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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


P6,000.00
Escolta Street, Vigan, and valued at
2. A house of mixed material, with the lot on which it stands, at No. 88
1,500.00
Washington Street, Vigan; valued at
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

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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 one-half 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

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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 one-half
of the difference between the amount collected from and that extended on the properties, and asked
that judgment be therefore rendered in their behalf to enable them to collect this sum from the
plaintiffs, Ricardo Pardell and Vicenta Ortiz, with 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.

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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, one-half 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.

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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.

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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

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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.

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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

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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-30994 September 30, 1982


OLIMPIA BASA, ARSENIO BASA, NEMESIO BASA, RICARDO BASA, ATANACIA
BASA, JULIANA BASA, and FELICIANO BASA, petitioners,
vs.
HON. ANDRES C. AGUILAR, Judge Presiding Branch II of the Court of First Instance of
Pampanga, GENARO PUYAT, BRIGIDA MESINA, PRIMO TIONGSON, and
MACARIA PUYAT, respondents.

VASQUEZ, J:
This is an appeal by certiorari from the decision of the Court of First Instance of Pampanga in
Civil Case No. 2513, entitled "Olimpia Basa, et al., Plaintiffs, versus Genaro Puyat, et al.,
Defendants. "
The seven (7) petitioners are owners co-pro-indiviso of an undivided ONE-HALF (1/2) share of
a parcel of land located in Barrio San Mateo, Arayat, Pampanga, with an area of 32,383 square
meters, more or less. Private respondents Genaro Puyat and Brigida Mesina were the owners of
the other undivided half of the same parcel of land.
On March 6, 1964, Genaro Puyat, with the marital consent of Brigida Mesina, sold his ONE-
HALF (1/2) share of the parcel of land in question for the price of ONE THOUSAND
(P1,000.00) PESOS in favor of private respondents Primo Tiongson and Macaria Puyat. Primo
Tiongson is a son-in-law of Genaro Puyat who is married to Macaria Puyat, a daughter of
Genaro Puyat.
Seven (7) days later, on or March 13, 1964, the herein petitioners filed Civil Case No. 2513,
praying that they be allowed to exercise the right of redemption under Article 1620 of the Civil
Code, for which purpose they deposited with the court the sum of ONE THOUSAND PESOS
(P1,000.00) as redemption money.
The trial court rendered the judgment dismissing the case. It ruled that the petitioners are not
entitled to exercise the right of redemption under Article 1620 of the Civil Code, reasoning out
as follows:
There is nothing repugnant, from the point of view of public policy, for parents to sell to their
children. It could not, therefore, have been intended by the framers of the Civil Code of the

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Philippines to include within the purview of the term 'third person' the children of a co-owner of
a thing. For after all, these children have an inchoate right to succession to the same property. To
hold otherwise, is to stretch the meaning of the law into ludicrious (sic) situations.
The logic of His Honor, the trial judge, carries more sentiment than law. It disregards the express
letter of the law invoked by the petitioners and ignores the pelosophy of the same. Article 1620
of the Civil Code reads:
ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all
the other co-owners or of any of them, are sold to a third person. If the price of the alienation is
grossly excessive, the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so in
proportion to the share they may respectively have in the thing owned in common,
Legal redemption is in the nature of a privilege created by law partly for reasons of public policy
and partly for the benefit and convenience of the redemptioner, to afford him a way out of what
might be a disagreeable or inconvenient association into which he has been thrust. (10 Manresa,
4th Ed., 317.) It is intended to minimized co-ownership. The law grants a co-owner the exercise
of the said right of redemption when the shares of the of her owners are sold to "a third person."
A third person, within the meaning of this Article, is anyone who is not a co-owner. (Sentencia
of February 7, 1944 as cited in Tolentino, Comments on the Civil Code, Vol. V, p. 160.)
Private respondent Primo Tiongson is definitely not a co-owner of the land in question. He is not
even an heir of private respondents Genaro Puyat and Brigida Mesina, nor included in the
"family relations" of the said spouses as defined in Article 217 of the Civil Code. The
circumstance that he is married to Macaria Puyat, a daughter of Genaro Puyat and Brigida
Mesina, is of no moment. The conveyance to the Tiongson spouses was by onerous title, made
during the lifetime of Genaro Puyat and Brigida Mesina. The alleged inchoate right of succession
from Genaro Puyat and Brigida Mesina, which pertained only to Macaria Puyat. is thus out of the
question. To deny to the petitioners the right of redemption recognized in Article 1620 of the
Civil Code is to defeat the purpose of minimizing co-ownership and to contravene the public
policy in this regard. Moreover, it would result in disallowing the petitioners a way out of what,
in the words of Manresa, " might be a disagreeable or inconvenient association into which they
have been thrust."
WHEREFORE, the judgment appealed from is hereby REVERSED, and in lieu thereof, a new
one is rendered declaring the petitioners to be entitled to exercise the right of legal redemption
under Article 1620 of the Civil Code with respect to the ONE-HALF (1/2) share sold by private
respondent Genaro Puyat and Brigida Mesina in favor of their corespondents Primo Tiongson
and Macaria Puyat. The private respondents shall pay the costs.
SO ORDERED.

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G.R. No. 78178 April 15, 1988
DELIA BAILON-CASILAO, LUZ PAULINO-ANG, EMMA PAULINO-YBANEZ,
NILDA PAULINO-TOLENTINO, and SABINA BAILON, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and CELESTINO AFABLE, respondents.
Veronico E. Rubio for petitioners.
Mario G. Fortes for private-respondent.

CORTES, J.:
The fate of petitioners' claim over a parcel of land rests ultimately on a determination of whether
or not said petitioners are chargeable with such laches as may effectively bar their present action.
The petitioners herein filed a case for recovery of property and damages with notice of lis
pendens on March 13, 1981 against the defendant and herein private respondent, Celestino
Afable. The parcel of land involved in this case, with an area of 48,849 square meters, is covered
by Original Certificate of Title No. 1771 issued on June 12, 1931, in the names of Rosalia,
Gaudencio, Sabina Bernabe, Nenita and Delia, all surnamed Bailon, as co-owners, each with a
1/6 share. Gaudencio and Nenita are now dead, the latter being represented in this case by her
children. Luz, Emma and Nilda. Bernabe went to China in 1931 and had not been heard from
since then [Decision of the Court of Appeals, Rollo, p. 39].
It appears that on August 23, 1948, Rosalia Bailon and Gaudencio Bailon sold a portion of the
said land consisting of 16,283 square meters to Donato Delgado. On May 13, 1949, Rosalia
Bailon alone sold the remainder of the land consisting of 32,566 square meters to Ponciana V.
Aresgado de Lanuza. On the same date, Lanuza acquired from Delgado the 16,283 square meters
of land which the latter had earlier acquired from Rosalia and Gaudencio. On December 3, 1975,
John Lanuza, acting under a special power of attorney given by his wife, Ponciana V. Aresgado
de Lanuza, sold the two parcels of land to Celestino Afable, Sr.
In all these transfers, it was stated in the deeds of sale that the land was not registered under the
provisions of Act No. 496 when the fact is that it is. It appears that said land had been
successively declared for taxation first, in the name of Ciriaca Dellamas, mother of the registered
co-owners, then in the name of Rosalia Bailon in 1924, then in that of Donato Delgado in 1936,
then in Ponciana de Lanuza's name in 1962 and finally in the name of Celestino Afable, Sr. in
1983.
In his answer to the complaint filed by the herein petitioners, Afable claimed that he had
acquired the land in question through prescription and contended that the petitioners were guilty
of laches.He later filed a third-party complaint against Rosalia Bailon for damages allegedly
suffered as a result of the sale to him of the land.
After trial, the lower court rendered a decision:

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1. Finding and declaring Celestino Afable, a co-owner of the land described in paragraph III of
the complaint having validly bought the two-sixth (2/6) respective undivided shares of Rosalia
Bailon and Gaudencio Bailon;
2. Finding and declaring the following as pro-indiviso co-owners, having 1/6 share each, of the
property described in paragraph III of the complaint, to wit:
a. Sabina Bailon
b. Bernabe Bailon
c. Heirs of Nenita Bailon-Paulino
d. Delia Bailon-Casilao;
3. Ordering the segregation of the undivided interests in the property in order to terminate co-
ownership to be conducted by any Geodetic Engineer selected by the parties to delineate the
specific part of each of the co-owners.
4. Ordering the defendant to restore the possession of the plaintiffs respective shares as well as
all attributes of absolute dominion;
5. Ordering the defendant to pay the following:
a. P5,000.00 as damages;
b. P2,000.00 as attorney's fees and;
c. to pay the costs.
[Decision of the Trial Court, Rollo, p. 37-38].
On appeal, the respondent Court of Appeals affirmed the decision of the lower court insofar as it
held that prescription does not he against plaintiffs-appellees because they are co-owners of the
original vendors. However, the appellate court declared that, although registered property cannot
be lost by prescription, nevertheless, an action to recover it may be barred by laches, citing the
ruling in Mejia de Lucaz v. Gamponia [100 Phil. 277 (1956)]. Accordingly, it held the petitioners
guilty of laches and dismissed their complaint. Hence, this petition for review on certiorari of the
decision of the Court of Appeals.
The principal issue to be resolved in this case concerns the applicability of the equitable doctrine
of laches. Initially though, a determination of the effect of a sale by one or more co-owners of the
entire property held in common without the consent of all the co-owners and of the appropriate
remedy of the aggrieved co-owners is required.
The rights of a co-owner of a certain property are clearly specified in Article 493 of the Civil
Code.Thus:
Art. 493. Each co-owner shall have the full ownership of his part and of the acts and benefits
pertaining thereto, and he may therefore alienate assign or mortgage it and even substitute

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another person in its enjoyment, except when personal rights are involved. But the effect of the
alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co-ownership. [Emphasis supplied.]
As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the
sale will affect only his own share but not those of the other co-owners who did not consent to
the sale [Punsalan v. Boon Liat 44 Phil. 320 (1923)]. This is because under the aforementioned
codal provision, the sale or other disposition affects only his undivided share and the transferee
gets only what would correspond to his grantor in the partition of the thing owned in
common.[Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of 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 sale to private respondent Celestino Afable, the
said Afable thereby became a co-owner of the disputed parcel of land as correctly held by the
lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof
[Mainit v. Bandoy, 14 Phil. 730 (1910)].
From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided
share, a sale of the entire property by one co-owner without the consent of the other co-owners is
not null and void. However, only the rights of the co-owner-seller are transferred, thereby
making the buyer a co-owner of the property.
The proper action in cases like this is not for the nullification of the sale or for the recovery of
possession of the thing owned in common from the third person who substituted the co-owner or
co-owners who alienated their shares, but the DIVISION of the common property as if it
continued to remain in the possession of the co-owners who possessed and administered
it [Mainit v. Bandoy, supra.]
Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent
were not secured in a sale of the entire property as well as in a sale merely of the undivided
shares of some of the co-owners is an action. for PARTITION under Rule 69 of the Revised
Rules of Court. Neither recovery of possession nor restitution can be granted since the defendant
buyers are legitimate proprietors and possessors in joint ownership of the common property
claimed [Ramirez v. Bautista, supra].
As to the action for petition, neither prescription nor laches can be invoked.
In the light of the attendant circumstances, defendant-appellee's defense of prescription is a vain
proposition. Pursuant to Article 494 of the Civil Code, '(n)o co-owner shall be obliged to remain
in the co-ownership. Such co-owner may demand at anytime the partition of the thing owned in
common, insofar as his share is concerned.' [Emphasis supplied.] In Budiong v. Bondoc [G.R.
No. L-27702, September 9, 1977, 79 SCRA 241, this Court has interpreted said provision of law
to mean that the action for partition is imprescriptible or cannot be barred by prescription. For
Article 494 of the Civil Code explicitly declares: "No prescription shall lie in favor of a co-
owner or co- heir so long as he expressly or impliedly recognizes the co-ownership."

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Furthermore, the disputed parcel of land being registered under the Torrens System, the express
provision of Act No. 496 that '(n)o title to registered land in derogation to that of the registered
owner shall be acquired by prescription or adverse possession' is squarely applicable.
Consequently, prescription will not lie in favor of Afable as against the petitioners who remain
the registered owners of the disputed parcel of land.
It is argued however, that as to the petitioners Emma, Luz and Nelda who are not the registered
co-owners but merely represented their deceased mother, the late Nenita Bailon, prescription
lies.Respondents bolster their argument by citing a decision of this Court in Pasion v.
Pasion [G.R.No. L-15757, May 31, 1961, 2 SCRA 486, 489] holding that "the imprescriptibility
of a Torrens title can only be invoked by the person in whose name the title is registered" and
that 'one who is not the registered owner of a parcel of land cannot invoke imprescriptibility of
action to claim the same.'
Reliance on the aforesaid Pasion case is futile. The ruling therein applies only against transferees
other than direct issues or heirs or to complete strangers. The rational is clear:
If prescription is unavailing against the registered owner, it must be equally unavailing against
the latter's hereditary successors, because they merely step into the shoes of the decedent by
operation of law (New Civil Code, Article 777; Old Civil Code, Article 657), the title or right
undergoing no change by its transmission mortis causa [Atus, et al., v. Nunez, et al., 97 Phil.
762, 764].
The latest pronouncement of this Court in Umbay v. Alecha [G. R. No. 67284, March 18, 1985,
135 SCRA 427, 429], which was promulgated subsequent to the Pasion case reiterated
the Atus doctrine. Thus:
Prescription is unavailing not only against the registered owner but also against his hereditary
successors, because they merely step into the shoes of the decedent by operation of law and are
merely the continuation of the personality of their predecessor-in-interest. [Barcelona v.
Barcelona, 100 Phil. 251, 257].
Laches is likewise unavailing as a shield against the action of herein petitioners.
Well-stated in this jurisdiction are the four basic elements of laches, namely: (1) conduct on the
part of the defendant or of one under whom he claims, giving rise to the situation of which
complaint is made and for which the complainant seeks a remedy; (2) delay in asserting the
corporations complainant's rights, the complainant having had knowledge or notice of the
defendant's conduct and having been afforded an opportunity to institute suit; (3) lack of
knowledge or notice on the part of the defendant that the complainant would assert the right on
which he bases his suit; and, (4) injury or prejudice to the defendant in the event relief is
accorded to the complainant, or the suit is not held to be barred [Go China Gun, et al. v. Co Cho
et al., 96 Phil. 622 (1955)].
While the first and last elements are present in this case, the second and third elements are
missing.

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The second element speaks of delay in asserting the complainant's rights. However, the mere fact
of delay is insufficient to constitute, laches. It is required that (1) complainant must have
had knowledge of the conduct of defendant or of one under whom he claims and (2) he must have
been afforded an opportunity to institute suit. This court has pointed out that laches is not
concerned with the mere lapse of time. Thus:
Laches has been defined as the failure or neglect, for an unreasonable length of time to do that
which by exercising due diligence could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it. Tijam, et al., v. Sibonghanoy,
G.R. No. L-21450, April 25, 1968, 23 SCRA 29,35; Tendo v. Zamacoma, G.R. No. L-63048,
August 7, 1985, 138 SCRA 78, 90].
The doctrine of "laches" or of "stale demands" is based upon grounds of public policy which
requires for the peace of society, the discouragement of stale claims and unlike the statute of
limitations, is not a mere question of time but is principally a question of inequity or
unfairness of permitting a right or claim to be enforced or asserted," [Tijam v.
Sibonghanoy, supra, p. 35]. [Emphasis supplied.]
It must be noted that while there was delay in asserting petitioners' rights, such delay was not
attended with any knowledge of the sale nor with any opportunity to bring suit. In the first place,
petitioners had no notice of the sale made by their eldest sister. It is undisputed that the petitioner
co-owners had entrusted the care and management of the parcel of land to Rosalia Bailon who
was the oldest among them [TSN, July 27, 1983, p. 14]. In fact, Nicanor Lee, a son of Rosalia,
who was presented as a witness by the plaintiffs-petitioners, testified on cross-examination that
his mother was only the administrator of the land as she is the eldest and her brothers and sisters
were away [TSN, October 5, 1983, p. 15]. Indeed, when Delia Bailon-Casilao left Sorsogon in
1942 after she got married, it was only in 1983 that she returned. Sabina on the other hand, is
said to be living in Zamboanga while Bernabe who left for China in 1931 has not been heard
from since then. Consequently, when Rosalia, from whom the private respondent derived his
title, made the disputed sales covering the entire property, the herein petitioners were unaware
thereof.
In the second place, they were not afforded an opportunity to bring suit inasmuch as until 1981,
they were kept in the dark about the transactions entered into by their sister. It was only when
Delia Bailon-Casilao returned to Sorsogon in 1981 that she found out about the sales and
immediately, she and her co-petitioners filed the present action for recovery of property. The
appellate court thus erred in holding that 'the petitioners did nothing to show interest in the land."
For the administration of the parcel of land was entrusted to the oldest co-owner who was then in
possession thereof precisely because the other co-owners cannot attend to such a task as they
reside outside of Sorsogon where the land is situated. Her co-owners also allowed her to
appropriate the entire produce for herself because it was not even enough for her daily
consumption [TSN, October 5, 1983, pp. 17-18]. And since petitioner was the one receiving the
produce, it is but natural that she was the one to take charge of paying the real estate taxes. Now,
if knowledge of the sale by Rosalia was conveyed to the petitioners only later, they cannot be

IPRA EXCLUSIVE COMPILATION


faulted for the acts of their co-owner who failed to live up to the trust and confidence expected of
her. In view of the lack of knowledge by the petitioners of the conduct of Rosalia in selling the
land without their consent in 1975 and the absence of any opportunity to institute the proper
action until 1981, laches may not be asserted against the petitioners.
The third element of laches is likewise absent. There was no lack of knowledge or notice on the
part of the defendant that the complainants would assert the right on which they base the suit. On
the contrary, private respondent is guilty of bad faith in purchasing the property as he knew that
the property was co-owned by six persons and yet, there were only two signatories to the deeds
of sale and no special authorization to self was granted to the two sellers by the other co-owners.
Even as the land here was misrepresented in the deeds of sale as "unregistered," the truth was
that Afable already had notice that the land was titled in the name of six persons by virtue of the
Certificate of Title which was already in his possession even before the sale. Such fact is
apparent from his testimony before the court a quo:
COURT:
Q: From whom did you get the certificate of Title?
A: When it was mortgaged by Ponciana Aresgado.
Q: It was mortgaged to you before you bought it?
A: Yes, Your Honor. (TSN, March 5, 1984, p. 12) When cross-examined, he stated:
Q: Mr. Witness, the original Certificate of Title was given to you in the year 1974, was it not?
A: 1975.
Q: In 1975, you already discovered that the title was in the name of several persons, is it not?
A: Yes, sir.
Q: When you discovered that it is in the name of several persons, you filed a case in court for
authority to cancel the title to be transferred in your name, is it not?
A: Yes, sir.
Q: And that was denied by the Court of First Instance of Sorsogon because there was ordinary
one signatory to the deed of sale instead of six, was it not?
A: Not one but two signatories.
[Decision of the Regional Trial Court of Sorsogon, Rollo, p. 35]
Such actual knowledge of the existence of other co-owners in whose names the lot subject of the
sale was registered should have prompted a searching inquiry by Afable considering the well-
known rule in this jurisdiction that:

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... a person dealing with a registered land has a right to rely upon the face of the Torrens
certificate of title and to dispense with the need of inquiring further, except when the party
concerned has actual knowledge of facts and circumstances that would impel a reasonably
cautions man to make such inquiry. [Gonzales v. IAC and Rural Bank of Pavia, Inc., G.R. No.
69622, January 29, 1988).
Moreover, the undisputed fact is that petitioners are relatives of his wife. As a genuine gesture of
good faith, he should have contacted the petitioners who were still listed as co-owners in the
certificate of title which was already in his possession even before the sale. In failing to exercise
even a minimum degree of ordinary prudence required by the situation, he is deemed to have
bought the lot at his own risk. Hence any prejudice or injury that may be occasioned to him by
such sale must be borne by him.
Indeed, aware of the flaws impairing his title, Afable went to the herein petitioner Delia Bailon-
Casilao, asking the latter to sign a document obviously to cure the flaw [TSN, July 27, 1983,
p.6]. Later, he even filed a petition in the Court of First Instance to register the title in his name
which was denied as aforesaid.
It may be gleaned from the foregoing examination of the facts that Celestino Afable is not a
buyer in good faith. Laches being an equitable defense, he who invokes it must come to the court
with clean hands.
WHEREFORE, the petition for certiorari is hereby GRANTED, the challenged decision of the
Court of Appeals is SET ASIDE, and the decision of the trial court is REINSTATED.
SO ORDERED.

G.R. No. L-29727 December 14, 1988


PEDRO OLIVERAS, TEODORA GASPAR, MELECIO OLIVERAS and ANICETA
MINOR, plaintiffs-appellees,
vs.
CANDIDO LOPEZ, SEVERO LOPEZ, HIPOLITO LOPEZ, EUGENIA LOPEZ,
PRIMITIVO GASPAR, CORAZON LOPEZ, ALEJANDRO CACAYURIN, FAUSTINA
BOTUYAN, MODESTO SALAZAR, ADORACION BOTUYAN, CLAUDIO GANOTICE
and ENONG BOTUYAN, defendants-appellants.
Venancio B. Fernando for defendants-appellants.

