G.R.No.194366.October10,2012.

NAPOLEON D. NERI, ALICIA D. NERIMONDEJAR,

VISMINDA D. NERICHAMBERS, ROSA D. NERI
MILLAN, DOUGLAS D. NERI, EUTROPIA D. ILLUT
COCKINOSandVICTORIAD.ILLUTPIALA,petitioners,
vs. HEIRS OF HADJI YUSOP UY and JULPHA**
IBRAHIMUY,respondents.
Civil Law; Succession; Legitimate Children; Legitimate
children from the first and second marriages are entitled to inherit
pursuant to Articles 979 and 980 of the Civil Code.It bears to
stress that all the petitioners herein are indisputably legitimate
children of Anunciacion from her first and second marriages with
Gonzalo and Enrique, respectively, and consequently, are entitled
to inherit from her in equal shares, pursuant to Articles 979 and
980 of the Civil Code which read: ART. 979. Legitimate children
and their descendants succeed the parents and other ascendants,
without distinction as to sex or age, and even if they should come
from different marriages. xxx ART. 980. The children of the
deceasedshallalways
_______________
*SECONDDIVISION.
**ErroneouslyreferredtoasUlphaintheRegionalTrialCourtsDecision
andJolphainthePetitionforReview.

554

554

SUPREMECOURTREPORTSANNOTATED
Neri vs. Heirs of Hadji Yusop Uy

inherit from him in their own right, dividing the inheritance in

equalshares.
Same; Extrajudicial Settlement of Estates; No extrajudicial
settlement shall be binding upon any person who has not
participated therein or had no notice thereof.In the execution of
the ExtraJudicial Settlement of the Estate with Absolute Deed of
Sale in favor of spouses Uy, all the heirs of Anunciacion should
have participated. Considering that Eutropia and Victoria were
admittedly excluded and that then minors Rosa and Douglas were
not properly represented therein, the settlement was not valid and
binding upon them and consequently, a total nullity. Section 1,
Rule 74 of the Rules of Court provides: SECTION 1. Extrajudicial
settlement by agreement between heirs.x x x The fact of the
extrajudicial settlement or administration shall be published in a
newspaper of general circulation in the manner provided in the
next succeeding section; but no extrajudicial settlement shall be
binding upon any person who has not participated therein or had
nonoticethereof.

Same; Guardianship; A father or mother, as the natural

guardian of the minor under parental authority, does not have the
power to dispose or encumber the property of the latter. Such power
is granted by law only to a judicial guardian of the wards property
and even then only with courts prior approval secured in
accordance with the proceedings set forth by the Rules of
Court.Administration includes all acts for the preservation of the
propertyandthereceiptoffruitsaccordingtothenaturalpurposeof
the thing. Any act of disposition or alienation, or any reduction in
the substance of the patrimony of child, exceeds the limits of
administration. Thus, a father or mother, as the natural guardian
of the minor under parental authority, does not have the power to
dispose or encumber the property of the latter. Such power is
granted by law only to a judicial guardian of the wards property
and even then only with courts prior approval secured in
accordancewiththeproceedingssetforthbytheRulesofCourt.
Same; Ratification; Words and Phrases; Ratification means
that one under no disability voluntarily adopts and gives sanction
to some unauthorized act or defective proceeding, which without his
sanction would not be binding on him.Ratification means that
one under no disability voluntarily adopts and gives sanction to
some
555

