G.R. No. L-45425 April 29, 1939 3.

That immediately thereafter but prior to December 15, 1934, plaintiffs

JOSE GATCHALIAN, ET AL., plaintiffs-appellants, vs. THE COLLECTOR OF
INTERNAL REVENUE, defendant-appellee.
IMPERIAL, J.:
The plaintiff brought this action to recover from the defendant Collector of Internal
Revenue the sum of P1,863.44, with legal interest thereon, which they paid under
protest by way of income tax. They appealed from the decision rendered in the
case on October 23, 1936 by the Court of First Instance of the City of Manila,
which dismissed the action with the costs against them.
The case was submitted for decision upon the following stipulation of facts:
Come now the parties to the above-mentioned case, through their respective
undersigned attorneys, and hereby agree to respectfully submit to this Honorable
Court the case upon the following statement of facts:
1. That plaintiff are all residents of the municipality of Pulilan, Bulacan, and that
defendant is the Collector of Internal Revenue of the Philippines;
2. That prior to December 15, 1934 plaintiffs, in order to enable them to purchase
one sweepstakes ticket valued at two pesos (P2), subscribed and paid therefor the
amounts as follows:
purchased, in the ordinary course of business, from one of the duly authorized
agents of the National Charity Sweepstakes Office one ticket bearing No. 178637
for the sum of two pesos (P2) and that the said ticket was registered in the name
of Jose Gatchalian and Company;
4. That as a result of the drawing of the sweepstakes on December 15, 1934, the
above-mentioned ticket bearing No. 178637 won one of the third prizes in the
amount of P50,000 and that the corresponding check covering the above-
mentioned prize of P50,000 was drawn by the National Charity Sweepstakes
Office in favor of Jose Gatchalian & Company against the Philippine National
Bank, which check was cashed during the latter part of December, 1934 by Jose
Gatchalian & Company;
5. That on December 29, 1934, Jose Gatchalian was required by income tax
examiner Alfredo David to file the corresponding income tax return covering the
prize won by Jose Gatchalian & Company and that on December 29, 1934, the
said return was signed by Jose Gatchalian, a copy of which return is enclosed as
Exhibit A and made a part hereof;
6. That on January 8, 1935, the defendant made an assessment against Jose
Gatchalian & Company requesting the payment of the sum of P1,499.94 to the
deputy provincial treasurer of Pulilan, Bulacan, giving to said Jose Gatchalian &
Company until January 20, 1935 within which to pay the said amount of P1,499.94,
a copy of which letter marked Exhibit B is enclosed and made a part hereof;

1. Jose Gatchalian ..........18 7. That on January 20, 1935, the plaintiffs, through their attorney, sent to
2. Gregoria Cristobal .......18 defendant a reply, a copy of which marked Exhibit C is attached and made a part
3. Saturnina Silva ............08 hereof, requesting exemption from payment of the income tax to which reply there
4. Guillermo Tapia .......... 13 were enclosed fifteen (15) separate individual income tax returns filed separately
5. Jesus Legaspi ............ 15 by each one of the plaintiffs, copies of which returns are attached and marked
6. Jose Silva ................... 07 Exhibit D-1 to D-15, respectively, in order of their names listed in the caption of this
7. Tomasa Mercado ..........08 case and made parts hereof; a statement of sale signed by Jose Gatchalian
8. Julio Gatchalian ............13 showing the amount put up by each of the plaintiffs to cover up the attached and
9. Emiliana Santiago .........13 marked as Exhibit E and made a part hereof; and a copy of the affidavit signed by
10. Maria C. Legaspi ........16 Jose Gatchalian dated December 29, 1934 is attached and marked Exhibit F and
11. Francisco Cabral ........13 made part thereof;
12. Gonzalo Javier ............14
13. Maria Santiago ............17 8. That the defendant in his letter dated January 28, 1935, a copy of which marked
14. Buenaventura Guzman ............13 Exhibit G is enclosed, denied plaintiffs' request of January 20, 1935, for exemption
15. Mariano Santos ......................14 from the payment of tax and reiterated his demand for the payment of the sum of
Total ...........................................2.00 P1,499.94 as income tax and gave plaintiffs until February 10, 1935 within which to
pay the said tax;
9. That in view of the failure of the plaintiffs to pay the amount of tax demanded by protested to the defendant against the payment of said amount and requested the
the defendant, notwithstanding subsequent demand made by defendant upon the refund thereof, copy of which is attached and marked Exhibit O and made part
plaintiffs through their attorney on March 23, 1935, a copy of which marked Exhibit hereof; but that on September 4, 1936, the defendant overruled the protest and
H is enclosed, defendant on May 13, 1935 issued a warrant of distraint and levy denied the refund thereof; copy of which is attached and marked Exhibit P and
against the property of the plaintiffs, a copy of which warrant marked Exhibit I is made a part hereof; and
enclosed and made a part hereof;
16. That plaintiffs demanded upon defendant the refund of the total sum of one
10. That to avoid embarrassment arising from the embargo of the property of the thousand eight hundred and sixty three pesos and forty-four centavos (P1,863.44)
plaintiffs, the said plaintiffs on June 15, 1935, through Gregoria Cristobal, Maria C. paid under protest by them but that defendant refused and still refuses to refund
Legaspi and Jesus Legaspi, paid under protest the sum of P601.51 as part of the the said amount notwithstanding the plaintiffs' demands.
tax and penalties to the municipal treasurer of Pulilan, Bulacan, as evidenced by
official receipt No. 7454879 which is attached and marked Exhibit J and made a 17. The parties hereto reserve the right to present other and additional evidence if
part hereof, and requested defendant that plaintiffs be allowed to pay under protest necessary.
the balance of the tax and penalties by monthly installments;
Exhibit E referred to in the stipulation is of the following tenor:
11. That plaintiff's request to pay the balance of the tax and penalties was granted
by defendant subject to the condition that plaintiffs file the usual bond secured by To whom it may concern:
two solvent persons to guarantee prompt payment of each installments as it
becomes due; I, Jose Gatchalian, a resident of Pulilan, Bulacan, married, of age, hereby certify,
that on the 11th day of August, 1934, I sold parts of my shares on ticket No.
12. That on July 16, 1935, plaintiff filed a bond, a copy of which marked Exhibit K 178637 to the persons and for the amount indicated below and the part of may
is enclosed and made a part hereof, to guarantee the payment of the balance of share remaining is also shown to wit:
the alleged tax liability by monthly installments at the rate of P118.70 a month, the
first payment under protest to be effected on or before July 31, 1935; Purchaser Amount Address
1. Mariano Santos ........................................... P0.14 Pulilan, Bulacan.
13. That on July 16, 1935 the said plaintiffs formally protested against the payment 2. Buenaventura Guzman ............................... .13 - Do -
of the sum of P602.51, a copy of which protest is attached and marked Exhibit L, 3. Maria Santiago ............................................ .17 - Do -
but that defendant in his letter dated August 1, 1935 overruled the protest and 4. Gonzalo Javier .............................................. .14 - Do -
denied the request for refund of the plaintiffs; 5. Francisco Cabral .......................................... .13 - Do -
6. Maria C. Legaspi .......................................... .16 - Do -
14. That, in view of the failure of the plaintiffs to pay the monthly installments in 7. Emiliana Santiago ......................................... .13 - Do -
accordance with the terms and conditions of bond filed by them, the defendant in 8. Julio Gatchalian ............................................ .13 - Do -
his letter dated July 23, 1935, copy of which is attached and marked Exhibit M, 9. Jose Silva ...................................................... .07 - Do -
ordered the municipal treasurer of Pulilan, Bulacan to execute within five days the 10. Tomasa Mercado ....................................... .08 - Do -
warrant of distraint and levy issued against the plaintiffs on May 13, 1935; 11. Jesus Legaspi ............................................. .15 - Do -
12. Guillermo Tapia ........................................... .13 - Do -
15. That in order to avoid annoyance and embarrassment arising from the levy of 13. Saturnina Silva ............................................ .08 - Do -
their property, the plaintiffs on August 28, 1936, through Jose Gatchalian, 14. Gregoria Cristobal ....................................... .18 - Do -
Guillermo Tapia, Maria Santiago and Emiliano Santiago, paid under protest to the 15. Jose Gatchalian ............................................ .18 - Do -
municipal treasurer of Pulilan, Bulacan the sum of P1,260.93 representing the
unpaid balance of the income tax and penalties demanded by defendant as 2.00 Total cost of said
evidenced by income tax receipt No. 35811 which is attached and marked Exhibit ticket; and that, therefore, the persons named above are entitled to the parts of
N and made a part hereof; and that on September 3, 1936, the plaintiffs formally whatever prize that might be won by said ticket.
Pulilan, Bulacan, P.I. The Collector of Internal Revenue collected the tax under section 10 of Act No.
2833, as last amended by section 2 of Act No. 3761, reading as follows:
(Sgd.) JOSE GATCHALIAN
SEC. 10. (a) There shall be levied, assessed, collected, and paid annually upon
And a summary of Exhibits D-1 to D-15 is inserted in the bill of exceptions as the total net income received in the preceding calendar year from all sources by
follows: every corporation, joint-stock company, partnership, joint account (cuenta en
participacion), association or insurance company, organized in the Philippine
RECAPITULATIONS OF 15 INDIVIDUAL INCOME TAX RETURNS FOR 1934 Islands, no matter how created or organized, but not including duly registered
ALL DATED JANUARY 19, 1935 SUBMITTED TO THE COLLECTOR OF general copartnership (compañias colectivas), a tax of three per centum upon such
INTERNAL REVENUE. income; and a like tax shall be levied, assessed, collected, and paid annually upon
the total net income received in the preceding calendar year from all sources within
Name Exhibit the Philippine Islands by every corporation, joint-stock company, partnership, joint
No. Purchase account (cuenta en participacion), association, or insurance company organized,
Price Price authorized, or existing under the laws of any foreign country, including interest on
Won Expenses Net bonds, notes, or other interest-bearing obligations of residents, corporate or
prize otherwise: Provided, however, That nothing in this section shall be construed as
1. Jose Gatchalian ............................. D-1 P0.18 P4,425 P 480 3,945 permitting the taxation of the income derived from dividends or net profits on which
2. Gregoria Cristobal .............................. D-2 .18 4,575 2,000 2,575 the normal tax has been paid.
3. Saturnina Silva ............................ D-3 .08 1,875 360 1,515
4. Guillermo Tapia .............................. D-4 .13 3,325 360 2,965 The gain derived or loss sustained from the sale or other disposition by a
5. Jesus Legaspi by Maria Cristobal .... D-5 .15 3,825 720 3,105 corporation, joint-stock company, partnership, joint account (cuenta en
6. Jose Silva ......................................... D-6 .08 1,875 360 1,515 participacion), association, or insurance company, or property, real, personal, or
7. Tomasa Mercado .............................. D-7 .07 1,875 360 1,515 mixed, shall be ascertained in accordance with subsections (c) and (d) of section
8. Julio Gatchalian by Beatriz Guzman .. D-8 .13 3,150 240 2,910 two of Act Numbered Two thousand eight hundred and thirty-three, as amended by
9. Emiliana Santiago ............................ D-9 .13 3,325 360 2,965 Act Numbered Twenty-nine hundred and twenty-six.
10. Maria C. Legaspi ........................... D-10 .16 4,100 960 3,140
11. Francisco Cabral .......................... D-11 .13 3,325 360 2,965 The foregoing tax rate shall apply to the net income received by every taxable
12. Gonzalo Javier ............................... D-12 .14 3,325 360 2,965 corporation, joint-stock company, partnership, joint account (cuenta en
13. Maria Santiago ................................ D-13 .17 4,350 360 3,990 participacion), association, or insurance company in the calendar year nineteen
14. Buenaventura Guzman ................ D-14 .13 3,325 360 2,965 hundred and twenty and in each year thereafter.
15. Mariano Santos .............................. D-15 .14 3,325 360 2,965
2.00 50,000 There is no doubt that if the plaintiffs merely formed a community of property the
latter is exempt from the payment of income tax under the law. But according to
The legal questions raised in plaintiffs-appellants' five assigned errors may the stipulation facts the plaintiffs organized a partnership of a civil nature because
properly be reduced to the two following: (1) Whether the plaintiffs formed a each of them put up money to buy a sweepstakes ticket for the sole purpose of
partnership, or merely a community of property without a personality of its own; in dividing equally the prize which they may win, as they did in fact in the amount of
the first case it is admitted that the partnership thus formed is liable for the P50,000 (article 1665, Civil Code). The partnership was not only formed, but upon
payment of income tax, whereas if there was merely a community of property, they the organization thereof and the winning of the prize, Jose Gatchalian personally
are exempt from such payment; and (2) whether they should pay the tax appeared in the office of the Philippines Charity Sweepstakes, in his capacity as
collectively or whether the latter should be prorated among them and paid co-partner, as such collection the prize, the office issued the check for P50,000 in
individually. favor of Jose Gatchalian and company, and the said partner, in the same capacity,
collected the said check. All these circumstances repel the idea that the plaintiffs
organized and formed a community of property only.
Having organized and constituted a partnership of a civil nature, the said entity is
the one bound to pay the income tax which the defendant collected under the
aforesaid section 10 (a) of Act No. 2833, as amended by section 2 of Act No.
3761. There is no merit in plaintiff's contention that the tax should be prorated
among them and paid individually, resulting in their exemption from the tax.

