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 BAILON-CASILAO VS CA
GR 78178 APRIL 15, 1988

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 78178 April 15, 1988

DELIA BAILON-CASILAO, LUZ PAULINO-ANG, EMMA PAULINO-YBANEZ, NILDA

PAULINO-TOLENTINO, and SABINA BAILON, petitioners, 
vs.
THE HONORABLE COURT OF APPEALS and CELESTINO AFABLE, respondents.

Veronico E. Rubio for petitioners.

Mario G. Fortes for private-respondent.

CORTES, J.:

The fate of petitioners' claim over a parcel of land rests ultimately on a determination of whether
or not said petitioners are chargeable with such laches as may effectively bar their present
action.

The petitioners herein filed a case for recovery of property and damages with notice of lis
pendens on March 13, 1981 against the defendant and herein private respondent, Celestino
Afable. The parcel of land involved in this case, with an area of 48,849 square meters, is
covered by Original Certificate of Title No. 1771 issued on June 12, 1931, in the names of
Rosalia, Gaudencio, Sabina Bernabe, Nenita and Delia, all surnamed Bailon, as co-owners,
each with a 1/6 share. Gaudencio and Nenita are now dead, the latter being represented in this
case by her children. Luz, Emma and Nilda. Bernabe went to China in 1931 and had not been
heard from since then [Decision of the Court of Appeals, Rollo, p. 39].

It appears that on August 23, 1948, Rosalia Bailon and Gaudencio Bailon sold a portion of the
said land consisting of 16,283 square meters to Donato Delgado. On May 13, 1949, Rosalia
Bailon alone sold the remainder of the land consisting of 32,566 square meters to Ponciana V.
Aresgado de Lanuza. On the same date, Lanuza acquired from Delgado the 16,283 square
meters of land which the latter had earlier acquired from Rosalia and Gaudencio. On December
3, 1975, John Lanuza, acting under a special power of attorney given by his wife, Ponciana V.
Aresgado de Lanuza, sold the two parcels of land to Celestino Afable, Sr.

In all these transfers, it was stated in the deeds of sale that the land was not registered under
the provisions of Act No. 496 when the fact is that it is. It appears that said land had been
successively declared for taxation first, in the name of Ciriaca Dellamas, mother of the
registered co-owners, then in the name of Rosalia Bailon in 1924, then in that of Donato
Delgado in 1936, then in Ponciana de Lanuza's name in 1962 and finally in the name of
Celestino Afable, Sr. in 1983.

In his answer to the complaint filed by the herein petitioners, Afable claimed that he had
acquired the land in question through prescription and contended that the petitioners were guilty
of laches.He later filed a third-party complaint against Rosalia Bailon for damages allegedly
suffered as a result of the sale to him of the land.

After trial, the lower court rendered a decision:

1. Finding and declaring Celestino Afable, a co-owner of the land described in

paragraph III of the complaint having validly bought the two-sixth (2/6) respective
undivided shares of Rosalia Bailon and Gaudencio Bailon;

2. Finding and declaring the following as pro-indiviso co-owners, having 1/6

share each, of the property described in paragraph III of the complaint, to wit:

a. Sabina Bailon

b. Bernabe Bailon

c. Heirs of Nenita Bailon-Paulino

d. Delia Bailon-Casilao;

3. Ordering the segregation of the undivided interests in the property in order to

terminate co-ownership to be conducted by any Geodetic Engineer selected by
the parties to delineate the specific part of each of the co-owners.

4. Ordering the defendant to restore the possession of the plaintiffs respective

shares as well as all attributes of absolute dominion;

5. Ordering the defendant to pay the following:

a. P5,000.00 as damages;

b. P2,000.00 as attorney's fees and;

c. to pay the costs.

[Decision of the Trial Court, Rollo, p. 37-38].

On appeal, the respondent Court of Appeals affirmed the decision of the lower court insofar as it
held that prescription does not he against plaintiffs-appellees because they are co-owners of the
original vendors. However, the appellate court declared that, although registered property
cannot be lost by prescription, nevertheless, an action to recover it may be barred by laches,
citing the ruling in Mejia de Lucaz v. Gamponia [100 Phil. 277 (1956)]. Accordingly, it held the
petitioners guilty of laches and dismissed their complaint. Hence, this petition for review on
certiorari of the decision of the Court of Appeals.
The principal issue to be resolved in this case concerns the applicability of the equitable
doctrine of laches. Initially though, a determination of the effect of a sale by one or more co-
owners of the entire property held in common without the consent of all the co-owners and of
the appropriate remedy of the aggrieved co-owners is required.

The rights of a co-owner of a certain property are clearly specified in Article 493 of the Civil
Code.Thus:

Art. 493. Each co-owner shall have the full ownership of his part and of the acts
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 mortgage, with
respect to the co-owners, shall be limited to the portion which may be allotted to
him in the division upon the termination of the co-ownership. [Emphasis
supplied.]

As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his,
the sale will affect only his own share but not those of the other co-owners who did not consent
to the sale [Punsalan v. Boon Liat 44 Phil. 320 (1923)]. This is because under the
aforementioned codal provision, the sale or other disposition affects only his undivided share
and the transferee gets only what would correspond to his grantor in the partition of the thing
owned in common.[Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of the
sales made by Rosalia and Gaudencio Bailon which are valid with respect to their proportionate
shares, and the subsequent transfers which culminated in the sale to private respondent
Celestino Afable, the said Afable thereby became a co-owner of the disputed parcel of land as
correctly held by the lower court since the sales produced the effect of substituting the buyers in
the enjoyment thereof [Mainit v. Bandoy, 14 Phil. 730 (1910)].

