Full Txt 5 Cases

G.R. No. L-46296 September 24, 1991

EPITACIO DELIMA, PACLANO DELIMA, FIDEL DELIMA, VIRGILIO DELIMA, GALILEO DELIMA, JR., BIBIANO BACUS, OLIMPIO BACUS and PURIFICACION BACUS, petitioners, vs.HON. COURT OF APPEALS, GALILEO DELIMA (deceased), substituted by his legal heirs, namely: FLAVIANA VDA. DE DELIMA, LILY D. ARIAS, HELEN NIADAS, ANTONIO DELIMA, DIONISIO DELIMA, IRENEA DELIMA, ESTER DELIMA AND FELY DELIMA, respondents.

Gabriel J. Canete for petitioners.

Emilio Lumontad, Jr. for private respondents.

MEDIALDEA, J.:p

This is a petition for review on certiorari of the decision of the Court of Appeals reversing the trial court's judgment which declared as null and void the certificate of title in the name of respondents' predecessor and which ordered the partition of the disputed lot among the parties as co-owners.

The antecedent facts of the case as found both by the respondent appellate court and by the trial court are as follows:

During his lifetime, Lino Delima acquired Lot No. 7758 of the Talisay-Minglanilla Friar Lands Estate in Cebu by sale on installments from the government. Lino Delima later died in 1921 leaving as his only heirs three brothers and a sister namely: Eulalio Delima, Juanita Delima, Galileo Delima and Vicente Delima. After his death, TCT No. 2744 of the property in question was issued on August 3, 1953 in the name of the Legal Heirs of Lino Delima, deceased, represented by Galileo Delima.

On September 22, 1953, Galileo Delima, now substituted by respondents, executed an affidavit of "Extra-judicial Declaration of Heirs." Based on this affidavit, TCT No. 2744 was cancelled and TCT No. 3009 was issued on February 4,1954 in the name of Galileo Delima alone to the exclusion of the other heirs.

Galileo Delima declared the lot in his name for taxation purposes and paid the taxes thereon from 1954 to 1965.

On February 29, 1968, petitioners, who are the surviving heirs of Eulalio and Juanita Delima, filed with the Court of First Instance of Cebu (now Regional Trial Court) an action for reconveyance and/or partition of property and for the annulment of TCT No. 3009 with damages against their uncles Galileo Delima and Vicente Delima,. Vicente Delima was joined as party defendant by the petitioners for his refusal to join the latter in their action.

On January 16, 1970, the trial court rendered a decision in favor of petitioners, the dispositive portion of which states:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the following are the declared owners of Lot No. 7758 of the Talisay-Minglanilla Friar Lands Estate presently covered by transfer Certificate of Title No. 3009, each sharing a pro-indiviso share of one-fourth;

1) Vicente Delima (one-fourth)

2) Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio Bacus and Purificacion Bacus (on-fourth);

3) Heirs of Eulalio Delima, namely Epitacio, Pagano, Fidel, Virgilio and Galileo Jr., all surnamed Delima (one-fourth); and

4) The Heirs of Galileo Delima, namely Flaviana Vda. de Delima, Lily D. Arias, Helen Niadas and Dionisio, Antonio, Eotu Irenea, and Fely, all surnamed Delima (one-fourth).

Transfer Certificate of Title No. 3009 is declared null and void and the Register of Deeds of Cebu is ordered to cancel the same and issue in lieu thereof another title with the above heirs as pro-indiviso owners.

After the payment of taxes paid by Galileo Delima since 1958, the heirs of Galileo Delima are ordered to turn a over to the other heirs their respective shares of the fruits of the lot in question computed at P170.00 per year up to the present time with legal (interest).

Within sixty (60) days from receipt of this decision the parties are ordered to petition the lot in question and the defendants are directed to immediately turn over possession of the shares here awarded to the respective heirs.

Defendants are condemned to pay the costs of the suit.

The counterclaim is dismissed.

SO ORDERED. (pp. 54-55, Rollo)

Not satisfied with the decision, respondents appealed to the Court of Appeals. On May 19, 1977, respondent appellate court reversed the trial court's decision and upheld the claim of Galileo Delima that all the other brothers and sister of Lino Delima, namely Eulalio, Juanita and Vicente, had already relinquished and waived their rights to the property in his favor, considering that he (Galileo Delima) alone paid the remaining balance of the purchase price of the lot and the realty taxes thereon (p. 26, Rollo).

Hence, this petition was filed with the petitioners alleging that the Court of Appeals erred:

1) In not holding that the right of a co-heir to demand partition of inheritance is imprescriptible. If it does, the defenses of prescription and laches have already been waived.

2) In disregarding the evidence of the petitioners.(p.13, Rollo)

The issue to be resolved in the instant case is whether or not petitioners' action for partition is already barred by the statutory period provided by law which shall enable Galileo Delima to perfect his claim of ownership by acquisitive prescription to the exclusion of petitioners from their shares in the disputed property. Article 494 of the Civil Code expressly provides:

Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement.

A donor or testator may prohibit partition for a period which shall not exceed twenty years.

Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.

As a rule, possession by a co-owner will not be presumed to be adverse to the others, but will be held to benefit all. It is understood that the co-owner or co-heir who is in possession of an inheritance pro-indiviso for himself and in representation of his co-owners or co-heirs, if, as such owner, he administers or takes care of the rest thereof with the

obligation of delivering it to his co-owners or co-heirs, is under the same situation as a depository, a lessee or a trustee (Bargayo v. Camumot, 40 Phil, 857; Segura v. Segura, No. L-29320, September 19, 1988, 165 SCRA 368). Thus, an action to compel partition may be filed at any time by any of the co-owners against the actual possessor. In other words, no prescription shall run in favor of a co-owner against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership (Del Blanco v. Intermediate Appellate Court, No. 72694, December 1, 1987, 156 SCRA 55).

However, from the moment one of the co-owners claims that he is the absolute and exclusive owner of the properties and denies the others any share therein, the question involved is no longer one of partition but of ownership (De Castro v. Echarri, 20 Phil. 23; Bargayo v. Camumot, supra; De los Santos v. Santa Teresa, 44 Phil. 811). In such case, the imprescriptibility of the action for partition can no longer be invoked or applied when one of the co-owners has adversely possessed the property as exclusive owner for a period sufficient to vest ownership by prescription.

It is settled that possession by a co-owner or co-heir is that of a trustee. In order that such possession is considered adverse to the cestui que trust amounting to a repudiation of the co-ownership, the following elements must concur: 1) that the trustee has performed unequivocal acts amounting to an ouster of the cestui que trust; 2) that such positive acts of repudiation had been made known to the cestui que trust; and 3) that the evidence thereon should be clear and conclusive (Valdez v. Olorga, No. L-22571, May 25, 1973, 51 SCRA 71; Pangan v. Court of Appeals, No. L-39299, October 18, 1988, 166 SCRA 375).

We have held that when a co-owner of the property in question executed a deed of partition and on the strength thereof obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein he appears as the new owner of the property, thereby in effect denying or repudiating the ownership of the other co-owners over their shares, 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 (Castillo v. Court of Appeals, No. L-18046, March 31, 1964, 10 SCRA 549). Since an action for reconveyance of land based on implied or constructive trust prescribes after ten (10) years, it is from the date of the issuance of such title that the effective assertion of adverse title for purposes of the statute of limitations is counted (Jaramil v. Court of Appeals, No. L-31858, August 31, 1977, 78 SCRA 420).

Evidence shows that TCT No. 2744 in the name of the legal heirs of Lino Delima, represented by Galileo Delima, was cancelled by virtue of an affidavit executed by Galileo Delima and that on February 4, 1954, Galileo Delima obtained the issuance of a new title in Ms name numbered TCT No. 3009 to the exclusion of his co-heirs. The issuance of this new title constituted an open and clear repudiation of the trust or co-ownership, and the lapse of ten (10) years of adverse possession by Galileo Delima from February 4, 1954 was sufficient to vest title in him by prescription. As the certificate of title was notice to the whole world of his exclusive title to the land, such rejection was binding on the other heirs and started as against them the period of prescription. Hence, when petitioners filed their action for reconveyance and/or to compel partition on February 29, 1968, such action was already barred by prescription. Whatever claims the other co-heirs could have validly asserted before can no longer be invoked by them at this time.

