Otani Hotel in Manila.
The said meeting was for the purpose of brokering the sale
OESMER vs PARAISO
February 5, 2007
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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
of petitioners properties to respondent corporation.
Pursuant to the said meeting, a Contract to Sell[5] was drafted by the Executive
Assistant of Sotero Lee, Inocencia Almo. On 1 April 1989, petitioners Ernesto and
Enriqueta signed the aforesaid Contract to Sell. A check in the amount of
P100,000.00, payable to Ernesto, was given as option money. Sometime thereafter,
Rizalino, Leonora, Bibiano, Jr., and Librado also signed the said Contract to Sell.
However, two of the brothers, Adolfo and Jesus, did not sign the document.
On 5 April 1989, a duplicate copy of the instrument was returned to respondent
corporation. On 21 April 1989, respondent brought the same to a notary public for
notarization.
In a letter[6] dated 1 November 1989, addressed to respondent corporation,
petitioners informed the former of their intention to rescind the Contract to Sell
and to return the amount of P100,000.00 given by respondent as option money.
Respondent did not respond to the aforesaid letter. On 30 May 1991, herein
petitioners, together with Adolfo and Jesus, filed a Complaint[7] for Declaration of
Nullity or for Annulment of Option Agreement or Contract to Sell with Damages
before the Regional Trial Court (RTC) of Bacoor, Cavite. The said case was docketed
as Civil Case No. BCV-91-49.
During trial, petitioner Rizalino died. Upon motion of petitioners, the trial court
issued an Order,[8] dated 16 September 1992, to the effect that the deceased
petitioner be substituted by his surviving spouse, Josefina O. Oesmer, and his
children, Rolando O. Oesmer and Fernando O. Oesmer. However, the name of
Rizalino was retained in the title of the case both in the RTC and the Court of
Appeals.
After trial on the merits, the lower court rendered a Decision[9] dated 27 March
1996 in favor of the respondent, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of herein
[respondent] Paraiso Development Corporation. The assailed Contract to Sell is
valid and binding only to the undivided proportionate share of the signatory of this
document and recipient of the check, [herein petitioner] co-owner Ernesto
Durumpili Oesmer. The latter is hereby ordered to execute the Contract of Absolute
Sale concerning his 1/8 share over the subject two parcels of land in favor of herein
[respondent] corporation, and to pay the latter the attorneys fees in the sum of Ten
Thousand (P10,000.00) Pesos plus costs of suit.
The counterclaim of [respondent] corporation is hereby Dismissed for lack of
merit.[10]

Unsatisfied, respondent appealed the said Decision before the Court of Appeals.
On 26 April 2002, the appellate court rendered a Decision modifying the Decision
of the court a quo by declaring that the Contract to Sell is valid and binding with
respect to the undivided proportionate shares of the six signatories of the said
document, herein petitioners, namely: Ernesto, Enriqueta, Librado, Rizalino,
Bibiano, Jr., and Leonora (all surnamed Oesmer). The decretal portion of the said
Decision states that:
WHEREFORE, premises considered, the Decision of the court a quo is hereby
MODIFIED. Judgment is hereby rendered in favor of herein [respondent] Paraiso
Development Corporation. The assailed Contract to Sell is valid and binding with
respect to the undivided proportionate share of the six (6) signatories of this
document, [herein petitioners], namely, Ernesto, Enriqueta, Librado, Rizalino,
Bibiano, Jr., and Leonora (all surnamed Oesmer). The said [petitioners] are hereby
ordered to execute the Deed of Absolute Sale concerning their 6/8 share over the
subject two parcels of land and in favor of herein [respondent] corporation, and to
pay the latter the attorneys fees in the sum of Ten Thousand Pesos (P10,000.00)
plus costs of suit.[11]
Aggrieved by the above-mentioned Decision, petitioners filed a Motion for
Reconsideration of the same on 2 July 2002. Acting on petitioners Motion for
Reconsideration, the Court of Appeals issued a Resolution dated 4 March 2003,
maintaining its Decision dated 26 April 2002, with the modification that
respondent tender payment to petitioners in the amount of P3,216,560.00,
representing the balance of the purchase price of the subject parcels of land. The
dispositive portion of the said Resolution reads:
WHEREFORE, premises considered, the assailed Decision is hereby modified.
