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G.R. No.

193551 November 19, 2014 affidavit of self-adjudication, the deed of sale executed by
Enrique and Marietta, and the deed of real estate mortgage
HEIRS OF GREGORIO LOPEZ, represented by Rogelia executed by Marietta in favor of DBP.25 Petitioners also prayed
Lopez, et al., Petitioners, for the reconveyance of their three-fourth share in the property,
vs. their exercise of their right of redemption of Enrique’s one-
DEVELOPMENT BANK OF THE PHILIPPINES [Now fourth share, as well as attorney’s fees and costs of suit.26
substituted by Philippine Investment Two (SPVAMC),
Inc.], Respondents. Petitioners caused the annotation of a notice of lis pendens at
the back of the original certificate of title.27 The annotation was
DECISION inscribed on June 27, 1994.28

LEONEN, J.: Marietta failed to pay her loan to DBP.29 "DBP instituted
foreclosure proceedings on the . . . land."30 It was "awarded
the sale of the [property] as the highest bidder."31 "The
This case involves the application of the doctrine on innocent Certificate of Sale was registered with the Register of Deeds . . .
purchaser or mortgagee for value. It also involves the on 11 September 1996."32 Marietta failed to redeem the
application of the doctrines on sales by persons who are not property.33 The title to the property was "consolidated in favor
owners of the property. of DBP."34

This is a Rule 45 petition1 filed on October 15, 2010, assailing On December 27, 2005, the Regional Trial Court ruled in favor
the Court of Appeals May 8, 2009 decision2 and August 16, of petitioners.35 The Regional Trial Court found that the
2010 resolution.3 The Court of Appeals reversed and set aside affidavit of self-adjudication and the deed of absolute sale did
the Regional Trial Court's December 27, 2005 decision,4 which not validly transfer to Marietta the title to the property.36
ordered the nullification of the affidavit of self-adjudication Enrique could not transfer three-fourths of the property since
executed by Enrique Lopez, and the documents relating this portion belonged to his co-heirs.37 The Regional Trial Court
also found that Marietta was not an innocent purchaser for value
to the sale and mortgage of the property to respondent because when the deed of absolute sale was executed, the
Development Bank of the Philippines. property was only covered by a tax declaration in the name of
the heirs of Gregoria Lopez,38 thus:
Gregoria Lopez owned a 2,734-square-meter property in Bustos,
Bulacan.5 She died on March 19, 19226 and was survived by her [Marietta] should have looked further into the veracity of vendor
three sons: Teodoro Lopez, Francisco Lopez, and Carlos Lopez.7 Enrique Lopez’ claim of ownership over the subject property
Tax Declaration No. 613 was issued under the names of considering that he has not presented her any other proof of his
Teodoro, Francisco, and Carlos.8 ownership when the said Deed of Absolute Sale was executed
other than his mere allegation of ownership thereof.39
Teodoro, Francisco, and Carlos died.9 Only Teodoro was
survived by children: Gregorio, Enrique, Simplicio, and Hence, the issuance of the original certificate of title would not
Severino.10 protect Marietta. Title is not vested through a certificate.40 At
best, Marietta’s ownership over the subject property would
cover only Enrique’s share.41
Petitioners in this case are Simplicio substituted by his daughter
Eliza Lopez, and the heirs of Gregorio and Severino.11 Enrique is
deceased.12 The Regional Trial Court also found that DBP was not a
mortgagee in good faith because at the time of the execution of
the mortgage contract, a certificate of title was yet to be issued
Petitioners discovered that on November 29, 1990, Enrique
in favor of Marietta.42 Marietta’s title at that time was still based
executed an affidavit of self-adjudication declaring himself to be
on a tax declaration.43 Based on jurisprudence, a tax
Gregoria Lopez’s only surviving heir, thereby adjudicating upon
declaration is not a conclusive proof of ownership.44 The DBP
himself the land in Bulacan.13 He sold the property to Marietta
should have exerted due diligence in ascertaining Marietta’s title
Yabut.14
to the property.45

Petitioners demanded from Marietta the nullification of Enrique’s


The Regional Trial Court ordered the nullification of Enrique’s
affidavit of self-adjudication and the deed of absolute sale.15
affidavit of self-adjudication, the sale of the three-fourth portion
They also sought to redeem Enrique’s one-fourth share.16
of the subject property in favor of Marietta, the reconveyance of
Marietta, who was already in possession of the property,
the three-fourth share of the property in favor of petitioners, the
refused.17
nullification of the real estate mortgage executed in favor of
DBP, and the surrender of possession of the property to
Sometime in 1993, Marietta obtained a loan from Development petitioners.46 The trial court also ordered DBP to pay attorney’s
Bank of the Philippines (DBP) and mortgaged the property to fees.
DBP as security.18 At the time of the loan, the property was
covered by Tax Declaration No. 18727, with the agreement that
DBP, substituted by Philippine Investment Two (PI Two),
the land shall be brought under the Torrens system.19 On July
appealed to the Court of Appeals.47 The Court of Appeals
26, 1993, an original certificate of title was issued in Marietta’s
reversed the decision of the Regional Trial Court in the
name.20 Marietta and DBP "executed a supplemental document
decision48 promulgated on May 8, 2009. It held that DBP was a
dated 28 February 1995 placing the subject [property]within the
mortgagee in good faith:
coverage of the mortgage."21 The mortgage was annotated to
the title.22
[W]ith the absence of any evidence to show that the DBP was
ever privy to the fraudulent execution of the late Enrique Lopez’
Sometime between 1993 and 1994, petitioners filed a
[sic] affidavit of Adjudication over the subject land, the right of
complaint23 and an amended complaint24 with the Regional
the former over the same must be protected and respected by
Trial Court for the annulment of document, recovery of
reason of public policy.49
possession, and reconveyance of the property. They prayed that
judgment be rendered, ordering the annulment of Enrique’s
The dispositive portion of the Court of Appeals’ decision reads: survived by children, the rights to the property ultimately passed
to them when Gregoria Lopez’s sons died.67 The children
WHEREFORE, the appeal is GRANTED. The 27 December 2005 entitled to the property were Gregorio, Simplicio, Severino, and
Decision of the Regional Trial Court is hereby REVERSED and Enrique.
SET ASIDE as to defendant-appellant Development Bank of the
Philippines and dismissing the complaint against the latter [now Gregorio, Simplicio, Severino, and Enrique became co-owners of
substituted by Philippine Investment Two (SPV-AMC), Inc.]50 the property, with each of them entitled toan undivided portion
of only a quarter of the property. Upon their deaths, their
The Court of Appeals denied petitioners’ motion for children became the co-owners of the property, who were
reconsideration on August 16, 2010.51 Petitioners filed a Rule entitled to their respective shares, such that the heirs of
45 petition52 before this court on October 15, 2010. Gregorio became entitled to Gregorio’s one-fourth share, and
Simplicio’s and Severino’s respective heirs became entitled to
their corresponding onefourth shares in the property.68 The
The issue in this case is whether the property was validly heirs cannot alienate the shares that do not belong to them.
transferred to Marietta and, eventually, to DBP. Article 493 of the Civil Code provides:

Petitioners argued that the Court of Appeals erred in its Art. 493. Each co-owner shall have the full ownership of his part
application of the doctrine on "innocent purchaser for value."53 and of the fruits and benefits pertaining thereto, and he may
DBP should have exercised diligence in ascertaining Marietta’s therefore alienate, assign or mortgage it, and even substitute
claim of ownership since at the time of the mortgage, the another person in its enjoyment, except when personal rights
property was only covered by a tax declaration under Marietta’s are involved. But the effect of the alienation or the mortgage,
name.54 As a financial institution of which "greater care and with respect to the co-owners, shall be limited to the portion
prudence"55 is required, DBP should not have relied on the face which may be allotted to him in the division upon the
of a certificate of title to the property.56 termination of the co-ownership.

On the other hand, DBP’s position, citing Blanco v. Esquierdo,57 Since Enrique’s right to the property was limited to his one-
was that since its participation in Enrique’s execution of the fourth share, he had no right to sell the undivided portions that
affidavit of self-adjudication was not shown on record, it could belonged to his siblings or their respective heirs. Any sale by
not have been aware that there was any irregularity in the sale one heir of the rest of the property will not affect the rights of
in favor of Marietta and in her title to the property.58 Moreover, the other heirs who did not consent to the sale. Such sale is void
Marietta was in possession of the property at the time of the with respect to the shares of the other heirs.
contract with DBP.59 Therefore, DBP should enjoy the
protection accorded to innocent purchasers for value.60
Regardless of their agreement, Enrique could only convey to
Marietta his undivided one-fourth share of the property, and
We find merit in the petition. Marietta could only acquire that share. This is because Marietta
obtained her rights from Enrique who, in the first place, had no
I title or interest over the rest of the property that he could
Validity of Enrique’s affidavit and the sale to Marietta convey.

We have consistently upheld the principle that "no one can give This is despite Enrique’s execution of the affidavit of self-
what one does not have."61 A seller can only sell what he or she adjudication wherein he declared himself to be the only
owns, or that which he or she does not own but has authority to surviving heir of Gregoria Lopez. The affidavit of self-
transfer, and a buyer can only acquire what the seller can legally adjudication is invalid for the simple reason that it was false. At
transfer.62 the time of its execution, Enrique’s siblings were still alive and
entitled to the three-fourth undivided share of the property. The
affidavit of self-adjudication did not have the effect of vesting
This principle is incorporated in our Civil Code. It provides that
upon Enrique ownership or rights to the property.
in a contract of sale, the seller binds himself to transfer the
ownership of the thing sold, thus:
The issuance of the original certificate of title in favor of
Marietta does not cure Enrique’s lack of title or authority to
Art. 1458. By the contract of sale, one of the contracting parties
convey his co-owners’ portions of the property. Issuance of a
obligates himself to transfer the ownership of and to deliver a
certificate of title is not a grant of title over petitioners’
determinate thing, and the other to pay therefor a price certain
undivided portions of the property.69 The physical certificate of
in money or its equivalent.
title does not vest in a person ownership or right over a
property.70 It is merely an evidence of such ownership or
The seller cannot perform this obligation if he or she does not right.71
have a right to convey ownership of the thing. Hence, Article
1459 of the Civil Code provides:
Marietta could acquire valid title over the whole property if she
were an innocent purchaser for value. An innocent purchaser for
Art. 1459. The thing must be licit and the vendor must have a value purchases a property without any notice of defect or
right to transfer the ownership thereof at the time it is delivered. irregularity as to the right or interest of the seller.72 He or she is
without notice that another person holds claim to the property
Title or rights to a deceased person’s property are immediately being purchased.73
passed to his or her heirs upon death.63 The heirs’ rights
become vested without need for them to be declared "heirs."64 As a rule, an ordinary buyer may rely on the certificate of title
Before the property is partitioned, the heirs are co-owners of the issued in the name of the seller.74 He or she need not look
property.65 "beyond what appears on the face [of the certificate of title]."75
However, the ordinary buyer will not be considered an innocent
In this case, the rights to Gregoria Lopez’s property were purchaser for value if there is anything on the certificate of title
automatically passed to her sons — Teodoro, Francisco, and that arouses suspicion, and the buyer failed to inquire or take
Carlos — when she died in 1922.66 Since only Teodoro was steps to ensure that there is no cloud on the title, right, or
ownership of the property being sold.
Marietta cannot claim the protection accorded by law to investigation. Hence, even if the mortgagor is not the rightful
innocent purchasers for value because the circumstances do not owner of, or does not have a valid title to, the mortgaged
make this available to her. property, the mortgagee in good faith is, nonetheless, entitled to
protection.79
In this case, there was no certificate of title to rely on when she
purchased the property from Enrique. At the time of the sale, DBP claims that it is covered by this exception. DBP is mistaken.
the property was still unregistered. What was available was only The exception applies when, at the time of the mortgage, the
a tax declaration issued under the name of "Heirs of Lopez." mortgagor has already obtained a certificate of title under his or
her name.80 It does not apply when, as in this case, the
"The defense of having purchased the property in good faith mortgagor had yet to register the property under her name.81
may be availed of only where registered land is involved and the
buyer had relied in good faith on the clear title of the registered The facts show that DBP disregarded circumstances that should
owner."76 It does not apply when the land is not yet registered have aroused suspicion. For instance, at the time of the
with the Registry of Deeds. mortgage with DBP, Marietta only had a tax declaration under
her name to show that she was the owner of the property. A tax
At the very least, the unregistered status of the property should declaration, by itself, neither proves ownership of property nor
have prompted Marietta to inquire further as to Enrique’s right grants title. Yet, DBP agreed to accept the property as security
over the property. She did not. Hence, she was not an innocent even though Marietta’s claim was supported only by the tax
purchaser for value. She acquired no title over petitioners’ declaration, and a certificate of title was yet to be issued under
portions of the property. her name.

