FIRST DIVISION

SPS. ALBERTO and JOCELYN

AZANA,
Petitioners,

G.R. No. 157593

Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA and
GARCIA, JJ.

- versus-

CRISTOPHER LUMBO and

ELIZABETH LUMBO-JIMENEZ,
Respondents.

Promulgated:
March 22, 2007

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DECISION
CORONA, J.:
In this appeal by certiorari, spouses Alberto and Jocelyn Azana assail the
decision[1] dated September 17, 2002 and resolution[2] dated March 12, 2003 of the
Court of Appeals (CA) in CA-G.R. CV No. 60973. After a re-evaluation of the
evidence on record, the appellate court held that the trial courts factual findings
were contrary to the evidence presented and, on that basis, reversed the latters
ruling.
Originally, respondents filed an action for quieting of title [3] in the Regional
Trial Court (RTC) of Kalibo, Aklan. The subject matter of the action was a piece of
real property located in the island of Boracay, a prime tourist destination. It was

designated as Lot 64 during the national reservation survey of Boracay on April 14,
1976.
Respondents alleged that they were the owners of Lot 64. They claimed
that, in a deed of absolute sale dated December 1, 1996, the spouses Emilio and
Estela Gregorio sold Lot 64 to petitioners. This cast a cloud over their title.
To support their claim of ownership, respondents stated that Lot 64 was
originally part of the 8.0488-hectare land bought in a public auction by their
parents, which they inherited entirely; that such sale in the public auction was
evidenced by a final bill of sale dated September 18, 1939; that Lot 64 was
separately designated during the national reservation survey only because it was
also being claimed by the spouses Gregorio; and that, if Lots 63 and 64 were
combined, the boundaries of the resulting lot coincided with the boundaries of the
lot purchased under the final bill of sale.
For their part, petitioners claim that they purchased Lot 64 from the spouses
Gregorio in good faith; that the spouses Gregorio became the lawful owners of Lot
64 by virtue of a deed of absolute sale dated March 25, 1976 executed by Ignacio
Bandiola in favor of Estela Gregorio whereby Bandiola transferred to Gregorio a
parcel of land with an area of 3.4768 hectares; and that Lot 64 was part of this
3.4768-hectare land.
According to the RTC of Kalibo, Aklan, respondents failed to establish the
identity of the lot sold under the final bill of sale. Consequently, their claim of title
over Lot 64 also had to fail. In the words of the court a quo:
Assaying the evidence presented by the parties in relation to their
respective submissions, the Court noted that the land acquired by

[respondents] parents at the public auction is not solely bounded on the

North and East by [the] Visayan Sea, but also by Anunciacion Gelito and
Guillermo Sualog, respectively. Indeed, [respondents] own survey plan
discloses that Lots 63 and 64 [are] bounded by Lot 62 and seashore.
Hence, it is not clear that the land acquired by [respondents]
parents at an auction sale includes Lot 64. The Court could probably
sustain [respondents] theory if the said land is solely bounded on the
North and East by [the] Visayan Sea or seashore. There would be no
space for any intervening lot.[4] (citations omitted)

Finding equiponderance of evidence[5], the trial court ruled in favor of petitioners

and upheld the validity of the sale of Lot 64 to them.
On review, the CA arrived at a different conclusion. It declared respondents
as owners of Lot 64 and nullified the sale by the spouses Gregorio to petitioners.
The appellate court agreed with respondents that Lot 64 was part of the 8.0488hectare property described in the final bill of sale. As opposed to the findings of the
trial court, the appellate court was satisfied that the boundaries of the lot resulting
from the merger of Lots 63 and 64 coincided with the boundaries of the 8.0488
hectare property. Moreover, the CA noted that the areas of Lots 63 and 64 were
7.0300 hectares and 1.2012 hectares respectively, meaning that the area resulting
from the combination of the two lots was equivalent to 8.0000 hectares, more or
less, which [was] the total area being claimed by the [respondents].[6]
Aggrieved, the spouses Gregorio and the spouses Azana filed in this Court
separate petitions for review on certiorari under Rule 45 of the Rules of Court. The
petitions were separately docketed as G.R. No. 157617 [7] and G.R. No. 157593,
respectively. The Court instantly denied both petitions for essentially raising
questions of fact which are generally beyond our review.

Thereafter, both the Gregorios and petitioners filed their respective motions
for reconsideration. The Court denied the MR[8] of the spouses Gregorio, in effect
denying G.R. No. 157617 with finality.
Meanwhile, the MR of the spouses Azana was granted. As a general rule, it
is not the Supreme Courts function to review, examine and evaluate or weigh the
probative value of the evidence presented.[9] The factual findings of the trial and
appellate courts are binding on this Court and are given great weight and respect.
[10]

However, the rule is not absolute. In instances where there is divergence in the

findings and conclusions of the trial court, on one hand, and the appellate court, on
the other, the Court may give the petition due course and re-examine the evidence
on record.[11] Satisfied that the foregoing exception applies to this case, the Court
ordered the reinstatement of G.R. No. 157593 (this petition).
Respondents oppose the petition on the ground that it is already barred by
prior judgment. They argue that the dismissal of the Gregorios petition (G.R. No.
157617) was a final judgment constituting a bar to the institution of a similar
petition.
Respondents position is incorrect. Res judicata calls for the concurrence of
the following requisites: (1) there is final judgment or order; (2) the court rendering
it has jurisdiction over the subject matter and the parties; (3) the judgment or order
is on the merits and (4) there is, between the two cases, identity of parties, subject
matter and causes of action.[12] Here, the first requisite is absent. The Courts
resolution denying the spouses Gregorios petition is not the final judgment
contemplated by the first requisite. Rather, final judgment entails a decision

which perpetually settles the controversy and lays to rest all questions raised. At
that point, there was no final judgment because the spouses Azanas appeal of the
CA decision was still pending before us. Stated differently, there was yet no final
judgment which could be entered and executed.
We now proceed to consider the documents relied upon by the parties.
To prove their claim, petitioners submitted a deed of absolute sale of real
property[13] dated March 25, 1976 to show that Ignacio Bandiola sold to Estela
Gregorio 3.4768 hectares of land located in Manoc-Manoc, Malay, Aklan. The
property was particularly described as follows:
THE PORTION SOLD CONSISTS of 3.4768 hectares, more or
less, located at the southern side of the whole parcel and with the
following pertinent boundaries: on the North by Visayan Sea and Ernesto
Bandiola; on the East by Visayan Sea; on the South by Felicitas Lumbo,
D. Pelayo, and D. Magapi; and on the West by Teodorica Bandiola. [14]

They also presented the corresponding tax declaration[15] which reiterated the same
property boundaries.
Petitioners point out that a portion of this property was separately declared
for realty tax purposes under ARP/TD No. 93-011-1020/1021 as Lot 64 with an
area of 1.48 hectares.[16] The tax declaration indicated that the boundaries of Lot 64
were:
North: Visayan Sea
West: lot 99-pt

South: Lot 63
East: Visayan Sea

In the hope of strengthening their case, petitioners narrated the supposed

origin of the disputed property. They claimed that the 3.4768-hectare property was
taken from the consolidated lots owned by Ignacio Bandiola, i.e., three contiguous
parcels of land with individual areas of 8.7766 hectares, 6550 square-meters and
4994 square-meters.[17]From this land mass, Ignacio Bandiola carved out 3.4768
hectares and sold the same to Estela Gregorio. Allegedly, this portion included Lot
64 which Estela Gregorio, in turn, sold to petitioners.
Granting for the sake of argument that petitioners preceding allegations are
true, it follows that Ignacio Bandiolas lots, if taken as one, must have extended to
the Visayan Sea in the east to have roped in Lot 64. It also follows that at least one
of the lots should have the Visayan Sea as its eastern boundary. However, this
conclusion is belied by the tax declarations petitioners themselves presented. Not
one of the tax declarations stated that any of Bandiolas lots was bound in the east
by the Visayan Sea. On the contrary, allthe tax declarations stated that each of the
lots was bound in the east by a particular land mass:
Tax Declaration No. 3066
Land Area:
Boundaries:

8.7766 hectares
North Visayan Sea
East Lorenzo Lumbo,
Vanancio Maming
West Conchita Tirol, Visayan Sea
South Moises Pelayo, Paula Gelito[18]

Tax Declaration No. 3087

Land Area:
Boundaries:

0.6550 hectare
North Visayan Sea
East Felicitas Alag de Lumbo
West Felicitas Alag de Lumbo

South Quirica Lumbo[19]

Tax Declaration No. 3068
Land Area:
Boundaries:

0.4994 hectare
North Ignacio Bandiola
East Anunciacion Gelito and
F.A. Lumbo
West Ignacio Bandiola
South Gertrudes Casimero &
Salvador Magapi[20]

Petitioners strained to explain the discrepancy by pointing out that Lot 64

was but a mere portion of the three parcels of land covered by the [three] tax
declarations. xxx. It [was] therefore, quite unlikely that Lot 64 would have the
exact same boundaries as any or all of these [three] parcels.[21]
We find their explanation wanting. If, indeed, Lot 64 was part of Ignacio
Bandiolas mass of properties it would have been in its south-east corner,
occupying part of its southern and eastern perimeter. [22] Therefore, the parcels of
land covered by the three tax declarations must reflect southern and/or eastern
boundaries similar to those of Lot 64. But, as explained earlier, none of the lots
was enclosed or partly enclosed in the east by the sea. It is highly unlikely that the
corner portion of the mother property would not have similar boundaries as those
of the latter on at least two sides.
The Court is not inclined to pronounce which of the documents presented by
petitioners is true and correct. It is enough to say that the evidence they presented
cast doubt on the validity of their claim. Petitioners failed to establish, by
preponderance of evidence, the exact perimeters of the land which they claim as
their own.

On the other hand, respondents anchor their claim over Lot 64 on a final bill
of sale[23] dated September 18, 1939. Apparently, the document was executed in
favor of Lorenzo and Felicitas Lumbo who bought an 8.0488-hectare property in a
public auction. It stated:
That on September 30, 1937, the real property under Tax
Declaration No. 6523 was forfeited to the Government in the manner and
form prescribed by Act 3995 known as the Assessment Law, for nonpayment of land taxes corresponding to the years 1931 to 1937,
inclusive, the description of which follows:
A parcel of cocal land situated in the barrio of
Manocmanoc, municipality of Buruanga, province of
Capiz, Philippines, having an area of 80, 488 square meters
more or less. Bounded on the North by Visayan Sea; on the
East by the property of Guillermo Sualog and Visayan Sea;
on the South by the property of Moises Pelayo; and on the
West by the properties of Venancio Maming and Lucino
Gelito, and assessed at P1040.00. x x x.[24]

The trial court discredited the final bill of sale by highlighting the fact that
the property bought at the public auction was not solely bound on the north and
east by the Visayan Sea but also by the properties of Anuncion Gelito and
Guillermo Sualog, respectively. With this, the trial court deduced that there was an
intervening space which should not have been there if the lot referred to in the
document included Lot 64. Thus, the final bill of sale must pertain to a different
parcel of land.
We find the trial courts conclusion inaccurate. The Gelito and Sualog
properties were not located between the Visayan Sea and the disputed property.
Otherwise, the tax declarations and final bill of sale would have indicated that the

Lumbo property was solely bound in the north by the Gelito property and in the
east by the Sualog property. A cursory look at the survey map [25] reveals that the
perimeter of the Lumbo property ran along the Visayan Sea and Gelitos property
in the north, and the Visayan Sea and Sualogs property in the east. Naturally, the
tax declarations and final bill of sale included the two properties mentioned as part
of the boundaries of the Lumbo property.
Petitioners underscore the seeming irregularities in the description of the
property under the final bill of sale, a deed of sale dated May 20, 1939 and the tax
declarations for the years 1991 and 1993 in the names of respondents. They posit
that these irregularities negate respondents claim of legal or equitable title and
ultimately justify the resolution of the case in their favor.
A deed of absolute sale[26] was executed on May 20, 1939 between Pantaleon
Maming and the respondents parents, stipulating the sale to the Lumbos of an
approximate area of [five hectares], being a part of the land under Tax No. 6523 in
the name of Pantaleon Maming.[27] Petitioners emphasize the fact that the
property sold under the final bill of sale was the same lot under Tax Declaration
No. 6523. This discrepancy supposedly blurred the identification of the property
claimed by respondents.
We disagree.
The CA sufficiently reconciled the difference in the land areas in the two
deeds:
xxx. It may be asked why there were two deeds of sale covering
the same property. We find credence in [respondents] explanation. The
public auction was held on 13 September 1938 and therefore Pantaleon
Maming had up to 13 September 1939 to redeem the property. Before
the expiration of the period of redemption, Lorenzo Lumbo bought [five]
hectares of the [eight]-hectare property in an attempt, as [respondents]

put it, to persuade Maming not to redeem the property. This can be
inferred from the price of P500.00 he paid for the [five] hectares while in
the auction sale held, he bought the entire 8.0488 hectares for
only P56.78. xxx.[28]

Next, petitioners highlight the tax declarations filed by respondents for the
years 1991[29] and 1993[30] covering Lot 63 only. In the absence of contrary
evidence, tax declarations, being official documents, enjoy a presumption of truth
as to their contents. Petitioners contend that, unlike them, respondents never
actually declared Lot 64 as theirs and cannot therefore claim ownership of the
property.
Jurisprudence is consistent that tax declarations are not conclusive evidence
of ownership of the properties stated therein. [31] A disclaimer is even printed on
their face that they are issued only in connection with real property taxation [and]
should not be considered as title to the property. At best, tax declarations are
an indicia of possession in the concept of an owner.[32] However, non-declaration of
a property for tax purposes does not necessarily negate ownership.[33]
From the foregoing, the fact that both tax declarations in the names of
respondents covered Lot 63 only did not necessarily mean they did not own Lot 64
as they were in fact able to present a document evidencing ownership of both
properties the final bill of sale.
Clearly, respondents have been able to establish by preponderance of
evidence that they are the rightful owners of Lot 64.
When an owner of real property is disturbed in any way in his rights over the
property by the unfounded claim of others, he may bring an action for quieting of

title. The purpose of the action is to remove the cloud on his title created by any
instrument, record, encumbrance or proceeding which is apparently valid or
effective but is in truth and in fact invalid and prejudicial to his title.[34]
Here, the deeds of sale executed in favor of petitioners and the spouses
Gregorio were prima facie valid and enforceable. However, further scrutiny and
investigation established that petitioners predecessor-in-interest, Ignacio Bandiola,
could not have owned the disputed lot. Consequently, the subsequent conveyances
of Lot 64 to the spouses Gregorio and thereafter, to petitioners, were null and void.
Therefore, respondents, as the adjudged owners of Lot 64, are entitled to have the
aforementioned deeds of sale nullified to remove any doubt regarding their
ownership of the lot.
While the appellate court adequately explained its decision, it failed to
categorically declare the deeds of sale as null and void in its dispositive portion.
Since it is the dispositive portion of the decision which shall be carried out, it is
important that the status of the deeds of sale be clearly stated therein.
WHEREFORE, the petition is hereby DENIED. The decision dated
September 17, 2002 and resolution dated March 12, 2003 of the Court of Appeals
are AFFIRMEDwith the MODIFICATION that the deed of absolute sale dated
March 25, 1976, in so far as it covers Lot 64, and the deed of absolute sale dated
December 1, 1996 are hereby declared null and void.
Costs against petitioners.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 70191 October 29, 1987
RODOLFO L. CORONEL, petitioner,
vs.
HONORABLE INTERMEDIATE APPELLATE COURT and ELIAS MERLAN, BRIGIDO
MERLAN, JOSE MERLAN, TEODORICO NOSTRATIS, SEVERO JECIEL SANTIAGO
FERNAN and FORTUNATO OCAMPO, respondents.

GUTIERREZ, JR., J.:

This is a petition to review the decision of the then Intermediate Appellate Court, now
the Court of Appeals, which affirmed the decision and order of the then Court of First
Instance of Cavite in Civil Case No. 651. The dispositive portion of the trial court's
decision reads:
WHEREFORE, in the interest of moral justice, judgment is hereby
rendered in favor of all the defendants and intervenor; hereby
DISMISSING the complaint; however, the Court hereby orders instead the
immediate partition of the land, subject-matter on this case, without
prejudice to the plaintiff, and in accordance with the express but undivided
apportionments corresponding to the original co-ownership, and pursuant
to Transfer Certificate of Title No. T-1444 (EXHIBIT 4-b) of the Registry of
Deeds for the Province of Cavite, as entered on May 19, 1960;
Hereby declaring null and void, Transfer Certificate of Title No, T-75543 of
the same registry.
Without pronouncements as to costs. (At p. 71, Record on Appeal)
The dispositive portion of the questioned order of the trial court reads.
WHEREFORE, under our present alternatives, as prayed for by
defendants and Intervenor, through Lawyer Eleuterio A. Beltran, in their

present incident recorded on January 10, 1980; the Decision subject

matter hereof is amended in the following significance:
Plaintiff Rodolfo Coronel is further ordered to submit a complete Inventory
and Accounting of all the harvests of palay produced from the parcel of
land (Lot 1950-A) subject matter of the present litigation, and to deliver the
corresponding shares to the defendants and intervenors correlated with all
the harvests of palay done by the plaintiffs; considering the unrebutted
finality of the testimony of defendant Brigido Merian in congruence with his
supplication for the Inventory and Accounting of all the palay gathered by
plaintiff Radolfo Coronel who is likewise ordered, finally, to pay Iawyer
Eleuterio Beltran as counsel for defendants and intervenors, Four
Thousand (P400000) Pesos for his professional services.
Naic, Cavite, February 13, 1980. (pp. 88-89, Record on Appeal).
Petitioner Rodolfo Coronel filed a complaint for recovery of possession of a parcel of
land registered under his name (Transfer Certificate of Title No. T-75543 in the Registry
of Deeds for the Province of Cavite) and more particularly described as follows:
A parcel of land (lot 1950-A of the subdivision plan (LRC) Psd-104544
being a portion of Lot 1950, Naic, Estate, LRC Rec. No. 8340), situated in
the Municipality of Naic, Province of Cavite, Island of Luzon. Bounded on
the NE., pts. 12 to 14 by Irrigation Ditch; on the SE and SW pts. 14 to 15
and 15 to 1 by Lot 1950-D of the subdivision plan; on the SW pts. 1 to 2 by
lot 2304, and pts. 2 to 11 by Lot 1951, both of Naic, Estate; and on the NW
pts. 11 to 12 by Road. ... ; containing an area of TWELVE THOUSAND
ONE HUNDRED EIGHTY NINE (12,189) SQUARE METERS, more or
less. ... (p. 10, Record on Appeal)
The complaint docketed as Civil Case No. 651 was filed against the private respondents
Elias Merlan, Brigido Merlan, Jose Merlan, Teodorico Nostrates, Severo Jeciel Santiago
Fernan and Fortunato Ocampo before the then Court of First Instance of Cavite.
Coronel alleged in his complaint that at the time he purchased the subject parcel of
land, the defendants (private respondents herein) were already occupying a portion
thereof as "tenants at will" and that despite demands to vacate the premises, the
defendants failed and refused to move out from the land.
In their Answer with Counterclaim and With Third-Party Complaint, the defendants
denied that Coronel was the owner of the whole parcel of land and alleged that the lots

occupied by them form part of a 1/3 undivided share of brothers Brigido Merlan and
Jose Merlan which they inherited from their deceased father Gabriel Merlan, one of the
three heirs of Bernabela Lontoc, the original owner of Lot No. 1950-A of the Naic Estate;
that the Merlan brothers together with their two brothers and a sister never sold their
undivided 1/3 share of the lot to anybody; that it was actually their other co-heirs who
sold their undivided portions and that the plaintiff's claim of ownership of the whole
parcel of land, if ever it has basis, is fraudulent, void, and without effect; that the
Merlans have always been in open and peaceful possession of their undivided share of
the lot throughout the years from the first sale by their co-heirs of Lot No. 1950-A in
1950; and that the other defendants were legitimate tenants. They prayed that the
plaintiff respect their rights over 1/3 (4,063 square meters) of Lot No. 1950-A of the Naic
Estate,
In their Third-Party Complaint, the defendants charged that the third-party defendants,
owners of the remaining portion of Lot No. 1950-A, defrauded them when they sold the
entire parcel.
Third-Party Defendants Marcelo Novelo, Paz Anuat Daniel Anuat and Rosario Cailao
the defendants' co-owners of Lot No. 1950-A denied that they had something to do with
the fraudulent acts or illegal machinations which deprived the defendants of their share
in the subject parcel of land, and that what they sold was only their 2/3 undivided shares
in said parcel. They also filed a cross-claim against their co-defendant Mariano Manalo
whom they charged might have connived with others Including the plaintiff to deprive
the defendants and their co-heirs of their share in the subject parcel of land.
As stated earlier, the lower court ruled in favor of the defendants and on appeal, the
lower court's decision was affirmed with the following modification by the then
Intermediate Appellate Court, to wit:
WHEREFORE, PREMISES CONSIDERED, there being no reversible
error in the main decision appealed from dated December 7, 1979, and
the Order of the Court dated February 13, 1980, the same are hereby
AFFIRMED with the modification that after the word "intervenor" in the
main decision, the following shall be inserted:
l) Declaring them as the absolute owners of the remaining 1 1/3 of the 2/8
portion pertaining to the late Bernabela Lontoc, nameIy, Lot 1950-A of the
Naic Estate pursuant to Art. 845 of the New Civil Code. (At p. 29.)
The petitioner states that the appellate court erred as follows:

