Property Cases 9.14.17.docx

OESMER vs PARAISO February 5, 2007 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to reverse and set aside the Court of Appeals Decision[1] dated 26 April 2002 in CA-G.R. CV No. 53130 entitled, Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, Enriqueta, Adolfo, and Jesus, all surnamed Oesmer vs. Paraiso Development Corporation, as modified by its Resolution[2] dated 4 March 2003, declaring the Contract to Sell valid and binding with respect to the undivided proportionate shares of the six signatories of the said document, herein petitioners, namely: Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer); and ordering them to execute the Deed of Absolute Sale concerning their 6/8 share over the subject parcels of land in favor of herein respondent Paraiso Development Corporation, and to pay the latter the attorneys fees plus costs of the suit. The assailed Decision, as modified, likewise ordered the respondent to tender payment to the petitioners in the amount of P3,216,560.00 representing the balance of the purchase price of the subject parcels of land. The facts of the case are as follows: Petitioners Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, and Enriqueta, all surnamed Oesmer, together with Adolfo Oesmer (Adolfo) and Jesus Oesmer (Jesus), are brothers and sisters, and the co-owners of undivided shares of two parcels of agricultural and tenanted land situated in Barangay Ulong Tubig, Carmona, Cavite, identified as Lot 720 with an area of 40,507 square meters (sq. m.) and Lot 834 containing an area of 14,769 sq. m., or a total land area of 55,276 sq. m. Both lots are unregistered and originally owned by their parents, Bibiano Oesmer and Encarnacion Durumpili, who declared the lots for taxation purposes under Tax Declaration No. 3438[3] (cancelled by I.D. No. 6064-A) for Lot 720 and Tax Declaration No. 3437[4] (cancelled by I.D. No. 5629) for Lot 834. When the spouses Oesmer died, petitioners, together with Adolfo and Jesus, acquired the lots as heirs of the former by right of succession. Respondent Paraiso Development Corporation is known to be engaged in the real estate business. Sometime in March 1989, Rogelio Paular, a resident and former Municipal Secretary of Carmona, Cavite, brought along petitioner Ernesto to meet with a certain Sotero Lee, President of respondent Paraiso Development Corporation, at

Otani Hotel in Manila. The said meeting was for the purpose of brokering the sale of petitioners properties to respondent corporation. Pursuant to the said meeting, a Contract to Sell[5] was drafted by the Executive Assistant of Sotero Lee, Inocencia Almo. On 1 April 1989, petitioners Ernesto and Enriqueta signed the aforesaid Contract to Sell. A check in the amount of P100,000.00, payable to Ernesto, was given as option money. Sometime thereafter, Rizalino, Leonora, Bibiano, Jr., and Librado also signed the said Contract to Sell. However, two of the brothers, Adolfo and Jesus, did not sign the document. On 5 April 1989, a duplicate copy of the instrument was returned to respondent corporation. On 21 April 1989, respondent brought the same to a notary public for notarization. In a letter[6] dated 1 November 1989, addressed to respondent corporation, petitioners informed the former of their intention to rescind the Contract to Sell and to return the amount of P100,000.00 given by respondent as option money. Respondent did not respond to the aforesaid letter. On 30 May 1991, herein petitioners, together with Adolfo and Jesus, filed a Complaint[7] for Declaration of Nullity or for Annulment of Option Agreement or Contract to Sell with Damages before the Regional Trial Court (RTC) of Bacoor, Cavite. The said case was docketed as Civil Case No. BCV-91-49. During trial, petitioner Rizalino died. Upon motion of petitioners, the trial court issued an Order,[8] dated 16 September 1992, to the effect that the deceased petitioner be substituted by his surviving spouse, Josefina O. Oesmer, and his children, Rolando O. Oesmer and Fernando O. Oesmer. However, the name of Rizalino was retained in the title of the case both in the RTC and the Court of Appeals. After trial on the merits, the lower court rendered a Decision[9] dated 27 March 1996 in favor of the respondent, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of herein [respondent] Paraiso Development Corporation. The assailed Contract to Sell is valid and binding only to the undivided proportionate share of the signatory of this document and recipient of the check, [herein petitioner] co-owner Ernesto Durumpili Oesmer. The latter is hereby ordered to execute the Contract of Absolute Sale concerning his 1/8 share over the subject two parcels of land in favor of herein [respondent] corporation, and to pay the latter the attorneys fees in the sum of Ten Thousand (P10,000.00) Pesos plus costs of suit. The counterclaim of [respondent] corporation is hereby Dismissed for lack of merit.[10]

Petitioners come before this Court arguing that the Court of Appeals erred: Unsatisfied, respondent appealed the said Decision before the Court of Appeals. On 26 April 2002, the appellate court rendered a Decision modifying the Decision of the court a quo by declaring that the Contract to Sell is valid and binding with respect to the undivided proportionate shares of the six signatories of the said document, herein petitioners, namely: Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer). The decretal portion of the said Decision states that: WHEREFORE, premises considered, the Decision of the court a quo is hereby MODIFIED. Judgment is hereby rendered in favor of herein [respondent] Paraiso Development Corporation. The assailed Contract to Sell is valid and binding with respect to the undivided proportionate share of the six (6) signatories of this document, [herein petitioners], namely, Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer). The said [petitioners] are hereby ordered to execute the Deed of Absolute Sale concerning their 6/8 share over the subject two parcels of land and in favor of herein [respondent] corporation, and to pay the latter the attorneys fees in the sum of Ten Thousand Pesos (P10,000.00) plus costs of suit.[11]

Aggrieved by the above-mentioned Decision, petitioners filed a Motion for Reconsideration of the same on 2 July 2002. Acting on petitioners Motion for Reconsideration, the Court of Appeals issued a Resolution dated 4 March 2003, maintaining its Decision dated 26 April 2002, with the modification that respondent tender payment to petitioners in the amount of P3,216,560.00, representing the balance of the purchase price of the subject parcels of land. The dispositive portion of the said Resolution reads: WHEREFORE, premises considered, the assailed Decision is hereby modified. Judgment is hereby rendered in favor of herein [respondent] Paraiso Development Corporation. The assailed Contract to Sell is valid and binding with respect to the undivided proportionate shares of the six (6) signatories of this document, [herein petitioners], namely, Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer). The said [petitioners] are hereby ordered to execute the Deed of Absolute Sale concerning their 6/8 share over the subject two parcels of land in favor of herein [respondent] corporation, and to pay the latter attorneys fees in the sum of Ten Thousand Pesos (P10,000.00) plus costs of suit. Respondent is likewise ordered to tender payment to the above-named [petitioners] in the amount of Three Million Two Hundred Sixteen Thousand Five Hundred Sixty Pesos (P3,216,560.00) representing the balance of the purchase price of the subject two parcels of land. [12] Hence, this Petition for Review on Certiorari.

I. On a question of law in not holding that, the supposed Contract to Sell (Exhibit D) is not binding upon petitioner Ernesto Oesmers coowners (herein petitioners Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora). II. On a question of law in not holding that, the supposed Contract to Sell (Exhibit D) is void altogether considering that respondent itself did not sign it as to indicate its consent to be bound by its terms. Moreover, Exhibit D is really a unilateral promise to sell without consideration distinct from the price, and hence, void.

Petitioners assert that the signatures of five of them namely: Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora, on the margins of the supposed Contract to Sell did not confer authority on petitioner Ernesto as agent to sell their respective shares in the questioned properties, and hence, for lack of written authority from the above-named petitioners to sell their respective shares in the subject parcels of land, the supposed Contract to Sell is void as to them. Neither do their signatures signify their consent to directly sell their shares in the questioned properties. Assuming that the signatures indicate consent, such consent was merely conditional. The effectivity of the alleged Contract to Sell was subject to a suspensive condition, which is the approval of the sale by all the co-owners. Petitioners also assert that the supposed Contract to Sell (Exhibit D), contrary to the findings of the Court of Appeals, is not couched in simple language. They further claim that the supposed Contract to Sell does not bind the respondent because the latter did not sign the said contract as to indicate its consent to be bound by its terms. Furthermore, they maintain that the supposed Contract to Sell is really a unilateral promise to sell and the option money does not bind petitioners for lack of cause or consideration distinct from the purchase price. The Petition is bereft of merit. It is true that the signatures of the five petitioners, namely: Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora, on the Contract to Sell did not confer authority on petitioner Ernesto as agent authorized to sell their respective shares in the questioned properties because of Article 1874 of the Civil Code, which expressly provides that: Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.

The law itself explicitly requires a written authority before an agent can sell an immovable. The conferment of such an authority should be in writing, in as clear and precise terms as possible. It is worth noting that petitioners signatures are found in the Contract to Sell. The Contract is absolutely silent on the establishment of any principal-agent relationship between the five petitioners and their brother and co-petitioner Ernesto as to the sale of the subject parcels of land. Thus, the Contract to Sell, although signed on the margin by the five petitioners, is not sufficient to confer authority on petitioner Ernesto to act as their agent in selling their shares in the properties in question. However, despite petitioner Ernestos lack of written authority from the five petitioners to sell their shares in the subject parcels of land, the supposed Contract to Sell remains valid and binding upon the latter. As can be clearly gleaned from the contract itself, it is not only petitioner Ernesto who signed the said Contract to Sell; the other five petitioners also personally affixed their signatures thereon. Therefore, a written authority is no longer necessary in order to sell their shares in the subject parcels of land because, by affixing their signatures on the Contract to Sell, they were not selling their shares through an agent but, rather, they were selling the same directly and in their own right. The Court also finds untenable the following arguments raised by petitioners to the effect that the Contract to Sell is not binding upon them, except to Ernesto, because: (1) the signatures of five of the petitioners do not signify their consent to sell their shares in the questioned properties since petitioner Enriqueta merely signed as a witness to the said Contract to Sell, and that the other petitioners, namely: Librado, Rizalino, Leonora, and Bibiano, Jr., did not understand the importance and consequences of their action because of their low degree of education and the contents of the aforesaid contract were not read nor explained to them; and (2) assuming that the signatures indicate consent, such consent was merely conditional, thus, the effectivity of the alleged Contract to Sell was subject to a suspensive condition, which is the approval by all the co-owners of the sale. It is well-settled that contracts are perfected by mere consent, upon the acceptance by the offeree of the offer made by the offeror. From that moment, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. To produce a contract, the acceptance must not qualify the terms of the offer. However, the acceptance may be express or implied. For a contract to arise, the acceptance must be made known to the offeror. Accordingly, the acceptance can be withdrawn or revoked before it is made known to the offeror.[13]

In the case at bar, the Contract to Sell was perfected when the petitioners consented to the sale to the respondent of their shares in the subject parcels of land by affixing their signatures on the said contract. Such signatures show their acceptance of what has been stipulated in the Contract to Sell and such acceptance was made known to respondent corporation when the duplicate copy of the Contract to Sell was returned to the latter bearing petitioners signatures. As to petitioner Enriquetas claim that she merely signed as a witness to the said contract, the contract itself does not say so. There was no single indication in the said contract that she signed the same merely as a witness. The fact that her signature appears on the right-hand margin of the Contract to Sell is insignificant. The contract indisputably referred to the Heirs of Bibiano and Encarnacion Oesmer, and since there is no showing that Enriqueta signed the document in some other capacity, it can be safely assumed that she did so as one of the parties to the sale. Emphasis should also be given to the fact that petitioners Ernesto and Enriqueta concurrently signed the Contract to Sell. As the Court of Appeals mentioned in its Decision,[14] the records of the case speak of the fact that petitioner Ernesto, together with petitioner Enriqueta, met with the representatives of the respondent in order to finalize the terms and conditions of the Contract to Sell. Enriqueta affixed her signature on the said contract when the same was drafted. She even admitted that she understood the undertaking that she and petitioner Ernesto made in connection with the contract. She likewise disclosed that pursuant to the terms embodied in the Contract to Sell, she updated the payment of the real property taxes and transferred the Tax Declarations of the questioned properties in her name.[15] Hence, it cannot be gainsaid that she merely signed the Contract to Sell as a witness because she did not only actively participate in the negotiation and execution of the same, but her subsequent actions also reveal an attempt to comply with the conditions in the said contract. With respect to the other petitioners assertion that they did not understand the importance and consequences of their action because of their low degree of education and because the contents of the aforesaid contract were not read nor explained to them, the same cannot be sustained. We only have to quote the pertinent portions of the Court of Appeals Decision, clear and concise, to dispose of this issue. Thus, First, the Contract to Sell is couched in such a simple language which is undoubtedly easy to read and understand. The terms of the Contract, specifically the amount of P100,000.00 representing the option money paid by [respondent] corporation, the purchase price of P60.00 per square meter or the total amount of P3,316,560.00 and a brief description of the subject properties are well-indicated

thereon that any prudent and mature man would have known the nature and extent of the transaction encapsulated in the document that he was signing. Second, the following circumstances, as testified by the witnesses and as can be gleaned from the records of the case clearly indicate the [petitioners] intention to be bound by the stipulations chronicled in the said Contract to Sell. As to [petitioner] Ernesto, there is no dispute as to his intention to effect the alienation of the subject property as he in fact was the one who initiated the negotiation process and culminated the same by affixing his signature on the Contract to Sell and by taking receipt of the amount of P100,000.00 which formed part of the purchase price. xxxx As to [petitioner] Librado, the [appellate court] finds it preposterous that he willingly affixed his signature on a document written in a language (English) that he purportedly does not understand. He testified that the document was just brought to him by an 18 year old niece named Baby and he was told that the document was for a check to be paid to him. He readily signed the Contract to Sell without consulting his other siblings. Thereafter, he exerted no effort in communicating with his brothers and sisters regarding the document which he had signed, did not inquire what the check was for and did not thereafter ask for the check which is purportedly due to him as a result of his signing the said Contract to Sell. (TSN, 28 September 1993, pp. 22-23) The [appellate court] notes that Librado is a 43 year old family man (TSN, 28 September 1993, p. 19). As such, he is expected to act with that ordinary degree of care and prudence expected of a good father of a family. His unwitting testimony is just divinely disbelieving. The other [petitioners] (Rizalino, Leonora and Bibiano Jr.) are likewise bound by the said Contract to Sell. The theory adopted by the [petitioners] that because of their low degree of education, they did not understand the contents of the said Contract to Sell is devoid of merit. The [appellate court] also notes that Adolfo (one of the co-heirs who did not sign) also possess the same degree of education as that of the signing co-heirs (TSN, 15 October 1991, p. 19). He, however, is employed at the Provincial Treasury Office at Trece Martirez, Cavite and has even accompanied Rogelio Paular to the Assessors Office to locate certain missing documents which were needed to transfer the titles of the subject properties. (TSN, 28 January 1994, pp. 26 & 35) Similarly, the other co-heirs [petitioners], like Adolfo, are far from ignorant, more so, illiterate that they can be extricated from their obligations under the Contract to Sell which they voluntarily and knowingly entered into with the [respondent] corporation.

