G.R. No. 109910 April 5, 1995REMEDIOS G. SALVADOR and GRACIA G.
SALVADOR,petitioners,vs.COURT OF APPEALS, ALBERTO and ELPIA YABO,
FRANCISCA YABO, et al., respondents.DAVIDE, JR.,J.:Assailed in this
petition is the legal determination made by the Court of Appeals on
the issues of which portion of Lot No. 6080 and Lot No. 6180 formed
part of the conjugal assets of the spouses Pastor Makibalo and
Maria Yabo, and of whether or not the rights of Pastor's co-heirs
in the estate of Maria Yabo were extinguished through prescription
or laches.Alipio Yabo was the owner of Lot No. 6080 and Lot No.
6180 situated in Barrio Bulua, Cagayan de Oro City, containing an
area of 1,267 and 3,816 square meters, respectively. Title thereto
devolved upon his nine children, namely, Victoriano, Procopio,
Lope, Jose, Pelagia, Baseliza, Francisca, Maria, and Gaudencia,
upon his death sometime before or during the second world war.On 28
April 1976, Pastor Makibalo, who is the husband of Maria Yabo, one
of Alipio's children, filed with the then Court of First Instance
of Misamis Oriental a complaint, docketed as Civil Case No. 5000,
against the spouses Alberto and Elpia Yabo for "Quieting of Title,
Annulment of Documents, and Damages." In the complaint, he alleged
that he owned a total of eight shares of the subject lots, having
purchased the shares of seven of Alipio's children and inherited
the share of his wife, Maria, and that except for the portion
corresponding to Gaudencia's share which he did not buy, he
occupied, cultivated, and possessed continuously, openly,
peacefully, and exclusively the two parcels of land. He then prayed
that he be declared the absolute owner of 8/9 of the lots in
question.1On 8 October 1976, the grandchildren and
great-grandchildren of the late Alipio Yabo2lodged with the same
court a complaint for partition and quieting of title with
damages,3docketed as Civil Case No. 5174, against Pastor Makibalo,
Enecia Cristal, and the spouses Eulogio and Remedies Salvador. They
alleged that Lot No. 6080 and Lot No. 6180 are the common property
of the heirs of Alipio Yabo, namely, the plaintiffs, defendant
Enecia Cristal, Maria Yabo and Jose Yabo, whose share had been sold
to Alberto Yabo; that after Alipio's death, the spouses Pastor and
Maria Makibalo, Enecia Cristal and Jose Yabo became thede
factoadministrators of the said properties; and that much to their
surprise, they discovered that the Salvador spouses, who were
strangers to the family, have been harvesting coconuts from the
lots, which act as a cloud on the plaintiffs' title over the
lots.The plaintiffs then prayed that (a) they, as well as defendant
Pastor Makibalo, in representation of his wife, and Enecia Cristal,
in representation of Gaudencia, be declared as the owners of the
lots; (b) the Salvador spouses be declared as having no rights
thereto except as possible assignees of their co-defendants, Pastor
Makibalo and Enecia Cristal; (c) the lots be partitioned according
to law among the aforementioned co-owners; and (d) the defendants
be made to pay for the value of the fruits they harvested from the
lots and for moral and exemplary damages, attorney's fees, expenses
of the litigation, and costs of the suit.The two cases were
consolidated and jointly heard by Branch 5 of the Court of First
Instance of Cagayan de Oro City.By evidence, Pastor, Makibalo
sought to prove the following allegations:He was married to Maria
Yabo who died on 17 March 1962.4In August 1949, Jose and
Victoriano, both surnamed Yabo, sold their respective shares in the
disputed lots to one Pedro Ebarat, and in 1952 the latter sold both
shares to Pastor Makibalo.5Ebarat formalized this conveyance by
executing an Affidavit of Waiver and Quitclaim dated 30 May 1969 in
favor of Pastor.6On 16 January 1951, the heirs of the late Lope
Yabo sold Lope's shares in the litigated properties to one
Dominador Canomon,7who, in turn, sold the same to Pastor.8Canomon
afterwards executed an Affidavit of Waiver and Quitclaim in favor
of the latter.9Pastor Makibalo likewise purchased the shares of
Baseliza in the two lots in 1942, of Procopio in 1957, of Francisca
in 1958, and of Pelagia in 1967. The only share he did not buy was
that of Gaudencia. After every purchase, he took possession of the
portions bought and harvested the products thereof.10In 1966,
Pastor sold back to Alberto a portion of Lot No. 6180 which was
formerly the share of Alberto's father, Procopio.11In December
1968, Pastor mortgaged the two lots to the spouses Eulogio and
Remedios Salvador.12On 26 September 1978, he executed a document
denominated as a "Confirmation and Quitclaim" whereby he waived all
his rights, interests, and participation in the lots in favor of
the Salvador spouses.13On the other hand, by their evidence,l4the
spouses Alberto and Elpia Yabo tried to prove that they had
repurchased from Pastor Makibalo the share of Procopio, which was
previously sold to Pastor, and had bought the shares of Jose and
Maria.15Filoteo Yabo denied having sold the share of his father,
Lope Yabo, in the contested lots and disowned his signature and
those of his mother, brothers, and sisters appearing at the back of
Exhibit "C".16Ignacio Yabo testified that his father, Victoriano
Yabo, did not know how to write and sign his name. He further
declared that he had no knowledge that his father affixed his
thumbmark in the document marked as Exhibit "A" purporting to
alienate his father's share in the disputed lots.l7On 15 January
1983, the trial court rendered its decision18holding as
follows:Assuming that the thumbmark on the typewritten name "Jose
Yabo" in Exh. 3 was that of Jose Yabo, Alberto Yabo and Elpia R.
Yabo purchased the share of Jose Yabo in bad faith because they
knew before and up to the execution of Exh. 3 on October 24, 1972
that Jose Yabo was no longer the owner of that area because from
the documents she borrowed from Mrs. Salvador they came to know
that Jose Yabo had sold his shares to Pedro Ebarat, and they have
seen that Pastor Makibalo has been in possession of those shares
together with the seven others exclusively as owner, he having
mortgaged them to Mrs. Salvador.As Jose Yabo was no longer the
owner of the one-ninth (1/9) shares which he sold to Alberto Yabo
and Elpia Yabo under Exh. 3, the sale is null and void, and Alberto
and Elpia acquired nothing because Jose Yabo had no more title,
right or interest to dispose of.. . .Pastor Makibalo had been in
possession of Jose Yabo's share since 1949 after purchasing it from
Ebarat, and has been in possession thereof up to September 26, 1978
when he sold it to the spouses Eulogio Salvador and Remedios
Salvador, who are now in possession of the same.Exh. A, evidencing
the sale of Victoriano Yabo's share to Pedro Ebarat was identified
by the latter who testified that he sold it to Pastor Makibalo in
1951. Exh. A is an ancient document 1949 when the document came to
existence up to now is more than 30 years, and the document had
been in the possession of Pastor Makibalo, then Remedios Salvador
who had interest in its preservation.As regards the shares of Lope
Yabo, the same had been sold by his surviving spouse Juana Legaspi,
and his children Filoteo, Andresa, Jovita, Bonifacio, and Rundino
for P105.00 on January 16, 1951 to Dominador Conomon (Exh. C and
C-1), who in turn sold it to Pastor Makibalo in 1952, executing a
formal Deed of Waiver and Quitclaim on May 30, 1969(Exh. D).Exh. C
is an ancient document, being more than 30 years old and has been
in the possession of Pastor Makibalo and then the spouses Eulogio
and Remedios Salvador who had an interest in its preservation. The
claim of Filoteo Yabo that the signatures appearing in Exh. C are
not his and those of his brothers and sisters are of no avail, for
if they were not the ones who affixed those signatures and so they
did not sell the shares of their father Lope Yabo, why did they not
then take possession of said shares they remained silent from 1951
to September 16, 1976 a period of 25 years. They are now [e]stopped
by laches.And as regards the shares of Baseliza, Francisca and
Pelagia, there is no evidence presented to effectively rebut the
testimony of Pastor Makibalo that he acquired the shares of
Baseliza Yabo in 1942 by changing it with a buffalo; that he bought
the shares of Francisca Yabo in 1958 and that he bought the shares
of Pelagia Yabo in 1967; Pastor Makibalo had been in possession of
these shares from the time he acquired them, continuously,
adversely, openly, and peacefully, as owner up to the time he sold
his rights and interest therein to the spouses Eulogio and Remedies
Salvador. The heirs of Baseliza, Francisca and Pelagia have not
taken any step to protect their rights over those shares for over
40 years in the case of Baseliza's share, for about 20 years in the
case of Francisca's share, and for more than 10 years in the case
of Pelagia's share. Laches, likewise has rendered their rights
stale.On March 10, 1966 Pastor Makibalo sold back to Alberto Yabo
the share of Procopio Yabo in Lot 6180 (Exh. 1 and 2), but there is
nothing to show that. Pastor Makibalo also sold back Procopio's
share in Lot 6080.So then, by purchase, Pastor Makibalo and Maria
Yabo acquired the shares of Baseliza, Victoriano, Jose, Lope,
Procopio and Francisca, or six (6) shares from Lots 6080 and 6180.