I
THAT THE HONORABLE INTERMEDIATE APPELLATE COURT HAS
ERRED IN NOT CONSIDERING THAT THE CLAIM OF PRIVATE
RESPONDENTS TO THE LAND IN QUESTION HAS BEEN BARRED BY
THE STATUTE OF LIMITATION OR BY ESTOPPEL BY LACHES.
II
THAT THE HONORABLE INTERMEDIATE APPELLATE COURT HAS
ERRED IN NOT CONSIDERING PETITIONER AS A PURCHASER IN
GOOD FAITH AND FOR VALUABLE CONSIDERATION OF THE LAND IN
QUESTION.
III
THAT THE HONORABLE INTERMEDIATE APPELLATE COURT HAS
ERRED IN DECLARING AS NULL AND VOID TRANSFER CERTIFICATE
OF TITLE NO. T-75543 OF THE REGISTRY OF DEEDS OF CAVITE
WHICH IS ALREADY PACEL IN THE NAME OF PETITIONER. (at pp.1-2
Brief for the Petitioners)
The records show that the 12,189 square meter lot was part of a 48,755 square meter
lot covered by Transfer Certificate of Title No. 3116 (RT-5010) of the Naic Estate located
at Muzon, Naic, Cavite in the names of the spouses Valentin Gutierrez and Eligia
Mangahas with a calculated portion of 2/8; spouses Jose Perea and Celestia Naces
with a calculated portion of 3/8; Josefa Nazareno with a calculated portion of 1/8 and
Bernabela Lontoc with a calculated portion of 2/8. In dispute in the instant case is the
2/8 share of Bernabela Lontoc which is equivalent to 12,189 square meters.
When Lontoc died in 1945, she was survived by three sets of heirs: 1) Bernardino
Merlan, a grandson by her son Enrique Merlan who died in 1918; 2) Jose Merlan and
Brigido Merlan, defendants in the case below and private respondents herein, Graciano
Merlan, Agapito Merlan and Corazon Merlan, children of her son Gabriel who died in
1937; and 3) Daniel Anuat and Paz Anuat children of her daughter Francisca Merlan.
In 1950, Bernardino Merlan, Daniel Anuat and Paz Anuat sold their 2/3 undivided
portion of the lot to spouses Ignacio Manalo and Marcela Nobelo.
In 1960, Transfer Certificate of Title No. (T-3116) RT-5010 was cancelled by Transfer
Certificate of Title No. T-1444 but carried the same afore-specified registered co-owners
with an annotation carried from the former Transfer Certificate of Title, to wit:

"Entry No. 4953-SALE in favor of IGNACIO MANALO, married to Marcela

Nobelo covering the rights, interest and participation of Bernardino
Merlan, married to Rosario Cailao DANIEL ANUAT married to Dionisia
Loyola, and PAZ ANUAT widow, on the share of BERNABELA LONTOC,
consisting of twenty 20 gantas of seedling, on the land described in this
Certificate of for the sum of THREE THOUSAND PESOS (P3,000.00) by
virtue of the deed of sale, executed before the Notary Public for the City of
Cavite Mr. Primo D. Anuat (Doc. No. 652; page No. 77; Book No. VII
Series of 1950) on file in this Registry.
Date of Instrument March 11, 1950.
Date of Inscription March 13, 1950 at 2:35 p.m. (At pp. 23, Court of
Appeals Decision; pp. 18-19, Rollo)
In 1968, Lot No. 1950 of the Naic Estate was subdivided according to a Sketch Plan
(Exh. A). The sketch plan was approved by the Commission on Land Registration on
August 15, 1969. Bernabela Lontoc's 2/8 portion of Lot No. 1950 became Lot No. 1950A with an area of 12,189 square meters.
Sometime in 1970, Ignacio Manalo sold his interest in Lot 1950-A to Mariano Manalo.
The pertinent portions of the deed of sale executed by spouses Ignacio Manalo and
Marcela Nobelo in favor of spouses Mariano Manalo and Jorga Manalo states:
Ang pagkamayari namin ng bahaging binabanggit sa itaas nito ay
natatalikod ng titulo big. T-3116 na gaya ng sumusunod:
(Entry No. 4953-SALE In favor of IGNACIO MANALO married to
MARCELA NOVELO covering the rights, interests and participations of
BERNADINO MERLAN married to ROSARIO CAILAO DANIEL ANUAT
'married to DIONISIA LOYOLA, and PAZ ANUAT widow, on the share of
BERNABELA LONTOC, consisting of twenty (20) gantas of seedling, on
the land described in this certificate of title of the sum of THREE
THOUSAND PESOS (P3,000.00), by virtue of the deed of sale executed
before the Notary Public for the City and Prov. of Cavite Mr. Primo D.
Anuat (Doc. No. 652; Page No. 77; Book No. VII, Series of 1950) on file in
this Registry. Date of instrument-March 13, 1950-at 2:35 p.m. (sgd)
ESCOLASTICO CUEVAS, Register of Deeds.
Na alang-alang sa halagang ISANG LIBONG P1.000.00 PISO salaping
(blurred), na sa amin ay ibinayad ni G. MARIANO MANALO kasal kay

JORGA MANALO may sapat na gulang, Filipino at ang tirahan at

pahatirang sulat ay (blurred) Cavite, ay aming ipinagbili ng tuluyan (Venta
Real y Absoluta) ang nabanggit na DALAWANG PUNG (20) salop na
binhi, bahagi ng Lote blg. 1950 (blurred) tiyak sa lote na unahan nito sa
naturang G. Mariano Manalo, sa kanyang tagamana o kahaliti sa matuwid
magpakailan man. Dito'y sinasaysay rin namin ang nasabing lupang
tubigan ay walang sinasagutang pagkakautang kanino mang tao. (pp. 2526, Rollo)
The deed of sale was registered in the Registry of Deeds in Cavite. Thereafter, Transfer
Certificate of Title No. T-1444 was cancelled and Transfer Certificate of Title No. T41175 was issued for Lot No. 1950-A of the Naic Estate in the name of Mariano Manalo
married to Jorga Lagos of Naic, Cavite. The certificate of title issued in the name of
spouses Mariano Manalo and Jorga Lagos covered the whole Lot No. 1950-A without
any mention of the 1/3 share of the private respondents in the parcel of land which was
not sold to them.
Relying on the transfer certificate of title of the spouses Mariano Manalo and Jorga
Lagos and the Sketch Plan (Exhibit "A"), petitioner Rodolfo Coronel then bought Lot No.
1950-A of the Naic Estate from the former for the consideration of P27,000.00 as per
Doc. No. 341; Page No. 70; Book No. V Series of 1974 in the Notarial Register of
Notary Public Nonilo A. Quitangon of the City of Manila. The deed of sale was
registered on December 19, 1974 causing the cancellation of Transfer Certificate of Title
No. T-41175 and the issuance of Transfer Certificate of Title No. T-75543 in the name of
petitioner Rodolfo Coronel.
Considering these facts, it is evident that the private respondents never sold their 1/3
share over Lot No. 1950-A of the Naic Estate; that what their co-owners sold to Ignacio
Manalo was their 2/3 share of the same lot; and that Ignacio Manalo sold only the 2/3
share to third-party defendant Mariano Manalo, the predecessor-in-interest of petitioner
Rodolfo Coronel. Consequently, there was a mistake when Transfer Certificate of Title
No. 41175 was issued to Mariano Manalo covering the whole area of Lot No. 1950-A.
Unfortunately, Mariano Manalo who was included as third-party defendant as well as the
subject of a cross- claim filed by the other third-party defendants, and who could have
shed light on this controversy was at the time residing abroad and was not served with
the third-party complaint.
Moreover, private respondents Brigido Merlan and Jose Merlan were in open, peaceful
and adverse possession of their 1/3 share over the lot even after 1950 when the first
sale of the lot took place. The first time they knew about Coronel's claim over the whole
lot was when they were served a copy of his complaint in 1975.

Under these circumstances, the first assignment of error is not well taken.
The petitioner contends that the claim of the private respondents over their 1/3
undivided portion of Lot No. 1950-A 25 years after the registration of the deed of sale in
favor of Ignacio Manalo in 1950 and more than five (5) years after the registration of the
deed of sale in favor of Mariano Manalo is barred by prescription or laches. According to
him, there was undue delay on the part of the private respondents to claim their 1/3
portion of Lot No. 1950-A of the Naic Estate and that the action for annulment should
have been brought within four (4) years (Art. 1391, New Civil Code) counted from the
date of the registration of the instrument.
The counterclaim of the private respondents which was in effect a reconveyance to
them of their 1/3 undivided share over lot No. 1950-A has not prescribed. As lawful
possessors and owners of the lot in question their cause of action falls within the settled
jurisprudence that an action to quiet title to property-in one's possession is
imprescriptible, Their undisturbed possession over a period of more than 25 years gave
them a continuing right to seek the aid of a court of equity to determine the nature of the
adverse claim of a third party and the effect of his own title. If at all, the private
respondents' right, to quiet title, to seek reconveyance and to annul Transfer Certificate
of Title No. T-75543 accrued only in 1975 when they were made aware of a claim
adverse to their own. It was only at that time that, the statutory period of prescription
may be said to have commenced to run against them. (Sapto, et al. v. Fabiana, 103
Phil. 683, Faja v. Court of Appeals, 75 SCRA 441; Caragay-Layno v. Court of Appeals,
133 SCRA 718).
In the same manner, there is no bar based on laches to assert their right over 1/3 of the
disputed property. "Laches has been defined as the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by exercising due
diligence could or should have been done earlier; it is negligence or omission to assert
a right within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it." (Tejido v. Zamacoma, 138
SCRA 78 citing Tijam et al. v. Sibong-hanoy et al., 23 SCRA 29, Sotto v Teves, S6
SCRA 154) The facts of the case show that the private respondents have always been
in peaceful possession of the 1/3 portion of the subject lot, exercising ownership thereto
for more than 25 years disrupted only in 1975 when the petitioner tried to remove them
by virtue of his torrens title covering the entire Lot 1950-A of the Naic Estate. It was only
at this point that private respondents knew about the supposed sale of their 1/3 portion
of Lot 1950-A of the Naic Estate and they immediately resisted.
The petitioner, however, insists that he is a purchaser in good faith. Thus, he argues
that Transfer Certificate of Title No. T-41175 in the name of his successor-in-interest

Mariano Manalo was very clear to the effect that there is no lien or encumbrance stated
therein which could have been seen by his parents who represented him in the sale as
he was then in the United States and by the lawyer contracted by him to execute or
prepare the corresponding deed of sale.
This notwithstanding, we cannot close our eyes to the fact that neither the private
respondents nor their co-owners of the subject parcel of land sold the former's share of
the lot. Furthermore, even Ignacio Manalo to whom the third-party defendants sold their
share resold only the 2/3 shares to Mariano Manalo, the successor-in-interest of the
petitioner. Whether or not there was fraud or just a mistake or oversight of an employee
of the Register of Deeds of Cavite is not clear from the records. The point is that the 1/3
undivided portion of the private respondents over Lot No. 1950-A was mistakenly
included in the transfer certificate of title of Mariano Manalo.
We apply equitable considerations:
Nor does the mere fact that respondent-appellee Marcelo Coral could
show a certificate of Torrens Title in his favor conclude the matter, the
question of fraud having been seasonably raised and the remedy of
reconveyance sought. Only recently, in Philippine Commercial and
Industrial Bank v. Villalva (L-28194, November 24, 1972, 48 SCRA 31) this
Court had occasion to state: There is, however, a countervailing doctrine,
certainly not of lesser weight, that mitigates the harshness of the iron-clad
application of the principle attaching full faith and credit to a Torrens
certificate. It is inspired by the highest concept of what is fair and what is
equitable. It would be a sad day for the law if it were to be oblivious to the
demands justice The acceptance accorded the Torrens system of
registration would certainly be impaired if it could be utilized to perpetrate
fraud and chicanery. If it were thus, then no stigma would attach to a claim
based solely on a narrow and literal reading of a statutory prescription,
devoid of any shadow of moral right. That is not the juridical norm as
recognized by this Court. Deceit is not to be countenanced; duplicity is not
to be rewarded. Witness the favor with which jurisprudence has looked on
the action for reconveyance as well as the recognition of the constructive
trust. There is thus the stress of rectitude. (Ibid, p. 39). (Monticenes v.
Court of Appeals, 53 SC RA 14, 21; Emphasis supplied).
Moreover, we ruled in an earlier case that:
xxx xxx xxx

... The simple possession of a certificate of title, under the Torrens System,
does not necessarily make the possessor a true owner of all the property
described therein. If a person obtains a title, under the Torrens system,
which includes by mistake or oversight land which cannot be registered
under the Torrens systems, he does not, by virtue of said certificate alone,
become the owner of the lands illegally included. (Ledesma v. Municipality
of Iloilo, 49 Phil. 769, 773, citing Legarda and Prieto v. Saleeby, 31 Phil.,
590; see also Caragay-Layno v. Court of Appeals, supra).
We find no reversible error on the part of the lower courts in recognizing the ownership
of the private respondents over 1/3 of Lot No. 1950-A of the Naic Estate. The petitioner
is bound to recognize the lien in favor of the private respondents which was mistakenly
excluded and therefore not inscribed in the torrens title of the land of his predecessorsin-interest.
WHEREFORE, the instant petition is hereby DISMISSED. The questioned decision is
AFFIRMED but with a modification to the effect that the statement "Hereby declaring
null and void, Transfer Certificate of Title No. T-75543 of the same registry" is deleted.
Instead, the Registrar of Deeds of Cavite is ordered to segregate the 1/3 portion of Lot
No. 1950-A of the Naic Estate (4,063 square meters) from the entire portion embraced
in Transfer Certificate of Title No. T-75543 and issue a new certificate of title in favor of
the heirs of Gabriel Merlan over the disputed one-third portion and another new
certificate of title over the remaining two-thirds portion of the land in favor of petitioner
Rodolfo Coronel after cancelling Transfer Certificate of Title No. T-75543. The
questioned order is also AFFIRMED. No costs.
Fernan, Bidin and Cortes, JJ., concur.
Feliciano, J., is on leave.

SECOND DIVISION

NARCISA AVILA, assisted by her

G.R. No. 141993

husband Bernardo Avila, Spouses

JANUARIO N. ADLAWAN and

Present:

NANETTE A. ADLAWAN,
NATIVIDAD MACAPAZ, assisted

PUNO, J., Chairperson,

by her husband EMILIO MACAPAZ,

SANDOVAL-GUTIERREZ,

FRANCISCA N. ADLAWAN

CORONA,

and LEON NEMEO,

AZCUNA, and
GARCIA, JJ.

Petitioners,

Spouses BENJAMIN BARABAT

and JOVITA BARABAT,
Respondents.

Promulgated:

March 17, 2006

x-------------------------------------------x

DECISION
CORONA, J.:

This petition for review on certiorari under Rule 45 of the

Rules of Court assails the July 30, 1999 decision [1] and January 19,
2000 resolution of the Court of Appeals in CA-G.R. CV No. 50899.
The subject of this controversy is a portion of a 433-square
meter parcel of land located in Poblacion, Toledo City, Cebu. The
entire property is designated as cadastral lot no. 348 registered in
the name of Anunciacion Bahena vda. de Nemeo. Upon her death,
ownership of the lot was transferred by operation of law to her five
children,

petitioners Narcisa Avila, Natividad Macapaz,

Francisca Adlawan, LeonNemeo and Jose Bahena. These heirs

built their respective houses on the lot.

In 1964, respondent Benjamin Barabat leased a portion of the

house owned by Avila. His co-respondent, Jovita Barabat, moved in
with him in 1969 when they got married.

Avila subsequently relocated to Cagayan de Oro City. She came

back to Toledo City in July 1979 to sell her house and share in the
lot to her siblings but no one showed interest in it. She then
offered it to respondents who agreed to buy it. Their agreement

was evidenced by a private document dated July 17, 1979 which

read:

ALANG SA KASAYURAN SA TANAN:

Nga ako, NARCISA AVILA, nagpuyo sa siyudad sa

Cagayan de Oro, 52 aos ang panu-igon, minyo ug may mga
anak magatimaan ning maong kasulatan nga akong guibaligya sa
kantidad nga walo ka libo ka pesos (P8,000.00) ang bahin nga
balay ug yuta nga sinunod ko sa akong mga ginikanan ngadto sa
magtiayon nga Benjamin ug Jovita Barabat, mga lumulupyo sa
siyudad sa Toledo.

Nga ang maong lote ug balay ana-a mahimutang sa Poblaci

on, Toledo City kansang mga utlanan mao kining musunod:

Atubangan

----------

Dapit sa Tuo ----------

N. Rafols Street
yuta ug mga panimalay sa Magsuong
Natividad

Macapaz,

Francisca

Adlawan,
Jose

Bahena

Nemeno
Dapit sa wala ----------

kanal sa tubig

ug

Leoning

Dapit sa luyo ---------- lote nga kumon sa magsuong

Nemeno

Tiniman-an:

(Sgd.)

Narcisa Avila[2]

Respondents stopped paying rentals to Avila and took

possession of the property as owners. They also assumed the
payment of realty taxes on it.

Sometime in early 1982, respondents were confronted by

petitioner Januario Adlawan who informed them that they had until
March 1982 only to stay in Avilas place because he was buying the
property. Respondents replied that the property had already been
sold to them by Avila. They showed Adlawan the July 17, 1979
document executed by Avila.

On January 6, 1983, respondents received a letter from

Atty. Joselito Alo informing them that Avila had sold her house and
share in lot no. 348 to his clients, the spouses Januario and
Nanette Adlawan. Considering the sale to the spouses Adlawan as
prejudicial to their title and peaceful possession of the property,

they demanded that Avila execute a public document evidencing the

sale of the property to them but Avila refused.

Respondents filed a complaint for quieting of title with the

Regional Trial Court (RTC) of Toledo City, Branch 29. [3] Docketed as
Civil Case No. T-53, the complaint was subsequently amended to
include annulment of the deed of sale to the spouses Adlawan,
specific performance, partition and damages as additional causes of
action. Respondents anchored their claim over the property to the
July 17, 1979 private document which they presented as Exhibit
A.

Avila denied having offered to sell her property to respondents.

She claimed that respondents gave her an P8,000 loan conditioned
on her signing a document constituting her house and share in lot
no. 348 as security for its payment. She alleged that she innocently
affixed her signature on Exhibit A which was prepared by
respondents and which they now claim as a private deed of sale
transferring ownership to them.

The trial court rendered its May 9, 1995 decision in favor of

respondents. It declared Exhibit A as a valid and lawful deed of
sale. It nullified the subsequent deed of sale between Avila and the
spouses Adlawan. Avila was ordered to execute a formal and

notarized deed of sale in favor of respondents. It also held

petitioners liable for moral damages and attorneys fees.

Aggrieved, petitioners filed an appeal with the Court of

Appeals. In its July 30, 1999 decision, the appellate court affirmed
the decision of the RTC in toto. Petitioners sought a reconsideration
but it was denied. Hence, this petition.

Petitioners claim that the appellate court erred in ruling that

the transaction between respondents and Avila was an absolute
sale, not an equitable mortgage. They assert that the facts of the
case fell within the ambit of Article 1602 in relation to Article 1604
of the Civil Code on equitable mortgage because they religiously
paid the realty tax on the property and there was gross
inadequacy of consideration. In this connection, Articles 1602
and 1604 provide:

Art. 1602. The contract shall be presumed to be an

equitable mortgage, in any of the following cases:

(1)

When the price of a sale with right to repurchase is

unusually inadequate;

(2)

When the vendor remains in possession as lessee

or otherwise;

(3)

When upon or after the expiration of the right to

repurchase another instrument extending the period
of redemption or granting a new period is executed;

(4)

When the purchaser retains for himself a part of the

purchase price;

(5)

When the vendor binds himself to pay the taxes of

the thing sold;

(6)

In any other case where it may be fairly inferred

that the real intention of the parties is that the
transaction shall secure the payment of a debt or the
performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other

benefit to be received by the vendee as rent or otherwise shall be
considered as interest which shall be subject to the usury laws.

xxx

xxx

xxx

Art. 1604. The provisions of Article 1602 shall also apply to

a contract purporting to be an absolute sale.

They also claim that the court erred in denying them the right
to redeem the property and in ruling that there was implied
partition by the acts of the parties.

We rule in favor of respondents.

For Articles 1602 and 1604 to apply, two requisites must

concur: (1) the parties entered into a contract denominated as a
contract of sale and (2) their intention was to secure an existing
debt by way of mortgage.[4] Here, both the trial and appellate courts
found that Exhibit A evidenced a contract of sale. They also agreed
that the circumstances of the case show that Avila intended her
agreement with respondents to be a sale. Both courts were
unanimous in finding that the subsequent acts of Avila revealed her
intention to absolutely convey the disputed property. It was only
after the perfection of the contract, when her siblings began
protesting the sale, that she wanted to change the agreement.
Furthermore, contrary to petitioners claim, the trial court
found that it was respondents who took over the payment of real
property taxes after the execution of Exhibit A. There is no reason
to depart from these factual findings because, as a rule, factual
findings of the trial court, when adopted and confirmed by the
Court of Appeals, are binding and conclusive on the Court and
generally will not be reviewed on appeal to us. [5] There is no reason
for us to deviate from this rule.

Petitioners claim of gross inadequacy of selling price has no

basis. They failed to introduce evidence of the correct price at the
time the land was sold to respondents in 1979. How can we

therefore conclude that the price was grossly inadequate? In

the absence of evidence as to the fair market value of a parcel of
land at the time of its sale, we cannot reasonably conclude that the
price at which it was sold was inadequate.[6]

Petitioners rely on Article 1623 in relation to Article 1620 of

the Civil Code to justify their right of redemption. This is incorrect.

These provisions state:

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 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.

xxx

xxx

xxx

Art. 1623. The right of legal pre-emption or redemption

shall not be exercised except within thirty days from the notice in
writing by the prospective vendor, or by the vendor, as the case
may be. The deed of sale shall not be recorded in the Registry of

Property, unless accompanied by an affidavit of the vendor that he

has given written notice thereof to all possible redemptioners.

The right of redemption of co-owners excludes that of

adjoining owners.

Petitioners right to redeem would have existed only had there

been co-ownership among petitioners-siblings. But there was
none. For this right to be exercised, co-ownership must exist at the
time the conveyance is made by a co-owner and the redemption is
demanded by the other co-owner or co-owner(s). [7] However, by their
own admission, petitioners were no longer co-owners when the
property was sold to respondents in 1979. The co-ownership had
already been extinguished by partition.

The regime of co-ownership exists when the ownership of an

undivided thing or right belongs to different persons. [8] By the
nature of co-ownership, a co-owner cannot point to any specific
portion of the property owned in common as his own because his
share in it remains intangible and ideal.[9]

Every act intended to put an end to indivision among coheirs is deemed to be a partition.[10] Here, the particular portions

pertaining to petitioners had been ascertained and they in fact

already took possession of their respective parts. The following
statement of petitioners in their amended answer [11] as one of their
special and affirmative defenses was revealing:

F-8. That all defendants [i.e., petitioners] in this case who

are co-owners of lot 348 have their own respective buildings
constructed on the said lot in which case it can be safely assumed
that that their respective shares in the lot have been
physically segregated although there is no formal partition of the
land among themselves.[12] (emphasis supplied)

Being an express judicial admission, it was conclusive on

petitioners unless it was made through palpable mistake or that no
such admission was in fact made.[13] Petitioners proved neither and
were therefore bound by it.

