G.R. No. L-29192 - De los Santos vs. De la Cruz

Case Summary (G.R. No. L-29192)

Factual Background

The parties executed an extrajudicial partition dated August 24, 1963, over a tract of land of about 20,000 square meters. The partition adjudicated three lots (Lots 1, 2 and 3) to Maximo de la Cruz in addition to his regular share, on condition that he would undertake development and subdivision of the estate and defray development expenses from proceeds of sale of those three lots. The stipulation of facts admitted that the defendant had sold Lots 1, 2 and 3, that there were several houses and residents in the subdivided area, and that proper roads and utilities had not been provided. The stipulation also admitted that Pelagia de la Cruz died intestate on October 16, 1962; that defendant was a nephew of the decedent; and that plaintiff was the grandniece of the decedent, her mother Marciana de la Cruz having predeceased the decedent on September 22, 1935.

Procedural History

On May 21, 1965, Gertrudes de los Santos sued Maximo de la Cruz for specific performance to compel development of the three adjudicated lots and sought P1,000.00 as attorney’s fees and costs. The defendant admitted execution of the partition but pleaded that the agreement was void insofar as the plaintiff was concerned because she was not an heir. He also counterclaimed, alleging that plaintiff had sold her share for P10,000.00 and prayed for P2,500.00 as his one-fourth share by way of reversion. The court below declared the plaintiff in default for failing to answer the counterclaim on July 19, 1965. The case was submitted for decision on a stipulation of facts on July 6, 1966. The trial court rendered judgment on November 3, 1966, ordering defendant to perform development obligations, awarding plaintiff P2,000.00 as actual damages, P500.00 as attorney’s fees, and costs, and making no disposition of the counterclaim. A motion for new trial was denied, and defendant appealed.

Issues Presented on Appeal

The appellant condensed seven assigned errors into three principal questions: (1) whether the partition agreement was null and void with respect to the plaintiff and whether plaintiff therefore had no cause of action; (2) whether the court below erred in holding that the defendant was estopped from questioning the plaintiff’s right under the agreement; and (3) whether the award of actual damages was proper and whether the trial court erred in not granting relief on the defendant’s counterclaim.

Parties’ Contentions

Defendant-Appellant admitted the extrajudicial partition but contended that plaintiff was not a legal heir of the decedent and that her inclusion in the partition was a mistake, rendering the partition void as to her. He argued that, having sold the adjudicated lots, he lacked sufficient proceeds to complete development but that, on his counterclaim, he was entitled to one-fourth of the proceeds of an alleged sale by the plaintiff. Plaintiff-Appellee sought specific performance of the partition agreement and damages for the defendant’s alleged failure to perform the development obligations. The stipulation of facts reflected mutual admissions on execution of the partition and the physical condition of the subdivision.

Trial Court Ruling

The court below held that the defendant, being a party to the extrajudicial partition agreement, was estopped from questioning the plaintiff’s right to inherit from Pelagia de la Cruz and ordered the defendant to perform development obligations for Lots 1, 2 and 3. The trial court also awarded P2,000.00 as actual damages and P500.00 as attorney’s fees to the plaintiff. The counterclaim was not adjudicated.

Supreme Court’s Analysis on Heirship and Validity of the Partition

The Court examined whether the plaintiff was an heir of Pelagia de la Cruz. It concluded that she was not. The Court relied on Art. 972 and Art. 962 of the Civil Code and on the rule in Linart y Pavia vs. Ugarte y Iturralde, 5 Phil. 176 (1905), to hold that a grandniece could not inherit in competition with nieces or nephews who were nearer in degree. Because the plaintiff was a grandniece and the decedent’s nieces and nephews were nearer relatives, the plaintiff was excluded by operation of law from the inheritance. Applying Art. 1105 of the Civil Code, the Court held that a partition which included a person believed to be an heir, but who was not, was void only with respect to that person. Therefore the extrajudicial partition was void as to the plaintiff and could not confer upon her a right to enforce the agreement.

Estoppel and Mistake

The Court addressed the trial court’s reliance on estoppel. It held that estoppel could not be predicated on a void contract and that no estoppel arose where the conduct of a party was due to ignorance founded on an innocent mistake. The Court cited authorities to the effect that acts based on innocent mistake will not estop a party, including Ramiro vs. Grano, 54 Phil. 744 (1930), and Capili, et al. vs. Court of Appeals, G.R. No. L-18148, February 28, 1963 (7 SCRA 367), and referred to Baltazar vs. Lingayen Gulf Electric Power Co., et al., G.R. Nos. 16236-38, June 30, 1965 (14 SCRA 522), to confirm that estoppel cannot be invoked where acts are prohibited by law or contrary to public policy. Because the partition was void as to the plaintiff and her inclusion arose from mistake, the defendant was not estopped from asserting the invalidity of the partition.

