G.R. No. L-45425 April 29, 1939
That on December 29, 1934, Jose Gatchalian was required by
JOSE GATCHALIAN, ET AL., plaintiffs-appellants, vs. THE
COLLECTOR OF INTERNAL REVENUE, defendant-appellee.
The plaintiff brought this action to recover from the defendant
Collector of Internal Revenue the sum of P1,863.44, with legal
interest thereon, which they paid under protest by way of income
tax. They appealed from the decision rendered in the case on
October 23, 1936 by the Court of First Instance of the City of
Manila, which dismissed the action with the costs against them.
The case was submitted for decision upon the following stipulation
of facts:
Come now the parties to the above-mentioned case, through their
respective undersigned attorneys, and hereby agree to respectfully
submit to this Honorable Court the case upon the following
statement of facts:
1. That plaintiff are all residents of the municipality of Pulilan,
Bulacan, and that defendant is the Collector of Internal Revenue of
the Philippines;
2. That prior to December 15, 1934 plaintiffs, in order to enable
them to purchase one sweepstakes ticket valued at two pesos (P2),
subscribed and paid therefor the amounts as follows:
3. That immediately thereafter but prior to December 15, 1934,
plaintiffs purchased, in the ordinary course of business, from one of
the duly authorized agents of the National Charity Sweepstakes
Office one ticket bearing No. 178637 for the sum of two pesos (P2)
and that the said ticket was registered in the name of Jose
Gatchalian and Company;
4. That as a result of the drawing of the sweepstakes on December
15, 1934, the above-mentioned ticket bearing No. 178637 won one
of the third prizes in the amount of P50,000 and that the
corresponding check covering the above-mentioned prize of
P50,000 was drawn by the National Charity Sweepstakes Office in
favor of Jose Gatchalian & Company against the Philippine National
Bank, which check was cashed during the latter part of December,
1934 by Jose Gatchalian & Company;
5.
income tax examiner Alfredo David to file the corresponding
income tax return covering the prize won by Jose Gatchalian &
Company and that on December 29, 1934, the said return was
signed by Jose Gatchalian, a copy of which return is enclosed as
Exhibit A and made a part hereof;
6. That on January 8, 1935, the defendant made an assessment
against Jose Gatchalian & Company requesting the payment of the
sum of P1,499.94 to the deputy provincial treasurer of Pulilan,
Bulacan, giving to said Jose Gatchalian & Company until January
20, 1935 within which to pay the said amount of P1,499.94, a copy
of which letter marked Exhibit B is enclosed and made a part
hereof;
7. That on January 20, 1935, the plaintiffs, through their attorney,
sent to defendant a reply, a copy of which marked Exhibit C is
attached and made a part hereof, requesting exemption from
payment of the income tax to which reply there were enclosed
fifteen (15) separate individual income tax returns filed separately
by each one of the plaintiffs, copies of which returns are attached
and marked Exhibit D-1 to D-15, respectively, in order of their
names listed in the caption of this case and made parts hereof; a
statement of sale signed by Jose Gatchalian showing the amount
put up by each of the plaintiffs to cover up the attached and
marked as Exhibit E and made a part hereof; and a copy of the
affidavit signed by Jose Gatchalian dated December 29, 1934 is
attached and marked Exhibit F and made part thereof;
8. That the defendant in his letter dated January 28, 1935, a copy
of which marked Exhibit G is enclosed, denied plaintiffs' request of
January 20, 1935, for exemption from the payment of tax and
reiterated his demand for the payment of the sum of P1,499.94 as
income tax and gave plaintiffs until February 10, 1935 within which
to pay the said tax;
9. That in view of the failure of the plaintiffs to pay the amount of
tax demanded by the defendant, notwithstanding subsequent
demand made by defendant upon the plaintiffs through their
attorney on March 23, 1935, a copy of which marked Exhibit H is
enclosed, defendant on May 13, 1935 issued a warrant of distraint
and levy against the property of the plaintiffs, a copy of which
warrant marked Exhibit I is enclosed and made a part hereof;
10. That to avoid embarrassment arising from the embargo of the
property of the plaintiffs, the said plaintiffs on June 15, 1935,
through Gregoria Cristobal, Maria C. Legaspi and Jesus Legaspi,
paid under protest the sum of P601.51 as part of the tax and
penalties to the municipal treasurer of Pulilan, Bulacan, as
evidenced by official receipt No. 7454879 which is attached and
marked Exhibit J and made a part hereof, and requested defendant
that plaintiffs be allowed to pay under protest the balance of the
tax and penalties by monthly installments;
11. That plaintiff's request to pay the balance of the tax and
penalties was granted by defendant subject to the condition that
plaintiffs file the usual bond secured by two solvent persons to
guarantee prompt payment of each installments as it becomes
due;
12. That on July 16, 1935, plaintiff filed a bond, a copy of which
marked Exhibit K is enclosed and made a part hereof, to guarantee
the payment of the balance of the alleged tax liability by monthly
installments at the rate of P118.70 a month, the first payment
under protest to be effected on or before July 31, 1935;
13. That on July 16, 1935 the said plaintiffs formally protested
against the payment of the sum of P602.51, a copy of which
protest is attached and marked Exhibit L, but that defendant in his
letter dated August 1, 1935 overruled the protest and denied the
request for refund of the plaintiffs;
14. That, in view of the failure of the plaintiffs to pay the monthly
installments in accordance with the terms and conditions of bond
filed by them, the defendant in his letter dated July 23, 1935, copy
of which is attached and marked Exhibit M, ordered the municipal
treasurer of Pulilan, Bulacan to execute within five days the
warrant of distraint and levy issued against the plaintiffs on May
13, 1935;
15. That in order to avoid annoyance and embarrassment arising
from the levy of their property, the plaintiffs on August 28, 1936,
through Jose Gatchalian, Guillermo Tapia, Maria Santiago and
Emiliano Santiago, paid under protest to the municipal treasurer of
Pulilan, Bulacan the sum of P1,260.93 representing the unpaid
balance of the income tax and penalties demanded by defendant as
evidenced by income tax receipt No. 35811 which is attached and
marked Exhibit N and made a part hereof; and that on September
3, 1936, the plaintiffs formally protested to the defendant against
the payment of said amount and requested the refund thereof,
copy of which is attached and marked Exhibit O and made part
hereof; but that on September 4, 1936, the defendant overruled
the protest and denied the refund thereof; copy of which is
attached and marked Exhibit P and made a part hereof; and
16. That plaintiffs demanded upon defendant the refund of the
total sum of one thousand eight hundred and sixty three pesos and
forty-four centavos (P1,863.44) paid under protest by them but
that defendant refused and still refuses to refund the said amount
notwithstanding the plaintiffs' demands.
17. The parties hereto reserve the right to present other and
additional evidence if necessary.
The legal questions raised in plaintiffs-appellants' five assigned
errors may properly be reduced to the two following: (1) Whether
the plaintiffs formed a partnership, or merely a community of
property without a personality of its own; in the first case it is
admitted that the partnership thus formed is liable for the payment
of income tax, whereas if there was merely a community of
property, they are exempt from such payment; and (2) whether
they should pay the tax collectively or whether the latter should be
prorated among them and paid individually.
The Collector of Internal Revenue collected the tax under section
10 of Act No. 2833, as last amended by section 2 of Act No. 3761,
reading as follows:
SEC. 10. (a) There shall be levied, assessed, collected, and paid
annually upon the total net income received in the preceding
calendar year from all sources by every corporation, joint-stock
company, partnership, joint account (cuenta en participacion),
association or insurance company, organized in the Philippine
Islands, no matter how created or organized, but not including duly
registered general copartnership (compañias colectivas), a tax of
three per centum upon such income; and a like tax shall be levied,
assessed, collected, and paid annually upon the total net income
received in the preceding calendar year from all sources within the
Philippine Islands by every corporation, joint-stock company,
partnership, joint account (cuenta en participacion), association, or
insurance company organized, authorized, or existing under the them and paid individually, resulting in their exemption from the
laws of any foreign country, including interest on bonds, notes, or tax.
other interest-bearing obligations of residents, corporate or
otherwise: Provided, however, That nothing in this section shall be In view of the foregoing, the appealed decision is affirmed, with the
construed as permitting the taxation of the income derived from costs of this instance to the plaintiffs appellants. So ordered.
dividends or net profits on which the normal tax has been paid.
G.R. No. L-27933 December 24, 1968
The gain derived or loss sustained from the sale or other
disposition by a corporation, joint-stock company, partnership, DIVERSIFIED CREDIT CORPORATION, plaintiff-appellee,
joint account (cuenta en participacion), association, or insurance vs. FELIPE ROSADO and LUZ JAYME ROSADO, defendants-
company, or property, real, personal, or mixed, shall be appellants.
ascertained in accordance with subsections (c) and (d) of section
two of Act Numbered Two thousand eight hundred and thirty-three,
This appeal from a decision of the Court of First Instance of
as amended by Act Numbered Twenty-nine hundred and twenty-
Bacolod City, Negros Occidental (Civ. Case No. 7516 of that Court)
six.
was certified to us by the Court of Appeals (Second Division)
because the same involves no questions of fact.
The foregoing tax rate shall apply to the net income received by
every taxable corporation, joint-stock company, partnership, joint
The case had its origin in the Municipal Court of Bacolod City, when
account (cuenta en participacion), association, or insurance
the Diversified Credit Corporation filed an action to compel the
company in the calendar year nineteen hundred and twenty and in
spouses Felipe Rosado and Luz Jayme Rosado to vacate and
each year thereafter.
restore possession of a parcel of land in the City of Bacolod (Lot
62-B of Subdivision plan LRC-Psd-33823) that forms part of Lot No.
There is no doubt that if the plaintiffs merely formed a community 62 of the Bacolod Cadastre, and is covered by Transfer Certificate
of property the latter is exempt from the payment of income tax of Title No. 27083 in the name of plaintiff. After answer, claiming
under the law. But according to the stipulation facts the plaintiffs that the lot was defendants' conjugal property, the Municipal Court
organized a partnership of a civil nature because each of them put ordered defendants to surrender and vacate the land in litigation;
up money to buy a sweepstakes ticket for the sole purpose of to pay P100.00 a month from the filing of the complaint up to the
dividing equally the prize which they may win, as they did in fact in actual vacating of the premises; to pay P500.00 attorneys' fees
the amount of P50,000 (article 1665, Civil Code). The partnership and costs. Upon appeal to the Court of First Instance, the case was
was not only formed, but upon the organization thereof and the submitted on the following stipulation of facts (Rec. on App., pp.
winning of the prize, Jose Gatchalian personally appeared in the 59-60):
office of the Philippines Charity Sweepstakes, in his capacity as co-
partner, as such collection the prize, the office issued the check for
1. That Lot No. 62-B of Bacolod Cadastre belong to the thirteen co-
P50,000 in favor of Jose Gatchalian and company, and the said
owners, including the wife of the defendant herein, who owns
partner, in the same capacity, collected the said check. All these
1/13th part pro-indiviso;
circumstances repel the idea that the plaintiffs organized and
formed a community of property only.
2. That on May 11, 1964, Luz Jayme Rosado, wife of the defendant
Felipe Rosado, signed a Deed of Sale together with the co-owners
Having organized and constituted a partnership of a civil nature,
of the property to the plaintiff as shown by Exh. "A" for the
the said entity is the one bound to pay the income tax which the
plaintiff;
defendant collected under the aforesaid section 10 (a) of Act No.
2833, as amended by section 2 of Act No. 3761. There is no merit
in plaintiff's contention that the tax should be prorated among
3. That on the lot in question the defendant Felipe Rosado had built
a house sometime in 1957 without the whole property having been
previously partitioned among the thirteen (13) co-owners;
4. That the title of the property has already been transferred to the
plaintiff upon registration of the Deed of Sale in June, 1964, with
the Office of the Register of Deeds;
5. That demand was made by the plaintiff upon the defendant
Felipe Rosado and his wife Luz Jayme Rosado on October 19, 1964,
but until now the defendant Felipe Rosado has refused to vacate
the premises or to remove his house thereon as shown by Exh. "B"
for the plaintiff, on the grounds as he alleged in his answer that he
had built on the lot in question a conjugal house worth P8,000.00
which necessarily makes the lot on which it stands subject to
Article 158 of the Civil Code and on the point of view of equity that
the wife of the defendant Felipe Rosado received an aliquot share
of P2,400.00 only from the share and if the house were demolished
the defendant would suffer damage in the amount of P8,000.00;
6. That the portion of the lot on which the house stands, would
earn a monthly rental of P50.00;
7. That Felipe Rosado, husband of Luz Jayme, did not give his
conformity to the Deed of Sale, Exh. "A".
8. That on October 31, 1964, the defendant Felipe Rosado
requested the plaintiff in the letter, Exh. "C" for the plaintiff, for a
period of six (6) months within which to vacate the premises.
9. That the letter was not answered by the plaintiff and they did
not accept the offer, and on November 25, 1964, they filed a
complaint before the Municipal Court which proves that plaintiff
neglected the offer;
The Court of First Instance in its decision rejected the claim of
ownership advanced by Rosado, based upon the construction of a
house on the disputed lot by the conjugal partnership of the
Rosado spouses, which allegedly converted the land into conjugal
property under Article 158, paragraph 2 of the present Civil Code
of the Philippines; further held that defendants were in estoppel to
claim title in view of the letter Exhibit C requesting for six (6)
months within which to vacate the premises, and affirmed the
decision of the Inferior Court. Defendant Felipe Rosado resorted to
the Court of Appeals, and his appeal (CA-G.R. No. 37398-R) is the
one now before us. He assigns four alleged errors:
(a) The lower court erred in not holding that Exhibit "A" is null and
void, since upon the construction of the conjugal dwelling thereon,
the conjugal partnership of the defendant-appellant Felipe Rosado
and Luz Jayme became the owner of the share of Luz Jayme in Lot
No. 62-B, Bacolod Cadastre;
(b) The trial court erred in ordering the defendant-appellant to
vacate Lot No. 62-B and in not holding that Exhibit "A" is null and
void because as the legal usufructuary of the share of Luz Jayme
Rosado in Lot 62-B, Bacolod Cadastre, the conjugal partnership,
managed and administered by the defendant-appellant Felipe
Rosado can not be deprived of its usufructuary rights by any
contract between Luz Jayme and the plaintiff-appellee;
(c) The trial court erred in not holding that the defendant-appellant
should be reimbursed the value of the conjugal house constructed
on Lot 62-B; and
(d) The lower court erred in ordering the defendant-appellant to
pay attorneys' fees in the amount of five hundred (P500.00) pesos.
It can be seen that the key question is whether by the construction
of a house on the lot owned in common by the Jaymes, and sold by
them to the appellant corporation, the land in question or a 1/13th
part of it became conjugal property.
Appellant, husband of vendor Luz Jayme, claims the affirmative
invoking the second paragraph of Article 158 of the Civil Code of
the Philippines, prescribing that:
ART. 158. Improvements, whether for utility or adornment, made
on the separate property of the spouses through advancements
from the partnership or through the industry of either the husband
or the wife, belong to the conjugal partnership.
Buildings constructed, at the expense of the partnership, during
the marriage on land belonging to one of the spouses, also pertain
to the partnership, but the value of the land shall be reimbursed to
the spouse who owns the same.
Rosado further contends that as the building of the house at the
expense of the conjugal partnership converted the 1/13 undivided
share on his wife in Lot 62-B into property of the community, the
deed of sale of May 11, 1964 in favor of the appellee corporation
was void in so far as said 1/13 share is concerned, because his
wife, Luz Jayme, had ceased to own such share from and after the
building of the house; and Rosado, as manager of the conjugal
partnership, had not participated in the sale, nor subsequently
ratified the same.
We find appellant's thesis legally untenable. For it is a basic
principle in the law of co-ownership, both under the present Civil
Code as in the Code of 1889, that no individual co-owner can claim
title to any definite portion of the land or thing owned in common
until the partition thereof. Prior to that time, all that the co-owner
has is an ideal, or abstract, quota or proportionate share in the
entire thing owned in common by all the co-owners. The principle
is emphasized by the rulings of this Court. In Lopez vs. Ilustre, 5
Phil. 567, it was held that while a co-owner has the right to freely
sell and dispose of his undivided interest, he has no right to sell a
divided part of the real estate owned in common. "If he is the
owner of an undivided half of a tract of land, he has the right to
sell and convey an undivided half, but he has no right to divide the
lot into two parts, and convey the whole of one part by metes and
bounds." The doctrine was reiterated in Mercado vs. Liwanag, L-
14429, June 20, 1962, holding that a co-owner may not convey a
physical portion of the land owned in common. And in Santos vs.
Buenconsejo, L-20136, June 23, 1965, it was ruled that a co-owner
may not even adjudicate to himself any determinate portion of land
owned in common.
Since the share of the wife, Luz Jayme, was at no time physically
determined, it cannot be validly claimed that the house constructed
by her husband was built on land belonging to her, and Article 158
of the Civil Code can not apply. Certainly, on her 1/13 ideal or
abstract undivided share, no house could be erected. Necessarily,
the claim of conversion of the wife's share from paraphernal to
conjugal in character as a result of the construction must be
rejected for lack of factual or legal basis.
It is the logical consequence of the foregoing ruling that the lower
court did not err in holding that the appellant was bound to vacate
the land without reimbursement, since he knew that the land
occupied by the house did not belong exclusively to his wife, but to
the other owners as well, and there is no proof on record that the
house occupied only 1/13 of the total area. The construction was
not done in good faith.
WHEREFORE, the judgment of the Court of First Instance is
affirmed. Costs against appellant Felipe Rosado.
G.R. No. L-18009 January 10, 1923
EMILIO PUNSALAN, ET AL., plaintiffs-appellants,
vs. C. BOOT LIAT, ET AL., defendants-appellants.
On or about the 13th of July, 1920, a Moro by the name of Tamsi
saw from the Cawit-Cawit shores in the Province of Zamboanga, a
big bulky object in the distance which attracted his attention.
Thereupon, together with another Moro named Bayrula, he went in
a small boat to investigation and found it to be a large fish. They
then returned to shore, where they met other Moros and requested
their help to catch the fish. They went in three small boats, there
being then in one, seven in the other, and five in the third, twenty-
two men, in all, twenty-one of whom are plaintiffs herein, and the
remaining one named Ahamad is defendant. After having arrived at
the place where the fish was, which was found to be a whale, they
proceeded to pull it toward the shore up to the mouth of the river,
where they quartered it, having found in its abdomen a great
quantity of ambergris, which was placed in three sacks, two of
which were full and the other half full, and taken to the house of
Maharaja Butu, where they left it to the care of Ahamad. Then the
contents of the two full sacks were placed in three trunks. All of
these twenty-two persons made an agreement that they were to
be the sole owners of this ambergris and that none of them could
sell it without the consent of the rest. As to the half sack of amber
they agreed that some of them should take it to Zamboanga to sell
for the purpose of ascertaining the market price of the ambergris,
in order that they might dispose of the rest accordingly. Some of
them, with Tamsi in charge, went to Zamboanga to sell the half
sack of amber where they did dispose of it to a Chinaman, Cheong
Tong, for the sum of P2,700, which amount was distributed among
all the parties in interest. Then they offered to sell for the sum of
P12,000 to the Chinamen, Cheong Tong and Lim Chiat, the rest of
the amber contained in the two sacks which had been left in the
house of Maharaja Butu, for safekeeping, and a document (Exhibit
A) to this effect was executed by Lim Chiat and Cheong Tong, on
the one hand, and Tamsi, Imam Lumuyod, and Imam Asakil, on
the other. Thereupon they went to Cawit-Cawit on board the
launch Ching-kang to get the amber so sold.
It appears that there were other people in Zamboanga who knew
of the existence of this ambergris in the house of Maharaja Butu.
While the above related events were taking place, Mr. Henry E.
Teck, who was one of those having knowledge of the existence of
this amber in Cawit-Cawit and of the fact that the launch Ching-
kang had left for Cawit-Cawit, proposed to the master of the
revenue cutter Mindoro to go to Cawit-Cawit to seize some
supposedly contraband opium. After transmitting this information
to the Collector of Customs, he, the master of the Mindoro,
immediately proceeded to Cawit-Cawit. There were on board the
vessel Mr. Teck, some Chinamen, among whom were C. Boon Liat,
Ong Chua, and Go Tong, and some Moros who, according to Mr.
Teck, were to assist in the arrest of the smugglers. Upon the arrival
of the Mindoro at Cawit-Cawit, the master, accompanied by Mr.
Teck and some Moros, went to the house of Maharaja Butu. As is to
be presumed, this information about the supposed contraband
opium was but a trick to have the Mindoro at their disposal. The
master proceeded to search the house, stating that he had
information to the effect that there was contraband opium and as a
result of the search, he found three large trunks containing a black
substance which had a bad odor. He then asked the owner of the
house to whom those three trunks belonged, and the latter pointed
to Ahamad who was present and who stated that the contents
came from the abdomen of a large fish. The master, however, said
that it was opium and told Ahamad that he would take the three
trunks on board the ship. Then Ahamad and other Moros asked
permission of the master to accompany him on the voyage to
Zamboanga, to which the master consented. When already on
board and during the voyage the master became convinced that
the contents of the three trunks were not opium.
During the voyage, Mr. Teck offered to purchase the amber
contained in the three trunks, but Ahamad refused to sell it for the
reason that he was not the sole owner thereof, but owned it in
common with other persons who were in Zamboanga. However Mr.
Teck, aided by his companions who wielded some influence in
Zamboanga, insisted that Ahamad should sell them the amber,
telling him not to be afraid of his companions, as he would answer
for whatever might happen. With this promise of protection,
Ahamad decided to sell the amber for P7,500 and received P2,500
as part payment on account of this price, a bill of sale having been
signed by Ahamad, Maharaja Butu and three Moros more. The
balance of this price was paid later.
When Cheong Tong, Lim Chiat, and the Moros who had gone to
Cawit-Cawit on board the launch Ching-kang arrived at the house
of Maharaja Butu, they found that the amber they had purchased
from Tamsi and his companions was no longer there.
The plaintiffs are twenty-one of the twenty-two Moros who had
caught the whale, and Lim Chiat and Cheong Tong, who had
purchased from Tamsi and his companions the amber contained in
the three trunks deposited in the house of Maharaja Butu for
safekeeping. They claim the 80-½ kilos of ambergris contained in
three trunks, or its value in the amount o P60,000, and damages in
the sum of P20,000. This action is brought against C. Boon Liat,
Ong Chua, Go Tong, Henry E. Teck, and the Moro, Ahamad, the
first four being the persons who purchased this same amber from
the one last named while on board the revenue cutter Mindoro.
It appears from the foregoing that the amber in question was the
undivided common property of the plaintiffs (with the exception of
Lim Chiat and Cheong Tong) and the defendant Ahamad. This
common ownership was acquired by occupancy (arts. 609 and 610
of the Civil Code), so that neither Tamsi, Imam Lumuyod, or Imam
Asakil had any right to sell it, as they did, to Lim Chiat and Cheong
Tong, nor had the Moro Ahamad any right to sell this same amber,
as he did, to C. Boon Liat, Ong Chua, Go Tong, and Henry E. Teck.
There was an agreement between the coowners not to sell this
amber without the consent of all. Both sales having been made
without the consent of all the owners, the same have no effect,
except as to the portion pertaining to those who made them (art.
399, Civil Code).
Although the original complaint filed in this case was entitled as
one for replevin, in reality, from its allegations, the action herein
brought is the ordinary one for the recovery of the title to, and
possession of, this amber. It is no bar to the bringing of this action
that the defendant Ahamad is one of the coowners. The action for
recovery which each coowner has, derived from the right of
ownership inherent in the coownership, may be exercised not only
against strangers but against the coowners themselves, when the
latter perform, with respect to the thing held in common, acts for
their exclusive benefit, or of exclusive ownership, or which are
prejudicial to, and in violation of, the right of the community.
(Decision of the supreme court of Spain of June 22, 1892.) In this
case the selling of the amber by the defendant Ahamad as his
exclusive property and his attitude in representing himself to be
the sole owner thereof place him in the same position as the
stranger who violates any right of the community. He is not sued in
this case as a coowner, for the cause of action is predicated upon
the fact that he has acted not as a coowner, but as an exclusive
owner of the amber sold by him.
As to the sale made by Ahamad, it is urged that the purchaser
acted in good faith. It is contended that the latter did not know
that the amber belonged to some others besides Ahamad. But the
evidence shows otherwise. Henry E. Teck himself admitted that on
the occasion of the sale of the amber he really had promised
Ahamad to protect him, and although he said that the promise
made by him had reference to the contingency of the amber
proving to be opium, as the master of the revenue
cutter Mindoro believed, this is incredible, because he could not
make Ahamad such a promise, nor could such a promise, if made,
have any influence on the mind of Ahamad, inasmuch as the latter
knew that the amber was not opium. If, as Henry E. Teck admits,
he made Ahamad this promise of protection, it should have been
only on account of Ahamad's refusal to sell the amber due to the
fact that he was not the sole owner thereof.
With regard to the action of the trial court in not admitting Exhibits
1 and 2 offered by the defendants, we believed that it was no
error. These documents are affidavits signed by Paslangan, and the
best evidence of their contents was the testimony of Paslangan
himself whom the plaintiffs had the right to cross-examine.
Moreover, they are substantially the same as the statements made
by Paslangan at the trial when testifying as witness for the
defendants, and for this reason the ruling of the trial court
excluding these documents would not, at all events, affect the
merits of the case.
In the complaint it is alleged that the value of the amber is
P60,000. Upon the evidence adduced on this point, and taking into
account that the defendant, Henry E. Teck, himself, testifying as
witness, has stated that this amber was worth P1,200 per kilo, we
accept this estimated value set forth in the complaint.
The decision of the court below contains the following order for
judgment:
Wherefore, it is the judgment and order of the court that the
defendants C. Boon Liat, Henry E. Teck, Ahamad Ong Chua, and Go
Tong deliver to the plaintiffs, Emilio Punsalan, Bayrula, Daring
Gumuntol, Mohamad, Insael, Dunkaland, Tahil, Dambul, Dagan,
Sabay, Sahibul, Pingay, Mujahad, Amilol, Baraula, Saraban, Lim
Chiat, and Cheong Tong twenty-twenty-first (20/21) of the amber
in question, or, in default thereof, to pay them its value of twelve
thousand pesos (P12,000), less one-twenty-first of said amount.
Therefore, the judgment appealed from is affirmed, with the only
modification that the value of the amber which is the subject-
matter of this action shall be P60,000, without special finding as to
the costs of this instance. So ordered.
G.R. No. L-4656 November 18, 1912
RICARDO PARDELL Y CRUZ and
VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-appellees,
vs. GASPAR DE BARTOLOME Y ESCRIBANO and
MATILDE ORTIZ Y FELIN DE BARTOLOME, defendants-
appellants.
This is an appeal by bill of exceptions, from the judgment of
October 5, 1907, whereby the Honorable Dionisio Chanco, judge,
absolved the defendants from the complaint, and the plaintiff from
a counterclaim, without special finding as to costs.
Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de
Pardell, the first of whom, absent in Spain by reason of his
employment, conferred upon the second sufficient and ample
powers to appear before the courts of justice, on June 8, 1905, in
his written complaint, alleged that the plaintiff, Vicente Ortiz, and
the defendant, Matilde Ortiz, are the duly recognized natural
daughters of the spouses Miguel Ortiz and Calixta Felin y Paula who
died in Vigan, Ilocos Sur, in 1875 and 1882, respectively; that
Calixta Felin, prior to her death, executed on August 17, 1876, a
nuncupative will in Vigan whereby she made her four children,
named Manuel, Francisca, Vicenta, and Matilde, surnamed Ortiz y
Felin, her sole and universal heirs of all her property; that, of the
persons enumerated, Manuel died before his mother and Francisca
a few years after her death, leaving no heirs by force of law, and
therefore the only existing heirs of the said testatrix are the
plaintiff Vicenta Ortiz and the defendant Matilde Ortiz; that, aside
from some personal property and jewelry already divided among
the heirs, the testatrix possessed, at the time of the execution of
her will, and left at her death the real properties which, with their
respective cash values, are as follows:
That, on or about the first months of the year 1888, the
defendants, without judicial authorization, nor friendly or
extrajudicial agreement, took upon themselves the administration
and enjoyment of the said properties and collected the rents, fruits,
and products thereof, to the serious detriment of the plaintiffs'
interest; that, notwithstanding the different and repeated demands
extrajudicially made upon Matilde Ortiz to divide the
aforementioned properties with the plaintiff Vicente and to deliver
to the latter the one-half thereof, together with one-half of the
fruits and rents collected therefrom, the said defendant and her
husband, the self-styled administrator of the properties mentioned,
had been delaying the partition and delivery of the said properties
by means of unkept promises and other excuses; and that the
plaintiffs, on account of the extraordinary delay in the delivery of
one-half of said properties, or their value in cash, as the case
might be, had suffered losses and damages in the sum of P8,000.
Said counsel for the plaintiffs therefore asked that judgment be
rendered by sentencing the defendants, Gaspar de Bartolome, and
Matilde Ortiz Felin de Bartolome, to restore and deliver to the
plaintiffs one-half of the total value in cash, according to appraisal,
of the undivided property specified, which one-half amounted
approximately to P3,948, or if deemed proper, to recognize the
plaintiff Vicenta Ortiz to be vested with the full and absolute right
of ownership to the said undivided one-half of the properties in
question, as universal testamentary heir thereof together with the
defendant Matilde Ortiz, to indemnify the plaintiffs in the sum of
P8,000, for losses and damages, and to pay the costs.
Counsel for the defendants, in his answer denied the facts alleged
in paragraphs 1, 4, 6, 7, and 8 thereof, inasmuch as, upon the
death of the litigating sister's brother Manuel, their mother, who
was still living, was his heir by force of law, and the defendants had
never refused to give to the plaintiff Vicente Ortiz her share of the
said properties; and stated that he admitted the facts alleged in
paragraph 2, provided it be understood, however, that the
surname of the defendant's mother was Felin, and not Feliu, and
that Miguel Ortiz died in Spain, and not in Vigan; that he also
admitted paragraph 3 of the complaint, with the difference that the
said surname should be Felin, and likewise paragraph 5, except the
part thereof relating to the personal property and the jewelry, since
the latter had not yet been divided; that the said jewelry was in
the possession of the plaintiffs and consisted of: one Lozada gold
chronometer watch with a chain in the form of a bridle curb and a
watch charm consisting of the engraving of a postage stamp on a
stone mounted in gold and bearing the initials M. O., a pair of cuff
buttons made of gold coins, four small gold buttons, two finger
rings, another with the initials M. O., and a gold bracelet; and that
the defendants were willing to deliver to the plaintiffs, in
conformity with their petitions, one-half of the total value in cash,
according to appraisement, of the undivided real properties
specified in paragraph 5, which half amounted to P3,948.
In a special defense said counsel alleged that the defendants had
never refused to divide the said property and had in fact several
years before solicited the partition of the same; that, from 1886 to
1901, inclusive, there was collected from the property on Calle
Escolta the sum of 288 pesos, besides a few other small amounts
derived from other sources, which were delivered to the plaintiffs
with other larger amounts, in 1891, and from the property on Calle
Washington, called La Quinta, 990.95 pesos, which proceeds,
added together, made a total of 1,278.95 pesos, saving error or
omission; that, between the years abovementioned, Escolta, and
that on Calle Washington, La Quinta, 376.33, which made a total of
1,141.71, saving error or omission; that, in 1897, the work of
reconstruction was begun of the house on Calle Escolta, which
been destroyed by an earthquake, which work was not finished
until 1903 and required an expenditure on the part of the
defendant Matilde Ortiz, of 5,091.52 pesos; that all the collections
made up to August 1, 1905, including the rent from the stores,
amounted to only P3,654.15, and the expenses, to P6,252.32,
there being, consequently, a balance of P2,598.17, which divided
between the sisters, the plaintiff and the defendant, would make
the latter's share P1,299.08; that, as shown by the papers kept by
the plaintiffs, in the year 1891 the defendant Bartolome presented
to the plaintiffs a statement in settlements of accounts, and
delivered to the person duly authorized by the latter for the
purpose, the sum of P2,606.29, which the said settlement showed
was owing his principals, from various sources; that, the defendant
Bartolome having been the administrator of the undivided property
claimed by the plaintiffs, the latter were owing the former legal
remuneration of the percentage allowed by law for administration;
and that the defendants were willing to pay the sum of P3,948,
one-half of the total value of the said properties, deducting
therefrom the amount found to be owing them by the plaintiffs,
and asked that judgment be rendered in their favor to enable them
to recover from the latter that amount, together with the costs and
expenses of the suit.
The defendants, in their counter claim, repeated each and all of the
allegations contained in each of the paragraphs of section 10 of
their answer; that the plaintiffs were obliged to pay to the
administrator of the said property the remuneration allowed him by
law; that, as the revenues collected by the defendants amounted
to no more than P3,654.15 and the expenditures incurred by them,
to P6,252.32, it followed that the plaintiffs owed the defendants
P1,299.08, that is one-half of the difference between the amount
collected from and that extended on the properties, and asked that
judgment be therefore rendered in their behalf to enable them to
collect this sum from the plaintiffs, Ricardo Pardell and Vicenta
Ortiz, with legal interest thereon from December 7, 1904, the date
when the accounts were rendered, together with the sums to which
the defendant Bartolome was entitled for the administration of the
undivided properties in question.
By a written motion of August 21, 1905, counsel for the plaintiffs
requested permission to amend the complaint by inserting
immediately after the words "or respective appraisal," fifth line of
paragraph 5, the phrase "in cash in accordance with the assessed
value," and likewise further to amend the same, in paragraph 6
thereof, by substituting the following word in lieu of the petition for
the remedy sought: "By reason of all the foregoing, I beg the court
to be pleased to render the judgment by sentencing the
defendants, Gaspar de Bartolome and Matilde Ortiz Felin de
Bartolome, to restore and deliver to the plaintiffs an exact one-half
of the total vale of the undivided properties described in the
complaint, such value to be ascertained by the expert appraisal of
two competent persons, one of whom shall be appointed by the
plaintiffs and the other by the defendants, and, in case of
disagreement between these two appointees such value shall be
determined by a third expert appraiser appointed by the court, or,
in a proper case, by the price offered at public auction; or, in lieu
thereof, it is requested that the court recognize the plaintiff,
Vicenta Ortiz, to be vested with a full and absolute right to an
undivided one-half of the said properties; furthermore, it is prayed
that the plaintiffs be awarded an indemnity of P8,000 for losses
and damages, and the costs." Notwithstanding the opposition of
the defendants, the said amendment was admitted by the court
and counsel for the defendants were allowed to a period of three
days within which to present a new answer. An exception was
taken to this ruling.
The proper proceedings were had with reference to the valuation of
the properties concerned in the division sought and incidental
issues were raised relative to the partition of some of them and
their award to one or the other of the parties. Due consideration
was taken of the averments and statements of both parties who
agreed between themselves, before the court, that any of them
might at any time acquire, at the valuation fixed by the expert
judicial appraiser, any of the properties in question, there being
none in existence excluded by the litigants. The court, therefore,
by order of December 28, 1905, ruled that the plaintiffs were
entitled to acquire, at the valuation determined by the said expert
appraiser, the building known as La Quinta, the lot on which it
stands and the warehouses and other improvements comprised
within the inclosed land, and the seeds lands situated in the
pueblos of Vigan and Santa Lucia; and that the defendants were
likewise entitled to acquire the house on Calle Escolta, the lot on
Calle Magallanes, and the three parcels of land situated in the
pueblo of Candon.
After this partition had been made counsel for the defendants, by a
writing of March 8, 1906, set forth: That, having petitioned for the
appraisement of the properties in question for the purpose of their
partition, it was not to be understood that he desired from the
exception duly entered to the ruling made in the matter of the
amendment to the complaint; that the properties retained by the
defendants were valued at P9,310, and those retained by the
plaintiffs, at P2,885, one-half of which amounts each party had to
deliver to the other, as they were pro indiviso properties; that,
therefore, the defendants had to pay the plaintiffs the sum of
P3,212.50, after deducting the amount which the plaintiffs were
obliged to deliver to the defendants, as one-half of the price of the
properties retained by the former; that, notwithstanding that the
amount of the counterclaim for the expenses incurred in the
reconstruction of the pro indiviso property should be deducted from
the sum which the defendants had to pay the plaintiffs, the former,
for the purpose of bringing the matter of the partition to a close,
would deliver to the latter, immediately upon the signing of the
instrument of purchase and sale, the sum of P3,212.50, which was
one-half of the value of the properties alloted to the defendants;
such delivery, however, was not to be understood as a
renouncement of the said counterclaim, but only as a means for
the final termination of the pro indiviso status of the property.