FERNAN, C.J.:

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This case exemplifies the Filipino custom of keeping inherited property in a prolonged juridical
condition of co-owner ship.
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,
1931, Lorenzo Lopez died, 2 leaving said property to his wife, Tomasa Ramos and six (6)
children. From that time on, the heirs of Lorenzo Lopez did not initiate any moves to legally
partition the property.
More than twenty-one years later, or on February 11, 1953, Tomasa Ramos and her eldest son,
Candido Lopez, executed a deed of absolute sale of the "eastern undivided four thousand two
hundred and fifty seven-square meters (4,257) more or less, of the undivided portion of (their)
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
On the same day, Tomasa and Candido executed another deed of absolute sale of the "undivided"
four thousand two hundred and fifty-seven (4,257) square meters of the "eastern part" of Lot
4685 in favor of the spouses Pedro Oliveras and Teodora Gaspar, also in consideration of
P1,000. 4 Each of the said documents bear the thumbmark of Tomasa and the signature of
Candido.
In his affidavit also executed on February 11, 1953, Candido stated that a month prior to the
execution of the deed of sale in favor of Melecio Oliveras, he offered his: "undivided portion" of
Lot 4685 to his "adjacent owners" but none of them was "in a position to purchase" said
property. 5
Since the execution of the two deeds of absolute sale, the vendees, brothers Melecio and Pedro,
had been paying the real property taxes for their respectively purchased properties. 6 They also
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
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
wives filed a complaint for partition and damages 9 in the Court of First Instance of
Pangasinan. 10
The Oliverases stated in their complaint that possession of the disputed properties was delivered
to them with the knowledge and consent of the defendants; that they had been paying the real
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
claims; and that their desire to segregate the portions of Lot 4685 sold to them was frustrated by

IPRA EXCLUSIVE COMPILATION


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.
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
the court order the defendants to partition Lot 4685 and to allow them to survey and segregate
the portions they had purchased. They also demanded payment of P800.00 as attorney's fees and
cost of the suit.
In their answer, the defendants alleged that no sale ever transpired as the alleged vendors could
not have sold specific portions of the property; that plaintiffs' possession and occupation of
specific portions of the properties being illegal, they could not ripen into ownership; and that
they were not 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 contended that the deeds of sale were null and void and hence,
unenforceable against them; that the complaint did not state a cause of action and that the cause
or causes of action if any, had prescribed.
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
produce in palay and peanuts in the amount of P1,600.00 annually, and that the complaint was
filed to harass them. They prayed for the dismissal of the complaint and the payment of
P1,600.00 per year from 1953 until plaintiffs shall have vacated the premises and P1,000.00 for
attorney's fees.
Plaintiffs filed an answer to defendants' counterclaim, denying all the allegations therein and
stating that defendants never demanded that plaintiffs vacate the portions of Lot 4685 they had
bought.
The lower court explored the possibility of an amicable settlement between the parties without
success. Hence, it set the case for trial and thereafter, it rendered a
decision 11 declaring valid the deeds of absolute sale 12 and ordering the defendants to allow the
segregation of the sold portions of Lot 4685 by a licensed surveyor in order that the plaintiffs
could obtain their respective certificates of title over their portions of said lot.
In resolving the case, the lower court passed upon the issue of whether the two deeds of absolute
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 any opposition from the defendants until the filing of the complaint, their payment of
taxes thereon and their having benefited from the produce of the land. The court ruled that the
defendants' testimonial evidence that the deeds in question were merely mortgage documents
cannot overcome the evidentiary value of the public instruments presented by the plaintiffs.
On the issue of whether the two deeds of absolute sale were null and void considering that the
land subject thereof had not yet been partitioned, the court observed that the total area of 8,514
square meters sold to plaintiffs by Candido was less than his share should Lot 4685 with an area

IPRA EXCLUSIVE COMPILATION


of 69,687 square meters be divided among the six children of Lorenzo Lopez and their mother.
In this connection, the lower court also found that during his lifetime, and before Candido got
married, Lorenzo Lopez had divided Lot 4685 among his children who then took possession of
their respective shares. *
The defendants appealed said decision to this Court contending that the lower court erred in
declaring the two deeds of absolute sale as valid, in ordering the segregation of the sold portions
of Lot 4685 to enable the plaintiffs to obtain their respective certificates of title, and in not
considering their defense of prescription.
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 designated portions of an undivided, co-owned property.
In a long line of decisions, this Court has held that before the partition of a land or thing held in
common, no individual co-owner can claim title to any definite portion thereof. All that the co-
owner has is an Ideal or abstract quota or proportionate share in the entire land or thing. 14
However, the duration of the juridical condition of co-ownership is not limitless. Under Article
494 and 1083 of the Civil Code, co-ownership of an estate should not exceed the period of
twenty (20) years. And, under the former article, any agreement to keep a thing or property
undivided should 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
Although the Civil Code is silent as to the effect of the in division of a property for more than
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
rendered meaningless.
In the instant case, the heirs of Lorenzo Lopez maintained the co-ownership for more than
twenty years. We hold that when Candido and his mother (who died before the filing of the
complaint for partition) sold definite portions of Lot 4685, they validly exercised dominion over
them because, by operation of law, the co-ownership had ceased. The filing of the complaint for
partition by the 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 otherwise accomplished act of terminating the co-ownership.
The action for partition has not prescribed. Although the complaint was filed thirteen years from
the execution of the deeds of sale and hence, as contended by the defendants-appellants,
prescription might have barred its filing under the general provision of Article 1144 (a) of the
Civil Code, Article 494 specifically mandates that each
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

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their favor and as subrogees of Candido Lopez, the Oliverases' action for partition was timely
and properly filed. 17
We cannot write finis to this decision without commenting on the compliance with the resolution
of September 1, 1986 of counsel for defendants-appellants. In said resolution, the court required
the parties to move in the premises "considering the length of time that this case has remained
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,
1987, said counsel informed the Court that he had contacted the defendants-appellants whom he
advised "to move in the premises which is the land in question and to maintain the status quo
with respect to their actual possession thereon" and that he had left a copy of said resolution with
the defendants-appellants" for their guidance in the compliance of their obligations (sic) as
specified in said
resolution." 19
Obviously, said counsel interpreted literally the Court's directive "to move in the premises." For
the 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: the parties are obliged to inform the Court of developments pertinent to the case which
may be of help to the Court in its immediate disposition.
WHEREFORE, the decision of the lower court insofar as it declares the validity of the two deeds
of sale and directs the partition of Lot 4685, is AFFIRMED. The lower court is hereby ordered to
facilitate with dispatch the preparation of a project of partition which it should thereafter
approve. This decision is immediately executory. No costs.
SO ORDERED.
Gutierrez, Jr., Bidin and Cortes, JJ., concur.
Feliciano, J., concur in the result.

G.R. No. L-40064 December 4, 1934


RESURRECCION TAGARAO, BUENAVENTURA TAGARAO and SERAFIN
TAGARAO, plaintiffs-appellees,
vs.
MARCOS GARCIA, ET AL., defendants.
MARGARITA GARCIA, ROSARIO GARCIA, DOLORES RUFINO, and ELUETERIO
RUFINO, appellants.

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Oceeño and Alba for appellants M. Garcia, R. Garcia and D. Rufino.
Vicente T. Remitio for appellant E. Rufino.
Rafael P. Guerrero for appellees.

DIAZ, J.:
This action was brought by the brothers and sisters Resurreccion Tagarao, Buenaventura
Tagarao, and Serafin Tagarao, children of the deceased Merced Garcia, daughter of the deceased
Buenaventura Garcia who was a brother of the defendant Marcos Garcia, against the latter and
the other defendants named Paula Tabifranca, Margarita Garcia, Rosario Garcia, Dolores Rufino
and Eleuterio Rufino, praying that judgment be rendered against the defendants ordering them to
deliver to the plaintiffs, after executing the necessary deeds of transfer, one-fourth of the land
known as lot No. 510 of cadastral case No. 11 of the municipality of Isabela, Occidental Negros
(G. L. R. O. Cad. Record No. 100), which was formerly covered, first by original certificate of
title No. 10009 (Exhibit M), later by transfer certificate of title No. 3001 (Exhibit 3), and at
present by transfer certificate of title No. 8782 (Exhibit 7), all of the office of the register of
deeds of said Province of Occidental Negros.
In their amended complaint of July 29, 1931, which was reamended on March 8, 1932, said
plaintiffs prayed that should the defendants fail to deliver to them the required portion of the land
in question, the latter be ordered to pay them the value thereof based on the assessed value of the
whole property, and that they furthermore be indemnified for the value of 1,407 cavans of palay
at the rate of P4 a cavan, alleging that said 1,407 cavans represented their share in the products of
said land from the time the defendants took exclusive possession thereof.
Before the plaintiffs filed their amended complaint on the date above stated, the defendants
Marcos Garcia, Paula Tabifranca, Margarita Garcia, Rosario Garcia and Dolores Rufino filed a
demurrer to said plaintiffs' original complaint, alleging that it did not state sufficient facts to
constitute a cause of action and was furthermore ambiguous, unintelligible and uncertain. The
lower court sustained said demurrer and ordered the plaintiffs to amend their complaint within
the reglementary period.
When the plaintiffs amended their complaint in the sense expressed in their pleading of February
13, 1929, said five defendants again filed another demurrer alleging this time that the lower court
lack jurisdiction to try the case by reason of the subject matter involved and the lower court
overruled said demurrer ordering them to answer within the reglementary period. In compliance
therewith, the defendants on October 28, 1929, filed their answer wherein the first two
defendants, or the spouses Marcos Garcia and Paula Tabifranca, alleged that although they
formerly were the absolute and exclusive owners of the land in question they already ceased to
be so at that time, having sold the half belonging to Paula Tabifranca to the defendants Margarita
Garcia, Rosario Garcia and Dolores Rufino, and the other half belonging to Marcos Garcia to
Eleuterio Rufino. On June 9, 1931, said two defendants filed a petition of even date stating that

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they had no more interest in the case, having sold their respective participations to the two
Garcias and two Rufinos and praying in succession that they be absolved from the complaint.
A few days later, or on July 15, 1931, said two defendants Marcos Garcia and Paula Tabifranca
filed a motion to include Eleuterio Rufino among the defendants and on the following day the
lower court, granting the motion, ordered the inclusion of Eleuterio Rufino in the case as one of
the defendants. For this purpose the plaintiffs filed their said amended complaint of July 29,
1931, which they reamended with a slight addition on March 8, 1932.
The defendants Marcos Garcia and Paula Tabifranca did not answer the plaintiffs' last amended
complaint but Margarita Garcia, Rosario Garcia and Dolores Rufino jointly entered a general
denial of all the allegations contained therein, alleging as a special defense (1) that they are the
exclusive owners of one-half of the land in question; (2) that the plaintiffs have already lost their
right of action because such right, if they ever had any, has already prescribed; and (3) said
plaintiffs cannot invoke the decision rendered in civil case No. 4091 because with respect to
them it does not constitute res judicata.
The defendant Eleuterio Rufino, answering said plaintiffs' last amended complaint, stated in his
pleading of November 19, 1931, that he denied each and every allegation contained therein,
alleging as a special defense that one half of the land in question was sold by Marcos Garcia and
purchased by him in good faith, paying the corresponding price therefor.
After due trial the lower court rendered judgment ordering the defendants to deliver to the
plaintiffs one fourth of the land in question after executing the necessary deeds of transfer in
favor of said plaintiffs or, in lieu thereof, to indemnify them in the sum of P3,882 plus the value
of 1,000 cavans of palay at P3 a cavan, with costs. In said judgment said court "declared the
deeds of sale executed by Marcos Garcia in favor of the defendant Eleuterio Rufino and by Paula
Tabifranca in favor of the defendants Margarita Garcia, Rosario Garcia and Dolores Rufino, null
and void." The defendants Margarita Garcia, Rosario Garcia, Dolores Rufino and Elueterio
Rufino appealed but Marcos Garcia and Paula Tabifranca did not.1awphi1.net
In support of their appeal, the defendants Margarita Garcia, Rosario Garcia, and Dolores Rufino
contend that the lower court committed the eight alleged errors assigned in their brief as follows:
1. The lower court erred in not sustaining the demurrer of the defendants-appellants Margarita
Garcia, Rosario Garcia and Dolores Rufino to the second amended complaint of the plaintiffs.
2. The lower court erred in admitting, under objections of the defendants-appellants, oral and
documentary evidence tending to attack original certificate of title No. 10009 in the name of the
spouses Marcos Garcia and Paula Tabifranca issued on May 17, 1918.
3. The lower court erred in holding that the deed of sale made and executed by Paula Tabifranca
with respect to her undivided one-half (½) share of lot No. 510 of the cadastral survey of Isabela
in favor of Margarita Garcia, Rosario Garcia and Dolores Rufino, was made without
consideration and declaring same null and void being fictitious.

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4. The lower court erred in holding that the transaction made by Paula Tabifranca in favor of
Margarita Garcia, Rosario Garcia and Dolores Rufino had no other purpose than to deprive the
plaintiffs of their shares in lot No. 510, as legitimate heirs of Ventura Garcia and Merced Garcia.
5. The lower court erred in condemning the defendants-appellants Margarita Garcia, Rosario
Garcia and Dolores Rufino, jointly and severally with the other defendants to return to the
plaintiffs one-fourth (¼) of lot No. 510 of the cadastral survey of Isabela, or in its place, to
indemnify the plaintiffs the sum of P3,882, value of said portion.
6. The lower court erred in condemning the defendants-appellants Margarita Garcia, Rosario
Garcia and Dolores Rufino, jointly and severally with the other defendants, to pay the plaintiffs
one thousand cavanes of palay or its value at P3 per cavan.
7. The lower court erred in holding that the right of the plaintiffs to present this action to recover
a portion of lot No. 510 of the cadastral survey of Isabela has not prescribed.lawphil.net
8. The lower court erred in denying the petition for a new trial of the defendants-appellants
Margarita Garcia, Rosario Garcia and Dolores Rufino.
The appellant Eleuterio Rufino also contends that said court in rendering its judgment in question
committed the four alleged errors relied upon in his brief, which read as follows:
1. The lower court erred in admitting over the defendant's objection oral as well as documentary
evidence of the plaintiffs tending to attack the stability of original certificate of title No. 10009
(Exhibit 5) in the name of the defendants Marcos Garcia and Paula Tabifranca, relative to alleged
facts that took place prior to the issuance of said title.
2. The lower court erred in ordering the defendant Eleuterio Rufino, jointly with his
codefendants, to deliver to the plaintiffs one-fourth (¼) of said lot No. 510, or in lieu thereof to
indemnify them in the sum of P3,882 representing the value of said portion.
3. The lower court erred in holding in its judgment that the deed (Exhibit 8) is fictitious and
fraudulent and declaring it null and void.
4. The lower court erred in not absolving the defendant and appellant Eleuterio Rufino from the
complaint and in denying his motion for a new trial.
Without losing sight of the purpose of the complaint of the plaintiffs and appellees as expressed
in the prayer of their pleadings or last amended complaints, it is clear that the first assignment of
alleged error attributed to the lower court by the appellants is unfounded on the ground that its
purpose is not to attack the validity of the decree by virtue of which original certificate of title
No. 10009 was issued in favor of Marcos Garcia and Paula Tabifranca, or that under which
transfer certificates of title Nos. 3001 and 8782, were issued later, but to compel the defendants
to give them one-fourth of the land described in said certificates and to pay them the indemnity
referred to therein.
The facts which have been clearly established at the trial, according to the record and the
evidence before us, may be briefly stated as follows:

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The land in question has an area of 31 hectares, 3 ares and 65 centares. It was originally
purchased with pacto de retro by the defendant Marcos Garcia and his brother Ventura Garcia
from Vidal Saravia on July 20, 1900. As the latter failed to exercise his right of repurchase the
two brothers became the absolute owners of said land and it was so held by the Court of First
Instance of Occidental Negros in case No. 274 which was instituted by Pedro Saravia, as
administrator of the intestate estate of Vidal Saravia, against said two brothers to compel the
latter to resell it to him (Exhibit L). When the two brothers purchased said land, the defendant
Marcos Garcia was yet single because he had not even been married to his former wife, as the
defendant Paula Tabifranca is only his wife by a second marriage. Marcos Garcia had by his first
wife three children who are the defendants Margarita Garcia, Rosario Garcia and the deceased
Catalina Garcia, mother of the defendant Dolores Rufino. Ventura Garcia, now deceased, also
had two children: Merced Garcia who was married to Rafael Ragarao, and Claro Garcia.
While Merced Garcia was still living, or at least until June, 1914, the defendant Marcos Garcia
had been delivering to her and her brother Claro Garcia their share of the products harvested
from the land in question. Merced Garcia who, as stated, died about the year 1914 and was
followed years later by her husband Rafael Tagarao, had three children, the herein plaintiffs
Resurreccion Tagarao, Serafin Tagarao and Buenaventura Tagarao. When this action was
brought on October 14, 1928, Resurreccion Tagarao was more than 24 years of age; Serafin was
then only 23 years, 1 month and 1 day, and Buenaventura, 18 years, 4 months and 3 days.
With the plaintiffs' grandfather, Ventura Garcia, and their mother, Merced Garcia, already dead,
the defendant Marcos Garcia claimed the lands in question in cadastral case No. 11 of the
municipality of Isabela of the Province of Occidental Negros (G. L. R. O. Cadastral Record No.
100), known in said case as lot No. 510, alleging in the pleading presented by him to that effect
(Exhibit I) that he had acquired it on July 20, 1904, when he was yet unmarried to his
codefendant Paula Tabifranca. Before the original certificate of title acknowledging him to be the
owner of the land in question was issued to him, and during the period within which any person
could ask for the revision of the decree issued to that effect, Marcos Garcia, fearing that Claro
Garcia, brother of the plaintiffs' mother, might frustrate his designs by asking for said revision,
executed in favor of Claro Garcia a document binding himself to give to the latter four hectares
of said land upon the issuance to him of the corresponding certificate of title. In view thereof,
Claro did not ask for the revision of the decree but he later brought an action, case No. 4091 of
the Court of First Instance of Occidental Negros, against Marcos Garcia to recover from him four
hectares of said land, lot No. 510 of the cadastre of Isabela, basing his claim on the document
which Marcos Garcia executed in his favor in order to promise and bind himself to give Claro
said four hectares, because after Marcos Garcia had obtained his certificate of title he refused to
comply with his promise; and as a result said court, on October 10, 1927, rendered judgment
against Marcos Garcia ordering him to segregate four hectares of said land to be delivered to
Claro Garcia and furthermore to pay to the latter as indemnity 90 cavans of palay, or the value
thereof in the sum of P360.
In the certificate of title which was issued in favor of Marcos Garcia on May 17, 1918 (original
certificate of title No. 10009), by virtue of his claim presented in said cadastral case No. 11 of

IPRA EXCLUSIVE COMPILATION


the municipality of Isabela. Occidental Negros, it was stated, as in the decree ordering the
issuance thereof, that one-half of the land therein described belonged to him, and that the other
half to his wife by a second marriage, Paula Tabifranca.
A few years after the issuance of said certificate of title the defendant Paula Tabifranca, second
wife of the defendant Marcos Garcia, sold her rights to the defendants Margarita Garcia, Rosario
Garcia and Dolores Rufino, her husband's daughters and granddaughter, respectively, by his first
marriage, executing the deed Exhibit N dated December 31, 1921, while the alleged purchaser
Dolores Rufino was yet a minor. This was agreed upon between her and her husband Marcos
Garcia to prevent the land, part of which belonged to her under said certificate of title, from ever
passing to her son by her first marriage named Juan Tabigui, as she was already a widow when
she contracted marriage with said Marcos Garcia.
In the meantime the plaintiff Resurreccion Tagarao was informed that her uncle Claro Garcia had
succeeded in obtaining his share of the land in question and, desiring to protect her rights and
those of her brothers and coplaintiffs, she negotiated with Marcos Garcia so that he might give
them their corresponding share. Marcos Garcia at first entertained her with promises that he
would see to it that she got what she wanted but later, at her back, he sold his share of the land to
the defendant Eleuterio Rufino, brother of his son-in-law Lope Rufino, husband of the defendant
Rosario Garcia, executing in favor of Eleuterio Rufino the deed Exhibit 8 wherein it was made to
appear that the price paid to him for only one-half of the land, lot No. 510, was P6,567.
Twelve days after Paula Tabifranca had executed said deed of transfer Exhibit N in favor of her
stepdaughters Margarita Garcia and Rosario Garcia and of her husband Marcos Garcia's
granddaughter named Dolores Rufino, said three defendants together with Marcos Garcia
obtained transfer certificate of title No. 3001, after the cancellation of original certificate of title
No. 10009, and two days after Marcos Garcia had executed in favor of the defendant Eleuterio
Rufino the deed of sale Exhibit 8 whereby he sold to the latter his half of the land described in
the above stated certificate of title No. 10009 (Exhibit M), he and his daughters and
granddaughter jointly with the defendant Eleuterio Rufino succeeded in having said transfer
certificate of title No. 3001 (Exhibit 3) cancelled to be substituted, as it was in fact substituted,
by transfer certificate of title No. 8782 (Exhibit 7).
The transfer made by Paula Tabifranca in favor of her stepdaughters Margarita and Rosario
Garcia and her husband's granddaughter Dolores Rufino, and that made by Marcos Garcia in
favor of Eleuterio Rufino, stated in said deeds Exhibits N and 8, are fictitious and feigned in
view of the following reasons inferable from the evidence of record:
Notwithstanding the fact that in the original certificate of title No. 10009 Paula Tabifranca's right
to one half of the property therein described has been acknowledged, she was conscious that she
was not entitled thereto because it belonged exclusively to her husband or, at least, he had
acquired it long before he married her. This explains the ease with which she parted with her
alleged right for a sum disproportionate to the true value of the land sold by her. The alleged
purchasers Margarita Garcia, Rosario Garcia and Dolores Rufino were not in a financial position
to pay her the alleged purchase price which, according to Exhibit N, amounted to P1,500; and

IPRA EXCLUSIVE COMPILATION


Dolores Rufino, being then of tender age, could not have taken part in said contract that she was
represented by her father Lope Rufino, because it does not appear that the latter was then the
guardian of her property and it is a fact that minors cannot give consent to any contract.
Neither was Eleuterio Rufino in a financial position to pay what he allegedly paid to the
defendant Marcos Garcia for the latter's share in the land in question on the ground that the
amount of six thousand five hundred sixty-seven pesos (P6,567) which is the price allegedly paid
by him to Marcos Garcia is a fortune greater than the income he could have had for several
years, because his means of livelihood, according to his own testimony, consisted simply of
extracting tuba from about 200 coconut trees leased from different persons and in retailing fresh
fish bought by him for a lump sum in order to obtain a small profit. He is a brother of the
defendant Rosario Garcia's husband, and notwithstanding that the deed Exhibit 8 was executed in
his favor, the land continues until now to be registered for taxation purposes in the name of
Marcos Garcia; and notwithstanding the alleged deed of transfer Exhibit 8 the land in question
continues to be under the Isabela Sugar Company Inc., of Occidental Negros, as property of
named "THREE SISTERS — A," "THREE SISTERS — B," and "HACIENDA GARCIA," the
first portion being under the management of Macario Torilla, husband of the defendant Margarita
Garcia; the second under the management of Lope Rufino, husband of the defendant Rosario
Garcia; and the third under that of Claro Garcia, uncle of the plaintiffs (Exhibit D). In addition to
these reasons, it may and should be stated that Elueterio Rufino's testimony explaining how the
transaction between him and Marcos Garcia was effected, does not agree with the text of the
deed of transfer Exhibit 8. It is expressly stated in said document that the price paid by him for
the land in question was P6,567 and that he also assumed the lien in the form of a mortgage
constituted on said land to secure the payment of Candido Montilla of a loan in the sum of
P4,675 from which it may be inferred that the total price paid by him for said land was really
P11,242. Notwithstanding this, he testified that he paid only P1,892 to the defendant Marcos
Garcia. It should be stated furthermore that on December 1, 1928, or scarcely two and a half
months from the time he bought said land from Marcos Garcia, Eleuterio Rufino leased it,
according to Exhibit 9, to Marcos Garcia's sons-in-law and husbands of the defendants Margarita
Garcia and Rosario Garcia, when it is natural that as he was poor and his business of
tapping tuba and reselling fishes was not lucrative, he should have personally taken charge of the
cultivation and exploitation of the land bought by him. Furthermore, on January 10, 1930, long
after the alleged transfer of said land, Exhibit 8, Macario Torilla and Lope Rufino, as Marcos
Garcia's attorneys-in-fact, the latter having executed in their favor the power of attorney, Exhibit
O-1, by virtue of which they mortgaged the land in question in the name of their principal to
Candido Montilla on July 7, 1928, Exhibit O, paid to Montilla the sum of P514.25 as interest on
the loan secured by the mortgage above stated (Exhibit 4). This last fact convinces us more that
said deed of transfer Exhibit 8 is fictitious because if it were genuine, there being as in fact there
is in said document a stipulation that the purchaser Eleuterio Rufino assumed all the lien on said
property, Eleuterio Rufino, not Marcos Garcia, personally, nor through his sons-in-law Macario
Torilla and Lope Rufino, should have paid said interest.

