with the assessed value," and likewise further to
amend the same, in paragraph 6 thereof, by substituting the following word in lieu of the petition
for the remedy sought: "By reason of all the foregoing, I beg the court to be pleased to render
the judgment by sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz Felin de
Bartolome, to restore and deliver to the plaintiffs an exact one-half of the total vale of the
undivided properties described in the complaint, such value to be ascertained by the expert
appraisal of two competent persons, one of whom shall be appointed by the plaintiffs and the
other by the defendants, and, in case of disagreement between these two appointees such value
shall be determined by a third expert appraiser appointed by the court, or, in a proper case, by
the price offered at public auction; or, in lieu thereof, it is requested that the court recognize the
plaintiff, Vicenta Ortiz, to be vested with a full and absolute right to an undivided one-half of the
said properties; furthermore, it is prayed that the plaintiffs be awarded an indemnity of P8,000

for losses and damages, and the costs." Notwithstanding the opposition of the defendants, the
said amendment was admitted by the court and counsel for the defendants were allowed to a
period of three days within which to present a new answer. An exception was taken to this ruling.
The proper proceedings were had with reference to the valuation of the properties concerned in
the division sought and incidental issues were raised relative to the partition of some of them
and their award to one or the other of the parties. Due consideration was taken of the averments
and statements of both parties who agreed between themselves, before the court, that any of
them might at any time acquire, at the valuation fixed by the expert judicial appraiser, any of the
properties in question, there being none in existence excluded by the litigants. The court,
therefore, by order of December 28, 1905, ruled that the plaintiffs were entitled to acquire, at the
valuation determined by the said expert appraiser, the building known as La Quinta, the lot on
which it stands and the warehouses and other improvements comprised within the inclosed land,
and the seeds lands situated in the pueblos of Vigan and Santa Lucia; and that the defendants
were likewise entitled to acquire the house on Calle Escolta, the lot on Calle Magallanes, and the
three parcels of land situated in the pueblo of Candon.
After this partition had been made counsel for the defendants, by a writing of March 8, 1906, set
forth: That, having petitioned for the appraisement of the properties in question for the purpose
of their partition, it was not to be understood that he desired from the exception duly entered to
the ruling made in the matter of the amendment to the complaint; that the properties retained
by the defendants were valued at P9,310, and those retained by the plaintiffs, at P2,885, onehalf of which amounts each party had to deliver to the other, as they were pro indiviso
properties; that, therefore, the defendants had to pay the plaintiffs the sum of P3,212.50, after
deducting the amount which the plaintiffs were obliged to deliver to the defendants, as one-half
of the price of the properties retained by the former; that, notwithstanding that the amount of
the counterclaim for the expenses incurred in the reconstruction of the pro indiviso property
should be deducted from the sum which the defendants had to pay the plaintiffs, the former, for
the purpose of bringing the matter of the partition to a close, would deliver to the latter,
immediately upon the signing of the instrument of purchase and sale, the sum of P3,212.50,
which was one-half of the value of the properties alloted to the defendants; such delivery,
however, was not to be understood as a renouncement of the said counterclaim, but only as a
means for the final termination of the pro indiviso status of the property.
The case having been heard, the court on October 5, 1907, rendered judgment holding that the
revenues and the expenses were compensated by the residence enjoyed by the defendant party,
that no losses or damages were either caused or suffered, nor likewise any other expense
besides those aforementioned, and absolved the defendants from the complaint and the
plaintiffs from the counterclaim, with no special finding as to costs. An exception was taken to
this judgment by counsel for the defendants who moved for a new trial on the grounds that the
evidence presented did not warrant the judgment rendered and that the latter was contrary to
law. This motion was denied, exception whereto was taken by said counsel, who filed the proper
bill of exceptions, and the same was approved and forwarded to the clerk of this court, with a
transcript of the evidence.
Both of the litigating sisters assented to a partition by halves of the property left in her will by
their mother at her death; in fact, during the course of this suit, proceedings were had, in
accordance with the agreement made, for the division between them of the said hereditary
property of common ownership, which division was recognized and approved in the findings of
the trial court, as shown by the judgment appealed from.