In view of the foregoing, the appealed decision is affirmed, with the costs of this
instance to the plaintiffs appellants. So ordered.
G.R. No. L-27933 December 24, 1968
DIVERSIFIED CREDIT CORPORATION, plaintiff-appellee, vs. FELIPE
ROSADO and LUZ JAYME ROSADO, defendants-appellants.
REYES, J.B.L.:
This appeal from a decision of the Court of First Instance of Bacolod City, Negros
Occidental (Civ. Case No. 7516 of that Court) was certified to us by the Court of
Appeals (Second Division) because the same involves no questions of fact.
The case had its origin in the Municipal Court of Bacolod City, when the Diversified
Credit Corporation filed an action to compel the spouses Felipe Rosado and Luz
Jayme Rosado to vacate and restore possession of a parcel of land in the City of
Bacolod (Lot 62-B of Subdivision plan LRC-Psd-33823) that forms part of Lot No.
62 of the Bacolod Cadastre, and is covered by Transfer Certificate of Title No.
27083 in the name of plaintiff. After answer, claiming that the lot was defendants'
conjugal property, the Municipal Court ordered defendants to surrender and vacate
the land in litigation; to pay P100.00 a month from the filing of the complaint up to
the actual vacating of the premises; to pay P500.00 attorneys' fees and costs.
Upon appeal to the Court of First Instance, the case was submitted on the
following stipulation of facts (Rec. on App., pp. 59-60):
1. That Lot No. 62-B of Bacolod Cadastre belong to the thirteen co-owners,
including the wife of the defendant herein, who owns 1/13th part pro-indiviso;
2. That on May 11, 1964, Luz Jayme Rosado, wife of the defendant Felipe
Rosado, signed a Deed of Sale together with the co-owners of the property to the
plaintiff as shown by Exh. "A" for the plaintiff;
3. That on the lot in question the defendant Felipe Rosado had built a house
sometime in 1957 without the whole property having been previously partitioned
among the thirteen (13) co-owners;
4. That the title of the property has already been transferred to the plaintiff upon
registration of the Deed of Sale in June, 1964, with the Office of the Register of
Deeds;
5. That demand was made by the plaintiff upon the defendant Felipe Rosado and
his wife Luz Jayme Rosado on October 19, 1964, but until now the defendant
Felipe Rosado has refused to vacate the premises or to remove his house thereon
as shown by Exh. "B" for the plaintiff, on the grounds as he alleged in his answer
that he had built on the lot in question a conjugal house worth P8,000.00 which
necessarily makes the lot on which it stands subject to Article 158 of the Civil Code
and on the point of view of equity that the wife of the defendant Felipe Rosado
received an aliquot share of P2,400.00 only from the share and if the house were
demolished the defendant would suffer damage in the amount of P8,000.00;
6. That the portion of the lot on which the house stands, would earn a monthly
rental of P50.00;
7. That Felipe Rosado, husband of Luz Jayme, did not give his conformity to the
Deed of Sale, Exh. "A".
8. That on October 31, 1964, the defendant Felipe Rosado requested the plaintiff
in the letter, Exh. "C" for the plaintiff, for a period of six (6) months within which to
vacate the premises.
9. That the letter was not answered by the plaintiff and they did not accept the
offer, and on November 25, 1964, they filed a complaint before the Municipal Court
which proves that plaintiff neglected the offer;
The Court of First Instance in its decision rejected the claim of ownership
advanced by Rosado, based upon the construction of a house on the disputed lot
by the conjugal partnership of the Rosado spouses, which allegedly converted the
land into conjugal property under Article 158, paragraph 2 of the present Civil
Code of the Philippines; further held that defendants were in estoppel to claim title
in view of the letter Exhibit C requesting for six (6) months within which to vacate
the premises, and affirmed the decision of the Inferior Court. Defendant Felipe
Rosado resorted to the Court of Appeals, and his appeal (CA-G.R. No. 37398-R) is
the one now before us. He assigns four alleged errors:
(a) The lower court erred in not holding that Exhibit "A" is null and void, since upon
the construction of the conjugal dwelling thereon, the conjugal partnership of the
defendant-appellant Felipe Rosado and Luz Jayme became the owner of the share
of Luz Jayme in Lot No. 62-B, Bacolod Cadastre;
(b) The trial court erred in ordering the defendant-appellant to vacate Lot No. 62-B
and in not holding that Exhibit "A" is null and void because as the legal
usufructuary of the share of Luz Jayme Rosado in Lot 62-B, Bacolod Cadastre, the
conjugal partnership, managed and administered by the defendant-appellant
Felipe Rosado can not be deprived of its usufructuary rights by any contract
between Luz Jayme and the plaintiff-appellee;
(c) The trial court erred in not holding that the defendant-appellant should be
reimbursed the value of the conjugal house constructed on Lot 62-B; and
(d) The lower court erred in ordering the defendant-appellant to pay attorneys' fees
in the amount of five hundred (P500.00) pesos.
It can be seen that the key question is whether by the construction of a house on
the lot owned in common by the Jaymes, and sold by them to the appellant
corporation, the land in question or a 1/13th part of it became conjugal property.
Appellant, husband of vendor Luz Jayme, claims the affirmative invoking the
second paragraph of Article 158 of the Civil Code of the Philippines, prescribing
that:
ART. 158. Improvements, whether for utility or adornment, made on the separate
property of the spouses through advancements from the partnership or through the
industry of either the husband or the wife, belong to the conjugal partnership.
Since the share of the wife, Luz Jayme, was at no time physically determined, it
cannot be validly claimed that the house constructed by her husband was built on
land belonging to her, and Article 158 of the Civil Code can not apply. Certainly, on
her 1/13 ideal or abstract undivided share, no house could be erected.
Necessarily, the claim of conversion of the wife's share from paraphernal to
conjugal in character as a result of the construction must be rejected for lack of
factual or legal basis.
It is the logical consequence of the foregoing ruling that the lower court did not err
in holding that the appellant was bound to vacate the land without reimbursement,
since he knew that the land occupied by the house did not belong exclusively to
his wife, but to the other owners as well, and there is no proof on record that the
house occupied only 1/13 of the total area. The construction was not done in good
faith.

Buildings constructed, at the expense of the partnership, during the marriage on WHEREFORE, the judgment of the Court of First Instance is affirmed. Costs
land belonging to one of the spouses, also pertain to the partnership, but the value against appellant Felipe Rosado.
of the land shall be reimbursed to the spouse who owns the same.

Rosado further contends that as the building of the house at the expense of the
conjugal partnership converted the 1/13 undivided share on his wife in Lot 62-B
into property of the community, the deed of sale of May 11, 1964 in favor of the
appellee corporation was void in so far as said 1/13 share is concerned, because
his wife, Luz Jayme, had ceased to own such share from and after the building of
the house; and Rosado, as manager of the conjugal partnership, had not
participated in the sale, nor subsequently ratified the same.

