G.R. No. 153029. September 27, 2007.
* During respondent’s marriage with Sofronio, they acquired the following properties: (a)
BEATRIZ, ALLAN, MARY ANN, JOCELYN, WELMA, ROWEL and SOFRONIO
WENDEL II, all surnamed ACRE, petitioners, vs. EVANGELINE YUTTIKKI, respondent.
Family Code; Marriages; Husband and Wife; Co-Ownership;The property regime of parties to a
bigamous marriage is governed by Article 148 of the Family Code which provides that all properties
acquired by the parties out of their actual joint contribution of money, property, or industry shall be
governed by the rules on coownership—if there is no contribution from either or both of the spouses,
there can be no co-ownership.—Undeniably, the marriage between respondent and Sofronio is
bigamous considering that their union was celebrated while he was still married to Beatriz. As such,
_______________
* FIRST DIVISION.
their property regime is covered by Article 148 of the Family Code providing that all properties
acquired by the parties out of their actual joint contribution of money, property, or industry shall be
governed by the rules on co-ownership. Hence, if there is no contribution from either or both of the
spouses, there can be no coownership. Petitioners failed to present any evidence to establish that
Sofronio made an actual contribution in acquiring the contested properties. Clearly, co-ownership
does not exist here.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Paterno S. Compra for petitioners.
Avenescio A. Piramide for respondent.
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on Certiorari under Rule 45 of the
1997 Rules of Civil Procedure, as amended, assailing the Decision dated March 11, 2002
1
rendered by the Court of Appeals in CA-G.R. CV No. 64656, entitled “Beatriz Acre, et al.,
plaintiffs-appellants, v. Evangeline Yuttikki, defendant-appellant.”
Beatriz Acre, petitioner, and Sofronio Acre, Jr. were married on November 8, 1957.
Their union produced six children, also petitioners.
Sometime in 1972, Sofronio left the conjugal dwelling because of constant marital
dispute. Later, petitioners found that he married Evangeline Yuttikki, respondent, on May
18, 1972 while his marriage to Beatriz was still subsisting. On
_______________
1Penned by Associate Justice Perlita J. Tria-Tirona (retired) and concurred in by Associate Justice Eubolo
G. Verzola (deceased) and Associate Justice Bernardo P. Abesamis (retired), Annex “A” of the Petition, Rollo, pp.
40-48.
226
226 SUPREME COURT REPORTS ANNOTATED
Acre vs. Yuttikki
November 16, 1996, Sofronio died. His union with respondent lasted for more than 24
years.
a motor vehicle; (b) two parcels of land covered by Transfer Certificate of Title (TCT) No.
116740 in the name of “Evangeline Y. Acre, married to Sofronio V. Acre, Jr.”; (c) and TCT
No. 100087 registered in the names of “Evangeline Y. Acre, married to Sofronio V. Acre,
Jr. and Nellie Y. Del Mar, married to Jose Del Mar.”
Petitioners filed with the Regional Trial Court, Branch 58, Cebu City, a complaint for
reconveyance and recovery of properties and/or partition with damages. They alleged that
Sofronio alone acquired the subject properties with his funds.
In a Decision dated November 24, 1998, the trial court dismissed the complaint
concluding that the two parcels of land are owned in common by respondent and Sofronio.
Thereupon, petitioners filed a notice of appeal which was likewise dismissed by the Court
of Appeals in its Resolution of March 11, 2002 for lack of merit, finding that “In view of the
failure of the plaintiffs-appellants to prove by preponderance of evidence their entitlement
to the properties in question, the land covered by TCT No. 100087 is exclusively owned
by defendant-appellee and with respect to the property covered by TCT No. 116740, the
defendant-appellee co-owned such property with her sister Nellie Del Mar.”
Petitioners contend that the Court of Appeals erred in declaring respondent the owner
of the contested properties.
Undeniably, the marriage between respondent and Sofronio is bigamous considering
that their union was celebrated while he was still married to Beatriz. As such, their
property regime is covered by Article 148 of the Family Code providing that all properties
acquired by the parties out of their actual joint contribution of money, property, or industry
shall be governed by the rules on co-ownership. Hence, if there is no contribution from
2
either or both of the spouses, there can be no co-ownership. 3
Petitioners failed to present any evidence to establish that Sofronio made an actual
contribution in acquiring the contested properties. Clearly, co-ownership does not exist
here.
The Court of Appeals held:
“In the instant case, the property covered by TCT No. 100087 contains a recital that the property is
registered in the name of Evangeline Y. Acre, married to Sofronio V. Acre, Jr. On the other hand,
RCT No. 116740 shows that the property described therein was registered in the names of
Evangeline Y. Acre, married to Sofronio Acre, and Nellie Y. Del Mar, married to Jose Del Mar.
Therefore, the certificates of title on its face show that the disputed properties were exclusively
owned by defendant-appellee (with respect to TCT No. 100087) and co-owned by the defendant-
appellee with her sister Nellie (with regard to TCT No. 116740). The rule is well-settled that the
words “married to” preceding Sofronio Acre, Jr. are merely descriptive of the civil status of the
defendant-appellee.”
WHEREFORE, we DENY the instant petition and AFFIRM the assailed Decision of the
Court of Appeals in CA-G.R. CV No. 64656. Costs against petitioners.
SO ORDERED.
Puno (C.J., Chairperson), Corona, Azcuna and Garcia, JJ., concur.
Petition denied, assailed decision affirmed.
 VOL. 467, AUGUST 18, 2005 377
Philippine National Bank vs. Heirs of Estanislao Militar and Deogracias
Militar
G.R. No. 164801. August 18, 2005. *
PHILIPPINE NATIONAL BANK, petitioner, vs. HEIRS OF ESTANISLAO MILITAR
AND DEOGRACIAS MILITAR, represented by TRANQUILINA MILITAR, respondents.
G.R. No. 165165. August 18, 2005.
SPOUSES JOHNNY LUCERO AND NONA ARIETE, petitioners, vs. HEIRS OF
ESTANISLAO MILITAR, DEOGRACIAS MILITAR, and TRANQUILINA MILITAR
(deceased), now represented by AZUCENA MILITAR, FREDDIE MILITAR, EDUARDO
MILITAR, ROMEO L. MILITAR, NELLY LY BOLANIO, LETICIA LY and DELIA LY SI
ASOYCO, respondents.
_______________
* FIRST DIVISION.
378
378 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Heirs of Estanislao Militar and Deogracias
Militar
Actions; Pleadings and Practice; Indispensable Party; An indispensable party is one whose
interest will be affected by the court’s action in the litigation, and without whom no final
determination of the case can be had.—An indispensable party is one whose interest will be affected
by the court’s action in the litigation, and without whom no final determination of the case can be
had. The party’s 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. Conversely, a party is not indispensable to the suit if his
interest in the controversy or subject matter is distinct and divisible from the interest of the other
parties and will not necessarily be prejudiced by a judgment which does complete justice to the
parties in court. He is not indispensable if his presence would merely permit complete relief between
him and those already parties to the action or will simply avoid multiple litigation.
Same; Same; Same; There are two essential tests of an indispensable party.—There are two
essential tests of an indispensable party: (1) can relief be afforded the plaintiff without the presence
of the other party?; and, (2) can the case be decided on the merits without prejudicing the rights of
the other party? There is, however, no fixed formula for determining who is an indispensable party;
this can only be determined in the context and by the facts of the particular suit or litigation.
Same; Same; Reconveyance; In a co-ownership, the act of one benefits all the co-owners, unless
the former repudiates the co-ownership—thus, if the appellants herein prevail in the case for
reconveyance, it will also redound to the benefit of the other co-owners or co-heirs.—It should be
remembered, nevertheless, that the ultimate issue herein is the propriety of reconveyance and not
the shares of the respective heirs of the co-owners, the latter being determined in a case for partition.
An action for partition is the action where co-ownership is declared and the segregation and
conveyance of a determinate portion of the property is made. The heirs of the co-owners, (Glicerio,
Tomas and Caridad), if there are any, including the appellants herein may claim their respective
shares in an action for partition. Any claim of interest, by way of succession, from the co-
379
VOL. 467, AUGUST 18, 2005 379
Philippine National Bank vs. Heirs of Estanislao Militar and
Deogracias Militar
owners may be severed and proceeded with separately and a final determination in the action
for recoveyance can be had despite the non-inclusion of other heirs because the interest of the
respective heirs of the co-owners, may be severed. Corollary, the instant case, may proceed without
the other heirs, if there are any, because they are mere necessary parties. Moreover, in a co-
ownership, the act of one benefits all the co-owners, unless the former repudiates the co-ownership.
Thus, if the appellants herein prevail in the case for reconveyance, it will also redound to the benefit
of the other co-owners or co-heirs.
Same; Same; Appeals; Certiorari; Whether petitioners are innocent mortgagee or purchasers in
good faith and for value, is a factual matter, which cannot be raised in a petition for review on
certiorari under Rule 45.—Whether petitioners are innocent mortgagee or purchasers in good faith
and for value, is a factual matter, which cannot be raised in a petition for review on certiorari under
Rule 45. Settled is the rule that this Court is not a trier of facts and does not normally embark on a
re-examination of the evidence adduced by the parties during trial. In Heirs of the Late Spouses
Aurelio and Esperanza Balite v. Lim, we held that factual findings of the Court of Appeals are binding
and conclusive upon us. These findings may be reviewed only under exceptional circumstances such
as when the inference is manifestly mistaken; the judgment is based on a misapprehension of facts;
findings of the trial court contradict those of the appellate court; or the latter manifestly overlooked
relevant and undisputed facts that, if properly considered, would justify a different conclusion.
Same; Same; Laches; Laches cannot be set up to resist the enforcement of an imprescriptible
legal right; thus, respondents can validly vindicate their inheritance despite the lapse of time.—
Laches is a doctrine in equity which has been aptly described as “justice outside legality,” and applied
only in the absence of, and never against, statutory law. Aequetas nunguam contravenit legis.The
positive mandate of Art. 1410 of the Civil Code conferring imprescriptibility to actions or defense for
the declaration of the inexistence of a contract should pre-empt and prevail over all abstract
arguments based only on equity. Certainly, laches cannot be set up to resist the enforcement of an
imprescriptible legal right; thus, respondents can validly vindicate their inheritance despite the
lapse of time.
380
380 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Heirs of Estanislao Militar and Deogracias
Militar
PETITIONS for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
The Chief Legal Counsel for PNB.
Norberto J. Posecion for Sps. Lucero.
Banzon, Gloria & Gumban Law Offices collaborating counsel for Sps. Lucero.
 Alfredo M. Bañares for Heirs of Militar, etc.
YNARES-SANTIAGO, J.:
These consolidated petitions for review under Rule 45 of the Revised Rules of Civil
Procedure assail the June 4, 2004 decision of the Court of Appeals in CA-G.R. CV No.
1 Teodorico and Deogracias Militar, filed a complaint against spouses Jalbuna, PNB, and
54831, which reversed the decision of the Regional Trial Court of Iloilo City, Branch 38, in
Civil Case No. 18836, and its August 4, 2004 resolution denying reconsideration thereof.
The facts are as follows:
Deogracias, Glicerio, Tomas and Caridad, all surnamed Militar, were heirs of
Estanislao Militar and the registered co-owners of Lot Nos. 3011 and 3017 covered by OCT
No. T-8238-A (0-16879) and OCT No. 94-(0-16878).
On August 16, 1941, Deogracias sold his undivided share in Lot No. 3011 to Pedro
Golez, and in Lot No. 3017 to spouses Sofronio and Lourdes Lumagbas. Golez annotated
the sale at the back of the title thereof while spouses Lumagbas caused the subdivision of
Lot No. 3017 into Lot No. 3017-A and Lot No. 3017-B, with Lot No. 3017-A registered in
their names under TCT No. 8239.
_______________
1Rollo in G.R. No. 164801, pp. 35-47. Penned by Associate Justice Mercedes Gozo-Dadole and concurred in
by Associate Justices Monina Arevalo Zenarosa and Vicente L. Yap.
381
VOL. 467, AUGUST 18, 2005 381
Philippine National Bank vs. Heirs of Estanislao Militar and Deogracias
Militar
Notwithstanding the sale, Deogracias continued to occupy a portion of Lot No. 3011 and
Lot No. 3017-B until his death on March 17, 1964. Glicerio died on March 22, 1939, Tomas
on August 20, 1959 and Caridad on April 29, 1957. Glicerio and Caridad died without issue.
Deogracias was survived by Teodorico and Remedios, while Tomas was survived by
Wenceslao and Ladislao.
However, in a Deed of Absolute Sale dated April 24, 1975, Deogracias, Glicerio, Tomas
and Caridad purportedly sold Lot No. 3011 to spouses Rodolfo and Nilda Jalbuna. In
another Deed of Sale dated April 25, 1975, Glicerio, Tomas and Caridad purportedly sold
Lot No. 3017-B to the same spouses. Consequently, titles to Lot Nos. 3011 and 3017-B were
cancelled and new titles, TCT Nos. 39083 and 39082, respectively, were issued to spouses
Jalbuna.
Subsequently, Lot No. 3011 was subdivided into Lot No. 3011-A and Lot No. 3011-B,
with Lot No. 3011-A registered in the name of spouses Jalbuna and Lot No. 3011-B in the
name of Golez.
On June 5, 1975, spouses Jalbuna mortgaged Lot No. 3017-B to Philippine National
Bank (PNB) as security for a loan. When they defaulted, PNB extrajudicially foreclosed
the mortgage and sold Lot No. 3017-B at public auction, with PNB as the highest bidder.
Title thereto was consolidated in the name of PNB and was issued TCT No. T-61465.
Thereafter, PNB sold the lot to spouses Johnny and Nona Lucero, who were issued TCT
No. 76938. As the new owners of Lot No. 3017-B, they filed an ejectment case against
Tranquilina, Azucena, Freddie and Eduardo, all surnamed Militar, the actual occupants
therein.
On October 2, 1989, Tranquilina, Azucena, Freddie and Eduardo as surviving heirs of
spouses Lucero for Reconveyance of Title, Annulment of Sale, Cancellation of Titles and
Damages. Other heirs of Deogracias on the side of Remedios filed a complaint-in-
intervention
382
382 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Heirs of Estanislao Militar and Deogracias
Militar
to join the plaintiffs. They prayed for: 1) the declaration of nullity of the two (2) deeds of
sale dated April 24, 1975 and April 25, 1975 covering Lot No. 3011 and Lot No. 3017-B,
respectively; 2) the cancellation of title covering Lot No. 3017-B in the name of spouses
Lucero; 3) the cancellation of title covering Lot No. 3011-A in the name of spouses Jalbuna;
4) the reconveyance of Lot 3011-A and Lot No. 3017-B to the heirs of Deogracias Militar;
and 5) actual, exemplary and moral damages. 2
Spouses Jalbuna invoked prescription, non-inclusion of indispensable parties and lack
of cause of action since their predecessor, Deogracias, no longer had interest over the
properties having sold them to third parties.
PNB claimed that it was a mortgaee in good faith and for value; that the title of spouses
Jalbuna was free from all liens and encumbrances when they secured the loan; and that it
conducted verification and inspection of the property before granting the loan.
Spouses Lucero alleged that the complaint was commenced without the real party in
interest; that the cause of action has prescribed; and that they were innocent purchasers
in good faith and for value.
The trial court rendered a decision dated October 18, 1995, dismissing the complaint,
3
complaint-in-intevention, as well as the cross claim of PNB. It held that the case was not
brought in the name of all indispensable parties and although the two (2) deeds of sale
were void for being simulated or fictitious, their nullity cannot be invoked against PNB
and spouses Lucero because they were buyers in good faith. It found that the action for
reconveyance had prescribed as it was filed more than fourteen (14) years from the
execution of the Deeds of Sale covering the disputed properties. An action for recon-
_______________
Rollo in G.R. No. 165165, pp. 93-94.
2
3 Rollo in G.R. No. 164801, pp. 51-61. Penned by Presiding Judge David A. Alfeche, Jr.
383
VOL. 467, AUGUST 18, 2005 383
Philippine National Bank vs. Heirs of Estanislao Militar and Deogracias
Militar
veyance prescribes after ten (10) years from the issuance of title, which operates as a
constructive notice.
On appeal, the Court of Appeals reversed the decision of the trial court. It held that
ultimate issue is the propriety of reconveyance and not the shares of the respective heirs
which is proper in a case for partition. Thus, a final determination of the case can be had
despite non-inclusion of other heirs because their interests may be severed and proceeded
with separately. Further, it held that PNB and spouses Lucero were not buyers in good
faith; and that the action for reconveyance based on implied trust does not prescribe. The
dispositive portion reads as follows:
“WHEREFORE, premises considered, the Decision dated October 18, 1995, of the Regional Trial
Court of Iloilo City, Sixth Judicial Region, Branch 38, in Civil Case No. 18836, is hereby REVERSED
and SET ASIDE. The Certificate of Title covering Lot 3011-A in the names of Spouses Jalbuna and
the Certificate of Title covering Lot 3017-B in the names of Spouses Lucero-Ariete are hereby
declared null and void. Spouses Jalbuna and Spouses Lucero-Ariete are directed to reconvey the
subject properties to its original owners, namely Glicerio, Tomas and Caridad, as the undivided
property, of the aforestated co-owners.
SO ORDERED.” 4
Hence, the instant consolidated petitions, the resolution of which hinges on three pivotal
questions: 1) whether or not the case was brought by all indispensable parties; 2) whether
or not petitioners PNB and spouses Lucero were mortgagee and purchasers in good faith,
respectively; and 3) whether or not action for reconveyance has prescribed or is barred by
laches.
We are not persuaded by PNB’s claim that the case was not brought by all
indispensable parties as other heirs of Glicerio, Tomas and Caridad have not been named
as parties therein.
_______________
4 Id., at p. 47. 383
384
384 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Heirs of Estanislao Militar and Deogracias
Militar
An indispensable party is one whose interest will be affected by the court’s action in the
litigation, and without whom no final determination of the case can be had. The party’s
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. 5
Conversely, a party is not indispensable to the suit if his interest in the controversy or
subject matter is distinct and divisible from the interest of the other parties and will not
necessarily be prejudiced by a judgment which does complete justice to the parties in court.
He is not indispensable if his presence would merely permit complete relief between him
and those already parties to the action or will simply avoid multiple litigation. 6
There are two essential tests of an indispensable party: (1) can relief be afforded the
plaintiff without the presence of the other party?; and, (2) can the case be decided on the
merits without prejudicing the rights of the other party? There is, however, no fixed
formula for determining who is an indispensable party; this can only be determined in the
context and by the facts of the particular suit or litigation. 7
In the case at bar, the ultimate relief sought by the action is the reconveyance of titles
to their rightful owners. The records reveal that prior to the forgery, the disputed
properties were registered in the names of the co-owners, Glicerio, Tomas and Caridad,
whose interests remained undivided. Thus, if reconveyance of the titles is granted, the
titles will
_______________
5 Bank of the Philippine Islands v. Court of Appeals, 450 Phil. 532, 541; 402 SCRA 449, 455 (2003).
6 Id.
7 Republic v. Sandiganbayan, G.R. No. 152154, 15 July 2003, 406 SCRA 190, 269-270.
385
VOL. 467, AUGUST 18, 2005 385
Philippine National Bank vs. Heirs of Estanislao Militar and Deogracias
Militar
revert back to the estates of the deceased co-owners and not to their individual heirs, whose
interests are divisible and may properly be ventilated in another proceeding. Therefore, a
co-heir may bring such action without necessarily joining all the other co-heirs as co-
plaintiffs because the suit is deemed to be instituted for the benefit of all. As correctly held
by the Court of Appeals:
“It should be remembered, nevertheless, that the ultimate issue herein is the propriety of
reconveyance and not the shares of the respective heirs of the co-owners, the latter being determined
in a case for partition. An action for partition is the action where co-ownership is declared and the
segregation and conveyance of a determinate portion of the property is made. The heirs of the co-
owners, (Glicerio, Tomas and Caridad), if there are any, including the appellants herein may claim
their respective shares in an action for partition. Any claim of interest, by way of succession, from
the co-owners may be severed and proceeded with separately and a final determination in the action
for recoveyance can be had despite the non-inclusion of other heirs because the interest of the
respective heirs of the co-owners, may be severed. Corollary, the instant case, may proceed without
the other heirs, if there are any, because they are mere necessary parties. Moreover, in a co-
ownership, the act of one benefits all the co-owners, unless the former repudiates the co-ownership.
Thus, if the appellants herein prevail in the case for reconveyance, it will also redound to the benefit
of the other co-owners or co-heirs.” 8
PNB next argues that since Deogracias sold his shares in the disputed lots, his heirs,
herein respondents, do not have a cause of action against it, spouses Jalbuna and spouses
Lucero.
This argument is proper had Deogracias died ahead of the other co-owners. However,
records show that Glicerio, Tomas and Caridad predeceased Deogracias. Glicerio died on
March 22, 1939, Tomas on August 20, 1959, Caridad on April 29, 1957, while Deogracias
died on March 17, 1964.
_______________
 8 Rollo in G.R. No. 164801, pp. 43-44; citations omitted.
386
386 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Heirs of Estanislao Militar and Deogracias
Militar
Article 1003 of the Civil Code provides:
Art. 1003. If there are no descendants, ascendants, illegitimate children, or a surviving spouse, the
collateral relatives shall succeed to the entire estate of the deceased in accordance with the following
articles.
Clearly, when Glicerio and Caridad died intestate and without issue, their shares in the
disputed properties were inherited by Deogracias and Tomas. It is this portion that
respondents, as heirs of Deogracias, have an interest on and which vested them with
personality to institute the present case.
PNB and spouses Lucero claim to be mortgagee and buyers in good faith, respectively,
since title to Lot No. 3017-B appeared to be free from any encumbrance. They argue that
a person dealing with a registered land may rely on the correctness of the certificate of title
and is not required to go beyond it to determine the condition of the property.
Whether petitioners are innocent mortgagee or purchasers in good faith and for value,
is a factual matter, which cannot be raised in a petition for review on certiorari under Rule
45. Settled is the rule that this Court is not a trier of facts and does not normally embark
9
on a re-examination of the evidence adduced by the parties during trial. In Heirs of the
10
Late Spouses Aurelio and Esperanza Balite v. Lim, we held that factual findings of the
11
Court of Appeals are binding and conclusive upon us. These findings may be reviewed only
under exceptional circumstances such as when the inference is manifestly mistaken; the
judgment is based on a misapprehension of facts; findings of the trial court contradict those
of
the appellate court; or the latter manifestly overlooked relevant and undisputed facts that,
if properly considered, would justify a different conclusion.
The Court of Appeals reversed the decision of the trial court based on its findings of
facts which are in accord with the documents on record. Thus, we affirm the Court of
Appeals’ finding that petitioners were not mortgagee or buyers in good faith.
Moreover, the burden of proving the status of a purchaser in good faith and for value
lies upon him who asserts that status. In discharging the burden, it is not enough to invoke
12
the ordinary presumption of good faith. The rule is settled that a buyer of real property in
13
possession of persons other than the seller must be wary and should investigate the rights
of those in possession. Without such inquiry, the buyer can hardly be regarded as buyer in
good faith and cannot have any right over the property. 14
PNB claims that it conducted the necessary inquiry and investigation on the subject lot
and was convinced that Nilda Jalbuna, as one of the heirs of Estanislao Militar, had every
right to mortgage the same, even if she was not in actual possession thereof.
However, considering that the land was in the possession of persons other than the
mortgagors, PNB should have inquired whether the possessors knew that the lot is being
mortgaged, and the circumstances surrounding the acquisition of the lot by the
mortgagors. Indeed, while PNB is not expected to conduct an exhaustive investigation on
the history of the mortgagor’s title, it cannot be excused from the duty of
388
exercising the due diligence required of a banking institution. In Tomas v. Tomas, we 15
noted that it is standard practice for banks, before approving a loan, to send
representatives to the property offered as collateral to assess its actual condition and to
investigate who are the real owners thereof. We held that banks are expected to exercise
more care and prudence than private individuals in their dealings, even those involving
registered lands, for their business is affected with public interest. Verily, PNB was remiss
in the exercise of due diligence required of a banking institution, hence it cannot be
considered as mortgagee in good faith.
Neither could spouses Lucero be considered buyers in good faith. As respondents’
neighbors, they could have verified the status of the property they were buying by
inquiring from the possessors thereof. This, they failed to do; hence they cannot be
considered buyers in good faith.
As to whether the action for reconveyance has prescribed, we held in Santos v.
Santos, citing Lacsamana v. CA, that the right to file an action for reconveyance on the
16 17
ground that the certificate of title was obtained by means of a fictitious deed of sale is
virtually an action for the declaration of its nullity, which does not prescribe.
In the case at bar, the complaint filed was for the reconveyance of the properties in
question to the estates of Deogracias, Glicerio, Tomas and Caridad, considering that the
deeds of sale were simulated and fictitious. The complaint thus amounts to an action for
declaration of nullity of a void contract, which does not prescribe.
Neither could laches be successfully invoked. Laches is a doctrine in equity which has
been aptly described as “justice
_______________
outside legality”, and applied only in the absence of, and never against, statutory
law. Aequetas nunguam contravenit legis. The positive mandate of Art. 1410 of the Civil
Code conferring imprescriptibility to actions or defense for the declaration of the
inexistence of a contract should pre-empt and prevail over all abstract arguments based
only on equity. Certainly, laches cannot be set up to resist the enforcement of an
imprescriptible legal right; thus, respondents can validly vindicate their inheritance
despite the lapse of time.18
Finally, while certificates of title are indefeasible, unassailable and binding against the
whole world, they merely confirm or record title already existing and vested. They cannot
be used to protect a usurper from the true owner, nor can they be used for the perpetration
of fraud; neither do they permit one to enrich himself at the expense of others. 19
WHEREFORE, the petitions are DENIED. The decision of the Court of Appeals dated
June 4, 2004 in CA-G.R. CV No. 54831 and its resolution dated August 4, 2004, are hereby
AFFIRMED in toto.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Quisumbing, Carpioand Azcuna, JJ., concur.
Petitions denied, judgment and resolution affirmed in toto.
 G.R. No. 151016. August 6, 2008.* Same; The absence of an indispensable party renders all subsequent actions of the court null
SPOUSES SOFRONIO SANTOS and NATIVIDAD SANTOS, FROILAN SANTOS, and void for want of authority to act, not only as to the absent parties but even as to those present.—
CECILIA M. MACASPAC, and R TRANSPORT CORPORATION, petitioners, vs. HEIRS If the action is for the benefit of the plaintiff alone, as in Civil Case No. 1330, the action will not
prosper unless he impleads the other co-owners who are indispensable parties. The absence of an
OF DOMINGA LUSTRE, namely TARCISIO MANIQUIZ, TERESITA BURGOS,
indispensable party renders all subsequent actions of the court null and void for want of authority
FLORITA M. REYES and LERMIE MANIQUIZ, respondents.
to act, not only as to the absent parties but even as to those present. The trial court does not acquire
Forum Shopping; Forum shopping exists when the elements of litis pendentia are present or jurisdiction over the indispensable parties who are not impleaded in the case, and judgment thereon
when a final judgment in one case will amount to res judicata in the other.—Forum shopping exists cannot be valid and binding against them. A122
when the elements of litis pendentia are present or when a final judgment in one case will amount
decision that is null and void for want of jurisdiction on the part of the trial court is not a
to res judicata in the other. Among its elements are identity of the parties, identity of the subject
decision in contemplation of law; hence, it can never become final and executory.
matter and identity of the causes of action in the two cases.
Same; Worth mentioning is the doctrine that any adverse ruling in the earlier case will not, in
Civil Procedure; Causes of Action; There is identity of causes of action if the same evidence
any way, prejudice the heirs who did not join, even if such case was actually filed in behalf of all the
needed in the first case will sustain the second action, and this principle applies even if the reliefs
co-owners.—Worth mentioning is the doctrine that any adverse ruling in the earlier case will not, in
sought in the two cases are different.—The causes of action in Civil Case No. 1330 and Civil Case No.
any way, prejudice the heirs who did not join, even if such case was actually filed in behalf of all the
2115 are identical. There is identity of causes of action if the same evidence needed in the first case
co-owners. In fact, if an action for recovery of property is dismissed, a subsequent action by a co-heir
will sustain the second action, and this principle applies even if the reliefs sought in the two cases
who did not join the earlier case should not be barred by prior judgment. Any judgment of the court
are different. Without a doubt, the same evidence will be necessary to sustain the causes of action in
in favor of the co-owner will benefit the others, but if the judgment is adverse, the same cannot
these two cases which are substantially based on the same series of transactions. In fact, similar
prejudice the rights of the unimpleaded co-owners.
reliefs are prayed for in the two cases. Both complaints ultimately seek the cancellation of the title
Land Titles; Reconveyance; The action for reconveyance on the ground that the certificate of title
of the alleged transferees and the recovery of the subject property.
was obtained by means of a fictitious deed of sale is virtually an action for the declaration of its nullity,
Ownership; The fact of being a co-owner does not necessarily mean that a plaintiff is acting for
which does not prescribe.—On the issue of prescription and laches, we fully agree with the CA. The
the benefit of the co-ownership when he files an action respecting the co-owned property.—As pointed
action for reconveyance on the ground that the certificate of title was obtained by means of a fictitious
out by petitioners, plaintiffs in both cases are the heirs of Dominga Lustre; they are therefore co-
deed of sale is virtually an action for the declaration of its nullity, which does not prescribe. Moreover,
owners of the property. However, the fact of being a co-owner does not necessarily mean that a
a person acquiring property through fraud becomes, by operation of law, a trustee of an implied trust
plaintiff is acting for the benefit of the co-ownership when he files an action
_______________
for the benefit of the real owner of the property. An action for reconveyance based on an implied trust
prescribes in ten years. And in such case, the prescriptive period applies only if there is an actual
* THIRD DIVISION. need to reconvey the property as when the plaintiff is not in possession of the property. Otherwise,
if plaintiff is in possession of the property, prescription does not commence to run against him. Thus,
121 when an action for reconveyance is nonetheless filed, it would be in the nature of a suit for quieting
of title, an action that is imprescriptible.
respecting the co-owned property. Co-owners are not parties inter se in relation to the property
Same; Same; It is true that an action for reconveyance will not prosper when the property to be
owned in common. The test is whether the “additional” party, the co-owner in this case, acts in the
reconveyed is in the hands of an innocent purchaser for value.—It is true that an action for
same capacity or is in privity with the parties in the former action.
reconveyance will not prosper when the property sought to be reconveyed is in the hands of an
Parties; The issue of whether the additional parties are indispensable parties or not acquires
innocent purchaser for value. In this case, however, the protection of the rights of any alleged
real significance only when considering the validity of the judgment that will be rendered in the earlier
innocent purchaser is123
case.—The determination of whether there is identity of parties rests on the commonality of the
parties’ interest, regardless of whether they are indispensable parties or not. The issue of whether a matter that should be threshed out in the main case and not in these proceedings.
the additional parties are indispensable parties or not acquires real significance only when
considering the validity of the judgment that will be rendered in the earlier case. This is so, because PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
if the additional parties are indispensable parties, then no valid judgment can be rendered against The facts are stated in the opinion of the Court.
them in the earlier case in which they did not participate, and this will foreclose the application of res Gaspar V. Tagalo and Rom-Voltaire C. Quizon for petitioners.
judicata which requires the existence of a final judgment.
Ricardo C. Valmonte for respondents.
Same; A co-owner may bring an action to recover the co-owned property without the necessity of
joining all the other co-owners as co-plaintiff because the suit is deemed to be instituted for the benefit NACHURA, J.:
of all.—Without question, a co-owner may bring an action to recover the co-owned property without This petition for review seeks the reversal of the Court of Appeals (CA) Decision1 dated
the necessity of joining all the other co-owners as co-plaintiffs because the suit is deemed to be
August 23, 2001, and Resolution dated December 10, 2001, which denied petitioners’
instituted for the benefit of all. In such case, the other heirs are merely necessary parties.
Parenthetically, the inclusion among the defendants of Cecilia Macaspac, who refused to join the Motion to Dismiss Civil Case No. 2115, an action for Annulment of Transfer Certificate of
other heirs as plaintiffs in Civil Case No. 2115, was not actually necessary. Title and Deed of Absolute Sale.
 The facts, as borne by the records, are as follows:
Dominga Lustre, who died on October 15, 1989, owned a residential lot which is located
in San Antonio, Nueva Ecija, with an area of 390 square meters, and covered by Transfer
Certificate of Title (TCT) No. NT-50384. On September 20, 1974, Dominga Lustre
mortgaged the lot to spouses Sofronio and Natividad Santos (spouses Santos) for
P38,000.00.2
On May 16, 1976, Dominga Lustre sold the property to Natividad M. Santos for
P15,000.00 through a Deed of Absolute Sale.3 The mortgage appears to have been canceled
on March 20, 1976.4 The cancellation of the mortgage and the sale of the
_______________
property were both inscribed at the back of TCT No. NT-50384 on April 17, 1984.
As a result of the sale, TCT No. NT-50384 was canceled and TCT No. NT-183029 was
issued in the name of the spouses Santos. Subsequently, the latter executed a Deed of Sale
transferring the property to their son, Froilan M. Santos (petitioner). By virtue of this deed,
TCT No. NT-183029 was canceled and TCT No. 193973 5 issued in the name of Froilan
Santos.
On April 14, 1994, Cecilia Macaspac (also a petitioner) and Tarcisio Maniquiz, both
heirs of Dominga Lustre, filed with the Regional Trial Court (RTC) of Gapan, Nueva Ecija,
a Complaint for Declaration of the Inexistence of Contract, Annulment of Title,
Reconveyance and Damages6against Froilan M. Santos. That case was docketed as Civil
Case No. 1330. Later, the plaintiffs sought the amendment of the complaint to include
Eusebio Maniquiz as plaintiff and to include a certification against forum shopping.
However, the records in this case are bereft of any information as to whether the same was
allowed by the trial court.7 We note, however, that only Cecilia Macaspac executed a
Verification and Certification against Forum Shopping8 in that case.
According to the Amended Complaint in Civil Case No. 1330, plaintiffs Cecilia and Tarcisio
are the legitimate children, while Eusebio is the spouse of Dominga Lustre, who allegedly
left them the subject property when she died on October 15, 1989. They averred that the
sale of the property to Natividad Santos was simulated, spurious or fake, and that they
discovered that spouses Santos transferred the property to Froilan Santos when the latter
filed an ejectment suit against them. Thereafter, Froilan Santos, through fraud and
_______________
deceit, succeeded in transferring the property. On the mistaken belief that the sale
between Dominga Lustre and Natividad Santos occurred on April 17, 1984, plaintiffs
prayed that the trial court issue judgment—
“1. Ordering the inexistence of sale dated April 17, 1984 between Dominga Lustre and
Natividad Santos and subsequent thereto;
2. Ordering the cancellation of TCT No. NT-193973 in favor of defendant and reconvey the same
to the plaintiff;
3. Ordering the defendant to pay plaintiffs the sum of P20,000.00 as attorney’s fee, P20,000.00
as moral damages; P20,000.00 as litigation expenses; P20,000.00 as exemplary damages;
4. Ordering defendant to pay the cost of the suit;
5. General relief[s] are likewise prayed for in the premises.” (Emphasis ours.)
9 Supplemental Motion to Dismiss for lack of merit. 15 On April 5, 2000, the RTC denied the
On September 12, 1994, the RTC, Branch 87, to which Civil Case No. 1330 was raffled,
ordered the records of the case to be referred to the municipal trial court for adjudication
on the ground that the assessed value of the subject property was below the amount within
its jurisdiction.10
On May 14, 1999, while Civil Case No. 1330 was still pending, Dominga Lustre’s other
heirs, namely, Eusebio Maniquiz, Teresita Burgos, Tarcisio Maniquiz, Florita M. Reyes
and Lermie Maniquiz filed a Complaint for Annulment of Transfer Certificate of Title and
Deed of Absolute Sale11 against spouses Sofronio and Natividad Santos, Froilan Santos,
Cecilia M. Macaspac, R Transport Corporation, and the Register of Deeds of Cabanatuan
City, with the same RTC. Cecilia Macaspac, plaintiff in Civil Case No. 1330, was impleaded
as defendant because she refused to join the other heirs as plain-
tiffs. The case was docketed as Civil Case No. 2115 and was raffled to Branch 34.
The complaint alleged that the spouses Santos simulated the Deed of Sale dated May
16, 1976 by forging Dominga Lustre’s signature; that thereafter, the spouses Santos
simulated another Deed of Sale transferring the property to Froilan Santos, which led to
the issuance of TCT No. 193973 in his name; that this title became the basis of Froilan’s
ejectment suit against them; and that R Transport Corporation (also a petitioner), was
claiming that it bought the property from Froilan but there was no evidence to prove such
claim. According to the plaintiffs (herein respondents), they had been residing in the
property since birth and the house standing on the lot was built by their ancestors. They
posited that the transferees of the property could not be considered as buyers in good faith.
The complaint prayed that judgment be rendered:
“a. Annulling and declaring null and void the Deed of Absolute Sale, Annex “C” hereof; that
between spouses Santos and their son Froilan; and that purportedly between defendant Froilan and
defendant corporation;
b. Annulling and declaring null and void Transfer Certificate of Title No. NT-183029 appearing
to be in the name of defendant spouses; TCT No. NT-193973 in the name of defendant Froilan M.
Santos and Transfer Certificate of Title, if any, in the name of defendant corporation;
c. Reinstating Transfer Certificate of Title No. NT-50384 in the name of Dominga Lustre and
directing the Register of Deeds to do so or to issue [a] new one in the name of the deceased Dominga
Lustre and canceling all titles mentioned in the immediately preceding paragraph which [were] made
to cancel Lustre’s title;
d. Ordering defendants, jointly and severally, to pay plaintiffs the following:
1.) Moral damages of P200,000.00;
2.) Exemplary damages of P100,000.00;
3.) Attorney’s fee of P50,000.00, plus cost of suit. 127
Plaintiffs further pray for such other affirmative reliefs as are deemed just and equitable in the
premises.”12
Alleging that the plaintiffs’ right of action for annulment of the Deed of Sale and TCT
Nos. 183029 and 193973 had long prescribed and was barred by laches, petitioners filed a
Motion to Dismiss Civil Case No. 2115.13 They later filed an Omnibus/Supplemental Motion
to Dismiss on the ground of litis pendentia.14
On January 11, 2000, the RTC denied the Motion to Dismiss as well as the
Joint Motion for Reconsideration filed by petitioners.16
 They then filed a petition for certiorari with the Court of Appeals (CA), assailing the
denial of their motion to dismiss. On August 23, 2001, the CA dismissed the petition for
lack of merit based on its finding that the RTC did not commit grave abuse of discretion in
denying the motion to dismiss.17 On December 10, 2001, the CA denied petitioners’ motion
for reconsideration.18
In the assailed decision, the CA pronounced that the respondents were not guilty of
forum shopping. There was no identity of parties because Cecilia Macaspac, who was a
plaintiff in Civil Case No. 1330, was a defendant in Civil Case No. 2115; and there was
only one defendant in Civil Case No. 1330, while there were several additional defendants
in Civil Case No. 2115. Moreover, the reliefs demanded in the two cases differed. In Civil
Case No. 1330, plaintiffs were seeking the declaration of the inexistence of a sale dated
April 17,
_______________
1984, cancellation of Froilan M. Santos’ certificate of title, and the reconveyance of the
property to plaintiffs. On the other hand, plaintiffs in Civil Case No. 2115 were praying for
the annulment of the Deed of Absolute Sale dated May 16, 1976, cancellation of TCT No.
NT-183029 and the succeeding TCTs, and reinstatement of TCT No. NT-50384 in the name
of Dominga Lustre.19
On the issue of prescription and laches, the CA declared that an action for the
declaration of the inexistence of a contract does not prescribe, and laches could not have
set in since there was no unreasonable delay in the filing of the case.20
In this petition for review, the sole issue submitted for resolution is whether the RTC
committed grave abuse of discretion in not dismissing the case based on forum shopping
and prescription or laches.21
The petition has no merit. The RTC did not commit grave abuse of discretion in denying
petitioners’ motion to dismiss.
Forum shopping exists when the elements of litis pendentia are present or when a final
judgment in one case will amount to res judicata in the other.22 Among its elements are
identity of the parties, identity of the subject matter and identity of the causes of action in
the two cases.23
The dispute in this case centers on whether there exist identity of causes of action and
identity of parties between Civil Case No. 1330 and Civil Case No. 2115.
Concededly, the causes of action in Civil Case No. 1330 and Civil Case No. 2115 are
identical. There is identity of causes of action if the same evidence needed in the first case
_______________
will sustain the second action, and this principle applies even if the reliefs sought in the
two cases are different.24Without a doubt, the same evidence will be necessary to sustain
the causes of action in these two cases which are substantially based on the same series of
transactions. In fact, similar reliefs are prayed for in the two cases. Both complaints
ultimately seek the cancellation of the title of the alleged transferees and the recovery of
the subject property.
Despite this similarity, however, we hold that respondents are not guilty of forum
shopping because the element of identity of parties is not present.
In insisting that the parties are identical, petitioners stress that all the plaintiffs are
heirs of Dominga Lustre, while the defendants are past and present holders of the
certificates of title covering the subject property. They argue that Cecilia Macaspac’s being
a defendant in the second case does not change whatever interest she has in the former
case, considering that she is an indispensable party in both cases. They posit that
additional parties will not prevent the application of the rule on res judicata.25
While we agree with the CA that there is no identity of parties in the two cases, we do
not agree with the rationale behind its conclusion. To recall, the CA ratiocinated that there
was no identity of parties because Cecilia Macaspac, while a plaintiff in Civil Case No.
1330, is a defendant in Civil Case No. 2115, and there are several additional defendants
in Civil Case No. 2115.
The CA appears to have overlooked the principle that what is required is only
substantial, and not absolute, identity of parties. There is substantial identity of parties
when there is a community of interest between a party in the first case and a party in the
second case, even if the latter was not im-
_______________
24 Korea Exchange v. Gonzales, G.R. Nos. 142286-87, April 15, 2005, 456 SCRA 224, 244.
25 Rollo, p. 348.
130
pleaded in the first case.26 Moreover, the fact that the positions of the parties are
reversed, i.e., the plaintiffs in the first case are the defendants in the second case, or vice
versa, does not negate the identity of parties for purposes of determining whether the case
is dismissible on the ground of litis pendentia.27
Following these legal principles, it appears that there is identity of parties in the two
cases. However, a closer look at the facts and a deeper understanding of pertinent
jurisprudence will lead to a different conclusion: there is actually no identity of parties
because the plaintiff in Civil Case No. 1330 does not, in fact, share a common interest with
the plaintiffs in Civil Case No. 2115.
As pointed out by petitioners, plaintiffs in both cases are the heirs of Dominga Lustre;
they are therefore co-owners of the property. However, the fact of being a co-owner does
not necessarily mean that a plaintiff is acting for the benefit of the co-ownership when he
files an action respecting the co-owned property. Co-owners are not parties inter se in
relation to the property owned in common. The test is whether the “additional” party, the
co-owner in this case, acts in the same capacity or is in privity with the parties in the
former action.28
Notably, plaintiff Cecilia Macaspac in Civil Case No. 1330 filed the complaint seeking
the reconveyance of the property to her, and not to Dominga Lustre or her heirs. This is a
clear act of repudiation of the co-ownership which would negate a conclusion that she acted
in privity with the other heirs or that she filed the complaint in behalf of the co-ownership.
In contrast, respondents were evidently acting for the benefit of the co-ownership when
they filed the complaint in Civil Case
_______________
26 Sendon v. Ruiz, 415 Phil. 376, 385; 363 SCRA 155, 163 (2001).
 27 Agilent Technologies Singapore (PTE) Ltd. v. Integrated Silicon Technology Philippines Corporation, G.R.
No. 154618, April 14, 2004, 427 SCRA 593, 602
28 Nery v. Leyson, supra note 23, at p. 655; p. 241.
No. 2115 wherein they prayed that TCT No. NT-50384 in the name of Dominga Lustre be
reinstated, or a new certificate of title be issued in her name.
The petitioners and respondents have squabbled over whether the additional parties in
the second case are indispensable or necessary parties on the assumption that the proper
characterization of the parties will have a bearing on the determination of the existence of
identity of parties. In support of their position, the petitioners cite Juan v. Go Cotay29 when
they theorize that “there is still identity of parties although in the second action there is
one party who was not joined in the former action, if it appears that such party is not a
necessary party either in the first or in the second action.”30
We note, however, that the party who was not impleaded in Go Cotay was, technically
speaking, a necessary party (as opposed to an indispensable party as defined under the
Rules of Court), being the plaintiff’s wife who also had an interest in the case. Possibly,
and, indeed, it seems probable that the petitioners may not have used the term “necessary
party” in the strict legal sense. They could really have been referring to an “indispensable
party.” In challenging petitioners’ allegation, respondents obviously understood the
statement as referring to an indispensable party. They were, therefore, quick to point out
that the additional plaintiffs in Civil Case No. 2115 are indispensable parties, being co-
owners of the property.31
By this debate, the parties have only muddled the issue. The determination of whether
there is identity of parties rests on the commonality of the parties’ interest, regardless of
whether they are indispensable parties or not. The issue of whether the additional parties
are indispensable parties or not acquires real significance only when considering the valid-
_______________
ity of the judgment that will be rendered in the earlier case. This is so, because if the
additional parties are indispensable parties, then no valid judgment can be rendered
against them in the earlier case in which they did not participate, and this will foreclose
the application of res judicata which requires the existence of a final judgment.
Without question, a co-owner may bring an action to recover the co-owned property
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. In such case, the other heirs are merely
necessary parties. Parenthetically, the inclusion among the defendants of Cecilia
Macaspac, who refused to join the other heirs as plaintiffs in Civil Case No. 2115, was not
actually necessary.
However, if the action is for the benefit of the plaintiff alone, as in Civil Case No. 1330,
the action will not prosper unless he impleads the other co-owners who are indispensable
parties.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 The trial court does not acquire jurisdiction over the indispensable parties
who are not impleaded in the case, and judgment thereon cannot be valid and binding
against them. A decision that is null and void for want of jurisdiction on the part of the
trial court is not a decision in contemplation of law; hence, it can never become final and
executory.34
Worth mentioning is the doctrine that any adverse ruling in the earlier case will not,
in any way, prejudice the heirs who did not join, even if such case was actually filed in
behalf
_______________
of all the co-owners. In fact, if an action for recovery of property is dismissed, a subsequent
action by a co-heir who did not join the earlier case should not be barred by prior
judgment.35 Any judgment of the court in favor of the co-owner will benefit the others, but
if the judgment is adverse, the same cannot prejudice the rights of the unimpleaded co-
owners.36
Applying these principles to the instant case, we rule that there is no identity of parties
and thus, the second action is not barred by litis pendentia.
On the issue of prescription and laches, we fully agree with the CA. The action for
reconveyance on the ground that the certificate of title was obtained by means of a fictitious
deed of sale is virtually an action for the declaration of its nullity, which does not
prescribe.37Moreover, a person acquiring property through fraud becomes, by operation of
law, a trustee of an implied trust for the benefit of the real owner of the property. An action
for reconveyance based on an implied trust prescribes in ten years. And in such case, the
prescriptive period applies only if there is an actual need to reconvey the property as when
the plaintiff is not in possession of the property. Otherwise, if plaintiff is in possession of
the property, prescription does not commence to run against him. Thus, when an action
for reconveyance is nonetheless filed, it would be in the nature of a suit for quieting of title,
an action that is imprescriptible.38
It follows then that the respondents’ present action should not be barred by laches.
Laches is a doctrine in equity, which may be used only in the absence of, and never against,
statu-
_______________
tory law. Obviously, it cannot be set up to resist the enforcement of an imprescriptible legal
right.39
Finally, it is true that an action for reconveyance will not prosper when the property
sought to be reconveyed is in the hands of an innocent purchaser for value. In this case,
however, the protection of the rights of any alleged innocent purchaser is a matter that
should be threshed out in the main case and not in these proceedings.
WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals
Decision dated August 23, 2001, and Resolution dated December 10, 2001, are AFFIRMED.
SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinez, Chico-Nazario and Reyes,
JJ., concur.
Petition denied, judgment and resolution affirmed.
 G.R. No. 168943. October 27, 2006. *
IGLESIA NI CRISTO, petitioner, vs. HON. THELMA A. PONFERRADA, in her capacity
as Presiding Judge, Regional Trial Court, Br. 104, Quezon City, and HEIRS OF ENRIQUE
G. SANTOS, respondents.
Actions; Pleadings and Practice; Verification; The purpose of verification is simply to secure an
assurance that the allegations of the petition (or complaint) have been made in good faith, or are true
and correct, and not merely speculative; Verification is only a formal, not a jurisdictional
requirement.— The purpose of verification is simply to secure an assurance that the allegations of
the petition (or complaint) have been made in good faith; or are true and correct, not merely
speculative. This requirement is simply a condition affecting the form of pleadings, and
noncompliance therewith does not necessarily render it fatally defective. Indeed, verification is only
a formal, not a jurisdictional requirement.
Same; Same; Same; The verification requirement is deemed substantially complied with when
only one of the heirs-plaintiffs, who has sufficient knowledge and belief to swear to the truth of the
allegations in the petition (complaint), signed the verification attached to it.—The issue in the present
case is not the lack of verification but the sufficiency of one executed by only one of plaintiffs. This
Court held in Ateneo de Naga University v. Manalo, 458 SCRA 325 (2005), that the verification
requirement is deemed substantially complied with when, as in the present case, only one of the
heirs-plaintiffs, who has sufficient knowledge and belief to swear to the truth of the allegations in
the petition (complaint), signed the verification attached to it. Such verification is deemed sufficient
assurance that the matters alleged in the petition have been made in good faith or are true and
correct, not merely speculative.
Same; Same; Same; Certification Against Forum Shopping; The same liberality obtaining in
the case of verifications should likewise be applied to the certification against forum shopping.—The
same liberality should likewise be applied to the certification against forum shopping. The general
rule is that the certification must be signed by all plaintiffs in a case and the signature of only one
of them is insufficient. However, the Court has also
_______________
* FIRST DIVISION.
829
VOL. 505, OCTOBER 27, 2006 829
Iglesia ni Cristo vs. Ponferrada
stressed in a number of cases that the rules on forum shopping were designed to promote and
facilitate the orderly administration of justice and thus should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective. The rule of substantial compliance
may be availed of with respect to the contents of the certification. This is because the requirement of
strict compliance with the provisions merely underscores its mandatory nature in that the
certification cannot be altogether dispensed with or its requirements completely disregarded.
Same; Same; Same; Same; Co-Ownership; Since heirs are considered co-owners pro indiviso of
the whole property, the signature of one of them in the verification and certification is sufficient for
the trial court to take cognizance of the case.—It is noteworthy that in all of the above cases, the Court
applied the rule on substantial compliance because of the commonality of interest of all the parties
with respect to the subject of the controversy. Applying the doctrines laid down in the above cases,
we find and so hold that the CA did not err in affirming the application of the rule on substantial
compliance. In the instant case, the property involved is a 936-square-meter real property. Both
parties have their respective TCTs over the property. Respondents herein who are plaintiffs in the
case below have a common interest over the property being the heirs of the late Enrique Santos, the
alleged registered owner of the subject property as shown in one of the TCTs. As such heirs, they are
considered co-owners pro indiviso of the whole property since no specific portion yet has been
adjudicated to any of the heirs. Consequently, as one of the heirs and principal party, the lone
signature of Enrique G. Santos in the verification and certification is sufficient for the RTC to take
cognizance of the case. The commonality of their interest gave Enrique G. Santos the authority to
inform the RTC on behalf of the other plaintiffs therein that they have not commenced any action or
claim involving the same issues in another court or tribunal, and that there is no other pending
action or claim in another court or tribunal involving the same issues. Hence, the RTC correctly
denied the motion to dismiss filed by petitioner.
Same; Same; Same; Same; Same; Procedural Rules and Technicalities; The ends of justice are
better served when cases are determined on the merits—after all the parties are given full opportunity
to ventilate their causes and defense—rather than on technicality or some procedural
imperfections.— Considering that at stake in the present case is the ownership and possession over
a prime property in Quezon City, the apparent merit of the substantive aspects of the case should be
deemed as a special circumstance or compelling reason to allow the relaxation of the rule. Time and
again, this Court has held that rules of procedure are established to secure substantial justice.
830
830 SUPREME COURT REPORTS ANNOTATED
Iglesia ni Cristo vs. Ponferrada
Being instruments for the speedy and efficient administration of justice, they may be used to
achieve such end, not to derail it. In particular, when a strict and literal application of the rules on
non-forum shopping and verification will result in a patent denial of substantial justice, these may
be liberally construed. The ends of justice are better served when cases are determined on the
merits—after all parties are given full opportunity to ventilate their causes and defenses—rather
than on technicality or some procedural imperfections.
Same; Same; Same; Same; Same; Same; As co-owners, each of the heirs may properly bring an
action for ejectment, forcible entry and detainer, or any kind of action for the recovery of possession.—
Anent the issue of the authority of Enrique G. Santos to represent his co-heirs/co-plaintiffs, we find
no necessity to show such authority. Respondents herein are co-owners of the subject property. As
such co-owners, each of the heirs may properly bring an action for ejectment, forcible entry and
detainer, or any kind of action for the recovery of possession of the subject properties. Thus, a co-
owner may bring such an action, even without joining all the other co-owners as co-plaintiffs, because
the suit is deemed to be instituted for the benefit of all.
Same; Same; Quieting of Title; The nature of an action is determined by the material allegations
of the complaint and the character of the relief sought by the plaintiff, and the law in effect when the
action was filed irrespective of whether he is entitled to all or only some of such relief; A cloud is said
to be a semblance of a title, either legal or equitable, or a cloud of an interest in land appearing in
some legal form but which is, in fact, unfounded, or which it would be inequitable to enforce.—The
nature of an action is determined by the material allegations of the complaint and the character of
the relief sought by plaintiff, and the law in effect when the action was filed irrespective of whether
he is entitled to all or only some of such relief. As gleaned from the averments of the complaint, the
action of respondents was one for quieting of title under Rule 64 of the Rules of Court, in relation to
Article 476 of the New Civil Code. The latter provision reads: Art. 476. Whenever there is a cloud on
title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance
or proceeding which is apparently valid or effective but is, in truth and in fact, invalid, ineffective,
voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove
such cloud or to quiet the title. An action may also be brought to prevent a cloud from being cast
upon title to real property or any interest therein. A cloud is said to be a semblance of a title, either
legal or equitable, or a cloud of an interest in land appearing in some legal form but which is, in fact,
unfounded, or which it would be inequitable to enforce. An action for
831
VOL. 505, OCTOBER 27, 2006 831
Iglesia ni Cristo vs. Ponferrada
quieting of title is imprescriptible until the claimant is ousted of his possession.
Same; Same; Same; The owner of a real property, as plaintiff, is entitled to the relief of quieting
of title even if, at the time of the commencement of his action, he was not in actual possession of real
property.—The owner of a real property, as plaintiff, is entitled to the relief of quieting of title even
if, at the time of the commencement of his action, he was not in actual possession of real property.
After all, under Article 477 of the New Civil Code, the owner need not be in possession of the propery.
If on the face of TCT No. 321744 under the name of plaintiff, its invalidity does not appear but rests
partly in pais, an action for quieting of title is proper.
Same; Same; Same; An accion reinvindicatoria is a remedy seeking the recovery of ownership
and includes jus possidendi, jus utendi, and jus fruendi as well—it is an action whereby a party
claims ownership over a parcel of land and seeks recovery of its full possession.—Admittedly,
respondents interposed the alternative reinvindicatory action against petitioner. An accion
reinvindicatoria does not necessarily presuppose that the actual and material possession of the
property is on defendant and that plaintiff seeks the recovery of such possession from defendant. It
bears stressing that an accion reinvindicatoria is a remedy seeking the recovery of ownership and
includes jus possidendi, jus utendi, and jus fruendi as well. It is an action whereby a party claims
ownership over a parcel of land and seeks recovery of its full possession. Thus, the owner of real
property in actual and material possession thereof may file an accion reinvindicatoriaagainst
another seeking ownership over a parcel of land including jus vindicandi, or the right to exclude
defendants from the possession thereof. In this case, respondents filed an alternative reinvindicatory
action claiming ownership over the property and the cancellation of TCT No. 321744 under the name
of petitioner. In fine, they sought to enforce their jus utendi and jus vindicandiwhen petitioner
claimed ownership and prevented them from fencing the property.
Same; Same; Same; Prescription; The prescriptive period for the reinvidicatory action has not
yet commenced to run where the plaintiff was in actual or physical possession of the property when he
filed his complaint.— Since respondents were in actual or physical possession of the property when
they filed their complaint against petitioner on October 24, 2001, the prescriptive period for the
reinvindicatory action had not even commenced to run, even if petitioner was able to secure TCT No.
321744 over the property in 1984. The reason for this is that x x x one who is in actual possession of
a piece of land claiming to be the owner thereof may wait until his possession is
832
832 SUPREME COURT REPORTS ANNOTATED
Iglesia ni Cristo vs. Ponferrada
disturbed or his title is attacked before taking steps to vindicate his right, the reason for the
rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse claim of a third party and its effect on
his own title, which right can be claimed only by one who is in possession.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Lazaro, Tuazon, Santos & Associates Law Offices for petitioner.
Lenito T. Serrano for respondents.
CALLEJO, SR., J.:
This is a Petition for Review on Certiorari of the Decision of the Court of Appeals (CA)
1
in CA-G.R. SP No. 72686 and its Resolution denying the motion for reconsideration of the
2
said decision.
On October 24, 2001, Alicia, Alfredo, Roberto, Enrique and Susan, all surnamed Santos,
and Sonia Santos-Wallin, represented by Enrique G. Santos, filed a complaint for Quieting 3
of Title and/or Accion Reinvindicatoria before the Regional Trial Court (RTC) of Quezon
City against the Iglesia Ni Cristo (INC), defendant therein.
Plaintiffs alleged therein that, during his lifetime, Enrique Santos was the owner of a
936-square-meter parcel of land located in Tandang Sora, Quezon City covered by Transfer
Certificate of Title (TCT) No. 57272 issued by the Register of Deeds on July 27, 1961 which
cancelled TCT No. 57193-289. He had been in possession of the owner’s duplicate of said
title and had been in continuous, open, adverse and peaceful possession of the property.
He died on February 9, 1970 and was survived by his wife, Alicia Santos, and other
plaintiffs, who were their children. Thereafter, plaintiffs took peaceful and ad-
_______________
1Penned by Associate Justice Mario L. Guariña III, with Associate Justices Marina L. Buzon and Santiago
Javier Ranada, concurring; Rollo, pp. 21-28.
2Rollo, p. 39.
3Id., at pp. 60-65.
the Office of the Register of Deeds of Quezon City was burned on June 11, 1988, the original
copy of said title was burned as well. The Register of Deeds had the title reconstituted as
TCT No. RT-110323, based on the owner’s duplicate of TCT No. 57272. Sometime in
February 1996, plaintiffs learned that defendant was claiming ownership over the property
based on TCT No. 321744 issued on September 18, 1984 which, on its face, cancelled TCT
No. 320898, under the name of the Philippine National Bank, which allegedly cancelled
TCT No. 252070 in the names of the spouses Marcos and Romana dela Cruz. They insisted
that TCT Nos. 321744, 320898 and 252070 were not among the titles issued by the Register
of Deeds of Quezon City and even if the Register of Deeds issued said titles, it was contrary
to law. Enrique Santos, during his lifetime, and his heirs, after his death, never
encumbered or disposed the property. In 1996, plaintiffs had the property fenced but
defendant deprived them of the final use and enjoyment of their property.
Plaintiffs prayed that, after due proceedings, judgment be rendered in their favor, thus:
“WHEREFORE, it is respectfully prayed that, after due hearing, judgment be rendered quieting the
title of plaintiffs over and/or recover possession of their said property in the name of deceased
Enrique Santos, covered by said TCT No. RT-110323(57272) of the Register of Deeds at Quezon City
and that:
1. 1.The title of defendant, TCT No. 321744 be ordered cancelled by the Register of Deeds of
Quezon City;
2. 2.The defendant be ordered to pay plaintiffs’ claims for actual damages in the sum of
P100,000.00;
3. 3.The defendant be ordered to pay plaintiffs’ claims for compensatory damages in the sum
of at least P1,000,000.00;
4. 4.The defendant be ordered to pay plaintiffs’ claims for reimbursement of the lawyer’s
professional fees consisting of the aforesaid P50,000.00 acceptance fee and reimbursement
of the said success fee in par. 10 above; and lawyer’s expenses of P2,000.00 for each hearing
in this case;
5. 5.The defendant be ordered to pay expenses and costs of litigation in the sum of at least
P200,000.00.
Other reliefs that are just and equitable in the premises are, likewise, prayed for.” 4 shopping. Thus, plaintiffs failed to comply with Section 5, Rule 7 of the Rules of Court.
As gleaned from the caption of the complaint, plaintiffs appear to be the heirs of Enrique
Santos, represented by Enrique G. Santos. The latter signed the Verification and
Certificate of Non-Forum Shopping which reads:
“I, ENRIQUE G. SANTOS, of legal age, under oath, state that I am one of the children of the late
Enrique Santos and I represent the heirs of said Enrique Santos who are my co-plaintiffs in the
above-captioned case and that I directed the preparation of the instant complaint, the contents of
which are true and correct to the best of my knowledge and the attachments are faithful
reproductions of the official copies in my possession.
I hereby certify that I have not commenced any other action or proceeding involving the same
issues in the Supreme Court, the Court of Appeals, or different Divisions thereof, or any other
tribunal or agency, and to the best of my knowledge, no such action or proceeding is pending in the
Supreme Court, the Court of Appeals, or different Divisions thereof, or any other tribunal or agency,
and that I shall notify this Commission within three days from notice that a similar action or
proceeding has been filed or is pending thereat.
IN WITNESS WHEREOF, I hereby affix my signature this 23rd day of October 2001 at Pasig
City, Metro Manila.
(Sgd.)
ENRIQUE G. SANTOS
SUBSCRIBED AND SWORN to before me this 23rd day of October 2001 at Pasig City, affiant
exhibiting to me his CTC No. 07303074 issued at Sta. Cruz, Laguna on April 16, 2001.
(Sgd.)
PETER FRANCIS G. ZAGALA
Notary Public
Until December 31, 2002
PTR No. 0287069
Issued on 1-10-01
At Pasig City
5
_______________
4 CA Rollo pp. 24-25.
5 Id., at p. 26.
835
VOL. 505, OCTOBER 27, 2006 835
Iglesia ni Cristo vs. Ponferrada
Defendant moved to dismiss plaintiffs’ complaint on the following grounds: (1) plaintiffs
failed to faithfully comply with the procedural requirements set forth in Section 5, Rule 7
of the 1997 Rules of Civil Procedure; (2) the action (either Quieting of Title or Accion
Reinvindicatoria) had prescribed, the same having been filed only on October 24, 2001
beyond the statutory ten-year period therefor; and (3) that the complaint is defective in
many respects. 6
Defendant asserted that the case involved more than one plaintiff but the verification
and certification against forum shopping incorporated in the complaint was signed only by
Enrique Santos. Although the complaint alleges that plaintiffs are represented by Enrique
Santos, there is no showing that he was, indeed, authorized to so represent the other
plaintiffs to file the complaint and to sign the verification and certification of non-forum
7
Defendant cited the ruling of this Court in Loquias v. Office of the Ombudsman. 8
Defendant maintained that the complaint is defective in that, although there is an
allegation that Enrique Santos represents the other heirs, there is nothing in the pleading
to show the latter’s authority to that effect; the complaint fails to aver with particularity
the facts showing the capacity of defendant corporation to sue and be sued; and the
pleading does not state the address of plaintiffs. Defendant likewise averred that the
complaint should be dismissed on the ground of prescription. It argued that plaintiffs
anchor their claim on quieting of title and considering that they are not in possession of
the land in question, their cause of action prescribed after ten years. On the other hand, if
the supposed right of plaintiffs is based on accion reinvindicatoria, prescription would set
in after 10 years from dispossession. In both cases, defendant asserts, the reckoning point
is 1984 when defendant acquired TCT No. 321744 and possession of the land in question.
_______________
Id., at p. 72.
6
7 Id., at p. 73.
8 392 Phil. 596; 338 SCRA 62 (2000).
836
836 SUPREME COURT REPORTS ANNOTATED
Iglesia ni Cristo vs. Ponferrada
In their Comment on the motion, plaintiffs averred that the relationship of a co-owner to
9
the other co-owners is fiduciary in character; thus, anyone of them could effectively act for
another for the benefit of the property without need for an authorization. Consequently,
Enrique Santos had the authority to represent the other heirs as plaintiffs and to sign the
verification and certification against forum shopping. On the issue of prescription,
10
plaintiffs argued that the prescriptive period for the actions should be reckoned from 1996,
when defendant claimed ownership over the property and barred plaintiffs from fencing
their property, not in 1984 when TCT No. 321744 was issued by the Register of Deeds in WHETHER OR NOT RESPONDENT JUDGE GRAVELY ERRED AND ABUSED HER
the name of defendant as owner. DISCRETION WHEN SHE HELD THAT THE AUTHORITY OF ENRIQUE G. SANTOS TO
In its reply, defendant averred that absent any authority from his co-heirs, Enrique REPRESENT HIS CO-HEIRS IN THE FILING OF THE COMPLAINT AGAINST THE “INC” IS A
MATTER OF EVIDENCE.
Santos must implead them as plaintiffs as they are indispensable parties. In response,
plaintiffs aver that a co-owner of a property can execute an action for quieting of title
IV.
without impleading the other co-owners.
The trial court issued an Order denying defendant’s motion to dismiss. It declared that
11

WHETHER OR NOT RESPONDENT JUDGE GRAVELY ERRED AND ABUSED HER

since Enrique Santos was one of the heirs, his signature in the verification and certification DISCRETION WHEN SHE HELD THAT THE ACTION FOR QUIETING OF TITLE
constitutes substantial compliance with the Rules. The court cited the ruling of this Court AND/OR ACCION REINVINDICATORIA (CIVIL CASE NO. Q-01-45415) HAS NOT YET
in Dar v. Alonzo-Legasto. The court, likewise, held that prescription had not set in and
12
PRESCRIBED. 15

that failure to state the address of plaintiffs in the complaint does not warrant the
dismissal of the complaint. Petitioner averred that, of the plaintiffs below, only plaintiff Enrique Santos signed the
Defendant filed a motion for reconsideration, which the court likewise denied in an verification and certification of non-forum shopping. Under Section 5, Rule 7 of the 1997
Order dated July 10, 2002.
13
Rules of Civil Procedure, all the plaintiffs must sign, unless one of them is authorized by
_______________
Unsatisfied, defendant, as petitioner, filed a Petition for Certiorari and Prohibition with
Prayer for the Issuance of a Temporary Re- 14 Id., at pp. 40-56.
_______________ 15 Id., at pp. 45-46.

9 CA Rollo, pp. 81-89. 838

10 Id., at pp. 83-84.
11 Penned by Judge Thelma A. Ponferrada; Rollo, pp. 117-118.
838 SUPREME COURT REPORTS ANNOTATED
12 393 Phil. 734, 738; 339 SCRA 306, 310 (2000). Iglesia ni Cristo vs. Ponferrada
Rollo, pp. 139-144. a special power of attorney to sign for and in behalf of the others. Petitioner argues that
13

837 the bare claim of Enrique Santos that he signed the verification and certification in his
VOL. 505, OCTOBER 27, 2006 837 behalf and of the other plaintiffs who are his co-heirs/co-owners of the property does not
even constitute substantial compliance of the rule. Contrary to the ruling of the trial court,
Iglesia ni Cristo vs. Ponferrada
the absence or existence of an authority of Enrique Santos to sign the verification and
straining Order and/or Preliminary Injunction before the CA, raising the following issues:
14

I.
WHETHER OR NOT RESPONDENT JUDGE GRAVELY ERRED AND ABUSED HER
DISCRETION WHEN SHE HELD THAT THE CERTIFICATION OF NON-FORUM SHOPPING
certification for and in behalf of his co-plaintiffs is not a matter of evidence. The defect is
fatal to the complaint of respondents and cannot be cured by an amendment of the
complaint. The trial court erred in applying the ruling of this Court in Dar v. Alonzo-
Legasto. 16

SIGNED BY ENRIQUE G. SANTOS ALONE IS A SUBSTANTIAL COMPLIANCE WITH SECTION
5, RULE 7 OF THE 1997 RULES OF CIVIL PROCEDURE, IN CLEAR CONTRAVENTION OF THE
RULES OF COURT, AND THE RULING IN LOQUIAS V. OFFICE OF THE OMBUDSMAN, G.R.
NO. 1399396 (SIC), AUGUST 16, 2000, 338 SCRA 62, AND ORTIZ V. COURT OF APPEALS, G.R.
NO. 127393, 299 SCRA 708 (DECEMBER 4, 1998).
II.
WHETHER OR NOT RESPONDENT JUDGE GRAVELY ERRED AND ABUSED HER
DISCRETION IN APPLYING THE RULING IN DAR, ET AL. V. HON. ROSE MARIE ALONZO-
LEGASTO, ET AL., G.R. NO. 143016, AUGUST 30, 2000 TO THE INSTANT CASE.
III.
Petitioner maintained that the action of respondents, whether it be one for quieting of
title or an accion reinvindicatoria, had prescribed when the complaint was filed on October
24, 2001. Petitioner asserts that this is because when respondents filed their complaint,
they were not in actual or physical possession of the property, as it (petitioner) has been in
actual possession of the property since 1984 when TCT No. 321744 was issued to it by the
Register of Deeds. This is evident from the nature of a reinvindicatory action itself—which
is an action whereby plaintiff alleges ownership over the subject parcel of land and seeks
recovery of its full possession. By their action, respondents thereby admitted that
petitioner was in actual possession of the property, and as such, respondents’ action for
quieting of title or accion reinvindicatoria may prescribe in ten (10) years from 1984 or in
1994, it appearing that it acted in good faith when it acquired the property from the
registered owner, conformably with Article 555(4) of the New Civil Code.
On April 7, 2005, the CA rendered the assailed decision dismissing the petition, holding
17

that the RTC did not commit grave abuse of its discretion amounting to lack or excess of
jurisdiction in denying petitioner’s motion to dismiss. As the Court held in DAR v. Alonzo- 840 SUPREME COURT REPORTS ANNOTATED
Legasto and in Gudoy v. Guadalquiver, the certification signed by
18 19

_______________
Iglesia ni Cristo vs. Ponferrada
“Sec. 4. Verification.—Except when otherwise specifically required by law or rule, pleadings need not
16 Supra note 12. be under oath, verified or accompanied by affidavit.
17 Supra note 1. A pleading is verified by an affidavit that the affiant has read the pleading and that the
18 Supra note 12. allegations therein are true and correct of his personal knowledge or based on authentic records.
19 G.R. No. 151136, May 27, 2004, 429 SCRA 722, 726. A pleading required to be verified which contains a verification based on “information and belief”
or upon “knowledge, information and belief,” or lacks a proper verification, shall be treated as an
839 unsigned pleading.
VOL. 505, OCTOBER 27, 2006 839 Sec. 5. Certification against forum shopping.—The plaintiff or principal party shall certify under
Iglesia ni Cristo vs. Ponferrada oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore
one with respect to a property over which he shares a common interest with the rest of the
commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-
plaintiffs (respondents herein) substantially complied with the Rules. As to the issue of judicial agency and, to the best of his knowledge, no such other action or claim is pending therein;
prescription, the appellate court held that the prescriptive period should be reckoned from (b) if there is such other pending action or claim, a complete statement of the present status thereof;
1996, when petitioner claimed ownership and barred respondents from fencing the and (c) if he should thereafter learn that the same or similar action or claim has been filed or is
property. pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid
Petitioner is now before this Court on petition for review on certiorari, raising the complaint or initiatory pleading has been filed.
following issues: Failure to comply with the foregoing requirements shall not be curable by mere amendment of
I. the complaint or other initiatory pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false
WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE certification or non-compliance with any of the undertakings therein shall constitute indirect
CERTIFICATION OF NON-FORUM SHOPPING SIGNED BY RESPONDENT ENRIQUE G. contempt of court, without prejudice to the corresponding administrative and criminal actions. If the
SANTOS ALONE IS A SUBSTANTIAL COMPLIANCE WITH SECTION 5, RULE 7 OF THE 1997 acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same
RULES OF CIVIL PROCEDURE AND IN APPLYING THE CASE OF GUDOY V. shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well
GUADALQUIVER, 429 SCRA 723, WITHOUT REGARD TO MORE RECENT JURISPRUDENCE. as a cause for administrative sanctions.

II.
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT HELD THAT THE
AUTHORITY OF RESPONDENT ENRIQUE G. SANTOS TO REPRESENT HIS CO-HEIRS IN THE
FILING OF THE COMPLAINT AGAINST THE PETITIONER IS A MATTER OF EVIDENCE.
III.
The purpose of verification is simply to secure an assurance that the allegations of the
petition (or complaint) have been made in good faith; or are true and correct, not merely
speculative. This requirement is simply a condition affecting the form of pleadings, and
noncompliance therewith does not necessarily render it fatally defective.
841
VOL. 505, OCTOBER 27, 2006 841
Iglesia ni Cristo vs. Ponferrada
Indeed, verification is only a formal, not a jurisdictional requirement. 21

WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT THE ACTION The issue in the present case is not the lack of verification but the sufficiency of one
FOR QUIETING OF TITLE AND/OR ACCION REINVINDICATORIA (CIVIL CASE NO. Q-01-
executed by only one of plaintiffs. This Court held in Ateneo de Naga University v.
45415) HAS NOT YET PRESCRIBED.
Manalo, that the verification requirement is deemed substantially complied with when,
20

22

Petitioner reiterated its arguments in support of its petition in the CA as its arguments in as in the present case, only one of the heirs-plaintiffs, who has sufficient knowledge and
support of its petition in the present case. belief to swear to the truth of the allegations in the petition (complaint), signed the
Sections 4 and 5, Rule 7 of the Revised Rules of Court on verification and certification verification attached to it. Such verification is deemed sufficient assurance that the
against forum shopping read: matters alleged in the petition have been made in good faith or are true and correct, not
_______________ merely speculative.
The same liberality should likewise be applied to the certification against forum
20 Rollo, p. 7. shopping. The general rule is that the certification must be signed by all plaintiffs in a case
840 and the signature of only one of them is insufficient. However, the Court has also stressed
in a number of cases that the rules on forum shopping were designed to promote and
facilitate the orderly administration of justice and thus should not Rbe interpreted with
such absolute literalness as to subvert its own ultimate and legitimate objective. The rule
of substantial compliance may be availed of with respect to the contents of the certification.
This is because the requirement of strict compliance with the provisions merely
underscores its mandatory nature in that the certification cannot be altogether dispensed
with or its requirements completely disregarded. 23
The substantial compliance rule has been applied by this Court in a number of
cases: Cavile v. Heirs of Cavile, where the Court sus-
24
_______________
Estares v. Court of Appeals, G.R. No. 144755, June 8, 2005, 459 SCRA 604, 616.
21
G.R. No. 160455, May 9, 2005, 458 SCRA 325, 333-334, citing Torres v. Specialized Packaging Development
22
Corporation, 433 SCRA 455, 463-464 (2000).
Heirs of Agapito T. Olarte v. Office of the President of the Philippines, G.R. No. 165821, June 21, 2005, 460
23
SCRA 561; Cavile v. Heirs of Clarita Cavile, 448 Phil. 302, 311; 400 SCRA 255, 262 (2003).
Supra.
24
842
842 SUPREME COURT REPORTS ANNOTATED
Iglesia ni Cristo vs. Ponferrada
tained the validity of the certification signed by only one of petitioners because he is a
relative of the other petitioners and co-owner of the properties in dispute; Heirs of Agapito
T. Olarte v. Office of the President of the Philippines, where the Court allowed a
25
certification signed by only two petitioners because the case involved a family home in
which all the petitioners shared a common interest; Gudoy v. Guadalquiver, where the
Court considered as valid the certification signed by only four of the nine petitioners
because all petitioners filed as co-owners pro indiviso a complaint against respondents for
quieting of title and damages, as such, they all have joint interest in the undivided whole;
and Dar v. Alonzo-Legasto, where the Court sustained the certification signed by only one
27
of the spouses as they were sued jointly involving a property in which they had a common
interest.
It is noteworthy that in all of the above cases, the Court applied the rule on substantial
compliance because of the commonality of interest of all the parties with respect to the
subject of the controversy.
Applying the doctrines laid down in the above cases, we find and so hold that the CA
did not err in affirming the application of the rule on substantial compliance. In the instant
case, the property involved is a 936-square-meter real property. Both parties have their
respective TCTs over the property. Respondents herein who are plaintiffs in the case below
have a common interest over the property being the heirs of the late Enrique Santos, the
alleged registered owner of the subject property as shown in one of the TCTs. As such heirs,
they are considered co-owners pro indiviso of the whole property since no specific portion
yet has been adjudicated to any of the heirs. Consequently, as one of the heirs and principal
party, the lone signature of Enrique G. Santos in the verification and certification is
sufficient for the RTC to take cognizance of the case. The commonality of their interest
gave Enrique G. Santos the authority to inform the RTC on behalf of the other plaintiffs
therein that they have not commenced any action or
_______________
claim involving the same issues in another court or tribunal, and that there is no other
pending action or claim in another court or tribunal involving the same issues. Hence, the
RTC correctly denied the motion to dismiss filed by petitioner.
Considering that at stake in the present case is the ownership and possession over a
prime property in Quezon City, the apparent merit of the substantive aspects of the case
should be deemed as a special circumstance or compelling reason to allow the relaxation
of the rule.
Time and again, this Court has held that rules of procedure are established to secure
substantial justice. Being instruments for the speedy and efficient administration of
justice, they may be used to achieve such end, not to derail it. In particular, when a strict
and literal application of the rules on non-forum shopping and verification will result in a
patent denial of substantial justice, these may be liberally construed. The ends of justice
28
are better served when cases are determined on the merits—after all parties are given full
opportunity to ventilate their causes and defenses—rather than on technicality or some
procedural imperfections. 29
Indeed, this Court strictly applied the rules on verification and certification against
forum shopping as in the cases of Loquias v. Office of the Ombudsman and Tolentino v.
30
Rivera. However, in both cases, the commonality of interest between or among the parties
31
is wanting. In Loquias, the co-parties were being sued in their individual capacities as
mayor, vice mayor and members of the municipal board. In Tolentino, the lone signature
26
of Tolentino was held insufficient because he had no authority to sign in behalf of the
Francisco spouses. In such case, the Court concluded that Tolentino merely used the
spouses’ names for whatever mileage he thought he could gain. It is thus clear from these
cases that the commonality of interest is material in the relaxation of the Rules.
_______________
Anent the issue of the authority of Enrique G. Santos to represent his co-heirs/co-plaintiffs,
we find no necessity to show such authority. Respondents herein are co-owners of the
subject property. As such co-owners, each of the heirs may properly bring an action for
ejectment, forcible entry and detainer, or any kind of action for the recovery of possession
of the subject properties. Thus, a co-owner may bring such an action, even without joining
all the other co-owners as co-plaintiffs, because the suit is deemed to be instituted for the
benefit of all. 32
We uphold the validity of the complaint because of the following circumstances: (1) the
caption of the instant case is Heirs of Enrique Santos v. Iglesia ni Cristo; (2) the opening
33
statement of the complaint states that plaintiffs are the heirs of Enrique Santos and
likewise names the particular heirs of the latter who instituted the complaint below; (3) 34
the case involves a property owned by the predecessor-in-interest of plaintiffs therein; and35
(4) the verification signed by Enrique G. Santos clearly states that he is one of the children
of the late Enrique Santos and that he represents the heirs of said Enrique Santos. 36
 On the issue of prescription of action, petitioner avers that the action of respondents is
one to quiet title and/or accion reinvindicatoria, and that respondents asserted ownership
over the property and sought the recovery of possession of the subject parcel of land. It
insists that the very nature of the action presupposes that respondents had not been in
actual and material possession of the property, and that it was petitioner which had been
in possession of the property since 1984 when it acquired title thereon. The action of
respondent prescribed in ten years from 1984 when petitioner allegedly dispossessed
respondents, in accordance with Article 555(4) of the New Civil Code.
_______________
The contention of petitioner has no merit. The nature of an action is determined by the
material allegations of the complaint and the character of the relief sought by plaintiff,
and the law in effect when the action was filed irrespective of whether he is entitled to all
or only some of such relief. As gleaned from the averments of the complaint, the action of
37
respondents was one for quieting of title under Rule 64 of the Rules of Court, in relation to
Article 476 of the New Civil Code. The latter provision reads:
“Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is,
in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said
title, an action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property or
any interest therein.”
A cloud is said to be a semblance of a title, either legal or equitable, or a cloud of an interest
in land appearing in some legal form but which is, in fact, unfounded, or which it would be
inequitable to enforce. An action for quieting of title is imprescriptible until the claimant
38
is ousted of his possession. 39
The owner of a real property, as plaintiff, is entitled to the relief of quieting of title even
if, at the time of the commencement of his action, he was not in actual possession of real
property. After all, under Article 477 of the New Civil Code, the owner need not be in
possession of the propery. If on the face of TCT No. 321744 under the name of plaintiff, its
invalidity does not appear but rests partly in pais, an action for quieting of title is proper.
_______________
Barangay Piapi v. Talip, G.R. No. 138248, September 7, 2005, 469 SCRA 409; Hilario v. Salvador, G.R. No.
37
160384, April 29, 2005, 457 SCRA 815; Serdoncillo v. Benolirao, 358 Phil. 83; 297 SCRA 448 (1998).
Shults v. Shults, 42 NE 800 (1958).
38
Sapto v. Fabiana, 103 Phil. 683 (1958); Ordoñez v. Court of Appeals, G.R. No. 84046, July 30, 1990, 188
39
SCRA 109.
Gaves v. Ashburn, 215 US 331, 30 S.Ct. 168.
40
846
In the present case, respondents herein, as plaintiffs below, alleged in their complaint, that
their father, Enrique Santos, was the owner of the property based on TCT No. 57272 issued
on July 27, 1961; and that, after his death on February 9, 1970, they inherited the property;
Enrique Santos, during his lifetime, and respondents, after the death of the former, had
been in actual, continuous and peaceful possession of the property until 1994 when
petitioner claimed ownership based on TCT No. 321744 issued on September 18, 1984 and
barred respondents from fencing their property.
Petitioner’s claim that it had been in actual or material possession of the property since
1984 when TCT No. 321744 was issued in its favor is belied by the allegations in the
complaint that respondents had been in actual and material possession of the property
since 1961 up to the time they filed their complaint on October 24, 2001.
Admittedly, respondents interposed the alternative reinvindicatory action against
petitioner. An accion reinvindicatoria does not necessarily presuppose that the actual and
material possession of the property is on defendant and that plaintiff seeks the recovery of
such possession from defendant. It bears stressing that an accion reinvindicatoria is a
remedy seeking the recovery of ownership and includes jus possidendi, jus utendi, and jus
fruendi as well. It is an action whereby a party claims ownership over a parcel of land and
seeks recovery of its full possession. Thus, the owner of real property in actual and
41
material possession thereof may file an accion reinvindicatoria against another seeking
ownership over a parcel of land including jus vindicandi, or the right to exclude defendants
from the possession thereof. In this case, respondents filed an alternative reinvindicatory
action claiming ownership over the property and the cancellation of TCT No. 321744 under
the name of petitioner. In fine, they sought to enforce their jus utendiand jus
vindicandi when petitioner claimed ownership and prevented them from fencing the
property.
Since respondents were in actual or physical possession of the property when they filed
their complaint against petitioner on October 24, 2001, the prescriptive period for the
reinvindicatory action
_______________
41 Capacete v. Baroro, 453 Phil. 392, 402; 405 SCRA 457, 464 (2003).
847
had not even commenced to run, even if petitioner was able to secure TCT No. 321744 over
the property in 1984. The reason for this is that
“x x x one who is in actual possession of a piece of land claiming to be the owner thereof may wait
40
until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the
reason for the rule being, that his undisturbed possession gives him a continuing right to seek the
aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party
and its effect on his own title, which right can be claimed only by one who is in possession.” 42
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The decision of the Court
of Appeals in CA-G.R. SP No. 72686 is AFFIRMED. Costs against petitioner.
SO ORDERED.
Panganiban (C.J., Chairperson), Ynares-Santiago, Austria-Martinez and Chico-
Nazario, JJ., concur.
Petition denied, judgment affirmed.
 G.R. No. 125233. March 9, 2000. *
Spouses ALEXANDER CRUZ and ADELAIDA CRUZ, petitioners, vs. ELEUTERIO LEIS,
RAYMUNDO LEIS, ANASTACIO L. LAGDANO, LORETA L. CAYONDA and THE
HONORABLE COURT OF APPEALS, respondents.
Co-Ownership; Redemption; Redemption by a co-owner does not terminate the co-ownership nor
give her title to the entire land subject of the co-ownership.—Incidentally, there is no merit in
petitioners’ contention that Gertrudes’ redemption of the property from the Daily Savings Bank
vested in her ownership over the same to the exclusion of her co-owners. We dismissed the same
argument by one of the petitioners in Paulmitan vs. Court of Appeals, where one of the petitioners
therein claimed ownership of the entire property subject of the case by virtue of her redemption
thereof after the same was forfeited in favor of the provincial government for non-payment of taxes.
We held, however, that the redemption of the land “did not terminate the co-ownership nor give her
title to the entire land subject of the co-ownership.”
Sales; Land Titles; Husband and Wife; Conjugal Partnership of Gains; Where a parcel of land,
forming part of the undistributed properties of the dissolved conjugal partnership of gains, is sold by
a widow to a purchaser who merely relied on the face of the certificate of title thereto, issued solely in
the name of the widow, the purchaser acquires a valid title to the land even as against the heirs of the
deceased spouse.—Unfortunately for private respondents, however, the property was registered in
TCT No. 43100 solely in the name of “Gertrudes Isidro, widow,” Where a parcel of land, forming part
of the undistributed properties of the dissolved conjugal partnership of gains, is sold by a widow to a
purchaser who merely relied on the face of the certificate of title thereto, issued solely in the name
of the widow, the purchaser acquires a valid title to the land even as against the heirs of the deceased
spouse. The rationale for this rule is that “a person dealing with registered land is not required to go
behind the register to determine the condition of the property. He is only charged with notice of the
burdens on the property which are noted on the face of the register or the certificate of title. To
require
________________
*FIRST DIVISION.
571
VOL. 327, MARCH 9, 2000 571
Cruz vs. Leis
him to do more is to defeat one of the primary objects of the Torrens system.”
Same; Pacto de Retro; Consolidation of Ownership; Usury; Article 1607 of the Civil Code, on
consolidation of ownership by the vendee by virtue of the failure of the vendor to comply with the
provisions of Article 1616, is intended to minimize the evils which the pacto de retro sale has caused
in the hands of usurers—a judicial order is necessary in order to determine the true nature of the
transaction and to prevent the interposition of buyers in good faith while the determination is being
made.—As gleaned from the foregoing discussion, despite the Court of Appeals’ finding and
conclusion that Gertrudes as well as private respondents failed to repurchase the property within
the period stipulated and has lost all their rights to it, it still ruled against petitioners by affirming
the Regional Trial Court’s decision on the premise that there was no compliance with Article 1607 of
the Civil Code requiring a judicial hearing before registration of the property in the name of
petitioners. This provision states: ART. 1607. In case of real property, the consolidation of ownership
in the vendee by virtue of the failure of the vendor to comply with the provisions of Article 1616 shall
not be recorded in the Registry of Property without a judicial order, after the vendor has been duly
heard. The aforequoted article is intended to minimize the evils which the pacto de retro sale has
caused in the hands of usurers. A judicial order is necessary in order to determine the true nature of
the transaction and to prevent the interposition of buyers in good faith while the determination is
being made.
Same; Same; The essence of a pacto de retro sale is that title and ownership of the property sold
are immediately vested in the vendee a retro, subject to the resolutory condition of repurchase by the
vendor a retro within the reglementary period-failure of the vendor a retro to perform said resolutory
condition vests upon the vendee by operation of law absolute title and ownership over the property
sold; The failure of a vendee a retro to consolidate his title under Article 1607 of the Civil Code does
not impair such title or ownership for the method prescribed thereunder is merely for the purpose of
registering the consolidated title.—It bears stressing that notwithstanding Article 1607, the
recording in the Registry of Property of the consolidation of ownership of the vendee is not a
condition sine qua non to the transfer of ownership. Petitioners are the owners of the subject property
since neither Gertrudes nor her co-owners redeemed the
572
572 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Leis
same within the one-year period stipulated in the “Kasunduan.”The essence of a pacto de
retro sale is that title and ownership of the property sold are immediately vested in the vendee a
retro, subject to the resolutory condition of repurchase by the vendor a retro within the stipulated
period. Failure thus of the vendor a retro to perform said resolutory condition vests upon the vendee
by operation of law absolute title and ownership over the property sold. As title is already vested in
the vendee a retro, his failure to consolidate his title under Article 1607 of the Civil Code does not
impair such title or ownership for the method prescribed thereunder is merely for the purpose of
registering the consolidated title.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Domingo M. Ballon for petitioners.
Hugo, Hugo & Associates for private respondents.
KAPUNAN, J.:
Private respondents, the heirs of spouses Adriano Leis and Gertrudes Isidro, filed an 1
action before the Regional Trial Court (RTC) of Pasig seeking the nullification of the
contracts of sale over a lot executed by Gertrudes Isidro in favor of petitioner Alexander
Cruz, as well as the title subsequently issued in the name of the latter. Private respondents
claimed that the contracts were vitiated by fraud as Gertrudes was illiterate and already
80 years old at the time of the execution of the contracts; that the price for the land was
insufficient as it was sold only for P39,083.00 when the fair market value of the lot should
be P1,000.00 per square meter, instead of P390.00, more or less; and that the property
subject of the
________________
 1Private respondents Eleuterio Leis, Raymundo Leis, Anastacia Leis-Lagnada and Loreta Leis-Cayonda are
the children of spouses Adriano Leis and Gertrudes Isidro, while private respondent Teresita Mandocdoc is the
spouses’ grandchild.
573
VOL. 327, MARCH 9, 2000 573
Cruz vs. Leis
sale was conjugal and, consequently, its sale without the knowledge and consent of private
respondents was in derogation of their rights as heirs.
The facts that gave rise to the complaint:
Adriano and Gertrudes were married on 19 April 1923. On 27 April 1955, Gertrudes
acquired from the then Department of Agriculture and Natural Resources (DANR) a parcel
of land with an area of one hundred (100) square meters, situated at Bo. Sto. Niño,
Marikina, Rizal and covered by Transfer Certificate of Title (TCT) No. 42245. The Deed of
Sale described Gertrudes as a widow. On 2 March 1956, TCT No. 43100 was issued in the
name of “Gertrudes Isidro,” who was also referred to therein as a “widow.”
On 2 December 1973, Adriano died. It does not appear that he executed a will before
his death.
On 5 February 1985, Gertrudes obtained a loan from petitioners, the spouses Alexander
and Adelaida Cruz, in the amount of P15,000.00 at 5% interest, payable on or before 5
February 1986. The loan was secured by a mortgage over the property covered by TCT No.
43100. Gertrudes, however, failed to pay the loan on the due date.
Unable to pay her outstanding obligation after the debt became due and payable, on 11
March 1986, Gertrudes executed two contracts in favor of petitioner Alexander Cruz. The
first is denominated as “Kasunduan” which the parties concede is a pacto de retro sale,
granting Gertrudes one year within which to repurchase the property. The second is
a “Kasunduan ng Tuwirang Bilihan,” a Deed of Absolute Sale covering the same property
for the price of P39,083.00, the same amount stipulated in the “Kasunduan”
For failure of Gertrudes to repurchase the property, ownership thereof was
consolidated in the name of Alexander Cruz in whose name TCT No. 130584 was issued on
21 April 1987, canceling TCT No. 43100 in the name of Gertrudes Isidro.
On 9 June 1987, Gertrudes Isidro died. Thereafter, her heirs, herein private
respondents, received demands to vacate the premises from petitioners, the new owners of
the prop-
574
574 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Leis
erty. Private respondents responded by filing a complaint as mentioned at the outset.
On the basis of the foregoing facts, the RTC rendered a decision in favor of private
respondents. The RTC held that the land was conjugal property since the evidence
presented by private respondents disclosed that the same was acquired during the
marriage of the spouses and that Adriano contributed money for the purchase of the
property. Thus, the court concluded, Gertrudes could only sell to petitioner spouses her
one-half share in the property.
The trial court also ruled that no fraud attended the execution of the contracts.
Nevertheless, the “Kasunduan,”providing for a sale con pacto de retro, had superseded
the “Kasunduan ng Tuwirang Bilihan,” the deed of absolute sale. The trial court did not
consider the pacto de retro sale an equitable mortgage, despite the allegedly insufficient
price. Nonetheless, the trial court found for private respondents. It rationalized that
petitioners failed to comply with the provisions of Article 1607 of the Civil Code requiring
a judicial order for the consolidation of the ownership in the vendee a retro to be recorded
in the Registry of Property.
The dispositive portion of the RTC’s Decision reads:
WHEREFORE, in the light of all the foregoing, judgment is hereby rendered:
1. 1.Declaring Exhibit G—“Kasunduan ng Tuwirang Bilihan” Null and Void and declar[ing]
that the title issued pursuant thereto is likewise Null and Void;
2. 2.Declaring the property in litigation as conjugal property;
3. 3.Ordering the Registry of Deeds of Marikina Branch to reinstate the title of Gertrudes
Isidro;
4. 4.Ordering the plaintiff[s] [sic] to comply with the provisiont[s] of Article 1607 in relation to
Article 1616 of the Civil Code;
5. 5.Ordering the defendant[s] to pay plaintiff[s] P15,000.00 nominal damages for the violation
of plaintiffs’ rights;
6. 6.Ordering the defendant[s] to pay plaintiff[s] the sum of P8,000.00 as and for attorney’s
fees;
575
VOL. 327, MARCH 9, 2000 575
Cruz vs. Leis
1. 7.Dismissing defendant[s’] counterclaim; and
2. 8.Ordering defendant[s] to pay the cost of suit.
SO ORDERED. 2
Petitioners appealed to the Court of Appeals in vain. The Court of Appeals affirmed the
decision of the Regional Trial Court, holding that since the property was acquired during
the marriage of Gertrudes to Adriano, the same was presumed to be conjugal property
under Article 160 of the Civil Code. The appellate court, like the trial court, also noted that
petitioners did not comply with the provisions of Article 1607 of the Civil Code.
Petitioners are now before this Court seeking the reversal of the decision of the Court
of Appeals. First, they contend that the subject property is not conjugal but is owned
exclusively by Gertrudes, who was described in the Deed of Sale between Gertrudes and
the DANR as well as in TCT No. 43100 as a widow. Second, assuming the land was conjugal
property, petitioners argue that the same became Gertrudes’ exclusively when, in 1979,
she mortgaged the property to the Daily Savings Bank and Loan Association. The bank
later foreclosed on the mortgage in 1981 but Gertrudes redeemed the same in 1983.
The paraphernal or conjugal nature of the property is not determinative of the
ownership of the disputed property. If the property was paraphernal as contended by
petitioners, Gertrudes Isidro would have the absolute right to dispose of the same, and VOL. 327, MARCH 9, 2000 577
absolute title and ownership was vested in petitioners upon the failure of Gertrudes to Cruz vs. Leis
redeem the property. On the other hand, if the property was conjugal, as private
to end the existing state of co-ownership (Supra, Art. 489). There is no doubt that redemption of
respondents maintain, upon the death of Adriano Leis, the conjugal partnership was property entails a necessary expense. Under the Civil Code:
terminated, entitling Gertrudes to one-half of the property. Adriano’s rights to the other
3 4
Art. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the
half, 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.
2Records, p. 276. The result is that the property remains to be in a condition of co-ownership. While a vendee a
3Civil Code, Article 175 (1). retro, under Article 1613 of the Code, “may not be compelled to consent to a partial redemption,” the
4Civil Code, Article 185. redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership
576
over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the
576 SUPREME COURT REPORTS ANNOTATED property and consolidate title thereto in his name (Supra, Art. 1607). But the provision does not give
Cruz vs. Leis to the redeeming co-owner the right to the entire property. It does not provide for a mode of
terminating a co-ownership.
in turn, were transmitted upon his death to his heirs, which includes his widow Gertrudes,
5

who is entitled to the same share as that of each of the legitimate children. Thus, as a result
6
of the death of Adriano, a regime of co-ownership arose between Gertrudes and the other
heirs in relation to the property.
Incidentally, there is no merit in petitioners’ contention that Gertrudes’ redemption of
the property from the Daily Savings Bank vested in her ownership over the same to the
exclusion of her co-owners. We dismissed the same argument by one of the petitioners
in Paulmitan vs. Court of Appeals, where one of the petitioners therein claimed ownership
7
of the entire property subject of the case by virtue of her redemption thereof after the same
was forfeited in favor of the provincial government for non-payment of taxes. We held,
however, that the redemption of the land “did not terminate the co-ownership nor give her
title to the entire land subject of the co-ownership.” We expounded, quoting our
pronouncement in Adille vs. Court of Appeals: 8
The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the
property held in common?
Essentially, it is the petitioner’s contention that the property subject of dispute devolved upon
him upon the failure of his co-heirs to join him in its redemption within the period required by law.
He relies on the provisions of Article 1515 of the old Civil Code, Article 1613 of the present Code,
giving the vendee a retrothe right to demand redemption of the entire property.
There is no merit in this petition.
The right of repurchase may be exercised by a co-owner with respect to his share alone (CIVIL
CODE, Art. 1612; CIVIL CODE [1889], Art. 1514.). While the records show that petitioner redeemed
It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share
in the property owned in common. Article 493 of the Civil Code provides:
ART. 493. Each co-owner shall have the full ownership of his part 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 allotted to him
in the division upon the termination of the co-ownership.
Unfortunately for private respondents, however, the property was registered in TCT No.
43100 solely in the name of “Gertrudes Isidro, widow.” Where a parcel of land, forming
part of the undistributed properties of the dissolved conjugal partnership of gains, is sold
by a widow to a purchaser who merely relied on the face of the certificate of title thereto,
issued solely in the name of the widow, the purchaser acquires a valid title to the land even
as against the heirs of the
578
578 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Leis
deceased spouse. The rationale for this rule is that “a person dealing with registered land
is not required to go behind the register to determine the condition of the property. He is
only charged with notice of the burdens on the property which are noted on the face of the
register or the certificate of title. To require him to do more is to defeat one of the primary
objects of the Torrens system.” 9

the property in its entirety, shouldering the expenses therefor, that did not make him the owner of
As gleaned from the foregoing discussion, despite the Court of Appeals’ finding and
all of it. In other words, it did not put
conclusion that Gertrudes as well as private respondents failed to repurchase the property
________________ within the period stipulated and has lost all their rights to it, it still ruled against
petitioners by affirming the Regional Trial Court’s decision on the premise that there was
5 Civil Code, Article 777. no compliance with Article 1607 of the Civil Code requiring a judicial hearing before
Civil Code, Article 996.
registration of the property in the name of petitioners. This provision states:
6

7 215 SCRA 866 (1992).