VOL.683,OCTOBER10,2012

555

Neri vs. Heirs of Hadji Yusop Uy

unauthorized act or defective proceeding, which without his
sanction would not be binding on him. It is this voluntary choice,
knowingly made, which amounts to a ratification of what was
theretofore unauthorized, and becomes the authorized act of the
party so making the ratification. Once ratified, expressly or
impliedlysuchaswhenthepersonknowinglyreceivedbenefitsfrom
it, the contract is cleansed from all its defects from the moment it
wasconstituted,asithasaretroactiveeffect.
Same; Sales; A person can only sell what he owns, or is
authorized to sell and the buyer can as a consequence acquire no
more than what the seller can legally transfer.Apersoncanonly
sell what he owns, or is authorized to sell and the buyer can as a
consequence acquire no more than what the seller can legally
transfer. On this score, Article 493 of the Civil Code is relevant,
whichprovides:Eachcoownershallhavethefullownershipofhis
part and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with
respect to the coowners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co
ownership.
Same; Prescription; An action or defense for the declaration of
the inexistence of a contract does not prescribe in accordance with
Article 1410 of the Civil Code.On the issue of prescription, the
Court agrees with petitioners that the present action has not
prescribedinsofarasitseekstoannultheextrajudicialsettlement
of the estate. Contrary to the ruling of the CA, the prescriptive

periodof2yearsprovidedinSection1Rule74oftheRulesofCourt
reckonedfromtheexecutionoftheextrajudicialsettlementfindsno
applicationtopetitionersEutropia,VictoriaandDouglas,whowere
deprivedoftheirlawfulparticipationinthesubjectestate.Besides,
an action or defense for the declaration of the inexistence of a
contract does not prescribe in accordance with Article 1410 of the
CivilCode.
Same; Same; The action to recover property held in trust
prescribes after 10 years from the time the cause of action accrues,
which is from the time of actual notice in case of unregistered
deed.The action to recover property held in trust prescribes after
10years
556

556

SUPREMECOURTREPORTSANNOTATED
Neri vs. Heirs of Hadji Yusop Uy

fromthetimethecauseofactionaccrues,whichisfromthetimeof
actual notice in case of unregistered deed. In this case, Eutropia,
VictoriaandDouglasclaimedtohaveknowledgeoftheextrajudicial
settlement with sale after the death of their father, Enrique, in
1994 which spouses Uy failed to refute. Hence, the complaint filed
in1997waswellwithintheprescriptiveperiodof10years.

PETITION for review on certiorari of the decision and

resolutionoftheCourtofAppeals.
ThefactsarestatedintheopinionoftheCourt.
Cesar M. Durezaforpetitioners.
Batacan, Montejo & Vicencio Law Firmforrespondents.
PERLASBERNABE,J.:
InthisPetitionforReviewonCertiorari1underRule45
of the Rules of Court, petitioners Napoleon D. Neri
(Napoleon), Alicia D. NeriMondejar (Alicia), Visminda D.
NeriChambers (Visminda), Rosa D. NeriMillan (Rosa),
Douglas D. Neri (Douglas), Eutropia D. IllutCockinos
(Eutropia), and Victoria D. IllutPiala (Victoria) seek to
reverse and set aside the April 27, 2010 Decision2 and
October18,2010Resolution3oftheCourtofAppeals(CA)in
CAG.R.CVNo.01031MINwhichannulledtheOctober25,
2004Decision4oftheRegionalTrialCourt(RTC)ofPanabo
City, Davao del Norte and instead, entered a new one
dismissing petitioners complaint for annulment of sale,
damages and attorneys fees against herein respondents
heirs of spouses Hadji Yusop Uy and Julpha Ibrahim Uy
(heirsofUy).
_______________
1Rollo,pp.1436.
2 Penned by Associate Justice Rodrigo F. Lim, Jr., with Associate
JusticesLeonciaR.DimagibaandAngelitaA.Gacutan,concurring.Id.,
atpp.4157.
3 Id.,atpp.7576.
4PennedbyJudgeJesusL.Grageda.Id.,atpp.151155.
557

