THIRD DIVISION Baggao, Cagayan (Cagayan lot), covered by Original Certificate of Title No.

1343.[6] When Elena died, Felipe and their children became co-owners of the
[ G.R. No. 187942, September 07, 2016 ]
property.
THE ROMAN CATHOLIC BISHOP OF TUGUEGARAO, PETITIONER, VS.
Felipe then died intestate during his second marriage. Upon his death,
FLORENTINA PRUDENCIO, NOW DECEASED, SUBSTITUTED BY HER HEIRS,
Teodora, Prudencio, Jr. and Leonora executed a Deed of Extra-Judicial
NAMELY: EXEQUIEL, LORENZO, PRIMITIVO, MARCELINO, JULIANA,
Partition of the Estate of the late Felipe with Waiver of Rights in favor of
ALFREDO AND ROSARIO, ALL SURNAMED DOMINGO; AVELINA
Teodora (Extra-Judicial Partition). While the Extra-Judicial Partition
PRUDENCIO, ASSISTED BY HER HUSBAND VICTORIANO DIMAYA; ERNESTO
acknowledged that the Cagayan lot was acquired during the marriage of
PENALBER* AND RODRIGO TALANG; SPOUSES ISIDRO CEPEDA AND
Felipe and Elena, it stated that Felipe and Elena did not have any children
SALVACION DIVINI, NOW DECEASED, SUBSTITUTED BY HER HEIRS,
who could inherit the property; hence, Teodora and her children with Felipe
NAMELY: MARCIAL, PEDRO AND LINA, ALL SURNAMED CEPEDA,
are the only living heirs by operation of law.[7] The Extra-Judicial Partition
RESPONDENTS.
also provided that Prudencio, Jr. and Leonora waived their rights over the
Cagayan lot in favor of their mother Teodora.[8] It was published in the Daily
DECISION
Mirror on October 22 and 29, 1969 and November 5, 1969.[9] Accordingly,
JARDELEZA, J.: title to the Cagayan lot was transferred to Teodora's name under TCT No.
14306.[10]
Assailed in this Petition for Review on Certiorari[1] is the October 21, 2008
Decision[2] and May 11, 2009 Resolution[3] of the Court of Appeals (CA) in On May 16, 1972, Teodora sold the Cagayan lot to respondents Spouses
CA-G.R. CV No. 77100. The CA affirmed with modification the ruling of the Isidro Cepeda and Salvacion Divini (Spouses Cepeda). TCT No. 14306 was
Regional Trial Court–Branch 4 of Tuguegarao City (RTC) declaring as null and therefore cancelled, and TCT No. 184375 was issued in favor of Spouses
void the sale to petitioner of 96,926 square meters (sq. m.) of a lot located Cepeda.[11]
in Baggao, Cagayan covered by Transfer Certificate of Title (TCT) No. 14306
On August 25, 1972, Spouses Cepeda sold the Cagayan lot to petitioner for
and ordering petitioner to reconvey the property to Florentina Prudencio,
P16,500.00.[12] Thereafter, petitioner was issued TCT No. T-20084.[13]
substituted by her heirs, namely: Exequiel, Lorenzo, Primitivo, Marcelino,
Juliana, Alfredo and Rosario, all surnamed Domingo; Avelina Prudencio, On September 15, 1972, respondents-appellees filed a Complaint for
assisted by her husband Victoriano Dimaya; Ernesto Penalber and Rodrigo Partition with Reconveyance[14] against petitioner, Spouses Cepeda and
Talang (respondents-appellees).[4] Teodora, Prudencio, Jr. and Leonora before the RTC. They alleged that they
are the children and grandchildren[15] of Felipe by his first marriage. They
Facts
asserted that upon the death of Elena, they became the owners of Elena's
Felipe Prudencio (Felipe) married twice during his lifetime. With his first conjugal share on the Cagayan lot, while the other undivided half remained
wife, Elena Antonio (Elena), he begot five (5) children, namely: Valentina, with Felipe.[16] Upon the death of Felipe, respondents-appellees then
Eusebia, Paula, Florentina and Avelina. With his second wife, Teodora Abad became owners as well of Felipe's conjugal share in the property, together
(Teodora), he had two (2) children namely: Felipe Prudencio, Jr. (Prudencio, with Teodora, Prudencio, Jr. and Leonora. The Cagayan lot should,
Jr.) and Leonora.[5] therefore, be distributed as follows:

During the marriage of Felipe and Elena, they acquired a 13.0476 hectares Florentina Prudencio - 2.5628 HECTARES;
(or 130,476 sq. m.) parcel of land located at Sitio Abbot, Barrio Imurung,
Avelina Prudencio - 2.5628 HECTARES; Spouses Cepeda maintained that their title over the Cagayan lot was clean
and that they had no knowledge that other persons had interest on it
Ernesto [Penalber] - 2.5628 HECTARES; and
because Teodora's title over the property was clean.[25] They asserted that
Rodrigo Talang - 2.5628 HECTARES; like petitioner, they were purchasers for value and in good faith. Therefore,
petitioner has no cause of action against them.[26]
[Total: 10.2512 hectares]
RTC Ruling

In its Decision[27] dated August 15, 2002, the RTC ruled in favor of
Teodora Abad Vda. De Prudencio - .9319 HECTARE; respondents-appellees, the decretal portion of which reads:
Leonora Prudencio - .9219 HECTARE; and In view of the above consideration, DECISION is hereby rendered:
Felipe Prudencio, Jr. - .9319 HECTARE; 1. Declaring the Deed of Extra Judicial Partition of the Estate of Felipe
[Total: 2.7857 hectares] [17] Prudencio with Waiver of Rights as null and void;