Judgment is hereby rendered in favor of herein [respondent] Paraiso Development
Corporation. The assailed Contract to Sell is valid and binding with respect to the
undivided proportionate shares of the six (6) signatories of this document, [herein
petitioners], namely, Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and
Leonora (all surnamed Oesmer). The said [petitioners] are hereby ordered to
execute the Deed of Absolute Sale concerning their 6/8 share over the subject two
parcels of land in favor of herein [respondent] corporation, and to pay the latter
attorneys fees in the sum of Ten Thousand Pesos (P10,000.00) plus costs of suit.
Respondent is likewise ordered to tender payment to the above-named [petitioners]
in the amount of Three Million Two Hundred Sixteen Thousand Five Hundred Sixty
Pesos (P3,216,560.00) representing the balance of the purchase price of the subject
two parcels of land. [12]
Hence, this Petition for Review on Certiorari.
Petitioners come before this Court arguing that the Court of Appeals erred:
I. On a question of law in not holding that, the supposed
Contract to Sell (Exhibit D) is not binding upon petitioner Ernesto Oesmers co-
owners (herein petitioners Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora).
II. On a question of law in not holding that, the supposed
Contract to Sell (Exhibit D) is void altogether considering that respondent itself did
not sign it as to indicate its consent to be bound by its terms. Moreover, Exhibit D
is really a unilateral promise to sell without consideration distinct from the price,
and hence, void.
Petitioners assert that the signatures of five of them namely: Enriqueta, Librado,
Rizalino, Bibiano, Jr., and Leonora, on the margins of the supposed Contract to
Sell did not confer authority on petitioner Ernesto as agent to sell their respective
shares in the questioned properties, and hence, for lack of written authority from
the above-named petitioners to sell their respective shares in the subject parcels
of land, the supposed Contract to Sell is void as to them. Neither do their
signatures signify their consent to directly sell their shares in the questioned
properties. Assuming that the signatures indicate consent, such consent was
merely conditional. The effectivity of the alleged Contract to Sell was subject to a
suspensive condition, which is the approval of the sale by all the co-owners.
Petitioners also assert that the supposed Contract to Sell (Exhibit D), contrary to
the findings of the Court of Appeals, is not couched in simple language.
They further claim that the supposed Contract to Sell does not bind the respondent
because the latter did not sign the said contract as to indicate its consent to be
bound by its terms. Furthermore, they maintain that the supposed Contract to Sell
is really a unilateral promise to sell and the option money does not bind petitioners
for lack of cause or consideration distinct from the purchase price.
The Petition is bereft of merit.
It is true that the signatures of the five petitioners, namely: Enriqueta, Librado,
Rizalino, Bibiano, Jr., and Leonora, on the Contract to Sell did not confer authority
on petitioner Ernesto as agent authorized to sell their respective shares in the
questioned properties because of Article 1874 of the Civil Code, which expressly
provides that:
Art. 1874. When a sale of a piece of land or any interest therein is through an
agent, the authority of the latter shall be in writing; otherwise, the sale shall be
void.

The law itself explicitly requires a written authority before an agent can sell an
immovable. The conferment of such an authority should be in writing, in as clear
and precise terms as possible. It is worth noting that petitioners signatures are
found in the Contract to Sell. The Contract is absolutely silent on the
establishment of any principal-agent relationship between the five petitioners and
their brother and co-petitioner Ernesto as to the sale of the subject parcels of land.
Thus, the Contract to Sell, although signed on the margin by the five petitioners,
is not sufficient to confer authority on petitioner Ernesto to act as their agent in
selling their shares in the properties in question.
However, despite petitioner Ernestos lack of written authority from the five
petitioners to sell their shares in the subject parcels of land, the supposed Contract
to Sell remains valid and binding upon the latter.
As can be clearly gleaned from the contract itself, it is not only petitioner Ernesto
who signed the said Contract to Sell; the other five petitioners also personally
affixed their signatures thereon. Therefore, a written authority is no longer
necessary in order to sell their shares in the subject parcels of land because, by
affixing their signatures on the Contract to Sell, they were not selling their shares
through an agent but, rather, they were selling the same directly and in their own
right.
The Court also finds untenable the following arguments raised by petitioners to
the effect that the Contract to Sell is not binding upon them, except to Ernesto,
because: (1) the signatures of five of the petitioners do not signify their consent to
sell their shares in the questioned properties since petitioner Enriqueta merely
signed as a witness to the said Contract to Sell, and that the other petitioners,
namely: Librado, Rizalino, Leonora, and Bibiano, Jr., did not understand the
importance and consequences of their action because of their low degree of
education and the contents of the aforesaid contract were not read nor explained
to them; and (2) assuming that the signatures indicate consent, such consent was
merely conditional, thus, the effectivity of the alleged Contract to Sell was subject
to a suspensive condition, which is the approval by all the co-owners of the sale.
