CO-OWNERSHIP/PARTITION/POSSESSION

ARNELITO ADLAWAN, G.R. No. 161916Petitioner,Present:

Panganiban, C.J. (Chairman),- versus - Ynares-Santiago,Austria-Martinez,

Callejo, Sr., andChico-Nazario, JJ.

EMETERIO M. ADLAWAN andNARCISA M. ADLAWAN, Promulgated:

Respondents.January 20, 2006 x ---------------------------------------------------------------------------------------- x DECISION YNARES-SANTIAGO, J.:

Assailed in this petition for review is the September 23, 2003 Decision [1] of the Court of Appeals in CA-

G.R. SP No. 74921 which set aside the September 13, 2002 Decision[2]of the Regional Trial Court (RTC) of

Cebu City, Branch 7, in Civil Case No. CEB-27806, and reinstated the February 12, 2002 Judgment [3] of

the Municipal Trial Court (MTC) of Minglanilla, Metro Cebu, in Civil Case No. 392, dismissing petitioner

Arnelito Adlawans unlawful detainer suit against respondents Emeterio and Narcisa Adlawan. Likewise

questioned is the January 8, 2004 Resolution[4] of the Court of Appeals which denied petitioners motion

for reconsideration.

The instant ejectment suit stemmed from the parties dispute over Lot 7226 and the house built thereon,

covered by Transfer Certificate of Title No. 8842,[5] registered in the name of the late Dominador

Adlawan and located at Barrio Lipata, Municipality of Minglanilla, Cebu. In his complaint, petitioner

claimed that he is an acknowledged illegitimate child[6] of Dominador who died on May 28, 1987 without

any other issue. Claiming to be the sole heir of Dominador, he executed an affidavit adjudicating to

himself Lot 7226 and the house built thereon.[7] Out of respect and generosity to respondents who are

the siblings of his father, he granted their plea to occupy the subject property provided they would

vacate the same should his need for the property arise. Sometime in January 1999, he verbally

requested respondents to vacate the house and lot, but they refused and filed instead an action for

quieting of title[8] with the RTC. Finally, upon respondents refusal to heed the last demand letter to

vacate dated August 2, 2000, petitioner filed the instant case on August 9, 2000. [9]

On the other hand, respondents Narcisa and Emeterio, 70 and 59 years of age, respectively,[10] denied that they begged petitioner to allow them to stay on the questioned property and stressed

that they have been occupying Lot 7226 and the house standing thereon since birth. They alleged that

Lot 7226 was originally registered in the name of their deceased father, Ramon Adlawan [11] and the

ancestral house standing thereon was owned by Ramon and their mother, Oligia Maacap Adlawan. The

spouses had nine[12]children including the late Dominador and herein surviving respondents Emeterio

and Narcisa. During the lifetime of their parents and deceased siblings, all of them lived on the said

property. Dominador and his wife, Graciana Ramas Adlawan, who died without issue, also occupied the

same.[13] Petitioner, on the other hand, is a stranger who never had possession of Lot 7226.

Sometime in 1961, spouses Ramon and Oligia needed money to finance the renovation of their

house. Since they were not qualified to obtain a loan, they transferred ownership of Lot 7226 in the

name of their son Dominador who was the only one in the family who had a college education. By virtue

of a January 31, 1962 simulated deed of sale, [14] a title was issued to Dominador which enabled him to

secure a loan with Lot 7226 as collateral. Notwithstanding the execution of the simulated deed,

Dominador, then single, never disputed his parents ownership of the lot. He and his wife, Graciana, did

not disturb respondents possession of the property until they died on May 28, 1987 and May 6, 1997,

respectively.

Respondents also contended that Dominadors signature at the back of petitioners birth certificate was

forged, hence, the latter is not an heir of Dominador and has no right to claim ownership of Lot 7226.[15] They argued that even if petitioner is indeed Dominadors acknowledged illegitimate son, his right to

succeed is doubtful because Dominador was survived by his wife, Graciana.[16]

On February 12, 2002, the MTC dismissed the complaint holding that the establishment of petitioners

filiation and the settlement of the estate of Dominador are conditions precedent to the accrual of

petitioners action for ejectment. It added that since Dominador was survived by his wife, Graciana, who

died 10 years thereafter, her legal heirs are also entitled to their share in Lot 7226. The dispositive

portion thereof, reads:

In View of the foregoing, for failure to prove by preponderance of evidence, the plaintiffs cause of action, the above-entitled case is hereby Ordered DISMISSED. SO ORDERED.[17]

On appeal by petitioner, the RTC reversed the decision of the MTC holding that the title of

Dominador over Lot 7226 cannot be collaterally attacked. It thus ordered respondents to turn over

possession of the controverted lot to petitioner and to pay compensation for the use and occupation of

the premises. The decretal portion thereof, provides:

Wherefore, the Judgment, dated February 12, 2002, of the Municipal Trial Court

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

So ordered.[18]

Meanwhile, the RTC granted petitioners motion for execution pending appeal [19] which was

opposed by the alleged nephew and nieces of Graciana in their motion for leave to intervene and to file

an answer in intervention.[20] They contended that as heirs of Graciana, they have a share in Lot 7226

and that intervention is necessary to protect their right over the property. In addition, they declared

that as co-owners of the property, they are allowing respondents to stay in Lot 7226 until a formal

partition of the property is made.

The RTC denied the motion for leave to intervene.[21] It, however, recalled the order granting the

execution pending appeal having lost jurisdiction over the case in view of the petition filed by

respondents with the Court of Appeals.[22]

On September 23, 2003, the Court of Appeals set aside the decision of the RTC and reinstated

the judgment of the MTC. It ratiocinated that petitioner and the heirs of Graciana are co-owners of Lot

7226. As such, petitioner cannot eject respondents from the property via an unlawful detainer suit filed

in his own name and as the sole owner of the property. Thus WHEEFORE, premises considered, the appealed Decision dated September 13,

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

SO ORDERED.[23]

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

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

case for ejectment.

Petitioner averred that he is an acknowledged illegitimate son and the sole heir of Dominador.

He in fact executed an affidavit adjudicating to himself the controverted property. In ruling for the

petitioner, the RTC held that the questioned January 31, 1962 deed of sale validly transferred title to

Dominador and that petitioner is his acknowledged illegitimate son who inherited ownership of the

questioned lot. The Court notes, however, that the RTC lost sight of the fact that the theory of

succession invoked by petitioner would end up proving that he is not the sole owner of Lot 7226. This is

so because Dominador was survived not only by petitioner but also by his legal wife, Graciana, who died

10 years after the demise of Dominador on May 28, 1987. [24] By intestate succession, Graciana and

petitioner became co-owners of Lot 7226.[25] The death of Graciana on May 6, 1997, did not make

petitioner the absolute owner of Lot 7226 because the share of Graciana passed to her relatives by

consanguinity and not to petitioner with whom she had no blood relations. The Court of Appeals thus

correctly held that petitioner has no authority to institute the instant action as the sole owner of Lot

7226.

Petitioner contends that even granting that he has co-owners over Lot 7226, he can on his own

file the instant case pursuant to Article 487 of the Civil Code which provides:

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

This article covers all kinds of actions for the recovery of possession. Article 487 includes forcible

entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery

of ownership (accion de reivindicacion).[26] A co-owner may bring such an action without the necessity of

joining all the other co-owners as co-plaintiffs because the suit is presumed to have been filed to benefit

his co-owners. It should be stressed, however, that where the suit is for the benefit of the plaintiff alone

who claims to be the sole owner and entitled to the possession of the litigated property, the

action should be dismissed.[27]

The renowned civilist, Professor Arturo M. Tolentino, explained

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

In Baloloy v. Hular,[29] respondent filed a complaint for quieting of title claiming exclusive

ownership of the property, but the evidence showed that respondent has co-owners over the property.

In dismissing the complaint for want of respondents authority to file the case, the Court held thatUnder Article 487 of the New Civil Code, any of the co-owners may bring an

action in ejectment. This article covers all kinds of actions for the recovery of possession, including anaccion publiciana and a reinvidicatory action. A co-owner may bring such an action without the necessity of joining all the other co-owners as co-plaintiffs because the suit is deemed to be instituted for the benefit of all. Any judgment of the court in favor of the co-owner will benefit the others but if such judgment is adverse, the same cannot prejudice the rights of the unimpleaded co-owners. If the action is for the benefit of the plaintiff alone who claims to be the sole owner and entitled to the possession thereof, the action will not prosper unless he impleads the other co-owners who are indispensable parties.

In this case, the respondent alone filed the complaint, claiming sole ownership

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

Under Section 7, Rule 3 of the Rules of Court, the respondent was mandated to

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

In the instant case, it is not disputed that petitioner brought the suit for unlawful detainer in his

name alone and for his own benefit to the exclusion of the heirs of Graciana as he even executed an

affidavit of self- adjudication over the disputed property. It is clear therefore that petitioner cannot

validly maintain the instant action considering that he does not recognize the co-ownership that

necessarily flows from his theory of succession to the property of his father, Dominador.

In the same vein, there is no merit in petitioners claim that he has the legal personality to file

the present unlawful detainer suit because the ejectment of respondents would benefit not only him

but also his alleged co-owners. However, petitioner forgets that he filed the instant case to acquire

possession of the property and to recover damages. If granted, he alone will gain possession of the lot

and benefit from the proceeds of the award of damages to the exclusion of the heirs of Graciana. Hence,

petitioner cannot successfully capitalize on the alleged benefit to his co-owners. Incidentally, it should

be pointed out that in default of the said heirs of Graciana, whom petitioner labeled as fictitious heirs,

the State will inherit her share[31] and will thus be petitioners co-owner entitled to possession and

enjoyment of the property.

The present controversy should be differentiated from the cases where the Court upheld the

right of a co-owner to file a suit pursuant to Article 487 of the Civil Code. InResuena v. Court of Appeals,[32] and Sering v. Plazo,[33] the co-owners who filed the ejectment case did not represent themselves as

the exclusive owner of the property. InCelino v. Heirs of Alejo and Teresa Santiago,[34] the complaint for

quieting of title was brought in behalf of the co-owners precisely to recover lots owned in common.[35]Similarly in Vencilao v. Camarenta,[36] the amended complaint specified that the plaintiff is one of the

heirs who co-owns the controverted properties.

In the foregoing cases, the plaintiff never disputed the existence of a co-ownership nor claimed

to be the sole or exclusive owner of the litigated lot. A favorable decision therein would of course inure

to the benefit not only of the plaintiff but to his co-owners as well. The instant case, however, presents

an entirely different backdrop as petitioner vigorously asserted absolute and sole ownership of the

questioned lot. In his complaint, petitioner made the following allegations, to wit:

3. The plaintiff was the only son (illegitimate) and sole heir of the late

DOMINADOR ADLAWAN who died intestate on 28 May 1987 without any other descendant nor ascendant x x x.

x x x x 5. Being the only child/descendant and, therefore, sole heir of the deceased

Dominador Adlawan, the plaintiff became the absolute owner, and automatically took POSSESSION, of the aforementioned house and lot x x x. (Emphasis added) [37]

Clearly, the said cases find no application here because petitioners action operates as a

complete repudiation of the existence of co-ownership and not in representation or recognition thereof.

Dismissal of the complaint is therefore proper. As noted by Former Supreme Court Associate Justice

Edgrado L. Paras [i]t is understood, of course, that the action [under Article 487 of the Civil Code] is

being instituted for all. Hence, if the co-owner expressly states that he is bringing the case only for

himself, the action should not be allowed to prosper.[38]

Indeed, respondents not less than four decade actual physical possession of the questioned

ancestral house and lot deserves to be respected especially so that petitioner failed to show that he has

the requisite personality and authority as co-owner to file the instant case. Justice dictates that

respondents who are now in the twilight years of their life be granted possession of their ancestral

property where their parents and siblings lived during their lifetime, and where they, will probably

spend the remaining days of their life.

WHEREFORE, the petition is DENIED. The September 23, 2003 Decision of the Court of Appeals

in CA-G.R. SP No. 74921 which reinstated the February 12, 2002 Judgment of the Municipal Trial Court

of Minglanilla, Metro Cebu, dismissing petitioners complaint in Civil Case No. 392, and its January 8,

2004 Resolution, are AFFIRMED.

SO ORDERED.PAZ GALVEZ, CARLOS TAM, and TYCOON PROPERTIES, INC.,Petitioners,

- versus -

HON. COURT OF APPEALS and PORFIRIO GALVEZ,

Respondents.

G.R. No. 157954 Present:

PANGANIBAN, C.J.Chairperson,YNARES-SANTIAGO,AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO, JJ.

Promulgated:

March 24, 2006

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D E C I S I O N

CHICO-NAZARIO, J.:

The factual antecedents of this case reveal that Timotea F. Galvez died intestate on 28 April 1965.[1] She

left behind her children Ulpiano and Paz Galvez. Ulpiano, who died on24 July 1959,[2] predeceased Timotea and was survived by his son, Porfirio Galvez. Timotea left a parcel of land

situated at Pagdaraoan, San Fernando, La Union, covered by Tax Declaration No. 39645 [3] and more

particularly described as follows:

A parcel of unirrigated riceland situated at Brgy. Pagdaraoan, San Fernando, La

Union under Tax Declaration No. 39645, series of 1957, with an area of 4,304.5 square meters, more or less bounded on the North by Valentin and Isidoro Sobrepea; on the East by Nicolas Ducusin; on the South by Victor Ducusin; and on the West by the National Highway.[4]

Considering that all the other compulsory heirs of Timotea already received their respective

shares,[5] the property passed by succession, both to Timoteas daughter, PazGalvez, and to

the formers grandson, Porfirio, the latter succeeding by right of representation as the son of Ulpiano.

Porfirio Galvez was surprised to discover that on 4 May 1970,[6] Paz Galvez executed an affidavit of

adjudication stating that she is the true and lawful owner of the said property. Tax Declarations No.

15749[7] and No. 12342[8] were then issued in the name of Paz Galvez. On 22 June 1992, without the

knowledge and consent of Porfirio Galvez, Paz Galvez sold the property to Carlos Tam for a

consideration of Ten Thousand Pesos (P10,000.00) by way of a Deed of Absolute Sale.[9] Carlos Tam

thereafter filed an application for registration of said parcel of land under Land Registration Case No.

2278 before the Regional Trial Court (RTC) of San Fernando, La Union. On 21 January 1994, Original

Certificate of Title No. 0-2602 of the Registry of Deeds of San Fernando, La Union, was issued in the

name of Carlos Tam.[10] Subsequently, on 27 September 1994, Carlos Tam sold the property to Tycoon

Properties, Inc. through a Deed of Absolute Sale executed by the former in favor of the latter. [11] As a

result, the title of Carlos Tam over the property was cancelled and a new one, Transfer Certificate of

Title (TCT) No. T-40390[12] was issued in favor of Tycoon Properties, Inc.

On 12 May 1994, Porfirio Galvez filed Civil Case No. 4895 before the RTC, Branch 26, of San

Fernando, La Union, for Legal Redemption with Damages and Cancellation of Documents [13] against

Paz Galvez and Carlos Tam. The Complaint was later amended to implead as additional defendant,

Tycoon Properties, Inc.[14] When Tycoon Properties, Inc. filed its Answer, it also filed a cross-claim against

Carlos Tam. In a decision[15] dated 15 December 1999, the trial court held:

WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows: 1. declaring null and void the Affidavit of Adjudication

executed by defendant PAZ GALVEZ dated May 4, 1970; 2. declaring null and void the Deed of Absolute Sale over the

property originally covered by Tax Declaration No. 39645 executed by PAZ GALVEZ in favor of CARLOS TAM;

3. the Original Certificate of Title No. 0-2602, in the name of

CARLOS TAM be considered cancelled; 4. The Deed of Sale between CARLOS TAM and TYCOON

PROPERTIES, Inc. is hereby ordered cancelled with Transfer Certificate of Title No. T-40390, being null and void;

5. That CARLOS TAM shall receive from the Clerk of Court, San

Fernando City, La Union the amount of Ten Thousand (P10,000.00) pesos, as redemption of the property pursuant to law;

6. That the property covered by Transfer Certificate of Title

No. T-40390, be reconveyed (whole property) to PORFIRIO GALVEZ, he having redeemed one-half () of the property from CARLOS TAM and other half of the property belongs to him as co-heir of TIMOTEA FLORES GALVEZ.

7. Defendant PAZ GALVEZ and CARLOS TAM shall be

liable solidarily for the actual damages of the plaintiff in the amount of Ten Thousand (P10,000.00) pesos as well as moral damages in the amount of Fifty Thousand (P50,000.00) Pesos, together with attorney's fees in the amount of Ten Thousand (P10,000.00) Pesos acceptance fee and Five Hundred (P500.00) per appearance fee.[16]

Petitioners Paz Galvez, Carlos Tam and Tycoon Properties, Inc. appealed the decision to the Court of

Appeals.[17] In a decision of the Court of Appeals dated 28 August 2002,[18] the appellate court resolved to

affirm the decision of the trial court. Petitioners filed a Motion for Reconsideration which was denied in

a resolution dated 14 April 2003.[19]

Not contented with the decision of the Court of Appeals, petitioners are now before this

Court via Petition for Review on Certiorari under Rule 45 of the Rules of Court.

Petitioners Carlos Tam and Tycoon Properties, Inc. separately filed their Memorandum [20] but raised the

same issues to wit:

I THE HONORABLE COURT OF APPEALS ERRED WHEN IT REFUSED TO HOLD THAT RESPONDENT'S CLAIM OVER THE SUBJECT PROPERTY, WHICH IS BASED ON AN IMPLIED TRUST, HAS ALREADY PRESCRIBED BECAUSE THE ACTION WAS FILED 24 YEARS AFER PETITIONER REPUDIATED THE SAID TRUST. II THE HONORABLE COURT OF APPEALS ERRED WHEN IT FAILED TO RECOGNIZE THAT RESPONDENT'S CLAIM IS ALREADY BARRED BY LACHES BECAUSE HE FAILED TO ASSERT HIS ALLEGED RIGHT FOR ALMOST TWENTY FOUR (24) YEARS. III THE HONORABLE COURT ERRED IN FAILING TO RECOGNIZE THAT PETITIONERS [CARLOS TAM AND] TYCOON PROPERTIES ARE BUYERS IN GOOD FAITH AND FOR VALUE AND HAS THE RIGHT TO RELY ON THE FACE OF THE TITLE.[21]

In assailing the decisions of the trial and appellate courts, petitioners cite Article 1451 [22] of the Civil Code

and claim that an implied or constructive trust which prescribes in ten years, was established between

Paz Galvez and Porfirio Galvez. It is petitioners unflinching stand that the implied trust was repudiated

when Paz Galvez executed an Affidavit of Self-Adjudication on 4 May 1970, registered the same before

the Register of Deeds of La Union on 4 June 1970 and secured a new tax declaration in her name. From 4

May 1970to the time the complaint was filed on 12 May 1994, 24 years have passed, hence, the action is

clearly barred both by prescription and laches.

We find the petition bereft of merit.

Ostensibly, this case is governed by the rules on co-ownership [23] since both

Paz Galvez and Porfirio Galvez are obviously co-owners of the disputed property having inherited the

same from a common ancestor. Article 494 of the Civil Code provides that [a] prescription shall not run

in favor of a co-owner or co-heir against his co-owners or co-heirs as long as he expressly or impliedly

recognizes the co-ownership.

It is a fundamental principle that a co-owner cannot acquire by prescription the share of the other co-

owners, absent any clear repudiation of the co-ownership. [24] In Santos v. Santos,[25] citing the earlier

case of Adille v. Court of Appeals,[26] this Court found occasion to rule that:

Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). The act of repudiation, in turn, is subject to certain conditions:(1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in possession through open, continuous, exclusive, and notorious possession of the property for the period required by law.

For title to prescribe in favor of a co-owner there must be a clear showing that he has repudiated the

claims of the other co-owners and the latter has been categorically advised of the exclusive claim he is

making to the property in question. The rule requires a clear repudiation of the co-ownership duly

communicated to the other co-owners.[27] It is only when such unequivocal notice has been given that

the period of prescription will begin to run against the other co-owners and ultimately divest them of

their own title if they do not seasonably defend it.[28]

To sustain a plea of prescription, it must always clearly appear that one who was originally a joint owner

has repudiated the claims of his co-owners, and that his co-owners were apprised or should have been

apprised of his claim of adverse and exclusive ownership before the alleged prescriptive period began to

run.[29]

In Salvador v. Court of Appeals,[30] it was held that the possession of a co-owner is like that of a trustee

and shall not be regarded as adverse to the other co-owner but in fact beneficial to all of them.

The case of Huang v. Court of Appeals[31] is instructive on the creation of trust relationships.

Trust is a fiduciary relationship with respect to property which involves the existence of equitable duties imposed upon the holder of the title to the property to deal with it for the benefit of another. A person who establishes a trust is called the trustor; one in whom confidence is reposed as regards property for the benefit of another person is known as the trustee; and the person for whose benefit the trust has been created is referred to as the beneficiary or cestui que trust. Trust is either express or

implied. Express trust is created by the intention of the trustor or of the parties. Implied trust comes into being by operation of law. The latter kind is either constructive or resulting trust. A constructive trust is imposed where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it. The duty to convey the property arises because it was acquired through fraud, duress, undue influence or mistake, or through breach of a fiduciary duty, or through the wrongful disposition of anothers property. On the other hand, a resulting trust arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property should have the beneficial interest in the property. It is founded on the presumed intention of the parties, and as a general rule, it arises where, and only where such may be reasonably presumed to be the intention of the parties, as determined from the facts and circumstances existing at the time of the transaction out of which it is sought to be established.

Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners

are concerned. Thus, Salvador v. Court of Appeals reiterated what acts constitute proof of exclusive

ownership amounting to repudiation, emphasizing that the act must be borne out of clear and

convincing evidence of acts of possession whichunequivocably amounts to an ouster or deprivation of

the right of the other co-owner. The case of Pangan v. Court of Appeals[32] enumerated the following as

constituting acts of repudiation:

Filing by a trustee of an action in court against the trustor to quiet title to property, or for recovery of ownership thereof, held in possession by the former, may constitute an act of repudiation of the trust reposed on him by the latter. The issuance of the certificate of title would constitute an open and clear repudiation of any trust, and the lapse of more than 20 years, open and adverse possession as owner would certainly suffice to vest title by prescription. An action for the reconveyance of land based on implied or constructive trust prescribes within 10 years. And it is from the date of the issuance of such title that the effective assertion of adverse title for purposes of the statute of limitation is counted. The prescriptive period may only be counted from the time petitioners repudiated the trust relation in 1955 upon the filing of the complaint for recovery of possession against private respondents so that the counterclaim of the private respondents contained in their amended answer wherein they asserted absolute ownership of the disputed realty by reason of the continuous and adverse possession of the same is well within the 10-year prescriptive period.

There is clear repudiation of a trust when one who is an apparent administrator of property causes the cancellation of the title thereto in the name of the apparent beneficiaries and gets a new certificate of title in his own name. It is only when the defendants, alleged co-owners of the property in question, executed a deed of partition and on the strength thereof obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein they appear as the new owners of a definite area each, thereby in effect denying or repudiating the ownership of one of the plaintiffs over his alleged share in the entire lot, that the statute of limitations started to run for the purposes of the action instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights thereunder.

In this case, we find that Paz Galvez effected no clear and evident repudiation of the co-ownership. The

execution of the affidavit of self-adjudication does not constitute such sufficient act of repudiation as

contemplated under the law as to effectively exclude Porfirio Galvez from the property. This Court has

repeatedly expressed its disapproval over the obvious bad faith of a co-heir feigning sole ownership of

the property to the exclusion of the other heirs essentially stating that one who acts in bad faith should

not be permitted to profit from it to the detriment of others. In the cases

of Adille[33] and Pangan[34] where, as in this case, a co-heir was excluded from his legal share by the other

co-heir who represented himself as the only heir, this Court held that the act of exclusion does not

constitute repudiation.

On the issue of prescription, while admittedly prescription operates as a bar to recovery of property, the

ten-year period commenced to run from date of registration. In this case, Carlos Tam obtained his title

to the property on 21 January 1994. Since the complaint of Porfirio Galvez was filed on 12 May 1994, the

same was well within the ten-year period to file the action.

On the matter of laches, it is hornbook doctrine that laches is a creation of equity and its application is

controlled by equitable considerations. Laches cannot be used to defeat justice or perpetrate fraud and

injustice.[35] Neither should its application be used to prevent the rightful owners of a property from

recovering what has been fraudulently registered in the name of another. [36] The equitable remedy

of laches is, therefore, unavailing in this case.

Finally, petitioners claim that if the sale would be nullified, the nullification should extend only to the

one-half share of Porfirio Galvez[37] but not to the share of Paz Galvez, who, by her overt act of selling

the property, manifested her intention to dispose of her part.

Notably, Porfirio Galvezs complaint was captioned legal redemption with damages, cancellation of

documents and reconveyance of share.[38] In his prayer, he sought for thereconveyance of his one-half

share in the property and at the same time be subrogated to the other half pertaining to Paz Galvez and

sold to Carlos Tam after reimbursement of the amount which the latter paid for the property.

The pertinent provisions of the Civil Code on legal redemption are as follows:

ART. 1619. Legal redemption is the right to be subrogated, upon the same terms and conditions

stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transmitted by onerous title.

ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other

co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common.

In the case of Hermoso v. Court of Appeals,[39] this Court, in interpreting the provision of the law on legal

redemption, held:

The purpose of Article 1067 (of the old Civil Code, now Article 1088 of the present Civil Code) is to keep strangers to the family out of a joint ownership, if, as is often the case, the presence of outsiders be undesirable and the other heir or heirs be willing and in a position to repurchase the share sold (De Jesus vs. Manlapus, 81 Phil. 144). While there should be no question that an heir may dispose his right before partition (Rivero vs. Serrano [CA] 46 O.G. 642; Wenceslao vs. Calimon, 46 Phil. 906; Hernaez vs. Hernaez, 32 Phil. 214), a co-heir would have had to pay only the price for which the vendee acquired it (Hernaez vs. Hernaez, Ibid.). It is a one-way street. It is always in favor of the redemptioner since he can compel the vendee to sell to him but he cannot be compelled by the vendee to buy the alienated property.

In another case, [40] this Court reiterated that:

Legal redemption is in the nature of a privilege created by law partly for reasons of public policy and partly for the benefit and convenience of the redemptioner, to afford him a way out of what might be a disagreeable or [an] inconvenient association into which he has been thrust. (10 Manresa, 4th Ed., 317.) It is intended to minimize co-ownership. The law grants a co-owner the exercise of the said right of redemption when the shares of the other owners are sold to a third person.

The rule on redemption is liberally construed in favor of the original owner of the property and the

policy of the law is to aid rather than defeat him in the exercise of his right of redemption. [41]

Thus, petitioners cannot be accommodated in this respect and we agree with the trial court when it

held:The provision of Art. 1088 of the Civil Code of the Philippines is very clear on the matter.

Art. 1088, provides: Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one (1) month from the time they were notified in writing of the sale by the vendor.

There was no written notice sent to Porfirio Galvez by Paz Galvez when she sold her share over the land to Carlos Tam. Porfirio Galvez only discovered on May 12, 1994 that the land was sold to Carlos Tam. Art. 1620, Civil Code of the Philippines, provides:

Art. 1620. A co-owner of a thing may exercise the right of redemption in case the share of all the other co-owners or any of them are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.

No written notice of the sale was given by Paz Galvez (vendor) to Porfirio Galvez, the co-owner as required under Art. 1623 of the Civil Code. The written notice is mandatory. Hence, the right to redeem commenced when plaintiff sought to exercise it by instituting the complaint in the instant case on June 12, 1994. The complaint of legal redemption may be filed even several years after the consummation of sale (Zosima Verdad vs. Court of Appeals, et al.; G.R. No. 10972, April 29, 1996).[42]

As to petitioners Carlos Tam and Tycoon Properties, Inc.s claim that they are buyers in good faith, same

fails to persuade.

A purchaser in good faith and for value is one who buys the property without notice that some other

person has a right to or interest in such property and pays its fair price before he has notice of the

adverse claims and interest of another person in the same property. So it is that the honesty of intention

which constitutes good faith implies a freedom from knowledge of circumstances which ought to put a

person on inquiry.[43]

Suffice it to state that both the trial and appellate courts found otherwise as Tam did not exert efforts to

determine the previous ownership of the property in question [44] and relied only on the tax declarations

in the name of Paz Galvez.[45] It must be noted that Carlos Tam received a copy of the summons and the

complaint on 22 September 1994.This notwithstanding, he sold the property to Tycoon Properties, Inc.

on 27 September 1994. Significantly, Carlos Tam is also an owner of Tycoon Properties, Inc. to the extent

of 45%.[46] A notice of lis pendens dated 8 July 1997 filed with the Registry of Deeds of the Province of La

Union was inscribed on TCT No. T- 40390.[47] Despite the inscription, Tycoon Properties, Inc. mortgaged

the land to Far East Bank and Trust Company for the sum of P11,172,600.[48] All these attendant

circumstances negate petitioners claim of good faith.

WHEREFORE, premises considered, the decision of the Court of Appeals dated 28 August 2002 and its

Resolution dated 14 April 2003 are AFFIRMED. Costs against petitioners.

SO ORDERED.

TINING RESUENA, ALEJANDRA GARAY, LORNA RESUENA, ELEUTERIO RESUENA, EUTIQUIA ROSARIO and UNISIMA RESUENA, petitioners, vs.HON. COURT OF APPEALS, 11th DIVISION and JUANITO BORROMEO, SR., respondents.

D E C I S I O N

TINGA, J.:

This is a Rule 45 Petition for Review on Certiorari of the Decision[1] of the Court of Appeals affirming that of the Regional Trial Court (RTC) of Cebu, [2] which in turn reversed that of the Metropolitan Trial Court (mtc) of Talisay, Cebu.[3]

The facts are as follows:

Private respondent, the late Juanito Borromeo, Sr.[4] (hereinafter, respondent), is the co-owner and overseer of certain parcels of land located in Pooc, Talisay, Cebu, designated as Lots Nos. 2587 and 2592 of the Talisay-Manglanilla Estate. Respondent owns six-eighths (6/8) of Lot No. 2587 while the late spouses Inocencio Bascon and Basilisa Maneja (Spouses Bascon) own two-eights (2/8) thereof. On the other hand, Lot No. 2592 is owned in common by respondent and the heirs of one Nicolas Maneja. However, the proportion of their undivided shares was not determined a quo.

Prior to the institution of the present action, petitioners Tining Resuena, Alejandra Garay, Lorna Resuena, Eleuterio Resuena, and Unisima Resuena resided in the upper portion of Lot No. 2587, allegedly under the acquiescence of the Spouses Bascon and their heir, Andres Bascon. On the other hand, petitioner Eutiquia Rosario occupied a portion of Lot No. 2592, allegedly with the permission of the heirs of Nicolas Maneja, one of the original co-owners of Lot No. 2587. Respondent claims that all petitioners have occupied portions of the subject property by virtue of his own liberality.

Respondent developed portions of Lots Nos. 2587 and 2592 occupied by him into a resort known as the Borromeo Beach Resort. In his desire to expand and extend the facilities of the resort that he established on the subject properties, respondent demanded that petitioners vacate the property. Petitioners, however, refused to vacate their homes.

On 16 February 1994, respondent filed a Complaint[5] for ejectment with the MTC against the petitioners. After a summary proceeding, the MTC, in a Decision[6] dated 10 October 1994, found that Lots Nos. 2587 and 2592 were owned in common by respondent with other persons. The MTC ruled that respondent did not have a preferential right of possession over the portions occupied by petitioners, since Lots Nos. 2587 and 2592 were not yet partitioned nor the disputed portions assigned to respondent as his determinate share. Thus, the MTC held that respondent had no right to evict petitioners therefrom. Consequently, respondents Complaint was dismissed.

Notably, the MTC held that respondent and the spouses Bascon were the owners in common of Lot No. 2587 and their respective shares had not yet been determined by partition as proven by a testimony given by respondent in Civil Case No. R-14600, viz:

Q. And the participation there of Inocencio Bascon is 2/8 of the said parcel of land?A. Yes sir.

Q. And until the present that parcel of land is undivided?A. It is not yet partitioned, but during the time of Basilisa Maneja we had already made some indications of the portions that we came to occupy.

Q. That is the parcel of land where you have your beach resort?A. Yes, sir; and that was our agreement, verbally, that with respect to the portion of the land towards the sea-shore it will be my share and that portion of the land towards the upper part will be theirs. [7]

On appeal, the RTC reversed the Decision of the MTC. It held that Article 487 of the Civil Code, which allows any one of the co-owners to bring an action in ejectment, may successfully be invoked by the respondent because, in a sense, a co-owner is the owner and possessor of the whole, and that the suit for ejectment is deemed to be instituted for the benefit of all co-owners. [8] The RTC also ruled that assuming petitioners were authorized to occupy a portion of the co-owned property, they could resume this occupation when the properties shall have been partitioned and allocated to the ones who gave them permission to reside therein. It thus held:

WHEREFORE, judgment of the lower court is hereby reversed and the defendants are hereby directed to vacate the premises in question without prejudice to their going back to the land after partition shall have been effected by the coheirs and/or co-owners among themselves but to the specific portion or portions adjudicated to the person or persons who allegedly authorized them to occupy their portions by tolerance.[9]

The Court of Appeals affirmed the Decision of the RTC; hence, this petition which involves the following assignment of errors:[10]

1. That with grave abuse of discretion, amounting to excess of jurisdiction, the honorable eleventh division of the court of appeals erred in NOT APPLYING and/or in NOT DECLARING private respondent juanito borromeo estopped in filing this ejectment case against the herein six (6) petitioners.

2. That with grave abuse of discretion, the honorable eleventh division of the court of appeals erred in incorrectly applying the statute of frauds, considering that the verbal agreement entered into by and between spouses inocencio bascon and basilisa maneja on the one hand and juanito borromeo on the other more than twenty (20) years ago today, was already an EXECUTED CONTRACT.

3. That with grave abuse of discretion, amounting to excess of jurisdiction, the honorable eleventh division of the court of appeals erred in ignoring outright article 493 of the new civil code of the philippines, considering that the six (6) petitioners are only ASSIGNEES, pure and simple, of co-owners spouses ignacio bascon and basilisa maneja and/or andres bascon, the adopted son of the said spouses.

4. That granting arguendo that the herein six (6) petitioners have to be ejected, the eleventh division of the court of appeals erred in NOT remanding this case to the court of origin for the reception of evidence for damages, pursuant to and in accordance with art. 546, new civil code.

The petition cannot prosper.

At the outset it must be stated that petitioners ground their petition on respondents testimony in Civil Case No. R-14600 that he had agreed with co-owner, Basilisa Maneja, on the portions they each were to occupy in Lot No. 2587 prior to the partition of the property. However, respondents testimony and, consequently, the agreement alluded to therein pertains solely to Lot No. 2587which, admittedly, all of petitioners occupy, save for Eutiquia Rosario who occupies Lot No. 2592. No argument was presented in this petition as regards the latters claim. Having no basis to review Eutiquia Rosarios claim to be allowed to continue in her occupation of Lot No. 2592, this Court maintains the holding of the RTC on this matter, as affirmed by the Court of Appeals, that respondent has the right to eject petitioner Eutiquia Rosario from Lot No. 2592.

With regard to the other five (5) petitioners, the Court notes that their first three assignments of errors are interrelated and built on each other. Petitioners allege that respondents testimony in Civil Case No. R-14600, expressing that the upper two-eighths (2/8) portion of Lot No. 2587 would be occupied by Basilisa Maneja, constituting as it does a waiver of said portion, has estopped respondent from claiming the portion. Basilisa Maneja and her husband allegedly relied on this agreement when the spouses assigned the upper portion of Lot No. 2587 to petitioners. Moreover, petitioners claim that their occupation of the upper portion of Lot No. 2587 had consummated the verbal agreement between respondent and Basilisa Maneja and brought agreement beyond the purview of the Statute of Frauds.

A careful perusal of the foregoing issues reveals that petitioners assumed the following as proven facts: (1) respondent had indicated to Basilisa Maneja the portions they were to occupy in Lot No. 2587; and (2) the Spouses Bascon assigned to petitioners their portions of Lot No. 2587. By claiming these as the bases for their assignment of errors, petitioners in essence are raising questions of fact. [11]

The issues raised by petitioners on the application of estoppel, statute of frauds, and the assignment of properties owned in common in their favor, while ostensibly raising questions of law, invite this Court to rule on questions of fact. This runs counter to the settled rule that only questions of law may be raised in a petition for review before the Court and the same must be distinctly set forth. [12]

It is not the function of this Court to weigh anew the evidence already passed upon by the Court of Appeals for such evidence is deemed final and conclusive and may not be reviewed on appeal. A departure from the general rule may be warranted, among others, where the findings of fact of the Court of Appeals are contrary to the findings and conclusions of the trial court, or when the same is unsupported by the evidence on record.[13]

In the instant case, the RTC and the Court of Appeals rendered judgment merely on questions of law as applied to the facts as determined by the MTC. Consequently this Court must proceed on the same set of facts without assuming, as petitioners have done, the veracity of claims which have been considered, but not accepted as facts, by the courts below.

Guided by the foregoing, this Court finds in this case that filtered of the muddle from petitioners assignment of errors, it is unmistakable that respondent has a right to eject the petitioners from Lot No. 2587.

Article 487 of the Civil Code, which provides simply that [a]ny one of the co-owners may bring an action in ejectment, is a categorical and an unqualified authority in favor of respondent to evict petitioners from the portions of Lot. No. 2587.

This provision is a departure from Palarca v. Baguisi,[14] which held that an action for ejectment must be brought by all the co-owners. Thus, a co-owner may bring an action to exercise and protect the rights of all. When the action is brought by one co-owner for the benefit of all, a favorable decision will benefit them; but an adverse decision cannot prejudice their rights. [15]

Respondents action for ejectment against petitioners is deemed to be instituted for the benefit of all co-owners of the property[16] since petitioners were not able to prove that they are authorized to occupy the same.

Petitioners lack of authority to occupy the properties, coupled with respondents right under Article 487, clearly settles respondents prerogative to eject petitioners from Lot No. 2587. Time and again, this Court has ruled that persons who occupy the land of another at the latter's tolerance or permission, without any contract between them, are necessarily bound by an implied promise that they will vacate the same upon demand, failing in which a summary action for ejectment is the proper remedy against them.[17]

Petitioners pose the strange claim that respondent had estopped himself from filing an ejectment case against petitioners by his aforequoted testimony in Civil Case No. R-14600. Such testimony is irrelevant to the case at bar, as it does nothing to strengthen the claim of petitioners that they had a right to occupy the properties. This testimony merely indicates that there might have been an agreement between the Spouses Bascon and Borromeo as to which of them would occupy what portion of Lot No. 2587. Yet this averment hardly establishes a definitive partition, or moreover, any right of petitioners to dwell in any portion of Lot No. 2587. Besides, [e]stoppel is effective only as between the parties thereto or their successors in interest; thus, only the spouses Bascon or their successors in interest may invoke such estoppel. A stranger to a transaction is neither bound by, nor in a position to take advantage of, an estoppel arising therefrom.[18]

For the same reason, it is of no moment whether indeed, as petitioners claim, there was a verbal contract between Basilisa Maneja and Borromeo when the latter indicated the portions they each were to occupy in Lot No. 2587. Such verbal contract, assuming there was one, does not detract from the fact that the common ownership over Lot No. 2587 remained inchoate and undivided, thus casting doubt and rendering purely speculative any claim that the Spouses Bascon somehow had the capacity to assign or transmit determinate portions of the property to petitioners.

Thus, in order that the petition may acquire any whiff of merit, petitioners are obliged to establish a legal basis for their continued occupancy of the properties. The mere tolerance of one of the co-owners, assuming that there was such, does not suffice to establish such right. Tolerance in itself does not bear any legal fruit, and it can easily be supplanted by a sudden change of heart on the part of the owner. Petitioners have not adduced any convincing evidence that they have somehow become successors-in-interest of the Spouses Bascon, or any of the owners of Lot No. 2587.

Indeed, there is no writing presented to evidence any claim of ownership or right to occupancy to the subject properties. There is no lease contract that would vest on petitioners the right to stay on the

property. As discussed by the Court of Appeals, [19] Article 1358 of the Civil Code provides that acts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property must appear in a public instrument. How then can this Court accept the claim of petitioners that they have a right to stay on the subject properties, absent any document which indubitably establishes such right? Assuming that there was any verbal agreement between petitioners and any of the owners of the subject lots, Article 1358 grants a coercive power to the parties by which they can reciprocally compel the documentation of the agreement. [20]

Thus, the appellate court correctly appreciated the absence of any document or any occupancy right of petitioners as a negation of their claim that they were allowed by the Spouses Bascon to construct their houses thereon and to stay thereon until further notice. On this note, this Court will no longer belabor petitioners allegation that their occupation of Lot No. 2587 is justified pursuant to the alleged but unproven permission of the Spouses Bascon.

All six (6) petitioners claim the right to be reimbursed necessary expenses for the cost of constructing their houses in accordance with Article 546 of the Civil Code. [21] It is well-settled that while the Article allows full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. Verily, persons whose occupation of a realty is by sheer tolerance of its owners are not possessors in good faith.[22]

The lower courts have made a common factual finding that petitioners are occupying portions of Lots No. 2587 and 2592 by mere tolerance. Thus, petitioners have no right to get reimbursed for the expenses they incurred in erecting their houses thereon.

WHEREFORE, premises considered, the Petition is DENIED and the Decision of the Court of Appeals AFFIRMED. Costs against petitioners.

SO ORDERED.

SI V. CA

342 SCRA 653

FACTS:

Escolastica conveyed a parcel of land to her three sons. This is evidenced by three deeds of sale. One of the sons then sold a part of the land to spouses Si. Jose and his wife then sought to annul the sale alleging the co-ownership over the land.

HELD:

After the physical division of the lot among the co-owners, the community ownership is terminated, and the right of preemption or redemption for each other was no longer available. There is no co-ownership when the different portions owned by the different people are already concretely determined and separately identifiable, even if not yet technicallydescribed.

G.R. No. 122249. January 29, 2004]

REYNALDO, TELESFORO, REMEDIOS, ALFREDO and BELEN, all surnamed AGUIRRE, VICENTA, HORACIO and FLORENCIO, all surnamed MAGTIBAY and LEONILA, CECILIA, ANTONIO, and VENANCIO, all surnamed MEDRANO, and ZOSIMA QUIAMBAO, petitioners, vs. COURT OF APPEALS and ELIAS, JOSE, ARSENIA and ROGELIO, all surnamed BALITAAN, and MARIA ROSALES, respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision[1] dated July 26, 1995 rendered by the Court of Appeals in CA-G.R. CV No. 42350 which set aside the Decision[2] dated April 28, 1992 of the Regional Trial Court of Batangas City (Branch 2) in Civil Case No. 202,[3] and declared private respondents Heirs of Tiburcio Balitaan, as owners of the parcel of unregistered land with an approximate area of 1,695 square meters, located at Aplaya, Bauan, Batangas.

The facts of the case are as follows:

In his lifetime, Leocadio Medrano was the owner and possessor of a parcel of residential land, situated in Aplaya, Bauan, Batangas, containing an area of 2,611 square meters. [4] The parcel of land was conjugal property, having been acquired by Leocadio during his first marriage with one Emiliana Narito. Their union begot four children, namely: (a) Gertrudes Medrano, now deceased, represented in this case by her children, herein petitioners Telesforo, Reynaldo, Remedios, Alfredo, and Belen, all surnamed Aguirre; (b) Isabel Medrano, likewise deceased, represented by her children, herein petitioners Vicenta, Horacio, and Florencio, all surnamed Magtibay; (c) Placido Medrano, also deceased, represented by his only child, herein petitioner Zosima Quiambao; and (d) Sixto Medrano.

After the death of his first wife, Leocadio contracted a second marriage with Miguela Cario. Their union bore four children, herein co-petitioners, namely: Venancio, Leonila, Antonio and Cecilia, all surnamed Medrano.

Upon the death of Leocadio on March 19, 1945, the surviving heirs agreed that Sixto should manage and administer the subject property.

Sixto died on May 17, 1974. It was only after his death that petitioners heard rumors that Sixto had, in fact, sold significant portions of the estate of Leocadio. It appears that on September 7, 1953, Sixto, without the knowledge and consent of the petitioners, executed an Affidavit of Transfer of Real Property stating therein that he was the only heir of Leocadio.[5]Sixto declared that Leocadio died on September 16, 1949, instead of the actual date of his death on March 19, 1945. With the use of said affidavit and a survey plan,[6] Tax Declaration No. 40105 in the name of Leocadio was cancelled and Tax Declaration No. 44984 was issued in the name of Sixto.[7] On August 29, 1957, Sixto sold to Maria Bacong a 160- square meter portion of the subject land.[8] On September 28, 1959, Sixto sold to Tiburcio Balitaan a 1,695 square meter portion of the same land.[9] Sometime in November 1967, Maria Bacong sold her property to Rosendo Bacong.[10]

Petitioners demanded the reconveyance of the portions sold by Sixto but Tiburcio Balitaan, Maria Bacong and Rosendo Bacong refused to do so. Hence, petitioners filed against them before the Regional

Trial Court of Batangas (Branch 2), a complaint for Declaration of Nullity of Documents, Partition, Malicious Prosecution and Damages, docketed as Civil Case No. 202.[11]

In their Answer, Maria Bacong and Rosendo Bacong contend that petitioners have no cause of action because they acquired their property thru a valid deed of sale dated August 29, 1957, executed by Sixto and, alternatively, petitioners cause of action, if any, was barred by prescription and laches. [12]

In his Answer, Tiburcio Balitaan contends that petitioners have no cause of action since petitioners were well-aware of the sale of the property to him by Sixto; and that he was an innocent purchaser for value, in possession and enjoyment of the land in the concept of absolute owner, peacefully and publicly. He further echoed the contention of Maria and Rosendo Bacong that any cause of action petitioners may have was barred by prescription and laches.[13]

Maria Bacong died during the pendency of the suit in the trial court and she was substituted by her surviving heirs, namely, Lorenza, Elena, Felipa, Manuel, Marilou, Ricardo, Medel, Monchito and Milag, all surnamed Medrano.[14] Tiburcio Balitaan also died and was substituted by his heirs, herein private respondents, namely: his wife, Maria Rosales and their four children: Elias, Jose, Arsenia and Rogelio, all surnamed Balitaan.[15]

On July 28, 1989, petitioners and Rosendo Bacong, for himself and as attorney-in-fact of the heirs of Maria Bacong, entered into a compromise agreement to settle the case between them. [16] The compromise agreement, as approved by the trial court, provided that Rosendo Bacong and the heirs of Maria Bacong agreed to pay P30,000.00 to petitioners in recognition of petitioners ownership of a 269-square meter portion[17] and in consideration of which, petitioners recognized the full ownership, rights, interest and participation of the former over said land.[18] The area of the subject land is thus reduced to 2,342 square meters (2,611 square meters minus 269 square meters).

After trial on the merits, the trial court rendered judgment dated April 28, 1992, ruling that private respondents did not dispute, by any evidence, the falsity of the Affidavit of Transfer, as well as the fact that Sixto had co-owners to the property. It found that private respondents affirmative defense of laches and/or prescription are unavailing against a property held in co-ownership as long as the state of co-ownership is recognized. Consequently, the trial court upheld the sale made by Sixto in favor of private respondents only to the extent that Sixto is entitled to by virtue of his being a co-owner. [19]

In determining the area that Sixto could have validly sold to private respondents, the trial court, in its decision, provided for the manner of partition among the parties, based on the memorandum submitted by petitioners, thus:

For the four (4) children of the first marriage, namely:

(1) Gertrudes, who is already dead represented by her children Tefesforo, Reynaldo, Remedios, Alfredo and Belen, all surnamed Aguirre 399.42 square meters;

(2) Isabel Medrano, who is already dead, represented by the plaintiffs, her children Vicenta, Horacio and Florencio, all surnamed Magtibay 399.42 square meters;

(3) Placido Medrano (dead), represented by his only child Zosima Medrano 399.42 square meters; and

(4) Sixto Medrano 399.42 square meters only which he had the right to dispose of in favor of Tiburcio Balitaan and Maria Rosales.

The above consist of undivided interest, shares and participations from the inheritance or succession to the conjugal estate of Leocadio Medrano and Emiliana Narito.

For the children of the second marriage their shares in the inheritance from the property of Leocadio Medrano are as follows:

(1) To Venancio Medrano - 138.32 square meters

(2) To Leonila Medrano - 138.32 square meters

(3) To Antonio Medrano - 138.32 square meters

(4) To Cecilia Medrano - 138.32 square meters

with all the above consisting of undivided shares, interest and participation in the estate.

For the defendants Maria Rosales, surviving spouse of the deceased Tiburcio Balitaan and their Children, an area of 399.42 square meters, the only area and extent which Sixto Medrano could have legally dispensed of in their favor.[20]

Thus, the dispositive portion of the trial courts decision reads as follows:

WHEREFORE, in view of the foregoing, the Court renders judgment in favor of the plaintiffs and against the defendants, to wit:

(a) Ordering the partition of the property in question among the plaintiffs and the defendants; and

(b) Ordering the parties, plaintiffs and defendants, to make a partition among themselves by proper instruments of conveyance and to submit before this Court a project of partition should the parties be able to agree for the confirmation of the Court within two (2) months upon receipt of this decision, otherwise this Court will be constrained to appoint commissioners to make the partition in accordance with law.

All other claims not having been duly proved are ordered dismissed.

SO ORDERED.[21]

Aggrieved, private respondents appealed to the Court of Appeals.[22]

On July 26, 1995, the appellate court rendered judgment recognizing the validity of the sale only with respect to the undivided share of Sixto Medrano as co-owner; but nonetheless, declaring respondents as absolute owners of 1,695 square meters of the subject property, reasoning that:

. . . Defendants-appellees have been in possession, in the concept of owner, of the entire parcel of land sold to Tiburcio Balitaan by Sixto Medrano for more than ten years, seventeen years to be exact (1958-1975). Relying on the affidavit of transfer (Exhibit B) the tax declaration (Exhibit C) and the survey plan (Exhibit D) shown to him by Sixto Medrano which indicate the latter as owner of the property in dispute, Tiburcio Balitaan believed transfer to him was effected. (TSN, April 17, 1991, pp. 14-17) and thus,

entered the property as owner (Ibid. at p. 13) Tiburcio Balitaan, believing himself as the lawful transferee, in addition, caused Tax Declaration No. 51038 to be issued in his name (Exhibits 6, 6-A, 6-B, and 6-C). Thus, although the sale of the co-owned property is only valid as to the undivided share of Sixto Medrano, defendants, by virtue of their open, adverse and uninterrupted possession from 1958 (Exhibit G) to 1975, obtained title to the entire property and not just Sixtos undivided share. This is pursuant to Article 1134 (1957a) of the New Civil Code which provides that:

Ownership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years.

. . .

Plaintiffs did not at all inquire as to the status of their property all this time and thus have been remiss of their duties as owners of the property. Plaintiffs waited until Sixtos death to learn more about their property. Even though the co-ownership is to be preserved in accordance with the wishes of the deceased, the plaintiffs should have taken it upon themselves to look into the status of the property once in a while, to assure themselves that it is managed well and that they are receiving what is due them as co-owners of the parcel of land or to at least manifest their continued interest in the property as normal owners would do. But the plaintiffs did not show any interest in the way Sixto Medrano was managing the property which in effect gave the latter carte blanche powers over the same. Such passivity is aggravated by the fact that one of the plaintiffs resides a mere 600 meters away from the disputed property (TSN, April 17, 1991, p. 13). By not showing any interest, the plaintiffs have, in fact, slept on their rights and thus, cannot now exercise a stale right.[23]

Petitioners sought reconsideration[24] but the appellate court denied it in a Resolution dated October 5, 1995.[25]

In their present recourse, petitioners take exception from the appellate courts findings that respondents have been in possession, in the concept of owner of the entire parcel of land sold to Tiburcio Balitaan by Sixto Medrano for seventeen years (1958-1975), relying on the Affidavit of Transfer and Tax Declaration No. 51038 in the name of Sixto; and that Tiburcio acquired ownership of the whole property from Sixto through ordinary prescription for ten years.

Petitioners submit that Tiburcio Balitaan was not a purchaser in good faith and for value since there are enough circumstances which should have put him on guard and prompted him to be more circumspect and inquire further about the true status of Sixto Medranos ownership; that during his lifetime, Tiburcio was a neighbor of petitioners and was well-aware that Sixto had other siblings but Tiburcio chose to rely on the Affidavit of Transfer executed by Sixto Medrano declaring that he was the only heir of Leocadio; that the Court of Appeals should not have faulted them for failing to inquire about the status of the disputed property until after the death of Sixto Medrano; that they are not guilty of laches.

It is settled that in the exercise of the Supreme Courts power of review, the findings of facts of the Court of Appeals are conclusive and binding on the Supreme Court. [26] The exceptions to this rule are: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to

the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.[27] Exceptions (4), (7), (10) and (11) are present in the instant case.

We find the petition meritorious.[28] We agree with the petitioners that the Court of Appeals committed a reversible error in upholding the claim of petitioners that they acquired ownership of the subject property through prescription.

Acquisitive prescription of real rights may be ordinary or extraordinary. Ordinary acquisitive prescription requires possession of things in good faith and with just title for the time fixed by law;[29] without good faith and just title, acquisitive prescription can only be extraordinary in character. Regarding real or immovable property, ordinary acquisitive prescription requires a period of possession of ten years,[30] while extraordinary acquisitive prescription requires an uninterrupted adverse possession of thirty years.[31]

Ordinary acquisitive prescription demands that possession be in good faith, which consists in the reasonable belief that the person from whom the thing is received has been the owner thereof and could thereby transmit that ownership.[32] There is just title when the adverse claimant comes into possession of the property through any of the modes recognized by law for the acquisition of ownership or other real rights, but that the grantor is neither the owner nor in a position to transmit the right. [33]

Article 1130 of the Civil Code states that the title for prescription must be true and valid. In Doliendo vs. Biarnesa,[34] we elucidated on this provision, thus:

We think that this contention is based on a misconception of the scope and effect of the provisions of this article of the Code in its application to ordinary prescription. It is evident that by a titulo verdadero y valido in this connection we are not to understand a titulo que por si solo tiene fuerza de transferir el dominio sin necesidad de la prescricion (a title which of itself is sufficient to transfer the ownership without the necessity of the lapse of the prescription period); and we accept the opinion of a learned Spanish law writer who holds that the titulo verdadero y valido as used in this article of the code prescribes a titulo Colorado and not merely putativo; a titulo Colorado being one which a person has when he buys a thing, in good faith, from one whom he believes to be the owner, and a titulo putativo being one which is supposed to have preceded the acquisition of a thing, although in fact it did not, as might happen when one is in possession of a thing in the belief that it had been bequeathed to him. (Viso Derecho Civil, Parte Segunda, p. 541)[35]

The requirements for ordinary acquisitive prescription as hereinabove described have not been met in this case.

It must be remembered that the burden of proving the status of a purchaser in good faith lies upon him who asserts that status. It is not sufficient to invoke the ordinary presumption of good faith, that is, that everyone is presumed to have acted in good faith, since the good faith that is here essential is integral with the very status that must be established.[36]

After a careful examination of the records, we find that private respondents failed to discharge the burden of proof that Tiburcio Balitaan was a purchaser in good faith. It is undisputed that Tiburcio practically lived his entire lifetime in the area where the property in dispute is located and had been a

neighbor of petitioners. He knew that Sixto Medrano had other siblings because his son, Dr. Elias Balitaan, is the godson by baptism of spouses Jose Aguirre and Gertrudes Medrano, the latter being a deceased sister of Sixto. Thus, Tiburcio was not a complete stranger to the Medrano clan. Yet, he deliberately chose to close his eyes to said facts and despite his personal knowledge to the contrary, he purchased the disputed property from Sixto on the basis of the misrepresentation of the latter in his Affidavit of Transfer that he is the sole surviving heir of Leocadio. A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. [37]

Since the disputed property is an unregistered land, Tiburcio as buyer thereof did so at his peril. Private respondents claim that Tiburcio bought the land in good faith, that is, without notice that some other person has a right to or interest in the property, would not protect them if it turns out, as it actually did in this case, that the seller, Sixto Medrano, did not own the entire property at the time of the sale, but only an undivided portion of the land as a co-owner. Private respondents failed to show that the petitioners were notified of the subject sale or that respondents gave their consent to the sale. Not being in good faith, the ten-year period required for ordinary acquisitive prescription does not apply.

Even the thirty-year period under extraordinary acquisitive prescription has not been met in this case. Private respondents claim to have been in possession, in the concept of owner, of the entire parcel of land sold to Tiburcio Balitaan by Sixto Medrano for only seventeen years (1958-1975).

In addition, as we have enunciated in Salvador vs. Court of Appeals,[38] to wit:

This Court has held that the possession of a co-owner is like that of a trustee and shall not be regarded as adverse to the other co-owners but in fact as beneficial to all of them. Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned. A mere silent possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection of buildings and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners.

