G.R. No. L-21577 - Ledesma vs. Court of Appeals

Case Summary (G.R. No. L-21577)

Factual Background

The titled property originally belonged pro-indiviso to multiple persons, with the record describing that Felix Labrador, married to Expectacion Palma, held a one-third (1/3) share; Jose Labrador, as a widower, also held a one-third (1/3) share; and the spouses Benigno Labrador and Marcelina Justiniani held the remaining one-third (1/3) share. On August 18, 1951, Benigno Labrador sold his and his wife’s share, interest, and participation in Lot No. 9403 to Policarpio Mamon via an instrument described as Exh. “1”. The sale was a pacto de retro, reserving for the vendors the right to repurchase within two years after the expiration of three years from the date of the deed of sale. The deed was not signed by Benigno’s wife and was not registered with the Office of the Register of Deeds of Iloilo.

Despite these defects, Mamon immediately took possession and cultivated the property until the middle part of 1959. Subsequently, on August 23, 1951, Marcelina J. Labrador executed in Manila a power of attorney authorizing her husband to encumber her share in the same property to secure a loan. The vendors did not exercise the repurchase right within the stipulated period.

Separately, in Civil Case No. 2932, titled “Remedios C. Ledesma, plaintiff, vs. Marcelina J. Labrador, accompanied by her husband, Benigno Labrador, etc.”, the Municipal Court of Iloilo City rendered judgment on February 19, 1955 ordering Marcelina J. Labrador to pay Ledesma specified sums, with subsequent amendments adjusting the money awards. After the decision became executory, a writ of execution issued, and the sheriff levied upon and sold at public auction on April 9, 1956, one-third (1/3) of Lot No. 9403 to Ledesma as the highest bidder.

Because the spouses did not redeem their property within one year from the auction sale, a final certificate of sale was executed in favor of Ledesma. The certificate stated that, by virtue of the law and in consideration of P1,446.00, the sheriff sold, ceded, and transferred definitely and forever all rights, interests, and participations of Marcelina J. Labrador consisting of a one-third (1/3) share in the described property to Ledesma. Both the provisional and final certificates of sale were registered.

After the registration, Ledesma went to the land to take possession but found Mamon cultivating it. Ledesma demanded that Mamon vacate and surrender the land. Mamon did not comply.

Proceedings Leading to the Partition Suit (Civil Case No. 4562)

As a result, Ledesma instituted the present action, Civil Case No. 4562, against Jose Labrador, Magdalena Labrador, and Policarpo Mamon, praying for: (a) a declaration that Ledesma and the defendants were co-owners of the property; (b) a partition of the lot among them (stated as one-third (1/3) each); and (c) an order directing Mamon to deliver possession of the appropriate portion after partition and to pay annual damages in the amount of ninety-one (91) cavans of palay, or its money value at P10.00 per cavan, from the filing of the suit until complete possession would be delivered.

In their answer, Jose Labrador and Magdalena Labrador denied that a big portion of the property was riceland. As a special defense, they alleged that the land had already been subdivided for taxation purposes into three equal parts of 26,750 square meters each, among them and Mamon, pursuant to a subdivision plan approved by the Director of Lands on December 15, 1952. They counterclaimed for P3,000.00 as moral damages and attorney’s fees of P500.00.

Mamon filed a separate answer. He made a general denial. As a special defense, he invoked possession and ownership of a one-third (1/3) portion since 1951, stating that his portion had been segregated from that of the other owners. His counterclaim prayed for moral damages and attorney’s fees totaling P11,000.00.

On June 24, 1959, through the intervention of the Provincial Sheriff of Iloilo, Mamon eventually surrendered possession of the property to Ledesma, and Ledesma thereafter remained in possession.

Trial Court Ruling

After trial, the Court of First Instance of Iloilo rendered judgment on June 21, 1961 in favor of Ledesma. It declared her the absolute owner of one-third (1/3) of Lot No. 9403 described under Transfer Certificate of Title No. T-7953 and ordered Policarpo Mamon to submit to an extra-judicial physical partition of the lot with the co-owners. The trial court provided a thirty-day period for an extra-judicial partition and warned that it would appoint commissioners if the parties failed to agree. It also stated that there were no costs against Jose Labrador and Magdalena Labrador and their husband, Florentino Gonzales.

Issues on Appeal and the Parties’ Positions Before the Court of Appeals

Only Mamon appealed to the Court of Appeals. In his appellate challenge, Ledesma argued that the Court of Appeals exceeded its appellate jurisdiction by: (a) ruling on the validity of the public auction sale in which Ledesma was the highest bidder, despite allegedly not being raised in the trial court; and (b) declaring Mamon owner of a one-sixth (1/6) undivided share in Lot No. 9403, notwithstanding that Mamon had not pleaded a counterclaim regarding that matter and that the pacto de retro sale executed in his favor had never been registered.

