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Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
DEPARTMENT OF EDUCATION, G.R. No. 161758
DIVISION OF ALBAY
represented by its SCHOOL’S Present:
DIVISION SUPERINTENDENT,
Petitioner, QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES,
- versus - TINGA, and
VELASCO, JR., JJ.
Promulgated:
CELSO OÑATE,
Respondent. June 8, 2007
x-----------------------------------------------------------------------------------------x
D E C I S I O N
VELASCO, JR., J.:
A little neglect may lead to great prejudice.
The Case
This is a Petition for Review on Certiorari under Rule 45 seeking
to reverse and set aside the January 14, 2004 Decision of the Court of
Appeals (CA) in CA-G.R. CV No. 60659, which affirmed the November 3,
1997 Decision of the Legaspi City Regional Trial Court (RTC), Branch I,
declaring as null and void the December 21, 1998 Deed of Donation
executed by the Municipality of Daraga, Albay in favor of petitioner, and
directing the latter to return to respondent Celso Oñate the possession of
the portion of land occupied by the school site of the Daraga North Central
Elementary School.
The Facts
Spouses Claro Oñate and Gregoria Los Baños owned Lot No. 6849
(disputed lot) with an area of around 27,907 square meters registered under
the Torrens System of land registration under Original Certificate of Title
(OCT) No. 2563. Claro Oñate had three children, namely: Antonio, Rafael,
and Francisco, all surnamed Oñate. Respondent Celso Oñate is the
grandson of Claro Oñate, being the son of Francisco Oñate.
In 1940, Bagumbayan Elementary School of Daraga was
constructed on a portion of the disputed lot. The school was eventually
renamed Daraga North Central Elementary School. The Municipality of
Daraga leveled the area while petitioner Department of Education Culture
and Sports (DECS; now Department of Education [DepEd]) developed and
built various school buildings and facilities on the disputed lot.
Sometime in 1991, respondent filed a reconstitution proceeding of
OCT No. 2563 which was granted by the Legaspi City RTC, Branch V after
due notice, publication, and hearing. Consequently, OCT No. RO-18971
was issued in the name of spouses Claro Oñate and Gregoria Los Baños.
On August 26, 1991, a Deed of Extrajudicial Settlement of Estate
and Cession was executed by respondent and his three (3) sisters, namely:
Melba O. Napil, Cielo O. Lardizabal, and Maria Visia O. Maldo, who
waived their successional rights in favor of respondent Celso Oñate.
Asserting that the disputed lot was inherited by his father, Francisco Oñate,
from the latter’s father, Claro Oñate, by virtue of a prior partition among the
three (3) sons of Claro Oñate and Gregoria Los Baños, respondent in turn
claimed ownership of said lot through the deed of extrajudicial settlement.
Meanwhile, the issue of whether respondent’s father, Francisco
Oñate, truly acquired the disputed lot through a prior partition among Claro
Oñate’s three (3) children had been passed upon in another case, Civil Case
No. 8724 for Partition, Reconveyance and Damages filed by the heirs of
Rafael Oñate before the Legaspi City RTC, Branch IX. In said case,
respondent Celso Oñate, the defendant, prevailed and the case was
dismissed by the trial court.
Thereafter, respondent caused Lot No. 6849 to be subdivided into
five (5) lots, all under his name, except Lot No. 6849-B which is under the
name of Mariano M. Lim. On October 26, 1992, the subdivided lots were
issued Transfer Certificate of Titles (TCTs): (1) Lot No. 6849-A (13,072
square meters) under TCT No. T-83946; (2) Lot No. 6849-B (3,100 square
meters) under TCT No. T-84049; (3) Lot No. 6849-C (10,000 square
meters) under TCT No. T-83948; (4) Lot No. 6849-D (1,127 square meters)
under TCT No. T-83949; and (5) Lot No. 6849-E (608 square meters) under
TCT No. T-83950.
On December 15, 1992, through his counsel, respondent sent a
letter to petitioner apprising it about the facts and circumstances affecting
the elementary school and its occupancy of Lot No. 6849-A with an area of
13,072 square meters. Respondent proposed to petitioner DECS that it
purchase Lot No. 6849-A at the Fair Market Value (FMV) of PhP 400 per
square meter and also requested for reasonable rentals from 1960. The
records show that then DECS Director IV Jovencio Revil subsequently
referred the matter to the DECS Division Superintendent Rizalina D.
Saquido for investigation.
On February 24, 1993, through his counsel, respondent likewise
wrote to Engr. Orlando Roces, District Engineer, Albay Engineering
District about the on-going construction projects in the school. Engr. Roces
then informed respondent’s counsel that petitioner DECS is the owner of
the school site having acquired the disputed lot by virtue of a Deed of
Donation executed by the Municipality of Daraga, Albay in favor of
petitioner.
Consequently, on March 18, 1993, respondent instituted a
Complaint for Annulment of Donation and/or Quieting of Title with
Recovery of Possession of Lot No. 6849 located at Barrio Bagumbayan,
Daraga, Albay before the Legaspi City RTC, docketed as Civil Case No.
8715, against petitioner DECS, Division of Albay, represented by the
Division Superintendent of Schools, Mrs. Rizalina D. Saquido; and the
Municipality of Daraga, Albay, represented by the Municipal Mayor,
Honorable Cicero Triunfante.
In its April 28, 1993 Answer, the Municipality of Daraga, Albay,
through Mayor Cicero Triunfante, denied respondent’s ownership of the
disputed lot as it alleged that sometime in 1940, the Municipality bought
said lot from Claro Oñate, respondent’s grandfather, and since then it had
continually occupied said lot openly and publicly in the concept of an
owner until 1988 when the Municipality donated the school site to
petitioner DECS; thus asserting that it could also claim ownership also
through adverse possession. Moreover, it claimed that the disputed lot had
been declared in the name of defendant municipality in the Municipal
Assessor’s Office under Tax Declaration No. 31954 from 1940 until 1988
for purposes of exemption from real estate taxes. Further, defendant
Municipality contended that respondent was guilty of laches and was
estopped from assailing ownership over the disputed lot.
Similarly, petitioner’s April 29, 1993 Answer reiterated in essence
the defenses raised by the Municipality of Daraga, Albay and further
contended that respondent had no cause of action because it acquired
ownership over the disputed lot by virtue of a Deed of Donation executed
on December 21, 1988 in its favor; and that respondent’s claim was vague
as it was derived from a void Deed of Extrajudicial Settlement of Estate and
Cession disposing of the disputed lot which was already sold to the
Municipality of Daraga, Albay in 1940. Petitioner likewise assailed the
issuance of a reconstituted OCT over Lot 6849 when the lower court
granted respondent’s petition for reconstitution without notifying petitioner.
During the ensuing trial where both parties presented documentary
and testimonial evidence, respondent testified that he came to know of the
disputed lot in 1973 when he was 23 years old; that he took possession of
the said lot in the same year; that he came to know that the elementary
school occupied a portion of the said lot only in 1991; and that it was only
in 1992 that he came to know of the Deed of Donation executed by the
Municipality of Daraga, Albay. Also, Felicito Armenta, a tenant cultivating
a portion of disputed Lot 6849, testified that respondent indeed owned said
lot and the share of the crops cultivated were paid to respondent.
However, after respondent testified, defendants in said case filed a
Joint Motion to Dismiss on the ground that respondent’s suit was against
the State which was prohibited without the latter’s consent. Respondent
countered with his Opposition to Joint Motion to Dismiss. Subsequently,
the trial court denied the Joint Motion to Dismiss, ruling that the State had
given implied consent by entering into a contract.
Aside from the reconstituted OCT No. RO-18971, respondent
presented the TCTs covering the five (5) portions of the partitioned Lot
6849, Tax Declaration No. 04-006-00681 issued for said lot, and the April
20, 1992 Certification from the Office of the Treasurer of the Municipality
of Daraga, Albay attesting to respondent’s payment of realty taxes for Lot
6849 from 1980 to 1990.
After respondent rested his case, the defense presented and marked
their documentary exhibits of Tax Declaration No. 30235 issued in the
name of the late Claro Oñate, which was cancelled in 1938; Tax Declaration
31954, which cancelled Tax Declaration No. 30235, in the name of
Municipality of Daraga with the annotation of Ex-Officio Deputy Assessor
Natalio Grageda attesting to the purchase by the Municipality under
Municipal Voucher No. 69, August 1940 accounts and the issuance of TCT
No. 4812 in favor of the Municipality; Tax Declaration No. 8926 in the
name of the Municipality which cancelled Tax Declaration No. 31954; and
the subsequent Tax Declaration Nos. 22184, 332, and 04-006-00068.
The defense presented the testimony of Mr. Jose Adra, the
Principal of Daraga North Central Elementary School, who testified on the
Municipality’s donation of disputed Lot 6849 to petitioner and the
improvements on said lot amounting to more than PhP 11 million; and Mrs.
Toribia Milleza, a retired government employee and resident of
Bagumbayan, Daraga, Albay since 1955, who testified on the
Municipality’s continuous and adverse possession of the disputed lot since
1940.
As mentioned earlier, Civil Case No. 8724 for Partition,
Reconveyance and Damages was instituted by the heirs of Rafael Oñate in
Legaspi City RTC, Branch IX against Spouses Celso Oñate and Allem
Vellez, involving the same disputed lot. Petitioner and co-defendant
Municipality of Daraga, Albay were about to file a complaint for
intervention in said case, but it was overtaken by the resolution of the case
on August 14, 1995 with the trial court dismissing the complaint.
The Ruling of the RTC
On November 3, 1997, the trial court rendered a Decision in favor
of respondent Celso Oñate. The dispositive portion declared, thus:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants:
1. Declaring the Deed of Donation executed
by the Municipality of Daraga, Albay in favor of the defendant Department of Education Culture and Sports through the Albay Schools Division as null and void;
2. Declaring the plaintiff as the owner in fee
simple of Lots Nos. 6849-A, 6849-C, 6849-D and 6849-E which are registered in his name;
3. Commanding the defendants to return the
possession of the portion of the land occupied by the school site to the herein plaintiff Celso Oñate;
4. Ordering the plaintiff for reason of equity,
to pay the defendant Municipality of Daraga, Albay the amount of Fifty Thousand (50,000.00) Pesos pursuant to Article 479 of the New Civil Code of the Philippines;
5. The defendant Department of Education Culture and Sports being a builder in good faith, the provisions of Article 448 of the New Civil Code of the Philippines shall be observed by the parties; and
6. Ordering the defendants to pay the costs of the suit. No attorney’s fees is hereby adjudged in favor of plaintiff’s counsel.
SO ORDERED.
The trial court ratiocinated that it was clear that subject Lot 6849
was originally registered under the Torrens System in the name of Spouses
Claro Oñate and Gregoria Los Baños as evidenced by OCT No. RO-18971.
The right of respondent Celso Oñate over the disputed lot had not been
proven otherwise or overturned in Civil Case No. 8724, and this was
bolstered by the Deed of Extrajudicial Settlement of Estate and Cession,
where respondent’s sister waived their successional rights in his favor.
Thus, the trial court ruled in favor of respondent’s title. Besides, it further
ruled that defendants could not assail the registered title of respondent in a
collateral proceeding.
While the Municipality of Daraga, Albay anchored its prior
ownership over the disputed lot by virtue of a sale in 1940 and mentioned
TCT No. 4812 supposedly issued in its name, it however failed to submit
any deed of conveyance in its favor, as well as a copy of the alleged TCT
No. 4812. Hence, the trial court held that its claim over disputed Lot 6849
was based solely on adverse prescription which could not prevail over
respondent’s registered title.
The trial court concluded that given these factual and evidentiary
proofs, petitioner had no right to occupy Lot 6849-A, and the Deed of
Donation executed by the Municipality of Daraga, Albay in favor of
petitioner must be nullified. Finally, the trial court awarded PhP 50,000 to
the Municipality of Daraga, Albay for the cost of landfill and ordered that
Article 448 of the New Civil Code be followed by the parties as petitioner
was a builder in good faith.
The Ruling of the Court of Appeals
Aggrieved, petitioner DECS and Municipality of Daraga, Albay
filed their respective Notices of Appeal assailing the trial court’s Decision
before the CA. However, on June 17, 1998, the appellate court declared the
appeals of both petitioners abandoned and dismissed for their failure to pay
the required docket fees within the reglementary period. Petitioner then
filed a Motion for Reconsideration of the said June 17, 1998 Resolution and
its appeal was subsequently reinstated. The Municipality of Daraga, Albay,
however, totally lost its appeal due to inaction, and the appellate court
correspondingly issued a Partial Entry of Judgment on July 9, 1998.
Moreover, the appellate court held that there was no jurisdictional
defect in the reconstitution proceeding being one in rem, and in the issuance
of OCT No. RO-18971 based on the destroyed or lost OCT No. 2563, even
if no notice was sent to petitioner. Thus, the CA ruled that respondent’s
claim of ownership over Lot 6849-A occupied by the school is conclusive
for being soundly predicated on TCT No. T-83946 which cancelled the
reconstituted OCT No. RO-18971. Furthermore, it reiterated the trial
court’s holding that petitioner is precluded from attacking collaterally
respondent’s title over the disputed lot in this proceeding.
The CA emphasized that petitioner’s failure to present TCT No.
4812––allegedly issued in the name of the Municipality of Daraga, Albay in
1940 in lieu of OCT No. 2563 and the Deed of Conveyance executed by the
original owner, Claro Oñate, in favor of the Municipality––was fatal to the
defense. It reasoned that “all the more had their claim of ownership become
doubtful when defendants-appellants [sic] failed to explain from their
pleadings and the evidence submitted before Us their failure to present the
two documents.” The appellate court concluded that given these facts, no
title in the name of the Municipality ever existed and thus it could not have
validly donated the subject property to petitioner.
Anent the issue of the applicability of Amigable v. Cuenca, the CA
affirmed the doctrine enunciated in said case that “to uphold the State’s
immunity from suit would subvert the ends of justice.” In fine, the appellate
court pointed out the inconvenience and impossibility of restoring
possession of Lot 6849-A to respondent considering the substantial
improvements built on said lot by the government which amounted to
almost PhP 12 million; and that the only relief available was for the
government to pay just compensation in favor of respondent computed on
the basis of the value of the property at the time of the government’s taking
of the land.
Through its assailed Decision, the CA dismissed petitioner’s
appeal for lack of merit and affirmed the trial court’s decision in toto. It
reasoned that laches does not apply, its application rests on the sound
discretion of the court, and where the court believes that its application
would result in manifest wrong or injustice, it is constrained not to be
guided strictly by said doctrine. Besides, it opined that laches could not
defeat the rights of a registered owner.
The Issues
Hence, we have the instant petition where petitioner raises the
following assignment of errors:
I
THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURT’S FINDING THAT RESPONDENT’S CAUSE OF ACTION TO RECOVER POSSESSION OF THE SUBJECT PROPERTY IS NOT YET BARRED BY LACHES.
II
THE COURT OF APPEALS ERRED IN ACCORDING GREAT WEIGHT ON RESPONDENT’S RECONSTITUTED ORIGINAL CERTIFICATE OF TITLE (OCT) NO. 2563 COVERING SUBJECT PROPERTY.
III THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER MAY BE SUED IN VIOLATION OF THE STATE’S IMMUNITY FROM SUIT.
IV
THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER MAY BE SUED INDEPENDENTLY OF THE REPUBLIC OF THE PHILIPPINES.
Petitioner basically raises two issues—the application of laches
and the non-suability of the State.
The threshold issue is whether petitioner DECS can be sued in
Civil Case No. 8715 without its consent. A supplementary issue is whether
petitioner DECS can be sued independently of the Republic of the
Philippines.
We rule that petitioner DECS can be sued without its permission as
a result of its being privy to the Deed of Donation executed by the
Municipality of Daraga, Albay over the disputed property. When it
voluntarily gave its consent to the donation, any dispute that may arise from
it would necessarily bring petitioner DECS down to the level of an ordinary
citizen of the State vulnerable to a suit by an interested or affected party. It
has shed off its mantle of immunity and relinquished and forfeited its armor
of non-suability of the State.
The auxiliary issue of non-joinder of the Republic of the
Philippines is likewise resolved in the negative. While it is true that
petitioner is an unincorporated government agency, and as such technically
requires the Republic of the Philippines to be impleaded in any suit against
the former, nonetheless, considering our resolution of the main issue below,
this issue is deemed mooted. Besides, at this point, we deem it best to lift
such procedural technicality in order to finally resolve the long litigation
this case has undergone. Moreover, even if we give due course to said
issue, we will arrive at the same ruling.
The Republic of the Philippines need not be impleaded as a party-
defendant in Civil Case No. 8715 considering that it impliedly gave
its approval to the involvement of petitioner DECS in the Deed of
Donation. In a situation involving a contract between a government
department and a third party, the Republic of the Philippines need not be
impleaded as a party to a suit resulting from said contract as it is assumed
that the authority granted to such department to enter into such contract
carries with it the full responsibility and authority to sue and be sued in its
name.
Main Issue: Equitable Remedy of Laches
Petitioner strongly asserts that the Municipality of Daraga, Albay
had continuous, open, and adverse possession in the concept of an owner
over the disputed lot since 1940 until December 21, 1988 or for about 48
years. Significantly, it maintains that Tax Declaration No. 31954 covering
the disputed lot in the name of the Municipality of Daraga, Albay contains
an annotation certifying that said lot was “under voucher No. 69, August,
1940 accounts. The corresponding Transfer Title No. 4812 has been issued
by the Register of Deeds Office of Albay on August 3, 1940.”
When petitioner received the lot as donation from the Municipality
on December 21, 1988, it possessed the subject lot also in the concept of an
owner and continued to introduce improvements on the lot. Consequently,
when respondent instituted the instant case in 1993, petitioner and its
predecessor-in-interest Municipality of Daraga, Albay had possessed the
subject lot for a combined period of about fifty two (52) years.
Petitioner strongly avers that Claro Oñate, the original owner of
subject lot, sold it to the Municipality. At the very least it asserts that said
Claro Oñate allowed the Municipality to enter, possess, and enjoy the lot
without protest. In fact, Claro Oñate neither protested nor questioned the
cancellation of his Tax Declaration No. 30235 covering the disputed lot and
its substitution by Tax Declaration No. 31954 in the name of the
Municipality on account of his sale of the lot to the latter. In the same vein,
when Claro Oñate and his spouse died, their children Antonio, Rafael, and
Francisco who succeeded them also did not take any steps to question the
ownership and possession by the Municipality of the disputed lot until they
died on June 8, 1990, June 12, 1991, and October 22, 1957, respectively.
Petitioner maintains that significantly, respondent and his siblings
— succeeding their father Francisco as the alleged owners, from his death
on October 22, 1957—also did not take any action to recover the questioned
lot from 1957 until 1993 when the instant suit was commenced. Petitioner
avers that if they were really the owners of said lot, they would not have
waited 52 long years to institute the suit assuming they have a cause of
action against the Municipality or petitioner. Thus, petitioner submits that
the equitable principle of laches has indubitably set in to bar respondent’s
action to recover possession of, and title to, the disputed lot.
Laches and its elements
Indeed, it is settled that rights and actions can be lost by delay and
by the effect of delay as the equitable defense of laches does not concern
itself with the character of the defendant’s title, but only with plaintiff’s
long inaction or inexcusable neglect to bar the latter’s action as it would be
inequitable and unjust to the defendant.
Laches is defined as the failure or neglect, for an unreasonable and
unexplained length of time, to do that which—by the exercise of due
diligence—could or should have been done earlier. Verily, laches serves to
deprive a party guilty of it to any judicial remedies. Its elements are: (1)
conduct on the part of the defendant, or of one under whom the defendant
claims, giving rise to the situation which the complaint seeks a remedy; (2)
delay in asserting the complainant's rights, the complainant having had
knowledge or notice of the defendant's conduct as having been afforded an
opportunity to institute a suit; (3) lack of knowledge or notice on the part of
the defendant that the complainant would assert the right in which the
defendant bases the suit; and (4) injury or prejudice to the defendant in the
event relief is accorded to the complainant, or the suit is not held barred.
In Felix Gochan and Sons Realty Corporation, we held that
“[t]hough laches applies even to imprescriptible actions, its elements
must be proved positively. Laches is evidentiary in nature which could
not be established by mere allegations in the pleadings and can not be
resolved in a motion to dismiss (emphases supplied).” In the same vein, we
explained in Santiago v. Court of Appeals that there is “no absolute rule as
to what constitutes laches or staleness of demand; each case is to be
determined according to its particular circumstances.”
Issue of laches not barred by adverse judgment
against Daraga, Albay
It is unfortunate that defendant Municipality of Daraga, Albay lost its
appeal in CA-G.R. CV No. 60659 before the CA for its failure to pay the
required docket fees within the reglementary period. As a result, a Partial
Entry of Judgment was made on July 9, 1998 and consequently, the
dispositions in the November 3, 1997 Decision, rendered by the Legaspi
City RTC, Branch I in favor of respondent Celso Oñate, became final and
executory as against defendant Municipality of Daraga, Albay.
As an off-shoot, with respect to the Municipality of Daraga, the
Deed of Donation in favor of petitioner DECS was annulled––respondent
Oñate was declared owner in fee simple of the disputed lots and entitled to
possession but was required to pay PhP 50,000 to the Daraga Municipal
Government and the costs of suit. By reason of the finality of the Decision
against the Municipality of Daraga, Tax Declaration Nos. 04-006-00068,
332, 22184, 31954, and 8926 are all cancelled and annulled (if not yet
cancelled).
What are the effects of the final judgment against Municipality of
Daraga on its co-defendant, petitioner DECS?
Generally, it has no impact on the appeal of DECS unless the decision
affects its defenses. In this petition, DECS no longer questions the
declaration of nullity of the Deed of Donation over the disputed lot and
hence can be considered as a final resolution of the issue. Likewise, it does
not challenge the ownership of Oñate of the disputed lots, but merely relied
on the defense of laches. The final directive for Municipality of Daraga to
return possession of the land has no significance on DECS’ appeal since
precisely, it is DECS’ position that it should retain possession of the land.
From these considerations, the final RTC November 3, 1997 Decision
against the Municipality of Daraga has no substantial and material effect
upon the DECS’ appeal.
The only remaining issue left is whether laches can inure to the
benefit of petitioner DECS considering the fact that Lot No. 6849-A was
devoted to public education when the elementary school was built in 1940
under the supervision and control of DECS up to 1993 when Civil Case No.
8715 was filed by respondent Oñate.
We rule in the affirmative.
Laches has set in
A brief scrutiny of the records does show tell-tale signs of laches.
The first element is undisputed: the then Bagumbayan Elementary School
of Daraga was constructed in 1940 on a portion of disputed Lot 6849,
specifically Lot No. 6849-A containing 13,072 square meters under TCT
No. T-83946. Moreover, Mrs. Toribia Milleza, a retired government
employee and resident of Bagumbayan, Daraga since 1955 pertinently
testified, thus:
Q: How long have you been residing in this place, Bagumbayan, Daraga, Albay?A: Maybe I stayed there in 1955 until the present. x x x x Q: Now, can you further recall the kind of building that was constructed in this property?A: Seva type, building. Q: At present how many buildings were constructed in this property?A: Plenty of school buildings.
Q: Now, how many buildings were first constructed in [sic] this property?A: In 1955 only one, the Seva type, then there was constructed five (5) Marcos Type buildings during the Marcos time.
The devotion of Lot No. 6849-A to education started in 1940 and
continued up to December 21, 1988 when said lot was donated to the
DECS. From then on, DECS built various buildings and introduced
improvements on said lot. Lot No. 6849-A was continuously used for
public education until March 18, 1993 when respondent Oñate filed Civil
Case No. 8715 and thereafter up to the present.
Thus, for a total period of more than fifty-two (52) years, Lot No.
6849-A was exclusively and completely utilized by DECS for public
education. This fact was not successfully challenged nor refuted by
respondent.
The second element of laches was likewise proven. No evidence
was presented to show that respondent or his predecessors-in-interest ever
took any action, administrative or judicial, nor either party questioned or
protested the Municipality’s adverse occupation of a portion of Lot 6849.
As petitioner had demonstrated laches by persuasive and credible evidence,
it is incumbent upon respondent to show that his predecessors-in-interest
indeed protected their rights of ownership over the lot. Thus, as early as
1940, when the first Seva type school building was constructed over a
portion of the disputed lot, now Lot 6849-A, respondent must prove that his
predecessors-in-interest indeed undertook activities to contest the
occupation of the portion of the lot by the Municipality and subsequently by
petitioner DECS. Unfortunately, respondent failed to substantiate such
defense of ownership and possession of the lot and even skirted this issue.
Respondent testified that he came to know of Lot 6849 only in
1973 when he was 23 years old. He asserted that he took possession of said
lot in the same year when his two (2) uncles, the brothers of his late father,
passed on to him the disputed lot as his father’s share of the inheritance
from the late Claro Oñate and Gregoria Los Baños (his grandparents).
However, it is interesting to note that he testified that he only came to know
in 1991 that the elementary school was built on a portion of Lot 6849, now
Lot 6849-A. These assertions are irreconcilable. Common experience tells
us that one who owns a property and takes possession of it cannot fail to
discover and know that an existing elementary school was built and
standing on the lot from the time that the owner starts possessing a property.
Nonetheless, even granting that respondent indeed only came to
know of such encroachment or occupation in 1991, his rights cannot be
better than that of his predecessors-in-interest, that is, Claro Oñate and his
uncles, Antonio and Rafael, who died in 1990 and 1991, respectively.
Since respondent’s right over the lot originated from his predecessors-in-
interest, then he cannot have better rights over Lot No. 6849-A than the
latter. The spring cannot rise higher than its source. Besides, respondent
has not proffered any explanation why his predecessors-in-interest did not
protest and challenge the Municipality’s occupancy over a portion of their
lot. Verily, with the span of around 52 years afforded respondent and his
predecessors-in-interest, their inaction and delay in protecting their rights
were certainly excessive and unjustified.
In the third element, the records clearly bear out the fact that
petitioner DECS did not know nor anticipate that their possession and
occupancy of a portion of Lot 6849 would later be questioned. In fact,
petitioner built additional school buildings and facilities on the school site
amounting to more than PhP 11 million. Mr. Jose Adra, School Principal of
the Daraga North Central Elementary School, testified on the donation of
the disputed lot to petitioner and the cost of the improvements on it. After
more than forty-eight (48) years of unquestioned, peaceful, and
uninterrupted possession by petitioner DECS, it had no knowledge nor
reason to believe that respondent would assert any right over the lot after
the lapse of such long occupation coupled with a tax declaration in the name
of the Daraga Municipality.
Finally, the last element is likewise proven by the antecedent facts
that clearly show grave prejudice to the government, in general, and to
petitioner, in particular, if the instant action is not barred without even
considering the cost of the construction of the school buildings and facilities
and the deleterious effect on the school children and affected school
teachers and personnel if Lot No. 6849-A would be returned to respondent.
Verily, the application of laches is addressed to the sound
discretion of the court as its application is controlled by equitable
considerations. In the instant case, with the foregoing considerations, we
are constrained from giving approbation to the trial and appellate courts’
ruling that the application of the principle of laches would subvert the ends
of justice. Indeed, it is unjust for the State and the affected citizenry to
suffer after respondent and his predecessors-in-interest had slept on their
rights for 52 years.
Also, the inaction of respondent Oñate and his predecessors-in-
interest for over 50 years has reduced their right to regain possession of Lot
6849-A to a stale demand.
Laches holds over the actual area possessed and occupied by petitioner
We, however, make the clear distinction that laches applies in
favor of petitioner only as regards Lot 6849-A which is actually possessed
and occupied by it. Laches does not apply to Lot Nos. 6849-B, 6849-C,
6849-D, and 6849-E. These portions were never occupied by the
Municipality and petitioner. Agricultural tenant Felicito Armenta testified
that his father, Antonio Armenta, started cultivating portions of Lot 6849
way back in the 1940s and that he took over the tenancy in 1960 when his
father stopped tilling the land. Besides, if the Municipality indeed owned
Lot 6849 by virtue of a purchase, it is likewise guilty of laches in not
protecting or contesting the cultivation by Oñates’ agricultural tenants of
said portions of Lot 6849.
Transfer Certificates of Title on portions of Lot 6849 valid
Petitioner contends that the reconstitution of OCT No. 2563—
covering subject lot in 1991 or 52 years after the Municipality owned said
lot—does not in any way affect the latter’s preferential and superior right
over the disputed lot. In the same vein, it maintains that it is
inconsequential that petitioner and the Municipality failed to present as
evidence the deed of conveyance in favor of the Municipality, as well as
TCT No. 4812 as a registered land owner may lose the right to recover
possession of a registered property by reason of laches. Petitioner
concludes that the long delayed reconstitution of OCT No. 2563 by
respondent was a mere afterthought and intended to camouflage his and his
predecessor’s unreasonably long inaction which indicates an awareness that
they have no valid claim whatsoever over disputed Lot 6849.
We disagree.
It must be noted that a reconstitution proceeding is one in rem and
is thus binding to the whole world. While it is true that laches has set in so
far as it pertains to the portion of Lot 6849, specifically Lot 6849-A where
the Municipality and petitioner DECS had constructed the existing school,
such does not hold true for the totality of Lot 6849 as explained above.
Indeed, the reconstitution proceeding being one in rem, the consequent
issuance of OCT No. RO-18971 in lieu of the lost or destroyed OCT No.
2563 is valid.
Anent the issue of non-notification, we agree with the observation
of the courts a quo that even granting arguendo that petitioner was not
notified about the reconstitution proceeding, such deficiency is not
jurisdictional as to nullify and prevail over the final disposition of the trial
court in a proceeding in rem.
More so, while petitioner strongly asserts that the certification in
Tax Declaration No. 31954 attesting to the payment of the disputed lot
under Municipal Voucher No. 69 and the issuance of TCT No. 4812, which
was never disputed nor controverted by respondent, should have been given
evidentiary weight by the trial and appellate courts as the presumptions of
regularity and validity of such official act have not been overcome, such
documents cannot defeat the registered title of respondent.
Between a clear showing of ownership evidenced by a registered
title and a certification in a tax declaration, albeit done in an official
capacity, the former holds as the latter is only persuasive evidence. Indeed,
tax declarations in land cases per se do not constitute ownership without
other substantial pieces of evidence.
The records do not show and petitioner has not given any cogent
explanation why the Deed of Conveyance in favor of the Municipality of
Daraga, Albay and TCT No. 4812 were not presented. With clear and
affirmative defenses set up by petitioner and Municipality of Daraga,
Albay, it is incumbent for them to present these documents. Therefore, the
unmistakable inference is that there was indeed no sale and conveyance by
Claro Oñate of Lot 6849 in favor of the Municipality. Consequently, the
TCTs cancelling OCT No. RO-18971 covering Lot Nos. 6849-A, 6849-B,
6849-C, 6849-D, and 6849-E were likewise validly issued.
Thus, notwithstanding valid titles over the portions of Lot 6849,
respondent Oñate cannot now take possession over Lot No. 6849-A for
reason of laches. In the recent case of De Vera-Cruz v. Miguel, we
reiterated the principle we have consistently applied in laches:
The law provides that no title to registered land in derogation of that of the registered owner can be acquired by prescription or adverse possession. Nonetheless, while it is true that a Torrens Title is indefeasible and imprescriptible, the registered landowner may lose his right to recover the possession of his registered property by reason of laches.
Thus, with our resolution of the principal issue of applicability of
the equitable remedy of laches, the issue of suability of the State has been
mooted.
A final word. Considering our foregoing disquisition and upon
grounds of equity, a modification of the final decision prevailing between
respondent Oñate and the Municipality of Daraga, Albay is in order. It
would be grossly iniquitous for respondent Oñate to pay PhP 50,000 to the
Municipality of Daraga, Albay considering that he is not entitled to recover
the possession and usufruct of Lot No. 6849-A.
WHEREFORE, the instant petition is GRANTED and the
January 14, 2004 Decision of the CA in CA-G.R. CV No. 60659 affirming
the November 3, 1997 Decision of the Legaspi City RTC is AFFIRMED
with the following MODIFICATIONS:
1) Declaring the DepEd (formerly DECS), Division of Albay to
have the rights of possession and usufruct over Lot 6849-A with an area of
13,072 square meters under TCT No. T-83946 of the Registry of Deeds of
Albay, as a result of laches on the part of respondent Celso Oñate and his
predecessors-in-interest. Respondent Celso Oñate, his heirs, assigns, and
successors-in-interest are prohibited from selling, mortgaging, or
encumbering Lot 6849-A while the said lot is still being used and occupied
by petitioner DECS. However, the rights of possession and usufruct will be
restored to respondent the moment petitioner DECS no longer needs the
said lot. The Registry of Deeds of Albay is ordered to annotate the
aforementioned restrictions and conditions at the back of TCT No. T-
83946-A in the name of respondent Celso Oñate. Item No. 2 of the
November 3, 1997 Decision of the Legaspi City RTC is modified
accordingly;
2) Declaring Celso Oñate as the true and legal owner in fee
simple of the following lots:
a. Lot 6849-C with an area of 10,000 square
meters under TCT No. T-83948 of the Registry of Deeds
of Albay;
b. Lot 6849-D with an area of 1,127 square
meters under TCT No. T-83949 of the Registry of Deeds
of Albay; and
c. Lot 6849-E with an area of 608 square
meters under TCT No. T-83950 of the Registry of Deeds
of Albay.