Thus, in order that a co-owners possession may be deemed adverse to the cestui que trust or the other co-owners, the following elements must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui  que trust or the other co-owners; (2) that such positive acts of repudiation have been made known to the cestui que trust or the other co-owners; and (3) that the evidence thereon must be clear and convincing.[39] (Emphasis supplied)

Tested against these guidelines, respondents failed to present competent evidence that the acts of Sixto adversely and clearly repudiated the existing co-ownership among the heirs of Leocadio Medrano.

Private respondents reliance on the tax declaration in the name of Sixto Medrano is unworthy of credit since we have held on several occasions that tax declarations by themselves do not conclusively prove title to land.[40] Further, private respondents failed to show that the Affidavit executed by Sixto to the effect that he is the sole owner of the subject property was known or made known to the other co-heirs of Leocadio Medrano.

Neither can we subscribe to the appellate courts view that petitioners are guilty of laches. Laches is the negligence or omission to assert a right within a reasonable time, warranting a presumption that the

party entitled to assert it has abandoned it or declined to assert it.[41] It does not involve mere lapse or passage of time, but is principally an impediment to the assertion or enforcement of a right, which has become under the circumstances inequitable or unfair to permit. [42] The rule that each co-owner may demand at any time the partition of the common property implies that an action to demand partition is imprescriptible or cannot be barred by laches.[43]

We have consistently held that if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale. [44] Article 493 of the Civil Code provides:

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

It clearly provides that the sale or other disposition affects only the sellers share pro indiviso, and the transferee gets only what corresponds to his grantors share in the partition of the property owned in common. Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void; only the rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of the property. [45] Accordingly, we held in Bailon-Casilao vs. Court of Appeals:

From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property by one-co-owner without the consent of the other co-owners is not null and void.However, only the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.

The proper action in cases like this is not for the nullification of the sale or for the recovery of possession of the thing owned in common from the third person who substituted the co-owner or co-owners who alienated their shares, but the DIVISION of the common property as if it continued to remain in the possession of the co-owners who possessed and administered it [Mainit v. Bandoy, supra].

Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court. Neither recovery of possession nor restitution can be granted since the defendant buyers are legitimate proprietors and possessors in joint ownership of the common property claimed [Ramirez v. Bautista, supra].[46]

It is clear therefore that the deed of sale executed by Sixto Medrano in favor of Tiburcio Balitaan is a valid conveyance only insofar as the share of Sixto Medrano in the co-ownership is concerned. Thus, the respondent court erred in declaring the ownership of the entire 1,695-square meter property sold by Sixto, in favor of the private respondents.

The next question is what is the area of the pro indiviso share pertaining to Sixto Medrano that was sold to private respondents? The trial court endeavored to determine the same by ascertaining the inheritance of each of the heirs of Leocadio. However, the manner of partition as set out by the trial court in the text of its decision needs to be amended so as to conform to the laws on intestate

succession under the Old Civil Code absent any allegation or showing that Leocadio left any last will and testament.

It is not disputed that the 2,342-square meter property was a conjugal property of Leocadio and Emiliana. Upon the death of Emiliana, which occurred many years before the death of Leocadio in 1945, both deaths occurring before the enactment of the New Civil Code in 1950, all the four children of the first marriage and the four children of the second marriage shall share equally. The subject property should have been divided into eight equal parts, pursuant to Articles 921 and 931 of the old Civil Code,[47] or 292.75 square meters each. The respective heirs of the now deceased children of Leocadio inherit by way of representation the respective shares of their respective parents, pursuant to Articles 933 and 934 of the Old Civil Code.[48]

At the time of death of Leocadio in 1945, Miguela was entitled only to the usufruct of the land pursuant to Article 834 of the Old Civil Code,[49] which provides that [i]f only one legitimate child or descendant survives, the widower or widow shall have the usufruct of the third available for betterment, such child or descendant to have the naked ownership until, on the death of the surviving spouse, the whole title is merged in him.

Thus, to recapitulate, each of the heirs of Leocadio should inherit 292.75 square meters, pro-indiviso (2,342 square meters 8 = 292.75 square meters) after deducting from the original 2,611 square meters of the subject property the 269 square meters ceded to the heirs of Maria Bacong in a compromise agreement among the petitioners and the heirs of Maria Bacong.The deceased children of Leocadio are represented by their respective heirs by right of representation under Articles 933 and 934 of the Old Civil Code.

Accordingly, the undivided shares of Leocadios eight children or their heirs by right of representation, upon the death of Leocadio in 1945 are as follows:

(1) Venancio Medrano - 292.75 square meters

(2) Leonila Medrano - 292.75 square meters

(3) Antonio Medrano - 292.75 square meters

(4) Cecilia Medrano - 292.75 square meters

(5) Heirs of Gertrudes M. Aguirre, Telesforo, Reynaldo, Remedios, Alfredo and Belen, all surnamed Aguirre- - 292.75 square meters

(6) Heirs of Isabel M. Magtibay, Vicenta, Horacio and Florencio, all surnamed Magtibay - 292.75 square meters

(7) Heirs of Placido Medrano, plaintiff Zosima Medrano Quimbao - 292.75 square meters

(8) Sixto Medrano - 292.75 square meters

During the pendency of the case in the trial court but after the death of Sixto, petitioners sold 460 square meters to one Mateo Castillo. Consequently, the 460 square meters should be charged against the shares of petitioners only and should not affect the 292.75 square meters undivided share of Sixto Medrano which he had sold in 1959.[50] Accordingly, 460 square meters divided by 7 equals 65.71 square meters. Deducting said area from 292.75 square meters, the final undivided share of each of the seven heirs of Leocadio should be 227.04 square meters (292.75 - 65.71 = 227.04) and that pertaining to Sixto in 292.75 square meters.

Thus, the manner of partition set forth by the trial court in its decision should be amended, as follows:

(1) Gertrudes M. Aguirre, deceased, represented by her children, herein petitioners Telesforo, Reynaldo, Remedios, Alfredo and Belen, all surnamed Aguirre- 227.04 square meters

(2) Isabel M. Magtibay, deceased, represented by her children, herein petitioners Vicenta, Horacio and Florencio, all surnamed Magtibay - 227.04 square meters

(3) Placido Medrano, deceased, represented by his only child, Placido Medrano - 227.04 square meters

(4) Private respondents Maria Rosales and heirs of Tiburcio Balitaan, namely: Elias, Jose, Arsenia and Rogelio all surnamed Balitaan (in lieu of Sixto Medrano) - 292.75 square meters

(5) Venancio Medrano - 227.04 square meters

(6) Leonila Medrano - 227.04 square meters

(7) Antonio Medrano - 227.04 square meters

(8) Cecilia Medrano - 227.04 square meters

(9) Rosendo Bacong - 269 square meters

(10) Mateo Castillo - 460 square meters

WHEREFORE, we GRANT the petition. The assailed decision of the Court of Appeals in CA-G.R. CV No. 42350, dated July 26, 1995, is REVERSED and SET ASIDE. The decision of the Regional Trial Court is REINSTATED with the following MODIFICATIONS:

The sale in favor of private respondents is declared VALID but only insofar as the 292.75 square meters undivided share of Sixto Medrano in the subject property is concerned.

Let the parcel of land, located at Aplaya, Bauan, Batangas, consisting of 2,611 square meters, be partitioned and distributed as determined by the Court in the text of herein decision.Accordingly, let the records of the case be remanded to the Regional Trial Court of Batangas City (Branch 2) in Civil Case No. 202 for further appropriate proceedings under Rule 69 of the Rules of Court.

No pronouncement as to costs.

SO ORDERED.

SPOUSES ELEGIO* CAEZO and G.R. No. 170189DOLIA CAEZO, Petitioners, Present: CARPIO, J., Chairperson, NACHURA, BERSAMIN,**

- versus - ABAD, and MENDOZA, JJ. SPOUSES APOLINARIO and Promulgated:CONSORCIA L. BAUTISTA, Respondents. September 1, 2010

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

D E C I S I O N

CARPIO, J.:

G.R. No. 170189 is a petition for review[1] assailing the Decision[2] promulgated on 17 October 2005 by

the Court of Appeals (appellate court) in CA-G.R. CV No. 75685. The appellate court granted the appeal

filed by the Spouses Apolinario and Consorcia L. Bautista (spouses Bautista) and dismissed the complaint

for the issuance of a writ of demolition with damages filed by the Spouses Elegio and Dolia Caezo

(spouses Caezo) without prejudice to the filing of the appropriate action with the proper forum. In its

Decision[3] on Civil Case No. MC-00-1069 dated 25 March 2002, Branch 213 of the Regional Trial Court of

Mandaluyong City (trial court) rendered judgment in favor of the spouses Caezo. The trial court also

ordered the issuance of a writ of demolition directing the removal of the structures built by the spouses

Bautista on the portion of the land belonging to the spouses Caezo.

The Facts

The appellate court narrated the facts as follows:

Spouses Elegio and Dolia Caezo (hereafter appellees) are the registered owner[s] of a parcel of land with an area of One Hundred Eighty Six (186) square meters, covered by Transfer Certificate of Title (TCT) No. 32911. Spouses Apolinario and Consorcia Bautista (hereafter appellants) are the registered owners of a parcel of land, containing an area of One Hundred Eighty One (181) square meters, covered by Transfer Certificate of Title (TCT) No. 31727. Both parcels of land are located at Coronado Heights, Barangka Ibaba, Mandaluyong City and registered with the Registry of Deeds of Mandaluyong City. Appellants lot is adjacent to that of appellees [sic]. Sometime in 1995, appellees started the construction of a building on their lot. During the construction, appellees discovered that their lot was encroached upon by the structures built by appellants without appellees knowledge and consent. The three (3) surveys conducted confirmed the fact of encroachment. However, despite oral and written demands, appellants failed and refused to remove the structures encroaching appellees lot. Attempts were made to settle their dispute with the barangay lupon, but to no avail. Appellees initiated a complaint with the RTC for the issuance of a writ of demolition. For failure to file an Answer within the extended period granted by the court, appellants were declared in default. Appellees were allowed to present their evidence ex parte before an appointed commissioner. Thereafter the RTC rendered the assailed decision in the terms earlier set forth.[4]

The spouses Caezo filed their complaint for the issuance of a writ of demolition with damages on 13

April 2000. In an Order dated 15 August 2000, the trial court declared the spouses Bautista in default for

failure to answer within the reglementary period. The Public Attorneys Office, which represented the

spouses Bautista at the time, filed a Motion to Admit Answer dated 15 June 2000. The trial court denied

the motion in its Decision.

The Trial Courts Ruling

On 25 March 2002, the trial court promulgated its Decision in favor of the spouses Caezo. The trial court

found that the spouses Bautista built structures encroaching on the land owned by the spouses

Caezo. The spouses Bautista also refused to remove the structures and respect the boundaries as

established by the various surveyors. A referral to the Barangay Lupon failed to settle the controversy

amicably. The trial court thus ruled that the spouses Bautista are builders in bad faith, such that the

spouses Caezo are entitled to an issuance of a writ of demolition with damages.

The dispositive portion of the Decision reads as follows:

IN VIEW WHEREOF, judgment is hereby rendered in favor of the plaintiffs and against the defendants. Let a writ of demolition be accordingly issued directing the removal/demolition of the structures built by the defendants upon the portion of land belonging [to] the plaintiffs at the formers expense. Further,

1. the defendant is ordered to pay P50,000.00 (Philippine Currency) as and by way of moral damages[; and]

2. [t]he defendant is hereby ordered to pay P30,000.00 as and by way of attorneys fees. SO ORDERED.[5]

The spouses Bautista filed a notice of appeal dated 29 April 2002 before the appellate court.

The Appellate Courts Ruling

On 17 October 2005, the appellate court rendered its Decision which reversed the 25 March

2002 Decision of the trial court. The appellate court ruled that since the last demand was made on 27

March 2000, or more than a year before the filing of the complaint, the spouses Caezo should have filed

a suit for recovery of possession and not for the issuance of a writ of demolition. A writ of demolition

can be granted only as an effect of a final judgment or order, hence the spouses Caezos complaint

should be dismissed. Thespouses Caezo failed to specify the assessed value of the encroached portion of

their property. Because of this failure, the complaint lacked sufficient basis to constitute a cause of

action. Finally, the appellate court ruled that should there be a finding of encroachment in the action for

recovery of possession and that the encroachment was built in good faith, the market value of the

encroached portion should be proved to determine the appropriate indemnity.

The dispositive portion of the appellate courts Decision reads as follows:

WHEREFORE, premises considered, the instant appeal is GRANTED. The complaint filed by plaintiffs-appellees is hereby DISMISSED without prejudice to the filing of the appropriate action with the proper forum.

SO ORDERED.[6]

Issues

The spouses Caezo enumerated the following grounds to support their Petition:

I. Whether the Honorable Court of Appeals gravely erred in granting the petition of the [spouses Bautista] and reversing the Decision of the Court a quo; [and]

II. Whether the Honorable Court of Appeals gravely erred in stating that the petitioners

should have filed recovery of possession and not writ of demolition.[7]

The Courts Ruling

The petition has merit.

The present case, while inaccurately captioned as an action for a Writ of Demolition with Damages is in

reality an action to recover a parcel of land or an accion reivindicatoriaunder Article 434 of the Civil

Code. Article 434 of the Civil Code reads: In an action to recover, the property must be identified, and

the plaintiff must rely on the strength of his title and not on the weakness of the defendants

claim. Accion reivindicatoria seeks the recovery of ownership and includes the jus utendi and the jus

fruendi brought in the proper regional trial court. Accion reivindicatoria is an action whereby plaintiff

alleges ownership over a parcel of land and seeks recovery of its full possession.[8]

In order that an action for the recovery of title may prosper, it is indispensable, in accordance with the

precedents established by the courts, that the party who prosecutes it must fully prove, not only his

ownership of the thing claimed, but also the identity of the same.[9] However, although the identity of

the thing that a party desires to recover must be established, if the plaintiff has already proved his right

of ownership over a tract of land, and the defendant is occupying without right any part of such tract, it

is not necessary for plaintiff to establish the precise location and extent of the portions occupied by the

defendant within the plaintiffs property.[10]

The spouses Caezo were able to establish their ownership of the encroached property. Aside from

testimonial evidence, the spouses Caezo were also able to present documentary and object evidence

which consisted of photographs,[11] transfer certificates of title,[12] and a relocation survey plan.[13]

The relocation survey plan also corroborated Elegio Caezos testimony on the reason for the spouses

Bautistas attitude regarding the encroached property. The relocation survey plan showed that the

spouses Bautistas property encroached upon that of the spouses Caezo by 0.97 centimeters, while the

spouses Bautistas property was encroached upon by 1.01 centimeters by another landowner. Elegio

Caezo testified thus:

Q I am showing you a survey plan of lot 13. Can you please tell us what is this survey plan?A That is the survey plan of the surveyor whom we hired sir. Q Can you please point to us where in this plan is your property indicated?A This is our property, sir. Q The witness, your Honor, is pointing to Lot 13 indicated in the survey plan. How about the property of the defendants?A The defendants property is this, sir. Q The witness, your Honor, is pointing to Lot 14 indicated in the survey plan. Now, Mr. Witness, you said that the defendants wanted you to recover that portion of your property encroached on from the property adjacent to theirs. Please illustrate to us by referring to this survey plan what the defendants meant?A The defendants want us to get the portion they had encroached on from Lot 15 because, according to them, Lot 15 also encroached on their lot, sir. Q The witness, your Honor, is pointing to Lot 15 indicated in the plan. What happened next?A We told them that this is not possible because Lot 15 is not adjacent to our property, sir. Q What did the defendants do?A The defendants still refused to remove their structure, sir. Q So, what happened?A We filed a complaint against the defendants before the Office of the Barangay Captain of Barangay Barangka, Ibaba, sir. Q What happened in the Barangay?A The Barangay council tried to settle the matter amicably between us. However, no settlement was reached, sir. Q While in the barangay, did you offer anything to the defendants in order to settle the case?A Yes, sir. Q What was it?A We offered that if the defendants will remove the structures, we are willing to shoulder half of the expenses for the removal. Q What did the defendants say to this?

A They refused our offer and insisted on their previous position that we get our portion from Lot 15, sir. Q What did the Barangay do after failing to settle the case?A The Barangay issued a Certification to File Action, sir.[14]

Given the efforts made by the spouses Caezo to settle the present issue prior to the filing of a Complaint,

the trial court was justified in ruling that the spouses Bautista were in default and in not admitting their

Answer. The Complaint was not the spouses Bautistas first encounter with the present issue. Moreover,

the spouses Bautista failed to file their Answer even after the expiry of the motion of extension granted

to them.[15]

The testimony and the relocation survey plan both show that the spouses Bautista were aware of the

encroachment upon their lot by the owner of Lot 15 and thus they made a corresponding encroachment

upon the lot of the spouses Caezo. This awareness of the two encroachments made the spouses Bautista

builders in bad faith. The spouses Caezo are entitled to the issuance of a writ of demolition in their favor

and against the spouses Bautista, in accordance with Article 450 of the Civil Code.[16]

We affirm the awards made by the trial court in its Decision:

x x x Considering the length of time when [the spouses Caezo] were deprived of beneficial use on the subject portion of land owned by them, the [spouses Bautista] are likewise liable to payP30,000.00 (Philippine Currency) in accordance with Article 451 of the Civil Code. With respect to the prayer for the award of P50,000.00 (Philippine Currency) as moral damages, the court decides to give due course to it in view of the fact that the [spouses Caezo] satisfactorily proved the existence of the factual basis of the damages and its causal relation to [the spouses Bautistas] acts. There was bad faith on the part of the [spouses Bautista] when they built the structures upon the land not belonging to them. This wrongful act is the proximate cause which made the [spouses Caezo] suffer mental anguish, sleepless nights and serious anxiety.The [spouses Caezo] positively testified about these matters. As regards the prayer for exemplary x x x damages, no sufficient evidence were adduced which would warrant and justify this court to award the same. The prayer for attorneys fees however, is found meritorious hence, the same is hereby granted.[17]

WHEREFORE, we GRANT the petition. The Decision of the Court of Appeals in CA-G.R. CV No. 75685

promulgated on 17 October 2005 is SET ASIDE and the dispositive portion of the Decision of Branch 213,

Regional Trial Court of Mandaluyong City promulgated on 25 March 2002 is AFFIRMED with

MODIFICATION. A writ of demolition of the encroaching structures should be issued against and at the

expense of Spouses Apolinario and Consorcia L. Bautista upon the finality of this judgment. Spouses

Apolinario and Consorcia L. Bautista are further ordered to pay Spouses Elegio and Dolia Caezo P30,000

as actual damages; P50,000 as moral damages; and P30,000 as attorneys fees. The interest rate of 12%

per annum shall apply from the finality of judgment until the total amount awarded is fully paid.

SO ORDERED.

G.R. No. 101522 May 28, 1993

LEONARDO MARIANO, AVELINA TIGUE, LAZARO MARIANO, MERCEDES SAN PEDRO, DIONISIA M. AQUINO, and JOSE N.T. AQUINO, petitioners, vs.HON. COURT OF APPEALS, (Sixteenth Division), GRACE GOSIENGFIAO, assisted by her husband GERMAN GALCOS; ESTER GOSIENGFIAO, assisted by her husband AMADOR BITONA; FRANCISCO GOSIENGFIAO, JR., NORMA GOSIENGFIAO, and PINKY ROSE GUENO, respondents.

The Baristers Law Office for petitioners.

Simeon T. Agustin for private respondents.

NOCON, J.:

Before Us is a petition foe review of the decision, dated May 13, 1991 of the Court of Appeals in CA-G.R. CV No. 13122, entitled Grace Gosiengfiao, et al. v. Leonardo Mariano v. Amparo Gosiengfiao 1 raising as issue the distinction between Article 1088 2 and Article 1620 3 of the Civil Code.

The Court of Appeals summarized the facts as follows:

It appears on record that the decedent Francisco Gosiengfiao is the registered owner of a residential lot located at Ugac Sur, Tuguegarao, Cagayan, particularly described as follows, to wit:

"The eastern portion of Lot 1351, Tuguegarao Cadastre, and after its segregation now designated as Lot 1351-A, Plan PSD-67391, with an area of 1,1346 square meters."

and covered by Transfer Certificate of Title No. T-2416 recorded in the Register of Deeds of Cagayan.

The lot in question was mortgaged by the decedent to the Rural Bank of Tuguegarao (designated as Mortgagee bank, for brevity) on several occasions before the last, being on March 9, 1956 and 29, 1958.

On August 15, 1958, Francisco Gosiengfiao died intestate survived by his heirs, namely: Third-Party Defendants: wife Antonia and Children Amparo, Carlos, Severino and herein plaintiffs-appellants Grace, Emma, Ester, Francisco, Jr., Norma, Lina (represented by daughter Pinky Rose), and Jacinto.

The loan being unpaid, the lot in dispute was foreclosed by the mortgagee bank and in the foreclosure sale held on December 27, 1963, the same was awarded to the mortgagee bank as the highest bidder.

On February 7, 1964, third-party defendant Amparo Gosiengfiao-Ibarra redeemed the property by paying the amount of P1,347.89 and the balance of P423.35 was paid on December 28, 1964 to the mortgagee bank.

On September 10, 1965, Antonia Gosiengfiao on her behalf and that of her minor children Emma, Lina, Norma together with Carlos and Severino executed a "Deed of Assignment of the Right of Redemption" in favor of Amparo G. Ibarra appearing in the notarial register of Pedro (Laggui) as Doc. No. 257, Page No. 6, Book No. 8, Series of 1965.

On August 15, 1966, Amparo Gosiengfiao sold the entire property to defendant Leonardo Mariano who subsequently established residence on the lot subject of this controversy. It appears in the Deed of Sale dated August 15, 1966 that Amparo, Antonia, Carlos and Severino were signatories thereto.

Sometime in 1982, plaintiff-appellant Grace Gosiengfiao learned of the sale of said property by the third-party defendants. She went to the Barangay Captain and asked for a confrontation with defendants Leonardo and Avelina Mariano to present her claim to said property.

On November 27, 1982, no settlement having been reached by the parties, the Barangay captain issued a certificate to file action.

On December 8, 1982, defendant Leonardo Mariano sold the same property to his children Lazaro F. Mariano and Dionicia M. Aquino as evidenced by a Deed of Sale notarized by Hilarion L. Aquino as Doc. No. 143, Page No. 19, Book No. V, Series of 1982.

On December 21, 1982, plaintiffs Grace Gosiengfiao, et al. filed a complaint for "recovery of possession and legal redemption with damages" against defendants Leonardo and Avelina Mariano. Plaintiffs alleged in their complaint that as co-heirs and co-owners of the lot in question, they have the right to recover their respective shares in the same, and property as they did not sell the same, and the right of redemption with regard to the shares of other co-owners sold to the defendants.

Defendants in their answer alleged that the plaintiffs has (sic) no cause of action against them as the money used to redeem lot in question was solely from the personal funds of third-party defendant Amparo Gosiengfiao-Ibarra, who consequently became the sole owner of the said property and thus validly sold the entire property to the defendants, and the fact that defendants had already sold the said property to the children, Lazaro Mariano and Dionicia M. Aquino. Defendants further contend that even granting that the plaintiffs are co-owners with the third-party defendants, their right of redemption had already been barred by the Statute of Limitations under Article 1144 of the Civil Code, if not by laches. 4

After trial on the merits, the Regional Trial Court of Cagayan, Branch I, rendered a decision dated September 16, 1986, dismissing the complaint and stating that respondents have no right of ownership or possession over the lot in question. The trial court further said that when the subject property foreclosed and sold at public auction, the rights of the heirs were reduced to a mere right of redemption. And when Amparo G. Ibarra redeemed the lot from the Rural Bank on her own behalf and with her own money she became the sole owner of the property. Respondents' having failed to redeem the property from the bank or from Amparo G. Ibarra, lost whatever rights the might have on the property. 5

The Court of Appeals in its questioned decision reversed and set aside the ruling of the trial court and declared herein respondents as co-owners of the property in the question. The Court of Appeals said:

The whole controversy in the case at bar revolves on the question of "whether or not a co-owner who redeems the whole property with her own personal funds becomes the sole owner of said property and terminates the existing state of co-ownership."

Admittedly, as the property in question was mortgaged by the decedent, a co-ownership existed among the heirs during the period given by law to redeem the foreclosed property. Redemption of the whole property by a co-owner does not vest in him sole ownership over said property but will inure to the benefit of all co-owners. In other words, it will not end to the existing state of co-ownership. Redemption is not a mode of terminating a co-ownership.

xxx xxx xxx

In the case at bar, it is undisputed and supported by records, that third-party defendant Amparo G. Ibarra redeemed the propety in dispute within the one year redemption period. Her redemption of the property, even granting that the money used was from her own personal funds did not make her the exclusive owner of the mortgaged property owned in common but inured to the benefit of all co-owners. It would have been otherwise if third-party defendant Amparo G. Ibarra purchased the said property from the mortgagee bank (highest, bidder in the foreclosure sale) after the redemption period had already expired and after the mortgagee bank had consolidated it title in which case there would no longer be any co-ownership to speak of . 6

The decision of the Court of Appeals is supported by a long line of case law which states that a redemption by a co-owner within the period prescribed by law inures to the benefit of all the other co-owners. 7

The main argument of petitioners in the case at bar is that the Court of Appeals incorrectly applied Article 1620 of the Civil Code, instead of Article 1088 of the same code which governs legal redemption by co-heirs since the lot in question, which forms part of the intestate estate of the late Francisco Gosiengfiao, was never the subject of partition or distribution among the heirs, thus, private respondents and third-party defendants had not ceased to be co-heirs.

On that premise, petitioners further contend that the right of legal redemption was not timely exercised by the private respondents, since Article 1088 prescribes that the same must be done within the period of one month from the time they were notified in writing of the sale by the vendor.

According to Tolentino, the fine distinction between Article 1088 and Article 1620 is that when the sale consists of an interest in some particular property or properties of the inheritance, the right redemption that arises in favor of the other co-heirs is that recognized in Article 1620. On the other hand, if the sale is the hereditary right itself, fully or in part, in the abstract sense, without specifying any particular object, the right recognized in Article 1088 exists. 8

Petitioners allege that upon the facts and circumstances of the present case, respondents failed to exercise their right of legal redemption during the period provided by law, citing as authority the case of Conejero, et al., v. Court of Appeals, et al.9 wherein the Court adopted the principle that the giving of a copy of a deed is equivalent to the notice as required by law in legal redemption.

We do not dispute the principle laid down in the Conejero case. However, the facts in the said case are not four square with the facts of the present case. In Conejero, redemptioner Enrique Conejero was shown and given a copy of the deed of sale of the subject property. The Court in that case stated that the furnishing of a copy of the deed was equivalent to the giving of a written notice required by law. 11

The records of the present petition, however, show no written notice of the sale being given whatsoever to private respondents. Although, petitioners allege that sometime on October 31, 1982 private respondent, Grace Gosiengfiao was given a copy of the questioned deed of sale and shown a copy of the document at the Office of the Barangay Captain sometime November 18, 1982, this was not supported by the evidence presented. On the contrary, respondent, Grace Gosiengfiao, in her testimony, declared as follows:

Q. When you went back to the residence of Atty. Pedro Laggui were you able to see him?

A. Yes, I did.

Q. When you saw him, what did you tell?

A. I asked him about the Deed of Sale which Mrs. Aquino had told me and he also showed me a Deed of Sale. I went over the Deed of Sale and I asked Atty. Laggui about this and he mentioned here about the names

of the legal heirs. I asked why my name is not included and I was never informed in writing because I would like to claim and he told me to better consult my own attorney.

Q. And did you go?

A. Yes, I did.

Q. What kind of copy or document is that?

A. It is a deed of sale signed by my mother, sister Amparo and my brothers.

Q. If shown to you the copy of the Deed of Sale will you be able to identify it?

A. Yes, sir. 11

Thereafter, Grace Gosiengfiao explicitly stated that she was never given a copy of the said Deed of Sale.

Q. Where did Don Mariano, Dr. Mariano and you see each other?

A. In the house of Brgy. Captain Antonio Bassig.

Q. What transpired in the house of the Brgy. Captain when you saw each other there?

A. Brgy. Captain Bassig informed my intention of claiming the lot and I also informed him about the Deed of Sale that was not signed by me since it is mine it is already sold and I was informed in writing about it. I am a legal heir and I have also the right to claim.

Q. And what was the reply of Don Mariano and Dr. Mariano to the information given to them by Brgy. Captain Bassig regarding your claim?

A. He insisted that the lot is already his because of the Deed of Sale. I asked for the exact copy so that I could show to him that I did not sign and he said he does not have a copy. 12

The above testimony was never refuted by Dr. Mariano who was present before Brgy. Captain Bassig.

The requirement of a written notice has long been settled as early as in the case of Castillo v. Samonte, 13 where this Court quoted the ruling in Hernaez v. Hernaez, 32 Phil., 214, thus:

Both the letter and spirit of the New Civil Code argue against any attempt to widen the scope of the notice specified in Article 1088 by including therein any other kind of notice, such as verbal or by registration. If the intention of the law had been to include

verbal notice or any other means of information as sufficient to give the effect of this notice, then there would have been no necessity or reasons to specify in Article 1088 of the New Civil Code that the said notice be made in writing for, under the old law, a verbal notice or information was sufficient. 14

Moreover, petitioners themselves adopted in their argument respondents' allegation In their complaint that sometime on October, 1982 they sought the redemption of the property from spouses Leonardo Mariano and Avelina Tigue, by tendering the repurchase money of P12,000.00, which the spouses rejected. 15 Consequently, private respondents exercised their right of redemption at the first opportunity they have by tendering the repurchase price to petitioners. The complaint they filed, before the Barangay Captain and then to the Regional Trial Court was necessary to assert their rights. As we learned in the case of Castillo, supra:

It would seem clear from the above that the reimbursement to the purchaser within the period of one month from the notice in writing is a requisite or condition precedent to the exercise of the right of legal redemption; the bringing of an action in court is the remedy to enforce that right in case the purchaser refuses the redemption. The first must be done within the month-period; the second within the prescriptive period provided in the Statute of Limitation. 16

The ruling in Castillo v. Samonte; supra, was reiterated in the case of Garcia v. Calaliman, where We also discussed the reason for the requirement of the written notice. We said:

Consistent with aforesaid ruling, in the interpretation of a related provision (Article 1623 of the New Civil Code) this Court had stressed that written notice is indispensable, actual knowledge of the sale acquired in some other manners by the redemptioner, notwithstanding. He or she is still entitled to written notice, as exacted by the code to remove all uncertainty as to the sale, its terms and its validity, and to quiet and doubt that the alienation is not definitive. The law not having provided for any alternative, the method of notifications remains exclusive, though the Code does not prescribe any particular form of written notice nor any distinctive method written notification of redemption (Conejero et al. v. Court of Appeals et al., 16 SCRA 775 [1966]; Etcuban v. Court of Appeals, 148 SCRA 507 [1987]; Cabrera v. Villanueva, G.R. No. 75069, April 15, 1988). 17 (Emphasis ours)

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

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

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

SO ORDERED.

G.R. No. 109910 April 5, 1995

REMEDIOS G. SALVADOR and GRACIA G. SALVADOR, petitioners, vs.COURT OF APPEALS, ALBERTO and ELPIA YABO, FRANCISCA YABO, et al., respondents.

DAVIDE, JR., J.:

Assailed in this petition is the legal determination made by the Court of Appeals on the issues of which portion of Lot No. 6080 and Lot No. 6180 formed part of the conjugal assets of the spouses Pastor Makibalo and Maria Yabo, and of whether or not the rights of Pastor's co-heirs in the estate of Maria Yabo were extinguished through prescription or laches.

Alipio Yabo was the owner of Lot No. 6080 and Lot No. 6180 situated in Barrio Bulua, Cagayan de Oro City, containing an area of 1,267 and 3,816 square meters, respectively. Title thereto devolved upon his nine children, namely, Victoriano, Procopio, Lope, Jose, Pelagia, Baseliza, Francisca, Maria, and Gaudencia, upon his death sometime before or during the second world war.

On 28 April 1976, Pastor Makibalo, who is the husband of Maria Yabo, one of Alipio's children, filed with the then Court of First Instance of Misamis Oriental a complaint, docketed as Civil Case No. 5000, against the spouses Alberto and Elpia Yabo for "Quieting of Title, Annulment of Documents, and Damages." In the complaint, he alleged that he owned a total of eight shares of the subject lots, having purchased the shares of seven of Alipio's children and inherited the share of his wife, Maria, and that except for the portion corresponding to Gaudencia's share which he did not buy, he occupied, cultivated, and possessed continuously, openly, peacefully, and exclusively the two parcels of land. He then prayed that he be declared the absolute owner of 8/9 of the lots in question. 1

On 8 October 1976, the grandchildren and great-grandchildren of the late Alipio Yabo 2 lodged with the same court a complaint for partition and quieting of title with damages, 3 docketed as Civil Case No. 5174, against Pastor Makibalo, Enecia Cristal, and the spouses Eulogio and Remedies Salvador. They alleged that Lot No. 6080 and Lot No. 6180 are the common property of the heirs of Alipio Yabo, namely, the plaintiffs, defendant Enecia Cristal, Maria Yabo and Jose Yabo, whose share had been sold to Alberto Yabo; that after Alipio's death, the spouses Pastor and Maria Makibalo, Enecia Cristal and Jose Yabo became the de facto administrators of the said properties; and that much to their surprise, they discovered that the Salvador spouses, who were strangers to the family, have been harvesting coconuts from the lots, which act as a cloud on the plaintiffs' title over the lots.

The plaintiffs then prayed that (a) they, as well as defendant Pastor Makibalo, in representation of his wife, and Enecia Cristal, in representation of Gaudencia, be declared as the owners of the lots; (b) the Salvador spouses be declared as having no rights thereto except as possible assignees of their co-defendants, Pastor Makibalo and Enecia Cristal; (c) the lots be partitioned according to law among the

aforementioned co-owners; and (d) the defendants be made to pay for the value of the fruits they harvested from the lots and for moral and exemplary damages, attorney's fees, expenses of the litigation, and costs of the suit.

The two cases were consolidated and jointly heard by Branch 5 of the Court of First Instance of Cagayan de Oro City.

By evidence, Pastor, Makibalo sought to prove the following allegations:

He was married to Maria Yabo who died on 17 March 1962. 4 In August 1949, Jose and Victoriano, both surnamed Yabo, sold their respective shares in the disputed lots to one Pedro Ebarat, and in 1952 the latter sold both shares to Pastor Makibalo. 5 Ebarat formalized this conveyance by executing an Affidavit of Waiver and Quitclaim dated 30 May 1969 in favor of Pastor. 6

On 16 January 1951, the heirs of the late Lope Yabo sold Lope's shares in the litigated properties to one Dominador Canomon, 7 who, in turn, sold the same to Pastor. 8 Canomon afterwards executed an Affidavit of Waiver and Quitclaim in favor of the latter. 9

Pastor Makibalo likewise purchased the shares of Baseliza in the two lots in 1942, of Procopio in 1957, of Francisca in 1958, and of Pelagia in 1967. The only share he did not buy was that of Gaudencia. After every purchase, he took possession of the portions bought and harvested the products thereof. 10

In 1966, Pastor sold back to Alberto a portion of Lot No. 6180 which was formerly the share of Alberto's father, Procopio. 11

In December 1968, Pastor mortgaged the two lots to the spouses Eulogio and Remedios Salvador. 12 On 26 September 1978, he executed a document denominated as a "Confirmation and Quitclaim" whereby he waived all his rights, interests, and participation in the lots in favor of the Salvador spouses. 13

On the other hand, by their evidence, l4 the spouses Alberto and Elpia Yabo tried to prove that they had repurchased from Pastor Makibalo the share of Procopio, which was previously sold to Pastor, and had bought the shares of Jose and Maria. 15

Filoteo Yabo denied having sold the share of his father, Lope Yabo, in the contested lots and disowned his signature and those of his mother, brothers, and sisters appearing at the back of Exhibit "C". 16

Ignacio Yabo testified that his father, Victoriano Yabo, did not know how to write and sign his name. He further declared that he had no knowledge that his father affixed his thumbmark in the document marked as Exhibit "A" purporting to alienate his father's share in the disputed lots. l7

On 15 January 1983, the trial court rendered its decision 18 holding as follows:

Assuming that the thumbmark on the typewritten name "Jose Yabo" in Exh. 3 was that of Jose Yabo, Alberto Yabo and Elpia R. Yabo purchased the share of Jose Yabo in bad faith because they knew before and up to the execution of Exh. 3 on October 24, 1972 that Jose Yabo was no longer the owner of that area because from the documents she borrowed from Mrs. Salvador they came to know that Jose Yabo had sold his shares to

Pedro Ebarat, and they have seen that Pastor Makibalo has been in possession of those shares together with the seven others exclusively as owner, he having mortgaged them to Mrs. Salvador.

As Jose Yabo was no longer the owner of the one-ninth (1/9) shares which he sold to Alberto Yabo and Elpia Yabo under Exh. 3, the sale is null and void, and Alberto and Elpia acquired nothing because Jose Yabo had no more title, right or interest to dispose of.

. . .

Pastor Makibalo had been in possession of Jose Yabo's share since 1949 after purchasing it from Ebarat, and has been in possession thereof up to September 26, 1978 when he sold it to the spouses Eulogio Salvador and Remedios Salvador, who are now in possession of the same.

Exh. A, evidencing the sale of Victoriano Yabo's share to Pedro Ebarat was identified by the latter who testified that he sold it to Pastor Makibalo in 1951. Exh. A is an ancient document — 1949 when the document came to existence up to now is more than 30 years, and the document had been in the possession of Pastor Makibalo, then Remedios Salvador who had interest in its preservation.

As regards the shares of Lope Yabo, the same had been sold by his surviving spouse Juana Legaspi, and his children Filoteo, Andresa, Jovita, Bonifacio, and Rundino for P105.00 on January 16, 1951 to Dominador Conomon (Exh. C and C-1), who in turn sold it to Pastor Makibalo in 1952, executing a formal Deed of Waiver and Quitclaim on May 30, 1969 (Exh. D).

Exh. C is an ancient document, being more than 30 years old and has been in the possession of Pastor Makibalo and then the spouses Eulogio and Remedios Salvador — who had an interest in its preservation. The claim of Filoteo Yabo that the signatures appearing in Exh. C are not his and those of his brothers and sisters are of no avail, for if they were not the ones who affixed those signatures and so they did not sell the shares of their father Lope Yabo, why did they not then take possession of said shares — they remained silent from 1951 to September 16, 1976 a period of 25 years. They are now [e]stopped by laches.

And as regards the shares of Baseliza, Francisca and Pelagia, there is no evidence presented to effectively rebut the testimony of Pastor Makibalo that he acquired the shares of Baseliza Yabo in 1942 by changing it with a buffalo; that he bought the shares of Francisca Yabo in 1958 and that he bought the shares of Pelagia Yabo in 1967; Pastor Makibalo had been in possession of these shares from the time he acquired them, continuously, adversely, openly, and peacefully, as owner up to the time he sold his rights and interest therein to the spouses Eulogio and Remedies Salvador. The heirs of Baseliza, Francisca and Pelagia have not taken any step to protect their rights over those shares for over 40 years in the case of Baseliza's share, for about 20 years in the case of

Francisca's share, and for more than 10 years in the case of Pelagia's share. Laches, likewise has rendered their rights stale.

On March 10, 1966 Pastor Makibalo sold back to Alberto Yabo the share of Procopio Yabo in Lot 6180 (Exh. 1 and 2), but there is nothing to show that. Pastor Makibalo also sold back Procopio's share in Lot 6080.

So then, by purchase, Pastor Makibalo and Maria Yabo acquired the shares of Baseliza, Victoriano, Jose, Lope, Procopio and Francisca, or six (6) shares from Lots 6080 and 6180. These belonged to the conjugal partnership of Pastor Makibalo and Maria Yabo. Maria Yabo had also a share from Lots 6080 and 6180, and Pastor Makibalo acquired the shares of Pelagia Yabo in both Lots 6080 and 6180. All in all; Pastor Makibalo acquired eight shares in both Lot 6080 and 6180.

While Maria Yabo died on March 17, 1962, and so one-fourth (1/4) of the shares of Baseliza, Victoriano, Jose, Lope, and Francisca, or one-fourth of five-ninth (5/9) of both lots and one-fourth (1/4) of Lot 6080 should go to the children of the brothers and sisters of Maria Yabo by virtue of the provisions of Article 1001 of the New Civil Code, the latter have lost their rights thereto by laches for their inaction for a very long period and their rights have become stale. On the other hand, Pastor Makibalo who had been in possession of the whole of the eight shares in both Lots 6080 and 6180, enjoying the fruits thereof exclusively, uninterruptedly, publicly, peacefully, and continuously from the death of Maria Yabo up to the filing of the complaint in Civil Case No. 5174 on October 8, 1976, or a period of 14 years, had acquired title to the whole of the eight shares in Lot 6080 and seven shares in Lot 6180 (the share of Procopio in Lot 6180 had been sold back to Alberto Yabo).

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered finding Pastor Makibalo, now Eulogio Salvador and Remedios Salvador the owner of eight (8) shares, equivalent to eight-ninth (8/9) of Lot No. 6080, and of seven (7) shares, equivalent to seven-ninth (7/9) of Lot No. 6180, and therefore, ordering the partition of Lot 6080 so that the one-ninth (1/9) alloted to Gaudencia Yabo will go to her heirs or their assigns, and the remaining eight-ninth (8/9) will go to the spouses Eulogio Salvador and Remedios Salvador, as successor of Pastor Makibalo, and the partition of Lot 6180 so that the seven-ninth (7/9) portion which formerly belonged to Baseliza, Victoriano, Jose, Lope, Maria, Francisca, and Pelagia will go to the spouses Eulogio and Remedios Salvador, the one-ninth (1/9) which formerly belonged to Procopio, will go to Alberto Yabo, and the remaining one-ninth (1/9) which formerly belonged to Gaudencia, will go to Gaudencia's heirs or their assigns.

Doc. No. 720, recorded on page 28 of Notarial Register No. VII, and acknowledged before Notary Public Isidro S. Baculio (Exh. E) [purportedly executed by Maria Yabo and Pastor Makibalo] is hereby declared null and void, and so the Office of the City Fiscal is directed to cause an investigation of this matter to find out the person or persons responsible for the falsification of the said document, and if the evidence warrants, to file the corresponding criminal action in court. The Office of the City Assessor of Cagayan de Oro City is, likewise, directed to cause the cancellation of Tax Declarations Nos.

33553, marked as Exh. H-3, 33557, marked as Exh. H-2, both in the name of Alberto Yabo, for having been issued on the basis of a falsified document. Let copies of this decision be furnished the Offices of the City Fiscal and City Assessor, both of Cagayan de Oro City.

No pronouncement as to damages, attorney's fees and costs.

SO ORDERED. 19

The defendants in Civil Case No. 5000 and the plaintiffs in Civil Case No. 5174 appealed from the decision to the Court of Appeals on 19 August 1983. 20

In its decision of 3 February 1993, 21 the Court of Appeals held that (a) Maria Yabo did not sell her share to Alberto and Elpia Yabo; (b) prescription and laches have not run against the private respondents with respect to the 1/9 share of Maria Yabo in the estate of her father and to her conjugal share in the portions acquired from her brothers and sisters; and (c) Procopio never sold his share in Lot No. 6080 to Pastor Makibalo. More specifically it stated:

Exh. E is the document found by the lower court to be a falsification. This finding appellants do not dispute and have not raised an error.

. . .

While acknowledging. that upon the death of Maria Yabo on March 17, 1962, one-half (1/2) of the share of Maria Yabo in Lots 6080 and 6180 and one-half (1/2) of Maria Yabo's conjugal share in the portions bought from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca should go to the children of the brothers and sisters of Maria in accordance with Article 1001 of the Civil Code, the lower court rule that said children have lost their rights by laches "for their inaction for a very long period and their rights have become stale" (Decision, p. 16; Record, Vol. 2, p. 158).

Appellants in their second assignment of error aver that this is an error.

We agree that the lower court erred.

While between March 17, 1962 when Maria Yabo died and October 8, 1976, when Civil Case No. 5174 for partition was filed, was a period of more than fourteen (14) years, that alone to our mind would not suffice to establish laches or prescription. Upon the death of Maria Yabo, appellee Pastor Makibalo and appellants and the other children of the brothers and sisters of Maria, by operation of law become co-owners of the one-ninth (1/9) share of Maria as heir of her father Alipio and the conjugal share of Maria in the portions acquired from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca. Time alone is not a decisive factor. Appellee Pastor Makibalo, it must be remembered, is the husband of Maria and, therefore, an uncle in-law of appellants. In our culture, a demand by an heir or heirs for partition immediately upon the death of a relative is more often taken not as a legitimate assertion of a right but of something else, like greed. It must also be noted that the spouses, the appellee Pastor Makibalo and his deceased wife

Maria, were childless and, therefore, appellants and the other children of the brothers and sisters of Maria must have felt that at any rate the property would go to them in the course of time. This probably explains why appellants started asserting their right over the property only after appellee Pastor Makibalo sold the same to the spouses Eulogio and Remedios Salvador. Besides, Lots 6080 and 6180 have a combined area only of 5,083 square meters and before the development of Northern Mindanao, and even in 1962 when Maria Yabo died, were not that valuable. This is shown by the fact that each heir sold his other share only for P110.00.

As we have said not time alone. In the early case of Cortes v. Oliva, 33 Phil. 480, it was held that"(o)rdinarily, possession by one joint owner will not be presumed to be adverse to the others, but will, as a rule, be held to be for the benefit of all. Much stronger evidence is required to show an adverse holding by one of several joint owners than by a stranger; and in such cases, to sustain a plea of prescription, it must always clearly appear that one who was originally a joint owner has repudiated the claims of his co-owners, and that his co-owners were apprised or should have been apprised of his claim of adverse and exclusive ownership before the alleged prescription began to run (at page 484). This ruling on prescription should apply with equal force to laches.

The third assignment of error challenges the finding of the lower court that "there is nothing to show that Pastor Makibalo also sold back Procopio's share in Lot 6080" (Decision, p. 16; Records, Vol. 2,p. 158).

Exhibits 1 and 2 cover only Procopio's share in Lot 6180. In other words, Exhibits 1 and. 2 conveyed back to Alberto Yabo only his father, Procopio's share in Lot 6180.

There is indeed no evidence that Pastor Makibalo also sold back to Alberto, his father Procopio's share in Lot 6080.

But from the evidence it appears that Procopio Yabo never sold his share in Lot 6080 to Pastor Makibalo. So there was no need to convey back Procopio's share in Lot 6080.

This fact is evident from the Affidavit of Confirmation of Sale (Exh. M) dated April 22, 1970, executed by Alberto Yabo, which is the very document relied upon by the lower court (Decision, p. 11; Record, Vol. 2, p. 153) in finding that "Alberto Yabo admitted that the share of his father Procopio Yabo was previously bought by Pastor Makibalo." A look at Exh. M, particularly par. 3 thereof, reveals that AlbertoYabo merely acknowledged or confirmed the sale of his father's share to Pastor Makibalo in Lot 6180. In effect, it at the same time proves that Lot 6080 was never sold by Procopio to appellee Pastor Makibalo; otherwise, it would have been included in the said Affidavit of Confirmation of Sale. The Deed of Absolute Sale (Exh. 2) subsequently executed by Pastor Makibalo in favor of Alberto Yabo on April 23, 1970, further proves this point, since the latter merely bought back what was previously sold, his father's share in Lot 6180. 22

The respondent court then concluded and held as follows:

In summary, appellee Pastor Makibalo and his assigns, the spouses Eulogio and Remedios Salvador, are entitled only to one-half (½) of the one-ninth (1/9) share of Maria and three-fourths (3/4) of the six-ninth (6/9) shares acquired from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca. Accordingly, the partition should be done as follows:

(1) 1/9 of Lots 6080 end 6180 should be given to the heirs of Gaudencia Yabo or their successors and assigns;

(2) 1/9 of Lot 6180 should go to Alberto Yabo and his wife Elpia Yabo;

(3) 1/9 of Lot 6080 should be given to the heirs of Procopio Yabo and their successors end assigns, including Alberto Yabo;

(4) The 1/9 share of Maria Yabo in Lots 6080 and 6180 should be partitioned: One-half (1/2) for the surviving spouse Pastor Makibalo (now the spouses Eulogio Salvador and Remedios Salvador) and the other half for the children of the brothers and sisters of Maria Yabo in equal shares.

(5) The remaining 6/9, one-half (1/2) of which is conjugal between Maria Yabo and appellee Pastor Makibalo should be partitioned three-fourths (3/4) for Pastor Makibalo (now the spouses Eulogio Salvador and Remedios Salvador) and one-fourth (1/4) for the children of the brothers and sisters of Maria Yabo in equal shares.

(6) Jose Yabo if he is still alive should participate in the partition as heir of Maria otherwise he shall be represented by his children.

WHEREFORE, premises considered, subject to the modification in the partition, as indicated above, the decision appealed from is AFFIRMED, without pronouncement as to costs. The lower court is directed if necessary to fully effect the partition, to conduct further hearings and determine whether Jose Yabo is still alive and who are the children of the brothers and sisters of Maria Yabo. 23

Unable to obtain a reconsideration of the said-decision, Remedios Salvador, together with her daughter, Ma. Gracia Salvador, as one of the successors-in-interest of Eulogio M. Salvador who died during the pendency of the appeal, 24 elevated the case to this Court contending that the respondent court erred in ruling that: (1) the shares of Pelagia Yabo should be included in the partition; (2) prescription and laches have not run against the private respondents in relation to the 1/9 share of Maria Yabo in the estate of her father and to her ½ conjugal share in those acquired by purchase; (3) Procopio Yabo never sold to Pastor Makibalo his share in Lot No. 6080; and(4) Jose Yabo should be allowed to participate as heir of Maria even as he had openly rejected this option by refusing to participate in both civil cases. 25

Article 160 of the Civil Code provides that all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains .exclusively to the husband or to the wife. Since the shares of Jose, Victoriano, Lope, Baseliza, Procopio, and Francisca in Lot No. 6180 and Lot No. 6080

had been purchased by Pastor during his marriage with Maria, and there is no proof that these were acquired with his exclusive money, the same are deemed conjugal properties. Not forming part of the conjugal partnership are: (1) the 1/9 share inherited by Maria which remained as her exclusive property pursuant to Article 146 (2) of the Civil Code; (2) the 1/9 share of Gaudencia which was not sold to Pastor; and (3) the 1/9 share of Pelagia which was acquired by Pastor in 1967 or five years after the death of his wife and which was therefore his exclusive property.

There is, thus; merit in the petitioners' first assigned error. The Court of .Appeals should have excluded from the conjugal partnership the share of Pelagia which Pastor had acquired after his wife's death.

Upon Maria's death in 1962, the conjugal partnership of gains was dissolved. 26 Half of the conjugal properties, together with Maria's l/9 hereditary share in the disputed lots, constituted Maria's estate and should thus go to her surviving heirs. 27 Under Article 1001 of the Civil Code, her heirs are her spouse, Pastor Makibalo, who shall be entitled to-one-half (1/2) of her estate, her brother, Jose, and the children of her other brothers and sisters, who shall inherit the other half. There having been no actual partition of the estate yet, the said heirs became co-owners thereof by operation of law. 28

We now determine whether prescription and laches can be applied against the co-heirs of Pastor Makibalo.

It has been said that Article 494 of the Civil Code which provides that each co-owner may demand at any time the partition of the common property implies that an action to demand partition is imprescriptible or cannot be barred by laches. 29 The imprescriptibility of the action cannot, however, be invoked when one of the co-owners has possessed the property as exclusive owner and for a period sufficient to acquire it by prescription. 30

What needs to be addressed first is whether or not Pastor Makibalo has acquired by prescription the shares of his other co-heirs or co-owners. Prescription as a mode of acquiring ownership requires a continuous, open, peaceful, public, and adverse possession for a period of time fixed by law.

This Court has held that the possession of a co-owner is like that of a trustee and shall not be regarded as adverse to the other co-owners but in fact as beneficial to all of them. 31 Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned. A mere silent possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection of buildings and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners. 32

Thus, in order that a co-owner's possession may be deemed adverse to the cestui que trust or the other co-owners, the following elements must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or the other co-owners; (2) that such positive acts of repudiation have been made known to the cestui que trust or the other co-owners; and (3) that the evidence thereon must be clear and convincing. 33

In Pangan vs. Court of Appeals, 34 this Court had occasion to lay down specific acts which are considered as acts of repudiation:

Filing by a trustee of an action in court against the trustor to quiet title to property, or for recovery of ownership thereof, held in possession by the former, may constitute an act of repudiation of the trust reposed on him by the latter.

The issuance of the certificate of title would constitute an open and clear repudiation of any trust, and the lapse of more than 20 years, open and adverse possession as owner would certainly suffice to vest title by prescription.

An action for the reconveyance of land based on implied or constructive trust prescribes within 10 years. And it is from the date of the issuance of such title that the effective assertion of adverse title for purposes of the statute of limitation is counted.

The prescriptive period may only be counted from the time petitioners repudiated the trust relation in 1955 upon the filing of the complaint for recovery of possession against private respondents so that the counterclaim of the private respondents contained in their amended answer wherein they asserted absolute ownership of the disputed realty by reason of the continuous and adverse possession of the same is well within the l0-year prescriptive period.

There is clear repudiation of a trust when one who is an apparent administrator of property causes the cancellation of the title thereto in the name of the apparent beneficiaries and gets a new certificate of title in his own name.

It is only when the defendants, alleged co-owners of the property in question, executed a deed of partition and on the strength thereof obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein they appear as the new owners of a definite area each, thereby in effect denying or repudiating the ownership of one of the plaintiffs over his alleged share in the entire lot, that the statute of limitations started to run for the purposes of the action instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights thereunder.

The records do not show that Pastor Makibalo adjudicated to himself the whole estate of his wife by means of an affidavit filed with the Office of the Register of Deeds as allowed under Section 1 Rule 74 of the Rules of Court, or that he caused the issuance of a certificate of title in his name or the cancellation of the tax declaration in Alipio's name and the issuance of a new one in his own name. The only act which may be deemed as a repudiation by Pastor of the co-ownership over the lots is his filing on 28 April 1976 of an action to quiet title (Civil Case No. 5000). The period of prescription started to run only from this repudiation. However, this was tolled when his co-heirs, the private respondents herein, instituted on 8 October 1976 an action for partition (Civil Case No. 5174) of the lots. Hence, the adverse possession by Pastor being for only about six months would not vest in him exclusive ownership of his wife's estate, and absent acquisitive prescription of ownership, laches and prescription of the action for partition will not lie in favor of Pastor. 35

The issue presented by the petitioners in their third assigned error involves a question of fact. This Court is not ordinarily a trier of facts, its jurisdiction being limited to errors of law. Thus; the findings of facts of the Court of Appeals are as a rule deemed conclusive. However, when the findings of facts of the

appellate court vary with those of the trial court, this Court has to review the evidence in order to arrive at the correct findings. 36

In the instant case, a conflict in the findings of facts of the lower courts exists. The trial court found that Pastor was the owner of Procopio's share in Lot No. 6080, as there was nothing to show that he sold it back to Alberto Yabo. The respondent court on the other hand, held that Procopio Yabo never sold his share in Lot No. 6080 to pastor, thus, there was no need to convey it back to Procopio's son, Alberto.

At this juncture, it is worthy to quote pertinent portions of the testimony of Pastor Makibalo:

COURT: (To the witness.)

Q Where is AlbertoYabo living?

A It is there in their house at Bulua.

ATTY. JARAULA: (Continuing.)

Q In whose land?

A Alipio Yabo's land.

Q What relation has that land to the two (2) parcels of land under litigation?

A I bought already.

Q So, will you please tell the Honorable Court, why Alberto Yabo is staying on that land when you said you have bought that land already.

A So, I sold back a portion to them because they requested me.

COURT: (To the witness.)

Q When was that when you said that Alberto Yabo requested a portion?

A In 1967.

COURT:

Q Did you give that portion which they requested?

A Their share being inherited from their father Procopio was the portion they requested.

COURT

Q Yes. Did you grant that?

A Yes.

Q That is the area you sold to Alberto Yabo, pursuant to his request?

A Because that was the land they inherited from their father that was what they requested.

Q All right. So that, the area now being occupied by Alberto Yabo?

A Yes. That land in the Centro.

Q This is now identified as Lot No. 6180?

A Yes, Your Honor.

ATTY. JARAULA: (Continuing.)

Q Where did you sign a document ceding that portion requested by Alberto Yabo?

A We did not make any receipt in favor of AlbertoYabo because they got only the receipt of that of his father.

COURT: (To the witness.)

Q You mean to say, that the receipt which Procopio signed when he sold his share for [sic] the document which Alberto got?

A Yes.

COURT:

All right.

ATTY. JARAULA (Continuing.)

Q Now, for how much did you buy. the shares of each of the brothers and sisters of your wife?

A One Hundred Ten (P110.00) Pesos.

Q When you sold back to Alberto Yabo, the portion corresponding to the share of his father Procopio in the Poblacion, how much did he pay you?

A The same.

Q By the same, you are referring by the same amount of One Hundred Ten (P110.00) Pesos?

A Yes, Sir. The same amount. 37

The petitioners contend that the sales or conveyances made by Alipio's heirs were for their consolidated shares in the two lots. If this was so, and the receipt which Procopio signed when he sold his consolidated share to Pastor was turned over to Alberto, the inevitable conclusion is that Alberto redeemed his father's share in both lots, not only in Lot: No. 6180. This conclusion is further buttressed by the above-quoted testimony of Pastor that he bought the shares (consolidated) of each of Alipio's heirs for P110.00 and that when he sold back to Alberto the former share of Procopio, Alberto paid him the same amount of P110.00.

