HERMOGENA G. ENGRESO with spouse JOSE ENGRESO, Petitioner, vs.

 NESTORIA DE LA CRUZ and HERMINIO DE

LA CRUZ, Respondents.

DECISION

BELLOSILLO, J.:

This is a petition for review on certiorari to set aside the Decision of the Court of Appeals1 affirming the Decision of the court a
quo2 which declared private respondent Nestoria de la Cruz the lawful owner of one-half () of Lot No. 10561 and of the
residential / commercial building standing thereon.

Sometime in 1993 private respondent Nestoria de la Cruz instituted an action for declaration of ownership, possession and
damages against petitioner spouses Hermogena and Jose Engreso.3 In her complaint, Nestoria alleged that in 1979 she purchased
from her sister Hermogena one-half () of an unregistered property located in Zamboanguita, Negros Oriental, designated as Lot
No. 10561, containing an area of 112.5 square meters, more or less, as specified and delineated in the deed of sale.

Nestoria further averred that their deceased father Romeo Gajelloma had constructed a residential/commercial building on their
adjoining properties such that a part of the structure stood on her property and the remaining half on Hermogenas land. During
his lifetime, Romeo lived in the building and leased a portion thereof to third parties. After Romeos death petitioner spouses
deprived her of her rights over the purchased property as well as the building thereon. Private respondent Nestoria also
complained that her sister Hermogena mortgaged Lot No. 10561 with all its improvements in favor of the Rural Bank of
Zamboanguita, Negros Oriental, without her knowledge and consent. In support of her complaint Nestoria presented in evidence
a notarized Deed of Sale dated 20 January 1979 attesting to the fact that in consideration of P3,000.00 Hermogena sold to her an
identified portion of the disputed property. Private respondent prayed that she be declared owner of one-half () portion of Lot No.
10561 as well as the building thereon, and that petitioner spouses be ordered to render an accounting of the rentals derived from
the lease of the property.

Petitioner spouses moved to dismiss the complaint arguing that private respondent failed to allege whether earnest efforts towards
a compromise had been made.

In its Order dated 20 May 1993 the trial court denied the motion; instead, it ordered Nestoria to amend her complaint to indicate
whether efforts towards a compromise had been undertaken.4 Forthwith, private respondent filed an amended complaint stating
that petitioner spouses had rebuffed all attempts towards an amicable resolution of their dispute.

In due time, the trial court rendered its decision declaring private respondent Nestoria de la Cruz owner of a portion of the
disputed parcel of land, which was designated as Lot No. 10561-A, as well as one-half () of the residential/commercial building
standing thereon. The trial court ordered petitioner Hermogena Engreso to deliver to private respondent possession of Lot No.
10561-A and one-half () of the building thereon as well as one-half () of the rentals derived from the lease of the property
beginning February 1993. In support of its decision the trial court ratiocinated that a recital in a public document celebrated with
all the legal formalities under the safeguard of a notarial certificate constituted evidence against the parties and a high degree of
proof would be necessary to overcome the legal presumption that such recital was true. The trial court ruled that the biased and
interested testimony of petitioner Hermogena could not overcome the evidentiary force of the 20 January 1979 Deed of Sale
which was ratified before a notary public, Atty. Luz Teves, who even testified in favor of the authenticity and genuineness of the
document.

Petitioner spouses went to the Court of Appeals on a petition for certiorari insisting that it was error for the trial court not to have
dismissed the complaint and to have declared valid the falsified deed of sale. The Court of Appeals dismissed the appeal and held
that the trial court could validly order the plaintiff to amend the complaint to conform with the requirements set forth in Art. 222
of the New Civil Code for as long as the amendment did not actually confer jurisdiction on the court in which the action was
filed. The appellate court likewise upheld the findings of facts made by the trial court rationalizing that the latter was in a better
position to analyze and assess the probative value of the evidence adduced during trial. Hence, this petition.

The principle is well-established that this Court is not a trier of facts. Therefore, in an appeal by certiorari under Rule 45 of The
Rules of Court, only questions of law may be raised. The resolution of factual issues is the function of trial courts the findings of
which on these matters are received with respect and are, as a rule, binding on this Court unless it is shown that they are grounded
on speculations, surmises or conjectures.[5 In the present case, whether the Deed of Sale dated 20 January 1979 is authentic and
genuine, and whether petitioner spouses are bound to deliver the property object of the sale to private respondent are essentially
factual issues and, after a prudent study of the contentions of both sides, we find no cogent reason to disturb the findings of the
trial court which have been affirmed in toto by the Court of Appeals.
Indeed, under the law on sales the vendor is bound to transfer ownership of and deliver the thing object of the sale to the vendee.
[6 In the present case, although the sale was made through a public document and hence equivalent to delivery of the thing sold,
petitioner Hermogena vehemently denied the fact of the sale and interposed her objection to private respondents enjoyment of the
property. As such, fiction must yield to reality and petitioners obligation to deliver the sold portion of Lot No. 10561, or Lot No.
10561-A, to private respondent remains.

However, we take exception to the order of the courts a quo directing petitioner spouses to deliver to private respondent Nestoria
de la Cruz one-half () of the building standing on Lot No. 10561. Although Nestoria is indeed the sole owner of a specified
portion of the disputed parcel of land she only co-owns the structure standing thereon.

It is a basic principle in civil law that before a property owned in common is actually partitioned, all that the co-owner has is an
ideal or abstract quota or proportionate share in the entire property. A co-owner has no right to demand a concrete, specific or
determinate part of the thing owned in common because until division is effected his right over the thing is represented only by
an ideal portion.[7cräläwvirtualibräry

As such, the only effect of an action brought by a co-owner against a co-owner will be to obtain recognition of the co-
ownership; the defendant cannot be excluded from a specific portion of the property because as a co-owner he has a right to
possess and the plaintiff cannot recover any material or determinate part of the property.8 Thus, the courts a quo erred when they
ordered the delivery of one-half () of the building in favor of private respondent.

At this instance, it must be noted that the building subject of this controversy was built not by the contending parties but by their
father Romeo Gallejoma who died years prior to this controversy. Following the rules on succession and in the absence of proof
that the estate of Romeo had been judicially or extrajudicially partitioned all his surviving heirs have a right over the building
having succeeded him from the moment of his death. Although Leon Gallejoma, brother of Nestoria and Hermogena, admitted
that the building was given by their deceased father to his squabbling sisters,9 such testimony should not prejudice and bind the
other heirs who have not relinquished their rights over the aforesaid building.

Lastly, petitioner Hermogenas encumbrance of Lot No. 10561 and the building thereon in favor of the Rural Bank of
Zamboanguita, Negros Oriental, affects only her share in the property but not that of private respondent or that of the other heirs
who were not parties to the mortgage.

WHEREFORE, the petition is DENIED. The assailed Decision is AFFIRMED with the sole MODIFICATION that petitioner
Hermogena Engreso and private respondent Nestoria de la Cruz are declared co-owners of the residential/commercial building
standing on Lots Nos. 10561 and 10561-A and they may exercise jointly the right of dominion over the aforesaid structure until
they effect its partition and until their respective portions are properly determined. This is without prejudice to the rights of the
other heirs of Romeo Gajelloma, if any, to demand their share in the building. No costs.

SO ORDERED.

G.R. No. 166790               November 19, 2014

JUAN P. CABRERA, Petitioner,
vs.
HENRY YSAAC, Respondent.

DECISION

LEONEN, J.:

Unless all the co-owners have agreed to partition their property, none of them may sell a definite portion of the land. The co-
owner may only sell his or her proportionate interest in the co-ownership. A contract of sale which purports to sell a specific or
definite portion of unpartitioned land is null and void ab initio.

In this petition for review on certiorari,1 Juan P. Cabrera assails the Court of Appeals' decision dated June 19, 20032 and
resolution dated January 3, 2005.3 These decisions ruled that a specific performance to execute a deed of sale over a parcel of
land is not available as a relief for Juan Cabrera.

It appears that the heirs of Luis and Matilde Ysaac co-owned a 5,517-square-meter parcel of land located in Sabang, Naga City,
covered by Original Certificate of Title (OCT) No. 506.4 One of the co-owners is respondent, Henry Ysaac.

Henry Ysaac leased out portions of the property to several lessees. Juan Cabrera, one of the lessees, leased a 95-square-meter
portion of the land beginning in 1986.5
On May 6, 1990, Henry Ysaac needed money and offered to sell the 95-square-meter piece of land to Juan Cabrera.6 He told
Henry Ysaac that the land was too small for his needs because there was no parking space for his vehicle.7

In order to address Juan Cabrera’s concerns, Henry Ysaac expanded his offer to include the two adjoining lands that Henry Ysaac
was then leasing to the Borbe family and the Espiritu family. Those three parcels of land have a combined area of 439-square-
meters. However, Henry Ysaac warned Juan Cabrera that the sale for those two parcels could only proceed if the two families
agree to it.

Juan Cabrera accepted the new offer. Henry Ysaac and Juan Cabrera settled on the price of ₱250.00 per square meter, but Juan
Cabrera stated that he could only pay in full after his retirement on June 15, 1992.8 Henry Ysaac agreed but demanded for an
initial payment of ₱1,500.00, which Juan Cabrera paid.9

According to Juan Cabrera, Henry Ysaac informed him that the Borbe family and the Espiritu family were no longer interested in
purchasing the properties they were leasing. Since Mamerta Espiritu of the Espiritu family initially considered purchasing the
property and had made an initial deposit for it, Juan Cabrera agreed to reimbursethis earlier payment. On June 9, 1990, Juan
Cabrera paid the amount of ₱6,100.00.10 Henry Ysaac issued a receipt for this amount. ₱3,100.00 of the amount paid was
reimbursed to Mamerta Espiritu and, in turn, she gaveJuan Cabrera the receipts issued to her by Henry Ysaac.11

On June 15, 1992, Juan Cabrera tried to pay the balance of the purchase price to Henry Ysaac. However,at that time, Henry
Ysaac was in the United States. The only person in Henry Ysaac’s residence was his wife. The wife refused to accept Juan
Cabrera’s payment.12

Sometime in September 1993, JuanCabrera alleged that Henry Ysaac approached him, requesting to reduce the area of the land
subject of their transaction. Part of the 439-square-meter land was going to be made into a barangay walkway, and another part
was being occupied by a family that was difficult to eject.13 Juan Cabrera agreed to the proposal. The land was surveyed again.
According to Juan Cabrera, Henry Ysaac agreed to shoulder the costs of the resurvey, which Juan Cabrera advanced in the
amount of ₱3,000.00.

