specpro cases 3-9-15

8/9/2019 Specpro Cases 3-9-15

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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 160762 May 3, 2006

Spouses JOSEPHINE MENDO ! GO " HENR# GO, Petitioners,vs.$EON!RDO #!M!NE, Respondent.

D ! I S I O N

P!NG!NI%!N, CJ:

Propert" purchased b" spouses durin# the e$istence of their %arria#eis presu%ed to be con&u#al in nature. This presu%ption stands, absentan" clear, cate#orical, and convincin# evidence that the propert" isparaphernal. !on&u#al propert" cannot be held liable for the personalobli#ation contracted b" one spouse, unless so%e advanta#e or benefit is sho'n to have accrued to the con&u#al partnership.

The !ase

(efore the !ourt is a Petition for Revie' ) under Rule *+ of the Rules of !ourt, challen#in# the Nove%ber , -- Decision and theSepte%ber ) , --/ Resolution / of the !ourt of 0ppeals 1!02 in !034R !V No. 5-6/6. The assailed Decision disposed as follo's7

89: R FOR , pre%ises considered, the Decision appealed fro% ishereb" R V RS D and S T 0SID . The Sheriff;s !ertificate of Saledated 0u#ust ) , )6> and VOID.8 *

The !0 denied reconsideration in its Septe%ber ) , --/ Resolution.

The Facts

The undisputed factual findin#s of the !0 are as follo's7

8Involved in the suit is a +- s?uare %eters 1sic2 parcel of lot located atRes. Sec. ;@;, (a#uio !it", re#istered in the na%e of Muriel Puca"Aa%ane, 'ife of >eonardo Aa%ane, BrespondentC herein, under Transfer !ertificate of Title No. ) *6).

80s a result of a %otion for e$ecution of a char#in# lien filed b" 0tt".4uiller%o F. De 4u %an in !ivil !ase No. )


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sho'n to have been used for the purpose. That the land 'as ac?uireddurin# the spouses; coverture 'as sufficientl" established b" the T!Tand the Deed of 0bsolute Sale, both indicatin# that Muriel Puca"Aa%ane 'as 8%arried to >eonardo Aa%ane8G and b" the undisputedtesti%on" of the previous o'ner, u#ene Puca". (ecause of petitioners; failure to establish that the land in ?uestion had beenac?uired b" Muriel usin# her e$clusive funds, the !0 concluded thatthe contested land 'as con&u#al propert".

The appellate court further held thus7

8$ $ $ BTChe disputed propert" bein# a con&u#al propert" of BrespondentCand his 'ife, and absent an" sho'in# of so%e advanta#e or benefitthat accrued to their con&u#al partnership fro% the transaction bet'eenthe Puca" sisters and 0tt". De 4u %an, the public auction sale of thesub&ect propert" in favor of BpetitionersC is null and void.8 ))

:ence, this Petition .)

Issues

Petitioners sub%it the follo'in# issues for our consideration7

8I. The !ourt of 0ppeals #ravel" erred in ta in# co#ni anceof the appeal and in not dis%issin# the sa%e, despite thefact that the respondent failed to perfect his appeal 'ithin the)+3da" re#le%entar" period set b" the Rules of !ourt.

8II. The !ourt of 0ppeals #ravel" erred in declarin# thesub&ect propert" as con&u#al propert", despite the e$istenceof clear evidence sho'in# that the sub&ect propert" is thee$clusive paraphernal propert" of Muriel 'ho, even durin#her lifeti%e, al'a"s clai%ed the said propert" as her o'ne$clusive paraphernal propert" and not as propert" co3o'ned 'ith her husband, the respondent herein. 1avvphil.net

8III. The !ourt of 0ppeals, assu%in#, e$ #rati ar#u%enti, that

the sub&ect propert" is con&u#al propert" bet'eenrespondent and Muriel, #ravel" erred in rulin# that the sa%ecannot ans'er for the char#in# lien of 0tt". 4uiller%o de4u %an in !ivil !ase No. )


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0rticle )5- of the Ne' !ivil !ode provides that 8all propert" of the%arria#e is presu%ed to belon# to the con&u#al partnership, unless itbe proved that it pertains e$clusivel" to the husband or to the 'ife.8 )

0s a conditio sine qua non for the operation of this article in favor of the con&u#al partnership, the part" 'ho invo es the presu%ption %ustfirst prove that the propert" 'as ac?uired durin# the %arria#e. /

In other 'ords, the presu%ption in favor of con&u#alit" does notoperate if there is no sho'in# of when the propert" alle#ed to becon&u#al 'as ac?uired . * Moreover, the presu%ption %a" be rebutted

onl" 'ith stron#, clear, cate#orical and convincin# evidence .+

There%ust be strict proof of the e$clusive o'nership of one of the spouses, 5

and the burden of proof rests upon the part" assertin# it .

The !0 co%%itted no error in declarin# that the parcel of landbelon#ed to the con&u#al partnership of Spouses Muriel and >eonardoAa%ane. The" ac?uired it fro% u#ene Puca" on Februar" , )65 , <

or specificall" durin# the %arria#e. 6 9e then follo' the rule that proof of the ac?uisition of the sub&ect propert" durin# a %arria#e suffices torender the statutor" presu%ption operative. It is clear enou#h that thepresentl" disputed piece of land pertains to the con&u#al partnership.

Petitioners concede that the propert" 'as ac?uired durin# thesubsistence of the %arria#e of Muriel to respondent. /- Nonetheless,

the" insist that it belon#ed e$clusivel" to her for the follo'in# reasons7

First . Respondent never denied nor opposed her clai% in!ivil !ase No. +-+3R, 'hich she had filed durin# her lifeti%eGor in 0434R Sp. No. -)5)5 1entitled "Muriel Pucay Yamanev. Josephine Go" 2, that the disputed parcel of land 'as her e$clusive paraphernal propert". The" alle#e that his failure tofile a denial or opposition in those cases is tanta%ount to a

&udicial ad%ission that %ilitates a#ainst his belated clai%.

Second . The Deed of 0bsolute Sale of the propert" is in thesole na%e of Muriel. Petitioners posit that, had the spouses

&ointl" purchased this piece of land, the docu%ent shouldhave indicated this fact or carried the na%e of respondent as

bu"er.

hird . The failure of respondent to redee% the parcel of land'ithin the rede%ption period after the auction sale indicatedthat he 'as not its co3o'ner.

9e 'ill discuss the three ar#u%ents seriati%.

Unilateral Declaration

Respondent;s interest cannot be pre&udiced b" the clai% of Muriel inher !o%plaint in !ivil !ase No. +-+3R that the sub&ect parcel of land'as her paraphernal propert". Si#nificantl", the nature of a propert" 33

'hether con&u#al or paraphernal 33 is deter%ined b" la' and not b" the'ill of one of the spouses. /) Thus, no unilateral declaration b" onespouse can chan#e the character of a con&u#al propert" ./

(esides, the issue presented in !ivil !ase No. +-+3R 'as not thenature of the sub&ect piece of land bein# levied upon, but 'hether 0tt".4uiller%o de 4u %an 'as entitled to a char#in# lien. In that case,Muriel clai%ed that she had not officiall" retained hi% as counsel, andthat no la'"er3client relationship had been established bet'eenthe% . //

Deed and Title in the Name of One Spouse

Further, the %ere re#istration of a propert" in the na%e of one spousedoes not destro" its con&u#al nature . /* :ence, it cannot be contendedin the present case that, si%pl" because the title and the Deed of Salecoverin# the parcel of land 'ere in the na%e of Muriel alone, it 'astherefore her personal and e$clusive propert". In concludin# that it 'asparaphernal, the trial court;s reliance on Stuart v. Aatco /+ 'as clearl"erroneous.

0s stated earlier, to rebut the presu%ption of the con&u#al nature of thepropert", petitioners %ust present clear and convincin# evidence. 9e

affir% and ?uote belo', for eas" reference, the relevant dispositions of the !07

8$ $ $. 9e are unable to #o alon# 'ith Bpetitioners;C contention that thesub&ect propert" 'as ac?uired b" Muriel 'ith her e$clusive funds. Merere#istration of the contested propert" in the na%e of the 'ife is notsufficient to establish the paraphernal nature of the propert". Thisre%inds =s of the teachin# in the recent case of !iancin v. ourt of

#ppeals , that all the propert" ac?uired b" the spouses, re#ardless of in'hose na%e the sa%e is re#istered, durin# the %arria#e is presu%edto belon# to the con&u#al partnership of #ains, unless it is proved that itpertains e$clusivel" to the husband or to the 'ife. To ?uote7

80s a #eneral rule, all propert" ac?uired b" the spouses, re#ardless of

in 'hose na%e the sa%e is re#istered, durin# the %arria#e ispresu%ed to belon# to the con&u#al partnership of #ains, unless it isproved that it pertains e$clusivel" to the husband or to the 'ife. In thecase at bar, the fishpond lease ri#ht is not paraphernal havin# beenac?uired durin# the coverture of the %arria#e bet'een Matilde andTiburcio, 'hich 'as on 0pril 6, )6*-. The fact that the #rant 'as solel"in the na%e of Matilde did not %a e the propert" paraphernal propert".9hat 'as %aterial 'as the ti%e the fishpond lease ri#ht 'as ac?uiredb" the #rantee, and that 'as durin# the la'ful e$istence of Matilde;s%arria#e to Tiburcio.

8$ $ $ BTChis presu%ption is rebuttable, but onl" 'ith stron#, clear andconvincin# evidence. The burden of provin# that the propert" belon#se$clusivel" to the 'ife rests upon the part" assertin# it. Mere assertion

of the propert";s paraphernal nature is not sufficient.8

8The record as 'ell as the fore#oin# established &urisprudence lead usto conclude that the contested propert" 'as indeed ac?uired durin# the%arria#e of herein BrespondentC and Muriel. To prove that it isnonetheless paraphernal propert", it is incu%bent upon BpetitionersC toadduce stron#, clear and convincin# evidence that Muriel bou#ht thesa%e 'ith her e$clusive funds. BPetitionersC failed to dischar#e theburden. No'here in the evidence presented b" the% do 9e find an"indication that the land in ?uestion 'as ac?uired b" Muriel 'ith her e$clusive funds. The presu%ption not havin# been overthro'n, theconclusion is that the contested land is con&u#al propert".8 /5

Non-Redemption After the Auction Sale

The non3rede%ption of the propert" b" respondent 'ithin the periodprescribed b" la' did not, in an" 'a", indicate the absence of his ri#htor title to it. !ontrar" to petitioners; alle#ation, the fact is that he filed aThird3Part" !lai% / 'ith the sheriff, upon learnin# of the lev" andi%pendin# auction sale. This fact 'as specificall" ad%itted b"petitioners . /< Respondent clai%ed that the parcel of land 'as con&u#al,and that he could not ans'er for the separate obli#ation of his 'ife andher sisters . /6 Not'ithstandin# his clai%, the disputed piece of land 'assold at a public auction on 0u#ust )), )6


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>i e'ise, in his Opposition 10ns'er2 to the Petition in >R! File 0d%.!ase No.


