G.R. No.

L-4656            November 18, 1912

RICARDO PARDELL Y CRUZ and

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

Gaspar de Bartolome, in his own behalf.

B. Gimenez Zoboli, for appellees.

TORRES, J.:

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

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

1. A house of strong material, with the lot on which it is built, situated on Escolta Street,
P6,000.00
Vigan, and valued at

2. A house of mixed material, with the lot on which it stands, at No. 88 Washington Street,
1,500.00
Vigan; valued at

3. A lot on Magallanes Street, Vigan; valued at 100.00

4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at 60.00

5. A parcel of rice land in the pueblo of Santa Lucia; valued at 86.00

6. Three parcels of land in the pueblo of Candon; valued at 150.00

Total 7,896.00

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

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

In a special defense said counsel alleged that the defendants had never refused to divide the said property and
had in fact several years before solicited the partition of the same; that, from 1886 to 1901, inclusive, there was
collected from the property on Calle Escolta the sum of 288 pesos, besides a few other small amounts derived
from other sources, which were delivered to the plaintiffs with other larger amounts, in 1891, and from the
property on Calle Washington, called La Quinta, 990.95 pesos, which proceeds, added together, made a total of
1,278.95 pesos, saving error or omission; that, between the years abovementioned, Escolta, and that on Calle
Washington, La Quinta, 376.33, which made a total of 1,141.71, saving error or omission; that, in 1897, the work
of reconstruction was begun of the house on Calle Escolta, which been destroyed by an earthquake, which work
was not finished until 1903 and required an expenditure on the part of the defendant Matilde Ortiz, of 5,091.52
pesos; that all the collections made up to August 1, 1905, including the rent from the stores, amounted to only
P3,654.15, and the expenses, to P6,252.32, there being, consequently, a balance of P2,598.17, which divided
between the sisters, the plaintiff and the defendant, would make the latter's share P1,299.08; that, as shown by
the papers kept by the plaintiffs, in the year 1891 the defendant Bartolome presented to the plaintiffs a statement
in settlements of accounts, and delivered to the person duly authorized by the latter for the purpose, the sum of
P2,606.29, which the said settlement showed was owing his principals, from various sources; that, the defendant
Bartolome having been the administrator of the undivided property claimed by the plaintiffs, the latter were owing
the former legal remuneration of the percentage allowed by law for administration; and that the defendants were
willing to pay the sum of P3,948, one-half of the total value of the said properties, deducting therefrom the
amount found to be owing them by the plaintiffs, and asked that judgment be rendered in their favor to enable
them to recover from the latter that amount, together with the costs and expenses of the suit.

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

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

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

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

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

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

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

Before entering upon an explanation of the propriety or impropriety of the claims made by both parties, it is
indispensable to state that the trial judge, in absolving the defendants from the complaint, held that they had not
caused losses and damages to the plaintiffs, and that the revenues and the expenses were compensated, in
view of the fact that the defendants had been living for several years in the Calle Escolta house, which was pro
indiviso property of joint ownership.
By this finding absolving the defendants from the complaint, and which was acquiesced in by the plaintiffs who
made no appeal therefrom, the first issue has been decided which was raised by the plaintiffs, concerning the
indemnity for losses and damages, wherein are comprised the rents which should have been obtained from the
upper story of the said house during the time it was occupied by the defendants, Matilde Ortiz and her husband,
Gaspar de Bartolome.

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

Article 394 of the Civil Code prescribes:

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

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

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

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

Notwithstanding the above statements relative to the joint-ownership rights which entitled the defendants to live
in the upper story of the said house, yet in view of the fact that the record shows it to have been proved that the
defendant Matilde's husband, Gaspar de Bartolome, occupied for four years a room or a part of the lower floor of
the same house on Calle Escolta, using it as an office for the justice of the peace, a position which he held in the
capital of that province, strict justice, requires that he pay his sister-in-law, the plaintiff, one half of the monthly
rent which the said quarters could have produced, had they been leased to another person. The amount of such
monthly rental is fixed at P16 in accordance with the evidence shown in the record. This conclusion as to
Bartolome's liability results from the fact that, even as the husband of the defendant coowner of the property, he
had no right to occupy and use gratuitously the said part of the lower floor of the house in question, where he
lived with his wife, to the detriment of the plaintiff Vicenta who did not receive one-half of the rent which those
quarters could and should have produced, had they been occupied by a stranger, in the same manner that rent
was obtained from the rooms on the lower floor that were used as stores. Therefore, the defendant Bartolome
must pay to the plaintiff Vicenta P384, that is, one-half of P768, the total amount of the rents which should have
been obtained during four years from the quarters occupied as an office by the justice of the peace of Vigan.
With respect to the second question submitted for decision to this court, relative to the payment of the sum
demanded as a counterclaim, it was admitted and proved in the present case that, as a result of a serious
earthquake on August 15, 1897, the said house on Calle Escolta was left in ruins and uninhabitable, and that, for
its reconstruction or repair, the defendants had to expend the sum of P6,252.32. This expenditure,
notwithstanding that it was impugned, during the trial, by the plaintiffs, was duly proved by the evidence
presented by the defendants. Evidence, unsuccessfully rebutted, was also introduced which proved that the
rents produced by all the rural and urban properties of common ownership amounted, up to August 1, 1905, to
the sum of P3,654.15 which, being applied toward the cost of the repair work on the said house, leaves a
balance of P2,598.17, the amount actually advanced by the defendants, for the rents collected by them were not
sufficient for the termination of all the work undertaken on the said building, necessary for its complete repair
and to replace it in a habitable condition. It is therefore lawful and just that the plaintiff Vicenta Ortiz, who was
willing to sell to her sister Matilde for P1,500, her share in the house in question, when it was in a ruinous state,
should pay the defendants one-half of the amount expanded in the said repair work, since the building after
reconstruction was worth P9,000, according to expert appraisal. Consequently, the counterclaim made by the
defendants for the payment to them of the sum of P1,299.08, is a proper demand, though from this sum a
reduction must be made of P384, the amount of one-half of the rents which should have been collected for the
use of the quarters occupied by the justice of the peace, the payment of which is incumbent upon the husband of
the defendant Matilde, as aforesaid, and the balance remaining, P915.08, is the amount which the plaintiff
Vicenta must pay to the defendants.

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

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

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

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

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

G.R. No. L-45425             April 29, 1939

JOSE GATCHALIAN, ET AL., plaintiffs-appellants,

vs.
THE COLLECTOR OF INTERNAL REVENUE, defendant-appellee.

Guillermo B. Reyes for appellants.

Office of the Solicitor-General Tuason for appellee.

IMPERIAL, J.:

The plaintiff brought this action to recover from the defendant Collector of Internal Revenue the sum of
P1,863.44, with legal interest thereon, which they paid under protest by way of income tax. They appealed from
the decision rendered in the case on October 23, 1936 by the Court of First Instance of the City of Manila, which
dismissed the action with the costs against them.