The issues raised by the parties, aside from said division made during the trial, and which have
been submitted to this court for decision, concern: (1) The indemnity claimed for losses and
damages, which the plaintiffs allege amount to P8,000, in addition to the rents which should
have been derived from the house on Calle Escolta, Vigan; (2) the payment by the plaintiffs to
the defendants of the sum of P1,299.08, demanded by way of counterclaim, together with legal

interest thereon from December 7, 1904; (3) the payment to the husband of the defendant
Matilde Ortiz, of a percentage claimed to be due him as the administrator of the property of
common ownership; (4) the division of certain jewelry in the possession of the plaintiff Vicenta
Ortiz; and (5) the petition that the amendment be held to have been improperly admitted, which
was made by the plaintiffs in their written motion of August 21, 1905, against the opposition of
the defendants, through which admission the latter were obliged to pay the former
P910.50.lawphil.net
Before entering upon an explanation of the propriety or impropriety of the claims made by both
parties, it is indispensable to state that the trial judge, in absolving the defendants from the
complaint, held that they had not caused losses and damages to the plaintiffs, and that the
revenues and the expenses were compensated, in view of the fact that the defendants had been
living for several years in the Calle Escolta house, which was pro indiviso property of joint
ownership.
By this finding absolving the defendants from the complaint, and which was acquiesced in by the
plaintiffs who made no appeal therefrom, the first issue has been decided which was raised by
the plaintiffs, concerning the indemnity for losses and damages, wherein are comprised the rents
which should have been obtained from the upper story of the said house during the time it was
occupied by the defendants, Matilde Ortiz and her husband, Gaspar de Bartolome.
Notwithstanding the acquiescence on the part of the plaintiffs, assenting to the said finding
whereby the defendants were absolved from the complaint, yet, as such absolution is based on
the compensation established in the judgment of the trial court, between the amounts which
each party is entitled to claim from the other, it is imperative to determine whether the
defendant Matilde Ortiz, as coowner of the house on Calle Escolta, was entitled, with her
husband, to reside therein, without paying to her coowner, Vicenta Ortiz, who, during the greater
part of the time, lived with her husband abroad, one-half of the rents which the upper story
would have produced, had it been rented to a stranger.
Article 394 of the Civil Code prescribes:
Each coowner may use the things owned in common, provided he uses them in accordance with
their object and in such manner as not to injure the interests of the community nor prevent the
coowners from utilizing them according to their rights.
Matilde Ortiz and her husband occupied the upper story, designed for use as a dwelling, in the
house of joint ownership; but the record shows no proof that, by so doing, the said Matilde
occasioned any detriment to the interest of the community property, nor that she prevented her
sister Vicenta from utilizing the said upper story according to her rights. It is to be noted that the
stores of the lower floor were rented and accounting of the rents was duly made to the plaintiffs.
Each coowner of realty held pro indiviso exercises his rights over the whole property and may
use and enjoy the same with no other limitation than that he shall not injure the interests of his
coowners, for the reason that, until a division be made, the respective part of each holder can
not be determined and every one of the coowners exercises, together with his other
coparticipants, joint ownership over the pro indiviso property, in addition to his use and
enjoyment of the same.
As the hereditary properties of the joint ownership of the two sisters, Vicenta Ortiz, plaintiff, and
Matilde Ortiz, defendant, were situated in the Province of Ilocos Sur, and were in the care of the
last named, assisted by her husband, while the plaintiff Vicenta with her husband was residing
outside of the said province the greater part of the time between 1885 and 1905, when she left
these Islands for Spain, it is not at all strange that delays and difficulties should have attended
the efforts made to collect the rents and proceeds from the property held in common and to
obtain a partition of the latter, especially during several years when, owing to the insurrection,

the country was in a turmoil; and for this reason, aside from that founded on the right of
coownership of the defendants, who took upon themselves the administration and care of the
properties of joint tenancy for purposes of their preservation and improvement, these latter are
not obliged to pay to the plaintiff Vicenta one-half of the rents which might have been derived
from the upper of the story of the said house on Calle Escolta, and, much less, because one of
the living rooms and the storeroom thereof were used for the storage of some belongings and
effects of common ownership between the litigants. The defendant Matilde, therefore, in
occupying with her husband the upper floor of the said house, did not injure the interests of her
coowner, her sister Vicenta, nor did she prevent the latter from living therein, but merely
exercised a legitimate right pertaining to her as coowner of the property.
