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NUFABLE vs.

NUFABLE
Esdras Nufable, who owned an untitled parcel of land, died on August 9, 1965. He was survived by his children Angel, Generosa, Vilflor and Marcelo. In June 1996, the settlement of estate of the late Esdras was approved and, as therein stated, the heirs have agreed that the untitled parcel of land remains undivided for community ownership. However, two months earlier from said approval, Angel and wife mortgaged the entire parcel of land to DBP until it was foreclosed in 1973. Later, in 1980, Nelson, the son of Angel, purchased the same lot from DBP. Generosa, Vilflor and Marcelo then filed an action to annul fraudulent transactions, to quiet title and to recover damages. The Court of Appeals ruled that plaintiffs are rightful co-owners of the subject property and entitled to possession of 3/4 southern portion thereof and Nelson to 1/4 portion. Hence in issue is the relevance of the approved Settlement of Estate on the ownership of Nelson of the land purchased from DBP. When Esdras died in 1965, his heirs acquired successional rights over the property. Hence, Angel and wife had no rights to morttgage the entire property. The fact that DBP succeeded in consolidating ownership over the same in its name does not terminate the existing coownership. It merely held that portion thereof in trust for the private respondents. And when Nelson purchased the said property, he merely stepped into the shoes of DBP and acquired whatever rights and obligations appertaining thereto. CIVIL LAW; MODES OF ACQUIRING OWNERSHIP; TESTAMENTARY SUCCESSION; SETTLEMENT OF ESTATE AS AGREED BY THE HEIRS; APPROVALOF PROBATE COURT ONLY FOR VALIDITY THEREOF. The Settlement of Estate submitted by the heirs of the late Esdras Nufable provides that they agreed (T)hat the parcel land situated in Poblacion Manjuyod, Negros Oriental remains undivided for community ownership but respecting conditions imposed therein (sic) in the will. Further, they have no objection as to the manner of disposition of their share made by the testator, the expenses of the proceeding and that they have already taken possession of their respective shares in accordance with the will. Verily, it was the heirs of the late Esdras Nufable who agreed among themselves on the disposition of their shares. The probate court simply approved the agreement among the heirs which approval was necessary for the validity of any disposition of the decedents estate. 3. ID.; ID.; ID.; SUCCESSIONAL RIGHTS; ACQUIRED UPON DEATH OF THE DECEDENT. The late Esdras Nufable died on August 9, 1965. When the entire property located at Manjuyod was mortgaged on March 15, 1966 by his son Angel Custodio with DBP, the other heirs of Esdras namely: Generosa, Vilfor and Marcelo had already acquired successional rights over the said property. This is so because of the principle contained in Article 777 of the Civil Code to the effect that the rights to the succession are transmitted from the moment of death of the decedent. Accordingly, for the purpose of transmission of rights, it does not matter whether the Last Will and Testament of the late Esdras Nufable was admitted on March 30, 1966 or thereafter or that the Settlement of Estate was approved on June 6, 1966 or months later. It is to be noted that the probated will of the late Esdras Nufable specifically referred to the subject property in stating that the land situated in the Poblacion Manjuyod, Negros Oriental, should not be divided because this must remain in common for them, but it is necessary to allow anyone of them brothers and sisters to construct a house therein. It was therefor the will of the decedent that the subject property should remain undivided, although the restriction should not exceed twenty (20) years pursuant to Article 870 of the Civil Code. Thus, when Angel Nufable and his spouse mortgaged the subject property to DBP on March 15, 1966, they had no right to mortgage the entire property. 4. ID.; ID.; ID.; ID.; RIGHT OF HEIR AS CO-OWNER; RIGHTS AND LIMITATION THEREOF. Angels right over the subject property was limited only to pro indiviso share. As co-owner of the subject property, Angels right to sell, assign or mortgage is limited to that portion that may be allotted to him upon termination of the co-ownership. Well-entrenched is the rule that a co-owner can only alienate his pro indiviso share in the co-owned property. Article 493 of the Civil Code spells out the rights of co-owners over a co-owned property. Pursuant to said Article, a co-owner shall have full ownership of his part and of the fruits and benefits pertaining thereto. He has the right to alienate, assign or mortgage it, and even substitute another person in its enjoyment. As a mere part owner, he cannot alienate the shares of the other co-owners. The prohibition is premised on the elementary rule that no one can give what he does not have. Moreover, respondents stipulated that they were not aware of the mortgage by petitioners of the subject property. This being the case, a co-owner does not lose his part ownership of a co-owned property when his share is mortgaged by another co-owner without the formers knowledge and consent as in the case at bar. It has likewise been ruled that the mortgage of the inherited property is not binding against co-heirs who never benefitted. 