The purpose of partition is to separate, divide and assign a

thing held in common among those to whom it belongs. [14] By their
own admission, petitioners already segregated and took possession
of their respective shares in the lot. Their respective shares were
therefore physically determined, clearly identifiable and no longer
ideal. Thus, the co-ownership had been legally dissolved. With
that, petitioners right to redeem any part of the property from
any of their former co-owners was already extinguished. As legal
redemption is intended to minimize co-ownership, [15] once a property

is subdivided and distributed among the co-owners, the community

ceases to exist and there is no more reason to sustain any right of
legal redemption.[16]

Under the law, subject to certain conditions, owners of

adjoining urban land have the pre-emptive right to a lot before it is
sold to third parties, or the redemptive right if it has already been
sold. In particular, Article 1622 of the Civil Code provides:

Art. 1622. Whenever a piece of urban land is so small and

so situated in that a major portion thereof cannot be used for any
practical purpose within a reasonable time, having been bought
merely for speculation, is about to be re-sold, the owner of any
adjoining land has a right of pre-emption at a reasonable price.

If the re-sale has been perfected, the owner of the adjoining

land shall have a right of redemption, also at a reasonable price.

When two or more owners of adjoining lands wish to

exercise the rights of pre-emption or redemption, the owner
whose intended use of the land in question appears best justified
shall be preferred.

However, this provision does not apply here. Aside from the
fact that petitioners never raised it as an issue, the conditions

provided for its application were not met. While the property may be
considered as urban land, it was not shown or even alleged that its
area and location would render a major portion of no practical use
within a reasonable time. Neither was there any allegation to the
effect that the disputed property was bought merely for speculation.

WHEREFORE, the petition is hereby DENIED. The July 30,

1999 decision and January 19, 2000 resolution of the Court of
Appeals in CA-G.R. CV No. 50899 are AFFIRMED.

Costs against petitioners.

SO ORDERED.
G.R. No. 141993, March 17, 2006
CORONA, J. The subject of this controversy is a portion of a 433-square meter parcel of land located in
Poblacion, Toledo City, Cebu designated as cadastral lot no. 348 registered in the name of Anunciacion
Bahena vda. de Nemeo. Upon her death, ownership of the lot was transferred by operation of law to her
five children, petitioners Narcisa Avila, Natividad Macapaz, Francisca Adlawan, Leon Nemeo and Jose
Bahena. These heirs built their respective houses on the lot.
In 1964, respondent Benjamin Barabat leased a portion of the house owned by Avila. His co-respondent,
Jovita Barabat, moved in with him in 1969 when they got married.
In July 1979 Avila offered to sell her house and share in the lot to her siblings but no one showed interest in
it. She then offered it to respondent spouses who agreed to buy it. Their agreement was evidenced by a
private document dated July 17, 1979. Respondents stopped paying rentals to Avila and took possession of
the property as owners. They also assumed the payment of realty taxes on it.
On January 6, 1983, respondents received a letter from Atty. Joselito Alo informing them that Avila had sold
her house and share in lot no. 348 to his clients, the spouses Januario and Nanette Adlawan. Considering
the sale to the spouses Adlawan as prejudicial to their title and peaceful possession of the property, they
demanded that Avila execute a public document evidencing the sale of the property to them but Avila
refused.
Respondents filed a complaint for quieting of title with the RTC of Toledo City. The complaint was
subsequently amended to include annulment of the deed of sale to the spouses Adlawan, specific

performance, partition and damages as additional causes of action. Respondents anchored their claim over
the property to the July 17, 1979 private document which they presented as Exhibit A.
Avila denied having offered to sell her property to respondents. She claimed that respondents gave her
an P8,000 loan conditioned on her signing a document constituting her house and share in lot no. 348 as
security for its payment. She alleged that she innocently affixed her signature on Exhibit A which was
prepared by respondents and which they now claim as a private deed of sale transferring ownership to
them.
Both the RTC and CA It declared Exhibit A as a valid and lawful deed of sale. It nullified the subsequent
deed of sale between Avila and the spouses Adlawan. Avila was ordered to execute a formal and notarized
deed of sale in favor of respondents. It also held petitioners liable for moral damages and attorneys fees.

Petitioners claim that the appellate court erred in ruling that the transaction between respondents and Avila
was an absolute sale, not an equitable mortgage. They assert that the facts of the case fell within the ambit
of Article 1602 in relation to Article 1604 of the Civil Code on equitable mortgage because they religiously
paid the realty tax on the property and there was gross inadequacy of consideration.
They also claim that the court erred in denying them the right to redeem the property and in ruling that
there was implied partition by the acts of the parties.
There was no equitable mortgage.
For Articles 1602 and 1604 to apply, two requisites must concur: (1) the parties entered into a contract
denominated as a contract of sale and (2) their intention was to secure an existing debt by way of
mortgage. Here, both the trial and appellate courts found that Exhibit A evidenced a contract of sale. They
also agreed that the circumstances of the case show that Avila intended her agreement with respondents to
be a sale. Both courts were unanimous in finding that the subsequent acts of Avila revealed her intention to
absolutely convey the disputed property. It was only after the perfection of the contract, when her siblings
began protesting the sale that she wanted to change the agreement.
Furthermore, contrary to petitioners claim, the trial court found that it was respondents who took over the
payment of real property taxes after the execution of Exhibit A.
Petitioners claim of gross inadequacy of selling price has no basis. They failed to introduce evidence of the
correct price at the time the land was sold to respondents in 1979. How can we therefore conclude that the
price was grossly inadequate? In the absence of evidence as to the fair market value of a parcel of land at
the time of its sale, we cannot reasonably conclude that the price at which it was sold was inadequate.
Right to redeem dependent on the existence of co-ownership.
Petitioners right to redeem would have existed only had there been co-ownership among petitionerssiblings. But there was none. For this right to be exercised, co-ownership must exist at the time the
conveyance is made by a co-owner and the redemption is demanded by the other co-owner or coowner(s). However, by their own admission, petitioners were no longer co-owners when the property was
sold to respondents in 1979. The co-ownership had already been extinguished by partition.
The regime of co-ownership exists when the ownership of an undivided thing or right belongs to different
persons. By the nature of co-ownership, a co-owner cannot point to any specific portion of the property
owned in common as his own because his share in it remains intangible and ideal.
Every act intended to put an end to indivision among co-heirs is deemed to be a partition. Here, the
particular portions pertaining to petitioners had been ascertained and they in fact already took possession of
their respective parts. The petitioners have admitted in their answer that their respective shares in the lot
have already been physically segregated.

Being an express judicial admission, it was conclusive on petitioners unless it was made through palpable
mistake or that no such admission was in fact made.Petitioners proved neither and were therefore bound by
it.
The purpose of partition is to separate, divide and assign a thing held in common among those to whom it
belongs. By their own admission, petitioners already segregated and took possession of their respective
shares in the lot. Their respective shares were therefore physically determined, clearly identifiable and no
longer ideal. Thus, the co-ownership had been legally dissolved. With that, petitioners right to redeem any
part of the property from any of their former co-owners was already extinguished. As legal redemption is
intended to minimize co-ownership, once a property is subdivided and distributed among the co-owners, the
community ceases to exist and there is no more reason to sustain any right of legal redemption.
Article 1622 does not apply.
Under the law, subject to certain conditions, owners of adjoining urban land have the pre-emptive right to a
lot before it is sold to third parties, or the redemptive right if it has already been sold pursuant to Article
1622 of the Civil Code.
However, this provision does not apply here. Aside from the fact that petitioners never raised it as an issue,
the conditions provided for its application were not met. While the property may be considered as urban
land, it was not shown or even alleged that its area and location would render a major portion of no practical
use within a reasonable time. Neither was there any allegation to the effect that the disputed property was
bought merely for speculation.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 109910 April 5, 1995

REMEDIOS G. SALVADOR and GRACIA G. SALVADOR, petitioners,
vs.
COURT OF APPEALS, ALBERTO and ELPIA YABO, FRANCISCA YABO, et al., respondents.

DAVIDE, JR., J.:

Assailed in this petition is the legal determination made by the Court of Appeals on the issues of
which portion of Lot No. 6080 and Lot No. 6180 formed part of the conjugal assets of the spouses
Pastor Makibalo and Maria Yabo, and of whether or not the rights of Pastor's co-heirs in the estate of
Maria Yabo were extinguished through prescription or laches.
Alipio Yabo was the owner of Lot No. 6080 and Lot No. 6180 situated in Barrio Bulua, Cagayan de
Oro City, containing an area of 1,267 and 3,816 square meters, respectively. Title thereto devolved
upon his nine children, namely, Victoriano, Procopio, Lope, Jose, Pelagia, Baseliza, Francisca,
Maria, and Gaudencia, upon his death sometime before or during the second world war.
On 28 April 1976, Pastor Makibalo, who is the husband of Maria Yabo, one of Alipio's children, filed
with the then Court of First Instance of Misamis Oriental a complaint, docketed as Civil Case No.
5000, against the spouses Alberto and Elpia Yabo for "Quieting of Title, Annulment of Documents,
and Damages." In the complaint, he alleged that he owned a total of eight shares of the subject lots,
having purchased the shares of seven of Alipio's children and inherited the share of his wife, Maria,
and that except for the portion corresponding to Gaudencia's share which he did not buy, he
occupied, cultivated, and possessed continuously, openly, peacefully, and exclusively the two

parcels of land. He then prayed that he be declared the absolute owner of 8/9 of the lots in
question. 1
On 8 October 1976, the grandchildren and great-grandchildren of the late Alipio Yabo 2 lodged with
the same court a complaint for partition and quieting of title with damages, 3 docketed as Civil Case No.
5174, against Pastor Makibalo, Enecia Cristal, and the spouses Eulogio and Remedies Salvador. They
alleged that Lot No. 6080 and Lot No. 6180 are the common property of the heirs of Alipio Yabo, namely,
the plaintiffs, defendant Enecia Cristal, Maria Yabo and Jose Yabo, whose share had been sold to Alberto
Yabo; that after Alipio's death, the spouses Pastor and Maria Makibalo, Enecia Cristal and Jose Yabo
became the de facto administrators of the said properties; and that much to their surprise, they
discovered that the Salvador spouses, who were strangers to the family, have been harvesting coconuts
from the lots, which act as a cloud on the plaintiffs' title over the lots.
The plaintiffs then prayed that (a) they, as well as defendant Pastor Makibalo, in representation of his
wife, and Enecia Cristal, in representation of Gaudencia, be declared as the owners of the lots; (b)
the Salvador spouses be declared as having no rights thereto except as possible assignees of their
co-defendants, Pastor Makibalo and Enecia Cristal; (c) the lots be partitioned according to law
among the aforementioned co-owners; and (d) the defendants be made to pay for the value of the
fruits they harvested from the lots and for moral and exemplary damages, attorney's fees, expenses
of the litigation, and costs of the suit.
The two cases were consolidated and jointly heard by Branch 5 of the Court of First Instance of
Cagayan de Oro City.
By evidence, Pastor, Makibalo sought to prove the following allegations:
He was married to Maria Yabo who died on 17 March 1962. 4 In August 1949, Jose and Victoriano,
both surnamed Yabo, sold their respective shares in the disputed lots to one Pedro Ebarat, and in 1952
the latter sold both shares to Pastor Makibalo. 5 Ebarat formalized this conveyance by executing an
Affidavit of Waiver and Quitclaim dated 30 May 1969 in favor of Pastor. 6
On 16 January 1951, the heirs of the late Lope Yabo sold Lope's shares in the litigated properties to
one Dominador Canomon, 7 who, in turn, sold the same to Pastor. 8 Canomon afterwards executed an
Affidavit of Waiver and Quitclaim in favor of the latter. 9
Pastor Makibalo likewise purchased the shares of Baseliza in the two lots in 1942, of Procopio in
1957, of Francisca in 1958, and of Pelagia in 1967. The only share he did not buy was that of
Gaudencia. After every purchase, he took possession of the portions bought and harvested the
products thereof. 10
In 1966, Pastor sold back to Alberto a portion of Lot No. 6180 which was formerly the share of
Alberto's father, Procopio. 11
In December 1968, Pastor mortgaged the two lots to the spouses Eulogio and Remedios
Salvador. 12 On 26 September 1978, he executed a document denominated as a "Confirmation and
Quitclaim" whereby he waived all his rights, interests, and participation in the lots in favor of the Salvador
spouses. 13

On the other hand, by their evidence,

l4 the spouses Alberto and Elpia Yabo tried to prove that they had repurchased from

Pastor Makibalo the share of Procopio, which was previously sold to Pastor, and had bought the shares of Jose and Maria.

15

Filoteo Yabo denied having sold the share of his father, Lope Yabo, in the contested lots and
disowned his signature and those of his mother, brothers, and sisters appearing at the back of
Exhibit "C". 16
Ignacio Yabo testified that his father, Victoriano Yabo, did not know how to write and sign his name.
He further declared that he had no knowledge that his father affixed his thumbmark in the document
marked as Exhibit "A" purporting to alienate his father's share in the disputed lots. l7
On 15 January 1983, the trial court rendered its decision

18

holding as follows:

Assuming that the thumbmark on the typewritten name "Jose Yabo" in Exh. 3 was
that of Jose Yabo, Alberto Yabo and Elpia R. Yabo purchased the share of Jose Yabo
in bad faith because they knew before and up to the execution of Exh. 3 on October
24, 1972 that Jose Yabo was no longer the owner of that area because from the
documents she borrowed from Mrs. Salvador they came to know that Jose Yabo had
sold his shares to Pedro Ebarat, and they have seen that Pastor Makibalo has been
in possession of those shares together with the seven others exclusively as owner,
he having mortgaged them to Mrs. Salvador.
As Jose Yabo was no longer the owner of the one-ninth (1/9) shares which he sold to
Alberto Yabo and Elpia Yabo under Exh. 3, the sale is null and void, and Alberto and
Elpia acquired nothing because Jose Yabo had no more title, right or interest to
dispose of.
...
Pastor Makibalo had been in possession of Jose Yabo's share since 1949 after
purchasing it from Ebarat, and has been in possession thereof up to September 26,
1978 when he sold it to the spouses Eulogio Salvador and Remedios Salvador, who
are now in possession of the same.
Exh. A, evidencing the sale of Victoriano Yabo's share to Pedro Ebarat was identified
by the latter who testified that he sold it to Pastor Makibalo in 1951. Exh. A is an
ancient document 1949 when the document came to existence up to now is more
than 30 years, and the document had been in the possession of Pastor Makibalo,
then Remedios Salvador who had interest in its preservation.
As regards the shares of Lope Yabo, the same had been sold by his surviving
spouse Juana Legaspi, and his children Filoteo, Andresa, Jovita, Bonifacio, and
Rundino for P105.00 on January 16, 1951 to Dominador Conomon (Exh. C and C-1),
who in turn sold it to Pastor Makibalo in 1952, executing a formal Deed of Waiver and
Quitclaim on May 30, 1969
(Exh. D).

Exh. C is an ancient document, being more than 30 years old and has been in the
possession of Pastor Makibalo and then the spouses Eulogio and Remedios
Salvador who had an interest in its preservation. The claim of Filoteo Yabo that
the signatures appearing in Exh. C are not his and those of his brothers and sisters
are of no avail, for if they were not the ones who affixed those signatures and so they
did not sell the shares of their father Lope Yabo, why did they not then take
possession of said shares they remained silent from 1951 to September 16, 1976
a period of 25 years. They are now [e]stopped by laches.
And as regards the shares of Baseliza, Francisca and Pelagia, there is no evidence
presented to effectively rebut the testimony of Pastor Makibalo that he acquired the
shares of Baseliza Yabo in 1942 by changing it with a buffalo; that he bought the
shares of Francisca Yabo in 1958 and that he bought the shares of Pelagia Yabo in
1967; Pastor Makibalo had been in possession of these shares from the time he
acquired them, continuously, adversely, openly, and peacefully, as owner up to the
time he sold his rights and interest therein to the spouses Eulogio and Remedies
Salvador. The heirs of Baseliza, Francisca and Pelagia have not taken any step to
protect their rights over those shares for over 40 years in the case of Baseliza's
share, for about 20 years in the case of Francisca's share, and for more than 10
years in the case of Pelagia's share. Laches, likewise has rendered their rights stale.
On March 10, 1966 Pastor Makibalo sold back to Alberto Yabo the share of Procopio
Yabo in Lot 6180 (Exh. 1 and 2), but there is nothing to show that. Pastor Makibalo
also sold back Procopio's share in Lot 6080.
So then, by purchase, Pastor Makibalo and Maria Yabo acquired the shares of
Baseliza, Victoriano, Jose, Lope, Procopio and Francisca, or six (6) shares from Lots
6080 and 6180. These belonged to the conjugal partnership of Pastor Makibalo and
Maria Yabo. Maria Yabo had also a share from Lots 6080 and 6180, and Pastor
Makibalo acquired the shares of Pelagia Yabo in both Lots 6080 and 6180. All in all;
Pastor Makibalo acquired eight shares in both Lot 6080 and 6180.
While Maria Yabo died on March 17, 1962, and so one-fourth (1/4) of the shares of
Baseliza, Victoriano, Jose, Lope, and Francisca, or one-fourth of five-ninth (5/9) of
both lots and one-fourth (1/4) of Lot 6080 should go to the children of the brothers
and sisters of Maria Yabo by virtue of the provisions of Article 1001 of the New Civil
Code, the latter have lost their rights thereto by laches for their inaction for a very
long period and their rights have become stale. On the other hand, Pastor Makibalo
who had been in possession of the whole of the eight shares in both Lots 6080 and
6180, enjoying the fruits thereof exclusively, uninterruptedly, publicly, peacefully, and
continuously from the death of Maria Yabo up to the filing of the complaint in Civil
Case No. 5174 on October 8, 1976, or a period of 14 years, had acquired title to the
whole of the eight shares in Lot 6080 and seven shares in Lot 6180 (the share of
Procopio in Lot 6180 had been sold back to Alberto Yabo).

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered finding Pastor

Makibalo, now Eulogio Salvador and Remedios Salvador the owner of eight (8)
shares, equivalent to eight-ninth (8/9) of Lot No. 6080, and of seven (7) shares,
equivalent to seven-ninth (7/9) of Lot No. 6180, and therefore, ordering the partition
of Lot 6080 so that the one-ninth (1/9) alloted to Gaudencia Yabo will go to her heirs
or their assigns, and the remaining eight-ninth (8/9) will go to the spouses Eulogio
Salvador and Remedios Salvador, as successor of Pastor Makibalo, and the partition
of Lot 6180 so that the seven-ninth (7/9) portion which formerly belonged to Baseliza,
Victoriano, Jose, Lope, Maria, Francisca, and Pelagia will go to the spouses Eulogio
and Remedios Salvador, the one-ninth (1/9) which formerly belonged to Procopio,
will go to Alberto Yabo, and the remaining one-ninth (1/9) which formerly belonged to
Gaudencia, will go to Gaudencia's heirs or their assigns.
Doc. No. 720, recorded on page 28 of Notarial Register No. VII, and acknowledged
before Notary Public Isidro S. Baculio (Exh. E) [purportedly executed by Maria Yabo
and Pastor Makibalo] is hereby declared null and void, and so the Office of the City
Fiscal is directed to cause an investigation of this matter to find out the person or
persons responsible for the falsification of the said document, and if the evidence
warrants, to file the corresponding criminal action in court. The Office of the City
Assessor of Cagayan de Oro City is, likewise, directed to cause the cancellation of
Tax Declarations Nos. 33553, marked as Exh. H-3, 33557, marked as Exh. H-2, both
in the name of Alberto Yabo, for having been issued on the basis of a falsified
document. Let copies of this decision be furnished the Offices of the City Fiscal and
City Assessor, both of Cagayan de Oro City.
No pronouncement as to damages, attorney's fees and costs.
SO ORDERED. 19
The defendants in Civil Case No. 5000 and the plaintiffs in Civil Case No. 5174 appealed from the
decision to the Court of Appeals on 19 August 1983. 20
In its decision of 3 February 1993, 21 the Court of Appeals held that (a) Maria Yabo did not sell her share
to Alberto and Elpia Yabo; (b) prescription and laches have not run against the private respondents with
respect to the 1/9 share of Maria Yabo in the estate of her father and to her conjugal share in the portions
acquired from her brothers and sisters; and (c) Procopio never sold his share in Lot No. 6080 to Pastor
Makibalo. More specifically it stated:
Exh. E is the document found by the lower court to be a falsification. This finding
appellants do not dispute and have not raised an error.
...
While acknowledging. that upon the death of Maria Yabo on March 17, 1962, onehalf (1/2) of the share of Maria Yabo in Lots 6080 and 6180 and one-half (1/2) of
Maria Yabo's conjugal share in the portions bought from Basiliza, Victoriano, Jose,

Lope, Pelagia and Francisca should go to the children of the brothers and sisters of
Maria in accordance with Article 1001 of the Civil Code, the lower court rule that said
children have lost their rights by laches "for their inaction for a very long period and
their rights have become stale" (Decision, p. 16; Record, Vol. 2, p. 158).
Appellants in their second assignment of error aver that this is an error.
We agree that the lower court erred.
While between March 17, 1962 when Maria Yabo died and October 8, 1976, when
Civil Case No. 5174 for partition was filed, was a period of more than fourteen (14)
years, that alone to our mind would not suffice to establish laches or prescription.
Upon the death of Maria Yabo, appellee Pastor Makibalo and appellants and the
other children of the brothers and sisters of Maria, by operation of law become coowners of the one-ninth (1/9) share of Maria as heir of her father Alipio and the
conjugal share of Maria in the portions acquired from Basiliza, Victoriano, Jose,
Lope, Pelagia and Francisca. Time alone is not a decisive factor. Appellee Pastor
Makibalo, it must be remembered, is the husband of Maria and, therefore, an uncle
in-law of appellants. In our culture, a demand by an heir or heirs for partition
immediately upon the death of a relative is more often taken not as a legitimate
assertion of a right but of something else, like greed. It must also be noted that the
spouses, the appellee Pastor Makibalo and his deceased wife Maria, were childless
and, therefore, appellants and the other children of the brothers and sisters of Maria
must have felt that at any rate the property would go to them in the course of time.
This probably explains why appellants started asserting their right over the property
only after appellee Pastor Makibalo sold the same to the spouses Eulogio and
Remedios Salvador. Besides, Lots 6080 and 6180 have a combined area only of
5,083 square meters and before the development of Northern Mindanao, and even in
1962 when Maria Yabo died, were not that valuable. This is shown by the fact that
each heir sold his other share only for P110.00.
As we have said not time alone. In the early case of Cortes v. Oliva, 33 Phil. 480, it
was held that"(o)rdinarily, possession by one joint owner will not be presumed to be
adverse to the others, but will, as a rule, be held to be for the benefit of all. Much
stronger evidence is required to show an adverse holding by one of several joint
owners than by a stranger; and in such cases, to sustain a plea of prescription, it
must always clearly appear that one who was originally a joint owner has repudiated
the claims of his co-owners, and that his co-owners were apprised or should have
been apprised of his claim of adverse and exclusive ownership before the alleged
prescription began to run (at page 484). This ruling on prescription should apply with
equal force to laches.
The third assignment of error challenges the finding of the lower court that "there is
nothing to show that Pastor Makibalo also sold back Procopio's share in Lot 6080"
(Decision, p. 16; Records, Vol. 2,p. 158).