We find appellant's thesis legally untenable. For 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 title to any definite portion of the land or thing owned
in common until the partition thereof. Prior to that time, all that the co-owner has is
an ideal, or abstract, quota or proportionate share in the entire thing owned in
common by all the co-owners. The principle is emphasized by the rulings of this
Court. In Lopez vs. Ilustre, 5 Phil. 567, it was held that while a co-owner has the
right to freely sell and dispose of his undivided interest, he has no right to sell a
divided part of the real estate owned in common. "If he is the owner of an
undivided half of a tract of land, he has the right to sell and convey an undivided
half, but he has no right to divide the lot into two parts, and convey the whole of
one part by metes and bounds." The doctrine was reiterated in Mercado vs.
Liwanag, L-14429, June 20, 1962, holding that a co-owner may not convey a
physical portion of the land owned in common. And in Santos vs. Buenconsejo, L-
20136, June 23, 1965, it was ruled that a co-owner may not even adjudicate to
himself any determinate portion of land owned in common.
[G.R. No. 98328. October 9, 1997.]
JUAN C. CARVAJAL, Petitioner, v. COURT OF APPEALS and SOLID HOMES,
INC., Respondents.
DECISION
PANGANIBAN, J.:
Is there denial of due process if an applicant for land registration is unable to
testify? May a land registration court, after it is convinced that the property subject
of an application for registration under the torrens system is already covered by an
existing certificate, dismiss such application and thus ignore petitioner’s insistence
on submitting further evidence of his alleged title? What constitutes sufficient
evidence to show identity of the land applied for with the land already titled in favor
of private respondent?
The Case
These are the main questions raised in this petition for review assailing the
November 29, 1990 Decision 1 of the Court of Appeals 2 in CA-G.R. SP No.
18318, the dispositive portion of which reads:
"WHEREFORE, in view of the foregoing, let this petition be as it is hereby
DISMISSED."
This petition also impugns the April 25, 1991 Court of Appeals Resolution 4 which
denied reconsideration.
The Facts
The facts found by public respondent are as follows:
"Petitioner is the applicant in a land registration case filed with Branch 71,
Regional Trial Court of the Fourth Judicial Region stationed in Antipolo, Rizal.
Sought to be brought by petitioner under the operation of the Land Registration Act
(Act No. 496) is a 96,470 square meter lot denominated as Lots 6846-A, 6846-B,
6846-C and 6846-D. Copies of the application were ordered by respondent Court
to be furnished (to) the National Land Titles and Deeds Registration Administration
(NLTDRA) which on March 18, 1987 submitted a report recommending that
applicant be order[ed] to amend his petition by including the names and complete
postal addresses of the adjoining owners and correcting the discrepancy regarding
the boundary lot number along line 2-3 of Lot 6846-D on plan Csd-04-005516-D.
On order of respondent Court (trial court), the petition was accordingly amended.
After the NLTDRA was notified that the case is [sic] initially set for hearing on
December 7, 1987, the Acting Chief, Docket Division of the NLRDRA [sic]
submitted another report recommending that petitioner be ordered to refer to the
Bureau of Lands for corrections of the discrepancy existing in the directional
bearing and area of Lot 6846-D, Csd-04-005516-D. The technical descriptions as
corrected by the Bureau of Lands was [sic] submitted and the application was
initially set for hearing an April 26, 1988. The ‘Notice of Initial Hearing’ stating that
the application was set forbe [sic] heard on April 26, 1988 was thereafter issued by
the NLTDRA.
On June 1, 1988, an order of general default was issued by respondent Court.
Exempted from the order was one Annie Jimenez who filed an opposition to the
application. On June 22, 1988, private respondent Solid Homes, Inc. filed its
opposition stating that a land registered in its name under the Torrens System and
covered by then TCT No. N-7873 is almost identical to the property subject of the
application by petitioner. The opposition was not admitted considering that no
motion to set aside the order of general default was filed by private Respondent.
On June 28, 1988, private respondent filed a motion to lift the order of general
default and to admit its opposition on the ground that its right would be adversely
affected by the application. Acting on the motion and in order to avoid duplicity, the
NLTDRA was directed to make the plotting of the relative position of the property
covered by LRC Psd-245998 and embraced in TCT No. N-7873 and to submit its
plotting to the Court for its guidance. In the same order dated July 1, 1988,
respondent Court in the interest of justice set aside the order of general default in
so far as private respondent was concerned and admitted private respondent’s
opposition.
On January 10, 1989, petitioner filed a motion praying that the opposition of private
respondent be dismissed for the reason that the order issued by respondent court
directing the NLRTDA [sic] to make a plotting of the land in question on the basis
of the title submitted by the Registry of Deeds of Marikina Branch Manila released
the private respondent from the duty and obligation of presenting evidence to
prove that the land applied for is private and that there is apparent lack of interest
on the part of private respondent to pursue its claim on account of its non-
appearance despite the lapse of more than six months or to introduce evidence
that will show that the land in question is covered by the alleged torrens certificate
of title.
During the hearings conducted on September 13, 1988, September 27, 1988,
October 4, 1988, October 11, 1988, October 18, 1988, November 22, 1988,
December 6, 1988, petitioner presented his evidence on the question as to
whether or not he had a registrable right over the land in question.
Pursuant to the court order dated July 1, 1988 directing the NLTDRA to make the
plotting of the relative position of the property covered by LRC Psd-245998 and
embraced in TCT No. N-7873, the Land Registration Authority submitted a report
dated December 22, 1986 [should be 1988] recommending that, after due hearing,
the application for registration of petitioner be dismissed. The application was thus
dismissed by respondent court in an order dated January 2, 1989. Considering,
however, that the recommendation is [sic] for dismissal after due hearing,
respondent judge issued an order dated January 10, 1989 setting for hearing on
January 24, 1989 the ‘Report’ submitted by the Land Registration Authority. The
hearing proceeded on February 8, 1989 with Engr. Silvero G. Perez, Chief,
Department on Registration, Land Registration Authority being presented in
connection with his ‘Report’ recommending the dismissal of the application after
due hearing. On February 28, 1989, the petitioner’s application for registration was
dismissed.
On March 13, 1989, petitioner filed his motion to reconsider the February 28, 1989
dismissal of the application for registration to which private respondent filed an
opposition dated March 20, 1989. The motion for reconsideration was denied in an
order dated March 4, 1989.
On May 2, 1989 petitioner filed a second motion to reconsider the dismissal of his
petition. On May 8, 1989, respondent judge issued an order requiring the parties
as well as the engineers from the Land Registration Commission and the DENR to
appear before respondent Court on June 5, 1989. The engineer from the Land
Registration Commission was likewise directed to inform the court whether the
property applied for by petitioner is indeed inside the titled property of private
Respondent.
After the Land Registration Authority submitted a report showing that there was
indeed an overlapping of the four (4) parcels of land applied for by petitioner and
the properties of Solid Homes under TCT 7873 and considering that the properties
applied for are [sic] within the titled property and could not be the subject of an
application for registration, the second motion to reconsider the dismissal of the
application for registration was denied in an order dated July 5, 1989."cralaw
virtua1aw library
As earlier stated, the Court of Appeals affirmed the dismissal of the application for
registration, and denied the subsequent motion for reconsideration. Hence, this
recourse to this Court via Rule 45 of the Rules of Court.
The Issues
Petitioner submits the following issues:
"1. Whether or not an actual ground verification survey is required to establish the
identity of the two parcels of land or whether TCT No. 7873 under Plan FP-1540 of
Solid Homes Inc., situated in Barangay Mayamot, Antipolo, Rizal is identical or
similar to Lots 6846-A to 6846-D inclusive Cad. 585, Lungsod Silangan, Cadastre,
situated in Mambogan, Antipolo, Rizal applied for under LRC Case No. 414 (-A),
LRC Record No. N-60084;
2. Whether or not the petitioner was given (the) chance and the opportunity to be
heard or allowed to fully introduce his evidence in the (proceeding) for Land
Registration and to rest (his) case;
3. Whether the decision of the Honorable Court of Appeals is reversible."
Petitioner alleges that the "table survey" made by the Land Registration Authority
and the geodetic engineer of the Land Management Bureau cannot serve as basis
"for identifying" his land. "On the other hand, petitioner was able to establish the
identity" of the land he applied for by "actual ground survey which was approved
by the Director of Lands and reprocessed by the Land Registration Authority." He
claims that if said land is "covered by private respondent’s title, the Director of
Lands and/or Regional Director will no(t) approve the survey." Petitioner also
argues that the land in question is situated in "Mambogan, Antipolo, Rizal" while
that of private respondent is in "Mayamot, Antipolo, Rizal." Survey Plan "FP-1540,"
which served as basis of private respondent’s certificate of title, cannot be found;
hence, according to petitioner, the "table survey" was anomalous. Petitioner adds
that the "matter entirely wanting in this case (is) the identity or similarity of the
realties." 7 Petitioner concludes that the trial court should have ordered "actual
ocular inspection and ground verification survey" of the properties involved.
Petitioner further maintains that he was denied due process when he, as an
applicant in a land registration case, was not able to take the witness stand.
According to petitioner, even his counsel hardly participated in the proceeding
except to propound classificatory questions during the examination of Engineer
Silverio Perez of the Land Registration Authority.
Public respondent justified its dismissal of the appeal in this wise:
"Land already decreed and registered in an ordinary registration proceeding
cannot again be subject of adjudication or settlement in a subsequent conducted
proceeding (Land Titles and Deeds by Noblejas, 1968 Revised Edition, page 96).
The ‘Report’ submitted by the Land Registration Authority (Annex ‘B’) and the
Survey Division of the DENR (Annex ‘RR’) both indicate an overlapping of the lot
applied for by petitioner and the lot covered by TCT N-7873 owned by private
respondent Solid Homes, Inc. Even if petitioner were allowed to continue with the
presentation of his evidence, the end result would still be the dismissal of his
application for registration. Respondent Judge was therefore justified in cutting
short the proceeding as the time to be spent in hearing petitioner’s application
could be used disposing the other cases pending with respondent court.
Anent the allegation that private respondent Solid Homes did not actively
participate in the trials conducted to hear his evidence, suffice it to state that it is
counsel’s prerogative to determine how he intends to pursue his case."
The Court’s Ruling
The petition has no merit.
First Issue: Identity of the Property Applied For
We are not persuaded that the land petitioner applied for was not identical to
private respondent’s land which was already covered by a torrens certificate of
title. The two reports prepared by the Land Registration Authority and the DENR
Survey Division clearly showed that there was an overlapping between the two
properties. Because the futility of petitioner’s application was apparent, the trial
court deemed it unnecessary to hear further evidence. We agree.
At the outset, we stress that there was nothing irregular in the order given by the
trial court to the Land Registration Authority and the Survey Division of the DENR
to submit reports on the location of the land covered by petitioner’s application and
private respondent’s certificate of title. The authority of the land registration court to
require the filing of additional papers to aid it in its determination of the propriety of
the application was based on Section 21 of PD 1529:
"SEC. 21. Requirement of additional facts and papers; ocular inspection. — The
court may require facts to be stated in the application in addition to those
prescribed by this Decree not inconsistent therewith and may require the filing of
any additional papers. It may also conduct an ocular inspection, if necessary."
From the above provision, it is also clear that ocular inspection of the property
applied for was only discretionary, not mandatory. Likewise, the land registration
court was not obliged to order the survey of the contested lot, especially when
another government agency had already submitted a report finding that the
contested lot was identical with that described in private respondent’s certificate of
title and recommending the dismissal of the application for registration.
Further, the order of the land registration court for the LRA and DENR to submit
reports was in accordance with the purposes of the Land Registration Law: 11
"The purposes of the land registration law, in general, are: ‘to ascertain once and
for all the absolute title over a given landed property; to make, so far as it is
possible, a certificate of title issued by the court to the owner of the land absolute
proof of such title; to quiet title to the land and to put a stop forever to any question
of legality to a title; and to decree that land title to be final, irrevocable and,
undisputable. (citing Benen v. Tuason, L-26127, June 28, 1974, 57 SCRA 531.)’
It is true that a court of first instance acting as a land registration court has limited
and special jurisdiction. It can not be denied, however, that when the law confers
jurisdiction upon a court, the latter is deemed to have all the necessary powers to
exercise such jurisdiction to make it effective. (citing Marcelino v. Antonio, 70 Phil.
388, 391.) The purpose of the applicant is to prove that he has an absolute or
simple title over the property sought to be registered, otherwise his application will
be denied. An absolute oppositor claims a dominical right totally adverse to that of
the applicant. If successful, registration will be decreed in favor of the oppositor. As
to whether or not private respondents have absolute or fee simple title over the
property sought to be registered necessarily requires a resolution of the question
as to whether or not the oppositors had a dominical right totally adverse to that of
the applicants. . . ."
Based on the reports submitted, the land registration court correctly dismissed the
application for original land registration. An application for registration of an already
titled land constitutes a collateral attack on the existing title. It behooves a land
registration court to determine the veracity of any and all adverse claims, bearing
in mind Section 46 of Act No. 496 which provides that" (n)o title to registered land
in derogation to that of the registered owner shall be acquired by prescription or
adverse possession." The trial court’s order to the LRA and DENR was a mere
cautionary measure in cognizance of the well-settled rule that a torrens title cannot
be collaterally attacked. In other words, the title may be challenged only in a
proceeding for that purpose, not in an application for registration of a land already
registered in the name of another person. After one year from its registration, the
title is incontrovertible and is no longer open to review. The remedy of the
landowner, whose property has been wrongfully or erroneously registered in
another’s name, is to institute an ordinary action for reconveyance or — if the
property has passed into the hands of an innocent purchaser for value — for
damages. 12 In view of the nature of a torrens title, a land registration court has
the duty to determine whether the issuance of a new certificate alters a valid and
existing certificate of title.
Contrary to petitioner’s contention, the approval by the assistant chief the Bureau
of Lands Survey Division of the survey conducted on the land applied for by
petitioner did not prove that the said land was not covered by any title. It merely
showed that such land has been surveyed and its boundaries have been
determined.
Also noteworthy is the finding of public respondent that "the same order (issued by
the land registration court) [which set] aside the order (of) general default insofar
as private respondent Solid Homes, Inc. was concerned, directed the NLTDRA to
make the plotting of the relative position of the property covered by LRC Psd-
245998 and [that which was] embraced in TCT No. N-7873." 13 The intention of
the land registration court was to avoid "duplicity," 14 that is, to rule out the
possibility that the land he sought to register was already covered by a certificate
of title. In this case, the land he applied for was found to be within the land
described in private respondent’s transfer certificate of title.
Petitioner also alleges that the land he applied for was located in Barangay
Mambogan, while the registered land of private respondent was in Barangay
Mayamot. In his reply filed with public respondent, however, he himself admitted
that "Barangay Mambogan is a part of Barangay Mayamot [which is] a bigger
barrio in Antipolo, Rizal, and Mayamot covers a big parcel of land running from
Antipolo up to Marikina." 15 In view of petitioner’s declaration, it was not
impossible for the land owned by private respondent to be located in Barangay
Mayamot and in Barangay Mambogan. At any rate, whether the two lands are
located in Mambogan or Mayamot or both is a factual question, and its resolution
by the trial and the appellate courts is binding on this Court. Petitioner failed to
provide a reason, let alone an adequate one, to justify the reversal of such finding
of the lower courts.
Petitioner also argues that the plotting made by NLTDRA was "anomalous"
because Survey Plan FP-1540, on which private respondent’s title was based,
could not be located. This argument lacks merit. The law does not require resorting
to a survey plan to prove the true boundaries of a land covered by a valid
certificate of title; the title itself is the conclusive proof of the realty’s metes and
bounds. Section 47 of the Land Registration Act, or Act No. 496, provides that"
(t)he original certificates in the registration book, any copy thereof duly certified
under the signature of the clerk, or of the register of deeds of the province or city
where the land is situated, and the seal of the court, and also the owner’s duplicate
certificate, shall be received as evidence in all the courts of the Philippine Islands
and shall be conclusive as to all matters contained therein except so far as
otherwise provided in this Act." It has been held that a certificate of title is
conclusive evidence with respect to the ownership of the land described therein
and other matters which can be litigated and decided in land registration
proceedings. 16 Thus, this Court in Odsigue v. Court of Appeals 17 ruled:
". . . Petitioner contends that private respondents have not identified the property
sought to be recovered as required by Art. 434, of the Civil Code. He alleges that
Sitio Aduas, where the land in question is located, is at the boundary of Barangay
May-Iba, Teresa, Rizal, and Barangay Lagundi, Morong, Rizal. On the other hand,
petitioner maintains, the parcel of land he is occupying is located in Barangay May-
Iba. He claims that the technical description in the title does not sufficiently identify
the property of private respondent and that a geodetic survey to determine which
of his improvements should be demolished should first have been conducted by
the private Respondent. . . .
But private respondent’s title (OCT No. 4050) indicates that the property is located
in Barangay Lagundi. Likewise, the certification issued by the Municipal Agrarian
Reform Officer at Morong, Rizal stated that petitioner was occupying a landholding
at Barangay Lagundi.
For our purposes, a survey is not necessary. A certificate of title is conclusive
evidence not only of ownership of the land referred but also its location. The
subject of these proceedings is the land covered by OCT No. 4050. Accordingly,
petitioners required to demolish only whatever is constructed within its
boundaries." (Emphasis supplied.)
The old case of Legarda and Prieto v. Saleeby explains the nature of a torrens
certificate of title, as follows:
". . . The registration, under the torrens system, does not give the owner any better
title than he had. If he does not already have a perfect title, he can not have it
registered. Fee simple titles only may be registered. The certificate of registration
accumulates in one document a precise and correct statement of the exact status
of the fee held by its owner. The certificate, in the absence of fraud, is the
evidence of title and shows exactly the real interest of its owner. The title once
registered, with very few exceptions, should not thereafter be impugned, altered,
changed, modified, enlarged, or diminished, except in some direct proceeding
permitted by law. Otherwise all security in registered titles would be lost. A
registered title can not be altered, modified, enlarged, or diminished in a collateral
proceeding and not even by a direct proceeding, after the lapse of the period
prescribed by law."
All in all, the land registration court did not err in relying on the certificate of title SO ORDERED.
instead of the survey plan; likewise, the appellate court did not commit any
reversible error in affirming the trial court’s decision.

Second Issue: Denial of Due Process

Petitioner claims that he was denied due process because he was unable to take
the witness stand. We disagree. The essence of due process is the opportunity to
be heard. It is the denial of this opportunity that is repugnant to due process. 19 In
this case, petitioner was afforded an opportunity to present witnesses, and he did
present three. However, petitioner did not invoke his right to take the witness stand
even when the trial court ordered the submission of the parties’ memoranda which
signified the termination of the proceedings. Because he acquiesced to the
termination of the case, he forfeited his right to take the witness stand.

Likewise, we are not persuaded by his allegation that his own counsel hardly
participated in the proceedings. The records show that said counsel did cross-
examine Engineer Silverio Perez by propounding clarificatory questions to the
latter. In any event, the client is generally bound by the acts of his counsel.
Petitioner has not shown at all that his previous counsel had acted in such grossly
negligent manner as to deprive him of effective representation, or of due process.
20

In support of his contention, petitioner cites Tirona v. Nañawa 21 which held:

"We hold the view, however that respondent Judge erred when he ordered the
dismissal of the registration case over the objection of the oppositors; and when he
refused to reconsider the order of dismissal and reinstate the case he had
neglected to perform an act which the law enjoins as a duty resulting from an
office, and had thereby deprived the oppositors of a right to which they are
entitled."

Such ailing finds no application to the present case, because neither Respondent
Mariano Raymundo (the applicant in the land registration case) nor Petitioner
Constantino Tirona (the oppositor in the cited case) was a holder of any certificate
of title over the land intended for registration. Such being the case, the land
registration court was ordered to act in accordance with Section 37 of Act No. 496
22 either by dismissing the application if none of the litigants succeeded in
showing a proper title, or by entering a decree awarding the land applied for to the
person entitled thereto.

