Quieting of Title

PROPERTY: Quieting of Title- Right of any Co-owner
ELIAS GALLAR, plaintiff-appellee, vs. HERMENEGILDA HUSAIN, ET AL., defendants. BONIFACIO HUSAIN, defendant-appellant. 1967 May 29 En Banc G.R. No. L-20954 D E C I S I O N This is an appeal directly from the Court of First Instance. A hectare of rice land in Cabatuan, Iloilo, is the subject of this controversy. On January 9, 1919, Teodoro Husain, the owner, sold this land to Serapio Chichirita for P30, reserving for himself the right to repurchase it within six years. The deed of sale, written in the Ilongo dialect, is contained in a private instrument, the English translation of which reads: "I, Teodoro Husain, single, of legal age, native and resident of the Municipality of Cabatuan, Province of Iloilo, Philippine Islands, because of the amount of Thirty Pesos (P30.00), Philippine currency, that was paid to me by Serapio Chichirita, married to Florentina Muyuela, of legal age, native and resident of this Municipality of Cabatuan, Province of Iloilo, Philippine Islands, hereby declare that I am selling to the aforementioned vendee Serapio Chichirita, his heirs, and the heirs of the latter, my one parcel of rice land at Barrio Salacay of this Municipality of Cabatuan, and its descriptions are as follows: One parcel of rice land that has a seedling of one cavan of palay, legal measure, bounded on the North, land of Juan Alcayaga, on the East, land of Agapito Suero, on the South, land of Elias Gallar and on the West, land of Juan Mina. The said land was inherited by me from my father who is now dead, Clemente Husain. "I also declare that we have agreed that if the vendor shall have repaid to the vendee the aforementioned amount of P30.00 within six years from this date, the vendee or his heirs shall execute a document of repurchase in my favor, but if after the said term that he cannot return the aforementioned amount, this document shall be considered absolute and irrevocably consummated and in the meantime the vendee shall be the one to make use of
the aforementioned land in accordance with the Ley Hipotecaria. "In truth whereof, I have signed this document at Cabatuan, 9th day of January, 1919. (Sgd.) TEODORO HUSAIN "Signed in the presence of: "(Sgd.) TOMAS JILOCA (Sgd.) EUSEBIO JOCANO"
Gallar in accordance with that stated in the original with the difference that this transfer is definite because it is their agreement in exchange of one head of cow described in the Certificate of Large Cattle existing in the Office or the Municipal Treasurer of this town. And in truth whereof, Graciana Husain signed hereunder together with her husband Manuel Catalan. Cabatuan, April 2, 1919. "(Sgd.) MANUEL CATALAN (English translation) Possession of the land, together with the owner's duplicate of the certificate of title of Teodoro Husain, was delivered on the same occasion to appellee who since then has been in possession of the land. In an affidavit dated March 6, 1928, Chichirita confirmed the "redemption" of the land by Graciana Husain. In another affidavit of the same date, Graciana Husain for her part confirmed having subsequently sold the land to the appellee. In 1960, appellee asked the Cadastral Court for the issuance to him of a transfer certificate of title but the court dismissed his petition for lack of jurisdiction. (The court, however, granted appellee's request for the amendment of the certificate of title by changing the surname of "Osaen" to Husain.") He, therefore, filed this suit in the Court of First Instance of Iloilo on October 10, 1960 to compel Hermenegilda and Bonifacio Husain, as heirs of Teodoro Husain, to execute a deed of conveyance in his favor so that he could get a transfer certificate of title. He also asked for damages. In their answer, Hermenegilda and Bonifacio Husain denied the sale and contended that the agreement between their father and Serapio Chichirita was that of a mortgage to secure a loan of P30. They claimed that the mortgage had been discharged on January 28, 1919 when Graciana Husain paid Teodoro Husain's debt to Chichirita. Hermenegilda and Bonifacio Husain likewise invoked (Sgd.) GRACIANA HUSAIN"
Teodoro Husain did not redeem the land, although shortly after the execution of the deed of sale, that is, on January 28, 1919, the vendee a retro, Chichirita, transferred his right to Graciana Husain, sister of the vendor a retro, in what purports to be a resale of the land. The following annotation appears on the reverse side of the deed of pacto de retro sale: "NOTA: The amount stated above was received by me from Graciana Husain and on my own voluntary will as redemption (gawad) of the same land, and because of this, I am transferring my rights as stated above to Graciana Husain in the presence of her husband Manuel Catalan, and in truth whereof I have signed at Cabatuan, 28 January, 1919. Thumb marked Serapio Chichirita" (English translation) Graciana Husain subsequently transferred her rights to the land to appellee Elias Gallar in exchange for one cow. The transaction is recorded in a second note added on the reverse side of the deed of sale. The note reads: "OTRA NOTA: "The undersigned Graciana Husain, with the consent end knowledge of her husband Manuel Catalan, has agreed with Elias Gallar that all the rights that belongs to her, or she, Graciana Husain, is transferring to the said Elias
prescription to bar appellee's action and asked for damages for the value of palay which they claimed they failed to receive on account of appellee's refusal to return possession of the land to them. The trial court found that after acquiring the land from Teodoro Husain, Serapio Chichirita sold it to Graciana Husain who in turn sold it to the appellee. Accordingly, it ordered the appellants to execute a deed of conveyance of the land in favor of the appellee on the authority of our ruling in Sapto vs. Fabiana, 103 Phil., 683. From this judgment, Bonifacio Husain brought this appeal to this Court. He contends that the land in question, which is identified as Lot No. 766 of the Cadastral Survey of Cabatuan, Iloilo and covered by Original Certificate of Title No. 4521 of the Register of Deeds of Iloilo, is not the same land which Teodoro Husain sold to Serapio Chichirita on January 9, 1919. According to appellant he raised this question at the trial but the lower court passed it up in its decision. The records on appeal do not disclose that appellant made such a claim. About the only hint that he was questioning the identity of the land sold by means of the deed of sale of January 9, 1919 was an objection to a question during the direct examination of the appellee. Thus the following appears on pages 20-21 of the transcript of notes taken on July 5, 1961: "Q. According to this Exhibit C, you bought the lot referred to in Exhibit A which is Lot 766 in question, was bought by you for one cow. Do you know how much the worth of your cow during that time? Atty. ESMERALDA [for defendants] Objection, Your honor. The question is premised on Lot 766 but the document does not mention Lot 766. xxx "COURT So your objection is that it lacks basis xxx xxx
"ATTY. ESMERALDA It lacks basis, your Honor." Otherwise, the records do not show any allegation made, much less evidence presented, by appellant of the supposed difference in the identity of the land sold in the deed of pacto de retro sale and the land now in question. Indeed, the only defense put up by appellant was that the pacto de retro sale was in reality a mortgage and that, at any rate, appellee's action was barred by the statute of limitations. In so doing, appellant joined issues with the appellee and he will not now be permitted to bring up new matters on appeal as this would constitute changing of theory so utterly unfair to the adverse party. 1 that the lower court deliberately, perhaps, ignored the point. It may be added that an admission that the land described in the deed of sale and Lot No. 766 are one and the same is implicit in appellant's defense that the deed of sale did not express the true intention of the parties. Still it is argued that no action can be brought on the basis of the deed of sale with a right of repurchase because the land in question was redeemed a few days after it had been sold. While it is indeed true that the first note written on the reverse side of the deed of sale speaks of the "redemption" of the land, there is no evidence to show that the vendee, Graciana Husain, was acting in behalf of her brother Teodoro Husain, in the exercise of the latter's right of redemption. Now, unlike a debt which a third party may satisfy even against the debtor's will 2 the right of repurchase may be exercised only by the vendor in whom the right is recognized by contract 3 or by any person to whom the right may have been transferred. 4 Graciano Husain must, therefore, be deemed to have acquired the land in her own right, subject only to Teodoro Husain's right of redemption. As the new owner she had a perfect right to dispose of the land as she in fact did when she exchanged it for a cattle with the appellee. Now, when Teodoro Husain failed to redeem the land within the stipulated period, i.e., January 9, 1925, its ownership became consolidated in the appellee. True the successive sales are in a private instrument, but they are
valid just the same. 5 By the delivery of possession of the land on April 2, 1919 the sale was consummated and title was transferred to the appellee. Indeed, this action is not for specific performance; all it seeks is to quiet title, 6 to remove the cloud cast on appellee's ownership as a result of appellant's refusal to recognize the sale made by the predecessor. And, as plaintiff-appellee is in possession of the land, the action is imprescriptible. 7 Appellant's argument that the action has prescribed would be correct if they were in possession as the action to quiet title would then be an action for recovery of real property which must be brought within the statutory period of limitation governing such actions. 8 Wherefore, the decision appealed from is affirmed, with costs against appellant.
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. 1987 Oct 29 3rd Division G.R. No. 70191 D E C I S I O N 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 of 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 Merlan in congruence with his supplication for the Inventory and Accounting of all the palay gathered by plaintiff Rodolfo Coronel who is likewise ordered, finally, to pay Lawyer Eleuterio Beltran as counsel for defendants and intervenors, Four Thousand (P4,000.00) 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. 661 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 codefendant 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: "1) Declaring them as the absolute owners of the remaining 1/3 of the 2/8 portion pertaining to the late Bernabela Lontoc, namely, 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 PLACED IN THE NAME OF PETITIONER." (at pp. 1-2, Brief for the Petitioner). 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 Title, 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. 2-3, 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. 1950-A 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 blg. 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 kahalili sa matuwid magpakailan man. Dito'y sinasaysay rin namin ang nasabing lupang tubigan ay walang sinasagutang pagkakautang kanino mang tao.' " (pp. 25-26, 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. T-41175 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 thirdparty 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. Sibonghanoy, et al., 23 SCRA 29, Sotto v. Teves, 86 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 thirdparty 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 of 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)." (Monticines v. Court of Appeals, 53 SCRA 14, 21). 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 predecessors-in-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. T75543 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. T75543 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.
Respondent Appellate Court, then the Court of Appeals, affirmed in toto the judgment of the former Court of First Instance of Pangasinan, Branch III, at Dagupan adjudging private respondent entitled to recover possession of a parcel of land and ordering petitioners, as defendants below, to vacate the premises. Petitioners, as paupers, now seek a reversal of that judgment. It was established by a relocation survey that the Disputed Portion is a 3,732 square-meter-area of a bigger parcel of sugar and coconut land (Lot No. 1, Psu-24206 [Case No. 44, GLRO Rec. No. 117]), with a total area of 8,752 square meters, situated at Calasiao, Pangasinan. The entire parcel is covered by Original Certificate of Title No. 63, and includes the adjoining Lots 2 and 3, issued on 11 September 1947 in the name of Mariano M. DE VERA, who died in 1951 without issue. His intestate estate was administered first by his widow as later by her nephew, respondent Salvador Estrada. Petitioner, JULIANA Caragay, and the decedent, Mariano DE VERA, were first cousins, "both orphans, who lived together under one roof in the care of a common aunt." As Administratrix, DE VERA's widow filed in Special Proceedings No. 4058 of the former Court of First Instance of Pangasinan, Branch III, an Inventory of all properties of the deceased, which included "a parcel of land in the poblacion of Calasiao, Pangasinan, containing an area of 5,417 square meters, more or less, and covered by Tax Declaration No. 12664." Because of the discrepancy in area mentioned in the Inventory as 5,147 square meters (as filed by the widow), and that in the title as 8,752 square meters, ESTRADA repaired to the Disputed Property and found that the northwestern portion, subsequently surveyed to be 3,732 square meters, was occupied by petitioner-spouses Juliana Caragay Layno and Benito Layno. ESTRADA demanded that they vacate the Disputed Portion since it was titled in the name of the deceased DE VERA, but petitioners refused claiming that the land belonged to them and, before them, to JULIANA's father Juan Caragay.
ESTRADA then instituted suit against JULIANA for the recovery of the Disputed Portion (Civil Case No. D-2007) which she resisted, mainly on the ground that the Disputed Portion had been fraudulently or mistakenly included in OCT No. 63, so that an implied or constructive trust existed in her favor. She then counterclaimed for reconveyance of property in the sense that title be issued in her favor. After hearing, the Trial Court rendered judgment ordering JULIANA to vacate the Disputed Portion. On appeal, respondent Appellate Court affirmed the Decision in toto. Before us, JULIANA takes issue with the following finding of respondent Court: "Although Section 102 of Act 496 allows a Petition to compel a trustee to reconvey a registered land to the cestui que trust (Severino vs. Severino, 44 Phil. 343; Escobar vs. Locsin, 74 Phil. 86) this remedy is no longer available to Juliana Caragay. Mariano de Vera's land, Lot 1, Psu-24206, was registered on September 11, 1947 (Exhibit 'C') and it was only on March 28, 1967 when the defendants filed their original answer that Caragay sought the reconveyance to her of the 3,732 square meters. Thus, her claim for reconveyance base on implied or constructive trust has prescribed after 10 years (Bananga vs. Soler, L15717, June 30, 1961; J.M. Tuason & Co. vs. Magdangal, L15539, Jan. 30, 1962; Alzona vs. Capunitan, 4 SCRA 450). In other words, Mariano de Vera's Original Certificate of Title No. 63 (Exhibit 'C') has become indefeasible." 1We are constrained to reverse. The evidence discloses that the Disputed Portion was originally possessed openly, continuously and uninterruptedly in the concept of an owner by Juan Caragay, the deceased rather of JULIANA, and had been declared in his name under Tax Declaration No. 28694 beginning with the year 1921 (Exhibit "2-C"), later revised by Tax Declaration No. 2298 in 1951 (Exhibit "2-B"). Upon the demise of her father in 1914, JULIANA adjudicated the property to herself as his sole heir in 1968 (Exhibit "4")
JULIANA CARAGAY-LAYNO, Assisted by Her Husband, BENITO LAYNO, petitioner, vs. HONORABLE COURT OF APPEALS and SALVADOR ESTRADA as Administrator of the Estate of the Deceased, MARIANO DE VERA, respondents. 1984 Dec 26 1st Division G.R. No. L-52064 D E C I S I O N MELENCIO-HERRERA, J.:
and declared it in her name under Tax Declaration No. 22522 beginning with the year 1959 (Exhibit "2-A"), later cancelled by TD No. 3539 in 1966 (Exhibit "2"). Realty taxes were also religiously paid from 1938 to 1972 (Exhibits "3-A" to "3-H"). Tacking the previous possession of her father to her own, they had been in actual, open, continuous and uninterrupted possession in the concept of owner for about forty five (45) years, until said possession was disturbed in 1966 when ESTRADA informed JULIANA that the Disputed Portion was registered in Mariano DE VERA's name. To substantiate her claim of fraud in the inclusion of the Disputed Portion in OCT No. 68, JULIANA, an unlettered woman, declared that during his lifetime, DE VERA, her first cousin, and whom she regarded as a father as he was much older, borrowed from her the Tax Declaration of her land purportedly to be used as collateral for his loan and sugar quota application; that relying on her cousin's assurances, she acceded to his request and was made to sign some documents the contents of which she did not ever know because of her ignorance; that she discovered the fraudulent inclusion of the Disputed Portion in OCT No. 63 only in 1966 when ESTRADA so informed her and sought to eject them. Of significance is the fact, as disclosed by the evidence, that for twenty (20) years from the date of registration of title in 1947 up to 1967 when this suit for recovery of possession was instituted, neither the deceased DE VERA up to the time of his death in 1951, nor his successors-ininterest, had taken steps to possess or lay adverse claim to the Disputed Portion. They may, therefore be said to be guilty of laches as would effectively derail their cause of action. Administrator ESTRADA tools interest in recovering the said portion only when he noticed the discrepancy in areas in the Inventory of Property and in the title. Inasmuch as DE VERA had failed to assert any rights over the Disputed Portion during his lifetime, nor did he nor his successors-in-interest possess it for a single moment; but that, JULIANA had been in actual, continuous and open possession thereof to the exclusion of all and sundry, the
inescapable inference is, fraud having been unsubstantiated, that it had been erroneously included in OCT No. 63. The mistake is confirmed by the fact that deducting 3,732 sq. ms., the area of the Disputed Portion from 8,752 sq. ms., the area of Lot 1 in OCT No. 63, the difference is 5,020 sq. ms., which closely approximates the area of 5,147 sq. ms., indicated in the Inventory of Property of DE VERA. In fact, the widow by limiting the area in said Inventory to only 5,147 sq. ms., in effect, recognized and admitted that the Disputed Portion of 3,132 sq. ms. did not form part of the decedent's estate. The foregoing conclusion does not necessarily wreak havoc on the indefeasibility of a Torrens title. For, mere possession of a certificate of title under the Torrens System is not conclusive as to the holder's true ownership of all the property described therein for he does not by virtue of said certificate alone become the owner of the land illegally included. 2 A Land Registration Court has no jurisdiction to decree a lot to persons who have never asserted any right of ownership over it. " . . . Obviously then, the inclusion of said area in the title of Lot No. 8151 is void and of no effect for a land registration Court has no jurisdiction to decree a lot to persons who have put no claim in it and who have never asserted any right of ownership over it. The Land Registration Act as well as the Cadastral Act protects only the holders of a title in good faith and does not permit its provisions to be used as a shield for the commission of fraud, or that one should enrich himself at the expense of another." 3 JULIANA, whose property had been wrongfully registered in the name of another, but which had not yet passed into the hands of third parties, can properly seek its reconveyance. "The remedy of the landowner whose property has been wrongfully or erroneously registered in another's name is, after one year from the date of the decree, not to set aside the decree, but, respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for reconveyance or, if the
property has passed into the hands of an innocent purchaser for value, for damages." 4 Prescription cannot be invoked against JULIANA for the reason that as lawful possessor and owner of the Disputed Portion, her cause of action for reconveyance which, in effect, seeks to quiet title to the property, falls within settled jurisprudence that an action to quiet title to property in one's possession is imprescriptible. 5 Her undisturbed possession over a period of fifty two (52) years gave her 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 on her own title. 6 Besides, under the circumstances, JULIANA's right to quiet title, to seek reconveyance, and to annul OCT. No. 63 accused only in 1966 when she was made aware of a claim adverse to her own. It was only then that the statutory period of prescription may be said to have commenced to run against her, following the pronouncement in Faja vs. Court of Appeals, supra, a case almost identical to this one. " . . . Inasmuch as it is alleged in paragraph 3 of Frial's complaint, that Felipa Faja has been in possession of the property since 1945 up to the present for a period of 30 years, her cause of action for reconveyance, which in effect seeks to quiet her title to the property, falls within that rule. If at all, the period of prescription began to run against Felipa Faja only from the time she was served with copy of the complaint in 1975 giving her notice that the property she was occupying was titled in the name of Indelecio Frial. There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of third party and its effect on his own title, which right can be claimed only by one who is in possession. No better situation can be conceived at the moment for Us to apply this rule on equity than that of
herein petitioners whose mother, Felipa Faja, as in possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years, was titled in the name of a third person. We hold that in such a situation the right to quiet title to the property, to seek its reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a claim adverse to his own, and it is only then that the statutory period of prescription commences to run against such possessor." WHEREFORE, the judgment under review is hereby REVERSED and SET ASIDE, and another one entered ordering private respondent Salvador Estrada, as Administrator of the Estate of the Deceased, Mariano de Vera, to cause the segregation of the disputed portion of 3,732 square meters forming part of Lot No. 1, Psu-24206, Case No. 44, GLRO Rec. No. 117, presently occupied by petitioner Juliana Caragay-Layno, and to reconvey the same to said petitioner. After the segregation shall have been accomplished, the Register of Deeds of Pangasinan is hereby ordered to issue a new certificate of title covering said 3,732 sq. m. portion in favor of petitioner, and another certificate of title in favor of the Estate of the deceased, Mariano de Vera covering the remaining portion of 5,0520 square meters. No costs. SO ORDERED.