8 157 SCRA 455 (1988). ART. 1607. In case of real property, the consolidation of ownership in the vendee by virtue of the
577 failure of the vendor to comply with the provisions of Article 1616 shall not be recorded in the
Registry of Property without a judicial order, after the vendor has been duly heard.
The aforequoted article is intended to minimize the evils which the pacto de retro sale has
caused in the hands of usurers. A judicial order is necessary in order to determine the true
nature of the transaction and to prevent the interposition of buyers in good faith while the
determination is being made. 10

It bears stressing that notwithstanding Article 1607, the recording in the Registry of
Property of the consolidation of ownership of the vendee is not a condition sine qua non to
the transfer of ownership. Petitioners are the owners of the sub-

________________

9 Ibarra vs. Ibarra, Sr., 156 SCRA 616 (1987), citing Paraiso vs. Camon, 106 Phil. 187 (1959). Ibarra was
wrongly cited in p. 4 of the Petition (Rollo, p. 6) as Vda. de Carcallas v. Judge Yancha, G.R. No. L-46401, 18 Dec.
87,” at 156 SCRA 608 (1987).
10Aquino, Civil Code, Vol. 3, 1990 ed., pp. 150-151.
579
VOL. 327, MARCH 9, 2000 579
Cruz vs. Leis
ject property since neither Gertrudes nor her co-owners redeemed the same within the one-
year period stipulated in the “Kasunduan.” The essence of a pacto de retro sale is that title
and ownership of the property sold are immediately vested in the vendee a retro, subject
to the resolutory condition of repurchase by the vendor a retrowithin the stipulated period.
Failure thus of the vendor a retro to perform said resolutory condition vests upon the
vendee by operation of law absolute title and ownership over the property sold. As title is
already vested in the vendee a retro, his failure to consolidate his title under Article 1607
of the Civil Code does not impair such title or ownership for the method prescribed
thereunder is merely for the purpose of registering the consolidated title. 11

WHEREFORE, the decision of the Court of Appeals is MODIFIED in that the

petitioners are deemed owners of the property by reason of the failure of the vendor,
Gertrudes Isidro, to repurchase the same within the period stipulated. However, Transfer
Certificate of Title No. 130584, in the name of Alexander M. Cruz, which was issued
without judicial order, is hereby ordered CANCELLED, and Transfer Certificate of Title
No. 43100 in the name of Gertrudes Isidro is ordered REINSTATED, without prejudice to
compliance by petitioners with the provisions of Article 1607 of the Civil Code.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Puno and Ynares-Santiago, JJ., concur.
Pardo, J., On official business abroad.
Judgment modified. Transfer Cert, of Title No. 130584 issued in the name of Alexander
M. Cruz cancelled, Transfer Cert, of Title No. 43100 in the name of Gertrudes Isidro
reinstated.
 G.R. No. 157493. February 5, 2007. *
RIZALINO, substituted by his heirs, JOSEFINA, ROLANDO and FERNANDO,
ERNESTO, LEONORA, BIBIANO, JR., LIBRADO and ENRIQUETA, all surnamed
OESMER, petitioners, vs. PARAISO DEVELOPMENT CORPORATION, respondent.
Contracts; Sales; Co-Ownership; Agency; Where the co-owners affixed their signatures on the
Contract to Sell, they were no longer selling their shares through an agent but, rather, they were selling
the same directly and in their own right—a written authority is no longer necessary to empower an
agent.—The law itself explicitly requires a written authority before an agent can sell an immovable.
The conferment of such an authority should be in writing, in as clear and precise terms as possible.
It is worth noting that petitioners’ signatures are found in the Contract to Sell. The Contract is
absolutely silent on the establishment of any principal-agent relationship between the five
petitioners and their brother and co-petitioner Ernesto as to the sale of the subject parcels of land.
Thus, the Contract to Sell, although signed on the margin by the five petitioners, is not sufficient to
confer authority on petitioner Ernesto to act as their agent in selling their shares in the properties
in question. However, despite petitioner Ernesto’s lack of written authority from the five petitioners
to sell their shares in the subject parcels of land, the supposed Contract to Sell remains valid and
binding upon the latter. As can be clearly gleaned from the contract itself, it is not only petitioner
Ernesto who signed the said Contract to Sell; the other five petitioners also personally affixed their
signatures thereon. Therefore, a written authority is no longer necessary in order to sell their shares
in the subject parcels of land because, by affixing their signatures on the Contract to Sell, they were
not selling their shares through an agent but, rather, they were selling the same directly and in their
own right.
Same; Same; Same; Contracts are perfected by mere consent, upon the acceptance by the offeree
of the offer made by the offeror, which acceptance may be express or implied.—It is well-settled that
_______________
*THIRD DIVISION.
229
VOL. 514, FEBRUARY 5, 2007 229
Oesmer vs. Paraiso Development Corporation
contracts are perfected by mere consent, upon the acceptance by the offeree of the offer made
by the offeror. From that moment, the parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which, according to their nature, may be in
keeping with good faith, usage and law. To produce a contract, the acceptance must not qualify the
terms of the offer. However, the acceptance may be express or implied. For a contract to arise, the
acceptance must be made known to the offeror. Accordingly, the acceptance can be withdrawn or
revoked before it is made known to the offeror. In the case at bar, the Contract to Sell was perfected
when the petitioners consented to the sale to the respondent of their shares in the subject parcels of
land by affixing their signatures on the said contract. Such signatures show their acceptance of what
has been stipulated in the Contract to Sell and such acceptance was made known to respondent
corporation when the duplicate copy of the Contract to Sell was returned to the latter bearing
petitioners’ signatures.
Same; Same; Same; Interpretation of Contracts; It is a cardinal rule in the interpretation of
contracts that if the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulation shall control.—We also cannot sustain the
allegation of the petitioners that assuming the signatures indicate consent, such consent was merely
conditional, and that, the effectivity of the alleged Contract to Sell was subject to the suspensive
condition that the sale be approved by all the coowners. The Contract to Sell is clear enough. It is a
cardinal rule in the interpretation of contracts that if the terms of a contract are clear and leave no
doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control.
The terms of the Contract to Sell made no mention of the condition that before it can become valid
and binding, a unanimous consent of all the heirs is necessary. Thus, when the language of the
contract is explicit, as in the present case, leaving no doubt as to the intention of the parties thereto,
the literal meaning of its stipulation is controlling.
Same; Same; Same; The co-owners, being owners of their respective undivided shares in the
subject properties, can dispose of their shares even without the consent of all the co-heirs.—The
petitioners, being owners of their respective undivided shares in the subject properties, can dispose
of their shares even without the
230
230 SUPREME COURT REPORTS ANNOTATED
Oesmer vs. Paraiso Development Corporation
consent of all the co-heirs. Article 493 of the Civil Code expressly provides: Article 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 allotted to him in the
division upon the termination of the coownership. [Emphases supplied.] Consequently, even without
the consent of the two co-heirs, Adolfo and Jesus, the Contract to Sell is still valid and binding with
respect to the 6/8 proportionate shares of the petitioners, as properly held by the appellate court.
Same; Same; Same; A contract to sell is not void merely because it does not bear the signature
of the vendee.—The Contract to Sell is not void merely because it does not bear the signature of the
respondent corporation. Respondent corporation’s consent to be bound by the terms of the contract
is shown in the uncontroverted facts which established that there was partial performance by
respondent of its obligation in the said Contract to Sell when it tendered the amount of P100,000.00
to form part of the purchase price, which was accepted and acknowledged expressly by petitioners.
Therefore, by force of law, respondent is required to complete the payment to enforce the terms of
the contract. Accordingly, despite the absence of respondent’s signature in the Contract to Sell, the
former cannot evade its obligation to pay the balance of the purchase price.
Interpretation of Contracts; Words and Phrases; “Earnest Money” and “Option Money,”
Distinguished; In the interpretation of contracts, the ascertainment of the intention of the contracting
parties is to be discharged by looking to the words they used to project that intention in their contract,
all the words, not just a particular word or two, and words in context, not words standing alone.—As
a final point, the Contract to Sell entered into by the parties is not a unilateral promise to sell merely
because it used the word option money when it referred to the amount of P100,000.00, which also
form part of the purchase price. Settled is the rule that in the interpretation of contracts, the
ascertainment of the intention of the contracting parties is to be discharged by looking to the words
they used to project that intention in their contract, all the words, not just a particular word or two,
and words in context, not words standing alone. In
231
VOL. 514, FEBRUARY 5, 2007 231
Oesmer vs. Paraiso Development Corporation
the instant case, the consideration of P100,000.00 paid by respondent to petitioners was
referred to as “option money.” However, a careful examination of the words used in the contract
indicates that the money is not option money but earnest money. “Earnest money” and “option
money” are not the same but distinguished thus: (a) earnest money is part of the purchase price,
while option money is the money given as a distinct consideration for an option contract; (b) earnest
money is given only where there is already a sale, while option money applies to a sale not yet
perfected; and, (c) when earnest money is given, the buyer is bound to pay the balance, while when
the would-be buyer gives option money, he is not required to buy, but may even forfeit it depending
on the terms of the option.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Dick B. Perez for petitioners.
Simeon C. Sato for respondent.
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorariunder Rule 45 of the 1997 Revised
Rules of Civil Procedure seeking to reverse and set aside the Court of Appeals
Decision dated 26 April 2002 in CA-G.R. CV No. 53130entitled, Rizalino, Ernesto, Leonora,
1 VOL. 514, FEBRUARY 5, 2007
Bibiano, Jr., Librado, Enriqueta, Adolfo, and Jesus, all surnamed Oesmer vs. Paraiso
Development Corporation, as modified by its Resolution dated 4 March 2003, declaring the
2
Contract to Sell valid and binding with respect to the undivided proportionate shares of
the six signatories of the said document, herein petitioners, namely: Ernesto, Enriqueta,
Librado, Rizalino, Bibiano, Jr., and Leon-
_______________
1 Penned by Associate Justice Andres B. Reyes, Jr. with Associate Justices Conrado M. Vasquez, Jr. and
Mario L. Guariña III, concurring, Rollo, pp. 31-44.
2Id., at pp. 46-49.
232
232 SUPREME COURT REPORTS ANNOTATED
Oesmer vs. Paraiso Development Corporation
ora (all surnamed Oesmer); and ordering them to execute the Deed of Absolute Sale
concerning their 6/8 share over the subject parcels of land in favor of herein respondent
Paraiso Development Corporation, and to pay the latter the attorney’s fees plus costs of
the suit. The assailed Decision, as modified, likewise ordered the respondent to tender
payment to the petitioners in the amount of P3,216,560.00 representing the balance of the
purchase price of the subject parcels of land.
The facts of the case are as follows:
Petitioners Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, and Enriqueta, all
surnamed Oesmer, together with Adolfo Oesmer (Adolfo) and Jesus Oesmer (Jesus), are
brothers and sisters, and the co-owners of undivided shares of two parcels of agricultural
and tenanted land situated in Barangay Ulong Tubig, Carmona, Cavite, identified as Lot
720 with an area of 40,507 square meters (sq. m.) and Lot 834 containing an area of 14,769
sq. m., or a total land area of 55,276 sq. m. Both lots are unregistered and originally owned
by their parents, Bibiano Oesmer and Encarnacion Durumpili, who declared the lots for
taxation purposes under Tax Declaration No. 3438 (cancelled by I.D. No. 6064-A) for Lot
3
720 and Tax Declaration No. 3437 (cancelled by I.D. No. 5629) for Lot 834. When the
4
spouses Oesmer died, petitioners, together with Adolfo and Jesus, acquired the lots as heirs
of the former by right of succession.
Respondent Paraiso Development Corporation is known to be engaged in the real estate
business.
Sometime in March 1989, Rogelio Paular, a resident and former Municipal Secretary
of Carmona, Cavite, brought along petitioner Ernesto to meet with a certain Sotero Lee,
President of respondent Paraiso Development Corporation, at Otani Hotel in Manila. The
said meeting was for the purpose
_______________
3Rollo, p. 58.
4Id., at p. 59.
233
233
Oesmer vs. Paraiso Development Corporation
of brokering the sale of petitioners’ properties to respondent corporation.
Pursuant to the said meeting, a Contract to Sell was drafted by the Executive Assistant
5
of Sotero Lee, Inocencia Almo. On 1 April 1989, petitioners Ernesto and Enriqueta signed
the aforesaid Contract to Sell. A check in the amount of P100,000.00, payable to Ernesto,
was given as option money. Sometime thereafter, Rizalino, Leonora, Bibiano, Jr., and
Librado also signed the said Contract to Sell. However, two of the brothers, Adolfo and
Jesus, did not sign the document.
On 5 April 1989, a duplicate copy of the instrument was returned to respondent
corporation. On 21 April 1989, respondent brought the same to a notary public for
notarization.
In a letter dated 1 November 1989, addressed to respondent corporation, petitioners
6
informed the former of their intention to rescind the Contract to Sell and to return the
amount of P100,000.00 given by respondent as option money.
Respondent did not respond to the aforesaid letter. On 30 May 1991, herein petitioners,
together with Adolfo and Jesus, filed a Complaint for Declaration of Nullity or for
7
Annulment of Option Agreement or Contract to Sell with Damages before the Regional
Trial Court (RTC) of Bacoor, Cavite. The said case was docketed as Civil Case No. BCV-
91-49.
During trial, petitioner Rizalino died. Upon motion of petitioners, the trial court issued
an Order, dated 16 September 1992, to the effect that the deceased petitioner be
8
substituted by his surviving spouse, Josefina O. Oesmer, and his children, Rolando O.
Oesmer and Fernando O. Oesmer. However, the name of Rizalino was retained in the title
of the case both in the RTC and the Court of Appeals.
_______________
5 Id., at p. 235.
 6Records, p. 44.
7Rollo, pp. 53-57.
8Id., at p. 68.
234
234 SUPREME COURT REPORTS ANNOTATED
Oesmer vs. Paraiso Development Corporation
After trial on the merits, the lower court rendered a Decision dated 27 March 1996 in favor
9
of the respondent, the dispositive portion of which reads:
“WHEREFORE, premises considered, judgment is hereby rendered in favor of herein [respondent]
Paraiso Development Corporation. The assailed Contract to Sell is valid and binding only to the
undivided proportionate share of the signatory of this document and recipient of the check, [herein
petitioner] co-owner Ernesto Durumpili Oesmer. The latter is hereby ordered to execute the Contract
of Absolute Sale concerning his 1/8 share over the subject two parcels of land in favor of herein
[respondent] corporation, and to pay the latter the attorney’s fees in the sum of Ten Thousand
(P10,000.00) Pesos plus costs of suit.
The counterclaim of [respondent] corporation is hereby Dismissed for lack of merit.” 10
Unsatisfied, respondent appealed the said Decision before the Court of Appeals. On 26
April 2002, the appellate court rendered a Decision modifying the Decision of the court a
quo by declaring that the Contract to Sell is valid and binding with respect to the undivided
proportionate shares of the six signatories of the said document, herein petitioners,
namely: Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed
Oesmer). The decretal portion of the said Decision states that:
“WHEREFORE, premises considered, the Decision of the court a quo is hereby MODIFIED.
Judgment is hereby rendered in favor of herein [respondent] Paraiso Development Corporation. The
assailed Contract to Sell is valid and binding with respect to the undivided proportionate share of
the six (6) signatories of this document, [herein petitioners], namely, Ernesto, Enriqueta, Librado,
Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer). The said [petitioners] are hereby ordered
to execute the Deed of Absolute Sale concerning their 6/8 share over the subject two parcels of land
and in
_______________
favor of herein [respondent] corporation, and to pay the latter the attorney’s fees in the sum of Ten
Thousand Pesos (P10,000.00) plus costs of suit.” 11
Aggrieved by the above-mentioned Decision, petitioners filed a Motion for Reconsideration
of the same on 2 July 2002. Acting on petitioners’ Motion for Reconsideration, the Court of
Appeals issued a Resolution dated 4 March 2003, maintaining its Decision dated 26 April
2002, with the modification that respondent tender payment to petitioners in the amount
of P3,216,560.00, representing the balance of the purchase price of the subject parcels of
land. The dispositive portion of the said Resolution reads:
“WHEREFORE, premises considered, the assailed Decision is hereby modified. Judgment is hereby
rendered in favor of herein [respondent] Paraiso Development Corporation. The assailed Contract to
Sell is valid and binding with respect to the undivided proportionate shares of the six (6) signatories
of this document, [herein petitioners], namely, Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr.,
and Leonora (all surnamed Oesmer). The said [petitioners] are hereby ordered to execute the Deed
of Absolute Sale concerning their 6/8 share over the subject two parcels of land in favor of herein
[respondent] corporation, and to pay the latter attorney’s fees in the sum of Ten Thousand Pesos
(P10,000.00) plus costs of suit. Respondent is likewise ordered to tender payment to the above-named
[petitioners] in the amount of Three Million Two Hundred Sixteen Thousand Five Hundred Sixty
Pesos (P3,216,560.00) representing the balance of the purchase price of the subject two parcels of
land.”12
Hence, this Petition for Review on Certiorari.
Petitioners come before this Court arguing that the Court of Appeals erred:
I. On a question of law in not holding that, the supposed Contract to Sell (Exhibit “D”) is not binding
upon petitioner Ernesto
_______________
Oesmer’s co-owners (herein petitioners Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora).
II. On a question of law in not holding that, the supposed Contract to Sell (Exhibit “D”) is void
altogether considering that respondent itself did not sign it as to indicate its consent to be bound by
its terms. Moreover, Exhibit “D” is really a unilateral promise to sell without consideration distinct
from the price, and hence, void.
Petitioners assert that the signatures of five of them namely: Enriqueta, Librado, Rizalino,
Bibiano, Jr., and Leonora, on the margins of the supposed Contract to Sell did not confer
authority on petitioner Ernesto as agent to sell their respective shares in the questioned
properties, and hence, for lack of written authority from the above-named petitioners to
sell their respective shares in the subject parcels of land, the supposed Contract to Sell is
void as to them. Neither do their signatures signify their consent to directly sell their
shares in the questioned properties. Assuming that the signatures indicate consent, such
consent was merely conditional. The effectivity of the alleged Contract to Sell was subject
to a suspensive condition, which is the approval of the sale by all the coowners.
Petitioners also assert that the supposed Contract to Sell (Exhibit “D”), contrary to the
findings of the Court of Appeals, is not couched in simple language.
They further claim that the supposed Contract to Sell does not bind the respondent
because the latter did not sign the said contract as to indicate its consent to be bound by
its terms. Furthermore, they maintain that the supposed Contract to Sell is really a
unilateral promise to sell and the option money does not bind petitioners for lack of cause
or consideration distinct from the purchase price.
The Petition is bereft of merit.
It is true that the signatures of the five petitioners, namely: Enriqueta, Librado,
Rizalino, Bibiano, Jr., and Leonora, on the Contract to Sell did not confer authority on
petitioner Ernesto as agent authorized to sell their respective
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Oesmer vs. Paraiso Development Corporation
shares in the questioned properties because of Article 1874 of the Civil Code, which
expressly provides that:
Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority
of the latter shall be in writing; otherwise, the sale shall be void.
The law itself explicitly requires a written authority before an agent can sell an immovable.
The conferment of such an authority should be in writing, in as clear and precise terms as
possible. It is worth noting that petitioners’ signatures are found in the Contract to Sell.
The Contract is absolutely silent on the establishment of any principal-agent relationship
between the five petitioners and their brother and co-petitioner Ernesto as to the sale of
the subject parcels of land. Thus, the Contract to Sell, although signed on the margin by
the five petitioners, is not sufficient to confer authority on petitioner Ernesto to act as their
agent in selling their shares in the properties in question.
However, despite petitioner Ernesto’s lack of written authority from the five petitioners
to sell their shares in the subject parcels of land, the supposed Contract to Sell remains
valid and binding upon the latter.
As can be clearly gleaned from the contract itself, it is not only petitioner Ernesto who
signed the said Contract to Sell; the other five petitioners also personally affixed their
signatures thereon. Therefore, a written authority is no longer necessary in order to sell
their shares in the subject parcels of land because, by affixing their signatures on the
Contract to Sell, they were not selling their shares through an agent but, rather, they were
selling the same directly and in their own right.
The Court also finds untenable the following arguments raised by petitioners to the
effect that the Contract to Sell is not binding upon them, except to Ernesto, because: (1)
the signatures of five of the petitioners do not signify their consent to sell their shares in
the questioned properties since petitioner Enriqueta merely signed as a witness to the said
Contract to Sell, and that the other petitioners, namely: Librado, Rizalino, Leonora, and
Bibiano, Jr., did not understand the importance and consequences of their action because
of their low degree of education and the contents of the aforesaid contract were not read
nor explained to them; and (2) assuming that the signatures indicate consent, such consent
was merely conditional, thus, the effectivity of the alleged Contract to Sell was subject to
a suspensive condition, which is the approval by all the co-owners of the sale.
It is well-settled that contracts are perfected by mere consent, upon the acceptance by
the offeree of the offer made by the offeror. From that moment, the parties are bound not
only to the fulfillment of what has been expressly stipulated but also to all the
consequences which, according to their nature, may be in keeping with good faith, usage
and law. To produce a contract, the acceptance must not qualify the terms of the offer.
However, the acceptance may be express or implied. For a contract to arise, the acceptance
must be made known to the offeror. Accordingly, the acceptance can be withdrawn or
revoked before it is made known to the offeror. 13
In the case at bar, the Contract to Sell was perfected when the petitioners consented to
the sale to the respondent of their shares in the subject parcels of land by affixing their
signatures on the said contract. Such signatures show their acceptance of what has been
stipulated in the Contract to Sell and such acceptance was made known to respondent
corporation when the duplicate copy of the Contract to Sell was returned to the latter
bearing petitioners’ signatures.
As to petitioner Enriqueta’s claim that she merely signed as a witness to the said
contract, the contract itself does not say so. There was no single indication in the said
contract that she signed the same merely as a witness. The fact that
_______________
Jardine Davies, Inc. v. Court of Appeals, 389 Phil. 204, 212; 333 SCRA 684, 693 (2000).
13
239
VOL. 514, FEBRUARY 5, 2007 239
Oesmer vs. Paraiso Development Corporation
her signature appears on the right-hand margin of the Contract to Sell is insignificant.
The contract indisputably referred to the “Heirs of Bibiano and Encarnacion Oesmer,” and
since there is no showing that Enriqueta signed the document in some other capacity, it
can be safely assumed that she did so as one of the parties to the sale.
Emphasis should also be given to the fact that petitioners Ernesto and Enriqueta
concurrently signed the Contract to Sell. As the Court of Appeals mentioned in its
Decision, the records of the case speak of the fact that petitioner Ernesto, together with
14
petitioner Enriqueta, met with the representatives of the respondent in order to finalize
the terms and conditions of the Contract to Sell. Enriqueta affixed her signature on the
said contract when the same was drafted. She even admitted that she understood the
undertaking that she and petitioner Ernesto made in connection with the contract. She
likewise disclosed that pursuant to the terms embodied in the Contract to Sell, she updated
the payment of the real property taxes and transferred the Tax Declarations of the
questioned properties in her name. Hence, it cannot be gainsaid that she merely signed
15
the Contract to Sell as a witness because she did not only actively participate in the
negotiation and execution of the same, but her subsequent actions also reveal an attempt
to comply with the conditions in the said contract.
With respect to the other petitioners’ assertion that they did not understand the
importance and consequences of their action because of their low degree of education and
because the contents of the aforesaid contract were not read nor explained to them, the
same cannot be sustained.
We only have to quote the pertinent portions of the Court of Appeals Decision, clear
and concise, to dispose of this issue. Thus,
_______________
Rollo, pp. 31-44.
14
TSN, 15 October 1991, pp. 13-14.
15
240
“First, the Contract to Sell is couched in such a simple language which is undoubtedly easy to read
and understand. The terms of the Contract, specifically the amount of P100,000.00 representing the
option money paid by [respondent] corporation, the purchase price of P60.00 per square meter or the
total amount of P3,316,560.00 and a brief description of the subject properties are well-indicated
thereon that any prudent and mature man would have known the nature and extent of the
transaction encapsulated in the document that he was signing.
Second, the following circumstances, as testified by the witnesses and as can be gleaned from the
records of the case clearly indicate the [petitioners’] intention to be bound by the stipulations
chronicled in the said Contract to Sell.
As to [petitioner] Ernesto, there is no dispute as to his intention to effect the alienation of the
subject property as he in fact was the one who initiated the negotiation process and culminated the
same by affixing his signature on the Contract to Sell and by taking receipt of the amount of
P100,000.00 which formed part of the purchase price.
 xxxx
As to [petitioner] Librado, the [appellate court] finds it preposterous that he willingly affixed his
signature on a document written in a language (English) that he purportedly does not understand.
He testified that the document was just brought to him by an 18 year old niece named Baby and he
was told that the document was for a check to be paid to him. He readily signed the Contract to Sell
without consulting his other siblings. Thereafter, he exerted no effort in communicating with his
brothers and sisters regarding the document which he had signed, did not inquire what the check
was for and did not thereafter ask for the check which is purportedly due to him as a result of his
signing the said Contract to Sell. (TSN, 28 September 1993, pp. 22-23)
The [appellate court] notes that Librado is a 43 year old family man (TSN, 28 September 1993,
p. 19). As such, he is expected to act with that ordinary degree of care and prudence expected of a
good father of a family. His unwitting testimony is just divinely disbelieving.
The other [petitioners] (Rizalino, Leonora and Bibiano Jr.) are likewise bound by the said
Contract to Sell. The theory adopted by the [petitioners] that because of their low degree of education,
they
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VOL. 514, FEBRUARY 5, 2007 241
Oesmer vs. Paraiso Development Corporation
did not understand the contents of the said Contract to Sell is devoid of merit. The [appellate court]
also notes that Adolfo (one of the coheirs who did not sign) also possess the same degree of education
as that of the signing co-heirs (TSN, 15 October 1991, p. 19). He, however, is employed at the
Provincial Treasury Office at Trece Martirez, Cavite and has even accompanied Rogelio Paular to
the Assessor’s Office to locate certain missing documents which were needed to transfer the titles of
the subject properties. (TSN, 28 January 1994, pp. 26 & 35) Similarly, the other co-heirs [petitioners],
like Adolfo, are far from ignorant, more so, illiterate that they can be extricated from their obligations
under the Contract to Sell which they voluntarily and knowingly entered into with the [respondent]
corporation.
The Supreme Court in the case of Cecilia Mata v. Court of Appeals (207 SCRA 753 [1992]), citing
the case of Tan Sua Sia v. Yu Baio Sontua (56 Phil. 711), instructively ruled as follows:
“The Court does not accept the petitioner’s claim that she did not understand the terms and
conditions of the transactions because she only reached Grade Three and was already 63 years of age
when she signed the documents. She was literate, to begin with, and her age did not make her senile
or incompetent. x x x.
At any rate, Metrobank had no obligation to explain the documents to the petitioner as nowhere
has it been proven that she is unable to read or that the contracts were written in a language not
known to her. It was her responsibility to inform herself of the meaning and consequence of the
contracts she was signing and, if she found them difficult to comprehend, to consult other persons,
preferably lawyers, to explain them to her. After all, the transactions involved not only a few hundred
or thousand pesos but, indeed, hundreds of thousands of pesos.
As the Court has held:
x x x The rule that one who signs a contract is presumed to know its contents has been applied
even to contracts of illiterate persons on the ground that if such persons are unable to read, they are
negligent if they fail to have the contract read to them. If a person cannot read the instrument, it is as
much his duty to procure some reliable persons to read and explain it to him, before he signs it, as it
would be to read it before he signed it if he were able to do and his failure to obtain a
242
242 SUPREME COURT REPORTS ANNOTATED
Oesmer vs. Paraiso Development Corporation
reading and explanation of it is such gross negligence as will estop from avoiding it on the ground
that he was ignorant of its contents.” 16
That the petitioners really had the intention to dispose of their shares in the subject parcels
of land, irrespective of whether or not all of the heirs consented to the said Contract to Sell,
was unveiled by Adolfo’s testimony as follows:
ATTY. GAMO: This alleged agreement between you and your other
brothers and sisters that unless
everybody will agree, the properties would not be sold, was that
agree-ment in writing?
WITNESS: No sir.
ATTY. GAMO: What you are saying is that when your brothers and
sisters except Jesus and you
did not sign that agreement which had been marked as [Exhibit]
“D”, your brothers and
sisters were grossly violating your agreem ent.
WITNESS: Yes, sir, they violated what we have agreed upon. 17
We also cannot sustain the allegation of the petitioners that assuming the signatures
indicate consent, such consent was merely conditional, and that, the effectivity of the
alleged Contract to Sell was subject to the suspensive condition that the sale be approved
by all the co-owners. The Contract to Sell is clear enough. It is a cardinal rule in the
interpretation of contracts that if the terms of a contract are clear and leave no doubt upon
the intention of the contracting parties, the literal meaning of its stipulation shall
control. The terms of the Contract to Sell made no mention of the condition that before it
18
can become valid and binding, a unanimous consent of all the heirs is necessary. Thus,
when the language of the
_______________
16Rollo, pp. 36-40.
17TSN, 28 September 1993, pp. 17-18.
18German Marine Agencies, Inc. v. National Labor Relations Commission, 403 Phil. 572, 588-589; 350 SCRA
629, 641 (2001).
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VOL. 514, FEBRUARY 5, 2007 243
Oesmer vs. Paraiso Development Corporation
contract is explicit, as in the present case, leaving no doubt as to the intention of the parties
thereto, the literal meaning of its stipulation is controlling.
In addition, the petitioners, being owners of their respective undivided shares in the
subject properties, can dispose of their shares even without the consent of all the co-heirs.
Article 493 of the Civil Code expressly provides:
“Article 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 allotted to him in the division upon the termination of the coownership.” [Emphases supplied.]
Consequently, even without the consent of the two co-heirs, Adolfo and Jesus, the Contract Limson v. Court of Appeals, G.R. No. 135929, 20 April 2001, 357 SCRA 209, 216.
19

Id., at p. 217.
to Sell is still valid and binding with respect to the 6/8 proportionate shares of the
20

petitioners, as properly held by the appellate court.
Therefore, this Court finds no error in the findings of the Court of Appeals that all the
petitioners who were signatories in the Contract to Sell are bound thereby.
The final arguments of petitioners state that the Contract to Sell is void altogether
considering that respondent itself did not sign it as to indicate its consent to be bound by
its terms; and moreover, the Contract to Sell is really a unilateral promise to sell without
consideration distinct from the price, and hence, again, void. Said arguments must
necessarily fail.
The Contract to Sell is not void merely because it does not bear the signature of the
respondent corporation. Respondent corporation’s consent to be bound by the terms of the
contract is shown in the uncontroverted facts which established that there was partial
performance by respondent of its obligation in the said Contract to Sell when it tendered
the amount of P100,000.00 to form part of the purchase price, which was
244
244 SUPREME COURT REPORTS ANNOTATED
Oesmer vs. Paraiso Development Corporation
accepted and acknowledged expressly by petitioners. Therefore, by force of law, respondent
is required to complete the payment to enforce the terms of the contract. Accordingly,
despite the absence of respondent’s signature in the Contract to Sell, the former cannot
evade its obligation to pay the balance of the purchase price.
As a final point, the Contract to Sell entered into by the parties is not a unilateral
promise to sell merely because it used the word option money when it referred to the
amount of P100,000.00, which also form part of the purchase price.
Settled is the rule that in the interpretation of contracts, the ascertainment of the
intention of the contracting parties is to be discharged by looking to the words they used
to project that intention in their contract, all the words, not just a particular word or two,
and words in context, not words standing alone. 19
245
VOL. 514, FEBRUARY 5, 2007 245
Oesmer vs. Paraiso Development Corporation
actually in the nature of earnest money or down payment when considered with the other
terms of the contract. Doubtless, the agreement is not a mere unilateral promise to sell,
but, indeed, it is a Contract to Sell as both the trial court and the appellate court declared
in their Decisions.
WHEREFORE, premises considered, the Petition is DENIED, and the Decision and
Resolution of the Court of Appeals dated 26 April 2002 and 4 March 2003, respectively, are
AFFIRMED, thus, (a) the Contract to Sell is DECLARED valid and binding with respect
to the undivided proportionate shares in the subject parcels of land of the six signatories
of the said document, herein petitioners Ernesto, Enriqueta, Librado, Rizalino, Bibiano,
Jr., and Leonora (all surnamed Oesmer); (b) respondent is ORDERED to tender payment
to petitioners in the amount of P3,216,560.00 representing the balance of the purchase
price for the latter’s shares in the subject parcels of land; and (c) petitioners are further
ORDERED to execute in favor of respondent the Deed of Absolute Sale covering their
shares in the subject parcels of land after receipt of the balance of the purchase price, and
to pay respondent attorney’s fees plus costs of the suit. Costs against petitioners.
SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinezand Callejo, Sr., JJ., concur.
Petition denied, judgment and resolution affirmed.

In the instant case, the consideration of P100,000.00 paid by respondent to petitioners

was referred to as “option money.” However, a careful examination of the words used in
the contract indicates that the money is not option money but earnest money. “Earnest
money” and “option money” are not the same but distinguished thus: (a) earnest money is
part of the purchase price, while option money is the money given as a distinct
consideration for an option contract; (b) earnest money is given only where there is already
a sale, while option money applies to a sale not yet perfected; and, (c) when earnest money
is given, the buyer is bound to pay the balance, while when the would-be buyer gives option
money, he is not required to buy, but may even forfeit it depending on the terms of the
option. 20

The sum of P100,000.00 was part of the purchase price. Although the same was
denominated as “option money,” it is
 G.R. No. 148943. August 15, 2002. * Gapacan vs. Omipet
AGNES GAPACAN, EUGENIA GAPACAN-KIAKI and MARILYN GAPACAN,
petitioners, vs. MARIA GAPACAN OMIPET, respondent.
Civil Code; Quieting of Title; An action to quiet title may be brought when there exists a cloud
on the title to real property or any interest therein.—Article 476 of the Civil Code provides that an
action to quiet title may be brought when there exists a cloud on the title to real property or
_______________
* SECOND DIVISION.
384
384 SUPREME COURT REPORTS ANNOTATED
Gapacan vs. Omipet
any interest therein. In the early case of Bautista v. Exconde, we held that a property owner
whose property rights were being disturbed may ask a competent court for a proper determination
of the respective rights of the party-claimants, not only to place things in their proper place, that is,
to require the one who has no right to refrain from acts injurious to the peaceful enjoyment of the
property not only of the rightful owner but also for the benefit of both with the view of dissipating
any cloud of doubt over the property.
Same; Property; Ownership; Tax declarations in themselves do not vest absolute ownership of
the property upon the declarant, nor do declarations of ownership for taxation purposes constitute
adequate evidence of ownership or of the right to possess realty.—The tax declarations private
respondent presented in evidence were clearly founded on fraudulent claims of ownership which did
not merit any probative value. Evidently, those tax declarations not only covered a mere fraction of
the total area disputed but were based on a false and capricious assertion of ownership over the
entire subject property. The tax declarations therefore were secured for the exclusive purpose of
excluding Antonio, the other legal heir. To be sure, tax declarations in themselves do not vest
absolute ownership of the property upon the declarant, nor do declarations of ownership for taxation
purposes constitute adequate evidence of ownership or of the right to possess realty.
Same; Same; Same; The juridical concept of co-ownership is unity of the object or property and
plurality of subjects; Each co-owner, jointly with the other co-owners, is the owner of the whole
property, but at the same time of the undivided aliquot part.—In Consignado v. Court of Appeals it
was explained that “the juridical concept of co-ownership is unity of the object or property and
plurality of subjects x x x x Each co-owner, jointly with the other co-owners, is the owner of the whole
property, but at the same time of the undivided aliquot part x x x x Each co-owner has the right to
sell, assign or dispose of his share, unless personal rights are involved x x x and therefore, he may
lose such rights to others, as by prescription thereof by a co-owner x x x x”
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Public Attorney’s Office for petitioners.
Fernando Law Office for private respondent.
385
VOL. 387, AUGUST 15, 2002 385
BELLOSILLO, J.:
Man is bound to his land and will remain so; it is source of his strength, the fountainhead
of his life. Yet ownership of this natural resource does not always insure harmony, security
and well-being, for many a time it causes divisiveness and dissension within the
community, even among the closest of kin. This case depicts the situation contemplated
herein.
Paicat Gapacan, a native Igorot of the Kankanai tribe, was the primitive possessor of
an unregistered land with an area of 1.0111 hectares situated in Abatan, Bauko, Mt.
Province, divided into three (3) parcels of rice land and another parcel planted to camote,
and declared by him for taxation purposes for the first time on 27 March 1931. Paicat had
1
two (2) children, Maria and Antonio both surnamed Gapacan.
In his adulthood, Antonio left Abatan to try his luck in the mine fields of Mankayan,
Benguet Province. Consequently, his sister Maria who remained in Abatan took care of
their aging father until his death during the Second World War and eventually took over
the cultivation of their father’s land.
It came to pass that Antonio married Agnes Gapacan and begot two (2) daughters,
Eugenia Gapacan and Marilyn Gapacan, with her. After he retired from the mines, Antonio
and his family returned to Abatan. On 15 June 1954, Antonio executed an Affidavit of
Transfer of Real Property showing that the property described under Tax Declarations Nos.
0808 and 37642 had been transferred to him by his sister Maria Gapacan, making him in
effect the legal owner of the property in question. The Affidavit of Transfer of Real
Property was allegedly thumbmarked by Maria’s husband, Pedro Omipet, in her
behalf. Thus, by virtue of the Affidavit of Transfer of Real Property, Antonio had the
2
property in question declared in his name for taxation purposes in 1954. Since then, Agnes
3
Gapacan and her daughters Eugenia and Marilyn had been occupying
_______________
1Exh. “B”.
2Exh. “1”.
3Exhs. “2” to “8”.
386
386 SUPREME COURT REPORTS ANNOTATED
Gapacan vs. Omipet
and cultivating the three (3) parcels of rice land and a parcel devoted to camote subject
matter of the present controversy.
Sometime in the second week of April 1992 Maria hired the services of Orlando Boleyley
and Gaston Gapacan to clear and cultivate some portions of the contested land but they
were stopped by petitioners. Petitioners even went to the extent of filing a case for Forcible
Entry against Maria’s granddaughter Gertrude Beguil and three (3) others before the
Municipal Circuit Trial Court of Bauko-Sabangan, Mt. Province.
 Petitioners alleged ownership of the disputed agricultural field which they claimed was
covered by a tax declaration in the name of the late Antonio Gapacan. Because of the
failure of the defendants to file their respective answers to the complaint within the
reglementary period, the Municipal Circuit Trial Court rendered a decision on 16
September 1992 ordering defendants to vacate the land in dispute and restore possession
thereof to the plaintiffs. 4 evidence of the heirs of Antonio Gapacan as null and void.
On 9 December 1992 respondent Maria Gapacan Omipet filed a complaint for Quieting
of Title before the proper Regional Trial Court praying that she be declared the lawful
owner of the property and that herein petitioners be ordered to refrain from making further
encroachments thereon.
At the time of the filing of the complaint for Quieting of Title, Maria who could neither
read nor write was already a very old woman. She alleged in her complaint that the
5
disputed land was part of her inheritance from her deceased parents which she in fact had
declared in her name for taxation purposes in 1948 although the area was only 1,188
square meters for which Tax Declaration No. A-0808 was issued in her name. She further 6
contended that she merely lent the parcels of rice land to petitioners when Antonio
Gapacan returned to Abatan after his retirement.
On 6 May 1994 the trial court dismissed the complaint and adjudged defendants, herein
petitioners, to have the right of posses-
_______________
4Original Records, p. 119.
5At the trial before the RTC-Br. 36, Bontoc, Mt. Province, on 16 July 1993, respondent testified that she was
90 years old and a widow:
6Exh. “A”.
387
VOL. 387, AUGUST 15, 2002 387
Gapacan vs. Omipet
sion over the parcel of land delineated as Lot 1. It likewise enjoined private respondent
Maria Gapacan Omipet from performing acts injurious or prejudicial to the possession of
the premises by petitioners, explaining that—
x x x the bare assertions of Maria Omipet that she directly inherited the contested area from her
parents is insufficient to sustain her position. Coming from the plaintiff herself, her testimony on
the matter is self-serving and hence unreliable as the better part of judicial prudence dictates. The
declarations of the plaintiff to the end that she has been the actual possessor of the land subject
hereof for the last three decades and that she merely lent the parcels of rice paddies in question to
the defendants, albeit confirmed in the sense by her witnesses, are not very convincing x x x x Aside
from the observation that being a party to the case Maria Omipet is pre-disposed to report matters
as they are wished for, rather than as they really are; the confirmatory statements of witnesses
Baguil, Locaney, Tambol, Dilem and Astudillo on the point are much too superficial, transparently
mechanical, and palpably biased to be judiciously persuasive. Baguil has the most to gain or lose
pending the outcome of this proceeding. Locaney and Timbol on account of close blood ties or
gratitude to the plaintiff are discernibly partisans of the latter. While Dilem and Astudillo merely
mouthed their lines without emotional authenticity. By and large, the testimonies of the plaintiff
and all her witnesses in this suit, although under oath, are simply difficult to swallow, hook, line and
sinker. 7
Maria Gapacan Omipet appealed to the Court of Appeals alleging that the trial court (a)
“unreasonably erred in brushing aside the coherent testimony of plaintiff-appellant x x x
and her credible and unbiased witnesses, and in failing to give credence to her possession
and ownership of the land in question, as substantiated by her actual and existing
improvements found on the land in question;” and (b) failed to declare the documentary
8
On 12 March 2001 the Court of Appeals rendered the assailed Decision declaring the
property described as Lot 1 in the Sketch
_______________
Decision penned by Judge Artemio B. Marrero, RTC-Br. 36, Bontoc, Mt. Province; Rollo, p. 30.
7
8Rollo, Annex “D”.
388
388 SUPREME COURT REPORTS ANNOTATED
Gapacan vs. Omipet
Plan to be the common property of both plaintiff-appellant Maria Gapacan Omipet and
9
defendant-appellees Agnes Gapacan, Eugenia Gapacan-Kiaki and Marilyn Gapacan. It
also ordered the equitable partition of the disputed property between the two (2)
contending parties. 10
The appellate court made the following preliminary declarations: (a) nullifying Tax
Declaration No. A-0808 in the name of Maria Gapacan Omipet which covered only 1,188
square meters or 12% of the total area of the land in question (Exh. “A”) as it was
unlawfully secured by her to the exclusion of her brother Antonio Gapacan; (b) nullifying
Tax Declaration No. A-9844 (Exh. “2”) in the name of Antonio Gapacan and the tax
declarations as these were based among others on an Affidavit of Transfer of Real
Property which was void as the purported transfer was not signed by Maria Gapacan
Omipet; (c) nullifying Tax Declaration No. 36555 (Exh. “5”) in the name of Antonio
Gapacan and all tax declarations that revised it because these were based upon a false
information that the property was being declared for the first time and was intended to lay
the legal basis for the illegal claim by Antonio Gapacan that he was the sole owner of the
disputed property; and finally, (d) denying probative value to the Agreement (Exh. “10”)
because it was based upon void tax declarations and false claims of dominion and right of
possession over the land in question.
On the right of possession, the appellate court opined that although Antonio Gapacan
during his lifetime and his heirs upon his death had been in actual possession of the rice
lands in question except the “camote” land since 1971 their possession was tainted with
bad faith since—
Antonio knew that the property was his father’s. His father did not give it to either of his children,
the latter’s claims to, the contrary notwithstanding. Antonio, of course, knew that Maria was legally
entitled to a share in said property so that when he fraudulently caused the execution of the Affidavit
of Transfer of Real Property and the issuance in his name
_______________
9 Exh. “14”.
 10 Decision penned by Associate Justice Hilarion L. Aquino with Associate Justices Mercedes Gozo-Dadole and Jose L. Sabio,
Jr.; Rollo, p. 80.
389
VOL. 387, AUGUST 15, 2002 389
Gapacan vs. Omipet
of T.D. No. H-9844 (Exhibit “2”) he acted in gross bad faith (Art. 256, Civil Code).
By virtue of the evident bad faith of both parties, the Court of Appeals ruled that the fruits
of the land in question, which they appropriated for themselves, compensated each other
which rendered the need for an accounting irrelevant.
In view thereof, the appellate court declared Lot 1 in the Sketch Plan as common
property of plaintiff-appellant Maria Gapacan Omipet on one hand, and defendant-
appellees Agnes Gapacan, Eugenia Gapacan-Kiaki and Marilyn Gapacan on the other; and
ordered the fair and equitable partition of Lot 1 with one-half for plaintiff-appellant and
the other for defendant-appellees.
Their Motion for Reconsideration having been denied on 4 July 2001, petitioners now
interpose the present petition for review seeking the reversal of the Decision of the Court
of Appeals of 12 March 2001 which declared an unregistered parcel of land identified in
the Sketch Plan as Lot 1 the common property of both petitioners Agnes Gapacan, Eugenia
Gapacan-Kiaki and Marilyn Gapacan on one hand, and private respondent Maria Gapacan
Omipet on the other, and its subsequent Resolution of 4 July 2001 denying
petitioners’ Motion for Reconsideration.
The following facts appear undisputed: that the subject parcels of land were originally
owned by Paicat Gapacan who upon his death was survived by his two (2) children, private
respondent Maria Gapacan, and Antonio Gapacan; that the subject realty consisted of
three (3) parcels of rice land and another parcel planted to camote with a total approximate
area of 1.0111 hectares known as Lot 1 in the Sketch Plan; that the land was part of the
11
ten (10) parcels allegedly given to private respondent by her parents, seven (7) of which
had already been distributed by her among her children and other relatives; that in 1948,
a portion of 1,188 square meters of the total land area was tax-declared by private
respondent under Tax Declaration No. A-0808; that sometime in 1954 Antonio Gapacan
caused the cancellation of the tax declara-
_______________
11Prepared by Tax Mappers of the Office of the Provincial Assessor during the ocular inspection of the area
per court order.
390
390 SUPREME COURT REPORTS ANNOTATED
Gapacan vs. Omipet
tion in the name of Maria Omipet and transferred the subject property in his name by
virtue of an Affidavit of Transfer of Real Property; and, that on the basis of the Affidavit of
Transfer of Real Property, Antonio also caused the land to be declared in his name for
taxation purposes as reflected in Tax Declaration No. A-9844.
Petitioners, as heirs and successors-in-interest of the late Antonio Gapacan, argue that
this case stemmed from a complaint for Quieting of Title filed by private respondent, and
on the basis of Art. 477 of the Civil Code which requires the plaintiff to show legal or
equitable title to, or interest in the subject real property, the trial court was correct in
ruling that private respondent had not sufficiently shown that she had the
legal, i.e., registered, title over the disputed property. Thus, according to them, the ruling
of the Court of Appeals declaring the subject land as the common property of the party-
litigants and ordering its partition is a complete deviation from the cause of action of the
case and the findings of fact of the trial court. They now pray for the reinstatement of the
decision of the trial court insofar as it ruled that they had the right of possession over the
disputed land.
The argument is bereft of merit. Article 476 of the Civil Code provides that an action to
quiet title may be brought when there exists a cloud on the title to real property or any
interest therein. In the early case of Bautista v. Exconde, we held that a property owner
12
whose property rights were being disturbed may ask a competent court for a proper
determination of the respective rights of the party-claimants, not only to place things in
their proper place, that is, to require the one who has no right to refrain from acts injurious
to the peaceful enjoyment of the property not only of the rightful owner but also for the
benefit of both with the view of dissipating any cloud of doubt over the property. It goes
without saying therefore that the appellate court in resolving the present controversy is
well within its authority to adjudicate on the respective rights of the parties, that is, to
pass upon the ownership of the subject property; hence to declare the same as common
property of the party-litigants. Besides, private respondent Maria Gapacan Omipet
instituted the present action for the purpose of asking the
_______________
70 Phil. 398 (1940).
12
391
VOL. 387, AUGUST 15, 2002 391
Gapacan vs. Omipet
court to pass judgment upon the issue of ownership of the disputed property with the hope
that she would be declared its rightful owner.
Private respondent anchors her claim of absolute dominion over the subject property
on the ground that she inherited the same from her parents, further noting that the family
of Antonio Gapacan possessed the property by reason alone of her tolerance. In view of this
claim, it was incumbent upon private respondent to prove by satisfactory evidence that she
was legally designated the sole owner of the property in litigation. Unfortunately, there
was paucity of proof that that in fact was the case. The tax declarations private respondent
presented in evidence were clearly founded on fraudulent claims of ownership which did
not merit any probative value. Evidently, those tax declarations not only covered a mere
fraction of the total area disputed but were based on a false and capricious assertion of
ownership over the entire subject property. The tax declarations therefore were secured
for the exclusive purpose of excluding Antonio, the other legal heir. To be sure, tax
declarations in themselves do not vest absolute ownership of the property upon the
declarant, nor do declarations of ownership for taxation purposes constitute adequate
evidence of ownership or of the right to possess realty. Further, the testimonies given by
private respondent’s witnesses buttressing her claim of dominion were adjudged, and
rightly so, as inconclusive and of dubious reliability by both the trial court and the Court
of Appeals.
On the question of the right of possession, as correctly pointed out by the appellate
court, the evidence preponderates in favor of Antonio Gapacan and subsequently his heirs
upon his death. It has been clearly established that Antonio and his family had been in
possession of the subject realty since 1971. However, Antonio could not honestly claim the
rights of a possessor in good faith since his tax declarations, and more so, his Affidavit of
Transfer of Real Property, were either spurious or founded on false and unlawful claims.
The parcels of land in question, as part of the hereditaments of Paicat, a common ancestor
of Maria and Antonio, were given, to neither of them in particular. It is difficult to believe
that Maria and Antonio were blissfully ignorant of their respective legal rights over the
disputed realty. As the two (2) surviving heirs of the Paicat Gapacan, neither Maria nor
Antonio can claim absolute
392
392 SUPREME COURT REPORTS ANNOTATED
Gapacan vs. Omipet
ownership over the entire property to the prejudice of the other, for each, in legal
contemplation, is entitled to only one-half (1/2) pro-indiviso share of his or her father’s
estate. Prior to partition, Maria and Antonio, and upon the latter’s death, the petitioners,
hold the disputed property in their capacity as co-owners.
In Consignado v. Court of Appeals it was explained that “the juridical concept of co-
13

ownership is unity of the object or property and plurality of subjects x x x x Each co-owner,
jointly with the other co-owners, is the owner of the whole property, but at the same time
of the undivided aliquot part x x x x Each co-owner has the right to sell, assign or dispose
of his share, unless personal rights are involved x x x and therefore, he may lose such rights
to others, as by prescription thereof by a co-owner x x x x” The Court, after a thorough
review of the records, finds no plausible reason to disturb the findings and conclusions of
the Court of Appeals in its assailed Decision.
WHEREFORE, the petition is DENIED for lack of merit. The Decision of the Court of
Appeals dated 12 March 2001, which declared Lot 1 in the Sketch Plan as the common
14

property of both petitioners Agnes Gapacan, Eugenia Gapacan-Kiaki and Marilyn

Gapacan on one hand, and private respondent Maria Gapacan Omipet on the other, and
ordered its equitable partition between the contending parties, as well as the Resolution
dated 4 July 2001 denying reconsideration, is AFFIRMED. No costs.
SO ORDERED.
Mendoza, Quisumbing and Corona, JJ., concur.
Petition denied, judgment affirmed.
 No. L-30994. September 30, 1982. * 32,383 square meters, more or less. Private respondents Genaro Puyat and Brigida Mesina
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.
Civil Law; Redemption; Legal redemption, scope and nature of; Legal redemption intended to
minimize co-ownership; Words and phrases; "Third person," meaning of.—Legal redemption is in the
nature of a privilege created by law partly for reasons of public policy and partly for the benefit and
convenience of the redemptioner, to afford him a way out of what might be a disagreeable or
inconvenient association into which he has been thrust. (10 Manresa, 4th Ed., 317.) It is intended to
minimize co-ownership. The law grants a co-owner the exercise of the said right of redemption when
the shares of the other owners are sold to "a third person." A third person, within the meaning of this
Article, is anyone who is not a co-owner. (Sentencia of February 7, 1944 as cited in Tolentino,
Comments on the Civil Code, Vol. V, p. 160.)
Same; Same; Effect of denial of right of redemption to co-owners whose shares over properties
were sold to a third person.—Private
________________
*FIRST DIVISION.
129
VOL. 117, SEPTEMBER 30, 1982 129
Basa vs. Aguilar
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."
APPEAL by certiorari to review the decision of the Court of First Instance of Pampanga.
The facts are stated in the opinion of the Court.
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
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.
130
130 SUPREME COURT REPORTS ANNOTATED
Basa vs. Aguilar
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 (P1000.00) 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 philosophy of the same.
Article 1620 of the Civil Code reads:
"ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of 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 minimize co-ownership. The law grants
a co-owner the exercise of the said right of redemption when the shares of the other owners
are sold to "a third person." A third person, within the meaning of this Article, is
131
VOL. 117, SEPTEMBER 30, 1982 131
Basa vs. Aguilar
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 co-
respondents Primo Tiongson and Macaria Puyat. The private respondents shall pay the
costs.
SO ORDERED.
Teehankee (Chairman), Makasiar, Melencio-Herrera, Plana, Relova and Gutierrez,
Jr., JJ., concur.
Judgment reversed.
 No. L-72694. December 1, 1987. *
AURORA DEL BANCO, EVELYN DEL BANCO, FEDERICO TAIÑO, SOLEDAD TAIÑO,
JOVENCIO TAIÑO, SAMSON TAIÑO, NOE TAIÑO, SOCORRO TAIÑO and CLEOFAS
TAIÑO, petitioners, vs.INTERMEDIATE APPELLATE COURT (Second Civil Cases
Division), ALEJANDRA PANSACOLA, LEONILA ENCALLADO, VEDASTO
ENCALLADO, JOSE YEPES, et al, respondents.
Property; Co-ownership; Sale; A Co-owner has the right to sell his portion of the co-owned
property; The sale by one co-owner of part of a particular lot co-owned is within his right pro-indiviso
is valid in its entirety but he may not convey a physical portion with boundaries of the land owned in
common.—It must be admitted that the word "partition" is not infrequently used both in popular and
technical parlance (Fule vs. Fule, 52 Phil. 750 [1929]). For purposes of the aforementioned case,
evidently the Court used the word "partition" to refer to the distribution of the Cagbalite Island
agreed upon by the original owners and in the later agreements, by the heirs and their subsequent
successors-in-interest. There need not be a physical partition; a distribution of the Island even in a
state of indiviso or was sufficient in order that a co-owner may validly sell his portion of the coowned
property. The sale of part of a particular lot thus co-owned by one co-owner was within his right pro-
indiviso is valid in its entirety (Pamplona vs. Moreto, 96 SCRA 775 [1980]) but he may not convey a
physical portion with boundaries of the land owned in common (Mercado vs. Liwanag, 5 SCRA 472
[1962]). Definitely, there was no physical partition of the Island in 1859. Neither could there have
been one in 1894 because the manner of subdividing the Island was only provided for in the latter
agreements entered into by the heirs in 1907 and 1908. There was a distribution of the Island in
1868 as agreed upon by the original co-owners in their agreement of April 11, 1868. Any agreement
entered into by the parties in 1894 could be no more than another agreement as to the distribution
of the Island among the heirs of the original co-owners and the preparation of a tentative plan by a
practical surveyor, a Mr. Jose Garcia, mentioned in the first paragraph of the 1907 agreement,
preparatory to the preparation of the real plan to be prepared by the surveyor Amadeo, mentioned
in the agreement of April 18,1908.
_______________
*FIRST DIVISION.
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56 SUPREME COURT REPORTS ANNOTATED
Del Banco vs. Intermediate Appellate Court
Same; Same; Same; Same; Sale of Domingo Arce of the portion allocated to him through pro-
indiviso is valid.—What is important in the Court's ruling in the three aforementioned cases is that,
the fact that there was a distribution of the Island among the co-owners made the sale of Domingo
Arce of the portion allocated to him though proindiviso, valid. He thus disposed of all his rights and
interests in the portion given to him.
Same; Same; Actual possession and enjoyment of several portions of the property does not
provide proof that there was actual partition and co-ownership terminated; It is a basic principle in
the law of co-ownership that no individual co-owner can claim any definite portion thereof.—lt is not
disputed that some of the private respondents and some of the petitioners at the time the action for
partition was filed in the trial court have been in actual possession and enjoyment of several portions
of the property in question (Rollo, p. 148). This does not provide any proof that the Island in question
has already been actually partitioned and co-ownership terminated. A co-owner cannot, without the
conformity of the other co-owners or a judicial decree of partition issued pursuant to the provision of
Rule 69 of the Rules of Court (Rule 71 of the Old Rules), adjudicate to himself in fee simple a
determinate portion of the lot owned in common, as his share therein, to the exclusion of other co-
owners (Santos, Jr. vs. Buenconsejo, 14 SCRA 407 [1965]; Carvajal vs. Court of Appeals, 112 SCRA
237 [1982]). It is a basic principle in the law of coownership both under the present Civil Code as in
the Code of 1889 that no individual co-owner can claim any definite portion thereof (Diversified
Credit Corporation vs. Rosada, 26 SCRA 470 [1968]. It is therefore of no moment that some of the
co-owners have succeeded in securing cadastral titles in their names to some portions of the Island
occupied by them (Rollo, p. 10).
Same; Same; Same; Agreement to subdivide the property not enough, there must be a
subdivision plan drawn and actually occupied the respective portion in the plan and title issued
accordingly.—lt is not enough that the co-owners agree to subdivide the property. They must have a
subdivision plan drawn in accordance with which they take actual and exclusive possession of their
respective portions in the plan and titles issued to each of them accordingly (Caro vs. Court of
Appeals, 113 SCRA 10 [1982]). The mechanics of actual partition should follow the procedure laid
down in Rule 69 of the Rules of Court.
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VOL. 156, DECEMBER 1, 1987 57
Del Banco vs. Intermediate Appellate Court
Same; Same; Same; Same; Actual possession and enjoyment by some of the petitioners cannot
be considered a repudiation of the coownership.—Neither can such actual possession and enjoyment
of some portions of the Island by some of the petitioners herein be considered a repudiation of the co-
ownership. It is undisputed that the Cagbalite Island was purchased by the original co-owners as a
common property and it has not been proven that the Island had been partitioned among them or
among their heirs. While there is coownership, a co-owner's possession of his share is co-possession
which is linked to the possession of the other co-owners.
Same; Same; Partition; Action to demand partition is imprescriptible or cannot be barred by
laches.—An action for partition does not prescribe. Article 403 of the Old Civil Code, now Article 497,
provides that the assignees of the co-owners may take part in the partition of the common property,
and Article 400 of the Old Code, now Article 494 provides that each co-owner may demand at any
time the partition of the common property, a provision which implies that the action to demand
partition is imprescriptible or cannot be barred by laches (Budlong vs. Pondoc, 79 SCRA 24 11977]).
An action for partition does not lie except when the co-ownership is properly repudiated by the co-
owner (Jardin vs. Hollasco, 117 SCRA 532 [1982]).
PETITION for certiorari to review the decision and resolution of the Court of Appeals.
Jurado, J.
The facts are stated in the opinion of the Court.
PARAS, J.:
This is a petition for review on certiorari by way of appeal from: (a) the decision of
respondent Court of Appeals (Intermediate Appellate Court) promulgated on May 17, 1985
**
in AC-G.R. CV No. 70460, entitled "Alejandra Pansacola, et al. vs. Domen Villabona del
Banco, et al." which reversed and set aside the judgment of the trial court; and (b) its
***
resolution*** of October 15, 1985 in the same case, denying peti-
_______________
 Penned by Associate Justice Desiderio P. Jurado, concurred in by Justices Crisolito Pascual, Jose C.
**
Campos, Jr. and Ma. Rosario Quetulio-Losa.
Penned by Judge Fernando A. Santiago.
***
58
58 SUPREME COURT REPORTS ANNOTATED
Del Banco vs. Intermediate Appellate Court
tioners' motion for reconsideration of the aforementioned decision and their supplement to
motion for reconsideration.
The dispositive portion of the questioned decision (Rollo, p. 97) reads, as follows:
"ACCORDINGLY, the decision appealed from is hereby SET ASIDE insofar as it dismisses the
complaint, and another one entered—
1. (1)Declaring plaintif f s-appellants and defendants-appellees, in their respective capacities
as described in par. V of the complaint, as co-owners of the property in dispute, but subject
to the four-part proindiviso division already made by said property;
2. (2)Ordering the cancellation of all certificates of title that may have been issued to any of
the parties hereto; and
3. (3)Ordering the complete and final partition of the subject property in conformity with law.
For this purpose, this case is hereby remanded to the Court of origin so that a final partition
shall be made in accordance with Sections 2, 3, et. seq., Rule 69 of the Rules of Court.
Let a copy of this decision be furnished to the Register of Deeds f or the Province of Quezon.''
The facts of the case are taken from the decision of the Appellate Court (Rollo, p. 39) as
follows:
In a document executed in the Municipality of San Rafael, Bulacan, on February 11,
1859, three brothers, Benedicto Pansacola, Jose Pansacola and Manuel Pansacola (known
as Fr. Manuel Peña) entered into an agreement which provided, among others:
1. (1)That they will purchase from the Spanish Government the lands comprising the Island
of Cagbalite which is located within the boundaries of the Municipality of Mauban,
Province of Tayabas (now Quezon) and has an approximate area of 1,600 hectares;
2. (2)That the lands shall be considered after the purchase as their common property;
3. (3)That the co-ownership includes Domingo Arce and Baldomera Angulo, minors at that
time represented by their father, Manuel Pansacola (Fr. Manuel Peña) who will con
59
VOL. 156, DECEMBER 1, 1987 59
Del Banco vs. Intermediate Appellate Court
1. tribute for them in the proposed purchase of the Cagbalite Island;
2. (4)That whatever benefits may be derived from the Island shall be shared equally by the co-
owners in the following proportion: Benedicto Pansacola—1/4 share; Jose Pansacola—1/4
share; and, Domingo Arce and Baldomera Angulo—2/4 shares which shall be placed under
the care of their father, Manuel Pansacola (Fr. Manuel Peña).
On August 14, 1866, co-owners entered into the actual possession and enjoyment of the
Island purchased by them from the Spanish Government. On April 11,1868 they agreed to
modify the terms and conditions of the agreement entered into by them on February 11,
1859. The new agreement provided for a new sharing and distribution of the lands,
comprising the Island of Cagbalite and whatever benefits may be derived therefrom, as
follows:
1. "(a)The first one-fourth (1/4) portion shall belong to Don Benedicto Pansacola;
2. (b)The second one-fourth (1/4) portion shall belong to Don Jose Pansacola;
3. (c)The third one-fourth (1/4) portion shall henceforth belong to the children of their deceased
brother, Don Eustaquio Pansacola, namely: Don Mariano Pansacola; Maria
Pansacola and Don Hipolito Pansacola;
4. (d)The fourth and last one-fourth (1/4) portion shall belong to their nephews and nieces (1)
Domingro Arce, (2) Baldomera Angulo, (3) Marcelina Flores,(4) Francisca
Flores, (5) Candelaria dela Cruz, and (6) Gervasio Pansacola who, being all minors, are
still under the care of their brother, Manuel Pansacola (Fr. Manuel Peña). The latter is
the real father of said minors.''
About one hundred years later, on November 18, 1968, private respondents brought a
special action for partition in the Court of First Instance of Quezon, under the provisions
of Rule 69 of the Rules of Court, including as parties the heirs and successors-in-interest
of the co-owners of the Cagbalite Island in the second contract of co-ownership dated April
11,1968. In their answer some of the defendants, petitioners herein, interposed such
defenses as prescription, res judicata, exclusive
60
60 SUPREME COURT REPORTS ANNOTATED
Del Banco vs. Intermediate Appellate Court
ownership, estoppel and laches.
After trial on the merits, the trial court rendered a decision dated November 6, 1981
****
dismissing the complaint, the dispositive portion of which reads as follows:
"WHEREFORE, and in the light of all the foregoing this Court finds and so holds that the Cagbalite
Island has already been partitioned into four (4) parts among the original co-owners or their
successors-in-interest.
Judgment is therefore rendered for the defendants against the plaintiffs dismissing the
complaint in the above entitled case.
Considering that the cross claims filed in the above entitled civil case are not compulsory cross
claims and in order that they may be litigated individually the same are hereby dismissed without
prejudice.
IT IS SO ORDERED."
The motion for reconsideration filed by the plaintiffs, private respondents herein, was
denied by the trial court in an order dated February 25, 1982 (Record on Appeal, p. 241).
On appeal, respondent Court reversed and set aside the decision of the lower court
(Rollo, p. 117). It also denied the motion for reconsideration and the supplement to motion
for reconsideration filed by private respondents, in its resolution dated October 15, 1983
(Rollo, p. 86).
 Instant petition was filed with the Court on December 5, 1985 (Rollo, p. 12). Petitioners
Josefina Pansacola, et al. having filed a separate petition (G.R. No. 72620) on the same
subject matter and issues raised in the instant petition, the counsel for private respondents
filed a consolidated comment on the separate petitions for review on February 24,1986
with the First Division of the Court (Rollo, p. 119). It appears that counsel for petitioners
also filed a consolidated reply to the consolidated comment of private respondents as
required by the Second Division of the Court (Rollo, p. 151). However, petitioners filed a
separate reply in the instant case on February 18, 1987 (Rollo, p. 168)as required by the
Court in a Resolution of the Second Division dated November 24, 1986 (Rollo, p. 160).
_______________
Rendered by Judge Fernando A. Santiago.
****
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VOL. 156, DECEMBER 1, 1987 61
Del Banco vs. Intermediate Appellate Court
On May 19, 1987, private respondents in the instant petition filed a manifestation praying
for the denial of the instant petition in the same manner that G.R. No. 72620was denied
by the Court in its Resolution dated July 23, 1986 (Rollo, p. 151). Their rejoinder to the
reply of petitioners was filed on May 25, 1987 (Rollo, p. 179).
On June 8, 1987, the Court resolved to give due course to the petition (Rollo, p. 192).
The memorandum of private respondents was mailed on July 18, 1987 and received in the
Court on July 29, 1987 (Rollo, p. 112); the memorandum for petitioners was mailed on
August 18, 1987 and received in the Court on September 7, 1987 (Rollo, p. 177).
The sole issue to be resolved by the Court is the question of whether or not Cagbalite
Island is still undivided property owned in common by the heirs and successors-in-interest
of the brothers, Benedicto, Jose and Manuel Pansacola.
The Pansacola brothers purchased the Island in 1859 as common property and agreed
on how they would share in the benefits to be derived from the Island. On April 11,1868,
they modified the terms and conditions of the agreement so as to include in the co-
ownership of the island the children of their deceased brothers Eustaquio and the other
children of Manuel Pansacola (Fr. Manuel Peña) who were committed in the agreement of
February 11, 1859. The new agreement provided for a new sharing proportion and
distribution of the Island among the co-owners.
On January 20, 1907, the representative of the heirs of all the original owners of
Cagbalite Island entered into an agreement to partition the Island, supplemented by
another agreement dated April 18, 1908. The contract dated January 20, 1907 provides as
follows:
"Sa Mauban, Tayabas, ika 20 ng Enero ng 1907 caming mga quinatawan ng mga ibang coherederos
na hindi caharap, sa pulong na ito, sa nasa naming lahat na magcaroon na ng catahimikan ang
aming-aming cabahagui sa Pulong Kagbalete, sumacatuid upang mapagtoos ang hangahan ng apat
na sapul na pagcacabahagui nitong manang ito, pagcacausap na naming lahat at maihanay at
mapagtalonan ang saysay ng isa't isa, ay cusa naming pinagcasunduan at pinasiya ang
nangasosonod:—
62
62 SUPREME COURT REPORTS ANNOTATED
Del Banco vs. Intermediate Appellate Court
Una: Ang malaquing calupaan, alis ang lahat na pacatan ay babahaguin alinsunod sa pagcabaki na
guinawa sa croquis na niyari ng practico agrimensor Don Jose Garcia.
Icalawa: Ang Lomingoy, doon ang tuid na guhit sa ilong ng Pait, ay pagaapatin ding sinlaqui
ayon sa dating pagkakabaki.
Icatlo: Cung magawa na ang tunay na plano at icapit na sa lupa, paglalagay ng nadarapat na
mojon, ang masacupan ng guhit, sumacatuid ang caingin at pananim ng isa na nasacupan ng pucto
na noocol sa iba, ay mapapasulit sa dapat magari, na pagbabayaran nito ang nagtanim sa
halagang:—bawat caponong niog na nabunga, P1.00 'un peso); cung ang bias ay abot sa isang vara,
P0.50; cung bagong tanim o locloc, P0.50 ang capono.
Icapat: Ang lahat na pacatan ay bacod na pagaapatin at bawat bahagui ay noocol sa isat-isa sa
apat na sanga ng paganacang nagmana.
Icalima: Upang ang naipatanim ng bawat isa ay matama sa canya ng mailagan ang hirap ng
loob ng nagatikha; ay pagtotolongtolongan ng lahat naiba na mahusay ang dalawang partes na
magcalapit na mapa ayong tumama, hangang may pagluluaran, sa nagsikap at maoyanam, maidaco
sa lugar na walang cailangang pagusapan.
Icanim: Ang casulatang ito, cung mapermahan na na magcacaharap sampong ng mga ibang
coherederos na notipicahan nitong lahat na pinagcasundoan ay mahahabilin sa camay ng
agrimensor, Amadeo Pansacola, upang canyang mapanusugan ang maipaganap ang dito'y naootos.
Na sa catunayan at catibayan ng lahat na nalalagda dito, sa pag galang at pag ganap dito sa
paingacaisahan, ay pumerma sampo ng mga sacsing caharap at catanto ngayong fecha ayon sa
itaas."
The contract dated April 18,1908 provides as follows:
"Sa Mauban, ika 18 ng Abril ng 1908, sa pagcacatipon ng lahat na firmantes nito ay pinagcaisahan
itong nangasosonod:—
Una—Pinagtitibay ang mga pinagcasundoan sa itaas noong 20 ng Enero ng 1907, liban na
lamang sa mga pangcat na una at icapat at tongcol doon pinasiya naming bahaguinin ng halohalo
at paparejo ang calupaan at pacatan.
Ycalawa—Sa pagsucat ng agrimensor na si Amadeo at paggawa ng plano at descripcion ay
pagbabayaran siya ng sa bawat isa naoocol sa halagang isang piso sa bawat hectarea.
63
VOL. 156, DECEMBER 1, 1987 63
Del Banco vs. Intermediate Appellate Court
Icatlo—Ang caunting pucto sa 'Mayanibulong' na maycaingin ni G. Isidro Altamarino, asawa ni
Restituta ay tutumbasan naman cay G. Norberto Pansacola sa lugar ng Dapo calapit ng Pinangalo
ng gasing sucat.
Icapat—Sa inilahad na plano ay pinasiya nang itoloy at upang maca pagparehistro ang isa't isa
ay pinagcaisahang magcacagastos na parepareho para sa, tablang pangmohon at ibat iba pang
cagastusan.
Sa catunayan at catibayan ay cami, pumirma." (Record on Appeal, p. 224)
There is nothing in all four agreements that suggests that actual or physical partition of
the Island had really been made by either the original owners or their heirs or successors-
ininterest. The agreement entered into in 1859 simply provides for the sharing of whatever
benefits can be derived from the island. The agreement, in fact, states that the Island to
be purchased shall be considered as their common property. In the second agreement
entered in 1868 the co-owners agreed not only on the sharing proportion of the benefits
derived from the Island but also on the distribution of the Island—each of. the brothers
was allocated a 1/4 portion of the Island with the children of the deceased brother,
Eustaquio Pansacola allocated a 1/4 portion and the children of Manuel Pansacola (Fr.
Manuel Peña) also allocated a 1/4 portion of the Island. With the distribution agreed upon
each of the co-owner is a co-owner of the whole, and in this sense, over the whole he
exercises the right of dominion, but he is at the same time the sole owner of a portion, in
the instant case, a 1/4 portion (for each group of coowners) of the Island which is truly
abstract, because until physical division is effected such portion is merely an ideal share,
not concretely determined (3 Manresa, Codigo Civil, 3rd Ed., page 486, cited in Lopez vs.
Cuaycong, 74 Phil. 601; De la Cruz vs. Cruz, 32 SCRA 307 [1970]; Felices vs. Colegado, 35
SCRA 173 [1970],; Dultra vs. CFI, 70 SCRA 465 [1976]; Gatchalian vs. Arlegui, 75 SCRA
234 [1977].
In the agreement of January 20, 1907, the heirs that were represented agreed on how
the Island was to be partitioned. The agreement of April 18, 1908 which supplements that
of January 20. 1907 reveals that as of the signing of the 1908
64
64 SUPREME COURT REPORTS ANNOTATED
Del Banco vs. Intermediate Appellate Court
agreement no actual partition of the Island had as yet been done. The second and fourth
paragraphs of the agreement speaks of a survey yet to be conducted by a certain Amadeo
and a plan and description yet to be made. Virgilio Pansacola, a son of the surveyor named
Amadeo who is referred to in the contract dated April 18, 1908 as the surveyor to whom
the task of surveying Cagbalite Island pursuant to said agreement was entrusted,
however, testified that said contracts were never implemented because nobody defrayed
the expenses for surveying the same (Record on Appeal, p. 225).
Petitioners invoke res judicata to bar this action for partition in view of the decision of
the Court in G.R. No. 21033, "Domingo Arce vs. Maria Villabona, et al.," 21034, "Domingo
Arce vs. Francisco Pansacola, et al," and 21035, "Domingo Arce vs. Emiliano Pansacola, et
al." promulgated on February 20, 1958 (Rollo, p. 141) and Brief for Defendants-Appellees,
p. 87 Appendix I), wherein the Court said:
"Considering the facts that he waited for a period of nearly 23 years after the return from his
deportation before taking any positive action to recover his pretended right in the property in
question, gives great credit, in our opinion, to the declaration of the witnesses for the defense (a) that
the original parcel of land was partitioned as they claim, and (b) that the plaintiff had disposed of all
the right and interest which he had in the portion which had been given to him."
The issue in the aforementioned case which were tried together is not whether there has
already been a partition of the Cagbalite Island. The actions were brought by the plaintiff
to recover possession of three distinct parcels of land, together with damages. In fact the
word "partition" was used in the metaphysical or ideal sense (not in its physical sense),
Commenting on the above ruling of the Court in connection with the instant case, the
respondent Court said:
"Concededly, the Supreme Court decision in G.R. Nos. 21033-35(Exh. X) did use or employ the word
'partition.' A careful reading ofthe said decision will, however, reveal, and we so hold, that
theemployment or use of the word 'partition' therein was made not in itstechnical and legal meaning
or sense adverted to above, but, rather in
65
VOL. 156, DECEMBER 1, 1987 65
Del Banco vs. Intermediate Appellate Court
its ideal, abstract and spiritual sense, this is (at) once evident from the bare statement in said
decision to the effect that the property was divided into four parts, without any reference to the
specific parts of the property that may have been adjudicated to each owner. There being no such
reference in the decision and in the judgment affirmed therein to the adjudication of specific and
definite portions of the property to each co-owner, there is a clear and logical inference that there
was indeed no adjudication of specific and definite portions of the property made to each co-owner."
It must be admitted that the word "partition" is not infrequently used both in popular and
technical parlance (Fule vs. Fule, 52 Phil. 750 [1929]). For purposes of the aforementioned
case, evidently the Court used the word "partition" to refer to the distribution of the
Cagbalite Island agreed upon by the original owners and in the later agreements, by the
heirs and their subsequent successors-in-interest. There need not be a physical partition;
a distribution of the Island even in a state of indiviso or was sufficient in order that a co-
owner may validly sell his portion of the co-owned property. The sale of part of a particular
lot thus co-owned by one co-owner was within his right pro-indiviso is valid in its entirety
(Pamplona vs. Moreto, 96 SCRA 775 [19801) but he may not convey a physical portion with
boundaries of the land owned in common (Mercado vs. Liwanag, 5 SCRA 472 [1962]).
Definitely, there was no physical partition of the Island in 1859. Neither could there have
been one in 1894 because the manner of subdividing the Island was only provided for in
the later agreements entered into by the heirs in 1907 and 1908. There was a distribution
of the Island in 1868 as agreed upon by the original co-owners in their agreement of April
11,1868. Any agreement entered into by the parties in 1894 could be no more than another
agreement as to the distribution of the Island among the heirs of the original co-owners
and the preparation of a tentative plan by a practical surveyor, a Mr. Jose Garcia,
mentioned in the first paragraph of the 1907 agreement, preparatory to the preparation of
the real plan to be prepared by the surveyor Amadeo, mentioned in the agreement of April
18,1908.
What is important in the Court's ruling in the three aforementioned cases is that, the
fact that there was a distribution of the Island among the co-owners made the sale of
Domingo
66
66 SUPREME COURT REPORTS ANNOTATED
Del Banco vs. Intermediate Appellate Court
Arce of the portion allocated to him though pro-indiviso, valid. He thus disposed of all his
rights and interests in the portion given to him.
It is not disputed that some of the private respondents and some of the petitioners at
the time the action for partition was filed in the trial court have been in actual possession
and enjoyment of several portions of the property in question (Rollo, p. 148). This does not
provide any proof that the Island in question has already been actually partitioned and
coownership terminated. A co-owner cannot, without the conformity of the other co-owners
or a judicial decree of partition issued pursuant to the provision of Rule 69 of the Rules of
Court (Rule 71 of the Old Rules), adjudicate to himself in fee simple a determinate portion
of the lot owned in common, as his share therein, to the exclusion of other co-owners
(Santos, Jr. vs. Buenconsejo, 14 SCRA 407 [1965]; Carvajal vs. Court of Appeals, 112 SCRA
237 [1982]). It is a basic principle in the law of co-ownership both under the present Civil
Code as in the Code of 1889 that no individual co-owner can claim any definite portion
thereof (Diversified Credit Corporation vs. Rosada, 26 SCRA 470 [1968]). It is therefore of
no moment that some of the co-owners have succeeded in securing cadastral titles in their
names to some portions of the Island occupied by them (Rollo, p. 10).
It is not enough that the co-owners agree to subdivide the property. They must have a
subdivision plan drawn in accordance with which they take actual and exclusive possession
of their respective portions in the plan and titles issued to each of them accordingly (Caro
vs. Court of Appeals, 113 SCRA 10 [1982]). The mechanics of actual partition should follow
the procedure laid down in Rule 69 of the Rules of Court. (Magallon vs. Montejo, 146 SCRA
282[1986]).
Neither can such actual possession and enjoyment of some portions of the Island by
some of the petitioners herein be considered a repudiation of the co-ownership. It is
undisputed that the Cagbalite Island was purchased by the original co-owners as a
common property and it has not been proven that the Island had been partitioned among
them or among their heirs. While there is co-ownership, a co-owner's possession of his
67
VOL. 156, DECEMBER 1, 1987 67
Del Banco vs. Intermediate Appellate Court
share is co-possession which is linked to the possession of the other co-owners (Gatchalian
vs. Arlegui, 75 SCRA 234[1977]).
Furthermore, no prescription shall run in favor of a co-owner against his co-owners or
co-heirs so long as he expressly or impliedly recognizes the co-ownership (Valdez vs.
Olonga, 51 SCRA 71 [1973], Tero vs. Tero, 131 SCRA 100 [1984]). Coowners cannot acquire
by prescription the share of the other co-owners, absent a clear repudiation of the co-
ownership clearly communicated to the other co-owners (Mariano vs. De Vega, 148 SCRA
342 [1987]).
An action for partition does not prescribe. Article 403 of the Old Civil Code, now Article
497, provides that the assignees of the co-owners may take part in the partition of the
common property, and Article 400 of the Old Code, now Article 494 provides that each co-
owner may demand at any time the partition of the common property, a provision which
implies that the action to demand partition is imprescriptible or cannot be barred by laches
(Budlong vs. Pondoc, 79 SCRA 24 [1977]). An action for partition does not lie except when
the co-ownership is properly repudiated by the co-owner (Jardin vs. Hollasco, 117 SCRA
532[1982]).
On July 23, 1986, the Court through its Second Division denied the petition for the
review of G.R. No. 72620, the petition for review on certiorari separately filed by Josefina
Pansacola (Rollo, p. 151).
PREMISES CONSIDERED, the instant petition is likewise DENIED for lack of merit.
SO ORDERED.
Teehankee (C.J), Narvasa, Cruz and Gancayco, JJ.,concur.
Petition denied.
 G.R. No. 46296. September 24, 1991. *
EPITACIO DELIMA, PACIANO DELIMA, FIDEL DELIMA, VIRGILIO DELIMA,
GALILEO DELIMA, JR., BIBIANO BACUS, OLIMPIO BACUS and PURIFICACION
BACUS, petitioners, vs. HON. COURT OF APPEALS, GALILEO DELIMA (deceased),
substituted by his legal heirs, namely: FLAVIANA VDA. DE DELIMA, LILY D. ARIAS,
HELEN NIADAS, ANTONIO DELIMA, DIONISIO DELIMA, IRENEA DELIMA, ESTER
DELIMA AND FELY DELIMA, respondents.
Civil Law; Co-ownership; Partition; Prescription; An action to compel partition may be filed at
anytime by any of the co-owners against the actual possessor; No prescription shall run in favor of a
coowner against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-
ownership.—As a rule, possession by a coowner will not be presumed to be adverse to the others, but
will be held to benefit all. It is understood that the co-owner or co-heir who is in possession of
an inheritance pro-indiviso for himself and in representation of his co-owners or co-heirs, if, as such
owner, he administers or takes care of the rest thereof with the obligation of delivering it to his co-
owners or co-heirs, is under the same situation as a depository, a lessee or a trustee (Bargayo v.
Camumot, 40 Phil. 857; Segura v. Segura, No. L-29320, September 19, 1988, 165 SCRA 368). Thus,
an action to compel partition may be filed at any time by any of the co-owners against the actual
possessor. In other words, no prescription shall run in favor of a co-owner against his co-owners or
coheirs so long as he expressly or impliedly recognizes the co-ownership.
Same; Same; Same; Same; Same; From the moment one of the coowners claims that he is the
absolute and exclusive owner of the properties and denies the others any share therein, the question
involved is no longer one of partition but of ownership.—However, from the moment one of the co-
owners claims that he is the absolute and exclusive owner of the properties and denies the others
any share therein, the question involved is no longer one of partition but of ownership (De Castro v.
Echarri, 20 Phil. 23; Bargayo v. Camumot, supra; De los Santos v. Santa Teresa, 44 Phil. 811). In
such case, the imprescriptibility of the action for partition can no longer be invoked or applied when
one of the co-owners has adversely possessed the
________________
*FIRST DIVISION.
642
642 SUPREME COURT REPORTS ANNOTATED
Delima vs. Court of Appeals
property as exclusive owner for a period sufficient to vest ownership by prescription.
Same; Same; Same; Same; Possession by a co-owner or co-heir is that of a trustee; Requisites
before possession is considered adverse to the cestui que trust amounting to a repudiation of the co-
ownership.—It is settled that possession by a co-owner or co-heir is that of a trustee. In order that
such possession is considered adverse to the cestui que trust amounting to arepudiation of the co-
ownership, the following elements must concur: 1) that the trustee has performed unequivocal acts
amounting to an ouster of the cestui que trust; 2) that such positive acts of repudiation had been
made known to the cestui que trust; and 3) that the evidence thereon should be clear and conclusive.
Same; Same; Same; Same; When a co-owner of the property in question executed a deed of
partition and on the strength thereof obtained the cancellation of the title in the name of their
predecessor and the issuance of a new one wherein he appears as the new owner of the property, the
statute of limitations started to run for the purposes of the action instituted by the latter seeking a
declaration of the existence of the co-ownership and of their rights thereunder.—We have held that
when a co-owner of the property in question executed a deed of partition and on the strength thereof
obtained the cancellation of the title in the name of their predecessor and the issuance of a new one
wherein he appears as the new owner of the property, thereby in effect denying or repudiating the
ownership of the other co-owners over their shares, the statute of limitations started to run for the
purposes of the action instituted by the latter seeking a declaration of the existence of the co-
ownership and of their rights thereunder (Castillo v. Court of Appeals, No. L-18046, March 31, 1964,
10 SCRA 549). Since an action for reconveyance of land based on implied or constructive trust
prescribes after ten (10) years, it is from the date of the issuance of such title that the effective
assertion of adverse title for purposes of the statute of limitations is counted.
Same; Same; Same; Same; The issuance of new title constituted an open and clear repudiation
of the trust or co-ownership and the lapse of ten (10) years of adverse possession by Galileo Delima
from February 4, 1954 was sufficient to vest title in him by prescription.—Evidence shows that TCT
No. 2744 in the name of the legal heirs of Lino Delima, represented by Galileo Delima, was cancelled
by virtue of an affidavit executed by Galileo Delima and that on February 4, 1954, Galileo Delima
obtained the issuance of a new title in his name numbered TCT No. 3009 to the exclusion of his co-
heirs. The issuance
643
VOL. 201, SEPTEMBER 24, 1991 643
Delima vs. Court of Appeals
of this new title constituted an open and clear repudiation of the trust or co-ownership, and the
lapse of ten (10) years of adverse possession by Galileo Delima from February 4, 1954 was sufficient
to vest title in him by prescription. As the certificate of title was notice to the whole world of his
exclusive title to the land, such rejection was binding on the other heirs and started as against them
the period of prescription. Hence, when petitioners filed their action for reconveyance and/or to
compel partition on February 29, 1968, such action was already barred by prescription. Whatever
claims the other co-heirs could have validly asserted before can no longer be invoked by them at this
time.
PETITION for review on certiorari of the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Gabriel J. Canete for petitioners.
Emilio Lumontad, Jr. for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals reversing
the trial court’s judgment which declared as null and void the certificate of title in the
name of respondents’ predecessor and which ordered the partition of the disputed lot
among the parties as co-owners.
The antecedent facts of the case as found both by the respondent appellate court and
by the trial court are as follows:
During his lifetime, Lino Delima acquired Lot No. 7758 of the Talisay-Minglanilla Friar
Lands Estate in Cebu by sale on installments from the government. Lino Delima later died
in 1921 leaving as his only heirs three brothers and a sister namely: Eulalio Delima,
Juanita Delima, Galileo Delima and Vicente Delima. After his death, TCT No. 2744 of the
property in question was issued on August 3, 1953 in the name of “The Legal Heirs of Lino
Delima, deceased, represented by Galileo Delima.”
On September 22, 1953, Galileo Delima, now substituted by respondents, executed an
affidavit of “Extra-judicial Declaration of Heirs.” Based on this affidavit, TCT No. 2744
was cancelled and TCT No. 3009 was issued on February 4, 1954 in the name of Galileo
Delima alone to the exclusion of the other heirs.
644
644 SUPREME COURT REPORTS ANNOTATED
Delima vs. Court of Appeals
Galileo Delima declared the lot in his name for taxation purposes and paid the taxes
thereon from 1954 to 1965.
On February 29, 1968, petitioners, who are the surviving heirs of Eulalio and Juanita
Delima, filed with the Court of First Instance of Cebu (now Regional Trial Court) an action
for reconveyance and/or partition of property and for the annulment of TCT No. 3009 with
damages against their uncles Galileo Delima and Vicente Delima,. Vicente Delima was
joined as party defendant by the petitioners for his refusal to join the latter in their action.
On January 16, 1970, the trial court rendered a decision in favor of petitioners, the
dispositive portion of which states:
“IN VIEW OF THE FOREGOING CONSIDERATIONS, the following are the declared owners of Lot
No. 7758 of the TalisayMinglanilla Friar Lands Estate presently covered by Transfer Certificate of
Title No. 3009, each sharing a pro-indiviso share of one-fourth;
1. 1)Vicente Delima (one-fourth)
2. 2)Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio Bacus and Purificacion Bacus
(on-fourth);
3. 3)Heirs of Eulalio Delima, namely Epitacio, Paciano, Fidel, Virgilio and Galileo Jr., all
surnamed Delima (one-fourth); and
4. 4)The Heirs of Galileo Delima, namely Flaviana Vda. de Delima, LIly D. Arias, Helen
Niadas, and Dionisio, Antonio, Eotu, Irenea, and Fely, all surnamed Delima (one-fourth).
“Transfer Certificate of Title No. 3009 is declared null and void and the Register of Deeds of Cebu
is ordered to cancel the same and issue in lieu thereof another title with the above heirs as pro-
indiviso owners.
“After the payment of taxes paid by Galileo Delima since 1958, the heirs of Galileo Delima are
ordered to turn over to the other heirs their respective shares of the fruits of the lot in question
computed at P1 70.00 per year up to the present time with legal (interest).
“Within sixty (60) days from receipt of this decision the parties are ordered to petition the lot in
question and the defendants are directed to immediately turn over possession of the shares here
awarded to the respective heirs.
“Defendants are condemned to pay the costs of the suit.
“The counterclaims dismissed.
“SO ORDERED." (pp. 54–55, Rollo)
645
VOL. 201, SEPTEMBER 24, 1991 645
Delima vs. Court of Appeals
Not satisfied with the decision, respondents appealed to the Court of Appeals. On May 19,
1977, respondent appellate court reversed the trial court’s decision and upheld the claim
of Galileo Delima that all the other brothers and sister of Lino Delima, namely Eulalio,
Juanita and Vicente, had already relinquished and waived their rights to the property in
his favor, considering that he (Galileo Delima) alone paid the remaining balance of the
purchase price of the lot and the realty taxes thereon (p. 26, Rollo).
Hence, this petition was filed with the petitioners alleging that the Court of Appeals
erred:
1. “1)In not holding that the right of a co-heir to demand partition of inheritance is
imprescriptible. If it does, the defenses of prescription and laches have already been
waived.
2. “2)In disregarding the evidence of the petitioners.” (p. 13, Rollo)
The issue to be resolved in the instant case is whether or not petitioners’ action for partition
is already barred by the statutory period provided by law which shall enable Galileo
Delima to perfect his claim of ownership by acquisitive prescription to the exclusion of
petitioners from their .shares in the disputed property.
Article 494 of the Civil Code expressly provides:
“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.”
As a rule, rule, possession by a co-owner will not be presumed to be adverse to the others,
but will be held to benefit all. It is understood that the co-owner or co-heir who is in
possession of
646
646 SUPREME COURT REPORTS ANNOTATED
Delima vs. Court of Appeals
an inheritance pro-indiviso for himself and in representation of his co-owners or co-heirs,
if, as such owner, he administers or takes care of the rest thereof with the obligation of
delivering it to his co-owners or co-heirs, is under the same situation as a depository, a
lessee or a trustee (Bargayo v. Camumot, 40 Phil. 857; Segura v. Segura, No. L-29320,
September 19, 1988, 165 SCRA 368). Thus, an action to compel partition may be filed at
any time by any of the co-owners against the actual possessor. In other words, no
prescription shall run in favor of a co-owner against his co-owners or co-heirs so long as he
expressly or impliedly recognizes the co-ownership (Del Blanco v. Intermediate Appellate
Court, No. 72694, December 1, 1987, 156 SCRA 55).
However, from the moment one of the co-owners claims that he is the absolute and
exclusive owner of the properties and denies the others any share therein, the question
involved is no longer one of partition but of ownership (De Castro v. Echarri, 20 Phil.
23; Bargayo v. Camumot, supra; De los Santos v. Santa Teresa, 44 Phil. 811), In such case,
the imprescriptibility of the action for partition can no longer be invoked or applied when
one of the co-owners has adversely possessed the property as exclusive owner for a period
sufficient to vest ownership by prescription.
It is settled that possession by a co-owner or co-heir is that of a trustee. In order that
such possession is considered adverse to the cestui que trust amounting to a
repudiation of the coownership, the following elements must concur: 1) that the trustee
has performed unequivocal acts amounting to an ouster of the cestui que trust; 2) that such
positive acts of repudiation had been made known to the cestui que trust; and 3) that the
evidence thereon should be clear and conclusive (Valdez v. Olorga, No. L-22571, May 25,
1973, 51 SCRA 71; Pangan v. Court of Appeals, No. L-39299, October 18, 1988, 166 SCRA
375).
We have held that when a co-owner of the property in question executed a deed of
partition and on the strength thereof obtained the cancellation of the title in the name of
their predecessor and the issuance of a new one wherein he appears as the new owner of
the property, thereby in effect denying or repudiating the ownership of the other co-owners
over their shares,
647
VOL. 201, SEPTEMBER 24, 1991 647
Delima vs. Court of Appeals
the statute of limitations started to run for the purposes of the action instituted by the
latter seeking a declaration of the existence of the co-ownership and of their rights
thereunder (Castillo v. Court of Appeals, No. L-18046, March 31, 1964, 10 SCRA 549).
Since an action for reconveyance of land based on implied or constructive trust prescribes
after ten (10) years, it is from the date of the issuance of such title that the effective
assertion of adverse title for purposes of the statute of limitations is counted (Jaramil v.
Court of Appeals, No. L-31858, August 31, 1977, 78 SCRA 420).
Evidence shows that TCT No. 2744 in the name of the legal heirs of Lino Delima,
represented by Galileo Delima, was cancelled by virtue of an affidavit executed by Galileo
Delima and that on February 4, 1954, Galileo Delima obtained the issuance of a new title
in his name numbered TCT No. 3009 to the exclusion of his co-heirs. The issuance of this
new title constituted an open and clear repudiation of the trust or coownership, and the
lapse of ten (10) years of adverse possession by Galileo Delima from February 4, 1954 was
sufficient to vest title in him by prescription. As the certificate of title was notice to the
whole world of his exclusive title to the land, such rejection was binding on the other heirs
and started as against them the period of prescription. Hence, when petitioners filed their
action for reconveyance and/or to compel partition on February 29,1968, such action was
already barred by prescription. Whatever claims the other co-heirs could have validly
asserted before can no longer be invoked by them at this time.
ACCORDINGLY, the petition is hereby DENIED and the assailed decision of the Court
of Appeals dated May 19, 1977 is AFFIRMED.
SO ORDERED.
Narvasa (Chairman), Cruz and Griño-Aquino, JJ.,concur.
Petition denied. Decision affirmed.
 G.R. No. 157954. March 24, 2006. * July 1959, predeceased Timotea and was survived by his son, Porfirio Galvez. Timotea left
PAZ GALVEZ, CARLOS TAM, and TYCOON PROPERTIES, INC., petitioners, vs. HON.
COURT OF APPEALS and PORFIRIO GALVEZ, respondents.
Civil Law; Property; Co-Ownership; Prescription; It is a fundamental principle that a co-owner
cannot acquire by prescription the share of the other co-owners, absent any clear repudiation of the
co-ownership.—This case is governed by the rules on co-ownership since both Paz Galvez and Porfirio
Galvez are obviously co-owners of the disputed property having inherited the same from a common
ancestor. Article 494 of the Civil Code provides that “[a] prescription shall not run in favor of a co-
owner or co-heir against his co-owners or co-heirs as long as he expressly or impliedly recognizes the
co-ownership.” It is a fundamental principle that a co-owner cannot acquire by prescription the share
of the other co-owners, absent any clear repudiation of the co-ownership.
_______________
* FIRST DIVISION.
Same; Same; Same; Same; For title to prescribe in favor of a co-owner there must be a clear
showing that he has repudiated the claims of the other co-owners and the latter has been categorically
advised of the exclusive claim he is making to the property in question.—For title to prescribe in favor
of a co-owner there must be a clear showing that he has repudiated the claims of the other co-owners
and the latter has been categorically advised of the exclusive claim he is making to the property in
question. The rule requires a clear repudiation of the co-ownership duly communicated to the other
co-owners. It is only when such unequivocal notice has been given that the period of prescription will
begin to run against the other co-owners and ultimately divest them of their own title if they do not
seasonably defend it.
Same; Sales; Buyer in Good Faith; A purchaser in good faith and for value is one who buys the
property without notice that some other person has a right to or interest in such property and pays its
fair price before he has notice of the adverse claims and interest of another person in the same
property.—A purchaser in good faith and for value is one who buys the property without notice that
some other person has a right to or interest in such property and pays its fair price before he has
notice of the adverse claims and interest of another person in the same property. So it is that the
“honesty of intention” which constitutes good faith implies a freedom from knowledge of
circumstances which ought to put a person on inquiry.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Chavez, Miranda, Aseoche Law Offices for petitioner Tycoon Properties, Inc.
Tan & Venturanza Law Offices for petitioner Carlos Tam.
Stephen L. David for respondent Galvez.
348
348 SUPREME COURT REPORTS ANNOTATED
Galvez vs. Court of Appeals
CHICO-NAZARIO, J.:
The factual antecedents of this case reveal that Timotea F. Galvez died intestate on 28
April 1965. She left behind her children Ulpiano and Paz Galvez. Ulpiano, who died on 24
1
2
a parcel of land situated at Pagdaraoan, San Fernando, La Union, covered by Tax
Declaration No. 39645 and more particularly described as follows:
3
“A parcel of unirrigated riceland situated at Brgy. Pagdaraoan, San Fernando, La Union under Tax
Declaration No. 39645, series of 1957, with an area of 4,304.5 square meters, more or less bounded
on the North by Valentin and Isidoro Sobrepeña; on the East by Nicolas Ducusin; on the South by
Victor Ducusin; and on the West by the National Highway.” 4
Considering that all the other compulsory heirs of Timotea already received their
respective shares, the property passed by succession, both to Timotea’s daughter, Paz
5
Galvez, and to the former’s grandson, Porfirio, the latter succeeding by right of
representation as the son of Ulpiano.
Porfirio Galvez was surprised to discover that on 4 May 1970, Paz Galvez executed an
6
affidavit of adjudication stating that she is the true and lawful owner of the said property.
Tax Declarations No. 15749 and No. 12342 were then issued in the name of Paz Galvez.
7 8
On 22 June 1992, without the knowledge and consent of Porfirio Galvez, Paz Galvez sold
the property to Carlos Tam for a consideration of Ten Thousand
_______________
Pesos (P10,000.00) by way of a Deed of Absolute Sale. Carlos Tam thereafter filed an
9
application for registration of said parcel of land under Land Registration Case No. 2278
before the Regional Trial Court (RTC) of San Fernando, La Union. On 21 January 1994,
Original Certificate of Title No. 0-2602 of the Registry of Deeds of San Fernando, La Union,
was issued in the name of Carlos Tam. Subsequently, on 27 September 1994, Carlos Tam
10
sold the property to Tycoon Properties, Inc. through a Deed of Absolute Sale executed by
the former in favor of the latter. As a result, the title of Carlos Tam over the property was
11
cancelled and a new one, Transfer Certificate of Title (TCT) No. T-40390 was issued in
12
favor of Tycoon Properties, Inc.
On 12 May 1994, Porfirio Galvez filed Civil Case No. 4895 before the RTC, Branch 26,
of San Fernando, La Union, for Legal Redemption with Damages and Cancellation of
Documents against Paz Galvez and Carlos Tam. The Complaint was later amended to
13
implead as additional defendant, Tycoon Properties, Inc. When Tycoon Properties, Inc.
14
filed its Answer, it also filed a cross-claim against Carlos Tam. In a decision dated 1515
December 1999, the trial court held:
“WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:
1. 1.declaring null and void the Affidavit of Adjudication executed by defendant PAZ GALVEZ
dated May 4, 1970;
2. 2.declaring null and void the Deed of Absolute Sale over the property originally covered by
Tax Declaration No. 39645 executed by PAZ GALVEZ in favor of CARLOS TAM;
_______________
1. 3.the Original Certificate of Title No. 0-2602, in the name of CARLOS TAM be considered
cancelled;
 2. 4.The Deed of Sale between CARLOS TAM and TYCOON PROPERTIES, Inc. is hereby
ordered cancelled with Transfer Certificate of Title No. T-40390, being null and void;
3. 5.That CARLOS TAM shall receive from the Clerk of Court, San Fernando City, La Union
the amount of Ten Thousand (P10,000.00) pesos, as redemption of the property pursuant
to law;
4. 6.That the property covered by Transfer Certificate of Title No. T-40390, be reconveyed
(whole property) to PORFIRIO GALVEZ, he having redeemed one-half (½) of the property
from CARLOS TAM and other half of the property belongs to him as co-heir of TIMOTEA
FLORES GALVEZ.
5. 7.Defendant PAZ GALVEZ and CARLOS TAM shall be liable solidarily for the actual
damages of the plaintiff in the amount of Ten Thousand (P10,000.00) pesos as well as
moral damages in the amount of Fifty Thousand (P50,000.00) Pesos, together with
attorney’s fees in the amount of Ten Thousand (P10,000.00) Pesos acceptance fee and Five
Hundred (P500.00) per appearance fee.” 16
Petitioners Paz Galvez, Carlos Tam and Tycoon Properties, Inc. appealed the decision to
the Court of Appeals. In a decision of the Court of Appeals dated 28 August 2002, the ap-
17 18
pellate court resolved to affirm the decision of the trial court. Petitioners filed a Motion for
Reconsideration which was denied in a resolution dated 14 April 2003. 19
Not contented with the decision of the Court of Appeals, petitioners are now before this
Court via Petition for Review on Certiorari under Rule 45 of the Rules of Court.
_______________
Petitioners Carlos Tam and Tycoon Properties, Inc. separately filed their
Memorandum but raised the same issues to wit:
20
I he expressly or impliedly recognizes the co-ownership.”
THE HONORABLE COURT OF APPEALS ERRED WHEN IT REFUSED TO HOLD THAT
RESPONDENT’S CLAIM OVER THE SUBJECT PROPERTY, WHICH IS BASED ON AN IMPLIED
TRUST, HAS ALREADY PRESCRIBED BECAUSE THE ACTION WAS FILED 24 YEARS AFER
PETITIONER REPUDIATED THE SAID TRUST.
II
THE HONORABLE COURT OF APPEALS ERRED WHEN IT FAILED TO RECOGNIZE THAT
RESPONDENT’S CLAIM IS ALREADY BARRED BY LACHES BECAUSE HE FAILED TO
ASSERT HIS ALLEGED RIGHT FOR ALMOST TWENTY FOUR (24) YEARS.
III
THE HONORABLE COURT ERRED IN FAILING TO RECOGNIZE THAT PETITIONERS
[CARLOS TAM AND] TYCOON PROPERTIES ARE BUYERS IN GOOD FAITH AND FOR VALUE
AND HAS THE RIGHT TO RELY ON THE FACE OF THE TITLE. 21
In assailing the decisions of the trial and appellate courts, petitioners cite Article 1451 of 22
the Civil Code and claim that an implied or constructive trust which prescribes in ten
years,
_______________
20In view of the Certification by the Office of the Civil Registrar of San Fernando La Union of the death of
Paz Galvez on 5 May 2002, this Court, in a resolution dated 28 September 2005 (Rollo, p. 388) noted and
considered as satisfactory the compliance filed by counsel for Tycoon properties regarding its failure to enter a
substitute on behalf of Paz Galvez.
21Memorandum of Tycoon Properties, Rollo, pp. 323-324; Memorandum of Carlos Tam, Rollo, pp. 350-351.
22Art. 1451. When land passes by succession to any person and he causes the legal title to be put in the name
of another, a trust is established by implication of law for the benefit of the true owner.
352
352 SUPREME COURT REPORTS ANNOTATED
Galvez vs. Court of Appeals
was established between Paz Galvez and Porfirio Galvez. It is petitioners’ unflinching
stand that the implied trust was repudiated when Paz Galvez executed an Affidavit of Self-
Adjudication on 4 May 1970, registered the same before the Register of Deeds of La Union
on 4 June 1970 and secured a new tax declaration in her name. From 4 May 1970 to the
time the complaint was filed on 12 May 1994, 24 years have passed, hence, the action is
clearly barred both by prescription and laches.
We find the petition bereft of merit.
Ostensibly, this case is governed by the rules on co-ownership since both Paz Galvez
23
and Porfirio Galvez are obviously co-owners of the disputed property having inherited the
same from a common ancestor. Article 494 of the Civil Code provides that “[a] prescription
shall not run in favor of a co-owner or co-heir against his co-owners or co-heirs as long as
It is a fundamental principle that a co-owner cannot acquire by prescription the share
of the other co-owners, absent any clear repudiation of the co-ownership. In Santos v. 24
Santos, citing the earlier case of Adille v. Court of Appeals, this Court found occasion to
25 26
rule that:
“Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by
repudiation (of the co-ownership). The act of repudiation, in turn, is subject to certain conditions: (1)
a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made known
to the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in
possession through open, continuous, exclusive, and notorious possession of the property for the
period required by law.”
_______________
Mariano v. De Vega, G.R. No. L-59974, 9 March 1987, 148 SCRA 342, 345.
23
Robles v. Court of Appeals, 384 Phil. 635, 649; 328 SCRA 97, 110 (2000).
24
396 Phil. 928, 947; 342 SCRA 753, 770 (2000).
25
G.R. No. L-44546, 29 January 1988, 157 SCRA 455, 461.
26
353
VOL. 485, MARCH 24, 2006 353
 Galvez vs. Court of Appeals
For title to prescribe in favor of a co-owner there must be a clear showing that he has
repudiated the claims of the other co-owners and the latter has been categorically advised
of the exclusive claim he is making to the property in question. The rule requires a clear
repudiation of the co-ownership duly communicated to the other co-owners. It is only when 27
such unequivocal notice has been given that the period of prescription will begin to run
against the other co-owners and ultimately divest them of their own title if they do not
seasonably defend it. 28
To sustain a plea of prescription, it must always clearly appear that one who was
originally a joint owner has repudiated the claims of his co-owners, and that his co-owners
were apprised or should have been apprised of his claim of adverse and exclusive
ownership before the alleged prescriptive period began to run. 29
In Salvador v. Court of Appeals, it was held that the possession of a co-owner is like
30
that of a trustee and shall not be regarded as adverse to the other co-owner but in fact
beneficial to all of them.
The case of Huang v. Court of Appeals is instructive on the creation of trust
31
relationships.
“Trust is a fiduciary relationship with respect to property which involves the existence of equitable
duties imposed upon the holder of the title to the property to deal with it for the benefit of another.
A person who establishes a trust is called the trustor; one in whom confidence is reposed as regards
property for the benefit of another person is known as the trustee; and the person for whose
_______________
27 Mariano v. De Vega, supra note 23, p. 346.
28 Pangan v. Court of Appeals, G.R. No. L-39299, 18 October 1988, 166 SCRA 375, 382.
29 Cortes v. Oliva, 33 Phil. 480, 484 (1916).
30 313 Phil. 36, 56-57; 243 SCRA 239, 251 (1995).
31 G.R. No. 108525, 13 September 1994, 236 SCRA 420, 428-429.
354
354 SUPREME COURT REPORTS ANNOTATED
Galvez vs. Court of Appeals
benefit the trust has been created is referred to as the beneficiary or cestui que trust. Trust is either
express or implied. Express trust is created by the intention of the trustor or of the parties. Implied
trust comes into being by operation of law. The latter kind is either constructive or resulting trust.
A constructive trust is imposed where a person holding title to property is subject to an equitable
duty to convey it to another on the ground that he would be unjustly enriched if he were permitted
to retain it. The duty to convey the property arises because it was acquired through fraud, duress,
undue influence or mistake, or through breach of a fiduciary duty, or through the wrongful
disposition of another’s property. On the other hand, a resulting trust arises where a person makes
or causes to be made a disposition of property under circumstances which raise an inference that he
does not intend that the person taking or holding the property should have the beneficial interest in
the property. It is founded on the presumed intention of the parties, and as a general rule, it arises
where, and only where such may be reasonably presumed to be the intention of the parties, as
determined from the facts and circumstances existing at the time of the transaction out of which it
is sought to be established.”
Acts which may be considered adverse to strangers may not be considered adverse insofar
as co-owners are concerned. Thus, Salvador v. Court of Appeals reiterated what acts
constitute proof of exclusive ownership amounting to repudiation, emphasizing that the
act must be borne out of clear and convincing evidence of acts of possession which
unequivocably amounts to an ouster or deprivation of the right of the other co-owner. The
case of Pangan v. Court of Appeals enumerated the following as constituting acts of
32
repudiation:
“Filing by a trustee of an action in court against the trustor to quiet title to property, or for recovery
of ownership thereof, held in possession by the former, may constitute an act of repudiation of the
trust reposed on him by the latter.
The issuance of the certificate of title would constitute an open and clear repudiation of any trust,
and the lapse of more than 20
_______________
Supra note 28, pp. 382-383.
32
355
VOL. 485, MARCH 24, 2006 355
Galvez vs. Court of Appeals
years, open and adverse possession as owner would certainly suffice to vest title by prescription.
An action for the reconveyance of land based on implied or constructive trust prescribes within
10 years. And it is from the date of the issuance of such title that the effective assertion of adverse
title for purposes of the statute of limitation is counted.
The prescriptive period may only be counted from the time petitioners repudiated the trust
relation in 1955 upon the filing of the complaint for recovery of possession against private respondents
so that the counterclaim of the private respondents contained in their amended answer wherein they
asserted absolute ownership of the disputed realty by reason of the continuous and adverse
possession of the same is well within the 10-year prescriptive period.
There is clear repudiation of a trust when one who is an apparent administrator of property
causes the cancellation of the title thereto in the name of the apparent beneficiaries and gets a new
certificate of title in his own name.
It is only when the defendants, alleged co-owners of the property in question, executed a deed of
partition and on the strength thereof obtained the cancellation of the title in the name of their
predecessor and the issuance of a new one wherein they appear as the new owners of a definite area
each, thereby in effect denying or repudiating the ownership of one of the plaintiffs over his alleged
share in the entire lot, that the statute of limitations started to run for the purposes of the action
instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights
thereunder.”
In this case, we find that Paz Galvez effected no clear and evident repudiation of the co-
ownership. The execution of the affidavit of self-adjudication does not constitute such
sufficient act of repudiation as contemplated under the law as to effectively exclude Porfirio
Galvez from the property. This Court has repeatedly expressed its disapproval over the
obvious bad faith of a co-heir feigning sole ownership of the property to the exclusion of the
other heirs essentially stating that one who acts in bad faith should not be permitted to
profit
356
356 SUPREME COURT REPORTS ANNOTATED
 Galvez vs. Court of Appeals
from it to the detriment of others. In the cases of Adille and Pangan where, as in this case,
33 34
a co-heir was excluded from his legal share by the other co-heir who represented himself
as the only heir, this Court held that the act of exclusion does not constitute repudiation.
On the issue of prescription, while admittedly prescription operates as a bar to recovery
of property, the ten-year period commenced to run from date of registration. In this case,
Carlos Tam obtained his title to the property on 21 January 1994. Since the complaint of
Porfirio Galvez was filed on 12 May 1994, the same was well within the ten-year period to
file the action.
On the matter of laches, it is hornbook doctrine that laches is a creation of equity and
its application is controlled by equitable considerations. Laches cannot be used to defeat
justice or perpetrate fraud and injustice. Neither should its application be used to prevent
35
the rightful owners of a property from recovering what has been fraudulently registered in
the name of another. The equitable remedy of laches is, therefore, unavailing in this case.
36
Finally, petitioners claim that if the sale would be nullified, the nullification should
extend only to the one-half share of Porfirio Galvez but not to the share of Paz Galvez,
37
who, by her overt act of selling the property, manifested her intention to dispose of her
part.
Notably, Porfirio Galvez’s complaint was captioned “legal redemption with damages,
cancellation of documents and
_______________
Adille v. Court of Appeals, supra note 26.
33
34Pangan v. Court of Appeals, supra note 28.
35Jimenez v. Fernandez, G.R. No. 46364, 6 April 1990, 184 SCRA 190, 197, cited in Cometa v. Court of
Appeals, G.R. No. 141855, 06 February 2001, 351 SCRA 294, 310.
36Heirs of Clemente Ermac v. Heirs of Vicente Ermac, 451 Phil. 368, 379; 403 SCRA 291, 300 (2003).
Rollo, pp. 357-358.
37
357
VOL. 485, MARCH 24, 2006 357
Galvez vs. Court of Appeals
reconveyance of share.” In his prayer, he sought for the reconveyance of his one-half share
38
in the property and at the same time be subrogated to the other half pertaining to Paz
Galvez and sold to Carlos Tam after reimbursement of the amount which the latter paid
for the property.
The pertinent provisions of the Civil Code on legal redemption are as follows:
ART. 1619. Legal redemption is the right to be subrogated, upon the same terms and conditions
stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment,
or by any other transaction whereby ownership is transmitted by onerous title.
ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all
the other co-owners or of any of them, are sold to a third person. If the price of the alienation is
grossly excessive, the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so in
proportion to the share they may respectively have in the thing owned in common.
In the case of Hermoso v. Court of Appeals, this Court, in interpreting the provision of the
39
law on legal redemption, held:
The purpose of Article 1067 (of the old Civil Code, now Article 1088 of the present Civil Code) is to
keep strangers to the family out of a joint ownership, if, as is often the case, the presence of outsiders
be undesirable and the other heir or heirs be willing and in a position to repurchase the share sold
(De Jesus vs. Manlapus, 81 Phil. 144). While there should be no question that an heir may dispose
his right before partition (Rivero vs. Serrano [CA] 46 O.G. 642; Wenceslao vs. Calimon, 46 Phil.
906; Hernaez vs. Hernaez, 32 Phil. 214), a co-heir would have had to pay only the price for which the
vendee acquired it (Hernaez vs. Hernaez, Ibid.).
_______________
Records, pp. 1-6, 115-121.
38
360 Phil. 703, 721; 300 SCRA 516, 533-534 (1998).
39
358
358 SUPREME COURT REPORTS ANNOTATED
Galvez vs. Court of Appeals
It is a one-way street. It is always in favor of the redemptioner since he can compel the vendee to sell
to him but he cannot be compelled by the vendee to buy the alienated property.
In another case, this Court reiterated that:
40
“Legal redemption is in the nature of a privilege created by law partly for reasons of public policy
and partly for the benefit and convenience of the redemptioner, to afford him a way out of what might
be a disagreeable or [an] inconvenient association into which he has been thrust. (10 Manresa, 4th
Ed., 317.) It is intended to minimize co-ownership. The law grants a co-owner the exercise of the said
right of redemption when the shares of the other owners are sold to a “third person.” ”
The rule on redemption is liberally construed in favor of the original owner of the property
and the policy of the law is to aid rather than defeat him in the exercise of his right of
redemption. 41
Thus, petitioners cannot be accommodated in this respect and we agree with the trial
court when it held:
“The provision of Art. 1088 of the Civil Code of the Philippines is very clear on the matter.
Art. 1088, provides: “Should any of the heirs sell his hereditary rights to a stranger before the partition, any or
all the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale,
provided they do so within the period of one (1) month from the time they were notified in writing of the sale by
the vendor.”
There was no written notice sent to Porfirio Galvez by Paz Galvez when she sold her share over
the land to Carlos Tam. Porfirio Galvez only discovered on May 12, 1994 that the land was sold to
Carlos Tam. Art. 1620, Civil Code of the Philippines, provides:
_______________
Fernandez v. Sps. Tarun, 440 Phil. 334, 344; 391 SCRA 653, 660 (2002).
40
41 Ysmael v. Court of Appeals, 376 Phil. 323, 334; 318 SCRA 215, 226 (1999).
359
VOL. 485, MARCH 24, 2006 359
Galvez vs. Court of Appeals
Art. 1620. “A co-owner of a thing may exercise the right of redemption in case the share of all the other co-owners
or any of them are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall
pay only a reasonable one.”
No written notice of the sale was given by Paz Galvez (vendor) to Porfirio Galvez, the co-owner
as required under Art. 1623 of the Civil Code. The written notice is mandatory. Hence, the right to
redeem commenced when plaintiff sought to exercise it by instituting the complaint in the instant
case on June 12, 1994. The complaint of legal redemption may be filed even several years after the
consummation of sale (Zosima Verdad vs. Court of Appeals, et al.; G.R. No. 109972, April 29,
1996, 256 SCRA 593).” 42