Notwithstanding the above statements relative to the joint-ownership rights which entitled the
defendants to live in the upper story of the said house, yet in view of the fact that the record
shows it to have been proved that the defendant Matilde's husband, Gaspar de Bartolome,
occupied for four years a room or a part of the lower floor of the same house on Calle Escolta,
using it as an office for the justice of the peace, a position which he held in the capital of that
province, strict justice, requires that he pay his sister-in-law, the plaintiff, one half of the monthly
rent which the said quarters could have produced, had they been leased to another person. The
amount of such monthly rental is fixed at P16 in accordance with the evidence shown in the
record. This conclusion as to Bartolome's liability results from the fact that, even as the husband
of the defendant coowner of the property, he had no right to occupy and use gratuitously the
said part of the lower floor of the house in question, where he lived with his wife, to the
detriment of the plaintiff Vicenta who did not receive one-half of the rent which those quarters
could and should have produced, had they been occupied by a stranger, in the same manner
that rent was obtained from the rooms on the lower floor that were used as stores. Therefore, the
defendant Bartolome must pay to the plaintiff Vicenta P384, that is, one-half of P768, the total
amount of the rents which should have been obtained during four years from the quarters
occupied as an office by the justice of the peace of Vigan.
With respect to the second question submitted for decision to this court, relative to the payment
of the sum demanded as a counterclaim, it was admitted and proved in the present case that, as
a result of a serious earthquake on August 15, 1897, the said house on Calle Escolta was left in
ruins and uninhabitable, and that, for its reconstruction or repair, the defendants had to expend
the sum of P6,252.32. This expenditure, notwithstanding that it was impugned, during the trial,
by the plaintiffs, was duly proved by the evidence presented by the defendants. Evidence,
unsuccessfully rebutted, was also introduced which proved that the rents produced by all the
rural and urban properties of common ownership amounted, up to August 1, 1905, to the sum of
P3,654.15 which, being applied toward the cost of the repair work on the said house, leaves a
balance of P2,598.17, the amount actually advanced by the defendants, for the rents collected
by them were not sufficient for the termination of all the work undertaken on the said building,
necessary for its complete repair and to replace it in a habitable condition. It is therefore lawful
and just that the plaintiff Vicenta Ortiz, who was willing to sell to her sister Matilde for P1,500,
her share in the house in question, when it was in a ruinous state, should pay the defendants
one-half of the amount expanded in the said repair work, since the building after reconstruction
was worth P9,000, according to expert appraisal. Consequently, the counterclaim made by the
defendants for the payment to them of the sum of P1,299.08, is a proper demand, though from
this sum a reduction must be made of P384, the amount of one-half of the rents which should
have been collected for the use of the quarters occupied by the justice of the peace, the
payment of which is incumbent upon the husband of the defendant Matilde, as aforesaid, and the
balance remaining, P915.08, is the amount which the plaintiff Vicenta must pay to the
defendants.
The defendants claim to be entitled to the collection of legal interest on the amount of the
counterclaim, from December 7, 1904. This contention can not be sustained, inasmuch as, until
this suit is finally decided, it could not be known whether the plaintiffs would or would not be
obliged to pay the sum whatever in reimbursement of expenses incurred by the plaintiffs in the

repair work on the said house on Calle Escolta, whether or not the defendants, in turn, were
entitled to collect any such amount, and, finally, what the net sum would be which the plaintiff's
might have to pay as reimbursement for one-half of the expenditure made by the defendants.