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9: R FOR , the OMNI(=S MOTION for the approval of thesale of Philinterlife shares of stoc and release of Ma. DivinaOrta e 3 nderes as Special 0d%inistratri$ is hereb" denied. 5

On 0u#ust 6, )66 , the intestate court issued another order #rantin# the %otion of Special 0d%inistratri$ nderes for theannul%ent of the March *, )6< %e%orandu% of a#ree%ent or e$tra&udicial partition of estate. The court reasoned that7

In consonance 'ith the Order of this !ourt dated 0u#ust )), )66D NAIN4 the approval of the sale of Philinterlife shares of stoc sand release of Ma. Divina Orta e 3 nderes as Special

0d%inistratri$, the 8=r#ent Motion to Declare Void #% &nitioMe%orandu% of 0#ree%ent8 dated Dece%ber )6, )66+. . . ishereb" i%pliedl" partiall" resolved insofar as thetransfer 'aiver renunciation of the Philinterlife shares of stoc areconcerned, in particular, No. +, 61c2, )-1b2 and ))1d21ii2 of theMe%orandu% of 0#ree%ent.

9: R FOR , this !ourt hereb" declares the Me%orandu% of 0#ree%ent dated March *, )6< e$ecuted b" Euliana S. Orta e ,Rafael S. Orta e and Eose S. Orta e as partiall" void a% initioinsofar as the transfer 'aiver renunciation of the Philinterlife

shares of stoc s are concerned.

0##rieved b" the above3stated orders of the intestate court, EoseOrta e filed, on Dece%ber , )66 , a petition for certiorari in the!ourt of 0ppeals. The appellate court denied his petition, ho'ever,rulin# that there 'as no le#al &ustification 'hatsoever for thee$tra&udicial partition of the estate b" Eose Orta e , his brother Rafael Orta e and %other Euliana Orta e durin# the pendenc"of the settle%ent of the estate of Dr. Orta e , 'ithout the re?uisiteapproval of the intestate court, 'hen it 'as clear that there 'ereother heirs to the estate 'ho stood to be pre&udiced thereb".!onse?uentl", the sale %ade b" Eose Orta e and his %other Euliana Orta e to F>04 of the shares of stoc the" invalidl"

appropriated for the%selves, 'ithout approval of the intestatecourt, 'as void. <

Special 0d%inistrator Eose Orta e filed a %otion for reconsideration of the !ourt of 0ppeals decision but it 'as denied.:e elevated the case to the Supre%e !ourt via petition for revie'under Rule *+ 'hich the Supre%e !ourt dis%issed on October +,)66ee and 0l%a 0##abao, 'iththe rest of the F>043controlled board of directors, increased theauthori ed capital stoc of Philinterlife, dilutin# in the process the+-. +K controllin# interest of the decedent, Dr. EuvencioOrta e , in the insurance co%pan". 6 This beca%e the sub&ect of aseparate action at the Securities and $chan#e !o%%ission filedb" private respondent3Special 0d%inistratri$ nderes a#ainstpetitioner Eose >ee and other %e%bers of the F>043controlledboard of Philinterlife on Nove%ber , )66*. Thereafter, variouscases 'ere filed b" Eose >ee as president of Philinterlife andEuliana Orta e and her sons a#ainst private respondent3Special

0d%inistratri$ nderes in the S ! and civil courts. )- So%eho', allthese cases 'ere connected to the core dispute on the le#alit" of

the sale of decedent Dr. Orta e Js Philinterlife shares of stoc topetitioner F>04, represented b" its president, herein petitioner Eose >ee 'ho later beca%e the president of Philinterlife after thecontroversial sale.

On Ma" , ---, private respondent3Special 0d%inistratri$nderes and her siblin#s filed a %otion for e$ecution of the Ordersof the intestate court dated 0u#ust )) and 0u#ust 6, )66because the orders of the intestate court nullif"in# the sale 1upheldb" the !ourt of 0ppeals and the Supre%e !ourt2 had lon# beca%efinal. Respondent3Special 0d%inistratri$ nderes served a cop" of the %otion to petitioners Eose >ee and 0l%a 0##abao as presidentand secretar", respectivel", of Philinterlife, )) but petitioners i#noredthe sa%e.

On Eul" 5, ---, the intestate court #ranted the %otion for e$ecution, the dispositive portion of 'hich read7

9: R FOR , pre%ises considered, let a 'rit of e$ecution issueas follo's7

). !onfir%in# the nullit" of the sale of the ,- 6Philinterlife shares in the na%e of the state of Dr.Euvencio Orta e to Filipino >oan 0ssistance 4roup1F>042G

. !o%%andin# the President and the !orporateSecretar" of Philinterlife to reinstate in the stoc andtransfer boo of Philinterlife the ,- 6 Philinterlife sharesof stoc in the na%e of the state of Dr. Euvencio P.Orta e as the o'ner thereof 'ithout pre&udice to other clai%s for violation of pre3e%ptive ri#hts pertainin# to thesaid ,- 6 Philinterlife sharesG

/. Directin# the President and the !orporate Secretar" of Philinterlife to issue stoc certificates of Philinterlife for ,- 6 shares in the na%e of the state of Dr. Euvencio P.Orta e as the o'ner thereof 'ithout pre&udice to other clai%s for violations of pre3e%ptive ri#hts pertainin# tothe said ,- 6 Philinterlife shares and,

*. !onfir%in# that onl" the Special 0d%inistratri$, Ma.Divina Orta e 3 nderes, has the po'er to e$ercise allthe ri#hts appurtenant to the said shares, includin# theri#ht to vote and to receive dividends.

+. Directin# Philinterlife and or an" other person or persons clai%in# to represent it or other'ise, toac no'led#e and allo' the said Special 0d%inistratri$ to

e$ercise all the aforesaid ri#hts on the said shares and torefrain fro% resortin# to an" action 'hich %a" tenddirectl" or indirectl" to i%pede, obstruct or bar the freee$ercise thereof under pain of conte%pt.

5. The President, !orporate Secretar", an" responsibleofficer s of Philinterlife, or an" other person or personsclai%in# to represent it or other'ise, are hereb" directedto co%pl" 'ith this order 'ithin three 1/2 da"s fro%receipt hereof under pain of conte%pt.


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. The Deput" Sheriffs 0denauer Rivera and Pedro (or&aare hereb" directed to i%ple%ent the 'rit of e$ecution'ith dispatch to forestall an" and or further da%a#e tothe state.

SO ORD R D. )

In the several occasions that the sheriff 'ent to the office of petitioners to e$ecute the 'rit of e$ecution, he 'as barred b" thesecurit" #uard upon petitionersJ instructions. Thus, privaterespondent3Special 0d%inistratri$ nderes filed a %otion to citeherein petitioners Eose >ee and 0l%a 0##abao 1president andsecretar", respectivel", of Philinterlife2 in conte%pt. )/

Petitioners >ee and 0##abao subse?uentl" filed before the !ourtof 0ppeals a petition for certiorari, doc eted as !0 4.R. SP No.+6 /5. Petitioners alle#ed that the intestate court #ravel" abusedits discretion in 1)2 declarin# that the o'nership of F>04 over thePhilinterlife shares of stoc 'as null and voidG 1 2 orderin# thee$ecution of its order declarin# such nullit" and 1/2 deprivin# thepetitioners of their ri#ht to due process.

On Eul" 5, ---, the !ourt of 0ppeals dis%issed the petitionoutri#ht7

9e are constrained to DISMISS O=TRI4:T the present petitionfor certiorari and prohibition 'ith pra"er for a te%porar" restrainin#order and or 'rit of preli%inar" in&unction in the li#ht of thefollo'in# considerations7

). The assailed Order dated 0u#ust )), )66 of therespondent &ud#e had lon# beco%e final and e$ecutor"G

. The certification on non3foru% shoppin# is si#ned b"onl" one 1)2 of the three 1/2 petitioners in violation of theRulesG and

/. $cept for the assailed orders and 'rit of e$ecution,deed of sale 'ith ri#ht to repurchase, deed of sale of shares of stoc s and o%nibus %otion, the petition is notacco%panied b" such pleadin#s, docu%ents and other %aterial portions of the record as 'ould support thealle#ations therein in violation of the second para#raph,Rule 5+ of the )66 Rules of !ivil Procedure, asa%ended.

Petition is DISMISS D.

SO ORD R D.)*

The %otion for reconsideration filed b" petitioners >ee and 0##abao of the above decision 'as denied b" the !ourt of 0ppeals on October /-, ---7

This resolves the 8ur#ent %otion for reconsideration8 filed b" thepetitioners of our resolution of Eul" 5, --- dis%issin# outri#htl"the above3entitled petition for the reason, a%on# others, that theassailed Order dated 0u#ust )), )66 of the respondent Eud#ehad lon# beco%e final and e$ecutor".

Dura le$, sed le$.

9: R FOR , the ur#ent %otion for reconsideration is hereb"D NI D, for lac of %erit.

SO ORD R D. )+

On Dece%ber *, ---, petitioners elevated the case to theSupre%e !ourt throu#h a petition for revie' under Rule *+ but onDece%ber )/, ---, 'e denied the petition because there 'as nosho'in# that the !ourt of 0ppeals in !0 4.R. SP No. +6 /5co%%itted an" reversible error to 'arrant the e$ercise b" theSupre%e !ourt of its discretionar" appellate &urisdiction. )5

:o'ever, upon %otion for reconsideration filed b" petitioners >eeand 0##abao, the Supre%e !ourt #ranted the %otion andreinstated their petition on Septe%ber +, --). The parties 'erethen re?uired to sub%it their respective %e%oranda.