From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided
share, a sale of the entire property by one co-owner without the consent of the other co-owners
is not null and void. However, only the rights of the co-owner-seller are transferred, thereby
making the buyer a co-owner of the property.

The proper action in cases like this is not for the nullification of the sale or for the recovery of
possession of the thing owned in common from the third person who substituted the co-owner
or co-owners who alienated their shares, but the DIVISION of the common property as if it
continued to remain in the possession of the co-owners who possessed and administered
it [Mainit v. Bandoy, supra.]

Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent
were not secured in a sale of the entire property as well as in a sale merely of the undivided
shares of some of the co-owners is an action. for PARTITION under Rule 69 of the Revised
Rules of Court. Neither recovery of possession nor restitution can be granted since the
defendant buyers are legitimate proprietors and possessors in joint ownership of the common
property claimed [Ramirez v. Bautista, supra].

As to the action for petition, neither prescription nor laches can be invoked.

In the light of the attendant circumstances, defendant-appellee's defense of prescription is a

vain proposition. Pursuant to Article 494 of the Civil Code, '(n)o co-owner shall be obliged to
remain in the co-ownership. Such co-owner may demand at anytime the partition of the thing
owned in common, insofar as his share is concerned.' [Emphasis supplied.] In Budiong v.
Bondoc [G.R. No. L-27702, September 9, 1977, 79 SCRA 241, this Court has interpreted said
provision of law to mean that the action for partition is imprescriptible or cannot be barred by
prescription. For Article 494 of the Civil Code explicitly declares: "No prescription shall lie in
favor of a co-owner or co- heir so long as he expressly or impliedly recognizes the co-
ownership."

Furthermore, the disputed parcel of land being registered under the Torrens System, the
express provision of Act No. 496 that '(n)o title to registered land in derogation to that of the
registered owner shall be acquired by prescription or adverse possession' is squarely
applicable. Consequently, prescription will not lie in favor of Afable as against the petitioners
who remain the registered owners of the disputed parcel of land.

It is argued however, that as to the petitioners Emma, Luz and Nelda who are not the registered
co-owners but merely represented their deceased mother, the late Nenita Bailon, prescription
lies.Respondents bolster their argument by citing a decision of this Court in Pasion v.
Pasion [G.R.No. L-15757, May 31, 1961, 2 SCRA 486, 489] holding that "the imprescriptibility of
a Torrens title can only be invoked by the person in whose name the title is registered" and
that 'one who is not the registered owner of a parcel of land cannot invoke imprescriptibility of
action to claim the same.'

Reliance on the aforesaid Pasion case is futile. The ruling therein applies only against
transferees other than direct issues or heirs or to complete strangers. The rational is clear:

If prescription is unavailing against the registered owner, it must be equally

unavailing against the latter's hereditary successors, because they merely step
into the shoes of the decedent by operation of law (New Civil Code, Article 777;
Old Civil Code, Article 657), the title or right undergoing no change by its
transmission mortis causa [Atus, et al., v. Nunez, et al., 97 Phil. 762, 764].

The latest pronouncement of this Court in Umbay v. Alecha [G. R. No. 67284, March 18, 1985,
135 SCRA 427, 429], which was promulgated subsequent to the Pasion case reiterated
the Atus doctrine. Thus:

Prescription is unavailing not only against the registered owner but also against
his hereditary successors, because they merely step into the shoes of the
decedent by operation of law and are merely the continuation of the personality
of their predecessor-in-interest. [Barcelona v. Barcelona, 100 Phil. 251, 257].

Laches is likewise unavailing as a shield against the action of herein petitioners.

Well-stated in this jurisdiction are the four basic elements of laches, namely: (1) conduct on the
part of the defendant or of one under whom he claims, giving rise to the situation of which
complaint is made and for which the complainant seeks a remedy; (2) delay in asserting the
corporations complainant's rights, the complainant having had knowledge or notice of the
defendant's conduct and having been afforded an opportunity to institute suit; (3) lack of
knowledge or notice on the part of the defendant that the complainant would assert the right on
which he bases his suit; and, (4) injury or prejudice to the defendant in the event relief is
accorded to the complainant, or the suit is not held to be barred [Go China Gun, et al. v. Co Cho
et al., 96 Phil. 622 (1955)].

While the first and last elements are present in this case, the second and third elements are
missing.

The second element speaks of delay in asserting the complainant's rights. However, the mere
fact of delay is insufficient to constitute, laches. It is required that (1) complainant must have
had knowledge of the conduct of defendant or of one under whom he claims and (2) he must
have been afforded an opportunity to institute suit. This court has pointed out that laches is not
concerned with the mere lapse of time. Thus:

Laches has been defined as the failure or neglect, for an unreasonable length of
time to do that which by exercising due diligence could or should have been done
earlier; it is negligence or omission to assert a right within a reasonable time
warranting a presumption that the party entitled to assert it either has abandoned
it or declined to assert it. Tijam, et al., v. Sibonghanoy, G.R. No. L-21450, April
25, 1968, 23 SCRA 29,35; Tendo v. Zamacoma, G.R. No. L-63048, August 7,
1985, 138 SCRA 78, 90].