The case having been heard, the court on October 5, 1907,
rendered judgment holding that the revenues and the expenses
were compensated by the residence enjoyed by the defendant
party, that no losses or damages were either caused or suffered,
nor likewise any other expense besides those aforementioned, and
absolved the defendants from the complaint and the plaintiffs from
the counterclaim, with no special finding as to costs. An exception
was taken to this judgment by counsel for the defendants who
moved for a new trial on the grounds that the evidence presented
did not warrant the judgment rendered and that the latter was
contrary to law. This motion was denied, exception whereto was
taken by said counsel, who filed the proper bill of exceptions, and
the same was approved and forwarded to the clerk of this court,
with a transcript of the evidence.
Both of the litigating sisters assented to a partition by halves of the
property left in her will by their mother at her death; in fact, during
the course of this suit, proceedings were had, in accordance with
the agreement made, for the division between them of the said
hereditary property of common ownership, which division was
recognized and approved in the findings of the trial court, as shown
by the judgment appealed from.
The issues raised by the parties, aside from said division made
during the trial, and which have been submitted to this court for
decision, concern: (1) The indemnity claimed for losses and
damages, which the plaintiffs allege amount to P8,000, in addition
to the rents which should have been derived from the house on
Calle Escolta, Vigan; (2) the payment by the plaintiffs to the
defendants of the sum of P1,299.08, demanded by way of
counterclaim, together with legal interest thereon from December
7, 1904; (3) the payment to the husband of the defendant Matilde
Ortiz, of a percentage claimed to be due him as the administrator
of the property of common ownership; (4) the division of certain
jewelry in the possession of the plaintiff Vicenta Ortiz; and (5) the
petition that the amendment be held to have been improperly
admitted, which was made by the plaintiffs in their written motion
of August 21, 1905, against the opposition of the defendants,
through which admission the latter were obliged to pay the former
P910.50.lawphil.net
Before entering upon an explanation of the propriety or impropriety
of the claims made by both parties, it is indispensable to state that
the trial judge, in absolving the defendants from the complaint,
held that they had not caused losses and damages to the plaintiffs,
and that the revenues and the expenses were compensated, in
view of the fact that the defendants had been living for several
years in the Calle Escolta house, which was pro indiviso property of
joint ownership.
By this finding absolving the defendants from the complaint, and
which was acquiesced in by the plaintiffs who made no appeal
therefrom, the first issue has been decided which was raised by the
plaintiffs, concerning the indemnity for losses and damages,
wherein are comprised the rents which should have been obtained
from the upper story of the said house during the time it was
occupied by the defendants, Matilde Ortiz and her husband, Gaspar
de Bartolome.
Notwithstanding the acquiescence on the part of the plaintiffs,
assenting to the said finding whereby the defendants were
absolved from the complaint, yet, as such absolution is based on
the compensation established in the judgment of the trial court,
between the amounts which each party is entitled to claim from the
other, it is imperative to determine whether the defendant Matilde
Ortiz, as coowner of the house on Calle Escolta, was entitled, with
her husband, to reside therein, without paying to her coowner,
Vicenta Ortiz, who, during the greater part of the time, lived with
her husband abroad, one-half of the rents which the upper story
would have produced, had it been rented to a stranger.
Article 394 of the Civil Code prescribes:
Each coowner may use the things owned in common, provided he
uses them in accordance with their object and in such manner as
not to injure the interests of the community nor prevent the
coowners from utilizing them according to their rights.
Matilde Ortiz and her husband occupied the upper story, designed
for use as a dwelling, in the house of joint ownership; but the
record shows no proof that, by so doing, the said Matilde
occasioned any detriment to the interest of the community
property, nor that she prevented her sister Vicenta from utilizing
the said upper story according to her rights. It is to be noted that
the stores of the lower floor were rented and accounting of the
rents was duly made to the plaintiffs.
Each coowner of realty held pro indiviso exercises his rights over
the whole property and may use and enjoy the same with no other
limitation than that he shall not injure the interests of his
coowners, for the reason that, until a division be made, the
respective part of each holder can not be determined and every
one of the coowners exercises, together with his other
coparticipants, joint ownership over the pro indiviso property, in
addition to his use and enjoyment of the same.
As the hereditary properties of the joint ownership of the two
sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz, defendant, were
situated in the Province of Ilocos Sur, and were in the care of the
last named, assisted by her husband, while the plaintiff Vicenta
with her husband was residing outside of the said province the
greater part of the time between 1885 and 1905, when she left
these Islands for Spain, it is not at all strange that delays and
difficulties should have attended the efforts made to collect the
rents and proceeds from the property held in common and to
obtain a partition of the latter, especially during several years
when, owing to the insurrection, the country was in a turmoil; and
for this reason, aside from that founded on the right of
coownership of the defendants, who took upon themselves the
administration and care of the properties of joint tenancy for
purposes of their preservation and improvement, these latter are
not obliged to pay to the plaintiff Vicenta one-half of the rents
which might have been derived from the upper of the story of the
said house on Calle Escolta, and, much less, because one of the
living rooms and the storeroom thereof were used for the storage
of some belongings and effects of common ownership between the
litigants. The defendant Matilde, therefore, in occupying with her
husband the upper floor of the said house, did not injure the
interests of her coowner, her sister Vicenta, nor did she prevent
the latter from living therein, but merely exercised a legitimate
right pertaining to her as coowner of the property.
Notwithstanding the above statements relative to the joint-
ownership rights which entitled the defendants to live in the upper
story of the said house, yet in view of the fact that the record
shows it to have been proved that the defendant Matilde's
husband, Gaspar de Bartolome, occupied for four years a room or a
part of the lower floor of the same house on Calle Escolta, using it
as an office for the justice of the peace, a position which he held in
the capital of that province, strict justice, requires that he pay his
sister-in-law, the plaintiff, one half of the monthly rent which the
said quarters could have produced, had they been leased to
another person. The amount of such monthly rental is fixed at P16
in accordance with the evidence shown in the record. This
conclusion as to Bartolome's liability results from the fact that,
even as the husband of the defendant coowner of the property, he
had no right to occupy and use gratuitously the said part of the
lower floor of the house in question, where he lived with his wife,
to the detriment of the plaintiff Vicenta who did not receive one-
half of the rent which those quarters could and should have
produced, had they been occupied by a stranger, in the same
manner that rent was obtained from the rooms on the lower floor
that were used as stores. Therefore, the defendant Bartolome must
pay to the plaintiff Vicenta P384, that is, one-half of P768, the total
amount of the rents which should have been obtained during four
years from the quarters occupied as an office by the justice of the
peace of Vigan.
With respect to the second question submitted for decision to this
court, relative to the payment of the sum demanded as a
counterclaim, it was admitted and proved in the present case that,
as a result of a serious earthquake on August 15, 1897, the said
house on Calle Escolta was left in ruins and uninhabitable, and
that, for its reconstruction or repair, the defendants had to expend
the sum of P6,252.32. This expenditure, notwithstanding that it
was impugned, during the trial, by the plaintiffs, was duly proved
by the evidence presented by the defendants. Evidence,
unsuccessfully rebutted, was also introduced which proved that the
rents produced by all the rural and urban properties of common
ownership amounted, up to August 1, 1905, to the sum of
P3,654.15 which, being applied toward the cost of the repair work
on the said house, leaves a balance of P2,598.17, the amount
actually advanced by the defendants, for the rents collected by
them were not sufficient for the termination of all the work
undertaken on the said building, necessary for its complete repair
and to replace it in a habitable condition. It is therefore lawful and
just that the plaintiff Vicenta Ortiz, who was willing to sell to her
sister Matilde for P1,500, her share in the house in question, when
it was in a ruinous state, should pay the defendants one-half of the
amount expanded in the said repair work, since the building after
reconstruction was worth P9,000, according to expert appraisal.
Consequently, the counterclaim made by the defendants for the
payment to them of the sum of P1,299.08, is a proper demand,
though from this sum a reduction must be made of P384, the
amount of one-half of the rents which should have been collected
for the use of the quarters occupied by the justice of the peace, the
payment of which is incumbent upon the husband of the defendant
Matilde, as aforesaid, and the balance remaining, P915.08, is the
amount which the plaintiff Vicenta must pay to the defendants.
The defendants claim to be entitled to the collection of legal
interest on the amount of the counterclaim, from December 7,
1904. This contention can not be sustained, inasmuch as, until this
suit is finally decided, it could not be known whether the plaintiffs
would or would not be obliged to pay the sum whatever in
reimbursement of expenses incurred by the plaintiffs in the repair
work on the said house on Calle Escolta, whether or not the
defendants, in turn, were entitled to collect any such amount, and,
finally, what the net sum would be which the plaintiff's might have
to pay as reimbursement for one-half of the expenditure made by
the defendants. Until final disposal of the case, no such net sum
can be determined, nor until then can the debtor be deemed to be
in arrears. In order that there be an obligation to pay legal interest
in connection with a matter at issue between the parties, it must
be declared in a judicial decision from what date the interest will be
due on the principal concerned in the suit. This rule has been
established by the decisions of the supreme court of Spain, in
reference to articles 1108, 1109, and 1110 of the Civil Code,
reference on April 24, 1867, November 19, 1869, and February 22,
1901.
With regard to the percentage, as remuneration claimed by the
husband of the defendant Matilde for his administration of the
property of common ownership, inasmuch as no stipulation
whatever was made in the matter by and between him and his
sister-in-law, the said defendant, the claimant is not entitled to the
payment of any remuneration whatsoever. Of his own accord and
as an officious manager, he administered the said pro
indiviso property, one-half of which belonged to his wife who held it
in joint tenancy, with his sister-in-law, and the law does not allow
him any compensation as such voluntary administrator. He is
merely entitled to a reimbursement for such actual and necessary
expenditures as he may have made on the undivided properties
and an indemnity for the damages he may have suffered while
acting in that capacity, since at all events it was his duty to care for
and preserve the said property, half of which belonged to his wife;
and in exchange for the trouble occasioned him by the
administration of his sister-in-law's half of the said property, he
with his wife resided in the upper story of the house
aforementioned, without payment of one-half of the rents said
quarters might have produced had they been leased to another
person.
With respect to the division of certain jewelry, petitioned for by the
defendants and appellants only in their brief in this appeal, the
record of the proceedings in the lower court does not show that the
allegation made by the plaintiff Vicenta is not true, to the effect
that the deceased mother of the litigant sisters disposed of this
jewelry during her lifetime, because, had she not done so, the will
made by the said deceased would have been exhibited in which the
said jewelry would have been mentioned, at least it would have
been proved that the articles in question came into the possession
of the plaintiff Vicenta without the expressed desire and the
consent of the deceased mother of the said sisters, for the gift of
this jewelry was previously assailed in the courts, without success;
therefore, and in view of its inconsiderable value, there is no
reason for holding that the said gift was not made.
As regards the collection of the sum of P910.50, which is the
difference between the assessed value of the undivided real
properties and the price of the same as determined by the judicial
expert appraiser, it is shown by the record that the ruling of the
trial judge admitting the amendment to the original complaint, is in
accord with the law and principles of justice, for the reason that
any of the coowners of a pro indiviso property, subject to division
or sale, is entitled to petition for its valuation by competent expert
appraisers. Such valuation is not prejudicial to any of the joint
owners, but is beneficial to their interests, considering that, as a
general rule, the assessed value of a building or a parcel of realty
is less than the actual real value of the property, and this being
appraiser to determine, in conjunction with the one selected by the
plaintiffs, the value of the properties of joint ownership. These two
experts took part in the latter proceedings of the suit until finally,
and during the course of the latter, the litigating parties agreed to
an amicable division of the pro indiviso hereditary property, in
accordance with the price fixed by the judicial expert appraiser
appointed as a third party, in view of the disagreement between
and nonconformity of the appraisers chosen by the litigants.
Therefore it is improper now to claim a right to the collection of the G.R. No. L-47996 May 9, 1941
said sum, the difference between the assessed value and that fixed
by the judicial expert appraiser, for the reason that the increase in
ENGRACIA LAVADIA Y OTROS, demandantes y apelados,
price, as determined by this latter appraisal, redounded to the
vs. ROSARIO COSME DE MENDOZA Y OTROS, demandados y
benefit of both parties.
apelantes.

In consideration of the foregoing, whereby the errors assigned to

Objeto de litigo entre los demandantes y los demandados en el
the lower court have been duly refuted, it is our opinion that, with
Juzgado de Primera Instancia de Laguna, fueron la posesion y
a partial reversal of the judgment appealed from, in so far as it
custodia de ciertas alhajas que unas seis señoras piadosas del
absolves the plaintiffs from the counterclaim presented by the
municipio de Pagsanjan, Laguna, llamadas Martina, Matea, Isabel,
defendants, we should and hereby do sentence the plaintiffs to the
Paula, Pia y Engracia apellidadas todas Lavadia, habian mandado
payment of the sum of P915.08, the balance of the sum claimed by
confeccionaren 1880, con dinero propio, para adornor y engalanar
the defendants as a balance of the one-half of the amount which
con ellas la Imagende Nuestra Señora de Guadalupe, patrona del
the defendants advanced for the reconstruction or repair of the
mencionado municipio, reteniendo ellas para si, la propiedad de las
Calle Escolta house, after deducting from the total of such sum
mismas no cediendo sino solamente su uso a la referida Imagen,
claimed by the latter the amount of P384 which Gaspar de
para el indicado fin. Los demandantes y los demandados, con
Bartolome, the husband of the defendant Matilde, should have paid
excepcion de Engracia Lavadia que era una de las seis, son
as one-half of the rents due for his occupation of the quarters on
descendientes de las otras cinco primitivas dueñas de las alhajas
the lower floor of the said house as an office for the justice of the
de que se trata. Porque la demandada Rosario Cosme de Mendoza
peace court of Vigan; and we further find: (1) That the defendants
que es una de las descendientes de Paula Lavadia, que tuvo
are not obliged to pay one-half of the rents which could have been
ultimamente la custodia de aquellas, quiso entragar la corona que
obtained from the upper story of the said house; (2) that the
constituia parte de las mismas, al Obispo Catolico de Lipa, para que
plaintiffs can not be compelled to pay the legal interest from
la tuviese en su poder pero sujeta al uso de la Imagen de Nuestra
December 7, 1904, on the sum expanded in the reconstruction of
Señora de Guadalupe, segun la voluntad de sus dueñas, los
the aforementioned house, but only the interest fixed by law, at
descendientes de las tres, (Isabel Lavadia, Matea Lavadia y Martina
the rate of 6 per cent per annum, from the date of the judgment to
Lavadia), Engracia Lavadia que son los demandantes, promovieron
be rendered in accordance with this decision; (3) that the husband
esta causa en el Juzgado de su procedencia, para reclamar la
of the defendant Matilde Ortiz is not entitled to any remuneration
posesion y custodia de todas las referidas alhajas. Estas no son
for the administration of the pro indiviso property belonging to both
otras que las descritas en el parrafo 3 de la demanda.
parties; (4) that, neither is he entitled to collect from the plaintiffs
the sum of P910.50, the difference between the assessed valuation
and the price set by the expert appraisal solicited by the plaintiffs El Juzgado decidio la causa en contra de los demandados,
in their amendment to the complaint; and, (5) that no participation declarando que siendo los demandantes dueños de cuatro sextas
shall be made of jewelry aforementioned now in the possession of partes proindiviso de las alhajas objeto de cuestion, y los
the plaintiff Vicenta Ortiz. The said judgment, as relates to the demandados, de dos sextas partes solamente, aquellos tenian
points appealed, is affirmed, in so far as its findings agree with perfecto derecho a determiar quien debia encargarse de su
those of this decision, and is reversed, in so far as they do not. No custodia; y que, habiendo ellos decidido encomendar esta esta a
special finding is made regarding the costs of both instances. So Engracia Lavadia, una de las primitiva dueñas, ordeno que la
ordered. demandada Rosario Cosme de Mendoza haga entrega de todas
ellas a dicha demandante. Contra esta decision del Juzgado,
interpusieron apelacion los demandados, creyendo que el Juzgado
erro (1) al declarar que la apelante Rosario Cosme de Mendoza, y
sus anticesores en la posesion de las referidas alhajas, no actuaron
sino solamente como depositarios, y no fiduciarios; (2) al declarar
que los apelados son dueños de cuatro sextas partes de aquellas, y
que les compete por dicha razon ejercer el derecho de designar a
la persona a quien encomendar sucustodia; (3) al dejar de declarar
que la apelante Rosario Cosme de Mendoza, siendo condueña y
fiduciaria de dichas alhajas no puede ser privada de su
administracion y custodia, excepto por razones que le incapacitan
para ello, cuales son la de ejecutar actos contrarios a la voluntad
de sus primitivas dueñas, y la de disponer de las mencionadas
alhajas a su antojo; (4) al dejar de declarar que Pia Lavadia y sus
descendientes, hasta llegar a Rosario Cosme de Mendoza, que
habian tenido la custodia y posesion de las referidas alhajas, han
desempeñado con fidelidad su cometido; y finalmente (5) al
denegarles su peticion para una nueva vista.
Para tener una idea cabal de los hechos, expongamoslos a
continuacion, siguiendo el relato que de los mismos hace el
Juzgado a quo en su decision apelada, ya que no los discuten ni los
apelantes ni los apelados:
El objeto de las causa son las joyas de la imagen de la Virgen de
Ntra. Sra. De Guadalupe, en el municipio de Pagsanjan, Laguna, y
consisten en una corona de oro incrustado con diamantes y
brillantes, una gargantilla de diamentes y brillantes, un cinturon
incrustado tambien con brillantes y diamantes, un collar de oro
tambien completamente incrustado con brillantes, una pulsera de
oro incrustado con brillantes y diamentes, una plancha de plata
dorada en donde se colocan las joyas arriba mencionadas, y otras
vairas piezas de oro o de plata dorada para la decoracion de las
indumentarias de dicha imagen de Ntra. Sra. de Guadalupe. Todas
estas joyas estan actualmente depositadas bajo llave en el Banco
de las Islas Filipinas pues alli las habia depositado la demandada
Rosario Cosme de Mendoza.
La corona y las joyas arriba descritas fueron confeccionadas hacia
el año 1880 a costa de seis damas residentes del municipio de
Pagsanjan, Laguna. Ellas eran las hermanas Paula Lavadia y Pia
Lavadia, las hermanas Martina Lavadia y Matea Lavadia, y las
hermanas Isabel Lavadia y Engracia Lavadia. Estas señoras
contribuyeron alhajas que ellas tenian para la confecion de la
corona y con ellasse confeccionaron las joyas arriba descritas,
contribuyendo tambien el dinero con que se costeo la confecion de
las mismas. Todas estas señoras y han fallecido, con excepcion de
la demandante Doña Engracia Lavadia Vda. De Fernandez. Los
otros demandantes son los herederos legales de Isabel Lavadia,
Matea Lavadia y Martina Lavadia, mientras que la demandada
Rosario Cosme de Mendoza y sus codemandados son herederos
legitimos y descendientes de Paula Lavadia.
La corona y las joyas se mandaron confeccionar para el uso de la
patrona titular del municipio de Pagasanjan, Ntra.Sra. de
Guadalupe. Cuando ya se habian terminado de confeccionar, sus
duenas convinieron en que dichas joyas se quedarian con la
contribuyente Pia Lavadia. Esta tuvo bajo su custodia dichas joyas
hasta su muerte en 1882, cuando su hermana Paula Lavadia le
sucedio en la custodia de las mismas. A la muerte de paula
Lavadia, de sucedio en el cuidado, conservacion y custodia de
dichas joyas sumarido Pedro Rosales, y muerto este, su hija Paz
Rosales, a su vez le sucedio en dicha custodia, conservacion y
cuidado. A la muerte de Paz Rosales, la corona y las joyas pasaron
a la custodia de su marido Baldomero Cosme. Despues de
Baldomero Cosme, dichas joyas pasaron a Manuel Soriano quien, a
su vez, fue sucedido en la custodia, conservacion y administracion
por la aqui demandada Rosario Cosme de Mendoza. Todos los años
desde 1880 hasta la fecha, las joyas en cuestion se usaban para
decorar la imagen de Ntra. Sra. de Guadalupe en Pagsanjan, y
ninguno de los que han estado guardando o custodiando dichas
joyas habia pretendido poseerlas como dueño exclusivo. La
demandada Rosario Cosme de Mendoza y sus codemandados no
pretenden ser dueños de las referidas alhajas. En efecto, en el
intestado del finado Baldomero Cosme, actuacion especial No.
5494 de este Juzgado de Primera Instancia, dicha demandada y
sus codemandados han manifestado al Juzgado de que nunca han
tenido pretensiones de reclamar el dominio de dichas joyas ni parte
alguna de las mismas. (Veanse Exhibitos B-2 by B-3.)
El 9 de febrero de 1938, la demandada Rosario Cosme de
Mendoza, en su capacidad de administradora del intestado del
finado Baldomero Cosme, notifico a todas las personas interesadas
en dichas joyas que queria hacer entrega formal de dichas joyas al
Sr. Obispo de Lina el dia sabado siguiente, o sea, el 12 de febrero
de 1938, informandolas que presenciaran el acto de la entrega
(Vease Exhibito 4). En efecto, el 12 de febrero de 1938, la
demandada y su esposo hicieron entrega formal de las joyas,
otorgando el documento correspondiente a dicho efecto,
documento quese presento como Exhibit E de los demandantes y 2
de los demandados. No estando los demandantes conformes con
dicha entrega, unas seis personas y las demandantes en esta causa
otorgaron un documento, designando a la demandante Engracia
Lavadia como recamadora, quien tendria a su cuidado la corona y
las alhajas en cuestion (Vease Exhibito 3). Habiendo surgido la
cuestion de quien debe tener bajo su custodia la corona y las joyas
en cuestion, y habiendo llegado este hecho a conocimiento del
Obispo de Lipa, este, a su vez, en 21 de junio de 1938, otorgo una
escritura renunciandola custodia y administracion de dichas corona
y alhajas (Veanse Exhibito D de los demandantes y 1 de los
demandados).
Fundandose en los hechos relatados, el Juzgado declaro que el
contrato habido entre las primitivas dueñas de las alhajas en litigio
y las primeras de ellas que tuvieron la custodia de las mismas, fue
el de deposito, segun queda de finido esta contrato en los articulos
1758 y siguientes del Codigo Civil. Pia Lavadia primeramente, y
despues Paula Lavadia y los descendientes de esta ultima siendo
una de ellos la apelante Rosario Cosme Mendoza, recibieron y
poseyeron, unos despues de otros, las referidas, solamente para
fines de custodia; pues, como lo hace resaltar el Juzgado en su
decision, ni aquellas ni los ultimos usaron las mismas para su
propio beneficio. Si fue en virtud de un contrato de deposito como
fueron recibidas las alhajas objeto de cuestion, primeramente por
Pia y Paula, y despues por los descendientes de la ultima
incluyendo la apelante Rosario Cosme de Mendoza, es claro que
hay la obligacion de parte de esta de restituir las mismas a sus
dueños en cuanto las reclamen. Lo dispone asi el articulo 1766 del
Codigo Civil que dice:
El depositario esta obligado a guardar la cosa y restuirla, cuando le
sea pedida, al depositante, o a sus causa habientes, o a la persona
que hubiese sido designada en el contrato. Su responsabilidad en
cuanto a la guarda y la perdida de la cosa, se regira por lo
dispuesto en el tit. I de este libro.
La restitucion debe hacerse con todos los frutos y las accesiones de
la cosa depositada, si los tiene, sin que le sea dado al depositario
retenerla, como comenta Sanchez Roman, (IV Sanchez Roman,
885), aun bajo el prexto de obtener compensacion de otros
creditos o de indemnizarse de gastos hechos para su conservacion.
Las dueñas primitavas de las alhajas de que se trata, convinieron
en encomendar la custodia de las mismas a algunasde ellas,
reservandose experesamente para si su propiedad. Esto viene a
demostrar que la teoria de los apelantes de que el contrato que
aquellas tuvieron no es de deposito por que despues de todo, como
dicen, no pueden considerarse las alhajas como de pertenencia
ajena con respecto a Rosario Cosme de Mendoza, porque ella
desciende de una de susprimitivas dueñas, no tiene fuerza, porque
aun entre comuneros de una cosa, uno de ellos puede ser
depositario, y cuando lo es, esta sujeto a las mismas obligaciones
impuestas por la ley a todo depositario, respecto a la conservacion
de la cosa con el cuidado, diligencia e interes de un buen padre de
familia.
Joint owner. The fact that the depositary is a joint owner of the res
does not alter the degree of diligence required of him. (18 C.J.,
570).
Los apelados son descendientes y herederos legales de Isabel
Lavadia, Matea Lavadia y Martina Lavadia; y Engracia Lavadia, a
quien designaron par hacerse cargo de la custodia de las alhajas
objeto de cuestion, es una de las primitivas dueñas de las mismas;
y los apelantes son a su vez los descendientes y herederos de Pia
Lavadia y PaulaLavadia. No constando en ninguna parte due las
seis primitivasdueñas no contibuyeron en la confeccion o
adquisicion de las alhajas tantas veces mencionadas, en la misma
proporcion, la conclusion mas razonable es — y esto sostenido por
una presuncion de ley, (Art, 393, Codigo Civil) —, que todas ellas
prorratearon el costa de las mismas pagando cada una, una cuota
iqual. Si esto es cierto, entonces debemos aceptar la conclusion del
Juzgado de que los apelados son dueños de cuatro sextas partes de
dicha alhajas, y quelos apelantes no lo son sino solamente de las
dos sextas partesrestantes. Por consiquiente, habiendo decidido la
mayoria que la constituyen los apelados, encomendar la custodia y
administracion de dichas alhajas para poder dar fiel cumplimiento a
la voluntad de sus primitivas dueñas, a la apelada Engracia
Lavadia, la unica superviviente de las mismas, su decision debe
respetarse, porque para la administracion y mejor disfrute de la
cosa comun, segun el articulo 398 del Codigo Civil, son obligatorios
los acuerdos de la mayoria de los participes.
El argumento de que Rosario Cosme de Mendoza y sus antecesores
han estado desempeñando con fidelidad su cometidocomo
depositarios, no arguye en favor de la proposicion de que no se le
debe retirar el deposito, porque el contrato de deposito es tal que
permite al depositante retirar del depositario la cosa depositada, en
cualquier momento que quisiese, sobre todo, cuando el ultimo,
como en el caso de Rosario Cosme de Mendoza, ha ejecutado un
acto contrario al encargo recibido, encomendando o tratando de
encomendar a otro, la custodia y administracion de la cosa
depositada, por su propia cuenta y sin el consentimiento de los
depositantes o sus herederos.
No habiendo hallado error alguno en la decision apelada del
Juzgado a quo, por la presente, la confirmamos, condenando a los
apelantes a pagar las costas. Asi se ordena.
G.R. No. L-32047 November 1, 1930
MANUEL MELENCIO, MARIANO MELENCIO, PURA MELENCIO,
and CARIDAD MELENCIO, plaintiffs-appellants,
vs. DY TIAO LAY, defendant-appellee.
On August 1,1927, the plaintiffs, Manuel, Mariano, Pura and
Caridad Melencio, brought the present action against the
defendant-appellee, Dy Tiao Lay for the recovery of the possession
of a parcel of land situated in the town of Cabanatuan, Nueva Ecija,
and containing an area of 4,628.25 square meters. The plaintiffs
further demand a monthly rental of P300 for the use and
occupation of the parcel from May, 1926, until the date of the
surrender to them of the possession thereof; and that if it is found
that the said appellee was occupying the said parcel of land by
virtue of a contract of lease, such contract should be declared null
and void for lack of consent, concurrence, and ratification by the
owners thereof.
In his answer, the defendant pleaded the general issue, and as
special defenses, he alleged in substance that he was occupying
the said tract of land by virtue of a contract of lease executed on
July 24,1905, in favor of his predecessor in interest, by Ruperta
Garcia, Pedro Melencio, Juliana Melencio, and Ruperta Melencio
under the terms specified therein, and which contract is still in
force; that Liberata Macapagal, the mother of the plaintiffs, in her
capacity as judicial administratrix of the estate of Ramon Melencio,
one of the original coowners of the parcel of land in question,
actually recognized and ratified the existence and validity of the
contract aforesaid by virtue of the execution of a public document
by her on or about November 27,1920, and by collecting from the
assignees of the original lessee the monthly rent for the premises
until April 30, 1926; and that said defendant deposits with the
clerk of court the sum of P20.20 every month as rent thereof and
that as a counterclaim, he seeks the recovery of P272 for goods
and money delivered by him to the plaintiffs.
The plaintiffs filed a reply to the answer alleging, among other
things, that Ruperta Garcia was not one of the coowners of the
land in question; that the person who signed the alleged contract
of lease never represented themselves as being the sole and
exclusive owners of the land subject to the lease as alleged by the
defendant in his answer; that the said contract of lease of July
24,1905, is null and void for being executed without the
intervention and consent of two coowners, Ramon Melencio and
Jose P. Melencio, and without the marital consent of the husbands
of Juliana and Ruperta Melencio; that the lessee has repeatedly
violated the terms and conditions of the said contract; and that
Liberata Macapagal, in her capacity as administratrix of the
property of her deceased husband, could not lawfully and legally
execute a contract of lease with the conditions and terms similar to
that of the one under consideration, and that from this it follows
that she could not ratify the said lease as claimed by the
defendant.
On January 21,1928, Liberata Macapagal Viuda de Melencio, duly
appointed and qualified as administratrix of the estate of her
deceased husband, Ramon Melencio, filed a petition praying to be
allowed to join the plaintiffs as party to the present case, which
petition was granted in open court on January 31,1928. Her
amended complaint of intervention of February 14,1928, contains
allegations similar to those alleged in the complaint of the original
plaintiffs, and she further alleges that the defendant-appellee has
occupied the land in question ever since November, 1920, under
and by virtue of a verbal contract of lease for a term from month to
month. To this complaint of intervention, the defendant-appellee
filed an answer reproducing the allegations contained in his answer
reproducing the allegations contained in his answer to the
complaint of the original plaintiffs and setting up prescription as a
further special defense.
It appears from the evidence that the land in question was
originally owned by one Julian Melencio. He died prior to the year
1905 leaving his widow, Ruperta Garcia, and his five children,
Juliana, Ramon, Ruperta, Pedro R., and Emilio Melencio. Emilio
Melencio also died before 1905, his son Jose P. Melencio, then a
minor, succeeding to his interest in the said parcel of land by
representation. A question has been raised as to whether the land
was community property of the marriage of Julian Melencio and
Ruperta Garcia, but the evidence is practically undisputed that
Ruperta Garcia in reality held nothing but a widow's usufruct in the
land.
On July 24,1905, Ruperta Garcia, Pedro R. Melencio, Juliana
Melencio, and Ruperta Melencio executed a contract of lease of the
land in favor of one Yap Kui Chin, but neither Jose P. Melencio nor
Ramon Melencio were mentioned in the lease. The term of the
lease was for twenty years, extendible for a like period at the
option of the lessee. The purpose of the lessee was to establish a
rice mill on the land, with the necessary buildings for warehouses
and for quarters for the employees, and it was further stipulated
that at the termination of the original period of the lease, or the
extension therof, the lessors might purchase all the buildings and
improvements on the land at a price to be fixed by experts
appointed by the parties, but that if the lessors should fail to take
advantage of that privilege, the lease would continue for another
and further period of twenty years. The document was duly
acknowledged but was never recorded with the register of deeds.
The original rent agreed upon was P25 per month, but by reason of
the construction of a street through the land, the monthly rent was
reduced of P20.20.
Shortly after the execution of the lease, the lessee took possession
of the parcel in question and erected the mill as well as the
necessary buildings, and it appears that in matters pertaining to
the lease, he dealt with Pedro R. Melencio, who from 1905 until his
death in 1920, acted as manager of the property held in common
by the heirs of Julian Melencio and Ruperta Garcia. The original
lessee, Yap Kui Chin, died in 1912, and the lease, as well as the
other property, was transferred to Uy Eng Jui who again
transferred it to Uy Eng Jui & Co., an unregistered partnership.
Finally the lease came into the hands of Dy Tiao Lay, the herein
defendant-appellee.
Ramon Melencio died in 1914, and his widow, Liberata Macapagal,
was appointed administratrix of his estate. In 1913 the land which
includes the parcel in question was registered under the Torrens
system. The lease was not mentioned in the certificate of title, but
it was stated that one house and three warehouses on the land
were the property of Yap Kui Chin.
In 1920 the heirs of Julian Melencio made an extrajudicial partition
of parts of the inheritance, and among other things, the land here
in question fell to the share of the children of Ramon Melencio, who
are the original plaintiffs in the present case. Their mother,
Liberata Macapagal, as administratrix of the estate of her deceased
husband, Ramon, collected the rent for the lease at the rate of
P20.20 per month until the month of May,1926, when she
demanded of the lessee that the rent should be increased to P300
per month, and she was then informed by the defendant that a
written lease existed and that according to the terms thereof, the
defendant was entitled to an extension of the lease at the original
rental. The plaintiffs insisted that they never had any knowledge of
the existence of such a contract of lease and maintained that in
such case the lease was executed without their consent and was
void. It may be noted that upon careful search, a copy of the
contract of lease was found among the papers of the deceased
Pedro R, Melencio. Thereafter the present action was brought to set
aside the lease and to recover possession of the land. Upon trial,
the court below rendered judgment in favor of the defendant
declaring the lease valid and ordering the plaintiffs to pay the P272
demanded by the defendant in his counterclaim. From this
judgment the plaintiffs appealed.
The contention of the appellants is that the aforesaid contract of
lease (Exhibit C) is null and void for the following reasons:
1. That Exhibit C calls for an alteration of the property in question
and therefore ought to have been signed by all the coowners as by
law required in the premises.
2. That the validity and fulfillment of the said agreement of lease
were made to depend upon the will of the lessee exclusively.
3. That the said contract of lease being for a term of over six
years, the same is null and void pursuant to the provision of article
1548 of the Civil Code.
4. That the duration of the same is unreasonably long, thus being
against public policy.
5. That the defendant-appellee and his predecessors in interest
repeatedly violated the provisions of the agreement.
The first proposition is based on article 397 of the Civil Code which
provides that "none of the owners shall, without the consent of the
others, make any alterations in the common property even though
such alterations might be advantageous to all." We do not think
that the alterations are of sufficient importance to nullify the lease,
especially so since none of the coowners objected to such
alterations until over twenty years after the execution of the
contract of lease. The decision of this court in the case of Enriquez
vs. A. S. Watson and Co. (22 Phil., 623), contains a full discussion
of the effect of alterations of leased community property, and no
further discussion upon the point need here be considered.
The second proposition is likewise of little merit. Under the
circumstances, the provision in the contract that the lessee, at any
time before he erected any building on the land, might rescind the
lease, can hardly be regarded as a violation of article 1256 of the
Civil Code.
The third and fourth proposition are, in our opinion, determinative
of the controversy. The court below based its decision principally
on the case of Enriquez vs. A.S. Watson & Co. (22 Phil., 623), and
on the resolution of the Direccion General de los Registros dated
April 26,1907. (Jurisprudencia Civil, vol.107, p. 222.) An
examination of the Enriquez case will show that it differs materially
from the present. In that case all of the coowners of a lot and
building executed a contract of lease of the property for the term of
eighteen years in favor of A. S. Watson & Co.; one of the owners
was minor, but he was represented by his legally appointed
guardian, and the action of the latter in signing the lease on behalf
of the minor was formally approved by the Court of First Instance.
In the present case only a small majority of the coowners executed
the lease here in question, and according to the terms of the
contract the lease might be given a duration of sixty years; that is
widely different from a lease granted by all of the coowners for a
term of only eighteen years.
The resolution of April 26,1907, is more in point. It relates to the
inscription or registration of a contract of lease of some pasture
grounds. The majority of the coowners of the property executed
the lease for the term of twelve years but when the lessees
presented the lease for inscription in the registry of property, the
registrar denied the inscription on the ground that the term of the
lease exceeded six years and that therefore the majority of the
coowners lacked authority to grant the lease. The Direccion
General de los Registros held that the contract of lease for a period
exceeding six years, constitutes a real right subject to registry and
that the lease in question was valid.