The resurvey shows that the area now covered by the transaction was 321 square meters.14 Juan Cabrera intended to show the
sketch plan and pay the amount due for the payment of the lot. However, on that day, Henry Ysaac was in Manila. Once more,
Henry Ysaac’s wife refused to receive the payment because of lack of authority from her husband.15

On September 21, 1994, Henry Ysaac’s counsel, Atty. Luis Ruben General, wrote a letter addressed to Atty. Leoncio Clemente,
Juan Cabrera’s counsel.16 Atty. General informed Atty. Clemente that his client is formally rescinding the contract of sale
because Juan Cabrera failed to pay the balance of the purchase price of the land between May 1990 and May 1992. The letter also
stated that Juan Cabrera’s initial payment of ₱1,500.00 and the subsequent payment of ₱6,100.00 were going to be applied as
payment for overdue rent of the parcel of land Juan Cabrera was leasing from Henry Ysaac.17 The letter also denied the
allegation of Juan Cabrera that Henry Ysaac agreed to shoulder the costs of the resurveying of the property.18 Juan Cabrera,
together with his uncle, Delfin Cabrera, went to Henry Ysaac’s house on September 16, 1995 to settle the matter.19 Henry Ysaac
told Juan Cabrera that he could no longer sell the property because the new administrator of the property was his brother,
Franklin Ysaac.20

Due to Juan Cabrera’s inability to enforce the contract of sale between him and Henry Ysaac, he decided to file a civil case for
specific performance on September 20, 1995.21 Juan Cabrera prayed for the execution of a formal deed of sale and for the
transfer of the title of the property in his name.22 He tendered the sum of ₱69,650.00 to the clerk of court as payment of the
remaining balance of the original sale price.23 On September 22, 1995, a notice of lis pendenswas annotated on OCT No. 560.24

In his answer with counterclaim,25 Henry Ysaac prayed for the dismissal of Juan Cabrera’s complaint.26 He also prayed for
compensation in the form of moral damages, attorney’s fees, and incidental litigation expenses.27

Before the Regional Trial Court decided the case, the heirs of Luis and Matilde Ysaac, under the administration of Franklin
Ysaac, sold their property to the local government ofNaga City on February 12, 1997.28 The property was turned into a
projectfor the urban poor of the city.29 During the trial, Corazon Borbe Combe of the Borbe family testified that contrary to what
Juan Cabrera claimed, her family never agreed to sell the land they were formerly leasing from Henry Ysaac in favor of Juan
Cabrera.30 The Borbe family bought the property from NagaCity’s urban poor program after the salebetween the Ysaacs and the
local government of Naga City.31

On September 22, 1999, the Regional Trial Court of Naga City ruled that the contract of sale between Juan Cabrera and Henry
Ysaac was duly rescinded when the former failed to pay the balance of the purchase price in the period agreed upon.32 The
Regional Trial Court found that there was an agreement between Juan Cabrera and Henry Ysaac as to the sale of land and the
corresponding unit price.33 However, aside from the receipts turned over by Mamerta Espiritu of the Espiritu family to Juan
Cabrera, there was no "evidence that the other adjoining lot occupants agreed to sell their respective landholdings" to Juan
Cabrera.34 The Regional Trial Court also doubted that Juan Cabrera was willing and able to pay Henry Ysaac on June 15, 1992.
According to the trial court:

[A]fter the said refusal of Henry Ysaac’s wife, plaintiff [Juan Cabrera] did not bother to write tothe defendant [Henry Ysaac] or
to any of the co-owners his intention to pay for the land or he could have consigned the amount in court at the same time
notifying [Henry Ysaac] of the consignation in accordance with Article 1256 of the Civil Code. Furthermore, in September, 1993
[Juan Cabrera] was able to meet [Henry Ysaac] whenthe latter allegedly talked to him about the reduction of the areahe was
going to buy. There is no showing that [Juan Cabrera] again tendered his payment to Henry Ysaac. Instead, he allegedly made his
offer after he had the land resurveyed but defendant was then in Manila. There is no evidence as to what date this offer was made.
.....

[T]he court does not see any serious demand made for performance of the contract on the part of [Juan Cabrera] in 1992 when he
allegedly promised to pay the balance of the purchase price. Neither could he demand for the sale of the adjoining lots because
the occupants thereof did not manifest their consent thereto. At the most, he could have demanded the sale of the lot which he
was occupying. If his payment was refused in 1995, he cannot demand for damages because the rescission of the contract was
relayed to him in writing in Exhibit "4".35

The Regional Trial Court dismissed Juan Cabrera’s complaint and Henry Ysaac’s counterclaim.36 Juan Cabrera appealed the
Regional Trial Court’s decision.37

The Court of Appeals agreed with the Regional Trial Court that there was a perfected contract of sale between Juan Cabrera and
Henry Ysaac.38 According to the Court of Appeals, even if the subject of the sale is part of Henry Ysaac’s undivided property, a
co-owner may sell a definite portion of the property.39

The Court of Appeals also ruled that the contract of sale between Juan Cabrera and Henry Ysaac was not validly rescinded.40 For
the rescission to be valid under Article 1592 of the Civil Code, it should have been done through a judicial or notarial act and not
merely through a letter.41

However, due to the sale of the entire property of the Ysaac family in favor of the local government of Naga City, the Court of
Appeals ruled that the verbal contract between Juan Cabrera and Henry Ysaac cannot be subject to the remedy of specific
performance.42 The local government of Naga City was an innocent purchaser for value, and following the rules on double sales,
it had a preferential right since the sale it entered into was in a public instrument, while the one with Juan Cabrera was only made
orally.43 The only recourse the Court of Appeals could do is to order Henry Ysaac to return the initial payment of the purchase
price of ₱10,600.00 (₱1,500.00 and ₱6,100.00 as evidenced by the receipts issued by Henry Ysaac to Juan Cabrera, and
₱3,000.00 for the surveying expenses) as payment of actual damages. The Court of Appeals likewise awarded attorney’s fees and
litigation costs. To wit:

WHEREFORE, premises considered, the assailed decision of the lower court is hereby SET ASIDE and a new one is entered as
follows:

1. Declaring that there is no valid rescission of the contract of sale of the subject lot between plaintiff-appellant [Juan P. Cabrera]
and defendant-appellee [Henry Ysaac]; however, specific performance is not an available relief to plaintiff because of the
supervening sale of the property to the City of Naga, an innocent purchaser and for value;

2. Ordering [Henry Ysaac] to pay [Juan P. Cabrera] actual damages in the amount of ₱10,600.00, with legal interest of 12% per
annum from September 20, 1995 until paid;

3. Ordering [Henry Ysaac] to pay [Juan P. Cabrera], the amount of thirty thousand pesos (₱30,000.00) by way of attorney’s fees
and litigation expenses.

Henry Ysaac filed his motion for reconsideration dated July 14, 2003 of the decision of the Court of Appeals.44 On the other
hand, Juan Cabrera immediately filed a petition for reviewon certiorari with this court.45 In the resolution dated October 15,
2003, this court denied the petition "for being premature since respondent’s motion for reconsideration of the questioned decision
of the Court of Appeals is still pending resolution."46

In the resolution dated January 3,2005, the Court of Appeals denied Henry Ysaac’s motion for reconsideration. On February24,
2005, Juan Cabrera filed another petition with this court, questioning the propriety of the Court of Appeals’ decision and
resolution.
This court initially noted that the petition was filed out of time. The stamp on the petition states that it was received by this court
on March 24, 2005,47 while the reglementary period to file the petition expired on February 28, 2005. Thus, the petition was
dismissed in this court’s resolution dated April 27, 2005.48 Petitioner filed a motion for reconsideration.49 However, the same
was denied with finality in this court’s resolution dated August 17, 2005.50

In a letter addressed to the Chief Justice, petitioner argued that it would be unfair to him if a clerical error would deprive his
petition from being judged on the merits. Petitioner emphasized that the registry receipts show that he filed the petition on
February 24, 2005, not March 24, 2005, as noted by this court in his pleading.51 This court treated the letter as a second motion
for reconsideration. In the resolution dated March 31, 2006, this court found merit in petitioner’s letter.52 The petition was
reinstated, and respondent was ordered to file his comment.53 Respondent filed his comment on September 18, 2006.54 This
court required petitioner to file a reply,55 which petitioner complied with on January 15, 2007.56

The issues raised by petitioner and respondent are summarized as follows:

1. Whether this court could take cognizance of issues not raised by petitioner but by respondent in his comment to the petition for
review;

2. Whether there was a valid contractof sale between petitioner and respondent;

3. Whether the contract ofsale still subsisted;

a. Whether the contract was terminated through rescission;

b. Whether the contract was no longer enforceable due to the supervening sale of the property to the local government of Naga
City;

4. Whether petitioner is entitled to the execution of a deed of sale in his favor; and

5. Whether petitioner is entitled to actual damages, attorney’s fees, and costs of litigation.

The petition should be denied.