II Granting that Marietta was in possession of the property, DBP


Validity of the mortgage should have inquired further as to Marietta’s rights over the
property since no certificate of title was issued to her. DBP took
the risks attendant to the absence of a certificate of title. It
One of the requisites of a valid mortgage contract is ownership should bear the burden of checking the ownership as well as the
of the property being mortgaged.77 Article 2085 of the Civil validity of the deed of sale. This is despite the eventual issuance
Code enumerates the requisites of a mortgage contract: Art. of a certificate of title in favor of Marietta.
2085. The following requisites are essential to the contracts of
pledge and mortgage:
The rule on "innocent purchasers or [mortgagees] for value" is
applied more strictly when the purchaser or the mortgagee is a
(1) That they be constituted to secure the fulfilment of bank.1âwphi1 Banks are expected to exercise higher degree of
a principal obligation; diligence in their dealings, including those involving lands. Banks
may not rely simply on the face of the certificate of title.
(2) That the pledgor or mortgagor be the absolute
owner of the thing pledged or mortgaged; Thus, in Cruz v. Bancom Finance Corporation,82 this court ruled
that:
(3) That the persons constituting the pledge or
mortgage have the free disposal of their property, and Respondent . . . is not an ordinary mortgagee; it is a
in the absence thereof, that they be legally authorized mortgagee-bank. As such, unlike private individuals, it is
for the purpose. expected to exercise greater care and prudence in its dealings,
including those involving registered lands. A banking institution
Third persons who are not parties to the principal obligation may is expected to exercise due diligence before entering into a
secure the latter by pledging or mortgaging their own property. mortgage contract. The ascertainment of the status or condition
of a property offered to it as security for a loan must be a
standard and indispensable part of its operations.83 (Citations
Applying this provision and having established that Marietta
omitted)
acquired no valid title or ownership from Enrique over the
undivided portions of the property, this court finds that no valid
mortgage was executed over the same property in favor of DBP. DBP failed to exercise the degree of diligence required of banks
Without a valid mortgage, there was also no valid foreclosure when it accepted the unregistered property as security for
sale and no transfer of ownership of petitioners’ undivided Marietta’s loan despite circumstances that should have aroused
portions to DBP. In other words, DBP acquired no right over the its suspicion.
undivided portions since its predecessor-in-interest was not the
owner and held no authority to convey the property. Citing Blanco v. Esquierdo, DBP argued that since it did not
participate in the dealings between Enrique and Marietta, it
As in sales, an exception to this rule is if the mortgagee is a should be considered as an innocent mortgagee for value.
"mortgagee in good faith."78 This exception was explained in
Torbela v. Rosario: Blanco involves an alleged widow of the deceased who
adjudicated to herself the deceased’s property and thereafter
Under this doctrine, even if the mortgagor is not the owner of mortgaged the property to DBP.84 The brothers and sisters of
the mortgaged property, the mortgage contract and any the deceased filed an action for the annulment of the affidavit
foreclosure sale arising therefrom are given effect by reason of executed by the alleged widow and the cancellation of the
public policy. This principle is based on the rule that all persons certificate of title under her name.85 The trial court ordered the
dealing with property covered by a Torrens Certificate of Title, cancellation of the certificate of title issued to the alleged
as buyers or mortgagees, are not required to go beyond what widow, including the registration of the mortgage deed.86
appears on the face of the title. This is the same rule that
underlies the principle of "innocent purchasers for value." The In Blanco, this court declared that DBP was a mortgagee in
prevailing jurisprudence is that a mortgagee has a right to rely good faith, thus:
in good faith on the certificate of title of the mortgagor to the
property given as security and in the absence of any sign that
might arouse suspicion, has no obligation to undertake further The trial court, in the decision complained of, made no finding
that the defendant mortgagee bank was a party to the
fraudulent transfer of the land to Fructuosa Esquierdo. Indeed, Coloma suffered injuries.
there is nothing alleged in the complaint which may implicate
said defendant mortgagee in the fraud, or justify a finding that it On March 29, 2000, Rapanan and Camilo’s common law wife,
acted in bad faith. On the other hand, the certificate of title was respondent Mary Gine Tangonan, filed before the Regional Trial
in the name of the mortgagor Fructuosa Esquierdo when the Court (RTC) of Aparri, Cagayan a complaint2 for damages
land was mortgaged by her to the defendant bank. Such being against petitioner. They alleged that while the victims were
the case, the said defendant bank, as mortgagee, had the right traversing the national highway, they were struck and
to rely on what appeared in the certificate and, in the absence electrocuted by a live tension wire from one of the electric posts
of anything to excite suspicion, was under no obligation to look owned by petitioner. They contended that the mishap was due
beyond the certificate and investigate the title of the mortgagor to petitioner’s negligence when it failed to fix and change said
appearing on the face of said certificate. (De Lara, et al. vs. live tension wire despite being immediately informed by
Ayroso, 95 Phil., 185; 50 Off. Gaz., [10] 4838; Joaquin vs. residents in the area that it might pose an immediate danger to
Madrid, et al., 106 Phil., 1060). Being thus an innocent persons, animals and vehicles passing along the national
mortgagee for value, its right or lien upon the land mortgaged highway.
must be respected and protected, even if the mortgagor
obtained her title thereto thru fraud.87
Mary Gine prayed that she beawarded P50,000 civil indemnity,
P25,000 burial expenses, P1,584,000 indemnity for loss of
DBP's reliance on Blanco is misplaced. In Blanco, the certificate earning capacity and P100,000 moral and exemplary damages.
of title had already been issued under the name of the Rapanan, on the other hand, prayed for P10,000 for his medical
mortgagor when the property was mortgaged to DBP. This is treatment and P50,000 moral and exemplary damages. Both
not the situation in this case. Mary Gine and Rapanan prayed for 30% of the total award
representing attorney’s fees.
To reiterate, the protection accorded to mortgagees in good
faith cannot be extended to mortgagees of properties that are In its Answer,3 petitioner alleged that the typhoons that struck
not yet registered or registered but not under the mortgagor's its areas of responsibility caused some of its electric poles to fall
name. and high tension wires to snap or cut-off which caused
brownouts in said areas. It claimed that they cannot be faulted
Therefore, the Regional Trial Court did not err in ordering the for negligence if there were electric wires dangling along the
nullification of the documents of sale and mortgage. Contracts national road since they were caused by typhoons which are
involving the sale or mortgage of unregistered property by a fortuitous events. It also alleged that it was able to clear the
person who was not the owner or by an unauthorized person said areas of fallen electric poles and dangling or hanging high
are void. tension wires immediately after the typhoons, to secure the
safety of persons and vehicles traveling in said areas. It likewise
WHEREFORE, the petition is GRANTED. The decision of the contended that the proximate cause of the mishap was the
Court of Appeals dated May 8, 2009 and its resolution dated victims’ negligence and imprudence in operating and driving the
August 16, 2010 are reversed and SET ASIDE. The December motorcycle they were riding on.
27, 2005 decision of the Regional Trial Court is REINSTATED.
During the trial, respondents testified and also presented Dr.
SO ORDERED. Triffany C. Hasim as witness. Mary Gine testified4 that she is not
married to Camilo but they are living together and that they
have one child. She also testified that she spent P20,776 for the
G.R. No. 199886 December 3, 2014 funeral expenses of Camilo. She herself prepared an itemized list
and computation of said expenses. She also claimed that Camilo
CAGAYAN II ELECTRIC COOPERATIVE, INC., represented worked as a jeepney driver earning P150 per day and that as a
by its General Manager and Chief Executive Officer, result of Camilo’s death, she suffered sleepless nights and lost
GABRIEL A. TORDESILLAS, Petitioner, weight.
vs.
ALLAN RAPANAN and MARY GINE TANGONAN, Rapanan testified5 that he, Camilo and one Erwin Coloma were
Respondents. riding a motorcycle along the National Highway of Maddalero,
Buguey, Cagayan on October 31, 1998, around 9:00 in the
DECISION evening. He claimed that they saw a wire dangling from an
electric post and because of a strong wind that blew, they got
wound by said dangling wire. He suffered physical injuries and
VILLARAMA, JR., J.:
electric burns and was hospitalized for seven days. He claimed
to have spent around P10,000 for his medicines, and also
This is a petition for review on certiorari under Rule 45 of the complained of sleepless nights because of the mishap.
1997 Rules of Civil Procedure, as amended, assailing the
December 8, 2011 Decision1 of the Court of Appeals (CA) in
Dr. Triffany C. Hasim, the physician who attended to the victims
C.A. G.R. CV No. 77659. The appellate court granted the appeal
when they were rushed to the Alfonso Ponce Enrile Memorial
of respondents Allan Rapanan and Mary Gine Tangonan and
District Hospital, also testified6 for the respondents. According
held petitioner Cagayan II Electric Cooperative, Inc. liable for
to Dr. Hasim, the abrasions of Rapanan were caused by
quasi-delict resulting in the death of Camilo Tangonan and
pressure when the body was hit by a hard object or by friction
physical injuries of Rapanan, and ordering it to pay respondents
but she is uncertain as towhether a live electric wire could have
damages and attorney's fees.
caused them. She further said that she did not find any electrical
burns on Rapanan. As with Camilo, she found abrasions and
The antecedents of the case follow: hematoma on his body and that the cause of death was due to
"cardio respiratory arrest secondary to strangulation." She also
On October 31, 1998, around 9:00 p.m., a motorcycle with three opined that the strangulation could have been caused by an
passengers figured in a mishap along the National Highway of electric wire entangled around Camilo’s neck.
Maddalero, Buguey, Cagayan. It was driven by its owner Camilo
Tangonan who died from the accident, while his companions
respondent Rapanan and one Erwin
Petitioner, for its part, presented four witnesses among whom dangling wire which struck the victims, the CA held that they
were SPO2 Pedro Tactac, Tranquilino Rasosand Rodolfo would not have fallen down and sustained injuries. The CA
Adviento. found that if petitioner had not been negligent in maintaining its
facilities, and making sure that every facility needing repairs had
SPO2 Tactac, who investigated the incident, testified7 that there been repaired, the mishap could have been prevented.
was a skid mark on the cemented portion of the road caused by
the motorycle’s foot rest which was about 30 meters long. The appellate court nevertheless ruled that the victims were
According to him, it appears that the motorcycle was partly responsible for the injuries they sustained. At the time of
overspeeding because of said skid mark. the mishap, they were over-speeding and were not wearing
protective helmets. Moreover, the single motorcycle being driven
Rasos and Adviento, employees of petitioner, both testified8 carried three persons. While said circumstances were not the
that as a result of the onslaught of typhoons Iliang and Loleng proximate cause of Camilo’s death and Rapanan’s injuries, they
in Buguey and Sta. Ana, Cagayan, the power lines were cut off contributed to the occurrence of the unfortunate event.
because the electric wires snapped and the electric poles were
destroyed. After the said typhoons, petitioner’s employees Hence this petition raising the following arguments for this
inspected the affected areas. The dangling wires were then Court’s consideration:
removed from the electric poles and were placed at the foot of
the poles which were located four to five meters from the road. 1. THE CONCLUSION OF THE COURT OF APPEALS
THAT PETITIONER WAS NEGLIGENT IN THE
On December 9, 2002, the RTC rendered a decision9 in favor of MAINTENANCE OF ITS POWER LINES IS MANIFESTLY
petitioner and dismissed the complaint for damages of ABSURD AND PREMISED ON A SERIOUS
respondents. It held that the proximate cause of the incident is MISAPPREHENSION OF FACTS.
the negligence and imprudence of Camilo in driving the
motorcycle. It further held that respondent Mary Gine has no 2. THE COURT OF APPEALS DISREGARDED THE
legal personality to institute the action since such right is only EVIDENCE ON RECORD AND COMMITTED SERIOUS
given to the legal heir of the deceased. Mary Gine is not a legal MISAPPREHENSION OF FACTS AND GRAVE ABUSE
heir of Camilo since she is only his common law wife. OFDISCRETION WHEN IT CONCLUDED THAT THE
CAUSE OF THE MISHAP WAS A DANGLING ELECTRIC
On appeal, the CA reversed the RTC and held petitioner liable WIRE THAT STRUCK AND WOUND UPON THE
for quasi-delict. The fallo reads: VICTIMS.