The conclusions reached by the Direccion General led to
considerable criticism and have been overruled by a decision of the
Supreme Court of Spain dated June 1,1909. In that decision the
court made the following statement of the case (translation):
The joint owners of 511 out of 1,000 parts of the realty
denominated El Mortero, leased out the whole property for twelve
years to Doña Josefa de la Rosa; whereupon the Count and
Countess Trespalacios together with other coowners brought this
suit to annul the lease and, in view of the fact that the land was
indivisible, prayed for its sale by public auction and the distribution
of the price so obtained; they alleged that they neither took part
nor consented to the lease; that the decision of the majority of part
owners referred to in article 398 of the Code, implies a common
deliberation on the step to be taken , for to do without it, would,
even more than to do without the minority, be nothing less than
plunder; and that, even if this deliberation were not absolutely
necessary, the power of the majority would still be confined to
decisions touching the management and enjoyment of the common
property, and would not include acts of ownership, such as a lease
for twelve years, which according to the Mortgage Law gives rise to
a real right, which must be recorded, and which can be performed
only by the owners of the property leased.
The part owners who had executed the contract prayed in
reconvention that it held valid for all the owners in common, and if
this could not be, then for all those who had signed it, and for the
rest, for the period of six years; and the Audiencia of
Caceres having rendered judgment holding the contract null and
void, and ordering the sale of the realty and the distribution of the
price, the defendants appealed alleging under the third and fourth
assignments of error, that the judgment was a violation of article
398 of the Civil Code, which is absolute and sets no limit of time
for the efficacy of the decisions arrived at by the majority of the
part owners for the enjoyment of the common property, citing the
decisions of June 30th, 1897, of July 8th,1902, and of October
30th, 1907; under the fifth assignments of error the appellants
contended that in including joint owners among those referred to in
said article, which sets certain limits to the power of leasing, in the
course of the management of another's property, the court applied
article 1548 unduly; and by the seventh assignments of error, they
maintained the judgment appealed from also violated article 1727,
providing that the principal is not bound where his agent has acted
beyond his authority; whence it may be inferred that if in order to
hold the contract null and void, the majority of the part owners are
looked upon as managers or agents exercising limited powers, it
must at least be conceded that in so far as the act in question lies
within the scope of their powers, it is valid; the contract cannot be
annulled in toto.
The Supreme Court held that the appeal from the decision of
the Audiencia of Caceres was not well taken and expressed the
following consideranda:
Considering that, although as a rule the contract of lease
constitutes an act of management, as this court has several times
held, cases may yet arise, either owing to the nature of the subject
matter, or to the period of duration, which may render it
imperative to record the contract in the registry of property, in
pursuance of the Mortgage Law, where the contract of lease may
give rise to a real right in favor of the lessee, and it would then
constitute such a sundering of the ownership as transcends mere
management; in such cases it must of necessity be recognized that
the part owners representing the greater portion of the property
held in common have no power to lease said property for a longer
period than six years without the consent of all the coowners,
whose propriety rights, expressly recognized by the law, would by
contracts of long duration be restricted or annulled; and as under
article 1548 of the Civil Code such contracts cannot be entered into
by the husband with respect to his wife's property, by the parent or
guardian with respect to that of the child or ward, and by the
manager in default of special power, since the contract of lease
only produces personal obligations, and cannot without the consent
of all persons interested or express authority from the owner, be
extended to include stipulations which may alter its character,
changing it into a contract of partial alienation of the property
leased;
Considering that, applying this doctrine to the case before us, one
of the grounds upon which the judgment appealed from, denying
the validity of the lease made by the majority of the part owners of
the pasture land El Mortero is based, must be upheld; to wit, that
the period of duration is twelve years and the consent of all the
coowners has not been obtained; hence, the third, fourth. and fifth
assignments of error are without merit; firstly, because article 398
of the Civil Code, alleged to have been violated, refers to acts
decided upon by the majority of the part owners, touching the
management and enjoyment of the common property, and does
not contradict what we have stated in the foregoing paragraph;
secondly because although the cases cited were such as arose
upon leases for more than six years, yet this point was not raised
on appeal, and could not therefore be passed upon; and thirdly,
because it cannot be denied that there is an analogy between a
manager without special authority, who is forbidden by article 1548
of the Code to give a lease for a period of over six years, and the
joint owners constituting a legal majority, who may decide to lease
out the indivisible property, with respect to the shares of the other
coowners; and having come to the conclusion that the contract is
null and void, there is no need to discuss the first two assignments
of error which refer to another of the bases adopted, however
erroneously, by the trial court;
Considering that the sixth assignment of error is without merit,
inasmuch as the joint ownership of property is not a sort of agency
and cannot be governed by the provisions relating to the latter
contract; whence, article 1727 of the Code alleged to have been
violated, can no more be applied, than, the question of the validity
or nullity of the lease being raise, upon the contract as celebrated,
it would be allowable to modify a posteriori some one or other of
the main conditions stipulated, like that regarding the duration of
the lease, for this would amount to a novation; still less allowable
would it be to authorize diverse periods for the different persons
unequally interested in the fulfillment.
Taking into consideration articles 398,1548, and 1713 of the Civil
Code and following the aforesaid decision of June 1,1909, we hold
that the contract of lease here in question is null and void.
It has been suggested that by reason of prescription and by
acceptance of benefits under the lease, the plaintiffs are estopped
to question the authority for making the lease.To this we may
answer that the burden of proof of prescription devolved upon the
defendant and that as far as we can find, there is no proof that
Ramon Melencio and his successors ever had knowledge of the
existence of the lease in question prior to 1926. We cannot by
mere suspicion conclude that they were informed of the existence
of the document and its terms; it must be remembered that under
a strict interpretation of the terms of the lease, the lessees could
remain indefinitely in their tenancy unless the lessors could
purchase the mill and the buildings on the land. In such
circumstances, better evidence than that presented by the
defendant in regard to the plaintiff's knowledge of the lease must
be required.
The fact that Ramon during his lifetime received his share of the
products of land owned in common with his coheirs is not sufficient
proof of knowledge of the existence of the contract of lease when it
is considered that the land in question was only a small portion of a
large tract which Pedro R. Melencio was administering in
connection with other community property.
The appealed judgment as to the validity of the lease is therefore
reversed, and it is ordered that the possession of the land in
controversy be delivered to the intervenor Liberata Macapagal in
her capacity as administratrix of the estate of the deceased Ramon
Melencio. It is further ordered that the defendant pay to said
administratrix a monthly rent of P50 for the occupation of the land
from May 1st, 1926, until the land is delivered to the
administratrix. The sum of P272 demanded by the defendant in his
counterclaim may be deducted from the total amount of the rent
due and unpaid. The building erected on the land by the defendant
and his predecessors in interest may be removed by him, or
otherwise disposed of, within six months from the promulgation of
this decision. Without costs. So ordered.
Separate Opinions
STREET and VILLAMOR, JJ., dissenting:
Although the name of Ramon Melencio, father of the plaintiffs in
this action, was not in fact signed to the lease in question, and the
lease did not even so much as mentioned him as one of the
coowners, the undersigned are nevertheless of the opinion that
Ramon Melencio, and his children after him, are estopped from
questioning said lease, for the reason that, from 1905 to the time
of his death in 1914, Ramon Melencio enjoyed the benefits of the
lease, as did his widow and children after him until May,1926,
when the widow repudiated the lease, as a preliminary to the
bringing of this action by the plaintiffs. By their acceptance of the
benefits of the lease over so long a period, the persons now
questioning the lease and their father, their predecessor in interest,
are estopped to question the authority for making the lease. This
estopped cures the want of the special power contemplated in
article 1548 of the Civil Code.
In addition to the estopped arising from the acceptance of benefits
under the lease, an estoppel further arises from the fact that
Ramon Melecio, during the years following the execution of the
lease, stood by and saw the lessees place upon the property
improvements of a value of more than P100,000, for which reason,
also, equity will not permit the lease to be disturbed to the
prejudice of the lessee.
To exhibit the foregoing proposition fully, it is necessary to
understand the facts relative to the controversy. These are
substantially as follows:
The land covered by the original lease, having an area of some
6,000 square meters, is located in the town of Cabanatuan and was
formerly the property of one Julian Melencio, married to Ruperta
Garcia. After the death of Julian Melencio, his widow, Ruperta
Garcia, united in 1905, with three of their children, namely, Pedro
R., Juliana, and Ruperta, in executing, in favor of Yap Kui Chin, as
lessee, the lease which is the subject of this controversy. The
consideration mentioned in the lease was the sum P25 per month.
On August 2,1907, at the request of Pedro R. Melencio, another
document was drawn changing the superficial configuration of the
leased land but preserving its original extension of 6,000 square
meters. This change was made for the purpose of giving Pedro R.
Melencio space upon which to construct a house on the part
segragated from the original mass. In 1915 a new street, passing
through the leased property, was opened in Cabanatuan; and
Pedro R. Melencio, acting for the lessors, reduced the monthly rent
from P25 to P20, to correspond with the reduction in the area of
the leased land resulting from the occupation of part of it by the
street.lawphil.net
At the time the lease was made there was living one Ramon
Melencio, son of Julian Melencio and Ruperta Garcia and brother of
the heirs who signed the lease. Also before this time there had
been another brother named Emilio Melencio. But Emilio was dead
and his only surviving son, Jose P. Melencio, was a small boy then
under the tutelage of his uncle Pedro R. Melencio. The lease
referred to is not and never has been questioned by any of the
persons, or descendants of the persons, who signed the
instrument. Neither has it been questioned by Jose P. Melecio, son
of Emilio. Nor was the lease questioned in life by Ramon Melencio,
who died in 1914; and the only persons raising a question as to its
validity are four of the five children of Ramon, the same being the
plaintiffs in this case.
By series of changes, not, necessary to be here recounted, the
rights of the original lessee became vested in the defendant, Dy
Tiao Lay. At the time of the institution of the present action the
defendant, Dy Tia lay, had a rice mill, consisting of valuable
buildings and improvements, constructed on the land, and valued,
it is alleged, at P160,000; but during the time of the pendency of
this action a fire occurred which seems to have destroyed the mill
and improvements with the exception of a camarin valued at some
P15,000.
In November, 1920, the children of Julian Melencio and Ruperta
Garcia executed a partial extra-judicial partition of the properties
belonging to their father's estate; and the land covered by this
lease was assigned to Liberata Macapagal, widow of Ramon
Melencio, in right of her deceased husband Ramon and as
representative of the children. It will be noted that the land
encumbered by the lease was thus assigned precisely to the family
of the deceased brother, Ramon Melencio, who at the same time
was the sole living brother whose name was not signed to the
lease.
At the time the lease was executed, Pedro R. Melencio was in fact
the manager of the common ancestral estate belonging to himself
and his brothers and sisters; and he continued as such until 1920.
After the partition, or partial partition, of the fraternal estate in
1920, Liberata Macapagal Viuda de Ramon Melencio succeeded to
the office of manager, or guardian, of the estate of her children, at
least with respect to the parcel now in question.
It will be noted as an important fact that every dollar due as rent
from the leased land was paid by the lessee, from the time when
rent first became due, and these payments were made first to
Pedro R. Melencio as manager of the common estate pertaining to
himself and his brothers and sisters, until 1920, when the rents
began to be paid to Liberata Macapagal in the right to herself and
children. In April, 1926, Liberata ceased to collect the rent, and in
May, thereafter, she refused to accept payment of the monthly
instalment of rent then due. For this reason the defendant has
been making a consignation of the corresponding rent for the
benefit of the lessors in the office of the provincial treasurer. No
question is made that during the life of Ramon Melencio he
received his share of the monthly rental from the property in
question; nor is there any question that thereafter his widow and
children received their share of the same until the property was
assigned in partition to Liberata Macapagal and her children, after
which they received all of the rent, until Liberata refused longer to
accept it.
The undersigned concur in the proposition that the lease signed in
1905 was not per se binding on Ramon Melencio, first, because he
was not a party to that lease; and, secondly, because the making
of a lease for twenty years, extendible under certain circumstances
for a second and third period of equal duration, was an act of
rigorous alienation and not a mere act of management and
enjoyment such as is contemplated in article 398 of the Civil Code.
(Sentencia, June 1,1909; Ruiz, Cod. Civ., vol. 4. p. 502) Neither do
we pause to argue that the contract might have been considered
valid under the doctrine of this court stated in Eleizegui vs. Manila
Lawn Tennis Club (2 Phil., 309). At any rate the lease did not
purport to bind Ramon, and he was not even mentioned therein as
one of the coowners.
But it is to be noted that none of the parties signatory to the lease
have at any time sought to abrogate the contract; and some of the
children of Ramon Melencio only are before the court as actors in
this case seeking to set the contract aside. Under these
circumstances the undersigned are of the opinion that Ramon
Melencio was at the time of his death bound by the lease, from his
having participated for years in the benefits derived from the
contract, and that his children, who derive their rights from him,
are likewise bound.
It is well established that an estate in land may be virtually
transferred from one man to another without a writing, by the
failure of the owner to give notice of his title to the purchaser
under circumstances where the omission to do so would operate as
a fraud (Kirk vs. Hamilton, 102 U. S., 68,77; 26 Law. ed., 79). This
doctrine is so universally accepted that a bare reference to general
treatises on the subject of estopped is necessary (10 R.C. L.,
p.694; 21 C. J., pp.1154, 1160, 1206, 1207, 1209); and the
estoppel is as effective with respect to a lease as it is with respect
to a deed of absolute conveyance (21 C.J., 1213).
In the case before us Ramon Melencio lived in the town where the
land covered by this lease was located, and every time he went
abroad he must have seen the valuable improvements which the
original lessee, or his successors in interest, were erecting and had
erected upon part of the common ancestral estate. But from the
date the lease was executed until his death Ramon Melencio did
nothing except to receive such portion of the rent as pertained to
him. Under these circumstances, even if his brother Pedro R.
Melencio had conveyed the property away by deed of absolute
alienation, Ramon would have been legally bound. It is but natural
that so long as he lived after the lease was made, no complaint
was ever registered by him against its validity.
And if Ramon Melencio was estoppel, of course his children are
estopped, for their rights are of a purely derivative character. In
the case before us a period of more than twenty-one years elapsed
between the time the lease was made and the date when it was
first called in question by the widow.
But Manuel Melencio, the oldest of the heirs who are suing in this
case, says that he did not know the terms of the lease until a short
while before this action was instituted, when he called upon the
widow of his uncle Pedro and found a copy of the lease after
searching among his uncle's papers. It is not surprising that this
plaintiff, who was hardly more than a baby when the lease was
made, should not have known about the terms of the contract. But
it was all the time safely kept among the papers of his uncle Pedro,
who, as already stated, was manager of the common estate of the
brothers and sisters. Ramon Melencio is now dead and of course
cannot speak as to whether he knew the terms of the agreement.
But he should be presumed to have known its terms, because he
was enjoying benefits from month to month under it, and he had
the means of knowledge immediately at hand, namely by recourse
to a trusted brother in whose custody the contract was preserved.
In addition to this, we note that when partition was effected about
the year 1920 the fact that the property in question was subject to
a lease in favor of the defendant was noted in the document by
which the property was assigned to Liberata Macapagal and her
children. The suggestion that the terms of the lease were unknown
to the plaintiffs is of little weight and of no legal merit. We note
that the lease was never registered, but this fact makes no
difference in a lawsuit between the parties to the lease, or their
successors in interest.
We are of the opinion that the judgment should be affirmed.
G.R. No. L-22510 February 6, 1925
GONZALO TUASON Y PATIÑO, ET AL., applicants.
SABAS BUSTAMANTE, ET AL., petitioners-appellees,
vs.
JOSE MARIA TUASON, ET AL., respondents-appellants.
As to the nature of the present proceedings, it may be noted from
a reading of the so called motion or petition quoted below, that the
appellees are attempting to compel someone, without mentioning
whom, to sell a parcel or parcels of land to them, without indicating
the extent or location of the same, further than to say that said
parcels are located or included within the Hacienda de
Maysilo covers several millions of square meters of land.
The present motion is an aftermath of two other cases. The first
was a petition for partition of a large tract or parcel of land
belonging to the Tuason estate located in the municipalities of
Caloocan and Malabon, of the Province of Rizal, which was
commenced in the year 1906. The second was an action for the
registration of said tract or parcel of land commenced by the
Tuason family in 1908. The two actions have a long history, and
considering the way they were handled and the numerous
unnecessary delays and the confusion found in the records, very
little credit is due to any of the parties connected with said causes.
During the proceedings in the petition for partition as well as in the
action for the registration of said tract or parcel of land, many
persons appeared and laid claim to parts of the same. Due to the
claims presented by many of the occupants of said tract or parcel
of land, the Tuason family authorized the trial court to appoint a
commission to sell to such claimants any part or all of said tract or
parcel of land involved in the said two actions. Said commissioners
under that authority did sell various parcels of more or less extent
to many of said claimants. Notwithstanding the authority of said
commissioners and notwithstanding the fact that they were
negotiating with many of the claimants to sell parcels of said tract,
the petition for partition was finally closed and the heirs of the
Tuason family were granted their respective shares. And not only
was the action for partition closed, as just indicated, but a decree
of registration, under the Torrens system, was also granted, with
the evident understanding that whatever parcels or portions of said
original tract, which had been or might be sold by said
commissioners, should be excluded from said tract in the method
and manner provided by law.
In the original authority granted to said commissioners, they were
directed to close their negotiations within the period of six months.
That period was extended from time to time and the sale of
numerous parcels was consummated, and deeds of sale were
executed in favor of many of the purchasers. The greater portion of
said sales were consummated between the years 1910 and 1913.
While the present claimants contend that they have a right to
purchase certain parcels, no demand on their part was made for
the consummation of their right until the 17th day of August, 1922,
when they filed the present motion (not a petition) in the Court of
First Instance of the Province of Rizal. Said motion is as follows:
UNITED STATES OF AMERICA
PHILIPPINE ISLANDS
IN THE COURT OF FIRST INSTANCE OF RIZAL
Registration case No. 4429 connected with
No. 4496.
RECORD
SABAS BUSTAMANTE, AGAPITO C. CRUZ,
PEDRO BAUTISTA, and DEMETRIA CRUZ,
Petitioners.
MOTION
Comes now the undersigned attorney on behalf of the above-
named petitioners and to the court shows:
1. That the petitioners are in possession and the holders of their
respective lots of land included in the "Hacienda de Maysilo" with a
right to purchase the same by virtue of a contract entered into with
the owners of the said hacienda, found in Expediente No. 391 of
this court.
2. That the petitioners have already advanced to the hacienda,
through Mr. Apolinario Baltazar, who then represented them, a part
of the purchase price of the aforesaid lots, to wit, the sum of P144,
that is to say P36 per parcel, the document evidencing their option
having been issued in favor of the aforesaid Mr. Apolinario
Baltazar.
3. That by an order of the court in Expediente No. 4429, the
commissioners were ordered to deliver the possession of the land
of said hacienda to the heirs subject to the right reserved to the
possessors and land holders.
4. That the petitioners are now ready to pay in cash the balance of
the purchase price of the respective lots occupied by them with a
deduction of 20 per cent thereon.
5. That their respective lots will be identified at the hearing of this
motion by means of the plan thereof.
Wherefore it is prayed that after hearing of this motion an order be
issued by the court directing the owners of the lands aforesaid to
execute the proper deed of sale in favor of the petitioners upon
payment of their price.
Manila, August 17, 1922.
(Sgd.) PRUDENCIO A. REMIGIO
Attorney for the petitioners
211 Carriedo, Manila
Copy sent to the parties in interest by registered mail.
Messrs. JOSE VARELA CALDERON, JOSE ARNAIZ, VICENTE FOZ,
GREGORIO ARANETA, and GABRIEL LA O, attorneys for the parties
in interest in the above entitled expediente and civil case No. 391,
Court of First Instance of Rizal, all being residents of Manila.
GENTLEMEN:
Please take notice that on Saturday, 26th instant at the usual time,
we will move the court to pass upon the foregoing motion.
Manila, August 17, 1922.
(Sgd.) PRUDENCIO A. REMIGIO
It will be noted from a reading of said motion that its purpose was
to obtain the specific performance of a contract of sale of land. No
respondents are named. No land is described. Said motion contains
no facts upon which the judgment could be rendered, even though
no defense was presented. The lower court should have, without
delay, dismissed the action, with costs against the petitioners.
The fact that the court took jurisdiction and continued to hear and
determine the question presented not upon the facts stated in the
motion but upon the evidence adduced, shows to what extent
parties litigant may be annoyed without just cause.
As will appear later in this discussion, the appellees claim but small
parcels of land, without indicating the exact area. Sabas
Bustamante, however, admitted that he was entitled to purchase
six hectares only, or 60,000 square meters, whereas in the plan
which he presents, he claims 521,465 square meters. While
Agapito C. Cruz claimed in his testimony that he was entitled to
one small parcel only, in the plan which he presents, showing the
land to which he has a right to purchase, he claims three parcels
with a total area of 1,125,657 square meters. While Demetria Cruz
in her testimony claimed but one parcel of land, the plan which was
presented gives no indication that she is the owner of any parcel.
These facts indicate very little less than an attempt to defraud Jose
Maria Tuason.
On the 25th day of August, 1922, Mr. Gabriel La O, represented by
P.J. Sevilla, without stating whom he represented, appeared and
answered said motion as follows:
UNITED STATES OF AMERICA
PHILIPPINE ISLANDS
IN THE COURT OF FIRST INSTANCE OF RIZAL
ANSWER TO THE MOTION OF THE PETITIONERS
Comes now the undersigned attorney on behalf of some of the
parties interested in the above entitled expediente and in civil case
No. 391 of this court and to the Honorable Court respectfully
shows:
That Mr. Apolinario Baltazar has not made but a deposit in his
name for the purchase of the said portion of land included
in expediente No. 391.
That Mr. Apolinario Baltazar has already obtained the title to said
land possessed by him and for the purchase of which the deposit of
P144 was made.
That without the proper plan, these parties cannot identify the
land, the purchase of which is applied for by the petitioners.
Wherefore, the undersigned respectfully prays this Honorable Court
to order the petitioners to attach to their motion a parcel plan of
said land, the purchase of which is applied for, and that the
undersigned counsel be given a reasonable time to answer said
motion with the aforesaid plan before him.
Manila, for Pasig, Rizal, August 25, 1922.
GABRIEL LA O
By (Sgd.) P.J. SEVILLA
Attorney for the parties herein
appearing before the court
143 Juan Luna, Binondo, Manila
No further pleadings were presented in court and nothing further
seems to have occurred with reference to said motion until the
time set for trial on the 10th day of March, 1923. At the beginning
of the trial it appears of record that Mr. Vicente Foz appeared for
the owners of a portion of lot No. 25. Attention was called to the
fact that the motion filed by the present petitioners failed
absolutely to describe the land which they claimed they had a right
to purchase, or even to locate it by sitio, barrio or municipality.
They did, however, attempt to locate it within
the hacienda mentioned in the two other actions for partition and
registration (Nos. 391 and 4429). Their own testimony given
during the hearing is equally as indefinite and uncertain, as to the
location of the parcels of land. Their theory, however, is based
upon an allegation that one Apolinario Baltazar represented them
in the purchase of the respective parcels of land to which they now
lay claim.
Mr. Apolinario Baltazar testified as a witness and presented exhibits
showing or attempting to show that the land which he had
purchased for himself and as representative of the appellees, if any
they had purchased, was in lot No. 23. The court a quo awarded to
the appellees lot No. 25, notwithstanding the fact that the only
pretension of Apolinario Baltazar was that he and the present
appellees were entitled to purchase lot No. 23. From an
examination of the various plans presented in the other two
actions, the fact clearly appears that lot No. 25 of the Hacienda
Maysilo is north of a street known as Calle Samson, while lot No.
23 is a long distance from Calle Samson to the south. It may be
added that Calle Samson seems to be a principal street crossing
the said hacienda.
Examining the testimony of the three appellees with reference to
the location of the respective lots, we find that Sabas Bustamante
testified that he was the owner of six hectares; that he and his
parents had lived upon and occupied the same for a period of
about fifty years; that the land was bounded on the north by Pedro
Bautista, on the east by Tuason (evidently the Tuason Estate), on
the south by Calle Reparo, and on the west by the Golf Club. He
failed to give the sitio, barrio or municipality of his land. He
admitted, however, that he was living in the barrio of Talisay, of
the municipality of Caloocan; that the barrio of Talisay is located
near the Cementerio del Norte. It will be noted from an
examination of the various plans presented, that the Cementerio
del Norte is a long distance, perhaps more than one mile south
of Calle Samson, and that the Golf Club as well as lot No. 25 are on
the north side of Calle Samson. That being true, it is difficult to
understand, how land located in the barrio of Talisay could, by any
possibility, be bounded by the Golf Club. Sabas Bustamante further
contradicts the testimony of Apolinario Baltazar in the fact that
while Apolinario Baltazar swears that the appellees furnished him
the money with which to purchase the parcel of land, Sabas
Bustamante declares that he furnished the money
to Capitan Baltazar. The testimony of Sabas Bustamante furnishes
no proof that the money, even admitting his statement, which he
furnished to Capitan Baltazar, was ever paid to the heirs of the
Tuason Estate.
Examining the testimony of Agapito C. Cruz, another one of the
appellees, concerning the location of his land, we find that he also
denies the fact that Apolinario Baltazar purchased the land for him.
He asserts also that he delivered the money, for the purpose of
purchasing the land, to Silverio Baltazar (Capitan Baltazar). With
reference to the description of the land, he says that it is bounded
on the north by a river, on the south by Pedro Bautista, on the
west by the railroad and on the east by the Tuason Hacienda, and
that he and his ancestors had occupied said land probably for sixty
or seventy years. It will be noted that Agapito Cruz makes no
attempt to give the sitio, barrio, or municipality in which said land
is located.
Looking now to the declaration of the other appellee, Demetria
Cruz, we find that she also contradicts the statements of Apolinario
Baltazar, and says that she or her husband delivered the money to
Silverio Baltazar (Capitan Berio) and not to Apolinario Baltazar. She
does not attempt to say how land belonged to her. In effect she
positively says that she does not know. In describing her portion of
land she gives the following boundaries: On the west by the
railroad, on the south by Sabas Bustamante, on the east by
the Tuason Hacienda and on the north by Agapito Cruz. When she
was asked whether the payment she made to Capitan Baltazar was
rent or not, she answered that she did not know whether it was
rent or the purchase price. It will be noted that she gave neither
the sitio, barrio, or municipality in which the land which she
described is located.
With reference to Exhibit K, which is a plan of lot No. 25 and the
land which the lower court awarded to the present appellees, it
may be said that the surveyor Mr. Espinosa, who prepared the
plan, stated that he had obtained all of his information for the
preparation of the same from the appellees.
For the respondents, Mr. Hermenegildo Meresina testified as a
witness. He declared under oath that he was the cashier for Jose
Ma. Tuason and had been since 1918; that he collected the rent
form the tenants of the Hacienda Maysilo; that he knew lot No. 25;
that Sabas Bustamante was one of the tenants of said lot and had
paid rent for the same; that he knew Agapito Cruz; that he was
also one of the tenants and had paid rent for the lot which he
occupied; that he knew Demetria Cruz; that she was one of the
tenants and had paid rent; that each of said persons had paid rent
for the use and occupation of parts of lot No. 25; and that they
were old tenants of the Hacienda Maysilo. The fact that the
appellees had paid rent to Jose Ma. Tuason is also confirmed by the
declaration of Santiago Espiritu. Demetria Cruz was recalled as a
witness and admitted that she had made payments to Jose Ma.
Tuason for the years 1917 to 1920.
From an examination of the other two cases, first, for partition, and
second, for registration, some very interesting facts relating to the
claim of Apolinario Baltazar are noted. His principal theory is, that
the lands which he and those for whom he acted, had a right to
purchase, in fact purchased by his father Silverio Baltazar and that
he (the father) had purchased five parcels of land or at least had
entered into a contract to purchase them. The record shows that
Silverio Baltazar presented ten oppositions to ten different parcels
of land to the registration of the Hacienda Maysilo in the name of
the Tuason family. The total area of said ten parcels claimed by
him was about 160,000 square meters, more or less. The record
shows that four parcels of land had been sold to Apolinario
Baltazar. The record further shows that none of the four parcels
sold to Apolinario Baltazar were any of the ten parcels claimed by
his father in his opposition to the registration of the Hacienda
Maysilo.
The records, in the other cases, further show by Exhibit C, that
Melecio Saludes and Fermin Mariano had presented to the
commissioners sometime theretofore a list of persons, among
whom was Silverio Baltazar, who desired to purchase parcels of
land within the Hacienda Maysilo and that later they notified said
commissioners that they had acquired the rights of all of the
persons who were mentioned in a letter of the 27th day of April,
1910 (pp. 405; 253-260).
After a thorough examination of all of the evidence adduced in the
present action, in relation with the hundreds of pages in
the expedientes for partition and registration, we are convinced
that a large preponderance of the evidence shows the following:
(a) That the present action is an effort to compel Jose Ma. Tuason
to specifically perform a contract of sale of certain parcels of land.
Neither the motion nor the proof supports that claim.
(b) That neither the allegation of the motion nor the evidence
adduced is sufficient to identify the land in question as lot No. 25,
nor to sustain the contention that Jose Ma. Tuason had ever
promised to sell said lot to the appellees.
Therefore the judgment appealed from is hereby revoked, the
defendants are hereby absolved from all liability under these
proceedings, without prejudice to the right of the appellees, if they
have in fact a contract for the purchase of any parcel of land within
the Hacienda Maysilo, to commence another action, to compel a
compliance therewith. And, without any finding as to costs, it 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.
Before Us is a petition foe review of the decision, dated May 13,
1991 of the Court of Appeals in CA-G.R. CV No. 13122,
entitled Grace Gosiengfiao, et al. v. Leonardo Mariano v. Amparo
Gosiengfiao 1 raising as issue the distinction between Article
10882 and Article 16203 of the Civil Code.
The Court of Appeals summarized the facts as follows:
It appears on record that the decedent Francisco Gosiengfiao is the
registered owner of a residential lot located at Ugac Sur,
Tuguegarao, Cagayan, particularly described as follows, to wit:
"The eastern portion of Lot 1351, Tuguegarao Cadastre, and after
its segregation now designated as Lot 1351-A, Plan PSD-67391,
with an area of 1,1346 square meters."
and covered by Transfer Certificate of Title No. T-2416 recorded in
the Register of Deeds of Cagayan.
The lot in question was mortgaged by the decedent to the Rural
Bank of Tuguegarao (designated as Mortgagee bank, for brevity)
on several occasions before the last, being on March 9, 1956 and
29, 1958.
On August 15, 1958, Francisco Gosiengfiao died intestate survived
by his heirs, namely: Third-Party Defendants: wife Antonia and
Children Amparo, Carlos, Severino and herein plaintiffs-appellants
Grace, Emma, Ester, Francisco, Jr., Norma, Lina (represented by
daughter Pinky Rose), and Jacinto.
The loan being unpaid, the lot in dispute was foreclosed by the
mortgagee bank and in the foreclosure sale held on December 27,
1963, the same was awarded to the mortgagee bank as the
highest bidder.
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 such
reconveyance. 18
Premises considered, respondents have not lost their right to
redeem, for in the absence of a written notification of the sale by
the vendors, the 30-day period has not even begun to run.
WHEREFORE, the decision of the Court of Appeals is hereby
AFFIRMED. Cost against petitioners.
G.R. No. 56550 October 1, 1990
MARINA Z. REYES, AUGUSTO M. ZABALLERO and SOCORRO
Z. FRANCISCO, petitioners,
vs.
THE HONORABLE ALFREDO B. CONCEPCION, Presiding
Judge, CFI of Cavite, Tagaytay, Br. IV, SOCORRO MARQUEZ
VDA. DE ZABALLERO, EUGENIA Z. LUNA, LEONARDO M.
ZABALLERO, and ELENA FRONDA ZABALLERO, respondents.
Law Firm of Raymundo A. Armovit for petitioners.
Leonardo M. Zaballero for private respondents.
CORTÉS, J.:
On March 13, 1980, petitioners filed with the CFI a complaint for
injunction and damages, docketed as Civil Case No. TG-572,
seeking to enjoin private respondents Socorro Marquez Vda. De
Zaballero, Eugenia Z. Luna and Leonardo M. Zaballero from selling
to a third party their pro-indiviso shares as co-owners in eight
parcels of registered land (covered by TCT Nos. A-1316 to A-1322)
located in the province of Cavite, with an aggregate area of about
96 hectares. Petitioner claimed that under Article 1620 of the new
Civil Code, they, as co-owners, had a preferential right to purchase
these shares from private respondents for a reasonable price.
On March 17, 1980, respondent trial judge denied the ex
parte application for a writ of preliminary injunction, on the ground
that petitioners' registered notice of lis pendens was ample
protection of their rights.
On April 24, 1980, private respondents received the summons and
copies of the complaint. Private respondents then filed their answer
with counterclaim, praying for the partition of the subject
properties. Private respondent Elena Fronda Zaballero filed a
motion for intervention dated April 29, 1980, adopting therein her
co-respondents answer with counterclaim.
At the pre-trial hearing, the parties agreed on the following
stipulation of facts:
xxx xxx xxx
1. That the plaintiffs, the defendants and the intervenor are
the pro-indiviso co-owners of the properties cited and described in
the complaint;
2. That six and nine tenth (6-9/10) hectares of the land covered by
TCT No. T-1319; approximately twelve (12) hectares of that
covered by TCT No. T-1320; and the entire parcel of covered by
TCT No. T-1321, are subject of expropriation proceedings instituted
by the National Housing Authority (NHA) now pending before this
Court in Civil Case Nos. TG-392, TG-396 and TG-417;
3. That based on the evidence presented by the herein parties in
the aforecited expropriation cases, the current valuation of the land
and the improvements thereon is at P95,132.00 per hectare;
4. That on 16 April 1980, the plaintiffs received a written notice
from the defendants and the intervenor that the VOLCANO
SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION had
offered to buy the latter's share in the properties listed in the
complaint subject to the following terms:
1. The selling price shall be net at TWELVE & 50/100 (P12.50)
PESOS per square meter, or a total price of NINE MILLION
(P9,000,000.00) PESOS for a total area of SEVENTY TWO (72)
HECTARES ONLY;
2. A downpayment equivalent to THIRTY (30%) PERCENT of the
selling price, or a minimum downpayment of TWO MILLION SEVEN
HUNDRED THOUSAND (P2,700,000.00) PESOS;
3. The balance of the purchase price to be payable within THREE
(3) YEARS from the date of downpayment in THREE (3) EQUAL,
ANNUAL PAYMENTS with interest at the legal rate prevailing at the
time of payment;
4. The balance shall be covered by a BANK GUARANTEE of
payments and shall not be governed by Art. 1250 of the Civil Code.
(Cf. Annexes 1, 2 and 3, Answer)
5. That in said letters (Annexes 1, 2 and 3, Answer), the plaintiffs
were requested:
a) To exercise their pre-emptive right to purchase defendants' and
intervenor's shares under the above-quoted terms; or
b) To agree to a physical partition of the properties; or
c) To sell their shares, jointly with the defendants and the
intervenor, to the VOLCANO SECURITIES TRADERS AND AGRI-
BUSINESS CORPORATION at the price and under the terms
aforequoted.
6. That the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS
CORPORATION is ready, willing and able to purchase not only the
aliquot shares of the defendants and the intervenor, but also that
of the plaintiffs, in and to all the properties subject of this case, for
and in consideration of the net amount of TWELVE and 50/100
(P12.50) PESOS per square meter and under the afore-quoted
terms;
xxx xxx xxx
[Annex "C" of the Petition, pp. 1-2, Rollo, pp. 43-44.]
The parties laid down their respective positions, as follows:
PLAINTIFFS
1. That the subject properties are incapable of physical partition;
2. That the price of P12.50 per square meter is grossly excessive;
3. That they are willing to exercise their pre-emptive right for an
amount of not more that P95,132.00 per hectare, which is the fair
and reasonable value of said properties;
4. That the statutory period for exercising their pre-emptive right
was suspended upon the filing of the complaint;
DEFENDANTS AND INTERVENOR
1. That the reasonable price of the subject properties is P12.50 per
square meter;
2. That plaintiffs' right of legal pre-emption had lapsed upon their
failure to exercise the same within the period prescribed in Art.
1623 of the Civil Code of the Philippines;
3. That, assuming the soundness of plaintiffs' claim that the price
of P12.50 per square meter is grossly excessive, it would be to the
best interest of the plaintiffs to sell their shares to the VOLCANO
SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION,
whose sincerity, capacity and good faith is beyond question, as the
same was admitted by the parties herein;
4. That the subject properties consisting approximately 95 hectares
may be physically partitioned without difficulty in the manner
suggested by them to plaintiffs, and as graphically represented in
the subdivision plan, which will be furnished in due course to
plaintiffs' counsel.