VOL.683,OCTOBER10,2012

557

Neri vs. Heirs of Hadji Yusop Uy

The Facts
Duringherlifetime,AnunciacionNeri(Anunciacion)had
sevenchildren,two(2)fromherfirstmarriagewithGonzalo
Illut(Gonzalo),namely:EutropiaandVictoria,andfive(5)
from her second marriage with Enrique Neri (Enrique),
namely: Napoleon, Alicia, Visminda, Douglas and Rosa.
Throughout the marriage of spouses Enrique and
Anunciacion, they acquired several homestead properties
withatotalareaof296,555squaremeterslocatedinSamal,
Davao del Norte, embraced by Original Certificate of Title
(OCT) Nos. (P7998) P21285, (P14608) P51536 and P
20551 (P8348)7 issued on February 15, 1957, August 27,
1962andJuly7,1967,respectively.
OnSeptember21,1977,Anunciaciondiedintestate.Her
husband,Enrique,inhispersonalcapacityandasnatural
guardianofhisminorchildrenRosaandDouglas,together
with Napoleon, Alicia, and Visminda executed an Extra
Judicial Settlement of the Estate with Absolute Deed of
Sale8 on July 7, 1979, adjudicating among themselves the
saidhomesteadproperties,andthereafter,conveyingthem
tothelatespousesHadjiYusopUyandJulphaIbrahimUy
(spousesUy)foraconsiderationofP80,000.00.
On June 11, 1996, the children of Enrique filed a
complaint for annulment of sale of the said homestead
properties against spouses Uy (later substituted by their
heirs) before the RTC, docketed as Civil Case No.9628,
assailingthevalidityofthesaleforhavingbeensoldwithin
theprohibitedperiod.Thecomplaintwaslateramendedto
include Eutropia and Victoria as additional plaintiffs for
having been excluded and deprived of their legitimes as
childrenofAnunciacionfromherfirstmarriage.
_______________
5Id.,atpp.113114.
6Id.,atpp.115116.
7Id.,atpp.117118.
8Id.,atpp.9296.
558

558

SUPREMECOURTREPORTSANNOTATED
Neri vs. Heirs of Hadji Yusop Uy

Intheiramendedanswerwithcounterclaim,theheirsof
Uy countered that the sale took place beyond the 5year
prohibitory period from the issuance of the homestead
patents. They also denied knowledge of Eutropia and
Victorias exclusion from the extrajudicial settlement and
sale of the subject properties, and interposed further the
defensesofprescriptionandlaches.
The RTC Ruling
On October 25, 2004, the RTC rendered a decision
ordering,amongothers,theannulmentoftheExtrajudicial
SettlementoftheEstatewithAbsoluteDeedofSale.Itruled

thatwhilethesaleoccurredbeyondthe5yearprohibitory
period, the sale is still void because Eutropia and Victoria
were deprived of their hereditary rights and that Enrique
had no judicial authority to sell the shares of his minor
children,RosaandDouglas.
Consequently, it rejected the defenses of laches and
prescriptionraisedbyspousesUy,whoclaimedpossessionof
the subject properties for 17 years, holding that co
ownershiprightsareimprescriptible.
The CA Ruling
On appeal, the CA reversed and set aside the ruling of
the RTC in its April 27, 2010 Decision and dismissed the
complaint of the petitioners. It held that, while Eutropia
and Victoria had no knowledge of the extrajudicial
settlement and sale of the subject properties and as such,
were not bound by it, the CA found it unconscionable to
permittheannulmentofthesaleconsideringspousesUys
possession thereof for 17 years, and that Eutropia and
Victoria belatedly filed their action in 1997, or more than
twoyearsfromknowledgeoftheirexclusionasheirsin1994
whentheirstepfatherdied.It,however,didnotprecludethe
excludedheirsfromrecoveringtheirlegitimesfromtheirco
heirs.
559