The case was submitted for decision upon the following stipulation of facts:

Come now the parties to the above-mentioned case, through their respective undersigned attorneys, and
hereby agree to respectfully submit to this Honorable Court the case upon the following statement of
facts:

1. That plaintiff are all residents of the municipality of Pulilan, Bulacan, and that defendant is the
Collector of Internal Revenue of the Philippines;

2. That prior to December 15, 1934 plaintiffs, in order to enable them to purchase one sweepstakes
ticket valued at two pesos (P2), subscribed and paid therefor the amounts as follows:

1. Jose Gatchalian .................................................................................................... P0.18

2. Gregoria Cristobal ............................................................................................... .18
 3. Saturnina Silva .................................................................................................... .08
4. Guillermo Tapia ................................................................................................... .13
5. Jesus Legaspi ...................................................................................................... .15
6. Jose Silva ............................................................................................................. .07
7. Tomasa Mercado ................................................................................................ .08
8. Julio Gatchalian ................................................................................................... .13
9. Emiliana Santiago ................................................................................................ .13
10. Maria C. Legaspi ............................................................................................... .16
11. Francisco Cabral ............................................................................................... .13
12. Gonzalo Javier .................................................................................................... .14
13. Maria Santiago ................................................................................................... .17
14. Buenaventura Guzman ...................................................................................... .13
15. Mariano Santos ................................................................................................. .14

Total ........................................................................................................ 2.00

3. That immediately thereafter but prior to December 15, 1934, plaintiffs purchased, in the ordinary
course of business, from one of the duly authorized agents of the National Charity Sweepstakes Office
one ticket bearing No. 178637 for the sum of two pesos (P2) and that the said ticket was registered in
the name of Jose Gatchalian and Company;

4. That as a result of the drawing of the sweepstakes on December 15, 1934, the above-mentioned
ticket bearing No. 178637 won one of the third prizes in the amount of P50,000 and that the
corresponding check covering the above-mentioned prize of P50,000 was drawn by the National Charity
Sweepstakes Office in favor of Jose Gatchalian & Company against the Philippine National Bank, which
check was cashed during the latter part of December, 1934 by Jose Gatchalian & Company;

5. That on December 29, 1934, Jose Gatchalian was required by income tax examiner Alfredo David to
file the corresponding income tax return covering the prize won by Jose Gatchalian & Company and that
on December 29, 1934, the said return was signed by Jose Gatchalian, a copy of which return is
enclosed as Exhibit A and made a part hereof;

6. That on January 8, 1935, the defendant made an assessment against Jose Gatchalian & Company
requesting the payment of the sum of P1,499.94 to the deputy provincial treasurer of Pulilan, Bulacan,
giving to said Jose Gatchalian & Company until January 20, 1935 within which to pay the said amount of
P1,499.94, a copy of which letter marked Exhibit B is enclosed and made a part hereof;

7. That on January 20, 1935, the plaintiffs, through their attorney, sent to defendant a reply, a copy of
which marked Exhibit C is attached and made a part hereof, requesting exemption from payment of the
income tax to which reply there were enclosed fifteen (15) separate individual income tax returns filed
separately by each one of the plaintiffs, copies of which returns are attached and marked Exhibit D-1 to
D-15, respectively, in order of their names listed in the caption of this case and made parts hereof; a
statement of sale signed by Jose Gatchalian showing the amount put up by each of the plaintiffs to cover
up the attached and marked as Exhibit E and made a part hereof; and a copy of the affidavit signed by
Jose Gatchalian dated December 29, 1934 is attached and marked Exhibit F and made part thereof;

8. That the defendant in his letter dated January 28, 1935, a copy of which marked Exhibit G is enclosed,
denied plaintiffs' request of January 20, 1935, for exemption from the payment of tax and reiterated his
demand for the payment of the sum of P1,499.94 as income tax and gave plaintiffs until February 10,
1935 within which to pay the said tax;

9. That in view of the failure of the plaintiffs to pay the amount of tax demanded by the defendant,
notwithstanding subsequent demand made by defendant upon the plaintiffs through their attorney on
 March 23, 1935, a copy of which marked Exhibit H is enclosed, defendant on May 13, 1935 issued a
warrant of distraint and levy against the property of the plaintiffs, a copy of which warrant marked Exhibit
I is enclosed and made a part hereof;

10. That to avoid embarrassment arising from the embargo of the property of the plaintiffs, the said
plaintiffs on June 15, 1935, through Gregoria Cristobal, Maria C. Legaspi and Jesus Legaspi, paid under
protest the sum of P601.51 as part of the tax and penalties to the municipal treasurer of Pulilan, Bulacan,
as evidenced by official receipt No. 7454879 which is attached and marked Exhibit J and made a part
hereof, and requested defendant that plaintiffs be allowed to pay under protest the balance of the tax
and penalties by monthly installments;

11. That plaintiff's request to pay the balance of the tax and penalties was granted by defendant subject
to the condition that plaintiffs file the usual bond secured by two solvent persons to guarantee prompt
payment of each installments as it becomes due;

12. That on July 16, 1935, plaintiff filed a bond, a copy of which marked Exhibit K is enclosed and made
a part hereof, to guarantee the payment of the balance of the alleged tax liability by monthly installments
at the rate of P118.70 a month, the first payment under protest to be effected on or before July 31, 1935;

13. That on July 16, 1935 the said plaintiffs formally protested against the payment of the sum of
P602.51, a copy of which protest is attached and marked Exhibit L, but that defendant in his letter dated
August 1, 1935 overruled the protest and denied the request for refund of the plaintiffs;

14. That, in view of the failure of the plaintiffs to pay the monthly installments in accordance with the
terms and conditions of bond filed by them, the defendant in his letter dated July 23, 1935, copy of which
is attached and marked Exhibit M, ordered the municipal treasurer of Pulilan, Bulacan to execute within
five days the warrant of distraint and levy issued against the plaintiffs on May 13, 1935;

15. That in order to avoid annoyance and embarrassment arising from the levy of their property, the
plaintiffs on August 28, 1936, through Jose Gatchalian, Guillermo Tapia, Maria Santiago and Emiliano
Santiago, paid under protest to the municipal treasurer of Pulilan, Bulacan the sum of P1,260.93
representing the unpaid balance of the income tax and penalties demanded by defendant as evidenced
by income tax receipt No. 35811 which is attached and marked Exhibit N and made a part hereof; and
that on September 3, 1936, the plaintiffs formally protested to the defendant against the payment of said
amount and requested the refund thereof, copy of which is attached and marked Exhibit O and made
part hereof; but that on September 4, 1936, the defendant overruled the protest and denied the refund
thereof; copy of which is attached and marked Exhibit P and made a part hereof; and

16. That plaintiffs demanded upon defendant the refund of the total sum of one thousand eight hundred
and sixty three pesos and forty-four centavos (P1,863.44) paid under protest by them but that defendant
refused and still refuses to refund the said amount notwithstanding the plaintiffs' demands.

17. The parties hereto reserve the right to present other and additional evidence if necessary.

Exhibit E referred to in the stipulation is of the following tenor:

To whom it may concern:

I, Jose Gatchalian, a resident of Pulilan, Bulacan, married, of age, hereby certify, that on the 11th day of
August, 1934, I sold parts of my shares on ticket No. 178637 to the persons and for the amount indicated
below and the part of may share remaining is also shown to wit:

Purchaser Amount Address

1. Mariano Santos ........................................... P0.14 Pulilan, Bulacan.
2. Buenaventura Guzman ............................... .13 - Do -
3. Maria Santiago ............................................ .17 - Do -
4. Gonzalo Javier .............................................. .14 - Do -
5. Francisco Cabral .......................................... .13 - Do -
 6. Maria C. Legaspi .......................................... .16 - Do -
7. Emiliana Santiago ......................................... .13 - Do -
8. Julio Gatchalian ............................................ .13 - Do -
9. Jose Silva ...................................................... .07 - Do -
10. Tomasa Mercado ....................................... .08 - Do -
11. Jesus Legaspi ............................................. .15 - Do -
12. Guillermo Tapia ........................................... .13 - Do -
13. Saturnina Silva ............................................ .08 - Do -
14. Gregoria Cristobal ....................................... .18 - Do -
15. Jose Gatchalian ............................................ .18 - Do -

2.00 Total cost of said

ticket; and that, therefore, the persons named above are entitled to the parts of whatever prize that might
be won by said ticket.