5. ID.; ID.; ID.; ID.; ID.; WHERE RIGHT IS TRANSMITTED TO ANOTHER WITHOUT AUTHORITY, TRUST IS ESTABLISHED FOR THE SAME. When the subject property was mortgaged by Angel Custodio, he had no right to mortgage the entire property but only with respect to his 1/4 pro indiviso share as the property was subject to the successional rights of the other heirs of the late Esdras. In case of foreclosure, a sale would result in the transmission of title to the buyer which is feasible only if the seller can be in a position to convey ownership of the things sold. And in one case, it was held that a foreclosure would be ineffective, unless the mortgagor has title to the property to be foreclosed. Therefore, as regards the remaining 3/4 pro indiviso share, the same was held in trust for the party rightfully entitled thereto, who are the private respondents herein. Pursuant to Article 1451 of the Civil Code, when land passes by succession to any person and he causes the legal title to be put in the name of another, a trust is established by implication of law for the benefit of the true owner. Likewise, under Article 1456 of the same Code, if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. Thus, the fact that DBP succeeded in consolidating ownership over the subject property in its name does not terminate the existing co-ownership. Registration of property is not a means of acquiring ownership. When the subject property was sold to and consolidated in the name of DBP, it being the winning bidder in the public auction, DBP merely held the portion in trust for the private respondents. When petitioner Nelson purchased the said property, he merely steeped into the shoes of DBP and acquired whatever rights and obligations appertain thereto. Leonardo Acabal vs. Villaner Acabal Respondent Villaner Acabal (Villaner) executed in favor of his godson-nephew-petitioner Leonardo Acabal (Leonardo) on April 19, 1990.

Villaners parents, Alejandro Acabal and Felicidad Balasabas, owned a parcel of land situated in Barrio Tanglad, Manjuyod, Negros Oriental, containing an area of 18.15 hectares more or less, described in Tax Declaration No. 15856.[4] By a Deed of Absolute Sale dated July 6, 1971,[5] his parents transferred for P2,000.00 ownership of the said land to him, who was then married to Justiniana Lipajan.[6] Sometime after the foregoing transfer, it appears that Villaner became a widower. Subsequently, he executed on April 19, 1990 a deed[7] conveying the same property[8] in favor of Leonardo. Villaner was later to claim that while the April 19, 1990 document he executed now appears to be a Deed of Absolute Sale purportedly witnessed by a Bais City trial court clerk Carmelo Cadalin and his wife Lacorte, what he signed was a document captioned Lease Contract*9+ (modeled after a July 1976 lease agreement[10] he had previously executed with previous lessee, Maria Luisa Montenegro[11]) wherein he leased for 3 years the property to Leonardo at P1,000.00 per hectare[12] and which was witnessed by two women employees of one Judge Villegas of Bais City. Villaner thus filed on October 11, 1993 a complaint[13] before the Dumaguete RTC against Leonardo and Ramon Nicolas to whom Leonardo in turn conveyed the property, for annulment of the deeds of sale. HELD. Since the property was acquired during the existence of the marriage of Villaner and Justiniana, the presumption under Article 160 of the Civil Code is that it is the couples conjugal property. The burden is on petitioners then to prove that it is not. This they failed to do. The property being conjugal, upon the death of Justiniana Lipajan, the conjugal partnership was terminated.[79] With the dissolution of the conjugal partnership, Villaners interest in the conjugal partnership became actual and vested with respect to an undivided one-half portion.[80] Justiniana's rights to the other half, in turn, vested upon her death to her heirs[81] including Villaner who is entitled to the same share as that of each of their eight legitimate children. As a result then of the death of Justiniana, a regime of co-ownership arose between Villaner and his co-heirs in relation to the property. With respect to Justinianas one-half share in the conjugal partnership which her heirs inherited, applying the provisions on the law of succession, her eight children and Villaner each receives one-ninth (1/9) thereof. Having inherited one-ninth (1/9) of his wifes share in the conjugal partnership or one eighteenth (1/18)[84] of the entire conjugal partnership and is himself already the owner of one half (1/2) or nineeighteenths (9/18), Villaners total interest amounts to ten-eighteenths (10/18) or five-ninths (5/9). While Villaner owns five-ninths (5/9) of the disputed property, he could not claim title to any definite portion of the community property until its actual partition by agreement or judicial decree. Prior to partition, all that he has is an ideal or abstract quota or proportionate share in the property. Villaner, however, as a co-owner of the property has the right to sell his undivided share thereof. The Civil Code provides so: ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Thus, every co-owner has absolute ownership of his undivided interest in the co-owned property and is free to alienate, assign or mortgage his interest except as to purely personal rights. While a co-owner has the right to freely sell and dispose of his undivided interest, nevertheless, as a co-owner, he cannot alienate the shares of his other co-owners nemo dat qui non habet. Villaner, however, sold the entire property without obtaining the consent of the other co-owners. Following the well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so quando res non valet ut ago, valeat quantum valere potest the disposition affects only Villaners share pro indiviso, and the transferee gets only what corresponds to his grantors share in the partition of the property owned in common. Avila vs. BARABAT FACTS: 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, 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. 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.