[Annex "C" of the Petition, pp. 2-3; Rollo, pp. 44-45.]
Based on the foregoing, respondent trial judge rendered a pre-trial
order dated July 9, 1980 granting petitioners a period of ten days
from receipt of the subdivision plan to be prepared by a competent
geodetic engineer within which to express their approval or
disapproval of the said plan, or to submit within the same period, if
they so desire, an alternative subdivision plan.
On July 16, 1980, counsel for private respondents sent to the
counsel for petitioners a letter enclosed with a subdivision plan.
On August 4, 1980, petitioners filed their comment to the pre-trial
order, contending that the question of reasonable value of the
subject properties remains a contentious issue of fact ascertainable
only after a full trial. Petitioners likewise insisted on their pre-
emptive right to purchase private respondents' shares in the co-
ownership after due determination of the reasonable price thereof.
Thereafter, counsel for private respondents sent the counsel for
petitioners another subdivision plan prepared by a geodetic
engineer. Still, no definite communication was sent by petitioners
signifying their approval or disapproval to the subdivision plans.
In order to settle once and for all the controversy between the
parties, private respondents filed a motion dated December 16,
1980 requesting that petitioners be required to formally specify
which of the two options under Article 498 of the New Civil Code
they wished to avail of: that petitioners' shares in the subject
properties be sold to private respondents, at the rate of P12.50 per
square meter; or that the subject properties be sold to a third
party, VOLCANO LAKEVIEW RESORTS, INC. (claimed to have been
erroneously referred to in the pre-trial as VOLCANO SECURITIES
TRADERS AND AGRI-BUSINESS CORPORATION) and its proceeds
thereof distributed among the parties.
Finding merit in the private respondents' request, and for the
purpose of determining the applicability of Article 498 of the New
Civil Code, respondent trial judge issued an order dated February
4, 1981 which directed the parties to signify whether or not they
agree to the scheme of allotting the subject properties to one of
the co-owners, at the rate of P12.50 per square meter, or whether
or not they know of a third party who is able and willing to buy the
subject properties at terms and conditions more favorable than
that offered by VOLCANO LAKEVIEW RESORTS, INC. The order
contained a series of questions addressed to all the parties, who
were thereupon required to submit their answers thereto.
Private respondents filed a "Constancia" expressing that they were
willing to allot their shares in the subject properties to Socorro
Marquez Vda. de Zaballero, at the rate of P12.50 per square meter,
and that they did not know of any other party who was willing and
able to purchase the subject properties under more favorable
conditions than that offered by VOLCANO LAKEVIEW RESORTS,
INC.
However, instead of submitting their answers to the queries posed
by respondent trial judge, petitioners filed a motion for clarification
as to the true identity of the third party allegedly willing to
purchase the subject properties.
On February 26, 1981, respondent trial judge rejected petitioners'
motion on the ground that it was irrelevant.
Thereupon, on February 27, 1981, petitioners filed a pleading
captioned "Compliance and Motion", (1) reiterating the relevance of
ascertaining the true identity of the third party buyer, VOLCANO
SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION or
VOLCANO LAKEVIEW RESORTS, INC., (2) expressing their view
that there is actually no bona fide and financially able third party
willing to purchase the subject properties at the rate of P12.50 per
square meter, and, (3) once again insisting on their pre-emptive
right to purchase the shares of private respondents in the co-
ownership at a "reasonable price", which is less than that
computed excessively by the latter at the rate of P12.50 per square
meter. Petitioners therein prayed that further proceedings be
conducted in order to settle the factual issue regarding the
reasonable value of the subject properties.
On March 16, 1981, respondent trial judge issued an order denying
petitioners' motion. The judge ruled that petitioners did not
possess a pre-emptive right to purchase private respondents'
shares in the co-ownership. Thus, finding that the subject
properties were essentially indivisible, respondent trial judge
ordered the holding of a public sale of the subject properties
pursuant to Article 498 of the New Civil Code. A notice of sale was
issued setting the date of public bidding for the subject properties
on April 13, 1981.
Petitioners then filed a motion for reconsideration from the above
order. Respondent trial judge reset the hearing on petitioners'
motion for reconsideration to April 6, 1981, and moved the
scheduled public sale to April 14, 1981.
Without awaiting resolution of their motion for reconsideration,
petitioners filed the present petition for certiorari, alleging that the
respondent trial judge acted without jurisdiction, or in grave abuse
of its discretion amounting to lack of jurisdiction, in issuing his
order dated March 16, 1981 which denied petitioners' claim of a
pre-emptive right to purchase private respondents' pro-
indiviso shares and which, peremptorily ordered the public sale of
the subject properties. On April 8, 1981, this Court issued a
temporary restraining order enjoining the sale of the subject
properties at public auction.
With the comment and reply, the Court considered the issues
joined and the case submitted for decision.
The Court finds no merit in the present petition.
The attack on the validity of respondent trial judge's order dated
March 16, 1981 is ultimately premised on petitioners' claim that
they had a pre-emptive right to purchase the pro-indiviso shares of
their co-owners, private respondents herein, at a "reasonable
price". It is this same claim which forms the basis of their
complaint for injunction and damages filed against private
respondents in the court a quo.
This claim is patently without basis. In this jurisdiction, the legal
provisions on co-ownership do not grant to any of the owners of a
property held in common a pre-emptive right to purchase the pro-
indiviso shares of his co-owners. Petitioners' reliance on Article
1620 of the New Civil Code is misplaced. Article 1620 provides:
A co-owner of a thing may exercise the right of redemption in case
the shares of all the 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 [Emphasis
supplied].
Article 1620 contemplates of a situation where a co-owner has
alienated his pro-indiviso shares to a stranger. By the very nature
of the right of "legal redemption", a co-owner's light to redeem is
invoked only after the shares of the other co-owners are sold to a
third party or stranger to the co-ownership [See Estrada v. Reyes,
33 Phil. 31 (1915)]. But in the case at bar, at the time petitioners
filed their complaint for injunction and damages against private
respondents, no sale of the latter's pro-indiviso shares to a third
party had yet been made. Thus, Article 1620 of the New Civil Code
finds no application to the case at bar.
There is likewise no merit to petitioners' contention that private
respondents had acknowledged the pre-emptive right of petitioners
to purchase their shares at a "reasonable price". Although it
appears that private respondents had agreed to sell their pro-
indiviso shares to petitioners, the offer was made at a fixed rate of
P12.50 per square meter [See Pre-trial Order dated July 9, 1980,
Annex "C" of the Petition; Rollo, pp. 43-45]. It cannot be said that
private respondents had agreed, without qualification, to sell their
shares to petitioners. Hence, petitioners cannot insist on a right to
purchase the shares at a price lower than the selling price of
private respondents.
Neither do petitioners have the legal right to enjoin private
respondents from alienating their pro-indiviso shares to a third
party. The rights of a co-owner of a property are clearly specified in
Article 493 of the New 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 in its enjoyment, except when personal rights are
involved. But the effect of the alienation of 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.
The law does not prohibit a co-owner from selling, alienating or
mortgaging his ideal share in the property held in common. The
law merely provides that the alienation or mortgage shall be
limited only to the portion of the property which may be allotted to
him upon termination of the co-ownership [See Mercado v.
Liwanag, G.R. No. L-14429, June 30, 1962, 5 SCRA 472; PNB v.
The Honorable Court of Appeals, G.R. No. L-34404, June 25, 1980,
98 SCRA 207; Go Ong v. The Honorable Court of Appeals, G.R. No.
75884, September 24, 1987, 154 SCRA 270,] and, as earlier
discussed, that the remaining co-owners have the right to redeem,
within a specified period, the shares which may have been sold to
the third party. [Articles 1620 and 1623 of the New Civil Code.]
Considering the foregoing, the Court holds that respondent trial
judge committed no grave abuse of discretion when he denied
petitioners' claim of a pre-emptive right to purchase private
respondents' pro-indiviso shares.
Moreover, there is no legal infirmity tainting respondent trial
judge's order for the holding of a public sale of the subject
properties pursuant to the provisions of Article 498 of the New Civil
Code. After a careful examination of the proceedings before
respondent trial judge, the Court finds that respondent trial judge's
order was issued in accordance with the laws pertaining to the
legal or juridical dissolution of co-ownerships.
It must be noted that private respondents, in their answer with
counterclaim prayed for, inter alia, the partition of the subject
properties in the event that the petitioners refused to purchase
their pro-indiviso shares at the rate of P12.50 per square meter.
Unlike petitioners' claim of a pre-emptive right to purchase the
other co-owners' pro-indiviso shares, private respondents'
counterclaim for the partition of the subject properties is
recognized by law, specifically Article 494 of the New Civil Code
which lays down the general rule that no co-owner is obliged to
remain in the co-ownership. Article 494 reads as follows:
No co-owner shall be obliged to remain in the co-ownership. Each
co-owner may demand at any time partition of the thing owned in
common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a
certain period of time, not exceeding ten years, shall be valid. This
term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall
not exceed twenty years.
Neither shall there be partition when it is prohibited by law.
No prescription shall run in favor of a co-owner or co-heir against
his co-owners or co-heirs so long as he expressly or impliedly
recognizes the co-ownership.
None of the legal exceptions under Article 494 applies to the case
at bar. Private respondents' counterclaim for the partition of the
subject properties was therefore entirely proper. However, during
the pre-trial proceedings, petitioners adopted the position that the
subject properties were incapable of physical partition. Initially,
private respondents disputed this position. But after petitioners
inexplicably refused to abide by the pretrial order issued by
respondent trial judge, and stubbornly insisted on exercising an
alleged pre-emptive right to purchase private respondents' shares
at a "reasonable price", private respondents relented and adopted
petitioner's position that the partition of the subject properties was
not economically feasible, and, consequently, invoked the
provisions of Article 498 of the New Civil Code [Private
respondents' "Motion To Allot Properties To Defendants Or To Sell
the Same Pursuant To Article 498 Of The Civil Code", Annex "D" of
the Petition; Rollo, pp. 46-49].
Inasmuch as the parties were in agreement as regards the fact that
the subject properties should not be partitioned, and private
respondents continued to manifest their desire to terminate the co-
ownership arrangement between petitioners and themselves,
respondent trial judge acted within his jurisdiction when he issued
his order dated February 4, 1981 requiring the parties to answer
certain questions for the purpose of determining whether or not the
legal conditions for the applicability of Article 498 of the New Civil
Code were present in the case.
Art. 498 provides that:
Whenever the thing is essentially indivisible and the co-owners
cannot agree that it be alloted to one of them who shall indemnify
the others, it shall be sold and its proceeds distributed.
The sale of the property held in common referred to in the above
article is resorted to when (1) the right to partition the property
among the co-owners is invoked by any of them but because of the
nature of the property, it cannot be subdivided or its subdivision
[See Article 495 of the New Civil Code] would prejudice the
interests of the co-owners (See Section 5 of Rule 69 of the Revised
Rules of Court) and (2) the co-owners are not in agreement as to
who among them shall be allotted or assigned the entire property
upon reimbursement of the shares of the other co-owners.
Petitioners herein did not have justifiable grounds to ignore the
queries posed by respondent trial judge and to insist that hearings
be conducted in order to ascertain the reasonable price at which
they could purchase private respondents' pro-indiviso shares
[Petitioners' "Compliance and Motion" dated February 27, 1981,
Annex "H" of the Petition; Rollo, pp. 57-60].
Since at this point in the case it became reasonably evident to
respondent trial judge that the parties could not agree on who
among them would be allotted the subject properties, the Court
finds that respondent trial judge committed no grave abuse of
discretion in ordering the holding of a public sale for the subject
properties (with the opening bid pegged at P12.50 per square
meter), and the distribution of the proceeds thereof amongst the
co-owners, as provided under Article 498 of the New Civil Code.
Contrary to petitioners' contention, there was no need for further
hearings in the case because it is apparent from the various
allegations and admissions of the parties made during the pre-trial
proceedings, and in their respective pleadings, that the legal
requisites for the application of Article 498 of the New Civil Code
were present in the case. No factual issues remained to be litigated
upon.
WHEREFORE, the present petition is DISMISSED for lack of merit.
The temporary restraining order issued by the Court is hereby
LIFTED.
G.R. No. L-15499 February 28, 1962
ANGELA M. BUTTE, plaintiff-appellant,
vs.
MANUEL UY and SONS, INC., defendant-appellee.
Delgado, Flores and Macapagal for plaintiff-appellant.
Pelaez and Jalandoni for defendant-appellee.
REYES, J.B.L., J.:
Appeal from a decision of the Court of First instance of Manila
dismissing the action for legal redemption filed by plaintiff-
appellant.
It appears that Jose V. Ramirez, during his lifetime, was a co-
owner of a house and lot located at Sta. Cruz, Manila, as shown by
Transfer Certificate of Title No. 52789, issued in the name of the
following co-owners: Marie Garnier Vda. de Ramirez, 1/6; Jose V.
Ramirez, 1/6; Jose E. Ramirez, 1/6; Rita de Ramirez, 1/6; and Jose
Ma. Ramirez, 1/6.
On October 20, 1951, Jose V. Ramirez died. Subsequently, Special
Proceeding No. 15026 was instituted to settle his estate, that
included the one-sixth (1/6) undivided share in the aforementioned
property. And although his last will and testament, wherein he
bequeathed his estate to his children and grandchildren and one-
third (1/3) of the free portion to Mrs. Angela M. Butte, hereinafter
referred to as plaintiff-appellant, has been admitted to probate, the
estate proceedings are still pending up to the present on account of
the claims of creditors which exceed the assets of the deceased.
The Bank of the Philippine Islands was appointed judicial
administrator.
Meanwhile, on December 9, 1958, Mrs. Marie Garnier Vda. de
Ramirez, one of the co-owners of the late Jose V. Ramirez in the
Sta. Cruz property, sold her undivided 1/6 share to Manuel Uy &
Sons, Inc. defendant-appellant herein, for the sum of P500,000.00.
After the execution by her attorney-in-fact, Mrs. Elsa R. Chambers,
of an affidavit to the effect that formal notices of the sale had been
sent to all possible redemptioners, the deed of sale was duly
registered and Transfer Certificate of Title No. 52789 was cancelled
in lieu of which a new one was issued in the name of the vendee
and the other-co-owners.
On the same day (December 9, 1958), Manuel Uy & Sons, Inc. sent
a letter to the Bank of the Philippine Islands as judicial
administrator of the estate of the late Jose V. Ramirez informing it
of the above-mentioned sale. This letter, together with that of the
bank, was forwarded by the latter to Mrs. Butte c/o her counsel
Delgado, Flores & Macapagal, Escolta, Manila, and having received
the same on December 10, 1958, said law office delivered them to
plaintiff-appellant's son, Mr. Miguel Papa, who in turn personally
handed the letters to his mother, Mrs. Butte, on December 11 and
12, 1958. Aside from this letter of defendant-appellant, the vendor,
thru her attorney-in-fact Mrs. Chambers, wrote said bank on
December 11, 1958 confirming vendee's letter regarding the sale
of her 1/6 share in the Sta. Cruz property for the sum of
P500,000.00. Said letter was received by the bank on December
15, 1958 and having endorsed it to Mrs. Butte's counsel, the latter
received the same on December 16, 1958. Appellant received the
letter on December 19, 1958.
On January 15, 1959, Mrs. Angela M. Butte, thru Atty. Resplandor
Sobretodo, sent a letter and a Philippine National Bank cashier's
check in the amount of P500,000.00 to Manuel Uy & Sons, Inc.
offering to redeem the 1/6 share sold by Mrs. Marie Garnier Vda.
de Ramirez. This tender having been refused, plaintiff on the same
day consigned the amount in court and filed the corresponding
action for legal redemption. Without prejudice to the determination
by the court of the reasonable and fair market value of the
property sold which she alleged to be grossly excessive, plaintiff
prayed for conveyance of the property, and for actual, moral and
exemplary damages.
After the filing by defendant of its answer containing a
counterclaim, and plaintiff's reply thereto, trial was held, after
which the court rendered decision on May 13, 1959, dismissing
plaintiff's complaint on the grounds that she has no right to redeem
the property and that, if ever she had any, she exercised the same
beyond the statutory 30-day period for legal redemptions provided
by the Civil Code. The counterclaim of defendant for damages was
likewise dismissed for not being sufficiently established. Both
parties appealed directly to this Court.
Based on the foregoing facts, the main issues posed in this appeal
are: (1) whether or not plaintiff-appellant, having been bequeathed
1/3 of the free portion of the estate of Jose V. Ramirez, can
exercise the right of legal redemption over the 1/6 share sold by
Mrs. Marie Garnier Vda. de Ramirez despite the presence of the
judicial administrator and pending the final distribution of her share
in the testate proceedings; and (2) whether or not she exercised
the right of legal redemption within the period prescribed by law.
The applicable law involved in the present case is contained in
Articles 1620, p. 1, and 1623 of the Civil Code of the Philippines,
which read as follows:
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. (1522a)
ART. 1623. The right of legal predemption or redemption shall not
be exercised except within thirty days from the notice in writing by
the respective vendor, or by the vendor, as the case may be. The
deed of sale shall not be accorded in the Registry of Property,
unless accompanied by an affidavit of the vendor that he has given
written notice thereof at all possible redemptioners.
The right of redemption of co-owners excludes that of adjoining
owners. (1524a)
That the appellant Angela M. Butte is entitled to exercise the right
of legal redemption is clear. As testamentary heir of the estate of
J.V. Ramirez, she and her co-heirs acquired an interest in the
undivided one-sixth (1/6) share owned by her predecessor
(causante) in the Santa Cruz property, from the moment of the
death of the aforesaid co-owner, J.V. Ramirez. By law, the rights to
the succession of a deceased persons are transmitted to his heirs
from the moment of his death, and the right of succession includes
all property rights and obligations that survive the decedent.
ART. 776. The inheritance includes all the property, rights and
obligations of a person which are not extinguished by his death.
(659)
ART. 777. The rights to the succession are transmitted from the
moment of the death of the decedent. (657a)
ART. 947. The legatee or devisee acquires a right to the pure and
simple legacies or devisees from the death of the testator, and
transmits it to his heirs. (881a)
The principle of transmission as of the time of the predecessor's
death is basic in our Civil Code, and is supported by other related
articles. Thus, the capacity of the heir is determined as of the time
the decedent died (Art. 1034); the legitime is to be computed as of
the same moment(Art. 908), and so is the in officiousness of the
donation inter vivos (Art. 771). Similarly, the legacies of credit and
remission are valid only in the amount due and outstanding at the
death of the testator (Art. 935),and the fruits accruing after that
instant are deemed to pertain to the legatee (Art. 948).
As a consequence of this fundamental rule of succession, the heirs
of Jose V. Ramirez acquired his undivided share in the Sta. Cruz
property from the moment of his death, and from that instant, they
became co-owners in the aforesaid property, together with the
original surviving co-owners of their decedent (causante). A co-
owner of an undivided share is necessarily a co-owner of the
whole. Wherefore, any one of the Ramirez heirs, as such co-owner,
became entitled to exercise the right of legal redemption (retracto
de comuneros) as soon as another co-owner (Maria Garnier Vda.
de Ramirez) had sold her undivided share to a stranger, Manuel Uy
& Sons, Inc. This right of redemption vested exclusively in
consideration of the redemptioner's share which the law nowhere
takes into account.
The situation is in no wise altered by the existence of a judicial
administrator of the estate of Jose V. Ramirez while under the
Rules of Court the administrator has the right to the possession of
the real and personal estate of the deceased, so far as needed for
the payment of the decedent's debts and the expenses of
administration (sec. 3, Rule 85), and the administrator may bring
or defend actions for the recovery or protection of the property or
rights of the deceased (sec. 2, Rule 88), such rights of possession
and administration do not include the right of legal redemption of
the undivided share sold to Uy & Company by Mrs. Garnier
Ramirez. The reason is obvious: this right of legal redemption only
came into existence when the sale to Uy & Sons, Inc. was
perfected, eight (8) years after the death of Jose V. Ramirez, and
formed no part of his estate. The redemption right vested in the
heirs originally, in their individual capacity, they did not
derivatively acquire it from their decedent, for when Jose V.
Ramirez died, none of the other co-owners of the Sta. Cruz
property had as yet sold his undivided share to a stranger. Hence,
there was nothing to redeem and no right of redemption; and if the
late Ramirez had no such right at his death, he could not transmit
it to his own heirs. Much less could Ramirez acquire such right of
redemption eight years after his death, when the sale to Uy &
Sons, Inc. was made; because death extinguishes civil personality,
and, therefore, all further juridical capacity to acquire or transmit
rights and obligations of any kind (Civil Code of the Phil., Art. 42).
It is argued that the actual share of appellant Mrs. Butte in the
estate of Jose V. Ramirez has not been specifically determined as
yet, that it is still contingent; and that the liquidation of estate of
Jose V. Ramirez may require the alienation of the decedent's
undivided portion in the Sta. Cruz property, in which event Mrs.
Butte would have no interest in said undivided portion. Even if it
were true, the fact would remain that so long as that undivided
share remains in the estate, the heirs of Jose V. Ramirez own it, as
the deceased did own it before his demise, so that his heirs are
now as much co-owners of the Sta. Cruz property as Jose V.
Ramirez was himself a co-owner thereof during his lifetime. As co-
owners of the property, the heirs of Jose V. Ramirez, or any one of
them, became personally vested with right of legal redemption as
soon as Mrs. Garnier sold her own pro-indiviso interest to Uy &
Sons. Even if subsequently, the undivided share of Ramirez (and of
his heirs) should eventually be sold to satisfy the creditors of the
estate, it would not destroy their ownership of it before the sale,
but would only convey or transfer it as in turn sold (of it actually is
sold) to pay his creditors. Hence, the right of any of the Ramirez
heirs to redeem the Garnier share will not be retroactively affected.
All that the law requires is that the legal redemptioner should be a
co-owner at the time the undivided share of another co-owner is
sold to a stranger. Whether or not the redemptioner will continue
being a co-owner after exercising the legal redemptioner is
irrelevant for the purposes of law.
Nor it can be argued that if the original share of Ramirez is sold by
the administrator, his heirs would stand in law as never having
acquired that share. This would only be true if the inheritance is
repudiated or the heir's quality as such is voided. But where the
heirship is undisputed, the purchaser of hereditary property is not
deemed to have acquired the title directly from the deceased
Ramirez, because a dead man can not convey title, nor from the
administrator who owns no part of the estate; the purchaser can
only derive his title from the Ramirez heirs, represented by the
administrator, as their trustee or legal representative.
The right of appellant Angela M. Butte to make the redemption
being established, the next point of inquiry is whether she had
made or tendered the redemption price within the 30 days from
notices as prescribed by law. This period, be it noted, is
peremptory, because the policy of the law is not to leave the
purchaser's title in uncertainty beyond the established 30-day
period. 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. [2d] 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 the fact of the sale, its
perfection; and its validity, the notice being a reaffirmation thereof,
so that the party 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.
The notice which became operative is that given by Mrs. Chambers,
in her capacity as attorney-in-fact of the vendor Marie Garnier Vda.
de Ramirez. Under date of December 11, 1958, she wrote the
Administrator Bank of the Philippine Islands that her principal's
one-sixth (1/6) share in the Sta. Cruz property had been sold to
Manuel Uy & Sons, Inc. for P500,000.00. The Bank received this
notice on December 15, 1958, and on the same day endorsed it to
Mrs. Butte, care of Delgado, Flores and Macapagal (her attorneys),
who received the same on December 16, 1958. Mrs. Butte
tendered redemption and upon the vendee's refusal, judicially
consigned the price of P500,000.00 on January 15, 1959. The
latter date was the last one of the thirty days allowed by the Code
for the redemption, counted by excluding December 16, 1958 and
including January 15, 1959, pursuant to Article 13 of the Civil
Code. Therefore, the redemption was made in due time.
The date of receipt of the vendor's notice by the Administrator
Bank (December 15) can not be counted as determining the start
of thirty days; for the Administrator of the estate was not a proper
redemptioner, since, as previously shown, the right to redeem the
share of Marie Garnier did not form part of the estate of Jose V.
Ramirez.
We find no jurisdiction for appellant's claim that the P500,000,00.
paid by Uy & Sons, Inc. for the Garnier share is grossly excessive.
Gross excess cannot be predicated on mere individual estimates of
market price by a single realtor.
The redemption and consignation having been properly made, the
Uy counterclaim for damages and attorney's fees predicated on the
assumption that plaintiff's action was clearly unfounded, becomes
untenable.
PREMISES CONSIDERED, the judgment appealed from is hereby
reversed and set aside, and another one entered:
(a) Declaring the consignation of P500,000,00 made by appellant
Angela M. Butte duly and properly made;
(b) Declaring that said appellant properly exercised in due time the
legal redemption of the one-sixth (1/6) undivided portion of the
land covered by Certificate of Title No. 59363 of the Office of the
Register of Deeds of the City of Manila, sold on December 9, 1958
by Marie Garnier Vda. de Ramirez to appellant Manuel Uy & Sons,
Inc.
(c) Ordering appellant Manuel Uy & Sons, Inc. to accept the
consigned price and to convey to Angela M. Butte the undivided
portion above referred to, within 30 days from the time our
decision becomes final, and subsequently to account for the rentals
and fruits of the redeemed share from and after January 15, 1958,
until its conveyance; and.
(d) Ordering the return of the records to the court of origin for
further proceedings conformable to this opinion.
Without finding as to costs.
G.R. No. L-22621 September 29, 1967
JOSE MARIA RAMIREZ, plaintiff-appellee,
vs.
JOSE EUGENIO RAMIREZ, RITA D. RAMIREZ, BELEN T.
RAMIREZ, DAVID MARGOLIES, MANUEL UY and SONS, INC.,
BANK OF THE PHILIPPINE ISLANDS, in its capacity as
judicial administrator of the Testate Estate of the late Jose
Vivencio Ramirez, defendants-appellants,
ANGELA M. BUTTE, defendant-appellee.
Sycip, Salazar, Luna and Associates for plaintiff-appellee.
Ramirez and Ortigas for defendants-appellants.
CONCEPCION, C.J.:
Appeal by the defendants from a decision of the Court of First
Instance of Manila.
Plaintiff, Jose Maria Ramirez, brought this action 1 against
defendants Jose Eugenio Ramirez, Rita D. Ramirez, Belen T.
Ramirez, David Margolies, Manuel Uy & Sons, Inc., the Estate of
the late Jose Vivencio Ramirez represented by its judicial
administrator, the Bank of the Philippine Islands, and Angela M.
Butte — hereinafter referred to collectively as defendants — for the
partition of a parcel of land situated at the Northwestern corner of
Escolta street and Plaza Sta. Cruz, Manila — otherwise known as
Lot 1 of Block 2120 of the Cadastral Survey of Manila and more
particularly described in Transfer Certificate of Title No. 53946 of
the Register of Deeds for said City — and belonging pro indiviso to
both parties, one-sixth (1/6) to the plaintiff and five-sixths (5/6) to
the defendants.
Manuel Uy & Sons expressed its conformity to the partition, "if the
same can be done without great prejudice to the interests of the
parties." Defendant Butte agreed to the partition prayed for. The
other defendants objected to the physical partition of the property
in question, upon the theory that said partition is "materially and
legally" impossible and "would work great harm and prejudice to
the co-owners." By agreement of the parties the lower Court
referred the matter to a Commission composed of:
(1) Delfin Gawaran, Deputy Clerk of said court, as Chairman,
(2) Artemio U. Valencia, President of the Manila Board of Realtors,
as commissioner for plaintiff, and
(3) Ramon F. Cuervo, President of the Perpetual Investment
Corporation, Inc., as commissioner for defendants,
to determine whether the property is susceptible of partition, and
submit a plan therefor, if feasible, as well as to report thereon.
Subsequently, the commissioners submitted their individual reports
with their respective plans for the segregation of plaintiff's share.
After due hearing, the Court rendered a decision declaring that
plaintiff is entitled to the segregation of his share, and directing
that the property be partitioned in accordance with the plan
submitted by commissioner Valencia, and that the expenses
incident thereto be paid by both parties proportionately. Hence,
this appeal by, the defendants, except Mrs. Butte. Appellants
maintain that the lower court has erred: 1) in holding that said
property is legally susceptible of physical division; 2) in accepting
the recommendation of commissioner Valencia, instead of that of
commissioner Cuervo, or a proposal made by the very plaintiff; and
3) in not ordering that the incidental expenses be borne exclusively
by him.
We find no merit in the appeal.
With respect to the first alleged error, it is urged that a physical
division of the property will cause "inestimable damage" to the
interest of the co-owners. No evidence, however, has been
introduced, or sought to be introduced, in support of this
allegation. Moreover, the same is predicated upon the assumption
that a real estate suitable for commercial purposes — such as the
one herein sought to be partitioned — is likely to suffer a
proportionately great diminution in value when its area becomes
too small. But, then, if plaintiff's share of 260.26 square meters
were segregated from the property in question, there would still
remain a lot of 1,301.34 square meters for appellants herein and
Mrs. Butte. A real estate of this size, in the very heart of Manila, is
not, however, inconsequential, in comparison to that of the present
property of the community. In other words, we do not believe that
its value would be impaired, on account of the segregation of
plaintiff's share, to such an extent as to warrant the conclusion that
the property is indivisible.
Appellants argue that, instead of making the aforementioned
segregation, plaintiff's share should be sold to them. In support of
this pretense, they cite the provision of Article 495 of our Civil
Code, to the effect that:
. . . Notwithstanding the provisions of the preceding article, the co-
owners cannot demand a physical division of the thing owned in
common, when to do so would render it unserviceable for the use
for which it is intended. But the co-ownership may be terminated in
accordance with article 498.
They apparently assume, once again, that the alleged "inestimable
damage" to be suffered by the property, if plaintiff's share were
segregated, is equivalent to rendering it "unserviceable for the use
for which it is intended." Independently of the fact that the minor
premise of this syllogism — the alleged "inestimable damage" —
has not been established, the conclusion drawn by appellants does
not follow necessarily. Indeed, the record shows that there are two
(2) buildings on the land in question, namely: 1) a two-storey
commercial building — known as "Sta. Cruz Building" — abutting
on the one (1) side, 2 on the Escolta, and, on the other 3 on Plaza
Santa Cruz; and 2) a small two-storey residential building, on the
Northwestern end of the lot, and behind the first building, adjoining
the Estero de la Reina, which constitutes the Southwestern
boundary of the property. There is nothing to show that, after
segregating plaintiff's share, the buildings left on the remaining
1,301.34 square meters, representing defendants' share, would be
unserviceable, either for commercial or for residential purposes. On
the contrary, it seems obvious that plaintiff would not insist upon
the partition prayed for, if his share 4 were unserviceable for either
— particularly the commercial — purpose. In fact, every one of the
aforementioned commissioners, including the one representing
defendants herein, recommended the segregation of plaintiff's
share. The commissioners merely failed to agree on the precise
configuration thereof.
This brings us to the second issue raised by appellants: whether
the lower court should have adopted the plan submitted by their
own commissioner, or "in not taking into consideration," at least, a
proposal made by plaintiff herein. In this connection, it appears
that said commissioner 5 recommended that plaintiff's share be
given a frontage of 6.14 lineal meters at Plaza Sta. Cruz, whereas
the commissioner for the Court 6 favored a frontage of 12.66
square meters at said Plaza; that defendants' main objection to the
plan recommended by commissioner Valencia 7 and adopted by the
lower court, is that it left behind the portion awarded to plaintiff, a
lot of 169 square meters, which would have to be divided among
the defendants, should they later wish to have their individual
shares segregated; and that, in order to offset this objection,
plaintiff expressed — in one of the pre-trials held in the lower court
and in order to "facilitate early termination" of the case — the
willingness "to buy from the other co-owners the remaining portion
of the land behind his lot at P1,000 per square meter."1awphîl.nèt
The record does not show that this offer of the plaintiff had not
been "taken into consideration" by the lower court. Moreover,
defendants had not accepted it. And neither do they accept it now,
for they would want the plaintiff to pay a price higher than that
offered by him. Upon the other hand, the disadvantage resulting to
the defendants from the existence of said lot of 169 square meters,
behind that awarded to the plaintiff, is offset by the fact that the
remaining portion of the land in question — representing
defendants' collective share — has, in addition to a frontage of
around 40 meters on Plaza Santa Cruz, a frontage of 24.13 meters
on Escolta Street, which apart from being, admittedly,
the most valuable one, is totally denied to the plaintiff. Then, again
the Cuervo plan giving plaintiff a 6.14 meters frontage of Plaza Sta.
Cruz, goes all the way down to the Western end of the property,
the Estero de la Reina, and would require a partition of the
residential building, on that part of the property in question, which
the very plaintiff says is indivisible, because it would render said
building "unserviceable for the purpose for which it is intended." 8
As regards the last alleged error, it is obvious that the segregation
of plaintiff's share inures to the benefit not only of the plaintiff, but,
also, of the defendants, and that both should, consequently, defray
the incidental expenses.
WHEREFORE, the decision appealed from is hereby the costs of this
instance against herein defendants-appellants. It is so ordered.
G.R. No. 113539 March 12, 1998
CELSO R. HALILI and ARTHUR R. HALILI, petitioners,
vs.
COURT OF APPEALS, HELEN MEYERS GUZMAN, DAVID REY
GUZMAN and EMILIANO CATANIAG, respondents.
PANGANIBAN, J.:
The factual findings of a trial court, when affirmed by the Court of
Appeals, may no longer be reviewed and reversed by this Court in
a petition for review under Rule 45 of the Rules of Court. The
transfer of an interest in a piece of land to an alien may no longer
be assailed on constitutional grounds after the entire parcel has
been sold to a qualified citizen.
The Case
These familiar and long-settled doctrines are applied by this Court
in denying this petition under Rule 45 to set aside the Decision 1 of
the Court of Appeals 2 in CA-GR CV No. 37829 promulgated on
September 14, 1993, the dispositive portion of which states:3
WHEREFORE, and upon all the foregoing, the Decision of the court
below dated March 10, 1992 dismissing the complaint for lack of
merit is AFFIRMED without pronouncement as to costs.
The Facts
The factual antecedents, as narrated by Respondent Court, are not
disputed by the parties. We reproduce them in part, as follows:
Simeon de Guzman, an American citizen, died sometime in 1968,
leaving real properties in the Philippines. His forced heirs were his
widow, defendant appellee [herein private respondent] Helen subject land was urban. Citing Tejido
Meyers Guzman, and his son, defendant appellee [also herein vs. Zamacoma,8 and Yap vs. Grageda,9 it further held that,
private respondent] David Rey Guzman, both of whom are also although the transfer of the land to David Rey may have
American citizens. On August 9, 1989, Helen executed a deed of been invalid for being contrary to the Constitution, there
quitclaim (Annex A-Complaint), assigning [,] transferring and was no more point in allowing herein petitioners to recover
conveying to David Rey all her rights, titles and interests in and the property, since it has passed on to and was thus already
over six parcels of land which the two of them inherited from owned by a qualified person.
Simeon.
Hence, this petition. 10
Among the said parcels of land is that now in litigation, . . .
situated in Bagbaguin, Sta. Maria, Bulacan, containing an area of Issues
6,695 square meters, covered by Transfer Certificate of Title No. T-
170514 of the Registry of Deeds of Bulacan. The quitclaim having The petition submits the following assignment of errors:
been registered, TCT No. T-170514 was cancelled and TCT No. T-
120259 was issued in the name of appellee David Rey Guzman.
. . . the Honorable Court of Appeals —

On February 5, 1991, David Rey Guzman sold said parcel of land to

1. Erred in affirming the conclusion of the trial court that the
defendant-appellee [also herein private respondent] Emiliano
land in question is urban, not rural
Cataniag, upon which TCT No. T-120259 was cancelled and TCT
No. T-130721(M) was issued in the latter's name.4
2. Erred in denying petitioners' right of redemption under
Art. 1621 of the Civil Code
Petitioners, who are owners of the adjoining lot, filed a complaint
before the Regional Trial Court of Malolos, Bulacan, questioning the
constitutionality and validity of the two conveyances — between 3. Having considered the conveyance from Helen Meyers
Helen Guzman and David Rey Guzman, and between the latter and Guzman to her son David Rey Guzman illegal, erred in not
Emiliano Cataniag — and claiming ownership thereto based on their declaring the same null and void[.] 11
right of legal redemption under Art. 1621 5 of the Civil Code.