This court can resolve issues raised by both parties

Petitioner stated that the errors inthis case are: (1) "the [Court of Appeals] erred in holding that the relief of specific performance
is not available to [petitioner] supposedly because of the supervening sale of [the] property to the City Government of
Naga";57 and (2) "consequently, the [Court of Appeals] erred in not ordering the execution of the necessary deed of sale in favor
of [petitioner]."58 Petitioner argues that this court should limit its adjudication to these two errors.59

On the other hand, respondent raised issues on the validity of the contract of sale in favor of petitioner, and the propriety of the
award of actual damages with interest, attorney’s fees, and litigation expenses.60

For petitioner, if respondent wanted to raise issues regarding the Court of Appeals’ decision, respondent should have interposed a
separate appeal.61

Petitioner’s position is erroneous. This court can resolve issues and assignments of error argued by petitioner and respondent.

This court "is clothed with ample authority to review matters, even if they are not assigned as errors in their appeal,if it finds that
their consideration is necessary to arriveat a just decision of the case."62 We can consider errors not raised by the parties,more so
if these errors were raised by respondent.

Respondent raised different issues compared with those raised by petitioner. However, the assignment of error of respondent was
still responsive to the main argument of petitioner. Petitioner’s argument works on the premise that there was a valid contract. By
attacking the validity of the contract, respondent was merely responding to the premise of petitioner’s main argument. The issue
is relevant to the final disposition of this case; hence, it should be considered by this court in arriving at a decision.

II

There was no valid contract of sale between petitioner and respondent

Petitioner agrees with the decision of the Court of Appeals that there was a perfected contract of sale between him and
respondent.63
Respondent, however, argues that there was no contract between him and petitioner because under Article 1475 of the Civil
Code, there has to be a meeting of the minds as to the price and the object of the contract.64 Respondent argues that there was no
meeting of the minds as to the final price65 and size66 of the property subject of the sale.

In addition, while respondent admits that he was willing to sell the property being leased from him by the Borbe family and the
Espiritu family, petitioner presented no evidence to show that these families agreed to the sale in favor of petitioner. During trial,
Corazon Borbe Combe of the Borbe family testified that her family never agreed to allow the sale of the property in favor of
petitioner.67 Respondent likewise alleged that Mamerta Espiritu of the Espiritu family eventually bought the property occupied
by her family, which is contrary to the claim that petitioner obtained the consent of Mamerta Espiritu to have the land sold in his
favor.68 Petitioner replied that respondent sold 113 square meters of the 321-square-meter property to the Espiritu family on
January 17, 1996.69 Petitioner argued that Mamerta Espiritu was not a buyer in good faith because in 1990, she voluntarily
agreed to surrender the lot for sale in favor of petitioner because she did not have the money to pay for the lot. Hence, the sale in
favor of Mamerta Espiritu should not supersede the sale in favor of petitioner.70

The Regional Trial Court ruled that there was a valid contract of sale, although it found that there was no evidence to support
petitioner’s claim that he was able to secure the consent of the Espiritu family and the Borbe family to the sale of the
land.71 There was a valid contract of sale subject to a suspensive condition, but the suspensive condition was not complied with.

For the Court of Appeals, there was a valid contract of sale.72 The Court of Appeals’ ruling was based on the idea that a co-
owner could sell a definite portion of the land owned in common, and not because the suspensive conditions of the contract were
complied with. In ruling this way, the Court of Appeals relied on Pamplona v. Morato,73 which stated that:

. . . [A] "co-owner may validly sell his undivided share of the property owned in common. (If the part sold happens to be his
allotted share after partition, the transaction is entirely valid). Now then if there has been no express partition as yet, but the co-
owner who sells points out to his buyers the boundaries of the parthe was selling, and the other coowners make no objection,
there is in effect already a partial partition, and the sale of the definite portioncan no longer be assailed."74

We find that there was no contract of sale. It was null ab initio.

As defined by the Civil Code, "[a] contract is a meeting of minds between two persons whereby one binds himself, with respect
to the other, to give something or to render some service."75 For there to be a valid contract, there must be consent of the
contracting parties, an object certain which is the subject matter of the contract, and cause of the obligation which is
established.76 Sale is a special contract. The seller obligates himself to deliver a determinate thing and to transfer its ownership
to the buyer. In turn, the buyer pays for a price certain in money or its equivalent.77 A "contract of sale is perfected at the
moment there is a meeting of minds upon the thing which is the object of the contract and upon the price."78 The seller and buyer
must agree as to the certain thing that will be subject of the sale as well as the price in which the thing will be sold. The thing to
be sold is the object of the contract, while the price is the cause or consideration.

The object of a valid sales contract must be owned by the seller. If the seller is not the owner, the seller must be authorized by the
owner to sell the object.79

Specific rules attach when the seller co-ownsthe object of the contract. Sale of a portion of the property is considered an
alteration of the thing owned in common. Under the Civil Code, such disposition requires the unanimous consent of the other co-
owners.80 However, the rules also allow a co-owner to alienate his or her part in the co-ownership.81

These two rules are reconciled through jurisprudence.

If the alienation precedes the partition, the co-owner cannot sell a definite portion of the land without consent from his or her co-
owners. He or she could only sell the undivided interest of the co-owned property.82 As summarized in Lopez v. Ilustre,83 "[i]f
he is the owner of an undivided half of a tract of land, he has a 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."84

The undivided interestof a co-owner is also referred to as the "ideal or abstract quota" or "proportionate share." On the other
hand, the definite portion of the land refers to specific metes and bounds of a co-owned property.

To illustrate, if a ten-hectare property is owned equally by ten coowners, the undivided interest of a co-owner is one hectare. The
definite portion of that interest is usually determined during judicial or extrajudicial partition. After partition, a definite portion of
the property held in common is allocated to a specific co-owner. The co-ownership is dissolved and, in effect, each of the former
co-owners is free to exercise autonomously the rights attached to his or her ownership over the definite portion of the land. It is
crucial that the co-owners agree to which portion of the land goes to whom.
Hence, prior to partition, a sale of a definite portion of common property requires the consent of all co-owners because it operates
to partition the land with respect to the co-owner selling his or her share. The co-owner or seller is already marking which portion
should redound to his or her autonomous ownership upon future partition.

The object of the sales contract between petitioner and respondent was a definite portion of a co-owned parcel of land. At the
time of the alleged sale between petitioner and respondent, the entire property was still held in common. This is evidenced by the
original certificate of title, which was under the names of Matilde Ysaac, Priscilla Ysaac, Walter Ysaac, respondent Henry Ysaac,
Elizabeth Ysaac, Norma Ysaac, Luis Ysaac, Jr., George Ysaac, Franklin Ysaac, Marison Ysaac, Helen Ysaac, Erlinda Ysaac, and
Maridel Ysaac.85

The rules allow respondent to sell his undivided interestin the coownership. However, this was not the object of the sale between
him and petitioner. The object of the sale was a definite portion. Even if it was respondent who was benefiting from the fruits of
the lease contract to petitioner, respondent has "no right to sell or alienate a concrete, specific or determinate part of the thing
owned in common, because his right over the thing is represented by quota or ideal portion without any physical adjudication."86

There was no showing that respondent was authorized by his coowners to sell the portion of land occupied by Juan Cabrera, the
Espiritu family, or the Borbe family. Without the consent of his co-owners, respondent could not sell a definite portion of the co-
owned property.

Respondent had no right to define a 95-square-meter parcel of land, a 439-square-meter parcel of land, or a 321-square-meter
parcel of land for purposes of selling to petitioner. The determination of those metes and bounds are not binding to the co-
ownership and, hence, cannot be subject to sale, unless consented to by all the co-owners.

In finding that there was a valid contract of sale between petitioner and respondent, the Court of Appeals erred in the application
of Pamplona v. Moreto.87 The ruling in Pamplona should be read and applied only in situations similar to the context of that
case.

Pamplona involved the Spouses Moreto who owned three (3) parcels of land with a total area of 2,346 square meters. The
spouses had six (6) children. After the wife had died, the husband sold one of the parcels to the Pamplona family, even if the
conjugal partnership had not yet been liquidated. The parcel sold measured 781 square meters, which was less than the ideal
share of the husband in the estate. This court allowed the sale to prosper because of the tolerance from the husband’s co-heirs.
This court ruled:

The title may be pro-indiviso or inchoate but the moment the coowner as vendor pointed out its location and even indicated the
boundaries over which the fences were to be erected without objection, protest or complaint bythe 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, butalso 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 Flaviano Moreto.88 (Emphasis supplied)

In Pamplona, the co-heirs of Flaviano Moreto only questioned the sale to the Pamplona family nine (9) years after the sale. By
then, the Pamplona family had exercised several acts of ownership over the land. That is why this court considered it
acquiescence or tolerance on the part of the co-heirs when they allowed the Pamplonas to take possession and build upon the land
sold, and only questioned these acts several years later.

The ruling in Pamplonadoes not apply to petitioner. There was no evidence adduced during the trial that respondent’s co-owners
acquiesced or tolerated the sale to petitioner. The co-owners tolerated petitioner’s possession of a portion of their land because
petitioner was a lessee over a 95-square-meter portion of the property, not the buyer of the 321-squaremeter portion.

There was also no evidence of consent to sell from the co-owners. When petitioner approached respondent in 1995 to enforce the
contract of sale, respondent referred him to Franklin Ysaac, the administrator over the entire property. Respondent’s act suggests
the absence of consent from the co-owners. Petitioner did not show that he sought Franklin Ysaac’s consent as administrator and
the consent of the other co-owners. Without the consent of the co-owners, no partial partition operated in favor of the sale to
petitioner.

At best, the agreement between petitioner and respondent is a contract to sell, not a contract of sale. A contract to sell is a promise
to sell an object, subject to suspensive conditions.89 Without the fulfillment of these suspensive conditions, the sale does not
operate to determine the obligation of the seller to deliver the object.
A co-owner could enter into a contract to sell a definite portion of the property. However, such contract is still subject to the
suspensive condition of the partition of the property, and that the other co-owners agree that the part subject of the contract to sell
vests in favor of the co-owner’s buyer. Hence, the co-owners’ consent is an important factor for the sale to ripen.

