Property CoOwnership FullCases

B.
CO-OWNERSHIP
1. DEFINITION
Art. 484. There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons.
In default of contracts, or of special provisions, co-ownership shall be governed by the provisions of this Title. (392)
Art. 485. The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their
respective interests. Any stipulation in a contract to the contrary shall be void.
The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is
proved. (393a)
Art. 486. Each co-owner may use the thing owned in common, provided he does so in accordance with the purpose
for which it is intended and in such a way as not to injure the interest of the co-ownership or prevent the other co-
owners from using it according to their rights. The purpose of the co-ownership may be changed by agreement,
express or implied. (394a)
Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto,
and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be alloted to him in the division upon the termination of the co-
ownership. (399)
Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners
or of any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall
pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the
share they may respectively have in the thing owned in common. (1522a)
GCC TRAVEL AND TOURS 1

G.R. No. L-4656 November 18, 1912
RICARDO PARDELL Y CRUZ and

VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-appellees,
vs.
GASPAR DE BARTOLOME Y ESCRIBANO and
MATILDE ORTIZ Y FELIN DE BARTOLOME, defendants-appellants.
Gaspar de Bartolome, in his own behalf.

B. Gimenez Zoboli, for appellees.
TORRES, J.:
This is an appeal by bill of exceptions, from the judgment of October 5, 1907, whereby the Honorable Dionisio
Chanco, judge, absolved the defendants from the complaint, and the plaintiff from a counterclaim, without special
finding as to costs.
Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de Pardell, the first of whom, absent in Spain by
reason of his employment, conferred upon the second sufficient and ample powers to appear before the courts of
justice, on June 8, 1905, in his written complaint, alleged that the plaintiff, Vicente Ortiz, and the defendant, Matilde
Ortiz, are the duly recognized natural daughters of the spouses Miguel Ortiz and Calixta Felin y Paula who died in
Vigan, Ilocos Sur, in 1875 and 1882, respectively; that Calixta Felin, prior to her death, executed on August 17,
1876, a nuncupative will in Vigan whereby she made her four children, named Manuel, Francisca, Vicenta, and
Matilde, surnamed Ortiz y Felin, her sole and universal heirs of all her property; that, of the persons enumerated,
Manuel died before his mother and Francisca a few years after her death, leaving no heirs by force of law, and
therefore the only existing heirs of the said testatrix are the plaintiff Vicenta Ortiz and the defendant Matilde Ortiz;
that, aside from some personal property and jewelry already divided among the heirs, the testatrix possessed, at the
time of the execution of her will, and left at her death the real properties which, with their respective cash values, are
as follows:
1. A house of strong material, with the lot on which it is built, situated on Escolta Street, Vigan,
P6,000.00
and valued at
2. A house of mixed material, with the lot on which it stands, at No. 88 Washington Street,
1,500.00
Vigan; valued at
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; valued at 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 Vicente and to deliver to the latter the one-half thereof, together with one-half of the fruits and rents
collected therefrom, the said defendant and her husband, the self-styled administrator of the properties mentioned,
had been delaying the partition and delivery of the said properties by means of unkept promises and other excuses;
and that the plaintiffs, on account of the extraordinary delay in the delivery of one-half of said properties, or their
value in cash, as the case might be, had suffered losses and damages in the sum of P8,000. Said counsel for the
plaintiffs therefore asked that judgment be rendered by sentencing the defendants, Gaspar de Bartolome, and
Matilde Ortiz Felin de Bartolome, to restore and deliver to the plaintiffs one-half of the total value in cash, according
to appraisal, of the undivided property specified, which one-half amounted approximately to P3,948, or if deemed
proper, to recognize the plaintiff Vicenta Ortiz to be vested with the full and absolute right of ownership to the said
undivided one-half of the properties in question, as universal testamentary heir thereof together with the defendant
Matilde Ortiz, to indemnify the plaintiffs in the sum of P8,000, for losses and damages, and to pay the costs.
Counsel for the defendants, in his answer denied the facts alleged in paragraphs 1, 4, 6, 7, and 8 thereof, inasmuch
as, upon the death of the litigating sister's brother Manuel, their mother, who was still living, was his heir by force of

law, and the defendants had never refused to give to the plaintiff Vicente Ortiz her share of the said properties; and
stated that he admitted the facts alleged in paragraph 2, provided it be understood, however, that the surname of
the defendant's mother was Felin, and not Feliu, and that Miguel Ortiz died in Spain, and not in Vigan; that he also
admitted paragraph 3 of the complaint, with the difference that the said surname should be Felin, and likewise
paragraph 5, except the part thereof relating to the personal property and the jewelry, since the latter had not yet
been divided; that the said jewelry was in the possession of the plaintiffs and consisted of: one Lozada gold
chronometer watch with a chain in the form of a bridle curb and a watch charm consisting of the engraving of a
postage stamp on a stone mounted in gold and bearing the initials M. O., a pair of cuff buttons made of gold coins,
four small gold buttons, two finger rings, another with the initials M. O., and a gold bracelet; and that the defendants
were willing to deliver to the plaintiffs, in conformity with their petitions, one-half of the total value in cash, according
to appraisement, of the undivided real properties specified in paragraph 5, which half amounted to P3,948.
In a special defense said counsel alleged that the defendants had never refused to divide the said property and had
in fact several years before solicited the partition of the same; that, from 1886 to 1901, inclusive, there was collected
from the property on Calle Escolta the sum of 288 pesos, besides a few other small amounts derived from other
sources, which were delivered to the plaintiffs with other larger amounts, in 1891, and from the property on Calle
Washington, called La Quinta, 990.95 pesos, which proceeds, added together, made a total of 1,278.95 pesos,
saving error or omission; that, between the years abovementioned, Escolta, and that on Calle Washington, La
Quinta, 376.33, which made a total of 1,141.71, saving error or omission; that, in 1897, the work of reconstruction
was begun of the house on Calle Escolta, which been destroyed by an earthquake, which work was not finished
until 1903 and required an expenditure on the part of the defendant Matilde Ortiz, of 5,091.52 pesos; that all the
collections made up to August 1, 1905, including the rent from the stores, amounted to only P3,654.15, and the
expenses, to P6,252.32, there being, consequently, a balance of P2,598.17, which divided between the sisters, the
plaintiff and the defendant, would make the latter's share P1,299.08; that, as shown by the papers kept by the
plaintiffs, in the year 1891 the defendant Bartolome presented to the plaintiffs a statement in settlements of
accounts, and delivered to the person duly authorized by the latter for the purpose, the sum of P2,606.29, which the
said settlement showed was owing his principals, from various sources; that, the defendant Bartolome having been
the administrator of the undivided property claimed by the plaintiffs, the latter were owing the former legal
remuneration of the percentage allowed by law for administration; and that the defendants were willing to pay the
sum of P3,948, one-half of the total value of the said properties, deducting therefrom the amount found to be owing
them by the plaintiffs, and asked that judgment be rendered in their favor to enable them to recover from the latter
that amount, together with the costs and expenses of the suit.
The defendants, in their counter claim, repeated each and all of the allegations contained in each of the paragraphs
of section 10 of their answer; that the plaintiffs were obliged to pay to the administrator of the said property the
remuneration allowed him by law; that, as the revenues collected by the defendants amounted to no more than
P3,654.15 and the expenditures incurred by them, to P6,252.32, it followed that the plaintiffs owed the defendants
P1,299.08, that is one-half of the difference between the amount collected from and that extended on the properties,
and asked that judgment be therefore rendered in their behalf to enable them to collect this sum from the plaintiffs,
Ricardo Pardell and Vicenta Ortiz, with legal interest thereon from December 7, 1904, the date when the accounts
were rendered, together with the sums to which the defendant Bartolome was entitled for the administration of the
undivided properties in question.
By a written motion of August 21, 1905, counsel for the plaintiffs requested permission to amend the complaint by
inserting immediately after the words "or respective appraisal," fifth line of paragraph 5, the phrase "in cash in
accordance with the assessed value," and likewise further to amend the same, in paragraph 6 thereof, by
substituting the following word in lieu of the petition for the remedy sought: "By reason of all the foregoing, I beg the
court to be pleased to render the judgment by sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz
Felin de Bartolome, to restore and deliver to the plaintiffs an exact one-half of the total vale of the undivided
properties described in the complaint, such value to be ascertained by the expert appraisal of two competent
persons, one of whom shall be appointed by the plaintiffs and the other by the defendants, and, in case of
disagreement between these two appointees such value shall be determined by a third expert appraiser appointed
by the court, or, in a proper case, by the price offered at public auction; or, in lieu thereof, it is requested that the
court recognize the plaintiff, Vicenta Ortiz, to be vested with a full and absolute right to an undivided one-half of the
said properties; furthermore, it is prayed that the plaintiffs be awarded an indemnity of P8,000 for losses and
damages, and the costs." Notwithstanding the opposition of the defendants, the said amendment was admitted by
the court and counsel for the defendants were allowed to a period of three days within which to present a new
answer. An exception was taken to this ruling.
The proper proceedings were had with reference to the valuation of the properties concerned in the division sought
and incidental issues were raised relative to the partition of some of them and their award to one or the other of the
parties. Due consideration was taken of the averments and statements of both parties who agreed between
themselves, before the court, that any of them might at any time acquire, at the valuation fixed by the expert judicial
appraiser, any of the properties in question, there being none in existence excluded by the litigants. The court,
therefore, by order of December 28, 1905, ruled that the plaintiffs were entitled to acquire, at the valuation
determined by the said expert appraiser, the building known as La Quinta, the lot on which it stands and the
warehouses and other improvements comprised within the inclosed land, and the seeds lands situated in the

pueblos of Vigan and Santa Lucia; and that the defendants were likewise entitled to acquire the house on Calle
Escolta, the lot on Calle Magallanes, and the three parcels of land situated in the pueblo of Candon.
After this partition had been made counsel for the defendants, by a writing of March 8, 1906, set forth: That, having
petitioned for the appraisement of the properties in question for the purpose of their partition, it was not to be
understood that he desired from the exception duly entered to the ruling made in the matter of the amendment to the
complaint; that the properties retained by the defendants were valued at P9,310, and those retained by the plaintiffs,
at P2,885, one-half of which amounts each party had to deliver to the other, as they were pro indiviso properties;
that, therefore, the defendants had to pay the plaintiffs the sum of P3,212.50, after deducting the amount which the
plaintiffs were obliged to deliver to the defendants, as one-half of the price of the properties retained by the former;
that, notwithstanding that the amount of the counterclaim for the expenses incurred in the reconstruction of the pro
indiviso property should be deducted from the sum which the defendants had to pay the plaintiffs, the former, for the
purpose of bringing the matter of the partition to a close, would deliver to the latter, immediately upon the signing of
the instrument of purchase and sale, the sum of P3,212.50, which was one-half of the value of the properties alloted
to the defendants; such delivery, however, was not to be understood as a renouncement of the said counterclaim,
but only as a means for the final termination of the pro indiviso status of the property.
The case having been heard, the court on October 5, 1907, rendered judgment holding that the revenues and the
expenses were compensated by the residence enjoyed by the defendant party, that no losses or damages were
either caused or suffered, nor likewise any other expense besides those aforementioned, and absolved the
defendants from the complaint and the plaintiffs from the counterclaim, with no special finding as to costs. An
exception was taken to this judgment by counsel for the defendants who moved for a new trial on the grounds that
the evidence presented did not warrant the judgment rendered and that the latter was contrary to law. This motion
was denied, exception whereto was taken by said counsel, who filed the proper bill of exceptions, and the same was
approved and forwarded to the clerk of this court, with a transcript of the evidence.
Both of the litigating sisters assented to a partition by halves of the property left in her will by their mother at her
death; in fact, during the course of this suit, proceedings were had, in accordance with the agreement made, for the
division between them of the said hereditary property of common ownership, which division was recognized and
approved in the findings of the trial court, as shown by the judgment appealed from.
The issues raised by the parties, aside from said division made during the trial, and which have been submitted to
this court for decision, concern: (1) The indemnity claimed for losses and damages, which the plaintiffs allege
amount to P8,000, in addition to the rents which should have been derived from the house on Calle Escolta, Vigan;
(2) the payment by the plaintiffs to the defendants of the sum of P1,299.08, demanded by way of counterclaim,
together with legal interest thereon from December 7, 1904; (3) the payment to the husband of the defendant
Matilde Ortiz, of a percentage claimed to be due him as the administrator of the property of common ownership; (4)
the division of certain jewelry in the possession of the plaintiff Vicenta Ortiz; and (5) the petition that the amendment
be held to have been improperly admitted, which was made by the plaintiffs in their written motion of August 21,
1905, against the opposition of the defendants, through which admission the latter were obliged to pay the former
P910.50.lawphil.net
Before entering upon an explanation of the propriety or impropriety of the claims made by both parties, it is
indispensable to state that the trial judge, in absolving the defendants from the complaint, held that they had not
caused losses and damages to the plaintiffs, and that the revenues and the expenses were compensated, in view of
the fact that the defendants had been living for several years in the Calle Escolta house, which was pro
indiviso property of joint ownership.
By this finding absolving the defendants from the complaint, and which was acquiesced in by the plaintiffs who
made no appeal therefrom, the first issue has been decided which was raised by the plaintiffs, concerning the
indemnity for losses and damages, wherein are comprised the rents which should have been obtained from the
upper story of the said house during the time it was occupied by the defendants, Matilde Ortiz and her husband,
Gaspar de Bartolome.
Notwithstanding the acquiescence on the part of the plaintiffs, assenting to the said finding whereby the defendants
were absolved from the complaint, yet, as such absolution is based on the compensation established in the
judgment of the trial court, between the amounts which each party is entitled to claim from the other, it is imperative
to determine whether the defendant Matilde Ortiz, as coowner of the house on Calle Escolta, was entitled, with her
husband, to reside therein, without paying to her coowner, Vicenta Ortiz, who, during the greater part of the time,
lived with her husband abroad, one-half of the rents which the upper story would have produced, had it been rented
to a stranger.
Article 394 of the Civil Code prescribes:

Each coowner may use the things owned in common, provided he uses them in accordance with their object
and in such manner as not to injure the interests of the community nor prevent the coowners from utilizing
them according to their rights.
Matilde Ortiz and her husband occupied the upper story, designed for use as a dwelling, in the house of joint
ownership; but the record shows no proof that, by so doing, the said Matilde occasioned any detriment to the
interest of the community property, nor that she prevented her sister Vicenta from utilizing the said upper story
according to her rights. It is to be noted that the stores of the lower floor were rented and accounting of the rents
was duly made to the plaintiffs.
Each coowner of realty held pro indiviso exercises his rights over the whole property and may use and enjoy the
same with no other limitation than that he shall not injure the interests of his coowners, for the reason that, until a
division be made, the respective part of each holder can not be determined and every one of the coowners
exercises, together with his other coparticipants, joint ownership over the pro indiviso property, in addition to his use
and enjoyment of the same.
As the hereditary properties of the joint ownership of the two sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz,
defendant, were situated in the Province of Ilocos Sur, and were in the care of the last named, assisted by her
husband, while the plaintiff Vicenta with her husband was residing outside of the said province the greater part of
the time between 1885 and 1905, when she left these Islands for Spain, it is not at all strange that delays and
difficulties should have attended the efforts made to collect the rents and proceeds from the property held in
common and to obtain a partition of the latter, especially during several years when, owing to the insurrection, the
country was in a turmoil; and for this reason, aside from that founded on the right of coownership of the defendants,
who took upon themselves the administration and care of the properties of joint tenancy for purposes of their
preservation and improvement, these latter are not obliged to pay to the plaintiff Vicenta one-half of the rents which
might have been derived from the upper of the story of the said house on Calle Escolta, and, much less, because
one of the living rooms and the storeroom thereof were used for the storage of some belongings and effects of
common ownership between the litigants. The defendant Matilde, therefore, in occupying with her husband the
upper floor of the said house, did not injure the interests of her coowner, her sister Vicenta, nor did she prevent the
latter from living therein, but merely exercised a legitimate right pertaining to her as coowner of the property.
Notwithstanding the above statements relative to the joint-ownership rights which entitled the defendants to live in
the upper story of the said house, yet in view of the fact that the record shows it to have been proved that the
defendant Matilde's husband, Gaspar de Bartolome, occupied for four years a room or a part of the lower floor of the
same house on Calle Escolta, using it as an office for the justice of the peace, a position which he held in the capital
of that province, strict justice, requires that he pay his sister-in-law, the plaintiff, one half of the monthly rent which
the said quarters could have produced, had they been leased to another person. The amount of such monthly rental
is fixed at P16 in accordance with the evidence shown in the record. This conclusion as to Bartolome's liability
results from the fact that, even as the husband of the defendant coowner of the property, he had no right to occupy
and use gratuitously the said part of the lower floor of the house in question, where he lived with his wife, to the
detriment of the plaintiff Vicenta who did not receive one-half of the rent which those quarters could and should have
produced, had they been occupied by a stranger, in the same manner that rent was obtained from the rooms on the
lower floor that were used as stores. Therefore, the defendant Bartolome must pay to the plaintiff Vicenta P384, that
is, one-half of P768, the total amount of the rents which should have been obtained during four years from the
quarters occupied as an office by the justice of the peace of Vigan.
With respect to the second question submitted for decision to this court, relative to the payment of the sum
demanded as a counterclaim, it was admitted and proved in the present case that, as a result of a serious
earthquake on August 15, 1897, the said house on Calle Escolta was left in ruins and uninhabitable, and that, for its
reconstruction or repair, the defendants had to expend the sum of P6,252.32. This expenditure, notwithstanding that
it was impugned, during the trial, by the plaintiffs, was duly proved by the evidence presented by the defendants.
Evidence, unsuccessfully rebutted, was also introduced which proved that the rents produced by all the rural and
urban properties of common ownership amounted, up to August 1, 1905, to the sum of P3,654.15 which, being
applied toward the cost of the repair work on the said house, leaves a balance of P2,598.17, the amount actually
advanced by the defendants, for the rents collected by them were not sufficient for the termination of all the work
undertaken on the said building, necessary for its complete repair and to replace it in a habitable condition. It is
therefore lawful and just that the plaintiff Vicenta Ortiz, who was willing to sell to her sister Matilde for P1,500, her
share in the house in question, when it was in a ruinous state, should pay the defendants one-half of the amount
expanded in the said repair work, since the building after reconstruction was worth P9,000, according to expert
appraisal. Consequently, the counterclaim made by the defendants for the payment to them of the sum of
P1,299.08, is a proper demand, though from this sum a reduction must be made of P384, the amount of one-half of
the rents which should have been collected for the use of the quarters occupied by the justice of the peace, the
payment of which is incumbent upon the husband of the defendant Matilde, as aforesaid, and the balance
remaining, P915.08, is the amount which the plaintiff Vicenta must pay to the defendants.
The defendants claim to be entitled to the collection of legal interest on the amount of the counterclaim, from
December 7, 1904. This contention can not be sustained, inasmuch as, until this suit is finally decided, it could not