Ledesma also contended that the Court of Appeals erred when it modified the trial court’s decision.

Court of Appeals’ Treatment (As Framed by the Supreme Court)

The Supreme Court proceeded from a structural understanding of the case. It emphasized that the action below was for partition. In that context, Mamon’s answer to the complaint invoked ownership of a particular share of the land also claimed by Ledesma. The Supreme Court reasoned that the ownership status of the parties necessarily determined the proper partition.

Supreme Court Reasoning on the Validity of the Auction Sale

The Supreme Court held that, because the partition case necessarily involved the question whether it was Ledesma or Mamon who was a co-owner of the land, the validity of the execution public auction sale was directly and necessarily implicated. The auction sale involved the share that Ledesma claimed by virtue of the writ of execution in Civil Case No. 2932. Thus, any ownership right Ledesma could claim over the specified portion of the property had to spring from the execution sale made in her favor. For that reason, the Supreme Court concluded that the Court of Appeals did not err in ruling upon the validity of the auction sale.

Supreme Court Reasoning on the Declaration of Mamon’s Undivided Share

The Supreme Court further treated the pleading posture. It observed that the answers filed in the auction execution-related case (Civil Case No. 2932) and in the partition case reflected the common contention that Mamon owned a one-third (1/3) undivided share of Lot No. 9403. It noted that even if Mamon’s claim of co-ownership was interposed only as a defense, the nature of the action and the evidence presented supplied a sufficient basis for the trial court and appellate court determinations.

The Supreme

Case Syllabus (G.R. No. L-21577)

Parties and Procedural Posture

Remedios C. Ledesma filed an action for partition under Civil Case No. 4562 against Jose Labrador, Magdalena Labrador, and Policarpo Mamon.
The trial court rendered judgment in favor of Ledesma, declaring her absolute owner of one-third (1/3) of Lot No. 9403 and ordering the parties to submit an extra-judicial physical partition.
Policarpo Mamon appealed to the Court of Appeals.
The Court of Appeals modified the trial court decision by declaring that Ledesma and Mamon were owners pro-indiviso of a one-sixth (1/6) portion each of the property.
Ledesma then appealed to the Supreme Court, challenging the Court of Appeals’ appellate authority and its modifications.

Key Factual Allegations

Lot No. 9403 of the Cadastral Survey of Pototan, Iloilo, had an issued Transfer Certificate of Title No. T-7958 in the names of Felix Labrador (married to Expectacion Palma) with a one-third (1/3) share, Jose Labrador (a widower) with a one-third (1/3) share, and the spouses Benigno Labrador and Marcelina Justiniani with a one-third (1/3) share.
On August 18, 1951, Benigno Labrador sold his share and his wife’s share, interest, and participation in the property to Policarpo Mamon through a deed of sale (Exh. “1”), while reserving a right to repurchase within two years after the expiration of three years from the deed’s date.
The deed of sale was not signed by Benigno’s wife, and it was not registered in the Office of the Register of Deeds of Iloilo.
Mamon took possession immediately and cultivated the property until the middle part of 1959.
On August 23, 1951, Marcelina J. Labrador executed in Manila a power of attorney authorizing her husband to encumber her share to secure a loan.
Benigno Labrador did not exercise the right to repurchase within the stipulated period.
In Civil Case No. 2932, Marcelina J. Labrador, accompanied by her husband, was ordered by the Municipal Court of Iloilo City on February 19, 1955 to pay P870.00 with legal interest from October 26, 1954, P100.00 for attorney’s fees, and the costs of the suit, with subsequent amendments changing the money award and removing P200.00 damages.
After that decision became executory, a writ of execution issued, and on April 9, 1956, the sheriff levied upon and sold at public auction one-third (1/3) of Lot No. 9403 to Ledesma as the highest bidder.
A final certificate of sale was executed after the spouses failed to redeem within one year, and it transferred Marcelina J. Labrador’s one-third (1/3) share unto Ledesma, and the provisional and final certificates were registered.
Ledesma later demanded Mamon to vacate and surrender the land, but Mamon continued cultivating it.
On June 24, 1959, through the intervention of the Provincial Sheriff of Iloilo, Mamon surrendered possession to Ledesma, and Ledesma thereafter possessed the property.

Trial Court Claims and Defenses

Ledesma’s complaint prayed for a declaration that she and the defendants were co-owners of the property, for partition, for Mamon to deliver possession of the corresponding portion after partition, and for payment of annual damages measured at ninety-one (91) cavans of palay or its money value at P10.00 per cavan from the filing of the suit unti