G.R. No. 101522 - Mariano vs. Court of Appeals

Case Summary (G.R. No. 101522)

Key Dates

Relevant dates from the record: mortgages executed March 9, 1956 and January 29, 1958; decedent’s death August 15, 1958; foreclosure sale December 27, 1963 (property awarded to mortgagee bank); redemption by Amparo February 7, 1964 (with additional payment December 28, 1964); Deed of Assignment September 10, 1965; Deed of Sale from Amparo to Leonardo Mariano August 15, 1966; alleged discovery and attempts at confrontation in 1982 (barangay certificate issued November 27, 1982); sale by Leonardo to his children December 8, 1982; complaint filed December 21, 1982; RTC decision September 16, 1986; Court of Appeals decision May 13, 1991; Supreme Court decision reviewed here dated May 28, 1993.

Applicable Law and Authority

Primary Civil Code provisions at issue: Article 1088 (redemption by co-heirs of hereditary rights sold before partition) and Article 1620 (redemption by a co-owner when shares are sold to a third person). Other legal concepts invoked: the written-notice requirement for legal redemption, statute of limitations under Article 1144, doctrine on consignation, and cited precedents including Conejero v. Court of Appeals (16 SCRA 775), Castillo v. Samonte (106 Phil. 1023), Garcia v. Calaliman, Francisco v. Bautista, and jurisprudence relied upon by the Court of Appeals (Annie Tan; Adille; De Guzman). Because the decision date is after 1990, the applicable constitutional framework is the 1987 Philippine Constitution (noted as the operative constitution for cases decided after 1990).

Factual Background

The lot, originally owned by Francisco Gosiengfiao, was mortgaged and later foreclosed and sold at public auction; the mortgagee bank was the highest bidder in the December 27, 1963 sale. Amparo Gosiengfiao redeemed the lot from the bank in 1964, paying the redemption sums. A Deed of Assignment of the Right of Redemption was executed September 10, 1965 by Antonia (wife) on her behalf and on behalf of minor children, and on August 15, 1966 Amparo sold the entire property to Leonardo Mariano. Leonardo later sold the property to his children in December 1982. Some heirs (plaintiffs-appellants) alleged they were not notified in writing of the sale and that they did not sell their hereditary rights; they sought recovery of possession and legal redemption with damages.

Procedural History

Plaintiffs filed a complaint for recovery of possession and legal redemption against Leonardo and Avelina Mariano on December 21, 1982. The Regional Trial Court (Branch I, Cagayan) dismissed the complaint by decision dated September 16, 1986, reasoning that Amparo’s redemption made her the sole owner and that other heirs failed to redeem. The Court of Appeals reversed and declared the respondents co-owners. The petition to the Supreme Court challenged the Court of Appeals’ application of Article 1620 instead of Article 1088 and raised issues of timeliness, notice, and extinguishment of co-ownership.

Legal Issue Presented

The central legal issue is whether a co-owner (or co-heir) who redeems the entire foreclosed property with personal funds becomes sole owner thereby terminating co-ownership, and which Civil Code provision governs the right of redemption among heirs in these circumstances—Article 1088 (redemption of hereditary rights sold before partition) or Article 1620 (redemption by a co-owner upon sale of shares to a third person). Subsidiary issues include whether the co-heirs received the written notice required to trigger the statutory period for redemption, whether the heirs timely exercised legal redemption, whether consignation into court was necessary after a rejected tender, and whether the claim was barred by statute of limitations or laches.

Court of Appeals’ Ruling Summarized

The Court of Appeals held that redemption of the whole property by a co-owner within the legal period inures to the benefit of all co-owners and does not create sole ownership nor terminate the preexisting state of co-ownership. The CA distinguished redemption from purchase after consolidation of title by the mortgagee; had a purchase occurred after the consolidation of title and after the redemption period, co-ownership would have ended. The CA relied on established case law stating that a co-owner’s redemption within the prescribed period preserves co-ownership.

Petitioners’ Argument and Distinction Between Articles 1088 and 1620

Petitioners argued the Court of Appeals misapplied Article 1620 instead of Article 1088 because the property formed part of an intestate estate and was never partitioned; therefore, the right of legal redemption among co-heirs was governed by Article 1088, which prescribes a one-month period to subrogate the purchaser by reimbursing the price after written notice. Petitioners relied on the commentary of Tolentino and precedent (Conejero) to assert that written notice triggers the short redemption period, and they contended respondents did not act within that period.