ACCORDINGLY, the petition is hereby DENIED and the assailed decision of the Court of Appeals dated May 19, 1977 is AFFIRMED

G.R. No. L-57062 January 24, 1992

MARIA DEL ROSARIO MARIATEGUI, ET AL., petitioners, vs.HON. COURT OF APPEALS, JACINTO MARIATEGUI, JULIAN MARIATEGUI and PAULINA MARIATEGUI, respondents.

Montesa, Albon & Associates for petitioners.

Parmenio B. Patacsil, Patacsil Twins Law Office for the heirs of the late Maria del Rosario Mariategui.

Tinga, Fuentes & Tagle Firm for private respondents.

BIDIN, J.:

This is a petition for review on certiorari of the decision * of the Court of Appeals dated December 24, 1980 in CA-G.R. No. 61841, entitled "Jacinto Mariategui, et al. v. Maria del Rosario Mariategui, et al.," reversing the judgment of the then Court of First Instance of Rizal, Branch VIII ** at Pasig, Metro Manila.

The undisputed facts are as follows:

Lupo Mariategui died without a will on June 26, 1953 (Brief for respondents, Rollo, pp. 116; 8). During his lifetime, Lupo Mariategui contracted three (3) marriages. With his first wife, Eusebia Montellano, who died on November 8, 1904, he begot four (4) children, namely: Baldomera, Maria del Rosario, Urbana and Ireneo. Baldomera died and was survived by her children named Antero, Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed Espina. Ireneo also died and left a son named Ruperto. With his second wife, Flaviana Montellano, he begot a daughter named Cresenciana who was born on May 8, 1910 (Rollo, Annex "A", p. 36).

Lupo Mariategui and Felipa Velasco (Lupo's third wife) got married sometime in 1930. They had three children, namely: Jacinto, born on July 3, 1929, Julian, born on February 16, 1931 and Paulina, born on April 19, 1938. Felipa Velasco Mariategui died in 1941 (Rollo, Ibid).

At the time of his death, Lupo Mariategui left certain properties which he acquired when he was still unmarried (Brief for respondents, Rollo, pp. 116; 4). These properties are described in the complaint as Lots Nos. 163, 66, 1346 and 156 of the Muntinglupa Estate (Rollo, Annex "A", p. 39).

On December 2, 1967, Lupo's descendants by his first and second marriages, namely, Maria del Rosario, Urbana, Ruperto, Cresencia, all surnamed Mariategui and Antero, Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed Espina, executed a deed of extrajudicial partition whereby they adjudicated unto themselves Lot No. 163 of the Muntinglupa Estate. Thereafter, Lot No. 163 was the subject of a voluntary registration proceedings filed by the adjudicatees under Act No. 496, and the land registration court issued a decree ordering the registration of the lot. Thus, on April 1, 1971, OCT No. 8828 was issued in the name of the above-mentioned heirs. Subsequently, the registered owners caused the subdivision of the said lot into Lots Nos. 163-A to 163-H, for which separate transfer certificates of title were issued to the respective parties (Rollo, ibid).

On April 23, 1973, Lupo's children by his third marriage with Felipa Velasco (Jacinto, Julian and Paulina) filed with the lower court an amended complaint claiming that Lot No. 163 together with Lots Nos. 669, 1346 and 154 were owned by their common father, Lupo Mariategui, and that, with the adjudication of Lot No. 163 to their co-heirs, they (children of the third marriage) were deprived of their respective shares in the lots. Plaintiffs pray for partition of the estate of their deceased father and annulment of the deed of extrajudicial partition dated December 2, 1967 (Petition, Rollo, p. 10). Cresencia Mariategui Abas, Flaviana Mariategui Cabrera and Isabel Santos were impleaded in the complaint as unwilling defendants as they would not like to join the suit as plaintiffs although they acknowledged the status and rights of the plaintiffs and agreed to the partition of the parcels of land as well as the accounting of their fruits (Ibid., Rollo, p. 8; Record on Appeal, p. 4).

The defendants (now petitioners) filed an answer with counterclaim (Amended Record on Appeal, p. 13). Thereafter, they filed a motion to dismiss on the grounds of lack of cause of action and prescription. They specifically contended that the complaint was one for recognition of natural children. On August 14, 1974, the motion to dismiss was denied by the trial court, in an order the dispositive portion of which reads:

It is therefore the opinion of the Court that Articles 278 and 285 of the Civil Code cited by counsel for the defendants are of erroneous application to this case. The motion to dismiss is therefore denied for lack of merit.

SO ORDERED. (Ibid, p. 37).

However, on February 16, 1977, the complaint as well as petitioners' counterclaim were dismissed by the trial court, in its decision stating thus:

The plaintiffs' right to inherit depends upon the acknowledgment or recognition of their continuous enjoyment and possession of status of children of their supposed father. The evidence fails to sustain either premise, and it is clear that this action cannot be sustained. (Ibid, Rollo, pp. 67-68)

The plaintiffs elevated the case to the Court of Appeals on the ground that the trial court committed an error ". . . in not finding that the parents of the appellants, Lupo Mariategui and Felipa Velasco (were) lawfully married, and in holding (that) they (appellants) are not legitimate children of their said parents, thereby divesting them of their inheritance . . . " (Rollo, pp. 14-15).

On December 24, 1980, the Court of Appeals rendered a decision declaring all the children and descendants of Lupo Mariategui, including appellants Jacinto, Julian and Paulina (children of the third marriage) as entitled to equal shares in the estate of Lupo Mariategui; directing the adjudicatees in the extrajudicial partition of real properties who eventually acquired transfer certificates of title thereto, to execute deeds of reconveyance in favor, and for the shares, of Jacinto, Julian and Paulina provided rights of innocent third persons are not prejudiced otherwise the said adjudicatees shall reimburse the said heirs the fair market value of their shares; and directing all the parties to submit to the lower court a project of partition in the net estate of Lupo Mariategui after payment of taxes, other government charges and outstanding legal obligations.

The defendants-appellees filed a motion for reconsideration of said decision but it was denied for lack of merit. Hence, this petition which was given due course by the court on December 7, 1981.

The petitioners submit to the Court the following issues: (a) whether or not prescription barred private respondents' right to demand the partition of the estate of Lupo Mariategui, and (b) whether or not the private respondents, who belatedly filed the action for recognition, were able to prove their successional rights over said estate. The resolution of these issues hinges, however, on the resolution of the preliminary matter, i.e., the nature of the complaint filed by the private respondents.

The complaint alleged, among other things, that "plaintiffs are the children of the deceased spouses Lupo Mariategui . . . and Felipa Velasco"; that "during his lifetime, Lupo Mariategui had repeatedly acknowledged and confirmed plaintiffs as his children and the latter, in turn, have continuously enjoyed such status since their birth"; and "on the basis of their relationship to the deceased Lupo Mariategui and in accordance with the law on intestate succession, plaintiffs are entitled to inherit shares in the foregoing estate (Record on Appeal, pp. 5 & 6). It prayed, among others, that plaintiffs be declared as children and heirs of Lupo Mariategui and adjudication in favor of plaintiffs their lawful shares in the estate of the decedent (Ibid, p. 10).

A perusal of the entire allegations of the complaint, however, shows that the action is principally one of partition. The allegation with respect to the status of the private respondents was raised only collaterally to assert their rights in the estate of the deceased. Hence, the Court of Appeals correctly adopted the settled rule that the nature of an action filed in court is determined by the facts alleged in the complaint constituting the cause of action (Republic vs. Estenzo, 158 SCRA 282 [1988]).

It has been held that, if the relief demanded is not the proper one which may be granted under the law, it does not characterize or determine the nature of plaintiffs' action, and the relief to which plaintiff is entitled based on the facts alleged by him in his complaint, although it is not the relief demanded, is what determines the nature of the action (1 Moran, p. 127, 1979 ed., citing Baguioro vs. Barrios, et al., 77 Phil. 120).

With respect to the legal basis of private respondents' demand for partition of the estate of Lupo Mariategui, the Court of Appeals aptly held that the private respondents are legitimate children of the deceased.

Lupo Mariategui and Felipa Velasco were alleged to have been lawfully married in or about 1930. This fact is based on the declaration communicated by Lupo Mariategui to Jacinto who testified that "when (his) father was still living, he was able to mention to (him) that he and (his) mother were able to get married before a Justice of the Peace of Taguig, Rizal." The spouses deported themselves as husband and wife, and were known in the community to be such. Although no marriage certificate was introduced to this effect, no evidence was likewise offered to controvert these facts. Moreover, the mere fact that no record of the marriage exists does not invalidate the marriage, provided all requisites for its validity are present (People vs. Borromeo, 133 SCRA 106 [1984]).