However, since the share of Procopio in the two litigated parcels of land was purchased by Pastor during his marriage with Maria, the same became conjugal property, and half of it formed part of Maria's estate upon her death in 1962. Accordingly, Pastor's resale in favor of Alberto could only be valid with respect to Pastor's one-half (1/2) conjugal share and one-fourth (1/4) hereditary share as heir of Maria. 38 The remaining one-fourth (1/4) should go to Pastor's co-heirs, the private respondents herein.

Now on the fourth assigned error.

Section 1, Rule 69 of the Rules of Court requires that all persons interested in the land sought to be partitioned must be joined as defendants in the complaints. All co-owners and persons having an interest in the property are considered indispensable parties and an action for partition will not lie without the joinder of said persons. 39 It has been held that the absence of an indispensable party in a case renders ineffective all the proceedings subsequent to the filing of the complaint including the judgment. 40

It must be recalled that in Civil Case No. 5174 the private respondents sought the partition of the two lots based on the co-ownership which arose from the right of succession to Alipio's estate. Since Jose Yabo confirmed, through his thumbmark in the verification of the complaint, that he had already parted with his share in Alipio's estate, he in effect admitted that he had ceased to be a co-owner of the two lots which comprised his father's estate. Thus, his non-joinder as a party-plaintiff in the complaint would appear to be proper. He does not, as well, appear to be an indispensable party in Civil Case No. 5000.

As it turned out, however, the evidence and the issues which cropped up rendered imperative the determination of the conjugal assets of Pastor Makibalo and Maria Yabo and the partition of the latter's estate among her heirs. Her estate consists of one-half(½) of the conjugal properties, which should then be divided pursuant to Article 1001 of the Civil Code since the marriage produced no child; thus: one-half (½) to Pastor, and the other half to her brother Jose, and to her nephews and nieces.

Insofar as the partition of Maria Yabo's estate is concerned, Jose is an indispensable party. Strictly, the rule on indispensable parties may bar a partition of Maria's estate. Considering, however, that such estate or its partition are but incidents in Civil Case No. 5000 and Civil Case No. 5174, and the parties have not offered any objection to the propriety of the determination and partition of her estate, then in

the light of Section 11 of Rule 3 41 and Sections 1 and 5, Rule 10 42 of the Rules of Court, and following the rulings of this Court in the 1910 case of Alonso vs. Villamor 43 and the 1947 case of Cuyugan vs. Dizon, 44 an amendment of the complaint in Civil Case No. 5174 to implead Jose Yabo as party plaintiff would be in order.

In Alonso, it was held that under Section 110 of the Code of Civil Procedure — whose first paragraph is substantially the same as the aforesaid Section 1 of Rule 10 — and Section 503 thereof, this Court "has full power, apart from that power and authority which is inherent, to amend the process, pleadings, proceedings, and decision in this case by substituting, as party plaintiff, the real party in interest." Our ruling in Cuyugan states:

We, however, do not believe that the case should be dismissed for plaintiff's failure to join her husband. (Sec. 11, Rule 2, Rules of Court). Nor should the case be remanded to the court below and a new trial ordered on this account. The complaint may and should be amended here, to cure the defect of party plaintiffs, after final decision is rendered. Section 11, Rule 2, and Section 2, Rule 17, explicitly authorize such procedure. As this Court had occasion to say in Quison vs. Salud, (12 Phil., 109, 116), "a second action would be but a repetition of the first and would involve both parties, plaintiffs and defendant, in much additional expense and would cause much delay, in that way defeating the purpose of the section, which is expressly stated to be "that the actual merits of the controversy may speedily be determined without regard to technicalities and in the most expeditious and inexpensive manner." (See also Diaz vs. De la Rama, 73 Phil., 104)

To avoid further delay in the disposition of this case, we declare Civil Case No. 5174 as thus duly amended. Consequently, Jose Yabo may participate in the partition of the estate of Maria Yabo. The fourth assigned error must then be rejected.

In view of the foregoing disquisitions, the appealed judgment should be modified as follows: (a) the former 1/9 share of Pelagia Yabo in Lots No. 6180 and 6080 which she sold to Pastor should be treated as the latter's exclusive property which should now pertain to the petitioners, his successors-in-interest; and (b) the former 1/9 share of Procopio Yabo in both lots should be divided as follows: 3/4 (respondent Pastor's 1/2 conjugal share and 1/4 representing his share therein as Maria's heir) for the spouses Alberto and Elpia Yabo, and 1/4 (representing the share therein of Maria's collateral relatives as Maria's heirs) for the private respondents, including Alberto and Jose Yabo. The partition of the two lots in controversy should therefore be made in this wise:

(1) 1/9 share of Gaudencia Yabo should be allotted to her heirs or successors-in-interest;

(2) 1/9 share formerly belonging to Pelagia Yabo — to the petitioners as successors-in-interest of Pastor Makibalo;

(3) 1/9 hereditary share of Maria Yabo to be divided as follows:

(a) 1/2 for the petitioners (as successors-in-interest of Pastor Makibalo), and

(b) 1/2 for the private respondents, including Jose Yabo or his heirs;

(4) 1/9 share formerly belonging to Procopio Yabo to be divided thus:

(a) 3/4 for Spouses Alberto and Elpia Yabo, and

(b) 1/4 for the other private respondents, including Jose Yabo or his heirs;

(5) 5/9 shares which became the conjugal properties of Pastor Makibalo and Maria Yabo to be divided thus:

(a) 3/4 for the petitioners (as successors-in-interest of Pastor Makibalo), and

(b) ¼ for the private respondents, including Jose Yabo or his heirs.

In sum, Lots Nos. 6180 anid 6080 should be partitioned as follows:

1/9 or 4/36 — to Guadencia Yabo's heirs or successors-in-interest;

3/4 of 1/9 or 3/36 — to the spouses Alberto and Elpina Yabo;

8/36 — to the private respondents, including Jose Yabu or his heirs;

21/36 — to the petitioners as successors-in-interest of Pastor Makibalo.

WHEREFORE, the challenged decision of the Court of Appeals of 8 February 1993 in CA-G.R. CV No. 12839 is AFFIRMED, subject to the modifications indicated above. Upon the finality of this decision, let this case be forthwith remanded to the court a quo for further proceedings on the partition of Lots Nos. 6180 and 6080 in conformity with this decision.

No pronouncement as to costs.

SO ORDERED.

[G.R. No. 133638. April 15, 2005]

PERPETUA VDA. DE APE, petitioner, vs. THE HONORABLE COURT OF APPEALS and GENOROSA CAWIT VDA. DE LUMAYNO, respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

Before Us is a petition for review on certiorari of the Decision[1] of the Court of Appeals in CA-G.R. CV No. 45886 entitled, Generosa Cawit de Lumayno, accompanied by her husband Braulio Lumayno v. Fortunato Ape, including his wife Perpetua de Ape.

The pertinent facts are as follows:

Cleopas Ape was the registered owner of a parcel of land particularly known as Lot No. 2319 of the Escalante Cadastre of Negros Occidental and covered by Original Certificate of Title (OCT) No. RP 1379 (RP-154 [300]).[2] Upon Cleopas Apes death sometime in 1950, the property passed on to his wife, Maria Ondoy, and their eleven (11) children, namely: Fortunato, Cornelio, Bernalda, Bienvenido, Encarnacion, Loreta, Lourdes, Felicidad, Adela, Dominador, and Angelina, all surnamed Ape.

On 15 March 1973, Generosa Cawit de Lumayno (private respondent herein), joined by her husband, Braulio,[3] instituted a case for Specific Performance of a Deed of Sale with Damages against Fortunato and his wife Perpetua (petitioner herein) before the then Court of First Instance of Negros Occidental. It was alleged in the complaint that on 11 April 1971, private respondent and Fortunato entered into a contract of sale of land under which for a consideration of P5,000.00, Fortunato agreed to sell his share in Lot No. 2319 to private respondent. The agreement was contained in a receipt prepared by private respondents son-in-law, Andres Flores, at her behest. Said receipt was attached to the complaint as Annex A thereof and later marked as Exhibit G for private respondent. The receipt states:

April 11, 1971

TO WHOM IT MAY CONCERN:

This date received from Mrs. Generosa Cawit de Lumayno the sum of THIRTY PESOS ONLY as Advance Payment of my share in Land Purchased, for FIVE THOUSAND PESOS LOT #2319.

(Signed)

FORTUNATO APE

P30.00 WITNESS:(Illegible) [4]

As private respondent wanted to register the claimed sale transaction, she supposedly demanded that Fortunato execute the corresponding deed of sale and to receive the balance of the consideration. However, Fortunato unjustifiably refused to heed her demands. Private respondent, therefore, prayed that Fortunato be ordered to execute and deliver to her a sufficient and registrable deed of sale involving his one-eleventh (1/11) share or participation in Lot No. 2319 of the Escalante Cadastre; to pay P5,000.00 in damages; P500.00 reimbursement for litigation expenses as well as additional P500.00 for every appeal made; P2,000.00 for attorneys fees; and to pay the costs.[5]

Fortunato and petitioner denied the material allegations of the complaint and claimed that Fortunato never sold his share in Lot No. 2319 to private respondent and that his signature appearing on the purported receipt was forged. By way of counterclaim, the defendants below maintained having entered into a contract of lease with respondent involving Fortunatos portion of Lot No. 2319. This purported lease contract commenced in 1960 and was supposed to last until 1965 with an option for another five (5) years. The annual lease rental was P100.00 which private respondent and her husband allegedly paid on installment basis. Fortunato and petitioner also assailed private respondent and her

husbands continued possession of the rest of Lot No. 2319 alleging that in the event they had acquired the shares of Fortunatos co-owners by way of sale, he was invoking his right to redeem the same. Finally, Fortunato and petitioner prayed that the lease contract between them and respondent be ordered annulled; and that respondent be ordered to pay them attorneys fees; moral damages; and exemplary damages.[6]

In their reply,[7] the private respondent and her husband alleged that they had purchased from Fortunatos co-owners, as evidenced by various written instruments,[8] their respective portions of Lot No. 2319. By virtue of these sales, they insisted that Fortunato was no longer a co-owner of Lot No. 2319 thus, his right of redemption no longer existed.

Prior to the resolution of this case at the trial court level, Fortunato died and was substituted in this action by his children named Salodada, Clarita, Narciso, Romeo, Rodrigo, Marieta, Fortunato, Jr., and Salvador, all surnamed Ape.[9]

During the trial, private respondent testified that she and her husband acquired the various portions of Lot No. 2319 belonging to Fortunatos co-owners. Thereafter, her husband caused the annotation of an adverse claim on the certificate of title of Lot No. 2319. [10] The annotation states:

Entry No. 123539 Adverse claim filed by Braulio Lumayno. Notice of adverse claim filed by Braulio Lumayno affecting the lot described in this title to the extent of 77511.93 square meters, more or less, the aggregate area of shares sold to him on the basis of (alleged) sales in his possession. Doc. No. 157, Page No. 33, Book No. XI, Series of 1967 of Alexander Cawit of Escalante, Neg. Occ. Date of instrument. June 22, 1967 at 8:30 a.m. (SGD) FEDENCIORRAZ, Actg. Register of Deeds. [11]

In addition, private respondent claimed that after the acquisition of those shares, she and her husband had the whole Lot No. 2319 surveyed by a certain Oscar Mascada who came up with a technical description of said piece of land.[12] Significantly, private respondent alleged that Fortunato was present when the survey was conducted.[13]

Also presented as evidence for private respondent were pictures taken of some parts of Lot No. 2319 purportedly showing the land belonging to Fortunato being bounded by a row of banana plants thereby separating it from the rest of Lot No. 2319.[14]

As regards the circumstances surrounding the sale of Fortunatos portion of the land, private respondent testified that Fortunato went to her store at the time when their lease contract was about to expire. He allegedly demanded the rental payment for his land but as she was no longer interested in renewing their lease agreement, they agreed instead to enter into a contract of sale which Fortunato acceded to provided private respondent bought his portion of Lot No. 2319 for P5,000.00. Thereafter, she asked her son-in-law Flores to prepare the aforementioned receipt. Flores read the document to Fortunato and asked the latter whether he had any objection thereto. Fortunato then went on to affix his signature on the receipt.

For her part, petitioner insisted that the entire Lot No. 2319 had not yet been formally subdivided;[15] that on 11 April 1971 she and her husband went to private respondents house to collect past rentals for their land then leased by the former, however, they managed to collect only thirty pesos; [16] that private respondent made her (petitioners) husband sign a receipt acknowledging the receipt of said amount of money;[17] and that the contents of said receipt were never explained to them. [18] She also stated in her testimony that her husband was an illiterate and only learned how to write his name in order to be employed in a sugar central. [19] As for private respondents purchase of the shares owned by

Fortunatos co-owners, petitioner maintained that neither she nor her husband received any notice regarding those sales transactions.[20] The testimony of petitioner was later on corroborated by her daughter-in-law, Marietta Ape Dino.[21]

After due trial, the court a quo rendered a decision [22] dismissing both the complaint and the counterclaim. The trial court likewise ordered that deeds or documents representing the sales of the shares previously owned by Fortunatos co-owners be registered and annotated on the existing certificate of title of Lot No. 2319. According to the trial court, private respondent failed to prove that she had actually paid the purchase price of P5,000.00 to Fortunato and petitioner. Applying, therefore, the provision of Article 1350 of the Civil Code,[23] the trial court concluded that private respondent did not have the right to demand the delivery to her of the registrable deed of sale over Fortunatos portion of the Lot No. 2319.

The trial court also rejected Fortunato and petitioners claim that they had the right of redemption over the shares previously sold to private respondent and the latters husband, reasoning as follows:

Defendants in their counterclaim invoke their right of legal redemption under Article 1623 of the New Civil Code in view of the alleged sale of the undivided portions of the lot in question by their co-heirs and co-owners as claimed by the plaintiffs in their complaint. They have been informed by the plaintiff about said sales upon the filing of the complaint in the instant case as far back as March 14, 1973. Defendant themselves presented as their very own exhibits copies of the respective deeds of sale or conveyance by their said co-heirs and co-owners in favor of the plaintiffs or their predecessors-in-interest way back on January 2, 1992 when they formally offered their exhibits in the instant case; meaning, they themselves acquired possession of said documentary exhibits even before they formally offered them in evidence. Under Art. 1623 of the New Civil Code, defendants have only THIRTY (30) DAYS counted from their actual knowledge of the exact terms and conditions of the deeds of sale or conveyance of their co-heirs and co-owners share within which to exercise their right of legal redemption.[24]

Within the reglementary period, both parties filed their respective notices of appeal before the trial court with petitioner and her children taking exception to the finding of the trial court that the period within which they could invoke their right of redemption had already lapsed. [25] For her part, private respondent raised as errors the trial courts ruling that there was no contract of sale between herself and Fortunato and the dismissal of their complaint for specific performance.[26]

The Court of Appeals, in the decision now assailed before us, reversed and set aside the trial courts dismissal of the private respondents complaint but upheld the portion of the court a quos decision ordering the dismissal of petitioner and her childrens counterclaim. The dispositive portion of the appellate courts decision reads:

WHEREFORE, the decision dated March 11, 1994, is hereby REVERSED and SET ASIDE insofar as the dismissal of plaintiffs-appellants complaint is concerned, and another one is entered ordering the defendant-appellant Fortunato Ape and/or his wife Perpetua de Ape and successors-in-interest to execute in favor of plaintiff-appellant Generosa Cawit de Lumayno a Deed of Absolute Sale involving the one-eleventh (1/11) share or participation of Fortunato Ape in Lot No. 2319, Escalante Cadastre, containing an area of 12,527.19 square meters, more or less, within (30) days from finality of this decision, and in case of non-compliance with this Order, that the Clerk of Court of said court is ordered to execute the deed on behalf of the vendor. The decision is AFFIRMED insofar as the dismissal of defendants-appellants counterclaim is concerned.

Without pronouncement as to costs.[27]

The Court of Appeals upheld private respondents position that Exhibit G had all the earmarks of a valid contract of sale, thus:

Exhibit G is the best proof that the P5,000.00 representing the purchase price of the 1/11 th share of Fortunato Ape was not paid by the vendee on April 11, 1971, and/or up to the present, but that does not affect the binding force and effect of the document. The vendee having paid the vendor an advance payment of the agreed purchase price of the property, what the vendor can exact from the vendee is full payment upon his execution of the final deed of sale. As is shown, the vendee precisely instituted this action to compel the vendor Fortunato Ape to execute the final document, after she was informed that he would execute the same upon arrival of his daughter Bala from Mindanao, but afterwards failed to live up to his contractual obligation (TSN, pp. 11-13, June 10, 1992).

It is not right for the trial court to expect plaintiff-appellant to pay the balance of the purchase price before the final deed is executed, or for her to deposit the equivalent amount in court in the form of consignation. Consignation comes into fore in the case of a creditor to whom tender of payment has been made and refuses without just cause to accept it (Arts. 1256 and 1252, N.C.C.; Querino vs. Pelarca, 29 SCRA 1). As vendee, plaintiff-appellant Generosa Cawit de Lumayno does not fall within the purview of a debtor.

We, therefore, find and so hold that the trial court should have found that exhibit G bears all the earmarks of a private deed of sale which is valid, binding and enforceable between the parties, and that as a consequence of the failure and refusal on the part of the vendor Fortunato Ape to live up to his contractual obligation, he and/or his heirs and successors-in-interest can be compelled to execute in favor of, and to deliver to the vendee, plaintiff-appellant Generosa Cawit de Lumayno a registerable deed of absolute sale involving his one-eleventh (1/11th) share or participation in Lot No. 2319, Escalante Cadastre, containing an area of 12,527.19 square meters, more or less, within 30 days from finality of this decision, and, in case of non-compliance within said period, this Court appoints the Clerk of Court of the trial court to execute on behalf of the vendor the said document. [28]

The Court of Appeals, however, affirmed the trial courts ruling on the issue of petitioner and her childrens right of redemption. It ruled that Fortunatos receipt of the Second Owners Duplicate of OCT (RP) 1379 (RP-154 ([300]), containing the adverse claim of private respondent and her husband, constituted a sufficient compliance with the written notice requirement of Article 1623 of the Civil Code and the period of redemption under this provision had long lapsed.

Aggrieved by the decision of the appellate court, petitioner is now before us raising, essentially, the following issues: whether Fortunato was furnished with a written notice of sale of the shares of his co-owners as required by Article 1623 of the Civil Code; and whether the receipt signed by Fortunato proves the existence of a contract of sale between him and private respondent.

In her memorandum, petitioner claimed that the Court of Appeals erred in sustaining the court a quos pronouncement that she could no longer redeem the portion of Lot No. 2319 already acquired by private respondent for no written notice of said sales was furnished them. According to her, the Court of Appeals unduly expanded the scope of the law by equating Fortunatos receipt of Second Owners Duplicate of OCT (RP) 1379 (RP-154 ([300]) with the written notice requirement of Article 1623. In addition, she argued that Exhibit G could not possibly be a contract of sale of Fortunatos share in Lot No.

2319 as said document does not contain (a) definite agreement on the manner of payment of the price.[29] Even assuming that Exhibit G is, indeed, a contract of sale between private respondent and Fortunato, the latter did not have the obligation to deliver to private respondent a registrable deed of sale in view of private respondents own failure to pay the full purchase price of Fortunatos portion of Lot No. 2319. Petitioner is also of the view that, at most, Exhibit G merely contained a unilateral promise to sell which private respondent could not enforce in the absence of a consideration distinct from the purchase price of the land. Further, petitioner reiterated her claim that due to the illiteracy of her husband, it was incumbent upon private respondent to show that the contents of Exhibit G were fully explained to him. Finally, petitioner pointed out that the Court of Appeals erred when it took into consideration the same exhibit despite the fact that only its photocopy was presented before the court.

On the other hand, private respondent argued that the annotation on the second owners certificate over Lot No. 2319 constituted constructive notice to the whole world of private respondents claim over the majority of said parcel of land. Relying on our decision in the case of Cabrera v. Villanueva,[30] private respondent insisted that when Fortunato received a copy of the second owners certificate, he became fully aware of the contracts of sale entered into between his co-owners on one hand and private respondent and her deceased husband on the other.

Private respondent also averred that although (Lot No. 2319) was not actually partitioned in a survey after the death of Cleopas Ape, the land was partitioned in a hantal-hantal manner by the heirs. Each took and possessed specific portion or premises as his/her share in land, farmed their respective portion or premises, and improved them, each heir limiting his/her improvement within the portion or premises which were his/her respective share.[31] Thus, when private respondent and her husband purchased the other parts of Lot No. 2319, it was no longer undivided as petitioner claims.

The petition is partly meritorious.

Article 1623 of the Civil Code provides:

The right of legal pre-emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners.

Despite the plain language of the law, this Court has, over the years, been tasked to interpret the written notice requirement of the above-quoted provision. In the case Butte v. Manuel Uy & Sons, Inc.,[32] we declared that

In considering whether or not the offer to redeem was timely, we think that the notice given by the vendee (buyer) should not be taken into account. The text of Article 1623 clearly and expressly prescribes that the thirty days for making the redemption are to be counted from notice in writing by the vendor. Under the old law (Civ. Code of 1889, Art. 1524), it was immaterial who gave the notice; so long as the redeeming co-owner learned of the alienation in favor of the stranger, the redemption period began to run. It is thus apparent that the Philippine legislature in Article 1623 deliberately selected a particular method of giving notice, and that method must be deemed exclusive. (39 Am. Jur., 237; Payne vs. State, 12 S.W. 2(d) 528). As ruled in Wampler vs. Lecompte, 150 Atl. 458 (affd. in 75 Law Ed. [U.S.] 275)

why these provisions were inserted in the statute we are not informed, but we may assume until the contrary is shown, that a state of facts in respect thereto existed, which warranted the legislature in so legislating.

The reasons for requiring that the notice should be given by the seller, and not by the buyer, are easily divined. The seller of an undivided interest is in the best position to know who are his co-owners that under the law must be notified of the sale. Also, the notice by the seller removes all doubts as to fact of the sale, its perfection; and its validity, the notice being a reaffirmation thereof, so that the party notified need not entertain doubt that the seller may still contest the alienation. This assurance would not exist if the notice should be given by the buyer.[33]

The interpretation was somehow modified in the case of De Conejero, et al. v. Court of Appeals, et al.[34] wherein it was pointed out that Article 1623 does not prescribe a particular form of notice, nor any distinctive method for notifying the redemptioner thus, as long as the redemptioner was notified in writing of the sale and the particulars thereof, the redemption period starts to run. This view was reiterated in Etcuban v. The Honorable Court of Appeals, et al.,[35] Cabrera v. Villanueva,[36] Garcia, et al. v. Calaliman, et al.,[37] Distrito, et al. v. The Honorable Court of Appeals, et al., [38] and Mariano, et al. v. Hon. Court of Appeals, et al.[39]

However, in the case of Salatandol v. Retes,[40] wherein the plaintiffs were not furnished any written notice of sale or a copy thereof by the vendor, this Court again referred to the principle enunciated in the case of Butte. As observed by Justice Vicente Mendoza, such reversion is only sound, thus:

Art. 1623 of the Civil Code is clear in requiring that the written notification should come from the vendor or prospective vendor, not from any other person. There is, therefore, no room for construction. Indeed, the principal difference between Art. 1524 of the former Civil Code and Art. 1623 of the present one is that the former did not specify who must give the notice, whereas the present one expressly says the notice must be given by the vendor. Effect must be given to this change in statutory language. [41]

In this case, the records are bereft of any indication that Fortunato was given any written notice of prospective or consummated sale of the portions of Lot No. 2319 by the vendors or would-be vendors. The thirty (30)-day redemption period under the law, therefore, has not commenced to run.

Despite this, however, we still rule that petitioner could no longer invoke her right to redeem from private respondent for the exercise of this right presupposes the existence of a co-ownership at the time the conveyance is made by a co-owner and when it is demanded by the other co-owner or co-owners.[42] The regime of co-ownership exists when ownership of an undivided thing or right belongs to different persons.[43] By the nature of a co-ownership, a co-owner cannot point to specific portion of the property owned in common as his own because his share therein remains intangible. [44] As legal redemption is intended to minimize co-ownership,[45] once the property is subdivided and distributed among the co-owners, the community ceases to exist and there is no more reason to sustain any right of legal redemption.[46]

In this case, records reveal that although Lot No. 2319 has not yet been formally subdivided, still, the particular portions belonging to the heirs of Cleopas Ape had already been ascertained and they in fact took possession of their respective parts. This can be deduced from the testimony of petitioner herself, thus:

Q When the plaintiffs leased the share of your husband, were there any metes and bounds?

A It was not formally subdivided. We have only a definite portion. (hantal-hantal)

Q This hantal-hantal of your husband, was it also separate and distinct from the hantal-hantal or the share of the brothers and sisters of your husband?

A Well, this property in question is a common property.

Q To the north, whose share was that which is adjacent to your husbands assumed partition?

A I do not know what [does] this north [mean].

COURT

(To Witness)

Q To the place from where the sun rises, whose share was that?

A The shares of Cornelia, Loreta, Encarnacion and Adela.

Q How could you determine their own shares?

A They were residing in their respective assumed portions.

Q How about determining their respective boundaries?

A It could be determined by stakes and partly a row of banana plantations planted by my son-in-law.

Q Who is this son-in-law you mentioned?

A Narciso Ape.

ATTY. CAWIT

(Continuing)

Q You said that there were stakes to determine the hantal-hantal of your husband and the hantal-hantal of the other heirs, did I get you right?

ATTY. TAN

Admitted, Your Honor.

ATTY. CAWIT

Q Mrs. Ape, in 1960, Cleopas Ape was already dead, is that correct?

A Certainly, since he died in 1950.

Q By the manifestation of your counsel that the entire land (13 hectares) of your father-in-law, Cleopas Ape, was leased to Generosa Lumayno, is this correct?

A No, it is only the assumed portion of my husband [which] was leased to Generosa Lumayno.

Q For clarification, it was only the share of your husband [which] was leased to Generosa Cawit Lumayno?

A Yes.[47]

ATTY. CAWIT

Q My question: is that portion which you said was leased by your husband to the Lumayno[s] and which was included to the lease by your mother-in-law to the Lumayno[s], when the Lumayno[s] returned your husband[s] share, was that the same premises that your husband leased to the Lumayno[s]?

A The same.

Q In re-possessing this portion of the land corresponding to the share of your husband, did your husband demand that they should re-possess the land from the Lumayno[s] or did the Lumayno[s] return them to your husband voluntarily?

A They just returned to us without paying the rentals.

COURT

Q Was the return the result of your husbands request or just voluntarily they returned it to your husband?

A No, sir, it was just returned voluntarily, and they abandoned the area but my husband continued farming.[48]

Similarly telling of the partition is the stipulation of the parties during the pre-trial wherein it was admitted that Lot No. 2319 had not been subdivided nevertheless, Fortunato Ape had possessed a specific portion of the land ostensibly corresponding to his share. [49]

From the foregoing, it is evident that the partition of Lot No. 2319 had already been effected by the heirs of Cleopas Ape. Although the partition might have been informal is of no moment for even an oral agreement of partition is valid and binding upon the parties.[50] Likewise, the fact that the respective shares of Cleopas Apes heirs are still embraced in one and the same certificate of title and have not been technically apportioned does not make said portions less determinable and identifiable from one another nor does it, in any way, diminish the dominion of their respective owners. [51]

Turning now to the second issue of the existence of a contract of sale, we rule that the records of this case betray the stance of private respondent that Fortunato Ape entered into such an agreement with her.

A contract of sale is a consensual contract, thus, it is perfected by mere consent of the parties. It is born from the moment there is a meeting of minds upon the thing which is the object of the sale and upon the price.[52] Upon its perfection, the parties may reciprocally demand performance, that is, the vendee may compel the transfer of the ownership and to deliver the object of the sale while the vendor may demand the vendee to pay the thing sold. [53] For there to be a perfected contract of sale, however, the following elements must be present: consent, object, and price in money or its equivalent. In the case of Leonardo v. Court of Appeals, et al.,[54] we explained the element of consent, to wit:

The essence of consent is the agreement of the parties on the terms of the contract, the acceptance by one of the offer made by the other. It is the concurrence of the minds of the parties on the object and the cause which constitutes the contract. The area of agreement must extend to all points that the parties deem material or there is no consent at all.

To be valid, consent must meet the following requisites: (a) it should be intelligent, or with an exact notion of the matter to which it refers; (b) it should be free and (c) it should be spontaneous. Intelligence in consent is vitiated by error; freedom by violence, intimidation or undue influence; spontaneity by fraud.[55]

In this jurisdiction, the general rule is that he who alleges fraud or mistake in a transaction must substantiate his allegation as the presumption is that a person takes ordinary care for his concerns and that private dealings have been entered into fairly and regularly. [56] The exception to this rule is provided for under Article 1332 of the Civil Code which provides that [w]hen one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.

In this case, as private respondent is the one seeking to enforce the claimed contract of sale, she bears the burden of proving that the terms of the agreement were fully explained to Fortunato Ape who was an illiterate. This she failed to do. While she claimed in her testimony that the contents of the receipt were made clear to Fortunato, such allegation was debunked by Andres Flores himself when the latter took the witness stand. According to Flores:

ATTY. TAN

Q Mr. Witness, that receipt is in English, is it not?

A Yes, sir.

Q When you prepared that receipt, were you aware that Fortunato Ape doesnt know how to read and write English?

A Yes, sir, I know.

Q Mr. Witness, you said you were present at the time of the signing of that alleged receipt of P30.00, correct?

A Yes, sir.

Q Where, in what place was this receipt signed?

A At the store.

Q At the time of the signing of this receipt, were there other person[s] present aside from you, your mother-in-law and Fortunato Ape?

A In the store, yes, sir.

Q When you signed that document of course you acted as witness upon request of your mother-in-law?

A No, this portion, I was the one who prepared that document.

Q Without asking of (sic) your mother-in-law, you prepared that document or it was your mother-in-law who requested you to prepare that document and acted as witness?

A She requested me to prepare but does not instructed (sic) me to act as witness. It was our opinion that whenever I prepared the document, I signed it as a witness.

Q Did it not occur to you to ask other witness to act on the side of Fortunato Ape who did not know how to read and write English?

A It occurred to me.

Q But you did not bother to request a person who is not related to your mother-in-law, considering that Fortunato Ape did not know how to read and write English?

A The one who represented Fortunato Ape doesnt know also how to read and write English. One a maid.

Q You mentioned that there [was another] person inside the store, under your previous statement, when the document was signed, there [was another] person in the store aside from you, your mother-in-law and Fortunato Ape, is not true?

A That is true, there is one person, but that person doesnt know how to read also.

Q Of course, Mr. Witness, since it occurred to you that there was need for other witness to sign that document for Fortunato Ape, is it not a fact that the Municipal Building is very near your house?

A Quite (near).

Q But you could readily proceed to the Municipal Building and request one who is knowledgeable in English to act as witness?

A I think there is no need for that small receipt. So I dont bother myself to go.

Q You did not consider that receipt very important because you said that small receipt?

A Yes, I know.[57]

As can be gleaned from Floress testimony, while he was very much aware of Fortunatos inability to read and write in the English language, he did not bother to fully explain to the latter the substance of the receipt (Exhibit G). He even dismissed the idea of asking somebody else to assist Fortunato considering that a measly sum of thirty pesos was involved. Evidently, it did not occur to Flores that the document he himself prepared pertains to the transfer altogether of Fortunatos property to his mother-in-law. It is precisely in situations such as this when the wisdom of Article 1332 of the Civil Code readily becomes apparent which is to protect a party to a contract disadvantaged by illiteracy, ignorance, mental weakness or some other handicap.[58]

In sum, we hold that petitioner is no longer entitled to the right of redemption under Article 1632 of the Civil Code as Lot No. 2319 had long been partitioned among its co-owners. This Court likewise annuls the contract of sale between Fortunato and private respondent on the ground of vitiated consent.

WHEREFORE, premises considered, the decision dated 25 March 1998 of the Court of Appeals is hereby REVERSED and SET ASIDE and the decision dated 11 March 1994 of the Regional Trial Court, Branch 58, San Carlos City, Negros Occidental, dismissing both the complaint and the counterclaim, is hereby REINSTATED. No costs.

SO ORDERED.

LEONARDO ACABAL and RAMON NICOLAS, petitioners,   vs. VILLANER ACABAL, EDUARDO ACABAL, SOLOMON ACABAL, GRACE ACABAL, MELBA ACABAL, EVELYN ACABAL, ARMIN ACABAL, RAMIL ACABAL, and BYRON ACABAL, respondents.

D E C I S I O N

CARPIO MORALES, J.:

Before this Court is a Petition for Review on Certiorari of the February 15, 2001 Decision[1] of the Court of Appeals reversing that of the Regional Trial Court (RTC) of Dumaguete City, Branch 35. [2]

In dispute is the exact nature of the document[3] which respondent Villaner Acabal (Villaner) executed in favor of his godson-nephew-petitioner Leonardo Acabal (Leonardo) on April 19, 1990.

Villaners parents, Alejandro Acabal and Felicidad Balasabas, owned a parcel of land situated in Barrio Tanglad, Manjuyod, Negros Oriental, containing an area of 18.15 hectares more or less, described in Tax Declaration No. 15856.[4] By a Deed of Absolute Sale dated July 6, 1971, [5] his parents transferred for P2,000.00 ownership of the said land to him, who was then married to Justiniana Lipajan. [6]

Sometime after the foregoing transfer, it appears that Villaner became a widower.

Subsequently, he executed on April 19, 1990 a deed[7] conveying the same property[8] in favor of Leonardo.

Villaner was later to claim that while the April 19, 1990 document he executed now appears to be a Deed of Absolute Sale purportedly witnessed by a Bais City trial court clerk Carmelo Cadalin and his wife Lacorte, what he signed was a document captioned Lease Contract[9] (modeled after a July 1976 lease agreement[10] he had previously executed with previous lessee, Maria Luisa Montenegro [11]) wherein he leased for 3 years the property to Leonardo at P1,000.00 per hectare[12] and which was witnessed by two women employees of one Judge Villegas of Bais City.

Villaner thus filed on October 11, 1993 a complaint [13] before the Dumaguete RTC against Leonardo and Ramon Nicolas to whom Leonardo in turn conveyed the property, for annulment of the deeds of sale.

At the witness stand, Villaner declared:

Q: It appears, Mr. Acabal, that you have signed a document of sale with the defendant Leonardo Acabal on April 19, 1990, please tell the court whether you have really agreed to sell this property to the defendant on or before April 19, 1990?

A: We had some agreement but not about the selling of this property.

Q: What was your agreement with the defendant Leonardo Acabal?

A: Our agreement [was] that he will just rent.[14]

x x x

Q: Now, please tell the court how were you able to sign this document on April 19, 1990?

A: I do not know why I signed that, that is why I am puzzled.

Q: Why, did you not read the contents of this document?

A: I have not read that. I only happened to read the title of the Lease Contract.

Q: And do you recall who were the witnesses of the document which you signed in favor of Leonardo Acabal?

A: Employees of Judge Villegas of Bais City.

Q: Did you see them sign that document?

A: Yes, sir.

Q: These signatures appearing in this document marked as Exhibit C for the plaintiff and Exhibit 1 for the defendant, please examine over (sic) these signatures if these were the signatures of these witnesses who signed this document?

A: These are not the signatures of the two women.

Q: And after signing this document on April 19, 1990, did you appear before a notary public to have this notarized?

A: No, I went home to San Carlos.[15]

x x x

Q: According to this document, you sell (sic) this property at P10,000.00, did you sell this property to Leonardo Acabal?

A: No, sir.

Q: How about after April 19, 1990, did you receive this amount from Leonardo Acabal?

A: No, sir.[16]

x x x

Q: Now you said that on May 25, 1990, Leonardo Acabal did not pay the amount that he promised to you, what did you do of (sic) his refusal to pay that amount?

A: I went to Mr. [Carmelo] Mellie Cadalin because he was the one who prepared the papers and to ask Leonardo Acabal why he will not comply with our agreement.

Q: By the way, who is this Mellie Cadalin?

A: Mellie Cadalin is also working in the sala of Judge Villegas.

Q: Who requested Mellie Cadalin to prepare this document?

A: Maybe it was Leonardo Acabal.

Q: By the way, when for the first time did you talk to Leonardo Acabal regarding your agreement to lease this property to him?

A: March 14, 1990, in San Carlos.

Q: And what document did you give to him in order that that document will be prepared?

A: I have given (sic) some papers and contract of lease that I have signed to (sic) Mrs. Montenegro.[17] (Emphasis and underscoring supplied)

x x x

Q: Now, Carmelo Cadalin [Mellie] also testified before this court that in fact he identified the document marked as Exhibit C for the plaintiff that what you executed on April 19, 1990 was a deed of sale and not a contract of lease, what can you say to that statement?

A: That is a lie.

Q: And whats the truth then?

A: What really (sic) I have signed was the document of lease contract.

Q: Now, can you explain to the Honorable Court why it so happened that on April 19, you were able to sign a deed of sale?

A: What I can see now is that perhaps those copies of the deed of sale were placed by Mr. Cadalin under the documents which I signed the lease contract. But why is it that it has already a deed of sale when what I have signed was only the lease of contract or the contract of lease.

Q: Now, Mr. Cadalin also stated before this court that he handed over to you this Deed of Sale marked as Exhibit C and according to him you read this document, what can you say to this statement?

A: Yes, there was a document that he gave me to read it (sic)but it was a contract of lease.

Q: How sure are you that what you signed on April 19, 1990 was really a contract of lease and not a contract of sale?

A: Because when I signed the contract of lease the witnesses that witnessed my signing the document were the employees of Judge Villegas and then I am now surprised why in the deed of sale which I purportedly signed are witnessed by Carmelo Cadalin and his wife Lacorte.[18] (Emphasis and underscoring supplied)

On the other hand, Leonardo asserts that what Villaner executed was a Deed of Absolute Sale for a consideration of P10,000.00 which he had already paid,[19] and as he had become the absolute owner of the property, he validly transferred it to Ramon Nicolas on May 19, 1990. [20]

Carmelo Cadalin who admittedly prepared the deed of absolute sale and who appears as a witness, along with his wife, to the execution of the document corroborated Leonardos claim:

Q: Mr. Cadalin, do you know the plaintiff Villaner Acabal?

A: Yes, I know.[21]

x x x

Q: And I would like to ask you Mr. witness why do you know Villaner Acabal?

A: At the time that he went to our house together with Leonardo Acabal he requested me to prepare a deed of sale as regards to a sale of the property. [22]

x x x

Q: And after they requested you to prepare a document of sale, what did you do?

A: At first I refused to [do] it because I have so many works to do, but then they insisted so I prepared the deed.

Q: After you prepared the document, what did you do?

A: After I prepared it I gave it to him so that he could read the same.

Q: When you say him, whom do you refer to?

A: Villaner Acabal.

Q: And did Villaner Acabal read the document you prepared?

A: Yes, he read it.

Q: And after reading it what did Villaner Acabal do?

A: He signed the document.

Q: Showing to you a document which is marked Exhibit C for the plaintiff and Exhibit 1 for the defendants, please tell the Honorable Court what relation this document has to the document which you described earlier?

COURT INTERPRETER:

Witness is confronted with the said document earlier marked as Exhibit C for the prosecution and Exhibit 1 for the defense.

A: Yes, this is the one. [23]

x x x

Q: Also stated in the document is the phrase Signed in the presence of and there is a number and then two signatures, could you please examine the document and say whether these signatures are familiar to you?

A: Yes, number one is my signature and number 2 is the signature of my wife as witness. [24]

x x x

Q: After Villaner Acabal signed the document, what did Villaner Acabal do?

A: He was given the payment by Leonardo Acabal.[25]

x x x

Q: Aside from the document, deed of absolute sale, that you mentioned earlier that you prepared for Villaner Acabal and Leonardo Acabal, what other documents, if any, did you prepare for them?

A: Affidavit of non-tenancy and aggregate area.[26] (Emphasis and underscoring supplied)

The complaint was later amended[27] to implead Villaners eight children as party plaintiffs, they being heirs of his deceased wife.

By Decision of August 8, 1996, the trial court found for the therein defendants-herein petitioners Leonardo and Ramon Nicolas and accordingly dismissed the complaint.

Villaner et al. thereupon brought the case on appeal to the Court of Appeals which reversed the trial court, it holding that the Deed of Absolute Sale executed by Villaner in favor of Leonardo was simulated and fictitious.[28]

Hence, Leonardo and Ramon Nicolas present petition for review on certiorari,[29] anchored on the following assignments of error:

I.

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT RESPONDENT VILLANER ACABAL WAS DECEIVED INTO SIGNING THE DEED OF ABSOLUTE SALE WHEN THE LATTER KNOWINGLY, FREELY AND VOLUNTARILY EXECUTED THE SAME IN FAVOR OF PETITIONER LEONARDO ACABAL.

II.

THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE CONSIDERATION OF THE DEED OF ABSOLUTE SALE IN THE AMOUNT OF TEN THOUSAND PESOS (P10,0000.00) WAS UNUSUALLY LOW AND INADEQUATE, ESPECIALLY TAKING INTO ACCOUNT THE LOCATION OF THE SUBJECT PROPERTY.

III.

THE COURT OF APPEALS ERRED WHEN IT FAILED TO CONSIDER WHY RESPONDENT VILLANER ACABAL ONLY QUESTIONED THE POSSESSION AND OWNERSHIP OF PETITIONER RAMON NICOLAS IN COURT AFTER THE LATTER WAS IN OPEN, CONTINUOUS AND PEACEFUL POSSESSION OF THE SUBJECT PROPERTY FOR ALMOST THREE (3) YEARS.

IV.

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT FAILED TO DECLARE PETITIONER RAMON NICOLAS AS A BUYER IN GOOD FAITH AS THE LATTER TOOK THE NECESSARY STEPS AN ORDINARY AND PRUDENT MAN WOULD HAVE TAKEN BEFORE BUYING THE QUESTIONED PROPERTY.

V.

THE COURT OF APPEALS ERRED IN RULING IN FAVOR OF RESPONDENT VILLANER ACABAL WHEN THE LATTER DID NOT PRESENT A SINGLE WITNESS TO TESTIFY ON THE ALLEGED CONTRACT OF LEASE WHICH HE ALLEGEDLY SIGNED AND WITNESSED BY THE EMPLOYEES OF JUDGE VILLEGAS.

VI.

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT RULED THAT RULE 8, SECTION 8 OF THE 1987 (sic) RULE (sic) OF CIVIL PROCEDURE IS NOT APPLICABLE IN THE CASE AT BAR, CONTRARY TO THE RULING OF THE LOWER COURT.

VII.

THE COURT OF APPEALS ERRED WHEN IT ORDERED PETITIONERS TO PAY RESPONDENTS JOINTLY AND SEVERALLY BY WAY OF RENTAL THE SUM OF P10,000.00 PER YEAR FROM 1990 UP TO THE TIME THEY VACATE THE PREMISES.[30]

Procedurally, petitioners contend that the Court of Appeals erred when it failed to apply Section 8, Rule 8 of the Rules of Court, respondent Villaner having failed to deny under oath the genuineness and due execution of the April 19, 1990 Deed of Absolute Sale.

Petitioners contention does not persuade. The failure to deny the genuineness and due execution of an actionable document does not preclude a party from arguing against it by evidence of fraud, mistake, compromise, payment, statute of limitations, estoppel, and want of consideration. [31]

On the merits, this Court rules in petitioners favor.

It is a basic rule in evidence that the burden of proof lies on the party who makes the allegations[32] ei incumbit probatio, qui dicit, non qui negat; cum per rerum naturam factum negantis probatio nulla sit.[33] If he claims a right granted by law, he must prove it by competent evidence, relying on the strength of his own evidence and not upon the weakness of that of his opponent.

More specifically, allegations of a defect in or lack of valid consent to a contract by reason of fraud or undue influence are never presumed but must be established not by mere preponderance of evidence but by clear and convincing evidence.[34] For the circumstances evidencing fraud and misrepresentation are as varied as the people who perpetrate it in each case, assuming different shapes and forms and may be committed in as many different ways.[35]

In the case at bar, it was incumbent on the plaintiff-herein respondent Villaner to prove that he was deceived into executing the Deed of Absolute Sale. Except for his bare allegation that the transaction was one of lease, he failed to adduce evidence in support thereof. His conjecture that perhaps those copies of the deed of sale were placed by Mr. Cadalin under the documents which I signed the contract of lease,[36] must fail, for facts not conjectures decide cases.

Attempting to seek corroboration of his account, Villaner presented Atty. Vicente Real who notarized the document. While on direct examination, Atty. Real virtually corroborated Villaners claim that he did not bring the document to him for notarization, [37] on cross-examination, Atty. Real conceded that it was impossible to remember every person who would ask him to notarize documents:

Q: And in the course of your notarization, can you remember each and every face that come (sic) to you for notarization?

A: No, it is impossible.

Q: In the case of Villaner Acabal which you have his document notarized (sic) in 1990, can you remember his face when he came to you?

A: No.

Q: And can you also say, if a person who came to you having a document to be notarized and if he will appear again after a month, can you remember whether he was the one who came to you?

A: Not so much because everyday there are many people who appear with documents to be notarized,

Q: So, it is safe to say that if Villaner Acabal came to you on April 25 or rather April 16, 1990 andhave (sic) his document notarized if he comes back in, say May 25, can you still remember if he was the one who came to you?

A: I cannot be sure but at least, there are times I can remember persons because he seems to be close to me already.

Q: Is this Villaner close to you?

A: Because he has been frequenting the house/asking for a copy of the document.

Q: So, he became close to you after you notarized the document?

A: Yes.[38] (Emphasis and underscoring supplied)

On Villaners claim that two women employees of Judge Villegas signed as witnesses to the deed[39] but that the signatures appearing thereon are not those of said witnesses, [40] the same must be discredited in light of his unexplained failure to present such alleged women employee-witnesses.

In another vein, Villaner zeroes in on the purchase price of the property P10,000.00 which to him was unusually low if the transaction were one of sale. To substantiate his claim, Villaner presented Tax Declarations covering the property for the years 1971, [41] 1974,[42] 1977,[43] 1980,[44] 1983,[45] 1985,[46] as well as a Declaration of Real Property executed in 1994.[47]

It bears noting, however, that Villaner failed to present evidence on the fair market value of the property as of April 19, 1990, the date of execution of the disputed deed. Absent any evidence of the fair market value of a land as of the time of its sale, it cannot be concluded that the price at which it was sold was inadequate.[48] Inadequacy of price must be proven because mere speculation or conjecture has no place in our judicial system.[49]

Victor Ragay, who was appointed by the trial court to conduct an ocular inspection [50] of the property and to investigate matters relative to the case, [51] gave an instructive report dated December 3, 1994,[52] the pertinent portions of which are hereby reproduced verbatim:

a) Only three (3) to four (4) hectares of the eighteen (18) were planted to sugar cane, the rest was never cultivated;

b) the soil is reddish and somewhat sandy in composition;

c) the soil contains so much limestones (rocks consisting mainly of calcium carbonate);

d) no part of the land in question is plain or flat, contrary to claim of the plaintiff that almost 10 hectares of the land in question is plain or flat;

e) some areas, eastward of and adjacent of the land in question (mistakenly to be owned by the defendant Nicolas) were planted to sugar cane by the owners Kadusales;

f) the road going to the land in question (as claimed to be the road) is no longer passable because it has been abandoned and not maintained by anyone, thus it makes everything impossible for anybody to get and haul the sugar cane from the area;

g) the Commissioner has discovered some stockpiles of abandoned harvested sugar canes left to rot, along the side of the road, undelivered to the milling site because of the difficulty in bringing up trucks to the scene of the harvest;

h) the sugarcanes presently planted on the land in question at the time of the ocular inspection were three (3) feet in height and their structural built was thin or lean;

i) Most of the part of the 18 hectares is not planted or cultivated because the same is too rocky and not suitable for planting to sugarcane.[53]

Additionally, Ragay reported that one Anatolio Cabusog recently purchased a 6-hectare property adjoining that of the subject property for only P1,600.00[54] or P266.67 per hectare. Given that, had the 18-hectare subject property been sold at about the same time, it would have fetched the amount of P4,800.00,[55] hence, the P10,000.00 purchase price appearing in the questioned April 19, 1990 document is more than reasonable.

Even, however, on the assumption that the price of P10,000.00 was below the fair market value of the property in 1990, mere inadequacy of the price per se will not rule out the transaction as one of sale. For the price must be grossly inadequate or shocking to the conscience such that the mind revolts at it and such that a reasonable man would neither directly nor indirectly be likely to consent to it. [56]

Still in another vein, Villaner submits that Leonardos transfer of the property to Nicolas in a span of one month for a profit of P30,000.00 conclusively reflects Leonardos fraudulent intent. This submission is a non sequitur.

As for Villaners argument that the sale of the property to Leonardo and the subsequent sale thereof to Nicolas are void for being violative of the retention limits imposed by Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law, the same fails. The pertinent provisions of said law read:

SECTION 6. Retention Limits. Except as otherwise provided in this Act, no person may retain, directly or indirectly, any public or agricultural land, the size of which may vary according to factors governing a

viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is tilling the land or directly managing the farm: Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the areas originally retained by them thereunder:[57] Provided further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead.

x x x

Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of private lands executed by the original landowner in violation of this Act shall be null and void: Provided, however, that those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the DAR within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares.

x x x

SECTION 70. Disposition of Private Agricultural Lands. The sale or disposition of agricultural lands retained by a land owner as a consequence of Section 6 hereof shall be valid as long as the total landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not exceed the landholding ceilings provided for in this Act.

Any sale or disposition of agricultural lands after the effectivity of this Act found to be contrary to the provisions hereof shall be null and void.

Transferees of agricultural lands shall furnish the appropriate Register of Deeds and the BARC an affidavit attesting that his total landholdings as a result of the said acquisition do not exceed the landholding ceiling. The Register of Deeds shall not register the transfer of any agricultural land without the submission of his sworn statement together with proof of service of a copy thereof to the BARC. (Emphasis and underscoring supplied)

As the above-quoted provisions of the Comprehensive Agrarian Reform Law show, only those private lands devoted to or suitable for agriculture are covered by it. [58] As priorly related, Victor Ragay, who was appointed by the trial court to conduct an ocular inspection of the property, observed in his report that only three (3) to four (4) hectares were planted with sugarcane while the rest of the property was not suitable for planting as the soil was full of limestone. [59] He also remarked that the sugarcanes were only 3 feet in height and very lean, [60] whereas sugarcanes usually grow to a height of 3 to 6 meters (about 8 to 20 feet) and have stems 2 to 5 centimeters (1-2 inches) thick. [61]

It is thus gathered that the property was not suitable for agricultural purposes. In any event, since the area devoted to the planting of sugarcane, hence, suitable for agricultural purposes, comprises only 4 hectares at the most, it is less than the maximum retention limit prescribed by law. There was then no violation of the Comprehensive Agrarian Reform Law.

Even assuming that the disposition of the property by Villaner was contrary to law, he would still have no remedy under the law as he and Leonardo were in pari delicto, hence, he is not entitled to afirmative relief one who seeks equity and justice must come to court with clean hands. In pari delicto potior est conditio defendentis.[62]

The proposition is universal that no action arises, in equity or at law, from an illegal contract; no suit can be maintained for its specific performance, or to recover the property agreed to be sold or delivered, or the money agreed to be paid, or damages for its violation. The rule has sometimes been laid down as though it were equally universal, that where the parties are in pari delicto, no affirmative relief of any kind will be given to one against the other. [63] (Emphasis and underscoring supplied)

The principle of pari delicto is grounded on two premises: first, that courts should not lend their good offices to mediating disputes among wrongdoers;[64] and second, that denying judicial relief to an admitted wrongdoer is an effective means of deterring illegality. [65] This doctrine of ancient vintage is not a principle of justice but one of policy as articulated in 1775 by Lord Mansfield in Holman v. Johnson:[66]

The objection, that a contract is immoral or illegal as between the plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. The principle of public policy is this; ex dolo malo non oritur actio.[67] No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa,[68] or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and the defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault potior est conditio defendentis.[69]

Thus, to serve as both a sanction and as a deterrent, the law will not aid either party to an illegal agreement and will leave them where it finds them.

The principle of pari delicto, however, is not absolute, admitting an exception under Article 1416 of the Civil Code.

ART. 1416. When the agreement is not illegal per se but is merely prohibited, and the prohibition by the law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered.

Under this article, recovery for what has been paid or delivered pursuant to an inexistent contract is allowed only when the following requisites are met: (1) the contract is not illegal per se but merely prohibited; (2) the prohibition is for the protection of the plaintiffs; and (3) if public policy is enhanced thereby.[70] The exception is unavailing in the instant case, however, since the prohibition is clearly not for the protection of the plaintiff-landowner but for the beneficiary farmers. [71]

In fine, Villaner is estopped from assailing and annulling his own deliberate acts. [72]

More. Villaner cannot feign ignorance of the law, nor claim that he acted in good faith, let alone assert that he is less guilty than Leonardo. Under Article 3 of the Civil Code, ignorance of the law excuses no one from compliance therewith.

And now, Villaners co-heirs claim that as co-owners of the property, the Deed of Absolute Sale executed by Villaner in favor of Leonardo does not bind them as they did not consent to such an undertaking. There is no question that the property is conjugal. Article 160 of the Civil Code [73] provides:

ART. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife. [74]

The presumption, this Court has held, applies to all properties acquired during marriage. For the presumption to be invoked, therefore, the property must be shown to have been acquired during the marriage.[75]

In the case at bar, the property was acquired on July 6, 1971 during Villaners marriage with Justiniana Lipajan. It cannot be seriously contended that simply because the tax declarations covering the property was solely in the name of Villaner it is his personal and exclusive property.

In Bucoy v. Paulino[76] and Mendoza v. Reyes[77] which both apply by analogy, this Court held that registration alone of the properties in the name of the husband does not destroy the conjugal nature of the properties.[78] What is material is the time when the land was acquired by Villaner, and that was during the lawful existence of his marriage to Justiniana.

Since the property was acquired during the existence of the marriage of Villaner and Justiniana, the presumption under Article 160 of the Civil Code is that it is the couples conjugal property. The burden is on petitioners then to prove that it is not. This they failed to do.

The property being conjugal, upon the death of Justiniana Lipajan, the conjugal partnership was terminated.[79] With the dissolution of the conjugal partnership, Villaners interest in the conjugal partnership became actual and vested with respect to an undivided one-half portion. [80] Justiniana's rights to the other half, in turn, vested upon her death to her heirs [81] including Villaner who is entitled to the same share as that of each of their eight legitimate children. [82] As a result then of the death of Justiniana, a regime of co-ownership arose between Villaner and his co-heirs in relation to the property.[83]

With respect to Justinianas one-half share in the conjugal partnership which her heirs inherited, applying the provisions on the law of succession, her eight children and Villaner each receives one-ninth (1/9) thereof. Having inherited one-ninth (1/9) of his wifes share in the conjugal partnership or one eighteenth (1/18)[84] of the entire conjugal partnership and is himself already the owner of one half (1/2) or nine-eighteenths (9/18), Villaners total interest amounts to ten-eighteenths (10/18) or five-ninths (5/9).

While Villaner owns five-ninths (5/9) of the disputed property, he could not claim title to any definite portion of the community property until its actual partition by agreement or judicial decree. Prior to partition, all that he has is an ideal or abstract quota or proportionate share in the property.[85] Villaner, however, as a co-owner of the property has the right to sell his undivided share thereof. The Civil Code provides so:

ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another

person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

Thus, every co-owner has absolute ownership of his undivided interest in the co-owned property and is free to alienate, assign or mortgage his interest except as to purely personal rights. While a co-owner has the right to freely sell and dispose of his undivided interest, nevertheless, as a co-owner, he cannot alienate the shares of his other co-owners nemo dat qui non habet.[86]

Villaner, however, sold the entire property without obtaining the consent of the other co-owners. Following the well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so quando res non valet ut ago, valeat quantum valere potest [87] the disposition affects only Villaners share pro indiviso, and the transferee gets only what corresponds to his grantors share in the partition of the property owned in common.[88]

As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale. This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to this grantor in the partition of the thing owned in common. Consequently, by virtue of the sales made by Rosalia and Gaudencio Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co-owner of the disputed parcel of land as correctly held by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof.

From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void. However, only the rights of the co-owner-seller are transferred., thereby making the buyer a co-owner of the property.