Damages and Requirement of Proof

The Court found the award of actual damages unsupportable. It observed that actual or compensatory damages must be proved under Art. 2199 of the Civil Code. This case had been decided on the stipulation of facts without the presentation of evidence, so no proof of actual damages existed. Consequently, the award of P2,000.00 as actual damages could not stand.

Counterclaim, Default, and Restitution

The Court analyzed the counterclaim and the effect of the plaintiff’s default. It recalled Section 1, Rule 18, Revised Rules of Court, and the principle articulated in Macondray & Co. vs. Eustaquio, 64 Phil. 446 (1937), that a default judgment for failure to answer does not imply admission of the plaintiff’s causes of action or an admission that the facts alleged are supported by law; it merely deprives the defendant of the opportunity to be heard. The Court noted that the defendant had not offered evidence to prove the alleged sale of the plaintiff’s share for P10,000.00 and that the stipulation of facts did not mention that sale. Nevertheless, the stipulation did admit that the plaintiff received Lot 9 in co-ownership under the partition. The Court held that remote relatives or unrelated persons who unduly received property under a null and void partition must restore it to the rightful successor, citing De Torres vs.

Case Syllabus (G.R. No. L-29192)

Parties and Procedural Posture

GERTRUDES DE LOS SANTOS, PLAINTIFF-APPELLEE, instituted a complaint for specific performance against MAXIMO DE LA CRUZ, DEFENDANT-APPELLANT, in the Court of First Instance of Rizal, Branch IX, Civil Case No. Q-8792.
The complaint was filed on May 21, 1965, and the case proceeded to trial and decision by the court a quo.
The case was the subject of a direct appeal to this Court, and the decision under review was promulgated by VILLAMOR, J..
The published citation of the decision appears at 147 Phil. 509, G.R. No. L-29192, February 22, 1971.

Key Factual Allegations

The parties executed an extrajudicial partition agreement dated August 24, 1963, covering a tract of land of around 20,000 square meters, a copy of which was attached to the complaint.
The partition adjudicated, in addition to each party's corresponding share, three specific lots to the defendant on condition that he would develop and subdivide the estate and defray development expenses from the proceeds of sale of those three lots.
The defendant admitted having sold the three adjudicated lots but allegedly failed to develop the subdivision and refused to perform his obligations despite demands by the plaintiff, other co-heirs, and residents.
The plaintiff prayed for an order requiring defendant to comply with the partition agreement and for P1,000.00 as attorney's fees and costs.

Defendant's Answer and Counterclaim

The defendant admitted execution of the partition agreement but pleaded that the agreement was void insofar as the plaintiff was concerned because she was not an heir of Pelagia de la Cruz and had been included by mistake.
The defendant alleged that proceeds from the sale of the three lots were insufficient properly to develop and improve the subdivision.
In his counterclaim the defendant alleged that the plaintiff had sold her share for P10,000.00 and prayed for declaration of the partition's invalidity as to plaintiff and recovery of P2,500.00 as his share by reversion.

Stipulation of Facts Submitted

The parties submitted the case on stipulation of facts dated July 6, 1966, which admitted the existence and execution of the extrajudicial partition (marked Exhibit A/1).
The parties stipulated that the original purpose of the partition was distribution of the land among the heirs of Pelagia de la Cruz, but that several lots had since been sold and there were houses and residents in the subdivision.
The parties stipulated that the defendant was appointed administrator and in-charge of development and subdivision as provided in the partition agreement.
The parties stipulated that Lots 1, 2 and 3 as described in the partition had been sold by the defendant and that there were no properly constructed roads nor adequate light and water facilities.
The parties stipulated that the defendant was a nephew of Pelagia de la Cruz and that the plaintiff was a grandniece, with plaintiff’s mother Marciana de la Cruz having predeceased Pelagia (Marciana died September 22, 1935; Pelagia died intestate October 16, 1962).
The stipulation further admitted that the plaintiff had received a portion of the estate under the partition, specifically Lot 9 (LRC Psd-29561) in co-ownership with named heirs.

Decision Below

The court a quo, by decision dated November 3, 1966, held that the defendant, being a party to the partition agreement, was estopped from questioning the plaintiff's right to inherit and must abide by the agreement.
The court ordered the defendant to perform his obligations to develop Lots 1, 2 and 3 and awarded plaintiff P2,000.00 as actual damages, P500.00 as attorney's fees, and costs.
The court a quo made no disposition on def