Under these circumstances, a marriage may be presumed to have taken place between Lupo and Felipa. The laws presume that a man and a woman, deporting themselves as husband and wife, have entered into a lawful contract of marriage; that a child born in lawful wedlock, there being no divorce, absolute or from bed and board is legitimate; and that things have happened according to the ordinary course of nature and the ordinary habits of life (Section 5 (z), (bb), (cc), Rule 131, Rules of Court; Corpus v. Corpus, 85 SCRA 567 [1978]; Saurnaba v. Workmen's Compensation, 85 SCRA 502 [1978]; Alavado v. City Gov't. of Tacloban, 139 SCRA 230 [1985]; Reyes v. Court of Appeals, 135 SCRA 439 [1985]).

Courts look upon the presumption of marriage with great favor as it is founded on the following rationale:

The basis of human society throughout the civilized world is that of marriage. Marriage in this jurisdiction is not only a civil contract, but it is a new relation, an institution in the maintenance of which the public is deeply interested. Consequently, every intendment of the law leans toward legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the absence of any counterpresumption or evidence special to that case, to be in fact married. The reason is that such is the common order of society and if the parties were not what they thus hold themselves out as being, they would be living in the constant violation of decency and of law . . . (Adong vs. Cheong Seng Gee, 43 Phil. 43, 56 [1922] quoted in Alavado vs. City Government of Tacloban, 139 SCRA 230 [1985]).

So much so that once a man and a woman have lived as husband and wife and such relationship is not denied nor contradicted, the presumption of their being married must be admitted as a fact (Alavado v. City Gov't. of Tacloban, supra).

The Civil Code provides for the manner under which legitimate filiation may be proven. However, considering the effectivity of the Family Code of the Philippines, the case at bar must be decided under a new if not entirely dissimilar set of rules because the parties have been overtaken by events, to use the popular phrase (Uyguangco vs. Court of Appeals, G.R. No. 76873, October 26, 1989). Thus, under Title VI of the Family Code, there are only two classes of children — legitimate and illegitimate. The fine distinctions among various types of illegitimate children have been eliminated (Castro vs. Court of Appeals, 173 SCRA 656 [1989]).

Article 172 of the said Code provides that the filiation of legitimate children may be established by the record of birth appearing in the civil register or a final judgment or by the open and continuous possession of the status of a legitimate child.

Evidence on record proves the legitimate filiation of the private respondents. Jacinto's birth certificate is a record of birth referred to in the said article. Again, no evidence which tends to disprove facts contained therein was adduced before the lower court. In the case of the two other private respondents, Julian and Paulina, they may not have presented in evidence any of the documents required by Article 172 but they continuously enjoyed the status of children of Lupo Mariategui in the same manner as their brother Jacinto.

While the trial court found Jacinto's testimonies to be inconsequential and lacking in substance as to certain dates and names of relatives with whom their family resided, these are but minor details. The nagging fact is that for a considerable length of time and despite the death of Felipa in 1941, the private respondents and Lupo lived together

until Lupo's death in 1953. It should be noted that even the trial court mentioned in its decision the admission made in the affidavit of Cresenciana Mariategui Abas, one of the petitioners herein, that " . . . Jacinto, Julian and Paulina Mariategui ay pawang mga kapatid ko sa ama . . ." (Exh. M, Record on Appeal, pp. 65-66).

In view of the foregoing, there can be no other conclusion than that private respondents are legitimate children and heirs of Lupo Mariategui and therefore, the time limitation prescribed in Article 285 for filing an action for recognition is inapplicable to this case. Corollarily, prescription does not run against private respondents with respect to the filing of the action for partition so long as the heirs for whose benefit prescription is invoked, have not expressly or impliedly repudiated the co-ownership. In other words, prescription of an action for partition does not lie except when the co-ownership is properly repudiated by the co-owner (Del Banco vs. Intermediate Appellate Court, 156 SCRA 55 [1987] citing Jardin vs. Hollasco, 117 SCRA 532 [1982]).

Otherwise stated, a co-owner cannot acquire by prescription the share of the other co-owners absent a clear repudiation of co-ownership duly communicated to the other co-owners (Mariano vs. De Vega, 148 SCRA 342 [1987]). Furthermore, an action to demand partition is imprescriptible and cannot be barred by laches (Del Banco vs. IAC, 156 SCRA 55 [1987]). On the other hand, an action for partition may be seen to be at once an action for declaration of co-ownership and for segregation and conveyance of a determinate portion of the property involved (Roque vs. IAC, 165 SCRA 118 [1988]).

Petitioners contend that they have repudiated the co-ownership when they executed the extrajudicial partition excluding the private respondents and registered the properties in their own names (Petition, p. 16; Rollo, p. 20). However, no valid repudiation was made by petitioners to the prejudice of private respondents. Assuming petitioners' registration of the subject lot in 1971 was an act of repudiation of the co-ownership, prescription had not yet set in when private respondents filed in 1973 the present action for partition (Ceniza vs. C.A., 181 SCRA 552 [1990]).

In their complaint, private respondents averred that in spite of their demands, petitioners, except the unwilling defendants in the lower court, failed and refused to acknowledge and convey their lawful shares in the estate of their father (Record on Appeal, p. 6). This allegation, though denied by the petitioners in their answer (Ibid, p. 14), was never successfully refuted by them. Put differently, in spite of petitioners' undisputed knowledge of their relationship to private respondents who are therefore their co-heirs, petitioners fraudulently withheld private respondent's share in the estate of Lupo Mariategui. According to respondent Jacinto, since 1962, he had been inquiring from petitioner Maria del Rosario about their (respondents) share in the property left by their deceased father and had been assured by the latter (Maria del Rosario) not to worry because they will get some shares. As a matter of fact, sometime in 1969, Jacinto constructed a house where he now resides on Lot No. 163 without any complaint from petitioners.

Petitioners' registration of the properties in their names in 1971 did not operate as a valid repudiation of the co-ownership. In Adille vs. Court of Appeals (157 SCRA 455, 461-462 [1988]), the Court held:

Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). The act of repudiation, in turn, is subject to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in possession through open, continuous, exclusive, and notorious possession of the property for the period required by law.

xxx xxx xxx

It is true that registration under the Torrens system is constructive notice of title, but it has likewise been our holding that the Torrens title does not furnish shield for fraud. It is therefore no argument to say that the act of registration is equivalent to notice of repudiation, assuming there was one, notwithstanding the long-standing rule that registration operates as a universal notice of title.

Inasmuch as petitioners registered the properties in their names in fraud of their co-heirs prescription can only be deemed to have commenced from the time private respondents discovered the petitioners' act of defraudation (Adille vs. Court of Appeals, supra). Hence, prescription definitely may not be invoked by petitioners because private respondents commenced the instant action barely two months after learning that petitioners had registered in their names the lots involved.

WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals dated December 24, 1980 is Affirmed.

G.R. No. L-3404ANGELA I. TUASON, plaintiff-appellant, vs.ANTONIO TUASON, JR., and GREGORIO ARANETA, INC., defendants-appellees.

Alcuaz & Eiguren for appellant.Araneta & Araneta for appellees.

MONTEMAYOR, J.:

In 1941 the sisters Angela I. Tuason and Nieves Tuason de Barreto and their brother Antonio Tuason Jr., held a parcel of land with an area of 64,928.6 sq. m. covered by Certificate of Title No. 60911 in Sampaloc, Manila, in common, each owning an undivided 1/3 portion. Nieves wanted and asked for a partition of the common property, but failing in this, she offered to sell her 1/3 portion. The share of Nieves was offered for sale to her sister and her brother but both declined to buy it. The offer was later made to their mother but the old lady also declined to buy, saying that if the property later increased in value, she might be suspected of having taken advantage of her daughter. Finally, the share of Nieves was sold to Gregorio Araneta Inc., a domestic corporation, and a new Certificate of Title No. 61721 was issued in lieu of the old title No. 60911 covering the same property. The three co-owners agreed to have the whole parcel subdivided into small lots and then sold, the proceeds of the sale to be later divided among them. This agreement is embodied in a document (Exh. 6) entitled "Memorandum of Agreement" consisting of ten pages, dated June 30, 1941.