Mean'hile, private respondent3Special 0d%inistratri$ nderes, onEul" )6, ---, filed a %otion to direct the branch cler of court inlieu of herein petitioners >ee and 0##abao to reinstate the na%e of Dr. Orta e in the stoc and transfer boo of Philinterlife and issuethe correspondin# stoc certificate pursuant to Section )-, Rule /6of the Rules of !ourt 'hich provides that 8the court %a" direct theact to be done at the cost of the disobedient part" b" so%e other person appointed b" the court and the act 'hen so done shallhave the effect as if done b" the part".8 Petitioners >ee and

0##abao opposed the %otion on the #round that the intestatecourt should refrain fro% actin# on the %otion because the issuesraised therein 'ere directl" related to the issues raised b" the% intheir petition for certiorari at the !ourt of 0ppeals doc eted as !034.R. SP No. +6 /5. On October /-, ---, the intestate court#ranted the %otion, rulin# that there 'as no prohibition for theintestate court to e$ecute its orders inas%uch as the appellatecourt did not issue an" TRO or 'rit of preli%inar" in&unction.

On Dece%ber /, ---, petitioners >ee and 0##abao filed a petition

for certiorari in the !ourt of 0ppeals, doc eted as !034.R. SP No.5 *5), ?uestionin# this ti%e the October /-, --- order of theintestate court directin# the branch cler of court to issue the stoccertificates. The" also ?uestioned in the !ourt of 0ppeals the order of the intestate court nullif"in# the sale %ade in their favor b"Euliana Orta e and Eose Orta e . On Nove%ber -, -- , the!ourt of 0ppeals denied their petition and upheld the po'er of theintestate court to e$ecute its order. Petitioners >ee and 0##abaothen filed %otion for reconsideration 'hich at present is stillpendin# resolution b" the !ourt of 0ppeals.

Petitioners Eose >ee and 0l%a 0##abao 1president and secretar",respectivel", of Philinterlife2 and F>04 no' raise the follo'in#

errors for our consideration7

The !ourt of 0ppeals co%%itted #rave reversible RROR7

0. In failin# to reconsider its previous resolution den"in#the petition despite the fact that the appellate courtJs%ista e in apprehendin# the facts had beco%e patentand evident fro% the %otion for reconsideration and theco%%ent of respondent nderes 'hich had ad%itted thefactual alle#ations of petitioners in the petition as 'ell asin the %otion for reconsideration. Moreover, theresolution of the appellate court den"in# the %otion for reconsideration 'as contained in onl" one pa#e 'ithout


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even touchin# on the substantive %erits of thee$haustive discussion of facts and supportin# la' in the%otion for reconsideration in violation of the Rule onad%inistrative due processG

(. in failin# to set aside the void orders of the intestatecourt on the erroneous #round that the orders 'ere finaland e$ecutor" 'ith re#ard to petitioners even as thelatter 'ere never notified of the proceedin#s or order cancelin# its o'nershipG

!. in not findin# that the intestate court co%%itted #raveabuse of discretion a%ountin# to e$cess of &urisdiction1)2 'hen it issued the O%nibus Order nullif"in# theo'nership of petitioner F>04 over shares of stoc 'hich'ere alle#ed to be part of the estate and 1 2 'hen itissued a void 'rit of e$ecution a#ainst petitioner F>04as present o'ner to i%ple%ent %erel" provisional orders,thereb" violatin# F>04Js constitutional ri#ht a#ainstdeprivation of propert" 'ithout due processG

D. In failin# to declare null and void the orders of theintestate court 'hich nullified the sale of shares of stoc

bet'een the le#iti%ate heir Eose S. Orta e andpetitioner F>04 because of sett led la' and

&urisprudence, i.e., that an heir has the ri#ht to dispose of the decedentJs propert" even if the sa%e is under ad%inistration pursuant to !ivil !ode provision thatpossession of hereditar" propert" is trans%itted to theheir the %o%ent of death of the decedent 10cedebo vs.

0besa%is, ) S!R0 )6*2G

. In disre#ardin# the final decision of the Supre%e !ourtin 4.R. No. ) 04 is alread" a closed case. To reopen said issue 'ould set abad precedent, openin# the door 'ide open for dissatisfied partiesto reliti#ate unfavorable decisions no end. This is co%pletel"

ini%ical to the orderl" and efficient ad%inistration of &ustice.

The said decision of the !ourt of 0ppeals in !034.R. SP No.*5/* affir%in# the nullit" of the sale %ade b" Eose Orta e andhis %other Euliana Orta e of the Philinterlife shares of stoc read7

PetitionerJs asseverations relative to said B%e%orandu%Ca#ree%ent 'ere scuttled durin# the hearin# before this !ourt thus7

E=STI! 0L=INO7

!ounsel for petitioner, 'hen the Me%orandu% of 0#ree%ent 'as e$ecuted, did the children of EulianaSal#ado no' alread" that there 'as a clai% for share inthe inheritance of the children of NovicioH

0TTA. !0>IM047

Aour :onor please, at that ti%e, Aour :onor, it is alread"no'n to the%.

E=STI! 0L=INO7

9hat can be "our le#al &ustification for e$tra&udicialsettle%ent of a propert" sub&ect of intestate proceedin#s

'hen there is an adverse clai% of another set of heirs,alle#ed heirsH 9hat 'ould be the le#al &ustification for e$tra3&udiciall" settlin# a propert" under ad%inistration'ithout the approval of the intestate courtH

0TTA. !0>IM047

9ell, Aour :onor please, in that e$tra3&udicial settle%entthere is an approval of the honorable court as to thepropert"Js partition $ $ $. There 'ere as %entioned b" therespondentsJ counsel, Aour :onor.

0TTA. (=A!O7

No

E=STI! 0L=INO7

The point is, there can be no ad&udication of a propert"under intestate proceedin#s 'ithout the approval of thecourt. That is basic unless "ou can present &ustificationon that. In fact, there are t'o steps7 first, "ou as leaveand then e$ecute the docu%ent and then as for approval of the docu%ent e$ecuted. No', is there an"


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le#al &ustification to e$clude this particular transactionfro% those stepsH

0TTA. !0>IM047

None, Aour :onor.

0TTA. (=A!O7

9ith that ad%ission that there is no le#al &ustification,Aour :onor, 'e rest the case for the private respondent.:o' can the lo'er court be accused of abusin# itsdiscretionH 1pa#es //3/+, TSN of Eanuar" 6, )66042, 'ithout court approval, 'as li e'ise void.

0n heir can sell his ri#ht, interest, or participation in the propert"under ad%inistration under 0rt. +// of the !ivil !ode 'hichprovides that possession of hereditar" propert" is dee%edtrans%itted to the heir 'ithout interruption fro% the %o%ent of death of the decedent. - :o'ever, an heir can onl" alienate suchportion of the estate that %a" be allotted to hi% in the division of the estate b" the probate or intestate court after final ad&udication,that is, after all debtors shall have been paid or the devisees or le#atees shall have been #iven their shares. ) This %eans that anheir %a" onl" sell his ideal or undivided share in the estate, notan" specific propert" therein. In the present case, Euliana Orta eand Eose Orta e sold specific properties of the estate 1),-)* and),-)) shares of stoc in Philinterlife2 in favor of petitioner F>04.This the" could not la'full" do pendin# the final ad&udication of theestate b" the intestate court because of the undue pre&udice it'ould cause the other clai%ants to the estate, as 'hat happenedin the present case.

Euliana Orta e and Eose Orta e sold specific properties of theestate, 'ithout court approval. It is 'ell3settled that court approvalis necessar" for the validit" of an" disposition of the decedentJsestate. In the earl" case of Godoy vs. 'rellano , 'e laid do'n therule that the sale of the propert" of the estate b" an ad%inistrator 'ithout the order of the probate court is void and passes no title tothe purchaser. 0nd in the case of !illena vs. ourt of #ppeals , / 'eruled that7

BICt %ust be e%phasi ed that the ?uestioned properties 1fishpond2'ere included in the inventor" of properties of the estate sub%ittedb" then 0d%inistratri$ Fausta !arreon :errera on Nove%ber )*,)6 *. Private respondent 'as appointed as ad%inistratri$ of theestate on March /, )6 5 in lieu of Fausta !arreon :errera. OnNove%ber ), )6


10/48

previous case of Dolores Vda. De 4il vs. 0#ustin !ancio 1)* S!R06 2 'herein 9e e%phasi ed that it is 'ithin the &urisdiction of aprobate court to approve the sale of properties of a deceasedperson b" his prospective heirs before final ad&udication. $ $ $

It bein# settled that propert" under ad%inistration needs theapproval of the probate court before it can be disposed of, an"unauthori ed disposition does not bind the estate and is null andvoid. 0s earl" as )6 ) in the case of 4odo" vs. Orellano 1* Phil/* 2, 9e laid do'n the rule that a sale b" an ad%inistrator of propert" of the deceased, 'hich is not authori ed b" the probatecourt is null and void and title does not pass to the purchaser.

There is hardl" an" doubt that the probate court can declare nulland void the disposition of the propert" under ad%inistration, %adeb" private respondent, the sa%e havin# been effected 'ithoutauthorit" fro% said court. &t is the pro%ate court that has the power to authori(e and)or approve the sale *Section + and ,$ -ule /0$hence$ a fortiori$ it is said court that can declare it null and void for as lon as the proceedin s had not %een closed or terminated. Touphold petitionerJs contention that the probate court cannot annulthe unauthori ed sale, 'ould render %eanin#less the po'er pertainin# to the said court. 1(on#a vs. Soler, S!R0 ++2.

1emphasis ours 2

Our &urisprudence is therefore clear that 1)2 an" disposition of estate propert" b" an ad%inistrator or prospective heir pendin#final ad&udication re?uires court approval and 1 2 an" unauthori eddisposition of estate propert" can be annulled b" the probate court,there bein# no need for a separate action to annul theunauthori ed disposition.

The ?uestion no' is7 can the intestate or probate court e$ecute itsorder nullif"in# the invalid saleH

9e see no reason 'h" it cannot. The intestate court has the po'er

to e$ecute its order 'ith re#ard to the nullit" of an unauthori edsale of estate propert", other'ise its po'er to annul theunauthori ed or fraudulent disposition of estate propert" 'ould be%eanin#less. In other 'ords, enforce%ent is a necessar" ad&unctof the intestate or probate courtJs po'er to annul unauthori ed or fraudulent transactions to prevent the dissipation of estate propert"before final ad&udication.

