HEIRS OF P.M. URETA SR. vs. HEIRS OF L.M.

URETA
G.R. No. 165748,
14 September 2011

FACTS:

● Alfonso Ureta had 14 children, including Policronio. The children of

Policronio (Heirs of Policronio), are opposed to the validity of the
Extrajudicial Partition.
● On October 1969, in order to reduce the inheritance taxes, Alfonso
executed four (4) Deeds of Sale in favor of his children including
Policronio.
● Since the sales were only made for taxation purposes and no monetary
consideration was given, Alfonso continued to own, possess and enjoy
the lands and their produce.
● On October 11, 1972, Alfonso died and his children acted as the
administrator of his father’s estate.
● On November 22, 1974, Policronio died. The subject land under the
deed of sale was never taken possession by Policronio nor his heirs.
● On April 19, 1989, Alfonso’s heirs executed a Deed of Extra-Judicial
Partition, which included all the lands that were covered by the four
(4) deeds of sale that were previously executed by Alfonso for taxation
purposes. Conrado, Policronio’s eldest son, representing the Heirs of
Policronio, signed the Deed of Extrajudicial Partition on behalf of his
co-heirs.
● On July 30, 1995, the Heirs of Policronio allegedly learned about the
Deed of ExtraJudicial Partition involving Alfonso’s estate when it was
published in the July 19, 1995 issue of the Aklan Reporter.
● Believing that the six parcels of land belonged to their late father, and
excluded from the Deed of Extrajudicial Partition, the Heirs of
Policronio sought to amicably settle but despite earnest efforts, the
Heirs of Policronio filed a Complaint for Declaration of Ownership,
Recovery of Possession over the subject land.

ISSUE:
Whether or not the Deed of Extrajudicial Partition was valid.

RULING:

Provi - does not pertain to a simulated sale

It is valid.
The Deed of Sale entered between Alfonso and Policronio is void for being an
absolutely simulated sale. No actual consideration or money was given and
there was no actual intent to enter into a sale. It was merely to avoid tax
purposes.

The Deed of Extrajudicial Partition did not need an SPA because partition
among heirs is not legally deemed a conveyance of real property resulting in
change of ownership. It is not a transfer of property from one to the other,
but rather, it is a confirmation or ratification of title or right of property that
an heir is renouncing in favor of another heir who accepts and receives the
inheritance. Partition is not an act of strict dominion which requires an SPA.
In fact, as between the parties, even an oral partition by the heirs is valid if
no creditors are affected. The requirement of a written memorandum under
the statute of frauds does not apply to partitions effected by the heirs where
no creditors are involved.

In the case of Badillo v. Ferrer, the court held that a deed of extrajudicial
partition is not voidable by lack of parties to give consent but unenforceable
as an unauthorized contract in 1403(1).

However, the Deed of Extrajudicial Partition is not unenforceable but, in fact,

valid, binding and enforceable against all the Heirs of Policronio because of
several circumstances which shows they gave their consent to Conrado to
sign on their behalf such as that Extra-Judicial Partition was signed on 1989
but the siblings only came to know about it 1995, 5 years after, and Conrado
didn’t inform his siblings during such span; Conrado retained possession of
land under the Extra-Judicial Partition; 1 year after the sale, the Heirs of
Policronio executed an SPA to have the land under the Extra-Judicial
Partition be the subject of mortgage.

Such acts shows the Heirs of Policronio were aware of the said Partition and
the vitiation of consent is a mere afterthought

RATIO:

The Deed of Extrajudicial Partition requires an SPA if an heir is signing in

representation of the other co-heirs, otherwise it will be unenforceable.
However the Deed of Extrajudicial Partition is not unenforceable in the case
at bar given the circumstance of the case showed the co-heirs were aware or
consented to the signing.