Title
Heirs of Jarque vs. Jarque
Case
G.R. No. 196733
Decision Date
Nov 21, 2018
Heirs of Roger Jarque contested ownership of Lot No. 2560, claiming oral partition and invalid sale by Servanda. SC ruled in their favor, invalidating respondents' claims via redemption and prescription.
unregistered parcel of land
possession
ownership

Case Summary (G.R. No. 196733)

Factual Background

The dispute involves an unregistered parcel described as Lot No. 2560, Boton, Casiguran, Sorsogon, declared under the name of Laureano Jarque. Laureano and Servanda Hagos lived as husband and wife and had four children: Roger, Lupo, Sergio, and Natalia. Roger claimed that following Laureano’s death in 1946 he received Lot No. 2560 as his inheritance and exercised acts of ownership and possession over it, including a mortgage in 1960 which he redeemed through his nephew Quirino Jarque and a subsequent mortgage to Benito Coranes for P700.00. After a disputed sequence of redeptions, tolerations, and transfers of possession among family members, Dominga (respondents’ predecessor-in-interest) was alleged to have repurchased or redeemed the property in 1974 for P950.00 and later executed a Ratification of Ownership of Real Property dated May 24, 1991. Respondents later caused a tax declaration to be issued in the name of Lelia and possessed the property until the complaint for annulment of deeds, recovery of ownership and possession, accounting, and damages was filed by petitioners before the 1st Municipal Circuit Trial Court (MCTC), Casiguran, Sorsogon.

Trial Court Proceedings and Ruling

The MCTC found in favor of petitioners and concluded that redemption is not a mode of acquisition of ownership and that respondents’ possession was tolerated and therefore not adverse. The MCTC nullified the Ratification of Ownership executed by Dominga, the Waiver and Continuation of Rights executed by Marcial and Teresita, and the tax declarations issued in the names of Lelia and Dominga. The court declared petitioners as rightful owners and possessors, ordered respondents to vacate, awarded moral damages of P30,000.00, exemplary damages of P10,000.00, and attorney’s fees and costs of suit of P20,000.00, and directed respondents to pay P950.00 plus legal interest from October 1974 until May 1991.

RTC Proceedings and Ruling

The Regional Trial Court, Branch 52, Sorsogon City, affirmed the MCTC Decision in toto on June 19, 2009, and denied respondents’ motion for reconsideration on September 18, 2009, thereby sustaining the trial court’s findings on lack of title transfer by redemption, possession by mere tolerance, voidability of the ratification deed, and the monetary awards.

Court of Appeals Ruling

The Court of Appeals reversed the trial courts in its Decision dated September 7, 2010. The CA applied the Old Civil Code as the law in force at the time of Laureano’s death in 1946 and reasoned that Servanda, as surviving spouse, acquired one-half of the conjugal partnership and had the right to dispose of her share absent proof of partition. The CA accepted that Servanda sold Lot No. 2560 with a right of repurchase and that Dominga, by redeeming the property, lawfully acquired ownership. The CA found the alleged oral partition unsupported and treated evidence of redemption and subsequent possession as vesting title in respondents by succession from Dominga.

Issues Presented to the Supreme Court

The Supreme Court framed the central questions as: who has the better right over Lot No. 2560; whether the Old Civil Code governs the rights and whether Servanda had authority to alienate the property; whether redemption by Dominga conferred ownership or merely a lien; whether a parol partition was effectively consummated; and whether respondents acquired title by prescription. The petition sought annulment of the CA Decision and reinstatement of the MCTC Decision.

Parties' Contentions on Appeal

Petitioners contended that under the Old Civil Code Servanda could not inherit from Laureano to the extent asserted by the CA because the children were qualified heirs, that the alleged oral partition and subsequent disposals were unsupported by evidence, that redemption does not effectuate conveyance of ownership to a third person, and that the deed of ratification was void and executed many years after the facts. Respondents countered that the issue of applying the Old Civil Code was raised belatedly, that Servanda had authority to dispose of the property or that no evidence established the marriage or the conjugal nature of the property, that they possessed and paid taxes for the property, and that they acquired ownership by prescription.