Before, during and after the execution of this contract (Exh. 6), Atty. J. Antonio Araneta was acting as the attorney-in-fact and lawyer of the two co-owners, Angela I. Tuason and her brother Antonio Tuason Jr. At the same time he was a member of the Board of Director of the third co-owner, Araneta, Inc.

The pertinent terms of the contract (Exh. 6) may be briefly stated as follows: The three co-owners agreed to improve the property by filling it and constructing roads and curbs on the same and then subdivide it into small lots for sale. Araneta Inc. was to finance the whole development and subdivision; it was prepare a schedule of prices and conditions of sale, subject to the subject to the approval of the two other co-owners; it was invested with authority to sell the lots into which the property was to be subdivided, and execute the corresponding contracts and deeds of sale; it was also to pay the real estate taxes due on the property or of any portion thereof that remained unsold, the expenses of surveying, improvements, etc., all advertising expenses, salaries of personnel, commissions, office and legal expenses, including expenses in instituting all actions to eject all tenants or occupants on the property; and it undertook the duty to furnish each of the two co-owners, Angela and Antonio Tuason, copies of the subdivision plans and the monthly sales and rents and collections made thereon. In return for all this undertaking and obligation assumed by Araneta Inc., particularly the financial burden, it was to receive 50 per cent of the gross selling price of the lots, and any rents that may be collected from the property, while in the process of sale, the remaining 50 per cent to be divided in equal portions among the three co-owners so that each will receive 16.33 per cent of the gross receipts.

Because of the importance of paragraphs 9, 11 and 15 of the contract (Exh. 6), for purposes of reference we are reproducing them below:

(9) This contract shall remain in full force and effect during all the time that it may be necessary for the PARTY OF THE SECOND PART to fully sell the said property in small and subdivided lots and to fully collect the purchase prices due thereon; it being understood and agreed that said lots may be rented while there are no purchasers thereof;

(11) The PARTY OF THE SECOND PART (meaning Araneta Inc.) is hereby given full power and authority to sign for and in behalf of all the said co-owners of said property all contracts of sale and deeds of sale of the lots into which this property might be subdivided; the powers herein vested to the PARTY OF THE SECOND PART may, under its own responsibility and risk, delegate any of its powers under this contract to any of its officers, employees or to third persons;

(15) No co-owner of the property subject-matter of this contract shall sell, alienate or dispose of his ownership, interest or participation therein without first giving preference to the other co-owners to purchase and acquire the same under the same terms and conditions as those offered by any other prospective purchaser. Should none of the co-owners of the property subject-matter of this contract exercise the said preference to acquire or purchase the same, then such sale to a third party shall be made subject to all the conditions, terms, and dispositions of this contract; provided, the PARTIES OF THE FIRST PART (meaning Angela and Antonio) shall be bound by this contract as long as the PARTY OF THE SECOND PART, namely, the GREGORIO ARANETA, INC. is controlled by the members of the Araneta family, who are stockholders of the said corporation at the time of the signing of this contract and/or their lawful heirs;

On September 16, 1944, Angela I. Tuason revoked the powers conferred on her attorney-in-fact and lawyer, J. Antonio Araneta. Then in a letter dated October 19, 1946, Angela notified Araneta, Inc. that because of alleged breach of the terms of the "Memorandum of Agreement" (Exh. 6) and abuse of powers granted to it in the document, she had decided to rescind said contract and she asked that the property held in common be partitioned. Later, on November 20, 1946, Angela filed a complaint in the Court of First Instance of Manila asking the court to order the partition of the property in question and that she be given 1/3 of the same including rents collected during the time that the same including rents collected during the time that Araneta Inc., administered said property.

The suit was administered principally against Araneta, Inc. Plaintiff's brother, Antonio Tuason Jr., one of the co-owners evidently did not agree to the suit and its purpose, for he evidently did not agree to the suit and its purpose, for he joined Araneta, Inc. as a co-defendant. After hearing and after considering the extensive evidence introduce, oral and documentary, the trial court presided over by Judge Emilio Peña in a long and considered decision dismissed the complaint without pronouncement as to costs. The plaintiff appealed from that decision, and because the property is valued at more than P50,000, the appeal came directly to this Court.

Some of the reasons advanced by appellant to have the memorandum contract (Exh. 6) declared null and void or rescinded are that she had been tricked into signing it; that she was given to understand by Antonio Araneta acting as her attorney-in-fact and legal adviser that said contract would be similar to another contract of subdivision of a parcel into lots and the sale thereof entered into by Gregorio Araneta Inc., and the heirs of D. Tuason, Exhibit "L", but it turned out that the two contracts widely differed from each other, the terms of contract Exh. "L" being relatively much more favorable to the owners therein the less favorable to Araneta Inc.; that Atty. Antonio Araneta was more or less disqualified to act as her legal adviser as he did because he was one of the officials of Araneta Inc., and finally, that the defendant company has violated the terms of the contract (Exh. 6) by not previously showing her the plans of the subdivision, the schedule of prices and conditions of the sale, in not introducing the necessary improvements into the land and in not delivering to her her share of the proceeds of the rents and sales.

We have examined Exh. "L" and compared the same with the contract (Exh. 6) and we agree with the trial court that in the main the terms of both contracts are similar and practically the same. Moreover, as correctly found by the trial court, the copies of both contracts were shown to the plaintiff Angela and her husband, a broker, and both had every opportunity to go over and compare them and decide on the advisability of or disadvantage in entering into the contract (Exh. 6); that although Atty. Antonio Araneta was an official of the Araneta Inc.; being a member of the Board of Directors of the Company at the time that Exhibit "6" was executed, he was not the party with which Angela contracted, and that he committed no breach of trust. According to the evidence Araneta, the pertinent papers, and sent to her checks covering her receive the same; and that as a matter of fact, at the time of the trial, Araneta Inc., had spent about

P117,000 in improvement and had received as proceeds on the sale of the lots the respectable sum of P1,265,538.48. We quote with approval that portion of the decision appealed from on these points:

The evidence in this case points to the fact that the actuations of J. Antonio Araneta in connection with the execution of exhibit 6 by the parties, are above board. He committed nothing that is violative of the fiduciary relationship existing between him and the plaintiff. The act of J. Antonio Araneta in giving the plaintiff a copy of exhibit 6 before the same was executed, constitutes a full disclosure of the facts, for said copy contains all that appears now in exhibit 6.

Plaintiff charges the defendant Gregorio Araneta, Inc. with infringing the terms of the contract in that the defendant corporation has failed (1) to make the necessary improvements on the property as required by paragraphs 1 and 3 of the contract; (2) to submit to the plaintiff from time to time schedule of prices and conditions under which the subdivided lots are to be sold; and to furnish the plaintiff a copy of the subdivision plans, a copy of the monthly gross collections from the sale of the property.

The Court finds from the evidence that he defendant Gregorio Araneta, Incorporated has substantially complied with obligation imposed by the contract exhibit 6 in its paragraph 1, and that for improvements alone, it has disbursed the amount of P117,167.09. It has likewise paid taxes, commissions and other expenses incidental to its obligations as denied in the agreement.

With respect to the charged that Gregorio Araneta, Incorporated has failed to submit to plaintiff a copy of the subdivision plains, list of prices and the conditions governing the sale of subdivided lots, and monthly statement of collections form the sale of the lots, the Court is of the opinion that it has no basis. The evidence shows that the defendant corporation submitted to the plaintiff periodically all the data relative to prices and conditions of the sale of the subdivided lots, together with the amount corresponding to her. But without any justifiable reason, she refused to accept them. With the indifferent attitude adopted by the plaintiff, it was thought useless for Gregorio Araneta, Incorporated to continue sending her statement of accounts, checks and other things. She had shown on various occasions that she did not want to have any further dealings with the said corporation. So, if the defendant corporation proceeded with the sale of the subdivided lots without the approval of the plaintiff, it was because it was under the correct impression that under the contract exhibit 6 the decision of the majority co-owners is binding upon all the three.

The Court feels that recission of the contract exhibit 6 is not minor violations of the terms of the agreement, the general rule is that "recission will not be permitted for a slight or casual breach of the contract, but only for such breaches as are so substantial and fundamental as to defeat the object of the parties in making the agreement" (Song Fo & Co. vs. Hawaiian-Philippine Co., 47 Phil. 821).