Pulilan, Bulacan, P.I.

(Sgd.) JOSE GATCHALIAN

And a summary of Exhibits D-1 to D-15 is inserted in the bill of exceptions as follows:

RECAPITULATIONS OF 15 INDIVIDUAL INCOME TAX RETURNS FOR 1934 ALL DATED JANUARY
19, 1935 SUBMITTED TO THE COLLECTOR OF INTERNAL REVENUE.

Exhibit Purchase Price Net

Name Expenses
No. Price Won prize
1. Jose
Gatchalian ...................................... D-1 P0.18 P4,425 P 480 3,945
....
2. Gregoria
D-2 .18 4,575 2,000 2,575
Cristobal ......................................
3. Saturnina
D-3 .08 1,875 360 1,515
Silva .............................................
4. Guillermo
D-4 .13 3,325 360 2,965
Tapia ..........................................
5. Jesus Legaspi by Maria
D-5 .15 3,825 720 3,105
Cristobal .........
6. Jose
Silva ................................................ D-6 .08 1,875 360 1,515
....
7. Tomasa
D-7 .07 1,875 360 1,515
Mercado .......................................
8. Julio Gatchalian by Beatriz
D-8 .13 3,150 240 2,910
Guzman .......
9. Emiliana
D-9 .13 3,325 360 2,965
Santiago ......................................
10. Maria C. D-10 .16 4,100 960 3,140
 Legaspi ......................................
11. Francisco
D-11 .13 3,325 360 2,965
Cabral ......................................
12. Gonzalo
D-12 .14 3,325 360 2,965
Javier ..........................................
13. Maria
Santiago ......................................... D-13 .17 4,350 360 3,990
.
14. Buenaventura
D-14 .13 3,325 360 2,965
Guzman ...........................
15. Mariano
D-15 .14 3,325 360 2,965
Santos ........................................

<="" td="" style="font-size:

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2.00 50,000 color: rgb(0, 0, 128); font-
family: arial, verdana;">

The legal questions raised in plaintiffs-appellants' five assigned errors may properly be reduced to the two
following: (1) Whether the plaintiffs formed a partnership, or merely a community of property without a
personality of its own; in the first case it is admitted that the partnership thus formed is liable for the payment of
income tax, whereas if there was merely a community of property, they are exempt from such payment; and (2)
whether they should pay the tax collectively or whether the latter should be prorated among them and paid
individually.

The Collector of Internal Revenue collected the tax under section 10 of Act No. 2833, as last amended by
section 2 of Act No. 3761, reading as follows:

SEC. 10. (a) There shall be levied, assessed, collected, and paid annually upon the total net income
received in the preceding calendar year from all sources by every corporation, joint-stock company,
partnership, joint account (cuenta en participacion), association or insurance company, organized in the
Philippine Islands, no matter how created or organized, but not including duly registered general
copartnership (compañias colectivas), a tax of three per centum upon such income; and a like tax shall
be levied, assessed, collected, and paid annually upon the total net income received in the preceding
calendar year from all sources within the Philippine Islands by every corporation, joint-stock company,
partnership, joint account (cuenta en participacion), association, or insurance company organized,
authorized, or existing under the laws of any foreign country, including interest on bonds, notes, or other
interest-bearing obligations of residents, corporate or otherwise: Provided, however, That nothing in this
section shall be construed as permitting the taxation of the income derived from dividends or net profits
on which the normal tax has been paid.

The gain derived or loss sustained from the sale or other disposition by a corporation, joint-stock
company, partnership, joint account (cuenta en participacion), association, or insurance company, or
property, real, personal, or mixed, shall be ascertained in accordance with subsections (c) and (d) of
section two of Act Numbered Two thousand eight hundred and thirty-three, as amended by Act
Numbered Twenty-nine hundred and twenty-six.

The foregoing tax rate shall apply to the net income received by every taxable corporation, joint-stock
company, partnership, joint account (cuenta en participacion), association, or insurance company in the
calendar year nineteen hundred and twenty and in each year thereafter.

There is no doubt that if the plaintiffs merely formed a community of property the latter is exempt from the
payment of income tax under the law. But according to the stipulation facts the plaintiffs organized a partnership
of a civil nature because each of them put up money to buy a sweepstakes ticket for the sole purpose of dividing
equally the prize which they may win, as they did in fact in the amount of P50,000 (article 1665, Civil Code). The
partnership was not only formed, but upon the organization thereof and the winning of the prize, Jose Gatchalian
personally appeared in the office of the Philippines Charity Sweepstakes, in his capacity as co-partner, as such
collection the prize, the office issued the check for P50,000 in favor of Jose Gatchalian and company, and the
said partner, in the same capacity, collected the said check. All these circumstances repel the idea that the
plaintiffs organized and formed a community of property only.

Having organized and constituted a partnership of a civil nature, the said entity is the one bound to pay the
income tax which the defendant collected under the aforesaid section 10 (a) of Act No. 2833, as amended by
section 2 of Act No. 3761. There is no merit in plaintiff's contention that the tax should be prorated among them
and paid individually, resulting in their exemption from the tax.

In view of the foregoing, the appealed decision is affirmed, with the costs of this instance to the plaintiffs
appellants. So ordered.

G.R. No. L-13281             August 31, 1960

SIARI VALLEY ESTATES, INC., petitioner,

vs.
FILEMON LUCASAN, ET AL., respondents.

Orendain and Sarmiento for petitioner.

Barrios, Lucasan and Lucasan for respondents.

BAUTISTA ANGELO, J.:

On January 30, 1952, the Court of First Instance of Zamboanga del Norte rendered decision ordering Filemon
Lucasan to deliver to the Siari Valley Estates, Inc. the cattle inside the former's pasture or pay its value
amounting to P40,000.00 and damages in another sum of P40,000.00, This decision was affirmed in toto by the
Supreme Court, and when the same became final and executory, a writ of execution was issued. In carrying out
this writ, the sheriff proceeded to levy on certain parcels of lands belonging to defendant. These lands were sold
by the sheriff at public auction to the corporation as the highest bidder on January 14, 1956. The judgment
debtor having failed to redeem the land within the period of one year, on January 26, 1957, the sheriff issued in
favor of the purchaser the final certificate of sale, copy of which was registered in the Office of the Register of
Deeds of Zamboanga. On February 16, 1957, upon petition of the corporation, a writ of possession was issued
directing the sheriff to place said corporation in possession thereof. Notwithstanding said writ, however, the
corporation failed to take possession of the lands, hence it filed a motion reiterating its petition that it be placed
in their possession.

This time judgment debtor Filemon Lucasan filed an opposition alleging that he was in possession of one of the
parcels of land sold at public auction on which he has erected a house and which he has extra judicially
constituted as a family home, the rest being in possession of third parties. On April 30, 1957, the court,
overruling the opposition, issued an order directing the sheriff to place the corporation in possession of the lands
sold to it. On August 7, 1957, debtor Lucasan filed a motion for reconsideration which was denied, the court
reiterating its previous order with little amendment, but on August 23, 1957 issued another order allowing the
corporation to take possession of all lands sold, with the exception of parcel 1 on which the family home was
constituted, holding that the levy and sale made by the sheriff with regard to said parcel were not made in
accordance with law and so are null and void. Having failed to have this last order reconsidered, the corporation
interposed the present petition for certiorari.