A non-existent contract cannot be a

source of obligations, and it cannot
be enforced by the courts

Since petitioner believes that there was a perfected contract of sale between him and respondent, he argues that a deed of sale
should be formally executed. Petitioner agrees with the Court of Appeals’ finding that there was no valid rescission of the
contract in accordance with Article 1592 of the Civil Code.90 However, petitioner disagrees with the Court of Appeals when it
ruled that the contract was no longer enforceable due to the supervening sale with the local government of Naga City. Petitioner
argues that the sale in favor of the local government of Naga City was not made in good faith. Before the sale was finalized
between the local government and the heirs of Luis and Matilde Ysaac, petitioner had a notice of lis pendens annotated to OCT
No. 506.91 It was presumed that the local government had due notice of petitioner’s adverse claim, thus, it cannot be considered
an innocent purchaser.

For respondent, due to the inexistence of a valid contract of sale, petitioner cannot demand specific performance from
respondent.92 Respondent disagrees with the Court of Appeals when it stated that Article 1592 of the rescission of contract of
sale applies. There is no need to apply Article 1592 because there was no contract to begin with.93 The contract between
respondent and petitioner was terminated by virtue of the letter dated September 21, 1994.94

We rule in favor of respondent.

The absence of a contract of sale means that there is no source of obligations for respondent, as seller, orpetitioner, as buyer.
Rescission is impossible because there is no contract to rescind. The rule in Article 1592 that requires a judicial or notarial act to
formalize rescission of a contract of sale of an immovable property does not apply. This court does not need to rule whether a
letter is a valid method of rescinding a sales contract over an immovable property because the question is moot and academic.

Even if we assume that respondent had full ownership of the property and that he agreed to sell a portion of the property to
petitioner, the letter was enough to cancel the contract to sell. Generally, "[t]he power to rescind obligations is implied in
reciprocal ones, in case one of the obligors should not comply with what is incumbent on him."95

For the sale of immovable property, the following provision governs its rescission:

Article 1592. In the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the
time agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the
period, as long as no demand for rescissionof the contract has been made upon him either judicially or by notarial act. After the
demand, the court may not grant him a new term.

This provision contemplates (1) a contract of sale of an immovable property and (2) a stipulation in the contract that failure to
pay the price at the time agreed upon will cause the rescission of the contract. The vendee or the buyer can still pay even after the
time agreed upon, if the agreement between the parties has these requisites. This right of the vendee to pay ceases when the
vendor or the seller demands the rescission of the contract judicially or extra judicially. In case of an extra judicial demand to
rescind the contract, it should be notarized.

Hence, this provision does not apply if it is not a contract of sale of an immovable property and merely a contract to sellan
immovable property. A contract to sell is "where the ownership or title is retained by the seller and is not to pass until the full
payment of the price, such payment being a positive suspensive condition and failure of which is not a breach, casual or serious,
but simply an event that prevented the obligation of the vendor to convey title from acquiring binding force."96

In a similar case entitled Manuel v. Rodriguez,97 Eusebio Manuel offered to buy the land owned by Payatas Subdivision, Inc.
The Secretary Treasurer of Payatas Subdivision, Eulogio Rodriguez, Sr., agreed to sell the land to Eusebio Manuel after
negotiations. Similar to this case, the agreement was only made orally and not in writing. An initial payment was made, and a
final payment was to be madenine (9) to ten (10) months later. Manuel never paid for the latter installment; hence, Eulogio
Rodriguez cancelled their agreement and sold the land to someone else.

In Manuel, this court categorically stated that Article 1592 "does not apply to a contract to sell or promise to sell, where title
remains with the vendor until fulfillment to a positive suspensive condition, such as full payment of the price."98 This court
upheld that the contract to sell was validly cancelled through the non-payment of Eusebio Manuel. The same conclusion applies
in this case.
The law does not prescribe a form to rescind a contract to sell immovable property. In Manuel, the non-payment operated to
cancel the contract. If mere non-payment is enough to cancel a contract to sell, the letter given to petitioner’s lawyer is also an
acceptable form of rescinding the contract. The law does not require notarization for a letter to rescind a contract to sell
immovable property. Notarization is only required if a contract of sale is being rescinded.

Petitioner argued that he was willing to comply with the suspensive condition on the contract to sell because he was ready to pay
the balance of the purchase price on June 15, 1992.99 However, his argument is unmeritorious. As ruled by the Regional Trial
Court, petitioner should have resorted to the various modes of consignment when respondent’s wife refused to accept the
payment on respondent’s behalf.100

Therefore, even if we assumed that the contract between petitioner and respondents were perfected, the strict requisites in Article
1592 did not apply because the only perfected contract was a contract to sell, not a contract of sale. The courts cannot enforce the
right of petitioner to buy respondent’s property. We cannot order the execution of a deed of sale between petitioner and
respondent.

The question of double sale also becomes moot and academic. There was no valid sale between petitioner and respondent, while
there was a valid sale between the local government of Naga City and respondent and his coowners. Since there is only one valid
sale, the ruleon double sales under Article 1544 of the Civil Code does not apply.101

Compensatory damages, attorney’s

fees, and costs of litigation

Respondent argued that petitioner is not entitled to the compensatory damages that the Court of Appeals awarded. According to
respondent, petitioner continues to occupy the 95-square-meter property that he has been leasing since 1986 because the parcel
was not included in the sale to the local government of Naga City.102 Since April 30, 1990, petitioner has not been paying rent to
respondent despite his continued occupation of the property.103 Therefore, there was no unjust enrichment on the part of
respondent when he applied petitioner’s initial payment over the sale of the property as payment for rent.

Respondent argued further that the award of attorney’s fees and litigation expenses in favor of petitioner was also erroneous
because prior to this litigation, respondent already informed petitioner that his claim has no basis in law and fact.104 Yet,
petitioner persisted on filing this case.105

We rule that petitioner is entitled to the return of the amount of money because he paid it as consideration for ownership of the
land. Since the ownership of the land could not be transferred to him, the money he paid for that purpose must be returned to him.
Otherwise, respondent will be unjustly enriched.

Respondent’s claim for rent in arrears is a separate cause of action from this case.1âwphi1 For petitioner’s earnestmoney payment
to be considered payment for his rent liabilities, the rules of compensation under Article 1279 of the Civil Code must be
followed.106

It was not proven during trial if petitioner's rental liability to respondent is due, or if it is already liquidated and demandable.
Hence, this court is limited to uphold the ruling of the Court of Appeals, but such payment could be subject to the rule on
compensation.

However, petitioner is not entitled to attorney's fees and the costs of litigation. The Court of Appeals awarded attorney's fees to
petitioner "just to protect his right [because petitioner] reached this court to seek justice for himself."107

Contrary to the Court of Appeals' ruling, we find that petitioner did not have a clear right over the property in question. The Court
of Appeals awarded attorney's fees and litigation costs on the premise that the contract between petitioner and respondent was
perfected. Without a valid contract that stipulates his rights, petitioner risked litigation in order to determine if he has rights, and
not to protect rights that he currently has. Hence, the award of attorney's fees and litigation costs was not properly justified.

WHEREFORE, the petition is DENIED. The Court of Appeals' decision dated June 19, 2003 in CA-G.R. CV No. 65869 is SET
ASIDE. The contract between petitioner and respondent is DECLARED invalid and, therefore, cannot be subject to specific
performance. Respondent is ORDERED to return ₱10,600.00 to petitioner, with legal interest of 12% per annum from September
20, 1995 until June 30, 2013 and 6% per annum from July 1, 2013 ·until fully paid. The award of attorney's fees and litigation
expenses is DELETED.

SO ORDERED.

G.R. No. 108952 January 26, 1995

NILO A. MERCADO, petitioner,
vs.
THE COURT OF APPEALS AND AUREA A. MERCADO, respondents.

PUNO, J.:

This is a petition for certiorari to review the Decision of the respondent Court of Appeals dated August 30, 1991 declaring private
respondent a co-owner of the lot covered by TCT No. 123560 of the Register of Deeds of Quezon City.1

The facts are well established in the disputed Decision, viz:

Plaintiff Aurea A. Mercado seeks the partition and reconveyance to her of one-half of a real property located at No. 181 Esteban
Abada Street, Quezon City, described as Lot 17-A, Block 40 in Transfer Certificate of Title No. 123560 of the Registry of Deeds
of Quezon City, containing an area of P1,000 square meters, more or less and registered in the name of defendant Nilo A.
Mercado.

Plaintiff Aurea A. Mercado is 69 years old, still single, a professor, holder of a degree in Ph. D. Data of Philosophy, Research,
Statistics and Measurement from the University of Maryland, U.S.A and used to work in the United States. She is a legitimate
sister of Nilo A. Mercado.

Before she left for the United States in 1964 where she stayed up to 1984, she gave her brother University of the Philippines. She
wanted a property near U.P because she planned to teach in the said university when she comes back. She was not given any
receipt for the money handed to her brother.

Sometime in 1967, she was informed through letters received from the Philippines coming from her mother and sister that her
brother Nilo had already purchased a property located at No. 181 Esteban Abada Street, Quezon City. She never saw the title of
the property covered by TCT No. 123560.

In 1972, her brother went to the United States and visited her in her house at Jersey City. On this occasion, she asked her brother
about the purchase of the property. Her brother responded telling her not to worry for he would give her a paper with respect to
that property. In 1978, her brother Nilo sent through their mother an affidavit (Exh. A) wherein Nilo admitted the existence of co-
ownership over the property.

Through letters, she communicated with her brother Nilo regarding the subject property. In one of those letters (Exh. B), she told
her brother to pay her for the lot. In two other letters (Exh. C & D), the same property was the subject matter. She did not receive
any reply so she started calling him through the telephone, insisting on the partition of the property because she committed the
land as payment to the contractor, Mr. Escora, who constructed her school building in Davao City.

Nilo A. Medina (sic), defendant herein, is 57 years old, a graduate of law UP class 1957 and a businessman by occupation. He
testified that the plaintiff is his sister.