The Supreme Court in the case of Cecilia Mata v. Court of Appeals (207 SCRA 753 [1992]), citing the case of Tan Sua Sia v. Yu Baio Sontua (56 Phil. 711), instructively ruled as follows: The Court does not accept the petitioners claim that she did not understand the terms and conditions of the transactions because she only reached Grade Three and was already 63 years of age when she signed the documents. She was literate, to begin with, and her age did not make her senile or incompetent. x x x. At any rate, Metrobank had no obligation to explain the documents to the petitioner as nowhere has it been proven that she is unable to read or that the contracts were written in a language not known to her. It was her responsibility to inform herself of the meaning and consequence of the contracts she was signing and, if she found them difficult to comprehend, to consult other persons, preferably lawyers, to explain them to her. After all, the transactions involved not only a few hundred or thousand pesos but, indeed, hundreds of thousands of pesos. As the Court has held: x x x The rule that one who signs a contract is presumed to know its contents has been applied even to contracts of illiterate persons on the ground that if such persons are unable to read, they are negligent if they fail to have the contract read to them. If a person cannot read the instrument, it is as much his duty to procure some reliable persons to read and explain it to him, before he signs it, as it would be to read it before he signed it if he were able to do and his failure to obtain a reading and explanation of it is such gross negligence as will estop from avoiding it on the ground that he was ignorant of its contents.[16] That the petitioners really had the intention to dispose of their shares in the subject parcels of land, irrespective of whether or not all of the heirs consented to the said Contract to Sell, was unveiled by Adolfos testimony as follows: ATTY. GAMO: This alleged agreement between you and your other brothers and sisters that unless everybody will agree, the properties would not be sold, was that agreement in writing? WITNESS: No sir. ATTY. GAMO: What you are saying is that when your brothers and sisters except Jesus and you did not sign that agreement which had been marked as [Exhibit] D, your brothers and sisters were grossly violating your agreement. WITNESS: Yes, sir, they violated what we have agreed upon.[17] We also cannot sustain the allegation of the petitioners that assuming the signatures indicate consent, such consent was merely conditional, and that, the

effectivity of the alleged Contract to Sell was subject to the suspensive condition that the sale be approved by all the co-owners. The Contract to Sell is clear enough. It is a cardinal rule in the interpretation of contracts that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control.[18] The terms of the Contract to Sell made no mention of the condition that before it can become valid and binding, a unanimous consent of all the heirs is necessary. Thus, when the language of the contract is explicit, as in the present case, leaving no doubt as to the intention of the parties thereto, the literal meaning of its stipulation is controlling. In addition, the petitioners, being owners of their respective undivided shares in the subject properties, can dispose of their shares even without the consent of all the co-heirs. Article 493 of the Civil Code expressly provides: Article 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. [Emphases supplied.]

Consequently, even without the consent of the two co-heirs, Adolfo and Jesus, the Contract to Sell is still valid and binding with respect to the 6/8 proportionate shares of the petitioners, as properly held by the appellate court. Therefore, this Court finds no error in the findings of the Court of Appeals that all the petitioners who were signatories in the Contract to Sell are bound thereby. The final arguments of petitioners state that the Contract to Sell is void altogether considering that respondent itself did not sign it as to indicate its consent to be bound by its terms; and moreover, the Contract to Sell is really a unilateral promise to sell without consideration distinct from the price, and hence, again, void. Said arguments must necessarily fail. The Contract to Sell is not void merely because it does not bear the signature of the respondent corporation. Respondent corporations consent to be bound by the terms of the contract is shown in the uncontroverted facts which established that there was partial performance by respondent of its obligation in the said Contract to Sell when it tendered the amount of P100,000.00 to form part of the purchase price, which was accepted and acknowledged expressly by petitioners. Therefore, by force of law, respondent is required to complete the payment to enforce the terms of the contract. Accordingly, despite the absence of respondents signature

in the Contract to Sell, the former cannot evade its obligation to pay the balance of the purchase price. As a final point, the Contract to Sell entered into by the parties is not a unilateral promise to sell merely because it used the word option money when it referred to the amount of P100,000.00, which also form part of the purchase price. Settled is the rule that in the interpretation of contracts, the ascertainment of the intention of the contracting parties is to be discharged by looking to the words they used to project that intention in their contract, all the words, not just a particular word or two, and words in context, not words standing alone.[19] In the instant case, the consideration of P100,000.00 paid by respondent to petitioners was referred to as option money. However, a careful examination of the words used in the contract indicates that the money is not option money but earnest money. Earnest money and option money are not the same but distinguished thus: (a) earnest money is part of the purchase price, while option money is the money given as a distinct consideration for an option contract; (b) earnest money is given only where there is already a sale, while option money applies to a sale not yet perfected; and, (c) when earnest money is given, the buyer is bound to pay the balance, while when the would-be buyer gives option money, he is not required to buy, but may even forfeit it depending on the terms of the option.[20] The sum of P100,000.00 was part of the purchase price. Although the same was denominated as option money, it is actually in the nature of earnest money or down payment when considered with the other terms of the contract. Doubtless, the agreement is not a mere unilateral promise to sell, but, indeed, it is a Contract to Sell as both the trial court and the appellate court declared in their Decisions. WHEREFORE, premises considered, the Petition is DENIED, and the Decision and Resolution of the Court of Appeals dated 26 April 2002 and 4 March 2003, respectively, are AFFIRMED, thus, (a) the Contract to Sell is DECLARED valid and binding with respect to the undivided proportionate shares in the subject parcels of land of the six signatories of the said document, herein petitioners Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer); (b) respondent is ORDERED to tender payment to petitioners in the amount of P3,216,560.00 representing the balance of the purchase price for the latters shares in the subject parcels of land; and (c) petitioners are further ORDERED to execute in favor of respondent the Deed of Absolute Sale covering their shares in the subject parcels of land after receipt of the balance of the purchase price, and to pay respondent attorneys fees plus costs of the suit. Costs against petitioners. SO ORDERED.

AGUILAR vs. AGUILAR Promulgated: December 16, 2005 x---------------------------------------------------------------------------------------------x

On appeal, docketed as CA-G.R. CV No. 03933, the Court of Appeals reversed the trial courts Decision. Virgilio then filed with this Court a petition for review on certiorari, docketed as G.R. No. 76351.

DECISION Assailed in this petition for review on certiorari are the Decision[1] and Resolution[2] of the Court of Appeals, dated June 11, 1999 and January 11, 2000, respectively, in CA-G.R. CV No. 55750. The parties in this case are brothers, except Alejandro Sangalang, herein intervenor-respondent. As will be subsequently discussed, this is the second time that the brothers Aguilar seek the intervention of this Court regarding the same facts and the same subject matter. The first was in Aguilar v. Court of Appeals, G.R. No. 76351 decided on October 29, 1993 against Senen B. Aguilar.[3] It is time to writ finis to this family wrangling. On October 28, 1993, Senen and Virgilio purchased a house and lot located in Paraaque City, Metro Manila for the benefit of their father, Maximiano Aguilar (now deceased). The brothers wanted their father to enjoy his retirement in a quiet neighborhood. On February 23, 1970, they executed a written agreement stipulating that their shares in the house and lot would be equal; and that Senen would live with their father on condition that he would pay the Social Security System (SSS) the remaining loan obligation of the former owners. In 1974, their father died. Virgilio then demanded that Senen vacate the house and that the property be sold, the proceeds to be divided between them. Senen refused to comply with Virgilios demand. On January 12, 1979, Virgilio filed a complaint with the Court of First Instance (now Regional Trial Court) of Rizal at Pasay City for specific performance. Virgilio prayed that Senen be compelled to sell the property so that the proceeds could be divided between them. However, during the pre-trial, neither Senen nor his counsel appeared. Thus, Senen was declared as in default by the trial court and Virgilio was allowed to present his evidence ex-parte. On July 26, 1979, the trial court rendered its Decision, declaring the brothers coowners of the house and lot and are entitled to equal shares; and ordering that the property be sold, the proceeds to be divided equally between them. The trial court also ordered Senen to vacate the property and to pay Virgilio rentals with interests corresponding to the period from January 1975 until he leaves the premises.

On October 29, 1993, this Court rendered its Decision, the dispositive portion of which reads: WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated 16 October 1986 is REVERSED and SET ASIDE. The decision of the trial court in Civil Case No. 6912-P dated 26 July 1971 is REINSTATED, with the modification that respondent Senen B. Aguilar is ordered to vacate the premises in question within ninety (90) days from receipt of this decision, and to pay petitioner Virgilio B. Aguilar, a monthly rental of P1,200.00 with interest at the legal rate from the time he received the decision of the trial court directing him to vacate until he effectively leaves the premises. The trial court is further directed to take immediate steps to implement this decision, conformably with Art. 498 of the Civil Code and the Rules of Court. This decision is final and executory. SO ORDERED. On March 27, 1995, Senen filed with the Regional Trial Court, Branch 260, Paraaque City, an action for legal redemption against Virgilio and another brother, Angel, docketed as Civil Case No. 95-039. In his complaint, Senen alleged that while he knows that Virgilio sold his share of the property to Angel in January 1989, however, he (Senen) was not furnished any written notice of the sale. Consequently, as a co-owner, he has the right to redeem the property. Meanwhile, on November 27, 1995, pursuant to this Courts Decision in G.R. No. 76351, the property was sold at public auction to Alejandro C. Sangalang, intervenor-respondent herein. Virgilio then received his share of the proceeds as well as the rental payments due from Senen. By then, Virgilio had moved to California, USA. It was only on January 25, 1997 that he was served, through the Philippine Consulate in San Francisco, a copy of Senens complaint in Civil Case No. 95-039. On February 24, 1997, Virgilio filed a motion to dismiss the complaint for lack of cause of action and forum shopping. In an Order dated June 27, 1997, the trial court dismissed Civil Case No. 05-039 on the ground of laches, holding that Senen incurred a delay of seven (7) years before asserting his right to redeem the property in question.

On appeal, the Court of Appeals affirmed the assailed Order of the trial court. Hence, the instant petition for review on certiorari. The sole issue for our resolution is whether the Court of Appeals erred in holding that Senens complaint for legal redemption in Civil Case No. 05-039 is barred by laches. Legal redemption (retracto legal de comuneros) is a privilege created by law, partly by reason of public policy and partly for the benefit of the redemptioner to afford him a way out of a disagreeable or inconvenient association into which he has been thrust.[4] With respect to redemption by co-owners, in case the share of a co-owner is sold to a third person, the governing law is Article 1620 of the Civil Code which provides: ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable rate. Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common. The purpose behind Article 1620 is to provide a method for terminating the coownership and consolidating the dominion in one sole owner.[5]

In this case, the sale took place in January 1989. Petitioner admits that he has actual knowledge of the sale. However, he only asserted his right to redeem the property in March 1995 by filing the instant complaint. Both the trial court and the Appellate Court ruled that this was seven (7) years late. Petitioner, however, now contends that there being no written notice to him of the sale by the vendee or vendor, the thirty-day redemption period has not prescribed. Petitioners contention lacks merit. The old rule is that a written notice of the sale by the vendor to his co-owners is indispensable for the latter to exercise their retracto legal de comuneros.[6] More recently, however, we have relaxed the written notice requirement. Thus, in Si v. Court of Appeals,[7] we ruled that a co-owner with actual notice of the sale is not entitled to a written notice for such would be superfluous. The law does not demand what is unnecessary. Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which could or should have been done earlier through the exercise of due diligence.[8] Otherwise stated, laches is the negligence or omission to assert a right within a reasonable time warranting a presumption that the party entitled to assert it has either abandoned or declined to assert it.[9] Its elements are: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation for which the complaint seeks a remedy; (2) delay in asserting the complainants rights, the complainant having had knowledge or notice of the defendants conduct as having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right in which he bases his suit; and (4) injury or prejudice to the defendant in the event, relief is accorded to the complainant, or the suit is not held barred.[10]

Article 1623 of the same Code also provides: ART. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendee, or by the vendor, as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendee that he has given written notice thereof to all possible redemptioners. The right of redemption of co-owners excludes that of adjoining owners. From the above provisions, the following are the requisites for the exercise of legal redemption: (1) There must be a co-ownership; (2) one of the co-owners sold his right to a stranger; (3) the sale was made before the partition of the co-owned property; (4) the right of redemption must be exercised by one or more co-owners within a period of thirty days to be counted from the time that he or they were notified in writing by the vendee or by the co-owner vendor; and (5) the vendee must be reimbursed for the price of the sale.

