Title
Adille vs. Court of Appeals
Case
G.R. No. L-44546
Decision Date
Jan 29, 1988
Rustico redeemed family property alone, falsely claimed sole ownership, and registered it under his name. SC ruled he held it in trust for co-heirs, affirming co-ownership and rejecting prescription due to fraud.
exclusive ownership
property held in common
trustee

Case Summary (G.R. No. L-44546)

Factual Background

The property in dispute was Lot 14694 of the Cadastral Survey of Albay, located in Legaspi City, with an area of about 11,325 square meters, originally owned by one Felisa Alzul. Felisa had two marriages. By her first marriage she had one child, the petitioner Rustico Adille. By her second marriage she had several children who are the private respondents herein. In 1939 Felisa sold the property in pacto de retro with a three-year period of repurchase. She died in 1942 without redeeming. During the period of redemption, the petitioner redeemed the property by himself, later executed an extrajudicial partition affidavit representing himself as the only heir, and succeeded in having OCT No. 21137 transferred to his name in 1955. One of the private respondents, Emeteria Asejo, occupied a portion of the land.

Trial Court Proceedings

The private respondents filed an action for partition with accounting on the theory that the petitioner had acted as a trustee and was only entitled to reimbursement of his share of redemption expenses. The petitioner counterclaimed seeking ejectment of Emeteria from the portion she occupied. The Court of First Instance of Albay sustained the petitioner’s position, declared him the absolute owner, dismissed the partition suit, and ordered Emeteria to vacate the land.

Court of Appeals Decision

The respondent Court of Appeals reversed the trial court and ruled in favor of the private respondents. The Court of Appeals concluded that the petitioner had not acquired exclusive ownership by his act of redemption and that fraud attended the registration executed in his name. The appellate court held that the petitioner either acted as a negotiorum gestor for his co-heirs under Art. 2144 or, more correctly on the evidence, had committed fraud and thereby became a trustee under Art. 1456 of the Civil Code for the benefit of his half-siblings.

Issue Presented

The main legal question presented to the Supreme Court was whether a co-owner who redeems the entire property held in common may thereby acquire exclusive ownership of the whole property, or whether his act of redemption merely creates a right to reimbursement and, under certain circumstances, a fiduciary duty to his co-owners.

Petitioner's Contentions

The petitioner contended that by redeeming the property in its entirety and shouldering the expenses, and by reason of the failure of his co-heirs to join in the redemption within the prescribed period, the property legally devolved upon him. He relied upon provisions he cited as the old Civil Code, Art. 1515, and the present Code provision he identified as Art. 1613, which recognize the rights of the vendee a retro and the vendee’s right to demand redemption of the entire property.

Supreme Court Ruling and Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals in toto. The Court ordered no pronouncement as to costs. The Court found no reversible error in the appellate court’s conclusions that the petitioner did not acquire exclusive ownership by his unilateral redemption and that he was liable to his co-heirs.

Legal Basis and Reasoning — Redemption, Co-ownership and Reimbursement

The Court explained that a co-owner may exercise a right of repurchase only with respect to his share. Redemption of the entire thing by one co-owner, even when he pays the whole expense, does not automatically vest absolute ownership in him nor terminate the co-ownership relationship. The Court relied on the principle that necessary expenses for preservation or redemption may be incurred by one co-owner subject to reimbursement by the rest, citing Art. 488 (as set out in the record) and related Civil Code provisions. While a vendee a retro may not be compelled to consent to a partial redemption, the Court clarified that the statutory rights of the vendee a retro and the consequences of the failure of co-owners to exercise redemption rights do not create a mechanism by which a redeeming co-owner converts the entire common ownership into his exclusive ownership absent the other requisites for termination.

Legal Basis and Reasoning — Fraud, Registration and Implied Trust

The Court agreed with the Court of Appeals that fraud attended the registration of the property in the petitioner’s name. The petitioner’s unilateral affidavit of extrajudicial settlement falsely asserting that he was the only heir facilitated the registration and evidenced a clear intent to defraud his half-siblings. Under Art. 1456 of the Civil Code, property acquired through fraud is, by force of law, impressed with an implied trust in favor of the person defrauded. The Court held that the petitioner’s acts were consistent with exclusive appropriation achieved through fraudulent misrepresentation rather than mere management of abandoned property. The Court therefore affirmed that the petitioner must be considered a trustee for the benefit of the private respondents.

Legal Basis and Reasoning — Torrens Registration and the Effect of Prescription

The Court addressed prescription issues raised by the petitioner. It acknowledged the long-standing rule that prescription may terminate a co-ownership when a co-owner repudiates the common ownership and maintains open, continuous, exclusive, and notorious possession for the prescriptive period. The Court delineated the requisites for such repudiation: a clear act of repudiation; clear communication of that repudiation to the other co-owners; convincing evidence; and possession meeting the open, continuous, exclusive, and notorious standard for the period required by law, citing authorities such as Santos v. Heirs of Crisostomo and Bargayo v. Camumot. The Court found these requisites absent. The petitioner had concealed his conduct by claiming sole heirship and had not given clear notice of repudiation. One co-heir continued in occupation of a portion of the land and the petitioner had not taken steps to eject her except by way of counterclaim after litigation commenced. The Court further observed that while Presidential Decree No. 1529, Sec. 31 makes registration constructive notice, Torrens title does not protect a registrant who succeeds by fraud, citing Ame

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