Exhibits 1 and 2 cover only Procopio's share in Lot 6180. In other words, Exhibits 1
and. 2 conveyed back to Alberto Yabo only his father, Procopio's share in Lot 6180.
There is indeed no evidence that Pastor Makibalo also sold back to Alberto, his
father Procopio's share in Lot 6080.
But from the evidence it appears that Procopio Yabo never sold his share in Lot 6080
to Pastor Makibalo. So there was no need to convey back Procopio's share in Lot
6080.
This fact is evident from the Affidavit of Confirmation of Sale (Exh. M) dated April 22,
1970, executed by Alberto Yabo, which is the very document relied upon by the lower
court (Decision, p. 11; Record, Vol. 2, p. 153) in finding that "Alberto Yabo admitted
that the share of his father Procopio Yabo was previously bought by Pastor
Makibalo." A look at Exh. M, particularly par. 3 thereof, reveals that AlbertoYabo
merely acknowledged or confirmed the sale of his father's share to Pastor Makibalo
in Lot 6180. In effect, it at the same time proves that Lot 6080 was never sold by
Procopio to appellee Pastor Makibalo; otherwise, it would have been included in the
said Affidavit of Confirmation of Sale. The Deed of Absolute Sale (Exh. 2)
subsequently executed by Pastor Makibalo in favor of Alberto Yabo on April 23, 1970,
further proves this point, since the latter merely bought back what was previously
sold, his father's share in Lot 6180. 22
The respondent court then concluded and held as follows:
In summary, appellee Pastor Makibalo and his assigns, the spouses Eulogio and
Remedios Salvador, are entitled only to one-half () of the one-ninth (1/9) share of
Maria and three-fourths (3/4) of the six-ninth (6/9) shares acquired from Basiliza,
Victoriano, Jose, Lope, Pelagia and Francisca. Accordingly, the partition should be
done as follows:
(1) 1/9 of Lots 6080 end 6180 should be given to the heirs of
Gaudencia Yabo or their successors and assigns;
(2) 1/9 of Lot 6180 should go to Alberto Yabo and his wife Elpia Yabo;
(3) 1/9 of Lot 6080 should be given to the heirs of Procopio Yabo and
their successors end assigns, including Alberto Yabo;
(4) The 1/9 share of Maria Yabo in Lots 6080 and 6180 should be
partitioned: One-half (1/2) for the surviving spouse Pastor Makibalo
(now the spouses Eulogio Salvador and Remedios Salvador) and the
other half for the children of the brothers and sisters of Maria Yabo in
equal shares.

(5) The remaining 6/9, one-half (1/2) of which is conjugal between

Maria Yabo and appellee Pastor Makibalo should be partitioned
three-fourths (3/4) for Pastor Makibalo (now the spouses Eulogio
Salvador and Remedios Salvador) and one-fourth (1/4) for the
children of the brothers and sisters of Maria Yabo in equal shares.
(6) Jose Yabo if he is still alive should participate in the partition as
heir of Maria otherwise he shall be represented by his children.
WHEREFORE, premises considered, subject to the modification in the partition, as
indicated above, the decision appealed from is AFFIRMED, without pronouncement
as to costs. The lower court is directed if necessary to fully effect the partition, to
conduct further hearings and determine whether Jose Yabo is still alive and who are
the children of the brothers and sisters of Maria Yabo. 23
Unable to obtain a reconsideration of the said-decision, Remedios Salvador, together with her
daughter, Ma. Gracia Salvador, as one of the successors-in-interest of Eulogio M. Salvador who died
during the pendency of the appeal, 24 elevated the case to this Court contending that the respondent
court erred in ruling that: (1) the shares of Pelagia Yabo should be included in the partition; (2)
prescription and laches have not run against the private respondents in relation to the 1/9 share of Maria
Yabo in the estate of her father and to her conjugal share in those acquired by purchase; (3) Procopio
Yabo never sold to Pastor Makibalo his share in Lot No. 6080; and(4) Jose Yabo should be allowed to
participate as heir of Maria even as he had openly rejected this option by refusing to participate in both
civil cases. 25
Article 160 of the Civil Code provides that all property of the marriage is presumed to belong to the
conjugal partnership, unless it be proved that it pertains .exclusively to the husband or to the wife.
Since the shares of Jose, Victoriano, Lope, Baseliza, Procopio, and Francisca in Lot No. 6180 and
Lot No. 6080 had been purchased by Pastor during his marriage with Maria, and there is no proof
that these were acquired with his exclusive money, the same are deemed conjugal properties. Not
forming part of the conjugal partnership are: (1) the 1/9 share inherited by Maria which remained as
her exclusive property pursuant to Article 146 (2) of the Civil Code; (2) the 1/9 share of Gaudencia
which was not sold to Pastor; and (3) the 1/9 share of Pelagia which was acquired by Pastor in 1967
or five years after the death of his wife and which was therefore his exclusive property.
There is, thus; merit in the petitioners' first assigned error. The Court of .Appeals should have
excluded from the conjugal partnership the share of Pelagia which Pastor had acquired after his
wife's death.
Upon Maria's death in 1962, the conjugal partnership of gains was dissolved. 26 Half of the conjugal
properties, together with Maria's l/9 hereditary share in the disputed lots, constituted Maria's estate and
should thus go to her surviving heirs. 27 Under Article 1001 of the Civil Code, her heirs are her spouse,
Pastor Makibalo, who shall be entitled to-one-half (1/2) of her estate, her brother, Jose, and the children
of her other brothers and sisters, who shall inherit the other half. There having been no actual partition of
the estate yet, the said heirs became co-owners thereof by operation of law. 28

We now determine whether prescription and laches can be applied against the co-heirs of Pastor
Makibalo.
It has been said that Article 494 of the Civil Code which provides that each co-owner may demand at
any time the partition of the common property implies that an action to demand partition is
imprescriptible or cannot be barred by laches. 29 The imprescriptibility of the action cannot, however, be
invoked when one of the co-owners has possessed the property as exclusive owner and for a period
sufficient to acquire it by prescription. 30
What needs to be addressed first is whether or not Pastor Makibalo has acquired by prescription the
shares of his other co-heirs or co-owners. Prescription as a mode of acquiring ownership requires a
continuous, open, peaceful, public, and adverse possession for a period of time fixed by law.
This Court has held that the possession of a co-owner is like that of a trustee and shall not be
regarded as adverse to the other co-owners but in fact as beneficial to all of them. 31 Acts which may
be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned.
A mere silent possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection
of buildings and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as
proof of exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts
of possession which unequivocably constituted an ouster or deprivation of the rights of the other coowners. 32
Thus, in order that a co-owner's possession may be deemed adverse to the cestui que trust or the
other co-owners, the following elements must concur: (1) that he has performed unequivocal acts of
repudiation amounting to an ouster of the cestui que trust or the other co-owners; (2) that such
positive acts of repudiation have been made known to the cestui que trust or the other co-owners;
and (3) that the evidence thereon must be clear and convincing. 33
In Pangan vs. Court of Appeals, 34 this Court had occasion to lay down specific acts which are
considered as acts of repudiation:
Filing by a trustee of an action in court against the trustor to quiet title to property, or
for recovery of ownership thereof, held in possession by the former, may constitute
an act of repudiation of the trust reposed on him by the latter.
The issuance of the certificate of title would constitute an open and clear repudiation
of any trust, and the lapse of more than 20 years, open and adverse possession as
owner would certainly suffice to vest title by prescription.
An action for the reconveyance of land based on implied or constructive trust
prescribes within 10 years. And it is from the date of the issuance of such title that
the effective assertion of adverse title for purposes of the statute of limitation is
counted.
The prescriptive period may only be counted from the time petitioners repudiated the
trust relation in 1955 upon the filing of the complaint for recovery of
possession against private respondents so that the counterclaim of the private

respondents contained in their amended answer wherein they asserted absolute

ownership of the disputed realty by reason of the continuous and adverse
possession of the same is well within the l0-year prescriptive period.
There is clear repudiation of a trust when one who is an apparent administrator of
property causes the cancellation of the title thereto in the name of the apparent
beneficiaries and gets a new certificate of title in his own name.
It is only when the defendants, alleged co-owners of the property in
question, executed a deed of partition and on the strength thereof obtained the
cancellation of the title in the name of their predecessor and the issuance of a new
one wherein they appear as the new owners of a definite area each, thereby in effect
denying or repudiating the ownership of one of the plaintiffs over his alleged share in
the entire lot, that the statute of limitations started to run for the purposes of the
action instituted by the latter seeking a declaration of the existence of the coownership and of their rights thereunder.
The records do not show that Pastor Makibalo adjudicated to himself the whole estate of his wife by
means of an affidavit filed with the Office of the Register of Deeds as allowed under Section 1 Rule
74 of the Rules of Court, or that he caused the issuance of a certificate of title in his name or the
cancellation of the tax declaration in Alipio's name and the issuance of a new one in his own name.
The only act which may be deemed as a repudiation by Pastor of the co-ownership over the lots is
his filing on 28 April 1976 of an action to quiet title (Civil Case No. 5000). The period of prescription
started to run only from this repudiation. However, this was tolled when his co-heirs, the private
respondents herein, instituted on 8 October 1976 an action for partition (Civil Case No. 5174) of the
lots. Hence, the adverse possession by Pastor being for only about six months would not vest in him
exclusive ownership of his wife's estate, and absent acquisitive prescription of ownership, laches
and prescription of the action for partition will not lie in favor of Pastor. 35
The issue presented by the petitioners in their third assigned error involves a question of fact. This
Court is not ordinarily a trier of facts, its jurisdiction being limited to errors of law. Thus; the findings
of facts of the Court of Appeals are as a rule deemed conclusive. However, when the findings of
facts of the appellate court vary with those of the trial court, this Court has to review the evidence in
order to arrive at the correct findings. 36
In the instant case, a conflict in the findings of facts of the lower courts exists. The trial court found
that Pastor was the owner of Procopio's share in Lot No. 6080, as there was nothing to show that he
sold it back to Alberto Yabo. The respondent court on the other hand, held that Procopio Yabo never
sold his share in Lot No. 6080 to pastor, thus, there was no need to convey it back to Procopio's son,
Alberto.
At this juncture, it is worthy to quote pertinent portions of the testimony of Pastor Makibalo:
COURT: (To the witness.)
Q Where is AlbertoYabo living?

A It is there in their house at Bulua.

ATTY. JARAULA: (Continuing.)
Q In whose land?
A Alipio Yabo's land.
Q What relation has that land to the two (2) parcels of land under
litigation?
A I bought already.
Q So, will you please tell the Honorable Court, why Alberto Yabo is
staying on that land when you said you have bought that land
already.
A So, I sold back a portion to them because they requested me.
COURT: (To the witness.)
Q When was that when you said that Alberto Yabo requested a
portion?
A In 1967.
COURT:
Q Did you give that portion which they requested?
A Their share being inherited from their father Procopio was the
portion they requested.
COURT
Q Yes. Did you grant that?
A Yes.
Q That is the area you sold to Alberto Yabo, pursuant to his request?
A Because that was the land they inherited from their father that was
what they requested.
Q All right. So that, the area now being occupied by Alberto Yabo?

A Yes. That land in the Centro.

Q This is now identified as Lot No. 6180?
A Yes, Your Honor.
ATTY. JARAULA: (Continuing.)
Q Where did you sign a document ceding that portion requested by
Alberto Yabo?
A We did not make any receipt in favor of AlbertoYabo because they
got only the receipt of that of his father.
COURT: (To the witness.)
Q You mean to say, that the receipt which Procopio signed when he
sold his share for [sic] the document which Alberto got?
A Yes.
COURT:
All right.
ATTY. JARAULA (Continuing.)
Q Now, for how much did you buy. the shares of each of the brothers
and sisters of your wife?
A One Hundred Ten (P110.00) Pesos.
Q When you sold back to Alberto Yabo, the portion corresponding to
the share of his father Procopio in the Poblacion, how much did he
pay you?
A The same.
Q By the same, you are referring by the same amount of One
Hundred Ten (P110.00) Pesos?
A Yes, Sir. The same amount. 37
The petitioners contend that the sales or conveyances made by Alipio's heirs were for their
consolidated shares in the two lots. If this was so, and the receipt which Procopio signed when he
sold his consolidated share to Pastor was turned over to Alberto, the inevitable conclusion is that

Alberto redeemed his father's share in both lots, not only in Lot: No. 6180. This conclusion is further
buttressed by the above-quoted testimony of Pastor that he bought the shares (consolidated) of
each of Alipio's heirs for P110.00 and that when he sold back to Alberto the former share of
Procopio, Alberto paid him the same amount of P110.00.
However, since the share of Procopio in the two litigated parcels of land was purchased by Pastor
during his marriage with Maria, the same became conjugal property, and half of it formed part of
Maria's estate upon her death in 1962. Accordingly, Pastor's resale in favor of Alberto could only be
valid with respect to Pastor's one-half (1/2) conjugal share and one-fourth (1/4) hereditary share as
heir of Maria. 38 The remaining one-fourth (1/4) should go to Pastor's co-heirs, the private respondents
herein.
Now on the fourth assigned error.
Section 1, Rule 69 of the Rules of Court requires that all persons interested in the land sought to be
partitioned must be joined as defendants in the complaints. All co-owners and persons having an
interest in the property are considered indispensable parties and an action for partition will not lie
without the joinder of said persons. 39 It has been held that the absence of an indispensable party in a
case renders ineffective all the proceedings subsequent to the filing of the complaint including the
judgment. 40
It must be recalled that in Civil Case No. 5174 the private respondents sought the partition of the two
lots based on the co-ownership which arose from the right of succession to Alipio's estate. Since
Jose Yabo confirmed, through his thumbmark in the verification of the complaint, that he had already
parted with his share in Alipio's estate, he in effect admitted that he had ceased to be a co-owner of
the two lots which comprised his father's estate. Thus, his non-joinder as a party-plaintiff in the
complaint would appear to be proper. He does not, as well, appear to be an indispensable party in
Civil Case No. 5000.
As it turned out, however, the evidence and the issues which cropped up rendered imperative the
determination of the conjugal assets of Pastor Makibalo and Maria Yabo and the partition of the
latter's estate among her heirs. Her estate consists of one-half() of the conjugal properties, which
should then be divided pursuant to Article 1001 of the Civil Code since the marriage produced no
child; thus: one-half () to Pastor, and the other half to her brother Jose, and to her nephews and
nieces.
Insofar as the partition of Maria Yabo's estate is concerned, Jose is an indispensable party. Strictly,
the rule on indispensable parties may bar a partition of Maria's estate. Considering, however, that
such estate or its partition are but incidents in Civil Case No. 5000 and Civil Case No. 5174, and the
parties have not offered any objection to the propriety of the determination and partition of her
estate, then in the light of Section 11 of Rule 3 41 and Sections 1 and 5, Rule 10 42 of the Rules of Court,
and following the rulings of this Court in the 1910 case of Alonso vs. Villamor 43 and the 1947 case
of Cuyugan vs. Dizon, 44 an amendment of the complaint in Civil Case No. 5174 to implead Jose Yabo as
party plaintiff would be in order.
In Alonso, it was held that under Section 110 of the Code of Civil Procedure whose first paragraph
is substantially the same as the aforesaid Section 1 of Rule 10 and Section 503 thereof, this

Court "has full power, apart from that power and authority which is inherent, to amend the process,
pleadings, proceedings, and decision in this case by substituting, as party plaintiff, the real party in
interest." Our ruling in Cuyugan states:
We, however, do not believe that the case should be dismissed for plaintiff's failure to
join her husband. (Sec. 11, Rule 2, Rules of Court). Nor should the case be
remanded to the court below and a new trial ordered on this account. The complaint
may and should be amended here, to cure the defect of party plaintiffs, after final
decision is rendered. Section 11, Rule 2, and Section 2, Rule 17, explicitly authorize
such procedure. As this Court had occasion to say in Quison vs. Salud, (12 Phil.,
109, 116), "a second action would be but a repetition of the first and would involve
both parties, plaintiffs and defendant, in much additional expense and would cause
much delay, in that way defeating the purpose of the section, which is expressly
stated to be "that the actual merits of the controversy may speedily be determined
without regard to technicalities and in the most expeditious and inexpensive manner."
(See also Diaz vs. De la Rama, 73 Phil., 104)
To avoid further delay in the disposition of this case, we declare Civil Case No. 5174 as thus duly
amended. Consequently, Jose Yabo may participate in the partition of the estate of Maria Yabo. The
fourth assigned error must then be rejected.
In view of the foregoing disquisitions, the appealed judgment should be modified as follows: (a) the
former 1/9 share of Pelagia Yabo in Lots No. 6180 and 6080 which she sold to Pastor should be
treated as the latter's exclusive property which should now pertain to the petitioners, his successorsin-interest; and (b) the former 1/9 share of Procopio Yabo in both lots should be divided as follows:
3/4 (respondent Pastor's 1/2 conjugal share and 1/4 representing his share therein as Maria's heir)
for the spouses Alberto and Elpia Yabo, and 1/4 (representing the share therein of Maria's collateral
relatives as Maria's heirs) for the private respondents, including Alberto and Jose Yabo. The partition
of the two lots in controversy should therefore be made in this wise:
(1) 1/9 share of Gaudencia Yabo should be allotted to her heirs or successors-ininterest;
(2) 1/9 share formerly belonging to Pelagia Yabo to the petitioners as successorsin-interest of Pastor Makibalo;
(3) 1/9 hereditary share of Maria Yabo to be divided as follows:
(a) 1/2 for the petitioners (as successors-in-interest of Pastor
Makibalo), and
(b) 1/2 for the private respondents, including Jose Yabo or his heirs;
(4) 1/9 share formerly belonging to Procopio Yabo to be divided thus:
(a) 3/4 for Spouses Alberto and Elpia Yabo, and

(b) 1/4 for the other private respondents, including Jose Yabo or his
heirs;
(5) 5/9 shares which became the conjugal properties of Pastor Makibalo and Maria
Yabo to be divided thus:
(a) 3/4 for the petitioners (as successors-in-interest of Pastor
Makibalo), and
(b) for the private respondents, including Jose Yabo or his heirs.
In sum, Lots Nos. 6180 anid 6080 should be partitioned as follows:
1/9 or 4/36 to Guadencia Yabo's heirs or successors-in-interest;
3/4 of 1/9 or 3/36 to the spouses Alberto and Elpina Yabo;
8/36 to the private respondents, including Jose Yabu or his heirs;
21/36 to the petitioners as successors-in-interest of Pastor Makibalo.
WHEREFORE, the challenged decision of the Court of Appeals of 8 February 1993 in CA-G.R. CV
No. 12839 is AFFIRMED, subject to the modifications indicated above. Upon the finality of this
decision, let this case be forthwith remanded to the court a quo for further proceedings on the
partition of Lots Nos. 6180 and 6080 in conformity with this decision.
No pronouncement as to costs.
SO ORDERED.
SECOND DIVISION
[G.R. NO. 157767 : September 9, 2004]
REYNALDO BALOLOY and ADELINA BALOLOY-HIJE, Petitioners, v. ALFREDO HULAR,Respondent.
DECISION
CALLEJO, SR., J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, as amended, of
the Decision1 of the Court of Appeals in CA-G.R. CV No. 51081, which affirmed the Decision 2 of the Regional
Trial Court of Sorsogon, Branch 51, in Civil Case No. 93-5871.
The antecedents are as follows:
On May 11, 1993, respondent Alfredo Hular filed a complaint for quieting of title of real property with
damages against the children and heirs of Iluminado Baloloy, namely, Anacorita, Antonio, and petitioners

