NILO MERCADO vs.

CA and AUREA MERCADO

G.R. No. 108952 January 26, 1995

FACTS

Aurea seeks partition and reconveyance to her of one-half of a real property in QC,
registered in the name of Nilo. Aurea is legitimate sister. Before she left for US in 1964 she gave
her brother money to buy this lot but she was not given any receipt.
Nilo testified that the lot was bought out of his money and a portion borrowed from Aurea
which he used to pay the downpayment. The rest was through SSS. It was however foreclosed
by SSS. Then he redeemed the property, got a certificate of redemption after the cancellation of
the mortgage with SSS.
As proof of his ownership, he has the tax declaration, TCT and real property tax bill
receipts.

ISSUES
Who owns the property?
Whether the mortgage of the subject property to the SSS, its foreclosure and subsequent
redemption by the petitioner extinguished private respondent's co-ownership.
“. . . 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, the petitioner borrowed money from SSS and mortgaged the
subject property without the knowledge and consent of his co-owner. Necessarily, Aurea could
not have helped in the payment of loan nor could she have redeemed it. In other words, Aurea
did not voluntary relinquish at any period of time her pro-indiviso share in the subject property.
Petition denied.
Bailon-Casilao v. CA (1988)
Petitioners: Delia Bailon-Casilao, Luz Paulino-Ang, Emma Paulino-Ybanez, Nilda
Paulino-Tolentino, and Sabina Bailon Respondents: CA and Celestino Afable
Ponente: Cortes, J.

 The fate of petitioners' claim over a parcel of land rests ultimately on a determination of
whether or not said petitioners are chargeable with such laches as may effectively bar
their present action.
 There is a parcel of land in the names of the Bailons (Rosalia, Gaudencio, Sabina
Bernabe, Nenita and Delia) as co- owners, each with a 1/6 share.
o Gaudencio and Nenita are now dead, (Nenita being represented in this case by
her children)
o Bernabe went to China and had not been heard from since
 It appears that Rosalia and Gaudencio sold a portion of the land to Donato Delgado.
 Rosalia alone, then sold the remainder of the land to Ponciana Aresgado de Lanuza.
o On the same date, Lanuza acquired from Delgado land which the Delgado had
earlier acquired from Rosalia and Gaudencio.
 Husband John Lanuza, acting under a special power of attorney given by his wife,
Ponciana, sold the two parcels of land to Celestino Afable, Sr.
 In all these transfers, it was stated in the deeds of sale that the land was not
registered under the provisions of Act No. 496 when the fact is that it is.
o It appears that the land had been successively declared for taxation first, in the
name of Ciriaca Dellamas, mother of the co-owners, then in the name of Rosalia
Bailon, then in that of Donato Delgado, then in Ponciana de Lanuza's name,
and finally in the name of Celestino Afable, Sr.
 The petitioners in this case, the Bailons, filed a case for recovery of property against
Celestino Afable.
 In his answer, Afable claimed that he had acquired the land in question through
prescription and said that the Bailons are guilty of laches.
 LC declared Afable co-owner because he validly bought 2/6 of the land (the shares of
Rosalia and Gaudencio)
 CA affirmed. Prescription does not apply against the Bailons because they are co-
owners of the original sellers. But, an action to recover may be barred by laches.
o CA held the Bailons guilty of laches and
dismissed their complaint Issue: Applicability of the doctrine of
laches
Ratio:
 Initially, a determination of the effect of a sale by one or more co-owners of the entire
property held in common without the consent of all the co-owners and of the appropriate
remedy of the aggrieved co-owners is required.
 The rights of a co-owner of a certain property are clearly specified in NCC 493:
 Art. 493. Each co-owner shall have the full ownership of his part and of the acts and
benefits pertaining thereto, and he may therefore alienate assign or mortgage it and
even substitute 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
 SC has already ruled in other cases that even if a co-owner sells the whole property
as his, the sale will affect only his own share but not those of the other co-owners
 who did not consent to the sale
o By virtue of the sales made by Rosalia and Gaudencio, which are valid with
respect to their proportionate shares, and the subsequent transfers which
culminated in the sale to private respondent Celestino Afable, Afable thereby
became a co-owner of the disputed parcel of land
 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.
o However, only the rights of the co-owner-seller are transferred, thereby
making the buyer a co-owner of the property.