Governing Law on Marital Property and Succession

The Court recognized that Laureano died in 1946, prior to the effectivity of R.A. No. 386 (the New Civil Code), so the Old Civil Code governed property relations and succession at decedent’s death. Under the Old Civil Code the legal conjugal partnership is the default regime; upon dissolution by death the surviving spouse is entitled to one-half of the conjugal partnership while the other half devolves to the estate to be inherited by forced heirs, with legitimate children’s legitime comprising two-thirds of the hereditary estate and the surviving spouse being entitled to usufruct equal to the legitime portion of each legitimate child. The Court noted the parties admitted the property’s conjugal nature and no evidence was produced to show exclusive ownership by Laureano or paraphernal character for Servanda.

Partition and Recognition of Parol Partition

The Court applied principles of partition and equitable enforcement of parol partition. It held that every act intended to end indivision among co-heirs is a partition and that equity will recognize and enforce a parol partition when possession in severalty and acts of ownership have been consummated. The Supreme Court found that Roger’s acts of ownership after Laureano’s death—specifically his mortgage and redemption in 1960 and continuous exclusive possession—constituted a partition in fact with respect to Lot No. 2560, thereby terminating co-ownership as to that parcel prior to the alleged sale to Benito in 1972.

Co-ownership and Limits on Alienation

The Court interpreted Art. 493 of the New Civil Code (a re-enactment of the Old Civil Code provision) and authorities such as Carvajal v. Court of Appeals, concluding that a co-owner may alienate only his undivided aliquot share and cannot sell a determinate, specific portion of the common thing to the exclusion of co-owners prior to partition. Accordingly, even assuming Servanda could sell, she could at most dispose of her undivided aliquot share; she could not validly convey the whole lot as a specific, exclusive parcel if partition had not been effected.

Redemption under Sale with Right of Repurchase (Pacto de Retro)

The Court analyzed the nature of a sale with right of repurchase under Art. 1601 and Art. 1616 and the distinction from legal redemption by co-owners under Art. 1620. It reiterated the rule that in a pacto de retro ownership vests in the vendee subject to the vendor’s resolutory right to repurchase and that the right to repurchase is ordinarily personal to the vendor or his successors. The Court emphasized that a third person who redeems on behalf of the vendor acquires only a lien for reimbursement, not ownership. Applying these principles, the Court found no evidence that Servanda transferred her right of repurchase to Dominga; the proof showed only that Dominga paid P950.00 to redeem for Servanda. Therefore, Dominga’s act of repurchase reconstituted the co-ownership rights to the estate or vested only a lien in her favor, but did not vest in Dominga ownership of the entire lot.

Evidentiary Findings on Transfer of Repurchase Right

The Court examined the documentary and testimonial proofs offered by respondents—Deed of Sale with Right to Repurchase, letters and certifications by neighbors, the 1991 Ratification of Ownership, waivers, tax declarations, and witness testimony—and concluded they proved payment for repurchase and possession but did not prove an assignment or transfer of Servanda’s right to repurchase that would make Dominga a successor in ownership. The Court accepted the MCTC’s assessment that the Ratification of Ownership was not supported by an instrument evidencing conveyance by legal modes of acquisition and that it was executed many years after the alleged repurchase.

Prescription and Possessory Character

The Court considered respondents’ claim of acquisitive prescription. It reiterated that ordinary acquisitive prescription requires possession in good faith with just title for ten years, while extraordinary prescription requires thirty years of uninterrupted adverse possession without good faith and just title. The Court stressed that possession must be en concepto de dueño to ripen into ownership and that possession held by license, tolerance, usufructuary relationship, or as agent or pledgee does not suffice. The Supreme Court agreed with the trial courts that respondents’ possession was initially by mere tolerance and only became adverse upon the 1991 Ratification, which still did not produce uninterrupted adverse possession for thirty years from the date of repurchase. Thus, respondents failed to prove acquisition by either ordinary or extraordinary prescription.

Disposition and Modifications by the Supreme Court

The Supreme Court granted the petition and reinstated the MCTC Decision dated March 7, 2007, with specific modifications to the interest awards consistent with Nacar v. Gallery Frames. The Court ordered that the P950.00 representing the payment made by Dominga shall earn interest at twelve percent per annum from the date of judicial demand on August 26, 2005 until June 30, 2013, and interest at six percent per annum computed from

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