G.R. No. 196733 - Heirs of Jarque vs. Jarque

Petitioners are the heirs of Roger Jarque (Roger), the original plaintiff.
Respondents are Marcial Jarque, Lelia Jarque-Lagsit, and Teresita Jarque-Bailon, living children of Lupo, Roger’s brother.
The case involves ownership of an unregistered parcel of land, Lot No. 2560, situated in Boton, Casiguran, Sorsogon, originally declared under the name of Laureano Jarque (also spelled Lauriano).
Laureano was married to Servanda Hagos; they had four children: Roger, Lupo, Sergio, and Natalia.

Petitioners claim that upon Laureano's death in 1946, Roger inherited Lot No. 2560 and exercised ownership and possession thereafter.
After Servanda’s death in 1975, the children orally partitioned the estate, assigning Lot No. 2560 to Roger.
In 1960, Roger mortgaged Lot No. 2560 to Dominador Grajo but redeemed it through his nephew before expiry. He later mortgaged it again to Benito Coranes for P700.00. When Roger attempted to redeem it, Lupo claimed the property, asking Roger to let him keep it for his children’s schooling. Roger agreed.
Upon Lupo’s death in 1980, Roger sought to reclaim the property but allowed Lupo’s wife, Asuncion, to possess it for livelihood. Upon Asuncion’s death in 1981, her eldest child Dominga similarly requested possession. Roger again acquiesced.
Dominga died single and without issue in 1992; her siblings (respondents) continued possession with assurances to care for the property.
In 2004, Roger’s sons attempted to retake possession but found respondents claiming ownership. Municipal records became significant revealing Dominga’s execution and registration of a “Ratification of Ownership of Real Property” claiming ownership through redemption from Benito, and respondents’ execution of a waiver and confirmation of rights in favor of Lelia, leading to tax declarations in Lelia’s name.

Respondents argue Servanda sold Lot No. 2560 to Benito in 1972 with a two-year right to repurchase.
Dominga supposedly redeemed the property for P950.00 in 1974 at Servanda’s request and took possession, paying taxes and later transferring rights to Lelia, who possessed as owner.

The 1st Municipal Circuit Trial Court (MCTC), Casiguran, ruled in 2007 in favor of petitioners, declaring them rightful owners and voiding respondents’ documents claiming title. It found respondents’ possession was by mere tolerance and bad faith; redemption was not a mode of ownership acquisition; and the deed of ratification was void. It awarded moral, exemplary damages, attorney's fees, and interest.
The Regional Trial Court (RTC) affirmed the MCTC decision in 2009 and denied respondents’ motion for reconsideration.
The Court of Appeals (CA) reversed the lower courts in 2010, ruling that under the 1889 Civil Code (Old Civil Code), applicable at Laureano’s death, Servanda was entitled to half of the conjugal property and had the right to dispose of her share. The CA found Servanda’s sale to Benito valid and that Dominga acquired ownership by redemption and that oral partition was unsupported.

Petitioners challenge the CA’s application of the Old Civil Code’s successional and conjugal property rules. Under the Old Civil Code, Servanda could not inherit from Laureano as the children are qualified heirs and she had no authority to alienate the property after Laureano’s death.
They assert the deed of sale was void, the sale was an equitable mortgage, and Dominga did not acquire ownership through redemption.
Petitioners assert oral partition was valid and possessed in the concept of owner, supported by evidence of Roger’s possession and transactions involving Lot No. 2560.
They also argue respondents’ possession was tolerant and in bad faith, thus defeating any prescriptive title claim.

Respondents argue the Old Civil Code issue was raised for the first time on appeal; they contend Servanda had the authority to sell as ownership or exclusive property is unproven.
They claim ownership by preponderance of evidence and acquisitive prescription.

Old Civil Code (1889) provisions on conjugal partnership, successional rights, and co-ownership.
New Civil Code (RA 386) provisions on co-ownership and partition.
Jurisprudence establishing oral partition enforceability through part performance and equity.
Doctrine on usufruct and limitations on right of disposal.
Laws on sale with right of repurchase (pacto de retro) and conventional redemption.
Rules on acquisitive prescription requiring possession in the concept of owner, good faith, and just title.

Whether the Court of Appeals erred in ruling that Servanda had the authority to sell Lot No. 2560 with a right of repurchase under the Old Civil Code and that Dominga acquired ownership by redemption.
Whether the oral partition among Laureano’s children assigning Lot No. 2560 to Roger was valid and enforceable.
Whether Dominga’s redemption of the property vested full ownership in her or only a lien/right of reimbursement.
Whether respondents acquired ownership over Lot No. 2560 by prescription based on their possession since 1974.
Whether the MCTC decision voiding respondents’ documents and declaring petitioners as the rightful owners should be reinstated.