Moreover, in this case, the order of the intestate court nullif"in# thesale 'as affir%ed b" the appellate courts 1the !ourt of 0ppeals in!034.R. SP No. *5/* dated Eune /, )66< and subse?uentl" b"the Supre%e !ourt in 4.R. No. )/+) dated October 6, )66ee, 0l%a 0##abao and F>04, ho'ever, contendthat the probate court could not issue a 'rit of e$ecution 'ithre#ard to its order nullif"in# the sale because said order 'as%erel" provisional7

The onl" authorit" #iven b" la' is for respondent &ud#e todeter%ine provisionall" 'hether said shares are included or

e$cluded in the inventor" In orderin# the e$ecution of the orders,respondent &ud#e acted in e$cess of his &urisdiction and #rossl"violated settled la' and &urisprudence, i.e., that the determination%y a pro%ate or intestate court of whether a property is included or e2cluded in the inventory of the estate %ein provisional in nature$cannot %e the su%3ect of e2ecution . * 1e%phasis ours2

PetitionersJ ar#u%ent is %isplaced. There is no ?uestion, based onthe facts of this case, that the Philinterlife shares of stoc 'ere partof the estate of Dr. Euvencio Orta e fro% the ver" start as in factthese shares 'ere included in the inventor" of the properties of theestate sub%itted b" Rafael Orta e after he and his brother, EoseOrta e , 'ere appointed special ad%inistrators b" the intestatecourt. +

The controvers" here actuall" started 'hen, durin# the pendenc"of the settle%ent of the estate of Dr. Orta e , his 'ife EulianaOrta e sold the ),-)* Philinterlife shares of stoc in favor petitioner F>04 'ithout the approval of the intestate court. :er sonEose Orta e later sold the re%ainin# ),-)) Philinterlife sharesalso in favor of F>04 'ithout the approval of the intestate court.

9e are not dealin# here 'ith the issue of inclusion or e$clusion of

properties in the inventor" of the estate because there is no?uestion that, fro% the ver" start, the Philinterlife shares of stoc'ere o'ned b" the decedent, Dr. Euvencio Orta e . Ra+&e', >ea'e o* e'*e &e'e >)+& +&e e44e + o4 +&e sa-e 5a e y +&ee e e*+?s &e)'s, Ju-)a*a O'+a@e; a* Jose O'+a@e;, >)+&ou++&e 'eAu)'e app'o a- o4 +&e )*+es+a+e ou'+. This bein# so, thecontention of petitioners that the deter%ination of the intestatecourt 'as %erel" provisional and should have been threshed out ina separate proceedin# is incorrect.

The petitioners Eose >ee and 0l%a 0##abao ne$t contend that the'rit of e$ecution should not be e$ecuted a#ainst the% becausethe" 'ere not notified, nor the" 'ere a'are, of the proceedin#s

nullif"in# the sale of the shares of stoc .

9e are not persuaded. The title of the purchaser li e hereinpetitioner F>04 can be struc do'n b" the intestate court after aclear sho'in# of the nullit" of the alienation. This is the lo#icalconse?uence of our rulin# in Godoy and in several subse?uentcases. 5 T&e sa-e o4 a*y p'ope'+y o4 +&e es+a+e y a*a 5)*)s+'a+o' o' p'ospe +) e &e)' >)+&ou+ o' e' o4 +&e p'o a+eo' )*+es+a+e ou'+ )s o) a* passes *o +)+-e +o +&e pu' &ase'.Thus, in Juan 4ao et al. vs. 5on. Melencio Geneto$ G.-. 6o.78+71$ June 1/$ 1/ 7 , 'e ordered the probate court to cancel thetransfer certificate of title issued to the vendees at the instance of the ad%inistrator after findin# that the sale of real propert" under probate proceedin#s 'as %ade 'ithout the prior approval of thecourt. The dispositive portion of our decision read7

IN VI 9 OF T: FOR 4OIN4 !ONSID R0TIONS, the assailedOrder dated Februar" ) and VOIDand hereb" S T 0SID . !onse?uentl", the sale in favor of SoteroDioniosio III and b" the latter to 9illia% 4o is li e'ise declaredN=>> and VOID. The Transfer !ertificate of Title issued to thelatter is hereb" ordered cancelled.

It #oes 'ithout sa"in# that the increase in PhilinterlifeJs authori edcapital stoc , approved on the vote of petitionersJ non3e$istent


11/48

shareholdin#s and obviousl" calculated to %a e it difficult for Dr.Orta e Js estate to reassu%e its controllin# interest in Philinterlife,'as li e'ise void a% initio.

Petitioners ne$t ar#ue that the" 'ere denied due process.

9e do not thin so.

The facts sho' that petitioners, for reasons no'n onl" to the%,

did not appeal the decision of the intestate court nullif"in# the saleof shares of stoc in their favor. Onl" the vendor, Eose Orta e ,appealed the case. 0 careful revie' of the records sho's thatpetitioners had actual no'led#e of the estate settle%entproceedin#s and that the" ne' private respondent nderes 'as?uestionin# therein the sale to the% of the Philinterlife shares of stoc .

It %ust be noted that private respondent3Special 0d%inistratri$nderes filed before the intestate court 1RT! of Lue on !it",

(ranch ee et al.Cof the sub&ect shares of stoc s are void.

$ $ $ $ $ $ $ $ $

9ith respect to the alle#ed e$tra&udicial partition of the shares of stoc o'ned b" the late Dr. Euvencio Orta e , 'e rule that the%atter properl" belon#s to the &urisdiction of the re#ular court'here the intestate proceedin#s are currentl" pendin#. <

9ith this resolution of the S ! hearin# officer dated as earl" asMarch *, )66+ reco#ni in# the &urisdiction of the intestate court todeter%ine the validit" of the e$tra&udicial partition of the estate of Dr. Orta e and the subse?uent sale b" the heirs of the decedentof the Philinterlife shares of stoc to petitioners, ho' can

petitioners clai% that the" 'ere not a'are of the intestateproceedin#sH

Further%ore, 'hen the resolution of the S ! hearin# officer reached the Supre%e !ourt in )665 1doc eted as 4.R. ) i#a"a Novicio andchildren represented the%selves to be the co%%on la' 'ife andille#iti%ate children of the late Orta e G that on March *, )6< , thesurvivin# spouse Euliana Orta e , on her behalf and for her %inor son 0ntonio, e$ecuted a Me%orandu% of 0#ree%ent 'ith her other sons Rafael and Eose, both surna%ed Orta e , dividin# theestate of the deceased co%posed of his one3half 1) 2 share in thecon&u#al propertiesG that in the said Me%orandu% of 0#ree%ent,Eose S. Orta e ac?uired as his share of the estate the ),/ 6shares of stoc in PhilinterlifeG that on March *, )6< , Euliana andRafael assi#ned their respective shares of stoc in Philinterlife toEoseG that contrar" to the contentions of petitioners, privaterespondents Eose >ee, !arlos >ee, (en&a%in >ee and 0l%a

0##abao beca%e stoc holders of Philinterlife on March /, )6


12/48

'ere notified of the %otion for e$ecution of the Orders of theintestate court, the" i#nored the sa%e. !learl", petitioners aloneshould bear the bla%e.

Petitioners ne$t contend that 'e are bound b" our rulin# in 4.R.No. ) > D and theRe#ister of Deeds of Lue on !it" is hereb" ordered to ISS= ane' one in lieu thereof in the na%es of both usebio Pi#aoJschildren and Sa%uel Rabanillo, 'ith the front half portion of the lotpertainin# to the latter and the bac half portion pertainin# to thefor%er.

>et a cop" of this decision be furnished the Re#ister of Deeds of Lue on !it" for proper action.

SO ORD R D .

The antecedent facts follo'.

So%eti%e in )6* , the late usebio Pi#ao, petitionersJ father,to#ether 'ith his fa%il", settled on a *- s?uare %eter lot locatedat 6 1no' )- 2 @3+th Street, @a%unin#, Lue on !it". The parcelof land used to be #overn%ent propert" o'ned b" the PeopleJs:o%esite and :ousin# !orporation 1P::!2 , / under Transfer

!ertificate of Title 1T!T2 No. < .*

usebio applied for thepurchase of the sub&ect lot and a contract to sell for aconsideration of P),- .)6 'as thereafter entered into b" usebioand P::!.

In )6+6, usebio e$ecuted a deed of assi#n%ent of ri#hts over one3half of the propert" in favor of respondent, for a considerationof P),---. Respondent proceeded to occup" the front half portion,established a residential buildin# thereon, and paid thea%orti ations for the said portion.

In )6 -, usebio e$ecuted a deed of %ort#a#e over the sa%e half3portion of the propert" in favor of respondent. 0fter the

a%orti ations on the sub&ect lot 'ere full" paid in )6 /, the P::!issued a deed of sale over the entire lot in favor of usebio.!onse?uentl", T!T No. )6 6*) 'as issued in usebioJs na%e. In)6


13/48

still in the na%e of usebio. This reconstituted title no lon#er carried the annotation of the adverse clai% of respondent.

In )66 , petitioners e$ecuted an e$tra&udicial settle%ent of usebioJs estate a%on# the%selves, includin# the entire sub&ectlot. 0s a conse?uence, T!T No. +5 )- 'as issued for the entire lotin the na%e of petitioners. Respondent continued to occup" thefront half portion throu#h his tenant, 4il A%ata. On Eanuar" 6,)665, petitioners instituted civil case no. L3653 5 - in theRe#ional Trial !ourt 1RT!2 of Lue on !it", (ranch 6+, a#ainstrespondent and A%ata 'herein the" sou#ht to ?uiet their title over the entire lot and to recover possession of the front half portion.The" averred that usebioJs deed of assi#n%ent and deed of %ort#a#e 'ere clouds on their title 'hich should be nullified. + TheRT! ruled in favor of petitioners7

9: R FOR , &ud#%ent is hereb" rendered in the follo'in#7

). Declarin# BpetitionersC the absolute o'ners of theentire land described in T!T No. +5 )- and declarin# thedeed of assi#n%ent issued b" the late usebio Pi#ao infavor of BrespondentC null and void.

. Orderin# BpetitionersC to pa" BrespondentC the value of the house and i%prove%ents thereon in the event thatthe" choose to appropriate the sa%e in 'hich caseBrespondentC is #iven the ri#ht of retention until he hasbeen rei%bursed b" BpetitionersCG or to co%pelBrespondentC to bu" the land in case the" choose not to.In the latter case, BrespondentC cannot be co%pelled tobu" the land if the value thereof is hi#her than the valueof the i%prove%ents.

/. Dis%issin# the case a#ainst defendant 4il A%ata for lac of cause of action there bein# no privit" of contractbet'een hi% and BpetitionersCG

*. Dis%issin# both BpetitionersJC and BrespondentJsCclai%s for da%a#es and attorne"Js fees there bein# nosatisfactor" 'arrant theretoG and

+. No pronounce%ents as to costs.

IT IS SO ORD R D. 5

0s stated earlier, the !0 reversed the RT! decision and ruled infavor of respondent.

Petitioners filed this petition on the follo'in# #rounds7

I.