WHEREFORE, premises considered, the petition is hereby DENIED and the

assailed Decision and Resolution are AFFIRMED. Costs against petitioner.
G.R. No. L-4656 November 18, 1912
RICARDO PARDELL Y CRUZ and VICENTA ORTIZ Y FELIN DE PARDELL,
plaintiffs-appellees, vs. GASPAR DE BARTOLOME Y ESCRIBANO and
MATILDE ORTIZ Y FELIN DE BARTOLOME, defendants-appellants.
TORRES, J.:
This is an appeal by bill of exceptions, from the judgment of October 5, 1907,
whereby the Honorable Dionisio Chanco, judge, absolved the defendants from the
complaint, and the plaintiff from a counterclaim, without special finding as to costs.
Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de Pardell, the
first of whom, absent in Spain by reason of his employment, conferred upon the
second sufficient and ample powers to appear before the courts of justice, on June
8, 1905, in his written complaint, alleged that the plaintiff, Vicente Ortiz, and the
defendant, Matilde Ortiz, are the duly recognized natural daughters of the spouses
Miguel Ortiz and Calixta Felin y Paula who died in Vigan, Ilocos Sur, in 1875 and
1882, respectively; that Calixta Felin, prior to her death, executed on August 17,
1876, a nuncupative will in Vigan whereby she made her four children, named
Manuel, Francisca, Vicenta, and Matilde, surnamed Ortiz y Felin, her sole and
universal heirs of all her property; that, of the persons enumerated, Manuel died
before his mother and Francisca a few years after her death, leaving no heirs by
force of law, and therefore the only existing heirs of the said testatrix are the
plaintiff Vicenta Ortiz and the defendant Matilde Ortiz; that, aside from some
personal property and jewelry already divided among the heirs, the testatrix
possessed, at the time of the execution of her will, and left at her death the real
properties which, with their respective cash values, are as follows:
1. A house of strong material, with the lot on which it is built, situated on Escolta
Street, Vigan, and valued at P6,000.00
2. A house of mixed material, with the lot on which it stands, at No. 88 Washington
Street, Vigan; valued at 1,500.00
3. A lot on Magallanes Street, Vigan; valued at 100.00
4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at
60.00
5. A parcel of rice land in the pueblo of Santa Lucia; valued at 86.00
6. Three parcels of land in the pueblo of Candon; valued at 150.00
Total 7,896.00
That, on or about the first months of the year 1888, the defendants, without judicial
authorization, nor friendly or extrajudicial agreement, took upon themselves the
administration and enjoyment of the said properties and collected the rents, fruits,
and products thereof, to the serious detriment of the plaintiffs' interest; that,
notwithstanding the different and repeated demands extrajudicially made upon
Matilde Ortiz to divide the aforementioned properties with the plaintiff Vicente and
to deliver to the latter the one-half thereof, together with one-half of the fruits and
rents collected therefrom, the said defendant and her husband, the self-styled
administrator of the properties mentioned, had been delaying the partition and
delivery of the said properties by means of unkept promises and other excuses;
and that the plaintiffs, on account of the extraordinary delay in the delivery of one-
half of said properties, or their value in cash, as the case might be, had suffered
losses and damages in the sum of P8,000. Said counsel for the plaintiffs therefore
asked that judgment be rendered by sentencing the defendants, Gaspar de
Bartolome, and Matilde Ortiz Felin de Bartolome, to restore and deliver to the
plaintiffs one-half of the total value in cash, according to appraisal, of the undivided
property specified, which one-half amounted approximately to P3,948, or if
deemed proper, to recognize the plaintiff Vicenta Ortiz to be vested with the full
and absolute right of ownership to the said undivided one-half of the properties in
question, as universal testamentary heir thereof together with the defendant
Matilde Ortiz, to indemnify the plaintiffs in the sum of P8,000, for losses and
damages, and to pay the costs.
Counsel for the defendants, in his answer denied the facts alleged in paragraphs
1, 4, 6, 7, and 8 thereof, inasmuch as, upon the death of the litigating sister's
brother Manuel, their mother, who was still living, was his heir by force of law, and
the defendants had never refused to give to the plaintiff Vicente Ortiz her share of
the said properties; and stated that he admitted the facts alleged in paragraph 2,
provided it be understood, however, that the surname of the defendant's mother
was Felin, and not Feliu, and that Miguel Ortiz died in Spain, and not in Vigan; that
he also admitted paragraph 3 of the complaint, with the difference that the said
surname should be Felin, and likewise paragraph 5, except the part thereof
relating to the personal property and the jewelry, since the latter had not yet been
divided; that the said jewelry was in the possession of the plaintiffs and consisted
of: one Lozada gold chronometer watch with a chain in the form of a bridle curb
and a watch charm consisting of the engraving of a postage stamp on a stone
mounted in gold and bearing the initials M. O., a pair of cuff buttons made of gold
coins, four small gold buttons, two finger rings, another with the initials M. O., and
a gold bracelet; and that the defendants were willing to deliver to the plaintiffs, in
conformity with their petitions, one-half of the total value in cash, according to
appraisement, of the undivided real properties specified in paragraph 5, which half
amounted to P3,948.
In a special defense said counsel alleged that the defendants had never refused to
divide the said property and had in fact several years before solicited the partition
of the same; that, from 1886 to 1901, inclusive, there was collected from the
property on Calle Escolta the sum of 288 pesos, besides a few other small
amounts derived from other sources, which were delivered to the plaintiffs with
other larger amounts, in 1891, and from the property on Calle Washington, called
La Quinta, 990.95 pesos, which proceeds, added together, made a total of
1,278.95 pesos, saving error or omission; that, between the years
abovementioned, Escolta, and that on Calle Washington, La Quinta, 376.33, which
made a total of 1,141.71, saving error or omission; that, in 1897, the work of
reconstruction was begun of the house on Calle Escolta, which been destroyed by
an earthquake, which work was not finished until 1903 and required an
expenditure on the part of the defendant Matilde Ortiz, of 5,091.52 pesos; that all
the collections made up to August 1, 1905, including the rent from the stores,
amounted to only P3,654.15, and the expenses, to P6,252.32, there being,
consequently, a balance of P2,598.17, which divided between the sisters, the
plaintiff and the defendant, would make the latter's share P1,299.08; that, as
shown by the papers kept by the plaintiffs, in the year 1891 the defendant
Bartolome presented to the plaintiffs a statement in settlements of accounts, and
delivered to the person duly authorized by the latter for the purpose, the sum of
P2,606.29, which the said settlement showed was owing his principals, from
various sources; that, the defendant Bartolome having been the administrator of
the undivided property claimed by the plaintiffs, the latter were owing the former
legal remuneration of the percentage allowed by law for administration; and that
the defendants were willing to pay the sum of P3,948, one-half of the total value of
the said properties, deducting therefrom the amount found to be owing them by the
plaintiffs, and asked that judgment be rendered in their favor to enable them to
recover from the latter that amount, together with the costs and expenses of the
suit.
The defendants, in their counter claim, repeated each and all of the allegations
contained in each of the paragraphs of section 10 of their answer; that the plaintiffs
were obliged to pay to the administrator of the said property the remuneration
allowed him by law; that, as the revenues collected by the defendants amounted to
no more than P3,654.15 and the expenditures incurred by them, to P6,252.32, it
followed that the plaintiffs owed the defendants P1,299.08, that is one-half of the
difference between the amount collected from and that extended on the properties,
and asked that judgment be therefore rendered in their behalf to enable them to
collect this sum from the plaintiffs, Ricardo Pardell and Vicenta Ortiz, with legal
interest thereon from December 7, 1904, the date when the accounts were
rendered, together with the sums to which the defendant Bartolome was entitled
for the administration of the undivided properties in question.
By a written motion of August 21, 1905, counsel for the plaintiffs requested
permission to amend the complaint by inserting immediately after the words "or
respective appraisal," fifth line of paragraph 5, the phrase "in cash in accordance
with the assessed value," and likewise further to amend the same, in paragraph 6
thereof, by substituting the following word in lieu of the petition for the remedy
sought: "By reason of all the foregoing, I beg the court to be pleased to render the
judgment by sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz
Felin de Bartolome, to restore and deliver to the plaintiffs an exact one-half of the
total vale of the undivided properties described in the complaint, such value to be
ascertained by the expert appraisal of two competent persons, one of whom shall
be appointed by the plaintiffs and the other by the defendants, and, in case of
disagreement between these two appointees such value shall be determined by a
third expert appraiser appointed by the court, or, in a proper case, by the price
offered at public auction; or, in lieu thereof, it is requested that the court recognize
the plaintiff, Vicenta Ortiz, to be vested with a full and absolute right to an
undivided one-half of the said properties; furthermore, it is prayed that the plaintiffs
be awarded an indemnity of P8,000 for losses and damages, and the costs."
Notwithstanding the opposition of the defendants, the said amendment was
admitted by the court and counsel for the defendants were allowed to a period of
three days within which to present a new answer. An exception was taken to this
ruling.
The proper proceedings were had with reference to the valuation of the properties
concerned in the division sought and incidental issues were raised relative to the
partition of some of them and their award to one or the other of the parties. Due
consideration was taken of the averments and statements of both parties who
agreed between themselves, before the court, that any of them might at any time
acquire, at the valuation fixed by the expert judicial appraiser, any of the properties
in question, there being none in existence excluded by the litigants. The court,
therefore, by order of December 28, 1905, ruled that the plaintiffs were entitled to
acquire, at the valuation determined by the said expert appraiser, the building
known as La Quinta, the lot on which it stands and the warehouses and other
improvements comprised within the inclosed land, and the seeds lands situated in
the pueblos of Vigan and Santa Lucia; and that the defendants were likewise
entitled to acquire the house on Calle Escolta, the lot on Calle Magallanes, and the
three parcels of land situated in the pueblo of Candon.
After this partition had been made counsel for the defendants, by a writing of
March 8, 1906, set forth: That, having petitioned for the appraisement of the
properties in question for the purpose of their partition, it was not to be understood
that he desired from the exception duly entered to the ruling made in the matter of
the amendment to the complaint; that the properties retained by the defendants
were valued at P9,310, and those retained by the plaintiffs, at P2,885, one-half of
which amounts each party had to deliver to the other, as they were pro indiviso
properties; that, therefore, the defendants had to pay the plaintiffs the sum of
P3,212.50, after deducting the amount which the plaintiffs were obliged to deliver
to the defendants, as one-half of the price of the properties retained by the former;
that, notwithstanding that the amount of the counterclaim for the expenses incurred
in the reconstruction of the pro indiviso property should be deducted from the sum
which the defendants had to pay the plaintiffs, the former, for the purpose of
bringing the matter of the partition to a close, would deliver to the latter,
immediately upon the signing of the instrument of purchase and sale, the sum of
P3,212.50, which was one-half of the value of the properties alloted to the
defendants; such delivery, however, was not to be understood as a renouncement
of the said counterclaim, but only as a means for the final termination of the pro
indiviso status of the property.
The case having been heard, the court on October 5, 1907, rendered judgment
holding that the revenues and the expenses were compensated by the residence
enjoyed by the defendant party, that no losses or damages were either caused or
suffered, nor likewise any other expense besides those aforementioned, and
absolved the defendants from the complaint and the plaintiffs from the
counterclaim, with no special finding as to costs. An exception was taken to this
judgment by counsel for the defendants who moved for a new trial on the grounds
that the evidence presented did not warrant the judgment rendered and that the
latter was contrary to law. This motion was denied, exception whereto was taken
by said counsel, who filed the proper bill of exceptions, and the same was
approved and forwarded to the clerk of this court, with a transcript of the evidence.
Both of the litigating sisters assented to a partition by halves of the property left in
her will by their mother at her death; in fact, during the course of this suit,
proceedings were had, in accordance with the agreement made, for the division
between them of the said hereditary property of common ownership, which division
was recognized and approved in the findings of the trial court, as shown by the
judgment appealed from.
The issues raised by the parties, aside from said division made during the trial, and
which have been submitted to this court for decision, concern: (1) The indemnity
claimed for losses and damages, which the plaintiffs allege amount to P8,000, in
addition to the rents which should have been derived from the house on Calle
Escolta, Vigan; (2) the payment by the plaintiffs to the defendants of the sum of
P1,299.08, demanded by way of counterclaim, together with legal interest thereon
from December 7, 1904; (3) the payment to the husband of the defendant Matilde
Ortiz, of a percentage claimed to be due him as the administrator of the property of
common ownership; (4) the division of certain jewelry in the possession of the
plaintiff Vicenta Ortiz; and (5) the petition that the amendment be held to have
been improperly admitted, which was made by the plaintiffs in their written motion
of August 21, 1905, against the opposition of the defendants, through which
admission the latter were obliged to pay the former P910.50.lawphil.net
Before entering upon an explanation of the propriety or impropriety of the claims
made by both parties, it is indispensable to state that the trial judge, in absolving
the defendants from the complaint, held that they had not caused losses and
damages to the plaintiffs, and that the revenues and the expenses were
compensated, in view of the fact that the defendants had been living for several
years in the Calle Escolta house, which was pro indiviso property of joint
ownership.
By this finding absolving the defendants from the complaint, and which was
acquiesced in by the plaintiffs who made no appeal therefrom, the first issue has
been decided which was raised by the plaintiffs, concerning the indemnity for
losses and damages, wherein are comprised the rents which should have been
obtained from the upper story of the said house during the time it was occupied by
the defendants, Matilde Ortiz and her husband, Gaspar de Bartolome.
Notwithstanding the acquiescence on the part of the plaintiffs, assenting to the said
finding whereby the defendants were absolved from the complaint, yet, as such
absolution is based on the compensation established in the judgment of the trial
court, between the amounts which each party is entitled to claim from the other, it
is imperative to determine whether the defendant Matilde Ortiz, as coowner of the
house on Calle Escolta, was entitled, with her husband, to reside therein, without
paying to her coowner, Vicenta Ortiz, who, during the greater part of the time, lived
with her husband abroad, one-half of the rents which the upper story would have
produced, had it been rented to a stranger.
Article 394 of the Civil Code prescribes:
Each coowner may use the things owned in common, provided he uses them in
accordance with their object and in such manner as not to injure the interests of
the community nor prevent the coowners from utilizing them according to their
rights.
Matilde Ortiz and her husband occupied the upper story, designed for use as a
dwelling, in the house of joint ownership; but the record shows no proof that, by so
doing, the said Matilde occasioned any detriment to the interest of the community
property, nor that she prevented her sister Vicenta from utilizing the said upper
story according to her rights. It is to be noted that the stores of the lower floor were
rented and accounting of the rents was duly made to the plaintiffs.
Each coowner of realty held pro indiviso exercises his rights over the whole
property and may use and enjoy the same with no other limitation than that he
shall not injure the interests of his coowners, for the reason that, until a division be
made, the respective part of each holder can not be determined and every one of
the coowners exercises, together with his other coparticipants, joint ownership
over the pro indiviso property, in addition to his use and enjoyment of the same.
As the hereditary properties of the joint ownership of the two sisters, Vicenta Ortiz,
plaintiff, and Matilde Ortiz, defendant, were situated in the Province of Ilocos Sur,
and were in the care of the last named, assisted by her husband, while the plaintiff
Vicenta with her husband was residing outside of the said province the greater part
of the time between 1885 and 1905, when she left these Islands for Spain, it is not
at all strange that delays and difficulties should have attended the efforts made to
collect the rents and proceeds from the property held in common and to obtain a
partition of the latter, especially during several years when, owing to the
insurrection, the country was in a turmoil; and for this reason, aside from that
founded on the right of coownership of the defendants, who took upon themselves
the administration and care of the properties of joint tenancy for purposes of their
preservation and improvement, these latter are not obliged to pay to the plaintiff
Vicenta one-half of the rents which might have been derived from the upper of the
story of the said house on Calle Escolta, and, much less, because one of the living
rooms and the storeroom thereof were used for the storage of some belongings
and effects of common ownership between the litigants. The defendant Matilde,
therefore, in occupying with her husband the upper floor of the said house, did not
injure the interests of her coowner, her sister Vicenta, nor did she prevent the latter
from living therein, but merely exercised a legitimate right pertaining to her as
coowner of the property.
Notwithstanding the above statements relative to the joint-ownership rights which
entitled the defendants to live in the upper story of the said house, yet in view of
the fact that the record shows it to have been proved that the defendant Matilde's
husband, Gaspar de Bartolome, occupied for four years a room or a part of the
lower floor of the same house on Calle Escolta, using it as an office for the justice
of the peace, a position which he held in the capital of that province, strict justice,
requires that he pay his sister-in-law, the plaintiff, one half of the monthly rent
which the said quarters could have produced, had they been leased to another
person. The amount of such monthly rental is fixed at P16 in accordance with the
evidence shown in the record. This conclusion as to Bartolome's liability results
from the fact that, even as the husband of the defendant coowner of the property,
he had no right to occupy and use gratuitously the said part of the lower floor of the
house in question, where he lived with his wife, to the detriment of the plaintiff
Vicenta who did not receive one-half of the rent which those quarters could and
should have produced, had they been occupied by a stranger, in the same manner
that rent was obtained from the rooms on the lower floor that were used as stores.
Therefore, the defendant Bartolome must pay to the plaintiff Vicenta P384, that is,
one-half of P768, the total amount of the rents which should have been obtained
during four years from the quarters occupied as an office by the justice of the
peace of Vigan.
With respect to the second question submitted for decision to this court, relative to
the payment of the sum demanded as a counterclaim, it was admitted and proved
in the present case that, as a result of a serious earthquake on August 15, 1897,
the said house on Calle Escolta was left in ruins and uninhabitable, and that, for its
reconstruction or repair, the defendants had to expend the sum of P6,252.32. This
expenditure, notwithstanding that it was impugned, during the trial, by the plaintiffs,
was duly proved by the evidence presented by the defendants. Evidence,
unsuccessfully rebutted, was also introduced which proved that the rents produced
by all the rural and urban properties of common ownership amounted, up to
August 1, 1905, to the sum of P3,654.15 which, being applied toward the cost of
the repair work on the said house, leaves a balance of P2,598.17, the amount
actually advanced by the defendants, for the rents collected by them were not
sufficient for the termination of all the work undertaken on the said building,
necessary for its complete repair and to replace it in a habitable condition. It is
therefore lawful and just that the plaintiff Vicenta Ortiz, who was willing to sell to