In 1967, he decided to buy a house and lot worth P95,000.00 located at 181 Esteban Abada Street, Quezon City from the spouses
Francisco Vargas and Teresita Vargas. Out of his personal savings, money borrowed from his mother and sister Esmeralda and
P20,000.00 borrowed from his sister Aurea, he was able to pay the downpayment of P38,000.00 to spouses Vargas. It was only
upon his tender of the downpayment that the spouses executed a Deed of Conditional Sale (Exh. 5). He applied for a housing loan
with the Social Security System (System for short) and upon its approval by the System, a Deed of Absolute Sale was executed
between him and the spouse Vargas (Exhs. 1, 2, 3, 4 & 6).

He paid the amortization for the loan (Exh. 11). However, due to financial reverses, the property was foreclosed by the System
(Exh. 9). Fortunately, he was able to redeem the property from the System in 1980 out of the insurance proceeds of his burned
property in Davao. A certificate of redemption (Exh. 10) was issued to him and he caused the cancellation of the mortgage with
the System.

As proof of his ownership, he has the tax declaration (Exh. 8), Transfer Certificate of Title No. 123560 in his name (Exh. 7) and
real property tax bill receipts evidencing payment of real estate taxes on the property (Exhs. 13, 13-a).

The petition for certiorari was initially denied by this Court2 in its Resolution on May 17, 1993 for non-compliance with our
Revised Circular
1-88, for raising factual issues and for lack of reversible error committed by the respondent Court of Appeals.3 The Court also
denied with finality petitioner's Motion for Reconsideration in a Resolution dated July 14, 1993. The motion raised no substantial
argument and the Court found no compelling reason to
grant it.

On August 23, 1993, however, petitioner filed a Motion for Leave to file a Second Motion for Reconsideration. He argued,
among others, that even assuming the correctness of the factual findings of the respondent Court of Appeals, still, there could not
be any co-ownership of the subject property. The Court required private respondent to comment and, in its Resolution of August
22, 1994, granted the Motion "in the interest of justice and considering the crucial importance of the issue of extinguishment of
co-ownership" and gave due course to the petition. 4 Extensive memoranda were then filed by the petition.

We find no merit in the petition.

We sustain the finding of the respondent court that the subject property is co-owned by petitioner and private respondent. This
finding is based on the admission made by petitioner himself in his Affidavit (Exh. "A") dated March 2, 1973, which states:

AFFIDAVIT

That I, NILO A. MERCADO, of legal age, married, Filipino and a resident of Davao City, Philippines, after having been duly
sworn to in accordance with law, depose and say the following:

That I am the co-owner of a residential land, including all the improvements existing thereon, located at 81 E. Abada, Loyola
Heights, Quezon City, with my sister Aurea A. Mercado;

That being co-owners, we share equally over the above-mentioned properties, including all the encumbrances and its obligations
and liabilities to the Social Security System and other governmental agencies;

That I am executing this affidavit to inform the proper authorities concerned that the parcel of residential land, including the
residential house, together with all its liabilities, is owned by me in co-ownership with Aurea A. Mercado.

That I am executing this affidavit freely and voluntarily without any force or intimidation imposed upon me.

IN WITNESS WHEREOF, I have hereunto set my hand this 2(nd) day of March, 1973, at the City of Davao City, Philippines.

(Sgd.) NILO A. MERCADO

Affiant

This affidavit is high quality evidence. It contains admission against interest on the part of petitioner. As a lawyer, petitioner
cannot pretend that the plain meaning of his admission eluded his mind.

We now come to the issue of whether the mortgage of the subject property to the SSS, its foreclosure and subsequent redemption
by the petitioner extinguished private respondent's co-ownership. The applicable law is Article 493 of the New Civil Code which
spells out the rights of co-owners over a co-owned property, viz:

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 mortgage, with respect to the co-owners, shall be limited to the portion which may be
allotted to him in the division upon the termination of the co-ownership. (emphasis ours)

Pursuant to this law, a co-owner has the right to alienate his pro-indiviso share in the co-owned property even without the consent
of the other co-owners. Nevertheless, as a mere part owner, he cannot alienate the shares of the other co-owners. The prohibition
is premised on the elementary rule that "no one can give what he does not have" (Nemo dat guod non habet). Thus, we held
in Bailon-Casilao vs. Court of Appeals,5 viz:

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

The proper action in cases like this is not for the nullification of the sale or for the recovery of possession of the thing owned in
common from the third person who substituted the co-owner or co-owners who alienated their shares, but the DIVISION of the
common property of the co-owners who possessed and administered it.

In the case at bench, it is established that petitioner, for his own benefit, borrowed money from the SSS and mortgaged the
subject property to the SSS on June 5, 1967 without the knowledge and consent of his co-owner, herein private respondent.
Necessarily, private respondent could not have helped in the payment of the SSS loan nor could she have redeemed the subject
property from the SSS. Under these circumstances, it will not accord with the letter and intent of Article 493 of the Civil Code to
rule private respondent lost her part ownership of the subject property finds no warrant both in law and in equity. It will be the
height of absurdity to reward petitioner for his illegal act of appropriating the share of private respondent in the subject property.

Prescinding from these premises, petitioner's reliance in the case of Tan vs. Court of Appeals6 is misplaced.

In Tan, the disputed property was mortgaged by spouses Tan Tiong Tick and Tan Ong Hun to China Bank. Tan Tiong Tick died.
He was survived by his widow and six children, including D. Annie Tan. Meanwhile, China Bank foreclosed the mortgage. It
was the highest bidder at the public auction. Thereafter, the heirs of Tan Tiong Tick sought to nullify the real estate mortgage and
the foreclosure sale before the defunct CFI of Manila. The widow, Tan Ong Hun, died.

The one-year redemption period lapsed on July 6, 1973, but the heirs of the spouses Tan failed to redeem the property. China
Bank then consolidated its ownership over the disputed property and a new title was issued in its name. In the meantime, a
compromise agreement was forged between China Bank and the Tan heirs. The Bank allowed the heirs to repurchase the property
on or before August 31, 1974, otherwise, it would dispose of the property to another party. Within the agreed period, or on
August 30, 1974, only petitioner D. Annie Tan repurchased the entire property using her own funds. The bank, however, insisted
that the repurchase be made for or in behalf of the other heirs as well. Left without any choice, D. Annie Tan filed an action in
court, asserting her exclusive ownership over the property on the ground that the co-ownership between her and her brothers and
sisters had already been extinguished. We sustained her contention and ruled:

The first question which arises is the correctness of the assumption that there was a co-ownership among the children of Tan
Tiong Tick and Tan Ong Hun when the petitioner purchased and property.

Since the lot and its improvements were mortgaged by the deceased parents, there can be no question that a co-ownership existed
amount the heirs during the period given by law to redeem the foreclosed property. Redemption by one during this period would
have inured to the benefit of all . . . .

The records show, however, that when petitioner purchased the disputed property on August 30, 1974, any co-ownership among
the brothers and sisters no longer existed. The period to redeem had expired more than one year earlier, on July 6, 1973. The
respondent China Bank consolidated its ownership and a new title was issued in the bank's name. When the heirs allowed the one
year period to expire without redeeming their parent's former property and permitted the consolidation of ownership and the
issuance of a new title, the co-ownership was extinguished. The challenged ruling of the respondent court is, therefore, based on
erroneous premises.

Under Section 63-B of Presidential Decree No. 1529, the Property Registration Decree, in case of non-redemption, the purchaser
at the foreclosure sale, meaning the respondent Bank in case of non-redemption, the purchaser at the foreclosure sale, meaning
the respondent Bank in this case, is entitled to a new certificate of title in his name after filing the necessary papers with the
Register of Deeds. (Spouses Teofisto and Eulalia Verceles v. Court of First Instance of Rizal, et al., G.R. No. 62219, February
28, 1989). It becomes a ministerial duty to place the buyer in possession of the property he now owns. (Banco Filipino v.
Intermediate Appellate court, G.R. No. 68878, 142 SCRA 44 [1986]. Ownership, therefore, passed to China Bank and there was
no more co-ownership among the heirs.

In is thus obvious that the Tan ruling is propped on a different factual setting and hence, is inapplicable to the case at bench.
In Tan, ". . . the heirs (i.e., the co-owners) allowed the one year redemption period to expire without redeeming their parents'
former property and permitted the consolidation of ownership and the issuance of a new title . . ."7 in favor of China Bank. By
their knowing acts of omission, the heirs in the Tan case allowed the extinction of their co-ownership. As aforestated, private
respondent did not know of the mortgage of their co-owned property in favor of the SSS and the expiry date of its period of
redemption. In other words, private respondent did not voluntary relinquish at any period of time her pro-indiviso share in the
subject property.

IN VIEW WHEREOF, the Decision of the respondent Court of Appeals dated August 30, 1991 and its Resolution dated January
29, 1993, are affirmed. Costs against petitioner.

PAZ GALVEZ, CARLOS TAM, and TYCOON PROPERTIES, INC., Petitioners, v. HON. COURT OF APPEALS and
PORFIRIO GALVEZ, Respondents.

DECISION

CHICO-NAZARIO, J.:
The factual antecedents of this case reveal that Timotea F. Galvez died intestate on 28 April 1965.1 She left behind her children
Ulpiano and Paz Galvez. Ulpiano, who died on 24 July 1959,2 predeceased Timotea and was survived by his son, Porfirio
Galvez. Timotea left a parcel of land situated at Pagdaraoan, San Fernando, La Union, covered by Tax Declaration No.
396453 and more particularly described as follows:

A parcel of unirrigated riceland situated at Brgy. Pagdaraoan, San Fernando, La Union under Tax Declaration No. 39645, series
of 1957, with an area of 4,304.5 square meters, more or less bounded on the North by Valentin and Isidoro Sobrepeña; on the
East by Nicolas Ducusin; on the South by Victor Ducusin; and on the West by the National Highway.4

Considering that all the other compulsory heirs of Timotea already received their respective shares,5 the property passed by
succession, both to Timotea's daughter, Paz Galvez, and to the former's grandson, Porfirio, the latter succeeding by right of
representation as the son of Ulpiano.