3) Declaring Mariano M. Lim as true and legal owner of Lot
6849-B with an area of 3,100 square meters under TCT No. T-84049 of the
Registry of Deeds of Albay;
4) Ordering petitioner DECS and all other persons claiming
under said department to return the possession of Lots 6849-C, 6849-D, and
6849-E to respondent Celso Oñate and Lot 6849-B to Mariano M. Lim; and
5) Deleting Item No. 4 of the November 3, 1997 Decision of
the Legaspi City RTC, which ordered respondent Celso Oñate to pay Fifty
Thousand Pesos (PhP 50,000) to defendant Municipality of Daraga, Albay.
The November 3, 1997 Decision of the Legaspi City RTC is
AFFIRMED in all other respects.
No costs.
THIRD DIVISION
[G.R. No. 177667, September 17, 2008]
CLEODIA U. FRANCISCO AND CEAMANTHA U. FRANCISCO, REPRESENTED BY THEIR GRANDMOTHER DRA. MAIDA G.
URIARTE AS THEIR ATTORNEY-IN-FACT, PETITIONERS, VS. SPOUSES JORGE C. GONZALES AND PURIFICACION W.
GONZALES, RESPONDENTS.
D E C I S I O N
AUSTRIA-MARTINEZ, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court is the Court of Appeals (CA) Decision dated April 30, 2007, which affirmed the Regional Trial Court (RTC) Orders dated June 4, 2003 and July 31, 2003, denying petitioners' motion to stop execution sale.
Petitioners Cleodia U. Francisco and Ceamantha U. Francisco are the minor children of Cleodualdo M. Francisco (Cleodualdo) and Michele Uriarte Francisco (Michele). In a Partial Decision dated November 29, 2000
rendered by the RTC of Makati, Branch 144, in Civil Case No. 93-2289 for Declaration of Nullity of Marriage, the Compromise Agreement entered into by the estranged couple was approved. The Compromise Agreement contained in part the following provisions:
7. In their desire to manifest their genuine concern for their children, Cleodia and Ceamantha, Cleodualdo and Michelle have voluntarily agreed to herein set forth their obligations, rights and responsibilities on matters relating to their children's support, custody, visitation, as well as to the dissolution of their conjugal partnership of gains as follows:
(a) Title and ownership of the conjugal property consisting of a house and lot located in Ayala Alabang, Muntinlupa, Metro Manila shall be transferred by way of a deed of donation to Cleodia and Ceamantha, as co-owners, when they reach nineteen (19) and eighteen (18) years old, respectively, subject to the following conditions:
x x x[1]
The property subject of the Compromise Agreement is a house and lot covered by Transfer Certificate of Title No. 167907 in the name of Cleodualdo M. Francisco, married to Michele U. Francisco, with an area of 414 square meters, and located in 410 Taal St., Ayala Alabang Village, Muntinlupa City.[2]
Meanwhile, in a case for Unlawful Detainer with Preliminary Attachment filed by spouses Jorge C. Gonzales and Purificacion W. Gonzales (respondents) against George Zoltan Matrai (Matrai) and Michele, the Metropolitan Trial Court (MeTC) of Muntinlupa City, Branch 80, rendered a Decision dated May 10, 2001, ordering Matrai and Michele to vacate the premises leased to them located in 264 Lanka Drive, Ayala Alabang Village, Muntinlupa City, and to pay back rentals, unpaid telephone bills and attorney's fees.[3]
Pending appeal with the RTC of Muntinlupa, Branch 256, an order was issued granting respondents' prayer for the execution of the MeTC Decision.[4] A notice of sale by execution was then issued by the sheriff covering the real property under Transfer Certificate of Title No. T-167907 in the name of Cleodualdo M. Francisco, married to Michele U. Francisco.[5]
When petitioners' grandmother learned of the scheduled auction, she, as guardian-in-fact of petitioners, filed with the RTC an Affidavit of Third Party Claim[6] and a Very Urgent Motion to Stop Sale by Execution[7] but this was denied in the Order dated June 4, 2003.[8] Petitioners' motion for reconsideration was denied per RTC Order dated July 31, 2003.[9]
Petitioners then filed a petition for certiorari with the CA.
Pending resolution by the CA, the RTC issued an Order dated July 8, 2005, granting respondents' petition for the issuance of a new certificate of title.[10]
The RTC also issued an Order on February 13, 2006, granting respondents' motion for the issuance of a writ of possession.[11]
On April 30, 2007, the CA dismissed the petition, the dispositive portion of which reads:WHEREFORE, premises considered, the Petition is hereby DISMISSED. The Order(s), dated June 4, 2003 and July 31, 2003, of the Regional Trial Court of Muntinlupa City, Br. 256, in Civil Case No. 01-201, STAND. Costs against the Petitioners.
SO ORDERED.[12]
Hence, herein petition. As prayed for, the Court issued a temporary restraining order on July 11, 2007, enjoining respondents, the RTC, the Register of Deeds, and the Sheriff from implementing or enforcing the RTC Order dated July 8, 2005, canceling TCT No. 167907 and Order dated February 13, 2006, issuing a writ of possession, until further orders from the Court.[13]
Petitioners argue that: (1) they are the rightful owners of the property as the Partial Decision issued by the RTC of Makati in Civil Case No. 93-2289 had already become final; (2) their parents already waived in their favor their rights over the property; (3) the adjudged obligation of Michele in the ejectment case did not redound to the benefit of the family; (4) Michele's obligation is a joint obligation between her and Matrai, not joint and solidary.[14]
The Court finds that it was grave error for the RTC to proceed with the execution, levy and sale of the subject property. The power of the court in executing judgments extends only to properties unquestionably belonging to the judgment debtor alone, [15] in the present case to those belonging to
Michele and Matrai. One man's goods shall not be sold for another man's debts.[16]
To begin with, the RTC should not have ignored that TCT No. 167907 is in the name of "Cleodualdo M. Francisco, married to Michele U. Francisco." On its face, the title shows that the registered owner of the property is not Matrai and Michele but Cleodualdo, married to Michele. This describes the civil status of Cleodualdo at the time the property was acquired.[17]
Records show that Cleodualdo and Michele were married on June 12, 1986, prior to the effectivity of the Family Code on August 3, 1988. As such, their property relations are governed by the Civil Code on conjugal partnership of gains.
The CA acknowledged that ownership of the subject property is conjugal in nature;[18] however, it ruled that since Michele's obligation was not proven to be a personal debt, it must be inferred that it is conjugal and redounded to the benefit of the family, and hence, the property may be held answerable for it.[19]
The Court does not agree.
A wife may bind the conjugal partnership only when she purchases things necessary for the support of the family, or when she borrows money for that purpose upon her husband's failure to deliver the needed sum; when administration of the conjugal partnership is transferred to the wife by the courts or by the husband; or when the wife gives moderate donations for charity. Failure to establish any of these circumstances means that the conjugal asset may not be bound to answer for the wife's personal obligation.[20] Considering that the foregoing circumstances are evidently not present in this case as the liability incurred by Michele arose from a judgment rendered in an unlawful detainer case against her and her partner Matrai.
Furthermore, even prior to the issuance of the Notice of Levy on Execution on November 28, 2001,[21] there was already annotated on the title the following inscription:Entry No. 23341-42/T-167907 - Nullification of Marriage
By order of the Court RTC, NCR, Branch 144, Makati City dated July 4,
2001, which become final and executory on October 18, 2001 declaring the Marriage Contract between Michelle Uriarte and Cleodualdo M. Francisco, Jr. is null & void ab initio and title of ownership of the conjugal property consisting of the above-described property shall be transferred by way of a Deed of Donation to Cleodia Michaela U. Francisco and Ceamantha Maica U. Francisco, as co-owners when they reach nineteen (19) and eighteen (18) yrs. old to the condition that Cleodualdo, shall retain usufructuary rights over the property until he reaches the age of 65 yrs. Old.
Date of instrument - Oct 18, 2001Date of inscription - Oct 22, 2001.[22]
This annotation should have put the RTC and the sheriff on guard, and they should not have proceeded with the execution of the judgment debt of Michele and Matrai.
While the trial court has the competence to identify and to secure properties and interest therein held by the judgment debtor for the satisfaction of a money judgment rendered against him, such exercise of its authority is premised on one important fact: that the properties levied upon, or sought to be levied upon, are properties unquestionably owned by the judgment debtor and are not exempt by law from execution.[23] Also, a sheriff is not authorized to attach or levy on property not belonging to the judgment debtor, and even incurs liability if he wrongfully levies upon the property of a third person. A sheriff has no authority to attach the property of any person under execution except that of the judgment debtor.[24]
It should be noted that the judgment debt for which the subject property was being made to answer was incurred by Michele and her partner,[25] Matrai. Respondents allege that the lease of the property in Lanka Drive redounded to the benefit of the family.[26] By no stretch of one's imagination can it be concluded that said debt/obligation was incurred for the benefit of the conjugal partnership or that some advantage accrued to the welfare of the family. In BA Finance Corporation v. Court of Appeals,[27] the Court ruled that the petitioner cannot enforce the obligation contracted by Augusto Yulo against his conjugal properties with respondent Lily Yulo because it was not established that the obligation contracted by the husband redounded to the benefit of the conjugal partnership under Article 161 of the Civil Code. The Court stated:In the present case, the obligation which the petitioner is seeking to enforce against the conjugal property managed by the private respondent Lily Yulo
was undoubtedly contracted by Augusto Yulo for his own benefit because at the time he incurred the obligation he had already abandoned his family and had left their conjugal home. Worse, he made it appear that he was duly authorized by his wife in behalf of A & L Industries, to procure such loan from the petitioner. Clearly, to make A & L Industries liable now for the said loan would be unjust and contrary to the express provision of the Civil Code. (Emphasis supplied)Similarly in this case, Michele, who was then already living separately from Cleodualdo,[28] rented the house in Lanka Drive for her and Matrai's own benefit. In fact, when they entered into the lease agreement, Michele and Matrai purported themselves to be husband and wife.[29] Respondents' bare allegation that petitioners lived with Michele on the leased property is not sufficient to support the conclusion that the judgment debt against Michele and Matrai in the ejectment suit redounded to the benefit of the family of Michele and Cleodualdo and petitioners. Thus, in Homeowners Savings and Loan Bank v. Dailo, the Court stated thus:x x x Ei incumbit probatio qui dicit, non qui negat (he who asserts, not he who denies, must prove). Petitioner's sweeping conclusion that the loan obtained by the late Marcelino Dailo, Jr. to finance the construction of housing units without a doubt redounded to the benefit of his family, without adducing adequate proof, does not persuade this Court. Other than petitioner's bare allegation, there is nothing from the records of the case to compel a finding that, indeed, the loan obtained by the late Marcelino Dailo, Jr. redounded to the benefit of the family. Consequently, the conjugal partnership cannot be held liable for the payment of the principal obligation.[30]
To hold the property in Taal St. liable for the obligations of Michele and Matrai would be going against the spirit and avowed objective of the Civil Code to give the utmost concern for the solidarity and well-being of the family as a unit.[31]
In justifying the levy against the property, the RTC went over the Compromise Agreement as embodied in the Partial Decision dated November 29, 2000. Oddly, the RTC ruled that there was no effective transfer of ownership to the siblings Cleodia and Ceamantha Francisco. In the same breath, the RTC astonishingly ruled that Michele is now the owner of the property inasmuch as Cleodualdo already waived his rights over the property. The Compromise Agreement must not be read piece-meal but in its entirety. It is provided therein, thus:
7. In their desire to manifest their genuine concern for their children, Cleodia and Ceamantha, Cleodualdo and Michelle have voluntarily agreed to herein set forth their obligations, rights and responsibilities on matters relating to their children's support, custody, visitation, as well as to the dissolution of their conjugal partnership of gains as follows:
(a) Title and ownership of the conjugal property consisting of a house and lot located in Ayala Alabang, Muntinlupa, Metro Manila shall be transferred by way of a deed of donation to Cleodia and Ceamantha, as co-owners, when they reach nineteen (19) and eighteen (18) years old, respectively, subject to the following conditions:
a.1. Cleodualdo shall retain usufructuary rights over the property until he reaches the age of 65 years old, with the following rights and responsibilities:
x x x x[32] (Emphasis supplied)
From the foregoing, it is clear that both Michele and Cleodualdo have waived their title to and ownership of the house and lot in Taal St. in favor of petitioners. The property should not have been levied and sold at execution sale, for lack of legal basis.
Verily, the CA committed an error in sustaining the RTC Orders dated June 4, 2003 and July 31, 2003.
WHEREFORE, the petition is GRANTED. The assailed Court of Appeals Decision dated April 30, 2007, affirming RTC Orders dated June 4, 2003 and July 31, 2003, are hereby NULLIFIED and SET ASIDE. The temporary restraining order issued by the Court per Resolution of July 11, 2007 is hereby made PERMANENT.
Costs against respondents.
SO ORDERED.
FIRST DIVISION
[G.R. No. 148830. April 13, 2005]
NATIONAL HOUSING AUTHORITY, petitioner, vs. COURT OF APPEALS, BULACAN GARDEN CORPORATION and MANILA SEEDLING BANK FOUNDATION, INC., respondents.
D E C I S I O N
CARPIO, J.:
The Case
This is a petition for review[1] seeking to set aside the Decision[2] dated 30 March 2001 of the Court of Appeals (“appellate court”) in CA-G.R. CV No. 48382, as well as its Resolution dated 25 June 2001 denying the motion for reconsideration. The appellate court reversed the Decision[3] of Branch 87 of the Regional Trial Court of Quezon City (“trial court”) dated 8 March 1994 in Civil Case No. Q-53464. The trial court dismissed the complaint for injunction filed by Bulacan Garden Corporation (“BGC”) against the National Housing Authority (“NHA”). BGC wanted to enjoin the NHA from demolishing BGC’s facilities on a lot leased from Manila Seedling Bank Foundation, Inc. (“MSBF”). MSBF allegedly has usufructuary rights over the lot leased to BGC.
Antecedent Facts
On 24 October 1968, Proclamation No. 481 issued by then President Ferdinand Marcos set aside a 120-hectare portion of land in Quezon City owned by the NHA[4] as reserved property for the site of the National Government Center (“NGC”). On 19 September 1977, President Marcos issued Proclamation No. 1670, which removed a seven-hectare portion from the coverage of the NGC. Proclamation No. 1670 gave MSBF usufructuary rights over this segregated portion, as follows:
Pursuant to the powers vested in me by the Constitution and the laws of the Philippines, I, FERDINAND E. MARCOS, President of the Republic of the
Philippines, do hereby exclude from the operation of Proclamation No. 481, dated October 24, 1968, which established the National Government Center Site, certain parcels of land embraced therein and reserving the same for the Manila Seedling Bank Foundation, Inc., for use in its operation and projects, subject to private rights if any there be, and to future survey, under the administration of the Foundation.
This parcel of land, which shall embrace 7 hectares, shall be determined by the future survey based on the technical descriptions found in Proclamation No. 481, and most particularly on the original survey of the area, dated July 1910 to June 1911, and on the subdivision survey dated April 19-25, 1968. (Emphasis added)
MSBF occupied the area granted by Proclamation No. 1670. Over the years, MSBF’s occupancy exceeded the seven-hectare area subject to its usufructuary rights. By 1987, MSBF occupied approximately 16 hectares. By then the land occupied by MSBF was bounded by Epifanio de los Santos Avenue (“EDSA”) to the west, Agham Road to the east, Quezon Avenue to the south and a creek to the north.
On 18 August 1987, MSBF leased a portion of the area it occupied to BGC and other stallholders. BGC leased the portion facing EDSA, which occupies 4,590 square meters of the 16-hectare area.
On 11 November 1987, President Corazon Aquino issued Memorandum Order No. 127 (“MO 127”) which revoked the reserved status of “the 50 hectares, more or less, remaining out of the 120 hectares of the NHA property reserved as site of the National Government Center.” MO 127 also authorized the NHA to commercialize the area and to sell it to the public.
On 15 August 1988, acting on the power granted under MO 127, the NHA gave BGC ten days to vacate its occupied area. Any structure left behind after the expiration of the ten-day period will be demolished by NHA.
BGC then filed a complaint for injunction on 21 April 1988 before the trial court. On 26 May 1988, BGC amended its complaint to include MSBF as its co-plaintiff.
The Trial Court’s Ruling
The trial court agreed with BGC and MSBF that Proclamation No. 1670 gave MSBF the right to conduct the survey, which would establish the seven-hectare area covered by MSBF’s usufructuary rights. However, the trial court held that MSBF failed to act seasonably on this right to conduct the survey. The trial court ruled that the previous surveys conducted by MSBF covered 16 hectares, and were thus inappropriate to determine the seven-hectare area. The trial court concluded that to allow MSBF to determine the seven-hectare area now would be grossly unfair to the grantor of the usufruct.
On 8 March 1994, the trial court dismissed BGC’s complaint for injunction. Thus:
Premises considered, the complaint praying to enjoin the National Housing Authority from carrying out the demolition of the plaintiff’s structure, improvements and facilities in the premises in question is hereby DISMISSED, but the suggestion for the Court to rule that Memorandum Order 127 has repealed Proclamation No. 1670 is DENIED. No costs.
SO ORDERED.[5]
The NHA demolished BGC’s facilities soon thereafter.
The Appellate Court’s Ruling
Not content with the trial court’s ruling, BGC appealed the trial court’s Decision to the appellate court. Initially, the appellate court agreed with the trial court that Proclamation No. 1670 granted MSBF the right to determine the location of the seven-hectare area covered by its usufructuary rights. However, the appellate court ruled that MSBF did in fact assert this right by conducting two surveys and erecting its main structures in the area of its choice.
On 30 March 2001, the appellate court reversed the trial court’s ruling. Thus:
WHEREFORE, premises considered, the Decision dated March 8, 1994 of the Regional Trial Court of Quezon City, Branch 87, is hereby REVERSED
and SET ASIDE. The National Housing Authority is enjoined from demolishing the structures, facilities and improvements of the plaintiff-appellant Bulacan Garden Corporation at its leased premises located in Quezon City which premises were covered by Proclamation No. 1670, during the existence of the contract of lease it (Bulacan Garden) had entered with the plaintiff-appellant Manila Seedling Bank Foundation, Inc.
No costs.
SO ORDERED.[6]
The NHA filed a motion for reconsideration, which was denied by the appellate court on 25 June 2001.
Hence, this petition.
The Issues
The following issues are considered by this Court for resolution:
WHETHER THE PETITION IS NOW MOOT BECAUSE OF THE DEMOLITION OF THE STRUCTURES OF BGC; and
WHETHER THE PREMISES LEASED BY BGC FROM MSBF IS WITHIN THE SEVEN-HECTARE AREA THAT PROCLAMATION NO. 1670 GRANTED TO MSBF BY WAY OF USUFRUCT.
The Ruling of the Court
We remand this petition to the trial court for a joint survey to determine finally the metes and bounds of the seven-hectare area subject to MSBF’s usufructuary rights.
Whether the Petition is Moot because of theDemolition of BGC’s Facilities
BGC claims that the issue is now moot due to NHA’s demolition of BGC’s facilities after the trial court dismissed BGC’s complaint for injunction. BGC argues that there is nothing more to enjoin and that there are no longer any rights left for adjudication.
We disagree.
BGC may have lost interest in this case due to the demolition of its premises, but its co-plaintiff, MSBF, has not. The issue for resolution has a direct effect on MSBF’s usufructuary rights. There is yet the central question of the exact location of the seven-hectare area granted by Proclamation No. 1670 to MSBF. This issue is squarely raised in this petition. There is a need to settle this issue to forestall future disputes and to put this 20-year litigation to rest.
On the Location of the Seven-Hectare Area Granted byProclamation No. 1670 to MSBF as Usufructuary
Rule 45 of the 1997 Rules of Civil Procedure limits the jurisdiction of this Court to the review of errors of law.[7] Absent any of the established grounds for exception,[8] this Court will not disturb findings of fact of lower courts. Though the matter raised in this petition is factual, it deserves resolution because the findings of the trial court and the appellate court conflict on several points.
The entire area bounded by Agham Road to the east, EDSA to the west, Quezon Avenue to the south and by a creek to the north measures approximately 16 hectares. Proclamation No. 1670 gave MSBF a usufruct over only a seven-hectare area. The BGC’s leased portion is located along EDSA.
A usufruct may be constituted for a specified term and under such conditions as the parties may deem convenient subject to the legal provisions on usufruct.[9] A usufructuary may lease the object held in usufruct.[10] Thus, the NHA may not evict BGC if the 4,590 square meter portion MSBF leased to BGC is within the seven-hectare area held in usufruct by MSBF. The owner of the property must respect the lease entered into by the usufructuary so long as the usufruct exists.[11]
However, the NHA has the right to evict BGC if BGC occupied a portion outside of the seven-hectare area covered by MSBF’s usufructuary rights.
MSBF’s survey shows that BGC’s stall is within the seven-hectare area. On the other hand, NHA’s survey shows otherwise. The entire controversy revolves on the question of whose land survey should prevail.
MSBF’s survey plots the location of the seven-hectare portion by starting its measurement from Quezon Avenue going northward along EDSA up until the creek, which serves as the northern boundary of the land in question. Mr. Ben Malto (“Malto”), surveyor for MSBF, based his survey method on the fact that MSBF’s main facilities are located within this area.
On the other hand, NHA’s survey determines the seven-hectare portion by starting its measurement from Quezon Avenue going towards Agham Road. Mr. Rogelio Inobaya (“Inobaya”), surveyor for NHA, based his survey method on the fact that he saw MSBF’s gate fronting Agham Road.
BGC presented the testimony of Mr. Lucito M. Bertol (“Bertol”), General Manager of MSBF. Bertol presented a map,[12] which detailed the area presently occupied by MSBF. The map had a yellow-shaded portion, which was supposed to indicate the seven-hectare area. It was clear from both the map and Bertol’s testimony that MSBF knew that it had occupied an area in excess of the seven-hectare area granted by Proclamation No. 1670.[13] Upon cross-examination, Bertol admitted that he personally did not know the exact boundaries of the seven-hectare area.[14] Bertol also admitted that MSBF prepared the map without consulting NHA, the owner of the property.[15]
BGC also presented the testimony of Malto, a registered forester and the Assistant Vice-President of Planning, Research and Marketing of MSBF. Malto testified that he conducted the land survey, which was used to construct the map presented by Bertol.[16] Bertol clarified that he authorized two surveys, one in 1984 when he first joined MSBF, and the other in 1986.[17] In both instances, Mr. Malto testified that he was asked to survey a total of 16 hectares, not just seven hectares. Malto testified that he conducted the second survey in 1986 on the instruction of MSBF’s general manager. According to Malto, it was only in the second survey that he was told to determine the seven-hectare portion. Malto further clarified
that he based the technical descriptions of both surveys on a previously existing survey of the property.[18]
The NHA presented the testimony of Inobaya, a geodetic engineer employed by the NHA. Inobaya testified that as part of the NHA’s Survey Division, his duties included conducting surveys of properties administered by the NHA.[19] Inobaya conducted his survey in May 1988 to determine whether BGC was occupying an area outside the seven-hectare area MSBF held in usufruct.[20] Inobaya surveyed the area occupied by MSBF following the same technical descriptions used by Malto. Inobaya also came to the same conclusion that the area occupied by MSBF, as indicated by the boundaries in the technical descriptions, covered a total of 16 hectares. He further testified that the seven-hectare portion in the map presented by BGC,[21] which was constructed by Malto, does not tally with the boundaries BGC and MSBF indicated in their complaint.
Article 565 of the Civil Code states:
ART. 565. The rights and obligations of the usufructuary shall be those provided in the title constituting the usufruct; in default of such title, or in case it is deficient, the provisions contained in the two following Chapters shall be observed.
In the present case, Proclamation No. 1670 is the title constituting the usufruct. Proclamation No. 1670 categorically states that the seven-hectare area shall be determined “by future survey under the administration of the Foundation subject to private rights if there be any.” The appellate court and the trial court agree that MSBF has the latitude to determine the location of its seven-hectare usufruct portion within the 16-hectare area. The appellate court and the trial court disagree, however, whether MSBF seasonably exercised this right.
It is clear that MSBF conducted at least two surveys. Although both surveys covered a total of 16 hectares, the second survey specifically indicated a seven-hectare area shaded in yellow. MSBF made the first survey in 1984 and the second in 1986, way before the present controversy started. MSBF conducted the two surveys before the lease to BGC. The trial court ruled that MSBF did not act seasonably in exercising its right to conduct the survey. Confronted with evidence that MSBF did in fact
conduct two surveys, the trial court dismissed the two surveys as self-serving. This is clearly an error on the part of the trial court. Proclamation No. 1670 authorized MSBF to determine the location of the seven-hectare area. This authority, coupled with the fact that Proclamation No. 1670 did not state the location of the seven-hectare area, leaves no room for doubt that Proclamation No. 1670 left it to MSBF to choose the location of the seven-hectare area under its usufruct.
More evidence supports MSBF’s stand on the location of the seven-hectare area. The main structures of MSBF are found in the area indicated by MSBF’s survey. These structures are the main office, the three green houses, the warehouse and the composting area. On the other hand, the NHA’s delineation of the seven-hectare area would cover only the four hardening bays and the display area. It is easy to distinguish between these two groups of structures. The first group covers buildings and facilities that MSBF needs for its operations. MSBF built these structures before the present controversy started. The second group covers facilities less essential to MSBF’s existence. This distinction is decisive as to which survey should prevail. It is clear that the MSBF intended to use the yellow-shaded area primarily because it erected its main structures there.
Inobaya testified that his main consideration in using Agham Road as the starting point for his survey was the presence of a gate there. The location of the gate is not a sufficient basis to determine the starting point. MSBF’s right as a usufructuary as granted by Proclamation No. 1670 should rest on something more substantial than where MSBF chose to place a gate.
To prefer the NHA’s survey to MSBF’s survey will strip MSBF of most of its main facilities. Only the main building of MSBF will remain with MSBF since the main building is near the corner of EDSA and Quezon Avenue. The rest of MSBF’s main facilities will be outside the seven-hectare area.
On the other hand, this Court cannot countenance MSBF’s act of exceeding the seven-hectare portion granted to it by Proclamation No. 1670. A usufruct is not simply about rights and privileges. A usufructuary has the duty to protect the owner’s interests. One such duty is found in Article 601 of the Civil Code which states:
ART. 601. The usufructuary shall be obliged to notify the owner of any act of a third person, of which he may have knowledge, that may be prejudicial to the rights of ownership, and he shall be liable should he not do so, for damages, as if they had been caused through his own fault.
A usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides.[22] This controversy would not have arisen had MSBF respected the limit of the beneficial use given to it. MSBF’s encroachment of its benefactor’s property gave birth to the confusion that attended this case. To put this matter entirely to rest, it is not enough to remind the NHA to respect MSBF’s choice of the location of its seven-hectare area. MSBF, for its part, must vacate the area that is not part of its usufruct. MSBF’s rights begin and end within the seven-hectare portion of its usufruct. This Court agrees with the trial court that MSBF has abused the privilege given it under Proclamation No. 1670. The direct corollary of enforcing MSBF’s rights within the seven-hectare area is the negation of any of MSBF’s acts beyond it.
The seven-hectare portion of MSBF is no longer easily determinable considering the varied structures erected within and surrounding the area. Both parties advance different reasons why their own surveys should be preferred. At this point, the determination of the seven-hectare portion cannot be made to rely on a choice between the NHA’s and MSBF’s survey. There is a need for a new survey, one conducted jointly by the NHA and MSBF, to remove all doubts on the exact location of the seven-hectare area and thus avoid future controversies. This new survey should consider existing structures of MSBF. It should as much as possible include all of the facilities of MSBF within the seven-hectare portion without sacrificing contiguity.
A final point. Article 605 of the Civil Code states:
ART. 605. Usufruct cannot be constituted in favor of a town, corporation, or association for more than fifty years. If it has been constituted, and before the expiration of such period the town is abandoned, or the corporation or association is dissolved, the usufruct shall be extinguished by reason thereof. (Emphasis added)
The law clearly limits any usufruct constituted in favor of a corporation or association to 50 years. A usufruct is meant only as a lifetime grant. Unlike a natural person, a corporation or association’s lifetime may be extended indefinitely. The usufruct would then be perpetual. This is especially invidious in cases where the usufruct given to a corporation or association covers public land. Proclamation No. 1670 was issued 19 September 1977, or 28 years ago. Hence, under Article 605, the usufruct in favor of MSBF has 22 years left.
MO 127 released approximately 50 hectares of the NHA property as reserved site for the National Government Center. However, MO 127 does not affect MSBF’s seven-hectare area since under Proclamation No. 1670, MSBF’s seven-hectare area was already “exclude[d] from the operation of Proclamation No. 481, dated October 24, 1968, which established the National Government Center Site.”
WHEREFORE, the Decision of the Court of Appeals dated 30 March 2001 and its Resolution dated 25 June 2001 in CA-G.R. CV No. 48382 are SET ASIDE. This case is REMANDED to Branch 87 of the Regional Trial Court of Quezon City, which shall order a joint survey by the National Housing Authority and Manila Seedling Bank Foundation, Inc. to determine the metes and bounds of the seven-hectare portion of Manila Seedling Bank Foundation, Inc. under Proclamation No. 1670. The seven-hectare portion shall be contiguous and shall include as much as possible all existing major improvements of Manila Seedling Bank Foundation, Inc. The parties shall submit the joint survey to the Regional Trial Court for its approval within sixty days from the date ordering the joint survey.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur.
Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. L-2659 October 12, 1950
In the matter of the testate estate of Emil Maurice Bachrach, deceased. MARY McDONALD BACHRACH, petitioner-appellee, vs.SOPHIE SEIFERT and ELISA ELIANOFF, oppositors-appellants.
Ross, Selph, Carrascoso and Janda for appellants.Delgado and Flores for appellee.
OZAETA, J.:
Is a stock dividend fruit or income, which belongs to the usufructuary, or is it capital or part of the corpus of the estate, which pertains to the remainderman? That is the question raised in the appeal.
The deceased E. M. Bachrach, who left no forced heir except his widow Mary McDonald Bachrach, in his last will and testament made various legacies in cash and willed the remainder of his estate as follows:
Sixth: It is my will and do herewith bequeath and devise to my beloved wife Mary McDonald Bachrach for life all the fruits and usufruct of the remainder of all my estate after payment of the legacies, bequests, and gifts provided for above; and she may enjoy said usufruct and use or spend such fruits as she may in any manner wish.
The will further provided that upon the death of Mary McDonald Bachrach, one-half of the all his estate "shall be divided share and share alike by and between my legal heirs, to the exclusion of my brothers."
The estate of E. M. Bachrach, as owner of 108,000 shares of stock of the Atok-Big Wedge Mining Co., Inc., received from the latter 54,000 shares representing 50 per cent stock dividend on the said 108,000 shares.
On June 10, 1948, Mary McDonald Bachrach, as usufructuary or life tenant of the estate, petitioned the lower court to authorize the Peoples Bank and Trust Company as administrator of the estate of E. M. Bachrach, to her the said 54,000 share of stock dividend by endorsing and delivering to her the corresponding certificate of stock, claiming that said dividend, although paid out in the form of stock, is fruit or income and therefore belonged to her as usufructuary or life tenant. Sophie Siefert and Elisa Elianoff, legal heirs of the deceased, opposed said petition on the ground that the stock dividend in question was not income but formed part of the capital and therefore belonged not to the usufructuary but to the remainderman. And they have appealed from the order granting the petition and overruling their objection.
While appellants admits that a cash dividend is an income, they contend that a stock dividend is not, but merely represents an addition to the invested capital. The so-called Massachusetts rule, which prevails in certain jurisdictions in the United States, supports appellants' contention . It regards cash dividends, however large, as income, and stock dividends, however made, as capital. (Minot vs. Paine, 99 Mass., 101; 96 Am. Dec., 705.) It holds that a stock dividend is not in any true sense any true sense any dividend at all since it involves no division or severance from the corporate assets of the dividend; that it does not distribute property but simply dilutes the shares as they existed before; and that it takes nothing from the property of the corporation, and nothing to the interests of the shareholders.
On the other hand, so called Pennsylvania rule, which prevails in various other jurisdictions in the United States, supports appellee's contention. This rule declares that all earnings of the corporation made prior to the death of the testator stockholder belong to the corpus of the estate, and that all earnings, when declared as dividends in whatever form, made during the lifetime of the usufructuary or life tenant. (Earp's Appeal, 28 Pa., 368.)
. . . It is clear that testator intent the remaindermen should have only the corpus of the estate he left in trust, and that all dividends should go the life tenants. It is true that profits realized are not dividends until declared by the proper officials of the corporation, but distribution of profits, however made, in
dividends, and the form of the distribution is immaterial. (In re Thompson's Estate, 262 Pa., 278; 105 Atl. 273, 274.)
In Hite vs. Hite (93 Ky., 257; 20 S. W., 778, 780), the Court of Appeals of Kentucky, speaking thru its Chief Justice, said:
. . . Where a dividend, although declared in stock, is based upon the earnings of the company, it is in reality, whether called by one name or another, the income of the capital invested in it. It is but a mode of distributing the profit. If it be not income, what is it? If it is, then it is rightfully and equitably the property of the life tenant. If it be really profit, then he should have it, whether paid in stock or money. A stock dividend proper is the issue of new shares paid for by the transfer of a sum equal to their par value from the profits and loss account to that representing capital stock; and really a corporation has no right to a dividend, either in cash or stock, except from its earnings; and a singular state of case — it seems to us, an unreasonable one — is presented if the company, although it rests with it whether it will declare a dividend, can bind the courts as to the proper ownership of it, and by the mode of payment substitute its will for that of that of the testator, and favor the life tenants or the remainder-men, as it may desire. It cannot, in reason, be considered that the testator contemplated such a result. The law regards substance, and not form, and such a rule might result not only in a violation of the testator's intention, but it would give the power to the corporation to beggar the life tenants, who, in this case, are the wife and children of the testator, for the benefit of the remainder-men, who may perhaps be unknown to the testator, being unborn when the will was executed. We are unwilling to adopt a rule which to us seems so arbitrary, and devoid of reason and justice. If the dividend be in fact a profit, although declared in stock, it should be held to be income. It has been so held in Pennsylvania and many other states, and we think it the correct rule. Earp's Appeal, 28 Pa. St. 368; Cook, Stocks & S. sec. 554. . . .