IPRA EXCLUSIVE COMPILATION


The foregoing proves to our satisfaction that errors 2, 3 and 4 relied upon by the appellants
Margarita Garcia, Rosario Garcia and Dolores Rufino in their brief are absolutely unfounded,
and so is alleged error No. 3 attributed to the lower court by the appellant Eleuterio Rufino.
It follows from the foregoing conclusions and considerations that errors 5 and 2 attributed to said
court by the defendants Garcia and Eleuterio Rufino, respectively, are likewise unfounded. If the
transfers made under the deeds which later made possible the issuance to the interested parties of
certificates of title Nos. 3001 and 8782 (Exhibits 3 and 7) are fraudulent, it is but proper, being in
accordance with law, that the defendants execute the deeds of transfer prayed for by the plaintiffs
in their complaint in order to give them what is theirs; and this is undoubtedly one fourth of the
entire land because if one half belonged to the plaintiffs' grandfather who, as already stated, had
only two children: Claro Garcia, the plaintiffs' uncle, and Merced Garcia, their mother.
But the question now arises whether or not the three plaintiffs are entitled to what they jointly
pray for in their complaint. There is no doubt but that the plaintiffs Serafin Tagarao and
Buenaventura Tagarao are entitled thereto on the ground that the former was only 23 years, 1
month and 1 day, when this action was brought, and therefore the three years exception granted
by the provisions of section 42 of Act No. 190 had not yet elapsed as to him, and because
Buenaventura Tagarao, then being only 18 years, 4 months and 3 days of age, was yet a minor
and the period of prescription as to him is extended to three years after he was attained majority.
The plaintiff Resurreccion Tagarao, notwithstanding that she was of legal age when this action
was brought, contends that neither has her right to seek the same relief prayed for by her brothers
and coplaintiffs prescribed, and cites in support of her contention the ruling laid down in the case
of Velazquez vs. Teodoro (46 Phil., 757). It was truly stated in said case, citing with approval a
doctrine laid down by the Supreme Court of the State of Ohio in the case of Sturges and
Anderson vs. Longworth and Horne (1 Ohio St., 545), that:
Where the interests of two defendants are joint and inseparable, and the rights of one are saved
under the provision of the statute of limitations, on account of his disability, such saving inures
to the benefit of the other defendant, although laboring under no disability.
As may be seen, this ruling refers to cases in which the rights of the defendants are joint and
inseparable because when they are not so, that is, when they are joint and several at the same
time, as is the case of the plaintiffs whose rights are joint and several, the rule according to said
court, interpreting the section from which section 42 of Act No. 190 was copied, is different; and
said court stated that in said cases the disability which protects an heir from the effects of
prescription is no protection to coheirs, or in other words, using the same language of the author
of the footnotes on the decision rendered in the case of Moore vs. Armstrong, reported in 36 Am.
Dec., 63, 78, wherein the same Supreme Court of the State of Ohio sustained the latter point of
view, "where the rights of the parties are not joint, the cases are uniform, and hold that the
disability of one will prevent the operation of the statute as to him, but that those who are not
under a disability will be barred."
The case of Moore vs. Armstrong, supra, has more points in common with the case at bar than
those of Sturges and Anderson vs. Longworth and Horne, and Wilkins vs. Philips cited in said

IPRA EXCLUSIVE COMPILATION


case of Velazquez vs. Teodoro, supra. The question for determination in the former case was
whether or not the period of prescription runs not only against the heir who is laboring under
disability but also against his coheirs who are sui juris. The plaintiffs, to all appearances, were
the heirs of one Furgus Moore and the heiress who seemed to be laboring under disability was a
married woman named Mrs. Fleming. The Supreme Court of Ohio decided the question in the
negative with the remark that whatever doubt might once have been entertained on this subject, it
was conclusively settled both in Great Britain and in the United States that the statute is saved in
favor only of the person laboring under the alleged disability, adding in succession that this is
precisely the rule with respect both to coparceners and tenants in common.
It cannot be argued that the separation of rights among the plaintiffs was not practicable in the
sense that one of them could not have disposed of or alienate his legal portion of the thing
possessed in common without the consent of the others, because the law provides otherwise. It
says:
Every part owner shall have the absolute ownership of his part, and of the fruits and benefits
derived therefrom, and he may, therefore, sell, assign, or mortgage it, and even substitute another
person in its enjoyment, unless personal rights are involved, but the effect of the sale or
mortgage, with respect to the other participants, shall be limited to the share which may be
allotted him in the partition upon the dissolution of the community.
Furthermore, whosoever among said plaintiffs should have desired the partition of the property
of which he was a coowner, could have demanded such partition inasmuch as the law then
allowed and still allows such act (article 400, Civil Code; and section 181, Act No. 190). What
particularly distinguishes the case at bar from that of Sturges and Anderson vs. Longworth and
Horne, supra, and the other cases wherein it was established that when the rights and joint the
exception which saves one of the interested parties also inures to the benefit of the others, is that
it was assumed in the latter cases that the rights and interests involved therein pertained to joint
tenancy, not tenancy in common, which are two distinct relations, each having its own juridical
meaning. The distinguishing feature between the one and the other, as stated in the case of
Mette vs. Feltgen (148 Ill., 357, 371), is that the surviving coowner in joint tenancy is subrogated
in the rights of the deceased coowner immediately upon the death of the latter, by the mere fact
of said death, but this does not take place in cases of tenancy in common which corresponds to
what is known in our law as community of property (articles 392 et seq. of the Civil Code). For
this reason, according to American jurisprudence, a coowner in joint tenancy can not dispose of
his share or interest in the property which is the subject matter of the joint tenancy, without the
consent of the other coowner because in so doing he prejudices the other's rights and interests.
That the separation of rights and interests among the plaintiffs was practicable is further
evidenced by the fact that Claro Garcia with whom they were entitled to one-half of the land in
question could recover his legal portion thereof from Marcos Garcia, although certainly not in its
entirety, having failed to assert his rights. This being so, and it being known as it is in fact known
that the purpose of the statute of limitations is no other than to protect the diligent and vigilant,
not the person who sleeps on his rights, forgetting them and taking no trouble of exercising them
one way or another to show that he truly has such rights, it is logical to conclude that the right of

IPRA EXCLUSIVE COMPILATION


action of the plaintiff Resurreccion Tagarao is barred, and the fact that that of her brothers and
coplaintiffs Serafin and Buenaventura Tagarao still subsists does not inure to her benefit.
Although Resurreccion Tagarao could have enforced the right which she exercised in this case
on May 17, 1918, when Marcos Garcia and Paula Tabifranca obtained original certificate of title
No. 10009 (Exhibit M) or shortly afterwards, or long before, that is, from the death of her mother
Merced Garcia in 1914 or 1915, she did nothing to protect her rights. On the contrary, she
allowed said spouses to perform acts of ownership on the land covered by said certificate,
publicly, peacefully, uninterrupted and adversely to the whole world including herself, and from
that time until the filing of her first complaint more than ten years had elapsed. It is for this
reason why it cannot be sustained that the defendants Marcos Garcia and Paula Tabifranca, after
it has been shown that the transfers made by them are null and void, being fictitious and false,
hold the land in question in trust, because if they ever held it in said capacity it had been during
the lifetime of the plaintiffs' mother to whom said defendants used to give part of the fruits
thereof. But after she had died, their possession was under the circumstances above stated and
the law provides that in whatever way the occupancy by a person claiming to be the owner of a
real property may have commenced, if said occupancy is under claim of title and is furthermore
open, continuous for ten years and adverse, it constitutes sufficient title for the occupant thereof
(sections 40 and 41 of Act No. 190), and there can be no other exception to this rule than the
disability of persons who are entitled to said property, by reason of age, some mental defect, or
imprisonment, for whom the same law provides the exceptions contained in its section 42.
It having been established by the evidence for both the plaintiffs and the defendants that Candido
Montilla holds a lien on the land in question, which is noted at the back of transfer certificates of
title Nos. 3001 and 8782 (Exhibits 3 and 7) for a loan in the sum of P4,675 which he granted to
Marcos Garcia in the honest belief that the latter was the true owner of the land described in
certificates of title Nos. 10009 (Exhibit M), 3001 (Exhibit 3), and 8782 (Exhibit 7), it is but just
that said lien be acknowledged by the plaintiffs Serafin Tagarao and Buenaventura Tagarao, with
the necessary reservations in favor of said two plaintiffs.
It should be stated in passing that the land in question, lot No. 510 of cadastral case No. 11 of
Isabela, Occidental Negros, is assessed at P15,530, and therefore one-twelfth (1/12) thereof is
worth P1,294.17 on that basis.
As to the indemnity which the plaintiffs claim for the defendants, the conclusion arrived at by the
lower court in its decision and judgment is supported by the evidence, that is, the plaintiffs' share
of the crops from 1918 to 1929, including that of Resurreccion Tagarao, should be 1,000 cavans
of palay. However, it being clear that Resurreccion Tagarao's action is barred, it should be
understood that only the plaintiffs Serafin Tagarao and Buenaventura Tagarao are entitled to
compel the defendants to pay to them the value of two-thirds of the 1,000 cavans of palay at the
rate of P3 a cavan.
For all the foregoing, the judgment appealed from is affirmed in so far as it favors the plaintiffs
Serafin Tagarao and Buenaventura Tagarao, and said defendants are hereby ordered to execute in
favor of said Tagarao brothers and deed or deeds necessary to transfer to them, by virtue of this

IPRA EXCLUSIVE COMPILATION


judgment, two-twelfths (2/12) of the entire lot No. 510 of the cadastre of Isabela, Occidental
Negros, including the portion transferred to Claro Garcia (G. L. R. O. Cad. Record No. 100); to
indemnify each of them in a sum equal to what he may pay to the mortgage creditor Candido
Montilla to free his said portion from the lien thereof in favor of said Montilla; or likewise to pay
to each of them, upon failure of the defendants to deliver said portion and execute the necessary
deed of transfer, the sum of P1,294.17; and furthermore to pay, as indemnity, the value of two-
thirds of 1,000 cavans of palay, at the rate of P3 a cavan, with costs against the defendants. Said
judgment is reversed as to the plaintiff Resurreccion Tagarao. So ordered.
Street, Abad Santos, Hull, Vickers, Imperial, and Butte, JJ., conc

G.R. No. L-47757 April 7, 1942


ANA RIVERA, plaintiff-appellant,
vs.
PEOPLES BANK AND TRUST CO., defendant-appellee.
MINNIE STEPHENSON, in her capacity as administratix of the intestate estate of EDGAR
Stephenson,intervenor-appellee.
Cecilio I. Lim, Chief Public Defender, for appellant.
Antonio M. Opisso for intervenor-appellee.
No appearance for appellee Peoples Bank & Trust Co.
OZAETA, J.:
The question raised in this appeal is the validity of the survivorship agreement made by and
between Edgar Stephenson, now deceased, and Ana Rivera, appellant herein, which read as
follows:
SURVIVORSHIP AGREEMENT
Know All Men by These Presents:
That we hereby agree with each other and with the PEOPLES BANK AND TRUST
COMPANY, Manila, Philippine Islands (hereinafter called the Bank), that all moneys now or
hereafter deposited by us or either of us with the Bank in our savings account shall be deposited
in and received by the Bank with the understanding and upon the condition that said money be
deposited without consideration of its previous ownership, and that said money and all interest
thereon, if any there be, shall be the property of both of us joint tenants, and shall be payable to
and collectible by either of us during our joint lives, and after the death of one of us shall belong
to and be the sole property of the survivor, and shall be payable to and collectible by such
survivor.

IPRA EXCLUSIVE COMPILATION


And we further covenant and agree with each other and the Bank, its successors or assigns, that
the receipt or check of either of us during our joint lives, or the receipt or check of the survivor,
for any payment made from this account, and shall be valid and sufficient and discharge to the
Bank for such payment.
The Bank is hereby authorized to accept and deposit to this account all checks made payable to
either or both of us, when endorsed by either or both of us or one for the other.
This is a joint and several agreement and is binding upon each of us, our heirs, executors,
administrators, and assigns.
In witness whereof we have signed our names here to this 17th day of October, 1931.

(Sgd.) EDGAR STEPHENSON


(Sgd.) Ana Rivera
Address: 799 Sta. Mesa, Manila

Witness:
(Sgd.) FRED W. BOHLER
(Sgd.) Y. E. Cox
S. A. #4146
Ana Rivera was employed by Edgar Stephenson as housekeeper from the year 1920 until his
death on June 8, 1939. On December 24, Stephenson opened an account in his name with the
defendant Peoples Bank by depositing therein the sum of P1,000. On October 17, 1931, when
there was a balance of P2,072 in said account, the survivorship agreement in question was
executed and the said account was transferred to the name of "Edgar Stephenson and/or Ana
Rivera." At the time of Stephenson's death Ana Rivera held the deposit book, and there was a
balance in said account of P701. 43, which Ana Rivera claimed but which the bank refused to
pay to her upon advice of its attorneys who gave the opinion that the survivorship agreement was
of doubtful validity. Thereupon Ana Rivera instituted the present action against the bank, and
Minnie Stephenson, administratix of the estate of the deceased, intervened and claimed the
amount for the estate, alleging that the money deposited in said account was and is the exclusive
property of the deceased.
The trial court held that the agreement in question, viewed from its effect during the lives of the
parties, was a mere power of attorney authorizing Ana Rivera to withdraw the deposit, which
power terminated upon the death of the principal, Edgar Stephenson; but that, viewed from its
effect after the death of either of the parties, the agreement was a donation mortis causa with
reference to the balance remaining at the death of one of them, which, not having been executed
with the formalities of a testamentary disposition as required by article 620 of the Civil Code,
was of no legal effect.
The defendant bank did not appear in this Court. Counsel for the intervenor-appellee in his brief
contends that the survivorship agreement was a donation mortis causa from Stephenson to Ana

IPRA EXCLUSIVE COMPILATION


Rivera of the bank account in question and that, since it was not executed with the formalities of
a will, it can have no legal effect.
We find no basis for the conclusion that the survivorship agreement was a mere power of
attorney from Stephenson to Ana Rivera, or that it is a gift mortis causa of the bank account in
question from him to her. Such conclusion is evidently predicated on the assumption that
Stephenson was the exclusive owner of the funds deposited in the bank, which assumption was
in turn based on the facts (1) that the account was originally opened in the name of Stephenson
alone and (2) that Ana Rivera "served only as housemaid of the deceased." But it not
infrequently happens that a person deposits money in the bank in the name of another; and in the
instant case it also appears that Ana Rivera served her master for about nineteen years without
actually receiving her salary from him. The fact that subsequently Stephenson transferred the
account to the name of himself and/or Ana Rivera and executed with the latter the survivorship
agreement in question although there was no relation of kinship between them but only that of
master and servant, nullifies the assumption that Stephenson was the exclusive owner of the bank
account. In the absence, then, of clear proof of the contrary, we must give full faith and credit to
the certificate of deposit, which recites in effect that the funds in question belonged to Edgar
Stephenson and Ana Rivera; that they were joint owners thereof; and that either of them could
withdraw any part or the whole of said account during the lifetime of both, and the balance, if
any, upon the death of either, belonged to the survivor.
Is the survivorship agreement valid? Prima facie, we think it is valid. It is an aleatory contract
supported by law a lawful consideration — the mutual agreement of the joint depositors
permitting either of them to withdraw the whole deposit during their lifetime, and transferring
the balance to the survivor upon the death of one of them. The trial court said that the Civil Code
"contains no provisions sanctioning such an agreement" We think it is covered by article 1790 of
the Civil Code, which provides as follows:
ART. 1790. By an aleatory contract one of the parties binds himself, or both reciprocally bind
themselves, to give or to do something as an equivalent for that which the other party is to give
or do in case of the occurrence of an event which is uncertain or will happen at an indeterminate
time.
(See also article 1255.)
The case of Macam vs. Gatmaitan (decided March 11, 1937), 36 Off. Gaz., 2175, is in point.
Two friends Juana Gatmaitan and Leonarda Macam, who had lived together for some time,
agreed in writing that the house of strong materials which they bought with the money belonging
to Leonarda Macam and the Buick automobile and certain furniture which belonged to Juana
Gatmaitan shall belong to the survivor upon the death of one of them and that "this agreement
shall be equivalent to a transfer of the rights of the one who dies first and shall be kept by the
survivor." After the death of Leonarda Macam, her executrix assailed that document on the
ground that with respect to the house the same constituted a donation mortis causa by Leonarda
Macam in favor of Juana Gatmaitan. In affirming the judgment of the trial court absolving the
defendants from the complaint this Court, speaking through Chief Justice Avaceña, said:

IPRA EXCLUSIVE COMPILATION


This court is of the opinion that Exhibit C is an aleatory contract whereby, according to article
1790 of the civil Code, one of the parties or both reciprocally bind themselves to give or do
something as an equivalent for that which the other party is to give or do in case of the
occurrence of an event which is uncertain or will happen at an indeterminate time. As already
stated, Leonarda was the owner of the house and Juana of the Buick automobile and most of the
furniture. By virtue of Exhibit C, Juana would become the owner of the house in case Leonarda
died first, and Leonarda would become the owner of the automobile and the furniture if Juana
were to die first. In this manner Leonarda and Juana reciprocally assigned their respective
property to one another conditioned upon who might die first, the time of death determining the
event upon which the acquisition of such right by the one or the other depended. This contract, as
any other contract, is binding upon the parties thereto. Inasmuch as Leonarda had died before
Juana, the latter thereupon acquired the ownership of the house, in the same manner as Leonarda
would have acquired the ownership of the automobile of the furniture if Juana had died first. (36
Off. Gaz., 2176.)
Furthermore, "it is well established that a bank account may be so created that two persons shall
be joint owners thereof during their mutual lives, and the survivor take the whole on the death of
the other. The right to make such joint deposits has generally been held not to be done with by
statutes abolishing joint tenancy and survivorship generally as they existed at common law." (7
Am. Jur., 299.)
But although the survivorship agreement is per se not contrary to law, its operation or effect may
be violative of the law. For instance, if it be shown in a given case that such agreement is a mere
cloak to hide an inofficious donation, to transfer property in fraud of creditors, or to defeat the
legitime of a forced heir, it may be assailed and annulled upon such grounds. No such vice has
been imputed and established against the agreement involved in the case.
The agreement appealed from is reversed and another judgment will be entered in favor of the
plaintiff ordering the defendant bank to pay to her the sum of P701.43, with legal interest thereon
from the date of the complaint, and the costs in both instances. So ordered.

.R. No. L-46207 October 10, 1939


VICTORIANO GATCHALIAN, plaintiff -appellee,
vs.
MAMERTO MANALO, ET AL., defendants-appellants.
Gregorio C. Concepcion and Crispin Oben for appellant.
V.J. Alcid for appellee.