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. T53, 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. HELD 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 coownership, 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. 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. CRUZ vs. CA The Complaint4 alleged that petitioners and Arnel Cruz were co-owners of a parcel of land situated in Taytay, Rizal. Yet the property, which was then covered by Transfer Certificate of Title (TCT) No. 495225, was registered only in the name of Arnel Cruz. According to petitioners, the property was among the properties they and Arnel Cruz inherited upon the death of Delfin Cruz, husband of Adoracion Cruz. On August 22, 1977, petitioners and Arnel Cruz executed a Deed of Partial Partition,5 distributing to each of them their shares consisting of several lots previously held by them in common. Among the properties adjudicated to defendant Cruz was the parcel of land covered at the time by TCT No. 495225. It is the subject of this case. Subsequently, the same parties to the Deed of Partial Partition agreed in writing to share equally in the proceeds of the sale of the properties although they had been subdivided and individually titled in the names of the former co-owners pursuant to the Deed of Partial Partition. This arrangement was embodied in a Memorandum of Agreement<6 executed on August 23, 1977 or a day after the partition. The tenor of the Memorandum of Agreement was annotated at the back of TCT No. 495225 on September 1, 1977. Sometime in January 1983, petitioner Thelma Cruz discovered that TCT No. 495225 had already been cancelled by TCT No. 514477 which was issued on October 18, 1982 in the name of Summit. Upon further investigation, petitioners learned that Arnel Cruz had executed a Special Power of Attorney7 on May 16, 1980 in favor of one Nelson Tamayo, husband of petitioner Nerissa Cruz Tamayo, authorizing him to obtain a loan in the amount of One Hundred Four Thousand Pesos (P104,000.00) from respondent Summit, to be secured by a real estate mortgage on the subject parcel of land.

On June 4, 1980, a Real Estate Mortgage8 was constituted on the disputed property then covered by TCT No. 495225 to secure the loan obtained by Arnel Cruz thru Nelson Tamayo from respondent Summit. Since the loan had remained outstanding on maturity, Summit instituted extrajudicial foreclosure proceedings, and at the foreclosure sale it was declared the highest bidder. Consequently, Sheriff Sta. Ana issued a Certificate of Sale9 to respondent Summit, which more than a year later consolidated its ownership of the foreclosed property. Upon presentation of the affidavit of consolidation of ownership, the Acting Register of Deeds of Rizal cancelled TCT No. 495225 and issued, in lieu thereof, TCT No. 514477 in the name of respondent Summit. In their complaint before the RTC, petitioners asserted that they co-owned the properties with Arnel Cruz, as evidenced by the Memorandum of Agreement. Hence, they argued that the mortgage was void since they did not consent to it. ISSUE whether or not the real estate mortgage on the property then covered by TCT No. 495225 is valid. Resolution of the issue in turn depends on the determination of whether the mortgaged property was the exclusive property of Arnel Cruz when it was mortgaged. HELD: Petitioners insist that the Memorandum of Agreement "expressly created a pro-indiviso co-ownership over the property."13 Thus, petitioners argue that the Court of Appeals erred in upholding the validity of the mortgage considering that it was executed without their knowledge and consent. On the other hand, private respondents rely on the provisions of the Deed of Partial Partition in claiming that defendant Cruz was already the exclusive owner of the disputed property at the time it was mortgaged. To further bolster their claim, private respondents assert that each of petitioners also executed real estate mortgages on the properties allocated to them in the partition deed as absolute owners in fee simple. This Court finds no merit in the petition. Co-ownership is terminated upon judicial or extra-judicial partition of the properties owned in common. Partition, in general, is the separation, division and assignment of a thing held in common among those to whom it may belong.14 Every act which is intended to put an end to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a compromise, or any other transaction. The parties only bound themselves to share in the proceeds of the sale of the properties. The agreement does not direct reconveyance of the properties to reinstate the common ownership of the parties. To insist that the parties also intended to re-establish co-ownership after the properties had been partitioned is to read beyond the clear import of the agreement and to render nugatory the effects of partition, which is not the obvious or implied intent of the parties.