These belonged to the conjugal partnership of Pastor Makibalo and
Maria Yabo. Maria Yabo had also a share from Lots 6080 and 6180,
and Pastor Makibalo acquired the shares of Pelagia Yabo in both
Lots 6080 and 6180. All in all; Pastor Makibalo acquired eight
shares in both Lot 6080 and 6180.While Maria Yabo died on March 17,
1962, and so one-fourth (1/4) of the shares of Baseliza,
Victoriano, Jose, Lope, and Francisca, or one-fourth of five-ninth
(5/9) of both lots and one-fourth (1/4) of Lot 6080 should go to
the children of the brothers and sisters of Maria Yabo by virtue of
the provisions of Article 1001 of the New Civil Code, the latter
have lost their rights thereto by laches for their inaction for a
very long period and their rights have become stale. On the other
hand, Pastor Makibalo who had been in possession of the whole of
the eight shares in both Lots 6080 and 6180, enjoying the fruits
thereof exclusively, uninterruptedly, publicly, peacefully, and
continuously from the death of Maria Yabo up to the filing of the
complaint in Civil Case No. 5174 on October 8, 1976, or a period of
14 years, had acquired title to the whole of the eight shares in
Lot 6080 and seven shares in Lot 6180 (the share of Procopio in Lot
6180 had been sold back to Alberto Yabo).IN VIEW OF ALL THE
FOREGOING, judgment is hereby rendered finding Pastor Makibalo, now
Eulogio Salvador and Remedios Salvador the owner of eight (8)
shares, equivalent to eight-ninth (8/9) of Lot No. 6080, and of
seven (7) shares, equivalent to seven-ninth (7/9) of Lot No. 6180,
and therefore, ordering the partition of Lot 6080 so that the
one-ninth (1/9) alloted to Gaudencia Yabo will go to her heirs or
their assigns, and the remaining eight-ninth (8/9) will go to the
spouses Eulogio Salvador and Remedios Salvador, as successor of
Pastor Makibalo, and the partition of Lot 6180 so that the
seven-ninth (7/9) portion which formerly belonged to Baseliza,
Victoriano, Jose, Lope, Maria, Francisca, and Pelagia will go to
the spouses Eulogio and Remedios Salvador, the one-ninth (1/9)
which formerly belonged to Procopio, will go to Alberto Yabo, and
the remaining one-ninth (1/9) which formerly belonged to Gaudencia,
will go to Gaudencia's heirs or their assigns.Doc. No. 720,
recorded on page 28 of Notarial Register No. VII, and acknowledged
before Notary Public Isidro S. Baculio (Exh. E) [purportedly
executed by Maria Yabo and Pastor Makibalo] is hereby declared null
and void, and so the Office of the City Fiscal is directed to cause
an investigation of this matter to find out the person or persons
responsible for the falsification of the said document, and if the
evidence warrants, to file the corresponding criminal action in
court. The Office of the City Assessor of Cagayan de Oro City is,
likewise, directed to cause the cancellation of Tax Declarations
Nos. 33553, marked as Exh. H-3, 33557, marked as Exh. H-2, both in
the name of Alberto Yabo, for having been issued on the basis of a
falsified document. Let copies of this decision be furnished the
Offices of the City Fiscal and City Assessor, both of Cagayan de
Oro City.No pronouncement as to damages, attorney's fees and
costs.SO ORDERED.19The defendants in Civil Case No. 5000 and the
plaintiffs in Civil Case No. 5174 appealed from the decision to the
Court of Appeals on 19 August 1983.20In its decision of 3 February
1993,21the Court of Appeals held that (a) Maria Yabo did not sell
her share to Alberto and Elpia Yabo; (b) prescription and laches
have not run against the private respondents with respect to the
1/9 share of Maria Yabo in the estate of her father and to her
conjugal share in the portions acquired from her brothers and
sisters; and (c) Procopio never sold his share in Lot No. 6080 to
Pastor Makibalo. More specifically it stated:Exh. E is the document
found by the lower court to be a falsification. This finding
appellants do not dispute and have not raised an error.. . .While
acknowledging. that upon the death of Maria Yabo on March 17, 1962,
one-half (1/2) of the share of Maria Yabo in Lots 6080 and 6180 and
one-half (1/2) of Maria Yabo's conjugal share in the portions
bought from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca
should go to the children of the brothers and sisters of Maria in
accordance with Article 1001 of the Civil Code, the lower court
rule that said children have lost their rights by laches "for their
inaction for a very long period and their rights have become stale"
(Decision, p. 16; Record, Vol. 2, p. 158).Appellants in their
second assignment of error aver that this is an error.We agree that
the lower court erred.While between March 17, 1962 when Maria Yabo
died and October 8, 1976, when Civil Case No. 5174 for partition
was filed, was a period of more than fourteen (14) years, that
alone to our mind would not suffice to establish laches or
prescription. Upon the death of Maria Yabo, appellee Pastor
Makibalo and appellants and the other children of the brothers and
sisters of Maria, by operation of law become co-owners of the
one-ninth (1/9) share of Maria as heir of her father Alipio and the
conjugal share of Maria in the portions acquired from Basiliza,
Victoriano, Jose, Lope, Pelagia and Francisca. Time alone is not a
decisive factor. Appellee Pastor Makibalo, it must be remembered,
is the husband of Maria and, therefore, an uncle in-law of
appellants. In our culture, a demand by an heir or heirs for
partition immediately upon the death of a relative is more often
taken not as a legitimate assertion of a right but of something
else, like greed. It must also be noted that the spouses, the
appellee Pastor Makibalo and his deceased wife Maria, were
childless and, therefore, appellants and the other children of the
brothers and sisters of Maria must have felt that at any rate the
property would go to them in the course of time. This probably
explains why appellants started asserting their right over the
property only after appellee Pastor Makibalo sold the same to the
spouses Eulogio and Remedios Salvador. Besides, Lots 6080 and 6180
have a combined area only of 5,083 square meters and before the
development of Northern Mindanao, and even in 1962 when Maria Yabo
died, were not that valuable. This is shown by the fact that each
heir sold his other share only for P110.00.As we have said not time
alone. In the early case ofCortes v. Oliva, 33 Phil. 480, it was
held that"(o)rdinarily, possession by one joint owner will not be
presumed to be adverse to the others, but will, as a rule, be held
to be for the benefit of all. Much stronger evidence is required to
show an adverse holding by one of several joint owners than by a
stranger; and in such cases, to sustain a plea of prescription, it
must always clearly appear that one who was originally a joint
owner has repudiated the claims of his co-owners, and that his
co-owners were apprised or should have been apprised of his claim
of adverse and exclusive ownership before the alleged prescription
began to run (at page 484). This ruling on prescription should
apply with equal force to laches.The third assignment of error
challenges the finding of the lower court that "there is nothing to
show that Pastor Makibalo also sold back Procopio's share in Lot
6080" (Decision, p. 16; Records, Vol. 2,p. 158).Exhibits 1 and 2
cover only Procopio's share in Lot 6180. In other words, Exhibits 1
and. 2 conveyed back to Alberto Yabo only his father, Procopio's
share in Lot 6180.There is indeed no evidence that Pastor Makibalo
also sold back to Alberto, his father Procopio's share in Lot
6080.But from the evidence it appears that Procopio Yabo never sold
his share in Lot 6080 to Pastor Makibalo. So there was no need to
convey back Procopio's share in Lot 6080.This fact is evident from
the Affidavit of Confirmation of Sale (Exh. M) dated April 22,
1970, executed by Alberto Yabo, which is the very document relied
upon by the lower court (Decision, p. 11; Record, Vol. 2, p. 153)
in finding that "Alberto Yabo admitted that the share of his father
Procopio Yabo was previously bought by Pastor Makibalo." A look at
Exh. M, particularly par. 3 thereof, reveals that AlbertoYabo
merely acknowledged or confirmed the sale of his father's share to
Pastor Makibalo in Lot 6180. In effect, it at the same time proves
that Lot 6080 was never sold by Procopio to appellee Pastor
Makibalo; otherwise, it would have been included in the said
Affidavit of Confirmation of Sale. The Deed of Absolute Sale (Exh.
2) subsequently executed by Pastor Makibalo in favor of Alberto
Yabo on April 23, 1970, further proves this point, since the latter
merely bought back what was previously sold, his father's share in
Lot 6180.22The respondent court then concluded and held as
follows:In summary, appellee Pastor Makibalo and his assigns, the
spouses Eulogio and Remedios Salvador, are entitled only to
one-half () of the one-ninth (1/9) share of Maria and three-fourths
(3/4) of the six-ninth (6/9) shares acquired from Basiliza,
Victoriano, Jose, Lope, Pelagia and Francisca. Accordingly, the
partition should be done as follows:(1) 1/9 of Lots 6080 end 6180
should be given to the heirs of Gaudencia Yabo or their successors
and assigns;(2) 1/9 of Lot 6180 should go to Alberto Yabo and his
wife Elpia Yabo;(3) 1/9 of Lot 6080 should be given to the heirs of
Procopio Yabo and their successors end assigns, including Alberto
Yabo;(4) The 1/9 share of Maria Yabo in Lots 6080 and 6180 should
be partitioned: One-half (1/2) for the surviving spouse Pastor
Makibalo (now the spouses Eulogio Salvador and Remedios Salvador)
and the other half for the children of the brothers and sisters of
Maria Yabo in equal shares.(5) The remaining 6/9, one-half (1/2) of
which is conjugal between Maria Yabo and appellee Pastor Makibalo
should be partitioned three-fourths (3/4) for Pastor Makibalo (now
the spouses Eulogio Salvador and Remedios Salvador) and one-fourth
(1/4) for the children of the brothers and sisters of Maria Yabo in
equal shares.(6) Jose Yabo if he is still alive should participate
in the partition as heir of Maria otherwise he shall be represented
by his children.WHEREFORE, premises considered, subject to the
modification in the partition, as indicated above, the decision
appealed from is AFFIRMED, without pronouncement as to costs. The
lower court is directed if necessary to fully effect the partition,
to conduct further hearings and determine whether Jose Yabo is
still alive and who are the children of the brothers and sisters of
Maria Yabo.23Unable to obtain a reconsideration of the
said-decision, Remedios Salvador, together with her daughter, Ma.
Gracia Salvador, as one of the successors-in-interest of Eulogio M.