These are the key issues raised in this petition to review on certiorari the Decision 2 of the respondent Court promulgated on September 28, 1990 in CA-G.R. CV No. 18155, which affirmed the decision dated December 29, 1987 of the Regional Trial Court, Branch 38, 3 Lingayen, Pangasinan, dismissing a complaint for quieting of title. The Facts In an action for quieting of title commenced before the aforementioned trial court, the following facts, "stripped of unnecessary verbiage", were established by the respondent Court: 4 PLAINTIFFS aver that they are the actual possessors of a parcel of land situated in Malawa, Lingayen, Pangasinan, more particularly described as fishpond, cogonal, unirrigated rice and residential land, bounded on the N by Camilo Aviles; on the E by Malawa River, on the S by Anastacio Aviles and on the W by Juana and Apolonio Joaquin, with an area of 18,900 square meters and declared under Tax Declaration No. 31446. This property is the share of their father, Eduardo Aviles and brother of the defendant, in the estate of their deceased parents, Ireneo Aviles and Anastacia Salazar. SINCE 1957, Eduardo Aviles was in actual possession of the afore-described property. In fact, the latter mortgaged the same with the Rural Bank and Philippine National Bank branch in Lingayen. When the property was inspected by a bank representative, Eduardo Aviles, in the presence of the boundary owners, namely, defendant Camilo Aviles, Anastacio Aviles and Juana and Apolonio Joaquin(,) pointed to the inspector the existing earthen dikes as the boundary limits of the property and nobody objected. When the real estate mortgage was foreclosed, the property was sold at public auction but this was redeemed by plaintiffs' mother and the land was subsequently transferred and declared in her name. ON March 23, 1983, defendant Camilo Aviles asserted a color of title over the northern portion of the property with an area of approximately 1,200 square meters by constructing a bamboo fence (thereon) and moving the
earthen dikes, thereby molesting and disturbing the peaceful possession of the plaintiffs over said portion. UPON the other hand, defendant Camilo Aviles admitted the agreement of partition (Exh. "1") executed by him and his brothers, Anastacio and Eduardo. In accordance therewith, the total area of the property of their parents which they divided is 46,795 square meters and the area alloted (sic) to Eduardo Aviles is 16,111 square meters more or less, to Anastacio Aviles is 16,214 square meters more or less, while the area alloted to defendant Camilo Aviles is 14,470 square meters more or less. The respective area(s) alloted to them was agreed and measured before the execution of the agreement but he was not present when the measurement was made. Defendant agreed to have a smaller area because his brother Eduardo asked him that he wanted a bigger share because he has several children to support. The portion in litigation however is part of the share given to him in the agreement of partition. At present, he is only occupying an area of 12,686 square meters which is smaller than his actual share of 14,470 square meters. Tax Declarations Nos. 23575, 481 and 379 covering his property from 1958 (Exhs. "7", "8" and "9") show that the area of his property is 14,470 square meters. The riceland portion of his land is 13,290 square meters, the fishpond portion is 500 square meters and the residential portion is 680 square meters, or a total of 14,470 square meters. That the topography of his land is not the same, hence, the height of his pilapils are likewise not the same. In its decision dated December 29, 1987, the trial court disposed of the case thus: 5 WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Ordering the parties to employ the services of a Land Surveyor of the Bureau of Lands, Region I, San Fernando, La Union, to relocate and determine the extent and the boundary limit of the land of the defendant on its southern side in order that the fourteen thousand four hundred seventy (14,470) square meters which is the actual area given to the defendant be determined;
ANASTACIA VDA. DE AVILES, ET AL., petitioners, vs. COURT OF APPEALS and CAMILO AVILES, respondents. 1996 Nov 21 3rd Division G.R. No. 95748 Is the special civil action of Quieting of Title under Rule 64 the proper remedy for settling a boundary dispute? Did the respondent Court 1 commit a reversible error when it did not declare the respective rights of the parties over the disputed property in said action?
2. Ordering the complaint dismissed for lack of basis and merits; 3. Ordering the plaintiffs to pay the defendant the sum of two thousand (P2,000.00) pesos as attorney's fees and to further pay the costs of the proceedings; 4. All other claims are denied for lack of basis. Dissatisfied with the trial court's decision, petitioners appealed to the respondent appellate Court. In its nowassailed Decision, the Court of Appeals affirmed in part the decision of the trial court, reasoning that a special civil action for quieting of title is not the proper remedy for settling a boundary dispute, and that petitioners should have instituted an ejectment suit instead. The dispositive portion of the impugned Decision reads as follows: WHEREFORE, in view of the foregoing, the decision dated December 29, 1987 dismissing the complaint is hereby AFFIRMED but without necessarily agreeing with the ration d'etre (sic) proferred by the Court a quo. The portion thereof ordering the parties to employ the service of a land surveyor to relocate and determine the extent and boundary limit of the land of the defendant on its southern portion in order that the fourteen thousand four hundred seventy (14,470) square meters which is the actual area given to the defendant be determined is hereby REVERSED and SET ASIDE. Costs against plaintiffs-appellants. The Issues Disagreeing with the respondent Court, petitioners now raise the following issues: 6 a. Whether or not the Hon. Court of Appeals is correct when it opined that the . . . complaint for quieting of title instituted by the petitioners against private respondent before the court a quo is not the proper remedy but rather, it should be a case for eejectment (sic). b. Whether or not the Hon. Court of Appeals is correct in rendering a decision, now subject of the instant petition,
without fully determining the respective rights of the herein parties. Petitioners deem to be "without basis" the respondent Court's holding that quieting of title is not the proper remedy in the case a quo. They assert that private respondent is occupying the disputed lot because he claimed it to be part of his share in the partitioned property of his parents, whereas petitioners are claiming the said lot as part and parcel of the land allotted to Eduardo Aviles, petitioners' predecessor-in-interest. They contend that they have been occupying the aforesaid land as heirs of Eduardo Aviles in "open, actual, continuous, peaceful, public and adversed (sic) (possession) against the whole world." Further, they argue that, if indeed the disputed lot belonged to private respondent, why then did it take him "almost 26 long years from June 27, 1957 or until March 27, 1983" to assert his ownership; why did he not "assert his ownership" over the property when Eduardo Aviles was still alive; and why did he not take any "action" when the mortgage over the disputed property was foreclosed? 7 Private respondent corrects the petitioners' claim in regard to the date when he had the bamboo fence constructed. He alleges that the petitioners maliciously concocted the story that private respondent had purportedly encroached some 1,200 meters on their property when, in fact, "he was merely repairing the old bamboo fence existing where it had always been since 1957." 8 The Court's Ruling First Issue: Quieting of Title Not Proper RemedyFor Settling Boundary Dispute We agree with respondent Court. The facts presented unmistakably constitute a clear case of boundary dispute, which is not cognizable in a special civil action to quiet title. Quieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real property. 9
The Civil Code authorizes the said remedy in the following language: Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. An action may also be brought to prevent a cloud from being cast upon a title to real property or any interest therein. In fine, to avail of the remedy of quieting of title, a plaintiff must show that there is an instrument, record, claim, encumbrance or proceeding which constitutes or casts a cloud, doubt, question or shadow upon the owner's title to or interest in real property. Thus, petitioners have wholly misapprehended the import of the foregoing rule by claiming that respondent Court erred in holding that there was "no . . . evidence of any muniment of title, proceeding, written contract, . . .", and that there were, as a matter of fact, two such contracts, viz., (i) the Agreement of Partition executed by private respondent and his brothers (including the petitioners' father and predecessor-in-interest), in which their respective shares in the inherited property were agreed upon, and (ii) the Deed of Sale evidencing the redemption by petitioner Anastacia Vda. de Aviles of the subject property in a foreclosure sale. However, these documents in no way constitute a cloud or cast a doubt upon the title of petitioners. Rather, the uncertainty arises from the parties' failure to situate and fix the boundary between their respective properties. As correctly held by the respondent Court, "(i)n fact, both plaintiffs and defendant admitted the existence of the agreement of partition dated June 8, 1957 and in accordance therewith, a fixed area was allotted (sic) to them and that the only controversy is whether these lands were properly measured. There is no adverse claim by the defendant "which is apparently valid, but is, in truth and in
10
fact, invalid, ineffective, voidable, or unenforceable" and which constitutes a cloud thereon. Corollarily, and equally as clear, the construction of the bamboo fence enclosing the disputed property and the moving of earthen dikes are not the "clouds" or "doubts" which can be removed in an action for quieting of title. An action to quiet title or to remove cloud may not be brought for the purpose of settling a boundary dispute. The precedent on this matter cited by the respondent Court in its Decision is herewith reproduced in full: 10 In Ashurst v. McKenzie (1890) 92 Ala. 484, 9 So. 262, where the complainants' predecessor in title and the defendant had, during their occupancy, destroyed and obliterated the boundary line between their adjoining tracts of land, and there was now a dispute as to its location, it was held that a bill did not lie to remove a cloud on the complainants' title. The court said: "There is no allegation or evidence of any muniment of title, proceeding, written contract, or paper showing any color of title in the defendant, which could cast a shadow on the title of complainants to any part of the land; there is no overlapping of description in the muniments held by either. The land of complainants and defendant join. The line which separates them is in dispute and is to be determined by evidence aliunde. Each admits that the other has title up to his line wherever it may be, and the title papers of neither fix its precise location. So that there is no paper the existence of which clouds the title of either party, and nothing could be delivered up and canceled under the decree of the court undertaking to remove a cloud. Another similarly instructive precedent reported in the same reference is also quoted below: In Kilgannon v. Jenkinson (1883) 51 Mich. 240, 16 N.W. 390, the court, dismissing a bill to quiet title, said: "The fundamental dispute is about the correct position of the line between lots 3 and 7. The case is not one where a complainant in possession of a specific piece of land, and a defendant out of possession, but claiming some right or
title, are contending as to which one has the better right to that same parcel; but it is a case where the titles are not opposed, and the basis and existence of all right and claim depend simply upon where the original line runs. When that is once settled, there can remain no semblance of claim or cloud to be passed on, and the issue on that particular question is one regularly triable at law. . . 11 Second Issue: Should Partie's Rights Have Been Declared? Petitioners also chide the respondent Court (and the trial court) for not declaring the respective rights of the parties with respect to the land in question, arguing that "when one is disturbed in any form in his rights of property over an immovable by the unfounded claims of others, he has the right to ask from the competent courts: . . . that their respective rights be determined . . . ". As support for their thesis, petitioners cite the ancient case of Bautista vs. Exconde. 12 Rule 64 of the Rules of Court, dealing with actions for declaratory relief, specifies in Section 1 thereof the grounds, conditions precedent or requisites for bringing such petitions. 13 This Court has previously held that Under this rule, only a person who is interested "under a deed, will, contract or other written instrument, and whose rights are affected by a statute or ordinance, may bring an action to determine any question of construction or validity arising under the instrument or statute and for a declaration of his rights or duties thereunder." This means that the subject matter must refer to a deed, will, contract or other written instrument, or to a statute or ordinance, to warrant declaratory relief. Any other matter not mentioned therein is deemed excluded. This is under the principle of expressio unius est exclussio alterius. 14 Inasmuch as the enumeration of the causes, grounds or conditions precedent in the first paragraph of said Sec. 1 is exclusive, by parity of rea-soning, it follows that similar remedies provided for in the second paragraph of the same section would also be marked with the same exclusivity as to bar any other cause possibly clouding
one's title as a ground for such petitions. Thus, even assuming arguendo that the action to quiet title had been brought under Rule 64, the same would still not have prospered, the subject matter thereof not referring to "a deed, will, contract or other written instrument, or to a statute or ordinance," but to a boundary dispute, and therefore not warranting the grant of declaratory relief. From another perspective, we hold that the trial court (and likewise the respondent Court) cannot, in an action for quieting of title, order the determination of the boundaries of the claimed property, as that would be tantamount to awarding to one or some of the parties the disputed property in an action where the sole issue is limited to whether the instrument, record, claim, encumbrance or proceeding involved constitutes a cloud upon the petitioners' interest or title in and to said property. Such determination of boundaries is appropriate in adversarial proceedings where possession or ownership may properly be considered and where evidence aliunde, other than the "instrument, record, claim, encumbrance or proceeding" itself, may be introduced. An action for forcible entry, whenever warranted by the period prescribed in Rule 70, or for recovery of possession de facto, also within the prescribed period, may be availed of by the petitioners, in which proceeding the boundary dispute may be fully threshed out. WHEREFORE, in view of the foregoing considerations, the instant petition is hereby DENIED and the Decision appealed from is AFFIRMED. Costs against petitioners. SO ORDERED.
G.R. No. 144773 May 16, 2005 AZNAR BROTHERS REALTY COMPANY, petitioner, vs. LAURENCIO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF EMILIANO AYING, PAULINO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF SIMEON AYING, AND WENCESLAO SUMALINOG, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF ROBERTA AYING, respondents.
11
DECISION AUSTRIA-MARTINEZ, J.: This resolves the petition for review on certiorari seeking the modification of the Decision 1 of the Court of Appeals (CA) dated March 7, 2000 which affirmed with modification the Decision of the Regional Trial Court (RTC) of Lapu-Lapu City, Branch 27 in Civil Case No. 2930-L; and the Resolution dated August 2, 2000 denying petitioners motion for reconsideration of the aforementioned decision. The antecedent facts are as follows: The disputed property is Lot No. 4399 with an area of 34,325 square meters located at Dapdap, Lapu-Lapu City. Crisanta Maloloy-on petitioned for the issuance of a cadastral decree in her favor over said parcel of land. After her death in 1930, the Cadastral Court issued a Decision directing the issuance of a decree in the name of Crisanta Maloloy-ons eight children, namely: Juan, Celedonio, Emiliano, Francisco, Simeon, Bernabe, Roberta and Fausta, all surnamed Aying. The certificate of title was, however, lost during the war. Subsequently, all the heirs of the Aying siblings executed an Extra-Judicial Partition of Real Estate with Deed of Absolute Sale dated March 3, 1964, conveying the subject parcel of land to herein petitioner Aznar Brothers Realty Company. Said deed was registered with the Register of Deeds of Lapu-Lapu City on March 6, 1964 under Act No. 3344 (the law governing registration for unregistered land), and since then, petitioner had been religiously paying real property taxes on said property. In 1988, herein petitioner filed a Petition for Reconstitution of the Original Title as the original title over the subject property had been lost during the war. On April 12, 1988, the court granted said petition, thereby directing the Register of Deeds of Lapu-Lapu City to issue a reconstituted title in the name of the abovementioned Aying siblings. Thus, Original Certificate of Title (OCT) No. RO-2856 was issued. In 1991, petitioner, claiming to be the rightful owner of the subject property, sent out notices to vacate, addressed to persons occupying the property. Unheeded, petitioner then
filed a complaint for ejectment against the occupants before the Metropolitan Trial Court (MTC), Lapu-Lapu City. On February 1, 1994, the MTC ordered the occupants to vacate the property. The case eventually reached this Court, docketed as G.R. No. 128102, entitled Aznar Brothers Realty Company vs. Court of Appeals, Luis Aying, Demetrio Sida, Felomino Augusto, Federico Abing, and Romeo Augusto.2 On March 7, 2000, a Decision was promulgated in favor of herein petitioner, declaring it as the rightful possessor of the parcel of land in question. Meanwhile, herein respondents, along with other persons claiming to be descendants of the eight Aying siblings, all in all numbering around 220 persons, had filed a complaint for cancellation of the Extra-Judicial Partition with Absolute Sale, recovery of ownership, injunction and damages with the RTC of Lapu-Lapu City. The complaint was dismissed twice without prejudice. Said complaint was re-filed on August 19, 1993, docketed as Civil Case No. 2930-L. In their amended complaint, herein respondents (plaintiffs before the RTC) alleged that: they are co-owners of subject property, being descendants of the registered owners thereof under OCT No. RO-2856; they had been in actual, peaceful, physical, open, adverse, continuous and uninterrupted possession in concept of owner of subject parcel of land since time immemorial; their possession was disturbed only in the last quarter of 1991 when some of them received notices to vacate from petitioner and several weeks thereafter, earthmoving equipment entered the disputed land, bulldozing the same and destroying plants, trees and concrete monuments ("mohon"); respondents discovered that such activities were being undertaken by petitioner together with Sta. Lucia Realty and Development, Inc.; petitioner claimed to be the owner of subject property by virtue of an extra-judicial partition of real estate with deed of absolute sale executed in petitioners favor by the alleged heirs of Crisanta Maloloyon; the aforementioned extra-judicial partition of real estate with deed of absolute sale is a fraud and is null and voidab initio because not all the co-owners of subject property affixed their signature on said document and some of the co-owners who supposedly signed said document had been dead at the time of the execution thereof; petitioner entered subject land in bad faith, knowing fully well that it did not have any right to the land
and used force, threat and intimidation against respondents; and they suffered moral damages.3 Petitioner (defendant before the RTC) filed its Answer, denying that respondents are the lawful owners of subject parcel of land by virtue of their being descendants or heirs of the registered owners of subject property. Instead, petitioner alleged that it had been in actual possession of subject land as owner thereof by virtue of the extra-judicial partition of real property and deed of absolute sale executed in its favor; that in fact, it had been paying taxes thereon religiously; that it tolerated about 6 persons to live on said land but said persons were eventually ejected by court order. Petitioner then raised the affirmative defenses of failure to state cause of action and prescription, as it took respondents 27 years, 10 months and 27 days to file the action to recover subject property, when an action to recover property based on an implied trust should be instituted within 4 years from discovery of the fraud. 4 In the Pre-Trial Order dated January 30, 1995 of the RTC, the issues were narrowed down to the following: 1. Whether or not the plaintiffs [herein respondents] are the heirs of the registered owners of Lot No. 4399. 2. Whether or not plaintiffs are the owners of Lot No. 4399. 3. Whether or not the defendant Aznar [herein petitioner] is estopped to make any claim on Lot No. 4399. 4. Whether or not the defendant Aznar is a builder in bad faith. 5. Whether or not the defendants are liable for damages and attorneys fees in favor of the plaintiffs. 6. Whether or not the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is valid and had, in effect, validly conveyed to defendant Aznar Lot No. 4399. 7. Whether or not the plaintiffs action has prescribed. 5
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After trial, the RTC rendered a Decision dated July 4, 1997, ruling that respondents evidence failed to prove that the extra-judicial partition with deed of absolute sale was a totally simulated or fictitious contract and concluded that said document is valid, thus, effectively conveying to petitioner the property in question. It further held that respondents action had prescribed in that the action is considered as one for reconveyance based on implied or constructive trust, it prescribed in 10 years from the registration of the deed on March 6, 1964; and if the action is considered as one for annulment of contract on the ground of fraud, it should have been filed within 4 years from discovery of the fraud. The trial court also ruled that respondents failed to present any admissible proof of filiation, hence, they were not able to prove that they are indeed heirs of the eight Aying siblings who appear as the registered owners under OCT No. RO-2856. The dispositive portion of the RTC Decision reads as follows: WHEREFORE, judgment is hereby rendered dismissing the amended complaint on the ground of prescription, and declaring the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale dated March 3, 1964 as valid and binding, adjudging that Lot 4399 with an area of 34,325 square meters located at Dapdap, Mactan, Lapu-Lapu City had been validly conveyed to and in favor of Aznar Brothers Realty Company, and directing the Register of Deeds of Lapu-Lapu City to register the above-mentioned deed in accordance with law and to cancel Original Certificate of Title No. RO2856, and to issue a transfer certificate of title in the name of Aznar Brothers Realty Company upon payment of the necessary registration fees pursuant thereto. The Writ of Preliminary Injunction issued in this case is hereby ordered dissolved. The Motion for Contempt filed by the plaintiffs against defendants is dismissed for want of factual and legal basis. Costs against the plaintiffs. SO ORDERED.6
Herein respondents appealed the foregoing decision to the CA and on March 7, 2000, said court promulgated its Decision, the dispositive portion of which is reproduced hereunder: THE FOREGOING CONSIDERED, the contested Decision while AFFIRMED is hereby MODIFIED. The heirs of Emiliano Aying, Simeon Aying and Roberta Aying are hereby declared as the lawful owners of the contested property but equivalent only to 3/8. SO ORDERED. In modifying the RTC judgment, the CA ratiocinated that "an action for recovery of possession of registered land never prescribes in view of the provision of Section 44, Act No. 496 (now Sec. 47, PD 1520), to the effect that no title to registered land in derogation to that of a registered owner shall be acquired by prescription." The CA further ruled that even if the action is deemed to be based on implied trust, prescription did not begin to run since there is no evidence that positive acts of repudiation were made known to the heirs who did not participate in the execution of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. Thus, striking down the RTCs ruling that the respondents complaint is dismissible on the ground of prescription, the CA held instead that herein respondents action had not prescribed but upheld the validity of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale, except as to the shares of the heirs of Emiliano, Simeon and Roberta, who did not participate in the execution of said document. Herein petitioners motion for reconsideration of the CA decision was denied per Resolution dated August 2, 2000. Hence, the present petition for review on certiorari assailing the CA decision on the following grounds: I THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT AN HEIR OF THE ORIGINAL REGISTERED OWNER MAY LOSE HIS RIGHT TO RECOVER A TITLED PROPERTY BY REASON OF LACHES;
II THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT THE ACT OF REGISTRATION OF THE DEED OF PARTITION WITH SALE MAY BE CONSIDERED AN UNEQUIVOCAL REPUDIATION OF THE TRUST GIVING RISE TO PRESCRIPTION; III THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE PROVISIONS OF ARTICLE 1104 OF THE CIVIL CODE TO THE EFFECT THAT IN THE ABSENCE OF BAD FAITH OR FRAUD, THE PARTITION WITH PRETERITION OF ANY COMPULSORY HEIR SHALL NOT BE RESCINDED. 7 In their Comment, respondents argue that this case is an action to declare as null and void the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale, hence, under Article 1410 of the Civil Code, an action for declaration of an inexistent contract does not prescribe. Respondents further posit that the principle of laches should be applied against petitioner and not against them, as they (respondents) had been in actual possession of the subject property, while petitioner merely brought action to eject them more than 29 years after the alleged execution of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. They also refuted petitioners arguments regarding the application of the principles of implied and constructive trusts in this case. At the outset, it should be stressed that not all the plaintiffs who filed the amended complaint before the trial court had been impleaded as respondents in the present petition. The only parties impleaded are the heirs of Emiliano, Simeon and Roberta Aying, whom the CA adjudged as owners of a 3/8 portion of the land in dispute for not having participated in the execution of the ExtraJudicial Partition of Real Estate with Deed of Absolute Sale. It is significant to note that herein petitioner does not question the CA conclusion that respondents are heirs of the aforementioned three Aying siblings. Hence, the trial court and appellate courts findings that the Extra- Judicial Partition of Real Estate with Deed of Absolute Sale was not forged nor simulated and that the heirs of Emiliano,
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Simeon and Roberta Aying did not participate in the execution thereof, are now beyond cavil. The issues raised by petitioner for the Courts resolution are (1) whether or not respondents cause of action is imprescriptible; and (2) if their right to bring action is indeed imprescriptible, may the principle of laches apply. Respondents alleged in their amended complaint that not all the co-owners of the land in question signed or executed the document conveying ownership thereof to petitioner and made the conclusion that said document is null and void. We agree with the ruling of the RTC and the CA that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is valid and binding only as to the heirs who participated in the execution thereof, hence, the heirs of Emiliano, Simeon and Roberta Aying, who undisputedly did not participate therein, cannot be bound by said document. However, the facts on record show that petitioner acquired the entire parcel of land with the mistaken belief that all the heirs have executed the subject document. Thus, the trial court is correct that the provision of law applicable to this case is Article 1456 of the Civil Code which states: ART. 1456. 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. In Vda. De Esconde vs. Court of Appeals ,8 the Court expounded thus: Construing this provision of the Civil Code, in Philippine National Bank v. Court of Appeals , the Court stated: A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a typical trust, confidence is reposed in one person who is named a trustee for the benefit of another who is called the cestui que trust, respecting property which is held by the trustee for the benefit of the cestui que trust. A constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation. While in an express trust, a beneficiary and a trustee are
linked by confidential or fiduciary relations, in a constructive trust, there is neither a promise nor any fiduciary relation to speak of and the so-called trustee neither accepts any trust nor intends holding the property for the beneficiary.9 The concept of constructive trusts was further elucidated in the same case, as follows: . . . implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of intent or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties. In turn, implied trusts are either resulting or constructive trusts. These two are differentiated from each other as follows: Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature of circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. On the other hand, constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold.10 (Emphasis supplied) Based on such concept of constructive trusts, the Court ruled in said case that: The rule that a trustee cannot acquire by prescription ownership over property entrusted to him until and unless he repudiates the trust, applies to express trusts and resulting implied trusts. However, inconstructive implied trusts, prescription may supervene even if the trustee does not repudiate the relationship. Necessarily, repudiation of said trust is not a condition precedent to the running of the prescriptive period.11
The next question is, what is the applicable prescriptive period? In Amerol vs. Bagumbaran,12 the Court expounded on the prescriptive period within which to bring an action for reconveyance of property based on implied or constructive trust, to wit: . . . under the present Civil Code, we find that just as an implied or constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis--vis prescription, Article 1144 of the Civil Code is applicable. Article 1144. The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment. xxx xxx xxx
An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not otherwise. A long line of decisions of this Court, and of very recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that an action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the property. 13 It has also been ruled that the ten-year prescriptive period begins to run from the date of registration of the deed or the date of the issuance of the certificate of title over the property, but if the person claiming to be the owner thereof is in actual possession of the property, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. 14
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In the present case, respondents Wenceslao Sumalinog, an heir of Roberta Aying; Laurencio Aying, an heir of Emiliano Aying; and Paulino Aying, an heir of Simeon Aying, all testified that they had never occupied or been in possession of the land in dispute.15 Hence, the prescriptive period of ten years would apply to herein respondents. The question then arises as to the date from which the ten-year period should be reckoned, considering that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered under Act No. 3344 and not under Act No. 496 (Land Registration Act), despite the fact the land in dispute was already titled under Act No. 496 in the names of the Aying siblings at the time the subject document was executed. In Spouses Abrigo vs. De Vera,16 it was held that registration of instruments must be done in the proper registry, in order to affect and bind the land and, thus, operate as constructive notice to the world.17 Therein, the Court ruled: x x x If the land is registered under the Land Registration Act (and has therefore a Torrens Title), and it is sold but the subsequent sale is registered not under the Land Registration Act but under Act 3344, as amended, such sale is not considered REGISTERED x x x .18 In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered under Act No. 3344 and not under Act No. 496, said document is deemed not registered. Accordingly, the ten-year prescriptive period cannot be reckoned from March 6, 1964, the date of registration of the subject document under Act No. 3344. The prescriptive period only began to run from the time respondents had actual notice of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. The only evidence on record as to when such prescriptive period commenced as to each of the respondents are Wenceslao Sumalinogs (heir of Roberta Aying) testimony that about three years after 1964, they already learned of the existence of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale;19 and Laurencio Ayings (heir of Emiliano Aying) admission that he found out about the sale of the land in dispute a long time ago and can only estimate that it must be after martial law.20 Paulino Aying
(heir of Simeon Aying) gave no testimony whatsoever as to when the children of Simeon Aying actually learned of the existence of the document of sale. On the other hand, petitioner did not present any other evidence to prove the date when respondents were notified of the execution of the subject document. In view of the lack of unambiguous evidence of when the heirs of Emiliano Aying and Simeon Aying discovered the existence of the document of sale, it must be determined which party had the burden of proof to establish such fact. The test for determining where the burden of proof lies is to ask which party to an action or suit will fail if he offers no evidence competent to show the facts averred as the basis for the relief he seeks to obtain.21 Moreover, one alleging a fact that is denied has the burden of proving it and unless the party asserting the affirmative of an issue sustains the burden of proof of that issue by a preponderance of the evidence, his cause will not succeed.22Thus, the defendant bears the burden of proof as to all affirmative defenses which he sets up in answer to the plaintiffs claim or cause of action; he being the party who asserts the truth of the matter he has alleged, the burden is upon him to establish the facts on which that matter is predicated and if he fails to do so, the plaintiff is entitled to a verdict or decision in his favor.23 In the case at bar, it was petitioner, as the defendant before the RTC, which set up in its Answer the affirmative defense of prescription. It was, therefore, incumbent upon petitioner to prove the date from which the prescriptive period began to run. Evidence as to the date when the tenyear prescriptive period began exists only as to the heirs of Roberta Aying, as Wenceslao Sumalinog admitted that they learned of the existence of the document of sale in the year 1967. As to the heirs of Emiliano Aying and Simeon Aying, there is no clear evidence of the date when they discovered the document conveying the subject land to petitioner. Petitioner miserably failed to adduce proof of when the heirs of Emiliano Aying and Simeon Aying were notified of the subject document. Hence, with regard to said heirs, the Court may consider the admission in the amended complaint that they learned of the conveyance of the disputed land only in 1991 when petitioner sent notices to vacate to the occupants of the subject land, as the date from which the ten-year prescriptive period should be reckoned.