be known whether the plaintiffs would or would not be obliged to pay the sum whatever in reimbursement of
expenses incurred by the plaintiffs in the repair work on the said house on Calle Escolta, whether or not the
defendants, in turn, were entitled to collect any such amount, and, finally, what the net sum would be which the
plaintiff's might have to pay as reimbursement for one-half of the expenditure made by the defendants. Until final
disposal of the case, no such net sum can be determined, nor until then can the debtor be deemed to be in arrears.
In order that there be an obligation to pay legal interest in connection with a matter at issue between the parties, it
must be declared in a judicial decision from what date the interest will be due on the principal concerned in the suit.
This rule has been established by the decisions of the supreme court of Spain, in reference to articles 1108, 1109,
and 1110 of the Civil Code, reference on April 24, 1867, November 19, 1869, and February 22, 1901.
With regard to the percentage, as remuneration claimed by the husband of the defendant Matilde for his
administration of the property of common ownership, inasmuch as no stipulation whatever was made in the matter
by and between him and his sister-in-law, the said defendant, the claimant is not entitled to the payment of any
remuneration whatsoever. Of his own accord and as an officious manager, he administered the said pro
indiviso property, one-half of which belonged to his wife who held it in joint tenancy, with his sister-in-law, and the
law does not allow him any compensation as such voluntary administrator. He is merely entitled to a reimbursement
for such actual and necessary expenditures as he may have made on the undivided properties and an indemnity for
the damages he may have suffered while acting in that capacity, since at all events it was his duty to care for and
preserve the said property, half of which belonged to his wife; and in exchange for the trouble occasioned him by the
administration of his sister-in-law's half of the said property, he with his wife resided in the upper story of the house
aforementioned, without payment of one-half of the rents said quarters might have produced had they been leased
to another person.
With respect to the division of certain jewelry, petitioned for by the defendants and appellants only in their brief in
this appeal, the record of the proceedings in the lower court does not show that the allegation made by the plaintiff
Vicenta is not true, to the effect that the deceased mother of the litigant sisters disposed of this jewelry during her
lifetime, because, had she not done so, the will made by the said deceased would have been exhibited in which the
said jewelry would have been mentioned, at least it would have been proved that the articles in question came into
the possession of the plaintiff Vicenta without the expressed desire and the consent of the deceased mother of the
said sisters, for the gift of this jewelry was previously assailed in the courts, without success; therefore, and in view
of its inconsiderable value, there is no reason for holding that the said gift was not made.
As regards the collection of the sum of P910.50, which is the difference between the assessed value of the
undivided real properties and the price of the same as determined by the judicial expert appraiser, it is shown by the
record that the ruling of the trial judge admitting the amendment to the original complaint, is in accord with the law
and principles of justice, for the reason that any of the coowners of a pro indiviso property, subject to division or
sale, is entitled to petition for its valuation by competent expert appraisers. Such valuation is not prejudicial to any of
the joint owners, but is beneficial to their interests, considering that, as a general rule, the assessed value of a
building or a parcel of realty is less than the actual real value of the property, and this being appraiser to determine,
in conjunction with the one selected by the plaintiffs, the value of the properties of joint ownership. These two
experts took part in the latter proceedings of the suit until finally, and during the course of the latter, the litigating
parties agreed to an amicable division of the pro indiviso hereditary property, in accordance with the price fixed by
the judicial expert appraiser appointed as a third party, in view of the disagreement between and nonconformity of
the appraisers chosen by the litigants. Therefore it is improper now to claim a right to the collection of the 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 the legal interest from December 7, 1904, on the sum expanded in
the reconstruction of the aforementioned house, but only the interest fixed by law, at the rate of 6 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 participation shall be made of 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.

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.
VASQUEZ, J:
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 the
parcel of 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.
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 same 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 pelosophy 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 all the
other co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly
excessive, the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so in
proportion to the share they may respectively have in the thing owned in common,
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 minimized co-
ownership. The law grants a co-owner the exercise of the said right of redemption when the shares of the of her
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.)
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."
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 corespondents Primo Tiongson and Macaria Puyat. The private respondents shall pay the costs.
SO ORDERED.

G.R. No. L-49219 April 15, 1988
SPOUSES CONCEPCION FERNANDEZ DEL CAMPO and ESTANISLAO DEL CANTO, plaintiffs-appellees,
vs.
BERNARDA FERNANDEZ ABESIA, defendant-appellant.
Geronimo Creer, Jr. for plaintiffs-appellees.
Benedicto G. Cobarde for defendant, defendant-appellant
GANCAYCO, J.:
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 and 1/3 share each, respectively. The trial court appointed a commissioner in accordance
with the agreement of the parties. ,the Id 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
defendants' house which has encroached an area of five (5) sq. meters of the land alloted 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 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. (C.A.), O.G. Supp., Aug. 30, 194, 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.
WHEREFORE, judgment is hereby rendered assigning Lot 1161-A with an area of thirty (30) sq.
meters to the plaintiffs spouses Concepcion 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 PROTION 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.
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 aforesaid 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 plaintiff
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 plaintiff to indemnify defendants for the
value of the Id 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.
SO ORDERED.

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.
Veronico E. Rubio for petitioners.
Mario G. Fortes for private-respondent.
CORTES, J.:
The fate of petitioners' claim over a parcel of land rests ultimately on a determination of whether or not said
petitioners are chargeable with such laches as may effectively bar their present action.
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.
[Decision of the Trial Court, Rollo, p. 37-38].
On appeal, the respondent Court of Appeals affirmed the decision of the lower court insofar as it held that
prescription does not he 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.
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 acts and benefits
pertaining thereto, and he may therefore alienate assign or mortgage it and even substitute another
person in its enjoyment, except when personal rights are involved. But the effect of the alienation or
mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him
in the division upon the termination of the co-ownership. [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 possession of the thing
owned in common from the third person who substituted the co-owner or co-owners who alienated their shares, but
the DIVISION of the common property as if 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 the 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 Budiong 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.
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 rational 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 corporations complainant's rights, the complainant having
had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute suit; (3)
lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he
bases his suit; and, (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the
suit is not held to be barred [Go China 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; Tendo v. Zamacoma, G.R. No. L-63048, August 7, 1985,
138 SCRA 78, 90].
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. 35]. [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.
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 self 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.
Q: And that was denied by the Court of First Instance of Sorsogon because there
was ordinary one signatory to the deed of sale instead of six, was it not?
A: Not one but two signatories.
[Decision of the Regional Trial Court of Sorsogon, Rollo, p. 35]

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 cautions 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.
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.

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.
FERNAN, C.J.:
This case exemplifies the Filipino custom of keeping inherited property in a prolonged juridical condition of co-owner
ship.
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.
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.
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 11 declaring 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 in division 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 in division 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.
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.
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.

G.R. No. L-40064 December 4, 1934
RESURRECCION TAGARAO, BUENAVENTURA TAGARAO and SERAFIN TAGARAO, plaintiffs-appellees,

vs.
MARCOS GARCIA, ET AL., defendants.
MARGARITA GARCIA, ROSARIO GARCIA, DOLORES RUFINO, and ELUETERIO RUFINO, appellants.
Oceeño and Alba for appellants M. Garcia, R. Garcia and D. Rufino.

Vicente T. Remitio for appellant E. Rufino.
Rafael P. Guerrero for appellees.
DIAZ, J.:
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, 1929, 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 Elueterio Rufino appealed but
Marcos Garcia and Paula Tabifranca did not.1awphi1.net
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 (½) 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 (¼) 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.lawphil.net
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 (¼) 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,
as administrator of the intestate estate of Vidal 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 Ragarao, 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 lands 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, case 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 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 cannot
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 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 Elueterio 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 of 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 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 was 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 Velazquez 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 said 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
and 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, uninterrupted 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 for 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 and
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 thereof 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.
Separate Opinions
MALCOLM, J., concurring in part and dissenting in part:
I concur with the opinion of Justice Villa-Real, but in addition desire to append the following observations: The case
at bar is permeated with fraud. To do justice to the parties, all three of the plaintiffs should be permitted to enforce
their equitable rights. This can be done if the rule announced in the case of Velazquez vs. Teodoro ( [1923], 46 Phil.,
757), be accepted as stating a rule of property and practice which should be followed. The judgment of the trial court
should be affirmed.
Goddard, J., concur.
VILLA-REAL, J., concurring in part and dissenting in part:
I agree with the majority opinion in so far as it favors the plaintiffs Serafin Tagarao and Buenaventura Tagarao, but I
regret having to dissent therefrom in so far as it declares that Resurreccion Tagarao's right of action is barred.
After a lengthy disquisition during which American and English jurisprudence was examined, the majority lays down
the general rule that in all actions involving community of property or tenancy in common, the disability of a cotenant
or a coowner to bring an action does not benefit those who are sui juris.
The rulings in the various supreme courts of the American Union on this point are stated in 37 Corpus Juris, page
1031, paragraph 441, as follows:

Disability of one of several parties. — The authorities are not in harmony upon the question of the effect of
the disability of one or more of several parties when one or more are sui juris. Thus it has been held that if
one cotenant is a minor the disability will save the interests of his cotenant from the operation of limitations
in actions for land, and this rule is extended to tenants in common as well as joint
tenants, — the latter being a somewhat anomalous doctrine, — although in personal actions it is held
otherwise, and one plaintiff may be barred while another is saved. On the other hand it is held that, where
the right is joint so that all must sue, all must have the right to sue when the suit is brought, and if one is
barred at that time all are barred, although some may have labored under disability. Perhaps the rule which
is best supported by the authorities is that if the right is joint and several the disability of one will save him
but will not avail another who is not under disability, and that if the right is joint so that the suit cannot be
brought except by the parties jointly then the rights of all are saved if any under disability; and one of coheirs
or tenants in common is saved by his own disability notwithstanding his cotenant is sui juris and barred, and
the saving as to the former will not save the latter, upon the principle that each may sue for his own share
severally. This general rule is subject to qualifications, however, and while it is held that if the cause accrues
to two jointly who are under disability, the statute will not run until the disability is removed as to both, the
application of the rule is confined to cases where all the parties are under disability when the cause accrues
and if one is not under disability the statute will run against all; and this latter branch of the rule is confined in
some cases to actions other than for the recovery of land in which the rule is applied that as each may sue
for is own share, even though all may join, the bar as to one will not operate against the other who is under
disability.
It is inferred from the foregoing that one of the best rules laid down by the authorities on the matter is that if the right
is joint so that the suit cannot be brought except by the parties jointly, the rights of all are saved if any is under
disability. It will be seen that the rule that when a cotenant or coowner is sui juris, the fact that his cotenants or
coowners are laboring under disability does not save him from the prescription of the right of action if it is not
exercised in due time, is not absolute. The rule is applicable only when a cotenant or coowner may exercise his right
of action independently of his coowners or cotenants; but not when the action necessarily has to be brought jointly
by all the coowners or cotenants.
In the case of Palarca vs. Baguisi (38 Phil., 177, 180, 181), this court through Justice Fisher, interpreting section 114
of the Code of Civil Procedure, stated as follows:
. . . We hold that a coowner cannot maintain an action in ejectment without joining all other persons
interested. Section 114 of the Code of Civil Procedure requires that every action must be prosecuted in the
name of the real party in interest, and that any person who has an interest in this subject matter and who is
a necessary party to a complete determination of the questions involved should be made a party to the
proceeding. The same article provides, in its last paragraph, that if any person having an interest in the
subject of the action, and in obtaining the relief demanded, refuses to join as plaintiff with those having alike
interest, he may be made a defendant, the fact of his interest and refusal to join being stated in the
complaint. Were the courts to permit an action in ejectment to be maintained by a person owning merely an
undivided interest in any given tract of land, a judgment in favor of the defendant would not be conclusive as
against the other coowners not parties to the suit, and thus the defendant in possession of the property
might be harassed by as many succeeding actions of ejectment, as there might be coowners of the title
asserted against him. The evidence purpose of section 114 is to prevent the multiplicity of suits by requiring
the person asserting a right against the defendant to include with him, either as coplaintiffs or as
codefendants, all persons standing in the same position, so that the whole matter in dispute may be
determined once and for all in one litigation.
We have not examined, nor do we need to do so, the procedural laws of the State of Ohio to the doctrine of the
Supreme Court of which the majority unconditionally adheres, inasmuch as we have our own civil procedural law
section 114 of which, taken from the Code of Civil Procedure of California, enumerates those who should be joined
as plaintiffs as well as those who should be joined as defendants in an action. I agree that American jurisprudence
should be followed as persuasive authority in all that which is in accord with our laws, customs and social condition,
particularly if the legal provision to be interpreted or construed has been copied from some law of the State the
Supreme Court of which has rendered the decision invoked. But in the case at bar we have our own law on civil
procedure regulating the form and manner of bringing actions and the persons who should bring them and against
whom they should be brought. If section 114 of our Code of Civil Procedure, as interpreted by this court, does not
allow the bringing of an action for the recovery of a common property, as the one in question, by any cotenant or
coowner without the consent of the others, and if under the American decision on which the majority opinion is
based "if the right is joint so that the suit cannot be brought except by the parties jointly then the rights of all are
saved if any is under disability," then the appealed judgment should be affirmed in all its parts.
For the foregoing considerations, I am of the humble opinion that inasmuch as Resurreccion Tagarao,
independently of her coowners Buenaventura Tagarao and Serafin Tagarao, could not bring the present action for
the recovery of their undivided portion of lot No. 510 of cadastral case No. 11 of Isabela, Occidental Negros, G. L. R.
O. Cadastral Record No. 100, in question, which belongs to the plaintiffs and defendants in common and undivided
shares, the disability of her minor brothers saves her, and her fate follows theirs.

G.R. No. L-47757 April 7, 1942
ANA RIVERA, plaintiff-appellant,

vs.
PEOPLES BANK AND TRUST CO., defendant-appellee.
MINNIE STEPHENSON, in her capacity as administratix of the intestate estate of EDGAR
Stephenson,intervenor-appellee.
Cecilio I. Lim, Chief Public Defender, for appellant.

Antonio M. Opisso for intervenor-appellee.
No appearance for appellee Peoples Bank & Trust Co.
OZAETA, J.:
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 read 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 condition 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
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, and shall be valid and sufficient 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 here to this 17th day of October, 1931.
(Sgd.) EDGAR STEPHENSON

(Sgd.) Ana Rivera
Address: 799 Sta. Mesa, Manila
Witness:
(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, 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, administratix 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 of 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 law 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 Avaceña, 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 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 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 the case.
The agreement 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.

67 Phil. 666
Gatchalian vs. Collector of Internal Revenue
IMPERIAL, J.:
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. Gregroria 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 ......................... .13
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 15, 1934, plaintiffs purchased, in the ordinary course of
business, from one of the duly authorized agents of the National Charity Sweepstakes Office one ticket bearing No.
178637 for the sum of two pesos (P2) and that the said ticket was registered in the name of Jose Gatchalian and
Company;
"4. That as a result of the drawing of the sweepstakes on December 15, 1934, the above-mentioned ticket bearing
No. 178637 won one of the third prizes in the amount of P50,000 and that the corresponding check covering the
above-mentioned prize of P50,000 was drawn by the National Charity Sweepstakes Office in favor of Jose
Gatchalian & Company against the Philippine National Bank, which check was cashed during the latter part of
December, 1934 by Jose Gatchalian & Company;
"5. 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, 1935 overruled
the protest and denied the request for refund of the plaintiffs;
"14. That, in view of the failure of the plaintiffs to pay the monthly installments in accordance with the terms and
conditions of 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 May 15, 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 may 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 Silva ................................................ .13 Do.
9. Jose Silva ................................................ .07 Do.
10. Tomasa Mercado .................................... .08 Do.
11. Jesus Legaspi ........................................... .15 Do.
12. Guillermo Tapia ........................................ .13 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.
(Sgd.) "Jose Gatchalian"
And a summary of Exhibits D-1 to D-15 is 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.
Purchase
Name Exhibit No. Price Won Expenses Net prize
Price
1. Jose Gatchalian D-1 P.018 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 1,515
7. Tomasa Mercado D-7 .07 1,875 360 1,515
8. Julio Gatchalian by Beatriz Guzman D-8 .13 3,150 240 2,910
9. Emiliana Santiago D-9 .13 3,325 360 2,965
10. Maria C. Legaspi D-10 .16 4,100 960 3,140
11. Francisco Cabral D-11 .13 3,325 360 2,965
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 copartnerships (companies 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), association, 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 plaintiffs-
appellants. So ordered.
Avanceña, C. J., Villa-Real, Diaz, Laurel, Concepcion, and Moran, JJ., concur.