We think the Pennsylvania rule is more in accord with our statutory laws than the Massachusetts rule. Under section 16 of our Corporation Law, no corporation may make or declare any dividend except from the surplus profits arising from its business. Any dividend, therefore, whether cash or
stock, represents surplus profits. Article 471 of the Civil Code provides that the usufructuary shall be entitled to receive all the natural, industrial, and civil fruits of the property in usufruct. And articles 474 and 475 provide as follows:
ART. 474. Civil fruits are deemed to accrue day by day, and belong to the usufructuary in proportion to the time the usufruct may last.
ART. 475. When a usufruct is created on the right to receive an income or periodical revenue, either in money or fruits, or the interest on bonds or securities payable to bearer, each matured payment shall be considered as the proceeds or fruits such right.
When it consists of the enjoyment of the benefits arising from an interest in an industrial or commercial enterprise, the profits of which are not distributed at fixed periods, such profits shall have the same consideration.lawphil.net
In either case they shall be distributed as civil fruits, and shall be applied in accordance with the rules prescribed by the next preceding article.
The 108,000 shares of stock are part of the property in usufruct. The 54,000 shares of stock dividend are civil fruits of the original investment. They represent profits, and the delivery of the certificate of stock covering said dividend is equivalent to the payment of said profits. Said shares may be sold independently of the original shares, just as the offspring of a domestic animal may be sold independently of its mother.
The order appealed from, being in accordance with the above-quoted provisions of the Civil Code, his hereby affirmed, with costs against the appellants.
Haystack: Bachrach v. Seifert (GR L-2659, 12 October 1950)
Bachrach v. Seifert[G.R. No. L-2659. October 12, 1950.]En Banc, Ozaeta (J): 8 concur
Facts: The deceased Emil Maurice Bachrach left no forced heir except his widow Mary McDonald Bachrach. In his last will and testament made varius legacies in cash and willed all the fruits and usufruct the remainder of his estate (after payment of legacies, bequests and gifts) to his wife’s enjoyment. The will further provided that upon the death of Mary McDonald Bachrach, one-half of all his estate shall be divided share and share alike by and betweenhis legal heirs, to the exclusion of his brothers.
The estate of E. M. Bachrach, as owner of 108,000 shares of stock of the Atok-Big Wedge Mining Co., Inc., received from the latter 54,000 shares representing 50% stock dividend on the said 108,000 shares. On 10 June 1948, Mary McDonald Bachrach, as usufructuary or life tenant of the estate, petitioned the lower court to authorize the Peoples Bank and Trust Company, as administrator of the estate of E. M. Bachrach, to transfer to her the said 54,000 shares of stock dividend by indorsing and delivering to her the corresponding certificate of stock, claiming that said dividend, although paid out in the form of stock, is fruit or income and therefore belonged to her as usufructuary or life tenant. Sophie Siefert and Elisa Elianoff, legal heirs of the deceased, opposed said petition on the ground that the stock dividend in question was not income but formed part of the capital and therefore belonged not to the usufructuary but to the remainderman. The lower court granted the petition and overruled their objection. Siefer and Elianoff appealed.
The Supreme Court affirmed the order appealed from, being in accordance with the above-quoted provisions of the Civil Code; with costs against the appellants.
1. Massachusetts rule, declares stock dividend is not an income but merely represents an addition to the investment capitalThe so-called Massachusetts rule, which prevails in certain jurisdictions in the United States, regards cash dividends, however large, as income, and stock dividends, however made, as capital. (Minot vs. Paine, 99 Mass., 101; 96 Am. Dec., 705.) It holds that a stock dividend is not in any true sense any dividend at all since it involves no division or severance from the
corporate assets of the subject of the dividend; that it does not distribute property but simply dilutes the shares as they existed before; and that it takes nothing from the property of the corporation, and adds nothing to the interests of the shareholders. Thus, the rule supports the appellant’s contention that a stock dividends is not an income (unlike a cash dividend), but merely represents an addition to the invested capital.
2. Pennsylvania rule; all earnings of the corporation made prior to the testator stockholder belong to his estateThe so-called Pennsylvania rule, which prevails in various other jurisdictions in the United States, declares that all earnings of the corporation made prior to the death of the testator stockholder belong to the corpus of the estate, and that all earnings, when declared as dividends in whatever form, made during the lifetime of the usufructuary or life tenant are income and belong to the usufructuary or life tenant. (Earp's Appeal, 28 Pa., 368.) The rule supports appellee's contention.
3. Pennsylvania Rule; Remaindermen in trust of the corpus of the estate, while dividends go to life tenantsThe testator intended the remaindermen should have only the corpus of the estate he left in trust, and that all dividends should go to the life tenants. It is true that profits realized are not dividends until declared by the proper officials of the corporation, but distribution of profits, however made, is dividends, and the form of the distribution is immaterial." (In re Thompson's Estate, 262 Pa., 278; 105 Atl. 273, 274.)
4. Dividend, even if declared as stock, which is based upon the earnings of the company is an income of the capital invested in itIn Hite vs. Hite (93 Ky., 257; 20 S. W., 778, 780), the Court of Appeals of Kentucky, held that "where a dividend, although declared in stock, is based upon the earnings of the company, it is in reality, whether called by one name or another, the income of the capital invested in it. It is but a mode of distributing the profit. A stock dividend proper is the issue of new shares paid for by the transfer of a sum equal to their par value from the profit and loss account to that representing capital stock; and really a corporation has no right to declare a dividend, either in cash or stock, except from its earnings. In the present case; the 108,000 shares of stock are part of the property in usufruct. The 54,000 shares of stock dividend are civil fruits of the original investment. They represent profits, and the delivery of the
certificate of stock covering said dividend is equivalent to the payment of said profits. Said shares may be sold independently of the original shares, just as the offspring of a domestic animal may be sold independently of its mother.
5. Testator’s intent; substance not formThe law regards substance, and not form, and such a rule might result not only in a violation of the testator's intention, but it would give the power to the corporation to beggar the life tenants, who, in this case, are the wife and children of the testator, for the benefit of the ramaindermen, who may perhaps be unknown to the testator, being unborn when the will was executed. The Court is unwilling to adopt a rule which to us seems so arbitrary, and devoid of reason and justice. If the dividend be in fact a profit, although declared in stock, it should be held to be income.
6. Pennsylvania rule more in accord with local statutesThe Pennsylvania rule is more in accord with Philippine statutory laws than the Massachusetts rule. Under section 16 of the Corporation Law, no corporation may make or declare any dividend except from the surplus profits arising from its business. Any dividend, therefore, whether cash or stock, represents surplus profits.
7. Usufructuary entitled to fruits of the property in usufructArticle 471 of the Civil Code provides that the usufructuary shall be entitled to receive all the natural, industrial, and civil fruits of the property in usufruct. Further, Articles 474 provides that " Civil fruits are deemed to accrue day by day, and belong to the usufructuary in proportion to the time the usufruct may last.” Article 475, on the other hand, provides that “When a usufruct is created on the right to receive an income or periodical revenue, either in money or fruits, or the interest on bonds or securities payable to bearer, each matured payment shall be considered as the proceeds or fruits of such right. When it consists of the enjoyment of the benefits arising from an interest in an industrial or commercial enterprise, the profits of which are not distributed at fixed periods, such profits shall have the same consideration. In either case they shall be distributed as civil fruits, and shall be applied in accordance with the rules prescribed by the next preceding article."
Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. L-19614 March 27, 1971
JESUS M. GABOYA, as Administrator of the Estate of DON MARIANO CUI, plaintiff-appellant, vs.ANTONIO MA. CUI, MERCEDES CUI-RAMAS and GIL RAMAS, defendants-appellees, JESUS MA. CUI, JOSE MA. CUI, SERAFIN MA. CUI, JORGE MA. CUI, ROSARIO CUI DE ENCARNACION, PRECILLA C. VELEZ, and LOURDES C. VELEZ, intervenors-appellants, VICTORINO REYNES, defendant-in-counterclaim-appellee.
Vicente Jayme for plaintiff-appellant.
Hector L. Hofileña Candido Vasqueza and Jaime R. Nuevas for defendants-appellees.
Jose W. Diokno for intervenors-appellants.
REYES, J.B.L., J.:
Direct appeal (before Republic Act 5440) from a decision of the Court of First Instance of Cebu (in its Civil Case No. R-1720) denying resolution of a contract of sale of lots 2312, 2313 and 2319 executed on 20 March 1946 by the late Don Mariano Cui in favor of three of his children Antonio Ma. Cui, Mercedes Cui de Ramas and Rosario Cui de Encarnacion, but sentencing the first two, Antonio Cui and Mercedes; Cui, to pay, jointly and severally (in solidum), to the Judicial Administrator of the Estate of Mariano Cui (appellant Jesus M. Gaboya the amount of P100,088.80, with
legal interest from the interposition of the complaint (5 November 1951), plus P5,000.00 attorney's fees and the costs.
The antecedents of the case are stated in the previous decision of this Supreme Court rendered on 31 July 1952, in the case of Antonio and Mercedes Cui vs. Judge Piccio, et al., 91 Phil. 712.
Don Mariano Cui, widower, as owner of lots Nos. 2312, 2313 and 2319 situated in the City of Cebu, with an area of 152 square meters, 144 square meters and 2,362 square meters, respectively, or a total extension of 2,658 square meters, on March 8, 1946, sold said three lots to three of his children named Rosario C. de Encarnacion, Mercedes C. de Ramas and Antonio Ma. Cui, pro indiviso for the sum of P64,000. Because Rosario C. de Encarnacion for lack of funds was unable to pay her corresponding share of the purchase price, the sale to her was cancelled and the one-third of the property corresponding to her was returned to the vendor. These three lots are commercial. The improvements thereon were destroyed during the last Pacific War so that at the time of the sale in 1946, there were no buildings or any other improvements on them. Because of the sale of these lots pro indiviso and because of the cancellation of the sale to one of the three original vendees, Don Mariano and his children Mercedes and Antonio became co-owners of the whole mass in equal portions. In the deed of sale vendor Don Mariano retained for himself the usufruct of the property in the following words:
"...do hereby sell, transfer, and convey to Messrs. Rosario C. de Encarnacion, Mercedes C. de Ramas and Antonio Ma. Cui, the above-mentioned parcel of land in equal parts, ... and the further consideration, that I, shall enjoy the fruits and rents of the same, as long as my natural life shall last. Granting and conveying unto the said buyers the full
rights as owners to enjoy the constructive possession of the same, improve, construct and erect a building in the lot, or do whatever they believe to be proper and wise, ..."
Subsequently, a building was erected on a portion of this mass facing Calderon street and was occupied by a Chinese businessman for which he paid Don Mariano P600 a month as rental. The date when the building, was constructed and by whom do not appear in the record.
Sometime after the sale to Mercedes and Antonio the two applied to the Rehabilitation Finance Corporation (RFC) for a loan of P130,000 with which to construct a 12-door commercial building presumably on a portion of the entire parcel corresponding to their share. In order to facilitate the granting of the loan and inasmuch as only two of the three co-owners applied for the loan, Don Mariano on January 7, 1947, executed an authority to mortgage (Annex U) authorizing his two children co-owners to mortgage his share, the pertinent portion of said authority reading thus:
"That by virtue of these presents, I hereby agree, consent permit and authorize my said co-owners to mortgage, pledge my share so that they may be able to construct a house or building in the said property, provided however, that the rents of the said land shall not be impaired and will always be received by me."
The loan was eventually granted and was secured by a mortgage on the three lots in question, Don Mariano being included as one of the three mortgagors and signing the corresponding promissory note with his two co-owners. He did not however, join in the construction of the 12-door commercial building as may be gathered from the "Convenio de Asignacion de Parte' (Annex V) wherein it was agreed among the three co-owners to
assign to Don Mariano that one-third of the whole mass facing Calderon street and on which was erected the building already referred to as being occupied by a Chinese businessman and for which he was paying Don Mariano P600 a month rental. The area of this one-third portion was fixed at 900 square meters approximately one-third of the total area of the three lots. The pertinent Portion of this Annex V reads as follows:
"Que como quiera que, la propiedad arriba descrita esta actualmente hipotecada a la Rehabilitation Finance Corporation para garantizar la construccion que mis condueños cnotruyeron en la parte que les correponde;
"Y que como quiera que, el Sr. Don Mariano Cui, uno de los condueños, no ha querido unirse a la construccion de dicho edificio, y desea que la parte que le corresponda sea la 1/3 que este dando frente a la Calle Calderon."
The 12-door commercial building was eventually constructed and the builder-owners thereof Mercedes and Antonio received and continued to receive the rents thereof amounting to P4,800 a month and paying therefrom the installments due for payment on the loan to the Rehabilitation Finance Corporation.
On March 25, 1948, two other children of Don Mariano named Jesus and Jorge brought an action (Civil case No. 599R) in the Court of First Instance of Cebu for the purpose of annulling the deed of sale of the three lots in question on the ground that they belonged to the conjugal partnership of Don Mariano and his deceased wife Antonia Perales. Thereafter, plaintiffs Jesus and Jorge applied for the appointment of a receiver to take charge of the lots and of the rentals of the building. This petition was denied on November 8, 1948.
On March 19, 1949, Rosario C. Encarnacion, that daughter of Don Mariano who was one of the original
vendees, filed a petition to declare her father incompetent and to have a guardian appointed for his property, in Special Proceeding No. 481-R of the Court of First Instance of Cebu. In May 1949 the petition was granted and Don Mariano was declared incompetent and Victorino Reynes was appointed guardian of his property.lâwphî1.ñèt Thereafter, the complaint in civil case No. 599-R seeking to annul the deed of sale of the three lots in favor of Mercedes and Antonio was amended so as to include as plaintiffs not only the guardian Victorino Reynes but also all the other children of Don Mariano.
On June 15, 1949, guardian Victorino Reynes filed a motion in the guardianship proceedings seeking authority to collect the rentals from the three lots in question and asking the Court to order Antonio and Mercedes to deliver to him as guardian all the rentals they had previously collected from the 12-door commercial building, together with all the papers belonging to his ward. This motion was denied by Judge Piccio in his order of July 12, 1949. The guardian did not appeal from this order.
On May 22, 1951, Judge Saguin rendered a decision in civil case No. 599-R and found that the three lots in question were not conjugal property but belonged exclusively to Don Mariano and so upheld the sale of two-thirds of said lots to Antonio and Mercedes. The plaintiffs appealed to the Court of Appeals where the case is now pending.
From the Court of Appeals the case was brought to the Supreme Court, and the decision of Judge Saguin upholding the validity of the sale in favor of Antonio and Mercedes Cui was finally affirmed on 21 February 1957, in Cui vs. Cui, 100 Phil, 914.
This third case now before Us was started by the erstwhile guardian of Don Mariano Cui (while the latter was still alive) in order to recover
P126,344.91 plus legal interest from Antonio Cui and Mercedes Cui (Record on Appeal, pages 2-3) apparently as fruits due to his ward by virtue of his usufruct. The guardian's complaint was supplemented and amplified by a 1957 complaint in intervention (duly admitted) filed by the other compulsory heirs of Mariano Cui, who had died on 29 July 1952, some nine months after the present case was instituted in the court below (Record on Appeal, pages 67-68).
In essence, the complaint alleges that the usufructuary right reserved in favor of Don Mariano Cui extends to and includes the rentals of the building constructed by Antonio Cui and Mercedes Cui on the land sold to them by their father; that the defendants retained those rentals for themselves; that the usufructuary rights of the vendor were of the essence of the sale, and their violation entitled him to rescind (or resolve) the sale. It prayed either for rescission with accounting, or for delivery of the rentals of the building with interests, attorneys' fees and costs (Record on Appeal, pages 12-38).
The amended answer, while admitting the reserved usufruct and the collection of rentals of the building by the defendants, denied that the usufructuary rights included or extended to the said rentals, or that such usufruct was of the essence of the sale; that the vendor (Don Mariano Cui ) had waived and renounced the usufruct and that the defendants vendees gave the vendor P400.00 a month by way of aid; that the original complaint having sought fulfillment of the contract, plaintiff can not thereafter seek rescission; that such action is barred by res judicata (on account of the two previous decisions of the Supreme Court and by extinctive prescription. Defendants counterclaimed for actual and moral damages and attorney's fees.
Plaintiffs denied the allegations in the counterclaim. .
From a consideration of the pleadings, the basic and pivotal issue appears to be whether the usufruct reserved by the vendor in the deed of sale, over the lots in question that were at the time vacant and unoccupied, gave the usufructuary the right to receive the rentals of the commercial building constructed by the vendees with funds borrowed from the Rehabilitation and Finance Corporation, the loan being secured by a mortgage over the lots sold. Similarly, if the usufruct extended to the building, whether the failure
of the vendees to pay over its rentals to the usufructuary entitled the latter to rescind, or more properly, resolve the contract of sale. In the third place, should the two preceding issues be resolved affirmatively, whether the action for rescission due to breach of the contract could still be enforced and was not yet barred.
The court below declared that the reserved right of usufruct in favor of the vendor did not include, nor was it intended to include, nor was it intended to include, the rentals of the building subsequently constructed on the vacant lots, but that it did entitle the usufructuary to receive a reasonable rental for the portion of the land occupied by the building, which the Court a quo fixed at Pl,858.00 per month; and that the rentals for the land from November, 1947, when the building was rented, to 29 July 1952, when Don Mariano died, amounted to P100,088.80. It also found no preponderant evidence that the seller, Don Mariano Cui, had ever waived his right of usufruct, as contended by the defendants; and that the Supreme Court, in denying reconsideration of its second (1957) decision (100 Phil. 914), had, like the court of origin, refused to pass upon the extent of the usufructuary rights of the seller, specially because the present case, was already pending in the Court of First Instance, hence no res judicata existed. No attorney's fees were awarded to the defendants, but they were sentenced to pay counsel fees to plaintiffs.
Both parties appealed in the decision of the court a quo.
We find no the decision appealed from. As therein pointed out, the terms of the 1946 deed of sale of the vacant lots in question made by the late Don Mariano Cui in favor of his three children, Rosario, Mercedes and Antonio Cui, in consideration of the sum of P64,000.00 and the reserved usufruct of the said lot in favor of the vendor, as amplified by the deed of 7 January 1947, authorizing Mercedes, and Antonio Cui to borrow money, with the security of a mortgage over the entirety of the lots, in order to enable them to construct a house or building thereon —
provided, however, that the rents of said land shall not be impaired and will always received by me.
clearly prove that the reserved usufruct in favor of the vendor, Mariano Cui, was limited to the rentals of the land alone. Had it been designed to include
also the rents of the buildings intended to be raised on the land, an express provision would have been included to the effect, since in both documents (heretofore quoted) the possibility of such construction was clearly envisaged and mentioned.
Appellants, however, argue that the terms of the deed constituting the usufruct are not determinative of the extent of the right conferred; and that by law, the enjoyment of the rents of the building subsequently erected passed to the usufructuary, by virtue of Article 571 of the Civil Code of the Philippines (Article 479 of the Spanish Civil Code of 1889) prescribing that:
Art. 571. The usufructuary shall have the right to enjoy any increase which the thing in usufruct may acquire through accession, the servitudes established in its favor, and, in general, all the benefits inherent therein,
inasmuch as (in the appellants' view) the building constructed by appellees was an accession to the land.
This argument is not convincing. Under the articles of the Civil Code on industrial accession by modification on the principal land (Articles 445 to 456 of the Civil Code) such accession is limited either to buildings erected on the land of another, or buildings constructed by the owner of the land with materials owned by someone else.
Thus, Article 445, establishing the basic rule of industrial accession, prescribes that —
Whatever is built, planted or sown on the land of another, and the improvements or repairs made thereon, belong to the owner of the land subject to the provisions of the following articles.
while Article 449 states:
He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity. (Emphasis supplied)
Articles 447 and 445, in turn, treat of accession produced by the landowner's building, planting and sowing "with the materials of another" and when "the materials, plants or seeds belong to a third person other than the landowner or the builder, planter or sower.
Nowhere in these articles on industrial accession is there any mention of the case of landowner building on his own land with materials owned by himself (which is the case of appellees Mercedes and Antonio Cui). The reason for the omission is readily apparent: recourse to the rules of accession are totally unnecessary and inappropriate where the ownership of land and of the, materials used to build thereon are concentrated on one and the same person. Even if the law did not provide for accession the land-owner would necessarily own the building, because he has paid for the materials and labor used in constructing it. We deem it unnecessary to belabor this obvious point. .
There is nothing in the authorities (Manresa, Venezian, Santamaria, and Borrell cited by appellants that specifically deals with constructions made by a party on his own land with his own materials, and at his own expense. The authorities cited merely indicate the application in general of the rules of accession. But as already stated above, the Civil Code itself limits the cases of industrial accession to those involving land and materials belonging to different owners. Anyway, commentators' opinions are not binding where not in harmony with the law itself.
The author that specifically analyses the situation of the usufructuary vis-a-vis constructions made by the landowner with his own materials is Scaevola (Codigo Civil, 2d Edition, pages 288 to 297) ; and his conclusion after elaborate discussion is that, at the most —
(b) El nudo propietario no podra, sin el consentimiento del usufructuario, hacer construcciones, plantaciones y siembras en el predio objecto del usufructo; y en el caso de que aquel lascosintiese, la utilizacion sera comun en los frutos y productosde lo sembrado y plantado, y con
respecto a las construcciones,el usufructuario tendra derecho a la renta que de mutuo acuerdo se fije a las mismas; en su defecto, por la autoridad judicial (Author cit., Emphasis supplied).
Scaevola's opinion is entirely in harmony with Article 595 of the Civil Code of the Philippines, prescribing that —
The owner may construct any works and make any improvements of which the immovable usufruct is susceptible, or make new plantings thereon if it be rural, provided that such acts do not cause a diminuition in the value of the usufruct or prejudice the right of the usufructuary.
Note that if the income from constructions made by the owner during the existence of the usufruct should be held to accrue automatically to the usufructuary under Article 571, such improvements could not diminish the value of the usufruct nor prejudice the right of the usufructuary; and the qualifications by Article 595 on the owner's right to build would be redundant. The limitations set by Article 595 to the construction rights of the naked owner of the land are evidently premised upon the fact that such constructions would necessarily reduce the area of the land under usufruct, for which the latter should be indemnified. This is precisely what the court a quo has done in sentencing the appellee owners of the building to pay to the usufructuary a monthly rent of P1,758.00 for the area occupied by their building, after mature consideration of the rental values of lands in the neighborhood.
Additional considerations against the thesis sustained by appellants are (1) that the amount invested in the building represents additional capital of the landowners not foresee" when the usufruct was created; and (2) that no land-owner would be willing to build upon vacant lots under usufruct if the gain therefrom were to go to the usufructuary while the depreciation of the value of the building (as distinguished from the necessary repairs) and the amortization of its cost would burden exclusively the owner of the land. The unproductive situation of barren lots would thus be prolonged for an indefinite time, to the detriment of society. In other words, the rule that
appellants advocate would contradict the general interest and be against public policy.
Appellants urge, in support of their stand, that the loan .for the construction of the building was obtained upon the security of a mortgage not only upon the share of appellees but also upon the undivided interest of Don Mariano Cui in the lots in question. That factor is irrelevant to the ownership of the building, because the money used for the building was loaned exclusively to the appellees, and they were the ones primarily responsible for its repayment. Since the proceeds of the loan was exclusively their property, 1 the building constructed with the funds loaned is likewise their own. A mortgagor does not become directly liable for the payment of the loan secured by the mortgage, in the absence of stipulation to that effect; and his subsidiary role as guarantor does not entitle him to the ownership of the money borrowed, for which the mortgage is mere security.
We agree with the trial court that there was no adequate proof that the vendor, Don Mariano Cui, ever renounced his usufruct. The alleged waiver was purely verbal, and is supported solely by the testimony of Antonio Cui, one of the alleged beneficiaries thereof. As a gratuitous renunciation of a real right over immovable property that as created by public document, the least to be expected in the regular course of business is that the waiver should also appear in writing. Moreover, as pointed out in the appealed decision (Record on Appeal, page 184, et seq.), in previous pleadings sworn to by Antonio Cui himself, in Civil Case No. 599 and Special Proceeding 481-R of the Cebu Court of First Instance (Exhibits "I", "J", and "20-A"), he and his sister Mercedes had contended that Don Mariano Cui had been receiving from them P400.00 per month as the value of his usufruct, and never claimed that the real right had been renounced or waived.lâwphî1.ñèt The testimony of Antonio Cui on the alleged waiver, given after the usufructuary had been declared incompetent and could no longer contradict him, is obviously of negligible probative value.
Turning now to the second issue tendered by herein appellants, that the non-compliance with the provisions concerning the usufruct constituted sufficient ground for the rescission (or resolution) of the sale under the tacit resolutory condition established by Article 1191 of the Civil Code. What has been stated previously in discussing the import of Don Mariano's usufruct shows that the alleged breach of contract by the appellees Antonio
and Mercedes Cui could only consist in their failure to pay to the usufructuary the rental value of the area occupied by the building constructed by them. But as the rental value in question had not been ascertained or fixed either by the parties or the court, prior to the decision of 31 October 1961, now under appeal, nor had Don Mariano Cui, or anyone else in his behalf, made any previous demand for its payment, the default, if any, can not be exclusively blamed upon the defendants-appellees. Hence, the breach is not it "so substantial and fundamental as to defeat the object of the parties in making the agreement" 2 as to justify the radical remedy of rescission. This Court, in Banahaw, Inc. vs. Dejarme 55 Phil. 338, ruled that —
...Under the third paragraph of article 1124 3 of the Civil Code, the court is given a discretionary power to allow a period within which a person in default may be permitted to perform the stipulation upon which the claim for resolution of the contract is based. The right to resolve or rescind a contract for non-performance of one of its stipulations is, therefore, not absolute.
We have stated "the default, if any," for the reason that without previous ascertainment of the exact amount that the, defendants-appellees were obligated to turn over to the usufructuary by way of reasonable rental value of the land occupied by their building, said parties can not be considered as having been in default (mora) for failure to turn over such monies to the usufructuary. "Ab illiquido non fit mora": this principle has been repeatedly declared by the jurisprudence of Spanish Supreme Court (v. Manresa, Commentaries to the Spanish Civil Code [5th Ed.], Vol. 8, No. 1, page 134) that is of high persuasive value in the absence of local adjudications on the point .
No puede estimarse que incurre en mora el obligado al pago de cantidad mientras esta no sea liquida, y tenga aquel conocimiento por virtud de requirimiento o reclamacion judicial de lo que debe abonar (Sent. TS of Spain, 13 July 1904) .
Seguin tiene declarado esta sala con repeticion, no se puede establecer que hay morosidad, ni condenar por tal
razon al abono de intereses cuando no se conoce la cantidad liquida reclamable" (Sent. TS of Spain, 29 November 1912)
... es visto que no existiendo obligacion de entregar cantidad hasta tanto que se liquide no puede estimarse segun jurisprudencia, que los recurridos ineurran en mora, por tanto que hayan de pagar intereses legales de la cantidad que en su caso resulte (Sent, TS of Spain, 29 April 1914)
In the absence of default on the part of the defendants-vendees, Article 1592 of the Civil Code of the Philippines that is invoked by appellants in, support of their all right to rescind the sale, is not applicable: for said article (which is a mere variant of the general principle embodied in Article 1191, of the same Code) presupposes default of the purchasers in the fulfilment of their obligations. As already noted, no such default or breach could occur before liquidation of the usufructuary's credit; and the time for paying such unliquidated claim can not be said to have accrued until the decisions under appeal was rendered, fixing the rental value of the land occupied by the building.
The filing of the initial complaint by Victoriano Reynes, then guardian of the late Don Mariano in 1951, seeking to recover P126,344.91 plus interest, did not place appellees in default, for that complaint proceeded on the theory that the usufructuary was entitled to all the rentals of the building constructed by the appellees on the lot under usufruct; and as We have ruled, that theory was not legally tenable. And the 1957 complaint in intervention, seeking rescission of the sale as alternative remedy, was only interposed after the death of the usufructuary in 1952, and the consequent extinction of the usufruct, conformably to Article 603, paragraph (1), of the Civil Code.
It is also urged by the appellants that the usufruct was a condition precedent to the conveyance of ownership over the land in question to herein appellees, and their failure to comply with their obligations under the usufruct prevented the vesting of title to the property in said appellees. We need not consider this argument, since We have found that the usufruct over the land did not entitle the usufructuary to either the gross or the net income
of the building erected by the vendees, but only to the rental value of the portion of the land occupied by the structure (in so far as the usufructuary was prevented from utilizing said portion), and that rental value was not liquidated when the complaints were filed in the court below, hence, there was no default in its payment. Actually, this theory of appellants fails to take into account that Don Mariano could not retain ownership of the land and, at the same time, be the usufructuary thereof. His intention of the usufructuary rights in itself imports that he was no longer its owner. For usufruct is essentially jus in re aliena; and to be a usufructuary of one's own property is in law a contradiction in terms, and a conceptual absurdity.
The decision (Exhibit "30") as well as the resolution of this Court upon the motion to reconsider filed in the previous case (100 Phil 914) refusing to adjudicate the usufructuary rights of Don Mariano in view of the pendency of the present litigation (Exhibit "22") amply support the trial court's overruling of the defense of res judicata.
Summing up, We find and hold:
(1) That the usufructuary rights of the late Don Mariano Cui, reserved in the deed of sale (Exhibit "A" herein), was over the land alone and did not entitle him to the rents of the building later constructed thereon by defendants Mercedes and Antonio Cui at their own expense.
(2) That said usufructuary was entitled only to the reasonable rental value of the land occupied by the building aforementioned.
(3) That such rental value not having been liquidated until the judgment under appeal was rendered, Antonio and Mercedes Cui were not in default prior thereto, and the deed of sale was therefore, not subject to rescission.
(4) That as found by the court below, the reasonable rental value of the land occupied by the defendants' building totalled P100,088.80 up to the time the usufructuary died and the usufruct terminated.
(5) That pursuant to Articles 2208 (No. 11), 2210 and 2213 of the Civil Code, 5 the trial court had discretion to equitably award legal interest upon said sum of P100,088.80, as well as P5,000.00 attorney's fees, considering
that defendants Cui have enjoyed the said rental value of the land during all those years.
WHEREFORE, finding no reversible error in the appealed decision, the same is hereby affirmed. Costs against appellant-intervenors, Jesus Ma. Cui, Jose Ma. Cui, Serafin Ma. Cui, Jorge Ma. Cui, Rosario Cui de Encarnacion, Precilla C. Velez, and Lourdes C. Velez.
Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. L-123 December 12, 1945
JOSEFA FABIE, petitioner, vs.JOSE GUTIERREZ DAVID, Judge of First Instance of Manila, NGO BOO SOO and JUAN GREY, respondents.
Sancho Onocencio for petitioner.Serverino B. Orlina for respondent Ngo Soo.No appearance for other respondents.
OZAETA, J.:
The petitioner Josefa Fabie is the usufructuary of the income of certain houses located at 372-376 Santo Cristo, Binondo, and 950-956 Ongpin, Santa Cruz, Manila, under the ninth clause of the will of the deceased Rosario Fabie y Grey, which textually reads as follows:
NOVENO. — Lego a mi ahijada menor de edad, Maria Josefa de la Paz Fabie, en usufructo vitalicio las rentas de las fincas situadas en la Calle Santo Cristo Numeros 372 al 376 del Disrito de Binondo, de esta Ciudad de Manila, descrita en el Certificado
Original de Titulo No. 3824; y en la Calle Ongpin, Numeros 950 al 956 del Distrito de Santa Cruz, Manila descrita en el Certificado Original de Titulo No. 5030, expedidos por el Registrador de Titulos de Manila, y prohibo enajene, hipoteque, permute o transfiera de algun modo mientras que ella sea menor de edad. Nombro a Serafin Fabie Macario, mi primo por linea paterna tutor de la persona y bienes de mi ahijada menor, Maria Josefa de la Paz Fabie.
The owner of Santo Cristo property abovementioned is the respondent Juan Grey, while those of the Ongpin property are other person not concern herein. Previous to September 1944 litigation arose between Josefa Fabie as plaintiff and Juan Grey as defendant and the owner of the Ongpin property as intervenors, involving the administration of the houses mentioned in clause 9 of the will above quoted (civil case No. 1659 of the Court of First Instance of Manila). That suit was decided by the court on September 2, 1944, upon a stipulation in writing submitted by the parties to and approved by the court. The pertinent portions of said stipulation read as follows:
(4) Heretofore, the rent of said properties have been collected at times by the respective owners of the properties, at other times by the usufructuary, and lastly by the defendant Juan Grey as agent under a written agreement dated March 31, 1942, between the owners of both properties and the usufructuary.
(5) When the rents were collected by the owners, the net amounts thereof were duly paid to the usufructuary after the expenses for real estate taxes, repairs and insurance premiums, including the documentary stamps, on the properties and the expenses of collecting the rents had been deducted, and certain amount set aside as a reserve for contingent liabilities. When the rents were collected by the usufructuary, she herself paid the expenses aforesaid. When the rents are collected by the defendant Juan Grey under the agreement of March 31, 1942, the net amounts thereof were duly paid to the usufructuary, after deducting and setting aside the items aforesaid, monthly, until the month of October 1943, when the usufructuary refused to continue with the agreement of March 31, 1942.