Respondents filed their Amended Complaint on December 6, 1993.24 Thus, with regard to respondent heirs of Roberta Aying who had knowledge of the conveyance as far back as 1967, their cause of action is already barred by prescription when said amended complaint was filed as they only had until 1977 within which to bring action. As to the respondent heirs of Emiliano and Simeon Aying, they were able to initiate their action for reconveyance of property based on implied or constructive trust well within the ten-year prescriptive period reckoned from 1991 when they were sent by petitioner a notice to vacate the subject property. Evidently, laches cannot be applied against respondent heirs of Emiliano and Simeon Aying, as they took action to protect their interest well within the period accorded them by law. With regard to petitioners argument that the provision of Article 1104 of the Civil Code, stating that a partition made with preterition of any of the compulsory heirs shall not be rescinded, should be applied, suffice it to say that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is not being rescinded. In fact, its validity had been upheld but only as to the parties who participated in the execution of the same. As discussed above, what was conveyed to petitioner was ownership over the shares of the heirs who executed the subject document. Thus, the law, particularly, Article 1456 of the Civil Code, imposed the obligation upon petitioner to act as a trustee for the benefit of respondent heirs of Emiliano and Simeon Aying who, having brought their action within the prescriptive period, are now entitled to the reconveyance of their share in the land in dispute. IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED and the Decision of the Court of Appeals dated March 7, 2000 is MODIFIED, as follows: The amended complaint of the heirs of Roberta Aying is DISMISSED on the ground of prescription. However, the heirs of Emiliano Aying and Simeon Aying, having instituted the action for reconveyance within the prescriptive period, are hereby DECLARED as the LAWFUL OWNERS of a 2/8 portion of the parcel of land covered by Original Certificate of Title No. RO-2856. SO ORDERED.
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MANUEL T. DE GUIA, petitioner, vs. COURT OF APPEALS (Former Sixth Division) and JOSE B. ABEJO, represented by his Attorney-in-Fact, Hermenegilda Abejo-Rivera, respondents. 2003 Oct 8 1st Division G.R. No. 120864 D E C I S I O N The Case This is a Petition for Review on Certiorari[1] assailing the 22 August 1994 Decision[2] as well as the 27 June 1995 Resolution of the Court of Appeals in CA-G.R. CV No. 39875. The Court of Appeals affirmed the Decision[3] of the Regional Trial Court (trial court) of Malolos, Bulacan, Branch 16, in Civil Case No. 8796-M. The trial courts Decision ordered petitioner Manuel T. De Guia (DE GUIA) to turn over to private respondent Jose B. Abejo (ABEJO) possession of the one half () undivided portion of a fishpond and to pay actual damages and attorneys fees. The Antecedents On 12 May 1986, ABEJO[4] instituted an action for recovery of possession with damages against DE GUIA. In his complaint, ABEJO alleged that he is the owner of the undivided portion of a property used as a fishpond (FISHPOND) situated in Meycauayan, Bulacan and covered by TCT No. T-6358 of the Bulacan Register of Deeds. He alleged ownership over approximately 39,611 square meters out of the FISHPONDs total area of 79,220 square meters. ABEJO further averred that DE GUIA continues to possess and use the FISHPOND without any contract and without paying rent to ABEJOs damage and prejudice. ABEJO also complained that DE GUIA refuses to surrender ownership and possession of the FISHPOND despite repeated demands to do so after DE GUIAs sublease contract over the FISHPOND had expired. ABEJO asked the trial court to order DE GUIA to vacate an approximate area of 39,611 square meters as well as pay damages. DE GUIA, a lawyer by profession, appeared on his own behalf. He filed his Answer on 12 January 1990 after the
Court of Appeals resolved several issues concerning the validity of the service of summons on him. In his Answer, DE GUIA alleged that the complaint does not state a cause of action and has prescribed. He claimed that the FISHPOND was originally owned by Maxima Termulo who died intestate with Primitiva Lejano as her only heir. According to him, ABEJO is not the owner of the entire FISHPOND but the heirs of Primitiva Lejano who authorized him to possess the entire FISHPOND. He assailed ABEJOs ownership of the undivided portion of the FISHPOND as void and claimed ownership over an undivided half portion of the FISHPOND for himself. DE GUIA sought payment of damages and reimbursement for the improvements he introduced as a builder in good faith. The trial court set the pre-trial and required the parties to file their pre-trial briefs. ABEJO filed his pre-trial brief[5] on 05 April 1990. DE GUIA filed his pre-trial brief[6] on 31 July 1990. DE GUIAs pre-trial brief raised as the only issue in the case the amount of damages in the form of rent that DE GUIA should pay ABEJO. DE GUIA also submitted an Offer to Compromise,[7] offering to settle ABEJOs claim for P300,000 and to lease the entire FISHPOND to any party of ABEJOs choice. Hearing commenced on 30 July 1990. ABEJO rested his case on 4 December 1990. DE GUIAs last witness completed her testimony on 22 November 1991. The trial court summarized the evidence presented by ABEJO and DE GUIA as follows: Evidence adduced from plaintiff shows that there are two parcels of land covering a fishpond with a total area of 79,220 sq. m. more or less, situated at Ubihan, Meycauayan, Bulacan and covered by TCT No. 6358 equally owned by Primitiva Lejano and Lorenza Araniego married to Juan Abejo (Exh. A). The one half undivided portion owned by Lorenza Araniego corresponding to 39,611 sq. m. was later purchased by plaintiff from his father Teofilo Abejo (Exh. B), the only heir of the original owner on November 22, 1983. Prior to this sale on July 30, 1974 the whole fishpond (79,220) was the subject of a Salin ng Pamumusisyong ng Palaisdaan executed by the heirs of Primitiva Lejano with the knowledge and consent of Teofilo A. Abejo in favor of one
Aniano Victa and defendant. The contract provided that the period of lease shall be until November 30, 1979. When the contract expired and defendant failed to surrender the fishpond, written demands the last of which was on November 27, 1983 were made for defendants to pay back rental and to vacate the premises in question (Exh. D & E). Defendant refused to deliver possession and also to pay the rentals due. In anticipation, however, that defendant will vacate the fishpond, plaintiff, on December 21, 1983 entered into a two year Kasunduan ng Buwisan ng Palaisdaan with Ruperto C. Villarico for a consideration of P50,000.00 (Exh. G). This contract, despite its execution and even already notarized, had to be cancelled and the amount of P50,000.00 returned by plaintiff to Villarico when the defendant did not heed the demand to vacate the fishpond. For unpaid rental, actual as well as moral and exemplary damages, plaintiff asks payment of P450,000.00 and P20,000.00 attorneys fees. On the other hand, defendants evidence tends to show that the entire fishpond with an area of 79,200 sq. m. was leased to him by the heirs of Primitiva Lejano. Subsequently, defendant became the absolute owner of one half of the undivided area of the fishpond and he questioned plaintiffs ownership of the other half as void and fraudulent. As to the area pertaining to plaintiff, defendant claimed that he introduced improvements worth P500,000 and being in good faith, he asked that he should be reimbursed by plaintiff. In his pre-trial brief, however, defendant raised the only issue which is the amount of damages plaintiff is entitled to in the form of rental. Hence, the thrust of the testimonies of defendants witnesses particularly Ben Ruben Camargo and Marta Fernando Pea was the amount of rental of fishponds in the same locality as the fishpond in question at a given time. However, the documentary evidence (Exhs. 1 and 2) in support of their testimony were not offered as evidence. [8] The trial court rendered its decision on 8 June 1992, disposing as follows:
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WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant and hereby orders that: 1. Defendant shall turn over possession to plaintiff one half undivided portion of the 79,200 sq. m. fishpond who shall enjoy the benefits and fruits in equal share with the defendant effective immediately until such time that partition of the property is effected; 2. Defendant shall pay to plaintiff the amount of P262,500.00 by way of actual or compensatory damages; 3 Defendant shall pay plaintiff P20,000.00 as and for attorneys fees; and 4. To pay the costs.
PRIMITIVA LEJANO, Filipina, of legal age, single - share; and LORENZA ARANIEGO, Filipina, of legal age, married to Juan Abejo, share, --3. The FISHPOND has a total land area of approximately 79,220 square meters. ABEJO is seeking to recover possession of the undivided portion of the FISHPOND containing 39,611 square meters. 4. DE GUIA (along with a certain Aniano Victa) acquired possession of the entire FISHPOND by virtue of a document captioned Salin ng Pamumusisyong ng Palaisdaan (Lease Contract) executed between him and the heirs of Primitiva Lejano. The Lease Contract was effective from 30 July 1974 up to 30 November 1979 for a consideration of P100,000. 5. The Lease Contract was executed with the knowledge and consent of Teofilo Abejo, sole heir of Lorenza Araniego Abejo. Teofilo Abejo acquired Lorenza Araniego Abejos undivided share in the FISHPOND by intestate succession. 6. Teofilo Abejo (now deceased) sold his undivided share in the FISHPOND to his son, ABEJO, on 22 November 1983. 7. DE GUIA continues to possess the entire FISHPOND and to derive income from the property despite the expiration of the Lease Contract and several demands to vacate made by Teofilo Abejo and by his successor-in-interest, ABEJO. The last demand letter was dated 27 November 1983. 8. ABEJO filed his complaint for recovery of possession with damages against DE GUIA on 12 May 1986. 9. DE GUIAs claim of ownership over the other undivided portion of the FISHPOND has not been finally adjudicated for or against him. DE GUIA offers the verified Complaint for Annulment of Real Estate Mortgage and Contract of Lease with Preliminary Injunction signed by the heirs of Primitiva Lejano as proof of his ownership of the other undivided
half portion of the FISHPOND. Records show that DE GUIA filed the complaint for himself and as attorney-in fact of the heirs of Primitiva Lejano (Lejano Heirs)[10] against Spouses Teofilo Morte and Angelina Villarico, Spouses Ruperto and Milagros Villarico, et al. (Defendants). The case was raffled to Branch 12 of the Regional Trial Court of Malolos, Bulacan, and docketed as Civil Case. No. 86-27-M. The complaint alleged that DE GUIA acquired his undivided share in the FISHPOND from the Lejano Heirs in February 1986. DE GUIA and the Lejano Heirs sought to annul the Kasulatan ng Sanglaan and Kasulatan ng Pagbubuwis ng Palaisdaan, executed on 10 November 1979 by Primitiva Lejano in favor of the Defendants. DE GUIA and the Lejano Heirs claimed that Primitiva Lejano signed these documents under duress and without consideration. The trial court rendered judgment[11] on 28 February 1992 against DE GUIA and the Lejano Heirs as follows: WHEREFORE, the evidence having shown the plaintiffs, particularly Manuel De Guia, their successor-in-interest, not entitled upon the facts and the law to the relief prayed for in the amended complaint, the same is hereby DISMISSED with costs against said plaintiff. Instead, as prayed for by defendants, judgment is hereby rendered: 1. Declaring the Kasulatan ng Sanglaan (Exhs. A & 1) dated November 10, 1979, and the Kasulatan ng Pagbubuwis ng Palaisdaan (Exhs. C &3) also dated November 10, 1979, as valid for all legal intents and purposes; 2. Ordering the Ex-Officio Sheriff, RTC, Bulacan, to proceed with the extrajudicial foreclosure of the subject real estate mortgage; and 3. Ordering plaintiffs to pay defendants attorneys fees in the amount of P20,000.00. SO ORDERED.[12] The Court of Appeals affirmed the trial court in a Decision dated 30 August 2002 in CA-G.R. CV No. 38031. The Court
SO ORDERED.[9] Aggrieved, DE GUIA went to the Court of Appeals insisting the trial court erred in ordering him to vacate and surrender possession of the undivided portion of the FISHPOND and to pay actual damages and attorneys fees. The Court of Appeals found DE GUIAs appeal without merit and affirmed the trial courts decision. Upon DE GUIAs motion for reconsideration, the appellate court reduced the compensatory damages from P262,500 to P212,500. Hence, the instant petition. The undisputed facts as found by the trial court and adopted in toto by the Court of Appeals are restated as follows: 1. The subject of the dispute are two undivided parcels of land used as a fishpond situated in Barrio Ubihan, Meycauayan, Bulacan, originally co-owned by Primitiva Lejano and Lorenza Araniego married to Juan Abejo. 2. The FISHPOND is registered under the names of Primitiva Lejano and Lorenza Araniego under TCT No. 6358 of the Bulacan Register of Deeds as follows:
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of Appeals found the claim of force and intimidation in the execution of the documents as highly improbable since Primitiva Lejanos son, Renato Davis, witnessed the signing of the documents and found nothing irregular at the time. The appellate court also held that assuming Defendants threatened DE GUIA and the Lejano Heirs with immediate foreclosure, Defendants were merely exercising their legitimate right of foreclosing the mortgaged property for non-payment of the loan. In addition, Primitiva Lejanos lawyer and notary public, Atty. Mamerto Abao, testified that the parties appeared before him to affirm the contents of the documents. He also stated that he was present when Defendants paid Primitiva Lejano Davis and her son Renato. As of this writing, DE GUIA has a pending motion for reconsideration before the Court of Appeals. In the event the Court of Appeals Decision attains finality, DE GUIA may lose whatever right he claims over the FISHPOND. The Trial Courts Ruling The trial court ruled that ABEJO has the right to demand that DE GUIA vacate and surrender an area equivalent to ABEJOs undivided share in the FISHPOND. The trial court explained that DE GUIAs sublease contract expired in 1979 and ABEJO acquired his fathers share in 1983. However, the trial court pointed out that ABEJO failed to present evidence of the judicial or extra-judicial partition of the FISHPOND. The identification of the specific area pertaining to ABEJO and his co-owner is vital in an action to recover possession of real property. Nevertheless, the trial court declared that pending partition, it is only just that DE GUIA pay ABEJO a reasonable amount as rental for the use of ABEJOs share in the FISHPOND. DE GUIA admitted this obligation when he raised as sole issue in his pre-trial brief how much rent he should pay ABEJO. DE GUIA even proposed P300,000 as the reasonable amount but under certain conditions which ABEJO found unacceptable. In determining the reasonable rent due to ABEJO, the trial court considered the Lease Contract between ABEJO and a certain Ruperto C. Villarico which provided for a yearly rent of P25,000 for undivided portion of the FISHPOND.
The trial court declared that the total amount of rent due is P212,500, computed from November 1983 when ABEJO became a co-owner of the FISHPOND up to 1991[13] or a period of eight and one half years. The trial court further ordered DE GUIA to pay an additional P50,000 which represents the amount ABEJO returned to Ruperto C. Villarico when they cancelled the Lease Contract between them due to DE GUIAs refusal to vacate the FISHPOND. Lastly, the trial court ruled that pending partition, ABEJO as co-owner has the right to possess the FISHPOND and to receive an equal share in the benefits from the FISHPOND effective immediately. Until there is a partition, and while there is no contract of lease, the Civil Code provisions on co-ownership shall govern the rights of the parties. The Court of Appeals Ruling The Court of Appeals affirmed the trial courts decision. The Court of Appeals debunked DE GUIAs claim that partition and not recovery of possession was the proper remedy under the circumstances. The Court of Appeals pointed out that DE GUIAs failure to respect ABEJOs right over his undivided share in the FISHPOND justifies the action for recovery of possession. The trial courts decision effectively enforces ABEJOs right over the property which DE GUIA violated by possession and use without paying compensation. According to the Court of Appeals, partition would constitute a mechanical aspect of the decision just like accounting when necessary. The Court of Appeals likewise rejected DE GUIAs claim that the award of compensatory damages of P242,000, computed based on the rent stipulated in the Lease Contract between ABEJO and Ruperto C. Villarico, is grossly exorbitant. The Court of Appeals clarified that the amount the trial court awarded was P262,500 and not P242,000 as erroneously alleged by DE GUIA. The Court of Appeals pointed out that the notarized Lease Contract between ABEJO and Ruperto C. Villarico carries more evidentiary weight than the testimonies of DE GUIAs witnesses, Ben Ruben Camargo and Marta Fernando Pea. The Court of Appeals also upheld the award of attorneys fees since the
parties could have avoided litigation had DE GUIA heeded the justifiable demands of ABEJO. On motion for reconsideration, the Court of Appeals reduced the compensatory damages from P262,500 to P212,500. The Court of Appeals explained that the trial court correctly computed the total amount of rent due at P212,500. The trial court erred, however, in adding the sum of P50,000 representing the rent for 1983 and 1984 which ABEJO returned to Ruperto C. Villarico. The appellate court clarified that the sum of P212,500 was arrived at by multiplying the rent of P25,000 by 8 years. The 8 year period already included the two months rent received from and then subsequently reimbursed to Ruperto C. Villarico. The Issues DE GUIA raises the following issues in his Memorandum: I. THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS DECISION DENYING PETITIONERS PLEA FOR DISMISSAL OF THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION; II. THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS ORDER DIRECTING PETITIONER TO TURN OVER THE ONE-HALF UNDIVIDED PORTION OF THE FISHPOND WHICH IS STILL UNDER A STATE OF CO-OWNERSHIP; III. THE COURT OF APPEALS ERRED IN AFFIRMING, IN PART, THE AWARD OF ACTUAL OR COMPENSATORY DAMAGES DESPITE LACK OF CREDIBLE EVIDENCE TO SUPPORT THE SAME; IV.