The proper action in cases like this is not for the nullification of the sale or the recovery of possession of the thing owned in common from the third person who substituted the co-owner or co-owners who alienated their shares, but the DIVISION of the common property as if it continued to remain in the possession of the co-owners who possessed and administered it.[89]

Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court. Neither recovery of possession nor restitution can be granted since the defendant buyers are legitimate proprietors and possessors in joint ownership of the common property claimed. [90] (Italics in the original; citations omitted; underscoring supplied)

This Court is not unmindful of its ruling in Cruz v. Leis [91] where it held:

It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share in the property owned in common. Article 493 of the Civil Code provides:

x x x

Unfortunately for private respondents, however, the property was registered in TCT No. 43100 solely in the name of Gertrudes Isidro, widow. Where a parcel of land, forming part of the undistributed properties of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who merely relied on the face of the certificate of title thereto, issued solely in the name of the widow, the purchaser acquires a valid title to the land even as against the heirs of the deceased spouse. The rationale for this rule is that a person dealing with registered land is not required to go behind the register to determine the condition of the property. He is only charged with notice of the burdens on the property which are noted on the face of the register or the certificate of title. To require him to do more is to defeat one of the primary objects of the Torrens system. [92] (Citation omitted)

Cruz, however, is not applicable for the simple reason that in the case at bar the property in dispute is unregistered. The issue of good faith or bad faith of a buyer is relevant only where the subject of the sale is a registered land but not where the property is an unregistered land. [93] One who purchases an unregistered land does so at his peril.[94] Nicolas claim of having bought the land in good faith is thus irrelevant.[95]

WHEREFORE, the petition is GRANTED. The Court of Appeals February 15, 2001 Decision in CA-G.R. CV No. 56148 is REVERSED and SET ASIDE and another is rendered declaring the sale in favor of petitioner Leonardo Acabal and the subsequent sale in favor of petitioner Ramon Nicolas valid but only insofar as five-ninths (5/9) of the subject property is concerned.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 61584 November 25, 1992

DONATO S. PAULMITAN, JULIANA P. FANESA and RODOLFO FANESA, petitioners, vs.COURT OF APPEALS, ALICIO PAULMITAN, ELENA PAULMITAN, ABELINO PAULMITAN, ANITA PAULMITAN, BAKING PAULMITAN, ADELINA PAULMITAN and ANITO PAULMITAN, respondents.

ROMERO, J.:

This is a petition for review on certiorari seeking the reversal of the decision 1 of the Court of Appeals, dated July 14, 1982 in CA-G.R. No. 62255-R entitled "Alicio Paulmitan, et al. v. Donato Sagario Paulmitan, et al." which affirmed the decision 2 of the then Court of First Instance (now RTC) of Negros Occidental, 12th Judicial District, Branch IV, Bacolod City, in Civil Case No. 11770.

The antecedent facts are as follows:

Agatona Sagario Paulmitan, who died sometime in 1953, 3 left the two following parcels of land located in the Province of Negros Occidental: (1) Lot No. 757 with an area of 1,946 square meters covered by Original Certificate of Title (OCT) No. RO-8376; and (2) Lot No. 1091 with an area of 69,080 square meters and covered by OCT No. RO-11653. From her marriage with Ciriaco Paulmitan, who is also now deceased, Agatona begot two legitimate children, namely: Pascual Paulmitan, who also died in 1953, 4 apparently shortly after his mother passed away, and Donato Paulmitan, who is one of the

petitioners. Petitioner Juliana P. Fanesa is Donato's daughter while the third petitioner, Rodolfo Fanes, is Juliana's husband. Pascual Paulmitan, the other son of Agatona Sagario, is survived by the respondents, who are his children, name: Alicio, Elena, Abelino, Adelina, Anita, Baking and Anito, all surnamed Paulmitan.

Until 1963, the estate of Agatona Sagario Paulmitan remained unsettled and the titles to the two lots mentioned above remained in the name of Agatona. However, on August 11, 1963, petitioner Donato Paulmitan executed an Affidavit of Declaration of Heirship, extrajudicially adjudicating unto himself Lot No. 757 based on the claim that he is the only surviving heir of Agatona Sagario. The affidavit was filed with the Register of Deeds of Negros Occidental on August 20, 1963, cancelled OCT No. RO-8376 in the name of Agatona Sagario and issued Transfer Certificate of Title (TCT) No. 35979 in Donato's name.

As regards Lot No. 1091, Donato executed on May 28, 1974 a Deed of Sale over the same in favor of petitioner Juliana P. Fanesa, his daughter. 5

In the meantime, sometime in 1952, for non-payment of taxes, Lot No. 1091 was forfeited and sold at a public auction, with the Provincial Government of Negros Occidental being the buyer. A Certificate of Sale over the land was executed by the Provincial Treasurer in favor of the Provincial Board of Negros Occidental. 6

On May 29, 1974, Juliana P. Fanesa redeemed the property from the Provincial Government of Negros Occidental for the amount of P2,959.09. 7

On learning of these transactions, respondents children of the late Pascual Paulmitan filed on January 18, 1975 with the Court of First Instance of Negros Occidental a Complaint against petitioners to partition the properties plus damages.

Petitioners set up the defense of prescription with respect to Lot No. 757 as an affirmative defense, contending that the Complaint was filed more than eleven years after the issuance of a transfer certificate of title to Donato Paulmitan over the land as consequence of the registration with the Register of Deeds, of Donato's affidavit extrajudicially adjudicating unto himself Lot No. 757. As regards Lot No. 1091, petitioner Juliana P. Fanesa claimed in her Answer to the Complaint that she acquired exclusive ownership thereof not only by means of a deed of sale executed in her favor by her father, petitioner Donato Paulmitan, but also by way of redemption from the Provincial Government of Negros Occidental.

Acting on the petitioners' affirmative defense of prescription with respect to Lot No. 757, the trial court issued an order dated April 22, 1976 dismissing the complaint as to the said property upon finding merit in petitioners' affirmative defense. This order, which is not the object of the present petition, has become final after respondents' failure to appeal therefrom.

Trial proceeded with respect to Lot No. 1091. In a decision dated May 20, 1977, the trial court decided in favor of respondents as to Lot No. 1091. According to the trial court, the respondents, as descendants of Agatona Sagario Paulmitan were entitled to one-half (1/2) of Lot No. 1091, pro indiviso. The sale by petitioner Donato Paulmitan to his daughter, petitioner Juliana P. Fanesa, did not prejudice their rights. And the repurchase by Juliana P. Fanesa of the land from the Provincial Government of Negros Occidental did not vest in Juliana exclusive ownership over the entire land but only gave her the right to

be reimbursed for the amount paid to redeem the property. The trial court ordered the partition of the land and directed petitioners Donato Paulmitan and Juliana P. Fanesa to pay private respondents certain amounts representing the latter's share in the fruits of the land. On the other hand, respondents were directed to pay P1,479.55 to Juliana P. Fanesa as their share in the redemption price paid by Fanesa to the Provincial Government of Negros Occidental. The dispositive portion of the trial court's decision reads:

WHEREFORE, judgment is hereby rendered on the second cause of action pleaded in the complain as follows:

1. The deed of sale (Exh. "F") dated May 28, 1974 is valid insofar as the one-half undivided portion of Lot 1091 is concerned as to vest ownership over said half portion in favor of defendant Juliana Fanesa and her husband Rodolfo Fanesa, while the remaining half shall belong to plaintiffs, pro-indiviso;

2. Lot 1091, Cadastral Survey of Pontevedra, Province of Negros Occidental, now covered by TCT No. RO-11653 (N.A.), is ordered partitioned. The parties must proceed to an actual partition by property instrument of partition, submitting the corresponding subdivision within sixty (60) days from finality of this decision, and should they fail to agree, commissioners of partition may be appointed by the Court;

3. Pending the physical partition, the Register of Deeds of Negros Occidental is ordered to cancel Original Certificate of Title No. RO-11653 (N.A.) covering Lot 1091, Pontevedra Cadastre, and to issue in lieu thereof a new certificate of title in the name of plaintiffs and defendants, one-half portion each, pro-indiviso, as indicated in paragraph 1 above;

4. Plaintiffs are ordered to pay, jointly and severally, defendant Juliana Fanesa the amount of P1,479.55 with interest at the legal rate from May 28, 1974 until paid;

5 Defendants Donato Sagario Paulmitan and Juliana Paulmitan Fanesa are ordered to account to plaintiffs and to pay them, jointly and severally, the value of the produce from Lot 1091 representing plaintiffs' share in the amount of P5,000.00 per year from 1966 up to the time of actual partition of the property, and to pay them the sum of P2,000.00 as attorney's fees as well as the costs of the suit.

xxx xxx xxx

On appeal, the Court of Appeals affirmed the trial court's decision. Hence this petition.

To determine the rights and obligations of the parties to the land in question, it is well to review, initially, the relatives who survived the decedent Agatona Sagario Paulmitan. When Agatona died in 1953, she was survived by two (2) sons, Donato and Pascual. A few months later in the same year, Pascual died, leaving seven children, the private respondents. On the other had, Donato's sole offspring was petitioner Juliana P. Fanesa.

At the time of the relevant transactions over the properties of decedent Agatona Sagario Paulmitan, her son Pascual had died, survived by respondents, his children. It is, thus, tempting to apply the principles

pertaining to the right of representation as regards respondents. It must, however, be borne in mind that Pascual did no predecease his mother, 8 thus precluding the operation of the provisions in the Civil Code on the right of representation 9 with respect to his children, the respondents. When Agatona Sagario Paulmitan died intestate in 1952, her two (2) sons Donato and Pascual were still alive. Since it is well-settled by virtue of Article 777 of the Civil Code that "[t]he rights to the succession are transmitted from the moment of the death of the decedent," 10 the right of ownership, not only of Donato but also of Pascual, over their respective shares in the inheritance was automatically and by operation of law vested in them in 1953 when their mother died intestate. At that stage, the children of Donato and Pascual did not yet have any right over the inheritance since "[i]n every inheritance, the relative nearest in degree excludes the more distantones." 11 Donato and Pascual excluded their children as to the right to inherit from Agatona Sagario Paulmitan, their mother.

From the time of the death of Agatona Sagario Paulmitan to the subsequent passing away of her son Pascual in 1953, the estate remained unpartitioned. Article 1078 of the Civil Code provides: "Where there are two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs, subject to the payment of debts of the deceased." 12 Donato and Pascual Paulmitan were, therefore, co-owners of the estate left by their mother as no partition was ever made.

When Pascual Paulmitan died intestate in 1953, his children, the respondents, succeeded him in the co-ownership of the disputed property. Pascual Paulmitan's right of ownership over an undivided portion of the property passed on to his children, who, from the time of Pascual's death, became co-owners with their uncle Donato over the disputed decedent estate.

Petitioner Juliana P. Fanesa claims ownership over Lot No. 1091 by virtue of two transactions, namely: (a) the sale made in her favor by her father Donato Paulmitan; and (b) her redemption of the land from the Provincial of Negros Occidental after it was forfeited for non-payment of taxes.

When Donato Paulmitan sold on May 28, 1974 Lot No. 1091 to his daughter Juliana P. Fanesa, he was only a co-owner with respondents and as such, he could only sell that portion which may be allotted to him upon termination of the co-ownership. 13 The sale did not prejudice the rights of respondents to one half (1/2) undivided share of the land which they inherited from their father. It did not vest ownership in the entire land with the buyer but transferred only the seller's pro-indiviso share in the property 14 and consequently made the buyer a co-owner of the land until it is partitioned. InBailon-Casilao v. Court of Appeals, 15 the Court, through Justice Irene R. Cortes, outlined the effects of a sale by one co-owner without the consent of all the co-owners, thus:

The rights of a co-owner of a certain property are clearly specified in Article 493 of the Civil Code, Thus:

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

As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale [Punsalan v. Boon Liat, 44 Phil. 320 (1923)]. This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in common [Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of the sales made by Rosalia and Gaudencio Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co-owner of the disputed parcel of land as correctly held by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof [Mainit v. Bandoy, 14 Phil. 730 (1910)].

From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void. However, only the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.

Applying this principle to the case at bar, the sale by petitioner Donato Paulmitan of the land to his daughter, petitioner Juliana P. Fanesa, did not give to the latter ownership over the entire land but merely transferred to her the one half (1/2) undivided share of her father, thus making her the co-owner of the land in question with the respondents, her first cousins.

Petitioner Juliana P. Fanesa also claims ownership of the entire property by virtue of the fact that when the Provincial Government of Negros Occidental bought the land after it was forfeited for non-payment of taxes, she redeemed it.

The contention is without merit.

The redemption of the land made by Fanesa did not terminate the co-ownership nor give her title to the entire land subject of the co-ownership. Speaking on the same issue raised by petitioners, the Court, in Adille v. Court of Appeals, 16 resolved the same with the following pronouncements:

The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the property held in common?

Essentially, it is the petitioners' contention that the property subject of dispute devolved upon him upon the failure of his co-heirs to join him in its redemption within the period required by law. He relies on the provisions of Article 1515 of the old Civil Code, Article 1613 of the present Code, giving the vendee a retro the right to demand redemption of the entire property.

There is no merit in this petition.

The right of repurchase may be exercised by co-owner with respect to his share alone (CIVIL CODE, art. 1612, CIVIL CODE (1889), art. (1514.). While the records show that petitioner redeemed the property in its entirety, shouldering the expenses therefor,

that did not make him the owner of all of it. In other words, it did not put to end the existing state of co-ownership (Supra, Art. 489). There is no doubt that redemption of property entails a necessary expense. Under the Civil Code:

Art. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-ownership.

The result is that the property remains to be in a condition of co-ownership. While a vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name (Supra, art. 1607). But the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a co-ownership.

Although petitioner Fanesa did not acquire ownership over the entire lot by virtue of the redemption she made, nevertheless, she did acquire the right to reimbursed for half of the redemption price she paid to the Provincial Government of Negros Occidental on behalf of her co-owners. Until reimbursed, Fanesa hold a lien upon the subject property for the amount due her. 17

Finally, petitioners dispute the order of the trial court, which the Court of Appeals affirmed, for them to pay private respondents P5,000.00 per year from 1966 until the partition of the estate which represents the share of private respondents in the fruits of the land. According to petitioners, the land is being leased for P2,000.00 per year only. This assigned error, however raises a factual question. The settled rule is that only questions of law may be raised in a petition for review. As a general rule, findings of fact made by the trial court and the Court of Appeals are final and conclusive and cannot be reviewed on appeal. 18

WHEREFORE, the petition is DENIED and the decision of the Court of Appeals AFFIRMED.

SO ORDERED.

SECOND DIVISION

EDNA LOPEZ DELICANO, EDUARDO ALBERTO LOPEZ, MARIO DIEZ CRUZ,

HOWARD E. MENESES, and CORAZON E. MENESES,

Petitioners,

- versus -

PECHATEN CORPORATION,

Respondent.

G.R. No. 191251

Present:

CARPIO, J., Chairperson,

BRION,

PERALTA,*

PEREZ, and

MENDOZA,** JJ.

.

Promulgated:

September 7, 2011

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

R E S O L U T I O N

CARPIO,  J.:

The Case

This petition for review1 assails the 13 November 2009 Amended Decision2 of the Court of Appeals in CA-G.R. SP No. 105360. The Court of Appeals set aside its earlier Decision 3dated 18 February 2009, which affirmed the 27 August 2008 Order of the Regional Trial Court (RTC), Branch 37, Manila.

The Facts

Respondent Pechaten Corporation (respondent) is the registered owner of a parcel of land (property) located at 852 Vicente Cruz Street, Sampaloc, Manila, and covered by Transfer Certificate of Title No. 95052 (TCT No. 95052).

In June 1993, respondent and Teodoro Alberto, Honorata Salmorin, Aquilina Hizon, and Dalmacia Meneses entered into a two-year lease contract4 involving the property. The parties agreed that the monthly rental for the first year5 would be P864, to be increased to P1,037 per month during the second year6 of the contract. Subsequently, the lessees executed a waiver of their rights or interest in the lease contract in favor of Virgilio Meneses, the son of Dalmacia Meneses.

When the lease contract expired on 30 June 1995, respondent offered Virgilio Meneses to renew the lease agreement or purchase the property. Virgilio Meneses ignored the offer and failed to pay monthly rentals for the property starting July 1995.

On 6 October 1999, respondent sent a demand letter to Virgilio Meneses to vacate the property and pay the accrued rent of P141,032 or reasonable compensation for the use of the property. When Virgilio Meneses refused, respondent filed with the Metropolitan Trial Court (MeTC) a case for unlawful detainer with damages against Virgilio Meneses.

In his defense, Virgilio Meneses claimed that the MeTC has no jurisdiction over the ejectment suit since it was filed more than four (4) years from the time the contract expired on 30 June 1995. Virgilio Meneses argued that the remedy of respondent should have been accion publiciana. Furthermore, Virgilio Meneses asserted that he was not a party to the lease contract, and thus, respondent has no cause of action against him.

On 12 February 2002, the Manila MeTC-Branch 2 rendered a judgment7 in favor of respondent, the dispositive portion of which reads:

Wherefore, judgment is rendered ordering defendant [Virgilio Meneses], his heirs, assigns, successors-in-interest and/or any other person claiming right under him:

1. to vacate the premises located at 852 Vicente Cruz St., Sampaloc, Manila;

2. to pay the plaintiff corporation the amount of P1,200.00 per month from July 1995 until the time that defendant vacate the premises as reasonable compensation for the use and occupation of the premises;

3. to pay the plaintiff the amount of P8,000.00 as attorneys fees; and

4. to pay the costs.

SO ORDERED.8

On appeal, the Manila RTC-Branch 37 affirmed the MeTC judgment. In a Decision9 dated 30 May 2008, the Manila RTC-Branch 37 agreed with the MeTC that the one-year period should be reckoned from the time the last demand was made. In this case, the last demand to vacate the property was made on 6 October 1999.10 The complaint for unlawful detainer was filed on 25 November 1999, which is within the one-year reglementary period.

Meanwhile, the City of Manila filed on 12 August 2004 a complaint for expropriation against respondent involving the property. The expropriation case, docketed as Civil Case No. 04-110675, was raffled to Manila RTC-Branch 11, which issued a Writ of Possession in favor of the City of Manila. On 27 March 2008, the Manila RTC-Branch 11 issued an Order of Expropriation in favor of the City of Manila.

Upon the death of Virgilio Meneses, he was substituted by his heirs, who are the petitioners in this case. In view of the Orders of the Manila RTC-Branch 11 involving the property in the expropriation case, petitioners filed a motion for reconsideration in the Manila RTC-Branch 37 of its Decision dated 30 May 2008. Petitioners moved to dismiss the unlawful detainer case, alleging that the case was rendered moot by virtue of the Writ of Possession issued by the Manila RTC-Branch 11 in the expropriation case involving the property. Furthermore, petitioners stated that the City of Manila had already turned over the property to them. Respondent opposed the motion, alleging that the Order dated 27 March 2008 of the Manila RTC- Branch 11, declaring that the City of Manila has the lawful right to take the property for public use, is the subject of appeal before the Court of Appeals.

On 27 August 2008, the Manila RTC-Branch 37 issued an Order partially reconsidering its Decision dated 30 May 2008. The dispositive portion of the Order reads:

WHEREFORE, the Decision dated May 30, 2008 is partially reconsidered. The Decision dated February 12, 2002 issued by the court a quo is MODIFIED as follows:

1. the order requiring appellant to vacate the premises located at 852 Vicente Cruz St., Sampaloc, Manila, is Set Aside for being moot and academic;

2. appellant to pay the appellee the amount of P1,200.00 per month from July 1995 up to February 9, 2005;

3. appellant to pay appellee the amount of P8,000.00 as attorneys fees; and

4. cost of suit.

SO ORDERED.11

Respondent filed a petition for review with the Court of Appeals, seeking to annul the Order dated 27 August 2008 of the Manila RTC-Branch 37. In its Decision dated 18 February 2009, the Court of Appeals dismissed respondents petition and affirmed the 27 August 2008 Order of the Manila RTC-Branch 37.

Respondent filed a motion for reconsideration and a supplemental motion for reconsideration. In its supplemental motion for reconsideration, respondent attached a copy of the Decision12 dated 24 March 2009 of the Court of Appeals-Special Sixth Division in the related expropriation case entitled City of Manila v. Pechaten Corporation. The Court of Appeals-Special Sixth Division reversed the Order dated 27 March 2008 of the Manila RTC-Branch 11 and dismissed the complaint for eminent domain filed by the City of Manila. Respondent alleged that the decision of the Court of Appeals-Special Sixth Division in the expropriation case, which became final and executory as of 14 April 2009,13 is a supervening event which warrants the reconsideration of the Decision dated 18 February 2009 of the Court of Appeals in this unlawful detainer case.

The Ruling of the Court of Appeals

On 13 November 2009, the Court of Appeals promulgated its Amended Decision in favor of respondent. The Court of Appeals agreed with respondent that the dismissal of the expropriation case is a supervening event which warrants the reconsideration of its Decision dated 18 February 2009. The dispositive portion of the Amended Decision reads:

WHEREFORE, premises considered, the instant Motion for Reconsideration and Supplemental Motion for Reconsideration are hereby GRANTED. Our Decision dated 18 February 2009 is hereby RECONSIDERED and SET ASIDE. Accordingly, the writ of possession issued by Branch 11 of Manila RTC in favor of the City of Manila over the subject property is hereby DISSOLVED.14

The Court of Appeals explained:

This court is justified in suspending or nullifying the writ of execution issued by Manila RTC Branch 11 granting possession of the subject property to the City of Manila. An order may be suspended or nullified when a supervening event, occurring subsequent to the said order, bring about a material change in the situation of the parties. In this case, the supervening event is the finality of the decision rendered by the Special Sixth Division on the appeal from the Order of the Manila RTC Branch 11 dated 27 March 2008. The said Special Sixth Division Decision reversed and set aside the order of the RTC and accordingly dismissed the complaint for eminent domain filed by the City of Manila. This decision became final and executory as of 14 April 2009.

x x x

A writ of possession is an order whereby the sheriff is commanded to place a person in possession of real or personal property. The decision rendered in the expropriation case by the Special Sixth Division is a judgment on the merits a consequence of the finality of the said judgment is the revocation of the writ of possession. The order [issuing the writ of possession] placed the City of Manila, which in turn granted the same to the Respondents [petitioners], in possession prior to the decision of the Special Sixth Division. Notwithstanding the writ of possession, title to the said property is still in the name of the Petitioner. The possession of the property must revert back to legal owner of the said property, in this case to Pechaten Corporation, because the expropriation case was also rendered final and executory.15

Hence, this petition.

The Issue

The issue in this case is whether petitioners are still entitled to retain possession over the subject property despite the dismissal of the expropriation case.

The Ruling of the Court

We find the petition without merit.

Section 11, Rule 67 (Expropriation) of the Rules of Civil Procedure provides:

Sec. 11. Entry not delayed by appeal; effect of reversal. The right of the plaintiff to enter upon the property of the defendant and appropriate the same to public use or purpose shall not be delayed by an appeal from judgment. But if the appellate court determines that plaintiff has no right of expropriation, judgment shall be rendered ordering the Regional Trial Court to forthwith enforce the restoration to the defendant of the possession of the property, and to determine the damages which the defendant sustained and may recover by reason of the possession taken by the plaintiff. (Emphasis supplied)

In this case, the Court of Appeals-Special Sixth Division, in the related expropriation case entitled City of Manila v. Pechaten Corporation, held that the expropriation of the property was not for public use. In its Decision dated 24 March 2009, the Court of Appeals-Special Sixth Division found that the expropriation of the property pursuant to City Ordinance No. 7984 was intended for the sole benefit of the family of Virgilio Meneses.16 Thus, the Court of Appeals-Special Sixth Division dismissed the complaint for eminent domain. The City of Manila did not appeal the Decision, which became final and executory on 14 April 2009.

Considering that the Decision of the Court of Appeals-Special Sixth Division reversing the judgment of expropriation already became final and executory, it is only proper that respondent should be restored to its rightful possession of the property in accordance with Section 11, Rule 67 of the Rules of Civil Procedure.

WHEREFORE, we DENY the petition. We AFFIRM the 13 November 2009 Amended Decision of the Court of Appeals in CA-G.R. SP No. 105360. The Decision dated 30 May 2008 of the Manila Regional Trial Court, Branch 37, in Civil Case No. 04-108960, affirming the 12 February 2002 Judgment of the Manila Metropolitan Trial Court, Branch 2, isREINSTATED.

SO ORDERED.

G.R. No. 180614 : August 29, 2012

LEONARDO NOTARTE, GUILLERMO NOTARTE, REGALADO NOTARTE AND HEIRS OF FELIPE NOTARTE,Petitioners, v. GODOFREDO NOTARTE, Respondent.

VILLARAMA, JR., J.:

FACTS:

Petitioners Leonardo, Guillermo, Regalado, all surnamed Notarte, and the heirs of Felipe Notarte were co-owners of a 263,233-square meter land covered by Original Certificate of Title (OCT) No. 48098.

On October 15, 1984, respondent Godofredo Notarte (Godofredo) bought a portion of the said land from Patrocenia Nebril-Gamboa (Patrocenia), cousin of Felipe Notarte. Thereafter, Godofredo filed a complaint before the MTC to correct and remove the overlapping of boundaries of the lots originally covered by OCT No. 48098. He averred that the said parcel of land is no longer undivided as it had been physically segregated into the designated shares of the registered owners.

Leonardo, et al. countered that the land was never validly partitioned since there was neither extrajudicial nor judicial partition executed. They claimed that their respective areas of possession were just orally assigned to each one of them.

ISSUE: Whether or not an oral partition of co-owned property is valid?

HELD: We sustain the RTC and CA in finding that the property covered by OCT No. 48098 had already been partitioned long before respondent purchased his lot.

CIVIL LAW: oral partition

Under Article 1082 of the Civil Code, every act which is intended to put an end to indivision among co-heirs is deemed to be a partition even though it should purport to be a sale, an exchange, or any other transaction. Partition may thus be inferred from circumstances sufficiently strong to support the presumption. The validity of an oral partition is already well-settled. In another case, we have held that after exercising acts of ownership over their respective portions of the contested estate, petitioners are estopped from denying the existence of an oral partition.

On this point, this Court has ruled that: "on general principle, independent and in spite of the statute of frauds, courts of equity have enforced oral partition when it has been completely or partly performed. Regardless of whether a parol partition or agreement to partition is valid and enforceable at law, equity will in proper cases, where the parol partition has actually been consummated by the taking of

possession in severalty and the exercise of ownership by the parties of the respective portions set off to each, recognize and enforce such parol partition and the rights of the parties thereunder."

The CAs decision is PARTLY AFFIRMED

JOSE Z. CASILANG, SR., SUBSTITUTED BY HIS HEIRS, NAMELY: FELICIDAD CUDIAMAT VDA. DE CASILANG, JOSE C. CASILANG, JR., RICARDO C. CASILANG, MARIA LOURDES C. CASILANG, CHRISTOPHER C. CASILANG, BEN C. CASILANG, DANTE C. CASILANG, GREGORIO C. CASILANG, HERALD C. CASILANG; AND FELICIDAD Z. CASILANG, MARCELINA Z. CASILANG, JACINTA Z. CASILANG, BONIFACIO Z. CASILANG, LEONORA Z. CASILANG, AND FLORA Z. CASILANG, Petitioners, v. ROSARIO Z. CASILANG-DIZON, MARIO A. CASILANG, ANGELO A. CASILANG, RODOLFO A. CASILANG, AND ATTY. ALICIA B. FABIA, IN HER CAPACITY AS CLERK OF COURT AND EX-OFFICIO SHERIFF OF PANGASINAN AND/OR HER DULY AUTHORIZED REPRESENTATIVE, Respondents.

D E C I S I O N

REYES, J.:

Before us is a petition for review of the Decision1 dated July 19, 2007 of the Court of Appeals (CA) in CA-G.R. CV No. 79619, which reversed and set aside the Decision2 dated April 21, 2003 of the Regional Trial Court (RTC) of Dagupan City, Branch 41, in Civil Case No. 98-02371-D.

Antecedent Facts

The late spouses Liborio Casilang (Liborio) and Francisca Zacarias (Francisca) had eight (8) children, namely: Felicidad Casilang (Felicidad), Ireneo Casilang (Ireneo), Marcelina Casilang (Marcelina), Jacinta Casilang (Jacinta), Bonifacio Casilang (Bonifacio), Leonora Casilang (Leonora), Jose Casilang (Jose) and Flora Casilang (Flora). Liborio died intestate on October 11, 1982 at the age of 83, followed not long after by his wife Francisca on December 25, 1982. Their son Bonifacio also died in 1986, survived by his child Bernabe Casilang (Bernabe), while son Ireneo died on June 11, 1992, survived by his four (4) children, namely: Mario Casilang (Mario), Angelo Casilang (Angelo), Rosario Casilang-Dizon (Rosario) and Rodolfo Casilang (Rodolfo), herein respondents.

The estate of Liborio, which left no debts, consisted of three (3) parcels of land located in BarangayTalibaew, Calasiao, Pangasinan, namely: (1) Lot No. 4676, with an area of 4,164 square meters; (2) Lot No. 4704, containing 1,164 sq m; and (3) Lot No. 4618, with 897 sq m.

On May 26, 1997, respondent Rosario filed with the Municipal Trial Court (MTC) of Calasiao, Pangasinan a complaint for unlawful detainer, docketed as Civil Case No. 847, to evict her uncle, petitioner Jose from Lot No. 4618. Rosario claimed that Lot No. 4618 was owned by her father Ireneo, as evidenced by Tax Declaration (TD) No. 555 issued in 1994 under her father’s name. On April 3, 1997, the respondents executed a Deed of Extrajudicial Partition with Quitclaim3 whereby they adjudicated Lot No. 4618 to themselves. In the same instrument, respondents Mario, Angelo and Rodolfo renounced their respective shares in Lot No. 4618 in favor of Rosario.

In his Answer, Jose raised the defense that he was the “lawful, absolute, exclusive owner and in actual possession” of the said lot, and that he acquired the same “through intestate succession from his late

father.”4 For some reason, however, he and his lawyer, who was from the Public Attorney’s Office, failed to appear at the scheduled pre-trial conference, and Jose was declared in default; thus, the adverse judgment against him.5

On February 18, 1998, the MTC rendered judgment finding Rosario to be the owner of Lot No. 4618, and ordering Jose to remove his house, vacate Lot No. 4618, and pay Rosario P500.00 in monthly rentals from the filing of the complaint until she was placed in possession, plus attorney’s fees of P5,000.00, litigation expenses and costs. On March 23, 1998, the MTC issued a writ of execution; and on August 28, 1998, a Writ of Demolition6 was issued.

On June 2, 1998, the petitioners, counting 7 of the 8 children of Liborio and Francisca,7 filed with the RTC of Dagupan City a Complaint,8 docketed as Civil Case No. 98-02371-D for “Annulment of Documents, Ownership and Peaceful Possession with Damages” against the respondents. On June 10, 1998, the petitioners moved for the issuance of a writ of preliminary injunction or temporary restraining order, which the RTC however denied on June 23, 1998.

Among the documents sought to be annulled was the 1997 Deed of Extrajudicial Partition executed by Ireneo’s children over Lot No. 4618, as well as TD No. 555, and by necessary implication its derivatives, TD No. 15177 (for the lot) and TD No. 15176 (for the house), both of which were issued in 1998 in the name of Rosario Casilang-Dizon.9

The petitioners alleged in their complaint that all eight (8) children of Liborio entered into a verbal partition of his estate, pursuant to which Jose was allotted Lot No. 4618 as his share; that Ireneo never claimed ownership of Lot No. 4618, nor took possession of it, because his share was the southwestern 1/5 portion of Lot No. 4676, containing an area of 1,308 sq m,10 of which he took exclusive possession during his lifetime; that Jose has always resided in Lot No. 4618 since childhood, where he built his family’s semi-concrete house just a few steps away from his parents’ old bamboo hut; that he took in and cared for his aged parents in his house until their deaths in 1982; that one of his children has also built a house on the lot.11 Jose, said to be the most educated of the Casilang siblings, worked as an insurance agent.12 The complete disposition of the intestate estate of Liborio per the parties’ verbal partition appears as follows:

1. Lot No. 4676, with 4,164 sq m, declared under TD No. 534 in Liborio’s name,13 was verbally partitioned among Marcelina (236 sq m), Leonora (1,965 sq m), Flora (655 sq m), and Ireneo, represented by his children, the herein respondents-defendants (1,308 sq m), as shown in aDeed of Extrajudicial Partition with Quitclaim dated January 8, 1998, subsequently executed by all the Casilang siblings and their representatives.

2. Lot No. 4704, with 1,164 sq m, declared under TD No. 276 in Liborio’s name, 14 was divided among Jacinta and Bonifacio, who died in 1986 and is now represented by his son Bernabe; and

3. Lot No. 4618, containing 897 sq m, declared since 1994 under TD No. 555 in Ireneo’s name, 15 is now the subject of the controversy below. Jose insists that he succeeded to it per verbal partition, and that he and his family have always occupied the same peacefully, adversely and exclusively even while their parents were alive.16

For her part, Rosario alleged in her answer with counterclaim,17 which she filed on September 15, 1998, that:

a) She is the actual and lawful owner of Lot No. 4618 with an area of 897 square meters, having acquired the same by way of a Deed of Extra judicial Partition with Quitclaim dated 3 April 1997 which was duly executed among herein Appellant ROSARIO and her brothers, namely, MARIO, ANGELO and RODOLFO, all surnamed CASILANG;

b) Her ownership over subject property could be traced back to her late father IR[E]NEO which the latter inherited by way of intestate succession from his deceased father LIBORIO sometime in 1992; that the residential house described in herein Appellee JOSE’s complaint is an illegal structure built by him in 1997 without her (ROSARIO’s) knowledge and consent; that in fact, an ejectment suit was filed against Appellee JOSE with the Municipal Trial Court in Calasiao, Pangasinan in Civil Case No. 847;

c) The subject lot is never a portion of Appellee JOSE’s share from the intestate of his deceased father, LIBORIO; that on the contrary, the lot is his deceased brother IR[E]NEO’s share from the late LIBORIO’s intestate estate; that in fact, the property has long been declared in the name of the late IR[E]NEO as shown by Tax Declaration No. 555 long before his children ROSARIO DIZON, MARIO[,] ANGELO and RODOLFO, all surnamed CASILANG, executed the Deed of Partition dated 18 February 1998; that Appellee JOSE had actually consumed his shares which he inherited from his late father, and after a series of sales and dispositions of the same made by him, he now wants to take Appellants’ property;

d) Appellee JOSE is never the rightful owner of the lot in question and has not shown any convincing proof of his supposed ownership; that the improvements introduced by him, specifically the structures he cited are the subject of a Writ of Demolition dated 28 August 1998 pursuant to the Order [dated] 17 August 1998 of the MTC of Calasiao, Pangasinan;

e) No protestation or objection was ever made by Appellee JOSE in Civil Case No. 847 ( Unlawful Detainer case) where he was the defendant; that the truth was that his possession of the subject property was upon the tolerance and benevolence of his late brother IR[E]NEO during the latter’s lifetime and that Appellant ROSARIO;

f) The RTC Clerk of Court and Ex-officio Provincial Sheriff would just be doing her job if she and her deputies would implement the writ of execution/demolition issued by the MTC of Calasiao, Pangasinan since it is its ministerial duty to do so;

g) The Appellees have no cause of action; not having shown in their complaint the basis, the reason and the very core of their claim as to why the questioned document should be nullified.18 (Citation omitted)

In their reply19 to Rosario’s aforesaid answer, the petitioners asserted that the MTC committed a grave error in failing to consider a material fact¾that Jose had long been in prior possession under a claim of title which he obtained by partition.

At the pre-trial conference in Civil Case No. 98-02371-D, the parties entered into the following stipulations:

1. That the late LIBORIO is the father of FELICIDAD, MARCELINA, JUANITA, LEONORA, FLORA and IR[E]NEO, all surnamed CASILANG[;]

2. That the late LIBORIO died in 1982; That the late LIBORIO and his family resided on Lot [No.] 4618 up

to his death in 1982; That the house of the late LIBORIO is located on Lot [No.] 4618;

3. That Plaintiff JOSE used to reside on the lot in question because there was a case for ejectment filed against him;

4. That the house which was demolished is the family house of the late LIBORIO and FRANCISCA ZACARIAS with the qualification that it was given to the defendants;

5. That the action involves members of the same family; and

6. That no earnest efforts were made prior to the institution of the case in court.20

Ruling of the RTC

After a full trial on the merits, the RTC in its Decision21 dated April 21, 2003 decreed as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against the defendants as follows:

1. Declaring the Deed of Extrajudicial Partition with Quitclaim dated April 3, 1997 null and void;

2. Declaring plaintiff Jose Z. Casilang Sr. as the lawful owner and possessor of the subject Lot [No.] 4618 and as such, entitled to the peaceful possession of the same;

3. Ordering the defendants to pay to plaintiff Jose Z. Casilang Sr. attorney’s fees in the amount of [P]20,000.00 and litigation expenses in the amount of [P]5,000.00, and to pay the costs of suit.

SO ORDERED.22

The RTC affirmed Jose’s ownership and possession of Lot No. 4618 by virtue of the oral partition of the estate of Liborio by all the siblings. In the Deed of Extrajudicial Partition with Quitclaim23 dated January 8, 1998, subsequently executed by all the eight (8) Casilang siblings and their legal representatives?with Ireneo represented by his four (4) children, and Bonifacio by his son Bernabe?petitioners Jose, Felicidad, Jacinta and Bernabe, acknowledged that they had “already received their respective shares of inheritance in advance,”24 and therefore, renounced their claims over Lot No. 4676 in favor of co-heirs Marcelina, Leonora, Flora and Ireneo, as follows:

[W]e hereby RENOUNCED, WAIVED AND QUITCLAIM, all our rights, interests and participations over the WHOLE parcel of land [Lot No. 4676], left by the late, LIBORIO CASILANG, in favor of our co-heirs, namely[:] MARCELINA Z. CASILANG-PARAYNO, LEONORA Z. CASILANG-SARMIENTO, FLORA Z. CASILANG, MARIO A. CASILANG, ANGELO A. CASILANG, ROSARIO A. CASILANG- DIZON AND RODOLFO A. CASILANG[.]25

Thus, Jose expressly renounced his share in Lot No. 4676, which has an area of 4,164 sq m, because he had already received in advance his share in his father’s estate, Lot No. 4618 with 897 sq m:

To the mind of the court, Jose Casilang could have not [sic] renounced and waived his rights and interests over Lot [No.] 4676 if he believes that Lot [No.] 4618 is not his, while the other lot, Lot [No.] 4704, was divided between sister Jacinta Casilang and brother Bonifacio Casilang[,] Sr., who was represented by his son. In the same [way] as testified to by plaintiffs Felicidad Casilang and Jacinta Casilang, they signed the Deed of Extrajudicial Partition with Quitclaim wherein they waived and renounced their rights and interests over Lot [No.] 4676 because they have already received their share, which is Lot [No.] 470[4].26

The RTC found baseless the claim of Rosario that Lot No. 4618 was an inheritance of her father Ireneo considering that a tax declaration is not conclusive proof of ownership. The RTC even noted that the tax declaration of Ireneo started only in 1994, although he had been dead since 1992. “Such being the case, the heirs of Ir[e]neo Casilang has [sic] no basis in adjudicating unto themselves Lot No. 4618 and partitioning the same by executing the Deed of Extrajudicial Partition with Quitclaim.”27

Appeal to the CA

Undeterred, Rosario appealed to the CA averring that: (1) the lower court erred in declaring the Deed of Extrajudicial Partition with Quitclaim dated April 3, 1997 as null and void; and (2) the lower court erred in declaring Jose as the lawful owner and possessor of the subject Lot No. 4618.28

In the now assailed decision, the CA reversed the RTC by relying mainly on the factual findings and conclusions of the MTC in Civil Case No. 847, viz:

Per the records, the above described property was subject of Civil Case No. 847 decided by the MTC of Calasiao, First Judicial Region, Province of Pangasinan which rendered a judgment, supra, in favor of Appellant ROSARIO ordering herein Appellee JOSE and all persons claiming rights under him to vacate the land of Appellant ROSARIO. It was found by the MTC that the latter is the owner of the subject parcel of land located at Talibaew, Calasiao, Pangasinan; that the former owner of the land is the late IRENEO (who died on 11 June 1992), father of Appellant ROSARIO; that Extra Judicial Partition with Quitclaim was executed by and among the heirs of the late IRENEO; that MAURO [sic], ANGELO and RODOLFO, all surnamed CASILANG waived and quitclaimed their respective shares over the subject property in favor of Appellant ROSARIO; that Appellee JOSE was allowed by the late IRENEO during his lifetime to occupy a portion of the land without a contract of lease and no rentals being paid by the former; that Appellant ROSARIO allowed Appellee JOSE to continue occupying the land after the Extra Judicial Partition with Quitclaim was executed.29

Moreover, noting that the decision in Civil Case No. 847 in favor of Rosario was issued on February 18, 1998 while the petitioners’ complaint in Civil Case No. 98-02371-D was filed on June 2, 1998, the CA concluded that the latter case was a mere afterthought:

If the latter has really a strong and valid reason to question the validity of the Deed of Extra Judicial Partition with Quitclaim, supra, he could have done it soon after the said Deed was executed on 3 April 1997. However, curiously enough, it was only when the MTC ordered his eviction from the subject property that he decided to file the instant case against the Appellants.30

Petition for Review in the Supreme Court

Now in this petition for review on certiorari, petitioners maintain that:

IN UPHOLDING THE LEGALITY [OF] THE DEED OF EXTRAJUDICIAL PARTITION AND QUITCLAIM DATED APRIL 3, 1997, THE HONORABLE COURT OF APPEALS GROSSLY VIOLATED THE SUBSTANTIVE RIGHT OF JOSE Z. CASILANG[,] SR. AS DIRECT COMPULSORY HEIR.31

Our Ruling and Discussions

There is merit in the petition.

Inferior courts are empowered to rule on the question of ownership raised by the defendant in an ejectment suit, but only to resolve the issue of possession; its determination is not conclusive on the issue of ownership.

It is well to be reminded of the settled distinction between a summary action of ejectment and a plenary action for recovery of possession and/or ownership of the land. What really distinguishes an action for unlawful detainer from a possessory action (accion publiciana) and from a reinvindicatory action (accion reinvindicatoria) is that the first is limited to the question of possession de facto. Unlawful detainer suits (accion interdictal) together with forcible entry are the two forms of ejectment suit that may be filed to recover possession of real property. Aside from the summary action of ejectment, accion publiciana or the plenary action to recover the right of possession and accionreinvindicatoria or the action to recover ownership which also includes recovery of possession, make up the three kinds of actions to judicially recover possession.32

Under Section 3 of Rule 70 of the Rules of Court, the Summary Procedure governs the two forms of ejectment suit, the purpose being to provide an expeditious means of protecting actual possession or right to possession of the property. They are not processes to determine the actual title to an estate. If at all, inferior courts are empowered to rule on the question of ownership raised by the defendant in such suits, only to resolve the issue of possession and its determination on the ownership issue is not conclusive.33 As thus provided in Section 16 of Rule 70:

Sec. 16. Resolving defense of ownership.—When the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession.

It is apropos, then, to note that in contrast to Civil Case No. 847, which is an ejectment case, Civil Case No. 98-02371-D is for “Annulment of Documents, Ownership and Peaceful Possession;” it is anaccion reinvindicatoria, or action to recover ownership, which necessarily includes recovery of possession 34 as an incident thereof. Jose asserts his ownership over Lot No. 4618 under a partition agreement with his co-heirs, and seeks to invalidate Ireneo’s “claim” over Lot No. 4618 and to declare TD No. 555 void, and consequently, to annul the Deed of Extrajudicial Partition and Quitclaim executed by Ireneo’s heirs.

It is imperative to review the CA’s factual conclusions since they are entirely contrary to those of the RTC, they have no citation of specific supporting evidence, and are premised on the supposed absence of evidence, particularly on the parties’ verbal partition, but are directly contradicted by the evidence on record.

It must be noted that the factual findings of the MTC, which the CA adopted without question, were obtained through Summary Procedure and were based solely on the complaint and affidavits of Rosario, after Jose had been declared in default. But since a full trial was had in Civil Case No. 98-02371-D, the CA should have pointed out the specific errors and weaknesses in the RTC’s factual conclusions before it could rule that Jose was unable to present “any evidentiary support” to establish his title, and that his continued possession of Lot No. 4618 was by mere tolerance of Rosario. At most, however, the CA only opined that it was conjectural for the RTC to conclude, that Jose had already received his inheritance when he renounced his share in Lot No. 4676. It then ruled that the RTC erred in not considering the findings of the MTC in Civil Case No. 847¾that Jose’s possession over subject property was by mere tolerance. Said the appellate court:

Given the claim of the Appellee that Lot [No.] 4618 was orally given/assigned to him by his deceased father LIBORIO, or that his claim was corroborated by his sisters (his co-plaintiffs-Appellees), or that their claim is indubitably tied up with the Deed of Extrajudicial Partition with Quitclaim over Lot No. 4676, still We cannot fully agree with the pronouncement of the court a quo that Appellee JOSE could not have renounced and waived his rights and interest over Lot [No.] 4676 if he believes that Lot [No.] 4618 is not his. Wanting any evidentiary support, We find this stance as conjectural being unsubstantiated by law or convincing evidence. At the most and taking the factual or legal circumstances as shown by the records, We hold that the court a quo erred in not considering the findings of the MTC in Civil Case No. 847 ruling that herein Appellee JOSE’s possession over subject property was by mere tolerance. Based as it is on mere tolerance, Appellee JOSE’s possession therefore could not, in any way, ripen into ownership.35 (Citations omitted)

By relying solely on the MTC’s findings, the CA completely ignored the testimonial, documentary and circumstantial evidence of the petitioners, obtained by the RTC after a full trial on the merits. More importantly, the CA did not point to any evidence of Rosario that Ireneo had inherited Lot No. 4618 from Liborio. All it did was adopt the findings of the MTC.

The Supreme Court is not a trier of facts, and unless the case falls under any of the well-defined exceptions, the Supreme Court will not delve once more into the findings of facts. In Sps. Sta. Maria v. CA,36 this Court stated:

Settled is the rule that the jurisdiction of this Court in cases brought before it from the Court of Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings of fact of the latter are conclusive, except in the following instances: (1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a

misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent; and (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.37 (Citation omitted)

In the instant case, the factual findings of the CA and the RTC are starkly contrasting. Moreover, we find that the CA decision falls under exceptions (7), (8) and (10) above, which warrants another review of its factual findings.

The evidence supporting Rosario’s claim of sole ownership of Lot No. 4618 is the Deed of Extrajudicial Partition with Quitclaim, which she executed with her brothers Mario, Angelo and Rodolfo. There is no question that by itself, the said document would have fully conveyed to Rosario whatever rights her brothers might have in Lot No. 4618. But what needs to be established first is whether or not Ireneo did in fact own Lot No. 4618 through succession, as Rosario claims. And here now lies the very crux of the controversy.

A review of the parties’ evidence shows that they entered into an oral partition, giving Lot No. 4618 to Jose as his share, whereas Rosario presented no proof whatsoever that her father inherited Lot No. 4618 from his father Liborio.

Rosario’s only proof of Ireneo’s ownership is TD No. 555, issued in his name, but she did not bother to explain why it was dated 1994, although Ireneo died on June 11, 1992. Liborio’s ownership of Lot No. 4618 is admitted by all the parties, but it must be asked whether in his lifetime Liborio did in fact transmit it to Ireneo, and if not, whether it was conveyed to him by Liborio’s heirs. It is imperative for Rosario to have presented proof of this transfer to Ireneo, in such a form as would have vested ownership in him. We find, instead, a preponderance of contrary evidence.

1. In his testimony, Jose claimed that his parents’ bamboo house in Lot No. 4618 disintegrated from wear and tear; so he took them in to his semi-concrete house in the same lot, which was just a few steps away, and he cared for them until they died; shortly before Liborio’s death, and in the presence of all his siblings, his father Liborio assigned Lot No. 4618 to him as his inheritance; his house was demolished in 1998 as a result of the ejectment case filed against him; but his family continued to live thereat after reconstructing the house; Ireneo and his family did not live in Lot No. 4618; although Jose’s job as an insurance agent took him around Pangasinan, he always came home to his family in his house in Lot No. 4618, which he used as his permanent address; only Lot No. 4676 was included in the Deed of Extrajudicial Partition dated January 8, 1998 because Lot No. 4618 had already been distributed to Jose, and Lot No. 4704 had already been assigned to Jacinta and Bonifacio as their share in their father’s estate.38

2. Jose’s testimony was corroborated by petitioners Felicidad,39 Jacinta,40 Leonora,41 and Flora,42who all

confirmed that their brother Jose has always resided in Lot No. 4618 from his childhood up to the present, that he took their aged parents into his house after their bamboo house was destroyed, and he attended to their needs until they died in 1982. The sisters were also one in saying that their father Liborio verbally willed Lot No. 4618 to Jose as his share in his estate, and that their actual partition affirmed their father’s dispositions. Jacinta claimed that she and Bonifacio have since taken possession of Lot No. 4704 pursuant to their partition, and have also declared their respective portions for tax purposes.43 Flora corroborated Jacinta on their taking possession of Lot No. 4704, as well as that Jose built his house on Lot No. 4618 next to his parents and they came to live with him in their old age. Flora affirmed that Exhibit “F” correctly reflects their verbal partition of Lot No. 4676, and that she was fully in accord with it. She added that Felicidad and Marcelina had since constructed their own houses on the portions of Lot No. 4676 assigned to them.44 Felicidad mentioned that in their partition, Ireneo was given a portion of Lot No. 4676, while Lot No. 4704 was divided between Jacinta and Bonifacio, and Jose alone got Lot No. 4618. Leonora confirmed that they were all present when their father made his above dispositions of his estate.

3. Benjamin Lorenzo, a long-time neighbor of the Casilangs testified that Jose’s house stands on Lot No. 4618 and Ireneo did not live with his family on the said lot but was a tenant in another farm some distance away.45

4. For her part, Rosario merely asserted that her father Ireneo succeeded to Lot No. 4618 from Liborio, as shown in TD No. 555 (Exhibit “1”); that she and her brothers extra-judicially settled Ireneo’s estate, and that they each waived their shares in her favor; and, that she has been paying taxes on Lot No. 4618. Rosario admitted, however, that Jose has lived in the lot since he was a child, and he has reconstructed his house thereon after its court-ordered demolition.46 But Rosario on cross-examination backtracked by claiming that it was her father Ireneo and grandfather Liborio who built the old house in Lot No. 4618, where Ireneo resided until his death; he even planted various fruit trees. Yet, there is no mention whatsoever to this effect by any of the witnesses. Rosario also contradicted herself when she denied that Jose lived there because his job as insurance agent took him away often and yet admitted that Jose’s house stands there, which he reconstructed after it was ordered demolished by the MTC. Inexplicably, Rosario disclaimed knowledge of Ireneo’s share in Lot No. 4676, although she was a signatory, along with her brothers and all the petitioners, in the deed of partition of the said lot, whereby she got 1,308 sq m. Rosario also admitted that taxes were paid on the lot only beginning in 1997, not before.47

5. Benjamin Dizon, husband of Rosario, testified that Rosario was losing appetite and sleep because of the case filed by Jose; that Ireneo died in another farm; that Ireneo had a house in Lot No. 4618 but Jose took over the house after he died in 1992.48 Respondent Angelo, brother of Rosario, claimed that when he was 13 or 14 years old, he heard his grandfather tell his father Ireneo that he would inherit Lot No. 4618. On cross-examination, Angelo insisted that his father had always lived with his family in his grandfather’s house in Lot No. 4618, that Jose did not live there but was given another lot, although he could not say which lot it was; he admitted that his grandmother lived with Jose when she died, and Ireneo’s share was in Lot No. 4676.49

6. On rebuttal, Jose recounted that after his four children were married, Ireneo lived as a tenant in another farm; that during a period of illness he lived in Manila for some time, and later resided in Cagayan with his two married sons; and lastly on his return, worked as a tenant of the Maningding family for about 10 years in Calasiao, staying in a hut one kilometer away. Jose also claimed that Ireneo had asked Liborio for a portion of Lot No. 4676, a lot which is bigger than Lot No. 4618 by several

hundreds of square meters.50

7. On sur-rebuttal, Rosario claimed that her grandparents, father and mother lived in Lot No. 4618 when she was a child until she married and left in 1976; that her uncle Jose asked permission from Liborio to be allowed to stay there with his family. She admitted that Jose built his house in 1985, three years after Liborio died, but as if to correct herself, she also claimed that Jose built his house in Lot No. 4676, and not  in Lot No. 4618. (Contrarily, her aunt Leonora testified that Jose built his house in Lot No. 4618 while their parents were alive.)51 Moreover, if such was the case, Rosario did not explain why she filed Civil Case No. 847, if she thought her uncle built his house in Lot No. 4676, and not in Lot No. 4618.52 Rosario also claimed that Ireneo always came home in the evenings to his father Liborio’s house from the Maningding farm, which he tenanted for 10 years, but obviously, by then Liborio’s house had long been gone. Again, confusedly, Rosario denied that she knew of her father’s share in Lot No. 4676.

From the testimonies of the parties, we are convinced that the conclusion of the RTC is well-supported that there was indeed a verbal partition among the heirs of Liborio, pursuant to which each of his eight children received his or her share of his estate, and that Jose’s share was Lot No. 4618.

The parties’ verbal partition is valid, and has been ratified by their taking possession of their respective shares.

The validity of an oral partition is well-settled in our jurisdiction. In Vda. de Espina v. Abaya,53 this Court declared that an oral partition is valid:

Anent the issue of oral partition, We sustain the validity of said partition. “An agreement of partition may be made orally or in writing. An oral agreement for the partition of the property owned in common is valid and enforceable upon the parties. The Statute of Frauds has no operation in this kind of agreements, for partition is not a conveyance of property but simply a segregation and designation of the part of the property which belong to the co-owners.”54

In Maestrado v. CA,55 the Supreme Court upheld the partition after it found that it conformed to the alleged oral partition of the heirs, and that the oral partition was confirmed by the notarized quitclaims executed by the heirs subsequently.56 In Maglucot-Aw v. Maglucot,57 the Supreme Court elaborated on the validity of parol partition:

On general principle, independent and in spite of the statute of frauds, courts of equity have enforce [sic] oral partition when it has been completely or partly performed.

Regardless of whether a parol partition or agreement to partition is valid and enforceable at law, equity will [in] proper cases[,] where the parol partition has actually been consummated by the taking of possession in severalty and the exercise of ownership by the parties of the respective portions set off to each, recognize and enforce such parol partition and the rights of the parties thereunder. Thus, it has been held or stated in a number of cases involving an oral partition under which the parties went into possession, exercised acts of ownership, or otherwise partly performed the partition agreement, that equity will confirm such partition and in a proper case decree title in accordance with the possession in severalty.

In numerous cases it has been held or stated that parol partition may be sustained on the ground of

estoppel of the parties to assert the rights of a tenant in common as to parts of land divided by parol partition as to which possession in severalty was taken and acts of individual ownership were exercised. And a court of equity will recognize the agreement and decree it to be valid and effectual for the purpose of concluding the right of the parties as between each other to hold their respective parts in severalty.

A parol partition may also be sustained on the ground that the parties thereto have acquiesced in and ratified the partition by taking possession in severalty, exercising acts of ownership with respect thereto, or otherwise recognizing the existence of the partition.

A number of cases have specifically applied the doctrine of part performance, or have stated that a part performance is necessary, to take a parol partition out of the operation of the statute of frauds. It has been held that where there was a partition in fact between tenants in common, and a part performance, a court of equity would have regard to and enforce such partition agreed to by the parties.58

Jose’s possession of Lot No. 4618 under a claim of ownership is well borne out by the records. It is also consistent with the claimed verbal partition with his siblings, and fully corroborated by his sisters Felicidad, Jacinta, Leonora, and Flora, who further testified that they each had taken possession of their own shares and built their houses thereon.

A possessor of real estate property is presumed to have title thereto unless the adverse claimant establishes a better right.59 Moreover, under Article 541 of the Civil Code, one who possesses in the concept of owner has in his favor the legal presumption that he possesses with a just title, and he cannot be obliged to show or prove it. Similarly, Article 433 of the Civil Code provides that actual possession under a claim of ownership raises a disputable presumption of ownership. Thus, actual possession and exercise of dominion over definite portions of the property in accordance with an alleged partition are considered strong proof of an oral partition60 which the Court will not hesitate to uphold.

Tax declarations and tax receipts are not conclusive evidence of ownership.

It is settled that tax declarations and tax receipts alone are not conclusive evidence of ownership. They are merely indicia of a claim of ownership,61 but when coupled with proof of actual possession of the property, they can be the basis of claim of ownership through prescription.62 In the absence of actual, public and adverse possession, the declaration of the land for tax purposes does not prove ownership. 63 We have seen that there is no proof that Liborio, or the Casilang siblings conveyed Lot No. 4618 to Ireneo. There is also no proof that Ireneo himself declared Lot No. 4618 for tax purposes, and even if he or his heirs did, this is not enough basis to claim ownership over the subject property. The Court notes that TD No. 555 was issued only in 1994, two years after Ireneo’s death. Rosario even admitted that she began paying taxes only in 1997.64 More importantly, Ireneo never claimed Lot No. 4618 nor took possession of it in the concept of owner.

WHEREFORE, premises considered, the Petition is GRANTED. The Decision dated July 19, 2007 of the Court of Appeals in CA-G.R. CV No. 79619 is hereby REVERSED and SET ASIDE, and the Decision dated April 21, 2003 of the Regional Trial Court of Dagupan City, Branch 41 in Civil Case No. 98-02371-D is REINSTATED.

SO ORDERED.

USUFRUCT

G.R. No. L-123 December 12, 1945

JOSEFA FABIE, petitioner, vs.JOSE GUTIERREZ DAVID, Judge of First Instance of Manila, NGO BOO SOO and JUAN GREY, respondents.