II. The parties hereto jointly petition the Court to render judgment adopting the foregoing as finding of facts and disposing that:
(8) Beginning with the month of September 1944, the usufructuary shall collect all the rents of the both the Sto. Cristo and the Ongpin properties.
(9) The usufructuary shall, at her own cost and expense, pay all the real estate taxes, special assessments, and insurance premiums, including the documentary stamps, and make all the necessary repairs on each of the properties, promptly when due or, in the case of repairs, when the necessary, giving immediate, written notice to the owner or owners of the property concerned after making such payment or repairs. In case of default on the part of the usufructuary, the respective owners of the properties shall have the right to make the necessary payment, including penalties and interest, if any, on the taxes and special assessments, and the repairs and in that event the owner or owners shall entitled to collect all subsequent rents of the property concerned until the amount paid by him or them and the expenses of collection are fully covered thereby, after which the usufructuary shall again collect the rents in accordance herewith.
(10) The foregoing shall be in effect during the term of the usufruct and shall be binding on the successors and assigns of each of the parties.
(11) Nothing herein shall be understood as affecting any right which the respective owners of the properties have or may have as such and which is not specifically the subject of this stipulation.
In June 1945 Josefa Fabie commenced an action of unlawful detainer against the herein respondent Ngo Boo Soo (who says that his correct name is Ngo Soo), alleging in her amended complaint that the defendant is occupying the premises located at 372-376 Santo Cristo on a month-to month rental payable in advance not latter than the 5th of each month; that she is the administratrix and usufructuary of said premises; "that the
defendant offered to pay P300 monthly rent payable in advance not later than the 5th of every month, beginning the month of April 1945, for the said of premises including the one door which said defendant, without plaintiff's consent and contrary to their agreement, had subleased to another Chinese, but plaintiff refused, based on the fact that the herein plaintiff very badly needs the said house to live in, as her house was burned by the Japanese on the occasion of the entry of the American liberators in the City and which was located then at No. 38 Flores, Dominga, Pasay; that defendant was duly notified on March 24 and April 14, 1945, to leave the said premises, but he refused"; and she prayed for judgment of eviction and for unpaid rentals.
The defendant answered alleging that he was and since 1908 had been a tenant of the premises in question, which he was using and had always used principally as a store and secondarily for living quarters; that he was renting it from its owner and administrator Juan Grey; "that plaintiff is merely the usufructuary of the income therefrom, and by agreement between her and said owner, which is embodied in a final judgment of the Court of First Instance of Manila, her only right as usufructuary of the income is to receive the whole of such income; that she has no right or authority to eject tenants, such right being in the owner and administrator of the house, the aforesaid Juan Grey, who has heretofore petitioned this Court for permission to intervene in this action; that plaintiff herein has never had possession of said property; that defendant's lease contract with the owner of the house is for 5-year period, with renewal option at the end of each period, and that his present lease due to expire on December 31, 1945 . . .; that on June 1, 1945, defendant made a written offer to plaintiff to compromise and settle the question of the amount of rent to be paid by defendant . . . but said plaintiff rejected the same for no valid reason whatever and instituted the present action; that the reason plaintiff desires to eject defendant from the property is that she wishes to lease the same to other persons for a higher rent, ignoring the fact that as usufructuary of the income of the property she has no right to lease the property; that the defendant has subleased no part of the house to any person whomsoever.
Juan Grey intervened in the unlawful detainer suit, alleging in his complaint in intervention that he is the sole and absolute owner of the premises in question; that the plaintiff Josefa Fabie is the usufructuary of the income of said premises; by virtue of a contract between him and the intervenor which will expire on December 31, 1945, with the option to renew it for another period of five years from and after said date; that under the agreement
between the intervenor and plaintiff Josefa Fabie in civil case No. 1659 of the Court of First Instance of Manila, which was approved by the court and incorporated in its decision of September 2, 1944, the only right recognized in favor of Josefa Fabie as usufructuary of the income of said premises is to receive the rents therefrom when due; and that as usufructuary she has no right nor authority to administer the said premises nor to lease them nor to evict tenants, which right and authority are vested in the intervenor as owner of the premises.
The municipal court (Judge Mariano Nable presiding) found that under paragraph 9 of the stipulation incorporated in the decision of the Court First Instance of Manila in civil; case No. 1659, the plaintiff usufructuary is the administratrix of the premises in question, and that the plaintiff had proved her cause. Judgment was accordingly rendered ordering the defendant Ngo Soo to vacate the premises and to pay the rents at the rate of P137.50 a month beginning April 1, 1945. The complaint in intervention was dismissed.
Upon appeal to the Court of First Instance of Manila the latter (thru Judge Arsenio P. Dizon) dismissed the case for the following reason: "The main issue *** is not a mere question of possession but precisely who is entitled to administer the property subject matter of this case and who should be the tenant, and the conditions of the lease. These issues were beyond the jurisdiction of the municipal court. This being case, this Court, as appellate court, is likewise without jurisdiction to take cognizance of the present case." A motion for reconsideration filed by the plaintiff was denied by Judge Jose Gutierrez David, who sustained the opinion of Judge Dizon.lawphi1.net
The present original action was instituted in this Court by Josefa Fabie to annul the order of the dismissal and to require to the Court of First Instance to try and decide the case on the merits. The petitioner further prays that the appeal of the intervenor Juan Grey be declared out of time on the ground that he receive copy of the decision on August 3 but did not file his notice of appeal until August 25, 1945.
1. The first question to determine is whether the action instituted by the petitioner Josefa Fabie in the municipal court is a purely possessory action and as such within the jurisdiction of said court, or an action founded on
property right and therefore beyond the jurisdiction of the municipal court. In other words, is it an action of unlawful detainer within the purview of section 1 of Rule 72, or an action involving the title to or the respective interests of the parties in the property subject of the litigation?
Said section 1 of Rule 72 provides that "a landlord, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such landlord, vendor vendee, or other person, may, at any time within one year after such unlawful deprivation of withholding of possession, bring an action in the proper inferior court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with the damages and costs."
It is admitted by the parties that the petitioner Josefa Fabie is the usufructuary of the income of the property in question and that the respondent Juan Grey is the owner thereof. It is likewise admitted that by virtue of a final judgment entered in civil case No. 1659 of the Court of First Instance of Manila between the usufructuary and the owner, the former has the right to collect all the rents of said property for herself with the obligation on her part to pay all the real estate taxes, special assessments, and insurance premiums, and make all necessary repairs thereon, and in case default on her part the owner shall have the right to do all those things, in which event he shall be entitled to collect all subsequent rents of the property concerned until the amount paid by him and the expenses of collection are fully satisfied, after which the usufructuary shall again collect the rents. There is therefore no dispute as to the title to or the respective interests of the parties in the property in question. The naked title to the property is to admittedly in the respondent Juan Grey, but the right to all the rents thereof, with the obligation to pay the taxes and insurance premiums and make the necessary repairs, is, also admittedly, vested in the usufructuary, the petitioner Josefa Fabie, during her lifetime. The only question between the plaintiff and the intervenor is: Who has the right to manage or administer the property — to select the tenant and to fix the amount of the rent? Whoever has that right has the right to the control and possession of the property in question, regardless of the title thereto. Therefore, the action is purely possessory and not one in any way involving the title to the property. Indeed, the averments and the prayer of the
complaint filed in the municipal court so indicate, and as a matter of fact the defendant Ngo Soo does not pretend to be the owner of the property, but on the contrary admits to be a mere tenant thereof. We have repeatedly held that in determining whether an action of this kind is within the original jurisdiction of the municipal court or of the Court of First Instance, the averments of the complaint and the character of the relief sought are primarily to be consulted; that the defendant in such an action cannot defeat the jurisdiction of the justice of the peace or municipal court by setting up title in himself; and that the factor which defeats the jurisdiction of said court is the necessity to adjudicate the question of title. (Mediran vs. Villanueva, 37 Phil., 752, 759; Medel vs. Militante, 41 Phil., 526, 529; Sevilla vs. Tolentino, 51 Phil., 333; Supia and Batioco vs. Quintero and Ayala, 59 Phil., 312; Lizo vs. Carandang, G.R. No. 47833, 2 Off. Gaz., 302; Aguilar vs. Cabrera and Flameño, G.R. No. 49129.)
The Court of First Instance was evidently confused and led to misconstrue the real issue by the complaint in intervention of Juan Grey, who, allying himself with the defendant Ngo Soo, claimed that he is the administrator of the property with the right to select the tenant and dictate the conditions of the lease, thereby implying that it was he and not the plaintiff Josefa Fabie who had the right to bring the action and oust the tenant if necessary. For the guidance of that court and to obviate such confusion in its disposal of the case on the merits, we deem it necessary and proper to construe the judgment entered by the Court of First Instance of Manila in civil case No. 1659, entitled "Josefa Fabie and Jose Carandang, plaintiffs, vs. Juan Grey, defendant, and Nieves G. Vda. de Grey, et al., intervenors-defendants" which judgment was pleaded by the herein respondents Juan Grey and Ngo Soo in the municipal court. According the decision, copy of which was submitted to this Court as Appendix F of the petition and as Annex 1 of the answer, there was an agreement, dated March 31, 1942, between the usufructuary Josefa Fabie and the owner Juan Grey whereby the latter as agent collected the rents of the property in question and delivered the same to the usufructuary after deducting the expenses for taxes, repairs, insurance premiums and the expenses of collection; that in the month of October 1943 the usufructuary refused to continue with the said agreement of March 31, 1942, and thereafter the said case arose between the parties, which by stipulation approved by the court was settled among them in the following manner: Beginning with the month of September 1944 the usufructuary shall collect all the rents of the property in question; shall, at her own cost and expense, pay all the real estate taxes, special assessments, and insurance
premiums, including the documentary stamps, and make all the necessary repairs on the property; and in case of default on her part the owner shall the right to do any or all of those things, in which event he shall be entitled to collect all subsequent rents until the amounts paid by him are fully satisfied, after which the usufructuary shall again collect the rents. It was further stipulated by the parties and decreed by the court that "the foregoing shall be in effect during the term of the usufruct and shall be binding on the successors and assigns of each of the parties."
Construing said judgment in the light of the ninth clause of the will of the deceased Rosario Fabie y Grey, which was quoted in the decision and by which Josefa Fabie was made by the usufructuary during her lifetime of the income of the property in question, we find that the said usufructuary has the right to administer the property in question. All the acts of administration — to collect the rents for herself, and to conserve the property by making all necessary repairs and paying all the taxes, special assessments, and insurance premiums thereon — were by said judgment vested in the usufructuary. The pretension of the respondent Juan Grey that he is the administrator of the property with the right to choose the tenants and to dictate the conditions of the lease is contrary to both the letter and the spirit of the said clause of the will, the stipulation of the parties, and the judgment of the court. He cannot manage or administer the property after all the acts of management and administration have been vested by the court, with his consent, in the usufructuary. He admitted that before said judgment he had been collecting the rents as agent of the usufructuary under an agreement with the latter. What legal justification or valid excuse could he have to claim the right to choose the tenant and fix the amount of the rent when under the will, the stipulation of the parties, and the final judgment of the court it is not he but the usufructuary who is entitled to said rents? As long as the property is properly conserved and insured he can have no cause for complaint, and his right in that regard is fully protected by the terms of the stipulation and the judgment of the court above mentioned. To permit him to arrogate to himself the privilege to choose the tenant, to dictate the conditions of the lease, and to sue when the lessee fails to comply therewith, would be to place the usufructuary entirely at his mercy. It would place her in the absurd situation of having a certain indisputable right without the power to protect, enforce, and fully enjoy it.
One more detail needs clarification. In her complaint for desahucio Josefa Fabie alleges that she needs the premises in question to live in, as her
former residence was burned. Has she the right under the will and the judgment in question to occupy said premises herself? We think that, as a corollary to her right to all the rent, to choose the tenant, and to fix the amount of the rent, she necessarily has the right to choose herself as the tenant thereof, if she wishes to; and, as she fulfills her obligation to pay the taxes and insure and conserve the property properly, the owner has no legitimate cause to complain. As Judge Nable of the municipal court said in his decision, "the pretension that the plaintiff, being a mere usufructuary of the rents, cannot occupy the property, is illogical if it be taken into account that that could not have been the intention of the testatrix."
We find that upon the pleadings, the undisputed facts, and the law the action instituted in the municipal court by the petitioner Josefa Fabie against the respondent Ngo Soo is one of unlawful detainer, within the original jurisdiction of said court, and that therefore Judges Dizon and Gutierrez David of the Court of First Instance erred in holding otherwise and in quashing the case upon appeal.
2. The next question to determine is the propriety of the remedy availed of by the petitioner in this Court. Judging from the allegations and the prayer of the petition, it is in the nature of certiorari and mandamus, to annul the order of dismissal and to require the Court of First Instance to try and decide the appeal on the merits. Under section 3 of Rule 67, when any tribunal unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, and there is no other plain, speedy, and adequate remedy in the ordinary course of law, it may be compelled by mandamus to do the act required to be done to protect the rights of the petitioner. If, as we find, the case before the respondent judge is one of unlawful detainer, the law specifically requires him to hear and decide that case on the merits, and his refusal to do so would constitute an unlawful neglect in the performance of that duty within section 3 of Rule 67. Taking into consideration that the law requires that an unlawful detainer case be promptly decided (sections 5 and 8, Rule 72),it is evident that an appeal from the order of dismissal would not be a speedy and adequate remedy; and under the authority of Cecilio vs. Belmonte (48 Phil., 243, 255), and Aguilar vs. Cabrera and Flameño (G.R. No. 49129), we hold that mandamus lies in this case.
3. The contention of the petitioner that the appeal of the intervenor Juan Grey was filed out of time is not well founded. Although said respondent received copy of the decision of the municipal court on August 3, 1945, according to the petitioner (on August 6, 1945, according to the said respondent), it appears from the sworn answer of the respondent Ngo Soo in this case that on August 8 he filed a motion for reconsideration, which was granted in part on August 18. Thus, if the judgment was modified on August 18, the time for the intervenor Juan Grey to appeal therefrom did not run until he was notified of said judgment as modified, and since he filed his notice of appeal on August 23, it would appear that his appeal was filed on time. However, we observe in this connection that said appeal of the intervenor Juan Grey, who chose not to answer the petition herein, would be academic in view of the conclusions we have reached above that the rights between him as owner and Josefa Fabie as usufructuary of the property in question have been definitely settled by final judgment in civil case No. 1659 of the Court of First Instance of Manila in the sense that the usufructuary has the right to administer and possess the property in question, subject to certain specified obligations on her part.
The orders of dismissal of the respondent Court of First Instance, dated September 22 and October 31, 1945, in the desahucio case (No. 71149) are set aside that court is directed to try and decide the said case on the merits; with the costs hereof against the respondent Ngo Soo.
Moran, C.J., Paras, Jaranilla, Feria, De Joya, Pablo, Perfecto, Bengzon, and Briones, JJ., concur.
Separate Opinions
HILADO, J., concurring:
I concur on the sole ground that, in my opinion, the amended complaint, dated July 12, 1945, filed by plaintiff in the Municipal Court of Manila, expressly alleges an agreement between her and defendant Ngo Boo Soo regarding the leasing of the premises in question, and that said amended complaint contains further allegations which, together with the allegations of said agreement, under a liberal construction (Rule 1, section 2, Rules of the Court), would constitute a prima facie showing that the case is one of unlawful detainer. Of course, this is only said in view of the allegations of the amended complaint, without prejudice to the evidence which the parties may adduce at the trial in the merits, in view of which the court will judge whether or not, in point of fact, the case is one of unlawful detainer.
PHILIPPINE JURISPRUDENCE – FULL TEXT The Lawphil Project - Arellano Law Foundation G.R. No. XnoX <> xdate, 2006 XCX
Republic of the PhilippinesSUPREME COURT
Manila
SECOND DIVISION
G.R. No. 152809 August 3, 2006
MERCEDES MORALIDAD, Petitioner, vs.SPS. DIOSDADO PERNES and ARLENE PERNES, Respondents.
D E C I S I O N
GARCIA, J.:
Under consideration is this petition for review on certiorari under
Rule 45 of the Rules of Court to nullify and set aside the following issuances of the Court of Appeals (CA) in CA-G.R. SP No. 61610, to wit:
1. Decision dated September 27, 2001, 1 affirming an earlier decision of the Regional Trial Court (RTC) of Davao City which reversed that of the Municipal Trial Court in Cities (MTCC), Davao City, Branch 1, in an action for unlawful detainer thereat commenced by the petitioner against the herein respondents; and
2. Resolution dated February 28, 2002, 2 denying petitioner’s motion for reconsideration.
At the heart of this controversy is a parcel of land located in Davao City and registered in the name of petitioner Mercedes Moralidad under Transfer Certificate of Title (TCT) No. T-123125 of the Registry of Deeds of Davao City.
In her younger days, petitioner taught in Davao City, Quezon City and Manila. While teaching in Manila, she had the good fortune of furthering her studies at the University of Pennsylvania, U.S.A. While schooling, she was offered to teach at the Philadelphia Catholic Archdiocese, which she did for seven (7) years. Thereafter, she worked at the Mental Health Department of said University for the next seventeen (17) years.
During those years, she would come home to the Philippines to spend her two-month summer vacation in her hometown in Davao City. Being single, she would usually stay in Mandug, Davao City, in the house of her niece, respondent Arlene Pernes, a daughter of her younger sister, Rosario.
Back in the U.S.A. sometime in 1986, she received news from Arlene that Mandug at the outskirts of Davao City was infested by NPA rebels and many women and children were victims of crossfire between government troops and the insurgents. Shocked and saddened about this development, she immediately sent money to
Araceli, Arlene’s older sister, with instructions to look for a lot in Davao City where Arlene and her family could transfer and settle down. This was why she bought the parcel of land covered by TCT No. T-123125.
Petitioner acquired the lot property initially for the purpose of letting Arlene move from Mandug to Davao City proper but later she wanted the property to be also available to any of her kins wishing to live and settle in Davao City. Petitioner made known this intention in a document she executed on July 21, 1986. 3 The document reads:
I, MERCEDES VIÑA MORALIDAD, of legal age, single, having been born on the 29th day of January, 1923, now actually residing at 8021 Lindbergh Boulevard, Philadelphia, Pennsylvania, U.S.A., wishes to convey my honest intention regarding my properties situated at Palm Village Subdivision, Bajada, Davao City, 9501, … and hereby declare:
1. That it is my desire that Mr. and Mrs. Diosdado M. Pernes may build their house therein and stay as long as they like;
2. That anybody of my kins who wishes to stay on the aforementioned real property should maintain an atmosphere of cooperation, live in harmony and must avoid bickering with one another;
3. That anyone of my kins may enjoy the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not inimical to the purpose thereof;
4. That anyone of my kins who cannot conform with the wishes of the undersigned may exercise the freedom to look for his own;
5. That any proceeds or income derived from the aforementioned properties shall be allotted to my nearest kins who have less in life in greater percentage and lesser percentage to those who are better
of in standing.
xxx xxx xxx
Following her retirement in 1993, petitioner came back to the Philippines to stay with the respondents’ on the house they build on the subject property. In the course of time, their relations turned sour because members of the Pernes family were impervious to her suggestions and attempts to change certain practices concerning matters of health and sanitation within their compound. For instance, Arlene’s eldest son, Myco Pernes, then a fourth year veterinary medicine student, would answer petitioner back with clenched fist and at one time hurled profanities when she corrected him. Later, Arlene herself followed suit. Petitioner brought the matter to the local barangay lupon where she lodged a complaint for slander, harassment, threat and defamation against the Pernes Family. Deciding for petitioner, the lupon apparently ordered the Pernes family to vacate petitioner’s property but not after they are reimbursed for the value of the house they built thereon. Unfortunately, the parties could not agree on the amount, thus prolonging the impasse between them.
Other ugly incidents interspersed with violent confrontations meanwhile transpired, with the petitioner narrating that, at one occasion in July 1998, she sustained cuts and wounds when Arlene pulled her hair, hit her on the face, neck and back, while her husband Diosdado held her, twisting her arms in the process.
Relations having deteriorated from worse to worst, petitioner, on July 29, 1998, lodged a formal complaint before the Regional Office of the Ombudsman for Mindanao, charging the respondent spouses, who were both government employees, with conduct unbecoming of public servants. This administrative case, however, did not prosper.
Then, on August 3, 1998, petitioner filed with the MTCC of Davao City an unlawful detainer suit against the respondent spouses. Petitioner alleged that she is the registered owner of the land on
which the respondents built their house; that through her counsel, she sent the respondent spouses a letter demanding them to vacate the premises and to pay rentals therefor, which the respondents refused to heed.
In their defense, the respondents alleged having entered the property in question, building their house thereon and maintaining the same as their residence with petitioner’s full knowledge and express consent. To prove their point, they invited attention to her written declaration of July 21, 1986, supra, wherein she expressly signified her desire for the spouses to build their house on her property and stay thereat for as long as they like.
The MTCC, resolving the ejectment suit in petitioner’s favor, declared that the respondent spouses, although builders in good faith vis-à-vis the house they built on her property, cannot invoke their bona fides as a valid excuse for not complying with the demand to vacate. To the MTCC, respondents’ continued possession of the premises turned unlawful upon their receipt of the demand to vacate, such possession being merely at petitioner’s tolerance, and sans any rental. Accordingly, in its decision dated November 17, 1999, 4 the MTCC rendered judgment for the petitioner, as plaintiff therein, to wit:
WHEREFORE, judgment is hereby rendered in favor of herein plaintiff and against the defendants, as follows:
a) Directing the defendants, their agents and other persons acting on their behalf to vacate the premises and to yield peaceful possession thereof to plaintiff;
b) Ordering defendants to pay P2,000.00 a month from the filing of this complaint until they vacate premises;
c) Sentencing defendants to pay the sum of P120,000.00 5 as attorney’s fees and to pay the cost of suit.
Defendants counterclaim are hereby dismissed except with respect to the claim for reimbursement of necessary and useful expenses which should be litigated in an ordinary civil actions. (sic)
Dissatisfied, the respondent spouses appealed to the RTC of Davao City.
In the meantime, petitioner filed a Motion for Execution Pending Appeal. The motion was initially granted by the RTC in its Order of February 29, 2000, but the Order was later withdrawn and vacated by its subsequent Order dated May 9, 2000 6 on the ground that immediate execution of the appealed decision was not the prudent course of action to take, considering that the house the respondents constructed on the subject property might even be more valuable than the land site.
Eventually, in a decision 7 dated September 30, 2000, the RTC reversed that of the MTCC, holding that respondents’ possession of the property in question was not, as ruled by the latter court, by mere tolerance of the petitioner but rather by her express consent. It further ruled that Article 1678 of the Civil Code on reimbursement of improvements introduced is inapplicable since said provision contemplates of a lessor-lessee arrangement, which was not the factual milieu obtaining in the case. Instead, the RTC ruled that what governed the parties’ relationship are Articles 448 and 546 of the Civil Code, explaining thus:
Since the defendants-appellees [respondents] are admittedly possessors of the property by permission from plaintiff [petitioner], and builders in good faith, they have the right to retain possession of the property subject of this case until they have been reimbursed the cost of the improvements they have introduced on the property.
Indeed, this is a substantive right given to the defendants by law, and this right is superior to the procedural right to [sic] plaintiff to immediately ask for their removal by a writ of execution by virtue of a decision which as we have shown is erroneous, and therefore invalid. (Words in brackets supplied),
and accordingly dismissed petitioner’s appeal, as follows:
WHEREFORE, in view of the foregoing, the Decision appealed from is REVERSED and declared invalid. Consequently, the motion for execution pending appeal is likewise denied.
Counter-claims of moral and exemplary damages claimed by defendants are likewise dismissed. However, attorney’s fees in the amount of fifteen thousand pesos is hereby awarded in favor of defendants-appellants, and against plaintiffs.
SO ORDERED. 8
Therefrom, petitioner went to the CA in CA-G.R. SP No. 61610.
On September 27, 2001, the CA, while conceding the applicability of Articles 448 and 546 of the Civil Code to the case, ruled that it is still premature to apply the same considering that the issue of whether respondents’ right to possess a portion of petitioner’s land had already expired or was already terminated was not yet resolved. To the CA, the unlawful detainer suit presupposes the cessation of respondents’ right to possess. The CA further ruled that what governs the rights of the parties is the law on usufruct but petitioner failed to establish that respondents’ right to possess had already ceased. On this premise, the CA concluded that the ejectment suit instituted by the petitioner was premature. The appellate court thus affirmed the appealed RTC decision, disposing:
WHEREFORE, premises considered, the instant petition for review is hereby denied for lack of merit. Accordingly, the petitioner’s complaint for Unlawful Detainer is DISMISSED.
SO ORDERED.
With the CA’s denial of her motion for reconsideration in its Resolution of February 28, 2002, petitioner is now before this Court raising the following issues:
I. WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISMISSING THE UNLAWFUL DETAINER CASE FOR BEING PREMATURE WHICH DECISION IS NOT IN ACCORDANCE WITH LAW AND JURISPRUDENCE.
II. WHETHER OR NOT THE COURT OF APPEALS ERRED IN APPLYING ARTICLES 448 AND 546 AND THE PROVISIONS OF THE CODE ON USUFRUCT INSTEAD OF ARTICLE 1678 OF THE CIVIL CODE.
The Court rules for the petitioner.
The Court is inclined to agree with the CA that what was constituted between the parties herein is one of usufruct over a piece of land, with the petitioner being the owner of the property upon whom the naked title thereto remained and the respondents being two (2) among other unnamed usufructuaries who were simply referred to as petitioner’s kin. The Court, however, cannot go along with the CA’s holding that the action for unlawful detainer must be dismissed on ground of prematurity.
Usufruct is defined under Article 562 of the Civil Code in the following wise:
ART. 562. Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides.
Usufruct, in essence, is nothing else but simply allowing one to enjoy another’s property. 9 It is also defined as the right to enjoy the property of another temporarily, including both the jus utendi and the jus fruendi, 10 with the owner retaining the jus disponendi or the power to alienate the same. 11
It is undisputed that petitioner, in a document dated July 21, 1986, supra, made known her intention to give respondents and her other kins the right to use and to enjoy the fruits of her property. There
can also be no quibbling about the respondents being given the right "to build their own house" on the property and to stay thereat "as long as they like." Paragraph #5 of the same document earmarks "proceeds or income derived from the aforementioned properties" for the petitioner’s "nearest kins who have less in life in greater percentage and lesser percentage to those who are better of (sic) in standing." The established facts undoubtedly gave respondents not only the right to use the property but also granted them, among the petitioner’s other kins, the right to enjoy the fruits thereof. We have no quarrel, therefore, with the CA’s ruling that usufruct was constituted between petitioner and respondents. It is thus pointless to discuss why there was no lease contract between the parties.
However, determinative of the outcome of the ejectment case is the resolution of the next issue, i.e., whether the existing usufruct may be deemed to have been extinguished or terminated. If the question is resolved in the affirmative, then the respondents’ right to possession, proceeding as it did from their right of usufruct, likewise ceased. In that case, petitioner’s action for ejectment in the unlawful detainer case could proceed and should prosper.
The CA disposed of this issue in this wise:
xxx Section 1, Rule 70 of the 1997 Rules of Civil Procedure, as amended, provides xxx
xxx xxx xxx
From the foregoing provision, it becomes apparent that for an action for unlawful detainer to prosper, the plaintiff [petitioner] needs to
prove that defendants’ [respondents’] right to possess already expired and terminated. Now, has respondents’ right to possess the subject portion of petitioner’s property expired or terminated? Let us therefore examine respondents’ basis for occupying the same.
It is undisputed that petitioner expressly authorized respondents o occupy portion of her property on which their house may be built.
Thus – "it is my desire that Mr. and Mrs. Diosdado M. Pernes may build their house therein and stay as long as they like." From this statement, it seems that petitioner had given the respondents the usufructuary rights over the portion that may be occupied by the house that the latter would build, the duration of which being dependent on how long respondents would like to occupy the property. While petitioner had already demanded from the respondents the surrender of the premises, this Court is of the opinion that the usufructuary rights of respondents had not been terminated by the said demand considering the clear statement of petitioner that she is allowing respondents to occupy portion of her land as long as the latter want to. Considering that respondents still want to occupy the premises, petitioner clearly cannot eject respondents. 12
We disagree with the CA’s conclusion of law on the matter. The term or period of the usufruct originally specified provides only one of the bases for the right of a usufructuary to hold and retain possession of the thing given in usufruct. There are other modes or instances whereby the usufruct shall be considered terminated or extinguished. For sure, the Civil Code enumerates such other modes of extinguishment:
ART. 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless a contrary intention clearly appears;
(2) By expiration of the period for which it was constituted, or by the fulfillment of any resolutory condition provided in the title creating the usufruct;
(3) By merger of the usufruct and ownership in the same person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting the usufruct;
(7) By prescription. (Emphasis supplied.)
The document executed by the petitioner dated July 21, 1986 constitutes the title creating, and sets forth the conditions of, the usufruct. Paragraph #3 thereof states "[T]hat anyone of my kins may enjoy the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not inimical to the purpose thereof" (Emphasis supplied). What may be inimical to the purpose constituting the usufruct may be gleaned from the preceding paragraph wherein petitioner made it abundantly clear "that anybody of my kins who wishes to stay on the aforementioned property should maintain an atmosphere of cooperation, live in harmony and must avoid bickering with one another." That the maintenance of a peaceful and harmonious relations between and among kin constitutes an indispensable condition for the continuance of the usufruct is clearly deduced from the succeeding Paragraph #4 where petitioner stated "[T]hat anyone of my kins who cannot conform with the wishes of the undersigned may exercise the freedom to look for his own." In fine, the occurrence of any of the following: the loss of the atmosphere of cooperation, the bickering or the cessation of harmonious relationship between/among kin constitutes a resolutory condition which, by express wish of the petitioner, extinguishes the usufruct.
From the pleadings submitted by the parties, it is indubitable that there were indeed facts and circumstances whereby the subject usufruct may be deemed terminated or extinguished by the occurrence of the resolutory conditions provided for in the title creating the usufruct, namely, the document adverted to which the petitioner executed on July 21, 1986.
As aptly pointed out by the petitioner in her Memorandum, respondents’ own evidence before the MTCC indicated that the relations between the parties "have deteriorated to almost an irretrievable level." 13 There is no doubt then that what impelled
petitioner to file complaints before the local barangay lupon, the Office of the Ombudsman for Mindanao, and this instant complaint for unlawful detainer before the MTCC is that she could not live peacefully and harmoniously with the Pernes family and vice versa.
Thus, the Court rules that the continuing animosity between the petitioner and the Pernes family and the violence and humiliation she was made to endure, despite her advanced age and frail condition, are enough factual bases to consider the usufruct as having been terminated.
To reiterate, the relationship between the petitioner and respondents respecting the property in question is one of owner and usufructuary. Accordingly, respondents’ claim for reimbursement of the improvements they introduced on the property during the effectivity of the usufruct should be governed by applicable statutory provisions and principles on usufruct. In this regard, we cite with approval what Justice Edgardo Paras wrote on the matter:
If the builder is a usufructuary, his rights will be governed by Arts. 579 and 580. In case like this, the terms of the contract and the pertinent provisions of law should govern (3 Manresa 215-216; se also Montinola vs. Bantug, 71 Phil. 449). 14 (Emphasis ours.)
By express provision of law, respondents, as usufructuary, do not have the right to reimbursement for the improvements they may have introduced on the property. We quote Articles 579 and 580 of the Civil Code:
Art. 579. The usufructuary may make on the property held in usufruct such useful improvements or expenses for mere pleasure as he may deem proper, provided he does not alter its form or substance; but he shall have no right to be indemnified therefor. He may, however, remove such improvements, should it be possible to do so without damage to the property. (Emphasis supplied.)
Art. 580. The usufructuary may set off the improvements he may
have made on the property against any damage to the same.
Given the foregoing perspective, respondents will have to be ordered to vacate the premises without any right of reimbursement. If the rule on reimbursement or indemnity were otherwise, then the usufructuary might, as an author pointed out, improve the owner out of his property. 15 The respondents may, however, remove or destroy the improvements they may have introduced thereon without damaging the petitioner’s property.
Out of the generosity of her heart, the petitioner has allowed the respondent spouses to use and enjoy the fruits of her property for quite a long period of time. They opted, however, to repay a noble gesture with unkindness. At the end of the day, therefore, they really cannot begrudge their aunt for putting an end to their right of usufruct. The disposition herein arrived is not only legal and called for by the law and facts of the case. It is also right.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the CA are REVERSED and SET ASIDE. Accordingly, the decision of the MTCC is REINSTATED with MODIFICATION that all of respondents’ counterclaims are dismissed, including their claims for reimbursement of useful and necessary expenses.
No pronouncement as to costs.
SO ORDERED.
SECOND DIVISION
[G.R. No. 105608, April 30, 2008]
TIRSO D. MONTEROSO, Petitioner, vs. COURT OF APPEALS, SOLEDAD, MONTEROSO-CAGAMPANG,
REYGULA MONTEROSO-BAYAN, BRION, PERFECTO L. CAGAMPANG, SR., SOFIA PENDEJITO VDA. DE,
MONTEROSO, FLORENDA, MONTEROSO, ALBERTO, MONTEROSO, HEIRS OF FABIAN, MONTEROSO, JR.,
REYNATO, MONTEROSO, RUBY MONTEROSO, MARLENE MONTEROSO-POSPOS, ADELITA MONTEROSO-BERENGUEL, and HENRIETO
MONTEROSO, Respondents.
[G.R. No. 113199]
SOFIA PENDEJITO VDA. DE, MONTEROSO, SOLEDAD, MONTEROSO-CAGAMPANG, PERFECTO L.