2. SPECIAL RIGHTS OF CO-OWNERS
Art. 487. Any one of the co-owners may bring an action in ejectment. (n)
Art. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation
of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation
by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such
waiver shall be made if it is prejudicial to the co-ownership. (395a)
Art. 489. Repairs for preservation may be made at the will of one of the co-owners, but he must, if practicable, first
notify his co-owners of the necessity for such repairs. Expenses to improve or embellish the thing shall be decided upon
by a majority as determined in Article 492. (n)
Art. 490. Whenever the different stories of a house belong to different owners, if the titles of ownership do not specify
the terms under which they should contribute to the necessary expenses and there exists no agreement on the subject,
the following rules shall be observed:
(1) The main and party walls, the roof and the other things used in common, shall be preserved at the expense of all the
owners in proportion to the value of the story belonging to each;
(2) Each owner shall bear the cost of maintaining the floor of his story; the floor of the entrance, front door, common
yard and sanitary works common to all, shall be maintained at the expense of all the owners pro rata;
(3) The stairs from the entrance to the first story shall be maintained at the expense of all the owners pro rata, with the
exception of the owner of the ground floor; the stairs from the first to the second story shall be preserved at the
expense of all, except the owner of the ground floor and the owner of the first story; and so on successively. (396)
Art. 491. None of the co-owners shall, without the consent of the others, make alterations in the thing owned in
common, even though benefits for all would result therefrom. However, if the withholding of the consent by one or
more of the co-owners is clearly prejudicial to the common interest, the courts may afford adequate relief. (397a)
Art. 492. For the administration and better enjoyment of the thing owned in common, the resolutions of the majority of
the co-owners shall be binding.
There shall be no majority unless the resolution is approved by the co-owners who represent the controlling interest in
the object of the co-ownership.
Should there be no majority, or should the resolution of the majority be seriously prejudicial to those interested in the
property owned in common, the court, at the instance of an interested party, shall order such measures as it may deem
proper, including the appointment of an administrator.
Whenever a part of the thing belongs exclusively to one of the co-owners, and the remainder is owned in common, the
preceding provision shall apply only to the part owned in common. (398)
Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the
partition of the thing owned in common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be
valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by law.
No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership. (400a)
Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs
may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so
within the period of one month from the time they were notified in writing of the sale by the vendor. (1067a)
Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of
any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only
a reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the
share they may respectively have in the thing owned in common. (1522a)
Art. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days from the notice
in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall not be recorded in the
Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all
possible redemptioners.
The right of redemption of co-owners excludes that of adjoining owners. (1524a)

G.R. No. L-32047 November 1, 1930
MANUEL MELENCIO, MARIANO MELENCIO, PURA MELENCIO, and CARIDAD MELENCIO, plaintiffs-
appellants,
vs.
DY TIAO LAY, defendant-appellee.
Jose V. Valladolid, Jose P. Melencio and Camus and Delgado for appellants.
Araneta and Zaragoza for appellee.
OSTRAND, J.:
On August 1,1927, the plaintiffs, Manuel, Mariano, Pura and Caridad Melencio, brought the present action against
the defendant-appellee, Dy Tiao Lay for the recovery of the possession of a parcel of land situated in the town of
Cabanatuan, Nueva Ecija, and containing an area of 4,628.25 square meters. The plaintiffs further demand a
monthly rental of P300 for the use and occupation of the parcel from May, 1926, until the date of the surrender to
them of the possession thereof; and that if it is found that the said appellee was occupying the said parcel of land by
virtue of a contract of lease, such contract should be declared null and void for lack of consent, concurrence, and
ratification by the owners thereof.
In his answer, the defendant pleaded the general issue, and as special defenses, he alleged in substance that he
was occupying the said tract of land by virtue of a contract of lease executed on July 24,1905, in favor of his
predecessor in interest, by Ruperta Garcia, Pedro Melencio, Juliana Melencio, and Ruperta Melencio under the
terms specified therein, and which contract is still in force; that Liberata Macapagal, the mother of the plaintiffs, in
her capacity as judicial administratrix of the estate of Ramon Melencio, one of the original coowners of the parcel of
land in question, actually recognized and ratified the existence and validity of the contract aforesaid by virtue of the
execution of a public document by her on or about November 27,1920, and by collecting from the assignees of the
original lessee the monthly rent for the premises until April 30, 1926; and that said defendant deposits with the clerk
of court the sum of P20.20 every month as rent thereof and that as a counterclaim, he seeks the recovery of P272
for goods and money delivered by him to the plaintiffs.
The plaintiffs filed a reply to the answer alleging, among other things, that Ruperta Garcia was not one of the
coowners of the land in question; that the person who signed the alleged contract of lease never represented
themselves as being the sole and exclusive owners of the land subject to the lease as alleged by the defendant in
his answer; that the said contract of lease of July 24,1905, is null and void for being executed without the
intervention and consent of two coowners, Ramon Melencio and Jose P. Melencio, and without the marital consent
of the husbands of Juliana and Ruperta Melencio; that the lessee has repeatedly violated the terms and conditions
of the said contract; and that Liberata Macapagal, in her capacity as administratrix of the property of her deceased
husband, could not lawfully and legally execute a contract of lease with the conditions and terms similar to that of
the one under consideration, and that from this it follows that she could not ratify the said lease as claimed by the
defendant.
On January 21,1928, Liberata Macapagal Viuda de Melencio, duly appointed and qualified as administratrix of the
estate of her deceased husband, Ramon Melencio, filed a petition praying to be allowed to join the plaintiffs as party
to the present case, which petition was granted in open court on January 31,1928. Her amended complaint of
intervention of February 14,1928, contains allegations similar to those alleged in the complaint of the original
plaintiffs, and she further alleges that the defendant-appellee has occupied the land in question ever since
November, 1920, under and by virtue of a verbal contract of lease for a term from month to month. To this complaint
of intervention, the defendant-appellee filed an answer reproducing the allegations contained in his answer
reproducing the allegations contained in his answer to the complaint of the original plaintiffs and setting up
prescription as a further special defense.
It appears from the evidence that the land in question was originally owned by one Julian Melencio. He died prior to
the year 1905 leaving his widow, Ruperta Garcia, and his five children, Juliana, Ramon, Ruperta, Pedro R., and
Emilio Melencio. Emilio Melencio also died before 1905, his son Jose P. Melencio, then a minor, succeeding to his
interest in the said parcel of land by representation. A question has been raised as to whether the land was
community property of the marriage of Julian Melencio and Ruperta Garcia, but the evidence is practically
undisputed that Ruperta Garcia in reality held nothing but a widow's usufruct in the land.
On July 24,1905, Ruperta Garcia, Pedro R. Melencio, Juliana Melencio, and Ruperta Melencio executed a contract
of lease of the land in favor of one Yap Kui Chin, but neither Jose P. Melencio nor Ramon Melencio were mentioned
in the lease. The term of the lease was for twenty years, extendible for a like period at the option of the lessee. The
purpose of the lessee was to establish a rice mill on the land, with the necessary buildings for warehouses and for
quarters for the employees, and it was further stipulated that at the termination of the original period of the lease, or
the extension therof, the lessors might purchase all the buildings and improvements on the land at a price to be

fixed by experts appointed by the parties, but that if the lessors should fail to take advantage of that privilege, the
lease would continue for another and further period of twenty years. The document was duly acknowledged but was
never recorded with the register of deeds. The original rent agreed upon was P25 per month, but by reason of the
construction of a street through the land, the monthly rent was reduced of P20.20.
Shortly after the execution of the lease, the lessee took possession of the parcel in question and erected the mill as
well as the necessary buildings, and it appears that in matters pertaining to the lease, he dealt with Pedro R.
Melencio, who from 1905 until his death in 1920, acted as manager of the property held in common by the heirs of
Julian Melencio and Ruperta Garcia. The original lessee, Yap Kui Chin, died in 1912, and the lease, as well as the
other property, was transferred to Uy Eng Jui who again transferred it to Uy Eng Jui & Co., an unregistered
partnership. Finally the lease came into the hands of Dy Tiao Lay, the herein defendant-appellee.
Ramon Melencio died in 1914, and his widow, Liberata Macapagal, was appointed administratrix of his estate. In
1913 the land which includes the parcel in question was registered under the Torrens system. The lease was not
mentioned in the certificate of title, but it was stated that one house and three warehouses on the land were the
property of Yap Kui Chin.
In 1920 the heirs of Julian Melencio made an extrajudicial partition of parts of the inheritance, and among other
things, the land here in question fell to the share of the children of Ramon Melencio, who are the original plaintiffs in
the present case. Their mother, Liberata Macapagal, as administratrix of the estate of her deceased husband,
Ramon, collected the rent for the lease at the rate of P20.20 per month until the month of May,1926, when she
demanded of the lessee that the rent should be increased to P300 per month, and she was then informed by the
defendant that a written lease existed and that according to the terms thereof, the defendant was entitled to an
extension of the lease at the original rental. The plaintiffs insisted that they never had any knowledge of the
existence of such a contract of lease and maintained that in such case the lease was executed without their consent
and was void. It may be noted that upon careful search, a copy of the contract of lease was found among the papers
of the deceased Pedro R, Melencio. Thereafter the present action was brought to set aside the lease and to recover
possession of the land. Upon trial, the court below rendered judgment in favor of the defendant declaring the lease
valid and ordering the plaintiffs to pay the P272 demanded by the defendant in his counterclaim. From this judgment
the plaintiffs appealed.
The contention of the appellants is that the aforesaid contract of lease (Exhibit C) is null and void for the following
reasons:
1. That Exhibit C calls for an alteration of the property in question and therefore ought to have been signed
by all the coowners as by law required in the premises.
2. That the validity and fulfillment of the said agreement of lease were made to depend upon the will of the
lessee exclusively.
3. That the said contract of lease being for a term of over six years, the same is null and void pursuant to the
provision of article 1548 of the Civil Code.
4. That the duration of the same is unreasonably long, thus being against public policy.
5. That the defendant-appellee and his predecessors in interest repeatedly violated the provisions of the
agreement.
The first proposition is based on article 397 of the Civil Code which provides that "none of the owners shall, without
the consent of the others, make any alterations in the common property even though such alterations might be
advantageous to all." We do not think that the alterations are of sufficient importance to nullify the lease, especially
so since none of the coowners objected to such alterations until over twenty years after the execution of the contract
of lease. The decision of this court in the case of Enriquez vs. A. S. Watson and Co. (22 Phil., 623), contains a full
discussion of the effect of alterations of leased community property, and no further discussion upon the point need
here be considered.
The second proposition is likewise of little merit. Under the circumstances, the provision in the contract that the
lessee, at any time before he erected any building on the land, might rescind the lease, can hardly be regarded as a
violation of article 1256 of the Civil Code.
The third and fourth proposition are, in our opinion, determinative of the controversy. The court below based its
decision principally on the case of Enriquez vs. A.S. Watson & Co. (22 Phil., 623), and on the resolution of
the Direccion General de los Registros dated April 26,1907. (Jurisprudencia Civil, vol.107, p. 222.) An examination
of the Enriquez case will show that it differs materially from the present. In that case all of the coowners of a lot and
building executed a contract of lease of the property for the term of eighteen years in favor of A. S. Watson & Co.;
one of the owners was minor, but he was represented by his legally appointed guardian, and the action of the latter

in signing the lease on behalf of the minor was formally approved by the Court of First Instance. In the present case
only a small majority of the coowners executed the lease here in question, and according to the terms of the
contract the lease might be given a duration of sixty years; that is widely different from a lease granted by all of the
coowners for a term of only eighteen years.
The resolution of April 26,1907, is more in point. It relates to the inscription or registration of a contract of lease of
some pasture grounds. The majority of the coowners of the property executed the lease for the term of twelve years
but when the lessees presented the lease for inscription in the registry of property, the registrar denied the
inscription on the ground that the term of the lease exceeded six years and that therefore the majority of the
coowners lacked authority to grant the lease. The Direccion General de los Registros held that the contract of lease
for a period exceeding six years, constitutes a real right subject to registry and that the lease in question was valid.
The conclusions reached by the Direccion General led to considerable criticism and have been overruled by a
decision of the Supreme Court of Spain dated June 1,1909. In that decision the court made the following statement
of the case (translation):
The joint owners of 511 out of 1,000 parts of the realty denominated El Mortero, leased out the whole
property for twelve years to Doña Josefa de la Rosa; whereupon the Count and Countess Trespalacios
together with other coowners brought this suit to annul the lease and, in view of the fact that the land was
indivisible, prayed for its sale by public auction and the distribution of the price so obtained; they alleged that
they neither took part nor consented to the lease; that the decision of the majority of part owners referred to
in article 398 of the Code, implies a common deliberation on the step to be taken , for to do without it, would,
even more than to do without the minority, be nothing less than plunder; and that, even if this deliberation
were not absolutely necessary, the power of the majority would still be confined to decisions touching the
management and enjoyment of the common property, and would not include acts of ownership, such as a
lease for twelve years, which according to the Mortgage Law gives rise to a real right, which must be
recorded, and which can be performed only by the owners of the property leased.
The part owners who had executed the contract prayed in reconvention that it held valid for all the owners in
common, and if this could not be, then for all those who had signed it, and for the rest, for the period of six
years; and the Audiencia of Caceres having rendered judgment holding the contract null and void, and
ordering the sale of the realty and the distribution of the price, the defendants appealed alleging under the
third and fourth assignments of error, that the judgment was a violation of article 398 of the Civil Code, which
is absolute and sets no limit of time for the efficacy of the decisions arrived at by the majority of the part
owners for the enjoyment of the common property, citing the decisions of June 30th, 1897, of July 8th,1902,
and of October 30th, 1907; under the fifth assignments of error the appellants contended that in including
joint owners among those referred to in said article, which sets certain limits to the power of leasing, in the
course of the management of another's property, the court applied article 1548 unduly; and by the seventh
assignments of error, they maintained the judgment appealed from also violated article 1727, providing that
the principal is not bound where his agent has acted beyond his authority; whence it may be inferred that if
in order to hold the contract null and void, the majority of the part owners are looked upon as managers or
agents exercising limited powers, it must at least be conceded that in so far as the act in question lies within
the scope of their powers, it is valid; the contract cannot be annulled in toto.
The Supreme Court held that the appeal from the decision of the Audiencia of Caceres was not well taken and
expressed the following consideranda:
Considering that, although as a rule the contract of lease constitutes an act of management, as this court
has several times held, cases may yet arise, either owing to the nature of the subject matter, or to the period
of duration, which may render it imperative to record the contract in the registry of property, in pursuance of
the Mortgage Law, where the contract of lease may give rise to a real right in favor of the lessee, and it
would then constitute such a sundering of the ownership as transcends mere management; in such cases it
must of necessity be recognized that the part owners representing the greater portion of the property held in
common have no power to lease said property for a longer period than six years without the consent of all
the coowners, whose propriety rights, expressly recognized by the law, would by contracts of long duration
be restricted or annulled; and as under article 1548 of the Civil Code such contracts cannot be entered into
by the husband with respect to his wife's property, by the parent or guardian with respect to that of the child
or ward, and by the manager in default of special power, since the contract of lease only produces personal
obligations, and cannot without the consent of all persons interested or express authority from the owner, be
extended to include stipulations which may alter its character, changing it into a contract of partial alienation
of the property leased;
Considering that, applying this doctrine to the case before us, one of the grounds upon which the judgment
appealed from, denying the validity of the lease made by the majority of the part owners of the pasture
land El Mortero is based, must be upheld; to wit, that the period of duration is twelve years and the consent
of all the coowners has not been obtained; hence, the third, fourth. and fifth assignments of error are without
merit; firstly, because article 398 of the Civil Code, alleged to have been violated, refers to acts decided

upon by the majority of the part owners, touching the management and enjoyment of the common property,
and does not contradict what we have stated in the foregoing paragraph; secondly because although the
cases cited were such as arose upon leases for more than six years, yet this point was not raised on appeal,
and could not therefore be passed upon; and thirdly, because it cannot be denied that there is an analogy
between a manager without special authority, who is forbidden by article 1548 of the Code to give a lease
for a period of over six years, and the joint owners constituting a legal majority, who may decide to lease out
the indivisible property, with respect to the shares of the other coowners; and having come to the conclusion
that the contract is null and void, there is no need to discuss the first two assignments of error which refer to
another of the bases adopted, however erroneously, by the trial court;
Considering that the sixth assignment of error is without merit, inasmuch as the joint ownership of property is
not a sort of agency and cannot be governed by the provisions relating to the latter contract; whence, article
1727 of the Code alleged to have been violated, can no more be applied, than, the question of the validity or
nullity of the lease being raise, upon the contract as celebrated, it would be allowable to modify
a posteriorisome one or other of the main conditions stipulated, like that regarding the duration of the lease,
for this would amount to a novation; still less allowable would it be to authorize diverse periods for the
different persons unequally interested in the fulfillment.
Taking into consideration articles 398,1548, and 1713 of the Civil Code and following the aforesaid decision of June
1,1909, we hold that the contract of lease here in question is null and void.
It has been suggested that by reason of prescription and by acceptance of benefits under the lease, the plaintiffs are
estopped to question the authority for making the lease.To this we may answer that the burden of proof of
prescription devolved upon the defendant and that as far as we can find, there is no proof that Ramon Melencio and
his successors ever had knowledge of the existence of the lease in question prior to 1926. We cannot by mere
suspicion conclude that they were informed of the existence of the document and its terms; it must be remembered
that under a strict interpretation of the terms of the lease, the lessees could remain indefinitely in their tenancy
unless the lessors could purchase the mill and the buildings on the land. In such circumstances, better evidence
than that presented by the defendant in regard to the plaintiff's knowledge of the lease must be required.
The fact that Ramon during his lifetime received his share of the products of land owned in common with his coheirs
is not sufficient proof of knowledge of the existence of the contract of lease when it is considered that the land in
question was only a small portion of a large tract which Pedro R. Melencio was administering in connection with
other community property.
The appealed judgment as to the validity of the lease is therefore reversed, and it is ordered that the possession of
the land in controversy be delivered to the intervenor Liberata Macapagal in her capacity as administratrix of the
estate of the deceased Ramon Melencio. It is further ordered that the defendant pay to said administratrix a monthly
rent of P50 for the occupation of the land from May 1st, 1926, until the land is delivered to the administratrix. The
sum of P272 demanded by the defendant in his counterclaim may be deducted from the total amount of the rent due
and unpaid. The building erected on the land by the defendant and his predecessors in interest may be removed by
him, or otherwise disposed of, within six months from the promulgation of this decision. Without costs. So ordered.
Separate Opinions
STREET and VILLAMOR, JJ., dissenting:
Although the name of Ramon Melencio, father of the plaintiffs in this action, was not in fact signed to the lease in
question, and the lease did not even so much as mentioned him as one of the coowners, the undersigned are
nevertheless of the opinion that Ramon Melencio, and his children after him, are estopped from questioning said
lease, for the reason that, from 1905 to the time of his death in 1914, Ramon Melencio enjoyed the benefits of the
lease, as did his widow and children after him until May,1926, when the widow repudiated the lease, as a
preliminary to the bringing of this action by the plaintiffs. By their acceptance of the benefits of the lease over so long
a period, the persons now questioning the lease and their father, their predecessor in interest, are estopped to
question the authority for making the lease. This estopped cures the want of the special power contemplated in
article 1548 of the Civil Code.
In addition to the estopped arising from the acceptance of benefits under the lease, an estoppel further arises from
the fact that Ramon Melecio, during the years following the execution of the lease, stood by and saw the lessees
place upon the property improvements of a value of more than P100,000, for which reason, also, equity will not
permit the lease to be disturbed to the prejudice of the lessee.
To exhibit the foregoing proposition fully, it is necessary to understand the facts relative to the controversy. These
are substantially as follows:

The land covered by the original lease, having an area of some 6,000 square meters, is located in the town of
Cabanatuan and was formerly the property of one Julian Melencio, married to Ruperta Garcia. After the death of
Julian Melencio, his widow, Ruperta Garcia, united in 1905, with three of their children, namely, Pedro R., Juliana,
and Ruperta, in executing, in favor of Yap Kui Chin, as lessee, the lease which is the subject of this controversy.
The consideration mentioned in the lease was the sum P25 per month. On August 2,1907, at the request of Pedro
R. Melencio, another document was drawn changing the superficial configuration of the leased land but preserving
its original extension of 6,000 square meters. This change was made for the purpose of giving Pedro R. Melencio
space upon which to construct a house on the part segragated from the original mass. In 1915 a new street, passing
through the leased property, was opened in Cabanatuan; and Pedro R. Melencio, acting for the lessors, reduced the
monthly rent from P25 to P20, to correspond with the reduction in the area of the leased land resulting from the
occupation of part of it by the street.
lawphil.net
At the time the lease was made there was living one Ramon Melencio, son of Julian Melencio and Ruperta Garcia
and brother of the heirs who signed the lease. Also before this time there had been another brother named Emilio
Melencio. But Emilio was dead and his only surviving son, Jose P. Melencio, was a small boy then under the
tutelage of his uncle Pedro R. Melencio. The lease referred to is not and never has been questioned by any of the
persons, or descendants of the persons, who signed the instrument. Neither has it been questioned by Jose P.
Melecio, son of Emilio. Nor was the lease questioned in life by Ramon Melencio, who died in 1914; and the only
persons raising a question as to its validity are four of the five children of Ramon, the same being the plaintiffs in this
case.
By series of changes, not, necessary to be here recounted, the rights of the original lessee became vested in the
defendant, Dy Tiao Lay. At the time of the institution of the present action the defendant, Dy Tia lay, had a rice mill,
consisting of valuable buildings and improvements, constructed on the land, and valued, it is alleged, at P160,000;
but during the time of the pendency of this action a fire occurred which seems to have destroyed the mill and
improvements with the exception of a camarin valued at some P15,000.
In November, 1920, the children of Julian Melencio and Ruperta Garcia executed a partial extra-judicial partition of
the properties belonging to their father's estate; and the land covered by this lease was assigned to Liberata
Macapagal, widow of Ramon Melencio, in right of her deceased husband Ramon and as representative of the
children. It will be noted that the land encumbered by the lease was thus assigned precisely to the family of the
deceased brother, Ramon Melencio, who at the same time was the sole living brother whose name was not signed
to the lease.
At the time the lease was executed, Pedro R. Melencio was in fact the manager of the common ancestral estate
belonging to himself and his brothers and sisters; and he continued as such until 1920. After the partition, or partial
partition, of the fraternal estate in 1920, Liberata Macapagal Viuda de Ramon Melencio succeeded to the office of
manager, or guardian, of the estate of her children, at least with respect to the parcel now in question.
It will be noted as an important fact that every dollar due as rent from the leased land was paid by the lessee, from
the time when rent first became due, and these payments were made first to Pedro R. Melencio as manager of the
common estate pertaining to himself and his brothers and sisters, until 1920, when the rents began to be paid to
Liberata Macapagal in the right to herself and children. In April, 1926, Liberata ceased to collect the rent, and in
May, thereafter, she refused to accept payment of the monthly instalment of rent then due. For this reason the
defendant has been making a consignation of the corresponding rent for the benefit of the lessors in the office of the
provincial treasurer. No question is made that during the life of Ramon Melencio he received his share of the
monthly rental from the property in question; nor is there any question that thereafter his widow and children
received their share of the same until the property was assigned in partition to Liberata Macapagal and her children,
after which they received all of the rent, until Liberata refused longer to accept it.
The undersigned concur in the proposition that the lease signed in 1905 was not per se binding on Ramon
Melencio, first, because he was not a party to that lease; and, secondly, because the making of a lease for twenty
years, extendible under certain circumstances for a second and third period of equal duration, was an act of rigorous
alienation and not a mere act of management and enjoyment such as is contemplated in article 398 of the Civil
Code. (Sentencia, June 1,1909; Ruiz, Cod. Civ., vol. 4. p. 502) Neither do we pause to argue that the contract might
have been considered valid under the doctrine of this court stated in Eleizegui vs. Manila Lawn Tennis Club (2 Phil.,
309). At any rate the lease did not purport to bind Ramon, and he was not even mentioned therein as one of the
coowners.
But it is to be noted that none of the parties signatory to the lease have at any time sought to abrogate the contract;
and some of the children of Ramon Melencio only are before the court as actors in this case seeking to set the
contract aside. Under these circumstances the undersigned are of the opinion that Ramon Melencio was at the time
of his death bound by the lease, from his having participated for years in the benefits derived from the contract, and
that his children, who derive their rights from him, are likewise bound.
It is well established that an estate in land may be virtually transferred from one man to another without a writing, by
the failure of the owner to give notice of his title to the purchaser under circumstances where the omission to do so
would operate as a fraud (Kirk vs. Hamilton, 102 U. S., 68,77; 26 Law. ed., 79). This doctrine is so universally
accepted that a bare reference to general treatises on the subject of estopped is necessary (10 R.C. L., p.694; 21 C.
J., pp.1154, 1160, 1206, 1207, 1209); and the estoppel is as effective with respect to a lease as it is with respect to
a deed of absolute conveyance (21 C.J., 1213).
In the case before us Ramon Melencio lived in the town where the land covered by this lease was located, and
every time he went abroad he must have seen the valuable improvements which the original lessee, or his
successors in interest, were erecting and had erected upon part of the common ancestral estate. But from the date
the lease was executed until his death Ramon Melencio did nothing except to receive such portion of the rent as
pertained to him. Under these circumstances, even if his brother Pedro R. Melencio had conveyed the property
away by deed of absolute alienation, Ramon would have been legally bound. It is but natural that so long as he lived
after the lease was made, no complaint was ever registered by him against its validity.
And if Ramon Melencio was estoppel, of course his children are estopped, for their rights are of a purely derivative
character. In the case before us a period of more than twenty-one years elapsed between the time the lease was
made and the date when it was first called in question by the widow.
But Manuel Melencio, the oldest of the heirs who are suing in this case, says that he did not know the terms of the
lease until a short while before this action was instituted, when he called upon the widow of his uncle Pedro and
found a copy of the lease after searching among his uncle's papers. It is not surprising that this plaintiff, who was
hardly more than a baby when the lease was made, should not have known about the terms of the contract. But it
was all the time safely kept among the papers of his uncle Pedro, who, as already stated, was manager of the
common estate of the brothers and sisters. Ramon Melencio is now dead and of course cannot speak as to whether
he knew the terms of the agreement. But he should be presumed to have known its terms, because he was enjoying
benefits from month to month under it, and he had the means of knowledge immediately at hand, namely by
recourse to a trusted brother in whose custody the contract was preserved. In addition to this, we note that when
partition was effected about the year 1920 the fact that the property in question was subject to a lease in favor of the
defendant was noted in the document by which the property was assigned to Liberata Macapagal and her children.
The suggestion that the terms of the lease were unknown to the plaintiffs is of little weight and of no legal merit. We
note that the lease was never registered, but this fact makes no difference in a lawsuit between the parties to the
lease, or their successors in interest.
We are of the opinion that the judgment should be affirmed.

GR No. L-47996 May 9, 1941
ENGRACIA LAVADIA AND OTHERS, plaintiffs and appelates,

v.
ROSARIO COSME DE MENDOZA AND OTHERS, defendants and appellants.
DIAZ, J. :
The litigation between the plaintiffs and the defendants in the Court of First Instance of Laguna was the possession
and custody of certain jewels that some six pious ladies of the municipality of Pagsanjan, Laguna, named Martina,
Matea, Isabel, Paula, Pia and Engracia All of them named Lavadia, had ordered to be made in 1880, with their own
money, to decorate and decorate with them the Imagende Nuestra Señora de Guadalupe, patroness of the said
municipality, retaining for themselves the property of the same, not yielding only their use to the said Image, for the
purpose. The plaintiffs and the defendants, with the exception of Engracia Lavadia who was one of the six, are
descendants of the other five primitives who owned the jewels in question. Because the defendant Rosario Cosme
de Mendoza, who is one of the descendants of Paula Lavadia, who had custody of these last days, wanted to bring
the crown that was part of the same, to the Catholic Bishop of Lipa, to have it in her possession, but Subject to the
use of the Image of Our Lady of Guadalupe, according to the will of their owners, the descendants of the three,
(Isabel Lavadia, Matea Lavadia and Martina Lavadia), Engracia Lavadia who are the plaintiffs, promoted this cause
in the Court of Its origin, to claim the possession and custody of all said jewelry. These are not other than those
described in paragraph 3 of the application. (Isabel Lavadia, Matea Lavadia and Martina Lavadia), Engracia
Lavadia, who are the plaintiffs, who are the plaintiffs of the three, , Promoted this cause in the Court of their origin, to
claim possession and custody of all said jewelry. These are not other than those described in paragraph 3 of the
application. (Isabel Lavadia, Matea Lavadia and Martina Lavadia), Engracia Lavadia, who are the plaintiffs, who are
the plaintiffs of the three, , Promoted this cause in the Court of their origin, to claim possession and custody of all
said jewelry. These are not other than those described in paragraph 3 of the application.
The Court decided the case against the defendants, stating that, since the claimants were four-sixths pro-inde
pendent of the jewels in question, and the defendants, with only two-sixth parties, they had a perfect right to
determine who should take care of their custody; And that, having decided to entrust this to Engracia Lavadia, one
of the original owners, I order the defendant Rosario Cosme de Mendoza to deliver all of them to said
plaintiff. Contrary to this decision of the Court, the defendants filed an appeal, believing that the Court of First
Instance (1) found that appellant Rosario Cosme de Mendoza, and her ancestors in possession of said jewels,
acted only as depositaries, and not fiduciaries ; (2) by stating that the appellants are owners of four-sixths of them,
and that it is for that reason to exercise the right to designate the person to whom they entrust succession; (3) by
failing to declare that the appellant Rosario Cosme de Mendoza, being the owner and fiduciary of said jewels, may
not be deprived of its administration and custody, except for reasons incapable of doing so, which are to execute
acts contrary to The will of their primitive owners, and the disposition of the mentioned jewels at their whim; (4) in
failing to declare that Pia Lavadia and her descendants, until Rosario Cosme de Mendoza, who had had custody
and possession of said jewels, had faithfully performed their duties; And finally (5) by denying your request for a new
hearing. And that it is for that reason to exercise the right to designate the person to whom they entrust suc-
cession; (3) by failing to declare that the appellant Rosario Cosme de Mendoza, being the owner and fiduciary of
said jewels, may not be deprived of its administration and custody, except for reasons incapable of doing so, which
are to execute acts contrary to The will of their primitive owners, and the disposition of the mentioned jewels at their
whim; (4) in failing to declare that Pia Lavadia and her descendants, until Rosario Cosme de Mendoza, who had had
custody and possession of said jewels, had faithfully performed their duties; And finally (5) by denying your request
for a new hearing. And that it is for that reason to exercise the right to designate the person to whom they entrust
succession; (3) by failing to declare that the appellant Rosario Cosme de Mendoza, being the owner and fiduciary
of said jewels, may not be deprived of its administration and custody, except for reasons incapable of doing so,
which are to execute acts contrary to The will of their primitive owners, and the disposition of the mentioned jewels
at their whim; (4) in failing to declare that Pia Lavadia and her descendants, until Rosario Cosme de Mendoza, who
had had custody and possession of said jewels, had faithfully performed their duties; And finally (5) by denying your
request for a new hearing. (3) by failing to declare that the appellant Rosario Cosme de Mendoza, being the owner
and fiduciary of said jewels, may not be deprived of its administration and custody, except for reasons incapable of
doing so, which are to execute acts contrary to The will of their primitive owners, and the disposition of the
mentioned jewels at their whim; (4) in failing to declare that Pia Lavadia and her descendants, until Rosario Cosme
de Mendoza, who had had custody and possession of said jewels, had faithfully performed their duties; And finally
(5) by denying your request for a new hearing. (3) by failing to declare that the appellant Rosario Cosme de
Mendoza, being the owner and fiduciary of said jewels, may not be deprived of its administration and custody,
except for reasons incapable of doing so, which are to execute acts contrary to The will of their primitive owners,
and the disposition of the mentioned jewels at their whim; (4) in failing to declare that Pia Lavadia and her
descendants, until Rosario Cosme de Mendoza, who had had custody and possession of said jewels, had faithfully
performed their duties; And finally (5) by denying your request for a new hearing. Which are to perform acts contrary
to the will of their primitive owners, and to dispose of the aforementioned jewels at will; (4) in failing to declare that
Pia Lavadia and her descendants, until Rosario Cosme de Mendoza, who had had custody and possession of said

jewels, had faithfully performed their duties; And finally (5) by denying your request for a new hearing. Which are to
perform acts contrary to the will of their primitive owners, and to dispose of the aforementioned jewels at will; (4) in
failing to declare that Pia Lavadia and her descendants, until Rosario Cosme de Mendoza, who had had custody
and possession of said jewels, had faithfully performed their duties; And finally (5) by denying your request for a new
hearing.
In order to have a full idea of the facts, let us explain them below, following the account of the same made by the
Court a quo in its decision appealed, since they are not discussed by either the appellants or the appellee:
The object of the cause are the jewels of the image of the Virgin of Our Lady of Guadalupe, in the
municipality of Pagsanjan, Laguna, and consist of a gold crown inlaid with diamonds and diamonds, a
choker of diamonds and diamonds, A belt inlaid with diamonds and diamonds, a necklace of gold also
completely inlaid with diamonds, a bracelet of gold inlaid with diamonds and diamonds, a silver plate of gold
where the above mentioned jewels are placed, and other vairas pieces of gold or Of golden silver for the
decoration of the clothes of said image of Our Lady of Guadalupe. All these jewels are currently deposited
under lock and key in the Bank of the Philippine Islands, where they had been deposited by the defendant
Rosario Cosme de Mendoza.
The crown and jewels described above were made by the year 1880 at the expense of six ladies residing in
the municipality of Pagsanjan, Laguna. They were sisters Paula Lavadia and Pia Lavadia, sisters Martina
Lavadia and Matea Lavadia, and sisters Isabel Lavadia and Engracia Lavadia. These ladies contributed
jewels that they had for the confection of the crown and with them they made the jewels described above,
also contributing the money with which the confection of the same was paid. All these ladies and have
passed away, with the exception of the petitioner Mrs. Engracia Lavadia Vda. De Fernandez. The other
plaintiffs are the legal heirs of Isabel Lavadia, Matea Lavadia and Martina Lavadia, while the defendant
Rosario Cosme de Mendoza and her co-defendants are legitimate heirs and descendants of Paula Lavadia.
The crown and the jewels were sent to make for the use of the patron saint of the municipality of
Pagasanjan, Ntra.Sra. Of Guadeloupe. When they had finished making, their owners agreed that these
jewels would stay with the taxpayer Pia Lavadia. This had in his custody said jewels until its death in 1882,
when its sister Paula Lavadia happened to him in the custody of the same. On the death of Paula Lavadia,
who succeeded in the care, preservation and custody of said jewels, summed up Pedro Rosales, and when
he died, his daughter Paz Rosales, in turn, succeeded him in such custody, preservation and care. On the
death of Paz Rosales, the crown and jewels passed into the custody of her husband Baldomero
Cosme. After Baldomero Cosme, these jewels passed to Manuel Soriano who, in turn, was succeeded in the
custody, Conservation and administration by the defendant Rosario Cosme de Mendoza. Every year since
1880 to date, the jewels in question were used to decorate the image of Our Lady of Guadalupe in
Pagsanjan, and none of those who have been guarding or guarding said jewels had intended to possess
them as exclusive owner. The defendant Rosario Cosme de Mendoza and its co-defendants do not intend to
own the said jewelry. In fact, in the intestate of the late Baldomero Cosme, special act No. 5494 of this Court
of First Instance, the defendant and its co-defendants have stated to the Court that they have never had any
claim to claim control of said jewels or any part of Themselves. ( See Exhibits B-2 by B-3.) Every year since
claim to claim control of said jewels or any part of Themselves. ( See Exhibits B-2 by B-3.) Every year since
claim to claim control of said jewels or any part of Themselves. ( See Exhibits B-2 by B-3.) And none of
those who have been guarding or guarding said jewels had pretended to possess them as exclusive
owner. The defendant Rosario Cosme de Mendoza and its co-defendants do not intend to own the said
jewelry. In fact, in the intestate of the late Baldomero Cosme, special act No. 5494 of this Court of First
Instance, the defendant and its co-defendants have told the Court that they have never had any claim to
claim the possession of said jewels or any part of Themselves. ( See Exhibits B-2 by B-3.) And none of
those who have been guarding or guarding said jewels had pretended to possess them as exclusive
owner. The defendant Rosario Cosme de Mendoza and its co-defendants do not intend to own the said
jewelry. In fact, in the intestate of the late Baldomero Cosme, special act No. 5494 of this Court of First
Instance, the defendant and its co-defendants have stated to the Court that they have never had any claim
to claim control of said jewels or any part of Themselves. ( See Exhibits B-2 by B-3.) 5494 of this Court of
First Instance, said defendant and its co-defendants have stated to the Court that they have never had any
claim to claim the ownership of said jewels or any part of them. ( See Exhibits B-2 by B-3.) 5494 of this