The Court's Ruling
In its decision6 dated March 10, 1992,7 the trial court
dismissed the complaint. It ruled that Helen Guzman's The petition has no merit.
waiver of her inheritance in favor of her son was not
contrary to the constitutional prohibition against the sale of First Issue: The Land Is Urban;
land to an alien, since the purpose of the waiver was simply Thus, No Right of Redemption
authorize David Rey Guzman to dispose of their properties
in accordance with the Constitution and the laws of the The first two errors assigned by petitioners being
Philippines, and not to subvert them. On the second issue, it interrelated — the determination of the first being a
held that the subject land was urban; hence, petitioners had prerequisite to the resolution of the second — shall be
no reason to invoke their right of redemption under Art. discussed together
1621 of the Civil Code.
Subject Land Is Urban
The Halilis sought a reversal from the Court of Appeals
which, however, denied their appeal. Respondent Court Whether the land in dispute is rural or urban is a factual
affirmed the factual finding of the trial court that the question which, as a rule, is not reviewable by this
Court. 12 Basic and long-settled is the doctrine that findings
of fact of a trial judge, when affirmed by the Court of
Appeals, are binding upon the Supreme Court. This admits
of only a few exceptions, such as when the findings are
grounded entirely on speculation, surmises or conjectures;
when an inference made by the appellate court from its
factual findings is manifestly mistaken, absurd or
impossible; when there is grave abuse of discretion in the
appreciation of facts; when the findings of the appellate
court go beyond the issues of the case, run contrary to the
admissions of the parties to the case or fail to notice certain
relevant facts which, if properly considered, will justify a
different conclusion; when there is a misappreciation of
facts; when the findings of fact are conclusions without
mention of the specific evidence on which they are based,
are premised on the absence of evidence or are contradicted
by evidence on record. 13
The instant case does not fall within any of the aforecited
exceptions. In fact, the conclusion of the trial court — that
the subject property is urban land — is based on clear and
convincing evidence, as shown in its decision which
disposed thus:
. . . As observed by the court, almost all the roadsides along
the national ghighway [sic] of Bagbaguin, Sta. Maria,
Bulacan, are lined up with residential, commercial or
industrial establishments. Lined up along the Bagbaguin
Road are factories of feeds, woodcrafts [sic] and garments,
commercial stores for tires, upholstery materials, feeds
supply and spare parts. Located therein likewise were the
Pepsi-Cola Warehouse, the Cruz Hospital, three gasoline
stations, apartment buildings for commercial purposes and
construction firms. There is no doubt, therefore, that the
community is a commercial area thriving in business
activities. Only a short portion of said road [is] vacant. It is
to be noted that in the Tax Declaration in the name of Helen
Meyers Guzman[,] the subject land is termed agricultural[,]
while in the letter addressed to defendant Emiliano
Cataniag, dated October 3, 1991, the Land Regulatory Board
attested that the subject property is commercial and the
trend of development along the road is commercial. The
Board's classification is based on the present condition of
the property and the community thereat. Said classification
is far more later [sic] than the tax declaration.14
No Ground to Invoke
Right of Redemption
In view of the finding that the subject land is urban in
character, petitioners have indeed no right to invoke Art.
1621 of the Civil Code, which presupposes that the land
sought to be redeemed is rural. The provision is clearly
worded and admits of no ambiguity in construction:
Art. 1621. The owners of adjoining lands shall also have the
right of redemption when a piece of rural land, the area of
which does not exceed one hectare, is alienated, unless the
grantee does not own any rural land.
xxx xxx xxx
Under this article, both lands — that sought to be redeemed
and the adjacent lot belonging to the person exercising the
right of redemption — must be rural. If one or both are
urban, the right cannot be invoked.15 The purpose of this
provision, which is limited in scope to rural lands not
exceeding one hectare, is to favor agricultural
development.16 The subject land not being rural and,
therefore, not agricultural, this purpose would not be served
if petitioners are granted the right of redemption under Art.
1621. Plainly, under the circumstances, they cannot invoke
it.
Second Issue: Sale to Cataniag Valid
Neither do we find any reversible error in the appellate
court's holding that the sale of the subject land to Private
Respondent Cataniag renders moot any question on the
constitutionally of the prior transfer made by Helen Guzman
to her son David Rey.
True, Helen Guzman's deed of quitclaim — in which she
assigned, transferred and conveyed to David Rey all her
rights, titles and interests over the property she had
inherited from her husband — collided with the Constitution,
Article XII, Section 7 of which provides:
Sec. 7. Save in cases of hereditary succession, no private
lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands of the public domain.
The landmark case of Krivenko vs. Register of
Deeds 17 settled the issue as to who are qualified (and
disqualified) to own public as well as private lands in the
Philippines. Following a long discourse maintaining that the
"public agricultural lands" mentioned in Section 1, Article
XIII of the 1935 Constitution, include residential,
commercial and industrial lands, the Court then stated:
Under section 1 of Article XIII [now Sec. 2, Art. XII] of the
Constitution, "natural resources, with the exception of
public agricultural land, shall not be alienated," and with
respect to public agricultural lands, their alienation is
limited to Filipino citizens. But this constitutional purpose
conserving agricultural resources in the hands of Filipino
citizens may easily be defeated by the Filipino citizens
themselves who may alienate their agricultural lands in
favor of aliens. It is partly to prevent this result that section
5 is included in Article XIII, and it reads as follows:
Sec. 5. Save in cases of hereditary succession, no private
agricultural land will be transferred or assigned except to
individuals, corporations or associations qualified to acquire
or hold lands of the public domain in the Philippines.
This constitutional provision closes the only remaining
avenue through which agricultural resources may leak into
aliens' hands. It would certainly be futile to prohibit the
alienation of public agricultural lands to aliens if, after all,
they may be freely so alienated upon their becoming private
agricultural lands in the hands of Filipino citizens.
Undoubtedly, as above indicated, section 5 [now Sec. 7] is
intended to insure the policy of nationalization contained in
section 1 [now Sec. 2]. Both sections must, therefore, be
read together for they have the same purpose and the same
subject matter. It must be noticed that the persons against
whom the prohibition is directed in section 5 [now Sec. 7]
are the very same persons who under section 1 [now Sec. 2]
are disqualified "to acquire or hold lands of the public
domain in the Philippines." And the subject matter of both
sections is the same, namely, the non transferability of
"agricultural land" to aliens . . . .18
The Krivenko rule was recently reiterated in Ong Ching Po
vs. Court of Appeals, 19 which involves a sale of land to a
Chinese citizen. The Court sad:
The capacity to acquire private land is made dependent
upon the capacity to acquire or hold lands of the public
domain. Private land may be transferred or conveyed only to
individuals or entities "qualified to acquire lands of the
public domain" (II Bernas, The Constitution of the
Philippines 439-440 [1988 ed.]).
The 1935 Constitution reserved the right to participate in
the "disposition, exploitation, development and utilization"
of all "lands of the public domain and other natural
resources of the Philippines" for Filipino citizens or
corporations at least sixty percent of the capital of which
was owned by Filipinos. Aliens, whether individuals or
corporations, have been disqualified from acquiring public
lands; hence, they have also been disqualified from
acquiring private lands. 20
In fine, non-Filipinos cannot acquire or hold title to private
lands or to lands of the public domain, except only by way of
legal succession. 21
But what is the effect of a subsequent sale by the
disqualified alien vendee to a qualified Filipino citizen? This
is not a novel question. Jurisprudence is consistent that "if
land is invalidly transferred to an alien who subsequently
becomes a citizen or transfers it to a citizen, the flaw in the
original transaction is considered cured and the title of the
transferee is rendered valid." 22
Thus, in United Church Board of Word Ministries
vs. Sebastian, 23 in which an alien resident who owned
properties in the Philippines devised to an American non-
stock corporation part of his shares of stock in a Filipino
corporation that owned a tract of land in Davao del Norte,
the Court sustained the invalidity of such legacy. However,
upon proof that ownership of the American corporation has
passed on to a 100 percent Filipino corporation, the Court
ruled that the defect in the will was "rectified by the
subsequent transfer of the property."
The present case is similar to De Castro vs. Tan. 24 In that
case, a residential lot was sold to a Chinese. Upon his death,
his widow and children executed an extrajudicial
settlement, whereby said lot was allotted to one of his sons
who became a naturalized Filipino. The Court did not allow
the original vendor to have the sale annulled and to recover
the property, for the reason that the land has since become
the property of a naturalized Filipino citizen who is
constitutionally qualified to own land.
WHEREFORE, the petition is hereby DENIED. The challenged
Decision is AFFIRMED. Costs against petitioner.
G.R. No. 55134 December 4, 1995
PEDRO PILAPIL and TEODORICA PENARANDA, petitioners,
vs.
HONORABLE COURT OF APPEALS, Spouses CARMEN
OTADORA and LUIS MASIAS, VITALIANA OTADORA, Spouses
MACARIO BENSIG and MARCELA ALIGWAY, Spouses
DIONISIO BENSIG and JUANITA ARSENAL, Spouses
SINFOROSO ANDRIN and VISITACION OTADORA, and H.
SERAFICA & SONS CORPORATION, respondents.
ROMERO, J.:

Likewise, in the cases of Sarsosa vs. Cuenco, 25 Godinez

Felix Otadora was the registered owner of a 273,796-square meter
vs. Pak Luen, 26 Vasquez vs. Li Seng Giap 27 and Herrera
parcel of land in Ormoc City known as Lot 8734 and covered by
vs. Luy Kim Guan, 28 which similarly involved the sale of
Original Certificate of Title No. 26026. He died in 1940 survived by
land to an alien who thereafter sold the same to a Filipino
his wife, Leona Garbo, and their children Vitaliana, Maxima and
citizen, the Court again applied the rule that the subsequent
Agaton. Another son, Sergio, predeceased him. From 1946 to
sale can no longer be impugned on the basis of the invalidity
1947, Leona and the three children sold portions of Lot 8734 to
of the initial transfer.
separate buyers, leaving a segregated portion known as Lot 8734-
B-5 with an area of 51,019 square meters. Leona died in 1956.
The rationale of this principle was explained in Vasquez
vs. Li Seng Giap thus:
On March 21, 1962, the Otadora siblings, together with Sergio's
son Antonio, executed a deed of extrajudicial partition and
. . . [I]f the ban on aliens from acquiring not only confirmation of sales,1 giving each of them a one-fourth undivided
agricultural but also urban lands, as construed by this Court share in the remaining property.2
in the Krivenko case, is to preserve the nation's lands for
future generations of Filipinos, that aim or purpose would
That very same day, Vitaliana and Agaton sold to petitioners an
not be thwarted but achieved by making lawful the
undivided portion, measuring 18,626 square meters, of Lot 8734-
acquisition of real estate by aliens who became Filipino
B-5.3 The deed of sale, which was executed in the presence of
citizens by naturalization.29
Antonio and a certain Eulogio Simon, specified that the possession
and ownership of the property sold shall be transferred to the
Accordingly, since the disputed land is now owned by buyers from the date of the instrument.
Private Respondent Cataniag, a Filipino citizen, the prior
invalid transfer can no longer be assailed. The objective of
The deed of extrajudicial partition was annotated on OCT No.
the constitutional provision — to keep our land in Filipino
26026 on March 26, 1962 under Entry No. 10897. Because of such
hands — has been served.
partition, OCT No. 26026 was cancelled and replaced by Transfer
Certificate of Title No. 4026 which, in turn, was superseded by TCT
No. 4029, indicating as owners Agaton, Vitaliana, Maxima, and
Antonio. The sale to petitioners was inscribed at the back of TCT
No. 4029 as Entry No. 10903 on March 29, 1962.
Meanwhile, Antonio sold on October 11, 1962 his one-fourth share
in the lot to his cousin Macario Bensig, Maxima's son, who ceded
one-half thereof, or one-eighth of the entire partitioned lot, to the
spouses Visitacion Otadora and Sinforoso Andrin, by way of a Deed
of Quitclaim dated February 12, 1963, 4 and in recognition of
Visitacion's hereditary rights as Antonio's sister.
Thus, TCT No. 4029 was cancelled on February 15, 1963 and
supplanted by TCT No. 4484,5 which showed Agaton, Vitaliana,
Maxima, Macario, and the spouses Visitacion and Sinforoso Andrin
as owners of Lot 8734-B-5. Petitioners' names did not appear
among the owners, although in the memorandum of encumbrances
at the back of TCT No. 4484, Entry No. 10903 regarding the sale to
them by Vitaliana and Agaton was retained.
Despite the sale of 18,626 square meters of their undivided share
in Lot No. 8734-B-5 earlier made in favor of petitioners, however,
Agaton again sold his one-fourth share in the lot to his daughter
Carmen on February 12, 1970;6 Vitaliana, on the other hand, re-
sold her one-fourth share to Maxima on January 28, 1971.7 Four
days later, Maxima sold her now one-half share to her sons
Dionisio and Macario Bensig,8 who were able to register on August
12, 1971 the said properties in their and their wives' names,
respectively, as Lot 8734-B-5-D, under TCT No. 90969 covering an
area of 5,508 square meters, and as Lot 8734-B-5-C, under TCT
No. 909410 covering an area of 26,378 square meters.
On September 8, 1971, TCT No. 912911 was issued to the spouses
Sinforoso and Visitacion Andrin for their 6,378-square meter lot
now known as Lot No. 8734-B-5-B, and TCT No. 913012 was issued
to Carmen and her husband Luis Masias for their 12,755-square
meter lot now known as Lot No. 8734-B-5-A.
It must be noted that while Entry No. 10903 does not seem to
have been inscribed on TCT Nos. 9096 and 9129, the records show
that it appears on the back of TCT Nos. 9094 and 9130. 13 With the
issuance of these four certificates of title, TCT No. 4484 was finally
cancelled.
Upon discovery of the new titles, petitioners filed a protest with the
Register of Deeds of Ormoc City who, in a letter dated December 9,
1971, informed Carmen, Sinforoso, Macario, and Dionisio of the
existence of the deed of sale in favor of petitioners and required
them to present their (original) titles for proper annotation.14 Such
request was, however, ignored.
On July 10, 1972, Carmen and Luis Masias sold Lot No. 8734-8-5-A
to H. Serafica & Sons Corporation,15 which was not able to register
the same because of the annotation in TCT No. 9130 earlier made
showing the sale in favor of petitioners. Because of this, the
corporation charged the vendors with estafa before the City Fiscal's
Office, but the complaint did not prosper.
Petitioners therefore filed, on December 8, 1973, a complaint for
quieting of title, annulment of deeds, cancellation of titles,
partition, and recovery of ownership with damages, against herein
private respondents. The complaint alleged, among other things,
that petitioners succeeded in possessing only 12,000 square
meters of the lot and needed 6,626 square meters more to
complete the total area purchased from Vitaliana and Agaton in
1962.
In its decision dated June 20, 1994, the court a quo concluded that
the annotation on TCT No. 4484 of the sale by Vitaliana and Agaton
in favor of petitioners was null and void because the latter failed to
surrender the owner's duplicate copy of the title, in violation of
Section 55 of the Land Registration Act (Act No. 496).16 It states:
WHEREFORE, decision is hereby rendered in favor of the
defendants and against the plaintiffs hereby dismissing plaintiffs'
complaint, and ordering the plaintiffs to pay the defendants at the
rate of P1,000.00 for each counsel for and as attorney's fees, to
vacate Lot No. 8734-B-5-A, and deliver the same to defendant H.
Serafica & Sons Corporation, and further ordering the plaintiffs and
defendants spouses Luis Masias and Carmen Otadora to jointly and
severally pay H. Serafica & Sons Corporation actual damages at the
rate of P1,275.00 a year from July 10, 1972, until said land shall
have been delivered to H. Serafica & Sons Corporation all of which
amounts shall bear legal rate of interest from the filing of the
complaint until paid, with costs against the plaintiffs.
On appeal, the appellate court made the following findings:
. . . However, it is clear from the documents presented, particularly
Exhibit C, that the certificate of title mentioned therein as covering
the land at the time of the sale was Original Certificate of Title No.
26026. But it appears from OCT No. 26026 that the owners thereof
were Felix Otadora and Leona Garbo. It may, therefore, be
deduced therefrom that at the time of the registration of the deed,
OCT No. 26026 had already been cancelled, and the certificate of
title covering the land sold was TCT No. 4029 which was issued on
March 29, 1962 (should be March 26, 1962) and the inscription of
the deed of sale was made on March 29, 1962. OCT No. 26026
thereby became inexistent, it having been already cancelled by
TCT(s) Nos. 4026 and 4029. It would have been against the law to
have the deed of sale registered in TCT No. 4029 without an order
from the proper court authorizing such registration, specifically
because OCT No. 26026 had already undergone two cancellations,
first by TCT No. 4026 and then by TCT No. 4029. Appellants should
have filed the necessary petition with the proper court asking that
the Register of Deeds be authorized to annotate the deed of sale
executed by Agaton Otadora and Vitaliana Otadora in their favor
because OCT No. 26026 was omitted. The said title was, therefore,
null and void, and the same did not acquire the effect of a
constructive notice to the whole world of the interest over the land
in question of the plaintiffs-appellants. At most, the deed of sale is
merely a contract between the plaintiffs-appellants and the vendors
appearing therein but without any binding effect upon their persons
and upon whom bad faith cannot be imputed.
The whole property has not been subdivided into specific portions
to be owned by each co-owners (sic). No definite portion having
been clearly allocated to them, the plaintiffs-appellants cannot take
possession of the land allegedly sold to them. They should have
demanded a subdivision of the land, or forged an agreement with
the other co-owners as to which portion they would be allowed to
take possession while awaiting for (sic) the actual subdivision
thereof. But this, the plaintiffs-appellants had not done, and their
entry into the land without those conditions previously complied
with amounts to a transgression on the property rights of the other
co-owners.
Plaintiffs-appellants claim to have bought an area of 18,626 square
meters out of the total share of the vendors of 25,510 square
meters but they had taken possession over an area of 12,000
square meters. The deed of sale did not specify what part of the
1/4 share of each of the registered owners who executed the sale
was sold to the appellants.
The Court of Appeals also agreed with the lower court that H.
Serafica & Sons Corporation was an innocent purchaser for value
as it was not required by law to go beyond TCT No. 9130 which, on
its face, appeared to be unencumbered. It ruled that while the
Pilapil spouses "may have a cause of action against the other
defendants-appellees, there is no ground or reason upon which the
same action would lie against appellee corporation." Hence, the
Court of Appeals affirmed the decision of the lower court with the
modification that the award of damages of P1,275.00 a year from
July 10, 1972 be cancelled.
In the instant petition for review on certiorari, petitioners argue
that the Court of Appeals erred in holding that: (a) the annotation
of the sale in their favor on TCT No. 4029 is ineffectual; (b) the
deeds of sale respectively executed by Agaton and Vitaliana in
favor of Carmen and Maxima are valid and superior to that
executed earlier by Agaton and Vitaliana in their favor; (c) their
entry into Lot No. 8734-B-5 is illegal; (d) the sale between Maxima
and her children is valid; and (e) H. Serafica & Sons Corporation is
a buyer in good faith, when it was "at least negligent in not
verifying or inspecting the land or title of its vendors." Petitioners
contend that the liability of the Otadoras who sold the same
property twice should have been determined to avoid multiplicity of
suits and that by upholding the award of attorney's fees, a travesty
of justice had been tolerated by the appellate court.
After examining the records of the case, as well as the applicable
law and jurisprudence, the Court is convinced of the merits of the
petition.
The court below correctly ruled that the annotation of Entry No.
10903 in the certificates of title was not made in accordance with
law. To affect the land sold, the presentation of the deed of sale
and its entry in the day book must be done with the surrender of
the owner's duplicate of the certificate of title.17 Production of the
owner's duplicate of the certificate of title is required by Section 55
of Act No. 496 (now Section 53 of Presidential Decree No. 1529),
and only after compliance with this and other requirements shall
actual registration retroact to the date of entry in the day book.18
However, nonproduction of the owner's duplicate of the certificate
of title may not invalidate petitioners' claim of ownership over the
lot involved considering the factual circumstances of this case.
It is undisputed that after the sale of the lot to petitioners, the
same vendors sold the same property to persons who cannot be
considered in law to be unaware of the prior sale to the petitioners.
Thus, Agaton sold his one-fourth share of the lot to his daughter
Carmen, while Vitaliana also sold her one-fourth share to her sister
Maxima. Considering these relationships and contrary to the
findings of the courts below, the vendees, Carmen and Maxima,
cannot be considered as third parties who are not bound by the
prior sale between Agaton and Vitaliana as vendors and petitioners
as vendees, because there is privity of interest between them and
their predecessors.19 The reason for this is that the validity of a
title to a piece of property depends on the buyer's
knowledge, actual or constructive, of a prior sale.20 While there is
no direct proof that Carmen and Maxima actually knew of the sale
to petitioners, they are deemed to have constructive knowledge
thereof by virtue of their relationship to both Agaton and Vitaliana.
Hence, it has become immaterial if the sale to petitioners was
properly annotated on the correct certificate of title or not. As we
held in Abuyo v. De Suazo:21
[t]he purpose of the registration is to give notice to third persons.
And, privies are not third persons. The vendor's heirs are his
privies. Against them, failure to register will not vitiate or annul the
vendee's right of ownership conferred by such unregistered deed of
sale.
It is not disputed that of the 25,510 square meters which pertain to
Vitaliana and Agaton as their combined undivided share in Lot No.
8734-B-5, an area of 18,626 square meters had been sold to
petitioners who, in turn, were able to possess only 12,000 square
meters thereof. Thus, at most, Vitaliana and Agaton had a
remainder of 6,884 square meters of undivided share which they
could have legally disposed of. As it turned out, however, they sold
their entire individual one-fourth shares to Carmen and Maxima
who, as earlier concluded, were privy to the prior sale to
petitioners.
Thus, when Carmen sold the property to H. Serafica and Sons
Corporation, she no longer had any rights of dominion to transmit,
since her own father who sold to her the property had himself
earlier relinquished his ownership rights in favor of the petitioners.
Accordingly, Carmen transmitted no right to the corporation.
Under these circumstances, the corporation, having failed to obtain
relief through the criminal complaint filed against the spouses
Carmen Otadora and Luis Masias, and having relied on the
unencumbered transfer certificate of title shown to it by the Masias
spouses, is entitled to damages of P1,275.00 a year from July 10,
1972, which was awarded to it by the trial court. Needless to say,
the corporation may file a case against the assurance funder under
Section 101 of the Land Registration Act and Section 95 of P.D. No.
1529; but to obviate multiplicity of suits, the award of damages in
its favor should now be upheld.
As regards the sale made by Vitaliana to her sister Maxima, the
former can no longer transmit any property rights over the subject
lot when she sold it to her own sister as she had previously sold
the same property to petitioners. Moreover, as Vitaliana's sister,
Maxima was actually a co-owner of Lot No. 8734-B-5 which, at the
time of the sale to petitioners, was not yet partitioned and
segregated. Maxima was, therefore, privy to the contract. As
defined in Basa v. Aguilar,22 a third person, within the meaning of
Article 1620 of the Civil Code (on the right of legal redemption of a
co-owner) is anyone who is not a co-owner.
On the matter of whether the rights of co-owners had been
transgressed by the sale to the petitioners, the trial court
erroneously ruled that there should be proof of compliance with
Article 1623 of the Civil Code requiring the vendor of the property
to give a written notice of sale to the other co-owners. Said
provision of law had been rendered inutile by the fact that
petitioners took possession of the property immediately after the
execution of the deed of sale in their favor and continue to possess
the same. Since the fact of possession by the petitioners had not
been questioned by any of the co-owners, the latter may be
deemed to have knowledge of the sale.
In view of the foregoing, the sale to the petitioners must be
respected by the successors-in-interest of Agaton and Vitaliana.
Inasmuch as petitioners had managed to possess only 12,000
square meters of the 18,625 square meters they bought from
Agaton and Vitaliana, the whole area purchased by them should be
taken from the shares of Agaton and Vitaliana upon partition of the
property.
WHEREFORE, the appealed decision is hereby REVERSED and SET
ASIDE. Consequently, petitioners are declared the lawful owners of
18,626 square meters of Lot 8734-B-5, which should be partitioned
as prayed for, and the lot of petitioners taken in equal portions
from the shares thereof of Agaton and Vitaliana or their
successors-in-interest. Transfer Certificates of Title Nos. 9129,
9130, 9094, and 9096 are hereby declared null and void. Private
respondents spouses Luis Masias and Carmen Otadora are also
ordered to pay actual damages to H. Serafica & Sons Corporation
at the rate of P1,275.00 a year from July 10, 1972. Costs against
private respondents except H. Serafica & Sons Corporation.
G.R. No. 121157 July 31, 1997
HEIRS OF SEGUNDA MANINGDING, represented by DELFIN,
GIL, EMMA, MANUEL, RACQUEL, ESTER, REMEDIOS and
JESSIE, all surnamed PARAYNO, MAXIMA PARAYNO,
LEONARDO PARAYNO and FELICISIMA PARAYNO, petitioners,
vs.
COURT OF APPEALS and ROQUE BAUZON (deceased),
represented by his heirs and co-defendants Luis and
Eriberta Bauzon; LUIS BAUZON, ERIBERTA BAUZON
(deceased), substituted by her husband PLACIDO ZULUETA,
and JOSE PARAYNO, respondents.
BELLOSILLO, J.:
This is an action for annulment of documents, accounting and
partition of two (2) parcels of land, a riceland and a sugarland,
situated in Calasiao, Pangasinan. Petitioners claim that they,
together with private respondents Luis and Eriberta Bauzon, own
the disputed lots in common and pro-indiviso. Luis and Eriberta,
the latter represented by her husband Placido Zulueta, aver that
their father Roque Bauzon was the owner of the subject lots by
virtue of a deed of donation propter nuptias. Roque, together with
Juan Maningding, Maria Maningding and Segunda Maningding were
the surviving children of Ramon Bauzon y Untalan who died
intestate in 1948. According to petitioners, Roque Bauzon
repudiated the co-ownership over the sugarland in 1965 and
adjudicated it to himself,1 and that in 1970 Juan and Maria
Maningding renounced and quitclaimed their shares over
the riceland in favor of Roque Bauzon by virtue of an Affidavit of
Quitclaim and Renunciation.2 Subsequently, Roque Bauzon
transferred the riceland to his son Luis Bauzon and the sugarland
to his daughter Eriberta Bauzon, both transactions being evidenced
by deeds of sale.
On 31 July 1979 Segunda Maningding died. Her heirs allegedly
discovered the transfers made by Roque Bauzon in favor of his
children only in 1986. Consequently, the heirs sought the partition
of the properties as well as the accounting of the produce but were
unsuccessful.
On the other hand private respondents aver that the Affidavit of
Quitclaim and Renunciation over the riceland was executed not
only by Juan Maningding and Maria Maningding but also by
Segunda Maningding. With regard to the sugarland, Roque Bauzon
denied having executed the Affidavit of Self-Adjudication presented
by petitioners. He claimed that he acquired ownership over both
the sugarland and the riceland by donation propter nuptias from
his parents Ramon Bauzon and Sotera Zulueta on 21 April 1926 in
consideration of his marriage to Petra Loresco. Since the death of
Ramon Bauzon in 1948, Roque had been in open, continuous,
notorious, adverse and actual possession of the subject properties.
The trial court found that the parcels of land formed part of the
estate of Ramon Bauzon and his wife Sotera Zulueta which, upon
their death, devolved by right of succession to their children
Segunda Maningding, Maria Maningding, Juan Maningding and
Roque Bauzon in equal pro-indiviso shares. The court a
quo however awarded both parcels to Segunda Maningding and
Roque Bauzon as co-owners in equal shares after finding that Juan
Maningding and Maria Maningding had already executed
an Affidavit of Quitclaim and Renunciation. It rejected the deed of
donation for failure to prove its due execution and authenticity and
ruled that the same was negated by the Affidavit of Quitclaim and
Renunciation of Juan Maningding and Maria Maningding in favor of
Roque Bauzon and nullified the deed of sale by Roque Bauzon in
favor of Luis Bauzon as regards the riceland and to Eriberta Bauzon
with respect to the sugarland. It concluded that Roque Bauzon
could not have validly conveyed both parcels as one-half (1/2) of
each parcel rightfully belonged to Segunda Maningding and her
heirs.
The Court of Appeals however ruled that the properties validly
pertained to Roque Bauzon by virtue of the donation propter
nuptias. Consequently, the transfers made by Roque Bauzon must
be given effect. However, upon motion for reconsideration, the
same deed of donation was declared null and void by the appellate
court for failure to comply with Art. 633 of the old Civil Code, the
law then applicable, which required for the validity of the deed of
donation to be in a public instrument. Nevertheless, the same court
maintained that the properties belonged to Roque Bauzon by virtue
of acquisitive prescription.
We agree with the Court of Appeals. Rogue Bauzon acquired
ownership over the subject properties by acquisitive prescription.
Prescription, in general, is a mode of acquiring (or losing)
ownership and other real rights through the lapse of time in the
manner and under conditions laid down by law, namely, that the
possession should be in the concept of an owner, public, peaceful,
uninterrupted and adverse.3 Acquisitive prescription is either
ordinary or extraordinary.4 Ordinary acquisitive prescription
requires possession in good faith and with just title for ten (10)
years. In extraordinary prescription ownership and other real rights
over immovable property are acquired through uninterrupted
adverse possession thereof for thirty (30) years, without need of
title or of good faith.5
The disputed lots are unregistered lands, both parcels being
covered only by tax declarations formerly in the name of Ramon
Bauzon and now transferred to Luis and Eriberta Bauzon. While tax
declarations and receipts are not conclusive evidence of ownership,
yet, when coupled with proof of actual possession, as in the instant
case, tax declarations and receipts are strong evidence of
ownership.6
Even assuming that the donation proper nuptias is void for failure
to comply with formal requisites,7 it could still constitute a legal
basis for adverse possession. With clear and convincing evidence of
possession, a private document of donation may serve as basis for
a claim of ownership.8 In Pensader v. Pensader9 we ruled that while
the verbal donation under which the defendant and his
predecessors-in-interest have been in possession of the lands in
question is not effective as a transfer of title, still it is a
circumstance which may explain the adverse and exclusive
character of the possession. In Espique v. Espique10 we held —
There is no question that the donation in question is invalid
because it involves an immovable property and the donation was
not made in a public document as required by Article 633 of the old
Civil Code, in connection with Article 1328 of the same Code
(concerning gifts propter nuptias), but it does not follow that said
donation may not serve as basis of acquisitive prescription when on
the strength thereof the done has taken possession of the property
adversely and in the concept of owner, or, as this Court well said:
"While the verbal donation, under which the defendants and his
predecessors-in-interest have been in possession of the lands in
question, is not effective as a transfer of title, yet it is a
circumstances which may explain the adverse and exclusive
character of the possession' (Pensader v. Pensader, 47 Phil. 673,
680). This also an action for partition. It was shown that the
donation of the property was made not even in a private document
but only verbally. It was also shown that the defendants, through
their predecessors-in-interest, were in adverse and continuous
possession of the lands for a period of over 30 years. Yet, the court
decided the case in favor of defendants on the ground of
acquisitive prescription. There is a close parallelism between the
facts of this case and the present.
xxx xxx xxx
We do not need to stretch our mind to see that under such
allegations plaintiffs intended to convey the idea that defendant
has possessed the lands openly, adversely and without interruption
from 1916 to 1949 for he is the one who has possessed and reaped
the whole benefit thereof. As to the character of the possession
held by defendant during that period one cannot also deny that it is
in the concept of owner considering that the lands were donated to
him by his predecessors-in-interest on the occasion of his marriage
even if the same was not embodied in a public instrument. The
essential elements constituting acquisitive prescription are
therefore present which negative the right of plaintiffs to ask for
partition of said properties. On this point we find pertinent the
following observation of the trial court; "Any person who claims
right of ownership over immovable properties and does not invoke
that right but instead tolerated others in possession for thirty years
is guilty of laches and negligence and he must suffer the
consequence of his acts."
In the instant case, Roque Bauzon possessed the subject parcels of
land in the concept of owner by virtue of the donation propter
nuptias. The possession was public as it was Roque Bauzon who
personally tilled and cultivated the lots. The acts of reaping the
benefits of ownership were manifest and visible to all. These acts
were made more pronounced and public considering that the
parcels of land are located in a municipality wherein ownership and
possession are particularly and normally known to the community.
Roque peacefully possessed the properties as he was never ousted
therefrom nor prevented from enjoying their fruits. His possession
was uninterrupted and in good faith because of his well-founded
belief that the donation propter nuptias was properly executed and
the grantors were legally allowed to convey their respective shares
in his favor. He likewise appropriated to himself the whole produce
of the parcels of land to the exclusion of all others.
The donation propter nuptias was effected as early as 21 April
1926. It was only in 1986 when the heirs of Segunda Maningding
demanded partition of the properties and conveyance of the
produce. Sixty (60) years have already elapsed. Even granting that
Roque Bauzon possessed the properties only upon the death of his
father in 1948, more than thirty (30) years have already passed. In
either case, acquisitive prescription has already set in in favor of
Roque Bauzon.
Again, even if we assume the absence of good faith and just title,
the ownership of the two (2) parcels would still appertain to Roque
Bauzon. As testified to by Delfin Parayno, one of petitioners, Roque
Bauzon and his heirs had been in continuous, adverse and public
possession of the property since 1948 up to 1986, or a period of
thirty-six (36) years, which is more than the required thirty-year
extraordinary prescription.
Prescription, as a rule, does not run in favor of a co-heir or co-
owner as long as he expressly or impliedly recognizes the co-
ownership.11 Co-owners cannot acquire by prescription the share of
the other co-owners, absent a clear repudiation of the co-
ownership. In order that title may prescribe in favor of one of the
co-owners, it must be clearly shown that he has repudiated the
claims of the others, and that they were apprised of his claim of
adverse and exclusive ownership, before the prescriptive period
would begin to run. Mere refusal to accede to a partition, without
specifying the grounds for such refusal, cannot be considered as
notice to the other co-owners of the occupant's claim of title in
himself in repudiation of the co-ownership. The evidence relative to
the possession, as a fact upon which the alleged prescription is
based, must be clear, complete and conclusive in order to establish
said prescription without any shadow of doubt; and when upon trial
it is not shown that the possession of the claimant has been
adverse and exclusive and opposed to the rights of the others, the
case is not one of ownership, and partition will lie.12
Therefore while prescription among co-owners cannot take place
when the acts of ownership exercised are vague and uncertain,
such prescription arises and produces all its effects when the acts
of ownership do not evince any doubt as to the ouster of the rights
of the other co-owners.13 As disclosed by the records, Roque
Bauzon and his heirs possessed the property from 1948 to 1986 to
the exclusion of petitioners who were never given their shares of
the fruits of the properties, for which reason they demanded an
accounting of the produce and the conveyance to them of their
shares. Unfortunately they slept on their rights and allowed almost
thirty-six (36) years to lapse before attempting to assert their
right. Perforce, they must suffer the consequence of their inaction.
WHEREFORE, the petition is DENIED. The Resolution of the Court of
Appeals of 7 July 1995 which modified its Decision of 29 November
1994 and holding that the deceased Roque Bauzon acquired the
disputed two (2) parcels of land by acquisitive prescription is
AFFIRMED. Costs against petitioners.
G.R. No. 76351 October 29, 1993
VIRGILIO B. AGUILAR, petitioner,
vs.
COURT OF APPEALS and SENEN B. AGUILAR, respondents.
Jose F. Manacop for petitioner.
Siruello, Muyco & Associates Law Office for private respondent.

BELLOSILLO, J.:
This is a petition for review on certiorari seeking to reverse and set
aside the Decision of the Court of Appeals in CA-GR CV No. 03933
declaring null and void the orders of 23 and 26 April, 1979, the
judgment by default of 26 July 1979, and the order of 22 October
1979 of the then Court of First Instance of Rizal, Pasay City,
Branch 30, and directing the trial court to set the case for pre-trial
conference.
Petitioner Virgilio and respondent Senen are brothers; Virgilio is the
youngest of seven (7) children of the late Maximiano Aguilar, while
Senen is the fifth. On 28 October 1969, the two brothers purchased
a house and lot in Parañaque where their father could spend and
enjoy his remaining years in a peaceful neighborhood. Initially, the
brothers agreed that Virgilio's share in the co-ownership was two-
thirds while that of Senen was one-third. By virtue of a written
memorandum dated 23 February 1970, Virgilio and Senen agreed
that henceforth their interests in the house and lot should be equal,
with Senen assuming the remaining mortgage obligation of the
original owners with the Social Security System (SSS) in exchange
for his possession and enjoyment of the house together with their
father.