her sister Matilde for P1,500, her share in the house in question, when it was in a
ruinous state, should pay the defendants one-half of the amount expanded in the
said repair work, since the building after reconstruction was worth P9,000,
according to expert appraisal. Consequently, the counterclaim made by the
defendants for the payment to them of the sum of P1,299.08, is a proper demand,
though from this sum a reduction must be made of P384, the amount of one-half of
the rents which should have been collected for the use of the quarters occupied by
the justice of the peace, the payment of which is incumbent upon the husband of
the defendant Matilde, as aforesaid, and the balance remaining, P915.08, is the
amount which the plaintiff Vicenta must pay to the defendants.
The defendants claim to be entitled to the collection of legal interest on the amount
of the counterclaim, from December 7, 1904. This contention can not be sustained,
inasmuch as, until this suit is finally decided, it could not be known whether the
plaintiffs would or would not be obliged to pay the sum whatever in reimbursement
of expenses incurred by the plaintiffs in the repair work on the said house on Calle
Escolta, whether or not the defendants, in turn, were entitled to collect any such
amount, and, finally, what the net sum would be which the plaintiff's might have to
pay as reimbursement for one-half of the expenditure made by the defendants.
Until final disposal of the case, no such net sum can be determined, nor until then
can the debtor be deemed to be in arrears. In order that there be an obligation to
pay legal interest in connection with a matter at issue between the parties, it must
be declared in a judicial decision from what date the interest will be due on the
principal concerned in the suit. This rule has been established by the decisions of
the supreme court of Spain, in reference to articles 1108, 1109, and 1110 of the
Civil Code, reference on April 24, 1867, November 19, 1869, and February 22,
1901.
With regard to the percentage, as remuneration claimed by the husband of the
defendant Matilde for his administration of the property of common ownership,
inasmuch as no stipulation whatever was made in the matter by and between him
and his sister-in-law, the said defendant, the claimant is not entitled to the payment
of any remuneration whatsoever. Of his own accord and as an officious manager,
he administered the said pro indiviso property, one-half of which belonged to his
wife who held it in joint tenancy, with his sister-in-law, and the law does not allow
him any compensation as such voluntary administrator. He is merely entitled to a
reimbursement for such actual and necessary expenditures as he may have made
on the undivided properties and an indemnity for the damages he may have
suffered while acting in that capacity, since at all events it was his duty to care for
and preserve the said property, half of which belonged to his wife; and in exchange
for the trouble occasioned him by the administration of his sister-in-law's half of the
said property, he with his wife resided in the upper story of the house
aforementioned, without payment of one-half of the rents said quarters might have
produced had they been leased to another person.
With respect to the division of certain jewelry, petitioned for by the defendants and
appellants only in their brief in this appeal, the record of the proceedings in the
lower court does not show that the allegation made by the plaintiff Vicenta is not
true, to the effect that the deceased mother of the litigant sisters disposed of this
jewelry during her lifetime, because, had she not done so, the will made by the
said deceased would have been exhibited in which the said jewelry would have
been mentioned, at least it would have been proved that the articles in question
came into the possession of the plaintiff Vicenta without the expressed desire and
the consent of the deceased mother of the said sisters, for the gift of this jewelry
was previously assailed in the courts, without success; therefore, and in view of its
inconsiderable value, there is no reason for holding that the said gift was not
made.
As regards the collection of the sum of P910.50, which is the difference between
the assessed value of the undivided real properties and the price of the same as
determined by the judicial expert appraiser, it is shown by the record that the ruling
of the trial judge admitting the amendment to the original complaint, is in accord
with the law and principles of justice, for the reason that any of the coowners of a
pro indiviso property, subject to division or sale, is entitled to petition for its
valuation by competent expert appraisers. Such valuation is not prejudicial to any
of the joint owners, but is beneficial to their interests, considering that, as a general
rule, the assessed value of a building or a parcel of realty is less than the actual
real value of the property, and this being appraiser to determine, in conjunction
with the one selected by the plaintiffs, the value of the properties of joint
ownership. These two experts took part in the latter proceedings of the suit until
finally, and during the course of the latter, the litigating parties agreed to an
amicable division of the pro indiviso hereditary property, in accordance with the
price fixed by the judicial expert appraiser appointed as a third party, in view of the
disagreement between and nonconformity of the appraisers chosen by the
litigants. Therefore it is improper now to claim a right to the collection of the said
sum, the difference between the assessed value and that fixed by the judicial
expert appraiser, for the reason that the increase in price, as determined by this
latter appraisal, redounded to the benefit of both parties.
In consideration of the foregoing, whereby the errors assigned to the lower court
have been duly refuted, it is our opinion that, with a partial reversal of the judgment
appealed from, in so far as it absolves the plaintiffs from the counterclaim
presented by the defendants, we should and hereby do sentence the plaintiffs to
the payment of the sum of P915.08, the balance of the sum claimed by the
defendants as a balance of the one-half of the amount which the defendants
advanced for the reconstruction or repair of the Calle Escolta house, after
deducting from the total of such sum claimed by the latter the amount of P384
which Gaspar de Bartolome, the husband of the defendant Matilde, should have
paid as one-half of the rents due for his occupation of the quarters on the lower
floor of the said house as an office for the justice of the peace court of Vigan; and
we further find: (1) That the defendants are not obliged to pay one-half of the rents
which could have been obtained from the upper story of the said house; (2) that
the plaintiffs can not be compelled to pay the legal interest from December 7,
1904, on the sum expanded in the reconstruction of the aforementioned house, but
only the interest fixed by law, at the rate of 6 per cent per annum, from the date of
the judgment to be rendered in accordance with this decision; (3) that the husband
of the defendant Matilde Ortiz is not entitled to any remuneration for the
administration of the pro indiviso property belonging to both parties; (4) that,
neither is he entitled to collect from the plaintiffs the sum of P910.50, the difference
between the assessed valuation and the price set by the expert appraisal solicited
by the plaintiffs in their amendment to the complaint; and, (5) that no participation
shall be made of jewelry aforementioned now in the possession of the plaintiff
Vicenta Ortiz. The said judgment, as relates to the points appealed, is affirmed, in
so far as its findings agree with those of this decision, and is reversed, in so far as
they do not. No special finding is made regarding the costs of both instances. So
ordered.
[G.R. No. 32047. November 1, 1930.]
MANUEL MELENCIO, MARIANO MELENCIO, PURA MELENCIO, and
CARIDAD MELENCIO, Plaintiffs-Appellants, v. DY TIAO LAY, Defendant-
Appellee.
SYLLABUS
1. CIVIL CODE; COMMUNITY OF PROPERTY; ALTERNATIONS. — Article 397
of the Civil Code provides: "None of the owners shall, without the consent of the
others, make any alternations in the common property even though such
alterations might be advantageous to all." While the property referred to in this
case was leased, without the consent of all the coowners, building thereon one
house and three warehouse, it cannot be considered that the alterations are of
sufficient importance to nullify the lease, especially so since none of the coowners
objected to such alterations until over twenty years after the execution of the
contract of lease.
2. ID.; ID.; CONTRACT OF LEASE; RESCISSION. — The provision in the contract
that the lessee, at any time before he erected any building on the land, might
rescind the lease, can hardly be regarded as a violation of article 1256 of the Civil
Code.
3. ID.; ID.; ID.; ANNULMENT. — In this case only a small majority of the coowners
executed the lease here in question, and according to the terms of the contract the
lease might be given a duration of sixty years. This is an open violation of article
1548 of the Civil Code and the contract of the lease herein in question should
therefore be declared null and void.
DECISION
OSTRAND, J.:
On August 1, 1927, the plaintiffs, Manuel, Mariano, Pura and Caridad Melencio,
brought the present action against the defendant-appellee, Dy Tiao Lay, for the
recovery of the possession of a parcel of land situated in the town of Cabanatuan,
Nueva Ecija, and containing an area of 4,628.25 square meters. The plaintiffs
further demand a monthly rental of P300 for the use and occupation of the parcel
from May, 1926, until the date of the surrender to them of the possession thereof;
and that if it is found that the said appellee was occupying the said parcel of land
by virtue of a contract of lease, such contract should be declared null and void for
lack of consent, concurrence, and ratification by the owners thereof.
In his answer, the defendant pleaded the general issue, and as special defenses,
he alleged in substance that he was occupying the said tract of land by virtue of a
contract of lease executed on July 24, 1905, in favor of his predecessor in interest,
by Ruperta Garcia, Pedro Melencio, Juliana Melencio, and Ruperto Melencio
under the terms specified therein, and which contract is still in force; that Liberata
Macapagal, the mother of the plaintiffs, in her capacity as judicial administratrix of
the estate of Ramon Melencio, one of the original coowners of the parcel of land in
question, actually recognized and ratified the existence and validity of the contract
aforesaid by virtue of the execution of a public document by her on or about
November 27, 1920, and by collecting from the assignees of the original lessee the
monthly rent for the premises until April 30, 1926; and that said defendant deposits
with the clerk of court the sum of P20.20 every month as rent thereof and that as a
counterclaim, he seeks the recovery of P272 for goods and money delivered by
him to the plaintiffs.
The plaintiffs filed a reply to the answer alleging, among other things, that Ruperta
Garcia was not one of the coowners of the land in question; that the persons who
signed the alleged contract of lease never represented themselves as being the
sole and exclusive owners of the land subject to the lease as alleged by the
defendant in his answer; that the said contract of lease of July 24, 1905, is null and
void for being executed without the intervention and consent of two coowners,
Ramon Melencio and Jose P. Melencio, and without the marital consent of the
husbands of Juliana and Ruperta Melencio; that the lessee has repeatedly violated
the terms and conditions of the said contract; and that Liberata Macapagal, in her
capacity as administratrix of the property of her deceased husband, could not
lawfully and legally execute a contract of lease with the conditions and terms
similar to that of the one under consideration, and that from this it follows that she
could not ratify the said lease as claimed by the defendant.
On January 21, 1928, Liberta Macapagal Viuda de Melencio, duly appointed and
qualified as administratrix of the estate of her deceased husbands, Ramon
Melencio, filed a petition praying to be allowed to join the plaintiffs as party to the
present case, which petition was granted in open court on January 31, 1928. Her
amended complaint of intervention of February 14, 1928, contains allegations
similar to those alleged in the complaint of the original plaintiffs, and she further
alleges that the defendant-appellee has occupied the land in question ever since
November, 1920, under and by virtue of a verbal contract of lease for a term from
month to month. To this complaint of intervention, the defendant-appellee filed an
answer reproducing the allegations contained in his answer to the complaint of the
original plaintiffs and setting up prescription as a further special defense.
It appears from the evidence that the land in question was originally owned by one
Julian Melencio. He died prior to the year 1905 leaving his widow, Ruperta Garcia,
and his five children, Juliana, Ramon, Ruperta, Pedro R., and Emilio Melencio.
Emilio Melencio also died before ’905, his son Jose P. Melencio, then a minor,
succeeding to his interest in the said parcel of land by representation. A question
has been raised as to whether the land was community property of the marriage of
Julian Melencio and Ruperta Garcia, but the evidence is practically undisputed that
Ruperta Garcia in reality held nothing but a widow’s usufruct in the land.
On July 24, 1905, Ruperta Garcia, Pedro R. Melencio, Juliana Melencio, and
Ruperta Melencio executed a contract of lease of the land in favor of one Yap Kui
Chin, but neither Jose P. Melencio nor Ramon Melencio were mentioned in the
lease. The term of the lease was for twenty years, extendible for a like period at
the option of the lessee. The purpose of the lessee was to establish a rice mill on
the land, with the necessary buildings for warehouses and for quarters for the
employees, and it was further stipulated that at the termination of the original
period of the lease, or the extension thereof, the lessors might purchase all the
buildings and improvements on the land at a price to be fixed by experts appointed
by the parties, but that if the lessors should fail to take advantage of that privilege,
the lease would continue for another and further period of twenty years. The
document was duly acknowledged but was never recorded with the register of
deeds. The original rent agreed upon was P25 per month, but by reason of the
construction of a street through the land, the monthly rent was reduced to P20.20.
Shortly after the execution of the lease, the lessee took possession of the parcel in
question and erected the mill as well as the necessary buildings, and it appears
that in matters pertaining to the lease, he dealt with Pedro R. Melencio, who from
1905 until his death in 1920, acted as manager of the property held in common by
the heirs of Julian Melencio and Ruperta Garcia. The original lessee, Yap Kui
Chin, died in 1912, and the lease, as well as the other property, was transferred to
Uy Eng Jui who again transferred it to Uy Eng Jui & Co., an unregistered
partnership. Finally the lease came into the hands of Dy Tiao Lay, the herein
Defendant-Appellee.
Ramon Melencio died in 1914, and his widow, Liberata Macapagal, was appointed
administratrix of his estate. In 1913 the land which includes the parcel in question
was registered under the Torrens system. The lease was not mentioned in the
certificate of title, but it was stated that one house and three warehouses on the
land were the property of Yap Kui Chin.
In 1920 the heirs of Julian Melencio made an extrajudicial partition of parts of the
inheritance, and among other things, the land here in question fell to the share of
the children of Ramon Melencio, who are the original plaintiffs in the present case.
Their mother, Liberta Macapagal, as administratrix of the estate of her deceased
husband, Ramon, collected the rent for the lease at the rate of P20.20 per month
until the month of May, 1926, when she demanded of the lessee that the rent
should be increased to P300 per month, and she was then informed by the
defendant that a written lease existed and that according to the terms thereof, the
defendant was entitled to an extension of the lease at the original rental. The
plaintiffs insisted that they never had any knowledge of the existence of such a
contract of lease and maintained that in such case the lease was executed without
their consent and was void. It may be noted that upon careful search, a copy of the
contract of lease was found among the papers of the deceased Pedro R. Melencio.
Thereafter the present action was brought to set aside the lease and to recover
possession of the land. Upon trial, the court below rendered judgment in favor of
the defendant declaring the lease valid and ordering the plaintiffs to pay the P272
demanded by the defendant in his counterclaim. From this judgment the plaintiffs
appealed.
The contention of the appellants is that the aforesaid contract of lease (Exhibit C)
is null and void for the following reasons:
"1. That Exhibit C calls for an alteration of the property in question and therefore
ought to have been signed by all the coowners as by law required in the premises.
"2. That the validity and fulfillment of the said agreement of lease were made to
depend upon the will of the lessee exclusively.
"3. That the said contract of lease being for a term of over six years, the same is
null and void pursuant to the provision of article 1548 of the Civil Code.
"4. That the duration of the same is unreasonably long, thus being against public
policy.
"5. That the defendant-appellee and his predecessors in interest repeatedly
violated the provisions of the agreements."cralaw virtua1aw library
The first proposition is based on article 397 of the Civil Code which provides that
"none of the owners shall, without the consent of the others, make any alterations
in the common property even though such alterations might be advantageous to
all." We do not think that the alterations are of sufficient importance to nullify the
lease, especially so since none of the coowners objected to such alterations until
over twenty years after the execution of the contract of lease. The decision of this
court in the case of Enriquez v. A. S. Watson & Co. (22 Phil., 623), contains a full
discussion of the effect of alterations of lease community property, and no further
discussion upon that point need here be considered.
The second proposition is likewise of little merit. Under the circumstances, the
provision in the contract that the lessee, at any time before he erected any building
on the land, might rescind the lease, can hardly be regarded as a violation of
article 1256 of the Civil Code.
The third and fourth propositions are, in our opinion, determinative of the
controversy. The court below based its decision principally on the case of Enriquez
v. A. S. Watson & Co. (22 Phil., 623), and on the resolution of the Direccion
General de los Registros dated April 26, 1907. (Jurisprudecia Civil, vol. 107, p.
222.) An examination of the Enriquez case will show that it differs materially from
the present. In that case all of the coowners of a lot and building executed a
contract of lease of the property for the term of eighteen years in favor of A. S.
Watson & Co.; one of the owners was a minor, but he was represented by his
legally appointed guardian, and the action of the latter in signing the lease on
behalf of the minor was formally approved by the Court of First Instance. In the
present case only a small majority of the coowners executed the lease here in
question, and according to the terms of the contract the lease might be given a
duration of sixty years; that is widely different from a lease granted by all of the
coowners for a term of only eighteen years.
The resolution of April 26, 1907, is more in point. It relates to the inscription or
registration of a contract of lease of some pasture grounds. The majority of the
coowners of the property executed the lease for the term of twelve years, but when
the lessees presented the lease for inscription in the registry of property, the
registrar denied the inscription on the ground that the term of the lease exceeded
six years and that therefore the majority of the coowners lacked authority to grant
the lease. The Direccion General de los Registros held that the contract of lease
for a period exceeding six years, constitutes a real right subject to registry and that
the lease in question was valid.
The conclusions reached by the Direccion General led to considerable criticism
and have been overruled by a decision of the Supreme Court of Spain dated June
1, 1909. In that decision the court made the following statement of the case
(translation):
"The joint owners of 511 out of 1,000 parts of the realty denominated El Mortero,
leased out the whole property for twelve years to Doña Josefa de la Rosa;
whereupon the Count and Countess Trespalacios together with other coowners
brought this suit to annul the lease and, in view of the fact that the land was
indivisible, prayed for its sale by public auction and the distribution of the price so
obtained; they alleged that they neither took part nor consented to the lease; that
the decision of the majority of part owners referred to in article 398 of the Code,
implies a common deliberation on the step to be taken, for to do without it, would,
even more than to do without the minority, be nothing less than plunder; and that,
even if this deliberation were not absolutely necessary, the power of the majority
would still be confined to decisions touching the management and enjoyment of
the common property, and would not include acts of ownership, such as a lease for
twelve years, which according to the Mortgage Law gives rise to a real right, which
must be recorded, and which can be performed only by the owners of the property
leased.
"The part owners who had executed the contract prayed in reconvention that it be
held valid for all the owners in common, and if this could not be, then for all those
who had signed it, and for the rest, for the period of six years; and the Audiencia of
Caceres having rendered judgment holding the contract null and void, and ordering
the sale of the realty and the distribution of the price, the defendants appealed