CAGAMPANG, SR., REYGULA MONTEROSO-BAYAN, FLORENDA MONTEROSO, ALBERTO MONTEROSO,
RUBY, MONTEROSO, MARLENE, MONTEROSO-POSPOS, HENRIETO, MONTEROSO, ADELITA MONTEROSO-
BERENGUEL, and REYNATO MONTEROSO, Petitioners, vs. COURT OF APPEALS and TIRSO D. MONTEROSO,
Respondents.
D E C I S I O N
VELASCO JR., J.:
The Case
Before us are two petitions for review under Rule 45, the first docketed as G.R. No. 105608, and the second docketed as G.R. No. 113199, both assailing the Decision[1] dated March 31, 1992 of the Court of Appeals (CA) in CA-G.R. CV No. 15805 which modified the June 9, 1987 Decision[2] of the Regional Trial Court (RTC), Branch 4 in Butuan City in Civil Case Nos. 1292 and 1332.
The Facts
It is not unusual. Acrimonious litigation between and among siblings and immediate relatives over inheritance does occur. It is unfortunate when the decedent had, while still alive, taken steps to precisely avoid a bruising squabble over inheritance.
In a sense, Don Fabian B. Monteroso, Sr., a former justice of the peace and municipal mayor of Cabadbaran, Agusan del Norte, started it all. During his lifetime, Don Fabian married twice and sired eight children, four from each union.
In 1906, Don Fabian married Soledad Doldol. Out of this marriage were born Soledad, Reygula, Benjamin, and Tirso. On April 8, 1927, Soledad Doldol Monteroso passed away.
A little over a year later, Don Fabian contracted a second marriage with Sofia Pendejito. From this union were born Florenda, Reynato, Alberto, and Fabian, Jr.
After the death of his first wife, but during the early part of his second marriage, Don Fabian filed before the Court of First Instance (CFI) of Agusan an intestate proceeding for the estate of his deceased first wife, Soledad D. Monteroso, docketed as Special Proceeding (SP) No. 309, apparently to obviate any dispute over the inheritance of his children from his first marriage. Subsequently, the CFI received--and later approved per an Orden[3] (Order) dated March 11, 1936--a Proyecto de Particion[4] (Project of Partition) dated February 21, 1935.
The partition in SP No. 309 covered Parcels F-1 to F-5, and adjudicated to Don Fabian the whole of Parcels F-1, F-2, and F-3, and one-half of Parcel F-5, while the intestate estate of Soledad D. Monteroso comprised the whole of Parcel F-4 and one-half of Parcel F-5. The intestate estate of Soledad D. Monteroso was partitioned and distributed to her four children in equal shares.
Subsequently, a Mocion[5] (Motion) was filed for the delivery to Soledad D. Monteroso's four children, her legal heirs, their respective shares in her intestate estate, as adjudicated among them under the duly CFI-approved Project of Partition.
In the meantime, the children of Don Fabian from his first marriage married accordingly: The eldest, Soledad to Atty. Perfecto Cagampang, Sr.; Reygula to Jose Bayan; Benjamin to Mauricia Nakila; and Tirso to Melecia Taña. Benjamin died on February 1, 1947 leaving behind four children with wife Nakila, namely: Ruby, Marlene, Adelita, and Henrieto. A year and a half later, or on October 26, 1948, Don Fabian also passed away.
Before and shortly after Don Fabian's demise, conveyances involving certain of parcels thus mentioned were purportedly made.
The following is an illustration of the lineal relation of the parties or the family tree of the direct descendants of Don Fabian from his two marriages:
This brings us to the objects of the squabble: the conjugal patrimonies of Don Fabian from his two successive marriages.
During the lifetime of Don Fabian, the following properties were acquired, viz:
PARCEL F-ONE
A parcel of coconut plantation on sitio Pandanon, Cabadbaran, Agusan described as follows: North by the property of Telesforo Ago and Gregorio Cupay; East by Miguel Y Climaco Cabonce, Isidro Maamo and Buenaventura Sandigan and Pandanon River, and West by Gregorio Axamin, Alex Fores and Ventura Sandigan with a superficial extension of 10 has. 62 ares and 42 centares.
PARCEL F-TWO
A parcel of coconut land situated on sitio Pandanon, Cabadbaran, Agusan, with a superficial extension of 6 hectares, 50 ares bearing Tax No. 14801 of the Municipality of Cabadbaran, Agusan, x x x.
PARCEL F-THREE
A parcel of coconut land under Tax No. 17167 situated on sitio Calibunan, Cabadbaran, Agusan with superficial extension of 8
hectares and 34 centares x x x.
PARCEL F-FOUR
A parcel of coconut land under Tax No. 14600 situated on sitio Pandanon, Cabadbaran, Agusan, with a superficial extension of 27 hectares, 96 ares and 28 centares x x x.
PARCEL F-FIVE
A parcel of residential lot under Tax No. 18477 situated within the Poblacion of the Municipality of Cabadbaran, Agusan, with a house of strong materials found on the same lot with a superficial extension of 660 square meters x x x.
PARCEL F-SIX
A parcel of residential lot under Tax No. 5374 situated within the Poblacion of the Municipality of Cabadbaran, Agusan, with a superficial extension of 3,890 square meters x x x.
PARCEL F-SEVEN
A parcel of coconut and corn land under Tax No. 1769 situated at Ambahan, Tubay, Agusan, with a superficial extension of 8 hectares x x x.
PARCEL F-EIGHT
A parcel of coconut land situated at Ambahan, Tubay, Agusan, under Tax No. 2944, with a superficial extension of 7 hectares, 59 ares and 96 centares x x x.[6]
PARCEL S-ONE
A parcel of land situated at Tagbongabong, Cabadbaran, Agusan under Tax Dec. No. 5396 with an area of 24 hectares more or less x x x.
PARCEL S-TWO
A parcel of coconut land situated at Dal-as, Bay-ang, Cabadbaran, Agusan under Tax No. 69 with an area of 24 hectares more or less x x x.
PARCEL S-THREE
A parcel of coconut land situated at Pandanon, Mabini, Cabadbaran, Agusan, under Tax No. 21639 with an area of 1.4080 hectares more or less x x x.
PARCEL S-FOUR
A parcel of land situated at Mabini, Cabadbaran, Agusan under Tax No. 3367 with an area of 1,000 sq. m. bounded x x x.[7]
The "F" designation signified that the covered properties were acquired during the first marriage, to distinguish them from those acquired during the second marriage which are designated as "S" properties.
On July 28, 1969, the children of the late Benjamin D. Monteroso, namely: Ruby Monteroso, Marlene M. Pospos, Henrieto Monteroso, and Adelita Monteroso-Berenguel, filed with the RTC a Complaint for Recovery of Property with Damages against their uncle, Tirso D. Monteroso. Docketed as Civil Case No. 1292, and later raffled to Branch 4 of the court, the complaint involved a portion of Parcel F-4, described in the Project of Partition, as follows:(1) One parcel of coconut land with the improvements thereon existing, Tax No. 14600 with a superficial extension of 6 hectares, 99 ares and 32 centares, bounded as follows: on the North, Regula Monteroso; on the East by the Provincial Road Butuan-Cabadbaran; on the Sourth Tirso Monteroso and on the West Diego Calo.[8]
As the heirs of Benjamin alleged in their complaint, their uncle, Tirso, was entrusted with the above-described one-fourth portion of Parcel F-4 as part of the share from the estate of Soledad D. Monteroso allotted to their father per SP No. 309. However, their uncle refused to surrender and deliver the same when they demanded such delivery upon their reaching the majority age.
Tirso countered that the portion pertaining to Benjamin was never
entrusted to him; it was in the possession of their sister, Soledad Monteroso-Cagampang, who was not entitled to any share in Parcel F-4, having previously opted to exchange her share in said property for another parcel of land, i.e., Parcel F-7, then being occupied by her.
On April 14, 1970, Tirso, in turn, filed a Complaint for Partition and Damages with Receivership docketed as Civil Case No. 1332, involving 12 parcels of land (i.e., Parcels F-1 to F-8 and Parcels S-1 to S-4, mentioned above) against his stepmother, Pendejito, and all his full and half-siblings and/or their representatives. The complaint in Civil Case No. 1332 was subsequently amended to include Perfecto, as co-defendant, and Pendejito, as guardian ad litem for the minor children of Fabian P. Monteroso, Jr., who died in 1970 after the filing of the complaint.
In Civil Case No. 1332, Tirso, inter alia, alleged the following: (1) the aforementioned 12 parcels of land belong to the conjugal partnerships of the first and second marriages contracted by Don Fabian; (2) SP No. 309, which purportedly judicially settled the intestate estate of his mother, is null and void for the reason that the project of partition failed to comprehend the entire estate of the decedent as Parcels F-6, F-7, and F-8 were excluded, thereby depriving Tirso of his one-fourth share or legitime over the said three parcels of land; and (3) Parcels S-1 to S-4, having been acquired during the second marriage of Don Fabian, are not paraphernal properties of Sofia Pendejito Vda. de Monteroso.
Answering, the defendants in Civil Case No. 1332 contended that Don Fabian acquired Parcel F-6 during the second marriage, while Parcels F-7 and F-8 were Don Fabian's exclusive properties having been acquired through a donation from the heirs of one Benito Tinosa. They further maintained the validity of the judicial partition under SP No. 309 which operates as res judicata insofar as Parcels F-1 to F-5 are concerned. In particular, they asserted that Parcels F-1, F-2, F-3, and one-half of F-5 were adjudicated to Don Fabian as his share in the conjugal partnership of the first marriage, while Parcel F-4 and the other half of Parcel F-5 were equally divided among the four children of the first marriage; that during his lifetime, Don Fabian sold Parcels F-1, F-2, F-3, F-7, and F-8 to
Soledad Monteroso-Cagampang; that Soledad Monteroso-Cagampang, Tirso D. Monteroso, and Mauricia Nakila Vda. de Benjamin Monteroso donated Parcel F-6 to Reygula Monteroso-Bayan; and that Parcels S-1 to S-4 are truly paraphernal properties of Sofia Pendejito Vda. de Monteroso as Parcel S-1 was acquired by her through a homestead patent, Parcel S-2 through adverse possession, and Parcels S-3 and S-4 by purchase.
The Initial Ruling of the RTC
Involving practically the same properties and parties, Civil Case Nos. 1292 and 1332 were consolidated and jointly heard. After a long drawn-out trial spanning almost 15 years, with six different judges successively hearing the case, the RTC, presided by Judge Miguel Rallos, rendered on July 22, 1985 a Decision,[9] dismissing Civil Case No. 1292 on the ground of failure to state a cause of action, but finding, in Civil Case No. 1332, for Tirso.
What appears to be a victory for Tirso was, however, short-lived. Acting on four separate motions for reconsideration duly filed by the various defendants in Civil Case No. 1332, a new judge, who took over the case from Judge Rallos who inhibited himself from the case, rendered a new decision.
The Subsequent Ruling of the RTC
Dated June 9, 1987, the new Decision set aside the July 22, 1985 RTC Decision of Judge Rallos and gave due course to both Civil Case Nos. 1292 and 1332. In full, the fallo of the new decision reads:WHEREFORE, premises considered, both complaints in Civil Cases No. 1292 and 1332 are hereby given due course and judgment is hereby rendered as follows:
1. Declaring, confirming and ordering that Lot 380, Pls-736 located at Pandanon, Cabadbaran, belongs to the children of first marriage and partitioned as per subdivision survey map made by Geodetic Engineer Antonio Libarios, Exh. `7', page 72 of the records as follows:
(a.)Lot 380-A, Share of Soledad Monteroso Cagampang with an area of 5.3376 hectares, with technical description therein;
(b.)
Lot 380-B, Share of Reygula Monteroso Bayan with an area of 5.3376 hectares, with technical description therein;
(c.)Lot 380-C, Share of the Heirs of Benjamin D. Monteroso with an area of 5.3376 hectares with technical description therein;
(d.)
Lot 380-D, Share of Tirso D. Monteroso with an area of 5.3376 hectares and Lot 351, Pls-736 with an area of 6,099 sq. meters, with both technical description therein;2.
3. It is hereby ordered that Tirso D. Monteroso must deliver, return, relinquish, cede, waive and/or quit claim immediately the area of 3.7815 hectares being portion of Lot 380-C, Pls-736 indicated in the subdivision survey plan by Engr. Libarios, page 72, Records, Civil Case No. 1292, Folio 2, Exh. "V", to the Heirs of Benjamin D. Monteroso who are absolute owners of Lot 380-C, Pls-736 and to pay, return and deliver immediately to the said Heirs of Benjamin D. Monteroso the net income in arrears from 1948 to 1983, the total sum of Two Hundred Sixty Thousand Eight Hundred Forty Four and 70/100 (P260,844.70) Pesos with interest of 12% per annum compounded annually from January 1, 1984 up to the present and until fully paid;
4. It is hereby ordered that Reygula Monteroso Bayan must deliver, return, relinquish, cede, waive and/or quit claim immediately the area of 1.6128 hectares which is part of Lot 380-C, Pls-736, indicated in the subdivision survey plan by Engr. Libarios, page 72, Records (Civil Case No. 1292, Folio 2), Exh. `V', to the Heirs of Benjamin D. Monteroso who are the absolute owners of Lot 380-C, Pls-736 and to pay, return and deliver immediately to the said Heirs of Benjamin D. Monteroso the net income in arrears from 1948 to 1983 the total sum of One Hundred Six Thousand Nine Hundred Sixty and 40/100 (P106,960.40)
Pesos with interest of 12% per annum compounded annually from January 1, 1984 up to the present and until fully paid;
5. It is hereby ordered that Soledad Monteroso Cagampang must deliver, return, relinquish, cede, waive and/or quit claim immediately the area of 1.0929 hectares being portion of Lot 380-C, Pls-736, indicated in the subdivision survey plan by Engr. Libarios, page 72, Records (Civil Case No. 1292, Folio 2), Exh. `V', to her sister Reygula Monteroso Bayan who is the absolute owner of Lot 380-C, Pls-736 and to pay, return and deliver immediately to the said Reygula Monteroso Bayan the net income in arrears from 1948 to 1983, the total sum of Seventy Seven Thousand Six Hundred Twenty Five and 96/100 (P77,625.96) Pesos with interest of 12% per annum compounded annually from January 1, 1984 up to the present and until fully paid, subject to deduction of whatever cash advances, if any, was ever received by Reygula M. Bayan.
6. The three alleged Absolute Sale, Exh. `C', `D' and `E' with all its submarkings are declared fictitious, simulated and no consideration. It can never be considered a donation because aside from being inofficious and impairing the legitime of other heirs, the vendee had not signed therein which could be considered acceptance and above all, these documents were prepared and acknowledged by Notary Public squarely disqualified and highly prohibited. Therefore, all are declared null and void and of no legal effect.
So, parcels F-1, F-2, F-3, F-6, F-7 and F-8 [remain] as part of the intestate estate of Don Fabian B. Monteroso, Sr.
7. The Register of Deeds and the Provincial Assessor, both in the Province of Agusan del Norte are hereby ordered to cancel as the same are cancelled and nullified, all transfer of certificates and tax declarations now in the name of Soledad Monteroso de Cagampang and Atty. Perfecto L.
Cagampang, Sr. which parcels of land originally were registered and declared in the name of Don Fabian B. Monteroso, Sr., and to register and declare again in the name of Heirs of Don Fabian B. Monteroso, Sr., more particularly the following:
(a.)[TCT No. RT-203] (420) for Lot 432, Cad. 121, with an area of 10.0242 hectares
under Tax Dec. No. 02-... , Series of 1980, PIN-02-019-05-050 known as Parcel F-1;
(b.)
TCT No. RT-205 (424) for Lot 100, Cad. 121, with an area of
1.9083 hectares under Tax Dec. No. 02-019-0488 , Series of 1980, PIN-02-019-08-002 known as F-2;
(c.)TCT No. RT-204 (423) for Lot 103, Cad. 121, with an area of
2.8438 hectares under Tax Declaration No. 02-019-0335 , Series of 1980, PIN-02-019-08-017 known as F-2;
(d.)
Parcel of coconut land located at Poblacion, Cabadbaran, known
as F-3 with area of 6.3100 hectares under Tax Dec. No.
02-00... , Series of 1980 and PIN-02-001-30-027;
(e.)Residential Lot, known as F-5 located at Poblacion, Cabadbaran under Tax Dec. No. 18447 then under Tax Dec. No. 1922, containing an area of 660 sq. meters bounded on the North by Washington Street; on the East by Progresso Street; on the South by Rizal Street; and on the West by Ramon Cabrera.
(f.) Residential Lot known as F-6 located at Poblacion under Tax Dec. No. 5374, Series of 1949 and Tax Dec. No. 499, Series of 1954, consisting of 3,890 sq. meters bounded as follows:
Nort - Andres Atega
h South
- Rill
East - Luis Jamboy now Celestino Udarbe,Sixto Ferrer and New Road
West - Atega Street;
(g.)
Coconut land known as F-7, located at Ambajan, Tubay, Agusan del Norte under Tax Dec. No. 1769, Series of 1955 and Tax Dec. No. 10-03-0273, Series of 1980 with an area of [8.000] hectares;
(h.)
Parcel of coconut land known as F-8, located at Ambajan, Tubay, Agusan del Norte with an area of 7.5996 hectares under Tax Dec. No. 2944 and Tax Dec. No. 10-03-0273, Series of 1980;
(i.) Parcel of S-1, located at Tagbongabong, Cabadbaran under Tax Dec. No. 11506, Series of 1963 with an area of 24 hectares in the name of Sofia Vda. de Monteroso;
(j.) Parcel of S-2, located at Dal-as, Bay-ang, Cabadbaran, under Tax Dec. No. 1888, Series of 1948, Tax Dec. No. 669, Series of 1952, and subsequently transferred in fraud of other heirs, in the name of Florenda P. Monteroso under Tax Dec. No. 11507, Series of 1964, Tax Dec. No. 3381, Series of 1972, Tax Dec.
No. 5036, Series of 1974, Tax Dec. No. 02-..., Series of 1980;
(k.)
Parcel of S-3, located at Pandanon, Mabini, Cabadbaran, under Tax Dec. No. 5373, Series of 1949 with an area of 1.4080 hectares and bounded as follows:
North
- Pandanon River
South
- Crisanto Dolleroso
East - Pandanon RiverWest - Pandanon River and Peregrino Aznar;
(l.) Parcel S-4, located at Mabini, Cabadbaran, under Tax Dec. No. 3367 with an area of 1.6500 hectares and bounded as follows:
North
- Hrs. of G. Corvera
South
- C. Vda. de Alburo
East - Ellodoro DellerosoWest - A. Ventura
8. It is hereby declared that upon the death of Don Fabian B. Monteroso, Sr. on March 26, 1948, the following are the properties belonging to his intestate estate:
(a.)Whole parcel Lot 432, F-1;(b.)
Whole parcels Lot 100 and 103, F-2;
(c.)Whole parcel cocoland, Calibunan, F-3;(d.)
One-half (1/2) parcel F-5;
(e.)One-half (1/2) parcel F-6;(f.) One-half (1/2) parcel F-7;(g.)
One-half (1/2) parcel F-8;
(h.)
One-half (1/2) parcel S-1;
(i.) One-half (1/2) parcel S-2;(j.) One-half (1/2) parcel S-3;(k.)
One-half (1/2) parcel S-4.
9. It is hereby ordered that Lot 432 under TCT [No.] RT-203 (420) with an area of 10.0242 hectares under Tax Dec. No.
02-018-0224 (1980) is hereby divided into nine (9) equal shares for the eight (8) children of Don Fabian B. Monteroso and the one-ninth (1/9) share be held in usufruct by the widow Sofia Pendejito Monteroso during her lifetime.
Sofia Pendejito Monteroso being in possession and
enjoying the fruits or income of F-1 is hereby ordered to pay and deliver immediately to the following heirs the corresponding amount of net income of F-1, Lot 432, from 1948 to 1983:
(a.)To Soledad Monteroso Cagampang - P78,521.32(b.)
To Reygula Monteroso Bayan - P78,521.32
(c.)To Hrs. of Benjamin D. Monteroso - P78,521.32(d.)
To Tirso D. Monteroso - P78,521.32
(e.)To Florenda P. Monteroso - P78,521.32(f.) To Reynato P. Monteroso - P78,521.32(g.)
To Alberto P. Monteroso - P78,521.32
(h.)
To Hrs. of Fabian P. Monteroso, Jr. - P78,521.32
10. The above-mentioned [amounts] shall be subject to deduction for whatever cash advance any heir may have received. Then the net balance of said [amounts] shall be subject to interest at the rate of twelve percent (12%) per annum compounded annually from January 1, 1984 to the present until fully paid.
11. It is hereby ordered that Lot 100 under [TCT No. RT-205] (424) with an area of 1.9083 hectares under Tax Dec. No.
02-... , Series of 1980 and Lot No. 103 under [TCT No. RT-204] (423) with an area of 2.8438
hectares and under Tax Dec. No. 02-019-0335 , Series of 1980, [both known as Parcel F-2,] shall be divided into nine (9) equal shares for the eight (8) children of Fabian B. Monteroso, Sr. and one-ninth (1/9) share shall be held in usufruct by the widow, Sofia P. Monteroso, during her lifetime.
Soledad Monteroso Cagampang and Atty. Perfecto L. Cagampang, Sr. are ordered to deliver to [their] co-heirs their shares in these parcels of land, F-2, free from any lien
and encumbrances whatsoever, and to pay each of them the net income in arrears from 1948 to 1983, namely:
(a.)To Reygula Monteroso Bayan - P34,976.85(b.)
To Hrs. of Benjamin D. Monteroso - P34,976.85
(c.)To Tirso D. Monteroso - P34,976.85(d.)
To Florenda P. Monteroso - P34,976.85
(e.)To Reynato P. Monteroso - P34,976.85(f.) To Alberto P. Monteroso - P34,976.85(g.)
To Hrs. of Fabian P. Monteroso, Jr. - P34,976.85
(h.)
To Sofia P. Monteroso (usufruct) - P34,976.85
12. The above-mentioned [amounts] shall be subjected to deduction of whatever amount any heir may have received by way of cash advances.
The net amount shall be subjected to an interest at the rate of twelve percent (12%) per annum compounded annually from January 1, 1984 to the present or until fully paid.
13. Soledad Monteroso Cagampang and Atty. Perfecto L. Cagampang, Sr. being in possession and enjoying the fruits and income of Parcel F-3, are hereby ordered to pay to the following heirs, the net income in arrears from 1948 to 1983:
(a.)To Reygula Monteroso Bayan - P49,727.35(b.)
To Hrs. of Benjamin D. Monteroso - P49,727.35
(c.)To Tirso D. Monteroso - P49,727.35(d.)
To Florenda P. Monteroso - P49,727.35
(e.)To Reynato P. Monteroso - P49,727.35(f.) To Alberto P. Monteroso - P49,727.35(g.)
To Hrs. of Fabian P. Monteroso, Jr. - P49,727.35
(h. To Sofia P. Monteroso (usufruct) - P49,727.35
)14. The above-mentioned [amounts] shall be subject to
deduction for whatever cash advance, if any, such heir may have received. Then the net [amounts] shall be subject to interest at the rate of twelve percent (12%) per annum compounded annually from January 1, 1984 to the present until fully paid.
Soledad Monteroso Cagampang and Atty. Perfecto L. Cagampang, Sr. are both ordered to deliver to the above-mentioned co-heirs their respective shares free from any lien and encumbrances whatsoever.
15. Parcels F-5, F-6, F-7 and F-8 are declared real properties belonging to the first marriage. Hence one-half (1/2) of each of these four parcels shall equally be divided by the four (4) children of the first marriage and the other half must be divided into nine (9) equal shares for the eight (8) children of Fabian B. Monteroso, Sr., and one-ninth (1/9) shall be held in usufruct by the widow, Sofia Pendejito Vda. de Monteroso.
Therefore, it is hereby ordered that F-6 is divided as follows:
(a.)To Soledad Monteroso Cagampang - - - - 702 sq. m.(b.)
To Reygula Monteroso Bayan - - - - - - - 702 sq. m.
(c.)To Hrs. of Benjamin D. Monteroso - - - - 702 sq. m.(d.)
To Tirso D. Monteroso - - - - - - - - - - - - 702 sq. m.
(e.)To Florenda P. Monteroso - - - - - - - - - - 216 sq. m.(f.) To Reynato P. Monteroso - - - - - - - - - - - 216 sq. m.(g.)
To Alberto P. Monteroso - - - - - - - - - - - 216 sq. m.
(h.)
To Hrs. of Fabian Monteroso, Jr. - - - - - - 216 sq. m.
(i.) To Sofia P. Monteroso - - - - - - - - - - - - - 216 sq. m.16. It is hereby ordered, that Soledad Monteroso Cagampang
and Atty. Perfecto L. Cagampang, Sr. must deliver to all
heirs their respective shares on F-7 and F-8 including usufruct of Sofia P. Monteroso as declared in paragraph five (5) and in addition, must pay and deliver the net income in arrears from 1948 to 1983, summarized as follows:
(a.)To Reygula Monteroso Bayan - - - - - P189,665.88(b.)
To Hrs. of Benjamin D. Monteroso - - P189,665.88
(c.)To Tirso D. Monteroso - - - - - - - - - - P189,665.88(d.)
To Florenda P. Monteroso - - - - - - - - P 58,358.73
(e.)To Reynato P. Monteroso - - - - - - - - - P 58,358.73(f.) To Alberto P. Monteroso - - - - - - - - - P 58,358.73(g.)
To Hrs. of Fabian Monteroso, Jr. - - - - P 58,358.73
(h.)
To Sofia P. Monteroso (usufruct) - - - - P 58,358.73
17. all with interest at the rate of twelve percent (12%) per annum compounded annually from January 1, 1984 to the present until fully paid. However, it is subject to deduction of whatever cash advances, if ever any heir, may have received.
18. The Deed of Donation in 1948, Exh. "F", over parcel known as F-5, is declared null and void because the same was prepared and acknowledged before a Notary Public disqualified and prohibited to do so under Notarial Law (Barretto vs. Cabreza, 33 Phil. Reports 112). Hence, the transfer of tax declaration is hereby ordered cancelled and the same must be declared again in the name of the Heirs of Fabian B. Monteroso, Sr. and ordered partitioned in the proportion stated in paragraph eleven (11) hereof.
19. Parcels of land known as S-1, S-2, S-3 and S-4 are declared conjugal properties of the second marriage. Hence, one-half (1/2) thereof belongs to Sofia Pendejito Monteroso and one-half (1/2) shall be equally divided into nine (9) shares for the eight (8) children of Don Fabian B. Monteroso, Sr. where the one-ninth (1/9) shall be held in
usufruct by Sofia P. Monteroso during her lifetime.
20. For the net income in arrears of S-1 located at Tagbongabong, Cabadbaran, from 1948 to 1983, Sofia Pendejito Monteroso is hereby ordered to pay and deliver to the following heirs the corresponding share:
(a.)To Soledad Monteroso Cagampang - - P93,998.12(b.)
To Reygula Monteroso Bayan - - - - - P93,998.12
(c.)To Hrs. of Benjamin D. Monteroso - - P93,998.12(d.)
To Tirso D. Monteroso - - - - - - - - - - P93,998.12
(e.)To Florenda P. Monteroso - - - - - - - - P93,998.12(f.) To Reynato P. Monteroso - - - - - - - - P93,998.12(g.)
To Alberto P. Monteroso - - - - - - - - - P93,998.12
(h.)
To Hrs. of Fabian P. Monteroso, Jr. - - P93,998.12
21. However, all these amounts shall be subject to deduction, if any cash advance was ever made or received by any heir.
The above-mentioned [amounts are] subject to an interest at the rate of twelve percent (12%) compounded annually from January 1, 1948 to the present until fully paid.
22. The alleged Deed of Absolute Sale executed by Sofia P. Monteroso in favor of Florenda P. Monteroso over a coconut land located at Dal-as, Bay-ang, Cabadbaran, consisting of 24 hectares is hereby declared null and void being in fraud of other heirs. It is clearly inofficious and impairs the legitime of her brothers, sisters and nephews and nieces. Therefore, the tax declaration in the name of Florenda P. Monteroso under Tax Dec. No. 11507, Series of 1964, Tax Dec. No. 3381, Series of 1972, Tax Dec. No.
5036, Series of 1974 and Tax Dec. No. 02-006-0047 , PIN-02-006-02-002 are hereby ordered cancelled and the said land shall be declared again in the name of Heirs of Fabian B. Monteroso.
Sofia Pendejito Monteroso is not required to render accounting as to the income of S-2 because the coconut trees therein were planted by her while being already a widow. One-half (1/2) of the land where the coconut trees are planted shall be her share and the other one-half (1/2) shall be divided into nine (9) shares for the eight (8) children of Fabian B. Monteroso including her 1/9 usufruct thereon.
23. Sofia Pendejito Monteroso is hereby ordered to pay and deliver immediately the net income in arrears of parcel S-3 located at Pandanon to the following heirs with the corresponding amount:
(a.)To Soledad Monteroso Cagampang - - P49,349.02(b.)
To Reygula Monteroso Bayan - - - - - P49,349.02
(c.)To Hrs. of Benjamin D. Monteroso - - P49,349.02(d.)
To Tirso D. Monteroso - - - - - - - - - - P49,349.02
(e.)To Florenda P. Monteroso - - - - - - - - P49,349.02(f.) To Reynato P. Monteroso - - - - - - - - P49,349.02(g.)
To Alberto P. Monteroso - - - - - - - - - P49,349.02
(h.)
To Hrs. of Fabian P. Monteroso, Jr. - - P49,349.02
24. However, [the] above-mentioned [amounts] shall be subject to deductions, if any cash advance was ever made or received by any heir.
Then the net amount receivable shall be subject to an interest at the rate of twelve percent (12%) compounded annually from January 1, 1984 to the present until fully paid.
25. For the net income in arrears of parcel S-4, located at Mabini, Cabadbaran, from 1948 to 1983, Sofia P. Monteroso is hereby ordered to pay and deliver to the
following heirs their corresponding shares:
(a.)To Soledad Monteroso Cagampang - - P6,477.54(b.)
To Reygula Monteroso Bayan - - - - - P6,477.54
(c.)To Hrs. of Benjamin D. Monteroso - - P6,477.54(d.)
To Tirso D. Monteroso - - - - - - - - - - P6,477.54
(e.)To Florenda P. Monteroso - - - - - - - - P6,477.54(f.) To Reynato P. Monteroso - - - - - - - - P6,477.54(g.)
To Alberto P. Monteroso - - - - - - - - - P6,477.54
(h.)
To Hrs. of Fabian P. Monteroso, Jr. - - P6,477.54
26. However, all these amounts shall be subject to deductions, if any cash advance was ever made or received by any heir.
The above-mentioned amount is subject to an interest at the rate of twelve percent (12%) compounded annually from January 1, 1984 to the present until fully paid.
Sofia Pendejito Monteroso is ordered to deliver to the above-mentioned heirs their respective shares free from any lien and encumbrances whatsoever.
27. These cases involved inheritance, hence the Bureau of Internal Revenue (BIR) of Agusan del Norte at Butuan City is hereby notified for prompt, proper and appropriate action. Likewise, the Provincial Treasurer of Agusan del Norte and the Municipal Treasurers of Cabadbaran and Tubay are hereby informed and reminded for their prompt, proper and appropriate action in the assessment and collection of real estate taxes including transfer's tax.
28. That all the heirs are hereby directed, and ordered to pay all taxes due in favor of the Government of the Republic of the Philippines within thirty (30) days from the finality of judgment hereof, otherwise, upon proper application or manifestation by appropriate or concerned government agency, a portion of the intestate estate of Don Fabian B.
Monteroso, Sr., shall be sold at public auction for such purpose.
29. Under Civil Case No. 1292, Tirso D. Monteroso or his heirs, assigns and successors-in-interest, is hereby ordered to pay Ruby Monteroso, Marlene Monteroso-Pospos, Adelita Monteroso-Berenguel and Henrieto Monteroso the following sums of money:
(a.)P10,000.00 for moral damages;(b.)
P10,000.00 for exemplary damages;
(c.)P3,000.00 for costs of suit; and(d.)
P10,000.00 for attorney's fees.
30. Under Civil Case No. 1292, Soledad Monteroso de Cagampang and Reygula Monteroso Bayan are hereby ordered jointly and severally to pay Ruby Monteroso, Marlene Monteroso-Pospos, Adelita Monteroso-Berenguel and Henrieto Monteroso the following sums of money:
(a.)P10,000.00 for moral damages;(b.)
P10,000.00 for exemplary damages;
(c.)P2,000.00 for costs of suit; and(d.)
P10,000.00 for attorney's fees.
31. Under Civil Case No. 1332, Soledad Monteroso Cagampang, Atty. Perfecto L. Cagampang, Sr. and Sofia Pendejito Vda. de Monteroso or their heirs, assigns and successors-in-interest, are hereby ordered to pay jointly and severally, unto and in favor of Tirso D. Monteroso or his heirs, assigns and successors-in-interest, the following sums of money:
(a.)P20,000.00 for moral damages;(b.)
P20,000.00 for exemplary damages;
(c.)P5,000.00 for costs of suit; and(d. P10,000.00 for attorney's fees.
)32. It is hereby ordered that a judicial administrator of the
intestate estate of Don Fabian B. Monteroso, Sr. shall be appointed by this Court upon written recommendation by all the parties within thirty (30) days from promulgation of this decision. Should the parties fail to submit unanimously a recommendee, the Court at its discretion may appoint an administrator, unless none of the parties appeal this decision and this judgment is complied with by all the parties and/or so executed in accordance with the provisions of the New Rules of Court.