It appears that parcel 1 is a registered land covered by Certificate of Title No. OCT-2492, Patent No. 50967, duly
registered in the Office of the Register of Deeds of Zamboanga del Norte in the name of Filemon Lucasan. On
this land stands a big house of mixed materials which is asserted in the amount of P23,270.00 as evidenced by
Tax Declaration No. 7653. It also 37 3 appears that Filemon Lucasan and his wife constituted this house and the
lot on which stands into a family home, the pertinent document having been registered in the office of the
register of deeds on June 21, 1955. In opposing the petition of the corporation for a writ of possession insofar as
this property is concerned, Lucasan contended that said lot and house having been constituted as a family home
are beyond the reach of judicial execution. He contended that the levy made by the sheriff on said property is
legally ineffective because it was not effected in accordance with what is prescribed in Section 14, Rule 39, in
relation to Section 7, Rule 59, of the Rules of Court.

There is merit in this contention. The evidence shows that when this property was levied on execution by the
sheriff to satisfy the judgment rendered against Filemon Lucasan in favor of petitioner corporation the notice of
levy merely described the property as unregistered land and the same was registered under Act 3344 in the
office of the register of deeds. It also appears that in the notice of sale the property was merely described
according to the boundaries and area appearing in the tax declaration and not according to what appears in the
certificate of title. On the other hand, the rule provides that real property shall "be levied on in like manner and
with like effect as under an order of attachment" (Section 14, Rule 39), and the provision regarding attachment
of real property postulates that the attachment shall be made "by filing with the register of deeds a copy of the
order, together with the description of the property attached, and a notice that it is attached, and by leaving a
copy of said order, description, and notice with the occupant of the property, if any there be," and that "Where
the property has been brought under the operation of the Land Registration Act, the notice shall contain a
reference to the number of the certificate of title and the volume and page in the registration book where the
certificate is registered" (Section 7 [a], Rule 59).

These provisions should be strictly construed if their purpose has to be accomplished. The requirement that the
notice of levy should contain a reference to the number of the certificate of title and the volume and page in the
registration book where the certificate is registered is made in order that the debtor as well as a third person may
be properly informed of the particular land or property that is under the custody of the court. This can only be
accomplished by making a reference to the certificate of title covering the property. The situation differs if the
land is unregistered in which case it is enough that the notice be registered under Act 3344. This conclusion
finds support in the following authorities:

An attachment levied on real estate not duly recorded in the registry of property is not an encumbrance
on the attached property, nor can such attachment, unrecorded in the registry, serve as a ground for
decreeing the annulment of the sale of the property, at the request of another creditor. (Gonzales
Diez vs. Delgado and Imperial, 37 Phil., 389)

... In conformity with the provisions of section 71 of the Land Registration Act, the sheriff of the City of
Manila filed a notice of the levy with the register of deeds, which notice was entered in the primary entry
book of the register's office, but was afterwards, on May 20, 1920, returned to the sheriff with the
information that the property was registered in the name of Buenaventura Dizon, having been conveyed
to the latter by the defendant in execution, Celerino Arellano, and that, therefore, no memorandum of the
notice had been entered upon the outstanding certificate of title. It may be noted that the notice
contained no "reference to the number of the certificate of title of the land to be effected and the volume
and page in the registry book where the certificate is registered, and that t that extent, the notice did not
meet the requirements of said section 71. (De Ocampo vs. Treasurer of the Philippine Islands, 50 Phil.,
140, 141; Emphasis supplied).

Since the notice of levy made by the sheriff as regards parcel number 1 which is a registered land contains no
reference to the number of its certificate of title and the volume and page in the registry book where the title is
registered, it follows that said notice is legally ineffective and as such did not have the effect of binding the
property for purposes of execution. Consequently, the sale carried out by virtue of said levy is also invalid and of
no legal effect.

The second issue raised is: Is the family home extra judicially established by respondent on the lot and house in
question exempt from execution?

Respondent sustains the affirmative considering that the money judgment rendered against him was appealed to
the Supreme Court in which event, he contends, the same could not be considered as a debt at the time the
family home was constituted for it was still inchoate and as such cannot come under the provisions of Article 243
(2) of the new Civil Code.

The article above referred to provides that "The family home extra judicially formed shall be exempt from
execution" except "for debts incurred before the declaration was recorded in the Registry of Property." What if
the meaning of the word debt used in this article? Does it refer to a debt that is undisputed, or may it also refer to
any pecuniary obligation even if the same has not yet been finally determined? In other words, can a judgment
for a sum of money be considered a debt within the meaning of this provision even if said judgment is still
pending appeal?

We are inclined to uphold the affirmative considering the real purpose of the law. The reason why a family home
constituted after a debt had been incurred is not exempt from execution is to protect the creditor against a debtor
who may act in bad faith by resorting to such declaration just to defeat the claim against him. If the purpose is to
protect the creditor from fraud it would be immaterial if the debt incurred be undisputed or inchoate, for a debtor
acting in good faith would prefer to wait until his case is definitely decided before constituting the family home.
Indeed, it may result, as in this case, that the Supreme Court may affirm the judgment of the lower court. If the
contention of respondent be sustained a debtor may be allowed to circumvent this provision of the law to the
prejudice of the creditor. This the Court cannot countenance. Hence, we are persuaded to conclude that the
money judgment in question comes within the purview of the word debt used in Article 243 (2) of the new Civil
Code.

WHEREFORE, the order appealed from is hereby affirmed, without prejudice of the part of petitioner to file a
new petition for execution following strictly the requirements of the rule on the matter. No pronouncement as to
costs.

Paras, C.J., Bengzon, Padilla, Labrador, Reyes, J.B.L., Barrera, and Gutierrez David, JJ., concur.
Concepcion, J., concurs in the result.

[ G.R. No. 18009, January 10, 1923 ]

EMILIO PUNSALAN ET AL., PLAINTIFFS AND APPELLANTS, VS. C. BOON LIAT

ET AL., DEFENDANTS AND APPELLANTS.