Porfirio Galvez was surprised to discover that on 4 May 1970,6 Paz Galvez executed an affidavit of adjudication stating that she
is the true and lawful owner of the said property. Tax Declarations No. 157497 and No. 123428 were then issued in the name of
Paz Galvez. On 22 June 1992, without the knowledge and consent of Porfirio Galvez, Paz Galvez sold the property to Carlos
Tam for a consideration of Ten Thousand Pesos (P10,000.00) by way of a Deed of Absolute Sale.9 Carlos Tam thereafter filed an
application for registration of said parcel of land under Land Registration Case No. 2278 before the Regional Trial Court (RTC)
of San Fernando, La Union. On 21 January 1994, Original Certificate of Title No. 0-2602 of the Registry of Deeds of San
Fernando, La Union, was issued in the name of Carlos Tam.10 Subsequently, on 27 September 1994, Carlos Tam sold the
property to Tycoon Properties, Inc. through a Deed of Absolute Sale executed by the former in favor of the latter.11 As a result,
the title of Carlos Tam over the property was cancelled and a new one, Transfer Certificate of Title (TCT) No. T-4039012 was
issued in favor of Tycoon Properties, Inc.

On 12 May 1994, Porfirio Galvez filed Civil Case No. 4895 before the RTC, Branch 26, of San Fernando, La Union, for Legal
Redemption with Damages and Cancellation of Documents13 against Paz Galvez and Carlos Tam. The Complaint was later
amended to implead as additional defendant, Tycoon Properties, Inc.14 When Tycoon Properties, Inc. filed its Answer, it also
filed a cross-claim against Carlos Tam. In a decision15 dated 15 December 1999, the trial court held:

WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:

1. declaring null and void the Affidavit of Adjudication executed by defendant PAZ GALVEZ dated May 4, 1970;

2. declaring null and void the Deed of Absolute Sale over the property originally covered by Tax Declaration No. 39645 executed
by PAZ GALVEZ in favor of CARLOS TAM;

3. the Original Certificate of Title No. 0-2602, in the name of CARLOS TAM be considered cancelled;

4. The Deed of Sale between CARLOS TAM and TYCOON PROPERTIES, Inc. is hereby ordered cancelled with Transfer
Certificate of Title No. T-40390, being null and void;

5. That CARLOS TAM shall receive from the Clerk of Court, San Fernando City, La Union the amount of Ten Thousand
(P10,000.00) pesos, as redemption of the property pursuant to law;

6. That the property covered by Transfer Certificate of Title No. T-40390, be reconveyed (whole property) to PORFIRIO
GALVEZ, he having redeemed one-half (' ) of the property from CARLOS TAM and other half of the property belongs to him as
co-heir of TIMOTEA FLORES GALVEZ.

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

Petitioners Paz Galvez, Carlos Tam and Tycoon Properties, Inc. appealed the decision to the Court of Appeals.17 In a decision of
the Court of Appeals dated 28 August 2002,18 the appellate court resolved to affirm the decision of the trial court. Petitioners
filed a Motion for Reconsideration which was denied in a resolution dated 14 April 2003.19

Not contented with the decision of the Court of Appeals, petitioners are now before this Court via Petition for Review
on Certiorari under Rule 45 of the Rules of Court.

Petitioners Carlos Tam and Tycoon Properties, Inc. separately filed their Memorandum20 but raised the same issues to wit:
I

THE HONORABLE COURT OF APPEALS ERRED WHEN IT REFUSED TO HOLD THAT RESPONDENT'S CLAIM
OVER THE SUBJECT PROPERTY, WHICH IS BASED ON AN IMPLIED TRUST, HAS ALREADY PRESCRIBED
BECAUSE THE ACTION WAS FILED 24 YEARS AFER PETITIONER REPUDIATED THE SAID TRUST.

II

THE HONORABLE COURT OF APPEALS ERRED WHEN IT FAILED TO RECOGNIZE THAT RESPONDENT'S CLAIM
IS ALREADY BARRED BY LACHES BECAUSE HE FAILED TO ASSERT HIS ALLEGED RIGHT FOR ALMOST
TWENTY FOUR (24) YEARS.

III

THE HONORABLE COURT ERRED IN FAILING TO RECOGNIZE THAT PETITIONERS [CARLOS TAM AND]
TYCOON PROPERTIES ARE BUYERS IN GOOD FAITH AND FOR VALUE AND HAS THE RIGHT TO RELY ON THE
FACE OF THE TITLE.21

In assailing the decisions of the trial and appellate courts, petitioners cite Article 145122 of the Civil Code and claim that an
implied or constructive trust which prescribes in ten years, was established between Paz Galvez and Porfirio Galvez. It is
petitioners' unflinching stand that the implied trust was repudiated when Paz Galvez executed an Affidavit of Self-Adjudication
on 4 May 1970, registered the same before the Register of Deeds of La Union on 4 June 1970 and secured a new tax declaration
in her name. From 4 May 1970 to the time the complaint was filed on 12 May 1994, 24 years have passed, hence, the action is
clearly barred both by prescription and laches.

We find the petition bereft of merit.

Ostensibly, this case is governed by the rules on co-ownership23 since both Paz Galvez and Porfirio Galvez are obviously co-
owners of the disputed property having inherited the same from a common ancestor. Article 494 of the Civil Code provides that
"[a] prescription shall not run in favor of a co-owner or co-heir against his co-owners or co-heirs as long as he expressly or
impliedly recognizes the co-ownership."

It is a fundamental principle that a co-owner cannot acquire by prescription the share of the other co-owners, absent any clear
repudiation of the co-ownership.24 In Santos v. Santos,25 citing the earlier case of Adille v. Court of Appeals,26 this Court
found occasion to rule that:

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

For title to prescribe in favor of a co-owner there must be a clear showing that he has repudiated the claims of the other co-
owners and the latter has been categorically advised of the exclusive claim he is making to the property in question. The rule
requires a clear repudiation of the co-ownership duly communicated to the other co-owners.27 It is only when such unequivocal
notice has been given that the period of prescription will begin to run against the other co-owners and ultimately divest them of
their own title if they do not seasonably defend it.28

To sustain a plea of prescription, it must always clearly appear that one who was originally a joint owner has repudiated the
claims of his co-owners, and that his co-owners were apprised or should have been apprised of his claim of adverse and exclusive
ownership before the alleged prescriptive period began to run.29

In Salvador v. Court of Appeals,30 it was held that the possession of a co-owner is like that of a trustee and shall not be regarded
as adverse to the other co-owner but in fact beneficial to all of them.

The case of Huang v. Court of Appeals31 is instructive on the creation of trust relationships.

Trust is a fiduciary relationship with respect to property which involves the existence of equitable duties imposed upon the holder
of the title to the property to deal with it for the benefit of another. A person who establishes a trust is called the trustor; one in
whom confidence is reposed as regards property for the benefit of another person is known as the trustee; and the person for
whose benefit the trust has been created is referred to as the beneficiary or cestui que trust. Trust is either express or implied.
Express trust is created by the intention of the trustor or of the parties. Implied trust comes into being by operation of law. The
latter kind is either constructive or resulting trust. A constructive trust is imposed where a person holding title to property is
subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain
it. The duty to convey the property arises because it was acquired through fraud, duress, undue influence or mistake, or through
breach of a fiduciary duty, or through the wrongful disposition of another's property. On the other hand, a resulting trust arises
where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does
not intend that the person taking or holding the property should have the beneficial interest in the property. It is founded on the
presumed intention of the parties, and as a general rule, it arises where, and only where such may be reasonably presumed to be
the intention of the parties, as determined from the facts and circumstances existing at the time of the transaction out of which it
is sought to be established.

Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned. Thus,
Salvador v. Court of Appeals reiterated what acts constitute proof of exclusive ownership amounting to repudiation, emphasizing
that the act must be borne out of clear and convincing evidence of acts of possession which unequivocably amounts to an ouster
or deprivation of the right of the other co-owner. The case of Pangan v. Court of Appeals32 enumerated the following as
constituting acts of repudiation:

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

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

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

The prescriptive period may only be counted from the time petitioners repudiated the trust relation in 1955 upon the filing of the
complaint for recovery of possession against private respondents so that the counterclaim of the private respondents contained in
their amended answer wherein they asserted absolute ownership of the disputed realty by reason of the continuous and adverse
possession of the same is well within the 10-year prescriptive period.

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

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

In this case, we find that Paz Galvez effected no clear and evident repudiation of the co-ownership. The execution of the affidavit
of self-adjudication does not constitute such sufficient act of repudiation as contemplated under the law as to effectively exclude
Porfirio Galvez from the property. This Court has repeatedly expressed its disapproval over the obvious bad faith of a co-heir
feigning sole ownership of the property to the exclusion of the other heirs essentially stating that one who acts in bad faith should
not be permitted to profit from it to the detriment of others. In the cases of Adille33 and Pangan34 where, as in this case, a co-
heir was excluded from his legal share by the other co-heir who represented himself as the only heir, this Court held that the act
of exclusion does not constitute repudiation.

On the issue of prescription, while admittedly prescription operates as a bar to recovery of property, the ten-year period
commenced to run from date of registration. In this case, Carlos Tam obtained his title to the property on 21 January 1994. Since
the complaint of Porfirio Galvez was filed on 12 May 1994, the same was well within the ten-year period to file the action.

On the matter of laches, it is hornbook doctrine that laches is a creation of equity and its application is controlled by equitable
considerations. Laches cannot be used to defeat justice or perpetrate fraud and injustice.35 Neither should its application be used
to prevent the rightful owners of a property from recovering what has been fraudulently registered in the name of another.36 The
equitable remedy of laches is, therefore, unavailing in this case.

