Title
Constantino vs. Heirs of Constantino Jr.
Case
G.R. No. 181508
Decision Date
Oct 2, 2013
Heirs of Pedro Constantino, Sr. dispute ownership of a 240-sqm lot; SC voids "Pagmamana sa Labas ng Hukuman" and Extrajudicial Settlement with Waiver for excluding heirs, violating legitimes.
document
tax declarations
disputed parcel of land

Case Summary (G.R. No. 181508)

Factual Background

The dispute concerned a 240 square meter unregistered parcel declared for taxation under Tax Declaration No. 20814 in the name of the late Pedro Constantino, Sr. Upon his death, he left six children, among them PEDRO CONSTANTINO, JR., BRUNO CONSTANTINO, and SANTIAGO CONSTANTINO, whose descendants include the parties. In 1992, a document denominated Pagmamana sa Labas ng Hukuman was executed that purportedly allocated the 240 square meters among certain descendants, and subsequent tax declarations were issued in the names of petitioners for subdivided portions. In 1968 an Extrajudicial Settlement with Waiver was executed by heirs of Pedro Jr. adjudicating a 192 square meter lot. Respondents alleged that the Pagmamana and subsequent tax declarations resulted from a simulated, fraudulent agreement that excluded rightful heirs and unlawfully cancelled Tax Declaration No. 20814. Petitioners contended that the Pagmamana was a valid voluntary partition among heirs and that respondents were estopped from challenging related titles because of the 1968 extrajudicial settlement and alleged prior acquiescence.

Trial Court Proceedings

Respondents filed a complaint on June 17, 1999 for the nullification of the Pagmamana sa Labas ng Hukuman, Tax Declaration Nos. 96-10022 (02653) and 96-10022 (02655), and reinstatement of Tax Declaration No. 20814, with prayer for preliminary injunction and damages. After pre-trial and trial, the RTC on October 27, 2003 dismissed the complaint and upheld the Pagmamana and the tax declarations. The RTC found the parties to be in pari delicto and relied on doctrines of estoppel and privity in estate to conclude that respondents, as successors-in-interest, were bound by the 1968 extrajudicial settlement and thus barred from recovery. Claims for damages were dismissed for lack of support.

Court of Appeals Ruling

The Court of Appeals reversed the RTC on May 31, 2007 and ruled for the respondents, concluding that the 192 square meter lot adjudicated in the 1968 Extrajudicial Settlement with Waiver belonged to PEDRO CONSTANTINO, JR. and not to the estate of PEDRO CONSTANTINO, SR. The CA held that the document evidenced a typographical error but nevertheless showed that the property belonged to Pedro Jr., and therefore the trial court erred in applying the in pari delicto doctrine to sustain the Pagmamana.

Issues Presented

The principal issue presented to the Supreme Court was whether the Court of Appeals erred in declining to apply the in pari delicto doctrine and in holding the extrajudicial settlement to pertain to property of Pedro Jr., thereby refusing to annul the Pagmamana and associated tax declarations. Petitioners also challenged the CA’s disregard of pre-trial stipulations and admissions relied upon by the RTC in its application of in pari delicto.

Parties' Contentions

Respondents maintained that the 1968 Extrajudicial Settlement with Waiver conveyed the 192 square meter lot to the heirs of Pedro Jr., that they were not parties to any unlawful agreement affecting the remaining 240 square meters, and that the CA correctly found the Pagmamana infirm. Petitioners argued that the Pagmamana was valid, that respondents and their predecessors had acquiesced to an agreement recognizing the 192 square meter lot as the share of Pedro Jr.’s line and therefore were estopped from contesting the Pagmamana, and that the RTC properly applied the in pari delicto doctrine to deny relief.

Supreme Court Ruling

The Supreme Court reversed the Court of Appeals and declared both the Pagmamana sa Labas ng Hukuman and the Extrajudicial Settlement with Waiver void. The Court held that the in pari delicto doctrine did not apply to validate the deeds and that both instruments were inexistent and void ab initio for having an object contrary to law insofar as they attempted to exclude rightful heirs and circumvent legitimes. The Court ordered that the estate of Pedro Constantino, Sr. be partitioned with the full participation of all heirs.

Legal Basis and Reasoning

The Court reiterated that the doctrine of in pari delicto—derived from the maxims ex dolo malo non oritur actio and in pari delicto potior est conditio defendentis—precludes relief where parties to a single illegal contract are equally at fault, and that Articles 1411 and 1412 of the Civil Code govern such situations. The Court explained, however, that those provisions apply to a single contract between contracting parties and to situations where the illegality does not involve simulation. Here, there were two separate deeds executed by different sets of heirs, each purporting to assign portions of the same ancestor’s estate with the identical intention to exclude other heirs. The Court held that applying in pari delicto would validate both deeds instead of nullifying them, thereby frustrating the rule against circumvention of legitimes. Consequently, the proper rule was the nullity provision of Art. 1409 of the Civil Code, which renders inexistent contracts whose cause, object, or purpose is contrary to law or public policy. The Court further addressed judicial admissions: it found that respondents had made pre-trial stipulations and admissions, recorded under Section 7, Rule 18 and governed b

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