IPRA EXCLUSIVE COMPILATION


LAUREL, J.:
This is an appeal from a judgment of the Court of First Instance of Manila adjudging the
plaintiff-appellee, Victoriano Gatchalian, to be the owner of house No. 1125 Int. Kusang-loob,
Manila, standing on a lot formerly belonging to the defendant-appellant, Mamerto Manalo, and
restraining the latter and the sheriff of Manila from levying execution upon said house.
The house in question was originally the property of the spouses Juan Domingo and Ignacia
Maigui. Upon default of the latter in the payment of the rents for the land on which their house
was built, Mamerto Manalo instituted in the Municipal Court of Manila an action (Civil Case
No. 105911) wherein judgment was rendered on August 23, 1935, sentencing Juan Domingo and
Ignacia Maigui to pay to Mamerto Manalo the sum of P175, with legal interest from August 15,
1935, and costs. On October 24, 1935, Juan Domingo and his wife deeded the house in question
to the herein plaintiff-appellee who bought the same after making the precautionary inquiry from
the City Hall and the then owner of the land, Calixto Torres, as to the ownership of said property
and any encumbrance thereon. The plaintiff is not related to his vendors whom he came to know
only a few days before the sale. From the time the house was conveyed to him the plaintiff has
been paying the real estate tax thereon and the rents for the land on which it was built, and has
made improvements on the property costing P400. On November 6, 1935, a writ of execution
was issued in Civil Case No. 105911, and on November 21, 1935, the house in question was
levied upon, it appearing that the defendants therein had no other property which was leviable.
On December 11, 1935, the plaintiff filed a third party claim, and on December 27, 1935, the
present action was instituted for the purpose of obtaining a judicial decree to the effect that the
plaintiff is the owner of the house and an injunction restraining the defendants from levying upon
it, with result noted in the opening paragraph of this decision.
When an alienation is made, as in this case, after a judgment has been rendered against the
person alienating, there arises the legal presumption that the alienation is fraudulent (Art. 1297,
Civil Code and the alienation may be rescinded (Art. 1291, Civil Code) and the only question
raised in this instance is one of law, namely, whether or not this presumption is disputable and
will yield to proof to the contrary. This court has already held that the presumption established in
article 1297 "is not conclusive and may be rebutted . . . by means of satisfactory and convincing
evidence." (Buencamino vs. Bantug, [1933], 58 Phil., 521, 523; vide also Peña vs. Mitchell, 9
Phil., 587 Kuenzle & Streiff vs. Collector of Customs, 31 Phil., 643; National Exchange
Co. vs. Katigbak, 54 Phil., 599). Manresa, commenting on said provision, is of the same opinion:
Quizas el mas importante, o a lo menos el mas invocado de los articulo que comprende este
capitulo, es el 1297, que establece las presunciones legales de fraude, susceptibles de
impugnacion, aunque dificil, y no excluyentes de otras que no pueden ofrecer duda. (Manresa,
Comentarios al Codigo Civil Español, 4.a edicion, Tomo VIII, pag. 685.)
Las presunciones establecidas por la ley no excluyen la prueba en contrario, segun declara el art.
1251, si expresamente no la prohiben, y no conteniendose tal prohibicion en el art. 1297, cabe
que se aduzca prueba para desvirtuar la presuncion de fraude establecida por las leyes. Mas
dificil es que se estime la demostracion de esa prueba, pues sobre ser necesario que la

IPRA EXCLUSIVE COMPILATION


demostracion, frente a toda presuncion legal, sea muy evidente, se lucha con la prevencion que
naturalmente suscita la habilidad y mala fe caracteristicas de fraude. Sin embargo, cabe que a ese
resultado se ileque teniendo declarado el Supremo que "la presuncion del art. 1297 del ser
fraudulantes las enajenaciones hecha por aquellos, a quienes se hubiese condenado era alguna
instancia o contra quienes se hubiese expedido mandamiento de embargo, puede destruirse,
como todas, mediante prueba en contrario, de conformidad con el art, 1251, y estimindolo asi la
Sala en el ejercicio de las facultades que le reconoce el 1248, de acuerdo con la ley de
Enjuiciamiento, no infringe el 1297, ni el 1291, ni menos el 1248." Sentencia de 15 de junio de
1897, confirmada por las de 26 de mayo 1908 y 2 de enero de 1912. (Manresa, Comentarios al
Codigo Civil Español 4.a edicion, Tomo VIII, pags. 689-690.)
Without the least intimating that the plaintiff was a purchaser in bad faith, appellants rely on the
proposition that that it is the good faith of the vendors (judgment debtors in civil case No.
105911) that should be proved in order that the title derived by the plaintiff from the sale in
question may be upheld. But, if the legal presumption of fraud is rebuttable as against the
judgment debtor, the presumption should likewise be rebuttable as against a purchaser from him.
Moreover, by express mandate of article 1295 of the Civil Code, an action for recission will not
lie when the subject matter of the contract is legally in the possession of third persons acting in
good faith, and this can only mean that a showing of good faith on the part of a purchaser is
sufficient to avoid rescission.
La adquisicion por un tercero estorba a la eficacia de la accion rescisoria, concurriendo estas dos
circunstancias; que aquel tenga los inmuebles legalmente, es decir, protegido por la ley contra
aquella accion mediante la inscripcion en el Registro, y que no haya procedido de mala fe.
(Manresa, Comentarios al Codigo Civil Español, 4.a edicion, Tomo VIII, pag. 681.)lâwphi1.nêt
La aplicacion del mismo esta referida, por tanto, mas frecuentemente al caso de enajenaciones a
titulo oneroso, principalmente si son segundas, es decir, hechas por el que adquirio del deudor, o
terceras, etc., y el origen de la accion no consta en el registro, necesitandose entonces que el
tercero a quien la accion perjudique haya procedido de mala fe; ya que, como dice la sentencia
de 12 de octubre de 1899, ratificando el precepto del Codigo que ahora estamos comentado: "la
accion rescisoria nunca procede contra el tercero que tiene en su poder legalmente las cosas
objeto del contrato, si no hubiera procedido de mala fe." (Manresa, Comentarios al Codigo Civil,
4.a edicion, Tomo VIII, pag. 682.)
The good faith of the plaintiff not being controverted and adhering to our view in Buencamino
vs. Bantug, supra, the judgment appealed from is affirmed, with costs against the appellants. So
ordered

G.R. No. L-32047 November 1, 1930

IPRA EXCLUSIVE COMPILATION


MANUEL MELENCIO, MARIANO MELENCIO, PURA MELENCIO, and CARIDAD
MELENCIO, plaintiffs-appellants,
vs.
DY TIAO LAY, defendant-appellee.
Jose V. Valladolid, Jose P. Melencio and Camus and Delgado for appellants.
Araneta and Zaragoza for appellee.

OSTRAND, J.:
On August 1,1927, the plaintiffs, Manuel, Mariano, Pura and Caridad Melencio, brought the
present action against the defendant-appellee, Dy Tiao Lay for the recovery of the possession of
a parcel of land situated in the town of Cabanatuan, Nueva Ecija, and containing an area of
4,628.25 square meters. The plaintiffs further demand a monthly rental of P300 for the use and
occupation of the parcel from May, 1926, until the date of the surrender to them of the
possession 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, concurrence, and ratification by the owners thereof.
In his answer, the defendant pleaded the general issue, and as special defenses, he alleged in
substance that he was occupying the said tract of land by virtue of a contract of lease executed on
July 24,1905, in favor of his predecessor in interest, by Ruperta Garcia, Pedro Melencio, Juliana
Melencio, and Ruperta Melencio under the terms specified therein, and which contract is still in
force; that Liberata Macapagal, the mother of the plaintiffs, in her capacity as judicial
administratrix of the estate of Ramon Melencio, one of the original coowners of the parcel of
land in question, actually recognized and ratified the existence and validity of the contract
aforesaid by virtue of the execution of a public document by her on or about November 27,1920,
and by collecting from the assignees of the original lessee the monthly rent for the premises until
April 30, 1926; and that 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 the plaintiffs.
The plaintiffs filed a reply to the answer alleging, among other things, that Ruperta Garcia was
not one of the coowners of the land in question; that the person who signed the alleged contract
of lease never represented themselves as being the sole and exclusive owners of the land subject
to the lease as alleged by the defendant in his answer; that the said contract of lease of July
24,1905, is null and void for being executed without the intervention and consent of two
coowners, 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 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 she could not ratify the said lease as claimed by the defendant.

IPRA EXCLUSIVE COMPILATION


On January 21,1928, Liberata Macapagal Viuda de Melencio, duly appointed and qualified as
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
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 that the defendant-appellee has occupied the land in question ever since November, 1920,
under 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.
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, Juliana, Ramon, Ruperta, Pedro R., and Emilio Melencio. Emilio Melencio also died
before 1905, his son Jose P. Melencio, then a minor, succeeding to his interest in the said parcel
of land by representation. A question has been raised as to whether the land was community
property of the marriage of Julian Melencio and Ruperta Garcia, but the evidence is practically
undisputed that Ruperta Garcia in reality held nothing but a widow's usufruct in the land.
On July 24,1905, Ruperta Garcia, Pedro R. Melencio, Juliana Melencio, and Ruperta Melencio
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, extendible for a like period at the option of the lessee. The purpose of the lessee
was to establish a rice mill on the land, with the necessary buildings for warehouses and for
quarters for the employees, and it was further stipulated that at the termination of the original
period of the lease, or the extension therof, the lessors might purchase all the buildings and
improvements on the land at a price to be fixed by experts appointed by the parties, but that if the
lessors should fail to take advantage of that privilege, the lease would continue for another and
further period of twenty years. The document was duly acknowledged but was never recorded
with the register of deeds. The original rent agreed upon was P25 per month, but by reason of the
construction of a street through the land, the monthly rent was reduced of P20.20.
Shortly after the execution of the lease, the lessee took possession of the parcel in question and
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
of the property held in common by the heirs of Julian Melencio and Ruperta Garcia. The original
lessee, Yap Kui Chin, died in 1912, and the lease, as well as the other property, was transferred
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 of his estate. In 1913 the land which includes the parcel in question was registered
under the Torrens system. The lease was not mentioned in the certificate of title, but it was stated
that one house and three warehouses on the land were the property of Yap Kui Chin.

IPRA EXCLUSIVE COMPILATION


In 1920 the heirs of Julian Melencio made an extrajudicial partition of parts of the inheritance,
and among other things, the land here in question fell to the share of the children of Ramon
Melencio, who are the original plaintiffs in the present case. Their mother, Liberata Macapagal,
as administratrix of the estate of her deceased husband, Ramon, collected the rent for the lease at
the rate of P20.20 per month until the month of May,1926, when she demanded of the lessee that
the rent should be increased to P300 per month, and she was then informed by the defendant that
a written lease existed and that according to the terms thereof, the defendant was entitled to an
extension of the lease at the original rental. The plaintiffs insisted that they never had any
knowledge of the existence of such a contract of lease and maintained that in such case the lease
was executed without their consent and was void. It may be noted that upon careful search, a
copy of the contract of lease was found among the papers of the deceased Pedro R, Melencio.
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
valid and ordering the plaintiffs to pay the P272 demanded by the defendant in his counterclaim.
From this judgment the plaintiffs appealed.
The contention of the appellants is that the aforesaid contract of lease (Exhibit C) is null and void
for the following reasons:
1. That Exhibit C calls for an alteration of the property in question and therefore ought to have
been signed by all the coowners as by law required in the premises.
2. That the validity and fulfillment of the said agreement of lease were made to depend upon the
will of the lessee exclusively.
3. That the said contract of lease being for a term of over six years, the same is null and void
pursuant to the provision of article 1548 of the Civil Code.
4. That the duration of the same is unreasonably long, thus being against public policy.
5. That the defendant-appellee and his predecessors in interest repeatedly violated the provisions
of the agreement.
The first proposition is based on article 397 of the Civil Code which provides that "none of the
owners shall, without the consent of the others, make any alterations in the common property
even though such alterations might be advantageous to all." We do not think that the alterations
are of sufficient importance to nullify the lease, especially so since none of the coowners
objected 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 discussion of the effect of alterations of leased community property, and no
further discussion upon the point need here be considered.
The second proposition is likewise of little merit. Under the circumstances, the provision in the
contract that the lessee, at any time before he erected any building on the land, might rescind the
lease, can hardly be regarded as a violation of article 1256 of the Civil Code.

IPRA EXCLUSIVE COMPILATION


The third and fourth proposition are, in our opinion, determinative of the controversy. The court
below based its decision principally on the case of Enriquez vs. A.S. Watson & Co. (22 Phil.,
623), and on the resolution of the Direccion General de los Registros dated April 26,1907.
(Jurisprudencia Civil, vol.107, p. 222.) An examination of the Enriquez case will show that it
differs materially from the present. In that case all of the coowners of a lot and building executed
a contract of lease of the property for the term of eighteen years in favor of A. S. Watson & Co.;
one of the owners was minor, but he was represented by his legally appointed guardian, and the
action of the latter in signing the lease on behalf of the minor was formally approved by the
Court of First Instance. In the present case only a small majority of the coowners executed the
lease here in question, and according to the terms of the contract the lease might be given a
duration of sixty years; that is widely different from a lease granted by all of the coowners for a
term of only eighteen years.
The resolution of April 26,1907, is more in point. It relates to the inscription or registration of a
contract of lease of some pasture grounds. The majority of the coowners of the property executed
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 exceeded six years and that therefore the majority of the coowners lacked authority to grant
the 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
valid.
The conclusions reached by the Direccion General led to considerable criticism and have been
overruled by a decision of the Supreme Court of Spain dated June 1,1909. In that decision the
court made the following statement of the case (translation):
The joint owners of 511 out of 1,000 parts of the realty denominated El Mortero, leased 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 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 in article 398 of the Code, implies a common
deliberation on the step to be taken , for to 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 majority would still be confined to decisions touching the
management and enjoyment of the common property, and would not include acts of ownership,
such as a lease for twelve years, which according to the Mortgage Law gives rise to a real right,
which must be recorded, and which can be performed only by the owners of the property leased.
The part owners who had executed the contract prayed in reconvention that it held valid for all
the owners in common, and if this could not be, then for all those who had signed it, 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 assignments of error, that the judgment
was a violation of article 398 of the Civil Code, which is absolute and sets no limit of time for

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the efficacy of the decisions arrived at by the majority of the part owners for the enjoyment of
the common property, citing the decisions of June 30th, 1897, of July 8th,1902, and of October
30th, 1907; under the fifth 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 the management of another's property, the court applied article 1548 unduly; and
by the seventh assignments of error, they maintained the judgment appealed from also violated
article 1727, providing that the principal is not bound where his agent has acted beyond his
authority; whence it may be inferred that if in order to hold the contract null and void, the
majority of the part owners are looked upon as managers or agents exercising limited powers, it
must at least be conceded that in so far as the act in question lies within the scope of their
powers, it is valid; the contract cannot be annulled in toto.
The Supreme Court held that the appeal from the decision of the Audiencia of Caceres was not
well taken and expressed the following consideranda:
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 the nature of the subject
matter, or to the period of duration, which may render it imperative to record the contract in the
registry of property, in pursuance of the Mortgage Law, where the contract of lease may give rise
to a real right in favor of the lessee, and it would then constitute such a sundering of the
ownership as transcends mere management; in such cases it must of necessity be recognized that
the part owners representing the greater portion of the property held in common have no power
to lease said property for a longer period than six years without the consent of all the coowners,
whose propriety rights, expressly recognized by the law, would by contracts of long duration be
restricted or annulled; and as under article 1548 of the Civil Code such 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 cannot without the consent of all
persons interested or express authority from the owner, be extended to include stipulations which
may alter its character, changing it into a contract of partial alienation of the property leased;
Considering that, applying this doctrine to the case before us, one of the grounds upon which the
judgment appealed from, denying the validity of the lease made by the majority of the part
owners of the pasture land El Mortero is based, must be upheld; to wit, that the period of
duration is twelve years and the consent of all the coowners has not been 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 decided upon by the majority of the part
owners, touching the management and enjoyment of the common property, and does not
contradict what we have stated in the 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 analogy between a manager without special authority, who is forbidden by article
1548 of the Code to give a lease for a period of over six years, and the joint owners constituting a
legal majority, who may decide to lease out the indivisible property, with respect to the shares of

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the other coowners; and having come to the conclusion that the contract is null and void, there is
no need to discuss the first two assignments of error which refer to another of the bases adopted,
however erroneously, by the trial court;
Considering that the sixth assignment of error is without merit, inasmuch as the joint ownership
of property is not a sort of agency and cannot be governed by the provisions relating to the latter
contract; whence, article 1727 of the Code alleged to have been violated, can no more be applied,
than, the question of the validity or nullity of the lease being raise, upon the contract as
celebrated, it would be allowable to modify a posteriorisome one or other of the main conditions
stipulated, like that regarding the duration of the lease, for this would amount to a novation; still
less allowable would it be to authorize diverse periods for the different persons unequally
interested in the fulfillment.
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.
It has been suggested that by reason of prescription and by acceptance of benefits under the
lease, the plaintiffs are estopped to question the authority for making the lease.To this we may
answer that the burden of proof of prescription devolved upon the defendant and that as far as we
can find, there is no proof that Ramon Melencio and his successors ever had knowledge of the
existence of the lease in question prior to 1926. We cannot by mere suspicion conclude that they
were informed of the existence of the document and its terms; it must be remembered that under
a strict interpretation of the terms of the lease, the lessees could remain indefinitely in their
tenancy unless the lessors could purchase the mill and the buildings on the land. In such
circumstances, better evidence than that presented by the defendant in regard to the plaintiff's
knowledge of the lease must be required.
The fact that Ramon during his lifetime received his share of the products of land owned in
common with his coheirs is not sufficient proof of knowledge of the existence of the contract of
lease when it is considered that the land in question was only a small portion of a large tract
which 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
the possession of the land in controversy be delivered to the intervenor Liberata Macapagal in
her capacity as administratrix of the estate of the deceased Ramon Melencio. It is further ordered
that the defendant pay to said administratrix a monthly rent of P50 for the occupation of the land
from May 1st, 1926, until the land is delivered to the administratrix. The sum of P272 demanded
by the defendant in his counterclaim may be deducted from the total amount of the rent due and
unpaid. The building erected on the land by the defendant and his predecessors in interest may be
removed by him, or otherwise disposed of, within six months from the promulgation of this
decision. Without costs. So ordered.
Avanceña, C.J., , Malcolm, Johns, Romualdez, and Villa-Real, JJ., concur.
Jonhson, J., I reserve my vote.

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Separate Opinions

STREET and VILLAMOR, JJ., dissenting:


Although the name of Ramon Melencio, father of the plaintiffs in this action, was not in fact
signed to the lease in question, and the lease did not even so much as mentioned him as one of
the coowners, the undersigned are nevertheless of the opinion that Ramon Melencio, and his
children after him, are estopped from questioning said lease, for the reason that, from 1905 to the
time of his death in 1914, Ramon Melencio enjoyed the benefits of the lease, as did his widow
and children after him until May,1926, when the widow repudiated the lease, as a preliminary to
the bringing of this action by the plaintiffs. By their acceptance of the benefits of the lease over
so long a period, the persons now questioning the lease and their father, their predecessor in
interest, are estopped to question the authority for making the lease. This estopped cures the want
of the special power contemplated in article 1548 of the Civil Code.
In addition to the estopped arising from the acceptance of benefits under the lease, an estoppel
further arises from the fact that Ramon Melecio, during the years following the execution of the
lease, stood by and saw the lessees place upon the property improvements of a value of more
than P100,000, for which reason, also, equity will not permit the lease to be disturbed to the
prejudice of the lessee.
To exhibit the foregoing proposition fully, it is necessary to understand the facts relative to the
controversy. These are substantially as follows:
The land covered by the original lease, having an area of some 6,000 square meters, is located in
the town of Cabanatuan and was formerly the property of one Julian Melencio, married to
Ruperta Garcia. After the death of Julian Melencio, his widow, Ruperta Garcia, united in 1905,
with three of their children, namely, Pedro R., Juliana, and Ruperta, in executing, in favor of Yap
Kui Chin, as lessee, the lease which is the subject of this controversy. The consideration
mentioned in the lease was the sum P25 per month. On August 2,1907, at the request of Pedro R.
Melencio, another document was drawn changing the superficial configuration of the leased land
but preserving its original extension of 6,000 square meters. This change was made for the
purpose of giving Pedro R. Melencio space upon which to construct a house on the part
segragated from the original mass. In 1915 a new street, passing through the leased property, was
opened in Cabanatuan; and Pedro R. Melencio, acting for the lessors, reduced the monthly rent
from P25 to P20, to correspond with the reduction in the area of the leased land resulting from
the occupation of part of it by the street.lawphil.net

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At the time the lease was made there was living one Ramon Melencio, son of Julian Melencio
and Ruperta Garcia and brother of the heirs who signed the lease. Also before this time there had
been another brother named Emilio Melencio. But Emilio was dead and his only surviving son,
Jose P. Melencio, was a small boy then under the tutelage of his uncle Pedro R. Melencio. The
lease referred to is not and never has been questioned by any of the persons, or descendants of
the persons, who signed the instrument. Neither has it been questioned by Jose P. Melecio, son of
Emilio. Nor was the lease questioned in life by Ramon Melencio, who died in 1914; and the only
persons raising a question as to its validity are four of the five children of Ramon, the same being
the plaintiffs in this case.
By series of changes, not, necessary to be here recounted, the rights of the original lessee became
vested in the defendant, Dy Tiao Lay. At the time of the institution of the present action the
defendant, Dy Tia lay, had a rice mill, consisting of valuable buildings and improvements,
constructed on the land, and valued, it is alleged, at P160,000; but during the time of the
pendency of this action a fire occurred which seems to have destroyed the mill and
improvements with the exception of a camarin valued at some P15,000.
In November, 1920, the children of Julian Melencio and Ruperta Garcia executed a partial extra-
judicial partition of the properties belonging to their father's estate; and the land covered by this
lease was assigned to Liberata Macapagal, widow of Ramon Melencio, in right of her deceased
husband Ramon and as representative of the children. It will be noted that the land encumbered
by the lease was thus assigned precisely to the family of the deceased brother, Ramon Melencio,
who at the same time was the sole living brother whose name was not signed to the lease.
At the time the lease was executed, Pedro R. Melencio was in fact the manager of the common
ancestral estate belonging to himself and his brothers and sisters; and he continued as such until
1920. After the partition, or partial partition, of the fraternal estate in 1920, Liberata Macapagal
Viuda de Ramon Melencio succeeded to the office of manager, or guardian, of the estate of her
children, at least with respect to the parcel now in question.
It will be noted as an important fact that every dollar due as rent from the leased land was paid
by the lessee, from the time when rent first became due, and these payments were made first to
Pedro R. Melencio as manager of the common estate pertaining to himself and his brothers and
sisters, until 1920, when the rents began to be paid to Liberata Macapagal in the right to herself
and children. In April, 1926, Liberata ceased to collect the rent, and in May, thereafter, she
refused to accept payment of the monthly instalment of rent then due. For this reason the
defendant has been making a consignation of the corresponding rent for the benefit of the lessors
in the office of the provincial treasurer. No question is made that during the life of Ramon
Melencio he received his share of the monthly rental from the property in question; nor is there
any question that thereafter his widow and children received their share of the same until the
property was assigned in partition to Liberata Macapagal and her children, after which they
received all of the rent, until Liberata refused longer to accept it.
The undersigned concur in the proposition that the lease signed in 1905 was not per se binding
on Ramon Melencio, first, because he was not a party to that lease; and, secondly, because the