Salvador who died during the pendency of the appeal,24elevated the
case to this Court contending that the respondent court erred in
ruling that: (1) the shares of Pelagia Yabo should be included in
the partition; (2) prescription and laches have not run against the
private respondents in relation to the 1/9 share of Maria Yabo in
the estate of her father and to her conjugal share in those
acquired by purchase; (3) Procopio Yabo never sold to Pastor
Makibalo his share in Lot No. 6080; and(4) Jose Yabo should be
allowed to participate as heir of Maria even as he had openly
rejected this option by refusing to participate in both civil
cases.25Article 160 of the Civil Code provides that 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. Since the shares of Jose, Victoriano, Lope, Baseliza,
Procopio, and Francisca in Lot No. 6180 and Lot No. 6080 had been
purchased by Pastor during his marriage with Maria, and there is no
proof that these were acquired with his exclusive money, the same
are deemed conjugal properties. Not forming part of the conjugal
partnership are: (1) the 1/9 share inherited by Maria which
remained as her exclusive property pursuant to Article 146 (2) of
the Civil Code; (2) the 1/9 share of Gaudencia which was not sold
to Pastor; and (3) the 1/9 share of Pelagia which was acquired by
Pastor in 1967 or five years after the death of his wife and which
was therefore his exclusive property.There is, thus; merit in the
petitioners' first assigned error. The Court of .Appeals should
have excluded from the conjugal partnership the share of Pelagia
which Pastor had acquired after his wife's death.Upon Maria's death
in 1962, the conjugal partnership of gains was dissolved.26Half of
the conjugal properties, together with Maria's l/9 hereditary share
in the disputed lots, constituted Maria's estate and should thus go
to her surviving heirs.27Under Article 1001 of the Civil Code, her
heirs are her spouse, Pastor Makibalo, who shall be entitled
to-one-half (1/2) of her estate, her brother, Jose, and the
children of her other brothers and sisters, who shall inherit the
other half. There having been no actual partition of the estate
yet, the said heirs became co-owners thereof by operation of
law.28We now determine whether prescription and laches can be
applied against the co-heirs of Pastor Makibalo.It has been said
that Article 494 of the Civil Code which provides that each
co-owner may demand at any time the partition of the common
property implies that an action to demand partition is
imprescriptible or cannot be barred by laches.29The
imprescriptibility of the action cannot, however, be invoked when
one of the co-owners has possessed the property as exclusive owner
and for a period sufficient to acquire it by prescription.30What
needs to be addressed first is whether or not Pastor Makibalo has
acquired by prescription the shares of his other co-heirs or
co-owners. Prescription as a mode of acquiring ownership requires a
continuous, open, peaceful, public, and adverse possession for a
period of time fixed by law.This Court has held that the possession
of a co-owner is like that of a trustee and shall not be regarded
as adverse to the other co-owners but in fact as beneficial to all
of them.31Acts which may be considered adverse to strangers may not
be considered adverse insofar as co-owners are concerned. A mere
silent possession by a co-owner, his receipt of rents, fruits or
profits from the property, the erection of buildings and fences and
the planting of trees thereon, and the payment of land taxes,
cannot serve as proof of exclusive ownership, if it is not borne
out by clear and convincing evidence that he exercised acts of
possession which unequivocably constituted an ouster or deprivation
of the rights of the other co-owners.32Thus, in order that a
co-owner's possession may be deemed adverse to thecestui que
trustor the other co-owners, the following elements must concur:
(1) that he has performed unequivocal acts of repudiation amounting
to an ouster of thecestui que trustor the other co-owners; (2) that
such positive acts of repudiation have been made known to thecestui
que trustor the other co-owners; and (3) that the evidence thereon
must be clear and convincing.33InPangan vs. Court of Appeals,34this
Court had occasion to lay down specific acts which are considered
as acts of repudiation:Filing by a trustee ofan action in
courtagainst the trustor to quiet title to property, or for
recovery of ownership thereof, held in possession by the former,
may constitute an act of repudiation of the trust reposed on him by
the latter.Theissuance of the certificate of titlewould constitute
an open and clear repudiation of any trust, and the lapse of more
than 20 years, open and adverse possession as owner would certainly
suffice to vest title by prescription.An action for the
reconveyance of land based on implied or constructive trust
prescribes within 10 years. And it is from the date of theissuance
of such titlethat the effective assertion of adverse title for
purposes of the statute of limitation is counted.The prescriptive
period may only be counted from the time petitioners repudiated the
trust relation in 1955 upon thefiling of the complaint for recovery
of possessionagainst private respondents so that the counterclaim
of the private respondents contained in their amended answer
wherein they asserted absolute ownership of the disputed realty by
reason of the continuous and adverse possession of the same is well
within the l0-year prescriptive period.There is clear repudiation
of a trust when one who is an apparent administrator of property
causes thecancellation of the titlethereto in the name of the
apparent beneficiaries and gets a new certificate of title in his
own name.It is only when the defendants, alleged co-owners of the
property in question,executed a deed of partition and on the
strength thereof obtained the cancellation of the titlein the name
of their predecessor and the issuance of a new one wherein they
appear as the new owners of a definite area each, thereby in effect
denying or repudiating the ownership of one of the plaintiffs over
his alleged share in the entire lot, that the statute of
limitations started to run for the purposes of the action
instituted by the latter seeking a declaration of the existence of
the co-ownership and of their rights thereunder.The records do not
show that Pastor Makibalo adjudicated to himself the whole estate
of his wife by means of an affidavit filed with the Office of the
Register of Deeds as allowed under Section 1 Rule 74 of the Rules
of Court, or that he caused the issuance of a certificate of title
in his name or the cancellation of the tax declaration in Alipio's
name and the issuance of a new one in his own name. The only act
which may be deemed as a repudiation by Pastor of the co-ownership
over the lots is his filing on 28 April 1976 of an action to quiet
title (Civil Case No. 5000). The period of prescription started to
run only from this repudiation. However, this was tolled when his
co-heirs, the private respondents herein, instituted on 8 October
1976 an action for partition (Civil Case No. 5174) of the lots.
Hence, the adverse possession by Pastor being for only about six
months would not vest in him exclusive ownership of his wife's
estate, and absent acquisitive prescription of ownership, laches
and prescription of the action for partition will not lie in favor
of Pastor.35The issue presented by the petitioners in their third
assigned error involves a question of fact. This Court is not
ordinarily a trier of facts, its jurisdiction being limited to
errors of law. Thus; the findings of facts of the Court of Appeals
are as a rule deemed conclusive. However, when the findings of
facts of the appellate court vary with those of the trial court,
this Court has to review the evidence in order to arrive at the
correct findings.36In the instant case, a conflict in the findings
of facts of the lower courts exists. The trial court found that
Pastor was the owner of Procopio's share in Lot No. 6080, as there
was nothing to show that he sold it back to Alberto Yabo. The
respondent court on the other hand, held that Procopio Yabo never
sold his share in Lot No. 6080 to pastor, thus, there was no need
to convey it back to Procopio's son, Alberto.At this juncture, it
is worthy to quote pertinent portions of the testimony of Pastor
Makibalo:COURT: (To the witness.)Q Where is AlbertoYabo living?A It
is there in their house at Bulua.ATTY. JARAULA: (Continuing.)Q In
whose land?A Alipio Yabo's land.Q What relation has that land to
the two (2) parcels of land under litigation?A I bought already.Q
So, will you please tell the Honorable Court, why Alberto Yabo is
staying on that land when you said you have bought that land
already.A So, I sold back a portion to them because they requested
me.COURT: (To the witness.)Q When was that when you said that
Alberto Yabo requested a portion?A In 1967.COURT:Q Did you give
that portion which they requested?A Their share being inherited
from their father Procopio was the portion they requested.COURTQ
Yes. Did you grant that?A Yes.Q That is the area you sold to
Alberto Yabo, pursuant to his request?A Because that was the land
they inherited from their father that was what they requested.Q All
right. So that, the area now being occupied by Alberto Yabo?A Yes.
That land in the Centro.Q This is now identified as Lot No. 6180?A
Yes, Your Honor.ATTY. JARAULA: (Continuing.)Q Where did you sign a
document ceding that portion requested by Alberto Yabo?A We did not
make any receipt in favor of AlbertoYabo because they got only the
receipt of that of his father.COURT: (To the witness.)Q You mean to
say, that the receipt which Procopio signed when he sold his share
for [sic] the document which Alberto got?A Yes.COURT:All
right.ATTY. JARAULA (Continuing.)Q Now, for how much did you buy.
the shares of each of the brothers and sisters of your wife?A One
Hundred Ten (P110.00) Pesos.Q When you sold back to Alberto Yabo,
the portion corresponding to the share of his father Procopio in
the Poblacion, how much did he pay you?A The same.Q By the same,
you are referring by the same amount of One Hundred Ten (P110.00)
Pesos?A Yes, Sir. The same amount.37The petitioners contend that
the sales or conveyances made by Alipio's heirs were for their
consolidated shares in the two lots. If this was so, and the
receipt which Procopio signed when he sold his consolidated share
to Pastor was turned over to Alberto, the inevitable conclusion is
that Alberto redeemed his father's share in both lots, not only in
Lot: No. 6180. This conclusion is further buttressed by the
above-quoted testimony of Pastor that he bought the shares
(consolidated) of each of Alipio's heirs for P110.00 and that when
he sold back to Alberto the former share of Procopio, Alberto paid
him the same amount of P110.00.However, since the share of Procopio
in the two litigated parcels of land was purchased by Pastor during
his marriage with Maria, the same became conjugal property, and
half of it formed part of Maria's estate upon her death in 1962.
Accordingly, Pastor's resale in favor of Alberto could only be
valid with respect to Pastor's one-half (1/2) conjugal share and
one-fourth (1/4) hereditary share as heir of Maria.38The remaining
one-fourth (1/4) should go to Pastor's co-heirs, the private
respondents herein.Now on the fourth assigned error.Section 1, Rule
69 of the Rules of Court requires that all persons interested in
the land sought to be partitioned must be joined as defendants in
the complaints. All co-owners and persons having an interest in the
property are considered indispensable parties and an action for
partition will not lie without the joinder of said persons.39It has
been held that the absence of an indispensable party in a case
renders ineffective all the proceedings subsequent to the filing of
the complaint including the judgment.40It must be recalled that in
Civil Case No. 5174 the private respondents sought the partition of
the two lots based on the co-ownership which arose from the right
of succession to Alipio's estate. Since Jose Yabo confirmed,
through his thumbmark in the verification of the complaint, that he
had already parted with his share in Alipio's estate, he in effect
admitted that he had ceased to be a co-owner of the two lots which
comprised his father's estate. Thus, his non-joinder as a
party-plaintiff in the complaint would appear to be proper. He does
not, as well, appear to be an indispensable party in Civil Case No.