The doctrine of "laches" or of "stale demands" is based upon grounds of public

policy which requires for the peace of society, the discouragement of stale claims
and unlike the statute of limitations, is not a mere question of time but is
principally a question of inequity or unfairness of permitting a right or claim to be
enforced or asserted," [Tijam v. Sibonghanoy, supra, p. 35]. [Emphasis supplied.]

It must be noted that while there was delay in asserting petitioners' rights, such delay was not
attended with any knowledge of the sale nor with any opportunity to bring suit. In the first place,
petitioners had no notice of the sale made by their eldest sister. It is undisputed that the
petitioner co-owners had entrusted the care and management of the parcel of land to Rosalia
Bailon who was the oldest among them [TSN, July 27, 1983, p. 14]. In fact, Nicanor Lee, a son
of Rosalia, who was presented as a witness by the plaintiffs-petitioners, testified on cross-
examination that his mother was only the administrator of the land as she is the eldest and her
brothers and sisters were away [TSN, October 5, 1983, p. 15]. Indeed, when Delia Bailon-
Casilao left Sorsogon in 1942 after she got married, it was only in 1983 that she returned.
Sabina on the other hand, is said to be living in Zamboanga while Bernabe who left for China in
1931 has not been heard from since then. Consequently, when Rosalia, from whom the private
respondent derived his title, made the disputed sales covering the entire property, the herein
petitioners were unaware thereof.

In the second place, they were not afforded an opportunity to bring suit inasmuch as until 1981,
they were kept in the dark about the transactions entered into by their sister. It was only when
Delia Bailon-Casilao returned to Sorsogon in 1981 that she found out about the sales and
immediately, she and her co-petitioners filed the present action for recovery of property. The
appellate court thus erred in holding that 'the petitioners did nothing to show interest in the
land." For the administration of the parcel of land was entrusted to the oldest co-owner who was
then in possession thereof precisely because the other co-owners cannot attend to such a task
as they reside outside of Sorsogon where the land is situated. Her co-owners also allowed her
to appropriate the entire produce for herself because it was not even enough for her daily
consumption [TSN, October 5, 1983, pp. 17-18]. And since petitioner was the one receiving the
produce, it is but natural that she was the one to take charge of paying the real estate taxes.
Now, if knowledge of the sale by Rosalia was conveyed to the petitioners only later, they cannot
be faulted for the acts of their co-owner who failed to live up to the trust and confidence
expected of her. In view of the lack of knowledge by the petitioners of the conduct of Rosalia in
selling the land without their consent in 1975 and the absence of any opportunity to institute the
proper action until 1981, laches may not be asserted against the petitioners.

The third element of laches is likewise absent. There was no lack of knowledge or notice on the
part of the defendant that the complainants would assert the right on which they base the suit.
On the contrary, private respondent is guilty of bad faith in purchasing the property as he knew
that the property was co-owned by six persons and yet, there were only two signatories to the
deeds of sale and no special authorization to self was granted to the two sellers by the other co-
owners.

Even as the land here was misrepresented in the deeds of sale as "unregistered," the truth was
that Afable already had notice that the land was titled in the name of six persons by virtue of the
Certificate of Title which was already in his possession even before the sale. Such fact is
apparent from his testimony before the court a quo:

COURT:

Q: From whom did you get the certificate of Title?

A: When it was mortgaged by Ponciana Aresgado.

Q: It was mortgaged to you before you bought it?

A: Yes, Your Honor. (TSN, March 5, 1984, p. 12) When cross-

examined, he stated:

Q: Mr. Witness, the original Certificate of Title was given to you in

the year 1974, was it not?

A: 1975.

Q: In 1975, you already discovered that the title was in the name
of several persons, is it not?

A: Yes, sir.

Q: When you discovered that it is in the name of several persons,

you filed a case in court for authority to cancel the title to be
transferred in your name, is it not?

A: Yes, sir.

Q: And that was denied by the Court of First Instance of Sorsogon

because there was ordinary one signatory to the deed of sale
instead of six, was it not?
 A: Not one but two signatories.

[Decision of the Regional Trial Court of Sorsogon, Rollo, p. 35]

Such actual knowledge of the existence of other co-owners in whose names the lot subject of
the sale was registered should have prompted a searching inquiry by Afable considering the
well- known rule in this jurisdiction that:

... a person dealing with a registered land has a right to rely upon the face of the
Torrens certificate of title and to dispense with the need of inquiring further,
except when the party concerned has actual knowledge of facts and
circumstances that would impel a reasonably cautions man to make such inquiry.
[Gonzales v. IAC and Rural Bank of Pavia, Inc., G.R. No. 69622, January 29,
1988).

Moreover, the undisputed fact is that petitioners are relatives of his wife. As a genuine gesture
of good faith, he should have contacted the petitioners who were still listed as co-owners in the
certificate of title which was already in his possession even before the sale. In failing to exercise
even a minimum degree of ordinary prudence required by the situation, he is deemed to have
bought the lot at his own risk. Hence any prejudice or injury that may be occasioned to him by
such sale must be borne by him.

Indeed, aware of the flaws impairing his title, Afable went to the herein petitioner Delia Bailon-
Casilao, asking the latter to sign a document obviously to cure the flaw [TSN, July 27, 1983,
p.6]. Later, he even filed a petition in the Court of First Instance to register the title in his name
which was denied as aforesaid.

