[G.R. No. 104813. October 21, 1993.

]
Heirs of Olviga v CA

SYLLABUS
1. CIVIL LAW; PRESCRIPTION OF ACTION; RULE IN
CASE OF AN ACTION FOR RECONVEYANCE OF A
PARCEL OF LAND BASED ON IMPLIED OR
CONSTRUCTIVE TRUST; EXCEPTION. With regard to the
issue of prescription, this Court has ruled a number of times
before that an action for reconveyance of a parcel of land based
on implied or constructive trust prescribes in ten years, the point
of reference being the date of registration of the deed or the date
of the issuance of the certificate of title over the property (Vda. de
Portugal vs. IAC, 159 SCRA 178). But this rule applies
only when the plaintiff is not in possession of the property, since
if a person claiming to be the owner thereof is in actual
possession of the property, the right to seek reconveyance, which
in effect seeks to quiet title to the property, doe not prescribe.
2. ID.; ID.; RULE FOR ACTIONS TO QUIET TITLE OVER A
PROPERTY; SAPTO vs. FABIANA, (103 PHIL. 683) CITED.
In Sapto vs. Fabiana, 103 Phil. 683, 686-687, appellants'
predecessors sold to appellees in 1931 a parcel of land. The sale
was approved by the Provincial Governor of Davao but was never
registered. Possession of the land was, however, transferred to
Fabiana and the latter has been in possession thereof from 1931
up to the present. The widow and children of Samuel Sapto filed
an action to recover the land. This Court in affirming the validity
of the sale in favor of appellee (Fabiana) held: "No enforcement
of the contract is in fact needed, since the delivery of possession
of the land sold had consummated the sale and transferred title to
the purchaser, registration of the contract not being indispensable
as between the parties. Actually the action for conveyance was
one to quiet title, i.e., to remove the cloud cast upon appellee's
ownership by the refusal of the appellants to recognize the sale
made by their predecessors. This action accrued only when
appellants initiated their suit to recover the land in 1954.
Furthermore, it is an established rule of American jurisprudence
(made applicable in this jurisdiction by Art. 480 of the New Civil
Code) that actions to quiet title to property in the possession of
the plaintiff are imprescriptible (44 Am. Jur. p. 47; Cooper vs.
Rea, 39 L.R.A. 930; Inland Empire Land Co. vs. Grant County,
138 Wash. 439, 245 Pac. 14)."
3. ID.; POSSESSION; ACTUAL POSSESSOR OF A PIECE OF
LAND CLAIMING TO BE OWNER THEREOF MAY WAIT
UNTIL HIS POSSESSION IS DISTURBED OR HIS TITLE IS
ATTACKED; REASON THEREFOR. In Faja vs. Court of
Appeals, 75 SCRA 441, 446, this Court likewise reiterated the
ruling that: ". . . There is settled jurisprudence that one who is in
actual possession of a piece of land claiming to be owner thereof
may wait until his possession is disturbed or his title is attacked
before taking steps to vindicate his right, the reason for the rule
being, that his undisturbed possession gives him a continuing
right to seek the aid of a court of equity to ascertain and
determine the nature of the adverse claim of a third party and its
effect on his own title, which right can be claimed only by one
who is in possession. No better situation can be conceived at the
moment for Us to apply this rule on equity than that of herein
petitioners whose mother, Felipa Faja, was in possession of the
litigated property for no less than 30 years and was suddenly
confronted with a claim that the land she had been occupying and
cultivating all these years, was titled in the name of a third
person. We hold that in such a situation the right to quiet title to
the property, to seek its reconveyance and annul any certificate of
title covering it, accrued only from the time the one in possession
was made aware of a claim adverse to his own, and it is only then
that the statutory period of prescription commences to run against
such possessor." In the case at bar, private respondents and their
predecessors-in-interest were in actual possession of the property
since 1950. Their undisturbed possession gave them the
continuing right to seek the aid of a court of equity to determine
the nature of the adverse claim of petitioners, who in 1988
disturbed their possession.
4. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF
THE LOWER COURTS; RULE AND EXCEPTION. The
Court of Appeals and the trial court correctly based their findings
of fact on the testimonies of the parties and their witnesses. It can
be said therefore that those conclusions are based on substantial
evidence. No cogent reason exists to disturb them. As reiterated
in a long line of decisions, it is beyond the province of this Court
to make its own findings of facts different from those of the trial
court as affirmed by the Court of Appeals (Vda. de
Cailles vs. Mayuga, 170 SCRA 347; New Owners/Management
of TML Garments, Inc. vs. Zaragosa, 170 SCRA 563). In
petitions for review of decisions of the Court of Appeals, the
jurisdiction of this Court is confined to a review of questions of
law, except when the findings of fact are not supported by the
records or are so glaringly erroneous as to constitute a serious
abuse of discretion (Lim vs. Court of Appeals, 158 SCRA 307;
Samson vs. CA, 141 SCRA 194; Republic vs. IAC, 144 SCRA
705). The case at bar does not fall under the exceptions.

This is a petition to review the decision of the Court of Appeals in
CA-G.R. CV No. 30542, affirming in toto the decision of the
Regional Trial Court of Calauag, Quezon ordering the defendants,
heirs of Jose Olviga (petitioners herein), to reconvey the land in
dispute to the plaintiffs, heirs of Cornelia Glor (now private
respondents), and to pay attorney's fees and the costs of
suit. LexLib
This case started as an action (Civil Case No. C-883) filed in the
Regional Trial Court of Calauag, Quezon by Angelita Glor and
her children against the heirs of Jose Olviga for reconveyance of a
parcel of land, measuring 54,406 square meters (5.44 has), more
or less, known as Lot 13, Pls-84 of the Guinayangan Public Land
Subdivision. LLphil
The court, after due trial, rendered judgment in favor of the
private respondents, the dispositive portion of which reads:
"WHEREFORE, and considering the foregoing
judgment is hereby rendered in favor of the
PLAINTIFFS and against the defendants as heirs of Jose
Olviga to reconvey the land in dispute to the plaintiffs as
heirs of Cornelio Glor Sr.; condemning the defendants
jointly and severally to pay the plaintiffs attorneys fees
of P5,000.00 plus the costs of the suit. The counterclaim
interposed by the defendants is dismissed." (p. 12,
Rollo.)
The judgment was appealed to the Court of Appeals by the
defendants who raised several factual issues regarding possession
and fraud, as well as legal issues involving prescription and
purchaser in good faith, but the appellate court dismissed the
appeal and affirmed in toto the decision of the trial court. LexLib
It was established by the evidence on record that the land in
question was, in 1950, still forest land when Eutiquio Pureza, then
only twelve years old, and his father cleared and cultivated it. In
1954, they introduced improvements such as, coconut trees,
jackfruit, mangoes, avocado and bananas. When the area was
released for disposition, the Bureau of Lands surveyed the same
in 1956 in the name of Eutiquio Pureza. Since then, the land has
been known as Lot 13, Pls-84 of the Guinayangan Public Land
Subdivision. Godofredo Olviga, a son of Jose Olviga then living
with the latter, protested the survey but only with respect to a one-
half-hectare portion "sa dakong panulukan ng Amihanan-
Silanganan." This protest or "tutol" (Exh. B) of Godofredo
Olviga, brother of petitioners Virgilio Olviga and Lolita Olviga
Olila, is of public record in the Bureau of Lands (Exh. B). In said
document, Godofredo Olviga expressly admitted that the lot
belonged to Eutiquio Pureza, except the 1/2 hectare portion
claimed by him (Godofredo) which was included in the survey of
Pureza's Lot 13.
In 1960, Eutiquio Pureza filed a homestead application over Lot
13. Without his application having been acted upon, he
transferred his rights in said lot to Cornelio Glor in 1961. Neither
the homestead application of Eutiquio nor the proposed transfer
of his rights to Cornelio Glor was acted upon by the Director of
Lands for reasons that the records of the Bureau of Lands do not
disclose. LLpr
In 1967, Jose Olviga obtained a registered title for said lot in a
cadastral proceeding, in fraud of the rights of Pureza and his
transferee, Cornelio Glor and his family, who were the real and
actual occupants of the land.
What must have happened, as found by the Court of Appeals, is
that since Cornelio Glor, Sr. was sickly, and his wife (now
widowed) Angelita Glor, was unschooled, they failed to follow up
Pureza's homestead application over Lot 13 in the cadastral
proceedings in the Municipal Court of Guinayangan Public Land
Subdivision, Pls-84, Case 1 (Philcusa-Foa). In fact, they were not
aware of the proceedings. Angelita Glor testified that no notice
was ever posted on Lot 13 about the proceedings nor did anyone,
not even the barangay captain, tell her about them. Neither did
she receive any notice from the court sheriff or any court
employee. This non-posting of the notice of the cadastral hearing
on the land, or in the barangay hall, was confirmed by petitioner
Virgilio Olviga himself who testified that he did not notice any
papers posted on the property in question (tsn., October 18, 1990,
pp. 83-84). On the other hand, petitioners' father, Jose Olviga,
claimed both Lots 12 and 13, which are adjoining lots, in the
same cadastral proceedings. He falsely omitted in his answer
mention of the fact that other persons were in possession of, and
claiming adverse interest in, Lot 13 and that the land had been
surveyed for Eutiquio Pureza, the former occupant who sold his
interests to private respondents' parent, Cornelio Glor, in 1961.
Glor was Olvigas' neighbor. As a result, both Lots 12 and 13 were
declared as uncontested in the name of Jose Olviga (Exh. 7), and
were registered in his name in 1967 in Original Certificate of
Title, No. 0-12713 (Exh. 5). In 1971, Olviga requested that OCT
No. 0-12713 be split into two (2) TCT's, one each for the two (2)
lots. TCT Nos. T-103823 and T-103824 were issued for lots 12
and 13, respectively. Jose Olviga later transferred Lot 13 to his
son-in-law, Jaime Olila and daughter, Lolita Olviga resulting in
the cancellation of TCT No. T-03824 and the issuance of TCT
No. T-241314 in the names of the spouses (Exh. 3).
It was also established that the spouses Jaime Olila and Lolita
Olviga Olila, were not innocent purchasers for value of the land
from their father, and have never been in possession. The Glors
and their predecessors-in-interest (Cornelio Glor Sr., and Eutiquio
Pureza) were the ones found to be in possession of the property.
From said findings and conclusions, the appellate court in its
decision dated January 13, 1992, resolved the issues presented,
thus:
". . . whether or not plaintiffs' action is really one for
quieting of title that does not prescribe; or assuming that
their demand for the reconveyance of the lot in question
prescribes in ten years, being based on an implied trust,
whether their cause of action should be counted from
the date of the issuance of the late Jose Olviga's title
over said lot in 1967 and has, therefore, already
prescribed, or whether the prescriptive period should be
counted from the date plaintiffs acquired knowledge of
said title sometime in 1988.
"The first question should be answered in the
affirmative . . .
"xxx xxx xxx
"But even assuming that plaintiffs' action for
reconveyance, being based on an implied or constructive
trust, prescribes in ten years, the lower court again
correctly ruled that their cause of action should be
considered to have accrued not from the date of
registration of the title of Jose Olviga, defendants'
predecessor-in-interest, over the lot in question in 1967,
but only from the time plaintiffs learned of such title in
1988 . . .
"xxx xxx xxx
"All in all, therefore, the court a quo did not err in
holding that plaintiffs' action against defendants-
appellants for the reconveyance of the lot in question
filed on April 10, 1989, or in less than a year after they
learned of the issuance of a title over said lot to Jose
Olviga, predecessor-in-interest of defendants, has not
yet prescribed.
"WHEREFORE, the decision appealed from herein is
AFFIRMED in toto, with costs against defendants-
appellants." (pp. 48-51, Rollo.)
Petitioners now seek a review of the above decision. They allege
that: (1) the present action has already prescribed; (2) the Court of
Appeals erred when it ruled that the private respondents' cause of
action accrued not in 1967 but in 1988; (3) that the Court of
Appeals erred when it failed to consider that private respondents
as mere homestead transferees cannot maintain an action for
reconveyance; (4) that the Faja and Caragay-Layno cases have no
bearing and direct application to the case at bar; and (5) that
private respondents have not proven by preponderance of
evidence their ownership and possession of the disputed land.
With regard to the issue of prescription, this Court has ruled a
number of times before that an action for reconveyance of a
parcel of land based on implied or constructive trust prescribes in
ten years, the point of reference being the date of registration of
the deed or the date of the issuance of the certificate of title over
the property (Vda. de Portugal vs. IAC, 159 SCRA 178). But this
rule applies only when the plaintiff is not in possession of the
property, since if a person claiming to be the owner thereof is in
actual possession of the property, the right to seek reconveyance,
which in effect seeks to quiet title to the property, does not
prescribe.
In Sapto vs. Fabiana, 103 Phil. 683, 686-687, appellants'
predecessors sold to appellees in 1931 a parcel of land. The sale
was approved by the Provincial Governor of Davao but was never
registered. Possession of the land was, however, transferred to
Fabiana and the latter has been in possession thereof from 1931
up to the present. The widow and children of Samuel Sapto filed
an action to recover the land. This Court in affirming the validity
of the sale in favor of appellee (Fabiana) held: cdphil
"No enforcement of the contract is in fact needed, since the
delivery of possession of the land sold had consummated the sale
and transferred title to the purchaser, registration of the contract
not being indispensable as between the parties. Actually the
action for conveyance was one to quiet title, i.e., to remove the
cloud cast upon appellee's ownership by the refusal of the
appellants to recognize the sale made by their predecessors. This
action accrued only when appellants initiated their suit to recover
the land in 1954. Furthermore, it is an established rule of
American jurisprudence (made applicable in this jurisdiction by
Art. 480 of the New Civil Code) that actions to quiet title to
property in the possession of the plaintiff are imprescriptible (44
Am. Jur. p. 47; Cooper vs. Rhea, 39 L.R.A. 930; Inland Empire
Land Co. vs. Grant County, 138 Wash. 439, 245 Pac. 14)."
In Faja vs. Court of Appeals, 75 SCRA 441, 446, this Court
likewise reiterated the ruling that:
". . . There is settled jurisprudence that one who is in
actual possession of a piece of land claiming to be
owner thereof may wait until his possession is disturbed
or his title is attacked before taking steps to vindicate his
right, the reason for the rule being that his undisturbed
possession gives him a continuing right to seek the aid
of a court of equity to ascertain and determine the nature
of the adverse claim of a third party and its effect on his
own title, which right can be claimed only by one who is
in possession. No better situation can be conceived at
the moment for Us to apply this rule on equity than that
of herein petitioners whose mother, Felipa Faja, was in
possession of the litigated property for no less than 30
years and was suddenly confronted with a claim that the
land she had been occupying and cultivating all these
years, was titled in the name of a third person. We hold
that in such a situation the right to quiet title to the
property, to seek its reconveyance and annul any
certificate of title covering it, accrued only from the
time the one in possession was made aware of a claim
adverse to his own, and it is only then that the statutory
period of prescription commences to run against such
possessor." Cdpr
In the case at bar, private respondents and their predecessors-in-
interest were in actual possession of the property since 1950.
Their undisturbed possession gave them the continuing right to
seek the aid of a court of equity to determine the nature of the
adverse claim of petitioners, who in 1988 disturbed their
possession.
The other issues raised in the petition are factual.
The Court of Appeals and the trial court correctly based their
findings of fact on the testimonies of the parties and their
witnesses. It can be said therefore that those conclusions are
based on substantial evidence. No cogent reason exists to disturb
them. As reiterated in a long line of decisions, it is beyond the
province of this Court to make its own findings of facts different
from those of the trial court as affirmed by the Court of Appeals
(Vda. de Cailles vs. Mayuga 170 SCRA 347; New
Owners/Management of TML Garments, Inc. vs. Zaragosa, 170
SCRA 563). In petitions for review of decisions of the Court of
Appeals, the jurisdiction of this Court is confined to a review of
questions of law, except when the findings of fact are not
supported by the records or are so glaringly erroneous as to
constitute a serious abuse of discretion (Lim vs. Court of Appeals,
158 SCRA 307; Samson vs. Ca, 141 SCRA 194; Republic vs.
IAC, 144 SCRA 705). The case at bar does not fall under the
exceptions.
WHEREFORE, findings no reversible error in the decision of the
Court of Appeals, the petition for review is DENIED, with costs
against the petitioners. LibLex
[G.R. No. 102909. September 6, 1993.]
SPOUSES VICENTE and LOURDES
PINGOL, petitioners, vs. HON. COURT OF APPEALS and
HEIRS OF FRANCISCO N. DONASCO, namely: MELINDA
D. PELAYO, MARIETTA D. SINGSON, MYRNA D.
CUEVAS, NATIVIDAD D. PELAYO, YOLANDA D.
CACERES and MARY DONASCO, respondents.
An action denominated as one for specific performance and
damages was brought by the private respondents against the
petitioners before the Regional Trial Court (RTC) of Caloocan
City which, after due trial, rendered a decision in favor of the
petitioners. On appeal, the respondent Court reversed the trial
court's decision.
It is from this judgment that the petitioners have appealed to this
Court by way of a petition for review on certiorari.
The material facts of this case are simple and undisputed.
Petitioner Vicente Pingol is the owner of Lot No. 3223 of the
Cadastral Survey of Caloocan, with an area of 549 square meters,
located at Bagong Barrio, Caloocan City and more particularly
described in Transfer Certificate of Title (TCT) No. 7435 of the
Registry of Deeds of Caloocan City. On 17 February 1969, he
executed a "DEED OF ABSOLUTE SALE OF ONE-HALF (1/2)
[OF] AN UNDIVIDED PORTION OF A PARCEL OF LAND"
in favor of Francisco N. Donasco which was acknowledged
before a notary public. The parcel of land referred to therein is
Lot No. 3223 and the pertinent portions of the document read as
follows:
"That for and in consideration of the sum of TWENTY
THOUSAND AND FIVE HUNDRED THIRTY (P20,530.00)
PESOS, Philippine Currency, the VENDOR hereby these presents
SELL, CONVEY AND CONVEY by way of Absolute Sale the
one-half (1/2) portion, equivalent to Two Hundred Seventy Four
and point Fifty (274.50) square meters, to the VENDEE, the
above-mentioned property, his heirs, assigns and successors-in-
interest;
That the VENDOR hereby confesses and acknowledges the
receipt of TWO THOUSAND (P2,000.00) PESOS from
VENDEE as advanced (sic) and partial payment to the above-
cited consideration of the Sale herein mentioned, leaving therefor
a balance of Eighteen Thousand and Five Hundred Thirty
(P18,530) Pesos to be paid in several equal installments within a
period of six (6) years, beginning January, 1970;
That after computing the above-mentioned equal installments, the
VENDEE agrees and undertakes to pay unto the VENDOR a
monthly amount equivalent to Two Hundred Fifty Seven (sic) and
Thirty Six Centavos (P257.36) within a period of Seventy One
(71) months and on the Seven Two [sic] (72) month, the amount
of (P257.44) as the last and final installment thereof;
That the VENDEE agrees that in case of default in the payment of
the installments due the same shall earn a legal rate of interest,
and to which the VENDOR likewise agrees;
That the VENDEE undertakes to pay unto the VENDOR the
herein monthly installment within the first five (5) days of each
month and the same shall be made available and to be paid at the
residence of the VENDOR, payment to be made either directly to
the VENDOR, his wife or his authorized representative or factor;
That in case of partition of the above-described property between
herein VENDOR and VENDEE, the same shall be divided into
two (2) equal parts, the VENDOR gets the corner facing J. De
Jesus and Malolos Avenue and the VENDEE shall get the portion
with fifteen (15) meters frontage facing J. De Jesus Street only." 1
Pursuant to the contract, Donasco paid P2,000.00 to Pingol. The
one-half portion, designated as Lot No. 3223-A, was then
segregated from the mother lot, and the parties prepared a
subdivision plan (Exhibit "C") which was approved by the Land
Registration Commission. 2
Francisco Donasco immediately took possession of the subject lot
and constructed a house thereon. In January 1970, he started
paying the monthly installments but was able to pay only up to
1972.
On 13 July 1984, Francisco Donasco died. At the time of his
demise, he had paid P8,369.00, plus the P2,000.00 advance
payment, leaving a balance of P10,161.00 on the contract
price. 3 Lot No. 3223-A remained in the possession of Donasco's
heirs.
On 19 October 1988, the heirs of Francisco Donasco filed an
action for "Specific Performance and Damages, with Prayer for
Writ of Preliminary Injunction" against the spouses Vicente and
Lourdes Pingol (petitioners herein) before the RTC of Caloocan
City. The action was docketed as Civil Case No. 13572 and
raffled off to Branch 125 of the said court.
In their complaint, 4 the plaintiffs (private respondents herein)
averred that after the death of their father, they offered to pay the
balance of P10,161.00 plus the stipulated legal rate of interest
thereon to Vicente Pingol but the latter rebuffed their offer and
has "been demanding for a bigger and unreasonable amount, in
complete variance to what is lawfully due and payable." They
stated that they had "exerted earnest efforts to forge or reach an
amicable and peaceful settlement with the defendants" for the
payment of the property in question but to no avail. They further
alleged that the defendants were committing "acts of forcible
entry and encroachment" upon their land and asked that a writ of
preliminary injunction be issued to restrain the defendants from
the acts complained of.
Plaintiffs then prayed that the defendants be ordered, inter alia:
"a. . . . to accept the amount of P10,161.00, more or
less, plus the stipulated legal rate of interest due thereon,
as full and complete payment of the balance for the
agreed price/consideration on the one-half (1/2) portion
of the parcel of land . . .; [and]
b. . . . to execute the final deed of sale on the one-half
(1/2) portion of the lot . . . in accordance with the
partition reflected in the survey and subdivision plan, . .
." 5
In their answer with counterclaim, 6 defendants admitted the
execution of the aforementioned deed of sale, the segregation of
the portion sold and the preparation and approval of the
subdivision plan, but set up the following special and affirmative
defenses: (1) the plaintiffs' cause of action had already prescribed;
(2) the deed of sale embodied a conditional contract of sale "as
the consideration is to be paid on installment basis within a period
of six years beginning January, 1970"; (3) the subdivision plan
was prepared on the assumption that Francisco Donasco would be
able to comply with his obligation; (4) when Francisco died, he
had not fully paid the total consideration agreed upon; and (5)
considering the breach by Francisco of his contractual obligation
way back in 1976, the sale was deemed to have been cancelled
and the continuous occupancy of Francisco after 1976 and by his
heirs thereafter was by mere tolerance of Vicente Pingol. They
then asked that the plaintiffs be ordered to vacate the premises
and to pay them attorney's fees and a reasonable compensation for
the use of the land.
In their Reply and Answer to Counterclaim, 7 the plaintiffs
pointed out that there is no provision in the deed of sale for its
cancellation in case of default in the payment of the monthly
installments and invoked Article 1592 of the New Civil Code.
They specifically denied the allegations in the counterclaim.
The issues having been joined, the case was then tried on the
merits.
On 22 January 1990, the trial court rendered a
decision 8 dismissing the complaint and ordering the plaintiffs to
pay the defendants P350.00 as reasonable monthly rental for the
use of the premises from the filing of the complaint, P10,000.00
by way of attorney's fees, and the costs of the suit. It held that: (1)
the deed of absolute sale in question, marked and offered in
evidence as Exhibit "A," is a contract to sell, not a contract of
sale, since Vicente Pingol had no intention to part with the
ownership of the lot unless the full amount of the agreed price
had been paid; (2) the contract was deemed to have been
cancelled from the moment the late father of the plaintiffs
defaulted in the payment of the monthly installments; (3) title and
ownership over the lot did not pass to Francisco Donasco and his
heirs since the contract to sell was never consummated; and (5)
assuming, arguendo, that the plaintiffs have a cause of action for
specific performance, such action had already prescribed since the
complaint was filed only on 19 October 1988 or more than ten
years from the time that they could have lawfully demanded
performance. 9
Plaintiffs elevated the case to the Court of Appeals where the
appeal was docketed as CA-G.R. CV No. 25967. On 12
November 1991, the said court rendered a decision 10reversing
the appealed decision and decreeing as follows:
"WHEREFORE, the decision appealed from is hereby
REVERSED and SET ASIDE and another one is
rendered:
(1) Ordering appellee-vendor Vicente Pingol to accept
the sum of P10,161.00, plus the legal interest due
thereon from the date of institution of this action on
October 19, 1988;
(2) Upholding the validity of the 'DEED OF
ABSOLUTE SALE OF ONE-HALF (1/2) (of) AN
UNDIVIDED PORTION OF A PARCEL OF LAND'
(Exh. A), and by virtue and on the strength of which
declaring the 'Heirs of the Deceased Francisco N.
Domingo' as the owners of the 274.50 sq. m. land,
denominated as Lot 3223-A, (LRC) Psd-146255 under
the technical description (exh. D) and reflected in the
Plan of Subdivision Survey which was approved By
Commissioner of Land Registration on August 13, 1971
(exh. C), representing one-half portion [of] lot 3223,
situated at the corner of Malolos Avenue and G. de
Jesus St., Bagong Barrio, Caloocan City, and covered by
TCT No. 7435 of the Registry of Deeds of Caloocan
City (exh. B); and
(3) Ordering the defendants-appellees to pay the costs.
SO ORDERED." 11
The Court of Appeals ruled that the deed of sale in question
reveals the clear intention of Vicente Pingol to part with the
ownership of the one-half portion of the land by way of an
absolute sale; that the failure to fully pay the agreed price was not
a ground for the cancellation of the sale; and that the plaintiffs'
action is imprescriptible since it is akin to an action to quiet title
to property in one's possession. 12

Dissatisfied with the decision of the Court of Appeals, the
defendants, hereinafter referred to as the petitioners, filed this
petition for certiorari on 9 January 1992. Plaintiffs, hereinafter
referred to as the private respondents, filed their comment thereto
on 10 September 1992 to which the petitioners filed a reply on 11
November 1992. We gave due course to the petition and required
the parties to submit their respective memoranda, 13 which they
subsequently complied with.
Petitioners contend that the Court of Appeals erred:
"I IN HOLDING THAT THE DOCUMENT (EXHIBIT "A")
DENOMINATED AS 'ABSOLUTE DEED OF SALE OF ONE-
HALF (1/2) OF AN UNDIVIDED PORTION OF A PARCEL OF
LAND' IS AN ABSOLUTE DEED OF SALE SUFFICIENT TO
CONFER OWNERSHIP ON THE VENDEE AND HIS
SUCCESSORS-IN-INTEREST, DESPITE THE FACT THAT BY
ITS TERMS AND CONDITIONS, LIKE THE PRICE BEING
PAYABLE ON INSTALLMENTS WITHIN A FIXED PERIOD,
THE SAME IS A CONDITIONAL DEED OF SALE.
II
IN HOLDING THAT NOTWITHSTANDING THE FACT
THAT THE VENDEE FAILED TO COMPLY WITH THE
TERMS OF THE CONTRACT (EXHIBIT "A")
SPECIFICALLY TO COMPLETE THE PAYMENT OF THE
CONSIDERATION ON THE DATE STIPULATED IN THE
CONTRACT WHICH WAS SUPPOSED TO BE IN JANUARY
1976, COMPLETE PAYMENT THEREOF CAN STILL BE
ENFORCED IN AN ACTION INSTITUTED BY THE HEIRS
OF THE VENDEE FILED ON OCTOBER 19, 1988 OR A
PERIOD OF MORE THAN TWELVE (12) YEARS FROM THE
TIME COMPLETE PAYMENT SHOULD HAVE BEEN
MADE;
III
IN HOLDING THAT THE PRIVATE RESPONDENTS'
ACTION IS ONE WHICH IS AN OFFER TO COMPLETE THE
PAYMENT LEFT UNPAID BY PRIVATE RESPONDENTS'
FATHER WHICH DOES NOT PRESCRIBE;
IV
IN HOLDING THAT PRIVATE RESPONDENTS' CAUSE OF
ACTION HAS NOT PRESCRIBED." 14

The decisive issue in this case is whether Exhibit "A" embodies a
contract of sale or a contract to sell. The distinction between the
two is important for in a contract of sale, the title passes to the
vendee upon the delivery of the thing sold, whereas in a contract
to sell, by agreement, ownership is reserved in the vendor and is
not to pass until the full payment of the price. In a contract of
sale, the vendor has lost and cannot recover ownership until and
unless the contract is resolved or rescinded, whereas in a contract
to sell, title is retained by the vendor until the full payment of the
price, such payment being a positive suspensive condition, failure
of which is not a breach but an event that prevented the obligation
of the vendor to convey title from becoming effective. 15
A perusal of Exhibit "A" leads to no other conclusion than that it
embodies a contract of sale. The plain and clear tenor of the
"DEED OF ABSOLUTE SALE OF ONE-HALF (1/2) [OF] AN
UNDIVIDED PORTION OF A PARCEL OF LAND" is that "the
VENDOR hereby . . . SELL, CONVEY AND CONVEY by way
of Absolute Sale the one-half (1/2) portion . . . to the VENDEE . .
. his heirs, assigns and successors-in-interest." That the vendor,
petitioner Vicente Pingol, had that clear intention was further
evidenced by his failure to reserve his title thereto until the full
payment of the price.
In Dignos vs. Court of Appeals, 16 we held that a deed of sale is
absolute in nature although denominated as a "Deed of
Conditional Sale" where there is no stipulation in the deed that
title to the property sold is reserved in the seller until the full
payment of the price, nor is there a stipulation giving the vendor
the right to unilaterally resolve the contract the moment the buyer
fails to pay within a fixed period. Exhibit "A" contains neither
stipulation. What is merely stated therein is that "the VENDEE
agrees that in case of default in the payment of the installments
due the same shall earn a legal rate of interest, and to which the
VENDOR likewise agrees."
Furthermore, as found by the Court of Appeals, the acts of the
parties, contemporaneous and subsequent to the contract, clearly
show that an absolute deed of sale was intended by the parties and
not a contract to sell:
"[P]ursuant to the deed, the vendor delivered actual and
constructive possession of the property to the vendee,
who occupied and took such possession, constructed a
building thereon, had the property surveyed and
subdivided and a plan of the property was prepared and
submitted to the Land Registration Commission
which approved it preparatory to segregating the same
and obtaining the corresponding TCT in his name. Since
the sale, appellee continuously possessed and occupied
the property as owner up to his death on July 13, 1984
and his heirs, after his death, continued the occupancy
and possession of the property up to the present. Those
contemporaneous and subsequent events are
demonstrative acts that the vendor since the sale
recognized the vendee as the absolute owner of the
property sold. All those attributes of ownership are
admitted by defendants in their answer, specifically in
paragraphs 7 and 9 of their special and affirmative
defenses." 17
The contract here being one of absolute sale, the ownership of the
subject lot was transferred to the buyer upon the actual and
constructive delivery thereof. The constructive delivery of the
subject lot was made upon the execution of the deed of
sale 18 while the actual delivery was effected when the private
respondents took possession of and constructed a house on Lot
No. 3223-A.
The delivery of the object of the contract divested the vendor of
the ownership over the same and he cannot recover the title unless
the contract is resolved or rescinded pursuant to Article 1592 of
the New Civil Code which provides that:
"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 rescission of the contract has
been made upon him either judicially or by a
notarial act. After the demand, the court may
not grant him a new term."
Both the trial court and the Court of Appeals did not find that
a notarial or judicial rescission of the contract had been
made. Although Vicente Pingol asserts that he had declared
to Francisco Donasco that he was cancelling the contract, he
did not prove that his demand for rescission was made either
judicially or by a notarial act.
Petitioners fault the respondent Court for holding that the action
of the petitioners is not barred by the statute of limitations. They
argue that the private respondents' action, being based upon a
written contract, has prescribed since it was brought only in 1988
or more than ten years from the time when the latter could have
lawfully demanded performance. 19
We disagree.
Although the private respondents' complaint before the trial court
was denominated as one for specific performance, it is in effect
an action to quiet title. In this regard, the following excerpt
from Bucton vs. Gabar 20 is apropos:
"The real and ultimate basis of petitioners' action is their
ownership of one-half of the lot coupled with their possession
thereof, which entitles them to a conveyance of the property. In
Sapto, et al. v. Fabiana [103 Phil. 683, 686-87 (1958)], this Court,
speaking thru Mr. Justice J.B.L. Reyes, explained that under the
circumstances no enforcement of the contract is needed, since the
delivery of possession of the land sold had consummated the sale
and transferred title to the purchaser, and that, actually, the action
for conveyance is one to quiet title, i.e., to remove the cloud upon
the appellee's ownership by the refusal of the appellants to
recognize the sale made by their predecessors."
That a cloud has been cast on the title of the private respondents
is indubitable. Despite the fact that the title had been transferred
to them by the execution of the deed of sale and the delivery of
the object of the contract, the petitioners adamantly refused to
accept the tender of payment by the private respondents and
steadfastly insisted that their obligation to transfer title had been
rendered ineffective.
A vendee in an oral contract to convey land who had made part
payment thereof, entered upon the land and had made valuable
improvements thereon, is entitled to bring suit to clear his title
against the vendor who had refused to transfer the title to him. It
is not necessary that the vendee has an absolute title, an equitable
title being sufficient to clothe him with personality to bring an
action to quiet title. 21
Prescription thus cannot be invoked against the private
respondents for it is aphoristic that an action to quiet title to
property in one's possession is imprescriptible. 22 The rationale
for this rule has been aptly stated thus:
"The owner of real property who is in possession thereof
may wait until his possession is invaded or his title is
attacked before taking steps to vindicate his right. A
person claiming title to real property, but not in
possession thereof, must act affirmatively and within the
time provided by the statute. Possession is a continuing
right as is the right to defend such possession. So it has
been determined that an owner of real property in
possession has a continuing right to invoke a court of
equity to remove a cloud that is a continuing menace to
his title. Such a menace is compared to a continuing
nuisance or trespass which is treated as successive
nuisances or trespasses, not barred by statute until
continued without interruption for a length of time
sufficient to affect a change of title as a matter of
law." 23
Private respondents shall, however, be liable to pay the legal rate
of interest on the unpaid balance of the purchase price from the
date of default or on 6 January 1976, when the entire balance
should have been paid, pursuant to the provision in the deed of
sale.
WHEREFORE, except as above modified, the Decision appealed
from is hereby AFFIRMED. As modified, the interest on the
unpaid balance of P10,161.00, at the legal rate, shall be computed
from 6 January 1976. Upon the payment by the private
respondents to the petitioners of the said amount and the interest
thereon, the latter are ordered to deliver Transfer Certificate of
Title No. 7435 to the Register of Deeds of Caloocan City who
shall cancel the same and issue two new transfer certificates of
title in lieu thereof, one of which shall be in the name of the
herein private respondents covering Lot No. 3223-A and the other
in the name of the petitioners covering the remainder of the lot.


[G.R. No. 111141. March 6, 1998.]
MARIO Z. TITONG, petitioner, vs. THE
HONORABLE COURT OF APPEALS (4th
Division), VICTORICO LAURIO and ANGELES
LAURIO,respondents.
SYLLABUS
1. CIVIL LAW; OWNERSHIP; QUIETING OF TITLE; THERE
MUST BE AN INSTRUMENT, RECORD, CLAIM,
ENCUMBRANCE OR PROCEEDING WHICH CONSTITUTES
OR CASTS A CLOUD UPON THE OWNER'S TITLE OR
INTEREST. Under Article 476 of the Civil Code, a claimant
must show that there is an instrument, record, claim,
encumbrance or proceeding which constitutes or casts a cloud,
doubt, question or shadow upon the owner's title to or interest in
real property. The ground or reason for filing a complaint for
quieting of title must therefore be "an instrument, record, claim,
encumbrance or proceeding." Under the maxim expresio unius est
exclusio alterius, these ground are exclusive so that other reasons
outside of the purview of these reasons may not be considered
valid for the same action.
2. ID.; ID.; ID.; ID.; PHYSICAL INTRUSION, NOT PROPER
GROUND. Petitioner merely alleged that the
defendants(respondents herein), together with their hired laborers
and without legal justification, forcibly entered the southern
portion of the land of the plaintiff and plowed the same. He then
proceeded to claim damages and attorney's fees. He prayed that,
aside from issuing a writ or preliminary injunction enjoining
private respondents and their hired laborers from intruding into
the land, the court should declare him "the true and absolute
owner" thereof. Hence, through his allegations, what petitioner
imagined as clouds cast on his title to the property were private
respondents' alleged acts of physical intrusion into his purported
property. Clearly, the acts alleged may be considered grounds for
an action for forcible entry but definitely not one for quieting of
title.
3. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF
THE COURT OF APPEALS, BINDING AND CONCLUSIVE
UPON THIS COURT. As a general rule, findings of fact of
the Court of Appeals are binding and conclusive upon this Court.
Such factual findings shall not be disturbed normally unless the
same are palpably unsupported by the evidence on record or the
judgment itself is based on a misapprehension of facts. Upon an
examination of the records, the Court finds no evident, reason to
depart from the general rule.
4. CIVIL LAW; OBLIGATIONS AND CONTRACT; SALE;
TRANSFERS DOMINION AND OTHER REAL RIGHTS IN
THE THING SOLD. The courts below correctly held that
when petitioner "sold, ceded, transferred and conveyed" the 5.5-
hectare land in favor of Pablo Espinosa, his rights of ownership
and possession pertaining thereto ceased and these were
transferred to the latter. In the same manner, Espinosa's rights of
ownership over the land ceased and were transferred to private
respondent upon its sale to the latter. This finds justification in
Article 1458 of the Civil Code. In other words, a sale is a contract
transferring dominion and other real rights in the thing sold. In
the case at bar, petitioner's claim of ownership must of necessity
fail because he has long abdicated his rights over the land when
he sold it to private respondent's predecessor-in-interest.
5. ID.; PRESCRIPTION; ACQUISITIVE PRESCRIPTION;
REQUISITES IN ORDINARY PRESCRIPTION. While Art.
1134 of the Civil Code provides that "(o)wnership and other real
rights over immovable property are acquired by ordinary
prescription through possession of ten years," this provision of
law must be read in conjunction with Art. 1117 of the same Code.
This article states that ". . . (o)rdinary acquisitive prescription of
things requires possession in good faith and with just title for the
time fixed by law." Hence, prescriptive title to real estate is not
acquired by mere possession thereof under claim of ownership for
a period of ten years unless such possession was acquired con
justo titulo y buena fe (with color of title and good faith). The
good faith of the possessor consists in the reasonable belief that
the person from whom he received the thing was the owner
thereof, and could transmit his ownership. For purposes of
prescription, there is just title when the adverse claimed came into
possession of the property through one of the modes recognized
by law for the acquisition of ownership or other real rights but the
grantor was not the owner or could not transmit any right.
6. ID.; ID.; ID.; 30 YEARS POSSESSION IN
EXTRAORDINARY PRESCRIPTION; CASE AT BAR.
Petitioners have satisfactorily met the requirements of good faith
and just title. As aptly observed by the trial court, the plaintiff's
admitted acts of converting the boundary line (Bugsayon River)
into a ricefield and thereafter claiming ownership thereof were
acts constituting deprivation of the rights of others and therefore
"tantamount to bad faith." To allow petitioner to benefit from his
own wrong would run counter to the maxim ex delo malo non
oritur actio (no man can be allowed to found a claim upon his
own wrongdoing). Extraordinary acquisitive prescription cannot
similarly vest ownership over the property upon petitioner. Art.
1137 of the Civil Code states that "(o)wnership and other real
rights over immovables prescribe through uninterrupted adverse
possession thereof for thirty years, without need of title or of
good faith." Petitioner's alleged possession in 1962 up to
September 1983 when private respondents entered the property in
question spanned twenty-one (21) years. This period of time is
short of the thirty-year requirement mandated by Art. 1137.
7. REMEDIAL LAW; EVIDENCE; SURVEY, TAX
DECLARATIONS, COMMISSIONER'S REPORT ON
RELOCATION SURVEY AND SURVEY PLAN, NOT
EVIDENCE OF PETITIONER'S TITLE OVER THE LAND.
Petitioner basically anchors his claim over the property on the
survey plan prepared upon his request, the tax declaration in his
name, the commissioner's report on the relocation survey, and the
survey plan. Respondent court correctly held that these
documents does not conclusively demonstrate petitioner's title
over Lot Nos. 3918-A and 8606.
8. ID.; ID.; ADMISSION OF EVIDENCE DOES NOT SIGNIFY
THAT COURTS SHALL GIVE PROBATIVE VALUE
THEREFOR. The circumstance that the plan was admitted in
evidence without any' objection as to its due execution and
authenticity does not signify that the courts shall give probative
value therefor. To admit evidence and not to believe it
subsequently are not contradictory to each other. This Court
cannot alter the conclusions of the Court of Appeals on the
credibility accorded to evidence presented by the parties.
9. CIVIL LAW; DAMAGES; MORAL DAMAGES AND
ATTORNEY'S FEES; GRANT PROPER IN CASE AT BAR.
With respect to the awards of moral damages of P10,000.00 and
attorney's fees of P2,000.00, the Court finds no cogent reason to
delete the same. Jurisprudence is replete with rulings to the effect
that where fraud and bad faith have been established, the award of
moral damages is in order. This pronouncement finds support in
Art. 2219 (10) of the Civil Code allowing the recovery of moral
damages for acts enumerated in Art. 21 of the same Code. The
moral damages are hereby increased to P30,000.00. We agree
with the respondent court in holding that the award of attorney's
fees is justified because petitioner filed a clearly unfounded civil
action.
ROMERO, J p:
Like a priceless treasure coveted by many, but capable of
ownership by only one, this 20,592 square-meter parcel of land
located at Barrio Titong, Masbate, Masbate is claimed by two
contestants in this petition for review on certiorari. Unfortunately,
legal title over the property can be vested in only one of
them. aisa dc
The case originated from an action for quieting of title filed by
petitioner Mario Titong. The Regional Trial Court of Masbate,
Masbate, Branch 44 1 ruled in favor of private respondents,
Victorico Laurio and Angeles Laurio, adjudging them as the true
and lawful owners of the disputed land. Affirmed on appeal to the
Court of Appeals, petitioner comes to us for a favorable reversal.
Petitioner alleges that he is the owner of an unregistered parcel of
land with an area of 3.2800 hectares, more or less, surveyed as
Lot No. 3918, and declared for taxation purposes in his name. He
claims that on three separate occasions in September 1983,
private respondents, with their hired laborers, forcibly entered a
portion of the land containing an area of approximately two (2)
hectares, and began plowing the same under pretext of ownership.
Private respondents denied this allegation, and averred that the
disputed property formed part of the 5.5-hectare agricultural land
which they had purchased from their predecessor-in-
interest, 2 Pablo Espinosa on August 10, 1981.
In his testimony, petitioner identified Espinosa as his adjoining
owner, 3 asserting that no controversy had sprouted between them
for twenty years until the latter sold Lot No. 3497 to private
respondent Victorico Laurio. 4 This was corroborated by Ignacio
Villamor, who had worked on the land even before its sale to
Espinosa in 1962. The boundary between the land sold to
Espinosa and what remained of petitioner's property was the old
Bugsayon river. When petitioner employed Bienvenido Lerit as
his tenant in 1962, he instructed Lerit to change the course of the
old river and direct the flow of water to the lowland at the
southern portion of petitioner's property, thus converting the old
river into a riceland. 5
For his part, private respondent anchors his defense on the
following facts: He denied petitioner's claim of ownership,
recounting that the area and boundaries of the disputed land
remained unaltered during the series of conveyances prior to its
coming into his hands. According to him, petitioner first declared
the land for taxation purposes under Tax Declaration No.
2916, 6 which showed that the land had an area of 5.5 hectares
was bounded on the North by the Bugsayon River; on the East by
property under the ownership of Lucio Lerit; on the South by
property owner of Potenciano Zaragoza; and on the West by
property owned by Agapito de la Cruz. 7 Private Respondent then
alleges that, on December 21, 1960, petitioner sold this property
to Conception Verano vda. de Cabug, after which Tax
Declaration No. 5339 8 was issued in her favor. In compliance
with their mutual agreement to repurchase the same, petitioner
reacquired the property by way of sale 9 on August 24, 1962 and
then declared it for taxation purposes in his name under Tax
Declaration No. 5720. 10 However, the property remained in
petitioner's hands for only four (4) days because, on August 28,
1962, he sold it to Espinosa 11 who then declared it in his name
under Tax Declaration No. 12311. 12 Consequently, the property
became a part of the estate of Pablo Espinosa's wife, the late
Segundina Liao Espinosa. On August 10, 1981, her heirs
executed an instrument denominated as "Extrajudicial Settlement
of Estate with Simultaneous Sale" whereby the 5.5-hectare
property under Tax Declaration No. 12311 was sold to private
respondent 13 in consideration of the amount of P5,000.00.
Thereafter, Tax Declaration No. 12738 was issued in the name of
private respondent. In all these conveyances, the area and
boundaries of the property remained exactly the same as those
appearing in Tax Declaration No. 2916 under petitioner's name.