Since Virgilio was then disqualified from obtaining a loan from SSS,
the brothers agreed that the deed of sale would be executed and
the title registered in the meantime in the name of Senen. It was
further agreed that Senen would take care of their father and his
needs since Virgilio and his family were staying in Cebu.
After Maximiano Aguilar died in 1974, petitioner demanded from
private respondent that the latter vacate the house and that the
property be sold and proceeds thereof divided among them.
Because of the refusal of respondent to give in to petitioner's
demands, the latter filed on 12 January 1979 an action to compel
the sale of the house and lot so that the they could divide the
proceeds between them.
In his complaint, petitioner prayed that the proceeds of the sale, be
divided on the basis of two-thirds (2/3) in his favor and one-third
(1/3) to respondent. Petitioner also prayed for monthly rentals for
the use of the house by respondent after their father died.
In his answer with counterclaim, respondent alleged that he had no
objection to the sale as long as the best selling price could be
obtained; that if the sale would be effected, the proceeds thereof
should be divided equally; and, that being a co-owner, he was
entitled to the use and enjoyment of the property.
Upon issues being joined, the case was set for pre-trial on 26 April
1979 with the lawyers of both parties notified of the pre-trial, and
served with the pre-trial order, with private respondent executing a
special power of attorney to his lawyer to appear at the pre-trial
and enter into any amicable settlement in his behalf.1
On 20 April 1979, Atty. Manuel S. Tonogbanua, counsel for
respondent, filed a motion to cancel pre-trial on the ground that he
would be accompanying his wife to Dumaguete City where she
would be a principal sponsor in a wedding.
On 23 April 1979, finding the reasons of counsel to be without
merit, the trial court denied the motion and directed that the pre-
trial should continue as scheduled.
When the case was called for pre-trial as scheduled on 26 April
1979, plaintiff and his counsel appeared. Defendant did not
appear; neither his counsel in whose favor he executed a special
power of attorney to represent him at the pre-trial. Consequently,
the trial court, on motion of plaintiff, declared defendant as in
default and ordered reception of plaintiff's evidence ex parte.
On 7 May 1979, defendant through counsel filed an omnibus
motion to reconsider the order of default and to defer reception of
evidence. The trial court denied the motion and plaintiff presented
his evidence.
On 26 July 1979, rendering judgment by default against defendant,
the trial court found him and plaintiff to be co-owners of the house
and lot, in equal shares on the basis of their written agreement.
However, it ruled that plaintiff has been deprived of his
participation in the property by defendant's continued enjoyment of
the house and lot, free of rent, despite demands for rentals and
continued maneuvers of defendants, to delay partition. The trial
court also upheld the right of plaintiff as co-owner to demand
partition. Since plaintiff could not agree to the amount offered by
defendant for the former's share, the trial court held that this
property should be sold to a third person and the proceeds divided
equally between the parties.
The trial court likewise ordered defendant to vacate the property
and pay plaintiff P1,200.00 as rentals2 from January 1975 up to the
date of decision plus interest from the time the action was filed.
On 17 September 1979, defendant filed an omnibus motion for new
trial but on 22 October 1979 the trial court denied the motion.
Defendant sought relief from the Court of Appeals praying that the
following orders and decision of the trial court be set aside: (a) the
order of 23 April 1970 denying defendants motion for
postponement of the pre-trial set on 26 April 1979; (b) the order of
26 April 1979 declaring him in default and authorizing plaintiff to
present his evidence ex-parte; (e) the default judgment of 26 July
1979; and, (d) the order dated 22 October 1979 denying his
omnibus motion for new trial.
On 16 October 1986, the Court of Appeals set aside the order of
the trial court of 26 April 1979 as well as the assailed judgment
rendered by default., The appellate court found the explanation of
counsel for defendant in his motion to cancel pre-trial as
satisfactory and devoid of a manifest intention to delay the
disposition of the case. It also ruled that the trial court should have
granted the motion for postponement filed by counsel for
defendant who should not have been declared as in default for the
absence of his counsel.
Petitioner now comes to us alleging that the Court of Appeals erred
(1) in not holding that the motion of defendant through counsel to
cancel the pre-trial was dilatory in character and (2) in remanding
the case to the trial court for pre-trial and trial.
The issues to be resolved are whether the trial court correctly
declared respondent as in default for his failure to appear at the
pre-trial and in allowing petitioner to present his evidence ex-parte,
and whether the trial court correctly rendered the default judgment
against respondent.
We find merit in the petition.
As regards the first issue, the law is clear that the appearance of
parties at the pre-trial is mandatory.3 A party who fails to appear at
a pre-trial conference may be non-suited or considered as in
default.4 In the case at bar, where private respondent and counsel
failed to appear at the scheduled pre-trial, the trial, court has
authority to declare respondent in default.5
Although respondent's counsel filed a motion to postpone pre-trial
hearing, the grant or denial thereof is within the sound discretion
of the trial court, which should take into account two factors in the
grant or denial of motions for postponement, namely: (a) the
reason for the postponement and (b) the merits of the case of
movant.6
In the instant case, the trial court found the reason stated in the
motion of counsel for respondent to cancel the pre-trial to be
without merit. Counsel's explanation that he had to go to by boat
as early as 25 March 1979 to fetch his wife and accompany her to
a wedding in Dumaguete City on 27 April 1979 where she was one
of the principal sponsors, cannot be accepted. We find it insufficient
to justify postponement of the pre-trial, and the Court of Appeals
did not act wisely in overruling the denial. We sustain the trial
court and rule that it did not abuse its discretion in denying the
postponement for lack of merit. Certainly, to warrant a
postponement of a mandatory process as pre-trial would require
much more than mere attendance in a social function. It is time
indeed we emphasize that there should be much more than mere
perfunctory treatment of the pre-trial procedure. Its observance
must be taken seriously if it is to attain its objective, i.e., the
speedy and inexpensive disposition of cases.
Moreover, the trial court denied the motion for postponement three
(3) days before the scheduled pre-trial. If indeed, counsel for
respondent could not attend the pre-trial on the scheduled date,
respondent at least should have personally appeared in order not
to be declared as in default. But, since nobody appeared for him,
the order of the trial court declaring him as in default and directing
the presentation of petitioner's evidence ex parte was proper.7
With regard to the merits of the judgment of the trial court by
default, which respondent appellate court did not touch upon in
resolving the appeal, the Court holds that on the basis of the
pleadings of the parties and the evidence presented ex parte,
petitioner and respondents are co-owners of subject house and lot
in equal shares; either one of them may demand the sale of the
house and lot at any time and the other cannot object to such
demand; thereafter the proceeds of the sale shall be divided
equally according to their respective interests.
Private respondent and his family refuse to pay monthly rentals to
petitioner from the time their father died in 1975 and to vacate the
house so that it can be sold to third persons. Petitioner alleges that
respondent's continued stay in the property hinders its disposal to
the prejudice of petitioner. On the part of petitioner, he claims that
he should be paid two-thirds (2/3) of a monthly rental of P2,400.00
or the sum of P1,600.00.
In resolving the dispute, the trial court ordered respondent to
vacate the property so that it could be sold to third persons and
the proceeds divided between them equally, and for respondent to
pay petitioner one-half (1/2) of P2,400.00 or the sum of P1,200.00
as monthly rental, conformably with their stipulated sharing
reflected in their written agreement.
We uphold the trial court in ruling in favor of petitioner, except as
to the effectivity of the payment of monthly rentals by respondent
as co-owner which we here declare to commence only after the
trial court ordered respondent to vacate in accordance with its
order of 26 July 1979.
Article 494 of the Civil Code provides that no co-owner shall be
obliged to remain in the co-ownership, and that each co-owner
may demand at any time partition of the thing owned in common
insofar as his share is concerned. Corollary to this rule, Art. 498 of
the Code states that whenever the thing is essentially, indivisible
and the co-owners cannot agree that it be, allotted to one of them
who shall indemnify the others, it shall be sold and its proceeds
accordingly distributed. This is resorted to (1) when the right to
partition the property is invoked by any of the co-owners but
because of the nature of the property it cannot be subdivided or its
subdivision would prejudice the interests of the co-owners, and (b)
the co-owners are not in agreement as to who among them shall
be allotted or assigned the entire property upon proper
reimbursement of the co-owners. In one case,8 this Court upheld
the order of the trial court directing the holding of a public sale of
the properties owned in common pursuant to Art. 498 of the Civil
Code.
However, being a co-owner respondent has the right to use the
house and lot without paying any compensation to petitioner, as he
may use the property owned in common long as it is in accordance
with the purpose for which it is intended and in a manner not
injurious to the interest of the other co-owners.9 Each co-owner of
property held pro indiviso exercises his rights over the whole
property and may use and enjoy the same with no other limitation
than that he shall not injure the interests of his co-owners, the
reason being that until a division is made, the respective share of
each cannot be determined and every co-owner exercises, together
with his co-participants joint ownership over the pro
indiviso property, in addition to his use and enjoyment of the
same. 10
Since petitioner has decided to enforce his right in court to end the
co-ownership of the house and lot and respondent has not refuted
the allegation that he has been preventing the sale of the property
by his continued occupancy of the premises, justice and equity
demand that respondent and his family vacate the property so that
the sale can be effected immediately. In fairness to petitioner,
respondent should pay a rental of P1,200.00 per month, with legal
interest; from the time the trial court ordered him to vacate, for
the use and enjoyment of the other half of the property
appertaining to petitioner.
When petitioner filed an action to compel the sale of the property
and the trial court granted the petition and ordered the ejectment
of respondent, the co-ownership was deemed terminated and the
right to enjoy the possession jointly also ceased. Thereafter, the
continued stay of respondent and his family in the house
prejudiced the interest of petitioner as the property should have
been sold and the proceeds divided equally between them. To this
extent and from then on, respondent should be held liable for
monthly rentals until he and his family vacate.
WHEREFORE, the petition is GRANTED. The assailed Decision of the
Court of Appeals dated 16 October 1986 is REVERSED and
SET ASIDE. The decision of the trial court in Civil Case No. 69.12-P
dated 16 July 1979 is REINSTATED, with the modification that
respondent Senen B. Aguilar is ordered to vacate the premises in
question within ninety (90) days from receipt of this and to pay
petitioner Virgilio B. Aguilar a monthly rental of P1,200.00 with
interest at the legal rate from the time he received the decision of
the trial court directing him to vacate until he effectively leaves the
premises.
The trial court is further directed to take immediate steps to
implement this decision conformably with Art. 498 of the Civil Code
and the Rules of Court. This decision is final and executory.
G.R. No. L-44426 February 25, 1982
SULPICIO CARVAJAL, petitioner,
vs.
THE HONORABLE COURT OF APPEALS ** and EUTIQUIANO
CAMARILLO and LIBERATA CACABELOS, respondents.
TEEHANKEE, J.:
The Court reverses the appellate court's decision affirming in
toto the judgment of the Court of First Instance of Pangasinan,
declaring plaintiffs-respondents the lawful owners of the land in
question and ordering defendant (herein petitioner) to pay P30.00
monthly rentals until possession of the property is surrendered to
respondents, for unless there is partition of the estate of the
deceased, either extra judicially or by court order, a co-heir cannot
validly claim title to a specific portion of the estate and send the
same. Title to any specific part of the estate does not automatically
pass to the heirs by the mere death of the decedent and the effect
of any disposition by a co-heir before partition shall be limited to
the portion which may be allotted to him upon the dissolution of
the communal estate. What a co-heir can validly dispose of is only
his hereditary rights.
Private respondents, who are husband and wife, had instituted a
complaint before the Court of First Instance for ejectment and
recovery of possession against herein petitioner, docketed as Civil
Case No. T-1163, alleging that they are the owners in fee simple of
a parcel of commercial land, pro-indiviso, consisting of 150.8 sq.
meters, more or less, situated in Poblacion, Tayug, Pangasinan,
having bought the same from Evaristo G. Espique by virtue of a
Deed of Absolute Sale executed on April 15, 1964. They also
demand that petitioner pay a monthly rental for the use of the
property all P40.00 until the property is surrendered to them.
The property in question is a 1/5 portion of a 754 sq. qmeter land
originally owned by Hermogenes Espique and his wife, both dead.
After their death their five children, namely: Maria, Evaristo,
Faustina, Estefanio and Tropinia succeeded them in the ownership
of the whole lot.
Petitioner presently occupies two-fifths of the whole lot
inherited pro-indiviso by the Espique children. Petitioner alleges
that he purchased the northern one-half portion of the lot he is
occupying (which is also claimed by respondents) from Estefanio
Espique and that the southern one-half portion of the lot he is
occupying (which is also claimed by respondents) from Estefanio
Espique and that the southern one-half portion is leased to him by
Tropinia Espique. The land subject of the controversy is the most
southern portion of the whole lot inherited by the Espique children
which petitioner claims he had bought from Estefanio on April 26,
1967 and which respondents claim they had bough from Evaristo
on April 15, 1964.
Both sales were made while the petition for partition filed by
Evaristo Espique was still pending before the Court of First Instance
of Pangasinan, docketed therein as Civil Case No. T-966.
The Court finds merit in the petition for setting aside respondent
appellate court's decision finding for respondents-plaintiffs, for the
following considerations:
The action for ejectment and recovery of possession instituted by
herein respondents in the lower court is premature, for what must
be settled frist is the action for partition. Unless a project of
partition is effected, each heir cannot claim ownership over a
definite portion of the inheritance. Without partition, either by
agreement between the parties of by judicial proceeding, a co-heir
cannot dispose of a specific portion of the estate. For where there
are two or more heirs, the whole estate such heirs. 1 Upon the
death of a person, each of his heirs becomes the undivided owner
of the whole estate left wtih respect to the part of portion which
might be adjudicated to him, a community of ownership being thus
formed among the co-owners of the estate or co-heirs while it
remains undivided. 2
While under Article 493 of the New Civil Code, each co-owner shall
have the full ownership of his part and of the fruits and benefits
pertaining thereto and he may alienate, assign or mortgage it, and
even substitute another person in its enjoyment, the effect of the
alienation or the mortgage with respect to the co-owners, shall be
limited, by mandate of the same article, to the portion which may
be allotted to him in the division upon the termination of the co-
ownership. He has no right to sell or alienate a concrete, specific,
or determinate part of the thing in common to the exclusion of the
other co-owners because his right over the thing is represented by
an abstract or Ideal portion without any physical adjudication. 3 An
individual co- owner cannot adjudicate to himself or claim title to
any definite portion of the land or thing owned in common until its
actual partition by agreement or judicial decree. Prior to that time
all that the co-owner has is an Ideal or abstract quota or
proportionate share in the entire thing owned in common by all the
co-owners. 4 What a co owner may dispose of is only his undivided
aliquot share, which shall be limited to the portion that may be
allotted to him upon partition. 5 Before partition, a co-heir can only
sell his successional rights. 6
In the case at bar, the fact that the sale executed by Evaristo G.
qqqEspique in favor of respondents and the sale executed by
Estefanio Espique in favor of petitioner were made before the
partition of the property among the co-heirs does not annul or
invalidate the deeds of sale and both sales are valid. However, the
interests thereby acquired by petitioner and respondents are
limited only to the parts that may be ultimately assigned to
Estefanio and Evaristo, respectively, upon the partition of the
estate 7 subject to provisions on subrogation of the other co-heirs
to the rights of the stranger-purchaser provided in Article 1088 of
the Civil Code. 8 Respondent court's ruling that the sale by
Estefanio in favor of petitioner is not valid because of lack of notice
to his co-heirs is erroneous. Such notice in writing is not a requisite
for the validity of the sale. Its purpose is merely to apprise the co-
heirs of the sale of a portion of the estate, for them to exercise
their preferential right of subrogation under Article 1088 of the
New Civil Code, that is, the right to redeem the property sold
within one month from the time they were notified in writing of the
sale by a co-heir. (There is nothing in the record to indicate that
such right of subrogation was in effect sought to be exercised upon
the co-heirs' having learned of the sale, which is not in issue here.)
Thus, respondents have no right to eject petitioners nor demand
payment of rentals for the use of the property in dispute. Until the
partition of the estate is ordered by the Court of First Instance of
Pangasinan in the pending partition proceedings and the share of
each co-heir is determined by metes and bounds, neither petitioner
nor respondents can rightfully claim that what they bought is the
part in dispute.
Accordingly, respondent court's judgment is set aside and
judgment is hereby rendered dismissing the complaint of
respondents-plaintiffs in the court below. No pronouncement as to
costs.
G.R. No. L-33187 March 31, 1980
CORNELIO PAMPLONA alias GEMINIANO PAMPLONA and
APOLONIA ONTE, petitioners,
vs.
VIVENCIO MORETO, VICTOR MORETO, ELIGIO MORETO,
MARCELO MORETO, PAULINA MORETO, ROSARIO MORETO,
MARTA MORETO, SEVERINA MENDOZA, PABLO MENDOZA,
LAZARO MENDOZA, VICTORIA TUIZA, JOSEFINA MORETO,
LEANDRO MORETO and LORENZO MENDOZA, respondents.
E.P. Caguioa for petitioners.
Benjamin C. Yatco for respondents.
GUERRERO, J.:
This is a petition for certiorari by way of appeal from the decision of
the Court of Appeals 1 in CA-G.R. No. 35962-R, entitled "Vivencio
Moreto, et al., Plaintiff-Appellees vs. Cornelio Pamplona, et al.,
Defendants-Appellants," affirming the decision of the Court of First
Instance of Laguna, Branch I at Biñan.
The facts, as stated in the decision appealed from, show that:
Flaviano Moreto and Monica Maniega were husband and wife.
During their marriage, they acquired adjacent lots Nos. 1495,
4545, and 1496 of the Calamba Friar Land Estate, situated in
Calamba, Laguna, containing 781-544 and 1,021 square meters
respectively and covered by certificates of title issued in the name
of "Flaviano Moreto, married to Monica Maniega."
The spouses Flaviano Moreto and Monica Maniega begot during
their marriage six (6) children, namely, Ursulo, Marta, La Paz,
Alipio, Pablo, and Leandro, all surnamed Moreto.
Ursulo Moreto died intestate on May 24, 1959 leaving as his heirs
herein plaintiffs Vivencio, Marcelo, Rosario, Victor, Paulina, Marta
and Eligio, all surnamed Moreto.
Marta Moreto died also intestate on April 30, 1938 leaving as her
heir plaintiff Victoria Tuiza.
La Paz Moreto died intestate on July 17, 1954 leaving the following
heirs, namely, herein plaintiffs Pablo, Severina, Lazaro, and
Lorenzo, all surnamed Mendoza.
Alipio Moreto died intestate on June 30, 1943 leaving as his heir
herein plaintiff Josefina Moreto.
Pablo Moreto died intestate on April 25, 1942 leaving no issue and
as his heirs his brother plaintiff Leandro Moreto and the other
plaintiffs herein.
On May 6, 1946, Monica Maniega died intestate in Calamba,
Laguna.
On July 30, 1952, or more than six (6) years after the death of his
wife Monica Maniega, Flaviano Moreto, without the consent of the
heirs of his said deceased wife Monica, and before any liquidation
of the conjugal partnership of Monica and Flaviano could be
effected, executed in favor of Geminiano Pamplona, married to
defendant Apolonia Onte, the deed of absolute sale (Exh. "1")
covering lot No. 1495 for P900.00. The deed of sale (Exh. "1")
contained a description of lot No. 1495 as having an area of 781
square meters and covered by transfer certificate of title No. 14570
issued in the name of Flaviano Moreto, married to Monica Maniega,
although the lot was acquired during their marriage. As a result of
the sale, the said certificate of title was cancelled and a new
transfer certificate of title No. T-5671 was issued in the name of
Geminiano Pamplona married to Apolonia Onte (Exh. "A").
After the execution of the above-mentioned deed of sale (Exh.
"1"), the spouses Geminiano Pamplona and Apolonia Onte
constructed their house on the eastern part of lot 1496 as Flaviano
Moreto, at the time of the sale, pointed to it as the land which he
sold to Geminiano Pamplona. Shortly thereafter, Rafael Pamplona,
son of the spouses Geminiano Pamplona and Apolonia Onte, also
built his house within lot 1496 about one meter from its boundary
with the adjoining lot. The vendor Flaviano Moreto and the vendee
Geminiano Pamplona thought all the time that the portion of 781
square meters which was the subject matter of their sale
transaction was No. 1495 and so lot No. 1495 appears to be the
subject matter in the deed of sale (Exh. "1") although the fact is
that the said portion sold thought of by the parties to be lot No.
1495 is a part of lot No. 1496.
From 1956 to 1960, the spouses Geminiano Pamplona and
Apolonio Onte enlarged their house and they even constructed a
piggery corral at the back of their said house about one and one-
half meters from the eastern boundary of lot 1496.
On August 12, 1956, Flaviano Moreto died intestate. In 1961, the
plaintiffs demanded on the defendants to vacate the premises
where they had their house and piggery on the ground that
Flaviano Moreto had no right to sell the lot which he sold to
Geminiano Pamplona as the same belongs to the conjugal
partnership of Flaviano and his deceased wife and the latter was
already dead when the sale was executed without the consent of
the plaintiffs who are the heirs of Monica. The spouses Geminiano
Pamplona and Apolonia Onte refused to vacate the premises
occupied by them and hence, this suit was instituted by the heirs of
Monica Maniega seeking for the declaration of the nullity of the
deed of sale of July 30, 1952 above-mentioned as regards one-half
of the property subject matter of said deed; to declare the plaintiffs
as the rightful owners of the other half of said lot; to allow the
plaintiffs to redeem the one-half portion thereof sold to the
defendants. "After payment of the other half of the purchase
price"; to order the defendants to vacate the portions occupied by
them; to order the defendants to pay actual and moral damages
and attorney's fees to the plaintiffs; to order the defendants to pay
plaintiffs P120.00 a year from August 1958 until they have vacated
the premises occupied by them for the use and occupancy of the
same.
The defendants claim that the sale made by Flaviano Moreto in
their favor is valid as the lot sold is registered in the name of
Flaviano Moreto and they are purchasers believing in good faith
that the vendor was the sole owner of the lot sold.
After a relocation of lots 1495, 1496 and 4545 made by agreement
of the parties, it was found out that there was mutual error
between Flaviano Moreto and the defendants in the execution of
the deed of sale because while the said deed recited that the lot
sold is lot No. 1495, the real intention of the parties is that it was a
portion consisting of 781 square meters of lot No. 1496 which was
the subject matter of their sale transaction.
After trial, the lower court rendered judgment, the dispositive part
thereof being as follows:
WHEREFORE, judgment is hereby rendered for the plaintiffs
declaring the deed of absolute sale dated July 30, 1952 pertaining
to the eastern portion of Lot 1496 covering an area of 781 square
meters null and void as regards the 390.5 square meters of which
plaintiffs are hereby declared the rightful owners and entitled to its
possession.
The sale is ordered valid with respect to the eastern one-half (1/2)
of 1781 square meters of Lot 1496 measuring 390.5 square meters
of which defendants are declared lawful owners and entitled to its
possession.
After proper survey segregating the eastern one-half portion with
an area of 390.5 square meters of Lot 1496, the defendants shall
be entitled to a certificate of title covering said portion and Transfer
Certificate of Title No. 9843 of the office of the Register of Deeds of
Laguna shall be cancelled accordingly and new titles issued to the
plaintiffs and to the defendants covering their respective portions.
Transfer Certificate of Title No. 5671 of the office of the Register of
Deeds of Laguna covering Lot No. 1495 and registered in the name
of Cornelio Pamplona, married to Apolonia Onte, is by virtue of this
decision ordered cancelled. The defendants are ordered to
surrender to the office of the Register of Deeds of Laguna the
owner's duplicate of Transfer Certificate of Title No. 5671 within
thirty (30) days after this decision shall have become final for
cancellation in accordance with this decision.
Let copy of this decision be furnished the Register of Deeds for the
province of Laguna for his information and guidance.
With costs against the defendants. 2
The defendants-appellants, not being satisfied with said judgment,
appealed to the Court of Appeals, which affirmed the judgment,
hence they now come to this Court.
The fundamental and crucial issue in the case at bar is whether
under the facts and circumstances duly established by the
evidence, petitioners are entitled to the full ownership of the
property in litigation, or only one-half of the same.
There is no question that when the petitioners purchased the
property on July 30, 1952 from Flaviano Moreto for the price of
P900.00, his wife Monica Maniega had already been dead six years
before, Monica having died on May 6, 1946. Hence, the conjugal
partnership of the spouses Flaviano Moreto and Monica Maniega
had already been dissolved. (Article 175, (1) New Civil Code;
Article 1417, Old Civil Code). The records show that the conjugal
estate had not been inventoried, liquidated, settled and divided by
the heirs thereto in accordance with law. The necessary
proceedings for the liquidation of the conjugal partnership were not
instituted by the heirs either in the testate or intestate proceedings
of the deceased spouse pursuant to Act 3176 amending Section
685 of Act 190. Neither was there an extra-judicial partition
between the surviving spouse and the heirs of the deceased spouse
nor was an ordinary action for partition brought for the purpose.
Accordingly, the estate became the property of a community
between the surviving husband, Flaviano Moreto, and his children
with the deceased Monica Maniega in the concept of a co-
ownership.
The community property of the marriage, at the dissolution of this
bond by the death of one of the spouses, ceases to belong to the
legal partnership and becomes the property of a community, by
operation of law, between the surviving spouse and the heirs of the
deceased spouse, or the exclusive property of the widower or the
widow, it he or she be the heir of the deceased spouse. Every co-
owner shall have full ownership of his part and in the fruits and
benefits derived therefrom, and he therefore may alienate, assign
or mortgage it, and even substitute another person in its
enjoyment, unless personal rights are in question. (Marigsa vs.
Macabuntoc, 17 Phil. 107)
In Borja vs. Addision, 44 Phil. 895, 906, the Supreme Court said
that "(t)here is no reason in law why the heirs of the deceased wife
may not form a partnership with the surviving husband for the
management and control of the community property of the
marriage and conceivably such a partnership, or rather community
of property, between the heirs and the surviving husband might be
formed without a written agreement." In Prades vs. Tecson, 49
Phil. 230, the Supreme Court held that "(a)lthough, when the wife
dies, the surviving husband, as administrator of the community
property, has authority to sell the property with•ut the
concurrence of the children of the marriage, nevertheless this
power can be waived in favor of the children, with the result of
bringing about a conventional ownership in common between the
father and children as to such property; and any one purchasing
with knowledge of the changed status of the property will acquire
only the undivided interest of those members of the family who
join in the act of conveyance.
It is also not disputed that immediately after the execution of the
sale in 1952, the vendees constructed their house on the eastern
part of Lot 1496 which the vendor pointed out to them as the area
sold, and two weeks thereafter, Rafael who is a son of the vendees,
also built his house within Lot 1496. Subsequently, a cemented
piggery coral was constructed by the vendees at the back of their
house about one and one-half meters from the eastern boundary of
Lot 1496. Both vendor and vendees believed all the time that the
area of 781 sq. meters subject of the sale was Lot No. 1495 which
according to its title (T.C.T. No. 14570) contains an area of 781 sq.
meters so that the deed of sale between the parties Identified and
described the land sold as Lot 1495. But actually, as verified later
by a surveyor upon agreement of the parties during the
proceedings of the case below, the area sold was within Lot 1496.
Again, there is no dispute that the houses of the spouses Cornelio
Pamplona and Apolonia Onte as well as that of their son Rafael
Pamplona, including the concrete piggery coral adjacent thereto,
stood on the land from 1952 up to the filing of the complaint by the
private respondents on July 25, 1961, or a period of over nine (9)
years. And during said period, the private respondents who are the
heirs of Monica Maniega as well as of Flaviano Moreto who also
died intestate on August 12, 1956, lived as neighbors to the
petitioner-vendees, yet lifted no finger to question the occupation,
possession and ownership of the land purchased by the Pamplonas,
so that We are persuaded and convinced to rule that private
respondents are in estoppel by laches to claim half of the property,
in dispute as null and void. Estoppel by laches is a rule of equity
which bars a claimant from presenting his claim when, by reason of
abandonment and negligence, he allowed a long time to elapse
without presenting the same. (International Banking Corporation
vs. Yared, 59 Phil. 92)
We have ruled that at the time of the sale in 1952, the conjugal
partnership was already dissolved six years before and therefore,
the estate became a co-ownership between Flaviano Moreto, the
surviving husband, and the heirs of his deceased wife, Monica
Maniega. Article 493 of the New Civil Code is applicable and it
provides a follows:
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
involve. 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.
We agree with the petitioner that there was a partial partition of
the co-ownership when at the time of the sale Flaviano Moreto
pointed out the area and location of the 781 sq. meters sold by him
to the petitioners-vendees on which the latter built their house and
also that whereon Rafael, the son of petitioners likewise erected his
house and an adjacent coral for piggery.
Petitioners point to the fact that spouses Flaviano Moreto and
Monica Maniega owned three parcels of land denominated as Lot
1495 having an area of 781 sq. meters, Lot 1496 with an area of
1,021 sq. meters, and Lot 4545 with an area of 544 sq. meters.
The three lots have a total area of 2,346 sq. meters. These three
parcels of lots are contiguous with one another as each is bounded
on one side by the other, thus: Lot 4545 is bounded on the
northeast by Lot 1495 and on the southeast by Lot 1496. Lot 1495
is bounded on the west by Lot 4545. Lot 1496 is bounded on the
west by Lot 4545. It is therefore, clear that the three lots
constitute one big land. They are not separate properties located in
different places but they abut each other. This is not disputed by
private respondents. Hence, at the time of the sale, the co-
ownership constituted or covered these three lots adjacent to each
other. And since Flaviano Moreto was entitled to one-half pro-
indiviso of the entire land area or 1,173 sq. meters as his share, he
had a perfect legal and lawful right to dispose of 781 sq. meters of
his share to the Pamplona spouses. Indeed, there was still a
remainder of some 392 sq. meters belonging to him at the time of
the sale.
We reject respondent Court's ruling that the sale was valid as to
one-half and invalid as to the other half for the very simple reason
that Flaviano Moreto, the vendor, had the legal right to more than
781 sq. meters of the communal estate, a title which he could
dispose, alienate in favor of the vendees-petitioners. The title may
be pro-indiviso or inchoate but the moment the co-owner as
vendor pointed out its location and even indicated the boundaries
over which the fences were to be erectd without objection, protest
or complaint by the other co-owners, on the contrary they
acquiesced and tolerated such alienation, occupation and
possession, We rule that a factual partition or termination of the
co-ownership, although partial, was created, and barred not only
the vendor, Flaviano Moreto, but also his heirs, the private
respondents herein from asserting as against the vendees-
petitioners any right or title in derogation of the deed of sale
executed by said vendor Flaiano Moreto.
Equity commands that the private respondents, the successors of
both the deceased spouses, Flaviano Moreto and Monica Maniega
be not allowed to impugn the sale executed by Flaviano Moreto
who indisputably received the consideration of P900.00 and which
he, including his children, benefitted from the same. Moreover, as
the heirs of both Monica Maniega and Flaviano Moreto, private
respondents are duty-bound to comply with the provisions of
Articles 1458 and 1495, Civil Code, which is the obligation of the
vendor of the property of delivering and transfering the ownership
of the whole property sold, which is transmitted on his death to his
heirs, the herein private respondents. The articles cited provide,
thus:
Art. 1458. By the contract of sale one of the contracting parties
obligates himself to transfer the ownership of and to deliver a
determinate thing, and the other part to pay therefore a price
certain in money or its equivalent.
A contract of sale may be absolute or conditionial.
Art. 1495. The vendor is bound to transfer the ownership of and
deliver, as well as warrant the thing which is the object of the sale.
Under Article 776, New Civil Code, the inheritance which private
respondents received from their deceased parents and/or
predecessors-in-interest included all the property rights and
obligations which were not extinguished by their parents' death.
And under Art. 1311, paragraph 1, New Civil Code, the contract of
sale executed by the deceased Flaviano Moreto took effect between
the parties, their assigns and heirs, who are the private
respondents herein. Accordingly, to the private respondents is
transmitted the obligation to deliver in full ownership the whole
area of 781 sq. meters to the petitioners (which was the original
obligation of their predecessor Flaviano Moreto) and not only one-
half thereof. Private respondents must comply with said obligation.
The records reveal that the area of 781 sq. meters sold to and
occupied by petitioners for more than 9 years already as of the
filing of the complaint in 1961 had been re-surveyed by private
land surveyor Daniel Aranas. Petitioners are entitled to a
segregation of the area from Transfer Certificate of Title No. T-
9843 covering Lot 1496 and they are also entitled to the issuance
of a new Transfer Certificate of Title in their name based on the
relocation survey.
WHEREFORE, IN VIEW OF THE FOREGOING, the judgment
appealed from is hereby AFFIRMED with modification in the sense
that the sale made and executed by Flaviano Moreto in favor of the
petitioners-vendees is hereby declared legal and valid in its
entirely.
Petitioners are hereby declared owners in full ownership of the 781
sq. meters at the eastern portion of Lot 1496 now occupied by said
petitioners and whereon their houses and piggery coral stand.
The Register of Deeds of Laguna is hereby ordered to segregate
the area of 781 sq. meters from Certificate of Title No. 9843 and to
issue a new Transfer Certificate of Title to the petitioners covering
the segregated area of 781 sq. meters.
No costs.
G.R. No. L-25014 October 17, 1973
DOLORES LAHORA VDA. DE CASTRO, ARSENIO DE CASTRO,
JR., WILFREDO DE CASTRO, IRINEO DE CASTRO and
VIRGINIA DE CASTRO ALEJANDRO, (in substitution for the
deceased defendant-appellant ARSENIO DE CASTRO,
SR.)., petitioners,
vs.
GREGORIO ATIENZA, respondent.
Arsenio de Castro, Jr. and F.T. Papa for petitioners.
Dakila Castro and Z.D. de Mesa for respondent.
TEEHANKEE, J.:
The Court rejects petitioners' appeal as without merit and affirms
the judgment of the appellate court. Petitioners' predecessor-in-
interest as co-owner of an undivided one-half interest in the
fishpond could validly lease his interest to a third party, respondent
Atienza, independently of his co-owner (although said co-owner
had also leased his other undivided one-half interest to the same
third party) and could likewise by mutual agreement independently
cancel his lease agreement with said third party. Said predecessor-
in-interest (and petitioners who have substituted him as his heirs)
therefore stands liable on his express undertaking to refund the
advance rental paid to him by the lessee on the cancelled lease and
cannot invoke the non-cancellation of the co-owner's lease to elude
such liability.
The Court of Appeals, in its decision affirming in toto the judgment
of the Manila court of first instance ordering therein defendant-
appellant Arsenio de Castro, Sr. (now deceased and substituted by
above-named petitioners as his heirs) "to return to the plaintiff
(respondent) Gregorio Atienza the sum P2,500.00 with legal
interest from the date of the filing of complaint until fully paid plus
the sum of P250.00 as attorney's fees and the costs of the suit",
found the following facts to undisputed:
On January 24, 1956 the brothers Tomas de Castro and Arsenio de
Castro, Sr. leased to plaintiff a fishpond containing an area of 26
hectares situated in Polo, Bulacan and forming part of a bigger
parcel of land covered by Transfer Certificate of Title No. 196450 of
the registry of the property of Bulacan. The lessors are co-owners
in equal shares of the leased property.
According to the contract of lease (Exh. 1) the term of the lease
was for five years from January 24, 1956 at a rental of P5,000 a
year, the first year's rental to be paid on February 1, 1956, the
second on February 1, 1957 and the rental for the last three years
on February 1, 1958. The first year's rental was paid on time.
In the meantime, Tomas de Castro died.
In the month of November, 1956, plaintiff as lessee and defendant
Arsenio de Castro, Sr. as one of the lessors, agreed to set aside
and annul the contract of lease and for this purpose an agreement
(Exh. A) was signed by them, Exhibit A as signed by plaintiff and
defendant shows that Felisa Cruz Vda. de Castro, widow of Tomas
de Castro, was intended to be made a party thereof in her capacity
as representative of the heirs of Tomas Castro.
Condition No. 2 of Exhibit A reads as follows:
"2. Na sa pamamagitan nito ay pinawawalang kabuluhan namin
ang nasabing kasulatan at nagkasundo kami na ang bawat isa sa
amin ni Arsenio de Castro at Felisa Cruz Vda. de Castro ay isauli
kay GREGORIO ATIENZA ang tig P2,500.00 o kabuuang halagang
P5,000.00 na paunang naibigay nito alinsunod sa nasabing
kasulatan; na ang nasabing tig P2,500.00 ay isasauli ng bawat isa
sa amin sa o bago dumating ang Dec. 30, 1956."