Petitioner has actual knowledge of the sale of Virgilios share to Angel in 1989. As provided by Article 1623, he has thirty days from such actual knowledge within which to exercise his right to redeem the property. Inexplicably, petitioner did not take any action. He waited for seven (7) years before filing his complaint. Definitely, such an unexplained delay is tantamount to laches. To be sure, to uphold his right would unduly cause injury to respondent-intervenor, a purchaser in good faith and for value. Moreover, by the time Senen filed Civil Case No. 95-039 for legal redemption, his right was no longer available to him. We have held that after a property has been subdivided and distributed among the co-owners, the community has terminated and there is no reason to sustain any right of pre-emption or redemption.[11] WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 55750 are AFFIRMED. Costs against petitioner.

SECOND DIVISION [G.R. No. 137677. May 31, 2000] ADALIA B. FRANCISCO, petitioner, vs. ZENAIDA F. BOISER, respondent. DECISION MENDOZA, J.: This is a petition for review of the decision of the Court of Appeals in CA-G.R. CV No. 55518 which affirmed in toto the decision of the Regional Trial Court, Branch 122, Caloocan City, dismissing petitioners complaint for redemption of property against respondent. Sdaad The facts are as follows: Petitioner Adalia B. Francisco and three of her sisters, Ester, Elizabeth and Adeluisa, were co-owners of four parcels of registered lands[1] on which stands the Ten Commandments Building at 689 Rizal Avenue Extension, Caloocan City. On August 6, 1979, they sold 1/5 of their undivided share in the subject parcels of land to their mother, Adela Blas, for P10,000.00, thus making the latter a co-owner of said real property to the extent of the share sold. Sdaamiso On August 8, 1986, without the knowledge of the other co-owners, Adela Blas sold her 1/5 share for P10,000.00 to respondent Zenaida Boiser who is another sister of petitioner. On August 5, 1992, petitioner received summons, with a copy of the complaint in Civil Case No. 15510, filed by respondent demanding her share in the rentals being collected by petitioner from the tenants of the building. Petitioner then informed respondent that she was exercising her right of redemption as a co-owner of the subject property. On August 12, 1992, she deposited the amount of P10,000.00 as redemption price with the Clerk of Court. This move to redeem the property was interposed as a permissive counterclaim in Civil Case No. 15510. However, said case was dismissed after respondent was declared non-suited with the result that petitioners counterclaim was likewise dismissed. Scncm On September 14, 1995, petitioner instituted Civil Case No. C-17055 before the Regional Trial Court in Caloocan City. She alleged that the 30-day period for redemption under Art. 1623 of the Civil Code had not begun to run against her since the vendor, Adela Blas, never informed her and the other owners about the sale to respondent. She learned about the sale only on August 5, 1992, after she received the summons in Civil Case No. 15510, together with the complaint. Ncmmis

Respondent, on the other hand, contended that petitioner knew about the sale as early as May 30, 1992, because, on that date, she wrote petitioner a letter[2] informing the latter about the sale, with a demand that the rentals corresponding to her 1/5 share of the subject property be remitted to her. Said letter was sent with a copy of the Deed of Sale[3] between respondent and Adela Blas. On the same date, letters[4] were likewise sent by respondent to the tenants of the building, namely, Seiko Service Center and Glitters Corporation, informing them of the sale and requesting that, thenceforth, they pay 1/5 of the monthly rentals to respondent. That petitioner received these letters is proved by the fact that on June 8, 1992, she wrote[5] the buildings tenants advising them to disregard respondents request and continue paying full rentals directly to her. Ncm On August 19, 1996, the trial court dismissed petitioners complaint for legal redemption. It ruled that Art. 1623 does not prescribe any particular form of notifying co-owners about a sale of property owned in common to enable them to exercise their right of legal redemption.[6] While no written notice was given by the vendor, Adela Blas, to petitioner or the other owners, petitioner herself admitted that she had received respondents letter of May 30, 1992 and was in fact furnished a copy of the deed evidencing such sale.[7] The trial court considered the letter sent by respondent to petitioner with a copy of the deed of sale as substantial compliance with the required written notice under Art. 1623 of the New Civil Code.[8] Consequently, the 30-day period of redemption should be counted not from August 5, 1992, when petitioner received summons in Civil Case No. 15510, but at the latest, from June 8, 1992, the date petitioner wrote the tenants of the building advising them to continue paying rentals in full to her. Petitioner failed to redeem the property within that period. Petitioner brought the matter to the Court of Appeals, which, on October 26, 1998, affirmed the decision of the Regional Trial Court. She moved for reconsideration, but her motion was denied by the appellate court on February 16, 1999. Hence, this petition. The sole issue presented in this appeal is whether the letter of May 30, 1992 sent by respondent to petitioner notifying her of the sale on August 8, 1986 of Adela Blas 1/5 share of the property to respondent, containing a copy of the deed evidencing such sale, can be considered sufficient as compliance with the notice requirement of Art. 1623 for the purpose of legal redemption. The trial court and the Court of Appeals relied on the ruling in Distrito v. Court of Appeals[9] that Art. 1623 does not prescribe any particular form of written notice, nor any distinctive method for notifying the redemptioner. They also invoked the rulings in De Conejero v. Court of Appeals[10] and Badillo v. Ferrer[11] that furnishing the redemptioner with a copy of the deed of sale is equivalent to giving him the written notice required by law. Oldmiso

On the other hand, petitioner points out that the cited cases are not relevant because the present case does not concern the particular form in which notice must be given. Rather, the issue here is whether a notice sent by the vendee may be given in lieu of that required to be given by the vendor or prospective vendor.[12] Art. 1623 of the Civil Code provides: The right of legal pre-emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or by the vendor, as the case maybe. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners. The right of redemption of co-owners excludes that of adjoining owners. In ruling that the notice given by the vendee was sufficient, the appellate court cited the case of Etcuban v. Court of Appeals[13] in which it was held: Petitioner contends that vendors (his co-heirs) should be the ones to give him written notice and not the vendees (defendants or private respondent herein) citing the case of Butte vs. Manuel Uy & Sons, Inc., 4 SCRA 526. Such contention is of no moment. While it is true that written notice is required by the law (Art. 1623), it is equally true that the same "Art. 1623 does not prescribe any particular form of notice, nor any distinctive method for notifying the redemptioner." So long, therefore, as the latter is informed in writing of the sale and the particulars thereof, the 30 days for redemption start running, and the redemptioner has no real cause to complain. (De Conejero et al v. Court of Appeals, et al., 16 SCRA 775). In the Conejero case, we ruled that the furnishing of a copy of the disputed deed of sale to the redemptioner was equivalent to the giving of written notice required by law in "a more authentic manner than any other writing could have done," and that We cannot adopt a stand of having to sacrifice substance to technicality. More so in the case at bar, where the vendors or co-owners of petitioner stated under oath in the deeds of sale that notice of sale had been given to prospective redemptioners in accordance with Art. 1623 of the Civil Code. "A sworn statement or clause in a deed of sale to the effect that a written notice of sale was given to possible redemptioners or co-owners might be used to determine whether an offer to redeem was made on or out of time, or whether there was substantial compliance with the requirement of said Art. 1623."[14] In Etcuban, notice to the co-owners of the sale of the share of one of them was given by the vendees through their counterclaim in the action for legal redemption. Despite the apparent meaning of Art. 1623, it was held in that case that it was "of no moment" that the notice of sale was given not by the vendor but by the vendees. "So long as the [co-owner] is informed in writing of the sale and the particulars thereof, the 30 days for redemption start running, and the redemptioner has no

cause to complain," so it was held. The contrary doctrine of Butte v. Manuel Uy and Sons, Inc.[15] was thus overruled sub silencio. However, in the later case of Salatandol v. Retes,[16] decided a year after the Etcuban case, the Court expressly affirmed the ruling in Butte that the notice required by Art. 1623 must be given by the vendor. In Salatandol, the notice given to the redemptioner by the Register of Deeds of the province where the subject land was situated was held to be insuffucient. Resolving the issue of whether such notice was equivalent to the notice from the vendor required under Art. 1623, this Court stated: The appeal is impressed with merit. In Butte vs. Manuel Uy and Sons, Inc., the Court ruled that Art. 1623 of the Civil Code clearly and expressly prescribes that the thirty (30) days for making the pre-emption or redemption are to be counted from notice in writing by the vendor. The Court said: " x x x The test of Article 1623 clearly and expressly prescribes that the thirty days for making the redemption are to be counted from notice in writing by the vendor. Under the old law (Civil Code of 1889, Art. 1524), it was immaterial who gave the notice; so long as the redeeming co-owner learned of the alienation in favor of the stranger, the redemption period began to run. It is thus apparent that the Philippine legislature in Article 1623 deliberately selected a particular method of giving notice, and that method must be deemed exclusive (39 Am. Jur., 237; Payne vs. State, 12 S.W. (2d) (528). As ruled in Wampher vs. Lecompte, 150 Atl. 458 (affd. in 75 Law Ed. [U.S.] 275) Why these provisions were inserted in the statute we are not informed, but we may assume until the contrary is shown, that a state of facts in respect thereto existed, which warranted the legislature in so legislating. "The reasons for requiring that the notice should be given by the seller, and not by the buyer, are easily divined. The seller of an undivided interest is in the best position to know who are his co-owners that under the law must be notified of the sale. Also, the notice by the seller removes all doubts as to fact of the sale, its perfection, and its validity, the notice being a reaffirmation thereof; so that that party notified need not entertain doubt that the seller may still contest the alienation. This assurance would not exist if the notice should be given by the buyer." In the case at bar, the plaintiffs have not been furnished any written notice of sale or a copy thereof by Eufemia Omole, the vendor. Said plaintiffs right to exercise the legal right of preemption or redemption, given to a co-owner when any one of the other co-owners sells his share in the thing owned in common to a third person, as provided for in Article 1623 of the Civil Code, has not yet accrued.

There was thus a return to the doctrine laid down in Butte. That ruling is sound. In the first place, reversion to the ruling in Butte is proper. Art. 1623 of the Civil Code is clear in requiring that the written notification should come from the vendor or prospective vendor, not from any other person. There is, therefore, no room for construction. Indeed, the principal difference between Art. 1524 of the former Civil Code and Art. 1623 of the present one is that the former did not specify who must give the notice, whereas the present one expressly says the notice must be given by the vendor. Effect must be given to this change in statutory language. Manikan In the second place, it makes sense to require that the notice required in Art. 1623 be given by the vendor and by nobody else. As explained by this Court through Justice J.B.L. Reyes in Butte, the vendor of an undivided interest is in the best position to know who are his co-owners who under the law must be notified of the sale. It is likewise the notification from the seller, not from anyone else, which can remove all doubts as to the fact of the sale, its perfection, and its validity, for in a contract of sale, the seller is in the best position to confirm whether consent to the essential obligation of selling the property and transferring ownership thereof to the vendee has been given. Maniks Now, it is clear that by not immediately notifying the co-owner, a vendor can delay or even effectively prevent the meaningful exercise of the right of redemption. In the present case, for instance, the sale took place in 1986, but it was kept secret until 1992 when vendee (herein respondent) needed to notify petitioner about the sale to demand 1/5 rentals from the property sold. Compared to serious prejudice to petitioners right of legal redemption, the only adverse effect to vendor Adela Blas and respondent-vendee is that the sale could not be registered. It is non-binding, only insofar as third persons are concerned.[17] It is, therefore, unjust when the subject sale has already been established before both lower courts and now, before this Court, to further delay petitioners exercise of her right of legal redemption by requiring that notice be given by the vendor before petitioner can exercise her right. For this reason, we rule that the receipt by petitioner of summons in Civil Case No. 15510 on August 5, 1992 constitutes actual knowledge on the basis of which petitioner may now exercise her right of redemption within 30 days from finality of this decision. Manikx Our ruling is not without precedent. In Alonzo v. Intermediate Appellate Court,[18] we dispensed with the need for written notification considering that the redemptioners lived on the same lot on which the purchaser lived and were thus deemed to have actual knowledge of the sales. We stated that the 30-day period of redemption started, not from the date of the sales in 1963 and 1964, but sometime between those years and 1976, when the first complaint for redemption was actually filed. For 13 years, however, none of the co-heirs moved to redeem the property. We thus ruled that the right of redemption had already been extinguished because the period for its exercise had already expired. Nexold

In the present case, as previously discussed, receipt by petitioner of summons in Civil Case No. 15510 on August 5, 1992 amounted to actual knowledge of the sale from which the 30-day period of redemption commenced to run. Petitioner had until September 4, 1992 within which to exercise her right of legal redemption, but on August 12, 1992 she deposited the P10,000.00 redemption price. As petitioners exercise of said right was timely, the same should be given effect. Miso WHEREFORE, in view of the foregoing, the petition is GRANTED and the decision of the Court of Appeals is REVERSED and the Regional Trial Court, Branch 122, Caloocan City is ordered to effect petitioners exercise of her right of legal redemption in Civil Case No. C-17055. Sppedjo SO ORDERED.