Sancho Onocencio for petitioner.Serverino B. Orlina for respondent Ngo Soo.No appearance for other respondents.

OZAETA, J.:

The petitioner Josefa Fabie is the usufructuary of the income of certain houses located at 372-376 Santo Cristo, Binondo, and 950-956 Ongpin, Santa Cruz, Manila, under the ninth clause of the will of the deceased Rosario Fabie y Grey, which textually reads as follows:

NOVENO. — Lego a mi ahijada menor de edad, Maria Josefa de la Paz Fabie, en usufructo vitalicio las rentas de las fincas situadas en la Calle Santo Cristo Numeros 372 al 376 del Disrito de Binondo, de esta Ciudad de Manila, descrita en el Certificado Original de Titulo No. 3824; y en la Calle Ongpin, Numeros 950 al 956 del Distrito de Santa Cruz, Manila descrita en el Certificado Original de Titulo No. 5030, expedidos por el Registrador de Titulos de Manila, y prohibo enajene, hipoteque, permute o transfiera de algun modo mientras que ella sea menor de edad. Nombro a Serafin Fabie Macario, mi primo por linea paterna tutor de la persona y bienes de mi ahijada menor, Maria Josefa de la Paz Fabie.

The owner of Santo Cristo property abovementioned is the respondent Juan Grey, while those of the Ongpin property are other person not concern herein. Previous to September 1944 litigation arose between Josefa Fabie as plaintiff and Juan Grey as defendant and the owner of the Ongpin property as intervenors, involving the administration of the houses mentioned in clause 9 of the will above quoted (civil case No. 1659 of the Court of First Instance of Manila). That suit was decided by the court on September 2, 1944, upon a stipulation in writing submitted by the parties to and approved by the court. The pertinent portions of said stipulation read as follows:

(4) Heretofore, the rent of said properties have been collected at times by the respective owners of the properties, at other times by the usufructuary, and lastly by the defendant Juan Grey as agent under a written agreement dated March 31, 1942, between the owners of both properties and the usufructuary.

(5) When the rents were collected by the owners, the net amounts thereof were duly paid to the usufructuary after the expenses for real estate taxes, repairs and insurance premiums, including the documentary stamps, on the properties and the expenses of collecting the rents had been deducted, and certain amount set aside as a reserve for contingent liabilities. When the rents were collected by the usufructuary, she herself paid the expenses aforesaid. When the rents are collected by the defendant Juan Grey under the agreement of March 31, 1942, the net amounts thereof were duly paid to the usufructuary, after deducting and setting aside the items aforesaid, monthly, until the month of October 1943, when the usufructuary refused to continue with the agreement of March 31, 1942.

x x x x x x x x x

II. The parties hereto jointly petition the Court to render judgment adopting the foregoing as finding of facts and disposing that:

(8) Beginning with the month of September 1944, the usufructuary shall collect all the rents of the both the Sto. Cristo and the Ongpin properties.

(9) The usufructuary shall, at her own cost and expense, pay all the real estate taxes, special assessments, and insurance premiums, including the documentary stamps, and make all the necessary repairs on each of the properties, promptly when due or, in the case of repairs, when the necessary, giving immediate, written notice to the owner or owners of the property concerned after making such payment or repairs. In case of default on the part of the usufructuary, the respective owners of the properties shall have the right to make the necessary payment, including penalties and interest, if any, on the taxes and special assessments, and the repairs and in that event the owner or owners shall entitled to collect all subsequent rents of the property concerned until the amount paid by him or them and the expenses of collection are fully covered thereby, after which the usufructuary shall again collect the rents in accordance herewith.

(10) The foregoing shall be in effect during the term of the usufruct and shall be binding on the successors and assigns of each of the parties.

(11) Nothing herein shall be understood as affecting any right which the respective owners of the properties have or may have as such and which is not specifically the subject of this stipulation.

In June 1945 Josefa Fabie commenced an action of unlawful detainer against the herein respondent Ngo Boo Soo (who says that his correct name is Ngo Soo), alleging in her amended complaint that the defendant is occupying the premises located at 372-376 Santo Cristo on a month-to month rental payable in advance not latter than the 5th of each month; that she is the administratrix and usufructuary of said premises; "that the defendant offered to pay P300 monthly rent payable in advance not later than the 5th of every month, beginning the month of April 1945, for the said of premises including the one door which said defendant, without plaintiff's consent and contrary to their agreement, had subleased to another Chinese, but plaintiff refused, based on the fact that the herein plaintiff very badly needs the said house to live in, as her house was burned by the Japanese on the occasion of the entry of the American liberators in the City and which was located then at No. 38 Flores, Dominga, Pasay; that

defendant was duly notified on March 24 and April 14, 1945, to leave the said premises, but he refused"; and she prayed for judgment of eviction and for unpaid rentals.

The defendant answered alleging that he was and since 1908 had been a tenant of the premises in question, which he was using and had always used principally as a store and secondarily for living quarters; that he was renting it from its owner and administrator Juan Grey; "that plaintiff is merely the usufructuary of the income therefrom, and by agreement between her and said owner, which is embodied in a final judgment of the Court of First Instance of Manila, her only right as usufructuary of the income is to receive the whole of such income; that she has no right or authority to eject tenants, such right being in the owner and administrator of the house, the aforesaid Juan Grey, who has heretofore petitioned this Court for permission to intervene in this action; that plaintiff herein has never had possession of said property; that defendant's lease contract with the owner of the house is for 5-year period, with renewal option at the end of each period, and that his present lease due to expire on December 31, 1945 . . .; that on June 1, 1945, defendant made a written offer to plaintiff to compromise and settle the question of the amount of rent to be paid by defendant . . . but said plaintiff rejected the same for no valid reason whatever and instituted the present action; that the reason plaintiff desires to eject defendant from the property is that she wishes to lease the same to other persons for a higher rent, ignoring the fact that as usufructuary of the income of the property she has no right to lease the property; that the defendant has subleased no part of the house to any person whomsoever.

Juan Grey intervened in the unlawful detainer suit, alleging in his complaint in intervention that he is the sole and absolute owner of the premises in question; that the plaintiff Josefa Fabie is the usufructuary of the income of said premises; by virtue of a contract between him and the intervenor which will expire on December 31, 1945, with the option to renew it for another period of five years from and after said date; that under the agreement between the intervenor and plaintiff Josefa Fabie in civil case No. 1659 of the Court of First Instance of Manila, which was approved by the court and incorporated in its decision of September 2, 1944, the only right recognized in favor of Josefa Fabie as usufructuary of the income of said premises is to receive the rents therefrom when due; and that as usufructuary she has no right nor authority to administer the said premises nor to lease them nor to evict tenants, which right and authority are vested in the intervenor as owner of the premises.

The municipal court (Judge Mariano Nable presiding) found that under paragraph 9 of the stipulation incorporated in the decision of the Court First Instance of Manila in civil; case No. 1659, the plaintiff usufructuary is the administratrix of the premises in question, and that the plaintiff had proved her cause. Judgment was accordingly rendered ordering the defendant Ngo Soo to vacate the premises and to pay the rents at the rate of P137.50 a month beginning April 1, 1945. The complaint in intervention was dismissed.

Upon appeal to the Court of First Instance of Manila the latter (thru Judge Arsenio P. Dizon) dismissed the case for the following reason: "The main issue *** is not a mere question of possession but precisely who is entitled to administer the property subject matter of this case and who should be the tenant, and the conditions of the lease. These issues were beyond the jurisdiction of the municipal court. This being case, this Court, as appellate court, is likewise without jurisdiction to take cognizance of the present case." A motion for reconsideration filed by the plaintiff was denied by Judge Jose Gutierrez David, who sustained the opinion of Judge Dizon.lawphi1.net

The present original action was instituted in this Court by Josefa Fabie to annul the order of the dismissal and to require to the Court of First Instance to try and decide the case on the merits. The petitioner further prays that the appeal of the intervenor Juan Grey be declared out of time on the ground that he receive copy of the decision on August 3 but did not file his notice of appeal until August 25, 1945.

1. The first question to determine is whether the action instituted by the petitioner Josefa Fabie in the municipal court is a purely possessory action and as such within the jurisdiction of said court, or an action founded on property right and therefore beyond the jurisdiction of the municipal court. In other words, is it an action of unlawful detainer within the purview of section 1 of Rule 72, or an action involving the title to or the respective interests of the parties in the property subject of the litigation?

Said section 1 of Rule 72 provides that "a landlord, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such landlord, vendor vendee, or other person, may, at any time within one year after such unlawful deprivation of withholding of possession, bring an action in the proper inferior court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with the damages and costs."

It is admitted by the parties that the petitioner Josefa Fabie is the usufructuary of the income of the property in question and that the respondent Juan Grey is the owner thereof. It is likewise admitted that by virtue of a final judgment entered in civil case No. 1659 of the Court of First Instance of Manila between the usufructuary and the owner, the former has the right to collect all the rents of said property for herself with the obligation on her part to pay all the real estate taxes, special assessments, and insurance premiums, and make all necessary repairs thereon, and in case default on her part the owner shall have the right to do all those things, in which event he shall be entitled to collect all subsequent rents of the property concerned until the amount paid by him and the expenses of collection are fully satisfied, after which the usufructuary shall again collect the rents. There is therefore no dispute as to the title to or the respective interests of the parties in the property in question. The naked title to the property is to admittedly in the respondent Juan Grey, but the right to all the rents thereof, with the obligation to pay the taxes and insurance premiums and make the necessary repairs, is, also admittedly, vested in the usufructuary, the petitioner Josefa Fabie, during her lifetime. The only question between the plaintiff and the intervenor is: Who has the right to manage or administer the property — to select the tenant and to fix the amount of the rent? Whoever has that right has the right to the control and possession of the property in question, regardless of the title thereto. Therefore, the action is purely possessory and not one in any way involving the title to the property. Indeed, the averments and the prayer of the complaint filed in the municipal court so indicate, and as a matter of fact the defendant Ngo Soo does not pretend to be the owner of the property, but on the contrary admits to be a mere tenant thereof. We have repeatedly held that in determining whether an action of this kind is within the original jurisdiction of the municipal court or of the Court of First Instance, the averments of the complaint and the character of the relief sought are primarily to be consulted; that the defendant in such an action cannot defeat the jurisdiction of the justice of the peace or municipal court by setting up title in himself; and that the factor which defeats the jurisdiction of said court is the necessity to adjudicate the question of title. (Mediranvs. Villanueva, 37 Phil., 752, 759; Medel vs. Militante, 41 Phil., 526, 529; Sevilla vs. Tolentino, 51 Phil., 333; Supia and Batioco vs. Quintero and Ayala, 59 Phil., 312; Lizo vs. Carandang, G.R. No. 47833, 2 Off. Gaz., 302; Aguilarvs. Cabrera and Flameño, G.R. No. 49129.)

The Court of First Instance was evidently confused and led to misconstrue the real issue by the complaint in intervention of Juan Grey, who, allying himself with the defendant Ngo Soo, claimed that he is the administrator of the property with the right to select the tenant and dictate the conditions of the lease, thereby implying that it was he and not the plaintiff Josefa Fabie who had the right to bring the action and oust the tenant if necessary. For the guidance of that court and to obviate such confusion in its disposal of the case on the merits, we deem it necessary and proper to construe the judgment entered by the Court of First Instance of Manila in civil case No. 1659, entitled "Josefa Fabie and Jose Carandang, plaintiffs, vs. Juan Grey, defendant, and Nieves G. Vda. de Grey, et al., intervenors-defendants" which judgment was pleaded by the herein respondents Juan Grey and Ngo Soo in the municipal court. According the decision, copy of which was submitted to this Court as Appendix F of the petition and as Annex 1 of the answer, there was an agreement, dated March 31, 1942, between the usufructuary Josefa Fabie and the owner Juan Grey whereby the latter as agent collected the rents of the property in question and delivered the same to the usufructuary after deducting the expenses for taxes, repairs, insurance premiums and the expenses of collection; that in the month of October 1943 the usufructuary refused to continue with the said agreement of March 31, 1942, and thereafter the said case arose between the parties, which by stipulation approved by the court was settled among them in the following manner: Beginning with the month of September 1944 the usufructuary shall collect all the rents of the property in question; shall, at her own cost and expense, pay all the real estate taxes, special assessments, and insurance premiums, including the documentary stamps, and make all the necessary repairs on the property; and in case of default on her part the owner shall the right to do any or all of those things, in which event he shall be entitled to collect all subsequent rents until the amounts paid by him are fully satisfied, after which the usufructuary shall again collect the rents. It was further stipulated by the parties and decreed by the court that "the foregoing shall be in effect during the term of the usufruct and shall be binding on the successors and assigns of each of the parties."

Construing said judgment in the light of the ninth clause of the will of the deceased Rosario Fabie y Grey, which was quoted in the decision and by which Josefa Fabie was made by the usufructuary during her lifetime of the income of the property in question, we find that the said usufructuary has the right to administer the property in question. All the acts of administration — to collect the rents for herself, and to conserve the property by making all necessary repairs and paying all the taxes, special assessments, and insurance premiums thereon — were by said judgment vested in the usufructuary. The pretension of the respondent Juan Grey that he is the administrator of the property with the right to choose the tenants and to dictate the conditions of the lease is contrary to both the letter and the spirit of the said clause of the will, the stipulation of the parties, and the judgment of the court. He cannot manage or administer the property after all the acts of management and administration have been vested by the court, with his consent, in the usufructuary. He admitted that before said judgment he had been collecting the rents as agent of the usufructuary under an agreement with the latter. What legal justification or valid excuse could he have to claim the right to choose the tenant and fix the amount of the rent when under the will, the stipulation of the parties, and the final judgment of the court it is not he but the usufructuary who is entitled to said rents? As long as the property is properly conserved and insured he can have no cause for complaint, and his right in that regard is fully protected by the terms of the stipulation and the judgment of the court above mentioned. To permit him to arrogate to himself the privilege to choose the tenant, to dictate the conditions of the lease, and to sue when the lessee fails to comply therewith, would be to place the usufructuary entirely at his mercy. It would place her in the absurd situation of having a certain indisputable right without the power to protect, enforce, and fully enjoy it.

One more detail needs clarification. In her complaint for desahucio Josefa Fabie alleges that she needs the premises in question to live in, as her former residence was burned. Has she the right under the will and the judgment in question to occupy said premises herself? We think that, as a corollary to her right to all the rent, to choose the tenant, and to fix the amount of the rent, she necessarily has the right to choose herself as the tenant thereof, if she wishes to; and, as she fulfills her obligation to pay the taxes and insure and conserve the property properly, the owner has no legitimate cause to complain. As Judge Nable of the municipal court said in his decision, "the pretension that the plaintiff, being a mere usufructuary of the rents, cannot occupy the property, is illogical if it be taken into account that that could not have been the intention of the testatrix."

We find that upon the pleadings, the undisputed facts, and the law the action instituted in the municipal court by the petitioner Josefa Fabie against the respondent Ngo Soo is one of unlawful detainer, within the original jurisdiction of said court, and that therefore Judges Dizon and Gutierrez David of the Court of First Instance erred in holding otherwise and in quashing the case upon appeal.

2. The next question to determine is the propriety of the remedy availed of by the petitioner in this Court. Judging from the allegations and the prayer of the petition, it is in the nature of certiorari and mandamus, to annul the order of dismissal and to require the Court of First Instance to try and decide the appeal on the merits. Under section 3 of Rule 67, when any tribunal unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, and there is no other plain, speedy, and adequate remedy in the ordinary course of law, it may be compelled by mandamus to do the act required to be done to protect the rights of the petitioner. If, as we find, the case before the respondent judge is one of unlawful detainer, the law specifically requires him to hear and decide that case on the merits, and his refusal to do so would constitute an unlawful neglect in the performance of that duty within section 3 of Rule 67. Taking into consideration that the law requires that an unlawful detainer case be promptly decided (sections 5 and 8, Rule 72),it is evident that an appeal from the order of dismissal would not be a speedy and adequate remedy; and under the authority ofCecilio vs. Belmonte (48 Phil., 243, 255), and Aguilar vs. Cabrera and Flameño (G.R. No. 49129), we hold thatmandamus lies in this case.

3. The contention of the petitioner that the appeal of the intervenor Juan Grey was filed out of time is not well founded. Although said respondent received copy of the decision of the municipal court on August 3, 1945, according to the petitioner (on August 6, 1945, according to the said respondent), it appears from the sworn answer of the respondent Ngo Soo in this case that on August 8 he filed a motion for reconsideration, which was granted in part on August 18. Thus, if the judgment was modified on August 18, the time for the intervenor Juan Grey to appeal therefrom did not run until he was notified of said judgment as modified, and since he filed his notice of appeal on August 23, it would appear that his appeal was filed on time. However, we observe in this connection that said appeal of the intervenor Juan Grey, who chose not to answer the petition herein, would be academic in view of the conclusions we have reached above that the rights between him as owner and Josefa Fabie as usufructuary of the property in question have been definitely settled by final judgment in civil case No. 1659 of the Court of First Instance of Manila in the sense that the usufructuary has the right to administer and possess the property in question, subject to certain specified obligations on her part.

The orders of dismissal of the respondent Court of First Instance, dated September 22 and October 31, 1945, in the desahucio case (No. 71149) are set aside that court is directed to try and decide the said case on the merits; with the costs hereof against the respondent Ngo Soo.

Moran, C.J., Paras, Jaranilla, Feria, De Joya, Pablo, Perfecto, Bengzon, and Briones, JJ., concur.

SOPHIE M. SEIFERT and ELISA ELIANOFF, Petitioners, v. MARY MCDONALD BACHRACH, in her capacity as administratrix of the estate of the deceased E. M. Bachrach, and CONRADO BARRIOS, Judge of First Instance of Manila, Respondents.

Ross, Selph, Carrascoso & Janda, for Petitioners.

Delgado, Dizon & Flores for Respondents.

First Assistant Solicitor General Roberto A. Gianzon and Solicitor Esmeraldo Umali for the Government.

SYLLABUS

1. OBLIGATIONS AND CONTRACTS; CONFORMITY TO PETITION FILED IN COURT; LIBERALITY AS CONSIDERATION. — The respondents allege that the conformity given by M. McD. B. to the petition of September 16, 1940, as well as the payments made by her of the monthly allowances under the order of October 2, 1940, "was an act of pure liberality on her part and, therefore, could not be construed as giving rise to any obligatory relations between said respondent executrix and the parties receiving said monthly allowances." The allegation is unacceptable. Conformity is consent. According to a universal law, recognized in the Civil Code, consent is the source of obligations. That respondent has given her conformity as an act "of pure liberality on her part" does not change the nature of the legal effect of the consent given. The commitment she made with her conformity cannot be dismissed upon the ground that it was given as "pure liberality" or for any other motive. Provided the consent was freely given, and regardless of the motive behind the act, it gives rise to all proper legal effects. The conformity or agreement of all the parties to the petition of September 16, 1940, gives it the nature of a contract. The contracting parties are bound to respect and to abide by the commitments in said contract. The contract cannot be lightly dismissed. Respondent’s allegation that M. McD. B. had given her conformity without any consideration, is belied by her own allegation to the effect that she gave said conformity as "an act of pure liberality on her part." Pure liberality is a consideration recognized by the Civil Code. No other consideration is entertained in donations.

2. ID.; ID.; ID.; APPROVAL BY COURT, EFFECT OF ON CONTRACT. — The contract in this case has the added force and solemnity of having been approved by the order of judge A of October 2, 1940. The contract has been elevated to the category of a judgment. Its enforceability depends not only on the good faith of the parties but on a legal and executory order issued by a competent court. While respondent M. M. B. cannot ignore her plighted word, she has absolutely no right to consider the order of October 2, 1940, as a mere scrap of paper. Otherwise, if their orders could be simply ignored, challenged or taken with scorn, there is no use for the existence of courts.

3. ID.; ID.; ID.; ALLOWANCES, AGREEMENT TO PAY, IN ABSENCE OF PROVISION IN WILL OR IN LAW. — Respondents alleged that "there is no provision in the will of the deceased E. M. Bachrach or in any statute requiring" the payment of the monthly allowances provided in the order of October 2, 1940. But is there any prohibition for the parties to agree in the payment of said monthly allowances? Was there any reason for the lower court to withhold its approval to the agreement? The allegation seems to imply an argument based on the denial of the basic right of the parties to enter into any kind of agreement neither forbidden by law nor against public morals.

4. ID.; ID.; ID.; ID.; ORDER OF COURT INSTRUCTING PAYMENT OF ALLOWANCES, EFFECT OF. — The respondents alleged that the order of October 2, 1940, "was not intended to be a judicial mandate but merely an authority for the respondent Mary McDonald Bachrach to do certain acts which she could not perform under the law or under the provisions of the will of the deceased E. M. Bachrach without judicial authority." The allegation finds no support in the order wherein M. McD. B. is "authorized and instructed forthwith to pay" the monthly allowances in question. Instructed means commanded. The inclusion of the last word negatives respondent’s allegation. M. McD. B. did not appeal against the order. She cannot now deny validity to the command involved in the word "instructed." Besides, an "order," the title of the document, cannot be anything other than a mandate, compulsory by nature.

5. ID.; ID.; ID.; USUFRUCT; RIGHT OF USUFRUCTUARY TO TRANSFER. — Impairment of her usufruct is also alleged by the administratrix. How can she now complain of the alleged impairment after alleging that she gave her conformity to the agreement, the basis of the order of October 2, 1940, as "an act of pure liberality on her part?" Was she not the owner of her usufruct? Could she not give away her usufruct or any part of it in favor of any person? If she disposed of a portion of said usufruct for the benefit of the sisters of her deceased husband, without being subject to compulsion, or fraud, or mistake, but freely and conscientiously, there is no reason for her to complain now.

6. ID.; ID.; ID.; ALLOWANCES AS ADVANCES OF INHERITANCE NOT COVERED BY MORATORIUM. — Allowances due and payable to heirs as advances of their inheritance, are not covered by the moratorium provided in Executive Orders Nos. 25 and 32, which refer to debts.

D E C I S I O N

PERFECTO, J.:

Petitioners, sisters and heirs of the late E. M. Bachrach, who died in Manila on September 28, 1937, pray for a command from this Court calculated to compel the lower court to execute its order of October 2, 1940, which reads as follows:jgc:chanrobles.com.ph

"Upon consideration of the petition of Sophie M. Seifert, Ginda M. Skundina, Elisa Elianoff and Annie Bachrach Levine, of September 16, 1940, wherein they pray that the administratrix and usufructuary of the properties left by the deceased E. M. Bachrach be authorized to pay them, beginning July 1, 1940, and until they receive their share of the estate left by the deceased E. M. Bachrach upon the death of his widow, a monthly allowance of P500; P250; P250; and P250, respectively, and the additional sum of P3,000 to the said Sophie M. Seifert, who is in poor health, the said allowances to be deducted from their shares of the estate of the deceased E. M. Bachrach upon the death of his widow, Mary McDonald Bachrach;

"All the parties interested in the estate left by the deceased E. M. Bachrach having expressed their conformity to the said petition, and there existing no reason why the same should not be granted.

"Petition granted; and the administratrix and usufructuary Mary McDonald Bachrach is hereby authorized and instructed forthwith to pay to the said Sophie M. Seifert, Ginda M. Skundina, Elisa

Elianoff and Annie Bachrach Levine a monthly allowance of five hundred (P500) pesos; two hundred fifty (P250) pesos; two hundred fifty (P250) pesos; and two hundred fifty (P250) pesos, respectively, beginning July 1, 1940, and until the said heirs receive their share of the estate left by the deceased E. M. Bachrach upon the death of his widow, and the additional sum of three thousand (P3,000) pesos to the heir Sophie M. Seifert.

"The payment of the monthly allowances herein granted to the said heirs Sophie M. Seifert, Ginda M. Skundina, Elisa Elianoff and Annie Bachrach Levine other than those corresponding to the months of July, August and September, shall be made on or before the 5th day of each month, beginning October, 1940; shall be taken from the properties to be turned over to the heirs of the deceased E. M. Bachrach and the usufruct of which will belong to his widow, Mary McDonald during her life; and shall be deducted from the share of the said heirs of the estate of the deceased E. M. Bachrach upon the death of his widow.

"Upon verbal petition of Attorney Carrascoso, and it appearing from the record that two of the clients whom his law firm represents reside outside of the Philippines, the administratrix and usufructuary, Mary McDonald Bachrach, is hereby authorized and instructed to pay directly to Attorneys Ross, Lawrence, Selph & Carrascoso the monthly allowances corresponding to the heirs Sophie M. Seifert, Ginda M. Skundina, and Elisa Elianoff.

"No opposition having been filed to the amended report, rendition of accounts, and liquidation of the community property of the conjugal partnership of E. M. Bachrach, deceased, and Mary McDonald Bachrach as surviving spouse presented by the administratrix under date of September 17, 1940, the same are hereby approved and granted. It is so ordered."cralaw virtua1aw library

"QUIRICO ABETO

"Judge"

The petition in virtue of which the above order was issued and to which all the interested parties in the estate have expressed their conformity, as stated in the order, reads as follows:jgc:chanrobles.com.ph

"Comes now Sophie M. Seifert, Ginda M. Skundina, Elisa Elianoff, and Annie Bachrach, and to this Honorable Court respectfully state:jgc:chanrobles.com.ph

"1. That paragraph sixth and eighth of the will of the deceased E. M. Bachrach provide as follows:jgc:chanrobles.com.ph

"‘Sixth: It is my will and do herewith bequeath and devise to my beloved wife Mary McDonald Bachrach for life all the fruits and usufruct of the remainder of all my estate after payment of the legacies, bequests and gifts provided for above; and she may enjoy such usufruct and use or spend such fruits as she may in any manner wish.’

"‘Eighth: It is my wish that upon the death of my beloved wife, Mary McDonald Bachrach, all my estate, personal, real and otherwise, and all the fruits and usufruct thereof which during her life pertained to her, shall be divided as follows:jgc:chanrobles.com.ph

"‘One-half (1/2) thereof shall be given to such charitable hospitals in the Philippines as she may

designate; in case she fails to designate, then said sum shall be given to the Chief Executive of these Islands who shall distribute it, share and share alike to all charitable hospitals in the Philippines excluding those belonging to the governments of the Philippines or of the United States:" ’One-half (1/2) thereof shall be divided, share and share alike by and between my legal heirs, to the exclusion of my brothers.’

"2. That on July 22, 1940, this Court entered the following order:jgc:chanrobles.com.ph

"‘It appearing from the report filed by the commissioner, the Acting Assistant Clerk of the Court, that the only heirs of the deceased E. M. Bachrach, according to the evidence presented, are his widow Mary McDonald Bachrach and his sisters Sophie M. Seifert, Annie Bachrach, Ginda Skundina and Elisa Elianoff, the Court hereby declares said Mary McDonald Bachrach, Sophie M. Seifert, Annie Bachrach, Ginda Skundina and Elisa Elianoff as the only legal heirs of said deceased, all of whom are of legal age.

"‘So ordered.’

"Your petitioners who are the legal heirs of the deceased E. M. Bachrach beside his widow, Mary McDonald Bachrach, respectfully request that she, as administratrix and usufructuary of her deceased husband’s properties, be authorized to pay your petitioners from and after July 1, 1940, and until they receive their share of the estate left by the deceased E. M. Bachrach upon the death of his widow, a monthly allowance of P500, P250, P250, and P250, respectively, and the additional sum of P3,000 to the heir Sophie M. Seifert, who is in poor health, the said allowances to be deducted from your petitioners’ share of the estate of the deceased E. M. Bachrach upon the death of the widow;

"All parties interested in the estate left by the deceased E. M. Bachrach are agreeable to this petition.

"Manila, September 16, 1940.

"ROSS, SELPH, CARRASCOSO & JANDA

By (Sgd.) "ANTONIO T. CARRASCOSO, Jr.

Attorneys for Ginda M. Skundina,

Elisa Elianoff, and Sophie Seifert

414 National City Bank Bldg., Manila

"We agree:chanrob1es virtual 1aw library

(Sgd.) "ANNIE BACHRACH

(Sgd.) "MARY McDONALD BACHRACH

Administratrix and Usufructuary

(Sgd.) "ROMAN OZAETA

"Solicitor General"

No appeal has been taken against the foregoing order by any party.

From July 1, 1940, to December 31, 1941, the administratrix, respondent Mary McDonald Bachrach, made the payments as ordered. According to respondents, the total amount paid amounted to P40,250. The monthly allowances or advances due from January 1, 1942, to July 31, 1945, were not paid. The total amount is P32,500 or P21,500 for Sophie M. Seifert and P10,750 for Elisa Elianoff. Payments were resumed from August, 1945, to January, 1947. Petitioners have been demanding from respondent Mary McDonald Bachrach the payment of the monthly allowances from January 1, 1942, to July 31, 1945, but respondent refused to pay. As alleged in her memorandum, the executrix "decided to stop the payment", among several reasons, in view of the "inconsiderate, unappreciated and unkind attitude" of petitioners, the increasing burden on Mrs. Bachrach’s usufruct, and improbability of reimbursement to the estate of the payments and of the return to the executrix of the usufructuary value of said allowances.

On February 18, 1947, petitioners filed with the lower court a petition for the issuance of a writ of execution ordering, on the authority of the order of October 2, 1940, the administratrix to pay the allowances for February, 1947, and those in arrears for the period comprising January 1, 1942, to July 31, 1945, and that in case the administratrix should fail to pay the above amounts within 24 hours after receipt of notice, the Hongkong and China Banking Corporation be ordered to deliver to attorneys for petitioners the total sum of P33,000, to be withdrawn from the funds that the administratrix has on deposit in said bank in the name of the estate of E. M. Bachrach.

The petition was denied on February 27, 1947. On March 4, 1947, petitioners filed a motion for the reconsideration of said order. On March 14, 1947, the motion for reconsideration was denied. Not satisfied with the orders of February 27, and March 14, 1947, of the lower court, petitioners filed with us the petition in this case.

For a proper understanding of the controversy we quote hereunder the text of the will of E. M. Bachrach:jgc:chanrobles.com.ph

"I, E. M. Bachrach, a naturalized American citizen from the State of New York and resident of the City of Manila, Philippine Islands, being of sound and disposing mind and memory and not acting under duress, menace, fraud or undue influence of whatever nature, do hereby make, publish and declare the following to be my Last Will and Testament, to-wit:jgc:chanrobles.com.ph

"First: I hereby declare that I have no child or children, grandchild or grandchildren.

"Second: My failure to make any provision in this Will for my brothers is intentional.

"Third: I hereby revoke and cancel any and all Wills by me heretofore made.

"Fourth: I hereby bind, obligate, and instruct my executors or administrators to make and pay the following bequests, legacies or gifts, to-wit:jgc:chanrobles.com.ph

"(a) To Mary McDonald Bachrach, my beloved wife, I give one-half (½) of the proceeds of the house known as "Casa Blanca," my residence at 105 Manga Avenue, Sta. Mesa, Manila, and of the rights to the

lease on the parcel of land wherein said house is built. As all the furniture, fixtures and silverware contained in the house were bought by my beloved wife Mary McDonald Bachrach out of her own personal funds, and furniture, fixtures and silverware, being her own property, I hereby order that the same be returned to her and disposed of by her as she may wish and for her own benefit.

"(b) To Mary McDonald Bachrach, my beloved wife, I give an allowance of five hundred pesos (P500) each month as living expenses.

"(c) To Mina Levine, daughter of Hyman Levine, the sum of ten thousand pesos (P10,000) to be paid to her upon my death.

"(d) To Hyman Levine, the sum of one thousand pesos (P1,000) for each year of service he has given me or the Bachrach Motor Co., Inc., that is one thousand pesos (P1,000) for each year since January, 1917, when he entered the employment of the Bachrach Motor Co., Inc.

"(e) To Martin Elianoff and his wife Luba Elianoff, the sum of Ten Thousand Pesos (P10,000) jointly.

"(f) To Afna Elianoff, daughter of Martin Elianoff, the sum of Ten Thousand Pesos (P10,000) which amount is to be deposited in any bank her father may choose, and is to be used for her education and upon her becoming of age, she may withdraw and use the remainder thereof if any, as she may deem fit.

"(g) To Temple Emil Congregation, the sum of ten thousand pesos(P10,000).

"(h) To Sofie Seifert, wife of John Seifert, now residing at San Francisco, California, the sum of ten thousand pesos (P10,000).

"(i) To Ginda Scundin, married to Henoch Scundin, now residing at Kiev, Russia, the sum of ten thousand pesos (P10,000).

"(j) To Lisa Elianoff, widow of Abraham Elianoff, now residing at Moscow, Russia, the sum of ten thousand pesos (P10,000).

"Fifth: I hereby choose and appoint my beloved wife, Mary McDonald Bachrach, as my administratrix and executrix to hold, keep, possess and invest all my remaining properties for the benefit and advantage of the estate.

"Sixth: It is my will and do herewith bequeath and devise to my beloved wife Mary McDonald Bachrach for life all the fruits and usufruct of the remainder of all my estate after payment of the legacies, bequests and gifts provided for above; and she may enjoy such usufruct and use or spend such fruits as she may in any manner wish.

"Seventh: It is my express wish that the business of the Bachrach Motor Co., Inc., the controlling shares of which I hold and own, shall not be dissolved, disposed of, or discontinued for a period of at least FIVE years after my death, unless the company is conducted at a losing basis; and the payment of the bequests, legacies and gifts above mentioned shall be made from my income and estate as shall least disturb or disrupt the business of the Bachrach Motor Co., Inc., as a going concern;

"Eighth: It is my wish that upon the death of my beloved wife, Mary McDonald Bachrach, all my estate, personal, real and otherwise, and all the fruits and usufruct thereof which during her life pertained to her, shall be divided as follows:jgc:chanrobles.com.ph

"One-half (1/2) thereof shall be given to such charitable hospitals in the Philippines as she may designate; in case she fails to designate, then said sum shall be given to the Chief Executive of these Islands who shall distribute it, share and share alike to all charitable hospitals in the Philippines excluding those belonging to the governments of the Philippines or of the United States;

"One-half (1/2) thereof shall be divided, share and share alike by and between my legal heirs, to the exclusion of my brothers.

"Before signing this Last Will and Testament, I hereby declare that I have read and understood each and every provision hereof, and hereby publish and declare the same as my Last Will and Testament.

"Done in this City of Manila, this 3rd day of December, 1935.

(Sgd.) "E. M. BACHRACH"

The following facts can also be taken into consideration: (1) A report filed by respondent Mary McDonald Bachrach on January 24, 1941, giving in detail a list of properties belonging to the heirs of E. M. Bachrach, shows a total value of P1,069,494.34; (2) The administratrix has in her possession the sum of P351,016.91; (3) The administratrix has made "all the transfers or is proceeding with the transfers in the name of the estate of E. M. Bachrach for the heirs of the said E. M. Bachrach," of the properties whose total value according to the last project of partition is P1,069,494.34; (4) Among the properties in the possession of the administratrix is the sum of P351,016.91 which has already been adjudicated to, and belongs, although still pro indiviso, to the heirs of the deceased E. M. Bachrach, from which, according to petitioners, the monthly allowances due to petitioners should be paid in accordance with the order of October 2, 1940; (5) Petitioners allege that the monthly allowances due them shall not be taken from the one-half of the properties amounting to P1,069,494.34 which is the share of the charitable hospitals, but from their respective participations in said property; (6) The Solicitor General agreed to the payment of the monthly allowances as per his conformity signed at the bottom of the petition of September 15, 1940; (7) Respondent Mary McDonald Bachrach has made advance payments to charitable institutions amounting to P22,000 from the participation of the charitable hospitals without prior authority from the probate court; (8) On May 27, 1947, the Solicitor General filed a manifestation undoubtedly for the protection of one-half of each and every asset of the estate of the deceased E. M. Bachrach, belonging to the charitable hospitals, in accordance with the eighth clause of the will; (9) On June 9, 1947, petitioners answer by stating that their monthly allowances shall not be taken from the shares or participation belonging to the charitable hospitals but from petitioner’s participation or interest in the other one-half of the estate of E. M. Bachrach which belongs to the heirs of the deceased; (10) On June 11, 1947, the Solicitor General filed an additional manifestation in which it expresses its satisfaction over the statement made by petitioners on June 9, 1947.

There is no question that the monthly allowances provided in the order of October 2, 1940, were agreed upon by all the parties for the maintenance of the four sisters of the deceased E. M. Bachrach, including herein petitioners. In the order of February 27, 1947, Judge Conrado Barrios found that the heirs-petitioners Sophie M. Seifert and Elisa Elianoff "are in dire need of funds for support."cralaw virtua1aw library

Several reasons are advanced by respondents in their opposition to the compliance with and execution of the order of Judge Abeto dated October 2, 1940. We shall pass upon the important ones.

They allege that the conformity given by Mary McDonald Bachrach to the petition of September 16, 1940, as well as the payments made by her of the monthly allowances under the order of October 2, 1940, "was an act of pure liberality on her part and, therefore, could not be construed as giving rise to any obligatory relations between said respondent executrix and the parties receiving said monthly allowances." The allegation is unacceptable. Conformity is consent. According to a universal law, recognized in our Civil Code, consent is the source of obligations. That respondent has given her conformity as an act "of pure liberality on her part" does not change the nature of the legal effect of the consent given. The commitment she made with her conformity cannot be dismissed upon the ground that it was given as "pure liberality" or for any other motive. Provided the consent was freely given, and regardless of the motive behind the act, it gives rise to all proper legal effects. The conformity or agreement of all the parties to the petition of September 16, 1940, gives it the nature of a contract. The contracting parties are bound to respect and to abide by the commitments in said contract. The contract cannot be lightly dismissed. Respondent’s allegation that Mary McDonald Bachrach had given her conformity without any consideration, is belied by her own allegation to the effect that she gave said conformity as "an act of pure liberality on her part." Pure liberality is a consideration recognized by the Civil Code. No other consideration is entertained in donations. The contract in this case has the added force and solemnity of having been approved by the order of Judge Abeto of October 2, 1940. The contract has been elevated to the category of a judgment. Its enforceability depends not only on the good faith of the parties but on a legal and executory order issued by a competent court. While respondent Mary M. Bachrach cannot ignore her plighted word, she has absolutely no right to consider the order of October 2, 1940, as a mere scrap of paper. Otherwise, if their orders could be simply ignored, challenged or taken with scorn, there is no use for the existence of courts.

Respondents alleged that "there is no provision in the will of the deceased E. M. Bachrach or in any statute requiring" the payment of the monthly allowances provided in the order of October 2, 1940. But is there any prohibition for the parties to agree in the payment of said monthly allowances? Was there any reason for the lower court to withhold its approval to the agreement? The allegation seems to imply an argument based on the denial of the basic right of the parties to enter into any kind of agreement neither forbidden by law nor against public morals.

The respondents alleged that the order of October 2, 1940, "was not intended to be a judicial mandate but merely an authority for the respondent Mary McDonald Bachrach to do certain acts which she could not perform under the law or under the provisions of the will of the deceased E. M. Bachrach without judicial authority." The allegation finds no support in the order wherein Mary McDonald Bachrach is "authorized and instructed forthwith to pay" the monthly allowances in question. Instructed means commanded. The inclusion of the last word negatives respondent’s allegation. Mary McDonald Bachrach did not appeal against the order. She cannot now deny validity to the command involved in the word "instructed." Besides, an "order", the title of the document, cannot be anything other than a mandate, compulsory by nature.

Impairment of her usufruct is also alleged by the administratrix. How can she now complain of the alleged impairment after alleging that she gave her conformity to the agreement, the basis of the order of October 2, 1940, as "an act of pure liberality on her part?" Was she not the owner of her usufruct? Could she not give away her usufruct or any part of it in favor of any person? If she disposed of a portion

of said usufruct for the benefit of the sisters of her deceased husband, without being subject to compulsion, or fraud, or mistake, but freely and conscientiously, there is no reason for her to complain now. When she gave her conformity to the petition upon which the order of October 2, 1940, was issued, she did it undoubtedly in the same spirit of charity with which her deceased husband, E. M. Bachrach, had written his will. She deserves commendation for the beauty of her act in seconding the attitude of helpfulness of her husband towards the petitioners. Charity is the choicest flower of the human spirit. While the late E. M. Bachrach and his widow were concerned in helping charitable hospitals, they did not forget the needy sisters of the deceased, as charity must start at home. We are not willing to help respondent withdraw now what she has given to petitioners voluntarily and with noble spirit of liberality.

Because petitioners perfected an appeal against the order of the lower court granting the administratrix the authority prayed for in her petition of February 19, 1947, to sell "the portion of the estate destined for charity," respondents complain that petitioners have improperly and against the principles of orderly procedure, split the order of October 2, 1940, and simultaneously perfected an ordinary appeal from a part of the order of February 27, 1947, and filed the present petition for a writ of mandamus in connection with the other part. The complaint is groundless. The present petition refers to the execution of the order of October 2, 1940, while the appeal in question has been filed against the order of February 27, 1947, granting the executrix’s petition dated February 19, 1947, the basic pleading in the record on appeal of March 31, 1947.

The last important argument of respondents is that no execution can validly be issued in connection with the order of October 2, 1940, because of the moratorium provided in Executive Order Nos. 25 and 32, which is still in full force and effect. The allegation cannot be entertained. The monthly allowances provided in the order of October 2, 1940, are not among the money obligations for which a moratorium has been decreed. The allowances in question are advances of an inheritance. They have been paid and are to be paid to petitioners as advances of the respective shares in the estate of their deceased brother E. M. Bachrach. They are not debts. The moratorium refers to debts. It is enough to look at the title of the executive orders in question.

Section 1 of Rule 39 provides:jgc:chanrobles.com.ph

"Execution as of right. — Execution shall issue upon a final judgment or order upon the expiration of the time to appeal when no appeal has been perfected."cralaw virtua1aw library

The provision is mandatory. There is no question that the order of October 2, 1940, has become final. Upon the facts in this case and the law applicable thereto, it is the ministerial duty of the lower court to order the execution of October 2, 1940. Failure to comply with said ministerial duty is a proper case for mandamus.

For all the foregoing, we grant the petition, and the respondent lower court is ordered to proceed with the execution of its order of October 2, 1940, and to issue the proper writs.

Paras, Bengzon and Tuason, JJ., concur.

Separate Opinions

FERIA, J.:

I concur in the result.

BRIONES, M., conforme:chanrob1es virtual 1aw library

Es incuestionable el derecho de las peticionarias a los adelantos devengados y acumulados durante la guerra, pero no cobrados a causa de la misma. Habiendose autorizado y ordenado el pago de dichos adelantos en virtud de auto judicial de fecha 2 de Octubre, 1940, previa conformidad expresa de la administradora recurrida, todos los beneficios y derechos derivados del mismo a favor de las peticionarias son validos y efectivos, por lo menos hasta que dicho auto se revoque o modifique mediante procedimientos apropiados al efecto. No hay nada en autos que demuestre que ese auto haya dejado alguna vez de estar en vigor. Consta, por el contrario, que cuando despues de la liberacion de Filipinas de la ocupacion japonesa las peticionarias trataron de cobrar lo que se les debia en virtud del referido auto, este tenia plena fuerza y efectividad.

Asi que sin necesidad de discutir si el auto en cuestion ha creado un estado juridico firme e irrevocable, o se halla en todo tiempo sujeto al control del Juzgado, susceptible de revocacion, alteracion o modificacion de acuerdo con las circunstancias y condiciones variables de la testamentaria, resulta evidente que no habiendose revocado o modificado la orden, la misma debe hacerse efectiva con efecto retroactivo. Lo contrario seria una mala practica procesal. El buen orden de los tramites y procedimientos judiciales exige que las ordenes validas y existentes se hagan efectivas.

Carece de importancia el que esto se llame orden de ejecucion, o lo que sea. Lo importante es que el Juzgado de cumplimiento a la orden; y si no lo hace, se le puede compeler mediante mandamus.

En el presente caso es posible que la administradora y usufructuaria tenga derecho a pedir que se le releve o dispense de los efectos de la orden de 2 de Octubre, 1940, si tuviere buenos fundamentos para ello; pero no solo no lo ha pedido formal y seriamente, de acuerdo con la regla y practica procesal pertinente, sino que, aunque lo hiciera, dudamos mucho que pueda prosperar el pedimento, constando, como consta, que la herencia yacente no solo no ha sufrido una dislocacion irremediable, sino que cuenta con fondos montantes a 351 mil pesos — muchisimo mas que suficientes para sufragar los adelantos en cuestion, sin detrimento del usufructo de la recurrida.

Ademas, si el Estado ya ha recibido y esta recibiendo sustanciales anticipos de la mitad que le corresponde en la herencia ¿por que las peticionarias, que son hermanas del testador, no han de tener, por lo menos, el mismo derecho?

Voto, por tanto, en favor de la concesion del recurso.

PABLO, M., disidente:chanrob1es virtual 1aw library

Disiento. En mi humilde opinion no procede el recurso de mandamus en el caso presente. La apelacion es el remedio adecuado para revisar la orden del Hon. Juez Barrios de 27 de Febrero de 1947 que desestimo la mocion de las recurrentes de 18 de Febrero del mismo año. La mocion de reconsideracion

esta bien denegada.

La orden de 2 de Octubre de 1940 que concede pension a las recurrentes (monthly allowance) no es irrevocable, que con el simple transcurso del tiempo ya es deber ministerial del Juzgado el cumplir o mandar cumplir por medio del Sheriff sus disposiciones. La naturaleza de la obligacion de dar pension esta sujeta en algunos casos a las fluctuaciones de la capacidad economica del obligado; en otros, en la necesidad del pensionista. Uno que presta pension de P200 mensuales, por ejemplo, que esta recibiendo en sus negocios un ingreso liquido de P2,000 no esta obligado a continuar concediendo la misma cantidad si, por las vicisitudes de una guerra, no obtiene ganancias sino que queda arruinado. Un niño recien nacido no ha de recibir una pension igual a la que recibiria si estuviese estudiando medicina. Aunque existiera una sentencia final sobre la prestacion de una pension, su cuantia no es irrevocable, ni firme: esta sujeta a varias circunstancias de cada caso particular y es el Juzgado el que tiene la facultad de de-terminar su aumento o diminucion, su pago completo o suspension, despues de oir a las partes interesadas. "Se concede considerable amplitud al juzgado de primera instancia para modificar o revocar sus propias ordenes, en tanto en cuanto esten pendientes las actuaciones en el mismo juzgado y se presenten en tiempo oportuno solicitudes o mociones para tales modificaciones por las partes interesadas." (Oñas contra Javillo y otros, 54 Jur. Fil., 643.)

Es absurda la teoria de que la orden de 2 de Octubre de 1940 dictada en la Testamentaria de E. M. Bachrach es ejecutoria y es deber ministerial del Juzgado el hacer cumplir sus disposiciones. El articulo 1. ° de la Regla 39 no es aplicable al caso presente; no es aplicable a las actuaciones sobre la administracion y distribucion de los bienes de difuntos; es solamente aplicable a los asuntos ordinarios.

Y si es final esa orden de 2 de Octubre de 1940, como si fuera una sentencia dictada en un asunto ordinario, entonces seria mas improcedente aún el mandamus. Desde la fecha de su promulgacion hasta el 27 de Febrero de 1947 en que se dicto la orden, cuya revocacion piden las recurrentes, han transcurrido ya seis años, cuatro meses y veinticinco dias. Despues del transcurso de cinco años ya no se puede pedir por medio de una simple mocion la ejecucucion de una sentencia. (Articulo 6, Regla 39.) .

Si es erronea o no la orden de 27 de Febrero de 1947, el error debe corregirse en una apelacion y no en un recurso especial de mandamus. Solamente se puede hacer uso de tal remedio cuando no existe en el curso ordinario de los procedimientos un medio facil, adecuado y expedito como la apelacion. (Herrera contra Barretto, 25 Jur. Fil., 253; Gala contra Cui y Rodriguez, 25 Jur. Fil., 540; Provincia de Tarlac contra Gale, 26 Jur. Fil., 356: Napa contra Weissenhagen, 29 Jur. Fil., 188; Gobierno de las Islas Filipinas contra Juez de Primera Instancia de Iloilo y Bantillo, 34 Jur. Fil., 166; Ello contra Juez de Primera Instancia de Antique, 49 Jur. Fil., 160; Santos contra Juzgado de Primera Instancia de Cavite, 49 Jur. Fil., 416; Regala contra Juez del Juzgado de Primera Instancia de Bataan, 77 Phil., 684; Ong Sit contra Piccio, 78 Phil., 785.)

Debe denegarse la solicitud.

HILADO, J., dissenting:chanrob1es virtual 1aw library

I am constrained to dissent from the foregoing opinion of the majority. In my view of the case, its final analysis boils down to the pivotal question of whether the petition dated September 16, 1940, filed by the instant petitioners (Sophie M. Seifert and Elisa Elianoff) and Ginda M. Skundina and Annie Bachrach, bearing the conformity of the instant respondent Mary McDonald Bachrach as "administratrix and usufructuary", as well as that of the Solicitor General, and transcribed on pages 3-5 of the majority

decision, became so binding upon the probate court after it granted said petition by its order of October 2, 1940, inserted on pages 1-3 of the same decision, that it became the ministerial duty of said court to subject the estate under administration absolutely and unqualifiedly to the payment of each and every monthly allowance specified in the said petition, regardless of the vicissitudes which the estate might go through before its final settlement and distribution after payment of "the debts, funeral charges, and expenses of administration, the allowances to the widow, and inheritance tax", or any of these concepts, as provided in Rule 91, section 1. The majority opinion enumerates these so-called allowances, quoting from the lower court’s order of October 2, 1940, as follows:chanrob1es virtual 1aw library

Sophie M. Seifert P500.00 monthly;

Ginda M. Skundina 250.00 monthly;

Elisa Elianoff 250.00 monthly;

Annie Bachrach Levine 250.00 monthly.

beginning July 1, 1940, through the war years, to the present, plus an additional P3,000 to Sophie M. Seifert "who is in poor health."

Paragraph VI of the petition alleges that of the above amounts the administratrix, who is the same widow of the deceased, did not pay petitioners the monthly allowances from January 1, 1942, to July 31, 1945, or a total of P21,500 for petitioner Sophie M. Seifert, and P10,750 for petitioner Elisa Elianoff. Roughly, this would comprise the war years when the business of the aforesaid estate was laid prostrate and its properties suffered heavy losses, which facts and circumstances must have been taken into consideration by the respondent judge Hon. Conrado Barrios, when by his order of February 27, 1947, he denied petitioners’ petition filed on February 19, 1947, excepting that part relating to the "allowances" of petitioners Sophie M. Seifert and Elisa Elianoff for the months of February and March, 1947, which said judge ordered to be paid "out of the available funds of the estate." These so-called allowances cannot be, in my opinion, other than advancements on account of petitioners’ hereditary portions. They are not real allowances in the sense of something which they have a right to receive from the estate pending actual delivery of their hereditary portions. There is no law that would give them that right, in view of the fact that they are not the widow nor the minor or incapacitated children, or members of the family, of the deceased.

Under section 684 of the Code of Civil Procedure, those entitled to such allowances were the widow and minor children of the deceased. In section 753 of the same Code these are referred to as "the family of the deceased." And under Rule 84, section 3, of the present Rules of Court those entitled to such allowances are "the widow and minor or incapacitated children" of the deceased. But even their right to receive the allowance is there provided to be made "under the direction of the court," which implies the continuing power of the probate court to control at least the amount of the allowances, according to the varied and unpredictable circumstances under which the estate may pass from time to time during the judicial administration thereof. The last cited provision ends, in referring to the allowances, with the important clause: "such allowances as are provided by law." And article 147 of the Civil Code ordains that the amount allowed for support, in the cases referred to in article 146, shall be reduced or increased proportionately according to the increase or reduction of the necessities of the recipient and the means of the person obliged to give it. Even if petitioners had been included in the cases referred to

in article 146 (which are those mentioned in article 143) of the Code — which would have given them a legal right to support — it would seem clear, even in that hypothesis, that the probate court, in granting the aforesaid petition of September 16, 1940, should not be deemed to have given up its legal authority and duty to exercise a continuing control over the amount of the allowance, as contemplated in said article 147 and as held in Gorayeb v. Hashim, 47 Phil., 87, 88, hereinafter more particularly discussed. Neither could said court have validly renounced such a vital part of its jurisdiction.

The pertinent legal provisions to which reference is thus made are found in articles 143, 146, and 147 of the Civil Code. Article 147 expressly provides that the amount allowed for support (allowance) in the cases to which article 146 refers shall be reduced or increased proportionately according to the increase or reduction of the necessities of the recipient and the means of the person obliged to give it. And it was upon such provision that this Court held in Gorayeb v. Hashim, supra, as follows:jgc:chanrobles.com.ph

"With reference to the amount of the maintenance allowance awarded by the court below, it may be observed that inasmuch as in respect to modifications, a judgment rendered in a suit for separate maintenance is not regarded as final and may be modified at any time for sufficient reasons upon application to the court having original jurisdiction, the appellate courts will, as a rule, not interfere with the findings and conclusions of the lower courts in regard to such allowances. Upon the evidence before us, we cannot say that in this case the allowance is so excessive as to call for our interference."cralaw virtua1aw library

Of course, while the case just cited was concerned with the allowance of a wife, the governing legal principle is the same in other cases of support comprised within the same codal articles providing for a wife’s support.

If even in cases of allowance or support provided for by law the competent court retains a continuing power in the proceedings or the case involving the same, to control and direct the giving thereof as regards its amount, and if "in respect to modifications, a judgment rendered in a suit for separate maintenance (the rule should be the same in an estate proceeding because the reason therefor is the same in both cases) is not regarded as final and may be modified at any time for sufficient reasons upon application to the court having original jurisdiction", why should the probate court in the instant case be denied that power or control when the allowances claimed are not even provided for by law, nor by will, nor by contract?

Title VI of Book I of the Civil Code does not contain any provision for such an allowance to parties situated as are petitioners herein. The will of the deceased E. M. Bachrach does not contain any provision therefor.

The majority opinion, however, holds that "the conformity or agreement of all the parties to the petition of September 16, 1940, gives it the nature of a contract." I cannot subscribe to this holding. The conformity of respondent to that petition was given in her double capacity of "administratrix and usufructuary." As administratrix, she was a mere agent of the probate court and was not acting in her personal capacity. And while as usufructuary she was acting in such personal capacity, in the very nature of things, the fundamental inquiry which now demands our consideration is whether the probate court’s granting of the aforesaid petition made it so binding upon said court that it has no other alternative but to order or authorize specific payment of all the monthly allowances mentioned in the petition — that the court by granting said petition lost all control over the matter and became thenceforward completely powerless to order a reduction of the so-called allowances even though facts and

circumstances subsequently supervening advised such reduction in the court’s judgment and discretion. Such a proposition amounts to nothingless than to assert that the probate court was by the will of the parties divested of a very substantial part of its jurisdiction and control over the estate. It is said that "the conformity or agreement of all the parties to the petition of September 16, 1940, gives it the nature of a contract." If we were to consider such an alleged contract to have been entered into by respondent, as judicial administratrix, it could not be her personal contract — if at all, it would be the contract of the probate court, of which she was a mere agent as such administratrix, and which granted the petition; but this is entirely unthinkable. A probate court, or any other court of justice for that matter, cannot, and never does, enter into any contract or agreement regarding its jurisdiction, much less to barter it away wholly or partially. And even if it should be said that respondent Mary McDonald Bachrach entered into that agreement or contract also as a usufructuary — although I do not admit even this — it is obvious that her will, as thus expressed therein, was and is subordinated to the superior will of the probate court. In other words, the fact that she, as usufructuary, may agree that she be authorized by the court to pay the so-called allowances, if the probate court, which is the guardian and keeper of the estate of the deceased, should at any time consider such burden as too onerous upon the estate for the reasons already stated above or any other than the court might have had, it is the will of said court that must prevail and not that of the usufructuary. Such a contingency concretely happened with respect to the "allowances" corresponding to the war years, which the court evidently considered unjustifiable due to the "reduction . . . of the means: of the estate by reason of the war; and the court in effect ordered a reduction of the "allowances" in general by refusing to order payment of those corresponding to said years.

Under clause eight of the will of the deceased (pp. 8-9, majority opinion) the testator’s legal heirs will have no right to receive the half of his estate, personal, real and otherwise, bequeathed to them, until his widow’s death — "upon the death of my beloved wife," is the testator’s textual phrase. During the judicial administration of the estate the probate court had the duty to give preferential consideration to the payment of the deceased’s debts and obligations, aside from the administration expenses. The probate court must have considered that during that period the estate might suffer losses which would diminish its assets, as it actually did during the late war when the business and properties of the estate suffered heavy losses and were subjected to a terrible financial frustration. Consequently, in the exercise of its control over the disbursements to be made, among other things, by way of the so-called allowances to the present petitioners, that court had to consider all these matters and even eventualities, and to act accordingly, not permitting the widow and the legal heirs to deviate it from the course most in consonance with the will of the testator and the law, in the court’s best judgment and discretion. And I am persuaded that this is exactly what Judge Barrios did when he denied authority for the payment of the so- called allowances corresponding to the war years. If we held the probate court, and after the closing of the estate proceeding, the widow, absolutely bound to the payment of each and all of the so- called monthly allowances to petitioners, regardless of losses in the meantime suffered by the estate, until the widow’s death it may happen that upon the arrival of the time predetermined by the testator — the demise of his widow — for his legal heirs to receive their portion in the estate, petitioners will have received, by way of "allowances", more than the portion intended by the testator, to the damage and prejudice of other legal heirs who have not given their conformity to what the majority opinion calls an "agreement" or a "contract" between petitioners and the widow.