Respondents-appellees posited that they were fraudulently deprived of 2. Declaring plaintiffs as owners pro indiviso of the undivided portion of
their rightful shares in the estate of Felipe and Elena when the Extra-Judicial 99,924.6 sq. meters of the land in suit;
Partition declared Teodora as the sole owner of the Cagayan lot.[18] Thus, 3. That the Sale with respect to the 99,924.6 sq. meters conveyed by
they prayed that they be declared the owners pro indiviso of the undivided Teodora Abad to defendants Isidro Cepeda and Salvacion Divini and later to
portion of 10.2512 hectares of the Cagayan lot, and that this portion be the Roman Catholic Bishop of Tuguegarao is declared null and void;
reconveyed to them. They also sought payment of moral and exemplary
damages and attorney's fees.[19] 4. Ordering defendant Roman Catholic Bishop of Tuguegarao to reconvey to
plaintiffs said portion; and
Petitioner filed an Answer with Cross Claim.[20] It countered that Spouses
Cepeda were in possession of the Cagayan lot at the time they offered it for 5. No pronouncement as to costs.
sale. It denied knowledge of the existence of any defect over Spouses
SO ORDERED.[28]
Cepeda's title.[21] Petitioner stated that in fact, Atty. Pedro R. Perez Jr.
(petitioner's lawyer), verified the title and ownership of Spouses Cepeda The RTC held that it was impossible for Teodora and her children to not
before it purchased the Cagayan lot.[22] Thus, it averred that it was an know that Felipe had children/heirs by his first marriage. It observed that
innocent purchaser for value. Nevertheless, petitioner insisted that Spouses the real property taxes on the Cagayan lot, from 1963 to 1968, were actually
Cepeda should be held liable for the value of the 10.2562 hectares of the paid by respondent-appellee Ernesto Penalber, the grandson of Felipe by
Cagayan lot plus interest and damages, or for the rescission of the sale with her daughter Valentina.[29] Therefore, the execution of the Extra-Judicial
reimbursement of the purchase price plus interest and damages,[23] in case Partition was done in bad faith. In excluding the children of Felipe with
the claim for reconveyance of respondents-appellees is successful. It Elena, the partition is invalid and not binding upon them.[30]
contended that the Deed of Sale between petitioner and Spouses Cepeda
The RTC therefore ruled that Teodora can only sell 33,550 sq. m. of the
expressly stated that the latter shall answer for any claim of any other
Cagayan lot to Spouses Cepeda. In turn, Spouses Cepeda can only sell that
possible heir who might be deprived of their lawful participation in the
much to petitioner, for a person cannot give what he does not
estate of the original registered owner.[24]
own.[31] Hence, the sale of the Cagayan lot to Spouses Cepeda and
subsequently to petitioner is valid only as to the 33,550 sq. m. share of This is a case of exclusion of the rightful heirs in the partition of the estate of
Teodora. The sale of the remaining 99,924.6 sq. m., which properly belongs the deceased, followed by the sale of their shares to third persons who
to the respondents-appellees, was void. Petitioner was ordered to reconvey claim good faith. Both petitioner and Spouses Cepeda consistently contend
99,924.6 sq. m. of the Cagayan lot to respondents-appellees.[32] that they were not aware that any person, other than the seller, has interest
over the Cagayan lot. Thus, they are innocent purchasers for value.
Both petitioner and respondents-appellees appealed to the CA. However,
respondents-appellees' appeal was dismissed outright for failure to file an The preliminary question then is whether the excluded heirs could recover
appellant's brief.[33] what is rightfully theirs from persons who are innocent purchasers for
value. Segura v. Segura[39] teaches that the answer would not depend on the
CA Ruling
good faith or bad faith of the purchaser, but rather on the fact of ownership,
The CA found that the sole issue is whether petitioner is a buyer in good for no one can give what he does not have—nemo dat quod non
faith and for value. In its Decision dated October 21, 2008, the CA resolved habet.[40] Thus, the good faith or bad faith of petitioner is immaterial in
the issue in the negative. resolving the present petition. A person can only sell what he owns or is
authorized to sell; the buyer can as a consequence acquire no more than
The CA noted that petitioner has the burden of proving that it was a what the seller can legally transfer.[41]
purchaser in good faith, which it failed to discharge. While petitioner's
lawyer investigated the title and ownership of Spouses Cepeda and the The Extra-Judicial Partition is
previous owners, he did not look beyond what was declared in the Not Binding on Respondents-
documents and failed to determine if there are other heirs.[34] Spouses Appellees
Cepeda were also not in possession of the Cagayan lot at the time of sale,
Petitioner's title over the Cagayan lot was derived from the title of Spouses
which should have alerted petitioner to inquire further.[35] The CA held that
Cepeda, who in turn obtained their title from Teodora. Teodora, meanwhile,
the fact of fraud on the part of Teodora and her children was admitted by
gained title over the entire Cagayan lot on the basis of the Extra-Judicial
petitioner in its petition, particularly, in its third assignment of error.[36]
Partition dated October 20, 1969.[42] The question therefore is, did that
Thus, the CA affirmed with modification the ruling of the RTC. It declared partition validly pass ownership of the Cagayan lot to Teodora so that she