HIRD DIVISION [G.R. No. 148376. March 31, 2005] LEONARDO ACABAL and RAMON NICOLAS, petitioners, vs. VILLANER ACABAL, EDUARDO ACABAL, SOLOMON ACABAL, GRACE ACABAL, MELBA ACABAL, EVELYN ACABAL, ARMIN ACABAL, RAMIL ACABAL, and BYRON ACABAL, respondents. DECISION CARPIO MORALES, J.: Before this Court is a Petition for Review on Certiorari of the February 15, 2001 Decision[1] of the Court of Appeals reversing that of the Regional Trial Court (RTC) of Dumaguete City, Branch 35.[2] In dispute is the exact nature of the document[3] which respondent Villaner Acabal (Villaner) executed in favor of his godson-nephew-petitioner Leonardo Acabal (Leonardo) on April 19, 1990.

Q: It appears, Mr. Acabal, that you have signed a document of sale with the defendant Leonardo Acabal on April 19, 1990, please tell the court whether you have really agreed to sell this property to the defendant on or before April 19, 1990? A: We had some agreement but not about the selling of this property. Q: What was your agreement with the defendant Leonardo Acabal? A: Our agreement [was] that he will just rent.[14] xxx Q: Now, please tell the court how were you able to sign this document on April 19, 1990? A: I do not know why I signed that, that is why I am puzzled. Q: Why, did you not read the contents of this document?

Villaners parents, Alejandro Acabal and Felicidad Balasabas, owned a parcel of land situated in Barrio Tanglad, Manjuyod, Negros Oriental, containing an area of 18.15 hectares more or less, described in Tax Declaration No. 15856.[4] By a Deed of Absolute Sale dated July 6, 1971,[5] his parents transferred for P2,000.00 ownership of the said land to him, who was then married to Justiniana Lipajan.[6]

A: I have not read that. I only happened to read the title of the Lease Contract. Q: And do you recall who were the witnesses of the document which you signed in favor of Leonardo Acabal?

Sometime after the foregoing transfer, it appears that Villaner became a widower.

A: Employees of Judge Villegas of Bais City.

Subsequently, he executed on April 19, 1990 a deed[7] conveying the same property[8] in favor of Leonardo.

Q: Did you see them sign that document? A: Yes, sir.

Villaner was later to claim that while the April 19, 1990 document he executed now appears to be a Deed of Absolute Sale purportedly witnessed by a Bais City trial court clerk Carmelo Cadalin and his wife Lacorte, what he signed was a document captioned Lease Contract[9] (modeled after a July 1976 lease agreement[10] he had previously executed with previous lessee, Maria Luisa Montenegro[11]) wherein he leased for 3 years the property to Leonardo at P1,000.00 per hectare[12] and which was witnessed by two women employees of one Judge Villegas of Bais City. Villaner thus filed on October 11, 1993 a complaint[13] before the Dumaguete RTC against Leonardo and Ramon Nicolas to whom Leonardo in turn conveyed the property, for annulment of the deeds of sale.

Q: These signatures appearing in this document marked as Exhibit C for the plaintiff and Exhibit 1 for the defendant, please examine over (sic) these signatures if these were the signatures of these witnesses who signed this document? A: These are not the signatures of the two women. Q: And after signing this document on April 19, 1990, did you appear before a notary public to have this notarized? A: No, I went home to San Carlos.[15] xxx

At the witness stand, Villaner declared: Q: According to this document, you sell (sic) this property at P10,000.00, did you sell this property to Leonardo Acabal?

A: No, sir.

A: What really (sic) I have signed was the document of lease contract.

Q: How about after April 19, 1990, did you receive this amount from Leonardo Acabal?

Q: Now, can you explain to the Honorable Court why it so happened that on April 19, you were able to sign a deed of sale?

A: No, sir.[16]

A: What I can see now is that perhaps those copies of the deed of sale were placed by Mr. Cadalin under the documents which I signed the lease contract. But why is it that it has already a deed of sale when what I have signed was only the lease of contract or the contract of lease.

xxx Q: Now you said that on May 25, 1990, Leonardo Acabal did not pay the amount that he promised to you, what did you do of (sic) his refusal to pay that amount? A: I went to Mr. [Carmelo] Mellie Cadalin because he was the one who prepared the papers and to ask Leonardo Acabal why he will not comply with our agreement. Q: By the way, who is this Mellie Cadalin? A: Mellie Cadalin is also working in the sala of Judge Villegas.

Q: Now, Mr. Cadalin also stated before this court that he handed over to you this Deed of Sale marked as Exhibit C and according to him you read this document, what can you say to this statement? A: Yes, there was a document that he gave me to read it (sic)but it was a contract of lease. Q: How sure are you that what you signed on April 19, 1990 was really a contract of lease and not a contract of sale?

Q: Who requested Mellie Cadalin to prepare this document? A: Maybe it was Leonardo Acabal. Q: By the way, when for the first time did you talk to Leonardo Acabal regarding your agreement to lease this property to him? A: March 14, 1990, in San Carlos. Q: And what document did you give to him in order that that document will be prepared?

A: Because when I signed the contract of lease the witnesses that witnessed my signing the document were the employees of Judge Villegas and then I am now surprised why in the deed of sale which I purportedly signed are witnessed by Carmelo Cadalin and his wife Lacorte.[18] (Emphasis and underscoring supplied) On the other hand, Leonardo asserts that what Villaner executed was a Deed of Absolute Sale for a consideration of P10,000.00 which he had already paid,[19] and as he had become the absolute owner of the property, he validly transferred it to Ramon Nicolas on May 19, 1990.[20]

A: I have given (sic) some papers and contract of lease that I have signed to (sic) Mrs. Montenegro.[17] (Emphasis and underscoring supplied)

Carmelo Cadalin who admittedly prepared the deed of absolute sale and who appears as a witness, along with his wife, to the execution of the document corroborated Leonardos claim:

xxx

Q: Mr. Cadalin, do you know the plaintiff Villaner Acabal?

Q: Now, Carmelo Cadalin [Mellie] also testified before this court that in fact he identified the document marked as Exhibit C for the plaintiff that what you executed on April 19, 1990 was a deed of sale and not a contract of lease, what can you say to that statement?

A: Yes, I know.[21] xxx Q: And I would like to ask you Mr. witness why do you know Villaner Acabal?

A: That is a lie. Q: And whats the truth then?

A: At the time that he went to our house together with Leonardo Acabal he requested me to prepare a deed of sale as regards to a sale of the property.[22]

xxx

Q: After Villaner Acabal signed the document, what did Villaner Acabal do?

Q: And after they requested you to prepare a document of sale, what did you do?

A: He was given the payment by Leonardo Acabal.[25]

A: At first I refused to [do] it because I have so many works to do, but then they insisted so I prepared the deed.

xxx

Q: After you prepared the document, what did you do?

Q: Aside from the document, deed of absolute sale, that you mentioned earlier that you prepared for Villaner Acabal and Leonardo Acabal, what other documents, if any, did you prepare for them?

A: After I prepared it I gave it to him so that he could read the same. Q: When you say him, whom do you refer to? A: Villaner Acabal.

A: Affidavit of non-tenancy and aggregate area.[26] (Emphasis and underscoring supplied) The complaint was later amended[27] to implead Villaners eight children as party plaintiffs, they being heirs of his deceased wife.

Q: And did Villaner Acabal read the document you prepared? A: Yes, he read it.

By Decision of August 8, 1996, the trial court found for the therein defendantsherein petitioners Leonardo and Ramon Nicolas and accordingly dismissed the complaint.

Q: And after reading it what did Villaner Acabal do? A: He signed the document.

Villaner et al. thereupon brought the case on appeal to the Court of Appeals which reversed the trial court, it holding that the Deed of Absolute Sale executed by Villaner in favor of Leonardo was simulated and fictitious.[28]

Q: Showing to you a document which is marked Exhibit C for the plaintiff and Exhibit 1 for the defendants, please tell the Honorable Court what relation this document has to the document which you described earlier?

Hence, Leonardo and Ramon Nicolas present petition for review on certiorari,[29] anchored on the following assignments of error:

COURT INTERPRETER:

I.

Witness is confronted with the said document earlier marked as Exhibit C for the prosecution and Exhibit 1 for the defense.

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT RESPONDENT VILLANER ACABAL WAS DECEIVED INTO SIGNING THE DEED OF ABSOLUTE SALE WHEN THE LATTER KNOWINGLY, FREELY AND VOLUNTARILY EXECUTED THE SAME IN FAVOR OF PETITIONER LEONARDO ACABAL.

A: Yes, this is the one.[23] xxx

II. Q: Also stated in the document is the phrase Signed in the presence of and there is a number and then two signatures, could you please examine the document and say whether these signatures are familiar to you? A: Yes, number one is my signature and number 2 is the signature of my wife as witness.[24]

THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE CONSIDERATION OF THE DEED OF ABSOLUTE SALE IN THE AMOUNT OF TEN THOUSAND PESOS (P10,0000.00) WAS UNUSUALLY LOW AND INADEQUATE, ESPECIALLY TAKING INTO ACCOUNT THE LOCATION OF THE SUBJECT PROPERTY. III.

xxx

THE COURT OF APPEALS ERRED WHEN IT FAILED TO CONSIDER WHY RESPONDENT VILLANER ACABAL ONLY QUESTIONED THE POSSESSION AND OWNERSHIP OF PETITIONER RAMON NICOLAS IN COURT AFTER THE LATTER WAS IN OPEN, CONTINUOUS AND PEACEFUL POSSESSION OF THE SUBJECT PROPERTY FOR ALMOST THREE (3) YEARS. IV. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT FAILED TO DECLARE PETITIONER RAMON NICOLAS AS A BUYER IN GOOD FAITH AS THE LATTER TOOK THE NECESSARY STEPS AN ORDINARY AND PRUDENT MAN WOULD HAVE TAKEN BEFORE BUYING THE QUESTIONED PROPERTY.

On the merits, this Court rules in petitioners favor. It is a basic rule in evidence that the burden of proof lies on the party who makes the allegations[32] ei incumbit probatio, qui dicit, non qui negat; cum per rerum naturam factum negantis probatio nulla sit.[33] If he claims a right granted by law, he must prove it by competent evidence, relying on the strength of his own evidence and not upon the weakness of that of his opponent. More specifically, allegations of a defect in or lack of valid consent to a contract by reason of fraud or undue influence are never presumed but must be established not by mere preponderance of evidence but by clear and convincing evidence.[34] For the circumstances evidencing fraud and misrepresentation are as varied as the people who perpetrate it in each case, assuming different shapes and forms and may be committed in as many different ways.[35]

V. THE COURT OF APPEALS ERRED IN RULING IN FAVOR OF RESPONDENT VILLANER ACABAL WHEN THE LATTER DID NOT PRESENT A SINGLE WITNESS TO TESTIFY ON THE ALLEGED CONTRACT OF LEASE WHICH HE ALLEGEDLY SIGNED AND WITNESSED BY THE EMPLOYEES OF JUDGE VILLEGAS.

In the case at bar, it was incumbent on the plaintiff-herein respondent Villaner to prove that he was deceived into executing the Deed of Absolute Sale. Except for his bare allegation that the transaction was one of lease, he failed to adduce evidence in support thereof. His conjecture that perhaps those copies of the deed of sale were placed by Mr. Cadalin under the documents which I signed the contract of lease,[36] must fail, for facts not conjectures decide cases.

VI. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT RULED THAT RULE 8, SECTION 8 OF THE 1987 (sic) RULE (sic) OF CIVIL PROCEDURE IS NOT APPLICABLE IN THE CASE AT BAR, CONTRARY TO THE RULING OF THE LOWER COURT. VII. THE COURT OF APPEALS ERRED WHEN IT ORDERED PETITIONERS TO PAY RESPONDENTS JOINTLY AND SEVERALLY BY WAY OF RENTAL THE SUM OF P10,000.00 PER YEAR FROM 1990 UP TO THE TIME THEY VACATE THE PREMISES.[30] Procedurally, petitioners contend that the Court of Appeals erred when it failed to apply Section 8, Rule 8 of the Rules of Court, respondent Villaner having failed to deny under oath the genuineness and due execution of the April 19, 1990 Deed of Absolute Sale. Petitioners contention does not persuade. The failure to deny the genuineness and due execution of an actionable document does not preclude a party from arguing against it by evidence of fraud, mistake, compromise, payment, statute of limitations, estoppel, and want of consideration.[31]

Attempting to seek corroboration of his account, Villaner presented Atty. Vicente Real who notarized the document. While on direct examination, Atty. Real virtually corroborated Villaners claim that he did not bring the document to him for notarization,[37] on cross-examination, Atty. Real conceded that it was impossible to remember every person who would ask him to notarize documents: Q: And in the course of your notarization, can you remember each and every face that come (sic) to you for notarization? A: No, it is impossible. Q: In the case of Villaner Acabal which you have his document notarized (sic) in 1990, can you remember his face when he came to you? A: No. Q: And can you also say, if a person who came to you having a document to be notarized and if he will appear again after a month, can you remember whether he was the one who came to you? A: Not so much because everyday there are many people who appear with documents to be notarized,

Q: So, it is safe to say that if Villaner Acabal came to you on April 25 or rather April 16, 1990 andhave (sic) his document notarized if he comes back in, say May 25, can you still remember if he was the one who came to you? A: I cannot be sure but at least, there are times I can remember persons because he seems to be close to me already.

