Doliendo vs. Depiño

A verbal agreement among co-heirs that a third party or one of them will purchase co-owned property from a stranger in order to keep it within the family, with possession delivered under an antichretic arrangement until the purchase price is reimbursed, is valid and binding on those who consent, even if not embodied in a public instrument or signed by all the obligors; where the existence of the contract is established by a preponderance of evidence, the party bound may be compelled to execute the requisite public document, pursuant to Article 1280 of the Civil Code.

The spouses Martino Depiño and Fructuosa Disolong died leaving thirty-six parcels of land to their six children or their descendants. One of the children, Santos Depiño, incurred a debt to Ildefonso Doronila. Doronila attached the thirty-six parcels and bought Santos Depiño’s interest at a sheriff’s sale on February 8, 1905, subject to a one-year legal redemption. Less than three weeks later, Doronila sold all thirty-six parcels to Ruperto Montinola under pacto de retro, with a conventional redemption reserved to Doronila and the heirs of Depiño and Disolong until February 24, 1906. Neither the legal nor the conventional redemption was exercised. By late February 1906, Montinola had consolidated ownership of at least Santos Depiño’s undivided one-sixth share and was in possession of the whole. The present controversy concerns the efforts of some co-heirs to recover the lands from Montinola through a third-party purchase and a private agreement among themselves.

• The Inheritance and the Sheriff’s Sale: Upon the death of Martino Depiño and Fructuosa Disolong, thirty-six parcels of land passed to their six children as pro indiviso co-heirs. One heir, Santos Depiño, was indebted to Ildefonso Doronila. Doronila attached the entirety of the thirty-six parcels and, on February 8, 1905, purchased Santos Depiño’s interest at a public auction, with the debtor’s right to redeem within one year. On February 28, 1905, Doronila sold all thirty-six parcels to Ruperto Montinola under pacto de retro, reserving redemption to himself and the Depiño-Disolong heirs until February 24, 1906.

• Consolidation of Title in Montinola: The legal redemption period expired on February 8, 1906, and the conventional redemption period on February 24, 1906. No redemption was exercised. Montinola thereby acquired irrevocable right, title, and interest in at least the one-sixth undivided share of Santos Depiño under Section 466 of the Code of Civil Procedure, and remained in undisturbed possession of the entire thirty-six parcels.

• The June 15, 1906 Meeting and Agreement: Plaintiff Paulino Doliendo, whose wife was one of the co-heirs, testified that upon learning Montinola was selling the lands, he consulted with several co-heirs. On June 15, 1906, the following met at Doliendo’s house: defendants Santos Depiño, Dionisio Depiño, Bernabe Belandres, and co-heirs Perpetua Buenavista, Dionisia, and others. They agreed that Doliendo should raise money — approximately P800 — to purchase the lands from Montinola before they passed to outsiders. After purchase, the heirs would remain on the land, work it as tenants, reimburse the purchasers from the produce, and upon full reimbursement divide the property among all the co-heirs.

• Purchase from Montinola and Exhibit No. 5: On June 28, 1906, Montinola executed a notarial deed selling all thirty-six parcels to Doliendo, Bruno Paredes, and Fermin Desa (also referred to as Fermin Liza) for P800. The deed represented that Montinola had acquired irrevocable title following the expiration of the redemption periods. Two days later, the three plaintiffs executed a private document (Exhibit No. 5) reciting that, for humanitarian reasons, the heirs — namely Dionisia Depiño, Bernabe Belandres, Dionisio Depiño, Perpetua Buenavista, and Santos Depiño — would be allowed to farm the lands as tenants; that upon reimbursement of the P800, the purchasers would acknowledge all the heirs (including Doliendo as an heir, but excluding Fermin Desa who was not an heir) as owners; and that the heirs could not demand partition until the P800 had been repaid, the produce of the lands not being applied to the debt.

• Notary’s Testimony: Notary Juan Cartagena testified that on June 30, 1906, the plaintiffs and the defendants (except Santos Depiño) came to his office to have the agreement drawn up and notarized. The defendants insisted that he prepare and certify the document; he told them they need not sign because it was in their favor. The notarial certification was later scratched out, but the document was kept by the parties.