alleging under the third and fourth assignments of error, that the judgment was a
violation of article 398 of the Civil Code, which is absolute and sets no limit of time
for the efficacy of the decisions arrived at by the majority of the part owners for the
enjoyment of the common property, citing the decisions of June 30th, 1897, of July
8th, 1902, and of October 30th, 1907; under the fifth assignment of error the
appellants contended that in including joint owners among those referred to in said
article, which sets certain limits to the power of leasing, in the course of the
management of another’s property, the court applied article 1548 unduly; and by
the seventh assignment of error, they maintained the judgment appealed from also
violated article 1727, providing that the principal is not bound where his agent has
acted beyond his authority; whence it may be inferred, that if in order to hold the
contract null and void, the majority of the part owners are looked upon as
managers or agents exercising limited powers, it must at least be conceded that in
so far as the act in question lies within the scope of their powers, it is valid; the
contract cannot be annulled in toto."
The Supreme Court held that the appeal from the decision of the Audiencia of
Caceres was not well taken and expressed the following consideranda:
"Considering that, although as a rule the contract of lease constitutes an act of
management, as this court has several times held, cases may yet arise, either
owing to the nature of the subject matter, or to the period of duration, which may
render it imperative to record the contract in the registry of property, in pursuance
of the Mortgage Law, where the contract of lease may give rise to a real right in
favor of the lessee, and it would then constitute such a sundering of the ownership
as transcends mere management; in such cases it must of necessity be
recognized that the part owners representing the greater portion of the property
held in common have no power to lease said property for a longer period than six
years without the consent of all the coowners, whose proprietary rights, expressly
recognized by the law, would by contracts of long duration be restricted or
annulled; and as under article 1548 of the Civil Code such contracts cannot be
entered into by the husband with respect to his wife’s property, by the parent or
guardian with respect to that of the child or ward, and by the manager in default of
special power, since the contract of lease only produces personal obligations, and
cannot without the consent of all persons interested or express authority from the
owner, be extended to include stipulations which may alter its character, changing
it into a contract of partial alienation of the property leased;
"Considering that, applying this doctrine to the case before us, one of the grounds
upon which the judgment appealed from, denying the validity of the lease made by
the majority of the part owners of the pasture land El Mortero is based, must be
upheld; to wit, that the period of duration is twelve years and the consent of all the
coowners has not been obtained; hence, the third, fourth, and fifth assignments of
error are without merit; firstly, because article 398 of the Civil Code, alleged to
have been violated, refers to acts decided upon by the majority of the part owners,
touching the management and enjoyment of the common property, and does not
contradict what we have stated in the foregoing paragraph; secondly, because
although the cases cited were such as arose upon leases for more than sixty
years, yet this point was not raised on appeal, and could not therefore be passed
upon; and thirdly, because it cannot be denied that there is an analogy between a
manager without special authority, who is forbidden by article 1548 of the Code to
give a lease for a period of over six years, and the joint owners constituting a legal
majority, who may decide to lease out the indivisible property, with respect to the
shares of the other coowners; and having come to the conclusion that the contract
is null and void, there is no need to discuss the first two assignments of error which
refer to another of the bases adopted, however erroneously, by the trial court;
"Considering that the sixth assignment of error is without merit, inasmuch as the
joint ownership of property is not a sort of agency and cannot be governed by the
provisions relating to the latter contract; whence, article 1727 of the Code alleged
to have been violated, can no more be applied, than, the question of the validity or
nullity of the lease being raised, upon the contract as celebrated, it would be
allowable to modify a posteriori some one or other of the main conditions
stipulated, like that regarding the duration of the lease, for this would amount to a
novation; still less allowable would it be to authorize diverse periods for the
different persons unequally interested in the fulfillment."cralaw virtua1aw library
Taking into consideration articles 398, 1548, and 1713 of the Civil Code and
following the aforesaid decision of June 1,1909, we hold that the contract of lease
here in question is null and void.
It has been suggested that by reason of prescription and by acceptance of benefits
under the lease, the plaintiffs are estopped to question the authority for making the
lease. To this we may answer that the burden of proof of prescription devolved
upon the defendant and that as far as we can find, there is no proof that Ramon
Melencio and his successor over had knowledge of the existence of the lease in
question prior to 1926. We cannot by mere suspicion conclude that they were
informed of the existence of the document and its terms; it must be remembered
that under a strict interpretation of the terms of the lease, the lessees could remain
indefinitely in their tenancy unless the lessors could purchase the mill and the
buildings on the land. In such circumstances, better evidence than that presented
by the defendant in regard to the plaintiffs’ knowledge of the lease must be
required.
The fact that Ramon during his lifetime received his share of the products of land
owned in common with his coheirs is not sufficient proof of knowledge of the
existence of the contract of lease when it is considered that the land in question
was only a small portion of a large tract which Pedro R. Melencio was
administering in connection with other community property.
The appealed judgment as to the validity of the lease is therefore reversed, and it
is ordered that the possession of the land in controversy be delivered to the
intervenor Liberata Macapagal in her capacity as administratrix of the estate of the
deceased Ramon Melencio. It is further ordered that the defendant pay to said
administratrix a monthly rent of P50 for the occupation of the land from May 1st,
1926, until the land is delivered to the administratrix. The sum of P272 demanded
by the defendant in his counterclaim may be deducted from the total amount of the
rent due and unpaid. The buildings erected on the land by the defendant and his
predecessors in interest may be removed by him, or otherwise disposed of, within
six months from the promulgation of this decision. Without costs. So ordered.
G.R. No. L-3404 April 2, 1951
ANGELA I. TUASON, plaintiff-appellant, vs. ANTONIO TUASON, JR., and
GREGORIO ARANETA, INC., defendants-appellees.
MONTEMAYOR, J.:
In 1941 the sisters Angela I. Tuason and Nieves Tuason de Barreto and their
brother Antonio Tuason Jr., held a parcel of land with an area of 64,928.6 sq. m.
covered by Certificate of Title No. 60911 in Sampaloc, Manila, in common, each
owning an undivided 1/3 portion. Nieves wanted and asked for a partition of the
common property, but failing in this, she offered to sell her 1/3 portion. The share
of Nieves was offered for sale to her sister and her brother but both declined to buy
it. The offer was later made to their mother but the old lady also declined to buy,
saying that if the property later increased in value, she might be suspected of
having taken advantage of her daughter. Finally, the share of Nieves was sold to
Gregorio Araneta Inc., a domestic corporation, and a new Certificate of Title No.
61721 was issued in lieu of the old title No. 60911 covering the same property. The
three co-owners agreed to have the whole parcel subdivided into small lots and
then sold, the proceeds of the sale to be later divided among them. This
agreement is embodied in a document (Exh. 6) entitled "Memorandum of
Agreement" consisting of ten pages, dated June 30, 1941.
Before, during and after the execution of this contract (Exh. 6), Atty. J. Antonio
Araneta was acting as the attorney-in-fact and lawyer of the two co-owners,
Angela I. Tuason and her brother Antonio Tuason Jr. At the same time he was a
member of the Board of Director of the third co-owner, Araneta, Inc.
The pertinent terms of the contract (Exh. 6) may be briefly stated as follows: The
three co-owners agreed to improve the property by filling it and constructing roads
and curbs on the same and then subdivide it into small lots for sale. Araneta Inc.
was to finance the whole development and subdivision; it was prepare a schedule
of prices and conditions of sale, subject to the subject to the approval of the two
other co-owners; it was invested with authority to sell the lots into which the
property was to be subdivided, and execute the corresponding contracts and
deeds of sale; it was also to pay the real estate taxes due on the property or of any
portion thereof that remained unsold, the expenses of surveying, improvements,
etc., all advertising expenses, salaries of personnel, commissions, office and legal
expenses, including expenses in instituting all actions to eject all tenants or
occupants on the property; and it undertook the duty to furnish each of the two co-
owners, Angela and Antonio Tuason, copies of the subdivision plans and the
monthly sales and rents and collections made thereon. In return for all this
undertaking and obligation assumed by Araneta Inc., particularly the financial
burden, it was to receive 50 per cent of the gross selling price of the lots, and any
rents that may be collected from the property, while in the process of sale, the
remaining 50 per cent to be divided in equal portions among the three co-owners
so that each will receive 16.33 per cent of the gross receipts.
Because of the importance of paragraphs 9, 11 and 15 of the contract (Exh. 6), for
purposes of reference we are reproducing them below:
(9) This contract shall remain in full force and effect during all the time that it may
be necessary for the PARTY OF THE SECOND PART to fully sell the said
property in small and subdivided lots and to fully collect the purchase prices due
thereon; it being understood and agreed that said lots may be rented while there
are no purchasers thereof;
(11) The PARTY OF THE SECOND PART (meaning Araneta Inc.) is hereby given
full power and authority to sign for and in behalf of all the said co-owners of said
property all contracts of sale and deeds of sale of the lots into which this property
might be subdivided; the powers herein vested to the PARTY OF THE SECOND
PART may, under its own responsibility and risk, delegate any of its powers under
this contract to any of its officers, employees or to third persons;
(15) No co-owner of the property subject-matter of this contract shall sell, alienate
or dispose of his ownership, interest or participation therein without first giving
preference to the other co-owners to purchase and acquire the same under the
same terms and conditions as those offered by any other prospective purchaser.
Should none of the co-owners of the property subject-matter of this contract
exercise the said preference to acquire or purchase the same, then such sale to a
third party shall be made subject to all the conditions, terms, and dispositions of
this contract; provided, the PARTIES OF THE FIRST PART (meaning Angela and
Antonio) shall be bound by this contract as long as the PARTY OF THE SECOND
PART, namely, the GREGORIO ARANETA, INC. is controlled by the members of
the Araneta family, who are stockholders of the said corporation at the time of the
signing of this contract and/or their lawful heirs;
On September 16, 1944, Angela I. Tuason revoked the powers conferred on her
attorney-in-fact and lawyer, J. Antonio Araneta. Then in a letter dated October 19,
1946, Angela notified Araneta, Inc. that because of alleged breach of the terms of
the "Memorandum of Agreement" (Exh. 6) and abuse of powers granted to it in the
document, she had decided to rescind said contract and she asked that the
property held in common be partitioned. Later, on November 20, 1946, Angela filed
a complaint in the Court of First Instance of Manila asking the court to order the
partition of the property in question and that she be given 1/3 of the same including
rents collected during the time that the same including rents collected during the
time that Araneta Inc., administered said property.
The suit was administered principally against Araneta, Inc. Plaintiff's brother,
Antonio Tuason Jr., one of the co-owners evidently did not agree to the suit and its
purpose, for he evidently did not agree to the suit and its purpose, for he joined
Araneta, Inc. as a co-defendant. After hearing and after considering the extensive
evidence introduce, oral and documentary, the trial court presided over by Judge
Emilio Peña in a long and considered decision dismissed the complaint without
pronouncement as to costs. The plaintiff appealed from that decision, and because
the property is valued at more than P50,000, the appeal came directly to this
Court.
Some of the reasons advanced by appellant to have the memorandum contract
(Exh. 6) declared null and void or rescinded are that she had been tricked into
signing it; that she was given to understand by Antonio Araneta acting as her
attorney-in-fact and legal adviser that said contract would be similar to another
contract of subdivision of a parcel into lots and the sale thereof entered into by
Gregorio Araneta Inc., and the heirs of D. Tuason, Exhibit "L", but it turned out that
the two contracts widely differed from each other, the terms of contract Exh. "L"
being relatively much more favorable to the owners therein the less favorable to
Araneta Inc.; that Atty. Antonio Araneta was more or less disqualified to act as her
legal adviser as he did because he was one of the officials of Araneta Inc., and
finally, that the defendant company has violated the terms of the contract (Exh. 6)
by not previously showing her the plans of the subdivision, the schedule of prices
and conditions of the sale, in not introducing the necessary improvements into the
land and in not delivering to her her share of the proceeds of the rents and sales.
We have examined Exh. "L" and compared the same with the contract (Exh. 6)
and we agree with the trial court that in the main the terms of both contracts are
similar and practically the same. Moreover, as correctly found by the trial court, the
copies of both contracts were shown to the plaintiff Angela and her husband, a
broker, and both had every opportunity to go over and compare them and decide
on the advisability of or disadvantage in entering into the contract (Exh. 6); that
although Atty. Antonio Araneta was an official of the Araneta Inc.; being a member
of the Board of Directors of the Company at the time that Exhibit "6" was executed,
he was not the party with which Angela contracted, and that he committed no
breach of trust. According to the evidence Araneta, the pertinent papers, and sent
to her checks covering her receive the same; and that as a matter of fact, at the
time of the trial, Araneta Inc., had spent about P117,000 in improvement and had
received as proceeds on the sale of the lots the respectable sum of
P1,265,538.48. We quote with approval that portion of the decision appealed from
on these points:
The evidence in this case points to the fact that the actuations of J. Antonio
Araneta in connection with the execution of exhibit 6 by the parties, are above
board. He committed nothing that is violative of the fiduciary relationship existing
between him and the plaintiff. The act of J. Antonio Araneta in giving the plaintiff a
copy of exhibit 6 before the same was executed, constitutes a full disclosure of the
facts, for said copy contains all that appears now in exhibit 6.
Plaintiff charges the defendant Gregorio Araneta, Inc. with infringing the terms of
the contract in that the defendant corporation has failed (1) to make the necessary
improvements on the property as required by paragraphs 1 and 3 of the contract;
(2) to submit to the plaintiff from time to time schedule of prices and conditions
under which the subdivided lots are to be sold; and to furnish the plaintiff a copy of
the subdivision plans, a copy of the monthly gross collections from the sale of the
property.
The Court finds from the evidence that he defendant Gregorio Araneta,
Incorporated has substantially complied with obligation imposed by the contract
exhibit 6 in its paragraph 1, and that for improvements alone, it has disbursed the
amount of P117,167.09. It has likewise paid taxes, commissions and other
expenses incidental to its obligations as denied in the agreement.
With respect to the charged that Gregorio Araneta, Incorporated has failed to
submit to plaintiff a copy of the subdivision plains, list of prices and the conditions
governing the sale of subdivided lots, and monthly statement of collections form
the sale of the lots, the Court is of the opinion that it has no basis. The evidence
shows that the defendant corporation submitted to the plaintiff periodically all the
data relative to prices and conditions of the sale of the subdivided lots, together
with the amount corresponding to her. But without any justifiable reason, she
refused to accept them. With the indifferent attitude adopted by the plaintiff, it was
thought useless for Gregorio Araneta, Incorporated to continue sending her
statement of accounts, checks and other things. She had shown on various
occasions that she did not want to have any further dealings with the said
corporation. So, if the defendant corporation proceeded with the sale of the
subdivided lots without the approval of the plaintiff, it was because it was under the
correct impression that under the contract exhibit 6 the decision of the majority co-
owners is binding upon all the three.
The Court feels that recission of the contract exhibit 6 is not minor violations of the
terms of the agreement, the general rule is that "recission will not be permitted for
a slight or casual breach of the contract, but only for such breaches as are so
substantial and fundamental as to defeat the object of the parties in making the
agreement" (Song Fo & Co. vs. Hawaiian-Philippine Co., 47 Phil. 821).
As regards improvements, the evidence shows that during the Japanese
occupation from 1942 and up to 1946, the Araneta Inc. although willing to fill the
land, was unable to obtain the equipment and gasoline necessary for filling the low
places within the parcel. As to sales, the evidence shows that Araneta Inc.
purposely stopped selling the lots during the Japanese occupantion, knowing that
the purchase price would be paid in Japanese military notes; and Atty. Araneta
claims that for this, plaintiff should be thankfull because otherwise she would have
received these notes as her share of the receipts, which currency later became
valueles.
But the main contention of the appellant is that the contract (Exh. 6) should be
declared null and void because its terms, particularly paragraphs 9, 11 and 15
which we have reproduced, violate the provisions of Art. 400 of the Civil Code,
which for the purposes of reference we quote below:
ART. 400. No co-owner shall be obliged to remain a party to the community. Each
may, at any time, demand the partition of the thing held in common.
Nevertheless, an agreement to keep the thing undivided for a specified length of
time, not exceeding ten years, shall be valid. This period may be a new
agreement.
We agree with the trial court that the provisions of Art. 400 of the Civil Code are
not applicable. The contract (Exh., 6) far from violating the legal provision that
forbids a co-owner being obliged to remain a party to the community, precisely has
for its purpose and object the dissolution of the co-ownership and of the
community by selling the parcel held in common and dividing the proceeds of the
sale among the co-owners. The obligation imposed in the contract to preserve the
co-ownership until all the lots shall have been sold, is a mere incident to the main
object of dissolving the co-owners. By virtue of the document Exh. 6, the parties
thereto practically and substantially entered into a contract of partnership as the
best and most expedient means of eventually dissolving the co-ownership, the life
of said partnership to end when the object of its creation shall have been attained.
evidence as was done by the trial court that of the 64,928.6 sq. m. which is the
total area of the parcel held in common, only 1,600 sq. m. or 2.5 per cent of the
entire area remained unsold at the time of the trial in the year 1947, while the great
bulk of 97.5 per cent had already been sold. As well observed by the court below,
the partnership is in the process of being dissolved and is about to be dissolved,
and even assuming that Art. 400 of the Civil Code were applicable, under which
the parties by agreement may agree to keep the thing undivided for a period not
exceeding 10 years, there should be no fear that the remaining 1,600 sq. m. could
not be disposed of within the four years left of the ten-years period fixed by Art.
400.
We deem it unnecessary to discuss and pass upon the other points raised in the
appeal and which counsel for appellant has extensively and ably discussed, citing
numerous authorities. As we have already said, we have viewed the case from a
practical standpoint, brushing aside technicalities and disregarding any minor
violations of the contract, and in deciding the case as we do, we are fully
convinced that the trial court and this Tribunal are carrying out in a practical and
expeditious way the intentions and the agreement of the parties contained in the
contract (Exh. 6), namely, to dissolve the community and co-ownership, in a
manner most profitable to the said parties.
In view of the foregoing, the decision appealed from is hereby affirmed. There is no
pronouncement as to costs.
So ordered.