Court of First Instance, said defendant and its co-defendants have stated to the Court that they have never
had any claim to claim the ownership of said jewels or any part of them. ( SeeExhibits B-2 by B-3.)
On February 9, 1938, the defendant Rosario Cosme de Mendoza, in her capacity as administrator of the
intestate of the late Baldomero Cosme, notified all those interested in these jewels that she wanted to make
formal delivery of said jewels to the Bishop of Lina el Next Saturday, that is, on February 12, 1938, informing
them that they witnessed the act of surrender ( See Exhibit 4). In fact, on February 12, 1938, the defendant
and her husband formally surrendered the jewels, granting the document corresponding to that effect,
document presented as Exhibit E of the plaintiffs and 2 of the defendants. Since the applicants were not
satisfied with the delivery, some six persons and the applicants in the case granted a document, designating
the applicant Engracia Lavadia, Who would take care of the crown and the jewels in question ( See Exhibit
3). Having raised the question of who should have in his custody the crown and jewels in question, and this
fact having come to the knowledge of the Bishop of Lipa, this, in turn, on June 21, 1938, grant a deed giving
up custody and Administration of such crown and jewels ( See Exhibit D of the plaintiffs and 1 of the
defendants).
Based on the facts described, the court stated that the contract between the original owners of the jewels in litigation
and the first of them who had custody of the same, was the deposit, as this contract is terminated in articles 1758 Of
the Civil Code. Pia Lavadia first, and then Paula Lavadia and the descendants of the latter being one of them the
appellant Rosario Cosme Mendoza, received and possessed, one after another, the referred ones, only for custody
purposes; Since, as the Court points out in its decision, neither the latter nor the latter used the same for their own
benefit. If it was by virtue of a deposit agreement as received the objects in question, first by Pia and Paula, And
later by the descendants of the latter including the appellant Rosario Cosme de Mendoza, it is clear that there is the
obligation of part of this to return the same to their owners as soon as they claim them. It is thus provided by Article
1766 of the Civil Code which says:
The depositary is obliged to keep the thing and to restrict it, when requested, to the depositor, or to his
cause, or to the person who has been designated in the contract. Its responsibility as to the guard and the
loss of the thing, will be governed by the provisions in the tit. I of this book.
The restitution must be made with all the fruits and accessions of the thing deposited, if it has them, without the
depository being allowed to retain it, as Sanchez Roman comments (IV Sanchez Roman, 885), even under the
pretext of obtaining compensation of Other credits or to compensate of expenses made for its conservation.
The proprietors primitavas of the jewels in question, agreed to entrust the custody of the same to some of them,
reserving themselves experimentally for their property. This comes to show that the appellants' theory that the
contract they had was not a deposit because after all, as they say, the jewels can not be considered as belonging to
others with respect to Rosario Cosme de Mendoza, because she descends Of one of its primitive owners, has no
force, because even among commoners of a thing, one of them can be depositary, and when it is, is subject to the
same obligations imposed by law to every depositary, regarding the conservation of the Thing with the care,
diligence and interest of a good parent.
Joint owner . The fact that the depositary is a joint owner of the res does not alter the degree of diligence
required of him. (18 CJ, 570).
The appealed are descendants and legal heirs of Isabel Lavadia, Matea Lavadia and Martina Lavadia; And Engracia
Lavadia, whom they appointed to take care of the custody of the objects in question, is one of the primitive owners
of the same; And the appellants are in turn the descendants and heirs of Pia Lavadia and PaulaLavadia. Since there
is no evidence of the six primitives, they did not contribute to the making or acquisition of the jewels so often
mentioned, in the same proportion, the most reasonable conclusion is - and this is supported by a presumption of
law (Art. 393, Civil Code ), That all of them prorated the coast of the same paying each, a quota equal. If this is true,
then we must accept the conclusion of the Court that the appellants own four-sixths of said jewelry, And that
appellants are not only of the two remaining sixth parties. As a result, having decided the majority of the appellants,
to entrust the custody and administration of these jewels in order to give faithful performance to the will of their
primitive owners, the appellant Engracia Lavadia, the sole survivor of the same, his decision must Be respected,
because for the administration and better enjoyment of the common thing, according to article 398 of the Civil Code,
the agreements of the majority of the participants are obligatory.
The argument that Rosario Cosme de Mendoza and her predecessors have been faithfully carrying out their duties
as depositaries does not argue in favor of the proposition that the deposit should not be withdrawn because the
deposit agreement is such as to allow the depositor to withdraw from the deposit. Especially when the latter, as in
the case of Rosario Cosme de Mendoza, has performed an act contrary to the order received, entrusting or trying to
entrust to another, the custody and administration of The thing deposited, on its own account and without the
consent of the depositors or their heirs.

Not having found any error in the decision appealed from the Court a quo , hereby, we confirm it, condemning the
appellants to pay the costs. That is how it is commanded.
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.
MONTEMAYOR, J.:
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. 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 Director 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 prepare a schedule of prices and
conditions of sale, subject to the 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 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 terms 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 the same including rents collected during the time that Araneta Inc., administered said property.
The suit was administered 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 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 introduce,
oral and documentary, the trial court presided over by Judge Emilio Peña 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 the 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 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, the pertinent papers, and
sent to her checks covering her 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 gross collections from the sale of the property.
The Court finds from the evidence that he defendant Gregorio Araneta, Incorporated has substantially
complied with 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 denied in the agreement.
With respect to the charged that Gregorio Araneta, Incorporated has failed to submit to plaintiff a copy of the
subdivision plains, list of prices and the conditions governing the sale of subdivided lots, and monthly
statement of collections form 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 want 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 recission of the contract exhibit 6 is not minor violations of the terms of the agreement,
the general rule is that "recission 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 occupantion, knowing that the purchase price would be paid in Japanese military notes; and
Atty. Araneta claims that for this, plaintiff should be thankfull because otherwise she would have received these
notes as her share of the receipts, which currency later became valueles.
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-owners. 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 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-years 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.

G.R. No. 101522 May 28, 1993
LEONARDO MARIANO, AVELINA TIGUE, LAZARO MARIANO, MERCEDES SAN PEDRO, DIONISIA M.
AQUINO, and JOSE N.T. AQUINO, petitioners,
vs.
HON. COURT OF APPEALS, (Sixteenth Division), GRACE GOSIENGFIAO, assisted by her husband GERMAN
GALCOS; ESTER GOSIENGFIAO, assisted by her husband AMADOR BITONA; FRANCISCO GOSIENGFIAO,
JR., NORMA GOSIENGFIAO, and PINKY ROSE GUENO, respondents.
The Baristers Law Office for petitioners.
Simeon T. Agustin for private respondents.
NOCON, J.:
Before Us is a petition foe review of the decision, dated May 13, 1991 of the Court of Appeals in CA-G.R. CV No.
13122, entitled Grace Gosiengfiao, et al. v. Leonardo Mariano v. Amparo Gosiengfiao 1 raising as issue the distinction between
Article 10882 and Article 16203 of the Civil Code.
The Court of Appeals summarized the facts as follows:
It appears on record that the decedent Francisco Gosiengfiao is the registered owner of a residential
lot located at Ugac Sur, Tuguegarao, Cagayan, particularly described as follows, to wit:
"The eastern portion of Lot 1351, Tuguegarao Cadastre, and after its segregation
now designated as Lot 1351-A, Plan PSD-67391, with an area of 1,1346 square
meters."
and covered by Transfer Certificate of Title No. T-2416 recorded in the Register of Deeds of
Cagayan.
The lot in question was mortgaged by the decedent to the Rural Bank of Tuguegarao (designated as
Mortgagee bank, for brevity) on several occasions before the last, being on March 9, 1956 and 29,
1958.
On August 15, 1958, Francisco Gosiengfiao died intestate survived by his heirs, namely: Third-Party
Defendants: wife Antonia and Children Amparo, Carlos, Severino and herein plaintiffs-appellants
Grace, Emma, Ester, Francisco, Jr., Norma, Lina (represented by daughter Pinky Rose), and
Jacinto.
The loan being unpaid, the lot in dispute was foreclosed by the mortgagee bank and in the
foreclosure sale held on December 27, 1963, the same was awarded to the mortgagee bank as the
highest bidder.
On February 7, 1964, third-party defendant Amparo Gosiengfiao-Ibarra redeemed the property by

paying the amount of P1,347.89 and the balance of P423.35 was paid on December 28, 1964 to the
mortgagee bank.
On September 10, 1965, Antonia Gosiengfiao on her behalf and that of her minor children Emma,
Lina, Norma together with Carlos and Severino executed a "Deed of Assignment of the Right of
Redemption" in favor of Amparo G. Ibarra appearing in the notarial register of Pedro (Laggui) as
Doc. No. 257, Page No. 6, Book No. 8, Series of 1965.
On August 15, 1966, Amparo Gosiengfiao sold the entire property to defendant Leonardo Mariano
who subsequently established residence on the lot subject of this controversy. It appears in the
Deed of Sale dated August 15, 1966 that Amparo, Antonia, Carlos and Severino were signatories
thereto.
Sometime in 1982, plaintiff-appellant Grace Gosiengfiao learned of the sale of said property by the
third-party defendants. She went to the Barangay Captain and asked for a confrontation with
defendants Leonardo and Avelina Mariano to present her claim to said property.
On November 27, 1982, no settlement having been reached by the parties, the Barangay captain
issued a certificate to file action.
On December 8, 1982, defendant Leonardo Mariano sold the same property to his children Lazaro
F. Mariano and Dionicia M. Aquino as evidenced by a Deed of Sale notarized by Hilarion L. Aquino
as Doc. No. 143, Page No. 19, Book No. V, Series of 1982.
On December 21, 1982, plaintiffs Grace Gosiengfiao, et al. filed a complaint for "recovery of
possession and legal redemption with damages" against defendants Leonardo and Avelina Mariano.
Plaintiffs alleged in their complaint that as co-heirs and co-owners of the lot in question, they have
the right to recover their respective shares in the same, and property as they did not sell the same,
and the right of redemption with regard to the shares of other co-owners sold to the defendants.
Defendants in their answer alleged that the plaintiffs has (sic) no cause of action against them as the
money used to redeem lot in question was solely from the personal funds of third-party defendant
Amparo Gosiengfiao-Ibarra, who consequently became the sole owner of the said property and thus
validly sold the entire property to the defendants, and the fact that defendants had already sold the
said property to the children, Lazaro Mariano and Dionicia M. Aquino. Defendants further contend
that even granting that the plaintiffs are co-owners with the third-party defendants, their right of
redemption had already been barred by the Statute of Limitations under Article 1144 of the Civil
Code, if not by laches.4
After trial on the merits, the Regional Trial Court of Cagayan, Branch I, rendered a decision dated September 16,
1986, dismissing the complaint and stating that respondents have no right of ownership or possession over the lot in
question. The trial court further said that when the subject property foreclosed and sold at public auction, the rights
of the heirs were reduced to a mere right of redemption. And when Amparo G. Ibarra redeemed the lot from the
Rural Bank on her own behalf and with her own money she became the sole owner of the property. Respondents'
having failed to redeem the property from the bank or from Amparo G. Ibarra, lost whatever rights the might have on
the property.5
The Court of Appeals in its questioned decision reversed and set aside the ruling of the trial court and declared
herein respondents as co-owners of the property in the question. The Court of Appeals said:
The whole controversy in the case at bar revolves on the question of "whether or not a co-owner
who redeems the whole property with her own personal funds becomes the sole owner of said
property and terminates the existing state of co-ownership."
Admittedly, as the property in question was mortgaged by the decedent, a co-ownership existed
among the heirs during the period given by law to redeem the foreclosed property. Redemption of
the whole property by a co-owner does not vest in him sole ownership over said property but will
inure to the benefit of all co-owners. In other words, it will not end to the existing state of co-
ownership. Redemption is not a mode of terminating a co-ownership.
xxx xxx xxx
In the case at bar, it is undisputed and supported by records, that third-party defendant Amparo G.
Ibarra redeemed the propety in dispute within the one year redemption period. Her redemption of the
property, even granting that the money used was from her own personal funds did not make her the
exclusive owner of the mortgaged property owned in common but inured to the benefit of all co-
owners. It would have been otherwise if third-party defendant Amparo G. Ibarra purchased the said
property from the mortgagee bank (highest, bidder in the foreclosure sale) after the redemption
period had already expired and after the mortgagee bank had consolidated it title in which case there
would no longer be any co-ownership to speak of .6
The decision of the Court of Appeals is supported by a long line of case law which states that a redemption by a co-
owner within the period prescribed by law inures to the benefit of all the other co-owners.7
The main argument of petitioners in the case at bar is that the Court of Appeals incorrectly applied Article 1620 of
the Civil Code, instead of Article 1088 of the same code which governs legal redemption by co-heirs since the lot in
question, which forms part of the intestate estate of the late Francisco Gosiengfiao, was never the subject of
partition or distribution among the heirs, thus, private respondents and third-party defendants had not ceased to be
co-heirs.
On that premise, petitioners further contend that the right of legal redemption was not timely exercised by the private
respondents, since Article 1088 prescribes that the same must be done within the period of one month from the time
they were notified in writing of the sale by the vendor.

According to Tolentino, the fine distinction between Article 1088 and Article 1620 is that when the sale consists of an
interest in some particular property or properties of the inheritance, the right redemption that arises in favor of the
other co-heirs is that recognized in Article 1620. On the other hand, if the sale is the hereditary right itself, fully or in
part, in the abstract sense, without specifying any particular object, the right recognized in Article 1088 exists.8
Petitioners allege that upon the facts and circumstances of the present case, respondents failed to exercise their
right of legal redemption during the period provided by law, citing as authority the case of Conejero, et al., v. Court
of Appeals, et al.9 wherein the Court adopted the principle that the giving of a copy of a deed is equivalent to the
notice as required by law in legal redemption.
We do not dispute the principle laid down in the Conejero case. However, the facts in the said case are not four
square with the facts of the present case. In Conejero, redemptioner Enrique Conejero was shown and given a
copy of the deed of sale of the subject property. The Court in that case stated that the furnishing of a copy of the
deed was equivalent to the giving of a written notice required by law. 11
The records of the present petition, however, show no written notice of the sale being given whatsoever to private
respondents. Although, petitioners allege that sometime on October 31, 1982 private respondent, Grace
Gosiengfiao was given a copy of the questioned deed of sale and shown a copy of the document at the Office of the
Barangay Captain sometime November 18, 1982, this was not supported by the evidence presented. On the
contrary, respondent, Grace Gosiengfiao, in her testimony, declared as follows:
Q. When you went back to the residence of Atty. Pedro Laggui were you able to see
him?
A. Yes, I did.
Q. When you saw him, what did you tell?
A. I asked him about the Deed of Sale which Mrs. Aquino had told me and he also
showed me a Deed of Sale. I went over the Deed of Sale and I asked Atty. Laggui
about this and he mentioned here about the names of the legal heirs. I asked why my
name is not included and I was never informed in writing because I would like to
claim and he told me to better consult my own attorney.
Q. And did you go?
A. Yes, I did.
Q. What kind of copy or document is that?
A. It is a deed of sale signed by my mother, sister Amparo and my brothers.
Q. If shown to you the copy of the Deed of Sale will you be able to identify it?
A. Yes, sir.11
Thereafter, Grace Gosiengfiao explicitly stated that she was never given a copy of the said Deed of Sale.
Q. Where did Don Mariano, Dr. Mariano and you see each other?
A. In the house of Brgy. Captain Antonio Bassig.
Q. What transpired in the house of the Brgy. Captain when you saw each other
there?
A. Brgy. Captain Bassig informed my intention of claiming the lot and I also informed
him about the Deed of Sale that was not signed by me since it is mine it is already
sold and I was informed in writing about it. I am a legal heir and I have also the right
to claim.
Q. And what was the reply of Don Mariano and Dr. Mariano to the information given
to them by Brgy. Captain Bassig regarding your claim?