It was proved at the proceedings in the court a quo that two (2)
surveys were made of the disputed property. The first
survey 14 was made for petitioner, while the second was the
relocation survey ordered by the lower court. As anticipated,
certain discrepancies between the two surveys surfaced. Thus,
contrary to petitioner's allegation in his complaint that he is the
owner of only 3.2800 hectares, he was actually claiming 5.9789
hectares, the total areas of Lot Nos. 3918, 3918-A and 3606. On
the other hand, Lot No. 3479 pertaining to Espinosa, was left with
only an area of 4.1841 hectares instead of the 5.5 hectares sold by
petitioner to him. Apprised of the discrepancy, private respondent
filed a protest 15 before the Bureau of Lands against the first
survey, likewise filing a case for alteration of boundaries before
the municipal trial court, the proceedings of which, however,
were suspended because of the instant case. 16
Private respondent testified that petitioner is one of the four heirs
of his mother, Leonida Zaragoza. In the Extrajudicial Settlement
with Sale of Estate of the deceased Leonida Zaragoza, 17 the
heirs adjudicated unto themselves the 3.6-hectare property of the
deceased. The property involved is described in the instrument as
having been declared under Tax Declaration No. 3301 18 and as
bounded on the North by Victor Verano, on the East by Benigno
Titong, on the South by the Bugsayon River and on the West by
Benigno Titong. On September 9, 1969, Tax Declaration No.
8723 was issued to petitioner for his corresponding share in the
state. aisa dc
However, instead of reflecting only .9000 hectare as his rightful
share in the extrajudicial settlement 19 petitioner's share was
bloated to 2.4 hectares. It is therefore appeared to private
respondent that petitioner encroached upon his (Laurio's) property
and declared it a part of his inheritance. 20 The boundaries were
likewise altered so that it was bounded on the North by Victor
Verano, on the East by Benigno Titong, on the South by property
owner Espinosa, and on the West by property owner Adolfo
Titong. 21 Private respondent accordingly denied that petitioner
had diverted the course of the Bugsayon River after he had
repurchased the land from Conception Verano vda. de
Cabug 22because the land was immediately sold to Espinosa
shortly thereafter. 23
The lower court rendered a decision in favor of private
respondents, declaring him as the true and absolute owner of the
litigated property and ordering petitioner to respect private
respondents' title and ownership over the property and to pay
attorney's fees, litigation expenses, costs and moral damages.
Petitioner appealed to the Court of Appeals, which affirmed the
decision. On motion for reconsideration, the same was denied for
lack of merit. Hence, this petition for review on certiorari.
At the outset, we hold that the instant petition must be denied for
the reason that the lower court should have outrightly dismissed
the complaint for quieting of title. The remedy of quieting of title
may be availed of under the circumstances enumerated in the
Civil Code:
"ART. 476. Whenever there is a cloud on title to real
property or any interest therein, by reason of any
instrument, record, claim, encumbrance or
proceedingwhich is apparently valid or effective but is
in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an
action may be brought to remove such cloud or to quite
the title.
An action may also be brought to prevent a cloud from
being cast upon title to real property or any interest
therein."
Under this provision, a claimant must show that there is an
instrument, record, claim, encumbrance or proceeding which
constitutes or casts a cloud, doubt, question or shadow upon the
owner's title to or interest in real property. 24 The ground or
reason for filing a complaint for quieting of title must therefore be
"an instrument, record, claim, encumbrance or proceeding."
Under the maxim expresio unius est eclusio alterius, these
grounds are exclusive so that other reasons outside of the purview
of these reasons may not be considered valid for the same
action. 25
Had the lower court thoroughly considered the complaint filed, it
would have had no other course of action under the law but to
dismiss it. The complaint failed to allege that an "instrument,
record, claim, encumbrance or proceeding" beclouded the
plaintiff's title over the property involved. Petitioner merely
alleged that the defendants (respondents herein), together with
their hired laborers and without legal justification, forcibly
entered the southern portion of the land of the plaintiff and
plowed the same.
He then proceeded to claim damages and attorney's fees. He
prayed that. Aside from issuing a writ or preliminary injunction
enjoining private respondents and their hired laborers from
intruding into the land, the court should declare him "the true and
absolute owner" thereof. Hence, through his allegations, what
petitioner imagined as clouds cast on his title to the property were
private respondent's alleged acts of physical intrusion into his
purported property. Clearly, the acts alleged may be considered
grounds for an action for forcible entry but definitely not one for
quieting of title.
When the issues were joined by the filing of the answer to the
complaint, it would have become apparent to the court that the
case was a boundary dispute. The answer alleged, among other
matters, that petitioner, "in bad faith, surreptitiously, maliciously
and fraudulently had the land in question included in the survey
of his land which extends to the south only as far as the Bugsayon
River which is the visible and natural and common boundary
between the properties." 26 Moreover, during the hearing of the
case, petitioner proved that it was actually a boundary dispute by
evidence showing what he considered as the boundary of his
property which private respondents perceived as actually
encroaching on their property. In this regard, the following
pronouncements of the Court are apropos:
". . . (T)he trial court (and likewise the respondent
Court) cannot, in an action for quieting of title, order the
determination of the boundaries of the claimed property,
as that would be tantamount to awarding to one or some
of the parties the disputed property in an action where
the sole issue is limited to whether the instrument,
record, claim, encumbrance or proceeding involved
constitute a cloud upon the petitioners' interest or title in
and to said property. Such determination of boundaries
is appropriate in adversarial proceedings where
possession or ownership may properly be considered
and where evidence aliunde, other than the instrument,
record, claim, encumbrance or proceeding' itself, may be
introduced. An action for forcible entry, wherever
warranted by the period prescribed in Rule 70, or for
recovery of possession de facto, also within the
prescribed period, may be availed of by the petitioners,
in which proceeding the boundary dispute may be fully
threshed out." 27
Nonetheless, even if the complaint below were to be considered
as a valid one for quieting of title, still, the instant petition for
review on certiorari must fail.
As a general rule, findings of fact of the Court of Appeals are
binding and conclusive upon this Court. Such factual findings
shall not be disturbed normally unless the same are palpably
unsupported by the evidence on record or the judgment itself is
based on a misapprehension of facts. 28 Upon an examination of
the records, the Court finds no evident reason to depart from the
general rule.
The courts below correctly held that when petitioner "sold, ceded,
transferred and conveyed" the 5.5-hectare land in favor of Pablo
Espinosa, his rights of ownership and possession pertaining
thereto ceased and these were transferred to the latter. In the same
manner, Espinosa's rights of ownership over the land ceased and
were transferred to private respondent upon its sale to the latter.
This finds justification in the Civil Code, as follows:
"ART. 1458. By the contract of sale one of the
contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its
equivalent.
A contract of sale may be absolute or
conditional."
In other words, a sale is a contract transferring dominion and
other real rights in the thing sold. 29 In the case at bar, petitioner's
claim of ownership must of necessity fail because he has long
abdicated his rights over the land when he sold it to private
respondent's predecessor-in-interest.
Petitioner's claim that he acquired ownership over the disputed
land through possession for more than twenty (20) years is
likewise unmeritorious. While Art. 1134 of the Civil Code
provides that "(o)wnership and other real rights over immovable
property are acquired by ordinary prescription through possession
of ten years," this provision of law must be read in conjunction
with Art. 1117 of the same Code. This article states that ". . .
(o)rdinary acquisitive prescription of things requires possession in
good faith and with just title for the time fixed by law." Hence, a
prescriptive title to real estate is not acquired by mere possession
thereof under claim of ownership for a period of ten years unless
such possession was acquired con justo titulo y buena fe (with
color of title and good faith). 30 The good faith of the possessor
consists in the reasonable belief that the person from whom he
received the thing was the owner thereof, and could transmit his
ownership. 31 For purposes of prescription, there is just title
when the adverse claimant came into possession of the property
through one of the modes recognized by law for the acquisition of
ownership or other real rights but the grantor was not the owner
or could not transmit any right. 32

Petitioners have not satisfactorily met the requirements of good
faith and just title. As aptly observed by the trial court, the
plaintiff's admitted acts of converting the boundary line
(Bugsayon River) into a ricefield and thereafter claiming
ownership thereof were acts constituting deprivation of the rights
of others and therefore "tantamount to bad faith." 33 To allow
petitioner to benefit from his own wrong would run counter to the
maxim ex dolo malo non oritur actio (no man can be allowed to
found a claim upon his own wrongdoing). Extraordinary
acquisitive prescription cannot similarly vest ownership over the
property upon petitioner. Art. 1137 of the Civil Code states that
''(o)wnership and other real rights over immovables prescribe
through uninterrupted adverse possession thereof for thirty years,
without need of title or of good faith." Petitioner's alleged
possession in 1962 up to September 1983 when private
respondents entered the property in question spanned twenty-one
(21) years. This period of time is short of the thirty year
requirement mandated by Art. 1137.
Petitioner basically anchors his claim over the property on the
survey plan prepared upon his request, 34 the tax declaration in
his name, 35 the commissioner's report on relocation
survey, 36 and the survey plan. 37 Respondent court directly held
that these documents do not conclusively demonstrate petitioner's
title over Lot Nos. 3918-A and 3606.
A survey is the act by which the quantity of a parcel of land is
ascertained and also a paper containing a statement of courses,
distances, and quantity of land. 38 A survey under a proprietary
title is not a conveyance. It is an instrument sui generis in the
nature of a partition; a customary mode in which a proprietor has
set off to himself in severalty a part of the common
estate. 39 Therefore, a survey, not being a conveyance, is not a
mode of acquiring ownership. A fortiori, petitioner cannot found
his claim on the survey plan reflecting a subdivision of land
because it is not conclusive as to ownership as it may refer only to
a delineation of possession. 40
Furthermore, the plan was not verified and approved by the
Bureau of Lands in accordance with Sec. 28, paragraph 5 of Act
No. 2259, The Cadastral Act, as amended by Sec. 1862 of Act
No. 2711. Said law ordains that private surveyors send their
original field notes, computations, reports, surveys, maps and
plots regarding a piece of property to the Bureau of Lands for
verification and approval. 41 A survey plan not verified and
approved by said Bureau is nothing more than a private writing,
the due execution and authenticity of which must be proven in
accordance with Sec. 20 of rule 132 of the Rules of Court. The
circumstance that the plan was admitted in evidence without any
objection as to its due execution and authenticity does not signify
that the courts shall give probative value therefor. To admit
evidence and not to believe it subsequently are not contradictory
to each other. The Court cannot alter the conclusions of the Court
of Appeals on the credibility accorded to evidence presented by
the parties. 42
Similarly, petitioner's tax declaration issued under his name is not
even persuasive evidence of his claimed ownership over the land
in dispute. A tax declaration, by itself, is not considered
conclusive evidence of ownership. 43 It is merely an indicium of
a claim of ownership. 44 Because it does not by itself give title, it
is of little value in proving one's ownership. 45 Moreover, the
incompatibility in petitioner's tax declaration and the
commissioner's report as regards the area of his claimed property
is much too glaring to be ignored. Tax Declaration No. 8717
states that petitioner's property has an area of 3.2800 hectares
while the totality of his claim according to the commissioned
geodetic engineer's survey amounts to 4.1385 hectares. There is
therefore a notable discrepancy of 8,585 square meters. On the
other hand, private respondent's claimed property, as borne out by
Tax Declaration No. 12738, totals 5.5 hectares, a more proximate
equivalent of the 5.2433-hectare property as shown by the
commissioner's report.
There is also nothing in the commissioner's report that
substantiates petitioner's claim that the disputed land was inside
his property. Petitioner capitalizes on the lower court's statement
in its decision 46 that "as reflected in the commissioner's report
dated May 23, 1984 (Exhibit 3-3-A), the area claimed is inside lot
3918 of the defendants (Exhibit 2)"47 or the private respondents.
A careful reading of the decision would show that this statement
is found in the summary of defendants' (herein private
respondents) evidence. Reference to Lot No. 3918 may, therefore,
be attributed to mere oversight as the lower court even continues
to state the defendants' assertion that the 2-hectare land is part of
their 5.5-hectare property. Hence, it is not amiss to conclude that
either petitioner misapprehended the lower court's decision or he
is trying to contumaciously mislead or worse, deceive this Court.
With respect to the awards of moral damages of P10,000.00 and
attorney's fees of P2,000.00, the Court finds no cogent reason to
delete the same. Jurisprudence is replete with rulings to the effect
that where fraud and bad faith have been established, the award of
moral damages is in order. 48 This pronouncement finds support
in Art. 2219 (10) of the Civil Code allowing the recovery of
moral damages for acts enumerated in Art. 21 of the same Code.
This article states that "(a)ny person who wilfully causes loss or
injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the
damage." The moral damages are hereby increased to P30,000.00.
We agree with the respondent court in holding that the award of
attorney's fees is justified because petitioner filed a clearly
unfounded civil action. 49
WHEREFORE, the instant petition for review on certiorari is
hereby DENIED and the questioned Decision of the Court of
Appeals AFFIRMED. This Decision is immediately executory.
Costs against petitioner. LLjur
SO ORDERED.
||| (G.R. No. 111141, March 06, 1998)


[G.R. No. 156171. April 22, 2005.]
Spouses RICARDO and FERMA
PORTIC, petitioners, vs. ANASTACIA
CRISTOBAL, respondent.
An agreement in which ownership is reserved in the vendor and is
not to pass to the vendee until full payment of the purchase price
is known as a contract to sell. The absence of full payment
suspends the vendors' obligation to convey title. This principle
holds true between the parties, even if the sale has already been
registered. Registration does not vest, but merely serves as
evidence of, title to a particular property. Our land registration
laws do not give title holders any better ownership than what they
actually had prior to registration.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of
Court, challenging the January 29, 2002 Decision 2 and the
November 18, 2002 Resolution 3 of the Court of Appeals (CA) in
CA-GR CV No. 66393. The assailed Decision disposed as
follows:
"WHEREFORE, foregoing considered, the
appealed decision is hereby REVERSED
and SET ASIDE. A new one is hereby
entered ORDERING defendant-appellant to
pay the unpaid balance of P55,000.00 plus
legal interest of 6% per annum counted from
the filing of this case. The ownership of
defendant-appellant over the subject
property is hereby confirmed.
"No pronouncement as to costs." 4
In the challenged Resolution, 5 the CA denied petitioners' Motion
for Partial Reconsideration.
The Facts
The facts were summarized by the appellate court as follows:
"Spouses Clodualdo Alcantara and Candelaria
Edrosalam were the original registered owners of a
parcel of land with three-door apartment, located at No.
9, 1st Street BBB, Marulas, Valenzuela City. Transfer
Certificate of Title No. T-71316 was issued in the names
of spouses Clodualdo Alcantara and Candelaria
Edrosalam.
"On October 2, 1968, spouses Clodualdo Alcantara and
Candelaria Edrosalam sold the subject property in favor
of [petitioners] with the condition that the latter shall
assume the mortgage executed over the subject property
by spouses Clodualdo Alcantara and Candelaria
Edrosalam in favor of the Social Security System.
"[Petitioners] defaulted in the payment of the monthly
amortizations due on the mortgage. The Social Security
System foreclosed the mortgage and sold the subject
property at public auction with the Social Security
System as the highest bidder. ACSaHc
"On May 22, 1984, before the expiration of the
redemption period, [petitioners] sold the subject
property in favor of [respondent] in consideration of
P200,025.89. Among others, the parties agreed that
[respondent] shall pay the sum of P45,025.89 as down
payment and the balance of P155,000.00 shall be paid
on or before May 22, 1985. The parties further agreed
that in case [respondent] should fail to comply with the
conditions, the sale shall be considered void and
[petitioners] shall reimburse [respondent] of whatever
amount already paid.
"On the same date, [petitioners] and [respondent]
executed a 'Deed of Sale with Assumption of Mortgage'
whereby [petitioners] sold the subject property in favor
of [respondent] in consideration of P80,000.00,
P45,000.00 thereof shall be paid to the Social Security
System.
"On July 30, 1984, spouses Clodualdo Alcantara and
Candelaria Edrosalam, the original owners of the subject
property, sold the subject property in favor of
[respondent] for P50,000.00.
"On the same date, [respondent] executed a 'Deed of
Mortgage' whereby [respondent] constituted a mortgage
over the subject property to secure a P150,000.00
indebtedness in favor of [petitioners].
"[Respondent] paid the indebtedness due over the
subject property to the Social Security System.
"On August 6, 1984, Transfer Certificate of Title No. T-
71316 in the names of spouses Clodualdo Alcantara and
Candelaria Edrosalam was cancelled and in lieu thereof
Transfer Certificate of Title No. T-113299 was issued in
the name of [respondent].
"On May 20, 1996, [petitioners] demanded from
[respondent] the alleged unpaid balance of P55,000.00.
[Respondent] refused to pay.
"On June 6, 1996, [petitioners] filed this instant civil
case against [respondent] to remove the cloud created by
the issuance of TCT No. T-113299 in favor of
[respondent]. [Petitioners] claimed that they sold the
subject property to [respondent] on the condition that
[respondent] shall pay the balance on or before May 22,
1985; that in case of failure to pay, the sale shall be
considered void and [petitioners] shall reimburse
[respondent] of the amounts already paid; that
[respondent] failed to fully pay the purchase price
within the period; that on account of this failure, the sale
of the subject property by [petitioners] to [respondent] is
void; that in spite of this failure, [respondent] required
[petitioners] to sign a lease contract over the apartment
which [petitioners] occupy; that [respondent] should be
required to reconvey back the title to the subject
property to [petitioners].
"[Respondent] on her part claimed that her title over the
subject property is already indefeasible; that the true
agreement of the parties is that embodied in the Deed of
Absolute Sale with Assumption of Mortgage; that
[respondent] had fully paid the purchase price; that
[respondent] is the true owner of the subject property;
that [petitioners'] claim is already barred by laches." 6
After trial, the Regional Trial Court (RTC) of Valenzuela City
rendered this judgment in favor of petitioners:
"WHEREFORE, premises considered, this Court hereby
adjudicates on this case as follows:
1.) The Court hereby orders the quieting of title or
removal of cloud over the [petitioners'] parcel of land
and three (3) door apartment now covered by Transfer
Certificate of Title No. T-113299 of the Registry of
Deeds for Caloocan City and Tax Declaration Nos. C-
018-00235 & C-031-012077 respectively, of Valenzuela
City;
2.) The Court hereby orders the [respondent] to
reconvey in favor of the [petitioners] the parcel of land
and three (3) door apartment now covered by Transfer
Certificate of Title No. T-113299 of the Registry of
Deeds of Caloocan City after reimbursement by the
[petitioners] of the amount actually paid by the
[respondent] in the total amount of P145,025.89;
3.) The Court hereby DENIES damages as claimed by
both parties." 7
Ruling of the Court of Appeals
The Court of Appeals opined that the first Memorandum of
Agreement (MOA) embodied the real agreement between the
parties, and that the subsequent Deeds were executed merely to
secure their respective rights over the property. 8 The MOA
stated that Cristobal had not fully paid the purchase price.
Although this statement might have given rise to a cause of action
to annul the Deed of Sale, prescription already set in because the
case had been filed beyond the ten-year reglementary period, 9 as
observed by the CA. Nonetheless, in conformity with the
principle of unjust enrichment, the appellate court ordered
respondent to pay petitioners the remaining balance of the
purchase price. 10
In their Motion for Partial Reconsideration, petitioners contended
that their action was not one for the enforcement of a written
contract, but one for the quieting of title an action that was
imprescriptible as long as they remained in possession of the
premises. 11 The CA held, however, that the agreement between
the parties was valid, and that respondent's title to the property
was amply supported by the evidence. 12 Therefore, their action
for the quieting of title would not prosper, because they failed to
show the invalidity of the cloud on their title. ACaDTH
Hence, this Petition. 13
The Issue
In its Memorandum, petitioners raise the following issues for our
consideration:
"(1) Whether or not the [petitioners'] cause of action is
for quieting of title.
"(2) Whether or not the [petitioners'] cause of action has
prescribed." 14
The main issue revolves around the characterization of the parties'
agreement and the viability of petitioners' cause of action.
This Court's Ruling
The Petition has merit.
Main Issue:
Nature of the Action: Quieting of Title or
Enforcement of a Written Contract
Petitioners argue that the action they filed in the RTC was for the
quieting of title. Respondent's demand that they desist from
entering into new lease agreements with the tenants of the
property allegedly attests to the fact of their possession of the
subject premises. 15 Further, they point to the existence of Civil
Case No. 7446, an action for unlawful detainer that respondent
filed against them, 16 as further proof of that fact. Being in
continuous possession of the property, they argue that their action
for the quieting of title has not prescribed. 17
On the other hand, respondent joins the appellate court in
characterizing the action petitioners filed in the RTC as one for
the enforcement of the MOA. Being based on a written
instrument, such action has already prescribed, respondent
claims. 18 She adds that petitioners could not have been in
continuous possession of the subject property because, under a
duly notarized lease agreement, they have been paying her a
monthly rental fee of P500, which was later increased to P800.
Two questions need to be answered to resolve the present case;
namely, (1) whether Cristobal's title to the property is valid; and
(2) whether the Portics are in possession of the premises, a fact
that would render the action for quieting of title imprescriptible.
Validity of Title
The CA held that the action for the quieting of title could not
prosper, because Cristobal's title to the property was amply
supported by evidence.
Article 476 of the Civil Code provides as follows:
"Whenever there is a cloud on title to real
property or any interest therein, by reason of
any instrument, record, claim, encumbrance
or proceeding which is apparently valid or
effective but is in truth and in fact invalid,
ineffective, voidable, or unenforceable, and
may be prejudicial to said title, an action
may be brought to remove such cloud or to
quiet the title.

"An action may also be brought to prevent a
cloud from being cast upon title to real
property or any interest therein."
Suits to quiet title are characterized as proceedings quasi in
rem. 19 Technically, they are neither in rem nor in personam. In
an action quasi in rem, an individual is named as
defendant. 20 However, unlike suits in rem, a quasi in
rem judgment is conclusive only between the parties. 21
Generally, the registered owner of a property is the proper party
to bring an action to quiet title. However, it has been held that this
remedy may also be availed of by a person other than the
registered owner because, in the Article reproduced above, "title"
does not necessarily refer to the original or transfer certificate of
title. 22 Thus, lack of an actual certificate of title to a property
does not necessarily bar an action to quiet title. As will be shown
later, petitioners have not turned over and have thus retained their
title to the property.
On the other hand, the claim of respondent cannot be sustained.
The transfer of ownership of the premises in her favor was subject
to the suspensive condition stipulated by the parties in paragraph
3 of the MOA, which states as follows:
"3. That while the balance of P155,000.00
has not yet been fully paid the FIRST
PARTY OWNERS shall retain the
ownership of the above described parcel of
land together with its improvements but the
SECOND PARTY BUYER shall have the
right to collect the monthly rentals due on
the first door (13-A) of the said
apartment;"23
The above-cited provision characterizes the agreement between
the parties as a contract to sell, not a contract of sale. Ownership
is retained by the vendors, the Portics; it will not be passed to the
vendee, the Cristobals, until the full payment of the purchase
price. Such payment is a positive suspensive condition, and
failure to comply with it is not a breach of obligation; it is merely
an event that prevents the effectivity of the obligation of the
vendor to convey the title. 24 In short, until the full price is paid,
the vendor retains ownership. TICDSc
The mere issuance of the Certificate of Title in favor of Cristobal
did not vest ownership in her. Neither did it validate the alleged
absolute purchase of the lot. Time and time again, this Court has
stressed that registration does not vest, but merely serves as
evidence of, title. Our land registration laws do not give the
holders any better title than that which they actually have prior to
registration. 25
Under Article 1544 of the Civil Code, mere registration is not
enough to acquire a new title. Good faith must concur. 26 Clearly,
respondent has not yet fully paid the purchase price. Hence, as
long as it remains unpaid, she cannot feign good faith. She is also
precluded from asserting ownership against petitioners. The
appellate court's finding that she had a valid title to the property
must, therefore, be set aside.
Continuous Possession
The issue of whether the Portics have been in actual, continuous
possession of the premises is necessarily a question of fact. Well-
entrenched is the rule that findings of fact of the Court of
Appeals, when supported by substantial evidence, are final and
conclusive and may not be reviewed on appeal. 27 This Court
finds no cogent reason to disturb the CA's findings sustaining
those of the trial court, which held that petitioners had been in
continuous possession of the premises. For this reason, the action
to quiet title has not prescribed.
WHEREFORE, the Petition is GRANTED. The challenged
Decision and Resolution of the Court of Appeals are REVERSED
and SET ASIDE. The Decision of the RTC of Valenzuela City in
Civil Case No. 4935-V-96, dated September 23, 1999, is hereby
REINSTATED. No pronouncement as to costs.
SO ORDERED.
||| (Spouses Portic v. Cristobal, G.R. No. 156171, April 22, 2005)

[G.R. No. 4656. November 18, 1912.]
RICARDO PARDELL Y CRUZ and VICENTA
ORTIZ Y FELIN DE PARDELL, plaintiffs-
appellees, vs. GASPAR DE BARTOLOME Y
ESCRIBANO and MATILDE ORTIZ Y FELIN DE
BARTOLOME, defendants-appellants.
SYLLABUS
1. ESTATES; REALTY; RIGHTS OF
COOWNERS OR TENANTS IN COMMON. Each
coowner or tenant in common of undivided realty has the
same rights therein as the others; he may use and enjoy the
same without other limitation except that he must not
prejudice the rights of his coowners, but until a division is
effected, the respective parts belonging to each can not be
determined; each coowner exercises joint dominion and is
entitled to joint use.
2. ID.; ID.; ID; RENT BY ONE COOWNER.
For the use and enjoyment of a particular portion of the
lower part of a house, not used as living quarters, a coowner
must, in strict justice, pay rent, in like manner as other
people pay for similar space in the house; he has no right to
the free use and enjoyment of such space which, if rented to
a third party, would produce income.
3. ID.; ID.; ID.; REPAIRS AND
IMPROVEMENT; INTEREST. Until a cause instituted to
determine the liability of the rest of the coowners for repairs
and improvements made by one of their number is finally
decided and the amount due is fixed, the persons alleged to
be liable can not be considered in default as to interest,
because interest is only due from the date of the decision
fixing the principal liability. (Supreme court of Spain, April
24, 1867, November 19, 1869, November 22, 1901, in
connection with arts. 1108-1110 of the Civil Code.)
4. ID.; ID.; ID.; VOLUNTARY
ADMINISTRATOR; COMPENSATION. To an
administrator or voluntary manager of property belonging to
his wife and another, both coowners, the property being
undivided, the law does not conceded any remuneration,
without prejudice to his right to be reimbursed for any
necessary and useful expenditures in connection with the
property and for any damages he may have suffered thereby.
5. ID.; ID.; ID.; RIGHT TO DEMAND
VALUATION BEFORE DIVISION OR SALE. Any one
of the coowners of undivided property about to be divided or
to be sold in consequence of a mutual petition, has the right
to ask that the property be valued by experts, a valuation
which would not be prejudicial but rather beneficial to all.
D E C I S I O N
TORRES, J p:
This is an appeal by bill of exceptions, from the
judgment of October 5, 1907, whereby the Honorable
Dionisio Chanco, judge, absolved the defendants from the
complaint, and the plaintiff from a counterclaim, without
special finding as to costs.
Counsel for the spouses Ricardo Pardell y Cruz and
Vicenta Ortiz y Felin de Pardell, the first of whom absent in
Spain by reason of his employment, conferred upon the
second sufficient and ample powers to appear before the
courts of justice, on June 8, 1905, in his written complaint,
alleged that the plaintiff, Vicenta Ortiz, and the defendant,
Matilde Ortiz, are the duly recognized natural daughters of
the spouses Miguel Ortiz and Calixta Felin y Paula who died
in Vigan, Ilocos Sur, in 1875 and 1882, respectively; that
Calixta Felin, prior to her death, executed, on August 17,
1876, a nuncupative will in Vigan, whereby she made her
four children, named Manuel, Francisca, Vicenta, and
Matilde, surnamed Ortiz y Felin, her sole and universal heirs
of all her property; that, of the persons enumerated, Manuel
died before his mother and Francisca a few years after her
death, leaving no heirs of the said testatrix are the plaintiff
Vicenta Ortiz and the defendant Matilde Ortiz; that, aside
from some personal property and jewelry already divided
among the heirs, the testatrix possessed, at the time of the
execution of her will, and left at her death the real properties
which, with their respective cash values, are as follows:
1. A house of strong material, with the lot on which it is
built, situated on Escalante Street, Vigan, and valued
at P6,000.00
2. A house of mixed material, with the lot on which it
stands, at No. 88 Washington Street, Vigan valued
at 1,500.00
3. A lot on Magallanes Street, Vigan; valued at 100.00
4. A parcel of rice land, situated in the barrio of San
Julian, Vigan; valued at 60.00
5. A parcel of rice land in the pueblo of Santa
Lucia; 86.00
6. Three parcels of land in the pueblo of Candon; valued
at 150.00 Total 7,896.00
That, on or about the first months of the year 1888, the
defendants, without judicial authorization, nor friendly or
extrajudicial agreement, took upon themselves the
administration and enjoyment of the said properties and
collected the rents, fruits, and products thereof, to the serious
detriment of the plaintiffs' interest; that, notwithstanding the
different and repeated demands extrajudicially made upon
Matilde Ortiz to divide the aforementioned properties with
the plaintiff Vicenta and to deliver to the latter the one-half
of the same which rightly belonged to her, or the value
thereof, together with one-half of the fruits and rents
collected therefrom, the said defendant and her husband, the
said defendant and her husband, the self-styled administrator
of the properties mentioned, had been delaying the partition
and delivery of the said properties by means of unkempt
promises and other excuses; and that the plaintiffs, on
account of the extraordinary delay in the delivery of one-half
of said properties, or their value in cash, as the case might be,
had suffered losses and damages in the sum of P8,000. Said
counsel for the plaintiffs therefore asked that judgment be
rendered by sentencing the defendants, Gaspar de Bartolome
and Matilde Ortiz Felin de Bartolome, to restore and deliver
to the plaintiffs one-half of the total value in cash, according
to appraisal, of the undivided property specified, which one-
half amounted approximately to P3,498, or, if deemed
proper, to recognize the plaintiff Vicenta Ortiz to be vested
with the full and absolute right of ownership to the said
undivided one-half of the properties in question, as universal
testamentary heir thereof together with the defendant Matilde
Ortiz, to indemnify the plaintiffs in the sum of P8,000, for
losses and damages, and to pay the costs.
Counsel for the defendants, in his answer denied
the facts alleged in paragraphs 1, 4, 6, 7 and 8 thereof,
inasmuch as, upon the death of the litigating sisters' brother
Manuel, their mother, who was still living, was his heir by
force of law, and the defendants had never refused to give to
the plaintiff Vicenta Ortiz her share of the said properties;
and stated that he admitted the facts alleged in paragraph 2,
provided it be understood, however, that the surname of the
defendant's mother was Felin, and not Felix, and that Miguel
Ortiz died in Spain, and not in Vigan; that he also admitted
paragraph 3 of the complaint, with the difference that the
said surname should be Felin, and likewise paragraph 5,
except the part thereof relating to the personal property and
the jewelry, since the latter had not yet been divided; that the
said jewelry was in the possession of the plaintiffs and
consisted of: one Lozada gold chronometer watch with a
chain in the form of a bridle curb and a watch charm
consisting of the engraving of a postage stamp on a stone
mounted in gold and bearing the initials M.O., a pair of cuff
buttons made of gold coins, four small gold buttons, two
finger rings, another with the initials M.O., and a gold
bracelet; and that the defendants were willing to deliver to
the plaintiffs, in conformity with petition, one-half of the
total value in cash, according to appraisement, of the
undivided real properties specified in paragraph 5, which half
amounted to P3,948.
In a special defense said counsel alleged that the
defendant had never refused to divide the said property and
had in fact several years before solicited the partition of the
same; that, from 1886 to 1901, inclusive, there was collected
from the property on Calle Escolta the sum of 288 pesos,
besides a few other small amounts derived from other
sources, which were delivered to the plaintiffs with other
larger amounts, in 1891, and from the property on Calle
Washington, called La Quinta, 990.95 pesos, which
proceeds, added together, made a total of 1,278.95 pesos,
saving error or omission; that, between the years
abovementioned, 765.38 pesos were spent on the house
situated on Calle Escolta, and on that on Calle
Washington, La Quinta, 376.33, which made a total of
1,141.71, saving error or omission; that, in 1897, the work of
reconstruction was begun of the house on Calle Escolta,
which had been destroyed by an earthquake, which work was
not finished until 1903 and required an expenditure on the
part of the defendant Matilde Ortiz, of 5,091.52 pesos; that
all the collections made up to August 1,1905, including the
rent from the stores, amounted to only P3,654.15, and the
expenses to P6,252.32, there being, consequently, a balance
of P2,598.18, which, divided between the sisters, the plaintiff
and the defendant, would make the latter's share P1,299.08;
that, as shown by the papers kept by the plaintiffs, in the year
1891 the defendant Bartolome presented to the plaintiffs a
statement in settlement of accounts, and delivered to the
person duly authorized by the latter for the purpose, the sum
of P2,606.29, which the said settlement showed was owing
his principals, from various sources; that, the defendant
Bartolome having been the administrator of the undivided
property claimed by the plaintiffs, the latter were owing the
former the legal remuneration of the percentage allowed by
law for administration; and that the defendants were willing
to pay the sum of P3,948, one-half of the total value of the
said properties, deducting therefrom the amount found to be
owing them by the plaintiffs, and asked that the judgment be
rendered in their favor to enable them to recover from the
latter that amount, together with the costs and expenses of
the suit.

The defendants, in their counterclaim, reported
each and all of the allegations contained in each of the
paragraphs of section 10 of their answer; that the plaintiffs
were obliged to pay to the administrator of the said property
the remuneration allowed him by law; that, as the revenues
collected by the defendants amounted to no more than
P3,654.15, and the expenditures incurred by them, to
P6,252.32, it followed that the plaintiffs owed the defendants
P1,299.08, that is, one-half of the difference between the
amount collected from and that expended on the properties,
and asked that judgment be therefore rendered in their behalf
to enable them to collect this sum from the plaintiffs,
Ricardo Pardell and Vicenta Ortiz, with legal interest thereon
from December 7, 1904, the date when the accounts were
rendered, together with the sums to which the defendant
Bartolome was entitled for the administration of the
undivided properties in question.
By a written motion of August 21, 1905, counsel
for the plaintiffs requested permission to amend the
complaint by inserting immediately after the words "or
respective appraisal," fifth line of paragraph 5, the phrased
"in cash in accordance with the assessed value," and likewise
further to amend the same, in paragraph 6 thereof, by
substituting the following words in lieu of the petition for the
remedy sought: "By reason of all the foregoing, I beg the
court to be pleased to render judgment by sentencing the
defendants, Gaspar de Bartolome and Matilde Ortiz Felin de
Bartolome, to restore and deliver to the plaintiffs an exact
one-half of the total value of the undivided properties
described in the complaint, such value to be ascertained by
the expert appraisal of two competent persons, one of whom
shall be appointed by the plaintiffs and the other by the
defendants, and, in case of disagreement between these two
appointees such value shall be determined by a third expert
appraiser appointed by the court, or, in a proper case, by the
price offered at public auction; or, in lieu thereof, it is
requested that the court recognize the plaintiff, Vicenta Ortiz,
to be vested with a full and absolute right to an undivided
one-half of the said properties; furthermore, it is prayed that
the plaintiffs be awarded an indemnity of P8,000 for losses
and damages, and the costs." Notwithstanding the opposition
of the defendants, the said defendants were allowed a period
of three days within which to present a new answer. An
exception was taken to this ruling.
The proper proceedings were had with reference to
the valuation of the properties concerned in the division
sought and incidental issues were raised relative to the
partition of some of them and their award to one or the other
of the parties. Due consideration was taken of the averments
and statements of both parties who agreed between
themselves, before the court, that any of them might at any
time acquire, at the valuation fixed by the expert judicial
appraiser, any of the properties in question, there being none
in existence excluded by the litigants. The court, therefore,
by order of December 28, 1905, ruled that the plaintiffs were
entitled to acquire, at the valuation determined by the said
expert appraiser, the building known as La Quinta, the lot on
which it stands and the warehouses and other improvements
comprised within the inclosed land, and the seed lands
situated in the pueblos of Vigan and Santa Lucia; and that
the defendants were likewise entitled to acquire the house on
Calle Escolta, the lot on Calle Magallanes, and the three
parcels of land situated in the pueblo of Candon.
After this partition had been made, counsel for the
defendants, by a writing of March 8, 1908, set forth: That,
having petitioned for the appraisement of the properties in
question for the purpose of their partition, it was not to be
understood that he desisted from the exception duly entered
to the ruling made in the matter of the amendment to the
complaint; that the properties retained by the defendants
were valued at P9,310, and those retained by the plaintiffs, at
P2,885, one-half of which amounts each party had to deliver
to the other, as they were pro indiviso properties; that,
therefore, the defendants had to pay the plaintiffs the sum of
P3,212.50, after deducting the amount which the plaintiffs
were obliged to deliver to the defendants, as one-half of the
price of the properties retained by the former; that,
notwithstanding that the amount of the counterclaim for the
expenses incurred in the reconstruction of the pro
indiviso property should be deducted from the sum which the
defendants had to pay the plaintiffs, the former, for the
purpose of bringing the matter of the partition to a close,
would deliver to the latter, immediately upon the signing of
the instrument of purchase and sale, the sum of P3,212.50,
which was one-half of the value of the properties allotted to
the defendants; such delivery, however, was not to be
understood as a renouncement of the said counterclaim, but
only as a means for the final termination of the pro
indiviso status of the property.
The case having been heard, the court, on October
5, 1907, rendered judgment holding that the revenues and the
expenses were compensated by the residence enjoyed by the
defendant party, that no losses or damages were either
caused or suffered, nor likewise any other expense besides
those aforementioned, and absolved the defendants from the
complaint and the plaintiffs from the counterclaim, with no
special finding as to costs. An exception was taken to this
judgment by counsel for the defendants who moved for a
new trial on the grounds that the evidence presented did not
warrant the judgment rendered and that the latter was
contrary to law. This motion was denied, exception whereto
was taken by said counsel, who filed the proper bill of
exceptions, and the same was approved and forwarded to the
clerk of this court, with a transcript of the evidence.
Both of the litigating sisters assented to a partition
by halves of the property left in her will by their mother at
her death; in fact, during the course of this suit, proceedings
were had, in accordance with the agreement made, for the
division between them of the said hereditary property of
common ownership, which division was recognized and
approved in the findings of the trial court, as shown by the
judgment appealed from.
The issues raised by the parties, aside from the said
division made during the trial, and which have been
submitted to this court for decision, concern: (1) The
indemnity claimed for losses and damages, which the
plaintiffs allege amount to P8,000, in addition to the rents
which should have been derived from the house on Calle
Escolta, Vigan; (2) the payment by the plaintiffs to the
defendants of the sum of P1,299.08, demanded by way of
counterclaim, together with legal interest thereon from
December 7, 1904; (3) the payment to the husband of the
defendant Matilde Ortiz, of a percentage claimed to be due
him as the administrator of the property of common
ownership; (4) the division of certain jewelry in the
possession of the plaintiff Vicenta Ortiz; and (5) the petition
that the amendment be held to have been improperly
admitted, which was made by the plaintiffs in their written
motion of August 21, 1905, against the opposition of the
defendants, through which admission the latter were obliged
to pay the former P910.50.
Before entering upon an explanation of the
propriety or impropriety of the claims made by both parties,
it is indispensable to state that the trial judge, in absolving
the defendants from the complaint, held that they had not
caused losses and damages to the plaintiffs, and that the
revenues and the expenses were compensated, in view of the
fact that the defendants had been living for several years in
the Calle Escolta house, which was pro indiviso property of
joint ownership.
By this finding absolving the defendants from the
complaint, and which was acquiesced in by the plaintiffs
who made no appeal therefrom, the first issue has been
decided which was raised by the plaintiffs, concerning the
indemnity for losses and damages, wherein are comprised the
rents which should have been obtained from the upper story
of the said house during the time it was occupied by the
defendants, Matilde Ortiz and her husband, Gaspar de
Bartolome.
Notwithstanding the acquiescence on the part of the
plaintiffs, assenting to the said finding whereby the
defendants were absolved from the complaint, yet as such
absolution is based on the compensation established in the
judgment of the trial court, between the amounts which each
party is entitled to claim from the other, it is imperative to
determine whether the defendant Matilde Ortiz, as coowner
of the house on Calle Escolta, was entitled, with her
husband, to reside therein, without paying to her coowner,
Vicenta Ortiz, who, during the greater part of the time, lived
with her husband abroad, one-half of the rents which the
upper story would have produced, had it been rented to a
stranger.
Article 394 of the Civil Code prescribes:
"Each coowner may use the things
owned in common, provided he uses them in
accordance with their object and in such
manner as not to injure the interests of the
community nor prevent the coowners from
utilizing them according to their rights."
Matilde Ortiz and her husband occupied the upper
story, designed for use as a dwelling, in the house of joint
ownership; but the record shows no proof that, by so doing,
the said Matilde occasioned any detriment to the interests of
the community property, nor that she prevented her sister
Vicenta from utilizing the said upper story according to her
rights. It is to be noted that the stores of the lower floor were
rented and an accounting of the rents was duly made to the
plaintiffs.
Each coowner of realty held pro indiviso exercises
his rights over the whole property and may use and enjoy the
same with no other limitation than that he shall not injure the
interests of his coowners, for the reason that, until a division
be made, the respective part of each holder can not be
determined and every one of the coowners exercises together
with his other coparticipants, joint ownership over the pro
indiviso property, in addition to his use and enjoyment of the
same.