WHEREFORE, premises considered, the present appeal is 3. THE COURT OF APPEALS SERIOUSLY ERRED AND
GRANTED. The assailed decision dated December 9, 2002 of the COMMITTED GRAVE ABUSE OF DISCRETION IN
Regional Trial Court of Appari, Cagayan, Branch 10 in Civil Case AWARDING DAMAGES TO THE HEIRS OF CAMILO
No. 10-305 is hereby REVERSED and SET ASIDE and a NEW TANGONAN NOTWITHSTANDING THE FACT THAT
ONE ENTERED holding the defendant-appellee CAGEL[C]O II THEY WERE NEVER IMPLEADED AS PARTIES TO THE
liable for quasi-delict which resulted in the death of Camilo ACTION.
Tangonan and the physical injuries of Allan Rapanan, and
ordering the payment of 50% of the following damages, except 4. ASSUMING, FOR ARGUMENT’S SAKE, THAT THE
the attorney’s fees which should be borne by the defendant- PETITIONER CAN BE HELD LIABLE FOR THE MISHAP,
appellant: To the plaintiff-appellant Allan Rapanan: DAMAGES AND ATTORNEY’S FEES COULD NOT BE
AWARDED TO THE HEIRS OFCAMILO TANGONAN;
1. temperate damages in the amount of P10,000.00; AND THE AWARD OF MORAL, TEMPERATE AND
and EXEMPLARY DAMAGES, AS WELL AS ATTORNEY’S
2. moral damages in the amount of P50,000.00; FEES, TO ALLAN RAPANAN IS WITHOUT BASIS.11
To the legal heirs of the deceased Camilo Tangonan:
1. indemnity for death in the amount of P50,000.00; Thus, there are two main issues that need to be resolved by this
2. indemnity for loss of earning capacity in the amount Court: (1) Was petitioner’s negligence in maintenance of its
of P1,062,000.00; facilities the proximate cause of the death of Camilo and the
3. temperate damages in the amount of P20,000.00; injuries of Rapanan? and (2) In the event that petitioner’s
and negligence is found to be the proximate cause of the accident,
[4.] moral damages in the amount of P50,000.00. should damages be awarded in favor of Camilo’s heirs even if
To both the plaintiff-appellant Allan Rapanan and the legal heirs they were not impleaded?
of the deceased Camilo Tangonan:
1. exemplary damages in the amount [of] P50,000.00;
and Petitioner contends that it cannot be accused of negligence as
2. attorney’s fees amounting to 20% of the total its crew cleared the roads of fallen electric poles and snapped
amount adjudged. wires to ensure the safety of motorists and pedestrians. They
rolled the snapped wires and placed them behind nearby electric
polesaway from the roads as temporary remedy considering that
SO ORDERED.10 the snapped wires could not be collected all at once. It cites the
report of SPO2 Pedro Tactac and testimony of Tranquilino Rasos
In ruling against petitioner, the CA found that despite the stating that the electric wire was placedat the shoulder of the
different versions of how the incident occurred, one fact was road. The photograph of the wire also shows that it was placed
consistent – the protruding or dangling CAGELCO wire to which among banana plants which petitioner submits to be a clear
the victims were strangled or trapped. It likewise ruled that the indication that it was safely tucked away from the road.
police blotter and medical certificates together with the Petitioner contends that the trial court correctly observed that
testimony of one of the passengers of the motorcycle, Camilo drove the motorcycle at a high speed causing it to
respondent Rapanan, was able to establish the truth of the careen to the shoulder of the road where the electric wire was
allegations of respondents – all of which were not controverted and had Camilo driven the motorcycle at an average speed, that
by petitioner. The appellate court held that clearly, the cause of would not have happened. Thus, petitioner submits, as found by
the mishap which claimed the life of Camilo and injured the trial court, the proximate cause of the mishap was dueto
Rapanan was the dangling wire which struck them. Without the recklessness and imprudence of Camilo and not of petitioner.
Respondents, for their part, insist that the appellate court erred can reasonably conclude that, at the time of that fatal mishap,
in ruling that it was petitioner’s negligence that caused the said wires were quietly sitting on the shoulder of the road, far
mishap resulting to the death of Camilo and injuries of Rapanan. enough from the concrete portion so as not to pose any threat
They argued that had petitioner properly maintained its facilities to passing motor vehicles and even pedestrians. Hence, if the
by making sure that every facility needing restoration is victims of the mishap were strangled by said wires, it can only
repaired, the mishap could have been prevented. mean that either the motorcycle careened towards the shoulder
or even more likely, since the police found the motorcycle not
The petition is meritorious. on the shoulder butstill on the road, that the three passengers
were thrown off from the motorcycle to the shoulder of the road
and caught up with the wires. As to how that happened cannot
Negligence is defined as the failure to observe for the protection be blamed on petitioner but should be attributed to Camilo’s
of the interest of another person that degree of care, over speeding as concluded by the police after it investigated
precaution, and vigilance which the circumstances justly the mishap. SPO2 Tactac, in his testimony, explained how
demand, whereby such other person suffers injury.12 Article theymade such conclusion:
2176 of the Civil Code provides that "[w]hoever by act or
omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or ATTY. TUMARU:
negligence, if there is no pre-existing contractual relation Q: x x x My question is, you said that the motor vehicle was
between the parties, is a quasi-delict." Under this provision, the overspeeding, when you went to the place, what made you
elements necessary to establish a quasi-delict case are: (1) conclude that the motor vehicle where the three rode which
damages to the plaintiff; (2) negligence, by act or omission, of caused the death of Camilo Tangonan, was overspeeding?
the defendant or by some person for whose acts the defendant Please explain that before this court[.]
must respond, was guilty; and (3) the connection of cause and ATTY. RAPANAN:
effect between such negligence and the damages.13 Incompetent, you honor.
COURT:
Answer.
The presence of the first element is undisputed because the A: I stated in the police blotter over speeding when we went to
unfortunate incident brought about the death of Camilo and investigate. We reflected in the report/police blotter that there
physical injuries to Rapanan. This Court, however, finds that the was over speeding because of the skid mark that lasted up to 30
second and third elements are lacking thus precluding the award meters from the start to the place where the motorcycle fell, sir.
of damages in favor of respondents. Adviento, petitioner’s Q: In this skid mark that you have seen, at the point of the start
employee testified that their electric poles along the highways, of the skid mark to the place where you found the motor
including the one where the mishap took place, were erected vehicle, where was the motor vehicle that time?
about four to five meters from the shoulder of the road. Another A: It was at the road, sir.
employee of petitioner, Rasos, testified that after the typhoons Q: What road?
hit Cagayan, he together with his co-employees, after checking A: At the edge of the cemented pavement, sir.
the damage to the electric lines, rolled the fallen electric wires Q: Where was the victim found?
and placed them at the foot of the electric poles so as to ATTY. RAPANAN:
prevent mishaps to pedestrians and vehicles passing by. Their Immaterial, your honor.
testimonies were corroborated by whatwas recorded in the COURT:
Police Blotter of the Buguey Police Station, Buguey, Cagayan Sustained.
after SPO2 Tactac investigated on the incident. The pertinent ATTY. TUMARU:
excerpt from the blotter is quoted verbatim: Q: And did you try to investigate what was the cause [of death]
of the victim?
xxxx ATTY. RAPANAN:
Incompetent, your honor.
ATTY. TUMARU:
TEAM LED BY SPO2 PEDRO R TACTAC JUMPED OFF AND
Q: Per your investigation, did you find out the cause of death of
PROCEEDED TO BRGY MADDALERO, BUGUEY, CAGAYAN TO
the victim and the others (sic)?
CONDUCT INVEST AT THE SAID VEHICULAR ACCIDENT AT THE
A: There was abrasion at the neck of the victim, sir.
SAME PLACE AND RET STN WITH THE REPT THAT ON OR
COURT:
ABOUT 8:45 PM 31 OCTOBER 98 ONE MOTORCYCLE SUZUKI X4
Q: Who among the victims?
WITH TEMPORARY PLATE NUMBER 14592 DRIVEN BY ONE
A: The driver Camilo Tangonan, sir.
CAMILO TANGONAN y ROSETE 21 years old, MARRIED, DRIVER
Q: What about the two others?
AND A RESIDENT OF BRGY MASI, STA TERESITA, CAGAYAN
A: When we arrived at the scene, the two companions of the
(DEAD ON THE SPOT) AND TWO COMPANIONS EDWIN
victim were brought to the Gonzaga Alfonso Ponce Enrile
COLOMA y MABANAG, 23 YEARS OLD, MARRIED, DRIVER AND
hospital by the PNP of Sta. Teresitapolice station, sir.
A RESIDENT OF MASI AND ALLAN RAFANAN y GUILLERMO, 19
xxxx
YEARS OLD, SINGLE, CONDUCTORAND A RESIDENT OF BRGY
ATTY. RAPANAN:
BUYUN STA TERESITA CAGAYAN WAS ACCIDENTALLY TRAPPED
Q: Do you know that a motorcycle is provided with the
BY A PROTRUDING CAGELCO WIRE AT THE SHOULDER OF THE
speedometer?
ROAD WHILE THEY WERE BOUND TO STA TERESITA FROM
A: Yes, sir.
APARRITHIS PROVINCE DUE TO THE OVER SPEED OF MOTOR
Q: When you arrived at the scene, you no longer bother yourself
VEHICLE THE WIRE STRANGLED THE NECK OF THE VICTIMS
to see the speedometer of the motorcycle, is that correct?
WHICH CAUSED THE INSTANTANEOUS DEATH OF THE DRIVER,
ATTY. TUMARU:
CAMILOTANGONAN AND ABRASIONS ON DIFFERENT PARTS OF
Incompetent, your honor.
THE BODY OF THE TWO OTHER VICTIMS THE SAID TWO
COURT:
OTHER VICTIMS WERE BROUGHT TO ALFONSO ENRILE
Answer.
HOSPITAL, GONZAGA, CAGAYAN FOR MEDICAL TREATMENT.14
A: I did not bother to see the speedometer, sir.
(Emphasis and underscoring supplied)
Q: You only conclude in saying that the driver of the motorcycle
was running his motorcycle in a very speed[y] manner because
Thus, there is no negligence on the part of petitioner that was of the skid mark measuring 30 meters, you did not include that
allegedly the proximate cause of Camilo’s death and Rapanan’s in your report?
injuries.1a\^/phi1 From the testimonies of petitioner’s ATTY. TUMARU:
employees and the excerpt from the police blotter, this Court The document is the best evidence, your honor.
ATTY. RAPANAN: G.R. No. 194077 December 3, 2014
This is a new matter, your honor.
COURT: FLORENTINO W. LEONG AND ELENA LEONG, ET AL.,
Answer. Petitioners,
A: We saw the skid mark so we concluded that there was an vs.
over speeding due to the skid mark, sir. EDNA C. SEE, Respondent.
Q: Do you know that a skid on the surface of a cemented road
shows that something happened to the motorcycle o[r] its
[d]river? DECISION
ATTY. TUMARU:
That calls for an opinion, your honor. LEONEN, J.:
COURT:
Answer.
Factual findings of lower courts are generally deemed conclusive
A: There was an accident, sir.
and binding upon this court.1 In any event, "even if the
Q: Do you know that when a vehicle even if running with slow
procurement of title was tainted with fraud and
speed if a driver suddenly applied a break, there was always a
misrepresentation, such defective title may be the source of a
skid mark on the road?
completely legal and valid title in the hands of an innocent
A: It is the footrest of the motorcycle that caused the skid mark,
purchaser for value."2
sir.
COURT:
Q: Which is which now, you found a skid mark of the tire and This petition originated from two civil complaints involving the
footrest or only the skid mark of the footrest? sale of a parcel of land in favor of respondent Edna C. See
A: The footrest, sir. (Edna). Before us is a petition for review3 assailing the Court of
Q: How do you know that the skid mark was caused by the Appeals’ (a) May 19, 2010 decision affirming in toto the trial
footrest? court's July 9, 2008 decision granting Edna possession and
A: Because the skid mark was caused by the footrest because ownership over the land upon finding her to be a buyer in good
the place where the motorcycle fell (sic),the footrest was still faith and for value, and (b) August 25, 2010 resolution denying
pointing [to] the skid mark [on] the cemented road, sir.15 reconsideration.

The foregoing shows that the motorcycle was probably running Petitioners pray for the reversal of the Court of Appeals’ decision
too fast that it lost control and started tilting and sliding and resolution, as well as the trial court’s decision.4 They pray
eventually which made its foot rest cause the skid mark on the that this court render its decision as follows:
road. Therefore, the mishap already occurred even while they
were on the road and away from petitioner's electric wires and (a) The Deed of Sale between Edna See and Carmelita
was not caused by the latter as alleged by respondents. It just Leong is hereby declared null and void. The Register
so happened that after the motorcycle tilted and slid, the [of] Deeds for the City of Manila is hereby directed to
passengers were thrown off to the shoulder where the electric cancel TCT No. 231105 in the name of Edna See and
wires were. This Court hence agrees with the trial court that the reinstating TCT No. 175628;
proximate cause of the mishap was the negligence of Camilo.
Had Camilo driven the motorcycle at an average speed, the
(b) Confirming the right of Elena Leong and those
three passengers would not have been thrown off from the
people claiming right under her, to the possession over
vehicle towards the shoulder and eventually strangulated by the
the subject property; [and]
electric wires sitting thereon. Moreover, it was also negligent of
Camilo to have allowed two persons to ride with him and for
Rapanan to ride with them when the maximum number of (c) Defendants Carmelita Leong and Edna See are
passengers of a motorcycle is two including the driver. This declared to be jointly and severally liable to pay
most likely even aggravated the situation because the plaintiff, Florentino Leong[,] the sum of Php50,000.00
motorcycle was overloaded which made it harder to drive and as moral damages;the sum of Php50,000.00 a[s]
control. When the plaintiffs own negligence was the immediate Attorney’s Fees; and the cost of suit.5
and proximate cause of his injury, he cannot recover
damages.16 The spouses Florentino Leong (Florentino) and Carmelita Leong
(Carmelita) used to own the property located at No. 539–41 Z.P.
As to the second issue, assuming arguendo that petitioner was De Guzman Street, Quiapo, Manila.6
indeed negligent, the appellate court erred in awarding damages
in favor of Camilo' s legal heirs since they were not imp leaded Petitioner Elena Leong (Elena) is Florentino's sister-in-law.7 She
in the case. It should be noted that it was Mary Gine, the had stayed with her in-laws on the property rental-free for over
common law wife of Camilo, who is the complainant in the case. two decades until the building they lived in was razed by fire.8
As a mere common law wife of Camilo, she is not considered a They then constructed makeshift houses, and the rental-free
legal heir of the latter, and hence, has no legal personality to arrangement continued.9 Florentino and Carmelita immigrated
institute the action for damages due to Camilo' s death. to the United States and eventually had their marriage dissolved
in Illinois.10 A provision in their marital settlement agreement
WHEREFORE, the petition is hereby GRANTED. The December 8, states that"Florentino shall convey and quitclaim all of his right,
2011 Decision of the Court of Appeals in C.A. G.R. CV No. 77659 title and interest in and to 540 De Guzman Street, Manila,
is hereby REVERSED and SET ASIDE. The December 9, 2002 Philippines . . . to Carmelita."11
Decision of the Regional Trial Court of Aparri, Cagayan, Branch
10 in Civil Case No. 10-305 dismissing the complaint for The Court of Appeals found that "[a]pparently intercalated in the
damages of respondents Allan Rapanan and Mary Gine lower margin of page 12 of the instrument was a long-hand
Tangonan is REINSTATED. scribbling of a proviso, purporting to be a footnote remark":12
Neither party shall evict or charge rent to relatives of the
No pronouncement as to costs. parties, or convey title, until it has been established that
Florentino has clear title to the Malabon property. Clear title to
be established by the attorneys for the parties or the ruling of a
SO ORDERED.
court of competent jurisdiction. In the event Florentino does not
obtain clear title, this court reserves jurisdiction to reapportion buyer in bad faith.33 Respondent knew at the time of the
the properties or their values to effect a 50-50 division of the purchase that Elena had actual possession of the property, thus,
value of the 2 remaining Philippine properties.13 she should have made inquiries on their right to the property.34