It may be gleaned from the foregoing examination of the facts that Celestino Afable is not a
buyer in good faith. Laches being an equitable defense, he who invokes it must come to the
court with clean hands.

WHEREFORE, the petition for certiorari is hereby GRANTED, the challenged decision of the
Court of Appeals is SET ASIDE, and the decision of the trial court is REINSTATED.

SO ORDERED.
 MERCADO VS CA
GR 108592 JANUARY 26, 1995

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 108952 January 26, 1995

NILO A. MERCADO, petitioner, 
vs.
THE COURT OF APPEALS AND AUREA A. MERCADO, respondents.

PUNO, J.:

This is a petition for certiorari to review the Decision of the respondent Court of Appeals dated
August 30, 1991 declaring private respondent a co-owner of the lot covered by TCT No. 123560
of the Register of Deeds of Quezon City.1

The facts are well established in the disputed Decision, viz:

Plaintiff Aurea A. Mercado seeks the partition and reconveyance to her of one-
half of a real property located at No. 181 Esteban Abada Street, Quezon City,
described as Lot 17-A, Block 40 in Transfer Certificate of Title No. 123560 of the
Registry of Deeds of Quezon City, containing an area of P1,000 square meters,
more or less and registered in the name of defendant Nilo A. Mercado.

Plaintiff Aurea A. Mercado is 69 years old, still single, a professor, holder of a

degree in Ph. D. Data of Philosophy, Research, Statistics and Measurement from
the University of Maryland, U.S.A and used to work in the United States. She is a
legitimate sister of Nilo A. Mercado.

Before she left for the United States in 1964 where she stayed up to 1984, she
gave her brother University of the Philippines. She wanted a property near U.P
because she planned to teach in the said university when she comes back. She
was not given any receipt for the money handed to her brother.

Sometime in 1967, she was informed through letters received from the
Philippines coming from her mother and sister that her brother Nilo had already
purchased a property located at No. 181 Esteban Abada Street, Quezon City.
She never saw the title of the property covered by TCT No. 123560.
 In 1972, her brother went to the United States and visited her in her house at
Jersey City. On this occasion, she asked her brother about the purchase of the
property. Her brother responded telling her not to worry for he would give her a
paper with respect to that property. In 1978, her brother Nilo sent through their
mother an affidavit (Exh. A) wherein Nilo admitted the existence of co-ownership
over the property.

Through letters, she communicated with her brother Nilo regarding the subject
property. In one of those letters (Exh. B), she told her brother to pay her for the
lot. In two other letters (Exh. C & D), the same property was the subject matter.
She did not receive any reply so she started calling him through the telephone,
insisting on the partition of the property because she committed the land as
payment to the contractor, Mr. Escora, who constructed her school building in
Davao City.

Nilo A. Medina (sic), defendant herein, is 57 years old, a graduate of law UP

class 1957 and a businessman by occupation. He testified that the plaintiff is his
sister.

In 1967, he decided to buy a house and lot worth P95,000.00 located at 181
Esteban Abada Street, Quezon City from the spouses Francisco Vargas and
Teresita Vargas. Out of his personal savings, money borrowed from his mother
and sister Esmeralda and P20,000.00 borrowed from his sister Aurea, he was
able to pay the downpayment of P38,000.00 to spouses Vargas. It was only upon
his tender of the downpayment that the spouses executed a Deed of Conditional
Sale (Exh. 5). He applied for a housing loan with the Social Security System
(System for short) and upon its approval by the System, a Deed of Absolute Sale
was executed between him and the spouse Vargas (Exhs. 1, 2, 3, 4 & 6).

He paid the amortization for the loan (Exh. 11). However, due to financial
reverses, the property was foreclosed by the System (Exh. 9). Fortunately, he
was able to redeem the property from the System in 1980 out of the insurance
proceeds of his burned property in Davao. A certificate of redemption (Exh. 10)
was issued to him and he caused the cancellation of the mortgage with the
System.

As proof of his ownership, he has the tax declaration (Exh. 8), Transfer
Certificate of Title No. 123560 in his name (Exh. 7) and real property tax bill
receipts evidencing payment of real estate taxes on the property (Exhs. 13, 13-
a).

The petition for certiorari was initially denied by this Court2 in its Resolution on May 17, 1993 for
non-compliance with our Revised Circular
1-88, for raising factual issues and for lack of reversible error committed by the respondent
Court of Appeals.3 The Court also denied with finality petitioner's Motion for Reconsideration in a
Resolution dated July 14, 1993. The motion raised no substantial argument and the Court found
no compelling reason to 
grant it.
On August 23, 1993, however, petitioner filed a Motion for Leave to file a Second Motion for
Reconsideration. He argued, among others, that even assuming the correctness of the factual
findings of the respondent Court of Appeals, still, there could not be any co-ownership of the
subject property. The Court required private respondent to comment and, in its Resolution of
August 22, 1994, granted the Motion "in the interest of justice and considering the crucial
importance of the issue of extinguishment of co-ownership" and gave due course to the
petition. 4 Extensive memoranda were then filed by the petition.

We find no merit in the petition.