A. He insisted that the lot is already his because of the Deed of Sale. I asked for the
exact copy so that I could show to him that I did not sign and he said he does not
have a copy. 12
The above testimony was never refuted by Dr. Mariano who was present before Brgy. Captain Bassig.
The requirement of a written notice has long been settled as early as in the case of Castillo v. Samonte,13 where this
Court quoted the ruling in Hernaez v. Hernaez, 32 Phil., 214, thus:
Both the letter and spirit of the New Civil Code argue against any attempt to widen the scope of the
notice specified in Article 1088 by including therein any other kind of notice, such as verbal or by
registration. If the intention of the law had been to include verbal notice or any other means of
information as sufficient to give the effect of this notice, then there would have been no necessity or
reasons to specify in Article 1088 of the New Civil Code that the said notice be made in writing for,
under the old law, a verbal notice or information was sufficient. 14
Moreover, petitioners themselves adopted in their argument respondents' allegation In their complaint that sometime
on October, 1982 they sought the redemption of the property from spouses Leonardo Mariano and Avelina Tigue, by
tendering the repurchase money of P12,000.00, which the spouses rejected.15 Consequently, private respondents
exercised their right of redemption at the first opportunity they have by tendering the repurchase price to petitioners.
The complaint they filed, before the Barangay Captain and then to the Regional Trial Court was necessary to assert
their rights. As we learned in the case of Castillo, supra:
It would seem clear from the above that the reimbursement to the purchaser within the period of one
month from the notice in writing is a requisite or condition precedent to the exercise of the right of
legal redemption; the bringing of an action in court is the remedy to enforce that right in case the
purchaser refuses the redemption. The first must be done within the month-period; the second within
the prescriptive period provided in the Statute of Limitation. 16
The ruling in Castillo v. Samonte; supra, was reiterated in the case of Garcia v. Calaliman, where We also discussed
the reason for the requirement of the written notice. We said:
Consistent with aforesaid ruling, in the interpretation of a related provision (Article 1623 of the New
Civil Code) this Court had stressed that written notice is indispensable, actual knowledge of the sale
acquired in some other manners by the redemptioner, notwithstanding. He or she is still entitled to
written notice, as exacted by the code to remove all uncertainty as to the sale, its terms and its
validity, and to quiet and doubt that the alienation is not definitive. The law not having provided for
any alternative, the method of notifications remains exclusive, though the Code does not prescribe
any particular form of written notice nor any distinctive method written notification of redemption
(Conejero et al. v. Court of Appeals et al., 16 SCRA 775 [1966]; Etcuban v. Court of Appeals, 148
SCRA 507 [1987]; Cabrera v. Villanueva, G.R. No. 75069, April 15, 1988).17 (Emphasis ours)
We likewise do not find merit in petitioners' position that private respondents could not have validly effected
redemption due to their failure to consign in court the full redemption price after tender thereof was rejected by the
petitioners. Consignation is not necessary, because the tender of payment was not made to discharge an obligation,
but to enforce or exercise a right. It has been previously held that consignation is not required to preserve the right
of repurchase as a mere tender of payment is enough on time as a basis for an action to compel the vendee a
retroto 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.

THIRD DIVISION
[G.R. No. 102900. October 2, 1997]
MARCELINO ARCELONA, TOMASA ARCELONA-CHIANG and RUTH ARCELONA, represented by their
attorney-in-fact, ERLINDA PILE, petitioner vs. COURT OF APPEALS, REGIONAL TRIAL COURT OF
DAGUPAN CITY, Branch XL, and MOISES FARNACIO, respondent.
DECISION
PANGANIBAN, J.:
What are the remedies and the grounds therefor to invalidate a final and executory judgment? May extraneous
matters, not found in the records of the original case, be used to void such final judgment? Procedurally, may an
independent action for annulment of a decision filed in the Court of Appeals, prosper in the face of a claim that the
remedy of intervention could have been availed of in the regional trial court during the original proceedings? Are all the
co-owners pro indiviso of a real property indispensable parties? Does the non-inclusion of some of such co-owners in
a suit involving tenancy over said property constitute sufficient ground to nullify the final decision rendered in such
case?
The Case
These are the main questions raised in this petition for review of the Decision[1] in CA G.R. SP No. 24846
promulgated on July 16, 1991 by the Court of Appeals[2] denying petitioners plea for annulment of a final and executory
judgment rendered by the Regional Trial Court of Dagupan City, Branch 40, in Civil Case No. D-7240, and the
Resolution[3] promulgated on November 21, 1991 by the appellate court denying their motion for reconsideration.
The Facts
Petitioners Marcelino Arcelona, Tomasa Arcelona-Chiang and Ruth Arcelona are natural-born Filipinos who are
now naturalized Americans residing in California, U. S.A. Petitioner Ruth Arcelona is the surviving spouse and legal
heir of the deceased Benedicto Arcelona, brother of Marcelino and Tomasa. Together with their three sisters - Pacita
Arcelona-Olanday,Maria Arcelona-Arellano and Natividad Arcelona-Cruz (hereinafter collectively referred to as
Olanday, et al.) -- petitioners are co-owners pro-indiviso of a fishpond which they inherited from their deceased
parents.[4] The six Arcelonas (two brothers and four sisters) are named as co-owners in Transfer Certificate of Title
No. 34341 which evidences ownership over the fishpond.
On March 4, 1978, a contract of lease over the fishpond was executed between Cipriano Tandoc and Olanday, et
al. The lease contract was for a period of three (3) years but was renewed up to February 2, 1984.[5]
Private Respondent Moises Farnacio was appointed in turn by Tandoc as caretaker-tenant of the same fishpond,
effective on the date the contract of lease was executed. After the termination of the lease contract, the lessee
(Tandoc) surrendered possession of the leased premises to the lessors, Olanday, et al.
Three days thereafter, on February 7, 1984, Private Respondent Farnacio instituted Civil Case D-7240 for
peaceful possession, maintenance of security of tenure plus damages, with motion for the issuance of an interlocutory
order against Olanday, et al., before Respondent Regional Trial Court of Dagupan City, Branch 40. The case was
intended to maintain private respondent as tenant of the fishpond.[6]
On October 31, 1984, the trial court rendered a decision in favor of private respondent, the dispositive portion of
which reads:[7]
WHEREFORE, in the light of the foregoing considerations, this Court hereby renders judgment as follows; to wit:
1. Declaring and recognizing Moises Farnacio as tenant-caretaker over the fishpond in question located at Lomboy
District, Dagupan City;
2. Ordering the defendants to maintain plaintiff in the peaceful possession and cultivation of said fishpond, with all
the rights accorded and obligations imposed upon him by law;

3. Ordering the Branch Clerk of Court to withdraw and deliver to the plaintiff all the amounts deposited with this
Court; and
4. All others claims of the parties are hereby denied for lack of merit.
Olanday, et al. elevated the decision to the then Intermediate Appellate Court (IAC)[8] which affirmed with slight
modification the decision of the trial court on May 31, 1985. On appeal, this Court[9] sustained the IAC decision in G.R.
No. 71217. On May 25, 1991, after remand of the case to the court of origin, private respondent was placed in
possession of the entire property covered by TCT 34341.
Petitioners then filed with Respondent Court of Appeals a petition for annulment of the aforesaid judgment against
private respondent and the implementing sheriff.[10] The case was docketed as CA GR SP No. 24846. On May 8,
1991, Respondent Court issued a resolution directing petitioners to implead as party defendant the Regional Trial
Court of Dagupan City, Branch 50, Dagupan City.[11] Respondent Court promulgated in due course the assailed
Decision and Resolution.
Dissatisfied, petitioners lodged this petition for review before us on May 10, 1992. On August 24, 1992, due
course was granted to the petition and the parties filed their respective memoranda.
The Issues
In their Memorandum dated November 7, 1992, petitioners allege that Respondent Court of Appeals has
committed the following errors:[12]
I. The Respondent Court of Appeals erred in ruling that the sole and only ground for annulment of judgment is
extrinsic fraud.
II. The Respondent Court of Appeals erred when it failed to consider that lack of due process and jurisdiction
over the persons of the petitioners are also valid grounds for annulment of judgment.
III. In annulment of judgment the grounds should be based solely on the records of the case. It is then an error
for the Respondent Court of Appeals to consider matters extraneous to the records of the case.
IV.The Respondent Court of Appeals erred in ruling that petitioners should have intervened in the proceedings
for issuance of writ of execution before the lower court.
V. The Respondent Court of Appeals erred in ruling that the petitioners are estopped or are guilty of laches in
questioning the decision of the lower court.
The Court believes that these five assigned errors may be condensed into three issues:
(1) May a final judgment be annulled on the ground of lack of jurisdiction (over the subject matter and/or over
the person of indispensable parties) and denial of due process, aside from extrinsic fraud?
(2) May extraneous matters, not found in the records of the original case, be used in voiding or defending the
validity of such final judgment?
(3) Procedurally, will an independent action for annulment of the decision of the regional trial court (which was
affirmed both by the Court of Appeals and the Supreme Court) filed before the Court of Appeals prosper, or
is intervention before the court of origin the only remedy?
The Courts Ruling
The petition is meritorious.
First Issue: Grounds for Annulment of Final Judgment
Petitioners contend that Respondent Court of Appeals erred in decreeing the all-sweeping and categorical
pronouncement that the sole and only ground for annulment of judgment is extrinsic fraud, and in thereby ignoring
various Supreme Court rulings that a final judgment may also be annulled for a) lack of jurisdiction over the subject

matter; b) lack of jurisdiction over the persons of necessary or indispensable parties; and c) lack of due
process.[13] Petitioners argue that, being co-owners of the subject property, they are indispensable
parties.[14]Inasmuch as they were not impleaded in Civil Case D-7240, the questioned judgment of the lower court is
void insofar as the petitioners are concerned for want of jurisdiction over their persons and [for] lack of due
process.[15] Petitioners do not see any reason why a person who was not made a party at all could not assail the same
proceedings involving his property and affecting his rights and interests.[16]
Petitioners further maintain that since the case involves the personal status of the private respondent, or relates
to, or the subject of which is property within the Philippines, then the petitioners as non-residents are entitled to extra-
territorial service,[17] which is a due process requirement. As they were never served with summons, to bar them [from]
questioning the proceedings of the lower court will be compounding injustice x x x. If a party to a case can assail the
proceedings for defective service of summons, the same right should be afforded to a person who was not made a
party at all.[18]
Public respondent disposed of petitioners above contention in this wise:[19]
First. Annulment of judgment, as the Supreme Court had occasion to rule, rests on a single ground: extrinsic fraud
(Canlas vs. Court of Appeals, 170 [sic] SCRA 160, 170). Islamic Da Wah Council of the Phils. vs. Court of Appeals,
178, 186, citing Anuran vs. Aquino, 38 Phil. 29, emphatically announced that there can be no question as to the right
of any person adversely affected by a judgment to maintain an action to enjoin its enforcement and to have it
declared a nullity on the ground of fraud and collusion practiced in obtaining the judgment when such fraud is
extrinsic or collateral to the matters involved in the issues raised at the trial which resulted in such judgment.
xxxxxxxxx
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Clearly, there is nothing in the petition that extrinsic fraud, as Macabingkil defines it, indeed vitiated the proceedings
during the trial of Civil Case No. D-7240.
The essence of the instant petition is worded by the petitioners as follows:
The common property involved in this case is covered by a Torrens Title, specifically mentioning the co-owners
thereof. To bind the entire property and the owners thereof, all the registered owners must be impleaded. The
private respondent ONLY IMPLEADED the three co-owners, excluding the petitioners herein. For the petitioners to
be bound by the questioned decision, such would really be a derogation of their constitutional right to due
process. The questioned decision, too, suffers the fatal defect of utter want of jurisdiction.
Accordingly, since the petition for annulment of judgment is not based on the ground of extrinsic fraud, the petition
suffers from a basic and fundamental infirmity that deprives petitioners of a valid cause of action against
respondents herein.
We hold that the Court of Appeals erred in limiting the ground(s) for annulment of judgment to only one, namely,
extrinsic fraud. While it is true that in the cited cases of Canlas vs. CA[20] and Islamic Da Wah Council of the
Philippines. vs. Court of Appeals,[21] this Court said that a judgment may be annulled on the ground of extrinsic or
collateral fraud,[22] we should hasten to add that in Macabingkil vs. Peoples Homesite and Housing
Corporation,[23] where the above ruling on annulment of judgment was based, we held that there are really three ways
by which a final judgment may be attacked: [24]
Under existing rules, there are three (3) ways by which a final and executory judgment may be set aside. The first is
by petition for relief from judgment under Rule 38 of the Revised Rules of Court, when judgment has been taken
against the party through fraud, accident, mistake or excusable negligence, in which case the petition must be filed
within sixty (60) days after the petitioner learns of the judgment, but not more than six (6) months after such
judgment was entered. The second is by direct action to annul and enjoin the enforcement of the judgment. This
remedy presupposes that the challenged judgment is not void upon its face, but is entirely regular in form, and the
alleged defect is one which is not apparent upon its face or from the recitals contained in the judgment.[fn: Abbain v.
Chua, 22 SCRA 798; Cadano v. Cadano, 49 SCRA 33; Anuran v. Aquino, 38 Phil. 329] As explained in Banco
Espaol-Filipino v. Palanca,[fn: 37 Phil. 291, 949] under accepted principles of law and practice, long recognized in
American courts, the proper remedy in such case, after the time for appeal or review has passed, is for the
aggrieved party to bring an action enjoining the judgment, if not already carried into effect; or if the property has
already been disposed of, he may institute suit to recover it. The third is either a direct action, as certiorari, or by a
collateral attack against the challenged judgment (which is) is void upon its face, or that the nullity of the judgment is
apparent by virtue of its own recitals. As aptly explained by Justice Malcolm in his dissent in Banco Espaol-
Filipino v. Palanca, supra, A judgment which is void upon its face, and which requires only an inspection of the
judgment roll to demonstrate its want of vitality is a dead limb upon the judicial tree, which should be lopped off, if
the power so to do exists.

Since the aforementioned decision in Civil Case No. Q-5866 is not void upon its face, it may only be annulled by
direct action on the ground of fraud.
It is only extrinsic or collateral fraud, as distinguished from intrinsic fraud, however, that can serve as a basis for the
annulment of judgment. [Aring v. Original, 6 SCRA 1021, 1025; Velasco v. Velasco, 2 SCRA 736] Fraud has been
regarded as extrinsic or collateral, within the meaning of the rule, where it is one the effect of which prevents a party
from having a trial, or real contest, or from presenting all of his case to the court, or where it operates upon matters
pertaining, not to the judgment itself, but to the manner in which it was procured so that there is not a fair
submission of the controversy.[46 Am. Jur. 913] x x x.
It is clear then that to set aside a final and executory judgment, there are three remedies available to a litigant: first,
a petition for relief from judgment under Rule 38 of the Rules of Court [25] on grounds of fraud, accident, mistake and
excusable negligence filed within sixty (60) days from the time petitioner learns of the judgment but not more than six
(6) months from the entry thereof; second, a direct action to annul the judgment on the ground of extrinsic fraud;
and third, a direct action for certiorari or collateral attack to annul a judgment that is void upon its face or void by virtue
of its own recitals. Thus, Macabingkil did not preclude the setting aside of a decision that is patently void where mere
inspection of the judgment is enough to demonstrate its nullity on grounds of want of jurisdiction or non-compliance
with due process of law. This doctrine is recognized in other cases:[26]
x x x. There is no question that a final judgment may be annulled. There are, however, certain requisites which must
be established before a judgment can be the subject of an action for annulment. Under the present procedure, aside
from the reliefs provided in these two sections (Secs. 1 & 2, Rule 38), there is no other means whereby the defeated
party may procure final and executory judgment to be set aside with a view to the renewal of the litigation, unless (a)
the judgment is void for want of jurisdiction or for lack of due process of law, or (b) it has been obtained by fraud. (I
Morans Rules of Court 1950 Ed., p. 697, citing Anuran v. Aquino, 38 Phil. 29; Banco Espaol-Filipino v. Palanca, 37
Phil. 921). Reason of public policy which favors the stability of judicial decisions are (sic) mute in the presence of
fraud which the law abhors (Garchitorena vs. Sotelo, 74 Phil. 25).
On the one hand, extrinsic fraud is the ground to annul a voidable final judgment; the declaration of nullity of a
patently void final judgment, on the other, is based on grounds other than extrinsic fraud. To say, then, that petitioners
can avail themselves only of the ground of extrinsic fraud and no other is to fail to appreciate the true meaning and
ramifications of annulment/nullity.
Jurisdiction is conferred by law. Its exercise must strictly comply with the legal requisites; otherwise, a challenge
on the ground of lack of jurisdiction may be brought up anytime. Such jurisdiction normally refers to jurisdiction over
the subject. As an example, in a case involving the issuance of a new owners duplicate certificate of title the original
of which was lost, stolen or destroyed, the court must strictly comply with the requisites of Section 109 of P.D. 1529;
otherwise, its jurisdiction may be attacked anytime. Thus, we ruled in New Durawood Co. Inc. vs. Court of Appeals:[27]
In Demetriou vs. Court of Appeals, et al.,[238 SCRA 158, at 162 (November 14, 1994)] this Court ruled:
In Serra Serra v. Court of Appeals (195 SCRA 482 [1991]), on facts analogous to those involved in this case, this
Court already held that if a certificate of title has not been lost but is in fact in the possession of another person, the
reconstituted title is void and the court rendering the decision has not acquired jurisdiction. Consequently the
decision may be attacked any time.
In the instant case, the owners duplicate certificates of title were in the possession of Dy Quim Pong, the petitioners
chairman of the board and whose family controls the petitioner corporation. Since said certificates were not in fact
lost or destroyed, there was no necessity for the petition filed in the trial court for the Issuance of New Owners
Duplicate Certificates of Title x x x, In fact, the said court never acquired jurisdiction to order the issuance of new
certificates. Hence, the newly issued duplicates are themselves null and void.
It is obvious that this lapse happened because private respondents and respondent judge failed to follow the
procedure set forth in P.D. No. 1529 which, as already stated, governs the issuance of new owners duplicate
certificates of title.
Section 109 of the said law provides, inter alia, that due notice under oath of the loss or theft of the owners duplicate
certificate shall be sent by the owner or by someone in his behalf to the Register of Deeds x x x (italics supplied). In
this case, while an affidavit of loss was attached to the petition in the lower court, no such notice was sent to the
Register of Deeds.
Private respondents tried to convince the Court that by their failure to locate Francis Dytiongsee, they had no other
recourse but to file a petition for reconstitution. Sec. 107 of the P.D. 1529 , however, states that the remedy, in case
of the refusal or failure of the holder -- in this case, the petitioner -- to surrender the owners duplicate certificate of
title, is a petition in court to compel surrender of the same to the Register of Deeds, and not a petition for
reconstitution.