that petitioner shall retain ownership of only 33,550 sq. m. of the Cagayan had the right to sell the entire lot?
lot, which is the area equivalent to Teodora's share. The remaining 96,926
We answer in the negative. Articles 979, 980 and 981 of the Civil Code of the
sq. m. (as modified by the CA from the RTC's previous ruling of 99,924.6 sq.
Philippines (Civil Code) state that all the children of the deceased shall
m.) should be reconveyed to respondents-appellees.[37]
inherit from him and by implication should participate in the settlement of
Petitioner moved for reconsideration, which was denied; hence, this his/her estate, to wit:
petition[38] which raises the sole issue of whether the action for partition
Art. 979. Legitimate children and their descendants succeed the parents and
with reconveyance filed by respondents-appellees against petitioner should
other ascendants, without distinction as to sex or age, and even if they
prosper.
should come from different marriages.
Our Ruling
An adopted child succeeds to the property of the adopting parents in the
We deny the petition. same manner as a legitimate child.
Art. 980. The children of the deceased shall always inherit from him in their shall be presumed that the decedent left no debts if no creditor files a
own right, dividing the inheritance in equal shares. petition for letters of administration within two (2) years after the death of
the decedent.
Art. 981. Should children of the deceased and descendants of other children
who are dead, survive, the former shall inherit in their own right, and the The fact of the extrajudicial settlement or administration shall be
latter by right of representation. published in a newspaper of general circulation in the manner provided in
the next succeeding section; but no extrajudicial settlement shall be
Thus, the children of Felipe in his two (2) marriages should be included in
binding upon any person who has not participated therein or had no
the execution of the Extra-Judicial Partition. In this case, it is undisputed
notice thereof. (Emphasis supplied.)
that respondents-appellees were children of Felipe by his first marriage.
Teodora, Prudencio, Jr. and Leonora did not deny respondents-appellees' Considering that respondents-appellees have neither knowledge nor
relation with Felipe. Despite this, however, Teodora, Prudencio, Jr. and participation in the Extra-Judicial Partition, the same is a total nullity. It is
Leonora declared in the Extra-Judicial Partition that they are the only not binding upon them. Thus, in Neri v. Heirs of Hadji Yusop Uy,[43] which
living heirs of Felipe by operation of law. They claimed that Felipe had no involves facts analogous to the present case, we ruled that:
child with his first wife Elena, in effect depriving respondents-appellees of
[I]n the execution of the Extra Judicial Settlement of the Estate with
their rightful shares in the estate of their parents. They arrogated upon
Absolute Deed of Sale in favor of spouses Uy, all the heirs of Anunciacion
themselves not only the share of Felipe in the Cagayan lot but also the
should have participated. Considering that Eutropia and Victoria were
shares belonging to respondents-appellees.
admittedly excluded and that then minors Rosa and Douglas were not
In this regard, we cite Rule 74, Section 1 of the Rules of Court which reads: properly represented therein, the settlement was not valid and binding
upon them and consequently, a total nullity.
Sec. 1. Extrajudicial settlement by agreement between heirs.–If the
decedent left no will and no debts and the heirs are all of age, or the xxx
minors are represented by their judicial or legal representatives duly
The effect of excluding the heirs in the settlement of estate was further
authorized for the purpose, the parties may, without securing letters of
elucidated in Segura v. Segura, thus:
administration, divide the estate among themselves as they see fit by
means of a public instrument filed in the office of the register of deeds, It is clear that Section 1 of Rule 74 does not apply to the partition in
and should they disagree, they may do so in an ordinary action of question which was null and void as far as the plaintiffs were concerned.
partition. If there is only one heir, he may adjudicate to himself the entire The rule covers only valid partitions. The partition in the present case was
estate by means of an affidavit filed in the office of the register of deeds. invalid because it excluded six of the nine heirs who were entitled to equal
The parties to an extrajudicial settlement, whether by public instrument or shares in the partitioned property. Under the rule "no extrajudicial
by stipulation in a pending action for partition, or the sole heir who settlement shall be binding upon any person who has not participated
adjudicates the entire estate to himself by means of an affidavit shall file, therein or had no notice thereof." As the partition was a total nullity and
simultaneously with and as a condition precedent to the filing of the public did not affect the excluded heirs, it was not correct for the trial court to
instrument, or stipulation in the action for partition, or of the affidavit in the hold that their right to challenge the partition had prescribed after two
office of the register of deeds, a bond with the said register of deeds, in an years from its execution x x x.[44] (Citations omitted, emphasis supplied.)
amount equivalent to the value of the personal property involved as
certified to under oath by the parties concerned and conditioned upon the
payment of any just claim that may be filed under section 4 of this rule. It