It is well-settled that contracts are perfected by mere consent, upon the acceptance
by the offeree of the offer made by the offeror. From that moment, the parties are
bound not only to the fulfillment of what has been expressly stipulated but also to
all the consequences which, according to their nature, may be in keeping with good
faith, usage and law. To produce a contract, the acceptance must not qualify the
terms of the offer. However, the acceptance may be express or implied. For a
contract to arise, the acceptance must be made known to the offeror. Accordingly,
the acceptance can be withdrawn or revoked before it is made known to the
offeror.[13]
In the case at bar, the Contract to Sell was perfected when the petitioners
consented to the sale to the respondent of their shares in the subject parcels of
land by affixing their signatures on the said contract. Such signatures show their
acceptance of what has been stipulated in the Contract to Sell and such acceptance
was made known to respondent corporation when the duplicate copy of the
Contract to Sell was returned to the latter bearing petitioners signatures.
As to petitioner Enriquetas claim that she merely signed as a witness to the said
contract, the contract itself does not say so. There was no single indication in the
said contract that she signed the same merely as a witness. The fact that her
signature appears on the right-hand margin of the Contract to Sell is insignificant.
The contract indisputably referred to the Heirs of Bibiano and Encarnacion
Oesmer, and since there is no showing that Enriqueta signed the document in
some other capacity, it can be safely assumed that she did so as one of the parties
to the sale.
Emphasis should also be given to the fact that petitioners Ernesto and Enriqueta
concurrently signed the Contract to Sell. As the Court of Appeals mentioned in its
Decision,[14] the records of the case speak of the fact that petitioner Ernesto,
together with petitioner Enriqueta, met with the representatives of the respondent
in order to finalize the terms and conditions of the Contract to Sell. Enriqueta
affixed her signature on the said contract when the same was drafted. She even
admitted that she understood the undertaking that she and petitioner Ernesto
made in connection with the contract. She likewise disclosed that pursuant to the
terms embodied in the Contract to Sell, she updated the payment of the real
property taxes and transferred the Tax Declarations of the questioned properties
in her name.[15] Hence, it cannot be gainsaid that she merely signed the Contract
to Sell as a witness because she did not only actively participate in the negotiation
and execution of the same, but her subsequent actions also reveal an attempt to
comply with the conditions in the said contract.
With respect to the other petitioners assertion that they did not understand the
importance and consequences of their action because of their low degree of
education and because the contents of the aforesaid contract were not read nor
explained to them, the same cannot be sustained.
We only have to quote the pertinent portions of the Court of Appeals Decision, clear
and concise, to dispose of this issue. Thus,
First, the Contract to Sell is couched in such a simple language which is
undoubtedly easy to read and understand. The terms of the Contract, specifically
the amount of P100,000.00 representing the option money paid by [respondent]
corporation, the purchase price of P60.00 per square meter or the total amount of
P3,316,560.00 and a brief description of the subject properties are well-indicated
thereon that any prudent and mature man would have known the nature and
extent of the transaction encapsulated in the document that he was signing.
Second, the following circumstances, as testified by the witnesses and as can be
gleaned from the records of the case clearly indicate the [petitioners] intention to
be bound by the stipulations chronicled in the said Contract to Sell.
As to [petitioner] Ernesto, there is no dispute as to his intention to effect the
alienation of the subject property as he in fact was the one who initiated the
negotiation process and culminated the same by affixing his signature on the
Contract to Sell and by taking receipt of the amount of P100,000.00 which formed
part of the purchase price.
xxxx
As to [petitioner] Librado, the [appellate court] finds it preposterous that he
willingly affixed his signature on a document written in a language (English) that
he purportedly does not understand. He testified that the document was just
brought to him by an 18 year old niece named Baby and he was told that the
document was for a check to be paid to him. He readily signed the Contract to Sell
without consulting his other siblings. Thereafter, he exerted no effort in
communicating with his brothers and sisters regarding the document which he
had signed, did not inquire what the check was for and did not thereafter ask for
the check which is purportedly due to him as a result of his signing the said
Contract to Sell. (TSN, 28 September 1993, pp. 22-23)
The [appellate court] notes that Librado is a 43 year old family man (TSN, 28
September 1993, p. 19). As such, he is expected to act with that ordinary degree
of care and prudence expected of a good father of a family. His unwitting testimony
is just divinely disbelieving.