As regards improvements, the evidence shows that during the Japanese occupation from 1942 and up to 1946, the Araneta Inc. although willing to fill the land, was unable to obtain the equipment and gasoline necessary for filling the low places within the parcel. As to sales, the evidence shows that Araneta Inc. purposely stopped selling the lots during the Japanese occupantion, knowing that the purchase price would be paid in Japanese military notes; and Atty. Araneta claims that for this, plaintiff should be thankfull because otherwise she would have received these notes as her share of the receipts, which currency later became valueles.

But the main contention of the appellant is that the contract (Exh. 6) should be declared null and void because its terms, particularly paragraphs 9, 11 and 15 which we have reproduced, violate the provisions of Art. 400 of the Civil Code, which for the purposes of reference we quote below:

ART. 400. No co-owner shall be obliged to remain a party to the community. Each may, at any time, demand the partition of the thing held in common.

Nevertheless, an agreement to keep the thing undivided for a specified length of time, not exceeding ten years, shall be valid. This period may be a new agreement.

We agree with the trial court that the provisions of Art. 400 of the Civil Code are not applicable. The contract (Exh., 6) far from violating the legal provision that forbids a co-owner being obliged to remain a party to the community, precisely has for its purpose and object the dissolution of the co-ownership and of the community by selling the parcel held in common and dividing the proceeds of the sale among the co-owners. The obligation imposed in the contract to preserve the co-ownership until all the lots shall have been sold, is a mere incident to the main object of dissolving the co-owners. By virtue of the document Exh. 6, the parties thereto practically and substantially entered into a contract of partnership as the best and most expedient means of eventually dissolving the co-ownership, the life of said partnership to end when the object of its creation shall have been attained.

This aspect of the contract is very similar to and was perhaps based on the other agreement or contract (Exh. "L") referred to by appellant where the parties thereto in express terms entered into partnership, although this object is not expressed in so many words in Exh. 6. We repeat that we see no violation of Art. 400 of the Civil Code in the parties entering into the contract (Exh. 6) for the very reason that Art. 400 is not applicable.

Looking at the case from a practical standpoint as did the trial court, we find no valid ground for the partition insisted upon the appellant. We find from the evidence as was done by the trial court that of the 64,928.6 sq. m. which is the total area of the parcel held in common, only 1,600 sq. m. or 2.5 per cent of the entire area remained unsold at the time of the trial in the year 1947, while the great bulk of 97.5 per cent had already been sold. As well observed by the court below, the partnership is in the process of being dissolved and is about to be dissolved, and even assuming that Art. 400 of the Civil Code were applicable, under which the parties by agreement may agree to keep the thing undivided for a period not exceeding 10 years, there should be no fear that the remaining 1,600 sq. m. could not be disposed of within the four years left of the ten-years period fixed by Art. 400.

We deem it unnecessary to discuss and pass upon the other points raised in the appeal and which counsel for appellant has extensively and ably discussed, citing numerous authorities. As we have already said, we have viewed the case from a practical standpoint, brushing aside technicalities and disregarding any minor violations of the contract, and in deciding the case as we do, we are fully convinced that the trial court and this Tribunal are carrying out in a practical and expeditious way the intentions and the agreement of the parties contained in the contract (Exh. 6), namely, to dissolve the community and co-ownership, in a manner most profitable to the said parties.

In view of the foregoing, the decision appealed from is hereby affirmed. There is no pronouncement as to costs.

G.R. No. L-4656 November 18, 1912

RICARDO PARDELL Y CRUZ and VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-appellees, vs.GASPAR DE BARTOLOME Y ESCRIBANO and MATILDE ORTIZ Y FELIN DE BARTOLOME, defendants-appellants.

Gaspar de Bartolome, in his own behalf.B. Gimenez Zoboli, for appellees.

TORRES, J.:

This is an appeal by bill of exceptions, from the judgment of October 5, 1907, whereby the Honorable Dionisio Chanco, judge, absolved the defendants from the complaint, and the plaintiff from a counterclaim, without special finding as to costs.

Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de Pardell, the first of whom, absent in Spain by reason of his employment, conferred upon the second sufficient and ample powers to appear before the courts of justice, on June 8, 1905, in his written complaint, alleged that the plaintiff, Vicente Ortiz, and the defendant, Matilde Ortiz, are the duly recognized natural daughters of the spouses Miguel Ortiz and Calixta Felin y Paula who died in Vigan, Ilocos Sur, in 1875 and 1882, respectively; that Calixta Felin, prior to her death, executed on August 17, 1876, a nuncupative will in Vigan whereby she made her four children, named Manuel, Francisca, Vicenta, and Matilde, surnamed Ortiz y Felin, her sole and universal heirs of all her property; that, of the persons enumerated, Manuel died before his mother and Francisca a few years after her death, leaving no heirs by force of law, and therefore the only existing heirs of the said testatrix are the plaintiff Vicenta Ortiz and the defendant Matilde Ortiz; that, aside from some personal property and jewelry already divided among the heirs, the testatrix possessed, at the time of the execution of her will, and left at her death the real properties which, with their respective cash values, are as follows:

1. A house of strong material, with the lot on which it is built, situated on Escolta Street, Vigan, and valued atP6,000.00

2. A house of mixed material, with the lot on which it stands, at No. 88 Washington Street, Vigan; valued at1,500.00

3. A lot on Magallanes Street, Vigan; valued at 100.004. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at 60.005. A parcel of rice land in the pueblo of Santa Lucia; valued at 86.006. Three parcels of land in the pueblo of Candon; valued at 150.00Total 7,896.00That, on or about the first months of the year 1888, the defendants, without judicial authorization, nor friendly or extrajudicial agreement, took upon themselves the administration and enjoyment of the said properties and collected the rents, fruits, and products thereof, to the serious detriment of the plaintiffs' interest; that, notwithstanding the different and repeated demands extrajudicially made upon Matilde Ortiz to divide the aforementioned properties with the plaintiff Vicente and to deliver to the latter the one-half thereof, together with one-half of the fruits and rents collected therefrom, the said defendant and her husband, the self-styled administrator of the properties mentioned, had been delaying the partition and delivery of the said properties by means of unkept promises and other excuses; and that the plaintiffs, on account of the extraordinary delay in the delivery of one-half of said properties, or their value in cash, as the case might be, had suffered losses and damages in the sum of P8,000. Said counsel for the plaintiffs therefore asked that judgment be rendered by sentencing the defendants, Gaspar de Bartolome, and Matilde Ortiz Felin de Bartolome, to restore and deliver to the plaintiffs one-half of the total value in cash, according to appraisal, of the undivided property specified, which one-half amounted approximately to P3,948, or if deemed proper, to recognize the plaintiff Vicenta Ortiz to be vested with the full and absolute right of ownership to the said undivided one-half of the properties in question, as universal testamentary heir thereof together with the defendant Matilde Ortiz, to indemnify the plaintiffs in the sum of P8,000, for losses and damages, and to pay the costs.

Counsel for the defendants, in his answer denied the facts alleged in paragraphs 1, 4, 6, 7, and 8 thereof, inasmuch as, upon the death of the litigating sister's brother Manuel, their mother, who was still living, was his heir by force of law, and the defendants had never refused to give to the plaintiff Vicente Ortiz her share of the said properties; and stated that he admitted the facts alleged in paragraph 2, provided it be understood, however, that the surname of the defendant's mother was Felin, and not Feliu, and that Miguel Ortiz died in Spain, and not in Vigan; that he also admitted paragraph 3 of the complaint, with the difference that the said surname should be Felin, and likewise paragraph 5, except the part thereof relating to the personal property and the jewelry, since the latter had not yet been divided; that the said jewelry was in the possession of the plaintiffs and consisted of: one Lozada gold chronometer watch with a chain in the form of a bridle curb and a watch charm consisting of the engraving of a postage stamp on a stone mounted in gold and bearing the initials M. O., a pair of cuff buttons made of gold coins, four small gold buttons, two finger rings, another with the initials M. O., and a gold bracelet; and that the defendants were willing to deliver to the plaintiffs, in conformity with their petitions, one-half of the total value in cash, according to appraisement, of the undivided real properties specified in paragraph 5, which half amounted to P3,948.