DECISION

AVANCEÃ'A, J.:
On or about the 13th of July, 1920, a Moro by the name of Tamsi saw from the
Cawit-Cawit shores in the Province of Zamboanga, a big bulky object in the distance
which attracted his attention. Thereupon, together with another Moro named
Bayrula, he went in a small boat to investigate and found it to be a large fish. They
then returned to shore, where they met other Moros and requested their help to
catch the fish. They went in three small boats, there being ten in one, seven in the
other, and five in the third, twenty-two men in all, twenty-one of whom are plaintiffs
herein, and the remaining one named Ahamad is defendant. After having arrived at
the place where the fish was, which was found to be a whale, they proceeded to pull
it toward the shore up to the mouth of the river, where they quartered it, having
found in its abdomen a great quantity of ambergris, which was placed in three sacks,
two of which were full and the other half full, and taken to the house of Maharaja
Butu, where they left it to the care of Ahamad. Then the contents of the two full
sacks were placed in three trunks. All of these twenty-two persons made an
agreement that they were to be the sole owners of this ambergris and that none of
them could sell it without the consent of the rest. As to the half sack of amber they
agreed that some of them should take it to Zamboanga to sell for the purpose of
ascertaining the market price of the ambergris, in order that they might dispose of
the rest accordingly. Some of them, with Tamsi in charge, went to Zamboanga to sell
the half sack of amber where they did dispose of it to a Chinaman, Cheong Tong, for
the sum of P2,700, which amount was distributed among all the parties in interest.
Then they offered to sell for the sum of P12,000 to the Chinamen, Cheong Tong and
Lim Chiat, the rest of the amber contained in the two sacks which had been left in
the house of Maharaja Butu, for safekeeping, and a document (Exhibit A) to this
effect was executed by Lim Chiat and Cheong Tong, on the one hand, and Tamsi,
Imam Lumuyod, and Imam Asakil, on the other. Thereupon they went to Cawit-
Cawit on board the launch Ching-kang to get the amber so sold.
It appears that there were other people in Zamboanga who knew of the existence of
this ambergris in the house of Maharaja Butu. While the above related events were
taking place, Mr. Henry E. Teck, who was one of those having knowledge of the
existence of this amber in Cawit-Cawit and of the fact that the launch Ching-
kang had left for Cawit-Cawit, proposed to the master of the revenue
cutter Mindoro to go to Cawit-Cawit to seize some supposedly contraband opium.
After transmitting this information to the Collector of Customs, he, the master of
the Mindoro , immediately proceeded to Cawit-Cawit. There were on board the
vessel Mr. Teck, some Chinamen, among whom were C. Boon Liat, Ong Chua, and
Go Tong, and some Moros who, according to Mr. Teck, were to assist in the arrest of
the smugglers. Upon the arrival of the Mindoro at Cawit-Cawit, the master,
accompanied by Mr. Teck and some Moros, went to the house of Maharaja Butu. As
is to be presumed, this information about the supposed contraband opium was but a
trick to have the Mindoro at their disposal. The master proceeded to search the
house, stating that he had information to the effect that there was contraband opium
and as a result of the search, he found three large trunks containing a black
substance which had a bad odor. He then asked the owner of the house to whom
those three trunks belonged, and the latter pointed to Ahamad who was present and
who stated that the contents came from the abdomen of a large fish. The master,
however, said that it was opium and told Ahamad that he would take the three
trunks on board the ship. Then Ahamad and other Moros asked permission of the
master to accompany him on the voyage to Zamboanga, to which the master
consented. When already on board and during the voyage the master became
convinced that the contents of the three trunks were not opium.
During the voyage, Mr. Teck offered to purchase the amber contained in the three
trunks, but Ahamad refused to sell it for the reason that he was not the sole owner
thereof, but owned it in common with other persons who were in Zamboanga.
However Mr. Teck, aided by his companions who wielded some influence in
Zamboanga, insisted that Ahamad should sell them the amber, telling him not to be
afraid of his companions, as he would answer for whatever might happen. With this
promise of protection, Ahamad decided to sell the amber for P7,500 and received
P2,500 as part payment on account of this price, a bill of sale having been signed by
Ahamad, Maharaja Butu and three Moros more. The balance of this price was paid
later.
When Cheong Tong, Lim Chiat, and the Moros who had gone to Cawit-Cawit on
board the launch Ching-kang arrived at the house of Maharaja Butu, they found that
the amber they had purchased from Tamsi and his companions was no longer there.
The plaintiffs are twenty-one of the twenty-two Moros who had caught the whale,
and Lim Chiat and Cheong Tong, who had purchased from Tamsi and his
companions the amber contained in the three trunks deposited in the house of
Maharaja Butu for safekeeping. They claim the 80½ kilos of ambergris contained in
the three trunks, or its value in the amount of P60,000, and damages in the sum of
P20,000. This action is brought against C. Boon Liat, Ong Chua, Go Tong, Henry E.
Teck, and the Moro, Ahamad, the first four being the persons who purchased this
same amber from the one last named while on board the revenue cutter Mindoro.
It appears from the foregoing that the amber in question was the undivided common
property of the plaintiffs (with the exception of Lim Chiat and Cheong Tong) and the
defendant Ahamad. This common ownership was acquired by occupancy (arts. 609
and 610 of the Civil Code), so that neither Tamsi, Imam Lumuyod, or Imam Asakil
had any right to sell it, as they did, to Lim Chiat and Cheong Tong, nor had the Moro
Ahamad any right to sell this same amber, as he did, to C. Boon Liat, Ong Chua, Go
Tong, and Henry E. Teck. There was an agreement between the coowners not to sell
this amber without the consent of all. Both sales having been made without the
consent of all the owners, the same have no effect, except as to the portion
pertaining to those who made them (art. 399, Civil Code).
Although the original complaint filed in this case was entitled as one for replevin, in
reality, from its allegations, the action herein brought is the ordinary one for the
recovery of the title to, and possession of, this amber. It is no bar to the bringing of
this action that the defendant Ahamad is one of the coowners. The action for
recovery which each coowner has, derived from the right of ownership inherent in
the coownership, may be exercised not only against strangers but against the
coowners themselves, when the latter perform, with respect to the thing held in
common, acts for their exclusive benefit, or of exclusive ownership, or which are
prejudicial to, and in violation of, the right of the community. (Decision of the
supreme court of Spain of June 22, 1892.) In this case the selling of the amber by the
defendant Ahamad as his exclusive property and his attitude in representing himself
to be the sole owner thereof place him in the same position as the stranger who
violates any right of the community. He is not sued in this case as a coowner, for the
cause of action is predicated upon the fact that he has acted not as a coowner, but as
an exclusive owner of the amber sold by him.
As to the sale made by Ahamad, it is urged that the purchasers acted in good faith. It
is contended that the latter did not know that the amber belonged to some others
besides Ahamad. But the evidence shows otherwise. Henry E. Teck himself admitted
that on the occasion of the sale of the amber he really had promised Ahamad to
protect him, and although he said that the promise made by him had reference to
the contingency of the amber proving to be opium, as the master of the revenue
cutter Mindoro believed, this is incredible, because he could not make Ahamad such
a promise, nor could such a promise, if made, have any influence on the mind of
Ahamad, inasmuch as the latter knew that the amber was not opium. If, as Henry E.
Teck admits, he made Ahamad this promise of protection, it should have been only
on account of Ahamad's refusal to sell the amber due to the fact that he was not the
sole owner thereof.
With regard to the action of the trial court in not admitting Exhibits 1 and 2 offered
by the defendants, we believe that it was no error. These documents are affidavits
signed by Paslangan, and the best evidence of their contents was the testimony of
Paslangan himself whom the plaintiffs had the right to cross-examine. Moreover,
they are substantially the same as the statements made by Paslangan at the trial
when testifying as witness for the defendants, and for this reason the ruling of the
trial court excluding these documents would not, at all events, affect the merits of
the case.
In the complaint it is alleged that the value of the amber is P60,000. Upon the
evidence adduced on this point, and taking into account that the defendant, Henry
E. Teck, himself, testifying as witness, has stated that this amber was worth P1,200
per kilo, we accept this estimated value set forth in the complaint.
The decision of the court below contains the following order for judgment:
"Wherefore, it is the judgment and order of the court that the defendants C. Boon
Liat, Henry E. Teck, Ahamad, Ong Chua, and Go Tong deliver to the plaintiffs,
Emilio Punsalan, Bayrula, Daring Gumuntol, Mohamad, Insael, Dunkalan, Tahil,
Dambul, Dagan, Sabay, Sahibul, Pingay, Mujahad, Amilol, Baraula, Saraban, Lim
Chiat, and Cheong Tong twenty-twenty-firsts (20/21) of the amber in question, or, in
default thereof, to pay them its value of twelve thousand pesos (P12,000), less one-
twenty-first of said amount."
Therefore, the judgment appealed from is affirmed, with the only modification that
the value of the amber which is the subject-matter of this action shall be P60,000,
without special finding as to the costs of this instance. So ordered.
Araullo, C.J., Malcolm, Villamor, Ostrand, Johns, and Romualdez, JJ., concur.
Street, J., reserves his vote.

G.R. No. 3240  February 8, 1907

PABLO TRINIDAD, administrator of the estate of MARIA SALOME

VIRGENES,Plaintiff-Appellant,

vs.

LUCAS RICAFORT, ET AL.,Defendants-Appellees.

Bishop & O'Brien for appellant.

W. A. Kincaid, for Lucas Ricafort appellee.
Del-Pan, Ortigas & Fisher for Macario Lim appellee.
Fernando Salas, for Antonio Boncan appellee.