Reynaldo and Adelina, all surnamed Baloloy. The respondent alleged, inter alia, in his complaint that his
father, Astrologo Hular, was the owner of a parcel of residential land located in Sitio Page, Biriran, Juban,
Sorsogon, with an area of 287 square meters, and that such lot was part of Lot No. 3347 of the Juban
Cadastre. The respondent alleged that Iluminado Baloloy, the petitioners' predecessor-in-interest, was able
to secure a Free Patent over the property through fraud on March 1, 1968, on the basis of which the
Register of Deeds issued Original Certificate of Title (OCT) No. P-16540 in his name. The respondent later
discovered that in the cadastral survey of lands in Juban, the property of his father, which actually consisted
of 1,405 square meters was made to form part of Lot No. 3353, the property of Iluminado Baloloy.
According to the respondent, even if the residential land was made to form part of Lot No. 3353 registered
under the name of Iluminado Baloloy, he had acquired ownership of the property by acquisitive prescription,
as he and his predecessors had been in continuous, uninterrupted and open possession of the property in
the concept of owners for more than 60 years.
The respondent prayed for alternative reliefs that, after due hearing, judgment be rendered in his favor,
thus:
a) Declaring the plaintiff as the absolute owner of the land in question;
b) Ordering the defendants to perpetually refrain from disturbing plaintiff in his peaceful possession in the
land in question;
c) Ordering the defendants to remove their houses in the land in question, and to declare OCT No. P-16540,
and whatever paper, form, document or proceeding the defendants may have, as null and void and without
any effect whatsoever as far as the land in question is concerned as they cast cloud upon the title of the
plaintiff;
d) In the alternative, defendants be ordered to reconvey the title in favor of the plaintiff as far as the land in
question is concerned;
e) Ordering the defendants to jointly and severally pay the plaintiff the amount of P50,000.00 as moral
damages; P5,000.00 as attorney's fee plus P500.00 for every appearance or hearing of his lawyer in
court;P1,500.00 as consultation fee; P5,000.00 as incidental litigation expenses; P20,000.00 as exemplary
damages; and to pay the costs.
Plaintiff further prays for such other relief [as are] just and equitable in the premises. 3
The Evidence of the Respondent
The respondent adduced evidence that the Spouses Lino and Victoriana Estopin were the original owners of
a parcel of land located in Barangay Biriran, Juban, Sorsogon, designated as Lot No. 3347 of the Juban
Cadastre. A major portion of the property, where a house of strong materials was constructed, was
agricultural, while the rest was residential. The respondent also averred that the Spouses Estopin declared
the property in their names under Tax Declaration No. 4790. On the north of the agricultural portion of the
property was the road leading to Biriran, while north of the residential portion was a creek (canal) and the
property of Iluminado.
When Lino Estopin died intestate, his widow, Victoriana Lagata, executed a Deed of Absolute Sale4 on
November 11, 1961 over the agricultural portion of Lot No. 3347, which had an area of 15,906 square
meters, more or less, in favor of Astrologo Hular, married to Lorenza Hular. Shortly thereafter, on November
25, 1961, Lagata executed a Deed of Absolute Sale 5 over the residential portion of the property with an area
of 287 square meters, including the house constructed thereon, in favor of Hular. Hular and his family,
including his son, the respondent, then resided in the property. In 1961 or thereabouts, Iluminado

asked Hular's permission to construct a house on a portion of Lot No. 3347 near the road, and
the latter agreed. In l977, Lorenza Hular, wife of Astrologo, declared the residential land in the latter's
name under Tax Declaration No. 6841.6
Earlier, or on August 14, 1945, Irene Griarte had executed a Deed of Absolute Sale over a coconut land
located in Barangay Biriran, Juban, with an area of 6,666 square meters in favor of Martiniano Balbedina,
with the following boundaries: North, Alejandro Gruta; South, Lino Estopin; East, River Page; West, Pedro
Grepal and Esteban Grepal.7 Subsequently, after a cadastral survey was conducted on lands in Juban, the
property of Balbedina was designated as Lot No. 3353, with the following boundaries: North: Lot No. 3353
(portion), Alejandro Gruta; South: Lino Estopin; West: Lot No. 3349; East: creek. A trail was then
established between Lot No. 3353 and Lot No. 3347 resulting in the decrease of Lot No. 3353 owned by
Balbedina to 4,651 square meters. He declared the property under his name under Tax Declaration No. 191
with the following boundaries: North: Lot No. 3353 (portion) Alejandro Gruta; South: trail; East: creek;
West: Lot No. 3349.8
On June 4, 1951, Balbedina executed a Deed of Absolute Sale over Lot No. 3353 with an area of
only 4,651 square meters in favor of Iluminado.9 The latter declared the property in his name under
Tax Declaration No. 5359.10 Iluminado filed an application with the Bureau of Lands for a free patent over
the entirety of Lot No. 3353 on January 5, 1960.11 He indicated in his application that the property was not
occupied by any person and was disposable or alienable public land. In support thereof, he executed an
affidavit wherein he declared that he purchased about one-half portion of the property in 1951 based on a
deed of absolute sale attached to said affidavit; that in 1957, he purchased the other one-half portion, but
"for economic reasons," no deed of sale was executed by the parties. He also alleged that the improvements
on the land consisted of coconut trees.12 The Bureau of Lands processed the application in due course.
In the meantime, Iluminado constructed his house on a portion of Lot No. 3353 near the trail (road) leading
to Biriran. He and his family, including his children, forthwith resided in said house.
On March 1, 1968, the Secretary of Agricultural and Natural Resources approved Iluminado's application and
issued Free Patent No. 384019 covering Lot No. 3353 with an area of 9,302 square meters, on the basis of
which OCT No. P-16540 was thereafter issued by the Register of Deeds on March 1, 1968. 13
On August 2, 1975, Alejandro Gruta had executed a deed of absolute sale over a portion of Lot No. 3353
with an area of 4,651 square meters in favor of Estelito Hije, the husband of petitioner Adelina Baloloy, one
of Iluminado's children.14
Before he left for employment in Saudi Arabia in 1979, respondent Hular had his house constructed near the
trail (road) on Lot No. 3347, which, however, occupied a big portion of Lot No. 3353.15
Iluminado died intestate on November 29, 1985. His widow and their children continued residing in the
property, while petitioner Reynaldo Baloloy, one of Iluminado's children, later constructed his house near
that of his deceased father. When Astrologo died intestate on December 25, 1989, he was survived by his
children, Jose, Romeo, Anacleto, Elena, Leo, Teresita, and the respondent, among others, 16 who continued to
reside in their house.17
Sometime in l991, the respondent's house helper was cleaning the backyard, but was prevented from doing
so by petitioner Adelina Baloloy who claimed that their father Iluminado owned the land where the
respondent's house was located. To determine the veracity of the claim, the respondent had Lot No. 3353
surveyed by Geodetic Engineer Rodolfo Cunanan on February 16, 1993, in the presence of Balbedina,
Antonio Baloloy and petitioner Reynaldo Baloloy. Cunanan prepared a Special Sketch Plan of Lot No.
335318 showing that the house of Iluminado was constructed on Lot No. 3353 19 near the road behind the
houses owned by Astrologo and Alfredo.20 The engineer discovered that the residential area deeded by
Lagata to Hular had an area of 1,405 square meters, instead of 287 square meters only.21

In their Answer to the complaint, the heirs of Iluminado Baloloy averred that Iluminado's house was built in
1962 on a portion of Lot No. 3353, which the latter purchased from Balbedina, and not on a portion of Lot
No. 3347 which Hular purchased from Lagata. They alleged that Hular constructed his house on a portion of
Lot No. 3353 after securing the permission of their father Iluminado, and that the respondent had no cause
of action for the nullification of Free Patent No. 384019 and OCT No. P-16540 because only the State,
through the Office of the Solicitor General, may file a direct action to annul the said patent and title; and
even if the respondent was the real party in interest to file the action, such actions had long since
prescribed. The heirs of Baloloy prayed that judgment be rendered in their favor, thus:
WHEREFORE, it is most respectfully prayed of the Honorable Court to DISMISS this case pursuant to
paragraph 15, et seq., hereof, and/or DECIDE it in favor of the defendants by UPHOLDING the sanctity of
OCT No. P-16540 and ordering plaintiff to:
1. RESPECT defendants' proprietary rights and interests on the property in question covered by OCT No. P16540;
2. VACATE it at his sole and exclusive expense, and never to set foot on it ever again;
3. PAY defendants:
a) MORAL DAMAGES at P50,000.00 EACH;
b) ACTUAL DAMAGES and UNREALIZED PROFITS atP1,000.00/MONTH COMPUTED UP TO THE TIME OF
PAYMENT PLUS LEGAL RATE OF INTEREST;
c) EXEMPLARY DAMAGES of P50,000.00
d) ATTY'S FEES and LITIGATION EXPENSES ofP100,000.00; and

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e) THE COSTS OF THIS SUIT.

DEFENDANTS pray for all other reliefs and remedies consistent with law and equity.22
The Evidence for the Petitioners
Sometime in 1982, Hular asked permission from Iluminado to construct his house on Lot No. 3353 near the
road leading to Biriran. Iluminado agreed, in the presence of his daughter, petitioner Adelina Baloloy. As per
the plan of Lot No. 3353 certified by a Director of the Bureau of Lands on November 6, 1961, Lot No. 3353
had an area of 9,302 square meters.23
As gleaned from the Sketch Plan of Lot Nos. 3347 and 3353 prepared on February 7, 1991 by Geodetic
Engineer Salvador Balilo, the houses of the Baloloy siblings and those of Astrologo and Alfredo were located
in Lot No. 3353.24 In the said sketch plan, Lot No. 3353 had an area of 9,302 square meters, while Lot No.
3347 had an area of 15,905 square meters. When apprised of Hular's claim over the property, the
petitioners and their co-heirs filed a complaint for unlawful detainer with the Municipal Trial Court of Juban,
docketed as Civil Case No. 331. The case was, however, dismissed for lack of jurisdiction.
On December 4, 1995, the trial court rendered judgment in favor of the respondent. The fallo of the decision
reads:

a/ Declaring plaintiff the absolute owner of the land in question, consisting of 1,405 square meters, more or
less, and entitled to the peaceful possession thereof;
b/ Ordering the defendants to reconvey the title to the plaintiff as far as the land in question is concerned
within fifteen (15) days counted from the finality of the decision, failing in which, the Clerk of Court is
hereby ordered to execute the necessary document of reconveyance of the title in favor of the plaintiff after
an approved survey plan is made;
c/ Ordering defendants to remove their houses from the land in question at their own expense within fifteen
(15) days after the decision has become final;
d/ Ordering the defendants to pay jointly and severally plaintiff the amount of P5,000.00 as attorney's
fees. P5,000.00 as incidental litigation expenses;
e/ To pay the costs.
SO ORDERED.25
The trial court ruled that the property subject of the complaint, with an area of 1,405 square meters, was
part of Lot No. 3347 which the Spouses Estopin owned, and which they later sold to Astrologo Hular. The
trial court also held that Iluminado committed fraud in securing the free patent and the title for the property
in question, and that when Victoriana Lagata executed the deed of absolute sale on the residential portion of
Lot No. 3347, she did not know that it formed part of Lot No. 3353. It further held that the action of the
plaintiff to nullify the title and patent was imprescriptible.
The petitioners filed on December 8, 1995 a motion to reopen the case to admit Tax Declaration Nos. 6957
and 4790 covering Lot No. 3347, under the names of Astrologo Hular and Victoriana Lagata, respectively, in
which it was declared that Lot No. 3347 was coconut land. The trial court ruled that the motion had been
mooted by its decision.
On appeal, the Court of Appeals rendered judgment affirming the decision of the trial court, and thereafter
denied the motion for reconsideration thereof.
The Present Petition
The petitioners, who are still residing on the subject property, filed their Petition for Review onCertiorari for
the reversal of the decision and resolution of the Court of Appeals.
The issues for resolution are:
(1) whether all the indispensable parties had been impleaded by the respondent in the trial court;
(2) whether the said respondent had a cause of action against the petitioners for the nullification of Free
Patent No. 384019 and OCT No. P-16540; for reconveyance and for possession of the subject property; and
for damages; and
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(3) whether the respondent had acquired ownership over the property through acquisitive prescription.
The first issue, while not raised by the parties in the trial court and in the Court of Appeals, is so interwoven
with the other issues raised therein and is even decisive of the outcome of this case; hence, such issue must
be delved into and resolved by this Court.26

We note that the action of the respondent in the trial court is for: (a) reinvidicatoria, to declare the
respondent the absolute owner of the subject property and its reconveyance to him as a consequence of the
nullification of Free Patent No. 384019 and OCT No. P-16540; (b) publiciana, to order the petitioners and the
other heirs of Iluminado Baloloy to vacate the property and deliver possession thereof to him; and (c)
damages and attorney's fees.
It is the contention of the respondent that the subject property was sold by Lagata to his father, Astrologo
Hular, in 1961. He adduced evidence that when his parents died intestate, they were survived by their
children, the respondent and his siblings Elena, Jose, Romeo, Anacleto, Leo, and Teresita. Article 1078 of the
Civil Code provides that where there are two or more heirs, the whole estate of the decedent is, before
partition, owned in common by such heirs, subject to the payment of the debts of the deceased. Until a
division is made, the respective share of each cannot be determined and every co-owner exercises, together
with his co-participants, joint ownership over the pro indiviso property, in addition to the use and enjoyment
of the same.
Under Article 487 of the New Civil Code, any of the co-owners may bring an action in ejectment. This article
covers all kinds of actions for the recovery of possession, including an accion publiciana and a reinvidicatory
action. A co-owner may bring such an action without the necessity of joining all the other co-owners as coplaintiffs because the suit is deemed to be instituted for the benefit of all. 27Any judgment of the court in
favor of the co-owner will benefit the others but if such judgment is adverse, the same cannot prejudice the
rights of the unimpleaded co-owners. If the action is for the benefit of the plaintiff alone who claims to be
the sole owner and entitled to the possession thereof, the action will not prosper unless he impleads the
other co-owners who are indispensable parties.
In this case, the respondent alone filed the complaint, claiming sole ownership over the subject
property and praying that he be declared the sole owner thereof. There is no proof that the other coowners had waived their rights over the subject property or conveyed the same to the respondent or such
co-owners were aware of the case in the trial court. The trial court rendered judgment declaring the
respondent as the sole owner of the property and entitled to its possession, to the prejudice of the latter's
siblings. Patently then, the decision of the trial court is erroneous.
Under Section 7, Rule 3 of the Rules of Court, the respondent was mandated to implead his siblings, being
co-owners of the property, as parties. The respondent failed to comply with the rule. It must, likewise, be
stressed that the Republic of the Philippines is also an indispensable party as defendant because the
respondent sought the nullification of OCT No. P-16540 which was issued based on Free Patent No. 384019.
Unless the State is impleaded as party-defendant, any decision of the Court would not be binding on it. It
has been held that the absence of an indispensable party in a case renders ineffective all the proceedings
subsequent to the filing of the complaint including the judgment. 28 The absence of the respondent's siblings,
as parties, rendered all proceedings subsequent to the filing thereof, including the judgment of the court,
ineffective for want of authority to act, not only as to the absent parties but even as to those present. 29
Even if we glossed over the procedural lapses of the respondent, we rule that he failed to prove the material
allegations of his complaint against the petitioners; and that he is not entitled to the reliefs prayed for.
The burden of proof is on the plaintiff to establish his case by the requisite quantum of evidence. If he
claims a right granted as created by law or under a contract of sale, he must prove his claim by competent
evidence. He must rely on the strength of his own evidence and not on the weakness or absence of the
evidence of that of his opponent.30 He who claims a better right to real estate property must prove not only
his ownership of the same but also the identity thereof.31 In Huy v. Huy,32 we held that where a property
subject of controversy is duly registered under the Torrens system, the presumptive conclusiveness of such
title should be given weight and in the absence of strong and compelling evidence to the contrary, the holder
thereof should be considered as the owner of the property until his title is nullified or modified in an
appropriate ordinary action. A Torrens Certificate is evidence of an indefeasible title to property in favor of

the person in whose name appears therein.33 Such holder is entitled to the possession of the property until
his title is nullified.
The petitioners aver that Lot No. 3347 owned by the Spouses Estopin was coconut, and not residential, land.
The petitioners contend that, under the deed of absolute sale, Victoriana Lagata executed on November 25,
1961 in favor of Astrologo Hular, she sold the residential portion of Lot No. 3347; however, the latter
constructed his house on a portion of Lot No. 3353 which Iluminado had purchased from Balbedina, now
covered by OCT No. P-16540. The petitioners assert that along with their mother Anacorita and their brother
Antonio Baloloy, they constructed their houses on a part of Lot No. 3353, titled in the name of their father
Iluminado; hence, they could not be dispossessed of the said property. The petitioners posit that, whether
the house of Hular was constructed on a portion of Lot No. 3353 of the property of Balbedina or Gruta is
irrelevant because both properties are now covered by OCT No. P-16540 under the name of Iluminado, their
predecessor-in-interest.
The Court of Appeals ruled that Victoriana Lagata owned the subject property, which turned out to be 1,405
square meters, and sold the same to Hular. In contrast, the RTC declared in its decision that while under the
deed of absolute sale executed by Irene Griarte in favor of Balbedina, Lot No. 3353 had an area of 6,666
square meters, Griarte actually owned only 4,651 square meters; a portion of the lot was actually owned by
Lino Estopin. Hence, Balbedina sold only 4,651 square meters to Iluminado 34 because he was aware that he
owned only 4,651 square meters of the land. It also held that, unknown to Lagata, a portion of Lot No. 3347
was declared as part of Lot No. 3353 when the lands in Juban were surveyed. The trial court concluded that
Lagata erroneously declared, under the deed of absolute sale executed on November 25, 1961 in favor of
Hular, that the property was part of Lot No. 3347.
The trial and appellate courts erred in their decisions.
The evidence on record shows that Irene Griarte owned a parcel of land with an area of 6,666 square
meters, more or less.35 When she sold the property to Martiniano Balbedina on August 14, 1945, it was
bounded on the south by the property of Lino Estopin. There was no trail yet between the property of Griarte
on the south and of Lino Estopin on the north. In the meantime, however, a road (trail) leading to Biriran
was established between the property of Balbedina on the south and that of Lino Estopin on the north.
Thereafter, a cadastral survey of the lands in Juban was conducted by the Bureau of Lands. The property of
Balbedina was designated as a portion of Lot No. 3353, while that of Estopin was designated as Lot No.
3347. The other portion of Lot No. 3353, with an area of 4,561 square meters, belonged to Alejandro Gruta.
Because of the construction of the road, the property of Balbedina, which was a part of Lot No. 3353, was
reduced to 4,651 square meters. Balbedina declared, under Tax Declaration No. 391, that Lot No. 3353 had
an area of 4,651 square meters and was coconut land36 and that his property was bounded on the south by
a trail (road). Lino Estopin declared Lot No. 3347 under his name for taxation purposes, in which he stated
that his property was bounded on the north by the trail going to Biriran. 37 Clearly, then, Lot No. 3353 and
Lot No. 3347 had a common boundary - the trail (road) going to Biriran.
Balbedina sold his property, which was a portion of Lot No. 3353, with an area of 4,651 square meters to
Iluminado Baloloy on June 4, 1951.38 Under the deed of absolute sale, the property was bounded on the
south by the trail (road) owned by Lino Estopin.39 The English translation of the deed of sale attached as
page 85 to the RTC Records, which both the trial court and the appellate court relied upon, is incorrect.
The original deed of absolute sale, which is in Spanish, states that the boundary of the property on the
south is "con camino, Lino Estopin," while the English version of the deed, indicates that the property is
bounded "on the south by Lino Estopin." Being an earlier document, the deed in Spanish signed by the
parties therefore should prevail. Conformably to such deed, Iluminado Baloloy declared in Tax Declaration
No. 5359 under his name that the property is bounded on the south by a trail, 40 and not by Lot No. 3347
owned by Lino Estopin.

The respondent failed to adduce any documentary evidence to prove how the Spouses Estopin acquired the
disputed property. The respondent's reliance on the testimonies of Melissa Estopin, the daughter of the
Spouses Estopin, and on Porfirio Guamos as well as the May 8, 1993 Affidavit of Martiniano Balbedina, and
the deed of sale executed by Victoriana Lagata on November 27, 1961 in favor of Astrologo Hular to
corroborate his claim over the lot in question, is misplaced.
First. Per the testimony of Porfirio Guamos, the witness of the respondent, Lino Estopin purchased the
disputed property in 1941 from Irene Griarte and insisted that there was a deed of sale evidencing the sale:
Atty. Dealca:
Q The area of the land in question is 1,405 sq. m., you claim that way back in 1944 the owner of the land
was Lino Estopin; '41 to '44?
chanroblesvirtualawlibrary

A 1941.
Q And you said that Lino Estopin was able to acquire the land by purchase?

chanroble svirtualawlibrary

A That was very long time when Lino Estopin sold the property.
Q My question is whether you know because you testified earlier that Lino Estopin was able to acquire the
land by purchase; do you confirm that?
chanroble svirtualawlibrary

A Yes, Sir.
Q From whom?

chanroblesvirtualawlibrary

A From Irene Griarte.

Q Were you present when that sale was consummated?

chanroblesvirtualawlibrary

A I was not there.

Q So you do not know how much was it bought by Lino Estopin from Irene Griarte?

chanroblesvirtualawlibrary

A No, Sir.
Q You do not know whether a document to that effect was actually drafted and executed?
A There was.
Q Have you seen the document?

chanroble svirtualawlibrary

A I did not see but there was a document.

Q You maintain there was a document but you did not see a document, is that it?

chanroblesvirtualawlibrary

A In my belief there was a document.

Q In your belief, how did you organize that belief when you did not see a document?

chanroblesvirtualawlibrary

chanroblesvirtualawlibrary

A I insist there was a document.

Q That is why, why are you insisting when you did not see a document?

chanroblesvirtualawlibrary

A Well, during the sale that document was used.