SO ORDERED.[10]
As regards Civil Case No. 1292, the RTC found that the heirs of Benjamin have indeed been deprived of their inheritance which corresponds to one-fourth share due their father from the intestate estate of their grandmother, Soledad D. Monteroso. Thus, the court ordered the equal distribution of Parcel F-4, i.e., Lot 380, Pls-736 located in Pandanon, Cabadbaran, Agusan del Norte, among the children of the first marriage of Don Fabian, and partitioned it based on the subdivision survey map prepared by a geodetic engineer.
Turning on the alleged sale of Parcels F-1, F-2, F-3, F-7, and F-8 by Don Fabian to Soledad Monteroso-Cagampang, the RTC found the covering three deeds of absolute sale[11] to be null and void for the reason that the alleged conveyances were fictitious, simulated, and/or without sufficient consideration. Alternatively, the RTC ruled that the conveyances, even if considered as donation, would be inofficious for impairing the legitime of the other compulsory heirs, not to mention the lack of due acceptance of the donation by Soledad Monteroso-Cagampang. Adding a vitiating element to the conveyances, as the RTC noted, was the fact that the corresponding documents were prepared by and acknowledged before Perfecto, who happened to be the husband of the alleged vendee, Soledad Monteroso-Cagampang.
The RTC also declared as null and void the donation of Parcel F-5 to Reygula Monteroso-Bayan owing to clear legal infirmities attaching to the covering deed of donation.[12] For one, the parcel in question, while purportedly donated free from any liens or
encumbrance, was in fact the subject of a deed of absolute sale between Don Fabian and the Cagampang spouses. For another, one of the signatory-donors, Mauricia Nakila, Benjamin's widow, did not have the right to effect a donation because she was not a compulsory heir of her husband by representation. The RTC added that the real owners of the rights and interests of Benjamin over Parcel F-5 are her children as representative heirs.
Finally, the RTC declared the Order dated March 11, 1936 issued in SP No. 309 approving the Project of Partition to be valid, and that it constitutes res judicata on the affected properties, i.e., Parcel F-4 and one-half of Parcel F-5, which were equally distributed to the heirs of Soledad D. Monteroso. Pursuing this point and on the finding that Parcels F-1 to F-8 were acquired during the first marriage and Parcels S-1 to S-4 during the second, the RTC thus held that Don Fabian's intestate estate consisted of the whole of Parcels F-1, F-2, and F-3; and half of Parcels F-5 to F-8 and half of Parcels S-1 to S-4, to be distributed in accordance with the law on intestate succession. This means, the RTC concluded, that the estate shall descend to Don Fabian's compulsory heirs and their representatives, as in the case of the late Benjamin and Fabian, Jr., subject to accounting of the income or produce of the subject properties for the applicable period, less advances made or received by any heir, if any.
The Ruling of the CA
From the above June 9, 1987 Decision, Tirso, defendant in Civil Case No. 1292, appealed to the CA, so did the Cagampang spouses, defendants in Civil Case No. 1332. The other defendants in Civil Case No. 1332, namely: Sofia Pendejito Vda. de Monteroso, Florenda Monteroso, Alberto Monteroso, Heirs of Fabian Monteroso, Jr., Reynato Monteroso, and Reygula Monteroso-Bayan, also interposed their own appeal. The separate appeals were consolidated and docketed as CA-G.R. CV No. 15805.
On March 31, 1992, the CA rendered the assailed decision, affirming with modification the June 9, 1987 RTC Decision, disposing as follows:WHEREFORE, the decision appealed from is hereby modified, as
follows:a) In the event that a homestead patent over Parcel S-1 is issued by the Bureau of Lands pursuant to the patent application of Sofia Pendejito Vda. de Monteroso, said patent shall issue not in the name of the applicant but in favor of the eight heirs of Fabian Monteroso, Sr. who thereafter shall be declared absolute owners of the said parcel of land in the proportion stated in this decision but who nevertheless shall allow Sofia Pendejito Vda. de Monteroso to exercise during her lifetime usufructuary rights over a portion of the said parcel of land equivalent to the share therein of each of the heirs of her deceased husband;
b) The said heirs of Fabian Monteroso, Sr. are hereby declared absolute owners of Parcel F-6 to the extent of their respective shares therein as presently individually possessed by them pursuant to an extrajudicial partition of the said parcel of land which the Court hereby declares as a valid contract among the said heirs; and
c) With the exception of those pertaining to Parcel F-4 as stated in this decision, the parties thus found to have unjustly misappropriated the fruits of the subject parcels of land are hereby directed to render an accounting thereof consistent with our findings in the case at bar.With the exception of the foregoing modifications, the decision under review is hereby AFFIRMED in all other respects.
No pronouncement as to costs.
SO ORDERED.[13]
The CA summarized into three issues the multifarious assignments of errors raised by the parties, to wit: first, whether or not the intestate estate of Soledad Doldol Monteroso was settled in SP No. 309, thus according the Project of Partition approved therein the effect of res judicata; second, whether or not it was appropriate to partition Parcels F-1, F-2, and F-3, and half of Parcels F-5, F-6, F-7, F-8, S-1, S-2, S-3, and S-4; and third, whether or not Tirso D. Monteroso is entitled to damages.
The CA resolved the first issue in the affirmative, SP No. 309 being a valid and binding proceedings insofar as the properties subject
thereof are concerned, i.e., Parcels F-1 to F-5 of which the whole of Parcel F-4 and one-half of Parcel F-5, as Soledad D. Monteroso's intestate estate, were distributed to her heirs. This is not to mention that the authenticity and due execution of the documents filed or issued in relation therewith--referring to the Proyecto de Particion dated February 12, 1935 which is a carbon copy of the original, the Orden issued by the CFI on March 11, 1936, and the Mocion dated March 18, 1936--having duly been established. Affirming the RTC, the CA rejected Tirso's claim that SP No. 309 is void for settling only a part of the estate of Soledad D. Monteroso. The CA held that partial settlement is not a ground for the nullification of the judicial partition under either the Spanish Civil Code of 1889 or the present Civil Code. The appellate court added that the proper remedy in such a situation is to ask for the partition and the subsequent distribution of the property omitted.
The CA likewise disposed of the second issue in the affirmative, dismissing the opposition of the Cagampang spouses and Reygulo Monteroso-Bayan who all claimed ownership over some of the parcels of land on the strength of the deeds of conveyance executed in their favor. The CA upheld the RTC's finding that the three deeds of absolute sale in which Don Fabian purportedly sold Parcels F-1, F-2, F-3, F-7, and F-8 to Soledad Monteroso-Cagampang were infirm. The CA noted that even the Cagampang spouses recognized these infirmities, and instead of denying their existence, they tried to justify the same and seek an exception therefrom.
On the alleged donation of Parcel F-5 by Don Fabian to Reygula Monteroso-Bayan, the CA likewise agreed with the RTC's finding on the nullity thereof. The CA pointed out that Reygula Monteroso-Bayan did not controvert the RTC's finding, except to gratuitously say that the trial court's declaration of nullity was wrong since nobody questioned the authenticity of the donation in the first place.
Apropos Parcel S-1, a disposable agricultural land of the public domain which is the subject of a homestead patent application by Don Fabian, the CA, as opposed to the RTC's disposition, held that a patent, if eventually issued, ought to be in the name of the legal heirs of Don Fabian, not of his surviving spouse, Pendejito. This conclusion, so the CA explained, is in line with the provision of
Section 105 of the Public Land Act or Commonwealth Act No. 141 (CA 141), as amended.
As to Parcel S-2, the CA agreed with the RTC that it is a conjugal property acquired during the second marriage through a deed of sale[14] executed on August 15, 1947 by Marcelo Morancel. Likewise, the CA said that Parcels S-3 and S-4 are conjugal properties as no evidence was adduced supporting the alleged purchase by Pendejito of said properties with her own funds.
Anent the RTC's order partitioning Parcel F-6, the CA agreed with the defendants in Civil Case No. 1332 that Parcel F-6 has long been partitioned equitably among all the eight children of Don Fabian. Thus, the CA further modified the RTC on this point.
On the third and last issues, the CA set aside all awards of actual damages made by the RTC premised on the income generating capacity of the subject properties, except that of Parcel F-4, as an order of accounting of the fruits of the other subject properties unjustly appropriated by them would address the issue of damages.
It bears to stress at this juncture that, save for the grant of damages and the disposition of Parcels F-6 and S-1, the CA affirmed the questioned RTC Decision on all other points. On June 15, 1992, Tirso D. Monteroso thereafter filed before the Court his partial petition for review under Rule 45, docketed as G.R. No. 105608.
On the other hand, Pendejito, together with the other defendants in Civil Case No. 1332, first interposed a joint motion for partial reconsideration, which the CA denied per its equally assailed December 16, 1993 Resolution,[15] before elevating the case via a petition for review under Rule 45, docketed as G.R. No. 113199.
G.R. No. 105608 Denied with Finality
Per its Resolution[16] dated June 29, 1992, the Court denied Tirso D. Monteroso's petition under G.R. No. 105608 for late payment of fees and non-compliance with the requirements of the Rules of Court and Circular Nos. 1-88 and 28-91 on the submission of a certified copy of the assailed decision/order and a certification of
non-forum shopping. Another Resolution[17] of August 12, 1992 followed, this time denying with finality Tirso D. Monteroso's motion for reconsideration filed on July 29, 1992. On August 31, 1992, an Entry of Judgment[18] was issued.
In net effect, the March 31, 1992 CA Decision in CA-G.R. CV No. 15805 is final and executory as to Tirso D. Monteroso, and the Court need not pass upon the issues he raised in his petition under G.R. No. 105608, albeit we shall take stock of his Comment[19] and Memorandum[20] in G.R. No. 113199.
The Issues
Petitioners in G.R. No. 113199 raise the following issues for our consideration:
1. Whether the finding that the Deeds of Sale (Exhibits "C", "D" and "E") were not supported by valuable consideration and sham, fictitious and simulated is supported by the evidence.
2. Whether the finding or conclusion that petitioners Spouses Atty. Perfecto and Soledad Cagampang did not dispute the finding of the trial Court that the Deeds of Sale in question are sham, fictitious and simulated is supported by evidence.
3. Whether the [CA] committed reversible error in concluding that, "By invoking the benefits of prescription in their favor, the Cagampang spouses are deemed to have admitted the existence of a co-ownership."
4. Whether the [CA] committed reversible error in upholding partition as the proper remedy of private respondent Tirso Monteroso to recover the properties sold by Fabian Monteroso, Sr. to Soledad D. Monteroso de Cagampang when co-ownership is not pleaded as theory in the Complaint.
5. Whether the [CA] committed reversible error in holding
that the cause of action of private respondent Tirso Monteroso is not barred by extinctive prescription and laches.
6. Whether the [CA] committed reversible error in granting reliefs not prayed for in the Complaint in favor of parties who did not assert or claim such relief, such as partition and accounting among the parties and the nullification of the donation in favor of petitioner Reygula Bayan when x x x Tirso Monteroso and the petitioners herein who are signatories to the Deed of Donation did not question or ask for the nullification of the donation in favor of Reygula Bayan.
7. Whether the [CA] committed reversible error in ordering the partition of parcels S-1, S-2, S-3 and S-4 which are admitted in the Complaint to be in the exclusive, adverse possession of petitioners Sofia vda. de Monteroso, Florenda, Alberto and Reynato and the Heirs of Fabian Monteroso, Jr. since the death of Fabian Monteroso, Sr. in 1948, appropriating the harvests unto themselves, to the exclusion of plaintiff (private respondent Tirso Monteroso) who was deprived of his share continuously up to the present.[21]
The Court's Ruling
After a circumspect consideration of the arguments earnestly pressed by the parties and in the light of the practically parallel findings of the RTC and CA, we find the petition under G.R. No. 113199 to be devoid of merit.
It is a rule of long standing that:[T]he jurisdiction of the Court in cases brought before it from the Court of Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings of fact of the latter are conclusive, except in the following instances: (1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment
is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; and (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.[22]
None of the above exceptions, however, obtains in the instant case.
First and Second Issues: Simulated Sale
In connection with the first two related issues, petitioners maintain that the CA erred when it affirmed the RTC's conclusion on the fictitious or simulated nature, for lack or inadequate consideration, of the Deeds of Sale (Exhibits "C," "D," and "E"), noting that Tirso failed to present substantial evidence to support the alleged infirmity of the underlying sale. The fact that one of the lots sold under Exhibit "C" on May 10, 1939 for PhP 2,500 was used as collateral for a PhP 600 loan is not, so petitioners claim, proof that the amount of PhP 600 represents the maximum loan value of the property or that the sale in question is not supported by valuable consideration.
Moreover, petitioners belabored to explain that the trial court erred in concluding that the property conveyed under Exhibit "C" and covered by Transfer Certificate of Title (TCT) No. RT-203 (420) in the name of Soledad Monteroso-Cagampang, married to Perfecto, was fictitious on the ground that the certificate did not indicate that it was a conjugal property. Petitioners assert that the registration of a property only in the name of one of the spouses is not proof that no consideration was paid therefor. As petitioners would stress, what determines whether a given property is conjugal or separate is the law itself, not what appears in the certificate of title.
Lastly, petitioners take exception from the appellate court's posture that the Cagampang spouses did not dispute the trial court's finding
that the deeds of sale (Exhibits "C," "D," and "E") were simulated and fictitious for lack of consideration. Petitioners insist that they in fact contested such conclusion of the RTC in their brief before the CA, adding they only raised the issue of prescription as an alternative defense without conceding the RTC's findings on contract infirmity.
We are not persuaded.
The antecedent facts, as borne by the records, strongly indicate the simulated character of the sale covered by the deeds of absolute sale over Parcels F-1 (Exhibit "C"), F-2 (Exhibit "D"), F-3, F-5, F-7, and F-8 (Exhibit "E"). As found below, Don Fabian never relinquished possession of the covered properties during his lifetime. The first deed, Exhibit "E," was executed on May 1, 1939; the second, Exhibit "C," on May 10, 1939; and the third, Exhibit "D," on September 24, 1939. Soledad Monteroso-Cagampang, however, only took possession of the subject properties after Don Fabian's death in 1948 or nine years after contract execution. The gap, unexplained as it were, makes for a strong case that the parties to the sale never intended to be bound thereby.
The more telling circumstance, however, is the fact that Perfecto had judicially sought the amendment of the corresponding TCTs so that only the name of his wife, Soledad, shall be inscribed as real party-in-interest on the Memorandum of Encumbrances at the back portion of the titles. If only to stress the point, when the deeds were executed in 1939, Soledad and Perfecto Cagampang, the notarizing officer, were already married.
A property acquired during the existence of a marriage is presumed conjugal. This postulate notwithstanding, Perfecto Cagampang went out of his way to make it appear that the subject parcels of land were effectively his wife's paraphernal properties. No explanation was given for this unusual move.
Hence, we agree with the trial and appellate courts that the unexplained situations described above sufficiently show that the purported conveyances were simulated. We also accord credence to Tirso's allegation that the Cagampang spouses tricked Don Fabian
into believing that his creditors were after the properties which have to be "hidden" by means of simulated conveyances to Soledad Monteroso-Cagampang. The fact that only one of the subject lots was used as collateral for a PhP 600 loan which the Cagampang spouses took out does not weaken the conclusion on the simulated character of the contracts, as logically drawn from the twin circumstances adverted to.
The Court can allow that petitioners indeed attempted to traverse, before the CA, the RTC's findings on the area of simulated sale and that they only raised the matter of acquisitive prescription as an alternative defense. However, as we shall explain shortly, the fact of petitioners having made the attempt aforestated will not carry the day for them.
Third Issue: Recognition of Co-ownership in Acquisitive Prescription
In its assailed decision, the CA declared, "By invoking the benefits of prescription in their favor, the Cagampang spouses are deemed to have admitted the existence of a co-ownership x x x." The petitioners tag this declaration as flawed since the benefit of prescription may be availed of without necessarily recognizing co-ownership. Prescription and co-ownership, they maintain, are so diametrically opposed legal concepts, such that one who invokes prescription is never deemed to admit the existence of co-ownership.
Petitioners are mistaken; their error flows from compartmentalizing what the CA wrote. The aforecited portion of the CA's decision should not have been taken in isolation. It should have been read in the context of the appellate court's disquisition on the matter of Tirso being a co-owner of the subject undivided properties whose rights thereto, as a compulsory heir, accrued at the moment of death of Don Fabian, vis-Ã -vis the defense of acquisitive prescription foisted by the Cagampang spouses. For clarity, we reproduce the pertinent portion of the assailed decision:Nor do we find any merit in the third. From the allegation in the Complaint in Civil Case No. 1332 as well as from the arguments advanced by the parties on the issues raised therein, this Court is
convinced that therein plaintiff Tirso Monteroso's principal cause of action is unmistakably one for partition which by its very nature is imprescriptible and cannot be barred by laches x x x. The only exception to the rule on the imprescriptibility of an action for partition is provided in a case where the co-ownership of the properties sought to be partitioned had been properly repudiated by a co-owner at which instance the remedy available to the aggrieved heirs lies not in action for partition but for reconveyance which is subject to the rules on extinctive prescription. By invoking the benefits of prescription in their favor, the Cagampang spouses are deemed to have admitted the existence of a co-ownership among the heirs of Fabian Monteroso, Sr. over the properties forming the decedent's estate.[23] (Emphasis ours.)From the foregoing disquisition, what the appellate court tried to convey is clear and simple: partition is the proper remedy available to Tirso who is a co-owner of the subject properties by virtue of his being a compulsory heir, like siblings Soledad, Reygula, and Benjamin, of Don Fabian. The right to seek partition is imprescriptible and cannot be barred by laches. Consequently, acquisitive prescription or laches does not lie in favor of the Cagampang spouses and against Tirso, the general rule being that prescription does not run against a co-owner or co-heir. The only exception to the imprescriptibility of an action for partition against a co-owner is when a co-owner repudiates the co-ownership. Thus, the appellate court ruled that by invoking extinctive prescription as a defense, the lone exception against imprescriptibility of action by a co-owner, the Cagampang spouses are deemed to have contextually recognized the co-ownership of Tirso and must have repudiated such co-ownership in order for acquisitive prescription to set in. Taking off from that premise, the appellate court then proceeded to tackle the issue of repudiation by the Cagampang spouses. Therefore, we hold that the appellate court did not err in finding that the Cagampang spouses are effectively barred from invoking prescription, given that the subject properties are conjugal properties of the decedent, Don Fabian, which cannot be subjected to acquisitive prescription, the necessary consequence of recognizing the co-ownership stake of other legal heirs.
Fourth and Fifth Issues: Partition Proper, not Barred by Laches nor by Acquisitive Prescription
Being inextricably intertwined, we tackle both issues together. Petitioners, citing Article 494 of the Civil Code[24] and Art. 1965 of the Spanish Civil Code, aver that the right to ask partition is proper only where co-ownership is recognized. They also suggest that no co-ownership obtains in this case considering that no less than Tirso avers in his complaint in Civil Case No. 1332 that from the time of Don Fabian's death in 1948, the lots in question have been in the exclusive, adverse, and public possession of the Cagampang spouses. Assayed against this perspective, petitioners submit that partition is not proper, ergo unavailing, but an action for reconveyance which is subject to the rules on extinctive prescription.
Corollary to the posture above taken, petitioners assert that there being no co-ownership over the properties sold by Don Fabian to Soledad Monteroso-Cagampang, Tirso's cause of action, under the Code of Civil Procedure (Act No. 190) in relation to Art. 1116 of the Civil Code,[25] had already prescribed, either in 1949, i.e., 10 years after the subject properties were registered in Soledad Monteroso-Cagampang's name, or in 1958, i.e., 10 years after the cause of action accrued in 1948 (death of Don Fabian), citing Osorio v. Tan.[26] Tirso's complaint in Civil Case No. 1332 was commenced in 1970.
Petitioners contend that the evidence adduced clearly demonstrates that Soledad Monteroso-Cagampang acquired ownership of the subject properties by virtue of the deeds of sale executed in 1939 by Don Fabian. After the sale, she registered them under her name and then took exclusive, adverse, and public possession over them. Thus, they submit that the prescriptive period applicable to the instant case under Act No. 190 had long expired, adding that the CA erred in finding that Soledad Monteroso-Cagampang repudiated the co-ownership only in 1961 when she and the other heirs ignored the demand of Tirso for partition.
As a final point, petitioners alleged that the exclusion of Tirso from the enjoyment of the fruits of the subject properties since after the death of Don Fabian in 1948 is consistent with Soledad Monteroso-Cagampang's claim of exclusive ownership and dominion.
We cannot subscribe to petitioners' theory.
The fact that Tirso and the other compulsory heirs of Don Fabian were excluded from the possession of their legitime and the enjoyment of the fruits thereof does not per se argue against the existence of a co-ownership. While Tirso may not have expressly pleaded the theory of co-ownership, his demand from, and act of initiating Civil Case No. 1332 against, the Cagampang spouses for his share necessarily implies that he was asserting his right as co-owner or co-heir of the properties unjustly withheld by the Cagampang spouses through the instrumentality of simulated deeds of sale covering some of the hereditary properties. By asserting his right as a compulsory heir, Tirso has effectively brought into the open the reality that the Cagampang spouses were holding some of the subject properties in trust and that he is a co-owner of all of them to the extent of his legal share or legitime thereon.
Consequently, we are one with the trial and appellate courts that partition is the proper remedy for compulsory or legal heirs to get their legitime or share of the inheritance from the decedent. An action for partition is at once an action for declaration of co-ownership and for segregation and conveyance of a determinate portion of the properties involved.[27] Also, Sec. 1, Rule 69 of the Rules of Court pertinently provides:SECTION 1. Complaint in action for partition of real estate. -- A person having the right to compel the partition of real estate may do so as provided in this Rule, setting forth in his complaint the nature and extent of his title and an adequate description of the real estate of which partition is demanded and joining as defendants all other persons interested in the property. (Emphasis ours.)Being a compulsory heir of Don Fabian, Tirso has the right to compel partition of the properties comprising the intestate estate of Don Fabian as a measure to get his hereditary share. His right as an heir to a share of the inheritance covers all the properties comprising the intestate estate of Don Fabian at the moment of his death,[28] i.e., on October 26, 1948. Before partition and eventual distribution of Don Fabian's intestate estate, a regime of co-ownership among the compulsory heirs existed over the undivided estate of Don Fabian. Being a co-owner of that intestate estate,
Tirso's right over a share thereof is imprescriptible.[29] As a matter of law, acquisitive prescription does not apply nor set in against compulsory heirs insofar as their pro-indiviso share or legitime is concerned, unless said heirs repudiate their share.[30] Contrary to petitioners' stance, reconveyance is not the proper remedy available to Tirso. Be it remembered in this regard that Tirso is not asserting total ownership rights over the subject properties, but only insofar as his legitime from the intestate estate of his father, Don Fabian, is concerned.
Acquisitive prescription, however, may still set in in favor of a co-owner, "where there exists a clear repudiation of the co-ownership, and the co-owners are apprised of the claim of adverse and exclusive ownership."[31] In the instant case, however, no extinctive or acquisitive prescription has set in against Tirso and other compulsory heirs in favor of the Cagampang spouses because effective repudiation had not timely been made against the former. As aptly put by the appellate court, the repudiation which must be clear and open as to amount to an express disavowal of the co-ownership relation happened not when the deeds of absolute sale were executed in 1939, as these could not have amounted to a clear notice to the other heirs, but in 1961 when the Cagampang spouses refused upon written demand by Tirso for the partition and distribution of the intestate estate of Don Fabian. Since then, Tirso was deemed apprised of the repudiation by the Cagampang spouses.
However, considering that the new Civil Code was already then in effect, Art. 1141 of said Code[32] applies; thus, Tirso has at the very least 10 years and at the most 30 years to file the appropriate action in court. The records show that Tirso's cause of action has not prescribed as he instituted an action for partition in 1970 or only nine years after the considered express repudiation. Besides, acquisitive prescription also does not lie against Tirso even if we consider that a valid express repudiation was indeed made in 1961 by the Cagampang spouses since in the presence of evident bad faith, the required extraordinary prescription period[33] of 30 years has not yet lapsed, counted from said considered repudiation. Such would still be true even if the period is counted from the time of the death of Don Fabian when the Cagampang spouses took exclusive possession of the subject properties.
Sixth Issue: Partition Proper for Conjugal Properties of Second Marriage
On the ground of prescription under Act No. 190, petitioners assert that Tirso lost the right to seek the partition of Parcels S-1, S-2, S-3, and S-4, he having admitted, as early as 1948, the adverse, exclusive, and public possession thereof by Pendejito and her children. This type of possession, they maintain, works as a repudiation by Pendejito and her children of the co-ownership claim of Tirso. They further argue that Parcel S-1 pertains to Pendejito as her paraphernal property since the homestead application therefor was under her name.
We are not persuaded.
Tirso's acknowledgment of Pendejito and her children's possession of Parcels S-1, S-2, S-3, and S-4 cannot be viewed as the required repudiation to bar Tirso from pursuing his right to seek partition. Under the law on co-ownership, it behooves on the person desiring to exclude another from the co-ownership to do the repudiating. Verily, the records do not show that Pendejito and her children performed acts clearly indicating an intention to repudiate the co-ownership and then apprising Tirso and other co-owners or co-compulsory heirs of such intention.
To be sure, Tirso and his siblings from the first marriage have a stake on Parcels S-2, S-3, and S-4, even if these parcels of land formed part of the conjugal partnership of gains of the second marriage. There can be no serious dispute that the children of the first marriage have a hereditary right over the share of Don Fabian in the partnership assets of the first marriage.
Anent Parcel S-1, we join the CA in its holding that it belongs to the heirs of Don Fabian under Sec. 105 of CA 141, which pertinently provides:Sec. 105. If at any time the applicant or grantee shall die before the issuance of the patent or the final grant of the land, or during the life
of the lease, or while the applicant or grantee still has obligations pending towards the Government, in accordance with this Act, he
shall be succeeded in his rights and obligations with respect to the land applied for or granted or issued under this Act by his heirs in law, who shall be entitled to have issued to them the patent or final concession if they show that they have complied with the requirements therefor, and who shall be subrogated in all his rights and obligations for the purposes of this Act. (Emphasis
ours.)
It is undisputed that Don Fabian was the homestead patent applicant who was subrogated to the rights of the original applicants, spouses Simeon Cagaanan and Severina Naranjo, by purchasing from the latter Parcel S-1 on May 8, 1943. Don Fabian cultivated the applied area and declared it for taxation purposes. The application, however, would be rejected because death supervened. In 1963, Pendejito filed her own homestead application for Parcel S-1.
Assayed against the foregoing undisputed facts in the light of the aforequoted Sec. 105 of CA 141, the heirs of Don Fabian are entitled to Parcel S-1. Said Sec. 105 has been interpreted in Soliman v. Icdang[34] as having abrogated the right of the widow of a deceased homestead applicant to secure under Sec. 3 of Act No. 926, otherwise known as the Public Land Act of 1903, a patent in her own name, thus:[W]e should bear in mind that, although Adolfo Icdang was married to plaintiff when he filed the homestead application, "an applicant may be said to have acquired a vested right over a homestead only by the presentation of the final proof and its approval by the Director of Lands". (Ingara vs. Ramelo, 107 Phil., 498; Balboa vs. Farrales, 51 Phil., 498; Republic vs. Diamon, 97 Phil., 838.) In the case at bar, the final proof appears to have been presented to, and approved by the Director of Lands, in 1954, or several years after the death of Adolfo Icdang and the dissolution of his conjugal partnership with plaintiff herein. Hence, the land in question could not have formed part of the assets of said partnership. It belonged to the heirs of Adolfo Icdang, pursuant to section 105 of Commonwealth Act No. 141, reading:
x x x x
It is worthy of notice that, under the Public Land Act of 1903 (Act
No. 926, section 3), "in the event of the death of an applicant prior to the issuance of a patent, his widow shall be entitled to have a patent for the land applied for issue to her upon showing that she has consummated the requirements of law for homesteading the lands", and that only in case the deceased applicant leaves no widow shall his interest in the land descend and the patent issue to his legal heirs. Incorporated substantially in section 103 of the Public Land Act of 1919 (Act No. 2874), this policy was changed by Act No. 3517, pursuant to which the deceased shall be succeeded no longer by his widow, but "by his heirs in law, who shall be entitled to have issued to them the patent--if they show that they have complied with the requirements therefor". And this is, in effect, the rule maintained in the above quoted section 105 of Commonwealth Act No. 141.[35] (Emphasis added.)It appearing that Don Fabian was responsible for meeting the requirements of law for homesteading Parcel S-1, said property, following Soliman, cannot be categorized as the paraphernal property of Pendejito. Thus, the homestead patent thereto, if eventually issued, must be made in the name of the compulsory heirs of Don Fabian. Over it, Pendejito shall be entitled, pursuant to Art. 834 of the Spanish Civil Code of 1889, only to a usufructuary right over the property equal to the corresponding share of each of Don Fabian's compulsory heirs, i.e., his eight children.
Seventh Issue: Judgment Must not Only be Clear but Must Also be Complete
Petitioners bemoan the fact that both the trial and appellate courts granted relief and remedies not prayed for by the parties. As argued, Civil Case No. 1292, initiated by the heirs of Benjamin against Tirso, basically sought recovery of real properties; while Civil Case No. 1332, a countersuit filed by Tirso, was for partition and damages, the main thrust of which is to recover his alleged share from properties in the exclusive possession and enjoyment of other heirs since the death of Don Fabian in 1948. Thus, petitioners take issue against both decisions of the trial and appellate courts which ordered partition not only in favor of Tirso but also in favor of the other petitioners he sued. What is particularly appalling, according to them, is the order for accounting which no one requested.
Petitioners' lament, while understandable, is specious. Our judicial system requires courts to apply the law and grant remedies when appropriately called for by law and justice. In the exercise of this mandate, courts have the discretion to apply equity in the absence or insufficiency of the law. Equity has been defined as justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law. It is grounded on the precepts of conscience and not on any sanction of positive law, for equity finds no room for application where there is law.[36]
In the instant case, a disposition only ordering partial partition and without accounting, as petitioners presently urge, would be most impractical and against what we articulated in Samala v. Court of Appeals.[37] There, we cautioned courts against being dogmatic in rendering decisions, it being preferable if they take a complete view of the case and in the process come up with a just and equitable judgment, eschewing rules tending to frustrate rather than promote substantial justice.
Surely, the assailed path taken by the CA on the grant of relief not specifically sought is not without precedent. In National Housing Authority v. Court of Appeals, where the petitioner questioned the competence of the courts a quo to resolve issues not raised in the pleadings, and to order the disposition of the subject property when what was raised was the issue of right to possession, this Court in dismissing the challenge stated that "a case should be decided in its totality, resolving all interlocking issues in order to render justice to all concerned and to end the litigation once and for all."[38] Verily, courts should always strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seed of future litigation.[39]
Eighth Issue: Deed of Donation Null and Void
Finally, as an incidental issue, petitioners asseverate that the deed of donation (Exhibit "F") executed on September 19, 1948, or after the death of Don Fabian, in favor of Reygula M. Bayan, is valid, particularly so since Tirso and the heirs of Benjamin, as represented by their mother, Nakila, do not question the validity of said deed as they in fact signed the same. That the donated property was the
same property described and included in the deed of sale (Exhibit "E") in favor of Soledad Monteroso-Cagampang is not, they contend, an invalidating factor since what Don Fabian sold under Exhibit "E" did not extend beyond his conjugal share thereon.
Just like the issue of the nullity of the three deeds of absolute sale (Exhibits "C," "D," and "E") heretofore discussed, we agree with the determination of the RTC and CA as to the invalidity of the donation of Parcel F-5 to Reygula M. Bayan. We need not repeat the reasons for such determination, except the most basic. We refer to the authority of the person who executed the deed of donation. As it were, the widow of Benjamin, Nakila, signed the deed of donation. She, however, cannot give consent to the donation as she has no disposable right thereto. The legal maxim nemo dat quod non habet[40] applies to this instance as Nakila only has usufructuary right equal to the share of her children under Art. 834 of the Spanish Civil Code of 1889. Besides, Nakila signed the deed of donation in her name and not in the name of her children who are the heirs in representation of their father, Benjamin. Lest it be overlooked, the then minor children were not under the legal guardianship of Nakila, a situation which thus disqualifies her from signing on their behalf.
The fact that nobody objected to the donation is of little consequence, for as the CA aptly observed, "The circumstance that parties to a void contract choose to ignore its nullity can in no way enhance the invalid character of such contract. It is axiomatic that void contracts cannot be the subject of ratification, either express or implied."[41]
WHEREFORE, the petition in G.R. No. 113199 is DENIED for lack of merit. The assailed Decision and Resolution dated March 31, 1992 and December 16, 1993, respectively, of the CA in CA-G.R. CV No. 15805 are hereby AFFIRMEDIN TOTO. Costs against the petitioners.
SO ORDERED.
Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. L-4452 October 1, 1908
JUANA PICHAY, plaintiff-appellee, vs.EULALIO QUEROL, ET AL., defendants-appellants.
Evaristo Singson for appellants.Jose M. del Valle, and Lucas Paredes for appellee.
WILLARD, J.:
From the admissions made in the pleadings, and from the facts agreed upon in the court below, it appears that the plaintiff, Juan Pichay, in April, 1905, conveyed to the defendants an undivided one-third interest in twenty- five parcels of land situated in the Province of Ilocos Sur, as payment of a debt of P1,500 which she owed them. The contract by which this conveyance was made contained the following clause:
Third. The one-third part of these lands belong to me, it being my share in the inheritance left by my deceased parents; but I have requested may said creditors to allow me to enjoy the usufruct of the same until my death, notwithstanding the fact that I have conveyed the said lands to them in payment of my debt, and I bind myself not to sell, mortgage, or leave the said lands as inheritance to any person.