WILLARD, J.:

On the 21st of July, 1886, Doroteo Ricafort, claiming to be the owner of the
property described in the complaint, sold it to Carolina Gonzales Calderon
for 1,230 pesos, reserving the right to repurchase it within eighteen months
from said date. On the 11th of December, 1894, Carolina Gonzales Calderon
resold to the property to Doroteo Ricafort for the sum of 1,230 pesos. The
latter died on the 18th day of July, 1896, intestate, and without having
made any conveyance or other disposition of this property. He left as his
only heirs Maria Salome Virgenes and the defendant, Lucas Ricafort, his
recognized natural child. Maria Salome Virgenes died intestate on the 29th
of May, 1900, and the plaintiff was on the 21st of October, 1903, appointed
administrator of her estate, and as such administrator he brought this action
to procure the cancellation of various inscriptions of the property made in
the Registry of Property in the name of the defendant Lucas Ricafort, and to
have conveyances thereof made by Lucas Ricafort declared void. Judgment
was rendered in the court below in favor of the defendants and the plaintiff
appealed.  
chanroblesvirtualawlibrary chanrobles virtual law library
The judgment was based upon the finding that on the 11th of December,
1894, the right of Doroteo Ricafort to repurchase the property had expired
and that it belonged exclusively to Carolina Gonzales Calderon. The court
also found that the repurchase made on the last-named date was made with
money furnished by the defendant, Lucas Ricafort, and for his use and
benefit, Doroteo Ricafort at that time promising to transfer the property to
Lucas Ricafort or to arrange the matter in his will.   chanroblesvirtualawlibrary chanrobles virtual law library

These findings of the court can not be sustained. Eighteen months, the term
fixed in the deed of 1886, had expired at the time of the repurchase in
1894, but the deed of resale furnishes conclusive evidence that the right of
Doroteo Ricafort to rebuy the property had not expired. That deed recites
the sale made in 1886 with the right of repurchase and contains the
following statement:

Segundo. Que habiendo reintegrado a la exponente el expresado D. Doroteo

Ricafort y Francisco los indicados mil doscientos treinta pesos precio de la
susodicha venta antes de vencer la ultima prorroga que se le habia
concedido para retraer las mencionadas fincas.

There is nothing in the case to contradict this declaration.   chanroblesvirtualawlibrary chanrobles virtual law library

Two witnesses testified that a few days prior to the 11th of December,
1894, they accompanied the defendant Lucas Ricafort when he took to the
office of his father, Doroteo Ricafort, 2,600 pesos. They also stated that this
money was the money of the defendant, Lucas Ricafort, and that they
understood that it was to be used for the repurchase of the land in
controversy. One of the witnesses testified that Doroteo said that when he
made therein that the property in question was the property of Lucas. The
defendant, Lucas Ricafort, testified that after the repurchase his father
delivered to him to the document of 1886 with the memorandum at the foot
thereof to the effect that the land had been repurchased.   chanroblesvirtualawlibrary chanrobles virtual law library

Almost all of the evidence in the case is opposed to the finding of the court
below that the repurchase of this property was made in the name of
Doroteo Ricafort for the benefit of the defendant Lucas Ricafort. Among
other items of such evidence are the following:  chanrobles virtual law library

On the 28th of March, 1898, the defendant, Lucas Ricafort commenced in

the Court of First Instance of Manila proceedings for the purpose of
obtaining a possessory information on the land in question. The petition
then signed by him contains the following statement:

Segundo. Que las descritas fincas las he adquirido de D. Doroteo Ricafort y

Francisco por sucesion intestada en diez y ocho de Julio de mil ochocientos
noventa y seis.
Lucas Ricafort testified at the trial that his father delivered to him the
document above mentioned on the 25th of December, 1894, as a Christmas
present because in the preceding month of November he had given him
2,600 pesos for the purchase of the property, and Lucas then said that was
his best Christmas present because it recalled a memorable occasion,
namely, the anniversary of the death of his mother. He also testified that his
father was delivering to him other papers to prove the transfer of this
property to his name which Lucas did not wish to accept, but his father told
him that he ought to accept them because they would recall the anniversary
of the death of his mother, the repurchase of the property having taken
place on that date.  
chanroblesvirtualawlibrary chanrobles virtual law library

It plainly appears from all of the evidence in the case that at the time of the
death of Doroteo Ricafort he was still the owner of whatever interest was
acquired by the repurchase of this property in 1894, and that if the 2,600
pesos was furnished by Lucas Ricafort to his father for that purpose it was
so furnished by way of a loan and did not transfer to Lucas Ricafort and
interest in the property. As to his defendant, therefore, the judgment of the
court below can not be sustained.   chanroblesvirtualawlibrary chanrobles virtual law library

The defendant, Antonio Boncan, on the 11th of November, 1904, bought

from the defendant, Lucas Ricafort, one of the tracts of land described in the
complaint for the sum of 1,600 pesos, there being reversed in the deed the
right to the vendor to repurchase the property within two years from the
said date, and the defendant Boncan claims that when he bought this piece
of property the possessory information above referred to had been inscribed
in the Registry of Property in the name of Lucas Ricafort, his vendor, and
that in making the purchase he relied upon such inscription. We have seen
that at the time of Lucas Ricafort was not, in fact, the owner of all the
property conveyed by him to the defendant Boncan, and the question is,
What effect had the inscription of the possessory information in his name
upon the rights of the other heirs of Doroteo Ricafort?  chanrobles virtual law library

Article 33 of the Mortgage Law provides as follows:

The record of instruments or contracts which are null in accordance with the
law are not validated thereby.

Article 34 of the same law provides that a purchaser from one who appears
from the registry to be the owner of the property acquires under certain
circumstances a good title thereto although the vendor may not be, in fact,
the owner. That part of the article so providing can have no application to
this case because in the same article there is found the following statement:

The provisions of this article may at no time be applied to the instrument

recorded in accordance with the provisions of article 390, unless the
prescription has validated or secured the interest referred to therein.
Moreover, article 394 of the same law provides in part as follows:

Entries of possession shall prejudice or favor third persons from the date of
their record, but only with regard to the effects which the laws attribute to
mere possession.

The defendant, Boncan, is therefore not protected by the fact that a

possessory information was inscribed in the Registry of Property in the
name of his grantor.   chanroblesvirtualawlibrary chanrobles virtual law library

Nor was there any proof to bring the case within the doctrine of estoppel, as
that is declared in section 333, paragraph 1, of the Code of Civil Procedure.
There was evidence in the case of some admissions made by Maria Salome
Virgenes during her lifetime and by Juana Ricafort, one of her heirs, to the
effect that Lucas Ricafort was the owner of the property, but there was no
evidence that any of these statements ever came to the knowledge of the
defendant, Boncan, or that he ever acted upon them in any way. In order to
create an estoppel it is necessary to prove not only conduct of the person
sought to be estopped but also that the person claiming the estoppel knew
of such conduct and relied and acted upon it to his damage.   chanroblesvirtualawlibrary chanrobles virtual law library

Macario Lim was also made a defendant in this case. It appeared that on the
9th of March, 1903, Lucas Ricafort sold that part of the property described
under letter B to this defendant, reserving the right in the deed to
repurchase the same within eight years from the date of the said sale. This
deed and others of a similar nature had been before executed by Lucas
Ricafort were recorded in the Registry of Property, but this defendant can
derive no more benefit from this inscription than can the other defendant,
Boncan, because they all go back to the inscription of the possessory
information.  
chanroblesvirtualawlibrary chanrobles virtual law library