We sustain the finding of the respondent court that the subject property is co-owned by
petitioner and private respondent. This finding is based on the admission made by petitioner
himself in his Affidavit (Exh. "A") dated March 2, 1973, which states:

AFFIDAVIT

That I, NILO A. MERCADO, of legal age, married, Filipino and a resident of

Davao City, Philippines, after having been duly sworn to in accordance with law,
depose and say the following:

That I am the co-owner of a residential land, including all the

improvements existing thereon, located at 81 E. Abada, Loyola
Heights, Quezon City, with my sister Aurea A.Mercado;

That being co-owners, we share equally over the above-

mentioned properties, including all the encumbrances and its
obligations and liabilities to the Social Security System and other
governmental agencies;

That I am executing this affidavit to inform the proper authorities

concerned that the parcel of residential land, including the
residential house, together with all its liabilities, is owned by me in
co-ownership with Aurea A. Mercado.

That I am executing this affidavit freely and voluntarily without any

force or intimidation imposed upon me.

IN WITNESS WHEREOF, I have hereunto set my hand this 2(nd)

day of March, 1973, at the City of Davao City, Philippines.

(Sgd.)
NILO
A.
MERC
ADO
Affiant

This affidavit is high quality evidence. It contains admission against interest on the part of
petitioner. As a lawyer, petitioner cannot pretend that the plain meaning of his admission eluded
his mind.
We now come to the issue of whether the mortgage of the subject property to the SSS, its
foreclosure and subsequent redemption by the petitioner extinguished private respondent's co-
ownership. The applicable law is Article 493 of the New Civil Code which spells out the rights of
co-owners over a co-owned property, viz:

Art. 493. Each co-owner shall have the full ownership of his part and of the fruits
and benefits pertaining thereto, and he may therefore alienate, assign or
mortgage it and even substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation or mortgage, with
respect to the co-owners, shall be limited to the portion which may be allotted to
him in the division upon the termination of the co-ownership. (emphasis ours)

Pursuant to this law, a co-owner has the right to alienate his pro-indiviso share in the co-owned
property even without the consent of the other co-owners. Nevertheless, as a mere part owner,
he cannot alienate the shares of the other co-owners. The prohibition is premised on the
elementary rule that "no one can give what he does not have" (Nemo dat guod non habet).
Thus, we held in Bailon-Casilao vs. Court of Appeals,5 viz:

. . . since a co-owner is entitled to sell his undivided share, a sale of the entire
property by one-co-owner without the consent of the other co-owners is not null
and void. However, only the rights of the co-owner-seller are transferred, thereby
making the buyer a co-owner of the property.

The proper action in cases like this is not for the nullification of the sale or for the
recovery of possession of the thing owned in common from the third person who
substituted the co-owner or co-owners who alienated their shares, but the
DIVISION of the common property of the co-owners who possessed and
administered it.

In the case at bench, it is established that petitioner, for his own benefit, borrowed money from
the SSS and mortgaged the subject property to the SSS on June 5, 1967 without the knowledge
and consent of his co-owner, herein private respondent. Necessarily, private respondent could
not have helped in the payment of the SSS loan nor could she have redeemed the subject
property from the SSS. Under these circumstances, it will not accord with the letter and intent of
Article 493 of the Civil Code to rule private respondent lost her part ownership of the subject
property finds no warrant both in law and in equity. It will be the height of absurdity to reward
petitioner for his illegal act of appropriating the share of private respondent in the subject
property.

Prescinding from these premises, petitioner's reliance in the case of Tan vs. Court of Appeals6 is
misplaced.

In Tan, the disputed property was mortgaged by spouses Tan Tiong Tick and Tan Ong Hun to
China Bank. Tan Tiong Tick died. He was survived by his widow and six children, including D.
Annie Tan. Meanwhile, China Bank foreclosed the mortgage. It was the highest bidder at the
public auction. Thereafter, the heirs of Tan Tiong Tick sought to nullify the real estate mortgage
and the foreclosure sale before the defunct CFI of Manila. The widow, Tan Ong Hun, died.

The one-year redemption period lapsed on July 6, 1973, but the heirs of the spouses Tan failed
to redeem the property. China Bank then consolidated its ownership over the disputed property
and a new title was issued in its name. In the meantime, a compromise agreement was forged
between China Bank and the Tan heirs. The Bank allowed the heirs to repurchase the property
on or before August 31, 1974, otherwise, it would dispose of the property to another party.
Within the agreed period, or on August 30, 1974, only petitioner D. Annie Tan repurchased the
entire property using her own funds. The bank, however, insisted that the repurchase be made
for or in behalf of the other heirs as well. Left without any choice, D. Annie Tan filed an action in
court, asserting her exclusive ownership over the property on the ground that the co-ownership
between her and her brothers and sisters had already been extinguished. We sustained her
contention and ruled:

The first question which arises is the correctness of the assumption that there
was a co-ownership among the children of Tan Tiong Tick and Tan Ong Hun
when the petitioner purchased and property.

Since the lot and its improvements were mortgaged by the deceased parents,
there can be no question that a co-ownership existed amount the heirs during the
period given by law to redeem the foreclosed property. Redemption by one
during this period would have inured to the benefit of all . . . .

The records show, however, that when petitioner purchased the disputed
property on August 30, 1974, any co-ownership among the brothers and sisters
no longer existed. The period to redeem had expired more than one year earlier,
on July 6, 1973. The respondent China Bank consolidated its ownership and a
new title was issued in the bank's name. When the heirs allowed the one year
period to expire without redeeming their parent's former property and permitted
the consolidation of ownership and the issuance of a new title, the co-ownership
was extinguished. The challenged ruling of the respondent court is, therefore,
based on erroneous premises.