As the hereditary properties of the joint ownership
of the two sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz,
defendant, were situated in the Province of Ilocos Sur, and
were in the care of the last named, assisted by her husband,
while the plaintiff Vicenta with her husband was residing
outside of the said province the greater part of the time
between 1885 and 1905, when she left these Islands for
Spain, it is not at all strange that delays and difficulties
should have attended the efforts made to collect the rents and
proceeds from the property held in common and to obtain a
partition of the latter, especially during several years when,
owing to the insurrection, the country was in a turmoil; and
for this reason, aside from that founded on the right of
coownership of the defendants, who took upon themselves
the administration and care of the property of joint tenancy
for purposes of their preservation and improvement, these
latter are not obliged to pay to the plaintiff Vicenta one-half
of the rents which might have been derived from the upper
story of the said house on Calle Escolta, and, much less,
because one of the living rooms and the storeroom thereof
were used for the storage of some belongings and effects of
common ownership between the litigants. The defendant
Matilde, therefore, in occupying with her husband the upper
floor of the said house, did not injure the interests of her
coowner, her sister Vicenta, nor did she prevent the latter
from living therein, but merely exercised a legitimate right
pertaining to her as a coowner of the property.
Notwithstanding the above statements relative to
the joint-ownership rights which entitled the defendants to
live in the upper story of the said house, yet, in view of the
fact that the record shows it to have been proved that the
defendant Matilde's husband, Gaspar de Bartolome, occupied
for four years a room or a part of the lower floor of the same
house on Calle Escolta, using it as an office for the justice of
the peace, a position which he held in the capital of that
province, strict justice requires that he pay his sister-in-law,
the plaintiff, one-half of the monthly rent which the said
quarters could have produced, had they been leased to
another person. The amount of such monthly rental is fixed
at P16 in appearance with the evidence shown in the record.
This conclusion as to Bartolome's liability results from the
fact that, even as the husband of the defendant coowner of
the property, he had no right to occupy and use gratuitously
the said part of the lower floor of the house in question,
where he lived with his wife, to the detriment of the plaintiff
Vicenta who did not receive one-half of the rent which those
quarters could and should have produced, had they been
occupied by a stranger, in the same manner that rent was
obtained from the rooms on the lower floor that were used as
stores. Therefore, the defendant Bartolome must pay to the
plaintiff Vicenta P384, that is, one-half of P768, the total
amount of the rents which should have been obtained during
four years from the quarters occupied as an office by the
justice of the peace of Vigan.
With respect to the second question submitted for
decision to this court, relative to the payment of the sum
demanded as a counterclaim, it was admitted and proved in
the present case that, as a result of a serious earthquake on
August 15, 1897, the said house on Calle Escolta was left in
ruins and uninhabitable, and that, for its reconstruction or
repair, the defendants had to expend the sum of P6,252.32.
This expenditure, notwithstanding that it was impugned,
during the trial, by the plaintiffs, was duly proved by the
evidence presented by the defendants. Evidence,
unsuccessfully rebutted, was also introduced which proved
that the rents produced by all the rural and urban properties
of common ownership amounted, up to August 1, 1905, to
the sum of P3,654.15 which, being applied toward the cost of
the repair work on the said house, leaves a balance of
P2,598.17, the amount actually advanced by the defendants,
for the rents collected by them were not sufficient for the
termination of all the work undertaken on the said building,
necessary for its complete repair and to replace it in a
habitable condition. It is therefore lawful and just that the
plaintiff Vicenta Ortiz, who was willing to sell to her sister
Matilde for P1,500, her share in the house in question, when
it was in a ruinous state, should pay the defendants one-half
of the amount expended in the said repair work, since the
building after reconstruction was worth P9,000, according to
expert appraisal. Consequently, the counterclaim made by
the defendants for the payment to them of the sum of
P1,299.08, is a proper demand, though from this sum a
reduction must be made of P384, the amount of one-half of
the rents which should have been collected for the use of the
quarters occupied by the justice of the peace, the payment of
which is incumbent upon the husband of the defendant
Matilde, as aforesaid, and the balance remaining, P915.08, is
the amount which the plaintiff Vicenta must pay to the
defendants.
The defendants claim to be entitled to the collection
of legal interest on the amount of the counterclaim, from
December 7, 1904. This contention can not be sustained,
inasmuch as, until this suit is finally decided, it could not be
known whether the plaintiffs would or would not be obliged
to pay any sum whatever in reimbursement of expenses
incurred by the plaintiffs in the repair work on the said house
on Calle Escolta, whether or not the defendants in turn, were
entitled to collect any such amount, and finally what the net
sum would be which the plaintiffs might have to pay as
reimbursement for one-half of the expenditures made by the
defendants. Until final disposal of the case, no such net sum
can be determined, nor until then can the debtor be deemed
to be in arrears. In order that there be an obligation to pay
legal interest in connection with a matter at issue between the
parties, it must be declared in a judicial decision from what
date the interest will be due on the principal concerned in the
suit. This rule has been established by the decisions of the
supreme court of Spain, in reference to articles 1108, 1109,
and 1110 of the Civil Code, rendered on April 24, 1867,
November 19, 1869, and February 22, 1901.
With regard to the percentage, as remuneration
claimed by the husband of the defendant Matilde for his
administration of the property of common ownership,
inasmuch as no stipulation whatever was made in the matter
by and between him and his sister-in-law, the said defendant,
the claimant is not entitled to the payment of any
remuneration whatsoever. Of his own accord and as an
officious manager, he administered the said pro indiviso
property, one-half of which belonged to his wife who held it
in joint tenancy, with his sister-in-law, and the law does not
allow him any compensation as such voluntary administrator.
He is merely entitled to a reimbursement for such actual and
necessary expenditures as he may have made on the
undivided properties and an indemnity for the damages he
may have suffered while acting in that capacity, since at all
events it was his duty to care for and preserve the said
property half of which belonged to his wife; and in exchange
for the trouble and labor occasioned him by the
administration of his sister-in-law's half of the said property,
he with his wife resided in the upper story of the house
aforementioned, without payment of one-half of the rents
said quarters might have produced had they been leased to
another person.
With respect to the division of the certain jewelry,
petitioned for by the defendants and appellants only in their
brief in this appeal, the record of the proceedings in the
lower court does not show that the allegation made by the
plaintiff Vicenta is not true, to the effect that the deceased
mother of the litigant sisters disposed of this jewelry during
her lifetime, because, had she not done so, the will made by
the said deceased would have been exhibited in which the
said jewelry would have been mentioned, at least it would
have been proved that the articles in question came into the
possession of the plaintiff Vicenta without the expressed
desire and the consent of the deceased mother of the said
sisters, for the gift of this jewelry was previously assailed in
the courts, without success; therefore, and in view of its
inconsiderable value, there is no reason for holding that the
said gift was not made.
As regards the collection of the sum of P910.50,
which is the difference between the assessed value of the
undivided real properties and the price of the same as
determined by the judicial expert appraiser, it is shown by
the record that the ruling of the trial judge admitting the
amendment to the original complaint, is in accord with the
law and principles of justice, for the reason that any of the
coowners of a pro indiviso property, subject to division or
sale, is entitled to petition for its valuation is not prejudicial
to any of the joint owners, but is beneficial to their interests,
considering that, as a general rule, the assessed value of a
building or a parcel of realty is less than the actual real value
of the property, and this being understood by the defendants,
they appointed an expert appraiser to determine, in
conjunction with the one selected by the plaintiffs, the value
of the properties of joint ownership. These two experts took
part in the later proceedings of the suit until finally, and
during the course of the latter, the litigating parties agreed to
an amicable division of the pro indiviso hereditary property,
in accordance with the price fixed by the judicial expert
appraiser appointed as a third party, in view of the
disagreement between and nonconformity of the appraisers
chosen by the litigants. Therefore it is improper now to claim
a right to the collection of the said sum, the difference
between the assessed value and that fixed by the judicial
expert appraiser for the reason that the increase in price, as
determined by this latter appraisal, redounded to the benefit
of both parties.

In consideration of the foregoing, whereby the
errors assigned to the lower court have been duly refuted, it
is our opinion that, with a partial reversal of the judgment
appealed from, in so far as it absolves the plaintiffs from the
counterclaim presented by the defendants, we should and
hereby do sentence the plaintiffs to the payment of the sum
of P915.08, the balance of the sum claimed by the defendants
as a balance of the one-half of the amount which the
defendants advanced for the reconstruction or repair of the
Calle Escolta house, after deducting from the total of such
sum claimed by the latter the amount of P384 which Gaspar
de Bartolome, the husband of the defendant Matilde, should
have paid as one-half of the rents due for his occupation of
the quarters on the lower floor of the said house as an office
for the justice of the peace court of Vigan; and we further
find: (1) That the defendants are not obliged to pay one-half
of the rents which could have been obtained from the upper
story of the said house; (2) that the plaintiffs can not be
compelled to pay legal interest from December 7, 1904, on
the sum expended in the reconstruction of the
aforementioned house, but only the interest fixed by law, at
the rate of per cent per annum, from the date of the judgment
to be rendered in accordance with this decision; (3) that the
husband of the defendant Matilde Ortiz is not entitled to any
remuneration for the administration of the pro
indiviso property belonging to both parties; (4) that, neither
is he entitled to collect from the plaintiffs the sum of
P910.50, the difference between the assessed valuation and
the price set by the expert appraisal solicited by the plaintiffs
in their amendment to the complaint; and, (5) that no
partition shall be made of certain jewelry aforementioned
now in the possession of the plaintiff Vicenta Ortiz. The said
judgment, as relates to the points appealed, is affirmed, in so
far as its findings agree with those of this decision, and is
reversed, in so far as they do not. No special finding is made
regarding the costs of both instances. So ordered.
||| (Pardell y Cruz v. Bartolome y Escribano, G.R. No. 4656,
November 18, 1912)

[G.R. No. L-30994. September 30, 1982.]
OLIMPIA BASA, ARSENIO BASA, NEMESIO
BASA, RICARDO BASA, ATANACIA BASA,
JULIANA BASA, and FELICIANO
BASA, petitioners, vs. HON. ANDRES C. AGUILAR,
Judge Presiding Branch II of the Court of First
Instance of Pampanga, GENARO PUYAT,
BRIGIDA MESINA, PRIMO TIONGSON, and
MACARIA PUYAT, respondents.
SYNOPSIS
The seven (7) petitioners are co-owners of an undivided one-half
share of a parcel of land. Private respondents, the spouses Genaro
Puyat and Brigida Mesina, were owners of the other undivided
half of the same parcel of land. On March 6, 1964, Genaro Puyat
with the marital consent of his wife, sold his one-half share of the
parcel of land in favor of their co-respondents (his daughter and
son-in-law). Petitioners filed a suit praying that they be allowed to
exercise the right of redemption under Article 1620 of the Civil
Code. The trial court dismissed the case stating that the third
persons against whom the right of redemption may be exercised
underArticle 1620 do not include children of a co-owner. Hence,
this petition.
The Supreme Court REVERSED the judgment of the trial court
and held that a third person within the meaning of Article 1620 of
the Civil Code,is anyone who is not a co-owner; and that since the
co-owner's son-in-law was not a co-owner of the property owned
in common at the time he bought portion of the said property,
petitioners are entitled to exercise the right of redemption over the
same.
SYLLABUS
1. CIVIL LAW; PROPERTY; CO-OWNERSHIP; RIGHT OF
REDEMPTION BY CO-OWNER; NATURE THEREOF.
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 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.".
2. ID.; ID.; ID.; ID.; THIRD PERSON CONTEMPLATED
UNDER ARTICLE 1620, CIVIL CODE. A third person,
within the meaning of this Article, is anyone who is not a co-
owner. (Sentencia of February 7, 1944 as cited in Tolentino,
Comments on the Civil Code, Vol. V, p. 160).
3. ID.; ID,; ID.; ID.; ID.; CHILDREN OF CO-OWNER WITHIN
MEANING OF LAW. Private respondent Primo Tiongson is
definitely not a co-owner of the land in question. He is not even
an heir of private respondents Genaro Puyat and Brigida Mesina,
nor included in the "family relations'' of the said spouses as
defined in Article 217 of the Civil Code. The circumstance that he
is married to Macaria Puyat, a daughter of Genaro Puyat and
Brigida Mesina, is of no moment, The conveyance to the
Tiongson spouses was by -onerous title, made during the lifetime
of Genaro Puyat and Brigida Mesina. The alleged inchoate right
of succession from Genaro Puyat and Brigida Mesina, which
pertained only to Macaria Puyat, is thus out of the question. To
deny to the petitioners the right of redemption recognized in
Article 1620 of the Civil Code is to defeat the purpose of
minimizing co-ownership and to contravene the public policy in
this regard. Moreover, it would result in disallowing the
petitioners a way out of what, in the words of Manresa, "might be
a disagreeable or inconvenient association into which they have
been thrust."

This is an appeal by certiorari from the decision of the Court of
First Instance of Pampanga in Civil Case No. 2513, entitled
"Olimpia Basa, et al., Plaintiffs, versus Genaro Puyat, et al.,
Defendants."
The seven (7) petitioners are owners co-pro-indiviso of an
undivided ONE-HALF (1/2) share of a parcel of land located in
Barrio San Mateo, Arayat, Pampanga, with an area of 32,383
square meters, more or less. Private respondents Genaro Puyat
and Brigida Mesina were the owners of the other undivided half
of the same parcel of land.
On March 6, 1964, Genaro Puyat, with the marital consent of
Brigida Mesina, sold his ONE-HALF (1/2) share of parcel of the
land in question for the price of ONE THOUSAND (P1,000.00)
PESOS in favor of private respondents Primo Tiongson and
Macaria Puyat. Primo Tiongson is a son-in-law of Genaro Puyat
who is married to Macaria Puyat, a daughter of Genaro
Puyat. LLphil
Seven (7) days later, on or March 13, 1964, the herein petitioners
filed Civil Case No. 2513, praying that they be allowed to
exercise the right of redemption under Article 1620 of the Civil
Code, for which purpose they deposited with the court the sum of
ONE THOUSAND PESOS (P1,000.00) as redemption money.
The trial court rendered the judgment dismissing the case. It ruled
that the petitioners are not entitled to exercise the right of
redemption under Article 1620 of the Civil Code, reasoning out as
follows:
"There is nothing repugnant, from the point of view of
public policy, for parents to sell to their children. It
could not, therefore, have been intended by the framers
of the Civil Code of the Philippines to include within the
purview of the term `third person' the children of a co-
owner of a thing. For after all, these children have an
inchoate right to succession to the game property. To
hold otherwise, is to stretch the meaning of the law into
ludicrious (sic) situations."
The logic of His Honor, the trial judge, carries more sentiment
than law. It disregards the express letter of the law invoked by the
petitioners and ignores the philosophy of the same. Article 1620
of the Civil Code reads:
"ART. 1620. A co-owner of a thing may exercise the
right of redemption in case the shares of an 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."
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 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." A third person, within the
meaning of this Article, is anyone who is not a co-owner.
(Sentencia of February 7, 1944 as cited in Tolentino, Comments
on the Civil Code, Vol. V, p. 160.) prcd
Private respondent Primo Tiongson i9 definitely not a co-owner
of the land in question. He is not even an heir of private
respondents Genaro Puyat and Brigida Mesina, nor included in
the "family relations" of the said spouses as defined in Article 217
of the Civil Code. The circumstance that he is married to Macaria
Puyat, a daughter of Genaro Puyat and Brigida Mesina, is of no
moment. The conveyance to the Tiongson spouses was by
onerous title, made during the lifetime of Genaro Puyat and
Brigida Mesina. The alleged inchoate right of succession from
Genaro Puyat and Brigida Mesina, which pertained only to
Macaria Puyat, is thus out of the question. To deny to the
petitioners the right of redemption recognized in Article 1620 of
the Civil Code is to defeat the purpose of minimizing co-
ownership and to contravene the public policy in this regard.
Moreover, it would result in disallowing the petitioners a way out
of what, in the words of Manresa," might be a disagreeable or
inconvenient association into which they have been thrust."
WHEREFORE, the ,judgment appealed from is hereby
REVERSED, and in lieu thereof, a new one is rendered declaring
the petitioners to be entitled to exercise the right of legal
redemption under Article 1620 of the Civil Code with respect to
the ONE-HALF (1/2) share sold by private respondent Genaro
Puyat and Brigida Mesina in favor of their co-respondents Primo
Tiongson and Macaria Puyat. The private respondents shall pay
the costs.
SO ORDERED.
Teehankee (Chairman), Makasiar, Melencio-Herrera, Plana,
Relova and Gutierrez, Jr., JJ., concur.
[G.R. No. L-49219. April 15, 1988.]
SPOUSES CONCEPCION FERNANDEZ DEL OCAMPO
and ESTANISLAO DEL CAMPO, plaintiffs-
appellees, vs. BERNARDA FERNANDEZ
ABESIA, defendant-appellant.
SYLLABUS
1. CIVIL LAW; ACCESSION; RIGHT OF A BUILDER IN
GOOD FAITH; NOT APPLICABLE WHERE CO-
OWNERSHIP EXISTS. Article 448 of the Civil Code cannot
apply where a co-owner builds, plants or sows on the land owned
in common for then he did not build, plant or sow upon land that
exclusively belongs to another but of which he is a co-owner. The
co-owner is not a third person under the circumstances, and the
situation is governed by the rules of co-ownership.
2. ID.; ID.; ID.; APPLICABLE WHERE CO-OWNERSHIP IS
TERMINATED. When, as in this case, the co-ownership is
terminated by the partition and it appears that the house of
defendants overlaps or occupies a portion of 5 square meters of
the land pertaining to plaintiffs which the defendants obviously
built in good faith, then the provisions of Article 448 of the new
Civil Code should apply. Manresa and Navarro Amandi agree
that the said provision of the Civil Code may apply even when
there was co-ownership if good faith has been established.
3. ID.; ID.; ID.; ID.; PAYMENT OF INDEMNITY. Applying
Article 448 of the Civil Code, the plaintiffs have the right to
appropriate said portion of the house of defendants upon payment
of indemnity to defendants as provided for in Article 546 of the
Civil Code. Otherwise, the plaintiffs may oblige the defendants to
pay the price of the land occupied by their house. However, if the
price asked for is considerably much more than the value of the
portion of the house of defendants built thereon, then the latter
cannot be obliged to buy the land. The defendants shall then pay
the reasonable rent to the plaintiffs upon such terms and
conditions that they may agree. In case of disagreement, the trial
court shall fix the terms thereof. Of course, defendants may
demolish or remove the said portion of their house, at their own
expense, if they so decide.


In this appeal from the decision of the Court of First Instance
(CFI) of Cebu, certified to this Court by the Court of Appeals on
account of the question of law involved, the sole issue is the
applicability of the provisions of Article 448 of the Civil Code
relating to a builder in good faith when the property involved is
owned in common.
This case involves a parcel of land, Lot No. 1161 of the Cadastral
Survey of Cebu, with an area of only about 45 square meters,
situated at the corner of F. Flores and Cavan Streets, Cebu City
covered by TCT No. 61850. An action for partition was filed by
plaintiffs in the CFI of Cebu. Plaintiffs and defendants are co-
owners pro indiviso of this lot in the proportion of 2/3 and 1/3
share each, respectively. The trial court appointed a commissioner
in accordance with the agreement of the parties. The said
commissioner conducted a survey, prepared a sketch plan and
submitted a report to the trial court on May 29, 1976,
recommending that the property be divided into two lots: Lot
1161-A with an area of 30 square meters for plaintiffs and Lot
No. 1161-B with an area of 15 square meters for the defendants.
The houses of plaintiffs and defendants were surveyed and shown
on the sketch plan. The house of defendants occupied the portion
with an area of 5 square meters of Lot 1161-A of plaintiffs. The
parties manifested their conformity to the report and asked the
trial court to finally settle and adjudicate who among the parties
should take possession of the 5 square meters of the land in
question.
In solving the issue the trial court held as follows:
"The Court believed that the plaintiffs cannot be obliged
to pay for the value of the portion of the defendant's
house which has encroached an area of five (5) sq.
meters of the land allotted to them. The defendants
cannot also be obliged to pay for the price of the said
five (5) square meters. The rights of a builder in good
faith under Article 448 of the New Civil Code does (sic)
not apply to a case where one co-owner has built,
planted or sown on the land owned in common.
'Manresa agreeing with Sanchez Roman, says that as a
general rule this article is not applicable because the
matter should be governed more by the provisions on
co-ownership than on accession. Planiol and Ripert are
also of the opinion that this article is not applicable to a
co-owner who constructs, plants or sows on the
community property, even if the land where the
construction, planting or sowing is made is later allotted
to another co-owner in the partition. The co-owner is not
a third person under the circumstances, and the situation
is governed by the rules of co-ownership. Our Court of
Appeals has held that this article cannot be invoked by
one co-owner against another who builds, plants or sows
upon their land, since the latter does not do so on land
not belonging to him.' (Tolentino, Civil Code of the
Philippines, Vol. II, p. 102, citing 3 Manresa 215, 3
Planiol and Ripert 245, and Viuda de Arias vs. Aguilar,
(C A.), O.G. Supp., Aug. 30, 1941, p. 126). In the light
of the foregoing authorities and considering that the
defendants have expressed their conformity to the
partition that was made by the commissioner as shown
in the sketch plan attached to the commissioner's report,
said defendants have no other alternative except to
remove and demolish part of their house that has
encroached an area of five (5) sq. meters of the land
allotted to the plaintiffs. LLphil
"WHEREFORE, judgment is hereby rendered assigning
Lot 1161-A with an area of thirty (30) sq. meters to the
plaintiffs spouses Concepcion Fernandez del Campo and
Estanislao del Campo and Lot 1161-B with an area of
fifteen (15) sq. meters to the defendants Bernarda
Fernandez Abesia, Lourdes Fernandez Rodil, Genaro
Fernandez and Dominga A. Fernandez, in the respective
metes and bounds as shown in the subdivision sketch
plan attached to the Commissioner's Report dated May
29, 1976 prepared by the Commissioner, Geodetic
Engineer Espiritu Bunagan. Further, the defendants are
hereby ordered at their expense to remove and demolish
part of their house which has encroached an area of five
(5) square meters from Lot 1161-A of the plaintiffs;
within sixty (60) days from date hereof and to deliver
the possession of the same to the plaintiffs. For the
Commissioner's fee of P400.00, the defendants are
ordered to pay, jointly and severally, the sum of P133.33
and the balance thereof to be paid by the plaintiffs. The
costs of suit shall be paid by the plaintiffs and the
defendants in the proportion of two-thirds (2/3) and one-
third (1/3) shares respectively. A certified copy of this
judgment shall be recorded in the office of the Register
of Deeds of the City of Cebu and the expense of such
recording shall be taxed as a part of the costs of the
action."
Hence, this appeal interposed by the defendants with the
following assignments of errors:
"I
THE TRIAL COURT ERRED IN NOT APPLYING
THE RIGHTS OF A BUILDER IN GOOD FAITH
UNDER ART. 448 OF THE NEW CIVIL CODE TO
DEFENDANTS-APPELLANTS WITH RESPECT TO
THAT PART OF THEIR HOUSE OCCUPYING A
PORTION OF THE LOT ASSIGNED TO
PLAINTIFFS-APPELLEES.
II
THE TRIAL COURT ERRED IN ORDERING
DEFENDANTS-APPELLANTS TO REMOVE AND
DEMOLISH AT THEIR EXPENSE, THAT PART OF
THEIR HOUSE WHICH HAS ENCROACHED ON
AN AREA OF FIVE SQUARE METERS OF LOT
1161-A OF PLAINTIFFS-APPELLEES."
Article 448 of the New Civil Code provides as follows:
"Art. 448. The owner of the land on which
anything has been built, sown, or planted in
good faith, shall have the right to
appropriate as his own the works, sowing or
planting, after payment of the indemnity
provided for in articles 546 and 548, or to
oblige the one who built or planted to pay
the price of the land, and the one who
sowed, the proper rent. However, the builder
or planter cannot be obliged to buy the land
if its value is considerably more than that of
the building or trees. In such case, he shall
pay reasonable rent, if the owner of the land
does not choose to appropriate the building
or trees after proper indemnity. The parties
shall agree upon the terms of the lease and
in case of disagreement, the court shall fix
the terms thereof." LexLib
The court a quo correctly held that Article 448 of the Civil Code
cannot apply where a co-owner builds, plants or sows on the land
owned in common for then he did not build, plant or sow upon
land that exclusively belongs to another but of which he is a co-
owner. The co-owner is not a third person under the
circumstances, and the situation is governed by the rules of co-
ownership. 1
However, when, as in this case, the co-ownership is terminated by
the partition and it appears that the house of defendants overlaps
or occupies a portion of 5 square meters of the land pertaining to
plaintiffs which the defendants obviously built in good faith, then
the provisions of Article 448 of the new Civil Code should apply.
Manresa and Navarro Amandi agree that the said provision of the
Civil Code may apply even when there was co-ownership if good
faith has been established. 2
Applying the afore-said provision of the Civil Code, the plaintiffs
have the right to appropriate said portion of the house of
defendants upon payment of indemnity to defendants as provided
for in Article 546 of the Civil Code. Otherwise, the plaintiffs may
oblige the defendants to pay the price of the land occupied by
their house. However, if the price asked for is considerably much
more than the value of the portion of the house of defendants built
thereon, then the latter cannot be obliged to buy the land. The
defendants shall then pay the reasonable rent to the plaintiffs
upon such terms and conditions that they may agree. In case of
disagreement, the trial court shall fix the terms thereof. Of course,
defendants may demolish or remove the said portion of their
house, at their own expense, if they so decide.

WHEREFORE, the decision appealed from is hereby MODIFIED
by ordering plaintiffs to indemnify defendants for the value of the
said portion of the house of defendants in accordance with Article
546 of the Civil Code, if plaintiffs elect to appropriate the same.
Otherwise, the defendants shall pay the value of the 5 square
meters of land occupied by their house at such price as may be
agreed upon with plaintiffs and if its value exceeds the portion of
the house that defendants built thereon, the defendants may
choose not to buy the land but defendants must pay a reasonable
rental for the use of the portion of the land of plaintiffs as may be
agreed upon between the parties. In case of disagreement, the rate
of rental shall be determined by the trial court. Otherwise,
defendants may remove or demolish at their own expense the said
portion of their house. No costs. cdrep
SO ORDERED.
Teehankee, C.J., Narvasa, Cruz and Grio-Aquino, JJ., concur.

[G.R. No. 78178. April 15, 1988.]
DELIA BAILON-CASILAO, LUZ PAULINO-ANG,
EMMA PAULINO-YBANEZ, NILDA PAULINO-
TOLENTINO, and SABINA BAILON, petitioners, vs. THE
HONORABLE COURT OF APPEALS and CELESTINO
AFABLE, respondents.
1. CIVIL LAW; CO-OWNERSHIP; SALE OR DISPOSITION
OF ENTIRE PROPERTY AFFECTS ONLY HIS UNDIVIDED
SHARE. If a co-owner sells the whole property as his, the sale
will affect only his own share but not those of the other co-
owners who did not consent to the sale [Punsalan v. Boon Liat, 44
Phil. 320 (1923)]. The sale or other disposition affects only his
undivided share and the transferee gets only what would
correspond to his grantor in the partition of the thing owned in
common. [Ramirez v. Bautista, 14 Phil. 528 (1909)], thereby
making him a co-owner of the property.
2. ID.; ID.; RECOURSE OF A CO-OWNER WHERE THE
ENTIRE PROPERTY WAS SOLD WITHOUT HIS CONSENT.
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 undivided shares of some of the co-owners is
an action for PARTITION under Rule 69 of the Revised Rules of
Court. Neither recovery of possession nor restitution can be
granted since the defendant buyers are legitimate proprietors and
possessors in joint ownership of the common property claimed
[Ramirez v. Bautista, supra].
3. REMEDIAL LAW; ACTION FOR PARTITION,
IMPRESCRIPTIBLE. An action for petition is imprescriptible
or cannot be barred by prescription [Article 494 of the Civil
Code; See also Budlong v. Bontoc (G.R. No. L-27702, September
9, 1977, 79 SCRA 24)].
4. ID.; PRESCRIPTION; WILL NOT LIE AGAINST
REGISTERED LAND. Prescription will not lie in favor of
respondent as against the petitioners who remain the registered
owners of the disputed parcel of land pursuant to Act No.
496 which expressly provides that "(n)o title to registered land in
derogation to that of the registered owner shall be acquired by
prescription or adverse possession."
5. ID.; ID.; ID.; MAY BE INVOKED BY ITS REGISTERED
OWNER AND HIS HEIRS. If prescription is unavailing
against the registered owner, it must be equally unavailing against
the latter's hereditary successors, because they merely step into
the shoes of the decedent by operation of law (New Civil Code,
Article 777; Old Civil Code, Article 657), the title or right
undergoing no change by its transmission mortis causa. [Atus, et
al., v. Nunez, et al., 97 Phil. 762, 764; Umbay v. Alecha, G.R. No.
67284, March 18, 1985, 135 SCRA 427, 429).
6. CIVIL LAW; LACHES; ELEMENTS. The four basic
elements of laches, namely: (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
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 [Go Chi Gun, et al. v. Co Cho, et al.,
96 Phil. 622 (1955)].
7. ID.; ID.; MUST BE INVOKED BY PARTY IN GOOD
FAITH. Laches being an equitable defense, he who invokes it
must come to the court with clean hands.
8. ID.; ID.; MERE FACT OF DELAY, NOT SUFFICIENT.
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.
9. ID.; LAND TITLES AND DEEDS; LAND REGISTRATION;
ALL PERSONS DEALING WITH REGISTERED LAND HAS
ONLY TO RELY ON THE FACE OF TITLE; ACTUAL
KNOWLEDGE OF FLAW NECESSITATES FURTHER
INQUIRY; EFFECT OF ABSENCE OF INQUIRY. 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 cautious man to make such inquiry. [Gonzales v. IAC
and Rural Bank of Pavia, Inc., G.R. No. 69622, January 29,
1988]. The buyer's failure to exercise even a minimum degree of
ordinary prudence required by the situation, operates against him
and any prejudice or injury that may be occasioned to him by
such sale must be borne by him.


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.
The petitioners herein filed a case for recovery of property and
damages with notice of lis pendens on March 13, 1981 against the
defendant and herein private respondent, Celestino Afable. The
parcel of land involved in this case, with an area of 48,849 square
meters, is covered by Original Certificate of Title No. 1771 issued
on June 12, 1931, in the names of Rosalia, Gaudencio, Sabina,
Bernabe, Nenita and Delia, all surnamed Bailon, as co-owners,
each with a 1/6 share. Gaudencio and Nenita are now dead, the
latter being represented in this case by her children, Luz, Emma
and Nilda. Bernabe went to China in 1931 and had not been heard
from since then [Decision of the Court of Appeals, Rollo, p. 39].
It appears that on August 23, 1948, Rosalia Bailon and Gaudencio
Bailon sold a portion of the said land consisting of 16,283 square
meters to Donato Delgado. On May 13, 1949, Rosalia Bailon
alone sold the remainder of the land consisting of 32,566 square
meters to Ponciana V. Aresgado de Lanuza. On the same date,
Lanuza acquired from Delgado the 16,283 square meters of land
which the latter had earlier acquired from Rosalia and Gaudencio.
On December 3, 1975, John Lanuza, acting under a special power
of attorney given by his wife, Ponciana V. Aresgado de Lanuza,
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. It appears that said land had been successively
declared for taxation first, in the name of Ciriaca Dellamas,
mother of the registered co-owners, then in the name of Rosalia
Bailon in 1924, then in that of Donato Delgado in 1936, then in
Ponciana de Lanuza's name in 1962 and finally in the name of
Celestino Afable, Sr. in 1983.
In his answer to the complaint filed by the herein petitioners,
Afable claimed that he had acquired the land in question through
prescription and contended that the petitioners were guilty of
laches. He later filed a third-party complaint against Rosalia
Bailon for damages allegedly suffered as a result of the sale to
him of the land.
After trial, the lower court rendered a decision:
1. Finding and declaring Celestino Afable, a co-owner
of the land described in paragraph III of the complaint
having validly bought the two-sixth (2/6) respective
undivided shares of Rosalia Bailon and Gaudencio
Bailon;
2. Finding and declaring the following as pro-indiviso
co-owners, having 1/6 share each, of the property
described in paragraph III of the complaint, to wit:
a. Sabina Bailon
b. Bernabe Bailon
c. Heirs of Nenita Bailon-Paulino
d. Delia Bailon-Casilao;
3. Ordering the segregation of the undivided interests in
the property in order to terminate co-ownership to be
conducted by any Geodetic Engineer selected by the
parties to delineate the specific part of each of the co-
owners.
4. Ordering the defendant to restore the possession of
the plaintiffs' respective shares as well as all attributes
of absolute dominion;
5. Ordering the defendant to pay the following:
a. P5,000.00 as damages;
b. P2,000.00 as attorney's fees and;
c. to pay the costs.
On appeal, the respondent Court of Appeals affirmed the decision
of the lower court insofar as it held that prescription does not lie
against plaintiffs-appellees because they are co-owners of the
original vendors. However, the appellate court declared that,
although registered property cannot be lost by prescription,
nevertheless, an action to recover it may be barred by laches,
citing the ruling in Mejia de Lucaz v. Gamponia [100 Phil. 277
(1956)]. Accordingly, it held the petitioners guilty of laches and
dismissed their complaint. Hence, this petition for review on
certiorari of the decision of the Court of Appeals. cdrep
The principal issue to be resolved in this case concerns the
applicability of the equitable doctrine of laches. Initially though, 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 Article 493 of the Civil Code. Thus:
Art. 493. Each co-owner shall have the full ownership of
his part and of the fruits and benefits pertaining thereto,
and he may therefore alienate, assign or mortgage it and
even substitute another person 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 supplied.]
As early as 1923, this Court has ruled that even if a co-owner
sells the whole property as his, the sale will affect only his own
share but not those of the other co-owners who did not consent to
the sale [Punsalan v. Boon Liat, 44 Phil. 320 (1923)]. This is
because under the aforementioned codal provision, the sale or
other disposition affects only his undivided share and the
transferee gets only what would correspond to his grantor in the
partition of the thing owned in common. [Ramirez v. Bautista, 14
Phil. 528 (1909)]. Consequently, by virtue of the sales made by
Rosalia and Gaudencio Bailon which are valid with respect to
their proportionate shares, and the subsequent transfers which
culminated in the sale to private respondent Celestino Afable, the
said Afable thereby became a co-owner of the disputed parcel of
land as correctly held by the lower court since the sales produced
the effect of substituting the buyers in the enjoyment thereof
[Mainit v. Bandoy, 14 Phil. 730 (1910)].

From the foregoing, it may be deduced that since a co-owner is
entitled to sell his undivided share, a sale of the entire property by
one co-owner without the consent of the other co-owners is not
null and void. However, only the rights of the co-owner-seller are
transferred, thereby making the buyer a co-owner of the property.
The proper action in cases like this is not for the
nullification of the sale or for the recovery of the thing
owned in common from the third person who substituted the
co-owner or co-owners who alienated their shares, but the
DIVISION of the common property as of it continued to
remain in the possession of the co-owners who possessed
and administered it [Mainit v. Bandoy, supra.]
Thus, it is now settled that the appropriate recourse of co-owners
in cases where their consent were not secured in a sale of the
entire property as well as in a sale merely of undivided shares of
some of the co-owners is an action for PARTITION under Rule
69 of the Revised Rules of Court. Neither recovery of possession
nor restitution can be granted since the defendant buyers are
legitimate proprietors and possessors in joint ownership of the
common property claimed [Ramirez v. Bautista, supra].
As to the action for petition, neither prescription nor laches can be
invoked.
In the light of the attendant circumstances, defendant-appellee's
defense of prescription is a vain proposition. Pursuant to Article
494 of the Civil Code, "(n)o 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." [Emphasis supplied.] In Budlong v. Bondoc [G.R.
No. L-27702, September 9, 1977, 79 SCRA 241, this Court has
interpreted said provision of law to mean that the action for
partition is imprescriptible or cannot be barred by prescription.
For 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."
Furthermore, the disputed parcel of land being registered under
the Torrens System, the express provision of Act No. 496 that
"(n)o title to registered land in derogation to that of the registered
owner shall be acquired by prescription or adverse possession" is
squarely applicable. Consequently, prescription will not lie in
favor of Afable as against the petitioners who remain the
registered owners of the disputed parcel of land. LibLex
It is argued however, that as to the petitioners Emma, Luz and
Nelda who are not the registered co-owners but merely
represented their deceased mother, the late Nenita Bailon,
prescription lies. Respondents bolster their argument by citing a
decision of this Court in Pasion v. Pasion [G.R. No. L-15757,
May 31, 1961, 2 SCRA 486, 489] holding that "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 the same."
Reliance on the aforesaid Pasion case is futile. The ruling therein
applies only against transferees other than direct issues or heirs or
to complete strangers. The rationale is clear:
If prescription is unavailing against the
registered owner, it must be equally
unavailing against the latter's hereditary
successors, because they merely step into
the shoes of the decedent by operation of
law (New Civil Code, Article 777; Old Civil
Code, Article 657), the title or right
undergoing no change by its
transmission mortis causa. [Atus, et al., v.
Nunez, et al., 97 Phil. 762, 764].
The latest pronouncement of this Court in Umbay v. Alecha [G.R.
No. 67284, March 18, 1985, 135 SCRA 427, 429], which was
promulgated subsequent to the Pasion case reiterated
the Atus doctrine. Thus:
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. [Barcelona v.
Barcelona, 100 Phil. 251, 257].
Laches is likewise unavailing as a shield against the action of
herein petitioners.
Well-stated in this jurisdiction are the four basic elements of
laches, namely: (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 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
[Go Chi Gun, et al. v. Co Cho, et al., 96 Phil. 622 (1955)].
While the first and last elements are present in this case, the
second and third elements are missing.
The second element speaks of delay in asserting the complainant's
rights. However, 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. This court has pointed out that laches is not
concerned with the mere lapse of time. Thus:
Laches has been 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. [Tijam, et al., v. Sibonghanoy, G.R.
No. L-21450, April 25, 1968, 23 SCRA 29,
35; Tejido v. Zamacoma, G.R. No. L-63048,
August 7, 1985, 138 SCRA 73, 90]. cdphil
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,"
[Tijam v. Sibonghanoy, supra, p. 351.
[Emphasis supplied.]
It must be noted that 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. In
the first place, petitioners had no notice of the sale made by their
eldest sister. It is undisputed that the petitioner co-owners had
entrusted the care and management of the parcel of land to
Rosalia Bailon who was the oldest among them [TSN, July 27,
1983, p. 14]. In fact, Nicanor Lee, a son of Rosalia, who was
presented as a witness by the plaintiffs-petitioners, testified on
cross-examination that his mother was only the administrator of
the land as she is the eldest and her brothers and sisters were
away [TSN, October 5, 1983, p. 15]. Indeed, when Delia Bailon-
Casilao left Sorsogon in 1942 after she got married, it was only in
1983 that she returned. Sabina, on the other hand, is said to be
living in Zamboanga while Bernabe who left for China in 1931
has not been heard from since then. Consequently, when Rosalia,
from whom the private respondent derived his title, made the
disputed sales covering the entire property, the herein petitioners
were unaware thereof.
In the second place, they were not afforded an opportunity to
bring suit inasmuch as until 1981, they were kept in the dark
about the transactions entered into by their sister. It was only
when Delia Bailon-Casilao returned to Sorsogon in 1981 that she
found out about the sales and immediately, she and her co-
petitioners filed the present action for recovery of property. The
appellate court thus erred in holding that "the petitioners did
nothing to show interest in the land." For the administration of the
parcel of land was entrusted to the oldest co-owner who was then
in possession thereof precisely because the other co-owners
cannot attend to such a task as they reside outside of Sorsogon
where the land is situated. Her co-owners also allowed her to
appropriate the entire produce for herself because it was not even
enough for her daily consumption [TSN, October 5, 1983, pp. 17-
18]. And since petitioner was the one receiving the produce, it is
but natural that she was the one to take charge of paying the real
estate taxes. Now, if knowledge of the sale by Rosalia was
conveyed to the petitioners only later, they cannot be faulted for
the acts of their co-owner who failed to live up to the trust and
confidence expected of her. In view of the lack of knowledge by
the petitioners of the conduct of Rosalia in selling the land
without their consent in 1975 and the absence of any opportunity
to institute the proper action until 1981, laches may not be
asserted against the petitioners. prLL
The third element of laches is likewise absent. There was no lack
of knowledge or notice on the part of the defendant that the
complainants would assert the right on which they base the suit.
On the contrary, private respondent 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 sell was granted
to the two sellers by the other co-owners.
Even as the land here was misrepresented in the deeds of sale as
"unregistered," the truth was that Afable already had notice that
the land was titled in the name of six persons by virtue of the
Certificate of Title which was already in his possession even
before the sale. Such fact is apparent from his testimony before
the court a quo:
COURT:
Q From whom did you get the certificate of Title?