Supreme Court’s Analysis on Notice and Timeliness

The Supreme Court affirmed the Court of Appeals for reasons centered on the written-notice requirement. While acknowledging the Conejero holding that furnishing a copy of a deed can satisfy the written-notice requirement, the Court found the evidence in this case did not establish that any written notice or copy of the Deed of Sale was given to the private respondents. Testimony by respondent Grace explicitly stated she was not given a copy and was not informed in writing; petitioners failed to refute this testimony. The Court reiterated the settled rule from Castillo v. Samonte and related jurisprudence that the written notice required by Article 1088 cannot be replaced by verbal notice or informal means and that written notice is indispensable to commence the statutory period. Because no written

Case Syllabus (G.R. No. 101522)

Procedural Posture

Petition for review to the Supreme Court from the decision dated May 13, 1991 of the Court of Appeals in CA-G.R. CV No. 13122 (Grace Gosiengfiao, et al. v. Leonardo Mariano v. Amparo Gosiengfiao).
Issue before the Supreme Court: the correct application and distinction between Article 1088 and Article 1620 of the Civil Code in relation to legal redemption by co-heirs/co-owners.
The Court of Appeals had reversed the trial court and declared the private respondents (Grace, Emma, Ester, Francisco Jr., Norma, Pinky Rose Gueno) as co-owners of the property.
The Supreme Court reviewed the CA decision and, after analysis, affirmed it. Costs were assessed against petitioners.

Facts — Property, Mortgage, Foreclosure, and Redemption

Decedent: Francisco Gosiengfiao — registered owner of a residential lot at Ugac Sur, Tuguegarao, Cagayan.
Property description: The eastern portion of Lot 1351, Tuguegarao Cadastre, after segregation designated Lot 1351-A, Plan PSD-67391, area 1,346 square meters, covered by Transfer Certificate of Title No. T-2416 recorded in the Register of Deeds of Cagayan.
The lot was mortgaged by the decedent to the Rural Bank of Tuguegarao on several occasions, including March 9, 1956 and January 29, 1958.
Foreclosure sale: Because the loan was unpaid, the mortgagee bank foreclosed and the property was sold at public auction on December 27, 1963; the mortgagee bank was the highest bidder and was awarded the lot.
Redemption by Amparo: On February 7, 1964, third-party defendant Amparo Gosiengfiao-Ibarra redeemed the property by paying P1,347.89; the remaining P423.35 was paid on December 28, 1964 to the mortgagee bank.
Deed of Assignment: On September 10, 1965, Antonia Gosiengfiao (mother) on her behalf and that of minor children Emma, Lina, Norma, together with Carlos and Severino, executed a Deed of Assignment of the Right of Redemption in favor of Amparo G. Ibarra (notarial record: Pedro (Laggui), Doc. No. 257, Page No. 6, Book No. 8, Series of 1965).
Sale to petitioner Mariano: On August 15, 1966, Amparo sold the entire property to defendant Leonardo Mariano; the Deed of Sale dated August 15, 1966 bore signatures of Amparo, Antonia, Carlos and Severino.
Subsequent sale by Mariano: On December 8, 1982, defendant Leonardo Mariano sold the same property to his children Lazaro F. Mariano and Dionicia M. Aquino (Deed of Sale notarized by Hilarion L. Aquino, Doc. No. 143, Page No. 19, Book No. V, Series of 1982).

Parties and Their Claims

Petitioners: Leonardo Mariano, Avelina Tigue, Lazaro Mariano, Mercedes San Pedro, Dionisia M. Aquino, Jose N.T. Aquino (owners/purchasers and appellants before the Supreme Court).
Private respondents/plaintiffs-appellants in lower courts: Grace Gosiengfiao, Emma Gosiengfiao, Ester Gosiengfiao, Francisco Gosiengfiao, Jr., Norma Gosiengfiao, and Pinky Rose Gueno (representing Lina).
Third-party defendant: Amparo Gosiengfiao-Ibarra (redeemer, seller to Mariano).
Plaintiffs’ complaint (filed December 21, 1982): recovery of possession and legal redemption with damages against Leonardo and Avelina Mariano — alleging co-heir/co-owner status and asserting rights to recover respective shares and to redeem shares sold to defendants.
Defendants’ answer: contended the monies used to redeem were Amparo’s personal funds making her sole owner who validly sold to defendants; also asserted that plaintiffs’ right of redemption was barred by the Statute of Limitations (Article 1144) or by laches.

Trial Court Findings (Regional Trial Court, Branch I, Cagayan)

Decision dated September 16, 1986 dismissed the complaint.
Trial court held respondents (private plaintiffs) had no right of ownership or possession.
Rationale: When subject property was foreclosed and sold, heirs' rights were reduced to a mere right of redemption. Amparo G. Ibarra redeemed the lot on her own behalf with her own money and thereby became the sole owner. Respondents failed to redeem from the bank or from Amparo and thus lost their rights.

Court of Appeals Holding and Reasoning

Court of Appeals reversed the trial court and declared respondents as co-owners.
Core legal question: whether a co-owner who redeems the whole property with personal funds becomes sole owner and terminates co-ownership.
Holding: Redemption by a co-owner within the period prescribed by law does not vest sole ownership in the redeemer; it inures to the benefit of all co-owners and does not terminate co-ownership.
Distinction noted: It would have been different if Amparo had purchased the property from the mortgagee a