Under Section 63-B of Presidential Decree No. 1529, the Property Registration
Decree, in case of non-redemption, the purchaser at the foreclosure sale,
meaning the respondent Bank in case of non-redemption, the purchaser at the
foreclosure sale, meaning the respondent Bank in this case, is entitled to a new
certificate of title in his name after filing the necessary papers with the Register of
Deeds. (Spouses Teofisto and Eulalia Verceles v. Court of First Instance of Rizal,
et al., G.R. No. 62219, February 28, 1989). It becomes a ministerial duty to place
the buyer in possession of the property he now owns. (Banco Filipino v.
Intermediate Appellate court, G.R. No. 68878, 142 SCRA 44 [1986]. Ownership,
therefore, passed to China Bank and there was no more co-ownership among
the heirs.

In is thus obvious that the Tan ruling is propped on a different factual setting and hence, is
inapplicable to the case at bench. In Tan, ". . . the heirs (i.e., the co-owners) allowed the one
year redemption period to expire without redeeming their parents' former property and permitted
the consolidation of ownership and the issuance of a new title . . ."7 in favor of China Bank. By
their knowing acts of omission, the heirs in the Tan case allowed the extinction of their co-
ownership. As aforestated, private respondent did not know of the mortgage of their co-owned
property in favor of the SSS and the expiry date of its period of redemption. In other words,
private respondent did not voluntary relinquish at any period of time her pro-indiviso share in the
subject property.
IN VIEW WHEREOF, the Decision of the respondent Court of Appeals dated August 30, 1991
and its Resolution dated January 29, 1993, are affirmed. Costs against petitioner.

SO ORDERED.

DEL CAMPO VS CA
GR 108228 FEBRUARY 1, 2001

[G.R. No. 108228. February 1, 2001]

SPOUSES MANUEL and SALVACION DEL CAMPO, petitioners, vs. HON. COURT OF

APPEALS and HEIRS OF JOSE REGALADO, SR., respondents.

D E C I S I O N
QUISUMBING, J.:

This is a petition for review on certiorari of a decision of the Court of Appeals which affirmed
the judgment of the Regional Trial Court of Roxas City, Branch 15 in Civil Case No. V-5369,
ordering the dismissal of the action for repartition, resurvey and reconveyance filed by
petitioners.
Pure questions of law are raised in this appeal as the following factual antecedents are
undisputed:
 Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita, all surnamed
Bornales, were the original co-owners of Lot 162 of the Cadastral Survey of Pontevedra, Capiz
under Original Certificate of Title No. 18047. As appearing therein, the lot, which consisted of a
total area of 27,179 square meters was divided in aliquot shares among the eight (8) co-owners
as follows:

Salome Bornales 4/16
Consorcia Bornales 4/16
Alfredo Bornales 2/16
Maria Bornales 2/16
Jose Bornales 1/16
Quirico Bornales 1/16
Rosalia Bornales 1/16
Julita Bornales 1/16

On July 14, 1940, Salome sold part of her 4/16 share in Lot 162 for P200.00 to Soledad
Daynolo. In the Deed of Absolute Sale signed by Salome and two other co-owners, Consorcia
and Alfredo, the portion of Lot 162 sold to Soledad was described as having more or less the
following measurements:

63-1/2 meters from point 9 to 10, 35 meters from point 10 to point 11, 30 meters from point 11 to
a certain point parallel to a line drawn from points 9 to "10; and then from this Certain Point to
point 9 and as shown in the accompanying sketch, and made an integral part of this deed, to
SOLEDAD DAYNOLO, her heirs and assigns.[1]

Thereafter, Soledad Daynolo immediately took possession of the land described above and
built a house thereon. A few years later, Soledad and her husband, Simplicio Distajo,
mortgaged the subject portion of Lot 162 as security for a P400.00 debt to Jose Regalado, Sr.
This transaction was evidenced by a Deed of Mortgage[2] dated May 1, 1947.
On April 14, 1948, three of the eight co-owners of Lot 162, specifically, Salome, Consorcia
and Alfredo, sold 24,993 square meters of said lot to Jose Regalado, Sr.
On May 4, 1951, Simplicio Distajo, heir of Soledad Daynolo who had since died, paid the
mortgage debt and redeemed the mortgaged portion of Lot 162 from Jose Regalado, Sr. The
latter, in turn, executed a Deed of Discharge of Mortgage [3] in favor of Soledads heirs, namely:
Simplicio Distajo, Rafael Distajo and Teresita Distajo-Regalado. On same date, the said heirs
sold the redeemed portion of Lot 162 for P1,500.00 to herein petitioners, the spouses Manuel
Del Campo and Salvacion Quiachon.
Meanwhile, Jose Regalado, Sr. caused the reconstitution of Original Certificate of Title No.
18047. The reconstituted OCT No. RO-4541 initially reflected the shares of the original co-
owners in Lot 162. However, title was transferred later to Jose Regalado, Sr. who subdivided
the entire property into smaller lots, each covered by a respective title in his name. One of these
small lots is Lot No. 162-C-6 with an area of 11,732 square meters which was registered on
February 24, 1977 under TCT No. 14566.
In 1987, petitioners Manuel and Salvacion del Campo brought this complaint for repartition,
resurvey and reconveyance against the heirs of the now deceased Jose Regalado, Sr.
Petitioners claimed that they owned an area of 1,544 square meters located within Lot 162-C-6
which was erroneously included in TCT No. 14566 in the name of Regalado. Petitioners alleged
that they occupied the disputed area as residential dwelling ever since they purchased the
property from the Distajos way back in 1951. They also declared the land for taxation purposes
and paid the corresponding taxes.
On April 1, 1987, summons were served on Regalados widow, Josefina Buenvenida, and
two of her children, Rosemarie and Antonio. Josefina and Rosemarie were declared in default
on May 10, 1989 because only Antonio filed an answer to the complaint.
During trial, petitioners presented the Deed of Absolute Sale [4] executed between Soledad
Daynolo and Salome Bornales as well as the Deed of Mortgage [5] and Deed of
Discharge[6] signed by Jose Regalado, Sr. The Deed of Absolute Sale [7] showing the purchase
by the Del Campos of the property from the Distajos was likewise given in evidence.
Despite the filing of an answer, Antonio failed to present any evidence to refute the claim of
petitioners. Thus, after considering Antonio to have waived his opportunity to present evidence,
the trial court deemed the case submitted for decision.
On November 20, 1990, the trial court rendered judgment dismissing the complaint. It held
that while Salome could alienate her pro-indiviso share in Lot 162, she could not validly sell an
undivided part thereof by metes and bounds to Soledad, from whom petitioners derived their
title. The trial court also reasoned that petitioners could not have a better right to the property
even if they were in physical possession of the same and declared the property for taxation
purposes, because mere possession cannot defeat the right of the Regalados who had
a Torrens title over the land.
On appeal, the Court of Appeals affirmed the trial courts judgment, with no pronouncement
as to costs.[8]
Petitioners now seek relief from this Court and maintain that:
I.