As to petitioners Carlos Tam and Tycoon Properties, Inc.’s claim that they are buyers in
good faith, same fails to persuade.
A purchaser in good faith and for value is one who buys the property without notice
that some other person has a right to or interest in such property and pays its fair price
before he has notice of the adverse claims and interest of another person in the same
property. So it is that the “honesty of intention” which constitutes good faith implies a
freedom from knowledge of circumstances which ought to put a person on inquiry. 43

Suffice it to state that both the trial and appellate courts found otherwise as “Tam did
not exert efforts to determine the previous ownership of the property in question” and 44

relied only on the tax declarations in the name of Paz Galvez. It must be noted that Carlos
45

Tam received a copy of the summons and the complaint on 22 September 1994. This
notwithstanding, he sold the property to Tycoon Properties,

_______________

Rollo, pp. 90-91.

42

Occeña v. Esponilla, G.R. No. 156973, 4 June 2004, 431 SCRA 116, 124.
43

CA decision, p. 8; Rollo, p. 52.

44

RTC decision, p. 16; Id., p. 82.

45

360
360 SUPREME COURT REPORTS ANNOTATED
Galvez vs. Court of Appeals
Inc. on 27 September 1994. Significantly, Carlos Tam is also an owner of Tycoon
Properties, Inc. to the extent of 45%. A notice of lis pendens dated 8 July 1997 filed with
46

the Registry of Deeds of the Province of La Union was inscribed on TCT No. T-
40390. Despite the inscription, Tycoon Properties, Inc. mortgaged the land to Far East
47

Bank and Trust Company for the sum of P11,172,600. All these attendant circumstances
48

negate petitioners’ claim of good faith.

WHEREFORE, premises considered, the decision of the Court of Appeals dated 28
August 2002 and its Resolution dated 14 April 2003 are AFFIRMED. Costs against
petitioners.
SO ORDERED.
Panganiban (C.J., Chairperson), Ynares-Santiago, Austria-Martinez and Callejo,
Sr., JJ., concur.
Judgment and resolution affirmed.
 G.R. No. 111257. December 4, 1998. * 670
MERCEDES DEIPARINE, RUFINA DEIPARINE, POLICARPIO DEIPARINE,
NICHOLAS DEIPARINE, FRANCISCO DEIPARINE, JR., ARSENIO DEIPARINE, DINA
CANADA, THERESA DEIPARINE, SOLITA DEIPARINE, JULIO DEIPARINE,
TEOFILO DEIPARINE, ELEUTERIO DEIPARINE, DANTE DEIPARINE, ESTRELLA
DEIPARINE, and NICHOLAS DEIPARINE, petitioners, vs. HONORABLE COURT OF
APPEALS (FIRST DIVISION), VICENTA DEIPARINE, FORTUNATO DEIPARINE,
FELICISIMA DEIPARINE, SALVADOR DEIPARINE, JR., RESTITUTA DEIPARINE,
Children and Heirs of deceased SALVADOR DEIPARINE, JR., IRENEO LAROA,
DOMINGO
__________________
SECOND DIVISION.
*
669
VOL. 299, DECEMBER 4, 1998 669
Deiparine vs. Court of Appeals
LAROA, AND CONCEPCION LAROA, Children and Heirs of deceased FILOMENA
DEIPARINE; FROILAN SEGUERRA, only son and HEIRS OF LATE SUPRIANA
DEIPARINE; IGNACIA DEIPARINE, ANA DEIPARINE, AND PEDRO DEIPARINE,
Children and Heirs of deceased SEGUNDO DEIPARINE, RUFO ABALO, AURELIA
ABALO AND MAGDALENA ABALO, Children and Heirs of deceased MACARIA
DEIPARINE, LEO D. BACUS, PEDRO D. BACUS, DORICA D. BACUS, DIONISIO D.
BACUS, and PRUDY D. BACUS, Heirs of deceased JUSTINIANI DEIPARINE,
respondents.
Remedial Law; Appeals; Review by the Court in a petition under Rule 45 generally limited only
to questions of law.—The petition essentially raises factual issues which normally are not reviewable
by this Court in a petition under Rule 45 which is generally limited only to questions of law.
Nevertheless, since the factual findings of the respondent Court of Appeals are at variance with those
of the Regional Trial Court, we are compelled to review the records of the case both in the Court of
Appeals and the Regional Trial Court.
Civil Law; Property; Ownership; A mere tax declaration does not vest ownership of the property
upon the declarant; Neither do tax receipts nor declarations of ownership for taxation purposes
constitute adequate evidence of ownership or of the right to possess realty.—We have painstakingly
reviewed the record of the case and find the decision of the respondent Court to be in accord with the
evidence on record. We agree with the respondent Court’s findings that petitioners’ evidence
consisting of the subdivision plan, tax declarations and tax receipts are not conclusive and
indisputable evidence to show that the lot in question was sold to Manuel Deiparine, their
predecessor-in-interest. A mere tax declaration does not vest ownership of the property upon the
declarant. Neither do tax receipts nor declarations of ownership for taxation purposes constitute
adequate evidence of ownership or of the right to possess realty. The subdivision plan prepared at
the instance of the petitioners’ predecessor-in-interest cannot likewise be considered in their favor,
the same being self-serving.
Same; Same; Same; Partition; An action to demand partition is imprescriptible or cannot be
barred by laches.—The action for partition has not yet prescribed. An action to demand partition is
impre-
670
SUPREME COURT REPORTS ANNOTATED
Deiparine vs. Court of Appeals
scriptible or cannot be barred by laches. Each co-owner may demand at any time the partition
of the common property.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Ramirez, Corro & Associates for petitioners.
Leonardo Garcillano for private respondents.
MARTINEZ, J.:
This is a case for partition of real estate, declaration of nullity of certain deeds, cancellation
of certificate of title, and damages. The property subject of the controversy is a parcel of
land denominated as Lot 1938 of the Talisay-Minglanilla Friar Lands Estate located in
San Isidro, Talisay, Cebu. The lot was originally owned by Marcelo Deiparine who acquired
the same from the government in 1923 under Friar Lands Certificate No. 2008. On April
28, 1923, Marcelo Deiparine was issued Patent No. 11403. When he died sometime in 1929,
1
the subject lot was inherited by his wife Leona Caballero and children Francisca, Filomena,
Salvador, Supriana, Segundo, Justiniana, Macaria and Manuel, all surnamed Deiparine.
On April 15, 1930, Lot 1938 was subdivided into two (2) lots, Lot 1938-A with an area
of 3,599 square meters and Lot 1938-B with an area of 3,608 square meters. Manuel 2
Deiparine took possession of Lot 1938-A and declared it in his name for taxation purposes,
in 1966, 1974 and 1980. Upon his death on April 8, 1968, his heirs took possession of Lot
3
1938-A.
__________________
1Exh. “A,” p. 432, Record.
2Exh. “2”-Deiparine.
3Exhs. “4,” “5” and “18”-Deiparine.
671
VOL. 299, DECEMBER 4, 1998 671
Deiparine vs. Court of Appeals
Lot 1938-B, on the other hand, was sold to Justiniana Deiparine on October 28, 1933, as
evidenced by a deed of sale written in Spanish. Defendant Bacus took possession of the
4
said lot.
On September 1982, Vicenta, Fortunato, Felicisima, Salvador, Jr., and Restituta, all
surnamed Deiparine, children and heirs of Salvador Deiparine, Sr.; Ireneo, Domingo and
Concepcion, all surnamed Laroa, children and heirs of Filomena Deiparine; Froilan
Seguerra, only son and heir of Supriana Deiparine; Ignacia, Ana and Pedro, all surnamed
Deiparine, children and heirs of Segundo Deiparine; and Rufo, Aurelia and Magdalena all
surnamed Abalo, children and heirs of Macaria Deiparine, filed a complaint for partition
5
against the children and heirs of Manuel Deiparine, namely: Mercedes, Rufina, Policarpio,
Nicolas, Eulogia, Francisco, and Arsenio, all surnamed Deiparine, and Justiniana
Deiparine, before the then Court of First Instance of Cebu (now Regional Trial Court),
which was docketed as Civil Case No. 22368. The complaint was later amended on
6
February 3, 1983 by the substitution of the original defendant Justiniana Deiparine with
her heirs Leo, Pedro, Quintin, Ben, Prudy, Dorica and Marciana, all surnamed Bacus. In
their complaint, plaintiffs prayed for the immediate partition of Lot 1938 and for
defendants to deliver their shares and render an accounting.
On November 24, 1982, defendants filed their answer alleging inter alia: that they
7
inherited the lot which they presently occupy from their deceased parents Manuel
Deiparine and the spouses of Simon Bacus and Justiniana Deiparine, who bought their
respective portions of Lot 1938 from Marcelo Deiparine and later from their co-heirs; that
prescription has set in; and that plaintiffs are in estoppel.
___________________
4Exh. “2”-Bacus, p. 637, Rollo.
5Pp. 1-4, Record.
6Pp. 28-32, Id.
7Pp. 10-13, Id.
672
672 SUPREME COURT REPORTS ANNOTATED
Deiparine vs. Court of Appeals
On April 5, 1984 or during the pendency of this case, the defendant heirs of Manuel
Deiparine executed an Extra-Judicial Declaration of Heirs, adjudicating and partitioning
among themselves Lot 1938-A. The following day, April 6, 1984, said heirs, represented by
8
defendant Dina Cañada, filed a petition for judicial reconstitution of title over Lot 1938-A
with the RTC-Cebu which was docketed as LRC Rec. No. 3732, containing the allegation,
among others, that there is no case pending litigation involving said property. On 9
December 5, 1984, the trial court issued an Order ordering the reconstitution of the
10
certificate of title covering the subject parcel of land in the name of Manuel Deiparine.
On June 13, 1985, plaintiffs filed a second amended complaint to include as party-
11
defendants Dina Cañada, Teresa, Solita, Julio, Teofilo, Eleuterio, Dante, Estrella and
Nicolas, all surnamed Deiparine, and Edgar Allan Pagapulaan. The second amended
complaint also contained the additional allegations that defendant Dina Cañada, a close
relative of defendants Deiparine, thru manipulation and in connivance with the other
defendants and Edgar Pagapulaan, caused the issuance of a certificate of title to Lot 1938-
A in the name of Manuel Deiparine; that verifications with the Bureau of Lands revealed
the following forged, fraudulent and falsified documents, to wit: a Deed of Extra-Judicial
Declaration of Heirs, with Special Power of Attorney dated April 5, 1984 was executed by
the heirs of Manuel Deiparine; a verified Petition for Judicial Reconstitution of Title to Lot
1938-A dated April 4, 1984 was filed by Dina Cañada; and a Certification dated April 5,
1984 issued by defendant Edgar Pagapulaan; that due to the misleading effects of said
documents, the court in the case for reconstitution of title, ordered the Register of Deeds
of Cebu to reconstitute the certificate of title covering Lot 1938-A and consequently, TCT
No. RT-3834 (NA) was issued
_________________
Exh. “J,” pp. 252-254, Id.
8
9Exh. “K,” pp. 255-258, Id.
Exh. “M,” pp. 261-262, Id.
10
pp. 246-251, Id.
11
673
VOL. 299, DECEMBER 4, 1998 673
Deiparine vs. Court of Appeals
in the name of Manuel Deiparine. They pray that the court declare said deeds as well as
TCT No. RT-3834 (NA) null and void ab initio and without force and effect.
Traversing the amended complaint, the defendants filed their answer with
counterclaim containing basically the same allegations as that in their previous amended
12
answer and alleging that the present case is res judicata on the registration case and that
the decision in the registration case could not be collaterally attacked.
On October 18, 1988, plaintiffs filed another motion to admit third amended
complaint praying that the deed of sale over Lot 1938-B in favor of defendants (the
13
Bacuses) be nullified on the ground that it contained infirmities.
On August 10, 1989, the trial court rendered judgment in favor of the defendants ruling
that the evidence they have presented sufficiently proves their lawful acquisition of the
subject land from Marcelo Deiparine and his heirs. The trial court reasoned that:
“x x x plaintiffs’ parents never questioned the occupation of the disputed property by Manuel
Deiparine and Justiniana Deiparine and later by their children. They did not protest over the
segregation of Lot 1938-A in favor of Manuel Deiparine way back in 1930. They did not question
Manuel Deiparine’s act of securing a tax declaration and a title for his portion. They also did not
protest over the tax payments made by Manuel Deiparine and the Bacus spouses, or those effected
by the latter’s children. The aforesaid posture of plaintiffs’ parents patently indicated their
acquiescence to or recognition of Manuel’s and Justiniana’s acquisition of the disputed property.
Apart from defendants’ positive testimonial and documentary evidence of such acquisition, therefore,
laches and estoppel would operate to bar recovery even by plaintiffs’ parents. Certainly, plaintiffs’
position cannot be any better than their parents.”
__________________
Second Amended Answer with Counterclaim, pp. 295-299, Record.
12
Third Amended Complaint, pp. 509-515, Record.
13
674
674 SUPREME COURT REPORTS ANNOTATED
Deiparine vs. Court of Appeals
On appeal, the aforecited decision was modified by the Court of Appeals in its decision of
14
January 29, 1993, the dispositive portion of which reads:
“WHEREFORE, the Decision of August 10, 1989 of the RTC-Cebu City, Branch 16, in Civil Case No.
R-22368 is hereby MODIFIED as follows:
The heirs of Filomena Deiparine, Salvador Deiparine, Supriana Deiparine, Segundo Deiparine,
Macaria Deiparine, Manuel Deiparine and Justiniana Deiparine, are declared to be co-owners in
equal shares (per stirpes) of Lot 1938-A.
 With respect to Lot 1938-B (Lot 8285), the 6/9 portion of the same is declared to be owned by
defendants heirs of Justiniana Deiparine (5/9 portion by virtue of the deed of sale, dated October 28,
1933, and 1/9 portion by succession), while the remaining 3/9 portion is declared owned in common
by the heirs of Segundo Deiparine, Macaria Deiparine and Salvador Deiparine who did not consent
to the contract of sale. While no partition is effected, Lot 1938-B (Lot 8285) remains to be the co-
ownership of said heirs in the aforesaid proportions.
Transfer Certificate of Title No. RT-3834 (NA) issued by the Registry of Deeds for the Province
of Cebu in the name of Manuel Deiparine is declared null and void.
Defendants are ordered to render an accounting of their use and enjoyment of Lot 1938-A and
Lot 1938-B, from the filing of the complaint up to the execution of this decision.
The parties are further, ordered to submit their project of partition over Lots 1938-A and 1938-
B in accordance with the said sharing or proportions, for approval by the lower court, within fortyfive
(45) days from the finality of our Decision. No costs.
IT IS SO ORDERED.”
Dissatisfied with the said decision, petitioners filed this petition for review on certiorari
alleging that the Court of Appeals erred:
_________________
14Penned by Justice Jaime M. Lantin and concurred in by Justices Lorna S. Lombos dela Fuente and Cancio
C. Garcia, CA-GR CV No. 24136.
675
VOL. 299, DECEMBER 4, 1998 675
Deiparine vs. Court of Appeals
1. 1). . . in disregarding Exhs. 2 and 3;
2. 2). . . in not applying the laws on laches, estoppel and prescription;
3. 3). . . in nullifying the reconstituted title (TCT No. RT-3834 [NA]) and considering the titled
lot of Manuel Deiparine as part of the estate of Marcelo Deiparine;
4. 4). . . in dismissing the decision of the Trial Court.
The petition essentially raises factual issues which normally are not reviewable by this
Court in a petition under Rule 45 which is generally limited only to questions of law.
Nevertheless, since the factual findings of the respondent Court of Appeals are at variance
with those of the Regional Trial Court, we are compelled to review the records of the case
both in the Court of Appeals and the Regional Trial Court. 15
We have painstakingly reviewed the record of the case and find the decision of the
respondent Court to be in accord with the evidence on record. We agree with the
respondent Court’s findings that petitioners’ evidence consisting of the subdivision plan,
tax declarations and tax receipts are not conclusive and indisputable evidence to show that
the lot in question was sold to Manuel Deiparine, their predecessor-in-interest. A mere tax
declaration does not vest ownership of the property upon the declarant. Neither do tax
receipts nor declarations of ownership for taxation purposes constitute adequate evidence
of ownership or of the right to possess realty. The subdivision plan prepared at the
16
instance of the petitioners’ predecessor-in- interest cannot likewise be considered in their
favor, the same being self-serving. The respondent Court’s observation is noteworthy:
17
__________________
15Consolidated Bank and Trust Corp. (SOLIDBANK) vs. Court of Appeals, 246 SCRA 193 [1995]; Massive
Construction, Inc. vs. Intermediate Appellate Court, 223 SCRA 1 [1993].
16Republic vs. Intermediate Appellate Court, 224 SCRA 285 [1993]; Director of Lands vs. Intermediate
Appellate Court, 219 SCRA 339 [1993].
17Rizal Cement Co., Inc. vs. Villareal, 135 SCRA 15, February 28, 1985.
676
676 SUPREME COURT REPORTS ANNOTATED
Deiparine vs. Court of Appeals
“The fact that a portion of the subject land was sold by the heirs of Marcelo Deiparine to Justiniana
Bacus would not lead to the conclusion that the other portion was previously sold to Manuel
Deiparine. At most, it would only confirm that the land was earlier subdivided into two-Lot 1938-A
and Lot 1938-B.
B. Anent the second ground, defendants assert that the sale to Manuel Deiparine by Marcelo
Deiparine was evidenced by public documents and judicial records.
1. Defendants contend that the subdivision of the parcel of land into Lot 1938-A and Lot 1938-B
was reflected in Exhibit A, the Friar Lands Sales Certificate Register.
While Exhibit A indicates that the whole Lot 1938 consisted of two lots-Lot 1938-A and Lot 1938-
B, nowhere could we find in said document any indication that one portion specifically, Lot 1938-A,
was owned by Manuel Deiparine. To repeat, the subdivision plan does not prove ownership by
Manuel Deiparine of Lot 1938-A even if it was he who caused the subdivision of the property.
2. With respect to the tax declarations presented by defendants Deiparine, it is not correct for
them to say that their predecessor-in-interest, Manuel Deiparine, had paid taxes on Lot 1938-A as
early as May, 1923 referring to Exhibits 10, 11, 12 and 13. On the contrary, Official Receipt No.
2585478 (Exhibit 10), dated May 23, 1923, shows that the amount representing the taxes for the
parcel of land was received from one Canuto Deiparine with the statement that it was paid by
Marcelo Deiparine. The same is true with Official Receipt No. 794164 (Exhibit 11), dated March 28,
1927. On the other hand, Official Receipts Nos. 4066643 and 7069203 (Exhibits 12 and 13), dated
May 26, 1924 and April 28, 1925, respectively, show that payments for the realty taxes were received
from Canuto Deiparine and not Manuel Deiparine. On the other hand, defendants Deiparine’s own
Exhibit 14 shows that Manuel Deiparine started paying realty taxes only on April 11, 1978.” 18
The Extra-Judicial Declaration of Heirs with Special Power of Attorney, the Petition for
Reconstitution of Title for Lot 1938-A, and the Transfer Certificate of Title No. RT-3834
(NA) in the name of Manuel Deiparine, in like manner, can not be considered evidence to
prove that the lot in question
_________________
CA Resolution dated June 3, 1993, p. 3.
18
677
VOL. 299, DECEMBER 4, 1998 677
Deiparine vs. Court of Appeals
was sold to petitioners’ predecessor-in-interest considering that these were executed
fraudulently and in bad faith. It must be stressed that the declaration of heirs and the
petition for reconstitution were executed and filed only during the pendency of the present
case, or more than fifty-four (54) years from the alleged sale. Worse, petitioners even
misrepresented to the court in their petition for reconstitution that there is no pending
litigation involving the subject property. The statement is clearly deceitful since the __________________
present case has long been pending with the RTC when petitioners filed their petition for
See CA Resolution, pp. 4-5.
reconstitution. Petitioners’ bad faith in having the subject property titled in their name is
21

94 SCRA 872-873 [1979] cited in Jose vs. Court of Appeals, 192 SCRA 742 [1990].
22

also manifest when they presented in the reconstitution proceeding a Certification issued 679
by one Edgar Allan Pagapulaan of the Bureau of Lands dated April 6, 1984 certifying that VOL. 299, DECEMBER 4, 1998 679
Lot 1938-A is registered in the name of Manuel Deiparine. However, Pagapulaan admitted
19

the falsity of his statement by issuing another Certification dated May 20, 1985 stating Deiparine vs. Court of Appeals
that the Friar Lands Sales Certificate was issued to Marcelo Deiparine and not to Manuel In Salvador vs. Court of Appeals we held that:
23

Deiparine. 20
“the possession of a co-owner is like that of a trustee and shall not be regarded as adverse to the
other co-owners but in fact as beneficial to all of them. Acts which may be considered adverse to
Again, we quote with favor the findings of the respondent Court, thus:
strangers may not be considered adverse insofar as co-owners are concerned. A mere silent
“x x x At the outset, let it be stated that the existence of a transfer certificate of title in the name of
possession by a co-owner, his receipt of rents, fruits or profits from the property, erection of buildings
Manuel Deiparine, which could be the subject of reconstitution, was never alleged in the several
and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of
answers of defendants, not even in their testimonies. If it were true that a transfer certificate of title
exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of
covering Lot 1938-A was issued to Manuel Deiparine, then why was it that the number of said title
possession which unequivocably constituted an ouster or deprivation of the rights of the other co-
was never mentioned? Even in their petition for reconstitution in the regional trial court, the
owners.
petitioners therein (defendants herein), as represented by Dina Cañada, never mentioned that a
“Thus, in order that a co-owner’s possession may be deemed adverse to the cestui que trust or the
certificate of title covering Lot 1938-A was issued to Manuel Deiparine. In fact, petitioners alleged
other co-owners, the following elements must concur: (1) that he has performed unequivocal acts of
in said petition that Lot No. 1938-A was registered in the name of Marcelo Deiparine. Accordingly,
repudiation amounting to an ouster of the cestui que trust or the other co-owners; (2) that such
they prayed in their petition that:
positive acts of repudiation have been made known to the cestui que trust or the other co-owners; and
(3) that the evidence thereon must be clear and convincing.”
____________________
We sustain the respondent Court’s findings that Manuel Deiparine, during his lifetime,
19 Exhibit “L-1.” did not by any express or implied act show that he was repudiating the co-ownership. While
20 Exh. “I.” it is true that he took possession of Lot 1938-A after the death of Marcelo Deiparine, this
678
hardly proves an act of repudiation as there was no showing that the said possession was
678 SUPREME COURT REPORTS ANNOTATED to the exclusion of the other co-heirs. 24

Deiparine vs. Court of Appeals Finally, the action for partition has not yet prescribed. An action to demand partition
‘WHEREFORE, this Honorable Court is most respectfully prayed to declare null and void for all legal purposes is imprescriptible or cannot be barred by laches. Each co-owner may demand at any time
25

the original and owner’s copy of the certificate of title covering Lot 1938-A, situated in San Isidro, Talisay, Cebu the partition of the common property. 26

which were burned and destroyed, and after due notice and hearing of this petition, to order and direct the
Register of Deeds for the Province of Cebu, after payment to him the fees prescribed by law, to immediate (sic)
reconstitute the said certificate of title, in the name of Marcelo Deiparine. x x x’”
21
_________________
From the foregoing, it is evident that the reconstitution proceedings of the alleged lost title
243 SCRA 239, 251 [1995].
of petitioners’ predecessor-in-interest was fraudulent and hence cannot be the source of
23

See CA Decision, p. 15.

24

legitimate rights and benefits. In Republic vs. Court of Appeals, we ruled: 22

Del Banco vs. Intermediate Appellate Court, 156 SCRA 57 [1987].
25

“The existence of the two titles of the Government ipso factonullified the reconstitution proceedings Article 494 of the Civil Code.
26