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THE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD OF ATTORNEYS FEES IN PRIVATE RESPONDENTS FAVOR. [14] In essence, this Court is asked to resolve: (1) whether an action for recovery of possession and turn-over of the undivided portion of a common property is proper before partition; and (2) whether there is sufficient basis for the award of compensatory damages and attorneys fees. The Courts Ruling The petition is partly meritorious. First and Second Issues: Cause of Action and Turn-Over of Possession DE GUIA contends that a co-owner cannot claim a definite portion from the property owned in common until there is a partition. DE GUIA argues that ABEJO should have filed an action for partition instead of recovery of possession since the court cannot implement any decision in the latter case without first a partition. DE GUIA contends that an action for recovery of possession cannot prosper when the property subject of the action is part of an undivided, coowned property. The procedural mode adopted by ABEJO, which is recovery of possession, makes enforcement difficult if not impossible since there is still no partition of the subject property. Under Article 484 of the Civil Code, there is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. A co-owner of an undivided parcel of land is an owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract.[15] On the other hand, there is no co-ownership when the different portions owned by different people are already concretely determined and separately identifiable, even if not yet technically described.[16] Article 487 of the Civil Code provides, [a]ny one of the coowners may bring an action in ejectment. This article covers all kinds of actions for the recovery of possession.
Article 487 includes forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de reivindicacion). The summary actions of forcible entry and unlawful detainer seek the recovery of physical possession only. These actions are brought before municipal trial courts within one year from dispossession. However, accion publiciana, which is a plenary action for recovery of the right to possess, falls under the jurisdiction of the proper regional trial court when the dispossession has lasted for more than one year. Accion de reivindicacion, which seeks the recovery of ownership, also falls under the jurisdiction of the proper regional trial court.[17] Any co-owner may file an action under Article 487 not only against a third person, but also against another co-owner who takes exclusive possession and asserts exclusive ownership of the property.[18] In the latter case, however, the only purpose of the action is to obtain recognition of the co-ownership. The plaintiff cannot seek exclusion of the defendant from the property because as co-owner he has a right of possession. The plaintiff cannot recover any material or determinate part of the property.[19] In Hermogena G. Engreso with Spouse Jose Engreso v. Nestoria De La Cruz and Herminio De La Cruz,[20] we reiterated the rule that a co-owner cannot recover a material or determinate part of a common property prior to partition as follows: It is a basic principle in civil law that before a property owned in common is actually partitioned, all that the coowner has is an ideal or abstract quota or proportionate share in the entire property. A co-owner has no right to demand a concrete, specific or determinate part of the thing owned in common because until division is effected his right over the thing is represented only by an ideal portion. As such, the only effect of an action brought by a co-owner against a co-owner will be to obtain recognition of the coownership; the defendant cannot be excluded from a specific portion of the property because as a co-owner he has a right to possess and the plaintiff cannot recover any
material or determinate part of the property. Thus, the courts a quo erred when they ordered the delivery of onehalf () of the building in favor of private respondent. Indisputably, DE GUIA has been in exclusive possession of the entire FISHPOND since July 1974. Initially, DE GUIA disputed ABEJOs claim of ownership over the undivided portion of the FISHPOND. Subsequently, he implicitly recognized ABEJOs undivided share by offering to settle the case for P300,000 and to vacate the property. During the trial proper, neither DE GUIA nor ABEJO asserted or manifested a claim of absolute and exclusive ownership over the entire FISHPOND. Before this Court, DE GUIA limits the issues to the propriety of bringing an action for recovery of possession and the recovery of compensatory damages. Following the inherent and peculiar features of coownership, while ABEJO and DE GUIA have equal shares in the FISHPOND quantitatively speaking, they have the same right in a qualitative sense as co-owners. Simply stated, ABEJO and DE GUIA are owners of the whole and over the whole, they exercise the right of dominion. However, they are at the same time individual owners of a portion, which is truly abstract because until there is partition, such portion remains indeterminate or unidentified.[21] As coowners, ABEJO and DE GUIA may jointly exercise the right of dominion over the entire FISHPOND until they partition the FISHPOND by identifying or segregating their respective portions. Since a co-ownership subsists between ABEJO and DE GUIA, judicial or extra-judicial partition is the proper recourse. An action to demand partition is imprescriptible and not subject to laches.[22] Each co-owner may demand at any time the partition of the common property unless a co-owner has repudiated the co-ownership under certain conditions.[23] Neither ABEJO nor DE GUIA has repudiated the co-ownership under the conditions set by law. To recapitulate, we rule that a co-owner may file an action for recovery of possession against a co-owner who takes exclusive possession of the entire co-owned property. However, the only effect of such action is a recognition of
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the co-ownership. The courts cannot proceed with the actual partitioning of the co-owned property. Thus, judicial or extra-judicial partition is necessary to effect physical division of the FISHPOND between ABEJO and DE GUIA. An action for partition is also the proper forum for accounting the profits received by DE GUIA from the FISHPOND. However, as a necessary consequence of such recognition, ABEJO shall exercise an equal right to possess, use and enjoy the entire FISHPOND. DE GUIA further claims that the trial and appellate courts erred when they ordered the recovery of rent when the exact identity of the portion in question had not yet been clearly defined and delineated. According to DE GUIA, an order to pay damages in the form of rent is premature before partition. We disagree. The right of enjoyment by each co-owner is limited by a similar right of the other co-owners. A co-owner cannot devote common property to his exclusive use to the prejudice of the co-ownership.[24] Hence, if the subject is a residential house, all the co-owners may live there with their respective families to the extent possible. However, if one co-owner alone occupies the entire house without opposition from the other co-owners, and there is no lease agreement, the other co-owners cannot demand the payment of rent. Conversely, if there is an agreement to lease the house, the co-owners can demand rent from the co-owner who dwells in the house. The co-owners can either exercise an equal right to live in the house, or agree to lease it. If they fail to exercise any of these options, they must bear the consequences. It would be unjust to require the co-owner to pay rent after the co-owners by their silence have allowed him to use the property.[25] In case the co-owners agree to lease a building owned in common, a co-owner cannot retain it for his use without paying the proper rent.[26] Moreover, where part of the property is occupied exclusively by some co-owners for the exploitation of an industry, the other co-owners become
co-participants in the accessions of the property and should share in its net profits.[27] The Lejano Heirs and Teofilo Abejo agreed to lease the entire FISHPOND to DE GUIA. After DE GUIAs lease expired in 1979, he could no longer use the entire FISHPOND without paying rent. To allow DE GUIA to continue using the entire FISHPOND without paying rent would prejudice ABEJOs right to receive rent, which would have accrued to his share in the FISHPOND had it been leased to others.[28] Since ABEJO acquired his undivided share in the FISHPOND on 22 November 1983, DE GUIA should pay ABEJO reasonable rent for his possession and use of ABEJOs portion beginning from that date. The compensatory damages of P25,000 per year awarded to ABEJO is the fair rental value or the reasonable compensation for the use and occupation of the leased property,[29] considering the circumstances at that time. DE GUIA shall continue to pay ABEJO a yearly rent of P25,000 corresponding to ABEJOs undivided share in the FISHPOND. However, ABEJO has the option either to exercise an equal right to occupy the FISHPOND, or to file a new petition before the trial court to fix a new rental rate in view of changed circumstances in the last 20 years. ABEJO made an extrajudicial demand on DE GUIA by sending the 27 November 1983 demand letter. Thus, the rent in arrears should earn interest at 6% per annum from 27 November 1983 until finality of this decision pursuant to Article 2209[30] of the Civil Code. Thereafter, the interest rate is 12% per annum from finality of this decision until full payment.[31] Third Issue: Lack of Credible Evidence to Support Award of Compensatory Damages DE GUIA contends the P212,500 in rent awarded to ABEJO is exorbitant. He assails as doubtful and self-serving evidence the Lease Contract between ABEJO and Ruperto C. Villarico that served as basis for the yearly rent of P25,000 for ABEJOs share in the FISHPOND. DE GUIA says the trial and appellate courts should have given credence to the testimonies of his witnesses, Ben
Ruben Camargo (Camargo) and Marta Fernando Pea (Pea) that rentals of fishponds in the same vicinity are for much lesser considerations. This issue involves calibration of the whole evidence considering mainly the credibility of witnesses. As a rule, a party may raise only questions of law in an appeal by certiorari under Rule 45 of the Rules of Court. The Supreme Court is not duty-bound to analyze and weigh again the evidence considered in the proceedings below. [32] More so in the instant case, where the Court of Appeals affirmed the factual findings of the trial court.[33] It is not true that the trial court disregarded the testimonies of Camargo and Pea because DE GUIA failed to present documentary evidence to support their testimonies. Actually, the trial and appellate courts found the testimonies of Camargo and Pea unconvincing. Judges cannot be expected to rely on the testimonies of every witness. In ascertaining the facts, they determine who are credible and who are not. In doing so, they consider all the evidence before them.[34] We find no cogent reason to overturn the trial and appellate courts evaluation of the witnesses testimonies. We likewise find reasonable the P25,000 yearly compensation for ABEJOs undivided share in the FISHPOND. Indeed, being a question of fact, it is for the trial and appellate courts to decide and this Court will not disturb their findings unless clearly baseless or irrational. The exception does not obtain in this case. Fourth Issue: Attorneys Fees The trial court did not err in imposing attorneys fees of P20,000. Attorneys fees can be awarded in the cases enumerated in Article 2208 of the Civil Code specifically: xxx (2) Where the defendants act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
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xxx DE GUIA is a lawyer and he should have known that a coowner could not take exclusive possession of a common property. Although DE GUIA offered to settle the case out of court, such offer was made under conditions not acceptable to ABEJO. Certainly, ABEJO was still put to unnecessary expense and trouble to protect his interest under paragraph (2), Article 2208 of the Civil Code. WHEREFORE, the Decision dated 22 August 1994 and Resolution dated 27 June 1995 of the Court of Appeals in CA-G.R. CV No. 39875 is AFFIRMED with respect to that portion ordering Manuel T. De Guia to pay Jose B. Abejo compensatory damages of P212,500 and attorneys fees of P20,000, and MODIFIED as follows: 1. The co-ownership between Manuel T. De Guia and Jose B. Abejo over the entire FISHPOND covered by TCT No. 6358 of the Bulacan Register of Deeds is recognized without prejudice to the outcome of CAG.R. CV No. 38031 pending before the Court of Appeals and other cases involving the same property; 2. Manuel T. De Guia and Jose B. Abejo shall equally enjoy possession and use of the entire FISHPOND prior to partition; 3. The compensatory damages of P25,000 per annum representing rent from 27 November 1983 until May 1992 shall earn interest at 6% per annum from 27 November 1983 until finality of this decision, and thereafter at 12% per annum until full payment; 4. Manuel T. de Guia shall pay Jose B. Abejo a yearly rent of P25,000 from June 1992 until finality of this decision, with interest at 6% per annum during the same period, and thereafter at 12% interest per annum until full payment; 5. After finality of this decision and for as long as Manuel T. de Guia exclusively possesses the entire FISHPOND, he shall pay Jose B. Abejo a yearly rental of P25,000 for the latters undivided share in the FISHPOND, unless Jose B.
Abejo secures from the proper court an order fixing a different rental rate in view of possible changed circumstances. SO ORDERED.
1. A house of strong material, with the lot on which it is built, situated on Escolta Street, Vigan, and valued at P6,000.00 2. A house of mixed material, with the lot on which it stands, at No. 88 Washington Street, Vigan; valued at 1,500.00 3. A lot on Magallanes Street, Vigan; valued at 100.00 4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at 60.00 5. A parcel of rice land in the pueblo of Santa Lucia; valued at 86.00 6. Three parcels of land in the pueblo of Candon; valued at 150.00 Total 7,896.00
G.R. No. L-4656 November 18, 1912 RICARDO PARDELL Y CRUZ and VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-appellees, vs. GASPAR DE BARTOLOME Y ESCRIBANO and MATILDE ORTIZ Y FELIN DE BARTOLOME, defendantsappellants. This is an appeal by bill of exceptions, from the judgment of October 5, 1907, whereby the Honorable Dionisio Chanco, judge, absolved the defendants from the complaint, and the plaintiff from a counterclaim, without special finding as to costs. Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de Pardell, the first of whom, absent in Spain by reason of his employment, conferred upon the second sufficient and ample powers to appear before the courts of justice, on June 8, 1905, in his written complaint, alleged that the plaintiff, Vicente Ortiz, and the defendant, Matilde Ortiz, are the duly recognized natural daughters of the spouses Miguel Ortiz and Calixta Felin y Paula who died in Vigan, Ilocos Sur, in 1875 and 1882, respectively; that Calixta Felin, prior to her death, executed on August 17, 1876, a nuncupative will in Vigan whereby she made her four children, named Manuel, Francisca, Vicenta, and Matilde, surnamed Ortiz y Felin, her sole and universal heirs of all her property; that, of the persons enumerated, Manuel died before his mother and Francisca a few years after her death, leaving no heirs by force of law, and therefore the only existing heirs of the said testatrix are the plaintiff Vicenta Ortiz and the defendant Matilde Ortiz; that, aside from some personal property and jewelry already divided among the heirs, the testatrix possessed, at the time of the execution of her will, and left at her death the real properties which, with their respective cash values, are as follows:
That, on or about the first months of the year 1888, the defendants, without judicial authorization, nor friendly or extrajudicial agreement, took upon themselves the administration and enjoyment of the said properties and collected the rents, fruits, and products thereof, to the serious detriment of the plaintiffs' interest; that, notwithstanding the different and repeated demands extrajudicially made upon Matilde Ortiz to divide the aforementioned properties with the plaintiff Vicente and to deliver to the latter the one-half thereof, together with one-half of the fruits and rents collected therefrom, the said defendant and her husband, the self-styled administrator of the properties mentioned, had been delaying the partition and delivery of the said properties by means of unkept promises and other excuses; and that the plaintiffs, on account of the extraordinary delay in the delivery of one-half of said properties, or their value in cash, as the case might be, had suffered losses and damages in the sum of P8,000. Said counsel for the plaintiffs therefore asked that judgment be rendered by sentencing the defendants, Gaspar de Bartolome, and Matilde Ortiz Felin de
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Bartolome, to restore and deliver to the plaintiffs one-half of the total value in cash, according to appraisal, of the undivided property specified, which one-half amounted approximately to P3,948, or if deemed proper, to recognize the plaintiff Vicenta Ortiz to be vested with the full and absolute right of ownership to the said undivided one-half of the properties in question, as universal testamentary heir thereof together with the defendant Matilde Ortiz, to indemnify the plaintiffs in the sum of P8,000, for losses and damages, and to pay the costs. Counsel for the defendants, in his answer denied the facts alleged in paragraphs 1, 4, 6, 7, and 8 thereof, inasmuch as, upon the death of the litigating sister's brother Manuel, their mother, who was still living, was his heir by force of law, and the defendants had never refused to give to the plaintiff Vicente Ortiz her share of the said properties; and stated that he admitted the facts alleged in paragraph 2, provided it be understood, however, that the surname of the defendant's mother was Felin, and not Feliu, and that Miguel Ortiz died in Spain, and not in Vigan; that he also admitted paragraph 3 of the complaint, with the difference that the said surname should be Felin, and likewise paragraph 5, except the part thereof relating to the personal property and the jewelry, since the latter had not yet been divided; that the said jewelry was in the possession of the plaintiffs and consisted of: one Lozada gold chronometer watch with a chain in the form of a bridle curb and a watch charm consisting of the engraving of a postage stamp on a stone mounted in gold and bearing the initials M. O., a pair of cuff buttons made of gold coins, four small gold buttons, two finger rings, another with the initials M. O., and a gold bracelet; and that the defendants were willing to deliver to the plaintiffs, in conformity with their petitions, one-half of the total value in cash, according to appraisement, of the undivided real properties specified in paragraph 5, which half amounted to P3,948. In a special defense said counsel alleged that the defendants had never refused to divide the said property and had in fact several years before solicited the partition of the same; that, from 1886 to 1901, inclusive, there was
collected from the property on Calle Escolta the sum of 288 pesos, besides a few other small amounts derived from other sources, which were delivered to the plaintiffs with other larger amounts, in 1891, and from the property on Calle Washington, called La Quinta, 990.95 pesos, which proceeds, added together, made a total of 1,278.95 pesos, saving error or omission; that, between the years abovementioned, Escolta, and that on Calle Washington, La Quinta, 376.33, which made a total of 1,141.71, saving error or omission; that, in 1897, the work of reconstruction was begun of the house on Calle Escolta, which been destroyed by an earthquake, which work was not finished until 1903 and required an expenditure on the part of the defendant Matilde Ortiz, of 5,091.52 pesos; that all the collections made up to August 1, 1905, including the rent from the stores, amounted to only P3,654.15, and the expenses, to P6,252.32, there being, consequently, a balance of P2,598.17, which divided between the sisters, the plaintiff and the defendant, would make the latter's share P1,299.08; that, as shown by the papers kept by the plaintiffs, in the year 1891 the defendant Bartolome presented to the plaintiffs a statement in settlements of accounts, and delivered to the person duly authorized by the latter for the purpose, the sum of P2,606.29, which the said settlement showed was owing his principals, from various sources; that, the defendant Bartolome having been the administrator of the undivided property claimed by the plaintiffs, the latter were owing the former legal remuneration of the percentage allowed by law for administration; and that the defendants were willing to pay the sum of P3,948, one-half of the total value of the said properties, deducting therefrom the amount found to be owing them by the plaintiffs, and asked that judgment be rendered in their favor to enable them to recover from the latter that amount, together with the costs and expenses of the suit. The defendants, in their counter claim, repeated each and all of the allegations contained in each of the paragraphs of section 10 of their answer; that the plaintiffs were obliged to pay to the administrator of the said property the remuneration allowed him by law; that, as the revenues collected by the defendants amounted to no more than
P3,654.15 and the expenditures incurred by them, to P6,252.32, it followed that the plaintiffs owed the defendants P1,299.08, that is one-half of the difference between the amount collected from and that extended on the properties, and asked that judgment be therefore rendered in their behalf to enable them to collect this sum from the plaintiffs, Ricardo Pardell and Vicenta Ortiz, with legal interest thereon from December 7, 1904, the date when the accounts were rendered, together with the sums to which the defendant Bartolome was entitled for the administration of the undivided properties in question. By a written motion of August 21, 1905, counsel for the plaintiffs requested permission to amend the complaint by inserting immediately after the words "or respective appraisal," fifth line of paragraph 5, the phrase "in cash in accordance with the assessed value," and likewise further to amend the same, in paragraph 6 thereof, by substituting the following word in lieu of the petition for the remedy sought: "By reason of all the foregoing, I beg the court to be pleased to render the judgment by sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz Felin de Bartolome, to restore and deliver to the plaintiffs an exact one-half of the total vale of the undivided properties described in the complaint, such value to be ascertained by the expert appraisal of two competent persons, one of whom shall be appointed by the plaintiffs and the other by the defendants, and, in case of disagreement between these two appointees such value shall be determined by a third expert appraiser appointed by the court, or, in a proper case, by the price offered at public auction; or, in lieu thereof, it is requested that the court recognize the plaintiff, Vicenta Ortiz, to be vested with a full and absolute right to an undivided one-half of the said properties; furthermore, it is prayed that the plaintiffs be awarded an indemnity of P8,000 for losses and damages, and the costs." Notwithstanding the opposition of the defendants, the said amendment was admitted by the court and counsel for the defendants were allowed to a period of three days within which to present a new answer. An exception was taken to this ruling.