5000.As it turned out, however, the evidence and the issues which
cropped up rendered imperative the determination of the conjugal
assets of Pastor Makibalo and Maria Yabo and the partition of the
latter's estate among her heirs. Her estate consists of one-half()
of the conjugal properties, which should then be divided pursuant
to Article 1001 of the Civil Code since the marriage produced no
child; thus: one-half () to Pastor, and the other half to her
brother Jose, and to her nephews and nieces.Insofar as the
partition of Maria Yabo's estate is concerned, Jose is an
indispensable party. Strictly, the rule on indispensable parties
may bar a partition of Maria's estate. Considering, however, that
such estate or its partition are but incidents in Civil Case No.
5000 and Civil Case No. 5174, and the parties have not offered any
objection to the propriety of the determination and partition of
her estate, then in the light of Section 11 of Rule 341and Sections
1 and 5, Rule 1042of the Rules of Court, and following the rulings
of this Court in the 1910 case ofAlonso vs. Villamor43and the 1947
case ofCuyugan vs. Dizon,44an amendment of the complaint in Civil
Case No. 5174 to implead Jose Yabo as party plaintiff would be in
order.InAlonso, it was held that under Section 110 of the Code of
Civil Procedure whose first paragraph is substantially the same as
the aforesaid Section 1 of Rule 10 and Section 503 thereof, this
Court "has full power, apart from that power and authority which is
inherent, to amend the process, pleadings, proceedings, and
decision in this case by substituting, as party plaintiff, the real
party in interest." Our ruling inCuyuganstates:We, however, do not
believe that the case should be dismissed for plaintiff's failure
to join her husband. (Sec. 11, Rule 2, Rules of Court). Nor should
the case be remanded to the court below and a new trial ordered on
this account. The complaint may and should be amended here, to cure
the defect of party plaintiffs, after final decision is rendered.
Section 11, Rule 2, and Section 2, Rule 17, explicitly authorize
such procedure. As this Court had occasion to say inQuison vs.
Salud, (12 Phil., 109, 116), "a second action would be but a
repetition of the first and would involve both parties, plaintiffs
and defendant, in much additional expense and would cause much
delay, in that way defeating the purpose of the section, which is
expressly stated to be "that the actual merits of the controversy
may speedily be determined without regard to technicalities and in
the most expeditious and inexpensive manner." (See also Diaz vs. De
la Rama, 73 Phil., 104)To avoid further delay in the disposition of
this case, we declare Civil Case No. 5174 as thus duly amended.
Consequently, Jose Yabo may participate in the partition of the
estate of Maria Yabo. The fourth assigned error must then be
rejected.In view of the foregoing disquisitions, the appealed
judgment should be modified as follows: (a) the former 1/9 share of
Pelagia Yabo in Lots No. 6180 and 6080 which she sold to Pastor
should be treated as the latter's exclusive property which should
now pertain to the petitioners, his successors-in-interest; and (b)
the former 1/9 share of Procopio Yabo in both lots should be
divided as follows: 3/4 (respondent Pastor's 1/2 conjugal share and
1/4 representing his share therein as Maria's heir) for the spouses
Alberto and Elpia Yabo, and 1/4 (representing the share therein of
Maria's collateral relatives as Maria's heirs) for the private
respondents, including Alberto and Jose Yabo. The partition of the
two lots in controversy should therefore be made in this wise:(1)
1/9 share of Gaudencia Yabo should be allotted to her heirs or
successors-in-interest;(2) 1/9 share formerly belonging to Pelagia
Yabo to the petitioners as successors-in-interest of Pastor
Makibalo;(3) 1/9 hereditary share of Maria Yabo to be divided as
follows:(a) 1/2 for the petitioners (as successors-in-interest of
Pastor Makibalo), and(b) 1/2 for the private respondents, including
Jose Yabo or his heirs;(4) 1/9 share formerly belonging to Procopio
Yabo to be divided thus:(a) 3/4 for Spouses Alberto and Elpia Yabo,
and(b) 1/4 for the other private respondents, including Jose Yabo
or his heirs;(5) 5/9 shares which became the conjugal properties of
Pastor Makibalo and Maria Yabo to be divided thus:(a) 3/4 for the
petitioners (as successors-in-interest of Pastor Makibalo), and(b)
for the private respondents, including Jose Yabo or his heirs.In
sum, Lots Nos. 6180 anid 6080 should be partitioned as follows:1/9
or 4/36 to Guadencia Yabo's heirs or successors-in-interest;3/4 of
1/9 or 3/36 to the spouses Alberto and Elpina Yabo;8/36 to the
private respondents, including Jose Yabu or his heirs;21/36 to the
petitioners as successors-in-interest of Pastor Makibalo.WHEREFORE,
the challenged decision of the Court of Appeals of 8 February 1993
in CA-G.R. CV No. 12839 is AFFIRMED, subject to the modifications
indicated above. Upon the finality of this decision, let this case
be forthwith remanded to thecourt a quofor further proceedings on
the partition of Lots Nos. 6180 and 6080 in conformity with this
decision.No pronouncement as to costs.SO ORDERED.Padilla,
Bellosillo, Quiason and Kapunan, JJ., concur.Footnotes41 It
provides:Sec. 11. Misjoinder and non-joinder of parties. Misjoinder
of parties is not ground for dismissal of an action. Parties may be
dropped or added by order of the court on motion of any party or on
its own initiative at any stage of the action and on such terms as
are just. Any claim against a party may be severed and proceeded
with separately.42 They provide:Sec. 1. Amendments in general.
Pleadings may be amended by adding or striking out an allegation or
the name of any party, or by correcting a mistake in the name of a
party or a mistaken or inadequate allegation or description in any
other respect, so that the actual merits of the controversy may
speedily be determined, without regard to technicalities, and in
the most expeditious and inexpensive manner.xxx xxx xxxSec. 5.
Amendment to conform to or authorize presentation of evidence. When
issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects, as
if they had been raised in the pleadings. Such amendment of the
pleadings as may be necessary to cause them to conform to the
evidence and to raise these issues may be made upon motion of any
party at anytime, even after judgment; but failure so to amend does
not affect the result of the trial of these issues. If evidence is
objected to at the trial on the ground that it is not within the
issues made by the pleadings, the court may allow the pleadings to
be amended and shall do so freely when the presentation of the
merits of the action will be subserved thereby and the objecting
party fails to satisfy the court that the admission of such
evidence would prejudice him in maintaining his action or defense
upon the merits. The court may grant a continuance to enable the
objecting party to meet such evidence.G.R. No. 103301 December 8,
1995SERVICEWIDE SPECIALISTS INCORPORATED,petitioner,vs. HON. COURT
OF APPEALS and ARMANDO CUSTODIO, JR.,respondents. VITUG,J.:This
petition of Servicewide Specialists, Incorporated, seeks a review
oncertiorariof the 30th August 1991 decision of the Court of
Appeals1in CA-G.R. CV No. 20289 setting aside the judgment of the
Regional Trial Court of Manila, Branch 19,2which disposed of then
Civil Case No. 83-18536, a suit for replevin and damages, as
follows:WHEREFORE, judgment is hereby rendered, in favor of
plaintiff and against the defendant Armando Custodio, Jr., ordering
him to deliver and return the motor vehicle in question, complete
with accessories and equipment; and in the event that manual
delivery of the said meter vehicle cannot be effected, ordering
said defendant to pay the sum of P54,642.50, plus interest at the
rate of 14%per annum, from June 18, 1983 until fully paid, and to
pay the costs.SO ORDERED.3The litigation concerns a motor vehicle,
a Colt Galant Sigma 1600E, 1977 model, 4-door sedan, colored Baikal
White, with Serial No. A-121-UL-493 and Engine No. 2G-171-34. The
decisions of both the appellate court and the trial court rest on
the following representation of the facts:Plaintiff's evidence
shows that, on August 29, 1977, Eleuterio Bondoc executed and
delivered to Carmark Philippines a promissory note in the sum of
P66,119.04, payable in installments, Exhibit A, and in order to
secure payment, a chattel mortgage was executed in favor of Carmark
Philippines over the aforementioned motor vehicle, Exhibit B, which
was subsequently assigned in favor of Filinvest Corporation, with
the conformity of Eleuterio Bondoc, Exhibit C.On July 27, 1979,
Eleuterio Bondoc, as vendor, executed a deed of sale with
assumption of mortgage of the balance of the account in favor of
Cesar Dollente, Exhibits D and D-1, which, upon approval by
Filinvest Corporation, Cesar Dollente executed and delivered to
Filinvest Corporation a promissory note in the amount of
P37,528.83, payable in installments, Exhibit E. On October 26,
1979, Cesar Dollente, as vendor, executed a deed of sale with
assumption of mortgage over the aforementioned vehicle for the
balance of his account in favor of Ernesto Dollente, Exhibit E. On
September 28, 1979, Ernesto Dollente executed and delivered to
Filinvest Corporation a promissory note for the sum of P37,528.83,
payable in monthly installments. This obligation was secured by a
chattel mortgage executed between Cesar Dollente and Ernesto
Dollente, which was annotated and registered, Exhibit B-1.