and signified that the evidence in the said proceedings were sham and deceitful and were filed in 680
bad faith. Such humbuggery or imposture cannot be countenanced and cannot be the source of 680 SUPREME COURT REPORTS ANNOTATED
legitimate rights and benefits.
xxx xxx xxx
Allied Agri-Business Development Co., Inc. vs. Court of Appeals
“To sustain the validity of the reconstituted titles would be to allow Republic Act No. 26 to be WHEREFORE, the petition is hereby DENIED for lack of merit. The decision of the Court
utilized as an instrument for land grabbing x x x or to sanction fraudulent machinations for depriving of Appeals dated January 29, 1993 in CA-G.R. CV No. 24136 is hereby AFFIRMED. SO
a registered owner of his land to undermine the stability and security of Torrens titles and to impair ORDERED.
the Torrens system of registration.” Melo (Actg. Chairman), Puno and Mendoza, JJ.,concur.
Accordingly, the title [TCT No. RT-3834 (NA)] issued to Manuel Deiparine is null and void. Petition denied, judgment affirmed.
Petitioners’ possession of the subject lot did not also ripen into ownership for the reason
that they possessed the subject lot only as trustees for the other co-owners.
 G.R. No. 156078. March 14, 2008.*
HEIRS OF CESAR MARASIGAN namely: Luz Regina, Cesar Jr., Benito, Santiago,
Renato, Jose, Geraldo, Orlando, Peter, Paul, Mauricio, Rommel, Michael, Gabriel, and
Maria Luz, all surnamed Marasigan, petitioners, vs. APOLONIO, LILIA, OCTAVIO, JR.,
HORACIO, BENITO JR., and MARISSA, all surnamed MARASIGAN, and the COURT OF
APPEALS, respondents.
Appeals; Pleadings and Practice; Memoranda; The raising of additional issues in a
memorandum before the Supreme Court is irregular, because said memorandum is supposed to be in
support merely of the position taken by the party concerned in his petition, and the raising of new
issues amounts to the filing of a petition beyond the reglementary period—no new points of law,
theories, issues or arguments may be raised by a party in the Memorandum for the reason that to
permit these would be offensive to the basic rules of fair play, justice and due process.—This Court
significantly notes that the first three issues, alleging lack of jurisdiction and cause of action, are
raised by petitioners for the first time in their Memorandum. No amount of interpretation or
argumentation can place them within the scope of the assignment of errors they raised in their
Petition. The parties were duly informed by the Court in its Resolution dated 17 September 2003
that no new issues may be raised by a party in his/its Memorandum and the issues raised in his/its
pleadings but not included in the Memorandum shall be deemed waived or abandoned. The raising
of additional issues in a memorandum before the Supreme Court is irregular, because said
memorandum is supposed to be in support merely of the position taken by the party concerned in his
petition, and the raising of new issues amounts to the filing of a petition beyond the reglementary
period. The purpose of this rule is to provide all parties to a case a fair opportunity to be heard. No
new points of law, theories, issues or arguments may be raised by a party in the Memorandum for
the reason that to permit these would be offensive to the basic rules of fair play, justice and due
process.
_______________
* THIRD DIVISION.
410
410 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
Jurisdictions; Estoppel; While the lack of jurisdiction of a court may be raised at any stage of
an action, nevertheless, the party raising such question may be estopped if he has actively taken part
in the very proceedings which he questions and he only objects to the court’s jurisdiction because the
judgment or the order subsequently rendered is adverse to him.—Even petitioners’ argument that
non-payment of appropriate docket fees by private respondents deprived the RTC of jurisdiction to
partition the entire Hacienda Sta. Rita deserves scant consideration. In National Steel Corporation
v. Court of Appeals, 302 SCRA 522 (1999), the Court ruled: x x x while the lack of jurisdiction of a
court may be raised at any stage of an action, nevertheless, the party raising such question may be
estopped if he has actively taken part in the very proceedings which he questions and he only objects
to the court’s jurisdiction because the judgment or the order subsequently rendered is adverse to
him.
Same; Same; While it is the general rule that neither waiver nor estoppel shall apply to confer
jurisdiction upon a court, the Court may rule otherwise under meritorious and exceptional
circumstances—“after voluntarily submitting a cause and encountering an adverse decision on the
merits, it is too late for the loser to question the jurisdiction or power of the court.”—It is conceded
that this Court adheres to the policy that “where the court itself clearly has no jurisdiction over the
subject matter or the nature of the action, the invocation of this defense may de done at any time.”
While it is the general rule that neither waiver nor estoppel shall apply to confer jurisdiction upon a
court, the Court may rule otherwise under meritorious and exceptional circumstances. One such
exception is Tijam v. Sibonghanoy, 23 SCRA 29 (1968), which finds application in this case. This
Court held in Tijam that “after voluntarily submitting a cause and encountering an adverse decision
on the merits, it is too late for the loser to question the jurisdiction or power of the court.”
Actions; Forum Shopping; Words and Phrases; Forum shopping “occurs when a party attempts
to have his action tried in a particular court or jurisdiction where he feels he will receive the most
favorable judgment or verdict,” and in our jurisdiction, it has taken the form of filing multiple
petitions or complaints involving the same issues before two or more tribunals or agencies in the hope
that one or the other court would make a favorable disposition.—This Court further notes that while
petitioners filed their last pleading in this case,411
VOL. 548, MARCH 14, 2008 411
Heirs of Cesar Marasigan vs. Marasigan
their Memorandum, on 26 December 2003, they failed to mention therein that the Court of
Appeals had already dismissed CA-G.R. SP No. 78912. To recall, CA-G.R. No. 78912 is a Petition
for Certiorari and Mandamus involving the RTC Order dated 2 July 2003, which denied petitioners’
Notice of Appeal. Petitioners intended to appeal the RTC Omnibus Order dated 5 May 2003
sustaining the public auction and sale of petitioners’ share in Alicia’s estate. Petitioners’ failure to
provide this Court with information on the developments in CA-G.R. SP No. 78912 is not only in
violation of the rules on non-forum shopping, but is also grossly misleading, because they are raising
in their Memorandum in the present case the same issues concerning the public auction and sale of
their share in Alicia’s estate. The purpose of the rule against forum shopping is to promote and
facilitate the orderly administration of justice. Forum shopping “occurs when a party attempts to
have his action tried in a particular court or jurisdiction where he feels he will receive the most
favorable judgment or verdict.” In our jurisdiction, it has taken the form of filing multiple petitions
or complaints involving the same issues before two or more tribunals or agencies in the hope that
one or the other court would make a favorable disposition. There is also forum shopping when,
because of an adverse decision in one forum, a party seeks a favorable opinion (other than by appeal
or certiorari) in another. The rationale against forum shopping is that a party should not be allowed
to pursue simultaneous remedies in two different fora. Filing multiple petitions or complaints
constitutes abuse of court processes, which tends to degrade the administration of justice, wreaks
havoc upon orderly judicial procedure, and adds to the congestion of the heavily burdened dockets of
the courts. Thus, the rule proscribing forum shopping seeks to promote candor and transparency
among lawyers and their clients in the pursuit of their cases before the courts to promote the orderly
administration of justice, prevent undue inconvenience upon the other party, and save the precious
time of the courts. It also aims to prevent the embarrassing situation of two or more courts or
agencies rendering conflicting resolutions or decisions upon the same issue.
Same; Partition; An action for partition comprises two phases: first, the trial court, after
determining that a co-ownership in fact exists and that partition is proper, issues an order for
partition; and, second, the trial court promulgates a decision confirming the sketch and subdivision
of the properties submitted by the parties (if the412
412 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
parties reach an agreement) or by the appointed commissioners (if the parties fail to agree), as
the case may be.—In this jurisdiction, an action for partition is comprised of two phases: first, the
trial court, after determining that a co-ownership in fact exists and that partition is proper, issues
an order for partition; and, second, the trial court promulgates a decision confirming the sketch and
subdivision of the properties submitted by the parties (if the parties reach an agreement) or by the
appointed commissioners (if the parties fail to agree), as the case may be. The delineations of these
two phases have already been thoroughly discussed by this Court in several cases where it explained:
The first phase of a partition and/or accounting suit is taken up with the determination of whether
or not a co-ownership in fact exists, (i.e., not otherwise legally proscribed) and may be made by
voluntary agreement of all the parties interested in the property. This phase may end with a
declaration that plaintiff is not entitled to have a partition either because a co-ownership does not
exist, or partition is legally prohibited. It may end, upon the other hand, with an adjudgment that a
co-ownership does in truth exist, partition is proper in the premises and an accounting of rents and
profits received by the defendant from the real estate in question is in order. In the latter case, the
parties may, if they are able to agree, make partition among themselves by proper instruments of
conveyance, and the court shall confirm the partition so agreed upon. In either case—i.e., either the
action is dismissed or partition and/or accounting is decreed—the order is a final one, and may be
appealed by any party aggrieved thereby. The second phase commences when it appears that “the
parties are unable to agree upon the partition” directed by the court. In that event, partition shall
be done for the parties by the court with the assistance of not more than three (3) commissioners.
This second stage may well also deal with the rendition of the accounting itself and its approval by
the court after the parties have been accorded opportunity to be heard thereon, and an award for the
recovery by the party or parties thereto entitled of their just share in the rents and profits of the real
estate in question. Such an order is, to be sure, final and appealable.
Due Process; Due process is not a mantra, the mere invocation of which shall warrant a reversal
of a decision—well-settled is the rule that the essence of due process is the opportunity to be heard.—
As the Court of Appeals declared, due process is not a mantra, the mere invocation of which shall
warrant a reversal of a decision. Well-413
VOL. 548, MARCH 14, 2008 413
Heirs of Cesar Marasigan vs. Marasigan
settled is the rule that the essence of due process is the opportunity to be heard. In Legarda v.
Court of Appeals, 280 SCRA 642 (1997), the Court held that as long as parties to a case were given
the opportunity to defend their interest in due course, they cannot be said to have been denied due
process of the law. Neither do the records show any indicia that the preference of petitioners for the
physical subdivision of the property was not taken into consideration by the Commissioners.
Same; Words and Phrases; Black’s Law Dictionary defines the word “prejudice” as damage or
detriment to one’s legal rights or claims—it means injury or damage; Mere allegations cannot be the
basis of a finding of prejudice.—Petitioners’ persistent assertion that their rights were prejudiced by
the lack of notice is not enough. Black’s Law Dictionary defines the word prejudice as damage or
detriment to one’s legal rights or claims. Prejudice means injury or damage. No competent proof was
adduced by petitioners to prove their allegation. Mere allegations cannot be the basis of a finding of
prejudice. He who alleges a fact has the burden of proving it and a mere allegation is not evidence.
Certiorari; Factual questions are not within the province of a petition for certiorari—the writ of
certiorari issues for the correction of errors of jurisdiction only or grave abuse of discretion amounting
to lack or excess of jurisdiction and cannot be used for any other purpose.—The correctness of the
finding of the RTC and the Commissioners that dividing Alicia’s estate would be prejudicial to the
parties cannot be passed upon by the Court of Appeals in a petition for certiorari. Factual questions
are not within the province of a petition for certiorari. There is a question of fact when the doubt
arises as to the truth or falsity of the alleged facts. As to whether the court a quo decided the question
wrongly is immaterial in a petition for certiorari. It is a legal presumption that findings of fact of a
trial court carry great weight and are entitled to respect on appeal, absent any strong and cogent
reason to the contrary, since it is in a better position to decide the question of credibility of witnesses.
The writ of certiorari issues for the correction of errors of jurisdiction only or grave abuse of discretion
amounting to lack or excess of jurisdiction. The writ of certiorari cannot be legally used for any other
purpose. At most, the petition pertains to an error of judgment, and not of jurisdiction, for clearly
under Section 5 of Rule 69, the question of whether a party’s interest shall be prejudiced by the 414
414 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
division of the real property is left to the determination and discretion of the Commissioners.
Judicial Review; Basic is the principle that a constitutional issue may only be passed upon if
essential to the decision of a case or controversy.—It is totally unnecessary for this Court to address
the issue raised by petitioners concerning the alleged unconstitutionality of Section 5, Rule 69 of the
Rules of Court for having been issued beyond the constitutional limitation on the rule-making power
of this Court. Basic is the principle that a constitutional issue may only be passed upon if essential
to the decision of a case or controversy. A purported constitutional issue raised by petitioners may
only be resolved if essential to the decision of a case and controversy. Even if all the requisites for
judicial review are present, this Court will not entertain a constitutional question unless it is the
very lis mota of the case or if the case can be disposed of on some other grounds, such as the
application of a statute or general law. The present problem of partition by co-heirs/co-owners can
be resolved without elevating their case to one of constitutionality.
Partition; Assignment; Words and Phrases; Partition, in general, is the separation, division,
and assignment of a thing held in common by those to whom it may belong.—Petitioners’ argument
that the assignment of the property will not terminate the co-ownership is specious, considering that
partition, in general, is the separation, division, and ASSIGNMENT of a thing held in common by
those to whom it may belong. Inasmuch as the parties continued to manifest their desire to terminate
their co-ownership, but the co-heirs/co-owners could not agree on which properties would be allotted
to each of them, this Court finds that the Court of Appeals was correct in ruling that the RTC did
not act with grave abuse of discretion amounting to lack or excess of jurisdiction when it approved
the Commissioners’ recommendation that the co-heirs/co-owners assign their shares to one of them
in exchange for proper compensation.
Actions; Courts; Judgments; With the full knowledge that courts are not infallible, the litigants
submit their respective claims for judgment, and they have a right at some time or another to have
final judgment on which they can rely over a final disposition of the issue or issues submitted, and to
know that there is an end to the litigation; otherwise, there would be no end to legal processes.—This
Court has consistently held that one of the purposes for which courts 415
VOL. 548, MARCH 14, 2008 415
Heirs of Cesar Marasigan vs. Marasigan
are organized is to put an end to controversy in the determination of the respective rights of
the contending parties. With the full knowledge that courts are not infallible, the litigants submit
their respective claims for judgment, and they have a right at some time or another to have final
judgment on which they can rely over a final disposition of the issue or issues submitted, and to know
that there is an end to the litigation; otherwise, there would be no end to legal processes.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Euclides G. Forbes and Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles for
petitioners.
Falcon Law Offices for respondents.
CHICO-NAZARIO, J.:
This is a Petition for Review under Rule 45 of the Revised Rules of Court, with
petitioners praying for the reversal of the Decision 1 of the Court of Appeals dated 31 July
2002 and its Resolution2 dated 13 November 2002 denying the Petition for Certiorari and
Prohibition, with prayer for the issuance of a writ of preliminary injunction and restraining
order, in CA- G.R. SP No. 67529. Petitioners are asking this Court to (a) give due course to
their petition; and (b) reverse and set aside, and thus, declare null and void the Decision
of the Court of Appeals in CA-G.R. SP No. 67529. However, petitioners are asking for the
following reliefs in their Memorandum: (a) the
_______________
1 Penned by Court of Appeals Associate Justice Conchita Carpio-Morales (now Supreme Court Justice) with
Associate Justices Martin S. Villarama, Jr. and Mariano C. Del Castillo, concurring. Rollo, pp. 26-32.
2 Penned by Associate Justice Martin S. Villarama, Jr. (Acting Chairperson for the Division) with Associate
Justices Mariano C. Del Castillo and Danilo B. Pine, concurring. Id., at pp. 43-44.
416
416 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
dismissal of the complaint for partition of the estate of the late Alicia Marasigan, docketed
as Special Civil Action No. P-77-97, filed before the Regional Trial Court (RTC) of Pili,
Camarines Sur; (b) annulment or rescission of the public auction sale of petitioners’ 1/7th
undivided share in the estate of Alicia Marasigan, and direct Apolonio Marasigan to
restore the same to petitioners; or (c) in the alternative, allowance of the physical partition
of the entire 496 hectares of Hacienda Sta. Rita.
Central to the instant Petition is the estate of Alicia Marasigan (Alicia).
Alicia was survived by her siblings: Cesar, Apolonio, Lilia, and Benito; Marissa, a
sister-in-law; and the children of her brothers who predeceased her: Francisco, Horacio,
and Octavio. She died intestate and without issue on 21 January 1995.
On 17 December 1997, a Complaint for Judicial Partition of the Estate of Alicia
Marasigan was filed before the RTC by several of her heirs and private respondents herein,
namely, Apolonio, Lilia, Octavio, Jr., Horacio, Benito, Jr., and Marissa, against Cesar,
docketed as Special Civil Action No. P-77-97.
According to private respondents, Alicia owned in common with her siblings 13 parcels
of land called Hacienda Sta. Rita in Pili and Minalabac, Camarines Sur, with an aggregate
area of 4,960,963 square meters or 496 hectares, and more particularly described as
follows:
ORIGINAL CERTIFICATE OF TITLE NO. 626
“A parcel of land denominated as Lot 516-B of the Subdivision Survey Plan Csd-05-001020, situated
at Sagurong, Pili, Camarines Sur, bounded on the NE., by PNR; on the SE., by Bgy. Road; on the
SW., by Lot 2870; and on the NW., by Lot 512, containing an area of EIGHT THOUSAND SEVEN
HUNDRED TWELVE (8,712) SQUARE METERS, more or less, declared under A.R.P. No. 014 166
and assessed at P12,860.00.”417
VOL. 548, MARCH 14, 2008 417
Heirs of Cesar Marasigan vs. Marasigan
ORIGINAL CERTIFICATE OF TITLE NO. 627
“A parcel of land denominated as Lot 4237, Cad-291, Pili Cadastre, Plan Cen-05-000006, situated at
Saguron, Pili, Camarines Sur, bounded on the N., by Irr. ditch beyond Lot 445; on the E., by Lots
517 and 518; on the S., by Creek, Lot 468, 467; and on the W., by Lot 2948 and Mun. of Minalabac,
containing an area of EIGHT HUNDRED SIXTY ONE THOUSAND ONE HUNDRED SIXTY
THREE (861,163) SQUARE METERS, more or less, declared under A.R.P. No. 016 268 and assessed
at P539,020.00.”
ORIGINAL CERTIFICATE OF TITLE NO. 628
“A parcel of land denominated as Lot 2870 Cad. 291, Pili Cadastre Plan Swo-05000607, situated at
Sagurong, Pili, Camarines Sur, bounded on the N., by Binasagan River; on the E., by Lots 512 and
516; on the S., by Barangay Road; and on the W., by Lot 469, containing an area of THIRTEEN
THOUSAND FOUR HUNDRED SIXTY TWO (13,462) SQUARE METERS, more or less, declared
under A.R.P. No. 014 130 and assessed at P15,180.00.”
ORIGINAL CERTIFICATE OF TITLE NO. 629
“A parcel of land denominated as Lot 517-B of the Subdivision Survey Plan Csd-05-001020, situated
at Sagurong, Pili, Camarines Sur, bounded on the NE., by PNR; on the SE., by Lot 519; on the SW.,
by Lots 2025 and 2942; and on the NW., by Brgy. Road, containing an area of THIRTEEN
THOUSAND SEVEN HUNDRED SIXTY FIVE (13,765) SQUARE METERS, more or less, declared
under A.R.P. No. 014 167 and assessed at P20,310.00.”
ORIGINAL CERTIFICATE OF TITLE NO. 652
“A parcel of land denominated as Lot 4207-B of the subdivision survey Plan Csd-05-011349-D,
situated at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lot 4207-C, Lot 6157;
on the SE., by Irr. ditch, Lot 2942; and on the NW., by Lot 4298 (3051-B), containing an area of
FIFTY FOUR (54) SQUARE METERS, more or less, declared under A.R.P. No. 014 384 and assessed
at P40.00.”
ORIGINAL CERTIFICATE OF TITLE NO. 653
“A parcel of land denominated as Lot 4207-A of the subdivision survey Plan Csd-05-011349-D,
situated at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lot 4205 (I0T 443-A
Csd-05-418
418 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
001019); on the SE., and SW., by Irr. ditch (Lot 2942); on the W., by Lot 4207-C Lot 6157; and on the
NW., by Lot 4208 (Lot 3051-B, Csd-05-001019), containing an area of TWENTY SEVEN THOUSAND
THREE HUNDRED THIRTY SEVEN (27,33) SQUARE METERS, more or less, declared under
A.R.P. No. 014 383 and assessed at P20,150.00.”
A.R.P. NO. 014 385
“A parcel of land denominated as Lot 4207-C Lot 6157 of the subdivision survey Plan Csd-05-001019,
situated at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lot 4207-A Lot 6155;
on the SE., by Lot 4207-A Lot 6155; on the SW., by Lot 4207-B Lot 6156 and Irr, ditch; and on the
NW., by Lot 4208 (3051-B), containing an area of THREE HUNDRED SIXTY ONE (361) SQUARE
METERS, more or less, declared under A.R.P. No. 014 385 and assessed at P270.00.”
ORIGINAL CERTIFICATE OF TITLE NO. 654
“A parcel of land denominated as Lot 443-A of the subdivision survey Plan Csd-05-001019, situated
at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lots 474, 4019, 4018, 4027,
creek; on the SE., by Hrs. of Benito Marasigan; and on the NW., by Lot 443-B, Ireneo Llorin;
containing an area of TWO HUNDRED FORTY FOUR THOUSAND EIGHT HUNDRED FIFTY
EIGHT (244,858) SQUARE METERS, more or less, declared under A.R.P. No. 014 382 and assessed
at P195,400.00.”
ORIGINAL CERTIFICATE OF TITLE NO. 655
“A parcel of land denominated as Lot 2942-A of the subdivision survey Plan Csd-05-010854-D,
situated at Sagurong (San Jose/San Agustin), Pili, Camarines Sur, bounded on the N., by Creek; on
the NE., by Lot 3049; on the SE., by Creek; and on the W., by Lots 3184, 3183, 2942-13, 3183, 3060
and 3177; containing an area of FOUR HUNDRED SIXTY SIX THOUSAND SIX HUNDRED
TWENTY TWO (466,622) SQUARE METERS, more or less, declared under A.R.P. No. 014 386 and
assessed at P287,160.00.”
ORIGINAL CERTIFICATE OF TITLE NO. 656
“A parcel of land denominated as Lot 2 Plan Cen-05-000007, situated at San Jose, Pili, Camarines
Sur, bounded on the N., by Lots 509 and 508, Binasagan River; on the E., by Lots 523, 521 and 520;
on the S.,419
VOL. 548, MARCH 14, 2008 419
Heirs of Cesar Marasigan vs. Marasigan
by Lot 522; and on the W., by Phil. Nat’l. Railways; containing an area of ONE HUNDRED FIVE
THOUSAND TWO HUNDRED TWELVE (105,212) SQUARE METERS, more or less, declared under
A.R.P. No. 016 939 and assessed at P524,220.00.”
ORIGINAL CERTIFICATE OF TITLE NO. 657
“A parcel of land denominated as Lot 1, Plan Cen-05-000007, situated at San Jose, Pili, Camarines
Sur, bounded on the N., by Lots 525, 526, 527; on the E., by Lots 528-A, 529, 530, 531, 532 and Nat’l.
Road; on the S., by Lots 533 and 522 pt.; and on the W., by Lots 521, 523; containing an area of FIFTY
SIX THOUSAND SIX HUNDRED FIFTY TWO (56,652) SQUARE METERS, more or less, declared
under A.R.P. No. 016 993 and assessed at P292,090.00”
TRANSFER CERTIFICATE OF TITLE NO. 16841
“A parcel of land denominated as Lots 1 and 2, Plan II-10759, situated at Manapao, Minalabac,
Camarines Sur, bounded on the N., by Lots 3061, 3059, 4119, 3178, 3185, 3186, 3187, 3188,
Borabodan Creek, 4350, 4401; and on the W., by Lots 4380, 3030, 3057. 3286, 3053, 3056; containing
an area of TWO MILLION NINE HUNDRED TWENTY TWO THOUSAND FIFTY NINE (2,922,059)
SQUARE METERS, more or less, declared under A.R.P. No. 014 0372 and assessed at P888,200.00.”
TRANSFER CERTIFICATE OF TITLE NO. 16842
“A parcel of land denominated as Lot 443-A of Plan Psu-62335, situated at Manapao, Minalaban,
Camarines Sur (San Jose, Pili, Cam. Sur); bounded on the NE., by Shannon Richmond and Eugenio
Dato; on the E., by Eugenio Dato; on the S., by Eugenio Dato and Creek; and on the SW and NW., by
Shannon Richmond; containing an area of TWO HUNDRED FORTY THOUSAND SEVEN
HUNDRED SIX (240,706) SQUARE METERS, more or less, declared under A.R.P. No. 014 245 and
assessed at P146,830.00.” 3
Alicia left behind her 2/21 shares in the afore-described 13 parcels of land.
_______________
3 Records, pp. 3-5.
420
420 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
In answer to the private respondents’ Complaint, Cesar enumerated Alicia’s several
other properties and assets which he also wanted included in the action for partition, to
wit:
“1. 1/8 share in the parcel of land covered by TCT No. 10947 located at Poblacion, San Juan,
Batangas, containing an area of 4,827 square meters, more or less;
2. 1/8 share in the parcel of land with improvements thereon (cockpit arena) located in
Poblacion, San Juan, Batangas covered by TCT No. 0-3255;
3. A parcel of commercial land under property Index No. 024-21-001-25-005 situated in
Poblacion, San Juan Batangas containing an area of 540 square meters, more or less;
4. A parcel of land situated in Yabo, Sipocot, Camarines Sur containing an area of 2,000
hectares and covered by Tax Declaration No. 7546;
5. A parcel of land located at Brgy. Yabo, Sipocot, Camarines Sur with an area of 21,000 square
meters, more or less, covered by Tax Declaration No. 6622;
6. A parcel of land located at Brgy. Yabo, Sipocot, Camarines Sur with an area of 2,6750
hectares under Tax Declaration No. 5352;
7. A parcel of land located at Barrio Yabo, Sipocot, Camarines Sur with an area of 2,3750
hectares and covered by Tax Declaration No. 3653, and
8. Shares of Stock in Bolbok Rural Bank, Inc., a family owned rural bank consisting of 3,230
shares at P100.00 per share.” 4
Cesar’s request for inclusion was contested by private respondents on the ground that the
properties he enumerated had already been previously partitioned and distributed to the
appropriate parties.5
4 Id., at 261-262.
5 Also, the RTC ordered the cancellation of the adverse claim of Cesar Marasigan annotated in the certificates
of title covered in the complaint.
421
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Heirs of Cesar Marasigan vs. Marasigan
On 4 February 2000, the RTC decided in favor of private respondents and issued an
Order of Partition of the Estate of Alicia Marasigan, decreeing that:
“As regards to [sic] the real properties located in Hacienda Sta. Rita in the municipalities of Pili and
Minilabac, Camarines Sur as described in par. 3 of the complaint, the actual area representing the
2/21 pro-indiviso share having been determined consisting of 422,422.65 sq. meters, more or less
(Exhibit “0-2”) therefore, the share of each heir of the late Alicia Marasigan is 1/7 or
equivalent to 67,496.09 square meters each (Exh. “0-3”).
Wherefore, in view of the foregoing, decision is hereby rendered.
1. Ordering the partition of the estate of Alicia Marasigan in Hacienda Sta. Rita located in the
municipalities of Pili and Minalabac, Camarines Sur consisting of 422,422.65 sq. meters among
her surviving brothers and sisters namely: APOLONIO, LILIA, BENITO and CESAR, all
surnamed MARASIGAN who will inherit per capita and her nephews and nieces who are the
children of deceased brothers—the children of Francisco Marasigan and children of Horacio
Marasigan who will inherit per stirpes and Octavio Marasigan, Jr., who will inherit by right of
representation of his deceased father, Octavio Marasigan, Sr.
2. Declaring the partition of the San Juan, Batangas properties made by the heirs of Alicia
Marasigan as contained in the minutes of the Board Meeting of the Rural Bank of Bolbok valid
and binding among them.
3. Ordering the partition of the real properties located in San Juan, Batangas as shown and
reflected in Exhibits “1” to “10” inclusive presented by defendant, in the same sharing and
proportion as provided in paragraph one above-cited in this dispositive portion.
4. No pronouncement as to costs.” 6
As the parties could not agree on how they shall physically partition among themselves
Alicia’s estate, private respon-
_______________
6 Rollo, p. 161.
422
422 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
dents filed a Motion to Appoint Commissioners7 following the procedure outlined in
Sections 4, 5, 6 and 7 of Rule 69 of the Rules of Court, citing, among other bases for their
motion:
“That unfortunately, the parties could not agree to make the partition among themselves which
should have been submitted for the confirmation of the Honorable Court more so because no physical
division could be had on the 2/21 pro-indiviso shares of the decedent [Alicia] due to different locations,
contours and conditions;”
The RTC granted the Motion and appointed Myrna V. Badiong, Assistant Provincial
Assessor of Camarines Sur, as Chairman of the Board of Commissioners.8 Private
respondents nominated Sandie B. Dacara as the second commissioner. Cesar failed to
nominate a third commissioner despite due notice. Upon lapse of the period given, only two
commissioners were appointed.
On 26 October 2000, the two Commissioners conducted an ocular inspection of
Hacienda Sta. Rita, together with the Local Assessment Operations Officer IV of the
Provincial Assessor’s Office, the Barangay Agrarian Reform Committee (BARC)
Chairman, and the Marasigans’ caretaker. However, Cesar contended that he did not
receive any notice from the Commissioners to attend the ocular inspection and he was,
thus, not present on said occasion.
The Commissioners’ Report9 was released on 17 November 2000 stating the following
findings and recommendations:
“The undersigned Commissioners admit the 472,472.65 (47.2472.65) square meters representing
the 2/21 pro indivisoshare of the deceased Alicia Marasigan and the 1/7 share of each of the heirs of
Alicia N. Marasigan equivalent to 67,496.09 square meters or 6.7496.09 hectares determined by
Geodetic Engineer Roberto R.
_______________
7 Motion dated 25 April 2000, CA Rollo, p. 24.
8 Order dated 4 May 2000; id., at 25.
9 Id., at pp. 26-30.
423
VOL. 548, MARCH 14, 2008 423
Heirs of Cesar Marasigan vs. Marasigan
Revilla in his Compliance with the Order of the Honorable Court dated November 18, 1998.
Considering that the physical division of the 2/21 pro indiviso share of the decedent, Alicia
Marasigan cannot be done because of the different locations and conditions of the properties,
undersigned Commissioners hereby recommend that the heirs may assign their 1/7 share to one of
the parties willing to buy the same (Sec. 5, Rule 69 of the Rules of Court) provided he pays to the
heir[s] willing to assign his/her 1/7 share such amounts the Commissioners have recommended and
duly approved by the Honorable Court.
In consideration of such findings and after a careful and thorough deliberations by the
undersigned on the subject matter, considering the subject properties’ classification and actual
predominant use, desirability and demand and together with the benefits that may be derived
therefrom by the landowners, we have decided to recommend as it is hereby recommended that the
price of the 1/7 share of each of the heir[s] is P700,000.00 per hectare, thus:
P700,000.00 x 6.7496.09 hectares = P4,724,726.30 or in words:
FOUR MILLION SEVEN HUNDRED TWENTY FOUR THOUSAND SEVEN HUNDRED TWENTY
SIX AND 30/100 PESOS FOR THE 1/7 SHARE (6.7496.09 HECTARES) OF EACH OF THE HEIRS. 10
Cesar opposed the foregoing findings and prayed for the disapproval of the
Commissioners’ Report. In his Comment/Opposition to the Commissioners’ Report, he
maintained that:
“He does not expect that he would be forced, to buy his co-owner’s share or to sell his share instead.
Had he known that it would be the recourse he would have appealed the judgment [with petitioners
referring to the RTC Order of Partition]. But the findings of facts in the Decision as well [as]
dispositive do not show that any valid grounds for exception to partition is even present in the instant
case.”11
_______________
10 Id., at pp. 29-30.
11 3 February 2001 Comment/Opposition filed by petitioners, then defendants, versus the Commissioner’s
Report. Id., at pp. 32-36.
424
424 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
Cesar alleged that the estate is not indivisible just because of the different locations
and conditions of the parcels of land constituting the same. Section 5, Rule 69 of the Rules
of Court can only be availed of if the partition or division of the real properties involved
would be prejudicial to the interest of any of the parties. He asserted that despite the
segregation of his share, the remaining parcels of land would still be serviceable for the
planting of rice, corn, and sugarcane, thus evidencing that no prejudice would be caused to
the interests of his co-heirs.
Countering Cesar’s arguments, private respondents contended that physical division is
impossible because Alicia’s estate is equivalent to 2/21 shares in Hacienda Sta. Rita, which
is composed of 13 parcels under different titles and tax declarations, situated in
different barangays and municipalities, and covers an area of 496 hectares.
After a serious consideration of the matters raised by the parties, the RTC issued an
Order dated 22 June 2001 approving in toto the recommendations embodied in the
Commissioners’ Report, particularly, the recommendation that the property be assigned to
one of the heirs at P700,000.00 per hectare or a total amount of P4,724,726.00,12 after finding
the same to be in accordance with the Rules of Court and the New Civil Code. Pertinent
portions of the Order are reproduced below:
“WHEREFORE, in view of all the foregoing, the Commissioners Report dated November 17, 2000
is hereby approved in toto, more specifically its recommendation to assign the property to any one of
the heirs interested at the price of P700,000.00 per hectare or in the total amount of P4,724,726.00
per share.
Regarding the properties of deceased Alicia Marasigan located at San Juan, Batangas, the herein
Commissioners, Mrs. Myrna V. Badiong and Engr. Sandie B. Dacara are hereby directed to proceed
with utmost dispatch to San Juan, Batangas and inspect said prop-
_______________
 12 Id., at p. 59.
425
VOL. 548, MARCH 14, 2008 425
Heirs of Cesar Marasigan vs. Marasigan
erties (Exhibits “1” to “10” inclusive) and thereafter to submit a Supplemental Report as to its
partition or other disposition with notice to all parties and their counsels all at the expense of the
estate, within a period of thirty (30) days from receipt hereof.”
Dissatisfied, Cesar filed a Motion for Reconsideration, 13which was denied by the RTC
for lack of merit.14
In the meantime, Cesar died on 25 October 2001. He was substituted by his heirs and
herein petitioners, namely, Luz Regina, Cesar, Jr., Benito, Santiago, Renato, Jose,
Geraldo, Orlando, Peter, Paul, Mauricio, Rommel, Michael, Gabriel, and Maria Luz, all
surnamed Marasigan.
Upon the denial by the RTC of Cesar’s Motion for Reconsideration, petitioners elevated
their case to the Court of Appeals via a Petition for Certiorari and Prohibition under Rule
65 of the Rules of Court, docketed as Special Civil Action No. 67529.15 They claimed that
the RTC judge acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in approving the Commissioners’ Report although the facts would clearly
indicate the following:
“(a) The procedure taken by the Commissioners violated the procedure for partition provided in
Section 4, Rule 69 of the 1997 Rules of Procedure because there was no notice sent to them for the
viewing and examination of the properties of the estate; neither were they heard as to their
preference in the portion of the estate, thus depriving them of due process;
(b) The ground used by the Commissioners resulting in their recommendation to assign the
property is not one of those grounds provided under the Rules
(c) Article 492 of the New Civil Code is inapplicable
(d) Assignment of the real properties to one of the parties will not end the co-ownership.”
_______________
13 Id., at pp. 60-67.
14 10 October 2001; id., at pp. 94-95.
15 Rollo, pp. 45-55.
426
426 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
Moreover, petitioners accused the RTC of committing grave abuse of discretion in solely
relying on the testimony of Apolonio to the effect that physical division is impractical
because, while other portions of the land are suitable for agriculture, the others are not,
citing the different contours of the land and unavailability of water supply in some parts.
The Court of Appeals dismissed petitioners’ Petition for Certiorari and Prohibition in a
Decision16 promulgated on 31 July 2002, and ruled that the RTC acted within its authority
in issuing the Order of 22 June 2001. The Court of Appeals found that petitioners failed to
discharge the burden of proving that the proceedings before the Board of Commissioners
were unfair and prejudicial. It likewise found that the petitioners were not denied due
process considering that they were afforded the opportunity to be heard during the hearing
for approval of the Commissioners’ Report on 18 January 2001. According to the appellate
court, whether or not the physical division of the estate will cause prejudice to the interests
of the parties is an issue addressed to the discretion of the Commissioners. It further held
that it would be absurd to believe that the prejudice referred to in Section 5, Rule 69 of the
Rules of Court does not embrace physical impossibility and impracticality. It concurred in
the finding of the RTC that:
“It is not difficult to believe that a physical partition/division of the 2/21 pro-indiviso shares of
the decedent Alicia Marasigan contained in and spread throughout thirteen (13) parcels of the
Hacienda Sta. Rita with a total area of 946 (sic) hectares would be quite impossible if totally
impractical. The said parcels are of different measurements in terms of areas and shapes located in
different barrages of the Municipalities of Pili and Minalabac, Camarines Sur.” 17
_______________
16 Id., at pp. 26-32.
17 Id., at p. 30.
427
VOL. 548, MARCH 14, 2008 427
Heirs of Cesar Marasigan vs. Marasigan
The Court of Appeals also noted that whether or not the RTC correctly applied Section
5, Rule 69 of the Rules of Court and Article 492 of the New Civil Code, would involve an
error of judgment, which cannot be reviewed on certiorari. Finally, the Court of Appeals
found unmeritorious petitioners’ argument that the assignment of the estate to one of the
parties does not end the co-ownership, considering that it questions the 4 February
200018 Decision of the RTC which had already become final and executory.
Petitioners filed a Motion for Reconsideration 19 of the foregoing Decision but the same
was denied by the Court of Appeals in a Resolution dated 13 November 2002. Still
aggrieved, petitioners filed on 31 December 2002 this Petition for Review under Rule 45 of
the Revised Rules of Court, docketed as G.R. No. 156078.
Pending resolution of the instant Petition by this Court, the RTC granted private
respondents’ Urgent Motion for Execution on 26 December 2002. The RTC ordered the sale
of petitioners’ 1/7 pro-indiviso share in Alicia’s estate upon the urgent motion of private
respondents dated 27 September 2002 for the partial execution of the judgment of the
Court approving the Commissioners’ report pending certiorari.20
Petitioners’ share in Alicia’s estate was sold in a public auction on 26 February
2003.21 Based on the Commissioners’ Report on the Auction Sale, there were two bidders,
Apolonio Marasigan and Amado Lazaro. Apolonio, with a bid of P701,000.00 per hectare,
won over Amado Lazaro, whose bid was P700,000.00 per hectare. Petitioners’ 1/7 share as
Cesar’s heirs in Alicia’s estate was sold in the public auction for P3,777,689.00.
_______________
18 This was the Decision cited in the Court of Appeals Decision, although it may be referring to the 22 June
2003 Decision.
19 Rollo, pp. 33-36.
20 Id., at pp. 103-105.
 21 Commissioners’ Report dated 3 March 2003; id., at p. 173.
428
428 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
This amount is lower than the P4,724,726.30 price of the 1/7 share in Alicia’s estate as
earlier determined by the Commissioners due allegedly to the acquisition by the
Department of Agrarian Reform (DAR) of a portion of Hacienda Sta. Rita located in
Minilabac, Camarines Sur which was placed under Republic Act No. 6657, or the
Comprehensive Agrarian Reform Law, with 100.00 hectares thereof compulsorily acquired.
On 24 March 2003, petitioners filed with the RTC a Motion to Declare Failure of
Bidding and to Annul Public Auction Sale.
On 5 May 2003, however, the RTC released an Omnibus Order 22 ruling, among other
things, that the objection of petitioners as to the difference of the value of their 1/7 share
as determined by the Commissioners vis-à-vis the winning bid was no longer an issue since
Apolonio Marasigan indicated his willingness to pay for the deficiency.
Following the public auction and sale of their 1/7 share in the property, 23 petitioners
filed a Notice of Appeal24 with the RTC on 26 May 2003 indicating that they were appealing
the 5 May 2003 Omnibus Order of the RTC25 to the Court of Appeals. Thereafter, or on 9
June 2003, petitioners filed a Record on Appeal26 pursuant to Section 3, Rule 41 of the Rules
of Court, praying that it be approved and transmitted to the Court of Appeals.27
On 2 July 2003, the RTC issued an Order denying due course to petitioners’ Notice of
Appeal on the ground that the
_______________
22 Id., at pp. 186-188.
23 Copies of the same were attached as Annexes “A” and “B” of petitioners’ Reply to the Comment; 28 July
2003; id., at pp. 119-123.
24 Id., at pp. 124-125.
25 Issued by Judge Nilo Malanyaon of the RTC Branch 31, Pili, Camarines Sur on 5 May 2003; id., at pp.
186-188.
26 Id., at pp. 126-153.
27 The RTC, however, issued a Certificate of Finality of the Sale on 17 June 2003.
429
VOL. 548, MARCH 14, 2008 429
Heirs of Cesar Marasigan vs. Marasigan
proper remedy is not appeal, but certiorari. Petitioners then filed on 27 August 2003
another Petition before the Court of Appeals for Certiorari and Mandamus,28 docketed as
CA-G.R. SP No. 78912, praying that the RTC be directed to approve their Notice of Appeal
and Record on Appeal, and to forward the same to the appellate court.
In a Resolution29 dated 10 October 2003, the Court of Appeals dismissed CA-G.R. SP
No. 78912 outright on the ground that the verification and certificate of non-forum
shopping of the petition was signed by only Cesar Marasigan, Jr., without any
accompanying document to prove his authority to sign on behalf of the other petitioners.
Petitioners filed a Motion for Reconsideration but it was denied by the Court of Appeals in
a Resolution30dated 12 July 2004.31
Cesar G. Marasigan, Jr., in a Petition for Certiorari filed with this Court on 4
September 2004 and docketed as G.R. No. 164970, prayed for the reversal and setting aside
of the Court of Appeals Resolution dated 10 October 2003 dismissing CA-G.R. SP No.
78912, and Resolution dated 12 July 2004 denying the Motion for Reconsideration thereof.
This Court, however, issued a Resolution on 13 October 2004 denying the petition for
failure of the petitioner to show that the Court of Appeals committed a reversible error.
The same has become final and executory.
Going back to the Petition at bar, petitioners raise before this Court the following
assignment of errors:
I. THE COURT A QUO HAS DECIDED A QUESTION OF SUBSTANCE NOT THEREFORE
DETERMINED BY THE SU-
_______________
28 Rollo of CA-G.R. SP No. 78912, pp. 2-8.
29 Penned by Associate Justice Elvi John S. Asuncion with Associate Justices Godardo A. Jacinto and Lucas P. Bersamin,
concurring.
30 Id.
31 Petitioners’ Memorandum in the instant case was filed on 26 December 2003.
430
430 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
PREME COURT IN FINDING THAT THERE IS NO NEED FOR DUE NOTICE TO THE PARTIES
TO ATTEND THE VIEWING AND EXAMINATION OF THE REAL ESTATE SUBJECT OF
PARTITION WHEN THE COMMISSIONERS HAVE DECIDED NOT TO PARTITION THE
PROPERTY AND SUCH NOTICE UNDER SECTION 4 OF RULE 69 IS INDISPENSABLE ONLY
WHEN THEIR DECISION IS TO PARTITION.
II. THE DECISION OF THE COURT OF APPEALS IS NOT IN ACCORDANCE WITH LAW
PARTICULARLY WITH ARTICLES 494 AND 495 OF THE NEW CIVIL CODE AND SECTIONS 5
RULE 69 OF THE RULES.
III. THAT THE FINDINGS OF THE COURT OF APPEALS OF PHYSICAL IMPOSSIBILITY
AND IMPRACTICALITY IF EMBRACED IN ‘PREJUDICE’ REFERRED IN SECTION 5, RULE 69
OF THE RULES SHALL MAKE SAID RULE VIOLATIVE OF THE CONSTITUTIONAL
LIMITATIONS ON THE RULE MAKING POWER OF THE SUPREME COURT THAT ITS RULES
SHALL NOT INCREASE, DECREASE OR MODIFY SUBSTANTIVE RIGHTS. 32
In their Memorandum, however, petitioners submitted for resolution the following
issues.
I. RESPONDENTS HAVE NO CAUSE OF ACTION FOR PARTITION BECAUSE THE
SUBJECT MATTER OF THE CASE CONSISTS OF UNDIVIDED SHARES WHICH CANNOT BE
PARTITIONED.
II. THE REGIONAL TRIAL COURT HAS NO JURISDICTION TO PARTITION UNDIVIDED
OR UNIDENTIFIED LAND AND HAS NOT ACQUIRED JURISDICTION OVER 496 HECTARES
OF UNDIVIDED LAND WHICH SHOULD BE THE PROPER SUBJECT OF PARTITION.
III. THE JUDGMENT OF PARTITION AND ALL SUBSEQUENT PROCEEDINGS ARE
NULL AND VOID AB INITIO, INCLUDING THE PUBLIC AUCTION SALE OF PETITIONERS’
SHARES WHICH HAD NOT RENDERED THIS PETITION MOOT.
_______________
 32 Rollo, pp. 16-22.
431
VOL. 548, MARCH 14, 2008 431
Heirs of Cesar Marasigan vs. Marasigan
IV. EVEN ASSUMING ARGUENDO THAT LACK OF CAUSE OF ACTION AND LACK OF
JURISDICTION, AS DISCUSSED, CAN BE IGNORED, THE PROCEEDINGS BELOW ARE
TAINTED WITH SERIOUS IRREGULARITIES THAT CALL FOR THE EXERCISE OF THE
SUPERVISORY POWERS OF THIS HONORABLE COURT.
V. CERTIORARI AS A SPECIAL CIVIL ACTION UNDER RULE 65 AND APPEAL BY
CERTIORARI UNDER RULE 45, BOTH OF THE 1997 RULES OF CIVIL PROCEDURE, WERE
EMPLOYED AS PROPER REMEDIES IN THIS CASE. 33
This Court significantly notes that the first three issues, 34 alleging lack of jurisdiction
and cause of action, are raised by petitioners for the first time in their Memorandum. No
amount of interpretation or argumentation can place them within the scope of the
assignment of errors they raised in their Petition.
The parties were duly informed by the Court in its Resolution dated 17 September 2003
that no new issues may be raised by a party in his/its Memorandum and the issues
raised in his/its pleadings but not included in the Memorandum shall be deemed
waived or abandoned. The raising of additional issues in a memorandum before the
Supreme Court is irregular, because said memorandum is supposed to be in support merely
of the position taken by the party concerned in his petition, and the raising of new issues
amounts to the filing of a petition beyond the reglementary period.35 The purpose of this
rule is to provide all parties to a case a fair opportunity to be heard. No new points of law,
theories, issues or arguments may be raised by a party in the Memorandum for the reason
that to permit these would be
_______________
33 Id., at pp. 236-237.
34 This Court, however, has taken note that the public bidding and sale occurred after the petitioners filed
the instant petition.
35 Manila Railroad Company v. Perez, 121 Phil. 1289, 1294; 14 SCRA 504, 509 (1965).
432
432 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
offensive to the basic rules of fair play, justice and due process. 36
Petitioners failed to heed the Court’s prohibition on the raising of new issues in the
Memorandum.
Moreover, Section 1 of Rule 9 of the Rules of Court provides that:
“SECTION 1. Defenses and objections not pleaded.—Defenses and objections not pleaded either
in a motion to dismiss or in the answer are deemed waived. However, when it appears from the
pleadings or the evidence on record that the court has not jurisdiction over the subject matter, that
there is another action pending between the same parties for the same cause, or that the action is
barred by a prior judgment or by statute of limitations, the court shall dismiss the claim.”
First, it bears to point out that Cesar, petitioners’ predecessor, did not file any motion
to dismiss, and his answer before the RTC did not bear the defenses/objections of lack of
jurisdiction or cause of action on these grounds; consequently, these must be considered
waived. The exception that the court may still dismiss a case for lack of jurisdiction over
the subject matter, although the same is not pleaded, but is apparent in the pleadings or
evidence on record, does not find application to the present Petition. Second, petitioners’
arguments37 on the lack of jurisdiction of the RTC over the case
_______________
36 Republic v. Kalaw, G.R. No. 155138, 8 June 2004, 431 SCRA 401, 406; Spouses Dela Cruz v. Joaquin, G.R.
No. 162788, 28 July 2005, 464 SCRA 576, 582.
37 Paragraphs 37-38; Petitioners’ Memorandum, page 20; Rollo, p. 254.
The subject matter of the complaint in this case is ostensibly the partition of an aliquot share consisting of
47.2 hectares of pro indiviso land in the Estate of the late Alicia Marasigan. In order, however, to be able to
partition the estate of Alicia, it should include the much larger area of 496 hectares located not only in Pili over
which Branch 31 of the RTC of Pili, Camarines Sur has jurisdiction,
433
VOL. 548, MARCH 14, 2008 433
Heirs of Cesar Marasigan vs. Marasigan
more appropriately pertain to venue, rather than jurisdiction over the subject matter, and
are, moreover, not apparent from the pleadings and evidence on record. Third, the property
subject of partition is only the 47.2 hectare pro indiviso area representing the estate of
Alicia. It does not include the entire 496 hectares of land comprising Hacienda Sta. Rita.
Even petitioners’ argument that non-payment of appropriate docket fees by private
respondents deprived the RTC of jurisdiction to partition the entire Hacienda Sta.
Rita38 deserves scant consideration. In National Steel Corporation v. Court of Appeals,39 the
Court ruled:
“x x x while the lack of jurisdiction of a court may be raised at any stage of an action, nevertheless,
the party raising such question may be estopped if he has actively taken part in the very proceedings
_______________
but also in Minalabac, Camarines Sur, over which Branches 19 to 28 of the RTC of Minilabac have jurisdiction.
It may be conceded that Branch 31 could also have jurisdiction over those properties within the jurisdiction of Branches 19
to 28; still, the trial court has not properly acquired jurisdiction over the entire 496 hectares of land because respondents have
not prayed for or paid the appropriate docket fees for it. The action for partition should cover not only the Estate of Alicia
Marasigan, but also the larger estate of 496 hectares. Thus, the Regional Trial Court has no jurisdiction over the partition case
filed.
38 On page 20 of petitioners’ Memorandum, they argue:
The specific prayer of the complaint is for the partition of 2/2 pro indiviso share in Hacienda Sta. Rita, and not 496 hectares
of land, which should be the proper subject of partition.
The general prayer cannot include the partition of 496 hectares which is not sought; but even if it can refer to that large
area, the court has not acquired jurisdiction over the case for non-payment of the appropriate docket fees.
If this case will be allowed to continue, it can only be for the partition of 496 hectares of land and only after payment of the
appropriate docket fees.
39 G.R. No. 123215, 2 February 1999, 302 SCRA 522, 532.
434
434 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
which he questions and he only objects to the court’s jurisdiction because the judgment or the order
subsequently rendered is adverse to him.”
Irrefragably, petitioners raised the issues of jurisdiction for lack of payment of
appropriate docket fees and lack of cause of action belatedly in their Memorandum before
this Court. Cesar and petitioners were noticeably mum about these in the proceedings
before. In fact, Cesar actively participated in the proceedings conducted before the RTC by
seeking affirmative reliefs therefrom, such as the inclusion of more properties in the
partition. Hence, petitioners are already estopped from assailing the jurisdiction of the
RTC on this ground.
It is conceded that this Court adheres to the policy that “where the court itself clearly
has no jurisdiction over the subject matter or the nature of the action, the invocation of
this defense may de done at any time.”40 While it is the general rule that neither waiver
nor estoppel shall apply to confer jurisdiction upon a court, the Court may rule otherwise
under meritorious and exceptional circumstances. One such exception is Tijam v.
Sibonghanoy,41 which finds application in this case. This Court held in Tijam that “after
voluntarily submitting a cause and encountering an adverse decision on the merits, it is
too late for the loser to question the jurisdiction or power of the court.”
This Court further notes that while petitioners filed their last pleading in this case,
their Memorandum, on 26 December 2003, they failed to mention therein that the Court
of Appeals had already dismissed CA-G.R. SP No. 78912.42 To recall, CA-G.R. No. 78912 is
a Petition for Certiorari and
_______________
40 Asset Privatization Trust v. Court of Appeals, G.R. No. 121171, 29 December 1998, 300 SCRA 579, 599.
41 131 Phil. 556, 564; 23 SCRA 29, 36 (1968).
42 In the Motion for Reconsideration filed subsequent thereto, petitioners admit receiving said Resolution of
the Court of Appeals dated 10 October 2003 on 24 October 2003.
435
VOL. 548, MARCH 14, 2008 435
Heirs of Cesar Marasigan vs. Marasigan
Mandamus involving the RTC Order dated 2 July 2003, which denied petitioners’ Notice
of Appeal. Petitioners intended to appeal the RTC Omnibus Order dated 5 May 2003
sustaining the public auction and sale of petitioners’ share in Alicia’s estate. Petitioners’
failure to provide this Court with information on the developments in CA-G.R. SP No.
78912 is not only in violation of the rules on non-forum shopping, but is also grossly
misleading, because they are raising in their Memorandum in the present case the same
issues concerning the public auction and sale of their share in Alicia’s estate. The purpose
of the rule against forum shopping is to promote and facilitate the orderly administration
of justice.
“Forum shopping “occurs when a party attempts to have his action tried in a particular court or
jurisdiction where he feels he will receive the most favorable judgment or verdict.” In our jurisdiction,
it has taken the form of filing multiple petitions or complaints involving the same issues before two
or more tribunals or agencies in the hope that one or the other court would make a favorable
disposition. There is also forum shopping when, because of an adverse decision in one forum, a party
seeks a favorable opinion (other than by appeal or certiorari) in another. The rationale against forum
shopping is that a party should not be allowed to pursue simultaneous remedies in two different fora.
Filing multiple petitions or complaints constitutes abuse of court processes, which tends to degrade
the administration of justice, wreaks havoc upon orderly judicial procedure, and adds to the
congestion of the heavily burdened dockets of the courts. Thus, the rule proscribing forum shopping
seeks to promote candor and transparency among lawyers and their clients in the pursuit of their
cases before the courts to promote the orderly administration of justice, prevent undue inconvenience
upon the other party, and save the precious time of the courts. It also aims to prevent the
embarrassing situation of two or more courts or agencies rendering conflicting resolutions or
decisions upon the same issue.” 43
_______________
43 Wee v. Galvez, G.R. No. 147394, 11 August 2004, 436 SCRA 96, 108-109.
436
436 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
Petitioners have indeed managed to muddle the issues in the instant case by raising
issues for the first time in their Memorandum, as well as including issues that were
already pending before another tribunal and have eventually been decided with finality,
for which reason petitioners are herein admonished by this Court.
The Court, nonetheless, manages to strip the issues in this Petition down to the
singular issue of whether or not the Court of Appeals erred in affirming in toto the RTC
Order adopting the Commissioners’ recommendation on the manner of partition of the
estate of Alicia Marasigan.
After an exhaustive study of the merits of the case and the pleadings submitted by the
parties, this Court is convinced that the Court of Appeals did not err in affirming the Order
of the RTC which approved the Commissioners’ recommendations as to the manner of
implementing the Order of Partition of Alicia’s estate. There is no reason to reverse the
Court of Appeal’s dismissal of petitioners’ Petition for Certiorari and Prohibition and ruling
that the RTC acted well-within its jurisdiction in issuing the assailed Order. Nowhere is it
shown that the RTC committed such patent, gross and prejudicial errors of law or fact, or
a capricious disregard of settled law and jurisprudence, as to amount to a grave abuse of
discretion or lack of jurisdiction on its part, in adopting and confirming the
recommendations submitted by the Commissioners, and which would have warranted the
issuance of a writ of certiorari.
This petition originated from an original action for partition. It is governed by Rule 69
of the Rules of Court, and can be availed of under the following circumstances:
“Section 1. Complaint in action for partition of real estate.—A person having the right to compel
the partition of real estate may do so as provided in this Rule, setting forth in his complaint the
nature and extent of his title and an adequate description of the real estate of which partition is
demanded and joining as defendants all other persons interested in the property.”
437
VOL. 548, MARCH 14, 2008 437
Heirs of Cesar Marasigan vs. Marasigan
 In this jurisdiction, an action for partition is comprised of two phases: first, the trial
court, after determining that a co-ownership in fact exists and that partition is proper,
issues an order for partition; and, second, the trial court promulgates a decision confirming
the sketch and subdivision of the properties submitted by the parties (if the parties reach
an agreement) or by the appointed commissioners (if the parties fail to agree), as the case
may be.44
The delineations of these two phases have already been thoroughly discussed by this
Court in several cases where it explained:
“The first phase of a partition and/or accounting suit is taken up with the determination of whether
or not a co-ownership in fact exists, (i.e., not otherwise legally proscribed) and may be made by
voluntary agreement of all the parties interested in the property. This phase may end with a
declaration that plaintiff is not entitled to have a partition either because a co-ownership does not
exist, or partition is legally prohibited. It may end, upon the other hand, with an adjudgment that a
co-ownership does in truth exist, partition is proper in the premises and an accounting of rents and
profits received by the defendant from the real estate in question is in order. In the latter case, the
parties may, if they are able to agree, make partition among themselves by proper instruments of
conveyance, and the court shall confirm the partition so agreed upon. In either case—i.e., either the
action is dismissed or partition and/or accounting is decreed—the order is a final one, and may be
appealed by any party aggrieved thereby.
“The second phase commences when it appears that “the parties are unable to agree upon the
partition” directed by the court. In that event, partition shall be done for the parties by the court
with the assistance of not more than three (3) commissioners. This second stage may well also deal
with the rendition of the accounting itself and its approval by the court after the parties have been
accorded
_______________
44 Sepulveda, Sr. v. Pelaez, G.R. No. 152195, 31 January 2005, 450 SCRA 302, 312, citing Vda. de Daffon v. Court of Appeals,
436 Phil. 233, 241; 387 SCRA 427, 434 (2002); Maglucot-Aw v. Maglucot, 385 Phil. 720, 730-731; 329 SCRA 78, 89 (2000).
438
438 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
opportunity to be heard thereon, and an award for the recovery by the party or parties thereto
entitled of their just share in the rents and profits of the real estate in question. Such an order is, to
be sure, final and appealable.” 45
Trouble arose in the instant petition in the second phase.
Petitioners postulate that the Court of Appeals erred in holding that notice to the heirs
regarding the examination and viewing of the estate is no longer necessary given the
circumstances. They aver that, in effect, the Court of Appeals was saying that such notice
is only necessary when the Commissioners actually distribute the properties, but is not
mandatory when the Commissioners recommend the assignment of the properties to any
of the heirs. Petitioners contend that this is prejudicial to their right to due process since
they are deprived of the opportunity to be heard on the valuation of their share in the
estate.
Petitioners’ opposition is anchored on Section 4 of Rule 69 of the Rules of Court, which
reads:
“Section 4. Oath and duties of commissioners.—Before making such partition, the
commissioners shall take and subscribe an oath that they will faithfully perform their duties as
commissioners, which oath shall be filed in court with the other proceedings in the case. In making
the partition, the commissioners shall view and examine the real estate, after due notice to
the parties to attend at such view and examination, and shall hear the parties as to their
preference in the portion of the property to be set apart to them and the comparative value
thereof, and shall set apart the same to the parties in lots or parcels as will be most advantageous
and equitable, having due regard to the improvements, situation and quality of the different parts
thereof.”
Petitioners insist that the above provision is explicit and does not allow any
qualification, contending that it does not require that the lack of notice must first be proven
to have
_______________
45 Maglucot-Aw v. Maglucot, id., at pp. 730-731; pp. 89-90.
439
VOL. 548, MARCH 14, 2008 439
Heirs of Cesar Marasigan vs. Marasigan
caused prejudice to the interest of a party before the latter may object to the
Commissioners’ viewing and examination of the real properties on the basis thereof. They
maintain that they were prejudiced by the mere lack of notice.
We, on the other hand, find that the scales of justice have remained equal throughout
the proceedings before the RTC and the Commissioners. This Court, in the performance of
its constitutionally mandated duty to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government, is duty-bound to ensure that due process is
afforded to all the parties to a case.
As the Court of Appeals declared, due process is not a mantra, the mere invocation of
which shall warrant a reversal of a decision. Well-settled is the rule that the essence of due
process is the opportunity to be heard. In Legarda v. Court of Appeals,46 the Court held that
as long as parties to a case were given the opportunity to defend their interest in due
course, they cannot be said to have been denied due process of the law. Neither do the
records show any indicia that the preference of petitioners for the physical subdivision of
the property was not taken into consideration by the Commissioners.
Petitioners’ persistent assertion that their rights were prejudiced by the lack of notice
is not enough. Black’s Law Dictionary defines the word prejudice as damage or detriment
to one’s legal rights or claims. Prejudice means injury or damage. 47 No competent proof was
adduced by petitioners to prove their allegation. Mere allegations cannot be the basis of
_______________
46 G.R. No. 94457, 16 October 1997, 280 SCRA 642, 657.
47 Fuentes, Jr. v. Office of the Ombudsman, G.R. No. 164865, 11 November 2005, 474 SCRA 779, 795.
440
440 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
a finding of prejudice. He who alleges a fact has the burden of proving it and a mere
allegation is not evidence.48
It should not be forgotten that the purpose of the rules of procedure is to secure for the
parties a just, speedy and inexpensive determination of every action or proceeding.49The
ultimate purpose of the rules of procedure is to attain, not defeat, substantial justice. 50
Records reveal that the parties were given sufficient opportunity to raise their
concerns. From the time the action for partition was filed by private respondents, all the
parties, including the late Cesar, petitioners’ predecessor, were given a fair opportunity to
be heard. Since the parties were unable to agree on how the properties shall be divided,
Commissioners were appointed by the Court pursuant to Section 3 of Rule 69 of the Rules
of Court.
“Section 3. Commissioners to make partition when parties fail to agree.—If the parties are
unable to agree upon the partition, the court shall appoint not more than three (3) competent and
disinterested persons as commissioners to make the partition, commanding them to set off to the
plaintiff and to each party in interest such part and proportion of the property as the court shall
direct.”
While the lack of notice to Cesar of the viewing and examination by the Commissioners
of the real properties comprising Alicia’s estate is a procedural infirmity, it did not violate
any of his substantive rights nor did it deprive him of due process. It is a matter of record,
and petitioners cannot deny,
_______________
48 Noceda v. Court of Appeals, G.R. No. 119730, 2 September 1999, 313 SCRA 504, 520; Asia Traders
Insurance Corporation v. Court of Appeals, 467 Phil. 531, 539; 423 SCRA 114, 120 (2004); Apex Mining Co., Inc.
v. Southeast Mindanao Gold Mining Corporation, G.R. No. 152613, 23 June 2006, 492 SCRA 355, 379.
49 Commissioner of Internal Revenue v. A. Soriano Corporation, G.R. No. 113703, 31 January 1997, 267
SCRA 313, 319.
50 Gabionza v. Court of Appeals, G.R. No. 112547, 18 July 1994, 234 SCRA 192, 198.
441
that Cesar was able to file his Comment/Opposition to the Commissioners’ Report. And
after the RTC adopted and confirmed the Commissioners’ recommendations in its Order
dated 22 June 2001, Cesar was able to file a Motion for Reconsideration of the said Order.
He had sufficient opportunity to present before the RTC whatever objections or oppositions
he may have had to the Commissioners’ Report, including the valuation of his share in
Alicia’s estate.
Petitioners also allege that the ruling of the Court of Appeals—that physical
impossibility and impracticality are embraced by the word “prejudice,” referred to in
Section 5 of Rule 69 of the Rules of Court—violates the constitutional limitation on the
rule-making power of the Supreme Court, according to which, the Rules of Court shall not
increase, decrease or modify substantive rights.
According to petitioners, Section 5 of Rule 69 of the Rules of Court, which provides:
“Section 5. Assignment or sale of real estate by commissioners.—When it is made to appear to
the commissioners that the real estate, or a portion thereof, cannot be divided without
prejudice to the interests of the parties, the court may order it assigned to one of the parties willing
to take the same, provided he pays to the other parties such amounts as the commissioners deem
equitable, unless one of the interested parties asks that the property be sold instead of being so
assigned, in which case the court shall order the commissioners to sell the real estate at public sale
under such conditions and within such time as the court may determine.”
should be read in conjunction with Articles 494 and 495 of the New Civil which provide for
the following substantive rights:
“Article 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. 442
442 SUPREME COURT REPORTS ANNOTATED
Heirs of Cesar Marasigan vs. Marasigan
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.
Article 495. Notwithstanding the provisions of the preceding article, the co-owners cannot
demand a physical division of the thing owned in common, when to do so would render unserviceable
for the use for which it is intended. But the co-ownership may be terminated in accordance with
Article 498.”
Article 498 of the New Civil Code, referred to by Article 495 of the same Code, states:
“Article 498. Whenever the thing is essentially indivisible and the co-owners cannot agree that
it be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds
distributed.”
Evidently, the afore-quoted Civil Code provisions and the Rules of Court must be
interpreted so as to give effect to the very purpose thereof, which is to put to an end to co-
ownership in a manner most beneficial and fair to all the co-owners.
As to whether a particular property may be divided without prejudice to the interests
of the parties is a question of fact. To answer it, the court must take into consideration the
type, condition, location, and use of the subject property. In appropriate cases such as the
one at bar, the court may delegate the determination of the same to the Commissioners.
The Commissioners found, after a viewing and examination of Alicia’s estate, that the
same cannot be divided without causing prejudice to the interests of the parties. This
finding is further supported by the testimony of Apolonio Marasigan that the estate cannot
be divided into smaller portions, since only certain portions of the land are suitable to
agriculture,443
while others are not, due to the contours of the land and unavailability of water supply.
The impracticality of physically dividing Alicia’s estate becomes more apparent,
considering that Hacienda Sta. Rita is composed of parcels and snippets of land located in
two different municipalities, Pili and Minalabac, Camarines Sur. The actual area
representing Alicia’s 2/21 pro indiviso shares in Hacienda Sta. Rita is 422,422.65 square
meters, more or less. Each of Alicia’s heirs is entitled to 1/7 share in her estate equivalent
to 67,496.09 square meters or roughly seven hectares.51 Cesar and his heirs are entitled
only to his 1/7 share in the yet unidentified, unsegregated 2/21 pro indiviso shares of Alicia
in each of the 13 parcels of land that comprises Hacienda Sta. Rita. Dividing the parcels of
land even further, each portion allotted to Alicia’s heirs, with a significantly reduced land
area and widely scattered in two municipalities, would irrefragably diminish the value and
use of each portion, as compared to keeping the entire estate intact.
The correctness of the finding of the RTC and the Commissioners that dividing Alicia’s
estate would be prejudicial to the parties cannot be passed upon by the Court of Appeals
in a petition for certiorari. Factual questions are not within the province of a petition
for certiorari. There is a question of fact when the doubt arises as to the truth or falsity of
the alleged facts. As to whether the court a quo decided the question wrongly is immaterial
in a petition for certiorari. It is a legal presumption that findings of fact of a trial court
carry great weight and are entitled to respect on appeal, absent any strong and cogent
reason to the contrary, since it is in a better position to decide the question of credibility of
witnesses.52
The writ of certiorari issues for the correction of errors of jurisdiction only or grave
abuse of discretion amounting to
_______________
lack or excess of jurisdiction. The writ of certiorari cannot be legally used for any other
purpose.53 At most, the petition pertains to an error of judgment, and not of jurisdiction,
for clearly under Section 5 of Rule 69, the question of whether a party’s interest shall be
prejudiced by the division of the real property is left to the determination and discretion of
the Commissioners.
Hence, it is totally unnecessary for this Court to address the issue raised by petitioners
concerning the alleged unconstitutionality of Section 5, Rule 69 of the Rules of Court for
having been issued beyond the constitutional limitation on the rule-making power of this
Court. Basic is the principle that a constitutional issue may only be passed upon if essential
to the decision of a case or controversy.54A purported constitutional issue raised by
petitioners may only be resolved if essential to the decision of a case and controversy. Even
if all the requisites for judicial review are present, this Court will not entertain a
constitutional question unless it is the very lis mota55 of the case or if the case can be
disposed of on some other grounds, such as the application of a statute or general law. The
present problem of partition by co-heirs/co-owners can be resolved without elevating their
case to one of constitutionality.
In the absence of evidence to the contrary, this Court can only presume that the
proceedings in Special Civil Action No. P-77-97 before the RTC, including the
recommendation made by the Commissioners, were fairly and regularly conducted,
meaning that both the RTC and the appointed Commissioners
_______________
53 Flores v. Court of Appeals, 328 Phil. 992, 1024; 259 SCRA 618, 644 (1996).
54 Estrada v. Desierto, G.R. No. 156160, 9 December 2004, 445 SCRA 655, 666.
55 Griffith v. Court of Appeals, 428 Phil. 878, 888; 379 SCRA 94, 103 (2002), citing Hontiveros v. Regional
Trial Court, Br. 25, Iloilo City, G.R. No. 125465, 29 June 1999, 309 SCRA 340, 354.
445
had carefully reviewed, studied, and weighed the claims of all the parties.
Petitioners’ argument that the assignment of the property will not terminate the co-
ownership is specious, considering that partition, in general, is the separation, division,
and ASSIGNMENT of a thing held in common by those to whom it may belong.56
Inasmuch as the parties continued to manifest their desire to terminate their co-
ownership, but the co-heirs/co-owners could not agree on which properties would be
allotted to each of them, this Court finds that the Court of Appeals was correct in ruling
that the RTC did not act with grave abuse of discretion amounting to lack or excess of
jurisdiction when it approved the Commissioners’ recommendation that the co-heirs/co-
owners assign their shares to one of them in exchange for proper compensation.
This Court has consistently held that one of the purposes for which courts are organized
is to put an end to controversy in the determination of the respective rights of the
contending parties. With the full knowledge that courts are not infallible, the litigants
submit their respective claims for judgment, and they have a right at some time or another
to have final judgment on which they can rely over a final disposition of the issue or issues
submitted, and to know that there is an end to the litigation; 57 otherwise, there would be
no end to legal processes.58
Finally, petitioners raise before this Court the issue that the public auction sale of their
shares is null and void; at the
_______________
58 Fabular v. Court of Appeals, 204 Phil. 654, 657; 119 SCRA 329, 331 (1982).
446
same time they allege deficiency in the bid price for their 1/7 share in Alicia’s estate vis-à-
vis the valuation of the same by the Commissioners.59 This Court is already barred from
ruling on the validity of the public auction sale. This Court’s ruling dated 13 October 2004
in G.R. No. 164970 denying their petition for certiorari lays to rest petitioners’ questioning
of the Court of Appeals’ Resolution dismissing their appeal therein of the issue of the
validity of the public sale of their share in Alicia’s estate. Such decision or order can no
longer be disturbed or reopened no matter how erroneous it may have been.60
Indeed, while it is understandable for petitioners to protect their rights to their portions
of the estate, the correlative rights of the other co-owners/co-heirs must also be taken into
consideration to balance the scales of justice. And, by finding the course of action, within
the boundaries of law and jurisprudence, that is most beneficial and equitable for all of the
parties, the courts’ duty has been satisfactorily fulfilled.
Thus, contrary to petitioners’ averments, this Court finds that the Court of Appeals did
not err in ruling that the RTC did not commit grave abuse of discretion amounting to lack
or excess of jurisdiction in adopting and confirming the recommendations of the
Commissioners.
WHEREFORE, premises considered, the Petition for Review on Certiorari is hereby
DENIED for lack of merit, and the assailed Decision dated 31 July 2002 of the Court of
Appeals in docket no. CA-G.R. SP No. 67529 is hereby AFFIRMED. Costs against
petitioners.
 G.R. No. 160956. February 13, 2008. *
JOAQUIN QUIMPO, SR., substituted by Heirs of Joaquin Quimpo, Sr.,
petitioners, vs. CONSUELO ABAD VDA. DE BELTRAN, IRENEO ABAD, DANILO
ABAD, MARITES ABAD, ANITA AND HELEN ABAD, respondents.
Remedial Law; Appeals; Certiorari; Well-entrenched is the rule that the Supreme Court’s role in
a petition under Rule 45 is limited to reviewing or reversing errors of law allegedly committed by the
appellate court; Factual findings of the trial court especially when affirmed by the Court of Appeals,
are conclusive on the parties.—Wellentrenched is the rule that the Supreme Court’s role in a petition
under Rule 45 is limited to reviewing or reversing errors of law allegedly committed by the appellate
court. Factual findings of the trial court, especially when affirmed by the Court of Appeals, are
conclusive on the parties. Since such findings are generally not reviewable, this Court is not duty-
bound to analyze and weigh all over again the evidence already considered in the proceedings below,
unless the factual findings complained of are devoid of support from the evidence on record or the
assailed judgment is based on a misapprehension of facts. Petitioners fail to convince us that the CA
committed reversible error in affirming the trial court and in giving no weight to the pieces of
evidence they presented.
Civil Law; Properties; Sales; A deed of sale, in which the stated consideration has not been, in
fact, paid is a false contract, that it is void ab initio.—In Rongavilla v. Court of Appeals, 294 SCRA
289 (1998) reiterated in Cruz v. Bancom Finance Corp., 379 SCRA 490
_______________
*THIRD DIVISION.
175
VOL. 545, FEBRUARY 13, 2008 175
Quimpo, Sr. vs. Abad Vda. de Beltran
(2002), we held that a deed of sale, in which the stated consideration has not been, in fact, paid
is a false contract; that it is void ab initio. Furthermore, Ocejo v. Flores, 40 Phil. 921 (1920), ruled
that a contract of purchase and sale is null and void and produces no effect whatsoever where it
appears that the same is without cause or consideration which should have been the motive thereof,
or the purchase price which appears thereon as paid but which in fact has never been paid by the
purchaser to the vendor.
Same; Same; Partition; Partition may be inferred from circumstances sufficiently strong to
support the presumption.—For fortythree (43) years, Consuelo and Ireneo occupied their portions of
the San Jose property and significantly, Joaquin never disturbed their possession. They also
installed tenants in parcel IV, and Joaquin did not prevent them from doing so, nor did he assert his
ownership over the same. These unerringly point to the fact that there was indeed an oral partition
of parcels III and IV. In Maglucot-Aw v. Maglucot, 329 SCRA 78 (2000), we held, viz.: [P]artition may
be inferred from circumstances sufficiently strong to support the presumption. Thus, after a long
possession in severalty, a deed of partition may be presumed. It has been held that recitals in deeds,
possession and occupation of land, improvements made thereon for a long series of years, and
acquiescence for 60 years, furnish sufficient evidence that there was an actual partition of land either
by deed or by proceedings in the probate court, which had been lost and were not recorded.
Same; Same; Same; Jurisprudence is replete with rulings that any co-owner may demand at
any time the partition of the common property unless a co-owner has repudiated the co-ownership; An
action for partition does not prescribe and is not subject to laches.—During the pre-trial, Joaquin
Quimpo admitted that: Eustaquia Perfecto Abad and Diego Abad had two (2) children by the names
of Leon Abad and Joaquin Abad; that Leon Abad has three (3) children namely: Anastacia, Wilfredo
and Consuelo, all surnamed Abad; that Joaquin Abad has only one (1) child, a daughter by the name
of Amparo; that Wilfredo has four (4) children, namely, Danilo, Helen, Marites and Anita; Amparo
has one child, son Joaquin Quimpo, x x x Consuelo was the grandchild of Eustaquia, while
respondents Danilo, Helen, Marites, Anita and also Joaquin Quimpo were Eustaquia’s great
grandchildren. As such, respondents can rightfully ask for the confirmation of the oral partition over
parcels III and IV, and the partition of parcels I and II. Jurisprudence is replete with rul-
176
176 SUPREME COURT REPORTS ANNOTATED
Quimpo, Sr. vs. Abad Vda. de Beltran
ings that any co-owner may demand at any time the partition of the common property unless
a co-owner has repudiated the coownership. This action for partition does not prescribe and is not
subject to laches.
Attorney’s Fees; Attorney’s fees may be awarded when a party is compelled to litigate or to incur
expenses to protect its interest by reason of an unjustified act by the other.—Petitioners challenge the
attorney’s fees in favor of respondents. The grant of attorney’s fees depends on the circumstances of
each case and lies within the discretion of the court. It may be awarded when a party is compelled to
litigate or to incur expenses to protect its interest by reason of an unjustified act by the other, as in
this case.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Tito Abuda Oneza for petitioner.
Eustaquio S. Beltran for respondents.
R E S O L U T ION
NACHURA, J.:
This Petition for Review on Certiorari assails the July 22, 2003 Decision of the Court of 1
Appeals in CA-G.R. CV No. 56187, and the October 16, 2003 Resolution denying the motion
for its reconsideration.
Eustaquia Perfecto-Abad (Eustaquia) was the owner of several parcels of land in Goa,
Camarines Sur, described as follows:
Parcel I—Residential land situated at Abucayan, Goa, Camarines Sur covering an area of 684
square-meters;
_______________
1 Penned by Associate Justice Eliezer R. De Los Santos (deceased), with Associate Justices Romeo A. Brawner
(retired) and Jose C. Mendoza, concurring; Rollo, pp. 29-39.
177
VOL. 545, FEBRUARY 13, 2008 177
Quimpo, Sr. vs. Abad Vda. de Beltran
Parcel II—Coconut land situated at Abucayan, Goa, Camarines Sur covering an area of 4.3731
hectares;
Parcel III—Residential land situated at San Jose Street, Goa, Camarines Sur covering an area of
1,395 square meters; and
Parcel IV—Abaca and coconut land situated at Abucayan, Goa, Camarines Sur covering an area
42.6127 hectares.
2
Eustaquia died intestate in 1948 leaving these parcels of land to her grandchild and great
grandchildren, namely, Joaquin Quimpo and respondents Consuelo, Ireneo, Danilo,
Marites, Anita and Helen, all surnamed Abad.
In 1966, Joaquin and respondents undertook an oral partition of parcel III (San Jose
property) and parcel IV. Half of the properties was given to Joaquin and the other half to
the respondents. However, no document of partition was executed, because Joaquin
refused to execute a deed. Consuelo and Ireneo occupied their respective shares in the San
Jose property, and installed several tenants over their share in parcel IV. Joaquin, on the
other hand, became the administrator of the remaining undivided properties and of the
shares of respondents Danilo, Marites, Anita and Helen, who were still minors at that
time.
In 1989, Danilo, Marites, Anita and Helen wanted to take possession of the portions
allotted to them, but Joaquin prevented them from occupying the same. Joaquin also
refused to heed respondents’ demand for partition of parcels I and II, prompting
respondents to file a complaint for judicial partition and/or recovery of possession with
accounting and damages with the Regional Trial Court (RTC) of Camarines Sur. 3
Joaquin denied the material allegations in the complaint, and averred, as his special
and affirmative defenses, lack of cause of action and prescription. He asserted absolute
ownership over parcels III and IV, claiming that he purchased these
_______________
2Rollo, p. 29.
3Id., at pp. 58-62.
178
178 SUPREME COURT REPORTS ANNOTATED
Quimpo, Sr. vs. Abad Vda. de Beltran
lands from Eustaquia in 1946, evidenced by deeds of sale executed on August 23, 1946 and
December 2, 1946. He, likewise, claimed continuous, peaceful and adverse possession of
these lots since 1946, and alleged that Consuelo’s occupation of the portion of the San Jose
property was by mere tolerance. 4
During the pendency of the case, Joaquin died. Accordingly, he was substituted by his
wife, Estela Tena-Quimpo and his children, namely, Jose, Adelia, Joaquin, Anita, Angelita,
Amelia, Arlene, Joy and Aleli, all surnamed Quimpo (the Quimpos).
On December 12, 1996, the RTC rendered a Decision in favor of respondents, declaring
5
them as co-owners of all the properties left by Eustaquia. It rejected Joaquin’s claim of
absolute ownership over parcels III and IV, and declared void the purported deeds of sale
executed by Eustaquia for lack of consideration and consent. The court found that at the
time of the execution of these deeds, Joaquin was not gainfully employed and had no known
source of income, which shows that the deeds of sale state a false and fictitious
consideration. Likewise, Eustaquia could not have possibly given her consent to the sale
because she was already 91 years old at that time. The RTC also sustained the oral
partition among the heirs in 1966. According to the trial court, the possession and
occupation of land by respondents Consuelo and Ireneo, and Joaquin’s acquiescence for 23
years, furnish sufficient evidence that there was actual partition of the properties. It held
that Joaquin and his heirs are now estopped from claiming ownership over the entire San
Jose property as well as over parcel IV.
The RTC disposed, thus:
“WHEREFORE, decision is hereby rendered in favor of the plaintiffs Consuelo Vda. de Beltran,
Ireneo Abad, Marites Abad,
_______________
4Id., at pp. 76-77.
Id., at pp. 125-137.
5
179
VOL. 545, FEBRUARY 13, 2008 179
Quimpo, Sr. vs. Abad Vda. de Beltran
Danilo Abad, Anita Abad and Helen Abad and against defendant Joaquin Quimpo, substituted by
the latter’s wife Estela Tena and their children, Amparo, Jose, Amelia, Joaquin Jr., Adelia, Arlene,
Anita, Joy, Angelita and Aleli, all surnamed Quimpo, as follows:
1. 1.Ordering the above-named substituted defendants, and the plaintiffs to execute their
written agreement of partition with respect to parcel Nos. III and IV more particularly
described in paragraph 7 of the complaint, and for them to execute an agreement of
partition with respect to parcel Nos. I and II, both parcels are more particularly described
in paragraph 7 of the complaint;
2. 2.Declaring the plaintiffs Danilo Abad, Marites Abad, Anita Abad and Helen Abad the
owner of six (6) hectares a portion included in parcel No. IV also described in paragraph 7
of the complaint, and therefore, entitled to its possession and ordering the said substituted
defendants to deliver that portion to them as their share thereto;
3. 3.Ordering the above-named substituted defendants to pay plaintiffs the sum of Six
Thousand Pesos (P6,000.00), Philippine Currency, as reasonable attorney’s fees and the
sum of One Thousand Pesos (P1,000.00) also of Philippine Currency, as litigation expenses
and for the said defendants to pay the costs. The counterclaim, not being proved, the same
is hereby ordered dismissed.
SO ORDERED.” 6
On appeal, the CA affirmed the RTC ruling. Sustaining the RTC, the CA declared that it
was plausible that Eustaquia’s consent was vitiated because she was then 91 years old and
sickly. It was bolstered by the fact that the deeds of sale only surfaced 43 years after its
alleged execution and 23 years from the time of the oral partition. The CA also rejected
petitioners’ argument that the action was barred by prescription and laches, explaining
that prescription does not run against the heirs so long as the heirs, for whose benefit
prescription is invoked, have not expressly or impliedly repudiated the coownership. The
CA found no repudiation on Joaquin’s part. It,
_______________
 6Id., at p. 137.
180
180 SUPREME COURT REPORTS ANNOTATED
Quimpo, Sr. vs. Abad Vda. de Beltran
therefore, concluded that respondents’ action could not be barred by prescription or laches.
The Quimpos, thus, filed the instant petition for review on certiorari imputing the
following errors to the CA:
1. 1)THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PETITIONERS
DID NOT ACQUIRE OWNERSHIP OVER [THE] SUBJECT PARCELS OF LAND BY
WAY OF DEEDS OF ABSOLUTE SALE EXECUTED IN THEIR FAVOR;
2. 2)THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT CO-
OWNERSHIP EXISTS AMONG PETITIONERS AND RESPONDENTS OVER THE
SUBJECT PARCELS OF LAND;
3. 3)THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS
HAVE PROVEN THEIR FILIATION TO THE ORIGINAL OWNER OF THE SUBJECT
PARCELS OF LAND BY MERE SCANT EVIDENCE;
4. 4)THE HONORABLE COURT OF APPEALS ERRED IN NOT RULING THAT LACHES
HAS TIME—BARRED THE RESPONDENTS FROM ASSAILING THE ABSOLUTE
OWNERSHIP OF PETITIONERS OVER THE SUBJECT PARCELS OF LAND; AND
5. 5)THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS
ARE ENTITLED TO ATTORNEY’S FEES. 7 182
The Quimpos insist on the validity of the deeds of sale between Joaquin and Eustaquia.
They assail the probative value and weight given by the RTC and the CA in favor of the
respondents’ pieces of evidence while refusing to give credence or value to the documents
they presented. Specifically, they contend that the notarized deeds of sale and the tax
declarations should have adequately established Joaquin’s ownership of parcels III and IV.
The contention has no merit. Well-entrenched is the rule that the Supreme Court’s role
in a petition under Rule 45 is limited to reviewing or reversing errors of law allegedly com-
_______________
7Id., at p. 17.
181
VOL. 545, FEBRUARY 13, 2008 181
Quimpo, Sr. vs. Abad Vda. de Beltran
mitted by the appellate court. Factual findings of the trial court, especially when affirmed
by the Court of Appeals, are conclusive on the parties. Since such findings are generally
not reviewable, this Court is not duty-bound to analyze and weigh all over again the
evidence already considered in the proceedings below, unless the factual findings
complained of are devoid of support from the evidence on record or the assailed judgment
is based on a misapprehension of facts. 8
Petitioners fail to convince us that the CA committed reversible error in affirming the
trial court and in giving no weight to the pieces of evidence they presented.
The stated consideration for the sale are P5,000.00 and P6,000.00, respectively, an
amount which was so difficult to raise in the year 1946. Respondents established that at
the time of the purported sale Joaquin Quimpo was not gainfully employed. He was
studying in Manila and Eustaquia was the one supporting him; that when Eustaquia died
two (2) years later, Joaquin was not able to continue his studies. The Quimpos failed to
override this. Except for the incredible and unpersuasive testimony of Joaquin’s daughter,
Adelia Magsino, no other testimonial or documentary evidence was offered to prove that
Joaquin was duly employed and had the financial capacity to buy the subject properties in
1946.
In Rongavilla v. Court of Appeals, reiterated in Cruz v. Bancom Finance Corp., we held
9 10
that a deed of sale, in which the stated consideration has not been, in fact, paid is a false
contract; that it is void ab initio. Furthermore, Ocejo v. Flores, ruled that a contract of
11
purchase and sale is null and void and produces no effect whatsoever where it appears that
the same is without cause or consideration which should have
_______________
8Fangonil-Herrera v. Fangonil, G.R. No. 169356, August 28, 2007, 531 SCRA 486.
9355 Phil. 721; 294 SCRA 289 (1998).
429 Phil. 225. 233; 379 SCRA 490, 499 (2002).
10
40 Phil. 921 (1920).
11
182 SUPREME COURT REPORTS ANNOTATED
Quimpo, Sr. vs. Abad Vda. de Beltran
been the motive thereof, or the purchase price which appears thereon as paid but which in
fact has never been paid by the purchaser to the vendor.
Likewise, both the trial court and the CA found that Eustaquia was 91 years old, weak
and senile, at the time the deeds of sale were executed. In other words, she was already
mentally incapacitated by then, and could no longer be expected to give her consent to the
sale. The RTC and CA cannot, therefore, be faulted for not giving credence to the deeds of
sale in favor of Joaquin.
Petitioners also presented Tax Declaration Nos. 3650, 3708, and 3659 to substantiate
12 13 14
Joaquin’s claim of absolute dominion over parcels III and IV. But we note that these tax
declarations are all in the name of Eustaquia Perfecto-Abad. These documents, therefore,
do not support their claim of absolute dominion since 1946, but enervate it instead.
Besides, the fact that the disputed property may have been declared for taxation purposes
in the name of Joaquin Quimpo does not necessarily prove ownership for it is well settled
that a tax declaration or tax receipts are not conclusive evidence of ownership. The CA, 15
therefore, correctly found this proof inadequate to establish Joaquin’s claim of absolute
dominion.
For forty-three (43) years, Consuelo and Ireneo occupied their portions of the San Jose
property and significantly, Joaquin never disturbed their possession. They also installed
tenants in parcel IV, and Joaquin did not prevent them from doing so, nor did he assert
his ownership over the same. These unerringly point to the fact that there was indeed an
oral partition of parcels III and IV.
 In Maglucot-Aw v. Maglucot, we held, viz.:
16 Similarly, we affirm the CA ruling that respondents are coowners of the subject four
(4) parcels of land, having inherited the same from a common ancestor—Eustaquia
_______________ Perfecto-Abad. Petitioners’ assertion that respondents failed to prove their relationship to
the late Eustaquia deserves scant consideration.
Rollo, p. 208.
During the pre-trial, Joaquin Quimpo admitted that:
12

Id., at p. 210.
13

Id., at p. 212.
14
“Eustaquia Perfecto Abad and Diego Abad had two (2) children by the names of Leon Abad and
Rivera v. Court of Appeals, 314 Phil. 57; 244 SCRA 218 (1995).
15
Joaquin Abad; that Leon Abad has three (3) children namely: Anastacia, Wilfredo and Consuelo, all
385 Phil. 720, 736-737; 329 SCRA 78, 95-96 (2000).
16 surnamed Abad; that Joaquin Abad has only one (1) child, a daughter by the name of Amparo; that
183 Wilfredo has four (4) children, namely, Danilo, Helen, Marites and Anita; Amparo has one child, son
VOL. 545, FEBRUARY 13, 2008 183 Joaquin Quimpo, x x x” 18

Consuelo was the grandchild of Eustaquia, while respondents Danilo, Helen, Marites,
Quimpo, Sr. vs. Abad Vda. de Beltran
Anita and also Joaquin Quimpo were Eustaquia’s great grandchildren. As such,
“[P]artition may be inferred from circumstances sufficiently strong to support the presumption.
respondents can rightfully ask for the confirmation of the oral partition over parcels III
Thus, after a long possession in severalty, a deed of partition may be presumed. It has been held that
recitals in deeds, possession and occupation of land, improvements made thereon for a long series of and IV, and the partition of parcels I and II. Jurisprudence is replete with rulings that any
years, and acquiescence for 60 years, furnish sufficient evidence that there was an actual partition co-owner may demand at any time the partition of the common property
of land either by deed or by proceedings in the probate court, which had been lost and were not
recorded.” _______________
Furthermore, in Hernandez v. Andal, we explained that:
17

“On general principle, independent and in spite of the statute of frauds, courts of equity have Amended Pre-trial Order, Rollo, p. 89.
18

185
enforced oral partition when it has been completely or partly performed.
Regardless of whether a parol partition or agreement to partition is valid and enforceable at law, equity will in VOL. 545, FEBRUARY 13, 2008 185
proper cases, where the parol partition has actually been consummated by the taking of possession in severalty
and the exercise of ownership by the parties of the respective portions set off to each, recognize and enforce such
Quimpo, Sr. vs. Abad Vda. de Beltran
parol partition and the rights of the parties thereunder. Thus, it has been held or stated in a number of cases unless a co-owner has repudiated the co-ownership. This action for partition does not
involving an oral partition under which the parties went into possession, exercised acts of ownership, or otherwise prescribe and is not subject to laches. 19

partly performed the partition agreement, that equity will confirm such partition and in a proper case decree title
in accordance with the possession in severalty.
In numerous cases it has been held or stated that parol partitions may be sustained on the ground
of estoppel of the parties to assert the rights of a tenant in common as to parts of land divided by parol partition
as to which possession in severalty was taken and acts of individual ownership were exercised. And a court of
Finally, petitioners challenge the attorney’s fees in favor of respondents.
The grant of attorney’s fees depends on the circumstances of each case and lies within
the discretion of the court. It may be awarded when a party is compelled to litigate or to
incur expenses to protect its interest by reason of an unjustified act by the other, as in this
20

equity will recognize the agreement and decree it to be valid and effectual for the purpose of concluding the right case.
of the parties as between each other to hold their respective parts in severalty.
A parol partition may also be sustained on the ground that the parties thereto have acquiesced in and ratified In fine, we find no reversible error in the assailed rulings of the Court of Appeals.
the partition by taking possession in severalty, exercising acts of WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of
Appeals in CA-G.R. CV No. 56187, are AFFIRMED.
_______________ SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinez, Corona and Reyes, JJ., concur.
**

78 Phil. 196, 203 (1947).

17
Petition denied, judgment and resolution affirmed.
184
184 SUPREME COURT REPORTS ANNOTATED
Quimpo, Sr. vs. Abad Vda. de Beltran
ownership with respect thereto, or otherwise recognizing the existence of the partition.
A number of cases have specifically applied the doctrine of part performance, or have stated that a part
performance is necessary, to take a parol partition out of the operation of the statute of frauds. It has been held
that where there was a partition in fact between tenants in common, and a part performance, a court of equity
would have regard to and enforce such partition agreed to by the parties.
The CA, therefore, committed no reversible error in sustaining the oral partition over
parcels III and IV and in invalidating the deeds of sale between Eustaquia and Joaquin.

G.R. No. 132518. March 28, 2000. *
GAVINA MAGLUCOT-AW, CATALINA ORCULLO, RICHARD ESTANO, NIDA
MAGLUCOT, MELANIA MAGLUCOTCATUBIG, EMILIANO CATUBIG, LADISLAO
SALMA, petitioners, vs. LEOPOLDO MAGLUCOT, SEVERO MAGLUCOT, WILFREDA
MAGLUCOT-ALEJO and CONSTANCIO ALEJO, respondents.
Courts; Jurisdiction; Appeals; The jurisdiction of this Court in cases brought before it from the
Court of Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of law.—This Court
recognizes that “the jurisdiction of this Court in cases brought before it from the Court of Appeals
via Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings of fact of the latter
are conclusive, except in the following instances: (1) when the findings are grounded entirely on
speculation, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd,
or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings
the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions
of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court;
(8) when the findings are conclusions without citation of specific evidence on which they are based;
(9) when the facts set forth in the petition as
_______________
*FIRST DIVISION.
79
VOL. 329, MARCH 28, 2000 79
Maglucot-Aw vs. Maglucot
well as in the petitioner’s main and reply briefs are not disputed by the respondent; and (10)
when the findings of fact are premised on the supposed absence of evidence and contradicted by the
evidence on record.” This case falls under exceptions (7), (8) and (10) in that the findings of facts of
the CA are in conflict with that of the RTC, are mere conclusions without citation of specific evidence
on which they are based and are premised on absence of evidence but are contradicted by the evidence
on record. For these reasons, we shall consider the evidence on record to determine whether indeed
there was partition.
Courts; Civil Law; Property; Partition; The first phase of a partition and lor accounting suit is
taken up with the determination of whether or not a co-ownership in fact exists, (i.e., not otherwise
legally proscribed) and may be made by voluntary agreement of all the parties interested in the
property.—The first phase of a partition and/or accounting suit is taken up with the determination
of whether or not a co-ownership in fact exists, (i.e., not otherwise legally proscribed) and may be
made by voluntary agreement of all the parties interested in the property. This phase may end with
a declaration that plaintiff is not entitled to have a partition either because a coownership does not
exist, or partition is legally prohibited. It may end, upon the other hand, with an adjudgment that a
co-ownership does in truth exist, partition is proper in the premises and an accounting of rents and
profits received by the defendant from the real estate in question is in order. In the latter case, the
parties may, if they are able to agree, make partition among themselves by proper instruments of
conveyance, and the court shall confirm the partition so agreed upon. In either case—i.e., either the
action is dismissed or partition and/or accounting is decreed—the order is a final one, and may be
appealed by any party aggrieved thereby.
Same; Same; Same; Same; The second phase commences when it appears that “the parties are
unable to agree upon the partition“ directed by the court. In that event, partition shall be done for the
parties by the court with the assistance of not more than three (3) commissioners.—The second phase
commences when it appears that “the parties are unable to agree upon the partition“ directed by the
court. In that event, partition shall be done for the parties by the court with the assistance of not
more than three (3) commissioners. This second stage may well also deal with the rendition of the
accounting itself and its approval by the court after the parties have
80
80 SUPREME COURT REPORTS ANNOTATED
Maglucot-Aw vs. Maglucot
been accorded opportunity to be heard thereon, and an award for the recovery by the party or
parties thereto entitled of their just share in the rents and profits of the real estate in question. Such
an order is, to be sure, final and appealable.
Same; Same; Same; Same; The present rule on the question of finality and appealability of a
decision or order decreeing partition is that it is final and appealable.—The present rule on the
question of finality and appealability of a decision or order decreeing partition is that it is final and
appealable. The order of partition is a final determination of the co-ownership over Lot No. 1639 by
the parties and the propriety of the partition thereof. Hence, if the present rule were applied, the
order not having been appealed or questioned by any of the parties to the case, it has become final
and executory and cannot now be disturbed.
Same; Same; Same; Same; The true test to ascertain whether or not an order or a judgment is
interlocutory or final is: Does it leave something to be done in the trial court with respect to the merits
of the case? If it does, it is interlocutory; if it does not, it is final.—The true test to ascertain whether
or not an order or a judgment is interlocutory or final is: Does it leave something to be done in the
trial court with respect to the merits of the case? If it does, it is interlocutory; if it does not, it is final.
The key test to what is interlocutory is when there is something more to be done on the merits of the
case. An order for partition is final and not interlocutory and, hence, appealable because it decides
the rights of the parties upon the issue submitted.
Same; Same; Same; Same; Under the present rule, the proceedings of the commissioners without
being confirmed by the court are not binding upon the parties.—Under the present rule, the
proceedings of the commissioners without being confirmed by the court are not binding upon the
parties. However, this rule does not apply in case where the parties themselves actualized the
supposedly unconfirmed sketch/subdivision plan. The purpose of court approval is to give effect to
the sketch/subdivision plan. In this case, the parties themselves or through their predecessors-in-
interest implemented the sketch plan made pursuant to a court order for partition by actually
occupying specific portions of Lot No. 1639 in 1952 and continue to do so until the present until this
case was filed, clearly,
81
VOL. 329, MARCH 28, 2000 81
Maglucot-Aw vs. Maglucot
the purpose of the court approval has been met. This statement is not to be taken to mean that
confirmation of the commissioners may be dispensed with but only that the parties herein are
estopped from raising this question by their own acts of ratification of the supposedly non-binding
sketch/subdivision plan.
Same; Same; Same; Same; Estoppel; Parties to a partition proceeding, who elected to take under
partition, and who took possession of the portion allotted to them, are estopped to question title to
portion allotted to another party.—Parties to a partition proceeding, who elected to take under
partition, and who took possession of the portion allotted to them, are estopped to question title to
portion allotted to another party. A person cannot claim both under and against the same
instrument. In other words, they accepted the lands awarded them by its provisions, and they cannot
accept the decree in part, and repudiate it in part. They must accept all or none. Parties who had
received the property assigned to them are precluded from subsequently attacking its validity or any
part of it. Here, respondents, by themselves and/or through their predecessors-in-interest, already
occupied of the lots in accordance with the sketch plan. This occupation continued until this action
was filed. They cannot now be heard to question the possession and ownership of the other coowners
who took exclusive possession of Lot 1639-D also in accordance with the sketch plan.
Same; Same; Same; Same; Same; In technical estoppel, the party to be estopped must knowingly
have acted so as to mislead his adversary, and the adversary must have placed reliance on the action
and acted as he would otherwise not have done.—In technical estoppel, the party to be estopped must
knowingly have acted so as to mislead his adversary, and the adversary must have placed reliance
on the action and acted as he would otherwise not have done. Some authorities, however, hold that
what is tantamount to estoppel may arise without this reliance on the part of the adversary, and this
is called, ratification or election by acceptance of benefits, which arises when a party, knowing that
he is not bound by a defective proceeding, and is free to repudiate it if he will, upon knowledge, and
while under no disability, chooses to adopt such defective proceeding as his own.
82
82 SUPREME COURT REPORTS ANNOTATED
Maglucot-Aw vs. Maglucot
Same; Same; Same; Same; Words and Phrases; Ratification;Ratification means that one under
no disability voluntarily adopts and gives sanction to some unauthorized act of defective proceeding,
which without his sanction would not be binding on him.—Ratification means that one under no
disability voluntarily adopts and gives sanction to some unauthorized act or defective proceeding,
which without his sanction would not be binding on him. It is this voluntary choice, knowingly made,
which amounts to a ratification of what was theretofore unauthorized, and becomes the authorized
act of the party so making the ratification.
Same; Same; Same; Same; One who possesses as a mere holder acknowledges in another a
superior right which he believes to be ownership, whether his belief be right or wrong.—The payment
of rentals by respondents reveal that they are mere lessees. As such, the possession of respondents
over Lot No. 1639 D is that of a holder and not in the concept of an owner. One who possesses as a
mere holder acknowledges in another a superior right which he believes to be ownership, whether
his belief be right or wrong. Since the possession of respondents were found to be that of lessees of
petitioners, it goes without saying that the latter were in possession of Lot No. 1639-D in the concept
of an owner from 1952 up to the time the present action was commenced.
Same; Same; Same; Same; Registration; The purpose of registration is to notify and protect the
interests of strangers to a given transaction, who may be ignorant thereof, but the non-registration of
the deed evidencing such transaction does not relieve the parties thereto of their obligations
thereunder.—We are not persuaded. The purpose of registration is to notify and protect the interests
of strangers to a given transaction, who may be ignorant thereof, but the non-registration of the deed
evidencing such transaction does not relieve the parties thereto of their obligations thereunder. As
originally conceived, registration is merely a species of notice. The act of registering a document is
never necessary in order to give it legal effect as between the parties. Requirements for the recording
of the instruments are designed to prevent frauds and to permit and require the public to act with
the presumption that recorded instruments exist and are genuine.
Same; Same; Same; Same; In cases involving oral partition under which the parties went into
possession, exercised acts of owner-
83
VOL. 329, MARCH 28, 2000 83
Maglucot-Aw vs. Maglucot
ship, or otherwise partly performed the partition agreement, equity will confirm such partition
and in a proper case decree title in accordance with the possession in severalty.—On general principle,
independent and in spite of the statute of frauds, courts of equity have enforced oral partition when
it has been completely or partly performed. Regardless of whether a parol partition or agreement to
partition is valid and enforceable at law, equity will in proper cases, where the parol partition has
actually been consummated by the taking of possession in severalty and the exercise of ownership
by the parties of the respective portions set off to each, recognize and enforce such parol partition
and the rights of the parties thereunder. Thus, it has been held or stated in a number of cases
involving an oral partition under which the parties went into possession, exercised acts of ownership,
or otherwise partly performed the partition agreement, that equity will confirm such partition and
in a proper case decree title in accordance with the possession in severalty.
Same; Lawyers; Code of Professional Conduct; A lawyer shall abstain from scandalous,
offensive, or menacing language or behavior before the courts.—Any court when it renders a decision
does so as an arm of the justice system and as an institution apart from the persons that comprise
it. Decisions are rendered by the courts and not the persons or personnel that may participate therein
by virtue of their office. It is highly improper and unethical for counsel for petitioners to berate the
researcher in his appeal. Counsel for petitioner should be reminded of the elementary rules of the
legal profession regarding respect for the courts by the use of proper language in its pleadings and
admonished for his improper references to the researcher of the CA in his petition. A lawyer shall
abstain from scandalous, offensive, or menacing language or behavior before the courts.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Leo B. Diocos for petitioners.
Nilo L. Ruperto for respondents.
84
84 SUPREME COURT REPORTS ANNOTATED
Maglucot-Aw vs. Maglucot
KAPUNAN, J.:
This petition for review on certiorari assails the Decision, dated 11 November 1997, of the
Court of Appeals in CA-G.R CV No. 48816 which reversed and set aside the Decision, dated
13 December 1994, of the Regional Trial Court, Branch 30 of Dumaguete City, Negros
Oriental in an action for recovery of possession and damages.
The core issue in this case is whether a partition of Lot No. 1639 had been effected in
1952. Petitioners contend that there was already a partition of said lot; hence, they are
entitled to exclusive possession and ownership of Lot No. 1639-D, which originally formed
part of Lot No. 1639 until its partition. Private respondents, upon the other hand, claim
that there was no partition; hence, they are co-owners of Lot No. 1639-D. Notably, this case
presents a unique situation where there is an order for partition but there is no showing
that the sketch/subdivision plan was submitted to the then Court of First Instance for its
approval or that a decree or order was registered in the Register of Deeds.
The antecedent facts of the case are as follows:
 Petitioners filed with the RTC a complaint for recovery of possession and damages 4Rollo, p. 24.
Exhibits “K” and “L,” Records, pp. 90-91.
alleging, inter alia, that they are the owners of Lot No. 1639-D. Said lot was originally part
5

6RTC Decision, 13 December 1994, p. 10; Rollo, p. 42.

of Lot No. 1639 which was covered by Original Certificate Title No. 6775 issued in the 86
names of Hermogenes Olis, Bartolome Maglucot, Pascual Olis, Roberto Maglucot, Anselmo 86 SUPREME COURT REPORTS ANNOTATED
Lara and Tomas Maglucot on 16 August 1927. On 19 April 1952, Tomas Maglucot, one of
1

the registered owners and respondents’ predecessor-in-interest, filed a petition to Maglucot-Aw vs. Maglucot
subdivide Lot No. 1639. Consequently, on 13 May 1952, then CFI of Negros Oriental issued
2
there was one. Said court, likewise, ruled that the tax declarations over the houses of
7 8

an order directing the parties to subdivide said lot into six portions as follows:
3
respondents, expressly stating that the same are constructed on the lots of Roberto
Maglucot, constitute a conclusive admission by them of the ownership of the subject lot by
________________ the latter. 9

The dispositive portion of the lower court’s decision reads as follows:

1Exhibit “J,” Records, p. 89. WHEREFORE, on the basis of the foregoing discussion, judgment is hereby rendered in favor, of the
2Exhibits “A-4,” “A-4-a” to “A-4-c” and “B,” Records, pp. 48-50. plaintiffs against the defendants ordering the latter:
3Exhibit “A,” id., pp. 45-47.
85
1. 1.To demolish their houses inside lot 1639-D, vacate the premises thereof and deliver the
VOL. 329, MARCH 28, 2000 85 possession of the same to Plaintiffs;
Maglucot-Aw vs. Maglucot 2. 2.To jointly and solidarily pay plaintiffs the sum of P15,000.00 for attorney’s fees;
a) Hermogenes Olis — lot 1639-A 3. 3.To each pay plaintiffs the sum of P100.00 every year from 1993 for actual damages
representing the amount of unpaid rentals up to the time they actually vacate the premises
b) Pascual Olis — lot 1639-B in question;
c) Bartolome Maglucot — lot 1639-C 4. 4.To pay the costs.10

d) Roberto (Alberto) Maglucot — lot l639-D

e) Anselmo Lara — lot l639-E On appeal, the CA reversed the decision of the RTC. The appellate court ruled that the
sketch plan and tax declarations relied upon by petitioners are not conclusive evidence of
f) Tomas Maglucot — lot 1639-F.
partition. The CA likewise found that the prescribed procedure under Rule 69 of the Rules
4

11

Sometime in 1963, Guillermo Maglucot rented a portion of Lot No. 1639-D (subject lot).
of Court was not followed. It thus declared that there was no partition of Lot No. 1639.
Subsequently, Leopoldo and Severo, both surnamed Maglucot, rented portions of subject
Petitioners filed this petition for review on certiorari alleging that the CA committed the
lot in 1964 and 1969, respectively, and each paying rentals therefor. Said respondents built
following reversible errors:
houses on their corresponding leased lots. They paid the rental amount of P100.00 per
annum to Mrs: Ruperta Salma, who represented the heirs of Roberto Maglucot, petitioners’ I
predecessor-in-interest. In December 1992, however, said respondents stopped paying
rentals claiming ownership over the subject lot. Petitioners thus filed the complaint a quo. IN VIOLATING THE LAW ON ACQUISITIVE PRESCRIPTION PLAINTIFFS HAVING
After trial, the lower court rendered judgment in favor of petitioners. The RTC found POSSESSED LOT 1639-D SINCE 1946;
the existence of tax declarations in the names of Hermogenes Olis and Pascual Olis
(purported owners of Lot Nos. 1639-A and 1639-B, respectively) as indubitable proof that
5 ________________
there was a subdivision of Lot No. 1639. It likewise found that Tomas Maglucot,
respondents’ predecessor-in-interest, took active part in the partition as it was he, in fact, 7Ibid.
Exhibits “G” to “I,” Records, pp. 87-88.
who commenced the action for partition. The court a quo cited Article 1431 of the Civil
8
6
9See note 5 at 9, Rollo, p. 41.
Code which states that “[t]hrough estoppel an admission or representation is rendered Id., pp. 12-13; Rollo, pp. 44-45.
10

conclusive upon the person making it, and cannot be denied or disproved as against the CA Decision, pp. 6-7, Rollo, pp. 28-29.
11

person relying thereon.” Applying said provision of law, it held that while there was no 87
court order showing that Lot No. 1639 was partitioned, its absence could not be used by VOL. 329, MARCH 28, 2000 87
Tomas Maglucot, or respondents as his successors-in-interest, to deny the existence of an Maglucot-Aw vs. Maglucot
approved partition against the other co-owners who claim that
II
________________
IN VIOLATING THE LAW ON ESTOPPEL; THE FACT OF PAYMENT OF RENTALS AND OFFER
TO BUY BY THE DEFENDANTS IS ADMISSION THAT THE AREA IN LOT 1639-D, HAD LONG
BEEN ADJUDICATED TO PLAINTIFFS;
III
IN DECLARING THAT THERE WAS NO PRIOR PARTITION, CONTRARY TO THE
FINDINGS OF THE TRIAL COURT, AND AGAINST THE EVIDENCE ON RECORD, OF WHICH
IF PROPERLY CONSIDERED WOULD CHANGE THE OUTCOME OF THE CASE;
IV
IN DECLARING THAT THERE IS NO LAW OR JURISPRUDENCE APPLICABLE UNDER
THE PREMISES; THIS WOULD ONLY SHOW THAT THE RECORD OF THE CASE WAS NOT
PROPERLY SCRUTINIZED, AND THE LAW WAS NOT PROPERLY STUDIED, ESPECIALLY IN
THE CASE AT BENCH THAT THE ORAL AND MUTUAL PARTITION HAPPENED DURING THE
REGIME OF THE OLD RULES OF PROCEDURE. 12
Petitioners maintain that Lot No. 1639 was mutually partitioned and physically
subdivided among the co-owners and that majority of them participated in the actual
execution of the subdivision. Further, the co-owners accepted their designated shares in
1946 as averred by Tomas Maglucot in his petition for partition. Petitioners opine that in
13
1952, Tomas Maglucot himself initiated a court proceeding for a formal subdivision of Lot
No. 1639. In said petition, he averred that only Hermogenes Olis and the heirs of Pascual
Olis were not agreeable to the partition. Petitioners further contend that respondents
14
admitted in their tax declarations covering their respective houses that they are
“constructed on the land of
________________
Petition, p. 4; Rollo, p. 8.
12
Memorandum for Petitioners, p. 6; Rollo, p. 61.
13
Ibid.
14
88
88 SUPREME COURT REPORTS ANNOTATED
Maglucot-Aw vs. Maglucot
Roberto Maglucot.” Simply put, petitioners vigorously assert that respondents are
15
estopped from claiming to be co-owners of the subject lot in view of the mutual agreement
in 1946, judicial confirmation in 1952, and respondents’ acquiescence because they
themselves exclusively exercised ownership over Lot No. 1639-A beginning 1952 up to the
present. 16
For their part, respondents posit three points in support of their position. First, they
emphasize that petitioners failed to show that the interested parties were apprised or
notified of the tentative subdivision contained in the sketch and that the CFI subsequently
confirmed the same. Second, they point to the fact that petitioners were unable to show
17
any court approval of any partition. Third, they maintain that Lot No. 1639 remain
18
undivided since to date, OCT No. 6275 is still an existing and perfectly valid title,
containing no annotation of any encumbrance or partition whatsoever. 19
After a careful consideration of the pleadings filed by the parties and the evidence on
record, we find that the petition is meritorious. As stated earlier, the core issue in this case
is whether there was a valid partition in 1952.
Preliminarily, this Court recognizes that “the jurisdiction of this Court in cases brought
before it from the Court of Appeals via Rule 45 of the Rules of Court is limited to reviewing
errors of law. Findings of fact of the latter are conclusive, except in the following instances:
(1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2)
when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is
grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts;
(5) when the findings of fact are conflicting; (6) when in making its findings the Court of
Appeals went beyond the issues of the case, or its findings are contrary to the admissions
of both
________________
Id., p. 10; Rollo, p. 65.
15
Id., p. 12; Rollo, p. 67.
16
Memorandum for Respondents, p. 2; Rollo, p. 79.
17
Ibid.
18
Id., pp. 3, 6; Rollo, pp. 81, 83.
19
89
VOL. 329, MARCH 28, 2000 89
Maglucot-Aw vs. Maglucot
the appellant and the appellee; (7) when the findings are contrary to those of the trial
court; (8) when the findings are conclusions without citation of specific evidence on which
they are based; (9) when the facts set forth in the petition as well as in the petitioner’s
main and reply briefs are not disputed by the respondent; and (10) when the findings of
fact are premised on the supposed absence of evidence and contradicted by the evidence on
record.” This case falls under exceptions (7), (8) and (10) in that the findings of facts of the
20
CA are in conflict with that of the RTC, are mere conclusions without citation of specific
evidence on which they are based and are premised on absence of evidence but are
contradicted by the evidence on record. For these reasons, we shall consider the evidence
on record to determine whether indeed there was partition.
In this jurisdiction, an action for partition is comprised of two phases: first, an order
for partition which determines whether a co-ownership in fact exists, and whether
partition is proper; and, second, a decision confirming the sketch or subdivision submitted
by the parties or the commissioners appointed by the court, as the case may be. The first
21
phase of a partition and/or accounting suit is taken up with the determination of whether
or not a co-ownership in fact exists, (i.e., not otherwise legally proscribed) and may be made
by voluntary agreement of all the parties interested in the property. This phase may end
with a declaration that plaintiff is not entitled to have a partition either because a co-
ownership does not exist, or partition is legally prohibited. It may end, upon the other
hand, with an adjudgment that a co-ownership does in truth exist, partition is proper in
the premises and an accounting of rents and profits received by the defendant from the However, this Court notes that the order of partition was issued when the ruling
real estate in question is in order. In the latter case, the in Fuentebella vs. Carrascoso, which held that the order of partition is interlocutory, was
26

controlling. In addition, the reports of the commissioners not having been confirmed by the
_______________ trial court are not binding. In this case, both the order of partition and the unconfirmed
27

sketch plan are, thus, interlocutory. Nevertheless, where parties do not object to the
Sta. Maria vs. Court of Appeals, 285 SCRA 351 (1998); Medina vs. Asistio, 191 SCRA 218, 223-224 (1990).
interlocutory decree, but show by their conduct that they have assented thereto, they
20

See Sections 2 and 6, Rule 69, Rules of Court. See also HERRERA, COMMENTS ON THE 1997 RULES OF
21

CIVIL PROCEDURE AS AMENDED, 768-770 (1997). cannot thereafter question the decree, especially, where, by reason of their conduct,
28

90 considerable expense has been incurred in the execution of the commission. Respondents 29

90 SUPREME COURT REPORTS ANNOTATED in this case have occupied their respective lots in accordance with the sketch/subdivision
plan. They cannot after acquiescing to the order for more than forty (40) years be allowed
Maglucot-Aw vs. Maglucot
to question the binding effect thereof.
parties may, if they are able to agree, make partition among themselves by proper
This case is to be distinguished from the order in the action for partition in Arcenas vs.
instruments of conveyance, and the court shall confirm the partition so agreed upon. In
Cinco. In that case, the order was clearly interlocutory since it required the parties “to
30

either case—i.e., either the action is dismissed or partition and/or accounting is decreed—
submit the corresponding deed of partition to the Court for its approval.” Here, the order
the order is a final one, and may be appealed by any party aggrieved thereby. The second
appointed two commissioners and directed them merely to approve the sketch plan already
22

phase commences when it appears that “the parties are unable to agree upon the partition”
existing and tentatively followed by the parties.
directed by the court. In that event, partition shall be done for the parties by the court with
Under the present rule, the proceedings of the commissioners without being confirmed
the assistance of not more than three (3) commissioners. This second stage may well also
by the court are not binding upon
deal with the rendition of the accounting itself and its approval by the court after the
parties have been accorded opportunity to be heard thereon, and an award for the recovery _______________
by the party or parties thereto entitled of their just share in the rents and profits of the
real estate in question. Such an order is, to be sure, final and appealable. 23
Miranda vs. Court of Appeals, supra.
24

The present rule on the question of finality and appealability of a decision or order Id., p. 9; See also Valdez vs. Bagaso, supra; Fabrica, et al. vs. Court of Appeals, supra.
25

decreeing partition is that it is final and appealable. The order of partition is a final
23a
G.R. No. 48102, May 27, 1942.
26

RULES OF COURT, Rule 69, Sec. 2, par. 1 and Sec. 6.

27

determination of the co-ownership over Lot No. 1639 by the parties and the propriety of Godwin v. Banks, 43 A. 863, 89 Md. 679.
28

the partition thereof. Hence, if the present rule were applied, the order not having been Corbett vs. Fleming, 119 N.Y.S. 543, 134 App. Div. 544.
29

appealed or questioned by any of the parties to the case, it has become final and executory 74 SCRA 118 (1976).
30

and cannot now be disturbed. 92

The true test to ascertain whether or not an order or a judgment is interlocutory or 92 SUPREME COURT REPORTS ANNOTATED
final is: Does it leave something to be done in the trial court with respect to the merits of Maglucot-Aw vs. Maglucot
the case? If it does, it is interlocutory; if it does not, it is final. The key test to what is the parties. However, this rule does not apply in case where the parties themselves
31

interlocutory is when there is something actualized the supposedly unconfirmed sketch/subdivision plan. The purpose of court
approval is to give effect to the sketch/subdivision plan. In this case, the parties themselves
_______________
or through their predecessors-in-interest implemented the sketch plan made pursuant to
a court order for partition by actually occupying specific portions of Lot No. 1639 in 1952
Municipality of Biñan vs. Garcia, 180 SCRA 576 (1989).
22

Ibid.
23
and continue to do so until the present until this case was filed, clearly, the purpose of the
See Miranda vs. Court of Appeals, 71 SCRA 295 (1976) reiterated in Valdez vs. Bagaso, 82 SCRA
23a court approval has been met. This statement is not to be taken to mean that confirmation
22 (1978); Lagunzad vs. Gonzales, 92 SCRA 476 (1979); Garbo vs. Court of Appeals, 129 SCRA 616 (1984); Fabrica of the commissioners may be dispensed with but only that the parties herein are estopped
vs. Court of Appeals, 146 SCRA 250 (1986).
from raising this question by their own acts of ratification of the supposedly non-binding
91
sketch/subdivision plan.
VOL. 329, MARCH 28, 2000 91 The records of the case show that sometime in 1946 there was a prior oral agreement
Maglucot-Aw vs. Maglucot to tentatively partition Lot No. 1639. By virtue of this agreement, the original co-owners
32

more to be done on the merits of the case. An order for partition is final and not
24
occupied specific portions of Lot No. 1639. It was only in 1952 when the petition to
33

interlocutory and, hence, appealable because it decides the rights of the parties upon the subdivide Lot No. 1639 was filed because two of the co-owners, namely Hermogenes Olis
issue submitted. 25
and heirs of Pascual Olis, refused to have said lot subdivided and have separate certificates
of title. Significantly, after the 1952 proceedings, the parties in this case by themselves
and/or through their predecessors-in-interest occupied specific portions of Lot No. 1639 in
accordance with the sketch plan. Such
_____________
31Notably, the provision applied by the Cadastral Court in its Order of Partition in 1952 was Section 22 of
the Cadastral Act. (The Cadastral Court was actually referring to Section 19 of the law.) A perusal of this
provision would show that the appointed commissioners are empowered to make partition such part and
proportion of the lands as the court shall order. Significantly, in contrast to the procedure under the Rules of
Court, there is no requirement of confirmation of the report of the commissioners by the Cadastral Court. It is
not, however, necessary to make any declaration on this matter since whatever rule may have been applicable,
the defendants are now estopped from raising this question.
32Exhibit B for petitioners, Rollo, p. 51.
33Exhibit A-4; Rollo, p. 49.
93
VOL. 329, MARCH 28, 2000 93
Maglucot-Aw vs. Maglucot
possession remained so until this case arose, or about forty (40) years later.
From its order in 1952, it can be gleaned that the CFI took notice of the tentative
subdivision plan by oral partition of the parties therein. Further, it appears that said court
was aware that the parties therein actually took possession of the portions in accordance
with the sketch/subdivision plan. With this factual backdrop, said court ordered the
partition and appointed two (2) commissioners to approve the tentative sketch/subdivision
plan. It would not be unreasonable to presume that the parties therein, having occupied
specific portions of Lot No. 1639 in accordance with the sketch/subdivision plan, were
aware that it was that same sketch/subdivision plan which would be considered by the
commissioners for approval. There is no showing that respondents by themselves or
through’ their predecessors-in-interest raised any objections. On the contrary, the records
show that the parties continued their possession of the specific portions of Lot No. 1639
pursuant to the sketch/subdivision plan.
It has been previously held that a co-owner, who, though not a party to a partition
accepts the partition allotted to him, and holds and conveys the same in severalty, will not
be subsequently permitted to avoid partition. It follows that a party to a partition is also
34
barred from avoiding partition when he has received and held a portion of the subdivided
land especially in this case where respondents have enjoyed ownership rights over their
share for a long time.
Parties to a partition proceeding, who elected to take under partition, and who took
possession of the portion allotted to them, are estopped to question title to portion allotted
to another party. A person cannot claim both under and against the same instrument. In
35 36
other words, they accepted the
______________
Hampshire County Trust Co. of North Hampton, Mass., et al. v. Stevenson, et al., 150 N.E. 726 citing
34
Freeman, Cotenancy and Partition, p. 710, Section 535.
Jeffries vs. Hignite, et al., 206 Ky. 50, 266 S.W. 901.
35
Christen, et al. vs. Christen, et al., 184 Ky. 822, 213 S.W. 189.
36
94
94 SUPREME COURT REPORTS ANNOTATED
Maglucot-Aw vs. Maglucot
lands awarded them by its provisions, and they cannot accept the decree in part, and
repudiate it in part. They must accept all or none. Parties who had received the property
37
assigned to them are precluded from subsequently attacking its validity or any part of
it. Here, respondents, by themselves and/or through their predecessors-in-interest,
38
already occupied of the lots in accordance with the sketch plan. This occupation continued
until this action was filed. They cannot now be heard to question the possession and
ownership of the other coowners who took exclusive possession of Lot 1639-D also in
accordance with the sketch plan.
In technical estoppel, the party to be estopped must knowingly have acted so as to
mislead his adversary, and the adversary must have placed reliance on the action and
acted as he would otherwise not have done. Some authorities, however, hold that what is
tantamount to estoppel may arise without this reliance on the part of the adversary, and
this is called, ratification or election by acceptance of benefits, which arises when a party,
knowing that he is not bound by a defective proceeding, and is free to repudiate it if he
will, upon knowledge, and while under no disability, chooses to adopt such defective
proceeding as his own. Ratification means that one under no disability voluntarily adopts
39
and gives sanction to some unauthorized act or defective proceeding, which without his
sanction would not be binding on him. It is this voluntary choice, knowingly made, which
amounts to a ratification of what was theretofore unauthorized, and becomes the
authorized act of the party so making the ratification. 40
The records show that respondents were paying rent for the use of a portion of Lot No.
1639-D. Had they been of the belief that they were co-owners of the entire Lot No. 1639
______________
Clarke, et al. vs. Charles, et al., 55 Neb 202, May 19, 1898.
37
Torres vs. Encarnacion, 89 Phil. 678 (1951).
38
Hampshire County Trust Co. of North Hampton, Mass., et al. v. Stevenson, et al., 150 N.E. 726.
39
Ibid.
40
95
VOL. 329, MARCH 28, 2000 95
Maglucot-Aw vs. Maglucot
they would not have paid rent. Respondents attempted to counter this point by presenting
an uncorroborated testimony of their sole witness to the effect that the amount so paid to
Roberto Maglucot and, subsequently, to Ruperta Salma were for the payment of real
property taxes. We are not persuaded. It is quite improbable that the parties would be
unaware of the difference in their treatment of their transactions for so long a time.
Moreover, no evidence was ever presented to show that a tax declaration for the entire Lot
No. 1639 has ever been made. Replete in the records are tax declarations for specific
portions of Lot 1639. It is inconceivable that respondents would not be aware of this. With
due diligence on their part, they could have easily verified this fact. This they did not do
for a period spanning more than four decades.
The payment of rentals by respondents reveal that they are mere lessees. As such, the
possession of respondents over Lot No. 1639-D is that of a holder and not in the concept of
an owner. One who possesses as a mere holder acknowledges in another a superior right
which he believes to be ownership, whether his belief be right or wrong. Since the41
possession of respondents were found to be that of lessees of petitioners, it goes without
saying that the latter were in possession of Lot No. 1639-D in the concept of an owner from
1952 up to the time the present action was commenced.
Partition may be inferred from circumstances sufficiently strong to support the
presumption. Thus, after a long possession in severalty, a deed of partition may be
42
presumed. It has been held that recitals in deeds, possession and occupation of land,
43
improvements made thereon for a long series of years, and acquiescence for 60 years,
furnish sufficient evidence that there was an actual partition of land either by deed or by
proceedings in the probate court, which had been
______________
A.M. Tolentino, COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE OF THE
41
PHILIPPINES, 245 (Vol. II, 1995).
Hunt vs. Rabitoay, 125 Mich. 137, 84 NW 59.
42
Hepburn & Dundas vs. Auld, 9 US 262, 3 L Ed. 96.
43
96
96 SUPREME COURT REPORTS ANNOTATED
Maglucot-Aw vs. Maglucot
lost and were not recorded. And where a tract of land held in common has been subdivided
44
into lots, and one of the lots has long been known and called by the name of one of the
tenants in common, and there is no evidence of any subsequent claim of a tenancy in
common, it may fairly be inferred that there has been a partition and that such lot was set
off to him whose name it bears. 45
Respondents insist that the absence of any annotation in the certificate of title showing
any partition of Lot No. 1639 and that OCT No. 6725 has not been canceled clearly indicate
that no partition took place. The logic of this argument is that unless partition is shown in
the title of the subject property, there can be no valid partition or that the annotation in
the title is the sole evidence of partition.
Again, we are not persuaded. The purpose of registration is to notify and protect the
interests of strangers to a given transaction, who may be ignorant thereof, but the non-
registration of the deed evidencing such transaction does not relieve the parties thereto of
their obligations thereunder. As originally conceived, registration is merely a species of
46
notice. The act of registering a document is never necessary in order to give it legal effect
as between the parties. Requirements for the recording of the instruments are designed
47
to prevent frauds and to permit and require the public to act with the presumption that
recorded instruments exist and are genuine. 48
It must be noted that there was a prior oral partition in 1946. Although the oral
agreement was merely tentative, the facts subsequent thereto all point to the confirmation
of said oral partition. By virtue of that agreement, the parties took
_______________
Hunt vs. Rabitoay, 125 Mich. 137, 84 NW 59.
44
Jackson ex dem. Williams vs. Miller, (NY) 6 Wend. 228.
45
Casica vs. Villaseca, G.R. No. L-9590, April 30, 1957, 101 Phil. 1205.
46
PENA, REGISTRATION OF LAND TITLES AND DEEDS, 9 (1994 Revised Ed., 1997 Reprint).
47
See 26 C.J. 313.
48
97
VOL. 329, MARCH 28, 2000 97
Maglucot-Aw vs. Maglucot
possession of specific portions of the subject lot. The action for partition was instituted
because some of the co-owners refused to have separate titles issued in lieu of the original
title. In 1952, an order for partition was issued by the cadastral court. There is no evidence
that there has been any change in the possession of the parties. The only significant fact
subsequent to the issuance of the order of partition in 1952 is that respondents rented
portions of Lot No. 1639-D. It would be safe to conclude, therefore, that the oral partition
as well as the order of partition in 1952 were the bases for the finding of actual partition
among the parties. The legal consequences of the order of partition in 1952 having been
discussed separately, we now deal with oral partition in 1946. Given that the oral partition
was initially tentative, the actual possession of specific portions of Lot No. 1639 in
accordance with the oral partition and the continuation of such possession for a very long
period indicate the permanency and ratification of such oral partition. The validity of an
oral partition is already well-settled. In Vda. de Espina vs. Abaya, we declared that an
49
oral partition is valid. In Hernandez vs. Andal, reiterated in Tan vs. Lim this Court has
50 51
ruled, thus:
On general principle, independent and in spite of the statute of frauds, courts of equity have enforced
oral partition when it has been completely or partly performed.
Regardless of whether a parol partition or agreement to partition is valid and enforceable at law,
equity will in proper cases, where the parol partition has actually been consummated by the taking
of possession in severalty and the exercise of ownership by the parties of the respective portions set
off to each, recognize and enforce such parol partition and the rights of the parties thereunder. Thus,
it has been held or stated in a number of cases involving an oral partition under which the parties
went into possession, exercised acts of ownership, or otherwise partly performed the partition
agreement, that equity will confirm such partition and in a proper case decree title in accordance
with the possession in severalty.
______________
196 SCRA 313 (1991).
49
78 Phil. 196, 203 (1947).
50
296 SCRA 455 (1998).
51
98
98 SUPREME COURT REPORTS ANNOTATED
 Maglucot-Aw vs. Maglucot
In numerous cases it has been held or stated that parol partition may be sustained on the ground of
estoppel of the parties to assert the rights of a tenant in common as to parts of land divided by parol
partition as to which possession in severalty was taken and acts of individual ownership were
exercised. And a court of equity will recognize the agreement and decree it to be valid and effectual
for the purpose of concluding the right of the parties as between each other to hold their respective
parts in severalty.
A parol partition may also be sustained on the ground that the parties thereto have acquiesced
in and ratified the partition by taking possession in severalty, exercising acts of ownership with
respect thereto, or otherwise recognizing the existence of the partition.
A number of cases have specifically applied the doctrine of part performance, or have stated that
a part performance is necessary, to take a parol partition out of the operation of the statute of frauds.
It has been held that where there was a partition in fact between tenants in common, and a part
performance, a court of equity would have regard to and enforce such partition agreed to by the
parties.
Two more points have constrained this Court to rule against respondents. First,
respondents Wilfreda MaglucotAlejo and Constancio Alejo offered to buy the share of
Roberto Maglucot. Second, the tax declarations contain statements that the houses of
respondents were built on the land owned by Roberto Maglucot.
On the first point, petitioners presented Aida Maglucot who testified that after
respondents were informed that petitioners were going to use Lot No. 1639-D belonging to
Roberto Maglucot, respondents Wilfreda Maglucot-Alejo and Constancio Alejo went to the
house of said witness and offered to buy the share of Roberto Maglucot. Aida Maglucot 52
further testified that they refused the offer because they also intend to use the lot for a
residential purpose. This testimony of Aida Maglucot is unrebutted by respondents, and
53
the CA did not touch upon this finding of fact. Hence, the offer to buy has been
_____________
T.S.N., p. 5, August 18, 1994.
52
Ibid.
53
99
VOL. 329, MARCH 28, 2000 99
Maglucot-Aw vs. Maglucot
established by the unrebutted evidence of the petitioners. Why would they give such offer
if they claim to be at least a co-owner of the said lot? In effect, respondents impliedly admit
the title of the petitioners and that they are not coowners, much less the sole owners, of
Lot No. 1639-D.
On the second point, the existence of Tax Declaration No. 04-557 in the names of
Constancio Alejo and Godofreda Maglucot, Tax Declaration No. 04-87-13 in the names of
54
Leopoldo Maglucot and Regina Barot, Tax Declaration No. 04-593 in the names of Severo
55
Maglucot and Samni Posida showing that the houses of the above-mentioned persons are
56
constructed on the land of Roberto Maglucot constitute incontrovertible evidence of
57
admission by the same persons of the ownership of the land by Roberto Maglucot. Tax
Declarations are public documents. Unless their veracity is directly attacked, the contents
therein are presumed to be true and accurate. The lone testimony of Severo Maglucot that
58
Roberto Maglucot was only made to appear as owner of the land in their respective
declarations because he was the administrator of Lot No. 1639 is uncorroborated and not
supported by any other evidence.
No injustice is dealt upon respondents because they are entitled to occupy a portion of
Lot No. 1639, particularly Lot No. 1639-A, in their capacity as heirs of Tomas Maglucot,
one of the original co-owners of Lot No. 1639 in accordance with the sketch plan of said lot
showing the partition into six portions. 59
Finally, this Court takes notice of the language utilized by counsel for petitioners in
their petition for review on certiorari. Thrice in the petition, counsel for petitioners made
reference to the researcher of the CA First, he alluded to the lack
_______________
Exhibit “G,” Records, p. 87.
54
Exhibit “H,” Id., p. 88.
55
Exhibit “I,” Id., p. 89.
56
Exhibits “G-l,” “H-l” and “1-1,” Id., pp. 87-88.
57
RULES OF COURT, RULE 131, SEC. 3 (m), (q), (y) and (ff).
58
Exhibits “B” and “B-1,” Rollo, p. 5.
59
100
100 SUPREME COURT REPORTS ANNOTATED
Maglucot-Aw vs. Maglucot
of scrutiny of the records and lack of study of the law “by the researcher. Second, he cited
60
the researcher of the CA as having “sweepingly stated without reference to the
record” that “[w]e have scanned the records on hand and found no evidence of any
61
partition.” Finally, counsel for petitioners assailed the CA decision, stating that “this will
only show that there was no proper study of the case by the researcher.” 62
Any court when it renders a decision does so as an arm of the justice system and as an
institution apart from the persons that comprise it. Decisions are rendered by the courts
and not the persons or personnel that may participate therein by virtue of their office. It
is highly improper and unethical for counsel for petitioners to berate the researcher in his
appeal. Counsel for petitioner should be reminded of the elementary rules of the legal
profession regarding respect for the courts by the use of proper language in its pleadings
and admonished for his improper references to the researcher of the CA in his petition. A
lawyer shall abstain from scandalous, offensive, or menacing language or behavior before
the courts. 63
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals is SET
ASIDE and the decision of the Regional Trial Court is hereby REINSTATED.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Puno, Pardo and YnaresSantiago, JJ., concur.
Petition granted, judgment set aside. That of the trial court reinstated.
 G.R. No. 170080. April 3, 2007. * Petitioner Consolacion Q. Austria assails the Decision of the Court of Appeals in CA-G.R.
1

CONSOLACION Q. AUSTRIA, petitioner, vs. CONSTANCIA Q. LICHAUCO, CV No. 68591 dated June 21, 2005 and its Resolution dated October 7, 2005, which
2

CONSUELO Q. JALANDONI, JOSE ALBERTO L. QUINTOS, RICARDO M. QUINTOS, respectively affirmed the decision of the Regional Trial Court of Makati City, Branch 142,
3

JR., AILEEN M. QUINTOS and TYRONE M. QUINTOS, respondents. dated February 14, 2000 and its order dated August 7, 2000, and denied petitioner’s
4