This aspect of the contract is very similar to and was perhaps based on the other
agreement or contract (Exh. "L") referred to by appellant where the parties thereto
in express terms entered into partnership, although this object is not expressed in
so many words in Exh. 6. We repeat that we see no violation of Art. 400 of the Civil
Code in the parties entering into the contract (Exh. 6) for the very reason that Art.
400 is not applicable.

Looking at the case from a practical standpoint as did the trial court, we find no
valid ground for the partition insisted upon the appellant. We find from the
G.R. No. 101522 May 28, 1993
LEONARDO MARIANO, AVELINA TIGUE, LAZARO MARIANO, MERCEDES
SAN PEDRO, DIONISIA M. AQUINO, and JOSE N.T. AQUINO, petitioners, vs.
HON. COURT OF APPEALS, (Sixteenth Division), GRACE GOSIENGFIAO,
assisted by her husband GERMAN GALCOS; ESTER GOSIENGFIAO,
assisted by her husband AMADOR BITONA; FRANCISCO GOSIENGFIAO,
JR., NORMA GOSIENGFIAO, and PINKY ROSE GUENO, respondents.
NOCON, J.:
Before Us is a petition foe review of the decision, dated May 13, 1991 of the Court
of Appeals in CA-G.R. CV No. 13122, entitled Grace Gosiengfiao, et al. v.
Leonardo Mariano v. Amparo Gosiengfiao 1 raising as issue the distinction
between Article 10882 and Article 16203 of the Civil Code.
The Court of Appeals summarized the facts as follows:
It appears on record that the decedent Francisco Gosiengfiao is the registered
owner of a residential lot located at Ugac Sur, Tuguegarao, Cagayan, particularly
described as follows, to wit:
"The eastern portion of Lot 1351, Tuguegarao Cadastre, and after its segregation
now designated as Lot 1351-A, Plan PSD-67391, with an area of 1,1346 square
meters."
and covered by Transfer Certificate of Title No. T-2416 recorded in the Register of
Deeds of Cagayan.
The lot in question was mortgaged by the decedent to the Rural Bank of
Tuguegarao (designated as Mortgagee bank, for brevity) on several occasions
before the last, being on March 9, 1956 and 29, 1958.
On August 15, 1958, Francisco Gosiengfiao died intestate survived by his heirs,
namely: Third-Party Defendants: wife Antonia and Children Amparo, Carlos,
Severino and herein plaintiffs-appellants Grace, Emma, Ester, Francisco, Jr.,
Norma, Lina (represented by daughter Pinky Rose), and Jacinto.
The loan being unpaid, the lot in dispute was foreclosed by the mortgagee bank
and in the foreclosure sale held on December 27, 1963, the same was awarded to
the mortgagee bank as the highest bidder.
On February 7, 1964, third-party defendant Amparo Gosiengfiao-Ibarra redeemed
the property by paying the amount of P1,347.89 and the balance of P423.35 was
paid on December 28, 1964 to the mortgagee bank.
On September 10, 1965, Antonia Gosiengfiao on her behalf and that of her minor
children Emma, Lina, Norma together with Carlos and Severino executed a "Deed
of Assignment of the Right of Redemption" in favor of Amparo G. Ibarra appearing
in the notarial register of Pedro (Laggui) as Doc. No. 257, Page No. 6, Book No. 8,
Series of 1965.
On August 15, 1966, Amparo Gosiengfiao sold the entire property to defendant
Leonardo Mariano who subsequently established residence on the lot subject of
this controversy. It appears in the Deed of Sale dated August 15, 1966 that
Amparo, Antonia, Carlos and Severino were signatories thereto.
Sometime in 1982, plaintiff-appellant Grace Gosiengfiao learned of the sale of said
property by the third-party defendants. She went to the Barangay Captain and
asked for a confrontation with defendants Leonardo and Avelina Mariano to
present her claim to said property.
On November 27, 1982, no settlement having been reached by the parties, the
Barangay captain issued a certificate to file action.
On December 8, 1982, defendant Leonardo Mariano sold the same property to his
children Lazaro F. Mariano and Dionicia M. Aquino as evidenced by a Deed of
Sale notarized by Hilarion L. Aquino as Doc. No. 143, Page No. 19, Book No. V,
Series of 1982.
On December 21, 1982, plaintiffs Grace Gosiengfiao, et al. filed a complaint for
"recovery of possession and legal redemption with damages" against defendants
Leonardo and Avelina Mariano. Plaintiffs alleged in their complaint that as co-heirs
and co-owners of the lot in question, they have the right to recover their respective
shares in the same, and property as they did not sell the same, and the right of
redemption with regard to the shares of other co-owners sold to the defendants.
Defendants in their answer alleged that the plaintiffs has (sic) no cause of action
against them as the money used to redeem lot in question was solely from the
personal funds of third-party defendant Amparo Gosiengfiao-Ibarra, who
consequently became the sole owner of the said property and thus validly sold the
entire property to the defendants, and the fact that defendants had already sold the
said property to the children, Lazaro Mariano and Dionicia M. Aquino. Defendants
further contend that even granting that the plaintiffs are co-owners with the third-
party defendants, their right of redemption had already been barred by the Statute
of Limitations under Article 1144 of the Civil Code, if not by laches.4
After trial on the merits, the Regional Trial Court of Cagayan, Branch I, rendered a
decision dated September 16, 1986, dismissing the complaint and stating that
respondents have no right of ownership or possession over the lot in question. The
trial court further said that when the subject property foreclosed and sold at public
auction, the rights of the heirs were reduced to a mere right of redemption. And
when Amparo G. Ibarra redeemed the lot from the Rural Bank on her own behalf
and with her own money she became the sole owner of the property.
Respondents' having failed to redeem the property from the bank or from Amparo
G. Ibarra, lost whatever rights the might have on the property.5
The Court of Appeals in its questioned decision reversed and set aside the ruling
of the trial court and declared herein respondents as co-owners of the property in
the question. The Court of Appeals said:
The whole controversy in the case at bar revolves on the question of "whether or
not a co-owner who redeems the whole property with her own personal funds
becomes the sole owner of said property and terminates the existing state of co-
ownership."
Admittedly, as the property in question was mortgaged by the decedent, a co-
ownership existed among the heirs during the period given by law to redeem the
foreclosed property. Redemption of the whole property by a co-owner does not
vest in him sole ownership over said property but will inure to the benefit of all co-
owners. In other words, it will not end to the existing state of co-ownership.
Redemption is not a mode of terminating a co-ownership.
xxx xxx xxx
In the case at bar, it is undisputed and supported by records, that third-party
defendant Amparo G. Ibarra redeemed the propety in dispute within the one year
redemption period. Her redemption of the property, even granting that the money
used was from her own personal funds did not make her the exclusive owner of
the mortgaged property owned in common but inured to the benefit of all co-
owners. It would have been otherwise if third-party defendant Amparo G. Ibarra
purchased the said property from the mortgagee bank (highest, bidder in the
foreclosure sale) after the redemption period had already expired and after the
mortgagee bank had consolidated it title in which case there would no longer be
any co-ownership to speak of .6
The decision of the Court of Appeals is supported by a long line of case law which
states that a redemption by a co-owner within the period prescribed by law inures
to the benefit of all the other co-owners.7
The main argument of petitioners in the case at bar is that the Court of Appeals
incorrectly applied Article 1620 of the Civil Code, instead of Article 1088 of the
same code which governs legal redemption by co-heirs since the lot in question,
which forms part of the intestate estate of the late Francisco Gosiengfiao, was
never the subject of partition or distribution among the heirs, thus, private
respondents and third-party defendants had not ceased to be co-heirs.
On that premise, petitioners further contend that the right of legal redemption was
not timely exercised by the private respondents, since Article 1088 prescribes that
the same must be done within the period of one month from the time they were
notified in writing of the sale by the vendor.
According to Tolentino, the fine distinction between Article 1088 and Article 1620 is
that when the sale consists of an interest in some particular property or properties
of the inheritance, the right redemption that arises in favor of the other co-heirs is
that recognized in Article 1620. On the other hand, if the sale is the hereditary right
itself, fully or in part, in the abstract sense, without specifying any particular object,
the right recognized in Article 1088 exists.8
Petitioners allege that upon the facts and circumstances of the present case,
respondents failed to exercise their right of legal redemption during the period
provided by law, citing as authority the case of Conejero, et al., v. Court of
Appeals, et al.9 wherein the Court adopted the principle that the giving of a copy of
a deed is equivalent to the notice as required by law in legal redemption.
We do not dispute the principle laid down in the Conejero case. However, the facts
in the said case are not four square with the facts of the present case. In Conejero,
redemptioner Enrique Conejero was shown and given a copy of the deed of sale of
the subject property. The Court in that case stated that the furnishing of a copy of
the deed was equivalent to the giving of a written notice required by law. 11
The records of the present petition, however, show no written notice of the sale
being given whatsoever to private respondents. Although, petitioners allege that
sometime on October 31, 1982 private respondent, Grace Gosiengfiao was given
a copy of the questioned deed of sale and shown a copy of the document at the
Office of the Barangay Captain sometime November 18, 1982, this was not
supported by the evidence presented. On the contrary, respondent, Grace
Gosiengfiao, in her testimony, declared as follows:
Q. When you went back to the residence of Atty. Pedro Laggui were you able to
see him?
A. Yes, I did.
Q. When you saw him, what did you tell?
A. I asked him about the Deed of Sale which Mrs. Aquino had told me and he also
showed me a Deed of Sale. I went over the Deed of Sale and I asked Atty. Laggui
about this and he mentioned here about the names of the legal heirs. I asked why
my name is not included and I was never informed in writing because I would like
to claim and he told me to better consult my own attorney.
Q. And did you go?
A. Yes, I did.
Q. What kind of copy or document is that?
A. It is a deed of sale signed by my mother, sister Amparo and my brothers.
Q. If shown to you the copy of the Deed of Sale will you be able to identify it?
A. Yes, sir.
Thereafter, Grace Gosiengfiao explicitly stated that she was never given a copy of
the said Deed of Sale.
Q. Where did Don Mariano, Dr. Mariano and you see each other?
A. In the house of Brgy. Captain Antonio Bassig.
Q. What transpired in the house of the Brgy. Captain when you saw each other
there?
A. Brgy. Captain Bassig informed my intention of claiming the lot and I also
informed him about the Deed of Sale that was not signed by me since it is mine it
is already sold and I was informed in writing about it. I am a legal heir and I have
also the right to claim.
Q. And what was the reply of Don Mariano and Dr. Mariano to the information
given to them by Brgy. Captain Bassig regarding your claim?
A. He insisted that the lot is already his because of the Deed of Sale. I asked for
the exact copy so that I could show to him that I did not sign and he said he does
not have a copy.
The above testimony was never refuted by Dr. Mariano who was present before
Brgy. Captain Bassig.
The requirement of a written notice has long been settled as early as in the case of
Castillo v. Samonte, where this Court quoted the ruling in Hernaez v. Hernaez, 32
Phil., 214, thus:
Both the letter and spirit of the New Civil Code argue against any attempt to widen
the scope of the notice specified in Article 1088 by including therein any other kind
of notice, such as verbal or by registration. If the intention of the law had been to
include verbal notice or any other means of information as sufficient to give the
effect of this notice, then there would have been no necessity or reasons to specify
in Article 1088 of the New Civil Code that the said notice be made in writing for,
under the old law, a verbal notice or information was sufficient. 14
Moreover, petitioners themselves adopted in their argument respondents'
allegation In their complaint that sometime on October, 1982 they sought the
redemption of the property from spouses Leonardo Mariano and Avelina Tigue, by
tendering the repurchase money of P12,000.00, which the spouses rejected.15
Consequently, private respondents exercised their right of redemption at the first
opportunity they have by tendering the repurchase price to petitioners. The
complaint they filed, before the Barangay Captain and then to the Regional Trial
Court was necessary to assert their rights. As we learned in the case of Castillo,
supra:
It would seem clear from the above that the reimbursement to the purchaser within
the period of one month from the notice in writing is a requisite or condition
precedent to the exercise of the right of legal redemption; the bringing of an action
in court is the remedy to enforce that right in case the purchaser refuses the
redemption. The first must be done within the month-period; the second within the
prescriptive period provided in the Statute of Limitation. 16
The ruling in Castillo v. Samonte; supra, was reiterated in the case of Garcia v.
Calaliman, where We also discussed the reason for the requirement of the written
notice. We said:
Consistent with aforesaid ruling, in the interpretation of a related provision (Article
1623 of the New Civil Code) this Court had stressed that written notice is
indispensable, actual knowledge of the sale acquired in some other manners by
the redemptioner, notwithstanding. He or she is still entitled to written notice, as
exacted by the code to remove all uncertainty as to the sale, its terms and its
validity, and to quiet and doubt that the alienation is not definitive. The law not
having provided for any alternative, the method of notifications remains exclusive,
though the Code does not prescribe any particular form of written notice nor any
distinctive method written notification of redemption (Conejero et al. v. Court of
Appeals et al., 16 SCRA 775 [1966]; Etcuban v. Court of Appeals, 148 SCRA 507
[1987]; Cabrera v. Villanueva, G.R. No. 75069, April 15, 1988).17 (Emphasis ours)
We likewise do not find merit in petitioners' position that private respondents could
not have validly effected redemption due to their failure to consign in court the full
redemption price after tender thereof was rejected by the petitioners. Consignation
is not necessary, because the tender of payment was not made to discharge an
obligation, but to enforce or exercise a right. It has been previously held that
consignation is not required to preserve the right of repurchase as a mere tender
of payment is enough on time as a basis for an action to compel the vendee a retro
to resell the property; no subsequent consignation was necessary to entitle private
respondents to such
reconveyance. 18