T: B!0C RR D IN D !>0RIN4 T:0T T: S=(E !T D DOF 0SSI4NM NT IS V0>ID 0ND T:0T T:R IS NOPRO:I(ITION B040INSTC T: S0> BOFC RI4:TS OV R T:

090RD D >OT M0D (A =S (IO PI40O.

II.

T: B!0C RR D IN D !>0RIN4 T:0T 0 R >0TIONS:IP OFIMP>I D TR=ST OV R T: BON 3:0>FC 1) 2 PORTION OFT: S=(E !T >OT 90S !R 0T D ( T9 N =S (IOPI40O 0ND BR SPOND NTC .

The first issue before us is the validit" of the deed of assi#n%ent'hereb" usebio assi#ned to respondent his ri#hts to half of thelot. Petitioners ar#ue that the lot sub&ect of this case 'as publicland #ranted b" the P::! to their predecessor, usebio. :ence,the" contend that Section ))< of !o%%on'ealth 0ct No. )*) 1!0)*)2 < other'ise no'n as the Public >and 0ct, 'as applicable7

Sec. ))


14/48

Petitioners insist there 'as such a prohibition. To support their clai%, the" re?uest this !ourt to ta e &udicial notice of the fact thatthe pro3for%a conditional contracts3to3 sell bet'een P::! andapplicants for the purchase of its lots contained a condition statin#that 8the applicant a#ree1d2 not to sell, assi#n, encu%ber,%ort#a#e, lease, sublet or in an" other %anner affect his ri#htunder this contract, at an" ti%e, in an" %anner 'hatsoever, in'hole or in part, 'ithout first obtainin# the 'ritten consent of the!orporation.8 0lthou#h the" ad%itted that the" failed to presentdurin# the trial the conditional contract to sell bet'een usebio

and P::!, the" clai%ed that the" did not have a cop" thereof. )5 Infact, 'hat the" sub%itted to this !ourt 'as a cop" of a conditionalcontract to sell bet'een a certain 0r%ando (ernabe and theP::! pertainin# to a lot located at 6* @3+th St., @a%unin#,Lue on !it" ) to prove the e$istence of the afore%entionedcondition. Respondent ob&ects to this atte%pt of petitioners to seead%ission of evidence 'hich 'as presented neither durin# trial nor on appeal. )<

9e a#ree 'ith respondent. 9e cannot ta e co#ni ance of thisdocu%ent the conditional contract to sell bet'een (ernabe andthe P::! alle#ed to be the pro3for%a contract used b" P::! 'ithits applicants 3 'hich petitioners are presentin# for the first ti%e.

This docu%ent is not a%on# the %atters the la' %andatoril"re?uires us to ta e &udicial notice of. )6 Neither can 'e consider it of public no'led#e nor capable of un?uestionable de%onstrationnor ou#ht to be no'n to &ud#es because of their &udicialfunctions . - 9e have held that7

Matters of &udicial notice have three %aterial re?uisites7 1)2 the%atter %ust be one of co%%on and #eneral no'led#eG 1 2 it %ustbe 'ell and authoritativel" settled and not doubtful or uncertainGand 1/2 it %ust be no'n to be 'ithin the li%its of &urisdiction of thecourt. The po'er of ta in# &udicial notice is to be e$ercised b"courts 'ith caution. Ca'e 5us+ e +a e* +&a+ +&e 'eAu)s)+e*o+o')e+y e)se +o p'o ) e +&e5se- es +&e'e>)+& . * 1emphasissupplied 2

usebio, as a bona fide occupant of the sub&ect lot, had a vestedri#ht to bu" the propert". This did not, ho'ever, #ive hi% theunbridled freedo% to transfer his ri#ht to a third part", speciall" one'ho 'as un?ualified to avail of it. =ndoubtedl", the P::! 'asclothed 'ith authorit" to deter%ine if a person 'as ?ualified topurchase a residential lot fro% it. The ri#ht to purchase 'as apersonal ri#ht that the ?ualified applicant, as deter%ined b" P::!,%ust personall" e$ercise. 0s a personal ri#ht, it could not betransferred to &ust another person.

0n" transfer of ri#hts, to be valid, %ust be in line 'ith the polic" of P::! 'hich 'as to provide 8decent housin# for those 'ho %a" befound unable other'ise to provide the%selves there'ith.8 Thus,an" transfer of an applicantJs ri#ht to bu" a lot 'as invalid if done'ithout the consent of P::!. The sa%e polic" 'as enunciated b"the ter%s of the deed of sale. + There is no sho'in# that theP::!Js approval for the assi#n%ent of half of the lot torespondent 'as ever obtained. Stated other'ise, there is no proof that respondent 'ould have been allo'ed to avail of thepreferential ri#hts e$clusivel" #ranted to bona fide occupants of P::!3o'ned lots li e usebio. Thus, the assi#n%ent of ri#hts b"usebio to respondent, 'ho 'as not a bona fide occupant of thelot, frustrated the public polic" of the #overn%ent. It shouldtherefore be struc do'n as null and void.

It follo's that the second issue of 'hether an i%plied trustrelationship 'as created bet'een usebio and his heirs astrustees and respondent as beneficiar" %ust also be resolveda#ainst respondent. 9e do not a#ree 'ith the reasonin# of the !07

$$$ B0Cfter the e$ecution of the deed of assi#n%ent, BrespondentCproceeded to bu" the front half portion fro% P::! b" pa"in# thea%orti ations due thereon in e$ercise of the ri#ht 'hich hepurchased b" 'a" of deed of assi#n%ent. :e also established hisresidence on this portion since he 'as then secure in the

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15/48

no'led#e that he eventuall" 'ill o'n the sa%e portion havin#also purchased this ri#ht to o'n in the deed of assi#n%ent.Therefore, 'hen the purchase price for the entire lot 'as finall"paid, the deed of its conve"ance 'as finall" e$ecuted and the titleto the entire lot 'as issued in usebio Pi#aoJs na%e, an i%pliedtrust relationship 'as created over the front half portion bet'eenPi#ao and BrespondentC.

Per 0rticle )**< of the !ivil !ode, 8there is an i%plied trust 'henpropert" is sold, and the le#al estate is #ranted to one part" but theprice is paid b" another for the purpose of havin# the beneficialinterest of the propert".8 The for%er part" is referred to as thetrustee, 'hile the latter is referred to as the beneficiar".

In the case at bench, the trustee is Pi#ao, 'ho, 'ith the title to theentire lot issued to hi%, holds the front half portion thereof in trustfor BrespondentC, 'ho is the beneficiar".

$$$ $$$ $$$ 5

The !0 declared that 0rticle )**< of the !ivil !ode 'as applicable7

0rt. )**


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Republic of the PhilippinesSUPREME COURT

Manila

S !OND DIVISION

G.R. No. 1//773 May 16, 2008

! N!R %ROTHERS RE!$T# COMP!N#, petitioner,vs.$!URENCIO !#ING, IN HIS OBN %EH!$ !ND IN %EH!$ OTHE OTHER HEIRS O EMI$I!NO !#ING, P!U$INO !#ING, INHIS OBN %EH!$ !ND IN %EH!$ O THE OTHER HEIRS OSIMEON !#ING, !ND BENCES$!O SUM!$INOG, IN HIS OBN%EH!$ !ND IN %EH!$ O THE OTHER HEIRS ORO%ERT! !#ING, respondents.

D ! I S I O N

!USTRI! M!RTINE , J

This resolves the petition for revie' on certiorari see in# the%odification of the Decision ) of the !ourt of 0ppeals 1!02 datedMarch , --- 'hich affir%ed 'ith %odification the Decision of theRe#ional Trial !ourt 1RT!2 of >apu3>apu !it", (ranch in !ivil!ase No. 6/-3>G and the Resolution dated 0u#ust , ---den"in# petitionerJs %otion for reconsideration of theafore%entioned decision.

The antecedent facts are as follo's7

The disputed propert" is >ot No. */66 'ith an area of /*,/ +s?uare %eters located at Dapdap, >apu3>apu !it". !risantaMalolo"3on petitioned for the issuance of a cadastral decree in her favor over said parcel of land. 0fter her death in )6/-, the!adastral !ourt issued a Decision directin# the issuance of adecree in the na%e of !risanta Malolo"3onJs ei#ht children,na%el"7 Euan, !eledonio, %iliano, Francisco, Si%eon, (ernabe,Roberta and Fausta, all surna%ed 0"in#. The certificate of title'as, ho'ever, lost durin# the 'ar.

Subse?uentl", all the heirs of the 0"in# siblin#s e$ecuted an $tra3Eudicial Partition of Real state 'ith Deed of 0bsolute Sale datedMarch /, )65*, conve"in# the sub&ect parcel of land to hereinpetitioner 0 nar (rothers Realt" !o%pan". Said deed 'asre#istered 'ith the Re#ister of Deeds of >apu3>apu !it" on March5, )65* under 0ct No. //** 1the la' #overnin# re#istration for unre#istered land2, and since then, petitioner had been reli#iousl"pa"in# real propert" ta$es on said propert".

In )6apu !it"to issue a reconstituted title in the na%e of the above%entioned

0"in# siblin#s. Thus, Ori#inal !ertificate of Title 1O!T2 No. RO3


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inti%idation a#ainst respondentsG and the" suffered %oralda%a#es . /

Petitioner 1defendant before the RT!2 filed its 0ns'er, den"in# thatrespondents are the la'ful o'ners of sub&ect parcel of land b"virtue of their bein# descendants or heirs of the re#istered o'nersof sub&ect propert". Instead, petitioner alle#ed that it had been inactual possession of sub&ect land as o'ner thereof b" virtue of thee$tra3&udicial partition of real propert" and deed of absolute salee$ecuted in its favorG that in fact, it had been pa"in# ta$es thereonreli#iousl"G that it tolerated about 5 persons to live on said land butsaid persons 'ere eventuall" e&ected b" court order. Petitioner then raised the affir%ative defenses of failure to state cause of action and prescription, as it too respondents "ears, )-%onths and da"s to file the action to recover sub&ect propert",'hen an action to recover propert" based on an i%plied trustshould be instituted 'ithin * "ears fro% discover" of the fraud. *

In the Pre3Trial Order dated Eanuar" /-, )66+ of the RT!, theissues 'ere narro'ed do'n to the follo'in#7

). 9hether or not the plaintiffs Bherein respondentsC arethe heirs of the re#istered o'ners of >ot No. */66.

. 9hether or not plaintiffs are the o'ners of >ot No.*/66.

/. 9hether or not the defendant 0 nar Bherein petitionerCis estopped to %a e an" clai% on >ot No. */66.