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making of a lease for twenty years, extendible under certain circumstances for a second and third
period of equal duration, was an act of rigorous alienation and not a mere act of management and
enjoyment such as is contemplated in article 398 of the Civil Code. (Sentencia, June
1,1909; Ruiz, Cod. Civ., vol. 4. p. 502) Neither do we pause to argue that the contract might have
been considered valid under the doctrine of this court stated in Eleizegui vs. Manila Lawn Tennis
Club (2 Phil., 309). At any rate the lease did not purport to bind Ramon, and he was not even
mentioned therein as one of the coowners.
But it is to be noted that none of the parties signatory to the lease have at any time sought to
abrogate the contract; and some of the children of Ramon Melencio only are before the court as
actors in this case seeking to set the contract aside. Under these circumstances the undersigned
are of the opinion that Ramon Melencio was at the time of his death bound by the lease, from his
having participated for years in the benefits derived from the contract, and that his children, who
derive their rights from him, are likewise bound.
It is well established that an estate in land may be virtually transferred from one man to another
without a writing, by the failure of the owner to give notice of his title to the purchaser under
circumstances where the omission to do so would operate as a fraud (Kirk vs. Hamilton, 102 U.
S., 68,77; 26 Law. ed., 79). This doctrine is so universally accepted that a bare reference to
general treatises on the subject of estopped is necessary (10 R.C. L., p.694; 21 C. J., pp.1154,
1160, 1206, 1207, 1209); and the estoppel is as effective with respect to a lease as it is with
respect to a deed of absolute conveyance (21 C.J., 1213).
In the case before us Ramon Melencio lived in the town where the land covered by this lease was
located, and every time he went abroad he must have seen the valuable improvements which the
original lessee, or his successors in interest, were erecting and had erected upon part of the
common ancestral estate. But from the date the lease was executed until his death Ramon
Melencio did nothing except to receive such portion of the rent as pertained to him. Under these
circumstances, even if his brother Pedro R. Melencio had conveyed the property away by deed of
absolute alienation, Ramon would have been legally bound. It is but natural that so long as he
lived after the lease was made, no complaint was ever registered by him against its validity.
And if Ramon Melencio was estoppel, of course his children are estopped, for their rights are of
a purely derivative character. In the case before us a period of more than twenty-one years
elapsed between the time the lease was made and the date when it was first called in question by
the widow.
But Manuel Melencio, the oldest of the heirs who are suing in this case, says that he did not
know the terms of the lease until a short while before this action was instituted, when he called
upon the widow of his uncle Pedro and found a copy of the lease after searching among his
uncle's papers. It is not surprising that this plaintiff, who was hardly more than a baby when the
lease was made, should not have known about the terms of the contract. But it was all the time
safely kept among the papers of his uncle Pedro, who, as already stated, was manager of the
common estate of the brothers and sisters. Ramon Melencio is now dead and of course cannot
speak as to whether he knew the terms of the agreement. But he should be presumed to have

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known its terms, because he was enjoying benefits from month to month under it, and he had the
means of knowledge immediately at hand, namely by recourse to a trusted brother in whose
custody the contract was preserved. In addition to this, we note that when partition was effected
about the year 1920 the fact that the property in question was subject to a lease in favor of the
defendant was noted in the document by which the property was assigned to Liberata Macapagal
and her children. The suggestion that the terms of the lease were unknown to the plaintiffs is of
little weight and of no legal merit. We note that the lease was never registered, but this fact
makes no difference in a lawsuit between the parties to the lease, or their successors in interest.

G.R. No. L-47996 May 9, 1941


ENGRACIA LAVADIA Y OTROS, demandantes y apelados,
vs.
ROSARIO COSME DE MENDOZA Y OTROS, demandados y apelantes.
Sres. L. Fernandez Lavadia y Aurelio Palileo en representacion de los apelados.
Sres. Ortega y Ortega en representacion de los apelantes.
DIAZ, J.:
Objeto de litigo entre los demandantes y los demandados en el Juzgado de Primera Instancia de
Laguna, fueron la posesion y custodia de ciertas alhajas que unas seis señoras piadosas del
municipio de Pagsanjan, Laguna, llamadas Martina, Matea, Isabel, Paula, Pia y Engracia
apellidadas todas Lavadia, habian mandado confeccionaren 1880, con dinero propio, para
adornor y engalanar con ellas la Imagende Nuestra Señora de Guadalupe, patrona del
mencionado municipio, reteniendo ellas para si, la propiedad de las mismas no cediendo sino
solamente su uso a la referida Imagen, para el indicado fin. Los demandantes y los demandados,
con excepcion de Engracia Lavadia que era una de las seis, son descendientes de las otras cinco
primitivas dueñas de las alhajas de que se trata. Porque la demandada Rosario Cosme de
Mendoza que es una de las descendientes de Paula Lavadia, que tuvo ultimamente la custodia de
aquellas, quiso entragar la corona que constituia parte de las mismas, al Obispo Catolico de Lipa,
para que la tuviese en su poder pero sujeta al uso de la Imagen de Nuestra Señora de Guadalupe,
segun la voluntad de sus dueñas, los descendientes de las tres, (Isabel Lavadia, Matea Lavadia y
Martina Lavadia), Engracia Lavadia que son los demandantes, promovieron esta causa en el
Juzgado de su procedencia, para reclamar la posesion y custodia de todas las referidas alhajas.
Estas no son otras que las descritas en el parrafo 3 de la demanda.
El Juzgado decidio la causa en contra de los demandados, declarando que siendo los
demandantes dueños de cuatro sextas partes proindiviso de las alhajas objeto de cuestion, y los
demandados, de dos sextas partes solamente, aquellos tenian perfecto derecho a determiar quien
debia encargarse de su custodia; y que, habiendo ellos decidido encomendar esta esta a Engracia

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Lavadia, una de las primitiva dueñas, ordeno que la demandada Rosario Cosme de Mendoza
haga entrega de todas ellas a dicha demandante. Contra esta decision del Juzgado, interpusieron
apelacion los demandados, creyendo que el Juzgado erro (1) al declarar que la apelante Rosario
Cosme de Mendoza, y sus anticesores en la posesion de las referidas alhajas, no actuaron sino
solamente como depositarios, y no fiduciarios; (2) al declarar que los apelados son dueños de
cuatro sextas partes de aquellas, y que les compete por dicha razon ejercer el derecho de designar
a la persona a quien encomendar sucustodia; (3) al dejar de declarar que la apelante Rosario
Cosme de Mendoza, siendo condueña y fiduciaria de dichas alhajas no puede ser privada de su
administracion y custodia, excepto por razones que le incapacitan para ello, cuales son la de
ejecutar actos contrarios a la voluntad de sus primitivas dueñas, y la de disponer de las
mencionadas alhajas a su antojo; (4) al dejar de declarar que Pia Lavadia y sus descendientes,
hasta llegar a Rosario Cosme de Mendoza, que habian tenido la custodia y posesion de las
referidas alhajas, han desempeñado con fidelidad su cometido; y finalmente (5) al denegarles su
peticion para una nueva vista.
Para tener una idea cabal de los hechos, expongamoslos a continuacion, siguiendo el relato que
de los mismos hace el Juzgado a quo en su decision apelada, ya que no los discuten ni los
apelantes ni los apelados:
El objeto de las causa son las joyas de la imagen de la Virgen de Ntra. Sra. De Guadalupe, en el
municipio de Pagsanjan, Laguna, y consisten en una corona de oro incrustado con diamantes y
brillantes, una gargantilla de diamentes y brillantes, un cinturon incrustado tambien con
brillantes y diamantes, un collar de oro tambien completamente incrustado con brillantes, una
pulsera de oro incrustado con brillantes y diamentes, una plancha de plata dorada en donde se
colocan las joyas arriba mencionadas, y otras vairas piezas de oro o de plata dorada para la
decoracion de las indumentarias de dicha imagen de Ntra. Sra. de Guadalupe. Todas estas joyas
estan actualmente depositadas bajo llave en el Banco de las Islas Filipinas pues alli las habia
depositado la demandada Rosario Cosme de Mendoza.
La corona y las joyas arriba descritas fueron confeccionadas hacia el año 1880 a costa de seis
damas residentes del municipio de Pagsanjan, Laguna. Ellas eran las hermanas Paula Lavadia y
Pia Lavadia, las hermanas Martina Lavadia y Matea Lavadia, y las hermanas Isabel Lavadia y
Engracia Lavadia. Estas señoras contribuyeron alhajas que ellas tenian para la confecion de la
corona y con ellasse confeccionaron las joyas arriba descritas, contribuyendo tambien el dinero
con que se costeo la confecion de las mismas. Todas estas señoras y han fallecido, con excepcion
de la demandante Doña Engracia Lavadia Vda. De Fernandez. Los otros demandantes son los
herederos legales de Isabel Lavadia, Matea Lavadia y Martina Lavadia, mientras que la
demandada Rosario Cosme de Mendoza y sus codemandados son herederos legitimos y
descendientes de Paula Lavadia.
La corona y las joyas se mandaron confeccionar para el uso de la patrona titular del municipio de
Pagasanjan, Ntra.Sra. de Guadalupe. Cuando ya se habian terminado de confeccionar, sus duenas
convinieron en que dichas joyas se quedarian con la contribuyente Pia Lavadia. Esta tuvo bajo su
custodia dichas joyas hasta su muerte en 1882, cuando su hermana Paula Lavadia le sucedio en
la custodia de las mismas. A la muerte de paula Lavadia, de sucedio en el cuidado, conservacion

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y custodia de dichas joyas sumarido Pedro Rosales, y muerto este, su hija Paz Rosales, a su vez
le sucedio en dicha custodia, conservacion y cuidado. A la muerte de Paz Rosales, la corona y las
joyas pasaron a la custodia de su marido Baldomero Cosme. Despues de Baldomero Cosme,
dichas joyas pasaron a Manuel Soriano quien, a su vez, fue sucedido en la custodia, conservacion
y administracion por la aqui demandada Rosario Cosme de Mendoza. Todos los años desde 1880
hasta la fecha, las joyas en cuestion se usaban para decorar la imagen de Ntra. Sra. de Guadalupe
en Pagsanjan, y ninguno de los que han estado guardando o custodiando dichas joyas habia
pretendido poseerlas como dueño exclusivo. La demandada Rosario Cosme de Mendoza y sus
codemandados no pretenden ser dueños de las referidas alhajas. En efecto, en el intestado del
finado Baldomero Cosme, actuacion especial No. 5494 de este Juzgado de Primera Instancia,
dicha demandada y sus codemandados han manifestado al Juzgado de que nunca han tenido
pretensiones de reclamar el dominio de dichas joyas ni parte alguna de las mismas.
(Veanse Exhibitos B-2 by B-3.)
El 9 de febrero de 1938, la demandada Rosario Cosme de Mendoza, en su capacidad de
administradora del intestado del finado Baldomero Cosme, notifico a todas las personas
interesadas en dichas joyas que queria hacer entrega formal de dichas joyas al Sr. Obispo de Lina
el dia sabado siguiente, o sea, el 12 de febrero de 1938, informandolas que presenciaran el acto
de la entrega (Vease Exhibito 4). En efecto, el 12 de febrero de 1938, la demandada y su esposo
hicieron entrega formal de las joyas, otorgando el documento correspondiente a dicho efecto,
documento quese presento como Exhibit E de los demandantes y 2 de los demandados. No
estando los demandantes conformes con dicha entrega, unas seis personas y las demandantes en
esta causa otorgaron un documento, designando a la demandante Engracia Lavadia como
recamadora, quien tendria a su cuidado la corona y las alhajas en cuestion (Vease Exhibito 3).
Habiendo surgido la cuestion de quien debe tener bajo su custodia la corona y las joyas en
cuestion, y habiendo llegado este hecho a conocimiento del Obispo de Lipa, este, a su vez, en 21
de junio de 1938, otorgo una escritura renunciandola custodia y administracion de dichas corona
y alhajas (Veanse Exhibito D de los demandantes y 1 de los demandados).
Fundandose en los hechos relatados, el Juzgado declaro que el contrato habido entre las
primitivas dueñas de las alhajas en litigio y las primeras de ellas que tuvieron la custodia de las
mismas, fue el de deposito, segun queda de finido esta contrato en los articulos 1758 y siguientes
del Codigo Civil. Pia Lavadia primeramente, y despues Paula Lavadia y los descendientes de
esta ultima siendo una de ellos la apelante Rosario Cosme Mendoza, recibieron y poseyeron,
unos despues de otros, las referidas, solamente para fines de custodia; pues, como lo hace resaltar
el Juzgado en su decision, ni aquellas ni los ultimos usaron las mismas para su propio beneficio.
Si fue en virtud de un contrato de deposito como fueron recibidas las alhajas objeto de cuestion,
primeramente por Pia y Paula, y despues por los descendientes de la ultima incluyendo la
apelante Rosario Cosme de Mendoza, es claro que hay la obligacion de parte de esta de restituir
las mismas a sus dueños en cuanto las reclamen. Lo dispone asi el articulo 1766 del Codigo Civil
que dice:

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El depositario esta obligado a guardar la cosa y restuirla, cuando le sea pedida, al depositante, o a
sus causa habientes, o a la persona que hubiese sido designada en el contrato. Su responsabilidad
en cuanto a la guarda y la perdida de la cosa, se regira por lo dispuesto en el tit. I de este libro.
La restitucion debe hacerse con todos los frutos y las accesiones de la cosa depositada, si los
tiene, sin que le sea dado al depositario retenerla, como comenta Sanchez Roman, (IV Sanchez
Roman, 885), aun bajo el prexto de obtener compensacion de otros creditos o de indemnizarse de
gastos hechos para su conservacion.
Las dueñas primitavas de las alhajas de que se trata, convinieron en encomendar la custodia de
las mismas a algunasde ellas, reservandose experesamente para si su propiedad. Esto viene a
demostrar que la teoria de los apelantes de que el contrato que aquellas tuvieron no es de
deposito por que despues de todo, como dicen, no pueden considerarse las alhajas como de
pertenencia ajena con respecto a Rosario Cosme de Mendoza, porque ella desciende de una de
susprimitivas dueñas, no tiene fuerza, porque aun entre comuneros de una cosa, uno de ellos
puede ser depositario, y cuando lo es, esta sujeto a las mismas obligaciones impuestas por la ley
a todo depositario, respecto a la conservacion de la cosa con el cuidado, diligencia e interes de un
buen padre de familia.
Joint owner. The fact that the depositary is a joint owner of the res does not alter the degree of
diligence required of him. (18 C.J., 570).
Los apelados son descendientes y herederos legales de Isabel Lavadia, Matea Lavadia y Martina
Lavadia; y Engracia Lavadia, a quien designaron par hacerse cargo de la custodia de las alhajas
objeto de cuestion, es una de las primitivas dueñas de las mismas; y los apelantes son a su vez los
descendientes y herederos de Pia Lavadia y PaulaLavadia. No constando en ninguna parte due
las seis primitivasdueñas no contibuyeron en la confeccion o adquisicion de las alhajas tantas
veces mencionadas, en la misma proporcion, la conclusion mas razonable es — y esto sostenido
por una presuncion de ley, (Art, 393, Codigo Civil) —, que todas ellas prorratearon el costa de
las mismas pagando cada una, una cuota iqual. Si esto es cierto, entonces debemos aceptar la
conclusion del Juzgado de que los apelados son dueños de cuatro sextas partes de dicha alhajas,
y quelos apelantes no lo son sino solamente de las dos sextas partesrestantes. Por consiquiente,
habiendo decidido la mayoria que la constituyen los apelados, encomendar la custodia y
administracion de dichas alhajas para poder dar fiel cumplimiento a la voluntad de sus primitivas
dueñas, a la apelada Engracia Lavadia, la unica superviviente de las mismas, su decision debe
respetarse, porque para la administracion y mejor disfrute de la cosa comun, segun el articulo
398 del Codigo Civil, son obligatorios los acuerdos de la mayoria de los participes.
El argumento de que Rosario Cosme de Mendoza y sus antecesores han estado desempeñando
con fidelidad su cometidocomo depositarios, no arguye en favor de la proposicion de que no se
le debe retirar el deposito, porque el contrato de deposito es tal que permite al depositante retirar
del depositario la cosa depositada, en cualquier momento que quisiese, sobre todo, cuando el
ultimo, como en el caso de Rosario Cosme de Mendoza, ha ejecutado un acto contrario al
encargo recibido, encomendando o tratando de encomendar a otro, la custodia y administracion

IPRA EXCLUSIVE COMPILATION


de la cosa depositada, por su propia cuenta y sin el consentimiento de los depositantes o sus
herederos.
No habiendo hallado error alguno en la decision apelada del Juzgado a quo, por la presente, la
confirmamos, condenando a los apelantes a pagar las costas. Asi se ordena.

G.R. No. L-3404 April 2, 1951


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 co-
owner, Araneta, Inc.
The pertinent terms of the contract (Exh. 6) may be briefly stated as follows: The three co-
owners 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

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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 co-
owners 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

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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 Peña 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.

IPRA EXCLUSIVE COMPILATION


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:

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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 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.

IPRA EXCLUSIVE COMPILATION


G.R. No. 101522 May 28, 1993
LEONARDO MARIANO, AVELINA TIGUE, LAZARO MARIANO, MERCEDES SAN
PEDRO, DIONISIA M. AQUINO, and JOSE N.T. AQUINO, petitioners,
vs.
HON. COURT OF APPEALS, (Sixteenth Division), GRACE GOSIENGFIAO, assisted by
her husband GERMAN GALCOS; ESTER GOSIENGFIAO, assisted by her husband
AMADOR BITONA; FRANCISCO GOSIENGFIAO, JR., NORMA GOSIENGFIAO, and
PINKY ROSE GUENO, respondents.
The Baristers Law Office for petitioners.
Simeon T. Agustin for private respondents.

NOCON, J.:
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
Gosiengfiao 1 raising as issue the distinction between Article 10882 and Article 16203 of the
Civil Code.
The Court of Appeals summarized the facts as follows:
It appears on record that the decedent Francisco Gosiengfiao is the registered owner of a
residential lot located at Ugac Sur, Tuguegarao, Cagayan, particularly described as follows, to
wit:
"The eastern portion of Lot 1351, Tuguegarao Cadastre, and after its segregation now designated
as Lot 1351-A, Plan PSD-67391, with an area of 1,1346 square meters."
and covered by Transfer Certificate of Title No. T-2416 recorded in the Register of Deeds of
Cagayan.
The lot in question was mortgaged by the decedent to the Rural Bank of Tuguegarao (designated
as Mortgagee bank, for brevity) on several occasions before the last, being on March 9, 1956 and
29, 1958.
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.
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.

IPRA EXCLUSIVE COMPILATION


On February 7, 1964, third-party defendant Amparo Gosiengfiao-Ibarra redeemed the property
by paying the amount of P1,347.89 and the balance of P423.35 was paid on December 28, 1964
to the mortgagee bank.
On September 10, 1965, Antonia Gosiengfiao on her behalf and that of her minor 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, 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 this controversy. It appears
in the Deed of Sale dated August 15, 1966 that Amparo, Antonia, Carlos and Severino were
signatories thereto.
Sometime in 1982, plaintiff-appellant Grace Gosiengfiao learned of the sale of said property by
the third-party defendants. She went to the Barangay Captain and asked for a confrontation with
defendants Leonardo and Avelina Mariano to present her claim to said property.
On November 27, 1982, no settlement having been reached by the parties, the Barangay captain
issued a certificate to file action.
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 of Sale notarized by
Hilarion L. Aquino as Doc. No. 143, Page No. 19, Book No. V, Series of 1982.
On December 21, 1982, plaintiffs Grace Gosiengfiao, et al. filed a complaint for "recovery of
possession and legal redemption with damages" against defendants 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 defendants.
Defendants in their answer alleged that the plaintiffs has (sic) no cause of action 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 consequently became the sole owner of the said
property and thus validly sold the entire property to the defendants, and the fact that defendants
had already 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 with the third-
party defendants, their right of redemption had already been barred by the Statute of Limitations
under Article 1144 of the Civil Code, if not by laches.4
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
ownership or possession over the lot in question. The trial court further said that when the
subject property foreclosed and sold at public auction, the rights of the heirs were reduced to a
mere right 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.