Ineluctably, a judgment rendered without jurisdiction over the subject matter is void. As we elucidated in
Leonor vs. CA:[28]
Clearly and unequivocally, the summary procedure under Rule 108, and for that matter under Art. 412 of the Civil
Code, cannot be used by Mauricio to change his and Virginias civil status from married to single and of their three
children from legitimate to illegitimate. Neither does the trial court, under said Rule, have any jurisdiction to declare
their marriage null and void and as a result thereof, to order the local civil registrar to cancel the marriage entry in
the civil registry. Further, the respondent trial judge gravely and seriously abused his discretion in unceremoniously
expanding his very limited jurisdiction under such rule to hear evidence on such a controversial matter as nullity of a
marriage under the Civil Code and/or Family Code, a process that is proper only in ordinary adversarial proceedings
under the Rules.
Jurisdiction over the Persons

of Indispensable Parties
True, the above dispositions refer to jurisdiction over the subject matter. Basic considerations of due process,
however, impel a similar holding in cases involving jurisdiction over the persons of indispensable parties which a court
must acquire before it can validly pronounce judgments personal to said defendants. Courts acquire jurisdiction over
a party plaintiff upon the filing of the complaint. On the other hand, jurisdiction over the person of a party defendant is
assured upon the service of summons in the manner required by law or otherwise by his voluntary appearance. As a
rule, if a defendant has not been summoned, the court acquires no jurisdiction over his person, and a personal
judgment rendered against such defendant is null and void.[29] A decision that is null and void for want of jurisdiction
on the part of the trial court is not a decision in the contemplation of law and, hence, it can never become final and
executory.[30]
Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest without whom there
can be no final determination of an action. As such, they must be joined either as plaintiffs or as defendants. The
general rule with reference to the making of parties in a civil action requires, of course, the joinder of all necessary
parties where possible, and the joinder of all indispensable parties under any and all conditions, their presence being
a sine qua non for the exercise of judicial power.[31] It is precisely when an indispensable party is not before the court
(that) the action should be dismissed.[32] The absence of an indispensable party renders all subsequent actions of the
court null and void for want of authority to act, not only as to the absent parties but even as to those present.[33]
Petitioners are co-owners of a fishpond. Private respondent does not deny this fact, and the Court of Appeals did
not make any contrary finding. The fishpond is undivided; it is impossible to pinpoint which specific portion of the
property is owned by Olanday, et al. and which portion belongs to petitioners. Thus, it is not possible to show over
which portion the tenancy relation of private respondent has been established and ruled upon in Civil Case D-
7240. Indeed, petitioners should have been properly impleaded as indispensable parties.Servicewide Specialists,
Incorporated vs. Court of Appeals[34] held that no final determination of a case could be made if an indispensable party
is not impleaded:
x x x. An indispensable party is one whose interest will be affected by the courts action in the litigation, and without
whom no final determination of the case can be had. The partys interest in the subject matter of the suit and in the
relief sought are so inextricably intertwined with the other parties that his legal presence as a party to the proceeding
is an absolute necessity. In his absence there cannot be a resolution of the dispute of the parties before the court
which is effective, complete, or equitable.
Formerly, Article 487 of the old Civil Code provided that any one of the co-owners may bring an action in
ejectment. It was subsequently held that a co-owner could not maintain an action in ejectment without joining all the
other co-owners. Former Chief Justice Moran, an eminent authority on remedial law, explains:[35]
x x x. As held by the Supreme Court, were the courts to permit an action in ejectment to be maintained by a person
having merely an undivided interest in any given tract of land, a judgment in favor of the defendants would not be
conclusive as against the other co-owners not parties to the suit, and thus the defendant in possession of the
property might be harassed by as many succeeding actions of ejectment, as there might be co-owners of the title
asserted against him. The purpose of this provision was to prevent multiplicity of suits by requiring the person
asserting a right against the defendant to include with him, either as co-plaintiffs or as co-defendants, all persons
standing in the same position, so that the whole matter in dispute may be determined once and for all in one
litigation.
Contrariwise, it is logical that a tenant, in an action to establish his status as such, must implead all the pro-
indiviso co-owners; in failing to do so, there can be no final determination of the action. In other words, a tenant who
fails to implead all the co-owners cannot establish with finality his tenancy over the entire co-owned land.
Co-owners in an action for the security of tenure of a tenant are encompassed within the definition of
indispensable parties; thus, all of them must be impleaded. As defined:[36]

An indispensable party is a party who has such an interest in the controversy or subject matter that a final
adjudication cannot be made, in his absence, without injuring or affecting that interest, a party who has not only an
interest in the subject matter of the controversy, but also has an interest of such nature that a final decree cannot be
made without affecting his interest or leaving the controversy in such a condition that its final determination may be
wholly inconsistent with equity and good conscience. It has also been considered that an indispensable party is a
person in whose absence there cannot be a determination between the parties already before the court which is
effective, complete, or equitable. Further, an indispensable party is one who must be included in an action before it
may properly go forward.
A person is not an indispensable party, however, if his interest in the controversy or subject matter is separable from
the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which
does complete justice between them. Also, a person is not an indispensable party if his presence would merely
permit complete relief between him and those already parties to the action, or if he has no interest in the subject
matter of the action. It is not a sufficient reason to declare a person to be an indispensable party that his presence
will avoid multiple litigation.
Clearly, the decision in Civil Case D-7240 cannot bind petitioners and cannot adjudicate the entire co-owned
property, not even that portion belonging to Olanday et al., ownership of the property being still pro-
indiviso. Obviously, the failure to implead petitioners barred the lower court from making a final adjudication. Without
the presence of indispensable parties to a suit or proceeding, a judgment therein cannot attain finality.[37]
Ergo, res inter alios judicatae nullum aliis praejudicarium faciunt.[38] Thus, the Court, through former Chief Justice
Marcelo B. Fernan, held that a person who was not impleaded in the complaint cannot be bound by the decision
rendered therein, for no man shall be affected by a proceeding in which he is a stranger[39]
Admittedly, in this case, the want of jurisdiction of the trial court in rendering its decision in Civil Case No. D-7240
is not patent on the face of said judgment. However, there were glaring documentary and testimonial pieces of
evidence referred to by the trial court in its decision which should have prompted it to inquire further whether there
were other indispensable parties who were not impleaded. These facts and circumstances should have forewarned
the trial court that it had not acquired jurisdiction over a number of indispensable parties. In American jurisprudence,
the nullity of a decision arising from lack of jurisdiction may be determined from the record of the case, not necessarily
from the face of the judgment only.[40] We believe that this rule should be applied to this case, considering that in the
assailed trial courts decision, referrals were made to crucial evidence which if scrutinized would readily reveal that
there were indispensable parties omitted.
First, the decision referred to the subject property as Lot No. 3312 of the Cadastral Survey.[41] This lot was
particularly described in private respondents Complaint dated February 6, 1984 filed in Civil Case D-
7240.[42] Obviously such description was copied by private respondent from the transfer certificate of title over the
subject fishpond issued on August 12, 1975naming all the co-owners, including the herein petitioners and the fact of
their foreign residences, thus:[43]
IT IS HEREBY CERTIFIED that certain land situated in the City of Dagupan, formerly in the Province of
Pangasinan bounded and described as follows:
A parcel of land (Lot 3312 of the Cadastral Survey of Dagupan), situated in the City of Dagupan. x x x
is registered in accordance with the provisions of the Land Registration Act in the name of PACITA ARCELONA,
married to Miguel Ulanday; TOMASA ARCELONA, married to Tung Ming Chiang; MARCELINO V. ARCELONA,
married to Soledad Tiongco; MARIA V. ARCELONA, married to Oreste Arellano; BENEDICTO V. ARCELONA,
married to Ruth Suget; and NATIVIDAD ARCELONA, married to Agrimero Cruz; all of legal age, Filipinos, the
second and fifth named residents of Los Angeles, California, U.S.A., third & fourth of Manila; first of Villasis,
Pangasinan & the last named of Lingayen, Pangasinan as owner thereof in fee simple, subject to such of the
incumbrances mentioned in Section 39 of said Act as may be subsisting, and to
xxxxxxxxx
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Entered at the City of Dagupan

Philippines, on the 12th day of
August in the year nineteen hundred
and seventy-five at 4:00 p m.
(Underscoring supplied).
Considering that private respondent was suing to establish his status as a tenant over the subject fishpond, the
responsibility for impleading all the indispensable parties undeniably rested on him as provided under Rule 3 of the
Rules of Court. Section 2 of Rule 3 requires that every action must be prosecuted and defended in the name of the
real party in interest. All persons having an interest in the subject of the action and in obtaining the relief demanded

shall be joined as plaintiffs. Further, Section 7 of the same rule states that (p)arties in interest without whom no final
determination can be had of an action shall be joined either as plaintiffs or defendants.
Second, Respondent Court of Appeals ruled that private respondent in his motion to dismiss (before said Court)
alleged that petitioners knew of the lessee as revealed by the testimony of Pacita Olanday, one of the defendants in
Civil Case No. D-7240 and a sister of petitioners. (TSN, pp. 15-16, hearing of October 2, 1984, Civil Case No. D-
7240). That being so, why did private respondent fail to include petitioners as defendants in the case below? It should
be noted that the lease contract was between Cipriano Tandoc and Olanday, et al.Private respondent, a caretaker-
tenant of Tandoc, knew or should have known that there were co-owners other than Olanday, et al. And even
conceding arguendo that petitioners had authorized Olanday, et al. to enter into a lease contract with Tandoc, this fact
did not authorize the latter to represent petitioners in the civil case he brought. Under Rule 9, Section 9 of the Rules
of Court, the pleader is required to set forth the names, if known to him, of persons who ought to be parties, if complete
relief is to be accorded to those who are already parties but who are not joined; and to state why they have been
omitted. Surely, he brought suit to establish his status as a tenant. It is thus his responsibility to state the names of all
the persons against whom he wants to establish his status as tenant.
Third, both the private respondent and the trial court knew of the obvious omission of petitioners as party
defendants. Telling is the fact that, by reciting part of the transcript of stenographic notes, private respondent himself
provided clear evidence in his memorandum that he knew of the existence of other co-owners who were not impleaded
in his case against Olanday et al.[44]
As admitted by Pacita Olanday, one of the defendants in Civil Case No. D-7240, the petitioners know of the lease
with Cipriano Tandoc; they were authorized to lease the shares of the petitioners. Here is the testimony of Pacita
Olanday:
ATTY. VINLUAN:
Q. You made mentioned that you were authorized by your brothers and sister who are (sic) residing in the
United States to enter into a contract. Did these brothers and sister of yours make any special power
of attorney authorizing you to that effect?
xxxxxxx
A I talked with my brothers when they balik-bayan, they said I will make an agreement. (tsn. October 2,
1984 pp. 15 and 16 - CV# D-7240).
He also knew that in executing the lease, Pacita Olanday represented only her sisters (Maria and Natividad) who
were residing in the Philippines. Definitely, at the time of the execution of the contract, she had no brother residing in
the Philippines because her only brothers, Marcelino and Benedicto Arcelona, (the latter now deceased and
represented in this case by Petitioner Ruth Arcelona) were living in California. This fact can be deduced from the
recitals of the RTC decision:[45]
It is undisputed in the records that the defendants (referring to Olanday, et al.) are co-owners and civil law lessors of
a fishpond otherwise known as Lot No. 3312 of the Cadastral Survey of Dagupan City; that as owners, they entered
into a Contract of Lease (Exh. 1) with one Cipriano Tandoc dated March 4, 1978 for a term of three (3) years from
February 2, 1982, which contract was renewed for another two (2) years up to February 2, 1984. On the 31st of
January, 1984, Exhibit 3, an Affidavit of Surrender of Rights and Possession of Lessee over a Fishpond was
executed between Cipriano Tandoc and Pacita Olanday who signed for herself and in behalf of her two (2)
sisters. Plaintiff Moises Farnacio was however, instituted as caretaker-tenant over the same fishpond by Cipriano
Tandoc on the date of the Contract of Lease was entered into between the owners-lessors and Cipriano
Tandoc. The private agreement (Exh. D) signed by Cipriano Tandoc and Moises Farnacio is, however, assailed in a
criminal case for falsification in the Fiscals Office. (Underscoring supplied)
In fact, only these co-owners who are residing in the Philippines were joined as defendants in Civil Case D-
7240. But the mention of Pacitas relatives who were residing abroad should have made the trial court aware of the
existence of indispensable parties who were not yet impleaded.
Despite this knowledge of the apparent defect in the complaint and in its jurisdiction, the trial court did not take
the initiative to implead petitioners as defendants or to order private respondent to do so, contrary to the clear mandate
of Rule 3, Sec. 11 of the Rules of Court[46] which provides:
Sec. 11. Misjoinder and non-joinder of parties. -- Misjoinder of parties is not ground for dismissal of an
action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any
stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with
separately.
The foregoing testimony on the existence of other co-owners was a clear signal that indispensable parties had
not yet been impleaded. Indeed, this knowledge should have put the private respondent and the trial court on
guard. The burden to implead or to order the impleading of indispensable parties is placed on private respondent and

on the trial court, respectively. Since no evidence was presented to prove that petitioners were aware of the civil case
filed against Olanday et al., they cannot be faulted for not intervening therein.
In sum, we hold that the nullity of a judgment grounded on lack of jurisdiction may be shown not only by what
patently appears on the face of such decision but also by documentary and testimonial evidence found in the records
of the case and upon which such judgment is based.
Before ending our discussion on the first issue, we must stress that the then Intermediate Appellate Court and
this Court, in affirming the RTC decision in Civil Case No. D-7240 which we here nullify, had not been given the
occasion to rule on the issue of the trial courts jurisdiction over the persons of indispensable parties; verily, this
question had not been raised before the two appellate courts. The review of civil cases by appellate courts is confined
only to the issues raised by the parties. Hence, appellate courts do not have the privilege or the opportunity afforded
the trial courts to consider matters beyond the specifically contested issues, e.g., jurisdiction over indispensable
parties, as in this case. Such lack of jurisdiction could not have been known by the appellate courts, including this
Court, as it was not patent from the documents or submissions filed before them. The issue raised before the then
Intermediate Appellate Court and this Court was formulated in this wise: (t)he validity of private respondents claim
that he is a tenant of the petitioners fishpond, with security of tenure as such assured under the law, is the basic
question presented in this appeal.[47] We underscore the fact that the issue of whether all the indispensable parties
had been validly impleaded, if at all, had not been raised at that time. In any event, whether the indispensable parties
were actually impleaded and jurisdiction over them was acquired was a factual question for the trial court to
determine. Consistent with the basic doctrine that factual findings of lower courts are binding on appellate courts
unless covered by the recognized exceptions,[48] appellate courts must be able to rely on the implied affirmation of the
trial court that jurisdiction had been acquired over indispensable parties, especially when this was not raised as an
issue on appeal. The responsibility for impleading indispensable parties for the exhaustive trial of a case cannot rest
on this forum or on the then Intermediate Appellate Court. Indeed, the Decision of this Court affirming the said trial
courts decision is captioned only as Pacita A. Olanday, Maria A. Arellano and Natividad A. Cruz, petitioners, vs.
Intermediate Appellate Court and Moises Farnacio, respondents, clearly indicating that petitioners herein had been
omitted as indispensable parties in the proceedings before the trial court and before the appellate
tribunals. Substantial justice requires that this error be now rectified.
Second Issue: Estoppel and Laches
Apart from holding that there was only one ground to annul a judgment, namely, extrinsic fraud, the appellate
court -- using extraneous evidence -- also found that estoppel and laches had set in against petitioners, thereby barring
them from asserting lack of jurisdiction over their persons. These extraneous matters are stated by the Respondent
Court in this wise:
x x x True, indeed, that petitioners were not original parties to the action and that the decision embraces half of the
property in dispute belonging to petitioners as co-owners thereof. But they cannot now complain they were denied
due process. It will be recalled that the contract of lease was entered with one Cipriano Tandoc on March 4, 1978
for a term of three years, which contract was renewed for another two years up to February 2, 1984. During all the
years of the existence of the lease contract, it would be incredulous for petitioners to assert that they never knew of
such lease agreement from their three sisters, the defendants herein. Petitioners raised no overt protest against the
lease contract executed by their sisters with Cipriano Tandoc in 1978 and renewed in 1982. Petitioners took no
direct action to promptly disavow or disaffirm the action taken by their sisters to lease the entire property to Tandoc.
It is likewise unbelievable that during all the years that the subject property (fishpond) is under litigation in Civil Case
No. D-7240 from 1984 to 1991, petitioners were not aware that their property is subject of the controversy. By their
continued silence, they have permitted the acts of their sisters in leasing the property and they cannot now be
heard, after a prolonged period of time, to denounce such acts as done without their knowledge and consent. The
rule of acquiescence by silence has estopped petitioners to deny the reality of the state of things which they made to
appear to exist and upon which others have been led to reply. Parties must take the consequences of the position
they assume. Sound ethics require that the apparent in its effects and consequences should be as if it were real,
and the law properly so regards.(Metro Manila Transit Corporation vs. Morales, 173 SCRA 629, 633).
In Santiago Syjuco, Inc. vs. Castro, 175 SCRA 171, 192, it was held, inter alia:
xxxxxxxxx
x x x. Likewise, in Criminal Case No. 16866 for falsification against respondent Farnacio before Branch 3 of the
Municipal Trial Court of Dagupan City, witness Juan Bernal testified that the petitioners herein Tomasa Arcelona,
Marcelino Arcelona and Ben Arcelona authorized their sisters Natividad Cruz, Corazon Arcelona, Pacita Olanday to
lease the fishpond to Cipriano Tandoc. (TSN, pp. 5-6, hearing of August 10, 1987 in Criminal Case No. 16866).[49]
Petitioners balk at these pronouncements, arguing that in annulment of judgments, the grounds thereof must be
based solely on the records of the case. They contend that to permit the courts record to be contradicted or varied by
evidence dehors would render such records of no avail. Petitioners contend that Respondent Court of Appeals erred
in taking into account the proceedings in Criminal Case No. 16866 to show alleged knowledge of the petitioners herein
of the lease of the property to Cipriano Tandoc.[50] Petitioners submit that the bone of contention in this case is not
knowledge of the petitioners of the Lease Contract executed by Pacita Olanday et al. and Cipriano Tandoc, but
whether the petitioners knew of the case filed by private respondent against Pacita Olanday et al. involving their
common property.
Petitioners stress that Private Respondent Farnacio is a total stranger and has absolutely no privity of interest
with them because it was Tandoc, not Farnacio, who entered into a lease contract with Olanday, et al. [51]
Petitioners deny any concealment or deception on their part that would constitute estoppel. They contend that in
the transfer certificate of title, their names were specifically mentioned as co-owners of the property on which the
private respondent sought to be installed in physical possession as tenant.[52] They aver that Respondent Court of
Appeals finding that they had knowledge of the lease contract is based on presumption not on clear and convincing
evidence. Assuming, according to petitioners, that they can be held in estoppel, it can only be as against Cipriano
Tandoc, not private respondent who was never a party to the lease contract.[53]
Since the judgment is void insofar as the petitioners are concerned for lack of jurisdiction [over] their persons and
for want of due process, and since they were never given the opportunity to institute any action to protect their interest,
petitioners contend that to bar them now by laches and estoppel will create an unfair and unjust situation. For as
petitioners candidly state, they do not question the pronouncement that private respondent is the tenant of Pacita
Olanday et al.; however, they submit that the issue in this case is whether private respondent is also the tenant of
herein petitioners entitled to be placed in physical possession and cultivation of their undetermined share in the
property without [petitioners] being made parties in the case.[54]
Private respondent counters that Pacita Olanday x x x testified that she was authorized to lease the share of x x
x petitioners. According to private respondent, while petitioners were in the Philippines, they were informed of the
appointment of private respondent as caretaker-tenant of the entire fishpond, and they did not object to such
appointment.[55] Further, private respondent contends that petitioners failed to intervene in the case before the writ of
execution was granted on May 5, 1991 despite the appearance x x x of their counsel, Atty. Marina Cruz, when the
motion for issuance of said writ was heard. Private respondent adds that he was impliedly recognized as a tenant
when petitioners received their corresponding shares [i]n the lease rental of the property from the private respondent,
through Olanday, et al. and their counsel, Atty. Marina Cruz.[56]
As correctly put by petitioners, we hold that Respondent Court of Appeals, in deciding the petition to declare the
judgment void, cannot consider extraneous matters to vary what the records bear. In other words, the Court of Appeals
cannot annul or declare null the assailed decision with such extraneous matters. The validity or nullity of the said
decision must stand or fall on its own face and the evidence on record.
In an action to declare a judgment void because of lack of jurisdiction over the parties or subject matter,
only evidence found in the records of the case can justify the annulment of the said judgment. Contrariwise, the nullity
of the judgment due to lack of jurisdiction may be proved at most by the evidence on record but never by extraneous
evidence. Sen. Vicente J. Francisco aptly explains this in his treatise on the Rules of Court:[57]
The validity of a final judgment may be attacked on the ground that the judgment or order is null and void, because
the court had no power or authority to grant the relief or no jurisdiction over the subject matter or over the parties or
both. The aggrieved party may attack the validity of the final judgment by a direct action or proceeding in order to
annul the same, as certiorari, which is not incidental to, but is the main object of the proceeding. The validity of a
final judgment may also be attacked collaterally as when a party files a motion for the execution of the judgment and
the adverse party resists the motion by claiming that the court has no authority to pronounce the judgment and that
the same is null and void for lack of jurisdiction over the subject matter or over the parties.
In cases of collateral attack, the principles that apply have been stated as follows: The legitimate province of
collateral impeachment is void judgments. There and there alone can it meet with any measure of success. Decision
after decision bears this import: In every case the field of collateral inquiry is narrowed down to the single issue
concerning the void character of the judgment and the assailant is called upon to satisfy the court that such is the
fact. To compass his purpose of overthrowing the judgment, it is not enough that he shows a mistaken or erroneous
decision or a record disclosing non-jurisdictional irregularities in the proceedings leading up to the judgment. He
must go beyond this and show to the court, generally from the fact of the record itself, and not by extraneous
evidence that the judgment complained of is utterly void. If he can do that his attack will succeed for the cases leave
no doubt respecting the right of a litigant to collaterally impeach a judgment that he can prove to be void.
The reason for the rule of exclusion of extraneous proof to show that the judgment complained of is utterly void for
lack of jurisdiction has been expressed in the following words: The doctrine that the question of jurisdiction is to be
determined by the record alone, thereby excluding extraneous proof seems to be the natural unavoidable result of
that stamp of authenticity which, from the earliest times, was placed upon the record, and which gave it such
uncontrollable credit and verity that no plea, proof, or averment could be heard to the contrary. x x x Any rule, x x x
would be disastrous in its results, since to permit the courts record to be contradicted or varied by evidence dehors
would render such records of no avail and definite sentences would afford but slight protection to the rights of
parties once solemnly adjudicated.