Procedural Rules and Technicalities; Rules of procedure are intended to be, not tools of delay, motion for reconsideration.
but of prompt and just disposition of every party’s cause.—This case has crept, ever so slowly, up the
ladder of judicial process. While we are not dissuading parties from availing of the judicial remedies _______________
outlined in the Rules of Court, they should be cautioned to be judicious in availing of these remedies.
After all, rules of procedure are intended to be, not tools of delay, but of prompt and just disposition 1Rollo, pp. 31-61.
of every party’s cause. Having fully availed of, even exploited, these remedies, petitioner cannot feign Id., at pp. 63-64.
2

denial of her day in court. She has been given every opportunity to fully ventilate her side. 3Records, Vol. 2I, pp. 448-455.
Id., at pp. 492-494.
Ownership; Co-Ownership; Property; There are two stages in every action for partition. The first
4

phase is the determination of whether a co-ownership in fact exists and a partition is proper, i.e., not
otherwise legally proscribed, and may be made by voluntary agreement of all the parties interested in
the property.—There are two stages in every action for partition. The first phase is the determination
of whether a co-ownership in fact exists and a partition is proper, i.e., not otherwise legally
proscribed, and may be made by voluntary agreement of all the parties interested in the property.
This phase may end either: (a) with a declaration that plaintiff is not entitled to have a partition
either because a co-ownership does not exist, or partition is legally prohibited; or (b) with a
determination that a co-ownership does in truth exist, partition is proper in the premises, and an
accounting of rents and profits received by the defendant from the real estate in question is in order.
In the latter case, the parties may, if they are able to agree, make partition among themselves by
proper instruments of conveyance, and the court shall confirm the partition so agreed upon. The
second phase commences when it appears that the parties are unable to agree
_______________
*SECOND DIVISION.
402
402 SUPREME COURT REPORTS ANNOTATED
Austria vs. Lichauco
upon the partition directed by the court. In that event, partition shall be done for the parties
by the court with the assistance of not more than three (3) commissioners. This second stage may
well also deal with the rendition of the accounting itself and its approval by the court after the parties
have been accorded opportunity to be heard thereon, and an award for the recovery by the party or
parties thereto entitled of their just share in the rents and profits of the real estate in question.
Same; Same; There is no question that a co-ownership exists between petitioner and
respondents—to this extent, the trial court was correct in decreeing partition in line with the Civil
Code provision that no co-owner shall be obliged to remain in the co-ownership.— There is no question
that a co-ownership exists between petitioner and respondents. To this extent, the trial court was
correct in decreeing partition in line with the Civil Code provision that no co-owner shall be obliged
to remain in the co-ownership.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Josefino D.M. Cualing for petitioner.
Fortun, Narvasa and Salazar for respondents.
TINGA, J.:
403
VOL. 520, APRIL 3, 2007 403
Austria vs. Lichauco
The facts as narrated by the Court of Appeals are as follows:
“Plaintiffs-appellees Constancia Lichauco, Consuelo Jalandoni, defendants Benedicto Quintos and
Antonio Quintos, and defendantappellant Consolacion Austria are siblings of full blood. Jose Alberto,
Ricardo, Jr., Aileen and Tyrone, all surnamed Quintos, are the nephews and niece of the defendant-
appellant.
The above-named persons are co-owners of two (2) parcels of land with an aggregate area of six
hundred sixty one (661) square meters located in Palanan, Makati City. The aforesaid parcels of land
have permanent improvements thereon which straddle both lots, namely, a residential bungalow
and two (2) units, two-storey apartments, the titles of which are registered jointly in the names of
the parties as co-owners thereof.
The plaintiffs-appellees allege that sometime in the early part of 1996, they informed defendant-
appellant of their desire to have the subject properties partitioned based on the percentage of each
coowner’s respective share.
A realtor was even engaged to prepare the schemes by which the subject properties could be
physically partitioned among the coowners. However, the defendant-appellant Austria refused to
accede to any of the schemes presented by the realtor for the physical apportionment of the subject
properties between the co-owners thereof.
Because of the refusal of the defendant-appellant Austria to partition the property, and the
inability of the co-owners to mutually agree on an arrangement acceptable to all of them, on July 1,
1997, the plaintiffs-appellees filed a complaint with the Regional Trial Court of Makati City, Branch
142, which was docketed as Civil Case No. 97-1485, against the defendant-appellant Austria and two
other defendants namely Benedicto Quintos and Antonio Quintos (as unwilling co-plaintiffs) for
partition of the subject property.
Within the period for filing an answer, the defendant-appellant Austria filed an Omnibus Motion
to Dismiss.
In its order dated November 10, 1997, the lower court denied the omnibus motion to dismiss of
the defendant-appellant Austria, and directed the defendants to file their answer within the
remaining period provided by the Rules.
404
404 SUPREME COURT REPORTS ANNOTATED
Austria vs. Lichauco
Within the prescriptive period, the defendant-appellant Austria filed a Motion for Reconsideration of
the November 10, 1997 order, which the lower court denied in an order dated February 2, 1998.
 Not satisfied, the defendant-appellant Austria filed before the Court of Appeals a Petition for
certiorari and prohibition under Rule 65 of the Revised Rules of Court which was docketed as CA-
GR SP No. 46907, seeking to annul the orders of November 10, 1997 and February 2, 1998.
In a Resolution dated July 9, 1998, the Court of Appeals required the plaintiffs-appellees to
comment, and temporarily restrained the respondent judge, his agents, representatives, and other
persons acting in his behalf from proceeding with Civil Case No. 97-1485 in order that the petition
may not become moot and academic.
On November 9, 1998, the defendant-appellant Austria received a copy of the Decision dated
October 30, 1998 dismissing her petition for certiorari and prohibition. The defendant-appellant
Austria moved for the reconsideration thereof.
Subsequently, on July 19, 2001, defendant-appellant Austria received a copy of the Resolution of
the Court of Appeals dated July 9, 2001, denying her motion for reconsideration of the decision
denying her petition for certiorari and prohibition.
Undaunted, the defendant-appellant Austria then filed a petition for review under Rule 45 of the
Revised Rules of Court with the Supreme Court.
In a resolution dated October 15, 2001, the Supreme Court denied the said petition for review for
non-compliance with the 1997 Rules of Civil Procedure for failure to pay on time docket and other
fees and deposit costs in violation of Sec. 3, Rule 45 in relation to Sec. 5(c), Rule 56.
Still not satisfied, on November 9, 2001, the defendant-appellant Austria filed a motion for
reconsideration of the resolution dated October 15, 2001 denying her petition for review.
In its resolution dated January 24, 2002, the Supreme Court denied with finality the petitioner’s
motion for reconsideration.
During the pendency of the defendant-appellant’s petition for certiorari and prohibition before
the Court, the plaintiffs-appellees filed with the Regional Trial Court of Makati City, Branch 142
where the main case is pending, a motion dated April 6, 1998 pray-
405
VOL. 520, APRIL 3, 2007 405
Austria vs. Lichauco
ing that a declaration of default be issued against all defendants and for plaintiffs to be allowed to
present evidence ex-parte.
In an order dated July 13, 1998, the Presiding Judge of the Regional Trial Court of Makati City
held in abeyance the proceedings before it while awaiting the resolution of the motion for
reconsideration pending before the Court of Appeals.
Notwithstanding the order holding in abeyance the proceedings in the lower court, plaintiffs-
appellees filed a Manifestation and Motion dated September 14, 1998 praying for the resolution of
their Motion dated April 6, 1998. In its order dated September 25, 1998, the lower court deemed the
incident submitted for resolution.
While the motion for reconsideration filed by the appellant is still pending before the Court of
Appeals, the lower court in its order dated July 6, 1999 declared the defendants in default, set the
reception of ex parte evidence, and commissioned the Branch Clerk of Court to receive the ex
parte evidence and to submit her corresponding report thereon as soon as the same is concluded.
On August 4, 1999, the defendant-appellant Austria filed a Motion for Reconsideration of the
Order dated July 6, 1999 with an urgent prayer to cancel plaintiff’s ex parte presentation of evidence
on August 9, 1999, which was however denied by the lower court, for lack of merit, in an order dated
January 14, 2000.
The plaintiffs-appellees then presented their evidence ex-parteon January 28, 2000.
The assailed decision was subsequently rendered by the lower court on February 14, 2000,
finding in favor of the plaintiffs-appellees.
A motion for new trial was thereafter filed by the defendant-appellant Austria, which was, in an
order dated August 7, 2000, denied for lack of merit.”
5
Petitioner elevated the case to the Court of Appeals which dismissed her petition and
affirmed the trial court’s decision but deleted the order that petitioner pay reasonable
rental for her use of a portion of the disputed properties. The appellate court denied
reconsideration.
_______________
5Rollo, pp. 33-38.
406
406 SUPREME COURT REPORTS ANNOTATED
Austria vs. Lichauco
In assailing the Decision of the Court of Appeals, petitioner avers that her motion for new
trial and appeal of the judgment by default are valid remedies under the Rules of Court.
She insists that the appellate court erred in not reversing the declaration of default despite
the fact that she questioned the default order in the petition for review which she
seasonably filed with the Court of Appeals. Petitioner also contends that it was error for
the trial court to allow the sale of the entire property in dispute.
Respondents filed a Comment dated March 30, 2006, arguing that petitioner was
6
correctly declared in default because of her obstinate refusal to file an answer to the
complaint despite being ordered to do so by the trial court. They also allege that they
cannot be compelled to remain in co-ownership only because of petitioner’s unjustified
refusal to consent to a partition.
A Reply to Comment dated July 25, 2006 was filed by petitioner who insisted that she
7
was denied the right to fully ventilate her case.
Only two issues are raised in this petition. The first issue pertains to petitioner’s
insistence that the judgment by default rendered by the trial court, which was
subsequently affirmed by the Court of Appeals, is a denial of her day in court. The second
issue concerns the validity of the trial court’s decision alternatively ordering the partition
of the subject property or authorizing its sale.
A defendant declared in default has the following remedies: (a) a motion to set aside
the order of default under Sec. 3(b), Rule 9 of the Rules of Court; (b) a motion for new trial
under Sec. 1(a), Rule 37 if the default was discovered after judgment but while appeal is
still available; (c) a petition for relief under Rule 38 if judgment has become final and
executory; and (d) an appeal from the judgment under Sec. 1, Rule 41 even if
_______________
Id., at pp. 121-128.
6
Id., at pp. 144-147.
7
407
VOL. 520, APRIL 3, 2007 407
Austria vs. Lichauco
no petition to set aside the order of default has been resorted to. 8
 In this case, petitioner did not move to set aside the order of default rendered by the
trial court but filed a motion for new trial after a decision had already been rendered in
the case. The motion for new trial, however, was denied by the trial court for lack of merit.
She then appealed to the Court of Appeals, assailing both the denial of her motion for new
trial and the adverse decision of the trial court.
Evidently, petitioner utilized the appropriate remedies available to her. The fact,
however, that she availed of the proper remedies does not by itself result in a judgment in
her favor or the reversal of the assailed order and decision of the trial court. As correctly
ruled by the Court of Appeals, petitioner was declared in default because of her adamant
refusal to file an answer despite being required to do so.
The factual circumstances in the cases of Heirs of Akut v. Court of
Appeals and Ampeloquio v. Court of Appeals, cited by petitioner in pleading liberality, are
9 10
markedly different from this case. In Heirs of Akut, petitioners were not able to file an
answer within the reglementary period because they failed to obtain the services of counsel
on time and two of the petitioners were then sick. In Ampeloquio, the trial court’s order
denying defendant’s motion to dismiss was mistakenly served upon one of its counsels on
record and not upon the lawyer in charge of the case. Consequently, the answer was not
filed on time. In both cases, there was no indication that the failure to answer was intended
to delay the case.
In contrast, the facts of this case suggest an intention on the part of petitioner to delay
the proceedings. The complaint
_______________
Indiana Aerospace University v. Commission on Higher Education, G.R. No. 139371, April 4, 2001, 356
8
SCRA 367; Tan v. Dumarpa, G.R. No. 138777, September 22, 2004, 438 SCRA 659.
9No. L-45472, August 30, 1982, 116 SCRA 213.
G.R. No. 124243, June 15, 2000, 333 SCRA 465.
10
408
408 SUPREME COURT REPORTS ANNOTATED
Austria vs. Lichauco
was first filed in 1997 but is only now being finally laid to rest because of several procedural
stumbling blocks, including the elevation of the case to this Court on the issue of the
propriety of the trial court’s denial of petitioner’s motion to dismiss, hurled by petitioner
one after the other.
Parenthetically, the appellate court initially issued a temporary restraining order as
an incident to the petition for certiorari filed by petitioner questioning the trial court’s
order denying her motion to dismiss but the restraining order was lifted after its 60-day
validity. The expiration of the temporary restraining order resulted in the running of the
11
prescribed period to file an answer and the continuation of the proceedings before the trial
court. Petitioner’s obstinate refusal to file an answer to the complaint despite these
circumstances clearly justifies the declaration of default by the trial court and its
affirmation by the Court of Appeals.
This case has crept, ever so slowly, up the ladder of judicial process. While we are not
dissuading parties from availing of the judicial remedies outlined in the Rules of Court,
they should be cautioned to be judicious in availing of these remedies. After all, rules of
procedure are intended to be, not tools of delay, but of prompt and just disposition of every
party’s cause. Having fully availed of, even exploited, these remedies, petitioner cannot
feign denial of her day in court. She has been given every opportunity to fully ventilate her
side.
Now, we turn to the second issue raised by petitioner, i.e., the validity of the trial court’s
decision alternatively directing the partition of the subject properties or authorizing their
sale to a third party.
There are two stages in every action for partition. The first phase is the determination
of whether a co-ownership in fact exists and a partition is proper, i.e., not otherwise legally
proscribed, and may be made by voluntary agreement of all the parties interested in the
property. This phase may end either: (a) with a declaration that plaintiff is not entitled to
have a partition either because a co-ownership does not exist, or partition is legally
prohibited; or (b) with a determination that a co-ownership does in truth exist, partition is
proper in the premises, and an accounting of rents and profits received by the defendant
from the real estate in question is in order. In the latter case, the parties may, if they are
able to agree, make partition among themselves by proper instruments of conveyance, and
the court shall confirm the partition so agreed upon. 12
The second phase commences when it appears that the parties are unable to agree upon
the partition directed by the court. In that event, partition shall be done for the parties by
the court with the assistance of not more than three (3) commissioners. This second stage
may well also deal with the rendition of the accounting itself and its approval by the court
after the parties have been accorded opportunity to be heard thereon, and an award for the
recovery by the party or parties thereto entitled of their just share in the rents and profits
of the real estate in question.
13
The proceedings in this case have only reached the first phase. It must be mentioned
as an aside that even if the order decreeing partition leaves something more to be done by
the trial court for the complete disposition of the case, i.e., the appointment of
commissioners, the proceedings for the determination of just compensation by the
appointed commissioners, the submission of their reports and hearing thereon, and the
approval of the partition, it is considered a final order and may be appealed by the party
aggrieved thereby. 14
_______________
12Maglucot-Aw v. Maglucot, G.R. No. 132518, 385 Phil. 720; 329 SCRA 78 (2000); Daffon v. Court of
Appeals, G.R. No. 129017, August 20, 2002, 387 SCRA 427.
13Maglucot-Aw v. Maglucot, supra.
142 FERIA AND NOCHE, CIVIL PROCEDURE ANNOTATED 597 (2001 ed.).
410
410 SUPREME COURT REPORTS ANNOTATED
Austria vs. Lichauco
There is no question that a co-ownership exists between petitioner and respondents. To
this extent, the trial court was correct in decreeing partition in line with the Civil Code
provision that no co-owner shall be obliged to remain in the coownership. 15
 However, the trial court went astray when it also authorized the sale of the subject
properties to a third party and the division of the proceeds thereof. What makes this
portion of the decision all the more objectionable is the fact that the trial court conditioned
the sale upon the price and terms acceptable to plaintiffs (respondents herein) only, and
adjudicated the proceeds of the sale again only to plaintiffs. The pertinent portion of the
trial court’s disposition states:
“WHEREFORE, on the basis of the foregoing considerations, judgment is hereby rendered in favor
of plaintiff:

1. 1)Directing the partition (physical division) of the subject properties and all improvements
thereon among the co-owners in accordance with their respective shares; or
2. 2)Authorizing the sale, conveyance or transfer of the above-described properties to a third-
party at such price and under such terms acceptable to plaintiffs and thereafter,
dividing the proceeds of said sale among them in accordance with their
proportionate interests.” [Emphasis supplied.]
16

It is true that petitioner did not assign this error on appeal resulting in the appellate
court’s failure to rule on the matter. Nonetheless, we cannot simply brush this issue aside
considering that its resolution is necessary in arriving at a just disposition of the case. The 17

rectification of the trial court’s decision is accordingly in order.

_______________

CIVIL CODE, Art. 494.

15

Records, Vol. 2I, p. 454.

16

Dumo v. Espinas, G.R. No. 141962, January 25, 2006, 480 SCRA 53.
17

411
VOL. 520, APRIL 3, 2007 411
Austria vs. Lichauco
WHEREFORE, the petition is GRANTED IN PART. The Decision of the Court of Appeals
dated June 21, 2005 is REVERSED in so far as it affirms the portion of the decision dated
February 14, 2000 of the Regional Trial Court of Makati City, Branch 142, which
authorizes the sale, conveyance or transfer of the properties subject of this case and the
division of the proceeds of said sale to respondents herein. The Decision dated June 21,
2005 and Resolution dated October 7, 2005 are AFFIRMED in all other respects. No
pronouncement as to costs.
SO ORDERED.
Quisumbing (Chairperson), Carpio, Carpio-Moralesand Velasco, Jr., JJ., concur.
Petition granted in part, judgment reversed.
 G.R. No. 129017. August 20, 2002. *
CONCEPCION V. VDA. DE DAFFON, petitioner, vs. THE HONORABLE COURT OF
APPEALS, LOURDES OSMEÑA VDA. DE DAFFON, AILEEN DAFFON, JOSELITO
DAFFON, JR., ANA VANESA DAFFON, LEILA DAFFON and SUZETTE DAFFON,
respondents.
Actions; Pleadings and Practice; The test of sufficiency of the facts found in a complaint as
constituting a cause of action is whether or not admitting the facts alleged the court can render a valid
judgment upon the same in accordance with the prayer thereof.—It should be stressed that in the
determination of whether a complaint fails to state a cause of action, only the statements in the
complaint may be properly considered. Moreover, a defendant who moves to dismiss the complaint
on the ground of lack of cause of action hypothetically admits all the averments thereof. The test of
sufficiency of the facts found in a complaint as constituting a cause of action is whether or not
admitting the facts alleged the court can render a valid judgment upon the same in accordance with
the prayer thereof. The hypothetical admission extends to the relevant and material facts well
pleaded in the complaint and inferences fairly deducible therefrom. Hence, if the allegations in the
complaint furnish sufficient basis by which the complaint can be maintained, the same should not
be dismissed regardless of the defense that may be assessed by the defendants.
Same; Same; Cause of Action; Elements; The rules of procedure require that the complaint must
make a concise statement of the ultimate facts or the essential facts constituting the plaintiff’s cause
of action; A fact is essential if it cannot be stricken out without leaving the statement of the cause of
action inadequate.—In the same vein, there is no need for the complaint to specifically allege
respondents’ claim of co-ownership of the properties. The complaint needs only to allege the ultimate
facts on which the plaintiffs rely for their claim. The rules of procedure require that the complaint
must make a concise statement of the ultimate facts or the essential facts constituting the plaintiff’s
cause of action. A fact is essential if it cannot be stricken out without leaving the statement of the
cause of action inadequate. A complaint states a cause of action only when it has its three
indispensable elements, namely: (1) a right in favor of the plaintiff by whatever means and under
whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect
or not to vio-
_______________
*FIRST DIVISION.
428
428 SUPREME COURT REPORTS ANNOTATED
Vda. de Daffon vs. Court of Appeals
late such right; and (3) an act or omission on the part of such defendant violative of the right
of plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which the latter
may maintain an action for recovery of damages.
Same; Same; Co-Ownership; Partition; In a complaint for partition, the plaintiff seeks, first, a
declaration that he is a co-owner of the subject properties, and, second, the conveyance of his lawful
share.—Contrary to petitioner’s contention, the fact that she repudiated the co-ownership between
her and respondents did not deprive the trial court of jurisdiction to take cognizance of the action for
partition. In a complaint for partition, the plaintiff seeks, first, a declaration that he is a co-owner of
the subject properties; and second, the conveyance of his lawful shares. As the Court of Appeals
correctly held, an action for partition is at once an action for declaration of co-ownership and for
segregation and conveyance of a determinate portion of the properties involved. If the defendant
asserts exclusive title over the property, the action for partition should not be dismissed. Rather, the
court should resolve the case and if the plaintiff is unable to sustain his claimed status as a co-owner,
the court should dismiss the action, not because the wrong remedy was availed of, but because no
basis exists for requiring the defendant to submit to partition. If, on the other hand, the court after
trial should find the existence of co-ownership among the parties, the court may and should order
the partition of the properties in the same action.
Same; Certiorari; For certiorari to lie, it must be convincingly proved that the lower court
committed grave abuse of discretion, or an act too patent and gross as to amount to an evasion of a
positive duty, or to a virtual refusal to perform the duty enjoined or act in contemplation of law, or
that the trial court exercised its power in an arbitrary and despotic manner by reason of passion and
personal hostility.—Petitioner argues that the order which denied the Motion to Dismiss is an
interlocutory order which is not appealable. Hence, it may be the subject of a special civil action for
certiorari. However, for certiorari to lie, it must be convincingly proved that the lower court
committed grave abuse of discretion, or an act too patent and gross as to amount to an evasion of a
positive duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law; or that
the trial court exercised its power in an arbitrary and despotic manner by reason of passion and
personal hostility.In the case at bar, the trial court did not commit grave abuse of discretion in
denying petitioner’s Motion to Dismiss. Thus, the Court of Appeals was correct in dismissing the
petition for certiorari.
429
VOL. 387, AUGUST 20, 2002 429
Vda. de Daffon vs. Court of Appeals
Same; While litigants may utilize all available means to defend themselves, the legal strategies
they employ should not amount to machinations which frustrate and prejudice the rights of others.—
We are indeed distressed by the circumstances under which the instant case reached this Court.
Instead of filing an answer and meeting the issues head-on, petitioner and her counsel chose to
elevate the incident of the denial of the Motion to Dismiss to the higher courts. In doing so, they
effectively delayed the resolution of the case and the adjudication of the respective rights of the
parties by the court below. What makes this case more reprehensible is that petitioner abused the
legal process to delay her own grandchildren’s expectancy to share in the estate left by their father
and grandfather. If there is any merit in her claim of absolute ownership over the contested
properties, she could have just allowed the case to be fully tried, during which she should have proved
her case with competent proof. While litigants may utilize all available means to defend themselves,
the legal strategies they employ should not amount to machinations which frustrate and prejudice
the rights of others. Moreover, frivolous appeals, such as the one filed in this case, are not
countenanced in this jurisdiction.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Lawrence L. Fernandez for petitioner.
Batiquin & Batiquin Law Office for private respondent.
YNARES-SANTIAGO, J.:
Petitioner Concepcion Villamor was married to the late Amado Daffon, with whom she
begot one son, Joselito Daffon. Joselito married Lourdes Osmeña, and they bore six
children, namely, Aileen, Joselito, Jr., Ana Vanesa, Leila, Julius and Suzette.
 Amado passed away on January 21, 1982. His son, Joselito, died on October 25, 1990.
On January 21, 1994, respondents Lourdes Osmeña Vda. De Daffon, together with her
six minor children, instituted an action for partition against petitioner Concepcion
Villamor Vda. de Daffon, which case was docketed as Civil Case No. DNA-281 of the
430
430 SUPREME COURT REPORTS ANNOTATED
Vda. de Daffon vs. Court of Appeals
Regional Trial Court of Danao City, Branch 25. Respondents alleged that Amado left
1
several real and personal properties which formed part of his conjugal partnership with
petitioner. Joselito being a forced heir of Amado was entitled to at least one half of Amado’s
estate, consisting of his share in the said conjugal properties. However, the said properties
were never partitioned between petitioner and Joselito. After Joselito’s death, petitioner’s
behavior towards respondents, her daughter-in-law and grandchildren, changed. She
claimed absolute ownership over all the properties and deprived them of the fruits thereof.
Thus, respondents prayed that the conjugal properties of Amado Daffon and petitioner be
partitioned and that the one-half share of Amado be further partitioned between
petitioner, on one hand, and the respondents as heirs of Joselito Daffon, on the other hand.
Petitioner filed a Motion to Dismiss on the grounds of (1) lack of jurisdiction over the
subject matter of the case; (2) failure of the complaint to state a cause of action; and (3)
waiver, abandonment and extinguishment of the obligation. She argued that the trial
2
court cannot take cognizance of the action for partition considering her claim of absolute
ownership over the properties; and that respondents themselves admitted that petitioner
has repudiated the co-ownership. Anent the third ground, petitioner alleged that Joselito
Daffon filed a complaint against Milagros Marin, who was likewise married to Amado
Daffon, for recovery of a parcel of land in Mandaluyong. In said complaint, respondent
3
Lourdes Osmeña Vda. de Daffon allegedly admitted that the land sought was the only
property of the late Amado Daffon.
In an Order dated July 22, 1994, the trial court denied the Motion to
Dismiss. Petitioner filed a motion for reconsideration which was also denied on September
4
23, 1994.
5
_______________
1Record, pp. 28-32.
2Ibid., pp. 33-38.
3Docketed as Civil Case No. 56336 of the Regional Trial Court of Pasig, Branch 160.
4Record, pp. 25-26; penned by Judge Jose P. Soberano, Jr.
Ibid., p. 27.
5
431
VOL. 387, AUGUST 20, 2002 431
Vda. de Daffon vs. Court of Appeals
On October 25, 1994, petitioner filed a petition for certiorari with the Court of Appeals,
docketed as CA-G.R. SP No. 35536. On November 14, 1996, the Court of Appeals rendered
the assailed decision denying due course and dismissing the petition for
certiorari. Petitioner’s motion for reconsideration was denied in the Resolution dated April
6
21, 1997. 7
The case is now before us on petition for review, based on the following issues:
I
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PRIVATE
RESPONDENTS NEED NOT BE ACKNOWLEDGED AS HEIRS OF THE DECEASED AMADO
DAFFON.
II
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT IT IS NOT
NECESSARY THAT PRIVATE RESPONDENTS BE THE REGISTERED OWNERS OF THE
PROPERTIES CLAIMED IN THE ACTION FOR PARTITION.
III
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE
TRIAL COURT IS NOT REQUIRED TO TAKE JUDICIAL NOTICE OF ANOTHER CASE
PENDING IN ANOTHER COURT.
IV
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE
TRIAL COURT’S DENIAL OF PETITIONER’S MOTION TO DISMISS THE COMPLAINT BASED
ON FAILURE TO STATE A CAUSE OF ACTION IS REVIEWABLE BY THE SPECIAL CIVIL
ACTION OF CERTIORARI. 8
_______________
Ibid., pp. 68-77; penned by Associate Justice Fermin A. Martin, Jr.; concurred in by Presiding Justice
6
Nathanael P. De Pano, Jr. and Associate Justice Conchita Carpio Morales.
7Ibid., pp. 97-98.
8Rollo, pp. 16-17.
432
432 SUPREME COURT REPORTS ANNOTATED
Vda. de Daffon vs. Court of Appeals
There is no merit in the petition.
It should be stressed that in the determination of whether a complaint fails to state a
cause of action, only the statements in the complaint may be properly
considered. Moreover, a defendant who moves to dismiss the complaint on the ground of
9
lack of cause of action hypothetically admits all the averments thereof. The test of
sufficiency of the facts found in a complaint as constituting a cause of action is whether or
not admitting the facts alleged the court can render a valid judgment upon the same in
accordance with the prayer thereof. The hypothetical admission extends to the relevant
and material facts well pleaded in the complaint and inferences fairly deducible therefrom.
Hence, if the allegations in the complaint furnish sufficient basis by which the complaint
can be maintained, the same should not be dismissed regardless of the defense that may
be assessed by the defendants. 10
In the case at bar, the complaint sufficiently alleged that “defendant (i.e., petitioner
herein) was married to Amado Quiros Daffon” and that “they begot an only son in Joselito
Daffon.” The complaint further alleged that “Joselito Daffon later got married to herein
11
plaintiff Lourdes Osmeña and before the former died on October 25, 1990 he sired the six
(6) children who are now plaintiffs with their mother.” This, to our mind, was sufficient
12
allegation that Joselito Daffon was a legitimate son of the spouses Amado and Concepcion
Daffon; and that plaintiffs (i.e.,respondents herein) were likewise legitimate heirs of
Joselito Daffon. Admitting the truth of these averments, there was, therefore, no need to
inquire whether respondent minor children were duly acknowledged by the deceased
Amado Daffon. To be sure, the illegitimacy of the said children and the lack of
acknowledgment are matters which petitioner may raise as a defense in her answer and
threshed out by the court during a full-blown trial.
_______________
9 Government Service Insurance System v. Court of Appeals, G.R. No. 128118, February 15, 2002, 377 SCRA
54.
Ceroferr Realty Corporation v. Court of Appeals, G.R. No. 139539, February 5, 2002, 376 SCRA 144.
10
Complaint, par. II-a.
11
Ibid., par. II-b.
12
433
VOL. 387, AUGUST 20, 2002 433
Vda. de Daffon vs. Court of Appeals
In the same vein, there is no need for the complaint to specifically allege respondents’ claim
of co-ownership of the properties. The complaint needs only to allege the ultimate facts on
which the plaintiffs rely for their claim. 13
The rules of procedure require that the complaint must make a concise statement of the ultimate
facts or the essential facts constituting the plaintiff’s cause of action. A fact is essential if it cannot
be stricken out without leaving the statement of the cause of action inadequate. A complaint states
a cause of action only when it has its three indispensable elements, namely: (1) a right in favor of
the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on
the part of the named defendant to respect or not to violate such right; and (3) an act or omission on
the part of such defendant violative of the right of plaintiff or constituting a breach of the obligation
of defendant to the plaintiff for which the latter may maintain an action for recovery of damages.
The allegations contained therein are sufficient to establish respondents’ right to the estate
of Amado Daffon. By stating their relationship to the deceased, they established their line
of succession as the basis for their claim. Their rights to succeed as heirs were transmitted
from the moment of death of the decedent. 15
Contrary to petitioner’s contention, the fact that she repudiated the co-ownership
between her and respondents did not deprive the trial court of jurisdiction to take
cognizance of the action for partition. In a complaint for partition, the plaintiff seeks, first,
a declaration that he is a co-owner of the subject properties; and second, the conveyance of
his lawful shares. As the Court of Appeals correctly held, an action for partition is at once
16
an action for declaration of co-ownership and for segregation and conveyance of a
determinate portion of the properties involved. If the defendant asserts exclusive title over
the property, the action for partition
_______________
1997 Rules of Civil Procedure, Rule 8, Section 1.
13
Uy v. Hon. Evangelista, G.R. No. 140365, July 11, 2001, 361 SCRA 95.
14
Emnace v. Court of Appeals, G.R. No. 126334, November 23, 2001, 370 SCRA 431.
15
Mallilin, Jr. v. Castillo, 333 SCRA 628, 640 (2000).
16
434
434 SUPREME COURT REPORTS ANNOTATED
Vda. de Daffon vs. Court of Appeals
should not be dismissed. Rather, the court should resolve the case and if the plaintiff is
unable to sustain his claimed status as a co-owner, the court should dismiss the action, not
because the wrong remedy was availed of, but because no basis exists for requiring the
defendant to submit to partition. If, on the other hand, the court after trial should find the
existence of co-ownership among the parties, the court may and should order the partition
of the properties in the same action. 17
An action for partition is comprised of two phases: first, an order for partition which determines
whether a co-ownership in fact exists, and whether partition is proper; and, second, a decision
confirming the sketch or subdivision submitted by the parties or the commissioners appointed by the
court, as the case may be. The first phase of a partition and/or accounting suit is taken up with the
determination of whether or not a co-ownership in fact exists, (i.e., not otherwise legally proscribed)
and may be made by voluntary agreement of all the parties interested in the property. This phase
may end with a declaration that plaintiff is not entitled to have a partition either because a co-
ownership does not exist, or partition is legally prohibited. It may end, upon the other hand, with an
adjudgment that a co-ownership does in truth exist, partition is proper in the premises and an
accounting of rents and profits received by the defendant from the real estate in question is in order.
In the latter case, the parties may, if they are able to agree, make partition among themselves by
proper instruments of conveyance, and the court shall confirm the partition so agreed upon. 18
Petitioner insists that in her testimony given in Civil Case No. 56336, respondent Lourdes
Daffon admitted that the land in Mandaluyong was the only property left by the deceased
Amado Daffon. The pertinent portion of her testimony runs this way:
Q And because of that incident being the surviving spouse of Joselito
Daffon, how did it affect you personally and also your husband at that
14
time when he was still alive?
A She (sic) felt sad and she (sic) suffered mental torture, mental anxiety
and numerous sleepless nights for that is the only
_______________
Citing Roque v. Intermediate Appellate Court, 165 SCRA 118, 125-126 (1988).
17
Maglucot-Aw v. Maglucot, 329 SCRA 78, 89-90 (2000).
18
435
VOL. 387, AUGUST 435 others. Moreover, frivolous appeals, such as the one filed in this case, are not countenanced
20, 2002 in this jurisdiction.
WHEREFORE, in view of the foregoing, the instant petition is DENIED. The decision
Vda. de Daffon vs. Court of Appeals of the Court of Appeals in CA-G.R. SP No. 35536 is AFFIRMED.
property left to us by my father-in-law and his son SO ORDERED.
and his grandchildren. 19 Vitug and Austria-Martinez, JJ., concur.
We do not agree with petitioner’s interpretation of the above phrase. The foregoing Davide, Jr. (C.J., Chairman), On official leave.
statement, saying that the deceased only left the said Mandaluyong property to his son Petition denied, judgment affirmed.
Joselito, does not exclude the possibility that Amado owned other land and personal
belongings during his lifetime, which he may not have left to his son. This does not deprive
Joselito or his successors-in-interest of the right to share in those other properties. As a
matter of fact, respondents’ complaint contains a long list of properties allegedly owned by
Amado Daffon. Again, the resolution of whether or not these belonged to Amado Daffon
20

and formed part of his estate is a matter best taken up during trial and after an evaluation
of the evidence to be presented by the contending parties.
Petitioner argues that the order which denied the Motion to Dismiss is an interlocutory
order which is not appealable. Hence, it may be the subject of a special civil action for
certiorari. However, for certiorari to lie, it must be convincingly proved that the lower court
committed grave abuse of discretion, or an act too patent and gross as to amount to an
evasion of a positive duty, or a virtual refusal to perform the duty enjoined or act in
contemplation of law; or that the trial court exercised its power in an arbitrary and despotic
manner by reason of passion and personal hostility. In the case at bar, the trial court did
21

not commit grave abuse of discretion in denying petitioner’s Motion to Dismiss. Thus, the
Court of Appeals was correct in dismissing the petition for certiorari.
We are indeed distressed by the circumstances under which the instant case reached
this Court. Instead of filing an answer and meeting the issues head-on, petitioner and her
counsel chose to elevate the incident of the denial of the Motion to Dismiss to the higher
courts. In doing so, they effectively delayed the resolution of the case and the adjudication
of the respective rights of the parties by the court below. What makes this case more
reprehensible is

_______________

Civil Case No. 56336; TSN, December 21, 1990, p. 19; Italics ours.
19

Complaint, par. IV, pp. 2-4; Record, pp. 28-30.

20

Lim v. Hon. Executive Secretary, G.R. No. 151445, April 11, 2002, 380 SCRA 739.
21

436
436 SUPREME COURT REPORTS ANNOTATED
Vda. de Daffon vs. Court of Appeals
that petitioner abused the legal process to delay her own grand-children’s expectancy to
share in the estate left by their father and grandfather. If there is any merit in her claim
of absolute ownership over the contested properties, she could have just allowed the case
to be fully tried, during which she should have proved her case with competent proof. While
litigants may utilize all available means to defend themselves, the legal strategies they
employ should not amount to machinations which frustrate and prejudice the rights of
 18
ULPIANO BALO, LYDIA BALO-LUMPAS, EUGENIO BALO, ULPIANO BALO,
JR., NIDA BALO-MORALETA, NORA BALO-CATANO, ZAIDA BALO, JUDITH
BALO-MANDREZA, DANILO BALO and RONILO BALO, petitioners, vs. THE
HON. COURT OF APPEALS, HON. JUDGE ENRIQUE ASIS and JOSEFINA
GARRIDO, respondents.
Actions; Motions to Dismiss; Certiorari; The general rule is that the denial of a motion
to dismiss cannot be questioned in a special civil action for certiorari which is a remedy
designed to correct errors of jurisdiction and not errors of judgment.—The general rule
regarding denial of a motion to dismiss as a basis of a resort to the extraordinary writ
of certiorari is that: [A]n order denying a motion to dismiss is an interlocutory order which
neither terminates nor finally disposes of a case as it leaves something to be done by the
court before the case is finally decided on the merits. As such, the general rule is that the
denial of a motion to dismiss cannot be questioned in a special civil action
for certiorari which is a remedy designed to correct errors of jurisdiction and not errors of
judgment. To justify the grant of the extraordinary remedy of certiorari, therefore, the
denial of the motion to dismiss must have been tainted with grave abuse of discretion. By
“grave abuse of discretion” is meant, such capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the
power is exercised in an arbitrary or despotic manner by reason of passion or personal
hostility and must be so patent and gross as to amount to an evasion of positive duty or to
a virtual refusal to perform the duty enjoined by or to act all in contemplation of law.
Same; Same; Same; Exceptions; Where the petition alleges grave abuse of discretion
on the part of the lower court, the appellate court should not dismiss the petition but proceed
to determine whether or not the trial court did commit grave abuse of discretion.—Specific
instances whereby the rule admits certain exceptions are provided as follows: . . . Under
certain situations, recourse to certiorari or mandamus is considered appropriate, i.e., (a)
when the trial
_______________
* SECOND DIVISION.
228
228 SUPREME COURT REPORTS ANNOTATED
Balo vs. Court of Appeals
court issued the order without or in excess of jurisdiction; (b) where there is patent
grave abuse of discretion by the trial court; or (c) appeal would not prove to be a speedy
and adequate remedy as when an appeal would not promptly relieve a defendant from the
injurious effects of the patently mistaken order maintaining the plaintiff’s baseless action
and compelling the defendant needlessly to go through a protracted trial and clogging the
court dockets by another futile case. Applying the foregoing, the Court of Appeals should
not have dismissed the petition outright as the same alleges grave abuse of discretion.
Instead, it should have proceeded to determine whether or not the trial court did commit
grave abuse of discretion as alleged by the petitioners. The Court of Appeals having failed
in this regard, it behooves upon this Court to discuss the merits of the petition to put to
rest the issues raised by the petitioners.
Same; Same; Pleadings and Practice; Nothing is more settled than the rule that in a
motion to dismiss for failure to state a cause of action, the inquiry is into the sufficiency, not
the veracity, of the material allegations.—Nothing is more settled than the rule that in a
motion to dismiss for failure to state a cause of action, the inquiry is into the sufficiency,
not the veracity, of the material allegations. Moreover, the inquiry is confined to the four
corners of the complaint, and no other. In a motion to dismiss a complaint based on lack of
cause of action, the question submitted to the court for determination is the sufficiency of
the allegations made in the complaint to constitute a cause of action and not whether those
allegations of fact are true, for said motion must hypothetically admit the truth of the facts
alleged in the complaint. The test of the sufficiency of the facts alleged in the complaint is
whether or not, admitting the facts alleged, the court could render a valid judgment upon
the same in accordance with the prayer of the complaint. (Garcon vs. Redemptorist Fathers,
17 SCRA 341) If the allegations of the complaint are sufficient in form and substance but
their veracity and correctness are assailed, it is incumbent upon the court to deny the
motion to dismiss and require the defendant to answer and go to trial to prove his defense.
The veracity of the assertions of the parties can be ascertained at the trial of the case on
the merits. (Galeon vs. Galeon, 49 SCRA 516-521)
Same; Same; Same; The complaint needs only to allege the ultimate facts upon which
the plaintiff bases her claim.—Section 1, Rule 8 of the 1997 Rules of Civil Procedure
provides that the com-
229
VOL. 471, SEPTEMBER 30, 2005 229
Balo vs. Court of Appeals
plaint needs only to allege the ultimate facts upon which private respondent bases
her claim. The rules of procedure require that the complaint must make a concise
statement of the ultimate facts or the essential facts constituting the plaintiff’s cause of
action. A fact is essential if it cannot be stricken out without leaving the statement of the
cause of action inadequate. A complaint states a cause of action only when it has its three
indispensable elements, namely: (1) a right in favor of the plaintiff by whatever means and
under whatever law it arises or is created; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and (3) an act or omission on the part of
such defendant violative of the right of plaintiff or constituting a breach of the obligation
of defendant to the plaintiff for which the latter may maintain an action for recovery of
damages.
Same; Partition; Succession; Illegitimate Children; Proof of legal acknowledgment is
not a prerequisite before an action for partition may be filed.—On the insistence of
petitioners that private respondent first prove her legitimacy before an action for partition
may be maintained, this Court, in the case of Briz v. Briz, pronounced that proof of legal
acknowledgment is not a prerequisite before an action for partition may be filed.
 Same; Same; An action for partition is at once an action for declaration of co-
ownership and for segregation and conveyance of a determinate portion of the properties
involved.—To further reiterate that in partition proceedings, dismissal prior to answer is
premature, this Court has held: In a complaint for partition, the plaintiff seeks, first, a
declaration that he is a co-owner of the subject properties; and second, the conveyance of
his lawful shares. As the Court of Appeals correctly held, an action for partition is at once
an action for declaration of co-ownership and for segregation and conveyance of a
determinate portion of the properties involved. If the defendant asserts exclusive title over
the property, the action for partition should not be dismissed. Rather, the court should
resolve the case and if the plaintiff is unable to sustain his claimed status as a co-owner,
the court should dismiss the action, not because the wrong remedy was availed of, but
because no basis exists for requiring the defendant to submit to partition. If, on the other
hand, the court after trial should find the existence of co-ownership among the parties, the
court may and should order the partition of the properties in the same action.
230
230 SUPREME COURT REPORTS ANNOTATED
Balo vs. Court of Appeals
Same; Prescription; Pleadings and Practice; An allegation of prescription can
effectively be used in a motion to dismiss only when the complaint on its face shows that
indeed the action has already prescribed, otherwise, the issue of prescription is one involving
evidentiary matters requiring a full-blown trial on the merits and cannot be determined in
a mere motion to dismiss.—On the matter of prescription cited by the petitioners as a
ground for the dismissal of the complaint, it is noteworthy that the motion to dismiss filed
by the petitioners did not ipso facto establish prescription. An allegation of prescription
can effectively be used in a motion to dismiss only when the complaint on its face shows
that indeed the action has already prescribed; otherwise, the issue of prescription is one
involving evidentiary matters requiring a full-blown trial on the merits and cannot be
determined in a mere motion to dismiss.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Ricardo M. Ribo for petitioners.
Enerio Sabulao for private respondent.
CHICO-NAZARIO, J.:
A complaint for Judicial Partition of Real Properties and Accounting with
Damages, docketed as Civil Case No. 279, was filed by private respondent Josefina
Garrido against petitioners Ulpiano Balo, Lydia Balo-Lumpas, Eugenio Balo,
Ulpiano Balo, Jr., Nida Balo-Moraleta, Nora Balo-Catano, Zaida Balo, Judith
Balo-Mandreza, Danilo Balo and Ronilo Balo, before the Regional Trial Court
(RTC) of Abuyog, Leyte, Branch 10, alleging that she (private respondent) and
petitioners are the co-owners of undivided parcels of land located at Mayorga,
Leyte. According to her, these lands were originally owned by the spouses Eugenio
Balo, Sr. and Ma. Pasagui-Balo, who, at the time of the filing of the complaint,
were already deceased. The Balo spouses were survived by their two (2) children,
Ulpiano, Sr. and Maximino, the latter likewise deceased. Private respondent is the
daughter of Maxi-
231
VOL. 471, SEPTEMBER 30, 2005 231
Balo vs. Court of Appeals
mino Balo and Salvacion Sabulao. Petitioner Ulpiano Balo is the son of Eugenio
Balo, Sr., while the other petitioners, the children of Ulpiano, are Eugenio’s
grandchildren.
Private respondent further alleged in her complaint that immediately upon the
death of her grandfather, Eugenio Sr., the petitioners took possession of the said
real properties without her knowledge and consent. The petitioners being her
uncle and cousins, private respondent earnestly requested them that they come
up with a fair and equal partition of the properties left by her grandparents. The
petitioners having outrightly refused her proposal, private respondent filed the
complaint. 1
In lieu of an Answer, petitioners filed a Motion to Dismiss on the following
2
grounds:
1. 1.Failure to state a cause of action—plaintiff, though she claims to be a daughter
of Maximino who died sometime in 1946, failed to allege whether or not she is a
legitimate child. Plaintiff’s failure to allege legitimacy is fatal considering the
provision of Article 992 of the Civil Code. To allow Plaintiff to inherit from the
3
estate of the spouses Eugenio and Maria Balo in representation of her father
Maximino Balo would be to permit intestate succession by an illegitimate child
from the legitimate parent of his father, assuming that she is the child of
Maximino Balo.
2. 2.The complaint does not show that the estate of the spouses Eugenio and Maria
Balo have been settled and its obligations have been paid.
3. 3.The properties enumerated in the Complaint were proceeded against by way of
execution to satisfy a judgment against Eugenio and Maria Balo. Subsequently,
defendant Ulpiano repurchased the said properties and has been, together with
his children,
_______________
1 Rollo, pp. 41-46.
2 Rollo, pp. 60-62.
 3 Article 992. An illegitimate child has no right to inherit ab intestatofrom the legitimate children Petitioners filed a Petition for Certiorari before the Court of Appeals. After the
9

or relatives of his father or mother. filing of Comment and other pleadings, the case was deemed submitted for
232
decision. In a resolution dated 16 April 1997, the Court of Appeals denied due
232 SUPREME COURT REPORTS ANNOTATED
course to the petition and accordingly dismissed the same. The Court of Appeals
Balo vs. Court of Appeals justified the dismissal in the following manner:
It is an established rule that an order denying a motion to dismiss is basically interlocutory
1. openly, exclusively and adversely in possession of the real estate properties in in character and cannot be the proper subject of a petition for certiorari. When a motion to
question. dismiss is denied, the proper procedure is to proceed with the trial and if the decision be
adverse to the movant, the remedy is to take an appeal from said decision, assigning as
Private respondent filed her comment/opposition to the motion to dismiss. 4 one of the errors therefore the denial of the motion to dismiss.10

In an Order dated 12 September 1996, the RTC denied the motion to dismiss Petitioners filed a Motion for Reconsideration which the Court of Appeals denied
11

for lack of merit. The trial court held:

5 in a resolution dated 30 June 1997. Hence this petition for review under Rule 45
12 13

“The complaint clearly states that the late Eugenio Balo, Sr., and Maria Pasagui Balo had of the Rules of Court.
two (2) children, namely: Ulpiano, Sr. and Maximino. The plaintiff is the daughter of the Petitioners cite the following grounds for the allowance of their petition, to wit:
late Maximino Balo and Salvacion Sabulao; while the defendants are children of the late
Ulpiano Balo, Sr. and Felicidad Superio. I
The complaint enumerates/annexes 13 tax declarations in the name of Eugenio Balo,
Sr. marked as Annexes “A” to “M.” The plaintiff as an heir prays that these parcels of land WHETHER OR NOT THE FAILURE TO ALLEGE THE NATURE AND EXTENT OF
be partitioned in accordance with Article 982 of the Civil Code which states: PLAINTIFF’S TITLE IN A PETITION FOR PARTITION IS FATAL TO ITS CAUSE OF
“The grandchildren and other descendants shall inherit by right of representation, and if any one of ACTION.
them should have died, leaving several heirs, the portion pertaining to him shall be divided among
the latter in equal portions.” _______________
No evidence may be alleged or considered to test the sufficiency of the complaint except
the very facts pleaded therein. It would be improper to inject into the allegation, facts not 7 Rollo, pp. 75-77.
alleged and use them as basis for the decision on the motion.
8 Rollo, p. 78.
9 CA-G.R. SP No. 42803; Rollo, p. 105.

The Court is not permitted to go beyond and outside of the allegations in the complaint 10 Rollo, p. 24.

for data or facts. 11 Rollo, p. 159.

Therefore, the allegation of illegitimacy and claim of absolute ownership are 12 Rollo, p. 104.

13 Rollo, pp. 11-22.

modifications and unreasonable inferences. If there is doubt to the truth of the facts
234
averred in the complaint, the Court does not dismiss the complaint but requires an answer
and proceeds to hear the case on the merit.” 6
234 SUPREME COURT REPORTS ANNOTATED
Balo vs. Court of Appeals
_______________
II
4Rollo, p. 64.
5Rollo, pp. 72-74. WHETHER OR NOT THE ACTION FOR JUDICIAL PARTITION AND
6Rollo, pp. 73-74.
ACCOUNTING HAS PRESCRIBED, WAS WAIVED, OR WAS OTHERWISE
233
ABANDONED. 14

VOL. 471, SEPTEMBER 30, 2005 233

At the threshold of the instant petition for review is the correctness of the appellate
Balo vs. Court of Appeals court’s dismissal of the petition for certiorari filed by the petitioners.
Petitioners filed a Motion for Reconsideration which the RTC denied in its
7
In resolving to deny the petition, the Court of Appeals relied on the long
Order dated 07 November 1996.
8
established jurisprudence that an order denying a motion to dismiss is
interlocutory and cannot be the proper subject of a petition for certiorari.
 The general rule regarding denial of a motion to dismiss as a basis of a resort
to the extraordinary writ of certiorariis that:
. . . [A]n order denying a motion to dismiss is an interlocutory order which neither
terminates nor finally disposes of a case as it leaves something to be done by the court
before the case is finally decided on the merits. As such, the general rule is that the denial
of a motion to dismiss cannot be questioned in a special civil action for certiorari which is
a remedy designed to correct errors of jurisdiction and not errors of judgment.
To justify the grant of the extraordinary remedy of certiorari, therefore, the denial of
the motion to dismiss must have been tainted with grave abuse of discretion. By “grave
abuse of discretion” is meant, such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power
is exercised in an arbitrary or despotic manner by reason of passion or personal hostility
and must be so patent and gross as to amount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined by or to act all in contemplation of law. 15
_______________
14Rollo, p. 235.
15Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corporation, 23 September
2005, 470 SCRA 650.
235
VOL. 471, SEPTEMBER 30, 2005 235
Balo vs. Court of Appeals
Specific instances whereby the rule admits certain exceptions are provided as
follows:
. . . Under certain situations, recourse to certiorari or mandamusis considered
appropriate, i.e., (a) when the trial court issued the order without or in excess of
jurisdiction; (b) where there is patent grave abuse of discretion by the trial court; or (c)
appeal would not prove to be a speedy and adequate remedy as when an appeal would not
promptly relieve a defendant from the injurious effects of the patently mistaken order
maintaining the plaintiff’s baseless action and compelling the defendant needlessly to go
through a protracted trial and clogging the court dockets by another futile case. 16
Applying the foregoing, the Court of Appeals should not have dismissed the
petition outright as the same alleges grave abuse of discretion. Instead, it should
have proceeded to determine whether or not the trial court did commit grave abuse
of discretion as alleged by the petitioners. The Court of Appeals having failed in
this regard, it behooves upon this Court to discuss the merits of the petition to put
to rest the issues raised by the petitioners.
Contrary to petitioners’ contention, allegations sufficient to support a cause of
action for partition may be found in private respondent’s complaint. 17
Nothing is more settled than the rule that in a motion to dismiss for failure to
state a cause of action, the inquiry is into the sufficiency, not the veracity, of the
material allega-
_______________
Bank of America NT&SA v. Court of Appeals, G.R. No. 120135, 31 March 2003, 400 SCRA 156,
16
166.
Ocampo v. Ocampo, et al., G.R. No. 150707, 14 April 2004, 427 SCRA 545.
17
236
236 SUPREME COURT REPORTS ANNOTATED
Balo vs. Court of Appeals
tions. Moreover, the inquiry is confined to the four corners of the complaint, and
18
no other. 19
In a motion to dismiss a complaint based on lack of cause of action, the question submitted
to the court for determination is the sufficiency of the allegations made in the complaint to
constitute a cause of action and not whether those allegations of fact are true, for said
motion must hypothetically admit the truth of the facts alleged in the complaint.
The test of the sufficiency of the facts alleged in the complaint is whether or not,
admitting the facts alleged, the court could render a valid judgment upon the same in
accordance with the prayer of the complaint. (Garcon vs. Redemptorist Fathers, 17 SCRA
341)
If the allegations of the complaint are sufficient in form and substance but their
veracity and correctness are assailed, it is incumbent upon the court to deny the motion to
dismiss and require the defendant to answer and go to trial to prove his defense. The
veracity of the assertions of the parties can be ascertained at the trial of the case on the
merits. (Galeon vs. Galeon, 49 SCRA 516-521) 20
Section 1, Rule 8 of the 1997 Rules of Civil Procedure provides that the complaint
needs only to allege the ultimate facts upon which private respondent bases her
claim.
The rules of procedure require that the complaint must make a concise statement of the
ultimate facts or the essential facts constituting the plaintiff’s cause of action. A fact is
essential if it cannot be stricken out without leaving the statement of the cause of action
inadequate. A complaint states a cause of action only when it has its three indispensable
elements, namely: (1) a right in favor of the plaintiff by whatever means and under
whatever law it arises or is
_______________
18 Ventura v. Bernabe, G.R. No. L-26760, 30 April 1971, 38 SCRA 587, cited in Dabuco v. Court of Appeals, G.R.
No. 133775, 20 January 2000, 322 SCRA 853.
19 Acuna v. Batac Producers Cooperative Marketing Association, Inc., G.R. No. L-20333, 30 June 1967, 20
SCRA 526.
20 Paredes v. Intermediate Appellate Court, G.R. No. 70717, 08 May 1990, 185 SCRA 134, 138-139.
237
VOL. 471, SEPTEMBER 30, 2005 237
Balo vs. Court of Appeals
created; (2) an obligation on the part of the named defendant to respect or not to violate
such right; and (3) an act or omission on the part of such defendant violative of the right
of plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which
the latter may maintain an action for recovery of damages. 21
In her Complaint, the private respondent made the following assertions:
. . . That the afore-described parcels of lands were originally owned by Eugenio Balo, Sr.
and Ma. Pasagui-Balo, who are now both deceased and after their death, were inherited
into two (2) equal shares by their two (2) children, namely: Ulpiano, Sr. and Maximino,
both surnamed Balo, the later (sic) being already dead.
That plaintiff is the daughter of the late Maximino Balo and Salvacion Sabulao, who
after her father’s death, had inherited her father’s share of the inheritance.
That defendant Ulpiano Balo, Sr. aside from being the son of Eugenio Balo, Sr., is
married to Felicidad Superio, and is the father of all the other defendants in this case.
The defendants took possession of the above-described real properties immediately
after the death of plaintiff’s grandfather Eugenio Balo, Sr. without her knowledge and
consent.
That plaintiff is desirous that the above-described real properties be partitioned
between her and defendants.
That plaintiff has proposed to the defendants that the above-described real properties
be amicably partitioned between them by mutual agreement in a very fair and practical
division of the same, but said defendants refused and continue to do so without any
justifiable cause or reason to accede to the partition of the said properties.22
The foregoing allegations show substantial compliance with the formal and
substantial requirements of a Complaint for
_______________
See Nadela v. City of Cebu, G.R. No. 149627, 18 September 2003, 411 SCRA 315.
21
Rollo, pp. 43-44.
22
238
238 SUPREME COURT REPORTS ANNOTATED
Balo vs. Court of Appeals
Partition as required under Section 1, Rule 69 of the 1997 Rules of Civil
Procedure. 23
On the insistence of petitioners that private respondent first prove her
legitimacy before an action for partition may be maintained, this Court, in the case
of Briz v. Briz, pronounced that proof of legal acknowledgment is not a prerequisite
24
before an action for partition may be filed. We said: 25
. . . In other words, there is no absolute necessity requiring that the action to compel
acknowledgment should have been instituted and prosecuted to a successful conclusion
prior to the action in which that same plaintiff seeks additional relief in the character of
heir. Certainly, there is nothing so peculiar to the action to compel acknowledgment as to
require that a rule should be here applied different from that generally applicable in other
cases. For instance, if the plaintiff had in this action impleaded all of the persons who
would be necessary parties defendant to an action to compel acknowledgement, and had
asked for relief of that character, it would have been permissible for the court to make the
judicial pronouncement declaring that the plaintiff is entitled to be recognized as the
natural child of Maximo Briz, and at the same time to grant the additional relief sought in
this case against the present defendants; that is, a decree compelling them to surrender to
the plaintiff the parcel of land sued for and to pay her the damages awarded in the appealed
decision.
The conclusion above stated, though not heretofore explicitly formulated by this court,
is undoubtedly to some extent supported by
_______________
23 Rule 69, Section 1. Complaint in action for Partition of real estate. A person having the right to compel the
partition of real estate may do so as provided in this Rule, setting forth in his Complaint the nature and extent
of his title and an adequate description of the real estate of which partition is demanded and joining as defendants
all other persons interested in the property. Heirs of Bartolome Infante v. Court of Appeals, G.R. No. L-77202, 22
June 1988, 162 SCRA 431.
24 43 Phil. 763, 768-769 (1922).
25 Cited in Tayag v. Court of Appeals, G.R. No. 95229, 09 June 1992, 209 SCRA 605.
239
VOL. 471, SEPTEMBER 30, 2005 239
Balo vs. Court of Appeals
our prior decisions. Thus, we have held in numerous cases, and the doctrine must be
considered well settled, that a natural child having a right to compel acknowledgment, but
who has not been in fact legally acknowledged, may maintain partition (proceedings for
the division of the inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil.
5; Tiamson vs. Tiamson, 32 Phil. 62); and the same person may intervene in proceedings
for the distribution of the estate of his deceased natural father, or mother (Capistrano vs.
Fabella, 8 Phil. 135; Conde vs. Abaya, 13 Phil. 249; Ramirez vs. Gmur, 42 Phil. 855). In
neither of these situations has it been thought necessary for the plaintiff to show a prior
decree compelling acknowledgment. The obvious reason is that in partition suits and
distribution proceedings the other persons who might take by inheritance are before the
court; and the declaration of heirship is appropriate to such proceedings.
To further reiterate that in partition proceedings, dismissal prior to answer is
premature, this Court has held:
In a complaint for partition, the plaintiff seeks, first, a declaration that he is a co-owner of
the subject properties; and second, the conveyance of his lawful shares. As the Court of
Appeals correctly held, an action for partition is at once an action for declaration of co-
ownership and for segregation and conveyance of a determinate portion of the properties
involved. If the defendant asserts exclusive title over the property, the action for partition
should not be dismissed. Rather, the court should resolve the case and if the plaintiff is
unable to sustain his claimed status as a co-owner, the court should dismiss the action, not
because the wrong remedy was availed of, but because no basis exists for requiring the
defendant to submit to partition. If, on the other hand, the court after trial should find the
existence of co-ownership among the parties, the court may and should order the partition
of the properties in the same action. 26
_______________ SP No. 42803, affirming the Order of the Regional Trial Court dated 12 September
1996, is AFFIRMED. This case is ordered remanded to the court of origin which is
See Roque v. Intermediate Appellate Court, G.R. No. L-75886, 30 August 1988, 165 SCRA 118.
directed to resolve the case with dispatch. Costs against petitioners.
26

240
SO ORDERED.
240 SUPREME COURT REPORTS ANNOTATED
Puno (Chairman), Austria-Martinez, Callejo, Sr.and Tinga, JJ., concur.
Balo vs. Court of Appeals Petition denied, judgment affirmed.
The case of Vda. De Daffon v. Court of Appeals is almost most appropriate. In said
27

case, the action for partition filed by the plaintiffs was met by a motion to dismiss
filed by the defendants based on the grounds of failure of the complaint to state a
cause of action, waiver, abandonment and extinguishment of the obligation. The
trial court denied the motion to dismiss and the denial was affirmed by the
appellate court and by this Court. We held there that the trial court and the Court
of Appeals were correct in dismissing the petition for certiorari absent a clear
showing of grave abuse of discretion amounting to lack or excess of jurisdiction.
We further expressed our dismay over the delay in the resolution of the said case
due to the fact that the issue of the denial of the Motion to Dismiss was elevated
to this Court by petitioner and counsel instead of just filing an Answer and meeting
the issues head-on.
On the matter of prescription cited by the petitioners as a ground for the
dismissal of the complaint, it is noteworthy that the motion to dismiss filed by the
petitioners did not ipso facto establish prescription. An allegation of prescription
can effectively be used in a motion to dismiss only when the complaint on its face
shows that indeed the action has already prescribed; otherwise, the issue of
28

prescription is one involving evidentiary matters requiring a full-blown trial on

the merits and cannot be determined in a mere motion to dismiss. 29

WHEREFORE, premises considered, the instant Petition is DENIED and the

decision of the Court of Appeals in CA-G.R.

_______________

27Penned by Associate Justice Consuelo Ynares-Santiago with Associate Justices Jose C. Vitug
and Alicia Austria-Martinez, concurring. G.R. No. 129017, 20 August 2002, 387 SCRA 427.
28 National Irrigation Administration v. Court of Appeals, G.R. No. 129169, 17 November
1999, 318 SCRA 255; Francisco v. Robles, 94 Phil. 1035 (1954).
29Marquez v. Baldoz, G.R. No. 143779, 04 April 2003, 400 SCRA 669.

241

VOL. 471, SEPTEMBER 30, 2005 241

Cabuslay vs. People
 G.R. No. 152195. January 31, 2005. * Same; Same; Parties; Indispensable Parties; The absence of an indispensable party
PEDRO SEPULVEDA, SR., substituted by SOCORRO S. LAWAS, Administratrix
of His Estate, petitioner, vs. ATTY. PACIFICO S. PELAEZ, respondent.
Civil Law; Contracts; Usufruct; Rights; The rights of the usufructuary are provided in
Articles 471 to 490 of the Old Civil Code.— The rights of the usufructuary are provided in
Articles 471 to 490 of the Old Civil Code. In Gamis v. Court of Appeals, we held that: Under
articles 807 and 834 of the old Civil Code the surviving spouse is a forced heir and entitled
to a share in usufruct in the estate of the deceased spouse equal to that which by way of
legitime corresponds or belongs to each of the legitimate children or descendants who have
not been bettered or have not received any share in the one-third share destined for
betterment. The right of the surviving spouse to have a share in usufruct in the estate of
the deceased spouse is provided by law of which such spouse cannot be deprived and which
cannot be ignored. Of course, the spouse may waive it but the waiver must be express.
Actions; Pleadings and Practice; Judicial Partition; In a complaint for partition, the
plaintiff seeks, first, a declaration that he is a co-owner of the subject property; and second,
the conveyance of his lawful shares.—In a complaint for partition, the plaintiff seeks, first,
a declaration that he is a co-owner of the subject property; and, second, the conveyance of
his lawful shares. As the Court ruled in De Mesa v. Court of Appeals: The first stage of an
action for judicial partition and/or accounting is concerned with the determination of
whether or not a co-ownership in fact exists and a partition is proper, that is, it is not
otherwise legally proscribed and may be made by voluntary agreement of all the parties
interested in the property. This phase may end in a declaration that plaintiff is not entitled
to the desired partition either because a co-ownership does not exist or a partition is legally
prohibited. It may also end, on the other hand, with an adjudgment that a co-ownership
does in truth exist, that partition is proper in the premises, and that an accounting of rents
and profits received by the defendant from the real es-
_______________
*SECOND DIVISION.
303
VOL. 450, JANUARY 31, 2005 303
Sepulveda, Sr. vs. Pelaez
tate in question is in order. In the latter case, “the parties may, if they are able to
agree, make partition among themselves by proper instruments of conveyance, and the
court shall confirm the partition so agreed upon by all the parties.” In either case, whether
the action is dismissed or partition and/or accounting is decreed, the order is a final one
and may be appealed by any party aggrieved thereby. The second stage commences when
the parties are unable to agree upon the partition ordered by the court. In that event,
partition shall be effected for the parties by the court with the assistance of not more than
three (3) commissioners. This second phase may also deal with the rendition of the
accounting itself and its approval by the Court after the parties have been accorded the
opportunity to be heard thereon, and an award for the recovery by the party or parties
thereto entitled of their just shares in the rents and profits of the real estate in question.
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.—The presence of all indispensable
parties is a condition sine qua non for the exercise of judicial power. It is precisely when
an indispensable party is not before the court that the action should be dismissed. Thus,
the plaintiff is mandated to implead all the indispensable parties, considering that the
absence of one such 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. One who
is not a party to a case is not bound by any decision of the court, otherwise, he will be
deprived of his right to due process. Without the presence of all the other heirs as plaintiffs,
the trial court could not validly render judgment and grant relief in favor of the private
respondent. The failure of the private respondent to implead the other heirs as parties-
plaintiffs constituted a legal obstacle to the trial court and the appellate court’s exercise of
judicial power over the said case, and rendered any orders or judgments rendered therein
a nullity. To reiterate, 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. Hence, the trial court should have ordered the dismissal of the
complaint.
304
304 SUPREME COURT REPORTS ANNOTATED
Sepulveda, Sr. vs. Pelaez
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Walter S. Lawas for petitioner.
Almase, Suarez & Almase-Martinez Law Offices for respondent.
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court,
of the Decision of the Court of Appeals (CA) in CA-G.R. CV No. 43758 affirming
1
the decision of the Regional Trial Court (RTC) of Danao City, Branch 25, in Civil
Case No. SF-175.
On December 6, 1972, private respondent Atty. Pacifico Pelaez filed a complaint
against his granduncle, Pedro Sepulveda, Sr., with the then Court of First Instance
(CFI) of Cebu, for the recovery of possession and ownership of his one-half (1/2)
undivided share of several parcels of land covered by Tax Declaration (T.D.) Nos.
28199, 18197, 18193 and 28316; his undivided one-third (1/3) share in several
other lots covered by T.D. Nos. 28304, 35090, 18228, 28310, 26308, 28714, 28311,
28312 and 28299 (all located in Danao, Cebu); and for the partition thereof among
the co-owners. The case was docketed as Civil Case No. SF-175.
 The eleven (11) lots were among the twenty-five (25) parcels of land which the 4Records, p. 171.
private respondent’s mother, Dulce Sepulveda, inherited from her grandmother, 306
Dionisia Sepulveda under the Project of Partition dated April 16, 1937 submitted
2
306 SUPREME COURT REPORTS ANNOTATED
by Pedro Sepulveda, Sr. as the administrator of the Sepulveda, Sr. vs. Pelaez
also executed a Deed of Absolute Sale on July 24, 1968 over the property covered
5

_______________
1Penned by Associate Justice Conchita Carpio-Morales (now an Associate Justice of the Supreme
Court), with Associate Justices Martin S. Villarama, Jr. and Sergio L. Pestaño (retired), concurring.
2Records, p. 12.
305
VOL. 450, JANUARY 31, 2005 305
Sepulveda, Sr. vs. Pelaez
former’s estate, duly approved by the then CFI of Cebu in Special Proceeding No.
778-0. Under the said deed, Pedro Sepulveda, Sr. appeared to be the owner of an
undivided portion of Lot No. 28199, while his brother and Dulce’s uncle Santiago
Sepulveda, was the undivided owner of one-half (1/2) of the parcels of land covered
by T.D. Nos. 18197, 18193 and 28316. Dulce and her uncles, Pedro and Santiago,
were likewise indicated therein as the co-owners of the eleven other parcels of land,
each with an undivided one-third (1/3) share thereof.
In his complaint, the private respondent alleged that his mother Dulce died
intestate on March 2, 1944, and aside from himself, was survived by her husband
Rodolfo Pelaez and her mother Carlota Sepulveda. Dulce’s grandfather Vicente
Sepulveda died intestate on October 25, 1920, and Dulce was then only about four
3
by T.D. No. 19804 (T.D. No. 35090) in favor of the City of Danao for P7,492.00.
According to the private respondent, his granduncle received this amount without
his (private respondent’s) knowledge.
The private respondent prayed that, after due hearing, judgment be rendered
in his favor, thus:
ON THE FIRST CAUSE OF ACTION:
1. 1.Declaring the plaintiff the absolute owner of ONE-HALF (1/2) portion of the TWO
(2) parcels of land described in paragraph 2 of the complaint;
2. 2.Declaring the plaintiff the absolute owner of the ONE-THIRD (1/3) portion of the
NINE (9) parcels of land described in paragraph 3 of the complaint;
3. 3.Ordering the defendant to deliver to the plaintiff the latter’s ONE-THIRD (1/3)
share of the SEVEN THOUSAND FOUR HUNDRED NINETY-TWO PESOS
(P7,492.00) representing the purchase price of the parcel of land described in
paragraph 3(a) of the complaint with interest thereon until the amount is fully
paid;
ON THE SECOND CAUSE OF ACTION:

years old. According to the private respondent, his grandmother Carlota 1. 1.Ordering the partition and segregation of the ONE-HALF (1/2) portion belonging
repeatedly demanded the delivery of her mother’s share in the eleven (11) parcels to the plaintiff of the TWO (2) parcels of land described in paragraph 2 of the
of land, but Pedro Sepulveda, Sr. who by then was the Municipal Mayor of Tudela, complaint;
2. 2.Ordering the partition and segregation of the ONE-THIRD (1/3) portion
refused to do so. Dulce, likewise, later demanded the delivery of her share in the
belonging to the plaintiff of the remaining EIGHT (8) parcels of land described in
eleven parcels of land, but Pedro Sepulveda, Sr. still refused, claiming that he paragraph 3 of the complaint;
needed to continue to possess the property to reap the produce therefrom which he
used for the payment of the realty taxes on the subject properties. The private COMMON TO THE FIRST AND SECOND CAUSES OF ACTION:
respondent alleged that he himself demanded the delivery of his mother’s share in
the subject properties on so many occasions, the last of which was in 1972, to no 1. 1.Ordering the defendant to pay the plaintiff the amount of FIFTY THOUSAND
avail. PESOS (P50,000.00) as moral damages;
The private respondent further narrated that his granduncle executed an
affidavit on November 28, 1961, stating that he was the sole heir of Dionisia when
4
_______________
she died intestate on June 5, 1921, when, in fact, the latter was survived by her
three sons, Santiago, Pedro and Vicente. Pedro Sepulveda, Sr. 5Exhibit “C-3”.
307
_______________ VOL. 450, JANUARY 31, 2005 307
Sepulveda, Sr. vs. Pelaez
3 TSN, 13 April 1992, p. 28.
 1. 2.Ordering the defendant to pay the plaintiff exemplary damages the amount of
which is left to the discretion of this Honorable Court;
2. 3.Ordering the defendant to deliver to the plaintiff the latter’s share of the fruits
of the ELEVEN (11) parcels of land subject-matter of this complaint, the value of
which will be proven during the trial;
3. 4.Ordering the defendant to pay the plaintiff actual litigation expenses, the value
of which will be proven during the trial;
4. 5.Ordering the defendant to pay attorney’s fee in the amount of TWELVE
THOUSAND PESOS (P12,000.00);
5. 6.Granting to the plaintiff such other reliefs and remedies as he may be entitled to
in accordance with law and equity. 6
In his answer to the complaint, Pedro Sepulveda, Sr. admitted having executed a
deed of sale over the parcel of land covered by T.D. No. 19804 in favor of Danao
City, but averred that the latter failed to pay the purchase price thereof; besides,
the private respondent had no right to share in the proceeds of the said sale. He
likewise denied having received any demand for the delivery of Dulce’s share of
the subject properties from the latter’s mother Carlota, or from the private
respondent.
During the trial, Pedro Sepulveda, Sr. died intestate. A petition for the
settlement of his estate was filed on May 8, 1975 with the RTC of Cebu, docketed
as Special Proceeding No. SF-37. His daughter, petitioner Socorro Sepulveda
Lawas, was appointed administratrix of his estate in July 1976. In compliance
with the decision of this Court in Lawas v. Court of Appeals, docketed as G.R. No.
7
L-45809and promulgated on December 12, 1986, the deceased was substituted by
the petitioner.
To prove the delivery of Dulce’s share under the project of partition, the
petitioner presented the Affidavit of Consolida-
_______________
tion she executed in October 1940 covering thirteen (13) of the twenty-five (25)
parcels of land which were deeded to her under the Project of Partition, as well as
8
the Order dated March 24, 1962 of the then CFI in Special Proceeding No. 778-R,
9
denying Carlota’s motion for the reconstitution of the records of the said case, and
for the delivery of Dulce’s share in the eleven parcels of land. The court likewise
declared therein that Dulce, through her grandchildren and her mother, Carlota,
had already received her share of the estate from Pedro Sepulveda, Sr. as early as
January 10, 1938.
According to the petitioner, Dulce and Pedro Sepulveda, Sr. had a verbal
agreement wherein the eleven parcels of land covered by the complaint would
serve as the latter’s compensation for his services as administrator of Dionisia’s
estate. Thus, upon the termination of Special Proceeding No. 778-0, and
subsequent to the distribution of the shares of Dionisia’s heirs, Pedro Sepulveda,
Sr. then became the sole owner of Dulce’s shares.
The petitioner likewise adduced evidence that Santiago Sepulveda died
intestate and was survived by his wife, Paz Velez Sepulveda and their then minor
children. It was pointed out that the private respondent failed to implead Paz
10
Sepulveda and her minor children as parties-defendants in the complaint.
It was further claimed that Pedro Sepulveda, Sr. declared the property covered
by T.D. No. 18199 under his name for taxation purposes since the beginning of
11
1948. It was likewise alleged that the eleven (11) parcels of land deeded to Dulce
12
under the Project of Partition had been declared for taxation purposes under the
name of Pedro Sepulveda since
_______________
1974, and that he and his heirs paid the realty taxes thereon.
13
On June 7, 1993, the trial court rendered judgment in favor of the private
14
respondent. The fallo of the decision reads:
“WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and
against the defendant by declaring that the plaintiff is legally and rightfully entitled to the
one half (1/2) portion of the two (2) parcels of land described in paragraph 2 of the
Complaint and to the one third (1/3) portion of the nine (9) parcels of land described in
paragraph 3 of the complaint as co-owner thereof, and ordering the partition and
segregation of the said one half (1/2) portion of the said two (2) parcels of land and of the
said one third (1/3) portion of the nine (9) parcels of land, and in the partition thereof, the
mechanics of partition outlined in Rule 69 of the Revised Rules of Court must be followed
(Magallon vs. Montejo, 146 SCRA 282); ordering the defendant Socorro Lawas, as
administratrix of the Estate of Pedro Sepulveda, Sr., to deliver to plaintiff the latter’s one
third (1/3) share of the P7,492.00 representing the purchase price of the parcel of land sold
to Danao City with interest of twelve [per] centum (12%) per annum (Reformina vs.
Tomol, 139 SCRA 260) from the date of filing of the Complaint until the amount due to
plaintiff is fully paid, to pay attorney’s fees to plaintiff’s attorney in the sum of P10,000.00,
and to pay the costs. The counterclaim is hereby dismissed.
SO ORDERED.”
15
The trial court ruled that the private respondent’s action for reconveyance based
on constructive trust had not yet prescribed when the complaint was filed; that he
was entitled to a share in the proceeds of the sale of the property to Danao City;
and that the partition of the subject property among the adjudicatees thereof was
in order.
_______________
13 Exhibits “17” to “27”.
 Penned by Judge Jose P. Soberano, Jr.
14
Records, p. 481.
15
310
310 SUPREME COURT REPORTS ANNOTATED
Sepulveda, Sr. vs. Pelaez
The petitioner appealed the decision to the CA, which rendered judgment on
January 31, 2002, affirming the appealed decision with modification.
The petitioner now comes to the Court via a petition for review on certiorari,
contending that the appellate court erred as follows:
1. 1.THE COURT OF APPEALS ERRED IN THE INCORRECT APPLICATION OF
ART. 494 OF THE CIVIL CODE AND IN UPHOLDING THE REGIONAL TRIAL
COURT’S FINDING THAT A TRUST RELATIONSHIP WAS CREATED
BETWEEN HEREIN RESPONDENT AND PEDRO SEPULVEDA, [SR.].
2. 2.THE COURT OF APPEALS ERRED IN NOT APPLYING THE LAWS ON
PRESCRIPTION AND LACHES TO THE FACTS AS PROVEN IN THE CASE
AGAINST HEREIN RESPONDENT.
3. 3.THE COURT OF APPEALS ERRED IN UPHOLDING THE FINDING OF THE
REGIONAL TRIAL COURT, BRANCH 25 IN DANAO CITY THAT PAYMENT
WAS MADE BY DANAO CITY FOR ONE (1) OF THE ELEVEN (11) PARCELS
INVOLVED IN THE CASE AND OF WHICH HEREIN RESPONDENT
SHOULD BE PAID BY PETITIONER ONE THIRD (1/3) OF THE PURCHASE
PRICE.
4. 4.THE COURT OF APPEALS ERRED IN AWARDING MORAL AND
EXEMPLARY DAMAGES AND A SHARE IN THE RENTS AND PROFITS OF
THE ELEVEN (11) PARCELS TO HEREIN RESPONDENT.
5. 5.THE COURT OF APPEALS ERRED IN UPHOLDING THE REGIONAL TRIAL
COURT’S FINDING THAT ATTORNEY’S FEES ARE TO BE AWARDED AND
EVEN INCREASING THE AMOUNT THEREOF. 16
The petition is granted for the sole reason that the respondent failed to implead as
parties, all the indispensable parties in his complaint.
_______________
Rollo, p. 24.
16
311
VOL. 450, JANUARY 31, 2005 311
Sepulveda, Sr. vs. Pelaez
As gleaned from the material averments of the complaint and the reliefs prayed
for therein, the private respondent, as plaintiff therein, sought the recovery of the
ownership and possession of the ten (10) parcels of land and the partition thereof;
and for the payment of his share in the proceeds of the sale of the property which
Pedro Sepulveda, Sr. sold to Danao City amounting to P7,492.00, which Pedro
Sepulveda, Sr. claimed was left unpaid. It appears that when the private
respondent filed the complaint, his father, Rodolfo Pelaez, was still alive. Thus,
when his mother Dulce Pelaez died in-testate on March 2, 1944, she was survived
by her husband Rodolfo and their son, the private respondent. Under Article 996
of the New Civil Code, Rodolfo Pelaez, as surviving spouse, is entitled to a portion
17
in usufruct equal to that corresponding by way of legitime to each of the legitimate
children who has not received any betterment. The rights of the usufructuary are
provided in Articles 471 to 490 of the old Civil Code. In Gamis v. Court of 18
Appeals, we held that:
19
Under articles 807 and 834 of the old Civil Code the surviving spouse is a forced heir and
entitled to a share in usufruct in the
_______________
17 Art. 834. A widower or widow who, on the death of his or her spouse, is not divorced, or should be so by the
fault of the deceased, shall be entitled to a portion in usufruct equal to that corresponding by way of legitime to
each of the legitimate children or descendants who has not received any betterment.
If only one legitimate child or descendant survives, the widower or widow shall have the usufruct of the third
available for betterment, such child or descendant to have the naked ownership until, on the death of the
surviving spouse, the whole title is merged in him.
If the spouses should be separated by a suit for divorce, the result of the suit shall be awaited.
If there should have been a pardon or a reconciliation between the divorced spouses, the survivor shall
preserve his or her rights.
18 Now Articles 566 to 582 of the New Civil Code.
19 105 Phil. 768 (1959).
312
estate of the deceased spouse equal to that which by way of legitime corresponds or belongs
to each of the legitimate children or descendants who have not been bettered or have not
received any share in the one-third share destined for betterment. The right of the
surviving spouse to have a share in usufruct in the estate of the deceased spouse is
provided by law of which such spouse cannot be deprived and which cannot be ignored. Of
course, the spouse may waive it but the waiver must be express.
Section 1, Rule 69 of the Rules of Court provides that in an action for partition, all
persons interested in the property shall be joined as defendants.
Section 1. Complaint in action for partition of real estate.—A person having the right to
compel the partition of real estate may do so as in this rule prescribed, setting forth in his
complaint the nature and extent of his title and an adequate description of the real estate
of which partition is demanded and joining as defendants all the other persons interested
in the property.
Thus, all the co-heirs and persons having an interest in the property are
indispensable parties; as such, an action for partition will not lie without the
joinder of the said parties. The mere fact that Pedro Sepulveda, Sr. has repudiated
20
the co-ownership between him and the respondent does not deprive the trial court
of jurisdiction to take cognizance of the action for partition, for, in a complaint for
partition, the plaintiff seeks, first, a declaration that he is a co-owner of the subject
property; and, second, the conveyance of his lawful shares. As the Court ruled
21
in De Mesa v. Court of Appeals: 22
The first stage of an action for judicial partition and/or accounting is concerned with the
determination of whether or not a co-ownership in fact exists and a partition is proper,
that is, it is not otherwise legally proscribed and may be made by voluntary agreement of
all the parties interested in the property. This phase may
_______________
end in a declaration that plaintiff is not entitled to the desired partition either because a
co-ownership does not exist or a partition is legally prohibited. It may also end, on the
other hand, with an adjudgment that a co-ownership does in truth exist, that partition is
proper in the premises, and that an accounting of rents and profits received by the
defendant from the real estate in question is in order. In the latter case, “the parties may,
if they are able to agree, make partition among themselves by proper instruments of
conveyance, and the court shall confirm the partition so agreed upon by all the parties.” In
either case, whether the action is dismissed or partition and/or accounting is decreed, the
order is a final one and may be appealed by any party aggrieved thereby.
The second stage commences when the parties are unable to agree upon the partition
ordered by the court. In that event, partition shall be effected for the parties by the court
with the assistance of not more than three (3) commissioners. This second phase may also
deal with the rendition of the accounting itself and its approval by the Court after the
parties have been accorded the opportunity to be heard thereon, and an award for the
recovery by the party or parties thereto entitled of their just shares in the rents and profits
of the real estate in question . . .
23
In the present action, the private respondent, as the plaintiff in the trial court,
failed to implead the following indispensable parties: his father, Rodolfo Pelaez;
the heirs of Santiago Sepulveda, namely, Paz Sepulveda and their children; and
the City of Danao which purchased the property covered by T.D. 19804 (T.D. No.
35090) from Pedro Sepulveda, Sr. and maintained that it had failed to pay for the
purchase price of the property.
Rodolfo Pelaez is an indispensable party he being entitled to a share in
usufruct, equal to the share of the respondent in the subject properties. There is
no showing that Rodolfo Pelaez had waived his right to usufruct.
Section 7, Rule 3 of the Rules of Court reads:
_______________
Id., at p. 780.
23
314
SEC. 7. Compulsory joinder of indispensable parties.—Parties in interest without whom
no final determination can be had of an action shall be joined either as plaintiffs or
defendants.
Indeed, the presence of all indispensable parties is a condition sine qua non for the
exercise of judicial power. It is precisely when an indispensable party is not before
the court that the action should be dismissed. Thus, the plaintiff is mandated to
implead all the indispensable parties, considering that the absence of one such
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. One 24
who is not a party to a case is not bound by any decision of the court, otherwise,
he will be deprived of his right to due process. Without the presence of all the other
heirs as plaintiffs, the trial court could not validly render judgment and grant
relief in favor of the private respondent. The failure of the private respondent to
implead the other heirs as parties-plaintiffs constituted a legal obstacle to the trial
court and the appellate court’s exercise of judicial power over the said case, and
rendered any orders or judgments rendered therein a nullity. 25
To reiterate, 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. Hence, the trial court should have
26
ordered the dismissal of the complaint. 27
_______________
24See Borlasa v. Polistico, 47 Phil. 345 (1925); People, et al. v. Hon. Rodriguez, et al., 106 Phil.
325 (1959); Lim Tanhu v. Ramolete, 66 SCRA 425 (1975); Director of Lands v. Court of Appeals, 93
SCRA 238 (1979); Alabang Development Corporation v. Valenzuela, 116 SCRA 261 (1982); Arcelona
v. Court of Appeals, 280 SCRA 20 (1997); Metropolitan Waterworks and Sewerage System v. Court of
Appeals, 297 SCRA 287(1998).
25Lozano v. Ballesteros, 195 SCRA 681 (1991).
26Arcelona v. Court of Appeals, supra.
27Ibid.
315
VOL. 450, JANUARY 31, 2005 315
Borbajo vs. Hidden View Homeowners, Inc.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decisions
of the Court of Appeals in CA-G.R. CV No. 43758 and of the Regional Trial Court
are SET ASIDE. The Regional Trial Court is ORDERED to dismiss the complaint
without prejudice. No pronouncement as to costs.
SO ORDERED.
Puno (Chairman), Austria-Martinez, Tinga and Chico-Nazario, JJ., concur.
Petition granted, assailed decisions of the Court of Appeals and the trial court
set aside.
 G.R. No. 114151. September 17, 1998. * deny the fact of the execution of the deed of extrajudicial settlement of the estate. She only
MAURICIA ALEJANDRINO, petitioner, vs. THE HONORABLE COURT OF
APPEALS, HON. BENIGNO G. GAVIOLA, RTC-9, CEBU CITY, and LICERIO P.
NIQUE, respondents.
Ownership; Co-Ownership; Partition; Succession; Where there are two or more heirs,
the whole estate of the decedent is, before partition, owned in common by such heirs, subject
to the payment of the debts of the deceased, and each co-owner 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 co-owners.—Article 1078 of the Civil Code provides that where
there are two or more heirs, the whole estate of the decedent is, before partition,
_______________
*THIRD DIVISION.
537
VOL. 295, SEPTEMBER 17, 1998 537
Alejandrino vs. Court of Appeals
owned in common by such heirs, subject to the payment of the debts of the deceased.
Under a co-ownership, the ownership of an undivided thing or right belongs to different
persons. Each co-owner of property which is 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 co-owners. The underlying rationale is that until a division
is made, the respective share of each cannot be determined and every co-owner exercises,
together with his co-participants, joint ownership over the pro indiviso property, in
addition to his use and enjoyment of the same.
Same; Same; Same; Same; Partition of the estate of a decedent may only be effected by
(1) the heirs themselves extrajudicially, (2) by the court in an ordinary action for partition,
or in the course of administration proceedings, (3) by the testator himself, and (4) by the
third person designated by the testator.—The legality of Laurencia’s alienation of portions
of the estate of the Alejandrino spouses was settled in Civil Case No. CEB-7038. The
decision in that case had become final and executory with Laurencia’s withdrawal of her
appeal. When private respondent filed a motion for the segregation of the portions of the
property that were adjudged in his favor, private respondent was in effect calling for
the partition of the property. However, under the law, partition of the estate of a decedent
may only be effected by (1) the heirs themselves extrajudicially, (2) by the court in an
ordinary action for partition, or in the course of administration proceedings, (3) by the
testator himself, and (4) by the third person designated by the testator.
Same; Same; Same; Same; Actions; Quieting of Title; Partition of an estate may not be
ordered in an action for quieting of title.—The trial court may not, therefore, order partition
of an estate in an action for quieting of title. As there is no pending administration
proceedings, the property of the Alejandrino spouses can only be partitioned by the heirs
themselves in an extrajudicial settlement of estate. However, evidence on the extrajudicial
settlement of estate was offered before the trial court and it became the basis for the order
for segregation of the property sold to private respondent. Petitioner Mauricia does not
questions its validity on account of the absence of notarization of the document and the
non-publication thereof.
538
538 SUPREME COURT REPORTS ANNOTATED
Alejandrino vs. Court of Appeals
Same; Same; Same; Same; Notarization; Extrajudicial Settlements; Notarization of a
deed of extrajudicial settlement has the effect of making it a public document that can bind
third parties; By the provision of Art. 1082 of the Civil Code, it appears that when a co-
owner sells his inchoate right in the co-ownership, he expresses his intention to “put an end
to indivision among (his) co-heirs.”—Notarization of the deed of extrajudicial settlement
has the effect of making it a public document that can bind third parties. However, this
formal requirement appears to be superseded by the substantive provision of the Civil Code
that states: “ART. 1082. Every act which is intended to put an end to indivision among co-
heirs and legatees or devisees is deemed to be a partition, although it should purport to be
a sale, an exchange, a compromise, or any other transaction.” By this provision, it appears
that when a co-owner sells his inchoate right in the co-ownership, he expresses his
intention to “put an end to indivision among (his) co-heirs.” Partition among co-owners
may thus be evidenced by the overt act of a co-owner of renouncing his right over the
property regardless of the form it takes. In effect, Laurencia expressed her intention to
terminate the co-ownership by selling her share to private respondent.
Same; Same; Same; Same; Same; Same; The partition of inherited property need not
be embodied in a public document.—The execution of the deed of extrajudicial settlement
of the estate reflected the intention of both Laurencia and petitioner Mauricia to physically
divide the property. Both of them had acquired the shares of their brothers and therefore
it was only the two of them that needed to settle the estate. The fact that the document
was not notarized is no hindrance to its effectivity as regards the two of them. The partition
of inherited property need not be embodied in a public document. In this regard, Tolentino
subscribes to that opinion when he states as follows: “x x x. We believe, however, that the
public instrument is not essential to the validity of the partition. This is not one of those
contracts in which form is of the essence. The public instrument is necessary only for the
registration of the contract, but not for its validity.
Same; Same; Same; Same; Same; Same; The fact that a deed of extrajudicial
settlement was not notarized is immaterial where the heir questioning it admits having
executed it.—The deed of extrajudicial settlement executed by Mauricia and Laurencia
evidence their intention to partition the property. It delineates what portion of the
539
VOL. 295, SEPTEMBER 17, 1998 539
Alejandrino vs. Court of Appeals
property belongs to each other. That it was not notarized is immaterial in view of
Mauricia’s admission that she did execute the deed of extrajudicial settlement. Neither is
the fact that the trial court only mentioned the existence of such document in its decision
in Civil Case No. CEB-7028. That document was formally offered in evidence and the court
is deemed to have duly considered it in deciding the case. The court has in its favor the
presumption of regularity of the performance of its task that has not been rebutted by
petitioner Mauricia.
Same; Same; Same; Same; Same; Same; Where two co-heirs acquired the shares of
their co-heirs, only the two need to participate in the extrajudicial settlement of estate.—
Neither may the fact that the other heirs of the Alejandrino spouses, named Marcelino,
Gregorio, Ciriaco and Abundio did not participate in the extrajudicial settlement of estate
affect its validity. In her amended complaint in Civil Case No. CEB-11673, petitioner
Mauricia herself admitted having acquired by purchase the rights over the shares of her
brothers.
Courts; Judgments; A court may issue an order clarifying its decision that had become
final and executory in order that the execution thereof will not be rendered futile.—The trial
court, therefore, did not abuse its discretion in issuing the order for the segregation of the
property. In so doing, it was merely reiterating the partition of the property by petitioner
Mauricia and her sister Laurencia that was embodied in the deed of extrajudicial
settlement of estate. The order may likewise be deemed as a clarification of its decision
that had become final and executory. Such clarification was needed lest proper execution
of the decision be rendered futile.
Same; Same; Forum Shopping; Pleadings and Practice; Res
Judicata; Elements; Forum shopping exists where the elements of litis pendentia are present
or where a final judgment in one case will amount to res judicata in the other.—The Court
finds no merit in the issue of forum shopping raised by private respondent. Forum
shopping exists where the elements of litis pendentia are present or where a final judgment
in one case will amount to res judicata in the other. Because the judgment in Civil Case
No. CEB-7028 is already final and executory, the existence of res judicata is determinative
of whether or not petitioner is guilty of forum shopping. For the principle of res judicata to
apply, the following must be present: (1) a decision on the merits; (2) by a court of
competent jurisdiction; (3)
540
540 SUPREME COURT REPORTS ANNOTATED
Alejandrino vs. Court of Appeals
the decision is final; and (4) the two actions involve identical parties, subject matter
and causes of action. The fourth element is not present in this case. The parties are not
identical because petitioner was not impleaded in Civil Case No. CEB-7028. While the
subject matter may be the same property of the Alejandrino spouses, the causes of action
are different. Civil Case No. CEB-7028 is an action for quieting of title and damages while
Civil Case No. CEB-11673 is for redemption and recovery of properties.
Same; Same; Same; Same; Attorneys; A charge of forum shopping may not be anchored
simply on the fact that the counsel for different plaintiffs in two cases is one and the same.—
It appears moreover, that private respondent’s argument on forum shopping is anchored
on the fact that counsel for both plaintiffs in those two cases is one and the same, thereby
implying that the same counsel merely wanted to prevail in the second case after having
failed to do so in the first. The records show, however, that Laurencia executed an affidavit
consenting to the appearance of her counsel in any case that petitioner Mauricia might file
against private respondent. She affirmed in that affidavit that she could be included even
as a defendant in any case that petitioner Mauricia would file because she “fully agree(d)”
with whatever cause of action Mauricia would have against private respondent. Such a
statement can hardly constitute a proper basis for a finding of forum shopping, much less
evidence of misconduct on the part of counsel. As noted earlier, the two cases have different
causes of action and the two plaintiffs who would have conflicting claims under the facts
of the case actually presented a united stand against private respondent. If there is any
charge that could be leveled against counsel, it is his lack of thoroughness in pursuing the
action for quieting of title. As counsel for plaintiff therein, he could have impleaded
petitioner Mauricia knowing fully well her interest in the property involved in order to
avoid multiplicity of suits. However, such an omission is not a sufficient ground for
administrative sanction.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Sitoy, Go & Associates for petitioner.
Reuben B. Baldoza for private respondent.
541
VOL. 295, SEPTEMBER 17, 1998 541
Alejandrino vs. Court of Appeals
ROMERO, J.:
Questioned in this petition for review on certiorari is the Decision of the Court of
1
Appeals which ruled that the trial court, in an action for quieting of title, did not
act in excess of jurisdiction when it issued an order for the segregation of property,
after the finality of its decision.
The facts show that the late spouses Jacinto Alejandrino and Enrica Labunos
left their six children named Marcelino, Gregorio, Ciriaco, Mauricia, Laurencia
and Abundio a 219-square-meter lot in Mambaling, Cebu City identified as Lot
No. 2798 and covered by Transfer Certificate of Title No. 19658. Upon the demise
of the Alejandrino spouses, the property should have been divided among their
children with each child having a share of 36.50 square meters. However, the
estate of the Alejandrino spouses was not settled in accordance with the procedure
outlined in the Rules of Court.
Petitioner Mauricia (one of the children) allegedly purchased 12.17 square
meters of Gregorio’s share, 36.50 square meters of Ciriaco’s share and 12.17 square
meters of Abundio’s share thereby giving her a total area of 97.43 square meters,
including her own share of 36.50 square me-ters. It turned out, however, that a
third party named Licerio Nique, the private respondent in this case, also
purchased portions of the property, to wit: 36.50 square meters from
Laurencia, 36.50 square meters from Gregorio “through Laurencia,” 12.17 square
meters from Abundio also “through Laurencia” and 36.50 square meters from
Marcelino or a total area of 121.67 square meters of the Alejandrino property.
However, Laurencia (the alleged seller of most of the 121.67 square meters of
the property) later questioned the sale in an action for quieting of title and
damages against private respondent Nique. It was docketed as Civil Case No.
_______________
1Penned by Associate Justice Ma. Alicia Austria-Martinez and concurred in by Associate Justices
Santiago M. Kapunan and Alfredo L. Benipayo.
2Rollo, pp. 54-55.
542
542 SUPREME COURT REPORTS ANNOTATED
Alejandrino vs. Court of Appeals
CEB-7038 in the Regional Trial Court of Cebu City, Branch 9, presided by Judge
Benigno G. Gaviola. In due course, the lower court rendered a decision on
November 27, 1990 disposing of the case as follows:
“WHEREFORE, the Court hereby renders judgment in favor of defendant and against
plaintiff, dismissing the complaint filed by plaintiff against defendant, and on the
Counterclaim and prayer of defendant in its Answer, the Court hereby declares defendant
as the owner in fee simple of the share of plaintiff Laurencia Alejandrino and the shares
of Marcelino, Gregorio and Abundio, all surnamed Alejandrino, of the parcel of land known
as Lot No. 2798 and covered by Transfer Certificate of Title No. 19658 which 4 shares
totals an area of 146 square meters more or less; and the Court further Orders plaintiff to:
1. 1.Vacate the premises subject of the complaint and surrender the property to
defendant to the extent of the 4 shares aforementioned;
2. 2.Pay the defendant the amount of P15,000.00 as litigation and necessary
expenses; the sum of P10,000.00 as reimbursement for attorney’s fees; the sum of
P10,000.00 as moral damages and P10,000.00 as exemplary damages;
3. 3.Plus costs.
SO ORDERED.” 3
Laurencia appealed the decision to the Court of Appeals under CA-G.R. CV No.
33433 but later withdrew the same. On April 13, 1992, the Court of Appeals
4
considered the appeal withdrawn in accordance with Rule 50 of the Rules of Court.
Meanwhile, herein petitioner Mauricia Alejandrino filed on May 5, 1992 before
the Regional Trial Court of Cebu City, Branch VII, a complaint for redemption and
recovery of properties with damages against private respondent Nique that was
docketed as Civil Case No. CEB-11673. Adelino B. Sitoy,
_______________
3Ibid., p. 25.
2
4Ibid., p. 50.
5Ibid., p. 51.
543
VOL. 295, SEPTEMBER 17, 1998 543
Alejandrino vs. Court of Appeals
Laurencia’s counsel in Civil Case No. CEB-7038, filed Civil Case No. CEB-
11673 for petitioner Mauricia.
The amended complaint in the latter case dated May 17, 1992 alleged that
private respondent Nique never notified petitioner Mauricia of the purchase of
121.67 square meters of the undivided Lot No. 2798 nor did he give petitioner
Mauricia the preemptive right to buy the area as a co-owner of the same lot. As
such co-owner, petitioner Mauricia manifested her willingness to deposit with the
court the amount of P29,777.78, the acquisition cost of the portion purchased by
private respondent Nique. Petitioner Mauricia also alleged that she demanded
from private respondent the area of around 24.34 square meters that the latter
had “unduly, baselessly and maliciously claimed as his own but which, as part of
Lot No. 2798, actually belongs to her.” The amended complaint prayed that
petitioner Mauricia be allowed to redeem the area of 121.67 square meters under
the redemption price of P29,777.78 and that private respondent Nique be ordered
to execute the necessary documents for the redemption and the eventual transfer
of certificate of title to her. The amended complaint further prayed for the return
to petitioner Mauricia of the 24.34-square-meter portion of the lot and for damages
amounting to P115,000 and attorney’s fees of P30,000.
On August 2, 1993, the lower court granted the motion to admit the amended
complaint and forthwith ordered the defendant therein to file an amended answer.
In Civil Case No. CEB-7038 in the meantime, private respondent filed a motion
for the segregation of the 146-square-meter portion of the property that had been
declared by the trial court as his own by virtue of purchase. On May 6, 1993, the
trial court issued an order the pertinent portions of which read as follows:
“O R D E R
For resolution is a ‘Motion to Order Segregation of 146 Square Meters In Lot No. 2798’
5
dated January 15, 1993 filed by defendant and the ‘Opposition’ thereto dated February 2,
1992 by plaintiff.
544
544 SUPREME COURT REPORTS ANNOTATED
Alejandrino vs. Court of Appeals
Movant-defendant also filed a rejoinder dated February 15, 1993 to the Opposition.
 After going over the allegations in the motion, the opposition thereto and the rejoinder
as well as the records of the case, particularly the decision rendered by this Court and the
Order dated October 28, 1992, denying the motion for reconsideration filed by plaintiffs
and allowing the issuance of a writ of execution, the Court is inclined to Grant the instant
motion.
xxx xxx xxx xxx
In addition thereto, the Court makes the following observation:
1. 1.Plaintiff (oppositor) has a total share of 146 square meters. This is admitted by
her in her complaint (par. 4 thereof). In the decision rendered by this Court, this
share now belongs to defendant movant by way of sale. The decision of this Court
has long become final.
2. 2.The total area of the land is 219 sq. meters (par. 2 of complaint), thus, the share
of Mauricia Alejandrino is only 73 square meters.
3. 3.As early as June 10, 1983, Mauricia Alejandrino and Laurencia Alejandrino had
entered into an ‘Extrajudicial Settlement of Estate’ whereby they agreed to divide
the land subject of this case with Laurencia Alejandrino owning 146 square
meters in the frontage and Mauricia Alejandrino owning 75 square meters in the
back portion (Exh. ‘16,’ Extrajudicial Settlement of Estate, par. 1) (italics
supplied), and that the parties assure each other and their successor in interest
that a right of way of two meters is granted to each party by the other
permanently (Exh. ‘16,’ par. 2). This partition is signed by the parties and their
witnesses. Although not notarized, it is certainly valid as between the parties,
Maurecia (sic) Alejandrino, being an immediate party, may not renege on this.
4. 4.Since the share of defendant Licerio P. Nique is specifically known to be 146
square meters, and that its location shall be on the ‘frontage’ of the property while
the 73 square meters of Maurecia (sic) Alejandrino shall be at the back portion,
then, the Court cannot see its way clear, why the 146 sq. meters share of
defendant may not be segregated.
5. 5.The contention by oppositor that the ‘segregation of defendant’s share of 146 sq.
meters from Lot No. 2798 was not
545
VOL. 295, SEPTEMBER 17, 1998 545
Alejandrino vs. Court of Appeals
1. decreed in the judgment’ is a rather narrow way of looking at the judgment.
Paragraph 1 of the dispositive portion of the judgment by this Court, Orders
plaintiff to ‘vacate the premises subject of the complaint and surrender the
property to defendant to the extent of the 4 shares aforementioned.’ The 4 shares
of Laurencia Alejandrino of 146 sq. meters can be segregated because Laurencia
and Maurecia had already executed an extrajudicial partition indicating where
their respective shares shall be located (Exh. ‘16’). To deny the segregation is to
make the decision of this Court just about valueless is not altogether useless. The
matter of allowing the segregation should be read into the decision.
The bottomline is still that plaintiff Laurencia, despite the fact that the decision of this
Court had long become final; and despite the fact that she even withdraw (sic) her appeal,
she still is enjoying the fruits of the property to the exclusion of the rightful owner.
WHEREFORE, the Court hereby Grants the motion. The defendant Licerio Nique may
proceed to segregate his 2146 (sic) sq. meters from Lot No. 2798 covered by TCT No. 19658,
by having the same surveyed by a competent Geodetic Engineer, at the expense of movant-
defendant.
SO ORDERED.” 6
Petitioner Mauricia questioned this order of the lower court in a petition for
certiorari and prohibition with prayer for the issuance of a writ of preliminary
injunction filed before the Court of Appeals. In due course, the Court of Appeals
dismissed the petition in a Decision promulgated on August 25, 1993.
The Court of Appeals stated that, in issuing the questioned order of May 6,
1993, the respondent court was merely performing its job of seeing to it that
“execution of a final judgment must conform to that decreed in the dispositive part
of the decision.” It ratiocinated thus:
“x x x. In ordering the segregation of the 146 square meters, respondent Judge correctly
referred to the text of the decision to
_______________
6 Ibid., pp. 11-12, 25-27.
546
546 SUPREME COURT REPORTS ANNOTATED
Alejandrino vs. Court of Appeals
ascertain which portion of the land covered by TCT No. 19658 was actually sold by
Laurencia Alejandrino (sister of herein petitioner Mauricia) to private respondent Nique.
The respondent Judge did not err in relying upon Exhibit ‘16,’ the Deed of Extrajudicial
Settlement, dated June 10, 1983, mentioned in page 3 of the Decision. Pertinent portion of
Exhibit ‘16’ reads:
‘NOW, THEREFORE, the above-named parties-heirs hereby stipulates (sic), declare and agree as
follows:
1. ‘1.That the parties have agreed to divide the parcel of land with Laurencia Alejandrino
owning 146 square meters in the frontageand Mauricia Alejandrino 73 square meters in
the back portions;
2. ‘2.That the parties mutually and reciprocally assure each other and their successor of
interest (sic) that a right of way of two meters is granted to each party to the other perma-
nently.’ (italics supplied, Annex ‘1,’ Comment, p. 65, Rollo)
 duly signed by herein petitioner and witnessed by private respondent Nique. It readily
reveals that when Laurencia subsequently sold her shares to herein private respondent,
per the Deed of Absolute Sale dated October 29, 1986 (Exhs. ‘B’ and ‘10’), the parties must
have referred to the 146 square meters in the frontage described in said document, Exhibit
‘16.’ Laurencia had no authority to sell more, or, less, than that agreed upon in the
extrajudicial settlement between her and herein petitioner Mauricia. Insofar as the latter
is concerned, she is estopped from claiming that said extrajudicial settlement was a fatally
defective instrument because it was not notarized nor published. What is important is that
private respondent personally knew about Laurencia and Mauricia’s agreement because
he was a witness to said agreement and he relied upon it when he purchased the 146
square meters from Laurencia.
It cannot be validly claimed by petitioner that she was deprived of her property without
due process of law considering that private respondent is merely segregating the portion
of the land actually sold to him by Laurencia Alejandrino and it does not affect the 73
square meters that properly pertain to petitioner.
Moreover, the Supreme Court has ruled that where there is ambiguity caused by an
omission or mistake in the dispositive portion of a decision the court may clarify such
ambiguity by an amendment even after the judgment had become final, and for this
purpose it may resort to the pleadings filed by the parties, the
547
VOL. 295, SEPTEMBER 17, 1998 547
Alejandrino vs. Court of Appeals
court’s finding of facts and conclusions of law as expressed in the body of the decision
(Republic Surety and Insurance Co., Inc., et al. versus Intermediate Appellate Court, et
al., 152 SCRA 309). The assailed order, in effect, clarifies the exact location of the 146
square meters pursuant to Exhibit ‘16.’ Respondent court did not act in excess of its
jurisdiction. Hence, writs of certiorari and prohibition do not lie in this case.”
7
Petitioner Mauricia filed a motion for the reconsideration of the Court of Appeals’
decision. However, on February 15, 1994, the Court of Appeals denied the same
for lack of merit “there being no new ground or compelling reason that justifies a
reconsideration” of its Decision.
8
In the instant petition for review on certiorari, petitioner assails the decision of
the Court of Appeals, contending that the lower court acted beyond its jurisdiction
in ordering the segregation of the property bought by private respondent as the
same was not decreed in its judgment, which had long become final and executory.
Petitioner argues that partition of the property cannot be effected because private
respondent is also a defendant in Civil Case No. CEB-11673. She asserts that
Exhibit 16, the extrajudicial settlement of estate referred to in the questioned
order of the lower court, was not discussed in the decision of the lower court and
even if it were, she could not be bound thereby considering that she was not a party
litigant in Civil Case No. CEB-7038. She questions the validity of the deed of
extrajudicial settlement because it was not notarized or published.
In his comment on the petition, private respondent alleges that although
petitioner was not a party litigant in Civil Case No. CEB-7038, she is estopped
from questioning the decision in that case and filing the instant petition because
she had “knowledge of the existence of said case” where res judicata had set in. He
adds that the instant petition was filed in violation of Circular No. 28-91 on forum
shopping “in that the
_______________
7CA Decision, pp. 5-7.
8Rollo, p. 32.
548
548 SUPREME COURT REPORTS ANNOTATED
Alejandrino vs. Court of Appeals
Petitioner in the instant petition whose counsel is also the counsel of plaintiff-
appellant Laurencia Alejandrino in CA-G.R. CV No. x x x, had filed a civil action—
Civil Case No. CEB-11673 x x x for ‘REDEMPTION & RECOVERY OF
PROPERTIES WITH DAMAGES,’ which is presently pending before Branch 7 of
the Regional Trial Court of Cebu City.” He asserts that the lower court did not
exceed its jurisdiction and/or commit grave abuse of discretion in granting his
motion for segregation of the 146 square meters of the land involved that rightfully
belonged to him in accordance with the decision of the lower court. He charges
counsel for petitioner with exhibiting “unethical conduct and practice” in
appearing as counsel for petitioner in Civil Case No. CEB-11673 after he had
appeared for complainant Laurencia in CA-G.R. CV No. 33433 or Civil Case No.
CEB-7038. Under the circumstances of this case, the ultimate issue that needs
determination is whether or not as an heir of the Alejandrino property, Laurencia
may validly sell specific portions thereof to a third party.
Article 1078 of the Civil Code provides that where there are two or more heirs,
the whole estate of the decedent is, before partition, owned in common by such
heirs, subject to the payment of the debts of the deceased. Under a co-ownership,
the ownership of an undivided thing or right belongs to different persons. Each co-
9
owner of property which is 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 co-owners. The underlying rationale is that
until a division is made, the respective share of each cannot be determined and
every co-owner exercises, together with his co-participants, joint ownership over
the pro indiviso property, in addition to his use and enjoyment of the same. 10
_______________
 9Art. 484, Civil Code.
Aguilar v. Court of Appeals, G.R. No. 76351, October 29, 1993, 227 SCRA 472, 480.
10
549
VOL. 295, SEPTEMBER 17, 1998 549
Alejandrino vs. Court of Appeals
Although the right of an heir over the property of the decedent is inchoate as long
as the estate has not been fully settled and partitioned, the law allows a co-owner
11
to exercise rights of ownership over such inchoate right. Thus, the Civil Code
provides:
“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 allotted to him in the division upon the termination of the co-
ownership.”
With respect to properties shared in common by virtue of inheritance, alienation
of a pro indiviso portion thereof is specifically governed by Article 1088 that
provides:
“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.”
In the instant case, Laurencia was within her hereditary rights in selling her pro
indiviso share in Lot No. 2798. However, because the property had not yet been
partitioned in accordance with the Rules of Court, no particular portion of the
property could be identified as yet and delineated as the object of the sale. Thus,
interpreting Article 493 of the Civil Code providing that an alienation of a co-
owned property “shall be limited to the portion which may be allotted to (the seller)
in the division upon the termination of the co-ownership,” the Court said:
_______________
The Estate of Ruiz v. Court of Appeals, 322 Phil. 590, 603 (1996).
11
550
550 SUPREME COURT REPORTS ANNOTATED
Alejandrino vs. Court of Appeals
“x x x (p)ursuant to this law, a co-owner has the right to alienate his pro-indiviso share in
the co-owned property even without the consent of the other co-owners. Nevertheless, as a
mere part owner, he cannot alienate the shares of the other co-owners. The prohibition is
premised on the elementary rule that ‘no one can give what he does not have’ (Nemo dat
quod non habet). Thus, we held in BailonCasilao vs. Court of Appeals (G.R. No. 78178,
April 15, 1988, 160 SCRA 738, 745), viz.:
‘x x x since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-
owner without the consent of the other co-owners is not null and void. However, only the rights of
the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.
‘The proper action in cases like this is not for the nullification of the sale or for the recovery of
possession of the thing owned in common from the third person who substituted the co-owner or co-
owners who alienated their shares, but the DIVISION of the common property of the co-owners who
possessed and administered it.’ ” 12
The legality of Laurencia’s alienation of portions of the estate of the Alejandrino
spouses was settled in Civil Case No. CEB-7038. The decision in that case had
become final and executory with Laurencia’s withdrawal of her appeal. When
private respondent filed a motion for the segregation of the portions of the property
that were adjudged in his favor, private respondent was in effect calling for
the partition of the property. However, under the law, partition of the estate of a
decedent may only be effected by (1) the heirs themselves extrajudicially, (2) by
the court in an ordinary action for partition, or in the course of administration
proceedings, (3) by the testator himself, and (4) by the third person designated by
the testator. 13
The trial court may not, therefore, order partition of an estate in an action for
quieting of title. As there is no pending
_______________
Mercado v. Court of Appeals, 310 Phil. 684, 690 (1995).
12
TOLENTINO, CIVIL CODE OF THE PHILIPPINES, Vol. III, 1992 ed., p. 594.
13
551
VOL. 295, SEPTEMBER 17, 1998 551
Alejandrino vs. Court of Appeals
administration proceedings, the property of the Alejandrino spouses can only be
partitioned by the heirs themselves in an extrajudicial settlement of estate.
However, evidence on the extrajudicial settlement of estate was offered before the
trial court and it became the basis for the order for segregation of the property sold
to private respondent. Petitioner Mauricia does not deny the fact of the execution
of the deed of extrajudicial settlement of the estate. She only questions its validity
on account of the absence of notarization of the document and the non-publication
thereof.
On extrajudicial settlement of estate, Section 1 of Rule 74 of the Rules of Court
provides:
“If the decedent left no will and no debts and the heirs are all of age, or the minors are
represented by their judicial or legal representatives duly authorized for the purpose, the
parties may, without securing letters of administration, divide the estate among
themselves as they see fit by means of a public instrument filed in the office of the register
of deeds, and should they disagree, they may do so in an ordinary action for partition. x x
x.
 The fact of the extrajudicial settlement or administration shall be published in a
newspaper of general circulation in the manner provided in the next succeeding section;
but no extrajudicial settlement shall be binding upon any person who has not participated
therein or had no notice thereof.”
Notarization of the deed of extrajudicial settlement has the effect of making it a
public document that can bind third parties. However, this formal requirement
14
appears to be superseded by the substantive provision of the Civil Code that states:
“ART. 1082. Every act which is intended to put an end to in-division among co-heirs and
legatees or devisees is deemed to be a
_______________
A public document is “any instrument authorized by a notary public or a competent public official, with the
14
solemnity required by law” (MORENO, PHILIPPINE LAW DICTIONARY, 3rd ed., p. 763 citing Cacnio v.
Baens, 5 Phil. 742 (1906).
552
552 SUPREME COURT REPORTS ANNOTATED
Alejandrino vs. Court of Appeals
partition, although it should purport to be a sale, an exchange, a compromise, or any other
transaction.”
By this provision, it appears that when a co-owner sells his inchoate right in the
co-ownership, he expresses his intention to “put an end to indivision among (his)
co-heirs.” Partition among co-owners may thus be evidenced by the overt act of a
co-owner of renouncing his right over the property regardless of the form it takes.
In effect, Laurencia expressed her intention to terminate the co-ownership by
selling her share to private respondent.
Moreover, the execution of the deed of extrajudicial settlement of the estate
reflected the intention of both Laurencia and petitioner Mauricia to physically
divide the property. Both of them had acquired the shares of their brothers and
therefore it was only the two of them that needed to settle the estate. The fact that
the document was not notarized is no hindrance to its effectivity as regards the
two of them. The partition of inherited property need not be embodied in a public
document. In this regard, Tolentino subscribes to that opinion when he states as
follows:
“x x x. We believe, however, that the public instrument is not essential to the validity of
the partition. This is not one of those contracts in which form is of the essence. The public
instrument is necessary only for the registration of the contract, but not for its validity.
The validity of an oral contract among the heirs, terminating the co-ownership, has been
recognized by the Supreme Court in a decision x x x (where) that tribunal said: ‘An
agreement among the heirs that a certain lot should be sold and its proceeds paid to one of
them is a valid oral contract, and the same has the force of law between the parties from
and after the original assent thereto, and no one of them may withdraw or oppose its
execution without the consent of all.’
In a still later case, the Supreme Court held that ‘partition among heirs or renunciation
of an inheritance by some of them is not exactly a conveyance for the reason that it does
not involve transfer of property from one to the other, but rather a confirmation or
ratification of title or right to property by the heir renouncing in favor of another heir
accepting and receiving the inheritance.’
553
VOL. 295, SEPTEMBER 17, 1998 553
Alejandrino vs. Court of Appeals
Hence, the court concluded, ‘it is competent for the heirs of an estate to enter into an oral
agreement for distribution of the estate among themselves.’ ” 15
The deed of extrajudicial settlement executed by Mauricia and Laurencia evidence
their intention to partition the property. It delineates what portion of the property
belongs to each other. That it was not notarized is immaterial in view of Mauricia’s
admission that she did execute the deed of extrajudicial settlement. Neither is the
fact that the trial court only mentioned the existence of such document in its
decision in Civil Case No. CEB-7028. That document was formally offered in
evidence and the court is deemed to have duly considered it in deciding the case.
16
The court has in its favor the presumption of regularity of the performance of its
task that has not been rebutted by petitioner Mauricia. Neither may the fact that
the other heirs of the Alejandrino spouses, named Marcelino, Gregorio, Ciriaco and
Abundio did not participate in the extrajudicial settlement of estate affect its
validity. In her amended complaint in Civil Case No. CEB-11673, petitioner
Mauricia herself admitted having acquired by purchase the rights over the shares
of her brothers.
On the part of Laurencia, the court found that she had transmitted her rights
over portions she had acquired from her brothers to private respondent Nique. The
sale was made after the execution of the deed of extrajudicial settlement of the
estate that private respondent himself witnessed. The extrajudicial settlement of
estate having constituted a partition of the property, Laurencia validly transferred
ownership over the specific front portion of the property with an area of 146 square
meters.
The trial court, therefore, did not abuse its discretion in issuing the order for
the segregation of the property. In so do-
_______________
15 TOLENTINO, supra, at p. 595 citing Belen v. Belen, 49 O.G. 997 (J.B.L. Reyes, J.)
and Barcelona v. Barcelona, 53 O.G. 373 (Montemayor, J.).
16Sec. 35, Rule 132, Rules of Court.
554
554 SUPREME COURT REPORTS ANNOTATED
Alejandrino vs. Court of Appeals
ing, it was merely reiterating the partition of the property by petitioner Mauricia
and her sister Laurencia that was embodied in the deed of extrajudicial settlement
of estate. The order may likewise be deemed as a clarification of its decision that
had become final and executory. Such clarification was needed lest proper
execution of the decision be rendered futile.
The Court finds no merit in the issue of forum shopping raised by private
respondent. Forum shopping exists where the elements of litis pendentia are
present or where a final judgment in one case will amount to res judicata in the
other. Because the judgment in Civil Case No. CEB-7028is already final and
17
executory, the existence of res judicatais determinative of whether or not
petitioner is guilty of forum shopping. For the principle of res judicata to apply,
the following must be present: (1) a decision on the merits; (2) by a court of
competent jurisdiction; (3) the decision is final; and (4) the two actions involve
identical parties, subject matter and causes of action. The fourth element is not
18
causes of action and the two plaintiffs who would have conflicting claims under
the facts of the case actually presented a united stand against private respondent.
If there is any charge that could be leveled against counsel, it is his lack of
thoroughness in pursuing the action for quieting of title. As counsel for plaintiff
therein, he could have impleaded petitioner Mauricia knowing fully well her
interest in the property involved in order to avoid multiplicity of suits. However,
such an omission is not a sufficient ground for administrative sanction.
WHEREFORE, the instant petition for review on certiorari is hereby DENIED
for lack of merit. Costs against petitioner.
SO ORDERED.
Narvasa (C.J., Chairman), Kapunan and Purisima, JJ., concur.
Petition denied.