d) no part of the land in question is plain or flat, contrary to claim of the plaintiff that almost 10 hectares of the land in question is plain or flat; e) some areas, eastward of and adjacent of the land in question (mistakenly to be owned by the defendant Nicolas) were planted to sugar cane by the owners Kadusales;

Q: Is this Villaner close to you? A: Because he has been frequenting the house/asking for a copy of the document. Q: So, he became close to you after you notarized the document? A: Yes.[38] (Emphasis and underscoring supplied) On Villaners claim that two women employees of Judge Villegas signed as witnesses to the deed[39] but that the signatures appearing thereon are not those of said witnesses,[40] the same must be discredited in light of his unexplained failure to present such alleged women employee-witnesses. In another vein, Villaner zeroes in on the purchase price of the property P10,000.00 which to him was unusually low if the transaction were one of sale. To substantiate his claim, Villaner presented Tax Declarations covering the property for the years 1971,[41] 1974,[42] 1977,[43] 1980,[44] 1983,[45] 1985,[46] as well as a Declaration of Real Property executed in 1994.[47] It bears noting, however, that Villaner failed to present evidence on the fair market value of the property as of April 19, 1990, the date of execution of the disputed deed. Absent any evidence of the fair market value of a land as of the time of its sale, it cannot be concluded that the price at which it was sold was inadequate.[48] Inadequacy of price must be proven because mere speculation or conjecture has no place in our judicial system.[49] Victor Ragay, who was appointed by the trial court to conduct an ocular inspection[50] of the property and to investigate matters relative to the case,[51] gave an instructive report dated December 3, 1994,[52] the pertinent portions of which are hereby reproduced verbatim: a) Only three (3) to four (4) hectares of the eighteen (18) were planted to sugar cane, the rest was never cultivated; b) the soil is reddish and somewhat sandy in composition; c) the soil contains so much limestones (rocks consisting mainly of calcium carbonate);

f) the road going to the land in question (as claimed to be the road) is no longer passable because it has been abandoned and not maintained by anyone, thus it makes everything impossible for anybody to get and haul the sugar cane from the area; g) the Commissioner has discovered some stockpiles of abandoned harvested sugar canes left to rot, along the side of the road, undelivered to the milling site because of the difficulty in bringing up trucks to the scene of the harvest; h) the sugarcanes presently planted on the land in question at the time of the ocular inspection were three (3) feet in height and their structural built was thin or lean; i) Most of the part of the 18 hectares is not planted or cultivated because the same is too rocky and not suitable for planting to sugarcane.[53] Additionally, Ragay reported that one Anatolio Cabusog recently purchased a 6hectare property adjoining that of the subject property for only P1,600.00[54] or P266.67 per hectare. Given that, had the 18-hectare subject property been sold at about the same time, it would have fetched the amount of P4,800.00,[55] hence, the P10,000.00 purchase price appearing in the questioned April 19, 1990 document is more than reasonable. Even, however, on the assumption that the price of P10,000.00 was below the fair market value of the property in 1990, mere inadequacy of the price per se will not rule out the transaction as one of sale. For the price must be grossly inadequate or shocking to the conscience such that the mind revolts at it and such that a reasonable man would neither directly nor indirectly be likely to consent to it.[56] Still in another vein, Villaner submits that Leonardos transfer of the property to Nicolas in a span of one month for a profit of P30,000.00 conclusively reflects Leonardos fraudulent intent. This submission is a non sequitur. As for Villaners argument that the sale of the property to Leonardo and the subsequent sale thereof to Nicolas are void for being violative of the retention limits imposed by Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law, the same fails. The pertinent provisions of said law read:

SECTION 6. Retention Limits. Except as otherwise provided in this Act, no person may retain, directly or indirectly, any public or agricultural land, the size of which may vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is tilling the land or directly managing the farm: Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the areas originally retained by them thereunder:[57] Provided further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead. xxx Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of private lands executed by the original landowner in violation of this Act shall be null and void: Provided, however, that those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the DAR within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares. xxx SECTION 70. Disposition of Private Agricultural Lands. The sale or disposition of agricultural lands retained by a land owner as a consequence of Section 6 hereof shall be valid as long as the total landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not exceed the landholding ceilings provided for in this Act. Any sale or disposition of agricultural lands after the effectivity of this Act found to be contrary to the provisions hereof shall be null and void. Transferees of agricultural lands shall furnish the appropriate Register of Deeds and the BARC an affidavit attesting that his total landholdings as a result of the said acquisition do not exceed the landholding ceiling. The Register of Deeds shall not register the transfer of any agricultural land without the submission of his sworn statement together with proof of service of a copy thereof to the BARC. (Emphasis and underscoring supplied)

As the above-quoted provisions of the Comprehensive Agrarian Reform Law show, only those private lands devoted to or suitable for agriculture are covered by it.[58] As priorly related, Victor Ragay, who was appointed by the trial court to conduct an ocular inspection of the property, observed in his report that only three (3) to four (4) hectares were planted with sugarcane while the rest of the property was not suitable for planting as the soil was full of limestone.[59] He also remarked that the sugarcanes were only 3 feet in height and very lean,[60] whereas sugarcanes usually grow to a height of 3 to 6 meters (about 8 to 20 feet) and have stems 2 to 5 centimeters (1-2 inches) thick.[61] It is thus gathered that the property was not suitable for agricultural purposes. In any event, since the area devoted to the planting of sugarcane, hence, suitable for agricultural purposes, comprises only 4 hectares at the most, it is less than the maximum retention limit prescribed by law. There was then no violation of the Comprehensive Agrarian Reform Law. Even assuming that the disposition of the property by Villaner was contrary to law, he would still have no remedy under the law as he and Leonardo were in pari delicto, hence, he is not entitled to afirmative relief one who seeks equity and justice must come to court with clean hands. In pari delicto potior est conditio defendentis.[62] The proposition is universal that no action arises, in equity or at law, from an illegal contract; no suit can be maintained for its specific performance, or to recover the property agreed to be sold or delivered, or the money agreed to be paid, or damages for its violation. The rule has sometimes been laid down as though it were equally universal, that where the parties are in pari delicto, no affirmative relief of any kind will be given to one against the other.[63] (Emphasis and underscoring supplied) The principle of pari delicto is grounded on two premises: first, that courts should not lend their good offices to mediating disputes among wrongdoers;[64] and second, that denying judicial relief to an admitted wrongdoer is an effective means of deterring illegality.[65] This doctrine of ancient vintage is not a principle of justice but one of policy as articulated in 1775 by Lord Mansfield in Holman v. Johnson:[66] The objection, that a contract is immoral or illegal as between the plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. The principle of public policy is this; ex dolo malo non oritur actio.[67] No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi

causa,[68] or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and the defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault potior est conditio defendentis.[69] Thus, to serve as both a sanction and as a deterrent, the law will not aid either party to an illegal agreement and will leave them where it finds them. The principle of pari delicto, however, is not absolute, admitting an exception under Article 1416 of the Civil Code. ART. 1416. When the agreement is not illegal per se but is merely prohibited, and the prohibition by the law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered. Under this article, recovery for what has been paid or delivered pursuant to an inexistent contract is allowed only when the following requisites are met: (1) the contract is not illegal per se but merely prohibited; (2) the prohibition is for the protection of the plaintiffs; and (3) if public policy is enhanced thereby.[70] The exception is unavailing in the instant case, however, since the prohibition is clearly not for the protection of the plaintiff-landowner but for the beneficiary farmers.[71] In fine, Villaner is estopped from assailing and annulling his own deliberate acts.[72] More. Villaner cannot feign ignorance of the law, nor claim that he acted in good faith, let alone assert that he is less guilty than Leonardo. Under Article 3 of the Civil Code, ignorance of the law excuses no one from compliance therewith. And now, Villaners co-heirs claim that as co-owners of the property, the Deed of Absolute Sale executed by Villaner in favor of Leonardo does not bind them as they did not consent to such an undertaking. There is no question that the property is conjugal. Article 160 of the Civil Code[73] provides: ART. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife.[74] The presumption, this Court has held, applies to all properties acquired during marriage. For the presumption to be invoked, therefore, the property must be shown to have been acquired during the marriage.[75]

In the case at bar, the property was acquired on July 6, 1971 during Villaners marriage with Justiniana Lipajan. It cannot be seriously contended that simply because the tax declarations covering the property was solely in the name of Villaner it is his personal and exclusive property. In Bucoy v. Paulino[76] and Mendoza v. Reyes[77] which both apply by analogy, this Court held that registration alone of the properties in the name of the husband does not destroy the conjugal nature of the properties.[78] What is material is the time when the land was acquired by Villaner, and that was during the lawful existence of his marriage to Justiniana. Since the property was acquired during the existence of the marriage of Villaner and Justiniana, the presumption under Article 160 of the Civil Code is that it is the couples conjugal property. The burden is on petitioners then to prove that it is not. This they failed to do. The property being conjugal, upon the death of Justiniana Lipajan, the conjugal partnership was terminated.[79] With the dissolution of the conjugal partnership, Villaners interest in the conjugal partnership became actual and vested with respect to an undivided one-half portion.[80] Justiniana's rights to the other half, in turn, vested upon her death to her heirs[81] including Villaner who is entitled to the same share as that of each of their eight legitimate children.[82] As a result then of the death of Justiniana, a regime of co-ownership arose between Villaner and his co-heirs in relation to the property.[83] With respect to Justinianas one-half share in the conjugal partnership which her heirs inherited, applying the provisions on the law of succession, her eight children and Villaner each receives one-ninth (1/9) thereof. Having inherited one-ninth (1/9) of his wifes share in the conjugal partnership or one eighteenth (1/18)[84] of the entire conjugal partnership and is himself already the owner of one half (1/2) or nine-eighteenths (9/18), Villaners total interest amounts to ten-eighteenths (10/18) or five-ninths (5/9). While Villaner owns five-ninths (5/9) of the disputed property, he could not claim title to any definite portion of the community property until its actual partition by agreement or judicial decree. Prior to partition, all that he has is an ideal or abstract quota or proportionate share in the property.[85] Villaner, however, as a co-owner of the property has the right to sell his undivided share thereof. The Civil Code provides so: ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to

the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

and possessors in joint ownership of the common property claimed.[90] (Italics in the original; citations omitted; underscoring supplied)

Thus, every co-owner has absolute ownership of his undivided interest in the coowned property and is free to alienate, assign or mortgage his interest except as to purely personal rights. While a co-owner has the right to freely sell and dispose of his undivided interest, nevertheless, as a co-owner, he cannot alienate the shares of his other co-owners nemo dat qui non habet.[86]

This Court is not unmindful of its ruling in Cruz v. Leis[91] where it held: It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share in the property owned in common. Article 493 of the Civil Code provides: xxx

Villaner, however, sold the entire property without obtaining the consent of the other co-owners. Following the well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so quando res non valet ut ago, valeat quantum valere potest[87] the disposition affects only Villaners share pro indiviso, and the transferee gets only what corresponds to his grantors share in the partition of the property owned in common.[88] As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale. This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to this grantor in the partition of the thing owned in common. Consequently, by virtue of the sales made by Rosalia and Gaudencio Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a coowner of the disputed parcel of land as correctly held by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof. From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void. However, only the rights of the coowner-seller are transferred., thereby making the buyer a co-owner of the property. The proper action in cases like this is not for the nullification of the sale or the recovery of possession of the thing owned in common from the third person who substituted the co-owner or co-owners who alienated their shares, but the DIVISION of the common property as if it continued to remain in the possession of the co-owners who possessed and administered it.[89] Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court. Neither recovery of possession nor restitution can be granted since the defendant buyers are legitimate proprietors

Unfortunately for private respondents, however, the property was registered in TCT No. 43100 solely in the name of Gertrudes Isidro, widow. Where a parcel of land, forming part of the undistributed properties of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who merely relied on the face of the certificate of title thereto, issued solely in the name of the widow, the purchaser acquires a valid title to the land even as against the heirs of the deceased spouse. The rationale for this rule is that a person dealing with registered land is not required to go behind the register to determine the condition of the property. He is only charged with notice of the burdens on the property which are noted on the face of the register or the certificate of title. To require him to do more is to defeat one of the primary objects of the Torrens system.[92] (Citation omitted) Cruz, however, is not applicable for the simple reason that in the case at bar the property in dispute is unregistered. The issue of good faith or bad faith of a buyer is relevant only where the subject of the sale is a registered land but not where the property is an unregistered land.[93] One who purchases an unregistered land does so at his peril.[94] Nicolas claim of having bought the land in good faith is thus irrelevant.[95] WHEREFORE, the petition is GRANTED. The Court of Appeals February 15, 2001 Decision in CA-G.R. CV No. 56148 is REVERSED and SET ASIDE and another is rendered declaring the sale in favor of petitioner Leonardo Acabal and the subsequent sale in favor of petitioner Ramon Nicolas valid but only insofar as fiveninths (5/9) of the subject property is concerned. No pronouncement as to costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 187987