Petitioner, however, submits that the Extra-Judicial Partition is not void which may be allotted to him in the division upon the termination of the co-
because it does not fall within any of the inexistent and void contracts under ownership.
Article 1409[45] of the Civil Code.[46]
Teodora may therefore sell her undivided interest in the Cagayan lot, and
Petitioner is not correct. In Constantino v. Heirs of Pedro Constantino, such disposition shall affect only her pro indiviso share. When she sold the
Jr.,[47] we declared two (2) deeds of extrajudicial settlements as void and entire property to Spouses Cepeda, the latter legally and validly
inexistent for having a purpose or object which is contrary to law. The purchased only the part belonging to Teodora. The sale did not include the
intention of the signatories in both deeds is to exclude their co-heirs of their shares of respondents-appellees, who were not aware of, and did not give
rightful share in the estate of the deceased.[48] Similarly, in the present case, their consent to such sale. Likewise, when Spouses Cepeda sold the entire
Teodora, Prudencio, Jr. and Leonora acted in bad faith when they declared Cagayan lot to petitioner, the spouses only transferred to petitioner
that they are the only living heirs of Felipe, despite knowing that Felipe had Teodora's pro indiviso share. Our ruling in Vda. De Figuracion v. Figuracion-
children in his first marriage. It is well-settled that a deed of extrajudicial Gerilla[51] is on point:
partition executed without including some of the heirs, who had no
Thus, when Carolina sold the entire Lot No. 707 on December 11, 1962 to
knowledge of and consent to the same, is fraudulent and vicious.[49]
Hilaria and Felipa without the consent of her co-owner Agripina, the
Thus, the Extra-Judicial Partition is void under Article 1409 (1) or those disposition affected only Carolina's pro indiviso share, and the vendees,
whose cause, object or purpose is contrary to law, morals, good customs, Hilaria and Felipa, acquired only what corresponds to Carolina's share. A co-
public order or public policy. As a consequence, it has no force and effect owner is entitled to sell his undivided share; hence, a sale of the entire
from the beginning, as if it had never been entered into and it cannot be property by one co-owner without the consent of the other co-owners is
validated either by time or ratification.[50] not null and void and only the rights of the co-owner/seller are
transferred, thereby making the buyer a co-owner of the property.
The Sale to Spouses Cepeda
and Petitioner is Limited to Accordingly, the deed of sale executed by Carolina in favor of Hilaria and
Teodora's Share Felipa was a valid conveyance but only insofar as the share of Carolina in
the co-ownership is concerned. As Carolina's successors-in-interest to the
The nullity of the Extra-Judicial Partition does not automatically result in the
property, Hilaria and Felipa could not acquire any superior right in the
nullity of the sale between (1) Teodora and Spouses Cepeda, and that of (2)
property than what Carolina is entitled to or could transfer or alienate after
Spouses Cepeda and petitioner.
partition.
Respondents-appellees and Teodora (as the surviving heirs of Felipe) are co-
In a contract of sale of co-owned property, what the vendee obtains by
owners of the Cagayan lot. As such, they have full ownership and rights over
virtue of such a sale are the same rights as the vendor had as co-owner,
their pro indiviso shares. Article 493 of the Civil Code defines the rights of a
and the vendee merely steps into the shoes of the vendor as co-
co-owner, to wit:
owner.[52] (Emphasis supplied.)
Art. 493. Each co-owner shall have the full ownership of his part and of the
Simply put, the sale of the Cagayan lot to Spouses Cepeda, then to
fruits and benefits pertaining thereto, and he may therefore alienate, assign
petitioner is valid insofar as the share of Teodora is concerned. In effect,
or mortgage it, and even substitute another person in its enjoyment, except
petitioner merely holds the share of respondents-appellees under an
when personal rights are involved. But the effect of the alienation or the
implied constructive trust.[53] This is true though the TCTs covering the
mortgage, with respect to the co-owners, shall be limited to the portion
entire Cagayan lot were issued in the name of Teodora, Spouses Cepeda and
then petitioner, by virtue of the subsequent sales. The issuance of a their conjugal partnership. Upon Felipe's death, Teodora became entitled to
certificate of title could not vest upon them ownership of the entire one-half (1/2) of the 78,285.6 sq. m. or 39,142.8 sq. m. The remaining half
property; neither could it validate their purchase of the same which is null will compose the estate of Felipe, which will be divided equally among
and void to the extent of the shares of the respondents- Teodora, Prudencio Jr., Leonora and respondents-appellees—each of them
appellees.[54] Registration does not vest title, for it is merely the evidence of receiving one-seventh (1/7) of 39,142.8 sq. m. Teodora then shall receive
such title. Our land registration laws do not give the holder any better title 44,734.63 sq. m. This is further increased by the waiver of Prudencio, Jr. and
than what he actually has.[55] Leonora of their rights over the estate of Felipe, such that the aggregate
share of Teodora will now be equivalent to 55,918.29 sq. m.
As it stands, petitioner which merely steps into the shoes of Teodora, and
respondents-appellees are now the pro indiviso co-owners of the property. For better understanding, the Cagayan lot shall be divided as follows:

Partition of the Cagayan Lot From Elena's From Felipe's

Total
Estate Estate
Notably, each co-owner has the right to ask for the partition of the property
owned in common as no co-owner may be compelled to stay in a co- Florentina
ownership indefinitely.[56] Here, respondents-appellees prayed for the 13,047.6 sq. m. 5,591.83 sq. m. 18,639.43 sq. m.
Prudencio
partition and reconveyance of the Cagayan lot and their rightful shares,
respectively. Avelina Prudencio 13,047.6 sq. m. 5,591.83 sq. m. 18,639.43 sq. m.

Before the partition of the Cagayan lot among the surviving heirs, the Ernesto Penalber 13,047.6 sq. m. 5,591.83 sq. m. 18,639.43 sq. m.
conjugal share of the surviving spouse shall first be deducted from the
Rodrigo Talang 13,047.6 sq. m. 5,591.83 sq. m. 18,639.43 sq. m.
conjugal property of the spouses because the same does not form part of
the estate of the deceased spouse. Under Article 175[57] of the Civil Code, Combined Total:
the conjugal partnership is dissolved upon the death of either spouse. It 74,557.72 sq. m.
shall then be subject to inventory and liquidation, the net remainder of
which shall be divided equally between the husband and the wife.[58] Teodora Abad 0 44,734.63 sq. m. 44,734.63 sq. m.
(surviving spouse)
Here, the Cagayan lot is the conjugal property of Elena and Felipe. Upon the
former's death, one-half (1/2) of the Cagayan lot automatically goes to the Leonora
0 5,591.83 sq. m. 5,591.83 sq. m.
latter as his conjugal share. The remaining one-half (1/2) forms part of the Prudencio
estate of Elena and shall be divided equally between Felipe and his four (4)
Felipe Prudencio, 0 5,591.83 sq. m. 5,591.83 sq. m.
surviving children with Elena, in conformity with Article 996[59] of the Civil
Jr.
Code. Thus, Felipe shall receive one-half (1/2) or 65,238 sq. m. of the Combined Total:
Cagayan lot as his conjugal share and one-fifth (1/5) or 13,047.6 sq. m. of 55,918.29 sq. m.
the same lot as heir of Elena. Simply put, Felipe is entitled to a total of
78,285.6 sq. m. of the Cagayan lot. Meanwhile, respondents-appellees shall Petitioner, whose title over the Cagayan lot is ultimately derived from
receive one-fifth (1/5) or 13,047.6 sq. m. each. Teodora, is therefore entitled only to 55,918.29 sq. m. Thus, petitioner
should return to respondents-appellees the 74,557.72 sq. m. of the Cagayan
When Felipe obtained a second marriage, his 78,285.6 sq. m. share was
brought into his marriage with Teodora, such that the same formed part of
lot which corresponds to respondents-appellees' rightful share as heirs of
Felipe and Elena. Velasco, Jr., (Chairperson), Peralta, and Perez, JJ., concur.
Reyes, J., On official leave.
Meanwhile, this Court is not unmindful of the unfairness resulting from the
above order as petitioner stands to lose 74,557.72 sq. m. of the Cagayan lot,
which it purchased in fee simple from Spouses Cepeda. In the interest of
fairness, justice and equity, we grant petitioner's cross-claim against
Spouses Cepeda. Spouses Cepeda are directed to return to petitioner the
corresponding value paid for the area of 74,557.72 sq. m. with legal
interest.[60]

In fine, the RTC and the CA did not err when they held that respondents-
appellees are entitled to recover their rightful shares in the Cagayan lot.
However, the reconveyance should conform to the distribution of shares set
forth above.

WHEREFORE, the petition is DENIED for lack of merit. The October 21, 2008
Decision and May 11, 2009 Resolution of the Court of Appeals in CA-G.R. CV
No. 77100 are hereby AFFIRMED with MODIFICATION that:

(1)Petitioner is ORDERED to reconvey to respondents-appellees an area of

74,557.72 square meters as their pro indiviso share in the Cagayan lot;
while petitioner shall retain the remaining area of 55,918.29 square
meters.

(2)Spouses Cepeda are ORDERED to return to petitioner the amount paid

corresponding to the 74,557.72 square meters share of respondents-
appellees, with legal interest at the rate of 12% per annum to be
computed from the time petitioner filed its Answer with Cross-Claim
dated October 14, 1972 with the RTC until June 30, 2013.[61] Thereafter,
the legal interest from July 1, 2013 until finality of decision shall be at
6% per annum.[62] After this decision becomes final and executory, the
applicable rate shall be 6% per annum until its full satisfaction.

(3)The case is REMANDED to the Regional Trial Court of Tuguegarao City,

Branch 4, for partition of the Cagayan lot in accordance with this
Decision.