present in this case. The parties are not identical because petitioner was not
impleaded in Civil Case No. CEB-7028. While the subject matter may be the same
property of the Alejandrino spouses, the causes of action are different. Civil Case
No. CEB-7028 is an action for quieting of title and damages while Civil Case No.
CEB-11673 is for redemption and recovery of properties.
It appears moreover, that private respondent’s argument on forum shopping is
anchored on the fact that counsel for both plaintiffs in those two cases is one and
the same, thereby implying that the same counsel merely wanted to prevail in the
second case after having failed to do so in the first. The records show, however,
that Laurencia executed an affidavit consenting to the appearance of her counsel
19

in any case that

_______________

17 First Philippine International Bank v. Court of Appeals, 322 Phil. 280, 306 (1996) cited
in Fortich v. Corona, G.R. No. 131457, April 24, 1998.
18Bernardo v. NLRC, 325 Phil. 371, 384-385 (1996).
19Rollo, p. 62.
555
VOL. 295, SEPTEMBER 17, 1998 555
Alejandrino vs. Court of Appeals
petitioner Mauricia might file against private respondent. She affirmed in that
affidavit that she could be included even as a defendant in any case that petitioner
Mauricia would file because she “fully agree(d)” with whatever cause of action
Mauricia would have against private respondent. Such a statement can hardly
constitute a proper basis for a finding of forum shopping, much less evidence of
misconduct on the part of counsel. As noted earlier, the two cases have different
 G.R. No. 108538. January 22, 1996. * Same; Same; Same; Partition; An action for partition and accounting under Rule 69
LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners, vs. THE
HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA
DIMALANTA, respondents.
Actions; Summons; Jurisdiction; Parties; Pleadings and Practice; A resident
defendant in an action in personam who cannot be personally served with summons may
be summoned either by means of substituted service in accordance with Rule 14, §8 or by
publication as provided in §§17 and 18 of the same Rule.—In an action in personam,
personal service of summons or, if this is not possible and he cannot be personally served,
substituted service, as provided in Rule 14, §§7-8 is essential for the acquisition by the
court of jurisdiction over the person of a defendant who does not voluntarily submit himself
to the authority of the court. If defendant cannot be served
______________
*SECOND DIVISION.
93
VOL. 252, JANUARY 22, 1996 93
Valmonte vs. Court of Appeals
with summons because he is temporarily abroad, but otherwise he is a Philippine
resident, service of summons may, by leave of court, be made by publication. Otherwise
stated, a resident defendant in an action in personam, who cannot be personally served
with summons, may be summoned either by means of substituted service in accordance
with Rule 14, §8 or by publication as provided in §§ 17 and 18 of the same Rule.
Same; Same; Same; Same; Same; If the action is in rem or quasi in rem, jurisdiction
over the person of the defendant is not essential for giving the court jurisdiction so long as
the court acquires jurisdiction over the res.—On the other hand, if the action is in rem or
quasi in rem, jurisdiction over the person of the defendant is not essential for giving the
court jurisdiction so long as the court acquires jurisdiction over the res. If the defendant is
a nonresident and he is not found in the country, summons may be served exterritorially
in accordance with Rule 14, §17.
Same; Same; Same; Same; Same; Due Process; What gives the court jurisdiction in an
action in rem or quasi in rem is that it has jurisdiction over the res, and the service of
summons in the manner provided in §17 is not for the purpose of vesting it with jurisdiction
but for complying with the requirements of fair play or due process.—In such cases, what
gives the court jurisdiction in an action in rem or quasi in rem is that it has jurisdiction
over the res, i.e. the personal status of the plaintiff who is domiciled in the Philippines or
the property litigated or attached. Service of summons in the manner provided in §17 is
not for the purpose of vesting it with jurisdiction but for complying with the requirements
of fair play or due process, so that he will be informed of the pendency of the action against
him and the possibility that property in the Philippines belonging to him or in which he
has an interest may be subjected to a judgment in favor of the plaintiff and he can thereby
take steps to protect his interest if he is so minded.
is in the nature of an action quasi in rem.—Applying the foregoing rules to the case at bar,
private respondent’s action, which is for partition and accounting under Rule 69, is in the
nature of an action quasi in rem. Such an action is essentially for the purpose of affecting
the defendant’s interest in a specific property and not to render a judgment against him.
94
94 SUPREME COURT REPORTS ANNOTATED
Valmonte vs. Court of Appeals
Same; Same; Same; Service of summons upon a nonresident who is not found in the
Philippines must be made either (1) by personal service; (2) by publication in a newspaper
of general circulation; or (3) in any other manner which the court may deem sufficient.—As
petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines,
service of summons on her must be in accordance with Rule 14, §17. Such service, to be
effective outside the Philippines, must be made either (1) by personal service; (2) by
publication in a newspaper of general circulation in such places and for such time as the
court may order, in which case a copy of the summons and order of the court should be sent
by registered mail to the last known address of the defendant; or (3) in any other manner
which the court may deem sufficient.
Same; Same; Same; The three modes of service of summons upon a nonresident must
be made outside the Philippines, such as through the Philippine Embassy in the foreign
country where the defendant resides.—Since in the case at bar, the service of summons
upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes,
the question is whether the service on her attorney, petitioner Alfredo D. Valmonte, can
be justified under the third mode, namely, “in any . . . manner the court may deem
sufficient.” We hold it cannot. This mode of service, like the first two, must be made outside
the Philippines, such as through the Philippine Embassy in the foreign country where the
defendant resides.
Same; Same; Same; The period to file an Answer in an action against a resident
defendant differs from the period given in an action filed against a nonresident defendant
who is not found in the Philippines.—It must be noted that the period to file an Answer in
an action against a resident defendant differs from the period given in an action filed
against a nonresident defendant who is not found in the Philippines. In the former, the
period is fifteen (15) days from service of summons, while in the latter, it is at least sixty
(60) days from notice.
Same; Same; Same; Agency; Attorneys; The authority given by a wife to her husband
to negotiate cannot be construed as also including an authority to represent her in any
litigation.—In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint
her husband as her attorney-in-fact. Although she wrote private respondent’s attorney that
“all communications” intended for her
95
VOL. 252, JANUARY 22, 1996 95
Valmonte vs. Court of Appeals
should be addressed to her husband who is also her lawyer at the latter’s address in
Manila, no power of attorney to receive summons for her can be inferred therefrom. In fact
the letter was written seven months before the filing of this case below, and it appears that
it was written in connection with the negotiations between her and her sister, respondent
Rosita Dimalanta, concerning the partition of the property in question. As is usual in
negotiations of this kind, the exchange of correspondence was carried on by counsel for the
parties. But the authority given to petitioner’s husband in these negotiations certainly
cannot be construed as also including an authority to represent her in any litigation.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Alfredo D. Valmonte and Cirilo E. Doronilla for petitioners.
Balgos & Perez for private respondent.
MENDOZA, J.:
Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether in
an action for partition filed against her and her husband, who is also her attorney,
summons intended for her may be served on her husband, who has a law office in
the Philippines. The Regional Trial Court of Manila, Branch 48, said no and
refused to declare Lourdes A. Valmonte in default, but the Court of Appeals said
yes. Hence this petition for review on certiorari.
The facts of the case are as follows:
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and
wife. They are both residents of 90222 Carkeek Drive South Seattle, Washington,
U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar,
however, practices his profession in the Philippines, commuting for this purpose
between his residence in the state of
96
Washington and Manila, where he holds office at S-304 Gedisco Centre, 1564 A.
Mabini Ermita, Manila.
On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of
petitioner Lourdes A. Valmonte, filed a complaint for partition of real property and
accounting of rentals against petitioners Lourdes A. Valmonte and Alfredo D.
Valmonte before the Regional Trial Court of Manila, Branch 48. The subject of the
action is a three-door apartment located in Paco, Manila.
In her Complaint, private respondent alleged:
The plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road,
Chesterfield, Missouri, U.S.A., while the defendants are spouses, of legal age and at
present residents of 90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for
purposes of this complaint may be served with summons at Gedisco Center, Unit 304, 1564
A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as defendant Lourdes
Arreola Valmonte’s spouse holds office and where he can be found.
Apparently, the foregoing averments were made on the basis of a letter previously
sent by petitioner Lourdes A. Valmonte to private respondent’s counsel in which,
in regard to the partition of the property in question, she referred private
respondent’s counsel to her husband as the party to whom all communications
intended for her should be sent. The letter reads:
July 4, 1991
Dear Atty. Balgos:
This is in response to your letter, dated 20 June 1991, which I received on 3
July 1991. Please address all communications to my lawyer, Atty. Alfredo D.
Valmonte, whose address, telephone and fax numbers appear below.
c/o Prime Marine
Gedisco Center, Unit 304
1564 A. Mabini, Ermita
Metro Manila
97
Telephone: 521-1736
Fax: 521-2095
Service of summons was then made upon petitioner Alfredo D. Valmonte, who at
the time, was at his office in Manila. Petitioner Alfredo D. Valmonte accepted the
summons, insofar as he was concerned, but refused to accept the summons for his
wife, Lourdes A. Valmonte, on the ground that he was not authorized to accept the
process on her behalf. Accordingly the process server left without leaving a copy of
the summons and complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim.
Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason
private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte
entered a special appearance in behalf of his wife and opposed the private
respondent’s motion.
In its Order dated July 3, 1992, the trial court, denied private respondent’s
motion to declare petitioner Lourdes A. Valmonte in default. A motion for
reconsideration was similarly denied on September 23, 1992. Whereupon, private
respondent filed a petition for certiorari, prohibition and mandamus with the
Court of Appeals.
On December 29, 1992, the Court of Appeals rendered a decision granting the
petition and declaring Lourdes A. Valmonte in default. A copy of the appellate
court’s decision was received by petitioner Alfredo D. Valmonte on January 15,
1993 at his Manila office and on January 21, 1993 in Seattle, Washington. Hence,
this petition.
 The issue at bar is whether in light of the facts set forth above, petitioner
Lourdes A. Valmonte was validly served with summons. In holding that she had
been, the Court of Appeals stated: 1
______________
Per Serafin Guingona, J., with whom Santiago Kapunan (now member of the Supreme Court)
1
and Oscar Herrera, JJ. concurred.
98
98 SUPREME COURT REPORTS ANNOTATED
Valmonte vs. Court of Appeals
[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally directed the
aforementioned counsel of Dimalanta to address all communications (evidently referring
to her controversy with her sister Mrs. Dimalanta over the Paco property, now the subject
of the instant case) to her lawyer who happens also to be her husband. Such directive was
made without any qualification just as was her choice/designation of her husband Atty.
Valmonte as her lawyer likewise made without any qualification or reservation. Any
disclaimer therefore on the part of Atty. Valmonte as to his being his wife’s attorney (at
least with regard to the dispute vis-a-vis (sic) the Paco property) would appear to be feeble
or trifling, if not incredible.
This view is bolstered by Atty. Valmonte’s subsequent alleged special appearance made
on behalf of his wife. Whereas Mrs. Valmonte had manifestly authorized her husband to
serve as her lawyer relative to her dispute with her sister over the Paco property and to
receive all communications regarding the same and subsequently to appear on her behalf
by way of a so-called special appearance, she would nonetheless now insist that the same
husband would nonetheless had absolutely no authority to receive summons on her behalf.
In effect, she is asserting that representation by her lawyer (who is also her husband) as
far as the Paco property controversy is concerned, should only be made by him when such
representation would be favorable to her but not otherwise. It would obviously be
inequitable for this Court to allow private respondent Lourdes A. Valmonte to hold that
her husband has the authority to represent her when an advantage is to be obtained by
her and to deny such authority when it would turn out to be her disadvantage. If this be
allowed, Our Rules of Court, instead of being an instrument to promote justice would be
made use of to thwart or frustrate the same.
....
Turning to another point, it would not do for Us to overlook the fact that the disputed
summons was served not upon just an ordinary lawyer of private respondent Lourdes A.
Valmonte, but upon her lawyer husband. But that is not all, the same lawyer/husband
happens to be also her co-defendant in the instant case which involves real property which,
according to her lawyer/husband/co-defendant, belongs to the conjugal partnership of the
defendants (the spouses Valmonte). It is highly inconceivable and certainly it would be
contrary to human nature for the lawyer/husband/co-defendant to keep to himself the fact
that they (the spouses Valmonte) had been sued with regard to a property which
99
VOL. 252, JANUARY 22, 1996 99
Valmonte vs. Court of Appeals
he claims to be conjugal. Parenthetically, there is nothing in the records of the case before
Us regarding any manifestation by private respondent Lourdes A. Valmonte about her lack
of knowledge about the case instituted against her and her lawyer/husband/co-defendant
by her sister Rosita. . . .
PREMISES CONSIDERED, the instant petition for certiorari, prohibition and
mandamus is given due course. This Court hereby Resolves to nullify the orders of the
court a quo dated July 3, 1992 and September 23, 1992 and further declares private
respondent Lourdes Arreola Valmonte as having been properly served with summons.
Petitioners assail the aforequoted decision, alleging that the Court of Appeals
erred (1) in refusing to apply the provisions of Rule 14, §17 of the Revised Rules of
Court and applying instead Rule 14, §8 when the fact is that petitioner Lourdes A.
Valmonte is a nonresident defendant; and (2) because even if Rule 14, §8 is the
applicable provision, there was no valid substituted service as there was no strict
compliance with the requirement by leaving a copy of the summons and complaint
with petitioner Alfredo D. Valmonte. Private respondent, upon the other hand,
asserts that petitioners are invoking a technicality and that strict adherence to
the rules would only result in a useless ceremony.
We hold that there was no valid service of process on Lourdes A. Valmonte.
To provide perspective, it will be helpful to determine first the nature of the
action filed against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte by
private respondent, whether it is an action in personam, in rem or quasi in rem.
This is because the rules of service of summons embodied in Rule 14 apply
according to whether an action is one or the other of these actions.
In an action in personam, personal service of summons or, if this is not possible
and he cannot be personally served, sub-
100
stituted service, as provided in Rule 14, §§7-8 is essential for the acquisition by
2
the court of jurisdiction over the person of a defendant who does not voluntarily
submit himself to the authority of the court. If defendant cannot be served with
3
summons because he is temporarily abroad, but otherwise he is a Philippine
resident, service of summons may, by leave of court, be made by
publication. Otherwise stated, a resident defendant in an action in personam, who
4
cannot be personally served with summons, may be summoned either by means of
substituted service in accordance with Rule 14, §8 or by publication as provided in
§§ 17 and 18 of the same Rule. 5
In all of these cases, it should be noted, defendant must be a resident of the
Philippines, otherwise an action in personam cannot be brought because
jurisdiction over his person is essential to make a binding decision.
 On the other hand, if the action is in rem or quasi in rem, jurisdiction over the
person of the defendant is not essential for giving the court jurisdiction so long as
the court acquires
______________
2 Rule 14, §7 provides: “ Personal service of summons.—The sumons shall be served by handing a
copy thereof to the defendant in person, or if, he refuses to receive it, by tendering it to him.”
Rule 14, §8 provides: “Substituted service.—If the defendant cannot be served within a reasonable
time as provided in the preceding section, service may be effected (a) by leaving copies of the
summons at the defendant’s dwelling house or residence with some person of suitable age and
discretion then residing therein, or (b) by leaving the copies at defendant’s office or regular place of
business with some competent person in charge thereof.”
3 Venturanza v. Court of Appeals, 156 SCRA 305, 312 (1987), citingPantaleon v. Asuncion, 105
Phil. 761; Sequito v. Letrondo, 10 Phil. 1134.
4 Rule 14, §18 provides: “ Residents temporarily out of the Philippines.—When an action is
commenced against a defendant who ordinarily resides within the Philippines, but who is
temporarily out of it, service may, by leave of court, be effected out of the Philippines, as under the
preceding section.”
See Montalban v. Maximo, 22 SCRA 1070 (1968).
5
jurisdiction over the res. If the defendant is a nonresident and he is not found in
the country, summons may be served exterritorially in accordance with Rule 14,
§17, which provides:
§17. Extraterritorial service.—When the defendant does not reside and is not found in the
Philippines and the action affects the personal status of the plaintiff or relates to, or the
subject of which is, property within the Philippines, in which the defendant has or claims
a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or
in part, in excluding the defendant from any interest therein, or the property of the
defendant has been attached within the Philippines, service may, by leave of court, be
effected out of the Philippines by personal service as under section 7; or by publication in
a newspaper of general circulation in such places and for such time as the court may order,
in which case a copy of the summons and order to the court shall be sent by registered mail
to the last known address of the defendant, or in any other manner the court may deem
sufficient. Any order granting such leave shall specify a reasonable time, which shall not
be less than sixty (60) days after notice, within which the defendant must answer.
In such cases, what gives the court jurisdiction in an action in rem or quasi in rem
is that it has jurisdiction over the res, i.e. the personal status of the plaintiff who
is domiciled in the Philippines or the property litigated or attached. Service of
summons in the manner provided in §17 is not for the purpose of vesting it with
jurisdiction but for complying with the requirements of fair play or due process, so
that he will be informed of the pendency of the action against him and the
possibility that property in the Philippines belonging to him or in which he has an
interest may be subjected to a judgment in favor of the plaintiff and he can thereby
take steps to protect his interest if he is so minded. 6
Applying the foregoing rules to the case at bar, private respondent’s action,
which is for partition and accounting
______________
6 Banco Español-Filipino v. Palanca, 37 Phil. 921 (1918); Perkins v. Dizon, 69 Phil.
186 (1939); Sahagun v. Court of Appeals, 193 SCRA 44(1991).
102
under Rule 69, is in the nature of an action quasi in rem. Such an action is
essentially for the purpose of affecting the defendant’s interest in a specific
property and not to render a judgment against him. As explained in the leading
case of Banco Español-Filipino v. Palanca: 7
[An action quasi in rem is] an action which while not strictly speaking an action in rem
partakes of that nature and is substantially such. . . . The action quasi in rem differs from
the true action in rem in the circumstance that in the former an individual is named as
defendant and the purpose of the proceeding is to subject his interest therein to the
obligation or lien burdening the property. All proceedings having for their sole object the
sale or other disposition of the property of the defendant, whether by attachment,
foreclosure, or other form of remedy, are in a general way thus designated. The judgment
entered in these proceedings is conclusive only between the parties.
As petitioner Lourdes A. Valmonte is a nonresident who is not found in the
Philippines, service of summons on her must be in accordance with Rule 14, §17.
Such service, to be effective outside the Philippines, must be made either (1) by
personal service; (2) by publication in a newspaper of general circulation in such
places and for such time as the court may order, in which case a copy of the
summons and order of the court should be sent by registered mail to the last known
address of the defendant; or (3) in any other manner which the court may deem
sufficient.
Since in the case at bar, the service of summons upon petitioner Lourdes A.
Valmonte was not done by means of any of the first two modes, the question is
whether the service on her attorney, petitioner Alfredo D. Valmonte, can be
justified under the third mode, namely, “in any . . . manner the court may deem
sufficient.”
We hold it cannot. This mode of service, like the first two, must be made outside
the Philippines, such as through the
______________
737 Phil. 921, 928 (1918). See also Perkins v. Dizon, 69 Phil. 186, 192 (1939).
103
Philippine Embassy in the foreign country where the defendant resides. Moreover, 8
there are several reasons why the service of summons on Atty. Alfredo D.
Valmonte cannot be considered a valid service of summons on petitioner Lourdes
A. Valmonte. In the first place, service of summons on petitioner Alfredo D.
Valmonte was not made upon the order of the court as required by Rule 14, §17
and certainly was not a mode deemed sufficient by the court which in fact refused
to consider the service to be valid and on that basis declare petitioner Lourdes A.
Valmonte in default for her failure to file an answer.
In the second place, service in the attempted manner on petitioner was not
made upon prior leave of the trial court as required also in Rule 14, §17. As
provided in §19, such leave must be applied for by motion in writing, supported by
affidavit of the plaintiff or some person on his behalf and setting forth the grounds
for the application.
Finally, and most importantly, because there was no order granting such leave,
petitioner Lourdes A. Valmonte was not given ample time to file her Answer
which, according to the rules, shall be not less than sixty (60) days after notice. It
must be noted that the period to file an Answer in an action against a resident
defendant differs from the period given in an action filed against a nonresident
defendant who is not found in the Philippines. In the former, the period is fifteen
(15) days from service of summons, while in the latter, it is at least sixty (60) days
from notice.
Strict compliance with these requirements alone can assure observance of due
process. That is why in one case, although the Court considered publication in the
9
Philippines of the summons (against the contention that it should be made in the
foreign state where defendant was residing) sufficient,
______________
nonetheless the service was considered insufficient because no copy of the
summons was sent to the last known correct address in the Philippines.
Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA 458,
462-463 (1975), in which it was held that service of summons upon the defendant’s
husband was binding on her. But the ruling in that case is justified because
summons were served upon defendant’s husband in their conjugal home in Cebu
City and the wife was only temporarily absent, having gone to Dumaguete City for
a vacation. The action was for collection of a sum of money. In accordance with
Rule 14, §8, substituted service could be made on any person of sufficient
discretion in the dwelling place of the defendant, and certainly defendant’s
husband, who was there, was competent to receive the summons on her behalf. In
any event, it appears that defendant in that case submitted to the jurisdiction of
the court by instructing her husband to move for the dissolution of the writ of
attachment issued in that case.
On the other hand, in the case of Gemperle v. Schenker, it was held that service
10
on the wife of a nonresident defendant was found sufficient because the defendant
had appointed his wife as his attorney-in-fact. It was held that although defendant
Paul Schenker was a Swiss citizen and resident of Switzerland, service of
summons upon his wife Helen Schenker who was in the Philippines was sufficient
because she was her husband’s representative and attorney-in-fact in a civil case,
which he had earlier filed against William Gemperle. In fact Gemperle’s action
was for damages arising from allegedly derogatory statements contained in the
complaint filed in the first case. As this Court said, “[i]n other words, Mrs.
Schenker had authority to sue, and had actually sued, on behalf of her husband,
so that she was, also, empowered to represent him in suits filed against him,
particularly in a case, like the one at bar, which is a consequence of the
______________
125 Phil. 458 (1967).
10
105
action brought by her on his behalf.” Indeed, if instead of filing an independent
11
action Gemperle filed a counterclaim in the action brought by Mr. Schenker
against him, there would have been no doubt that the trial court could have
acquired jurisdiction over Mr. Schenker through his agent and attorney-in-fact,
Mrs. Schenker.
In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint
her husband as her attorney-in-fact. Although she wrote private respondent’s
attorney that “all communications” intended for her should be addressed to her
husband who is also her lawyer at the latter’s address in Manila, no power of
attorney to receive summons for her can be inferred therefrom. In fact the letter
was written seven month before the filing of this case below, and it appears that
it was written in connection with the negotiations between her and her sister,
respondent Rosita Dimalanta, concerning the partition of the property in question.
As is usual in negotiations of this kind, the exchange of correspondence was carried
on by counsel for the parties. But the authority given to petitioner’s husband in
these negotiations certainly cannot be construed as also including an authority to
represent her in any litigation.
For the foregoing reasons, we hold that there was no valid service on petitioner
Lourdes A. Valmonte in this case.
WHEREFORE, the decision appealed from is REVERSED and the orders dated
July 3, 1992 and September 23, 1992 of the Regional Trial Court of Manila, Branch
48 are REINSTATED.
SO ORDERED.
Regalado (Chairman), Romero and Puno, JJ.,concur.
Judgment reversed, orders of court a quo reinstated.
 G.R. No. 177703. January 28, 2008. * purpose of Article 159 is to avert the disintegration of the family unit following the death
VILMA G. ARRIOLA and ANTHONY RONALD G. ARRIOLA,
petitioners, vs. JOHN NABOR C. ARRIOLA, respondent.
Civil Procedure; Contempt; Requirements for Initiating an Indirect Contempt
Proceeding; Filing of a verified petition that has complied with the requirements for the
filing of initiatory pleading, is mandatory.—Under the aforecited second paragraph of the
Rules, the requirements for initiating an indirect contempt proceeding are a) that it be
initiated by way of a verified petition and b) that it should fully comply with the
requirements for filing initiatory pleadings for civil actions. In Regalado v. Go, 514 SCRA
616 (2007), we held: As explained by Justice Florenz Regalado, the filing of a verified
petition that has complied with the requirements for the filing of initiatory
pleading, is mandatory x x x.
Civil Law; Family Code; Family Home; One significant innovation introduced by The
Family Code is the automatic constitution of the family home from the time of its occupation
as a family residence without need anymore for the judicial or extrajudicial processes
provided under the defunct Articles 224 to 251 of the Civil Code and Rule 106 of the Rules
of Court.—One significant innovation introduced by The Family Code is the automatic
constitution of the family home from the time of its occupation as a family residence,
without
_______________
*THIRD DIVISION.
667
VOL. 542, JANUARY 28, 2008 667
Arriola vs. Arriola
need anymore for the judicial or extrajudicial processes provided under the defunct
Articles 224 to 251 of the Civil Code and Rule 106 of the Rules of Court. Furthermore,
Articles 152 and 153 specifically extend the scope of the family home not just to the
dwelling structure in which the family resides but also to the lot on which it stands. Thus,
applying these concepts, the subject house as well as the specific portion of the subject land
on which it stands are deemed constituted as a family home by the deceased and petitioner
Vilma from the moment they began occupying the same as a family residence 20 years
back.
Same; Same; Same; It being settled that the subject house (and the subject lot on which
it stands) is the family home of the deceased and his heirs, the same is shielded from
immediate partition under Article 159 of The Family Code.—It being settled that the
subject house (and the subject lot on which it stands) is the family home of the deceased
and his heirs, the same is shielded from immediate partition under Article 159 of The
Family Code, viz.: Article 159. The family home shall continue despite the death of one or
both spouses or of the unmarried head of the family for a period of ten years or for as
long as there is a minor beneficiary, and the heirs cannot partition the same unless
the court finds compelling reasons therefor. This rule shall apply regardless of
whoever owns the property or constituted the family home. (Emphasis supplied.) The
of its head. To this end, it preserves the family home as the physical symbol of family love,
security and unity by imposing the following restrictions on its partition: first, that the
heirs cannot extra-judicially partition it for a period of 10 years from the death of one or
both spouses or of the unmarried head of the family, or for a longer period, if there is still
a minor beneficiary residing therein; and second, that the heirs cannot judicially partition
it during the aforesaid periods unless the court finds compelling reasons therefor. No
compelling reason has been alleged by the parties; nor has the RTC found any compelling
reason to order the partition of the family home, either by physical segregation or
assignment to any of the heirs or through auction sale as suggested by the parties.
Same; Same; Same; Article 159 imposes the proscription against the immediate
partition of the family home regardless of its
668
668 SUPREME COURT REPORTS ANNOTATED
Arriola vs. Arriola
ownership.—Article 159 imposes the proscription against the immediate partition of
the family home regardless of its ownership. This signifies that even if the family home
has passed by succession to the co-ownership of the heirs, or has been willed to any one of
them, this fact alone cannot transform the family home into an ordinary property, much
less dispel the protection cast upon it by the law. The rights of the individual co-owner or
owner of the family home cannot subjugate the rights granted under Article 159 to the
beneficiaries of the family home.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
Oliver O. Lozano for petitioners.
Nelson A. Clemente for respondent.
AUSTRIA-MARTINEZ, J.:
Before this Court is a Petition for Review on Certiorariunder Rule 45 of the Rules
of Court, assailing the November 30, 2006 Decision and April 30, 2007
1
Resolution of the Court of Appeals in CA-G.R. SP No. 93570.
2
The relevant facts are culled from the records.
John Nabor C. Arriola (respondent) filed Special Civil Action No. 03-0010 with
the Regional Trial Court, Branch 254, Las Piñas City (RTC) against Vilma G.
Arriola and Anthony Ronald G. Arriola (petitioners) for judicial partition of the
properties of decedent Fidel Arriola (the decedent Fidel). Respondent is the son of
decedent Fidel with his first wife Victoria C. Calabia, while petitioner Anthony is
the son of decedent Fidel with his second wife, petitioner Vilma.
_______________ The RTC denied the motion in an Order dated August 30, 2005, for the reason that
9

petitioners were justified in refusing to have the subject house included in the
Penned by Associate Justice Hakim S. Abdulwahid with the concurrence of Associate Justices
auction, thus:
1

Andres B. Reyes, Jr. and Mariflor P. Punzalan-Castillo; Rollo, p. 96.

2Id., at p. 115. “The defendants [petitioners] are correct in holding that the house or improvement erected
669 on the property should not be included in the auction sale.
VOL. 542, JANUARY 28, 2008 669 A cursory reading of the aforementioned Decision and of the evidence adduced during
the ex-parte hearing clearly show that nothing was mentioned about the house existing on
Arriola vs. Arriola the land subject matter of the case. In fact, even plaintiff’s [respondent’s] initiatory
On February 16, 2004, the RTC rendered a Decision, the dispositive portion of Complaint likewise did not mention anything about the house. Undoubtedly therefore, the
which reads: Court did not include the house in its adjudication of the subject land because it was
“WHEREFORE, premises considered, judgment is hereby rendered: plaintiff himself who failed to allege the same. It is a well-settled rule that the court can
not give a relief to that which is not alleged and prayed for in the complaint.
1. 1.Ordering the partition of the parcel of land covered by Transfer Certificate of To hold, as plaintiff argued, that the house is considered accessory to the land on which
Title No. 383714 (84191) left by the decedent Fidel S. Arriola by and among his it is built is in effect to add to plaintiff’s [a] right which has never been considered or passed
heirs John Nabor C. Arriola, Vilma G. Arriola and Anthony Ronald G. Arriola in upon during the trial on the merits.
equal shares of one-third (1/3) each without prejudice to the rights of creditors or In the absence of any other declaration, obvious or otherwise, only the land should be
mortgagees thereon, if any; partitioned in accordance to [sic] the aforementioned Decision as the house can not be said
2. 2.Attorney’s fees in the amount of TEN THOUSAND (P10,000.00) PESOS is to have been necessarily adjudicated therein. Thus, plaintiff can not be declared as a co-
hereby awarded to be reimbursed by the defendants to the plaintiff; owner of the same house without evidence thereof and due hearing thereon.
3. 3.Costs against the defendants. The Decision of the Court having attained its finality, as correctly pointed out,
judgment must stand even at the risk that it might be erroneous.
SO ORDERED.” 3
WHEREFORE, the Urgent Manifestation and Motion for Contempt of Court filed by
The decision became final on March 15, 2004. 4
plaintiff is hereby DENIED for lack of merit.
SO ORDERED.”
As the parties failed to agree on how to partition among them the land covered
10

by TCT No. 383714 (subject land), respondent sought its sale through public The RTC, in its Order dated January 3, 2006, denied respondent’s Motion for
auction, and petitioners acceded to it. Accordingly, the RTC ordered the public
5
Reconsideration. 11

auction of the subject land. The public auction sale was scheduled on May 31, 2003
6

_______________
but it had to be reset when petitioners refused to include in the auction the house
(subject house) standing on the subject land. This prompted respondent to file with
7 9Supra note 5.
the RTC an Urgent Manifestation and Motion for Contempt of Court, praying that 8 Rollo, pp. 34-35.
10

petitioners be declared in contempt. Id., at p. 49.

11

671
_______________ VOL. 542, JANUARY 28, 2008 671
Arriola vs. Arriola
3Rollo, p. 28. Respondent filed with the CA a Petition for Certiorari where he sought to have the
12

4CA Decision, id., at p. 98.

5See RTC Order dated August 30, 2005, id., at p. 33. RTC Orders set aside, and prayed that he be allowed to proceed with the auction
6Id. of the subject land including the subject house.
7Id. In its November 30, 2006 Decision, the CA granted the Petition for Certiorari,
8Rollo, p. 20. to wit:
670 “WHEREFORE, the petition is GRANTED. The assailed orders dated August 30, 2005 and
670 SUPREME COURT REPORTS ANNOTATED January 3, 2006 issued by the RTC, in Civil Case No. SCA 03-0010, are REVERSED and
Arriola vs. Arriola SET ASIDE, and the sheriff is ordered to proceed with the public auction sale of
the subject lot covered by TCT No. 383714, including the house constructed
thereon.
SO ORDERED.” (Emphasis supplied.)
13
Petitioners filed a motion for reconsideration but the CA denied the same in its
Resolution of April 30, 2007.
14
Hence, the present petition on the sole ground that the CA erred in holding that
the RTC committed grave abuse of discretion in denying the motion for contempt
of court.
The assailed CA Decision and Resolution must be modified for reasons other
than those advanced by petitioners.
The contempt proceeding initiated by respondent was one for indirect contempt.
Section 4, Rule 71 of the Rules of Court prescribes the procedure for the institution
of proceedings for indirect contempt, viz.:
“Sec. 4. How proceedings commenced.—Proceedings for indirect contempt may be
initiated motu proprio by the court against which the contempt was committed by an order
or any other formal charge requiring the respondent to show cause why he should not be
punished for contempt.
_______________
Rollo, p. 51.
12
Id., at p. 105.
13
Id., at p. 115.
14
672
672 SUPREME COURT REPORTS ANNOTATED
Arriola vs. Arriola
In all other cases, charges for indirect contempt shall becommenced by a verified
petition with supporting particulars and certified true copies of documents or
papers involved therein, and upon full compliance with the requirements
for filing initiatory pleadings for civil actions in the court concerned. If the
contempt charges arose out of or are related to a principal action pending in the court, the
petition for contempt shall allege that fact but said petition shall be docketed, heard and
decided separately, unless the court in its discretion orders the consolidation of the
contempt charge and the principal action for joint hearing and decision.” (Emphases
supplied.)
Under the aforecited second paragraph of the Rules, the requirements for
initiating an indirect contempt proceeding are a) that it be initiated by way of a
verified petition and b) that it should fully comply with the requirements for filing
initiatory pleadings for civil actions. In Regalado v. Go, we held:
15
“As explained by Justice Florenz Regalado, the filing of averified petition that has
complied with the requirements for the filing of initiatory pleading, is
mandatory x x x:
This new provision clarifies with a regularity norm the proper procedure for commencing contempt
proceedings. While such proceeding has been classified as special civil action under the former Rules,
the heterogenous practice tolerated by the courts, has been for any party to file a motion without
paying any docket or lawful fees therefore and without complying with the requirements for
initiatory pleadings, which is now required in the second paragraph of this amended section.
xxxx
Henceforth, except for indirect contempt proceedings initiated motu proprio by order of or a
formal charge by the offended court, all charges shall be commenced by a verified petition with full
compliance with the requirements therefore and shall be disposed in accordance with the second
paragraph of this section.
_______________
G.R. No. 167988, February 6, 2007, 514 SCRA 616.
15
673
VOL. 542, JANUARY 28, 2008 673
Arriola vs. Arriola
xxxx
Even if the contempt proceedings stemmed from the main case over which the court
already acquired jurisdiction, the rules direct that the petition for contempt be treated
independently of the principal action. Consequently, the necessary prerequisites for the
filing of initiatory pleadings, such as the filing of a verified petition, attachment of
a certification on non-forum shopping, and the payment of the necessary docket fees, must
be faithfullyobserved.
xxxx
The provisions of the Rules are worded in very clear and categorical language. In case
where the indirect contempt charge is not initiated by the courts, the filing of a verified
petition which fulfills the requirements on initiatory pleadings is a prerequisite. Beyond
question now is the mandatory requirement of a verified petition in initiating an indirect
contempt proceeding. Truly, prior to the amendment of the 1997 Rules of Civil Procedure,
mere motion without complying with the requirements for initiatory pleadings was
tolerated by the courts. At the onset of the 1997 Revised Rules of Civil Procedure, however,
such practice can no longer be countenanced.” (Emphasis ours.)
16
The RTC erred in taking jurisdiction over the indirect contempt proceeding
initiated by respondent. The latter did not comply with any of the mandatory
requirements of Section 4, Rule 71. He filed a mere Urgent Manifestation and
Motion for Contempt of Court, and not a verified petition. He likewise did not
conform with the requirements for the filing of initiatory pleadings such as the
submission of a certification against forum shopping and the payment of docket
fees. Thus, his unverified motion should have been dismissed outright by the RTC.
_______________
16Id., at pp. 632-634, 636; see also Land Bank of the Philippines v. Listana, Sr., 455 Phil. 750,
758-759; 408 SCRA 328, 334-335 (2003).
674
674 SUPREME COURT REPORTS ANNOTATED
Arriola vs. Arriola
It is noted though that, while at first the RTC overlooked the infirmities in
respondent’s unverified motion for contempt, in the end, it dismissed the motion,
albeit on substantive grounds. The trouble is that, in the CA decision assailed
herein, the appellate court committed the same oversight by delving into the
merits of respondent’s unverified motion and granting the relief sought therein.
Thus, strictly speaking, the proper disposition of the present petition ought to be
the reversal of the CA decision and the dismissal of respondent’s unverified motion
for contempt filed in the RTC for being in contravention of Section 4, Rule 71.
However, such simplistic disposition will not put an end to the dispute between
the parties. A seed of litigation has already been sown that will likely sprout into
another case between them at a later time. We refer to the question of whether the
subject house should be included in the public auction of the subject land. Until
this question is finally resolved, there will be no end to litigation between the
parties. We must therefore deal with it squarely, here and now.
The RTC and the CA differed in their views on whether the public auction
should include the subject house. The RTC excluded the subject house because
respondent never alleged its existence in his complaint for partition or established
his co-ownership thereof. On the other hand, citing Articles 440, 445 and 446 of
17 18 19 20
the Civil Code, the CA held that as the deceased owned the subject land, he also
owned the subject
_______________
17 Supra note 5.
18 Article 440. The ownership of property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or artificially.
19 Article 445. Whatever is built, planted or sown on the land of another and the improvements or
repairs made thereon, belong to the owner of the land, subject to the provisions of the following
articles.
Article 446. All works, sowing and planting are presumed made by the owner and at his
20
expense, unless the contrary is proved.
675
VOL. 542, JANUARY 28, 2008 675
Arriola vs. Arriola
house which is a mere accessory to the land. Both properties form part of the estate
of the deceased and are held in coownership by his heirs, the parties herein. Hence,
the CA concludes that any decision in the action for partition of said estate should
cover not just the subject land but also the subject house. The CA further pointed
21
out that petitioners themselves implicitly recognized the inclusion of the subject
house in the partition of the subject land when they proposed in their letter of
August 5, 2004, the following swappingarrangement:
Sir:
Thank you very much for accommodating us even if we are only poor and simple people.
We are very much pleased with the decision of Presiding Judge Manuel B. Fernandez, Jr.,
RTC Br. 254, Las Piñas, on the sharing of one-third (1/3) each of a land covered by Transfer
Certificate of Title No. 383714 (84191) in Las Piñas City.
However, to preserve the sanctity of our house which is our residence for more than
twenty (20) years, we wish to request that the 1/3 share of John Nabor C. Arriola be paid
by the defendants depending on the choice of the plaintiff between item (1) or item (2),
detailed as follows:
(1) Swap with a 500-square meters [sic] lot located at Baras Rizal x x x.
(2) Cash of P205,700.00 x x x.
x x x x.”
22
We agree that the subject house is covered by the judgment of partition for reasons
postulated by the CA. We qualify, however, that this ruling does not necessarily
countenance the immediate and actual partition of the subject house by way of
public auction in view of the suspensive proscription imposed under Article 159 of
The Family Code which will be discussed forthwith.
_______________
CA Decision, Rollo, p. 100.
21
Rollo, pp. 102-103.
22
676
676 SUPREME COURT REPORTS ANNOTATED
Arriola vs. Arriola
It is true that the existence of the subject house was not specifically alleged in the
complaint for partition. Such omission notwithstanding, the subject house is
deemed part of the judgment of partition for two compelling reasons.
First, as correctly held by the CA, under the provisions of the Civil Code, the
subject house is deemed part of the subject land. The Court quotes with approval
the ruling of the CA, to wit:
“The RTC, in the assailed Order dated August 30, 2005 ratiocinated that since the house
constructed on the subject lot was not alleged in the complaint and its ownership was not
passed upon during the trial on the merits, the court cannot include the house in its
adjudication of the subject lot. The court further stated that it cannot give a relief to [sic]
which is not alleged and prayed for in the complaint.
We are not persuaded.
To follow the foregoing reasoning of the RTC will in effect render meaningless the
pertinent rule on accession. In general, the right to accession is automatic (ipso
jure), requiring no prior act on the part of the owner or the principal. So that
even if the improvements including the house were not alleged in the complaint
for partition, they are deemed included in the lot on which they stand, following
the principle of accession. Consequently, the lot subject of judicial partition in
this case includes the house which is permanently attached thereto, otherwise,
it would be absurd to divide the principal, i.e., the lot, without dividing the house
which is permanently attached thereto.” (Emphasis supplied)
23
Second, respondent has repeatedly claimed that the subject house was built by the
deceased. Petitioners never controverted such claim. There is then no dispute that
24
the subject house is part of the estate of the deceased; as such, it is owned
_______________
CA Decision, Rollo, p. 104.
23
Motion for Reconsideration, id., at p. 36; Petition for Certiorari, id., at p. 51.
24
677
VOL. 542, JANUARY 28, 2008 677
Arriola vs. Arriola
in common by the latter’s heirs, the parties herein, any one of whom, under Article
25
494 of the Civil Code, may, at any time, demand the partition of the subject
26
house. Therefore, respondent’s recourse to the partition of the subject house
27
cannot be hindered, least of all by the mere technical omission of said common
property from the complaint for partition.
That said notwithstanding, we must emphasize that, while we treat the
subject house as part of the coownership of the parties, we stop short of
authorizing its actual partition by public auction at this time. It bears
emphasis that an action for partition involves two phases: first, the declaration of
the existence of a state of coownership; and second, the actual termination of that
state of co-ownership through the segregation of the common property. What is
settled thus far is only the fact that the subject house is under the co-ownership of
the parties, and therefore susceptible of partition among them.
Whether the subject house should be sold at public auction as ordered by the
RTC is an entirely different matter, depending on the exact nature of the subject
house.
Respondent claims that the subject house was built by decedent Fidel on his
exclusive property. Petitioners add that said house has been their residence for
29
20 years. Taken together, these averments on record establish that the subject
30
_______________
25 Generosa v. Pangan-Valera, G.R. No. 166521, August 31, 2006, 500 SCRA 620, 628.
26Article 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.
27Bravo-Guerrero v. Bravo, G.R. No. 152658, July 29, 2005, 465 SCRA 244, 266; De Guia v. Court
of Appeals, 459 Phil. 447, 464; 413 SCRA 114(2003).
28Maglucot-Aw v. Maglucot, 385 Phil. 720, 730; 329 SCRA 78, 89 (2000).
29Supra note 24.
30Petition, Rollo, p. 6.
678
678 SUPREME COURT REPORTS ANNOTATED
Arriola vs. Arriola
house is a family home within the contemplation of the provisions of The Family
Code, particularly:
“Article 152. The family home, constituted jointly by the husband and the wife or by an
unmarried head of a family, is the dwelling house where they and their family reside, and
the land on which it is situated.
Article 153. The family home is deemed constituted on ahouse and lot from the
time it is occupied as a family residence. From the time of its constitution and so long
as any of its beneficiaries actually resides therein, the family home continues to be such
and is exempt from execution, forced sale or attachment except as hereinafter provided
and to the extent of the value allowed by law.” (Emphasis supplied.)
One significant innovation introduced by The Family Code is the automatic
constitution of the family home from the time of its occupation as a family
residence, without need anymore for the judicial or extrajudicial processes
provided under the defunct Articles 224 to 251 of the Civil Code and Rule 106 of
the Rules of Court. Furthermore, Articles 152 and 153 specifically extend the scope
of the family home not just to the dwelling structure in which the family resides
but also to the lot on which it stands. Thus, applying these concepts, the subject
house as well as the specific portion of the subject land on which it stands are
deemed constituted as a family home by the deceased and petitioner Vilma from
28
the moment they began occupying the same as a family residence 20 years back. 31
It being settled that the subject house (and the subject lot on which it stands)
is the family home of the deceased and his heirs, the same is shielded from
immediate partition under Article 159 of The Family Code, viz.:
_______________
Spouses Versola v. Court of Appeals, G.R. No. 164740, July 31, 2006, 497 SCRA 385, 392.
31
679
VOL. 542, JANUARY 28, 2008 679
Arriola vs. Arriola
“Article 159. The family home shall continue despite the death of one or both spouses or of
the unmarried head of the family for a period of ten years or for as long as there is a
minor beneficiary, and the heirs cannot partition the same unless the courtfinds
compelling reasons therefor. This rule shall apply regardless of whoever owns the
property or constituted the family home.” (Emphasis supplied.)
The purpose of Article 159 is to avert the disintegration of the family unit following
the death of its head. To this end, it preserves the family home as the physical
symbol of family love, security and unity by imposing the following restrictions on
its partition: first, that the heirs cannot extrajudicially partition it for a period of
10 years from the death of one or both spouses or of the unmarried head of the
family, or for a longer period, if there is still a minor beneficiary residing therein;
and second, that the heirs cannot judicially partition it during the aforesaid
periods unless the court finds compelling reasons therefor. No compelling reason
has been alleged by the parties; nor has the RTC found any compelling reason to
order the partition of the family home, either by physical segregation or
assignment to any of the heirs or through auction sale as suggested by the parties.
More importantly, Article 159 imposes the proscription against the immediate
partition of the family home regardless of its ownership. This signifies that even
if the family home has passed by succession to the co-ownership of the heirs, or
heirs. Consequently, its actual and immediate partition cannot be sanctioned until
the lapse of a period of 10 years from the death of Fidel Arriola, or until March 10,
2013.
It bears emphasis, however, that in the meantime, there is no obstacle to the
immediate public auction of the portion of the subject land covered by TCT No.
383714, which falls outside the specific area of the family home.
WHEREFORE, the petition is PARTLY GRANTED and the November 30, 2006
Decision and April 30, 2007 Resolution of the Court of Appeals are MODIFIED in
that the house standing on the land covered by Transfer Certificate of Title No.
383714 is DECLARED part of the co-ownership of the parties John Nabor C.
Arriola, Vilma G. Arriola and Anthony Ronald G. Arriola but EXEMPTED from
partition by public auction
_______________
RTC Decision, Rollo, p. 26.
32

G.R. No. 166333, November 25, 2005, 476 SCRA 280.

33

has been willed to any one of them, this fact alone cannot transform the family 681
home into an ordinary property, much less dispel the protection cast upon it by the VOL. 542, JANUARY 28, 2008 681
law. The rights of the individual co-owner or owner of the family home cannot
Arriola vs. Arriola
subjugate the rights granted under Article 159 to the beneficiaries of the family
within the period provided for in Article 159 of the Family Code.
home.
No costs.
Set against the foregoing rules, the family home—consisting of the subject
SO ORDERED.
house and lot on which it stands—cannot be partitioned at this time, even if it has
Ynares-Santiago (Chairperson), Corona, Nachuraand Reyes, JJ., concur.
passed to the co-ownership of his heirs, the parties herein. Decedent Fidel
**

680 Petition partly granted, judgment and resolution modified.

680 SUPREME COURT REPORTS ANNOTATED
Arriola vs. Arriola
died on March 10, 2003. Thus, for 10 years from said date or until March 10, 2013,
32

or for a longer period, if there is still a minor beneficiary residing therein, the
family home he constituted cannot be partitioned, much less when no compelling
reason exists for the court to otherwise set aside the restriction and order the
partition of the property.
The Court ruled in Honrado v. Court of Appeals that a claim for exception from
33

execution or forced sale under Article 153 should be set up and proved to the
Sheriff before the sale of the property at public auction. Herein petitioners timely
objected to the inclusion of the subject house although for a different reason.
To recapitulate, the evidence of record sustain the CA ruling that the subject
house is part of the judgment of coownership and partition. The same evidence
also establishes that the subject house and the portion of the subject land on which
it is standing have been constituted as the family home of decedent Fidel and his
 G.R. No. 149313. January 22, 2008. * Same; Partition; Jurisdictions; A court trying an ordinary civil suit has no jurisdiction
JULITA ROMBAUA PANGANIBAN, PAQUITO ROMBAUA, RUPERTO
ROMBAUA, TERESITA ROMBAUA TELAJE and LEONOR ROMBAUA
OPIANA, petitioners, vs. JULITA S. OAMIL, respondent.
Co-Ownership; During the existence of the co-ownership, no individual can claim title
to any definite portion of the community property until the partition thereof, and, prior to
the partition, all that the co-owner has is an ideal or abstract quota or proportionate share
in the entire land or thing.—Under a co-ownership, the ownership of an undivided thing or
right belongs to different persons. During the existence of the co-ownership, no individual
can claim title to any definite portion of the community property until the partition thereof;
and prior to the partition, all that the co-owner has is an ideal or abstract quota or
proportionate share in the entire land or thing. Before partition in a co-ownership, every
co-owner has the absolute ownership of his undivided interest in the common property.
The co-owner is free to alienate, assign or mortgage this undivided interest, except as to
purely personal rights. The effect of any such transfer is limited to the portion which may
be awarded to him upon the partition of the property.
Civil Law; Co-Ownership; Under Article 497 of the Civil Code, in the event of a division
or partition of property owned in common, assignees of one or more of the co-owners may
take part in the division of the thing owned in common and object to its being effected
without their concurrence.—Under Article 497 of the Civil Code, in
_______________
*THIRD DIVISION.
167
VOL. 542, JANUARY 22, 2008 167
Panganiban vs. Oamil
the event of a division or partition of property owned in common, assignees of one or
more of the co-owners may take part in the division of the thing owned in common and
object to its being effected without their concurrence. But they cannot impugn any partition
already executed, unless there has been fraud, or in case it was made notwithstanding a
formal opposition presented to prevent it, without prejudice to the right of the debtor or
assignor to maintain its validity.
Same; Sales; In a contract of sale of co-owned property, what the vendee obtains by
virtue of such a sale are the same rights as the vendor had as co-owner, and the vendee
merely steps into the shoes of the vendor as co-owner.—The decision in Special Civil Action
No. 340-0-86, which is an action for judicial partition of the subject property, determines
what Partenio, and ultimately, respondent, as his successor-in-interest, is entitled to in
Civil Case No. 140-0-93. As Partenio’s successor-in-interest to the property, respondent
could not acquire any superior right in the property than what Partenio is entitled to or
could transfer or alienate after partition. In a contract of sale of co-owned property, what
the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-
owner, and the vendee merely steps into the shoes of the vendor as co-owner.
to act as a partition court—trial courts trying an ordinary action cannot resolve to perform
acts pertaining to a special proceeding because the latter are subject to specific prescribed
rules.—The court in Civil Case No. 140-0-93 is not a partition court but one litigating an
ordinary civil case, and all evidence of alleged acts of ownership by one co-owner should
have been presented in the partition case, there to be threshed out in order that the
partition court may arrive at a just division of the property owned in common; it is not for
the trial court in the specific performance case to properly appreciate. Being a court trying
an ordinary civil suit, the court in Civil Case No. 140-0-93 had no jurisdiction to act as a
partition court. Trial courts trying an ordinary action cannot resolve to perform acts
pertaining to a special proceeding because it is subject to specific prescribed rules.
Judgments; Principle of Conclusiveness of Judgments; Words and Phrases; The
principle of conclusiveness of judgments states that a fact or question which was in issue in
a former suit and was there
168
168 SUPREME COURT REPORTS ANNOTATED
Panganiban vs. Oamil
judicially passed upon and determined by a court of competent jurisdiction, is
conclusively settled by the judgment therein as far as the parties to that action and persons
in privity with them are concerned and cannot be again litigated in any future action
between such parties or their privies, in the same court or any other court of concurrent
jurisdiction on either the same or different cause of action, while the judgment remains
unreversed by proper authority.—The trial court and the Court of Appeals, by disregarding
the final and executory judgment in Special Civil Action No. 340-0-86, certainly ignored
the principle of conclusiveness of judgments, which states that—[A] fact or question which
was in issue in a former suit and was there judicially passed upon and determined by a
court of competent jurisdiction, is conclusively settled by the judgment therein as far as
the parties to that action and persons in privity with them are concerned and cannot be
again litigated in any future action between such parties or their privies, in the same court
or any other court of concurrent jurisdiction on either the same or different cause of action,
while the judgment remains unreversed by proper authority. It has been held that in order
that a judgment in one action can be conclusive as to a particular matter in another action
between the same parties or their privies, it is essential that the issue be identical. If a
particular point or question is in issue in the second action, and the judgment will depend
on the determination of that particular point or question, a former judgment between the
same parties or their privies will be final and conclusive in the second if that same point
or question was in issue and adjudicated in the first suit (Nabus vs. Court of Appeals, 193
SCRA 732 [1991]). Identity of cause of action is not required but merely identity of issues.
The ruling in Special Civil Action No. 340-0-86—that the Canda St. portion shall go to
Partenio—became the law of the case and continues to be binding between the parties as
well as their successors-in-interest, the decision in said case having become final and
executory. Hence, the binding effect and enforceability of that dictum can no longer be
relitigated anew in Civil Case No. 140-0-93 since said issue had been resolved and finally
laid to rest in the partition case, by conclusiveness of judgment, if not by the principle of res
judicata. It may not be reversed, modified or altered in any manner by any court.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
169
VOL. 542, JANUARY 22, 2008 169
Panganiban vs. Oamil
The facts are stated in the opinion of the Court.
Virgilio E. Acierto for petitioners.
Leovillo C. Agustin Law Offices for respondent.
Lourdes I. De Dios for intervenor Gan.
YNARES-SANTIAGO, J.:
Assailed in this petition for review on certiorari are the Decision of the Court of
1 all rights/interest on the one-half (1/2) front portion of the said realty in the name
Appeals dated March 2, 2001 in CAG.R. CV No. 57557, which affirmed in toto the
Order dated October 23, 1997 of the Regional Trial Court of Olongapo City, Branch
73, and the Resolution dated July 10, 2001 denying the motion for reconsideration.
2
The facts as culled from the records are as follows:
On April 26, 1993 Julita Oamil, herein respondent, filed a complaint for specific
performance with damages with the Regional Trial Court of Olongapo City,
3
praying that Partenio Rombaua (Partenio) be ordered to execute a final deed of
sale over the parcel of land which was the subject of a prior “Agreement to Sell”
executed by and between them on May 17, 1990. The property which is alleged to
be covered by the said “Agreement to Sell” consists of 204.5 square meters of land
located at #11 21st St., East Bajac-Bajac, Olongapo City, and is claimed by
respondent Oamil to be Partenio’s conjugal share in a parcel of commercial land
(the subject property) with an aggregate area of 409 square meters acquired by
Partenio and his deceased first wife Juliana during their marriage.
4
_______________
1 Rollo, pp. 22-36. Penned by Associate Justice Teodoro P. Regino and concurred in by Associate
Justices Delilah VidallonMagtolis and Josefina Guevara-Salonga.
2 Id., at pp. 38-39.
3 Docketed as Civil Case No. 140-0-93, Regional Trial Court Branch 73 of Olongapo City.
4 Juliana died in 1976.
170
170 SUPREME COURT REPORTS ANNOTATED
Panganiban vs. Oamil
There are two portions of the subject property in contention: one consisting of 204.5
square meters facing 21st Street (the 21st St. portion), and another consisting of
204.5 square meters facing Canda Street (the Canda St. portion). Petitioners and
their father Partenio are acknowledged co-owners of the subject property to the
following extent: one-half to Partenio as his conjugal share, and one-sixth each of
the remaining half to petitioners and Partenio as the surviving heirs of Juliana.
For failure to file an answer, Partenio was declared in default, and respondent
presented her evidence ex parte.
On December 26, 1993, the trial court promulgated its Decision, the dispositive
5
portion of which reads as follows:
“WHEREFORE, viewed from all the foregoing, judgment is hereby rendered as follows:
1. (1)The defendant is hereby ordered to execute a deed of absolute sale over the 1/2
portion (front) of the realty subject matter of this case in favor of the plaintiff and
to surrender the possession thereof to the plaintiff. Failure of the defendant to do
so, then the City Assessor of Olongapo is hereby directed to effect the transfer of
of the plaintiff, upon the finality of this decision;
2. (2)Plaintiff, however, is ordered to pay the amount of EIGHT THOUSAND PESOS
(P8,000.00) representing the balance of the interests due on the amount of
P200,000.00, delinquent for one (1) year computed at 12% per annum;
3. (3)Defendant is, likewise, hereby ordered to pay the plaintiff attorney’s fees in the
amount of TEN THOUSAND PESOS (P10,000.00).
Let a copy of this Decision be furnished the City Assessor of Olongapo City.
SO ORDERED.” 6
_______________
5Rollo, pp. 40-46. Penned by Judge Alicia L. Santos.
Id., at p. 46.
6
171
VOL. 542, JANUARY 22, 2008 171
Panganiban vs. Oamil
Note that the trial court did not specify which portion of the property—the 21st
St. portion or the Canda St. portion—should be deeded to respondent as buyer of
Partenio’s conjugal share.
Partenio failed to appeal, and the decision became final and executory on
February 4, 1994. Entry of judgment was made on February 8, 1994, and a writ of
execution was issued on February 15, 1994 and served upon Partenio on February
21, 1994. The writ was served as well upon the City Assessor of Olongapo City,
who caused the transfer of the Tax Declaration covering the 21st St. portion in
respondent’s name.
In June 1994, petitioners filed a verified petition for relief from the decision of
the trial court, grounded on the following: 1) that Partenio’s conjugal share in the
property, and that of petitioners as well, are being litigated in a judicial partition
proceeding (the partition case) which is pending with the
7
_______________
7 Special Civil Action No. 340-0-86 for judicial partition, entitled “Paquito Rombaua, et al. vs.
Partenio Rombaua” was filed in the Regional Trial Court of Olongapo City, Branch 75.
The decision dated July 31, 1990 (Rollo, pp. 49-56) in said case annuls the deed of extrajudicial
partition and settlement entered into between the plaintiffs (herein petitioners) and their father
Partenio, declares spouses Partenio and Juliana Rombaua conjugal owners of the subject property
(the whole 409 square meters at No. 11, 21st Street, East Bajac-Bajac, Olongapo City), and orders
the partition thereof between the plaintiff heirs and their surviving father Partenio in the following
manner:
1. 1.One half of the lot pertains to defendant Partenio Rombaua as his share in the conjugal
assets or a portion with an area of 204.5 square meters;
2. 2.One half of the lot with an area of 204.5 square meters to be owned pro indiviso by the
defendant Partenio Rombaua and the plaintiffs Paquito Rombaua, Leonor R. Opiana,
Ruperto Rombaua, Julita R. Panganiban and Teresita R. Terlaje at 1/6 share each;
3. 3.To physically divide the lot in accordance with the sketch Exhibit “E” prepared
by the parties, in such a
172
172 SUPREME COURT REPORTS ANNOTATED
Panganiban vs. Oamil
Court of Appeals, hence the trial court may not yet render a decision disposing of
a definite area of the subject property in respondent’s favor; and, (2) that
petitioners were unjustly deprived of the opportunity to protect and defend their
interest in court because, notwithstanding that they are indispensable parties to
the case (being co-owners of the subject property), they were not impleaded in Civil
Case No. 140-0-93.
In lieu of a hearing, the parties were directed to submit their respective position
papers. Respondent, meanwhile, moved to dismiss the petition, claiming that the
stated grounds for relief are not included in the enumeration under Section 2, Rule
38 of the Rules of Court. Petitioners opposed the motion.
In an Order dated January 13, 1995, the trial court denied the petition for relief
because the decision in Civil Case No. 140-0-93 had become final and executory. It
held that only indispensable parties to the case may participate in the proceedings
thereof, and since petitioners may not be considered as indispensable parties
because the subject matter of the proceedings involves Partenio’s conjugal share
in the property, they are precluded from filing a petition for relief from the court’s
judgment.
Petitioners moved for reconsideration insisting that they are indispensable
parties in Civil Case No. 140-0-93because as co-owners of the subject property by
virtue of succession to the rights of their deceased mother, they possess an interest
_______________
1. manner that the conjugal share of the defendant Partenio Rombaua will be that
portion presently occupied by him and where the carinderia is erected, with
CANDA ST. as the frontage;
2. 4.The one storey building with a floor area of 101 square meters and as described in the
complaint to be divided, pro indiviso, in the proportion as indicated above; and
3. 5.The income on the building by way of rentals to be divided likewise in such proportion as
indicated above. (Emphasis supplied)
173
VOL. 542, JANUARY 22, 2008 173
Panganiban vs. Oamil
that must be protected. Instead of resolving the motion, the trial court, with the
concurrence of the petitioners and the respondent, deferred the proceedings, to
await the result of a pending appeal with the Court of Appeals of the decision in
Special Civil Action No. 340-0-86, the partition case, where the trial court, in its
8
decision, awarded specifically the Canda St. portion to Partenio as his conjugal
share.
In the meantime, or sometime in 1995, a Motion for leave of court to file a
Complaint in Intervention was filed by Sotero Gan (Gan), who claims to be the
actual and rightful owner of Partenio’s conjugal share. Gan claims to have
purchased Partenio’s conjugal share in the property, and in return, the latter on
November 29, 1990 executed a deed of waiver and quitclaim of his possessory
rights. Gan likewise claims that the tax declaration covering the portion of the
property had been transferred in his name. He thus seeks the dismissal of Civil
Case No. 140-0-93 and the reinstatement of his name on the tax declaration which
by then had been placed in respondent’s name.
The parties submitted their respective oppositions to Gan’s motion, the core of
their argument being that with the finality of the decision in the case, intervention
was no longer proper, and that Gan’s cause of action, if any, should be litigated in
a separate proceeding.
The trial court, in an Order dated January 22, 1996, denied Gan’s motion for
intervention for being filed out of time, considering that the decision of the court
had become final and executory in February 1994. Gan moved for reconsideration
which was opposed by respondent, citing, among others, an
_______________
8 See footnote 7. The appeal with the Court of Appeals was docketed therein as CA-G.R. CV No.
34420. Proceedings in said appeal have since been terminated with the entry of judgment, on May
29, 1995, of the appellate court’s Decision dated March 31, 1995, which affirmed in totothe trial
court’s decision declaring that Partenio was entitled to the front portion of the subject property,
specifically that portion facing Canda St.
174
174 SUPREME COURT REPORTS ANNOTATED
Panganiban vs. Oamil
Order dated April 18, 1994 issued by the Department of Environment and Natural
Resources (CENRO of Olongapo) which includes a finding that Gan had
transferred his rights and interest in the subject property to one Chua Young Bing.
In another Order dated October 23, 1997, the trial court denied Gan’s motion
9
for reconsideration, as well as the petitioners’ motion for reconsideration of the
January 13, 1995 order denying the petition for relief. In said order, the court
made reference to the decision in Special Civil Action No. 3400-86, which by then
had become final and executory. The trial court likewise substantially modified
10
its Decision dated December 26, 1993, by awarding specifically the 21st St. portion
of the property to Partenio as his conjugal share, despite the pronouncement in
Special Civil Action No. 340-0-86 which awards the Canda St. portion to him.
From the foregoing October 23, 1997 order, the petitioners and Gan interposed
their separate appeals to the Court of Appeals. Meanwhile, respondent filed a
motion for execution pending appeal, which was denied on the ground that there
exist no special or compelling reasons to allow it.
On March 2, 2001, the appellate court rendered the herein assailed Decision,
which affirmed in toto the appealed October 23, 1997 Order of the trial court.
The appellate court sustained the trial court’s ruling that Partenio’s conjugal
share in the subject property consists of the 21st St. portion, thereby disregarding
the prior final and executory decision in Special Civil Action No. 340-0-86 which
declares that Partenio is entitled to the Canda St. portion. The appellate court
based the award of the 21st St. portion to respondent on the ground that
petitioners have always acknowledged their father Partenio’s “acts of ownership”
over the 21st St. portion, thus signifying their consent and thereby barring them
from questioning the award.
_______________
9 Rollo, pp. 58-68.
See footnote 7.
10
175
VOL. 542, JANUARY 22, 2008 175
Panganiban vs. Oamil
Respondents moved for reconsideration but it was denied.
Petitioners are now before us via the present petition, raising the sole issue of
whether petitioners can intervene in the proceedings in Civil Case No. 140-0-93 in
order to protect their rights as co-owners of the subject property. We resolve to
GRANT the petition.
Under a co-ownership, the ownership of an undivided thing or right belongs to
different persons. During the existence of the co-ownership, no individual can
claim title to any definite portion of the community property until the partition
thereof; and prior to the partition, all that the co-owner has is an ideal or abstract
quota or proportionate share in the entire land or thing. Before partition in a co-
11
ownership, every co-owner has the absolute ownership of his undivided interest in
the common property. The co-owner is free to alienate, assign or mortgage this
undivided interest, except as to purely personal rights. The effect of any such
transfer is limited to the portion which may be awarded to him upon the partition
of the property. 12
Under Article 497 of the Civil Code, in the event of a division or partition of
property owned in common, assignees of one or more of the co-owners may take
part in the division of the thing owned in common and object to its being effected
without their concurrence. But they cannot impugn any partition already
executed, unless there has been fraud, or in case
_______________
City of Mandaluyong v. Aguilar, G.R. No. 137152, January 29, 2001, 350 SCRA 487, 499; Article
11
493 of the Civil Code provides that:
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 coowners shall be limited to the portion which may be allotted to him
in the division upon termination of the co-ownership.
12 Id., at p. 500.
176
176 SUPREME COURT REPORTS ANNOTATED
Panganiban vs. Oamil
it was made notwithstanding a formal opposition presented to prevent it, without
prejudice to the right of the debtor or assignor to maintain its validity.
The decision in Special Civil Action No. 340-0-86, which is an action for judicial
partition of the subject property, determines what Partenio, and ultimately,
respondent, as his successor-in-interest, is entitled to in Civil Case No. 140-0-93.
As Partenio’s successor-in-interest to the property, respondent could not acquire
any superior right in the property than what Partenio is entitled to or could
transfer or alienate after partition. In a contract of sale of co-owned property, what
the vendee obtains by virtue of such a sale are the same rights as the vendor had
as co-owner, and the vendee merely steps into the shoes of the vendor as co-owner.
As early as May 17, 1990, when respondent and Partenio executed the
“Agreement to Sell,” the former knew that the property she was purchasing was
conjugal property owned in common by Partenio and the heirs of his deceased
wife. And while Civil Case No. 140-0-93 (the specific performance case) was
14
pending, respondent was apprised of the pendency of Special Civil Action No. 340-
0-86 (the partition case). Yet, respondent did not intervene, nor did she take part,
nor enter any formal opposition—as assignee of Partenio’s conjugal share in the
property—in said partition proceedings. She did not exercise the rights granted
her under Article 497 of the Civil Code. Instead, when the court in Civil Case No.
140-0-93 decided to suspend the proceedings and hold the same in abeyance while
the appeal in Special Civil Action No. 340-086 remained unresolved, the
respondent unconditionally agreed to its temporary abatement. In other words,
she chose to sit back and await the resolution thereof.
_______________
Del Campo v. Court of Appeals, G.R. No. 108228, February 1, 2001, 351 SCRA 1, 8.
13
Rollo, p. 60.
14
177
VOL. 542, JANUARY 22, 2008 177
Panganiban vs. Oamil
Consequently, when the decision in Special Civil Action No. 340-0-86 became final
and executory without the respondent having questioned the same in any manner
whatsoever, by appeal or otherwise, the division of property decreed therein may
no longer be impugned by her.
Thus said, the trial court in Civil Case No. 140-0-93could not award the 21st
St. portion to Partenio, since the court in Special Civil Action No. 340-0-86
specifically awarded the Canda St. portion to him. The decision in Special Civil
Action No. 340-0-86, which became final and executory, should put an end to the
co-ownership between Partenio and the respondents, and the award made to each
co-owner of specific portions of the property as their share in the co-ownership
should be respected.
Since the issue of each of the co-owners’ specific portion in the aggregate
property has been laid to rest in Special Civil Action No. 340-0-86, the final and
executory decision in said proceeding should be conclusive on the issue of which
specific portion of the property became the subject matter of the sale between
Partenio and the respondent; that is, that Partenio, as declared owner of the
Canda St. portion, could have transferred to respondent only that part of the
property and not the 21st St. portion. Although Partenio was free to sell or transfer
his undivided interest to the respondent, the effect of such transfer is limited to
13
the portion which may be awarded to him upon the partition of the property.
It was likewise error for the appellate court to have considered the alleged acts
of ownership exercised upon the 21st St. portion by Partenio as weighing heavily
against the decreed partition in Special Civil Action No. 340-0-86. The
determination of this issue is beyond the ambit of the trial court in Civil Case No.
140-0-93. As far as it was concerned, it could only award to the respondent, if
proper, whatever specific portion Partenio is found to be entitled to in the event of
a partition, in accordance with Article 493 of the Civil Code and the procedure
outlined in the Rules of Court. It could not, in an ordi-
178
178 SUPREME COURT REPORTS ANNOTATED
Panganiban vs. Oamil
nary proceeding for specific performance with damages, subject the property to a
partial division or partition without the knowledge and participation of the other
co-owners, and while a special civil action for partition was simultaneously
pending in another court.
The court in Civil Case No. 140-0-93 is not a partition court but one litigating
an ordinary civil case, and all evidence of alleged acts of ownership by one co-owner
should have been presented in the partition case, there to be threshed out in order
that the partition court may arrive at a just division of the property owned in
common; it is not for the trial court in the specific performance case to properly
appreciate. Being a court trying an ordinary civil suit, the court in Civil Case No.
140-0-93 had no jurisdiction to act as a partition court. Trial courts trying an
ordinary action cannot resolve to perform acts pertaining to a special proceeding
because it is subject to specific prescribed rules.
15
That the trial court suspended the proceedings in Civil Case No. 140-0-93 to
make way for the resolution of Special Civil Action No. 340-0-86 was an indication
that it intended to abide by whatever would be decreed in the latter case. For,
understandably, the resolution of Special Civil Action No. 340-0-86 will settle the
issue in Civil Case No. 140-0-93with respect to which specific portion of the
property constitutes the subject matter of the specific performance suit and which
would, in any case, be adjudicated to either of the two—the defendant co-owner
and seller Partenio or the plaintiff buyer Oamil, the herein respondent. Yet in the
end, the trial court ultimately disregarded what had been finally adjudicated and
settled in Special Civil Action No. 340-0-86, and instead it took a position that was
entirely diametrically opposed to it.
It was likewise irregular for the respondent to have obtained a certificate of
title over specific property which has
_______________
Natcher v. Court of Appeals, G.R. No. 133000, October 2, 2001, 366 SCRA 385, 392.
15
179
not been partitioned, especially where she concedes awareness of the existing co-
ownership which has not been terminated, and recognizes her status as mere
successor-in-interest to Partenio. The spring may not rise higher than its source.
In sum, the trial court and the Court of Appeals, by disregarding the final and
executory judgment in Special Civil Action No. 340-0-86, certainly ignored the
principle of conclusiveness of judgments, which states that—
“[A] fact or question which was in issue in a former suit and was there judicially passed
upon and determined by a court of competent jurisdiction, is conclusively settled by the
judgment therein as far as the parties to that action and persons in privity with them are
concerned and cannot be again litigated in any future action between such parties or their
privies, in the same court or any other court of concurrent jurisdiction on either the same
or different cause of action, while the judgment remains unreversed by proper authority.
It has been held that in order that a judgment in one action can be conclusive as to a
particular matter in another action between the same parties or their privies, it is essential
that the issue be identical. If a particular point or question is in issue in the second action,
and the judgment will depend on the determination of that particular point or question, a
former judgment between the same parties or their privies will be final and conclusive in
the second if that same point or question was in issue and adjudicated in the first suit
(Nabus vs. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of action is not
required but merely identity of issues.” 16
The ruling in Special Civil Action No. 340-0-86—that the Canda St. portion shall
go to Partenio—became the law of the case and continues to be binding between
the parties as well as their successors-in-interest, the decision in said case having
become final and executory. Hence, the binding effect and
_______________
16 Heirs of Clemencia Parasac v. Republic, G.R. No. 159910, May 4, 2006, 489 SCRA 498,
citing Calalang v. Register of Deeds of Quezon City, G.R. Nos. 76265 & 83280, March 11, 1994, 231
SCRA 88, 99-100.
180
enforceability of that dictum can no longer be relitigated anew in Civil Case No.
140-0-93 since said issue had been resolved and finally laid to rest in the partition
case, by conclusiveness of judgment, if not by the principle of res judicata. It may
not be reversed, modified or altered in any manner by any court.
As a result of the trial court’s refusal to abide by the decision in Special Civil
Action No. 340-0-86, the rights of the petitioners have been unnecessarily
transgressed, thereby giving them the right to seek relief in court in order to annul
the October 23, 1997 Order of the trial court which substantially and wrongly
modified its original decision in Civil Case No. 140-0-93. It was clear mistake for
the trial court to have gone against the final and executory decision in Special Civil
Action No. 340-0-86 and its original decision, which does not award a definite
portion of the disputed property to Partenio, precisely because, as a court litigating
an ordinary civil suit, it is not authorized to partition the subject property but only
to determine the rights and obligations of the parties in respect to Partenio’s
undivided share in the commonly owned property. As a result of this mistake, the
petitioners are entitled to relief.
Finally, with respect to Gan’s intervention, we affirm the appellate court’s
finding that the same is no longer proper considering that the decision in Civil
Case No. 140-0-93 had become final and executory. Gan moved to intervene only
in 1995, when the decision became final and executory in February 1994.
Certainly, intervention, being merely collateral or ancillary to the principal action,
may no longer be allowed in a case already terminated by final
judgment. Moreover, since Gan did not appeal the herein assailed decision of the
17
appellate court, then the same, as against him, has become final and executory.
_______________
Looyuko v. Court of Appeals, G.R. Nos. 102696, 102716, 108257 & 120954, July 12, 2001, 361
17
SCRA 150, 165.
181
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
dated March 2, 2001 in CA-G.R. CV No. 57557 and the Resolution dated July 10,
2001 are REVERSED and SET ASIDE, with the exception that the denial of the
intervenor Sotero Gan’s motion for intervention is AFFIRMED.
The Order dated October 23, 1997 of the Regional Trial Court of Olongapo City
in Civil Case No. 140-0-93 is hereby DECLARED of no effect. In all other respects,
the Decision of the trial court in Civil Case No. 140-0-93 dated December 26, 1993
is AFFIRMED. The said court is moreover ORDERED to abide by the
pronouncement in Special Civil Action No. 340-086 with respect to Partenio
Rombaua’s conjugal share in the disputed property.
SO ORDERED.
Austria-Martinez, Corona, Nachura and Reyes, JJ., concur.
**
Petition granted, judgment and resolution reversed and set aside.