In a special defense said counsel alleged that the defendants had never refused to divide the said property and had in fact several years before solicited the partition of the same; that, from 1886 to 1901, inclusive, there was collected from

the property on Calle Escolta the sum of 288 pesos, besides a few other small amounts derived from other sources, which were delivered to the plaintiffs with other larger amounts, in 1891, and from the property on Calle Washington, called La Quinta, 990.95 pesos, which proceeds, added together, made a total of 1,278.95 pesos, saving error or omission; that, between the years abovementioned, Escolta, and that on Calle Washington, La Quinta, 376.33, which made a total of 1,141.71, saving error or omission; that, in 1897, the work of reconstruction was begun of the house on Calle Escolta, which been destroyed by an earthquake, which work was not finished until 1903 and required an expenditure on the part of the defendant Matilde Ortiz, of 5,091.52 pesos; that all the collections made up to August 1, 1905, including the rent from the stores, amounted to only P3,654.15, and the expenses, to P6,252.32, there being, consequently, a balance of P2,598.17, which divided between the sisters, the plaintiff and the defendant, would make the latter's share P1,299.08; that, as shown by the papers kept by the plaintiffs, in the year 1891 the defendant Bartolome presented to the plaintiffs a statement in settlements of accounts, and delivered to the person duly authorized by the latter for the purpose, the sum of P2,606.29, which the said settlement showed was owing his principals, from various sources; that, the defendant Bartolome having been the administrator of the undivided property claimed by the plaintiffs, the latter were owing the former legal remuneration of the percentage allowed by law for administration; and that the defendants were willing to pay the sum of P3,948, one-half of the total value of the said properties, deducting therefrom the amount found to be owing them by the plaintiffs, and asked that judgment be rendered in their favor to enable them to recover from the latter that amount, together with the costs and expenses of the suit.

The defendants, in their counter claim, repeated each and all of the allegations contained in each of the paragraphs of section 10 of their answer; that the plaintiffs were obliged to pay to the administrator of the said property the remuneration allowed him by law; that, as the revenues collected by the defendants amounted to no more than P3,654.15 and the expenditures incurred by them, to P6,252.32, it followed that the plaintiffs owed the defendants P1,299.08, that is one-half of the difference between the amount collected from and that extended on the properties, and asked that judgment be therefore rendered in their behalf to enable them to collect this sum from the plaintiffs, Ricardo Pardell and Vicenta Ortiz, with legal interest thereon from December 7, 1904, the date when the accounts were rendered, together with the sums to which the defendant Bartolome was entitled for the administration of the undivided properties in question.

By a written motion of August 21, 1905, counsel for the plaintiffs requested permission to amend the complaint by inserting immediately after the words "or respective appraisal," fifth line of paragraph 5, the phrase "in cash in accordance with the assessed value," and likewise further to amend the same, in paragraph 6 thereof, by substituting the following word in lieu of the petition for the remedy sought: "By reason of all the foregoing, I beg the court to be pleased to render the judgment by sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz Felin de Bartolome, to restore and deliver to the plaintiffs an exact one-half of the total vale of the undivided properties described in the complaint, such value to be ascertained by the expert appraisal of two competent persons, one of whom shall be appointed by the plaintiffs and the other by the defendants, and, in case of disagreement between these two appointees such value shall be determined by a third expert appraiser appointed by the court, or, in a proper case, by the price offered at public auction; or, in lieu thereof, it is requested that the court recognize the plaintiff, Vicenta Ortiz, to be vested with a full and absolute right to an undivided one-half of the said properties; furthermore, it is prayed that the plaintiffs be awarded an indemnity of P8,000 for losses and damages, and the costs." Notwithstanding the opposition of the defendants, the said amendment was admitted by the court and counsel for the defendants were allowed to a period of three days within which to present a new answer. An exception was taken to this ruling.

The proper proceedings were had with reference to the valuation of the properties concerned in the division sought and incidental issues were raised relative to the partition of some of them and their award to one or the other of the parties. Due consideration was taken of the averments and statements of both parties who agreed between themselves, before the court, that any of them might at any time acquire, at the valuation fixed by the expert judicial appraiser, any of the properties in question, there being none in existence excluded by the litigants. The court, therefore, by order of December 28, 1905, ruled that the plaintiffs were entitled to acquire, at the valuation determined by the said expert appraiser, the building known as La Quinta, the lot on which it stands and the warehouses and other improvements comprised within the inclosed land, and the seeds lands situated in the pueblos of Vigan and Santa Lucia; and that the

defendants were likewise entitled to acquire the house on Calle Escolta, the lot on Calle Magallanes, and the three parcels of land situated in the pueblo of Candon.

After this partition had been made counsel for the defendants, by a writing of March 8, 1906, set forth: That, having petitioned for the appraisement of the properties in question for the purpose of their partition, it was not to be understood that he desired from the exception duly entered to the ruling made in the matter of the amendment to the complaint; that the properties retained by the defendants were valued at P9,310, and those retained by the plaintiffs, at P2,885, one-half of which amounts each party had to deliver to the other, as they were pro indiviso properties; that, therefore, the defendants had to pay the plaintiffs the sum of P3,212.50, after deducting the amount which the plaintiffs were obliged to deliver to the defendants, as one-half of the price of the properties retained by the former; that, notwithstanding that the amount of the counterclaim for the expenses incurred in the reconstruction of the pro indiviso property should be deducted from the sum which the defendants had to pay the plaintiffs, the former, for the purpose of bringing the matter of the partition to a close, would deliver to the latter, immediately upon the signing of the instrument of purchase and sale, the sum of P3,212.50, which was one-half of the value of the properties alloted to the defendants; such delivery, however, was not to be understood as a renouncement of the said counterclaim, but only as a means for the final termination of the pro indiviso status of the property.

The case having been heard, the court on October 5, 1907, rendered judgment holding that the revenues and the expenses were compensated by the residence enjoyed by the defendant party, that no losses or damages were either caused or suffered, nor likewise any other expense besides those aforementioned, and absolved the defendants from the complaint and the plaintiffs from the counterclaim, with no special finding as to costs. An exception was taken to this judgment by counsel for the defendants who moved for a new trial on the grounds that the evidence presented did not warrant the judgment rendered and that the latter was contrary to law. This motion was denied, exception whereto was taken by said counsel, who filed the proper bill of exceptions, and the same was approved and forwarded to the clerk of this court, with a transcript of the evidence.

Both of the litigating sisters assented to a partition by halves of the property left in her will by their mother at her death; in fact, during the course of this suit, proceedings were had, in accordance with the agreement made, for the division between them of the said hereditary property of common ownership, which division was recognized and approved in the findings of the trial court, as shown by the judgment appealed from.

The issues raised by the parties, aside from said division made during the trial, and which have been submitted to this court for decision, concern: (1) The indemnity claimed for losses and damages, which the plaintiffs allege amount to P8,000, in addition to the rents which should have been derived from the house on Calle Escolta, Vigan; (2) the payment by the plaintiffs to the defendants of the sum of P1,299.08, demanded by way of counterclaim, together with legal interest thereon from December 7, 1904; (3) the payment to the husband of the defendant Matilde Ortiz, of a percentage claimed to be due him as the administrator of the property of common ownership; (4) the division of certain jewelry in the possession of the plaintiff Vicenta Ortiz; and (5) the petition that the amendment be held to have been improperly admitted, which was made by the plaintiffs in their written motion of August 21, 1905, against the opposition of the defendants, through which admission the latter were obliged to pay the former P910.50.lawphil.net

Before entering upon an explanation of the propriety or impropriety of the claims made by both parties, it is indispensable to state that the trial judge, in absolving the defendants from the complaint, held that they had not caused losses and damages to the plaintiffs, and that the revenues and the expenses were compensated, in view of the fact that the defendants had been living for several years in the Calle Escolta house, which was pro indiviso property of joint ownership.

By this finding absolving the defendants from the complaint, and which was acquiesced in by the plaintiffs who made no appeal therefrom, the first issue has been decided which was raised by the plaintiffs, concerning the indemnity for losses and damages, wherein are comprised the rents which should have been obtained from the upper story of the said house during the time it was occupied by the defendants, Matilde Ortiz and her husband, Gaspar de Bartolome.

Notwithstanding the acquiescence on the part of the plaintiffs, assenting to the said finding whereby the defendants were absolved from the complaint, yet, as such absolution is based on the compensation established in the judgment of the trial court, between the amounts which each party is entitled to claim from the other, it is imperative to determine whether the defendant Matilde Ortiz, as coowner of the house on Calle Escolta, was entitled, with her husband, to reside therein, without paying to her coowner, Vicenta Ortiz, who, during the greater part of the time, lived with her husband abroad, one-half of the rents which the upper story would have produced, had it been rented to a stranger.