IPRA EXCLUSIVE COMPILATION


Respondents' having failed to redeem the property from the bank or from Amparo G. Ibarra, lost
whatever rights the might have on the property.5
The Court of Appeals in its questioned decision reversed and set aside the ruling of the trial court
and declared herein respondents as co-owners of the property in the question. The Court of
Appeals said:
The whole controversy in the case at bar revolves on the question of "whether or not a co-owner
who redeems the whole property with her own personal funds becomes the sole owner of said
property and terminates the existing state of co-ownership."
Admittedly, as the property in question was mortgaged by the decedent, a co-ownership existed
among the heirs during the period given by law to redeem the foreclosed property. Redemption
of the whole property by a co-owner does not 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.
xxx xxx xxx
In the case at bar, it is undisputed and supported by records, that third-party 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 used was from her own personal funds
did not make her the exclusive owner of 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 purchased the said property from the mortgagee bank (highest, bidder in the 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 any co-ownership to speak of .6
The decision of the Court of Appeals is supported by a long line of case law which states that a
redemption by a co-owner within the period prescribed by law inures to the benefit of all the
other co-owners.7
The main argument of petitioners in the case at bar is that the Court of Appeals incorrectly
applied Article 1620 of the Civil Code, instead of Article 1088 of the same code which governs
legal redemption by co-heirs since the lot in question, which forms part of the intestate estate of
the late 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.
On that premise, petitioners further contend that the right of legal redemption was not timely
exercised by the private respondents, since Article 1088 prescribes that the same must be done
within the period of one month from the time they were notified in writing of the sale by the
vendor.
According to Tolentino, the fine distinction between Article 1088 and Article 1620 is that when
the 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

IPRA EXCLUSIVE COMPILATION


the other hand, if the sale is the hereditary right itself, fully or in part, in the abstract sense,
without specifying any particular object, the right recognized in Article 1088 exists.8
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
case of Conejero, et al., v. Court of Appeals, et al.9 wherein the Court adopted the principle that
the giving of a copy of a deed is equivalent to the notice as required by law in legal redemption.
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
Conejero was shown and given a copy of the deed of sale of the subject property. The Court in
that case stated that the furnishing of a copy of the deed was equivalent to the giving of a written
notice required by law. 11
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
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
Gosiengfiao, in her testimony, declared as follows:
Q. When you went back to the residence of Atty. Pedro Laggui were you able to see him?
A. Yes, I did.
Q. When you saw him, what did you tell?
A. I asked him about the Deed of Sale which Mrs. Aquino had told me and he also showed me a
Deed of Sale. I went over the Deed of Sale and I asked Atty. Laggui about this and he mentioned
here about the names of the legal heirs. I asked why my name is not included and I was never
informed in writing because I would like to claim and he told me to better consult my own
attorney.
Q. And did you go?
A. Yes, I did.
Q. What kind of copy or document is that?
A. It is a deed of sale signed by my mother, sister Amparo and my brothers.
Q. If shown to you the copy of the Deed of Sale will you be able to identify it?
A. Yes, sir.11
Thereafter, Grace Gosiengfiao explicitly stated that she was never given a copy of the said Deed
of Sale.
Q. Where did Don Mariano, Dr. Mariano and you see each other?

IPRA EXCLUSIVE COMPILATION


A. In the house of Brgy. Captain Antonio Bassig.
Q. What transpired in the house of the Brgy. Captain when you saw each other there?
A. Brgy. Captain Bassig informed my intention of claiming the 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 right to claim.
Q. And what was the reply of Don Mariano and Dr. Mariano to the information given to them by
Brgy. Captain Bassig regarding your claim?
A. He insisted that the lot is already his because of the Deed of Sale. I asked for the exact copy
so that I could show to him that I did not sign and he said he does not have a copy. 12
The above testimony was never refuted by Dr. Mariano who was present before Brgy. Captain
Bassig.
The requirement of a written notice has long been settled as early as in the case of Castillo
v. Samonte,13 where this Court quoted the ruling in Hernaez v. Hernaez, 32 Phil., 214, thus:
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 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 reasons to specify in Article 1088 of the New Civil Code that the said notice be
made in writing for, under the old law, a verbal notice or information was sufficient. 14
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
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 redemption at the first opportunity they have by tendering the repurchase price to petitioners.
The 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:
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 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 within the prescriptive period provided in the Statute of Limitation. 16
The ruling in Castillo v. Samonte; supra, was reiterated in the case of Garcia
v. Calaliman, where We also discussed the reason for the requirement of the written notice. We
said:
Consistent with aforesaid ruling, in the interpretation of a related provision (Article 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

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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
petitioners.
SO ORDERED.
Narvasa, C.J., Padilla and Nocon, JJ., concur.

[G.R. No. 102900. October 2, 1997]


MARCELINO ARCELONA, TOMASA ARCELONA-CHIANG and RUTH ARCELONA,
represented by their attorney-in-fact, ERLINDA PILE, petitioner vs. COURT OF
APPEALS, REGIONAL TRIAL COURT OF DAGUPAN CITY, Branch XL, and MOISES
FARNACIO, respondent.
DECISION
PANGANIBAN, J.:
What are the remedies and the grounds therefor to invalidate a final and executory
judgment? May extraneous matters, not found in the records of the original case, be used to void
such final judgment? Procedurally, may an independent action for annulment of a decision filed
in the Court of Appeals, prosper in the face of a claim that the remedy of intervention could have

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been availed of in the regional trial court during the original proceedings? Are all the co-
owners pro indiviso of a real property indispensable parties? Does the non-inclusion of some of
such co-owners in a suit involving tenancy over said property constitute sufficient ground to
nullify the final decision rendered in such case?
The Case
These are the main questions raised in this petition for review of the Decision[1] in CA G.R. SP
No. 24846 promulgated on July 16, 1991 by the Court of Appeals[2] denying petitioners plea for
annulment of a final and executory judgment rendered by the Regional Trial Court of Dagupan
City, Branch 40, in Civil Case No. D-7240, and the Resolution[3] promulgated on November 21,
1991 by the appellate court denying their motion for reconsideration.
The Facts
Petitioners Marcelino Arcelona, Tomasa Arcelona-Chiang and Ruth Arcelona are natural-born
Filipinos who are now naturalized Americans residing in California, U. S.A. Petitioner Ruth
Arcelona is the surviving spouse and legal heir of the deceased Benedicto Arcelona, brother of
Marcelino and Tomasa. Together with their three sisters - Pacita Arcelona-Olanday, Maria
Arcelona-Arellano and Natividad Arcelona-Cruz (hereinafter collectively referred to as
Olanday, et al.) -- petitioners are co-owners pro-indiviso of a fishpond which they inherited from
their deceased parents.[4] The six Arcelonas (two brothers and four sisters) are named as co-
owners in Transfer Certificate of Title No. 34341 which evidences ownership over the fishpond.
On March 4, 1978, a contract of lease over the fishpond was executed between Cipriano Tandoc
and Olanday, et al. The lease contract was for a period of three (3) years but was renewed up to
February 2, 1984.[5]
Private Respondent Moises Farnacio was appointed in turn by Tandoc as caretaker-tenant of the
same fishpond, effective on the date the contract of lease was executed. After the termination of
the lease contract, the lessee (Tandoc) surrendered possession of the leased premises to the
lessors, Olanday, et al.
Three days thereafter, on February 7, 1984, Private Respondent Farnacio instituted Civil Case D-
7240 for peaceful possession, maintenance of security of tenure plus damages, with motion for
the issuance of an interlocutory order against Olanday, et al., before Respondent Regional Trial
Court of Dagupan City, Branch 40. The case was intended to maintain private respondent as
tenant of the fishpond.[6]
On October 31, 1984, the trial court rendered a decision in favor of private respondent, the
dispositive portion of which reads:[7]
WHEREFORE, in the light of the foregoing considerations, this Court hereby renders judgment
as follows; to wit:
1. Declaring and recognizing Moises Farnacio as tenant-caretaker over the fishpond in question
located at Lomboy District, Dagupan City;

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2. Ordering the defendants to maintain plaintiff in the peaceful possession and cultivation of said
fishpond, with all the rights accorded and obligations imposed upon him by law;
3. Ordering the Branch Clerk of Court to withdraw and deliver to the plaintiff all the amounts
deposited with this Court; and
4. All others claims of the parties are hereby denied for lack of merit.
Olanday, et al. elevated the decision to the then Intermediate Appellate Court (IAC)[8] which
affirmed with slight modification the decision of the trial court on May 31, 1985. On appeal, this
Court[9] sustained the IAC decision in G.R. No. 71217. On May 25, 1991, after remand of the
case to the court of origin, private respondent was placed in possession of the entire property
covered by TCT 34341.
Petitioners then filed with Respondent Court of Appeals a petition for annulment of the aforesaid
judgment against private respondent and the implementing sheriff.[10] The case was docketed as
CA GR SP No. 24846. On May 8, 1991, Respondent Court issued a resolution directing
petitioners to implead as party defendant the Regional Trial Court of Dagupan City, Branch 50,
Dagupan City.[11] Respondent Court promulgated in due course the assailed Decision and
Resolution.
Dissatisfied, petitioners lodged this petition for review before us on May 10, 1992. On August
24, 1992, due course was granted to the petition and the parties filed their respective memoranda.
The Issues
In their Memorandum dated November 7, 1992, petitioners allege that Respondent Court of
Appeals has committed the following errors:[12]
I. The Respondent Court of Appeals erred in ruling that the sole and only ground for annulment
of judgment is extrinsic fraud.
II. The Respondent Court of Appeals erred when it failed to consider that lack of due process and
jurisdiction over the persons of the petitioners are also valid grounds for annulment of judgment.
III. In annulment of judgment the grounds should be based solely on the records of the case. It is
then an error for the Respondent Court of Appeals to consider matters extraneous to the records
of the case.
IV.The Respondent Court of Appeals erred in ruling that petitioners should have intervened in
the proceedings for issuance of writ of execution before the lower court.
V. The Respondent Court of Appeals erred in ruling that the petitioners are estopped or are guilty
of laches in questioning the decision of the lower court.
The Court believes that these five assigned errors may be condensed into three issues:
(1) May a final judgment be annulled on the ground of lack of jurisdiction (over the subject
matter and/or over the person of indispensable parties) and denial of due process, aside from
extrinsic fraud?

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(2) May extraneous matters, not found in the records of the original case, be used in voiding or
defending the validity of such final judgment?
(3) Procedurally, will an independent action for annulment of the decision of the regional trial
court (which was affirmed both by the Court of Appeals and the Supreme Court) filed before the
Court of Appeals prosper, or is intervention before the court of origin the only remedy?
The Courts Ruling
The petition is meritorious.
First Issue: Grounds for Annulment of Final Judgment
Petitioners contend that Respondent Court of Appeals erred in decreeing the all-sweeping and
categorical pronouncement that the sole and only ground for annulment of judgment is extrinsic
fraud, and in thereby ignoring various Supreme Court rulings that a final judgment may also be
annulled for a) lack of jurisdiction over the subject matter; b) lack of jurisdiction over the
persons of necessary or indispensable parties; and c) lack of due process.[13] Petitioners argue
that, being co-owners of the subject property, they are indispensable parties.[14] Inasmuch as they
were not impleaded in Civil Case D-7240, the questioned judgment of the lower court is void
insofar as the petitioners are concerned for want of jurisdiction over their persons and [for] lack
of due process.[15] Petitioners do not see any reason why a person who was not made a party at
all could not assail the same proceedings involving his property and affecting his rights and
interests.[16]
Petitioners further maintain that since the case involves the personal status of the private
respondent, or relates to, or the subject of which is property within the Philippines, then the
petitioners as non-residents are entitled to extra-territorial service,[17] which is a due process
requirement. As they were never served with summons, to bar them [from] questioning the
proceedings of the lower court will be compounding injustice x x x. If a party to a case can assail
the proceedings for defective service of summons, the same right should be afforded to a person
who was not made a party at all.[18]
Public respondent disposed of petitioners above contention in this wise:[19]
First. Annulment of judgment, as the Supreme Court had occasion to rule, rests on a single
ground: extrinsic fraud (Canlas vs. Court of Appeals, 170 [sic] SCRA 160, 170). Islamic Da Wah
Council of the Phils. vs. Court of Appeals, 178, 186, citing Anuran vs. Aquino, 38 Phil. 29,
emphatically announced that there can be no question as to the right of any person adversely
affected by a judgment to maintain an action to enjoin its enforcement and to have it declared a
nullity on the ground of fraud and collusion practiced in obtaining the judgment when such fraud
is extrinsic or collateral to the matters involved in the issues raised at the trial which resulted in
such judgment.
xxxxxxxxx
xxxxxxxxx

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Clearly, there is nothing in the petition that extrinsic fraud, as Macabingkil defines it, indeed
vitiated the proceedings during the trial of Civil Case No. D-7240.
The essence of the instant petition is worded by the petitioners as follows:
The common property involved in this case is covered by a Torrens Title, specifically
mentioning the co-owners thereof. To bind the entire property and the owners thereof, all the
registered owners must be impleaded. The private respondent ONLY IMPLEADED the three co-
owners, excluding the petitioners herein. For the petitioners to be bound by the questioned
decision, such would really be a derogation of their constitutional right to due process. The
questioned decision, too, suffers the fatal defect of utter want of jurisdiction.
Accordingly, since the petition for annulment of judgment is not based on the ground of extrinsic
fraud, the petition suffers from a basic and fundamental infirmity that deprives petitioners of a
valid cause of action against respondents herein.
We hold that the Court of Appeals erred in limiting the ground(s) for annulment of judgment to
only one, namely, extrinsic fraud. While it is true that in the cited cases of Canlas vs. CA[20]and
Islamic Da Wah Council of the Philippines. vs. Court of Appeals,[21] this Court said that a
judgment may be annulled on the ground of extrinsic or collateral fraud,[22] we should hasten to
add that in Macabingkil vs. Peoples Homesite and Housing Corporation,[23] where the above
ruling on annulment of judgment was based, we held that there are really three ways by which a
final judgment may be attacked: [24]
Under existing rules, there are three (3) ways by which a final and executory judgment may be
set aside. The first is by petition for relief from judgment under Rule 38 of the Revised Rules of
Court, when judgment has been taken against the party through fraud, accident, mistake or
excusable negligence, in which case the petition must be filed within sixty (60) days after the
petitioner learns of the judgment, but not more than six (6) months after such judgment was
entered. The second is by direct action to annul and enjoin the enforcement of the judgment. This
remedy presupposes that the challenged judgment is not void upon its face, but is entirely regular
in form, and the alleged defect is one which is not apparent upon its face or from the recitals
contained in the judgment.[fn: Abbain v. Chua, 22 SCRA 798; Cadano v. Cadano, 49 SCRA 33;
Anuran v. Aquino, 38 Phil. 329] As explained in Banco Espaol-Filipino v. Palanca,[fn: 37 Phil.
291, 949] under accepted principles of law and practice, long recognized in American courts, the
proper remedy in such case, after the time for appeal or review has passed, is for the aggrieved
party to bring an action enjoining the judgment, if not already carried into effect; or if the
property has already been disposed of, he may institute suit to recover it. The third is either a
direct action, as certiorari, or by a collateral attack against the challenged judgment (which is) is
void upon its face, or that the nullity of the judgment is apparent by virtue of its own recitals. As
aptly explained by Justice Malcolm in his dissent in Banco Espaol-Filipino v. Palanca, supra, A
judgment which is void upon its face, and which requires only an inspection of the judgment roll
to demonstrate its want of vitality is a dead limb upon the judicial tree, which should be lopped
off, if the power so to do exists.

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Since the aforementioned decision in Civil Case No. Q-5866 is not void upon its face, it may
only be annulled by direct action on the ground of fraud.
It is only extrinsic or collateral fraud, as distinguished from intrinsic fraud, however, that can
serve as a basis for the annulment of judgment. [Aring v. Original, 6 SCRA 1021, 1025;
Velasco v. Velasco, 2 SCRA 736] Fraud has been regarded as extrinsic or collateral, within the
meaning of the rule, where it is one the effect of which prevents a party from having a trial, or
real contest, or from presenting all of his case to the court, or where it operates upon matters
pertaining, not to the judgment itself, but to the manner in which it was procured so that there is
not a fair submission of the controversy.[46 Am. Jur. 913] x x x.
It is clear then that to set aside a final and executory judgment, there are three remedies available
to a litigant: first, a petition for relief from judgment under Rule 38 of the Rules of Court [25] on
grounds of fraud, accident, mistake and excusable negligence filed within sixty (60) days from
the time petitioner learns of the judgment but not more than six (6) months from the entry
thereof; second, a direct action to annul the judgment on the ground of extrinsic fraud; and third,
a direct action for certiorari or collateral attack to annul a judgment that is void upon its face or
void by virtue of its own recitals. Thus, Macabingkil did not preclude the setting aside of a
decision that is patently void where mere inspection of the judgment is enough to demonstrate its
nullity on grounds of want of jurisdiction or non-compliance with due process of law. This
doctrine is recognized in other cases:[26]
x x x. There is no question that a final judgment may be annulled. There are, however, certain
requisites which must be established before a judgment can be the subject of an action for
annulment. Under the present procedure, aside from the reliefs provided in these two sections
(Secs. 1 & 2, Rule 38), there is no other means whereby the defeated party may procure final and
executory judgment to be set aside with a view to the renewal of the litigation, unless (a) the
judgment is void for want of jurisdiction or for lack of due process of law, or (b) it has been
obtained by fraud. (I Morans Rules of Court 1950 Ed., p. 697, citing Anuran v. Aquino, 38 Phil.
29; Banco Espaol-Filipino v. Palanca, 37 Phil. 921). Reason of public policy which favors the
stability of judicial decisions are (sic) mute in the presence of fraud which the law abhors
(Garchitorena vs. Sotelo, 74 Phil. 25).
On the one hand, extrinsic fraud is the ground to annul a voidable final judgment; the declaration
of nullity of a patently void final judgment, on the other, is based on grounds other than extrinsic
fraud. To say, then, that petitioners can avail themselves only of the ground of extrinsic fraud
and no other is to fail to appreciate the true meaning and ramifications of annulment/nullity.
Jurisdiction is conferred by law. Its exercise must strictly comply with the legal requisites;
otherwise, a challenge on the ground of lack of jurisdiction may be brought up anytime. Such
jurisdiction normally refers to jurisdiction over the subject. As an example, in a case involving
the issuance of a new owners duplicate certificate of title the original of which was lost, stolen or
destroyed, the court must strictly comply with the requisites of Section 109 of P.D. 1529;
otherwise, its jurisdiction may be attacked anytime. Thus, we ruled in New Durawood Co.
Inc. vs. Court of Appeals:[27]

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In Demetriou vs. Court of Appeals, et al.,[238 SCRA 158, at 162 (November 14, 1994)] this
Court ruled:
In Serra Serra v. Court of Appeals (195 SCRA 482 [1991]), on facts analogous to those involved
in this case, this Court already held that if a certificate of title has not been lost but is in fact in
the possession of another person, the reconstituted title is void and the court rendering the
decision has not acquired jurisdiction. Consequently the decision may be attacked any time.
In the instant case, the owners duplicate certificates of title were in the possession of Dy Quim
Pong, the petitioners chairman of the board and whose family controls the petitioner
corporation. Since said certificates were not in fact lost or destroyed, there was no necessity for
the petition filed in the trial court for the Issuance of New Owners Duplicate Certificates of Title
x x x, In fact, the said court never acquired jurisdiction to order the issuance of new
certificates. Hence, the newly issued duplicates are themselves null and void.
It is obvious that this lapse happened because private respondents and respondent judge failed to
follow the procedure set forth in P.D. No. 1529 which, as already stated, governs the issuance of
new owners duplicate certificates of title.
Section 109 of the said law provides, inter alia, that due notice under oath of the loss or theft of
the owners duplicate certificate shall be sent by the owner or by someone in his behalf to the
Register of Deeds x x x (italics supplied). In this case, while an affidavit of loss was attached to
the petition in the lower court, no such notice was sent to the Register of Deeds.
Private respondents tried to convince the Court that by their failure to locate Francis Dytiongsee,
they had no other recourse but to file a petition for reconstitution. Sec. 107 of the P.D. 1529 ,
however, states that the remedy, in case of the refusal or failure of the holder -- in this case, the
petitioner -- to surrender the owners duplicate certificate of title, is a petition in court to compel
surrender of the same to the Register of Deeds, and not a petition for reconstitution.
Ineluctably, a judgment rendered without jurisdiction over the subject matter is void. As we
elucidated in Leonor vs. CA:[28]
Clearly and unequivocally, the summary procedure under Rule 108, and for that matter under
Art. 412 of the Civil Code, cannot be used by Mauricio to change his and Virginias civil status
from married to single and of their three children from legitimate to illegitimate. Neither does the
trial court, under said Rule, have any jurisdiction to declare their marriage null and void and as a
result thereof, to order the local civil registrar to cancel the marriage entry in the civil
registry. Further, the respondent trial judge gravely and seriously abused his discretion in
unceremoniously expanding his very limited jurisdiction under such rule to hear evidence on
such a controversial matter as nullity of a marriage under the Civil Code and/or Family Code, a
process that is proper only in ordinary adversarial proceedings under the Rules.
Jurisdiction over the Persons
of Indispensable Parties

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True, the above dispositions refer to jurisdiction over the subject matter. Basic considerations of
due process, however, impel a similar holding in cases involving jurisdiction over the persons of
indispensable parties which a court must acquire before it can validly pronounce judgments
personal to said defendants. Courts acquire jurisdiction over a party plaintiff upon the filing of
the complaint. On the other hand, jurisdiction over the person of a party defendant is assured
upon the service of summons in the manner required by law or otherwise by his voluntary
appearance. As a rule, if a defendant has not been summoned, the court acquires no jurisdiction
over his person, and a personal judgment rendered against such defendant is null and void.[29] A
decision that is null and void for want of jurisdiction on the part of the trial court is not a decision
in the contemplation of law and, hence, it can never become final and executory.[30]
Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest
without whom there can be no final determination of an action. As such, they must be joined
either as plaintiffs or as defendants. The general rule with reference to the making of parties in a
civil action requires, of course, the joinder of all necessary parties where possible, and the
joinder of all indispensable parties under any and all conditions, their presence being a sine qua
non for the exercise of judicial power.[31] It is precisely when an indispensable party is not before
the court (that) the action should be dismissed.[32] The absence of an indispensable party renders
all subsequent actions of the court null and void for want of authority to act, not only as to the
absent parties but even as to those present.[33]
Petitioners are co-owners of a fishpond. Private respondent does not deny this fact, and the Court
of Appeals did not make any contrary finding. The fishpond is undivided; it is impossible to
pinpoint which specific portion of the property is owned by Olanday, et al. and which portion
belongs to petitioners. Thus, it is not possible to show over which portion the tenancy relation of
private respondent has been established and ruled upon in Civil Case D-7240. Indeed, petitioners
should have been properly impleaded as indispensable parties.Servicewide Specialists,
Incorporated vs. Court of Appeals[34] held that no final determination of a case could be made if
an indispensable party is not impleaded:
x x x. An indispensable party is one whose interest will be affected by the courts action in the
litigation, and without whom no final determination of the case can be had. The partys interest in
the subject matter of the suit and in the relief sought are so inextricably intertwined with the
other parties that his legal presence as a party to the proceeding is an absolute necessity. In his
absence there cannot be a resolution of the dispute of the parties before the court which is
effective, complete, or equitable.
Formerly, Article 487 of the old Civil Code provided that any one of the co-owners may bring an
action in ejectment. It was subsequently held that a co-owner could not maintain an action in
ejectment without joining all the other co-owners. Former Chief Justice Moran, an eminent
authority on remedial law, explains:[35]
x x x. As held by the Supreme Court, were the courts to permit an action in ejectment to be
maintained by a person having merely an undivided interest in any given tract of land, a
judgment in favor of the defendants would not be conclusive as against the other co-owners not