A When it was mortgaged by Ponciana Aresgado.
Q It was mortgaged to you before you bought it?
A Yes, Your Honor. (TSN, March 5, 1984, p. 12) When
cross-examined, he stated:
Q Mr. Witness, the original Certificate of Title was
given to you in the year 1974, was it not?
A 1975.
Q In 1975, you already discovered that the title was in
the name of several persons, is it not?
A Yes, sir.
Q When you discovered that it is in the name of several
persons, you filed a case in court for authority to cancel
the title to be transferred in your name, is it not?
A Yes, sir. LLjur
Q And that was denied by the Court of First Instance of
Sorsogon because there was only one signatory to the
deed of sale instead of six, was it not?
A Not one but two signatories.

Such actual knowledge of the existence of other co-owners in
whose names the lot subject of the sale was registered should
have prompted a searching inquiry by Afable considering the
well-known rule in this jurisdiction that:
. . . 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 cautious man to
make such inquiry. [Gonzales v. IAC and
Rural Bank of Pavia, Inc., G.R. No. 69622,
January 29, 1988].
Moreover, the undisputed fact is that petitioners are relatives of
his wife. As a genuine gesture of good faith, he should have
contacted the petitioners who were still listed as co-owners in the
certificate of title which was already in his possession even before
the sale. In failing to exercise even a minimum degree of ordinary
prudence required by the situation, he is deemed to have bought
the lot at his own risk. Hence any prejudice or injury that may be
occasioned to him by such sale must be borne by him.
Indeed, aware of the flaws impairing his title, Afable went to the
herein petitioner Delia Bailon-Casilao, asking the latter to sign a
document obviously to cure the flaw [TSN, July 27, 1983, p. 6].
Later, he even filed a petition in the Court of First Instance to
register the title in his name which was denied as aforesaid.
It may be gleaned from the foregoing examination of the facts
that Celestino Afable is not a buyer in good faith. Laches being an
equitable defense, he who invokes it must come to the court with
clean hands. Cdpr
WHEREFORE, the petition for certiorari is hereby GRANTED,
the challenged decision of the Court of Appeals is SET ASIDE,
and the decision of the trial court is REINSTATED.
SO ORDERED.
Fernan, Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
||| (Delia Bailon-Casilao v. Court of Appeals, G.R. No. 78178,
April 15, 1988)

[G.R. No. L-29727. December 14, 1988.]
PEDRO OLIVERAS, TEODORA GASPAR,
MELECIO OLIVERAS and ANICETA
MINOR, plaintiffs-appellees, vs. CANDIDO LOPEZ,
SEVERO LOPEZ, HIPOLITO LOPEZ, EUGENIA
LOPEZ, PRIMITIVO GASPAR, CORAZON
LOPEZ, ALEJANDRO CACAYURIN, FAUSTINA
BOTUYAN, MODESTO SALAZAR, ADORACION
BOTUYAN, CLAUDIO GANOTICE and ENONG
BOTUYAN, defendants-appellants.
Venancio B. Fernando for defendants-appellants.
SYLLABUS
1. CIVIL LAW; PROPERTY; CO-OWNERSHIP; AN
INDIVIDUAL CO-OWNER CANNOT CLAIM A DEFINITE
PORTION OF SUBJECT PROPERTY BEFORE PARTITION.
In a long line of decisions, this Court has held that before the
partition of a land or thing held in common, no individual co-
owner can claim title to any definite portion thereof. All that the
co-owner has is an ideal or abstract quota or proportionate share
in the entire land or thing.
2. ID.; ID.; ID.; SHOULD NOT EXCEED A PERIOD OF
TWENTY (20) YEARS; CASE AT BAR. The duration of the
juridical condition of co-ownership is not limitless. Under Article
494 and 1083 of the Civil Code, co-ownership of an estate should
not exceed the period of twenty (20) years. And, under the former
article, any agreement to keep a thing or property undivided
should be for a ten-year period only. Where the parties stipulate a
definite period of indivision which exceeds the maximum allowed
by law, said stipulation shall be void only as to the period beyond
such maximum. In the instant case, the heirs of Lorenzo Lopez
maintained the co-ownership for more than twenty years. We
hold that when Candido and his mother (who died before the
filing of the complaint for partition) sold definite portions of Lot
4685, they validly exercised dominion over them because, by
operation of law, the co-ownership had ceased.
3. REMEDIAL LAW; ACTION FOR PARTITION; TIMELY
FILED IN CASE AT BAR. The action for partition has not
prescribed. Although the complaint was filed thirteen years from
the execution of the deeds of sale and hence, as contended by the
defendants-appellants, prescription might have barred its filing
under the general provision of Article 1144 (a) of the Civil Code,
Article 494 specifically mandates that each co-owner may
demand at any time the partition of the thing owned in common
insofar as his share is concerned. Hence, considering the validity
of the conveyances of portions of Lot 4685 in their favor and as
subrogees of Candido Lopez, the Oliverases' action for partition
was timely and properly filed.
4. SUPREME COURT; RESOLUTION DIRECTING PARTY
TO "MOVE IN THE PREMISES", EXPLAINED. For the
enlightenment of said counsel and all others of similar perception,
a "move in the premises" resolution is not a license to occupy or
enter the premises subject of litigation especially in cases
involving real property. A "move in the premises" resolution
simply means what is stated therein: the parties are obliged to
inform the Court of developments pertinent to the case which
may be of help to the Court in its immediate disposition.
This case exemplifies the Filipino custom of keeping inherited
property in a prolonged juridical condition of co-ownership. prLL
Lorenzo Lopez owned Lot 4685 of the Cadastral survey of
Villasis, Pangasinan with an area of 69,687 square meters as
evidenced by Original Certificate of Title No. 15262. 1 In
December, 1931, Lorenzo Lopez died, 2 leaving said property to
his wife, Tomasa Ramos and six (6) children. From that time on,
the heirs of Lorenzo Lopez did not initiate any moves to legally
partition the property.
More than twenty-one years later, or on February 11, 1953,
Tomasa Ramos and her eldest son, Candido Lopez, executed a
deed of absolute sale of the "eastern undivided four thousand two
hundred and fifty seven-square meters (4,257) more or less, of the
undivided portion of (their) interests, rights and participation"
over Lot 4685, in favor of the spouses Melecio Oliveras and
Aniceta Minor, in consideration of the amount of one thousand
pesos (P1,000). 3
On the same day, Tomasa and Candido executed another deed of
absolute sale of the "undivided" four thousand two hundred and
fifty-seven (4,257) square meters of the "eastern part" of Lot 4685
in favor of the spouses Pedro Oliveras and Teodora Gaspar, also
in consideration of P1,000. 4 Each of the said documents bear the
thumbmark of Tomasa and the signature of Candido.
In his affidavit also executed on February 11, 1953, Candido
stated that a month prior to the execution of the deed of sale in
favor of Melecio Oliveras, he offered his: "undivided portion" of
Lot 4685 to his "adjacent owners" but none of them was "in a
position to purchase" said property. 5
Since the execution of the two deeds of absolute sale, the
vendees, brothers Melecio and Pedro, had been paying the real
property taxes for their respectively purchased properties. 6 They
also had been in possession of their purchased properties which,
being planted to palay and peanuts, were segregated from the rest
of Lot 4685 by dikes. 7
More than thirteen years later or on November 21, 1966, the
counsel of the Oliveras brothers wrote the heirs of Lorenzo Lopez
reminding them of the Oliverases' demands to partition the
property so that they could acquire their respective titles thereto
without resorting to court action, and that, should they fail to
respond, he would be forced to file a case in court. 8 Apparently,
the Lopezes did not answer said letter since on December 15,
1966, the Oliveras brothers and their wives filed a complaint for
partition and damages 9 in the Court of First Instance of
Pangasinan. 10
The Oliverases stated in their complaint that possession of the
disputed properties was delivered to them with the knowledge and
consent of the defendants; that they had been paying the real
estate taxes thereon; that prior to the sale, said properties were
offered to the other co-owners for sale but they refused to buy
them; that on February 18, 1953, the transactions were duly
annotated and entered in the Memorandum of encumbrances of
OCT No. 15262 as adverse claims; and that their desire to
segregate the portions of Lot 4685 sold to them was frustrated by
defendants' adamant refusal to lend them the owner's duplicate of
OCT No. 15262 and to execute a deed of partition of the whole
lot. prcd
In claiming moral damages in the amount of P2,000.00 plaintiffs
alleged that defendants also refused to allow them to survey and
segregate the portions bought by them. Plaintiffs prayed that the
court order the defendants to partition Lot 4685 and to allow them
to survey and segregate the portions they had purchased. They
also demanded payment of P800.00 as attorney's fees and cost of
the suit.
In their answer, the defendants alleged that no sale ever transpired
as the alleged vendors could not have sold specific portions of the
property; that plaintiffs' possession and occupation of specific
portions of the properties being illegal, they could not ripen into
ownership; and that they were not under any obligation to lend
their copy of the certificate of title or to accede to plaintiffs'
request for the partition or settlement of the property. As special
and affirmative defenses, the defendants contended that the deeds
of sale were null and void and hence, unenforceable against them;
that the complaint did not state a cause of action and that the
cause or causes of action, if any, had prescribed.
Defendants averred in their counterclaim that despite repeated
demands, plaintiffs refused and failed to vacate the premises; that
the properties occupied by the plaintiffs yielded an average net
produce in palay and peanuts in the amount of P1,600.00
annually, and that the complaint was filed to harass them. They
prayed for the dismissal of the complaint and the payment of
P1,600.00 per year from 1953 until plaintiffs shall have vacated
the premises and P1,000.00 for attorney's fees. Cdpr
Plaintiffs filed an answer to defendants' counterclaim, denying all
the allegations therein and stating that defendants never
demanded that plaintiffs vacate the portions of Lot 4685 they had
bought.
The lower court explored the possibility of an amicable settlement
between the parties without success. Hence, it set the case for trial
and thereafter, it rendered a decision 11declaring valid the deeds
of absolute sale 12 and ordering the defendants to allow the
segregation of the sold portions of Lot 4685 by a licensed
surveyor in order that the plaintiffs could obtain their respective
certificates of title over their portions of said lot.
In resolving the case, the lower court passed upon the issue of
whether the two deeds of absolute sale were what they purported
to be or merely mortgage documents. It considered as indicia of
plaintiffs' absolute dominion over the portions sold to them their
actual possession thereof without any opposition from the
defendants until the filing of the complaint, their payment of taxes
thereon and their having benefited from the produce of the land.
The court ruled that the defendants' testimonial evidence that the
deeds in question were merely mortgage documents cannot
overcome the evidentiary value of the public instruments
presented by the plaintiffs.
On the issue of whether the two deeds of absolute sale were null
and void considering that the land subject thereof had not yet
been partitioned, the court observed that the total area of 8,514
square meters sold to plaintiffs by Candido was less than his share
should Lot 4685 with an area of 69,687 square meters be divided
among the six children of Lorenzo Lopez and their mother. In this
connection, the lower court also found that during his lifetime,
and before Candido got married, Lorenzo Lopez had divided Lot
4685 among his children who then took possession of their
respective shares. *
The defendants appealed said decision to this Court contending
that the lower court erred in declaring the two deeds of absolute
sale as valid, in ordering the segregation of the sold portions of
Lot 4685 to enable the plaintiffs to obtain their respective
certificates of title, and in not considering their defense of
prescription.

The extrinsic validity of the two deeds of absolute sale is not in
issue in this case in view of the finding of the trial court that the
defendants admittedly do not question their due
execution. 13 What should pre-occupy the Court is the intrinsic
validity of said deeds insofar as they pertain to sales of designated
portions of an undivided, co-owned property.
In a long line of decisions, this Court has held that before the
partition of a land or thing held in common, no individual co-
owner can claim title to any definite portion thereof. All that the
co-owner has is an ideal or abstract quota or proportionate share
in the entire land or thing. 14
However, the duration of the juridical condition of co-ownership
is not limitless. Under Article 494 and 1083 of the Civil Code, co-
ownership of an estate should not exceed the period of twenty
(20) years. And, under the former article, any agreement to keep a
thing or property undivided should be for a ten-year period only.
Where the parties stipulate a definite period of indivision which
exceeds the maximum allowed by law, said stipulation shall be
void only as to the period beyond such maximum. 15
Although the Civil Code is silent as to the effect of the indivision
of a property for more than twenty years, it would be contrary to
public policy to sanction co-ownership beyond the period set by
the law. Otherwise, the 20-year limitation expressly mandated by
the Civil Code would be rendered meaningless. cdphil
In the instant case, the heirs of Lorenzo Lopez maintained the co-
ownership for more than twenty years. We hold that when
Candido and his mother (who died before the filing of the
complaint for partition) sold definite portions of Lot 4685, they
validly exercised dominion over them because, by operation of
law, the co-ownership had ceased. The filing of the complaint for
partition by the Oliverases who, as vendees, are legally
considered as subrogated to the rights of Candido over portions of
Lot 4685 in their possession, 16 merely served to put a stamp of
formality on Candido's otherwise accomplished act of terminating
the co-ownership.
The action for partition has not prescribed. Although the
complaint was filed thirteen years from the execution of the deeds
of sale and hence, as contended by the defendants-appellants,
prescription might have barred its filing under the general
provision of Article 1144 (a) of the Civil Code, Article 494
specifically mandates that each co-owner may demand at any
time the partition of the thing owned in common insofar as his
share is concerned. Hence, considering the validity of the
conveyances of portions of Lot 4685 in their favor and as
subrogees of Candido Lopez, the Oliverases' action for partition
was timely and properly filed. 17
We cannot write finis to this decision without commenting on the
compliance with the resolution of September 1, 1986 of counsel
for defendants-appellants. In said resolution, the court required
the parties to move in the premises "considering the length of
time that this case has remained pending in this Court and to
determine whether or not there might be supervening events
which may render the case moot and academic." 18 In his
manifestation and motion dated August 12, 1987, said counsel
informed the Court that he had contacted the defendants-
appellants whom he advised "to move in the premises which is
the land in question and to maintain the status quo with respect to
their actual possession thereon" and that he had left a copy of said
resolution with the defendants-appellants" for their guidance in
the compliance of their obligations (sic) as specified in said
resolution." 19
Obviously, said counsel interpreted literally the Court's directive
"to move in the premises." For the enlightenment of said counsel
and all others of similar perception, a "move in the premises"
resolution is not a license to occupy or enter the premises subject
of litigation especially in cases involving real property. A "move
in the premises" resolution simply means what is stated therein:
the parties are obliged to inform the Court of developments
pertinent to the case which may be of help to the Court in its
immediate disposition. LibLex
WHEREFORE, the decision of the lower court insofar as it
declares the validity of the two deeds of sale and directs the
partition of Lot 4685, is AFFIRMED. The lower court is hereby
ordered to facilitate with dispatch the preparation of a project of
partition which it should thereafter approve. This decision is
immediately executory. No costs.
SO ORDERED.
Gutierrez, Jr., Bidin and Cortes, JJ., concur.

[G.R. No. 40064. December 4, 1934.]
RESURRECTION TAGARAO,
BUENAVENTURA TAGARAO and
SERAFIN TAGARAO, plaintiffs-
appellees, vs. MARCOS GARCIA ET
AL., defendants. MARGARITA GARCIA,
ROSARIO GARCIA, DOLORES
RUFINO, and ELEUTERIO
RUFINO, appellants.
Vicente T. Remitio for appellant E. Rufino.
Rafael P. Guerrero for appellees.
SYLLABUS
1. PRESCRIPTION OF ACTION; DISABILITY
OF A COOWNER DOES NOT SAVE ANOTHER
COOWNER WHO IS "SUI JURIS" FROM THE EFFECTS
OF THE STATUTE OF LIMITATIONS. The disability
which protects an heir from the effects of prescription is no
protection to co-heirs, or in other words, using the same
language of the author of the footnotes on the decision
rendered in the case of Moore vs. Armstrong, reported in 36
Am. Dec., 63, 78, wherein the Supreme Court of the State of
Ohio from which section 42 of Act No. 190 was taken,
sustained said point of view, "where the rights of the parties
are not joint, the cases are uniform, and hold that the
disability of one will prevent the operation of the statute as to
him, but that those who are not under a disability will be
barred."
2. ID.; ID. The Supreme Court of Ohio correctly
stated in a similar case that whatever doubt might once have
been entertained on this subject it was conclusively settled
both in Great Britain and in the United States that the statute
is saved in favor only of the person laboring under the
alleged disability and this is precisely the rule with respect to
coparceners and tenants in common.
3. ID.; ID.; JOINT TENANCY AND TENANCY
IN COMMON. What particularly distinguishes the case at
bar from that of Sturges and Anderson vs. Longworth and
Horne (1 Ohio St., 545) and the other cases wherein it was
established that when the rights are joint the exception which
saves one of the interested parties also inures to the benefit of
the others, is that it was assumed in the latter cases that the
rights and interests involved therein pertained to joint
tenancy, not tenancy in common, which are two distinct
relations, each having its own juridical meaning. The
distinguishing feature between the one and the other, as
stated in the case of Mette vs. Feltgen (148 Ill., 357, 371), is
that the surviving coowner in joint tenancy is subrogated in
the rights of the deceased coowner immediately upon the
death of the latter, by the mere fact of said death, but this
does not take place in cases of tenancy in common which
corresponds to what is known in our law as community of
property (articles 392 et seq. of the Civil Code). For this
reason, according to American jurisprudence, a coowner in
joint tenancy can not dispose of his share or interest in the
property which is the subject matter of the joint tenancy,
without the consent of the other coowner because in so doing
he prejudices the other's rights and interests.
4. ID.; ID.; PURPOSE OF THE STATUTE OF
LIMITATIONS. The purpose of the statute of limitations
is no other than to protect the diligent and vigilant, not the
person who sleeps on his rights, forgetting them and taking
no trouble of exercising them one way or another to show
that he truly has such rights.
5. ID.; ID.; SECTIONS 40, 41 AND 42 OF ACT
NO. 190. The law provides that in whatever way the
occupancy by a person claiming to be the owner of a real
property may have commenced, if said occupancy is under
claim of title and is furthermore open, continuous for ten
years and adverse, it constitutes sufficient title for the
occupant thereof (sections 40 and 41 of Act No. 190), and
there can be no other exception to this rule than the disability
of persons who are entitled to said property, by reason of
age, some mental defect, or imprisonment, for whom the
same law provides the exceptions contained in its section 42.
6. ID.; ID.; INDEMNITY. It being clear that R.
T.'s action is barred it should be understood that only the
plaintiffs S. T. and B. T. are entitled to compel the
defendants to pay to them the value of two-thirds of the
1,000 cavans of palay produced in the land in question, at the
rate of P3 a cavan. Occeo & Alba for appellants M. Garcia,
R. Garcia and D. Rufino.
D E C I S I O N
DIAZ, J p:
This action was brought by the brothers and sisters
Resurreccion Tagarao, Buenaventura Tagarao, and Serafin
Tagarao, children of the deceased Merced Garcia, daughter
of the deceased Buenaventura Garcia who was a brother of
the defendant Marcos Garcia, against the latter and the other
defendants named Paula Tabifranca, Margarita Garcia,
Rosario Garcia, Dolores Rufino and Eleuterio Rufino,
praying that judgment be rendered against the defendants
ordering them to deliver to the plaintiffs, after executing the
necessary deeds of transfer, one-fourth of the land known as
lot No. 510 of cadastral case No. 11 of the municipality of
Isabela, Occidental Negros (G. L. R. O. Cad. Record No.
100), which was formerly covered, first by original
certificate of title No. 10009 (Exhibit M), later by transfer
certificate of title No. 3001 (Exhibit 3), and at present by
transfer certificate of title No. 8782 (Exhibit 7), all of the
office of the register of deeds of said Province of Occidental
Negros.
In their amended complaint of July 29, 1931, which
was reamended on March 8, 1932, said plaintiffs prayed that
should the defendants fail to deliver to them the required
portion of the land in question, the latter be ordered to pay
them the value thereof based on the assessed value of the
whole property, and that they furthermore be indemnified for
the value of 1,407 cavans of palay at the rate of P4 a cavan,
alleging that said 1,407 cavans represented their share in the
products of said land from the time the defendants took
exclusive possession thereof.
Before the plaintiffs filed their amended complaint
on the date above stated, the defendants Marcos Garcia,
Paula Tabifranca, Margarita Garcia, Rosario Garcia and
Dolores Rufino filed a demurrer to said plaintiffs' original
complaint, alleging that it did not state sufficient facts to
constitute a cause of action and was furthermore ambiguous,
unintelligible and uncertain. The lower court sustained said
demurrer and ordered the plaintiffs to amend their complaint
within the reglementary period.
When the plaintiffs amended their complaint in the
sense expressed in their pleading of February 13, 1929, said
five defendants again filed another demurrer alleging this
time that the lower court lack jurisdiction to try the case by
reason of the subject matter involved and the lower court
overruled said demurrer ordering them to answer within the
reglementary period. In compliance therewith, the defendants
on October 28, 1992, filed their answer wherein the first two
defendants, or the spouses Marcos Garcia and Paula
Tabifranca, alleged that although they formerly were the
absolute and exclusive owners of the land in question they
already ceased to be so at that time, having sold the half
belonging to Paula Tabifranca to the defendants Margarita
Garcia, Rosario Garcia and Dolores Rufino, and the other
half belonging to Marcos Garcia to Eleuterio Rufino. On
June 9, 1931, said two defendants filed a petition of even
date stating that they had no more interest in the case, having
sold their respective participations to the two Garcias and
two Rufinos and praying in succession that they be absolved
from the complaint.
A few days later, or on July 15, 1931, said two
defendants Marcos Garcia and Paula Tabifranca filed a
motion to include Eleuterio Rufino among the defendants
and on the following day the lower court, granting the
motion, ordered the inclusion of Eleuterio Rufino in the case
as one of the defendants. For this purpose the plaintiffs filed
their said amended complaint of July 29, 1931, which they
reamended with a slight addition on March 8, 1932.
The defendants Marcos Garcia and Paula
Tabifranca did not answer the plaintiffs' last amended
complaint but Margarita Garcia, Rosario Garcia and Dolores
Rufino jointly entered a general denial of all the allegations
contained therein, alleging as a special defense (1) that they
are the exclusive owners of one-half of the land in question;
(2) that the plaintiffs have already lost their right of action
because such right, if they ever had any, has already
prescribed; and (3) said plaintiffs cannot invoke the decision
rendered in civil case No. 4091 because with respect to them
it does not constitute res judicata.
The defendant Eleuterio Rufino, answering said
plaintiffs' last amended complaint, stated in his pleading of
November 19, 1931, that he denied each and every allegation
contained therein, alleging as a special defense that one half
of the land in question was sold by Marcos Garcia and
purchased by him in good faith, paying the corresponding
price therefor.
After due trial the lower court rendered judgment
ordering the defendants to deliver to the plaintiffs one fourth
of the land in question after executing the necessary deeds of
transfer in favor of said plaintiffs or, in lieu thereof, to
indemnify them in the sum of P3,882 plus the value of 1,000
cavans of palay at P3 a cavan, with costs. In said judgment
said court "declared the deeds of sale executed by Marcos
Garcia in favor of the defendant Eleuterio Rufino and by
Paula Tabifranca in favor of the defendants Margarita
Garcia, Rosario Garcia and Dolores Rufino, null and void."
The defendants Margarita Garcia, Rosario Garcia, Dolores
Rufino and Eleuterio Rufino appealed but Marcos Garcia and
Paula Tabifranca did not.
In support of their appeal, the defendants Margarita
Garcia, Rosario Garcia, and Dolores Rufino contend that the
lower court committed the eight alleged errors assigned in
their brief as follows:
"1. The lower court erred in not
sustaining the demurrer of the defendants-
appellants Margarita Garcia, Rosario Garcia
and Dolores Rufino to the second amended
complaint of the plaintiffs.
"2. The lower court erred in
admitting, under objections of the
defendants-appellants, oral and documentary
evidence tending to attack original
certificate of title No. 10009 in the name of
the spouses Marcos Garcia and Paula
Tabifranca issued on May 17, 1918.

"3. The lower court erred in
holding that the deed of sale made and
executed by Paula Tabifranca with respect to
her undivided one- half (1/2) share of lot
No. 510 of the cadastral survey of Isabela in
favor of Margarita Garcia, Rosario Garcia
and Dolores Rufino, was made without
consideration and declaring same null and
void being fictitious.
"4. The lower court erred in
holding that the transaction made by Paula
Tabifranca in favor of Margarita Garcia,
Rosario Garcia and Dolores Rufino had no
other purpose than to deprive the plaintiffs
of their shares in lot No. 510, as legitimate
heirs of Ventura Garcia and Merced Garcia.
"5. The lower court erred in
condemning the defendants-appellants
Margarita Garcia, Rosario Garcia and
Dolores Rufino, jointly and severally with
the other defendants to return to the
plaintiffs one-fourth (1/4) of lot No. 510 of
the cadastral survey of Isabela, or in its
place, to indemnify the plaintiffs the sum of
P3,882, value of said portion.
"6. The lower court erred in
condemning the defendants-appellants
Margarita Garcia, Rosario Garcia and
Dolores Rufino, jointly and severally with
the other defendants, to pay the plaintiffs
one thousand cavanes of palay or its value at
P3 per cavan.
"7. The lower court erred in
holding that the right of the plaintiffs to
present this action to recover a portion of lot
No. 510 of the cadastral survey of Isabela
has not prescribed.
"8. The lower court erred in
denying the petition for a new trial of the
defendants-appellants Margarita Garcia,
Rosario Garcia and Dolores Rufino."
The appellant Eleuterio Rufino also contends that
said court in rendering its judgment in question committed
the four alleged errors relied upon in his brief, which read as
follows:
"1. The lower court erred in
admitting over the defendant's objection oral
as well as documentary evidence of the
plaintiffs tending to attack the stability of
original certificate of title No. 10009
(Exhibit 5) in the name of the defendants
Marcos Garcia and Paula Tabifranca,
relative to alleged facts that took place prior
to the issuance of said title.
"2. The lower court erred in
ordering the defendant Eleuterio Rufino,
jointly with his codefendants, to deliver to
the plaintiffs one-fourth (1/4) of said lot No.
510, or in lieu thereof to indemnify them in
the sum of P3,882 representing the value of
said portion.
"3. The lower court erred in
holding in its judgment that the deed
(Exhibit 8) is fictitious and fraudulent and
declaring it null and void.
"4. The lower court erred in not
absolving the defendant and appellant
Eleuterio Rufino from the complaint and in
denying his motion for a new trial."
Without losing sight of the purpose of the
complaint of the plaintiffs and appellees as expressed in the
prayer of their pleadings or last amended complaints, it is
clear that the first assignment of alleged error attributed to
the lower court by the appellants is unfounded on the ground
that its purpose is not to attack the validity of the decree by
virtue of which original certificate of title No. 10009 was
issued in favor of Marcos Garcia and Paula Tabifranca, or
that under which transfer certificates of title Nos. 3001 and
8782, were issued later, but to compel the defendants to give
them one- fourth of the land described in said certificates and
to pay them the indemnity referred to therein.
The facts which have been clearly established at the
trial, according to the record and the evidence before us, may
be briefly stated as follows:
The land in question has an area of 31 hectares, 3
ares and 65 centares. It was originally purchased with pacto
de retro by the defendant Marcos Garcia and his brother
Ventura Garcia from Vidal Saravia on July 20, 1900. As the
latter failed to exercise his right of repurchase the two
brothers became the absolute owners of said land and it was
so held by the Court of First Instance of Occidental Negros
in case No. 274 which was instituted by Pedro Saravia,
against said two brothers to compel the latter to resell it to
him (Exhibit L). When the two brothers purchased said land,
the defendant Marcos Garcia was yet single because he had
not even been married to his former wife, as the defendant
Paula Tabifranca is only his wife by a second marriage.
Marcos Garcia had by his first wife three children who are
the defendants Margarita Garcia, Rosario Garcia and the
deceased Catalina Garcia, mother of the defendant Dolores
Rufino. Ventura Garcia, now deceased, also had two
children: Merced Garcia who was married to Rafael Tagarao,
and Claro Garcia.
While Merced Garcia was still living, or at least
until June, 1914, the defendant Marcos Garcia had been
delivering to her and her brother Claro Garcia their share of
the products harvested from the land in question. Merced
Garcia who, as stated, died about the year 1914 and was
followed years later by her husband Rafael Tagarao, had
three children, the herein plaintiffs Resurreccion Tagarao,
Serafin Tagarao and Buenaventura Tagarao. When this
action was brought on October 14, 1928, Resurreccion
Tagarao was more than 24 years of age; Serafin was then
only 23 years, 1 month and 1 day, and Buenaventura, 18
years, 4 months and 3 days.
With the plaintiffs' grandfather, Ventura Garcia,
and their mother, Merced Garcia, already dead, the defendant
Marcos Garcia claimed the land in question in cadastral case
No. 11 of the municipality of Isabela of the Province of
Occidental Negros (G. L. R. O. Cadastral Record No. 100),
known in said case as lot No. 510, alleging in the pleading
presented by him to that effect (Exhibit I) that he had
acquired it on July 20, 1904, when he was yet unmarried to
his codefendant Paula Tabifranca. Before the original
certificate of title acknowledging him to be the owner of the
land in question was issued to him, and during the period
within which any person could ask for the revision of the
decree issued to that effect, Marcos Garcia, fearing that Claro
Garcia, brother of the plaintiffs' mother, might frustrate his
designs by asking for said revision, executed in favor of
Claro Garcia a document binding himself to give to the latter
four hectares of said land upon the issuance to him of the
corresponding certificate of title. In view thereof, Claro did
not ask for the revision of the decree but he later brought an
action ase No. 4091 of the Court of First Instance of
Occidental Negros, against Marcos Garcia to recover from
him four hectares of said land, lot No. 510 of the cadastre of
Isabela, basing his claim on the document which Marcos
Garcia executed in his favor in order to promise and bind
himself to give Claro said four hectares, because after
Marcos Garcia had obtained his certificate of title he refused
to comply with his promise; and as a result said court, on
October 10, 1927, rendered judgment against Marcos Garcia
ordering him to segregate four hectares of said land to be
delivered to Claro Garcia and furthermore to pay to the latter
as indemnity 90 cavans of palay, or the value thereof in the
sum of P360.
In the certificate of title which was issued in favor
of Marcos Garcia on May 17, 1918 (original certificate of
title No. 10009), by virtue of his claim presented in said
cadastral case No. 11 of the municipality of Isabela,
Occidental Negros, it was stated, as in the decree ordering
the issuance thereof, that one-half of the land therein
described belonged to him, and that the other half to his wife
by a second marriage, Paula Tabifranca.
A few years after the issuance of said certificate of
title, the defendant Paula Tabifranca, second wife of the
defendant Marcos Garcia, sold her rights to the defendants
Margarita Garcia, Rosario Garcia and Dolores Rufino, her
husband's daughters and granddaughter, respectively, by his
first marriage, executing the deed Exhibit N dated December
31, 1921, while the alleged purchaser Dolores Rufino was
yet a minor. This was agreed upon between her and her
husband Marcos Garcia to prevent the land, part of which
belonged to her under said certificate of title, from ever
passing to her son by her first marriage named Juan Tabigui,
as she was already a widow when she contracted marriage
with said Marcos Garcia.
In the meantime the plaintiff Resurreccion Tagarao
was informed that her uncle Claro Garcia had succeeded in
obtaining his share of the land in question and, desiring to
protect her rights and those of her brothers and coplaintiffs,
she negotiated with Marcos Garcia so that he might give
them their corresponding share. Marcos Garcia at first
entertained her with promises that he would see to it that she
got what she wanted but later, at her back, he sold his share
of the land to the defendant Eleuterio Rufino, brother of his
son-in-law Lope Rufino, husband of the defendant Rosario
Garcia, executing in favor of Eleuterio Rufino the deed
Exhibit 8 wherein it was made to appear that the price paid to
him for only one-half of the land, lot No. 510, was P6,567.
Twelve days after Paula Tabifranca had executed
said deed of transfer Exhibit N in favor of her stepdaughters
Margarita Garcia and Rosario Garcia and of her husband
Marcos Garcia's granddaughter named Dolores Rufino, said
three defendants together with Marcos Garcia obtained
transfer certificate of title No. 3001, after the cancellation of
original certificate of title No. 10009, and two days after
Marcos Garcia had executed in favor of the defendant
Eleuterio Rufino the deed of sale Exhibit 8 whereby he sold
to the latter his half of the land described in the above stated
certificate of title No. 10009 (Exhibit M), he and his
daughters and granddaughter jointly with the defendant
Eleuterio Rufino succeeded in having said transfer certificate
of title No. 3001 (Exhibit 3) cancelled to be substituted, as it
was in fact substituted, by transfer certificate of title No.
8782 (Exhibit 7).
The transfer made by Paula Tabifranca in favor of
her stepdaughters Margarita and Rosario Garcia and her
husband's granddaughter Dolores Rufino, and that made by
Marcos Garcia in favor of Eleuterio Rufino, stated in said
deeds Exhibits N and 8, are fictitious and feigned in view of
the following reasons inferable from the evidence of record:

Notwithstanding the fact that in the original
certificate of title No. 10009 Paula Tabifranca's right to one
half of the property therein described has been
acknowledged, she was conscious that she was not entitled
thereto because it belonged exclusively to her husband or, at
least, he had acquired it long before he married her. This
explains the ease with which she parted with her alleged
right for a sum disproportionate to the true value of the land
sold by her. The alleged purchasers Margarita Garcia,
Rosario Garcia and Dolores Rufino were not in a financial
position to pay her the alleged purchase price which,
according to Exhibit N, amounted to P1,500; and Dolores
Rufino, being then of tender age, could not have taken part in
said contract of sale, notwithstanding that it was stated in
said document that she was represented by her father Lope
Rufino, because it does not appear that the latter was then the
guardian of her property and it is a fact that minors can not
give consent to any contract.
Neither was Eleuterio Rufino in a financial position
to pay what he allegedly paid to the defendant Marcos Garcia
for the latter's share in the land in question on the ground that
the amount of six thousand five hundred sixty-seven pesos
(P6,567) which is the price allegedly paid by him to Marcos
Garcia is a fortune greater than the income he could have had
for several years, because his means of livelihood, according
to his own testimony, consisted simply of extracting tuba
from about 200 coconut trees leased from different persons
and in retailing fresh fish bought by him for a lump sum in
order to obtain a small profit. He is a brother of the defendant
Rosario Garcia's husband, and notwithstanding that the deed
Exhibit 8 was executed in his favor, the land continues until
now to be registered for taxation purposes in the name of
Marcos Garcia; and notwithstanding the alleged deed of
transfer Exhibit 8 the land in question continues to be under
the Isabela Sugar Company Inc., of Occidental Negros, as
property of Marcos Garcia, although it is divided into three
portions named "THREE SISTERS A," "THREE
SISTERS B," and "HACIENDA GARCIA," the first
portion being under the management of Macario Torilla,
husband of the defendant Margarita Garcia; the second under
the management of Lope Rufino, husband of the defendant
Rosario Garcia; and the third under that of Claro Garcia,
uncle of the plaintiffs (Exhibit D). In addition to these
reasons, it may and should be stated that Eleuterio Rufino's
testimony explaining how the transaction between him and
Marcos Garcia was effected, does not agree with the text of
the deed of transfer Exhibit 8. It is expressly stated in said
document that the price paid by him for the land in question
was P6,567 and that he also assumed the lien in the form of a
mortgage constituted on said land to secure the payment to
Candido Montilla of a loan in the sum of P4,675 from which
it may be inferred that the total price paid by him for said
land was really P11,242. Notwithstanding this, he testified
that he paid only P1,892 to the defendant Marcos Garcia. It
should be stated furthermore that on December 1, 1928, or
scarcely two and a half months from the time he bought said
land from Marcos Garcia, Eleuterio Rufino leased it,
according to Exhibit 9, to Marcos Garcia's sons-in-law and
husbands of the defendants Margarita Garcia and Rosario
Garcia, when it is natural that as he was poor and his
business of tapping tuba and reselling fishes was not
lucrative, he should have personally taken charge of the
cultivation and exploitation of the land bought by him.
Furthermore, on January 10, 1930, long after the alleged
transfer of said land, Exhibit 8, Macario Torilla and Lope
Rufino, as Marcos Garcia's attorneys-in-fact, the latter
having executed in their favor the power of attorney, Exhibit
O-1, by virtue of which they mortgaged the land in question
in the name of their principal to Candido Montilla on July 7,
1928, Exhibit O, paid to Montilla the sum of P514.25 as
interest on the loan secured by the mortgage above stated
(Exhibit 4). This last fact convinces us more that said deed of
transfer Exhibit 8 is fictitious because if it were genuine,
there being as in fact there is in said document a stipulation
that the purchaser Eleuterio Rufino assumed all the lien on
said property, Eleuterio Rufino, not Marcos Garcia,
personally, nor through his sons-in-law Macario Torilla and
Lope Rufino, should have paid said interest.
The foregoing proves to our satisfaction that errors
2, 3 and 4 relied upon by the appellants Margarita Garcia,
Rosario Garcia and Dolores Rufino in their brief are
absolutely unfounded, and so is alleged error No. 3 attributed
to the lower court by the appellant Eleuterio Rufino.
It follows from the foregoing conclusions and
considerations that errors 5 and 2 attributed to said court by
the defendants Garcia and Eleuterio Rufino, respectively, are
likewise unfounded. If the transfers made under the deeds
which later made possible the issuance to the interested
parties of certificates of title Nos. 3001 and 8782 (Exhibits 3
and 7) are fraudulent, it is but proper, being in accordance
with law, that the defendants execute the deeds of transfer
prayed for by the plaintiffs in their complaint in order to give
them what is theirs; and this is undoubtedly one fourth of the
entire land because if one half belonged to the defendants'
predecessor in interest, the other half belonged to the
plaintiffs' grandfather who, as already stated, had only two
children: Claro Garcia, the plaintiffs' uncle, and Merced
Garcia, their mother.
But the question now arises whether or not the
three plaintiffs are entitled to what they jointly pray for in
their complaint. There is no doubt but that the plaintiffs
Serafin Tagarao and Buenaventura Tagarao are entitled
thereto on the ground that the former was only 23 years, 1
month and 1 day, when this action was brought, and
therefore the three years exception granted by the provisions
of section 42 of Act No. 190 had not yet elapsed as to him,
and because Buenaventura Tagarao, then being only 18
years, 4 months and 3 days of age, was yet a minor and the
period of prescription as to him is extended to three years
after he has attained majority.
The plaintiff Resurreccion Tagarao,
notwithstanding that she was of legal age when this action
was brought, contends that neither has her right to seek the
same relief prayed for by her brothers and coplaintiffs
prescribed, and cites in support of her contention the ruling
laid down in the case of Velasquez vs. Teodoro (46 Phil.,
757). It was truly stated in said case, citing with approval a
doctrine laid down by the Supreme Court of the State of
Ohio in the case of Sturges and Anderson vs. Longworth and
Horne (1 Ohio St., 545), that:
"Where the interests of two
defendants are joint and inseparable, and the
rights of one are saved under the provision
of the statute of limitations, on account of
his disability, such saving inures to the
benefit of the other defendant, although
laboring under no disability."
As may be seen, this ruling refers to cases in which
the rights of the defendants are joint and inseparable because
when they are not so, that is, when they are joint and several
at the same time, as is the case of the plaintiffs whose rights
are joint and several, the rule according to said court,
interpreting the section from which section 42 of Act No.
190 was copied, is different; and said court stated that in said
cases the disability which protects an heir from the effects of
prescription is no protection to coheirs, or in other words,
using the same language of the author of the footnotes on the
decision rendered in the case of Moore vs. Armstrong,
reported in 36 Am. Dec., 63, 78, wherein the same Supreme
Court of the State of Ohio sustained the latter point of view,
"where the rights of the parties are not joint, the cases are
uniform, and hold that the disability of one will prevent the
operation of the statute as to him, but that those who are not
under a disability will be barred."
The case of Moore vs. Armstrong, supra, has more
points in common with the case at bar than those of Sturges
and Anderson, vs. Longworth and Horne, and Wilkins, vs.
Philips cited in case of Velazquez vs. Teodoro, supra. The
question for determination in the former case was whether or
not the period of prescription runs not only against the heir
who is laboring under disability but also against his coheirs
who are sui juris. The plaintiffs, to all appearances, were the
heirs of one Furgus Moore and the heiress who seemed to be
laboring under disability was a married woman named Mrs.
Fleming. The Supreme Court of Ohio decided the question in
the negative with the remark that whatever doubt might once
have been entertained on this subject, it was conclusively
settled both in Great Britain and in the United States that the
statute is saved in favor only of the person laboring under the
alleged disability, adding in succession that this is precisely
the rule with respect both to coparceners and tenants in
common.
It cannot be argued that the separation of rights
among the plaintiffs was not practicable in the sense that one
of them could not have disposed of or alienate his legal
portion of the thing possessed in common without the
consent of the others, because the law provides otherwise. It
says:
"Every part owner shall have the
absolute ownership of his part, and of the
fruits and benefits derived therefrom, and he
may, therefore, sell, assign, or mortgage it,
and even substitute another person in its
enjoyment, unless personal rights are
involved, but the effect of the sale or
mortgage, with respect to the other
participants, shall be limited to the share
which may be allotted him in the partition
upon the dissolution of the community."
Furthermore, whosoever among said plaintiffs
should have desired the partition of the property of which he
was a coowner, could have demanded such partition
inasmuch as the law then allowed and still allows such act
(article 400, Civil Code; and section 181, Act No. 190).
What particularly distinguishes the case at bar from that of
Sturges and Anderson vs. Longworth and Horne, supra and
the other cases wherein it was established that when the
rights are joint the exception which saves one of the
interested parties also inures to the benefit of the others, is
that it was assumed in the latter cases that the rights and
interests involved therein pertained to joint tenancy, not
tenancy in common, which are two distinct relations, each
having its own juridical meaning. The distinguishing feature
between the one and the other, as stated in the case of Mette
vs. Feltgen (148 Ill., 357, 371), is that the surviving coowner
in joint tenancy is subrogated in the rights of the deceased
coowner immediately upon the death of the latter, by the
mere fact of said death, but this does not take place in cases
of tenancy in common which corresponds to what is known
in our law as community of property (articles 392 et seq. of
the Civil Code). For this reason, according to American
jurisprudence, a coowner in joint tenancy can not dispose of
his share or interest in the property which is the subject
matter of the joint tenancy, without the consent of the other
coowner because in so doing he prejudices the other's rights
and interests.

