G.R. No. 143868 - Ferdez vs. Spouses Tarun

The subject matter is an 8,209-square meter fishpond located in Arellano-Bani, Dagupan City, identified as Lot No. 2991.
Originally covered by OCT No. 43099 and later reissued as TCT No. 24440, the property was co-owned by members of the Fernandez family.
The co-ownership originally included the brothers Antonio, Santiago, Demetria, and Angel Fernandez together with their uncle (noting a correction in the record: although initially referred to as Armando, the property was actually co-owned by Jose, Amando, Miguel, Paz, Angel, and Aurelio Fernandez).
Due to the death of one co-owner without issue, the fractional interest increased from 1/6 to 1/5 among the surviving co-owners.

On June 4, 1967, Antonio Fernandez sold his share—approximately 547.27 square meters—to respondents, the Spouses Carlos and Narcisa Tarun.
On June 18, 1967, Demetria Fernandez similarly sold her share (547.27 square meters) to the respondents, making the total area sold approximately 1,094.54 square meters.
The two sales were duly recorded and annotated on the original OCT, signaling the transfer of shares from the original co-owners to the respondents.

On November 14, 1969, the co-owners executed a Deed of Extrajudicial Partition of Lot No. 2991 (and another lot covered by TCT No. 10944), which:

Recognized and respected the prior sale of the 1,094.54-square meter portion to respondents by Antonio and Demetria Fernandez by excluding that portion from the partition.
Included an exchange provision whereby Angel Fernandez exchanged his share in the other property to consolidate the co-ownership in Lot No. 2991 with the respondents.
Resulted in the issuance of TCT No. 24440 in favor of Angel Fernandez and the respondents, who thereafter undertook payment of the realty taxes on the sold portion.

Despite respondents’ demand for partition and share in the income from the property, Angel Fernandez and later his heirs (the petitioners) continuously maintained possession of the whole fishpond and refused a partition, leading respondents to subsequently file a suit for partition and damages.
The Regional Trial Court (RTC) initially rendered a judgment in favor of the petitioners on August 1, 1996, holding that under Articles 1620 and 1621 of the Civil Code the petitioners had the right to redeem the portion sold to respondents.
The Court of Appeals (CA) reversed the RTC ruling by:

Noting that at the time of the sale, Angel Fernandez was the co-owner entitled to redemption, but he chose not to exercise his right.
Recognizing the substantial compliance with the legal notice requirements via the execution of the extrajudicial partition.
Concluding that petitioners, as successors of Angel Fernandez, were bound by the inaction regarding the right to redeem.

Whether petitioners are entitled to exercise the right of legal redemption given the contention that they were not notified of the sale and only learned of it through a partition summons.
Whether the right of legal redemption under Articles 1620 and 1621 of the Civil Code applies when the co-owner’s share is sold to another co-owner (as in this case) rather than to a third person.

Whether the transaction should be considered an equitable mortgage on account of a grossly inadequate price and the fact that the vendor (or co-owner) allegedly remained in possession and enjoyed the fruits of the property.

Whether the extrajudicial partition, executed with valid formalities, is void and inefficacious due to alleged iniquities, including the claim that Angel Fernandez was shortchanged by a significant portion of the property.

Whether petitioners are entitled to damages, attorney’s fees, and costs following the partition and redemption claims.

Whether the factual findings adopted by the CA, which upheld the validity of the partition and the registration of the corresponding deeds, were supported by the evidence on record, or whether they resulted from surmises and conjectures contrary to the trial court’s findings.