*. 9hether or not the defendant 0 nar is a builder in badfaith.

+. 9hether or not the defendants are liable for da%a#esand attorne"Js fees in favor of the plaintiffs.

5. 9hether or not the $tra3Eudicial Partition of Realstate 'ith Deed of 0bsolute Sale is valid and had, ineffect, validl" conve"ed to defendant 0 nar >ot No. */66.

. 9hether or not the plaintiffsJ action has prescribed .+

0fter trial, the RT! rendered a Decision dated Eul" *, )66 , rulin#that respondentsJ evidence failed to prove that the e$tra3&udicialpartition 'ith deed of absolute sale 'as a totall" si%ulated or fictitious contract and concluded that said docu%ent is valid, thus,effectivel" conve"in# to petitioner the propert" in ?uestion. Itfurther held that respondentsJ action had prescribed in that the

action is considered as one for reconve"ance based on i%plied or constructive trust, it prescribed in )- "ears fro% the re#istration of the deed on March 5, )65*G and if the action is considered as onefor annul%ent of contract on the #round of fraud, it should havebeen filed 'ithin * "ears fro% discover" of the fraud. The trial courtalso ruled that respondents failed to present an" ad%issible proof of filiation, hence, the" 'ere not able to prove that the" are indeedheirs of the ei#ht 0"in# siblin#s 'ho appear as the re#isteredo'ners under O!T No. RO3 ot */66 'ith an area of /*,/ + s?uare %eters located at Dapdap, Mactan, >apu3>apu !it" had been validl" conve"ed to and in favor of

0 nar (rothers Realt" !o%pan", and directin# theRe#ister of Deeds of >apu3>apu !it" to re#ister theabove3%entioned deed in accordance 'ith la' and to

cancel Ori#inal !ertificate of Title No. RO3


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I

T: !O=RT OF 0PP 0>S RR D IN F0I>IN4 TO 0PP>A T: R=> T:0T 0N : IR OF T: ORI4IN0>R 4IST R D O9N R M0A >OS :IS RI4:T TOR !OV R 0 TIT> D PROP RTA (A R 0SON OF>0!: SG

II

T: !O=RT OF 0PP 0>S RR D IN F0I>IN4 TO 0PP>A T: R=> T:0T T: 0!T OF R 4ISTR0TIONOF T: D D OF P0RTITION 9IT: S0> M0A (!ONSID R D 0N =N L=IVO!0> R P=DI0TION OFT: TR=ST 4IVIN4 RIS TO PR S!RIPTIONG

III

T: !O=RT OF 0PP 0>S RR D IN F0I>IN4 TO 0PP>A T: PROVISIONS OF 0RTI!> ))-* OF T:!IVI> !OD TO T: FF !T T:0T IN T: 0(S N!OF (0D F0IT: OR FR0=D, T: P0RTITION 9IT:

PR T RITION OF 0NA !OMP=>SORA : IR S:0>>NOT ( R S!IND D .

In their !o%%ent, respondents ar#ue that this case is an action todeclare as null and void the $tra3Eudicial Partition of Real state'ith Deed of 0bsolute Sale, hence, under 0rticle )*)- of the !ivil!ode, an action for declaration of an ine$istent contract does notprescribe. Respondents further posit that the principle of lachesshould be applied a#ainst petitioner and not a#ainst the%, as the"1respondents2 had been in actual possession of the sub&ectpropert", 'hile petitioner %erel" brou#ht action to e&ect the% %orethan 6 "ears after the alle#ed e$ecution of the $tra3EudicialPartition of Real state 'ith Deed of 0bsolute Sale. The" alsorefuted petitionerJs ar#u%ents re#ardin# the application of theprinciples of i%plied and constructive trusts in this case.

0t the outset, it should be stressed that not all the plaintiffs 'hofiled the a%ended co%plaint before the trial court had beeni%pleaded as respondents in the present petition. The onl" partiesi%pleaded are the heirs of %iliano, Si%eon and Roberta 0"in#,'ho% the !0 ad&ud#ed as o'ners of a / < portion of the land indispute for not havin# participated in the e$ecution of the $tra3Eudicial Partition of Real state 'ith Deed of 0bsolute Sale.

It is si#nificant to note that herein petitioner does not ?uestion the!0 conclusion that respondents are heirs of the afore%entionedthree 0"in# siblin#s. :ence, the trial court and appellate courtJs

findin#s that the $tra3 Eudicial Partition of Real state 'ith Deedof 0bsolute Sale 'as not for#ed nor si%ulated and that the heirs of %iliano, Si%eon and Roberta 0"in# did not participate in thee$ecution thereof, are no' be"ond cavil.

The issues raised b" petitioner for the !ourtJs resolution are 1)2'hether or not respondentsJ cause of action is i%prescriptibleG and1 2 if their ri#ht to brin# action is indeed i%prescriptible, %a" theprinciple of laches appl".

Respondents alle#ed in their a%ended co%plaint that not all theco3o'ners of the land in ?uestion si#ned or e$ecuted the

docu%ent conve"in# o'nership thereof to petitioner and %ade theconclusion that said docu%ent is null and void. 9e a#ree 'ith therulin# of the RT! and the !0 that the $tra3Eudicial Partition of Real state 'ith Deed of 0bsolute Sale is valid and bindin# onl" asto the heirs 'ho participated in the e$ecution thereof, hence, theheirs of %iliano, Si%eon and Roberta 0"in#, 'ho undisputedl"did not participate therein, cannot be bound b" said docu%ent.

:o'ever, the facts on record sho' that petitioner ac?uired theentire parcel of land 'ith the %ista en belief that all the heirs havee$ecuted the sub&ect docu%ent. Thus, the trial court is correct thatthe provision of la' applicable to this case is 0rticle )*+5 of the!ivil !ode 'hich states7

0RT. )*+5. If propert" is ac?uired throu#h %ista e or fraud, the person obtainin# it is, b" force of la',considered a trustee of an i%plied trust for the benefit of the person fro% 'ho% the propert" co%es.

In =da. !e ;sconde vs. ourt of #ppeals ,< the !ourt e$poundedthus7

!onstruin# this provision of the !ivil !ode, in Philippine6ational v. ourt of #ppeals , the !ourt stated7

0 deeper anal"sis of 0rticle )*+5 reveals that itis not a trust in the technical sense for in at"pical trust, confidence is reposed in oneperson 'ho is na%ed a trustee for the benefit of another 'ho is called the cestui ?ue trust,respectin# propert" 'hich is held b" the trusteefor the benefit of the cestui ?ue trust. 0constructive trust, unli e an e$press trust, doesnot e%anate fro%, or #enerate a fiduciar"relation. 9hile in an e$press trust, a beneficiar"and a trustee are lin ed b" confidential or

fiduciar" relations, in a constructive trust, thereis neither a pro%ise nor an" fiduciar" relation tospea of and the so3called trustee neither accepts an" trust nor intends holdin# thepropert" for the beneficiar". 6

The concept of constructive trusts 'as further elucidated in thesa%e case, as follo's7

. . . i%plied trusts are those 'hich, 'ithout bein#e$pressed, are deducible fro% the nature of thetransaction as %atters of intent or 'hich aresuperinduced on the transaction b" operation of la' as

%atters of e?uit", independentl" of the particular intentionof the parties. In turn, i%plied trusts are either resultin# or constructive trusts. These t'o are differentiated fro%each other as follo's7

Resultin# trusts are based on the e?uitabledoctrine that valuable consideration and notle#al title deter%ines the e?uitable title or interest and are presu%ed al'a"s to have beenconte%plated b" the parties. The" arise fro%the nature of circu%stances of theconsideration involved in a transaction 'hereb"one person thereb" beco%es invested 'ith

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le#al title but is obli#ated in e?uit" to hold hisle#al title for the benefit of another. On the other hand, o*s+'u +) e +'us+s a'e 'ea+e y +&eo*s+'u +)o* o4 eAu)+y )* o' e' +o sa+)s4y +&ee5a* s o4 us+) e a* p'e e*+ u* us+

e*') &5e*+. T&ey a')se o*+'a'y +o )*+e*+)o*a(a)*s+ o*e >&o, y 4'au , u'ess o' a useo4 o*4) e* e, o +a)*s o' &o- s +&e -e(a-')(&+ +o p'ope'+y >&) & &e ou(&+ *o+, )*eAu)+y a* (oo o*s )e* e, +o &o- . )-

1 %phasis supplied2

(ased on such concept of constructive trusts, the !ourt ruled insaid case that7

The rule that a trustee cannot ac?uire b" prescriptiono'nership over propert" entrusted to hi% until and unlesshe repudiates the trust, applies to e$press trusts andresultin# i%plied trusts. :o'ever, in constructive i%pliedtrusts, prescription %a" supervene even if the trusteedoes not repudiate the relationship. Necessaril",repudiation of said trust is not a condition precedent tothe runnin# of the prescriptive period . ))

The ne$t ?uestion is, 'hat is the applicable prescriptive periodH

In #merol vs.


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see s to obtain. ) Moreover, one alle#in# a fact that is denied hasthe burden of provin# it and unless the part" assertin# theaffir%ative of an issue sustains the burden of proof of that issue b"a preponderance of the evidence, his cause 'ill not succeed.Thus, the defendant bears the burden of proof as to all affir%ativedefenses 'hich he sets up in ans'er to the plaintiffJs clai% or cause of actionG he bein# the part" 'ho asserts the truth of the%atter he has alle#ed, the burden is upon hi% to establish thefacts on 'hich that %atter is predicated and if he fails to do so, theplaintiff is entitled to a verdict or decision in his favor. /

In the case at bar, it 'as petitioner, as the defendant before theRT!, 'hich set up in its 0ns'er the affir%ative defense of prescription. It 'as, therefore, incu%bent upon petitioner to provethe date fro% 'hich the prescriptive period be#an to run. videnceas to the date 'hen the ten3"ear prescriptive period be#an e$istsonl" as to the heirs of Roberta 0"in#, as 9enceslao Su%alino#ad%itted that the" learned of the e$istence of the docu%ent of salein the "ear )65 . 0s to the heirs of %iliano 0"in# and Si%eon

0"in#, there is no clear evidence of the date 'hen the" discoveredthe docu%ent conve"in# the sub&ect land to petitioner. Petitioner %iserabl" failed to adduce proof of 'hen the heirs of %iliano

0"in# and Si%eon 0"in# 'ere notified of the sub&ect docu%ent.

:ence, 'ith re#ard to said heirs, the !ourt %a" consider thead%ission in the a%ended co%plaint that the" learned of theconve"ance of the disputed land onl" in )66) 'hen petitioner sentnotices to vacate to the occupants of the sub&ect land, as the datefro% 'hich the ten3"ear prescriptive period should be rec oned.