That the separation of rights and interests among
the plaintiffs was practicable is further evidenced by the fact
that Claro Garcia with whom they were entitled to one-half
of the land in question could recover his legal portion thereof
from Marcos Garcia, although certainly not in its entirety,
having failed to assert his rights. This being so, and it being
known as it is in fact known that the purpose of the statute of
limitations is no other than to protect the diligent and
vigilant, not the person who sleeps on his rights, forgetting
them and taking no trouble of exercising them one way or
another to show that he truly has such rights, it is logical to
conclude that the right of action of the plaintiff Resurreccion
Tagarao is barred, and the fact that that of her brothers and
coplaintiffs Serafin and Buenaventura Tagarao still subsists
does not inure to her benefit.
Although Resurreccion Tagarao could have
enforced the right which she exercised in this case on May
17, 1918, when Marcos Garcia and Paula Tabifranca
obtained original certificate of title No. 10009 (Exhibit M) or
shortly afterwards, or long before, that is, from the death of
her mother Merced Garcia in 1914 or 1915, she did nothing
to protect her rights. On the contrary, she allowed said
spouses to perform acts of ownership on the land covered by
said certificate, publicly, peacefully, uninterruptedly and
adversely to the whole world including herself, and from that
time until the filing of her first complaint more than ten years
had elapsed. It is for this reason why it cannot be sustained
that the defendants Marcos Garcia and Paula Tabifranca,
after it has been shown that the transfers made by them are
null and void, being fictitious and false, hold the land in
question in trust, because if they ever held it in said capacity
it had been during the lifetime of the plaintiffs' mother to
whom said defendants used to give part of the fruits thereof.
But after she had died, their possession was under the
circumstances above stated and the law provides that in
whatever way the occupancy by a person claiming to be the
owner of a real property may have commenced, if said
occupancy is under claim of title and is furthermore open,
continuous for ten years and adverse, it constitutes sufficient
title for the occupant thereof (sections 40 and 41 of Act No.
190), and there can be no other exception to this rule than the
disability of persons who are entitled to said property, by
reason of age, some mental defect, or imprisonment, for
whom the same law provides the exceptions contained in its
section 42.
It having been established by the evidence for both
the plaintiffs and the defendants that Candido Montilla holds
a lien on the land in question, which is noted at the back of
transfer certificates of title Nos. 3001 and 8782 (Exhibits 3
and 7) for a loan in the sum of P4,675 which he granted to
Marcos Garcia in the honest belief that the latter was the true
owner of the land described in certificates of title Nos. 10009
(Exhibit M), 3001 (Exhibit 3), and 8782 (Exhibit 7), it is but
just that said lien be acknowledged by the plaintiffs Serafin
Tagarao and Buenaventura Tagarao, with the necessary
reservations in favor of said two plaintiffs.
It should be stated in passing that the land in
question, lot No. 510 of cadastral case No. 11 of Isabela,
Occidental Negros, is assessed at P15,530, and therefore one-
twelfth (1/12) thereof is worth P1,294.17 on that basis.
As to the indemnity which the plaintiffs claim from
the defendants, the conclusion arrived at by the lower court
in its decision and judgment is supported by the evidence,
that is, the plaintiffs' share of the crops from 1918 to 1929,
including that of Resurreccion Tagarao, should be 1,000
cavans of palay. However, it being clear that Resurreccion
Tagarao's action is barred, it should be understood that only
the plaintiffs Serafin Tagarao and Buenaventura Tagarao are
entitled to compel the defendants to pay to them the value of
two-thirds of the 1,000 cavans of palay at the rate of P3 a
cavan.
For all the foregoing, the judgment appealed from
is affirmed in so far as it favors the plaintiffs Serafin Tagarao
and Buenaventura Tagarao, and said defendants are hereby
ordered to execute in favor of said Tagarao brothers the deed
or deeds necessary to transfer to them, by virtue of this
judgment, two-twelfths (2/12) of the entire lot No. 510 of the
cadastre of Isabela, Occidental Negros, including the portion
transferred to Claro Garcia (G. L. R. O. Cad. Record No.
100); to indemnify each of them in a sum equal to what he
may pay to the mortgage creditor Candido Montilla to free
his said portion from the lien thereon in favor of said
Montilla; or likewise to pay to each of them, upon failure of
the defendants to deliver said portion and execute the
necessary deed of transfer, the sum of P1,294.17; and
furthermore to pay, as indemnity, the value of two-thirds of
1,000 cavans of palay, at the rate of P3 a cavan, with costs
against the defendants. Said judgment is reversed as to the
plaintiff Resurreccion Tagarao. So ordered.
Street, Abad Santos, Hull, Vickers,
Imperial and Butte, JJ., concur.
||| (Tagarao v. Garcia, G.R. No. 40064, December 04, 1934)

[G.R. No. 47757. April 17, 1942.]
ANA RIVERA, plaintiff-appellant, vs.
PEOPLES BANK AND TRUST
CO., defendant-appellee. MINNIE
STEPHENSON, in her capacity as
administratrix of the intestate estate of
Edgar Stephenson, intervenor-appellee.
Cecilio I. Lim, Chief Public Defender, for appellant
Antonio M. Opiso, for intervenor-appellee.
No appearance for appellee Peoples Bank & Trust
Co.
SYLLABUS
1. BANKS AND BANKING; VALIDITY OF
SURVIVORSHIP AGREEMENT; JOINT DEPOSITS.
The survivorship agreement here involved is prima facie
valid. It is an aleatory contract supported by a lawful
consideration the mutual agreement of the joint depositors
permitting either of them to withdraw the whole deposit
during their lifetime, and transferring the balance to the
survivor upon the death of one of them. It is covered by
article 1790 of the Civil Code. Furthermore, it is well
established that a bank account may be so created that two
persons shall be joint owners thereof during their mutual
lives, and the survivor take the whole on the death of the
other. The right to make such joint deposits has generally
been held not to be done away with by statutes abolishing
joint tenancy and survivorship generally as they existed at
common law.
2. ID.; ID.; ID. But although the survivorship
agreement is per se not contrary to law, its operation or effect
may be violative of the law. For instance, if it be shown in a
given case that such agreement is a mere cloak to hide an
inofficious donation, to transfer property in fraud of
creditors, or to defeat the legitime of a forced heir, it may be
assailed and annulled upon such grounds. No such vice has
been imputed and established against the agreement involved
in this case.
D E C I S I O N
OZAETA, J p:
The question raised in this appeal is the validity of
the survivorship agreement made by and between Edgar
Stephenson, now deceased, and Ana Rivera, appellant herein,
which reads as follows:
"SURVIVORSHIP AGREEMENT.
"Know All Men by These Presents:
"That we hereby agree with each
other and with the PEOPLES BANK AND
TRUST COMPANY, Manila, Philippine
Islands (hereinafter called the Bank), that all
moneys now or hereafter deposited by us or
either of us with the Bank in our savings
account shall be deposited in and received
by the Bank with the understanding and
upon the conditions that said money be
deposited without consideration of its
previous ownership, and that said money
and all interest thereon, if any there be, shall
be the property of both of us as joint tenants,
and shall be payable to and collectible by
either of us during our joint lives, and after
the death of one of us shall belong to and be
the sole property of the survivor, and shall
be payable to and collectible by such
survivor.
"And we further covenant and
agree with each other and the Bank, its
successors or assigns, that the receipt or
check of either of us during our joint lives,
or the receipt or check of the survivor, for
any payment made from this account, shall
be valid and sufficient release and discharge
to the Bank for such payment.
"The Bank is hereby authorized to
accept and deposit to this account all checks
made payable to either or both of us, when
endorsed by either or both of us or one for
the other.
"This is a joint and several
agreement and is binding upon each of us,
our heirs, executors, administrators, and
assigns.
"In witness whereof we have
signed our names hereto this 17th day of
October, 1931.

"
(
S
g
d
.
)

E
D
G
A
R

S
T
E
P
H
E
N
S
O
N
"
(
S
g
d
.
)

A
N
A

R
I
V
E
R
A
"
A
d
d
r
e
s
s
:

7
9
9

S
t
a
.

M
e
s
a
,

M
a
n
i
l
a
.

"Witnesses:
"(Sgd.) FRED W. BOHLER
"(Sgd.) Y. E. COX
"S. A. #4146"

Ana Rivera was employed by Edgar Stephenson as
housekeeper from the year 1920 until his death on June 8,
1939. On December 24, 1929, Stephenson opened an
account in his name with the defendant Peoples Bank by
depositing therein the sum of P1,000. On October 17, 1931,
when there was a balance of P2,072 in said account, the
survivorship agreement in question was executed and the
said account was transferred to the name of "Edgar
Stephenson and/or Ana Rivera." At the time of Stephenson's
death Ana Rivera held the deposit book, and there was a
balance in said account of P701.43, which Ana Rivera
claimed but which the bank refused to pay to her upon advice
of its attorneys, who gave the opinion that the survivorship
agreement was of doubtful validity. Thereupon Ana Rivera
instituted the present action against the bank, and Minnie
Stephenson, administratrix of the estate of the deceased,
intervened and claimed the amount for the estate, alleging
that the money deposited in said account was and is the
exclusive property of the deceased.
The trial court held that the agreement in question,
viewed from its effect during the lives of the parties, was a
mere power of attorney authorizing Ana Rivera to withdraw
the deposit, which power terminated upon the death of the
principal, Edgar Stephenson; but that, viewed from its effect
after the death of either of the parties, the agreement was a
donation mortis causa with reference to the balance
remaining at the death of one of them, which, not having
been executed with the formalities of a testamentary
disposition as required by article 620 of the Civil Code, was
of no legal effect.
The defendant bank did not appear in this Court.
Counsel for the intervenor-appellee in his brief contends that
the survivorship agreement was a donation mortis causa from
Stephenson to Ana Rivera of the bank account in question
and that, since it was not executed with the formalities of a
will, it can have no legal effect.
We find no basis for the conclusion that the
survivorship agreement was a mere power of attorney from
Stephenson to Ana Rivera, or that it is a gift mortis causa of
the bank account in question from him to her. Such
conclusion is evidently predicated on the assumption that
Stephenson was the exclusive owner of the funds deposited
in the bank, which assumption was in turn based on the facts
(1) that the account was originally opened in the name of
Stephenson alone and (2) that Ana Rivera "served only as
housemaid of the deceased." But it not infrequently happens
that a person deposits money in the bank in the name of
another; and in the instant case it also appears that Ana
Rivera served her master for about nineteen years without
actually receiving her salary from him. The fact that
subsequently Stephenson transferred the account to the name
of himself and/or Ana Rivera and executed with the latter the
survivorship agreement in question although there was no
relation of kinship between them but only that of master and
servant, nullifies the assumption that Stephenson was the
exclusive owner of the bank account. In the absence, then, of
clear proof to the contrary, we must give full faith and credit
to the certificate of deposit, which recites in effect that the
funds in question belonged to Edgar Stephenson and Ana
Rivera; that they were joint owners thereof; and that either of
them could withdraw any part or the whole of said account
during the lifetime of both, and the balance, if any, upon the
death of either, belonged to the survivor.
Is the survivorship agreement valid? Prima facie,
we think it is valid. It is an aleatory contract supported by a
lawful consideration the mutual agreement of the joint
depositors permitting either of them to withdraw the whole
deposit during their lifetime, and transferring the balance to
the survivor upon the death of one of them. The trial court
said that the Civil Code "contains no provisions sanctioning
such an agreement." We think it is covered by article 1790 of
the Civil Code, which provides as follows:
"ART. 1790. By an aleatory
contract one of the parties binds himself, or
both reciprocally bind themselves, to give or
to do something as an equivalent for that
which the other party is to give or do in case
of the occurrence of an event which is
uncertain or will happen at an indeterminate
time."
(See also article 1255.)
The case of Macam vs. Gatmaitan (decided March
11, 1937), 36 Off. Gaz., 2175, is in point. Two friends, Juana
Gatmaitan and Leonarda Macam, who had lived together for
some time, agreed in writing that the house of strong
materials which they bought with the money belonging to
Leonarda Macam and the Buick automobile and certain
furniture which belonged to Juana Gatmaitan shall belong to
the survivor upon the death of one of them and that "this
agreement shall be equivalent to a transfer of the rights of the
one who dies first and shall be kept by the survivor." After
the death of Leonarda Macam, her executrix assailed that
document on the ground that with respect to the house the
same constituted a donation mortis causa by Leonarda
Macam in favor of Juana Gatmaitan. In affirming the
judgment of the trial court absolving the defendants from the
complaint this Court, speaking through Chief Justice
Avancea, said:
"This court is of the opinion that
Exhibit C is an aleatory contract whereby,
according to article 1790 of the Civil Code,
one of the parties or both reciprocally bind
themselves to give or do something as an
equivalent for that which the other party is
to give or do in case of the occurrence of an
event which is uncertain or will happen at an
indeterminate time. As already stated,
Leonarda was the owner of the house and
Juana of the Buick automobile and most of
the furniture. By virtue of Exhibit C, Juana
would become the owner of the house in
case Leonarda died first, and Leonarda
would become the owner of the automobile
and the furniture if Juana were to die first. In
this manner Leonarda and Juana reciprocally
assigned their respective property to one
another conditioned upon who might die
first, the time of death determining the event
upon which the acquisition of such right by
the one or the other depended. This contract,
as any other contract, is binding upon the
parties thereto. Inasmuch as Leonarda had
died before Juana, the latter thereupon
acquired the ownership of the house, in the
same manner as Leonarda would have
acquired the ownership of the automobile
and of the furniture if Juana had died first."
(36 Off. Gaz., 2176.)

Furthermore, "it is well established that a bank
account may be so created that two persons shall be joint
owners thereof during their mutual lives, and the survivor
take the whole on the death of the other. The right to make
such joint deposits has generally been held not to be done
away with by statutes abolishing joint tenancy and
survivorship generally as they existed at common law." (7
Am. Jur., 299.)
But although the survivorship agreement is per
se not contrary to law, its operation or effect may be
violative of the law. For instance, if it be shown in a given
case that such agreement is a mere cloak to hide an
inofficious donation, to transfer property in fraud of
creditors, or to defeat the legitime of a forced heir, it may be
assailed and annulled upon such grounds. No such vice has
been imputed and established against the agreement involved
in this case.
The judgment appealed from is reversed and
another judgment will be entered in favor of the plaintiff
ordering the defendant bank to pay to her the sum of
P701.43, with legal interest thereon from the date of the
complaint, and the costs in both instances. So ordered.
Yulo, C.J., Moran, Paras and Bocobo, JJ., concur.
||| (Rivera v. Peoples Bank and Trust Co., G.R. No. 47757, April
17, 1942)

[G.R. No. 45425. April 29, 1939.]
JOSE GATCHALIAN, ET AL., plaintiffs-
appellants, vs. THE COLLECTOR OF
INTERNAL REVENUE, defendant-
appellee.
Guillermo B. Reyes for appellants.
Solicitor-General Tuason for appellee.
SYLLABUS
1. PARTNERSHIP OF A CIVIL NATURE;
COMMUNITY OF PROPERTY; SWEEPSTAKES;
INCOME TAX. According to the stipulated facts the
plaintiffs organized a partnership of a civil nature because
each of them put up money to buy a sweepstakes ticket for
the sole purpose of dividing equally the prize which they
may win, as they did in fact in the amount of P60,000 (article
166C, Civil Code). The partnership was not only formed, but
upon the organization thereon and the winning of the prize, J.
G. personally appeared in the office of the Philippine Charity
Sweepstakes, in his capacity as co-partner, as such collected
the prize, the office issued the check for P60,000 in favor of
J. G. and company, and the said partner, in the same
capacity, collected the check. All these circumstances repel
the idea that the plaintiffs organized and formed a
community of property only.
2. ID.; ID.; ID.; ID. Having organized and
constituted a partnership of a civil nature, the said entity is
the one bound to pay the income tax which the defendant
collected under the aforesaid section 10 (a) of Act No. 2833,
as amended by section 2 of Act No. 3761. There is no merit
in plaintiffs' contention that the tax should be prorated
among them and paid individually, resulting in their
exemption from the tax.
D E C I S I O N
IMPERIAL, J p:
The plaintiff brought this action to recover from the
defendant Collector of Internal Revenue the sum of
P1,863.44, with legal interest thereon, which they paid under
protest by way of income tax. They appealed from the
decision rendered in the case on October 23, 1936 by the
Court of First Instance of the City of Manila, which
dismissed the action with the costs against them.
The case was submitted for decision upon the
following stipulation of facts:
"Come now the parties to the
above-mentioned case, through their
respective undersigned attorneys, and
hereby agree to respectfully submit to this
Honorable Court the case upon the
following statement of facts:
"1. That plaintiffs are all residents
of the municipality of Pulilan, Bulacan, and
that defendant is the Collector of Internal
Revenue of the Philippines;
"2. That prior to December 15,
1934 plaintiffs, in order to enable them to
purchase one sweepstakes ticket valued at
two pesos (P2), subscribed and paid therefor
the amounts as follows:

1. Jose Gatchalian P0.18
2. Gregoria Cristobal .18
3. Saturnina Silva .08
4. Guillermo Tapia .13
5. Jesus Legaspi .15
6. Jose Silva .07
7. Tomasa Mercado .08
8. Julio Gatchalian .18
9. Emiliana Santiago .18
10. Maria C. Legaspi .16
11. Francisco Cabral .13
12. Gonzalo Javier .14
13. Maria Santiago .17
14. Buenaventura Guzman .13
15. Mariano Santos .14

Total 2.00

"3. That immediately thereafter but
prior to December 16, 1934, plaintiffs
purchased, in the ordinary course of
business, from one of the duly authorized
agents of the National Charity Sweepstakes
Office one ticket bearing No. 178637 for the
sum of two pesos (P2) and that the said
ticket was registered in the name of Jose
Gatchalian and Company;
"4. That as a result of the drawing
of the sweepstakes on December 15, 1934,
the above-mentioned ticket bearing No.
178637 won one of the third prizes in the
amount of P50,000 and that the
corresponding check covering the above-
mentioned prize of P50,000 was drawn by
the National Charity Sweepstakes Office in
favor of Jose Gatchalian & Company against
the Philippine National Bank, which check
was cashed during the latter part of
December, 1934 by Jose Gatchalian &
Company;
"5 That on December 29, 1934,
Jose Gatchalian was required by income tax
examiner Alfredo David to file the
corresponding income tax return covering
the prize won by Jose Gatchalian &
Company and that on December 29, 1934,
the said return was signed by Jose
Gatchalian, a copy of which return is
enclosed as Exhibit A and made a part
hereof;
"6. That on January 8, 1935, the
defendant made an assessment against Jose
Gatchalian & Company requesting the
payment of the sum of P1,499.94 to the
deputy provincial treasurer of Pulilan,
Bulacan, giving to said Jose Gatchalian &
Company until January 20, 1935 within
which to pay the said amount of P1,499.94,
a copy of which letter marked Exhibit B is
inclosed and made a part hereof;
"7. That on January 20, 1935, the
plaintiffs, through their attorney, sent to
defendant a reply, a copy of which marked
Exhibit C is attached and made a part
hereof, requesting exemption from the
payment of the income tax to which reply
there were enclosed fifteen (15) separate
individual income tax returns filed
separately by each one of the plaintiffs,
copies of which returns are attached and
marked Exhibits D-1 to D-15, respectively,
in order of their names listed in the caption
of this case and made parts hereof; a
statement of sale signed by Jose Gatchalian
showing the amounts put up by each of the
plaintiffs to cover up the cost price of P2 of
said ticket, copy of which statement is
attached and marked as Exhibit E and made
a part hereof; and a copy of the affidavit
signed by Jose Gatchalian dated December
29, 1934 is attached and marked Exhibit F
and made part hereof;
"8. That the defendant in his letter
dated January 28, 1935, a copy of which
marked Exhibit G is enclosed, denied
plaintiffs' request of January 20, 1935, for
exemption from the payment of tax and
reiterated his demand for the payment of the
sum of P1,499.94 as income tax and gave
plaintiffs until February 10, 1935 within
which to pay the said tax;
"9. That in view of the failure of
the plaintiffs to pay the amount of tax
demanded by the defendant, notwithstanding
subsequent demand made by defendant upon
the plaintiffs through their attorney on
March 23, 1935, a copy of which marked
Exhibit H is enclosed, defendant on May 13,
1935 issued a warrant of distraint and levy
against the property of the plaintiffs, a copy
of which warrant marked Exhibit I is
enclosed and made a part hereof;
"10. That to avoid embarrassment
arising from the embargo of the property of
the plaintiffs, the said plaintiffs on June 15,
1935, through Gregoria Cristobal, Maria C.
Legaspi and Jesus Legaspi, paid under
protest the sum of P601.51 as part of the tax
and penalties to the municipal treasurer of
Pulilan, Bulacan, as evidenced by official
receipt No. 7454879 which is attached and
marked Exhibit J and made a part hereof,
and requested defendant that plaintiffs be
allowed to pay under protest the balance of
the tax and penalties by monthly
installments;
"11. That plaintiffs' request to pay
the balance of the tax and penalties was
granted by defendant subject to the
condition that plaintiffs file the usual bond
secured by two solvent persons to guarantee
prompt payment of each installments as it
becomes due;
"12. That on July 16, 1935,
plaintiff filed a bond, a copy of which
marked Exhibit K is inclosed and made a
part hereof, to guarantee the payment of the
balance of the alleged tax liability by
monthly installments at the rate of P118.70 a
month, the first payment under protest to be
effected on or before July 31, 1935;
"13. That on July 16, 1935 the
said plaintiffs formally protested against the
payment of the sum of P602.51, a copy of
which protest is attached and marked
Exhibit L but that defendant in his letter
dated August 1, 1936 overruled the protest
and denied the request for refund of the
plaintiffs;
"14. That, in view of the failure of
the plaintiffs to pay the monthly installments
in accordance with the terms and conditions
of the bond filed by them, the defendant in
his letter dated July 23, 1935, copy of which
is attached and marked Exhibit M, ordered
the municipal treasurer of Pulilan, Bulacan
to execute within five days the warrant of
distraint and levy issued against the
plaintiffs on March 13, 1935;
"15. That in order to avoid
annoyance and embarrassment arising from
the levy of their property, the plaintiffs on
August 28, 1936, through Jose Gatchalian,
Guillermo Tapia, Maria Santiago and
Emiliano Santiago, paid under protest to the
municipal treasurer of Pulilan, Bulacan. the
sum of P1,260.93 representing the unpaid
balance of the income tax and penalties
demanded by defendant as evidenced by
income tax receipt No. 35811 which is
attached and marked Exhibit N and made a
part hereof; and that on September 3, 1936,
the plaintiffs formally protested to the
defendant against the payment of said
amount and requested the refund thereof,
copy of which is attached and marked
Exhibit O and made part hereof; but that on
September 4, 1936, the defendant overruled
the protest and denied the refund thereof;
copy of which is attached and marked
Exhibit P and made a part hereof; and
"16. That plaintiffs demanded upon
defendant the refund of the total sum of one
thousand eight hundred and sixty-three
pesos and forty-four centavos (P1,863.44)
paid under protest by them but that
defendant refused and still refuses to refund
,the said amount notwithstanding the
plaintiffs' demands.
"17. The parties hereto reserve the
right to present other and additional
evidence if necessary."
Exhibit E referred to in the stipulation is of the
following tenor:
"To whom it my concern:
"I, Jose Gatchalian, a resident of
Pulilan, Bulacan, married, of age, hereby
certify, that on the 11th day of August,
1934, I sold parts of my share on ticket No.
178637 to the persons and for the amount
indicated below and the part of my share
remaining is also shown to wit:

Purchaser Amount Address

1. Mariano Santos P0.14 Pulilan, Bulacan.
2. Buenaventura Guzman .13 Do.
3. Maria Santiago .17 Do.
4. Gonzalo Javier .14 Do.
5. Francisco Cabral .13 Do.
6. Maria C. Legaspi .16 Do.
7. Emiliana Santiago .13 Do.
8. Julio Gatchalian .13 Do.
9. Jose Silva .07 Do.

10. Tomasa Mercado .08 Do.
11. Jesus Legaspi .16 Do.
12. Guillermo Tapia .18 Do.
13. Saturnina Silva .08 Do.
14. Gregoria Cristobal .18 Do.
15. Jose Gatchalian .18 Do.

2.00 Total cost of said ticket; and that,
therefore, the persons named above are
entitled to the parts of whatever prize that
might be won by said ticket.
"Pulilan, Bulacan, P. I.
(
S
g
d
.
)

"
J
O
S
E

G
A
T
C
H
A
L
I
A
N
"
And a summary of Exhibits D-1 to D-15 inserted in
the bill of exceptions as follows:
"RECAPITULATIONS OF 15
INDIVIDUAL INCOME TAX RETURNS
FOR 1934 ALL DATED JANUARY 19,
1935 SUBMITTED TO THE COLLECTOR
OF INTERNAL REVENUE.

Exhibit Purchase Price Net
Name No. Price won Expenses prize

1. Jose Gatchalian D-1 P0.18 P4,425 P480 3,945
2. Gregoria Cristobal D-2 .18 4,575 2,000 2,575
3. Saturnina Silva D-3 .08 1,875 360 1,515
4. Guillermo Tapia D-4 .13 3,325 360 2,965
5. Jesus Legaspi by Maria
Cristobal D-5 .15 3,825 720 3,105
6. Jose Silva D-6 .08 1,875 360 1,615
7. Tomasa Mercado D-7 .07 1,875 360 1,515
8. Julio Gatchalian by Bea
triz Guzman D-8 .13 3,150 240 2,910
9. Emiliana Santiago D-9 .13 3,325 360 2,966
10. Maria C. Legaspi D-10 .16 4,100 960 3,140
11. Francisco Cabral D-11 .13 3,325 360 2965
12. Gonzalo Javier D-12 .14 3,325 360 2,965
13. Maria Santiago D-13 .17 4,350 360 3,990
14. Buenaventura Guzman D-14 .13 3,325 360 2,965
15. Mariano Santos D-15 .14 3,325 360 2,965

2.00 50,000"

The legal questions raised in plaintiffs-appellants'
five assigned errors may properly be reduced to the two
following: (1) Whether the plaintiffs formed a partnership, or
merely a community of property without a personality of its
own; in the first case it is admitted that the partnership thus
formed is liable for the payment of income tax, whereas if
there was merely a community of property, they are exempt
from such payment; and (2) whether they should pay the tax
collectively or whether the latter should be prorated among
them and paid individually.
The Collector of Internal Revenue collected the tax
under section 10 of Act No. 2833, as last amended by section
2 of Act No. 3761, reading as follows:
"SEC. 10. (a) There shall be
levied, assessed, collected, and paid
annually upon the total net income received
in the preceding calendar year from all
sources by every corporation, joint-stock
company, partnership, joint account (cuenta
en participacion), association or insurance
company, organized in the Philippine
Islands, no matter how created or organized,
but not including duly registered general co-
partnerships (compaias colectivas), a tax of
three per centum upon such income; and a
like tax shall be levied, assessed, collected,
and paid annually upon the total net income
received in the preceding calendar year from
all sources within the Philippine Islands by
every corporation, joint-stock company,
partnership, joint account (cuenta en
participacion), association, or insurance
company organized, authorized, or existing
under the laws of any foreign country,
including interest on bonds, notes, or other
interest-bearing obligations of residents,
corporate or otherwise: Provided, however,
That nothing in this section shall be
construed as permitting the taxation of the
income derived from dividends or net profits
on which the normal tax has been paid.
"The gain derived or loss sustained
from the sale or other disposition by a
corporation, joint-stock company,
partnership, joint account (cuenta en
participacion), association, or insurance
company, or property, real, personal, or
mixed, shall be ascertained in accordance
with subsections (c) and (d) of section two
of Act Numbered Two thousand eight
hundred and thirty-three, as amended by Act
Numbered Twenty-nine hundred and
twenty-six.
"The foregoing tax rate shall apply
to the net income received by every taxable
corporation, joint-stock company,
partnership, joint account (cuenta en
participacion), associations or insurance
company in the calendar year nineteen
hundred and twenty and in each year
thereafter."
There is no doubt that if the plaintiffs merely
formed a community of property the latter is exempt from
the payment of income tax under the law. But according to
the stipulated facts the plaintiffs organized a partnership of a
civil nature because each of them put up money to buy a
sweepstakes ticket for the sole purpose of dividing equally
the prize which they may win, as they did in fact in the
amount of P50,000 (article 1665, Civil Code). The
partnership was not only formed, but upon the organization
thereof and the winning of the prize, Jose Gatchalian
personally appeared in the office of the Philippine Charity
Sweepstakes, in his capacity as co-partner, as such collected
the prize, the office issued the check for P50,000 in favor of
Jose Gatchalian and company, and the said partner. in the
same capacity, collected the said check. All these
circumstances repel the idea that the plaintiffs organized and
formed a community of property only.
Having organized and constituted a partnership of a
civil nature, the said entity is the one bound to pay the
income tax which the defendant collected under the aforesaid
section 10 (a) of Act No. 2833, as amended by section 2 of
Act No. 3761. There is no merit in plaintiffs' contention that
the tax should be prorated among them and paid individually,
resulting in their exemption from the tax.
In view of the foregoing, the appealed decision is
affirmed, with the costs of this instance to the plaintiff.
appellants. So ordered.
Avancea, C.J., Villa-Real, Diaz, Laurel,
Concepcionand Moran, JJ., concur.
||| (Gatchalian v. Collector of Internal Revenue, G.R. No. 45425,
April 29, 1939)


[G.R. No. 32047. November 1, 1930.]
MANUEL MELENCIO, MARIANO
MELENCIO, PURA MELENCIO, and
CARIDAD MELENCIO, plaintiffs-
appellants, vs. DY TIAO LAY, defendant-
appellee.
Jose V. Valladolid, Jose P. Melencio and Camus &
Delgado for appellants.
Araneta & Zaragoza for appellee.
SYLLABUS
1. CIVIL CODE; COMMUNITY OF PROPERTY;
ALTERNATIONS. Article 397 of the Civil Code
provides: "None of the owners shall, without the consent of
the others, make any alternations in the common property
even though such alterations might be advantageous to all."
While the property referred to in this case was leased,
without the consent of all the coowners, building thereon one
house and three warehouse, it cannot be considered that the
alterations are of sufficient importance to nullify the lease,
especially so since none of the coowners objected to such
alterations until over twenty years after the execution of the
contract of lease.
2. ID.; ID.; CONTRACT OF LEASE;
RESCISSION. The provision in the contract that the
lessee, at any time before he erected any building on the
land, might rescind the lease, can hardly be regarded as a
violation of article 1256 of the Civil Code.
3. ID.; ID.; ID.; ANNULMENT. In this case
only a small majority of the coowners executed the lease
here in question, and according to the terms of the contract
the lease might be given a duration of sixty years. This is an
open violation of article 1548 of the Civil Code and the
contract of the lease herein in question should therefore be
declared null and void.
D E C I S I O N
OSTRAND, J p:
On August 1, 1927, the plaintiffs, Manuel,
Mariano, Pura and Caridad Melencio, brought the present
action against the defendant-appellee, Dy Tiao Lay, for the
recovery of the possession of a parcel of land situated in the
town of Cabanatuan, Nueva Ecija, and containing an area of
4,628.25 square meters. The plaintiffs further demand a
monthly rental of P300 for the use and occupation of the
parcel from May, 1926, until the date of the surrender to
them of the possession thereof; and that if it is found that the
said appellee was occupying the said parcel of land by virtue
of a contract of lease, such contract should be declared null
and void for lack of consent, concurrence, and ratification by
the owners thereof.
In his answer, the defendant pleaded the general
issue, and as special defenses, he alleged in substance that he
was occupying the said tract of land by virtue of a contract of
lease executed on July 24, 1905, in favor of his predecessor
in interest, by Ruperta Garcia, Pedro Melencio, Juliana
Melencio, and Ruperto Melencio under the terms specified
therein, and which contract is still in force; that Liberata
Macapagal, the mother of the plaintiffs, in her capacity as
judicial administratrix of the estate of Ramon Melencio, one
of the original coowners of the parcel of land in question,
actually recognized and ratified the existence and validity of
the contract aforesaid by virtue of the execution of a public
document by her on or about November 27, 1920, and by
collecting from the assignees of the original lessee the
monthly rent for the premises until April 30, 1926; and that
said defendant deposits with the clerk of court the sum of
P20.20 every month as rent thereof and that as a
counterclaim, he seeks the recovery of P272 for goods and
money delivered by him to the plaintiffs.
The plaintiffs filed a reply to the answer alleging,
among other things, that Ruperta Garcia was not one of the
coowners of the land in question; that the persons who
signed the alleged contract of lease never represented
themselves as being the sole and exclusive owners of the
land subject to the lease as alleged by the defendant in his
answer; that the said contract of lease of July 24, 1905, is
null and void for being executed without the intervention and
consent of two coowners, Ramon Melencio and Jose P.
Melencio, and without the marital consent of the husbands of
Juliana and Ruperta Melencio; that the lessee has repeatedly
violated the terms and conditions of the said contract; and
that Liberata Macapagal, in her capacity as administratrix of
the property of her deceased husband, could not lawfully and
legally execute a contract of lease with the conditions and
terms similar to that of the one under consideration, and that
from this it follows that she could not ratify the said lease as
claimed by the defendant.
On January 21, 1928, Liberta Macapagal Viuda de
Melencio, duly appointed and qualified as administratrix of
the estate of her deceased husbands, Ramon Melencio, filed a
petition praying to be allowed to join the plaintiffs as party to
the present case, which petition was granted in open court on
January 31, 1928. Her amended complaint of intervention of
February 14, 1928, contains allegations similar to those
alleged in the complaint of the original plaintiffs, and she
further alleges that the defendant-appellee has occupied the
land in question ever since November, 1920, under and by
virtue of a verbal contract of lease for a term from month to
month. To this complaint of intervention, the defendant-
appellee filed an answer reproducing the allegations
contained in his answer to the complaint of the original
plaintiffs and setting up prescription as a further special
defense.
It appears from the evidence that the land in
question was originally owned by one Julian Melencio. He
died prior to the year 1905 leaving his widow, Ruperta
Garcia, and his five children, Juliana, Ramon, Ruperta, Pedro
R., and Emilio Melencio. Emilio Melencio also died before
'905, his son Jose P. Melencio, then a minor, succeeding to
his interest in the said parcel of land by representation. A
question has been raised as to whether the land was
community property of the marriage of Julian Melencio and
Ruperta Garcia, but the evidence is practically undisputed
that Ruperta Garcia in reality held nothing but a widow's
usufruct in the land.
On July 24, 1905, Ruperta Garcia, Pedro R.
Melencio, Juliana Melencio, and Ruperta Melencio executed
a contract of lease of the land in favor of one Yap Kui Chin,
but neither Jose P. Melencio nor Ramon Melencio were
mentioned in the lease. The term of the lease was for twenty
years, extendible for a like period at the option of the lessee.
The purpose of the lessee was to establish a rice mill on the
land, with the necessary buildings for warehouses and for
quarters for the employees, and it was further stipulated that
at the termination of the original period of the lease, or the
extension thereof, the lessors might purchase all the
buildings and improvements on the land at a price to be fixed
by experts appointed by the parties, but that if the lessors
should fail to take advantage of that privilege, the lease
would continue for another and further period of twenty
years. The document was duly acknowledged but was never
recorded with the register of deeds. The original rent agreed
upon was P25 per month, but by reason of the construction
of a street through the land, the monthly rent was reduced to
P20.20.
Shortly after the execution of the lease, the lessee
took possession of the parcel in question and erected the mill
as well as the necessary buildings, and it appears that in
matters pertaining to the lease, he dealt with Pedro R.
Melencio, who from 1905 until his death in 1920, acted as
manager of the property held in common by the heirs of
Julian Melencio and Ruperta Garcia. The original lessee,
Yap Kui Chin, died in 1912, and the lease, as well as the
other property, was transferred to Uy Eng Jui who again
transferred it to Uy Eng Jui & Co., an unregistered
partnership. Finally the lease came into the hands of Dy Tiao
Lay, the herein defendant-appellee.
Ramon Melencio died in 1914, and his widow,
Liberata Macapagal, was appointed administratrix of his
estate. In 1913 the land which includes the parcel in question
was registered under the Torrens system. The lease was not
mentioned in the certificate of title, but it was stated that one
house and three warehouses on the land were the property of
Yap Kui Chin.
In 1920 the heirs of Julian Melencio made an
extrajudicial partition of parts of the inheritance, and among
other things, the land here in question fell to the share of the
children of Ramon Melencio, who are the original plaintiffs
in the present case. Their mother, Liberta Macapagal, as
administratrix of the estate of her deceased husband, Ramon,
collected the rent for the lease at the rate of P20.20 per
month until the month of May, 1926, when she demanded of
the lessee that the rent should be increased to P300 per
month, and she was then informed by the defendant that a
written lease existed and that according to the terms thereof,
the defendant was entitled to an extension of the lease at the
original rental. The plaintiffs insisted that they never had any
knowledge of the existence of such a contract of lease and
maintained that in such case the lease was executed without
their consent and was void. It may be noted that upon careful
search, a copy of the contract of lease was found among the
papers of the deceased Pedro R. Melencio. Thereafter the
present action was brought to set aside the lease and to
recover possession of the land. Upon trial, the court below
rendered judgment in favor of the defendant declaring the
lease valid and ordering the plaintiffs to pay the P272
demanded by the defendant in his counterclaim. From this
judgment the plaintiffs appealed.
The contention of the appellants is that the
aforesaid contract of lease (Exhibit C) is null and void for the
following reasons:
"1. That Exhibit C calls for an
alteration of the property in question and
therefore ought to have been signed by all
the coowners as by law required in the
premises.
"2. That the validity and
fulfillment of the said agreement of lease
were made to depend upon the will of the
lessee exclusively.
"3. That the said contract of lease
being for a term of over six years, the same
is null and void pursuant to the provision of
article 1548 of the Civil Code.