Felisa Cruz Vda. de Castro refused to sign Exhibit A. Defendant did
not pay the P2,500.00 which under the above-quoted paragraph of
Exhibit A, he should have paid on December 30, 1956. Demand for
payment was made by plaintiff's counsel on January 7, 1957 but to
no avail, hence the present action.
On the conflicting contentions between the parties as to who
between them would attend to securing the signature of Mrs. Felisa
Cruz Vda. de Castro (widow of Tomas de Castro) to the agreement
of cancellation of the lease with respondent Atienza, the appellate
court found that "the testimony of the defendant (Arsenio de
Castro, Sr.) ... supports the contention of the plaintiff (Atienza)
"that it was the defendant Arsenio who was interested and
undertook to do so, citing Arsenio's own declaration that "I agreed
to sign this document (referring to the cancellation) because of my
desire to cancel our original agreement" and that his purpose in
obtaining the cancellation of said lease agreement with plaintiff
Atienza was "(B)ecause I had the intention of having said fishpond
leased to other persons and I cannot lease it to third parties unless
I can secure the signature of Felisa Vda. de Castro."
The appellate court thus held in effect that as Arsenio "was the one
interested in cancelling the lease (Exh. 1), it stands to reason that
he most probably undertook to obtain the signature of Mrs. Castro
[widow and successor-in-interest of his brother Tomas]" and that
he could not invoke his own failure to obtain such signature to
elude his own undertaking and liability to refund respondent
(plaintiff) his share of the rental paid in advance by respondent on
the cancelled lease in the sum of P2,500.00.
The appellate court furthermore correctly held that the consent or
concurrence of Felisa Vda. de Castro (as co-owner in succession of
Tomas) was not an essential condition to the validity and effectivity
of the agreement of cancellation of the lease (Exhibit A) as
between Arsenio and respondent-lessee, contrary to petitioners'
claim, holding that "(S)ince there is no specific provision in Exhibit
A supporting defendant's claim, we are not prepared to supply such
condition unless the same can be deduced from other evidence or
unless the terms of Exhibit A cannot be performed by plaintiff and
defendant without Mrs. Castro being bound as a party thereto."
The issue is simply reduced to whether Arsenio as co-owner of the
fishpond owned pro-indiviso by him with his brother Tomas
(succeeded by Felisa Vda. de Castro) could validly lease his half-
interest to a third party (respondent Atienza) independently of his
co-owner, and in case his co-owner also leased his other half
interest to the same third party, whether Arsenio could cancel his
own lease agreement with said third party?
The appellate court correctly resolved the issue thus: "Our view of
the contract of lease Exhibit 1 is that each of the Castro brothers,
leased his undivided one-half interest in the fishpond they owned in
common to the plaintiff. Could one of them have validly leased his
interest without the other co-owner leasing his own? The answer to
this is given by appellant in his own brief (p. 14) when he said that
it would result in a partnership between the lessee and the owner
of the other undivided half. If the lease could be entered into
partially by one of the co-owners, insofar as his interest is
concerned, then the lease, Exhibit 1, can also be cancelled partially
as between plaintiff and defendant. Therefore, we conclude that
the consent of Mrs. Felisa Cruz Vda. de Castro is not essential for
the cancellation of the lease of defendant's one-half undivided
share in the fishpond to plaintiff."
The appellate court's judgment is fully supported by the Civil Code
provisions on the rights and prerogatives of co-owners, and
specifically by Article 493 which expressly provides that
Art. 493. Each co-owner shall have the full ownership of his
part and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may
be alloted to him in the division upon the termination of the co-
ownership. *
G.R. No. L-24419 July 15, 1968
LEONORA ESTOQUE, plaintiff-appellant,
vs.
ELENA M. PAJIMULA, assisted by her husband CIRIACO
PAJIMULA, defendants-appellees.
Jesus P. Mapanao for plaintiff-appellant.
Vergara and Dayot for defendants-appellees.
REYES, J.B.L., J.:
Direct appeal from an order of the Court of First Instance of La
Union, in its Civil Case No. 1990, granting a motion to dismiss the
complaint for legal redemption by a co-owner (retracto legal de
comuneros) on account of failure to state a cause of action.
The basic facts and issues are stated in the decision appealed from,
as follows:
Plaintiff based her complaint for legal redemption on a claim that
she is a co-owner of Lot No. 802, for having purchased 1/3 portion
thereof, containing an area of 640 square meters as evidenced by
a deed of sale, Annex "A", which was executed on October 28,
1951 by Crispina Perez de Aquitania, one of the co-owners, in her
favor.
On the other hand, the defendant, who on December 30, 1959
acquired the other 2/3 portion of Lot No. 802 from Crispina
Aquitania and her children, claimed that the plaintiff bought the
1/3 southeastern portion, which is definitely identified and
segregated, hence there existed no co-ownership at the time and
after said plaintiff bought the aforesaid portion, upon which right of
legal redemption can be exercised or taken advantage of.
From the complaint, it would appear that Lot No. 802 of the
Cadastral survey of Rosario, covered by original certificate of title
No. RO-2720 (N.A.) was originally owned by the late spouses,
Rosendo Perez and Fortunata Bernal, who were survived by her
children, namely, Crispina Perez, Lorenzo Perez and Ricardo Perez.
Ricardo Perez is also now dead. On October 28, 1951, Crispina P.
Vda. de Aquitania sold her right and participation in Lot No. 802
consisting of 1/3 portion with an area of 640 square meters to
Leonora Estoque (Annex A of the complaint). On October 29, 1951,
Lorenzo Perez, Crispina Perez and Emilia P. Posadas, widow of her
deceased husband, Ricardo Perez for herself and in behalf of her
minor children, Gumersindo, Raquel, Emilio and Ricardo, Jr.,
executed a deed of extrajudicial settlement wherein Lorenzo Perez,
Emilia P. Posadas and her minor children assigned all their right,
interest and participation in Lot No. 802 to Crispina Perez (Annex B
of the complaint). On December 30, 1959, Crispina Perez and her
children Rosita Aquitania Belmonte, Remedios Aquitania Misa,
Manuel Aquitania, Sergio Aquitania and Aurora Aquitania sold to
Elena Pajimula, the remaining 2/3 western portion of Lot No. 802
with an area of 958 square meters (Annex C of the complaint).
The action of the plaintiff is premised on the claim of co-ownership.
From the deed of sale executed in favor of the plaintiff, it can be
seen that the 1/3 portion sold to plaintiff is definitely identified as
the 1/3 portion located on the southeastern part of Lot No. 802 and
specifically bounded on the north by De Guzman Street, on the
east by Posadas Street, on the south by Perez Street, and on the
west by remaining portion of the same lot, which contained an area
of 640 square meters. And in the deed of sale executed by Crispina
Perez and her children in favor of defendant Elena Pajimula over
the remaining 2/3 portion of Lot No. 802, said portion is identified
as the western portion of Lot No. 802 which is bounded on the
north by De Guzman Street, on the east by properties of Leonarda
Estoque, on the south by the national road and on the west by Lots
Nos. 799 and 801, containing an area of 598 square meters.
The appellant's stand is that the deed in her favor was inoperative
to convey the southeastern third of Lot 802 of the Rosario Cadastre
notwithstanding the description in the deed itself, for the reason
that the vendor, being a mere co-owner, had no right to sell any
definite portion of the land held in common but could only transmit
her undivided share, since the specific portion corresponding to the
selling co-owner is not known until partition takes place (Lopez vs.
Ilustre, 5 Phil. 567; Ramirez vs. Bautista, 14 Phil. 528). From this
premise, the appellant argues that the sale in her favor, although
describing a definite area, should be construed as having conveyed
only the undivided 1/3 interest in Lot 802 owned at the time by the
vendor, Crispina Perez Vda. de Aquitania. Wherefore, when the
next day said vendor acquired the 2/3 interest of her two other co-
owners, Lot 802 became the common property of appellant and
Crispina Perez. Therefore, appellant argues, when Crispina sold the
rest of the property to appellee Pajimula spouses, the former was
selling an undivided 2/3 that appellant, as co-owner, was entitled
to redeem, pursuant to Article 1620 of the New Civil Code.
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.
The lower court, upon motion of defendant, dismissed the
complaint, holding that the deeds of sale show that the lot acquired
by plaintiff Estoque was different from that of the defendants
Pajimula; hence they never became co-owners, and the alleged
right of legal redemption was not proper. Estoque appealed.
We find no error in the order of dismissal, for the facts pleaded
negate the claim that appellant Estoque ever became a co-owner of
appellees Pajimula.
(1) The deed of sale to Estoque (Annex A of the complaint) clearly
specifies the object sold as the southeastern third portion of Lot
802 of the Rosario Cadastre, with an area of 840 square meters,
more or less. Granting that the seller, Crispina Perez Vda. de
Aquitania could not have sold this particular portion of the lot
owned in common by her and her two brothers, Lorenzo and
Ricardo Perez, by no means does it follow that she intended to sell
to appellant Estoque her 1/3 undivided interest in the lot
forementioned. There is nothing in the deed of sale to justify such
inference. That the seller could have validly sold her one-third
undivided interest to appellant is no proof that she did choose to
sell the same. Ab posse ad actu non valet illatio.
(2) While on the date of the sale to Estoque (Annex A) said
contract may have been ineffective, for lack of power in the vendor
to sell the specific portion described in the deed, the transaction
was validated and became fully effective when the next day
(October 29, 1951) the vendor, Crispina Perez, acquired the entire
interest of her remaining co-owners (Annex B) and thereby became
the sole owner of Lot No. 802 of the Rosario Cadastral survey
(Llacer vs. Muñoz, 12 Phil. 328). Article 1434 of the Civil Code of
the Philippines clearly prescribes that — .
When a person who is not the owner of a thing sells or alienates
and delivers it, and later the seller or grantor acquires title thereto,
such title passes by operation of law to the buyer or grantee."
Pursuant to this rule, appellant Estoque became the actual owner
of the southeastern third of lot 802 on October 29, 1951.
Wherefore, she never acquired an undivided interest in lot 802.
And when eight years later Crispina Perez sold to the appellees
Pajimula the western two-thirds of the same lot, appellant did not
acquire a right to redeem the property thus sold, since their
respective portions were distinct and separate.
G.R. No. L-27933 December 24, 1968
DIVERSIFIED CREDIT CORPORATION, plaintiff-appellee,
vs.
FELIPE ROSADO and LUZ JAYME ROSADO, defendants-
appellants.
Montalvo and Bernabe for plaintiff-appellee.
Pedro D. Delfin for defendants-appellants.
REYES, J.B.L.:
This appeal from a decision of the Court of First Instance of
Bacolod City, Negros Occidental (Civ. Case No. 7516 of that Court)
was certified to us by the Court of Appeals (Second Division)
because the same involves no questions of fact.
The case had its origin in the Municipal Court of Bacolod City, when
the Diversified Credit Corporation filed an action to compel the
spouses Felipe Rosado and Luz Jayme Rosado to vacate and
restore possession of a parcel of land in the City of Bacolod (Lot
62-B of Subdivision plan LRC-Psd-33823) that forms part of Lot No.
62 of the Bacolod Cadastre, and is covered by Transfer Certificate
of Title No. 27083 in the name of plaintiff. After answer, claiming
that the lot was defendants' conjugal property, the Municipal Court
ordered defendants to surrender and vacate the land in litigation;
to pay P100.00 a month from the filing of the complaint up to the
actual vacating of the premises; to pay P500.00 attorneys' fees
and costs. Upon appeal to the Court of First Instance, the case was
submitted on the following stipulation of facts (Rec. on App., pp.
59-60):
1. That Lot No. 62-B of Bacolod Cadastre belong to the thirteen co-
owners, including the wife of the defendant herein, who owns
1/13th part pro-indiviso;
2. That on May 11, 1964, Luz Jayme Rosado, wife of the defendant
Felipe Rosado, signed a Deed of Sale together with the co-owners
of the property to the plaintiff as shown by Exh. "A" for the
plaintiff;
3. That on the lot in question the defendant Felipe Rosado had built
a house sometime in 1957 without the whole property having been
previously partitioned among the thirteen (13) co-owners;
4. That the title of the property has already been transferred to the
plaintiff upon registration of the Deed of Sale in June, 1964, with
the Office of the Register of Deeds;
5. That demand was made by the plaintiff upon the defendant
Felipe Rosado and his wife Luz Jayme Rosado on October 19, 1964,
but until now the defendant Felipe Rosado has refused to vacate
the premises or to remove his house thereon as shown by Exh. "B"
for the plaintiff, on the grounds as he alleged in his answer that he
had built on the lot in question a conjugal house worth P8,000.00
which necessarily makes the lot on which it stands subject to
Article 158 of the Civil Code and on the point of view of equity that
the wife of the defendant Felipe Rosado received an aliquot share
of P2,400.00 only from the share and if the house were demolished
the defendant would suffer damage in the amount of P8,000.00;
6. That the portion of the lot on which the house stands, would
earn a monthly rental of P50.00;
7. That Felipe Rosado, husband of Luz Jayme, did not give his
conformity to the Deed of Sale, Exh. "A".
8. That on October 31, 1964, the defendant Felipe Rosado
requested the plaintiff in the letter, Exh. "C" for the plaintiff, for a
period of six (6) months within which to vacate the premises.
9. That the letter was not answered by the plaintiff and they did
not accept the offer, and on November 25, 1964, they filed a
complaint before the Municipal Court which proves that plaintiff
neglected the offer;
The Court of First Instance in its decision rejected the claim of
ownership advanced by Rosado, based upon the construction of a
house on the disputed lot by the conjugal partnership of the
Rosado spouses, which allegedly converted the land into conjugal
property under Article 158, paragraph 2 of the present Civil Code
of the Philippines; further held that defendants were in estoppel to
claim title in view of the letter Exhibit C requesting for six (6)
months within which to vacate the premises, and affirmed the
decision of the Inferior Court. Defendant Felipe Rosado resorted to
the Court of Appeals, and his appeal (CA-G.R. No. 37398-R) is the
one now before us. He assigns four alleged errors:
(a) The lower court erred in not holding that Exhibit "A" is null and
void, since upon the construction of the conjugal dwelling thereon,
the conjugal partnership of the defendant-appellant Felipe Rosado
and Luz Jayme became the owner of the share of Luz Jayme in Lot
No. 62-B, Bacolod Cadastre;
(b) The trial court erred in ordering the defendant-appellant to
vacate Lot No. 62-B and in not holding that Exhibit "A" is null and
void because as the legal usufructuary of the share of Luz Jayme
Rosado in Lot 62-B, Bacolod Cadastre, the conjugal partnership,
managed and administered by the defendant-appellant Felipe
Rosado can not be deprived of its usufructuary rights by any
contract between Luz Jayme and the plaintiff-appellee;
(c) The trial court erred in not holding that the defendant-appellant
should be reimbursed the value of the conjugal house constructed
on Lot 62-B; and
(d) The lower court erred in ordering the defendant-appellant to
pay attorneys' fees in the amount of five hundred (P500.00) pesos.
It can be seen that the key question is whether by the construction
of a house on the lot owned in common by the Jaymes, and sold by
them to the appellant corporation, the land in question or a 1/13th
part of it became conjugal property.
Appellant, husband of vendor Luz Jayme, claims the affirmative
invoking the second paragraph of Article 158 of the Civil Code of
the Philippines, prescribing that:
ART. 158. Improvements, whether for utility or adornment, made
on the separate property of the spouses through advancements
from the partnership or through the industry of either the husband
or the wife, belong to the conjugal partnership.
Buildings constructed, at the expense of the partnership, during
the marriage on land belonging to one of the spouses, also pertain
to the partnership, but the value of the land shall be reimbursed to
the spouse who owns the same.
Rosado further contends that as the building of the house at the
expense of the conjugal partnership converted the 1/13 undivided
share on his wife in Lot 62-B into property of the community, the
deed of sale of May 11, 1964 in favor of the appellee corporation
was void in so far as said 1/13 share is concerned, because his
wife, Luz Jayme, had ceased to own such share from and after the
building of the house; and Rosado, as manager of the conjugal
partnership, had not participated in the sale, nor subsequently
ratified the same.
We find appellant's thesis legally untenable. For it is a basic
principle in the law of co-ownership, both under the present Civil
Code as in the Code of 1889, that no individual co-owner can claim
title to any definite portion of the land or thing owned in common
until the partition thereof. Prior to that time, all that the co-owner
has is an ideal, or abstract, quota or proportionate share in the
entire thing owned in common by all the co-owners. The principle
is emphasized by the rulings of this Court. In Lopez vs. Ilustre, 5
Phil. 567, it was held that while a co-owner has the right to freely
sell and dispose of his undivided interest, he has no right to sell a
divided part of the real estate owned in common. "If he is the
owner of an undivided half of a tract of land, he has the right to
sell and convey an undivided half, but he has no right to divide the
lot into two parts, and convey the whole of one part by metes and
bounds." The doctrine was reiterated in Mercado vs. Liwanag, L-
14429, June 20, 1962, holding that a co-owner may not convey a
physical portion of the land owned in common. And in Santos vs.
Buenconsejo, L-20136, June 23, 1965, it was ruled that a co-owner
may not even adjudicate to himself any determinate portion of land
owned in common.
Since the share of the wife, Luz Jayme, was at no time physically
determined, it cannot be validly claimed that the house constructed
by her husband was built on land belonging to her, and Article 158
of the Civil Code can not apply. Certainly, on her 1/13 ideal or
abstract undivided share, no house could be erected. Necessarily,
the claim of conversion of the wife's share from paraphernal to
conjugal in character as a result of the construction must be
rejected for lack of factual or legal basis.
It is the logical consequence of the foregoing ruling that the lower
court did not err in holding that the appellant was bound to vacate
the land without reimbursement, since he knew that the land
occupied by the house did not belong exclusively to his wife, but to
the other owners as well, and there is no proof on record that the
house occupied only 1/13 of the total area. The construction was
not done in good faith.
WHEREFORE, the judgment of the Court of First Instance is
affirmed. Costs against appellant Felipe Rosado.
G.R. No. L-34404 June 25, 1980
PHILIPPINE NATIONAL BANK, petitioner,
vs.
THE HON. COURT OF APPEALS (SPECIAL FIRST DIVISION),
PEDRO BITANGA, FERNANDO BITANGA, GREGORIO
BITANGA, GUILLERMO BITANGA, CLARITA BITANGA
together with her husband AGRIPINO L. RABAGO and
MELITONA LAGPACAN, assisted by her husband JORGE
MALACAS, respondents.
GUERRERO, J.:
This is a petition for review of the decision of the Court of Appeals,
promulgated on September 30, 1971 in CA-G.R. No. 29868-R
entitled "Pedro Bitanga, et al., Plaintiffs-Appellees, versus
Philippine National Bank, et al., Defendants-Appellants, Melitona
Lagpacan, assisted by her husband, Jorge Malacas, Intervenors
Appellees which decision 1 affirmed with certain modifications the
judgment of the Court of First Instance of Ilocos Norte in favor of
plaintiffs-appellants, now the herein respondents.
This case was commenced on May 17, 1954 when herein
respondents Pedro, Fernando, Gregorio, Guillermo and Clarita, all
surnamed Bitanga, filed a complaint before the Court of First
Instance of Ilocos Norte against the Philippine National Bank, the
Register of Deeds of Ilocos Norte and Felizardo Reyes, for
reconveyance of real property and damages, with a prayer for the
issuance of an ex-parte writ of pre injunction restraining and
enjoining the PNB and Felizardo Reyes from consummating the sale
of the property in question and prohibiting the Register of Deeds
from registering the sale in favor of Felizardo Reyes. As prayed for,
the writ of preliminary injunction was issued. All three of the
defendants named in the complaint filed their respective Answers.
During the pendency of the case, herein respondent-spouses,
Melitona Lagpacan and Jorge Maracas, filed a Motion to admit their
complaint in intervention, alleging that they had a legal interest in
the subject matter of the case, and the same was granted.
The factual background of this case as recited in the decision of
respondent court under review is as follows:
It is not disputed that the property in question originally belonged
to the spouses Iñigo Bitanga and Rosa Ver as their conjugal
property. At the cadastral proceedings during which the said
property was submitted for adjudication, the Cadastral Court
rendered a decision dated December 27, 1934, by virtue of which a
decree of registration of the said lot bearing date of September 14,
1937 was issued. Thereafter, a corresponding title in the name of
the spouses Iñigo Bitanga and Rosa Ver was likewise issued and in
the Registry Books of the Register of Deeds of Ilocos Norte on
December 15, 1937 (Exhibit "A").
Before the issuance of the said original certificate of tale (Exhibit
"A"), however, death came to Iñigo Bitanga on September 25,
1935, and was survived by his wife, Rosa Ver, and his children, the
plaintiffs herein. A little over a year from the death of her husband,
or on October 20, 1936, to be exact Rosa Ver mortgaged the entire
property covered by Exhibit "A" (also known as Exhibit 1-
Lagpacan) in favor of the Philippine National Bank for the with of
FIVE HUNDRED PESOS (P500.00) as shown in Exhibit 1-Lagpacan.
The mortgage document was registered in the day book of the
Register of Deeds of Ilocos Norte on November 12, 1936; this said
mortgage lien was, however, not annotated in the day book of the
Register of Deeds, when the original certificate of title (Exhibit "A"),
was issued. Nevertheless, the power of attorney dated October 20,
1936 in favor of the mortgagee Philippine National Bank "to take
possession of, and retain the property herein mortgaged, to sell or
lease the same or any part thereof, and to do such other acts as
necessary in the performance of the power granted to the
mortgagee should the mortgagor fail or violate the term of the
mortgage" was annotated on said Exhibit "A" some five years from
October 20, 1936, i.e. on February 27, 1941, to be precise (Exhibit
"A").
In the meantime, Rosa Ver had defaulted in the fulfillment of her
obligation with the Manila Trading Company. So the said company
levied upon her share in the lot in question on December 13, 1939,
and had the attachment annotated on the title on February 14,
1940 (Exhibit "A-3"). Rosa Ver's interest in the lot in question was
afterwards sold at public auction, at which the Manila Trading
Company was the highest bidder; that was on March 19, 1940, and
the deed of sale in favor of the Manila Trading Company was
annotated on the title on May 25, 1940 (Exhibit "A-4").
On November 14, 1940, the Manila Trading Company sold its rights
over the lot in question to Santiago Sambrano, who secured the
annotation of the said sale on the title on March 20, 1941 (Exhibit
"A-5"). Thereafter, as stated, one-half of the said property passed
into the hands of the intervenors as a result of Civil Case No. 1846
(Exhibits 7, 8, 9, and 9-A).
Because Rosa Ver failed to settle her obligation with the Philippine
National Bank, the latter sold at public auction the whole lot that
the former had mortgaged to it, and in the same auction sale, the
Philippine National Bank emerged as the highest bidder (Exhibits 2,
3, 4 and 5); and, after the period of redemption had expired
without the property having been redeemed, the Philippine
National Bank consolidated its title over it. The document of
consolidation was, however, not annotated upon the owner's
duplicate certificate of title as Rosa Ver failed to surrender the
same.
So it was that on November 25, 1950, the Philippine National Bank
presented a petition before the trial court (Exhibit 14) asking, on
the one hand, that the owner's certificate of title No. 7683 (Exhibit
A), be declared null and void, and praying, on the other, that a new
certificate of title be issued in its name. Acting favorably on the
petition, the Court, in an order dated October 2, 1951 (Exhibit 19-
A), ordered the Register of Deeds of the Province of Ilocos Norte to
cancel the owner's duplicate certificate of title No. 7683 (Exhibit A),
and to issue a new owner's duplicate certificate of title in the name
of the petitioner Philippine National Bank. As issued, the new
owner's duplicate certificate of title carried the number-description
T-2701 (Exhibit B or 23).
Sometime later, that is, on May 24, 1954, the Philippine National
Bank sold the property in question to Felizardo Reyes (Exhibit 16-
A),.as a result of which a new owner's duplicate certificate of title,
No. T-3944 (Exhibit 6), was issued in the latter's name. 2
It further appears from the evidence that by virtue of the judgment
obtained by the Manila Trading and Supply Company against the
defendants Rosa Ver and Guillermo Bitanga in Civil Case No.
121519 in the Municipal Court of the City of Manila (Exhibit "2-
Lagpacan"), the property in question was sold by the Provincial
Sheriff per Certificate of Sale (Exhibit 4-Lagpacan) to the Manila
Trading and Supply Company as the highest and only bidder at the
auction sale, the latter acquiring therefor "all the rights, title,
interest and participation which the defendants Guillermo Bitanga
and Rosa Ver de Bitanga have or might have in the property. " The
sale was registered in the back of the Certificate of Title No. 7683
(Exhibit 4-A Lagpacan) under Entry No. 5100 dated May 25, 1940.
On November 16, 1960, the trial court rendered a decision in favor
of the plaintiffs and intervenors below, the Court finding and
holding that: (a) The lot in question is a conjugal partnership
property, one-half of which must go to the heirs of the late Iñigo
Bitanga, the plaintiffs herein; (b) The other half goes to Rosa Ver
as her share. The mortgage executed by her of her one-half portion
in favor of the Philippine National Bank is not an existing hen on
the said portion because it did not have a "special mention in the
decree of registration." It follows, therefore, that the acquisition of
the said portion by the Manila Trading Company in the manner
above-described was valid and legal. Consequently, the sale made
by the said Company to Santiago Sambrano over the one-half
portion must also be valid and legal. In connection with Civil Case
No. 1846 in which the intervenors were the plaintiffs and Santiago
Sambrano was the defendant, what the intervenors had attached
and sold in a public auction in which they (intervenors) were the
highest bidders was the very said portion sold by the Manila
Trading Company to Santiago Sambrano; (c) That Felizardo Reyes
is not a purchaser of a registered land for value and in good faith,
and (d) Since the issuance of Transfer Certificate of Title No. 3944
in favor of the Philippine National Bank, exhibit "B", and Owner's
Duplicate Certificate of Title No. 3944, Exhibit "16", in favor of
Felizardo Reyes were without legal basis, they are, therefore,
declared nun and void and cancelled. With costs against the
defendants. 3
On appeal by PNB and Felizardo Reyes to the Court of Appeals,
respondent Court affirmed the judgment appealed from in all
respects except letter (d) thereof which was modified to read as
follows:
(d) Since the issuance of Transfer Certificate of Title No. T2701,
Exhibit "B" in favor of the Philippine National Bank, and Transfer
Certificate of Title No. T-3944, Exhibit "16", in favor of Felizardo
Reyes, was without legal basis, they are, therefore, declared null
and void and cancelled. The Register of Deeds is hereby ordered to
issue in lieu of the foregoing transfer certificate of titles another
certificate of title in the names of the plaintiffs and intervenors as
follows:
Undivided one-half (½) share to Pedro Bitanga, married to Agripina
Purisima, Fernando Bitanga, single, Gregorio Bitanga single,
Guillermo Bitanga, single, Clarita Bitanga, married to Agripino L.
Rabago, and of legal age, Filipino citizens, and residents of Laoag,
Ilocos Norte, and the remaining undivided one-half (½) share to
the spouses Jorge Maracas and Melitona Lagpacan, both of legal
age, Filipino citizens, and residents of Burgos, Ilocos Norte, free
from incumbrance regarding the claims of the Philippine National
Bank and Felizardo Reyes, after payment of lawful fees. 4
Petitioner, not satisfied with the Decision of respondent Court of
Appeals and its Resolution denying the motion for its
reconsideration, now comes to Us and submits the following
assignment of errors:
I. The Court of Appeals erred in holding that the mortgage deed
(Exhibit 1-Bank) is valid and existing only with respect to the one-
half portion of the lot in question allegedly belonging to the
mortgagor Rosa Ver as her share in the conjugal partnership with
her husband Iñigo Bitanga.
II. The Court of Appeals erred in holding that the mortgage deed
(Exhibit 1-Bank) executed by Rosa Ver was no longer subsisting
simply because the same was not annotated on the face of original
certificate of title No. 7683 (Exhibit A).
III. The Court of Appeals erred in holding that estoppel and/or
laches has not stepped in to defeat the right of respondents
Bitanga's and Rabago over the lot in question, specifically to the
one-half portion thereof representing their undivided share of the
lot as their inheritance from their father Iñigo Bitanga.
|li720IV. The Court of Appeals erred in holding that the acquisition
of the other half portion of the lot in question by the intervenors
spouses Melitona Lagpacan and Jorge Malacas bears the earmarks
of validity and regularity.
Upon being required to comment on this petition, respondents filed
a Motion to Dismiss on the grounds that the decision of respondent
court sought to be reviewed had become final and executory on
account of the failure of Felizardo Reyes, the real party in interest,
to join the PNB in this petition, and that the issues presented are
questions of fact and not of law, hence, not proper for review by
this Court.
By Resolution of January 10, 1972, this Court denied the petition
for lack of merit.
On January 25, 1972, the PNB moved to reconsider the denial
contending that at least the validity of the mortgage deed as to the
share of herein respondent-heirs should be upheld because of their
acquiescence thereto, and that the bank still has an interest over
the case for the reason that although it had already sold its
interests over the property which is the subject matter of this
litigation to Felizardo Reyes, it still stands to be affected in the
event that this case is finally decided in favor of respondents. In
other words, it is the contention of PNB that it has the personality
to bring this petition, even without Felizardo Reyes, since it still has
an interest in the final outcome of this case.
On March 2, 1972, this Court reconsidered the Resolution of
January 10, 1972 and resolved to give due course to the petition.
On the first assigned error, PNB contends that the mortgage
constituted by Rosa Ver in its favor on October 20, 1936 is valid
and covers the entire property known as Lot 9068 for the reasons
that: (1) the valid execution, existence and registration of said real
estate mortgage under Act No. 3344 are not denied; and (2) the
fact that Tax Declaration No. 120225-A then covering the
mortgaged property was issued in the exclusive name of mortgagor
Rosa Ver was likewise not denied but in fact admitted by herein
respondents and, therefore, the latter in effect admitted the
genuineness and due execution of said Tax Declaration.
There is no dispute that the document of mortgage executed by
Rosa Ver was in accordance with the formalities required by law
and that was register in the day book of the Register of Deeds of
Ilocos Norte within a month after its execution. What is here
contested is whether Rosa Ver could, as she did in fact, m the
entire Lot 9068 to petitioner PNB. In other words, the issue refers
to the intrinsic vanity of the mortgage, as distinguished from its
formal sufficiency.
The trial court found and so held that Lot 9068 belonged to the
conjugal partnership of the spouse lingo Bitanga and Rosa Ver.
Therefore, when Inigo died on September 25, 1936, his one-half
share in said lot was transmitted to his heirs (Article 777, New Civil
Code; Article 657, old Civil Code) 5 and a co-ownership was
established between them and Iñigo's surviving spouse Rosa Ver.
Hence, on October 20, 1936, a little over a year after Iñigo's death,
Rosa Ver, by herself alone, could not have validly mortgaged the
whole of Lot 9068 to PNB.
Under Article 2085, New Civil Code (Art. 1857, Old Civil Code), one
of the essential requisites to the contract of pledge and mortgage is
that the pledgor or mortgagor be the absolute owner of the thing
pledged or mortgaged. And under Article 493, New Civil Code (Art.
399, Old Civil Code), 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, shag be limited to the portion which may
be allotted to him in the division upon the termination of the co-
ownership.
Hence, We fully agree with the trial court and the respondent Court
and affirm the holding that "what the Philippine National Bank had
acquired from Rosa Ver by virtue of the mortgage was simply one-
half (½) of the entire property, for this was all she had in her
power to convey — the other half being, as it still is, the lawful
share of the plaintiffs-appellees as inheritance from their father,
Iñigo Bitanga. Nemo date quod non habet — One cannot give what
is not his. 6
Applying the provisions of the Old Civil Code 7 the law in force at
the time of Inigo Bitanga's death in 1935, Rosa Ver, as surviving
spouse, cannot take part legally in the sharing of the estate left by
her deceased husband (one-half (½) of Lot 9068) with respect to
which she only had usufructuary rights. "The usufructuary not
being an owner, cannot alienate or dispose of the objects included
in the usufruct. Thus, he cannot ... mortgage or pledge the thing
... 8
It is not disputed that Tax Declaration No. 120225-A, then covering
Lot 9068, was in the exclusive name of Rosa Ver. Such fact,
however, even if expressly admitted by herein respondent-heirs
does not and cannot alter the conjugal character of the lot in
question, much less would it affect the mortgage in favor of
petitioner PNB. We have already held in several cases that
declarations of ownership for purposes of taxation are not sufficient
evidence of title. 9 If petitioner relied upon Tax Declaration No.
120225-A in assuming that the whole property belonged
exclusively to mortgagor Rosa Ver, such erroneous assumption
should not prejudice the rights of the other co-owners, herein
respondent-heirs As far as the latter are concerned, their
respective shares were not included m the mortgage in favor of
PNB.
We, therefore, reject PNB's contention that the mortgage
constituted by Rosa Ver in its favor on October 20, 1936 is valid
and covers the entire property known as Lot 9068.
In the second assignment of error, petitioner maintains that the
respondent appellate court erred in holding that the mortgage deed
(Exhibit 1-Bank) executed by Rosa Ver was no longer subsisting
simply because the same was not annotated on the face of original
certificate of title No. 7683 (Exhibit A).
Petitioner argues that Rosa Ver, being the one who constituted the
mortgage deed and has full knowledge of the existence of the same
as well as the respondent Bitanga's and Rabago in their capacity as
heirs, subscribing witnesses and as notary public, respectively,
having also full knowledge of the existence of the mortgage
contract, have the legal duty to apprise petitioner Philippine
National Bank of the impending registration proceedings covering
the lot in question as well as to the issuance of the original
certificate of title No. 7683, in line with Section 19 of the Land
Registration Act, paragraph 2 (b) that the mortgagor shall not
make application without the consent in writing of the mortgagee,
and paragraph 3 which requires that the decree of registration in
case the mortgagor does not consent to the making of the
application shall state that registration is made subject to such
mortgage, describing it ... Petitioner further argues that no notice
whatsoever, either verbal or in writing, having been made by the
mortgagor Rosa Ver and/or the respondents Bitanga's and Rabago,
petitioner could not have taken any action to annotate its mortgage
lien on the lot in question on the face of original certificate of title
No. 7683 and, therefore, should not be blamed for its failure to
annotate the mortgage lien on the lot within a period of one (1)
year from the issuance of the decree on September 14, 1937 since
under Section 19 of Act 496, it is specifically provided that the
decree of registration in such a case shall state that the
registration is subject to such mortgage. Petitioner concludes that
if the mortgage is not so annotated on the face of original
certificate of title No. 7683 within a period of one (1) year from
September 14, 1937, then it is not a fatal defect for the
enforcement of the said mortgage lien.
Petitioner further buttresses its stand in distinguishing the
requirements of the law as embodied in Sections 19 and 21 of the
Land Registration Act from the "general notice" contemplated
under Section 31 in relation to Section 35 of the same Act in that
the notice required in Sections 19 and 21 are specific while in the
latter, the notice is merely constructive. And to cap his argument,
petitioner contends that mortgagor Rosa Ver and her heirs had
already benefitted from the loan and the mortgage transaction and
that they should not be allowed to enrich themselves at the
expense of the petitioner.
Petitioner's theory is clearly untenable and cannot be sustained for
otherwise it would do violence to the fundamental and basic
foundation of the Torrens system which is the indefeasibility of a
Torrens title under Sections 38, 39 and 47 of Act 496, which
provide as follows:
Sec 38. If the court after hearing finds that the applicant or
adverse claimant has title as stated in his application or adverse
claim and proper for registration, a decree of confirmation and
registration shall be entered. Every decree of registration shall bind
the land, and quiet title thereto, subject only to the exceptions
stated in the following section. It shall be conclusive upon and
against all persons, including the Insular Government and all the
branches thereof, whether mentioned by name in the application,
notice, or citation, or included in the general description "To all
whom it may concern." Such decree shall not be opened by reason
of the absence, infancy, or other disability of any person affected
thereby, nor by any proceeding in any court for reversing
judgments or decrees; subject, however, to the right of any person
deprived of land or any estate or interest therein by decree of
registration obtained by fraud to file in the competent Court of First
Instance a petition for review within one year after entry of the
decree provided no innocent purchaser for value has acquired an
interest. Upon the expiration of said term of one year, every decree
or certificate of title issued in accordance with this section shall be
incontrovertible. If there is any such purchaser, the decree of
registration shall not be opened, but shall remain in full force and
effect forever, subject only to the right of all hereinbefore
provided: Provided, however, That no decree or certificate of title
issued to persons not parties to the appeal shall be cancelled or
annulled. But any person aggrieved by such decree in any case
may pursue his remedy by action for damages against the
applicant or any other person for fraud in procuring the decree.
