G.R. No. L-16749 - Aznar vs. Garcia

Case Summary (G.R. No. L-16749)

Key Dates

Principal transfers and events as pleaded and relied upon: March–September 1965 (series of sales by Sixto and Severino), September 16, 1966 (sale to Filomeno and Lourdes), November 25 and October 1989 (sales by Filomeno to Antonio and to Nicomedes), June 27, 2001 (Extrajudicial Settlement by Roberta), December 14, 2001 (annotations and issuance of TCTs), July 16, 2002 (Antonio’s complaint), November 9, 2012 (RTC decision), November 20, 2014 (Court of Appeals decision), February 13, 2019 (Supreme Court decision).

Applicable Law and Rules

Constitutional basis: 1987 Philippine Constitution (applicable because the decision date is after 1990). Procedural rule relied upon: 1997 Rules of Court, Rule 18, Section 5 (effect of failure to appear at pre‑trial). Substantive law and principles invoked: Civil Code provisions on matrimonial property and succession (Article 119 on property relations; Article 996 on shares in succession); Article 1078 on co‑ownership pre‑partition; nemo dat quod non habet (no one can give what he does not have); Torrens‑system principles that a certificate of title is evidence of ownership but does not create ownership nor foreclose proof of co‑ownership or trust.

Procedural History

Antonio filed a complaint for nullity of deeds, cancellation of titles, partition and recovery of shares against the petitioners and the Register of Deeds after discovering TCTs issued in petitioners’ names replacing OCT No. RO‑3456. Mario filed a motion to intervene asserting an independent chain of title. Petitioners and counsel failed to attend the pre‑trial; the trial court declared them in default and allowed respondents to present evidence ex parte. The Regional Trial Court (RTC) granted relief to respondents, declared several documents null and void, cancelled the TCTs issued to petitioners, and ordered a new partition. The Court of Appeals affirmed the RTC in toto. Petitioners elevated the case to the Supreme Court.

Issues Presented on Appeal

The Supreme Court distilled the principal issues to: (1) whether the trial court properly declared petitioners in default and lawfully allowed respondents to present evidence ex parte; and (2) whether the cancellation of the petitioners’ Transfer Certificates of Title (TCTs) and the resultant repartition were proper.

Pre‑trial Default and Presentation of Ex Parte Evidence

The Court upheld the RTC’s declaration of default and its allowance of ex parte presentation of evidence. Rule 18, Section 5 of the 1997 Rules of Court mandates parties’ attendance at pre‑trial; failure of a defendant to appear permits the court to allow the plaintiff to present evidence ex parte and to render judgment on that basis. Petitioners gave no valid excuse for non‑appearance; a post hoc claim that counsel lost a calendar did not suffice. The consequence was that the trial and appellate courts could only consider the evidence offered by respondents at trial.

Evidence Considered on the Merits

Because petitioners were in default, the Supreme Court limited its review to the evidence presented by respondents: OCT No. RO‑3456, its annotations, and the series of Deeds of Absolute Sale recorded and annotated in the OCT. Those documents, when read together, established the several conveyances and annotated transactions involving Lot No. 4277 and provided the factual basis for assessing the validity of each transfer.

Nature of the Property and Succession Shares

Lot No. 4277 was conjugal property registered in the names of spouses Sixto and Marcosa. Marcosa predeceased Sixto (1931). Under the Civil Code regime applicable to marriages contracted before the Family Code and absent a marriage settlement, the conjugal partnership dissolved upon death, with the surviving spouse and legitimate children receiving statutory shares. The Court applied Article 996 and relevant jurisprudence: upon Marcosa’s death, Sixto obtained the surviving‑spouse share so that, overall, Sixto held three‑fourths of the property and Roberta, as the sole legitimate child, held one‑fourth (i.e., Roberta’s undivided share = 1,331.75 sq m of the 5,327 sq m total).

Effect of Co‑ownership on the Validity of Subsequent Sales

A co‑owner can validly sell only his or her undivided share; such a sale affects only the seller’s share and the buyer acquires only what the seller could transfer. Applying nemo dat, the Court held that Sixto’s 1965 sale to Severino could be effective only up to Sixto’s 3/4 undivided share (3,995.25 sq m). Consequently, subsequent dispositions by Severino and his vendees are valid only to the extent of what Severino actually owned (the 3/4 portion). The Court traced the chain of title and apportioned validity accordingly:

Severino’s sale to Isnani and Lily of 2,663.5 sq m was valid because it fell within Severino’s 3/4 share.
Severino’s purported sale to Mariano of the remaining half was valid only to the extent of the remaining portion of Severino’s interest (1,331.75 sq m). Between competing vendees, prior tempore potior jure applied.
Sales by Isnani and Lily to Filomeno (and Filomeno’s subsequent sales) were valid as they stemmed from a valid portion within the 3/4 share.
Filomeno’s sale to Antonio (2,363.5 sq m) and sale to Nicomedes (300 sq m) were valid because those areas were covered by Filomeno’s acquired share.
Mariano’s sale to Nicolas (1,332.5 documented but correctly considered 1,331.75) in 1968 was valid up to Mariano’s lawful aliquot share; Nicolas later sold to Gomercindo validly as to that aliquot.
Mariano’s later sales to Marcelino (1987) and to Rodulfo (1990) were invalid insofar as they purported to convey interests already alienated to Nicolas (and thence to Gomercindo). Consequently, transfers deriving from those invalid sales (including Rodulfo’s sale to Mario) could not convey good title.

Purchasers’ Good Faith and Remedies

The Court explained that purchasers who buy from a non‑registered owner or from a seller who lacks title are not purchasers in good faith because such facts should put a buyer on inquiry. Marcelino, Rodulfo, and Mario therefore could not claim buyer‑in‑good‑faith protection for the failed transactions; their remedy lies against their transferors and the transferors’ heirs, not against parties who had prior valid estates.

Roberta’s Extrajudicial Settlement and Confirmation of Sales

Roberta’s June 27, 2001 Extrajudicial Settlement by Sole and Only Heir, in which she adjudicated the entire lot to herself and purportedly confirmed certain deeds of her father, was examined. The Court held Roberta was only entitled to one‑fourth of the property; she could not validly adjudicate the whole property to herself. The adjudication of her entire estate was void insofar as it prejudiced persons who had already acquired proprietary rights. The confirmation portion of the Extrajudicial Settlement (purporting to validate earlier sales) was struck do

Case Syllabus (G.R. No. L-16749)

Procedural Posture

Petitioners (Nicomedes Augusto, Gomercindo Jimenez, Marcelino Paquibot, and Roberta Silawan) filed an appeal to the Supreme Court from the Court of Appeals (CA) decision that affirmed the Regional Trial Court (RTC) judgment.
The RTC declared null and void an Extrajudicial Settlement by Sole and Only Heir, several deeds and related documents, cancelled titles issued to petitioners and ordered a repartition of Lot No. 4277.
The CA in CA-G.R. CEB C.V. No. 04753 affirmed the RTC decision in toto on November 20, 2014; petitioners’ motion for reconsideration before the CA was denied on June 2, 2015.
Petitioners filed the instant petition before the Supreme Court alleging, among others: improper default declaration and ex parte presentation of respondents’ evidence; that OCT No. RO-3456 showed petitioners’ transactions were earlier and duly annotated; that petitioners were first registrants and buyers in good faith; and that the CA erred in sustaining relief to respondent Mario Dy and in the partition ordered by the trial court.
The Supreme Court resolved two principal issues: (1) the propriety of declaring petitioners in default and permitting respondents to present evidence ex parte; and (2) the propriety of cancelling petitioners’ Transfer Certificates of Title (TCTs).

Subject Property and Title Background

The land in controversy is Lot No. 4277 with an area stated principally as 5,327 square meters (a footnote indicates sometimes cited as 5,237 sq m in parts of the rollo).
Lot No. 4277 was originally registered in the names of spouses Sixto Silawan and Marcosa Igoy under Original Certificate of Title (OCT) No. RO-3456.
Petitioners discovered Transfer Certificates of Title (TCTs) already issued replacing OCT No. RO-3456, specifically:
- Lot No. 4277-A, TCT No. 48562 — spouses Nicomedes & Gaudencia Augusto — 300 sq m;
- Lot No. 4277-B, TCT No. 48563 — Gomercindo Jimenez (married to Estela) — 1,331 sq m;
- Lot No. 4277-C, TCT No. 48564 — Marcelino Paquibot (married to Elena) — 1,332.50 sq m;
- Lot No. 4277-D, TCT No. 48565 — Roberta Silawan, widow — 2,363.50 sq m.
The TCTs resulted from annotations and actions on OCT No. RO-3456, notably the annotation of an “Extrajudicial Settlement By Sole and Only Heir with Confirmation of the Deed of Absolute Sale[s]” executed by Roberta on June 27, 2001 and annotated December 14, 2001, and a Letter-Request by petitioners asking the Register of Deeds to cancel OCT No. RO-3456 in favor of issuing TCTs in their names, followed by issuance of TCTs on December 14, 2001.