VOL.683,OCTOBER10,2012

559

Neri vs. Heirs of Hadji Yusop Uy

Similarly, the CA declared the extrajudicial settlement
andthesubsequentsaleasvalidandbindingwithrespectto
Enrique and his children, holding that as coowners, they
havetherighttodisposeoftheirrespectivesharesasthey
consider necessary or fit.While recognizing Rosa and
Douglas to be minors at that time, they were deemed to
haveratifiedthesalewhentheyfailedtoquestionitupon
reachingtheageofmajority.Italsofoundlachestohaveset
inbecauseoftheirinactionforalongperiodoftime.
The Issues
In this petition, petitioners impute to the CA the
followingerrors:
I.WHEN IT UPHELD THE VALIDITY OF THE
EXTRAJUDICIAL SETTLEMENT OF THE ESTATE WITH
ABSOLUTE DEED OF SALE AS FAR AS THE SHARES OF
EUTROPIA AND VICTORIA WERE CONCERNED, THEREBY
DEPRIVINGTHEMOFTHEIRINHERITANCE;
II.WHEN IT DID NOT NULLIFY OR ANNUL THE EXTRA
JUDICIAL SETTLEMENT OF THE ESTATE WITH ABSOLUTE
DEED OF SALE WITH RESPECT TO THE SHARES OF ROSA
AND DOUGLAS, THEREBY DEPRIVING THEM OF THEIR
INHERITANCE;and
III.WHENITFOUNDTHATLACHESORPRESCRIPTIONHAS
SETIN.

The Ruling of the Court

Thepetitionismeritorious.
It bears to stress that all the petitioners herein are

indisputably legitimate children of Anunciacion from her

first and second marriages with Gonzalo and Enrique,
respectively,andconsequently,areentitledtoinheritfrom
herinequalshares,pursuanttoArticles979and980ofthe
CivilCodewhichread:
560

560

SUPREMECOURTREPORTSANNOTATED
Neri vs. Heirs of Hadji Yusop Uy

ART.979.Legitimate children and their descendants succeed

the parents and other ascendants, without distinction as to sex or
age,andeveniftheyshouldcomefromdifferentmarriages.
xxx
ART.980.The children of the deceased shall always inherit
from him in their own right, dividing the inheritance in equal
shares.

Assuch,uponthedeathofAnunciaciononSeptember21,
1977, her children and Enrique acquired their respective
inheritances,9entitlingthemtotheirproindivisosharesin
herwholeestate,asfollows:
Enrique
Eutropia
Victoria
Napoleon
Alicia
Visminda
Rosa
Douglas

9/16(1/2oftheconjugalassets+1/16)
1/16
1/16
1/16
1/16
1/16
1/16
1/16

Hence,intheexecutionoftheExtrajudicialSettlementof
the Estate with Absolute Deed of Sale in favor of spouses
Uy, all the heirs of Anunciacion should have participated.
Considering that Eutropia and Victoria were admittedly
excludedandthatthenminorsRosaandDouglaswerenot
properly represented therein, the settlement was not valid
andbindinguponthemandconsequently,atotalnullity.
Section1,Rule74oftheRulesofCourtprovides:
SECTION1.Extrajudicial settlement by agreement between
heirs.xxx
The fact of the extrajudicial settlement or administration
shall be published in a newspaper of general circulation in
the
_______________
9CIVIL CODE,Art.777.
561

VOL.683,OCTOBER10,2012

561

Neri vs. Heirs of Hadji Yusop Uy

manner provided in the next succeeding section; but no
extrajudicial settlement shall be binding upon any person
who has not participated therein or had no notice thereof.
(Underscoringadded)

The effect of excluding the heirs in the settlement of

estatewasfurtherelucidatedinSegura v. Segura,10thus:
ItisclearthatSection1ofRule74doesnotapplytothepartition
in question which was null and void as far as the plaintiffs were
concerned.Therulecoversonlyvalidpartitions.Thepartitioninthe
present case was invalid because it excluded six of the nine heirs
whowereentitledtoequalsharesinthepartitionedproperty.Under
the rule no extrajudicial settlement shall be binding upon any
person who has not participated therein or had no notice thereof.
As the partition was a total nullity and did not affect the excluded
heirs,itwasnotcorrectforthetrialcourttoholdthattheirrightto
challenge the partition had prescribed after two years from its
execution

However, while the settlement of the estate is null and

void,thesubsequentsaleofthesubjectpropertiesmadeby
Enrique and his children, Napoleon, Alicia and Visminda,
infavoroftherespondentsisvalidbutonlywithrespectto
theirproportionatesharestherein.Itcannotbedeniedthat
these heirs have acquired their respective shares in the
properties of Anunciacion from the moment of her death11
and that, as owners thereof, they can very well sell their
undividedshareintheestate.12
With respect to Rosa and Douglas who were minors at
the time of the execution of the settlement and sale, their
naturalguardianandfather,Enrique,representedthemin
thetransaction.However,onthebasisofthelawsprevailing
atthat
_______________
10G.R.No.L29320,September19,1988,165SCRA367,373.
11Supranote9.
12Flora v. Prado,G.R.No.156879,January20,2004,420SCRA396,
404.
562