22
The proper proceedings were had with reference to the valuation of the properties concerned in the division sought and incidental issues were raised relative to the partition of some of them and their award to one or the other of the parties. Due consideration was taken of the averments and statements of both parties who agreed between themselves, before the court, that any of them might at any time acquire, at the valuation fixed by the expert judicial appraiser, any of the properties in question, there being none in existence excluded by the litigants. The court, therefore, by order of December 28, 1905, ruled that the plaintiffs were entitled to acquire, at the valuation determined by the said expert appraiser, the building known as La Quinta, the lot on which it stands and the warehouses and other improvements comprised within the inclosed land, and the seeds lands situated in the pueblos of Vigan and Santa Lucia; and that the defendants were likewise entitled to acquire the house on Calle Escolta, the lot on Calle Magallanes, and the three parcels of land situated in the pueblo of Candon. After this partition had been made counsel for the defendants, by a writing of March 8, 1906, set forth: That, having petitioned for the appraisement of the properties in question for the purpose of their partition, it was not to be understood that he desired from the exception duly entered to the ruling made in the matter of the amendment to the complaint; that the properties retained by the defendants were valued at P9,310, and those retained by the plaintiffs, at P2,885, one-half of which amounts each party had to deliver to the other, as they were pro indiviso properties; that, therefore, the defendants had to pay the plaintiffs the sum of P3,212.50, after deducting the amount which the plaintiffs were obliged to deliver to the defendants, as one-half of the price of the properties retained by the former; that, notwithstanding that the amount of the counterclaim for the expenses incurred in the reconstruction of the pro indiviso property should be deducted from the sum which the defendants had to pay the plaintiffs, the former, for the purpose of bringing the matter of the partition to a close, would deliver to the latter, immediately upon the signing of the instrument of purchase and sale, the sum of
P3,212.50, which was one-half of the value of the properties alloted to the defendants; such delivery, however, was not to be understood as a renouncement of the said counterclaim, but only as a means for the final termination of the pro indiviso status of the property. The case having been heard, the court on October 5, 1907, rendered judgment holding that the revenues and the expenses were compensated by the residence enjoyed by the defendant party, that no losses or damages were either caused or suffered, nor likewise any other expense besides those aforementioned, and absolved the defendants from the complaint and the plaintiffs from the counterclaim, with no special finding as to costs. An exception was taken to this judgment by counsel for the defendants who moved for a new trial on the grounds that the evidence presented did not warrant the judgment rendered and that the latter was contrary to law. This motion was denied, exception whereto was taken by said counsel, who filed the proper bill of exceptions, and the same was approved and forwarded to the clerk of this court, with a transcript of the evidence. Both of the litigating sisters assented to a partition by halves of the property left in her will by their mother at her death; in fact, during the course of this suit, proceedings were had, in accordance with the agreement made, for the division between them of the said hereditary property of common ownership, which division was recognized and approved in the findings of the trial court, as shown by the judgment appealed from. The issues raised by the parties, aside from said division made during the trial, and which have been submitted to this court for decision, concern: (1) The indemnity claimed for losses and damages, which the plaintiffs allege amount to P8,000, in addition to the rents which should have been derived from the house on Calle Escolta, Vigan; (2) the payment by the plaintiffs to the defendants of the sum of P1,299.08, demanded by way of counterclaim, together with legal interest thereon from December 7, 1904; (3) the payment to the husband of the defendant Matilde Ortiz, of a percentage claimed to be due him as the administrator
of the property of common ownership; (4) the division of certain jewelry in the possession of the plaintiff Vicenta Ortiz; and (5) the petition that the amendment be held to have been improperly admitted, which was made by the plaintiffs in their written motion of August 21, 1905, against the opposition of the defendants, through which admission the latter were obliged to pay the former P910.50. Before entering upon an explanation of the propriety or impropriety of the claims made by both parties, it is indispensable to state that the trial judge, in absolving the defendants from the complaint, held that they had not caused losses and damages to the plaintiffs, and that the revenues and the expenses were compensated, in view of the fact that the defendants had been living for several years in the Calle Escolta house, which was pro indiviso property of joint ownership. By this finding absolving the defendants from the complaint, and which was acquiesced in by the plaintiffs who made no appeal therefrom, the first issue has been decided which was raised by the plaintiffs, concerning the indemnity for losses and damages, wherein are comprised the rents which should have been obtained from the upper story of the said house during the time it was occupied by the defendants, Matilde Ortiz and her husband, Gaspar de Bartolome. Notwithstanding the acquiescence on the part of the plaintiffs, assenting to the said finding whereby the defendants were absolved from the complaint, yet, as such absolution is based on the compensation established in the judgment of the trial court, between the amounts which each party is entitled to claim from the other, it is imperative to determine whether the defendant Matilde Ortiz, as coowner of the house on Calle Escolta, was entitled, with her husband, to reside therein, without paying to her coowner, Vicenta Ortiz, who, during the greater part of the time, lived with her husband abroad, one-half of the rents which the upper story would have produced, had it been rented to a stranger. Article 394 of the Civil Code prescribes:
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Each coowner may use the things owned in common, provided he uses them in accordance with their object and in such manner as not to injure the interests of the community nor prevent the coowners from utilizing them according to their rights. Matilde Ortiz and her husband occupied the upper story, designed for use as a dwelling, in the house of joint ownership; but the record shows no proof that, by so doing, the said Matilde occasioned any detriment to the interest of the community property, nor that she prevented her sister Vicenta from utilizing the said upper story according to her rights. It is to be noted that the stores of the lower floor were rented and accounting of the rents was duly made to the plaintiffs. Each coowner of realty held pro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his coowners, for the reason that, until a division be made, the respective part of each holder can not be determined and every one of the coowners exercises, together with his other coparticipants, joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same. As the hereditary properties of the joint ownership of the two sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz, defendant, were situated in the Province of Ilocos Sur, and were in the care of the last named, assisted by her husband, while the plaintiff Vicenta with her husband was residing outside of the said province the greater part of the time between 1885 and 1905, when she left these Islands for Spain, it is not at all strange that delays and difficulties should have attended the efforts made to collect the rents and proceeds from the property held in common and to obtain a partition of the latter, especially during several years when, owing to the insurrection, the country was in a turmoil; and for this reason, aside from that founded on the right of coownership of the defendants, who took upon themselves the administration and care of the properties of joint tenancy for purposes of their preservation and improvement, these latter are not obliged to pay to the
plaintiff Vicenta one-half of the rents which might have been derived from the upper of the story of the said house on Calle Escolta, and, much less, because one of the living rooms and the storeroom thereof were used for the storage of some belongings and effects of common ownership between the litigants. The defendant Matilde, therefore, in occupying with her husband the upper floor of the said house, did not injure the interests of her coowner, her sister Vicenta, nor did she prevent the latter from living therein, but merely exercised a legitimate right pertaining to her as coowner of the property. Notwithstanding the above statements relative to the jointownership rights which entitled the defendants to live in the upper story of the said house, yet in view of the fact that the record shows it to have been proved that the defendant Matilde's husband, Gaspar de Bartolome, occupied for four years a room or a part of the lower floor of the same house on Calle Escolta, using it as an office for the justice of the peace, a position which he held in the capital of that province, strict justice, requires that he pay his sister-in-law, the plaintiff, one half of the monthly rent which the said quarters could have produced, had they been leased to another person. The amount of such monthly rental is fixed at P16 in accordance with the evidence shown in the record. This conclusion as to Bartolome's liability results from the fact that, even as the husband of the defendant coowner of the property, he had no right to occupy and use gratuitously the said part of the lower floor of the house in question, where he lived with his wife, to the detriment of the plaintiff Vicenta who did not receive one-half of the rent which those quarters could and should have produced, had they been occupied by a stranger, in the same manner that rent was obtained from the rooms on the lower floor that were used as stores. Therefore, the defendant Bartolome must pay to the plaintiff Vicenta P384, that is, one-half of P768, the total amount of the rents which should have been obtained during four years from the quarters occupied as an office by the justice of the peace of Vigan.
With respect to the second question submitted for decision to this court, relative to the payment of the sum demanded as a counterclaim, it was admitted and proved in the present case that, as a result of a serious earthquake on August 15, 1897, the said house on Calle Escolta was left in ruins and uninhabitable, and that, for its reconstruction or repair, the defendants had to expend the sum of P6,252.32. This expenditure, notwithstanding that it was impugned, during the trial, by the plaintiffs, was duly proved by the evidence presented by the defendants. Evidence, unsuccessfully rebutted, was also introduced which proved that the rents produced by all the rural and urban properties of common ownership amounted, up to August 1, 1905, to the sum of P3,654.15 which, being applied toward the cost of the repair work on the said house, leaves a balance of P2,598.17, the amount actually advanced by the defendants, for the rents collected by them were not sufficient for the termination of all the work undertaken on the said building, necessary for its complete repair and to replace it in a habitable condition. It is therefore lawful and just that the plaintiff Vicenta Ortiz, who was willing to sell to her sister Matilde for P1,500, her share in the house in question, when it was in a ruinous state, should pay the defendants one-half of the amount expanded in the said repair work, since the building after reconstruction was worth P9,000, according to expert appraisal. Consequently, the counterclaim made by the defendants for the payment to them of the sum of P1,299.08, is a proper demand, though from this sum a reduction must be made of P384, the amount of one-half of the rents which should have been collected for the use of the quarters occupied by the justice of the peace, the payment of which is incumbent upon the husband of the defendant Matilde, as aforesaid, and the balance remaining, P915.08, is the amount which the plaintiff Vicenta must pay to the defendants. The defendants claim to be entitled to the collection of legal interest on the amount of the counterclaim, from December 7, 1904. This contention can not be sustained, inasmuch as, until this suit is finally decided, it could not be known whether the plaintiffs would or would not be
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obliged to pay the sum whatever in reimbursement of expenses incurred by the plaintiffs in the repair work on the said house on Calle Escolta, whether or not the defendants, in turn, were entitled to collect any such amount, and, finally, what the net sum would be which the plaintiff's might have to pay as reimbursement for one-half of the expenditure made by the defendants. Until final disposal of the case, no such net sum can be determined, nor until then can the debtor be deemed to be in arrears. In order that there be an obligation to pay legal interest in connection with a matter at issue between the parties, it must be declared in a judicial decision from what date the interest will be due on the principal concerned in the suit. This rule has been established by the decisions of the supreme court of Spain, in reference to articles 1108, 1109, and 1110 of the Civil Code, reference on April 24, 1867, November 19, 1869, and February 22, 1901. With regard to the percentage, as remuneration claimed by the husband of the defendant Matilde for his administration of the property of common ownership, inasmuch as no stipulation whatever was made in the matter by and between him and his sister-in-law, the said defendant, the claimant is not entitled to the payment of any remuneration whatsoever. Of his own accord and as an officious manager, he administered the said pro indiviso property, one-half of which belonged to his wife who held it in joint tenancy, with his sister-in-law, and the law does not allow him any compensation as such voluntary administrator. He is merely entitled to a reimbursement for such actual and necessary expenditures as he may have made on the undivided properties and an indemnity for the damages he may have suffered while acting in that capacity, since at all events it was his duty to care for and preserve the said property, half of which belonged to his wife; and in exchange for the trouble occasioned him by the administration of his sister-in-law's half of the said property, he with his wife resided in the upper story of the house aforementioned, without payment of one-half of the
rents said quarters might have produced had they been leased to another person. With respect to the division of certain jewelry, petitioned for by the defendants and appellants only in their brief in this appeal, the record of the proceedings in the lower court does not show that the allegation made by the plaintiff Vicenta is not true, to the effect that the deceased mother of the litigant sisters disposed of this jewelry during her lifetime, because, had she not done so, the will made by the said deceased would have been exhibited in which the said jewelry would have been mentioned, at least it would have been proved that the articles in question came into the possession of the plaintiff Vicenta without the expressed desire and the consent of the deceased mother of the said sisters, for the gift of this jewelry was previously assailed in the courts, without success; therefore, and in view of its inconsiderable value, there is no reason for holding that the said gift was not made. As regards the collection of the sum of P910.50, which is the difference between the assessed value of the undivided real properties and the price of the same as determined by the judicial expert appraiser, it is shown by the record that the ruling of the trial judge admitting the amendment to the original complaint, is in accord with the law and principles of justice, for the reason that any of the coowners of a pro indiviso property, subject to division or sale, is entitled to petition for its valuation by competent expert appraisers. Such valuation is not prejudicial to any of the joint owners, but is beneficial to their interests, considering that, as a general rule, the assessed value of a building or a parcel of realty is less than the actual real value of the property, and this being appraiser to determine, in conjunction with the one selected by the plaintiffs, the value of the properties of joint ownership. These two experts took part in the latter proceedings of the suit until finally, and during the course of the latter, the litigating parties agreed to an amicable division of the pro indiviso hereditary property, in accordance with the price fixed by the judicial expert appraiser appointed as a
third party, in view of the disagreement between and nonconformity of the appraisers chosen by the litigants. Therefore it is improper now to claim a right to the collection of the said sum, the difference between the assessed value and that fixed by the judicial expert appraiser, for the reason that the increase in price, as determined by this latter appraisal, redounded to the benefit of both parties. In consideration of the foregoing, whereby the errors assigned to the lower court have been duly refuted, it is our opinion that, with a partial reversal of the judgment appealed from, in so far as it absolves the plaintiffs from the counterclaim presented by the defendants, we should and hereby do sentence the plaintiffs to the payment of the sum of P915.08, the balance of the sum claimed by the defendants as a balance of the one-half of the amount which the defendants advanced for the reconstruction or repair of the Calle Escolta house, after deducting from the total of such sum claimed by the latter the amount of P384 which Gaspar de Bartolome, the husband of the defendant Matilde, should have paid as one-half of the rents due for his occupation of the quarters on the lower floor of the said house as an office for the justice of the peace court of Vigan; and we further find: (1) That the defendants are not obliged to pay one-half of the rents which could have been obtained from the upper story of the said house; (2) that the plaintiffs can not be compelled to pay the legal interest from December 7, 1904, on the sum expanded in the reconstruction of the aforementioned house, but only the interest fixed by law, at the rate of 6 per cent per annum, from the date of the judgment to be rendered in accordance with this decision; (3) that the husband of the defendant Matilde Ortiz is not entitled to any remuneration for the administration of the pro indiviso property belonging to both parties; (4) that, neither is he entitled to collect from the plaintiffs the sum of P910.50, the difference between the assessed valuation and the price set by the expert appraisal solicited by the plaintiffs in their amendment to the complaint; and, (5) that no
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participation shall be made of jewelry aforementioned now in the possession of the plaintiff Vicenta Ortiz. The said judgment, as relates to the points appealed, is affirmed, in so far as its findings agree with those of this decision, and is reversed, in so far as they do not. No special finding is made regarding the costs of both instances. So ordered.
occupy the subject property provided they would vacate the same should his need for the property arise. Sometime in January 1999, he verbally requested respondents to vacate the house and lot, but they refused and filed instead an action for quieting of title[8] with the RTC. Finally, upon respondents refusal to heed the last demand letter to vacate dated August 2, 2000, petitioner filed the instant case on August 9, 2000.[9] On the other hand, respondents Narcisa and Emeterio, 70 and 59 years of age, respectively,[10] denied that they begged petitioner to allow them to stay on the questioned property and stressed that they have been occupying Lot 7226 and the house standing thereon since birth. They alleged that Lot 7226 was originally registered in the name of their deceased father, Ramon Adlawan[11] and the ancestral house standing thereon was owned by Ramon and their mother, Oligia Maacap Adlawan. The spouses had nine[12] children including the late Dominador and herein surviving respondents Emeterio and Narcisa. During the lifetime of their parents and deceased siblings, all of them lived on the said property. Dominador and his wife, Graciana Ramas Adlawan, who died without issue, also occupied the same.[13] Petitioner, on the other hand, is a stranger who never had possession of Lot 7226. Sometime in 1961, spouses Ramon and Oligia needed money to finance the renovation of their house. Since they were not qualified to obtain a loan, they transferred ownership of Lot 7226 in the name of their son Dominador who was the only one in the family who had a college education. By virtue of a January 31, 1962 simulated deed of sale,[14] a title was issued to Dominador which enabled him to secure a loan with Lot 7226 as collateral. Notwithstanding the execution of the simulated deed, Dominador, then single, never disputed his parents ownership of the lot. He and his wife, Graciana, did not disturb respondents possession of the property until they died on May 28, 1987 and May 6, 1997, respectively. Respondents also contended that Dominadors signature at the back of petitioners birth certificate was forged, hence, the latter is not an heir of Dominador and
has no right to claim ownership of Lot 7226.[15] They argued that even if petitioner is indeed Dominadors acknowledged illegitimate son, his right to succeed is doubtful because Dominador was survived by his wife, Graciana.[16] On February 12, 2002, the MTC dismissed the complaint holding that the establishment of petitioners filiation and the settlement of the estate of Dominador are conditions precedent to the accrual of petitioners action for ejectment. It added that since Dominador was survived by his wife, Graciana, who died 10 years thereafter, her legal heirs are also entitled to their share in Lot 7226. The dispositive portion thereof, reads: In View of the foregoing, for failure to prove by preponderance of evidence, the plaintiffs cause of action, the above-entitled case is hereby Ordered DISMISSED. SO ORDERED.[17] On appeal by petitioner, the RTC reversed the decision of the MTC holding that the title of Dominador over Lot 7226 cannot be collaterally attacked. It thus ordered respondents to turn over possession of the controverted lot to petitioner and to pay compensation for the use and occupation of the premises. The decretal portion thereof, provides: Wherefore, the Judgment, dated February 12, 2002, of the Municipal Trial Court of Minglanilla, Cebu, in Civil Case No. 392, is reversed. Defendants-appellees are directed to restore to plaintiff-appellant possession of Lot 7226 and the house thereon, and to pay plaintiff-appellant, beginning in August 2000, compensation for their use and occupation of the property in the amount of P500.00 a month. So ordered.[18] Meanwhile, the RTC granted petitioners motion for execution pending appeal[19] which was opposed by the alleged nephew and nieces of Graciana in their motion for leave to intervene and to file an answer in intervention.