G.R. No. 56550. October 1, 1990. *
MARINA Z. REYES, AUGUSTO M. ZABALLERO and SOCORRO Z.
FRANCISCO, petitioners, vs. THE HONORABLE ALFREDO B. CONCEPCION,
Presiding Judge, CFI of Cavite, Tagaytay, Br. IV, SOCORRO MARQUEZ VDA.
DE ZABALLERO, EUGENIA Z. LUNA, LEONARDO M. ZABALLERO, and
ELENA FRONDA ZABALLERO, respondents.
Civil Law; Property; Co-ownership; Legal Redemption; A co-owner has no pre-emptive
right to purchase the pro-indiviso shares of his coowners. A co-owner's right to redeem may
be invoked only after the shares of the other co-owners are sold to a third party or a stranger
to the co-ownership.—In this jurisdiction, the legal provisions on coownership do not grant
to any of the owners of a property held in common a pre-emptive right to purchase the pro-
indiviso shares of his co-owners. Petitioners' reliance on Article 1620 of the New Civil Code
is misplaced. x x x Article 1620 contemplates of a situation where a coowner has alienated
his pro-indiviso shares to a stranger. By the very nature of the right of "legal redemption",
a co-owner's right to redeem is invoked only after the shares of the other co-owners are
sold to a third party or stranger to the co-ownership [See Estrada v. Reyes, 33 Phil. 31
(1915)]. But in the case at bar, at the time petitioners filed their complaint for injunction
and damages against private respondents, no sale of the latter's pro-indiviso shares to a
third party had yet been made. Thus, Article 1620 of the New Civil Code finds no
application to the case at bar.
Same; Same; Same; Same; A co-owner may sell, alienate or mortgage his ideal share
in the property held in common, but the alienation or mortgage is limited to that portion
that may be allotted to him upon termination of the co-ownership.—The law does not
prohibit a coowner from selling, alienating or mortgaging his ideal share in the property
held in common. The law merely provides that the alienation or mortgage shall be limited
only to the portion of the property which may be allotted to him upon termination of the
co-ownership [See Mercado v. Liwanag, G.R. No. L-14429, June 30, 1962, 5 SCRA 472;
PNB v. The Honorable Court of Appeals, G.R. No. L-34404, June 25, 1980, 98 SCRA 207;
Go Ong v. The Honorable Court of Appeals, G.R. No. 75884, September 24, 1987, 154 SCRA
270], and, as earlier dis-
_______________
*THIRD DIVISION.
172
172 SUPREME COURT REPORTS ANNOTATED
Reyes vs. Concepcion
cussed, that the remaining co-owners have the right to redeem, within a specified
period, the shares which may have been sold to the third party. [Articles 1620 and 1623 of
the New Civil Code.]
Same; Same; Same; Partition; Respondent trial judge's order directing the holding of
a public sale of the subject properties and the distribution of the proceeds thereof among the
co-owners, was in accordance with law.—The sale of the property held in common referred
to in the above article is resorted to when (1) the right to partition the property among the
co-owners is invoked by any one of them but because of the nature of the property, it cannot
be subdivided or its subdivision [See Article 495 of the New Civil Code] would prejudice
the interests of the co-owners [See Section 5 of Rule 69 of the Revised Rules of Court] and
(2) the co-owners are not in agreement as to who among them shall be allotted or assigned
the entire property upon reimbursement of the shares of the other co-owners. Petitioners
herein did not have justifiable grounds to ignore the queries posed by respondent trial
judge and to insist that hearings be conducted in order to ascertain the reasonable price at
which they could purchase private respondents' pro-indiviso shares [Petitioners'
"Compliance and Motion" dated February 27, 1981, Annex "H" of the Petition; Rollo, pp.
57-60]. Since at this point in the case it became reasonably evident to respondent trial
judge that the parties could not agree on who among them would be allotted the subject
properties, the Court finds that respondent trial judge committed no grave abuse of
discretion in ordering the holding of a public sale for the subject properties (with the
opening bid pegged at P12.50 per square meter), and the distribution of the proceeds
thereof amongst the co-owners, as provided under Article 498 of the New Civil Code.
PETITION for certiorari to review the decision of the then Court of First Instance
of Cavite, Br. 4. Concepcion, J.
The facts are stated in the opinion of the Court.
Law Firm of Raymundo A. Armovit for petitioners.
Leonardo M. Zaballero for private respondents.
CORTÉS, J.:
On March 13, 1980, petitioners filed with the CFI a complaint for injunction and
damages, docketed as Civil Case No. TG-572, seeking to enjoin private
respondents Socorro Marquez Vda. De Zaballero, Eugenia Z. Luna and Leonardo
M. Zaballero from selling to a third party their pro-indiviso shares as co-owners in
173
VOL. 190, OCTOBER 1, 1990 173
Reyes vs. Concepcion
eight parcels of registered land (covered by TCT Nos. A-1316 to A-1322) located in
the province of Cavite, with an aggregate area of about 96 hectares. Petitioner
claimed that under Article 1620 of the new Civil Code, they, as co-owners, had a
preferential right to purchase these shares from private respondents for a
reasonable price.
On March 17, 1980, respondent trial judge denied the ex parte application for a
writ of preliminary injunction, on the ground that petitioners' registered notice
of lis pendenswas ample protection of their rights.
On April 24,1980, private respondents received the summons and copies of the
complaint. Private respondents then filed their answer with counterclaim, praying
for the partition of the subject properties. Private respondent Elena Fronda
Zaballero filed a motion for intervention dated April 29, 1980, adopting therein
her co-respondents answer with counterclaim.
At the pre-trial hearing, the parties agreed on the following stipulation of facts:
xxx
1. 1.That the plaintiffs, the defendants and the intervenor are the pro-indiviso co-
owners of the properties cited and described in the complaint;
2. 2.That six and nine tenth (6-9/10) hectares of the land covered by TCT No. T-1319;
approximately twelve (12) hectares of that covered by TCT No. T-1320; and the
entire parcel of covered by TCT No. T1321, are subject of expropriation
proceedings instituted by the National Housing Authority (NHA) now pending
before this Court in Civil Case Nos. TG-392, TG-396 and TG-417;
3. 3.That based on the evidence presented by the herein parties in the aforecited
expropriation cases, the current valuation of the land and the improvements
thereon is at P95,132.00 per hectare;
4. 4.That on 16 April 1980, the plaintiffs received a written notice from the
defendants and the intervenor that the VOLCANO SECURITIES TRADERS
AND AGRI-BUSINESS CORPORATION had offered to buy the latter's share in
the properties listed in the complaint subject to the following terms:
1. "1.The selling price shall be net at TWELVE & 50/100 (P12.50) PESOS per square
meter, or a total price of NINE MILLION (P9,000,000.00) PESOS for a total area
of SEVENTY TWO (72) HECTARES ONLY;
174
174 SUPREME COURT REPORTS ANNOTATED
Reyes vs. Concepcion
1. "2.A downpayment equivalent to THIRTY (30%) PERCENT of the selling price, or
a minimum downpayment of TWO MILLION SEVEN HUNDRED THOUSAND
(P2,700,000.00) PESOS;
2. "3.The balance of the purchase price to be payable within THREE (3) YEARS from
the date of downpayment in THREE (3) EQUAL ANNUAL PAYMENTS with
interest at the legal rate prevailing at the time of payment;
3. "4.The balance shall be covered by a BANK GUARANTEE of payments and shall
not be governed by Art. 1250 of the Civil Code."
(Cf. Annexes 1, 2 and 3, Answer)
1. 5.That in said letters (Annexes 1, 2 and 3, Answer), the plaintiffs were requested:
1. a)To exercise their pre-emptive right to purchase defendants' and intervenor's
shares under the above-quoted terms; or
2. b)To agree to a physical partition of the properties; or
3. c)To sell their shares, jointly with the defendants and the intervenor, to the
VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION
at the price and under the terms aforequoted.
1. 6.That the VOLCANO SECURITIES TRADERS AND AGRIBUSINESS
CORPORATION is ready, willing and able to purchase not only the aliquot shares
of the defendants and the intervenor, but also that of the plaintiffs, in and to all
the properties subject of this case, for and in consideration of the net amount of
TWELVE and 50/ 100 (P12.50) PESOS per square meter and under the afore-
quoted terms;
xxx
[Annex "C" of the Petition, pp. 1-2, Rollo, pp. 43-44.]
The parties laid down their respective positions, as follows:
PLAINTIFFS
1. 1.That the subject properties are incapable of physical partition;
2. 2.That the price of P12.50 per square meter is grossly excessive;
3. 3.That they are willing to exercise their pre-emptive right for an amount of not
more that P95,132.00 per hectare, which is the fair and reasonable value of said
properties;
4. 4.That the statutory period for exercising their pre-emptive right was suspended
upon the filing of the complaint;
175
VOL. 190, OCTOBER 1, 1990 175
Reyes vs. Concepcion
DEFENDANTS AND INTERVENOR
1. 1.That the reasonable price of the subject properties is P12.50 per square meter;
2. 2.That plaintiffs' right of legal pre-emption had lapsed upon their failure to
exercise the same within the period prescribed in Art. 1623 of the Civil Code of
the Philippines;
3. 3.That, assuming the soundness of plaintiffs' claim that the price of P12.50 per
square meter is grossly excessive, it would be to the best interest of the plaintiffs
to sell their shares to the VOLCANO SECURITIES TRADERS AND AGRI-
BUSINESS CORPORATION, whose sincerity, capacity and good faith is beyond
question, as the same was admitted by the parties herein;
4. 4.That the subject properties consisting approximately 95 hectares may be
physically partitioned without difficulty in the manner suggested by them to
 plaintiffs, and as graphically represented in the subdivision plan, which will be
furnished in due course to plaintiffs' counsel.
[Annex "C" of the Petition, pp. 2-3; Rollo, pp. 44-45.]
Based on the foregoing, respondent trial judge rendered a pre-trial order dated
July 9,1980 granting petitioners a period of ten days from receipt of the subdivision
plan to be prepared by a competent geodetic engineer within which to express their
approval or disapproval of the said plan, or to submit within the same period, if
they so desire, an alternative subdivision plan.
On July 16,1980, counsel for private respondents sent to the counsel for
petitioners a letter enclosed with a subdivision plan.
On August 4,1980, petitioners filed their comment to the pretrial order,
contending that the question of reasonable value of the subject properties remains
a contentious issue of fact ascertainable only after a full trial. Petitioners likewise
insisted on their pre-emptive right to purchase private respondents' shares in the
co-ownership after due determination of the reasonable price thereof.
Thereafter, counsel for private respondents sent the counsel for petitioners
another subdivision plan prepared by a geodetic engineer. Still, no definite
communication was sent by petitioners signifying their approval or disapproval to
the subdivision plans.
In order to settle once and for all the controversy between the parties, private
respondents filed a motion dated December 16,
176
176 SUPREME COURT REPORTS ANNOTATED
Reyes vs. Concepcion
1980 requesting that petitioners be required to formally specify which of the two
options under Article 498 of the New Civil Code they wished to avail of: that
petitioners' shares in the subject properties be sold to private respondents, at the
rate of P12.50 per square meter; or that the subject properties be sold to a third
party, VOLCANO LAKEVIEW RESORTS, INC. (claimed to have been erroneously
referred to in the pre-trial as VOLCANO SECURITIES TRADERS AND AGRI-
BUSINESS CORPORATION) and its proceeds thereof distributed among the
parties.
Finding merit in the private respondents' request, and for the purpose of
determining the applicability of Article 498 of the New Civil Code, respondent trial
judge issued an order dated February 4,1981 which directed the parties to signify
whether or not they agree to the scheme of allotting the subject properties to one
of the co-owners, at the rate of P12.50 per square meter, or whether or not they
know of a third party who is able and willing to buy the subject properties at terms
and conditions more favorable than that offered by VOLCANO LAKEVIEW
RESORTS, INC. The order contained a series of questions addressed to all the
parties, who were thereupon required to submit their answers thereto.
Private respondents filed a "Constancia" expressing that they were willing to
allot their shares in the subject properties to Socorro Marquez Vda. de Zaballero,
at the rate of P12.50 per square meter, and that they did not know of any other
party who was willing and able to purchase the subject properties under more
favorable conditions than that offered by VOLCANO LAKEVIEW RESORTS, INC.
However, instead of submitting their answers to the queries posed by
respondent trial judge, petitioners filed a motion for clarification as to the true
identity of the third party allegedly willing to purchase the subject properties.
On February 26, 1981, respondent trial judge rejected petitioners' motion on
the ground that it was irrelevant.
Thereupon, on February 27, 1981, petitioners filed a pleading captioned
"Compliance and Motion", (1) reiterating the relevance of ascertaining the true
identity of the third party buyer, VOLCANO SECURITIES TRADERS AND
AGRI-BUSINESS CORPORATION or VOLCANO LAKEVIEW RESORTS, INC.,
177
VOL. 190, OCTOBER 1, 1990 177
Reyes vs. Concepcion
(2) expressing their view that there is actually no bona fide and financially able
third party willing to purchase the subject properties at the rate of P12.50 per
square meter, and, (3) once again insisting on their pre-emptive right to purchase
the shares of private respondents in the co-ownership at a "reasonable price",
which is less than that computed excessively by the latter at the rate of P12.50 per
square meter. Petitioners therein prayed that further proceedings be conducted in
order to settle the factual issue regarding the reasonable value of the subject
properties.
On March 16, 1981, respondent trial judge issued an order denying petitioners'
motion. The judge ruled that petitioners did not possess a pre-emptive right to
purchase private respondents' shares in the co-ownership. Thus, finding that the
subject properties were essentially indivisible, respondent trial judge ordered the
holding of a public sale of the subject properties pursuant to Article 498 of the New
Civil Code. A notice of sale was issued setting the date of public bidding for the
subject properties on April 13, 1981.
Petitioners then filed a motion for reconsideration from the above order.
Respondent trial judge reset the hearing on petitioners' motion for reconsideration
to April 6,1981, and moved the scheduled public sale to April 14,1981.
Without awaiting resolution of their motion for reconsideration, petitioners
filed the present petition for certiorari, alleging that the respondent trial judge
acted without jurisdiction, or in grave abuse of its discretion amounting to lack of
jurisdiction, in issuing his order dated March 16, 1981 which denied petitioners'
claim of a pre-emptive right to purchase private respondents' pro-indivisoshares
and which, peremptorily, ordered the public sale of the subject properties. On April
8,1981, this Court issued a temporary restraining order enjoining the sale of the
subject properties at public auction.
With the comment and reply, the Court considered the issues joined and the
case submitted for decision.
The Court finds no merit in the present petition.
The attack on the validity of respondent trial judge's order dated March 16,
1981 is ultimately premised on petitioners' claim that they had a pre-emptive right
to purchase the proindiviso shares of their co-owners, private respondents herein,
178
178 SUPREME COURT REPORTS ANNOTATED
Reyes vs. Concepcion
at a "reasonable price". It is this same claim which forms the basis of their
complaint for injunction and damages filed against private respondents in the
court a quo. This claim is patently without basis. In this jurisdiction, the legal
provisions on co-ownership do not grant to any of the owners of a property held in
common a pre-emptive right to purchase the pro-indiviso shares of his co-owners.
Petitioners' reliance on Article 1620 of the New Civil Code is misplaced. Article
1620 provides:
A co-owner of a thing may exercise the right of redemption in case the shares of all the 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
[Italics supplied].
Article 1620 contemplates of a situation where a co-owner has alienated his pro-
indiviso shares to a stranger. By the very nature of the right of "legal redemption",
a co-owner's right to redeem is invoked only after the shares of the other co-owners
are sold to a third party or stranger to the co-ownership [See Estrada v. Reyes, 33
Phil. 31 (1915)]. But in the case at bar, at the time petitioners filed their complaint
for injunction and damages against private respondents, no sale of the latter's pro-
indiviso shares to a third party had yet been made. Thus, Article 1620 of the New
Civil Code finds no application to the case at bar.
There is likewise no merit to petitioners' contention that private respondents
had acknowledged the pre-emptive right of petitioners to purchase their shares at
a "reasonable price". Although it appears that private respondents had agreed to
sell their pro-indiviso shares to petitioners, the offer was made at a fixed rate of
P12.50 per square meter [See Pre-trial Order dated July 9, 1980, Annex "C" of the
Petition; Rollo, pp. 43-45]. It cannot be said that private respondents had agreed,
without qualification, to sell their shares to petitioners. Hence, petitioners cannot
insist on a right to purchase the shares at a price lower than the selling price of
private respondents.
179
VOL. 190, OCTOBER 1, 1990 179
Reyes vs. Concepcion
Neither do petitioners have the legal right to enjoin private respondents from
alienating their pro-indiv iso shares to a third party. The rights of a co-owner of a
property are clearly specified in Article 493 of the New Civil Code, thus:
Article 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 of the mortgage, with respect to .the coowners shall be limited
to the portion which may be allotted to him in the division upon the termination of the co-
ownership.
The law does not prohibit a co-owner from selling, alienating or mortgaging his
ideal share in the property held in common. The law merely provides that the
alienation or mortgage shall be limited only to the portion of the property which
may be allotted to him upon termination of the co-ownership [See Mercado v.
Liwanag, G.R. No. L-14429, June 30, 1962, 5 SCRA 472; PNB v. The Honorable
Court of Appeals, G.R. No. L-34404, June 25, 1980, 98 SCRA 207; Go Ong v. The
Honorable Court of Appeals, G.R. No. 75884, September 24, 1987, 154 SCRA 270,]
and, as earlier discussed, that the remaining co-owners have the right to redeem,
within a specified period, the shares which may have been sold to the third party.
[Articles 1620 and 1623 of the New Civil Code.]
Considering the foregoing, the Court holds that respondent trial judge
committed no grave abuse of discretion when he denied petitioners' claim of a pre-
emptive right to purchase private respondents' pro-indivisoshares.
Moreover, there is no legal infirmity tainting respondent trial judge's order for
the holding of a public sale of the subject properties pursuant to the provisions of
Article 498 of the New Civil Code. After a careful examination of the proceedings
before respondent trial judge, the Court finds that respondent trial judge's order
was issued in accordance with the laws pertaining to the legal or juridical
dissolution of co-ownerships.
It must be noted that private respondents, in their answer with counterclaim
prayed for, inter alia, the partition of the subject properties in the event that the
petitioners refused to purchase their pro-indiviso shares at the rate of P12.50 per
180
180 SUPREME COURT REPORTS ANNOTATED
Reyes vs. Concepcion
square meter. Unlike petitioners' claim of a pre-emptive right to purchase the
other co-owners? pro-indiviso shares, private respondents' counterclaim for the
partition of the subject properties is recognized by law, specifically Article 494 of
the New Civil which lay s down the general rule that no co-owner is obliged to
remain in the co-ownership. Article 494 reads as follows:
No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand
at any time 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 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.
None of the legal exceptions under Article 494 applies to the case at bar. Private
respondents' counterclaim for the partition of the subject properties was therefore
entirely proper. However, during the pre-trial proceedings, petitioners adopted the
position that the subject properties were incapable of physical partition. Initially,
private respondents disputed this position. But after petitioners inexplicably
refused to abide by the pretrial order-issued by respondent trial judge, and
stubbornly insisted on exercising an alleged pre-emptive right to purchase private
respondents' shares at a "reasonable price", private respondents relented and
adopted petitioner's position that the partition of the subject properties was not
economically feasible, and, consequently, invoked the provisions of Article 498 of
the New Civil Code [Private respondents' "Motion To Allot Properties To
Defendants Or To Sell the Same Pursuant To Article 498 Of The Civil Code",
Annex "D" of the Petition; Rollo, pp. 46-49].
Inasmuch as the parties were in agreement as regards the fact that the subject
properties should not be partitioned, and private respondents continued to
manifest their desire to termi-
181
VOL. 190, OCTOBER 1, 1990 181
Reyes vs. Concepcion
nate the co-ownership arrangement between petitioners and themselves,
respondent trial judge acted within his jurisdiction when he issued his order dated
February 4,1981 requiring the parties to answer certain questions for the purpose
of determining whether or not the legal conditions for the applicability of Article
498 of the New Civil Code were present in the case.
Article 498 provides that:
Whenever the thing is essentially indivisible and the co-owners cannot agree that it be
alloted to one of them who shall indemnify the others, it shall be sold and its proceeds
distributed.
The sale of the property held in common referred to in the above article is resorted
to when (1) the right to partition the property among the co-owners is invoked by
any of them but because of the nature of the property, it cannot be subdivided or
its subdivision [See Article 495 of the New Civil Code] would prejudice the
interests of the co-owners [See Section 5 of Rule 69 of the Revised Rules of Court]
and (2) the co-owners are not in agreement as to who among them shall be allotted
or assigned the entire property upon reimbursement of the shares of the other co-
owners.
Petitioners herein did not have justifiable grounds to ignore the queries posed
by respondent trial judge and to insist that hearings be conducted in order to
ascertain the reasonable price at which they could purchase private
respondents' pro-indiviso shares [Petitioners' "Compliance and Motion" dated
February 27, 1981, Annex "H" of the Petition; Rollo, pp. 57-60].
Since at this point in the case it became reasonably evident to respondent trial
judge that the parties could not agree on who among them would be allotted the
subject properties, the Court finds that respondent trial judge committed no grave
abuse of discretion in ordering the holding of a public sale for the subject properties
(with the opening bid pegged at P12.50 per square meter), and the distribution of
the proceeds thereof amongst the co-owners, as provided under Article 498 of the
New Civil Code.
Contrary to petitioners' contention, there was no need for further hearings in
the case because it is apparent from the various allegations and admissions of the
parties made during
182
182 SUPREME COURT REPORTS ANNOTATED
Hipolito, Jr. vs. Ferrer-Calleja
the pre-trial proceedings, and in their respective pleadings, that the legal
requisites for the application of Article 498 of the New Civil Code were present in
the case. No factual issues remained to be litigated upon.
WHEREFORE, the present petition is DISMISSED for lack of merit. The
temporary restraining order issued by the Court is hereby LIFTED.
SO ORDERED.
Fernan (C.J.), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
Petition dismissed.

G.R. No. 156224. February 19, 2008. * are legitimate children and relatives by affinity of Faustino it is more important to
HEIRS OF PANFILO F. ABALOS,1 petitioners, vs.AURORA A. BUCAL,
DEMETRIO BUCAL, ARTEMIO F. ABALOS, LIGAYA U. ABALOS, ROMULO F.
ABALOS, JESUSA O. ABALOS, MAURO F. ABALOS and LUZVIMINDA R.
ABALOS, respondents.
Judgments; Res Judicata; Requisites; Words and Phrases; Res judicata means “a
matter adjudged, a thing judicially acted upon or decided, a thing or matter settled by
judgment.”—Res judicatameans “a matter adjudged; a thing judicially acted upon or
decided; a thing or matter settled by judgment.” It lays the rule that an existing final
judgment or decree rendered on the merits, without fraud or collu-
_______________
* FIRST DIVISION.
1 The original petitioner in this case was Panfilo F. Abalos. After his death on April 23, 2003, he was
substituted, with prior leave of court, by his children, namely: Florentina Abalos-Castro, Rustica Abalos-Ricardo,
Magdalina Abalos-Garcia, Wilfredo Abalos and Vila Abalos-Buada (Rollo, pp. 178-183).
253sion, by a court of competent jurisdiction, upon any matter within its jurisdiction,
is conclusive of the rights of the parties or their privies, in all other actions or suits in the
same or any other judicial tribunal of concurrent jurisdiction on the points and matters in
issue in the first suit. For the preclusive effect of res judicata to be enforced, however, the
following requisites must be present: (1) the judgment or order sought to bar the new action
must be final; (2) the decision must have been rendered by a court having jurisdiction over
the subject matter and the parties; (3) the disposition of the first case must be a judgment
on the merits; and (4) there must be between the first and second action, identity of parties,
subject matter and causes of action.
Same; Same; Actions; Intervention; Intervention is not compulsory or mandatory but
merely optional and permissive.—Panfilo, the father of petitioners, should have impleaded
respondents when he filed Civil Case No. 15465 since at that time the latter were already
claiming ownership over the subject fishponds, which were transferred in their names
prior to the commencement of the case. Petitioners cannot shift to respondents the burden
of joining the case because they are not duty bound to intervene therein and they have
every right to institute an independent action: First, intervention is not compulsory or
mandatory but merely optional and permissive; and Second, as the persons who are in
actual possession of the fishponds they claim to own, respondents may wait until their
possession are in fact disturbed before taking steps to vindicate their rights.
Understandably, at the time of the institution and pendency of Civil Case No. 15465,
respondents still had no definite idea as to how the very nature of the partition case could
actually affect their possession.
Same; Same; Even if res judicata requires not absolute but substantial identity of
parties, still there exists substantial identity only when the “additional” party acts in the
same capacity or is in privity with the parties in the former action.—Even if res
judicatarequires not absolute but substantial identity of parties, still there exists
substantial identity only when the “additional” party acts in the same capacity or is in
privity with the parties in the former action. In this case, while it is true that respondents
remember that, as shown by their documents of acquisition, they became254owners of the
subject fishponds not through Faustino alone but also from a third person (i.e., Maria
Abalos). Respondents are asserting their own rights and interests which are distinct and
separate from those of Faustino’s claim as a hereditary heir of Francisco Abalos. Hence,
they cannot be considered as privies to the judgment rendered in Civil Case No. 15465.
Unfortunately for petitioners, they relied solely on their untenable defense of res
judicata instead of contesting the genuineness and due execution of respondents’
documentary evidence.
Actions; Partition; Parties; Pleadings and Practice; In an action for partition, all other
persons interested in the property shall be joined as defendants—not only the co-heirs but
also all persons claiming interests or rights in the property subject of partition are
indispensable parties.—Panfilo erred in repeatedly believing that there was no necessity
to implead respondents as defendants in Civil Case No. 15465 since, according to him, the
necessary parties in a partition case are only the co-owners or co-partners in the
inheritance of Francisco Abalos. On the contrary, the Rules of Court provides that in an
action for partition, all other persons interested in the property shall be joined as
defendants. Not only the co-heirs but also all persons claiming interests or rights in the
property subject of partition are indispensable parties. In the instant case, it is the
responsibility of Panfilo as plaintiff in Civil Case No. 15465 to implead all indispensable
parties, that is, not only Faustino and Danilo but also respondents in their capacity as
vendees and donees of the subject fishponds. Without their presence in the suit the
judgment of the court cannot attain real finality against them. Being strangers to the first
case, they are not bound by the decision rendered therein; otherwise, they would be
deprived of their constitutional right to due process.
Same; Same; An action for partition is at once an action for declaration of co-
ownership and for segregation and conveyance of a determinate portion of the properties
involved.—It must be stressed that in a complaint for partition, the plaintiff seeks, first, a
declaration that he is a co-owner of the subject properties; and second, the conveyance of
his lawful shares. An action for partition is at once an action for declaration of co-ownership
and for segregation and conveyance of a determinate portion of the properties involved.
255
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
Perpetuo G. Paner for petitioner.
Tanopo & Serafica Cosme for respondents.
AZCUNA, J.:
This petition for review on certiorari under Rule 45 of the Rules on Civil
Procedure assails the August 31, 2001 Decision 2 and November 20, 2002
Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 39138, which affirmed
with modification the May 25, 1992 Decision4 of the Regional Trial Court (RTC) of
Lingayen, Pangasinan, Branch 39, in Civil Case No. 16289.
Prologue
On October 30, 1978, petitioners’ father, Panfilo Abalos, filed before the RTC of
Lingayen, Pangasinan, a complaint5docketed as Civil Case No.
15465 for Partition, Annulment of Certain Documents, Accounting and
Damages against Faustino Abalos, his brother, and Danilo Abalos, his nephew and
the only surviving heir of his brother Pedro Abalos. In the amended
complaint,6 Panfilo alleged that their father/grandfather, Francisco Abalos, died
intestate and was survived by his wife, Teodorica, and their children, namely:
Maria, Faustino, Pedro, Roman and Panfilo; that at the time of his death,
Francisco left the following real properties:
_______________
2 Penned by Associate Justice Andres B. Reyes, Jr., with Associate Justices B.A. Adefuin-De la
Cruz and Mercedes Gozo-Dadole, concurring.
3 Rollo, p. 58.
4 Penned by Judge Eugenio G. Ramos.
5 Evidence Folder for the Petitioners, pp. 1-5.
6 Rollo, pp. 59-65.
256
xxx xxx xxx
a.) A parcel of residential land situated in Linoc, Binmaley, Pangasinan, containing
an area of 1,020 sq. meters, bounded on the North by Leoncio Dalmacio; On the East by
Dimas Perez; On the South by Callejon; And on the West by Magno Dalmacio; declared
under Tax Declaration No. 121 in the name of Francisco Abalos and assessed at P255.50;
[n]ot registered under Act 496 [or] under the Spanish [M]ortgaged Law[;]
b.) A parcel of unirrigated riceland situated in Linoc, Binmaley, Pangasinan,
containing an area of 841 sq. meters, bounded on the North by Callejon; On the South by
Roberto Aquino; On the East by Eulalio Javier; And on the West by Hipolito Perez. It is
originally covered by Tax Declaration in the name of Francisco Abalos now covered by Tax
Declaration No. 14457 in the name of Faustino Abalos and assessed at P20.00[;] [n]ot
registered under Act 496 [or] under the Spanish [M]ortgaged Law;
c.) A parcel of unirrigated riceland situated in Linoc, Binmaley, Pangasinan,
containing an area of 1,196 sq. meters, bounded on the North by Callejon; On the East by
Estanislao Ferrer; On the South by Saturnino Aquino; And on the West by Hipolito Perez[.]
It is originally declared in the name of Francisco Abalos and now covered by Tax
Declaration No. 14458 in the name of Faustino Abalos and assessed at P30.00;
d.) A parcel of fishpond situated in Linoc, Binmaley, Pangasinan, containing an area
of 1,158 sq. meters, bounded on the North by Doyao River; On the East by Hipolito Perez;
On the South by Leoncio Dalmacio; And on the West by Teodoro Abalos. It is originally
declared in the [name] of Francisco Abalos and now covered by Tax Declaration No. 21592
in the name of Faustino Abalos and assessed at P370.00;
e.) A parcel of fishpond situated in Linoc, Binmaley, Pangasinan, containing an area
of 1,158 sq. meters, bounded on the North by Leoncio Dalmacio; On the East by Teodoro
Abalos; On the South by Leoncio Dalmacio; And on the West by Evaristo Dalmacio. It is
originally declared in the name of Francisco Abalos and now covered by Tax Declaration
No. 21591 in the name of Faustino Abalos and assessed at P370.00;
f.) A parcel of unirrigated riceland situated in Linoc, Binmaley, Pangasinan, containing
an area of 950 sq. meters[,] bounded on the North by Liberato Gonzalo; On the East by
Severina Catalan;
257On the South by Severina Catalan; And on the West by Barrio Road of Linoc[;]
[d]eclared under Tax Declaration No. 124 in the [name] of Francisco Abalos and [a]ssessed
at P20.00;
g.) A parcel of fishpond situated in Canaoalan, Binmaley, Pangasinan, containing an
area of 2,480 sq. meters, bounded on the North by Francisco Deogracias; On the East by a
Path; On the South by Ponciano Cayabyab; And on the West by Ponciano Cayabyab[;]
[d]eclared under Tax Declaration No. 122 in the name of Francisco Abalos and assessed at
P70.00;
h.) A parcel of fishpond situated in Canaoalan, Binmaley, Pangasinan, containing an
area of 1,585 sq. meters, bounded on the North by Adriano Gonzalo; On the East by
Florencio Perez; On the South by Pioquinto Ferrer; And on the West by Pastor Terrado[;]
[d]eclared under Tax Declaration No. 123 in the name of Francisco Abalos and assessed at
P60.00;
i.) A parcel of little fishpond adjoining and North of the land described in paragraph
4 sub-paragraph (a) of this complaint whose Tax Declaration could not be produced by the
plaintiff;7
xxx xxx xxx
that said properties were administered by Teodorica; that following their mother’s
death, there was a verbal agreement among Faustino, Pedro and Panfilo that
Faustino would administer all the properties left by their parents except those
given by Teodorica to each of the siblings as their partial advance inheritance; that
taking undue advantage of his position and in clear breach of the trust and
confidence reposed on him, Faustino, by means of fraud and machination, took
possession of the properties given to Maria and Roman upon their death and
transferred some of the administered properties in his name and/or in the name of
his heirs or disposed of them in favor of third parties; that since his administration
of the properties, Faustino has not made any accounting of the produce,
appropriating them almost to himself; and that Panfilo repeatedly demanded the
partition of
_______________
7 Evidence Folder for the Petitioners, pp. 1-3.
258the properties but Faustino refused to do so despite earnest efforts towards
amicable settlement.
After Panfilo rested his case and following the postponements at the instance
of defendants, the trial court, upon motion, declared that Faustino and Danilo
were deemed to have waived their right to present evidence. 8 On February 21,
1984, RTC Branch 37 of Lingayen, Pangasinan, rendered its Decision, 9 the
dispositive portion of which stated:
“WHEREFORE, judgment is hereby rendered ordering:
i. the partition of the intestate estate of the deceased Francisco Abalos in the following
manner
a. to the plaintiff, Panfilo Abalos, is the fishpond, Parcel D referred to as “Duyao”; and ½
of fishpond, Parcel H referred to as “Pinirat” plus his advance inheritance, Parcel F
referred to as “Manga”;
b. to defendant, Faustino Abalos, is the residential land where his house stands and
parcels A to I, plus his advance inheritance, Parcels [B] and C;
c. to defendant, Danilo Abalos, is that fishpond, parcel E referred to as “Emong,” and the
1/2 portion of the fishpond, Parcel H referred to as “Pinirat” and his advance
inheritance of his father Pedro Abalos, Parcel G.
ii. the defendant Faustino Abalos to reimburse to plaintiff the total amount of
P19,580.00, Philippine Currency, as plaintiff’s lawful share from 1944;
iii. the annulment of all documents and/or instruments which transferred said
properties and are considered inconsistent with the above partition;
iv. the dismissal of defendants’ counterclaim;
v. the defendants to pay the costs of the suit.
SO ORDERED.” 10
_______________
8 Id., at p. 10.
9 Id., at pp. 6-11.
10 Id., at pp. 10-11.
259Despite the filing of a notice of appeal beyond the reglementary period, the
trial court still gave due course to the appeal of Faustino and Danilo; thus, Panfilo
filed a petition for certiorari before this Court, which subsequently referred the
case to the Intermediate Appellate Court (IAC, now the Court of Appeals). 11 The
IAC granted the petition and denied the motion for reconsideration.12 On October
30, 1985, this Court affirmed the Decision.13 Upon the issuance of an entry of
judgment on November 4, 1985, the IAC ordered the remand of the case to the
RTC.14Thereafter, on December 11, 1985, the trial court issued a writ of execution
in favor of Panfilo.15
The Case
The instant case arose when petitioners’ father, Panfilo, began to execute the
Decision in Civil Case No. 15465. In opposition, respondents, who are children and
in-laws of the now deceased Faustino, filed on January 8, 1986 a case for Quieting
of Title, Possession, Annulment of Document and Damages with Preliminary
Injunction.16 Docketed as Civil Case No. 16289, the complaint alleged, among
others, that:
xxx xxx xxx
III
Plaintiffs are the absolute owners and in actual possession of the following parcels of
land more particularly described, to wit:
(a.) A parcel of land (fishpond) with an approximate area of 289.5 square meters, more or
less, located at Linoc, Binmaley, Pangasinan. Bounded on the North by the Duyao River;
on the East by
_______________
11 Rollo, p. 113.
12 Id., at pp. 114-121.
13 Records, p. 54.
14 Id., at p. 249.
15 Id., at pp. 31-32.
16 Id., at pp. 1-12.
260Faustino Abalos before, now Romulo Abalos; on the South by Leoncio Dalmacio; and on
the West by Romulo Abalos. Declared in the name of Aurora A. Bucal under Tax [Dec.] No.
1568 of the current land records of Binmaley, Pangasinan; assessed value—P150.00;
(b.) A parcel of riceland located at Linoc, Binmaley, Pangasinan, containing an area
of 1,196 square meters, more or less. Bounded on the North by Callejon; on the East by
Estanislao Ferrer; on the South by Saturnino Aquino; and on the West by Hipolito Ferrer.
Declared in the names of Artemio F. Abalos and Mauro F. Abalos under Tax [Dec.] No.
1007 of the land records of Binmaley, Pangasinan; assessed value—P260.00;
(c.) A parcel of residential land located at Linoc, Binmaley, Pangasinan, with an area
of 1,029 square meters, more or less. Bounded on the North by Leoncio Dalmacio; on the
East by Dimas Perez; on the South by Callejon; and on the West by Magno Dalmacio.
Declared in the name of Romulo F. Abalos under Tax [Dec.] No. 35 of the current land
records of Binmaley, Pangasinan; assessed value—P6,120.00;
(d.) A portion of fishpond located at Linoc, Binmaley, Pangasinan, with an area of
289.5 square meters, more or less. Bounded on the North by the Duyao River; on the East
by Faustino Abalos; on the South by Leoncio Dalmacio; and on the West by Teodoro Abalos.
Declared in the name of Romulo F. Abalos under Tax [Dec.] No. 33 of the current land
records of Binmaley, Pangasinan; assessed value—P180.00;
(e.) A portion (eastern) of fishpond located at Linoc, Binmaley, Pangasinan, with an
area of 579 square meters, more or less. Bounded on the North by Leoncio Dalmacio; on
the East by Teodoro Abalos; on the South by Leoncio Abalos; and on the West by Evaristo
Dalmacio. Declared in the names of Artemio F. Abalos and Mauro F. Abalos under Tax
[Dec.] No. 1009 of the land records of Binmaley, Pangasinan; assessed value—P340.00;
 (f.) A parcel of fishpond located at Canaoalan, Binmaley, Pangasinan, with an area of
1,506 square meters, more or less. Bounded on the North by Adriano Gonzalo; on the East
by Florencio Perez; on the South by Pioquinto Ferrer; and on the West by Pastor Terrado.
Declared in the names of Romulo F. Abalos and Mauro F. Abalos under Tax [Dec.] No. 1314
of the land records of Binmaley, Pangasinan; assessed value—P970.00;261
IV
Parcel (a) above-described belongs in absolute ownership to spouses Aurora A. Bucal
and Demetrio Bucal who are in actual possession thereof as such, having acquired the
same by absolute sale from Romulo F. Abalos who in turn bought the same from Maria
Abalos; that the latter in turn acquired the same by inheritance from her deceased parents,
Francisco Abalos and Teodorica Ferrer, who died on May 4, 1928 and June 2, 1945,
respectively. A copy of the sale from Maria Abalos to Romulo F. Abalos is hereto attached
as ANNEX “A” while the sale by Romulo F. Abalos to Aurora A. Bucal is hereto attached
as ANNEX “B.” A copy of Tax [Dec.] No. 1568 covering said land is hereto attached as
ANNEX “C”;
V question from anyone, much less from the defendant herein. Said owners have likewise
Parcel (b) above-described belongs in absolute common ownership to the spouses
Artemio F. Abalos and Ligaya U. Abalos and spouses Mauro F. Abalos and Luzviminda R.
Abalos who acquired the same by absolute sale in 1978 from Faustino Abalos as shown by
a deed a copy of which is hereto attached as ANNEX “D”; that the latter acquired the same
by absolute sale from Bernardo Victorio in 1914, and that Faustino Abalos donated the
same in consideration of his marriage with Teodora Ferrer as shown by a deed a copy of
which is hereto attached as ANNEX “E.” A copy of Tax [Dec.] No. 1007 is hereto attached
as ANNEX “F”;
VI
Parcel (c) above-described belongs in absolute ownership to the spouses Romulo F.
Abalos and Jesusa O. Abalos and are in actual possession as such having acquired the
same by absolute sale from Aurora A. Bucal as shown by a deed a copy of which is hereto
attached as ANNEX “G”; that Aurora A. Bucal in turn bought the same from Maria Abalos
as shown by a deed a copy of which is hereto attached as ANNEX “H”; and that Maria
Abalos inherited the same land from her deceased parents;
VII
Parcel (d) above-described belongs in absolute ownership to spouses Romulo F. Abalos and
Jesusa O. Abalos having acquired the same in 1978 by means of a deed of quitclaim and
renunciation of rights a copy of which is hereto attached as ANNEX “I”; that Romulo 262F.
Abalos declared the same for taxation purposes as shown by Tax [Dec.] No. 33 a copy of
which is hereto attached as ANNEX “J”;
VIII
Parcel (e) above-described belongs in common absolute ownership to the spouses
Artemio F. Abalos and Ligaya U. Abalos and spouses Mauro F. Abalos and Luzviminda R.
Abalos having acquired the same from Maria Abalos as shown by two (2) documents copies
of which are hereto attached as ANNEXES “K” and “L”; that Faustino and Maria bought
the same from Genoveva Perez as shown by a deed a copy of which is hereto attached as
ANNEX “M”; that Genoveva Perez in turn bought the same from Teodoro Abalos as shown
by a deed a copy of which is hereto attached as ANNEX “N”; that Mauro F. Abalos and
Artemio F. Abalos have declared the land in their names for taxation purposes as shown
by Tax [Dec.] No. 1009 a copy of which is hereto attached as ANNEX “O”;
IX
Parcel (f) above-described belongs in absolute common ownership to spouses Romulo F.
Abalos and Jesusa O. Abalos and spouses Mauro F. Abalos and Luzviminda R. Abalos and
are in actual possession as such having acquired the same by absolute sale in 1978 as
shown by a deed a copy of which is hereto attached as ANNEX “P”; that Faustino in turn
inherited the same from his deceased parents; and that the present owners have declared
the same for taxation purposes as shown by Tax [Dec.] No. 1314 a copy of which is hereto
attached as ANNEX “Q”;
X
The possession of the present owners as well as their predecessors-in-interest have
always been in good faith, peaceful, public, exclusive, adverse, continuous and in the
concept of absolute owners since their respective acquisition [up to] the present without
religiously paid the taxes due on the lands [up to] the current year;
17
xxx xxx x x x”
_______________
17 Id., at pp. 2-6.
263Respondents claimed that on two separate occasions in December 1985
Panfilo sought to execute the decision by attempting to take possession of the lands
in question through the use of force, threat, violence and intimidation. In addition,
to satisfy the damages awarded to Panfilo, the deputy sheriff also levied upon
parcels (b) and (c) above-described for the purpose of selling the same at public
auction, in regard to which they also filed their respective notice of third-party
claim. Respondents argued that to compel them to abide by the writ of execution
and notice of levy issued by the court in Civil Case No. 15465 would amount to
deprivation of property without due process of law because the decision rendered
in said case is not binding upon them as they were not made parties thereto and
they became owners thereof prior to the institution of the case.
On January 8, 1986, the trial court directed the parties to maintain the status
quo pending the resolution on the motion for the issuance of the writ of preliminary
injunction.18
In the Objection to the Issuance of Writ of Preliminary
Injunction,19 Answer,20 and Memorandum of Authorities21filed by Panfilo, he
stressed that the title, right or interest of respondents with respect to the
fishponds mentioned in sub-paragraphs (a), (d), and (f) of paragraph III of the
Complaint had already been declared null and void in Civil Case No. 15465 by a
co-equal and competent court and affirmed with finality by this Court. It was
averred that respondents were never in possession of the fishponds as he was the
one peacefully placed in its possession by the deputy sheriff. For failing to
intervene in Civil Case No. 15465, Panfilo asserted that respondents are now
barred by the principles of res judicata and estoppel in pais.
_______________
18 Id., at p. 46.
19 Id., at pp. 51-53.
20 Id., at pp. 57-63.
21 Id., at pp. 66-67.
264On July 21, 1986, however, the trial court ordered the issuance of a writ of
preliminary injunction.22 Concurring with the position of respondents, it held that
the principle of res judicata does not apply since there is no identity of parties,
subject matter, and causes of action between Civil Case No. 15465 and the present
case. In Civil Case No. 15465, the parties are Panfilo, as plaintiff, and Faustino
Abalos and Danilo Abalos, as defendants, while in the present case, the parties are
the children of Faustino Abalos and their respective spouses, as plaintiffs, and
Panfilo, as defendant; in the former, the principal action is for partition while in
the latter, the suit is for quieting of title, possession, annulment of document and
damages. The trial court opined that while it is true that respondents Aurora,
Artemio, Romulo, and Mauro are legitimate children and compulsory heirs of
Faustino Abalos, the documents showing their acquisition of the properties in
question revealed that they became owners thereof not through their father alone
but also by way of third persons who were not parties in Civil Case No. 15465.
Moreover, they acquired their ownership prior to the institution of said case.
Assailing the aforesaid Order, Panfilo filed a petition for certiorari before this
Court. In a Resolution, the petition was referred to the CA, which later dismissed
the same for lack of merit.23 The CA ruled that, for not being impleaded as parties,
respondents are considered as “third persons” in Civil Case No. 15465 since they
did not in any way participate or intervene in the partition. Neither did the trial
court violate the principle that no court has the power to interfere by injunction
with the judgments or decrees of a court of concurrent or coordinate jurisdiction
having equal power. The CA viewed that the writ of execution was issued for the
specific purpose of levying upon the properties of Faustino Abalos, not that of
respondents, as the judgment debtor in Civil Case No. 15465.
_______________
22 Id., at pp. 142-146.
23 Id., at pp. 162, 323-331.
265
On December 16, 1987, this Court, in G.R. No. 77965 entitled “Panfilo Abalos
v. Aurora Bucal, et al. and Court of Appeals,” affirmed the CA decision, which
resolution became final and executory on August 2, 1988.24
Upon motion of respondents, the trial court ordered the issuance of an alias writ
of preliminary injunction on March 14, 1989.25 Again, Panfilo challenged the
order via petition for certiorari with prohibition before the CA but the same was
denied.26 When the incident was elevated to this Court, it was dismissed on
November 15, 1989. The resolution became final and executory on February 9,
1990.27
Meanwhile, in the proceedings before the trial court, Panfilo and respondents
submitted their respective pre-trial briefs.28 On October 23, 1989, the trial court
issued the Pre-trial Order.29 Taking into account the admissions made by the
parties, particularly the fact that Panfilo claimed proprietary rights only with
respect to parcels (a), (d) and (f) mentioned in the complaint, the court delimited
the issues for resolution as follows:
“The factual issues are: (1) With respect to parcels A, D, and F, whether or not the
plaintiffs claiming ownership and possession over said parcels are the lawful owners and
possessors thereof by virtue of genuine and duly executed documents of sale, quitclaim and
renunciation of rights; (2) Whether or not plaintiffs’ predecessors-in-interest were the
lawful owners and possessors of parcels A, D and F; (3) Whether or not Faustino Abalos
and his wife [Teodorica] Ferrer were awarded the properties subject of partition
proceedings in Civil Case No. 15465; (4) Whether or not by virtue of the decision rendered
in that partition proceedings, the fishpond referred to as Duyao which is parcel A, D and
F was awarded; (5) Whether or not
_______________
24 Id., at p. 321.
25 Id., at pp. 333-336, 383.
26 Id., at pp. 452-465, 501-503, 537.
27 Id., at pp. 651-652.
28 Id., at pp. 407-410, 439-443.
29 Id., at pp. 555-559.
266pursuant to the decision of the Supreme Court in appealed case No. 713355 the
defendant Panfilo Abalos was placed in possession by the Deputy Sheriff Romulo Jimenez
duly assisted by the members of the police force of Binmaley, sometime on or about the
last part of December 1985.
The legal issues are: (1) Whether or not the decision in Civil Case No. 15465 entitled
“Panfilo Abalos versus Faustino Abalos[”] is binding upon the plaintiffs who were not
impleaded as party litigants either as plaintiffs or defendants; (2) What is the legal basis
of the plaintiffs to file action to quiet title against the defendant?”
30
Likewise, in the course of the trial and in their respective memoranda, 31 the
parties admitted that parcels (a) and (d) are portions of a fishpond locally known
as Duyao32 and are parts of parcel (d) stated in the Complaint of Civil Case No.
15465, which was to be held in common pro-indiviso by the heirs of Francisco
Abalos.
Thus, the controversy was narrowed down to only two (2) properties, namely:
the fishpond located at Linoc, Binmaley, Pangasinan, locally known as Duyao, and
the fishpond located at Canaoalan, Binmaley, Pangasinan, locally known
as Pinirat.
On May 25, 1992, RTC Branch 39 of Lingayen, Pangasinan, rendered its
Decision,33 ordering thus:
“WHEREFORE, judgment is hereby rendered declaring:
1. That the plaintiffs-spouses Aurora Bucal and Demetrio Bucal are the absolute
owners of one-fourth (1/4) portion pro-indiviso of that fishpond which is locally known as
Duyao;
2. That the defendant Panfilo Abalos is the absolute owner of three-fourth (3/4)
portion pro-indiviso of that fishpond locally known as “Duyao”;
_______________
30 Id., at p. 558.
31 Id., at pp. 750-770, 775-812.
32 Also spelled as “Doyao” in the records.
33 Records, pp. 813-819.
267
3. That the plaintiffs have no right whatsoever over the fishpond locally known as
“Pinirat” and confirming the adjudication thereof in Civil Case No. 15465; [and]
4. No award of damages, and no costs.
SO ORDERED.” 34
The trial court made the following factual findings: that the original owners of
the two fishponds were spouses Francisco Abalos and Teodorica Ferrer, who died
on May 4, 1928 and June 2, 1945, respectively; that the spouses had five (5)
children, namely: (a) Maria, who died single on March 20, 1972; (b) Roman, who
died single on June 10, 1944; (c) Panfilo, petitioner herein; (d) Pedro, who died on
May 11, 1971 and was survived by his only child, Danilo; and (e) Faustino, whose
children Aurora, Artemio, Romulo and Mauro are among the respondents herein;
that Roman predeceased his mother, hence, when the latter died only four of the
siblings inherited the Duyao, becoming its pro indiviso co-owners; that on
November 11, 1968, Maria sold her 1/4 share to Romulo, who, in turn, sold the
same to Aurora; that in view of the sale, the said portion of the Duyao should have
been excluded from the Decision in Civil Case No. 15465 for the reason that said
case refers to the partition of the estate only of spouses Francisco and Teodorica;
that Romulo is not the owner the other 1/4 portion of the Duyao for failure to
establish his ownership thereon and also considering that it could have been the
same 1/4 portion that he sold to Aurora; and that the Decision in Civil Case No.
15465 has res judicata effect with respect to the Pinirat since the deed of sale
executed by Faustino in favor of Romulo and Mauro was simulated and employed
merely to defraud the other heirs.
Both Panfilo and respondents elevated the case to the CA, assigning the alleged
errors of the trial court:
As to Panfilo—
_______________
34 Id., at p. 819.
2681. THE LOWER COURT ERRED IN ADJUDICATING ONE-FOURTH PORTION
OF THE FISHPOND KNOWN AS “DUYAO” TO PLAINTIFFS DEMETRIO BUCAL AND
AURORA ABALOS- BUCAL, NOTWITHSTANDING THAT SAID ENTIRE FISHPOND
WAS AWARDED TO DEFENDANT PANFILO ABALOS IN CIVIL CASE NO. 15465,
ENTITLED “PANFILO ABALOS VS. FAUSTINO ABALOS & DANILO ABALOS.”
2. THE LOWER COURT ERRED IN ADJUDICATING ONE-FOURTH PORTION OF
THE FISHPOND KNOWN AS “DUYAO” TO PLAINTIFFS DEMETRIO BUCAL AND
AURORA ABALOS-BUCAL, AS ALLEGED INHERITANCE OF MARIA ABALOS FROM
HER LATE PARENTS, NOTWITHSTANDING THAT MARIA ABALOS ALREADY
INHERITED FROM HER LATE PARENTS THE PARCEL OF RESIDENTIAL LAND
DESCRIBED AS PARCEL (C) IN PLAINTIFF’S COMPLAINT.
3. THE LOWER COURT ERRED IN ADJUDICATING ONE-FOURTH PORTION OF
THE FISHPOND KNOWN AS “DUYAO” TO PLAINTIFFS DEMETRIO BUCAL AND
AURORA ABALOS-BUCAL, NOTWITHSTANDING THAT THE FINAL DECISION IN
CIVIL CASE [15465] EXPRESSLY ANNULLED ALL DOCUMENTS AND
INSTRUMENTS WHICH TRANSFERRED SAID PROPERTIES AND ARE
CONSIDERED INCONSISTENT WITH THE PARTITION ORDERED IN SAID CIVIL
CASE.
4. THE LOWER COURT ERRED IN NOT TREATING THE PLAINTIFFS AS IN
ESTOPPEL.
5. THE LOWER COURT HAD NO JURISDICTION OVER THE SUBJECT MATTER
OF THE PRESENT CASE. 35
As to respondents—
1. THE TRIAL COURT ERRED IN NOT FINDING THAT THE LATE SPOUSES
FRANCISCO ABALOS AND TEODORICA FERRER LEFT AN INTESTATE ESTATE
CONSISTING OF FIVE PARCELS OF LAND ONLY.
2. THE TRIAL COURT ERRED IN NOT FINDING THAT ONE-FOURTH PRO
INDIVISO OF THE LAND KNOWN AS [“DUYAO”] WAS THE SHARE OF FAUSTINO
ABALOS, WHICH
_______________
35 CA Rollo, pp. 51-52.
269HE QUITCLAIMED IN FAVOR OF HIS SON ROMULO ABALOS, AND IN
APPLYING RES JUDICATA.
 3. THE TRIAL COURT ERRED IN NOT FINDING THAT THE LAND KNOWN AS
“PINIRAT” WAS THE SHARE OF FAUSTINO ABALOS, WHICH HE SOLD TO HIS
SONS, THE PLAINTIFFS ROMULO AND MAURO ABALOS, AND IN APPLYING RES
JUDICATA.
4. THE TRIAL COURT ERRED IN VOIDING THE INSTRUMENTS OF TRANSFER
EXECUTED BY FAUSTINO ABALOS IN FAVOR OF ROMULO ABALOS OF HIS 1/4
SHARE OF THE [“DUYAO”] LOT AND IN FAVOR OF MAURO ABALOS AND ROMULO
ABALOS OF THE “PINIRAT” LOT.
5. THE TRIAL COURT ERRED IN NOT UPHOLDING THE CLAIM OF PLAINTIFF
ROMULO ABALOS OVER 1/4 OF THE [“DUYAO”] LOT AND THE CLAIM OF
PLAINTIFFS MAURO ABALOS AND ROMULO ABALOS OVER THE [“PINIRAT”]
LOT. 36
On August 31, 2001, the CA rendered its Decision.37According to the appellate
court, the first and second assigned errors of Panfilo are unmeritorious on the
ground that the disposition of the trial court in Civil Case No. 15465 insofar as
the Duyao is concerned has no factual and legal basis. It also held untenable his
third and fourth assigned errors, noting that the principles of res judicataand
estoppel are not applicable in this case since respondents were not made parties
to Civil Case No. 15465 despite their acquisition of the contested parcels prior to
the commencement of said case. Finally, Panfilo’s fifth assigned error was rejected,
saying that this Court already settled the issue of res judicata in G.R. No. 77965
when petitioner questioned the propriety of the issuance of the writ of preliminary
injunction.
On the other hand, the CA ruled that the first assigned error of respondents
was rendered moot and academic since it was stipulated and agreed upon during
the pre-trial of the
_______________
36 Id., at pp. 91-92.
37 Id., at pp. 183-201.
270present case that the dispute covers only parcels (a), (d) and (f). The second
assigned error, nonetheless, was affirmed, observing that the Duyao property was
co-owned pro-indiviso by the four remaining children of spouses Francisco and
Teodorica; hence, Faustino’s transfer of his 1/4 share during his lifetime in favor
of his son Romulo is perfectly legal. However, the CA denied the third assigned
error as it found that the Pinirat was Roman Abalos’ advance legitime, which,
upon his death, was inherited by his remaining siblings. Since Maria subsequently
died without transferring her share, her part of the Piniratshould be divided
among Pedro (which is transmitted to Danilo), Faustino and Panfilo. As Faustino’s
share over the Pinirat is with respect to 1/3 portion thereof, he could validly convey
only such part to Romulo and Mauro.
The CA disposed:
“WHEREFORE, premises considered, the assailed Decision of the court a quo in Civil
Case No. 16289 is hereby modified, as follows:
1. Being co-owners of Duyao Fishpond, plaintiffs-appellants Spouses Aurora Bucal and
Demetrio Bucal, plaintiffs-appellants Spouses Romulo Abalos and Jesusa O. Abalos,
defendant-appellant Panfilo Abalos and Danilo Abalos, in representation of his
deceased father, Pedro Abalos, should divide and distribute the same equally;
2. One-third of the Pinirat Fishpond is co-owned by plaintiffs-appellants Spouses Romulo
Abalos and Jesus Abalos, and Spouses Mauro Abalos and Luzviminda R. Abalos; That
defendant-appellant Panfilo Abalos is the sole owner of another 1/3 portion of the
Pinirat fishpond; While the remaining 1/3 portion is for Danilo Abalos, in
representation of his deceased father Pedro Abalos;
3. No pronouncement as to cost.
SO ORDERED.” 38
_______________
38 Id., at pp. 200-201.
271
Panfilo moved for reconsideration of the Decision but was denied. 39
Hence this petition.
Echoing the same grounds relied upon by their father, petitioners now claim
that the CA seriously erred in failing to consider the finality of the Decision in
Civil Case No. 15465. According to them, the finding that respondents became
owners of the subject properties prior to the institution of said case in effect
modified the disposition and distribution previously ordered. Petitioners opine
that when the CA ruled that respondents have acquired ownership of the
questioned parcels prior to the commencement of Civil Case No. 15465 it had
disregarded the conclusiveness of a final judgment rendered in said case which
decreed the annulment of all documents and/or instruments transferring said
properties and were considered inconsistent with the order of partition. They
contend that sustaining the conclusion of the CA would allow the re-opening of the
factual issue of whether the documents, which were the source of respondents’
alleged title, were valid—an issue that was dealt with in an extensive hearing on
the merits conducted in said case and supported by testimonial and documentary
evidence for the purpose. Being the prevailing party in Civil Case No. 15465, in
regard to which respondents had remained silent and did not even care to
intervene or question, petitioners assert that they already acquired a vested right
over the entire Duyao and 1/2 portion of the Pinirat. They also oppose the CA’s
failure to recognize that estoppel and laches have already set in to bar respondents
from further pursuing their claims.
The petition is not meritorious.
 Res judicata means “a matter adjudged; a thing judicially acted upon or
decided; a thing or matter settled by judgment.” It lays the rule that an existing
final judgment or decree rendered on the merits, without fraud or collusion, by a
court of
_______________
39 Id., at pp. 204-208, 255.
272competent jurisdiction, upon any matter within its jurisdiction, is conclusive of
the rights of the parties or their privies, in all other actions or suits in the same or
any other judicial tribunal of concurrent jurisdiction on the points and matters in
issue in the first suit.40
For the preclusive effect of res judicata to be enforced, however, the following
requisites must be present: (1) the judgment or order sought to bar the new action
must be final; (2) the decision must have been rendered by a court having
jurisdiction over the subject matter and the parties; (3) the disposition of the first
case must be a judgment on the merits; and (4) there must be between the first
and second action, identity of parties, subject matter and causes of action. 41
In the instant case, the fourth requisite, in particular the identity of parties, is
clearly wanting.
As found by the CA, this Court, through our earlier resolution in G.R. No.
77965, already settled that res judicata does not apply in this case. In G.R. No.
77965, which Panfilo instituted to challenge the propriety of the writ of
preliminary injunction issued by the trial court, this Court agreed with the CA’s
disposition that respondents are considered as third persons with respect to Civil
Case No. 15465 since they were not impleaded as defendants therein. This Court
held as in accordance with law and jurisprudence the CA’s opinion that all those
who did not in any way participate or intervene in
_______________
40 See Khemani v. Heirs of Anastacio Trinidad, G.R. No. 147340, December 13, 2007, 540 SCRA
83, 94, citing Oropeza Marketing Corp. v. Allied Banking Corp., 441 Phil. 551; 393 SCRA 278 (2002).
41 Heirs of Igmedio Maglaque v. Court of Appeals, G.R. No. 163360, June 8, 2007, 524 SCRA 234,
240; Heirs of Rosendo Lasam v. Umengan, G.R. No. 168156, December 6, 2006, 510 SCRA 496, 510;
and Rivera v. Heirs of Romualdo Villanueva, G.R. No. 141501, July 21, 2006, 496 SCRA 135, 140.
273the partition case are considered third persons within the contemplation of
Article 499 of the Civil Code.42
The foregoing rule still stands.
Indeed, Panfilo, the father of petitioners, should have impleaded respondents
when he filed Civil Case No. 15465 since at that time the latter were already
claiming ownership over the subject fishponds, which were transferred in their
names prior to the commencement of the case. Petitioners cannot shift to
respondents the burden of joining the case because they are not duty bound to
intervene therein and they have every right to institute an independent
action: First, intervention is not compulsory or mandatory but merely optional and
permissive;43 and Second, as the persons who are in actual possession of the
fishponds they claim to own, respondents may wait until their possession are in
fact disturbed before taking steps to vindicate their rights. Understandably, at the
time of the institution and pendency of Civil Case No. 15465, respondents still had
no definite idea as to how the very nature of the partition case could actually affect
their possession.
_______________
42 Art. 499 of the Civil Code provides:
Art. 499. The partition of a thing owned in common shall not prejudice third persons,
who shall retain the rights of mortgage, servitude, or any other real rights belonging to them
before the division was made. Personal rights pertaining to third persons against the co-
ownership shall also remain in force, notwithstanding the partition.
43 See Cruzcosa v. Hon. H. Concepcion, et al., 101 Phil 146, 150 (1957), as cited in California Bus
Lines, Inc. v. State Investment House, Inc., 463 Phil. 689, 711; 418 SCRA 297, 316 (2003), and Mabayo
Farms, Inc. v. Court of Appeals, 435 Phil. 112, 119; 386 SCRA 110, 116 (2002).
274
On the other hand, Panfilo had personal knowledge that respondents acquired
ownership of the properties prior to the filing of Civil Case No. 15465, that they
are in actual possession thereof, and that they have declared the lands in their
names for taxation purposes. Panfilo could not be ignorant of these because he
resided in the same locality where the properties are found. 44 Quite startling,
however, is that he did not bother to implead respondents in the partition case
despite all these and the fact that the defendants therein raised the point that
Faustino was not the owner of some of the lands in question and that they belong
to others not parties to the case.45 As his successors-in-interest, petitioners must
suffer from Panfilo’s evident omission.
Even if res judicata requires not absolute but substantial identity of parties,
still there exists substantial identity only when the “additional” party acts in the
same capacity or is in privity with the parties in the former action.46 In this
case, while it is true that respondents are legitimate children and relatives by
affinity of Faustino it is more important to remember that, as shown by their
documents of acquisition, they became owners of the subject fishponds not through
Faustino alone but also from a third person (i.e., Maria Abalos). Respondents are
asserting their own rights and interests which are distinct and separate from those
of Faustino’s claim as a hereditary heir of Francisco Abalos. Hence, they cannot be
considered as privies to the judgment rendered in Civil Case No. 15465.
Unfortunately for petitioners, they relied solely on their untenable defense of res
judicata instead of contesting the genuineness and due execution of respondents’
documentary evidence.
_______________
44 Records, p. 180.
45 Id., at p. 99.
46 Khemani v. Heirs of Anastacio Trinidad, G.R. No. 147340, December 13, 2007, 540 SCRA 83,
95.
275
Moreover, Panfilo erred in repeatedly believing that there was no necessity to
implead respondents as defendants in Civil Case No. 15465 since, according to
him, the necessary parties in a partition case are only the co-owners or co-partners
in the inheritance of Francisco Abalos. On the contrary, the Rules of Court
provides that in an action for partition, all other persons interested in the property
shall be joined as defendants.47 Not only the co-heirs but also all persons claiming
interests or rights in the property subject of partition are indispensable
parties.48 In the instant case, it is the responsibility of Panfilo as plaintiff in Civil
Case No. 15465 to implead all indispensable parties, that is, not only Faustino and
Danilo but also respondents in their capacity as vendees and donees of the subject
fishponds. Without their presence in the suit the judgment of the court cannot
attain real finality against them. Being strangers to the first case, they are not
bound by the decision rendered therein; otherwise, they would be deprived of their
constitutional right to due process.49
Finally, it must be stressed that in a complaint for partition, the plaintiff
seeks, first, a declaration that he is a co-owner of the subject properties;
and second, the conveyance of his lawful shares. An action for partition is at once
an action for declaration of co-ownership and for segregation and conveyance of a
determinate portion of the properties involved.50
Reyes-De Leon v. Del Rosario51 held:
“The issue of ownership or co-ownership, to be more precise, must first be resolved in
order to effect a partition of properties. This should be done in the action for partition itself.
As held in the case of Catapusan v. Court of Appeals:
‘In actions for partition, the court cannot properly issue an order to divide the property
unless it first makes a determination as to the existence of co-ownership. The court
must initially settle the issue of ownership, the first stage in an action for partition.
Needless to state, an action for partition will not lie if the claimant has no rightful
interest over the subject property. In fact, Section 1 of Rule 69 requires the party filing
the action to state in his complaint the ‘nature and the extent of his title’ to the real
estate. Until and unless the issue of ownership is definitely resolved, it would be
premature to effect a partition of the properties. x x x’ (citations omitted) 52
It is only properties owned in common that may be the object of an action for
partition; it will not lie if the claimant has no rightful interest over the subject
property. Thus, in this case, only the shares in the lots which are determined to
have been co-owned by Panfilo, Faustino and Danilo could be included in the order
of partition and, conversely, shares in the lots which were validly disposed of in
favor of respondents must be excluded therefrom. In this connection, the Court
sees no reason to depart from the findings of fact and the partition ordered by the
appellate court as these are amply supported by evidence on record. Furthermore,
the rule is that factual issues are beyond our jurisdiction to resolve since in a
petition for review under Rule 45 of the 1997 Rules of Civil Procedure this Court’s
power is limited only to review
_______________
51 G.R. No. 152862, July 26, 2004, 435 SCRA 232.
52 Id., at p. 239. See also Heirs of Velasquez v. Court of Appeals, 382 Phil. 438, 453-454; 325
SCRA 552, 566 (2000).
277questions of law—when there is doubt or difference as to what the law is on a
certain state of facts.53
WHEREFORE, the petition is DENIED and the August 31, 2001 Decision and
November 20, 2002 Resolution of the Court of Appeals in CA-G.R. CV No. 39138
are AFFIRMED.
No costs.
SO ORDERED.
Puno (C.J., Chairperson), Sandoval-Gutierrez, Corona and Leonardo-De
Castro, JJ., concur.
Petition denied, judgment and resolution affirmed.
Notes.—A party-in-intervention cannot be considered a principal in a prior
case for purposes of applying the principle of res judicata since the contrary goes
against the true import of the action of intervention as a mere subsidiary
proceeding without an independent life apart from the principal action as well as
the intrinsic character of the intervenor as a mere subordinate party in the main
case whose right may be said to be only in aid of the right of the original party.
(Islamic Directorate of the Philipppines vs. Court of Appeals, 272 SCRA 454 [1997])
Partition, in general, is the separation, division and assignment of a thing held
in common among those to whom it may belong. (Lopez vs. Court of Appeals, 398
SCRA 550 [2003])
 G.R. No. 118822. July 28, 1997. * Same; Same; Same; Words and Phrases; In a condominium, common areas and
G.O.A.L., INC., petitioner, vs. COURT OF APPEALS, OFFICE OF THE
PRESIDENT LEGAL AFFAIRS, HOUSING AND LAND USE REGULATORY
BOARD, RIZALINO SIMBILLO, WILLIAM ONG, HERMINIA MESINA, SELFA
MARTINEZ, FILOMENO TENG, RAFAEL JAVIER, FERNANDO DEL MUNDO,
MILDRED PAREJA, REMEDIOS LASQUETE, GEORGE CABIGAN and
ARCADIO SAMPANG, respondents.
Civil Law; Condominium Act; National Housing Authority; In alteration plans,
written approval of the National Housing Authority alone is not sufficient. It must be
coupled with the written conformity or consent of the duly organized homeowners
association or the majority of the lot buyers.—GOAL contends that the Court of Appeals
failed to appreciate the fact that the construction of the fifth floor was with the written
approval of public respondent HLURB as required by Sec. 22 of P.D. No. 957 which
provides—Sec. 22. Alteration of Plans.—No owner or developer shall change or alter the
roads, open spaces, infrastructures, facilities for public use and/or other form of subdivision
development as contained in the approved subdivision plan and/or represented in its
advertisements, without the permission of the Authority and the written conformity or
consent of the duly organized homeowners association, or in the absence of the latter, by
majority of the lot buyers in the subdivision (italics supplied). The above provision is clear.
We do not have to tussle with legal hermeneutics in the interpretation of Sec. 22 of P.D.
No. 957. The written approval of the National Housing Authority alone is not sufficient. It
must be coupled with the written conformity or consent of the duly organized homeowners
association or the majority of the lot buyers. Failing in this, the construction of the fifth
floor is violative of the decree invoked. The Court of Appeals simply applied the law, and
correctly so.
Same; Same; Same; Upon full payment of a unit, petitioner loses all its rights and
interests to the unit in favor of the buyer. Consequently, it has no right to use the certificate
of title of respondent Teng as collateral for a new loan. The title of Teng must be
______________
*FIRST DIVISION.
360
360 SUPREME COURT REPORTS ANNOTATED
G.O.A.L., Inc. vs. Court of Appeals
released to him as provided by law.—The Court observes the frequent allusion of
petitioner to its predicament brought about by the abandonment of the project by the first
contractor. But such is irrelevant in light of Sec. 25 of P.D. No. 957 as well as of
the Contract to Sell of the parties. While we emphathize with petitioner in its financial
dilemma we cannot make innocent parties suffer the consequences of the former’s lack of
business acumen. Upon full payment of a unit, petitioner loses all its rights and interests
to the unit in favor of the buyer. Consequently, it has no right to use the certificate of title
of respondent Teng as collateral for a new loan. The title of Teng must be released to him
as provided by law.
facilities are “portions of the condominium property not included in the units,” whereas, a
unit is “a part of the condominium property which is to be subject to private ownership.”—
In a condominium, common areas and facilities are “portions of the condominium property
not included in the units,” whereas, a unit is “a part of the condominium property which is
to be subject to private ownership.” Inversely, that which is not considered a unit should
fall under common areas and facilities. Hence, the parking spaces not being subject to
private ownership form part of the common area over which the condominium unit owners
hold undivided interest. As such, petitioner cannot invoke Sec. I, Art. III, of the Bill of
Rights which provides that “No person shall be deprived of life, liberty or property without
due process of law.” Petitioner alone does not own the parking area. The parking space is
owned in common by the developer and the unit owners. Private respondents must be
allowed to use the parking area.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Felix T. de Ramos for petitioner.
Abelardo B. Albis for private respondent.
BELLOSILLO, J.:
G.O.A.L., INC. (GOAL), in this petition for review on certiorari, seeks to set aside
part of the decision of the Court of
361
VOL. 276, JULY 28, 1997 361
G.O.A.L., Inc. vs. Court of Appeals
Appeals dated 28 September 1994 which affirmed the decision of the Office of the
1
President Legal Affairs (OPLA) that earlier likewise affirmed the decision of the
Housing and Land Use Regulatory Board (HLURB). Petitioner confines its petition
to the construction of the fifth floor of Gemin I Condominium and all works related
thereto, including the issuance of title to private respondent Teng and providing
free parking spaces for the condominium units. 2
On 23 May 1983 GOAL and the National Housing Authority (NHA) entered
into an agreement whereby NHA extended to GOAL a loan of P4.425 million for
the construction of Gemin I Condominium at 941 Gonzales St., Ermita, Manila.
Sometime in 1984 a “Contract Agreement” was entered into between GOAL and
Matson International Corporation for the construction of the condominium within
one (1) year at the cost of P4.2 million. However, in the later part of 1984, the
contractor abandoned the project with only 60% of it finished. In 1985 GOAL
offered the condominium units for sale with private respondents among its buyers.
To remedy the situation brought about by the abandonment of the project by the
first contractor, GOAL subsequently pursued the construction of the fifth floor
with NHA granting additional funding on the condition that it would hold on to
the condominium certificates of title of private respondents.
In August 1989 private respondents filed with the Housing and Land Use
Regulatory Board (HLURB), Office of Appeals, Adjudication and Legal Affairs
(OAALA), a complaint against GOAL. Among the issues raised were the illegal
construction of the fifth floor of Gemin I Condominium, the failure to deliver the
title of private respondent Filomeno Teng despite his repeated demands, and the
failure to provide adequate parking spaces for the unit owners.
______________
1CA-G.R. SP No. 31082, Decision penned by Justice Alfredo L. Benipayo, concurred in by Justices
Ricardo P. Galvez and Eugenio S. Labitoria; Rollo, pp. 8-17.
2 Petition, p. 7; Rollo, p. 27.
362
362 SUPREME COURT REPORTS ANNOTATED
G.O.A.L., Inc. vs. Court of Appeals
On 31 March 1989 OAALA rendered its decision ordering GOAL, inter alia, (a) to
stop the construction of the fifth floor, (b) to deliver the title of private respondent
Teng, and (c) to provide adequate parking space for the unit owners. 3
On appeal to the Office of the President Legal Affairs (OPLA) and subsequently
to the Court of Appeals, the decision rendered by the HLURB-OAALA was
affirmed in toto. Petitioner’s motion for reconsideration was denied. Hence this
petition.
Petitioner imputes error to the Court of Appeals in not finding the true facts of
the case that greatly affected its decision, and its decision being contrary to law.
GOAL contends that the Court of Appeals failed to appreciate the fact that the
construction of the fifth floor was with the written approval of public respondent
HLURB as required by Sec. 22 of P.D. No. 957 which provides—
Sec. 22. Alteration of Plans.—No owner or developer shall change or alter the roads, open
spaces, infrastructures, facilities for public use and/or other form of subdivision
development as contained in the approved subdivision plan and/or represented in its
advertisements, without the permission of the Authority and the written conformity or
consent of the duly organized homeowners association, or in the absence of the latter, by
majority of the lot buyers in the subdivision (italics supplied).
The above provision is clear. We do not have to tussle with legal hermeneutics in
the interpretation of Sec. 22 of P.D. No. 957. The written approval of the National
Housing Authority alone is not sufficient. It must be coupled with the written
conformity or consent of the duly organized homeowners association or the
majority of the lot buyers. Failing in this, the construction of the fifth floor is
violative of the decree invoked. The Court of Appeals simply applied the law, and
correctly so.
______________
3Decision, HLURB Case No. REM-191587-3284, pp. 12-13.
363
VOL. 276, JULY 28, 1997 363
G.O.A.L., Inc. vs. Court of Appeals
Petitioner likewise contends that it should not have been faulted for failing to
deliver the title to private respondent Teng as the proximate cause thereof was the
abandonment of the construction project by the first contractor, hence, due to force
majeure. 4
We cannot sustain petitioner. There is no one else to blame but itself. Upon full
payment of the agreed price, petitioner is mandated by law to deliver the title of
the lot or unit to the buyer. Both the “Contract to Sell” of petitioner and private
respondents, and Sec. 25 of P.D. No. 957 state—
Sec. III (Contract to Sell).—Title and Ownership of Unit. Upon full payment by the vendees
of the full amount of the purchase price stipulated under Sec. III hereof, the assessments
and expenses under Sec. IV and otherwise upon compliance by the VENDEES of all
obligations therein, the VENDOR will convey to the VENDEE all rights and interests of
the former and to the Unit, subject hereof together with the interest in the common area
and in the Condominium Corporation appurtenant to such unit x x x x”
Sec. 25, P.D. No. 957—Issuance of Title.—The owner or developer shall deliver the title
of the lot or unit to the buyer upon full payment of the lot or unit x x x x In the event a
mortgage over the lot or unit is outstanding at the time of the issuance of the title to the
buyer, the owner or developer shall redeem the mortgage or the corresponding portion
thereof within six months from such issuance in order that the title over any paid lot or
unit may be secured and delivered to the buyer in accordance herewith.”
Petitioner also attempts to justify its failure to deliver the certificate of title of
private respondent Teng by claiming that it used the title as part collateral for the
additional loan NHA had extended for the construction of the fifth floor.
The Court observes the frequent allusion of petitioner to its predicament
brought about by the abandonment of the project by the first contractor. But such
is irrelevant in light of Sec. 25 of P.D. No. 957 as well as of the Contract to Sell of
the parties. While we emphathize with petitioner in its financial
______________
4Petition, p. 10; Rollo, p. 30.
364
364 SUPREME COURT REPORTS ANNOTATED
 G.O.A.L., Inc. vs. Court of Appeals
dilemma we cannot make innocent parties suffer the consequences of the former’s
lack of business acumen. Upon full payment of a unit, petitioner loses all its rights
and interests to the unit in favor of the buyer. Consequently, it has no right to use
the certificate of title of respondent Teng as collateral for a new loan. The title of
Teng must be released to him as provided by law.
With respect to the second issue, petitioner contends that the decision of the
Court of Appeals is contrary to law considering that under Sec. 12-D, No. 2, Rule
V of the Implementing Rules of P.D. No. 957, what should be given for free are
only “off-street” parking spaces and not indoor parking areas.
Petitioner is wrong. It has for purposes of its own construed “off-street” to mean
“not including indoor.” On the other hand, the law does not exclude “indoor
parking.” What it specifically excludes is “street parking.” Therefore, parking may
be in the basement or, in the absence thereof, in the first floor.
Furthermore, at this point, a definition of terms may be necessary. In a
condominium, common areas and facilities are “portions of the condominium
property not included in the units,” whereas, a unit is “a part of the condominium
property which is to be subject to private ownership.” Inversely, that which is not
5
considered a unit should fall under common areas and facilities.
Hence, the parking spaces not being subject to private ownership form part of
the common area over which the condominium unit owners hold undivided
interest. As such, petitioner cannot invoke Sec. I, Art. III, of the Bill of Rights
which provides that “No person shall be deprived of life, liberty or property without
due process of law.” Petitioner alone does not own the parking area. The parking
space is owned in common by the developer and the unit owners. Private
respondents must be allowed to use the parking area.
______________
5Alberto Ferrer and Karl Stecher, LAW ON CONDOMINIUM, Vol. 1, p. 300.
365
VOL. 276, JULY 28, 1997 365
G.O.A.L., Inc. vs. Court of Appeals
Finally, petitioner contends that the payment of P10,000.00 as moral damages and
P5,000.00 as exemplary damages plus P5,000.00 as attorney’s fees is too much of
a penalty. However, the Court of Appeals upheld these awards holding that—
In the light of the foregoing premises, we sense no error in the award of attorney’s fees,
moral and exemplary damages, and administrative fines against petitioner. This is allowed
by the provisions of civil law and under Secs. 38 and 39 of P.D. No. 957:
Sec. 38. Administrative Fines.—The Authority may prescribe and impose fines not
exceeding ten thousand pesos for violations of the provisions of this Decree or any rule or
regulation thereunder. Fines shall be payable to the Authority and enforceable through
writs of execution in accordance with the provisions of the Rules of Court.
Sec. 39. Penalties.—Any person who shall violate any of the provisions of this Decree
and/or any rule or regulation that may be issued pursuant to this Decree shall, upon
conviction, be punished by a fine of not more than twenty thousand (P20,000.00) pesos
and/or imprisonment of not more than ten years: Provided, that in the case of corporations,
partnership, cooperatives, or associations, the President, manager, or Administrator or the
person who has charge of the administration of the business shall be criminally responsible
for any violation of this Decree and/or the rules and regulations promulgated pursuant
thereto.6
Petitioner can hardly be excused for its failure to comply with the provisions of
P.D. No. 957 by claiming ignorance of the requirements of the decree and that a
“mistake upon a doubtful or difficult question of law may be the basis of good
faith.” Being engaged in a business affected by P.D. No. 957, petitioner should be
aware of its provisions and its mandates which, as can be readily perceived, are
clear, simple and unmistakable. 7
______________
6See Note 1, p. 16.
7Id., pp. 16-17.
366
366 SUPREME COURT REPORTS ANNOTATED
G.O.A.L., Inc. vs. Court of Appeals
WHEREFORE, finding no error in the Decision sought to be reviewed, the petition
is DENIED. Costs against petitioner.
SO ORDERED.
Padilla (Chairman), Vitug and Kapunan, JJ.,concur.
Hermosisima, Jr., J., On leave.
Petition denied.
 G.R. No. 154993. October 25, 2005. * decided or resolved by them in the exercise of their originally or appellate jurisdiction.
LUZ R. YAMANE, in her capacity as the CITY TREASURER OF MAKATI CITY,
petitioner, vs. BA LEPANTO CONDOMINIUM CORPORATION, respondent.
Constitutional Law; Separation of Powers; Congress; Jurisdictions; Statutes; The
basic law of jurisdiction, Batas Pambansa Blg. 129 (B.P. 129), ineluctably confers appellate
jurisdiction on the Court of Appeals over final rulings of quasi-judicial agencies,
instrumentalities, boards or commission, by explicitly using the phrase “appellate
jurisdiction.” The power to create or characterize jurisdiction of courts belongs to the
legislature.— The stringent concept of original jurisdiction may seemingly be neutered by
Rule 43 of the 1997 Rules of Civil Procedure, Section 1 of which lists a slew of
administrative agencies and quasi-judicial tribunals or their officers whose decisions may
be reviewed by the Court of Appeals in the exercise of its appellate jurisdiction. However,
the basic law of jurisdiction, Batas Pambansa Blg. 129 (B.P. 129), ineluctably confers
appellate jurisdiction on the Court of Appeals over final rulings of quasi-judicial agencies,
instrumentalities, boards or commission, by explicitly using the phrase “appellate
jurisdiction.” The power to create or characterize juris-
_______________
*SECOND DIVISION.
259
VOL. 474, OCTOBER 25, 2005 259
Yamane vs. BA Lepanto Condominium Corporation
diction of courts belongs to the legislature. While the traditional notion of appellate
jurisdiction connotes judicial review over lower court decisions, it has to yield to statutory
redefinitions that clearly expand its breadth to encompass even review of decisions of
officers in the executive branches of government.
Taxation; Appeals; Local Governments; The Local Government Code, or any other
statute for that matter, does not expressly confer appellate jurisdiction on the part of
regional trial courts from the denial of a tax protest by a local treasurer.—Yet significantly,
the Local Government Code, or any other statute for that matter, does not expressly confer
appellate jurisdiction on the part of regional trial courts from the denial of a tax protest by
a local treasurer. On the other hand, Section 22 of B.P. 129 expressly delineates the
appellate jurisdiction of the Regional Trial Courts, confining as it does said appellate
jurisdiction to cases decided by Metropolitan, Municipal, and Municipal Circuit Trial
Courts. Unlike in the case of the Court of Appeals, B.P. 129 does not confer appellate
jurisdiction on Regional Trial Courts over rulings made by non-judicial entities.
Same; Same; Same; Statutes; Courts; Court of Tax Appeals; Republic Act No. 9282
definitively proves in its Section 7(a)(3) that the Court of Tax Appeals exercises exclusive
appellate jurisdiction to review on appeal decisions, orders or resolutions of the Regional
Trial Courts in local tax cases originally decided or resolved by them in the exercise of their
original or appellate jurisdiction.—Republic Act No. 9282 definitively proves in its Section
7(a)(3) that the CTA exercises exclusive appellate jurisdiction to review on appeal
decisions, orders or resolutions of the Regional Trial Courts in local tax cases original
Moreover, the provision also states that the review is triggered “by filing a petition for
review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules
of Civil Procedure.”
Same; Same; Courts; Court of Tax Appeals; There is wider latitude on the part of the
Court of Tax Appeals to refuse cognizance over a petition for review under Rule 42 than it
would have over an ordinary appeal under Rule 41.—We recognize that the Corporation’s
error in elevating the RTC decision for review via Rule 42 actually worked to the benefit
of the City Treasurer. There is wider latitude on the part of the Court of Appeals to refuse
cognizance over a petition for review under Rule 42 than it would have over an ordinary
appeal under Rule 41. Under Section 13, Rule 41, the stated grounds for the dismissal of
an ordinary appeal prior to the
260
260 SUPREME COURT REPORTS ANNOTATED
Yamane vs. BA Lepanto Condominium Corporation
transmission of the case records are when the appeal was taken out of time or when
the docket fees were not paid. On the other hand, Section 6, Rule 42 provides that in order
that the Court of Appeals may allow due course to the petition for review, it must first
make a prima facie finding that the lower court has committed an error that would warrant
the reversal or modification of the decision under review. There is no similar requirement
of a prima facie determination of error in the case of ordinary appeal, which is perfected
upon the filing of the notice of appeal in due time.
Same; Constitutional Law; Local Governments; The power of local government units
to impose taxes within its territorial jurisdiction derives from the Constitution itself, which
recognizes the power of these units “to create its own sources of revenue and to levy taxes,
fees, and charges subject to such guidelines and limitations as the Congress may provide,
consistent with the basic policy of local autonomy.”—The power of local government units
to impose taxes within its territorial jurisdiction derives from the Constitution itself, which
recognizes the power of these units “to create its own sources of revenue and to levy taxes,
fees, and charges subject to such guidelines and limitations as the Congress may provide,
consistent with the basic policy of local autonomy.” These guidelines and limitations as
provided by Congress are in main contained in the Local Government Code of 1991 (the
“Code”), which provides for comprehensive instances when and how local government units
may impose taxes. The significant limitations are enumerated primarily in Section 133 of
the Code, which include among others, a prohibition on the imposition of income taxes
except when levied on banks and other financial institutions. None of the other general
limitations under Section 133 find application to the case at bar.
Same; Local Governments; Statutes; The most well-known mode of local government
taxation is perhaps the real property tax, which is governed by Title II, Book II of the Code,
and which bears no application in this case.—The most well-known mode of local
government taxation is perhaps the real property tax, which is governed by Title II, Book
II of the Code, and which bears no application in this case. A different set of provisions,
found under Title I of Book II, governs other taxes imposable by local government units,
including business taxes. Under Section 151 of the Code, cities such as Makati are
authorized to levy the same taxes fees and charges as provinces and municipalities. It is
in Article II, Title II, Book II of the Code, governing municipal taxes, where the provisions
on business taxation relevant to this petition may be found.
261
VOL. 474, OCTOBER 25, 2005 261
Yamane vs. BA Lepanto Condominium Corporation
Same; Same; Same; Corporation Law; Condominium Act; Words and Phrases; Under
the law, a condominium is an interest in real property consisting of a separate interest in a
unit in a residential, industrial or commercial building and an undivided interest in
common, directly or indirectly, in the land on which it is located and in other common areas
of the building.—The creation of the condominium corporation is sanctioned by Republic
Act No. 4726, otherwise known as the Condominium Act. Under the law, a condominium
is an interest in real property consisting of a separate interest in a unit in a residential,
industrial or commercial building and an undivided interest in common, directly or
indirectly, in the land on which it is located and in other common areas of the building. To
enable the orderly administration over these common areas which are jointly owned by the
various unit owners, the Condominium Act permits the creation of a condominium
corporation, which is specially formed for the purpose of holding title to the common area,
in which the holders of separate interests shall automatically be members or shareholders,
to the exclusion of others, in proportion to the appurtenant interest of their respective
units. The necessity of a condominium corporation has not gained widespread acceptance,
and even is merely permissible under the Condominium Act. Nonetheless, the
condominium corporation has been resorted to by many condominium projects, such as the
Corporation in this case.
Same; Same; Corporation Law; Condominium Act; Condominium corporations are
generally exempt from local business taxation under the Local Government Code,
irrespective of any local ordinance that seeks to declare otherwise.—Whatever capacity the
Corporation may have pursuant to its power to exercise acts of ownership over personal
and real property is limited by its stated corporate purposes, which are by themselves
further limited by the Condominium Act. A condominium corporation, while enjoying such
powers of ownership, is prohibited by law from transacting its properties for the purpose
of gainful profit. Accordingly, and with a significant degree of comfort, we hold that
condominium corporations are generally exempt from local business taxation under the
Local Government Code, irrespective of any local ordinance that seeks to declare otherwise.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
262
262 SUPREME COURT REPORTS ANNOTATED
Yamane vs. BA Lepanto Condominium Corporation
Office of the City Attorney for petitioner.
De Borja, Medialdea, Bello, Guevarra & Gerodias for respondent.
TINGA, J.:
Petitioner City Treasurer of Makati, Luz Yamane (City Treasurer), presents for
resolution of this Court two novel questions: one procedural, the other substantive,
yet both of obvious significance. The first pertains to the proper mode of judicial
review undertaken from decisions of the regional trial courts resolving the denial
of tax protests made by local government treasurers, pursuant to the Local
Government Code. The second is whether a local government unit can, under the
Local Government Code, impel a condominium corporation to pay business taxes. 1
While we agree with the City Treasurer’s position on the first issue, there
ultimately is sufficient justification for the Court to overlook what is essentially a
procedural error. We uphold respondents on the second issue. Indeed, there are
disturbing aspects in both procedure and substance that attend the attempts by
the City of Makati to flex its taxing muscle. Considering that the tax imposition
now in question has utterly no basis in law, judicial relief is imperative. There are
fewer indisputable causes for the exercise of judicial review over the exercise of
the taxing power than when the tax is based on whim, and not on law.
The facts, as culled from the record, follow.
Respondent BA-Lepanto Condominium Corporation (the “Corporation”) is a
duly organized condominium corporation constituted in accordance with the
Condominium Act, which owns and holds title to the common and limited common
2
areas of the BA-Lepanto
_______________
1 The general authority for local government units to create their own sources of revenue through
taxation is established under Section 5, Article X of the Constitution, as affirmed under Section 129
of Republic Act No. 7160 (Local Government Code).
2 Republic Act No. 4726.
263
VOL. 474, OCTOBER 25, 2005 263
Yamane vs. BA Lepanto Condominium Corporation
Condominium (the “Condominium”), situated in Paseo de Roxas, Makati City. Its
membership comprises the various unit owners of the Condominium. The
Corporation is authorized, under Article V of its Amended By-Laws, to collect
regular assessments from its members for operating expenses, capital
expenditures on the common areas, and other special assessments as provided for
in the Master Deed with Declaration of Restrictions of the Condominium.
On 15 December 1998, the Corporation received a Notice of Assessment dated
14 December 1998 signed by the City Treasurer. The Notice of Assessment stated
that the Corporation is “liable to pay the correct city business taxes, fees and
charges,” computed as totaling P1,601,013.77 for the years 1995 to 1997. The 3
Notice of Assessment was silent as to the statutory basis of the business taxes
assessed.
Through counsel, the Corporation responded with a written tax protest dated
12 February 1999, addressed to the City Treasurer. It was evident in the protest
that the Corporation was perplexed on the statutory basis of the tax assessment.
“With due respect, we submit that the Assessment has no basis as the Corporation is not
liable for business taxes and surcharges and interest thereon, under the Makati [Revenue]
Code or even under the [Local Government] Code.
The Makati [Revenue] Code and the [Local Government] Code do not contain any
provisions on which the Assessment could be based. One might argue that Sec. 3A.02(m)
of the Makati [Revenue] Code imposes business tax on owners or operators of any business
not specified in the said code. We submit, however, that this is not applicable to the
Corporation as the Corporation is not an owner or operator of any business in the
contemplation of the Makati [Revenue] Code and even the [Local Government] Code.” 4
_______________
3Broken down as follows: Tax Deficiency from 1995 to 1997—P800,855.66; 25% surcharge—
P200,213.91; Interest—P601,944.20. SeeRTC Records, pp. 72-73.
4Id., at p. 74.
264
264 SUPREME COURT REPORTS ANNOTATED
Yamane vs. BA Lepanto Condominium Corporation
Proceeding from the premise that its tax liability arose from Section 3A.02(m) of
the Makati Revenue Code, the Corporation proceeded to argue that under both the
Makati Code and the Local Government Code, “business” is defined as “trade or
commercial activity regularly engaged in as a means of livelihood or with a view
to profit.” It was submitted that the Corporation, as a condominium corporation,
was organized not for profit, but to hold title over the common areas of the
Condominium, to manage the Condominium for the unit owners, and to hold title
to the parcels of land on which the Condominium was located. Neither was the
Corporation authorized, under its articles of incorporation or bylaws to engage in
profit-making activities. The assessments it did collect from the unit owners were
for capital expenditures and operating expenses. 5
The protest was rejected by the City Treasurer in a letter dated 4 March 1999.
She insisted that the collection of dues from the unit owners was effected primarily
“to sustain and maintain the expenses of the common areas, with the end in view
[sic] of getting full appreciative living values [sic] for the individual condominium
occupants and to command better marketable [sic] prices for those occupants” who
would in the future sell their respective units. Thus, she concluded since the
6
“chances of getting higher prices for well-managed common areas of any
condominium are better and more effective that condominiums with poor [sic]
managed common areas,” the corporation activity “is a profit venture making
[sic].”7
From the denial of the protest, the Corporation filed an Appeal with the
Regional Trial Court (RTC) of Makati. On 1 March 2000, the Makati RTC Branch
8
57 rendered a Decision dismissing the appeal for lack of merit. Accepting the
9
premise laid by the City Treasurer, the RTC acknowledged, in sadly risible
language:
_______________
5Records, pp. 20-21.
6RTC Rollo, p. 16.
7Ibid.
8Docketed as Civil Case No. 99-748.
9Penned by Judge Reinato G. Quilala.
265
VOL. 474, OCTOBER 25, 2005 265
Yamane vs. BA Lepanto Condominium Corporation
“Herein appellant, to defray the improvements and beautification of the common areas,
collect [sic] assessments from its members. Its end view is to get appreciate living rules for
the unit owners [sic], to give an impression to outsides [sic] of the quality of service the
condominium offers, so as to allow present owners to command better prices in the event
of sale.” 10
With this, the RTC concluded that the activities of the Corporation fell squarely
under the definition of “business” under Section 13(b) of the Local Government
Code, and thus subject to local business taxation. 11
From this Decision of the RTC, the Corporation filed a Petition for Review under
Rule 42 of the Rules of Civil Procedure with the Court of Appeals. Initially, the
petition was dismissed outright on the ground that only decisions of the RTC
12
brought on appeal from a first level court could be elevated for review under the
mode of review prescribed under Rule 42. However, the Corporation pointed out
13
in its Motion for Reconsideration that under Section 195 of the Local Government
Code, the remedy of the taxpayer on the denial of the protest filed with the local
treasurer is to appeal the denial with the court of competent
jurisdiction. Persuaded by this contention, the Court of Appeals reinstated the
14
petition. 15
On 7 June 2002, the Court of Appeals Special Sixteenth Division rendered
the Decision now assailed before this Court. The appellate court reversed the RTC
16
and declared that the Corporation was not liable to pay business taxes to the City
of Makati. In doing so, the Court of Appeals delved into jurisprudential definitions
17
of
_______________ Citing among others, Madrigal v. Rafferty, 38 Phil. 414; and Lynch v. Turrish, 264 US 221.
18

Id., at p. 21.
19

Rollo, p. 106.
10 Ibid.
20

Ibid.
11 In a Resolution dated 28 August 2002.
21

In a Resolution dated 18 May 2000.