562

SUPREMECOURTREPORTSANNOTATED
Neri vs. Heirs of Hadji Yusop Uy

time, Enrique was merely clothed with powers of

administration and bereft of any authority to dispose of
their2/16sharesintheestateoftheirmother,Anunciacion.
Articles320and326oftheCivilCode,thelawsinforce
at the time of the execution of the settlement and sale,
provide:
ART.320.Thefather,orinhisabsencethemother,isthelegal
administratorofthepropertypertainingtothechildunderparental
authority. If the property is worth more than two thousand pesos,
thefatherormothershallgiveabondsubjecttotheapprovalofthe
CourtofFirstInstance.
ART.326.When the property of the child is worth more than
two thousand pesos, the father or mother shall be considered a
guardian of the childs property, subject to the duties and
obligationsofguardiansundertheRulesofCourt.

Corollarily,Section7,Rule93oftheRulesofCourtalso

provides:
SEC.7.Parents as Guardians.When the property of the
childunderparentalauthorityisworthtwothousandpesosorless,
the father or the mother, without the necessity of court
appointment,shallbehislegalguardian.Whenthepropertyofthe
child is worth more than two thousand pesos, the father or the
mothershallbeconsideredguardianofthechildsproperty,withthe
dutiesandobligationsofguardiansundertheseRules,andshallfile
the petition required by Section 2 hereof. For good reasons, the
courtmay,however,appointanothersuitablepersons.

Administration includes all acts for the preservation of

the property and the receipt of fruits according to the
natural purpose of the thing. Any act of disposition or
alienation, or any reduction in the substance of the
patrimony of child, exceeds the limits of administration.13
Thus, a father or mother, as the natural guardian of the
minorunderparental
_______________
13 Tolentino, Commentaries and Jurisprudence on the Civil Code of
the Philippines,Vol.1,p.644(1974).
563

VOL.683,OCTOBER10,2012

563

Neri vs. Heirs of Hadji Yusop Uy

authority,doesnothavethepowertodisposeorencumber
thepropertyofthelatter.Suchpowerisgrantedbylawonly
toajudicialguardianofthewardspropertyandeventhen
onlywithcourtspriorapprovalsecuredinaccordancewith
theproceedingssetforthbytheRulesofCourt.14
Consequently,thedisputedsaleenteredintobyEnrique
in behalf of his minor children without the proper judicial
authority,unlessratifiedbythemuponreachingtheageof
majority,15 is unenforceable in accordance with Articles
1317and1403(1)oftheCivilCodewhichprovide:
ART.1317.No one may contract in the name of another
without being authorized by the latter or unless he has by law a
righttorepresenthim.
A contract entered into in the name of another by one who has
no authority or legal representation, or who has acted beyond his
powers, shall be unenforceable, unless it is ratified, expressly or
impliedly, by the person on whose behalf it has been executed,
beforeitisrevokedbytheothercontractingparty.
ART.1403.The following contracts are unenforceable, unless
theyareratified:
(1)Thoseenteredintothenameofanotherpersonbyonewho
has been given no authority or legal representation, or who has
actedbeyondhispowers;
xxx

Ratification means that one under no disability

voluntarilyadoptsandgivessanctiontosomeunauthorized
act or defective proceeding, which without his sanction
would not be binding on him. It is this voluntary choice,

knowingly made, which amounts to a ratification of what

wastheretoforeunauthorized,andbecomestheauthorized
actofthepartysomak
_______________
14 Herrera, Remedial Law, Vol. IIIA, p. 279 (2005), citing Bautista
and United States Veterans Administration vs. Bustos,G.R.No.L4155,
December17,1952,92Phil.327.
15Ibaez v. Rodriguez,47Phil554,563(1925).
564