On November 14, 1996,14 Carmelita sold the land to Edna.15 In Petitioners argue the conjugal nature of the property, evidenced
lieu of Florentino's signature of conformity in the deed of by the title in the names of Florentino and Carmelita Leong, and
absolute sale, Carmelita presented to Edna and her father, the waiver relied upon by respondent.35 They cite Articles 336
witness Ernesto See, a waiver of interest notarized on March 11, and 1537 of the Civil Code, and Articles 8738 and 13439 of the
1996 in Illinois.16 In this waiver, Florentino reiterated his Family Code, to support their contention that respondent should
quitclaim over his right, title, and interest to the land.17 have demanded Florentino’s consent to the sale.40 Petitioners
Consequently, the land’s title, covered by TCT No. 231105, was submit that Florentino’s waiver is void since donations between
transferred to Edna's name.18 spouses are void.41

Edna was aware of the Leong relatives staying in the makeshift Petitioners argue that respondent should bear the loss42 of her
houses on the land.19 Carmelita assured her that her nieces and negligence in purchasing the property without Florentino’s
nephews would move out, but demands to vacate were consent.43 They cite at length Aggabao v. Parulan, Jr.44 to
unheeded.20 support their argument that respondent failed to exercise the
required due diligence in the purchase of the property.45
On April 1, 1997,21 Edna filed a complaint22 for recovery of Consequently, petitioners submit that the lower courts erred in
possession against Elena and the other relatives of the Leong ruling that respondent was entitled to possession of the
ex-spouses.23 property.46

The complaint alleged that in 1995 after the fire had razed the Respondent counters that only questions of law can be raised in
building on the land, Elena erected makeshift houses on the a petition for review on certiorari, and petitioners raise purely
land without Carmelita’s knowledge or consent.24 factual questions.47

In response, Elena alleged the title’s legal infirmity for lack of In any event, the lower courts correctly found that respondent is
Florentino's conformity to its sale.25 She argued that Carmelita's a purchaser in good faith for value who exercised the necessary
noncompliance with the proviso in the property agreement — diligence in purchasing the property.48
that the Quiapo property "may not be alienated without
Florentino first obtaining a clean title over the Malabon First, good faith is presumed, and petitioners did not
property"26 — annulled the transfer to Edna. substantiate their bold allegation of fraud.49 Second,
respondent did notrely on the clean title alone precisely because
On April 23, 1997, Florentino filed a complaint27 for declaration of the possession by third parties, thus, she also relied on
of nullity of contract, title, and damages against Carmelita Florentino’s waiver of interest.50 Respondent even verified the
Leong, Edna C. See, and the Manila Register of Deeds, alleging authenticity of the title at the Manila Register of Deeds with her
that the sale was without his consent.28 The two cases were father and Carmelita.51 These further inquiries prove
consolidated. respondent’s good faith.52

The Regional Trial Court, in its decision29 dated July 9,2008, Respondent submits that petitioners’ invocation of the Civil Code
ruled in favor of Edna: WHEREFORE, in view of the foregoing, provisions misleads this court.53 Philippine laws cannot govern
judgment is hereby rendered as follows: Florentino who was already an American citizen when he
executed the waiver of interest, obtained a divorce, and signed
a marital settlement agreement with Carmelita on July 8,
(a) Defendant Edna See is granted possession and 1994.54 The waiver was also a consequence of the separation
ownership over the subject property; of properties and not in the nature of a donation between
spouses.55
(b) Defendants Elena Leong and all other persons are
directed to vacate the premises at 539–541 Guzman Lastly, respondent argues that "between possessors who are not
Street, Quiapo, Manila; [and] owners and a buyer in good faith and for value,it is clear in this
case that the Respondent Edna See, the buyer in good faith, has
(c) Defendant Carmelita Leong is ordered to pay the greater right to possession over the subject property."56
plaintiff, Florentino Leong his one-half (1/2) or 2Million
with interest thereon at the rate of 6% per annum The sole issue for resolution is whether respondent Edna C. See
from the date of conveyance on November 12, 1996, is a buyer in good faith and for value.
up to the finality of this Decision; the sum of PhP
50,000.00 as moral damages; the sum of PhP
50,000.00 for attorney’s fees; and, the costs of the We affirm the Court of Appeals.
suit.
The Torrens system was adopted to "obviate possible conflicts
SO ORDERED.30 of title by giving the public the right to rely upon the face of the
Torrens certificate and to dispense, as a rule, with the necessity
of inquiring further."57
The Court of Appeals, in its decision31 dated May 19, 2010,
affirmed in toto the trial court’s decision.32 It likewise denied
reconsideration. One need not inquire beyond the four corners of the certificate
of title when dealing with registered property.58 Section 44 of
Presidential Decree No. 1529 known as the Property Registration
Thus, this petition for review was filed. Decree recognizes innocent purchasers in good faith for value
and their right to rely on a clean title:
Petitioners contend that the principle of indefeasibility of Torrens
titles does not apply when fraud exists, and respondent was a
Section 44. Statutory liens affecting title. - Every registered A determination of whether a party is an innocent purchaser in
owner receiving a certificate of title in pursuance of a decree of good faith and for value involves a factual issue beyond the
registration, and every subsequent purchaser of registered land ambit of a petition for review on certiorari.65
taking a certificate of title for value and in good faith, shall hold
the same free from all encumbrances except those noted in said Generally, factual findings of lower courts are deemed
certificate and any of the following encumbrances which may be conclusive and binding upon this court.66 No cogent reason
subsisting, namely: exists to overturn the findings of both lower courts.

First. Liens, claims or rights arising or existing under the laws Petitioners raise that "actual possession of the property by a
and Constitution of the Philippines which are not by law required person other than the vendor should put the purchaser in
to appear of record in the Registry of Deeds in order to be valid inquiry and absen[t] such inquiry[,] he cannot be regarded as a
against subsequent purchasers or encumbrances of record. bona fide purchaser against such possessors."67

Second. Unpaid real estate taxes levied and assessed within two As discussed by the Court of Appeals, respondent did conduct
years immediately preceding the acquisition of any right over further inquiry by relying not only on the certificate of title, but
the land by an innocent purchaser for value, without prejudice also on Florentino’s waiver.68
to the right of the government to collect taxes payable before
that period from the delinquent taxpayer alone.
Petitioners submit that respondent bought the property knowing
that Florentino and Carmelita were married.69 They then invoke
Third. Any public highway or private way established or Civil Code and Family Code provisions on the nature of conjugal
recognized by law, or any government irrigation canal or lateral properties and the prohibition against donations between
thereof, if the certificate of title does not state that the spouses.70
boundaries of such highway or irrigation canalor lateral thereof
have been determined.
Respondent counters that Florentino and Carmelita were already
American citizens when they executed the marital settlement
Fourth. Any disposition of the property or limitation on the use agreement.71 She even presented before the trial court
thereof by virtue of, or pursuant to, Presidential Decree No. 27 Florentino’s special power of attorney executed on March 25,
or any other law or regulations on agrarian reform.59 (Emphasis 1997 to prove Florentino’s citizenship.72
supplied)

The trial court disregarded petitioners’ argument on the


An innocent purchaser for value refers to someone who "buys applicability of our civil laws on the validity of the sale since it
the property of another without notice that some other person already deemed respondent to be an innocent purchaser in good
has a right to or interest in it, and who paysa full and fair price faith and for value.73 The trial court added that since
at the time of the purchase or before receiving any notice of "[respondent] parted witha substantial amount of P4 Million,
another person’s claim."60 One claiming to be an innocent equity dictates that she shall have possession of the property[,]
purchaser for value has the burden of proving such status.61 [n]onetheless, Florentino Leong shall get his one-half share of
the purchase price."74
The protection of innocent purchasers in good faith for value
grounds on the social interest embedded in the legal concept On the other hand, the Court of Appeals discussed that
granting indefeasibility of titles. Between the third party and the Florentino was estopped from questioning the transfer of the
owner, the latter would be more familiar with the history and property since he already waived all his rights, title, and
status of the titled property. Consequently, an owner would interests over the same.75 The court also found that the
incur less costs to discover alleged invalidities relating to the intercalated proviso in the marital settlement agreement violated
property compared to a third party. Such costs are, thus, better the mutuality of contracts principle.76
borne by the owner to mitigate costs for the economy, lessen
delays in transactions, and achieve a less optimal welfare level
for the entire society.62 The question of whether Florentino and Carmelita were already
American citizens at the time of the property’s sale to Edna —
thus no longer covered by our laws relating to family rights and
Both lower courts found respondent to be an innocent purchaser duties77 — involves a factual question outside the ambit of a
in good faith for value.63 The trial court discussed: petition for review on certiorari. In any event, respondent
exerted due diligence when she ascertained the authenticity of
By her overt acts, Edna See with her father verified the the documents attached to the deed of sale such as the marital
authenticity of Carmelita’s land title at the Registry of Deeds of settlement agreement with Florentino’s waiver of interest over
Manila. There was no annotation on the same thus deemed a the property. She did not rely solely on the title. She even went
clean title (page 19, TSN, 12 January 2005). Also, she relied on to the Registry of Deeds to verify the authenticity of the title.78
the duly executed and notarized Certificate of Authority issued These further inquiries were considered by the lower courts in
by the State of Illinois and Certificate of Authentication issued by finding respondent to be an innocent purchaser in good faith
the Consul of the Republic of the Philippines for Illinois in and for value.
support to the Waiver of Interest incorporated in the Deed of
Absolute Sale presented to her by Carmelita (Exhibit 2). Lastly, an allegation of fraud must be substantiated. Rule 8,
Examination of the assailed Certificate of Authority shows that it Section 5 of the Rules of Court provides:
is valid and regular on its face. It contains a notarial seal. . . .

SEC. 5. Fraud, mistake, condition of the mind. – In all


. . . . The assailed Certificate of Authority is a notarized averments of fraud or mistake, the circumstances constituting
document and therefore, presumed to be validand duly fraud or mistake must be stated with particularity.Malice intent,
executed. Thus, Edna See’s reliance on the notarial knowledge or other condition of the mind of a person may be
acknowledgment found in the duly notarized Certificate of averred generally. (Emphasis supplied)
Authority presented by Carmelita is sufficient evidence of good
faith. . . .64
In petitioners’ memorandum before this court, they mentioned
the rule of fraud as an exception to the indefeasibility of title
principle, but failed to substantiate their allegation by Order2 of the Regional Trial Court (RTC), Branch 76, Quezon
immediately concluding as follows: City appointing respondent Jose T. Marcelo, Jr. (Jose, Jr.) as the
new regular administrator of the intestate estate of decedent
Petitioners beg to disagree with the ruling of the Honorable Trial Jose T. Marcelo, Sr.
Court and the Honorable Court of Appeals.1âwphi1 Respondent
Edna See is not a buyer in good faith. The ruling that every The facts herein occurred in two stages: (1) the first litigation
person can rely on the correctness of the certificate of title and between two of Jose Marcelo, Sr.’s (Jose, Sr.) compulsory heirs,
that the buyer need not go beyond the four corners of the title his sons, Edward, (ascendant of herein petitioners, heirs of
to determine the condition of the property is not absolute and Edward T. Marcelo, Katherine J. Marcelo, Anna Melinda J.
admits of exception. As held in the case of Remegia Feliciano vs. Marcelo Revilla, and John Steven J. Marcelo) and respondent
Sps. Zaldivar, G.R. No. 162593, 2006 Sep 26 the principle of Jose, Jr., for the appointment of regular administrator of Jose,
indefeasibilty of a Torrens title does not apply where fraud Sr.’s estate; and (2) after Edward was appointed regular
attended the issuance of the title. The Torrens title does not administrator of Jose, Sr.’s estate and Edward’s death in 2009,
furnish a shield for fraud. As such, a title issued based on void respondent Jose, Jr.’s revival of his pursuit to administer his
documents may be annulled.79 (Emphasis in the original father’s, Jose, Sr.’s, estate. These details of these stages follow:
removed)
On 24 August 1987, decedent Jose, Sr. died intestate. He was
Even assuming the procurement of title was tainted with fraud survived by his four compulsory heirs: (1) Edward, (2) George,
and misrepresentation, "such defective title may still be the (3) Helen and (4) respondent Jose, Jr.
source of a completely legal and valid title in the hands of an
innocent purchaser for value."80 Initially, petitioner Marcelo Investment and Management
Corporation (MIMCO) filed a Petition for the issuance of Letters
Respondent, an innocent purchaser ingood faith and for value of Administration of the estate of Jose, Sr. before the RTC,
with title in her name, has a better right to the property than Branch 76, Quezon City docketed as S.P. Proc. No. Q-88-1448.
Elena. Elena’s possession was neither adverse to nor in the At first, Helen, along with her brother, Jose, Jr. separately
concept of owner.81 opposed MIMCO’s petition; the two prayed for their respective
appointment as administrator. Edward opposed Helen’s and
Article 428 of the Civil Code provides: Jose, Jr.’s respective petitions for issuance of Letters of
Administration in their favor and Edward himself prayed for his
appointment as regular administrator. Ultimately, MIMCO,
Art. 428. The owner has the right toenjoy and dispose of a George and Edward banded together: (1) opposed Helen’s and
thing, without other limitations than those established by law. Jose, Jr.’s petitions, and (2) prayed for Edward’s appointment as
The owner has also a right of action against the holder and regular administrator of Jose, Sr.’s estate.
possessor of the thing inorder to recover it.82
On 21 September 1989, pending issuance of letters of
Thus, respondent had every right to pursue her claims as she administration, the RTC appointed Helen and Jose, Jr. as special
did. administrators.