Furthermore, a sounder construction of the petition of September 16, 1940, would be that whatever may have been agreed upon by the parties therein was without prejudice to the continuing control and power of the probate court over the subject-matter thereof under the applicable provisions of the law and rules.

Even through petitioners are among the "legal heirs" mentioned by the testator in the 8th clause of his will, under said clause they will not be entitled to take delivery of and receive their shares in the estate until the demise of the decedent’s widow. So that the so- called allowances, or more accurately, advancements spoken of in the court’s order of October 2, 1940, were not granted as a matter of right.

Consequently, I am of the considered opinion that the respondent judge acted entirely within the powers of the probate court that he was presiding in refusing to issue a writ of execution or otherwise to order payments, as prayed for by petitions, and in entering its order of February 27, 1947. And, as in Gorayeb v. Hashim, supra, I believe we should here apply the same rule that "the appellate courts will, as a rule, not interfere with the findings and conclusions of the lower courts in regard to such allowances." it is submitted that the instant petition should be denied.

MORAN, C.J. :chanrob1es virtual 1aw library

I concur in this opinion of Mr. Justice Hilado.

G.R. No. 152809 August 3, 2006

MERCEDES MORALIDAD, Petitioner,vs.SPS. DIOSDADO PERNES and ARLENE PERNES, Respondents.

D E C I S I O N

GARCIA, J.:

Under consideration is this petition for review on certiorari under Rule 45 of the Rules of Court to nullify and set aside the following issuances of the Court of Appeals (CA) in CA-G.R. SP No. 61610, to wit:

1. Decision dated September 27, 2001, 1 affirming an earlier decision of the Regional Trial Court (RTC) of Davao City which reversed that of the Municipal Trial Court in Cities (MTCC), Davao City, Branch 1, in an action for unlawful detainer thereat commenced by the petitioner against the herein respondents; and

2. Resolution dated February 28, 2002, 2 denying petitioner’s motion for reconsideration.

At the heart of this controversy is a parcel of land located in Davao City and registered in the name of petitioner Mercedes Moralidad under Transfer Certificate of Title (TCT) No. T-123125 of the Registry of Deeds of Davao City.

In her younger days, petitioner taught in Davao City, Quezon City and Manila. While teaching in Manila, she had the good fortune of furthering her studies at the University of Pennsylvania, U.S.A. While schooling, she was offered to teach at the Philadelphia Catholic Archdiocese, which she did for seven (7) years. Thereafter, she worked at the Mental Health Department of said University for the next seventeen (17) years.

During those years, she would come home to the Philippines to spend her two-month summer vacation in her hometown in Davao City. Being single, she would usually stay in Mandug, Davao City, in the house of her niece, respondent Arlene Pernes, a daughter of her younger sister, Rosario.

Back in the U.S.A. sometime in 1986, she received news from Arlene that Mandug at the outskirts of Davao City was infested by NPA rebels and many women and children were victims of crossfire between government troops and the insurgents. Shocked and saddened about this development, she immediately sent money to Araceli, Arlene’s older sister, with instructions to look for a lot in Davao City where Arlene and her family could transfer and settle down. This was why she bought the parcel of land covered by TCT No. T-123125.

Petitioner acquired the lot property initially for the purpose of letting Arlene move from Mandug to Davao City proper but later she wanted the property to be also available to any of her kins wishing to live and settle in Davao City. Petitioner made known this intention in a document she executed on July 21, 1986. 3 The document reads:

I, MERCEDES VIÑA MORALIDAD, of legal age, single, having been born on the 29th day of January, 1923, now actually residing at 8021 Lindbergh Boulevard, Philadelphia, Pennsylvania, U.S.A., wishes to convey my honest intention regarding my properties situated at Palm Village Subdivision, Bajada, Davao City, 9501, … and hereby declare:

1. That it is my desire that Mr. and Mrs. Diosdado M. Pernes may build their house therein and stay as long as they like;

2. That anybody of my kins who wishes to stay on the aforementioned real property should maintain an atmosphere of cooperation, live in harmony and must avoid bickering with one another;

3. That anyone of my kins may enjoy the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not inimical to the purpose thereof;

4. That anyone of my kins who cannot conform with the wishes of the undersigned may exercise the freedom to look for his own;

5. That any proceeds or income derived from the aforementioned properties shall be allotted to my nearest kins who have less in life in greater percentage and lesser percentage to those who are better of in standing.

xxx xxx xxx

Following her retirement in 1993, petitioner came back to the Philippines to stay with the respondents’ on the house they build on the subject property. In the course of time, their relations turned sour because members of the Pernes family were impervious to her suggestions and attempts to change certain practices concerning matters of health and sanitation within their compound. For instance, Arlene’s eldest son, Myco Pernes, then a fourth year veterinary medicine student, would answer petitioner back with clenched fist and at one time hurled profanities when she corrected him. Later, Arlene herself followed suit. Petitioner brought the matter to the local barangay lupon where she lodged a complaint for slander, harassment, threat and defamation against the Pernes Family. Deciding for

petitioner, the lupon apparently ordered the Pernes family to vacate petitioner’s property but not after they are reimbursed for the value of the house they built thereon. Unfortunately, the parties could not agree on the amount, thus prolonging the impasse between them.

Other ugly incidents interspersed with violent confrontations meanwhile transpired, with the petitioner narrating that, at one occasion in July 1998, she sustained cuts and wounds when Arlene pulled her hair, hit her on the face, neck and back, while her husband Diosdado held her, twisting her arms in the process.

Relations having deteriorated from worse to worst, petitioner, on July 29, 1998, lodged a formal complaint before the Regional Office of the Ombudsman for Mindanao, charging the respondent spouses, who were both government employees, with conduct unbecoming of public servants. This administrative case, however, did not prosper.

Then, on August 3, 1998, petitioner filed with the MTCC of Davao City an unlawful detainer suit against the respondent spouses. Petitioner alleged that she is the registered owner of the land on which the respondents built their house; that through her counsel, she sent the respondent spouses a letter demanding them to vacate the premises and to pay rentals therefor, which the respondents refused to heed.

In their defense, the respondents alleged having entered the property in question, building their house thereon and maintaining the same as their residence with petitioner’s full knowledge and express consent. To prove their point, they invited attention to her written declaration of July 21, 1986, supra, wherein she expressly signified her desire for the spouses to build their house on her property and stay thereat for as long as they like.

The MTCC, resolving the ejectment suit in petitioner’s favor, declared that the respondent spouses, although builders in good faith vis-à-vis the house they built on her property, cannot invoke their bona fides as a valid excuse for not complying with the demand to vacate. To the MTCC, respondents’ continued possession of the premises turned unlawful upon their receipt of the demand to vacate, such possession being merely at petitioner’s tolerance, and sans any rental. Accordingly, in its decision dated November 17, 1999, 4 the MTCC rendered judgment for the petitioner, as plaintiff therein, to wit:

WHEREFORE, judgment is hereby rendered in favor of herein plaintiff and against the defendants, as follows:

a) Directing the defendants, their agents and other persons acting on their behalf to vacate the premises and to yield peaceful possession thereof to plaintiff;

b) Ordering defendants to pay P2,000.00 a month from the filing of this complaint until they vacate premises;

c) Sentencing defendants to pay the sum of P120,000.00 5 as attorney’s fees and to pay the cost of suit.

Defendants counterclaim are hereby dismissed except with respect to the claim for reimbursement of necessary and useful expenses which should be litigated in an ordinary civil actions. (sic)

Dissatisfied, the respondent spouses appealed to the RTC of Davao City.

In the meantime, petitioner filed a Motion for Execution Pending Appeal. The motion was initially granted by the RTC in its Order of February 29, 2000, but the Order was later withdrawn and vacated by its subsequent Order dated May 9, 2000 6 on the ground that immediate execution of the appealed decision was not the prudent course of action to take, considering that the house the respondents constructed on the subject property might even be more valuable than the land site.

Eventually, in a decision 7 dated September 30, 2000, the RTC reversed that of the MTCC, holding that respondents’ possession of the property in question was not, as ruled by the latter court, by mere tolerance of the petitioner but rather by her express consent. It further ruled that Article 1678 of the Civil Code on reimbursement of improvements introduced is inapplicable since said provision contemplates of a lessor-lessee arrangement, which was not the factual milieu obtaining in the case. Instead, the RTC ruled that what governed the parties’ relationship are Articles 448 and 546 of the Civil Code, explaining thus:

Since the defendants-appellees [respondents] are admittedly possessors of the property by permission from plaintiff [petitioner], and builders in good faith, they have the right to retain possession of the property subject of this case until they have been reimbursed the cost of the improvements they have introduced on the property.

Indeed, this is a substantive right given to the defendants by law, and this right is superior to the procedural right to [sic] plaintiff to immediately ask for their removal by a writ of execution by virtue of a decision which as we have shown is erroneous, and therefore invalid. (Words in brackets supplied),

and accordingly dismissed petitioner’s appeal, as follows:

WHEREFORE, in view of the foregoing, the Decision appealed from is REVERSED and declared invalid. Consequently, the motion for execution pending appeal is likewise denied.

Counter-claims of moral and exemplary damages claimed by defendants are likewise dismissed. However, attorney’s fees in the amount of fifteen thousand pesos is hereby awarded in favor of defendants-appellants, and against plaintiffs.

SO ORDERED. 8

Therefrom, petitioner went to the CA in CA-G.R. SP No. 61610.

On September 27, 2001, the CA, while conceding the applicability of Articles 448 and 546 of the Civil Code to the case, ruled that it is still premature to apply the same considering that the issue of whether respondents’ right to possess a portion of petitioner’s land had already expired or was already terminated was not yet resolved. To the CA, the unlawful detainer suit presupposes the cessation of respondents’ right to possess. The CA further ruled that what governs the rights of the parties is the law on usufruct but petitioner failed to establish that respondents’ right to possess had already ceased. On this premise, the CA concluded that the ejectment suit instituted by the petitioner was premature. The appellate court thus affirmed the appealed RTC decision, disposing:

WHEREFORE, premises considered, the instant petition for review is hereby denied for lack of merit. Accordingly, the petitioner’s complaint for Unlawful Detainer is DISMISSED.

SO ORDERED.

With the CA’s denial of her motion for reconsideration in its Resolution of February 28, 2002, petitioner is now before this Court raising the following issues:

I. WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISMISSING THE UNLAWFUL DETAINER CASE FOR BEING PREMATURE WHICH DECISION IS NOT IN ACCORDANCE WITH LAW AND JURISPRUDENCE.

II. WHETHER OR NOT THE COURT OF APPEALS ERRED IN APPLYING ARTICLES 448 AND 546 AND THE PROVISIONS OF THE CODE ON USUFRUCT INSTEAD OF ARTICLE 1678 OF THE CIVIL CODE.

The Court rules for the petitioner.

The Court is inclined to agree with the CA that what was constituted between the parties herein is one of usufruct over a piece of land, with the petitioner being the owner of the property upon whom the naked title thereto remained and the respondents being two (2) among other unnamed usufructuaries who were simply referred to as petitioner’s kin. The Court, however, cannot go along with the CA’s holding that the action for unlawful detainer must be dismissed on ground of prematurity.

Usufruct is defined under Article 562 of the Civil Code in the following wise:

ART. 562. Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides.

Usufruct, in essence, is nothing else but simply allowing one to enjoy another’s property. 9 It is also defined as the right to enjoy the property of another temporarily, including both the jus utendi and the jus fruendi, 10 with the owner retaining the jus disponendi or the power to alienate the same. 11

It is undisputed that petitioner, in a document dated July 21, 1986, supra, made known her intention to give respondents and her other kins the right to use and to enjoy the fruits of her property. There can also be no quibbling about the respondents being given the right "to build their own house" on the property and to stay thereat "as long as they like." Paragraph #5 of the same document earmarks "proceeds or income derived from the aforementioned properties" for the petitioner’s "nearest kins who have less in life in greater percentage and lesser percentage to those who are better of (sic) in standing." The established facts undoubtedly gave respondents not only the right to use the property but also granted them, among the petitioner’s other kins, the right to enjoy the fruits thereof. We have no quarrel, therefore, with the CA’s ruling that usufruct was constituted between petitioner and respondents. It is thus pointless to discuss why there was no lease contract between the parties.

However, determinative of the outcome of the ejectment case is the resolution of the next issue, i.e., whether the existing usufruct may be deemed to have been extinguished or terminated. If the question is resolved in the affirmative, then the respondents’ right to possession, proceeding as it did from their right of usufruct, likewise ceased. In that case, petitioner’s action for ejectment in the unlawful detainer case could proceed and should prosper.

The CA disposed of this issue in this wise:

xxx Section 1, Rule 70 of the 1997 Rules of Civil Procedure, as amended, provides xxx

xxx xxx xxx

From the foregoing provision, it becomes apparent that for an action for unlawful detainer to prosper, the plaintiff [petitioner] needs to prove that defendants’ [respondents’] right to possess already expired and terminated. Now, has respondents’ right to possess the subject portion of petitioner’s property expired or terminated? Let us therefore examine respondents’ basis for occupying the same.

It is undisputed that petitioner expressly authorized respondents o occupy portion of her property on which their house may be built. Thus – "it is my desire that Mr. and Mrs. Diosdado M. Pernes may build their house therein and stay as long as they like." From this statement, it seems that petitioner had given the respondents the usufructuary rights over the portion that may be occupied by the house that the latter would build, the duration of which being dependent on how long respondents would like to occupy the property. While petitioner had already demanded from the respondents the surrender of the premises, this Court is of the opinion that the usufructuary rights of respondents had not been terminated by the said demand considering the clear statement of petitioner that she is allowing respondents to occupy portion of her land as long as the latter want to. Considering that respondents still want to occupy the premises, petitioner clearly cannot eject respondents. 12

We disagree with the CA’s conclusion of law on the matter. The term or period of the usufruct originally specified provides only one of the bases for the right of a usufructuary to hold and retain possession of the thing given in usufruct. There are other modes or instances whereby the usufruct shall be considered terminated or extinguished. For sure, the Civil Code enumerates such other modes of extinguishment:

ART. 603. Usufruct is extinguished:

(1) By the death of the usufructuary, unless a contrary intention clearly appears;

(2) By expiration of the period for which it was constituted, or by the fulfillment of any resolutory condition provided in the title creating the usufruct;

(3) By merger of the usufruct and ownership in the same person;

(4) By renunciation of the usufructuary;

(5) By the total loss of the thing in usufruct;

(6) By the termination of the right of the person constituting the usufruct;

(7) By prescription. (Emphasis supplied.)

The document executed by the petitioner dated July 21, 1986 constitutes the title creating, and sets forth the conditions of, the usufruct. Paragraph #3 thereof states "[T]hat anyone of my kins may enjoy

the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not inimical to the purpose thereof" (Emphasis supplied). What may be inimical to the purpose constituting the usufruct may be gleaned from the preceding paragraph wherein petitioner made it abundantly clear "that anybody of my kins who wishes to stay on the aforementioned property should maintain an atmosphere of cooperation, live in harmony and must avoid bickering with one another." That the maintenance of a peaceful and harmonious relations between and among kin constitutes an indispensable condition for the continuance of the usufruct is clearly deduced from the succeeding Paragraph #4 where petitioner stated "[T]hat anyone of my kins who cannot conform with the wishes of the undersigned may exercise the freedom to look for his own." In fine, the occurrence of any of the following: the loss of the atmosphere of cooperation, the bickering or the cessation of harmonious relationship between/among kin constitutes a resolutory condition which, by express wish of the petitioner, extinguishes the usufruct.

From the pleadings submitted by the parties, it is indubitable that there were indeed facts and circumstances whereby the subject usufruct may be deemed terminated or extinguished by the occurrence of the resolutory conditions provided for in the title creating the usufruct, namely, the document adverted to which the petitioner executed on July 21, 1986.

As aptly pointed out by the petitioner in her Memorandum, respondents’ own evidence before the MTCC indicated that the relations between the parties "have deteriorated to almost an irretrievable level." 13 There is no doubt then that what impelled petitioner to file complaints before the local barangay lupon, the Office of the Ombudsman for Mindanao, and this instant complaint for unlawful detainer before the MTCC is that she could not live peacefully and harmoniously with the Pernes family and vice versa.

Thus, the Court rules that the continuing animosity between the petitioner and the Pernes family and the violence and humiliation she was made to endure, despite her advanced age and frail condition, are enough factual bases to consider the usufruct as having been terminated.

To reiterate, the relationship between the petitioner and respondents respecting the property in question is one of owner and usufructuary. Accordingly, respondents’ claim for reimbursement of the improvements they introduced on the property during the effectivity of the usufruct should be governed by applicable statutory provisions and principles on usufruct. In this regard, we cite with approval what Justice Edgardo Paras wrote on the matter:

If the builder is a usufructuary, his rights will be governed by Arts. 579 and 580. In case like this, the terms of the contract and the pertinent provisions of law should govern (3 Manresa 215-216; se also Montinola vs. Bantug, 71 Phil. 449). 14 (Emphasis ours.)

By express provision of law, respondents, as usufructuary, do not have the right to reimbursement for the improvements they may have introduced on the property. We quote Articles 579 and 580 of the Civil Code:

Art. 579. The usufructuary may make on the property held in usufruct such useful improvements or expenses for mere pleasure as he may deem proper, provided he does not alter its form or substance; but he shall have no right to be indemnified therefor. He may, however, remove such improvements, should it be possible to do so without damage to the property. (Emphasis supplied.)

Art. 580. The usufructuary may set off the improvements he may have made on the property against any damage to the same.

Given the foregoing perspective, respondents will have to be ordered to vacate the premises without any right of reimbursement. If the rule on reimbursement or indemnity were otherwise, then the usufructuary might, as an author pointed out, improve the owner out of his property. 15 The respondents may, however, remove or destroy the improvements they may have introduced thereon without damaging the petitioner’s property.

Out of the generosity of her heart, the petitioner has allowed the respondent spouses to use and enjoy the fruits of her property for quite a long period of time. They opted, however, to repay a noble gesture with unkindness. At the end of the day, therefore, they really cannot begrudge their aunt for putting an end to their right of usufruct. The disposition herein arrived is not only legal and called for by the law and facts of the case. It is also right.

WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the CA are REVERSED and SET ASIDE. Accordingly, the decision of the MTCC is REINSTATED with MODIFICATION that all of respondents’ counterclaims are dismissed, including their claims for reimbursement of useful and necessary expenses.

No pronouncement as to costs.

SO ORDERED.

CANCIO C. GARCIAAssociate Justice

G.R. No. 107132. October 8, 1999]

MAXIMA HEMEDES, petitioner,  vs. THE HONORABLE COURT OF APPEALS, DOMINIUM REALTY AND CONSTRUCTION CORPORATION, ENRIQUE D. HEMEDES, and R & B INSURANCE CORPORATION, respondents.

[G.R. No. 108472. October 8, 1999]

R & B INSURANCE CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS DOMINIUM REALTY AND CONSTRUCTION CORPORATION, ENRIQUE D. HEMEDES and MAXIMA HEMEDES, respondents.

D E C I S I O N

GONZAGA_REYES, J.:

Assailed in these petitions for review on certiorari is the decision[1] of the eleventh division of the Court of Appeals in CA-G.R. CV No. 22010 promulgated on September 11, 1992 affirming in toto the decision of Branch 24 of the Regional Trial Court of Laguna in Civil Case No. B-1766 dated February 22, 1989,[2] and the resolution dated December 29, 1992 denying petitioner R & B Insurance Corporations (R & B Insurance) motion for reconsideration. As the factual antecedents and issues are the same, we shall decide the petitions jointly.

The instant controversy involves a question of ownership over an unregistered parcel of land, identified as Lot No. 6, plan Psu-111331, with an area of 21,773 square meters, situated in Sala, Cabuyao, Laguna. It was originally owned by the late Jose Hemedes, father of Maxima Hemedes and Enrique D. Hemedes. On March 22, 1947 Jose Hemedes executed a document entitled Donation Inter Vivos With Resolutory Conditions[3] whereby he conveyed ownership over the subject land, together with all its improvements, in favor of his third wife, Justa Kauapin, subject to the following resolutory conditions:

(a) Upon the death or remarriage of the DONEE, the title to the property donated shall revert to any of the children, or their heirs, of the DONOR expressly designated by the DONEE in a public document conveying the property to the latter; or

(b) In absence of such an express designation made by the DONEE before her death or remarriage contained in a public instrument as above provided, the title to the property shall automatically revert to the legal heirs of the DONOR in common.

Pursuant to the first condition abovementioned, Justa Kausapin executed on September 27, 1960 a Deed of Conveyance of Unregistered Real Property by Reversion [4] conveying to Maxima Hemedes the subject property under the following terms -

That the said parcel of land was donated unto me by the said Jose Hemedes, my deceased husband, in a deed of DONATION INTER VIVOS WITH RESOLUTORY CONDITIONS executed by the donor in my favor, and duly accepted by me on March 22, 1947, before Notary Public Luis Bella in Cabuyao, Laguna;

That the donation is subject to the resolutory conditions appearing in the said deed of DONATION INTER VIVOS WITH RESOLUTORY CONDITIONS, as follows:

(a) Upon the death or remarriage of the DONEE, the title to the property donated shall revert to any of the children, or their heirs, of the DONOR expressly designated by the DONEE in a public document conveying the property to the latter; or

(b) In absence of such an express designation made by the DONEE before her death or remarriage contained in a public instrument as above provided, the title to the property shall automatically revert to the legal heirs of the DONOR in common.

That, wherefore, in virtue of the deed of donation above mentioned and in the exercise of my right and privilege under the terms of the first resolutory condition therein contained and hereinabove reproduced, and for and in consideration of my love and affection, I do hereby by these presents convey, transfer, and deed unto my designee, MAXIMA HEMEDES, of legal age, married to RAUL

RODRIGUEZ, Filipino and resident of No. 15 Acacia Road, Quezon City, who is one of the children and heirs of my donor, JOSE HEMEDES, the ownership of, and title to the property hereinabove described, and all rights and interests therein by reversion under the first resolutory condition in the above deed of donation; Except the possession and enjoyment of the said property which shall remain vested in me during my lifetime, or widowhood and which upon my death or remarriage shall also automatically revert to, and be transferred to my designee, Maxima Hemedes.

Maxima Hemedes, through her counsel, filed an application for registration and confirmation of title over the subject unregistered land. Subsequently, Original Certificate of Title (OCT) No. (0-941) 0-198[5] was issued in the name of Maxima Hemedes married to Raul Rodriguez by the Registry of Deeds of Laguna on June 8, 1962, with the annotation that Justa Kausapin shall have the usufructuary rights over the parcel of land herein described during her lifetime or widowhood.

It is claimed by R & B Insurance that on June 2, 1964, Maxima Hemedes and her husband Raul Rodriguez constituted a real estate mortgage over the subject property in its favor to serve as security for a loan which they obtained in the amount of P6,000.00. On February 22, 1968, R & B Insurance extrajudicially foreclosed the mortgage since Maxima Hemedes failed to pay the loan even after it became due on August 2, 1964. The land was sold at a public auction on May 3, 1968 with R & B Insurance as the highest bidder and a certificate of sale was issued by the sheriff in its favor. Since Maxima Hemedes failed to redeem the property within the redemption period, R & B Insurance executed an Affidavit of Consolidation dated March 29, 1974 and on May 21, 1975 the Register of Deeds of Laguna cancelled OCT No. (0-941) 0-198 and issued Transfer Certificate of Title (TCT) No. 41985 in the name of R & B Insurance. The annotation of usufruct in favor of Justa Kausapin was maintained in the new title.[6]

Despite the earlier conveyance of the subject land in favor of Maxima Hemedes, Justa Kausapin executed a Kasunduan on May 27, 1971 whereby she transferred the same land to her stepson Enrique D. Hemedes, pursuant to the resolutory condition in the deed of donation executed in her favor by her late husband Jose Hemedes. Enrique D. Hemedes obtained two declarations of real property - in 1972, and again, in 1974, when the assessed value of the property was raised. Also, he has been paying the realty taxes on the property from the time Justa Kausapin conveyed the property to him in 1971 until 1979. In the cadastral survey of Cabuyao, Laguna conducted from September 8, 1974 to October 10, 1974, the property was assigned Cadastral No. 2990, Cad. 455-D, Cabuyao Cadastre, in the name of Enrique Hemedes. Enrique Hemedes is also the named owner of the property in the records of the Ministry of Agrarian Reform office at Calamba, Laguna.

On February 28, 1979, Enriques D. Hemedes sold the property to Dominium Realty and Construction Corporation (Dominium). On April 10, 1981, Justa Kausapin executed an affidavit affirming the conveyance of the subject property in favor of Enrique D. Hemedes as embodied in the Kasunduan dated May 27, 1971, and at the same time denying the conveyance made to Maxima Hemedes.

On May 14, 1981, Dominium leased the property to its sister corporation Asia Brewery, Inc. (Asia Brewery) who, even before the signing of the contract of lease, constructed two warehouses made of steel and asbestos costing about P10,000,000.00 each. Upon learning of Asia Brewerys constructions upon the subject property, R & B Insurance sent it a letter on March 16, 1981 informing the former of its ownership of the property as evidenced by TCT No. 41985 issued in its favor and of its right to appropriate the constructions since Asia Brewery is a builder in bad faith. On March 27, 1981, a conference was held between R & B Insurance and Asia Brewery but they failed to arrive at an amicable settlement.

On May 8, 1981, Maxima Hemedes also wrote a letter addressed to Asia Brewery wherein she asserted that she is the rightful owner of the subject property by virtue of OCT No. (0-941) 0-198 and that, as such, she has the right to appropriate Asia Brewerys constructions, to demand its demolition, or to compel Asia Brewery to purchase the land. In another letter of the same date addressed to R & B Insurance, Maxima Hemedes denied the execution of any real estate mortgage in favor of the latter.

On August 27, 1981, Dominium and Enrique D. Hemedes filed a complaint [7] with the Court of First Instance of Binan, Laguna for the annulment of TCT No. 41985 issued in favor of R & B Insurance and/or the reconveyance to Dominium of the subject property. Specifically, the complaint alleged that Dominium was the absolute owner of the subject property by virtue of the February 28, 1979 deed of sale executed by Enrique D. Hemedes, who in turn obtained ownership of the land from Justa Kausapin, as evidenced by the Kasunduan dated May 27, 1971. The plaintiffs asserted that Justa Kausapin never transferred the land to Maxima Hemedes and that Enrique D. Hemedes had no knowledge of the registration proceedings initiated by Maxima Hemedes.

After considering the merits of the case, the trial court rendered judgment on February 22, 1989 in favor of plaintiffs Dominium and Enrique D. Hemedes, the dispositive portion of which states

WHEREFORE, judgment is hereby rendered:

(a) Declaring Transfer Certificate of Title No. 41985 of the Register of Deeds of Laguna null and void and ineffective;

(b) Declaring Dominium Realty and Construction Corporation the absolute owner and possessor of the parcel of land described in paragraph 3 of the complaint;

(c) Ordering the defendants and all persons acting for and/or under them to respect such ownership and possession of Dominium Realty and Construction Corporation and to forever desist from asserting adverse claims thereon nor disturbing such ownership and possession; and

(d) Directing the Register of Deeds of Laguna to cancel said Transfer Certificate of Title No. 41985 in the name of R & B Insurance Corporation, and in lieu thereof, issue a new transfer certificate of title in the name of Dominium Realty and Construction Corporation. No pronouncement as to costs and attorneys fees.[8]

Both R & B Insurance and Maxima Hemedes appealed from the trial courts decision. On September 11, 1992 the Court of Appeals affirmed the assailed decision in toto and on December 29, 1992, it denied R & B Insurances motion for reconsideration. Thus, Maxima Hemedes and R & B Insurance filed their respective petitions for review with this Court on November 3, 1992 and February 22, 1993, respectively.

In G.R. No. 107132[9], petitioner Maxima Hemedes makes the following assignment of errors as regards public respondents ruling

I

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN APPLYING ARTICLE 1332 OF THE NEW CIVIL CODE IN DECLARING AS SPURIOUS THE DEED OF CONVEYANCE OF UNREGISTERED REAL PROPERTY BY REVERSION EXECUTED BY JUSTA KAUSAPIN IN FAVOR OF PETITIONER MAXIMA HEMEDES.

II

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING AS VOID AND OF NO LEGAL EFFECT THE KASUNDUAN DATED 27 MAY 1971 EXECUTED BY JUSTA KAUSAPIN IN FAVOR OF RESPONDENT ENRIQUE HEMEDES AND THE SALE OF THE SUBJECT PROPERTY BY RESPONDENT ENRIQUE HEMEDES IN FAVOR OF RESPONDENT DOMINIUM REALTY AND CONSTRUCTION CORPORATION.

III

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING RESPONDENTS ENRIQUE AND DOMINIUM IN BAD FAITH.

IV

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT ORIGINAL CERTIFICATE OF TITLE NO. (0-941) 0-198 ISSUED IN THE NAME OF PETITIONER MAXIMA HEMEDES NULL AND VOID.

V

RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT NO LOAN WAS OBTAINED BY PETITIONER MAXIMA HEMEDES FROM RESPONDENT R & B INSURANCE CORPORATION.

VI

RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT NO REAL ESTATE MORTGAGE OVER THE SUBJECT PROPERTY WAS EXECUTED BY PETITIONER MAXIMA HEMEDES IN FAVOR OF RESPONDENT R & B INSURANCE CORPORATION.

VII

RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT THE VALID TITLE COVERING THE SUBJECT PROPERTY IS THE ORIGINAL CERTIFICATE OF TITLE NO. (0-941) 0-198 IN THE NAME OF PETITIONER MAXIMA HEMEDES AND NOT THE TRANSFER CERTIFICATE OF TITLE (TCT) NO. 41985 IN THE NAME OF R & B INSURANCE CORPORATION.[10]

Meanwhile, in G.R. No. 108472[11], petitioner R & B Insurance assigns almost the same errors, except with regards to the real estate mortgage allegedly executed by Maxima Hemedes in its favor.Specifically, R & B Insurance alleges that:

I

RESPONDENT COURT ERRONEOUSLY ERRED IN APPLYING ARTICLE 1332 OF THE CIVIL CODE.

II

RESPONDENT COURT SERIOUSLY ERRED IN GIVING CREDENCE ON (sic) THE KASUNDUAN BY AND BETWEEN JUSTA KAUSAPIN AND ENRIQUE NOTWITHSTANDING THE FACT THAT JUSTA KAUSAPIN BY

WAY OF A DEED OF CONVEYANCE OF UNREGISTERED REAL PROPERTY BY REVERSION CEDED THE SUBJECT PROPERTY TO MAXIMA SOME ELEVEN (11) YEARS EARLIER.

III

RESPONDENT COURT SERIOUSLY ERRED IN GIVING CREDENCE ON (sic) THE AFFIDAVIT OF REPUDIATION OF JUSTA KAUSAPIN NOTWITHSTANDING THE FACT THAT SHE IS A BIAS (sic) WITNESS AND EXECUTED THE SAME SOME TWENTY-ONE (21) YEARS AFTER THE EXECUTION OF THE DEED OF CONVEYANCE IN FAVOR OF MAXIMA.

IV

RESPONDENT COURT SERIOUSLY ERRED IN NOT FINDING THAT THE COMPLAINT OF ENRIQUE AND DOMINIUM HAS PRESCRIBED AND/OR THAT ENRIQUE AND DOMINIUM WERE GUILTY OF LACHES.

V

RESPONDENT COURT SERIOUSLY ERRED IN FINDING R & B AS A MORTGAGEE NOT IN GOOD FAITH.

VI

RESPONDENT COURT SERIOUSLY ERRED IN NOT GRANTING THE DAMAGES PRAYED FOR BY R & B IN ITS COUNTERCLAIM AND CROSSCLAIM.[12]

The primary issue to be resolved in these consolidated petitions is which of the two conveyances by Justa Kausapin, the first in favor of Maxima Hemedes and the second in favor of Enrique D. Hemedes, effectively transferred ownership over the subject land.

The Register of Deeds of Laguna issued OCT No. (0-941) 0-198 in favor of Maxima Hemedes on the strength of the Deed of Conveyance of Unregistered Real Property by Reversion executed by Justa Kausapin. Public respondent upheld the trial courts finding that such deed is sham and spurious and has no evidentiary value under the law upon which claimant Maxima Hemedes may anchor a valid claim of ownership over the property. In ruling thus, it gave credence to the April 10, 1981 affidavit executed by Justa Kausapin repudiating such deed of conveyance in favor of Maxima Hemedes and affirming the authenticity of the Kasunduan in favor of Enrique D. Hemedes. Also, it considered as pivotal the fact that the deed of conveyance in favor of Maxima Hemedes was in English and that it was not explained to Justa Kausapin, although she could not read nor understand English; thus, Maxima Hemedes failed to discharge her burden, pursuant to Article 1332 of the Civil Code, to show that the terms thereof were fully explained to Justa Kausapin. Public respondent concluded by holding that the registration of the property on the strength of the spurious deed of conveyance is null and void and does not confer any right of ownership upon Maxima Hemedes. [13]

Maxima Hemedes argues that Justa Kausapins affidavit should not be given any credence since she is obviously a biased witness as it has been shown that she is dependent upon Enrique D. Hemedes for her daily subsistence, and she was most probably influenced by Enrique D. Hemedes to execute the Kasunduan in his favor. She also refutes the applicability of article 1332. It is her contention that for such a provision to be applicable, there must be a party seeking to enforce a contract; however, she is not enforcing the Deed of Conveyance of Unregistered Real Property by Reversion as her basis in claiming

ownership, but rather her claim is anchored upon OCT No. (0-941) 0-198 issued in her name, which document can stand independently from the deed of conveyance. Also, there exist various circumstances which show that Justa Kausapin did in fact execute and understand the deed of conveyance in favor of Maxima Hemedes. First, the Donation Intervivos With Resolutory Conditions executed by Jose Hemedes in favor of Justa Kausapin was also in English, but she never alleged that she did not understand such document. Secondly, Justa Kausapin failed to prove that it was not her thumbmark on the deed of conveyance in favor of Maxima Hemedes and in fact, both Enrique D. Hemedes and Dominium objected to the request of Maxima Hemedes counsel to obtain a specimen thumbmark of Justa Kausapin.[14]

Public respondents finding that the Deed of Conveyance of Unregistered Real Property By Reversion executed by Justa Kausapin in favor of Maxima Hemedes is spurious is not supported by the factual findings in this case.. It is grounded upon the mere denial of the same by Justa Kausapin. A party to a contract cannot just evade compliance with his contractual obligations by the simple expedient of denying the execution of such contract. If, after a perfect and binding contract has been executed between the parties, it occurs to one of them to allege some defect therein as a reason for annulling it, the alleged defect must be conclusively proven, since the validity and fulfillment of contracts cannot be left to the will of one of the contracting parties.[15]

Although a comparison of Justa Kausapins thumbmark with the thumbmark affixed upon the deed of conveyance would have easily cleared any doubts as to whether or not the deed was forged, the records do not show that such evidence was introduced by private respondents and the lower court decisions do not make mention of any comparison having been made. [16] It is a legal presumption that evidence willfully suppressed would be adverse if produced. [17] The failure of private respondents to refute the due execution of the deed of conveyance by making a comparison with Justa Kausapins thumbmark necessarily leads one to conclude that she did in fact affix her thumbmark upon the deed of donation in favor of her stepdaughter.

Moreover, public respondents reliance upon Justa Kausapins repudiation of the deed of conveyance is misplaced for there are strong indications that she is a biased witness. The trial court found that Justa Kausapin was dependent upon Enrique D. Hemedes for financial assistance. [18] Justa Kausapins own testimony attests to this fact -

Atty. Conchu:

Q: Aling Justa, can you tell the Honorable Court why you donated this particular property to Enrique Hemedes?

A: Because I was in serious condition and he was the one supporting me financially.

Q: As of today, Aling Justa are you continuing to receive any assistance from Enrique Hemedes?

A: Yes Sir.

(TSN pp. 19 and 23, November 17, 1981)[19]

Even Enrique Hemedes admitted that Justa Kausapin was dependent upon him for financial support. The transcripts state as follows:

Atty. Mora:

Now you said that Justa Kausapin has been receiving from you advances for food, medicine & other personal or family needs?

E. Hemedes:

A: Yes.

Q: Was this already the practice at the time this Kasunduan was executed?

A: No that was increased, no, no, after this document.

xxx xx xxx

Q: And because of these accommodations that you have given to Justa Kausapin; Justa Kausapin has in turn treated you very well because shes very grateful for that, is it not?

A: I think thats human nature.

Q: Answer me categorically, Mr. Hemedes shes very grateful?

A: Yes she might be grateful but not very grateful.

(TSN, p. 34, June 15, 1984)[20]

A witness is said to be biased when his relation to the cause or to the parties is such that he has an incentive to exaggerate or give false color to his statements, or to suppress or to pervert the truth, or to state what is false.[21] At the time the present case was filed in the trial court in 1981, Justa Kausapin was already 80 years old, suffering from worsening physical infirmities and completely dependent upon her stepson Enrique D. Hemedes for support. It is apparent that Enrique D. Hemedes could easily have influenced his aging stepmother to donate the subject property to him. Public respondent should not have given credence to a witness that was obviously biased and partial to the cause of private respondents. Although it is a well-established rule that the matter of credibility lies within the province of the trial court, such rule does not apply when the witness credibility has been put in serious doubt, such as when there appears on the record some fact or circumstance of weight and influence, which has been overlooked or the significance of which has been misinterpreted.[22]

Finally, public respondent was in error when it sustained the trial courts decision to nullify the Deed of Conveyance of Unregistered Real Property by Reversion for failure of Maxima Hemedes to comply with article 1332 of the Civil Code, which states:

When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.

Article 1332 was intended for the protection of a party to a contract who is at a disadvantage due to his illiteracy, ignorance, mental weakness or other handicap. [23] This article contemplates a situation wherein a contract has been entered into, but the consent of one of the parties is vitiated by mistake or fraud committed by the other contracting party.[24] This is apparent from the ordering of the provisions under Book IV, Title II, Chapter 2, section 1 of the Civil Code, from which article 1332 is taken. Article 1330 states that -

A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable.

This is immediately followed by provisions explaining what constitutes mistake, violence, intimidation, undue influence, or fraud sufficient to vitiate consent. [25] In order that mistake may invalidate consent, it

should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract. [26] Fraud, on the other hand, is present when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to. [27] Clearly, article 1332 assumes that the consent of the contracting party imputing the mistake or fraud was given, although vitiated, and does not cover a situation where there is a complete absence of consent.

In this case, Justa Kausapin disclaims any knowledge of the Deed of Conveyance of Unregistered Real Property by Reversion in favor of Maxima Hemedes. In fact, she asserts that it was only during the hearing conducted on December 7, 1981 before the trial court that she first caught a glimpse of the deed of conveyance and thus, she could not have possibly affixed her thumbmark thereto. [28] It is private respondents own allegations which render article 1332 inapplicable for it is useless to determine whether or not Justa Kausapin was induced to execute said deed of conveyance by means of fraud employed by Maxima Hemedes, who allegedly took advantage of the fact that the former could not understand English, when Justa Kausapin denies even having seen the document before the present case was initiated in 1981.

It has been held by this Court that mere preponderance of evidence is not sufficient to overthrow a certificate of a notary public to the effect that the grantor executed a certain document and acknowledged the fact of its execution before him. To accomplish this result, the evidence must be so clear, strong and convincing as to exclude all reasonable controversy as to the falsity of the certificate, and when the evidence is conflicting, the certificate will be upheld. [29] In the present case, we hold that private respondents have failed to produce clear, strong, and convincing evidence to overcome the positive value of the Deed of Conveyance of Unregistered Real Property by Reversion a notarized document. The mere denial of its execution by the donor will not suffice for the purpose.

In upholding the deed of conveyance in favor of Maxima Hemedes, we must concomitantly rule that Enrique D. Hemedes and his transferee, Dominium, did not acquire any rights over the subject property. Justa Kausapin sought to transfer to her stepson exactly what she had earlier transferred to Maxima Hemedes the ownership of the subject property pursuant to the first condition stipulated in the deed of donation executed by her husband. Thus, the donation in favor of Enrique D. Hemedes is null and void for the purported object thereof did not exist at the time of the transfer, having already been transferred to his sister.[30] Similarly, the sale of the subject property by Enrique D. Hemedes to Dominium is also a nullity for the latter cannot acquire more rights than its predecessor-in-interest and is definitely not an innocent purchaser for value since Enrique D. Hemedes did not present any certificate of title upon which it relied.

The declarations of real property by Enrique D. Hemedes, his payment of realty taxes, and his being designated as owner of the subject property in the cadastral survey of Cabuyao, Laguna and in the records of the Ministry of Agrarian Reform office in Calamba, Laguna cannot defeat a certificate of title, which is an absolute and indefeasible evidence of ownership of the property in favor of the person whose name appears therein.[31] Particularly, with regard to tax declarations and tax receipts, this Court has held on several occasions that the same do not by themselves conclusively prove title to land. [32]

We come now to the question of whether or not R & B Insurance should be considered an innocent purchaser of the land in question. At the outset, we note that both the trial court and appellate court found that Maxima Hemedes did in fact execute a mortgage over the subject property in favor of R & B Insurance. This finding shall not be disturbed because, as we stated earlier, it is a rule that the factual findings of the trial court, especially when affirmed by the Court of Appeals, are entitled to respect, and should not be disturbed on appeal.[33]

In holding that R & B Insurance is not a mortgagee in good faith, public respondent stated that the fact that the certificate of title of the subject property indicates upon its face that the same is subject to an encumbrance, i.e. usufructuary rights in favor of Justa Kausapin during her lifetime or widowhood, should have prompted R & B Insurance to ...investigate further the circumstances behind this encumbrance on the land in dispute, but which it failed to do. Also, public respondent considered against R & B Insurance the fact that it made it appear in the mortgage contract that the land was free from all liens, charges, taxes and encumbrances.[34]

R & B Insurance alleges that, contrary to public respondents ruling, the presence of an encumbrance on the certificate of title is not reason for the purchaser or a prospective mortgagee to look beyond the face of the certificate of title. The owner of a parcel of land may still sell the same even though such land is subject to a usufruct; the buyers title over the property will simply be restricted by the rights of the usufructuary. Thus, R & B Insurance accepted the mortgage subject to the usufructuary rights of Justa Kausapin. Furthermore, even assuming that R & B Insurance was legally obliged to go beyond the title and search for any hidden defect or inchoate right which could defeat its right thereto, it would not have discovered anything since the mortgage was entered into in 1964, while the Kasunduan conveying the land to Enrique D. Hemedes was only entered into in 1971 and the affidavit repudiating the deed of conveyance in favor of Maxima Hemedes was executed by Justa Kausapin in 1981.[35]

We sustain petitioner R & B Insurances claim that it is entitled to the protection of a mortgagee in good faith.

It is a well-established principle that every person dealing with registered land may safely rely on the correctness of the certificate of title issued and the law will in no way oblige him to go behind the certificate to determine the condition of the property. [36] An innocent purchaser for value[37] is one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim of another person.[38]

The annotation of usufructuary rights in favor of Justa Kausapin upon Maxima Hemedes OCT dose not impose upon R & B Insurance the obligation to investigate the validity of its mortgagors title.Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance.[39] The usufructuary is entitled to all the natural, industrial and civil fruits of the property[40]and may personally enjoy the thing in usufruct, lease it to another, or alienate his right of usufruct, even by a gratuitous title, but all the contracts he may enter into as such usufructuary shall terminate upon the expiration of the usufruct.[41]

Clearly, only the jus utendi and jus fruendi over the property is transferred to the usufructuary.[42] The owner of the property maintains the jus disponendi or the power to alienate, encumber, transform, and even destroy the same.[43] This right is embodied in the Civil Code, which provides that the owner of property the usufruct of which is held by another, may alienate it, although he cannot alter the propertys form or substance, or do anything which may be prejudicial to the usufructuary. [44]

There is no doubt that the owner may validly mortgage the property in favor of a third person and the law provides that, in such a case, the usufructuary shall not be obliged to pay the debt of the mortgagor, and should the immovable be attached or sold judicially for the payment of the debt, the owner shall be liable to the usufructuary for whatever the latter may lose by reason thereof. [45]

Based on the foregoing, the annotation of usufructuary rights in favor of Justa Kausapin is not sufficient cause to require R & B Insurance to investigate Maxima Hemedes title, contrary to public

respondents ruling, for the reason that Maxima Hemedes ownership over the property remained unimpaired despite such encumbrance. R & B Insurance had a right to rely on the certificate of title and was not in bad faith in accepting the property as a security for the loan it extended to Maxima Hemedes.

Even assuming in gratia argumenti that R & B Insurance was obligated to look beyond the certificate of title and investigate the title of its mortgagor, still, it would not have discovered any better rights in favor of private respondents. Enrique D. Hemedes and Dominium base their claims to the property upon the Kasunduan allegedly executed by Justa Kausapin in favor of Enrique Hemedes. As we have already stated earlier, such contract is a nullity as its subject matter was inexistent. Also, the land was mortgaged to R & B Insurance as early as 1964, while the Kasunduan was executed only in 1971 and the affidavit of Justa Kausapin affirming the conveyance in favor of Enrique D. Hemedes was executed in 1981. Thus, even if R & B Insurance investigated the title of Maxima Hemedes, it would not have discovered any adverse claim to the land in derogation of its mortgagors title. We reiterate that at no point in time could private respondents establish any rights or maintain any claim over the land.

It is a well-settled principle that where innocent third persons rely upon the correctness of a certificate of title and acquire rights over the property, the court cannot just disregard such rights. Otherwise, public confidence in the certificate of title, and ultimately, the Torrens system, would be impaired for everyone dealing with registered property would still have to inquire at every instance whether the title has been regularly or irregularly issued. [46] Being an innocent mortgagee for value, R & B Insurance validly acquired ownership over the property, subject only to the usufructuary rights of Justa Kausapin thereto, as this encumbrance was properly annotated upon its certificate of title.

The factual findings of the trial court, particularly when affirmed by the appellate court, carry great weight and are entitled to respect on appeal, except under certain circumstances. [47] One such circumstance that would compel the Court to review the factual findings of the lower courts is where the lower courts manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion.[48] Also, it is axiomatic that the drawing of the proper legal conclusions from such factual findings are within the peculiar province of this Court. [49]

As regards R & B Insurances prayer that Dominium be ordered to demolish the warehouses or that it be declared the owner thereof since the same were built in bad faith, we note that such warehouses were constructed by Asia Brewery, not by Dominium. However, despite its being a necessary party in the present case, the lower courts never acquired jurisdiction over Asia Brewery, whether as a plaintiff or defendant, and their respective decisions did not pass upon the constructions made upon the subject property. Courts acquire jurisdiction over a party plaintiff upon the filing of the complaint, while jurisdiction over the person of a party defendant is acquired upon the service of summons in the manner required by law or by his voluntary appearance. As a rule, if a defendant has not been summoned, the court acquires no jurisdiction over his person, and any personal judgment rendered against such defendant is null and void. [50] In the present case, since Asia Brewery is a necessary party that was not joined in the action, any judgment rendered in this case shall be without prejudice to its rights.[51]

As to its claim for moral damages, we hold that R & B Insurance is not entitled to the same for it has not alleged nor proven the factual basis for the same. Neither is it entitled to exemplary damages, which may only be awarded if the claimant is entitled to moral, temperate, liquidated or compensatory damages.[52] R & B Insurances claim for attorneys fees must also fail. The award of attorneys fees is the exception rather than the rule and counsels fees are not to be awarded every time a party wins a suit. Its award pursuant to article 2208 of the Civil Code demands factual, legal and equitable justification and

cannot be left to speculation and conjecture.[53] Under the circumstances prevailing in the instant case, there is no factual or legal basis for an award of attorneys fees.

WHEREFORE, the assailed decision of public respondent and its resolution dated February 22, 1989 are REVERSED. We uphold petitioner R & B Insurances assertion of ownership over the property in dispute, as evidenced by TCT No. 41985, subject to the usufructuary rights of Justa Kausapin, which encumbrance has been properly annotated upon the said certificate of title. No pronouncement as to costs.

SO ORDERED.

EASEMENT

MARGARITA F. CASTRO,

Petitioner,

- versus -

NAPOLEON A. MONSOD,

Respondent.

G.R. No. 183719

Present:

CARPIO, J.,

Chairperson,

NACHURA,

PERALTA,

ABAD, and

MENDOZA, JJ.

Promulgated:

February 2, 2011

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

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the

Decision[1] dated May 25, 2007 and the Resolution[2] dated July 14, 2008 of the Court of Appeals (CA) in

CA-G.R. CV No. 83973.

The antecedents of the case are as follows:

Petitioner is the registered owner of a parcel of land located on Garnet

Street, Manuela Homes, Pamplona, Las Pias City, and covered by Transfer Certificate of Title (TCT) No. T-

36071, with an area of one hundred thirty (130) square meters (sq.m.). Respondent, on the other hand,

is the owner of the property adjoining the lot of petitioner, located onLyra Street, Moonwalk Village,

Phase 2, Las Pias City. There is a concrete fence, more or less two (2) meters high,

dividing Manuela Homes from Moonwalk Village.[3]

On February 29, 2000, respondent caused the annotation of an adverse claim against sixty-five (65)

sq.m. of the property of petitioner covered by TCT No. T-36071. The adverse claim was filed without any

claim of ownership over the property. Respondent was merely asserting the existing legal easement of

lateral and subjacent support at the rear portion of his estate to prevent the property from collapsing,

since his property is located at an elevated plateau of fifteen (15) feet, more or less, above the level of

petitioners property.[4]Respondent also filed a complaint for malicious mischief and malicious

destruction before the office of the barangay chairman.[5]

In defiance, petitioner filed a complaint for damages with temporary restraining order/writ of

preliminary injunction before the Regional Trial Court (RTC) of Las Pias City. Petitioner also prayed that

the Register of Deeds of Las Pias City be ordered to cancel the annotation of the adverse claim on TCT

No. T-36071.[6]

Prior to the filing of the case before the RTC, there were deposits of soil and rocks about two (2) meters

away from the front door of the house of

petitioner. As such, petitioner was not able to park her vehicle at the dead-end portion of Garnet Street.

When petitioner noticed a leak that caused the front portion of her house to be slippery, she hired

construction workers to see where the leak was coming from. The workers had already started digging

when police officers sent by respondent came and stopped the workers from finishing their job. [7]

Petitioner averred that when she bought the property from Manuela Homes in 1994, there was no

annotation or existence of any easement over the property. Respondent neither asked permission nor

talked to her with regard to the use of 65 sq.m. of her property as easement. Upon learning of the

adverse claim, she felt disturbed and experienced sleepless nights for fear that she would not be able to

sell her property. Petitioner admitted that TCT No. 36071 does not cover the open space at the dead-

end portion of Garnet Street.[8]

For his part, respondent claimed that he and his family had been residing in Moonwalk Village since June

1984. Adjacent to his property is the land of petitioner in ManuelaHomes. When he bought the property

in 1983, the land elevation of Moonwalk Village was almost on the same level as Manuela Homes.

However, sometime in 1985 and 1986, Pilar Development Corporation, the developer

of Manuela Homes, bulldozed, excavated, and transferred portions of the elevated land to the lower

portions of Manuela Homes. Thus, Manuela Homes became lower than Moonwalk Village.[9]

Before the said excavation, respondent personally complained to Pilar

Development Corporation and was assured that, as provided by the National Building Code, an

embankment will be retained at the boundary of Manuela Homes and Moonwalk Village, which is more

or less fifteen (15) feet higher than Manuela Homes.[10]

Manuela Homes retained the embankment consisting of soil and rocks. Respondent had the open space

riprapped with stones as reinforcement against any potential soil erosion, earthquake, and possible

digging by any person.

Respondent asserted that the affidavit of adverse claim was for the annotation of the lateral and

subjacent easement of his property over the property of petitioner, in view of the latters manifest

determination to remove the embankment left by the developer of Manuela Homes.

On October 11, 2004, the RTC rendered a decision,[11] the dispositive portion of which reads:

WHEREFORE, premises considered, this court hereby renders judgment: (1) ordering the cancellation of [respondents] adverse claim at the back of Transfer Certificate of Title No. T-36071 at the expense of [respondent] Napoleon Monsod; (2) ordering the said [respondent] to pay the herein [petitioner] the amount of Php50,000.00 as moral damages; and (3) dismissing [petitioners] claim for actual damages, attorneys fees, litigation costs and costs of suit and [respondents] compulsory counterclaim for lack of merit.

SO ORDERED.[12]

The trial court ratiocinated that the adverse claim of respondent was non-registrable considering that

the basis of his claim was an easement and not an interest adverse to the registered owner, and neither

did he contest the title of petitioner. Furthermore, the adverse claim of respondent failed to comply

with the requisites provided under Section 70 of Presidential Decree No. 1529. [13]

On appeal, the CA reversed the decision of the trial court in a Decision [14] dated May 25, 2007,

the fallo of which reads:

WHEREFORE, premises considered, the instant appeal is GRANTED. The Decision of the Regional Trial Court, Branch 198, Las Pias City dated October 11, 2004 is REVERSED and SET ASIDE. The Court hereby orders the retention of the annotation at the back of Transfer Certificate of Title No. T-36071, not as an adverse claim, but a recognition of the existence of a legal easement of subjacent and lateral support constituted on the lengthwise or horizontal land support/embankment area of sixty-five (65) square meters, more or less, of the property of [petitioner] Margarita Castro. The writ of preliminary injunction issued by this Court on April 18, 2006 is hereby made permanent. [Petitioners] claim for damages is likewise DISMISSED.

SO ORDERED.[15]

The CA ruled that while respondents adverse claim could not be sanctioned because it did not fall under

the requisites for registering an adverse claim, the same might be duly annotated in the title as

recognition of the existence of a legal easement of subjacent and lateral support. The purpose of the

annotation was to prevent petitioner from making injurious excavations on the subject embankment as

to deprive the residential house and lot of respondent of its natural support and cause it to collapse.

Respondent only asked that petitioner respect the legal easement already existing thereon. [16]

On June 15, 2007, petitioner filed a motion for reconsideration. However, the CA denied the same in a

Resolution[17] dated July 14, 2008.

Hence, this petition.

The issue in this case is whether the easement of lateral and subjacent support exists on the subject

adjacent properties and, if it does, whether the same may be annotated at the back of the title of the

servient estate.

Article 437 of the Civil Code provides that the owner of a parcel of land is the owner of its surface and of

everything under it, and he can construct thereon any works, or make any plantations and excavations

which he may deem proper. However, such right of the owner is not absolute and is subject to the

following limitations: (1) servitudes or easements,[18] (2) special laws,[19] (3) ordinances,[20] (4) reasonable

requirements of aerial navigation,[21] and (5) rights of third persons.[22]

Respondent filed before the RTC an affidavit of adverse claim, the pertinent portions of which read:

5. That our adverse claim consists of rights of legal or compulsory easement of lateral and subjacent support (under the Civil Code) over a portion of the above-described property of owner Margarita F. Castro, that is, covering the lengthwise or horizontal land support/embankment area of sixty-five (65) square meters, more or less.

6. That said registered owner has attempted to destroy and/or remove portions of the existing lateral/subjacent land and cement supports adjoining the said two properties. In fact, a portion of the easement was already destroyed/removed, to the continuing prejudice of herein adverse claimant, and that a formal complaint against said registered owner was filed by the herein adverse claimant before the Office of the Barangay Chairman of Talon V, Las Pias City and the same proved futile. [23]

Respondents assertion that he has an adverse claim over the 65 sq.m. property of petitioner is

misplaced since he does not have a claim over the ownership of the land. The annotation of an adverse

claim over registered land under Section 70 of Presidential Decree 1529 [24] requires a claim on the title of

the disputed land. Annotation is done to apprise third persons that there is a controversy over the

ownership of the land and to preserve and protect the right of the adverse claimant during the

pendency of the controversy. It is a notice to third persons that any transaction regarding the disputed

land is subject to the outcome of the dispute.[25]

In reality, what respondent is claiming is a judicial recognition of the existence of the easement of

subjacent and lateral support over the 65 sq. m. portion of petitioners property covering the land

support/embankment area. His reason for the annotation is only to prevent petitioner from removing

the embankment or from digging on the property for fear of soil erosion that might weaken the

foundation of the rear portion of his property which is adjacent to the property of petitioner.