564

SUPREMECOURTREPORTSANNOTATED
Neri vs. Heirs of Hadji Yusop Uy

ing the ratification.16 Once ratified, expressly or impliedly

such as when the person knowingly received benefits from
it, the contract is cleansed from all its defects from the
momentitwasconstituted,17asithasaretroactiveeffect.
Records, however, show that Rosa had ratified the
extrajudicialsettlementoftheestatewithabsolutedeedof
sale. In Napoleon and Rosas Manifestation18 before the
RTCdatedJuly11,1997,theystated:
Concerningthesaleofourparceloflandexecutedbyourfather,
Enrique Neri concurred in and conformed to by us and our other
twosistersandbrother(theotherplaintiffs),infavorofHadjiYusop
Uy and his spouse Hadja Julpa Uy on July 7, 1979, we both
confirmedthatthesamewasvoluntaryandfreelymadebyallofus
and therefore the sale was absolutely valid and enforceable as far
as we all plaintiffs in this case are concerned; (Underscoring
supplied)

In their June 30, 1997 JointAffidavit,19 Napoleon and

Rosaalsoalleged:
Thatwearesurprisedthatournamesareincludedinthiscase
since we do not have any intention to file a case against Hadji
YusopUyandJulphaIbrahimUyandtheirfamilyandwerespect
andacknowledgethevalidityoftheExtrajudicialSettlementofthe
Estate with Absolute Deed of Sale dated July 7, 1979;
(Underscoringsupplied)

Clearly,theforegoingstatementsconstitutedratification
ofthesettlementoftheestateandthesubsequentsale,thus,
purgingallthedefectsexistingatthetimeofitsexecution
andlegitimizingtheconveyanceofRosas1/16shareinthe
_______________
16 Coronel v. Constantino, G.R. No. 121069, February 7, 2003, 397
SCRA128,134,citingMaglucotAw v. Maglucot,329SCRA78,94(2000).
17CIVILCODE ,Art.1396.
18Originalrecords,pp.8283.
19Id.,atpp.8485.
565

VOL.683,OCTOBER10,2012

565

Neri vs. Heirs of Hadji Yusop Uy

estateofAnunciaciontospousesUy.Thesame,however,is
nottruewithrespecttoDouglasforlackofevidenceshowing
ratification.
Considering,thus,thattheextrajudicialsettlementwith
sale is invalid and therefore, not binding on Eutropia,
VictoriaandDouglas,onlythesharesofEnrique,Napoleon,
Alicia,VismindaandRosainthehomesteadpropertieshave
effectively been disposed in favor of spouses Uy. A person
canonlysellwhatheowns,orisauthorizedtosellandthe
buyercanasaconsequenceacquirenomorethanwhatthe
sellercanlegallytransfer.20Onthisscore,Article493ofthe
CivilCodeisrelevant,whichprovides:
Each coowner shall have the full ownership of his part and of
the fruits and benefits pertaining thereto, and he may therefore
alienate,assignormortgageit,andevensubstituteanotherperson
initsenjoyment,exceptwhenpersonalrightsareinvolved.Butthe
effect of the alienation or the mortgage, with respect to the co
owners,shallbelimitedtotheportionwhichmaybeallottedtohim
inthedivisionupontheterminationofthecoownership.

Consequently, spouses Uy or their substituted heirs

becamepro indiviso coowners of the homestead properties
with Eutropia, Victoria and Douglas, who retained title to
their respective 1/16 shares. They were deemed to be
holding the 3/16 shares of Eutropia, Victoria and Douglas
underanimpliedconstructivetrustforthelattersbenefit,
conformably with Article 1456 of the Civil Code which
states:ifpropertyisacquiredthroughmistakeorfraud,the
personobtainingitis,byforceoflaw,consideredatrusteeof
animpliedtrustforthebenefitofthepersonfromwhomthe
propertycomes.Assuch,itisonlyfair,justandequitable
that the amount paid for their shares equivalent to
P5,000.0021 each or a total of P15,000.00 be returned to
spousesUywithlegalinterest.
_______________
20Supranote10,atp.374.
21P80,000.00(purchaseprice)16shares=P5,000.00.
566