"4. That the duration of the same is
unreasonably long, thus being against public
policy.
"5. That the defendant-appellee
and his predecessors in interest repeatedly
violated the provisions of the agreements."
The first proposition is based on article 397 of the
Civil Code which provides that "none of the owners shall,
without the consent of the others, make any alterations in the
common property even though such alterations might be
advantageous to all." We do not think that the alterations are
of sufficient importance to nullify the lease, especially so
since none of the coowners objected to such alterations until
over twenty years after the execution of the contract of lease.
The decision of this court in the case of Enriquez vs. A. S.
Watson & Co. (22 Phil., 623), contains a full discussion of
the effect of alterations of lease community property, and no
further discussion upon that point need here be considered.
The second proposition is likewise of little merit.
Under the circumstances, the provision in the contract that
the lessee, at any time before he erected any building on the
land, might rescind the lease, can hardly be regarded as a
violation of article 1256 of the Civil Code.
The third and fourth propositions are, in our
opinion, determinative of the controversy. The court below
based its decision principally on the case of Enriquez vs. A.
S. Watson & Co. (22 Phil., 623), and on the resolution of
the Direccion General de los Registros dated April 26, 1907.
(Jurisprudecia Civil, vol. 107, p. 222.) An examination of
the Enriquez case will show that it differs materially from the
present. In that case all of the coowners of a lot and building
executed a contract of lease of the property for the term of
eighteen years in favor of A. S. Watson & Co.; one of the
owners was a minor, but he was represented by his legally
appointed guardian, and the action of the latter in signing the
lease on behalf of the minor was formally approved by the
Court of First Instance. In the present case only a small
majority of the coowners executed the lease here in question,
and according to the terms of the contract the lease might be
given a duration of sixty years; that is widely different from
a lease granted by allof the coowners for a term of only
eighteen years.
The resolution of April 26, 1907, is more in point.
It relates to the inscription or registration of a contract of
lease of some pasture grounds. The majority of the coowners
of the property executed the lease for the term of twelve
years, but when the lessees presented the lease for inscription
in the registry of property, the registrar denied the inscription
on the ground that the term of the lease exceeded six years
and that therefore the majority of the coowners lacked
authority to grant the lease. TheDireccion General de los
Registros held that the contract of lease for a period
exceeding six years, constitutes a real right subject to registry
and that the lease in question was valid.
The conclusions reached by the Direccion
General led to considerable criticism and have been
overruled by a decision of the Supreme Court of Spain dated
June 1, 1909. In that decision the court made the following
statement of the case (translation):
"The joint owners of 511 out of
1,000 parts of the realty denominated El
Mortero, leased out the whole property for
twelve years to Doa Josefa de la Rosa;
whereupon the Count and Countess
Trespalacios together with other coowners
brought this suit to annul the lease and, in
view of the fact that the land was indivisible,
prayed for its sale by public auction and the
distribution of the price so obtained; they
alleged that they neither took part nor
consented to the lease; that the decision of
the majority of part owners referred to in
article 398 of the Code, implies a common
deliberation on the step to be taken, for to do
without it, would, even more than to do
without the minority, be nothing less than
plunder; and that, even if this deliberation
were not absolutely necessary, the power of
the majority would still be confined to
decisions touching the management and
enjoyment of the common property, and
would not include acts of ownership, such as
a lease for twelve years, which according to
the Mortgage Law gives rise to a real right,
which must be recorded, and which can be
performed only by the owners of the
property leased.
"The part owners who had
executed the contract prayed in reconvention
that it be held valid for all the owners in
common, and if this could not be, then for
all those who had signed it, and for the rest,
for the period of six years; and
the Audiencia of Caceres having rendered
judgment holding the contract null and void,
and ordering the sale of the realty and the
distribution of the price, the defendants
appealed alleging under the third and fourth
assignments of error, that the judgment was
a violation of article 398 of the Civil Code,
which is absolute and sets no limit of time
for the efficacy of the decisions arrived at by
the majority of the part owners for the
enjoyment of the common property, citing
the decisions of June 30th, 1897, of July 8th,
1902, and of October 30th, 1907; under the
fifth assignment of error the appellants
contended that in including joint owners
among those referred to in said article,
which sets certain limits to the power of
leasing, in the course of the management of
another's property, the court applied article
1548 unduly; and by the seventh assignment
of error, they maintained the judgment
appealed from also violated article 1727,
providing that the principal is not bound
where his agent has acted beyond his
authority; whence it may be inferred, that if
in order to hold the contract null and void,
the majority of the part owners are looked
upon as managers or agents exercising
limited powers, it must at least be conceded
that in so far as the act in question lies
within the scope of their powers, it is valid;
the contract cannot be annulled in toto."
The Supreme Court held that the appeal from the
decision of the Audiencia of Caceres was not well taken and
expressed the following consideranda:
"Considering that, although as a
rule the contract of lease constitutes an act
of management, as this court has several
times held, cases may yet arise, either owing
to the nature of the subject matter, or to the
period of duration, which may render it
imperative to record the contract in the
registry of property, in pursuance of the
Mortgage Law, where the contract of lease
may give rise to a real right in favor of the
lessee, and it would then constitute such a
sundering of the ownership as transcends
mere management; in such cases it must of
necessity be recognized that the part owners
representing the greater portion of the
property held in common have no power to
lease said property for a longer period than
six years without the consent of all the
coowners, whose proprietary rights,
expressly recognized by the law, would by
contracts of long duration be restricted or
annulled; and as under article 1548 of the
Civil Code such contracts cannot be entered
into by the husband with respect to his
wife's property, by the parent or guardian
with respect to that of the child or ward, and
by the manager in default of special power,
since the contract of lease only produces
personal obligations, and cannot without the
consent of all persons interested or express
authority from the owner, be extended to
include stipulations which may alter its
character, changing it into a contract of
partial alienation of the property leased;
"Considering that, applying this
doctrine to the case before us, one of the
grounds upon which the judgment appealed
from, denying the validity of the lease made
by the majority of the part owners of the
pasture land El Mortero is based, must be
upheld; to wit, that the period of duration is
twelve years and the consent of all the
coowners has not been obtained; hence, the
third, fourth, and fifth assignments of error
are without merit; firstly, because article 398
of the Civil Code, alleged to have been
violated, refers to acts decided upon by the
majority of the part owners, touching the
management and enjoyment of the common
property, and does not contradict what we
have stated in the foregoing paragraph;
secondly, because although the cases cited
were such as arose upon leases for more
than sixty years, yet this point was not raised
on appeal, and could not therefore be passed
upon; and thirdly, because it cannot be
denied that there is an analogy between a
manager without special authority, who is
forbidden by article 1548 of the Code to
give a lease for a period of over six years,
and the joint owners constituting a legal
majority, who may decide to lease out the
indivisible property, with respect to the
shares of the other coowners; and having
come to the conclusion that the contract is
null and void, there is no need to discuss the
first two assignments of error which refer to
another of the bases adopted, however
erroneously, by the trial court;
"Considering that the sixth
assignment of error is without merit,
inasmuch as the joint ownership of property
is not a sort of agency and cannot be
governed by the provisions relating to the
latter contract; whence, article 1727 of the
Code alleged to have been violated, can no
more be applied, than, the question of the
validity or nullity of the lease being raised,
upon the contract as celebrated, it would be
allowable to modify a posteriori some one
or other of the main conditions stipulated,
like that regarding the duration of the lease,
for this would amount to a novation; still
less allowable would it be to authorize
diverse periods for the different persons
unequally interested in the fulfillment."
Taking into consideration articles 398, 1548, and
1713 of the Civil Code and following the aforesaid decision
of June 1,1909, we hold that the contract of lease here in
question is null and void.
It has been suggested that by reason of prescription
and by acceptance of benefits under the lease, the plaintiffs
are estopped to question the authority for making the lease.
To this we may answer that the burden of proof of
prescription devolved upon the defendant and that as far as
we can find, there is no proof that Ramon Melencio and his
successor over had knowledge of the existence of the lease in
question prior to 1926. We cannot by mere suspicion
conclude that they were informed of the existence of the
document and its terms; it must be remembered that under a
strict interpretation of the terms of the lease, the lessees
could remain indefinitely in their tenancy unless the lessors
could purchase the mill and the buildings on the land. In such
circumstances, better evidence than that presented by the
defendant in regard to the plaintiffs' knowledge of the lease
must be required.

The fact that Ramon during his lifetime received
his share of the products of land owned in common with his
coheirs is not sufficient proof of knowledge of the existence
of the contract of lease when it is considered that the land in
question was only a small portion of a large tract which
Pedro R. Melencio was administering in connection with
other community property.
The appealed judgment as to the validity of the
lease is therefore reversed, and it is ordered that the
possession of the land in controversy be delivered to the
intervenor Liberata Macapagal in her capacity as
administratrix of the estate of the deceased Ramon Melencio.
It is further ordered that the defendant pay to said
administratrix a monthly rent of P50 for the occupation of
the land from May 1st, 1926, until the land is delivered to the
administratrix. The sum of P272 demanded by the defendant
in his counterclaim may be deducted from the total amount
of the rent due and unpaid. The buildings erected on the land
by the defendant and his predecessors in interest may be
removed by him, or otherwise disposed of, within six months
from the promulgation of this decision. Without costs. So
ordered.
Avancea, C. J., Malcolm, Johns,
Romualdez and Villa-Real, JJ., concur.
||| (Melencio v. Dy Tiao Lay, G.R. No. 32047, November 01,
1930)

[G.R. No. L-3404. April 2, 1951.]
ANGELA I. TUASON, plaintiff-
appellant, vs. ANTONIO TUASON, JR.,
and GREGORIO ARANETA,
INC., defendants-appellees.
Alcuaz & Eiguren, for appellant.
Araneta & Araneta, for appellees.
SYLLABUS
1. COMMUNITY PROPERTY; PARTITION;
RESCISSION. A contract among land co-owners wherein
they agreed to fill their property, contract roads therein and
then subdivide in into small lots for sale, the proceeds to be
later divide among them, and to this end one of them was to
finance the whole development and subdivision, to prepare a
schedule of prices and conditions of sale subject to the
approval of the other two co-owners, to sell the subdivided
lots and execute the corresponding contracts with buyers, and
to receive 50 per cent of the gross selling price of the lots and
the rents that may be collected from the property while in the
process of sale, the remaining 50 per cent to be divided in
equal portions among the three co-owners, does not
violate article 400 of the Civil Code. Far from violating the
prohibition against a co-owner being obliged to remain a
party to the community, the contract precisely has for its
purpose and object the dissolution of the co-ownership and
of the community by selling the parcel held in common and
dividing the proceeds of the sale among the co-owners. The
obligation imposed in the contract to preserve the co-
ownership until all the lots shall have been sold is a mere
incident to the main object of dissolving the co-ownership.
D E C I S I O N
MONTEMAYOR, J p:
In 1941 the sisters Angela I. Tuason and Nieves
Tuason de Barreto and their brother Antonio Tuason Jr., held
a parcel of land with an area of 64,928.6 sq. m. covered by
Certificate of Title No. 60911 in Sampaloc, Manila, in
common, each owning an undivided 1/3 portion. Nieves
wanted and asked for a partition of the common property, but
failing in this, she offered to sell her 1/3 portion. It seems
that the objection to dividing the property was that it would
lose in value by the proposed partition. The share of Nieves
was offered for sale to her sister and her brother but both
declined to buy it. The offer was later made to their mother
but the old lady also declined to buy, saying that if the
property later increased in value, she might be suspected of
having taken advantage of her daughter. Finally, the share of
Nieves was sold to Gregorio Araneta Inc., a domestic
corporation, and a new Certificate of Title No. 61721 was
issued in lieu of the old title No. 60911 covering the same
property. The three co-owners agreed to have the whole
parcel subdivided into small lots and then sold, the proceeds
of the sale to be later divided among them. This agreement is
embodied in a document (Exh. 6) entitled "Memorandum of
Agreement" consisting of ten pages, dated June 30, 1941.
Before, during and after the execution of this
contract (Exh. 6), Atty. J. Antonio Araneta was acting as the
attorney-in-fact and lawyer of the two co-owners, Angela I.
Tuason and her brother Antonio Tuason Jr. At the same time
he was a member of the Board of Directors of the third co-
owner, Araneta, Inc.
The pertinent terms of the contract (Exh. 6) may be
briefly stated as follows: The three co-owners agreed to
improve the property by filling it and constructing roads and
curbs on the same and then subdivide it into small lots for
sale. Araneta Inc. was to finance the whole development and
subdivision; it was to prepare a schedule of prices and
conditions of sale, subject to the approval of the two other
co-owners; it was invested with authority to sell the lots into
which the property was to be subdivided, and execute the
corresponding contracts and deeds of sale; it was also to pay
the real estate taxes due on the property or of any portion
thereof that remained unsold, the expenses of surveying,
improvements, etc., all advertising expenses, salaries of
personnel, commissions, office and legal expenses, including
expenses in instituting all actions to eject all tenants or
occupants on the property; and it undertook the duty to
furnish each of the two co-owners, Angela and Antonio
Tuason, copies of the subdivision plans and the monthly
sales and rents and collections made thereon. In return for all
this undertaking and obligation assumed by Araneta Inc.,
particularly the financial burden, it was to receive 50 per cent
of the gross selling price of the lots, and any rents that may
be collected from the property, while in the process of sale,
the remaining 50 per cent to be divided in equal portions
among the three co-owners so that each will receive 16.33
per cent of the gross receipts.
Because of the importance of paragraphs 9, 11 and
15 of the contract (Exh. 6), for purposes of reference we are
reproducing them below:
"(9) This contract shall remain in
full force and effect during all the time that
it may be necessary for the PARTY OF THE
SECOND PART to fully sell the said
property in small and subdivided lots and to
fully collect the purchase prices due thereon;
it being understood and agreed that said lots
may be rented while there are no purchasers
thereof;
"(11) The PARTY OF THE
SECOND PART (meaning Araneta Inc.) is
hereby given full power and authority to
sign for and in behalf of all the said co-
owners of said property all contracts of sale
and deeds of sale of the lots into which this
property might be subdivided; the powers
herein vested to the PARTY OF SECOND
PART may not be revoked until the
purposes of this contract have been fulfilled
and carried out, and the PARTY OF THE
SECOND PART may, under its own
responsibility and risk, delegate any of its
powers under this contract to any of its
officers, employees or to third persons;
"(15) No co-owner of the property
subject-matter of this contract shall sell,
alienate or dispose of his ownership, interest
or participation therein without first giving
preference to the other co-owners to
purchase and acquire the same under the
same farms and conditions as those offered
by any other prospective purchaser. Should
none of the co-owners of the property
subject-matter of this contract exercise the
said preference to acquire or purchase the
same, then such sale to a third party shall be
made subject to all the conditions, terms,
and dispositions of this contract; provided,
the PARTIES OF THE FIRST PART
(meaning Angela and Antonio) shall be
bound by this contract as long as the
PARTY OF THE SECOND PART, namely,
the GREGORIO ARANETA, INC. is
controlled by the members of the Araneta
family, who are stockholders of the said
corporation at the time of the signing of this
contract and/or their lawful heirs;"
On September 16, 1944, Angela I. Tuason revoked
the powers conferred on her attorney-in-fact and lawyer, J.
Antonio Araneta. Then in a letter dated October 19, 1946,
Angela notified Araneta, Inc. that because of alleged breach
of the terms of the "Memorandum of Agreement" (Exh. 6)
and abuse of powers granted to it in the document, she had
decided to rescind said contract and she asked that the
property held in common be partitioned. Later, on November
20, 1946, Angela filed a complaint in the Court of First
Instance of Manila asking the court to order the partition of
the property in question and that she be given 1/3 of the same
including rents collected during the time that Araneta Inc.,
administered said property.
The suit was directed principally against Araneta,
Inc. Plaintiff's brother, Antonio Tuason Jr., one of the co-
owners evidently did not agree to the suit and its purpose, for
he joined Araneta, Inc. as a co-defendant. After hearing and
after considering the extensive evidence introduced, oral and
documentary, the trial court presided over by Judge Emilio
Pea in a long and considered decision dismissed the
complaint without pronouncement as to costs. The plaintiff
appealed from that decision, and because the property is
valued at more than P50,000, the appeal came directly to this
Court.
Some of the reasons advanced by appellant to have
the memorandum contract (Exh. 6) declared null and void or
rescinded are that she had been tricked into signing it; that
she was given to understand by Antonio Araneta acting as
her attorney-in-fact and legal adviser that said contract would
be similar to another contract of subdivision of a parcel into
lots and the sale thereof entered into by Gregorio Araneta
Inc., and the heirs of D. Tuason, Exhibit "L", but it turned
out that the two contracts widely differed from each other,
the terms of contract Exh. "L" being relatively much more
favorable to the owners therein and less favorable to Araneta
Inc.; that Atty. Antonio Araneta was more or less
disqualified to act as her legal adviser as he did because he
was one of the officials of Araneta Inc., and finally, that the
defendant company has violated the terms of the contract
(Exh. 6) by not previously showing her the plans of the
subdivision, the schedule of prices and conditions of the sale,
in not introducing the necessary improvements into the land
and in not delivering to her share of the proceeds of the rents
and sales.
We have examined Exh. "L" and compared the
same with the contract (Exh. 6) and we agree with the trial
court that in the main the terms of both contracts are similar
and practically the same. Moreover, as correctly found by the
trial court, the copies of both contracts were shown to the
plaintiff Angela and her husband, a broker, and both had
every opportunity to go over and compare them and decide
on the advisability of or disadvantage in entering into the
contract (Exh. 6); that although Atty. Antonio Araneta was
an official of the Araneta Inc.; being a member of the Board
of Directors of the Company at the time that Exhibit "6" was
executed, he was not the party with which Angela contracted,
and that he committed no breach of trust. According to the
evidence Araneta, Inc. showed to her the plans of the
subdivision and all the pertinent papers, and sent to her
checks covering her share of the proceeds of the sale but that
she refused to receive the same; and that as a matter of fact,
at the time of the trial, Araneta Inc., had spent about
P117,000 in improvement and had received as proceeds on
the sale of the lots the respectable sum of P1,265,538.48. We
quote with approval that portion of the decision appealed
from on these points:

"The evidence in this case points to
the fact that the actuations of J. Antonio
Araneta in connection with the execution of
exhibit 6 by the parties, are above board. He
committed nothing that is violative of the
fiduciary relationship existing between him
and the plaintiff. The act of J. Antonio
Araneta in giving the plaintiff a copy of
exhibit 6 before the same was executed,
constitutes a full disclosure of the facts, for
said copy contains all that appears now in
exhibit 6.
"Plaintiff charges the defendant
Gregorio Araneta, Inc. with infringing the
terms of the contract in that the defendant
corporation has failed (1) to make the
necessary improvements on the property as
required by paragraphs 1 and 3 of the
contract; (2) to submit to the plaintiff from
time to time schedule of prices and
conditions under which the subdivided lots
are to be sold; and to furnish the plaintiff a
copy of the subdivision plans, a copy of the
monthly statement of the sales and rents of
the subdivided lots, and a statement of the
monthly gross collections from the sale of
the property.
"The Court finds from the evidence
that the defendant Gregorio Araneta,
Incorporated has substantially complied with
the obligation imposed by the contract
exhibit 6 in its paragraph 1, and that for
improvements alone, it has disbursed the
amount of P117,167.09. It has likewise paid
taxes, commissions and other expenses
incidental to its obligations as defined in the
agreement.
"With respect to the charge that
Gregorio Araneta, Incorporated has failed to
submit to plaintiff a copy of the subdivision
plans, list of prices and the conditions
governing the sale of subdivided lots, and
monthly statement of collections from the
sale of the lots, the Court is of the opinion
that it has no basis. The evidence shows that
the defendant corporation submitted to the
plaintiff periodically all the data relative to
prices and conditions of the sale of the
subdivided lots, together with the amount
corresponding to her. But without any
justifiable reason, she refused to accept
them. With the indifferent attitude adopted
by the plaintiff, it was thought useless for
Gregorio Araneta, Incorporated to continue
sending her statement of accounts, checks
and other things. She had shown on various
occasions that she did not went to have any
further dealings with the said corporation.
So, if the defendant corporation proceeded
with the sale of the subdivided lots without
the approval of the plaintiff, it was because
it was under the correct impression that
under the contract exhibit 6 the decision of
the majority co-owners is binding upon all
the three.
"The Court feels that rescission of
the contract exhibit 6 is not in order. Even
granting that the defendant corporation
committed minor violations of the terms of
the agreement, the general rule is that
'rescission will not be permitted for a slight
or casual breach of the contract, but only for
such breaches as are so substantial and
fundamental as to defeat the object of the
parties in making the agreement' (Song Fo &
Co. vs. Hawaiian-Philippine Co., 47 Phil.
821)."
As regards improvements, the evidence shows that
during the Japanese occupation from 1942 and up to 1946,
the Araneta Inc. although willing to fill the land, was unable
to obtain the equipment and gasoline necessary for filling the
low places within the parcel. As to sales, the evidence shows
that Araneta Inc. purposely stopped selling the lots during
the Japanese occupation, knowing that the purchase price
would be paid in Japanese military notes; and Atty. Araneta
claims that for this, plaintiff should be thankful because
otherwise she would have received these notes as her share
of the receipts, which currency later became valueless.
But the main contention of the appellant is that the
contract (Exh. 6) should be declared null and void because its
terms, particularly paragraphs 9, 11 and 15 which we have
reproduced, violate the provisions of Art. 400 of the Civil
Code, which for the purposes of reference we quote below:
"ART. 400. No co-owner shall be
obliged to remain a party to the community.
Each may, at any time, demand the partition
of the thing held in common.
"Nevertheless, an agreement to
keep the thing undivided for a specified
length of time, not exceeding ten years, shall
be valid. This period may be a new
agreement."
We agree with the trial court that the provisions of
Art. 400 of the Civil Code are not applicable. The contract
(Exh. 6) far from violating the legal provision that forbids a
co-owner being obliged to remain a party to the community,
precisely has for its purpose and object the dissolution of the
co-ownership and of the community by selling the parcel
held in common and dividing the proceeds of the sale among
the co-owners. The obligation imposed in the contract to
preserve the co-ownership until all the lots shall have been
sold, is a mere incident to the main object of dissolving the
co-ownership. By virtue of the document Exh. 6, the parties
thereto practically and substantially entered into a contract of
partnership as the best and most expedient means of
eventually dissolving the co-ownership, the life of said
partnership to end when the object of its creation shall have
been attained.
This aspect of the contract is very similar to and
was perhaps based on the other agreement or contract (Exh.
"L") referred to by appellant where the parties thereto in
express terms entered into a partnership, although this object
is not expressed in so many words in Exh. 6. We repeat that
we see no violation of Art. 400 of the Civil Code in the
parties entering into the contract (Exh. 6) for the very reason
that Art. 400 is not applicable.
Looking at the case from a practical standpoint as
did the trial court, we find no valid ground for the partition
insisted upon the appellant. We find from the evidence as
was done by the trial court that of the 64,928.6 sq. m. which
is the total area of the parcel held in common, only 1,600 sq.
m. or 2.5 per cent of the entire area remained unsold at the
time of the trial in the year 1947, while the great bulk of 97.5
per cent had already been sold. As well observed by the court
below, the partnership is in the process of being dissolved
and is about to be dissolved, and even assuming that Art. 400
of the Civil Code were applicable, under which the parties by
agreement may agree to keep the thing undivided for a
period not exceeding 10 years, there should be no fear that
the remaining 1,600 sq. m. could not be disposed of within
the four years left of the ten-year period fixed by Art. 400.
We deem it unnecessary to discuss and pass upon
the other points raised in the appeal and which counsel for
appellant has extensively and ably discussed, citing
numerous authorities. As we have already said, we have
viewed the case from a practical standpoint, brushing aside
technicalities and disregarding any minor violations of the
contract, and in deciding the case as we do, we are fully
convinced that the trial court and this Tribunal are carrying
out in a practical and expeditious way the intentions and the
agreement of the parties contained in the contract (Exh. 6),
namely, to dissolve the community and co-ownership, in a
manner most profitable to the said parties.
In view of the foregoing, the decision appealed
from is hereby affirmed. There is no pronouncement as to
costs.
So ordered.
||| (Tuason v. Tuason, Jr., G.R. No. L-3404, April 02, 1951)

SECOND DIVISION
[G.R. No. 101522. May 28, 1993.]
LEONARDO MARIANO, AVELINA,
TIGUE, LAZARO MARIANO,
MERCEDES SAN PEDRO, DIONISIA
M. AQUINO, and JOSE N.T.
AQUINO, petitioners, vs.HON. COURT
OF APPEALS, (Sixteenth Division),
GRACE GOSIENGFIAO, assisted by her
husband CHARLIE GUILLEN; EMMA
GOSIENGFIAO, assisted by her husband
GERMAN GALCOS; ESTER
GOSIENGFIAO, assisted by her husband
AMADOR BITONA; FRANCISCO
GOSIENGFIAO, JR., NORMA
GOSIENGFIAO, and PINKY ROSE
GUENO, respondents.
The Barristers Law Office for petitioners.
Simeon T. Agustin for private respondents.
SYLLABUS
1. CIVIL LAW; PROPERTY, OWNERSHIP AND ITS
MODIFICATION; CO-OWNERSHIP; REDEMPTION MADE
BY A CO-OWNER WITHIN PERIOD, INURES TO THE
BENEFIT OF ALL. A redemption by a co-owner within the
period prescribed by law inures to the benefit of all the other co-
owners.
2. ID.; OBLIGATIONS AND CONTRACTS; MORTGAGE;
RIGHT OF REDEMPTION UNDER ARTICLES 1088 AND
1620 OF THE CIVIL CODE, DISTINGUISHED. According
to Tolentino, the fine distinction between Article 1088 and Article
1620 is that when the sale consists of an interest in some
particular property or properties of the inheritance, the right of
redemption that arises in favor of the other co-heirs is that
recognized in Article 1620. On the other hand, if the sale is the
hereditary right itself, fully or in part, in the abstract sense,
without specifying any particular object, the right recognized in
Article 1088 exists.
3. ID.; ID.; ID.; LEGAL REDEMPTION; GIVING COPY OF
DEED OF SALE, EQUIVALENT TO WRITTEN NOTICE.
The giving of a copy of a deed is equivalent to the notice as
required by law in legal redemption. (Conejero, et al., v. Court of
Appeals, et al., 16 SCRA 775 [1966]) The requirement of a
written notice has long been settled as early as in the case of
Castillo v. Samonte, where this Court quoted the ruling in
Hernaez v. Hernaez, 32 Phil., 214, thus: "'Both the letter and
spirit of the New Civil Code argue against any attempt to widen
the scope of the notice specified in Article 1088 by including
therein any other kind of notice, such as verbal or by registration.
If the intention of the law had been to include verbal notice or any
other means of information as sufficient to give the effect of this
notice, then there would have been no necessity or reasons to
specify in Article 1088 of the New Civil Code that the said notice
be made in writing for, under the old law, a verbal notice or
information was sufficient.'"
4. ID.; ID.; ID.; ID.; ID.; DOCTRINE IN CONEJERO CASE (16
SCRA 775 [1966] NOT APPLICABLE TO THE CASE AT
BAR. We do not dispute the principle laid down in
theConejero case. However, the facts in the said case are not four
square with the facts of the present case.
In Conejero, redemptioner Enrique Conejero was shown and
given a copy of the deed of sale of the subject property. The Court
in that case stated that the furnishing of a copy of the deed was
equivalent to the giving of a written notice required by law. The
records of the present petition, however, show no written notice
of the sale being given whatsoever to private respondents.
Although, petitioners allege that sometime on October 31, 1982
private respondent, Grace Gosiengfiao was given a copy of the
questioned deed of sale and shown a copy of the document at the
Office of the Barangay Captain sometime November 18, 1982,
this was not supported by the evidence presented.
5. ID.; ID.; ID.; ID.; REASON FOR REQUIREMENT OF
WRITTEN NOTICE. Consistent with aforesaid ruling, in the
interpretation of a related provision (Article 1623 of the New
Civil Code) this Court had stressed that written notice is
indispensable, actual knowledge of the sale acquired in some
other manners by the redemptioner, notwithstanding. He or she is
still entitled to written notice, as exacted by the code to remove
all uncertainty as to the sale, its terms and its validity, and to
quiet any doubt that the alienation is not definitive. The law not
having provided for any alternative, the method of notifications
remains exclusive, though the Code does not prescribe any
particular form of written notice nor any distinctive method for
written notification of redemption (Garcia v. Calaliman, 172
SCRA 201 [1989] and other cases cited).
6. ID.; ID.; ID.; ID.; FAILURE TO CONSIGN FULL
REDEMPTION PRICE, NOT REQUIRED; MERE TENDER OF
PAYMENT SUFFICIENT TO ENFORCE RIGHT. We
likewise do not find merit in petitioners' position that private
respondents could not have validly effected redemption due to
their failure to consign in court the full redemption price after the
tender thereof was rejected by the petitioners. Consignation is not
necessary, because the tender of payment was not made to
discharge an obligation, but to enforce or exercise a right. It has
been previously held that consignation is not required to preserve
the right of repurchase as a mere tender of payment is enough if
made on time as a basis for an action to compel the vendee a retro
to resell the property; no subsequent consignation was necessary
to entitle private respondents to such reconveyance.
D E C I S I O N
NOCON, J p:
Before Us is a petition for review of the decision dated May 13,
1991 of the Court of Appeals in CA-G.R. CV No. 13122,
entitled Grace Gosiengfiao, et al. v. Leonardo Mariano v.
Amparo Gosiengfiao 1 raising as issue the distinction between
Article 1088 2 and Article 1620 3 of the Civil Code.
The Court of Appeals summarized the facts as follows:
"It appears on record that the decedent
Francisco Gosiengfiao is the registered
owner of a residential lot located at Ugac
Sur, Tuguegarao, Cagayan, particularly
described as follows, to wit:
'The eastern portion of
Lot 1351, Tuguegarao Cadastre,
and after its segregation now
designated as Lot 1351-A, Plan
PSD-67391, with an area of 1,346
square meters.'
and covered by Transfer Certificate of Title
No. T-2416 recorded in the Register of
Deeds of Cagayan.
"The lot in question was mortgaged by the
decedent to the Rural Bank of Tuguegarao
(designated as Mortgagee bank, for brevity)
on several occasions before the last, being
on March 9, 1956 and January 29, 1958.
"On August 15, 1958, Francisco
Gosiengfiao died intestate survived by his
heirs, namely: Third-Party Defendants: wife
Antonia and Children Amparo, Carlos,
Severino and herein plaintiffs-appellants
Grace, Emma, Ester, Francisco, Jr., Norma,
Lina (represented by daughter Pinky Rose),
and Jacinto.
"The loan being unpaid, the lot in dispute
was foreclosed by the mortgagee bank and
in the foreclosure sale held on December 27,
1963, the same was awarded to the
mortgagee bank as the highest bidder.
"On February 7, 1964, third-party defendant
Amparo Gosiengfiao-Ibarra redeemed the
property by paying the amount of P1,347.89
and the balance of P423.35 was paid on
December 28, 1964 to the mortgagee bank.
"On September 10, 1965, Antonia
Gosiengfiao on her behalf and that of her
minor children Emma, Lina, Norma together
with Carlos and Severino executed a `Deed
of Assignment of the Right of Redemption'
in favor of Amparo G. Ibarra appearing in
the notarial register of Pedro (Laggui) as
Doc. No. 257, Page No. 6, Book No. 8,
Series of 1965.
"On August 15, 1966, Amparo Gosiengfiao
sold the entire property to defendant
Leonardo Mariano who subsequently
established residence on the lot subject of
this controversy. It appears in the Deed of
Sale dated August 15, 1966 that Amparo,
Antonia, Carlos and Severino were
signatories thereto.
"Sometime in 1982, plaintiff-appellant
Grace Gosiengfiao learned of the sale of
said property by the third-party defendants.
She went to the Barangay Captain and asked
for a confrontation with defendants
Leonardo and Avelina Mariano to present
her claim to the said property.
"On November 27, 1982, no settlement
having been reached by the parties, the
Barangay Captain issued a certificate to file
action.
"On December 8, 1982, defendant Leonardo
Mariano sold the same property to his
children Lazaro F. Mariano and Dionicia M.
Aquino as evidenced by a Deed of Sale
notarized by Hilarion L. Aquino as Doc. No.
143, Page No. 19, Book No. V, Series of
1982.
"On December 21, 1982, plaintiffs Grace
Gosiengfiao, et al. filed a complaint for
'recovery of possession and legal redemption
with damages' against defendants Leonardo
and Avelina Mariano. Plaintiffs alleged in
their complaint that as co-heirs and co-
owners of the lot in question, they have the
right to recover their respective shares in the
said property as they did not sell the same,
and the right of redemption with regard to
the shares of other co-owners sold to the
defendants.
"Defendants in their answer alleged that the
plaintiffs has (sic) no cause of action against
them as the money used to redeem the lot in
question was solely from the personal funds
of third-party defendant Amparo
Gosiengfiao-Ibarra, who consequently
became the sole owner of the said property
and thus validly sold the entire property to
the defendants, and the fact that defendants
had already sold the said property to their
children, Lazaro Mariano and Dionicia M.
Aquino. Defendants further contend that
even granting that the plaintiffs are co-
owners with the third-party defendants, their
right of redemption had already been barred
by the Statute of Limitations under Article
1144 of the Civil Code, if not by laches." 4
After trial on the merits, the Regional Trial Court of Cagayan,
Branch I, rendered a decision dated September 16, 1986,
dismissing the complaint and stating that respondents have no
right of ownership or possession over the lot in question. The trial
court further said that when the subject property was foreclosed
and sold at public auction, the rights of the heirs were reduced to
a mere right of redemption. And when Amparo G. Ibarra
redeemed the lot from the Rural Bank on her own behalf and with
her own money she became the sole owner of the property.
Respondents' having failed to redeem the property from the bank
or from Amparo G. Ibarra, lost whatever rights they might have
on the property. 5

The Court of Appeals in its questioned decision reversed and set
aside the ruling of the trial court and declared herein respondents
as co-owners of the property in the question. The Court of
Appeals said: LibLex
"The whole controversy in the case at bar
revolves on the question of 'whether or not a
co-owner who redeems the whole property
with her own personal funds becomes the
sole owner of said property and terminates
the existing state of co-ownership.'
"Admittedly, as the property in question was
mortgaged by the decedent, a co-ownership
existed among the heirs during the period
given by law to redeem the foreclosed
property. Redemption of the whole property
by a co-owner does not vest in him sole
ownership over said property but will inure
to the benefit of all co-owners. In other
words, it will not put an end to the existing
state of co-ownership. Redemption is not a
mode of terminating a co-ownership.
xxx xxx xxx
"In the case at bar, it is undisputed and
supported by records, that third-party
defendant Amparo G. Ibarra redeemed the
property in dispute within the one year
redemption period. Her redemption of the
property, even granting that the money used
was from her own personal funds did not
make her the exclusive owner of the
mortgaged property owned in common but
inured to the benefit of all co-owners. It
would have been otherwise if third-party
defendant Amparo G. Ibarra purchased the
said property from the mortgagee bank
(highest bidder in the foreclosure sale) after
the redemption period had already expired
and after the mortgagee bank had
consolidated it title in which case there
would no longer be any co-ownership to
speak of." 6
The decision of the Court of Appeals is supported by a long line
of case law which states that a redemption by a co-owner within
the period prescribed by law inures to the benefit of all the other
co-owners. 7
The main argument of petitioners in the case at bar is that the
Court of Appeals incorrectly applied Article 1620 of the Civil
Code, instead of Article 1088 of the same code which governs
legal redemption by co-heirs since the lot in question, which
forms part of the intestate estate of the late Francisco
Gosiengfiao, was never the subject of partition or distribution
among the heirs, thus, private respondents and third-party
defendants had not ceased to be co-heirs. LLjur
On that premise, petitioners further contend that the right of legal
redemption was not timely exercised by the private respondents,
since Article 1088 prescribes that the same must be done within
the period of one month from the time they were notified in
writing of the sale by the vendor.
According to Tolentino, the fine distinction between Article 1088
and Article 1620 is that when the sale consists of an interest in
some particular property or properties of the inheritance, the right
of redemption that arises in favor of the other co-heirs is that
recognized in Article 1620. On the other hand, if the sale is the
hereditary right itself, fully or in part, in the abstract sense,
without specifying any particular object, the right recognized in
Article 1088 exists. 8
Petitioners allege that upon the facts and circumstances of the
present case, respondents failed to exercise their right of legal
redemption during the period provided by law, citing as authority
the case of Conejero, et al., v. Court of Appeals, et al. 9 wherein
the Court adopted the principle that the giving of a copy of a deed
is equivalent to the notice as required by law in legal
redemption. prLL
We do not dispute the principle laid down in the Conejero case.
However, the facts in the said case are not four square with the
facts of the present case. In Conejero,redemptioner Enrique
Conejero was shown and given a copy of the deed of sale of the
subject property. The Court in that case stated that the furnishing
of a copy of the deed was equivalent to the giving of a written
notice required by law. 10
The records of the present petition, however, show no written
notice of the sale being given whatsoever to private respondents.
Although, petitioners allege that sometime on October 31, 1982
private respondent, Grace Gosiengfiao was given a copy of the
questioned deed of sale and shown a copy of the document at the
Office of the Barangay Captain sometime November 18, 1982,
this was not supported by the evidence presented. On the
contrary, respondent, Grace Gosiengfiao, in her testimony,
declared as follows:
Q When you went back to the residence of
Atty. Pedro Laggui were you able
to see him?
A Yes, I did.
Q When you saw him, what did you tell?
A I asked him about the Deed of Sale which
Mrs. Aquino had told me and he
also showed me a Deed of Sale. I
went over the Deed of Sale and I
asked Atty. Laggui about this and
he mentioned here about the names
of the legal heirs. I asked why my
name is not included and I was
never informed in writing because
I would like to claim and he told
me to better consult my own
attorney.
Q And did you go?
A Yes, I did.
Q What kind of copy or document is that?
A It is a deed of sale signed by my mother,
sister Amparo and my brothers.
Q If shown to you the copy of the Deed of
Sale will you be able to identify it?
A Yes, sir. 11
Thereafter, Grace Gosiengfiao explicitly stated that she was
never given a copy of the said Deed of Sale.
Q Where did Don Mariano, Dr. Mariano and
you see each other?
A In the house of Brgy. Captain Antonio
Bassig.
Q What transpired in the house of the Brgy.
Captain when you saw each other
there?
A Brgy. Captain Bassig informed my
intention of claiming the lot and I
also informed him about the Deed
of Sale that was not signed by me
since it is mine it is already sold
and I was never informed in
writing about it. I am a legal heir
and I have also the right to claim.
Q And what was the reply of Don Mariano
and Dr. Mariano to the information
given to them by Brgy. Captain
Bassig regarding your claim?
A He insisted that the lot is already his
because of the Deed of Sale. I
asked for the exact copy so that I
could show to him that I did not
sign and he said he does not have a
copy. 12
The above testimony was never refuted by Dr. Mariano who
was present before Brgy. Captain Bassig.
The requirement of a written notice has long been settled as early
as in the case of Castillo v. Samonte, 13 where this Court quoted
the ruling in Hernaez v. Hernaez, 32 Phil., 214, thus:
"'Both the letter and spirit of the New Civil
Code argue against any attempt to widen the
scope of the notice specified in Article 1088
by including therein any other kind of
notice, such as verbal or by registration. If
the intention of the law had been to include
verbal notice or any other means of
information as sufficient to give the effect of
this notice, then there would have been no
necessity or reasons to specify in Article
1088 of the New Civil Code that the said
notice be made in writing for, under the old
law, a verbal notice or information was
sufficient.'" 14
Moreover, petitioners themselves adopted in their argument
respondents' allegation in their complaint that sometime on
October, 1982 they sought the redemption of the property from
spouses Leonardo Mariano and Avelina Tigue, by tendering the
repurchase money of P12,000.00, which the spouses
rejected. 15 Consequently, private respondents exercised their
right of redemption at the first opportunity they have by tendering
the repurchase price to petitioners. The complaint they filed
before the Barangay Captain and then to the Regional Trial Court
was necessary to assert their rights. As we learned in the case
of Castillo, supra: Cdpr
"It would seem clear from the above that the
reimbursement to the purchaser within the
period of one month from the notice in
writing is a requisite or condition precedent
to the exercise of the right of legal
redemption; the bringing of an action in
court is the remedy to enforce that right in
case the purchaser refuses the redemption.
The first must be done within the month-
period; the second within the prescriptive
period provided in the Statute of
Limitation." 16
The ruling in Castillo v. Samonte, supra, was reiterated in the
case of Garcia v. Calaliman, where We also discussed the reason
for the requirement of the written notice. We said:
"Consistent with aforesaid ruling, in the
interpretation of a related provision (Article
1623 of the New Civil Code) this Court had
stressed that written notice is indispensable,
actual knowledge of the sale acquired in
some other manners by the redemptioner,
notwithstanding. He or she is still entitled to
written notice, as exacted by the code
to remove all uncertainty as to the sale, its
terms and its validity, and to quiet any doubt
that the alienation is not definitive. The law
not having provided for any alternative, the
method of notifications remains exclusive,
though the Code does not prescribe any
particular form of written notice nor any
distinctive method for written notification of
redemption (Conejero et al. v. Court of
Appeals et al., 16 SCRA 775 [1966];
Etcuban v. Court of Appeals, 148 SCRA
507 [1987]; Cabrera v. Villanueva, G.R. No.
75069, April 15, 1988)." 17 (Emphasis,
ours)
We likewise do not find merit in petitioners' position that private
respondents could not have validly effected redemption due to
their failure to consign in court the full redemption price after the
tender thereof was rejected by the petitioners. Consignation is not
necessary, because the tender of payment was not made to
discharge an obligation, but to enforce or exercise a right. It has
been previously held that consignation is not required to preserve
the right of repurchase as a mere tender of payment is enough if
made on time as a basis for an action to compel the vendee a retro
to resell the property; no subsequent consignation was necessary
to entitle private respondents to such reconveyance. 18

Premises considered, respondents have not lost their right to
redeem, for in the absence of a written notification of the sale by
the vendors, the 30-day period has not even begun to run.
WHEREFORE, the decision of the Court of Appeals is hereby
AFFIRMED. Cost against petitioners.
SO ORDERED.