Finally, petitioners claim that if the sale would be nullified, the nullification should extend only to the one-half share of Porfirio
Galvez37 but not to the share of Paz Galvez, who, by her overt act of selling the property, manifested her intention to dispose of
her part.

Notably, Porfirio Galvez's complaint was captioned "legal redemption with damages, cancellation of documents and
reconveyance of share."38 In his prayer, he sought for the reconveyance of his one-half share in the property and at the same time
be subrogated to the other half pertaining to Paz Galvez and sold to Carlos Tam after reimbursement of the amount which the
latter paid for the property.

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

ART. 1619. Legal redemption is the right to be subrogated, upon the same terms and conditions stipulated in the contract, in the
place of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is
transmitted by onerous title.

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

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

In the case of Hermoso v. Court of Appeals,39 this Court, in interpreting the provision of the law on legal redemption, held:

The purpose of Article 1067 (of the old Civil Code, now Article 1088 of the present Civil Code) is to keep strangers to the family
out of a joint ownership, if, as is often the case, the presence of outsiders be undesirable and the other heir or heirs be willing and
in a position to repurchase the share sold (De Jesus v. Manlapus, 81 Phil. 144). While there should be no question that an heir
may dispose his right before partition (Rivero v. Serrano [CA] 46 O.G. 642; Wenceslao v. Calimon, 46 Phil. 906; Hernaez v.
Hernaez, 32 Phil. 214), a co-heir would have had to pay only the price for which the vendee acquired it (Hernaez v. Hernaez,
Ibid.).

It is a one-way street. It is always in favor of the redemptioner since he can compel the vendee to sell to him but he cannot be
compelled by the vendee to buy the alienated property.

In another case, 40 this Court reiterated that:

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

The rule on redemption is liberally construed in favor of the original owner of the property and the policy of the law is to aid
rather than defeat him in the exercise of his right of redemption.41

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

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

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

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

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

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

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

A purchaser in good faith and for value is one who buys the property without notice that some other person has a right to or
interest in such property and pays its fair price before he has notice of the adverse claims and interest of another person in the
same property. So it is that the "honesty of intention" which constitutes good faith implies a freedom from knowledge of
circumstances which ought to put a person on inquiry.43

Suffice it to state that both the trial and appellate courts found otherwise as "Tam did not exert efforts to determine the previous
ownership of the property in question"44 and relied only on the tax declarations in the name of Paz Galvez.45 It must be noted
that Carlos Tam received a copy of the summons and the complaint on 22 September 1994. This notwithstanding, he sold the
property to Tycoon Properties, Inc. on 27 September 1994. Significantly, Carlos Tam is also an owner of Tycoon Properties, Inc.
to the extent of 45%.46 A notice of lis pendens dated 8 July 1997 filed with the Registry of Deeds of the Province of La Union
was inscribed on TCT No. T - 40390.47 Despite the inscription, Tycoon Properties, Inc. mortgaged the land to Far East Bank and
Trust Company for the sum of P11,172,600.48 All these attendant circumstances negate petitioners' claim of good faith.

Wherefore, premises considered, the decision of the Court of Appeals dated 28 August 2002 and its Resolution dated 14 April
2003 are Affirmed. Costs against petitioners.

SO ORDERED.

Petitioners proceed to describe when the period is reckoned and state that this occurs (1) when the trustee has performed
unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (2) such positive acts of repudiation have been
made known to the cestui que trust, and (3) the evidence thereon is clear and positive.

Presidential Decree No. 1529, known as the Property Registration Decree, Section 113 provides:

SEC. 113. Recording of instrument relating to unregistered lands. - No deed, conveyance, mortgage, lease, or other voluntary
instrument affecting land not registered under the Torrens system shall be valid, except as between the parties thereto, unless
such instrument shall have been recorded in the manner herein prescribed in the office of the Register of Deeds for the province
or city where the land lies.

(a) the Register of Deeds for each province or city shall keep a Primary Entry book and a Registration book. The Primary Entry
Book shall contain, among other particulars, the entry number, the names of the parties, the nature of the document, the date,
hour and minute it was presented and received. The recording of the deed and other instruments relating to unregistered lands
shall be effected by way of annotation onthe space provided therefor in the Registration Book, after the same shall have been
entered in the Primary Entry Book.

(b) If, on the face of the instrument, it appears that it is sufficient in law, the Register of Deeds shall forthwith record the
instrument in the manner provided herein. In case the Register of Deeds refuses its admission to record, said official shall advise
hte party in interest in writing of the ground or grounds for his refusal, and the latter may appeal the matter to the Commissioner
of Land Registration in accordance with the provisions of Section 117 of this Decree. It shall be understood that any recording
made under this section shall be without prejudice to a third party with a better right.

(c) After recording on the Record Book, the Register of Deeds shall endorse, among other things, upon the original of the
recorded instruments, the file number and the date as well as the hour and minute when the document was received for recording
as shown in the primary entry book, returning to the registrant or person in interest the duplicate of the instrument, with
appropriate annotation, certifying that he has recorded the instrument after reserving one copy thereof to be furnished the
provincial or city assessor as required by existing law.

(d) Tax sale, attachment and levy, notice of lis pendens, adverse claim and other instruments in the nature of involuntary dealings
with respect to unregistered lands, if made in the form sufficient in law, shall likewise be admissible to record under this section.

(e) For the services to be rendered by the Register of Deeds under this section, he shall collect the same amount of fees prescribed
for similar services for the registration of deeds or instruments concerning registered lands.49

In the case of Alzona V. Capunitan50 cited by the petitioner Tycoon Properties, while admittedly, the Court made a
pronouncement therein that an action for reconveyance based on implied or constructive trust prescribes in ten (10) years, the
court found that there was in the said case an express repudiation of the trust by the defendants-appellees who had consistently
repudiated the trust. The case therein dealt with a property registered under the Torrens system. Similarly, Medina v. Court of
Appeals,51 again cited by petitioner Tycoon simply made a pronouncement regarding the prescriptibility of action based on
implied or constructive trust but does not involve an unregistered land such as in the case at bar.
In the same manner, the citation by petitioner Tycoon of the case of Gonzales v. Intermediate Appellate Court,52 and the case
of Vda. De Esconde v. Court of Appeals,53 we find inapplicable as well, as the property involved therein is registered under the
Torrens System.

PEDRO GENEROSA, DECEASED, NOW SUBSTITUTED BY HIS HEIRS, VIDA R. GENEROSA, ROBERT R.
GENEROSA, EDMUNDO R. GENEROSA, PEDRO R. GENEROSA, JR., AMALIA R. GENEROSA, LIZA R. GENEROSA,
MELODY R. GENEROSA and FIDEL R. GENEROSA, Petitioners, v. PACITA PRANGAN-VALERA, Respondent.

DECISION

GARCIA, J.:

This recourse, styled as a "Partial Petition for Review on Certiorari," seeks the modification of the Decision 1 dated September
29, 2004 of the Court of Appeals (CA), as reiterated in its Resolution 2 of December 1, 2004, in CA-G.R. CV No. 79749,
reversing and setting aside an earlier decision of the Regional Trial Court (RTC) of Urdaneta City, Pangasinan, Branch 47, in an
action for annulment of documents, recovery of possession and damages with application for a writ of preliminary injunction
thereat commenced by the herein respondent Pacita Prangan-Valera against, among others, Pedro Generosa, now substituted by
his widow Vida R. Generosa and their children.

The petition is casts against the following factual backdrop:

Following the death of the spouses Maximo Soriano and Manuela Delatre, their two children, namely, Maria and Felipa, inherited
from them two (2) adjoining parcels of land with an aggregate area of 9,838 square meters, situated in Licsi, Manaoag,
Pangasinan and covered by Tax Declaration No. 9825 in the name of Maximo Soriano. One parcel has an area of 5,219 square
meters, while the other, an area of 4,619 square meters. On May 27, 1959, the sisters Maria and Felipa executed a Deed of
Extrajudicial Partition whereunder the bigger parcel was adjudicated to Maria while the smaller parcel went to Felipa.

The land subject of this case is the 5,219 square meter parcel representing Maria's share in the property left by the parents. It was
declared in Maria's name under Tax Declaration No. 17723 (1960) and 17730.

Maria was married to Eleuterio Valera, while her sister Felipa, to Fidel Generosa.

Maria and Eleuterio were childless, while Felipa and Fidel had three (3) children, namely, Alfonso, Pedro and Florencio, all
surnamed Generosa.

Maria died on February 8, 1971, while her sister Felipa, on June 3, 1960.

On October 18, 1984, or long after Maria's death, her husband Eleuterio married the herein respondent, Pacita Prangan-Valera.
On March 31, 1989, Eleuterio executed an affidavit adjudicating unto himself as sole heir the property left behind by his
deceased first wife Maria. Consequently, the tax declaration formerly in the name of Maria was cancelled and replaced by Tax
Declaration No. 4528 in the name of Eleuterio.

On October 17, 1990, Eleuterio died, survived by his second wife, Pacita Prangan-Valera.

On November 5, 1990, the brothers Alfonso, Pedro and Florencio, all surnamed Generosa (children of Maria's sister Felipa)
executed a document entitled "Deed of Extrajudicial Partition With Sale," therein stating that they are the sole heirs of Eleuterio
Valera and as such succeeded to his rights, interest and ownership of the property left by Eleuterio's first wife, Maria. In the same
document, the brothers Alfonso and Florencio sold their alleged share in the property to their brother Pedro and the latter's wife,
Vida Rosario Generosa. Pursuant to said document, Pedro and his wife, Vida, obtained a tax declaration in their own names
covering the entire parcel of what used to be Maria's share in the property of her parents.

Such was the state of things when, on November 25, 1991, in the RTC of Urdaneta City, herein respondent Pacita Prangan-
Valera filed the complaint in this case against the brothers Pedro, Alfonso and Florencio. Docketed in said court as Civil Case
No. V-5268 and raffled to Branch 47 thereof, the complaint prayed for the annulment of the aforesaid Deed of Extrajudicial
Partition With Sale executed by the defendant brothers and the recovery of possession and ownership of the property in dispute,
plus damages, attorney's fees and litigation expenses.