The other [petitioners] (Rizalino, Leonora and Bibiano Jr.) are likewise bound by
the said Contract to Sell. The theory adopted by the [petitioners] that because of
their low degree of education, they did not understand the contents of the said
Contract to Sell is devoid of merit. The [appellate court] also notes that Adolfo (one
of the co-heirs who did not sign) also possess the same degree of education as that
of the signing co-heirs (TSN, 15 October 1991, p. 19). He, however, is employed at
the Provincial Treasury Office at Trece Martirez, Cavite and has even accompanied
Rogelio Paular to the Assessors Office to locate certain missing documents which
were needed to transfer the titles of the subject properties. (TSN, 28 January 1994,
pp. 26 & 35) Similarly, the other co-heirs [petitioners], like Adolfo, are far from
ignorant, more so, illiterate that they can be extricated from their obligations under
the Contract to Sell which they voluntarily and knowingly entered into with the
[respondent] corporation.
The Supreme Court in the case of Cecilia Mata v. Court of Appeals (207 SCRA 753
[1992]), citing the case of Tan Sua Sia v. Yu Baio Sontua (56 Phil. 711),
instructively ruled as follows:
The Court does not accept the petitioners claim that she did not understand the
terms and conditions of the transactions because she only reached Grade Three
and was already 63 years of age when she signed the documents. She was literate,
to begin with, and her age did not make her senile or incompetent. x x x.
At any rate, Metrobank had no obligation to explain the documents to the
petitioner as nowhere has it been proven that she is unable to read or that the
contracts were written in a language not known to her. It was her responsibility to
inform herself of the meaning and consequence of the contracts she was signing
and, if she found them difficult to comprehend, to consult other persons, preferably
lawyers, to explain them to her. After all, the transactions involved not only a few
hundred or thousand pesos but, indeed, hundreds of thousands of pesos.
As the Court has held:
x x x The rule that one who signs a contract is presumed to know its contents has
been applied even to contracts of illiterate persons on the ground that if such
persons are unable to read, they are negligent if they fail to have the contract read
to them. If a person cannot read the instrument, it is as much his duty to procure
some reliable persons to read and explain it to him, before he signs it, as it would
be to read it before he signed it if he were able to do and his failure to obtain a
reading and explanation of it is such gross negligence as will estop from avoiding
it on the ground that he was ignorant of its contents.[16]
That the petitioners really had the intention to dispose of their shares in the subject
parcels of land, irrespective of whether or not all of the heirs consented to the said
Contract to Sell, was unveiled by Adolfos testimony as follows:
ATTY. GAMO: This alleged agreement between you and your other brothers and
sisters that unless everybody will agree, the properties would not be sold, was that
agreement in writing?
WITNESS: No sir.
ATTY. GAMO: What you are saying is that when your brothers and sisters except
Jesus and you did not sign that agreement which had been marked as [Exhibit] D,
your brothers and sisters were grossly violating your agreement.
WITNESS: Yes, sir, they violated what we have agreed upon.[17]
We also cannot sustain the allegation of the petitioners that assuming the
signatures indicate consent, such consent was merely conditional, and that, the
effectivity of the alleged Contract to Sell was subject to the suspensive condition
that the sale be approved by all the co-owners. The Contract to Sell is clear enough.
It is a cardinal rule in the interpretation of contracts that if the terms of a contract
are clear and leave no doubt upon the intention of the contracting parties, the
literal meaning of its stipulation shall control.[18] The terms of the Contract to Sell
made no mention of the condition that before it can become valid and binding, a
unanimous consent of all the heirs is necessary. Thus, when the language of the
contract is explicit, as in the present case, leaving no doubt as to the intention of
the parties thereto, the literal meaning of its stipulation is controlling.
In addition, the petitioners, being owners of their respective undivided shares in
the subject properties, can dispose of their shares even without the consent of all
the co-heirs. Article 493 of the Civil Code expressly provides:
Article 493. Each co-owner shall have the full ownership of his part and of the
fruits and benefits pertaining thereto, and he may therefore alienate, assign or
mortgage it, and even substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may be allotted to
him in the division upon the termination of the co-ownership. [Emphases
supplied.]