Article 394 of the Civil Code prescribes:

Each coowner may use the things owned in common, provided he uses them in accordance with their object and in such manner as not to injure the interests of the community nor prevent the coowners from utilizing them according to their rights.

Matilde Ortiz and her husband occupied the upper story, designed for use as a dwelling, in the house of joint ownership; but the record shows no proof that, by so doing, the said Matilde occasioned any detriment to the interest of the community property, nor that she prevented her sister Vicenta from utilizing the said upper story according to her rights. It is to be noted that the stores of the lower floor were rented and accounting of the rents was duly made to the plaintiffs.

Each coowner of realty held pro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his coowners, for the reason that, until a division be made, the respective part of each holder can not be determined and every one of the coowners exercises, together with his other coparticipants, joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same.

As the hereditary properties of the joint ownership of the two sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz, defendant, were situated in the Province of Ilocos Sur, and were in the care of the last named, assisted by her husband, while the plaintiff Vicenta with her husband was residing outside of the said province the greater part of the time between 1885 and 1905, when she left these Islands for Spain, it is not at all strange that delays and difficulties should have attended the efforts made to collect the rents and proceeds from the property held in common and to obtain a partition of the latter, especially during several years when, owing to the insurrection, the country was in a turmoil; and for this reason, aside from that founded on the right of coownership of the defendants, who took upon themselves the administration and care of the properties of joint tenancy for purposes of their preservation and improvement, these latter are not obliged to pay to the plaintiff Vicenta one-half of the rents which might have been derived from the upper of the story of the said house on Calle Escolta, and, much less, because one of the living rooms and the storeroom thereof were used for the storage of some belongings and effects of common ownership between the litigants. The defendant Matilde, therefore, in occupying with her husband the upper floor of the said house, did not injure the interests of her coowner, her sister Vicenta, nor did she prevent the latter from living therein, but merely exercised a legitimate right pertaining to her as coowner of the property.

Notwithstanding the above statements relative to the joint-ownership rights which entitled the defendants to live in the upper story of the said house, yet in view of the fact that the record shows it to have been proved that the defendant Matilde's husband, Gaspar de Bartolome, occupied for four years a room or a part of the lower floor of the same house on Calle Escolta, using it as an office for the justice of the peace, a position which he held in the capital of that province, strict justice, requires that he pay his sister-in-law, the plaintiff, one half of the monthly rent which the said quarters could have produced, had they been leased to another person. The amount of such monthly rental is fixed at P16 in accordance with the evidence shown in the record. This conclusion as to Bartolome's liability results from the fact that, even as the husband of the defendant coowner of the property, he had no right to occupy and use gratuitously the said part of the lower floor of the house in question, where he lived with his wife, to the detriment of the plaintiff Vicenta who did not receive one-half of the rent which those quarters could and should have produced, had they been occupied by a stranger, in the same manner that rent was obtained from the rooms on the lower floor that were used as stores. Therefore, the defendant Bartolome must pay to the plaintiff Vicenta P384, that is, one-half of P768, the total amount of

the rents which should have been obtained during four years from the quarters occupied as an office by the justice of the peace of Vigan.

With respect to the second question submitted for decision to this court, relative to the payment of the sum demanded as a counterclaim, it was admitted and proved in the present case that, as a result of a serious earthquake on August 15, 1897, the said house on Calle Escolta was left in ruins and uninhabitable, and that, for its reconstruction or repair, the defendants had to expend the sum of P6,252.32. This expenditure, notwithstanding that it was impugned, during the trial, by the plaintiffs, was duly proved by the evidence presented by the defendants. Evidence, unsuccessfully rebutted, was also introduced which proved that the rents produced by all the rural and urban properties of common ownership amounted, up to August 1, 1905, to the sum of P3,654.15 which, being applied toward the cost of the repair work on the said house, leaves a balance of P2,598.17, the amount actually advanced by the defendants, for the rents collected by them were not sufficient for the termination of all the work undertaken on the said building, necessary for its complete repair and to replace it in a habitable condition. It is therefore lawful and just that the plaintiff Vicenta Ortiz, who was willing to sell to her sister Matilde for P1,500, her share in the house in question, when it was in a ruinous state, should pay the defendants one-half of the amount expanded in the said repair work, since the building after reconstruction was worth P9,000, according to expert appraisal. Consequently, the counterclaim made by the defendants for the payment to them of the sum of P1,299.08, is a proper demand, though from this sum a reduction must be made of P384, the amount of one-half of the rents which should have been collected for the use of the quarters occupied by the justice of the peace, the payment of which is incumbent upon the husband of the defendant Matilde, as aforesaid, and the balance remaining, P915.08, is the amount which the plaintiff Vicenta must pay to the defendants.

The defendants claim to be entitled to the collection of legal interest on the amount of the counterclaim, from December 7, 1904. This contention can not be sustained, inasmuch as, until this suit is finally decided, it could not be known whether the plaintiffs would or would not be obliged to pay the sum whatever in reimbursement of expenses incurred by the plaintiffs in the repair work on the said house on Calle Escolta, whether or not the defendants, in turn, were entitled to collect any such amount, and, finally, what the net sum would be which the plaintiff's might have to pay as reimbursement for one-half of the expenditure made by the defendants. Until final disposal of the case, no such net sum can be determined, nor until then can the debtor be deemed to be in arrears. In order that there be an obligation to pay legal interest in connection with a matter at issue between the parties, it must be declared in a judicial decision from what date the interest will be due on the principal concerned in the suit. This rule has been established by the decisions of the supreme court of Spain, in reference to articles 1108, 1109, and 1110 of the Civil Code, reference on April 24, 1867, November 19, 1869, and February 22, 1901.

With regard to the percentage, as remuneration claimed by the husband of the defendant Matilde for his administration of the property of common ownership, inasmuch as no stipulation whatever was made in the matter by and between him and his sister-in-law, the said defendant, the claimant is not entitled to the payment of any remuneration whatsoever. Of his own accord and as an officious manager, he administered the said pro indiviso property, one-half of which belonged to his wife who held it in joint tenancy, with his sister-in-law, and the law does not allow him any compensation as such voluntary administrator. He is merely entitled to a reimbursement for such actual and necessary expenditures as he may have made on the undivided properties and an indemnity for the damages he may have suffered while acting in that capacity, since at all events it was his duty to care for and preserve the said property, half of which belonged to his wife; and in exchange for the trouble occasioned him by the administration of his sister-in-law's half of the said property, he with his wife resided in the upper story of the house aforementioned, without payment of one-half of the rents said quarters might have produced had they been leased to another person.

With respect to the division of certain jewelry, petitioned for by the defendants and appellants only in their brief in this appeal, the record of the proceedings in the lower court does not show that the allegation made by the plaintiff Vicenta is not true, to the effect that the deceased mother of the litigant sisters disposed of this jewelry during her lifetime, because, had she not done so, the will made by the said deceased would have been exhibited in which the said jewelry would have been mentioned, at least it would have been proved that the articles in question came into the possession of the plaintiff Vicenta without the expressed desire and the consent of the deceased mother of the said sisters, for the gift of this jewelry was previously assailed in the courts, without success; therefore, and in view of its inconsiderable value, there is no reason for holding that the said gift was not made.

As regards the collection of the sum of P910.50, which is the difference between the assessed value of the undivided real properties and the price of the same as determined by the judicial expert appraiser, it is shown by the record that the ruling of the trial judge admitting the amendment to the original complaint, is in accord with the law and principles of justice, for the reason that any of the coowners of a pro indiviso property, subject to division or sale, is entitled to petition for its valuation by competent expert appraisers. Such valuation is not prejudicial to any of the joint owners, but is beneficial to their interests, considering that, as a general rule, the assessed value of a building or a parcel of realty is less than the actual real value of the property, and this being appraiser to determine, in conjunction with the one selected by the plaintiffs, the value of the properties of joint ownership. These two experts took part in the latter proceedings of the suit until finally, and during the course of the latter, the litigating parties agreed to an amicable division of the pro indiviso hereditary property, in accordance with the price fixed by the judicial expert appraiser appointed as a third party, in view of the disagreement between and nonconformity of the appraisers chosen by the litigants. Therefore it is improper now to claim a right to the collection of the said sum, the difference between the assessed value and that fixed by the judicial expert appraiser, for the reason that the increase in price, as determined by this latter appraisal, redounded to the benefit of both parties.