November 26, 2014

VICENTE TORRES, JR., CARLOS VELEZ, AND THE HEIRS OF MARIANO VELEZ, NAMELY: ANITA CHIONG VELEZ, ROBERT OSCAR CHIONG VELEZ, SARAH JEAN CHIONG VELEZ AND TED CHIONG VELEZ, Petitioners, vs. LORENZO LAPINID AND JESUS VELEZ, Respondents. DECISION PEREZ, J.: This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court filed by the petitioners assailing the 30 January 2009 Decision2 and 14 May 2009 Resolution3 of the Twentieth Division of the Corni of Appeals in CA-G.R. CV No. 02390, affirming the 15 October 2007 Decision4 of the Regional Trial Court of Cebu City (RTC Cebu City) which dismissed the complaint for the declaration of nullity of deed of sale against respondent Lorenzo Lapinid (Lapinid). The facts as reviewed are the following: On 4 February 2006, Vicente V. Torres, Jr. (Vicente), Mariano Velez (Mariano)5 and Carlos Velez (petitioners) filed a Complaint6 before RTC Cebu City praying for the nullification of the sale of real property by respondent Jesus Velez (Jesus) in favor of Lapinid; the recovery of possession and ownership of the property; and the payment of damages. Petitioners alleged in their complaint that they, including Jesus, are co-owners of several parcels of land including the disputed Lot. No. 43897 located at Cogon, Carcar, Cebu. Sometime in 1993, Jesus filed an action for partition of the parcels of land against the petitioners and other co-owners before Branch 21 of RTC Cebu City. On 13 August 2001, a judgment was rendered based on a compromise agreement signed by the parties wherein they agreed that Jesus, Mariano and Vicente were jointly authorized to sell the said properties and receive the proceeds thereof and distribute them to all the co-owners. However, the agreement was later amended to exclude Jesus as an authorized seller. Pursuant totheir mandate, the petitioners inspected the property and discovered that Lapinid was occupying a specific portion of the 3000 square meters of Lot No. 4389 by virtue of a deed of

sale executed by Jesus in favor of Lapinid. It was pointed out by petitioner that as a consequence of what they discovered, a forcible entry case was filed against Lapinid. The petitioners prayed that the deed of sale be declared null and void arguing that the sale of a definite portion of a co-owned property without notice to the other coowners is without force and effect. Further, the complainants prayed for payment of rental fees amounting to ₱1,000.00 per month from January 2004 or from the time of deprivation of property in addition to attorney’s fees and litigation expenses. Answering the allegations, Jesus admitted that there was a partition case between him and the petitioners filed in 1993 involvingseveral parcels of land including the contested Lot No. 4389. However, he insisted that as early as 6 November 1997, a motion 8 was signed by the co-owners (including the petitioners) wherein Lot No. 4389 was agreed to be adjudicated to the co-owners belonging to the group of Jesus and the other lots be divided to the other co-owners belonging to the group of Torres. Jesus further alleged that even prior to the partition and motion, several coowners in his group had already sold their shares to him in various dates of 1985, 1990 and 2004.9 Thus, when the motion was filed and signed by the parties on 6 November 1997, his rights asa majority co-owner (73%) of Lot No. 4389 became consolidated. Jesus averred that it was unnecessary to give notice of the sale as the lot was already adjudicated in his favor. He clarified that he only agreed with the 2001 Compromise Agreement believing that it only pertained to the remaining parcels of land excluding Lot No. 4389.10 On his part, Lapinid admitted that a deed of sale was entered into between him and Jesus pertaining to a parcel of land with an area of 3000 square meters. However, he insistedon the validity of sale since Jesus showed him several deeds of sale making him a majority owner of Lot No. 4389. He further denied that he acquired a specific and definite portion of the questioned property, citing as evidence the deed of sale which does not mention any boundaries or specific portion. He explained that Jesus permitted him to occupy a portion notexceeding 3000 square meters conditioned on the result of the partition of the co-owners.11 Regarding the forcible entry case, Jesus and Lapinid admitted that such case was filed but the same was already dismissed by the Municipal Trial Court of Carcar, Cebu. In that decision, it was ruled that the buyers, including Lapinid, were buyers in good faith since a proof of ownership was shown to them by Jesus before buying the property.12 On 15 October 2007, the trial court dismissed the complaint of petitioners in this wise: Therefore, the Court DISMISSES the Complaint. At the same time, the Court NULLIFIES the site assignment made by Jesus Velez in the Deed of Sale, dated November 9, 1997, of Lorenzo Lapinid’s portion, the exact location of which still

has to be determined either by agreement of the co-owners or by the Court in proper proceedings.13 Aggrieved, petitioners filed their partial motion for reconsideration which was denied through a 26 November 2007 Order of the court.14 Thereafter, they filed a notice of appeal on 10 December 2007.15 On 30 January 2009, the Court of Appeals affirmed16 the decision of the trial court. It validated the sale and ruled that the compromise agreement did not affect the validity of the sale previously executed by Jesus and Lapinid. It likewise dismissed the claim for rental payments, attorney’s fees and litigation expenses of the petitioners. Upon appeal before this Court, the petitioners echo the same arguments posited before the lower courts. They argue that Lapinid, as the successor-in-interest of Jesus, is also bound by the 2001 judgment based on compromise stating that the parcels of land must be sold jointly by Jesus, Mariano and Vicente and the proceeds of the sale be divided among the coowners. To further strengthen their contention, they advance the argument that since the portion sold was a definite and specific portion of a co-owned property, the entire deed of sale must be declared null and void.

In this case, Jesus can validly alienate his co-owned property in favor of Lapinid, free from any opposition from the co-owners. Lapinid, as a transferee, validly obtained the same rights of Jesus from the date of the execution of a valid sale. Absent any proof that the sale was not perfected, the validity of sale subsists. In essence, Lapinid steps into the shoes of Jesus as co-owner of an ideal and proportionate share in the property held in common.20 Thus, from the perfection of contract on 9 November 1997, Lapinid eventually became a co-owner of the property. Even assuming that the petitioners are correct in their allegation that the disposition in favor of Lapinid before partition was a concrete or definite portion, the validity of sale still prevails. In a catena of decisions,21 the Supreme Court had repeatedly held that no individual can claim title to a definite or concrete portion before partition of coowned property. Each co-owner only possesses a right to sell or alienate his ideal share after partition. However, in case he disposes his share before partition, such disposition does not make the sale or alienation null and void. What will be affected on the sale is only his proportionate share, subject to the results of the partition. The co-owners who did not give their consent to the sale stand to be unaffected by the alienation.22

We deny the petition. As explained in Spouses Del Campo v. Court of Appeals:23 Admittedly, Jesus sold an area ofland to Lapinid on 9 November 1997. To simplify, the question now iswhether Jesus, as a co-owner, can validly sell a portion of the property heco-owns in favor of another person. We answer in the affirmative. A co-owner has an absolute ownership of his undivided and proindiviso share in the co-owned property.17 He has the right to alienate, assign and mortgage it, even to the extent of substituting a third person in its enjoyment provided that no personal rightswill be affected. This is evident from the provision of the Civil Code: Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. A co-owner 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.18 Hence, his co-owners have no right to enjoin a coowner who intends to alienate or substitute his abstract portion or substitute a third person in its enjoyment.19

We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the coowners. However, this should not signify that the vendee does not acquire anything atall in case a physically segregated area of the co-owned lot is in fact sold to him. Since the coowner/vendor’s undivided interest could properly be the object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale are the same rights as the vendor had asco-owner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common.24 Also worth noting is the pronouncement in Lopez v. Vda. De Cuaycong:25 x x x The fact that the agreement in question purported to sell a concrete portionof the hacienda does not render the sale void, for it is a wellestablished principle that the binding force of a contract must be recognized as far as it is legally possible to do so. "Quando res non valet ut ago, valeat quantumvalere potest." (When a thing is of no force as I do it, it shall have as much force as it can have).26 (Italics theirs).

Consequently, whether the disposition involves an abstract or concrete portion of the co-owned property, the sale remains validly executed. The validity of sale being settled,it follows that the subsequent compromise agreement between the other co-owners did not affect the rights of Lapinid as a coowner. Records show that on 13 August 2001, a judgment based on compromise agreement was rendered with regard to the previous partition case involving the same parties pertaining to several parcels of land, including the disputed lot. The words of the compromise state that: COME NOW[,] the parties and to this Honorable Court, most respectfully state that instead of partitioning the properties, subject matter of litigation, that they will just sell the properties covered by TCT Nos. 25796, 25797 and 25798 of the Register of Deeds of the Province of Cebu and divide the proceeds among themselves. That Jesus Velez, Mariano Velez and Vicente Torres, Jr. are currently authorized to sell said properties, receive the proceeds thereof and distribute them to the parties.27 Be that as it may, the compromise agreement failed to defeat the already accrued right of ownership of Lapinid over the share sold by Jesus. As early as 9 November 1997, Lapinid already became a co-owner of the property and thus, vested with all the rights enjoyed by the other co-owners. The judgment based on the compromise agreement, which is to have the covered properties sold, is valid and effectual provided as it does not affect the proportionate share of the non-consenting party. Accordingly, when the compromise agreement was executed without Lapinid’s consent, said agreement could not have affected his ideal and undivided share. Petitioners cannot sell Lapinid’s share absent his consent. Nemo dat quod non habet – "no one can give what he does not have."28 This Court has ruled in many cases that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent tothe sale. This is because the sale or other disposition of a co-owner affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in common.29

Art. 486. Each co-owner may use the thing owned in common, provided he does so in accordance with the purpose for which it is intended and in such a way as not to injure the interest of the co-ownership or prevent the other co-owners from using it according to their rights. The purpose of the co-ownership may be changed by agreement, express or implied. Art. 493. Each co-owner shall havethe full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it and even substitute another person in its enjoyment, except when personal rightsare involved. But the effect of the alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Affirming these rights, the Court held in Aguilar v. Court of Appeals that:30 x x x Each co-owner of property heldpro indivisoexercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his co-owners, the reason being that until a division is made, the respective share of each cannot be determined and every coownerexercises, together with his coparticipants joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same.31 From the foregoing, it is absurd to rule that Lapinid, who is already a co-owner, be ordered to pay rental payments to his other co-owners. Lapinid’s right of enjoyment over the property owned in common must be respected despite opposition and may notbe limited as long he uses the property to the purpose for which it isintended and he does not injure the interest of the co-ownership. Finally, we find no error on denial of attorney’s fees and litigation expenses. Pursuant to Article 2208 of the New Civil Code, attorney’s fees and expenses of litigation, in the absence of stipulation, are awarded only in the following instances: xxxx 1. When exemplary damages are awarded;

We find unacceptable the argument that Lapinid must pay rental payments to the other co-owners.1âwphi1

2. When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interests;

As previously discussed, Lapinid,from the execution of sale, became a co-owner vested with rights to enjoy the property held in common.

3. In criminal cases of malicious prosecution against the plaintiff; 4. In case of a clearly unfounded civil action or proceeding against the plaintiff;

Clearly specified in the Civil Code are the following rights:

5. Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid and demandable claim; 6. In actions for legal support; 7. In actions for the recovery of wages of household helpers, laborers and skilled workers; 8. In actions for indemnity under workmen's compensation and employer's liability laws; 9. In a separate civil action to recover civil liability arising from a cnme; 10. When at least double judicial costs arc awarded; 11. In any other case where the court deems it just and equitable that attorney's fees and expenses oflitigation should be recovered. In all cases, the attorney's fees and expenses of litigation must be reasonable. Petitioners cite Jesus' act of selling a definite portion to Lapinid as the reason which forced them to litigate and file their complaint. However, though the Court may not fault the complainants when they filed a complaint based on their perceived cause of action, they should have also considered thoroughly that it is well within the rights of a co-owner to validly sell his ideal share pursuant to law and jurisprudence. WHEREFORE, the petition is DENIED. Accordingly, the Decision and Resolution of the Court of Appeals dated 30 January 2009 and 14 May 2009 are hereby AFFIRMED. SO ORDERED.

THIRD DIVISION [G.R. No. 102037. July 17, 1996]

entitled to one-half share in the proceeds of the sale of subdivision lots in the said lots.

MELANIO IMPERIAL, petitioner, vs. HON. COURT OF APPEALS and GUILLERMO SOLLEZA, ET AL., respondents. DECISION PANGANIBAN, J.:

On May 4, 1985, defendant Melanio sold lot No. 1052 covered by OCT No. 27941 in favor of spouses Efren Rosas and Leticia Cabisuelas (Exh. B-1 and H) for the sum of P20,000.00. The sale was discovered by plaintiff Rosa Solleza, when she paid the realty taxes for the two parcels of land at the Lucban Treasure's Office. Rosa Solleza wanted to confront defendant Melanio Imperial relative to the sale but could not find the latter. Attempts were made to amicably settle the problem between uncle and nephews and nieces, but to no avail. Thus, plaintiffs filled this case, wherein they prayed that inasmuch as lot No. 1052 had been sold by defendant Melanio without giving any share of the proceeds, to Adela Imperial, lot No. 1091 should be reconveyed or returned to Adela and/or the estate of Adela Imperial."

Where an heir who owns one-half undivided share of the area of two lots sells one of the lots without giving to his co-heir the latter's share of the proceeds, may the latter lay exclusive claim to the remaining lot as his own? This Court answers the question in resolving the instant petition, which seeks to set aside the Decision[1] in CA-G.R. CV No. 22557 promulgated September 13, 1990 by the respondent Court,[2] reversing/modifying the judgment of the trial court.

After trial on the merits, the Regional Trial Court of Lucena City, Branch 60[3], rendered its decision, the dispositive portion of which reads:

The Antecedent Facts "IN VIEW OF THE FOREGOING, judgment is hereby rendered: The facts as found by the respondent Court are as follows: "x x x Lot No. 1052, with an area of 4,630 square meters; and Lot No. 1091, with an area of 4,633 square meters both situated in Barangay Culapi, Lucban, Quezon, were originally owned by Maria Cuvinar Imperial who died on June 12, 1979. Maria Cuvinar Imperial was survived by her two children: Adela and defendant, Melanio. Adela died on May 4, 1986 and is survived by plaintiffs Guillermo Solleza, the husband, and Children Ernesto, Rosa (,) Victoria, Virgilio and Guillermo, Jr., all surnamed Solleza.