Consequently, even without the consent of the two co-heirs, Adolfo and Jesus, the
Contract to Sell is still valid and binding with respect to the 6/8 proportionate
shares of the petitioners, as properly held by the appellate court.
Therefore, this Court finds no error in the findings of the Court of Appeals that all
the petitioners who were signatories in the Contract to Sell are bound thereby.
The final arguments of petitioners state that the Contract to Sell is void altogether
considering that respondent itself did not sign it as to indicate its consent to be
bound by its terms; and moreover, the Contract to Sell is really a unilateral promise
to sell without consideration distinct from the price, and hence, again, void. Said
arguments must necessarily fail.
The Contract to Sell is not void merely because it does not bear the signature of
the respondent corporation. Respondent corporations consent to be bound by the
terms of the contract is shown in the uncontroverted facts which established that
there was partial performance by respondent of its obligation in the said Contract
to Sell when it tendered the amount of P100,000.00 to form part of the purchase
price, which was accepted and acknowledged expressly by petitioners. Therefore,
by force of law, respondent is required to complete the payment to enforce the
terms of the contract. Accordingly, despite the absence of respondents signature
in the Contract to Sell, the former cannot evade its obligation to pay the balance
of the purchase price.
As a final point, the Contract to Sell entered into by the parties is not a unilateral
promise to sell merely because it used the word option money when it referred to
the amount of P100,000.00, which also form part of the purchase price.
Settled is the rule that in the interpretation of contracts, the ascertainment of the
intention of the contracting parties is to be discharged by looking to the words they
used to project that intention in their contract, all the words, not just a particular
word or two, and words in context, not words standing alone.[19]
In the instant case, the consideration of P100,000.00 paid by respondent to
petitioners was referred to as option money. However, a careful examination of the
words used in the contract indicates that the money is not option money but
earnest money. Earnest money and option money are not the same but
distinguished thus: (a) earnest money is part of the purchase price, while option
money is the money given as a distinct consideration for an option contract; (b)
earnest money is given only where there is already a sale, while option money
applies to a sale not yet perfected; and, (c) when earnest money is given, the buyer
is bound to pay the balance, while when the would-be buyer gives option money,
he is not required to buy, but may even forfeit it depending on the terms of the
option.[20]
The sum of P100,000.00 was part of the purchase price. Although the same was
denominated as option money, it is actually in the nature of earnest money or
down payment when considered with the other terms of the contract. Doubtless,
the agreement is not a mere unilateral promise to sell, but, indeed, it is a Contract
to Sell as both the trial court and the appellate court declared in their Decisions.
WHEREFORE, premises considered, the Petition is DENIED, and the Decision and
Resolution of the Court of Appeals dated 26 April 2002 and 4 March 2003,
respectively, are AFFIRMED, thus, (a) the Contract to Sell is DECLARED valid and
binding with respect to the undivided proportionate shares in the subject parcels
of land of the six signatories of the said document, herein petitioners Ernesto,
Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer); (b)
respondent is 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
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 co-
owners 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 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.
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 co-
ownership and consolidating the dominion in one sole owner.[5]
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.
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]
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
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.

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
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.
Villaners parents, Alejandro Acabal and Felicidad Balasabas, owned a parcel of
land situated in Barrio Tanglad, Manjuyod, Negros Oriental, containing an area of
18.15 hectares more or less, described in Tax Declaration No. 15856.[4] By a Deed
of Absolute Sale dated July 6, 1971,[5] his parents transferred for P2,000.00
ownership of the said land to him, who was then married to Justiniana Lipajan.[6]
Sometime after the foregoing transfer, it appears that Villaner became a widower.
Subsequently, he executed on April 19, 1990 a deed[7] conveying the same
property[8] in favor of Leonardo.
Villaner was later to claim that while the April 19, 1990 document he executed
now appears to be a Deed of Absolute Sale purportedly witnessed by a Bais City
trial court clerk Carmelo Cadalin and his wife Lacorte, what he signed was a
document captioned Lease Contract[9] (modeled after a July 1976 lease
agreement[10] he had previously executed with previous lessee, Maria Luisa
Montenegro[11]) wherein he leased for 3 years the property to Leonardo at
P1,000.00 per hectare[12] and which was witnessed by two women employees of
one Judge Villegas of Bais City.
Villaner thus filed on October 11, 1993 a complaint[13] before the Dumaguete RTC
against Leonardo and Ramon Nicolas to whom Leonardo in turn conveyed the
property, for annulment of the deeds of sale.