Key Documentary Chain of Transfers (as presented in the record)

March 31, 1965: Sixto purportedly sold Lot No. 4277 (5,327 sq m) to Severino Silawan (annotation in OCT shows March 30, 1959 in some parts).
May 7, 1964 (annotation indicates 1964 for one sale): Severino sold one-half of the property (2,663.5 sq m) to Isnani Maut and Lily Silawan.
September 15, 1965: Severino sold the remaining one-half (2,663.5 sq m) to Mariano Silawan (document noted that half had been sold to another).
September 16, 1966: Isnani and Lily sold their 2,663.5 sq m to spouses Filomeno Augusto and Lourdes Igot.
November 25, 1989: Filomeno and Lourdes sold 2,363.5 sq m of their acquired portion to Antonio Carlota Dy.
October 1989: Filomeno and Lourdes sold 300 sq m to Nicomedes and Gaudencia Augusto.
July 18, 1968: Mariano sold 1,332.5 sq m to Nicolas and Maura (who later sold to Gomercindo); a Deed of Absolute Sale dated February 16, 1978 between Nicolas Aying (married to Maura Augusto) and Gomercindo is in the chain.
July 14, 1987: Mariano purportedly sold 1,332.5 sq m to Marcelino Paquibot (a TCT was issued for Marcelino in 2001).
May 12, 1990: Mariano purportedly sold 1,332.5 sq m to Rodulfo Augusto (who later sold to Mario Dy on May 23, 1994).
The OCT No. RO-3456 and the Deeds of Absolute Sale annotated therein were the primary documentary evidence relied upon by respondents at trial.

Parties’ Principal Claims

Antonio Dy (complainant below, respondent here) claims title to a portion of Lot No. 4277 based on his purchase of 2,363.5 sq m on November 25, 1989 tracing the series of transactions from Sixto to Severino to Isnani/Lily to Filomeno/Lourdes to Antonio. He seeks nullity of the Extrajudicial Settlement, cancellation of resulting titles, and repartition so that the portion he bought be delivered to him.
Mario Dy intervened and claimed title to a portion tracing his acquisitions through Mariano → Rodulfo → Mario chain.
Petitioners (Nicomedes, Gomercindo, Marcelino, Roberta) relied upon the Extrajudicial Settlement by Roberta adjudicating the entire Lot No. 4277 to herself and confirming assorted Deeds of Absolute Sale by Sixto, which led to petitioners obtaining annotated TCTs and requesting cancellation of OCT No. RO-3456 in favor of issuing TCTs in their names.

Pre-trial, Default, and Evidence Presented

At pre-trial the petitioners and their counsel failed to appear; the RTC declared petitioners in default and allowed Antonio to present evidence ex parte.
Petitioners’ counsel later moved to lift the order of default alleging his 2009 calendar was lost; the RTC denied the motion in an Order dated September 14, 2010.
Because petitioners were in default, the RTC rendered judgment based solely on the evidence presented ex parte by respondents: OCT No. RO-3456 with annotations and various Deeds of Absolute Sale.

RTC Findings and Relief

On November 9, 2012, the RTC granted Antonio’s complaint, declared null and void:
- the Extrajudicial Settlement by Sole and Only Heir executed by Roberta;
- an Affidavit of Loss executed by Marcelino;
- the Letter-Request of petitioners to cancel OCT No. RO-3456;
- the Deed of Partition executed by petitioners; and
- the Deed of Sale between spouses Mariano and Consorcia in favor of Marcelino.
The RTC ordered cancellation of all TCTs issued in favor of petitioners and ordered a new partition of Lot No. 4277 as:
- spouses Antonio and Jean Dy — 2,363.50 sq m, more or less;
- spouses Mario and Luisa Dy — 1,332.50 sq m, more or less;
- spouses Gomercindo and Estela Jimenez — 1,331 sq m, more or less; and
- spouses Nicomedes and Gaudencia Augusto — 300 sq m, more or less.
In its reasoning the RTC found irregularity in the sale in favor of Marcelino; noted issues regarding a tracing cloth for an approved subdivision plan and the knowledge of prior purchasers; concluded Marcelino could not be considered a buyer in good faith.

CA Ruling and Reasoning

The Court of Appeals (Cebu City) affirmed the RTC in toto on November 20, 2014.
The CA held Roberta could not unilaterally rescind the sale executed by her father Sixto because the sale was made in 1965 and purchasers acquired proprietary rights in the interim.
The CA observed that at the time the property was offered to buyers there was no annotation placing them on guard that the sale was infirm; the Extrajudicial Settlement executed by Roberta lacked probative value and, because it was the instrument that paved the way for subsequent documents, those accompanying documents were also nullified as fraudulently executed.
The CA denied petitioners’ motion for reconsideration on June 2, 2015.

Supreme Court: Pre-trial Default — Legality of Ex Parte Presentation

The Supreme Court held the RTC properly allowed respondents to present evidence ex parte due to petitioners’ failure to appear at pre-trial, citi