(a) Ordering Melanio Imperial to pay the plaintiffs the sum of P10,000.00 plus 16% interest thereon commencing on May 4, 1985 until fully paid; (b) Ordering Melanio Imperial to pay the plaintiffs the sum of P7,500.00 attorney's fee and litigation expenses; (c) Ordering Melanio Imperial to pay the plaintiff(s) the sum of P5,000.00 as exemplary damages; and

On May 1, 1979, Adela and defendant Melanio agreed to register lots No. 1091 and 1052 in the name of Melanio in order to expedite the titling of the said parcels of land. For this purpose, Adela executed a document captioned 'Kasulatan Ng Pagtalikod Sa Karapatan' dated May 1, 1979. (Exh. B) whereby she waived her rights over lots No. 1091 and 1052. On the same date, defendant Melanio, in turn, executed a document entitled 'Pagwawalang Bisa Sa Pagtalikod Sa Karapatan' (Exh. C) declaring that the (earlier) document executed by Adela was a simulated one in order to expedite the registration of the lots in his name.

(d) Declaring Melanio Imperial as the true and rightful owner of Lot No. 1091." (Original Records, pp. 131-132)

By virtue of the document of waiver (Exh. B), defendant Melanio was able to obtain OCT No. P-27941 for lot No. 1052; and OCT No. P-26596 for lot No. 1091, in his name.

"Defendant Melanio argues that he is the owner of Lot No. 1052 by way of a waiver of the right executed by Adela in a document captioned as 'Pagtalikod sa Karapatan' (Exh. B). Examination of the evidence, however, shows that said document (Exh. B) was a simulated contract as may be seen in another document also executed by Adela and Melanio entitled 'Pagwawalang Bisa sa Pagtalikod sa Karapatan' (see Exhibit C)."

Aside from Exhibit C, defendant Melanio executed another document entitled 'Sa Sino Mang Dapat Makatalastas Nito' (Exh. E) wherein he acknowledged the onehalf share of his sister Adela in Lot Nos. 1091 and 1052 and that Adela is also

Plaintiffs (private respondents) and defendant (petitioner herein) interposed separate appeals with the respondent Court, which upheld herein private respondents and affirmed the finding of the trial court that "the document (Exh. B) executed by Adela Imperial, (was) simulated." Respondent Court quoted the trial court thus:

The appellate Court noted that the purpose of the simulated document was to facilitate the registration of the two lots in the name of herein petitioner Melanio, who however breached the trust reposed upon him by his sister Adela. The respondent Court agreed that "(b)eyond doubt, therefore, lot Nos. 1052 and 1091 were owned in common by defendant-appellee Melanio and Adela Imperial, mother of plaintiffs-appellants." The respondent Court also ruled that, contrary to the claim of herein petitioner and contrary to the finding of the trial court Adela Imperial never sold her 1/2 share of lot 1091 to herein petitioner. Thus, when herein petitioner Melanio appropriated for himself the entire proceeds from the sale of lot 1052, he was "deemed to have waived his share in lot 1091 in favor of Adela Imperial and/or her heirs x x x Lot No. 1091 should now be solely owned by (the herein private respondents)," otherwise "Melanio would be enriching himself at the expense of his sister, Adela" and/or her heirs. Thus, the respondent Court ruled: "WHEREFORE, the appealed decision is REVERSED and SET ASIDE, and judgment is hereby rendered in favor of plaintiffs: 1. Declaring lot No. 1091, covered by Original Certificate of Title No. P-26596, is owned by plaintiffs as heirs of Adela Imperial; 2. Ordering the cancellation of Original Certificate of Title No. P-26596 in the name of defendant Melanio Imperial and in lieu thereof, another title be issued in the name of plaintiffs as the heirs of Adela Imperial; 3. Ordering Melanio Imperial to pay plaintiffs the sum of P10,000.00 as moral damages and the sum of P5,000.00 as exemplary damages; 4. Ordering Melanio Imperial to pay plaintiff the sum of P10,000.00 as litigation expenses and attorney's fees." The Issues On appeal, petitioner alleged the following generalities: "1. The respondent Court of Appeals abused its discretion in deciding this case not in accordance with the evidence on record, amounting to excess of jurisdiction, thereby departing from the accepted and usual course of judicial proceedings. 2. The respondent Court of Appeals decided questions of substance in a way not in accord with law or with the applicable decisions of the Supreme Court and the petitioner have (sic) no other plain, speedy and adequate remedy in the course of law." Simply put, petitioner challenges the findings of fact of the respondent Court that he appropriated for himself the entire proceeds from the sale of Lot 1052 and failed

to give one-half of the proceeds of Adela Imperial or her heirs, the private respondents in this appeal. Petitioner, on the strength of the reversed findings of the trial court, claims that he had already paid Adela Imperial the amounts of "P4,575.00 on June 16, 1979; P200.00 on November 8, 1979 and another P200.00 on May 7, 1980 as shown in Exhibits '4', '4-A' and '4-B'". He further alleges that the sum of these amounts represent one-half (1/2) of the price of Lot No. 1091 during the time the sale was transacted. And if Lot 1091 would be solely owned by the private respondents to the exclusion of himself, he would be deprived of his share of the inheritance which would be unjust and contrary to law.[4] The Court's Ruling Petitioner would like this Court to re-appreciate and re-evaluate the evidence all over again and make findings contrary to those of the respondent Court. Generally speaking, factual findings of the Court of Appeals are final and conclusive on the Supreme Court.[5] In this particular case, we see no cogent or sufficient reason to depart from the above rule absent any clear showing that the findings complained of are totally devoid of support in the record, or that they are so glaringly erroneous as to constitute serious abuse of discretion. Such findings must stand, for this Court is not expected or required to examine or contrast the oral and documentary evidence submitted by the parties.[6] The disputed portion of the Decision reads thus: "However, the trial court said that Adela Imperial 'sold her share to Melanio on lot No. 1091.' This conclusion was based on three receipts (Exhs. 4, 4-A and 4-B) which show that on June 16, 1979, November 8, 1979, and May 7, 1980, defendant-appellee Melanio Imperial paid to Adela Imperial the amounts of P4,575.00, P200.00 and P200.00, respectively. The court a quo erred. The last receipt is dated May 7, 1980 (Exh. 4-B). Adela Imperial died on May 4, 1986, six years thereafter. No deed of sale was executed by Adela Imperial in favor of defendant-appellee Melanio Imperial ceding lot 1091. Furthermore, the receipts do not show it is in payment of Adela Imperial's one-half share of the lot. If this was the intention of the parties, then the purchase price and the balance after each payment should have been reflected in the receipts. The only logical conclusion is that the amounts remitted by defendant-appellee Melanio were the shares of Adela Imperial for the sale of subdivision lots in lot No. 1091. This is so since the document executed by defendant-appellee Melanio Imperial entitled 'Sa Sino Mang Dapat Makatalastas Nito' (Exh. E) states in part: 'x x x aking pinatutunay na bukod sa ang aking kapatid na si Adela Imperial ay may 1/2 bahagi sa naulit na mga lupain na nababanggit sa naulit na documento, ay 1/2 rin siya sa lahat na maaring mapagbilhan ng mga lote ng naulit na pangagari matapos na ito ay mapalagyan ng subdivision.'

which in English means: 'I hereby attest that aside from the 1/2 share of my sister Adela Imperial in the lots mentioned in the aforementioned documents, she will also receive 1/2 share in the proceeds of the sale in the said lots, after they are subdivided.' Therefore, Adela Imperial never sold her 1/2 share of lot 1091 to defendant Melanio Imperial, contrary to the finding of the court a quo." Still, in order to satisfy ourselves, we examined the three receipts aforesaid, which are critical to petitioner's contention, and we agree with respondent Court that the amounts mentioned therein as having been paid by herein petitioner to Adela Imperial were not intended to be part of the purchase price of Lot 1091. The three receipts bear the following contents: 1. Receipt dated June 16, 1979: "Tinanggap ko sa aking kapatid na si Melanio Imperial ang halagang Four thousand five hundred seventy five (P4,575.00) bilang kabahagi sa lote no. 1091 sa Lucban, Quezon.

It is clear to this Court that the amounts covered by the receipts, considered in relation to the agreement between petitioner and Adela Imperial Solleza entitled "Sa Sino Mang Dapat Makatalastas Nito", constituted the latter's share in the proceeds of the sales of subdivision lots which were part of Lot No. 1091.[7] For if the sale of Lot 1091 to the petitioner was what was indeed intended by the parties, then it is most unusual and surprising as the Court of Appeals correctly observed that the petitioner did not ask for the execution of a Deed of Sale ceding to him the share of Adela in Lot No. 1091 within the period of six (6) years from the date of the last receipt, considering that Adela died on May 4, 1986. Only when he was sued for annulment of OCT No. 26596 covering Lot No. 1091 did he raise as a defense the allegation that he had already acquired the share of his sister in said lot. Inasmuch as the terms of the agreement between Adela and Melanio provide for one-half undivided share for petitioner over Lots 1091 and 1052, and the petitioner in effect waived his rights over one-half of the remaining Lot 1091 when he sold and appropriated solely as his own the entire proceeds from the sale of Lot 1052, law[8] and equity dictate that Lot 1091[9] should now belong to the estate of the late Adela Imperial Solleza, represented by her heirs, private respondents in this case.[10]

Received by (sgd.) Adela Imperial" 2. Receipt dated November 8, 1979: "(sgd.) Adela Imperial Received from Brother Melanio Imperial the sum of Two hundred P200.00 as partial for lot 1091." 3. Receipt dated May 7, 1980: "Tinanggap ko kay Melanio Imperial ang halagang dalawang daang (P200.00) bilang kabahagi sa lote 1091. Received by (sgd.) Adela I. Solleza"

On the other hand, the award of moral and exemplary damages is appropriate in this case, for the petitioner acted in bad faith[11] and breached the trust reposed in him by virtue of his contract with his late sister. This was clearly manifested when he sold Lot 1052 without informing Adela or her heirs and giving a share of the sales proceeds to them. Additionally, he even avoided talking to private respondent Rosa Solleza (now Arquiza) when she tried to ask why he sold Lot 1052 in spite of the co-ownership existing with between her mother and the petitioner over said lot[12] Additionally, attorney's fees are also recoverable when exemplary damages are awarded.[13] WHEREFORE, premises considered, the herein petition is hereby DENIED for lack of merit, no reversible error having been committed by respondent Court. The assailed Decision is AFFIRMED in toto. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 149313

January 22, 2008

JULITA ROMBAUA PANGANIBAN, PAQUITO ROMBAUA, RUPERTO ROMBAUA, TERESITA ROMBAUA TELAJE and LEONOR ROMBAUA OPIANA, petitioners, vs. JULITA S. OAMIL, respondent. DECISION YNARES-SANTIAGO, J.: Assailed in this petition for review on certiorari are the Decision1 of the Court of Appeals dated March 2, 2001 in CA-G.R. CV No. 57557, which affirmed in toto the Order dated October 23, 1997 of the Regional Trial Court of Olongapo City, Branch 73, and the Resolution2 dated July 10, 2001 denying the motion for reconsideration.

For failure to file an answer, Partenio was declared in default, and respondent presented her evidence ex parte. On December 26, 1993, the trial court promulgated its Decision,5 the dispositive portion of which reads as follows: WHEREFORE, viewed from all the foregoing, judgment is hereby rendered as follows: (1) The defendant is hereby ordered to execute a deed of absolute sale over the ½ portion (front) of the realty subject matter of this case in favor of the plaintiff and to surrender the possession thereof to the plaintiff. Failure of the defendant to do so, then the City Assessor of Olongapo is hereby directed to effect the transfer of all rights/interest on the one-half (1/2) front portion of the said realty in the name of the plaintiff, upon the finality of this decision; (2) Plaintiff, however, is ordered to pay the amount of EIGHT THOUSAND PESOS (P8,000.00) representing the balance of the interests due on the amount of P200,000.00, delinquent for one (1) year computed at 12% per annum; (3) Defendant is, likewise, hereby ordered to pay the plaintiff attorney’s fees in the amount of TEN THOUSAND PESOS (P10,000.00). Let a copy of this Decision be furnished the City Assessor of Olongapo City.

The facts as culled from the records are as follows: SO ORDERED.6 On April 26, 1993 Julita Oamil, herein respondent, filed a complaint for specific performance with damages3 with the Regional Trial Court of Olongapo City, praying that Partenio Rombaua (Partenio) be ordered to execute a final deed of sale over the parcel of land which was the subject of a prior "Agreement to Sell" executed by and between them on May 17, 1990. The property which is alleged to be covered by the said "Agreement to Sell" consists of 204.5 square meters of land located at #11 21st St., East Bajac-Bajac, Olongapo City, and is claimed by respondent Oamil to be Partenio’s conjugal share in a parcel of commercial land (the subject property) with an aggregate area of 409 square meters acquired by Partenio and his deceased first wife Juliana4 during their marriage. There are two portions of the subject property in contention: one consisting of 204.5 square meters facing 21st Street (the 21st St. portion), and another consisting of 204.5 square meters facing Canda Street (the Canda St. portion). Petitioners and their father Partenio are acknowledged co-owners of the subject property to the following extent: one-half to Partenio as his conjugal share, and one-sixth each of the remaining half to petitioners and Partenio as the surviving heirs of Juliana.