The defendants and appellants claim that this clause above
quoted gave plaintiff no right of usufruct in the land, saying that it appears that she only asked for this right and it does not appear that the defendants gave it to her. This contention can not be sustained. The only reason for inserting this clause in the contract was for the purpose of securing to the plaintiff the right which is therein set out. The form of the words used is not sufficient to defeat this purpose.
On the 10th of August, 1905, the owners of the twenty- five parcels of land made a partition thereof among themselves, in which the plaintiff took no part, and in this partition certain specific tracts of land were assigned to the defendants as the third to which they were entitled by reason of the conveyance from the plaintiff to them. They have been in possession of the tracts so assigned to them in partition since the date thereof, and are now in such possession, and have refused to recognized in the plaintiff any right of usufruct therein.lawphil.net
In February, 1907, the plaintiff brought this action against the defendants, asking that it be declared that she had no right if usufruct in a third a twenty-five parcels of land; and that she had the right to the administrations of land, and that the appellees pay her the rents which they had received during the time of her dispossession.
The court rendered the following judgment:
In view of the allegations and evidence adduced by the parties, the court concludes: (1) That all the lands described in the complaint be delivered to Juana Pichay for administration; (2) that Juana Pichay has a right of usufruct in a third party of the said lands until her death; (3) that the partition of the said lands, made by the coowners of Juana Pichay can not affect the latter; (4) Eulalio Querol is hereby directed to deliver to Juana Pichay two crops from the third part of the lands in question, or the equivalent thereof, taking as a basis the present crop — that is, the crop to be harvested within a short time — and (5) Juana Pichay is sentence to indemnify Eulalio Querol in the sum
of P300 on account of the past suit, without costs.
The first proposition contained in this judgment finds no support in the record, and there is nothing therein to show that the plaintiff had any acquired right to the administration of the lands described in the complaint.
The second proposition finds its support in the record if it is limited to the lands which were assigned to the defendants in partition.
The third proposition can not be supported. Article 490 of the Civil Code is as follows:
ART. 490. The usufructuary of part of a thing held in common shall exercise all the rights corresponding to the owner thereof with regard to the administration and collection of fruits or interests. Should the community cease by reason of the division of the thing possessed in common, the usufruct of the part awarded to the owner of coowner shall appertain to the usufructuary.
As to the fourth proposition, the agreed statement of facts shows that, while the defendants are in possession of the tracts which had been assigned to them, they received the crops for only two years; that the crop for the year 1906 amounted to 14 uyones and 13 manojos, of the value of P4 for each uyon, and that the crop of 1907 amounted to 15 uyones and 4 manojos, of the value of P6.25 for each uyon. These are the only amounts which the plaintiff is entitled to recover.
As to the fifth proposition, while it appears that the plaintiff excepted to the judgment, and stated that she desired to present a bill of exceptions, yet she is in fact did not present any. The error, therefore, assigned by her with reference to this fifth proposition can not be considered. (Naval vs. Benavides, 8 Phil. Rep., 250; Puruganan vs. Martin, 8 Phil. Rep., 519; Ullmann vs. Ullmann and
Co., 10 Phil. Rep., 459.)
The judgment of the court below is reversed and the case remanded, with directions to enter a judgment in favor of the plaintiff to the effect that she is entitled to the right of usufruct in the lands assigned to the defendants by the partition of August 10, 1905, and to enter a judgment against the plaintiff and in favor of the defendant Querol for P149.48 without cost of to either party. No costs will be allowed to either party in this court. So ordered.
Republic of the PhilippinesSUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-44428 September 30, 1977
AVELINO BALURAN, petitioner, vs.HON. RICARDO Y. NAVARRO, Presiding Judge, Court of First Instance of Ilocos Norte, Branch I and ANTONIO OBEDENCIO, respondents.
Alipio V. Flores for petitioner.
Rafael B. Ruiz for private respondent.
MUÑOZ PALMA, J.:
Spouses Domingo Paraiso and Fidela Q. Paraiso were the owners of a residential lot of around 480 square meters located in Sarrat, Ilocos Norte. On or about February 2, 1964, the Paraisos executed an agreement entitled "BARTER" whereby as party of the first part they agreed to "barter and exchange" with spouses Avelino and
Benilda Baluran their residential lot with the latter's unirrigated riceland situated in Sarrat, Ilocos Norte, of approximately 223 square meters without any permanent improvements, under the following conditions:
1. That both the Party of the First Part and the Party of the Second Part shall enjoy the material possession of their respective properties; the Party of the First Part shall reap the fruits of the unirrigated riceland and the Party of the Second Part shall have a right to build his own house in the residential lot.
2. Nevertheless, in the event any of the children of Natividad P. Obencio, daughter of the First Part, shall choose to reside in this municipality and build his own house in the residential lot, the Party of the Second Part shall be obliged to return the lot such children with damages to be incurred.
3. That neither the Party of the First Part nor the Party of the Second Part shall encumber, alienate or dispose of in any manner their respective properties as bartered without the consent of the other.
4. That inasmuch as the bartered properties are not yet accordance with Act No. 496 or under the Spanish Mortgage Law, they finally agreed and covenant that this deed be registered in the Office of the Register of Deeds of Ilocos Norte pursuant to the provisions of Act No. 3344 as amended. (p. 28, rollo)
On May 6, 1975 Antonio Obendencio filed with the Court of First Instance of Ilocos Norte the present complaint to recover the above-mentioned residential lot from Avelino Baluran claiming that he is the rightful owner of said residential lot having acquired the same
from his mother, Natividad Paraiso Obedencio, and that he needed the property for Purposes Of constructing his house thereon inasmuch as he had taken residence in his native town, Sarrat. Obedencio accordingly prayed that he be declared owner of the residential lot and that defendant Baluran be ordered to vacate the same forfeiting his (Obedencio) favor the improvements defendant Baluran had built in bad faith.1
Answering the complaint, Avelino Baluran alleged inter alia (1) that the "barter agreement" transferred to him the ownership of the residential lot in exchange for the unirrigated riceland conveyed to plaintiff's Predecessor-in-interest, Natividad Obedencio, who in fact is still in On thereof, and (2) that the plaintiff's cause of action if any had prescribed. 2
At the pre-trial, the parties agreed to submit the case for decision on the basis of their stipulation of facts. It was likewise admitted that the aforementioned residential lot was donated on October 4, 1974 by Natividad Obedencio to her son Antonio Obedencio, and that since the execution of the agreement of February 2, 1964 Avelino Baluran was in possession of the residential lot, paid the taxes of the property, and constructed a house thereon with an value of P250.00. 3 On November 8, 1975, the trial Judge Ricardo Y. Navarro rendered a decision the dispositive portion of which reads as follows:
Consequently, the plaintiff is hereby declared owner of the question, the defendant is hereby ordered to vacate the same with costs against defendant.
Avelino Baluran to whom We shall refer as petitioner, now seeks a review of that decision under the following assignment of errors:
I — The lower Court erred in holding that the barter agreement did not transfer ownership of the
lot in suit to the petitioner.
II — The lower Court erred in not holding that the right to re-barter or re- exchange of respondent Antonio Obedencio had been barred by the statute of limitation. (p. 14, Ibid.)
The resolution of this appeal revolves on the nature of the undertaking contract of February 2, 1964 which is entitled "Barter Agreement."
It is a settled rule that to determine the nature of a contract courts are not bound by the name or title given to it by the contracting parties. 4 This Court has held that contracts are not what the parties may see fit to call them but what they really are as determined by the principles of law. 5 Thus, in the instant case, the use of the, term "barter" in describing the agreement of February 2, 1964, is not controlling. The stipulations in said document are clear enough to indicate that there was no intention at all on the part of the signatories thereto to convey the ownership of their respective properties; all that was intended, and it was so provided in the agreement, was to transfer the material possession thereof. (condition No. 1, see page I of this Decision) In fact, under condition No. 3 of the agreement, the parties retained the right to alienate their respective properties which right is an element of ownership.
With the material ion being the only one transferred, all that the parties acquired was the right of usufruct which in essence is the right to enjoy the Property of another. 6 Under the document in question, spouses Paraiso would harvest the crop of the unirrigated riceland while the other party, Avelino Baluran, could build a house on the residential lot, subject, however, to the condition, that when any of the children of Natividad Paraiso Obedencio, daughter of spouses Paraiso, shall choose to reside in the municipality and build his house on the residential lot, Avelino Baluran shall be obliged to return the lot to said children "With damages to be incurred." (Condition No. 2 of the Agreement) Thus, the mutual agreement —
each party enjoying "material possession" of the other's property — was subject to a resolutory condition the happening of which would terminate the right of possession and use.
A resolutory condition is one which extinguishes rights and obligations already existing. 7 The right of "material possession" granted in the agreement of February 2, 1964, ends if and when any of the children of Natividad Paraiso, Obedencio (daughter of spouses Paraiso, Party of the First Part) would reside in the municipality and build his house on the property. Inasmuch as the condition opposed is not dependent solely on the will of one of the parties to the contract — the spouses Paraiso — but is Part dependent on the will of third persons — Natividad Obedencio and any of her children — the same is valid. 8
When there is nothing contrary to law, morals, and good customs Or Public Policy in the stipulations of a contract, the agreement constitutes the law between the parties and the latter are bound by the terms thereof. 9
Art. 1306 of the Civil Code states:
Art. 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, Morals, good customs, public order, or public policy.
Contracts which are the private laws of the contracting parties, should be fulfilled according to the literal sense of their stipulations, if their terms are clear and leave no room for doubt as to the intention of the contracting parties, for contracts are obligatory, no matter what their form may be, whenever the essential requisites for their validity are present. (Philippine American General Insurance Co., Inc. vs. Mutuc, 61 SCRA
22)
The trial court therefore correctly adjudged that Antonio Obedencio is entitled to recover the possession of the residential lot Pursuant to the agreement of February 2, 1964.
Petitioner submits under the second assigned error that the causa, of action if any of respondent Obedencio had Prescribed after the lapse of four years from the date of execution of the document of February 2, 1964. It is argued that the remedy of plaintiff, now respondent, Was to ask for re-barter or re-exchange of the properties subject of the agreement which could be exercised only within four years from the date of the contract under Art. 1606 of the Civil Code.
The submission of petitioner is untenable. Art. 1606 of the Civil Code refers to conventional redemption which petitioner would want to apply to the present situation. However, as We stated above, the agreement of the parties of February 2, 1964, is not one of barter, exchange or even sale with right to repurchase, but is one of or akin the other is the use or material ion or enjoyment of each other's real property.
Usufruct may be constituted by the parties for any period of time and under such conditions as they may deem convenient and beneficial subject to the provisions of the Civil Code, Book II, Title VI on Usufruct. The manner of terminating or extinguishing the right of usufruct is primarily determined by the stipulations of the parties which in this case now before Us is the happening of the event agreed upon. Necessarily, the plaintiff or respondent Obedencio could not demand for the recovery of possession of the residential lot in question, not until he acquired that right from his mother, Natividad Obedencio, and which he did acquire when his mother donated to him the residential lot on October 4, 1974. Even if We were to go along with petitioner in his argument that the fulfillment of the condition cannot be left to an indefinite, uncertain period, nonetheless, in the case at bar, the respondent, in whose favor the resolutory condition was constituted, took immediate steps
to terminate the right of petitioner herein to the use of the lot. Obedencio's present complaint was filed in May of 1975, barely several months after the property was donated to him.
One last point raised by petitioner is his alleged right to recover damages under the agreement of February 2, 1964. In the absence of evidence, considering that the parties agreed to submit the case for decision on a stipulation of facts, We have no basis for awarding damages to petitioner.
However, We apply Art. 579 of the Civil Code and hold that petitioner will not forfeit the improvement he built on the lot but may remove the same without causing damage to the property.
Art. 579. The usufructuary may make on the property held in usufruct such useful improvements or expenses for mere pleasure as he may deem proper, provided he does not alter its form or substance; but he shall have no right to be indemnified therefor. He may, however. He may, however, removed such improvements, should it be possible to do so without damage to the property. (Emphasis supplied)
Finally, We cannot close this case without touching on the unirrigated riceland which admittedly is in the possession of Natividad Obedencio.
In view of our ruling that the "barter agreement" of February 2, 1964, did not transfer the ownership of the respective properties mentioned therein, it follows that petitioner Baluran remains the owner of the unirrigated riceland and is now entitled to its Possession. With the happening of the resolutory condition provided for in the agreement, the right of usufruct of the parties is extinguished and each is entitled to a return of his property. it is true that Natividad Obedencio who is now in possession of the property and who has been made a party to this case cannot be ordered in this proceeding to surrender the riceland. But inasmuch as reciprocal
rights and obligations have arisen between the parties to the so-called "barter agreement", We hold that the parties and for their successors-in-interest are duty bound to effect a simultaneous transfer of the respective properties if substance at justice is to be effected.
WHEREFORE, Judgment is hereby rendered: 1) declaring the petitioner Avelino Baluran and respondent Antonio Obedencio the respective owners the unirrigated riceland and residential lot mentioned in the "Barter Agreement" of February 2, 1964; 2) ordering Avelino Baluran to vacate the residential lot and removed improvements built by thereon, provided, however that he shall not be compelled to do so unless the unirrigated riceland shall five been restored to his possession either on volition of the party concerned or through judicial proceedings which he may institute for the purpose.
Without pronouncement as to costs. So Ordered.
Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. L-40958 August 11, 1934
Intestate estate of the deceased Antonio Escobar. THE BANK OF THE PHILIPPINE ISLANDS, administrator. ESTATE OF THE DECEASED LUCIANA DE LOS SANTOS, represented by the executor JOSE SANTOS, claimant-appellee, vs.MARIA LUCIANO, claimant-appellant.
Ramon Diokno for appellant.Reyes & Reyes and Jose Rivera Yap for appellee.
VILLA-REAL, J.:
This is an appeal taken by the claimant Maria Luciano from the order of the Court of First Instance of Manila, the dispositive part of which reads as follows:
Wherefore, the court declares that the only heir of the deceased Antonio Escobar was his wife Luciana de los Santos, now deceased, whom her heirs succeeded and whose testamentary proceedings are likewise pending in this court, as above stated, and that neither Maria Luciano nor Petrona Esguerra is entitled to participate in the estate of the deceased Antonio Escobar.
After this judgment becomes final, the entire estate of the deceased Antonio Escobar shall, by operation of law, pass to the testamentary estate of the deceased Luciana de los Santos. Let a copy of this resolution be attached to the record of the testamentary proceedings of the deceased Luciana de los Santos, civil case No. 43599. So ordered.
In support of her appeal, the appellant assigns the following sole alleged error as committed by the court a quo in its order to wit:
The lower court erred in not recognizing and declaring Maria Luciano as the sole legal heir of the deceased Antonio Escobar and therefore entitled to the entire intestate estate of the latter.
The following facts proven at the trial, some by stipulation of the parties and others by a preponderance of the evidence, are necessary and pertinent to the resolution of the questions raised in this appeal, to wit:
On January 1, 1837, a girl four days old, alleged to be a natural daughter of Leon Escobar and Josefa Esguerra, was baptized in the Ermita church and given the name of Tomasa Escobar (Exhibit 1-
Maria Luciano).
Leon Escobar and Josefa Esguerra were married on August 2, 1838 (Exhibit 1), and subsequently had legitimate children named Antonio and Fortunate Escobar. With said spouses and their two legitimate children lived Tomasa, Guia and Nicolas Escobar. All of them called said spouses "tatay" (father) and "nanay" (mother), respectively. Tomasa was called by the other children "manang" (a term accorded in certain regions to the elder sister). Tomasa Escobar grew up and lived under the care of the spouses Leon and Josefa Escobar until she married. Said spouses supported her, treated and presented her as their daughter, and she was publicly known as such. When Tomasa Escobar became a widow, she went back to live with said spouses, together with her only daughter, the herein claimant-appellant Maria Luciano who was born on December 17, 1864 (Exhibit 4). Leon Escobar built a house for Tomasa Escobar and her daughter and the two lived there. Leon Escobar visited them in said house almost every day and sent his sons Antonio and Fortunato to keep them company at night. Upon Tomasa Escobar's death, Leon Escobar took said Maria Luciano into his home until she married and was taken by her husband to the province. Leon Escobar died on February 12, 1887 (Exhibit 2-Luciana de los Santos). When Fortunato Escobar became ill, his brother Antonio Escobar asked Maria Luciano to come to Manila to nurse him, sending her money for passage. Upon Fortunato Escobar's death, Antonio Escobar took Maria Luciano into his home where she lived Antonio's death.
The claimant-appellant Maria Luciano claims to be the legitimate niece of the deceased Antonio Escobar, alleging that she is the legitimate daughter of Tomasa Escobar, a legitimated sister of said deceased Antonio Escobar by the subsequent marriage of their parents, and therefore the only heir to the estate of her said uncle.
First of all, it is necessary to determine whether or not Tomasa Escobar was a natural daughter of the spouses Leon Escobar and Josefa Esguerra, legitimated by subsequent marriage of the latter.
We have seen that Tomasa Escobar was born on December 29, 1836, and her alleged parents Leon Escobar and Josefa Esguerra were married on August 2, 1838, that is under the prior legislation which is Law I, Title XIII, Partida IV. Her status as a legitimated daughter should therefore be determined by said law which reads as follows:
Law I, Title XIII, Partida IV.—Moreover, the children which a man has by a woman whom he keeps as a concubine will be legitimate, if he marries her afterwards; for although children of this kind are not legitimate when they are born, marriage has such force that, as soon as the father and mother are married, the children become for that reason, legitimate. This same rule applies where a man has a child by his female slave and afterwards marries her; for marriage has such extraordinary power that, as soon as this is done, the mother becomes free, and the children legitimate, for this reason.
It is a well-established doctrine, both in Spain and in the Philippines, interpreting Law 11 of Toro, that a child is considered natural when at the time of its conception or birth its parents could have married without dispensation and when the father has expressly or tacitly acknowledged it. (Mijares vs. Nery, 3 Phil., 195; Llorente vs. Rodriguez, 3 Phil., 697, Capistrano vs. Estate of Gabino, 8 Phil., 135; De Gala vs. De Gala, 42 Phil., 771; Larena and Larena vs. Rubio, 43 Phil., 10117; Donado vs. Mendez Donado, 55 Phil., 861.)
The fact that before and after their marriage the spouses Leon Escobar and Josefa Esguerra had Tomasa Escobar with them and their legitimate children; the fact that they supported her, took care of her, and treated and presented her to society as their daughter, and the fact that they built a house for her and her daughter, all show that said spouses Leon Escobar and Josefa Esguerra acknowledged her as their daughter. Pursuant to the provisions of Law 11 of Toro, cited above, such acknowledgment, in addition to the freedom of her parents to marry without dispensation at the time
of her conception or birth, gave Tomasa Escobar the status of a natural child of Leon Escobar and Josefa Esguerra (Requejo vs. Rabalo, 34 Phil., 14), and according to Law I, title XIII, Partida IV, quoted above, the subsequent marriage of the latter legitimated her. (Cosio vs. Pili, 10 Phil., 72; Requejo vs. Rabalo, supra.)
The question now arises whether or not the claimant-appellant Maria Luciano, as legitimate daughter, born under the prior legislation, of Tomasa Escobar, a child legitimated by subsequent marriage, is entitled to inherit from the intestate estate of a brother of her mother who is a legitimate son of said Tomasa Escobar's parents, and who died on July 21, 1932, under the present law.
The twelfth transitory provision of the Civil Code reads as follows:
12. Rights to the inheritance of a person who may have died, with or without a will, before this Code was in force, shall be governed by the prior legislation. The inheritance of those who died after that time, with or without a will, shall be allotted and divided in accordance with this Code, but in harmony, in so far as the latter permits it, with the testamentary dispositions. Therefore the legitimes, betterments, and legacies shall be respected; but their other manner to give to each participant in the inheritance the share pertaining to him, according to this Code.
According to the above quoted transitory provision, inasmuch as Antonio Escobar died after the Civil Code took effect, his inheritance should be allotted and divided in accordance with said Code.
Article 953 of the Civil Code provides that should children of brothers or sisters exist, the surviving spouse shall, concurrently with said children, be entitled to receive the part of the inheritance in usufruct assigned him or her in article 837, that is, one-half of the estate in usufruct. When Antonio Escobar died intestate on July 21, 1932, his niece, the herein claimant-appellant Maria Luciano, daughter of his sister legitimated by subsequent marriage of their
parents, was entitled to inherit the full ownership of the other half, the usufruct of which belonged to the surviving spouse. However, the usufructuary right of the widow Luciana delos Santos was extinguished upon her death which took place on December 27, 1932 (article 513 of the Civil Code), thereby consolidating the naked ownership with the usfruct of the other half in the herein claimant-appellant Maria Luciano.
The court a quo, in rejecting the claim of the claimant-appellant Maria Luciano to the estate of her uncle Antonio Escobar, based its opinion on article 943 of the Civil Code which provides that "a natural the legitimate child had no right to succeed ab intestate the legitimate children and relatives of the father or mother who has acknowledged it; nor shall such children or relatives so inherit from the natural or legitimated child," interpreting the word "legitimated" to mean a child legitimated by royal concession as well as one legitimated by subsequent marriage. Such interpretation could not have been the intention of the legislator, inasmuch as article 122 of said Code considers a child legitimated by subsequent marriage to be in party with a legitimate child and grants the former the same rights as those of the latter, while article 127 of the same Code grants a child legitimated by royal concession only those rights conferred upon acknowledged natural children by article 134. If children legitimate by subsequent marriage have the same rights as legitimate children, and those legitimated by royal concession only have the same rights as acknowledge natural children, the word "legitimated" employed in article 943 et seq. of Section III, Chapter IV of Book Three of the Civil Code, alternately with the word "natural", with reference to the heredity portion to which the child of one class or another is entitled, refers only to a child legitimated by royal concession and not to one legitimated by subsequent marriage. Therefore, the provisions of the above cited article 943 of the Civil Code are not applicable to the herein claimant-appellant Maria Luciano, and the provisions of article 953 of the same Code are the ones applicable to her.
In view of the foregoing considerations, we are of the opinion and so hold: (1) That the continuous possession of the status of a natural
child, justified by direct acts of its parents and their family under the legislation prior to the Civil Code, constitutes tacit recognition of paternity (Law 11 of Toro); (2) that a child, who has enjoyed the continuous possession of the status of natural child, justified by direct acts of its parents and their family both before and after their marriage which was celebrated under the prior legislation, is considered as legitimated by subsequent marriage (Law I, Title XIII, Partida IV); (3) that the legitimate daughter of a daughter legitimated by subsequent marriage, now deceased, is entitled to inherit from a brother of her mother who is a legitimate son of the same parents who legitimated her mother by subsequent marriage, and who died after the Civil Code took effect; and (4) that the word "legitimated" employed in Section III, Chapter IV of Book Three of the Civil Code, refers to children legitimated by royal concession and not to those legitimated by subsequent marriage.
Wherefore, the order appealed from is reversed and the claimant-appellant Maria Luciano is declared to be the sole heir to the intestate estate of Antonio Escobar, with the costs against the appellee. So ordered.
Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. L-24302 August 18, 1972
MIGUEL PALAD, ET AL., plaintiffs-appellants, VICTORIA QUEANO, ET AL., intervenors-appellees, vs.THE GOVERNOR OF QUEZON PROVINCE and THE MUNICIPALITY OF TAYABAS, QUEZON, defendants-
appellees.
Jose L. Desvarro, for plaintiffs-appellants.
Milberto B. Zurbano for intervenors-appellees.
Assistant Provincial Fiscal Ramon M. Yngente for defendants-appellees.
MAKASIAR, J.:p
Plaintiffs-appellants appealed on January 15, 1965 from the decision dated November 28, 1964 of the Court of First Instance of Quezon, dismissing their complaint as well as the complaint in intervention.
In their complaint dated April 20, 1958 against the governor of Quezon province and the municipality of Tayabas, plaintiffs-appellants Miguel Palad, Fe Palad, Victoria Queano, Jose Palomera, Concepcion Palomera, Edgardo Obciana, Galo Nosce, Celso Zafranco and Ernesto Zafranco alleged that they are the remaining immediate heirs and/or successors-in-interest of the deceased Luis Palad, they being the grandchildren of Policarpio Palad and Victor Palad, both deceased brothers of the late Luis Palad; that the defendant provincial governor is the trustee and/or administrator and the defendant municipality of Tayabas the beneficiary of Lots Nos. 3464 and 3469 respectively covered by O.C.T. No. 6448 and O.C.T. No. 6656 situated in Barrio Colongcolong (now Talawtalaw), Lucena, Quezon; that the purpose of the trusteeship of the aforesaid lots as constituted by the last will and testament of the deceased Luis Palad dated January 25, 1892 and duly protocolized on July 27, 1897, was to erect or establish a high school in the town of Tayabas out of the income of the aforesaid two lots for the benefit of the said town of Tayabas; that the said trust was duly fulfilled upon the complete establishment in or about 1932 of a high
school now known as "Luis Palad High School" in the town of Tayabas financed with the income of said lots and is actually self-supporting, that the town of Tayabas has been enjoying the income of the said lots as beneficiary for the last 54 years since November 9, 1904 up to the present time (when complaint was filed), while the defendant provincial governor continues to be the trustee and/or administrator of the two lots in violation of Article 605 of the Civil Code; that the pertinent facts are well-established in the decision of the Supreme Court on December 10, 1924 in the case of "The Government of the Philippine Islands vs. Anastacia Abadilla, et al.,"; 1 that the aforesaid lots have a net annual income of P7,000; and that since the establishment of the Luis Palad High School in 1932 or since November, 1904 in accordance with Article 605 of the Civil Code, the plaintiffs were already entitled to the reversion of the two lots in their favor and to the dissolution and/or termination of the trusteeship; and accordingly prayed for judgment (1) directing the defendant provincial governor to submit an accounting of the fruits or income of the two lots from 1932, and to turn over the funds under his trusteeship to the plaintiffs, (2) terminating or dissolving the trusteeship, (3) ordering the reversion of the lots to the plaintiffs, (4) directing the governor to reconvey the same to the plaintiffs, (5) ordering the register of deeds of Quezon province to cancel O.C.T. Nos. 6448 and 6656 and to issue the transfer certificates of title in their favor, and (6) sentencing the defendants to pay the costs.
The answer dated June 11, 1958 filed by the provincial fiscal for and in behalf of the defendants, alleges that they have no knowledge or information sufficient to form a belief as to the truth of plaintiffs' claim that they are the immediate heirs and successors-in-interest of the deceased Luis Palad, denies the rest of the allegations in the complaint, and interposes as special defenses the fact that the two parcels of land were ordinary unconditional devise of realties in trust contained in the last will and testament of the late Luis Palad for the establishment and maintenance of a secondary school for the continued benefit and welfare of the inhabitants of the municipality of Tayabas; that Article 605 of the new Civil Code (on usufruct) does not apply to the case at bar; that to give effect to the above-
mentioned testamentary grant, the Philippine Legislature enacted Acts Nos. 3232, 3462 and 3757 creating the Luis Palad High School to be established and maintained with funds coming from said two parcels of land, which institution is still existing and being maintained for the benefit of the inhabitants of the said town; that the testator intended the said testamentary grant or devise of land for the establishment and maintenance of a high school to be permanent and not subject to any resolutory or other condition; that the ownership of the two parcels of land had been irrevocably vested in the province of Quezon as trustee with the municipality of Tayabas as cestui que trustent; that the plaintiffs as alleged heirs of the late Luis Palad are bereft of any interest in said lots; and that the defendants are conscientiously devoting the funds from the said two parcels for the establishment and maintenance of the said high school in accordance with the will of the testator and they have not enriched themselves or benefited therefrom; that the province of Quezon had to appropriate funds for the maintenance of the said high school when the income from the disputed lands became insufficient; that the said high school is not entirely self-supporting; that the alleged average annual net income (P7,000.00) of the two parcels of land is exorbitant and unfounded; that the claims or demands of the plaintiffs had been released or had prescribed; and that the plaintiffs are in estoppel, aside from a counter-claim of P5,000.00 representing damages suffered by reason of the groundless and malicious suit; and accordingly prayed for the dismissal of the complaint and for the confirmation of the valid claim of the defendant governor as trustee and the municipality of Tayabas as cestui que trustent over the two parcels of land in the concept of a permanent testamentary grant for the establishment and perpetual maintenance and operation of the Luis Palad High School.
The plaintiffs filed their answer to the counterclaim dated June 28, 1958 averring, among others, that the defendants being political institutions authorized by law to employ the services of government counsel receiving salary from the government, have not suffered and could not suffer damages.
In a petition dated July 22, 1950, the plaintiffs prayed for the
exclusion from the complaint as party plaintiffs the names of Victoria Queano, Jose Palomera, Concepcion Palomera, Edgardo Obciana, Celso Zafranco and Ernesto Zafranco on the ground that the testator Luis Palad died without ascendants or descendants but survived by his brothers Policarpio, Victor and Leopoldo; that Leopoldo died without issue while Victor died earlier than the testator Luis Palad; that the persons sought to be excluded from the complaint are the grandchildren of Victor Palad who lost whatever successional right he had over the lots in question to Policarpio Palad, the only brother who survived the testator Luis Palad, by right of accretion.
In an order dated July 25, 1958, the Court granted the aforesaid petition for exclusion; but subsequently the co-plaintiffs, whose names were deleted from the complaint, filed on August 29, 1958 a motion for intervention claiming that they are likewise heirs and successors-in-interest of the deceased Luis Palad and his nieces Segunda and Emilia, who are children of Victor Palad. Plaintiffs Miguel Palad, Fe Palad and Galo Nosce filed their answer dated Sept. 4, 1958 to the motion for intervention.
Upon motion of the plaintiffs dated December 12, 1962, for judgment on the pleadings, the trial court rendered on December 28, 1964 the appealed decision.
In a decision rendered on December 10, 1924, the Supreme Court held that the said testamentary disposition in the holographic will of the late Luis Palad dated January 25, 1892 created a trust for the establishment and maintenance of a secondary school to be financed with the income of the two lots aforesaid for the benefit of the inhabitants of the town of Tayabas, thus:
It is a well-known rule that testamentary dispositions must be liberally construed so as to give effect to the intention of the testator as revealed by the will itself. Applying this rule of construction it seems evident that by the clause in question the testator proposed to create a trust for
the benefit of a secondary school to be established in the town of Tayabas, naming as trustee the ayuntamiento of the town or if there be no ayuntamiento, then the civil governor of the Province of Tayabas.
... . There can therefore be but very little doubt that the governor of the Province of Tayabas, as the successor of the civil governor of the province under the Spanish regime, may act as trustee in the present case.
In regard to private trusts it is not always necessary that the cestui que trust should be named, or even be in esse at the time the trust is created in his favor. ... .
xxx xxx xxx
But counsel argues that assuming all this to be true the collateral heirs of the deceased would nevertheless be entitled to the income of the land until the cestui que trust is actually in esse. We do not think so. If the trustee holds the legal title and the devise is valid, the natural heirs of the deceased have no remaining interest in the land except their right to the reversion in the event the devise for some reason should fail, an event which has not as yet taken place. From a reading of the testamentary clause under discussion it seems quite evident that the intention of the testator was to have the income of the property accumulate for the benefit of the proposed school until the same should be established. 2
Implementing the trust thus created, the Philippine Legislature enacted Act No. 3232 approved on November 27, 1925, which established the Luis Palad Rural High School as an agricultural high
school under the direction, supervision and control of the Director of Education, the expenses for the establishment and maintenance of which shall be paid out of the funds left by the late Luis Palad and any other funds which may be donated by the Government or any of its dependencies or any other persons. The Director of Education is authorized to receive from the provincial governor as trustee of the estate of Luis Palad the sums necessary for the proper operation, construction and upkeep of the permanent buildings of the School. Said Act No. 3232 was amended by Act No. 3462 approved on December 7, 1928 to the effect that the funds for the school shall be disbursed subject to the approval by a Board composed of the Director of Education, the governor of Quezon province and the municipal president of the town of Tayabas and that the Director of Education is authorized to receive from the provincial governor as trustee sums necessary for the proper operation, the construction and upkeep of the permanent buildings of the school as well as for the acquisition of land whereon to erect such buildings. Act No. 3757 approved on November 26, 1930 further amended the aforesaid two laws by converting the said agricultural school into a regular high school to be known as the Luis Palad High School.
Appellants claimed that the trial court erred in (1) holding that the Supreme Court ruled in the case of Government vs. Abadilla 3 that the trust was a permanent one created for the benefit of the Luis Palad High School and is a perpetual charge upon the land devised, (2) in not declaring the termination of the usufruct of the trust estate as provided in Art. 515 of the Spanish Civil Code, and (3) in not ordering the dissolution of this trusteeship under Art. 870 of the New Civil Code.
As to the nature of the trust created by the last will and testament of the late Luis Palad, the law of the case is the decision in Government vs. Abadilla, et al., supra, that "the testator proposed to create a trust for the benefit of a secondary school to be established in the town of Tayabas, naming as trustee ... the civil governor of the province of Tayabas (now Quezon) ..." 4 and that "if the trustee holds the legal title and the devise is valid, the natural heirs of the
deceased have no remaining interest in the land except their right to the reversion in the event the devise for some reason should fail, an event which has not as yet taken place. From a reading of the testamentary clause under discussion it seems quite evident that the intention of the testator was to have the income of the property accumulate for the benefit of the proposed school until the same should be established." 5
Article 515 of the Old Spanish Civil Code prohibiting the creation of a usufruct for more than thirty (30) years in favor of any town, province or association, does net apply to the instant case; because what was constituted by the last will and testament of the late Luis Palad is a trust, not a usufruct, as held by the Supreme Court in Government vs. Abadilla, et al., supra.