Until final disposal of the case, no such net sum can be determined, nor until then can the debtor
be deemed to be in arrears. In order that there be an obligation to pay legal interest in
connection with a matter at issue between the parties, it must be declared in a judicial decision
from what date the interest will be due on the principal concerned in the suit. This rule has been
established by the decisions of the supreme court of Spain, in reference to articles 1108, 1109,
and 1110 of the Civil Code, reference on April 24, 1867, November 19, 1869, and February 22,
1901.
With regard to the percentage, as remuneration claimed by the husband of the defendant
Matilde for his administration of the property of common ownership, inasmuch as no stipulation
whatever was made in the matter by and between him and his sister-in-law, the said defendant,
the claimant is not entitled to the payment of any remuneration whatsoever. Of his own accord
and as an officious manager, he administered the said pro indiviso property, one-half of which
belonged to his wife who held it in joint tenancy, with his sister-in-law, and the law does not allow
him any compensation as such voluntary administrator. He is merely entitled to a reimbursement
for such actual and necessary expenditures as he may have made on the undivided properties
and an indemnity for the damages he may have suffered while acting in that capacity, since at
all events it was his duty to care for and preserve the said property, half of which belonged to his
wife; and in exchange for the trouble occasioned him by the administration of his sister-in-law's
half of the said property, he with his wife resided in the upper story of the house aforementioned,
without payment of one-half of the rents said quarters might have produced had they been
leased to another person.
With respect to the division of certain jewelry, petitioned for by the defendants and appellants
only in their brief in this appeal, the record of the proceedings in the lower court does not show
that the allegation made by the plaintiff Vicenta is not true, to the effect that the deceased
mother of the litigant sisters disposed of this jewelry during her lifetime, because, had she not
done so, the will made by the said deceased would have been exhibited in which the said jewelry
would have been mentioned, at least it would have been proved that the articles in question
came into the possession of the plaintiff Vicenta without the expressed desire and the consent of
the deceased mother of the said sisters, for the gift of this jewelry was previously assailed in the
courts, without success; therefore, and in view of its inconsiderable value, there is no reason for
holding that the said gift was not made.
As regards the collection of the sum of P910.50, which is the difference between the assessed
value of the undivided real properties and the price of the same as determined by the judicial
expert appraiser, it is shown by the record that the ruling of the trial judge admitting the
amendment to the original complaint, is in accord with the law and principles of justice, for the
reason that any of the coowners of a pro indiviso property, subject to division or sale, is entitled
to petition for its valuation by competent expert appraisers. Such valuation is not prejudicial to
any of the joint owners, but is beneficial to their interests, considering that, as a general rule, the
assessed value of a building or a parcel of realty is less than the actual real value of the property,
and this being appraiser to determine, in conjunction with the one selected by the plaintiffs, the
value of the properties of joint ownership. These two experts took part in the latter proceedings
of the suit until finally, and during the course of the latter, the litigating parties agreed to an
amicable division of the pro indiviso hereditary property, in accordance with the price fixed by
the judicial expert appraiser appointed as a third party, in view of the disagreement between and
nonconformity of the appraisers chosen by the litigants. Therefore it is improper now to claim a
right to the collection of the said sum, the difference between the assessed value and that fixed
by the judicial expert appraiser, for the reason that the increase in price, as determined by this
latter appraisal, redounded to the benefit of both parties.