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parties to the suit, and thus the defendant in possession of the property might be harassed by as
many succeeding actions of ejectment, as there might be co-owners of the title asserted against
him. The purpose of this provision was to prevent multiplicity of suits by requiring the person
asserting a right against the defendant to include with him, either as co-plaintiffs or as co-
defendants, all persons standing in the same position, so that the whole matter in dispute may be
determined once and for all in one litigation.
Contrariwise, it is logical that a tenant, in an action to establish his status as such, must implead
all the pro-indiviso co-owners; in failing to do so, there can be no final determination of the
action. In other words, a tenant who fails to implead all the co-owners cannot establish with
finality his tenancy over the entire co-owned land.
Co-owners in an action for the security of tenure of a tenant are encompassed within the
definition of indispensable parties; thus, all of them must be impleaded. As defined:[36]
An indispensable party is a party who has such an interest in the controversy or subject matter
that a final adjudication cannot be made, in his absence, without injuring or affecting that
interest, a party who has not only an interest in the subject matter of the controversy, but also has
an interest of such nature that a final decree cannot be made without affecting his interest or
leaving the controversy in such a condition that its final determination may be wholly
inconsistent with equity and good conscience. It has also been considered that an indispensable
party is a person in whose absence there cannot be a determination between the parties already
before the court which is effective, complete, or equitable. Further, an indispensable party is one
who must be included in an action before it may properly go forward.
A person is not an indispensable party, however, if his interest in the controversy or subject
matter is separable from the interest of the other parties, so that it will not necessarily be directly
or injuriously affected by a decree which does complete justice between them. Also, a person is
not an indispensable party if his presence would merely permit complete relief between him and
those already parties to the action, or if he has no interest in the subject matter of the action. It is
not a sufficient reason to declare a person to be an indispensable party that his presence will
avoid multiple litigation.
Clearly, the decision in Civil Case D-7240 cannot bind petitioners and cannot adjudicate the
entire co-owned property, not even that portion belonging to Olanday et al., ownership of the
property being still pro-indiviso. Obviously, the failure to implead petitioners barred the lower
court from making a final adjudication. Without the presence of indispensable parties to a suit or
proceeding, a judgment therein cannot attain finality.[37]
Ergo, res inter alios judicatae nullum aliis praejudicarium faciunt.[38] Thus, the Court, through
former Chief Justice Marcelo B. Fernan, held that a person who was not impleaded in the
complaint cannot be bound by the decision rendered therein, for no man shall be affected by a
proceeding in which he is a stranger[39]
Admittedly, in this case, the want of jurisdiction of the trial court in rendering its decision in
Civil Case No. D-7240 is not patent on the face of said judgment. However, there were glaring

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documentary and testimonial pieces of evidence referred to by the trial court in its decision
which should have prompted it to inquire further whether there were other indispensable parties
who were not impleaded. These facts and circumstances should have forewarned the trial court
that it had not acquired jurisdiction over a number of indispensable parties. In American
jurisprudence, the nullity of a decision arising from lack of jurisdiction may be determined from
the record of the case, not necessarily from the face of the judgment only.[40] We believe that this
rule should be applied to this case, considering that in the assailed trial courts decision, referrals
were made to crucial evidence which if scrutinized would readily reveal that there were
indispensable parties omitted.
First, the decision referred to the subject property as Lot No. 3312 of the Cadastral
Survey.[41] This lot was particularly described in private respondents Complaint dated February
6, 1984 filed in Civil Case D-7240.[42] Obviously such description was copied by private
respondent from the transfer certificate of title over the subject fishpond issued on August
12, 1975naming all the co-owners, including the herein petitioners and the fact of their foreign
residences, thus:[43]
IT IS HEREBY CERTIFIED that certain land situated in the City of Dagupan, formerly in the
Province of Pangasinan bounded and described as follows:
A parcel of land (Lot 3312 of the Cadastral Survey of Dagupan), situated in the City of
Dagupan. x x x
is registered in accordance with the provisions of the Land Registration Act in the name
of PACITA ARCELONA, married to Miguel Ulanday; TOMASA ARCELONA, married to
Tung Ming Chiang; MARCELINO V. ARCELONA, married to Soledad Tiongco; MARIA V.
ARCELONA, married to Oreste Arellano; BENEDICTO V. ARCELONA, married to Ruth
Suget; and NATIVIDAD ARCELONA, married to Agrimero Cruz; all of legal age, Filipinos, the
second and fifth named residents of Los Angeles, California, U.S.A., third & fourth of Manila;
first of Villasis, Pangasinan & the last named of Lingayen, Pangasinan as owner thereof in fee
simple, subject to such of the incumbrances mentioned in Section 39 of said Act as may be
subsisting, and to
xxxxxxxxx
xxxxxxxxx
Entered at the City of Dagupan
Philippines, on the 12th day of
August in the year nineteen hundred
and seventy-five at 4:00 p m.
(Underscoring supplied).
Considering that private respondent was suing to establish his status as a tenant over the subject
fishpond, the responsibility for impleading all the indispensable parties undeniably rested on him

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as provided under Rule 3 of the Rules of Court. Section 2 of Rule 3 requires that every action
must be prosecuted and defended in the name of the real party in interest. All persons having an
interest in the subject of the action and in obtaining the relief demanded shall be joined as
plaintiffs. Further, Section 7 of the same rule states that (p)arties in interest without whom no
final determination can be had of an action shall be joined either as plaintiffs or defendants.
Second, Respondent Court of Appeals ruled that private respondent in his motion to dismiss
(before said Court) alleged that petitioners knew of the lessee as revealed by the testimony of
Pacita Olanday, one of the defendants in Civil Case No. D-7240 and a sister of petitioners. (TSN,
pp. 15-16, hearing of October 2, 1984, Civil Case No. D-7240). That being so, why did private
respondent fail to include petitioners as defendants in the case below? It should be noted that the
lease contract was between Cipriano Tandoc and Olanday, et al. Private respondent, a caretaker-
tenant of Tandoc, knew or should have known that there were co-owners other than Olanday, et
al. And even conceding arguendo that petitioners had authorized Olanday, et al. to enter into a
lease contract with Tandoc, this fact did not authorize the latter to represent petitioners in the
civil case he brought. Under Rule 9, Section 9 of the Rules of Court, the pleader is required to set
forth the names, if known to him, of persons who ought to be parties, if complete relief is to be
accorded to those who are already parties but who are not joined; and to state why they have
been omitted. Surely, he brought suit to establish his status as a tenant. It is thus his
responsibility to state the names of all the persons against whom he wants to establish his status
as tenant.
Third, both the private respondent and the trial court knew of the obvious omission of petitioners
as party defendants. Telling is the fact that, by reciting part of the transcript of stenographic
notes, private respondent himself provided clear evidence in his memorandum that he knew of
the existence of other co-owners who were not impleaded in his case against Olanday et al.[44]
As admitted by Pacita Olanday, one of the defendants in Civil Case No. D-7240, the petitioners
know of the lease with Cipriano Tandoc; they were authorized to lease the shares of the
petitioners. Here is the testimony of Pacita Olanday:
ATTY. VINLUAN:
Q. You made mentioned that you were authorized by your brothers and sister who are (sic)
residing in the United States to enter into a contract. Did these brothers and sister of yours make
any special power of attorney authorizing you to that effect?
xxxxxxx
A I talked with my brothers when they balik-bayan, they said I will make an agreement. (tsn.
October 2, 1984 pp. 15 and 16 - CV# D-7240).
He also knew that in executing the lease, Pacita Olanday represented only her sisters (Maria and
Natividad) who were residing in the Philippines. Definitely, at the time of the execution of the
contract, she had no brother residing in the Philippines because her only brothers, Marcelino and
Benedicto Arcelona, (the latter now deceased and represented in this case by Petitioner Ruth

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Arcelona) were living in California. This fact can be deduced from the recitals of the RTC
decision:[45]
It is undisputed in the records that the defendants (referring to Olanday, et al.) are co-owners and
civil law lessors of a fishpond otherwise known as Lot No. 3312 of the Cadastral Survey of
Dagupan City; that as owners, they entered into a Contract of Lease (Exh. 1) with one Cipriano
Tandoc dated March 4, 1978 for a term of three (3) years from February 2, 1982, which contract
was renewed for another two (2) years up to February 2, 1984. On the 31st of January, 1984,
Exhibit 3, an Affidavit of Surrender of Rights and Possession of Lessee over a Fishpond was
executed between Cipriano Tandoc and Pacita Olanday who signed for herself and in behalf of
her two (2) sisters. Plaintiff Moises Farnacio was however, instituted as caretaker-tenant over the
same fishpond by Cipriano Tandoc on the date of the Contract of Lease was entered into between
the owners-lessors and Cipriano Tandoc. The private agreement (Exh. D) signed by Cipriano
Tandoc and Moises Farnacio is, however, assailed in a criminal case for falsification in the
Fiscals Office. (Underscoring supplied)
In fact, only these co-owners who are residing in the Philippines were joined as defendants in
Civil Case D-7240. But the mention of Pacitas relatives who were residing abroad should have
made the trial court aware of the existence of indispensable parties who were not yet impleaded.
Despite this knowledge of the apparent defect in the complaint and in its jurisdiction, the trial
court did not take the initiative to implead petitioners as defendants or to order private
respondent to do so, contrary to the clear mandate of Rule 3, Sec. 11 of the Rules of
Court[46] which provides:
Sec. 11. Misjoinder and non-joinder of parties. -- Misjoinder of parties is not ground for
dismissal of an action. Parties may be dropped or added by order of the court on motion of any
party or on its own initiative at any stage of the action and on such terms as are just. Any claim
against a party may be severed and proceeded with separately.
The foregoing testimony on the existence of other co-owners was a clear signal that
indispensable parties had not yet been impleaded. Indeed, this knowledge should have put the
private respondent and the trial court on guard. The burden to implead or to order the impleading
of indispensable parties is placed on private respondent and on the trial court, respectively.Since
no evidence was presented to prove that petitioners were aware of the civil case filed against
Olanday et al., they cannot be faulted for not intervening therein.
In sum, we hold that the nullity of a judgment grounded on lack of jurisdiction may be shown not
only by what patently appears on the face of such decision but also by documentary and
testimonial evidence found in the records of the case and upon which such judgment is based.
Before ending our discussion on the first issue, we must stress that the then Intermediate
Appellate Court and this Court, in affirming the RTC decision in Civil Case No. D-7240 which
we here nullify, had not been given the occasion to rule on the issue of the trial courts
jurisdiction over the persons of indispensable parties; verily, this question had not been raised
before the two appellate courts. The review of civil cases by appellate courts is confined only to

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the issues raised by the parties. Hence, appellate courts do not have the privilege or the
opportunity afforded the trial courts to consider matters beyond the specifically contested
issues, e.g., jurisdiction over indispensable parties, as in this case. Such lack of jurisdiction could
not have been known by the appellate courts, including this Court, as it was not patent from the
documents or submissions filed before them. The issue raised before the then Intermediate
Appellate Court and this Court was formulated in this wise: (t)he validity of private respondents
claim that he is a tenant of the petitioners fishpond, with security of tenure as such assured under
the law, is the basic question presented in this appeal.[47] We underscore the fact that the issue of
whether all the indispensable parties had been validly impleaded, if at all, had not been raised at
that time. In any event, whether the indispensable parties were actually impleaded and
jurisdiction over them was acquired was a factual question for the trial court to
determine.Consistent with the basic doctrine that factual findings of lower courts are binding on
appellate courts unless covered by the recognized exceptions,[48] appellate courts must be able to
rely on the implied affirmation of the trial court that jurisdiction had been acquired over
indispensable parties, especially when this was not raised as an issue on appeal. The
responsibility for impleading indispensable parties for the exhaustive trial of a case cannot rest
on this forum or on the then Intermediate Appellate Court. Indeed, the Decision of this Court
affirming the said trial courts decision is captioned only as Pacita A. Olanday, Maria A. Arellano
and Natividad A. Cruz, petitioners, vs. Intermediate Appellate Court and Moises Farnacio,
respondents, clearly indicating that petitioners herein had been omitted as indispensable parties
in the proceedings before the trial court and before the appellate tribunals. Substantial justice
requires that this error be now rectified.
Second Issue: Estoppel and Laches
Apart from holding that there was only one ground to annul a judgment, namely, extrinsic fraud,
the appellate court -- using extraneous evidence -- also found that estoppel and laches had set in
against petitioners, thereby barring them from asserting lack of jurisdiction over their
persons. These extraneous matters are stated by the Respondent Court in this wise:
x x x True, indeed, that petitioners were not original parties to the action and that the decision
embraces half of the property in dispute belonging to petitioners as co-owners thereof. But they
cannot now complain they were denied due process. It will be recalled that the contract of lease
was entered with one Cipriano Tandoc on March 4, 1978 for a term of three years, which
contract was renewed for another two years up to February 2, 1984. During all the years of the
existence of the lease contract, it would be incredulous for petitioners to assert that they never
knew of such lease agreement from their three sisters, the defendants herein. Petitioners raised no
overt protest against the lease contract executed by their sisters with Cipriano Tandoc in 1978
and renewed in 1982. Petitioners took no direct action to promptly disavow or disaffirm the
action taken by their sisters to lease the entire property to Tandoc.
It is likewise unbelievable that during all the years that the subject property (fishpond) is under
litigation in Civil Case No. D-7240 from 1984 to 1991, petitioners were not aware that their
property is subject of the controversy. By their continued silence, they have permitted the acts of
their sisters in leasing the property and they cannot now be heard, after a prolonged period of

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time, to denounce such acts as done without their knowledge and consent. The rule of
acquiescence by silence has estopped petitioners to deny the reality of the state of things which
they made to appear to exist and upon which others have been led to reply. Parties must take the
consequences of the position they assume. Sound ethics require that the apparent in its effects
and consequences should be as if it were real, and the law properly so regards.(Metro Manila
Transit Corporation vs. Morales, 173 SCRA 629, 633).
In Santiago Syjuco, Inc. vs. Castro, 175 SCRA 171, 192, it was held, inter alia:
xxxxxxxxx
x x x. Likewise, in Criminal Case No. 16866 for falsification against respondent Farnacio before
Branch 3 of the Municipal Trial Court of Dagupan City, witness Juan Bernal testified that the
petitioners herein Tomasa Arcelona, Marcelino Arcelona and Ben Arcelona authorized their
sisters Natividad Cruz, Corazon Arcelona, Pacita Olanday to lease the fishpond to Cipriano
Tandoc. (TSN, pp. 5-6, hearing of August 10, 1987 in Criminal Case No. 16866).[49]
Petitioners balk at these pronouncements, arguing that in annulment of judgments, the grounds
thereof must be based solely on the records of the case. They contend that to permit the courts
record to be contradicted or varied by evidence dehors would render such records of no
avail. Petitioners contend that Respondent Court of Appeals erred in taking into account the
proceedings in Criminal Case No. 16866 to show alleged knowledge of the petitioners herein of
the lease of the property to Cipriano Tandoc.[50] Petitioners submit that the bone of contention in
this case is not knowledge of the petitioners of the Lease Contract executed by Pacita Olanday et
al. and Cipriano Tandoc, but whether the petitioners knew of the case filed by private respondent
against Pacita Olanday et al. involving their common property.
Petitioners stress that Private Respondent Farnacio is a total stranger and has absolutely no
privity of interest with them because it was Tandoc, not Farnacio, who entered into a lease
contract with Olanday, et al. [51]
Petitioners deny any concealment or deception on their part that would constitute estoppel. They
contend that in the transfer certificate of title, their names were specifically mentioned as co-
owners of the property on which the private respondent sought to be installed in physical
possession as tenant.[52] They aver that Respondent Court of Appeals finding that they had
knowledge of the lease contract is based on presumption not on clear and convincing
evidence. Assuming, according to petitioners, that they can be held in estoppel, it can only be as
against Cipriano Tandoc, not private respondent who was never a party to the lease contract.[53]
Since the judgment is void insofar as the petitioners are concerned for lack of jurisdiction [over]
their persons and for want of due process, and since they were never given the opportunity to
institute any action to protect their interest, petitioners contend that to bar them now by laches
and estoppel will create an unfair and unjust situation. For as petitioners candidly state, they do
not question the pronouncement that private respondent is the tenant of Pacita Olanday et al.;
however, they submit that the issue in this case is whether private respondent is also the tenant of

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herein petitioners entitled to be placed in physical possession and cultivation of their
undetermined share in the property without [petitioners] being made parties in the case.[54]
Private respondent counters that Pacita Olanday x x x testified that she was authorized to lease
the share of x x x petitioners. According to private respondent, while petitioners were in the
Philippines, they were informed of the appointment of private respondent as caretaker-tenant of
the entire fishpond, and they did not object to such appointment.[55] Further, private respondent
contends that petitioners failed to intervene in the case before the writ of execution was granted
on May 5, 1991 despite the appearance x x x of their counsel, Atty. Marina Cruz, when the
motion for issuance of said writ was heard. Private respondent adds that he was impliedly
recognized as a tenant when petitioners received their corresponding shares [i]n the lease rental
of the property from the private respondent, through Olanday, et al. and their counsel, Atty.
Marina Cruz.[56]
As correctly put by petitioners, we hold that Respondent Court of Appeals, in deciding the
petition to declare the judgment void, cannot consider extraneous matters to vary what the
records bear. In other words, the Court of Appeals cannot annul or declare null the assailed
decision with such extraneous matters. The validity or nullity of the said decision must stand or
fall on its own face and the evidence on record.
In an action to declare a judgment void because of lack of jurisdiction over the parties or subject
matter, only evidence found in the records of the case can justify the annulment of the said
judgment. Contrariwise, the nullity of the judgment due to lack of jurisdiction may be proved at
most by the evidence on record but never by extraneous evidence. Sen. Vicente J. Francisco
aptly explains this in his treatise on the Rules of Court:[57]
The validity of a final judgment may be attacked on the ground that the judgment or order is null
and void, because the court had no power or authority to grant the relief or no jurisdiction over
the subject matter or over the parties or both. The aggrieved party may attack the validity of the
final judgment by a direct action or proceeding in order to annul the same, as certiorari, which is
not incidental to, but is the main object of the proceeding. The validity of a final judgment may
also be attacked collaterally as when a party files a motion for the execution of the judgment and
the adverse party resists the motion by claiming that the court has no authority to pronounce the
judgment and that the same is null and void for lack of jurisdiction over the subject matter or
over the parties.
In cases of collateral attack, the principles that apply have been stated as follows: The legitimate
province of collateral impeachment is void judgments. There and there alone can it meet with
any measure of success. Decision after decision bears this import: In every case the field of
collateral inquiry is narrowed down to the single issue concerning the void character of the
judgment and the assailant is called upon to satisfy the court that such is the fact. To compass his
purpose of overthrowing the judgment, it is not enough that he shows a mistaken or erroneous
decision or a record disclosing non-jurisdictional irregularities in the proceedings leading up to
the judgment. He must go beyond this and show to the court, generally from the fact of the
record itself, and not by extraneous evidence that the judgment complained of is utterly void. If

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he can do that his attack will succeed for the cases leave no doubt respecting the right of a
litigant to collaterally impeach a judgment that he can prove to be void.
The reason for the rule of exclusion of extraneous proof to show that the judgment complained of
is utterly void for lack of jurisdiction has been expressed in the following words: The doctrine
that the question of jurisdiction is to be determined by the record alone, thereby excluding
extraneous proof seems to be the natural unavoidable result of that stamp of authenticity which,
from the earliest times, was placed upon the record, and which gave it such uncontrollable credit
and verity that no plea, proof, or averment could be heard to the contrary. x x x Any rule, x x x
would be disastrous in its results, since to permit the courts record to be contradicted or varied by
evidence dehors would render such records of no avail and definite sentences would afford but
slight protection to the rights of parties once solemnly adjudicated.
We should add, however, that where an action for annulment of judgment is grounded on
extrinsic fraud, extraneous evidence is admitted. We have held that, although a person need not
be a party to the judgment sought to be annulled by reason of extrinsic fraud, he must prove his
allegation that the judgment was obtained by the use of fraud and collusion and that he would be
adversely affected thereby.[58] Fraud must be extraneous; otherwise, there would be no end to
litigation. Extrinsic fraud refers to any fraudulent act committed by a prevailing party outside the
trial of the case, whereby the defeated party has been prevented from fully exhibiting his side of
the case, because of fraud or deception practiced on him by his opponent.[59] As distinctly
defined in Cosmic Lumber Corporation vs. Court of Appeals, et al.,[60]
There is extrinsic fraud within the meaning of Sec. 9, par. (2), of B.P. Blg. 129, where it is one
the effect of which prevents a party from hearing a trial, or real contest, or from presenting all of
his case to the court, or where it operates upon matters, not pertaining to the judgment itself, but
to the manner in which it was procured so that there is not a fair submission of the
controversy. In other words, extrinsic fraud refers to any fraudulent act of the prevailing party in
the litigation which is committed outside of the trial of the case, whereby the defeated party has
been prevented from exhibiting fully his side of the case by fraud or deception practiced on him
by his opponent. (fn: Makabingkil v. PHHC, No. L-29080, 17 August 1976, 72 SCRA 326, 343-
344) Fraud is extrinsic where the unsuccessful party has been prevented from exhibiting fully his
case, by fraud or deception practiced on him by his opponent, as keeping him away from court, a
false promise of a compromise; or where the defendant never had knowledge of the suit, being
kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without
authority connives at his defeat ; these and similar cases which show that there has never been a
real contest in the trial or hearing of the case are reasons for which a new suit may be sustained
to set aside and annul the former judgment and open the case for a new and fair hearing.
(fn: Id., p. 344 citing U.S. v. Throckmorton, 25 L. Ed. 93, 95).
In deciding the petition for annulment of judgment which should be a petition to declare
judgment void Respondent Court of Appeals should not have considered the following matters
which find no support from the records and are thus considered extraneous: (1) the assumption
that petitioners knew of the five-year lease contract with private respondent and the pendency of
Civil Case No. D-7240 from 1984 to 1991; and (2) the testimony of Juan Bernal in a separate