An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another

immovable belonging to a different owner.[26] There are two kinds of easements according to source. An

easement is established either by law or by will of the owners. [27] The courts cannot impose or constitute

any servitude where none existed. They can only declare its existence if in reality it exists by law or by

the will of the owners. There are therefore no judicial easements.[28]

Article 684 of the Civil Code provides that no proprietor shall make such excavations upon his land as to

deprive any adjacent land or building of sufficient lateral or subjacent support. An owner, by virtue of his

surface right, may make excavations on his land, but his right is subject to the limitation that he shall not

deprive any adjacent land or building of sufficient lateral or subjacent support. Between two adjacent

landowners, each has an absolute property right to have his land laterally supported by the soil of his

neighbor, and if either, in excavating on his own premises, he so disturbs the lateral support of his

neighbors land as to cause it, or, in its natural state, by the pressure of its own weight, to fall away or

slide from its position, the one so excavating is liable.[29]

In the instant case, an easement of subjacent and lateral support exists in favor of respondent. It was

established that the properties of petitioner and respondent adjoin each other. The residential house

and lot of respondent is located on an elevated plateau of fifteen (15) feet above the level of petitioners

property. The embankment and the riprapped stones have been in existence even before petitioner

became the owner of the property. It was proven that petitioner has been making excavations and

diggings on the subject embankment and, unless restrained, the continued excavation of the

embankment could cause the foundation of the rear portion of the house of respondent to collapse,

resulting in the destruction of a huge part of the family dwelling.[30]

We sustain the CA in declaring that a permanent injunction on the part of petitioner from making

injurious excavations is necessary in order to protect the interest of respondent. However, an

annotation of the existence of the subjacent and lateral support is no longer necessary. It exists whether

or not it is annotated or registered in the registry of property. A judicial recognition of the same already

binds the property and the owner of the same, including her successors-in-interest. Otherwise, every

adjoining landowner would come to court or have the easement of subjacent and lateral support

registered in order for it to be recognized and respected.

WHEREFORE, in view of the foregoing, the Decision dated May 25, 2007 and the Resolution dated July

14, 2008 of the Court of Appeals in CA-G.R. CV No. 83973 are hereby AFFIRMED WITH

MODIFICATION that the annotation at the back of Transfer Certificate of Title No. T-36071, recognizing

the existence of the legal easement of subjacent and lateral support constituted on the lengthwise or

horizontal land support/embankment area of sixty-five (65) square meters, more or less, of the property

of petitioner Margarita F. Castro, is hereby ordered removed.

SO ORDERED.

G.R. No. 177807/G.R. No. 177933 Case DigestG.R. No. 177807/G.R. No. 177933, October 11, 2011Emilio Gancaycovs City Government of Quezon City and MMDAPonente: Sereno

Facts:

In 1950s, retired justice Emilio Gancayco bought a parcel of land located in EDSA. Then on March 1956, Quezon City Council issued Ordinance No. 2904 requiring the construction of arcades for commercial buildings to be constructed. At the outset, it bears emphasis that at the time Ordinance No. 2904 was passed by the city council, there was yet no building code passed by the national legislature. Thus, the regulation of the construction of buildings was left to the discretion of local government units. Under this particular ordinance, the city council required that the arcade is to be created by constructing the wall of the ground floor facing the sidewalk a few meters away from the property line. Thus, the building owner is not allowed to construct his wall up to the edge of the property line, thereby creating a space or shelter under the first floor. In effect, property owners relinquish the use of the space for use as an arcade for pedestrians, instead of using it for their own purposes.

The ordinance covered the property of Justice Gancayco. Subsequently, sometime in 1965, Justice Gancayco sought the exemption of a two-storey building being constructed on his property from the application of Ordinance No. 2904 that he be exempted from constructing an arcade on his property.On 2 February 1966, the City Council acted favorably on Justice Gancayco’s request and issued Resolution No. 7161, S-66, “subject to the condition that upon notice by the City Engineer, the owner shall, within reasonable time, demolish the enclosure of said arcade at his own expense when public interest so demands.”

Decades after, in March 2003, MMDA conducted operations to clear obstructions along EDSA, in consequence, they sent a notice of demolition to Justice Gancayco alleging that a portion of his building violated the National Building Code.

Gancayco did not comply with the notice and filed a petition for TRO with the RTC Quezon City to prohibit the MMDA from demolishing his property. The RTC rendered its Decision on 30 September 2003 in favor of Justice Gancayco. It held that the questioned ordinance was unconstitutional, ruling that it allowed the taking of private property for public use without just compensation. The RTC said that

because 67.5 square meters out of Justice Gancayco’s 375 square meters of property were being taken without compensation for the public’s benefit, the ordinance was confiscatory and oppressive. It likewise held that the ordinance violated owners’ right to equal protection of laws.

MMDA appealed with the CA. CA held that the MMDA went beyond its powers when it demolished the subject property. It further found that Resolution No. 02-28 only refers to sidewalks, streets, avenues, alleys, bridges, parks and other public places in Metro Manila, thus excluding Justice Gancayco’s private property. Lastly, the CA stated that the MMDA is not clothed with the authority to declare, prevent or abate nuisances.

Issues: (1) WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM ASSAILING THE VALIDITY OF ORDINANCE NO. 2904. (2) WHETHER OR NOT ORDINANCE NO. 2904 IS CONSTITUTIONAL.(3) WHETHER OR NOT THE WING WALL OF JUSTICE GANCAYCO’S BUILDING IS A PUBLIC NUISANCE. (4) WHETHER OR NOT THE MMDA LEGALLY DEMOLISHED THE PROPERTY OF JUSTICE GANCAYCO.

Ruling:

(1) We find that petitioner was not guilty of estoppel. When it made the undertaking to comply with all issuances of the BIR, which at that time it considered as valid, petitioner did not commit any false misrepresentation or misleading act.(2) Justice Gancayco may not question the ordinance on the ground of equal protection when he also benefited from the exemption. It bears emphasis that Justice Gancayco himself requested for an exemption from the application of the ordinance in 1965 and was eventually granted one. Moreover, he was still enjoying the exemption at the time of the demolition as there was yet no valid notice from the city engineer. Thus, while the ordinance may be attacked with regard to its different treatment of properties that appears to be similarly situated, Justice Gancayco is not the proper person to do so.(3) The fact that in 1966 the City Council gave Justice Gancayco an exemption from constructing an arcade is an indication that the wing walls of the building are not nuisances per se. The wing walls do not per se immediately and adversely affect the safety of persons and property. The fact that an ordinance may declare a structure illegal does not necessarily make that structure a nuisance. Clearly, when Justice Gancayco was given a permit to construct the building, the city council or the city engineer did not consider the building, or its demolished portion, to be a threat to the safety of persons and property. This fact alone should have warned the MMDA against summarily demolishing the structure.

Sangguniang Bayan cannot declare a particular thing as a nuisance per se and order its condemnation. It does not have the power to find, as a fact, that a particular thing is a nuisance when such thing is not a nuisance per se; nor can it authorize the extrajudicial condemnation and destruction of that as a nuisance which in its nature, situation or use is not such. Those things must be determined and resolved in the ordinary courts of law.

MMDA illegally demolished Gancayco's property.

CRISPIN DICHOSO, JR.,

EVELYN DICHOSO VALDEZ, and ROSEMARIE DICHOSO PE BENITO,

G.R. No. 180282

Present:

Petitioners,

- versus -

PATROCINIO L. MARCOS,

Respondent.

CARPIO, J.,

Chairperson,

NACHURA,

PERALTA,

ABAD, and

MENDOZA, JJ.

Promulgated:

April 11, 2011

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

DECISION

NACHURA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse and set

aside the Court of Appeals (CA) Decision[1] dated January 31, 2007 and Resolution[2] dated October 23,

2007 in CA-G.R. CV No. 85471. The assailed Decision reversed and set aside the July 15, 2005

decision[3] of the Regional Trial Court (RTC) of Laoag City, Branch 14, in Civil Case No. 12581-14; while the

assailed Resolution denied the Motion for Reconsideration filed by petitioners Crispin Dichoso, Jr.,

Evelyn Dichoso Valdez, and Rosemarie Dichoso Pe Benito.

The facts of the case, as culled from the records, are as follows:

On August 2, 2002, petitioners filed a Complaint for Easement of Right of Way [4] against respondent

Patrocinio L. Marcos. In their complaint, petitioners alleged that they are the owners of Lot No. 21553 of

the Cadastral Survey of Laoag City, covered by Transfer Certificate of Title No. T-31219; while

respondent is the owner of Lot No. 1. As petitioners had no access to a public road to and from their

property, they claimed to have used a portion of Lot No. 1 in accessing the road since 1970. Respondent,

however, blocked the passageway with piles of sand. Though petitioners have been granted another

passageway by the spouses Benjamin and Sylvia Arce (Spouses Arce), the owners of another adjacent

lot, designated as Lot No. 21559-B, the former instituted the complaint before the RTC and prayed that:

WHEREFORE, it is respectfully prayed of this Honorable Court that judgment be rendered:

1. Granting the plaintiffs right of way over an area of 54 square meters more or less of Lot 01 by paying the defendant the amount of P54,000.00, and that the right be annotated on defendants title;

2. Ordering the defendant to pay the plaintiffs the sum of P30,000.00 as damages for attorneys fees and costs of suit;

Other reliefs, just and equitable under the premises, are likewise sought. [5]

Instead of filing an Answer, respondent moved [6] for the dismissal of the complaint on the ground of lack

of cause of action and noncompliance with the requisite certificate of non-forum shopping.

During the hearing on respondents motion to dismiss, the parties agreed that an ocular inspection of the

subject properties be conducted. After the inspection, the RTC directed the parties to submit their

respective position papers.

In a resolution[7] dated May 12, 2004, the RTC denied respondents motion to dismiss and required the

latter to answer petitioners complaint.

In his Answer,[8] respondent denied that he allowed anybody to use Lot No. 1 as passageway. He stated

that petitioners claim of right of way is only due to expediency and not necessity. He also maintained

that there is an existing easement of right of way available to petitioners granted by the Spouses Arce.

Thus, there is no need to establish another easement over respondents property.

In an Order[9] dated July 6, 2005, the RTC declared that respondents answer failed to tender an issue,

and opted to render judgment on the pleadings and thus deemed the case submitted for decision.

On July 15, 2005, the RTC rendered a decision [10] in favor of petitioners, the dispositive portion of which

reads, as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered, as follows:

1. granting plaintiffs a right of way over an area of 54 square meters more or less over Lot 01 owned by defendant Patrocinio L. [Marcos] appearing in the Laoag City Assessors sketch (Annex A) found on page 28 of the record of the case;

2. ordering plaintiffs to pay defendant the amount of P54,000.00 as proper indemnity; and

3. ordering the Register of Deeds of Laoag City to duly annotate this right of way on defendants title to the property.

SO ORDERED.[11]

The RTC found that petitioners adequately established the requisites to justify an easement of

right of way in accordance with Articles 649 and 650 of the Civil Code. The trial court likewise declared

petitioners in good faith as they expressed their willingness to pay proper indemnity. [12]

On appeal, the CA reversed and set aside the RTC decision and consequently dismissed

petitioners complaint. Considering that a right of way had already been granted by the (other) servient

estate, designated as Lot No. 21559-B and owned by the Spouses Arce, the appellate court concluded

that there is no need to establish an easement over respondents property. The CA explained that, while

the alternative route through the property of the Spouses Arce is longer and circuitous, said access road

is adequate. It emphasized that the convenience of the dominant estate is never the gauge for the grant

of compulsory right of way. Thus, the opening of another passageway is unjustified. [13]

Aggrieved, petitioners come before this Court, raising the following issues:

I.

CAN PETITIONERS BE ENTITLED TO A GRANT OF LEGAL EASEMENT OF RIGHT OF WAY FROM THEIR LANDLOCKED PROPERTY THROUGH THE PROPERTY OF PRIVATE RESPONDENT WHICH IS THE SHORTEST ROUTE IN GOING TO AND FROM THEIR PROPERTY TO THE PUBLIC STREET AND WHERE THEY USED TO PASS?

II.

CAN RESPONDENT REFUSE TO GRANT A RIGHT OF WAY ON THE DESIRED PASSAGEWAY WHICH HE CLOSED SINCE THERE IS ANOTHER PASSAGEWAY WHICH IS MORE CIRCUITOUS AND BURDENSOME AND IS BELATEDLY OFFERED UNTO PETITIONERS?

III.

CAN PETITIONERS BE COMPELLED TO AVAIL OF A LEGAL EASEMENT OF RIGHT OF WAY THROUGH THE PROPERTY OF ARCE WHICH WAS BELATEDLY OFFERED BUT HAS BEEN FORECLOSED BY THE BANK AND WHEREIN THE LATTER IS NOT A PARTY TO THE CASE?[14]

The petition is without merit.

It is already a well-settled rule that the jurisdiction of this Court in cases brought before it from

the CA by virtue of Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings of fact of

the CA are conclusive upon this Court. There are, however, recognized exceptions to the foregoing rule,

namely:

(1) when the findings are grounded entirely on speculation, surmises, or conjectures;

(2) when the inference made is manifestly mistaken, absurd, or impossible;

(3) when there is grave abuse of discretion;

(4) when the judgment is based on a misapprehension of facts;

(5) when the findings of fact are conflicting;

(6) when, in making its findings, the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee;

(7) when the findings are contrary to those of the trial court;

(8) when the findings are conclusions without citation of specific evidence on which they are based;

(9) when the facts set forth in the petition, as well as in the petitioner's main and reply briefs, are not disputed by the respondent; and

(10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.[15]

The present case falls under the 7th exception, as the RTC and the CA arrived at conflicting

findings of fact and conclusions of law.

The conferment of a legal easement of right of way is governed by Articles 649 and 650 of the

Civil Code, quoted below for easy reference:[16]

Article 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied and the amount of the damage caused to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by others and for the gathering of its crops through the servient estate without a permanent way, the indemnity shall consist in the payment of the damages caused by such encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the proprietors own acts.

Article 650. The easement of right of way shall be established at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest.

To be entitled to an easement of right of way, the following requisites should be met:

1. The dominant estate is surrounded by other immovables and has no adequate outlet to a public highway;

2. There is payment of proper indemnity;

3. The isolation is not due to the acts of the proprietor of the dominant estate; and

4. The right of way claimed is at the point least prejudicial to the servient estate; and insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest.[17]

Petitioners may be correct in the theoretical reading of Articles 649 and 650 of the Civil Code,

but they nevertheless failed to show sufficient factual evidence to satisfy the above-enumerated

requirements.[18]

It must be stressed that, by its very nature, and when considered with reference to the

obligations imposed on the servient estate, an easement involves an abnormal restriction on the

property rights of the servient owner and is regarded as a charge or encumbrance on the servient

estate. It is incumbent upon the owner of the dominant estate to establish by clear and convincing

evidence the presence of all the preconditions before his claim for easement of right of way may be

granted.[19] Petitioners failed in this regard.

Admittedly, petitioners had been granted a right of way through the other adjacent lot owned

by the Spouses Arce. In fact, other lot owners use the said outlet in going to and coming from the public

highway. Clearly, there is an existing outlet to and from the public road.

However, petitioners claim that the outlet is longer and circuitous, and they have to pass

through other lots owned by different owners before they could get to the highway. We find petitioners

concept of what is adequate outlet a complete disregard of the well-entrenched doctrine that in order

to justify the imposition of an easement of right of way, there must be real, not fictitious or artificial,

necessity for it. Mere convenience for the dominant estate is not what is required by law as the basis of

setting up a compulsory easement. Even in the face of necessity, if it can be satisfied without imposing

the easement, the same should not be imposed.[20]

We quote with approval the CAs observations in this wise:

As it shows, [petitioners] had been granted a right of way through the adjacent estate of Spouses Arce before the complaint below was even filed. [Respondent] alleged that this right of way is being used by the other estates which are similarly situated as [petitioners]. [Petitioners] do not dispute this fact. There is also a reason to believe that this right of way is Spouses Arces outlet to a public road since their property, as it appears from the Sketch Map, is also surrounded by other estates. The fact that Spouses Arce are not insisting on a right of way through respondents property, although an opening on the latters property is undoubtedly the most direct and shortest distance to

P. Gomez St. from the formers property, bolsters our conviction that they have adequate outlet to the highway which they are now likewise making available to [petitioners].

The convenience of the dominant estate has never been the gauge for the grant of compulsory

right of way. To be sure, the true standard for the grant of the legal right is adequacy. Hence, when

there is already an existing adequate outlet from the dominant estate to a public highway, as in this

case, even when the said outlet, for one reason or another, be inconvenient, the need to open up

another servitude is entirely unjustified.[21]

Thus, in Cristobal v. CA,[22] the Court disallowed the easement prayed for because an outlet

already exists which is a path walk located at the left side of petitioners property and which is connected

to a private road about five hundred (500) meters long. The private road, in turn, leads to Ma. Elena

Street, which is about 2.5 meters wide, and finally, to Visayas Avenue. This outlet was determined by the

Court to be sufficient for the needs of the dominant estate.

Also in Floro v. Llenado,[23] we refused to impose a right of way over petitioners property

although private respondents alternative route was admittedly inconvenient because he had to traverse

several ricelands and rice paddies belonging to different persons, not to mention that said passage is

impassable during the rainy season.

And in Ramos v. Gatchalian Realty, Inc.,[24] this Court refused to grant the easement prayed for

even if petitioner had to pass through lots belonging to other owners, as temporary ingress and egress,

which lots were grassy, cogonal, and greatly inconvenient due to flood and mud because such grant

would run counter to the prevailing jurisprudence that mere convenience for the dominant estate does

not suffice to serve as basis for the easement.[25]

WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated

January 31, 2007 and Resolution dated October 23, 2007 in CA-G.R. CV No. 85471 are AFFIRMED.

SO ORDERED.

APOLINARDITO C. QUINTANILLA G.R. No. 160613

and PERFECTA C. QUINTANILLA,

Petitioners,

-versus-

PEDRO ABANGAN and

DARYL'S COLLECTION INTL. INC.,

Respondents.

Present:

YNARES-SANTIAGO, J.,

Chairperson,

AUSTRIA-MARTINEZ,

CORONA,*

NACHURA, and

REYES, JJ.

Promulgated:

February 12, 2008

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

RESOLUTION

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Civil Procedure

seeking the reversal of the Court of Appeals (CA) Decision [2] datedApril 21, 2003, which affirmed the

Decision[3] of the Regional Trial Court (RTC), Branch 57 of Cebu City, dated June 21, 2000.

This controversy flows from a case for Easement of Right of Way filed by petitioner Apolinardito C.

Quintanilla (Apolinardito) and his mother, petitioner Perfecta C. Quintanilla (Perfecta) against

respondent Pedro Abangan (Pedro) and respondent Daryl's Collection International, Inc. (DARYL'S).

Sometime in the 1960s, Perfecta bought Lot No. 3771-B-1-A, with an area of 2,244 square meters,

located at Inayawan, Cebu City (the dominant estate) from one Dionisio Abasolo, who formerly owned

all the properties therein. Thereafter, Perfecta donated the dominant estate to Apolinardito, who is now

the registered owner thereof.[4] Petitioners own QC Rattan Inc., a domestic corporation engaged in the

manufacture and export of rattan-made furniture. In the conduct of their business, they use vans to haul

and transport raw materials and finished products. As they wanted to expand their business and

construct a warehouse on their property (the dominant estate), they asked for a right of way from Pedro

sometime in April 1994.

However, it appears that Pedro, who was the owner of Lot No. 3771-A-1, containing an area of 1,164

square meters[5] (the servient estate) and a lot near the dominant estate, sold the same to DARYL'S on

March 24, 1994,[6] and thereafter, DARYL'S constructed a warehouse over the servient estate, enclosing

the same with a concrete fence.

Petitioners, thus, sought the imposition of an easement of right of way, six (6) meters in width, or a total

area of 244 square meters, over the servient estate.

On June 21, 2000, the RTC dismissed the case for lack of merit. The RTC held that petitioners failed to

establish that the imposition of the right of way was the least prejudicial to the servient estate. The RTC

noted that there is already a concrete fence around the area and that six (6) meters from the said

concrete fence was a concrete warehouse. Thus, substantial damage and substantial reduction in area

would be caused the servient estate. Moreover, the RTC observed that petitioners' insistence on passing

through the servient estate would make for easy and convenient access to the main thoroughfare for

their vans. Otherwise, if the right of way were to be constituted on any of the other surrounding

properties, their vans would have to make a turn. On this premise, the RTC opined that mere

convenience to the dominant estate was not necessarily the basis for setting up a compulsory easement

of right of way.

Aggrieved, petitioners went to the CA on appeal.

In its Decision dated April 21, 2003, the CA affirmed the RTC Decision, holding that the criterion of least

prejudice to the servient estate must prevail over the shortest distance. A longer way may, thus, be

established to avoid injury to the servient tenement, such as when there are constructions or walls

which can be avoided by a round-about way, [7] as in this case. Petitioners filed a Motion for

Reconsideration,[8] but the same was denied in the CA Resolution[9] dated September 24, 2003.

Hence, the instant petition based on the following grounds:

a) IN A COMPULSORY EASEMENT OF RIGHT OF WAY, AS SET FORTH IN THE PRECONDITIONS UNDER ARTICLES 649[10] AND 650[11] OF THE NEW CIVIL CODE, THE DETERMINATION OF THE LEAST PREJUDICIAL OR LEAST DAMAGE TO THE SERVIENT ESTATE SHOULD BE AT THE TIME OF THE FILING OF THE ORIGINAL COMPLAINT AND NOT AFTER THE FILING, ESPECIALLY WHEN THE OWNER OF THE SERVIENT ESTATE IS GUILTY OF ABUSE OF RIGHTS CONSIDERED AS THE GREATEST OF ALL POSSIBLE WRONGS OR BAD FAITH BY CONSTRUCTING A CONCRETE FENCE AND WAREHOUSE THEREON THROUGH MISREPRESENTATION TO THE OFFICE OF THE CEBU CITY BUILDING OFFICIAL THAT IT HAD GRANTED A RIGHT OF WAY OF SIX (6) METERS TO PETITIONERS; AND

b) WHETHER OR NOT COMPLIANCE WITH THE PRECONDITIONS SET FORTH IN ARTICLES 649 AND 650 OF THE NEW CIVIL CODE IS SUPERIOR TO THE MERE CONVENIENCE RULE AGAINST THE OWNER OF THE DOMINANT ESTATE.

Petitioners claim that DARYL'S constructed the concrete fence only after petitioners filed the case for an

Easement of Right of Way against Pedro on May 27, 1994. They submit that the criterion of least

prejudice should be applied at the time of the filing of the original complaint; otherwise, it will be easy

for the servient estate to evade the burden by subsequently constructing structures thereon in order to

increase the damage or prejudice.[12] Moreover, they pointed out that a Notice of Lis Pendens was

annotated on Pedro's title. Thus, petitioners aver that DARYL'S is in bad

faith and is guilty of abuse of rights as provided under Article 19[13] of the New Civil Code.[14]

On the other hand, DARYL'S counters that petitioners belatedly imputed bad faith to it since petitioners'

pre-trial brief filed with the RTC contained no allegation of bad faith or misrepresentation. Moreover,

DARYL'S reiterates its position that establishing a right of way over the servient estate would cause

substantial damage, considering that a concrete fence has already been erected thereon. Most

importantly, DARYL'S submits that petitioners can have adequate ingress to or egress from the

dominant estate by passing through other surrounding vacant lots. Lastly,

DARYL'S points out that when Perfecta bought the dominant estate from Dionisio Abasolo, the

surrounding lots were also owned by the latter.[15]

For his part, Pedro manifests that he is adopting all the defenses invoked by DARYL'S in the belief that

he is no longer a party to the instant case as he had already sold the servient estate to DARYL'S and a

title already issued in the latter's name.[16]

The instant petition lacks merit.

We hold that Apolinardito as owner of the dominant estate together with Perfecta failed to discharge

the burden of proving the existence and concurrence of all the requisites in order to validly claim a

compulsory right of way against respondents.[17]

It should be remembered that to be entitled to a legal easement of right of way, the following requisites

must be satisfied: (1) the dominant estate is surrounded by other immovables and has no adequate

outlet to a public highway; (2) proper indemnity has been paid; (3) the isolation was not due to acts of

the proprietor of the dominant estate; and (4) the right of way claimed is at the point least prejudicial to

the servient estate.[18]

The fourth requisite is absent.

We are in full accord with the ruling of the CA when it aptly and judiciously held, to wit:

As provided for under the provisions of Article 650 of the New Civil Code, the easement of right of way shall be established at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. Where there are several tenements surrounding the dominant estate, and the easement may be established on any of them, the one where the way is shortest and will cause the least damage should be chosen. But if

these two circumstances do not concur in a single tenement, as in the instant case, the way which will cause the least damage should be used, even if it will not be the shortest. The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance. The court is not bound to establish what is the shortest; a longer way may be established to avoid injury to the servient tenement, such as when there are constructions or walls which can be avoided by a round-about way, as in the case at bar.

As between a right of way that would demolish a fence of strong materials to provide ingress and egress to a public highway and another right of way which although longer will only require a van or vehicle to make a turn, the second alternative should be preferred. Mere convenience for the dominant estate is not what is required by law as the basis for setting up a compulsory easement. Even in the face of necessity, if it can be satisfied without imposing the easement, the same should not be imposed.

Finally, worthy of note, is the undisputed fact that there is already a newly opened public road barely fifty (50) meters away from the property of appellants, which only shows that another requirement of the law, that is, there is no adequate outlet, has not been met to establish a compulsory right of way.

Such pronouncement by the CA is in line with this Court's ruling in Quimen v. Court of Appeals,[19] where

we held that as between a right of way that would demolish a store of strong materials to provide

egress to a public highway, and another right of way which, although longer, will only require an

avocado tree to be cut down, the second alternative should be preferred.

As a rule, findings of fact of the CA, affirming those of the trial court,

are generally final and conclusive on this Court.[20] While this Court has recognized several

exceptions[21] to this rule, none of these exceptions finds application in this case. Ergo, we find no cogent

reason and reversible error to disturb the unanimous findings of the RTC and the CA as these are amply

supported by the law and evidence on record.

WHEREFORE, the instant Petition is DENIED for lack of merit. The assailed Court of Appeals Decision,

dated April 21, 2003, and Resolution dated September 24, 2003 are hereby AFFIRMED. Costs against the

petitioners.

SO ORDERED.

G.R. No. 185240 January 20, 2010

SPS. MANUEL AND VICTORIA SALIMBANGON, Petitioners, vs.SPS. SANTOS AND ERLINDA TAN, Respondents.

D E C I S I O N

ABAD, J.:

This case is about the admissibility of testimony that tends to modify a written agreement among the parties and the extinction of the easement of right of way upon consolidation in one person of the ownership of the dominant and the servient estates.

The Facts and the Case

Guillermo Ceniza died intestate on July 11, 1951, leaving a parcel of land at Poblacion, Mandaue City. Twenty years later on July 17, 1973 his children Benedicta, Guillermo, Jr., Victoria, Eduardo, and Carlos executed an extrajudicial declaration of heirs and partition, adjudicating and dividing the land among themselves as follows:

1. To Benedicta T. Cabahug, Lot A subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its NW. boundary in favor of Lots B, E, and D, of the subdivision;

2. To Eduardo Ceniza, Lot B subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its SW. boundary in favor of Lots A, D & E of the subdivision;

3. To Carlos Ceniza, Lot C;

4. To Guillermo Ceniza Jr., Lot D subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its NE. boundary in favor of Lot B and E of the subdivision; and

5. To Victoria Ceniza, Lot E, subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its SW. boundary in favor of Lot D of the subdivision.1

Lots A, B, and C were adjacent to a city street. But Lots D and E were not, they being interior lots. To give these interior lots access to the street, the heirs established in their extrajudicial partition an easement of right of way consisting of a 3-meter wide alley between Lots D and E that continued on between Lots A and B and on to the street. The partition that embodied this easement of right of way was annotated on the individual titles issued to the heirs.

Roughly, the lots including the easement of right of way would take the following configurations,2 not drawn here to accurate size and proportion but illustrative of their relative locations:

But, realizing that the partition resulted in an unequal division of the property, the heirs modified their agreement by eliminating the easement of right of way along Lots A, D, and E, and in its place, imposed a 3-meter wide alley, an easement of right of way, that ran exclusively along the southwest boundary of Lot B from Lots D and E to the street.3 Thus:

Victoria (now petitioner Victoria Salimbangon) later swapped lots with Benedicta with the result that Victoria became the owner of Lot A, one of the three lots adjacent to the city street. Victoria and her husband (the Salimbangons) constructed a residential house on this lot and built two garages on it. One garage abutted the street while the other, located in the interior of Lot A, used the alley or easement of right of way existing on Lot B to get to the street. Victoria had this alley cemented and gated.

Subsequently, however, respondent spouses Santos and Erlinda Tan (the Tans) bought Lots B, C, D, and E from all their owners. The Tans built improvements on Lot B that spilled into the easement area. They also closed the gate that the Salimbangons built. Unable to use the old right of way, the Salimbangons

lodged a complaint with the City Engineer of Mandaue against the Tans. For their part, the Tans filed an action with the Regional Trial Court (RTC) of Mandaue against the Salimbangons in Civil Case MAN-3223 for the extinguishment of the easement on Lot B and damages with application for preliminary injunction.4 The Salimbangons filed their answer with counterclaims.

After hearing or on February 9, 2001 the RTC rendered judgment, upholding the Salimbangons’ easement of right of way over the alley on Lot B, the lot that belonged to the Tans. The court pointed out that the easement in this case was established by agreement of the parties for the benefit of Lots A, D, and E. Consequently, only by mutual agreement of the parties could such easement be extinguished. The RTC declined, however, to award damages to the Salimbangons.

Both parties appealed to the Court of Appeals (CA) in CA-G.R. CV 73468. On July 27, 2007 the CA5 reversed the RTC decision, extinguished the easement of right of way established on the alley in Lot B of the Tans, and denied the Salimbangons’ claim for damages. The court ruled that based on the testimony of one of the previous owners, Eduardo Ceniza, the true intent of the parties was to establish that easement of right of way for the benefit of the interior lots, namely, Lots D and E. Consequently, when ownership of Lots B, D, and E was consolidated into the Tans, the easement ceased to have any purpose and became extinct. The Salimbangons filed a motion for reconsideration but the CA denied the same in its resolution of October 14, 2008. This prompted them to file the present petition.

Questions Presented

Two questions are presented:

1. Whether or not the CA erred in admitting in evidence contrary to the parol evidence rule Eduardo Ceniza’s testimony respecting the true intent of the heirs in establishing the easement of right of way as against what they stated in their written agreement; and

2. Whether or not the CA erred in ruling that the easement of right of way established by the partition agreement among the heirs for the benefit of Lot A has been extinguished.

The Court’s Ruling

One. The Salimbangons point out that the CA ought to have rejected Eduardo Ceniza’s testimony that the heirs had intended to establish the easement of right of way solely for the benefit of the interior Lots D and E which had no access to the city street. The partition agreement also made Lot A, now owned by the Salimbangons, a beneficiary of that easement. Thus:

2. To Eduardo Ceniza [now the Tans], Lot B subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its SW. boundary in favor of Lots A, D & E of the subdivision;6 (Underscoring supplied)

The parol evidence rule, said the Salimbangons, precluded the parties from introducing testimony that tended to alter or modify what the parties had agreed on above.

But the exclusionary provision of the parol evidence rule admits of exceptions. Section 9, Rule 130 of the Revised Rules on Evidence states:

Sec. 9. Evidence of written agreements. - When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement. However, a party may present evidence to modify, explain or add to the terms of the written agreement if he puts in issue in his pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the parties thereto;

(c) The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement.

The term "agreement" includes wills. (7a)

Here, the Tans had put in issue the true intent and agreement of the parties to the partition when they alleged in their complaint that, contrary to what paragraph 2 quoted above seems to imply, the easement was actually for the benefit of Lots D and E only. The complaint thus said:

So that in the same partition instrument, the said heirs voluntarily agreed to establish the so-called "perpetual and gratuitous easement of road right of way" along LOT A, with 1.50 meters wide and along LOT B, with the same 1.50 meters wide.

Understandably, this servitude voluntarily constituted on LOTS A and B was had for the benefit and use by the owners of LOTS D (Guillermo Ceniza, Jr.) and E (defendant Victoria Ceniza Salimbagon).7 (Underscoring supplied)

Consequently, with the above averment, the Tans were entitled to introduce evidence to establish the true intent and agreement of the parties although this may depart from what the partition agreement literally provided.

At any rate, as the CA said, the Salimbangons did not object at the hearing to admission of Eduardo Ceniza’s testimony even when this seemed at variance, as far as they were concerned, with the partition agreement among the heirs. Consequently, the Salimbangons may also be deemed to have waived their right to now question such testimony on appeal.

Two. The Salimbangons point out that the partition agreement among the heirs established in their favor, as owners of Lot A, an easement of right of way on Lot B from the interior of their lot to the city street. Since theirs was an easement established by agreement of the parties, only by mutual agreement could the same be extinguished.

But, firstly, as Eduardo Ceniza testified, the true agreement of the heirs was for the establishment of an easement of right of way for the benefit solely of the lots that did not have direct access to the street, namely Lots D and E. His testimony made sense.1avvphi1

As originally constituted in that agreement, each of Lots A and B was to contribute a strip of 1.5 meters between them that when combined formed a 3-meter wide alley leading from Lots D and E to the street. To the extent that Lots A and B retained the right to use the 1.5-meter portion that they contributed to the establishment of the easement, the agreement gave their owners the right to use the common alley as well. As Eduardo testified, however, the true intent of the heirs was to give Lots D and E access to the street. Lots A and B did not need this alley since they were facing the street.1avvphi1

Consequently, when the owner of Lots D and E also became the owner of Lot B, the easement of right of way on Lot B became extinct by operation of law.8 The existence of a dominant estate and a servient estate is incompatible with the idea that both estates belong to the same person.

Secondly, there is no question that when the heirs realized that it was not fair to take strips of 1.5 meters from each of Lots A, D, and E for the easement of right of way when these lots were already small, the heirs executed a "Cancellation of Annotation of Right of Way, etc." that cancelled the easement of right of way they earlier established on Lots A, D, and E and in its place imposed a 3-meter wide easement of right of way solely on Lot B.

Although the "cancellation" document did not say so, it was implicit that the changed location of the easement cancelled not only the 1.5-meter strip of easement imposed on Lot A of the Salimbangons but also their right to use the new 3-meter easement alley that lay entirely on Lot B. Strictly speaking, if the Salimbangons insist that their right as dominant estate under the original partition agreement remains, then that would be partly on a 1.5-meter strip of their own Lot A and partly on the equivalent 1.5-meter strip on the side of Lot B, not on the new 3-meter alley established entirely on Lot B.

The point is that, obviously, in establishing the new easement of right of way, the heirs intended to abandon the old one. Since this 3-meter alley on Lot B directly connected Lots D and E to the street, it is also obvious that only the latter lots were its intended beneficiary. And, with the ownership of Lots B, D, and E now consolidated in a common owner, namely, the Tans, then the easement of right of way on Lot B may be said to have been extinguished by operation of law.9

ACCORDINGLY, this Court DENIES the petition and AFFIRMS in all respects the decision dated July 27, 2007 and resolution dated October 14, 2008 of the Court of Appeals in CA-G.R. CV 73468.

SO ORDERED.

BRYAN U. VILLANUEVA, petitioner, vs. HON. TIRSO D.C. VELASCO in his capacity as Presiding Judge of the Regional Trial Court of Quezon City, Branch 88, JULIO N. SEBASTIAN and SHIRLEY LORILLA, respondents.

D E C I S I O N

QUISUMBING, J.:

This petition for certiorari assails (1) the decision [1] dated December 27, 1996 of the Court of Appeals in CA-G.R. SP No. 39166, dismissing petitioners petition for review under Rule 65 with prayer for the issuance of a cease and desist order and/or temporary restraining order, and (2) the resolution[2]dated August 14, 1997 denying the subsequent motion for reconsideration.

Petitioner Bryan Villanueva is the registered owner of the parcel of land covered by Transfer Certificate of Title No. 127862 of the Register of Deeds of Quezon City. He bought it from Pacific Banking Corporation, the mortgagee of said property. The bank had acquired it from the spouses Maximo and Justina Gabriel at a public auction on March 19, 1983. When petitioner bought the parcel of land there was a small house on its southeastern portion. It occupied one meter of the two-meter wide easement of right of way the Gabriel spouses granted to the Espinolas, predecessors-in-interest of private respondents, in a Contract of Easement of Right of Way. The pertinent portion of the contract dated November 28, 1979, states:

. . . in order to have an access to and from their aforementioned land where their houses are constructed and to have an outlet to Tandang Sora Ave. which is the nearest public road and the least burdensome to the servient estate and to third persons, it would be necessary for them to pass through spouses MAXIMO GABRIEL and JUSTINA CAPUNOs land and for this purpose, a path or passageway of not less than two (2) meters wide of said spouses property is necessary for the use of ROMEO, RODOLFO, NENITA and AURORA ESPINOLA and for all their needs in entering their property.

x x x

WHEREFORE, in view of the fact that the property of the ESPINOLA had been bought by them from MAXIMO CAPUNO, father of MAXIMO GABRIEL, spouses MAXIMO GABRIEL and JUSTINA CAPUNO hereby agree and permit RODOLFO, ROMEO, NENITA and AURORA ESPINOLA and their families to have a permanent easement of right of way over the aforementioned property of said spouses limited to not more than two meters wide, throughout the whole length of the southeast side of said property and as specifically indicated in the attached plan which is made an integral part of this Contract as Annex A;

This Agreement shall be binding between the parties and upon their heirs, successors, assigns, without prejudice in cases of sale of subject property that will warrant the circumstances. [3]

Unknown to petitioner, even before he bought the land, the Gabriels had constructed the aforementioned small house that encroached upon the two-meter easement. Petitioner was also unaware that private respondents, Julio Sebastian and Shirley Lorilla, had filed on May 8, 1991, Civil Case No. Q-91-8703, for easement, damages and with prayer for a writ of preliminary injunction and/or restraining order against the spouses Gabriel. [4] As successors-in-interest, Sebastian and Lorilla wanted to enforce the contract of easement.

On May 15, 1991, the trial court issued a temporary restraining order. On August 13, 1991, it issued a writ of preliminary mandatory injunction ordering the Gabriels to provide the right of way and to demolish the small house encroaching on the easement. On August 15, 1991, the Gabriels filed a motion for reconsideration which was also denied. Thus, they filed a petition for certiorari before the Court of Appeals.

On March 26, 1992, the Eighth Division of the Court of Appeals dismissed the petition and upheld the RTCs issuances. The decision became final and executory on July 31, 1992.[5]

On January 5, 1995, Judge Tirso Velasco of the RTC in Quezon City, Branch 88, issued an Alias Writ of Demolition. On June 20, 1995, the sheriff tried to demolish the small house pursuant to the writ. Petitioner filed a Third Party Claim with Prayer to Quash Alias Writ of Demolition. He maintains that the writ of demolition could not apply to his property since he was not a party to the civil case. His Third

Party Claim with prayer to quash the writ of demolition was denied for lack of merit on August 16, 1995.[6] The motion for reconsideration as well as the Supplemental Motion for Reconsideration dated September 12, 1995 were denied on October 19, 1995.[7]

Petitioner, thereafter, filed a petition for certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 39166, asserting that the existence of the easement of right of way was not annotated in his title and that he was not a party to Civil Case No. Q-91-8703, hence the contract of easement executed by the Gabriels in favor of the Espinolas could not be enforced against him. The Court of Appeals dismissed the petition for lack of merit and denied the reconsideration, disposing thus:

WHEREFORE, the instant petition is hereby dismissed by this court for lack of merit.

No costs considering the failure of private respondents to file their comment, despite notice. [8]

Hence, this instant petition.

Petitioner now avers that the appellate court erred in declaring,

(1) THAT FOLLOWING THE ESSENCE OF INHERENCE AND INTRANSMISSIBILITY OF AN EASEMENT, A RIGHT OF WAY CAN EXIST EVEN IF THEY ARE NOT EXPRESSLY STATED OR ANNOTATED ON THE TORRENS TITLE;

(2) THAT PETITIONER, AS PROSPECTIVE BUYER, SHOULD HAVE EXERCISED ORDINARY PRUDENCE BY TAKING THE INITIATIVE TO DETERMINE THAT AN EASEMENT HAS BEEN CONSTITUTED ON THE PROPERTY HE INTENDS TO BUY; AND,

(3) THAT IN AS MUCH AS THE HEREIN PETITIONER IS NOT A PARTY TO CIVIL CASE NO. Q-91-8703, HE CANNOT BE BOUND BY ANY JUDGMENT OR ORDER RENDERED THEREIN.[9]

Primarily, the issue is whether the easement on the property binds petitioner.

Petitioner argues it could not be enforced against him. First, he says that a right of way cannot exist when it is not expressly stated or annotated on the Torrens title. According to him, even if an easement is inherent and inseparable from the estate to which it actively belongs as provided in Art. 617 of the Civil Code,[10] the same is extinguished when the servient estate is registered and the easement was not annotated in said title conformably with Section 39 of the Land Registration Law. Second, petitioner points out that the trial court erred when it faulted him for relying solely on the clean title of the property he bought, as it is well-settled that a person dealing with registered land is not required to go beyond what is recorded in the title. He adds that it is private respondents who should have made sure their right of way was safeguarded by having the same annotated on the title with the Register of Deeds. He adds that Section 76 of P.D. No. 1529 [11] also requires that when a case is commenced involving any right to registered land under the Land Registration Law (now the Property Registration Decree), any decision on it will only be effectual between or among the parties thereto, unless a notice of lis pendens of such action is filed and registered in the registry office where the land is recorded. There was no such annotation in the title of the disputed land, according to petitioner. Lastly, since he was not a party to Civil Case No. Q-91-8703, petitioner argues that he cannot be bound by the writ of demolition and be forcibly divested of a portion of his land without having his day in court.

Private respondents Sebastian and Lorilla, for their part, adopted the disquisition of the appellate court as their Comment and asked for the dismissal of the petition and P100,000.00 in damages. In its decision the appellate court, citing the decision of the lower court, stressed that unlike other types of encumbrance of real property, a servitude like a right of way can exist even if they are not expressly stated or annotated as an encumbrance in a Torrens title because servitudes are inseparable from the estates to which they actively or passively belong. Moreover, Villanueva was bound by the contract of easement, not only as a voluntary easement but as a legal easement. A legal easement is mandated by law, and continues to exists unless its removal is provided for in a title of conveyance or the sign of the easement is removed before the execution of the conveyance conformably with Article 649 [12]in accordance with Article 617[13] of the Civil Code.

At the outset, we note that the subject easement (right of way) originally was voluntarily constituted by agreement between the Gabriels and the Espinolas. But as correctly observed by the Court of Appeals, the easement in the instant petition is both (1) an easement by grant or a voluntary easement, and (2) an easement by necessity or a legal easement. A legal easement is one mandated by law, constituted for public use or for private interest, and becomes a continuing property right. [14] As a compulsory easement, it is inseparable from the estate to which it belongs, as provided for in said Article 617 of the Civil Code. The essential requisites for an easement to be compulsory are: (1) the dominant estate is surrounded by other immovables and has no adequate outlet to a public highway; (2) proper indemnity has been paid; (3) the isolation was not due to acts of the proprietor of the dominant estate; (4) the right of way claimed is at a point least prejudicial to the servient estate; and (5) to the extent consistent with the foregoing rule, where the distance from the dominant estate to a public highway may be the shortest.[15] The trial court and the Court of Appeals have declared the existence of said easement (right of way). This finding of fact of both courts below is conclusive on this Court,[16] hence we see no need to further review, but only to re-affirm, this finding. The small house occupying one meter of the two-meter wide easement obstructs the entry of private respondents cement mixer and motor vehicle. One meter is insufficient for the needs of private respondents. It is well-settled that the needs of the dominant estate determine the width of the easement. [17] Conformably then, petitioner ought to demolish whatever edifice obstructs the easement in view of the needs of private respondents estate.

Petitioners second proposition, that he is not bound by the contract of easement because the same was not annotated in the title and that a notice of lis pendens of the complaint to enforce the easement was not recorded with the Register of Deeds, is obviously unmeritorious. As already explained, it is in the nature of legal easement that the servient estate (of petitioner) is legally bound to provide the dominant estate (of private respondents in this case) ingress from and egress to the public highway.

Petitioners last argument that he was not a party to Civil Case No. Q-91-8703 and that he had not been given his day in court, is also without merit. Rule 39, Sec. 47, of the Revised Rules of Court:

SEC. 47. Effect of judgments or final orders. The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

(a) In case of a judgment or final order against a specific thing, or in respect to the probate of a will, or the administration of the estate of a deceased person, or in respect to the personal, political, or legal condition or status of a particular person or his relationship to another, the judgment or final order is conclusive upon the title to the thing, the will or administration, or the condition, status or relationship of the person; however, the probate of a will or granting of letters of administration shall only be prima facie evidence of the death of the testator or intestate;

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; and

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto. (Emphasis ours).

Simply stated, a decision in a case is conclusive and binding upon the parties to said case and those who are their successor in interest by title after said case has been commenced or filed in court. [18] In this case, private respondents, Julio Sebastian and Shirley Lorilla, initiated Civil Case No. Q-91-8703 on May 8, 1991,[19] against the original owners, the spouses Maximo and Justina Gabriel. Title in the name of petitioner was entered in the Register of Deeds [20] on March 24, 1995, after he bought the property from the bank which had acquired it from the Gabriels. Hence, the decision in Civil Case No. Q-91-8703 binds petitioner. For, although not a party to the suit, he is a successor-in-interest by title subsequent to the commencement of the action in court.

WHEREFORE, the instant petition is DENIED. The assailed decision and resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.

SO ORDERED.

SPOUSES CAMILO L. SABIO, and MA. MARLENE A. LEDONIO-SABIO, petitioners,   vs. THE INTERNATIONAL CORPORATE BANK, INC. (now UNION BANK OF THE PHILIPPINES), GOLDENROD, INC., PAL EMPLOYEES SAVINGS AND LOAN ASSOCIATION, INC., AYALA CORPORATION, LAS PIAS VENTURES, INC., FILIPINAS LIFE ASSURANCE COMPANY (now AYALA LIFE ASSURANCE, INC.), AYALA PROPERTY VENTURES CORPORATION, and AYALA LAND, INC., respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

Before us is a petition for review on certiorari assailing the decision of the Court of Appeals in CA-G.R. CV No. 48870 which affirmed and modified the judgment of the Regional Trial Court of Makati, Branch 65, in Civil Case No. 18540, an action for specific performance and damages.

The object of the controversy is a portion of a vast tract of land measuring approximately 152,454 square meters, located at Tindig na Manga, Almanza, Las Pias City. Designated as Lots 2 and 3, and 6 (formerly covered by two Certificates of Title, namely: TCT Nos. 65161 and 65162), this vast estate was registered in the name of Las Pias Ventures, Incorporated (or LPVI). [1] In the early 1970s, the said property was the subject of several land registration, as well as civil, cases.

On May 25, 1973, the spouses Gerardo and Emma Ledonio, one of the parties in LRC Case No. PN-107 affecting the land, assigned to the spouses Camilo and Ma. Marlene Sabio (herein petitioners) all their rights, interests, title and participation over a contiguous portion of the subject property measuring 119,429 square meters, particularly that which was covered by TCT No. 65162. [2] For this purpose, a deed of assignment with assumption of mortgage was later executed by the Ledonio spouses in favor of the Sabio couple on November 23, 1981.[3]

Similarly, while the subject property was still the object of several pending cases, the International Corporate Bank, Inc. (or Interbank) acquired from the Trans-Resource Management and Development Corporation all of the latters rights to the subject property by virtue of a deed of assignment executed between them on July 12, 1984.[4]

Sometime thereafter, or on March 6, 1985, the Sabios and Interbank settled their opposing claims by entering into a Memorandum of Agreement (or MOA) whereby the Sabios assigned, conveyed and transferred all their rights over the parcel covered by TCT No. 65162 to Interbank, with the express exception of a 58,000 square meter contiguous portion of said lot. The MOA also provided, to wit:

x x x x x x x x x

2. That for and in consideration of the aforementioned assignment, conveyance and transfer by the FIRST PARTY (i.e., the Sabios), the latter (SECOND PARTY, i.e., Interbank) shall:

a. PAY to the FIRST PARTY the sum of SEVEN HUNDRED FIFTY THOUSAND PESOS (P750,000.00), Philippine Currency, receipt of which in full is hereby acknowledged by the FIRST PARTY from the SECOND PARTY;

b. Subject to the rights of the SECOND PARTY under the provisions of No. 4 hereunder, COMPLETE and PERFECT its ownership and title to the afore-described three (3) parcels of land with all the improvements thereon, situated at Tindig Na Manga (Almanza), Las Pias, Rizal (now Metro Manila), covered by Transfer Certificate of Title No. S-65161-Metro Manila, Book T-328, Page 161 (formerly No. 190713-Rizal, Book T-1227, Page 113) and Transfer Certificate of Title No. S-65162-Metro Manila, Book T-328, Page 162 (formerly No. 190714-Rizal, Book T-1227, Page 114), AND, ASSIGN, CONVEY and TRANSFER unto and in favor of the FIRST PARTY a CONTIGUOUS PORTION of the afore-described parcel of land, with all the improvements thereon, covered by the aforementioned Transfer Certificate of Title No. S-65162-Metro Manila, Book T-328, Page 162 (formerly No. 190714-Rizal, Book T-1227, Page 114). The aforementioned CONTIGUOUS PORTION referred to in paragraph 1 hereof with an area of FIFTY EIGHT THOUSAND (58,000) SQUARE METERS, the exact location of which is, as far as practicable, as indicated in the sketch plan, which is hereto attached as Annex D and made an integral part hereof, LOT 6-B;

c. Bear and defray all costs, fees and expenses incidental to and/or connected with the segregation, survey, registration and delivery to the FIRST PARTY of a new transfer certificate of title in the name of the FIRST PARTY, free from all liens and encumbrances, over the afore-described parcel of land herein assigned, conveyed and transferred by the SECOND PARTY;

d. Constitute and grant and by these presents has CONSTITUTED and GRANTED without indemnity whatsoever in favor of the FIRST PARTY and of said parcel of land to be covered by a new transfer certificate of title in the name of the FIRST PARTY with an area of FIFTY EIGHT THOUSAND (58,000) SQUARE METERS, a permanent and perpetual RIGHT OF WAY sufficient for all the needs of said parcel of land through out the properties already owned and/or to be acquired by the SECOND PARTY, particularly the parcels of land covered by Transfer Certificate of Title No. 85717, Transfer Certificate of Title No. S-65161-Metro Manila, Book T-328, Page 161 (formerly No. 190703-Rizal, Book T-127, Page 113) and Transfer Certificate of Title No. S-65162-Metro Manila, Book T-328, Page 162 (formerly No. 190714-Rizal, Book T-1227, Page 114), it being understood that the right of way herein contemplated shall not be less than TEN (10) meters in WIDTH.[5]

The said MOA was annotated on TCT Nos. 65161 and 65162 on March 8, 1985 pursuant to paragraph 4 thereof. The same paragraph also granted Interbank the right to assign all its rights and interests outlined in the MOA, provided that all the obligations of Interbank specified in the aforequoted paragraphs 2.b, 2.c and 2.d shall also bind all of its assigns, heirs and successors. Subsequently, Interbank transferred all its rights and interests to the Las Pias Ventures, Incorporated (or LPVI). In turn, the portion covered by TCT No. 65161 designated as Lot Nos. 2 and 3 were acquired from LPVI by the Ayala Group of Companies (herein respondents) through a merger between LPVI and Ayala Land, Incorporated (or ALI), in whose favor TCT Nos. T-41263 and T-41262 were issued on April 25, 1994.

Lot No. 6, then covered by TCT No. S-65162, was also subsequently transferred first to LPVI, then to ALI, and a new title, TCT No. T-41261, was issued also on April 25, 1994. Another contiguous parcel, then covered by TCT No. 85717, was acquired by the Ayala Group sometime in 1993, which was eventually subdivided and retitled in favor of ALI. This entire property became the site of what was known then as Ayala Las Pias Subdivision. Years later, this first class residential subdivision was renamed Ayala Southvale.

Thereafter, a dispute arose concerning the 58,000 square meter contiguous portion subject of the MOA that was to be conveyed and transferred back to the Sabios by Interbank. Also in controversy was the permanent and perpetual right of way that Interbank was obligated to constitute in favor of the Sabios 58,000 square meter portion. The Sabios were thereby constrained to institute an action for Specific Performance and Damages against Interbank, Goldenrod Incorporated, PAL Employees Savings and Loan Association, Incorporated or (PESALA) and the Ayala Group of Companies comprised of the Ayala Corporation, LPVI, Insular Life Assurance Company, Ltd., Filipinas Life Assurance Company, ALI, Ayala Property Ventures, Incorporated (or APVI), and the Bank of the Philippine Islands (or BPI). BPI was later dropped as a party-defendant.

The Regional Trial Court of Makati, Branch 64, in Civil Case No. 1854, summarized the Sabios claims in their complaint, thus:

Plaintiffs claimed that defendant Interbank was obligated to complete and perfect its ownership and title to the parcels of land so that Interbank could transfer to plaintiffs the absolute ownership and title over the contiguous portion.

They also claimed that one of the commitments of defendant Interbank which induced plaintiffs to execute the agreement without which plaintiffs would not have executed was that defendant Interbank would clear the contiguous portion of all occupants and wall-in the same, together with the parcels of land belonging to defendants. Allegedly, the property had already been cleared, by defendant Ayala Group, of occupants except for the contiguous portion thereof.

Plaintiffs alleged that defendants, particularly Ayala Group, failed to comply with their commitments and obligations in the MOA specifically those arising from the abovementioned provisions thereof.Hence, plaintiffs have been prevented from utilizing for productive purposes the land.

They further alleged that they were constrained to obtain a loan from Interbank (Exhs. E, E-1, F, F-1, G and G-1) where the contiguous portion of the property was used as collateral (Exhs. H, H-1, I, I-1, J and J-1) and this loan is now deemed paid (Exhs. K, L, M-2, N, O, P to P-2) and plaintiffs are now considered released. Plaintiffs claimed Actual and Compensatory damages in the amount of P500,000.00 and Exemplary Damages in the amount of P250,000.00.[6]

The defendants answer was summed up by the trial court as follows:

Defendants disclaimed liability. Defendants Ayala Corp., Ayala Life, ALI, APVI (collectively referred to as Ayala Group), PESALA, and LPVI, claimed that they were not privy to the MOA, the contract from which the alleged obligations arose. In the transactions they were each involved in, subsequent to the MOA, pursuant to which they each acquired the property which was originally transferred by the plaintiffs to defendant Interbank, said property acquired did not include the contiguous portion which plaintiffs claimed was the subject of non-compliance of the obligations agreed upon. On the contrary, in each transaction, the contiguous portion was expressly excluded in the corresponding contracts (Exhs. C-1, D-2, 2-Ayala, 5-6, 2-A-PESALA), hence, plaintiffs have no cause of action against them and even assuming that defendants were privy to the MOA, they would still have no obligation to clear the contiguous portion of the property as there was no express or implied provision in the MOA that the party to whom the property was transferred would clear the same.[7]

Sometime thereafter, the defendants submitted a Notice of Confession of Judgment and Motion for Partial Decision Against Answering Defendant for the alleged purpose of securing an entry of judgment against them while avoiding the formality, time and expense of ordinary proceedings. In particular, the defendants confessed judgment with regard to the plaintiff spouses prayer emanating from the MOA, and asked that judgment be rendered directing the defendants to comply with their obligations as defined in the pertinent provisions of the MOA. Moreover, the defendants signified willingness to abide by the MOA, and complete and perfect title to the parcel of land, including that portion which was to be assigned to the plaintiff spouses. With regard to that 58,000 square meter parcel, the defendants also acknowledged the obligation to segregate that contiguous portion and deliver title thereto to the plaintiff spouses free from liens and encumbrances.

However, the defendants also averred that fulfillment of its obligation under the MOA became impossible due to the plaintiff spouses own acts. First, defendants posited that they were ready to deliver the title to the 58,000 square meter parcel and had, in fact, prepared the Deed of Conveyance[8] required by the Register of Deeds, but the plaintiffs themselves refused to sign the said deed unless the subject property was cleared of all squatters and other illegal occupants. The defendants nevertheless repudiated plaintiffs claim that they (defendants) were obligated to clear the said property of all squatters and occupants, much less to fence the said property, arguing that no such obligation was imposed in the MOA. Secondly, the defendants noted that the property in question became the subject of an action for recovery of ownership filed by the Ledonio spouses against the Sabios. Consequently, the annotation of the notice of lis pendens caused to be registered by the Ledonios on the titles hampered the delivery of the title covering the 58,000 square meter portion to the Sabios.

The defendants further admitted the obligation to grant an easement of right of way under the MOA, manifesting that not only did the defendants constitute and grant such right of way, but that they were also willing and prepared to provide an alternative choice at the pleasure of the plaintiff spouses.[9] Moreover, the mortgage obligations of the plaintiff spouses annotated on the titles covering the 58,000 square meter portion had already been paid off by the defendants, [10] prompting the latter to seek a court order cancelling the Notice of Lis Pendens and annotation of the MOA on the titles covering the subject parcel of land.

The issues having been joined, the trial court focused on the primordial matter of contention, that is: Whether or not the defendants had the obligation to clear the subject 58,000 square meter portion of all occupants and to fence the said premises, before conveyance of the property can be considered as

full compliance with the obligation imposed upon the defendants under the MOA. The trial court also sought to address the preliminary issue of whether or not an order directing the cancellation of the annotation of the MOA and notices of lis pendens on the titles covering the subject property was warranted.