Subsequently, Filinvest Corporation assigned all its rights and
interests on the promissory note and chattel mortgage to plaintiff,
with notice to Ernesto Dollente. The original defendant Ernesto
Dollente, having defaulted in the payment of the monthly
installments which fell due on June 15, 1979 up to September 15,
1981, plaintiff demanded from said defendant the payment of the
entire balance, which includes interest thereon and to return the
motor vehicle in question. By reason of the refusal of the original
defendant to pay the entire balance and to surrender possession of
the subject motor vehicle, this case was filed and, upon its
filing, upon motion, a writ of seizure was issued and the same was
implemented by the sheriff. A counter-replevin bond having been
filed, defendant Armando Custodio, Jr. had obtained possession of
the mortgaged vehicle.Traversing the plaintiffs claim, defendant's
evidence shows that, on September 8, 1978, defendant Armando
Custodio, Jr. obtained the motor vehicle in question by purchase
from Ernesto Dollente, Exhibit 1. Ernesto Dollente bought the same
on April 14, 1978 from Venus Motor Sales, Exhibits 2 and 3. When
defendant bought the said vehicle from Ernesto Dollente, he was
issued a clearance from the Constabulary Highway Patrol Group,
Exhibits 4 and 4-A. Since then defendant has been possessing the
vehicle in question. This vehicle was previously registered at
Urdaneta, Pangasinan.4Finding preponderance of the evidence in
favor of herein petitioner, the lower court ruled:The claim of
herein defendant that, Ernesto Dollente's breach of the chattel
mortgage should not bind him, because he is not a privy to such
contract, is hardly acceptable, for the reason that the
registration of the chattel mortgage is an effective and binding
notice to him of its existence. The transaction of Ernesto
Dollente, which led to the transfer of the registration of this
motor vehicle in favor of defendant Armando Custodio, Jr., is
doubtful and must have been conveniently arranged or manipulated to
effect this transfer. It is settled that once a mortgage is
registered with the Register of Deeds and in the Land
Transportation Commission, it is binding against anybody, including
defendant Armando Custodio, Jr. As correctly pointed out, in
purchasing the motor vehicle in question, defendant Armando
Custodio, Jr. knew or, at least, was presumed to know, by the mere
fact that the mortgage was registered in the Office of the Register
of Deeds, as in this case, the said chattel mortgage was subject to
a mortgage lien.5On appeal to it, the Court of Appeals saw merit in
the contention of private respondent that the dismissal at the
instance of petitioner himself of the amended complaint against
Ernesto Dollente after a failure of summons on him, was "fatal to
the entire action" Dollente being, in the considered view of the
appellate court, an indispensable party to the proceedings. The
appellate court elaborated:. . . it is abundantly clear that the
dismissal of the complaint as against the principal defendant
Dollente has robbed the action of any cause for survival. The
replevin suit owed its existence to an alleged right to possession
of the motor vehicle, which right in turn was founded on the
alleged default of Dollente. Now, since "the case against Ernesto
Dollente" was dismissed, albeit without prejudice, there remains no
cause of action against said defendant in the case. And since,
there is no distinct cause of action against the remaining
defendant, herein appellant Custodio, there remains no provable
cause in the action. The plaintiff's right to possession of the car
in case which is "conditioned upon the fact of actual default on
the part of the principal obligor" the existence of which fact "may
naturally be the subject of controversy" could not properly be
established in the absence, and after the plaintiff-initiated
exclusion, of the principal obligor and principal defendant. There
is no question, under the circumstances, that Dollente was an
indispensable party in the action. His presence is indispensable,
essential and compulsory if a final determination of the action
should be achieved (Sec. 7, Rule 3).It was clearly an error for the
trial court to have proceeded with the case without the
indispensable Dollente. The judgment rendered by the trial court
following such flawed proceedings is therefore ineffectual and
ineffective.6While, in its present petition for review
oncertiorari, Servicewide has raised a number of points, the
crucial issue still remains, however, to be whether or not an
action filed by the mortgagee for replevin to effect a foreclosure
of the property covered by the chattel mortgage would require that
the mortgagor be so impleaded as an indispensable party
thereto.Rule 60 of the Rules of Court allows a plaintiff, in an
action for the recovery of possession of personal property, to
apply for a writ of replevin if it can be shown that he is
"theownerof the property claimed . . . or isentitled to the
possessionthereof."7The plaintiff need not be the owner so long as
he is able to specify his right to the possession of the property
and his legal basis therefor. The question then, insofar as the
matter finds relation to the instant case, is whether or not the
plaintiff (herein petitioner) who has predicated his right on being
the mortgagee of a chattel mortgage should implead the mortgagor in
his complaint that seeks to recover possession of the encumbered
property in order to effect its foreclosure.The answer has to be in
the affirmative.8In a suit for replevin, a clear right of
possession must be established. A foreclosure under a chattel
mortgage may properly be commenced only once there is default on
the part of the mortgagor of his obligation secured by the
mortgage. The replevin in the instant case has been sought to pave
the way for the foreclosure of the object covered by the chattel
mortgage. The conditions essential for that foreclosure would be to
show, firstly, the existence of the chattel mortgage and, secondly,
the default of the mortgagor. These requirements must be
established since the validity of the plaintiffs exercise of the
right of foreclosure are inevitably dependent thereon. It would
thus seem, considering particularly an adverse and independentclaim
of ownershipby private respondent, that the lower court acted
improvidently when it granted the dismissal of the complaint
against Dollente,albeiton petitioner's (then plaintiff) plea, on
the ground that the "non-service of summons upon Ernesto Dollente
(would) only delay the determination of the merits of the case, to
the prejudice of the parties."9InImson v.Court of Appeals, we have
explained:. . . An indispensable party is one whose interest will
be affected by the court's action in the litigation, and without
whom no final determination of the case can be had. The party's
interest in the subject matter of the suit and in the relief sought
are so inextricably intertwined with the other parties' that his
legal presence as a party to the proceeding is an absolute
necessity. In his absence there cannot be a resolution of the
dispute of the parties before the court which is effective,
complete, or equitable.Conversely, a party is not indispensable to
the suit if his interest in the controversy or subject matter is
distinct and divisible from the interest of the other parties and
will not necessarily be prejudiced by a judgment which does
complete justice to the parties in court. He is not indispensable
if his presence would merely permit complete relief between him and
those already parties to the action or will simply avoid multiple
litigation.10Without the presence of indispensable parties to a
suit or proceeding, a judgment of a court cannot attain real
finality.11Having arrived at the foregoing conclusion, the Court
need not take up the other issues raised by petitioner.In passing,
the failure of summons upon Ernesto Dollente, per the Sheriffs
Return dated July 19, 1983,12is said to have been due to
defendant's being no longer a resident "at the given address as per
information gathered from the present occupant of the premises." It
appears that the remedial measures provided in Rule 14 of the Rules
of Court regrettably have not been properly availed of; for
instance, substitute service of summons under Section 8 thereof
could have been resorted to.13WHEREFORE, the decision of the Court
of Appeals is AFFIRMED. Costs against petitioner.SO
ORDERED.Footnotes7 Section 1. Application. Whenever the complaint
in an action prays for the recovery of possession of personal
property, the plaintiff may, at the commencement of the action or
at any time before answer, apply for an order for the delivery of
such property to him, in the manner hereinafter provided.Section.
2. Affidavit and bond. Upon applying for such order the plaintiff
must show by his own affidavit or that of some other person who
personally knows the facts:(a) That the plaintiff is the owner of
the property claimed, particularly describing it, or is entitled to
the possession thereof;(b) That the property is wrongfully detained
by the defendant, alleging the cause of detention thereof according
to his best knowledge, information, and belief;(c) That it has not
been taken for a tax assessment or fine pursuant to law, or seized
under an execution, or an attachment against the property of the
plaintiff, or if so seized, that it is exempt from such seizure;
and(d) The actual value of the property.The plaintiff must also
give a bond, executed to the defendant in double the value of the
property as stated in the affidavit aforementioned, for the return
of the property to the defendant if the return thereof be adjudged,
and for the payment to the defendant of such sum he may recover
from the plaintiff in the action.8 Sec. 7 Compulsory joinder of
indespensable parties. Parties in interest without whom no final
determination can be had of an action shall be joined either as
plaintiffs or defendants. (Rule 3, Rules of Court)THIRD
DIVISION[G.R. No. 141970.September 10, 2001]METROPOLITAN BANK,
& TRUST COMPANY,petitioner, vs.Hon. FLORO T. ALEJO, in His
Capacity as Presiding Judge ofBranch 172 of the Regional Trial
Court of Valenzuela; and SY TAN SE, represented by his
Attorney-in-Fact, SIAN SUAT NGO,respondents.D E C I S I O
NPANGANIBAN,J.:In a suit to nullify an existing Torrens Certificate
of Title (TCT) in which a real estate mortgage is annotated, the
mortgagee is an indispensable party.In such suit, a decision
canceling the TCT and the mortgage annotation is subject to a
petition for annulment of judgment, because the non-joinder of the
mortgagee deprived the court of jurisdiction to pass upon the
controversy.The CaseBefore this Court is a Petition for Review
onCertiorari[1]under Rule 45 of the Rules of Court, assailing the
March 25, 1999 Resolution of the Court of Appeals (CA) in CA-GR SP
No. 50638, which states in full:This resolves the petition for
annulment of judgment based on external (sic) fraud filed by
petitioner Metropolitan Bank and Trust Company seeking to annul the
Decision dated August 12, 1998 rendered by respondent judge,
Honorable Floro T. Alejo, Presiding Judge of the Regional Trial
Court, Branch 172, Valenzuela, Metro Manila, in Civil Case No.
4930-V-96 entitled Sy Tan Se, represented by his attorney-in-fact
Sian Suat Ngo v. Raul Acampado, et al.This Court has observed that
petitioner knew of the questioned Decision sometime [i]n October
1998 (Petition, Rollo, p. 3).This being the case, petitioner should
have first sought recourse by way of petition for relief from
judgment under Rule 38 of the 1997 Rules of Civil
Procedure.Accordingly, the petition for annulment of judgment is
DENIED DUE COURSE and DISMISSED outright for being insufficient in
form and substance (Section 2, Rule 47, 1997 Rules of Civil
Procedure).Also challenged is the January 27, 2000 CA
Resolution[2]denying petitioners Motion for Reconsideration.The
FactsOn November 21, 1995[3]and January 30, 1996,[4]Spouses Raul
and Cristina Acampado obtained loans from petitioner in the amounts
ofP5,000,000 andP2,000,000, respectively.As security for the
payment of these credit accommodations, the Acampados executed in
favor of petitioner a Real Estate Mortgage[5]and an Amendment of
Real Estate Mortgage[6]over a parcel of land registered in their
names.The land was covered by TCT No. V-41319 in the Registry of
Deeds of Valenzuela City, where the contracts were also registered
on November 20, 1995 and January 23, 1996, respectively.[7]On June
3, 1996, a Complaint for Declaration of Nullity of TCT No. V-41319
was filed by Respondent Sy Tan Se against Spouses Acampado.In the
Regional Trial Court (RTC) of Valenzuela, Branch 172, it was
docketed as Civil Case No. 4930-V-96,[8]the progenitor of the
present controversy.Despite being the registered mortgagee of the
real property covered by the title sought to be annulled,
petitioner was not made a party to Civil Case No. 4930-V-96,[9]nor
was she notified of its existence.Because the spouses defaulted in
the payment of their loan, extrajudicial foreclosure proceedings
over the mortgaged property were initiated on April 19, 1997.On
June 17, 1997, the sheriff of Valenzuela conducted an auction sale
of the property, during which petitioner submitted the highest and
winning bid.[10]On July 15, 1997, a Certificate of Sale was issued
in its favor.[11]This sale was entered in the Registry of Deeds of
Valenzuela on July 28, 1997.When the redemption period lapsed
exactly a year after, on July 28, 1998, petitioner executed an
Affidavit of Consolidation of Ownership to enable the Registry of
Deeds of Valenzuela to issue a new TCT in its name.Upon
presentation to the Register of Deeds of the Affidavit of
Consolidation of Ownership, petitioner was informed of the
existence of the August 12, 1998 RTC Decision in Civil Case No.
