G.R. No. 106401 - Spouses Zaragoza vs. Court of Appeals

Flavio Zaragoza Cano was the registered owner of parcels of land in Iloilo and had four children: Gloria, Zacariaz, Florentino, and Alberta Zaragoza.
Flavio died intestate on December 9, 1964, survived by his four children.

On December 28, 1981, Alberta Zaragoza-Morgan (the private respondent) filed a complaint before the Court of First Instance of Iloilo against Spouses Florentino and Erlinda Zaragoza (petitioners).
The complaint sought the delivery of her inheritance share consisting of Lots 943 and 871 and payment of damages.
Alberta claimed her share was previously partitioned by her father during his lifetime but was never formally conveyed to her due to her change in citizenship status to American, which restricted her acquisition of land except by hereditary succession.

Petitioners acknowledged kinship and the existence of the properties but denied knowledge of any lifetime distribution by deeds of sale from their father.
They claimed Lot 871 remained in Flavio’s name and Lot 943 was sold to them for valuable consideration.
They denied the alleged intention of Flavio to convey Lots 871 and 943 specifically to Alberta or that any such partition took place.

Petitioners filed a Motion to Dismiss for failure to state a cause of action and for not impleading indispensable parties; the motion was deferred.
On October 7, 1986, the RTC ruled Lot 871 belonged to Alberta as part of her inheritance but dismissed her claim over Lot 943.
The RTC found Flavio partitioned most properties inter vivos by deed of sale except Lot 871, intended for Alberta.
The conveyance of Lot 943 to the petitioners was held valid by the RTC.

Both parties appealed; on March 27, 1992, the Court of Appeals reversed the ruling on Lot 943, awarding it to Alberta, affirming the rest.
The appellate court gave weight to Alberta’s testimonial and documentary evidence proving ownership of Lots 871 and 943 as her inheritance.
The court found the deed of sale to petitioners for Lot 943 to be fictitious based on signature discrepancies and inconsistencies.
Petitioner’s Motion for Reconsideration was denied on June 26, 1992.

Petitioners argued the Court of Appeals erred in ruling Lots 871 and 943 belonged to Alberta absent a will or valid deed of sale.
They challenged hearsay evidence and the finding of forgery regarding the deed of sale for Lot 943.
They asserted the Lot 943 deed of sale was a public instrument, notarized and witnessed, and the TCP evidenced their ownership.
In a supplemental petition, petitioners asked for dismissal of plaintiff's complaint for failure to state a cause of action and invoked procedural requirements related to inheritance and collation.
The case raised two main issues: validity of the inter vivos partition and the propriety of attacking the deed of sale over Lot 943 and its corresponding title collateral to a registration proceeding.

Whether the partition inter vivos by Flavio Zaragoza Cano of Lots 871 and 943, in favor of his children, is valid despite the absence of a will or conveyance in favor of Alberta Zaragoza-Morgan.

Whether the validity of the Deed of Sale and Transfer Certificate of Title over Lot 943 in favor of the petitioners can be questioned by private respondent in a proceeding for delivery of inheritance share, constituting a collateral attack on registered title.