THE FACT THAT THE SALE OF THE SUBJECT PORTION CONSTITUTES A SALE OF A
CONCRETE OR DEFINITE PORTION OF LAND OWNED IN COMMON DOES NOT
ABSOLUTELY DEPRIVE HEREIN PETITIONERS OF ANY RIGHT OR TITLE THERETO;

II.

IN ANY EVENT, HEREIN PRIVATE RESPONDENTS ARE ALL ESTOPPED FROM

DENYING THE RIGHT AND TITLE OF HEREIN PETITIONERS.[9]

In resolving petitioners appeal, we must answer the following questions: Would the sale by
a co-owner of a physical portion of an undivided property held in common be valid? Is
respondent estopped from denying petitioners right and title over the disputed area? Under the
facts and circumstances duly established by the evidence, are petitioners entitled to repartition,
resurvey and reconveyance of the property in question?
On the first issue, it seems plain to us that the trial court concluded that petitioners could
not have acquired ownership of the subject land which originally formed part of Lot 162, on the
ground that their alleged right springs from a void sale transaction between Salome and
Soledad. The mere fact that Salome purportedly transferred a definite portion of the co-owned
lot by metes and bounds to Soledad, however, does not per se render the sale a nullity. This
much is evident under Article 493[10] of the Civil Code and pertinent jurisprudence on the matter.
More particularly in Lopez vs. Vda. De Cuaycong, et.al.[11] which we find relevant, the Court,
speaking through Mr. Justice Bocobo, held that:
The fact that the agreement in question purported to sell a concrete portion of the
hacienda does not render the sale void, for it is a well-established principle that the binding
force of a contract must be recognized as far as it is legally possible to do so. Quando res non
valet ut ago, valeat quantum valere potest. (When a thing is of no force as I do it, it shall have
as much force as it can have.)[12]