The pretension of appellants that the trust votes the rule against trusts in perpetuities citing Thompson on Wills, 6 as well as Art. 785 of the Spanish Civil Code 7 providing that dispositions imposing perpetual prohibitions upon alienation shall be inoperative 8 was squarely considered and refuted by the Supreme Court in said Abadilla case, thus: "As the law of trusts has been much more frequently applied in England and in the United States than it has in Spain, We may draw freely upon American precedents in determining the effect of the testamentary trust here under consideration, especially so as the trusts known to American and English equity jurisprudence are derived from the fidei commissa of the Roman law and are based entirely upon Civil Law principles," 9 adding that the testamentary trust is in harmony with Art. 788 of the Spanish Civil Code regarding the obligation of the heir to make periodic investments of specified sums 10 , and finally stating that:
... unless the devise contravenes some other provision of the Code it must be upheld.
We have been unable to find any such provision. There is no violation of any rule against perpetuities: the devise does not prohibit the alienation of the land devised. It does not violate
article 670 of the Code: the making of the will and the continuance or quantity of the estate of the heir are not left in the discretion of a third party. The devisee is not uncertain and the devise is therefore not repugnant to article 750 of the Civil Code. The provincial governor can hardly be regarded as a public establishment within the meaning of article 748 and may therefore receive the inheritance without the previous approval of the Government. 11
Article 870 of the New Civil Code, which regards as void any disposition of the testator declaring all or part of the estate inalienable for more than 20 years, is not violated by the trust constituted by the late Luis Palad; because the will of the testator does not interdict the alienation of the parcels devised. The will merely directs that the income of said two parcels be utilized for the establishment, maintenance and operation of the high school.
Said Article 870 was designed "to give more impetus to the socialization of the ownership of property and to prevent the perpetuation of large holdings which give rise to agrarian troubles." 12 The trust herein involved covers only two lots, which have not been shown to be a large landholding. And the income derived therefrom is being devoted to a public and social purpose — the education of the youth of the land. The use of said parcels therefore is in a sense socialized. There is no hint in the record that the trust has spawned agrarian conflicts.
And even if the trust herein involved falls within the prohibition of the said Article 870, the same cannot be given retroactive effect, the testator having died long before the effectivity of the New Civil Code. 13
Appellants seem to cling to the statement in the decision in the Abadilla case that: "From a reading of the testamentary clause under discussion it seems quite evident that the intention of the testator was to have the income or the property accumulate for the
benefit of the proposed school until the same should be established ." 14
They argue that upon the establishment of the school in 1932, the trust ceased, as the object or purpose thereof had been accomplished.
Appellants' position accords a very restrictive meaning to the term "established" as employed in the aforequoted portion of the decision. The word "established" should not be limited to the initial construction of the high school, which alone will not serve the purpose of the testamentary disposition of the testator, if the maintenance and operation of the school are excluded from its scope. To give full effect to the intention of the testator, the said portion of the decision should be read together with the preceding statement therein that "it seems evident that by the clause in question the testator proposed to create a trust for the benefit of a secondary school to be established in the town of Tayabas, ... ." 15 The benefit that could be derived from a secondary school cannot be enjoyed by the residents of the town of Tayabas if the school is not in operation or functioning. It can only function and operate if the needed funds are provided therefor. This the testator realized only too well and therefore willed that the income from the two lots — Lots Nos. 3464 and 3469 — should be utilized for the maintenance and upkeep of the school including the reconstruction, repairs, or expansion of the physical plants and other facilities as well as hiring of faculty members and administrative staff and personnel of the high school as may be compelled by increase in enrollment and the requirements of efficient instruction.
To establish means "to settle or fix firmly; ... place on a permanent footing" 16 ; or "to originate and secure the permanent existence of, to found, to institute, to create and regulate, as of a colony, estate or other institution or to place upon a secure foundation. 17 Thus to "establish a company for any business means complete and permanent provision for carrying on that business, and putting a company in operation may well include its continued as well as its
first or original operation ... ." 18
The high school edifice and its equipment, it left to deteriorate until they are completely destroyed, would not have any permanent existence, if they are not repaired or reconstructed or not properly maintained. As We ruled in the Abadilla case, 19 the trust ceases only if the devise fails — if the maintenance of the high school is abandoned and its operation stopped. Since the school continues to operate and is being maintained, with the income from the two parcels of land subject of the trust, and donations from the government and other sources, the devise has not yet failed. It should be emphasized that the income alone of the two lots does not suffice to support the school. Under Acts Nos. 3232 and 3462, funds donated by the government, its dependencies and other persons contribute to the establishment, maintenance and upkeep of the institution.
WHEREFORE, the appealed judgment is hereby affirmed, and the appeal is hereby dismissed with costs against petitioners-appellants. So ordered.
Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. 48882 March 17, 1943
FELICIDAD LOPEZ, petitioner-appellee, vs.MARCIANA CONSTANTINO, oppositor-appellant.
Simeon R. Roxas for appellant. Manuel V. Roxas for appellee.
OZAETA, J.:
In January, 1936, appellant sold to her daughter, the appellee, a parcel of land with all the buildings and improvements thereon situated at Nos. 1215, 1217, 1219, and 1221 Juan Luna, Tondo, Manila, in consideration of the sum of P4,000. In civil case No. 49536 of the Court of First Instance of Manila, which was instituted by the present appellant against the present appellee in order that the sale be either rescinded or declared subject to the condition presently to be mentioned, final judgment was rendered in which the court found that the purchase price of the house was far below its assessed or market value and that the sale was subject to the condition that the vendor shall receive from the vendee by way of life pension one half of the rents from Nos. 1215, 1217 and the ground floor of Nos. 1219 and 1221 Juan Luna. By virtue of the judgment said condition was annotated on the back of the certificate of title.
On May 3, 1941, without appellee's fault, the building or buildings above mentioned were totally destroyed by fire. Appellee and appellant, however, collected P5,000 and P1,000, respectively, on the insurance of their respective interests.
After the destruction of the building appellee sought by motion in the land registration case to cancel the annotation on the certificate of title of the condition of the sale above mentioned, on the theory that her obligation to pay appellant a life pension had terminated upon the destruction of the building out of the rents from which said pension was payable. The Fourth Branch of the Court of First Instance of Manila granted the motion over the opposition of the appellant and ordered the cancellation of the annotation and the issuance of a new certificate of title in favor of the appellee without such annotation.
Appellant contends (a) that her right to receive a life pension as a condition of the sale affected not only the building but also the lot on which it was erected and, hence. such right was not extinguished upon the loss of the building; and (b) that the proceeds of the fire insurance policy which appellee collected should be ordered
invested in the construction of another building.
The trial court believed that the life pension was an incumbrance on the building alone, and held that said building having been destroyed without appellee's fault, and there remaining nothing but the lot, "which in Manila constitutes a liability when it has no building, " the life pension could no longer subsist.
It may indeed seem at first blush that the rents out of which the pension was payable were earned by or paid for the building only, independently of the lot on which it was erected; but further reflection will show that such impression is wrong. When both land and building belong to the same owner, as in this case, the rents on the building constitute an earning of the capital invested in the acquisition of both land and building. There can be a land without a building, but there can be no building without land. The land, being an indispensable part of the rented premises, cannot be considered as having no rental value whatsoever.
Since appellant's participation in the rents of the leased premises by way of life pension was part of the consideration of the sale, it cannot be deemed extinguished so long as she lives and so long as the land exists, because that land may be rented to anyone who may desire to erect a building thereon. As a matter of fact, counsel for the appellee stated in open court during the oral argument that the present motion to cancel the annotation on his client's title was occasion by the desire of the appellee to lease the lot in question to a company which intended to establish a gasoline station thereon but which did not want to enter into the contract of lease unless the incumbrance or annotation on appellee's title be first canceled. That only goes to show that the land itself has a rental value. Hence we think it is erroneous to hold, as the trial court did, that the condition of the sale above mentioned attached only to the building and not to the land also, both land and building being the subject of the sale.
This is not an action by appellant to compel appellee to fulfill the said condition of the sale by paying her as a pension one half of the rents of the premises in question. As long as said premises earn no
rents, appellant claims nothing because her right depends upon the existence of the rents. The nonexistence of the rents because of lack of any tenant on the premises cannot produce the extinguishment of appellant's right. The destruction of the building did not make the fulfillment of the condition of the sale forever impossible, inasmuch as a part of the subject of the sale, the land, still exists and may yet be rented.
But even granting that the obligation of the appellee to pay to the appellant during the latter's lifetime one half of the rents of the building in question or of certain portions thereof is an incumbrance on the building alone, such obligation may properly be considered as constituting the appellant a co-usufructuary of said building. Article 469 of the Civil Code provides that usufruct may be created on the whole or a part of the fruits o a thing, in favor of one or more persons, simultaneously or successively, and in any case from or to a certain day, conditionally or unconditionally.
Article 517 read as follows:
Art. 517. — It the usufruct is created on an estate of which a building forms part, and the latter should be destroyed in any manner whatsoever, the usufructuary shall be entitled to enjoy the use of the land and materials.
The same rule shall be applied if the usufruct be created upon the building only and the latter should be destroyed. But, in such case, if the owner desires to construct another building he shall entitled to occupy the ground and to make use of the materials, being obliged to pay the usufructuary during the continuance of the usufruct the interest upon a sum equivalent to the value of the ground and of the materials.
It is clear, therefore, that from whatever aspect the case is viewed, the conclusion is inescapable that appellee's obligation towards appellant under the contract above mentioned has not been
extinguished.
We cannot consider here appellant's contention that the P5,000 collected by appellee from the insurance on the building should be invested in the construction of another building in lieu of the one destroyed by fire so that one half of the rents thereon may be subjected to the payment of appellant's life pension. That matter is entirely beyond the scope of the present proceedings under section 112 of Act No. 496, and can only be determined in an appropriate action. (Fidelity and Surety Co. vs. Ansaldo and Quintos de Ansaldo, 37 Off. Gaz., 1164.)
The order appealed from is reversed and appellee's petition is denied, without any finding as to costs. So ordered.
Yulo, C.J., Moran, Paras and Bocobo, JJ., concur.
Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. L-13361 December 29, 1959
ROSARIO GREY VDA. DE ALBAR and JOSE M. GREY, petitioner, vs.JOSEFA FABIE DE CARANGDANG, respondent.
Jose W. Diokno for petitioners.Ambrosio Padilla, Ciriaco Lopez, Jr., and Santiago P. Blanco for respondent.
BAUTISTA ANGELO, J.:
Doña Rosario Fabie y Grey was the owner of the lot in the City of Manila with a building and improvements thereon erected at 950-956 Ongpin as evidenced by Original Certificate of Title No. 5030, and by a will left by her upon her death which was duly probated she devised the naked ownership of the whole property to Rosario Grey Vda. de Albar, et al. but its usufruct to Josefa Fabie for life.
The pertinent provision of the will reads as follows: "Lego a mi a ahijada menor de edad, Maria Josefa de la Paz Fabie, en usufructo vitalicio las rentas de las fincas . . . en calle Ongpin, Numeros 950 al 956 del Distrito de Santa Cruz, Manila, . . . y prohibio enjane, hipoteque, permuta o transfiera de algun modo mientras que ella sea menor de edad." Said property was registered in the name of Rosario Grey Vda. De Albar, et al. as naked owners of the right of Josefa Fabie as life usufructuary was expressly noted on the new title. Pursuant to the 9th clause of the claim of the will, an encumbrance was likewise noted on the title prohibiting the usufructuary from selling, mortgaging or transferring her right to usufruct during her minority.
During liberation, as a consequence of the fire that gutted the building in many portions of Manila, the building on the Ongpin lot was burned, leaving only the walls and other improvements that were not destroyed by the fire.
One Au Pit, a Chinaman, offered to lease the property for a period of five years a monthly rental of P500.00, at the same time agreeing to construct on the lot a new building worth P30,000 provided the naked owners as well as the usufructuary sign the agreement of the lease. As the usufructuary maintains that she has the exclusive right to cede the property by lease and to receive the full rental value by virtue of her right to usufruct while on the other hand the naked owners maintain that the right of usufruct was extinguished when the building was destroyed, the right of the usufructory being limited to the legal interest on the value of the lot and the materials, in order that the agreement of lease may be affected, the parties
agreed on a temporary compromise whereby the naked owners would receive P100.00, or 20% of the monthly rental of P500.00 and the usufructuary the balance of 80% or P400.00 of said monthly rental. It was likewise stipulated in the agreement that the title to the building to be constructed would accrue to the land upon it completion as an integral part of the lot covered by the transfer certificate of title issued in the name of the naked owners but subject to the right of usufruct of Josefa Fabie. The parties expressly reserved the right to litigate their respective claims after the termination of the contract of lease to determine which of said claims was legally correct.
By reason of the destruction of the building on the Ongpin property, the United States War Damage Commission approved the claim that was presented for the damage caused to the property the amount in the amount of P8,574.00 which was paid to and received by the naked owners. In the meantime, the usufructuary paid the real estate taxes due on the property at Ongpin for the years 1945 to 1952 in the total amount of P1,989.27, as well as the real estate taxes for the years 1953 and 1954 in the annual sum of P295.80.
On October 2, 1952, Rosario Grey Vda. de Albar, et al. commenced the present action to settle the dispute and conflicting views entertained by the parties in line with their agreement and prayed that judgment be rendered declaring that the usufruct in favor of Josefa Fabie is now only limited to receiving the legal interest on the value of the land, and that her right to receive any rental under the contract entered into between the parties has already ceased.
On August 10, 1953, the trial court rendered judgment the dispositive part of which reads:
EN VIRTUD DE TODO LO CUAL, el Juzgaso promulga decision a favor de la demandada usufructuaria, declarando;
(a) Que su usufructo vitalico continua sobre a la finca en Ongpin con derecho exclusivo de percibir durante su vida
la totalidad de sus rentas, sin que los demandantes tengan derecho de in miscuirse en la administracion de dicha finca;
(b) Con derecho de percibir el 6% de la cantidad de P8,574.00 percibidos como indemnizacion de guerra desde Enero 11, 1959;lawphi1.net
(c) Al reembolso de la suma de P1,989.27 pagados o abanados por la demandada como pagos del amillaramiento desde la fecha de la Contestacion, Octubre 22, 1953;
(d) Mas la suma de P2,000.00 como daños y perjuicios en forma de honorarios de abogado y gastos de litigio.
(e) Con las costas a cargo de los demandantes.
On appeal by plaintiffs, the Court of Appeals modified the decision as follows:
Wherefore, we hereby affirm the decision appealed from in so far it holds that appellee's right of life usufruct subsists and is in full force and effect upon the Ongpin lot and the building now existing thereon, and that she is entitled to receive from appellants the legal interest of 6% interest per annum of the amount of P3,272.00 from the time it was actually received from the Philippine War Damage Commission for the whole period of the usufruct and appellants are hereby required to give sufficient security for the payment of such interest, and we hereby reverse said decision, declaring that reimbursement to appellee of the sum of P1,987.27 paid by her for real estate taxes is deferred until the termination of the usufruct, and that she is not entitled to any amount for attorney's fees. Without pronouncement
regarding costs.
Plaintiffs interposed the present petition for review.
The main issue to be determined hinges on the interpretation of that portion of the will which devices to Josefa Fabie all the rentals of the property situated in Ongpin and Sto. Cristo Streets, City of Manila. The pertinent provision of the will reads: "Lego a mi ahijada menor de edad Maria Josefa de la Paz Fabie, en usufructo vitalico las rentas de las fincas situadas en la calle Santo Cristo . . . y en la Calle Ongpin, Numeros 950 al 956 del Distrito de Santa Cruz Manila." Petitioner contend that this provision of the will should be interpreted as constituting only a life usufruct on the rentals of the buildings erected on the lands and that once these buildings are destroyed the usufruct is extinguished. Respondent, on the other hand, contends that the provision should be interpreted as constituting a life usufruct both on the buildings and the lands because the former cannot be separated from the latter.
In Lopez vs. Constantino, 74 Phil., 160, we said:
It may indeed seem at first blush that the rents out of which the pension was payable were earned by or paid for the building only, independently of the lot on which it was erected; but further reflection will show that such impression is wrong. When both land and building belong to the same owner, as in this case, the rents on the building constitute an earning of the capital invested in the acquisition of both land and building. There can be a land without a building, but there can be no building without land. The land, being an indispensable part of the rented premises cannot be considered as having no rental value whatsoever. (Emphasis supplied)
In another part of the decision, this Court said: "Since appellant's participation in the rents of the leased premises by way of life pension was part of the consideration of the sale, it cannot be deemed extinguished so long as she lives and so long as the land
exists, because that land may be rented to anyone who may desire to erect a building thereon." (Emphasis supplied).
From the above, it is clear that when the deceased constituted the life usufruct on the rentals "fincas situadas" in Ongpin and Sto. Cristo streets, she meant to impose the encumbrance both the building and the land on which it is erected for indeed the building cannot exist without the land. And as this Court well said, "The land, being an indispensable part of the rented premises cannot be considered as having no rental value whatsoever." Moreover, in the Spanish language, the term "fincas" has a broad scope; it includes not only building but land as well. (Diccionario Ingles-Español, por Martines Amador) Since only the building was destroyed and the usufruct is constituted not only on the building but on the land as well, then the usufruct is not deemed extinguished by the destruction of the building for under the law usufruct is extinguished only by the total loss of the thing subject of the encumbrance (Article 603, old Civil Code).
In our opinion, this case comes under Article 517 of the same Code which provides: "if the usufruct is constituted on immovable property of which a building forms part, and the latter should be destroyed in any manner whatsoever, the usufractuary shall have a right to make use of the land and materials." This is a temporary measure calculated to maintain the usufruct alive until the very thing that has been destroyed be reconstructed or replaced. The reason is obvious: since the usufruct has not been extinguished by the destruction of the building and the usufruct is for life as in this case, it is but fair that the usufructuary continue to enjoy the use of the land and the materials that they may be constructed on the land. To hold otherwise would be to affirm that the usufruct has been extinguished.
The question that now arises is: Who is called upon to undertake the new construction, and at whose cost? Of course, this is addressed to the wisdom and discretion of the usufructuary who, to all intents and purposes is deemed as the administrator of the property. This has been clarified in the case of Fabie vs. Gutierrez David, 75 Phil.,
536, which was litigated between the same parties and wherein the scope of the same provision of the will has been the subject of interpretation. The following is what this Court said:
Construing said judgment in the light of the ninth clause of the will of the deceased Rosario Fabie Grey, which was quoted in the decision and by which Josefa Fabie was made the usufructuary during her lifetime of the income of the property in question, we find that the said usufructuary has the right to administer the property in question. All the facts of administration — to collect the rents for herself, and to conserve the property by making all necessary repair and praying all the taxes, special assessments, and insurance premiums thereon — where by said judgment vested in the usufructuary. The pretension of the respondent Juan Grey that he is the administrator of the property with the right to choose the tenants and to dictate the conditions of the lease is contrary to both the letter and spirit of the said clause of the will the stipulation of the parties, and the judgment of the court. He cannot manage or administer the property after all the acts of management or administration have been vested by the court, with his consent, in the usufructuary.
In the instant case, however, a happy comprehensive was reached by the parties in view of the offer of one Chinaman to lease the land for five years and to construct thereon a building worth P30,000.00 upon the condition that upon its completion the building would become an integral part of the land in which it is erected. This means that its naked ownership should belong to petitioners and its beneficial ownership to respondent. This is a happy medium which fits into the purpose contemplated in Article 517 above referred to: that the usufruct should continue on the land and the new improvement that may be constructed thereon.
We therefore hold that the Court of Appeals did not err in finding that appellee's right of usufruct subsists and is in full force and effect upon the Ongpin lot and the building existing thereon,
affirming the decision of the trial court.
Petitioners' contention that the Court of Appeals erred in ruling that the damages paid by the War Damage Commission to said petitioners was intended to be an indemnity for the destruction of the building in question and in ordering them to pay respondent 6% interest per annum on the amount of damage paid is also untenable, for it cannot be denied that a war damage payment is intended to replace part of the capital invested in the building destroyed or to assuage somewhat the material loss of its owner. It cannot be maintained that the war damage payments are intended to be a mere gesture of appreciation of the People of the United States of America towards our people for its a well-known fact that countless of our countrymen who suffered in the last war of whose kin-folks lost their lives did not receive any war damage payment because they have no damaged property that could be indemnified. The ruling that 6% interest per annum of such war damage payment should be paid to respondent from the time it was actually received to the end of the life of the usufruct should, in my opinion, be modified in the sense that the obligation should only be valid up to the date the new building was constructed by the Chinaman who leased the property upon the theory that the amount of damage paid by the War Damage Commission which was intended to replace the old building has in turn been replaced by the new. However, the majority as of the opinion that same should also be subject to usufruct for life because it has not been used in the construction that the naked owners may turn over the money to the usufractuary so that she may use it during her lifetime subject to its return to them after her death if they desire to be relived of this encumbrance.
We find, however, merit in the contention that the real estate taxes paid by respondent in her capacity as usufractuary for several years previous to the present litigation should be paid by her, as she did, instead of by petitioners not only because she bound herself to pay such taxes in a formal agreement approved by the court in Civil Case No. 1569 of the Court of First Instance of Manila (Fabie vs. Gutierrez David, supra). In the case, which involved the same parties and the same properties subject to usufruct, the parties
submitted an amicable agreement which was approved by the court wherein the usufructuary, herein respondent, bound herself to pay all the real estate taxes, special assessment and insurance premiums, and make all the necessary repairs on each of the properties covered by the usufruct and in accordance with said agreement, respondent paid all the taxes for the years 1945 to 1954. In said agreement, it was also stipulated that the same "shall be in effect during the term of the usufruct of each of the parties." There is therefore no valid reason why petitioners should now be ordered to reimburse respondent for all the real taxes she had paid on the property. In this respect, the decision of the Court of Appeals should be modified.
Wherefore, with the modification that petitioners should not be made to reimburse the real estate taxes paid by the respondent for the years abovementioned, the decision appealed from is affirmed in all others respects, without pronouncement as to costs.
Labrador, Endencia, Barrera and Gutierrez David, JJ., concur.
Separate Opinions
MONTEMAYOR, J., concurring and dissenting:
I concur in the learned opinion of the majority, penned by Mr. Justice Bautista Angelo, with the exception of that portion thereof on page 10, which holds that the payment to the usufructuary of the 6% interest per annum of the war damage payment should end on the date of the construction of the new building by the Chinaman
who leased the property, from which ruling I dissent.
It will be noticed that both the trial court and the Court of Appeals were of the opinion that said payment of interest should continue during the lifetime of the usufruct. I agree to said opinion. The reason is obvious. The war damage payment is the equivalent of the building destroyed. Since the usufractuary had a right to the use or the fruits of the building, she therefore had the right to the interest on the war damage payment during her lifetime. In my opinion, the construction of the new building does not relieve the owners of the land who received the war damage payment of containing the payment of interest. He said owners of the land used the war damage payment to construct the building, then they would be free from paying interest because the rent of the new building would correspond to the interest on the war damage payment. But the fact is the new building was not constructed by the owners of the land, but by the Chinese lessee.
The majority opinion states that the usufractuary would then be receiving the interest on the war damage payment and also the rent of the new building — a sort of double benefit, which is said to be unfair. That is one view. The other view is that the end of the usufruct, the owners of the land or their heirs shall have received not only equivalent or value of the land building destroyed, in the form of the war damage payment but also the new building constructed absolutely at no cost or expense to them — also a double benefit, which might also be regarded as unfair following the point of view of the majority opinion. So in this respect of double benefit, both parties stand on the same footing. Viewed thus, there is nothing unfair in the arrangement.
Furthermore, we should not lose sight of the fact that usufructuary, as the majority opinion well states has a right to the use and the fruits not only of the improvements, such as buildings on the land, but the land itself. Consequently, anything built on the land would be subject to the usufruct, and the fruits thereof, such as rents, would go to the usufructuary. This naturally includes the interest on the war damage payment for the old building destroyed during the
war, which payment is the equivalent of said building. Had the owners of the land used the sum to add another story or extension of the building constructed thereon by the Chinese lessee, there would surely be no question that any rent therefrom would belong the usufractuary, because then it could be regarded as improvement on the land, which, as already said, is the equivalent or a reproduction of said war damage payment of their own use did not relieve them of the obligation of paying the interest on the same to the usufractuary, because otherwise, they would be having not only the naked ownership of the equivalent of said building, but also its fruits.
The foregoing are some of the reasons for my dissent.
Paras, C.J., Bengzon and Concepcion, JJ., concur.
REYES, J.B.L., J., concurring:
I concur in the opinion of Justice Montemayor, specially because the usufractuary receives only part of the rent of the new building.
Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. L-21809 January 31, 1966
GIL P. POLICARPIO, ET AL., plaintiffs-appellees, vs.JOSE V. SALAMAT, ET AL., defendants. VICENTE ASUNCION, ET AL., defendants-appellants.
Tansinsin and Tansinsin for the defendants-appellants.
Eugenio Balabat for the plaintiffs-appellees.
BAUTISTA ANGELO, J.:
In a duly probated last will and testament of one Damasa Crisostomo, she gave the naked ownership of a fishpond owned by her to her sister Teodorica de la Cruz while its usufruct to the children of her cousins Antonio Perez, Patricia Vicente and Canuto Lorenzo. The fishpond is situated at a barrio of Hagonoy, Bulacan.
The children of Antonio Perez, Patricia Vicente and Canuto Lorenzo turned out to be fourteen, namely: Maria, Pio, Fructuosa, Graciano, Vicente, Victoria, Teodora, and Juan, all surnamed Perez, Apolonio Lorenzo, Bonifacio Lorenzo, Vicente Asuncion, Francisco Lorenzo, Leoncio Perez and Servillano Perez. On the other hand, Teodorica de la Cruz, the naked owner, bequeathed in her will all her rights to the fishpond to Jose V. Salamat.
The fourteen usufructuaries leased the fishpond first to one Gil P. Policarpio who used to give them proportionately the usufruct corresponding to them. During the term of the lease, however, three of the usufructuaries died, namely, Francisco Lorenzo, Leoncio M. Perez and Servillano Perez, and so, upon their death, both the naked owner and the remaining usufructuaries claimed the shares corresponding to the deceased usufructuaries in the amount of P10,714.26. Because of these conflicting claims, the lessee withheld said amount.
Subsequently, on May 31, 1962, the surviving usufructuaries leased the fishpond to one Batas Riego de Dios who, after executing the contract of lease, came to know of the existing conflicting claims, and not knowing to whom of the claimants the shares of the deceased usufructuaries should be paid, said lessee was also constrained to withhold the corresponding part of the usufruct of the property. So on November 15, 1962, the two lessees commenced the present action for interpleader against both the naked owner and surviving usufructuaries to compel them to interplead and litigate
their conflicting claims.
Defendant Jose V. Salamat avers as special defense that he is the successor-in-interest of Teodorica de la Cruz and as such he is entitled to the shares corresponding to the three deceased usufructuaries inasmuch as the usufruct in their favor was automatically extinguished by death and became merged with the naked owner.
The surviving usufructuaries, on the other hand, adhere to the theory that since the usufructuaries were instituted simultaneously by the late Damasa Crisostomo, the death of the three usufructuaries did not extinguish the usufruct, hence, the surviving usufructuaries are entitled to receive the shares corresponding to the deceased usufructuaries, the usufruct to continue until the death of the last usufructuary.
When the case was called for hearing, the parties agreed to submit the case for decision upon the submission of their respective memoranda considering that the issue involved was purely legal in nature, and on March 29, 1963, the trial court rendered decision the dispositive part of which reads as follows:
Wherefore, judgment is hereby rendered declaring defendant Jose V. Salamat entitled to the sum of P10,714.25 representing the shares of the three deceased usufructuaries in the lease rental due from plaintiff Gil Policarpio, ordering the latter to deliver to said defendant the aforesaid amount; and likewise declaring said defendant Jose V. Salamat entitled to share with the eleven usufructuaries in the proceeds of the lease contract executed by them with plaintiff Batas Riego de Dios, ordering the latter to deliver to him such amount as would be equivalent to the shares of the three deceased usufructuaries, with the parties bearing their own costs and expenses of litigation.
The surviving usufructuaries took the present appeal.
1äwphï1.ñët
The important issue to be determined is whether the eleven surviving usufructuaries of the fishpond in question are the ones entitled to the fruits that would have corresponded to the three deceased usufructuaries or the naked owner Jose V. Salamat.
Appellants argue that it is the surviving usufructuaries who are entitled to receive the shares of the deceased by virtue of Article 611 of the Civil Code which provides "A usufruct constituted in favor of several persons living at the time of its constitution shall not be extinguished until the death of the last survivor." On the other hand, appellee contends that the most a usufruct can endure if constituted in favor of a natural person is the lifetime of the usufructuary, because a usufruct is extinguished by the death of the usufructuary unless a contrary intention clearly appears (Article 603, Civil Code). Hence, appellee argues, when the three usufructuaries died, their usufructuary rights were extinguished and whatever rights they had to the fruits reverted to the naked owner.
If the theory of appellee in the sense that the death of the three usufructuaries has the effect of consolidating their rights with that of the naked owner were correct, Article 611 of the Civil Code would be superfluous, because Article 603 already provides that the death of the usufructuary extinguishes the usufruct unless the contrary appears. Furthermore, said theory would cause a partial extinction of the usufruct, contrary to the provisions of Article 611 which expressly provides that the usufruct shall not be extinguished until the death of the last survivor. The theory of appellee cannot, therefore, be entertained.
The well-known Spanish commentators on the counterpart of Article 611 we have copied above which implicitly provides that the share of a usufructuary who dies in the meantime inures to the benefit of the surviving usufructuaries, also uphold the view we here express. Thus, the following is their comment on the matter:
Al comentar el articulo 469 (now Art. 564) hablamos,
entre formas de constitucion del usufructo, del disfrute simultaneo y sucesivo. Ninguna duda cabe, puesto que el derecho de acrecer es aplicable a los usufructuarios, segun el Art. 987 (now Art. 1023), sobre la no extincion del usufructo simultaneo, hasta la muerte de la ultima persona que sobreviva. . . .
. . . Al referirse . . . el articulo 521 (now Art. 611) al usufructo constituido en provecho de varias personas vivas al tiempo de su constitucion, parece referirse al usufructo simultaneo. Sin embargo, es indudable que se refiere tambien al sucesivo, puesto que en esta especie de usufructs el segundo usufructuario no entra en el disfrute, salvo expresion en contrario, hasta la muerte del primero, y es claro que al morir el ultimo llamado, se extingue el usufructo, que es precisamente lo que ordena el presente articulo. (Manresa, Comentarios al Codigo Civil Español, 1931, Tomo IV, par. 486).
. . . refiriendonos al caso de muerte natural, ha de tenerse presente que si son muchos los llamados el usufructo simultaneamente, muerto uno, su porcian acrece a los demas, a no ser que el testador exprese lo contrario, o se infiriera asi del titulo en que se constituye el usufructo, para lo cual puede verse la doctrina de la ley 33, tit. I, lib. VII del Digesto, que habla del derecho de acrecer en el usufructo, y el tit. IV del mismo libro, en que se proponen algunos casos de excepcion.—El usufructo constituido en provecho de varias personas vivas al tiempo de su constitucion, no extinguira hasta la muerte de la ultima que sobreviviere. Cod. Civ. art. 521. (Del Viso, Lecciones Elementales de Derecho Civil, sexta edicion, Tomo I, p. 86.)
Si a varios usufructuarios se les lega la totalidad de una herencia; o una misma parte de ella, se da el derecho de acrecer cuando una de ellos muere despues del testador, sobreviviendo otro y otros?—Como dice la obra anotado,
el Digesto admitio, segun un texto de Paulo, la solucion afirmativa, y Pothier reprodujo dicha doctrina.
La jurisprudencia del Tribunal Supreme español ha admitido y sancionado tambien en la sentencia de 29 de marzo de 1905, aunque no por aplicacion del derecho de acrecer, y si por aplicacion de la voluntad presunta del testador, que babiendose legado el usufructo vitalicio del remanente du sus bienes, por partes iguales, a dos hermanas, debe entenderse que ellas, o cualquiera de las dos que sobreviviere a la otra, habia de disfrutar dicho usufructo, no constituyendo la separacion de partes sino una prevision del testador, para el arreglo del usufructo total durante la vida de los dos usufructuarios. (Colin and Capitant, Curso Elemental del Derecho Civil, 1957, Tomo VIII, pp. 605-606)
It, therefore, appears that the Spanish commentators on the subject are unanimous that there is accretion among usufructuaries who are constituted at the same time when one of them dies before the end of the usufruct. The only exception is if the usufruct is constituted in a last will and testament and the testator makes a contrary provision. Here there is none. On the contrary, the testatrix constituted the usufruct in favor of the children of her three cousins with the particular injunction that they are the only ones to enjoy the same as long as they live, from which it can be implied that, should any of them die, the share of the latter shall accrue to the surviving ones. These provisions of the will are clear. They do not admit of any other interpretation.
Wherefore, the decision appealed from is reversed. The eleven surviving usufructuaries are hereby declared to be entitled to the shares of the three deceased usufructuaries and, hence, as a corollary, appellees Gil P. Policarpio and Batas Riego de Dios are hereby ordered to pay to them the money withheld by them respectively representing the shares of the deceased usufructuaries. No costs.
Bengzon, C.J., Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P., and Zaldivar, JJ., concur.Barrera, J., took no part.