Whenever the phrase "innocent purchaser for value" or an
equivalent phrase occurs in this Act, it shall be deemed to include
an innocent lessee, mortgagee, or other encumbrances for value.
(As amended by Sec. 3, Act No. 3621; and Sec. 1, Act No. 3630).
Sec. 39. Every person receiving a certificate of title in purchase
office of a decree of registration, and every subsequent purchaser
of registered land who takes a certificate of title for value in good
faith shall hold the same five of all encumberance except those
noted on mid certificate and any of the following encumbrances
which may be sub existing, namely:
First. Liens or rights arising or existing under the laws or
Constitution of the United States or of the Philippine Islands which
the statues of the Philippine Islands cannot require to appear of
record in the registry.
Second. Taxes within two years after the same become due and
payable.
Third. Any public highway, way, private way established by law, or
any Government irrigation canal or lateral thereof, where the
certificate of title does not state that the boundaries of such
highway, way, or irrigation canal or lateral thereof, have been
determined.
But if there are easements or other rights appurtenant to a Parcel
of registered land which for any reason have failed to be
registered, such easements or rights shall remain so appurtenant
notwithstanding such failure, and shall be held to pass with the
land until cut off or extinguished by the registration of the servient
estate, or in any other manner. (As amended by Act No. 2011, and
Sec. 4, Act No. 3621).
Sec. 47. The original certificate in the registration book, any copy
thereof duly certified under the signature of the clerk, or of the
register of deeds of the province or city where the land is situated
and the seal of the court, and also the owner's duplicate certificate
shag be received as evidence in all the courts of the Philippine
Islands and shall be conclusive as to all matters contained
therein except so far as otherwise provided in this Act.
Parenthetically, it may be stated that Presidential Decree No. 1529
which amends and codifies the laws relative to registration of
property reiterates the provisions cited above under the Land
Registration Act, Act No. 496. Thus, Section 38 of Act 496 is
reiterated by Sections 29, 30, 31 and 32 of P.D. No. 1529, while
Section 39 of Act 496 is repeated under Section 44 of P.D. No.
1529. Section 47 of Act 496 is substantially repeated in paragraph
2 of Sec. 31 of the Presidential Decree.
It is well-settled in Our jurisprudence that a decree of registration,
after the lapse of the one-year period from its entry, becomes
indefeasible and conclusive. (Garcia, et al. vs. Bello, et al., L-
21355, April 30, 1965, 13 SCRA 769, 770; Baldoz vs. Papa, et al.,
L-18150, July 30, 1965, 14 SCRA 691; Ylarde, et all vs. Lichauco,
et al., L-22115, Dec. 29, 1971, 42 SCRA 641, 650). The reason for
the rule is succinctly stated in Gestosani et al., vs. Insular
Development Company, et al., L-21166, September 15, 1967, 21
SCRA 114 by the Supreme Court, speaking through Justice Dizon,
thus:
At the risk of stating what is obvious, We say that land registration
proceedings under Act 496 are in rem and that such proceedings,
as well as the title issued as a result thereof, are binding and
conclusive upon the whole world. Upon the expiration of one year
within which a petition to review the decree of registration may be
filed, said decree and the title issued pursuant thereto become
incontrovertible (Sec. 38, Act 496), and the same may no longer
be changed, altered or modified, much less set, aside (Director of
Lands vs. Gutierrez David, 50 Phil. 797). This has to be the rule,
for if even after the ownership of a property has been decreed by a
land registration court in favor of a particular person, the title
issued may still be annulled, changed, altered or modified after the
lapse of the one year period fixed by the legal provision mentioned
above, the object of the Torrens system, namely, to guarantee the
indefeasibility of the title to the property, would be defeated
(Cabanos vs. Register of Deeds, 40 Phil. 620).
We agree with the ruling of both the trial and the appellate courts
in their adherence to the doctrine laid down by Us in Snyder vs. the
Provincial Fiscal of Cebu and Jose Avila No. 17132, February 8,
1922, 42 Phil. 761, which presented a nearly Identical situation as
that in the case at bar, where the issue decided was whether or not
a lease contract entered into prior to the original registration of the
land subject of the lease and existing pending the registration
proceedings could be registered or recorded after such original
registration. Like the mortgage executed by Rosa Ver in the instant
petition, the contract of lease was entered into prior to the
issuance of the decree of registration and the Supreme Court held,
thus:
It will be noted from the provisions of section 38, above quoted,
that the decree of registration cannot be opened or altered even by
reason of the absence, infancy, or other disability of any person
affected thereby; and it can only be reviewed or modified upon the
petition, filed within one year after the entry of the decree, of any
person who has been deprived of land or of any estate or interest
therein through fraud.
xxxxxxxxx
If, under the Land Registration Act, an owner of land, as against
third parties, and after the lapse of one year, by failing to appear
and claim such ownership duly the registration proceeding, thereby
loses the same, with equal or greater reason does a lessee,
mortgagee, or other person having an interest in said land lose
such interest or right, so far as the land is concerned by not
claiming the same during the registration proceeding and by
allowing said land to be registered free of all encumbrances ...
(Emphasis supplied)
Since a clean title was issued in the name of the spouse Iñigo
Bitanga and Rosa Ver by virtue of the decree of registration
entered on September 14, 1937, and said decree not having been
contested or reopened for a period of one year, the same became
incontrovertible. We must reiterate here the rationale of the
doctrine We laid d•wn in William H. Anderson and Co. vs.
Garcia, 64 Phil. 506, 514-515, after an analysis of the Apparently
conflicting decisions in the cases of Worcester vs. Ocampo and
Ocampo, 34 Phil. 646; Lanci vs Yangco, 52 Phil. 563;
and Laxamana vs. Carlos, 57 Phil. 722 thus:
Whatever might have been generally or unqualifiedly stated in the
cases heretofore decided by this court, We hold that under the
Torrens system registration is the operative act that gives validity
to the transfer or creates a lien upon the land (Secs. 50 and 51,
Land Registration Act). 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
pry objects of the Torrens system. A bona fide purchaser for value
of such property at an auction sale acquires good title as against a
prior transferee of the same property if such transfer was
unrecorded at the time of the auction sale. ...
In the instant case, there is no showing that the Manila Trading
Company (MTC) had any knowledge or notice of the prior mortgage
in favor of the PNB, hence, it may be safely presumed that it (MTC)
acquired the rights of Rosa Ver and Guillermo Bitanga as an
innocent purchaser for value and free from all incumbrances. From
the MTC, the aforesaid rights of Rosa and Guillermo passed to
Santiago Sambrano, and from the latter, to herein intervenors.
There is no question, therefore, as to intervenors' rights over the
property, as against the PNB or its transferee, Felizardo Reyes. The
intervenors merely stepped into the shoes of MTC, a prior
purchaser in good faith, and thereby became entitled to an the
defenses available to said Company, including those arising from
the acquisition of the property in good faith and for value.
(Granados vs. Monton, L-1698, April 8, 1950, 86 Phil. 42).
Upon the clear and explicit provisions of the Land Registration Act
and the jurisprudence on the indefeasibility of the Torrens title
after the lapse of one year as reiterated and emphasized in the
unbroken line of authorities, We hold that the respondent court
committed no error in holding that "the lien by reason or on
account of the mortgage executed by Rosa Ver over the entire
parcel on October 20, 1936, which was not annotated on the
original certificate of title, could not have attached to the land.
Otherwise stated, the failure of the interested party to appear
during the registration proceeding and claim such interest in the
land barred him from thereafter having such interest annotated on
the certificate of title."
The third assignment of error assails the respondent court in
holding that estoppel and/or laches has not stepped in to defeat
the right of respondents Bitangas and Rabago over the lot in
question, specifically to the one-half (1/2) portion thereof
representing their undivided share of the lot as their in. inheritance
from their father, Inigo Bitanga.
In rejecting appellant's defense of estoppel or laches, the
respondent Court of Appeals ruled:
Corollary to the foregoing, appellants cannot maintain that estoppel
or laches has stepped in to defeat the right of the plaintiffs-
appellees to institute an action to indicate their right. And the
reason is basic in its simplicity: the mortgage contract entered into
by Rosa Ver respecting the other half of the lot in question having
been null and void ab initio, lapse of time could not have validated
or ratified it, and an action, predicated upon the indubitable nullity
of the contract constituted may always be maintained by the
aggrieved party to set it aside. (pp. 13-14, CA Decision).
Petitioner argues that respondents Bitangas and Rabago, as heirs
and/or successors-in-interest of Rosa Ver are bound by the
mortgage and may not be permitted to question the validity of the
same, and assuming that Rosa Ver does not have any right to
constitute a mortgage on the other half of the lot in question,
petitioner contends that nonetheless the validity Of the mortgage
deed constituted by her over the share of her husband should be
upheld as well as its acquisition by the petitioner because
respondents Bitangas and Rabago are likewise estopped to
question the validity of the same by reason of acquisence On their
Part in that Guillermo Bitanga together with Mary Bitanga Castillo
signed as witness to the mortgage deed executed by their mother
on the whole portion of the lot in question on October 20, 1936
while respondent Atty. Agripino L. Rabago, the son-in-law of the
mortgagor Rosa Ver, notarized the said mortgage deed. Petitioner
also points to the fact that respondent Pedro Bitanga offered to
repurchase the whole portion of the property from the petitioner,
which offer is an admission, conclusive upon him that the PNB is
the absolute and legal owner of the lot in question and have the
right to dispose of the same. And citing the case of Cruz vs
Ilagan 81 Phil. 554, and authority quoted from 21 Am. Jur. 756,
petitioner concludes that respondents Bitangas and Rabago, as
heirs of the deceased husband, by their conduct, in effect bound
themselves to the real estate mortgage contract over the share of
the husband, as completely and effectively as though they
themselves signed the document as mortgagors over the share of
the husband.
Petitioner also stresses that respondents Bitangas and Rabago filed
the complaint for reconveyance and annulment of mortgage on
May 17,1954, after nineteen (19) solid years have already elapsed
from the time the mortgage was executed on October 20, 1936 by
Rosa Ver, and the lot in question had been the subject of several
transactions during which time said respondents never did anything
in assuming or vindicating their right to institute a suit against the
petitioner though with ample opportunity to do so and, therefore,
said respondents slept on or neglected in asserting their right,
hence they are guilty of laches.
Petitioner's contention is without merit. First, it must be clarified
that not all the respondent heirs signed the mortgage deed as
instrumental witnesses. An examination of the mortgage contract
(Exhibit "1") that of the five (5) Bitanga respondents, namely,
Pedro, Fernando, Gregorio, Guillermo and Clarita only Guillermo
Bitanga signed as one of the instrumental witnesses, the first being
Mary B. Castillo.
Even as regards Guillermo Bitanga, who signed as witness of the
deed of mortgage, PNB's reliance upon the case of Vda de la Cruz
vs. Ilagan is unavailing. In the De la Cruz case, the heirs of the
decedent, who were the es sought to be estopped from questioning
the validity of the sale made by their co-heir and the administrator
of the decedent's estate, did not merely sign as witnesses to the
deed of sale. In the words of Justice Zaldivar who penned the
decision, they "gave their approval and conformity to the made and
to the administrator's motion by signing with appropriate
expressions both papers." (Cruz vs. Ilagan, 81 Phil. 554, 556).
Thus, that the heirs gave their consent to the sale could not be
doubted, as in fact it was expressed in words in the deed itself and
in the motion submitted to the court for judicial approval of the
sale, and on the basis of this express approval and conformity, the
Court held them in estoppel and bound as co-vendors. In the
instant case, on the other hand, the party sought to be estopped
signed merely as an instrumental witness. A distinction should be
made, as indeed there is, between one who signs a document
merely as an instrumental witness, and one who affixes his
signature as proof of his consent to, approval of, and conformity
with, the contents of the deed or document. The former simply
attests that the party or parties to the instrument signed the same
in his presence, so that he is frequently referred to as a "Witness to
the signature," and he is not bound to know or be aware of the
contents of the document; while the latter is not only presumed to
know the subject matter of the deed, but more importantly, binds
himself thereto as effectively as the party if would be bound
thereby.
The foregoing distinction makes clear the inapplicability of the
ruling in Vda de la Cruz vs. Ilagan to the facts obtaining in the case
at bar. We cannot hold Guillermo Bitanga in estoppel by declaring
that he bound himself to the mortgage as effectively as the
mortgagor Rosa Ver when he signed the mortgage deed as a
witness in the absence of clear proof that he was in fact aware of
the contents of the document at the time of its execution. We can
only go as far as stating that the deed was signed by the parties
thereto in his presence.
Moreover, there is no allegation nor evidence on record to show
that petitioner-mortgagee relied upon the signature of Guillermo
Bitanga on the mortgage deed, or that he made any
representations with the PNB for the acceptance of the mortgage.
On the contrary, PNB states that Rosa Ver mortgaged the entire lot
"on the basis and strength of Tax Declaration No. 120225-A" which
"was issued and declared in her exclusive name. 10 As held by this
Court, speaking through Justice Zaldivar, in the case of Kalalo vs.
Luz, L-27782, July 31, 1970, 34 SCRA 337, 346-347:
An essential element of estoppel is that the person invoking it has
been influenced and has relied on the representations or conduct of
the person sought to be estopped, and this element is wanting in
the instant case ... And in Republic of the Philippines vs. Garcia, et
al. (91 Phil. 46, 49 ), this Court ruled that there is no estoppel
where the statement or action invoked as its basis did not mislead
the adverse party. Estoppel has been characterized as harsh or
odious and not favored by law (Coronet, et al. vs. C.I.R., et al., 24
SCRA 990, 996) ... Estoppel cannot be sustained by mere
argument or doubtful inference; it must be clearly proved in all its
essential elements by clear, convincing and satisfactory evidence
(Rivers vs. Metropolitan Life Ins. Co. of New York, 6 N.Y., 2d, 3, 5)
...
Consequently, there is no estoppel where there is no reliance upon
representations and where there is no deliberate misleading of
another. Intention to mislead is an important element of estoppel,
as well as the lead party's reliance upon the declaration, act or
omission of the party sought to be estopped. Both elements have
not been proved in the instant case, hence again, estoppel does
not lie against Guillermo Bitanga.
Under this same ground of estoppel, petitioner makes capital of the
fact that it was Atty. Agripino L. Rabago, son-in-law of mortgagor
Rosa Ver and husband of one of herein respondent-heirs, Clarita
Bitanga Rabago, who notarized the mortgage deed. It is contended
that since Atty. Rabago acted as the judicial administrator and
lawyer of the Bitanga family estate at the time of the execution of
the mortgage, he should have prevailed upon his mother-in-law
Rosa Ver not to mortgage the entire lot but only half thereof to
PNB when he was approached to notarize the Hipoteca de Bienes
Immuebles (Exhibit 1). Furthermore, knowing that the property
was already the subject of original registration proceedings under
Act No. 496, he should have informed the bank thereof.
Again, this contention of petitioner is untenable. Assuming that
Atty. Rabago was the lawyer for the Bitanga family administrator of
its estate of which the trial and appellate courts made no such
finding, his acts, declarations and omissions in the performance of
his duties as such, whether deliberate or not, cannot adversely
affect herein respondent hers as to deprive them of their right to
umpugn a contract which was prejudicial to their interests. Under
the circumstances of the case at bar, that Atty. Rabago could have
or should have done a particular thing which he did not do is his
own responsibility. The settled rule in Philippines Jurisprudence
that a client is bound by his 's actions, negligence, mistakes and/or
shortcomings enunciated in a number of cases 11 presupposes the
existence of a ending litigation whether in court or in an
administrative body, and refers only to matters to the conduct of
such case. Precisely said rule requires the existence of an attorney-
client relationship, while herein, there is merely a single,
independent transaction, that of a mortgage, which was in no way
con. connected with any pending litigation at the time of its
execution. Therefore, the above-stated rule finds no application in
the instant case.
We likewise disagree with the contention that Pedro Bitanga's offer
to buy the lot in question, as contained in his letter to the PNB
dated September 14, 1949 (Exhibit 10), is a conclusive admission
on his part that the bank was the absolute and legal owner of the
property so as to estop him from contesting the validity of the
mortgage (Exhibit 1) and the title (TCT T-2701) procured by the
bank over the property. For in the aforesaid letter, Bitanga
categorically wrote: "1. That I offer the amount of P800.00 to buy
said lot, and please consider that the rights which the bank had
purchased was the property and shares of my mother and brother,
Guillermo, and that my rights as well as the rights of my other
brothers and sisters were not sold to the bank;" There can be no
estoppel arising from said vehement and assertive claim. If he
offered to buy the entire property despite such expressed claim, his
purpose may well be that he wished to avoid a long-drawn,
expensive litigation and not necessarily to admit that petitioner was
the absolute and legal owner of the property.
As to petitioner's contention that respondents are guilty of laches
for having slept on or neglected in asserting their right to the land
after the lapse of more than nineteen (19) years from the time the
mortgage was executed on October 20, 1936 by Rosa Ver, the
ruling in Angeles, et al., vs. Court of Appeals, et al., 102 Phil.
1006, declares that "where the sale of a homestead is null and
void, the action to recover the same does not prescribe because
mere lapse of the time Cannot give efficacy to the contracts that
are null and void and inexistent." This is a principle recognized
since Tipton vs. Velasco, 6 Phil. 67, that "mere lapse of time to
give efficacy to contracts that are null and void cited in Eugenie vs.
Perdido et al., 97 Phil. 41.
As to the fourth assignment of error faulting the respondent
appellate court in holding that the acquisition of the other half
portion of the lot in question by the intervenors-spouses Melitona
Lagpacan and Jorge Maracas bears the earmarks of validity and
registry petitioner theorizes that the mortgage executed by Rosa
Ver on the lot in question in its entirety was valid and that said
mortgage was very much ahead than that of the levy made by the
Manila Trading & Supply Co. since the mortgage was registered on
November 12, 1936 under Act 3344 as then the property
mortgaged was still an unregistered land. On the other hand, the
levy made by the Manila Trading & Supply Co. was noted in the
first Torrens title of the land after its registration under the Torrens
system, on February 14, 1940. And being first in time, herein
petitioner maintains it should be first in right and the mortgage
should enjoy preference over the levy.
It must be noted, however, that in Our resolution of the first
assignment of error, We ruled that the mortgage deed was valid
and existing only with respect to the one-half portion of the lot in
question belonging to the mortgagor Rosa Ver as her share in the
conjugal partnership with her husband Iñigo Bitanga. Hence,
petitioner's assumption that the mortgage of the whole lot was
valid, is erroneous. What this Court held is that the mortgagor,
Rosa Ver, as surviving spouse, could convey in mortgage to the
petitioner bank one-half (½) of the entire property being her share
in the conjugal partnership with her deceased husband, the other
half being the lawful share of the respondent heirs as inheritance
from their deceased father, Iñigo Bitanga.
And resolving the sec•nd assignment of error, We have ruled
likewise that the respondent court committed no error in holding
that the mortgage lien executed by Rosa Ver over the entire parcel
of land on October 20, 1936 which was not annotated on the
original certificate of title could not have attached to the land.
Stated otherwise, the failure of the petitioner bank to appear
during the registration proceedings and claim such interest in the
land, and further to do so after more than a year after the issuance
of the decree of registration which rendered the title undefeasible
and free from any collateral attack by any person g title to or
interest in the land prior to registration proceedings, has resulted
into the petitioner bank being virtually deprived of its mortgage. It
follows, therefore, that the acquisition of the other half portion of
the lot in question by the intervenors-spouses Melitona Lagpacan
and Jorge Macalas into whose hands said one-half (½) passed as a
result of Civil Case No. 1846 of the Court of First Instance of Ilocos
Norte entitled "Jorge Maracas, et al., vs. Alfredo Formoso, et
al." was valid and regular, which holding of the Court of Appeals is
correct and We affirm the same.
To recapitulate, the mortgage executed by Rosa Ver in favor of the
PNB was valid only as regards her one-half (½) conjugal share in
Lot 9068. On the other hand, the intervenors-spouses Melitona
Lagpacan and Jorge Malacas acquired their right to the shares of
Rosa Ver and Guillermo Bitanga in the same lot from the Manila
Trading Co., another creditor of Rosa Ver, which acquired "all the
rights, title, interests and participations which ... Guillermo Bitanga
and Row Ver de Bitanga have or might have" over Lot 9068 (Exh
4-Lagpacan) more than two (2) years after the decree of
registration was entered in the name of the Bitanga spouses on
September 14, 1937. Since Original Certificate of Title No. 7683
covering the land in question was issued on December 15, 1937
free from any mortgage lien and no such lien was recorded
thereafter even until May 25, 1940 when the certificate of sale in
favor of the Manila Trading Co. as highest bidder of the shares of
Rosa and Guillermo was annotated on the title (Exh. A-4), it is
quite clear that as between the PNB and the Manila Trading Co.,
the latter had the better rights.
One further point that militates against the claim of the petitioner
bank who now prosecutes its claim or mortgage lien in behalf of
Felizardo Reyes to whom the bank sold the property on May 24,
1954, is the finding of the appellate court that said Felizardo Reyes
is a purchaser in bad faith, a notice of lis pendens having been
annotated on the certificate of title cover. ing the property
sometime before the de thereof was made by the Philippine
National Bank in favor of F o Reyes. This finding of fact is
conclusive and binding upon Us and bad faith We can neither
condone nor reward.
The judgment of the Court of Appeals must, however, be modified.
Paragraph (d) of the dispositive portion of the decision appealed
from directed the Register of Deeds to issue in lieu of Transfer
Certificate of Title Nos. T-2701 and T-3944 another certificate of
title in the names of the plaintiffs and in. intervenors as follows:
Undivided behalf (½) share to Pedro Bitanga married to Agripina .
Fernando Bitanga single Gregorio Bitanga single, Guillermo
Bitanga, single, Clarita Bitanga, married to Agripino L. Rabago, all
of legal age, Filipino citizens, and residents of Laoag, Ilocos Norte,
and the remaining undivided one-half (1/2) re to the spouses Jorge
Malacas and Melitona Lagpacan, both of legal age, Filipino citizens,
and residents of Burgos, Ilocos Norte free from incumbrance
regarding the claims of the Philippine National Bank and Felizardo
Reyes, after payment of lawful fees.
As We have hereinbefore ruled that the Manila Trading Company
acquired not only the rights, title, interests and participation of
Rosa Ver to one-half (½) of Lot 9068 but also that pertaining to
Guillermo Bitanga or one-fifth (1/5) of the other half of the lot
which the latter shared with his sister and three (3) brothers, each
one having one-fifth (1/5) share each, the intervenor spouses as
successors-in-interest of the Manila Trading Company are entitled
to six-tenths (6/10) or three-fifths (3/5) of the entire lot, and not
merely one-half (½) thereof as held by the lower court and the
appellate court. The undivided two-fifths (2/5) share only should
appertain to Pedro Bitanga, Fernando Bitanga, Gregorio Bitanga
and Clarita Bitanga.
WHEREFORE, IN VIEW OF THE FOREGOING, the judgment of the
Court of Appeals is hereby affirmed with modification in the sense
that paragraph (d) is hereby amended to read as follows:
(d) Since the issuance of Transfer Certificate of Title No. T2701,
Exhibit "D" in favor of the Philippine National Bank, and Transfer
Certificate of Title No. T-3944, Exhibit "16", in favor of Felizardo
Reyes, was without legal basis, they are, therefore, declared null
and void and cancelled. The Register of Deeds is hereby ordered to
issue in hell of the foregoing transfer certificates of title another
certificate of title in the names of the private respondents as
follows:
Undivided two-fifths (2/5) share to Pedro Bitanga, married to
Agripina, Purisima Fernando Bitanga, single, Gregorio Bitanga,
single, and Clarita Bitanga, married to Agripino L. Rabago, all of
legal age, Filipino citizens, and residents of Laoag, Ilocos Norte,
and the remaining undivided three-fifths (3/5) share to the spouses
Jorge Maracas and Melitona Lagpacan, both of legal age, Filipino
citizens, and residents of Burgos, Ilocos Norte, free from
incumbrance regarding the claims of the Philippine National Bank
and Felizardo Reyes, after payment of lawful fees.
Costs against the petitioner.
G.R. No. L-52361 April 27, 1981
SUNSET VIEW CONDOMINIUM CORPORATION, petitioner,
vs.
THE HON. JOSE C. CAMPOS, JR. OF THE COURT OF FIRST
INSTANCE, BRANCH XXX, PASAY CITY and AGUILAR-
BERNARES REALTY, respondents.
G.R. No. L-52524 April 27, 1981
SUNSET VIEW CONDOMINIUM CORPORATION, petitioner,
vs.
THE HON. JOSE C. CAMPOS, JR., PRESIDING JUDGE OF THE
COURT OF FIRST INSTANCE, BRANCH XXX, PASAY CITY, and
LIM SIU LENG, respondents.
FERNANDEZ, J.:
These two cases which involve similar facts and raise Identical
questions of law were ordered consolidated by resolution of this
Court dated March 17, 1980. 1
The petitioner, Sunset View Condominium Corporation, in both
cases, is a condominium corporation within the meaning of
Republic Act No. 4726 in relation to a duly registered Amended
Master Deed with Declaration of Restrictions of the Sunset View
Condominium Project located at 2230 Roxas Boulevard, Pasay City
of which said petitioner is the Management Body holding title to all
the common and limited common areas. 2
G.R. NO. 52361
The private respondent, Aguilar-Bernares Realty, a sole
proprietorship with business name registered with the Bureau of
Commerce, owned and operated by the spouses Emmanuel G.
Aguilar and Zenaida B. Aguilar, is the assignee of a unit, "Solana",
in the Sunset View Condominium Project with La Perla Commercial,
Incorporated, as assignor. 3 The La Perla Commercial, Incorporated
bought the "Solana" unit on installment from the Tower Builders,
Inc. 4 The petitioner, Sunset View Condominium Corporation, filed
for the collection of assessments levied on the unit against Aguilar-
Bernares Realty, private respondent herein, a complaint dated June
22, 1979 docketed as Civil Case No. 7303-P of the Court of First
Instance of Pasay City, Branch XXX. The private respondent filed a
Motion to Dismiss the complaint on the grounds (1) that the
complaint does not state a cause of action: (2) that the court has
no jurisdiction over the subject or nature other action; and (3) that
there is another action pending between the same parties for the
same cause. The petitioner filed its opposition thereto. The motion
to dismiss was granted on December 11, 1979 by the respondent
Judge who opined that the private respondent is, pursuant to
Section 2 of Republic Act No. 4726, a "holder of a separate
interest" and consequently, a shareholder of the plaintiff
condominium corporation; and that "the case should be properly
filed with the Securities & Exchange Commission which has
exclusive original jurisdiction on controversies arising between
shareholders of the corporation." the motion for reconsideration
thereof having been denied, the petitioner, alleging grave abuse of
discretion on the part of respondent Judge, filed the instant petition
for certiorari praying that the said orders be set aside.
G.R. NO. 52524
The petitioner filed its amended complaint dated July 16, 1979
docketed as Civil Case No. 14127 of Branch I of the City Court of
Pasay City for the collection of overdue accounts on assessments
and insurance premiums and the interest thereon amounting to
P6,168 06 as of March 31, 1979 against the private respondent Lim
Siu Leng 5 to whom was assigned on July 11, 1977 a unit called
"Alegria" of the Sunset. View Condominium Project by Alfonso
Uy 6 who had entered into a "Contract to Buy and Sell" with Tower
Builders, Inc. over the said unit on installment basis. 7
The private respondent filed a motion to dismiss on the ground of
lack of jurisdiction, alleging that the amount sought to be collected
is an assessment. The correctness and validity of which is certain
to involve a dispute between her and the petitioner corporation;
that she has automatically become, as a purchaser of the
condominium unit, a stockholder of the petitioner pursuant to
Section 2 of the Condominium Act, Republic Act No. 4726; that the
dispute is intra-corporate and is consequently under the exclusive
jurisdiction of the Securities & Exchange Commission as provided in
Section 5 of P.D. No. 902-A. 8
The petitioner filed its opposition thereto, alleging that the private
respondent who had not fully paid for the unit was not the owner
thereof, consequently was not the holder of a separate interest
which would make her a stockholder, and that hence the case was
not an intra-corporate dispute. 9
After the private respondent had filed her answer to the opposition
to the motion to dismiss 10 of the petitioner, the trial court issued
an order dated August 13, 1979 denying the motion to
dismiss. 11 The private respondent's motion for reconsideration
thereof was denied by the trial court in its Order dated September
19, 1979. 12
The private respondent then appealed pursuant to Section 10 of
Rule 40 of the Rules of Court to the Court of First Instance, where
the appeal was docketed as Civil Case No. 7530P. The petitioner
filed its "Motion to Dismiss Appeal" on the ground that the order of
the trial court appealed from is interlocutory. 13
The motion to dismiss the appeal was denied and the parties were
ordered to submit their respective memorandum on the issue
raised before the trial court and on the disputed order of the trial
judge. 14 After the parties had submitted their respective
memoranda on the matter, the respondent Judge issued an order
dated December 14, 1979 in which he directed that "the appeal is
hereby dismissed and d the judgment of the lower court is
reversed. The case is dismissed and the parties are directed to
ventilate their controversy with the Securities & Exchange
Commission. 15 The petitioner's motion for reconsideration thereof
was denied in an order dated January 14, 1980. 16 Hence this
petition for certiorari, alleging grave abuse of discretion on the part
of the respondent Judge.
Issues Common to Both Cases
It is admitted that the private respondents in both cases have not
yet fully paid the purchase price of their units. The Identical issues
raised in both petitions are the following:
1. Is a purchaser of a condominium unit in the condominium
project managed by the petitioner, who has not yet fully paid the
purchase price thereof, automaticaly a ,stockholder of the
petitioner Condominium Corporation
2. Is it the regular court or the Securities & Exchange Commission
that has jurisdiction over cases for collection of assessments
assessed by the Condominium Corporation on condominium units
the full purchase price of which has not been paid?
The private respondents in both cases argue that every purchaser
of a condominium unit, regardless of whether or not he has fully
paid the purchase price, is a "holder of a separate interest"
mentioned in Section 2 of Republic Act No. 4726, otherwise known
as "The Condominium Act" and is automatically a shareholder of
the condominium corporation.
The contention has no merit. Section 5 of the Condominium Act
expressly provides that the shareholding in the Condominium
Corporation will be conveyed only in a proper case. Said Section 5
provides:
Any transfer or conveyance of a unit or an apartment, office or
other space therein, shall include the transfer or conveyance of the
undivided interests in the common areas or, in a proper case, the
membership or shareholding in the condominium corporation ...
It is clear then that not every purchaser of a condominium unit is a
shareholder of the condominium corporation. The Condominium Act
leaves to the Master Deed the determination of when the
shareholding will be transferred to the purchaser of a unit. Thus,
Section 4 of said Act provides:
The provisions of this Act shall apply to property divided or to be
divided into condominium only if there shall be recorded in the
Register of Deeds of the province or city in which the property lies
and duly annotated in the corresponding certificate of title of the
land ... an enabling or master deed which shall contain, among
others, the following:
xxx xxx xxx
(d) Astatement of the exact nature of the interest acquired or to be
acquired by the purchaser in the separate units and in the common
areas of the condominium project ...
The Amended Master Deeds in these cases, which were duly
registered in the Register of Deeds, and which contain, by mandate
of Section 4, a statement of the exact nature of the interest
acquired by a purchaser of a unit, provide in Section 6 of Part 1:
(d) Each Unit owner shall, as an essential condition to such
ownership, acquire stockholding in the Condominium Corporation
herein below provided ... 17
The Amended Master Deeds likewise provide in Section 7 (b), thus.
(b) All unit owners shall of necessity become stockholders of the
Condominium Corporation. TOWER shall acquire all the shares of
stock of SUNSET VIEW and shall allocate the said shares to the
units in proportion to the appurtenant interest in the COMMON
AREAS and LIMITED COMMON AREAS as provided in Section 6 (b)
above. Said shares allocated are mere appurtenances of each unit,
and therefore, the same cannot be transferred, conveyed,
encumbered or otherwise disposed of separately from the Unit ... 18
It is clear from the above-quoted provisions of the Master Deeds
that the shareholding in the Condominium Corporation is
inseparable from the unit to which it is only an appurtenant and
that only the owner of a unit is a shareholder in the Condominium
Corporation.
Subparagraph (a) of Part 1, Section 6, of the Master Deeds
determines when and under what conditions ownership of a unit is
acquired by a purchaser thus:
(a) The purchaser of a unit shall acquire title or ownership of such
Unit, subject to the terms and conditions of the instrument
conveying the unit to such purchaser and to the terms and
conditions of any subsequent conveyance under which the
purchaser takes title to the Unit, and subject further to this
MASTER DEED ... 19
The instrument conveying the unit "Solana" in G.R. NO. 52361 is
the "Contract to Buy and Sell" dated September 13, 1977, Annex
"D", while that conveying the unit "Alegria" in G.R. NO. 52524 is
the "Contract to Buy and Sell" dated May 12, 1976, Annex "C". In
both deeds of conveyance, it is provided:
4. Upon full payment by the BUYER of the total purchase price and
full compliance by the BUYER of an its obligations herein, the
SELLER will convey unto the BUYER, as soon as practicable after
completion of the construction, full and absolute title in and to the
subject unit, to the shares of stock pertaining thereto and to an
rights and interests in connection therewith ... 20
The share of stock appurtenant to the unit win be transferred
accordingly to the purchaser of the unit only upon full payment of
the purchase price at which time he will also become the owner of
the unit. Consequently, even under the contract, it is only the
owner of a unit who is a shareholder of the Condominium
Corporation. Inasmuch as owners is conveyed only upon full
payment of the purchase price, it necessarily follows that a
purchaser of a unit who has not paid the full purchase price thereof
is not The owner of the unit and consequently is not a shareholder
of the Condominium Corporation.
That only the owner of a unit is a stockholder of the Condominium
Corporation is inferred from Section 10 of the Condominium Act
which reads:
SEC. 10. ... Membership in a condominium corporation, regardless
of whether it is a stock or non-stock corporation, shall not be
transferable separately from the condominium unit of which it is an
appurtenance When a member or stockholder ceases is to own a
unit in the project in which the condominium corporation owns or
holds the common areas, he shall automatically cease to be a
member or stockholder of the condominium corporation.
Pursuant to the above statutory provision, ownership of a unit is a
condition sine qua non to being a shareholder in the condominium
corporation. It follows that a purchaser of a unit who is not yet the
owner thereof for not having fully paid the full purchase price, is
not a shareholder By necessary implication, the "separate interest"
in a condominium, which entitles the holder to become
automatically a share holder in the condominium corporation, as
provided in Section 2 of the Condominium Act, can be no other
than ownership of a unit. This is so because nobody can be a
shareholder unless he is the owner of a unit and when he ceases to
be the owner, he also ceases automatically to be a shareholder.

The private respondents, therefore, who have not fully paid the
purchase price of their units and are consequently not owners of
their units are not members or shareholders of the petitioner
condominium corporation,

Inasmuch as the private respondents are not shareholders of the

petitioner condominium corporation, the instant case for collection
cannot be a "controversy arising out of intracorporate or
partnership relations between and among stockholders, members
or associates; between any or all of them and the corporation,
partnership or association of which they are stockholders, members
or associates, respectively" which controversies are under the
original and exclusive jurisdiction of the Securities & Exchange
Commission, pursuant to Section 5 (b) of P.D. No. 902- A. The
subject matters of the instant cases according to the allegations of
the complaints are under the jurisdiction of the regular courts: that
of G.R. NO. 52361, which is for the collection of P8,335.38 with
interest plus attorney's fees equivalent to the principal or a total of
more than P10,000.00 is under the jurisdiction of the Court of First
Instance; and that of G.R. NO. 52524, which is for the collection of
P6,168-06 is within the jurisdiction of the City Court.

In view of the foregoing, it is no longer necessary to resolve the

issue raised in G.R. NO. 52524 of whether an order of the City
Court denying a motion to dismiss on the ground of lack of
jurisdiction can be appealed to the Court of First Instance.

WHEREFORE, the questioned orders of the respondent Judge dated

December 11, 1979 and January 4, 1980 in Civil Case No. 7303-P,
subject matter of the Petition in G.R. No. 52361, are set aside and
said Judge is ordered to try the case on the merits. The orders
dated December 14, 1979 and January 14, 1980 in Civil Case No.
7530-P, subject matter of the petition in G.R. No. 52524 are set
aside and the case is ordered remanded to the court a quo, City
Court of Pasay City, for trial on the merits, with costs against the
private respondents.