Note that the trial court did not specify which portion of the property – the 21st St. portion or the Canda St. portion – should be deeded to respondent as buyer of Partenio’s conjugal share. Partenio failed to appeal, and the decision became final and executory on February 4, 1994. Entry of judgment was made on February 8, 1994, and a writ of execution was issued on February 15, 1994 and served upon Partenio on February 21, 1994. The writ was served as well upon the City Assessor of Olongapo City, who caused the transfer of the Tax Declaration covering the 21st St. portion in respondent’s name. In June 1994, petitioners filed a verified petition for relief from the decision of the trial court, grounded on the following: 1) that Partenio’s conjugal share in the property, and that of petitioners as well, are being litigated in a judicial partition proceeding7 (the partition case) which is pending with the Court of Appeals, hence the trial court may not yet render a decision disposing of a definite area of the subject property in respondent’s favor; and, (2) that petitioners were unjustly

deprived of the opportunity to protect and defend their interest in court because, notwithstanding that they are indispensable parties to the case (being co-owners of the subject property), they were not impleaded in Civil Case No. 140-0-93. In lieu of a hearing, the parties were directed to submit their respective position papers. Respondent, meanwhile, moved to dismiss the petition, claiming that the stated grounds for relief are not included in the enumeration under Section 2, Rule 38 of the Rules of Court. Petitioners opposed the motion. In an Order dated January 13, 1995, the trial court denied the petition for relief because the decision in Civil Case No. 140-0-93 had become final and executory. It held that only indispensable parties to the case may participate in the proceedings thereof, and since petitioners may not be considered as indispensable parties because the subject matter of the proceedings involves Partenio’s conjugal share in the property, they are precluded from filing a petition for relief from the court’s judgment. Petitioners moved for reconsideration insisting that they are indispensable parties in Civil Case No. 140-0-93 because as co-owners of the subject property by virtue of succession to the rights of their deceased mother, they possess an interest that must be protected. Instead of resolving the motion, the trial court, with the concurrence of the petitioners and the respondent, deferred the proceedings, to await the result of a pending appeal with the Court of Appeals of the decision in Special Civil Action No. 340-0-86,8 the partition case, where the trial court, in its decision, awarded specifically the Canda St. portion to Partenio as his conjugal share. In the meantime, or sometime in 1995, a Motion for leave of court to file a Complaint in Intervention was filed by Sotero Gan (Gan), who claims to be the actual and rightful owner of Partenio’s conjugal share. Gan claims to have purchased Partenio’s conjugal share in the property, and in return, the latter on November 29, 1990 executed a deed of waiver and quitclaim of his possessory rights. Gan likewise claims that the tax declaration covering the portion of the property had been transferred in his name. He thus seeks the dismissal of Civil Case No. 140-0-93 and the reinstatement of his name on the tax declaration which by then had been placed in respondent’s name.

which was opposed by respondent, citing, among others, an Order dated April 18, 1994 issued by the Department of Environment and Natural Resources (CENRO of Olongapo) which includes a finding that Gan had transferred his rights and interest in the subject property to one Chua Young Bing. In another Order dated October 23, 1997,9 the trial court denied Gan’s motion for reconsideration, as well as the petitioners’ motion for reconsideration of the January 13, 1995 order denying the petition for relief. In said order, the court made reference to the decision in Special Civil Action No. 340-0-86, which by then had become final and executory.10 The trial court likewise substantially modified its Decision dated December 26, 1993, by awarding specifically the 21st St. portion of the property to Partenio as his conjugal share, despite the pronouncement in Special Civil Action No. 340-0-86 which awards the Canda St. portion to him. From the foregoing October 23, 1997 order, the petitioners and Gan interposed their separate appeals to the Court of Appeals. Meanwhile, respondent filed a motion for execution pending appeal, which was denied on the ground that there exist no special or compelling reasons to allow it. On March 2, 2001, the appellate court rendered the herein assailed Decision, which affirmed in toto the appealed October 23, 1997 Order of the trial court. The appellate court sustained the trial court’s ruling that Partenio’s conjugal share in the subject property consists of the 21st St. portion, thereby disregarding the prior final and executory decision in Special Civil Action No. 340-0-86 which declares that Partenio is entitled to the Canda St. portion. The appellate court based the award of the 21st St. portion to respondent on the ground that petitioners have always acknowledged their father Partenio’s "acts of ownership" over the 21st St. portion, thus signifying their consent and thereby barring them from questioning the award. Respondents moved for reconsideration but it was denied. Petitioners are now before us via the present petition, raising the sole issue of whether petitioners can intervene in the proceedings in Civil Case No. 140-0-93 in order to protect their rights as co-owners of the subject property.

The parties submitted their respective oppositions to Gan’s motion, the core of their argument being that with the finality of the decision in the case, intervention was no longer proper, and that Gan’s cause of action, if any, should be litigated in a separate proceeding. The trial court, in an Order dated January 22, 1996, denied Gan’s motion for intervention for being filed out of time, considering that the decision of the court had become final and executory in February 1994. Gan moved for reconsideration

We resolve to GRANT the petition. Under a co-ownership, the ownership of an undivided thing or right belongs to different persons. During the existence of the co-ownership, no individual can claim title to any definite portion of the community property until the partition thereof; and prior to the partition, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire land or thing.11 Before partition in a co-

ownership, every co-owner has the absolute ownership of his undivided interest in the common property. The co-owner is free to alienate, assign or mortgage this undivided interest, except as to purely personal rights. The effect of any such transfer is limited to the portion which may be awarded to him upon the partition of the property.12 Under Article 497 of the Civil Code, in the event of a division or partition of property owned in common, assignees of one or more of the co-owners may take part in the division of the thing owned in common and object to its being effected without their concurrence. But they cannot impugn any partition already executed, unless there has been fraud, or in case it was made notwithstanding a formal opposition presented to prevent it, without prejudice to the right of the debtor or assignor to maintain its validity. The decision in Special Civil Action No. 340-0-86, which is an action for judicial partition of the subject property, determines what Partenio, and ultimately, respondent, as his successor-in-interest, is entitled to in Civil Case No. 140-0-93. As Partenio’s successor-in-interest to the property, respondent could not acquire any superior right in the property than what Partenio is entitled to or could transfer or alienate after partition. In a contract of sale of co-owned property, what the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-owner, and the vendee merely steps into the shoes of the vendor as co-owner.13 As early as May 17, 1990, when respondent and Partenio executed the "Agreement to Sell", the former knew that the property she was purchasing was conjugal property owned in common by Partenio and the heirs of his deceased wife.14 And while Civil Case No. 140-0-93 (the specific performance case) was pending, respondent was apprised of the pendency of Special Civil Action No. 340-0-86 (the partition case). Yet, respondent did not intervene, nor did she take part, nor enter any formal opposition – as assignee of Partenio’s conjugal share in the property – in said partition proceedings. She did not exercise the rights granted her under Article 497 of the Civil Code. Instead, when the court in Civil Case No. 140-0-93 decided to suspend the proceedings and hold the same in abeyance while the appeal in Special Civil Action No. 340-0-86 remained unresolved, the respondent unconditionally agreed to its temporary abatement. In other words, she chose to sit back and await the resolution thereof. Consequently, when the decision in Special Civil Action No. 340-0-86 became final and executory without the respondent having questioned the same in any manner whatsoever, by appeal or otherwise, the division of property decreed therein may no longer be impugned by her. Thus said, the trial court in Civil Case No. 140-0-93 could not award the 21st St. portion to Partenio, since the court in Special Civil Action No. 340-0-86 specifically awarded the Canda St. portion to him. The decision in Special Civil Action No. 340-

0-86, which became final and executory, should put an end to the co-ownership between Partenio and the respondents, and the award made to each co-owner of specific portions of the property as their share in the co-ownership should be respected. Since the issue of each of the co-owners’ specific portion in the aggregate property has been laid to rest in Special Civil Action No. 340-0-86, the final and executory decision in said proceeding should be conclusive on the issue of which specific portion of the property became the subject matter of the sale between Partenio and the respondent; that is, that Partenio, as declared owner of the Canda St. portion, could have transferred to respondent only that part of the property and not the 21st St. portion. Although Partenio was free to sell or transfer his undivided interest to the respondent, the effect of such transfer is limited to the portion which may be awarded to him upon the partition of the property. It was likewise error for the appellate court to have considered the alleged acts of ownership exercised upon the 21st St. portion by Partenio as weighing heavily against the decreed partition in Special Civil Action No. 340-0-86. The determination of this issue is beyond the ambit of the trial court in Civil Case No. 140-0-93. As far as it was concerned, it could only award to the respondent, if proper, whatever specific portion Partenio is found to be entitled to in the event of a partition, in accordance with Article 493 of the Civil Code and the procedure outlined in the Rules of Court. It could not, in an ordinary proceeding for specific performance with damages, subject the property to a partial division or partition without the knowledge and participation of the other co-owners, and while a special civil action for partition was simultaneously pending in another court. The court in Civil Case No. 140-0-93 is not a partition court but one litigating an ordinary civil case, and all evidence of alleged acts of ownership by one co-owner should have been presented in the partition case, there to be threshed out in order that the partition court may arrive at a just division of the property owned in common; it is not for the trial court in the specific performance case to properly appreciate. Being a court trying an ordinary civil suit, the court in Civil Case No. 140-0-93 had no jurisdiction to act as a partition court. Trial courts trying an ordinary action cannot resolve to perform acts pertaining to a special proceeding because it is subject to specific prescribed rules.15 That the trial court suspended the proceedings in Civil Case No. 140-0-93 to make way for the resolution of Special Civil Action No. 340-0-86 was an indication that it intended to abide by whatever would be decreed in the latter case. For, understandably, the resolution of Special Civil Action No. 340-0-86 will settle the issue in Civil Case No. 140-0-93 with respect to which specific portion of the property constitutes the subject matter of the specific performance suit and which would, in any case, be adjudicated to either of the two – the defendant co-owner and seller Partenio or the plaintiff buyer Oamil, the herein respondent. Yet in the

end, the trial court ultimately disregarded what had been finally adjudicated and settled in Special Civil Action No. 340-0-86, and instead it took a position that was entirely diametrically opposed to it. It was likewise irregular for the respondent to have obtained a certificate of title over specific property which has not been partitioned, especially where she concedes awareness of the existing co-ownership which has not been terminated, and recognizes her status as mere successor-in-interest to Partenio. The spring may not rise higher than its source. In sum, the trial court and the Court of Appeals, by disregarding the final and executory judgment in Special Civil Action No. 340-0-86, certainly ignored the principle of conclusiveness of judgments, which states that – [A] fact or question which was in issue in a former suit and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to that action and persons in privity with them are concerned and cannot be again litigated in any future action between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains unreversed by proper authority. It has been held that in order that a judgment in one action can be conclusive as to a particular matter in another action between the same parties or their privies, it is essential that the issue be identical. If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit (Nabus vs. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of action is not required but merely identity of issues.16 The ruling in Special Civil Action No. 340-0-86 – that the Canda St. portion shall go to Partenio – became the law of the case and continues to be binding between the parties as well as their successors-in-interest, the decision in said case having become final and executory. Hence, the binding effect and enforceability of that dictum can no longer be relitigated anew in Civil Case No. 140-0-93 since said issue had been resolved and finally laid to rest in the partition case, by conclusiveness of judgment, if not by the principle of res judicata. It may not be reversed, modified or altered in any manner by any court. As a result of the trial court’s refusal to abide by the decision in Special Civil Action No. 340-0-86, the rights of the petitioners have been unnecessarily transgressed, thereby giving them the right to seek relief in court in order to annul the October 23, 1997 Order of the trial court which substantially and wrongly modified its original decision in Civil Case No. 140-0-93. It was clear mistake for the trial court to have gone against the final and executory decision in Special Civil Action No.

340-0-86 and its original decision, which does not award a definite portion of the disputed property to Partenio, precisely because, as a court litigating an ordinary civil suit, it is not authorized to partition the subject property but only to determine the rights and obligations of the parties in respect to Partenio’s undivided share in the commonly owned property. As a result of this mistake, the petitioners are entitled to relief. Finally, with respect to Gan’s intervention, we affirm the appellate court’s finding that the same is no longer proper considering that the decision in Civil Case No. 140-0-93 had become final and executory. Gan moved to intervene only in 1995, when the decision became final and executory in February 1994. Certainly, intervention, being merely collateral or ancillary to the principal action, may no longer be allowed in a case already terminated by final judgment.17 Moreover, since Gan did not appeal the herein assailed decision of the appellate court, then the same, as against him, has become final and executory. WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated March 2, 2001 in CA-G.R. CV No. 57557 and the Resolution dated July 10, 2001 are REVERSED and SET ASIDE, with the exception that the denial of the intervenor Sotero Gan’s motion for intervention is AFFIRMED. The Order dated October 23, 1997 of the Regional Trial Court of Olongapo City in Civil Case No. 140-0-93 is hereby DECLARED of no effect. In all other respects, the Decision of the trial court in Civil Case No. 140-0-93 dated December 26, 1993 is AFFIRMED. The said court is moreover ORDERED to abide by the pronouncement in Special Civil Action No. 340-0-86 with respect to Partenio Rombaua’s conjugal share in the disputed property. SO ORDERED.