At the witness stand, Villaner declared:
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?
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?
A: Employees of Judge Villegas of Bais City.
Q: Did you see them sign that document?
A: Yes, sir.
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
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.
Q: How about after April 19, 1990, did you receive this amount from Leonardo
Acabal?
A: No, sir.[16]
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: 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: I have given (sic) some papers and contract of lease that I have signed to (sic)
Mrs. Montenegro.[17] (Emphasis and underscoring supplied)
xxx
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: That is a lie.
Q: And whats the truth then?
A: What really (sic) I have signed was the document of lease contract.
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: 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.
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?
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]
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:
Q: Mr. Cadalin, do you know the plaintiff Villaner Acabal?
A: Yes, I know.[21]
xxx
Q: And I would like to ask you Mr. witness why do you know Villaner Acabal?
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: And after they requested you to prepare a document of sale, what did you do?
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.
Q: After you prepared the document, what did you do?
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.
Q: And did Villaner Acabal read the document you prepared?
A: Yes, he read it.
Q: And after reading it what did Villaner Acabal do?
A: He signed the document.
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?
COURT INTERPRETER:
Witness is confronted with the said document earlier marked as Exhibit C for the
prosecution and Exhibit 1 for the defense.
A: Yes, this is the one.[23]
xxx
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]
xxx
Q: After Villaner Acabal signed the document, what did Villaner Acabal do?
A: He was given the payment by Leonardo Acabal.[25]
xxx
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: 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.
By Decision of August 8, 1996, the trial court found for the therein defendants-
herein petitioners Leonardo and Ramon Nicolas and accordingly dismissed the
complaint.
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]
Hence, Leonardo and Ramon Nicolas present petition for review on certiorari,[29]
anchored on the following assignments of error:
I.
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.
II.
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.
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.
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.
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]
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]
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.
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.
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);
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;
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 6-
hectare 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.
Thus, every co-owner has absolute ownership of his undivided interest in the co-
owned property and is free to alienate, assign or mortgage his interest except as to
purely personal rights. While a co-owner has the right to freely sell and dispose of
his undivided interest, nevertheless, as a co-owner, he cannot alienate the shares
of his other co-owners nemo dat qui non habet.[86]
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 co-
owner 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 co-
owner-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
and possessors in joint ownership of the common property claimed.[90] (Italics in
the original; citations omitted; underscoring supplied)
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
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 five-
ninths (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 co-
owners 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.
We deny the petition.
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
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 co-
owned 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
As explained in Spouses Del Campo v. Court of Appeals:23
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 co-
owners. 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 co-
owner.
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
We find unacceptable the argument that Lapinid must pay rental payments to the
other co-owners.1âwphi1
As previously discussed, Lapinid,from the execution of sale, became a co-owner
vested with rights to enjoy the property held in common.
Clearly specified in the Civil Code are the following rights:
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 co-
ownerexercises, 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;
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;
3. In criminal cases of malicious prosecution against the plaintiff;
4. In case of a clearly unfounded civil action or proceeding against the plaintiff;
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]
MELANIO IMPERIAL, petitioner, vs. HON. COURT OF APPEALS and
GUILLERMO SOLLEZA, ET AL., respondents.
DECISION
PANGANIBAN, J.:
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.
The Antecedent Facts
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.
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.
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.
Aside from Exhibit C, defendant Melanio executed another document entitled 'Sa
Sino Mang Dapat Makatalastas Nito' (Exh. E) wherein he acknowledged the one-
half share of his sister Adela in Lot Nos. 1091 and 1052 and that Adela is also
entitled to one-half share in the proceeds of the sale of subdivision lots in the said
lots.
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."
After trial on the merits, the Regional Trial Court of Lucena City, Branch 60[3],
rendered its decision, the dispositive portion of which reads:
"IN VIEW OF THE FOREGOING, judgment is hereby rendered:
(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
(d) Declaring Melanio Imperial as the true and rightful owner of Lot No. 1091."
(Original Records, pp. 131-132)
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:
"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)."
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.
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:
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]
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.

"Tinanggap ko kay Melanio Imperial ang halagang dalawang daang (P200.00) SO ORDERED.
bilang kabahagi sa lote 1091.

Received by

(sgd.)

Adela I. Solleza"
 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.
The facts as culled from the records are as follows:
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.
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.
SO ORDERED.6
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.
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
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.
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
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.

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.