Q How was it used when you did not see that document?

chanroblesvirtualawlibrary

A When the deed of sale was executed I did not see the document, but I insist there was a document.
Q That's why, how were you able to say before the court that there was a document when you contend that
you did not see any?
chanroblesvirtualawlibrary

A There was basis in the sale - the sale was based on a document. You cannot sell a property without
document? (sic)
Q Is that your belief?

chanroblesvirtualawlibrary

A Yes, Sir.
Q But you did not see any document?

chanroblesvirtualawlibrary

Atty. Diesta:
Already answered.
Witness:
A I did not see.
Atty. Dealca:
Q You said that that document was used when the property was sold by Lino Estopin to Alfredo Hular. . .
A In 1961. Yes.41
However, the respondent failed to adduce in evidence the said deed or even an authentic copy thereof. The
respondent did not offer any justification for his failure to adduce the same in evidence. As against the
respondent's verbal claim that his father acquired the property from Lagata, the Torrens title of Iluminado
Baloloy must prevail.42
Second. The respondent even failed to adduce in evidence any tax declarations over the disputed property
under the name of Irene Griarte and/or Lino Estopin, or realty tax payment receipts in their names from
1941 to November 1961. The documents are circumstantial evidence to prove that Irene Griarte claimed
ownership over the disputed property and that Lino Estopin acquired the same from her. After all, such tax
declarations and tax receipts can be strong evidence of ownership of land when accompanied by possession
for a period sufficient for acquisitive prescription. 43
Third. The respondent even failed to adduce in evidence Tax Declaration No. 4790 covering the two parcels
of land under the name of Lino Estopin to prove his claim that Lot No. 3347 consisted of agricultural and
residential lands. We note that the petitioners appended a certified true copy of Tax Declaration No. 4790

under the name of Victoriana Lagata over Lot No. 3347 to their Motion to Reopen the Case. In the said
declaration, Lot No. 3347 was described as coconut land; this is contrary to the respondent's claim that the
said lot was then residential, and that the boundary of the property on the north was the road to Biriran
which, in turn, is consistent with the petitioners' claim.44 Unfortunately, the trial court denied the said motion
on the ground that it was mooted by its decision.
Fourth. During the cadastral survey of lands in Juban, the lot of Gruta and that of Balbedina, inclusive of the
subject property, were designated as Lot No. 3353 with a total area of 9,302 square meters under their
names, while that of Lino Estopin was designated as Lot No. 3347 with an area of 15,906 square meters.
Iluminado Baloloy applied for a free patent over Lot No. 3353, including the disputed property, under his
name. The respondent failed to adduce any evidence that the Spouses Estopin and/or Astrologo Hular
opposed Balbedina and/or Iluminado's claim of ownership of Lot No. 3353 during the survey and after the
filing of the application. A propos is our ruling in Urquiaga v. Court of Appeals: 45
As succinctly observed by respondent Court of Appeals in assessing the totality of the evidence '
We do not agree with defendants that they are also the occupants and possessors of the subject lot just
because it "is adjacent to their titled property." Precisely, the boundaries of defendants' titled property were
determined, delineated and surveyed during the cadastral survey of Dipolog and thereafter indicated in their
certificate of title in order that the extent of their property will be known and fixed. Since the subject lot was
already found to be outside their titled property, defendants have no basis in claiming it or other adjacent
lots for that matter. Otherwise, the very purpose of the cadastral survey as a process of determining the
exact boundaries of adjoining properties will be defeated.
Defendants' own title, O.C.T. No. 0-357 (in the names of Jose Aguirre and Cristina Gonzales), in fact belies
their claim of occupation and possession over the adjacent subject lot. Examining said title, we note that:
(1) the cadastral survey of Dipolog was conducted from January, 1923 to November 1925; (2) defendants'
titled property was one of those lots surveyed and this was designated as Lot No. 2623; (3) during the
survey, it was already determined and known that Lot No. 2623 is bounded on the northeast, southeast,
southwest and west by Lot No. 4443 (as we have seen in our narration of facts, the subject lot is a
subdivision lot of Lot No. 6552 which was originally identified as Lot No. 4443-B-1, Dipolog Cadastre 85
Ext.: hence, the subject lot is a portion of Lot No. 4443); and (4) O.C.T. No. 0-357 was issued on October
11, 1965 on the strength of the judgment rendered on July 31 (sic), 1941 by the then Court of First
Instance of Zamboanga del Norte in Cadastral Case No. 6, LRC Cadastral Record No. 756.
From the foregoing facts, we find that as early as January, 1923 when the cadastral survey was started, the
boundaries of Lot Nos. 2623 and 4443 were already determined and delineated. Since the subject lot was
surveyed to be part of Lot No. 4443, it means that during that time defendants' predecessors-in-interest
never claimed ownership or possession over the subject lot. Otherwise, they would have complained so that
the subject lot could be excluded from Lot No. 4443 and included in Lot No. 2623, they being adjacent lots.
It is obvious then that defendants' predecessors only claimed Lot No. 2623 and they pursued their claim in
Cadastral Case No. 6, LRC Cadastral Record No. 756 until O.C.T. No. 0-357 was issued to them. The
contention of defendants that they and their predecessors-in-interest occupied and possessed the subject lot
since time immemorial therefore is not true.46
Fifth. Under the deed of absolute sale dated November 25, 1961, Lagata sold to Astrologo Hular Lot No.
3347, and not Lot No. 3353. In Veterans Federation of the Philippines v. Court of Appeals, 47 we ruled that:
Petitioner VFP maintains that the deed of sale was valid and enforceable and that it was perfected at the
very moment that the parties agreed upon the thing which was the object of the sale and upon the price.
The parties herein had agreed on the parcel of land that petitioner would purchase from respondent PNR,
and the same was described therein; thus, petitioner VFP cannot conveniently set aside the technical
description in this agreement and insist that it is the legal owner of the property erroneously described in

the certificate of title. Petitioner can only claim right of ownership over the parcel of land that was the object
of the deed of sale and nothing else.48
Sixth. Under the said deed of sale dated November 11, 1961, Victoriana Lagata sold Lot No. 3347 which had
an area of 15,906 square meters and covered by Tax Declaration No. 4790. The deed does not state that
what was sold was only a portion of Lot No. 3347, excluding therefrom the disputed property. This is
understandable, since the subject property is a portion of Lot No. 3353 owned by Alejandro Gruta and
Iluminado Baloloy, and not of Lino Estopin and/or Victoriana Lagata. Lagata could not have sold a portion of
Lot No. 3353 which she does not own. As the Latin adage goes: "NEMO DAT QUOD NON HABET."
Seventh. The Balbedina's Affidavit dated May 8, 1993 offered by the respondent to prove the contents
thereof is inadmissible in evidence against the petitioners. Balbedina did not testify; as such, the petitioners
were deprived of their right to cross-examine him. The said affidavit is thus hearsay and barren of probative
weight. The affidavit varies the contents of the deed of absolute sale which he (Balbedina) executed in favor
of Iluminado more than forty years earlier. In the said affidavit, it was made to appear that Balbedina sold to
Iluminado on June 4, 1951 only a portion of Lot 3353 with an area of 3,333 square meters, when under the
said deed of absolute sale, the property that was sold consisted of 4,651 square meters. The affidavit is
proscribed by Section 9, Rule 130 of the Rules of Court, which provides:
Section 9. Evidence of written agreements. - When the terms of an agreement have been reduced to
writing, it is considered as containing all the terms agreed upon and there can be, between the parties and
their successors in interest, no evidence of such terms other than the contents of the written agreement.
...
It bears stressing that the deed of absolute sale executed by Balbedina in favor of Baloloy was notarized by
the Justice of the Peace who was an Ex-Officio Notary Public; hence, entitled to full probative weight.
Eighth. The Special Sketch Plan of Lot No. 3353 prepared by Geodetic Engineer Rodolfo P. Cunanan 49 cannot
prevail over OCT No. P-16540. In fact, the plan even buttressed the case for the petitioners because it
shows that the subject property is a portion of Lot No. 3353, and not of Lot No. 3347, covered by OCT No.
P-16540 under the name of Iluminado Baloloy, the deceased father of the petitioners.
Ninth. The conclusion of the RTC that Lagata in fact sold a portion of Lot No. 3347 under the deed of
absolute sale dated November 25, 1961, unaware that the property was a part of Lot No. 3353, is based on
mere speculations and surmises.
Iluminado Baloloy included in his application for a free patent the property of Alejandro Gruta, and was able
to secure a free patent over said property in addition to his own. As such, Gruta, not the respondent, is the
proper party to assail such free patent, as well as OCT No. P-16540 which was issued based thereon.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The decisions of the Regional Trial Court
and the Court of Appeals are REVERSED and SET ASIDE. The complaint of the respondent isDISMISSED.
No costs.
SO ORDERED.

RIZALINO,
substituted
by
his
heirs,
JOSEFINA,
ROLANDO
and
FERNANDO,
ERNESTO,
LEONORA,
BIBIANO,
JR.,
LIBRADO
and
ENRIQUETA, all
surnamed
OESMER,

G.R. No. 157493

Present:

YNARES-SANTIAGO, J.,

Chairperson,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and

Petitioners,

- versus -

CHICO-NAZARIO, JJ.

Promulgated:

February 5, 2007
PARAISO
DEVELOPMENT
CORPORATION,
Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari under

Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to
reverse and set aside the Court of Appeals Decision [1] dated 26
April 2002 in CA-G.R. CV No. 53130 entitled, Rizalino, Ernesto,
Leonora, Bibiano, Jr., Librado, Enriqueta, Adolfo, and Jesus, all

surnamed Oesmer vs. Paraiso Development Corporation, as

modified by its Resolution[2] dated 4 March 2003, declaring the
Contract to Sell valid and binding with respect to the undivided
proportionate shares of the six signatories of the said document,
herein petitioners, namely: Ernesto, Enriqueta, Librado, Rizalino,
Bibiano, Jr., and Leonora (all surnamed Oesmer); and ordering
them to execute the Deed of Absolute Sale concerning their 6/8
share over the subject parcels of land in favor of herein
respondent Paraiso Development Corporation, and to pay the
latter the attorneys fees plus costs of the suit. The assailed
Decision, as modified, likewise ordered the respondent to tender
payment to the petitioners in the amount of P3,216,560.00
representing the balance of the purchase price of the subject
parcels of land.

The facts of the case are as follows:

Petitioners Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado,

and Enriqueta, all surnamed Oesmer, together with Adolfo
Oesmer (Adolfo) and Jesus Oesmer (Jesus), are brothers and
sisters, and the co-owners of undivided shares of two parcels of
agricultural and tenanted land situated in Barangay Ulong Tubig,
Carmona, Cavite, identified as Lot 720 with an area of 40,507
square meters (sq. m.) and Lot 834 containing an area of 14,769
sq. m., or a total land area of 55,276 sq. m. Both lots are
unregistered and originally owned by their parents, Bibiano
Oesmer and Encarnacion Durumpili, who declared the lots for
taxation purposes under Tax Declaration No. 3438 [3] (cancelled by
I.D. No. 6064-A) for Lot 720 and Tax Declaration No.
3437[4] (cancelled by I.D. No. 5629) for Lot 834. When the
spouses Oesmer died, petitioners, together with Adolfo and Jesus,
acquired the lots as heirs of the former by right of succession.

Respondent Paraiso Development Corporation is known to

be engaged in the real estate business.

Sometime in March 1989, Rogelio Paular, a resident and

former Municipal Secretary of Carmona, Cavite, brought along
petitioner Ernesto to meet with a certain Sotero Lee, President of
respondent Paraiso Development Corporation, at Otani Hotel
in Manila. The said meeting was for the purpose of brokering the
sale of petitioners properties to respondent corporation.

Pursuant to the said meeting, a Contract to Sell [5] was

drafted by the Executive Assistant of Sotero Lee, Inocencia
Almo. On 1 April 1989, petitioners Ernesto and Enriqueta signed
the aforesaid Contract to Sell. A check in the amount
of P100,000.00, payable to Ernesto, was given as option
money. Sometime thereafter, Rizalino, Leonora, Bibiano, Jr.,
and Librado also signed the said Contract to Sell. However, two of
the brothers, Adolfo and Jesus, did not sign the document.

On 5 April 1989, a duplicate copy of the instrument was

returned
to
respondent
corporation. On 21
April
1989,
respondent brought the same to a notary public for notarization.

In a letter[6] dated 1 November 1989, addressed to

respondent corporation, petitioners informed the former of their
intention to rescind the Contract to Sell and to return the amount
of P100,000.00 given by respondent as option money.

Respondent did not respond to the aforesaid letter. On 30

May 1991, herein petitioners, together with Adolfo and Jesus, filed

a Complaint[7] for Declaration of Nullity or for Annulment of Option

Agreement or Contract to Sell with Damages before the Regional
Trial Court (RTC) of Bacoor, Cavite. The said case was docketed as
Civil Case No. BCV-91-49.

During trial, petitioner Rizalino died. Upon motion of

petitioners, the trial court issued an Order, [8] dated 16 September
1992, to the effect that the deceased petitioner be substituted by
his surviving spouse, Josefina O. Oesmer, and his children,
Rolando O. Oesmer and Fernando O. Oesmer. However, the name
of Rizalino was retained in the title of the case both in the RTC
and the Court of Appeals.

After trial on the merits, the lower court rendered a

Decision[9] dated 27 March 1996 in favor of the respondent, the
dispositive portion of which reads:

WHEREFORE, premises considered, judgment is

hereby rendered in favor of herein [respondent] Paraiso
Development Corporation. The assailed Contract to Sell
is valid and binding only to the undivided proportionate
share of the signatory of this document and recipient of
the
check,
[herein
petitioner]
co-owner Ernesto
Durumpili Oesmer. The latter is hereby ordered to
execute the Contract of Absolute Sale concerning his 1/8
share over the subject two parcels of land in favor of
herein [respondent] corporation, and to pay the latter the
attorneys fees in the sum of Ten Thousand (P10,000.00)
Pesos plus costs of suit.

The counterclaim of [respondent] corporation is

hereby Dismissed for lack of merit.[10]

Unsatisfied, respondent appealed the said Decision before

the Court of Appeals. On 26 April 2002, the appellate court
rendered a Decision modifying the Decision of the court a quo by
declaring that the Contract to Sell is valid and binding with
respect to the undivided proportionate shares of the six
signatories of the said document, herein petitioners, namely:
Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all
surnamed Oesmer). The decretal portion of the said Decision
states that:

WHEREFORE, premises considered, the Decision

of the court a quo is hereby MODIFIED. Judgment is
hereby rendered in favor of herein [respondent] Paraiso
Development Corporation. The assailed Contract to Sell is
valid and binding with respect to the undivided
proportionate share of the six (6) signatories of this
document,
[herein
petitioners],
namely,
Ernesto,
Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all
surnamed Oesmer). The said [petitioners] are hereby
ordered to execute the Deed of Absolute Sale concerning
their 6/8 share over the subject two parcels of land and in
favor of herein [respondent] corporation, and to pay the
latter the attorneys fees in the sum of Ten Thousand
Pesos (P10,000.00) plus costs of suit.[11]

Aggrieved by the above-mentioned Decision, petitioners

filed a Motion for Reconsideration of the same on 2 July
2002. Acting on petitioners Motion for Reconsideration, the Court
of Appeals issued a Resolution dated 4 March 2003, maintaining
its Decision dated 26 April 2002, with the modification that
respondent tender payment to petitioners in the amount
of P3,216,560.00, representing the balance of the purchase price
of the subject parcels of land. The dispositive portion of the said
Resolution reads:

WHEREFORE, premises considered, the assailed

Decision
is
hereby modified. Judgment
is
hereby
rendered in favor of herein [respondent] Paraiso
Development Corporation. The assailed Contract to Sell
is valid and binding with respect to the undivided
proportionate shares of the six (6) signatories of this
document,
[herein
petitioners],
namely,
Ernesto,
Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all
surnamed Oesmer). The said [petitioners] are hereby
ordered to execute the Deed of Absolute Sale concerning
their 6/8 share over the subject two parcels of land in
favor of herein [respondent] corporation,
and to
pay the latter attorneys fees in the sum of Ten Thousand
Pesos (P10,000.00) plus costs of suit. Respondent is
likewise ordered to tender payment to the above-named
[petitioners] in the amount of Three Million Two Hundred
Sixteen
Thousand
Five
Hundred
Sixty
Pesos
(P3,216,560.00) representing the balance of the purchase
[12]
price of the subject two parcels of land.

Hence, this Petition for Review on Certiorari.

Petitioners come before this Court arguing that the Court of

Appeals erred:

I.

On a question of law in not holding that, the

supposed Contract to Sell (Exhibit D) is not binding
upon petitioner Ernesto Oesmers co-owners (herein
petitioners Enriqueta, Librado, Rizalino, Bibiano, Jr.,
and Leonora).

II.

On a question of law in not holding that, the

supposed Contract to Sell (Exhibit D) is void
altogether considering that respondent itself did not
sign it as to indicate its consent to be bound by its
terms. Moreover, Exhibit D is really a unilateral
promise to sell without consideration distinct from
the price, and hence, void.

Petitioners assert that the signatures of five of them

namely: Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora, on
the margins of the supposed Contract to Sell did not confer
authority on petitioner Ernesto as agent to sell their respective
shares in the questioned properties, and hence, for lack of written
authority from the above-named petitioners to sell their
respective shares in the subject parcels of land, the supposed
Contract to Sell is void as to them. Neither do their signatures
signify their consent to directly sell their shares in the questioned
properties. Assuming that the signatures indicate consent, such
consent was merely conditional. The effectivity of the alleged

Contract to Sell was subject to a suspensive condition, which is

the approval of the sale by all the co-owners.

Petitioners also assert that the supposed Contract to Sell

(Exhibit D), contrary to the findings of the Court of Appeals, is not
couched in simple language.

They further claim that the supposed Contract to Sell does

not bind the respondent because the latter did not sign the said
contract as to indicate its consent to be bound by its
terms. Furthermore, they maintain that the supposed Contract to
Sell is really a unilateral promise to sell and the option money
does not bind petitioners for lack of cause or consideration
distinct from the purchase price.

The Petition is bereft of merit.

It is true that the signatures of the five petitioners, namely:

Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora, on the
Contract to Sell did not confer authority on petitioner Ernesto as
agent authorized to sell their respective shares in the questioned
properties because of Article 1874 of the Civil Code, which
expressly provides that:

Art. 1874. When a sale of a piece of land or any

interest therein is through an agent, the authority of the
latter shall be in writing; otherwise, the sale shall be void.

The law itself explicitly requires a written authority before

an agent can sell an immovable. The conferment of such an
authority should be in writing, in as clear and precise terms as
possible. It is worth noting that petitioners signatures are found
in the Contract to Sell. The Contract is absolutely silent on the
establishment of any principal-agent relationship between the five
petitioners and their brother and co-petitioner Ernesto as to the
sale of the subject parcels of land. Thus, the Contract to Sell,
although signed on the margin by the five petitioners, is not
sufficient to confer authority on petitioner Ernesto to act as their
agent in selling their shares in the properties in question.

However, despite petitioner Ernestos lack of written

authority from the five petitioners to sell their shares in the
subject parcels of land, the supposed Contract to Sell remains
valid and binding upon the latter.

As can be clearly gleaned from the contract itself, it is not

only petitioner Ernesto who signed the said Contract to Sell; the
other five petitioners also personally affixed their signatures
thereon. Therefore, a written authority is no longer necessary in
order to sell their shares in the subject parcels of land because,
by affixing their signatures on the Contract to Sell, they were not
selling their shares through an agent but, rather, they were selling
the same directly and in their own right.

The Court also finds untenable the following arguments

raised by petitioners to the effect that the Contract to Sell is not
binding upon them, except to Ernesto, because: (1) the signatures
of five of the petitioners do not signify their consent to sell their
shares in the questioned properties since petitioner Enriqueta
merely signed as a witness to the said Contract to Sell, and that

the other petitioners, namely: Librado, Rizalino, Leonora, and

Bibiano, Jr., did not understand the importance and consequences
of their action because of their low degree of education and the
contents of the aforesaid contract were not read nor explained to
them; and (2) assuming that the signatures indicate consent,
such consent was merely conditional, thus, the effectivity of the
alleged Contract to Sell was subject to a suspensive condition,
which is the approval by all the co-owners of the sale.

It is well-settled that contracts are perfected by mere

consent, upon the acceptance by the offeree of the offer made by
the offeror. From that moment, the parties are bound not only to
the fulfillment of what has been expressly stipulated but also to
all the consequences which, according to their nature, may be in
keeping with good faith, usage and law. To produce a contract,
the acceptance must not qualify the terms of the offer. However,
the acceptance may be express or implied. For a contract to
arise, the acceptance must be made known to the
offeror. Accordingly, the acceptance can be withdrawn or revoked
before it is made known to the offeror.[13]

In the case at bar, the Contract to Sell was perfected when

the petitioners consented to the sale to the respondent of their
shares in the subject parcels of land by affixing their signatures
on the said contract. Such signatures show their acceptance of
what has been stipulated in the Contract to Sell and such
acceptance was made known to respondent corporation when the
duplicate copy of the Contract to Sell was returned to the latter
bearing petitioners signatures.

As to petitioner Enriquetas claim that she merely signed as

a witness to the said contract, the contract itself does not say

so. There was no single indication in the said contract that she
signed the same merely as a witness. The fact that her signature
appears on the right-hand margin of the Contract to Sell is
insignificant. The contract indisputably referred to the Heirs of
Bibiano and Encarnacion Oesmer, and since there is no showing
that Enriqueta signed the document in some other capacity, it can
be safely assumed that she did so as one of the parties to the
sale.

Emphasis should also be given to the fact that petitioners

Ernesto and Enriqueta concurrently signed the Contract to
Sell. As the Court of Appeals mentioned in its Decision, [14] the
records of the case speak of the fact that petitioner Ernesto,
together with petitioner Enriqueta, met with the representatives
of the respondent in order to finalize the terms and conditions of
the Contract to Sell. Enriqueta affixed her signature on the said
contract when the same was drafted. She even admitted that she
understood the undertaking that she and petitioner Ernesto made
in connection with the contract. She likewise disclosed that
pursuant to the terms embodied in the Contract to Sell, she
updated the payment of the real property taxes and transferred
the Tax Declarations of the questioned properties in her name.
[15]
Hence, it cannot be gainsaid that she merely signed the
Contract to Sell as a witness because she did not only actively
participate in the negotiation and execution of the same, but her
subsequent actions also reveal an attempt to comply with the
conditions in the said contract.

With respect to the other petitioners assertion that they

did not understand the importance and consequences of their
action because of their low degree of education and because the
contents of the aforesaid contract were not read nor explained to
them, the same cannot be sustained.

We only have to quote the pertinent portions of the Court of

Appeals Decision, clear and concise, to dispose of this
issue. Thus,

First, the Contract to Sell is couched in such a simple

language which is undoubtedly easy to read and
understand. The terms of the Contract, specifically the
amount of P100,000.00 representing the option money
paid by [respondent] corporation, the purchase price
of P60.00 per square meter or the total amount
of P3,316,560.00 and a brief description of the subject
properties are well-indicated thereon that any prudent
and mature man would have known the nature and extent
of the transaction encapsulated in the document that he
was signing.

Second, the following circumstances, as testified by

the witnesses and as can be gleaned from the records of
the case clearly indicate the [petitioners] intention to be
bound by the stipulations chronicled in the said Contract
to Sell.

As to [petitioner] Ernesto, there is no dispute as to

his intention to effect the alienation of the subject
property as he in fact was the one who initiated the
negotiation process and culminated the same by affixing
his signature on the Contract to Sell and by taking receipt
of the amount of P100,000.00 which formed part of the
purchase price.

xxxx

As to [petitioner] Librado, the [appellate court] finds

it preposterous that he willingly affixed his signature on a
document written in a language (English) that he
purportedly does not understand. He testified that the
document was just brought to him by an 18 year old niece
named Baby and he was told that the document was for a
check to be paid to him. He readily signed the Contract
to Sell without consulting his other siblings. Thereafter,
he exerted no effort in communicating with his brothers
and sisters regarding the document which he had signed,
did not inquire what the check was for and did not
thereafter ask for the check which is purportedly due to
him as a result of his signing the said Contract to
Sell. (TSN, 28 September 1993, pp. 22-23)

The [appellate court] notes that Librado is a 43 year

old family man (TSN, 28 September 1993, p. 19). As
such, he is expected to act with that ordinary degree of
care and prudence expected of a good father of a
family. His
unwitting
testimony
is
just
divinely
disbelieving.

The other [petitioners] (Rizalino, Leonora and

Bibiano Jr.) are likewise bound by the said Contract to
Sell. The theory adopted by the [petitioners] that
because of their low degree of education, they did not
understand the contents of the said Contract to Sell is
devoid of merit. The [appellate court] also notes that
Adolfo (one of the co-heirs who did not sign) also possess
the same degree of education as that of the signing co-

heirs (TSN, 15 October 1991, p. 19). He, however, is

employed at the Provincial Treasury Office at Trece
Martirez, Cavite and has even accompanied Rogelio
Paular to the Assessors Office to locate certain missing
documents which were needed to transfer the titles of the
subject properties. (TSN, 28 January 1994, pp. 26 &
35) Similarly, the other co-heirs [petitioners], like Adolfo,
are far from ignorant, more so, illiterate that they can be
extricated from their obligations under the Contract to
Sell which they voluntarily and knowingly entered into
with the [respondent] corporation.

The Supreme Court in the case of Cecilia Mata v.