ARNELITO ADLAWAN, Petitioner, versus EMETERIO M. ADLAWAN and NARCISA M. ADLAWAN, Respondents. 2006 Jan 20 1st Division G.R. No. 161916 D E C I S I O N YNARES-SANTIAGO, J.: Assailed in this petition for review is the September 23, 2003 Decision[1] of the Court of Appeals in CA-G.R. SP No. 74921 which set aside the September 13, 2002 Decision[2] of the Regional Trial Court (RTC) of Cebu City, Branch 7, in Civil Case No. CEB-27806, and reinstated the February 12, 2002 Judgment[3] of the Municipal Trial Court (MTC) of Minglanilla, Metro Cebu, in Civil Case No. 392, dismissing petitioner Arnelito Adlawans unlawful detainer suit against respondents Emeterio and Narcisa Adlawan. Likewise questioned is the January 8, 2004 Resolution[4] of the Court of Appeals which denied petitioners motion for reconsideration. The instant ejectment suit stemmed from the parties dispute over Lot 7226 and the house built thereon, covered by Transfer Certificate of Title No. 8842,[5] registered in the name of the late Dominador Adlawan and located at Barrio Lipata, Municipality of Minglanilla, Cebu. In his complaint, petitioner claimed that he is an acknowledged illegitimate child[6] of Dominador who died on May 28, 1987 without any other issue. Claiming to be the sole heir of Dominador, he executed an affidavit adjudicating to himself Lot 7226 and the house built thereon.[7] Out of respect and generosity to respondents who are the siblings of his father, he granted their plea to
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[20] They contended that as heirs of Graciana, they have a share in Lot 7226 and that intervention is necessary to protect their right over the property. In addition, they declared that as co-owners of the property, they are allowing respondents to stay in Lot 7226 until a formal partition of the property is made. The RTC denied the motion for leave to intervene.[21] It, however, recalled the order granting the execution pending appeal having lost jurisdiction over the case in view of the petition filed by respondents with the Court of Appeals.[22] On September 23, 2003, the Court of Appeals set aside the decision of the RTC and reinstated the judgment of the MTC. It ratiocinated that petitioner and the heirs of Graciana are co-owners of Lot 7226. As such, petitioner cannot eject respondents from the property via an unlawful detainer suit filed in his own name and as the sole owner of the property. Thus WHEEFORE, premises considered, the appealed Decision dated September 13, 2002 of the Regional Trial Court of Cebu City, Branch 7, in Civil Case No. CEB-27806 is REVERSED and SET ASIDE, and the Judgment dated February 12, 2002 of the Municipal Trial Court of Minglanilla, Metro Cebu, in Civil Case No. 392 is REINSTATED. Costs against the respondent. SO ORDERED.[23] Petitioners motion for reconsideration was denied. Hence, the instant petition. The decisive issue to be resolved is whether or not petitioner can validly maintain the instant case for ejectment. Petitioner averred that he is an acknowledged illegitimate son and the sole heir of Dominador. He in fact executed an affidavit adjudicating to himself the controverted property. In ruling for the petitioner, the RTC held that the questioned January 31, 1962 deed of sale validly transferred title to Dominador and that petitioner is his
acknowledged illegitimate son who inherited ownership of the questioned lot. The Court notes, however, that the RTC lost sight of the fact that the theory of succession invoked by petitioner would end up proving that he is not the sole owner of Lot 7226. This is so because Dominador was survived not only by petitioner but also by his legal wife, Graciana, who died 10 years after the demise of Dominador on May 28, 1987.[24] By intestate succession, Graciana and petitioner became co-owners of Lot 7226. [25] The death of Graciana on May 6, 1997, did not make petitioner the absolute owner of Lot 7226 because the share of Graciana passed to her relatives by consanguinity and not to petitioner with whom she had no blood relations. The Court of Appeals thus correctly held that petitioner has no authority to institute the instant action as the sole owner of Lot 7226. Petitioner contends that even granting that he has coowners over Lot 7226, he can on his own file the instant case pursuant to Article 487 of the Civil Code which provides: ART. 487. Any one of the co-owners may bring an action in ejectment. This article covers all kinds of actions for the recovery of possession. Article 487 includes forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de reivindicacion).[26] A co-owner may bring such an action without the necessity of joining all the other coowners as co-plaintiffs because the suit is presumed to have been filed to benefit his co-owners. It should be stressed, however, that where the suit is for the benefit of the plaintiff alone who claims to be the sole owner and entitled to the possession of the litigated property, the action should be dismissed.[27] The renowned civilist, Professor Arturo M. Tolentino, explained A co-owner may bring such an action, without the necessity of joining all the other co-owners as co-plaintiffs, because the suit is deemed to be instituted for the benefit
of all. If the action is for the benefit of the plaintiff alone, such that he claims possession for himself and not for the co-ownership, the action will not prosper. (Emphasis added)[28] In Baloloy v. Hular,[29] respondent filed a complaint for quieting of title claiming exclusive ownership of the property, but the evidence showed that respondent has co-owners over the property. In dismissing the complaint for want of respondents authority to file the case, the Court held that Under Article 487 of the New Civil Code, any of the coowners may bring an action in ejectment. This article covers all kinds of actions for the recovery of possession, including an accion publiciana and a reinvidicatory action. A co-owner may bring such an action without the necessity of joining all the other co-owners as co-plaintiffs because the suit is deemed to be instituted for the benefit of all. Any judgment of the court in favor of the co-owner will benefit the others but if such judgment is adverse, the same cannot prejudice the rights of the unimpleaded coowners. If the action is for the benefit of the plaintiff alone who claims to be the sole owner and entitled to the possession thereof, the action will not prosper unless he impleads the other co-owners who are indispensable parties. In this case, the respondent alone filed the complaint, claiming sole ownership over the subject property and praying that he be declared the sole owner thereof. There is no proof that the other co-owners had waived their rights over the subject property or conveyed the same to the respondent or such co-owners were aware of the case in the trial court. The trial court rendered judgment declaring the respondent as the sole owner of the property and entitled to its possession, to the prejudice of the latters siblings. Patently then, the decision of the trial court is erroneous. Under Section 7, Rule 3 of the Rules of Court, the respondent was mandated to implead his siblings, being co-owners of the property, as parties. The respondent failed to comply with the rule. It must, likewise, be
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stressed that the Republic of the Philippines is also an indispensable party as defendant because the respondent sought the nullification of OCT No. P-16540 which was issued based on Free Patent No. 384019. Unless the State is impleaded as party-defendant, any decision of the Court would not be binding on it. It has been held that the absence of an indispensable party in a case renders ineffective all the proceedings subsequent to the filing of the complaint including the judgment. The absence of the respondents siblings, as parties, rendered all proceedings subsequent to the filing thereof, including the judgment of the court, ineffective for want of authority to act, not only as to the absent parties but even as to those present.[30] In the instant case, it is not disputed that petitioner brought the suit for unlawful detainer in his name alone and for his own benefit to the exclusion of the heirs of Graciana as he even executed an affidavit of selfadjudication over the disputed property. It is clear therefore that petitioner cannot validly maintain the instant action considering that he does not recognize the co-ownership that necessarily flows from his theory of succession to the property of his father, Dominador. In the same vein, there is no merit in petitioners claim that he has the legal personality to file the present unlawful detainer suit because the ejectment of respondents would benefit not only him but also his alleged co-owners. However, petitioner forgets that he filed the instant case to acquire possession of the property and to recover damages. If granted, he alone will gain possession of the lot and benefit from the proceeds of the award of damages to the exclusion of the heirs of Graciana. Hence, petitioner cannot successfully capitalize on the alleged benefit to his co-owners. Incidentally, it should be pointed out that in default of the said heirs of Graciana, whom petitioner labeled as fictitious heirs, the State will inherit her share[31] and will thus be petitioners co-owner entitled to possession and enjoyment of the property. The present controversy should be differentiated from the cases where the Court upheld the right of a co-owner to
file a suit pursuant to Article 487 of the Civil Code. In Resuena v. Court of Appeals,[32] and Sering v. Plazo,[33] the co-owners who filed the ejectment case did not represent themselves as the exclusive owner of the property. In Celino v. Heirs of Alejo and Teresa Santiago, [34] the complaint for quieting of title was brought in behalf of the co-owners precisely to recover lots owned in common.[35] Similarly in Vencilao v. Camarenta,[36] the amended complaint specified that the plaintiff is one of the heirs who co-owns the controverted properties. In the foregoing cases, the plaintiff never disputed the existence of a co-ownership nor claimed to be the sole or exclusive owner of the litigated lot. A favorable decision therein would of course inure to the benefit not only of the plaintiff but to his co-owners as well. The instant case, however, presents an entirely different backdrop as petitioner vigorously asserted absolute and sole ownership of the questioned lot. In his complaint, petitioner made the following allegations, to wit: 3. The plaintiff was the only son (illegitimate) and sole heir of the late DOMINADOR ADLAWAN who died intestate on 28 May 1987 without any other descendant nor ascendant x x x. xxxx 5. Being the only child/descendant and, therefore, sole heir of the deceased Dominador Adlawan, the plaintiff became the absolute owner, and automatically took POSSESSION, of the aforementioned house and lot x x x. (Emphasis added)[37] Clearly, the said cases find no application here because petitioners action operates as a complete repudiation of the existence of co-ownership and not in representation or recognition thereof. Dismissal of the complaint is therefore proper. As noted by Former Supreme Court Associate Justice Edgrado L. Paras [i]t is understood, of course, that the action [under Article 487 of the Civil Code] is being instituted for all. Hence, if the coowner expressly states that he is bringing the case only for himself, the action should not be allowed to prosper.[38] Indeed, respondents not less than four decade actual physical possession of the questioned ancestral house and
lot deserves to be respected especially so that petitioner failed to show that he has the requisite personality and authority as co-owner to file the instant case. Justice dictates that respondents who are now in the twilight years of their life be granted possession of their ancestral property where their parents and siblings lived during their lifetime, and where they, will probably spend the remaining days of their life. WHEREFORE, the petition is DENIED. The September 23, 2003 Decision of the Court of Appeals in CA-G.R. SP No. 74921 which reinstated the February 12, 2002 Judgment of the Municipal Trial Court of Minglanilla, Metro Cebu, dismissing petitioners complaint in Civil Case No. 392, and its January 8, 2004 Resolution, are AFFIRMED. SO ORDERED.
TINING RESUENA, ALEJANDRA GARAY, LORNA RESUENA, ELEUTERIO RESUENA, EUTIQUIA ROSARIO and UNISIMA RESUENA, Petitioners, versus HON. COURT OF APPEALS, 11th DIVISION and JUANITO BORROMEO, SR., Respondents. 2005 Mar 28 2nd Division G.R. No. 128338 D E C I S I O N Tinga, J.: This is a Rule 45 Petition for Review on Certiorari of the Decision[1] of the Court of Appeals affirming that of the Regional Trial Court (RTC) of Cebu,[2] which in turn reversed that of the Metropolitan Trial Court (mtc) of Talisay, Cebu.[3] The facts are as follows: Private respondent, the late Juanito Borromeo Sr.[4] (hereinafter, respondent), is the co-owner and overseer of certain parcels of land located in Pooc, Talisay, Cebu, designated as Lots Nos. 2587 and 2592 of the TalisayManglanilla Estate. Respondent owns six-eighths (6/8) of Lot No. 2587 while the late spouses Inocencio Bascon and Basilisa Maneja (Spouses Bascon) own two-eights (2/8)
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thereof. On the other hand, Lot No. 2592 is owned in common by respondent and the heirs of one Nicolas Maneja. However, the proportion of their undivided shares was not determined a quo. Prior to the institution of the present action, petitioners Tining Resuena, Alejandra Garay, Lorna Resuena, Eleuterio Resuena, and Unisima Resuena resided in the upper portion of Lot No. 2587, allegedly under the acquiescence of the Spouses Bascon and their heir, Andres Bascon. On the other hand, petitioner Eutiquia Rosario occupied a portion of Lot No. 2592, allegedly with the permission of the heirs of Nicolas Maneja, one of the original co-owners of Lot No. 2587. Respondent claims that all petitioners have occupied portions of the subject property by virtue of his own liberality. Respondent developed portions of Lots Nos. 2587 and 2592 occupied by him into a resort known as the Borromeo Beach Resort. In his desire to expand and extend the facilities of the resort that he established on the subject properties, respondent demanded that petitioners vacate the property. Petitioners, however, refused to vacate their homes. On 16 February 1994, respondent filed a Complaint[5] for ejectment with the MTC against the petitioners. After a summary proceeding, the MTC, in a Decision[6] dated 10 October 1994, found that Lots Nos. 2587 and 2592 were owned in common by respondent with other persons. The MTC ruled that respondent did not have a preferential right of possession over the portions occupied by petitioners, since Lots Nos. 2587 and 2592 were not yet partitioned nor the disputed portions assigned to respondent as his determinate share. Thus, the MTC held that respondent had no right to evict petitioners therefrom. Consequently, respondents Complaint was dismissed. Notably, the MTC held that respondent and the spouses Bascon were the owners in common of Lot No. 2587 and their respective shares had not yet been determined by partition as proven by a testimony given by respondent in Civil Case No. R-14600, viz:
Q. And the participation there of Inocencio Bascon is 2/8 of the said parcel of land? A. Yes sir. Q. And until the present that parcel of land is undivided? A. It is not yet partitioned, but during the time of Basilisa Maneja we had already made some indications of the portions that we came to occupy. Q. That is the parcel of land where you have your beach resort? A. Yes, sir; and that was our agreement, verbally, that with respect to the portion of the land towards the sea-shore it will be my share and that portion of the land towards the upper part will be theirs.[7] On appeal, the RTC reversed the Decision of the MTC. It held that Article 487 of the Civil Code, which allows any one of the co-owners to bring an action in ejectment, may successfully be invoked by the respondent because, in a sense, a co-owner is the owner and possessor of the whole, and that the suit for ejectment is deemed to be instituted for the benefit of all co-owners.[8] The RTC also ruled that assuming petitioners were authorized to occupy a portion of the co-owned property, they could resume this occupation when the properties shall have been partitioned and allocated to the ones who gave them permission to reside therein. It thus held: WHEREFORE, judgment of the lower court is hereby reversed and the defendants are hereby directed to vacate the premises in question without prejudice to their going back to the land after partition shall have been effected by the coheirs and/or co-owners among themselves but to the specific portion or portions adjudicated to the person or persons who allegedly authorized them to occupy their portions by tolerance.[9]
The Court of Appeals affirmed the Decision of the RTC; hence, this petition which involves the following assignment of errors:[10] 1. That with grave abuse of discretion, amounting to excess of jurisdiction, the honorable eleventh division of the court of appeals erred in NOT APPLYING and/or in NOT DECLARING private respondent juanito borromeo estopped in filing this ejectment case against the herein six (6) petitioners. 2. That with grave abuse of discretion, the honorable eleventh division of the court of appeals erred in incorrectly applying the statute of frauds, considering that the verbal agreement entered into by and between spouses inocencio bascon and basilisa maneja on the one hand and juanito borromeo on the other more than twenty (20) years ago today, was already an EXECUTED CONTRACT. 3. That with grave abuse of discretion, amounting to excess of jurisdiction, the honorable eleventh division of the court of appeals erred in ignoring outright article 493 of the new civil code of the philippines, considering that the six (6) petitioners are only ASSIGNEES, pure and simple, of co-owners spouses ignacio bascon and basilisa maneja and/or andres bascon, the adopted son of the said spouses. 4. That granting arguendo that the herein six (6) petitioners have to be ejected, the eleventh division of the court of appeals erred in NOT remanding this case to the court of origin for the reception of evidence for damages, pursuant to and in accordance with art. 546, new civil code. The petition cannot prosper. At the outset it must be stated that petitioners ground their petition on respondents testimony in Civil Case No. R-14600 that he had agreed with co-owner, Basilisa Maneja, on the portions they each were to occupy in Lot No. 2587 prior to the partition of the property. However, respondents testimony and, consequently, the agreement
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alluded to therein pertains solely to Lot No. 2587which, admittedly, all of petitioners occupy, save for Eutiquia Rosario who occupies Lot No. 2592. No argument was presented in this petition as regards the latters claim. Having no basis to review Eutiquia Rosarios claim to be allowed to continue in her occupation of Lot No. 2592, this Court maintains the holding of the RTC on this matter, as affirmed by the Court of Appeals, that respondent has the right to eject petitioner Eutiquia Rosario from Lot No. 2592. With regard to the other five (5) petitioners, the Court notes that their first three assignments of errors are interrelated and built on each other. Petitioners allege that respondents testimony in Civil Case No. R-14600, expressing that the upper two-eighths (2/8) portion of Lot No. 2587 would be occupied by Basilisa Maneja, constituting as it does a waiver of said portion, has estopped respondent from claiming the portion. Basilisa Maneja and her husband allegedly relied on this agreement when the spouses assigned the upper portion of Lot No. 2587 to petitioners. Moreover, petitioners claim that their occupation of the upper portion of Lot No. 2587 had consummated the verbal agreement between respondent and Basilisa Maneja and brought agreement beyond the purview of the Statute of Frauds. A careful perusal of the foregoing issues reveals that petitioners assumed the following as proven facts: (1) respondent had indicated to Basilisa Maneja the portions they were to occupy in Lot No. 2587; and (2) the Spouses Bascon assigned to petitioners their portions of Lot No. 2587. By claiming these as the bases for their assignment of errors, petitioners in essence are raising questions of fact. [11] The issues raised by petitioners on the application of estoppel, statute of frauds, and the assignment of properties owned in common in their favor, while ostensibly raising questions of law, invite this Court to rule on questions of fact. This runs counter to the settled rule that only questions of law may be raised in a petition for review before the Court and the same must be distinctly set forth.[12]
It is not the function of this Court to weigh anew the evidence already passed upon by the Court of Appeals for such evidence is deemed final and conclusive and may not be reviewed on appeal. A departure from the general rule may be warranted, among others, where the findings of fact of the Court of Appeals are contrary to the findings and conclusions of the trial court, or when the same is unsupported by the evidence on record.[13] In the instant case, the RTC and the Court of Appeals rendered judgment merely on questions of law as applied to the facts as determined by the MTC. Consequently this Court must proceed on the same set of facts without assuming, as petitioners have done, the veracity of claims which have been considered, but not accepted as facts, by the courts below. Guided by the foregoing, this Court finds in this case that filtered of the muddle from petitioners assignment of errors, it is unmistakable that respondent has a right to eject the petitioners from Lot No. 2587. Article 487 of the Civil Code, which provides simply that [a]ny one of the co-owners may bring an action in ejectment, is a categorical and an unqualified authority in favor of respondent to evict petitioners from the portions of Lot. No. 2587. This provision is a departure from Palarca v. Baguisi,[14] which held that an action for ejectment must be brought by all the co-owners. Thus, a co-owner may bring an action to exercise and protect the rights of all. When the action is brought by one co-owner for the benefit of all, a favorable decision will benefit them; but an adverse decision cannot prejudice their rights.[15 Respondents action for ejectment against petitioners is deemed to be instituted for the benefit of all co-owners of the property[16] since petitioners were not able to prove that they are authorized to occupy the same. Petitioners lack of authority to occupy the properties, coupled with respondents right under Article 487, clearly settles respondents prerogative to eject petitioners from
Lot No. 2587. Time and again, this Court has ruled that persons who occupy the land of another at the latter's tolerance or permission, without any contract between them, are necessarily bound by an implied promise that they will vacate the same upon demand, failing in which a summary action for ejectment is the proper remedy against them.[17] Petitioners pose the strange claim that respondent had estopped himself from filing an ejectment case against petitioners by his aforequoted testimony in Civil Case No. R-14600. Such testimony is irrelevant to the case at bar, as it does nothing to strengthen the claim of petitioners that they had a right to occupy the properties. This testimony merely indicates that there might have been an agreement between the Spouses Bascon and Borromeo as to which of them would occupy what portion of Lot No. 2587. Yet this averment hardly establishes a definitive partition, or moreover, any right of petitioners to dwell in any portion of Lot No. 2587. Besides, [e]stoppel is effective only as between the parties thereto or their successors in interest; thus, only the spouses Bascon or their successors in interest may invoke such estoppel. A stranger to a transaction is neither bound by, nor in a position to take advantage of, an estoppel arising therefrom.[18] For the same reason, it is of no moment whether indeed, as petitioners claim, there was a verbal contract between Basilisa Maneja and Borromeo when the latter indicated the portions they each were to occupy in Lot No. 2587. Such verbal contract, assuming there was one, does not detract from the fact that the common ownership over Lot No. 2587 remained inchoate and undivided, thus casting doubt and rendering purely speculative any claim that the Spouses Bascon somehow had the capacity to assign or transmit determinate portions of the property to petitioners. Thus, in order that the petition may acquire any whiff of merit, petitioners are obliged to establish a legal basis for their continued occupancy of the properties. The mere tolerance of one of the co-owners, assuming that there
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was such, does not suffice to establish such right. Tolerance in itself does not bear any legal fruit, and it can easily be supplanted by a sudden change of heart on the part of the owner. Petitioners have not adduced any convincing evidence that they have somehow become successors-in-interest of the Spouses Bascon, or any of the owners of Lot No. 2587. Indeed, there is no writing presented to evidence any claim of ownership or right to occupancy to the subject properties. There is no lease contract that would vest on petitioners the right to stay on the property. As discussed by the Court of Appeals,[19] Article 1358 of the Civil Code provides that acts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property must appear in a public instrument. How then can this Court accept the claim of petitioners that they have a right to stay on the subject properties, absent any document which indubitably establishes such right? Assuming that there was any verbal agreement between petitioners and any of the owners of the subject lots, Article 1358 grants a coercive power to the parties by which they can reciprocally compel the documentation of the agreement.[20] Thus, the appellate court correctly appreciated the absence of any document or any occupancy right of petitioners as a negation of their claim that they were allowed by the Spouses Bascon to construct their houses thereon and to stay thereon until further notice. On this note, this Court will no longer belabor petitioners allegation that their occupation of Lot No. 2587 is justified pursuant to the alleged but unproven permission of the Spouses Bascon. All six (6) petitioners claim the right to be reimbursed necessary expenses for the cost of constructing their houses in accordance with Article 546 of the Civil Code. [21] It is well-settled that while the Article allows full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. Verily, persons
whose occupation of a realty is by sheer tolerance of its owners are not possessors in good faith.[22] The lower courts have made a common factual finding that petitioners are occupying portions of Lots No. 2587 and 2592 by mere tolerance. Thus, petitioners have no right to get reimbursed for the expenses they incurred in erecting their houses thereon. WHEREFORE, premises considered, the Petition is DENIED and the Decision of the Court of Appeals AFFIRMED. Costs against petitioners. SO ORDERED.
These are the main questions raised in this petition for review of the Decision 1 in CA G.R. SP No. 24846 promulgated on July 16, 1991 by the Court of Appeals 2 denying petitioners' plea for annulment of a final and executory judgment rendered by the Regional Trial Court of Dagupan City, Branch 40, in Civil Case No. D-7240, and the Resolution 3 promulgated on November 21, 1991 by the appellate court denying their motion for on reconsideration. The Facts Petitioners Marcelino Arcelona, Tomasa Arcelona-Chiang and Ruth Arcelona are natural-born Filipinos who are now naturalized Americans residing in California, U.S.A. Petitioner Ruth Arcelona is the surviving spouse and legal heir of the deceased Benedicto Arcelona, brother of Marcelino and Tomasa. Together with their three sisters Pacita Arcelona-Olanday, Maria Arcelona-Arellano and Natividad Arcelona-Cruz (hereinafter collectively referred to as Olanday, et al.) petitioners are co-owners proindiviso of a fishpond which they inherited from their deceased parents. 4 The six Arcelonas (two brothers and four sisters) are named as co-owners in Transfer Certificate of Title No. 34341 which evidences ownership over the fishpond. On March 4, 1978, a contract of lease over the fishpond was executed between Cipriano Tandoc and Olanday, et al. The lease contract was for a period of three (3) years but was renewed up to February 2, 1984 5 Private Respondent Moises Farnacio was appointed in turn by Tandoc as caretaker-tenant of the same fishpond, effective on the date the contract of lease was executed. After the termination of the lease contract, the lessee (Tandoc) surrendered possession of the leased premises to the lessors, Olanday, et al. Three days thereafter, on February 7, 1984, Private Respondent Farnacio instituted Civil Case D-7240 for "peaceful possession, maintenance of security of tenure plus damages, with motion for the issuance of an interlocutory order" against Olanday, et al., before
MARCELINO ARCELONA, TOMASA ARCELONA-CHIANG and RUTH ARCELONA, represented by their attorney-in-fact, ERLINDA PILE, petitioners, vs. COURT OF APPEALS, REGIONAL TRIAL COURT OF DAGUPAN CITY, Branch XL, and MOISES FARNACIO, respondents. 1997 Oct 2 3rd Division G.R. No. 102900 D E C I S I O N PANGANIBAN, J: What are the remedies and the grounds therefor to invalidate a final and executory judgment? May extraneous matters, not found in the records of the original case, be used to void such final judgment? Procedurally, may an independent action for annulment of a decision filed in the Court of Appeals prosper in the face of a claim that the remedy of intervention could have been availed of in the regional trial court during the original proceedings? Are all the co-owners pro-indiviso of a real property indispensable parties? Does the non-inclusion of some of such co-owners in a suit involving tenancy over said property constitute sufficient ground to nullify the final decision rendered in such case? The Case
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Respondent Regional Trial Court of Dagupan City, Branch 40. The case was intended to maintain private respondent as tenant of the fishpond. 6 On October 31, 1984, the trial court rendered a decision in favor of private respondent, the dispositive portion of which reads: 7 "WHEREFORE, in the light of the foregoing considerations, this Court hereby renders judgment as follows; to wit: 1. Declaring and recognizing Moises Farnacio as tenantcaretaker over the fishpond in question located at Lomboy District, Dagupan City; 2. Ordering the defendants to maintain plaintiff in the peaceful possession and cultivation of said fishpond, with all the rights accorded and obligations imposed upon him by law; 3. Ordering the Branch Clerk of Court to withdraw and deliver to the plaintiff all the amounts deposited with this Court; and 4. All others claims of the parties are hereby denied for lack of merit." Olanday, et al. elevated the decision to the then Intermediate Appellate Court (IAC) 8 which affirmed with slight modification the decision of the trial court on May 31, 1985. On appeal, this Court 9 sustained the IAC decision in G.R. No. 71217. On May 25, 1991, after remand of the case to the court of origin, private respondent was placed in possession of the entire property covered by TCT 34341. Petitioners then filed with Respondent Court of Appeals a petition for annulment of the aforesaid judgment against private respondent and the implementing sheriff. 10 The case was docketed as CA GR SP No. 24846. On May 8, 1991, Respondent Court issued a resolution directing petitioners "to implead as party defendant the Regional Trial Court of Dagupan City, Branch 50, Dagupan City." 11
Respondent Court promulgated in due course the assailed Decision and Resolution. Dissatisfied, petitioners lodged this petition for review before us on May 10, 1992. On August 24, 1992, due course was granted to the petition, and the parties filed their respective memoranda. The Issues In their Memorandum dated November 7, 1992, petitioners allege that Respondent Court of Appeals has committed the following errors: 12 "I. The Respondent Court of Appeals erred in ruling that the sole and only ground for annulment of judgment is extrinsic fraud. II. The Respondent Court of Appeals erred when it failed to consider that lack of due process and jurisdiction over the persons of the petitioners are also valid grounds for annulment of judgment. III. In annulment of judgment the grounds should be based solely on the records of the case. It is then an error for the Respondent Court of Appeals to consider matters extraneous to the records of the case. IV. The Respondent Court of Appeals erred in ruling that petitioners should have intervened in the proceedings for issuance of writ of execution before the lower court. V. The Respondent Court of Appeals erred in ruling that the petitioners are estopped or are guilty of laches in questioning the decision of the lower court." The Court believes that these five assigned errors may be condensed into three issues: (1) May a final judgment be annulled on the ground of lack of jurisdiction (over the subject matter and/or over the person of indispensable parties) and denial of due process, aside from extrinsic fraud?