Re: Proper action

 The proper action in cases like this is not for the nullification of the sale or for the
recovery of possession but the division of the common property
 Neither recovery of possession nor restitution can be granted since the buyers
are legitimate possessors in joint ownership of the common property claimed

Re: Prescription
 Here, prescription cannot be invoked.
 Pursuant to NCC 494, no co-owner shall be obliged to remain in the co-ownership.
Such co-owner may demand at anytime the partition of the thing owned in
common, insofar as his share is concerned.
 In Budiong v. Bondoc , SC has interpreted that provision to mean that the action for
partition is imprescriptible or cannot be barred by prescription. For NCC 494 explicitly
declares: No prescription shall lie in favor of a co-owner or co- heir so long as he
expressly or impliedly recognizes the co-ownership.
 Also, the disputed parcel of land being registered under the Torrens System, the
express provision of Act No. 496 that “no title to registered land in derogation to that of
the registered owner shall be acquired by prescription or adverse possession” is
applicable.
 Prescription will not lie in favor of Afable as against the Bailons who remain the registered
owners of the parcel of land.
Bailon-Casilao v. CA
“Sister sold co-owned land without coowner’s consent”
Remedies of coowners when sale made without their consent: PARTITION, NOT RECOVERY OF
POSSESSION
FACTS:
The petitioners Bailon are co-owners, each with a 1/6 share.

Rosalia and Gaudencio Bailon sold a portion of the land to Delgado.

Rosalia alone sold a portion to Lanuza. Lanuza acquired from Delgado the latter’s portion.
Lanuza then sold the land to respondent Afable. Rosalia’s siblings filed a case to recover the
property. The main issue before the lower courts was prescription and laches

CA affirmed the decision of the lower court insofar as it held that prescription does not lie against
plaintiffs because they are co- owners of the original vendors. However, although registered
property cannot be lost by prescription, nevertheless, an action to recover it may be barred by
laches. It held the petitioners guilty of laches and dismissed the case.

ISSUE:
W/N petitioners are barred by laches (NO)
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 but the DIVISION of the
common property as if it continued to remain in the possession of the co-owners who
possessed and administered it

The appropriate recourse of co-owners in cases where their consent were not secured in a sale
of the entire property as well as in a sale merely of the undivided shares of some of the co-
owners is an action for PARTITION under Rule 69.

Neither recovery of possession nor restitution can be granted since the defendant buyers are
legitimate proprietors and possessors in joint ownership of the common property claimed. 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.

Prescription and laches:

Article 494 of the Civil Code explicitly declares: "No prescription shall lie in favor of a co-owner
or co- heir so long as he expressly or impliedly recognizes the co-ownership."

Prescription is unavailing not only against the registered owner but also against his hereditary
successors, because they merely step into the shoes of the decedent by operation of law and
are merely the continuation of the personality of their predecessor- in-interest.

Laches is likewise unavailing as a shield against the action of herein petitioners.

The mere fact of delay is insufficient to constitute, laches. It is required that

(1) complainant must have had knowledge of the conduct of defendant or of one under whom he
claims and (2) he must have been afforded an opportunity to institute suit.

While there was delay in asserting petitioners' rights, such delay was not attended with any
knowledge of the sale nor with any opportunity to bring suit. They were not afforded an
opportunity to bring suit inasmuch as they were kept in the dark about the transactions entered
into by their sister.
Del Campo v. CA

FACTS:

The Bornales (Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita) were the
original co-owners of a lot in Capiz.
Salome had sold her 4/16 share to Daynolo with Salome, Consorcia and Alfredo signing the Deed
of Absolute Sale, which had described the metes and bounds of the property. Daynolo
immediately took possession and mortgaged the portion to Regalado.
Simplicio Distajo, heir of Daynolo, had paid the mortgaged debt and redeem the lot from
Regalado, who executed a Deed of Discharge of Mortgage in favor of Daynolo’s heirs (Simplicio
Distajo, Rafael Distajo and Teresita Distajo). They sold the redeemed portion to the spouses Del
Campo and Quiachon.

Meanwhile, Regalado had cause the reconstitution of the OCT initially reflecting the share of the
Bornales but the title was later transferred to Regalado, who had the entire property subdivided
and titled into smaller lots.