In gist, the complaint alleged that the brothers Alfonso, Pedro, and Florencio were never legitimate heirs of the plaintiff's
deceased husband, Eleuterio Valera, nor are they related to the latter; that when her husband's first wife Maria died in 1971,
Eleuterio continued in possession of the subject property even after he married her (plaintiff) in 1984; that when Eleuterio died in
1990, she continued in possession of the same property until her possession thereof was interrupted when the defendant brothers
surreptitiously took possession of the property in 1991, after arrogating unto themselves the very same property on the basis of a
falsified Deed of Extrajudicial Partition With Sale wherein said defendants made it appear that they are the sole heirs of her
husband, Eleuterio Valera; that on account of the misrepresentation committed by the three, she filed against them a criminal
complaint for falsification of public document, docketed as Criminal Case No. D-11039; that the brothers Alfonso and Florencio
were convicted in said case and subsequently applied for probation while their brother Pedro was dropped from the case on
account of his death during the pendency thereof.

In their Answer, the defendant brothers basically sought refuge on their claim of prescription, alleging that they have been in
possession of the disputed property for more than thirty (30) years.

During the pendency of the suit, defendant Pedro Generosa died and was accordingly substituted by his widow, Vida Generosa,
and their children, to wit: Robert, Edmundo, Pedro, Jr., Amalia, Liza, Melody and Fidel, all surnamed Generosa, the petitioners
herein.

In a decision 3 dated February 7, 2003, the RTC found for the plaintiff, now respondent Pacita Prangan-Valera. It annulled the
Deed of Extrajudicial Partition With Sale executed by the three brothers and awarded the entire property subject of the suit to the
respondent, with damages, attorney's fees and litigation expenses. More specifically, the decision dispositively reads:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. The Deed of Extra-Judicial Partition with sale dated 5 November 1990 (Exh. "C") is hereby ANNULLED and declared NULL
and VOID;

2. Tax Declaration No. 5428 in the names of Pedro Generosa and Vida Rosario (Exh. "E") is hereby CANCELLED and
ANNULLED;

3. Tax Declaration No. 4528 (Exh. "C") in the name of Eleuterio Valera is hereby ordered to be reinstated. The Municipal
assessor of Manaoag, Pangasinan is ordered to reinstate the same in the name of Eleuterio Valera. Likewise, the Provincial
Assessor of the Province of Pangasinan is directed and ordered to reinstate the same in the name of Eleuterio Valera;

4. Defendants Alfonso Generosa, Florencio Generosa, Vida Generosa and the heirs of deceased Pedro Generosa, namely: Beda
Generosa, Robert Generosa, Edmundo Generosa, Pedro Generosa, Jr., Amalia Generosa, Liza Generosa, Melody Generosa and
Fidel Generosa, are directed to deliver, reconvey the possession and ownership of that property located in Licsi, Manaoag,
Pangasinan containing an area of 5,319 square meters, more or less, bounded on North by Maximo Soriano; East by Road; South
by Pedro Rous and Crispin Buessa; West by Mariano Soriano, declared under Tax Decl. No. 4528 and assessed at P1,900.00 to
the plaintiff;

5. Ordering defendants to pay plaintiff the sum of P10,000.00 as attorney's fees, P5,000.00 as expenses of litigation and the
additional sum of P30,000.00 for and as moral damages.

Costs against the defendants.

SO ORDERED.

From the aforementioned decision of the trial court, the defendants, now petitioners, went on appeal to the CA whereat their
appellate recourse was docketed as CA-G.R. CV No. 79749.

As stated at the threshold hereof, the CA, in its decision 4 of September 29, 2004, reversed and set aside that of the trial court,
thus:

WHEREFORE, premises considered, the present appeal is hereby GRANTED and the appeal decision in Civil Case No. U-5268
is hereby REVERSED and SET ASIDE. A new judgment is hereby entered declaring that the legal heirs of Maria Soriano Valera
are her surviving spouse, the late Eleuterio Valera (succeeded by his widow, herein plaintiff-appellee), who is entitled to one-half
(1/2) of the subject property; and her brothers (sic), Alfonso, Pedro (deceased) and Florencio, or their children, herein appellants,
who are entitled to the other half of the property.

No pronouncement as to costs.

SO ORDERED.

In decreeing the division of the subject property between the petitioners and the respondent in equal shares, the CA ruled that the
conviction of the brothers Alfonso and Florencio in the criminal case for falsification of public document filed against them and
their brother Pedro at the instance of the respondent "is a concern of the authorities" - and "will not result in the nullification of
their rights as co-owners [of the respondent] where such act does not fall under any of the legal grounds for disqualification to
succeed as heirs under Articles 1027 and 1032 of the Civil Code." To the CA, the rightful heirs of Maria Soriano-Valera to whom
the property involved in the case originally belonged are, on the one hand, the petitioners herein, in representation of Maria's
nephews, and on the other hand, her deceased husband Eleuterio Valera, represented by his second wife, the herein respondent
Pacita Prangan-Valera, which two (2) sets of heirs are entitled to - each of the property left by Maria.

In time, the petitioners moved for a reconsideration claiming that to them alone belong the entire property left by Maria. With
their motion having been denied by the CA in its Resolution of December 1, 2004, 5 the petitioners are now with this Court via
the present recourse on their lone submission that -

THE HONORABLE COURT OF APPEALS ERRED IN NOT RULING THAT PETITIONERS ARE THE OWNERS OF THE
PROPERTY WITH RESPECT TO THE ONE-HALF (1/2) AWARDED TO RESPONDENT BY ACQUISITIVE
PRESCRIPTION HAVING BEEN IN POSSESSION THEREOF FOR MORE THAN TWENTY (20) YEARS.

No similar recourse was taken by the respondent.

We DENY.

The evidence on record belies the petitioners' pretension of possession for more than twenty (20) years. As found by the trial
court and borne by the evidence:

xxx

"It was only in 1991, after the death of [respondent's] husband that the said defendants [i.e., the brothers Alfonso, Pedro and
Florencio] on the basis of the falsified deed of extra-judicial partition with sale took possession of the property. The claim that
they were in possession of the property for more than thirty (30) years appears unsupported. In fact, their own evidence
(EXHIBITS "5" and "6") belies their claims of prescription and possession of the property. It was only in 1971, after the death of
MARIA, former wife of ELEUTERIO, that defendants were entitled to successional rights over the property in question in
conjunction with ELEUTERIO as surviving spouse.

xxx

It appearing that the property under litigation was transferred in the names of the defendant spouses [Pedro Generosa and Vida
Generosa] in 1991 and the action for annulment of document and reconveyance of ownership and recovery of possession was
filed in 1993, the action has not yet prescribed." (Words in brackets supplied.)

In any event, and as correctly pointed out by the CA, acquisitive prescription, as laches, is based on the doctrine equity. It cannot
be invoked to defeat justice or to perpetuate an injustice. Equity, which has been aptly described as "justice outside legality,"
should be applied only in the absence of, and never against, statutory law. Aequetas nunguam contravenit legis.6 The positive
mandate of Article 494 7 of the Civil Code conferring imprescriptibility to actions of a co-owner or co-heir against his co-owners
or co-heirs should preempt and prevail over all abstract arguments based only on equity. Certainly, laches cannot be set up to
resist the enforcement of an imprescriptible legal right, and the herein respondent can validly vindicate her inheritance despite the
lapse of time.

To reiterate, the herein parties are co-owners of the property subject of the controversy. Surely, 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 begins to run.8 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 shadow of doubt.9 This is not the case here. To stress, the petitioners' claim that they were in
possession of the property for more than thirty (30) years appears unsupported. In fact, their own evidence belied their claim of
prescription and possession of the property. As found by the trial court, it was only in 1991, after the death of the respondent's
husband Eleuterio that the petitioners on the basis of the falsified deed of extrajudicial partition with sale took possession of the
property. As it is, the petitioners could neither invoke acquisitive prescription because their mode of acquisition was illegal and
void. Ordinary acquisitive prescription requires possession of things in good faith and with just title of the time fixed by law.

It may also be added that the possession of co-owners is like that of a trustee. In order that his possession may be deemed adverse
to the cestui que trust or the other co-owners, the following requisites must concur: (1) that he has performed unequivocal acts of
repudiation amounting to an ouster of the cestui que trust or other co-owners, (2) that such positive acts of repudiation have been
made known to the cestui que trust or other co-owners, and (3) that the evidence thereon must be clear and convincing.
Even granting, arguendo, that the falsified deed of extrajudicial partition with sale could be taken as a positive act of repudiation
of the co-ownership existing between the respondent and the petitioners' predecessor-in-interest, there is clearly no showing that
prescription has set in, given the fact the property under litigation was transferred in the names of the petitioners in 1991 and the
action for annulment of documents, reconveyance of ownership and recovery of possession was filed by the respondent in 1991.
The action has not yet prescribed. Article 1456 of the Civil Code provides that if a property is acquired through mistake or fraud,
the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the
property comes. This provision, in conjunction with Article 1144, gives the respondent a prescriptive period of ten years, for an
obligation under an implied trust is one created by law. Accordingly, an action for reconveyance of a parcel of land based on an
implied or constructive trust prescribes in ten years, the point of reference being the date of the registration of the deed of sale or
the date of the issuance of the certificate of title over the property.

All told, the Court rules and so hold that the CA correctly adjudicated the disputed parcel of land in such a way that one-half
(1/2) thereof shall pertain to the respondent as successor of Eleuterio Valera, while the other one-half (1/2) to the petitioners, in
accordance with Article 1001 of the Civil Code.10

WHEREFORE, petition is DENIED. The assailed decision of the Court of Appeals is hereby AFFIRMED in toto.

Cost against petitioners.