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criminal case before another court concerning the authority granted to Olanday et al. and where
petitioners were not parties. The rule is that the nullity of the decision arising from want of
jurisdiction and/or due process should appear from the records of the case. And the validity of
the judgment cannot be anchored on mere suppositions or speculations, as Respondent Court did.
Equally important, the finding of estoppel and laches by Respondent Court is not supported by
the evidence on record. The silence of petitioners can easily be explained by the fact that they
were not in the country during the pendency of the subject civil case. Such absence from the
country was never rebutted by private respondent. Even in the proceedings antecedent to this
case before us now, petitioners were merely represented by their attorney-in-fact.[61] Moreover,
they were not at all impleaded as parties in the judgment sought to be voided. Neither were they
properly served summons. The indelible fact is that they were completely ignored.
In any event, we ruled in Alabang Development Corporation vs. Valenzuela[62] that no laches
attach when the judgment is null and void for want of jurisdiction:
The herein respondents attribute laches to the petitioners for not appealing from the order of the
lower court denying their motion to intervene and motion for new trial hence allowing the said
order/decision to become final. There is no laches nor finality of any decision to speak of since
the decision under question is herein pronounced null and void for having been rendered without
jurisdiction. Prescinding therefrom, as admitted by themselves in their comment, the judgment of
reconstitution is ineffective against the owners of lands covered thereby who were not joined as
parties in the proceeding. As the Court ruled in Bernal case on the matter of intervention [fn: 93
SCRA at pp. 247, 248] a valid judgment cannot even be rendered where there is want of
indispensable parties such as petitioners who hold subsisting Torrens Title to the properties in
question and this aspect of the case commands the joinder of indispensable parties to allow them
to uphold their interests based upon the Torrens titles they hold overrides any question of later
intervention. Petitioners have precisely availed of the proper, speedy and adequate remedy of the
present special civil action of certiorari and prohibition to annul and set aside for want of
jurisdiction the decision and all proceedings of respondent judge.
On the other hand, the doctrine of estoppel is predicated on and finds its roots in equity which,
broadly defined, is justice according to natural law and right. It is a principle intended to prevent
a clear case of injustice. The term is hardly separable from a waiver of right. Estoppel, like
laches, must be intentional and unequivocal, for when misapplied, it can easily become a most
convenient and effective means of injustice. Estoppel is a principle that, as a rule, can be
invoked only in highly exceptional and legitimate cases.[63] In Cruz vs. Court of Appeals,[64] we
reiterated the requisites of estoppel:
In Kalalo vs. Luz, [fn: 34 SCRA 337] We held that the essential elements of estoppel in respect
to the party claiming it are: (a) lack of knowledge and of the means of knowledge of the truth as
the facts in question; (b) reliance, in good faith, upon the conduct or statements of the party to be
estopped; and (c) action or inaction based thereon of such character as to change the position or
status of the party claiming the estoppel, to his injury, detriment, or prejudice.

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The herein facts ineluctably show the absence of the first element in this case. Inasmuch as there
is no proof that petitioners had knowledge of the pending tenancy case filed by private
respondent, it is only fair that they should not be held in estoppel for failing to intervene in and to
question the jurisdiction of the trial court in Civil Case No. D-7240. Thus, private respondent
may not say that he was misled into believing that petitioners knew of the lease contract and of
the litigation of Civil Case No. D-7240. Undisputedly, from the evidence on record, petitioners
had no such knowledge.
Petitioners receipt of lease rentals cannot be used as proof of recognition of private respondent as
a caretaker-tenant. This issue was not raised in the lower court and is being alleged for the first
time before us. Well-settled is the doctrine that questions not raised in the lower courts cannot be
raised for the first time on appeal.[65]
Third Issue: Intervention as a Remedy of Petitioners
Petitioners contend that Respondent Court of Appeals erred when it ruled that their only remedy
was intervention during the execution stage of Civil Case No. D-7240. Inasmuch as annulment of
judgment could be made either collaterally or directly, petitioners insist that their resort to direct
action in annulling the Decision of the lower court should not be taken against
them.[66] Moreover, petitioners argue that in proceedings for execution of a final decision or
judgment, it is the ministerial duty of the court of origin to issue the writ.[67] Petitioners add that
because their action would result in the modification, alteration, and annulment of the judgment,
the specific provision of law that annulment of judgment of the Regional Trial Court is within
the exclusive jurisdiction of the Court of Appeals should prevail.[68]
Private respondent counters that petitioners deliberately did not intervene to afford them
opportunity to question, as they now question, the validity of any decision to be rendered in said
case, x x x in the event of an adverse decision.[69]
We hold that intervention is not the only remedy to assail a void final judgment. There is no
procedural rule prescribing that petitioners intervention in the hearing for the issuance of a writ is
the only way to question a void final judgment. As already stated, petitioners were not aware of
such hearing. Besides, as already discussed, a direct action is available in assailing final
judgments grounded on extrinsic fraud, while a direct or a collateral action may be used to show
lack of jurisdiction.
The assailed Decision of Respondent Court of Appeals cites certain cases allowing intervention
as follows:[70]
A case in which an execution has been issued is regarded as still pending so that all proceedings
in the execution are proceedings in the suit. There is no question that the court which rendered
the judgment has a general supervisory control over its process of execution and this power
carries with it the right to determine every question of fact and law which may be involved in the
execution. (Suson vs. Court of Appeals, 172 SCRA 70, 75, citing Paman vs. Severis, 115 SCRA
709; Seavan Carrier vs. GTI Sportswear, 137 SCRA 580)

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These cases, which require intervention of parties who may be adversely affected by the
decision, are not applicable. In the cited Suson vs. Court of Appeals,[71] the parties, though not
impleaded, knew of the case and were in fact directed by the trial court to intervene, but they
refused to do so. These particular facts are absent in the instant case where, to repeat, petitioners
were abroad when Civil Case D-7240 was prosecuted.
In any event, as earlier pointed out, jurisprudence upholds the soundness of an independent
action to declare as null and void a judgment rendered without jurisdiction as in this case.In
Leonor vs. Court of Appeals, [72] Petitioner Virginia A. Leonor, through a petition for certiorari,
prohibition and mandamus x x x sought the nullification of both the decision dated December 14,
1992 and the order dated February 24, 1993 of the trial court for having been issued in excess of
jurisdiction and/or with grave abuse of discretion.[73] We held in that case that:[74]
A void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any
right nor the creator of any obligation. All acts performed pursuant to it and all claims emanating
from it have no legal effect. Hence, it can never become final and any writ of execution based on
it is void: x x x it may be said to be a lawless thing which can be treated as an outlaw and slain at
sight, or ignored wherever and whenever it exhibits its head.
WHEREFORE, the petition for certiorari is GRANTED. The Decision of Respondent Court of
Appeals is hereby REVERSED and SET ASIDE. The decisions in Civil Case No. D-7240, AC-
G.R. SP-05237-CAR and G.R. No. L-71217 are ANNULLED and SET ASIDE for lack of
jurisdiction. No costs.
SO ORDERED.
Narvasa, C.J., (Chairman), Romero, Melo, and Francisco, JJ., concur.

ARNELITO ADLAWAN, G.R. No. 161916


Petitioner,
Present:
Panganiban, C.J. (Chairman),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
EMETERIO M. ADLAWAN and

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NARCISA M. ADLAWAN, Promulgated:
Respondents.
January 20, 2006

x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J.:

Assailed in this petition for review is the September 23, 2003 Decision[1] of the Court of Appeals
in CA-G.R. SP No. 74921 which set aside the September 13, 2002 Decision[2]of the Regional
Trial Court (RTC) of Cebu City, Branch 7, in Civil Case No. CEB-27806, and reinstated the
February 12, 2002 Judgment[3] of the Municipal Trial Court (MTC) of Minglanilla, Metro Cebu,
in Civil Case No. 392, dismissing petitioner Arnelito Adlawans unlawful detainer suit against
respondents Emeterio and Narcisa Adlawan. Likewise questioned is the January 8, 2004
Resolution[4] of the Court of Appeals which denied petitioners motion for reconsideration.

The instant ejectment suit stemmed from the parties dispute over Lot 7226 and the house built
thereon, covered by Transfer Certificate of Title No. 8842,[5] registered in the name of the late
Dominador Adlawan and located at Barrio Lipata, Municipality of Minglanilla, Cebu. In his
complaint, petitioner claimed that he is an acknowledged illegitimate child[6] of Dominador who
died on May 28, 1987 without any other issue. Claiming to be the sole heir of Dominador, he
executed an affidavit adjudicating to himself Lot 7226 and the house built thereon.[7] Out of
respect and generosity to respondents who are the siblings of his father, he granted their plea to
occupy the subject property provided they would vacate the same should his need for the
property arise. Sometime in January 1999, he verbally requested respondents to vacate the house
and lot, but they refused and filed instead an action for quieting of title[8] with the RTC. Finally,
upon respondents refusal to heed the last demand letter to vacate dated August 2, 2000, petitioner
filed the instant case on August 9, 2000.[9]

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On the other hand, respondents Narcisa and Emeterio, 70 and 59 years of age,
respectively,[10] denied that they begged petitioner to allow them to stay on the questioned
property and stressed that they have been occupying Lot 7226 and the house standing thereon
since birth. They alleged that Lot 7226 was originally registered in the name of their deceased
father, Ramon Adlawan[11] and the ancestral house standing thereon was owned by Ramon and
their mother, Oligia Maacap Adlawan. The spouses had nine[12]children including the late
Dominador and herein surviving respondents Emeterio and Narcisa. During the lifetime of their
parents and deceased siblings, all of them lived on the said property. Dominador and his wife,
Graciana Ramas Adlawan, who died without issue, also occupied the same.[13] Petitioner, on the
other hand, is a stranger who never had possession of Lot 7226.

Sometime in 1961, spouses Ramon and Oligia needed money to finance the renovation of their
house. Since they were not qualified to obtain a loan, they transferred ownership of Lot 7226 in
the name of their son Dominador who was the only one in the family who had a college
education. By virtue of a January 31, 1962 simulated deed of sale,[14] a title was issued to
Dominador which enabled him to secure a loan with Lot 7226 as collateral. Notwithstanding the
execution of the simulated deed, Dominador, then single, never disputed his parents ownership
of the lot. He and his wife, Graciana, did not disturb respondents possession of the property until
they died on May 28, 1987 and May 6, 1997, respectively.

Respondents also contended that Dominadors signature at the back of petitioners birth certificate
was forged, hence, the latter is not an heir of Dominador and has no right to claim ownership of
Lot 7226.[15] They argued that even if petitioner is indeed Dominadors acknowledged illegitimate
son, his right to succeed is doubtful because Dominador was survived by his wife, Graciana.[16]
On February 12, 2002, the MTC dismissed the complaint holding that the establishment of
petitioners filiation and the settlement of the estate of Dominador are conditions precedent to the
accrual of petitioners action for ejectment. It added that since Dominador was survived by his
wife, Graciana, who died 10 years thereafter, her legal heirs are also entitled to their share in Lot
7226. The dispositive portion thereof, reads:

In View of the foregoing, for failure to prove by preponderance of evidence, the plaintiffs cause
of action, the above-entitled case is hereby Ordered DISMISSED.

SO ORDERED.[17]

On appeal by petitioner, the RTC reversed the decision of the MTC holding that the title of
Dominador over Lot 7226 cannot be collaterally attacked. It thus ordered respondents to turn

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over possession of the controverted lot to petitioner and to pay compensation for the use and
occupation of the premises. The decretal portion thereof, provides:

Wherefore, the Judgment, dated February 12, 2002, of the Municipal Trial Court of Minglanilla,
Cebu, in Civil Case No. 392, is reversed. Defendants-appellees are directed to restore to plaintiff-
appellant possession of Lot 7226 and the house thereon, and to pay plaintiff-appellant, beginning
in August 2000, compensation for their use and occupation of the property in the amount of
P500.00 a month.

So ordered.[18]

Meanwhile, the RTC granted petitioners motion for execution pending appeal[19] which was
opposed by the alleged nephew and nieces of Graciana in their motion for leave to intervene and
to file an answer in intervention.[20] They contended that as heirs of Graciana, they have a share
in Lot 7226 and that intervention is necessary to protect their right over the property. In addition,
they declared that as co-owners of the property, they are allowing respondents to stay in Lot
7226 until a formal partition of the property is made.

The RTC denied the motion for leave to intervene.[21] It, however, recalled the order granting the
execution pending appeal having lost jurisdiction over the case in view of the petition filed by
respondents with the Court of Appeals.[22]

On September 23, 2003, the Court of Appeals set aside the decision of the RTC and reinstated
the judgment of the MTC. It ratiocinated that petitioner and the heirs of Graciana are co-owners
of Lot 7226. As such, petitioner cannot eject respondents from the property via an unlawful
detainer suit filed in his own name and as the sole owner of the property. Thus

WHEEFORE, premises considered, the appealed Decision dated September 13, 2002 of the
Regional Trial Court of Cebu City, Branch 7, in Civil Case No. CEB-27806 is REVERSED and
SET ASIDE, and the Judgment dated February 12, 2002 of the Municipal Trial Court of
Minglanilla, Metro Cebu, in Civil Case No. 392 is REINSTATED. Costs against the respondent.

SO ORDERED.[23]

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Petitioners motion for reconsideration was denied. Hence, the instant petition.

The decisive issue to be resolved is whether or not petitioner can validly maintain the instant
case for ejectment.

Petitioner averred that he is an acknowledged illegitimate son and the sole heir of Dominador.
He in fact executed an affidavit adjudicating to himself the controverted property. In ruling for
the petitioner, the RTC held that the questioned January 31, 1962 deed of sale validly transferred
title to Dominador and that petitioner is his acknowledged illegitimate son who inherited
ownership of the questioned lot. The Court notes, however, that the RTC lost sight of the fact
that the theory of succession invoked by petitioner would end up proving that he is not the sole
owner of Lot 7226. This is so because Dominador was survived not only by petitioner but also
by his legal wife, Graciana, who died 10 years after the demise of Dominador on May 28,
1987.[24] By intestate succession, Graciana and petitioner became co-owners of Lot 7226.[25] The
death of Graciana on May 6, 1997, did not make petitioner the absolute owner of Lot 7226
because the share of Graciana passed to her relatives by consanguinity and not to petitioner with
whom she had no blood relations. The Court of Appeals thus correctly held that petitioner has no
authority to institute the instant action as the sole owner of Lot 7226.

Petitioner contends that even granting that he has co-owners over Lot 7226, he can on his own
file the instant case pursuant to Article 487 of the Civil Code which provides:

ART. 487. Any one of the co-owners may bring an action in ejectment.

This article covers all kinds of actions for the recovery of possession. Article 487 includes
forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion
publiciana), and recovery of ownership (accion de reivindicacion).[26] A co-owner may bring
such an action without the necessity of joining all the other co-owners as co-plaintiffs because
the suit is presumed to have been filed to benefit his co-owners. It should be stressed, however,
that where the suit is for the benefit of the plaintiff alone who claims to be the sole owner and
entitled to the possession of the litigated property, the action should be dismissed.[27]

The renowned civilist, Professor Arturo M. Tolentino, explained

A co-owner may bring such an action, without the necessity of joining all the other co-owners as
co-plaintiffs, because the suit is deemed to be instituted for the benefit of all. If the action is for
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the benefit of the plaintiff alone, such that he claims possession for himself and not for the
co-ownership, the action will not prosper. (Emphasis added)[28]

In Baloloy v. Hular,[29] respondent filed a complaint for quieting of title claiming exclusive
ownership of the property, but the evidence showed that respondent has co-owners over the
property. In dismissing the complaint for want of respondents authority to file the case, the Court
held that
Under Article 487 of the New Civil Code, any of the co-owners may bring an action in
ejectment. This article covers all kinds of actions for the recovery of possession, including
an accion publiciana and a reinvidicatory action. A co-owner may bring such an action without
the necessity of joining all the other co-owners as co-plaintiffs because the suit is deemed to be
instituted for the benefit of all. Any judgment of the court in favor of the co-owner will benefit
the others but if such judgment is adverse, the same cannot prejudice the rights of the
unimpleaded co-owners. If the action is for the benefit of the plaintiff alone who claims to be the
sole owner and entitled to the possession thereof, the action will not prosper unless he impleads
the other co-owners who are indispensable parties.

In this case, the respondent alone filed the complaint, claiming sole ownership over the subject
property and praying that he be declared the sole owner thereof. There is no proof that the other
co-owners had waived their rights over the subject property or conveyed the same to the
respondent or such co-owners were aware of the case in the trial court. The trial court rendered
judgment declaring the respondent as the sole owner of the property and entitled to its
possession, to the prejudice of the latters siblings. Patently then, the decision of the trial court is
erroneous.

Under Section 7, Rule 3 of the Rules of Court, the respondent was mandated to implead his
siblings, being co-owners of the property, as parties. The respondent failed to comply with the
rule. It must, likewise, be stressed that the Republic of the Philippines is also an indispensable
party as defendant because the respondent sought the nullification of OCT No. P-16540 which
was issued based on Free Patent No. 384019. Unless the State is impleaded as party-defendant,
any decision of the Court would not be binding on it. It has been held that the absence of an
indispensable party in a case renders ineffective all the proceedings subsequent to the filing of
the complaint including the judgment. The absence of the respondents siblings, as parties,
rendered all proceedings subsequent to the filing thereof, including the judgment of the court,
ineffective for want of authority to act, not only as to the absent parties but even as to those
present.[30]

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In the instant case, it is not disputed that petitioner brought the suit for unlawful detainer in his
name alone and for his own benefit to the exclusion of the heirs of Graciana as he even executed
an affidavit of self- adjudication over the disputed property. It is clear therefore that petitioner
cannot validly maintain the instant action considering that he does not recognize the co-
ownership that necessarily flows from his theory of succession to the property of his father,
Dominador.

In the same vein, there is no merit in petitioners claim that he has the legal personality to file the
present unlawful detainer suit because the ejectment of respondents would benefit not only him
but also his alleged co-owners. However, petitioner forgets that he filed the instant case to
acquire possession of the property and to recover damages. If granted, he alone will gain
possession of the lot and benefit from the proceeds of the award of damages to the exclusion of
the heirs of Graciana. Hence, petitioner cannot successfully capitalize on the alleged benefit to
his co-owners. Incidentally, it should be pointed out that in default of the said heirs of Graciana,
whom petitioner labeled as fictitious heirs, the State will inherit her share[31] and will thus be
petitioners co-owner entitled to possession and enjoyment of the property.

The present controversy should be differentiated from the cases where the Court upheld the right
of a co-owner to file a suit pursuant to Article 487 of the Civil Code. In Resuena v. Court of
Appeals,[32] and Sering v. Plazo,[33] the co-owners who filed the ejectment case did not represent
themselves as the exclusive owner of the property. In Celino v. Heirs of Alejo and Teresa
Santiago,[34] the complaint for quieting of title was brought in behalf of the co-owners precisely
to recover lots owned in common.[35]Similarly in Vencilao v. Camarenta,[36] the amended
complaint specified that the plaintiff is one of the heirs who co-owns the controverted properties.

In the foregoing cases, the plaintiff never disputed the existence of a co-ownership nor claimed
to be the sole or exclusive owner of the litigated lot. A favorable decision therein would of
course inure to the benefit not only of the plaintiff but to his co-owners as well. The instant case,
however, presents an entirely different backdrop as petitioner vigorously asserted absolute and
sole ownership of the questioned lot. In his complaint, petitioner made the following allegations,
to wit:

3. The plaintiff was the only son (illegitimate) and sole heir of the late DOMINADOR
ADLAWAN who died intestate on 28 May 1987 without any other descendant nor ascendant x x
x.

xxxx

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5. Being the only child/descendant and, therefore, sole heir of the deceased Dominador
Adlawan, the plaintiff became the absolute owner, and automatically took POSSESSION, of
the aforementioned house and lot x x x. (Emphasis added)[37]

Clearly, the said cases find no application here because petitioners action operates as a complete
repudiation of the existence of co-ownership and not in representation or recognition thereof.
Dismissal of the complaint is therefore proper. As noted by Former Supreme Court Associate
Justice Edgrado L. Paras [i]t is understood, of course, that the action [under Article 487 of the
Civil Code] is being instituted for all. Hence, if the co-owner expressly states that he is bringing
the case only for himself, the action should not be allowed to prosper.[38]

Indeed, respondents not less than four decade actual physical possession of the questioned
ancestral house and lot deserves to be respected especially so that petitioner failed to show that
he has the requisite personality and authority as co-owner to file the instant case. Justice dictates
that respondents who are now in the twilight years of their life be granted possession of their
ancestral property where their parents and siblings lived during their lifetime, and where they,
will probably spend the remaining days of their life.

WHEREFORE, the petition is DENIED. The September 23, 2003 Decision of the Court of
Appeals in CA-G.R. SP No. 74921 which reinstated the February 12, 2002 Judgment of the
Municipal Trial Court of Minglanilla, Metro Cebu, dismissing petitioners complaint in Civil
Case No. 392, and its January 8, 2004 Resolution, are AFFIRMED.

SO ORDERED.

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