WHEREFORE, premises considered, the Court of Appeals' In an Order dated 13 December 1991, the RTC appointed
decision in CA-G.R. CV No. 92289 is AFFIRMED. Edward as regular administrator of Jose, Sr.’s estate:

SO ORDERED. WHEREFORE, PREMISES CONSIDERED, this Court resolves as it


hereby resolves to appoint Edward T. Marcelo as the Regular
G.R. No. 209651 November 26, 2014 Administrator of the estate of the late Jose P. Marcelo, Sr. upon
the posting of a bond amounting to THREE HUNDRED
THOUSAND PESOS (P300,000.00). The aforementioned
MARCELO INVESTMENT AND MANAGEMENT
appointment shall take effect upon his oath as such and
CORPORATION, and THE HEIRS OF EDWARD T.
conditioned by a bond of P300,000.00 which shall insure the
MARCELO, NAMELY, KATHERINE J. MARCELO, ANNA
fidelity of the said regular administrator in the performance of
MELINDA J. MARCELO REVILLA, and JOHN STEVEN J.
his duties and obligations as such.3
MARCELO, Petitioners,
vs.
JOSE T. MARCELO, JR., Respondent. Taking issue with the RTC’s Order and questioning Edward’s
appointment, Jose, Jr. filed successive oppugnant motions: (1)
motion for reconsideration of the 13 December 1991 Order; and
DECISION
(2) omnibus motion alleging the RTC Acting Presiding Judge
Efren N. Ambrosio’s (Judge Ambrocio) unusual interest and
PEREZ, J.: unduehaste in issuing letters of administration in favor of
Edward.
The vesting of succession rights on the heirs upon the death of
the decedent gives occasion for the baring of sibling disaccords In an Order dated 12 March 1992, the RTC, through Judge
right at the onset of the estate proceedings which is the Ambrosio, denied Jose, Jr.’s motion for reconsideration:
determination of the administrator of the decedent's estate. In
such instances, the liquidation, partition and distribution of the
WHEREFORE, prescinding from the foregoing, and fortified by
decedent's estate is prolonged and the issue of administration
the balm of clear judicial conscience, the herein motion is
becomes, contrary to its very objective, itself the hindrance to
hereby denied. The letters of administration under date of March
the ultimate goal of settlement of the decedent's estate. We
4, 1992 issued in favor of Edward T. Marcelo is maintained with
catch a glimpse of that in this case.
full force and effect. The letters testamentary issued in favor of
Special Administrator, Jose T. Marcelo, Jr. under date of October
Before us is a petition for review on certiorari under Rule 45 of 2, 1989 as well as the bond posted by him are hereby ordered
the Rules of Court assailing the 24 May 2013 Decision of the cancelled. Likewise, the Special Administrator, Jose T. Marcelo,
Court of Appeals in CA-G.R. CV No. 952191 which affirmed the Jr. is hereby ordered to forthwith deliver to the regular
administrator the goods, chattels, money and estate of the directed to submit their project of partition for approval and
deceased in his hands.4 consideration of the [c]ourt.8 (Emphasis supplied)

In the same vein of denial, the RTC ruled on the Omnibus On 15 January 2001, Edward filed a Manifestation and Motion
Motion, thus: stating that:

After a re-examination of the evidence adduced by the parties 1. Oppositor [Jose, Jr.] now conforms to, and has
and a consideration of the arguments raised in the aforecited accordingly signed, the attached "Liquidation of the
pleadings, this court arrived at a conclusion that no substantial Inventory of the Estate of Jose P. Marcelo, Sr. as of
error was committed by then Acting Presiding Judge Edren N. July 26, 2000" x x x.
Ambrosio which would warrant a reversal of the questioned
orders, namely, the order dated December 13, 1991 and March 2. Regular Administrator [Edward]respectfully prays
12, 1992.5 that the Liquidation, duly signed by all four (4)
compulsory heirs, be approved as the project of
Adamant on his competence to better administer his father’s partition of the Estate of Jose P. Marcelo Sr.9 and
estate, Jose, Jr. appealed Edward’s appointment as regular moved for the approval of the Liquidation of the
administrator to the Court of Appeals in CA-G.R. CV No. 43674. Inventory of the Estate of Jose, Sr. as the project of
However, the appellate court affirmed in toto6 the Orders dated partition of the Estate of Jose, Sr.
1 October 1993, 13 December 1991 and 12 March 1992 of the
intestate court. The project of partition reads:

The question of who between Edwardand Jose, Jr. should On 16 February 2001, the RTC issued an Order approving the
administer their father’s estate reached us in G.R. No. 123883 partition of Jose, Sr.’s estate as proposed by Edward:
(Jose Marcelo, Jr. v. Court of Appeals and Edward Marcelo): we
did not find reversible error in the appellate court’s decision in
CA-G.R. CV No. 43674. We disposed of the case via a Minute Regular administrator [Edward] manifests that oppositor Jose T.
Resolution dated 22 May 1996,7 ultimately affirming the RTC’s Marcelo, Jr. had already expressed his conformity to the
and the appellate court’s separate rulings of Edward’s Liquidation of the Inventory of the Estate of Jose P. Marcelo,
competence and better suited ability to actas regular Sr., as of July 26, 2000, as evidenced by his signature therein.
administrator of Jose, Sr.’s estate. He therefore prays that the said document which bears the
conformity ofall four (4) compulsory heirs of Jose P. Marcelo, Sr.
be approved as the project of partition of the estate of Jose P.
Thereafter, Jose, Jr. persistently opposed Edward’s actions as Marcelo, Sr.
administrator and his inventory of Jose, Sr.’s estate. He filed
anew serial motions which culminated in the following 23 June
2000 Order of the RTC: Finding said liquidation of the Inventory of the Estate of Jose P.
Marcelo, Sr. to bear the conformity of all the heirs of the
decedent and considering further that the period for filing of
After a careful study of the arguments raised by the parties in money claims against the subject estate had already lapsed, the
support of their respective claims, the Court finds that the Court resolves to approve said liquidation of Inventory as the
motion filed by oppositor [Jose, Jr.] is not well-taken. project ofpartition of the estate of Jose P. Marcelo, Sr.
Nonetheless, let the distribution of the estate of Jose P. Marcelo,
Anent the submission of complete list of stockholders of all the Sr. among his compulsory heirs in accordance with the approved
Marcelo group of companies together with the number and Liquidation of the Inventory of the Estate of Jose P. Marcelo, Sr.
current par value of their respective shareholding, suffice it to be deferred until herein regular administrator Edward T. Marcelo
say that as correctly pointed out by regular administrator has submitted to the Court proof of payment of estate taxes of
[Edward], the shares of stock of the decedent will be equally the subject estate.11
distributed to the heirs that there is no necessity therefor.
On 14 September 2001, the RTC archived the intestate
Considering oppositor’s insistence on the submission by regular proceedings, S.P. Proc. No. Q-88-1448, pending Edward’s
administrator of a true and updated list as well as current submission of proof of payment of estate taxes as directed in
market values of all real estate and personal properties of the the 16 February 2001 Order.12
decedent, the [c]ourt hereby directs herein oppositor [Jose, Jr.]
to inform the regular administrator of such data to aid the On 3 July 2009, Edward died,13 ushering in the antecedents to
regular administrator in the preparation of a complete and the present controversy. Wasting no time, Jose, Jr. moved to
accurate inventory of the real and personal properties revive the intestate proceedings involving his father’s estate,
comprising the estate of Jose, Sr. S.P. Proc. No. Q-88-1448, and moved for his appointment as
new regular administrator thereof.
As regards oppositor [Jose, Jr.’s] prayer for the submission by
regular administrator of a true and complete accounting of the Petitioners MIMCO and heirs of Edward, joined by George,
subject corporations reckoned from the death of[Jose, Sr.] up to opposed Jose, Jr.’s motion and nominated Atty. Henry Reyes as
the present, the [c]ourt likewise sees no need therefor as said regular administrator in Edward’s stead.
corporations are not parties to the case and have separate and
distinct personalities from the stockholders.
On 6 January 2010, the RTC issued the assailed Order, now
appointing Jose, Jr. as regular administrator of Jose, Sr.’s
With respect to the project ofpartition, it appears that regular estate:
administrator had already furnished oppositor [Jose, Jr.] with a
copy thereof. Considering however oppositor [Jose, Jr.’s] oral
motion for regular administrator to identify the heirs of the Contrary to the assertion of petitioners, there is no showing that
decedent and to secure their conformity to the project of the [c]ourt has previously declared oppositor-movant [Jose, Jr.]
partition, oppositor [Jose, Jr.] is given ten (10) days from receipt unfit to be appointed as an administrator.
of the project of partition bearing the conformity of the heirs
within to (sic) to comment thereon. Thereafter, the parties are
The estate is left with no one who will administer the estate, Hence, this appeal by certiorariascribing grave error in the Court
i.e., to liquidate the estate and distribute the residue among the of Appeals’ Decision, to wit:
heirs. As wellsettled, to liquidate means to determine the assets
of the estate and to pay all debts and expenses. Records clearly A.
show that the estate taxes due to the government have not
been paid. It is, in fact, held that approval of the project of
partition does not necessarily terminate administration x x x. THERE WAS NO NEED TO APPOINT AN
There is a necessity to appoint a new regular administrator. ADMINISTRATOR FOR THE ESTATE OF JOSE P.
Equally noteworthy is that the judicially approved inventory was MARCELO, SR. AS THERE WAS THEN NO PENDING
prepared way back on August 30, 2000. It is but imperative that INCIDENTS IN THE ESTATE PROCEEDINGS TO
the same be updated. WARRANT THE APPOINTMENT OF AN
ADMINISTRATOR.
In the sound judgment of the [c]ourt, oppositor-movant [Jose,
Jr.], a legitimate child of the decedent, appears to occupy higher B.
interest than Atty. Henry A. Reyes in administering the subject
estate. THE COURT OF APPEALS ERRED IN APPOINTING
JOSE, JR. AS THE ADMINISTRATOR OF JOSE, SR.’S
WHEREFORE, premises considered, oppositor Jose T. Marcelo, ESTATE CONSIDERING THAT JOSE, JR. WAS FOUND,
Jr. is appointed as the new regular administrator of the estate of BY A FINAL, IMMUTABLE, AND UNALTERABLE
Jose T. Marcelo, Sr. JUDGMENT, TO BE UNFIT TO ACT AS SUCH. THUS,
THE COURT OF APPEALS WAS CLEARLY MISTAKEN
WHEN IT DISREGARDED THE EARLIER
Before he enters upon the execution of his trust, and letters of PRONOUNCEMENT ON THE UNFITNESS OF JOSE, JR.
administration issue, he shall give a bond in the amount of TO ACT AS AN ADMINISTRATOR AS IT GOES AGAINST
P200,000.00, conditioned as follows: THE PRINCIPLE OF CONCLUSIVENESS OF JUDGMENT.

a. To make and return to the [c]ourt, within three (3) C.


months, an updated inventory of all goods, chattels,
rights, credits, and estate of the deceased which shall
come to his possession or knowledge or to the THE COURT OF APPEALS VIOLATED THE
possession of any other person for him; PETITIONERS’ RIGHT TO DUE PROCESS, WHEN IT
AFFIRMED THE RTC ORDERS, WITHOUT EVEN
BOTHERING TO EXPLAIN WHY JOSE, JR. AND NOT
b. To administer according to the Rules of Court rules, GEORGE, SHOULD BE APPOINTED AS
all goods, chattels, rights, credits, and estate which ADMINISTRATOR OF JOSE, SR.’S ESTATE.15
shall at any time come to his possession or to the
possession of any other person for him, and from the
proceeds to pay and discharge all debts, legacies, and The appeal is impressed with merit. While we agree with the
charges on the same, or such dividends thereon as lower courts that the appointment of a regular administrator is
shall be decreed by the court, not to mention the taxes still necessary, we disagree with the appointment of Jose, Jr. as
due to the government; new regular administrator of Jose, Sr.’s estate.

c. To render a true and just account of his We first dispose of the issue of whether the appointment of a
administration to the [c]ourt within one (1) year; and regular administrator is still necessary at this liquidation,
at any other time when required by the Court; and partition and distribution stage of the intestate proceedings
involving Jose, Sr.’s estate.
d. To perform all orders of the [c]ourt.14
Petitioners contend that the appointment of a regular
administrator is unnecessary where there remains no pending
Petitioners filed an Omnibus Motion for Reconsideration of the 6 matter in the settlement of Jose, Sr.’s estate requiring attention
January 2010 Order and now moved for the appointment and administration. Specifically, petitioners point out that there
instead of George as administrator of Jose, Sr.’s estate. After is no existing or unliquidated debt against the estate of Jose, Sr,
Comment on the Omnibus Motion, the RTC issued another Order the settlement thereof being already at the liquidation, partition
dated 23 March 2010, denying the Omnibus Motion and and distribution stage. Further on that, the liquidation and
affirming the appointment of Jose, Jr. as new regular proposed partition had long been approved by the probate
administrator. Petitioners appealed the RTC’s twin Orders dated court.
6 January 2010 and 23 March 2010 before the appellate court.
This time around, the Court of Appeals affirmed Jose, Jr.’s
appointment as new regular administrator. Ruling that the We are not convinced. The settlement of Jose, Sr.’s estate is not
selection of administrator lies in the sound discretion of the trial yet through and complete albeit it is at the liquidation, partition
court, the Court of Appeals held that: and distribution stage.