As to the estoppel in regard to this defendant, he testified that he talked

with Juana Ricafort twice in his house in regard to a purchase of the
property before he paid the money therefor and that she told him that Lucas
was the owner thereof. It appears that Juana Ricafort lived in a small house
upon the property and that Macario Lim is the father of the wife of Lucas
Ricafort. She testified that she went to the house of Macario Lim once about
two years after the death of Maria Salome Virgenes, which would place her
visit in the year 1902, and then told him that Lucas Ricafort could not sell or
mortgage the property. Upon this question of estoppel the court below
made no finding of fact, and in view of the denial of Juana Ricafort of this
alleged admission, we can not say that the estoppel is proved.   chanroblesvirtualawlibrary chanrobles virtual law library

The defendants, Boncan and Macario Lim, have therefore no more rights in
the property than has their vendor, the defendant Lucas Ricafort.   chanroblesvirtualawlibrary chanrobles virtual law library
Lucas Ricafort, Maria Salome Virgenes, and Juana Ricafort, were in
possession of the property from the death of Doroteo Ricafort in 1896 to the
death of Maria Salome Virgenes in 1900, and since that time Juana Ricafort
and Lucas Ricafort, together with Augusto Ricafort, one of the heirs of Maria
Salome Virgenes, have been in possession of the property. During all the
time elapsed since the death of Doroteo Ricafort, Lucas Ricafort has
administered the property and made improvements thereon, paying therefor
with his own money. The value of these improvements according to the
evidence in the case is 8,000 pesos, but no account has been rendered by
Lucas Ricafort of his administration of the property and no evidence was
offered as to taxes paid by him during the last three or four years. Under
the circumstances of this case, all the joint owners of the property living
thereon, and repairs and improvements having been made during this time
by one of such joint owners, we think the evidence is sufficient to show a
consent to the making of such repairs by the owners other than Lucas
Ricafort, and that they must share in the expense therefor, especially in
view of the fact that there is evidence in the case that the buildings which
he repaired were in a ruinous condition. (Civil Code, arts. 395, 397.)  chanrobles virtual law library

Doroteo Ricafort treated this property as his own, but there is evidence in
the case, furnished by Juana Ricafort as well as by the defendant Lucas
Ricafort, to the effect that he was not the owner of all of it. The exact
interest which had therein we can not determine from the evidence before
us.  
chanroblesvirtualawlibrary chanrobles virtual law library

The judgment of the court below is reversed, and the case remanded for the
purpose (1) of determining the exact interest which Doroteo Ricafort had in
this property at the time of his death, and (2) of stating an account between
Lucas Ricafort and the estate of Maria Salome Virgenes in regard to the
expenses incurred by Lucas Ricafort and the moneys received by him in his
administration of the property since the death of Doroteo Ricafort. After
such determination, judgment will be rendered fixing the rights of the
parties in the property in question in accordance with the views
hereinbefore expressed. No costs will be allowed to either party in this
court.   chanroblesvirtualawlibrary chanrobles virtual law library

After expiration of twenty days let judgment be entered in accordance

herewith and ten days thereafter the record remanded to the court below
for proper action. So ordered.   chanroblesvirtualawlibrary chanrobles virtual law library

Arellano, C.J., Torres, Mapa and Carson, JJ., concur.

EN BANC
 G.R. No. L-8170 August 27, 1913
 

L. O. HIBBERD, Plaintiff-Appellant, vs. ESTATE OF JAMES P.

MCELROY, Defendant-Appellee.

Gibbs, McDonough and Blanco for appellant.

Cyrus J. Francis for appellee.

TRENT, J. : chanrobles virtual law library

An appeal from a judgment of the Court of First Instance disallowing the

claim of the plaintiff for P1,000 against the estate of the deceased James P.
McElroy.   chanroblesvirtualawlibrary chanrobles virtual law library

The case was submitted on agreed statement of facts and the contract
entered into on November 25, 1910, by and between the plaintiff and the
deceased. The pertinent parts of these document are as follows:

It is further stipulated that the assessment work mentioned in said claims

has been performed and salary of the watchman therein mentioned has
been paid; that the mining property mentioned in the contract was operated
for the first year under the terms of the contract, and as a result of such
operation the claimant, Mr. Hibberd, suffered a loss, and that it is
impossible to operate the property at a profit; that after the expiration of
the first year's operation and after ceasing the further development of the
property the claimant gave notice to the administrator requesting that they
performed their share of the assessment work; but that the administrator
refused to perform his share of the assessment work and that no part of the
claim for his share of such assessment work has been paid. (Stipulation of
facts.)
chanrobles virtual law library

It is further agreed by and between the parties hereto that the said L. O.
Hibberd shall have the exclusive right to the possession of the said mining
claims during the period of one year to commence from date of this
instrument and shall have the sole and exclusive right to exploit the same
and take all the profits of such exploitation unto himself as his own and
exclusive individual property, and for that purpose shall have the right to
make use of all the improvements now in and upon any of the above
mentioned mining claims. (Contract.) chanrobles virtual law library

It is further agreed by and between the parties hereto that if the said J.P.
McElroy at the expiration of one year from the date of this instrument
should not be in sufficiently good health to be himself upon said claims and
assume co-management thereof with the said L. O. Hibberd, then the said
L. O. Hibberd shall continue in the exclusive possession, occupation,
management and exploitation of the said mining claims and their
improvements and after paying all expenses of the exploitation shall pay
one-half of the net proceeds monthly to the said J.P. McElroy. (Contract.) chanrobles virtual law library
The said L. O. Hibberd does hereby bind and obligate himself to do and
perform all the assessment work on the said mining claims required under
the laws of the Philippine Islands. (Contract.)

The only question raised on the appeal is the interpretation of the contract.
Counsel for the administrator contends, and the Court of First Instance has
decided, in effect, that the plaintiff is bound to do all of the annual
assessment work upon the mining claims mentioned in the contract
necessary to secure patents therefor, while counsel for the appellant
contends that under the terms of the contract the plaintiff was obligated to
perform on his own account only the annual assessment work required for
the period of one year.   chanroblesvirtualawlibrary chanrobles virtual law library

Under the terms of the third paragraph of the contract, McElroy was to
assume the comanagement of the property at the end of the first year if the
condition of his health permitted, and if not, the plaintiff was to continue in
the exclusive possession and management and, after deducting all expenses
of the exploitation, to pay over monthly to the said McElroy one-half of the
net profits.  
chanroblesvirtualawlibrary chanrobles virtual law library

It is perfectly apparent from the terms of paragraph 3 of the contract that if

McElroy had lived and had been in good health, he would have had to go
upon the property himself at the end of the first year, and assume the
comanagement of the same, thus sharing with the plaintiff the work of the
administration and exploitation thereof, which necessarily included the
annual assessment work, and it is unreasonable and inequitable to construe
the sixth clause of the contract so as to require Hibberd to contribute twice
as much labor and money while assuming the burden of the administration
on account of the death of McElroy as he would have had to contribute had
McElroy been able to perform his share of the labor and management.   chanroblesvirtualawlibrary chanrobles virtual law library

The only reasonable interpretation that can be placed upon the contract is
that it was intended to obligate plaintiff to perform the annual assessment
work for the first year unconditionally, and that for any exclusive possession
and management of the property due to the illness or incapacity of his
partner, he was to do such annual assessment work as manager without
assistance from the coowner only in the event of there being sufficient
proceeds from the operation of the property to defray the expenses thereof.
If counsel for the appellee and the trial court are correct in their
interpretation of the contract to the effect that it obligates the plaintiff to do
all of the assessment work on his own account and for an indefinite period
of time, then by the same logic the plaintiff would be obligated to continue
the exploitation of the mining claims under the terms of the third paragraph
of the contract even though the property should not produce a dollar in
return for the heavy expenditures necessary to continue its operation.   chanroblesvirtualawlibrary chanrobles virtual law library

Article 1283, 1284, and 1285 of the Civil Code provide:

However general the term of the contract maybe, there should not be
understood as included therein things and cases different from those with
regard to which the persons interested intended to contract.   chanroblesvirtualawlibrary chanrobles virtual law library

If any stipulation of a contract should admit of different meanings, it should

be understood in the sense most suitable to give it effect.   chanroblesvirtualawlibrary chanrobles virtual law library

The stipulations of a contract should be interpreted in relation to one

another, giving to those that are doubtful the meaning which may appear
from the consideration fall of them together.