Court of Appeals (207 SCRA 753 [1992]), citing the case
of Tan Sua Sia v. Yu Baio Sontua (56 Phil. 711),
instructively ruled as follows:

The Court does not accept the petitioners claim

that she did not understand the terms and conditions of
the transactions because she only reached Grade Three
and was already 63 years of age when she signed the
documents. She was literate, to begin with, and her age
did not make her senile or incompetent. x x x.

At any rate, Metrobank had no obligation to explain

the documents to the petitioner as nowhere has it been
proven that she is unable to read or that the contracts
were written in a language not known to her. It was her
responsibility to inform herself of the meaning and
consequence of the contracts she was signing and, if she
found them difficult to comprehend, to consult other
persons, preferably lawyers, to explain them to her. After

all, the transactions involved not only a few hundred or

thousand pesos but, indeed, hundreds of thousands of
pesos.

As the Court has held:

x x x The rule that one who signs a contract is presumed

to know its contents has been applied even to contracts
of illiterate persons on the ground that if such persons are
unable to read, they are negligent if they fail to have the
contract read to them. If a person cannot read the
instrument, it is as much his duty to procure some reliable
persons to read and explain it to him, before he signs it,
as it would be to read it before he signed it if he were able
to do and his failure to obtain a reading and explanation
of it is such gross negligence as will estop from avoiding it
on the ground that he was ignorant of its contents.[16]

That the petitioners really had the intention to dispose of

their shares in the subject parcels of land, irrespective of whether
or not all of the heirs consented to the said Contract to Sell, was
unveiled by Adolfos testimony as follows:

ATTY. GAMO: This alleged agreement between you and

your other brothers and sisters that unless
everybody will agree, the properties would not be
sold, was that agreement in writing?

WITNESS: No sir.

ATTY. GAMO: What you are saying is that when your

brothers and sisters except Jesus and you did not
sign that agreement which had been marked as
[Exhibit] D, your brothers and sisters were grossly
violating your agreement.

WITNESS: Yes, sir, they violated what we have agreed

upon.[17]

We also cannot sustain the allegation of the petitioners that

assuming the signatures indicate consent, such consent was
merely conditional, and that, the effectivity of the alleged
Contract to Sell was subject to the suspensive condition that the
sale be approved by all the co-owners. The Contract to Sell is
clear enough. It is a cardinal rule in the interpretation of
contracts that if the terms of a contract are clear and leave no
doubt upon the intention of the contracting parties, the literal
meaning of its stipulation shall control. [18] The terms of the
Contract to Sell made no mention of the condition that before it
can become valid and binding, a unanimous consent of all the
heirs is necessary. Thus, when the language of the contract is
explicit, as in the present case, leaving no doubt as to the
intention of the parties thereto, the literal meaning of its
stipulation is controlling.

In addition, the petitioners, being owners of their respective

undivided shares in the subject properties, can dispose of their
shares even without the consent of all the co-heirs. Article 493 of
the Civil Code expressly provides:

Article 493. Each co-owner shall have the full

ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the
mortgage, with respect to the co-owners, shall
be limited to the portion which may be allotted to him in
the division upon the termination of the co-ownership.
[Emphases supplied.]

Consequently, even without the consent of the two co-heirs,

Adolfo and Jesus, the Contract to Sell is still valid and binding with
respect to the 6/8 proportionate shares of the petitioners, as
properly held by the appellate court.

Therefore, this Court finds no error in the findings of the

Court of Appeals that all the petitioners who were signatories in
the Contract to Sell are bound thereby.

The final arguments of petitioners state that the Contract to

Sell is void altogether considering that respondent itself did not
sign it as to indicate its consent to be bound by its terms; and
moreover, the Contract to Sell is really a unilateral promise to sell
without consideration distinct from the price, and hence, again,
void. Said arguments must necessarily fail.

The Contract to Sell is not void merely because it does not

bear the signature of the respondent corporation. Respondent
corporations consent to be bound by the terms of the contract is
shown in the uncontroverted facts which established that there
was partial performance by respondent of its obligation in the said
Contract to Sell when it tendered the amount of P100,000.00 to
form part of the purchase price, which was accepted and
acknowledged expressly by petitioners. Therefore, by force of
law, respondent is required to complete the payment to enforce
the terms of the contract. Accordingly, despite the absence of
respondents signature in the Contract to Sell, the former cannot
evade its obligation to pay the balance of the purchase price.

As a final point, the Contract to Sell entered into by the

parties is not a unilateral promise to sell merely because it used
the word option money when it referred to the amount
of P100,000.00, which also form part of the purchase price.

Settled is the rule that in the interpretation of contracts, the

ascertainment of the intention of the contracting parties is to be
discharged by looking to the words they used to project that
intention in their contract, all the words, not just a particular word
or two, and words in context, not words standing alone. [19]

In the instant case, the consideration of P100,000.00 paid

by respondent to petitioners was referred to as option
money. However, a careful examination of the words used in the
contract indicates that the money is not option money
but earnest money. Earnest money and option money are
not the same but distinguished thus: (a) earnest money is part of
the purchase price, while option money is the money given as a
distinct consideration for an option contract; (b) earnest money is

given only where there is already a sale, while option money

applies to a sale not yet perfected; and, (c) when earnest money
is given, the buyer is bound to pay the balance, while when the
would-be buyer gives option money, he is not required to buy, but
may even forfeit it depending on the terms of the option. [20]

The sum of P100,000.00 was part of the purchase

price. Although the same was denominated as option money, it
is actually in the nature of earnest money or down payment when
considered with the other terms of the contract. Doubtless, the
agreement is not a mere unilateral promise to sell, but, indeed, it
is a Contract to Sell as both the trial court and the appellate court
declared in their Decisions.

WHEREFORE,
premises
considered,
the
Petition
is DENIED, and the Decision and Resolution of the Court of
Appeals dated 26 April 2002 and 4 March 2003, respectively,
are AFFIRMED, thus, (a) the Contract to Sell is DECLARED valid
and binding with respect to the undivided proportionate shares in
the subject parcels of land of the six signatories of the said
document, herein petitioners Ernesto, Enriqueta, Librado, Rizalino,
Bibiano, Jr., and Leonora (all surnamed Oesmer); (b) respondent
is ORDEREDto tender payment to petitioners in the amount
of P3,216,560.00 representing the balance of the purchase price
for the latters shares in the subject parcels of land; and (c)
petitioners are further ORDERED to execute in favor of
respondent the Deed of Absolute Sale covering their shares in the
subject parcels of land after receipt of the balance of the purchase
price, and to pay respondent attorneys fees plus costs of the
suit. Costs against petitioners.

SO ORDERED.

AGUIRRE, ET AL. vs. COURT OF APPEALS, ET AL.

G.R. No. 122249 January 29, 2004
FACTS:
Leocadio Medrano and his first wife Emilia owned a piece of land. After the death
of Emilia, Leocadio married his second wife Miguela. When Leocadio died, all his heirs
agreed that Sixto Medrano, a child of the first marriage, should manage and administer the
said property. After Sixto died, his heirs learned that he had executed an Affidavit of Transfer
of Real Property in which he falsely stated that he was the only heir of Leocadio. It turned
out that while Sixto were still alive, he sold a portion of the subject land tp Tiburcio Balitaan
and another portion to Maria Bacong, Maria Bacong later sold the said portion to Rosendo
Bacong. Petitioners, all heirs of Leocadio who were affected by the sale demanded
reconveyance of the portions sold by Sixto but the 3 vendees refused. Resultantly,
petitioners filed a suit against them seeking the nullity of the documents and partition
thereof. The vendees contended that they acquired the property under the valid deed of
sale and petitioners cause of action was barred by laches and prescription. Tiburcio also
contended that he is an innocent purchaser for value.
ISSUE:
Whether or not there was a valid sale between Sixto Medrano and the three
purchases considering the fact that it was made without the consent of the co-owners.

HELD:
Under Article 493 of the New Civil Code, a sale by a co-owner of the whole
property as his will affect only his own share but not those of the other co-owners who did
not consent to the sale). The provision clearly provides that the sale or other disposition
affects only the sellers share, and the transferee gets only what corresponds to his
grantors share in the partition of the property owned in common. Since a co-owner is
entitled to sell his undivided share, a sale of the entire property by one co-owner without the
consent of the other co-owner is not null and void; only the rights of the co-owner-seller are
transferred, thereby making the buyer a co-owner of the property. It is clear therefore that
the deed of sale executed by Sixto in favor of Tiburcio Balitaan is a valid conveyance only
insofar as the share of Sixto in the co-ownership is concerned. Acts which may be
considered adverse to strangers may not be considered adverse in so far as co-owners are
concerned. A mere silent possession by a co-owner, his receipts of rentals, fruits or profits
from the property, the erection of buildings and fences and planting of trees thereon, and
the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne

out by clear and convincing evidence that he exercised such acts of possession which
unequivocally constituted an ouster or deprivation of the rights of the other co-owners.
Thus, in order that a co-owners possession may be deemed adverse to the cestui
que trust or the other co-owners, the following elements must concur:
(1) that he has performed unequivocal acts of repudiation amounting to an ouster of
the cestui que trust or the other co-owners;
(2) that such positive acts of repudiation have been known to the cestui que trust or
the other co-owners; and
(3) that the evidence thereon must be clear and convincing.
Tested against these guidelines, the respondents failed to present competent
evidence that the acts of Sixto adversely and clearly repudiate the existing co-ownership
among the heirs of Leocadio Medrano. Respondents reliance on the tax declaration in the
name of Sixto Medrano is unworthy of credit since we have held on several occasions that
tax declarations by themselves do not conclusively prove title to land. Further, respondents
failed to show that the Affidavit executed by Sixto to the effect that he is the sole owner of
the subject property was known or made known to the other co-heirs of Leocadio Medrano.

THIRD DIVISION
[G.R. No. 123509. March 14, 2000]
LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and EMILIO
ROBLES, petitioners, vs. COURT OF APPEALS, Spouses VIRGILIO
SANTOS and BABY RUTH CRUZ, RURAL BANK OF CARDONA, Inc.,
HILARIO ROBLES, ALBERTO PALAD JR. in his capacity as Director of
Lands, and JOSE MAULEON in his capacity as District Land Officer of
the Bureau Of Lands, respondents.
DECISION
PANGANIBAN, J.:
To be entitled to the remedy of quieting of title, petitioners must show that they
have title to the real property at issue, and that some deed or proceeding
beclouds its validity or efficacy. Buyers of unregistered real property,
especially banks, must exert due diligence in ascertaining the titles of
mortgagors and sellers, lest some innocent parties be prejudiced. Failure to
observe such diligence may amount to bad faith and may result in the nullity
of the mortgage, as well as of the subsequent foreclosure and/or auction sale.
Unless the co-ownership is clearly repudiated, a co-owner cannot, by
prescription, acquire title to the shares of the other co-owners. Mesm
The Case
Before us is a Petition for Review under Rule 45, assailing the June 15, 1995
Decision and the January 15, 1996 Resolution of the Court of Appeals (CA) in
CA-GR CV No. 34213. In its Decision, the CA ruled:
[1]

[2]

[3]

"WHEREFORE, the trial courts June 17, 1991 decision is

REVERSED and SET ASIDE, and in lieu thereof a new one is
hereby entered ordering the dismissal of the plaintiffs-appellees[']
second amended complaint."
Earlier, the trial court had disposed as follows: Spped jo

"WHEREFORE, premises considered, judgment is hereby

rendered as follows:
1. Declaring free patent Title No. IV-1-010021 issued by the
Bureau of Lands as null and void;
2. Ordering the defendant spouses Vergel Santos and Ruth
Santos to deliver the property subject of this case to the
plaintiff; and
3. Declaring the heirs of Silvino Robles as the absolute
owner of the land in controversy."
The January 15, 1996 CA Resolution denied petitioners' Motion for
Reconsideration.
The Facts
The present Petition is rooted in a case for quieting of title before the Regional
Trial Court of Morong, Rizal, filed on March 14, 1988, by Petitioners Lucio
Robles, Emeteria Robles, Aludia Robles and Emilio Robles. The facts were
narrated by the trial court in this wise:
[4]

"There seems to be no dispute that Leon Robles primitively

owned the land situated in Kay Taga, Lagundi, Morong, Rizal with
an area of 9,985 square meters. He occupied the same openly
and adversely. He also declared the same in his name for taxation
purposes as early as 1916 covered by Tax Declaration No. 17865
(Exh. "I") and paid the corresponding taxes thereon (Exh. "B").
When Leon Robles died, his son Silvino Robles inherited the land,
who took possession of the land, declared it in his name for
taxation purposes and paid the taxes thereon. Rtc-spped
"Upon the death of Silvino Robles in 1942, his widow Maria de la
Cruz and his children inherited the property. They took adverse
possession of said property and paid taxes thereon. The task of
cultivat[ing] the land was assigned to plaintiff Lucio Robles who
planted trees and other crops. He also built a nipa hut on the land.

The plaintiffs entrusted the payment of the land taxes to their coheir and half-brother, Hilario Robles.
"In 1962, for unknown reasons, the tax declaration of the parcel of
land in the name of Silvino Robles was canceled and transferred
to one Exequiel Ballena (Exh. "19"), father of Andrea Robles who
is the wife of defendant Hilario Robles. Thereafter, Exequiel
Ballena secured a loan from the Antipolo Rural Bank, using the
tax declaration as security. Somehow, the tax declaration was
transferred [to] the name of Antipolo Rural Bank (Exh. "17") and
later on, was transferred [to] the name of defendant Hilario Robles
and his wife (Exh. "16"). Calrky
"In 1996, Andrea Robles secured a loan from the Cardona Rural
Bank, Inc., using the tax declaration as security. Andrea Robles
testified without contradiction that somebody else, not her
husband Hilario Robles, signed the loan papers because Hilario
Robles was working in Marinduque at that time as a carpenter.
"For failure to pay the mortgage debt, foreclosure proceedings
were had and defendant Rural Bank emerged as the highest
bidder during the auction sale in October 1968.
"The spouses Hilario Robles failed to redeem the property and so
the tax declaration was transferred in the name of defendant
Rural Bank. On September 25, 1987, defendant Rural Bank sold
the same to the Spouses Vergel Santos and Ruth Santos. Jo spped
"In September 1987, plaintiff discovered the mortgage and
attempted to redeem the property, but was unsuccessful. On May
10,1988, defendant spouses Santos took possession of the
property in question and was able to secure Free Patent No. IV-1010021 in their names."
[5]

On the other hand, the Court of Appeals summarized the facts of the case as
follows:

"The instant action for quieting of title concerns the parcel of land
bounded and more particularly described as follows: Sd-aad-sc
"A parcel of land located at Kay Taga, Lagundi, Morong,
Rizal. Bounded [i]n the north by the property of Venancio
Ablay y Simeon Ablay; [i]n the east by the property of
Veronica Tulak y Dionisio Ablay; [i]n the south by the
property of Simeon Ablay y Dionisio Ablay; and [i]n the west
by the property of Dionisio Ablay y Simeon Ablay, with an
area of 9,985 square meters, more or less, assessed in the
year 1935 at P60.00 under Tax Declaration No. 23219.
"As the heirs of Silvino Robles who, likewise inherited the abovedescribed parcel from Leon Robles, the siblings Lucio, Emeteria,
Aludia and Emilio, all surnamed Robles, commenced the instant
suit with the filing of their March 14, 1988 complaint against
Spouses Virgilio and Ruth Santos, as well as the Rural Bank of
Cardona, Inc. Contending that they had been in possession of the
land since 1942, the plaintiff alleged, among other matters, that it
was only in September of 1987 that they came to know of the
foreclosure of the real estate mortgage constituted thereon by the
half-brother, Hilario Robles, in favor of defendant Rural Bank; and
that they likewise learned upon further inquiry, that the latter had
already sold the self-same parcel in favor of the Santos spouses
(pp. 1-3, orig. rec.). Twice amended to implead Hilario Robles (pp.
76-80, orig. rec) and, upon subsequent discovery of the issuance
of Free Patent No. IV-I-010021 in favor of the defendant spouses,
the Director of Lands and the District Land Officer of the Bureau of
Lands as parties-defendants (pp. 117-121, orig. rec). The
plaintiffs complaint sought the following reliefs on the theory that
the encumbrance of their half-brother, constituted on the land, as
well as all proceedings taken subsequent thereto, were null and
void, to wit:
"Wherefore, it is respectfully prayed that (a) a preliminary
mandatory injunction be issued forthwith restoring plaintiffs
to their possession of said parcel of land; (b) an order be

issued annulling said Free Patent No. IV-I-010021 in the

name of defendants spouses Vergel Santos and Ruth C.
Santos, the deed of sale aforementioned and any tax
declaration which have been issued in the name of
defendants; and (c) ordering defendants jointly and
severally, to pay plaintiffs the sum of P10,000.00 as
attorneys fees.
"Plaintiffs pray for other relief as [may be] just and equitable
under the premises." (pp. 120-121, orig. rec.)
xxxxxxxxx
"With the termination of the pre-trial stage upon the partieslitigants agreement (p. 203, orig. rec.) the trial court proceeded to
try the case on the merits. It thereafter rendered the challenged
June 17, 1991 decision upon the following findings and
conclusions:
"The real estate mortgage allegedly executed by Hilario
Robles is not valid because his signature in the mortgage
deed was forged. This fact, which remains unrebutted, was
admitted by Andrea Robles.
"Inasmuch as the real estate mortgage executed allegedly
by Hilario Robles in favor of the defendant Cardona Rural
Bank, Inc. was not valid, it stands to reason that the
foreclosure proceedings therein were likewise not valid.
Therefore, the defendant bank did not acquire any right
arising out of the foreclosure proceedings. Consequently,
defendant bank could not have transferred any right to the
spouses Santos.
"The fact that the land was covered by a free patent will not
help the defendant Santos any.

"There can be no question that the subject [property was

held] in the concept of owner by Leon Robles since 1916.
Likewise, his successor-in-interest, Silvino Robles, his wife
Maria de la Cruz and the plaintiffs occupied the property
openly, continuously and exclusively until they were ousted
from their possession in 1988 by the spouses Vergel and
Ruth Santos.
"Under the circumstances, therefore, and considering that
"open, exclusive and undisputed possession of alienable
public lands for the period prescribed by law (30 years),
creates the legal fiction whereby the land, upon completion
of the requisite period, ipso jure and without the need of
judicial or other action, ceases to be public land and
becomes private property. Possession of public land x x x
which is [of] the character and duration prescribed by the
statute is the equivalent of an express grant from the State,
considering the dictum of the statute itself[:]; "The
possessor x x x shall be conclusively presumed to have
performed all the conditions essential to a government grant
and shall be entitled to a certificate of title x x x." No proof is
admissible to overcome a conclusive presumption[,] and
confirmation proceedings would be a little more than a
formality, at the most limited to ascertaining whether the
possession claimed is of the required character and length
of time. Registration thereunder would not confer title, but
simply recognize a title already vested. (Cruz v. IAC, G.R.
No. 75042, November 29, 1988) The land in question has
become private land.
"Consequently, the issuance of [a] free patent title to the
Spouses Vergel Santos and Ruth C. Santos is not valid
because at the time the property subject of this case was
already private land, the Bureau of Lands having no
jurisdiction to dispose of the same." (pp. 257-259, orig.
rec.)"

"Dissatisfied with the foregoing decision, the Santos spouses and

the defendant Rural Bank jointly filed their July 6, 1991 Notice of
Appeal (p.260, orig. rec.) x x x."
[6]

Ruling of the Court of Appeals

In reversing the trial court, the Court of Appeals held that petitioners no longer
had any title to the subject property at the time they instituted the Complaint
for quieting of title. The CA ratiocinated as follows: Mis spped
"As correctly urged by the appellants, the plaintiff-appellees no
longer had any title to the property at the time of the institution of
the instant complaint. (pp. 25-27, rec.) The latters claim of
continuous possession notwithstanding (pp. 3-5, TSN, July 5,
1990; p. 12, TSN, July 12, 1990), the aforesaid loss of title is
amply evidenced by the subsequent declaration of the subject
realty for taxation purposes not only in the name of Exequiel
Ballena (Exhibits "1" and "2", pp. 23-24, orig. rec.) but also in the
name of the Rural Bank of Antipolo (Exhibit 17, vol. II, orig. rec.).
On the theory that tax declarations can be evincive of the transfer
of a parcel of land or a portion thereof (Gacos v. Court of Appeals,
212 SCRA 214), the court a quo clearly erred in simply brushing
aside the apparent transfers [which] the land in litigation had
undergone. Whether legal or equitable, it cannot, under the
circumstances, be gainsaid that the plaintiff-appellees no longer
had any title to speak of when Exequiel Ballena executed the
November 7, 1966 Deed of Absolute Sale transferring the land in
favor of the spouses Hilario and Andrea Robles (Exhibit "3", p. 25,
orig. rec.)
"Even on the theory that the plaintiffs-appellees and their halfbrother, Hilario Robles, are co-owners of the land left behind by
their common father, Silvino Robles, such title would still be
effectively discounted by what could well serve as the latters acts
of repudiation of the co-ownership, i.e., his possession (p. 22,
TSN, November 15, 1990) and declaration thereof for taxation
purposes in his own name (Exhibit "4", p. 26, orig. rec.). In view of

the plaintiffs-appellees inaction for more than twenty (20) years

from the time the subject realty was transferred in favor of Hilario
Robles, the appellants correctly maintain that prescription had
already set in. While it may be readily conceded that an action to
quiet title to property in the possession of the plaintiff is
imprescriptible (Almanza vs. Arguelles, 156 SCRA 718; Coronel
vs. Intermediate Appellate Court, 155 SCRA 270; Caragay-Layno
vs. Court of Appeals, 133 SCRA 718; Charon Enterprises vs.
Court of Appeals, 124 SCRA 784; Faja vs. Court of Appeals, 75
SCRA 441; Burton vs. Gabar, 55 SCRA 4999), it equally bears
emphasis that a co-owner or, for that matter, the said co-owner[']s
successors-in-interest who occupy the community property other
than as co-owner[s] can claim prescription as against the other
co-owners (De Guzman vs. Austria, 148 SCRA 75; Ramos vs.
Ramos, 45 Phil. 362; Africa vs. Africa, 42 Phil. 902; Bargayo vs.
Camumot, 40 Phil. 857; De Castro vs. Echarri, 20 Phil. 23). If only
in this latter sense, the appellants correctly argue that the
plaintiffs-appellees have lost their cause of action by prescription.
"Over and above the foregoing considerations, the court a quo
gravely erred in invalidating the real estate mortgage constituted
on the land solely on the basis of Andrea Robles testimony that
her husbands signature thereon was forged (p. 257, orig. rec.),
xxx xxx xxx
"In according to the foregoing testimony x x x credibility which,
while admittedly unrebutted, was altogether uncorroborated, the
trial court lost sight of the fact that the assailed deed of real estate
mortgage (Exhibit "5", Vol. II, orig. rec.) is a public document, the
acknowledgment of which is a prima facie evidence of its due
execution (Chua vs. Court of Appeals, 206 SCRA 339). As such, it
retains the presumption of validity in the absence of a full, clear
and convincing evidence to overcome such presumption
(Agdeppa vs. Ibe, 220 SCRA 584). Maniks

"The foregoing principles take even more greater [sic] when it is,
moreover, borne in mind that Hilario Robles made the following
admissions in his March 8, 1989 answer, viz:
"3. The complaint filed against herein answering defendant
has no legal basis considering that as the lawful owner of
the subject real property, defendant Hilario Robles has the
right to mortgage the said real property and could dispose
the same in whatever manner he wishe[s] to do." (p. 96,
orig. rec.)
"Appropriately underscored by the appellants, the foregoing
admission is binding against Hilario [Robles]. Judicial admissions,
verbal or written, made by the parties in the pleadings or in the
course of the trial or other proceedings in the same case are
conclusive, no evidence being required to prove the same. They
cannot be contradicted unless shown to have been made through
[a] palpable mistake or [unless] no such admission was actually
made (Philippine American General Insurance, Inc. vs. Sweet
Lines, Inc., 212 SCRA 194).
"It does not help the plaintiffs-appellees cause any that, aside
from complying with the requirements for the foreclosure of the
subject real estate mortgage (Exhibits "6", "7", "8" and "10",
Volume II[)], the appellant Rural Bank had not only relented to the
mortgagors request to postpone the (Exhibit "g", Vol. II, orig. rec.)
but had likewise granted the latters request for an extension of
the redemption period therefor (Exhibits "11" and "12", pp. 35-36,
orig. rec.). Without going into minute detail in discussing the
Santos spouses rights as purchasers for value and in good faith
(Exhibit "21", Vol. II, orig. rec.), the mortgagor and the plaintiffsappellees cannot now be heard to challenge the validity of the
sale of the land after admittedly failing to redeem the same within
the extension the appellant Rural Bank granted (pp. 10-11, TSN,
November 15, 1990).