4930-V-96, annulling TCT No. V-41319.The dispositive portion of the
Decision[12]stated:WHEREFORE, judgment is hereby rendered declaring
as null and void Transfer Certificate of Title No.V-41319 in the
name of defendant Raul Acampado for having proceeded from an
illegitimate source.With costs against the defendant.SO ORDERED.On
January 27, 1999, petitioner filed with the Court of Appeals a
Petition for Annulment of the RTC Decision.Ruling of the Court of
AppealsFor being insufficient in form and substance, the Petition
for Annulment was outrightly dismissed by the CA.It ruled that
petitioner ought to have filed, instead, a petition for relief from
judgment or an action for quieting of title.Hence, this
Petition.[13]IssuesIn its Memorandum, petitioner presents the
following issues:Ix x x [W]hether or not a petition for annulment
of judgment under Rule 47 of the 1997 Rules of Civil Procedure is
the proper remedy available to petitioner under the
circumstances.IIx x x [W]hether or not the judgment of the trial
court in Civil Case No. 4930-V-96 should be annulled.[14]The Courts
RulingThe Petition is meritorious.First
Issue:ProperRemedyRespondents aver that a petition for annulment is
not proper, because there were three different remedies available
but they were not resorted to by petitioner.We are not
persuaded.First, a petition for relief, the remedy pointed to by
the Court of Appeals, was not available to petitioner.Section 1,
Rule 38 of the Rules of Court, states:Petition for relief from
judgment, order, or other proceedings.-When a judgment or final
order is entered, or any other proceeding is thereafter
takenagainst a partyin any court through fraud, accident, mistake,
orexcusable negligence, he may file a petition in such court and in
the same case praying that the judgment, order or proceeding be set
aside. (Italics supplied)It must be emphasized that petitioner was
never a party to Civil Case No. 4930-V-96.InLagula et al. v.
Casimiro etal.,[15]the Court held that -- relative to a motion for
relief on the ground of fraud, accident, mistake, or excusable
negligence-- Rule 38 of the Rules of Court only applies when the
one deprived of his right is a party to the case.Since petitioner
was never a party to the case or even summoned to appear therein,
then the remedy of relief from judgment under Rule 38 of the Rules
of Court was not proper.This is plainly provided in the italicized
words of the present provision just quoted.Second, in denying
petitioners Motion for Reconsideration of the Decision dismissing
the Petition for Annulment of Judgment, the Court of Appeals
reasoned that another remedy, an action for quieting of title, was
also available to petitioner.We do not agree.It should be stressed
that this case was instituted to ask for relief from the peremptory
declaration of nullity of TCT No. V-41319, which had been issued
without first giving petitioner an opportunity to be
heard.Petitioner focused on the judgment in Civil Case No.
4930-V-96 which adversely affected it, and which it therefore
sought to annul.Filing an action for quieting of title will not
remedy what it perceived as a disregard of due process; it is
therefore not an appropriate remedy.Equally important, an action
for quieting of title is filed only when there is a cloud on title
to real property or any interest therein. As defined, a cloud on
title is a semblance of title which appears in some legal form but
which is in fact unfounded.[16]In this case, the subject judgment
cannot be considered as a cloud on petitioners title or interest
over the real property covered by TCT No. V-41319, which does not
even have a semblance of being a title.It would not be proper to
consider the subject judgment as a cloud that would warrant the
filing of an action for quieting of title, because to do so would
require the court hearing the action to modify or interfere with
the judgment or order of another co-equal court.Well-entrenched in
our jurisdiction is the doctrine that a court has no power to do
so, as that action may lead to confusion and seriously hinder the
administration of justice.[17]Clearly, an action for quieting of
title is not an appropriate remedy in this case.Third, private
respondent cites a last remedy: the intervention by petitioner in
Civil Case No. 4930-V-96.The availability of this remedy hinges on
petitioners knowledge of the pendency of that case, which would
have otherwise been alerted to the need to intervene therein.Though
presumed by private respondent, any such knowledge prior to October
1998 is, however, emphatically denied by petitioner.The Petition
for Annulment before the Court of Appeals precisely alleged that
private respondent purposely concealed the case by excluding
petitioner as a defendant in Civil Case No. 4930-V-96, even if the
latter was an indispensable party.Without due process of law, the
former intended to deprive petitioner of the latters duly
registered property right.Indeed, the execution of the Decision in
Civil Case No. 4930-V-96 necessarily entailed its enforcement
against petitioner, even though it was not a party to that
case.Hence, the latter concludes that annulment of judgment was the
only effective remedy open to it.The allegation of extrinsic fraud,
if fully substantiated by a preponderance of evidence, may be the
basis for annulling a judgment.[18]The resort to annulment becomes
proper because of such allegation, coupled with the unavailability
of the other remedies pointed to by respondents.Second Issue:Lack
of JurisdictionIt is undisputed that the property covered by TCT
No. V-41319 was mortgaged to petitioner, and that the mortgage was
annotated on TCT No. V-41319 before the institution of Civil Case
No. 4930-V-96. It is also undisputed that all subsequent
proceedings pertaining to the foreclosure of the mortgage were
entered in the Registry of Deeds.The nullification and cancellation
of TCT No. V-41319 carried with it the nullification and
cancellation of the mortgage annotation.Although a mortgage affects
the land itself and not merely the TCT covering it, the
cancellation of the TCT and the mortgage annotation exposed
petitioner to real prejudice, because its rights over the mortgaged
property would no longer be known and respected by third
parties.Necessarily, therefore, the nullification of TCT No.
V-41319 adversely affected its property rights, considering that a
real mortgage is a real right and a real property by
itself.[19]Evidently, petitioner is encompassed within the
definition of an indispensable party; thus, it should have been
impleaded as a defendant in Civil Case No. 4930-V-96.An
indispensable party is a party who has such an interest in the
controversy or subject matter that a final adjudication cannot be
made, in his absence, without injuring or affecting that
interest[;] a party who has not only an interest in the subject
matter of the controversy, but also has an interest of such nature
that a final decree cannot be made without affecting his interest
or leaving the controversy in such a condition that its final
determination may be wholly inconsistent with equity and good
conscience.It has also been considered that an indispensable party
is a person in whose absence there cannot be a determination
between the parties already before the court which is effective,
complete, or equitable.Further, an indispensable party is one who
must be included in an action before it may properly go forward.A
person is not an indispensable party, however, if his interest in
the controversy or subject matter is separable from the interest of
the other parties, so that it will not necessarily be directly or
injuriously affected by a decree which does complete justice
between them.[20]The joinder of indispensable parties to an action
is mandated by Section 7, Rule 3 of the Revised Rules of Civil
Procedures, which we quote:SEC 7.Compulsory joinder of
indispensable parties. Parties in interest without whom no final
determination can be had of an action shall be joined either as
plaintiffs or defendants.Aside from the above provision,
jurisprudence requires such joinder, as the following excerpts
indicate:Indispensable parties must always be joined either as
plaintiffs or defendants, for the court cannot proceed without
them. x x x. Indispensable parties are those with such an interest
in the controversy that a final decree would necessarily affect
their rights, so that the courts cannot proceed without their
presence.[21]"x x x. Without the precence of indispensable parties
to a suit or proceeding, a judgment of a Court cannot attain real
finality."[22]Whenever it appears to the court in the course of a
proceeding that an indispensable party has not been joined, it is
the duty of the court to stop the trial and to order the inclusion
of such party. (The Revised Rules of Court, Annotated &
Commented by Senator Vicente J. Francisco, Vol. I, p. 271, 1973
ed., See also Cortez vs. Avila, 101 Phil. 705.)Such an order is
unavoidable, for the general rule with reference to the making of
parties in a civil action requires the joinder of all necessary
parties wherever possible, and the joinder of all indispensable
parties under any and all conditions, the presence of those latter
parties being a sine qua non of the exercise of judicial
power.(Borlasa vs. Polistico, 47 Phil. 345, at p. 347.)It is
precisely when an indispensable party is not before the court
(that) the action should be dismissed.(People vs. Rodriguez, 106
Phil. 325. at p. 327.)The absence of an indispensable party renders
all subsequent actuations of the court null and void, for want of
authority to act, not only as to the absent parties but even as to
those present.[23](emphasis supplied)The evident aim and intent of
the Rules regarding the joinder of indispensable and necessary
parties is a complete determination of all possible issues, not
only between the parties themselves but also as regards to other
persons who may be affected by the judgment.A valid judgment cannot
even be rendered where there is want of indispensable
parties.[24]From the above, it is clear that the presence of
indispensable parties is necessary to vest the court with
jurisdiction, which is the authority to hear and determine a cause,
the right to act in a case.[25]We stress that the absence of
indispensable parties renders all subsequent actuations of the
court null and void, because of that courts want of authority to
act, not only as to the absent parties but even as to those
present.It is argued that petitioner cannot possibly be an
indispensable party, since the mortgage may not even be valid
because of the possible absence of compliance with the
requirement[26]that the mortgagor be the absolute owner of the
thing mortgaged.It should be emphasized, however, that at the time
the mortgage was constituted, there was an existing TCT (No.