We should add, however, that where an action for annulment of judgment is grounded on extrinsic fraud,
extraneous evidence is admitted. We have held that, although a person need not be a party to the judgment sought
to be annulled by reason of extrinsic fraud, he must prove his allegation that the judgment was obtained by the use of
fraud and collusion and that he would be adversely affected thereby.[58] Fraud must be extraneous; otherwise, there
would be no end to litigation. Extrinsic fraud refers to any fraudulent act committed by a prevailing party outside the
trial of the case, whereby the defeated party has been prevented from fully exhibiting his side of the case, because of
fraud or deception practiced on him by his opponent.[59]As distinctly defined in Cosmic Lumber Corporation vs. Court
of Appeals, et al.,[60]
There is extrinsic fraud within the meaning of Sec. 9, par. (2), of B.P. Blg. 129, where it is one the effect of which
prevents a party from hearing a trial, or real contest, or from presenting all of his case to the court, or where it
operates upon matters, not pertaining to the judgment itself, but to the manner in which it was procured so that there
is not a fair submission of the controversy. In other words, extrinsic fraud refers to any fraudulent act of the
prevailing party in the litigation which is committed outside of the trial of the case, whereby the defeated party has
been prevented from exhibiting fully his side of the case by fraud or deception practiced on him by his opponent. (fn:
Makabingkil v. PHHC, No. L-29080, 17 August 1976, 72 SCRA 326, 343-344) Fraud is extrinsic where the
unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his
opponent, as keeping him away from court, a false promise of a compromise; or where the defendant never had
knowledge of the suit, being kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without
authority connives at his defeat ; these and similar cases which show that there has never been a real contest in the
trial or hearing of the case are reasons for which a new suit may be sustained to set aside and annul the former
judgment and open the case for a new and fair hearing. (fn: Id., p. 344 citing U.S. v. Throckmorton, 25 L. Ed. 93,
95).
In deciding the petition for annulment of judgment which should be a petition to declare judgment void Respondent
Court of Appeals should not have considered the following matters which find no support from the records and are
thus considered extraneous: (1) the assumption that petitioners knew of the five-year lease contract with private
respondent and the pendency of Civil Case No. D-7240 from 1984 to 1991; and (2) the testimony of Juan Bernal in a
separate criminal case before another court concerning the authority granted to Olanday et al. and where petitioners
were not parties. The rule is that the nullity of the decision arising from want of jurisdiction and/or due process should
appear from the records of the case. And the validity of the judgment cannot be anchored on mere suppositions or
speculations, as Respondent Court did.
Equally important, the finding of estoppel and laches by Respondent Court is not supported by the evidence on
record. The silence of petitioners can easily be explained by the fact that they were not in the country during the
pendency of the subject civil case. Such absence from the country was never rebutted by private respondent. Even
in the proceedings antecedent to this case before us now, petitioners were merely represented by their attorney-in-
fact.[61] Moreover, they were not at all impleaded as parties in the judgment sought to be voided. Neither were they
properly served summons. The indelible fact is that they were completely ignored.
In any event, we ruled in Alabang Development Corporation vs. Valenzuela[62] that no laches attach when the
judgment is null and void for want of jurisdiction:
The herein respondents attribute laches to the petitioners for not appealing from the order of the lower court
denying their motion to intervene and motion for new trial hence allowing the said order/decision to become
final. There is no laches nor finality of any decision to speak of since the decision under question is herein
pronounced null and void for having been rendered without jurisdiction. Prescinding therefrom, as admitted by
themselves in their comment, the judgment of reconstitution is ineffective against the owners of lands covered thereby
who were not joined as parties in the proceeding. As the Court ruled in Bernal case on the matter of intervention [fn:
93 SCRA at pp. 247, 248] a valid judgment cannot even be rendered where there is want of indispensable parties
such as petitioners who hold subsisting Torrens Title to the properties in question and this aspect of the case
commands the joinder of indispensable parties to allow them to uphold their interests based upon the Torrens titles
they hold overrides any question of later intervention. Petitioners have precisely availed of the proper, speedy and
adequate remedy of the present special civil action of certiorari and prohibition to annul and set aside for want of
jurisdiction the decision and all proceedings of respondent judge.
On the other hand, the doctrine of estoppel is predicated on and finds its roots in equity which, broadly defined,
is justice according to natural law and right. It is a principle intended to prevent a clear case of injustice. The term is
hardly separable from a waiver of right. Estoppel, like laches, must be intentional and unequivocal, for when
misapplied, it can easily become a most convenient and effective means of injustice. Estoppel is a principle that, as a
rule, can be invoked only in highly exceptional and legitimate cases.[63] In Cruz vs. Court of Appeals,[64]we reiterated
the requisites of estoppel:
In Kalalo vs. Luz, [fn: 34 SCRA 337] We held that the essential elements of estoppel in respect to the party claiming
it are: (a) lack of knowledge and of the means of knowledge of the truth as the facts in question; (b) reliance, in good
faith, upon the conduct or statements of the party to be estopped; and (c) action or inaction based thereon of such
character as to change the position or status of the party claiming the estoppel, to his injury, detriment, or prejudice.

The herein facts ineluctably show the absence of the first element in this case. Inasmuch as there is no proof that
petitioners had knowledge of the pending tenancy case filed by private respondent, it is only fair that they should not
be held in estoppel for failing to intervene in and to question the jurisdiction of the trial court in Civil Case No. D-
7240. Thus, private respondent may not say that he was misled into believing that petitioners knew of the lease
contract and of the litigation of Civil Case No. D-7240. Undisputedly, from the evidence on record, petitioners had no
such knowledge.
Petitioners receipt of lease rentals cannot be used as proof of recognition of private respondent as a caretaker-
tenant. This issue was not raised in the lower court and is being alleged for the first time before us. Well-settled is the
doctrine that questions not raised in the lower courts cannot be raised for the first time on appeal.[65]
Third Issue: Intervention as a Remedy of Petitioners
Petitioners contend that Respondent Court of Appeals erred when it ruled that their only remedy was intervention
during the execution stage of Civil Case No. D-7240. Inasmuch as annulment of judgment could be made either
collaterally or directly, petitioners insist that their resort to direct action in annulling the Decision of the lower court
should not be taken against them.[66] Moreover, petitioners argue that in proceedings for execution of a final decision
or judgment, it is the ministerial duty of the court of origin to issue the writ.[67] Petitioners add that because their action
would result in the modification, alteration, and annulment of the judgment, the specific provision of law that annulment
of judgment of the Regional Trial Court is within the exclusive jurisdiction of the Court of Appeals should prevail.[68]
Private respondent counters that petitioners deliberately did not intervene to afford them opportunity to question,
as they now question, the validity of any decision to be rendered in said case, x x x in the event of an adverse
decision.[69]
We hold that intervention is not the only remedy to assail a void final judgment. There is no procedural rule
prescribing that petitioners intervention in the hearing for the issuance of a writ is the only way to question a void final
judgment. As already stated, petitioners were not aware of such hearing. Besides, as already discussed, a direct
action is available in assailing final judgments grounded on extrinsic fraud, while a direct or a collateral action may be
used to show lack of jurisdiction.
The assailed Decision of Respondent Court of Appeals cites certain cases allowing intervention as follows:[70]
A case in which an execution has been issued is regarded as still pending so that all proceedings in the execution
are proceedings in the suit. There is no question that the court which rendered the judgment has a general supervisory
control over its process of execution and this power carries with it the right to determine every question of fact and
law which may be involved in the execution. (Suson vs. Court of Appeals, 172 SCRA 70, 75, citing Paman vs. Severis,
115 SCRA 709; Seavan Carrier vs. GTI Sportswear, 137 SCRA 580)
These cases, which require intervention of parties who may be adversely affected by the decision, are not
applicable. In the cited Suson vs. Court of Appeals,[71] the parties, though not impleaded, knew of the case and were
in fact directed by the trial court to intervene, but they refused to do so. These particular facts are absent in the instant
case where, to repeat, petitioners were abroad when Civil Case D-7240 was prosecuted.
In any event, as earlier pointed out, jurisprudence upholds the soundness of an independent action to declare as
null and void a judgment rendered without jurisdiction as in this case.In Leonor vs. Court of Appeals, [72] Petitioner
Virginia A. Leonor, through a petition for certiorari, prohibition and mandamus x x x sought the nullification of both the
decision dated December 14, 1992 and the order dated February 24, 1993 of the trial court for having been issued in
excess of jurisdiction and/or with grave abuse of discretion.[73] We held in that case that:[74]
A void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of
any obligation. All acts performed pursuant to it and all claims emanating from it have no legal effect. Hence, it can
never become final and any writ of execution based on it is void: x x x it may be said to be a lawless thing which can
be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head.
WHEREFORE, the petition for certiorari is GRANTED. The Decision of Respondent Court of Appeals is
hereby REVERSED and SET ASIDE. The decisions in Civil Case No. D-7240, AC- G.R. SP-05237-CAR and G.R.
No. L-71217 are ANNULLED and SET ASIDE for lack of jurisdiction. No costs.
SO ORDERED.

ARNELITO ADLAWAN, G.R. No. 161916
Petitioner,
Present:
Panganiban, C.J. (Chairman),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
EMETERIO M. ADLAWAN and
NARCISA M. ADLAWAN, Promulgated:
Respondents.
January 20, 2006
DECISION
YNARES-SANTIAGO, J.:
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 Adlawans 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 petitioners 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[12]children 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.
Respondents also contended that Dominadors signature at the back of petitioners 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 Dominadors 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 petitioners filiation and the
settlement of the estate of Dominador are conditions precedent to the accrual of petitioners 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 plaintiffs 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 petitioners 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]
Petitioners 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.
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 respondents 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
latters 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 respondents 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 petitioners 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 petitioners co-owner entitled to possession and
enjoyment of the property.
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. In Resuena 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. In Celino 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,[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 x x x.
xxxx

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 x x x. (Emphasis added)[37]
Clearly, the said cases find no application here because petitioners 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 petitioners complaint in Civil Case No. 392, and its January 8, 2004 Resolution, are AFFIRMED.
SO ORDERED.

3. SPECIAL RULE ON MARITAL PROPERTIES
Art. 90. When a marriage is annulled, the court shall award the custody of the children as it may deem best, and make
provision for their education and support. Attorney's fees and expenses incurred in the litigation shall be charged to the
conjugal partnership property, unless the action fails. (33a)

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B.

GCC TRAVEL AND TOURS 1

RICARDO PARDELL Y CRUZ and

Gaspar de Bartolome, in his own behalf.

6. Three parcels of land in the pueblo of Candon; valued at 150.00

GCC TRAVEL AND TOURS 2

GCC TRAVEL AND TOURS 3

Article 394 of the Civil Code prescribes:

GCC TRAVEL AND TOURS 4

GCC TRAVEL AND TOURS 5

GCC TRAVEL AND TOURS 6

GCC TRAVEL AND TOURS 7

GCC TRAVEL AND TOURS 8

Geronimo Creer, Jr. for plaintiffs-appellees.

Benedicto G. Cobarde for defendant, defendant-appellant

In solving the issue the trial court held as follows:

GCC TRAVEL AND TOURS 9

THE TRIAL COURT ERRED IN ORDERING DEFENDANTS-APPELLANTS TO REMOVE AND

Article 448 of the New Civil Code provides as follows:

GCC TRAVEL AND TOURS 10

DELIA BAILON-CASILAO, LUZ PAULINO-ANG, EMMA PAULINO-YBANEZ, NILDA PAULINO-TOLENTINO,

Veronico E. Rubio for petitioners.

Mario G. Fortes for private-respondent.

After trial, the lower court rendered a decision:

c. Heirs of Nenita Bailon-Paulino

GCC TRAVEL AND TOURS 11

5. Ordering the defendant to pay the following:

b. P2,000.00 as attorney's fees and;

c. to pay the costs.

[Decision of the Trial Court, Rollo, p. 37-38].

GCC TRAVEL AND TOURS 12

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

GCC TRAVEL AND TOURS 13

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: Not one but two signatories.

[Decision of the Regional Trial Court of Sorsogon, Rollo, p. 35]

GCC TRAVEL AND TOURS 14

GCC TRAVEL AND TOURS 15

Venancio B. Fernando for defendants-appellants.

GCC TRAVEL AND TOURS 17

GCC TRAVEL AND TOURS 18

RESURRECCION TAGARAO, BUENAVENTURA TAGARAO and SERAFIN TAGARAO, plaintiffs-appellees,

Oceeño and Alba for appellants M. Garcia, R. Garcia and D. Rufino.

GCC TRAVEL AND TOURS 19

GCC TRAVEL AND TOURS 20

GCC TRAVEL AND TOURS 22

GCC TRAVEL AND TOURS 23

MALCOLM, J., concurring in part and dissenting in part:

Goddard, J., concur.

VILLA-REAL, J., concurring in part and dissenting in part:

GCC TRAVEL AND TOURS 24

GCC TRAVEL AND TOURS 25

ANA RIVERA, plaintiff-appellant,

Cecilio I. Lim, Chief Public Defender, for appellant.

Know All Men by These Presents:

(Sgd.) EDGAR STEPHENSON