(2) May extraneous matters, not found in the records of the original case, be used in voiding or defending the validity of such final judgment? (3) Procedurally, will an independent action for annulment of the decision of the regional trial court (which was affirmed both by the Court of Appeals and the Supreme Court) filed before the Court of Appeals prosper, or is intervention before the court of origin the only remedy? The Court's Ruling The petition is meritorious. First Issue: Grounds for Annulment of Final Judgment Petitioners contend that Respondent Court of Appeals erred in decreeing "the all-sweeping and categorical pronouncement that the sole and only ground for annulment of judgment is extrinsic fraud," and in thereby ignoring various Supreme Court rulings that a final judgment may also be annulled for "a) lack of jurisdiction over the subject matter; b) lack of jurisdiction over the persons of necessary or indispensable parties; and c) lack of due process." 13 Petitioners argue that, being co-owners of the subject property, they are "indispensable parties." 14 Inasmuch as they were not impleaded in Civil Case D7240, "the questioned judgment of the lower court is void insofar as the petitioners are concerned for want of jurisdiction over their persons and [for] lack of due process." 15 Petitioners "do not see any reason why a person who was not made a party at all could not assail the same proceedings involving his property and affecting his rights and interests." 16 Petitioners further maintain that since "the case involves the personal status of the private respondent, or relates to, or the subject of which is property within the Philippines, then the petitioners as non-residents" are entitled to extraterritorial service, 17 which is a "due process requirement." As they were never served with summons, to "bar them [from] questioning the proceedings of the lower court will be compounding injustice . . . If a party to a case can assail the proceedings for defective service of
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summons," the same right should be afforded to a person who was not made a party at all. 18 Public respondent disposed of petitioners' above contention in this wise: 19 "First. Annulment of judgment, as the Supreme Court had occasion to rule, rests on a single ground: extrinsic fraud (Canlas vs. Court of Appeals, 170 [sic] SCRA 160, 170). Islamic Da' Wah Council of the Phils. vs. Court of Appeals, 178, 186, citing Anuran vs. Aquino, 38 Phil. 29, emphatically announced that there can be no question as to the right of any person adversely affected by a judgment to maintain an action to enjoin its enforcement and to have it declared a nullity on the ground of fraud and collusion practiced in obtaining the judgment when such fraud is extrinsic or collateral to the matters involved in the issues raised at the trial which resulted in such judgment. xxx xxx xxx
We hold that the Court of Appeals erred in limiting the ground(s) for annulment of judgment to only one, namely, extrinsic fraud. While it is true that in the cited cases of Canlas vs. CA 20 and Islamic Da' Wah Council of the Philippines. vs. Court of Appeals, 21 this Court said that a judgment "may be annulled on the ground of extrinsic or collateral fraud," 22 we should hasten to add that in Macabingkil vs. People's Homesite and Housing Corporation, 23 where the above ruling on annulment of judgment was based, we held that there are really three ways by which a final judgment may be attacked: 24 "Under existing rules, there are three (3) ways by which a final and executory judgment may be set aside. The first is by petition for relief from judgment under Rule 38 of the Revised Rules of Court, when judgment has been taken against the party through fraud, accident, mistake or excusable negligence, in which case the petition must be filed within sixty (60) days after the petitioner learns of the judgment, but not more than six (6) months after such judgment was entered. The second is by direct action to annul and enjoin the enforcement of the judgment. This remedy presupposes that the challenged judgment is not void upon its face, but is entirely regular in form, and the alleged defect is one which is not apparent upon its face or from the recitals contained in the judgment. [fn: Abbain v. Chua, 22 SCRA 798; Cadano v. Cadano, 49 SCRA 33; Anuran v. Aquino, 38 Phil. 329] As explained in Banco Espaol-Filipino v. Palanca, [fn: 37 Phil. 291, 949] 'under accepted principles of law and practice, long recognized in American courts, the proper remedy in such case, after the time for appeal or review has passed, is for the aggrieved party to bring an action enjoining the judgment, if not already carried into effect; or if the property has already been disposed of, he may institute suit to recover it.' The third is either a direct action, as certiorari, or by a collateral attack against the challenged judgment (which is) is void upon its face, or that the nullity of the judgment is apparent by virtue of its own recitals. As aptly explained by Justice Malcolm in his dissent in Banco Espaol-Filipino v. Palanca, supra, 'A judgment which is void upon its face, and which requires only an inspection of the judgment roll to demonstrate its want of vitality is a dead limb upon the
judicial tree, which should be lopped off, if the power so to do exists.' Since the aforementioned decision in Civil Case No. Q5866 is not void upon its face, it may only be annulled by direct action on the ground of fraud. It is only extrinsic or collateral fraud, as distinguished from intrinsic fraud, however, that can serve as a basis for the annulment of judgment. [Aring v. Original, 6 SCRA 1021, 1025; Velasco v. Velasco, 2 SCRA 736] Fraud has been regarded as extrinsic or collateral, within the meaning of the rule, 'where it is one the effect of which prevents a party from having a trial, or real contest, or from presenting all of his case to the court, or where it operates upon matters pertaining, not to the judgment itself, but to the manner in which it was procured so that there is not a fair submission of the controversy.'[46 Am. Jur. 913] . . ." It is clear then that to set aside a final and executory judgment, there are three remedies available to a litigant: first, a petition for relief from judgment under Rule 38 of the Rules of Court 25 on grounds of fraud, accident, mistake and excusable negligence filed within sixty (60) days from the time petitioner learns of the judgment but not more than six (6) months from the entry thereof; second, a direct action to annul the judgment on the ground of extrinsic fraud; and third a direct action for certiorari or collateral attack to annul a judgment that is void upon its face or void by virtue of its own recitals. Thus, Macabingkil did not preclude the setting aside of a decision that is patently void where mere inspection of the judgment is enough to demonstrate its nullity on grounds of want of jurisdiction or non-compliance with due process of law. This doctrine is recognized in other cases: 26 ". . . There is no question that a final judgment may be annulled. There are, however, certain requisites which must be established before a judgment can be the subject of an action for annulment 'Under the present procedure, aside from the reliefs provided in these two sections (Secs. 1 & 2, Rule 38), there is no other means whereby the defeated party may procure final and executory judgment to be set aside with a view to the renewal of the litigation,
Clearly, there is nothing in the petition that extrinsic fraud, as Macabingkil defines it, indeed vitiated the proceedings during the trial of Civil Case No. D-7240. The essence of the instant petition is worded by the petitioners as follows: 'The common property involved in this case is covered by a Torrens Title, specifically mentioning the co-owners thereof. To bind the entire property and the owners thereof, all the registered owners must be impleaded. The private respondent ONLY IMPLEADED the three co-owners, excluding the petitioners herein. For the petitioners to be bound by the questioned decision, such would really be a derogation of their constitutional right to due process. The questioned decision, too, suffers the fatal defect of utter want of jurisdiction. Accordingly, since the petition for annulment of judgment is not based on the ground of extrinsic fraud, the petition suffers from a basic and fundamental infirmity that deprives petitioners of a valid cause of action against respondents herein "
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unless (a) the judgment is void for want of jurisdiction or for lack of due process of law, or (b) it has been obtained by fraud.' (I Moran's Rules of Court 1950 Ed., p. 697, citing Anuran v. Aquino, 38 Phil. 29; Banco Espaol-Filipino v. Palanca, 37 Phil. 921). Reason of public policy which favors the stability of judicial decisions are (sic) mute in the presence of fraud which the law abhors (Garchitorena vs. Sotelo, 74 Phil. 25)." On the one hand, extrinsic fraud is the ground to annul a voidable final judgment; the declaration of nullity of a patently void final judgment, on the other, is based on grounds other than extrinsic fraud. To say, then, that petitioners can avail themselves only of the ground of extrinsic fraud and no other is to fail to appreciate the true meaning and ramifications of annulment/nullity. Jurisdiction is conferred by law. Its exercise must strictly comply with the legal requisites; otherwise, a challenge on the ground of lack of jurisdiction may be brought up anytime. Such jurisdiction normally refers to jurisdiction over the subject. As an example, in a case involving the issuance of a new owner's duplicate certificate of title, the original of which was lost, stolen or destroyed, the court must strictly comply with the requisites of Section 109 of P.D. 1529; otherwise, its jurisdiction may be attacked anytime. Thus, we ruled in New Durawood Co. Inc. vs. Court of Appeals: 27 "In Demetriou vs. Court of Appeals, et al., [238 SCRA 158, at 162 (November 14, 1994)] this Court ruled: 'In Serra Serra v. Court of Appeals (195 SCRA 482 [1991]), on facts analogous to those involved in this case, this Court already held that if a certificate of title has not been lost but is in fact in the possession of another person, the reconstituted title is void and the court rendering the decision has not acquired jurisdiction. Consequently the decision may be attacked any time.' In the instant case, the owner's duplicate certificates of title were in the possession of Dy Quim Pong, the petitioner's chairman of the board and whose family controls the petitioner corporation. Since said certificates
were not in fact 'lost or destroyed,' there was no necessity for the petition filed in the trial court for the 'Issuance of New Owner's Duplicate Certificates of Title . . .,' In fact, the said court never acquired jurisdiction to order the issuance of new certificates. Hence, the newly issued duplicates are themselves null and void. It is obvious that this lapse happened because private respondents and respondent judge failed to follow the procedure set forth in P.D. No. 1529 which, as already stated, governs the issuance of new owner's duplicate certificates of title. Section 109 of the said law provides, inter alia, that 'due notice under oath' of the loss or theft of the owner's duplicate certificate 'shall be sent by the owner or by someone in his behalf to the Register of Deeds . . .' (emphasis supplied). In this case, while an affidavit of loss was attached to the petition in the lower court, no such notice was sent to the Register of Deeds. Private respondents tried to convince the Court that by their failure to locate Francis Dytiongsee, they had no other recourse but to file a petition for reconstitution. Sec. 107 of the P.D. 1529, however, states that the remedy, in case of the refusal or failure of the holder in this case, the petitioner to surrender the owner's duplicate certificate of title, is a 'petition in court to compel surrender of the same to the Register of Deeds,' and not a petition for reconstitution " Ineluctably, a judgment rendered without jurisdiction over the subject matter is void. As we elucidated in Leonor vs. CA: 28 "Clearly and unequivocally, the summary procedure under Rule 108, and for that matter under Art. 412 of the Civil Code, cannot be used by Mauricio to change his and Virginia's civil status from married to single and of their three children from legitimate to illegitimate. Neither does the trial court, under said Rule, have any jurisdiction to declare their marriage null and void and as a result thereof, to order the local civil registrar to cancel the marriage entry in the civil registry. Further, the respondent
trial judge gravely and seriously abused his discretion in unceremoniously expanding his very limited jurisdiction under such rule to hear evidence on such a controversial matter as nullity of a marriage under the Civil Code and/or Family Code, a process that is proper only in ordinary adversarial proceedings under the Rules. Jurisdiction over the Persons of Indispensable Parties True, the above dispositions refer to jurisdiction over the subject matter. Basic considerations of due process, however, impel a similar holding in cases involving jurisdiction over the persons of indispensable parties which a court must acquire before it can validly pronounce judgments personal to said defendants. Courts acquire jurisdiction over a party plaintiff upon the filing of the complaint. On the other hand, jurisdiction over the person of a party defendant is assured upon the service of summons in the manner required by law or otherwise by his voluntary appearance. As a rule, if a defendant has not been summoned, the court acquires no jurisdiction over his person, and a personal judgment rendered against such defendant is null and void. 29 A decision that is null and void for want of jurisdiction on the part of the trial court is not a decision in the contemplation of law and, hence, it can never become final and executory. 30 Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest without whom there can be no final determination of an action. As such, they must be joined either as plaintiffs or as defendants. The general rule with reference to the making of parties in a civil action requires, of course, the joinder of all necessary parties where possible, and the joinder of all indispensable parties under any and all conditions, their presence being a sine qua non for the exercise of judicial power. 31 It is precisely "when an indispensable party is not before the court (that) the action should be dismissed." 32 The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present. 33
34
Petitioners are co-owners of a fishpond. Private respondent does not deny this fact, and the Court of Appeals did not make any contrary finding. The fishpond is undivided; it is impossible to pinpoint which specific portion of the property is owned by Olanday, et al. and which portion belongs to petitioners. Thus, it is not possible to show over which portion the tenancy relation of private respondent has been established and ruled upon in Civil Case D-7240. Indeed, petitioners should have been properly impleaded as indispensable parties. Servicewide Specialists, Incorporated vs. Court of Appeals 34 held that no final determination of a case could be made if an indispensable party is not impleaded: ". . . An indispensable party is one whose interest will be affected by the court's action in the litigation, and without whom no final determination of the case can be had. The party's interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties that his legal presence as a party to the proceeding is an absolute necessity. In his absence there cannot be a resolution of the dispute of the parties before the court which is effective, complete, or equitable " Formerly, Article 487 of the old Civil Code provided that "any one of the co-owners may bring an action in ejectment." It was subsequently-held that a co-owner could not maintain an action in ejectment without joining all the other co-owners. Former Chief Justice Moran, an eminent authority on remedial law, explains: 35 ". . . As held by the Supreme Court, were the courts to permit an action in ejectment to be maintained by a person having merely an undivided interest in any given tract of land, a judgment in favor of the defendants would not be conclusive as against the other co-owners not parties to the suit, and thus the defendant in possession of the property might be harassed by as many succeeding actions of ejectment, as there might be co-owners of the title asserted against him. The purpose of this provision was to prevent multiplicity of suits by requiring the person asserting a right against the defendant to include with him, either as co-plaintiffs or as co-defendants, all persons
standing in the same position, so that the whole matter in dispute may be determined once and for all in one litigation." Contrariwise, it is logical that a tenant, in an action to establish his status as such, must implead all the proindiviso co-owners; in failing to do so, there can be no final determination of the action. In other words, a tenant who fails to implead all the co-owners cannot establish with finality his tenancy over the entire co-owned land. Co-owners in an action for the security of tenure of a tenant are encompassed within the definition of indispensable parties; thus, all of them must be impleaded. As defined: 36 "An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made, in his absence, without injuring or affecting that interest, a party who has not only an interest in the subject matter of the controversy, but also has an interest of such nature that a final decree cannot be made without affecting his interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. It has also been considered that an indispensable party is a person in whose absence there cannot be a determination between the parties already before the court which is effective, complete, or equitable. Further, an indispensable party is one who must be included in an action before it may properly go forward. A person is not an indispensable party, however, if his interest in the controversy or subject matter is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which does complete justice between them. Also, a person is not an indispensable party if his presence would merely permit complete relief between him and those already parties to the action, or if he has no interest in the subject matter of the action. It is not a sufficient reason to declare a person to be an indispensable party that his presence will avoid multiple litigation."
Clearly, the decision in Civil Case D-7240 cannot bind petitioners and cannot adjudicate the entire co-owned property, not even that portion belonging to Olanday et al., ownership of the property being still pro-indiviso. Obviously, the failure to implead petitioners barred the lower court from making a final adjudication. Without the presence of indispensable parties to a suit or proceeding, a judgment therein cannot attain finality. 37 Ergo, res inter alios judicatae nullum aliis praejudicarium faciunt. 38 Thus, the Court, through former Chief Justice Marcelo B. Fernan, held that a person who was not impleaded in the complaint cannot be bound by the decision rendered therein, for no man shall be affected by a proceeding in which he is a stranger. 39 Admittedly, in this case, the want of jurisdiction of the trial court in rendering its decision in Civil Case No. D-7240 is not patent on the face of said judgment. However, there were glaring documentary and testimonial pieces of evidence referred to by the trial court in its decision which should have prompted it to inquire further whether there were other indispensable parties who were not impleaded. These facts and circumstances should have forewarned the trial court that it had not acquired jurisdiction over a number of indispensable parties. In American jurisprudence, the nullity of a decision arising from lack of jurisdiction may be determined from the record of the case, not necessarily from the face of the judgment only. 40 We believe that this rule should be applied to this case, considering that in the assailed trial court's decision, referrals were made to crucial evidence which if scrutinized would readily reveal that there were indispensable parties omitted. First, the decision referred to the subject property "as Lot No. 3312 of the Cadastral Survey.'' 41 This lot was particularly described in private respondent's Complaint dated February 6, 1984 filed in Civil Case D-7240. 42 Obviously such description was copied by private respondent from the transfer certificate of title over the subject fishpond issued on August 12, 1975 naming all the
35
co-owners, including the herein petitioners and the fact of their foreign residences, thus: 43 "IT IS HEREBY CERTIFIED that certain land situated in the City of Dagupan, formerly in the Province of Pangasinan bounded and described as follows: A parcel of land (Lot 3312 of the Cadastral Survey of Dagupan), situated in the City of Dagupan. . . is registered in accordance with the provisions of the Land Registration Act in the name of PACITA ARCELONA, married to Miguel Ulanday; TOMASA ARCELONA, married to Tung Ming Chiang; MARCELINO V. ARCELONA, married to Soledad Tiongco; MARIA V. ARCELONA, married to Oreste Arellano; BENEDICTO V. ARCELONA, married to Ruth Suget; and NATIVIDAD ARCELONA, married to Agrimero Cruz; all of legal age, Filipinos, the second and fifth named residents of Los Angeles, California, U.S.A., third & fourth of Manila; first of Villasis, Pangasinan & the last named of Lingayen, Pangasinan as owner thereof in fee simple, subject to such of the incumbrances mentioned in Section 39 of said Act as may be subsisting, and to xxx xxx xxx
alleged that petitioners knew of the lessee as revealed by the testimony of Pacita Olanday, one of the defendants in Civil Case No. D-7240 and a sister of petitioners. (TSN, pp. 15-16, hearing of October 2, 1984, Civil Case No. D-7240)." That being so, why did private respondent fail to include petitioners as defendants in the case below? It should be noted that the lease contract was between Cipriano Tandoc and Olanday, et al. Private respondent, a caretaker-tenant of Tandoc, knew or should have known that there were co-owners other than Olanday, et al. And even conceding arguendo that petitioners had authorized Olanday, et al. to enter into a lease contract with Tandoc, this fact did not authorize the latter to represent petitioner in the civil case he brought. Under Rule 9, Section 9 of the Rules of Court, the pleader is required to set forth the names, if known to him, of persons who ought to be parties, if complete relief is to be accorded to those who are already parties but who are not joined; and to state why they have been omitted. Surely, he brought suit to establish his status as a tenant. It is thus his responsibility to state the names of all the persons against whom he wants to establish his status as tenant. Third, both the private respondent and the trial court knew of the obvious omission of petitioners as party defendants. Telling is the fact that, by reciting part of the transcript of stenographic notes, private respondent himself provided clear evidence in his memorandum that he knew of the existence of other co-owners who were not impleaded in his case against Olanday et al.: 44 "As admitted by Pacita Olanday, one of the defendants in Civil Case No. D-7240, the petitioners know of the lease with Cipriano Tandoc; they were authorized to lease the shares of the petitioners. Here is the testimony of Pacita Olanday: ATTY. VINLUAN: Q. You made mentioned that you were authorized by your brothers and sister who are (sic) residing in the United States to enter into a contract. Did these brothers and sister of yours make any special power of attorney authorizing you to that effect?
xxx
xxx
xxx
A. I talked with my brothers when they 'balik-bayan', they said I will make an agreement. (tsn. October 2, 1984 pp. 15 and 16 CV# D-7240)." He also knew that in executing the lease, Pacita Olanday represented only her sisters (Maria and Natividad) who were residing in the Philippines. Definitely, at the time of the execution of the contract, she had no brother residing in the Philippines because her only brothers, Marcelino and Benedicto Arcelona, (the latter now deceased and represented in this case by Petitioner Ruth Arcelona) were living in California. This fact can be deduced from the recitals of the RTC decision: 45 "It is undisputed in the records that the defendants (referring to Olanday, et al.) are co-owners and civil law lessors of a fishpond otherwise known as Lot No. 3312 of the Cadastral Survey of Dagupan City; that as owners, they entered into a Contract of Lease (Exh. '1') with one Cipriano Tandoc dated March 4, 1978 for a term of three (3) years from February 2, 1982, which contract was renewed for another two (2) years up to February 2, 1984. On the 31st of January, 1984, Exhibit '3', an 'Affidavit of Surrender of Rights and Possession of Lessee over a Fishpond' was executed between Cipriano Tandoc and Pacita Olanday who signed for herself and in behalf of her two (2) sisters. Plaintiff Moises Farnacio was however, instituted as caretaker-tenant over the same fishpond by Cipriano Tandoc on the date of the Contract of Lease was entered into between the owners-lessors and Cipriano Tandoc. The private agreement (Exh. 'D') signed by Cipriano Tandoc and Moises Farnacio is, however, assailed in a criminal case for falsification in the Fiscal's Office." (Underscoring supplied). In fact, only these co-owners who are residing in the Philippines were joined as defendants in Civil Case D-7240. But the mention of Pacita's relatives who were residing abroad should have made the trial court aware of the existence of indispensable parties who were not yet impleaded.