In consideration of the foregoing, whereby the errors assigned to the lower court have been duly refuted, it is our opinion that, with a partial reversal of the judgment appealed from, in so far as it absolves the plaintiffs from the counterclaim presented by the defendants, we should and hereby do sentence the plaintiffs to the payment of the sum of P915.08, the balance of the sum claimed by the defendants as a balance of the one-half of the amount which the defendants advanced for the reconstruction or repair of the Calle Escolta house, after deducting from the total of such sum claimed by the latter the amount of P384 which Gaspar de Bartolome, the husband of the defendant Matilde, should have paid as one-half of the rents due for his occupation of the quarters on the lower floor of the said house as an office for the justice of the peace court of Vigan; and we further find: (1) That the defendants are not obliged to pay one-half of the rents which could have been obtained from the upper story of the said house; (2) that the plaintiffs can not be compelled to pay the legal interest from December 7, 1904, on the sum expanded in the reconstruction of the aforementioned house, but only the interest fixed by law, at the rate of 6 per cent per annum, from the date of the judgment to be rendered in accordance with this decision; (3) that the husband of the defendant Matilde Ortiz is not entitled to any remuneration for the administration of the pro indiviso property belonging to both parties; (4) that, neither is he entitled to collect from the plaintiffs the sum of P910.50, the difference between the assessed valuation and the price set by the expert appraisal solicited by the plaintiffs in their amendment to the complaint; and, (5) that no participation shall be made of jewelry aforementioned now in the possession of the plaintiff Vicenta Ortiz. The said judgment, as relates to the points appealed, is affirmed, in so far as its findings agree with those of this decision, and is reversed, in so far as they do not. No special finding is made regarding the costs of both instances. So ordered.

G.R. No. L-14429 June 30, 1962

RAMON MERCADO, BASILIA MERCADO joined by her husband, FRANCISCO RONQUILLO, plaintiffs-appellants, vs.PIO D. LIWANAG, defendant-appellee.

Patricio D. Senador and Ricardo D. Galano for plaintiffs-appellants.D. B. Melliza and D. M. Gangoso for defendant-appellee.

MAKALINTAL, J.:

The present appeal, taken by the plaintiff from the decision of the Court of First Instance of Rizal (Quezon City), is before us on a certification by the Court of Appeals, the questions involved being purely legal. The case was submitted to the trial court upon the following stipulation of facts:

1. That the complaint filed by the plaintiffs against the defendant seeks to annul a Deed of Sale on the ground of fraud and on the provisions of Article 493 of the Civil Code.

2. That on July 14, 1956, in the City of Manila, Philippines, the plaintiff Ramon Mercado and the defendant Pio D. Liwanag executed a Deed of Sale, photostat copy of which is attached hereto marked as Annex "A" and forming an integral hereof, covering a divided half and described in meter and bounds, or an area of 2,196 square meters at P7.00 per square meter or for a total amount of P15,372.00, of a parcel of land situated at Kangkong, Quezon City, covered Transfer Certificate of Title No. 20805 of the Register of Deeds for the province of Rizal, now Quezon City:

3. That the said T.C.T. No. 20805 containing an area of 4,392 square meters, is issued in the name of the plaintiffs Ramon Mercado and Basilia Mercado as co-owners PRO-INDIVISO, and the sale was without the knowledge and consent of plaintiff Basilia Mercado;

4. That out of the total area of 4,392 square meters, an area consisting of 391 square meters was expropriated by the National Power Corporation sometime in December 1953 at a price of P10.00 per square meter, Civil Case No. Q-829 (Eminent Domain) of the Court of First Instance of Rizal, Quezon City Branch, entitled "National Power Corporation, plaintiff, versus Brigido Almodoban, et als., defendants," but this fact of expropriation came to the knowledge of the defendant Pio D. Liwanag upon the registration of the Deed of Sale Annex "A". .

5. That pursuant to the Deed of Sale Annex "A" T.C.T. No. 32757 was issued in the name of Pio Liwanag and Basilia photostat copy of which is hereto attached and marked as Annex "B".

6. That defendant submits the receipt signed by plaintiff Ramon Mercado dated July 14, 1956 photostat copy of which is attached hereto and marked as Annex "C" and promissory note of the same date for P10,000.00, photostat copy of which is attached hereto and marked is Annex "D" which are both self-explanatory, but plaintiff Ramon Mercado disclaims payment and receipt of such check and promissory note, the check being uncashed and is still in the possession of Atty. Eugenio de Garcia;

7. That plaintiffs and defendant respectfully submit for resolution of this Honorable Court the issue of whether or not the Deed of Sale Annex "A" court be annulled based in the foregoing facts in relation to Article 493 of the Civil Code, setting aside all other issues in the pleadings.

Upon the issue thus presented the trial court held that under Article 493 of the Civil Code the sale in question was valid and so dismissed the complaint, without costs. This ruling is now assailed as erroneous.

Article 493 provides:

Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be alloted to him in the division upon the termination of the co-ownership.

Appellants except to the application of this provision in this case for the reason that in the deed of sale sought to be annulled the vendor disposed of a divided and determinate half of the land under co-ownership. The argument, as far as it goes, seems to be tenable. What a co-owner may dispose of under Article 493 is only his undivided aliquot share, which shall be limited to the portion which may be allotted to him upon the termination of the co-ownership. He has no right to divide the property into parts and then convey one part by metes and bounds. Lopez vs. Ilustre, 5 Phil. 567; Gonzales, et al. vs. Itchon, et al., 47 O.G. 6290; Manresa, Vol. 3, 7th ed. p. 630.

The pertinent recitals in the disputed deed of sale read:

I hereby sell, transfer and convey absolutely and irrevocably unto said Pio D. Liwanag, his heirs, successors, and assigns my rights, title and interest on my chosen portion of the above described property which consist of one-half of aforesaid

ownership bounded on the West by Pacifico Gahudo, on the North by Hacienda de Piedad and on the South by Circumferential Road, consisting of 50 meters more or less frontal length along Circumferential Road, and with a total area of 2,196 square meters as indicated in Co-owners Transfer Certificate of Title No. 20805.

Nevertheless, upon registration of the sale and cancellation of transfer certificate of title No. 20805 in the names of the previous co-owners, the new transfer certificate that was issued (No. 32757) did not reproduce the description in the instrument but carried the names of appellee Pio D. Liwanag and Basilia Mercado as "co-owners pro-indiviso." There is no suggestion by any of the parties that this new certificate of title is invalid, irregular or inaccurate. There is no prayer that it be canceled. As far as Basilia Mercado is concerned she retains in all their integrity her rights as co-owner which she had before the sale, and consequently, she has no cause to complain. Much less has Ramon Mercado, for it was he who was responsible for whatever indicia there may be in the deed of sale that a determinate portion of the property was being sold, as shown by the second paragraph thereof, quoted without contradiction in appellee's brief as follows:

That the aforesaid Transfer Certificate of Title was originally in my name, but was split into two equal parts by virtue of my desire to donate to my sister-in-law Juana Gregorio an equal half thereof with the understanding that I as donor would have the absolute power to choose from the property owned in common that part which I would like to segregate for myself or my heir and assigns.

And of course appellee himself not only does not challenge the new certificate of title, wherein he appears as co-owner of an undivided one-half share, but precisely relies upon it for his defense in this action.

The title is the final and conclusive repository of the rights of the new co-owners. The question of whether or not the deed of sale should be annulled must be considered in conjunction with the title issued pursuant thereto. Since, according to this title, what appellee acquired by virtue of the sale is only an undivided half-share of the property, which under the law the vendor Ramon Mercado had the absolute right to dispose of, the trial court committed no error in dismissing the action. The end-result of the transaction is in accordance with Article 493 of the Civil Code.1äwphï1.ñët

The other point raised by appellants refers to the statement in the dispositive portion of the decision appealed from that "the stipulation with regards to the deed of sale based on the ground of fraud is insufficient for all purposes and besides, no proof showing the allegation of such fraud exists in the accord." It is contended that the trial court erred in making such statement, the same being contrary to the stipulation in which the parties expressly eliminated the issue of fraud. From the entire context of the decision, however, it can be gathered that the case was not decided on the basis of the said issue. In any event, even if the court did err in considering the question of fraud in spite of the stipulation, the error is not a prejudicial one. As far as the dismissal of the actions concerned, it makes no difference whether fraud has not been proven or fraud has been abandoned as an issue by express agreement.

WHEREFORE, the decision appealed from is affirmed, with costs against appellants in this instance.