"Being dependent on the supposed invalidity of the constitution

and foreclosure of the subject real estate mortgage, the plaintiffsappellees attack upon x x x Free Patent No. IV-I must necessarily
fail. The trial court, therefore, misread, and ignored the evidence
o[n] record, to come up with erroneous conclusion." Manikx
Contending that such ruling was contrary to law and jurisprudence, Petitioners
Lucio, Emeteria, Aludia and Emilio -- all surnamed Robles -- filed this Petition
for Review.
[7]

The Assigned Error

Petitioners ascribe the following error to the respondent court:
"Respondent Court of Appeals grievously erred in ruling that with
the transfers of the tax declaration over the parcel of land in
question from Silvino Robles to Exequiel Ballena, then to the
Rural Bank of Antipolo, then to Respondent Hilario Robles, then to
Respondent Rural Bank of Cardona Inc., and then finally to
Respondent Spouses Santos, petitioners, who by themselves and
their predecessors in interest have been in open, actual and
adverse possession of said parcel of land since 1916 up to their
forced removal therefrom in 1988, have lost their title to said
property by prescription to their half-brother, Respondent Hilario
Robles, and then finally, to Respondent Spouses Santos."
[8]

For a better understanding of the case, the above issue will be broken down
into three points: first, the nature of the remedy of quieting of title; second, the
validity of the real estate mortgage; andthird, the efficacy of the free patent
granted to the Santos spouses. Spped
First Issue: Quieting of Title
Article 476 of the Civil Code provides:
"Whenever there is cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance
or proceeding which is apparently valid or effective but is in truth

and in fact invalid, ineffective, voidable or unenforceable, and may

be prejudicial to said title, an action may be brought to remove
such cloud or to quiet title.
"An action may also be brought to prevent a cloud from being cast
upon title to real property or any interest therein."
Based on the above definition, an action to quiet title is a common-law remedy
for the removal of any cloud or doubt or uncertainty on the title to real
property. It is essential for the plaintiff or complainant to have a legal or an
equitable title to or interest in the real property which is the subject matter of
the action. Also, the deed, claim, encumbrance or proceeding that is being
alleged as a cloud on plaintiffs title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy.
[9]

[10]

[11]

That there is an instrument or a document which, on its face, is valid and

efficacious is clear in the present case. Petitioners allege that their title as
owners and possessors of the disputed property is clouded by the tax
declaration and, subsequently, the free patent thereto granted to Spouses
Vergel and Ruth Santos. The more important question to be resolved,
however, is whether the petitioners have the appropriate title that will entitle
them to avail themselves of the remedy of quieting of title. Nexold
Petitioners anchor their claim to the disputed property on their continued and
open occupation and possession as owners thereof. They allege that they
inherited it from their father, Silvino, who in turn had inherited it from his father,
Leon. They maintain that after their fathers death, they agreed among
themselves that Petitioner Lucio Robles would be tending and cultivating it for
everyone, and that their half-brother Hilario would be paying the land taxes.
Petitioners insist that they were not aware that from 1962 until 1987, the
subject property had been declared in the names of Exequiel Ballena, the
Rural Bank of Antipolo, Hilario Robles, the Rural Bank of Cardona, Inc., and
finally, Spouses Vergel and Ruth Santos. Maintaining that as co-owners of the
subject property, they did not agree to the real estate mortgage constituted on
it, petitioners insist that their shares therein should not have been prejudiced
by Hilarios actions. Miso

On the other hand, Private Respondents Vergel and Ruth Santos trace their
claim to the subject property to Exequiel Ballena, who had purportedly sold it
to Hilario and Andrea Robles. According to private respondents, the Robles
spouses then mortgaged it to the Rural Bank of Cardona, Inc. -- not as coowners but as absolute owners -- in order to secure an agricultural loan
worth P2,000. Upon their failure to pay their indebtedness, the mortgage was
foreclosed and the property sold to the bank as the highest bidder. Thereafter,
private respondents purchased the property from the bank. Sppedjo
Undisputed is the fact that the land had previously been occupied by Leon
and later by Silvino Robles, petitioners predecessors-in-interest, as evidenced
by the different tax declarations issued in their names. Also undisputed is the
fact that the petitioners continued occupying and possessing the land from the
death of Silvino in 1942 until they were allegedly ousted therefrom in 1988. In
1962, the subject property was declared in the name of Exequiel for taxation
purposes. On September 30, 1965, it was again declared in the same name;
on October 28, 1965, in the name of the Rural Bank of Antipolo; on November
7, 1966, in the name of Hilario and Andrea; and thereafter, in the name of the
Rural Bank of Cardona and, finally, in the name of the Santos spouses.
Ostensibly, the Court of Appeals failed to consider irregularities in the
transactions involving the disputed property. First, while it was declared in the
name of Exequiel in 1962, there was no instrument or deed of conveyance
evidencing its transfer from the heirs of Silvino to him. This fact is important,
considering that the petitioners are alleging continued possession of the
property.Second, Exequiel was the father-in-law of Hilario, to whom petitioners
had entrusted the payment of the land taxes. Third, considering that the
subject property had been mortgaged by Exequiel to the Rural Bank of
Antipolo, and that it was foreclosed and in fact declared in the banks name in
1965, why was he able to sell it to Spouses Hilario and Andrea in
1966? Lastly, inasmuch as it was an unregistered parcel of land, the Rural
Bank of Cardona, Inc., did not observe due diligence in determining Hilarios
title thereto. Jospped
The failure to show the indubitable title of Exequiel to the property in question
is vital to the resolution of the present Petition. It was from him that Hilario had
allegedly derived his title thereto as owner, an allegation which thereby

enabled him to mortgage it to the Rural Bank of Cardona. The occupation and
the possession thereof by the petitioners and their predecessors-in-interest
until 1962 was not disputed, and Exequiels acquisition of the said property by
prescription was not alleged. Thus, the deed of conveyance purportedly
evidencing the transfer of ownership and possession from the heirs of Silvino
to Exequiel should have been presented as the best proof of that transfer. No
such document was presented, however. Scmis
Therefore, there is merit to the contention of the petitioners that Hilario
mortgaged the disputed property to the Rural Bank of Cardona in his capacity
as a mere co-owner thereof. Clearly, the said transaction did not divest them
of title to the property at the time of the institution of the Complaint for quieting
of title.
Contrary to the disquisition of the Court of Appeals, Hilario effected no clear
and evident repudiation of the co-ownership. It is a fundamental principle that
a co-owner cannot acquire by prescription the share of the other coowners, absent any clear repudiation of the co-ownership. In order that the
title may prescribe in favor of a co-owner, the following requisites must concur:
(1) the co-owner has performed unequivocal acts of repudiation amounting to
an ouster of the other co-owners; (2) such positive acts of repudiation have
been made known to the other co-owners; and (3) the evidence thereof is
clear and convincing.
[12]

In the present case, Hilario did not have possession of the subject property;
neither did he exclude the petitioners from the use and the enjoyment thereof,
as they had indisputably shared in its fruits. Likewise, his act of entering into
a mortgage contract with the bank cannot be construed to be a repudiation of
the co-ownership. As absolute owner of his undivided interest in the land, he
had the right to alienate his share, as he in fact did. Neither should his
payment of land taxes in his name, as agreed upon by the co-owners, be
construed as a repudiation of the co-ownership. The assertion that the
declaration of ownership was tantamount to repudiation was belied by the
continued occupation and possession of the disputed property by the
petitioners asowners. Mis sc
[13]

[14]

Second Issue: Validity of the Real Estate Mortgage

In a real estate mortgage contract, it is essential that the mortgagor be the

absolute owner of the property to be mortgaged; otherwise, the mortgage is
void. In the present case, it is apparent that Hilario Robles was not the
absolute owner of the entire subject property; and that the Rural Bank of
Cardona, Inc., in not fully ascertaining his title thereto, failed to observe due
diligence and, as such, was a mortgagee in bad faith.
[15]

First, the bank was utterly remiss in its duty to establish who the true owners
and possessors of the subject property were. It acted with precipitate haste in
approving the Robles spouses loan application, as well as the real estate
mortgage covering the disputed parcel of land. Had it been more circumspect
and assiduous, it would have discovered that the said property was in fact
being occupied by the petitioners, who were tending and cultivating it.
[16]

Second, the bank should not have relied solely on the Deed of Sale
purportedly showing that the ownership of the disputed property had been
transferred from Exequiel Ballena to the Robles spouses, or that it had
subsequently been declared in the name of Hilario. Because it was dealing
with unregistered land, and the circumstances surrounding the transaction
between Hilario and his father-in-law Exequiel were suspicious, the bank
should have exerted more effort to fully determine the title of the Robleses.
Rural Bank of Compostela v. Court of Appeals invalidated a real estate
mortgage after a finding that the bank had not been in good faith. The Court
explained: "The rule that persons dealing with registered lands can rely solely
on the certificate of title does not apply to banks." In Tomas v. Tomas, the
Court held: Sc-slx
[17]

"x x x. Banks, indeed, should exercise more care and prudence in

dealing even with registered lands, than private individuals, for
their business is one affected with public interest, keeping in trust
money belonging to their depositors, which they should guard
against loss by not committing any act of negligence which
amounts to lack of good faith by which they would be denied the
protective mantle of land registration statute, Act 496, extended
only to purchasers for value and in good faith, as well as to
mortgagees of the same character and description. x x x."
[18]

Lastly, the Court likewise finds it unusual that, notwithstanding the banks
insistence that it had become the owner of the subject property and had paid
the land taxes thereon, the petitioners continued occupying it and harvesting
the fruits therefrom.
[19]

Considering that Hilario can be deemed to have mortgaged the disputed

property not as absolute owner but only as a co-owner, he can be adjudged to
have disposed to the Rural Bank of Cardona, Inc., only his undivided
share therein. The said bank, being the immediate predecessor of the Santos
spouses, was a mortgagee in bad faith. Thus, justice and equity mandate the
entitlement of the Santos spouses, who merely stepped into the shoes of the
bank, only to what legally pertains to the latter -- Hilarios share in the disputed
property. Missc
Third Issue: Efficacy of Free Patent Grant
Petitioners repeatedly insist that the disputed property belongs to them
by private ownership and, as such, it could not have been awarded to the
Santos spouses by free patent. They allege that they possessed it in the
concept of owners -- openly, peacefully, publicly and continuously as early as
1916 until they were forcibly ousted therefrom in 1988. They likewise contend
that they cultivated it and harvested its fruits. Lucio Robles testified:
"xxx xxx xxx
Q By the way, why do you know this parcel of land?
A Because before my father died, he showed me all the
documents.
Q Before the death of your father, who was the owner of this
parcel of land?
A My father, sir. Spped
Q How did your father acquire this parcel of land?
A My father knew that it [was] by inheritance, sir.

Q From whom?
A From his father, Leon Robles, sir.
Q And do you know also [from] whom Leon Robles acquired this
land?
A It was inherited from his father, sir.
Q What is the nature of this parcel of land?
A Its an agricultural land, sir,
Q Now, at the time of the death of your father, this land was
planted with what crops?
A Mango trees, santol trees, and I was the one who planted those
trees, sir.
Q When did you plant those trees?
A Before the death of my father, sir. M-issdaa
Q Now, after the death of your father, who cultivated this parcel of
land?
A I took charge of the land after the death of my father, sir.
Q Up to when?
A Up to the present, sir, after this case was already filed."

[20]

The preceding claim is an assertion that the subject property is private land.
The petitioners do not concede, and the records do not show, that it was ever
an alienable land of the public domain. They allege private ownership thereof,
as evidenced by their testimonies and the tax declarations issued in the
names of their predecessors-in-interest. It must be noted that while their claim
was not corroborated by other witnesses, it was not controverted by the other
parties, either. Kycalr

Carlos Dolores insisted that the Rural Bank of Cardona, Inc., of which he was
the manager, had acquired and possessed the subject property. He did not,
however, give any reason why the petitioners had continued occupying it,
even as he admitted on the stand that he had visited it twice.
[21]

In the light of their open, continuous, exclusive and notorious possession and
occupation of the land, petitioners are "deemed to have acquired, by operation
of law, a right to a grant, a government grant, without the necessity of a
certificate of title being issued." The land was "segregated from the public
domain." Accordingly, the director of lands had no authority to issue a free
patent thereto in favor of another person. Verily, jurisprudence holds that a
free patent covering private land is null and void.
[22]

[23]

Worth quoting is the disquisition of the Court in Agne v. Director of Lands, in

which it held that a riparian owner presently in possession had a better right
over an abandoned river bed than had a registered owner by virtue of a free
patent.
[24]

"Under the provisions of Act 2874 pursuant to which the title of

private respondents predecessor-in-interest was issued, the
President of the Philippines, or his alter ego, the Director of
Lands, has no authority to grant a free patent for land that has
ceased to be a public land and has passed to private ownership
and a title so issued is null and void.The nullity arises, not from
fraud or deceit, but from the fact that the land is not under the
jurisdiction of the Bureau of Lands. The jurisdiction of the Director
of Lands is limited only to public lands and does not cover lands
publicly owned. The purpose of the Legislature in adopting the
former Public Land Act, Act No. 2874, was and is to limit its
application to lands of the public domain, and lands held in private
ownership are not included therein and are not affected in any
manner whatsoever thereby. Land held in freehold or fee title, or
of private ownership, constitutes no part of the public domain, and
cannot possibly come within the purview of said act 2874,
inasmuch as the subject of such freehold or private land is not
embraced in any manner in the title of the Act and the same is
excluded from the provisions of the text thereof. Kyle

"We reiterate that private ownership of land is not affected by the

issuance of the free patent over the same land because the Public
Land Act applies only to lands of the public domain. Only public
land may be disposed of by the Director of Lands. Since as early
as 1920, the land in dispute was already under the private
ownership of herein petitioners and no longer a part of the lands
of the public domain, the same could not have been the subject
matter of a free patent. The patentee and his successors-ininterest acquired no right or title to said land. Necessarily, Free
Patent No. 23263 issued to Herminigildo Agpoon is null and void
and the subsequent titles issued pursuant thereto cannot become
final and indefeasible. Hence we ruled in Director of Lands v.
Sicsican, et al. that if at the time the free patents were issued in
1953 the land covered therein were already private property of
another and, therefore, not part of the disposable land of the
public domain, then applicants patentees acquired no right or title
to the land.
"Now, a certificate of title fraudulently secured is null and void ab
initio if the fraud consisted in misrepresenting that the land is part
of the public domain, although it is not. As earlier stated, the nullity
arises, not from the fraud or deceit, but from the fact that the land
is not under the jurisdiction of the Bureau of Lands. Being null and
void, the free patent granted and the subsequent titles produce no
legal effect whatsoever. Quod nullum est, nullum producit
effectum.
"A free patent which purports to convey land to which the
government did not have any title at the time of its issuance does
not vest any title in the patentee as against the true owner. The
Court has previously held that the Land Registration Act and the
Cadastral Act do not give anybody who resorts to the provisions
thereof a better title than what he really and lawfully has. Exsm
xxx xxx xxx

"We have, therefore, to arrive at the unavoidable conclusion that

the title of herein petitioners over the land in dispute is superior to
the title of the registered owner which is a total nullity. The long
and continued possession of petitioners under a valid claim of title
cannot be defeated by the claim of a registered owner whose title
is defective from the beginning."
The Santos spouses argue that petitioners do not have the requisite
personality to question the free patent granted them, inasmuch as "it is a wellsettled rule that actions to nullify free patents should be filed by the Office of
the Solicitor General at the behest of the Director of Lands."
[25]

Private respondents reliance on this doctrine is misplaced. Indeed, the Court

held in Peltan Development, Inc. v. Court of Appeals that only the solicitor
general could file an action for the cancellation of a free patent. Ruling that the
private respondents, who were applicants for a free patent, were not the
proper parties in an action to cancel the transfer certificates covering the
parcel of land that was the subject of their application, the Court ratiocinated
thus: Sl-xm-is
[26]

"The Court also holds that private respondents are not the proper
parties to initiate the present suit. The complaint, praying as it did
for the cancellation of the transfer certificates of title of petitioners
on the ground that they were derived from a "spurious" OCT No.
4216, assailed in effect the validity of said title. While private
respondents did not pray for the reversion of the land to the
government, we agree with the petitioners that the prayer in the
complaint will have the same result of reverting the land to the
government under the Regalian Doctrine. Gabila v.
Barinaga ruled that only the government is entitled to this relief. x
x x."
[27]

Because the cancellation of the free patent as prayed for by the private
respondents in Peltan would revert the property in question to the public
domain, the ultimate beneficiary would be the government, which can be
represented by the solicitor general only. Therefore, the real party-in-interest is
the government, not the private respondents.

This ruling does not, however, apply to the present case. While the private
respondents in Peltan recognized that the disputed property was part of the
public domain when they applied for free patent, herein petitioners asserted
and proved private ownership over the disputed parcel of land by virtue of
their open, continued and exclusive possession thereof since 1916. Msesm
[28]

Neither does the present case call for the reversion of the disputed property to
the State. By asking for the nullification of the free patent granted to the
Santos spouses, the petitioners areclaiming the property which, they contend,
rightfully belongs to them.
Indeed, the same issue was resolved by this Court in Heirs of Marciano
Nagano v. Court of Appeals. In that case, the trial court dismissed a
Complaint seeking the declaration of nullity of an Original Certificate of Title
issued pursuant to a free patent, reasoning that the action should have been
instituted by the solicitor general. In reversing the trial court, the Supreme
Court held: Sl-xsc
[29]

"It is settled that a Free Patent issued over private land is null and
void, and produces no legal effect whatsoever. Quod nullum est,
nullum producit effectum. Moreover, private respondents claim of
open, peaceful, continuous and adverse possession of the 2,250
square meter portion since 1920, and its illegal inclusion in the
Free Patent of petitioners and in their original certificate of title,
gave private respondents a cause of action for quieting of title
which is imprescriptible." Scmis
In any event, the Office of the Solicitor General was afforded an opportunity to
express its position in these proceedings. But it manifested that it would not
file a memorandum, because "this case involves purely private interests."
[30]

The foregoing considered, we sustain the contention of petitioners that the

free patent granted to the Santos spouses is void. It is apparent that they are
claiming ownership of the disputed property on the basis of their possession
thereof in the concept of owners -- openly, peacefully, publicly, continuously
and adversely since 1916. Because they and their predecessors-in-interest
have occupied, possessed and cultivated it as owners for more than thirty

years, only one conclusion can be drawn -- it has become private land and is
therefore beyond the authority of the director of lands. Misspped
[31]

Epilogue
We recognize that both the petitioners and the Santos spouses fell victim to
the dubious transaction between Spouses Hilario and Andrea Robles and the
Rural Bank of Cardona, Inc. However, justice and equity mandate that we
declare Petitioners Lucio, Emerita, Aludia and Emilio Robles to have the
requisite title essential to their suit for quieting of title. Considering the
circumstances peculiar to this complicated problem, the Court finds this
conclusion the logical and just solution. Sc
The claim that petitioners were guilty of laches in not asserting their rights as
owners of the property should be viewed in the light of the fact that they
thought their brother was paying the requisite taxes for them, and more
important, the fact that they continued cultivating it and harvesting and gaining
from its fruits.
From another viewpoint, it can even be said that it was the Rural Bank of
Cardona, Inc., which was guilty of laches because, granting that it had
acquired the subject property legally, it failed to enforce its rights as owner. It
was oblivious to the petitioners continued occupation, cultivation and
possession thereof. Considering that they had possessed the property
in good faith for more than ten years, it can even be argued that they thus
regained it by acquisitive prescription. In any case, laches is a remedy in
equity, and considering the circumstances in this case, the petitioners cannot
be held guilty of it. Jurismis
In sum, the real estate mortgage contract covering the disputed property a
contract executed between Spouses Hilario and Andrea on the one hand and
the Rural Bank of Cardona, Inc., on the other -- is hereby declared null and
void insofar as it prejudiced the shares of Petitioners Lucio, Emerita, Aludia
and Emilio Robles; it is valid as to Hilario Robles share therein. Consequently,
the sale of the subject property to the Santos spouses is valid insofar as it
pertained to his share only. Likewise declared null and void is Free Patent No.
IV-1-010021 issued by the Bureau of Lands covering the subject property. Jjjuris

WHEREFORE, the Petition is hereby GRANTED. The assailed Decision

is REVERSED and SET ASIDE. Except as modified by the last paragraph of
this Decision, the trial courts Decision isREINSTATED. No costs.
SO ORDERED.