Entered at the City of Dagupan Philippines, on the 12th day of August in the year nineteen hundred and seventyfive at 4:00 pm." (Emphasis supplied). Considering that private respondent was suing to establish his status as a tenant over the subject fishpond, the responsibility for impleading all the indispensable parties undeniably rested on him as provided under Rule 3 of the Rules of Court. Section 2 of Rule 3 requires that "every action must be prosecuted and defended in the name of the real party in interest. All persons having an interest in the subject of the action and in obtaining the relief demanded shall be joined as plaintiffs." Further, Section 7 of the same rule states that "(p)arties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants." Second, Respondent Court of Appeals ruled that private respondent "in his motion to dismiss (before said Court)
36
Despite this knowledge of the apparent defect in the complaint and in its jurisdiction, the trial court did not take the initiative to implead petitioners as defendants or to order private respondent to do so, contrary to the clear mandate of Rule 3, Sec. 11 of the Rules of Court 46 which provides: Sec. 11. Misjoinder and non-joinder of parties. Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately. The foregoing testimony on the existence of other coowners was a clear signal that indispensable parties had not yet been impleaded. Indeed, this knowledge should have put the private respondent and the trial court on guard. The burden to implead or to order the impleading of indispensable parties is placed on private respondent and on the trial court, respectively. Since no evidence was presented to prove that petitioners were aware of the civil case filed against Olanday et al., they cannot be faulted for not intervening therein. In sum, we hold that the nullity of a judgment grounded on lack of jurisdiction may be shown not only by what patently appears on the face of such decision but also by documentary and testimonial evidence found in the records of the case and upon which such judgment is based. Before ending our discussion on the first issue, we must stress that the then Intermediate Appellate Court and this Court, in affirming the RTC decision in Civil Case No. D7240 which we here nullify, had not been given the occasion to rule on the issue of the trial court's jurisdiction over the persons of indispensable parties; verily, this question had not been raised before the two appellate courts. The review of civil cases by appellate courts is confined only to the issues raised by the parties. Hence, appellate courts do not have the privilege or the opportunity afforded the trial courts to consider matters
beyond the specifically contested issues, e.g., jurisdiction over indispensable parties, as in this case. Such lack of jurisdiction could not have been known by the appellate courts, including this Court, as it was not patent from the documents or submissions filed before them. The issue raised before the then Intermediate Appellate Court and this Court was formulated in this wise: "(t)he validity of private respondent's claim that he is a tenant of the petitioners' fishpond, with security of tenure as such assured under the law, is the basic question presented in this appeal." 47 We underscore the fact that the issue of whether all the indispensable parties had been validly impleaded, if at all, had not been raised at that time. In any event, whether the indispensable parties were actually impleaded and jurisdiction over them was acquired was a factual question for the trial court to determine. Consistent with the basic doctrine that factual findings of lower courts are binding on appellate courts unless covered by the recognized exceptions, 48 appellate courts must be able to rely on the implied affirmation of the trial court that jurisdiction had been acquired over indispensable parties, especially when this was not raised as an issue on appeal. The responsibility for impleading indispensable parties for the exhaustive trial of a case cannot rest on this forum or on the then Intermediate Appellate Court. Indeed, the Decision of this Court affirming the said trial court's decision is captioned only as "Pacita A. Olanday, Maria A. Arellano and Natividad A. Cruz, petitioners, vs. Intermediate Appellate Court and Moises Farnacio, respondents", clearly indicating that petitioners herein had been omitted as indispensable parties in the proceedings before the trial court and before the appellate tribunals. Substantial justice requires that this error be now rectified.
barring them from asserting lack of jurisdiction over their persons These ''extraneous matters" are stated by the Respondent Court in this wise: ". . . True, indeed, that petitioners were not original parties to the action and that the decision embraces half of the property in dispute belonging to petitioners as co-owners thereof. But they cannot now complain they were denied due process. It will be recalled that the contract of lease was entered with one Cipriano Tandoc on March 4, 1978 for a term of three years, which contract was renewed for another two years up to February 2, 1984. During all the years of the existence of the lease contract, it would be incredulous for petitioners to assert that they never knew of such lease agreement from their three sisters, the defendants herein. Petitioners raised no overt protest against the lease contract executed by their sisters with Cipriano Tandoc in 1978 and renewed in 1982. Petitioners took no direct action to promptly disavow or disaffirm the action taken by their sisters to lease the entire property to Tandoc. It is likewise unbelievable that during all the years that the subject property (fishpond) is under litigation in Civil Case No. D-7240 from 1984 to 1991, petitioners were not aware that their property is subject of the controversy. By their continued silence, they have permitted the acts of their sisters in leasing the property and they cannot now be heard, after a prolonged period of time, to denounce such acts as done without their knowledge and consent. The rule of acquiescence by silence has estopped petitioners to deny the reality of the state of things which they made to appear to exist and upon which others have been led to reply. Parties must take the consequences of the position they assume. Sound ethics require that the apparent in its effects and consequences should be as if it were real, and the law properly so regards. (Metro Manila Transit Corporation vs. Morales, 173 SCRA 629, 633). In Santiago Syjuco, Inc. vs. Castro, 175 SCRA 171, 192, it was held, inter alia: xxx xxx xxx
Second Issue: Estoppel and Laches Apart from holding that there was only one ground to annul a judgment, namely, extrinsic fraud, the appellate court using extraneous evidence also found that estoppel and laches had set in against petitioners, thereby
37
. . . Likewise, in Criminal Case No. 16866 for falsification against respondent Farnacio before Branch 3 of the Municipal Trial Court of Dagupan City, witness Juan Bernal testified that the petitioners herein Tomasa Arcelona, Marcelino Arcelona and Ben Arcelona authorized their sisters Natividad Cruz, Corazon Arcelona, Pacita Olanday to lease the fishpond to Cipriano Tandoc. (TSN, pp. 5-6, hearing of August 10, 1987 in Criminal Case No. 16866)." 49 Petitioners balk at these pronouncements, arguing that in annulment of judgments, "the grounds thereof must be based solely on the records of the case." They contend that "to permit the court's record to be contradicted or varied by evidence dehors would render such records of no avail." Petitioners contend that Respondent Court of Appeals erred in taking into account "the proceedings in Criminal Case No. 16866 to show alleged knowledge of the petitioners herein of the lease of the property to Cipriano Tandoc." 50 Petitioners submit that the bone of contention in this case is "not knowledge of the petitioners of the Lease Contract executed by Pacita Olanday et al. and Cipriano Tandoc, but whether the petitioners knew of the case filed by private respondent against Pacita Olanday et al. involving their common property." Petitioners stress that Private Respondent Farnacio is "a total stranger" and has absolutely no privity of interest with them because it was Tandoc, not Farnacio, who entered into a lease contract with Olanday, et al. 51 Petitioners deny any concealment or deception on their part that would constitute estoppel. They contend that in the transfer certificate of title, their names were specifically mentioned as co-owners of the property on which the private respondent sought to be installed in physical possession as tenant." 52 They aver that Respondent Court of Appeals' finding that they had knowledge of the lease contract "is based on presumption not on clear and convincing evidence." Assuming, according to petitioners, that they can be held in estoppel, it can only be as against Cipriano Tandoc, not private
respondent who "was never a party to the lease contract." 53 Since the judgment is void "insofar as the petitioners are concerned for lack of jurisdiction [over] their persons and for want of due process," and since they "were never given the opportunity to institute any action to protect their interest," petitioners contend that to bar them now by laches and estoppel "will create an unfair and unjust situation." For as petitioners candidly state, they "do not question the pronouncement that private respondent is the tenant of Pacita Olanday et al."; however, they submit that the issue in this case is whether private respondent "is also the tenant of herein petitioners entitled to be placed in physical possession and cultivation of their undetermined share in the property without [petitioners] being made parties in the case."54 Private respondent counters that "Pacita Olanday . . . testified that she was authorized to lease the share of . . . petitioners." According to private respondent, while petitioners were in the Philippines, they were informed of the appointment of private respondent as caretaker-tenant of the entire fishpond, and they did not object to such appointment. 55 Further, private respondent contends that petitioners failed to intervene in the case before the writ of execution was granted on "May 5, 1991" despite the "appearance . . . of their counsel, Atty. Marina Cruz, when the motion for issuance of said writ was heard" Private respondent adds that he was "impliedly recognized" as a tenant when petitioners "received their corresponding shares [i]n the lease rental of the property from the private respondent, through Olanday, et al. and their counsel, Atty. Marina Cruz." 56 As correctly put by petitioners, we hold that Respondent Court of Appeals, in deciding the petition to declare the judgment void, cannot consider extraneous matters to vary what the records bear. In other words, the Court of Appeals cannot annul or declare null the assailed decision with such extraneous matters. The validity or nullity of the said decision must stand or fall on its own face and the evidence on record.
In an action to declare a judgment void because of lack of jurisdiction over the parties or subject matter, only evidence found in the records of the case can justify the annulment of the said judgment. Contrariwise, the nullity of the judgment due to lack of jurisdiction may be proved at most by the evidence on record but never by extraneous evidence. Sen. Vicente J. Francisco aptly explains this in his treatise on the Rules of Court: 57 "The validity of a final judgment may be attacked on the ground that the judgment or order is null and void, because the court had no power or authority to grant the relief or no jurisdiction over the subject matter or over the parties or both. The aggrieved party may attack the validity of the final judgment by a direct action or proceeding in order to annul the same, as certiorari, which is not incidental to, but is the main object of the proceeding. The validity of a final judgment may also be attacked collaterally as when a party files a motion for the execution of the judgment and the adverse party resists the motion by claiming that the court has no authority to pronounce the judgment and that the same is null and void for lack of jurisdiction over the subject matter or over the parties. In cases of collateral attack, the principles that apply have been stated as follows: 'The legitimate province of collateral impeachment is void judgments. There and there alone can it meet with any measure of success. Decision after decision bears this import: 'In every case the field of collateral inquiry is narrowed down to the single issue concerning the void character of the judgment and the assailant is called upon to satisfy the court that such is the fact. To compass his purpose of overthrowing the judgment, it is not enough that he shows a mistaken or erroneous decision or a record disclosing non-jurisdictional irregularities in the proceedings leading up to the judgment. He must go beyond this and show to the court, generally from the fact of the record itself, and not by extraneous evidence that the judgment complained of is utterly void. If he can do that his attack will succeed for the cases leave no doubt respecting the right of a litigant
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to collaterally impeach a judgment that he can prove to be void.' The reason for the rule of exclusion of extraneous proof to show that the judgment complained of is utterly void for lack of jurisdiction has been expressed in the following words: 'The doctrine that the question of jurisdiction is to be determined by the record alone, thereby excluding extraneous proof seems to be the natural unavoidable result of that stamp of authenticity which, from the earliest times, was placed upon the 'record,' and which gave it such 'uncontrollable credit and verity that no plea, proof, or averment could be heard to the contrary.' . . . Any rule, . . . would be disastrous in its results, since to permit the court's record to be contradicted or varied by evidence dehors would render such records of no avail and definite sentences would afford but slight protection to the rights of parties once solemnly adjudicated.'" We should add, however, that where an action for annulment of judgment is grounded on extrinsic fraud, extraneous evidence is admitted. We have held that, although a person need not be a party to the judgment sought to be annulled by reason of extrinsic fraud, he must prove his allegation that the judgment was obtained by the use of fraud and collusion and that he would be adversely affected thereby. 58 Fraud must be extraneous; otherwise, there would be no end to litigation. Extrinsic fraud refers to any fraudulent act committed by a prevailing party outside the trial of the case, whereby the defeated party has been prevented from fully exhibiting his side of the case, because of fraud or deception practiced on him by his opponent. 59 As distinctly defined in Cosmic Lumber Corporation vs. Courts of Appeals, et al.: 60 "There is extrinsic fraud within the meaning of Sec. 9, par. (2), of B.P. Blg. 129, where it is one the effect of which prevents a party from hearing a trial, or real contest, or from presenting all of his case to the court, or where it operates upon matters, not pertaining to the judgment itself, but to the manner in which it was procured so that there is not a fair submission of the controversy. In other words, extrinsic fraud refers to any fraudulent act of the
prevailing party in the litigation which is committed outside of the trial of the case, whereby the defeated party has been prevented from exhibiting fully his side of the case by fraud or deception practiced on him by his opponent. (fn: Makabingkil v. PHHC, No. L-29080, 17 August 1976, 72 SCRA 326, 343-344) Fraud is extrinsic where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent, as keeping him away from court, a false promise of a compromise; or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority connives at his defeat; these and similar cases which show that there has never been a real contest in the trial or hearing of the case are reasons for which a new suit may be sustained to set aside and annul the former judgment and open the case for a new and fair hearing.( fn: Id., p. 344 citing U.S. v. Throckmorton, 25 L. Ed. 93, 95)" In deciding the "petition for annulment of judgment" which should be a "petition to declare judgment void" Respondent Court of Appeals should not have considered the following matters which find no support from the records and are thus considered "extraneous": (1) the assumption that petitioners knew of the five-year lease contract with private respondent and the pendency of Civil Case No. D-7240 from 1984 to 1991; and (2) the testimony of Juan Bernal in a separate criminal case before another court concerning the authority granted to Olanday et al. and where petitioners were not parties. The rule is that the nullity of the decision arising from want of jurisdiction and/or due process should appear from the records of the case. And the validity of the judgment cannot be anchored on mere suppositions or speculations, as Respondent Court did. Equally important, the finding of estoppel and laches by Respondent Court is not supported by the evidence on record. The silence of petitioners can easily be explained by the fact that they were not in the country during the pendency of the subject civil case. Such absence from the country was never rebutted by private respondent. Even in
the proceedings antecedent to this case before us now, petitioners were merely represented by their attorney-infact. 61 Moreover, they were not at all impleaded as parties in the judgment sought to be voided. Neither were they properly served summons. The indelible fact is that they were completely ignored. In any event, we ruled in Alabang Development Corporation vs. Valenzuela 62 that no laches attach when the judgment is null and void for want of jurisdiction: "The herein respondents attribute laches to the petitioners for not appealing from the order of the lower court denying their motion to intervene and motion for new trial hence allowing the said order/decision to become final. There is no laches nor finality of any decision to speak of since the decision under question is herein pronounced null and void for having been rendered without jurisdiction. Prescinding therefrom, as admitted by themselves in their comment, the judgment of reconstitution is 'ineffective' against the owners of lands covered thereby who were not joined as parties in the proceeding. As the Court ruled in Bernal case on the matter of intervention [fn: 93 SCRA at pp. 247, 248] 'a valid judgment cannot even be rendered where there is want of indispensable parties' such as petitioners who hold subsisting Torrens Title to the properties in question and 'this aspect of the case commands the joinder of indispensable parties to allow them to uphold their interests based upon the Torrens titles they hold overrides any question of later intervention.' Petitioners have precisely availed of the proper, speedy and adequate remedy of the present special civil action of certiorari and prohibition to annul and set aside for want of jurisdiction the decision and all proceedings of respondent judge." On the other hand, the doctrine of estoppel is predicated on and finds its roots in equity which, broadly defined, is justice according to natural law and right. It is a principle intended to prevent a clear case of injustice. The term is hardly separable from a waiver of right. Estoppel, like laches, must be intentional and unequivocal, for when misapplied, it can easily become a most convenient and effective means of injustice. Estoppel is a principle that, as
39
a rule) can be invoked only in highly exceptional and legitimate cases. 63 In Cruz vs. Court of Appeals, 64 we reiterated the requisites of estoppel: "In Kalalo vs. Luz, [ fn: 34 SCRA 337] We held that the essential elements of estoppel in respect to the party claiming it are: (a) lack of knowledge and of the means of knowledge of the truth as the facts in question; (b) reliance, in good faith, upon the conduct or statements of the party to be estopped; and (c) action or inaction based thereon of such character as to change the position or status of the party claiming the estoppel, to his injury, detriment, or prejudice." The herein facts ineluctably show the absence of the first element in this case. Inasmuch as there is no proof that petitioners had knowledge of the pending tenancy case filed by private respondent, it is only fair that they should not be held in estoppel for failing to intervene in and to question the jurisdiction of the trial court in Civil Case No. D-7240. Thus, private respondent may not say that he was misled into believing that petitioners knew of the lease contract and of the litigation of Civil Case No. D-7240. Undisputedly, from the evidence on record, petitioners had no such knowledge. Petitioners' receipt of lease rentals cannot be used as proof of recognition of private respondent as a caretakertenant. This issue was not raised in the lower court and is being alleged for the first time before us. Well-settled is the doctrine that questions not raised in the lower courts cannot be raised for the first time on appeal. 65 Third Issue: Intervention as a Remedy of Petitioners Petitioners' contend that Respondent Court of Appeals erred when it ruled that their only remedy was intervention during the execution stage of Civil Case No. D-7240. Inasmuch as "annulment of judgment could be made either collaterally or directly," petitioners insist that their resort to "direct action in annulling the Decision of the lower court should not be taken against them." 66 Moreover, petitioners argue that "in proceedings for execution of a final decision or judgment, it is the
ministerial duty of the court of origin to issue the writ." 67 Petitioners add that because their action would result in the "modification, alteration, and annulment of the judgment, the specific provision of law that annulment of judgment of the Regional Trial Court is within the exclusive jurisdiction of the Court of Appeals should prevail." 68 Private respondent counters that petitioners deliberately did not intervene "to afford them opportunity to question, as they now question, the validity of any decision to be rendered in said case, . . . in the event of an adverse decision." 69 We hold that intervention is not the only remedy to assail a void final judgment. There is no procedural rule prescribing that petitioners' intervention in the hearing for the issuance of a writ is the only way to question a void final judgment. As already stated, petitioners were not aware of such hearing. Besides, as already discussed, a direct action is available in assailing final judgments grounded on extrinsic fraud, while a direct or a collateral action may be used to show lack of jurisdiction. The assailed Decision of Respondent Court of Appeals cites certain cases allowing intervention as follows: 70 "A case in which an execution has been issued is regarded as still pending so that all proceedings in the execution are proceedings in the suit. There is no question that the court which rendered the judgment has a general supervisory control over its process of execution and this power carries with it the right to determine every question of fact and law which may be involved in the execution. (Suson vs. Court of Appeals, 172 SCRA 70, 75, citing Paman vs. Severis, 115 SCRA 709; Seavan Carrier vs. GTI Sportswear, 137 SCRA 580)" These cases, which require intervention of parties who may be adversely affected by the decision, are not applicable. In the cited Suson vs. Court of Appeals, 71 the parties, though not impleaded, knew of the case and were in fact directed by the trial court to intervene, but they refused to do so. These particular facts are absent in the
instant case where, to repeat, petitioners were abroad when Civil Case D-7240 was prosecuted. In any event, as earlier pointed out, jurisprudence upholds the soundness of an independent action to declare as null and void a judgment rendered without jurisdiction as in this case. In Leonor vs. Court of Appeals, 72 Petitioner Virginia A. Leonor, through a "petition for certiorari, prohibition and mandamus . . . sought the nullification of both the decision dated December 14, 1992 and the order dated February 24, 1993 of the trial court for having been issued in excess of jurisdiction and/or with grave abuse of discretion." 73 We held in that case that: 74 "A void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of any obligation. All acts performed pursuant to it and all claims emanating from it have no legal effect. Hence, it can never become final and any writ of execution based on it is void: .'. . . it may be said to be a lawless thing which can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head.'" WHEREFORE, the petition for certiorari is GRANTED. The Decision of Respondent Court of Appeals is hereby REVERSED and SET ASIDE. The decisions in Civil Case No. D-7240, AC-G.R. SP-05237-CAR and G.R. No. L-71217 are ANNULLED and SET ASIDE for lack of jurisdiction. No costs. SO ORDERED.

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