Under section 36 of the Act of Congress of July 1, 1902, in order to retain

possession of a mining claim the locator or possessor must do assessment
work to the value of P200 per annum each year. Under section 37 of the
same Act, labor or improvements of the value of P1,000 must be done upon
each claim before patent can be obtained therefor. If the judgment of the
trial court is correct, then the plaintiff would be obligated to make an outlay
in labor or improvements of P10,000 upon the ten claims covered by the
contract before he would be relieved from the obligations thereof.   chanroblesvirtualawlibrary chanrobles virtual law library

It is a principle of law well established that where a specific provision in a

contract is followed by a general provision covering the same subject
matter, the special provision will be held to prevail over the general
provision when the two cannot stand together, but if reasonable effect can
be given to both, each is to be retained.  
chanroblesvirtualawlibrary chanrobles virtual law library

In the case of Calvo vs. Olives (6 Phil Rep., 88), the question was one as to
the construction of a contract the third paragraph of which was in question.
Under the terms of the will of one De la Fuente, all of his property was given
to the defendants Angeles, Paz, and Gabriel Olives, subject to a life interest
in the usufruct thereof in favor of his widow, Concepcion Calvo, the plaintiff
in the case. In the settlement of the estate differences arose between the
plaintiff and defendants, and with a view to the adjustment of these
differences the contract in question was entered into, the third paragraph of
which was as follows:

The remainder shall be turned over to Concepcion Calvo to be used by her

as usufructuary heiress after she has given a mortgage bond.

The court, in interpreting this clause, says: "Article 1283 of the Civil Code
provides: . . . and we are of the opinion that although the word 'remainder'
as used in the third paragraph of the said agreement might, in the broadest
acceptation of the term, refer to the total balance resulting from the sale of
the Escolta property, nevertheless, under the provisions of the foregoing
paragraph it should be limited to the subject matter of the agreement and
thus limited it must be taken to refer to the remainder of the share of the
inheritance in which Concepcion Calvo had a usufructuary life interest.
That this is the correct interpretation of the language used in confirmed by
the fact that the paragraph itself expressly provides that the "remainder" to
be turned over to Concepcion Calvo was to be used by her "as usufructuary
heiress," and it is not contended that she had an interests as usufructuary
heiress in more than an undivided one-half interest in this particular
property.

In the case at bar, although the words a used in the sixth paragraph of the
contract require Hibberd to do all the assessment work required by the laws
of the Philippine Islands, it will be seen from the first alternative in
paragraph 3 that after the first year, McElroy was to assume
comanagement, possession, and exploitation of the claims. The words
"possession, management, and exploitation" are certainly broad enough in
meaning to include all and every requisite and thing necessary in connection
with the operation and enjoyment of the possession of said claims, and the
assessment work required by law to be done on said claims being necessary
for the retention by both parties of the possession of the claims, the use of
such words by the parties in the contract in fixing their obligations after the
first year must naturally include the obligation of performing such work
thereafter as a joint one, the claims being held by them in common. Under
he second alternative, Hibberd was authorized to deduct from the income of
the property the expenses of such management and exploitation, the profits
remaining to be divided equally between the parties. The assessment work
being a necessary requisite to such possession, management, and
exploitation as above pointed out, it follows that an expenditure for that
purpose is a proper charge to the expenses of such management. Therefore,
under either alternative open to McElroy, it is plain that the intention of the
parties was that Hibberd was to do no his own account the assessment work
for the year and that thereafter such work was to be a joint obligation of the
parties. This, then, would have the effect of limiting the provision of the
sixth clause so as to make it applicable only to the first year after the date
of the contract.  
chanroblesvirtualawlibrary chanrobles virtual law library

It appears from the stipulation between the parties that the operation of the
claims for the first year by Hibberd, exclusively, resulted in a loss and that
said claims cannot be operated at a point. While it is true the contract does
not provide for the liability of the coowners in case of loss in the operation
of the property, still, in accordance with article 1689 of the Civil Code, the
losses must be shared in the same proportion as the profits. Hibberd has
paid the expenses of the assessment work of the second year and there
having been no income from the property to reimburse him, he has a right
to look to the estate of McElroy for such reimbursement.   chanroblesvirtualawlibrary chanrobles virtual law library

Article 395 of the Civil Code provides: "Every coowner shall have the right
to oblige the participants to contribute to the cost of keeping the thing or
right held in common. Only the party renouncing his share in the ownership
can exempt himself from this obligation." chanrobles virtual law library
The property mentioned in the contract is listed and claimed as one of the
assets of the estate of McElroy and there can, therefore, be no contention
that his share in the ownership of the same has been renounced. Before
performing the assessment work upon the property after the first year,
Hibberd demanded of the administrator of McElroy that he perform his share
of such work and the administrator refused. Hibberd was then compelled to
do the work in order to retain the property held in common by him and said
estate.  
chanroblesvirtualawlibrary chanrobles virtual law library

Section 36 of the Act of Congress of July 1, 1902, providing for the

forfeiture of the interest of the coowner who fails to contribute his share of
the assessment work is not in conflict with article 395 of the Civil Code,
above quoted, and would perhaps not be construed as an exclusive remedy
in cases of ordinary coownership resulting from joint location of mining
claims, but it is unnecessary to determine that point in this controversy
because the contract imposes the duty upon Hibberd to manage and
administer the property in the event of McElroy's being unable to assist him
and such administration necessarily includes the assessment work. This was
clearly intended to be paid out of the proceeds of the operation of the
property whether managed by the partners jointly or by Hibberd alone on
account of McElroy's inability to participate in the management by reason of
illness or death. In default of any proceeds of operation the language of the
contract and the law imply a joint obligation to do the annual assessment
work as coowners and managers or in the event of the disability or death of
McElroy an obligation on his part or that of his administrator to contribute
one-half of the expense which the plaintiff was bound to incur to protect his
possession held for the joint benefit of himself and his cotenant in
accordance with the terms of article 396, supra.   chanroblesvirtualawlibrary chanrobles virtual law library

The defendant does not contend that section 36 of the Act of Congress of
July 1, 1902, is applicable to this case because such a defense would
amount in effect to a renunciation of any interest in the claims. The
administrator should have renounced all interest in the property at the time
demand was made upon him to contribute his share of the assessment work
in order to have escaped the absolute obligation imposed upon him by the
terms of the contract and the law to reimburse the plaintiff for the estate's
share of the expense incurred for the joint benefit of the coowner.   chanroblesvirtualawlibrary chanrobles virtual law library

For the foregoing reasons, the judgment appealed from, in so far as it

disallows the claim of the plaintiff for P1,000 for assessment work on the
claims in question, done in behalf of the defendant, is reversed; and it is
hereby ordered that this claim against the estate be allowed in full.
Otherwise, the judgment is affirmed.   chanroblesvirtualawlibrary chanrobles virtual law library

Arellano, C.J., Torres, Carson and Moreland, JJ., concur.