The spouses Del Campo brought this complaint for the repartition, resurvey and reconveyance of
lot against the heirs of Regalado (deceased).
 Owned the portion of land erroneously included in the TCT in the name of Regalado
 Had occupied the lot as a residential dwelling ever since their purchase of it from the
Distajos
 Had declared the land for tax purposes and paid the corresponding taxes
 Presented the Deed of Absolute Sale executed between Soledad and Salome, Deed of
Mortgage and Deed of Discharge of Mortgage signed by Regalado and Deed of Absolute
sale showing their purchase

The trial court dismissed the complaint.

 Salome could alienate her pro-indivisio share but could not have validly sold an undivided
portion of the lot by metes and bounds to Soledad, from whom the Del Campos had
derived their title.
 Del Campos could not have a better right to the property even if they were in physical
possession and had declared for tax purposes because mere possession cannot defeat
the right of Regalado, who had a Torrens title.

CA had affirmed the decision.

ISSUES:
W/N a sale by a co-owner of a physical portion of an undivided property held in common is valid?

HELD:

YES. A sale by a co-owner of a physical portion of an undivided property held in common is valid
but only up to her proviso share.

RATIO:
Re: Argument of Bailons that as to the children who represent their deceased mother, Nenita,
prescription lies
 It is argued, that as to the children who are not the registered co-owners but merely
represent their deceased mother, prescription lies. (citing Pasion v. Pasion: "the
imprescriptibility of a Torrens title can only be invoked by the person in whose
name the title is registered" and that 'one who is not the registered owner of a
parcel of land cannot invoke imprescriptibility of action to claim.'
 Reliance on the previous case is wrong.
o The ruling there applies only against transferees other than direct issues or
heirs or to complete strangers. The reason for that is: if prescription is
unavailing against the registered owner, it must be equally unavailing against
the owner’s hereditary successors, because they merely step into the shoes of
the decedent

Re: Laches
 Laches is also unavailing as a shield against the action of petitioners Bailon.
o There are 4 basic elements of laches
1) Conduct on the part of the defendant or of one under whom he claims,
giving rise to the situation of which complaint is made and for which the
complainant seeks a remedy;
2) Delay in asserting the corporations complainant's rights, the complainant
having had knowledge or notice of the defendant's conduct and having
been afforded an opportunity to institute suit;
3) Lack of knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his suit; and,
4) Injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred
o First and last elements are present.
o Second and third elements are missing.
 The second element speaks of delay in asserting the complainant's rights.
o However, the mere fact of delay is insufficient to constitute, laches.
o It is required that (1) complainant must have had knowledge of the conduct of
defendant or of one under whom he claims and (2) he must have been
afforded an opportunity to institute suit.
o This court has pointed out that laches is not concerned with the mere lapse of
time.
 Laches is defined as the failure or neglect, for an unreasonable length of time to do
that which by exercising due diligence could or should have been done earlier; it is
negligence or omission to assert a right within a reasonable time warranting a
presumption that the party entitled to assert it either has abandoned it or declined to
assert it.
o The doctrine of "laches" or of "stale demands" is based upon grounds of public
 policy which requires for the peace of society, the discouragement of stale
claims and unlike the statute of limitations, is not a mere question of time but is
principally a question of inequity or unfairness of permitting a right or claim to
be enforced or asserted.
 While there was delay in asserting the Bailon’s rights, such delay was not attended
with any knowledge of the sale nor with any opportunity to bring a suit.
o In the first place, the Bailons had no notice of the sale made by their eldest
sister.
o In the second place, they were not afforded an opportunity to bring suit
because they were kept in the dark about the transactions entered into by
their sister. It was only when Delia returned that she found out about the sales
and immediately, she and her siblings filed the present action for recovery of
property.
 The third element of laches is absent.
o There was no lack of knowledge
o It is actually Afable who is guilty of bad faith in purchasing the property as he
knew that the property was co- owned by six persons and yet, there were only
two signatories to the deeds of sale and no special authorization to self was
granted to the two sellers by the other co-owners.
 A person dealing with a registered land has a right to rely upon the face of the Torrens
certificate of title and to dispense with the need of inquiring further, except when the
party concerned has actual knowledge of facts and circumstances that would impel a
reasonably cautions man to make such inquiry.
 Also, petitioners Bailon are relatives of his wife. As a gesture of good faith, he
should have contacted the Bailons who were still listed as co-owners in the
certificate of title which was already in his possession even before the sale.
o In failing to exercise even a minimum degree of ordinary prudence, he is
deemed to have bought the lot at his own risk.
o Hence any prejudice or injury that may be occasioned to him by such sale must
be borne by him.

Decision set aside