Respondents filed their 0%ended !o%plaint on Dece%ber 5,)66/ . * Thus, 'ith re#ard to respondent heirs of Roberta 0"in#'ho had no'led#e of the conve"ance as far bac as )65 , their cause of action is alread" barred b" prescription 'hen saida%ended co%plaint 'as filed as the" onl" had until )6 'ithin'hich to brin# action. 0s to the respondent heirs of %iliano andSi%eon 0"in#, the" 'ere able to initiate their action for reconve"ance of propert" based on i%plied or constructive trust'ell 'ithin the ten3"ear prescriptive period rec oned fro% )66)'hen the" 'ere sent b" petitioner a notice to vacate the sub&ectpropert".

videntl", laches cannot be applied a#ainst respondent heirs of %iliano and Si%eon 0"in#, as the" too action to protect their interest 'ell 'ithin the period accorded the% b" la'.

9ith re#ard to petitionerJs ar#u%ent that the provision of 0rticle))-* of the !ivil !ode, statin# that a partition %ade 'ith preteritionof an" of the co%pulsor" heirs shall not be rescinded, should beapplied, suffice it to sa" that the $tra3Eudicial Partition of Realstate 'ith Deed of 0bsolute Sale is not bein# rescinded. In fact,

its validit" had been upheld but onl" as to the parties 'hoparticipated in the e$ecution of the sa%e. 0s discussed above,'hat 'as conve"ed to petitioner 'as o'nership over the shares of the heirs 'ho e$ecuted the sub&ect docu%ent. Thus, the la',particularl", 0rticle )*+5 of the !ivil !ode, i%posed the obli#ationupon petitioner to act as a trustee for the benefit of respondentheirs of %iliano and Si%eon 0"in# 'ho, havin# brou#ht their action 'ithin the prescriptive period, are no' entitled to thereconve"ance of their share in the land in dispute.

IN :IEB O THE OREGOING , the petition is P0RTI0>>A4R0NT D and the Decision of the !ourt of 0ppeals dated March, --- is MODIFI D, as follo's7 The a%ended co%plaint of the

heirs of Roberta 0"in# is DISMISS D on the #round of prescription. :o'ever, the heirs of %iliano 0"in# and Si%eon

0"in#, havin# instituted the action for reconve"ance 'ithin theprescriptive period, are hereb" D !>0R D as the >09F=>O9N RS of a < portion of the parcel of land covered b" Ori#inal!ertificate of Title No. RO3


21/48


22/48

The Republic 1petitioner2 insists that the declaration of presu%ptivedeath under 0rticle *) of the Fa%il" !ode is not a specialproceedin# involvin# %ultiple or separate appeals 'here a recordon appeal shall be filed and served in li e %anner.

Petitioner cites Rule )-6 of the Revised Rules of !ourt 'hichenu%erates the cases 'herein %ultiple appeals are allo'ed and arecord on appeal is re?uired for an appeal to be perfected. Thepetition for the declaration of presu%ptive death of an absentspouse not bein# included in the enu%eration, petitioner contendsthat a %ere notice of appeal suffices.

(" Resolution of Dece%ber )+, --* ,< this !ourt, notin# that cop"of the Septe%ber , --* Resolution 6 re?uirin# respondent to fileher co%%ent on the petition 'as returned unserved 'ithpost%asterJs notation 8Part" refused,8 Resolved to consider thatcop" dee%ed served upon her.

The pertinent provisions on the Ge*e'a- P'o )s)o*s o* Spe )a-P'o ee )*(s , Part II of the Revised Rules of !ourt entitledSP !I0> PRO! DIN4S, read7

RU$E 72SU%JECT M!TTER !ND !PP$IC!%I$IT#

O GENER!$ RU$ES

Section ). Su%3ect matter of special proceedin s. ? Rulesof special proceedin#s are provided for in the follo'in#7

1a2 Settle%ent of estate of deceased personsG

1b2 scheatG

1c2 4uardianship and custod" of childrenG

1d2 TrusteesG

1e2 0doptionG

1f2 Rescission and revocation of adoptionG

1#2 :ospitali ation of insane personsG

1h2 :abeas corpusG

1i2 !han#e of na%eG

1&2 Voluntar" dissolution of corporationsG

1 2 Eudicial approval of voluntar" reco#nition of %inor natural childrenG

1l2 !onstitution of fa%il" ho%eG

1%2 Declaration of absence and deathG

1n2 !ancellation or correction of entries in thecivil re#istr".

Sec. . #pplica%ility of rules of civil actions. ? In theabsence of special provisions, the rules provided for inordinar" actions shall be, as far as practicable, applicablein special proceedin#s. 1=nderscorin# supplied2

The pertinent provision of the !ivil !ode on presu%ption of deathprovides7

0rt. /6-. 0fter an absence of seven "ears, it bein#un no'n 'hether or not the absentee still lives, he shallbe presu%ed dead 4o' a-- pu'poses, e$cept for those of succession.

$ $ $ 1 %phasis and underscorin# supplied2

=pon the other hand, 0rticle *) of the Fa%il" !ode, upon 'hichthe trial court anchored its #rant of the petition for the declarationof presu%ptive death of the absent spouse, provides7

0rt. *). 0 %arria#e contracted b" an" person durin# thesubsistence of a previous %arria#e shall be null and void,unless before the celebration of the subse?uent

%arria#e, the prior spouses had been absent for four consecutive "ears and the spouse present had a 'ell3founded belief that the absent spouses 'as alread"dead. In case of disappearance 'here there is dan#er of death under the circu%stances set forth in the provisionsof 0rticle /6) of the !ivil !ode, an absence of onl" t'o"ears shall be sufficient.

For the purpose pf contractin# the subse?uent %arria#eunder the precedin# para#raph, the spouses present%ust institute a su55a'y p'o ee )*( as p'o ) e )*+&)s Co e for the declaration of presu%ptive death of theabsentee, ' ithout pre&udice to the effect of areappearance of the absent spouse. 1 %phasis andunderscorin# supplied2

Rule *), Section of the Revised Rules of !ourt, on Modes of 0ppeal, invo ed b" the trial court in disapprovin# petitionerJsNotice of 0ppeal, provides7

Sec. . Modes of appeal. 3

1a2 'rdinary appeal. : The appeal to the !ourt of 0ppealsin cases decided b" the Re#ional Trial !ourt in thee$ercise of its ori#inal &urisdiction shall be ta en b" filin#a notice of appeal 'ith the court 'hich rendered the

&ud#%ent or final order appealed fro% and servin# a cop"thereof upon the adverse part". No record on appealshall be re?uired e$cept in spe )a- p'o ee )*(s andother ases o4 5u-+)p-e o' sepa'a+e appea-s >&e'e +&e-a> o' +&ese Ru-es so 'eAu)'e . In such cases, therecord on appeal shall be filed and served in li e %anner.1 %phasis and underscorin# supplied2

$ $ $

(" the trial courtJs citation of 0rticle *) of the Fa%il" !ode, it is#athered that the petition of 0polinaria Eo%oc to have her absentspouse declared presu%ptivel" dead had for its purpose her desire

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to contract a valid subse?uent %arria#e. ;r o , the petition for thatpurpose is a 8 su55a'y p'o ee )*( ,8 follo'in# above3?uoted 0rt.*), para#raph of the Fa%il" !ode.

Since Title I of the Fa%il" !ode, entitled S=MM0RA E=DI!I0>PRO! DIN4 IN T: F0MI>A >09, contains the follo'in#provision, inter alia 7

$ $ $

0rt. /)+&ou+ 'e(a' +o +e &*) a-'u-es. 1 %phasis and underscorin# supplied2

$ $ $,

there is no doubt that the petition of 0polinaria Eo%oc re?uired,and is, therefore, a su%%ar" proceedin# under the Fa%il" !ode,not a special proceedin# under the Revised Rules of !ourt appeal

for 'hich calls for the filin# of a Record on 0ppeal. It bein# asu%%ar" ordinar" proceedin#, the filin# of a Notice of 0ppeal fro%the trial courtJs order sufficed.

That the Fa%il" !ode provision on repeal, 0rt. +*, provides asfollo's7

0rt. +*. Titles III, IV, V, VI, VII, VIII, I , I and V of (oo I of Republic 0ct No. /


24/48

ne' title, Transfer !ertificate of Title 1T!T2 No. T3) - ), 'as issued inthe na%e of the spouses Delfin ./

Mean'hile, on 5 March )65+, an $tra3Eudicial Partition and 0bsoluteDeed of Sale * involvin# >ot No. /*)* then covered b" T!T No. T3)5eopoldoDe#ala, Presentacion De#ala, Rosario De#ala and Pedro

De#ala, on one part, and the spouses Delfin, on the other. The deed,bearin# either the thu%b %ar s or the si#natures of the sellers, 'as

li e'ise notari ed. Said docu%ent 'as re#istered b" the spousesDelfin on * Eune )6ot No. /*)* tothe spouses Delfin for P/--.-- so%eti%e in )65+. )- Ta in# advanta#eof her condition, the spouses Delfin %ade her si#n a docu%entpurportin# to be a %ort#a#e, but 'hich turned out to be an e$tra&udicialpartition 'ith deed of absolute sale. 0s to >ot No. )/, respondentsaverred that the Deed of Sale coverin# the propert" 'as fictitious andthe si#natures and thu%b %ar s contained therein 'ere all for#edbecause three 1/2 of the si#natories therein died before the alle#ed

sale in )65-, na%el"7 strella Daradar, 'ho died in )6/*, andsperan a Daradar and !ipriano De#ala, 'ho both died in )6*5 . )) 0sproof thereof, respondents presented certifications ) on the deaths of speran a Daradar and !ipriano De#ala b" the >ocal !ivil Re#istrar of Panitan, !api .