566

SUPREMECOURTREPORTSANNOTATED
Neri vs. Heirs of Hadji Yusop Uy

On the issue of prescription, the Court agrees with

petitionersthatthepresentactionhasnotprescribedinso
far as it seeks to annul the extrajudicial settlement of the
estate. Contrary to the ruling of the CA, the prescriptive
periodof2yearsprovidedinSection1Rule74oftheRules
of Court reckoned from the execution of the extrajudicial
settlement finds no application to petitioners Eutropia,
Victoria and Douglas, who were deprived of their lawful
participation in the subject estate. Besides, an action or
defense for the declaration of the inexistence of a contract
does not prescribe in accordance with Article 1410 of the

CivilCode.
However, the action to recover property held in trust
prescribes after 10 years from the time the cause of action
accrues,22whichisfromthetimeofactualnoticeincaseof
unregistered deed.23 In this case, Eutropia, Victoria and
Douglas claimed to have knowledge of the extrajudicial
settlementwithsaleafterthedeathoftheirfather,Enrique,
in 1994 which spouses Uy failed to refute. Hence, the
complaint filed in 1997 was well within the prescriptive
periodof10years.
WHEREFORE, the instant petition is GRANTED. The
April27,2010DecisionandOctober18,2010Resolutionof
theCourtofAppealsareREVERSEDandSETASIDEand
anewjudgmentisentered:
1.DeclaringtheExtrajudicialSettlementoftheEstate
ofAnunciacionNeriNULLandVOID;
2.Declaring the Absolute Deed of Sale in favor of the
late spouses Hadji Yusop Uy and Julpha Ibrahim Uy as
regards the 13/16 total shares of the late Enrique Neri,
NapoleonNeri,AliciaD.NeriMondejar,VismindaD.Neri
ChambersandRosaD.NeriMillanVALID;
3.Declaring Eutropia D. IllutCockinos, Victoria D.
IllutPialaandDouglasD.NeriastheLAWFULOWNERS
ofthe
_______________
22CIVILCODE ,Art.1144.
23Aznar Brothers Realty Company vs. Aying, G.R. No. 144773, May
16,2005,458SCRA496,511.
567

VOL.683,OCTOBER10,2012

567

Neri vs. Heirs of Hadji Yusop Uy

3/16 portions of the subject homestead properties, covered
by Original Certificate of Title Nos. (P7998) P2128, (P
14608)P5153andP20551(P8348);and
4.OrderingtheestateofthelateEnriqueNeri,aswell
as Napoleon Neri, Alicia D. NeriMondejar, Visminda D.
NeriChambers and Rosa D. NeriMillan to return to the
respondents jointly and solidarily the amount paid
corresponding to the 3/16 shares of Eutropia, Victoria and
Douglas in the total amount of P15,000.00, with legal
interest at 6% per annum computed from the time of
paymentuntilfinalityofthisdecisionand12%per annum
thereafteruntilfullypaid.
Nopronouncementastocosts.
SOORDERED.
Carpio (Chairperson), Brion, Del CastilloandPerez, JJ.,
concur.
Petition granted, judgment and resolution reversed and
set aside.
Notes.An Extrajudicial Settlement of Estate with
AbsoluteSalepartakesofthenatureofacontract,hence,for

itsvalidity,eachmustcomplywiththerequisitesprescribed
inArticle1318oftheCivilCode,namely(1)consentofthe
contracting parties; (2) object certain, which is the subject
matterofthecontract;and(3)causeoftheobligationwhich
isestablished.(Baladad vs. Rublico,595SCRA125[2009])
Anextrajudicialsettlementisacontractanditisawell
entrenched doctrine that the law does not relieve a party
from the effects of a contract; In the construction or
interpretationofaninstrument,theintentionoftheparties
is primordial and is to be pursued. (Tayco vs. Heirs of
Concepcion TaycoFlores,637SCRA742[2010])
o0o

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