Case Summary (G.R. No. 229775)
Background and Dispute Overview
Simon Velasco owned multiple properties, including the subject property in Daraga, Albay. Upon his death intestate, Simon’s children allegedly divided his estate, with the subject property assigned to Juan and Felisa Velasco jointly. They executed a Deed of Extrajudicial Settlement and Sale to sell the property to Leopoldo Espinas, Felisa’s son, in 1966. Respondents, heirs of Simon’s other children, challenged the transaction in 2010, asserting that Juan and Felisa acted fraudulently by excluding other co-heirs—Genoviva and Heriberto—who were not parties to the extrajudicial settlement.
RTC Ruling
The RTC held that Simon’s four children were co-owners of the properties and that Juan and Felisa had full ownership of their respective shares, enabling them to validly sell their undivided rights to Leopoldo. The court recognized Leopoldo as owner of the shares sold, with petitioners and respondents as co-owners of the subject property. It dismissed counterclaims, emphasizing that tax declaration listings do not affect the established co-ownership.
Court of Appeals Ruling
The CA found fault with the extrajudicial settlement’s execution by Juan and Felisa without the consent or participation of Genoviva and Heriberto, who were still alive when the document was executed. The court emphasized Section 1, Rule 74 of the Rules of Court, which requires participation or notice of all heirs for extrajudicial settlement to be binding. It ruled that fraud had been committed, thus annulling the extrajudicial settlement. The petitioners’ motion for reconsideration was denied.
Petitioners' Arguments on Review
Petitioners argued the existence of an actual partition among the heirs, with properties allocated respectively to Genoviva, Heriberto, and the joint share of Juan and Felisa (the subject property). They contended that since the land was already partitioned, Juan and Felisa rightfully executed the extrajudicial settlement and sale to Leopoldo. They further argued that Genoviva and Heriberto’s lack of objection and silent acquiescence, coupled with Leopoldo’s open possession and improvements, support the validity of the partition and sale. They invoked the doctrines of parol (oral) partition, prescription, and laches to bar respondents’ claims.
Respondents' and Petitioners' Submissions
Respondents maintained that the extrajudicial settlement was fraudulent because it excluded some heirs without their knowledge or consent, and no valid partition had taken place. Petitioners countered by emphasizing that an oral partition, if followed by possession and exercise of ownership over the respective parts, is valid and enforceable in equity. They underscored that Leopoldo’s uninterrupted possession for over four decades supports the existence of a completed partition.
Supreme Court’s Legal Reasoning on Partition
The Court reaffirmed that partition involves the division and assignment of common property to co-owners or heirs, which may be effectuated extrajudicially by public instrument or orally among heirs without creditors’ involvement. An oral partition is valid between parties and may be enforced in equity if accompanied by part performance such as possession in severalty and acts of ownership. The Court cited precedents recognizing the validity of oral partitions, especially where there has been long acquiescence and possession that clearly demarcate the respective shares.
Factual Findings on Oral Partition and Possession
The Court found credible evidence that Simon’s children orally partitioned the estate, each taking possession and exercising ownership over their respective shares, including giving Juan and Felisa the subject property. There was no dispute that Genoviva and Heriberto had their respective properties, and none contested the transfer of the subject property to Leopoldo during their lifetimes despite knowledge thereof. The Court emphasized that the long-standing possession and improvements made by Leopoldo confirmed the partition’s validity.
Presumption of Title From Possession
Drawing on Civil Code provisions, the Court stated that actual possession under a claim of ownership raises a disputable presumption that the possessor has title. Since respondents failed to pr
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Case Syllabus (G.R. No. 229775)
Background and Parties Involved
- The subject property involved was registered under Original Certificate of Title (OCT) No. 20630, located in Namantao, Daraga, Albay.
- Simon Velasco was the original owner of several properties, including the subject property.
- Simon had four children: Heriberto Velasco, Genoviva Velasco, Felisa Velasco, and Juan Velasco.
- Respondents, Felix Luna, Jr. (son of Genoviva), Armando Velasco, and Antonio Velasco (children of Heriberto), alleged fraud by Juan and Felisa in executing a Deed of Extrajudicial Settlement and Sale dated May 14, 1966, in favor of Leopoldo Espinas, son of Felisa.
- Petitioners, Lilibeth Espinas-Lanuza and Onel Espinas, heirs of Leopoldo, argued that there was a valid partition of Simon’s estate during which the subject property was allocated to Juan and Felisa, who then validly sold it to Leopoldo.
Trial Court Decision (RTC)
- The RTC ruled on December 2, 2014, that Simon's children were co-owners of the estate properties, including the subject property.
- Recognized Juan and Felisa’s ownership of their shares and affirmed their right to alienate their respective portions.
- Validated the sale of the undivided shares in the subject property to Leopoldo Espinas.
- Dismissed the defendants' counterclaim for lack of merit.
- Declared respondents and petitioners as co-owners of the property, regardless of the tax declaration details.
Court of Appeals Decision and Resolution
- The CA, on June 13, 2016, reversed the RTC, holding Heriberto and Genoviva were excluded from the 1966 Deed of Extrajudicial Settlement with no proof of their death at the time.
- Emphasized that an extrajudicial settlement does not bind absent heirs who did not participate or receive notice, per Section 1, Rule 74 of the Rules of Court.
- Found that fraud was committed against the excluded heirs; annulled the Deed and Sale.
- Petitioners’ motion for reconsideration was denied on January 26, 2017.
Issues Raised by Petitioners in the Petition for Review
- The CA erred in:
- Declaring respondents as co-owners with petitioners.
- Ignoring the oral partition of Simon’s estate among his heirs before the 1966 sale.
- Disregarding laches and prescription favoring petitioners despite allegations of fraud.
Petitioners’ Arguments
- Argue that Simon’s estate was effectively partitioned orally, with distinct shares allocated to each heir.
- Property in Magogon went to Genoviva, in Ting-ting, Taloto went to Heriberto, and the subject property was the joint share of Juan and Felisa.
- The property remained in Simon’s name; Juan and Felisa executed the necessary extrajudicial deed to allow sale to Leopoldo.
- There was continuous possession and enjoyment of the property by Leopoldo and his heirs for decades.
- No objections were raised by Genoviva and Heriberto regarding ownership or sale during the