1. The prior Order dated 13 December 1991 of the Rule 90 of the Rules of Court provides for the Distribution and
RTC appointing Edward as regular administrator Partition of the Estate. The rule provides in pertinent part:
instead of Jose, Jr., which appointment was affirmed
by this Court in G.R. No. 123883, did not make a SECTION 1. When order for distribution of residue made. – x x x
finding on Jose, Jr.’s fitness and suitableness to serve
as regular administrator; and
No distribution shall be allowed until payment of the obligations
above mentioned has been made or provided for, unless the
2. On the whole, Jose, Jr. iscompetent and "not distributees, or any of them, give a bond, in a sum tobe fixed by
wanting in understanding and integrity," to act as the court, conditioned for the payment of said obligations within
regular administrator of Jose, Sr.’s estate. such time as the court directs.
xxxx personalities from the Marcelo patriarch, the decedent, Jose,
Sr.18
SEC. 3. By whom expenses of partition paid. – If at the time of
the distribution the executor or administrator has retained More importantly, the liquidation scheme appears yet to be
sufficient effects in his hands which may lawfully be applied for effected, the actual partition of the estate, where each heir
the expenses of partition of the properties distributed, such separately holds his share in the estate as that which already
expenses of partition may be paid by such executor or belongs to him, remains intangible and the ultimate distribution
administrator when it appears equitable to the court and not to the heirs still held in abeyance pending payment of estate
inconsistent with the intention of the testator; otherwise, they taxes.19
shall be paid by the parties in proportion to their respective
shares or interest in the premises, and the apportionment shall Significantly, even the Liquidation of the Inventory of Jose, Sr.’s
be settled and allowed by the court, and, if any person estate states that the valuation amount of the shares of stock as
interested in the partition does not pay his proportion or share, listed therein is based on par value, which may have varied
the court may issue an execution in the name of the executor or given the passage of time. The same document delivers a very
administrator against the party not paying for the sum assessed. important notation that the equal distribution of the listed assets
of the estate will depend on the actual selling price of these
In this case, we observe that the Liquidation of the Inventory of assets less taxes and other deductions:
the Estate, approved by the RTC in its Order dated 16 February
2001, is not yet in effect and complete. We further note that Above assets will be distributed equally by the four (4)
there has been no manifestation forthcoming from any of the [compulsory heirs] depending if these will be sold or not. It is
heirs, or the parties in this case, regarding the completion of the very important to note that equal distribution will be based on
proposed liquidation and partition of the estate. In fact, as all actual selling price minus taxes and other deduction if any, on
parties are definitely aware, the RTC archived the intestate the above inventories of estate properties.20 To date, more
proceedings pending the payment of estate taxes. than a decade has passed since the intestate proceedings were
archived, thus, affecting the value of the estate’s assets.
For clarity, we refer to the Liquidation of the Inventory of the
Estate, which was divided into two (2) parts: (1) Settlement of From all of the foregoing, it is apparent that the intestate
the Claims against the Estate, and (2) After Settlement of the proceedings involving Jose, Sr.’s estate still requires a regular
Claims, distribution of the remaining assets of the estate to the administrator to finally settle the estate and distribute remaining
four (4) compulsory heirs. The same document listed payables assets to the heirs of the decedent.
and receivables of the estate dependent on a number of factors
and contingencies:
We now come to the issue of whether Jose, Jr. may be
appointed as regular administrator despite the previous Order of
1. Payables to various companies where the Marcelo family had the RTC on 13 December 1991, affirmed by the appellate court
equity amounting to P6,893,425.33; and this Court in G.R. No. 123883, that as between Jose, Jr. and
Edward, the latter was better suited to act as regular
Considering that the Estate as of June 3, 1999 has no sufficient administrator of their father’s estate. Stated differently, whether
cash to pay-off the above claims of P6,893,425.33, [Edward] Jose, Jr.’s previous non-appointment as regular administrator of
can work out an offsetting arrangement since the Estate has Jose, Sr.’s estate bars his present appointment as such even in
also receivables or equity from these companies as shown lieu of Edward who is now dead.
below:16
A close scrutiny of the records reveals that in all of Jose, Jr.’s
xxxx pleadings opposing Edward’s appointment as regular
administrator, he simultaneously prayed for his appointment as
2. Receivables from the same companies amounting to regular administrator of their father’s estate. In short, he
P7,748,448.19; proffered his competence and qualification to be appointed as
regular administrator as a legal issue for resolution of the
courts. Essentially, Jose, Jr. was weighed and found wanting by
If the above receivables and equity with total value of the RTC, the appellate court, and this Court.
P7,748,448.19 will be offset against the claims of P6,893,425.33
the net will show the following:17
In its 13 December 1991 Order, the RTC categorically ruled on
who between Edward and Jose, Jr. was fit to administer the
xxxx estate of Jose, Sr., framing the issue in this wise:

3. An offsetting of the payables and receivables to be arranged The [c]ourt’s choice as to who among the [compulsory heirs]
by the then regular administrator, Edward; and will be appointed regular administrator of the estate of Jose, Sr.
is now limited to Edward and Jose, Jr. in view of the withdrawal
4. Offsetting of the receivables from Marcelo Rubber & Latex of Helen T. Marcelo.
Products, Inc. amounting to P4,341,147.26 against the net
claims against the estate amounting to 3,486,124.40 resulting in It is this [c]ourt’s observation that the continuous internal
net receivables of the estate in the amount of P855,022.86. wranglings between the heirs would achieve nothing. In the
meantime, the estate of the late Jose, Marcelo, Sr. isdragged
There has been no showing from either of the parties that the further into the quagmire of dissipation and loss. It would not be
receivables of, and claims against, Jose, Sr.’s estate has been amiss to state that the animosity among the interested
actually liquidated, much less, if an offsetting occurred with the [petitioners therein], Edward and Jose, Jr. have considerably
companies listed in the inventory on one hand, and Jose, Sr.’s increased since the filing of their respective petitions, but the
estate, on the other. Although the Marcelo family, in particular [c]ourt on the basis of their qualifications will have to decide
the compulsory heirs of Jose, Sr., hold equity in the corporations whom to appoint as regular administrator. Willingness to act
mentioned in the inventory, considering that the corporations and/or serve as regular administrator is no longer in issue here
are family owned by the Marcelos’, these corporations are as both applicants are undoubtedly willing to serve as such.
different juridical persons with separate and distinct However, after subjecting the evidence, both testimonial and
documentary to careful judicial study, this [c]ourt now resolves someone, oversee, manage and preserve the estate of Jose, Sr.,
as it hereby resolves to appoint Edward T. Marcelo as regular as there was the danger of the estate being dissipated.
administrator of the estate of the late Jose, Sr. Moreover, the [c]ourt never touched on the issue of the
qualifications of the applicants, as there was in fact, no evidence
As aptly cited by petitioner, Edward T. Marcelo, there can be no presented on the matter, other than the bare allegations of the
adverse conclusion that may be inferred from the withdrawal of applicants that they were all qualified to act as such.21
a petition or nomination. While it may be true that initially the (Citations omitted)
petition for the issuance of letters testamentary was filed by
Marcelo Investment and Management Corporation (MIMCO for Notably, the decision of the trial court appointing Edward as the
brevity) and by Danilo O. Ibay as nominee of Edward and Administrator of the Estate of Jose, Sr., which decision had the
George Marcelo, the same did not constitute a waiver on the imprimatur of a final resolution by this Court, was not merely a
part of Edward T. Marcelo. This can be gleaned from the comparison of the qualifications of Edward and Jose, Jr., but a
withdrawal of the nomination of DaniloO. Ibay and the finding of the competence of Edward compared to the unfitness
subsequent filing of Edward T. Marcelo of his petition for the of Jose, Jr.
appointment as legal administrator on September 14, 1989.
Further, nowhere in the provisions of the Revised Rules of Court As against this Order of the RTC, its subsequent opposite Order
is sucha nomination of a party other than a compulsory heir dated 6 January 2010 appointing Jose, Jr. as new regular
prohibited. administrator only had two (2) sentences to essentially reverse
the previous findings.
The documents presented by Jose, Jr. purporting to show that
the deceased had other assets other than those enumerated in Contrary to the assertion of petitioners, there is no showing that
the original petition filed by MIMCO and which should have been the [c]ourt has previously declared [Jose,Jr.] unfit to be
included in the estate cannot be accorded any weight or appointed as an administrator.
credence by this [c]ourt, as the individual who supposedly
prepared the document was never identified and the sources of
information notdisclosed. Upon the other hand, the petition filed xxxx
by MIMCO was based on the Financial Statements prepared by
an independent auditor, A. F. Pablo and Associates. On the basis In the sound judgment of the [c]ourt,[Jose, Jr.], a legitimate
of the information provided by MIMCO in the original petition, child of the decedent, appears to occupy a higher interest than
this [c]ourt can determine the probable value and nature of the Atty. Henry A. Reyes in administering the subject estate.22
estate of the deceased Jose P. Marcelo, Sr.
The first sentence contained in the Order of 6 January 2010 is
There is no argument that both Edward and Jose, Jr. are willing disproven by the definite finding of "deepconcern" in the original
to serve as regular administrator but undoubtedly, Edward Order. The second sentence does not amount to a finding of a
appears to be more responsible and competent that his younger qualification superior to that of the rest of the children of Jose,
brother, Jose, Jr. This is bolstered by the fact that the family Sr.
corporations and his own personal corporation are presently of
sound financial condition. This success, the [c]ourt believes can
In affirming the issuance of letters of administration to Jose, Jr.,
be attributed to the management skills and the sound
the appellate court dwelt largely on the considerable latitude
management policies Edward has adopted throughout the years.
allowed a probate court in the determination of a person’s
Likewise, it can be deduced that among the four(4) children of
suitability for the office of judicial administrator. The Court of
Jose, Sr., it was Edward whom he trusted the most. The
Appeals only briefly delved into Jose, Jr.’s numerous attempts to
deceased valued the opinion of Edward on decisions that had to
be appointed regular administrator of Jose, Sr.’s estate which
bemade and he would have Edward around in his meetings to
were all denied previously by the same probate court:
discuss matter relating to the corporations which he managed.
Further, as can be gleaned from the evidence presented by
Jose, Jr., it was Edward Marcelo who was appointed as trustee The RTC Order dated 13 December 1991, as affirmed by this
to vote the deceased’s share in a Marcelo Corporation, Polaris [c]ourt in Decision dated 30 March 1995, and by the Supreme
Marketing Corporation. It was also Edward who was made co- Court in the Resolution dated 22 May 1996, did not declare
signatory when the deceased deposited money in the bank to be [respondent] Jose, Jr. unfit to serve as administrator. What was
given to the children of Jose, Jr. It is thus quite evident that ruled upon by the RTC, and affirmed by this [c]ourt, and by the
Edward was really the most trusted child of the deceased. Supreme Court, was the appointment of Edward as the
administrator of Jose, Sr.’s estate, and the denial of
[respondent] Jose, Jr.’s opposition to Edward’s appointment.
Upon the other hand, this court looks with deep concern the
Nowhere was there any categorical ruling, or a definite finding,
manner by which Jose, Jr. treats the corporate properties of the
that [respondent] Jose, Jr. was, unfit to execute the duties of
Marcelo Group of Companies. Evidence shows that sometime
the trust by reason of drunkenness, improvidence, or want of
October 21, 1998, Jose, Jr. took evidencing liabilities of the
understanding or integrity, or by reason of conviction of an
deceased and other pertinent records and up to the present has
offense involving moral turpitude. Thus, there is no merit in
not returned them. Jose, Jr. cannot justify the taking of the
[petitioners’] contention that the finding on the unfitness of
records/or borrowing of the same by asserting that he is now
[respondent] Jose, Jr. became binding, and precluded the RTC
keeping them in his capacity asSpecial Administrator as he was
from appointing [respondent] Jose, Jr., as the new regular
appointed Special Administrator only on September 21, 1989
administrator of Jose, Sr.’s estate.
whereas the records were "borrowed" as early as October 21,
1988. Be that as it may, what belies Jose, Jr.’s assertion is the
fact that the records of the corporation which were allegedly Jurisprudence has long held that the selection of an
"borrowed/taken" do not form part of the estate of Jose, Sr. but administrator lies in the sound discretion of the trial
to the corporation from where they were taken. court.1âwphi1 The determination of a person’s suitability for the
office of judicial administrator rests, to a great extent, in the
sound judgment of the court exercising the power of
Likewise, it should be noted that the appointment of Jose, Jr. as
appointment and said judgment is not to be interfered with on
one of the Special Administrators does not necessarily make him
appeal unless the said court is clearly in error. The RTC did not
more qualified to be appointed as regular administrator. The
err in appointing Jose, Jr. as the new administrator, even
records of the case will bear out, that the appointmentof a
though his previous prayer for appointment was denied.
Special Administrator was premised on the need to have
Notably, by virtue of Edward’s death, the office of the regular 1. Edward has kept the Marcelo family corporations
administrator of Jose, Sr.’s estate was vacated, and it was within and his own in good financial condition;
the jurisdiction of the RTC, as probate court, to appoint a new
administrator.23 2. The trust reposed by the decedent on Edward who
voted on Jose, Sr.’s behalf in a Marcelo corporation;
Evidently, the Court of Appeals like the RTC in its second order, and
closed its eyes on the facts detailed by the RTC in the first
order. 3. Edward being made a co-signatory for money
deposited for Jose, Jr.’s own children.
Considering the two (2) sets of conflicting rulings of the RTC
and the Court of Appeals in the two stages ofthis litigation, we Plainly, the RTC in its Order dated 13 December 1991, found
put into proper perspective the 13 December 1991 Order of the Edward competent to serve as regular administrator, more
RTC appointing Edward over Jose, Jr. as regular administrator of competent than Jose, Jr., preferred despite equal status in the
their father’s estate, which Order was upheld by us in G.R. No. Order of Preference, manifesting none of the disqualifications
123883. set by law. Still and all, the same Order likewise judged Jose,
Jr.’s suitableness and fitness,or lack thereof, for the office of
Section 1, Rule 78 of the Rules of Court provides for the general administrator, albeit in comparison withEdward and not with the
disqualification of those who wish to serve as administrator: rest of Jose, Sr.’s children. Jose, Jr. was not what Edward
was.1âwphi1 The fact however, that Edward was made co-
SECTION 1. Who are incompetent to serve as executors or signatory for money deposited for Jose, Jr.’s own children is a
administrators.— No person is competent to serve as executor telling commentary against Jose, Jr.’s competence, if not
or administrator who: integrity.