Applying this principle to the instant case, there can be no doubt that the transaction
entered into by Salome and Soledad could be legally recognized in its entirety since the object
of the sale did not even exceed the ideal shares held by the former in the co-ownership. As a
matter of fact, the deed of sale executed between the parties expressly stipulated that the
portion of Lot 162 sold to Soledad would be taken from Salomes 4/16 undivided interest in said
lot, which the latter could validly transfer in whole or in part even without the consent of the
other co-owners. Salomes right to sell part of her undivided interest in the co-owned property is
absolute in accordance with the well-settled doctrine that a co-owner has full ownership of
his pro-indiviso share and has the right to alienate, assign or mortgage it, and substitute another
person in its enjoyment[13] Since Salomes clear intention was to sell merely part of her aliquot
share in Lot 162, in our view no valid objection can be made against it and the sale can be given
effect to the full extent.
We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular
portion of a co-owned property prior to partition among all the co-owners. However, this should
not signify that the vendee does not acquire anything at all in case a physically segregated area
of the co-owned lot is in fact sold to him. Since the co-owner/vendors undivided interest could
properly be the object of the contract of sale between the parties, what the vendee obtains by
virtue of such a sale are the same rights as the vendor had as co-owner, in an ideal share
equivalent to the consideration given under their transaction. In other words, the vendee steps
into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the
property held in common.
Resultantly, Soledad became a co-owner of Lot 162 as of the year 1940 when the sale was
made in her favor. It follows that Salome, Consorcia and Alfredo could not have sold the entire
Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by
the three co-owners/vendors were equivalent to only 10/16 of the undivided property less the
aliquot share previously sold by Salome to Soledad. Based on the principle that no one can give
what he does not have,[14] Salome, Consorcia and Alfredo could not legally sell the shares
pertaining to Soledad since a co-owner cannot alienate more than his share in the co-
ownership. We have ruled many times that even if a co-owner sells the whole property as his,
the sale will affect only his own share but not those of the other co-owners who did not consent
to the sale. Since a co-owner is entitled to sell his undivided share, a sale of the entire property
by one co-owner will only transfer the rights of said co-owner to the buyer, thereby making the
buyer a co-owner of the property.[15]
In this case, Regalado merely became a new co-owner of Lot 162 to the extent of the
shares which Salome, Consorcia and Alfredo could validly convey. Soledad retained her rights
as co-owner and could validly transfer her share to petitioners in 1951. The logical effect of the
second disposition is to substitute petitioners in the rights of Soledad as co-owner of the land.
Needless to say, these rights are preserved notwithstanding the issuance of TCT No. 14566 in
Regalados name in 1977.
Be that as it may, we find that the area subject matter of this petition had already been
effectively segregated from the mother lot even before title was issued in favor of Regalado. It
must be noted that 26 years had lapsed from the time petitioners bought and took possession of
the property in 1951 until Regalado procured the issuance of TCT No. 14566. Additionally, the
intervening years between the date of petitioners purchase of the property and 1987 when
petitioners filed the instant complaint, comprise all of 36 years. However, at no instance during
this time did respondents or Regalado, for that matter, question petitioners right over the land in
dispute. In the case of Vda. de Cabrera vs. Court of Appeals,[16] we had occasion to hold that
where the transferees of an undivided portion of the land allowed a co-owner of the property to
occupy a definite portion thereof and had not disturbed the same for a period too long to be
ignored, the possessor is in a better condition or right than said transferees. (Potior est
condition possidentis). Such undisturbed possession had the effect of a partial partition of the
co-owned property which entitles the possessor to the definite portion which he occupies.
Conformably, petitioners are entitled to the disputed land, having enjoyed uninterrupted
possession thereof for a total of 49 years up to the present.
The lower courts reliance on the doctrine that mere possession cannot defeat the right of a
holder of a registered Torrens title over property is misplaced, considering that petitioners were
deprived of their dominical rights over the said lot through fraud and with evident bad faith on
the part of Regalado. Failure and intentional omission to disclose the fact of actual physical
possession by another person during registration proceedings constitutes actual fraud.
Likewise, it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the
prejudice of a third person.[17] In this case, we are convinced that Regalado knew of the fact that
he did not have a title to the entire lot and could not, therefore, have validly registered the same
in his name alone because he was aware of petitioners possession of the subject portion as well
as the sale between Salome and Soledad.
That Regalado had notice of the fact that the disputed portion of Lot 162 was under claim of
ownership by petitioners and the latters predecessor is beyond question. Records show that the
particular area subject of this case was mortgaged by Soledad and her husband to Jose
Regalado, Sr. as early as May 1, 1947 or one year prior to the alienation of the whole lot in favor
of the latter. Regalado never questioned the ownership of the lot given by Soledad as security
for the P400.00 debt and he must have at least known that Soledad bought the subject portion
from Salome since he could not have reasonably accepted the lot as security for the mortgage
debt if such were not the case. By accepting the said portion of Lot 162 as security for the
mortgage obligation, Regalado had in fact recognized Soledads ownership of this definite
portion of Lot 162. Regalado could not have been ignorant of the fact that the disputed portion is
being claimed by Soledad and subsequently, by petitioners, since Regalado even executed a
Release of Mortgage on May 4, 1951, three years after the entire property was supposedly sold
to him. It would certainly be illogical for any mortgagee to accept property as security, purchase
the mortgaged property and, thereafter, claim the very same property as his own while the
mortgage was still subsisting.
Consequently, respondents are estopped from asserting that they own the subject land in
view of the Deed of Mortgage and Discharge of Mortgage executed between Regalado and
petitioners predecessor-in-interest. As petitioners correctly contend, respondents are barred
from making this assertion under the equitable principle of estoppel by deed, whereby a party to
a deed and his privies are precluded from asserting as against the other and his privies any
right or title in derogation of the deed, or from denying the truth of any material fact asserted in
it.[18] A perusal of the documents evidencing the mortgage would readily reveal that Soledad, as
mortgagor, had declared herself absolute owner of the piece of land now being litigated. This
declaration of fact was accepted by Regalado as mortgagee and accordingly, his heirs cannot
now be permitted to deny it.
 Although Regalados certificate of title became indefeasible after the lapse of one year from
the date of the decree of registration, the attendance of fraud in its issuance created an implied
trust in favor of petitioners and gave them the right to seek reconveyance of the parcel
wrongfully obtained by the former. An action for reconveyance based on an implied trust
ordinarily prescribes in ten years. But when the right of the true and real owner is recognized,
expressly or implicitly such as when he remains undisturbed in his possession, the said action is
imprescriptible, it being in the nature of a suit for quieting of title. [19] Having established by clear
and convincing evidence that they are the legal owners of the litigated portion included in TCT
No. 14566, it is only proper that reconveyance of the property be ordered in favor of petitioners.
The alleged incontrovertibility of Regalados title cannot be successfully invoked by respondents
because certificates of title merely confirm or record title already existing and cannot be used to
protect a usurper from the true owner or be used as a shield for the commission of fraud.[20]
WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals in
CA-G.R. CV No. 30438 is REVERSED and SET ASIDE. The parties are directed to cause a
SURVEY for exact determination of their respective portions in Lot 162-C-6. Transfer Certificate
of Title No. 14566 is declared CANCELLED and the Register of Deeds of Capiz is ordered to
ISSUE a new title in accordance with said survey, upon finality of this decision.
Costs against respondents.
SO ORDERED.