[G.R. No. 161916. January 20, 2006.]
ARNELITO ADLAWAN, petitioner, vs.
EMETERIO M. ADLAWAN and
NARCISA M. ADLAWAN, respondents.
Neri & Associates Law Firm for petitioner.
Alo & Velasquez Law Office for respondents.
SYLLABUS
1.REMEDIAL LAW; CIVIL PROCEDURE; PARTIES;
PETITIONER HAS NO AUTHORITY TO INSTITUTE
EJECTMENT CASE AS SOLE OWNER OF SUBJECT
PROPERTY CO-OWNED WITH OTHER HEIRS; CASE AT
BAR. The decisive issue to be resolved is whether or not
petitioner can validly maintain the instant case for ejectment.
Petitioner averred that he is an acknowledged illegitimate son and
the sole heir of Dominador. He in fact executed an affidavit
adjudicating to himself the controverted property. In ruling for the
petitioner, the RTC held that the questioned January 31, 1962
deed of sale validly transferred title to Dominador and that
petitioner is his acknowledged illegitimate son who inherited
ownership of the questioned lot. The Court notes, however, that
the RTC lost sight of the fact that the theory of succession
invoked by petitioner would end up proving that he is not the sole
owner of Lot 7226. This is so because Dominador was survived
not only by petitioner but also by his legal wife, Graciana, who
died 10 years after the demise of Dominador on May 28, 1987.
By intestate succession, Graciana and petitioner became co-
owners of Lot 7226. The death of Graciana on May 6, 1997, did
not make petitioner the absolute owner of Lot 7226 because the
share of Graciana passed to her relatives by consanguinity and not
to petitioner with whom she had no blood relations. The Court of
Appeals thus correctly held that petitioner has no authority to
institute the instant action as the sole owner of Lot 7226.
2.CIVIL LAW; PROPERTY; CO-OWNERSHIP; THAT ANY
ONE OF CO-OWNERS MAY BRING ACTION FOR
EJECTMENT; NOT PROPER WHERE SUIT FILED FOR THE
BENEFIT OF ONE CO-OWNER ALONE WHO CLAIMS
SOLE OWNERSHIP OF THE SUBJECT PROPERTY; CASE
AT BAR. Petitioner contends that even granting that he has
co-owners over Lot 7226, he can on his own file the instant case
pursuant to Article 487 of the Civil Code which provides: ART.
487. Any one of the co-owners may bring an action in ejectment.
This article covers all kinds of actions for the recovery of
possession. Article 487 includes forcible entry and unlawful
detainer (action interdictal), recovery of possession (action
publiciana), and recovery of ownership (action de reivindicacion).
A co-owner may bring such an action without the necessity of
joining all the other co-owners as co-plaintiffs because the suit is
presumed to have been filed to benefit his co-owners. It should be
stressed, however, that where the suit is for the benefit of the
plaintiff alone who claims to be the sole owner and entitled to the
possession of the litigated property, the action should be
dismissed. The renowned civilist, Professor Arturo M. Tolentino,
explained . . . A co-owner may bring such an action, without
the necessity of joining all the other co-owners as co-plaintiffs,
because the suit is deemed to be instituted for the benefit of all. If
the action is for the benefit of the plaintiff alone, such that he
claims possession for himself and not for the co-ownership, the
action will not prosper. In the instant case, it is not disputed that
petitioner brought the suit for unlawful detainer in his name alone
and for his own benefit to the exclusion of the heirs of Graciana
as he even executed an affidavit of self-adjudication over the
disputed property. It is clear therefore that petitioner cannot
validly maintain the instant action considering that he does not
recognize the co-ownership that necessarily flows from his theory
of succession to the property of his father, Dominador. In the
same vein, there is no merit in petitioner's claim that he has the
legal personality to file the present unlawful detainer suit because
the ejectment of respondents would benefit not only him but also
his alleged co-owners. However, petitioner forgets that he filed
the instant case to acquire possession of the property and to
recover damages. If granted, he alone will gain possession of the
lot and benefit from the proceeds of the award of damages to the
exclusion of the heirs of Graciana. Hence, petitioner cannot
successfully capitalize on the alleged benefit to his co-owners.
Incidentally, it should be pointed out that in default of the said
heirs of Graciana, whom petitioner labeled as "fictitious heirs,"
the State will inherit her share and will thus be petitioner's co-
owner entitled to possession and enjoyment of the property.
D E C I S I O N
YNARES-SANTIAGO, J p:
Assailed in this petition for review is the September 23, 2003
Decision 1 of the Court of Appeals in CA-G.R. SP No. 74921
which set aside the September 13, 2002 Decision 2 of the
Regional Trial Court (RTC) of Cebu City, Branch 7, in Civil Case
No. CEB-27806, and reinstated the February 12, 2002
Judgment 3 of the Municipal Trial Court (MTC) of Minglanilla,
Metro Cebu, in Civil Case No. 392, dismissing petitioner Arnelito
Adlawan's unlawful detainer suit against respondents Emeterio
and Narcisa Adlawan. Likewise questioned is the January 8, 2004
Resolution 4 of the Court of Appeals which denied petitioner' s
motion for reconsideration.
The instant ejectment suit stemmed from the parties' dispute over
Lot 7226 and the house built thereon, covered by Transfer
Certificate of Title No. 8842, 5 registered in the name of the late
Dominador Adlawan and located at Barrio Lipata, Municipality
of Minglanilla, Cebu. In his complaint, petitioner claimed that he
is an acknowledged illegitimate child 6 of Dominador who died
on May 28, 1987 without any other issue. Claiming to be the sole
heir of Dominador, he executed an affidavit adjudicating to
himself Lot 7226 and the house built thereon. 7 Out of respect
and generosity to respondents who are the siblings of his father,
he granted their plea to occupy the subject property provided they
would vacate the same should his need for the property arise.
Sometime in January 1999, he verbally requested respondents to
vacate the house and lot, but they refused and filed instead an
action for quieting of title 8 with the RTC. Finally, upon
respondents' refusal to heed the last demand letter to vacate dated
August 2, 2000, petitioner filed the instant case on August 9,
2000. 9
On the other hand, respondents Narcisa and Emeterio, 70 and 59
years of age, respectively, 10 denied that they begged petitioner
to allow them to stay on the questioned property and stressed that
they have been occupying Lot 7226 and the house standing
thereon since birth. They alleged that Lot 7226 was originally
registered in the name of their deceased father, Ramon
Adlawan 11 and the ancestral house standing thereon was owned
by Ramon and their mother, Oligia Maacap Adlawan. The
spouses had nine 12children including the late Dominador and
herein surviving respondents Emeterio and Narcisa. During the
lifetime of their parents and deceased siblings, all of them lived
on the said property. Dominador and his wife, Graciana Ramas
Adlawan, who died without issue, also occupied the
same. 13 Petitioner, on the other hand, is a stranger who never
had possession of Lot 7226.
Sometime in 1961, spouses Ramon and Oligia needed money to
finance the renovation of their house. Since they were not
qualified to obtain a loan, they transferred ownership of Lot 7226
in the name of their son Dominador who was the only one in the
family who had a college education. By virtue of a January 31,
1962 simulated deed of sale, 14 a title was issued to Dominador
which enabled him to secure a loan with Lot 7226 as collateral.
Notwithstanding the execution of the simulated deed, Dominador,
then single, never disputed his parents' ownership of the lot. He
and his wife, Graciana, did not disturb respondents' possession of
the property until they died on May 28, 1987 and May 6, 1997,
respectively. ScCIaA
Respondents also contended that Dominador's signature at the
back of petitioner's birth certificate was forged, hence, the latter is
not an heir of Dominador and has no right to claim ownership of
Lot 7226. 15 They argued that even if petitioner is indeed
Dominador's acknowledged illegitimate son, his right to succeed
is doubtful because Dominador was survived by his wife,
Graciana. 16
On February 12, 2002, the MTC dismissed the complaint holding
that the establishment of petitioner's filiation and the settlement of
the estate of Dominador are conditions precedent to the accrual of
petitioner's action for ejectment. It added that since Dominador
was survived by his wife, Graciana, who died 10 years thereafter,
her legal heirs are also entitled to their share in Lot 7226. The
dispositive portion thereof, reads:
In View of the foregoing, for failure to
prove by preponderance of evidence, the
plaintiff's cause of action, the above-entitled
case is hereby Ordered DISMISSED.
SO ORDERED. 17
On appeal by petitioner, the RTC reversed the decision of the
MTC holding that the title of Dominador over Lot 7226 cannot be
collaterally attacked. It thus ordered respondents to turn over
possession of the controverted lot to petitioner and to pay
compensation for the use and occupation of the premises. The
decretal portion thereof, provides:
Wherefore, the Judgment, dated February
12, 2002, of the Municipal Trial Court of
Minglanilla, Cebu, in Civil Case No. 392, is
reversed. Defendants-appellees are directed
to restore to plaintiff-appellant possession of
Lot 7226 and the house thereon, and to pay
plaintiff-appellant, beginning in August
2000, compensation for their use and
occupation of the property in the amount of
P500.00 a month.
So ordered. 18
Meanwhile, the RTC granted petitioner's motion for execution
pending appeal 19 which was opposed by the alleged nephew and
nieces of Graciana in their motion for leave to intervene and to
file an answer in intervention. 20 They contended that as heirs of
Graciana, they have a share in Lot 7226 and that intervention is
necessary to protect their right over the property. In addition, they
declared that as co-owners of the property, they are allowing
respondents to stay in Lot 7226 until a formal partition of the
property is made.
The RTC denied the motion for leave to intervene. 21 It,
however, recalled the order granting the execution pending appeal
having lost jurisdiction over the case in view of the petition filed
by respondents with the Court of Appeals. 22
On September 23, 2003, the Court of Appeals set aside the
decision of the RTC and reinstated the judgment of the MTC. It
ratiocinated that petitioner and the heirs of Graciana are co-
owners of Lot 7226. As such, petitioner cannot eject respondents
from the property via an unlawful detainer suit filed in his own
name and as the sole owner of the property. Thus
WHEEFORE, premises considered, the
appealed Decision dated September 13,
2002 of the Regional Trial Court of Cebu
City, Branch 7, in Civil Case No. CEB-
27806 is REVERSED and SET ASIDE, and
the Judgment dated February 12, 2002 of the
Municipal Trial Court of Minglanilla, Metro
Cebu, in Civil Case No. 392 is
REINSTATED. Costs against the
respondent.
SO ORDERED. 23
Petitioner's motion for reconsideration was denied. Hence, the
instant petition.
The decisive issue to be resolved is whether or not petitioner can
validly maintain the instant case for ejectment.
Petitioner averred that he is an acknowledged illegitimate son and
the sole heir of Dominador. He in fact executed an affidavit
adjudicating to himself the controverted property. In ruling for the
petitioner, the RTC held that the questioned January 31, 1962
deed of sale validly transferred title to Dominador and that
petitioner is his acknowledged illegitimate son who inherited
ownership of the questioned lot. The Court notes, however, that
the RTC lost sight of the fact that the theory of succession
invoked by petitioner would end up proving that he is not the sole
owner of Lot 7226. This is so because Dominador was survived
not only by petitioner but also by his legal wife, Graciana, who
died 10 years after the demise of Dominador on May 28,
1987. 24 By intestate succession, Graciana and petitioner became
co-owners of Lot 7226. 25 The death of Graciana on May 6,
1997, did not make petitioner the absolute owner of Lot 7226
because the share of Graciana passed to her relatives by
consanguinity and not to petitioner with whom she had no blood
relations. The Court of Appeals thus correctly held that petitioner
has no authority to institute the instant action as the sole owner of
Lot 7226. HaIATC
Petitioner contends that even granting that he has co-owners over
Lot 7226, he can on his own file the instant case pursuant to
Article 487 of the Civil Code which provides:
ART. 487.Any one of the co-owners may
bring an action in ejectment.
This article covers all kinds of actions for the recovery of
possession. Article 487 includes forcible entry and unlawful
detainer (accion interdictal), recovery of possession (accion
publiciana), and recovery of ownership (accion de
reivindicacion). 26 A co-owner may bring such an action without
the necessity of joining all the other co-owners as co-plaintiffs
because the suit is presumed to have been filed to benefit his co-
owners. It should be stressed, however, that where the suit is for
the benefit of the plaintiff alone who claims to be the sole owner
and entitled to the possession of the litigated property, the action
should be dismissed. 27
The renowned civilist, Professor Arturo M. Tolentino, explained

. . . A co-owner may bring such an action,
without the necessity of joining all the other
co-owners as co-plaintiffs, because the suit
is deemed to be instituted for the benefit of
all. If the action is for the benefit of the
plaintiff alone, such that he claims
possession for himself and not for the co-
ownership, the action will not prosper.
(Emphasis added) 28
In Baloloy v. Hular, 29 respondent filed a complaint for quieting
of title claiming exclusive ownership of the property, but the
evidence showed that respondent has co-owners over the
property. In dismissing the complaint for want of respondent's
authority to file the case, the Court held that

Under Article 487 of the New Civil Code,
any of the co-owners may bring an action in
ejectment. This article covers all kinds of
actions for the recovery of possession,
including an accion publiciana and a
reinvidicatory action. A co-owner may bring
such an action without the necessity of
joining all the other co-owners as co-
plaintiffs because the suit is deemed to be
instituted for the benefit of all. Any
judgment of the court in favor of the co-
owner will benefit the others but if such
judgment is adverse, the same cannot
prejudice the rights of the unimpleaded co-
owners. If the action is for the benefit of the
plaintiff alone who claims to be the sole
owner and entitled to the possession thereof,
the action will not prosper unless he
impleads the other co-owners who are
indispensable parties.
In this case, the respondent alone filed the
complaint, claiming sole ownership over the
subject property and praying that he be
declared the sole owner thereof. There is no
proof that the other co-owners had waived
their rights over the subject property or
conveyed the same to the respondent or such
co-owners were aware of the case in the trial
court. The trial court rendered judgment
declaring the respondent as the sole owner
of the property and entitled to its possession,
to the prejudice of the latter's siblings.
Patently then, the decision of the trial court
is erroneous.
Under Section 7, Rule 3 of the Rules of
Court, the respondent was mandated to
implead his siblings, being co-owners of the
property, as parties. The respondent failed to
comply with the rule. It must, likewise, be
stressed that the Republic of the Philippines
is also an indispensable party as defendant
because the respondent sought the
nullification of OCT No. P-16540 which
was issued based on Free Patent No.
384019. Unless the State is impleaded as
party-defendant, any decision of the Court
would not be binding on it. It has been held
that the absence of an indispensable party in
a case renders ineffective all the proceedings
subsequent to the filing of the complaint
including the judgment. The absence of the
respondent's siblings, as parties, rendered all
proceedings subsequent to the filing thereof,
including the judgment of the court,
ineffective for want of authority to act, not
only as to the absent parties but even as to
those present. 30
In the instant case, it is not disputed that petitioner brought the
suit for unlawful detainer in his name alone and for his own
benefit to the exclusion of the heirs of Graciana as he even
executed an affidavit of self-adjudication over the disputed
property. It is clear therefore that petitioner cannot validly
maintain the instant action considering that he does not recognize
the co-ownership that necessarily flows from his theory of
succession to the property of his father, Dominador.
In the same vein, there is no merit in petitioner's claim that he has
the legal personality to file the present unlawful detainer suit
because the ejectment of respondents would benefit not only him
but also his alleged co-owners. However, petitioner forgets that
he filed the instant case to acquire possession of the property and
to recover damages. If granted, he alone will gain possession of
the lot and benefit from the proceeds of the award of damages to
the exclusion of the heirs of Graciana. Hence, petitioner cannot
successfully capitalize on the alleged benefit to his co-owners.
Incidentally, it should be pointed out that in default of the said
heirs of Graciana, whom petitioner labeled as "fictitious heirs,"
the State will inherit her share 31 and will thus be petitioner's co-
owner entitled to possession and enjoyment of the
property. SaAcHE
The present controversy should be differentiated from the cases
where the Court upheld the right of a co-owner to file a suit
pursuant to Article 487 of the Civil Code. InResuena v. Court of
Appeals, 32 and Sering v. Plazo, 33 the co-owners who filed the
ejectment case did not represent themselves as the exclusive
owner of the property. InCelino v. Heirs of Alejo and Teresa
Santiago, 34 the complaint for quieting of title was brought in
behalf of the co-owners precisely to recover lots owned in
common. 35 Similarly in Vencilao v. Camarenta, et al., 36 the
amended complaint specified that the plaintiff is one of the heirs
who co-owns the controverted properties.
In the foregoing cases, the plaintiff never disputed the existence
of a co-ownership nor claimed to be the sole or exclusive owner
of the litigated lot. A favorable decision therein would of course
inure to the benefit not only of the plaintiff but to his co-owners
as well. The instant case, however, presents an entirely different
backdrop as petitioner vigorously asserted absolute and sole
ownership of the questioned lot. In his complaint, petitioner made
the following allegations, to wit:
3.The plaintiff was the only son
(illegitimate) and sole heir of the late
DOMINADOR ADLAWAN who died
intestate on 28 May 1987 without any other
descendant nor ascendant . . . .
xxx xxx xxx
5.Being the only child/descendant and,
therefore, sole heir of the deceased
Dominador Adlawan, the plaintiff became
the absolute owner, and automatically took
POSSESSION, of the aforementioned house
and lot. . . (Emphasis added) 37
Clearly, the said cases find no application here because
petitioner's action operates as a complete repudiation of the
existence of co-ownership and not in representation or
recognition thereof. Dismissal of the complaint is therefore
proper. As noted by Former Supreme Court Associate Justice
Edgrado L. Paras "[i]t is understood, of course, that the action
[under Article 487 of the Civil Code] is being instituted for all.
Hence, if the co-owner expressly states that he is bringing the
case only for himself, the action should not be allowed to
prosper." 38
Indeed, respondents' not less than four decade actual physical
possession of the questioned ancestral house and lot deserves to
be respected especially so that petitioner failed to show that he
has the requisite personality and authority as co-owner to file the
instant case. Justice dictates that respondents who are now in the
twilight years of their life be granted possession of their ancestral
property where their parents and siblings lived during their
lifetime, and where they, will probably spend the remaining days
of their life.
WHEREFORE, the petition is DENIED. The September 23, 2003
Decision of the Court of Appeals in CA-G.R. SP No. 74921
which reinstated the February 12, 2002 Judgment of the
Municipal Trial Court of Minglanilla, Metro Cebu, dismissing
petitioner's complaint in Civil Case No. 392, and its January 8,
2004 Resolution, are AFFIRMED.
SO ORDERED.

[G.R. No. 18009. January 10, 1923.]
EMILIO PUNSALAN ET AL., plaintiffs-
appellants, vs. C. BOON LIAT ET
AL., defendants-appellants.
Yeager & Armstrong, C. A. Sobral and Lorenzo &
Manalac for plaintiffs and appellants.
Kincaid, Perkins & Kincaid and P. J. Moore for
defendants and appellants.
SYLLABUS
1. AMBERGRIS; OCCUPANCY; PROPERTY IN
COMMON; SALE BY SOME COOWNERS. The
ambergris which is the subject-matter of this litigation was
the undivided common property of the plaintiffs and one of
the defendants. This common ownership was acquired by
occupancy. None of them had any right to sell said amber,
there being an express agreement between the coowners not
to sell it without the consent of all. Held: That the two sales
mentioned in the opinion having been made without the
consent of all the coowners, the same have no effect, except
as to the portion belonging to those who made them.
2. ID.; ID.; ID.; ACTION FOR RECOVERY.
The right of action for recovery pertaining to each coowner,
derived from the right of ownership inherent in the
coownership, can be exercised not only against strangers, but
against the coowners themselves when the latter perform
with respect to the thing held in common acts for their
exclusive benefit, or of exclusive ownership, or which are
prejudicial to, and in violation of, the right of the
community.
D E C I S I O N
AVANCEA, J p:
On or about the 13th of July, 1920, a Moro by the
name of Tamsi saw from the Cawit-Cawit shores in the
Province of Zamboanga, a big bulky object in the distance
which attracted his attention. Thereupon, together with on
another Moro named Bayrula, he went in a small boat to
investigate and found it to be a large fish. They then returned
to shore, where they met other Moros and requested their
help to catch the fish. They went in three small boats, there
being ten in one, seven in the other, and five in the third,
twenty-two men in all, twenty-one of whom are plaintiffs
herein, and the remaining one named Ahamad is defendant.
After having arrived at the place where the fish was, which
was found to be a whale, they proceeded to pull it toward the
shore up to the mouth of the river, where they quartered it,
having found in its abdomen a great quantity of ambergris,
which was placed in three sacks, two of which were full and
the other half full, and taken to the house of Maharaja Butu,
where they left it to the care of Ahamad. Then the contents of
the two full sacks were placed in three trunks. All of these
twenty-two persons made an agreement that they were to be
the sole owners of this ambergris and that none of them
could sell it without the consent of the rest. As to the half of
amber they agreed that some of them should take it to
Zamboanga to sell for the purpose of ascertaining the market
price of the ambergris, in order that they might dispose of the
rest accordingly. Some of them, with Tamsi in charge, went
to Zamboanga to sell the half sack of amber where they did
dispose of it to a Chinaman, Cheong Tong, for the sum of
P2,700, which amount was distributed among all the parties
in interest. Then they offered to sell for the sum of P12,000
to the Chinamen, Cheong Tong and Lim Chiat, the rest of the
amber contained in the two sacks which had been left in the
house of Maharaja Butu, for safekeeping, and a document
(Exhibit A) to this effect was executed by Lim Chiat and
Cheong Tong, on the one hand, and Tamsi, Imam Lumuyod,
and Imam Asakil, on the other. Thereupon they went to
Cawit-Cawit on board the launch Ching-kang to get the
amber so sold.
It appears that there were other people in
Zamboanga who knew of the existence of this ambergris in
the house of maharaha Butu. While the above related events
were taking place, Mr. Henry E. Teck, who was one of those
having knowledge of the existence of this amber in Cawit-
Cawit and of the fact that the launch Ching-kang had left for
Cawit-Cawit, proposed to the master of the revenue
cutter Mindoro to go to Cawit-Cawit to seize some
supposedly contraband opium. After transmitting this
information to the Collector of Customs, he, the master of
the Mindoro, immediately proceeded to Cawit-Cawit. There
were on board the vessel Mr. Teck, some Chinamen, among
whom were C. Boon Liat, Ong Chua, and Go Tong, and
some Moros who, according to Mr. Teck, were to assist in
the arrest of the smugglers. Upon the arrival of
theMindoro at Cawit-Cawit, the master, accompanied by Mr.
Teck and some Moros, went to the house of Maharaja Butu.
As is to be presumed, this information about the supposed
contraband opium was but a trick to have the Mindoro at
their disposal. The master proceeded to search the house,
stating that he had information to the effect that there was
contraband opium and as a result of the search, he found
three large trunks containing a black substance which had a
bad odor. He then asked the owner of the house to whom
those three trunks belonged, and the latter pointed to
Ahamad who was present and who stated that the contents
came from the abdomen of a large fish. The master, however,
said that it was opium and told Ahamad that he would take
the three trunks on board the ship. Then Ahamad and other
Moros asked permission of the master accompany him on the
voyage to Zamboanga, to which the master consented. When
already on board and during the voyage the master
consented. When already on board and during the voyage the
master became convinced that the contents of the three
trunks were not opium.
During the voyage, Mr. Teck offered to purchase
the amber contained in the three trunks, but Ahamad refused
to sell it for the reason that he was not the sole owner
thereof, but owned it in common with other persons who
were in Zamboanga. However Mr. Teck, aided by his
companions who wielded some influence in Zamboanga,
insisted that Ahamd should sell them the amber, telling him
not to be afraid of his companions, as he would answer for
whatever might happen. With this promise of protection,
Ahamad decided to sell the amber for P7,500 and received
P2,500 as part payment on account of this price, a bill of sale
having been signed by Ahamadm, Maharaja Butu and three
Moros more. The balance of this price was paid later.
When Cheong Tong, Lim Chiat, and the Moros
who had gone to Cawit-Cawit on board the launch Ching-
kang arrived at the house of Maharaja Butu, they found that
the amber they had purchased from Tamsi and his
companions was no longer there.
The plaintiffs are twenty-one of the twenty-two
Moros who had caught the whale, and Lim Chiat and
Cheong Tong, who had purchased from Tamsi and his
companions the amber contained in the three trunks
deposited in the house of Maharaja Butu for safekeeping.
They claim the 80 1/2 kilos of ambergris contained in the
three trunks, or its value in the amount of P60,000, and
damages in the sum of P20,000. This action is brought
against C. Boon Liat, Ong Chua, Go Tong, Henry E. Teck,
and the Moro, Ahamad, the first four being the persons who
purchased this same amber from the one last named while on
board the revenue cutter Mindoro.
It appears from the foregoing that the amber in
question was the undivided common property of the
plaintiffs (with the exception of Lim Chiat and Cheong
Tong) and the defendant Ahamad. This common ownership
was acquired by occupancy (arts. 609 and 610 of the Civil
Code), so that neither Tamsim Imam Lumuyod, or Imam
Asakil had any right to sell it, as they did, to Lim Chiat and
Cheong Tong, nor had the Moro Ahamad any right to sell
this same amber, as he did, to C. Boon Liat, Ong Chua, Go
Tong, and Henry E. Teck. There was an agreement between
the coowners not to sell this amber without the consent of all.
Both sales having been made without the consent of all the
owners, the same have no effect, except as to the portion
pertaining to those who made them (art 399, Civil Code).
Although the original complaint filed in this case
was entitled as one for replevin, in reality, from its
allegations, the action herein brought is the ordinary one for
the recovery of the title to, and possession of, this amber. It
is no bar to the bringing of this action that the defendant
Ahamad is one of the coowners. The action for recovery
which each coowner has, derived from the right of ownership
inherent in the coownership, may be exercised not only
against strangers but against the coowners themselves, when
the latter perform, with respect to the thing held in common,
acts for their exclusive benefit, or of exclusive ownership, or
which are prejudicial to, and in violation of, the right of the
community. (Decision of the supreme court of Spain of June
22, 1892.) In this case the selling of the amber by the
defendant Ahamad as his exclusive property and his attitude
in representing himself to be the sole owner thereof place
him in the same position as the stranger who violates any
right of the community. He is not sued in this case as
coowner, for the cause of action is predicated upon the fact
that he has acted not as coowner, but as an exclusive owner
of the amber sold by him.
As to the sale made by Ahamad, it is urged that the
purchasers acted in good faith. It is contended that the latter
did not know that the amber belonged to some others besides
Ahamad. but the evidence shows other wise. Henry E. Teck
himself admitted that on the occasion of the sale of the amber
he really had promised Ahamad to protect him, and although
he said that the promise made by him had reference to the
contingency of the amber proving to be opium, as the master
of the revenue cutter Mindoro believed, this is incredible,
because he could not make Ahamad a promise, nor could
such a promise, if made, have any influence on the mind of
Ahamad, inasmuch as the latter knew that the amber was not
opium. If, as Henry E. Teck admits, he made Ahamad this
promise of protection, it should have been only on account of
Ahamad's refusal to sell the amber due to the fact that he was
not the sole owner thereof.

With regard to the action of the trial court in not
admitting Exhibits 1 and 2 offered by the defendants, we
believe that it was no error. These documents are affidavits
signed by Paslangan, and the best evidence of their contents
was the testimony of Paslangan himself whom the plaintiffs
had the right to cross-examine. Moreover, they are
substantially the same as the statements made by Paslangan
at the trial when testifying as witness for the defendants, and
for this reason the ruling of the trial court excluding these
documents would not, at all events, affect the merits of the
case.
In the complaint it is alleged that the value of the
amber is P60,000. Upon the evidence adduced on this point,
and taking into account that the defendant, Henry E. Teck,
himself, testifying as witness, has stated that this amber was
worth P1,200 per kilo, we accept this estimated value set
forth in the complaint.
The decision of the court below contains the
following order for judgment:
"Wherefore, it is the judgment and
order of the court that the defendants C.
boon Liat, Henry E. Teck, Ahamad Ong
Chua, and Go Tong deliver to the plaintiffs,
Emilio Punsalan, Bayrula, Daring
Gumumtol, Mohamad, Insael, Dunkalan,
Tahil, Dambul, Dagan, Sabay, Sahibul,
Pingay, Mujahad, Amilol, Baraula, Saraban,
Lim Chiat, and Cheong Tong twenty-
twenty-firsts (20/21) of the amber in
question, or, in default thereof, to pay them
its value of twelve thousand pesos
(P12,000), less one-twenty-first of said
amount."
Therefore, the judgment appealed from is affirmed,
with the only modification that the value of the amber which
is the subject-matter of this action shall be P60,000, without
special finding as to the costs of this instance. So ordered.
||| (Punsalan v. Liat, G.R. No. 18009, January 10, 1923)


[G.R. No. 123552. February 27, 2003.]
TWIN TOWERS CONDOMINIUM
CORPORATION, petitioner, vs. THE COURT OF
APPEALS, ALS MANAGEMENT &
DEVELOPMENT CORPORATION, ANTONIO
LITONJUA and SECURITIES AND EXCHANGE
COMMISSION, respondents.
SYNOPSIS
Petitioner sought to nullify the decision of the
Court of Appeals dismissing its appeal from the Decision en
banc of the Securities and Exchange Commission which
reversed the order of the SEC Hearing Officer. The Court of
Appeals dismissed the appeal for lack of merit and for non-
compliance with the requirement on certification of non-
forum shopping. In its Decision, the Court of Appeals,
among others, sustained the claim of petitioner against
respondent ALS for unpaid assessments and dues, but ruled
that there is a need to remand the case for further reception
of evidence and for determination of the exact amount of
respondent ALS's liability to petitioner. It, however, directed
the SEC Hearing Officer to deduct from respondent ALS's
unpaid assessments and dues, the value of the services
denied to respondent ALS because of the latter's non-use of
the Condominium facilities.
On its part, respondent ALS maintained that the
denial by petitioner of the use of condominium facilities
deprived petitioner of any right to demand payment of
assessments and dues.
The Supreme Court found the petition partly
meritorious. It held that the Court of Appeals did not err in
dismissing the petition for the procedural lapse. However, in
the interest of justice, it reinstated the petition.
The Court held that petitioner's denial to respondent
ALS of the Condominium facilities, after respondent ALS
had defaulted, does not constitute a valid ground to refuse
paying its assessments and dues. Records clearly showed that
before respondent ALS incurred its arrearages, petitioner
allowed it to use the facilities. However, respondent ALS
subsequently defaulted and thus incurred delay. It was only
then that petitioner disallowed respondents ALS and
Litonjua from using the facilities.. The denial of the use of
the facilities was the sanction for the prior default incurred
by respondent ALS. In reciprocal obligations, when one
party fulfills his obligation, and the other does not, delay by
the other begins. Moreover, when one party does not comply
with his obligation, the other party does not incur delay if he
does not perform his own reciprocal obligation because of
the first party's non-compliance. The Court, therefore, held
that respondent ALS has no right to a reduction of its
assessments and dues to the extent of its non-use of the
Condominium facilities. Respondent ALS also cannot offset
damages against its assessments and dues because it is not
entitled to damages for alleged injury arising from its own
violation of its contract. Such a breach of contract cannot be
the source of rights or the basis of a cause of action. To
recognize the validity of such claim would be to legalize
respondent ALS's breach of its contract.
The Court, however, held that the case could no
longer be remanded to the SEC hearing Officer. Republic
Act No. 8799 transferred SEC's jurisdiction over cases
involving intracorporate disputes to courts of general
jurisdiction or the appropriate Regional Trial Court.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; FORUM SHOPPING;
CERTIFICATION OF NON-FORUM SHOPPING; A
MANDATORY REQUIREMENT BUT MUST NOT BE
INTERPRETED TOO LITERALLY TO DEFEAT THE ENDS
OF JUSTICE; CASE AT BAR. Petitioner filed its petition for
review with the Court of Appeals on August 18, 1993 and its
amended petition on September 3, 1993. Both the original and
amended petitions were filed before the effectivity of Revised
Administrative Circular No. 1-95 on June 1, 1995. However,
contrary to petitioner's claim, before the issuance of Revised
Administrative Circular No. 1-95, there was already an existing
circular requiring a sworn certification of non-forum shopping
from a party filing a petition for review with the Court of
Appeals. Circular No. 28-91, which took effect on January 1,
1992, required a sworn certification of non-forum shopping in
cases filed with the Court of Appeals and the Supreme Court.
Circular No. 28-91 specifically provides for summary dismissal
of petitions which do not contain a sworn certification of non-
forum shopping. Clearly, petitioner cannot claim that at the time
of the filing of its petitions with the Court of Appeals, it was not
required under any existing Supreme Court Circular to include in
its petitions a sworn certification of non-forum shopping. Circular
No. 28-91 applies in the instant case, being the Circular in force
at the time. Petitioner cannot even feign ignorance of Circular No.
28-91 as its petitions were filed more than one year after the
Circular's effectivity. The rule against forum shopping has long
been established and Circular No. 28-91 merely formalized the
prohibition and provided the appropriate penalties against
violators. The Court of Appeals did not err in dismissing the
petition for this procedural lapse. However, special circumstances
or compelling reasons may justify relaxing the rule requiring
certification on non-forum shopping. Technical rules of procedure
should be used to promote, not frustrate justice. While the swift
unclogging of court dockets is a laudable objective, granting
substantial justice is an even more urgent ideal. The certificate of
non-forum shopping is a mandatory requirement. Nonetheless,
this requirement must not be interpreted too literally to defeat the
ends of justice. In the instant case, the merits of petitioner's case
should be considered special circumstances or compelling reasons
that justify tempering the hard consequence of the procedural
requirement on non-forum shopping. In the interest of justice, we
reinstate the petition. AIDcTE
2. ID.; APPEALS; AN ISSUE NOT RAISED DURING TRIAL
COULD NOT BE RAISED FOR THE FIRST TIME ON
APPEAL. The issue on the validity of House Rule 26.3 was
raised for the first time on appeal. It is settled that an issue not
raised during trial could not be raised for the first time on appeal
as to do so would be offensive to the basic rules of fair play,
justice, and due process. Nonetheless, the Court of Appeals opted
to address this issue.
3. ID.; ID.; PETITION FOR REVIEW ON CERTIORARI; RE-
EXAMINATION OF THE EVIDENCE SUBMITTED BY THE
PARTIES NOT THE FUNCTION OF THE SUPREME COURT;
FINDINGS OF FACT OF THE COURT OF APPEALS AND
OTHER COURTS OF ORIGIN ARE CONCLUSIVE. The
question of whether petitioner's claim of P994,529.75 for unpaid
assessments and dues against ALS is supported by sufficient
evidence is a purely factual issue and inevitably requires the
weighing of evidence. This Court is not a trier of facts, and it is
not the function of this Court to re-examine the evidence
submitted by the parties. In cases brought before this Court from
the Court of Appeals under Rule 45 of the Rules of Court, this
Court's jurisdiction is limited to reviewing errors of law which
must be distinctly set forth. In this mode of appeal, the findings of
fact of the Court of Appeals and other courts of origin are
conclusive.
4. ID.; ID.; ID.; LIMITED TO THE REVIEW AND REVISION
OF ERRORS OF LAW; FINDINGS OF FACT OF THE COURT
OF APPEALS ARE DEEMED CONCLUSIVE; EXCEPTIONS;
NOT PRESENT IN CASE AT BAR. Jurisprudence is settled
that: "(a)s a rule, the jurisdiction of this Court in cases brought to
it from the Court of Appeals . . . is limited to the review and
revision of errors of law allegedly committed by the appellate
court, as its findings of fact are deemed conclusive. As such this
Court is not duty-bound to analyze and weigh all over again the
evidence already considered in the proceedings below." This rule
admits of several exceptions. This Court may review the findings
of fact of the Court of Appeals: "(a) where there is grave abuse of
discretion; (b) when the finding is grounded entirely on
speculations, surmises or conjectures; (c) when the inference
made is manifestly mistaken, absurd or impossible; (d) when the
judgment of the Court of Appeals was based on a
misapprehension of facts; (e) when the factual findings are
conflicting; (f) when the Court of Appeals, in making its findings,
went beyond the issues of the case and the same are contrary to
the admissions of both appellant and appellee; (g) when the Court
of Appeals manifestly overlooked certain relevant facts not
disputed by the parties and which, if properly considered, would
justify a different conclusion; and, (h) where the findings of fact
of the Court of Appeals are contrary to those of the trial court, or
are mere conclusions without citation of specific evidence, or
where the facts set forth by the petitioner are not disputed by the
respondent, or where the findings of fact of the Court of Appeals
are premised on the absence of evidence and are contradicted by
the evidence on record." However, none of these exceptions
exists in the instant case.
5. ID.; ID.; ID.; ONLY ERRORS OF LAW MAY BE RAISED
THEREIN; CASE AT BAR. The SEC Hearing Officer found
that, while petitioner is entitled to collect the unpaid assessments
and dues from ALS, petitioner has failed to establish clearly the
basis for computing the correct amount of the unpaid assessments
and dues. Indeed, there is no evidence laying down the basis of
petitioner's claim other than allegations of previous demands and
statements of accounts. Whether petitioner has sufficiently
established its claim by preponderance of evidence requires an
examination of the probative weight of the evidence presented by
the parties. Evidently, this is a question of fact the resolution of
which is beyond the purview of the petition for review where only
errors of law may be raised. On the other hand, the decision of the
Court of Appeals, finding insufficient evidence on record, was
made under its power to review both questions of fact and law.

6. CIVIL LAW; OBLIGATIONS AND CONTRACTS;
OBLIGATIONS; RECIPROCAL OBLIGATIONS; WHEN ONE
PARTY DOES NOT COMPLY WITH HIS OBLIGATION, THE
OTHER PARTY DOES NOT INCUR DELAY IF HE DOES
NOT PERFORM HIS OWN RECIPROCAL OBLIGATION
BECAUSE OF THE FIRST PARTY'S NON-COMPLIANCE;
CASE AT BAR. ALS asserts that the denial by petitioner to
ALS and Litonjua of the use of the Condominium facilities
deprived petitioner of any right to demand from ALS payment of
any condominium assessments and dues. ALS contends that the
right to demand payment of assessments and dues carries with it
the correlative obligation to allow the use of the Condominium
facilities. ALS is correct if it had not defaulted on its assessment
and dues before the denial of the use of the facilities. However,
the records clearly show that petitioner denied ALS and Litonjua
the use of the facilities only after ALS had defaulted on its
obligation to pay the assessments and dues. The denial of the use
of the facilities was the sanction for the prior default incurred by
ALS. In essence, what ALS wants is to use its own prior non-
payment as a justification for its future non-payment of its
assessments and dues. Stated another way, ALS advances the
argument that a contracting party who is guilty of first breaching
his obligation is excused from such breach if the other party
retaliates by refusing to comply with his own obligation. This
obviously is not the law. In reciprocal obligations, when one party
fulfills his obligation, and the other does not, delay by the other
begins. Moreover, when one party does not comply with his
obligation, the other party does not incur delay if he does not
perform his own reciprocal obligation because of the first party's
non-compliance. This is embodied in Article 1169 of the Civil
Code, the relevant provision of which reads: "In reciprocal
obligations, neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfills
his obligation, delay by the other begins." Thus, before ALS
incurred its arrearages, petitioner allowed ALS to use the
facilities. However, ALS subsequently defaulted and thus
incurred delay. It was only then that petitioner disallowed ALS
and Litonjua from using the facilities. Clearly, petitioner's denial
to ALS of the Condominium facilities, after ALS had defaulted,
does not constitute a valid ground on the part of ALS to refuse
paying its assessments and dues.
7. ID.; ID.; CONTRACTS; BREACH OF CONTRACT;
CANNOT BE THE SOURCE OF RIGHTS OR THE BASIS OF
THE CAUSE OF ACTION. We rule that ALS has no right to
a reduction of its assessments and dues to the extent of its non-use
of the Condominium facilities. ALS also cannot offset damages
against its assessments and dues because ALS is not entitled to
damages for alleged injury arising from its own violation of its
contract. Such a breach of contract cannot be the source of rights
or the basis of a cause of action. To recognize the validity of such
claim would be to legalize ALS' breach of its contract.
8. ID.; ID.; ID.; HAVE THE FORCE OF LAW BETWEEN THE
PARTIES AND ARE TO BE COMPLIED WITH IN GOOD
FAITH. The Master Deed binds ALS since the Master Deed is
annotated on the condominium certificate of title of ALS' Unit.
The Master Deed is ALS' contract with all Condominium
members who are all co-owners of the common areas and
facilities of the Condominium. Contracts have the force of law
between the parties and are to be complied with in good faith.
From the moment the contract is perfected, the parties are bound
to comply with what is expressly stipulated as well as with what
is required by the nature of the obligation in keeping with good
faith, usage and the law. Thus, when ALS purchased its Unit from
petitioner, ALS was bound by the terms and conditions set forth
in the contract, including the stipulations in the House Rules of
petitioner, such as House Rule 26.2.
9. ID.; ID.; ESTOPPEL; RESPONDENT'S CLAIM FOR
UNRENDERED REPAIR SERVICES BARRED BY
ESTOPPEL; NO QUESTION WILL BE ENTERTAINED ON
APPEAL UNLESS IT HAS BEEN RAISED IN THE COURT
BELOW. Neither in the proceedings in the SEC nor in the
appellate court did ALS present evidence to substantiate its
allegation that petitioner failed to render the repair services. Also,
ALS failed to establish whether it claimed for the costs of the
repair because ALS advanced these expenses, or for the value of
damages caused to the Unit by the water leakage. ALS is
therefore barred at this late stage to interpose this claim. In Del
Rosario v. Bonga, the Court held: "As a rule, no question will be
entertained on appeal unless it has been raised in the court below.
Points of law, theories, issues and arguments not brought to the
attention of the lower court need not be, and ordinarily will not
be, considered by a reviewing court, as they cannot be raised for
the first time at that late stage. Basic considerations of due
process impel this rule." As this claim was a separate cause of
action which should have been raised in ALS' Answer with
Counterclaim, ALS' failure to raise this claim is deemed a waiver
of the claim. EcICDT
10. ID.; DAMAGES; INTEREST AND PENALTIES IMPOSED
UNDER HOUSE RULE 26.2 CONSIDERED REASONABLE
IN CASE AT BAR. ALS and Litonjua did not question before
either the SEC or the Court of Appeals the validity of the
penalties prescribed in the Condominium's House Rule 26.2.
Nevertheless, the Court of Appeals ruled that House Rule 26.2
prescribes grossly excessive penalties and interests. The
resolution of this issue is not necessary in arriving at a complete
and just resolution of this case. At any rate, we find the interest
and penalties prescribed under House Rule 26.2 reasonable
considering the premier location of the Condominium at the heart
of Makati City. It is inevitable that ALS' unpaid assessments and
dues would escalate because ALS' delinquency started since
1986. House Rule 26.2 clearly provides for a 24% interest and an
8% penalty, both running annually, on the total amount due in
case of failure to pay, to wit: . . . . To reiterate, the Condominium
Act expressly provides that the Master Deed may empower the
management body of the Condominium "to enforce the provisions
of the declaration of restrictions." The Master Deed authorizes
petitioner, as the management body, to enforce the provisions of
the Master Deed in accordance with petitioner's By-Laws. Thus,
petitioner's Board of Directors is authorized to determine the
reasonableness of the penalties and interests to be imposed
against those who violate the Master Deed. Petitioner has validly
done this by adopting the House Rules.
11. ID.; ID.; ATTORNEY'S FEES; MAY BE AWARDED
WHERE THE DEFENDANT ACTED IN GROSS AND
EVIDENT BAD FAITH. The award of attorney's fees as
damages is the exception rather than the rule. The general rule is
that attorney's fees cannot be recovered as part of damages
because of the policy that no premium should be placed on the
right to litigate. Counsel's fees are not awarded every time a party
prevails in a suit. An award of attorney's fees and expenses of
litigation is proper under the instances provided for in Article
2208 of the Civil Code, one of which is where the defendant acted
in gross and evident bad faith. In this case, however, we find no
cogent reason to award attorney's fees in the absence of showing
of gross and evident bad faith on the part of ALS in refusing to
satisfy petitioner's claim.
12. COMMERCIAL LAW; SECURITIES AND EXCHANGE
COMMISSION; JURISDICTION THEREOF OVER CASES
INVOLVING INTRA-CORPORATE DISPUTES
TRANSFERRED TO THE COURTS OF GENERAL
JURISDICTION OR THE APPROPRIATE REGIONAL TRIAL
COURTS. While we sustain the ruling of the Court of
Appeals, the case can no longer be remanded to the SEC Hearing
Officer. Republic Act No. 8799, which took effect on August 8,
2000, transferred SEC's jurisdiction over cases involving intra-
corporate disputes to courts of general jurisdiction or the
appropriate regional trial courts. Section 5.2 of R.A. No.
8799 reads: "5.2. The Commission's jurisdiction over all cases
enumerated under Section 5 of Presidential Decree No. 902-A is
hereby transferred to the Courts of general jurisdiction or the
appropriate Regional Trial Court; Provided, That the Supreme
Court in the exercise of its authority may designate the Regional
Trial Court branches that shall exercise jurisdiction over these
cases. The Commission shall retain jurisdiction over pending
cases involving intra-corporate disputes submitted for final
resolution which should be resolved within one (1) year from the
enactment of this Code. The Commission shall retain jurisdiction
over pending suspension of payments/rehabilitation cases filed as
of 30 June 2000 until finally disposed." Based on the Resolution
issued by this Court in AM No. 00-8-10-SC, the Court
Administrator and the Securities and Exchange Commission
should cause the transfer of the records of SEC-AC Nos. 377 and
378 to the proper regional trial court for further reception of
evidence and computation of the correct amount of assessments
and dues that ALS shall pay to petitioner.
13. ID.; CORPORATION CODE; CORPORATIONS; ULTRA
VIRES ACT, DEFINED. Section 45 of the Corporation Code
provides: "Sec. 45. Ultra vires acts of corporations. No
corporation under this code shall possess or exercise any
corporate powers except those conferred by this Code or by its
articles of incorporation and except such as are necessary or
incidental to the exercise of the powers so conferred." The
term ultra vires refers to an act outside or beyond corporate
powers, including those that may ostensibly be within such
powers but are, by general or special laws, prohibited or declared
illegal. The Corporation Code defines an ultra vires act as one
outside the powers conferred by the Code or by the Articles of
Incorporation, or beyond what is necessary or incidental to the
exercise of the powers so conferred. Moreover, special laws
governing certain classes of corporations, like the Condominium
Act, also grant specific corporate powers to corporations falling
under such special laws.

