G.R. No. L-29192 - De los Santos vs. De la Cruz

Gertrudes de los Santos (plaintiff-appellee) filed a complaint for specific performance on May 21, 1965, against Maximo de la Cruz (defendant-appellant).
The complaint arose from an extrajudicial partition agreement executed on August 24, 1963, among co-heirs of Pelagia de la Cruz, which involved the distribution of a portion of land measuring approximately 20,000 sq. m.
The partition agreement provided for the adjudication of three (3) specific lots to the defendant under the condition that he would develop and subdivide the estate, with development costs to be defrayed from the sale proceeds of the said lots.

Plaintiff alleged that despite repeated demands by herself, other co-heirs, and subdivision residents, the defendant failed to perform his obligation to develop the estate, even though he had already sold the adjudicated lots.
The relief sought included specific performance (i.e., enforcing the defendant’s duty to develop the lots), attorney’s fees, and costs of litigation.
In his answer, the defendant admitted to the execution of the partition agreement but raised affirmative defenses, asserting:

That the agreement was void with respect to the plaintiff because she was not a legal heir but a grandniece included by mistake.
That although he had disposed of the adjudicated lots, the proceeds were insufficient to properly develop the subdivided estate.

The defendant also filed a counterclaim alleging that the plaintiff had sold her alleged share for P10,000.00, entitling him to one-fourth of the proceeds as his share by way of reversion.

An order entered on July 19, 1965, declared the plaintiff in default for failing to answer the counterclaim.
On July 6, 1966, the parties submitted a stipulation of facts containing several agreed points:

Both parties admitted to the execution and original purpose of the extrajudicial partition agreement for dividing the estate of Pelagia de la Cruz.
It was acknowledged that several lots within the estate had been sold, with the defendant designated as the administrator responsible for the development and subdivision.
The agreement identified the defendant as a nephew of the decedent and the plaintiff as the grandniece of Pelagia de la Cruz.
The decedent, Pelagia de la Cruz, died intestate on October 16, 1962, while the plaintiff’s mother, Marciana de la Cruz, had predeceased the decedent in 1935.
Specific lots (namely Lots 1, 2, and 3) were recognized as having been sold by the defendant.
The stipulation further noted deficiencies in the subdivision, such as the absence of properly constructed roads and lack of adequate utilities (light and water).

In its decision dated November 3, 1966, the Court of First Instance of Rizal, Branch IX, held that:

The defendant, by being a party to the extrajudicial partition agreement, was estopped from challenging the plaintiff’s right to inherit from Pelagia de la Cruz.
The defendant was ordered to perform his obligation of developing the subdivided estate.
The defendant was further ordered to pay the plaintiff actual damages amounting to P2,000.00, attorney’s fees of P500.00, and the costs.

The court did not rule on the defendant’s counterclaim.
A subsequent motion for new trial filed by the defendant was denied, leading to the present appeal.

Defendant-appellant argued that the lower court erred in not declaring the extrajudicial partition agreement void with respect to the plaintiff and, therefore, that the plaintiff had no valid cause of action.
The defendant contended that the court erred in affirming that he was estopped from questioning the plaintiff’s right to inherit.
Additionally, the defendant challenged the award of actual damages and the refusal to grant relief on his counterclaim.

Whether the plaintiff-appellee, being a grandniece of Pelagia de la Cruz, could be deemed a legal heir eligible to enforce the extrajudicial partition agreement.

The issue centered on the interpretation of inheritance rights in both the direct and collateral lines.
The question arose on whether the inclusion of the plaintiff in the partition, despite her status as a grandniece, conferred upon her the right to enforce the contractual obligations contained therein.

Whether the defendant-appellant was estopped from challenging the plaintiff’s rights given that the partition agreement was allegedly executed under a mistaken belief regarding her status as an heir.

The legal inquiry involved assessing if estoppel can be applied to a void agreement or one tainted by a mistake as to the legal rights of the parties.

Whether the award of actual damages to the plaintiff was justified considering the absence of evidence supporting the claimed damages.

The potential issue revolved around the requirement for proof of damages under Article 2199 of the Civil Code.

Whether the defendant’s counterclaim should have been admitted and his relief granted, particularly in light of the plaintiff’s subsequent default on the counterclaim and the lack of supporting evidence for the alleged sale of her share.