(a) Is a minor; Then too, the RTC in the original order made a specific finding,
"[viewing it] with deep concern," Jose, Jr.’s handling of the
records of the Marcelo Group of Companies. It euphemistically
(b) Is not a resident of the Philippines; and called taking of the records evidencing liabilities of the decedent
as "borrowed/taken." However, the RTC noted that such cannot
(c) Is in the opinion of the court unfit to execute the be justified as the records and other pertinent documents taken
duties of the trust by reason of drunkenness, "do not form part of the estate of Jose P. Marcelo, Sr. but to the
improvidence, or want of understanding or integrity, or corporation from where they were taken."
by reason of conviction of an offense involving moral
turpitude. Contrary to the recent rulings of the RTC and the Court of
Appeals appointing Jose, Jr. as administrator, there is a previous
Section 6 of the same rule, on the other hand, lists an order of and categorical ruling on Jose, Jr.’s fitness to serve as such:
preference in instances when there is a contest of who should
be appointed administrator: It is Jose T. Marcelo’s position that he is more competent,
qualified and suitable for the position of regular
SEC. 6. When and to whom letters of administration granted.— administrator.1âwphi1 This, above all else is the main thrust of
If no executor is named in the will, or the executor or executors this second motion for reconsideration. However, the court in
are incompetent, refuse the trust, or fail to give bond, or a the exercise of its sound discretion after a consideration of the
person dies intestate, administration shall be granted: evidence adduced by both parties, ruled otherwise and instead
appointed Edward T. Marcelo as regular administrator.
(a) To the surviving spouse, or next of kin, or both, in
the discretion of the court, or to such person as such x x x True, Jose T. Marcelo, Jr. was initially appointed as Special
surviving spouse, or next of kin, requests to have Administrator of the estate of their deceased father but the
appointed, if competent and willing to serve; same was without the benefit of a hearing on the qualifications
of the parties concerned. x x x This did not however confer on
Jose Marcelo, Jr. as Special Administrator a better right to the
(b) If such surviving spouse, or next of kin, or the
office of regular administrator. x x x.
person selected by them, be incompetent or unwilling,
or ifthe surviving spouse, or next of kin, neglects for
thirty (30) days after the death of the person to apply xxxx
for the administration or to request that administration
be granted to some other person, it may be granted to The third assigned error raised by [Jose, Jr.] "that both trial
one ormore of the principal creditors, if competent and judges erred in not appointing Special Administrator Jose T.
willing to serve; Marcelo, Jr. as Regular Administrator considering his tested
probity and competence as special administrator, his good name
(c) If there is no such creditor competent and willing and integrity in accordance with the evidence," is devoid of
to serve, it may be granted to such other person as merit, as already discussed earlier.
the court may select.
The findings of the lower court in this regard deserve full
Because Edward and Jose, Jr. are both compulsory heirs of Jose, consideration x x x.24
Sr., they were, at the time the issue of administration first
cropped, equally preferred to administer Jose, Sr.’s estate. Undoubtedly, there has been a declaration that Jose, Jr. is unfit
Necessarily, the courts also delved into the question of their and unsuitable to administer his father’s estate.
suitableness and fitness to serve as administrator, preferring
one over the other, framing it as Edward being more fit and
suited to be administrator: To obviate further delay in the settlement of Jose, Sr.’s estate,
we emphasize that such is already at the liquidation and
distribution stage which project of partition had long been
conformed to by the parties.
We note that this case has been unnecessarily prolonged and The petitioner, through its authorized representative Ronnie P.
resulted in added litigation by the non-payment of estate taxes Inocencio (Inocencio), filed with the RTC on June 4, 1998 an
which is the ultimate responsibility of the heirs having inchoate application for registration of the subject properties situated in
right in the estate, should there be assets remaining, to be Barangay Napindan, Taguig, Metro Manila, with an area of
partitioned and distributed. The inheritance tax is an obligation 27,477 square meters, 23,179 sq m and 45,636 sq m, more
of the estate, indirectly the heirs: particularly described as follows:

SECTION 1. When order for distribution of residue made. – SWO-00-001771, being a conversion of Lot 3079, Mcadm-590-D,
When the debts, xxx, and inheritance tax, if any, chargeable to containing an area of Twenty[-]Seven Thousand Four Hundred
the estate in accordance with law, have been paid, xxx. Seventy[-] Seven (27,477) square meters, more or less; SWO-
00-001768, being a conversion of Lot 3071, Mcadm-590-D,
No distribution shall be allowed until payment of the obligations containing an area of Twenty[-] Three Thousand One Hundred
above mentioned has been made or provided for, unless the Seventy[-]Nine (23,179) square meters, more or less; and SWO-
distributees, or any of them, give a bond, in a sum to be fixed 00-001773, being a conversion of Lot 3082, Mcadm-590-D,
by the court, conditioned for the payment of said obligations containing an area of Forty[-]Five Thousand Six Hundred
within such time as the court directs.25 Thirty[-]Six (45,636) square meters, more or less, all brought
under the operation of the Property Registration Decree (PD
1529) or Commonwealth Act 141, as amended x x x.5
Given the factual considerations that led to the prior findings on
the unfitness of Jose, Jr. to act as regular administrator; the
Affidavit of Helen26 preferring George as administrator; and the The State, through the Office of the Solicitor General, interposed
conformity on record of the rest of Jose, Sr.’s heirs to George’s its opposition to the application.1avvphi1 During the initial
administration as reflected in petitioners’ Appellants’ Briefbefore hearing of the case on May 4, 1999, the petitioner presented
the Court of Appeals: and marked documentary evidence6 to prove its compliance
with jurisdictional requirements.7

More importantly, consistent with Section 6, Rule 78 of the


Rules of Court, not only is George the eldestson of Jose, Sr. and, On October 25, 1999, the petitioner was allowed to present its
therefore, his most immediate kin, he has, moreover, been evidence before the Branch Clerk of Court of the RTC.
chosen by the rest of the heirs of Jose, Sr. to perform the Inocencio, the petitioner’s sales manager, testified that the
functions of an administrator. In this regard, in addition to subject properties were purchased on August 28, 1989 by the
George and the heirs of Edward, Helen executed an Affidavit to petitioner from sellers Magdalena Samonte, Jaime Aldana and
manifest her opposition to Jose, Jr. and to support the Virgilio Navarro. The properties were declared for taxation
appointment of George and herself as joint administrators, a purposes on August 9, 1989.After the sale, the petitioner
copy of which was given to the [Court of Appeals.]27 we thus occupied the properties and planted thereon crops like rice, corn
issue Letters of Administration to George to facilitate and close and vegetables.8
the settlement of Jose, Sr.’s estate.28
Witness Cenon Serquiña (Serquiña) supported the application
WHEREFORE, the petition is GRANTED. The Decision of the for registration by claiming that he had been the caretaker of
Court of Appeals in CA-G.R. CV No. 95219 and the Order dated the subject properties since 1957, long before the lots were
6 January 2010 of the Regional Trial Court, Branch76, Quezon purchased by the petitioner. Serquiña alleged that no person
City in S.P. Proc. No. Q-88-1448 are REVERSED and SET ASIDE. other than the applicant and its predecessors-in-interest had
Letters of Administration shall issue to George T. Marcelo upon claimed ownership or rights over the subject properties.9
payment of a bond to be set by the Regional Trial Court, Branch
76, Quezon City. The Regional Trial Court, Branch 76, Quezon On November 27, 2001, the RTC rendered its Decision10
City is likewise directed to complete the settlement of the granting the petitioner’s application. The decretal portion of its
decedent's, Jose T. Marcelo, Sr. 's, estate with dispatch starting decision reads:
from an Order setting a deadline for the parties to pay the
estate taxes and to inform this Court when such has been paid. WHEREFORE, in view of the foregoing, the Court finds the
Applicant, Remman Enterprises, Inc., represented in this matter
SO ORDERED. by its representative, Ronnie P. Inocencio, the absolute owner in
fee simple of three (3) parcels of land, all located at Barangay
G.R. No. 188494 November 26, 2014 Napindan, Taguig, Metro Manila, more particularly described as
follows:

REMMAN ENTERPRISES, INC., Petitioner,


vs. 1.) SWO-00-001771, being a conversion of Lot 3079,
REPUBLIC OF THE PHILIPPINES, Respondent. Mcadm-590-D;

DECISION 2.) SWO-00-001768, being a conversion of Lot 3071,


Mcadm-590-D; and

REYES, J.:
3.) SWO-00-001773, being a conversion of Lot 3082,
Mcadm-590-D
This resolves the petition for review on certiorari1 filed by
Remman Enterprises, Inc. (petitioner) under Rule 45 of the
Rules of Court to assail the Decision2 dated May 23, 2008 and together with their corresponding technical descriptions.
Resolution3 dated June 22, 2009 of the Court of Appeals (CA) in
CA-G.R. CV No. 74418. The CA reversed the Decision4 dated Once the foregoing Decision has become final, let the
November 27, 2001 of the Regional Trial Court (RTC) of Pasig corresponding decree of registration issue. SO ORDERED.11
City, Branch 155, in LR Case No. N-11379, which granted the
petitioner's application for land registration of three (3) parcels Dissatisfied, the State appealed to the CA by alleging
of land situated in Taguig, Metro Manila (subject properties). substantive and procedural defects in the petitioner’s
application. It argued that the identity of the subject properties
was not sufficiently established. The State further claimed that subject properties were already declared alienable and
the character and length of possession required by law in land disposable by the government. Its reliance on a Report,18
registration cases were not satisfied by the petitioner. issued by the CENRO, DENR National Capital Region, West
Sector, was misplaced. The Court ruled in Republic v. Medida:19
Finding merit in the appeal, the CA reversed the RTC decision.
The dispositive portion of the CA Decision dated May 23, 2008 In Republic v. T.A.N. Properties, Inc.,this Court explained that a
reads: Provincial Environment and Natural Resources Office (PENRO) or
CENRO certification, by itself, fails toprove the alienable and
WHEREFORE, the DECISION DATED NOVEMBER 27, 2001is disposable character of a parcel of land. We ruled:
REVERSEDand SET ASIDE and this case is DISMISSED.
[I]t is not enough for the PENRO or CENRO to certify that a land
SO ORDERED.12 is alienable and disposable. The applicant for land registration
must prove that the DENR Secretary had approved the land
classification and released the land of the public domain as
The CA explained that the survey plans and technical alienable and disposable, and that the land subject of the
descriptions submitted by the petitioner failed to establish the application for registration falls within the approved area per
true identity of the subject properties. The application should verification through survey by the PENRO or CENRO. In
have been accompanied by the original tracing cloth plan duly addition, the applicant for land registration must present a copy
approved by the Director of Lands.13 The petitioner should have of the original classification approved by the DENR Secretary
also submitted a certification from the proper government office and certified as a true copy by the legal custodian of the official
stating that the properties were already declared alienable and records.These facts must be established to prove that the land is
disposable.14 The CA further cited a failure to establish that the alienable and disposable. Respondents failed to do so because
petitioner and its predecessors-in-interest possessed the subject the certifications presented by respondent do not, by
parcels of land under a bona fide claim of ownership since June themselves, prove that the land is alienable and disposable. x x
12, 1945 or earlier.15 x.

Hence, this petition for review on certiorari filed by the xxxx


petitioner to assail the CA’s dismissal of its application for land
registration. The petitioner argues that the identity of the
subject properties was sufficiently established through the The present rule on the matter then requires that an application
submission of the original tracing cloth plans, survey plans and for original registration be accompanied by: (1) CENRO or
technical descriptions. The alienable and disposable character of PENRO Certification; and (2) a copy of the original classification
the properties was also duly established via a certification issued approved by the DENR Secretary and certified as a true copy by
by the Community Environment and Natural Resources Office the legal custodian of the official records. x x x.20 (Citations
(CENRO) of the Department of Environment and Natural omitted and emphasis in the original)
Resources (DENR). Further, it claims that it and its
predecessors-in-interest possessed the parcels of land in the The burden of proof in overcoming the presumption of State
nature and within the length of time required by law. ownership of the lands of the public domain is on the person
applying for registration, who must provethat the properties
The petition is dismissible. subject of the application are alienable and disposable.21 Even
the notations on the survey plans submitted by the petitioner
cannot be admitted asevidence of the subject properties’
On the matter of proof of the subject property’s identity, alienability and disposability. Such notations do not constitute
jurisprudence provides that the presentation of the original incontrovertible evidence to overcome the presumption that the
tracing cloth plan may be dispensed with, subject however to subject properties remain part of the inalienable public
certain conditions. Contrary to the petitioner’s claim, the original domain.22
clothing plans that cover the subject properties do not form part
of the case records. The Court has nonetheless held in Republic
v. Espinosa:16 Given the foregoing, the dismissal of the petitioner's application
for registration was proper. Under pertinent laws and
jurisprudence, the petitioner had to sufficiently establish that:
As ruled in Republic v. Guinto-Aldana, the identity of the land, first, the subject properties form part of the disposable and
its boundaries and location can be established by other alienable lands of the public domain; second, the applicant and
competent evidence apart from the original tracing cloth such as his predecessors-in-interest have been in open, continuous,
a duly executed blueprint of the survey plan and technical exclusive, and notorious possession anq occupation of the same;
description: and third, the possession is under a bona fide claim of
ownership since June 12, 1945 or earlier.23
"Yet if the reason for requiring an applicant to adduce in
evidence the original tracing cloth plan is merely to provide a Without sufficient proof that the subject properties had been
convenient and necessary means to afford certainty as to the declared alienable and disposable, the Court finqs no reason to
exact identity of the property applied for registration and to look further into the petitioner's claim that the CA erred in'
ensure that the same does not overlap with the boundaries of finding that it failed to satisfy the nature and length of
the adjoining lots, there stands to be no reason why a possession that could qualify for land registration. WHEREFORE,
registration application must be denied for failure to present the the petition if DENIED. The Decision dated May 23, 2008 and
original tracing cloth plan, especially where it is accompanied by Resolution dated Jun~ 22, 2009 of the Court of Appeals in CA-
piecesof evidence—such as a duly executed blueprint of the G.R. CV No. 74418 are AFFIRMED.
survey plan and a duly executed technical description of the
property—which may likewise substantially and with as much
certainty prove the limits and extent of the property sought to SO ORDERED.
be registered."17 (Citations omitted)
G.R. No. 187987 November 26, 2014
Notwithstanding the foregoing, the CA’s dismissal of the
petitioner’s application for original registration was proper VICENTE TORRES, JR., CARLOS VELEZ, AND THE HEIRS
considering the latter’s failure to sufficiently establish that the OF MARIANO VELEZ, NAMELY: ANITA CHIONG VELEZ,
ROBERT OSCAR CHIONG VELEZ, SARAH JEAN CHIONG On his part, Lapinid admitted that a deed of sale was entered
VELEZ AND TED CHIONG VELEZ, Petitioners, into between him and Jesus pertaining to a parcel of land with
vs. an area of 3000 square meters. However, he insistedon the
LORENZO LAPINID AND JESUS VELEZ, Respondents. validity of sale since Jesus showed him several deeds of sale
making him a majority owner of Lot No. 4389. He further denied
DECISION that he acquired a specific and definite portion of the questioned
property, citing as evidence the deed of sale which does not
mention any boundaries or specific portion. He explained that
PEREZ, J.: Jesus permitted him to occupy a portion notexceeding 3000
square meters conditioned on the result of the partition of the
This is a Petition for Review on Certiorari1 under Rule 45 of the co-owners.11
Rules of Court filed by the petitioners assailing the 30 January
2009 Decision2 and 14 May 2009 Resolution3 of the Twentieth Regarding the forcible entry case, Jesus and Lapinid admitted
Division of the Corni of Appeals in CA-G.R. CV No. 02390, that such case was filed but the same was already dismissed by
affirming the 15 October 2007 Decision4 of the Regional Trial the Municipal Trial Court of Carcar, Cebu. In that decision, it was
Court of Cebu City (RTC Cebu City) which dismissed the ruled that the buyers, including Lapinid, were buyers in good
complaint for the declaration of nullity of deed of sale against faith since a proof of ownership was shown to them by Jesus
respondent Lorenzo Lapinid (Lapinid). before buying the property.12