V-41319), which named the mortgagors, the Acampado spouses, as the
registered owners of the property.InSeno v. Mangubat[27]this Court
held as follows:The well-known rule in this jurisdiction is that a
person dealing with a registered land has a right to rely upon the
face of the Torrens Certificate of Title and to dispense with the
need of inquiring further, except when the party concerned has
actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry.x x xx x xx x xThus,
where innocent third persons relying on the correctness of the
certificate of title issued, acquire rights over the property, the
court cannot disregard such rights and order the total cancellation
of the certificate for that would impair public confidence in the
certificate of title; otherwise everyone dealing with property
registered under the Torrens system would have to inquire in every
instance as to whether the title ha[s] been regularly or
irregularly issued by the court.Indeed this is contrary to the
evident purpose of the law.The peremptory disregard of the
annotations registered and entered in TCT No. V-41319 constituted a
deprivation of private property without due process of law and was
therefore unquestionably unjust and iniquitous.This, we cannot
countenance.Clearly, it was the trial courts duty to order
petitioners inclusion as a party to Civil Case No. 4930-V-96.This
was not done.Neither the court nor private respondents bothered to
implead petitioner as a party to the case.In the absence of
petitioner, an indispensable party, the trial court had no
authority to act on the case.Its judgment therein was null and void
due to lack of jurisdiction over an indispensable party.InLeonor v.
Court of Appeals[28]andArcelona v. Court of Appeals,[29]we held
thus:A void judgment for want of jurisdiction is no judgment at
all.It cannot be the source of any right nor the creator of any
obligation.All acts performed pursuant to it and all claims
emanating from it have no legal effect.Hence, it can never become
final and any writ of execution based on it is void:x x x it may be
said to be a lawless thing which can be treated as an outlaw and
slain at sight, or ignored wherever and whenever it exhibits its
head.WHEREFORE, the Petition isGRANTEDand the assailed Resolutions
of the Court of Appeals areREVERSED.The Decision of the Regional
Trial Court in Civil Case No. 4930-V-41319 is herebyNULLIFIEDandSET
ASIDE.No costs.SO ORDERED.Melo, (Chairman), Vitug,
Gonzaga-Reyes,andSandoval-Gutierrez, JJ.,concur.
[13]This case was deemed submitted for resolution on January 25,
2001, upon receipt by this Court of respondents 3-page Memorandum,
which was signed by Atty. Melencio A. Cea.Petitioners Memorandum,
signed by Atty. Renato B. Corpuz Jr. of Santiago Corpuz &
Ejercito, was filed earlier on December 29, 2000.
THIRD DIVISION[G.R. No.139306.August 29, 2000]MARIA MERCEDES
NERY, BENJAMIN NERY, MARIA PAZ NERY, APOLINAR NERY and ROBERTO
FRANCISCO NERY -- all represented by LICINIUS ABADIANO and LOURDES
DEL RIO ESPIRITU,petitioners, vs.GABRIEL LEYSON, JOSEFINA LEYSON
POBLETE, FE LEYSON, ESPERANZA LEYSON, CARIDAD LEYSON, ESTATES OF
DECEASED Spouses JOSE LEYSON and LOURDES VELEZ,respondents.D E C I
S I O NPANGANIBAN,J.:The Court of Appeals has exclusive
jurisdiction over actions for annulment of trial court
decisions.Hence, a regional trial court has no authority to annul
the final judgment of a co-equal court.The CaseBefore us is a
Petition for Review onCertiorariof the Decision[1]dated February
10, 1999 and the Resolution[2]dated June 30, 1999, issued by the
Court of Appeals (CA) in CA-GR CV No. 43655 affirming the dismissal
of the Complaint, instituted by the petitioners against the
respondents, for the declaration of nullity of the subject
certificate of title and judicial proceedings, with damages.The
assailed Decision disposed as follows:[3]WHEREFORE, premises
considered, the Decision dated February 10, 1993 is
herebyAFFIRMEDin toto.Costs against the plaintiffs-appellants.The
assailed Resolution denied reconsideration.The FactsThe facts of
this case are summarized by the CA, as follows:[4]The [Petitioners]
Maria Mercedes, Benjamin, Maria Paz, Apolinar and Roberto
Francisco, all surnamed Nery[,] claim that they xxx are the
children of xxx Mercedes del Rio, who died during World War II.They
are also heirs of their maternal grandmother Agatona del Corro, who
as a widow, died in 1976.When Mercedes del Rio died, she left a
share in the parcel of land in Lapu-Lapu City covered by O.C.T. No.
RO-0083 in the name of Agatona del Corro, et al.The land is being
managed by [petitioners] uncle Eduardo del Rio and Lourdes del Rio
Espiritu.After the death of Mercedes del Rio, her heirs executed an
Extrajudicial Partition and Declaration of Heirs dated January 28,
1964 covering the share of Mercedes del Rio in the land in
question.The death of Mercedes del Rio was duly annotated on O.C.T.
No. RO-0083 (Exh. A-1) on February 27, 1964.On December 2, 1964, a
Notice of Lis Pendens (Re-Civil Case No. R-8646 C.F.I. of Cebu) was
executed and annotated on the title by Atty. Regino Hermosisima
representing Lourdes Leyson, et al.It appears that the Leysons had
filed a case for annulment and cancellation of O.C.T. No.
RO-0083.The [petitioners] claim that they were not made parties to
said case and that although their mother Mercedes del Rio was
impleaded as defendant, she was already dead when Civil Case No.
[R-]8646 was filed in 1964.They maintain that the decision in Civil
Case No. [R-]8646 does not bind them for they [were] not parties
thereto, hence, the same [was] null and void.They therefore filed
this case [docketed as Civil Case No. 2379-L] seeking the
declaration of nullity of T.C.T. No. 119747 in the name of the
Leysons and of the judicial proceedings in Civil Case No.
[R-]8646.[Respondents] evidence, on the other hand, show that the
land in dispute, Lot No. 73 of Cadastral Survey of Opon (now
Lapu-Lapu City) is titled in their names under T.C.T. No. 19747
which was derived from O.C.T. No. 15615.Appearing in the said title
is the name of their father Jose S. Leyson who acquired the land
through purchase from Rosario Miranda.They were in possession of
the property until 1963 when Agatona del Corro and her children
took over the possession of the same.Lot No. 73 of the Cadastral
Survey of Opon (now Lapu-Lapu City) covered by T.C.T. No. 19747
became the subject of litigation in Civil Case No. R-8646 entitled
Lourdes Velez Leyson, Josefina Leyson Poblete, Fe Leyson, Esperanza
Leyson, Caridad Leyson and Gabriel Leyson versus Agatona del Corro,
Antolin del Rio, Consuelo del Rio, Mercedes del Rio, Socorro del
Rio, Lourdes del Rio and Eduardo del Rio.The case was filed on
December 2, 1964 before the then Court of First Instance of Cebu,
Branch V.The trial court in Civil Case No. [R-]8646 rendered a
Decision on May 2, 1968 in favor of plaintiffs Lourdes V. Leyson,
et al., and against therein defendants Agatona del Corro, et al.The
dispositive portion of said decision reads as follows:IN VIEW OF
THE FOREGOING findings, the Court hereby renders judgment in favor
of the plaintiffs and against the defendants:(1)Setting aside the
order of this Court dated September 23, 1963 reconstituting the
Original Certificate of Title for Lot No. 73 of the Opon
Cadastre;(2)Declaring the reconstituted Original Certificate of
Title No. RO-0083 covering Lot No. 73 in the name of the defendants
as cancelled, null and void, and, without legal force and effect;
and, ordering, therefore, the defendants to turn over the
possession of the lot in question to the plaintiffs who have the
right to possess it;(3)Declaring the plaintiffs Transfer
Certificate of Title No. 19747 for Lot No. 73 valid and with legal
force and effect;(4)Declaring the herein plaintiffs to be the real
and absolute owners of Lot No. 73;(5)Ordering the defendants to pay
jointly and severally to the plaintiffs the sum ofP4,800.00 as
actual damages;(6)To pay P2,000.00 representing attorneys fees and
to pay the costs of the suit.SO ORDERED.Defendants Agatona, et al.
appealed the aforesaid decision to the Court of Appeals where it
was docketed as CA-G.R. No. 45878-R.In its Decision promulgated on
March 15, 1976, the appellate court affirmed in all respects the
decision appealed from (Exh. 2 and 2-A).For failure of the
defendants Agatona del Corro, et al. to appeal the decision of the
Court of Appeals, the same xxx [became] final and executory on
April 10, 1976 as shown by the Entry of Judgment (Exh. 3 and
3-A).Subsequent to the finality of the appellate courts decision in
Civil Case No. R-8646 on April 10, 1976, there were efforts on the
part of the Leysons to execute the decision in Civil Case No.
R-8646 but for one reason or another, the same did not materialize
as testified to by one of the [respondents] in the present case,
Caridad V. Leyson.x x x.On January 16, 1991, the petitioners
instituted against the respondents an action for the declaration of
nullity of TCT No. 19747 and the judicial proceedings in Civil Case
No. R-8646.The Regional Trial Court of Lapu-Lapu City, Branch
27,[5]rendered a Decision[6]dated February 10, 1993, in favor of
the respondents.It disposed as follows:[7]WHEREFORE, premises
considered, judgment is hereby rendered in favor of the [herein
respondents] and against the [herein petitioners], dismissing the
case with cost against the [petitioners].As earlier stated, the CA
denied the petitioners appeal.Ruling of the Court of AppealsThe CA
ruled that petitioners action for annulment of title and judicial
proceedings was not barred byres judicata, which was inapplicable,
but by the principle of conclusiveness of judgment under Rule 39,
Section 49, par. (c) of the Rules of Court.The issue of which
between the two reconstituted titles was valid and genuine was
settled by the CA in the earlier case docketed as CA-GR No.