In consideration of the foregoing, whereby the errors assigned to the lower court have been duly
refuted, it is our opinion that, with a partial reversal of the judgment appealed from, in so far as it
absolves the plaintiffs from the counterclaim presented by the defendants, we should and hereby
do sentence the plaintiffs to the payment of the sum of P915.08, the balance of the sum claimed
by the defendants as a balance of the one-half of the amount which the defendants advanced for
the reconstruction or repair of the Calle Escolta house, after deducting from the total of such sum
claimed by the latter the amount of P384 which Gaspar de Bartolome, the husband of the
defendant Matilde, should have paid as one-half of the rents due for his occupation of the
quarters on the lower floor of the said house as an office for the justice of the peace court of
Vigan; and we further find: (1) That the defendants are not obliged to pay one-half of the rents
which could have been obtained from the upper story of the said house; (2) that the plaintiffs can
not be compelled to pay the legal interest from December 7, 1904, on the sum expanded in the
reconstruction of the aforementioned house, but only the interest fixed by law, at the rate of 6
per cent per annum, from the date of the judgment to be rendered in accordance with this
decision; (3) that the husband of the defendant Matilde Ortiz is not entitled to any remuneration
for the administration of the pro indiviso property belonging to both parties; (4) that, neither is
he entitled to collect from the plaintiffs the sum of P910.50, the difference between the assessed
valuation and the price set by the expert appraisal solicited by the plaintiffs in their amendment
to the complaint; and, (5) that no participation shall be made of jewelry aforementioned now in
the possession of the plaintiff Vicenta Ortiz. The said judgment, as relates to the points appealed,
is affirmed, in so far as its findings agree with those of this decision, and is reversed, in so far as
they do not. No special finding is made regarding the costs of both instances. So ordered.
G.R. No. L-14429

June 30, 1962

RAMON MERCADO, BASILIA MERCADO joined by her husband,

FRANCISCO RONQUILLO, plaintiffs-appellants,
vs.
PIO D. LIWANAG, defendant-appellee.
Patricio D. Senador and Ricardo D. Galano for plaintiffs-appellants.
D. B. Melliza and D. M. Gangoso for defendant-appellee.
MAKALINTAL, J.:
The present appeal, taken by the plaintiff from the decision of the Court of First Instance of Rizal
(Quezon City), is before us on a certification by the Court of Appeals, the questions involved
being purely legal. The case was submitted to the trial court upon the following stipulation of
facts:
1. That the complaint filed by the plaintiffs against the defendant seeks to annul a Deed of Sale
on the ground of fraud and on the provisions of Article 493 of the Civil Code.
2. That on July 14, 1956, in the City of Manila, Philippines, the plaintiff Ramon Mercado and the
defendant Pio D. Liwanag executed a Deed of Sale, photostat copy of which is attached hereto
marked as Annex "A" and forming an integral hereof, covering a divided half and described in
meter and bounds, or an area of 2,196 square meters at P7.00 per square meter or for a total
amount of P15,372.00, of a parcel of land situated at Kangkong, Quezon City, covered Transfer
Certificate of Title No. 20805 of the Register of Deeds for the province of Rizal, now Quezon City:
3. That the said T.C.T. No. 20805 containing an area of 4,392 square meters, is issued in the
name of the plaintiffs Ramon Mercado and Basilia Mercado as co-owners PRO-INDIVISO, and the
sale was without the knowledge and consent of plaintiff Basilia Mercado;

4. That out of the total area of 4,392 square meters, an area consisting of 391 square meters was
expropriated by the National Power Corporation sometime in December 1953 at a price of P10.00
per square meter, Civil Case No. Q-829 (Eminent Domain) of the Court of First Instance of Rizal,
Quezon City Branch, entitled "National Power Corporation, plaintiff, versus Brigido Almodoban, et
als., defendants," but this fact of expropriation came to the knowledge of the defendant Pio D.
Liwanag upon the registration of the Deed of Sale Annex "A". .
5. That pursuant to the Deed of Sale Annex "A" T.C.T. No. 32757 was issued in the name of Pio
Liwanag and Basilia photostat copy of which is hereto attached and marked as Annex "B".
6. That defendant submits the receipt signed by plaintiff Ramon Mercado dated July 14, 1956
photostat copy of which is attached hereto and marked as Annex "C" and promissory note of the
same date for P10,000.00, photostat copy of which is attached hereto and marked is Annex "D"
which are both self-explanatory, but plaintiff Ramon Mercado disclaims payment and receipt of
such check and promissory note, the check being uncashed and is still in the possession of Atty.
Eugenio de Garcia;
7. That plaintiffs and defendant respectfully submit for resolution of this Honorable Court the
issue of whether or not the Deed of Sale Annex "A" court be annulled based in the foregoing
facts in relation to Article 493 of the Civil Code, setting aside all other issues in the pleadings.