The facts as reviewed are the following: On 15 October 2007, the trial court dismissed the complaint of
petitioners in this wise: Therefore, the Court DISMISSES the
On 4 February 2006, Vicente V. Torres, Jr. (Vicente), Mariano Complaint. At the same time, the Court NULLIFIES the site
Velez (Mariano)5 and Carlos Velez (petitioners) filed a assignment made by Jesus Velez in the Deed of Sale, dated
Complaint6 before RTC Cebu City praying for the nullification of November 9, 1997, of Lorenzo Lapinid’s portion, the exact
the sale of real property by respondent Jesus Velez (Jesus) in location of which still has to be determined either by agreement
favor of Lapinid; the recovery of possession and ownership of of the co-owners or by the Court in proper proceedings.13
the property; and the payment of damages.
Aggrieved, petitioners filed their partial motion for
Petitioners alleged in their complaint that they, including Jesus, reconsideration which was denied through a 26 November 2007
are co-owners of several parcels of land including the disputed Order of the court.14 Thereafter, they filed a notice of appeal on
Lot. No. 43897 located at Cogon, Carcar, Cebu. Sometime in 10 December 2007.15
1993, Jesus filed an action for partition of the parcels of land
against the petitioners and other co-owners before Branch 21 of On 30 January 2009, the Court of Appeals affirmed16 the
RTC Cebu City. On 13 August 2001, a judgment was rendered decision of the trial court. It validated the sale and ruled that the
based on a compromise agreement signed by the parties compromise agreement did not affect the validity of the sale
wherein they agreed that Jesus, Mariano and Vicente were previously executed by Jesus and Lapinid. It likewise dismissed
jointly authorized to sell the said properties and receive the the claim for rental payments, attorney’s fees and litigation
proceeds thereof and distribute them to all the co-owners. expenses of the petitioners.
However, the agreement was later amended to exclude Jesus as
an authorized seller. Pursuant totheir mandate, the petitioners
inspected the property and discovered that Lapinid was Upon appeal before this Court, the petitioners echo the same
occupying a specific portion of the 3000 square meters of Lot arguments posited before the lower courts. They argue that
No. 4389 by virtue of a deed of sale executed by Jesus in favor Lapinid, as the successor-in-interest of Jesus, is also bound by
of Lapinid. It was pointed out by petitioner that as a the 2001 judgment based on compromise stating that the
consequence of what they discovered, a forcible entry case was parcels of land must be sold jointly by Jesus, Mariano and
filed against Lapinid. Vicente and the proceeds of the sale be divided among the
coowners. To further strengthen their contention, they advance
the argument that since the portion sold was a definite and
The petitioners prayed that the deed of sale be declared null specific portion of a co-owned property, the entire deed of sale
and void arguing that the sale of a definite portion of a co- must be declared null and void.
owned property without notice to the other co-owners is without
force and effect. Further, the complainants prayed for payment
of rental fees amounting to P1,000.00 per month from January We deny the petition.
2004 or from the time of deprivation of property in addition to
attorney’s fees and litigation expenses. Admittedly, Jesus sold an area ofland to Lapinid on 9 November
1997. To simplify, the question now iswhether Jesus, as a co-
Answering the allegations, Jesus admitted that there was a owner, can validly sell a portion of the property heco-owns in
partition case between him and the petitioners filed in 1993 favor of another person. We answer in the affirmative.
involvingseveral parcels of land including the contested Lot No.
4389. However, he insisted that as early as 6 November 1997, a A co-owner has an absolute ownership of his undivided and
motion 8 was signed by the co-owners (including the proindiviso share in the co-owned property.17 He has the right
petitioners) wherein Lot No. 4389 was agreed to be adjudicated to alienate, assign and mortgage it, even to the extent of
to the co-owners belonging to the group of Jesus and the other substituting a third person in its enjoyment provided that no
lots be divided to the other co-owners belonging to the group of personal rightswill be affected. This is evident from the provision
Torres. Jesus further alleged that even prior to the partition and of the Civil Code:
motion, several coowners in his group had already sold their
shares to him in various dates of 1985, 1990 and 2004.9 Thus, Art. 493. Each co-owner shall have the full ownership of his part
when the motion was filed and signed by the parties on 6 and of the fruits and benefits pertaining thereto, and he may
November 1997, his rights asa majority co-owner (73%) of Lot therefore alienate, assign or mortgage it, and even substitute
No. 4389 became consolidated. Jesus averred that it was another person in its enjoyment, except when personal rights
unnecessary to give notice of the sale as the lot was already are involved. But the effect of the alienation or the mortgage,
adjudicated in his favor. He clarified that he only agreed with with respect to the co-owners, shall be limited to the portion
the 2001 Compromise Agreement believing that it only pertained
to the remaining parcels of land excluding Lot No. 4389.10
which may be allotted to him in the division upon the Records show that on 13 August 2001, a judgment based on
termination of the co-ownership. compromise agreement was rendered with regard to the
previous partition case involving the same parties pertaining to
A co-owner is an owner of the whole and over the whole he several parcels of land, including the disputed lot. The words of
exercises the right of dominion, but he is at the same time the the compromise state that: COME NOW[,] the parties and to this
owner of a portion which is truly abstract.18 Hence, his co- Honorable Court, most respectfully state that instead of
owners have no right to enjoin a coowner who intends to partitioning the properties, subject matter of litigation, that they
alienate or substitute his abstract portion or substitute a third will just sell the properties covered by TCT Nos. 25796, 25797
person in its enjoyment.19 and 25798 of the Register of Deeds of the Province of Cebu and
divide the proceeds among themselves.

In this case, Jesus can validly alienate his co-owned property in


favor of Lapinid, free from any opposition from the co-owners. That Jesus Velez, Mariano Velez and Vicente Torres, Jr. are
Lapinid, as a transferee, validly obtained the same rights of currently authorized to sell said properties, receive the proceeds
Jesus from the date of the execution of a valid sale. Absent any thereof and distribute them to the parties.27
proof that the sale was not perfected, the validity of sale
subsists. In essence, Lapinid steps into the shoes of Jesus as co- Be that as it may, the compromise agreement failed to defeat
owner of an ideal and proportionate share in the property held the already accrued right of ownership of Lapinid over the share
in common.20 Thus, from the perfection of contract on 9 sold by Jesus. As early as 9 November 1997, Lapinid already
November 1997, Lapinid eventually became a co-owner of the became a co-owner of the property and thus, vested with all the
property. rights enjoyed by the other co-owners. The judgment based on
the compromise agreement, which is to have the covered
Even assuming that the petitioners are correct in their allegation properties sold, is valid and effectual provided as it does not
that the disposition in favor of Lapinid before partition was a affect the proportionate share of the non-consenting party.
concrete or definite portion, the validity of sale still prevails. Accordingly, when the compromise agreement was executed
without Lapinid’s consent, said agreement could not have
affected his ideal and undivided share. Petitioners cannot sell
In a catena of decisions,21 the Supreme Court had repeatedly Lapinid’s share absent his consent. Nemo dat quod non habet –
held that no individual can claim title to a definite or concrete "no one can give what he does not have."28
portion before partition of co-owned property. Each co-owner
only possesses a right to sell or alienate his ideal share after
partition. However, in case he disposes his share before This Court has ruled in many cases that even if a co-owner sells
partition, such disposition does not make the sale or alienation the whole property as his, the sale will affect only his own share
null and void. What will be affected on the sale is only his but not those of the other co-owners who did not consent tothe
proportionate share, subject to the results of the partition. The sale. This is because the sale or other disposition of a co-owner
co-owners who did not give their consent to the sale stand to be affects only his undivided share and the transferee gets only
unaffected by the alienation.22 what would correspond to his grantor in the partition of the
thing owned in common.29

As explained in Spouses Del Campo v. Court of Appeals:23


We find unacceptable the argument that Lapinid must pay rental
payments to the other co-owners.1âwphi1
We are not unaware of the principle that a co-owner cannot
rightfully dispose of a particular portion of a co-owned property
prior to partition among all the co-owners. However, this should As previously discussed, Lapinid,from the execution of sale,
not signify that the vendee does not acquire anything atall in became a co-owner vested with rights to enjoy the property
case a physically segregated area of the co-owned lot is in fact held in common.
sold to him. Since the coowner/vendor’s undivided interest could
properly be the object of the contract of sale between the Clearly specified in the Civil Code are the following rights:
parties, what the vendee obtains by virtue of such a sale are the
same rights as the vendor had asco-owner, in an ideal share Art. 486. Each co-owner may use the thing owned in common,
equivalent to the consideration given under their transaction. In provided he does so in accordance with the purpose for which it
other words, the vendee steps into the shoes of the vendor as is intended and in such a way as not to injure the interest of the
co-owner and acquires a proportionate abstract share in the co-ownership or prevent the other co-owners from using it
property held in common.24 according to their rights. The purpose of the co-ownership may
be changed by agreement, express or implied.
Also worth noting is the pronouncement in Lopez v. Vda. De
Cuaycong:25 Art. 493. Each co-owner shall havethe full ownership of his part
and of the fruits and benefits pertaining thereto, and he may
x x x The fact that the agreement in question purported to sell a therefore alienate, assign or mortgage it and even substitute
concrete portionof the hacienda does not render the sale void, another person in its enjoyment, except when personal rightsare
for it is a wellestablished principle that the binding force of a involved. But the effect of the alienation or mortgage, with
contract must be recognized as far as it is legally possible to do respect to the co-owners, shall be limited to the portion which
so. "Quando res non valet ut ago, valeat quantumvalere potest." may be allotted to him in the division upon the termination of
(When a thing is of no force as I do it, it shall have as much the co-ownership.
force as it can have).26 (Italics theirs).
Affirming these rights, the Court held in Aguilar v. Court of
Consequently, whether the disposition involves an abstract or Appeals that:30
concrete portion of the co-owned property, the sale remains
validly executed. x x x Each co-owner of property heldpro indivisoexercises his
rights over the whole property and may use and enjoy the same
The validity of sale being settled,it follows that the subsequent with no other limitation than that he shall not injure the
compromise agreement between the other co-owners did not interests of his co-owners, the reason being that until a division
affect the rights of Lapinid as a co-owner. is made, the respective share of each cannot be determined and
every co-ownerexercises, together with his coparticipants joint
ownership over the pro indiviso property, in addition to his use
and enjoyment of the same.31 From the foregoing, it is absurd
to rule that Lapinid, who is already a co-owner, be ordered to
pay rental payments to his other co-owners. Lapinid’s right of
enjoyment over the property owned in common must be
respected despite opposition and may notbe limited as long he
uses the property to the purpose for which it isintended and he
does not injure the interest of the co-ownership.

Finally, we find no error on denial of attorney’s fees and


litigation expenses.

Pursuant to Article 2208 of the New Civil Code, attorney’s fees


and expenses of litigation, in the absence of stipulation, are
awarded only in the following instances:

xxxx

1. When exemplary damages are awarded;

2. When the defendant’s act or omission has


compelled the plaintiff to litigate with third persons or
to incur expenses to protect his interests;

3. In criminal cases of malicious prosecution against


the plaintiff;

4. In case of a clearly unfounded civil action or


proceeding against the plaintiff;

5. Where the defendant acted in gross and evident bad


faith in refusing to satisfy the plaintiff’s plainly valid
and demandable claim;

6. In actions for legal support;

7. In actions for the recovery of wages of household


helpers, laborers and skilled workers;

8. In actions for indemnity under workmen's


compensation and employer's liability laws;

9. In a separate civil action to recover civil liability


arising from a cnme;

10. When at least double judicial costs arc awarded;

11. In any other case where the court deems it just


and equitable that attorney's fees and expenses
oflitigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must


be reasonable.

Petitioners cite Jesus' act of selling a definite portion to Lapinid


as the reason which forced them to litigate and file their
complaint. However, though the Court may not fault the
complainants when they filed a complaint based on their
perceived cause of action, they should have also considered
thoroughly that it is well within the rights of a co-owner to
validly sell his ideal share pursuant to law and jurisprudence.

WHEREFORE, the petition is DENIED. Accordingly, the Decision


and Resolution of the Court of Appeals dated 30 January 2009
and 14 May 2009 are hereby AFFIRMED.

SO ORDERED.