45678-R, which ruled:Insofar as the two titles existing over the
same parcel of land are concerned, [w]e agree with the lower court
that TCT No. 19747 should prevail, and that the reconstituted OCT
No. RO-0083 should be cancelled.Upon the facts set forth above, it
is evident that OCT No. 15615 and TCT No. 8834, both in the names
of the defendants, have been cancelled.Said title[s], or either of
them, therefore, may no longer be validly reconstituted.The
provisions of Republic Act No. 26 are applicable and their mandate
must be obeyed.According to said law, reconstitution of the lost or
destroyed title may be ordered by the court only if, after hearing,
it finds, among others, that the documents represented as supported
by parole evidence or otherwise, are sufficient and proper to
warrant the reconstitution, and that the petitioner is the
registered owner of the property or has an interest therein, and
that said certificate of title was in force at the time it was lost
or destroyed (Section 15).As plaintiffs title had already cancelled
the title relied upon by the defendants in their petition for
reconstitution, it follows that the reconstitution of the latter
was null and void and, therefore, the court a quo was correct in
ordering its cancellation.The petitioners action for annulment was
filed fifteen years after the above-mentioned judgment had become
final on April 10, 1976.The long period of time that had lapsed
precluded them from further prosecuting the same issue.Finally, a
regional trial court has no jurisdiction to annul the judgment of a
co-equal court; jurisdiction in such cases lies in the Court of
Appeals.Hence, this Petition.[8]Issues
Insisting that they were deprived of their day in court,
petitioners, in their Memorandum, raise the following
issues:[9]1.Whether or not the Court of Appeals erred in ruling
that the petitioners cause of action was barred by the principle of
conclusiveness of judgment under Rule 39, Section 49, Paragraph (c)
of the Rules of Court.2.Whether or not the Court of Appeals erred
in ruling that the decision in Civil Case No. R-8646, as affirmed
by the Court of Appeals in CA-GR No. 45678-R, [became] final and
executory against herein petitioners.
This Courts Ruling
The Court, after due deliberation, resolves to deny the
Petition.
First Issue:Conclusiveness of Judgment
Petitioners challenge the application to this case of the
principle of conclusiveness of judgment, arguing that jurisdiction
over them was never acquired by the trial court.Barring their
action would be tantamount to deprivation of property without due
process of law, they argue.Respondents, on the other hand, insist
that the trial court in Civil Case No. R-8646 acquired jurisdiction
over the persons of the defendants therein including the
petitioners because (1) it was the duty of the attorney for the
deceased Mercedes del Rio to inform the court of the clients death,
and (2) the attorney represented the same interest as the other
defendants -- their grandmother, uncles and aunts.Respondents add
that petitioners failure to raise this defense in the Answer and
Amended Answer constituted a waiver of this defense; hence, the
latter are estopped from raising it now.Rule 39, Section 49 of the
Rules of Court, which the CA cited as the basis for the assailed
Decision, provides:SEC. 49.Effect of judgments.The effect of a
judgment or final order rendered by a court or judge of the
Philippines, having jurisdiction to pronounce the judgment or
order, may be as follows:(a)In case of a judgment or order against
a specific thing, or in respect to the probate of a will, or the
administration of the estate of a deceased person, or in respect to
the personal, political, or legal condition or status of a
particular person or his relationship to another, the judgment or
order is conclusive upon the title to the thing, the will or
administration, or the condition, status or relationship of the
person; however, the probate of a will or granting of letters of
administration shall only be prima facie evidence of the death of
the testator or intestate;(b)In other cases, the judgment or order
is, with respect to the matter directly adjudged or as to any other
matter that could have been raised in relation thereto, conclusive
between the parties and their successors in interest by title
subsequent to the commencement of the action or special proceeding,
litigating for the same thing and under the same title and in the
same capacity;(c)In any other litigation between the same parties
or their successors in interest, that only is deemed to have been
adjudged in a former judgment which appears upon its face to have
been so adjudged, or which was actually and necessarily included
therein or necessary thereto.[10]To bar the petitioners action for
annulment on the ground ofres judicata, the following elements
should be present:(1) the judgment being sought to bar the new
action must be final; (2) the decision must have been rendered by a
court having jurisdiction over the subject matter and the parties;
(3) the disposition of the case must be based on a judgment or an
order on the merits; and (4) there must be identity of parties,
subject matter and causes of action.[11]There is clearly no
identity of parties between Civil Case R-8646 and 2379-L.[12]The
petitioners were indispensable parties in Civil Case R-8646, as
they were the legal heirs of Mercedes del Rio, who was one of the
registered owners in OCT RO-0083/15615 which covered the disputed
land.Furthermore, she has been dead since 1942 oryears before Civil
Case R-8646 was filed in 1964.The joinder of indispensable parties
or parties in interest, without whom there can be no final
determination of an action is compulsory under Rule 3, Section 7 of
the Rules of Court.[13]However, petitioners were never served
summons; neither did they join their relatives in filing the Answer
and Amended Answer.Nor were they given a chance to set up their own
defenses against the respondents claim of ownership over the
disputed lot.Plainly then, the trial court did not acquire
jurisdiction over them.Respondents, on the other hand, contend that
the trial court acquired jurisdiction over the petitioners when
they failed to notify the lower court of the death of Mercedes del
Rio during the trial of Civil Case R-8646.We disagree.Under Section
16, Rule 3 of the Rules of Court, only in a pending case is the
counsel of a party required to inform the court in case the client
dies or becomes incapacitated or incompetent.A pending case
necessarily implies that the court has already acquired
jurisdiction over the person of the party who died or became
incapacitated or incompetent.Prior to this development, the trial
court cannot impose such requirement on the counsel for the
defendants; Section 16 of Rule 3 thus finds no application to this
case.On the other hand, it is the duty of the plaintiff to implead
all the necessary or indispensable parties for the complete
determination of the action.OCT RO-0083/15615 reveals that Mercedes
del Rio was a registered co-owner of the disputed lot, but she was
not placed under the jurisdiction of the trial court in Civil Case
No. R-8646.Neither were her heirs.Respondents also posit that the
service of summons on the petitioners could be dispensed with,
since there is substantial identity between the mother and the
siblings of Mercedes del Rio, on the one hand, and the petitioners
on the other.The reason for this substantial identity is that the
petitioners represent the same interest as the other defendants in
Civil Case R-8646.Again, we disagree.True,res judicatais not
defeated by a minor difference of parties, as it does not require
absolute but only substantial identity of parties.[14]But there is
substantial identity only when the additional party acts in the
same capacity or is in privity with the parties in the former
action.[15]This is not so in the present case.Co-owners are not
partiesinter sein relation to the property owned in common.[16]A
subsequent action by a co-heir, who did not join the earlier
dismissed action for recovery of property, should not be barred by
prior judgment.[17]Neither will conclusiveness of judgment apply
because there was no identity of parties.In view of the foregoing
discussion, petitioners should not be bound by the decision in
Civil Case No. R-8646.This, however, does not justify the reversal
of the assailed Decision.As will now be explained, the petitioners
action suffers from a fatal defect which prevents their action for
annulment from prospering.
Second Issue:Annulment of Judgment
The reason why the herein Petition cannot be granted is the
trial courts lack of jurisdiction to annul a final judgment of a
co-equal court.Petitioners allege that the decision in Civil Case
R-8646 passed upon the validity of OCT RO-0083/15615.Such
allegation makes the root of their present action one for annulment
of a final judgment.This Court cannot ignore the fact that such
action is outside the jurisdiction of the RTC.On this point, the CA
ruled, albeit in passing, that xxx the courta quodoes not have the
jurisdiction to annul the judgment of a regional trial court as
jurisdiction thereon is lodged with the Court of Appeals.[18]We
sustain the Court of Appeals on this point.Section 9 of BP
129,[19]as amended, vests in the CA [e]xclusive jurisdiction over
actions for annulment of judgments of regional trial courts
xxx.[20]Hence, even if the trial court in Civil Case No. R-8646 did
not acquire jurisdiction over the petitioners, the trial court in
Civil Case No. 2379-L cannot annul the final judgment in Civil Case
No. R-8646, as jurisdiction over the subject matter, which in this
case is annulment of final judgment, is vested by law in a higher
court, the CA.[21]WHEREFORE, the Petition isDENIEDand, for the
reasons above-stated, the assailed Decision and Resolution
areAFFIRMED.Costs against the petitioners.SO ORDERED.Melo,
(Chairman), Vitug, Purisima,andGonzaga-Reyes, JJ.,concur.
THIRD DIVISIONELPIDIO S. UY,doing business under the name and
style EDISON DEVELOPMENT & CONSTRUCTION,Petitioner,G.R. No.
157065Present:
- versus -QUISUMBING,J., Chairperson,CARPIO,CARPIO
MORALES,TINGA, andVELASCO, JR.,JJ.
HONORABLE COURT OF APPEALSand the HERITAGE PARK MANAGEMENT
CORPORATION (HPMC),Respondents.Promulgated:July 11, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -
-xDECISIONQUISUMBING,J.:This is a Petition for Review seeking to
reverse and set aside the Decision[1]datedJanuary 31, 2003of the
Court of Appeals in CA-G.R. SP. No. 69771.TheHeritageMemorial
Parkis a flagship project of the Bases Conversion Development
Authority (BCDA) inFortBonifacio. To implement the project, the
BCDA, onSeptember 9, 1994, entered into an agreement denominated as
the Pool Formation Trust Agreement[2](PFTA) with the Philippine
National Bank (PNB) and the Public Estates Authority (PEA).The BCDA
was designated as the Project Owner; PEA, the Project Manager; and
PNB as the Trustee.As project owner, the BCDA was tasked to sell
the Heritage Park Investment Certificates to the public and buyers
become certificate holders.The certificate gives the PNB the
absolute legal and beneficial title toHeritageParkin trust for the
certificate holders.The PNB, as trustee, shall protect the values
of the assets in the trust, receive and have custody over the
proceeds from the sale of the certificates, administer the various
funds, including disbursements for project costs and related
expenses, turnover the Perpetual Care Fund to the Successor
Trustee, turnover custody over documents pertaining to the Heritage
Park and the residual funds to BCDA, and turnover all the documents
and records to the Board of Trustees after completion of the
project.[3]PEA, as project manager, is tasked to implement and
complete the various engineering works and improvements
ofHeritagePark.On November 20, 1996, PEA and the petitioner, a
single proprietorship doing business under the name and style of
Edison Development and Construction, executed a Landscaping and
Construction Agreement whereby the petitioner undertook to do all
the landscaping, including the construction of aterrasoleumof the
Heritage Park.The Heritage Park Executive Committee[4]approved the
agreement onMay 29, 1997.[5]Pursuant to Section 11.01[6]of the
PFTA, in April 1999, the certificate holders of the project
organized themselves into a non-stock, non-profit corporation, the
Heritage