The trial court ruled in favor of the defendants, finding that the MOA did not impose, whether expressly or impliedly, on Interbank and its transferees the obligation to clear the subject 58,000 square meter portion of squatters and other illegal occupants. Be that as it may, the trial court awarded actual and exemplary damages to the plaintiff spouses for losses they incurred due to the defendants delay in complying with the MOA, considering that the defendants filed their confession of judgment only after the lapse of six (6) years from the filing of the action. More particularly, the trial court disposed as follows:

In view of the foregoing, Defendant Ayala Group is ordered to pay plaintiffs Camilo and Marlene Sabio P500,000.00 in actual damages and P250,000.00 in exemplary damages. Plaintiffs, however, are directed to specifically comply with the obligations under the MOA by executing a Deed of Conveyance upon payment by the defendant of the foregoing amount. The Register of Deeds is directed to cancel the notice of lis pendens as regards this case, and the annotation of the subject Memorandum of Agreement, both of which are annotated on TCTs Nos. T-5331 to T-5334, the TCTs covering the contiguous portion of the property.

Costs against defendant Ayala Group.[11]

The opposing parties filed their respective motions for reconsideration, but both were denied by the trial court. Consequently, all the parties filed separate appeals before the Court of Appeals.Nevertheless, the trial court issued an order granting the defendants motion for partial immediate execution pending appeal by directing the Register of Deeds to immediately cancel and/or cause the cancellation of the notice of lis pendens and other annotations as regards this case and the annotation of the Memorandum of Agreement on TCT Nos. T-5331 to T-5334 and titles derived therefrom.[12]

Meanwhile, in their appeal before the Court of Appeals, the Sabios (plaintiffs-appellants) ascribed the following errors to the trial court:

I. The trial court erroneously disregarded the other provisions and parts of the MOA which could have evinced the reasons for, and the circumstances attendant to, the execution of the said MOA.

II. The trial court erred in not finding that the defendants-appellants (Ayala Group of Companies) are obligated to perfect and complete ownership and title to the entire property covered by TCT No. T-5331, including that portion which the defendant-appellants must assign, convey and transfer to the plaintiffs-appellants (Sabio spouses).

III. The trial court erred in failing to appreciate the testimony of plaintiff-appellant Camilo L. Sabio to the effect that Interbank and Ayala Investment and Development Corporation would enter into a joint venture to develop the entire parcel, including the surrounding real estate, into a first class residential subdivision, necessitating the removal of all illegal occupants and enclosing the perimeters of the said property with a wall that would include the 58,000 square meter portion pertaining to the Sabio spouses.

IV. The trial court erred in its interpretation of the phrase free from all liens and encumbrances as appearing in the MOA, by invoking inapplicable jurisprudence when it is the intention of the parties to the MOA, in using said phrase, that should prevail.

V. The trial court erred in not finding that all eighteen (18) parcels of land, comprising what was then known as the Ayala Las Pias Subdivision, covered by eighteen (18) titles in the name of LPVI, are all servient estates referred to in paragraph 2.d of the MOA.

VI. The trial court erred in not ordering the defendants-appellants to cause the annotation of the easement of right of way on all eighteen (18) titles.

VII. The trial court erred in ordering the cancellation of the annotation of the MOA and Notices of Lis Pendens on LPVIs TCT Nos. T-5331 to 5334.

VIII. The trial court erred in compelling the plaintiffs-appellants Sabios to sign the draft deed of conveyance when said document was a gross violation of paragraphs 2.b, 2.c, and 2.d of the MOA.

IX. While the trial court was right in concluding that the Sabio spouses suffered damages, their losses could not be compensated as actual damages, the same being incapable of accurate pecuniary estimation.

X. The trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the order dated September 21, 1994 directing the cancellation of the annotation of the MOA and the Notices of Lis Pendens on LPVIs titles.[13]

In contrast, the defendants-appellants merely impugned the trial courts judgment for having awarded actual and exemplary damages to the plaintiffs-appellants Sabio spouses, while failing to award damages in their (defendants-appellants) favor.

On April 30, 1997, the Court of Appeals rendered the decision subject of the instant petition for review, affirming with modification the trial courts ruling. The Court of Appeals affirmed the trial courts conclusion that under the MOA, the Interbank and the defendants-appellants did not assume the obligation to clear the subject contiguous portion of the land of occupants and to wall in the same.[14] The Court of Appeals further agreed with the trial courts ruling that since the intentions of the parties to the MOA were clearly worded in the provisions they expressly stipulated on, there was no reason to interpret the MOA differently.[15]

The Court of Appeals also rejected the Sabios position that the purpose and spirit of the establishment of a right of way in their favor under paragraph 2.d was to grant them the same rights as any homeowner would have to freely pass through all the roads in the proposed subdivision. The Court of Appeals ruled that the phrase permanent and perpetual right of way must be construed in its ordinary and accepted signification, that is, to provide ingress to, and egress from, the dominant estate, as well as to provide adequate and convenient passage to and from the nearest highway. The defendants-appellants having complied with the obligation to establish the right of way, the Court of Appeals determined that there was no need to annotate the easement on the titles not affected by said road right of way. In fact, while the MOA mentioned only TCT Nos. 65161 and 65162, which were later replaced by TCT Nos. 5333 and 5331, no other titles were mentioned.

Finally, while the Court of Appeals ruled that the defendants-appellants are not entitled to damages, the said court reversed the trial courts award of damages to the Sabios, concluding that their claim for damages, whether actual or exemplary, was unsubstantiated and devoid of legal basis.

Hence, the Court of Appeals rendered judgment decreeing:

WHEREFORE, the judgment appealed from is AFFIRMED with the MODIFICATION that the awards for actual and exemplary damages in favor of the plaintiffs are hereby SET ASIDE.

SO ORDERED.[16]

After a careful and thorough disquisition of the facts of this case and the arguments raised in this petition, we find no reversible error on the part of the Court of Appeals. In this petition for review before us, petitioner attributed to the Court of Appeals ten (10) alleged errors:

I. The Court of Appeals acted contrary to law and jurisprudence in affirming the decision of the trial court directing the petitioners to affix their signatures to the draft deed of conveyance (Exhibits CC thru CC-4, EEEE thru EEEE-4 and 4-Ayala), and in releasing respondents from their obligations under paragraphs 2.b, 2.c, and 2.d of the MOA. Petitioners are justified in refusing to affix their signatures to said draft.

II. The Court of Appeals acted contrary to law and jurisprudence in affirming the ruling of the trial court that the mere execution of the draft deed of conveyance (Exhibits CC thru CC-4, EEEE thru EEEE-4 and 4-Ayala) prepared sometime in January 1990 by respondents Ayala Group of Companies, successors-in-interest of respondent The International Corporate Bank, Inc. (now Union Bank of the Philippines), pursuant to paragraph 4 of the MOA, as second party, for the signature of the petitioners as first party, constitutes sufficient and valid compliance with the commitment and obligation of the second party to assign, convey and transfer unto and in favor of the first party the aforementioned contiguous portion --- Lot 6-B, Psu-80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-Ayala) --- with all the improvements thereon as mandated by the provisions of paragraph 2.b of the MOA, despite the fact that, admittedly, said Lot 6-B, Psu 80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-Ayala) is still in the hostile and adverse actual occupation and possession of third parties. More so, because paragraph 2.b of the MOA mandates that respondents Ayala Group of Companies shall assign, convey and transfer unto and in favor of the petitioners not only the aforementioned Lot 6-B, Psu 80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-Ayala) but also all the improvements thereon.

III. The Court of Appeals acted contrary to law and jurisprudence in utterly disregarding the import and significance of the premises or Whereases of the MOA and the various annexes thereto forming integral parts thereof (Exhibits A-6 thru A-9, A-10 thru A-15, A-16 thru A-22, A-23 thru A-26, A-27 thru A-30, A-31 thru A-33, and, A-35 thru A-46), evidencing the reasons behind and the circumstances surrounding the execution thereof, so that the court may be placed in the position/situation of the parties thereto at the time the agreement was executed.

IV. The Court of Appeals acted contrary to law and jurisprudence in not holding that --- as expressly agreed and stipulated in paragraph 2.b of the MOA (Exhibits A thru A-5 and 1-Ayala) Psu-80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-Ayala) with all the improvements thereon, respondents Ayala Group of Companies are mandated to first complete and perfect their ownership and title to the entirety to the afore-described Lot 6, Psu 80886 with all the improvements thereon, earlier covered by T.C.T. No. S-65162-Metro Manila, Book T-328, Page 162, in the name of CPJ Corporation, later by T.C.T. No. T-5331-Las Pias,

Metro Manila, Book 27, Page 131 in the name of respondent Las Pias Ventures, Inc. (Exhibits KK thru KK-3 and 3-Ayala) and now covered by T.C.T. No. T-41261-Las Pias, Metro Manila, Book 207, Page 61 in the name of respondent Ayala Land, Inc., including the aforementioned Lot 6-B, Psu-80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-Ayala) which respondents Ayala Group of Companies are committed and obligated to assign, convey and transfer unto and in favor of petitioners.

V. The Court of Appeals acted contrary to law and jurisprudence in disregarding the legal effect upon paragraph IV of the second amended and supplemental complaint dated 23 April 1990 of the confession of judgment made on 18 June 1993 and the statement made by respondents Ayala Group of Companies on 05 November 1993 --- the first day of the hearing of the above-entitled case --- both of which constitute judicial admissions contemplated by Section 4, Rule 129, Part IV (New Rules of Evidence) of the Rules of Court.

VI. The Court of Appeals acted contrary to law and jurisprudence in disregarding the following intention of the parties to the MOA as evidenced by the annexes thereto (Exhibits A-6 thru A-9; A-10 thru A-15; A-16 thru A-22; A-23 thru A-26; and A-35 thru A-46) in the use of the phrase free from all liens and encumbrances in paragraph 2.c thereof: --- free from any and all liens/encumbrances and/or problems of whatever kind and nature, including adverse claims, notices of lis pendens, and/or claims of occupants/possessors who were not parties to any of the cases mentioned in the aforementioned documents referred to in the aforementioned annexes.

VII. The Court of Appeals acted contrary to law and jurisprudence in holding that the two roads right of way (Exhibits 6-B and 6-C) --- confined and limited to Lot 10, Psu-80886 --- then covered by T.C.T. No. 85717 and later by T.C.T. No. T-5332-Las Pias, Metro Manila, Book 27, Page 132 (Exhibits LL thru LL-2 and 3-Ayala) in the name of respondent Las Pias Ventures, Inc., --- proposed by respondents Ayala Group of Companies constitute sufficient and valid compliance with the mandate of paragraph 2.d of the MOA, and, in releasing respondents Ayala Group of Companies from their commitment and obligation of complying therewith.

VIII. The Court of Appeals acted contrary to law and jurisprudence in affirming the decision of the trial court directing the cancellation of the annotation of the MOA and of the notices of lis pendens on the following Transfer Certificates of Title: T.C.T. No. T-5331-Las Pias, Metro Manila, Book 27, Page 131 (Exhibits KK thru KK-3 and 3-Ayala); T.C.T. No. T-5332-Las Pias, Metro Manila, Book 27, Page 132 (Exhibits LL thru LL-2 and 3-A-Ayala); T.C.T. No. T-5333 (Exhibits MM thru MM-2 and 3-B-Ayala); and T.C.T. No. T-5334-Las Pias, Metro Manila, Book 27, Page 134 (Exhibits NN thru NN-2 and 3-C-Ayala); and, in not directing that the judgment in the above-entitled case be annotated on all the eighteen (18) Transfer Certificates of Title covering a total of eighteen (18) parcels of land earlier known as the Ayala Las Pias Subdivision and now as Ayala Southvale.

IX. The Court of Appeals acted contrary to law and jurisprudence in disregarding the legal effect upon paragraphs IV, XII, XIII and XIV of the second amended and supplemental complaint dated 23 April 1990 of the confession of judgment made on 18 June 1993 by respondents Ayala Group of Companies and their statement made on 05 November 1993 --- the first hearing of the above-entitled case --- both of which constitute judicial admissions contemplated by Section 4, Rule 129, Part IV (New Rules of Evidence) of the Rules of Court.

X. In affirming the order issued by the trial court on 21 September 1994, acting with grave abuse of discretion amounting to lack or excess of jurisdiction, the Court of Appeals likewise acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

We shall deal with these alleged errors, not in numerical order, but by subject matter, for clarity and better articulation of the issues involved.

The first matter of contention is the Memorandum of Agreement (MOA) between the petitioners (spouses Sabio) and Interbank.[17] The petitioners posit that while the MOA is explicit in requiring Interbank, and the respondents as its transferees, to complete and perfect ownership and title to the entire estate, including improvements thereon, the court a quo and the Court of Appeals failed to compel the respondents to abide by their commitment to assign, convey and transfer the subject 58,000 square meter portion to the petitioners free from all liens and encumbrances.

It is their contention that the presence of illegal occupants and the existence of unauthorized improvements on the subject parcel negates the respondents claim that they have completed and perfected their ownership and title over said property. The fact that the subject parcel is possessed and occupied by squatters is a clear indication that the respondents were never in possession. Before the respondents can assign, convey and transfer title to the subject parcel, they must also be able to place the petitioners in possession thereof since possession is a necessary attribute of ownership. [18] Thus, for the petitioners, there must first be removal of the illegal occupants and unauthorized structures, and the subject parcel should be walled-in before said property is transferred by the respondents to them. Otherwise, such transfer and conveyance would be meaningless, illusory and impracticable.

The petitioners also contend that under the circumstances, any conveyance of the subject parcel by the respondents would not be free from all liens and encumbrances as stipulated in paragraph 2.c of said MOA. Their premise is that the presence of squatters and unauthorized improvements should be considered a lien or encumbrance on the subject parcel, even including such other problems as adverse claims, notices of lis pendens, and claims of other occupants and possessors who were not parties to the cases involving the subject parcel.

Consequently, the petitioners assail the alleged failure of the court a quo and the Court of Appeals to: (1) consider the intention of the parties as manifested in the annexes to the MOA; and (2) to give significance to the premises and whereas clauses of the MOA in the interpretation of the phrase free from all liens and encumbrances in paragraph 2.c of the MOA. [19] These related matters concerning the intention of the parties to the MOA, the stipulations in the annexed documents, and the interpretation of the phrase free from all liens and encumbrances were earlier raised by the petitioners in their appeal before the Court of Appeals,[20] advancing the same arguments and premises already discussed in the case below.

The trial court dealt exhaustively on these issues, finding that:

However, defendant Interbank has no obligation to clear the contiguous portion of the land of occupants and to wall-in the same for nothing in the MOA obligates Interbank to do so. Plaintiffs alleged that the clearing and walling-in of occupants was a principal commitment and inducement without which plaintiffs would not have executed the MOA. If such were the case, a provision to that effect should have been expressly stipulated in the MOA or at least implied therein. Plaintiff Camilo Sabio is a member of the bar who engaged in the practice of law for over twenty years and is currently holding public office. In drafting the MOA and/or agreeing to the stipulations in the same, a person of his stature could have been more circumspect. The occupants were already in the contiguous portion of the

property when the MOA was executed and if plaintiffs had wanted to ensure that defendant Interbank would take responsibility for clearing the property of occupants, they could have specifically provided for it.

Plaintiffs claimed that the obligation to clear and wall-in the occupants was implied in the provisions of the MOA, to complete and perfect ownership and title to the land and to (transfer) to plaintiffs the contiguous portion with all improvements and to deliver the new TCT free from all liens and encumbrances. This court finds that there is no implication of that sort . If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of the stipulations shall control. If the words appear contrary to the evident intention of the parties, the latter shall prevail over the former. (Art. 1370, Civil Code of the Philippines). The evidence does not show that the parties had intentions other than those commonly understood from the aforementioned terms in the MOA. The plaintiffs have failed to prove that the intention of the parties was other than that expressed by the literal meaning of the terms of the MOA.

Plaintiffs further alleged that the obligations to clear and wall-in occupants and to secure the cancellation of the Notice of Lis Pendens regarding the case of Ledonio v. Sabio annotated on the TCTs of the contiguous portion of the property are included in the obligation to deliver the new TCT free from all liens and encumbrances, and that the obligation to clear the occupants shanties is deemed included in the obligation to complete and perfect ownership and title to the land and to transfer to plaintiffs the contiguous portion with all improvements, the shanties being deemed included in the term improvements. This allegation is untenable. Words which may have different significations shall be understood in that which is most in keeping with the nature and object of the contract (Art. 1375, Civil Code of the Philippines), otherwise, it is presumed the words were used in their primary and general acceptation.

Occupation by the occupants of the contiguous portion of the property is not an encumbrance which defendant Interbank is obligated to clear the property from. The meaning of the words, free from all encumbrance does not include adverse possession of a third person. (Yuson and De Guzman v. Diaz, 42 Phil. 22 [1921]). An adverse possession by another is not an encumbrance in law and does not contradict the condition that the property be free from encumbrances; nor is it a lien which connotes security for a claim. Likewise, a Notice of Lis Pendens is not a lien or encumbrance. It is a mere cautional notice to a prospective buyer or mortgagee of a parcel of land under litigation, and cannot conceivably be the lien or encumbrance contemplated by law. (Underscoring ours)[21]

On appeal, the Court of Appeals affirmed and quoted with approval the above-stated findings and conclusion of the trial court, while adding that:

Indeed, an assiduous examination of the MOA and its WHEREAS clauses yields no basis for a necessary inference that the Interbank undertook to clear the 58,000 sq. m. portion to be assigned to plaintiffs of occupants/squatters, and to wall-in the same before turning over the title thereto. The MOA was negotiated for more than one year (see TSN, December 3, 1993, pp. 17-19), and during the negotiations one hundred (100) to two hundred (200) squatter families were already occupying the 58,000 sq. m. portion (TSN, December 10, 1993, p. 15). Plaintiffs assert that unless the squatters are removed from the contiguous portion and the area is properly walled in to make their removal effective, the predominant purpose of paragraph 2-b to transfer ownership and title without plaintiffs having to spend a single cent would be illusory and meaningless; thus the complaint alleges that the removal of the occupants and the

walling in of the 58,000 sq. m. portion was one of the principal commitments made by Interbank which induced plaintiffs to execute the MOA.

In light of the above circumstances, it is highly inconceivable and illogical that the plaintiffs did not insist on expressly providing the necessary stipulations and in words that leave nothing to further interpretation. Plaintiff Sabio, a lawyer, took part personally and with the assistance of another lawyer, in the drafting of the MOA, and the negotiations took about a year, and no reason is suggested why he refrained from including therein specific language containing what he considers the principal commitment of the second party to remove the squatters and wall-in the 58,000 portion to be conveyed to him.That the commitment must be implied, or inferred by interpretation or be shown by evidence outside of the document convinces us that the plaintiffs expectations were an afterthought. (Underscoring ours)[22]

It is a long-held cardinal rule that when the terms of an agreement are reduced to writing, it is deemed to contain all the terms agreed upon and no evidence of such terms can be admitted other than the contents of the agreement itself.[23] Accordingly, the trial court and the Court of Appeals referred to no other document but the MOA itself, the stipulations of which are deemed the law between the contracting parties. The lower courts found that nowhere in the MOA did Interbank commit to clear the subject parcel of squatters or illegal occupants. Neither was Interbank obliged to remove whatever unauthorized improvements were introduced in the said property. Nor is there any stipulation that would constrain the respondents to fence or wall-in the subject parcel along its perimeters. There being no such obligation on the part of the respondents, they cannot be compelled by the courts, even on the petitioners adamant insistence, to first rid the subject parcel of squatters, remove all improvements and fence the perimeter thereof, before conveyance or transfer can be effected.

Indeed, it is not the province of the courts to amend a contract by construction, or to make a new contract for the parties by interjecting material stipulations, or even to read into the contract words which it does not contain.[24] Since the MOA of the parties was reduced to writing, such agreement is deemed to contain all its terms and there cannot be, between the parties and their successors-in-interest, any evidence of the terms of the written agreement other than the contents of the agreement itself.[25]

Nevertheless, petitioners invoke the whereas clauses of the MOA, as well as the other documents that preceded the execution of the MOA, arguing that these will provide proof of the real intention of the parties when they executed the MOA. They strongly contend that these documents reflect their true intentions that Interbank, and its successors-in-interest, are obligated to clear the subject parcel of illegal occupants and structures, then fence its boundaries. At the outset, however, we note that petitioners, in their pleadings, never put in issue the allegation that the MOA failed to express the true intent of the parties thereto. Instead, they adopt inconsistent positions in regard to the MOA, that by itself, it is valid and binding on the parties and their successors-in-interest on the one hand, while they also seek the courts cognizance of extraneous documents to radically modify or add to the terms of the written agreement on the other hand.

We have uniformly held that it is only where a party puts in issue in the pleadings the failure of the written agreement to express the true intent of the parties thereto that said party may present evidence to modify, explain or add to the terms of the written agreement. [26] The fact that the terms of the MOA are explicit and leave no doubt as to the intention of the parties, coupled with petitioners failure to contest the contract for failing to express the true intention of the parties, behooves the courts not to

read into the MOA any other intention that would contradict its apparent import, [27] such that the literal meaning of its stipulations must control.[28]

Be that as it may, we shall, for the sake of discussion, peruse the documents referred to by petitioners as allegedly containing the factual and legal bases for their claim that respondents are obligated to first clear the subject parcel of all illegal occupants and structures, and then wall-in said property before there can be fulfillment of the stipulation to assign, transfer and convey the same to petitioners.

Going by chronological order, the first document is a Deed of Assignment [29] dated May 25, 1973 between the Ledonio spouses and petitioners, whereby the Ledonios absolutely assigned and transferred to the Sabios three (3) parcels of land for and in consideration of services rendered. There is no reference therein to illegal occupants, structures, and other obligations such as fencing in these properties.

The second document dated April 14, 1980 is an Agreement [30] between the CPJ Corporation, the spouses Epifanio and Cecilia Alano, and Trans-Resource Management and Development Corporation (or TRMDC), whereby CPJ Corporation sold to the Alanos and TRMDC, as financier of the Alanos, three (3) parcels of property, one of which later became the subject of the MOA between Interbank and petitioners. In the said document, the Alanos and TRMDC agreed to buy the property on an As Is basis, without warranty of any kind as to title and possession on the part of the seller, CPJ Corporation. The Alanos and TRMDC thereby admitted:

full knowledge of all the legal incidents and adverse claims affecting the said properties which have been and are being asserted by opposing parties in the pending cases/litigations involving the subject properties, i.e., LRC Cases Nos. PN-107 (LRC Rec. No. N-30603) and N-6336 (LRC Rec. No. N-34761), and Civil Case No. 187222, of the Court of First Instance of Rizal, as well as by other third persons not parties in the said pending cases/litigations, in respect of which the SECOND PARTY hereby agree(s) to and will assume full and sole responsibility for the settlement or removal thereof and save free and harmless the FIRST PARTY from any and all liability resulting and arising therefrom; x x x.[31]

A related document was the Contract to Buy and Sell[32] between the Alano spouses and TRMDC arising from the agreement between CPJ Corporation, the Alanos and TRMDC. Therein, the Alanos committed to free the titles from all liens and encumbrances on or before a certain date, but with particular reference to the litigation of any and all cases affecting the properties, x x x especially those cases mentioned under the Deed of Cession and Assignment dated April 14, 1980 executed by the same parties. Contrary to petitioners suppositions, there is no mention of the presence and clearing of squatters from the premises as a condition. In both documents, instead, there are definite references to the pending cases/litigations as the source of the liens and encumbrances on the subject property, not including therein any other extrajudicial claims of ownership or possession.

The fourth contract is a Deed of Assignment with Assumption of Mortgage [33] between Gerardo and Emma Ledonio as assignors, and the Sabio couple as assignees, executed by said parties on November 23, 1981. By the very nature of the contract, the only obligation that the Sabios assumed from the Ledonios were those under the mortgage in favor of the Philippine National Bank. Again, there was no mention of illegal occupants and structures, and therefore, no imposition to rid the property subject of the said mortgage of such persons and structures.

Then, there were executed on June 28, 1984, by and between TRMDC and Interbank, the Memorandum of Agreement[34] and the Addendum thereto.[35] In the former, the property subject of this petition was among those assigned, transferred and conveyed to Interbank (covered by TCT Nos. S-65161 and 65162), on the condition that there be settlement within one (1) year of all the attending liens and problems enumerated as follows:

LIENS

Entry No. 67527/L.P. No. 1753: NOTICE OF LIS PENDENS: By virtue of the notice of lis pendens presented and filed by Camilo L. Sabio, counsel for the plaintiffs, notice is hereby given that an action/petition for review has been commenced and is now pending in the Court of First Instance of Rizal in Civil/LRC Rec. No. 19722, entitled Gerardo G. Ledonio, et al. versus Eduardo C. Guico, involving the property described herein.

Entry No. 69433/L.P. No. 1763: NOTICE OF LIS PENDENS: By virtue of the notice of lis pendens presented and filed by Camilo L. Sabio, counsel for the intervenor, notice is hereby given that an action/petition for intervention has been commenced and is now pending in the Court of First Instance of Rizal in Civil/LRC Rec. No. 657, 758, 976 entitled E. Mayuga, F. Baltazar, et al. vs. F. Baltazar, S. Ledonio, et al., involving the property described herein.

Entry No. 69434/L.P. No. 1762: NOTICE OF LIS PENDENS: By virtue of the notice of lis pendens presented and filed by Camilo L. Sabio, counsel for the plaintiff/defendants, notice is hereby given that an action/petition for review has been commenced and is now pending in the Court of First Instance of Rizal in Civil/LRC Rec. No. 657, 758, 976 entitled E. Mayuga, F. Baltazar, et al. versus F. Baltazar, G. Ledonio, et al., involving the property described herein.

Entry No. 25081/T-190713: ADVERSE CLAIM - In an affidavit duly subscribed and sworn to, the spouses EPIFANIO J. ALANO and CECILIA P. ALANO, claim among other things, that the property described in this certificate of title is the subject of a Letter-Agreement executed by the herein owner and the adverse claimants.

Entry No. 65120/L.P. No. 1140: LIS PENDENS: By virtue of a notice of lis pendens, presented and filed by Camilo L. Sabio, counsel for the Respondent-Counter-Petitioners, notice is hereby given that an action has been commenced and is now pending in the Court of First Instance of Rizal in LRC Case No. P-107, LRC Rec. No. N-30603, entitled GERARDO G. LEDONIO, et al. versus CPJ CORPORATION, et al., involving the land described in this certificate of title.

Entry No. 38000/S-65161: AGREEMENT - In favor of SPS. EPIFANIO J. ALANO, SR. and CECILIA P. ALANO and TRANS-RESOURCE MANAGEMENT & DEVELOPMENT CORPORATION, in an instrument duly executed by the herein registered owner agrees to sell, transfer and convey unto SPS. EPIFANIO J. ALANO, SR. and CECILIA P. ALANO and TRANS-RESOURCE MANAGEMENT & DEVELOPMENT CORPORATION for the sum of P5,250,000.00 subject to the terms and conditions set forth in Doc. No. 133, Page No. 28, Book No. II; Series of 1980 of Notary Public for Makati, Metro Manila, Ma. Cynthia Q. Halaquea.

Entry No. 40608/S-65161: CONTRACT TO BUY AND SELL - By virtue of an instrument duly executed by and between EPIFANIO J. ALANO and CECILIA P. ALANO and TRANS-RESOURCE MANAGEMENT &

DEVELOPMENT CORPORATION, the former have agreed to sell unto the latter the property described herein for a total consideration of FOURTEEN MILLION FOUR HUNDRED SIXTY SEVEN THOUSAND SEVEN HUNDRED TEN PESOS (P14,467,710.00) subject to the terms and conditions set forth in Doc. No. 148, Page 31, Book II; Series of 1980 of Notary Public for Makati, Metro Manila, Ma. Cynthia Q. Halaquea.[36]

In paragraph 2.c of the MOA, the parties stipulated that Interbank shall render full and free assistance to TRMDC in exploring, negotiating and consummating appropriate settlement agreements with the parties/claimants concerned, including defraying the required cost of such settlements with view to cleaning/settling all of said liens/problems within the prescribed period, but with specific reference to the liens and problems enumerated in the preceding paragraph. Clearly, the claims of third parties such as squatters were not among those enumerated as liens or problems affecting the subject property. Neither was Interbank obligated under the terms of said agreement to clear the subject property of illegal occupants, there being no specific mention of their presence therein. On the other hand, the Addendum to the MOA between TRMDC and Interbank is a mere amendment to the computations of the principal debt and interests of TRMDC loan with Interbank. There is nothing in said document that even touches on the subject of claims, liens and problems affecting the property.

In furtherance of their stipulations in the MOA and Addendum thereto, TRMDC executed a Deed of Assignment[37] on July 12, 1984 in favor of Interbank involving, among others, the parcel subject of this petition. Said documents cited the MOA entered into by the same parties, reiterating TRMDCs undertaking to assign, transfer and convey absolute ownership and title in fee simple over the properties described therein free from any and all liens/encumbrances and/or problems of whatever kind and nature within a specified period of time. While the phrase, problems of whatever kind and nature may be broadly construed, the succeeding paragraph stressed that TRMDC is obligated to execute a Deed of Assignment pending its accomplishment and/or compliance with its obligations under the MOA and Addendum to the MOA. Thus, the obligations of TRMDC were effectively limited to those specifically enumerated in the two preceding documents which, as mentioned earlier, did not include clearing the property of squatters and unauthorized structures.

Finally, the MOA between petitioners and Interbank, as previously discussed, did not make mention of squatters and illegal structures. Neither did they stipulate that Interbank was obligated to clear the subject property of such occupants and structures, and neither did the said MOA impose on Interbank the obligation to wall-in the subject property.

In fine, there is no factual or legal basis for petitioners claim that the respondents are obligated to rid the subject property of squatters and unauthorized structures. Neither is there any provision in the cited documents that sustains petitioners contention. Consequently, the court a quo and the Court of Appeals did not err in finding that respondents were not under compulsion to clear the subject property of squatters and unauthorized structures under the MOA, inasmuch as there was no obligation to fence the perimeter of the subject property. The terms of the MOA and the preceding contracts are clear and leave no doubt as to their meaning; hence, they cannot be interpreted in a way that would please the petitioners, but should rather be fulfilled according to the literal sense of their stipulations. [38]

However, petitioners would argue that there was no necessity to make specific provisions with respect to the removal of the occupants and structures from, and walling-in of, the subject property. To them, it was sufficient that both parties knew the actual condition of the property. Petitioner Camilo Sabio testified to that effect, stating that the real intention or agreement of the parties was that the

obligation to complete and perfect ownership and title included the removal of all squatters and unauthorized structures, and to fence the perimeter of the subject property.

However, the Court of Appeals correctly concluded that petitioner Camilo Sabios testimony in this regard cannot be taken advantage of to inject into the agreement any understanding which is contradictory to or at variance with the terms thereof without violating the parol evidence rule x x x. The rule is that when the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be between the parties and their successors-in-interest, no evidence of such terms other than the contents of the written agreement. [39]

There are exceptions to said rule, however, such as when:

1. There is an intrinsic ambiguity, mistake or imperfection in the writing;

2. The written agreement fails to express the true agreement and intent of the parties thereto;

3. The validity of the written agreement is in question; and

4. There exists other terms agreed by the parties or their successors-in-interest after the execution of the written agreement.[40]

In the instant case, the MOA between the Sabios and Interbank was never assailed for any intrinsic ambiguity, mistake or imperfection in the writing by any of the parties. More importantly, petitioners never alleged in any of their pleadings that the MOA failed to express the true agreement and intent of the parties thereto. In fact, petitioner Camilo Sabio would be hard put to question the very contents of the MOA since he admittedly participated in the drafting of the MOA with the assistance of legal counsel.[41] Even if he would belatedly complain that the MOA did not state the true intentions of the parties, he is estopped from doing so. Indeed, the Court of Appeals noted, it is highly inconceivable and illogical that petitioner Camilo Sabio, an experienced lawyer who personally took part in the preparation of the MOA with the assistance of another lawyer, in the course of negotiations that lasted about a year, did not insist on expressly providing the necessary stipulations and in words that leave nothing to further interpretation.[42]

He cannot now insist that the court should accept his bare testimony that there was a verbal understanding between the parties to the MOA, such that there was no necessity to make specific provisions concerning the removal of illegal occupants and structures, nor even to fence the subject parcel of land. His testimony may have been unrebutted, but unsubstantiated testimony offered as proof of verbal agreements which tend to vary the terms of a written agreement is inadmissible under the parol evidence rule.[43]

Furthermore, the validity of the MOA was never questioned. In fact, the petitioners are vigorously pursuing its execution, albeit in a manner that departs from the stipulations contained therein. Since no fraud or mistake that would vitiate the validity of the MOA has been alleged, parol evidence cannot be admitted to incorporate additional contemporaneous conditions which are not mentioned at all in the written agreement.[44] Neither have petitioners shown that after the execution of the MOA, the parties and their successors-in-interest agreed to terms other than those appearing in the MOA.

In sum, there is no justification in the instant case to admit parol evidence to support the petitioners claims. It is a cardinal rule of evidence, not just one of technicality but of substance, that the written document is the best evidence of its own contents. It is also a matter of both principle and policy that when the written contract, by agreement of the parties, is established as the repository of their stipulations, any other evidence is excluded and the same cannot be used as a substitute for such

contract, nor even to alter or contradict them. Although the parol evidence rule is inflexible, it admits of four (4) exceptions, as earlier discussed. Since none of these exceptions was ever put in issue in the pleadings, in accordance with Rule 130, Section 9 of the Rules of Court, the parol evidence rule must be strictly adhered to in this instant case. Therefore, the stipulations of the contract being the law between the parties, the courts have no recourse but to enforce them as they were agreed upon and written. [45]

With more reason do we agree with the findings of the Court of Appeals that the existence of squatters and unauthorized structures in the subject property is not covered by the phrase liens and encumbrances. The word lien, by common acceptation, refers to a legal claim or charge on property to secure the payment of a debt or obligation, and which may often be used interchangeably with the word encumbrance. We adopt this Courts definition of the words lien and encumbrance as set forth in People v. RTC,[46] and quoted in the impugned decision of the Court of Appeals, viz:[47]

In People v. RTC (178 SCRA 299), the Supreme Court held that not all claims against a property can be considered a lien within the contemplation of law; it was held:

x x x. A lien is a qualified right or a propriety interest, which may be exercised over the property of another. It is a right which the law gives to have a debt satisfied out of a particular thing. It signifies a legal claim or charge on property, either real or personal, as a collateral or security for the payment of some debt or obligation.

Similarly, an encumbrance is a burden upon land, depreciative of its value, such as lien, easement, or servitude, which, though adverse to (the) interest of (the) landowner, does not conflict with his conveyance of (the) land in fee.

The following are considered encumbrances: A claim, lien, charge, or liability attached to and binding real property; e.g., a mortgage, judgment lien, lease, security interest, easement or right of way, accrued and unpaid taxes. A lien is already an existing burden or charge on the property while a notice of lis pendens, as the very term connotes, is only a notice or warning that a claim or possible charge on the property is pending determination by the court.[48]

Petitioners have failed to show how squatters and unauthorized structures can fall under the definition of liens and encumbrances. The documents relied upon by petitioners themselves enumerate the liens and encumbrances and other claims on the subject property. However, no such burdens on the property concerning the squatters appear in said documents. The courts cannot supply or read into these documents words which they clearly do not contain. All things considered, the Court of Appeals did not err in concluding that the possession of squatters or any other persons occupying the subject property without any legal right whatsoever, cannot and should not be considered a lien or encumbrance as commonly defined and accepted.

The second object of contention is the Deed of Conveyance proposed by respondents, but rejected by petitioners.[49] In said document, respondents Ayala Corporation, in accordance with the pertinent provisions of the MOA between Interbank and the Sabios, stipulated that:

WHEREAS, the FIRST PARTY had already completed the segregation of the said 58,000-square meter portion of Lot 6 (Psd80888) in accordance with the Bureau of Lands approved survey plan, a copy of which is hereto attached as Annex C. As such, the FIRST PARTY is now in a position to comply with its

obligation under Section 5 of the said Deed of Sale (Annex B) to convey the property to the SECOND PARTY, now described as follows:

Lot 6-B, Psd-13-008573, TCT No. T-5331of Las Pias Registry of Deeds

A PARCEL OF LAND (Lot 6-B of the subdivision plan Psd-13-008573, being a portion of Lot 6, Psu-80886, (Swo-20609), LRC Record No. 43516), situated in Barrio Almanza Dos, Las Pias, Metro Manila.Bounded on the NW., & NE., along lines 1 to 6 by Lot 8; on the SE., along line 6-7 by Lot 10 both of plan Psu-80886); and on the S., & W., along lines 7-8-1 by Lot 6-A of the subdivision plan. x x x containing an area of FIFTY EIGHT THOUSAND (58,000) SQ. METERS.

NOW, THEREFORE, for and in consideration of the foregoing, the FIRST PARTY Transfers, Assigns, Cedes and Conveys unto the SECOND PARTY the said 58,000-square-meter portion of Lot 6-B, Psd-13-008573, covered by TCT No. T-5331 of Las Pias Registry of Deeds and described in the above fourth WHEREAS clause.

That as part of the consideration of this Conveyance, the SECOND PARTY binds himself to file a Notice of Withdrawal of the case entitled Sps. Camilo and Ma. Marlene A. Ledonio vs. The International Corporate Bank, et al., docketed as Civil Case No. 18540 of the Regional Trial Court of Makati, Branch 145. [50]

The Sabios, however, refused to sign said deed of conveyance on the ground that it was grossly violative of the law and the MOA,[51] more particularly arguing that:

I. Mere execution of the deed of conveyance does not constitute sufficient and valid compliance with par. 2.b of the MOA;

II. Ayala Corporation failed to complete and perfect ownership and title to the subject property since it was never in actual occupation, possession, control and enjoyment of said property;

III. Under the law, symbolic delivery by mere execution of the deed of conveyance is not sufficient since actual possession, control and enjoyment is a main attribute to ownership.

We do not agree, for the law is clear on this matter. Under Article 1498 of the Civil Code, when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the object of the contract, if from the deed the contrary does not appear or cannot be inferred. Possession is also transferred, along with ownership thereof, to the petitioners by virtue of the deed of conveyance.[52]

Parallel to our ruling in Dulay Enterprises, Inc. v. Court of Appeals,[53] we find that petitioners contention that respondents never acquired ownership over the subject property since the latter was never in possession of the subject property nor was the property ever delivered is totally without merit. Under the aforementioned Article 1498, the mere execution of the deed of conveyance in a public document is equivalent to the delivery of the property. Since the execution of the deed of conveyance is deemed equivalent to delivery, prior physical delivery or possession is not legally required.

It is well-established that ownership and possession are two entirely different legal concepts. [54] Just as possession is not a definite proof of ownership, neither is non-possession inconsistent with ownership.[55] Thus, it is of no legal consequence that respondents were never in actual possession or

occupation of the subject property. They, nevertheless, perfected and completed ownership and title to the subject property.

Notwithstanding the presence of illegal occupants on the subject property, transfer of ownership by symbolic delivery under Article 1498 can still be effected through the execution of the deed of conveyance. As we held in Power Commercial and Industrial Corp. v. Court of Appeals, [56] the key word is control, not possession, of the subject property. Considering that the deed of conveyance proposed by respondents did not stipulate or infer that petitioners could not exercise control over said property, delivery can be effected through the mere execution of said deed.

Petitioners, as owners, have several options. Among these, they could file ejectment suits against the occupants, or to amicably secure the latters evacuation of the premises. Whatever mode petitioners choose, it signifies their control and their intention as owners to obtain for themselves and to terminate said occupants actual possession thereof.[57] It is sufficient that there are no legal impediments to prevent petitioners from gaining physical possession of the subject property. As stated above, prior physical delivery or possession is not legally required and the execution of the deed of sale or conveyance is deemed equivalent to delivery. This deed operates as a formal or symbolic delivery of the property sold and authorizes the buyer or transferee to use the document as proof of ownership. Nothing more is required.

Petitioners cannot deny that the deed of conveyance can effectively transfer ownership as it constitutes symbolic or constructive delivery of the subject property. Neither can they negate the fact that as owners, they can exercise control over the said property. Respondents are not obligated to remove the occupants before conveying the subject property to petitioners.

Petitioners argue that for them to have to spend to clear the subject property of illegal occupants and structures would violate par. 2.c of the MOA, which imposed on Interbank and its successors-in-interest the burden to bear all costs, fees and expenses incidental to segregation, survey, registration and delivery of a new title to the petitioners. It is patently clear that expenses for removal of illegal occupants and structures are not among those listed in said paragraph 2.c. The Court of Appeals noted that the obligation to defray all the costs and fees was connected with the delivery to petitioners of a new certificate of title, free from all liens and encumbrances. Had the parties to the MOA intended for Interbank and its successors-in-interest to be obligated to shoulder the expense of clearing the subject property of squatters and illegal structures, language to that effect could have easily and logically have been employed. As it happened, petitioners omitted to include this as a condition when they drafted the MOA. If the parties thereto really intended to impose on Interbank and its successors-in-interest the obligation to eject the squatters from the subject property and defray the cost therefor, it should have been stated in the MOA. The terms of the MOA are so clear as to leave no room for any other interpretation.[58]

There is also no truth to petitioners allegation that the deed of conveyance merely transferred to the Sabios all the rights and participation of respondents over the subject property. The Deed of Conveyance clearly states that the FIRST PARTY (respondent Ayala Corporation) Transfers, Assigns, Cedes and Conveys unto the SECOND PARTY (Sabios) the said 58,000 square-meter portion of Lot 6-B, Psd-13-008573, covered by TCT No. T-5331 of Las Pias Registry of Deeds and described in the above fourth WHEREAS clause. Thus, the deed of conveyance complied with par. 2.b of the MOA, which provided that the said property shall be assigned and conveyed after Interbank and its successors-in-interest shall complete and perfect ownership and title to said property.

Another object of contention is the stipulated permanent and perpetual right-of-way, which under par. 2.d of the MOA shall be sufficient for all the needs of said parcel of land throughout the properties already owned and/or to be acquired by the SECOND PARTY (Interbank) particularly the parcels of land covered by TCT No. 85717, TCT No. S-65161, and TCT No. S-65162, which right-of-way shall not be less than ten (10) meters wide. Petitioners contend that it is the purpose and spirit of the MOA that (they) shall have the same right to pass through the Ayala Corporations proposed subdivision like any other homeowner therein.[59]

Respondents counter that the right-of-way it has proposed is one with a definite lane and width and which is the most convenient route to the main access road that connects Ayala-Las Pias to the Ayala-Alabang Road. Moreover, at petitioners option, respondents were willing to provide another access road to service the subject property. [60] The proposed right-of-way is particularly described in TCT No. T-5332, containing an area of approximately 370,868 square meters. [61]

We agree with the Court of Appeals that the phrase permanent and perpetual right of way should be construed in its ordinary and accepted signification, i.e., to provide ingress to and egress from the dominant estate, or to provide passage in going to the highway from the dominant estate and back. The MOA itself does not provide that petitioners shall have free access to all the roads within the proposed subdivision that respondents would establish on the estate. Had the parties intended that petitioners be given such access, the same should have been incorporated in the MOA. Once again, the courts cannot read into the MOA any other intention that would contradict the apparent agreement. The courts cannot embellish the precise stipulations of the MOA just for the convenience of petitioners.

An easement is an abnormal restriction on respondents property rights, and the imposition thereof must be tempered and limited to the ordinary needs of petitioners property, not to satisfy their caprices.The law requires that the right-of-way must be at the point least prejudicial to the servient estate, and when applicable, where the distance from the dominant estate to a public highway may be the shortest.[62]

While the proposed right-of-way traversed respondents properties, the same should not encroach into the latters proposed subdivision roads. Petitioners access to all the subdivision roads like any homeowner therein is not a necessity and goes beyond mere convenience on their part. Otherwise, that would be stretching the purpose and meaning of a right-of-way beyond its legal and general acceptation.The fact is that respondents did not lack in satisfying the requirements in par. 2.d of the MOA. Instead of the minimum width of 10 meters, the proposed right-of-way is twenty-five (25) meters wide,[63] more than double the stipulated minimum width. There is really no reason for petitioners to complain and want for more.

While this may already be moot and academic, petitioners raise the issue that respondents confession of judgment[64] did not deny certain allegations contained in paragraphs IV, XII, XIII, and XIV of the formers second amended and supplemental complaint; [65] hence, they constitute express judicial admissions which the courts should have considered.[66]

While respondents denominated their pleading as a confession of judgment, it is more in the nature of a motion for partial judgment on the pleadings or a summary judgment. Indeed, respondents asked the court a quo to render partial judgment based on their admission of the genuineness and contents of certain documentary evidence offered by both parties. It is clear that respondents made no admission that would support any of petitioners contentions that deviate from the very stipulations in the MOA. There can be no implied admission of allegations which are extraneous to the contents of the documents expressly admitted by respondents. Their specific denials of certain allegations in petitioners

complaint still stand in their answer. In fact, respondents did not state anything that would contradict their earlier defenses and arguments already on record. It was a mere reiteration of their stand that the MOA, as worded, be implemented literally and without further delay.

It cannot also be said that respondents are deemed to have admitted the allegations in Camilo Sabios testimony as to the circumstances surrounding the execution of the MOA. As petitioners themselves noted, respondents counsel declared in open court that: (a) they were ready to agree and admit all the documentary evidence that the counsel (Atty. Sabio) has anyway enumerated in his pre-trial brief x x x;(b) its very clear that this case could be decided based on the pleadings and documentary evidence x x x; and (c) it is admitted by the defendants and we are ready to admit the documentary evidence that theyll be presenting.[67] Clearly, respondents only admitted all the documentary evidence, not the testimonial evidence offered by petitioners.

We stated earlier that this issue is already moot and academic for the supposed judicial admissions referred to by petitioners, had they been considered by the lower court, would not alter the outcome of this case. The lower courts conclusions, insofar as the implementation of the MOA is concerned, are more than amply supported by documentary evidence. Apart from those matters expressly admitted by respondents, there can be no implied admissions which the lower court could properly recognize. Besides, as earlier discussed, the documents themselves are the best evidence of the agreements between the parties in the absence of compelling evidence to the contrary.

Related to the issue of the confession of judgment is petitioners claim for damages. The trial court found that petitioners are entitled to P500,000.00 in actual damages and P250,000.00 in exemplary damages. On appeal, however, the Court of Appeals reversed the trial courts ruling, finding the awards for actual and exemplary damages in favor of petitioners unwarranted, and setting the same aside.

Petitioners have failed, in this petition, to present any persuasive proof that they are entitled to the damages awarded by the trial court. As found by the Court of Appeals, the claim for actual damages remained unsubstantiated and unproven. It is well-settled that actual or compensatory damages must be duly proved and proved with reasonable degree of certainty. [68] It is the fundamental principle of the law on damages that while one injured by a breach of contract shall be awarded fair and just compensation commensurate with the loss sustained as a consequence of the defendants acts or omission, a party is entitled only to such compensation for the pecuniary loss that he has duly proven. Actual damages cannot be presumed and cannot be based on just flimsy, remote, speculative and nonsubstantial proof.[69]

Petitioners also failed to establish that the delay in the implementation of the MOA was the sole responsibility of respondents. In fact, no factual basis was presented to support the claim for not only actual or compensatory damages, but also for exemplary damages. Petitioners failed to show that respondents acted in a wanton, fraudulent, reckless or malevolent manner that would warrant the award of exemplary damages.[70]

Anent the directive to cancel the annotation of the MOA and the Notices of Lis Pendens on TCT Nos. T-5331, T-5332, T-5333 and T-5334,[71]petitioners argue that the maintenance of the annotation of the MOA and the notices of lis pendens is necessary to protect their rights should the property be sold to third persons for value. They also stress that the MOA expressly mandates the annotation of the MOA on TCT Nos. S-65161 and S-65162.[72]

The Court of Appeals found that:

With respect to the annotation of the MOA, paragraph 4 of the MOA itself expressly provides that the obligations assumed under paragraphs 2.b, 2.c and 2.d thereof (par. 2.d contains the right of way provision) shall be binding upon all the assigns, heirs and successors of the parties, and that the MOA shall be annotated on TCT No. 65161 and TCT No. 65162, which became eventually TCT No. 5333 and TCT No. 5331. No mention is made of the other titles to be owned and/or acquired by defendant-appellant, and the omission cannot be supplied by construction.[73]

We agree. Indeed, the MOA only require that it be annotated on TCT Nos. 65161 (now 5333) and 65162 (now 5331). Thus, there should be no reason to extend this requirement to other titles not mentioned in the MOA.

Petitioners also take exception to the refusal of the lower court to annotate the judgment in the case below on all eighteen (18) titles covering the parcels of land comprising Ayala Southvale Subdivision.The underlying intention of petitioners is to have the easement of right-of-way annotated on all of the titles. Respondents counter that there is no such need because the right-of-way has been delineated and segregated and, hence, there is no reason to annotate the same on the titles that are not affected thereby.

Again, we find no merit in petitioners contention, especially since the easement of right-of-way as offered by respondent is more than adequate for the needs of the subject property, and that it was properly constituted without imposing unnecessary burden on the other properties of respondents. There can really be no justification for annotation on the titles that are not subject to the easement.

Finally, we come to the tenth and last error assigned by petitioners, i.e., that the trial court erred in ordering the cancellation of the notice of lis pendens on TCT Nos. T-5331 to T-5334 and all titles derived therefrom. In its Resolution,[74] the Court of Appeals held that:

Nevertheless, the appellants argument that the trial court committed grave abuse of discretion in ordering the cancellation of the notices of lis pendens before finality of the assailed judgment in the absence of good reasons to justify execution pending appeal is untenable. The order of cancellation of the notices of lis pendens was not issued by the trial court under Section 2, Rule 38 of the Rules of Court regarding execution pending appeal which requires the existence of good reasons, but under Section 24 of Rule 14 and Section 77 of PD 1529 which allow the trial court to cancel notice of lis pendens even before final resolution of the case on the merits upon finding that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be registered. (Underscoring ours)

We find no cogent reason to disturb the ruling of the Court of Appeals in this regard. In light of the foregoing discussion, the trial court did not abuse, gravely or otherwise, its discretion when it allowed the cancellation of the annotations. Accordingly, neither did the Court of Appeals err when it affirmed the order of the trial court on the finding that there was no longer any necessity to protect the rights of petitioners over the titles that were either not affected by the easement or not mentioned in the MOA.

WHEREFORE, in view of all the foregoing, the instant petition for review is DENIED and the Decision of the Court of Appeals dated April 30, 1997 in CA-G.R. CV No. 48870 is AFFIRMED in toto.No pronouncement as to costs.

SO ORDERED.

NUISANCE

CLR-PROPERTYLIST OF CASES

2015-2016CASES:

KINDS/NATURE OF PROPERTY/ACCESSION/POSSESSION/OWNERSHIP

1. Fels Energy Inc vs. Province of Batangas- --------Feb. 16, 2007

2. Davao Sawmill Co. vs. Castillo----------------------61 Phil 709

3. Board of Assessment Appeals QC vs. Meralco----10 SCR 68

4. Rep vs Lat Vda. De Castillo-------------------------- June 30, 1988

5. Yap vs Tanada----------------------------------------- July 18, 1988

6. Sec. of DENR vs. Yap--------------------------------- Oct. 8, 2008

7. Pasiño vs. Monterroyo-------------------------------- July 31, 2008

8. Land Bank vs. Rep------------------------------------ Feb. 4, 2008

9. Villarico vs. Sarmiento---------------------------------Nov 11 2004

10. Laurel vs. Garcia--------------------------------------- July 25, 1990

11 Lopez vs. Espinosa Sept. 4, 2009

12 Cabrera vs. Getarueda April 21, 2009

13 Padilla vs. Velasco Jan. 19, 2009

14 Sps. Lopez vs. Sps. Lopez Nov. 25, 2009

15 Sps. Narvaez vs. Sps. Alciso July 27, 2009

16 Heirs of Limense vs. Vda. De Ramos

Oct. 28, 2009

17 Sulo sa Nayon vs. Nayong Pilipino Foundation

Jan. 20, 2009

18 Sps. Macasaet vs. Sps. Macasaet

Sept. 30, 2004

19 Sps. Nuguid vs. CA and Pecson Pecson vs. CA

Feb. 13, 2005May 26, 1995

20 Garcia vs. CA Aug. 10, 1999

21 Caisip vs. People Nov. 18, 1970

22 German Mgt. and Services vs. CA

Sept. 14, 1989

23 Custodio vs. CA Feb. 9, 1996

24 Ignacio vs. Hilario April 30, 1946

25 Filipinas Colleges vs. Timbang Sept. 19, 1959

26 Bernardo vs. Bataclan Nov. 28, 1938

27 Manotoc-Realty vs. Tecson Aug. 19, 1988

28 Ignao vs. IAC Jan. 18, 1991

29 MWSS vs. CA Aug. 25, 1986

30 Azarcon vs. Eusebio April 29, 1959

31 Martinez vs. Baganus 28 Phil 50

32 Reynante vs. CA April 08, 1992

33 Ronquillo vs. CA March 20, 1991

34 Agustin vs. IAC July 5, 1990

35 Borbajo v. Hiddenview Homeowners

Jan. 31, 2005

36 Aneco Realty vs. Landex Devt. July 28, 2008

37 Pada-Kilario vs. CA Jan. 19, 2000

38 Tayag vs. Yuseco 97 Phil 712

39 Alviola vs. CA 289 SCRA 537

40 Rep. vs. Santos III Nov. 12, 2012

41 Guizon vs. City of Manila 72 Phil 437

42 Chavez vs. PEA

43 Rep. Vs. Heirs of Luisa Villa Abrille

May 7, 1976

44 Martinez vs. Mun. Of San Mateo 6 Phil 3

44 Vda. De Roxas vs. Our Lady’s foundation, Inc.

March 6, 2013

45 Tuatis vs. Sps. Escol October 27, 2009

46 Sps. Canezo vs. Sps. Bautista Sept. 1, 2010

47 Jagualing vs. CA 194 SCRA 607

48 Bernardo vs. Bataclan 66 Phil 590

49 Ballatan vs. CA March 2, 1999

50 Grande vs. CA 115 Phil 521

QUIETING OF TITLE:

1. Mananquil vs. Maico- Nov. 21, 2012

2. RAGASA vs. ROA and the EX-OFFICIO SHERIFF OF QC , June 30, 2006

3. TEOFISTO OÑO, ET. ALS. vs. VICENTE N. LIM, March 9, 2010

CO-OWNERSHIP/PARTITION/POSSESSION;

4. Pardell vs. Bartolome- 23 P 450

5. Adlawan v. Adlawan Jan. 20, 2006; G.R. No. 161916

6. Galvez V. CA et.al.G.R. No. 157954, March 24, 2006

7. Resuena et.al. v. CA, et.al.G.R. No. 128338, March 28, 2005

8. Sps. Si vs. CA- 342 SCRA 653

9. Aguirre et.al. v. CA - G.R. No. 122249, Jan. 29, 2004

10. Canezo v. Bautista - Sept. 1, 2010; 629 S 580

11. Mariano vs. CA-May 28, 1993

12. Salvador vs. CA- April 5, 1995

13. Vda. De Ape vs. CA- April 15, 2005

14. Ramirez vs. Ramirez – 20 SCRA 384

15. Acabal vs. Acabal – March 31, 2005

16. Paulmitan vs. CA- Nov. 1992

17. Delicano vs. Pechaten- Sept. 7, 2011

18. Notarte vs. Notarte- Aug. 29, 2012

19. Casilang vs. Casilang-Dizon- Feb. 20, 2012

USUFRUCT;

20.Orozco vs. Araneta- 90 Phil 399

21.NHA vs. CA- 456 SCRA 17

22.Fabie vs. David- 75 Phil 536

23. Seifert vs. Bachrach- 79 P 748

24.MORALIDAD vs. PERNES, Respondents. August 3, 2006

25.Hemedes vs. CA- Oct. 8, 1999

************************************************************************

EASEMENTS;

26. Castro vs. Monson- Feb. 2, 2011

27. Gancayco vs. City Govt. of QC- #184478- Oct. 11, 2011

28. Dichoso vs. Marcos – April 11, 2011

29. Quintanilla vs. Abangan- Feb. 12, 2008

30. Sps. Salinbajon vs. Tan – Jan. 21, 2010

31. Villanueva vs. Velasco – November 27, 2000

32. Sabio vs. Int’l Corp. Bank- Sept. 4, 2001

NUISANCE

33. Monteverde vs. Generoso – 52 P 123

34. Velasco vs. Manila Electric- 40 SCRA 342

35. Hidalgo Ent. Vs. Balandan- 91 P 488

36. Timoner vs. People- 125 SCRA 830

37. Clama vs. CA- 176 SCRA 555

38. AC Ent., Inc. vs. Frabelle Properties Corp.- 506 SCRA 625

39. Gancayco vs. City Govt. of QC- #184478- Oct. 11, 2011

MODES OF ACQUIRING OWNERSHIP

OCCUPATION/DONATIONS:

40. Pajunar vs. CA- 175 SCRA 464

41. Catabian vs. Tungcut- 11 P 49

42. Nepomuceno vs. CA- 139 SCRA 206

43. Matabuena vs. Cervantes- 38 SCRA 284

44. Arcaba vs. Batocael- Nov. 22, 2001

45. Beaterio vs. CA- 137 SCRA 459

46. Alejandro vs. Geraldez- Aug. 18, 1977

47. Puig vs. Penaflorida- Jan. 31, 1966

48. Gestopa vs. CA- ct. 5, 2000

49. Maglasang vs. Heirs of Corazon Cabatingan- June 5, 2002

50. Calanasan vs. Dolorito- Nov. 25, 2013