Upon the issue thus presented the trial court held that under Article 493 of the Civil Code the
sale in question was valid and so dismissed the complaint, without costs. This ruling is now
assailed as erroneous.
Article 493 provides:
Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining
thereto, and he may therefore alienate, assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights are involved. But the effect of the
alienation 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.
Appellants except to the application of this provision in this case for the reason that in the deed
of sale sought to be annulled the vendor disposed of a divided and determinate half of the land
under co-ownership. The argument, as far as it goes, seems to be tenable. What a co-owner may
dispose of under Article 493 is only his undivided aliquot share, which shall be limited to the
portion which may be allotted to him upon the termination of the co-ownership. He has no right
to divide the property into parts and then convey one part by metes and bounds. Lopez vs.
Ilustre, 5 Phil. 567; Gonzales, et al. vs. Itchon, et al., 47 O.G. 6290; Manresa, Vol. 3, 7th ed. p.
630.
The pertinent recitals in the disputed deed of sale read:
I hereby sell, transfer and convey absolutely and irrevocably unto said Pio D. Liwanag, his heirs,
successors, and assigns my rights, title and interest on my chosen portion of the above
described property which consist of one-half of aforesaid ownership bounded on the West by
Pacifico Gahudo, on the North by Hacienda de Piedad and on the South by Circumferential Road,
consisting of 50 meters more or less frontal length along Circumferential Road, and with a total
area of 2,196 square meters as indicated in Co-owners Transfer Certificate of Title No. 20805.
Nevertheless, upon registration of the sale and cancellation of transfer certificate of title No.
20805 in the names of the previous co-owners, the new transfer certificate that was issued (No.
32757) did not reproduce the description in the instrument but carried the names of appellee Pio
D. Liwanag and Basilia Mercado as "co-owners pro-indiviso." There is no suggestion by any of the
parties that this new certificate of title is invalid, irregular or inaccurate. There is no prayer that it

be canceled. As far as Basilia Mercado is concerned she retains in all their integrity her rights as
co-owner which she had before the sale, and consequently, she has no cause to complain. Much
less has Ramon Mercado, for it was he who was responsible for whatever indicia there may be in
the deed of sale that a determinate portion of the property was being sold, as shown by the
second paragraph thereof, quoted without contradiction in appellee's brief as follows:
That the aforesaid Transfer Certificate of Title was originally in my name, but was split into two
equal parts by virtue of my desire to donate to my sister-in-law Juana Gregorio an equal half
thereof with the understanding that I as donor would have the absolute power to choose from the
property owned in common that part which I would like to segregate for myself or my heir and
assigns.
And of course appellee himself not only does not challenge the new certificate of title, wherein
he appears as co-owner of an undivided one-half share, but precisely relies upon it for his
defense in this action.
The title is the final and conclusive repository of the rights of the new co-owners. The question of
whether or not the deed of sale should be annulled must be considered in conjunction with the
title issued pursuant thereto. Since, according to this title, what appellee acquired by virtue of
the sale is only an undivided half-share of the property, which under the law the vendor Ramon
Mercado had the absolute right to dispose of, the trial court committed no error in dismissing the
action. The end-result of the transaction is in accordance with Article 493 of the Civil
Code.1wph1.t
The other point raised by appellants refers to the statement in the dispositive portion of the
decision appealed from that "the stipulation with regards to the deed of sale based on the ground
of fraud is insufficient for all purposes and besides, no proof showing the allegation of such fraud
exists in the accord." It is contended that the trial court erred in making such statement, the
same being contrary to the stipulation in which the parties expressly eliminated the issue of
fraud. From the entire context of the decision, however, it can be gathered that the case was not
decided on the basis of the said issue. In any event, even if the court did err in considering the
question of fraud in spite of the stipulation, the error is not a prejudicial one. As far as the
dismissal of the actions concerned, it makes no difference whether fraud has not been proven or
fraud has been abandoned as an issue by express agreement.
WHEREFORE, the decision appealed from is affirmed, with costs against appellants in this
instance.