Premises considered, respondents have not lost their right to redeem, for in the
absence of a written notification of the sale by the vendors, the 30-day period has
not even begun to run.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Cost

against petitioners.

SO ORDERED.
G.R. No. L-24419 July 15, 1968
LEONORA ESTOQUE, plaintiff-appellant, vs. ELENA M. PAJIMULA, assisted
by her husband CIRIACO PAJIMULA, defendants-appellees.
REYES, J.B.L., J.:
Direct appeal from an order of the Court of First Instance of La Union, in its Civil
Case No. 1990, granting a motion to dismiss the complaint for legal redemption by
a co-owner (retracto legal de comuneros) on account of failure to state a cause of
action.
The basic facts and issues are stated in the decision appealed from, as follows:
Plaintiff based her complaint for legal redemption on a claim that she is a co-owner
of Lot No. 802, for having purchased 1/3 portion thereof, containing an area of 640
square meters as evidenced by a deed of sale, Annex "A", which was executed on
October 28, 1951 by Crispina Perez de Aquitania, one of the co-owners, in her
favor.
On the other hand, the defendant, who on December 30, 1959 acquired the other
2/3 portion of Lot No. 802 from Crispina Aquitania and her children, claimed that
the plaintiff bought the 1/3 southeastern portion, which is definitely identified and
segregated, hence there existed no co-ownership at the time and after said plaintiff
bought the aforesaid portion, upon which right of legal redemption can be
exercised or taken advantage of.
From the complaint, it would appear that Lot No. 802 of the Cadastral survey of
Rosario, covered by original certificate of title No. RO-2720 (N.A.) was originally
owned by the late spouses, Rosendo Perez and Fortunata Bernal, who were
survived by her children, namely, Crispina Perez, Lorenzo Perez and Ricardo
Perez. Ricardo Perez is also now dead. On October 28, 1951, Crispina P. Vda. de
Aquitania sold her right and participation in Lot No. 802 consisting of 1/3 portion
with an area of 640 square meters to Leonora Estoque (Annex A of the complaint).
On October 29, 1951, Lorenzo Perez, Crispina Perez and Emilia P. Posadas,
widow of her deceased husband, Ricardo Perez for herself and in behalf of her
minor children, Gumersindo, Raquel, Emilio and Ricardo, Jr., executed a deed of
extrajudicial settlement wherein Lorenzo Perez, Emilia P. Posadas and her minor
children assigned all their right, interest and participation in Lot No. 802 to Crispina
Perez (Annex B of the complaint). On December 30, 1959, Crispina Perez and her
children Rosita Aquitania Belmonte, Remedios Aquitania Misa, Manuel Aquitania,
Sergio Aquitania and Aurora Aquitania sold to Elena Pajimula, the remaining 2/3
western portion of Lot No. 802 with an area of 958 square meters (Annex C of the
complaint).
The action of the plaintiff is premised on the claim of co-ownership. From the deed
of sale executed in favor of the plaintiff, it can be seen that the 1/3 portion sold to
plaintiff is definitely identified as the 1/3 portion located on the southeastern part of
Lot No. 802 and specifically bounded on the north by De Guzman Street, on the
east by Posadas Street, on the south by Perez Street, and on the west by
remaining portion of the same lot, which contained an area of 640 square meters.
And in the deed of sale executed by Crispina Perez and her children in favor of
defendant Elena Pajimula over the remaining 2/3 portion of Lot No. 802, said
portion is identified as the western portion of Lot No. 802 which is bounded on the
north by De Guzman Street, on the east by properties of Leonarda Estoque, on the
south by the national road and on the west by Lots Nos. 799 and 801, containing
an area of 598 square meters.
The appellant's stand is that the deed in her favor was inoperative to convey the
southeastern third of Lot 802 of the Rosario Cadastre notwithstanding the
description in the deed itself, for the reason that the vendor, being a mere co-
owner, had no right to sell any definite portion of the land held in common but
could only transmit her undivided share, since the specific portion corresponding to
the selling co-owner is not known until partition takes place (Lopez vs. Ilustre, 5
Phil. 567; Ramirez vs. Bautista, 14 Phil. 528). From this premise, the appellant
argues that the sale in her favor, although describing a definite area, should be
construed as having conveyed only the undivided 1/3 interest in Lot 802 owned at
the time by the vendor, Crispina Perez Vda. de Aquitania. Wherefore, when the
next day said vendor acquired the 2/3 interest of her two other co-owners, Lot 802
became the common property of appellant and Crispina Perez. Therefore,
appellant argues, when Crispina sold the rest of the property to appellee Pajimula
spouses, the former was selling an undivided 2/3 that appellant, as co-owner, was
entitled to redeem, pursuant to Article 1620 of the New Civil Code.
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.
The lower court, upon motion of defendant, dismissed the complaint, holding that
the deeds of sale show that the lot acquired by plaintiff Estoque was different from
that of the defendants Pajimula; hence they never became co-owners, and the
alleged right of legal redemption was not proper. Estoque appealed.

We find no error in the order of dismissal, for the facts pleaded negate the claim
that appellant Estoque ever became a co-owner of appellees Pajimula.

(1) The deed of sale to Estoque (Annex A of the complaint) clearly specifies the
object sold as the southeastern third portion of Lot 802 of the Rosario Cadastre,
with an area of 840 square meters, more or less. Granting that the seller, Crispina
Perez Vda. de Aquitania could not have sold this particular portion of the lot owned
in common by her and her two brothers, Lorenzo and Ricardo Perez, by no means
does it follow that she intended to sell to appellant Estoque her 1/3 undivided
interest in the lot forementioned. There is nothing in the deed of sale to justify such
inference. That the seller could have validly sold her one-third undivided interest to
appellant is no proof that she did choose to sell the same. Ab posse ad actu non
valet illatio.

(2) While on the date of the sale to Estoque (Annex A) said contract may have
been ineffective, for lack of power in the vendor to sell the specific portion
described in the deed, the transaction was validated and became fully effective
when the next day (October 29, 1951) the vendor, Crispina Perez, acquired the
entire interest of her remaining co-owners (Annex B) and thereby became the sole
owner of Lot No. 802 of the Rosario Cadastral survey (Llacer vs. Muñoz, 12 Phil.
328). Article 1434 of the Civil Code of the Philippines clearly prescribes that — .

When a person who is not the owner of a thing sells or alienates and delivers it,
and later the seller or grantor acquires title thereto, such title passes by operation
of law to the buyer or grantee."

Pursuant to this rule, appellant Estoque became the actual owner of the
southeastern third of lot 802 on October 29, 1951. Wherefore, she never acquired
an undivided interest in lot 802. And when eight years later Crispina Perez sold to
the appellees Pajimula the western two-thirds of the same lot, appellant did not
acquire a right to redeem the property thus sold, since their respective portions
were distinct and separate.

IN VIEW OF THE FOREGOING, the appealed order of dismissal is affirmed. Costs

against appellant Estoque.1äwphï1.ñët