14. ID.; ID.; ID.; CONDOMINIUM ACT; HOUSE RULE 26.3
CONSIDERED VALID IN CASE AT BAR; PETITIONER
CORPORATION HAS EXPRESS POWER TO PROMULGATE
RULES AND REGULATIONS CONCERNING THE USE,
ENJOYMENT AND OCCUPANCY OF THE COMMON
AREAS. We rule that House Rule 26.3 is valid. The
Condominium Act, petitioner's By-Laws and the Master
Deed expressly empower petitioner to promulgate House Rule
26.3. Section 9 of the Condominium Act provides: . . . . The
Condominium Act clearly provides that the Master Deed may
expressly empower the management body, petitioner in the
instant case, to enforce all provisions in the Master Deed and
Declaration of Restrictions. Pursuant to Section 9 (a) (1) and (3)
of the Condominium Act, the Master Deed expressly authorizes
petitioner to exercise all the powers granted to the management
body by the Condominium Act, petitioner's Articles of
Incorporation and By-Laws, the Master Deed, and the
Corporation Code. Section 3, Part II of the Master Deed reads: . .
. . Thus, the Master Deed clearly empowers petitioner to enforce
the provisions of the Master Deed in accordance with petitioner's
By-Laws. Petitioner's By-Laws expressly authorize petitioner's
Board of Directors to promulgate rules and regulations on the use
and enjoyment of the common areas. Thus, paragraph 2, Section 2
of petitioner's By-Laws states: . . . . Evidently, the Condominium
Act, the Master Deed and petitioner's By-Laws grant petitioner
the express power to promulgate rules and regulations concerning
the use, enjoyment and occupancy of the common areas.
15. ID.; ID.; ID.; ID.; IMPOSITION OF TEMPORARY BAN
ON THE USE OF COMMON AREAS AND FACILITIES
UNTIL THE ASSESSMENTS AND DUES IN ARREARS ARE
PAID IS A REASONABLE MEASURE THAT PETITIONER
MAY UNDERTAKE TO COMPEL THE PROMPT PAYMENT
OF ASSESSMENTS AND DUES. Moreover, House Rule
26.3, which prohibits delinquent members from using the
common areas, is necessary to ensure maintenance of the
common areas. Petitioner's purpose in enacting House Rule 26.3
is to enforce effectively the provisions of the Master Deed. House
Rule 26.3 is well within the powers of petitioner to adopt as the
same is reasonably necessary to attain the purpose for which both
petitioner and the Condominium project were created. Thus,
Section 7 of the Master Deed declares: . . . . Petitioner would be
unable to carry out its main purpose of maintaining the
Condominium common areas and facilities if members refuse to
pay their dues and yet continue to use these areas and facilities.
To impose a temporary ban on the use of the common areas and
facilities until the assessments and dues in arrears are paid is a
reasonable measure that petitioner may undertake to compel the
prompt payment of assessments and dues. AacCHD
D E C I S I O N
CARPIO, J p:
The Case
Before us is a petition for review on certiorari 1 to nullify the
Decision 2 dated August 31, 1995 of the Court of Appeals and its
Resolution 3 dated January 16, 1996 denying petitioner's motion
for reconsideration. The Court of Appeals dismissed petitioner's
appeal from the Decision en banc 4 of the Securities and
Exchange Commission, which reversed the order of the SEC
Hearing Officer. 5 The Court of Appeals dismissed the appeal for
lack of merit and for non-compliance with the requirement on
certification of non-forum shopping. 6
The Antecedent Facts
On June 30, 1988, petitioner Twin Towers Condominium
Corporation ("petitioner" for brevity) filed a complaint 7 with the
Securities and Exchange Commission ("SEC" for brevity) against
respondents ALS Management & Development Corporation
("ALS" for brevity) and Antonio Litonjua ("Litonjua" for
brevity). The complaint prayed that ALS and Litonjua be ordered
to pay solidarily the unpaid condominium assessments and dues
with interests and penalties covering the four quarters of 1986 and
1987 and the first quarter of 1988. SaHIEA
The complaint alleged, among others, that petitioner, a non-stock
corporation, is organized for the sole purpose of holding title to
and managing the common areas of Twin Towers Condominium
("Condominium" for brevity). Membership in petitioner
corporation is compulsory and limited to all registered owners of
units in the Condominium. ALS, as registered owner of Unit A-4
("Unit" for brevity) of the Condominium, is a member of
petitioner. Litonjua, who is the corporate president of ALS,
occupies the Unit.
Petitioner collects from all its members quarterly assessments and
dues as authorized by its Master Deed and Declaration of
Restrictions ("Master Deed" for brevity) and its By-Laws. As of
the filing of the complaint with the SEC, petitioner's records of
account show that ALS failed to pay assessments and dues
starting 1986 up to the first quarter of 1988. Petitioner claimed
against both ALS and Litonjua P118,923.20 as unpaid
assessments and dues. This amount includes accrued interests of
P30,808.33 and penalty charges of P7,793.34, plus P1,500.00 as
unpaid contingency fund assessment for 1987. 8
In their joint Answer with Counterclaim, ALS and Litonjua
asserted that petitioner failed to state a cause of action against
Litonjua. ALS and Litonjua argued that petitioner's admission
that ALS and not Litonjua is the registered owner of the Unit and
member of petitioner exonerates Litonjua from any liability to
petitioner. While ALS is a juridical person that cannot by itself
physically occupy the Unit, the natural person who physically
occupies the Unit does not assume the liability of ALS to
petitioner. Neither does the agent who acts for the corporation
become personally liable for the corporation's obligation.
As counterclaim, ALS claimed damages against petitioner arising
from petitioner's act of repeatedly preventing ALS, its agents and
guests from using the parking space, swimming pool, gym, and
other facilities of the Condominium. In addition, Litonjua claimed
damages against petitioner for the latter's act of including
Litonjua's name in the list of delinquent unit owners which was
posted on petitioner's bulletin board. 9
On December 11, 1991, the SEC Hearing Officer ordered
petitioner to pay Litonjua moral and exemplary damages for
maliciously including Litonjua's name in the list of delinquent
unit owners and for impleading him as a respondent. On the other
hand, the SEC Hearing Officer ordered ALS to pay the
assessments and dues to petitioner. 10However, the Hearing
Officer did not determine the exact amount to be paid by ALS
because petitioner failed to lay down the basis for computing the
unpaid assessments and dues. 11 The dispositive portion of the
decision reads thus:
"WHEREFORE, premises considered, judgment is
hereby rendered as follows:
1. Ordering respondent ALS to pay the legal
assessments/dues due the complainant within thirty (30)
days from finality of this Decision; and
2. Ordering the complainant to pay respondent Antonio
Litonjua the sum of THREE HUNDRED THOUSAND
PESOS (P300,000.00) as moral damages, FIFTY
THOUSAND PESOS (P50,000.00) as exemplary
damages, and TWO HUNDRED THOUSAND PESOS
(P200,000.00) as and by way of attorney's fees.
SO ORDERED." 12
Not satisfied with the SEC Hearing Officer's decision, both
parties filed their respective appeals to the SEC en
banc. 13 Petitioner assailed the award of moral and exemplary
damages as well as attorney's fees in favor of Litonjua. On the
other hand, ALS appealed that portion of the decision ordering it
to pay to petitioner the assessments and dues.
In a decision dated July 30, 1993, the SEC en banc nullified the
award of damages and attorney's fees to Litonjua on the ground
that the SEC had no jurisdiction over Litonjua. The SEC en
banc held that there is no intra-corporate relationship between
petitioner and Litonjua who is not the registered owner of the
Unit and thus, not a member of petitioner. The SEC en
banc stated that petitioner could not invoke the doctrine of
piercing the veil of ALS' corporate fiction since disregarding the
corporate entity is a function of the regular courts.
Furthermore, the SEC en banc remanded the case to the Hearing
Officer to determine the value of the services petitioner failed to
render to ALS because of the latter's non-use of the
Condominium facilities. The SEC en banc ruled that the value of
these services could be deducted from the unpaid assessments and
dues that ALS owes petitioner.
Thus, the SEC en banc declared:
"WHEREFORE, in view of the foregoing, the order
appealed from is hereby reversed insofar as it awards
moral and exemplary damages and attorney's fees to
respondent Litonjua as the same is null and void for lack
of jurisdiction of this Commission over the said
party. 14
As regards that portion of the appealed Order directing
respondent ALS to pay the legal assessment/dues to the
complainant TTC within thirty (30) [days] from finality
of the said decision, the same is hereby modified by
remanding the case to the hearing officer
for determination of the value of the services
withheld by the complainant TTC from respondent ALS
in order that the same may be deducted from the amount
of legal assessments and dues which the respondent
corporation shall pay to the complainant.
SO ORDERED." 15 (Italics supplied)
Petitioner appealed the SEC en banc Decision to the Court of
Appeals contending grave error or grave abuse of discretion by
the SEC en banc.
The Ruling of the Court of Appeals
The Court of Appeals dismissed petitioner's appeal on both
procedural and substantive grounds. Procedurally, the Court of
Appeals found the petition defective for failure to contain a sworn
certification of non-forum shopping as required by Section 6 of
Administrative Circular No. 1-95 and Section 2 of Revised
Circular No. 28-91.
On the merits, the Court of Appeals substantially affirmed the
decision of the SEC en banc that there is no ground to pierce the
veil of ALS' corporate fiction. The Court of Appeals held that
there is nothing in the records to show that ALS is engaged in
unlawful business or that Litonjua is using ALS to defraud third
parties. The fact alone that ALS is in arrears in paying its
assessments and dues does not make ALS or Litonjua guilty of
fraud which would warrant piercing the corporate veil of ALS.
Thus, it was improper for petitioner to post Litonjua's name
instead of ALS' in the list of delinquent unit owners since
Litonjua is not a member of petitioner. aHSTID

The Court of Appeals also sustained the claim of petitioner
against ALS for unpaid assessments and dues but found that
petitioner failed to substantiate by preponderance of evidence the
basis for computing the unpaid assessments and dues. Thus, the
Court of Appeals remanded the case to the SEC Hearing Officer
for further reception of evidence and for determination of the
exact amount of ALS' liability to petitioner. The Court of
Appeals, however, directed the SEC Hearing Officer to deduct
from ALS' unpaid assessments and dues the value of the services
denied to ALS because of the latter's non-use of the
Condominium facilities. In allowing the deduction, the Court of
Appeals declared the Condominium's House Rule 26.3
as ultra vires. House Rule 26.3, which petitioner claims as its
basis for denying the use of the Condominium facilities to ALS,
authorizes withholding of the use of the Condominium facilities
from delinquent unit owners. The Court of Appeals, however,
ruled that petitioner is not expressly authorized by its Master
Deed and By-Laws to prohibit delinquent members from using
the facilities of the Condominium.
The Court of Appeals went further and declared the interest and
penalty charges prescribed by House Rule 26.5 16 on delinquent
accounts as exorbitant or grossly excessive, although this was not
raised as an issue. While in its complaint, petitioner sought to
recover P118,923.20 as unpaid assessments and dues, in its
amended petition for review, petitioner sought P994,529.75, more
than eight times the amount it originally claimed from ALS. 17
In the dispositive portion of its assailed decision, the Court of
Appeals declared:
"WHEREFORE, the instant petition is hereby DENIED
and is accordingly DISMISSED." 18
Hence, this petition. HTCDcS
The Issues
In its Memorandum, petitioner assigns the following errors in the
decision of the Court of Appeals:
1. "IN DISMISSING THE PETITION ALLEGEDLY
BECAUSE OF PETITIONER'S FAILURE TO
COMPLY WITH THE PERTINENT PROVISIONS OF
SUPREME COURT CIRCULAR NOS. 1-95 AND 28-
91 ON THE CERTIFICATION AGAINST FORUM
SHOPPING;"
2. "IN ORDERING A REMAND OF THE CASE
BACK TO THE HEARING OFFICER FOR THE
RECEPTION OF EVIDENCE FOR SERVICES
SUPPOSEDLY NOT RENDERED BY PETITIONER;"
3. "IN DECLARING HOUSE RULE NO. 26.3
AS ULTRA VIRES;"
4. "IN FINDING THE PENALTIES AND INTERESTS
PRESCRIBED IN HOUSE RULE 26.5 19 AS
EXORBITANT AND GROSSLY EXCESSIVE;"
5. "IN REFUSING TO RECOGNIZE THE FACT
THAT RESPONDENT LITONJUA AND NOT ALS IS
THE REAL OWNER OF APARTMENT UNIT 4-A;"
and
6. "IN FAILING TO FIND THAT THERE IS ON
RECORD OVERWHELMING EVIDENCE TO SHOW
THE BASIS OF THE DUES AND ASSESSMENTS
BEING COLLECTED FROM THE PRIVATE
RESPONDENTS." 20
The Ruling of the Court
The petition is partly meritorious.
A perusal of the foregoing issues readily reveals that petitioner
raises two aspects of the case for consideration the procedural
aspect and the substantive aspect.
We will discuss the procedural aspect first.
Non-compliance with Supreme Court Circular No. 1-95 and
Revised Circular No. 28-91.
Petitioner submits that the Court of Appeals erred in dismissing
its appeal for non-compliance with Supreme Court Circular No.
1-95 and Revised Circular No. 28-91. Petitioner asserts that when
it filed its petition, both circulars were not yet in full force.
Petitioner filed its petition for review with the Court of Appeals
on August 18, 1993 and its amended petition on September 3,
1993. Both the original and amended petitions were filed before
the effectivity of Revised Administrative Circular No. 1-95 on
June 1, 1995. However, contrary to petitioner's claim, before the
issuance of Revised Administrative Circular No. 1-95, there was
already an existing circular requiring a sworn certification of non-
forum shopping from a party filing a petition for review with the
Court of Appeals.
Circular No. 28-91, which took effect on January 1, 1992,
required a sworn certification of non-forum shopping in cases
filed with the Court of Appeals and the Supreme Court. Circular
No. 28-91 specifically provides for summary dismissal of
petitions which do not contain a sworn certification of non-forum
shopping. Sections 2 and 3 of Circular No. 28-91 state:
"2. Certification The party must certify under oath
that he has not commenced any other action or
proceeding involving the same issues in the Supreme
Court, the Court of Appeals, or different Divisions
thereof, or any other tribunal or agency, and that to the
best of his knowledge, no such action or proceeding is
pending in the Supreme Court, the Court of Appeals, or
different Divisions thereof, or any other tribunal or
agency. If there is any action pending, he must state the
status of the same. If he should learn that a similar
action or proceeding has been filed or is pending before
the Supreme Court, the Court of Appeals, or different
Divisions thereof, or any other tribunal or agency, he
should notify the court, tribunal or agency within five
(5) days from such notice.
3. Penalties
a. Any violation of this Circular shall be a cause for the
summary dismissal of the multiple petition or
complaint. HTCDcS
xxx xxx xxx."
Clearly, petitioner cannot claim that at the time of the filing of its
petitions with the Court of Appeals, it was not required under any
existing Supreme Court Circular to include in its petitions a
sworn certification of non-forum shopping. Circular No. 28-91
applies in the instant case, being the Circular in force at the time.
Petitioner cannot even feign ignorance of Circular No. 28-91 as
its petitions were filed more than one year after the Circular's
effectivity. The rule against forum shopping has long been
established and Circular No. 28-91 merely formalized the
prohibition and provided the appropriate penalties against
violators. 21
The Court of Appeals did not err in dismissing the petition for
this procedural lapse. However, special circumstances or
compelling reasons may justify relaxing the rule requiring
certification on non-forum shopping. 22 Technical rules of
procedure should be used to promote, not frustrate justice. While
the swift unclogging of court dockets is a laudable objective,
granting substantial justice is an even more urgent ideal. 23 The
certificate of non-forum shopping is a mandatory requirement.
Nonetheless, this requirement must not be interpreted too literally
to defeat the ends of justice. 24
In the instant case, the merits of petitioner's case should be
considered special circumstances or compelling reasons that
justify tempering the hard consequence of the procedural
requirement on non-forum shopping. In the interest of justice, we
reinstate the petition.
Essentially, the substantive issues for resolution in the instant
petition can be summarized into four, as follows:
1. Whether petitioner can collect assessments and dues
despite its denial to ALS of the use of the Condominium
facilities pursuant to House Rule 26.3;
2. Whether ALS can validly offset against its unpaid
assessments and dues the value of the services withheld
by petitioner; HTCDcS
3. Whether a remand of the case to the proper trial court
is necessary to determine the amounts involved; and
4. Whether the penalties prescribed in House Rule 26.2
are grossly excessive and exorbitant.
First Issue: Payment of assessments and dues.
Petitioner's authority to assess dues.
Petitioner was organized to hold title to the common areas of the
Condominium and to act as its management body. The
Condominium Act, the law governing condominiums, states that:
"Title to the common areas, including the land, or the
appurtenant interests in such areas, may be held by a
corporation specially formed for the purpose
(hereinafter known as the "condominium corporation")
in which the holders of separate interests shall
automatically be members or shareholders, to the
exclusion of others, in proportion to the appurtenant
interest of their respective units in the common areas. . .
." 25
The Condominium Act provides that the Master Deed may
authorize the condominium corporation to collect "reasonable
assessments to meet authorized expenditures." 26For this
purpose, each unit owner "may be assessed separately for its
share of such expenditures in proportion (unless otherwise
provided) to its owner's fractional interest in the common
areas." 27 Also, Section 20 of the Condominium Act declares:
"Section 20. An assessment upon any condominium
made in accordance with a duly registered declaration
of restrictions shall be an obligation of the ownerthereof
at the time the assessment is made. . . ." (Italics
supplied)
Petitioner is expressly authorized by its Master Deed to impose
reasonable assessments on its members to maintain the common
areas and facilities of the Condominium. Section 4, Part II of
petitioner's Master Deed provides:
"Section 4. ASSESSMENTS. From and after date
Ayala Investment & Development Corporation formally
conveys the condominium project to the Condominium
Corporation, the owner of each unit shall be
proportionately liable for the common expenses of the
condominium project, which shall be assessed against
each unit owner in the project and paid to the
Condominium Corporation as provided in Part I Section
8 (b) hereof at such times and in such manner as shall be
provided in the By-Laws of the Condominium
Corporation,
a.) Regular assessments for such amounts as shall be
necessary to meet the operating expenses of the
Condominium Corporation as well as such amounts,
determined in accordance with the provisions of the By-
Laws, to be made for the purpose of creating and
maintaining a special fund for capital expenditures on
the common areas of the project; including the cost of
extraordinary repairs, reconstruction or restoration
necessitated by damage, depreciation, obsolescence,
expropriation or condemnation of the common areas or
part thereof, as well as the cost of improvements or
additions thereto authorized in accordance with the
provisions of the By-Laws;
b.) . . .
c.) There may be assessed against the unit owners, in the
manner prescribed herein or in the By-Laws of the
Condominium Corporation, such other assessments as
are not specifically provided for herein;
d.) The amount of any such assessment, plus interest
penalties, attorney's fees and other charges incurred for
the collection of such assessment, shall constitute a lien
upon the unit and on the appurtenant interest of the unit
owner in the Condominium Corporation. Such lien shall
be constituted in the manner provided in the By-Laws of
the Condominium Corporation. The foreclosure, transfer
of conveyance, as well as redemption of the unit shall
include the unit owner's appurtenant interest in the
Condominium Corporation. The Condominium
Corporation shall have the power to bid at the
foreclosure sale." 28
Thus, petitioner's right to collect assessments and dues from
its members and the corollary obligation of its members to
pay are beyond dispute.
There is also no question that ALS is a member of petitioner
considering that ALS is the registered owner of the Unit. Under
the automatic exclusive membership clause in the Master
Deed, 29 ALS became a regular member of petitioner upon its
acquisition of a unit in the Condominium.
As a member of petitioner, ALS assumed the compulsory
obligation to share in the common expenses of the Condominium.
This compulsory obligation is further emphasized in Section 8,
paragraph c, Part I of the Master Deed, to wit:
"Each member of the Condominium Corporation shall
share in the common expenses of the condominium
project in the same sharing or percentage stated . .
." 30(Italics supplied)
Undoubtedly, as a member of petitioner, ALS is legally bound to
pay petitioner assessments and dues to maintain the common
areas and facilities of the Condominium. ALS' obligation arises
from both the law and its contract with the Condominium
developer and other unit owners.
Petitioner's Master Deed provides that a member of the
Condominium corporation shall share in the common expenses of
the condominium project. 31 This obligation does not depend on
the use or non-use by the member of the common areas and
facilities of the Condominium. Whether or not a member uses the
common areas or facilities, these areas and facilities will have to
be maintained. Expenditures must be made to maintain the
common areas and facilities whether a member uses them
frequently, infrequently or never at all.
ALS asserts that the denial by petitioner to ALS and Litonjua of
the use of the Condominium facilities deprived petitioner of any
right to demand from ALS payment of any condominium
assessments and dues. ALS contends that the right to demand
payment of assessments and dues carries with it the correlative
obligation to allow the use of the Condominium facilities. ALS is
correct if it had not defaulted on its assessment and dues before
the denial of the use of the facilities. However, the records clearly
show that petitioner denied ALS and Litonjua the use of the
facilities only after ALS had defaulted on its obligation to pay the
assessments and dues. The denial of the use of the facilities was
the sanction for the prior default incurred by ALS.
In essence, what ALS wants is to use its own prior non-payment
as a justification for its future non-payment of its assessments and
dues. Stated another way, ALS advances the argument that a
contracting party who is guilty of first breaching his obligation is
excused from such breach if the other party retaliates by refusing
to comply with his own obligation.
This obviously is not the law. In reciprocal obligations, when one
party fulfills his obligation, and the other does not, delay by the
other begins. Moreover, when one party does not comply with his
obligation, the other party does not incur delay if he does not
perform his own reciprocal obligation because of the first party's
non-compliance. This is embodied in Article 1169 of the Civil
Code, the relevant provision of which reads:
"In reciprocal obligations, neither party incurs in delay
if the other does not comply or is not ready to comply in
a proper manner with what is incumbent upon him.
From the moment one of the parties fulfills his
obligation, delay by the other begins."
Thus, before ALS incurred its arrearages, petitioner allowed ALS
to use the facilities. However, ALS subsequently defaulted and
thus incurred delay. It was only then that petitioner disallowed
ALS and Litonjua from using the facilities. Clearly, petitioner's
denial to ALS of the Condominium facilities, after ALS had
defaulted, does not constitute a valid ground on the part of ALS to
refuse paying its assessments and dues.
Validity of House Rule 26.3.
Petitioner's House Rules and Regulations ("House Rules" for
brevity) expressly authorize denial of the use of condominium
facilities to delinquent members. Specifically, House Rule 26.3
provides that:
"26. ASSESSMENTS:
xxx xxx xxx
26.3 Names of unit owners with delinquent accounts
who fail to pay two consecutive quarters shall be posted
in the bulletin board. Unit owners with delinquent
accounts, their tenants, guests/visitors and relatives
shall not be allowed the use of all facilities of the
condominium such as the swimming pool, gym, social
hall, etc." (Italics supplied)
The issue on the validity of House Rule 26.3 was raised for the
first time on appeal. It is settled that an issue not raised during
trial could not be raised for the first time on appeal as to do so
would be offensive to the basic rules of fair play, justice, and due
process. 32 Nonetheless, the Court of Appeals opted to address
this issue.
Petitioner justifies House Rule 26.3 by invoking Section 36,
paragraph 11 of the Corporation Code which grants every
corporation the power "to exercise such powers as may be
essential or necessary to carry out its purpose or purposes as
stated in its Articles of Incorporation." Petitioner was organized
for the main purpose of holding title to and managing the
common areas of the Condominium. Petitioner claims that there
is here implied the power to enact such measures as may be
necessary to carry out the provisions of the Articles of
Incorporation, By-Laws and Master Deed to deal with delinquent
members. This, asserts petitioner, includes the power to enact
House Rule 26.3 to protect and safeguard the interests not only of
petitioner but also of its members.
For their part, ALS and Litonjua assail the validity of House Rule
26.3 alleging that it is ultra vires. ALS and Litonjua maintain that
neither the Master Deed nor the By-Laws of petitioner expressly
authorizes petitioner to prohibit delinquent members from using
the Condominium facilities. Being ultra vires, House Rule 26.3
binds no one. Even assuming that House Rule 26.3 is intra vires,
the same is iniquitous, unconscionable, and contrary to morals,
good customs and public policy. Thus, ALS claims it can validly
deduct the value of the services withheld from the assessments
and dues since it was barred from using the Condominium
facilities for which the assessments and dues were being
collected. ScTCIE
The Court of Appeals sustained respondents' argument and
declared House Rule 26.3 ultra vires on the ground that petitioner
is not expressly authorized by its Master Deed or its By-Laws to
promulgate House Rule 26.3.
House Rule 26.3 clearly restricts delinquent members from the
use and enjoyment of the Condominium facilities. The question is
whether petitioner can validly adopt such a sanction to enforce
the collection of Condominium assessments and dues.
We rule that House Rule 26.3 is valid.
Section 45 of the Corporation Code provides:
"Sec. 45. Ultra vires acts of corporations. No
corporation under this code shall possess or exercise any
corporate powers except those conferred by this Code or
by its articles of incorporation and except such as are
necessary or incidental to the exercise of the powers so
conferred."
The term ultra viresrefers to an act outside or beyond corporate
powers, including those that may ostensibly be within such
powers but are, by general or special laws, prohibited or declared
illegal. 33 The Corporation Code defines an ultra vires act as one
outside the powers conferred by the Code or by the Articles of
Incorporation, or beyond what is necessary or incidental to the
exercise of the powers so conferred. Moreover, special laws
governing certain classes of corporations, like the Condominium
Act, also grant specific corporate powers to corporations falling
under such special laws.
The Condominium Act, petitioner's By-Laws and the Master
Deed expressly empower petitioner to promulgate House Rule
26.3. Section 9 of the Condominium Act provides:
"Section 9. The owner of a project shall, prior to the
conveyance of any condominium therein, register a
declaration of restrictions relating to such project, which
restrictions . . . shall inure to and bind all condominium
owners in the project. . . . The Register of Deeds shall
enter and annotate the declaration of restrictions upon
the certificate of title covering the land included within
the project, if the land is patented or registered under the
Land Registration or Cadastral acts.
xxx xxx xxx
Such declaration of restrictions, among other things,
may also provide:
(a) As to any management body
1. For the powers thereof, including power to enforce
the provisions of the declaration of restrictions;
xxx xxx xxx
3. Provisions for maintenance . . . and other services
benefiting the common areas, . . ." (Italics supplied)
The Condominium Act clearly provides that the Master Deed
may expressly empower the management body, petitioner in
the instant case, to enforce all provisions in the Master Deed
and Declaration of Restrictions.
Pursuant to Section 9 (a) (1) and (3) of the Condominium Act, the
Master Deed expressly authorizes petitioner to exercise all the
powers granted to the management body by the Condominium
Act, petitioner's Articles of Incorporation and By-Laws, the
Master Deed, and the Corporation Code. Section 3, Part II of the
Master Deed reads:

"Section 3. MANAGEMENT BODY. The
Condominium Corporation to be formed and organized
pursuant to Section 7 of Part I, above, shall constitute
the management body of the project. As such
management body, the powers of the Condominium
Corporation shall be such as are provided by the
Condominium Act, by the Articles of Incorporation and
the By-Laws of the Corporation, by this instrument and
by the applicable provisions of the Corporation Code as
are not inconsistent with the Condominium Act. Among
such powers but not by way of limitation, it shall have
the power to enforce the provisions thereof in
accordance with the By-Laws of the corporation."
(Italics supplied)
Thus, the Master Deed clearly empowers petitioner to
enforce the provisions of the Master Deed in accordance with
petitioner's By-Laws. HTCDcS
Petitioner's By-Laws expressly authorize
petitioner's Board of Directors to promulgate rules and
regulations on the use and enjoyment of the common areas.
Thus, paragraph 2, Section 2 of petitioner's By-Laws states:
"Without limiting the general nature of the foregoing
powers, the Board of Directors shall have the power to
enforce the limitations, restrictions, and conditions
contained in the Master Deed and Declaration of
Restrictions of the project; promulgate rules and
regulations concerning the use, enjoyment and
occupancy of the units, common areas and other
properties in the condominium project, to make and
collect assessments against members as unit owners to
defray the costs and expenses of the condominium
project and the corporation and to secure by legal means
the observance of the provisions of the Condominium
Act, the Master Deed, the Articles of Incorporation,
these By-Laws, and the rules and regulations
promulgated by it in accordance herewith. The members
of the corporation bind themselves to comply faithfully
with all these provisions." 34 (Italics supplied)
Evidently, the Condominium Act, the Master Deed and
petitioner's By-Laws grant petitioner the express power to
promulgate rules and regulations concerning the use,
enjoyment and occupancy of the common areas.
Moreover, House Rule 26.3, which prohibits delinquent members
from using the common areas, is necessary to ensure maintenance
of the common areas. Petitioner's purpose in enacting House Rule
26.3 is to enforce effectively the provisions of the Master Deed.
House Rule 26.3 is well within the powers of petitioner to adopt
as the same is reasonably necessary to attain the purpose for
which both petitioner and the Condominium project were created.
Thus, Section 7 of the Master Deed declares:
"Section 7. CONDOMINIUM
CORPORATION. A corporation to be
known as THE TWIN TOWERS
CONDOMINIUM (hereinafter referred to as
the "Condominium Corporation"), shall be
formed and organized pursuant to the
Condominium Act and the Corporation
Code to hold title to all the aforestated
common areas of the condominium project
including the land, to manage THE TWIN
TOWERS CONDOMINIUM and to do such
other things as may be necessary, incidental
and convenient to the accomplishment of
said purposes . . ." 35 (Italics supplied)
Petitioner would be unable to carry out its main purpose of
maintaining the Condominium common areas and facilities if
members refuse to pay their dues and yet continue to use these
areas and facilities. To impose a temporary ban on the use of the
common areas and facilities until the assessments and dues in
arrears are paid is a reasonable measure that petitioner may
undertake to compel the prompt payment of assessments and
dues.
Second Issue: Offsetting the value of services withheld
against ALS' unpaid assessments and dues.
ALS' claim for reduction of its assessments and dues
because of its non-use of the Condominium facilities.
We rule that ALS has no right to a reduction of its assessments
and dues to the extent of its non-use of the Condominium
facilities. ALS also cannot offset damages against its assessments
and dues because ALS is not entitled to damages for alleged
injury arising from its own violation of its contract. Such a breach
of contract cannot be the source of rights or the basis of a cause of
action. 36 To recognize the validity of such claim would be to
legalize ALS' breach of its contract.
ALS' claim for unrendered repair services barred by
estoppel.
ALS also justifies its non-payment of dues on the ground of the
alleged failure of petitioner to repair the defects in ALS' Unit.
However, this claim for unrendered repairs was never raised
before the SEC Hearing Officer or the SEC en banc. The issue on
these alleged unrendered repairs, which supposedly caused ALS'
Unit to deteriorate, was raised for the first time on appeal. The
Court of Appeals did not pass upon the same.
Neither in the proceedings in the SEC nor in the appellate court
did ALS present evidence to substantiate its allegation that
petitioner failed to render the repair services. Also, ALS failed to
establish whether it claimed for the costs of the repair because
ALS advanced these expenses, or for the value of damages caused
to the Unit by the water leakage. ETHCDS
ALS is therefore barred at this late stage to interpose this claim.
In Del Rosario v. Bonga, 37 the Court held:
"As a rule, no question will be entertained on appeal
unless it has been raised in the court below. Points of
law, theories, issues and arguments not brought to the
attention of the lower court need not be, and ordinarily
will not be, considered by a reviewing court, as they
cannot be raised for the first time at that late stage. Basic
considerations of due process impel this rule."
As this claim was a separate cause of action which should
have been raised in ALS' Answer with Counterclaim, ALS'
failure to raise this claim is deemed a waiver of the claim.
Third Issue: Remand of the case to the proper trial court.
Question of fact.
The Court of Appeals ruled that there is a need to remand the case
considering that there is no sufficient evidence on record to
establish the amount of petitioner's claim against ALS for unpaid
assessments and dues.
The question of whether petitioner's claim of P994,529.75 for
unpaid assessments and dues against ALS is supported by
sufficient evidence is a purely factual issue and inevitably
requires the weighing of evidence. This Court is not a trier of
facts, and it is not the function of this Court to re-examine the
evidence submitted by the parties. 38 In cases brought before this
Court from the Court of Appeals under Rule 45 of the Rules of
Court, this Court's jurisdiction is limited to reviewing errors of
law which must be distinctly set forth. 39 In this mode of appeal,
the findings of fact of the Court of Appeals and other courts of
origin are conclusive. 40
Jurisprudence is settled that:
"(a)s a rule, the jurisdiction of this Court in cases
brought to it from the Court of Appeals . . . is limited to
the review and revision of errors of law allegedly
committed by the appellate court, as its findings of fact
are deemed conclusive. As such this Court is not duty-
bound to analyze and weigh all over again the evidence
already considered in the proceedings below." 41
This rule admits of several exceptions. This Court may review the
findings of fact of the Court of Appeals:
"(a) where there is grave abuse of discretion; (b) when
the finding is grounded entirely on speculations,
surmises or conjectures; (c) when the inference made is
manifestly mistaken, absurd or impossible; (d) when the
judgment of the Court of Appeals was based on a
misapprehension of facts; (e) when the factual findings
are conflicting; (f) when the Court of Appeals, in
making its findings, went beyond the issues of the case
and the same are contrary to the admissions of both
appellant and appellee; (g) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed
by the parties and which, if properly considered, would
justify a different conclusion; and, (h) where the
findings of fact of the Court of Appeals are contrary to
those of the trial court, or are mere conclusions without
citation of specific evidence, or where the facts set forth
by the petitioner are not disputed by the respondent, or
where the findings of fact of the Court of Appeals are
premised on the absence of evidence and are
contradicted by the evidence on record." 42
However, none of these exceptions exists in the instant case.
The SEC Hearing Officer found that, while petitioner is entitled
to collect the unpaid assessments and dues from ALS, petitioner
has failed to establish clearly the basis for computing the correct
amount of the unpaid assessments and dues. Indeed, there is no
evidence laying down the basis of petitioner's claim other than
allegations of previous demands and statements of accounts.
Whether petitioner has sufficiently established its claim by
preponderance of evidence requires an examination of the
probative weight of the evidence presented by the parties.
Evidently, this is a question of fact the resolution of which is
beyond the purview of the petition for review where only errors
of law may be raised. On the other hand, the decision of the Court
of Appeals, finding insufficient evidence on record, was made
under its power to review both questions of fact and law.
Remand to the proper trial court.
While we sustain the ruling of the Court of Appeals, the case can
no longer be remanded to the SEC Hearing Officer. Republic Act
No. 8799, which took effect on August 8, 2000, transferred SEC's
jurisdiction over cases involving intra-corporate disputes to courts
of general jurisdiction or the appropriate regional trial courts.
Section 5.2 of R.A. No. 8799 reads:
"5.2. The Commission's jurisdiction over all cases
enumerated under Section 5 of Presidential Decree No.
902-A is hereby transferred to the Courts of general
jurisdiction or the appropriate Regional Trial Court;
Provided, That the Supreme Court in the exercise of its
authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases.
The Commission shall retain jurisdiction over pending
cases involving intra-corporate disputes submitted for
final resolution which should be resolved within one (1)
year from the enactment of this Code. The Commission
shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000
until finally disposed."

Based on the Resolution issued by this Court in AM No. 00-8-10-
SC, 43 the Court Administrator and the Securities and Exchange
Commission should cause the transfer of the records of SEC-AC
Nos. 377 and 378 to the proper regional trial court for further
reception of evidence and computation of the correct amount of
assessments and dues that ALS shall pay to petitioner.
Fourth Issue: Penalties prescribed in House Rule 26.2.
ALS and Litonjua did not question before either the SEC or the
Court of Appeals the validity of the penalties prescribed in the
Condominium's House Rule 26.2. Nevertheless, the Court of
Appeals ruled that House Rule 26.2 prescribes grossly excessive
penalties and interests. The resolution of this issue is not
necessary in arriving at a complete and just resolution of this
case. At any rate, we find the interest and penalties prescribed
under House Rule 26.2 reasonable considering the premier
location of the Condominium at the heart of Makati City. It is
inevitable that ALS' unpaid assessments and dues would escalate
because ALS' delinquency started since 1986.
House Rule 26.2 clearly provides for a 24% interest and an 8%
penalty, both running annually, on the total amount due in case of
failure to pay, to wit:
"26.2. Late payment of accounts of members shall be
charged an interest rate of 24% per annum. In addition,
a penalty at the rate of 8% per annum shall be charged
on delinquent accounts. The 24% interest shall be
imposed on unpaid accounts starting with the 21st day
of the quarter until fully paid."
To reiterate, the Condominium Act expressly provides that the
Master Deed may empower the management body of the
Condominium "to enforce the provisions of the declaration of
restrictions." 44 The Master Deed authorizes petitioner, as the
management body, to enforce the provisions of the Master Deed
in accordance with petitioner's By-Laws. Thus, petitioner's Board
of Directors is authorized to determine the reasonableness of the
penalties and interests to be imposed against those who violate
the Master Deed. Petitioner has validly done this by adopting the
House Rules.
The Master Deed binds ALS since the Master Deed is annotated
on the condominium certificate of title of ALS' Unit. The Master
Deed is ALS' contract with all Condominium members who are
all co-owners of the common areas and facilities of the
Condominium. Contracts have the force of law between the
parties and are to be complied with in good faith. 45 From the
moment the contract is perfected, the parties are bound to comply
with what is expressly stipulated as well as with what is required
by the nature of the obligation in keeping with good faith, usage
and the law. 46 Thus, when ALS purchased its Unit from
petitioner, ALS was bound by the terms and conditions set forth
in the contract, including the stipulations in the House Rules of
petitioner, such as House Rule 26.2.
In sum, as a member of petitioner, ALS is indisputably bound by
the Condominium's House Rules which are authorized by the By-
Laws, the Master Deed and the Condominium Act. ESTcIA
Award of attorney's fees.
The award of attorney's fees as damages is the exception rather
than the rule. The general rule is that attorney's fees cannot be
recovered as part of damages because of the policy that no
premium should be placed on the right to litigate. 47 Counsel's
fees are not awarded every time a party prevails in a suit. 48 An
award of attorney's fees and expenses of litigation is proper under
the instances provided for in Article 2208 of the Civil Code, one
of which is where the defendant acted in gross and evident bad
faith. In this case, however, we find no cogent reason to award
attorney's fees in the absence of showing of gross and evident bad
faith on the part of ALS in refusing to satisfy petitioner's claim.
WHEREFORE, the petition is GRANTED and the assailed
Decision of the Court of Appeals is SET ASIDE. ALS
Management & Development Corporation is ordered to pay Twin
Towers Condominium Corporation all overdue assessments and
dues, including interest and penalties from date of default, as shall
be determined by the proper Regional Trial Court in accordance
with this Decision. The proper Regional Trial Court shall
complete the computation within sixty (60) days from its receipt
of this Decision and the records of SEC-AC Nos. 377 and 378.
Costs of suit against ALS Management & Development
Corporation.
SO ORDERED.
||| (Twin Towers Condominium Corp. v. Court of Appeals, G.R.
No. 123552, February 27, 2003)