To counter respondentsJ ar#u%ents, petitioners alle#ed thatrespondentsJ action 'as alread" barred b" prescription and laches.Further, the" ar#ued that the spouses Delfin, as 'ell as thesubse?uent o'ners of the sub&ect properties, are innocent purchasersfor value and in #ood faith, 'hose titles to the lots at the ti%e of thepurchase 'ere all clean and free fro% liens and encu%brances . )/ Thedocu%ents

evidencin# the conve"ance of the properties 'ere personall" andunilaterall" e$ecuted b" the vendors3si#natories therein 'ithout an"intervention fro% the spouses Delfin, and dul" ac no'led#ed before anotar" public, petitioners averred .)*

4ivin# credence to the clai%s of petitioners, the trial court ruled thatrespondentsJ clai% of o'nership over the sub&ect properties 'as notestablished b" a preponderance of evidence. !o%pared torespondentsJ verbal clai%s of o'nership, the spouses Delfin 'ere ableto prove that the" bou#ht the properties fro% the ori#inal o'ners, thetrial court added. The trial court held that the deeds of sale bein# dul"e$ecuted notarial and public docu%ents, the" en&o" the presu%ption of re#ularit" 'hich can onl" be contradicted b" clear and convincin#

evidence. In addition, respondentsJ clai%s based on fraud 'ere barredb" prescription, havin# been filed %ore than four 1*2 "ears fro% theti%e the instru%ents 'ere re#istered 'ith the Re#ister of Deeds, andthe" are estopped fro% annullin# the docu%ents b" reason of laches,the action havin# been filed )+ "ears after the deeds 'ere re#istered.The trial court also denied respondentsJ clai%s for da%a#es. )+

Respondents elevated the case to the !ourt of 0ppeals, 'hichreversed the rulin# of the trial court. In its Decision, )5 the !ourt of

0ppeals ruled that 'hile an action for reconve"ance based on i%plied

or constructive trust prescribes in ten 1)-2 "ears fro% the date of theissuance of the certificate of title over the propert", such prescriptiveperiod does not appl" if the person clai%in# to be the o'ner of thepropert" is in possession thereof, such as respondents in this case. )

Moreover, considerin# that a si%ilar action for reconve"ance 'as filedb" respondents as earl" as )6ot No. /*)*. The appellate court noted that7 1i2 TeresaDa os 'as a ver" old and sic l" 'o%anG 1ii2 she and her childrenlac ed for%al education to full" co%prehend the docu%ent to 'hichthe" affi$ed their si#natures and or thu%b %ar sG 1iii2 P/--.-- 'asinade?uate consideration for a lot consistin# of ),+5+ s?uare %eterseven in )65+G 1iv2 respondents 'ere allo'ed to re%ain in the sub&ectpropertiesG and 1v2 the ?uestioned docu%ent 'as re#istered in thena%e of the spouses Delfin )+ "ears after the alle#ed date of itse$ecution, 'hen %ost of the alle#ed vendors have alread" died. Thesecircu%stances surroundin# the e$ecution of the said docu%ent sho'that the real intention 'as %erel" to secure the loan of P/--.--. Thus,'hat too place 'as in fact, an e?uitable %ort#a#e and not a sale . )6

0s for >ot No. )/, the !ourt of 0ppeals held that the Deed of 0bsoluteSale could not have been e$ecuted on 6 Eul" )65-. Rel"in# on thecertifications of death presented b" respondents, the !ourt of 0ppealsruled that the defense of due e$ecution cannot prevail over the factthat t'o 1 2 of the si#natories therein have alread" died prior to saiddate. - Roberto Delfin, Recio Da os, 4ina Maalat, and Shirle" Ta%a"o,bu"ers of the subdivided lot, could not be considered as purchasers in#ood faith nor entitled to be protected in their ri#hts because the" 'ereinfor%ed b" respondents prior to the purchase that the", and not thespouses Delfin, are the real o'ners of the lots, the appellate courtadded . )

The !ourt of 0ppeals thus ruled7

9: R FOR , pre%ises considered, the present appeal is hereb"4R0NT D. The Decision dated Ma" , )665 of the Re#ional Trial!ourt of Ro$as !it", !api , (ranch )+ presided over b" Eud#e Ro#er (. Patricio is hereb" R V RS D and S T SID and a ne' oneentered7

1)2 0nnullin# the $tra3Eudicial Partition and Deed of 0bsolute Sale dated March 5, )65+ and Deed of 0bsoluteSale dated Eul" 6, )65-G

1 2 Reinstatin# O!T No. RO3++5/ 1)*+)52 referrin# to >ot)/ re#istered in the na%es of Teresa Da os 1) portion2,and the children of >ucia Da os, na%el"7 speran aDaradar, strella Daradar and Maria Daradar 1) pro3indiviso2 and O!T No. 1*5+-2 RO3++ 6 referrin# to >ot /*)*re#istered in the na%es of the late spouses !ipriano De#alaand Teresa Da os, and cancelin# the T!Ts issuedthereafterG

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25/48

1/2 Orderin# plaintiffs3appellants, &ointl" and severall", to pa"defendant Felipa (elo Delfin the a%ount of P/--.-- 'ithinthirt" 1/-2 da"s fro% the date of finalit" of this decisionG

1*2 Orderin# defendants3appellees to free >ots /*)* and )/fro% an" and all obli#ations and encu%brances that %a"have been attached to both lots and thereafter to deliver possession of the sa%e to plaintiffs3appellantsG and

1+2 Orderin# defendants3appellees, &ointl" and severall", to

pa" plaintiffs3appellants P)-,---.-- as e$e%plar" da%a#es,and BsicC for attorne"Js fees and P)-,---.-- as liti#atione$penses.

!osts a#ainst defendants3appellees.

SO ORD R D.

In the present petition for revie' under Rule *+, petitioners clai% thatthe !ourt of 0ppeals erred in findin# that respondents retainedpossession of the sub&ect properties. Moreover, petitioners posit thatrespondentJs alle#ations of fraud and for#er" confine their action to afour 1*23"ear prescriptive period 'hich has lon# e$pired. 0dditionall",the" ar#ue that respondents failed to7 1i2 prove the inade?uac" of thesellin# price of >ot No. /*)*G 1ii2 prove the frail condition of TeresaDa osG 1iii2 sho' that fraud attended the sale of >ot No. )/G 1iv2 sho'that Roberto Delfin, Recio Da os, 4ina Maalat and Shirle" Ta%a"o arenot purchasers in #ood faithG and 1v2 overco%e the presu%ption of re#ularit" en&o"ed b" the notari ed deeds of sale. Petitioners also?uestion the a'ard of e$e%plar" da%a#es and attorne"Js fees in favor of respondents. / On the other hand, respondents for the %ost part%erel" reiterated the rulin# of the !ourt of 0ppeals. *

The co%plete resolution of the issues presented before the !ourtre?uires a deter%ination of facts, 'hich this !ourt, not bein# a trier of facts, does not nor%all" e$ercise in an appeal b" certiorari . + This rule,ho'ever, is sub&ect to e$ceptions, such as 'here the factual findin#s of the !ourt of 0ppeals and the trial court are conflictin# or contradictor" , 5 as in the instant case.

9hen oneJs propert" is re#istered in anotherJs na%e 'ithout thefor%erJs consent, an i%plied trust is created b" la' in favor of the trueo'ner . I%plied trusts are those 'hich, 'ithout bein# e$pressed, arededucible fro% the nature of the transaction b" operation of la' as%atters of e?uit", independentl" of the particular intention of theparties. Mean'hile, constructive trusts are created in order to satisf"the de%ands of &ustice and prevent un&ust enrich%ent. The" arisea#ainst one 'ho, b" fraud, duress or abuse of confidence, obtains or holds the le#al ri#ht to propert" 'hich he ou#ht not, in e?uit" and #oodconscience, to hold. < 0n action for reconve"ance based upon ani%plied or constructive trust prescribes in ten 1)-2 "ears fro% there#istration of the deed or fro% the issuance of the title, re#istrationbein# constructive notice to all persons. 6 :o'ever, an action for reconve"ance based on fraud is i%prescriptible 'here the plaintiff is inpossession of the propert" sub&ect of the acts. /-

In essence, petitioners insist that respondents failed to prove that fraudattended the sale of >ots No. )/ and No. /*)*. The !ourt a#rees.

0 contract or conduct apparentl" honest and la'ful %ust be treated assuch until it is sho'n to be other'ise b" either positive or circu%stantial evidence . /) 0 dul" e$ecuted contract carries 'ith it thepresu%ption of validit". The part" 'ho i%pu#ns its re#ularit" has theburden of provin# its si%ulation . / 0 notari ed docu%ent is e$ecuted tolend truth to the state%ents contained therein and to the authenticit" of

the si#natures. Notari ed docu%ents en&o" the presu%ption of re#ularit" 'hich can be overturned onl" b" clear and convincin#evidence . //

0s plaintiffs in the action before the trial court, respondents have theburden to establish their case b" a preponderance of evidence, or evidence 'hich is of #reater 'ei#ht or %ore convincin# than that 'hichis offered in opposition to it. :ence, parties 'ho have the burden of proof %ust produce such ?uantu% of evidence, 'ith plaintiffs havin# torel" on the stren#th of their o'n evidence, not on the 'ea ness of the

defendantJs ./*

0s re#ards >ot No. /*)*, respondents specificall" alle#ed that thespouses Delfin 8tric ed the plaintiffs and their late %other into si#nin# afictitious and si%ulated docu%ent,8 and that 8T!T No. T3)5ot No. /*)* 'as either lostor destro"ed and 'as reconstituted onl" in )6 ), 'hile the ori#inalcop" of the deed of sale 'as lost b" Felipa Delfin. /5

ven respondentsJ clai% of possession of the sub&ect properties hasnot been sufficientl" proved. This !ourt has unifor%l" held that 8theone 'ho is in actual possession of a piece of land clai%in# to be theo'ner thereof %a" 'ait until his possession is disturbed or his title isattac ed before ta in# steps to vindicate his ri#ht. :is undisturbedpossession #ives hi% a continuin# ri#ht to see the aid of a court of e?uit" to ascertain and deter%ine the nature of the adverse clai% of athird part" and its effect on his o'n title, 'hich ri#ht can be clai%edonl" b" one 'ho is in possession. 8/ 0ctual possession of land consistsin the %anifestation of acts of do%inion over it of such a nature asthose a part" 'ould naturall" e$ercise over his o'n propert" ./<

!ontrar" to the appellate courtJs illation, respondents have notestablished possession of the sub&ect properties. Save for the lonetesti%on" of Orlando (uda", a nei#hbor, that Rosario De#ala Daradar 'as the onl" one still residin# in the properties in dispute, no other evidence 'as presented to sho' that respondents are in actualoccupation and possession thereof. Not even Rosario herself testified.Doubts also arise as to the veracit" of respondentsJ clai% of possession since respondents the%selves averred in their co%plaintthat the spouses Delfin had i%%ediatel" ta en possession of thesub&ect properties in the sa%e "ear that the sale 'as %ade, andappropriated the produce found in the sub&ect lots fro% then on. /6

0d%issions %ade in the co%plaint are &udicial ad%issions 'hich arebindin# on the part" 'ho %ade the% and cannot be contradicted *

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