12 Rollo, p. 33.
22

Id., at p. 64.
13 267
Id., at p. 144.
14
VOL. 474, OCTOBER 25, 2005 267
In a Resolution dated 25 July 2000.
15

Penned by Justice H. Aquino, concurred in by Justices E. De los Santos and R. Maambong.

16
Yamane vs. BA Lepanto Condominium Corporation
Id., at p. 22.
17 of original jurisdiction, it being the first court which took cognizance of the case.
266 Accordingly, with the Corporation having pursued an erroneous mode of appeal,
266 SUPREME COURT REPORTS ANNOTATED the RTC Decision is deemed to have become final and executory.
Yamane vs. BA Lepanto Condominium Corporation First, we dispose of the procedural issue, which essentially boils down to
profit, and concluded that the Corporation was not engaged in profit. For one, it
18 whether the RTC, in deciding an appeal taken from a denial of a protest by a local
was held that the very statutory concept of a condominium corporation showed treasurer under Section 195 of the Local Government Code, exercises “original
that it was not a juridical entity intended to make profit, as its sole purpose was jurisdiction” or “appellate jurisdiction.” The question assumes a measure of
to hold title to the common areas in the condominium and to maintain the importance to this petition, for the adoption of the position of the City Treasurer
condominium. 19 that the mode of review of the decision taken by the RTC is governed by Rule 41
The Court of Appeals likewise cited provisions from the Corporation’s Amended of the Rules of Civil Procedure means that the decision of the RTC would have long
Articles of Incorporation and Amended By-Laws that, to its estimation, become final and executory by reason of the failure of the Corporation to file a
established that the Corporation was not engaged in business and the assessment notice of appeal. 23

collected from unit owners limited to those necessary to defray the expenses in the
maintenance of the common areas and management the condominium. 20
Upon denial of her Motion for Reconsideration, the City Treasurer elevated the
21
present Petition for Review under Rule 45. It is argued that the Corporation is
engaged in business, for the dues collected from the different unit owners is
utilized towards the beautification and maintenance of the Condominium,
There are discernible conflicting views on the issue. The first, as expressed by
the Court of Appeals, holds that the RTC, in reviewing denials of protests by local
treasurers, exercises appellate jurisdiction. This position is anchored on the
language of Section 195 of the Local Government Code which states that the
remedy of the taxpayer whose protest is denied by the local treasurer is “to
appeal with the court of competent jurisdiction.” Apparently though, the Local
24

resulting in “full appreciative living values” for the condominium units which
would command better market prices should they be sold in the future. The City
Treasurer likewise avers that the rationale for business taxes is not on the income
received or profit earned by the business, but the privilege to engage in business.
The fact that the Corporation is empowered “to acquire, own, hold, enjoy, lease,
operate and maintain, and to convey sell, transfer or otherwise dispose of real or
personal property” allegedly qualifies “as incident to the fact of [the Corporation’s]
act of engaging in business. 22
Government Code does not elaborate on how such “appeal” should be undertaken.
_______________
23 “This Court has invariably ruled that perfection of an appeal in the manner and within the
period laid down by law is not only mandatory but also jurisdictional. The failure to perfect an appeal
as required by the rules has the effect of defeating the right to appeal of a party and precluding the
appellate court from acquiring jurisdiction over the case. The right to appeal is not a natural right
nor a part of due process; it is merely a statutory privilege, and may be exercised only in the manner

and in accordance with the provisions of the law. The party who seeks to avail of the same must
The City Treasurer also claims that the Corporation had filed the wrong mode comply with the requirement of the rules. Failing to do so, the right to appeal is lost.” See Balgami
of appeal before the Court of Appeals when the latter filed its Petition for Review v. Court of Appeals, G.R. No. 131287, 9 December 2004, 445 SCRA 591.
under Rule 42. It is reasoned that the decision of the Makati RTC was rendered in 24See Section 195, Rep. Act No. 7160 (1991).
the exercise 268
268 SUPREME COURT REPORTS ANNOTATED
_______________ Yamane vs. BA Lepanto Condominium Corporation
The other view, as maintained by the City Treasurer, is that the jurisdiction
exercised by the RTC is original in character. This is the first time that the position
has been presented to the court for adjudication. Still, this argument does find
jurisprudential mooring in our ruling in Garcia v. De Jesus, where the Court
25
proffered the following distinction between original jurisdiction and appellate
jurisdiction: “Original jurisdiction is the power of the Court to take judicial
cognizance of a case instituted for judicial action for the first time under conditions
provided by law. Appellate jurisdiction is the authority of a Court higher in rank
to re-examine the final order or judgment of a lower Court which tried the case
now elevated for judicial review.” 26
The quoted definitions were taken from the commentaries of the esteemed
Justice Florenz Regalado. With the definitions as beacon, the review taken by the
RTC over the denial of the protest by the local treasurer would fall within that
court’s original jurisdiction. In short, the review is the initial judicial cognizance
of the matter. Moreover, labeling the said review as an exercise of appellate
jurisdiction is inappropriate, since the denial of the protest is not the judgment or
order of a lower court, but of a local government official.
The stringent concept of original jurisdiction may seemingly be neutered by
Rule 43 of the 1997 Rules of Civil Procedure, Section 1 of which lists a slew of
administrative agencies and quasi-judicial tribunals or their officers whose
decisions may be reviewed by the Court of Appeals in the exercise of its appellate
jurisdiction. However, the basic law of jurisdiction, Batas Pambansa Blg. 129 (B.P.
129), ineluctably confers appellate jurisdiction on the Court of Appeals over final
27
rulings of quasi-judicial agencies, instrumentalities, boards or commission, by
explicitly using the phrase “appellate jurisdiction.” The power to create or
28
characterize jurisdiction
_______________
G.R. Nos. 88158 & 97108-09, 4 March 1992, 206 SCRA 779.
25
Ibid.
26
Otherwise known as the Judiciary Reorganization Act of 1980 and since amended several times.
27
See Section 9, B.P. 129.
28
269
VOL. 474, OCTOBER 25, 2005 269
Yamane vs. BA Lepanto Condominium Corporation
of courts belongs to the legislature. While the traditional notion of appellate
jurisdiction connotes judicial review over lower court decisions, it has to yield to
statutory redefinitions that clearly expand its breadth to encompass even review
of decisions of officers in the executive branches of government.
Yet significantly, the Local Government Code, or any other statute for that
matter, does not expressly confer appellate jurisdiction on the part of regional trial
courts from the denial of a tax protest by a local treasurer. On the other hand,
Section 22 of B.P. 129 expressly delineates the appellate jurisdiction of the
Regional Trial Courts, confining as it does said appellate jurisdiction to cases
decided by Metropolitan, Municipal, and Municipal Circuit Trial Courts. Unlike in
the case of the Court of Appeals, B.P. 129 does not confer appellate jurisdiction on
Regional Trial Courts over rulings made by non-judicial entities.
From these premises, it is evident that the stance of the City Treasurer is
correct as a matter of law, and that the proper remedy of the Corporation from the
RTC judgment is an ordinary appeal under Rule 41 to the Court of Appeals.
However, we make this pronouncement subject to two important
qualifications. First, in this particular case there are nonetheless significant
reasons for the Court to overlook the procedural error and ultimately uphold the
adjudication of the jurisdiction exercised by the Court of Appeals in this
case. Second, the doctrinal weight of the pronouncement is confined to cases and
controversies that emerged prior to the enactment of Republic Act No. 9282, the
law which expanded the jurisdiction of the Court of Tax Appeals (CTA).
Republic Act No. 9282 definitively proves in its Section 7(a)(3) that the CTA
exercises exclusive appellate jurisdiction to review on appeal decisions, orders or
resolutions of the Regional Trial Courts in local tax cases original decided or
resolved by them in the exercise of their originally or appellate jurisdiction.
Moreover, the provision also states that the review is triggered “by filing a petition
270
270 SUPREME COURT REPORTS ANNOTATED
Yamane vs. BA Lepanto Condominium Corporation
for review under a procedure analogous to that provided for under Rule 42 of the
1997 Rules of Civil Procedure.” 29
Republic Act No. 9282, however, would not apply to this case simply because it
arose prior to the effectivity of that law. To declare otherwise would be to institute
a jurisdictional rule derived not from express statutory grant, but from
implication. The jurisdiction of a court to take cognizance of a case should be
clearly conferred and should not be deemed to exist on mere implications, and this
30
settled rule would be needlessly emasculated should we declare that the
Corporation’s position is correct in law.
Be that as it may, characteristic of all procedural rules is adherence to the
precept that they should not be enforced blindly, especially if mechanical
application would defeat the higher ends that animates our civil procedure—the
just, speedy and inexpensive disposition of every action and proceeding. Indeed,
31
we have repeatedly upheld—and utilized ourselves—the discretion of courts to
nonetheless take cognizance of petitions raised on an erroneous mode of appeal
and instead treat these petitions in the manner as they should have appropriately
been filed. The Court of Appeals
32
_______________
29 See Section 9, Rep. Act No. 9282.
30 Philippine Ports Authority v. Fuentes, G.R. No. 91259, 16 April 1991, 195 SCRA 790, 796,
citing Victorias Milling Co. v. Court of Tax Appeals, G.R. No. 66381, Feburary 29, 1984.
31 See Section 6, Rule 1, 1997 Rules of Civil Procedure.
32 “The rules of procedure ought not to be applied in a very rigid technical sense, as they are used
only to help secure, not override substantial justice. If a technical and rigid enforcement of the rules
is made, their aim would be defeated. Consequently, in the interest of justice, the instant petition for
review may be treated as a special civil action on certiorari. [A] petition which should have been
brought under Rule 65 and not under Rule 45 of the Rules of Court, is not an inflexible rule. The
strict application of procedural technicalities should not hinder the speedy disposition of the case on
the merits.” Ramiscal v. Sandiganbayan, G.R. Nos. 140576-99, 13 December 2004, 446 SCRA
166. See also e.g., Abcede v. Workmen’s Compensation Commission, G.R. No. L-42400, August 7,
1985, 138 SCRA 53; Lagua v. Cusi, G.R. No. L-44649, April 15, 1988, 160 SCRA 260; Longos Rural
Waterworks v. Desierto, G.R. No. 135496, July 30, 2002, 385
271
VOL. 474, OCTOBER 25, 2005 271
Yamane vs. BA Lepanto Condominium Corporation
could very well have treated the Corporation’s petition for review as an ordinary
appeal.
Moreover, we recognize that the Corporation’s error in elevating the RTC
decision for review via Rule 42 actually worked to the benefit of the City Treasurer.
There is wider latitude on the part of the Court of Appeals to refuse cognizance
over a petition for review under Rule 42 than it would have over an ordinary
appeal under Rule 41. Under Section 13, Rule 41, the stated grounds for the
dismissal of an ordinary appeal prior to the transmission of the case records are
when the appeal was taken out of time or when the docket fees were not paid. On 33
the other hand, Section 6, Rule 42 provides that in order that the Court of Appeals
may allow due course to the petition for review, it must first make a prima
facie finding that the lower court has committed an error that would warrant the
reversal or modification of the decision under review. There is no similar34
requirement of a prima facie determination of error in the case of ordinary appeal,
which is perfected upon the filing of the notice of appeal in due time. 35
Evidently, by employing the Rule 42 mode of review, the Corporation faced a
greater risk of having its petition rejected by the Court of Appeals as compared to
having filed an ordinary appeal under Rule 41. This was not an error that worked
to the prejudice of the City Treasurer.
We now proceed to the substantive issue, on whether the City of Makati may
collect business taxes on condominium corporations.
We begin with an overview of the power of a local government unit to impose
business taxes.
The power of local government units to impose taxes within its territorial
jurisdiction derives from the Constitution itself, which recognizes the power of
these units “to create its own sources of
_______________
SCRA 392; Rubenito v. Lagata, G.R. No. 140959, December 21, 2004, 447 SCRA 417.
See Section 13, Rule 41, 1997 Rules of Civil Procedure.
33
See Section 6, Rule 42, 1997 Rules of Civil Procedure.
34
See Section 9, Rule 41, 1997 Rules of Civil Procedure.
35
272
272 SUPREME COURT REPORTS ANNOTATED
Yamane vs. BA Lepanto Condominium Corporation
revenue and to levy taxes, fees, and charges subject to such guidelines and
limitations as the Congress may provide, consistent with the basic policy of local
autonomy.” These guidelines and limitations as provided by Congress are in main
36
contained in the Local Government Code of 1991 (the “Code”), which provides for
comprehensive instances when and how local government units may impose taxes.
The significant limitations are enumerated primarily in Section 133 of the Code,
which include among others, a prohibition on the imposition of income taxes except
when levied on banks and other financial institutions. None of the other general
37
limitations under Section 133 find application to the case at bar.
The most well-known mode of local government taxation is perhaps the real
property tax, which is governed by Title II, Book II of the Code, and which bears
no application in this case. A different set of provisions, found under Title I of Book
II, governs other taxes imposable by local government units, including business
taxes. Under Section 151 of the Code, cities such as Makati are authorized to levy
the same taxes fees and charges as provinces and municipalities. It is in Article II,
Title II, Book II of the Code, governing municipal taxes, where the provisions on
business taxation relevant to this petition may be found. 38
Section 143 of the Code specifically enumerates several types of business on
which municipalities and cities may impose taxes. These include manufacturers,
wholesalers, distributors, dealers of any article of commerce of whatever nature;
those engaged in the export or commerce of essential commodities; contractors and
other independent contractors; banks and financial institutions; and peddlers
engaged in the sale of any merchandise or article of commerce. Moreover, the
local sanggunian is also authorized to impose
_______________
36See Section 5, Article X, Constitution.
See Section 133(a), Local Government Code.
37
38Article I, Book II, Title II, concerning provincial taxes, authorize the imposition of taxes on the
business of printing and publication, on businesses enjoying a franchise, and on persons exercising
a profession requiring government examination. While these are admittedly taxes imposed on
businesses, they find no relevance to the present case.
273
VOL. 474, OCTOBER 25, 2005 273
Yamane vs. BA Lepanto Condominium Corporation
taxes on any other businesses not otherwise specified under Section 143 which
the sanggunian concerned may deem proper to tax.
The coverage of business taxation particular to the City of Makati is provided
by the Makati Revenue Code (“Revenue Code”), enacted through Municipal
Ordinance No. 92-072. The Revenue Code remains in effect as of this writing.
Article A, Chapter III of the Revenue Code governs business taxes in Makati, and
it is quite specific as to the particular businesses which are covered by business
taxes. To give a sample of the specified businesses under the Revenue Code which
are not enumerated under the Local Government Code, we cite Section 3A.02(f) of
the Code, which levies a gross receipt tax:
(f) On contractors and other independent contractors defined in Sec. 3A.01(q) of Chapter
III of this Code, and on owners or operators of business establishments rendering or
offering services such as: advertising agencies; animal hospitals; assaying laboratories;
belt and buckle shops; blacksmith shops; bookbinders; booking officers for film exchange;
booking offices for transportation on commission basis; breeding of game cocks and other
sporting animals belonging to others; business management services; collecting agencies;
escort services; feasibility studies; consultancy services; garages; garbage disposal
contractors; gold and silversmith shops; inspection services for incoming and outgoing
cargoes; interior decorating services; janitorial services; job placement or recruitment
agencies; landscaping contractors; lathe machine shops; management consultants not
subject to professional tax; medical and dental laboratories; mercantile agencies;
messengerial services; operators of shoe shine stands; painting shops; perma press
establishments; rent-a-plant services; polo players; school for and/or horse-back riding
academy; real estate appraisers; real estate brokerages; photostatic, white/blue printing,
Xerox, typing, and mimeographing services; rental of bicycles and/or tricycles, furniture,
shoes, watches, household appliances, boats, typewriters, etc.; roasting of pigs, fowls, etc.;
shipping agencies; shipyard for repairing ships for others; shops for shearing animals;
silkscreen or T-shirt printing shops; stables; travel agencies; vaciador shops; veterinary
clinics; video rentals and/or coverage services; dancing schools/speed reading/EDP;
274
274 SUPREME COURT REPORTS ANNOTATED
Yamane vs. BA Lepanto Condominium Corporation
nursery, vocational and other schools not regulated by the Department of Education,
Culture and Sports, (DECS), day care centers; etc.
39
Other provisions of the Revenue Code likewise subject hotel and restaurant
owners and operators, real estate dealers, and lessors of real estate to business
40 41
taxes.
Should the comprehensive listing not prove encompassing enough, there is also
a catch-all provision similar to that under the Local Government Code. This is
found in Section 3A.02(m) of the Revenue Code, which provides:
(m) On owners or operators of any business not specified above shall pay the tax at the
rate of two percent (2%) for 1993, two and one-half percent (2 ½%) for 1994 and 1995, and
three percent (3%) for 1996 and the years thereafter of the gross receipts during the
preceding year. 42
The initial inquiry is what provision of the Makati Revenue Code does the City
Treasurer rely on to make the Corporation liable for business taxes. Even at this
point, there already stands a problem with the City Treasurer’s cause of action.
Our careful examination of the record reveals a highly disconcerting fact. At no
point has the City Treasurer been candid enough to inform the Corporation, the
RTC, the Court of Appeals, or this Court for that matter, as to what exactly is the
precise statutory basis under the Makati Revenue Code for the levying of the
business tax on petitioner. We have examined all of the pleadings submitted by
the City Treasurer in all the antecedent judicial proceedings, as well as in this
present petition, and also the communications by the City Treasurer to the
Corporation which form part of the record. Nowhere therein is there any citation
made by the City Treasurer of any provision of the Revenue Code which would
serve as the legal authority for the collection of business taxes from condominiums
in Makati.
_______________
See Section 3A.02(f), Makati Revenue Code.
39
See Section 3A.02(h), Makati Revenue Code.
40
See Section 3A.02(k), Makati Revenue Code.
41
Section 3A.02(m), Makati Revenue Code.
42
275
VOL. 474, OCTOBER 25, 2005 275
Yamane vs. BA Lepanto Condominium Corporation
Ostensibly, the notice of assessment, which stands as the first instance the
taxpayer is officially made aware of the pending tax liability, should be sufficiently
informative to apprise the taxpayer the legal basis of the tax. Section 195 of the
Local Government Code does not go as far as to expressly require that the notice
of assessment specifically cite the provision of the ordinance involved but it does
require that it state the nature of the tax, fee or charge, the amount of deficiency,
surcharges, interests and penalties. In this case, the notice of assessment sent to
the Corporation did state that the assessment was for business taxes, as well as
the amount of the assessment. There may have been prima facie compliance with
the requirement under Section 195. However in this case, the Revenue Code
provides multiple provisions on business taxes, and at varying rates. Hence, we
could appreciate the Corporation’s confusion, as expressed in its protest, as to the
exact legal basis for the tax. Reference to the local tax ordinance is vital, for the
43
power of local government units to impose local taxes is exercised through the
appropriate ordinance enacted by the sanggunian, and not by the Local
Government Code alone. What determines tax liability is the tax ordinance, the
44
Local Government Code being the enabling law for the local legislative body.
Moreover, a careful examination of the Revenue Code shows that while Section
3A.02(m) seems designed as a catch-all provision, Section 3A.02(f), which provides
for a different tax rate from that of the former provision, may be construed to be
of similar import. While Section 3A.02(f) is quite exhaustive in enumerating the
class of businesses taxed under the provision, the listing, while
_______________
43 Supra note 4.
44 See Section 132, Local Government Code. Indeed, even as the Local Government Code
enumerates specific examples of local taxes, the provisions therein clarify that “the [local government
unit] may impose a tax,” thus characterizing local taxes as optional on the part of local government
unit, and not mandatory according to the Code. Certainly, a local government unit may choose not
to impose the local tax at all, even if it is authorized to do so under the Local Government Code.
276
276 SUPREME COURT REPORTS ANNOTATED
Yamane vs. BA Lepanto Condominium Corporation
it does not include condominium-related enterprises, ends with the abbreviation
“etc.,” or “et cetera.”
We do note our discomfort with the unlimited breadth and the dangerous
uncertainty which are the twin hallmarks of the words “et cetera.” Certainly, we
cannot be disposed to uphold any tax imposition that derives its authority from
enigmatic and uncertain words such as “et cetera.” Yet we cannot even say with
definiteness whether the tax imposed on the Corporation in this case is based on
“et cetera,” or on Section 3A.02(m), or on any other provision of the Revenue Code.
Assuming that the assessment made on the Corporation is on a provision other
than Section 3A.02(m), the main legal issue takes on a different complexion. For
example, if it is based on “et cetera” under Section 3A.02(f), we would have to
examine whether the Corporation faces analogous comparison with the other
businesses listed under that provision.
Certainly, the City Treasurer has not been helpful in that regard, as she has
been silent all through out as to the exact basis for the tax imposition which she
wishes that this Court uphold. Indeed, there is only one thing that prevents this
Court from ruling that there has been a due process violation on account of the
City Treasurer’s failure to disclose on paper the statutory basis of the tax—that
the Corporation itself does not allege injury arising from such failure on the part
of the City Treasurer.
We do not know why the Corporation chose not to put this issue into litigation,
though we can ultimately presume that no injury was sustained because the City
Treasurer failed to cite the specific statutory basis of the tax. What is essential
though is that the local treasurer be required to explain to the taxpayer with
sufficient particularity the basis of the tax, so as to leave no doubt in the mind of
the taxpayer as to the specific tax involved.
In this case, the Corporation seems confident enough in litigating despite the
failure of the City Treasurer to admit on what exact provision of the Revenue Code
the tax liability ensued. This is perhaps because the Corporation has anchored its
central argument on the position that the Local Government Code itself does not
sanction the imposition of business taxes against it. This posi-
277
VOL. 474, OCTOBER 25, 2005 277
Yamane vs. BA Lepanto Condominium Corporation
tion was sustained by the Court of Appeals, and now merits our analysis.
As stated earlier, local tax on businesses is authorized under Section 143 of the
Local Government Code. The word “business” itself is defined under Section 131(d)
of the Code as “trade or commercial activity regularly engaged in as a means of
livelihood or with a view to profit.” This definition of “business” takes on
45
importance, since Section 143 allows local government units to impose local taxes
on businesses other than those specified under the provision. Moreover, even those
business activities specifically named in Section 143 are themselves susceptible to
broad interpretation. For example, Section 143(b) authorizes the imposition of
business taxes on wholesalers, distributors, or dealers in any article of commerce
of whatever kind or nature.
It is thus imperative that in order that the Corporation may be subjected to
business taxes, its activities must fall within the definition of business as provided
in the Local Government Code. And to hold that they do is to ignore the very
statutory nature of a condominium corporation.
The creation of the condominium corporation is sanctioned by Republic Act No.
4726, otherwise known as the Condominium Act. Under the law, a condominium
is an interest in real property consisting of a separate interest in a unit in a
residential, industrial or commercial building and an undivided interest in
common, directly or indirectly, in the land on which it is located and in other 48“The suggestion has been cautiously advanced that the unit owners might form a corporation
common areas of the building. To enable the orderly administration over these
46
to operate the condominium and in this way probably avoid unlimited personal liability.” See §12,
Alberto Ferrer and Karl Stecher, I Law of Condominium (1967 ed.).
common areas which are jointly owned by the various unit owners, the 49See Section 2, Rep. Act No. 4726.
Condominium Act permits the creation of a condominium corporation, which is 50See Section 9(d), Rep. Act No. 4726.
specially formed for the purpose of holding title to the common area, in which the 51See Section 10, Rep. Act No. 4726.
holders of separate interests shall automatically be members or shareholders, to 52Ibid.
279
the exclusion of others, in proportion to the appurtenant interest of
VOL. 474, OCTOBER 25, 2005 279
_______________ Yamane vs. BA Lepanto Condominium Corporation
We can elicit from the Condominium Act that a condominium corporation is
See Section 131(e), Local Government Code.
precluded by statute from engaging in corporate activities other than the holding
45

See Section 2, Rep. Act No. 4726.

46

278 of the common areas, the administration of the condominium project, and other
278 SUPREME COURT REPORTS ANNOTATED acts necessary, incidental or convenient to the accomplishment of such purposes.
Neither the maintenance of livelihood, nor the procurement of profit, fall within
Yamane vs. BA Lepanto Condominium Corporation
the scope of permissible corporate purposes of a condominium corporation under
their respective units. The necessity of a condominium corporation has not gained
the Condominium Act.
47

widespread acceptance, and even is merely permissible under the Condominium

The Court has examined the particular Articles of Incorporation and By-Laws
48

Act. Nonetheless, the condominium corporation has been resorted to by many

of the Corporation, and these documents unmistakably hew to the limitations
49

condominium projects, such as the Corporation in this case.

contained in the Condominium Act. Per the Articles of Incorporation, the
In line with the authority of the condominium corporation to manage the
Corporation’s corporate purposes are limited to: (a) owning and holding title to the
condominium project, it may be authorized, in the deed of restrictions, “to make
common and limited common areas in the Condominium Project; (b) adopting such
reasonable assessments to meet authorized expenditures, each condominium unit
necessary measures for the protection and safeguard of the unit owners and their
to be assessed separately for its share of such expenses in proportion (unless
property, including the power to contract for security services and for insurance
otherwise provided) to its owner’s fractional interest in any common areas.” It is
coverage on the entire project; (c) making and adopting needful rules and
50

the collection of these assessments from unit owners that form the basis of the City
regulations concerning the use, enjoyment and occupancy of the units and common
Treasurer’s claim that the Corporation is doing business.
areas, including the power to fix penalties and assessments for violation of such
The Condominium Act imposes several limitations on the condominium
rules; (d) to provide for the maintenance, repair, sanitation, and cleanliness of the
corporation that prove crucial to the disposition of this case. Under Section 10 of
common and limited common areas; (e) to provide and contract for public utilities
the law, the corporate purposes of a condominium corporation are limited to the
and other services to the common areas; (f) to contract for the services of persons
holding of the common areas, either in ownership or any other interest in real
or firms to assist in the management and operation of the Condominium Project;
property recognized by law; to the management of the project; and to such other
(g) to discharge any lien or encumbrances upon the Condominium Project; (h) to
purposes as may be necessary, incidental or convenient to the accomplishment of
enforce the terms contained in the Master Deed with Declaration of Restrictions
such purpose. Further, the same provision prohibits the articles of incorporation
of the Project; (i) to levy and collect those assessments as provided in the Master
51

or by-laws of the condominium corporation from containing any provisions which

Deed, in order to defray the costs, expenses and losses of the condominium; (j) to
are contrary to the provisions of the Condominium Act, the enabling or master
acquire, own, hold, enjoy, lease operate and maintain, and to convey, sell transfer,
deed, or the declaration of restrictions of the condominium project.
mortgage or otherwise dispose of real or personal property in connection with the
52

_______________ purposes and activities of the corporation; and (k) to exercise and perform such
other powers rea-
47 Ibid. 280
280 SUPREME COURT REPORTS ANNOTATED
 Yamane vs. BA Lepanto Condominium Corporation
sonably necessary, incidental or convenient to accomplish the foregoing purposes. 53
Obviously, none of these stated corporate purposes are geared towards
maintaining a livelihood or the obtention of profit. Even though the Corporation is
empowered to levy assessments or dues from the unit owners, these amounts
collected are not intended for the incurrence of profit by the Corporation or its
members, but to shoulder the multitude of necessary expenses that arise from the
maintenance of the Condominium Project. Just as much is confirmed by Section 1,
Article V of the Amended By-Laws, which enumerate the particular expenses to
be defrayed by the regular assessments collected from the unit owners. These
would include the salaries of the employees of the Corporation, and the cost of
maintenance and ordinary repairs of the common areas. 54
The City Treasurer nonetheless contends that the collection of these
assessments and dues are “with the end view of getting full appreciative living
values” for the condominium units, and as a result, profit is obtained once these
units are sold at higher prices. The Court cites with approval the two counterpoints
raised by the Court of Appeals in rejecting this contention. First, if any profit is
obtained by the sale of the units, it accrues not to the corporation but to the unit
owner. Second, if the unit owner does obtain profit from the sale of the corporation,
the owner is already required to pay capital gains tax on the appreciated value of
the condominium unit. 55
Moreover, the logic on this point of the City Treasurer is baffling. By this
rationale, every Makati City car owner may be considered as being engaged in
business, since the repairs or improvements on the car may be deemed oriented
towards appreciating the value of the car upon resale. There is an evident
distinction between persons who spend on repairs and improvements on their
personal and real property for the purpose of increasing its resale
_______________
See RTC Records, pp. 44-46.
53
Id., at pp. 35-36.
54
Rollo, p. 20.
55
281
VOL. 474, OCTOBER 25, 2005 281
Yamane vs. BA Lepanto Condominium Corporation
value, and those who defray such expenses for the purpose of preserving the
property. The vast majority of persons fall under the second category, and it would
be highly specious to subject these persons to local business taxes. The profit
motive in such cases is hardly the driving factor behind such improvements, if it
were contemplated at all. Any profit that would be derived under such
circumstances would merely be incidental, if not accidental.
Besides, we shudder at the thought of upholding tax liability on the basis of the
standard of “full appreciative living values,” a phrase that defies statutory
explication, commonsensical meaning, the English language, or even definition
from Google. The exercise of the power of taxation constitutes a deprivation of
property under the due process clause, and the taxpayer’s right to due process is
56
violated when arbitrary or oppressive methods are used in assessing and collecting
taxes. The fact that the Corporation did not fall within the enumerated classes of
57
taxable businesses under either the Local Government Code or the Makati
Revenue Code already forewarns that a clear demonstration is essential on the
part of the City Treasurer on why the Corporation should be taxed anyway. “Full
appreciative living values” is nothing but blather in search of meaning, and to
impose a tax hinged on that standard is both arbitrary and oppressive.
The City Treasurer also contends that the fact that the Corporation is engaged
in business is evinced by the Articles of Incorporation, which specifically empowers
the Corporation “to acquire, own,
_______________
56 “This is not to say though that the constitutional injunction against deprivation of property
without due process of law may be passed over under the guise of the taxing power, except when the
taking of the property is in the lawful exercise of the taxing power, as when (1) the tax is for a public
purpose; (2) the rule on uniformity of taxation is observed; (3) either the person or property taxed is
within the jurisdiction of the government levying the tax; and (4) in the assessment and collection of
certain kinds of taxes notice and opportunity for hearing are provided.” Pepsi-Cola Bottling Company
v. Municipality of Tanauan, 161 Phil. 591; 69 SCRA 460 (1976).
57Ibid.
282
282 SUPREME COURT REPORTS ANNOTATED
Yamane vs. BA Lepanto Condominium Corporation
hold, enjoy, lease, operate and maintain, and to convey, sell, transfer mortgage or
otherwise dispose of real or personal property.” What the City Treasurer fails to
58
add is that every corporation organized under the Corporation Code is so 59
specifically empowered. Section 36(7) of the Corporation Code states that every
corporation incorporated under the Code has the power and capacity “to purchase,
receive, take or grant, hold, convey, sell, lease, pledge, mortgage and otherwise
deal with such real and personal property . . . as the transaction of the lawful
business of the corporation may reasonably and necessarily require . . . .” Without 60
this power, corporations, as juridical persons, would be deprived of the capacity to
engage in most meaningful legal relations.
 Again, whatever capacity the Corporation may have pursuant to its power to
exercise acts of ownership over personal and real property is limited by its stated
corporate purposes, which are by themselves further limited by the Condominium
Act. A condominium corporation, while enjoying such powers of ownership, is
prohibited by law from transacting its properties for the purpose of gainful profit.
Accordingly, and with a significant degree of comfort, we hold that
condominium corporations are generally exempt from local business taxation
under the Local Government Code, irrespective of any local ordinance that seeks
to declare otherwise.
Still, we can note a possible exception to the rule. It is not unthinkable that the
unit owners of a condominium would band together to engage in activities for profit
under the shelter of the condominium corporation. Such activity would be 61
prohibited un-
_______________
Rollo, p. 33.
58
Batas Pambansa Blg. 68.
59
See Section 36(7), Corporation Code.
60
Indeed, at least one commentator on American condominium law has offered the following
61
explanation on how this may be accomplished:
Under certain conditions it is possible for the owners of a condominium project to engage in a business, the income
of which would be subject to the Federal income tax. . . . To meet these conditions, however, the owners of the
condominium, acting through their asso
283
VOL. 474, OCTOBER 25, 2005 283
Yamane vs. BA Lepanto Condominium Corporation
der the Condominium Act, but if the fact is established, we see no
_______________
ciation of owners, must generally fall into one of two general classifications insofar as the Internal
Revenue Code is concerned, either as a partnership or as a corporation.
The Federal income tax regulations define a partnership as including a syndicate, group, pool,
joint venture or other unincorporated organization through or by means of which any business,
financial operation or venture is carried on and which is not a corporation, trust or estate within the
meaning of the Internal Revenue Code.
A corporation includes association, which are taxable as corporation, and joint-stock companies.
. . . The individual apartment owners are generally tenants in common of the common areas and
joint owners of the personal property of the organization. Almost invariably they are not partners
and the mere fact that they agree to share expenses does not make the arrangement a partnership.
The Federal regulations specifically prescribe that a joint undertaking merely to share expenses is
not a partnership.
Mere co-ownership or property which is maintained, kept in repair, and rented or leased does not
constitute a partnership. . . . Tenants in common may, however, be partners if they actively carry on
a trade, business, financial operation or venture and divide the profits thereof.
Consequently a partnership may be created if the co-owners of an apartment building lease space
and provide services to the occupants. The principal question is whether the owners are engaged in
a business for profit. . . . Accordingly where portions of a condominium project are leased or rented
as barber shops, drug stores, beauty shops, or other comer enterprises, the income therefrom will be
subject to taxation.
If the condominium owners are conducting a business for profit, it must also be determined
whether the business is a partnership or a corporation. If it meets the tests prescribed for a corporate
entity by the Revenue Service its income will be subject to taxation as a corporation, otherwise it will
be considered as some other form of taxable entity.
See Ferrer and Stecher, supra note 48, at §454. Under Philippine law though, a condominium
corporation may not adopt purposes other than those provided under the Condominium Act. Infra.
284
284 SUPREME COURT REPORTS ANNOTATED
Yamane vs. BA Lepanto Condominium Corporation
reason why the condominium corporation may be made liable by the local
government unit for business taxes. Even though such activities would be
considered as ultra vires, since they are engaged in beyond the legal capacity of
the condominium corporation, the principle of estoppel would preclude the
62
corporation or its officers and members from invoking the void nature of its
undertakings for profit as a means of acquitting itself of tax liability.
Still, the City Treasurer has not posited the claim that the Corporation is
engaged in business activities beyond the statutory purposes of a condominium
corporation. The assessment appears to be based solely on the Corporation’s
collection of assessments from unit owners, such assessments being utilized to
defray the necessary expenses for the Condominium Project and the common
areas. There is no contemplation of business, no orientation towards profit in this
case. Hence, the assailed tax assessment has no basis under the Local Government
Code or the Makati Revenue Code, and the insistence of the city in its collection of
the void tax constitutes an attempt at deprivation of property without due process
of law.
WHEREFORE, the petition is DENIED. No costs.
SO ORDERED.
Puno (Chairman), Austria-Martinez and Callejo, Sr., JJ.,concur.
Chico-Nazario, J.,On Leave.
Petition denied.
 No. L-52361. April 27, 1981. * Section 5 (b) of P.D. No. 902-A. The subject matters of the instant cases according to the
SUNSET VIEW CONDOMINIUM CORPORATION, petitioner, vs. THE HON.
JOSE C. CAMPOS, JR. OF THE COURT OF FIRST INSTANCE, BRANCH XXX,
PASAY CITY and AGUILAR-BERNARES REALTY, respondents.
No. L-52524. April 27, 1981.
*
SUNSET VIEW CONDOMINIUM CORPORATION, petitioner, vs. THE HON.
JOSE C. CAMPOS, JR., PRESIDING JUDGE OF THE COURT OF FIRST
INSTANCE, BRANCH XXX, PASAY CITY, and LIM SIU LENG, respondents.
Civil Law; Property; Condominium; Ownership; Purchaser of a condominium unit
becomes owner of the unit only upon full payment of its purchase price.—The share of stock
appurtenant to the unit will be transferred accordingly to the purchaser of the unit only
upon full payment of the purchase price at which time he will also become the owner of the
unit. Consequently, even under the contract, it is only the owner of a unit who is a
shareholder of the Condominium Corporation. Inasmuch as ownership is conveyed only
upon full payment of the purchase price, it necessarily follows that a purchaser of a unit
who has not paid the full purchase price thereof is not the owner of the unit and
consequently is not a shareholder of the Condominium Corporation.
Same, Same, Same, Same; Same; Ownership of a unit is a condition to become a
shareholder in the condominium corporation; “Separate interest” in a condominium,
construed.—Pursuant to the above statutory provision, ownership of a unit is a
condition sine qua non to being a shareholder in the condominium corporation. It follows
that a purchaser of a unit who is not yet the owner thereof for not having fully paid the
full purchase price, is not a shareholder. By necessary implication, the “separate interest”
in a condominium, which entitles the holder to become automatically a shareholder in the
condominium corporation, as provided in section 2 of the Condominium Act, can be no other
than ownership of a unit. This is so
______________
*FIRST DIVISION
296
296 SUPREME COURT REPORTS ANNOTATED
Sunset View Condominium Corp. vs. Campos, Jr.
because nobody can be a shareholder unless he is the owner of a unit and when he
ceases to be the owner, be also ceases automatically to be a shareholder.
Same; Same, Same; Same; Same; Jurisdiction; Collections of overdue accounts on
assessments of a condominium within the jurisdiction of regular courts.—Inasmuch as the
private respondents are not shareholders of the petitioner condominium corporation, the
instant cases for collection cannot be a “controversy arising out of intra-corporation or
partnership relations between and among stockholders, members or associates; between
any or all of them and the corporation, partnership or association of which they are
stockholders, members or associates, respectively” which controversies are under the
original and exclusive jurisdiction of the Securities & Exchange Commission, pursuant to
allegations of the complaints are under the jurisdiction of the regular courts.
PETITION from the order of the Court of First Instance, Br. XXX, Pasay City.
The facts are stated in the opinion of the Court.
FERNANDEZ, J.:
These two cases which involve similar facts and raise identical questions of law
were ordered consolidated by resolution of this Court dated March 17, 1980. 1
The petitioner, Sunset View Condominium Corporation, in both cases, is a
condominium corporation within the meaning of Republic Act No. 4726 in relation
to a duly registered Amended Master Deed with Declaration of Restrictions of the
Sunset View Condominium Project located at 2230 Roxas Boulevard, Pasay City
of which said petitioner is the Management Body holding title to all the common
and limited common areas. 2
_______________
1Rollo of G.R. NO. 52524, p. 170.
2Petition, G.R. NO. 52361, Rollo, p. 2.
297
VOL. 104, APRIL 27, 1981 297
Sunset View Condominium Corp. vs. Campos, Jr.
G.R. NO. 52361
The private respondent, Aguilar-Bernares Realty, a sole proprietorship with
business name registered with the Bureau of Commerce, owned and operated by
the spouses Emmanuel G. Aguilar and Zenaida B. Aguilar, is the assignee of a
unit, “Solana”, in the Sunset View Condominium Project with La Perla
Commercial, Incorporated, as assignor. The La Perla Commercial, Incorporated
3
bought the ‘“Solana” unit on installment from the Tower Builders, Inc. The 4
petitioner, Sunset View Condominium Corporation, filed for the collection of
assessments levied on the unit against Aguilar-Bernares Realty, private
respondent herein, a complaint dated June 22, 1979 docketed as Civil Case No.
7303-P of the Court of First Instance of Pasay City, Branch XXX. The private
respondent filed a Motion to Dismiss the complaint on the grounds (1) that the
complaint does not state a cause of action: (2) that the court has no jurisdiction
over the subject or nature of the action; and (3) that there is another action pending
between the same parties for the same cause. The petitioner filed its opposition
thereto. The motion to dismiss was granted on December 11, 1979 by the
respondent Judge who opined that the private respondent is, pursuant to Section reconsideration thereof was denied by the trial court in its Order dated September
2 of Republic Act No. 4726. a “holder of a separate interest” and consequently, a 19, 1979. 12

shareholder of the plaintiff condominium corporation; and that “the case should be
properly filed with the Securities & Exchange Commission which has exclusive _______________
original jurisdiction on controversies arising between shareholders of the 5Annex “F”, Rollo, pp. 60-62.
corporation.” The motion for reconsideration thereof having been denied, the 6Annex “D”, Rollo, pp. 52-54.
petitioner, alleging grave abuse of discretion on the part of respondent Judge, filed 7Annex “C”, Rollo, pp. 45-50.
the instant petition for certiorari praying that the said orders be set aside. 8Annex “G”, Rollo, pp. 63-66.
G.R. NO. 52524
9Annex “H”, Rollo, pp. 67-70.
Annex “I”, Rollo, pp. 71-76.
10

The petitioner filed its amended complaint dated July 16, 1979 docketed as Civil Annex “J”, Rollo, p. 77.
11

Case No. 14127 of Branch I of the City Annex “M”, Rollo, p. 84.
12

299
_______________ VOL. 104, APRIL 27, 1981 299
3Deed of Assignment, Rollo of G.R. No. 52361, pp. 28-29.
Sunset View Condominium Corp. vs. Campos, Jr.
4Contract to Buy and Sell, Idem., Rollo, pp 30-33. The private respondent then appealed pursuant to Section 10 of Rule 40 of the
298 Rules of Court to the Court of First Instance, where the appeal was docketed
298 SUPREME COURT REPORTS ANNOTATED as Civil Case No. 7530-P. The petitioner filed its “Motion to Dismiss Appeal” on
Sunset View Condominium Corp. vs. Campos, Jr. the ground that the order of the trial court appealed from is interlocutory. 13

Court of Pasay City for the collection of overdue accounts on assessments and The motion to dismiss the appeal was denied and the parties were ordered to
insurance premiums and the interest thereon amounting to P6,168.06 as of March submit their respective memorandum on the issue raised before the trial court and
31, 1979 against the private respondent Lim Siu Leng to whom was assigned on
5 on the disputed order of the trial judge. After the parties had submitted their
14

July 11, 1977 a unit called “Alegria” of the Sunset View Condominium Project by respective memoranda on the matter, the respondent Judge issued an order dated
Alfonso Uy who had entered into a “Contract to Buy and Sell” with Tower
6 December 14, 1979 in which he directed that “the appeal is hereby dismissed and
Builders, Inc. over the said unit on installment basis. 7 the judgment of the lower court is reversed. The case is dismissed and the parties
The private respondent filed a motion to dismiss on the ground of lack of are directed to ventilate their controversy with the Securities & Exchange
jurisdiction, alleging that the amount sought to be collected is an assessment. The Commission.” The petitioner’s motion for reconsideration thereof was denied in
15

correctness and validity ot which is certain to involve a dispute between her and an order dated January 14, 1980. Hence this petition for certiorari, alleging grave
16

the petitioner corporation; that she has automatically become, as a purchaser of
the condominium unit, a stockholder of the petitioner pursuant to Section 2 of the
Condominium Act, Republic Act No. 4726; that the dispute is intra-corporate and
is consequently under the exclusive jurisdiction of the Securities & Exchange
Commission as provided in Section 5 of P.D. No. 902-A. 8 The identical issues raised in both petitions are the following:
The petitioner filed its opposition thereto, alleging that the private respondent
who had not fully paid for the unit was not the owner thereof, consequently was
not the holder of a separate interest which would make her a stockholder, and that
hence the case was not an intra-corporate dispute. 9
After the private respondent had filed her answer to the opposition to the
motion to dismiss of the petitioner, the trial court issued an order dated August
10
abuse of discretion on the part of the respondent Judge.
Issues Common to Both Cases
It is admitted that the private respondents in both cases have not yet fully paid
the purchase price of their units.
1. 1.Is a purchaser of a condominium unit in the condominium project managed by
the petitioner, who has not yet fully paid the purchase price thereof,
automatically a stockholder of the petitioner Condominium Corporation?
2. 2.Is it the regular court or the Securities & Exchange Commission that has
jurisdiction over cases for collection of assessments assessed by the Condominium

Corporation on
13, 1979 denying the motion to dismiss, The private respondent’s motion for
11

________________
 1. condominium units the full purchase price of which has not been paid?
The private respondents in both cases argue that every purchaser of a
condominium unit, regardless of whether or not he has fully paid the purchase
price, is a “holder of a separate interest” mentioned in Section 2 of Republic Act
No. 4726, otherwise known as “The Condominium Act” and is automatically a
shareholder of the condominium corporation.
The contention has no merit. Section 5 of the Condominium Act expressly
provides that the shareholding in the Condominium Corporation will be conveyed
only in a proper case Said Section 5 provides:
“Any transfer or conveyance of a unit or an apartment, office or other space therein, shall
include the transfer or conveyance of the undivided interests in the common areas or, in a
proper case, the membership or shareholding in the condominium corporation x x x.”
It is clear then that not every purchaser of a condominium unit is a shareholder of
the condominium corporation. The Condominium Act leaves to the Master Deed
the determination of when the shareholding will be transferred to the purchaser
of a unit. Thus, Section 4 of said Act provides:
“The provisions of this Act shall apply to property divided or to be divided into
condominium only if there shall be recorded in the Register of Deeds of the province or city
in which the property lies and duly annotated in the corresponding certificate of title of the
land x x x an enabling or master deed which shall contain, among others, the following:
xxx
“(d) A statement of the exact nature of the interest acquired or to be acquired by the
purchaser in the separate units and in the common areas of the condominium project x x
x.”
The Amended Master Deeds in these cases, which were duly registered in the
Register of Deeds, and which contain, by
301
VOL. 104, APRIL 27, 1981 301
Sunset View Condominium Corp. vs. Campos, Jr.
1. mandate of Section 4, a statement of the exact nature of the interest acquired by,
a purchaser of a unit, provide in Section 6 of Part I:
“(d) Each Unit owner shall, as an essential condition to such ownership, acquire
stockholding in the Condominium Corporation hereinbelow provided x x x.” 17
The Amended Master Deeds likewise provide in Section 7 (b), thus:
“(b) All unit owners shall of necessity become stockholders of the Condominium
Corporation. TOWER shall acquire all the shares of stock of SUNSET VIEW and shall
allocate the said shares to the units in proportion to the appurtenant interest in the
COMMON AREAS and LIMITED COMMON AREAS as provided in Section 6 b) above.
Said shares allocated are mere appurtenances of each unit, and, therefore, the same cannot
be transferred, conveyed, encumbered or otherwise disposed of separately from the Unit x
x x.” 18
It is clear from the above-quoted provisions of the Master Deeds that the
shareholding in the Condominium Corporation is inseparable from the unit to
which it is only an appurtenant, and that only the owner of a unit is a shareholder
in the Condominium Corporation.
Subparagraph (a) of Part I, Section 6, of the Master Deeds determines when
and under what conditions ownership of a unit is acquired by a purchaser thus:
“(a) The purchaser of a unit shall acquire title or ownership of such Unit, subject to the
terms and conditions of the instrument conveying the unit to such purchaser and to the
terms and conditions of any subsequent conveyance under which the purchaser takes title
to the Unit, and subject further to this MASTER DEED x x x.”
19
________________
Petition, G.R. NO. 52361, Rollo, p. 11.
17
Idem., Rollo, pp. 11-12.
18
Idem., Rollo, p. 11.
19
302
302 SUPREME COURT REPORTS ANNOTATED
Sunset View Condominium Corp. vs. Campos, Jr.
The instrument conveying the unit “Solana” in G.R. NO. 52361 is the “Contract to
Buy and Sell” dated September 13, 1977, Annex “D”, while that conveying the unit
“Alegria” in G.R. NO. 52524 is the “Contract to Buy and Sell” dated May 12, 1976,
Annex “C”. In both deeds of conveyance, it is provided:
“4. Upon full payment by the BUYER of the total purchase price and full compliance by
the BUYER of all its obligations herein, the SELLER will convey unto the BUYER, as soon
as practicable after completion of the construction, full and absolute title in and to the
subject unit, to the shares of stock pertaining thereto and to all rights and interests in
connection therewith x x x.” 20
The share of stock appurtenant to the unit will be transferred accordingly to the
purchaser of the unit only upon full payment of the purchase price at which time
he will also become the owner of the unit. Consequently, even under the contract,
it is only the owner of a unit who is a shareholder of the Condominium Corporation.
Inasmuch as ownership is conveyed only upon full payment of the purchase price,
it necessarily follows that a purchaser of a unit who has not paid the full purchase
price thereof is not the owner of the unit and consequently is not a shareholder of
the Condominium Corporation.
That only the owner of a unit is a stockholder of the Condominium Corporation
is inferred from Section 10 of the Condominium Act which reads:
“SEC. 10. x x x Membership in a condominium corporation, regardless of whether it is a
stock or non-stock corporation, shall not be transferable separately from the condominium
unit of which it is an appurtenance. When a member or stockholder ceases to own a unit Sunset View Condominium Corp. vs. Campos, Jr.
in the project in which the condominium corporation owns or holds the common areas, he WHEREFORE, the questioned orders of the respondent Judge dated December 11,
shall automatically cease to be a member or stockholder of the condominium corporation.”
1979 and January 4, 1980 in Civil Case No. 7303-P, subject matter of the Petition
______________ in G.R. NO. 52361, are set aside and said Judge is ordered to try the case on the
merits. The orders dated December 14, 1979 and January 14, 1980 in Civil Case
Annex “C”, G.R. NO. 52524, Rollo, p. 47.
20 No. 7530-P, subject matter of the petition in G.R. NO. 52524 are set aside and the
303 case is ordered remanded to the court a quo,City Court of Pasay City, for trial on
VOL. 104, APRIL 27, 1981 303 the merits, with costs against the private respondents.
Sunset View Condominium Corp. vs. Campos, Jr. SO ORDERED.
Pursuant to the above statutory provision, ownership of a unit is a condition sine Teehankee (Chairman), Makasiar, Guerrero and MelencioHerrera,
qua non to being a shareholder in the condominium corporation. It follows that a JJ., concur.
purchaser of a unit who is not yet the owner thereof for not having fully paid the Orders of respondent judge are set aside.
full purchase price, is not a shareholder. By necessary implication, the “separate
interest” in a condominium, which entitles the holder to become automatically a
share holder in the condominium corporation, as provided in Section 2 of the
Condominium Act, can be no other than ownership of a unit. This is so because
nobody can be a shareholder unless he is the owner of a unit and when he ceases
to be the owner, he also ceases automatically to be a shareholder.
The private respondents, therefore, who have not fully paid the purchase price
of their units and are consequently not owners of their units are not members or
shareholders of the petitioner condominium corporation.
Inasmuch as the private respondents are not shareholders of the petitioner
condominium corporation, the instant cases, for collection cannot be a “controversy
arising out of intracorporate or partnership relations between and among
stockholders, members or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members
or associates, respectively” which controversies are under the original and
exclusive jurisdiction of the Securities & Exchange Commission, pursuant to
Section 5 (b) of P.D. No. 902-A. The subject matters of the instant cases according
to the allegations of the complaints are under the jurisdiction of the regular courts:
that of G.R. NO. 52361, which is for the collection of P8,335.38 with interest plus
attorney’s fees equivalent to the principal or a total of more than P10,000.00 is
under the jurisdiction of the Court of First Instance; and that of G.R. NO. 52524,
which is for the collection of P6,168.06 is within the jurisdiction of the City Court.
In view of the foregoing, it is no longer necessary to resolve the issue raised
in G.R. NO. 52524 of whether an order of the City Court denying a motion to
dismiss on the ground of lack of jurisdiction can be appealed to the Court of First
Instance.
304
304 SUPREME COURT REPORTS ANNOTATED
 G.R. No. 95778. July 17, 1992. * or revocation of franchise or certificate of registration of a corporation should be filed took
SKYWORLD CONDOMINIUM OWNERS ASSOCIATION, INC.,
petitioners, vs. SECURITIES AND EXCHANGE COMMISSION and BAGUIO
SKYWORLD CONDOMINIUM, respondents.
Corporation Law; Administrative Law; The Securities and Exchange Commission
may delegate its authority to hear cases before it.—The Commission can validly delegate
the authority to exercise the specific powers assigned to it by law. The final paragraph of
Section 6, Pres. Decree No. 902-A states: “In the exercise of the foregoing authority and
jurisdiction of the Commission, hearings shall be conducted by the Commission or by a
Commissioner or by such other bodies, boards, committees and/or officers as may be
created or designated by the Commission for the purpose. x x x”
Same; Same; A private entity, acting as a relator, may prosecute its action for
revocation of registration by itself.—It is true that Mr. Ruiz signed a petition with the BSCC
as a relator prior to the consolidation of the two cases. However, that petition was
apparently disregarded. Mr. Ruiz was validly authorized to handle the two cases
simultaneously filed by the private parties themselves against each other. It must be
recalled that in PED No. 88-0418, BSCC pursued its case by itself and not as a mere relator
suing through the help of the PED. A private entity is not prohibited from prosecuting its
action for revocation of registration by itself. Otherwise, the petition of SCOAI against the
BSCC also seeking the revocation of the latter’s registration would not have been taken
cognizance of by the SEC on the ground that the case should have been prosecuted by the
Commission upon the relation of SCOAI.
Same; Same; Before P.D. 1758, amending P.D. 902-A took effect, the Commission could
rely on the Prosecution and Enforcement Department to hear franchise revocation cases.—
At the time the consolidated cases were filed and tried, the SEC Rules of Procedure
(effective July 12, 1977) did not contain any provision specifically designating the body or
officer who should hear and decide suits for suspension or revocation of franchise or
certificates of registration. No amendments
________________
THIRD DIVISION.
*
566
566 SUPREME COURT REPORTS ANNOTATED
Skyworld Condominium Owners Association, Inc. vs.
Securities and Exchange Commission
were yet infused into the rules to keep up with the changes introduced by Pres. Decree
No. 1758. The Commission had to rely on a particular office to hear the case on September
11, 1989.
Same; Same; While under the 1989 Securities and Exchange Commission Revised
Rules of Procedure, Securities Investigation and Clearing Department is the authorized by
Securities and Exchange Commission Department to hear franchise revocation cases, it
would be impractical to transfer to it cases already for decision.—The Revised SEC Rules
of Procedure (1989) that designates the body (SICD) before which, actions for suspension
effect only on October 29, 1989 (See Section 2[c], Rule XX). To require the specified body to
take over the adjudication after the case was ready for decision was improper and
impractical.
Same; Same; Securities and Exchange Commission may approve recommendations of
its subordinate department without the knowledge of the parties.—The parties do not
participate in the deliberation and decision making process. They are not supposed to be
present when the SEC deliberates and votes on the action to be taken. Notice is given after
the decision is promulgated but not before the Board sits down to act on cases already
heard and awaiting resolution.
Same; Same; Securities and Exchange Commission may treat an appeal from a
Prosecution and Enforcement Department resolution as a motion for reconsideration to the
Securities and Exchange Commission en banc.—In view of these, it was also proper for the
commission to have treated the appeal of the petitioner as a motion for reconsideration. In
doing so, no right of the petitioner to due process was violated. The Court finds no grave
abuse of discretion committed by the Commission in deciding in that manner. The
Commission properly made a thorough study of the facts presented by the opposing parties,
and exhaustively explained its reasons for sustaining its decision to revoke the certificate
of registration of the SCOAI. A reading of the order in SEC-AC No. 297 dated September
14, 1990 reveals that its findings are supported by substantial evidence and justified by
the relevant laws and jurisprudence.
Same; Same; Condominium Act; All incorporators of a condominium corporation must
be an owner of a condominium unit.—The Court, thus, upholds the finding of the
Commission that the indispen-
567
VOL. 211,JULY17,1992 567
Skyworld Condominium Owners Association, Inc. vs.
Securities and Exchange Commission
sable requirement that all incorporators of a condominium corporation must be
shareholders thereof was not satisfactorily complied with by the petitioner at the time a
certificate of registration was applied for. (Section 5, Corporation Code of the Philippines
[Batas Pambansa Blg. 68]; Section 10, Condominium Act [Rep. Act 4726]. To be a
shareholder, one must necessarily be an owner of a condominium unit. (Sunset View
Condominium Corporation v. Campos, Jr., 104 SCRA 295 [1981]) In the case at bar, it was
found by the SEC that only one, Angel Bautista, was considered to be an owner of a unit
in the Skyworld Condominium at the time of incorporation.
Same; Same; Same; Estoppel; Due Process; Effect of submitting case to hearing
officer.—The Master Deed with Declaration of Restrictions in its section 8 provides that a
condominium corporation should be organized by a developer “pursuant to the provisions
of the Condominium Act and of the Corporation Code as amended for the purpose of
holding files to all common areas and managing the project” (See Rollo, p. 158). The Court
likewise confirms the analysis of the respondent Commission that petitioner SCOAI was
barred by estoppel from repudiating the resulting adverse decision after it had voluntarily
submitted to the jurisdiction of the hearing officer in settling the issue of revocation.
 Same; Same; Same; Judgments; Jurisdiction; Injunctions; Even if in a petition for
injunction a regular court touches on the right of a corporation to exist, its decision would
not be binding on Securities and Exchange Commission.—The contentions that the private
respondent BSCC and the CBC were engaged in forum-shopping and that the prosecution
of the SEC consolidated cases was barred by res judicata deserve scant consideration.
Suffice it to state that the actions before the courts commonly involved prayers for restraint
and/or injunction against SCOAI. The petitions did not seek an administrative inquiry on
revocation of a certificate of registration. The pertinent issue in the case at bar is one that
is more appropriately dealt with by an administrative agency such as the SEC. Hence,
even if the courts did touch on the right of a corporation (SCOAI) to exist and to exercise
prerogatives as such, the court decisions would not bind the parties as to prevent a recourse
before the SEC.
PETITION to review the decision of the Securities and Exchange Commission.
The facts are stated in the opinion of the Court.
568
568 SUPREME COURT REPORTS ANNOTATED
Skyworld Condominium Owners Association, Inc. vs. Securities
and Exchange Commission
Emilio G. Abrogena for petitioner.
Helenea F.M. Dauz for private respondent.
GUTIERREZ, JR., J.:
This is a petition to review the decision of the Securities and Exchange
Commission (SEC), en banc. The petition was reinstated after a reconsideration of
two previous resolutions of this Court denying the same for non-compliance with
the required payment of costs and clerk’s commission, and after recalling the entry
of judgment issued on February 6, 1992. We also decided to treat the petition as
an exception to the rule that SEC decisions must first pass the intermediate appeal
process.
Petitioner Skyworld Condominium Owners Association, Inc. (SCOAI) was the
appellant in SEC-AC No. 297. Its appeal was treated by the Commission, en
banc as a motion for reconsideration. The petitioner primarily assails the allegedly
unauthorized action of Special Prosecutor Norberto Ruiz of the Prosecution and
Enforcement Department of the SEC to decide the consolidated petitions for
revocation of certificate of registration.
Petitioner SCOAI claims to be a legitimate condominium corporation in
relation to the Skyworld Condominium located at Session Road corner Calderon
St., Baguio City and covered by Transfer Certificate of Title (TCT) No. 33451 of
the Registry of Deeds of Baguio City.
SCOAI was organized and granted a certificate of registration on March 21,
1985 by the SEC. It claims to be the condominium corporation recognized by the
Inter-Realty Development Corporation (hereinafter referred to as Inter-Realty),
the original owner of the land covered by TCT No. 33451 and the condominium
project. It also claims to have been recognized by the China Banking Corporation
(CBC), the subsequent owner of the condominium project because the latter
consented to the organization of the SCOAI.
The antecedent facts of the case are as follows:
On September 12, 1975, Inter Realty obtained a loan from the CBC as security
for which it mortgaged three (3) parcels of land, which were later consolidated into
one title, TCT No. 33451, and the improvements thereon. On July 21, 1987, the
569
VOL. 211,JULY17,1992 569
Skyworld Condominium Owners Association, Inc. vs. Securities
and Exchange Commission
initial indebtedness was increased to P7,000,000.00.
For Inter-Realty’s failure to pay the debt, the CBC foreclosed the condominium
project. The foreclosure sale was held on April 11, 1983 after compliance with the
notice requirements. The project was sold to CBC which was the highest bidder.
On April 6, 1984, Inter-Realty and CBC executed a Memorandum of Agreement
providing for an extended period for redemption of the condominium project, until
all the condominium units shall have been sold and the proceeds turned over to
the CBC and applied to the loan accounts of Inter-Realty (Rollo, pp. 38-42).
Meanwhile, on the same date, April 6, 1984, Inter-Realty made a written
authorization in favor of Angel Bautista, a real estate dealer, to buy or sell the
condominium units to buyers (Rollo, pp. 43-44). The authority was for a period of
one year or until April 1985 in order to facilitate the disposition of the units and
the payment of indebtedness with the CBC.
In May, 1985, CBC was notified by petitioner SCOAI through Angel Bautista,
who was the latter’s president, of the organization and official incorporation of the
SCOAI.
When Inter-Realty failed to redeem the foreclosed properties by October 1985,
CBC consolidated its ownership over the land (now covered by TCT No. 38837) and
78% of the condominium’s residential units and common areas.
On December 16, 1985, the CBC as new owner of the foreclosed properties and
with the aim of recovering the unpaid debt of Inter-Realty, authorized Angel
Bautista to sell the unsold condominium units. This authority was, however,
revoked by CBC on April 17, 1986 after discovering that Bautista violated his
fiduciary obligations as agent.
 Two petitions were filed against the petitioner SCOAI, one of them contesting
the existence of the petitioner as an entity, and the other, for a writ of preliminary
injunction praying that the petitioner be stopped from exercising the prerogatives
of a condominium corporation. The first petition was filed on August 8, 1986 by
CBC before the SEC docketed as SEC No. 3035. The second was filed on October
9, 1986 before the Regional Trial Court of Baguio, Branch V (Civil Case No. 915-
R) by the respondent Baguio Skyworld Condominium Corporation (BSCC)
570
570 SUPREME COURT REPORTS ANNOTATED
Skyworld Condominium Owners Association, Inc. vs. Securities
and Exchange Commission
which was organized at the instance of CBC and registered with the SEC on
September 19, 1986.
On October 3, 1986, a petition was filed by CBC against Angel Bautista before
the Regional Trial Court of Baguio City (Branch III, Civil Case No. 908-R) for a
writ of preliminary injunction to enjoin Mr. Bautista from further representing
himself as agent of the new owner-developer, the CBC, which already revoked his
authority to sell. The trial court granted a writ of preliminary injunction which
was later made permanent by the Court of Appeals.
On November 14, 1986, the case filed by the BSCC was dismissed by the trial
court. On February 3, 1988, the case filed by the CBC was dismissed by the SEC.
On June 20, 1988, BSCC filed a complaint before the SEC’s Prosecution and
Enforcement Department (PED) to revoke the certificate of registration of
petitioner on the ground of fraudulent procurement of the certificate. The case was
docketed as PED No. 88-0418 (Rollo, p. 73, et. seq).
On January 13, 1989, petitioner SCOAI in turn sued to revoke the certificate of
registration of the BSCC before the SEC’s Securities Investigation and Clearing
Department (SICD). The case was docketed as SEC No. 3493.
Acting upon the complaint of the BSCC in PED No. 88-0418, the PED, through
Senior SE Specialist Norberto Ruiz filed a petition docketed as SEC No. 3601 dated
June 30, 1989 with the BSCC as a relator, for the revocation of the registration of
the herein petitioner. (See Rollo, pp. 95-107). The said petition was approved by
PED Director Elnora Adviento as recommended by the Chief of the Prosecution
Division, Villamin P. Lam.
On July 5, 1989, the SICD endorsed SEC No. 3493 (the one filed by SCOAI) to
the PED so that a new docket number, PED No. 89-572-A was assigned to that
case.
The two cases for revocation of registration of the SCOAI (PED No. 88-0418)
and the BSCC (PED No. 89-572-A) were consolidated on July 25, 1989.
A hearing was conducted on September 11, 1989 by the PED with Mr. Norberto
Ruiz as the hearing officer. The counsels of the two parties were present.
On December 12, 1989, the PED issued a resolution ordering
571
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and Exchange Commission
the revocation of the certificate of registration of the SCOAI. The resolution was
prepared by Mr. Norberto Ruiz after studying the substantial evidence he received
and the arguments of the parties in the memoranda submitted by the parties to
him. On the same date, the resolution was presented by PED Director Elnora
Adviento before the Commission, en banc which approved the same.
As reflected in the Minutes of the Executive Session of the Commission Sitting
En Banc, December 12, 1989, 3:50 p.m.:
PED MATTERS
Baguio Skyworld Condominium Corporation v. Skyworld Condominium Owner’s
Association, Inc.
“xxx Based on the foregoing documentary evidence submitted to them, she (Director
Elnora Adviento) recommended that the Certificate of Registration of Skyworld
Condominium Owners Association, Inc. be revoked and cancelled in view of the findings
that it procured its certificate of registration through fraud/misrepresentation and there
is no evidence to show that Skyworld Condominium Owners Association have managed
the Skyworld Condominium.
“The Commission en banc resolved to approve the resolution, as recommended.” (Rollo,
pp. 110-111; italics supplied)
A motion for reconsideration was filed before the PED but was denied.
On March 6, 1990, the petitioner filed a notice of appeal before the
Commission, en banc. The appeal was docketed as SEC-AC No. 297. The
Commission treated it as a motion for reconsideration because the approved
resolution was deemed to be the decision of the Commission, en banc on the issue
of revocation. The motion was denied for lack of merit. Hence, this petition in
which the following assigned errors are raised:
I
THE RESPONDENT COMMISSION ERRED WHEN IT ALLOWED SPECIAL
PROSECUTOR NORBERTO RUIZ IN DECIDING (sic) THE CASE AFTER FILING THE
PETITION WITH THE SICD WITHOUT HEARING.
572
572 SUPREME COURT REPORTS ANNOTATED
 Skyworld Condominium Owners Association, Inc. vs. Securities
and Exchange Commission
II
THE RESPONDENT COMMISSION ERRED WHEN IT APPROVED THE RESOLUTION
OF NORBERTO B. RUIZ DATED DECEMBER 12, 1989 IN AN EXECUTIVE SESSION
IN THE AFTERNOON OF THE SAME DAY WITHOUT APPEAL.
III
THE RESPONDENT COMMISSION ERRED WHEN IT DECLARED THAT
PROSECUTOR NORBERTO B. RUIZ HAS AUTHORITY TO DECIDE THE
REVOCATION CASE AFTER HE HAS FILED A PETITION WITH SICD TO REVOKE
THE CERTIFICATE OF REGISTRATION OF PETITIONER.
IV
THE RESPONDENT COMMISSION ERRED WHEN IT TREATED THE APPEAL AS
MOTION FOR RECONSIDERATION.
V associates, respectively; and between such corporation, partnership or association and the
THE RESPONDENT COMMISSION ERRED WHEN IT DISMISSED THE APPEAL.
(Rollo, p. 14)
The assigned errors can more conveniently be restated into the following: 1)
whether or not the respondent Commission validly approved the alleged
unauthorized resolution or decision made by Mr. Norberto B. Ruiz on the
revocation case; and 2) whether or not the appeal, SEC-AC No. 297 was correctly
treated as a motion for reconsideration and, thereafter, dismissed.
The petitioner essentially questions the authority of Mr. Ruiz to decide. It was
Mr. Ruiz who was assigned the case of PED No. 88-0418 for investigation and
prosecution. Accordingly, Mr. Ruiz filed a petition (SEC No. 3601) before the
Securities Investigation and Clearance Department (SICD) of the SEC. It is
argued that Mr. Ruiz acted as prosecutor and judge over the case, hence, he issued
the resolution without authority and with grave abuse of discretion. He allegedly
went beyond the duties required of a member of the PED which are
573
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and Exchange Commission
limited to investigation and prosecution of civil and criminal cases as well as other
actions involving violation of laws, rules and regulations enforced by the SEC. The
petitioner adds that the presentation for approval of the resolution of Mr. Ruiz to
the Commission,en banc was irregular, null and void for being done without the
knowledge of the petitioner. Thus, the petitioner was allegedly deprived of the
benefit of an appeal from the resolution to the Commission, en banc.
The contentions are without merit. Pres. Decree No. 902-A vests on the
Commission the original and exclusive jurisdiction to hear and decide cases
involving, among others, disputes between the corporation and the state regarding
its legal right to exist, and the power to hear and decide on the suspension or
revocation of a certificate of registration of a corporation.
Section 5, Pres. Decree No. 902-A provides:
“SEC.5. In addition to the regulatory and adjudicative functions of the Securities and
Exchange Commission over corporations, partnerships and other forms of associations
registered with it as expressly granted under existing laws and decrees, it shall have
original and exclusive jurisdiction to hear and decide cases involving:
xxx xxx xxx
“b. Controversies arising out of intra-corporate or partnership relations, between and
among stockholders, members or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members or
State insofar as it concerns their individual franchise or right to exist as such entity; x x x.”
(Italics supplied)
More specifically, Pres. Decree No. 902-A grants to the Commission in paragraph
1(1), Section 6 the power:
“SEC.6.
xxx xxx xxx
1) To suspend or revoke, after proper notice and hearing, the franchises or certificate
of registration of corporations, partnerships or associations, upon any of the grounds,
provided by law, including the following:
1) Fraud in procuring its certificate of registration;”
574
574 SUPREME COURT REPORTS ANNOTATED
Skyworld Condominium Owners Association, Inc. vs. Securities
and Exchange Commission
xxx xxx xxx
The Commission can validly delegate the authority to exercise the specific powers
assigned to it by law. The final paragraph of Section 6, Pres. Decree No. 902-A
states:
“In the exercise of the foregoing authority and jurisdiction of the Commission, hearings
shall be conducted by the Commission or by a Commissioner or by such other bodies,
boards, committees and/or officers as may be created or designated by the Commission for
the purpose. x x x”
In the consolidated cases, the Commission empowered the PED to conduct the
hearing and to decide on the revocation of a certificate of registration. The task
was assigned to Mr. Ruiz for and in behalf of the Commission.
It is true that Mr. Ruiz signed a petition with the BSCC as a relator prior to
the consolidation of the two cases. However, that petition was apparently
disregarded. Mr. Ruiz was validly authorized to handle the two cases
simultaneously filed by the private parties themselves against each other. It must
be recalled that in PED No. 88-0418, BSCC pursued its case by itself and not as a
mere relator suing through the help of the PED. A private entity is not prohibited
from prosecuting its action for revocation of registration by itself. Otherwise, the
petition of SCOAI against the BSCC also seeking the revocation of the latter’s
registration would not have been taken cognizance of by the SEC on the ground
that the case should have been prosecuted by the Commission upon the relation of
SCOAI. Under the old rules, the Commission may, motu proprio,commence such
an action (Section 3(c), Rule XX, SEC Rules of Procedure [1977]; See also Section
2(a) and (b), Rule XX, SEC Revised Rules of Procedure [1989]). Commencement of
a similar action by a private citizen or corporation is not precluded.
In judging the merits of the case at the instance of the Commission, Mr. Ruiz
acted only as a trier of the facts presented to him and not as a prosecutor at the
same time. The resolution arrived at was adopted by the Commission, en banc as
its own decision, upon its approval.
575
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Skyworld Condominium Owners Association, Inc. vs. Securities
and Exchange Commission
The Court agrees with the analysis of the respondent Commission that the
petitioner was barred by estoppel by laches from repudiating the jurisdiction of
the hearing officer to whom it has submitted itself and before whom it presented
evidence by way of memorandum.
The petitioner alleges further that Mr. Ruiz went beyond the limited powers to
investigate and to prosecute granted to the PED by Pres. Decree No. 902-A as
amended by Pres. Decree No. 1758 (1981).
The pertinent provision, Section 6 of Pres. Decree No. 1758 states:
“SEC.6. The Prosecution and Enforcement Department shall have, subject to the
Commission’s control and supervision, the exclusive authority to investigate, on complaint
or motu proprio, any act or omission of the Board of Directors/Trustees of corporations, or
of partnerships, or of other associations, or of their stockholders, officers or partners,
including any fraudulent devices, schemes or representations, in violation of any law or
rules and regulations administered and enforced by the Commission; to file and prosecute
in accordance with law and rules and regulations issued by the Commission and in
appropriate cases, the corresponding criminal or civil case before the Commission or the
proper court or body upon prima facie finding of violation of any laws or rules and
regulations administered and enforced by the Commission; and to perform such other
powers and functions as may be provided by law or duly delegated to it by the Commission.”
xxx xxx x x x (Emphasis supplied)
The action of Mr. Ruiz was still within the ambit of the investigative authority
given to him by the Commission under its delegated power to revoke, after proper
notice and hearing, a certificate of registration of any corporation on the ground of
fraud in procuring the certificate of registration (Section 6, 1[1], Pres. Decree No.
902-A as amended).
At the time the consolidated cases were filed and tried, the SEC Rules of
Procedure (effective July 12, 1977) did not contain any provision specifically
designating the body or officer who should hear and decide suits for suspension or
revocation of
576
576 SUPREME COURT REPORTS ANNOTATED
Skyworld Condominium Owners Association, Inc. vs. Securities
and Exchange Commission
franchise or certificates of registration. No amendments were yet infused into the
rules to keep up with the changes introduced by Pres. Decree No. 1758. The
Commission had to rely on a particular office to hear the case on September 11,
1989.
The Revised SEC Rules of Procedure (1989) that designates the body (SICD)
before which, actions for suspension or revocation of franchise or certificate of
registration of a corporation should be filed took effect only on October 29, 1989
(See Section 2[c], Rule XX). To require the specified body to take over the
adjudication after the case was ready for decision was improper and impractical.
We take this occasion to reiterate our ruling on the validity of the delegation of
the power to hold a hearing. In American Tobacco Company v. Director of
Patents, 67 SCRA 287 (1975), where the authority of the Director of Patents to
assign hearing officers to receive evidence was questioned, we ruled:
“Thus it is well-settled that while the power resides solely in the administrative agency
vested by law, this does not preclude a delegation of the power to hold a hearing on the
basis of which the decision of the administrative agency will be made.
“The rule that requires an administrative officer to exercise his own judgment and
discretion does not preclude him from utilizing, as a matter of practical administrative
procedure, the aid of subordinates to investigate and report to him the facts, on the basis
of which the officer makes his decisions. It is sufficient that the judgment and discretion
finally exercised are those of the officer authorized by law.
xxx xxx xxx
 “In the case at bar, while the hearing officer may make preliminary rulings on the
myriad of questions raised at the hearings of these cases,the ultimate decision on the merits
of all the issues and questions involved is left to the Director of Patents.”(Italics supplied,
at pp. 295-296)
The provisions of Pres. Decree No. 902-A as amended do not prohibit the
respondent Commission from designating an officer or a division to hear a case.
The Court reiterates that in the absence in the then rules of the Commission of a
provision designating a particular officer or department that should try a
particular action, the Commission can validly call upon any of
577
VOL. 211,JULY17,1992 577
Skyworld Condominium Owners Association, Inc. vs. Securities
and Exchange Commission
its qualified departments to try a particular action, including the PED to hear and
make a preliminary ruling on the case. This was what the Commission did to meet
the demands of orderly and responsible administration of all the tasks assigned to
it as a government agency.
“The reduction of existing delays in regulating agencies requires the elimination of
needless work at top levels. Unnecessary and unimportant details often occupy far too
much of the time and energy of the heads of these agencies and prevent full and expeditious
consideration of the more important issues. The remedy is a far wider range of delegations
to subordinate officers. The subdelegation of power has been justified by ‘sound principles
of organization’ which demand that ‘those at the top be able to concentrate their attention
upon the larger and more important questions of policy and practice; and their time be
freed, so far as possible, from the consideration of the smaller and far less important
matters of detail.’” (American Tobacco Co. v. Director of Patents, supra, at page 293-294).
The Commission can not also be faulted for approving the PED resolution without
the knowledge of the petitioner.
The parties do not participate in the deliberation and decision making process.
They are not supposed to be present when the SEC deliberates and votes on the
action to be taken. Notice is given after the decision is promulgated but not before
the Board sits down to act on cases already heard and awaiting resolution.
In the present case, it was the Commission for whom the PED acted in
gathering data in the consolidated cases. The delegation made to the PED was
done in accordance with law and the resulting recommendation was arrived at
after notice and hearing. The subsequent approval by the Commission, en
banc was the ultimate exercise of judgment of the Commission. Contrary to the
allegation of the petitioner, the approval by the Commission, en banc was regular
and valid for having been done in the exercise of its original jurisdiction on a case
involving the right of each of the party corporations to exist as an entity (Section
5, Pres. Decree No. 902-A as amended)
In view of these, it was also proper for the commission to have treated the
appeal of the petitioner as a motion for recon-
578
578 SUPREME COURT REPORTS ANNOTATED
Skyworld Condominium Owners Association, Inc. vs. Securities
and Exchange Commission
sideration. In doing so, no right of the petitioner to due process was violated.
The Court finds no grave abuse of discretion committed by the Commission in
deciding in that manner. The Commission properly made a thorough study of the
facts presented by the opposing parties, and exhaustively explained its reasons for
sustaining its decision to revoke the certificate of registration of the SCOAI. A
reading of the order in SEC-AC No. 297 dated September 14, 1990 reveals that its
findings are supported by substantial evidence and justified by the relevant laws
and jurisprudence.
The Court, thus, upholds the finding of the Commission that the indispensable
requirement that all incorporators of a condominium corporation must be
shareholders thereof was not satisfactorily complied with by the petitioner at the
time a certificate of registration was applied for. (Section 5, Corporation Code of
the Philippines [Batas Pambansa Blg. 68]; Section 10, Condominium Act [Rep. Act
4726]. To be a shareholder, one must necessarily be an owner of a condominium
unit. (Sunset View Condominium Corporation v. Campos, Jr., 104 SCRA
295 [1981]) In the case at bar, it was found by the SEC that only one, Angel
Bautista, was considered to be an owner of a unit in the Skyworld Condominium
at the time of incorporation. (Rollo, p. 32)
The Master Deed with Declaration of Restrictions in its section 8 provides that
a condominium corporation should be organized by a developer “pursuant to the
provisions of the Condominium Act and of the Corporation Code as amended for
the purpose of holding files to all common areas and managing the project” (See
Rollo, p. 158). The Court likewise confirms the analysis of the respondent
Commission that petitioner SCOAI was barred by estoppel from repudiating the
resulting adverse decision after it had voluntarily submitted to the jurisdiction of
the hearing officer in settling the issue of revocation. (Tijam v. Sibonghanoy, 23
SCRA 29 [1968]; Bañaga v. Commission on the Settlement of Land Problems, 181
SCRA 599 [1990]; Sapugay v. Court of Appeals, 183 SCRA 464 [1990]; 166 SCRA
657 [1988]; Maersk-Tabacalera Shipping Agency (Filipinas), Inc. v. Court of
Appeals, 187 SCRA 646 [1990]; Marquez v. Secretary of
579
Labor, 171 SCRA 337 [1989]).
The contentions that the private respondent BSCC and the CBC were engaged
in forum-shopping and that the prosecution of the SEC consolidated cases was
barred by res judicata deserve scant consideration. Suffice it to state that the
actions before the courts commonly involved prayers for restraint and/ or
injunction against SCOAI. The petitions did not seek an administrative inquiry on
revocation of a certificate of registration. The pertinent issue in the case at bar is
one that is more appropriately dealt with by an administrative agency such as the
SEC. Hence, even if the courts did touch on the right of a corporation (SCOAI) to
exist and to exercise prerogatives as such, the court decisions would not bind the
parties as to prevent a recourse before the SEC.
The Court finds this petition to be part of a dilatory attempt to stall the
execution of the order revoking and cancelling the certificate of registration of the
Skyworld Condominium Owners Association, Inc. That petitioner seeks a re-
examination of the facts is evident from its arguments. It is unfortunate for it that
courts do not grant a judicial review much less a factual inquiry absent any
showing of arbitrary action or manifest and grievous error on the part of
administrative agencies regarding the determination of facts and interpretation of
laws which they are entrusted to enforce (Blue Bar Coconut Philippines v.
Tantuico, Jr., 163 SCRA 716 [1988]; Beautifont, Inc. v. Court of Appeals, 157 SCRA
481 [1988]; Maximo v. Court of Appeals, 182 SCRA 420 [1990]).
We have further held that:
“The legal presumption is that official duty has been duly performed (Section 5, m, Rule
131, Rules of Court); and it is ‘particularly strong as regards administrative agencies x x x
vested with powers said to be quasi-judicial in nature, in connection with the enforcement
of laws affecting particular fields of activity, the proper regulation and/or promotion of
which requires a technical or special training, aside from a good knowledge and grasp of
the overall conditions, relevant to said field obtaining in the nation.’ [Pangasinan
Transportation v. Public Utility Commission, 70 Phil. 221].” (Beautifont, Inc. v. Court of
Appeals, at p. 493).
580
580 SUPREME COURT REPORTS ANNOTATED
People vs. Alacar
The Court sustains the decision of the respondent Commission dated December
12, 1989 and the Order dated September 14, 1990 denying the motion for
reconsideration since no jurisdictional flaw has been found to justify a reversal.
WHEREFORE, the petition is hereby DISMISSED for lack of grave abuse of
discretion committed by the public respondent. The Order revoking and cancelling
the certificate of registration of petitioner corporation is AFFIRMED.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ.,concur.
Petition dismissed.
 G.R. No. 156364. September 25, 2008.*
JACOBUS BERNHARD HULST, petitioner, vs. PR BUILDERS, INC.,
respondent.
Property; Ownership; Condominium Act (R.A. No. 4726); The Condominium Act
expressly allows foreigners to acquire condominium units and shares in condominium
corporations up to not more than 40% of the total and outstanding capital stock of a
Filipino-owned or controlled corporation.—Under Republic Act (R.A.) No. 4726, otherwise
known as the Condominium Act, foreign nationals can own Philippine real estate through
the purchase of condominium units or townhouses constituted under the Condominium
principle with Condominium Certificates of Title. Section 5 of R.A. No. 4726 states:
SECTION 5. Any transfer or conveyance of a unit or an apartment, office or store or other
space therein, shall include the transfer or conveyance of the undivided interest in the
common areas or, in a proper case, the membership or shareholdings in the condominium
corporation; Provided, however, That where the common areas in the condominium project
are held by the owners of separate units as co-owners thereof, no condominium unit therein
shall be conveyed or transferred to persons other than Filipino citizens or corporations at
least 60% of the capital stock of which belong to Filipino citizens, except in cases of
hereditary succession. Where the common areas in a condominium project are held
by a corporation, no transfer or conveyance of a unit shall be valid if the
concomitant transfer of the appurtenant membership or stockholding in the
corporation will cause the alien interest in such corporation to exceed the limits
imposed by existing laws. (Emphasis supplied) The law provides that no condominium
unit can be sold without at the same time selling the corresponding amount of rights,
shares or other interests in the condominium management body, the Condominium
Corporation; and no one can buy shares in a Condominium Corporation without at the
same time buying a condominium unit. It expressly allows foreigners to acquire
condominium units and shares in condominium corporations up to not more than 40% of
the total and outstanding capital stock of a Filipino-owned or controlled corpora-
_______________
* THIRD DIVISION.
334
334 SUPREME COURT REPORTS ANNOTATED
Hulst vs. PR Builders, Inc.
tion. Under this set up, the ownership of the land is legally separated from the unit
itself. The land is owned by a Condominium Corporation and the unit owner is simply a
member in this Condominium Corporation. As long as 60% of the members of this
Condominium Corporation are Filipino, the remaining members can be foreigners.
MOTION FOR PARTIAL RECONSIDERATION of a decision of the Supreme
Court.
The facts are stated in the resolution of the Court.
Medialdea, Ata, Bello, & Guevarra for petitioner.
Aguirre & Associates Law Firm for respondent.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
This resolves petitioner’s Motion for Partial Reconsideration.
On September 3, 2007, the Court rendered a Decision 1 in the present case, the
dispositive portion of which reads:
“WHEREFORE, the instant petition is GRANTED. The Decision dated October 30,
2002 of the Court of Appeals in CA-G.R. SP No. 60981 is REVERSED and SET ASIDE.
The Order dated August 28, 2000 of HLURB Arbiter Ma. Perpetua Y. Aquino and Director
Belen G. Ceniza in HLRB Case No. IV6-071196-0618 is declared NULL and VOID. HLURB
Arbiter Aquino and Director Ceniza are directed to issue the corresponding certificates of
sale in favor of the winning bidder, Holly Properties Realty Corporation. Petitioner is
ordered to return to respondent the amount of P2,125,540.00, without interest, in
excess of the proceeds of the auction sale delivered to petitioner. After the finality
of herein judgment, the amount of P2,125,540.00 shall earn 6% interest until fully paid.
SO ORDERED.” (Emphasis supplied)
2
_______________
1 Rollo, p. 593.
2 Rollo, p. 614.
335
VOL. 566, SEPTEMBER 25, 2008 335
Hulst vs. PR Builders, Inc.
Petitioner filed the present Motion for Partial Reconsideration 3 insofar as he
was ordered to return to respondent the amount of P2,125,540.00 in excess of the
proceeds of the auction sale delivered to petitioner. Petitioner contends that the
Contract to Sell between petitioner and respondent involved a condominium unit
and did not violate the Constitutional proscription against ownership of land by
aliens. He argues that the contract to sell will not transfer to the buyer ownership
of the land on which the unit is situated; thus, the buyer will not get a transfer
certificate of title but merely a Condominium Certificate of Title as evidence of
ownership; a perusal of the contract will show that what the buyer acquires is the
seller’s title and rights to and interests in the unit and the common areas.
Despite receipt of this Court’s Resolution dated February 6, 2008, respondent
failed to file a comment on the subject motion.
The Motion for Partial Reconsideration is impressed with merit.
The Contract to Sell between petitioner and respondent provides as follows:
“Section 3. TITLE AND OWNERSHIP OF UNIT
a. Upon full payment by the BUYER of the purchase price stipulated in Section
2 hereof, x x x, the SELLER shall deliver to the BUYER the Deed of Absolute
Sale conveying its rights, interests and title to the UNIT and to the common
 areas appurtenant to such UNIT, and the corresponding Condominium 337
Certificate of Title in the SELLER’s name; x x x VOL. 566, SEPTEMBER 25, 2008 337
b. The Seller shall register with the proper Registry of Deeds, the Master Deed Hulst vs. PR Builders, Inc.
with the Declaration of Restrictions and other documents and shall immediately
agement body, the Condominium Corporation; and no one can buy shares in a
comply with all requirements of Republic Act No. 4726 (The Condominium
Act) and Presidential Decree No. 957 (Regulating the Sale of Condominium Corporation without at the same time buying a condominium unit.
It expressly allows foreigners to acquire condominium units and shares in
_______________ condominium corporations up to not more than 40% of the total and outstanding
capital stock of a Filipino-owned or controlled corporation. Under this set up, the
3 Id., at p. 666.
336
ownership of the land is legally separated from the unit itself. The land is owned
336 SUPREME COURT REPORTS ANNOTATED by a Condominium Corporation and the unit owner is simply a member in this
Condominium Corporation.5 As long as 60% of the members of this Condominium
Hulst vs. PR Builders, Inc.
Corporation are Filipino, the remaining members can be foreigners.
Subdivision Lots and Condominiums, Providing Penalties for Violations Thereof). It
Considering that the rights and liabilities of the parties under the Contract to
is hereby understood that all title, rights and interest so conveyed shall be
subject to the provisions of the Condominium Act, the Master Deed with Sell is covered by the Condominium Act wherein petitioner as unit owner was
Declaration of Restrictions, the Articles of Incorporation and By-Laws and the Rules simply a member of the Condominium Corporation and the land remains owned
and Regulations of the Condominium Corporation, zoning regulations and such by respondent, then the constitutional proscription against aliens owning real
other restrictions on the use of the property as annotated on the title or may be property does not apply to the present case. There being no circumvention of the
imposed by any government agency or instrumentality having jurisdiction constitutional prohibition, the Court’s pronouncements on the invalidity of the
thereon. (Emphasis supplied)
4
Contract of Sale should be set aside.
Under Republic Act (R.A.) No. 4726, otherwise known as the Condominium Act, WHEREFORE, the Motion for Partial Reconsideration is GRANTED.
foreign nationals can own Philippine real estate through the purchase of Accordingly, the Decision dated September 3, 2007 of the Court is MODIFIED by
condominium units or townhouses constituted under the Condominium principle deleting the order to petitioner to return to respondent the amount of
with Condominium Certificates of Title. Section 5 of R.A. No. 4726 states: P2,125,540.00 in excess of the proceeds of the auction sale delivered to petitioner.
“SECTION 5. Any transfer or conveyance of a unit or an apartment, office or store or SO ORDERED.
other space therein, shall include the transfer or conveyance of the undivided interest in Ynares-Santiago (Chairperson), Chico-Nazario, Nachura and Reyes,
the common areas or, in a proper case, the membership or shareholdings in the JJ., concur.
condominium corporation; Provided, however, That where the common areas in the
Petition granted, judgment modified.
condominium project are held by the owners of separate units as co-owners thereof, no
condominium unit therein shall be conveyed or transferred to persons other than Filipino
citizens or corporations at least 60% of the capital stock of which belong to Filipino citizens,
except in cases of hereditary succession. Where the common areas in a condominium
project are held by a corporation, no transfer or conveyance of a unit shall be
valid if the concomitant transfer of the appurtenant membership or
stockholding in the corporation will cause the alien interest in such corporation
to exceed the limits imposed by existing laws.”(Emphasis supplied)
The law provides that no condominium unit can be sold without at the same
time selling the corresponding amount of rights, shares or other interests in the
condominium man-

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4 Rollo, p. 294.