• Defendants’ Denial: Defendants admitted going to the notary’s office but denied assenting to the agreement, arguing there was no reason to purchase what already belonged to them. Dionisio Depiño stated that after his father’s death, his mother and brother Santos Depiño were in possession.

• Trial Court’s Findings: The CFI credited the plaintiffs’ version, reasoning that without such an agreement the plaintiffs would not have risked raising money to purchase lands subject to litigation. The court found the agreement produced four effects: (1) acquisition of the right of possession as held by Montinola; (2) possession under antichresis of the thirty-six parcels; (3) the right of the other co-heirs to work the land as tenants; and (4) division of the property upon expiration of the antichresis. The judgment awarded plaintiffs possession against “these defendants who are present,” explicitly stating it did not bind absent co-heirs or decide Santos Depiño’s separate rights.

• Validity of Attachment and Subsequent Sales: Appellants contended that the attachment, judicial sale, adjudication to Doronila, sale to Montinola, and sale to the plaintiffs were null and void because the lands were owned pro indiviso by all six heirs, and the proceedings could affect only Santos Depiño’s share, not the entire property.

• Existence of the Agreement: Appellants denied that any agreement was entered into among the co-heirs for the purchase of the lands from Montinola, maintaining that they had no reason to buy what was already theirs, and insisting that they never assented to the terms reflected in Exhibit No. 5.

• Admissibility of Exhibit No. 5: Appellants objected to the admission of the plaintiffs’ document on the ground that it was not signed by the defendants, argued that it could not prove a contract binding upon them.

N/A — The decision does not separately set forth the appellees’ arguments on appeal; it states only that the lower court found in their favor after evaluating the evidence.

• Validity of Prior Proceedings: Whether the lower court erred in declaring valid the attachment and subsequent sales involving the thirty-six parcels of land.
• Existence of the Agreement: Whether the lower court erred in finding that the defendant co-heirs entered into an agreement with the plaintiffs for the purchase and antichretic possession of the lands.
• Admissibility and Proof of the Agreement: Whether the lower court erred in admitting Exhibit No. 5 as evidence of the agreement, given that it was not signed by the defendants.

• Validity of Prior Proceedings: The first assignment of error misapprehended the lower court’s ruling. The trial judge did not declare the attachment and sales entirely valid; he explicitly stated that the proceedings could prejudice only Santos Depiño’s one-sixth share and that the sale became final as to that share because Santos Depiño did not redeem. The correctness of the trial judge’s view — that the acts could not affect the undivided interests of the other co-heirs who were not parties — was beyond doubt. No error was committed.

• Existence of the Agreement: The existence of the agreement was established by a preponderance of evidence. The trial court credited Doliendo’s testimony that the co-heirs met on June 15, 1906, and instructed him to raise money to buy the lands from Montinola. The notary’s testimony confirmed that the defendants (except Santos Depiño) came to his office to have the agreement drawn up and insisted on its certification. The terms of Exhibit No. 5, although unsigned by defendants, were consistent with the oral agreement and the surrounding circumstances. The trial court’s inference — that without such an agreement the plaintiffs would not have risked litigation and borrowed money to purchase lands of uncertain title — was reasonable and entitled to deference. The denials of the defendants were insufficient to overcome the affirmative evidence.

• Admissibility and Proof of the Agreement: The admission of Exhibit No. 5 was proper. The trial court’s finding of the agreement did not rest solely on the document but on the totality of the evidence. Even if the document was not signed by the defendants, it could still be considered as part of the circumstances proving the contract. Moreover, Article 1280 of the Civil Code, which provides that contracts creating or transmitting real rights must appear in a public instrument, does not require such form for validity; the provision is intended to ensure efficacy, not to void agreements. Where the existence of the contract is otherwise proved, the party bound may be compelled to execute the requisite public instrument. Neither the absence of signatures nor the lack of a public document barred enforcement of the agreement.

• Enforceability of Unwritten Agreements Involving Real Property — A contract involving the creation or transmission of real rights is not void for failure to appear in a public instrument. Article 1280 of the Civil Code (now Article 1358 of the Civil Code of the Philippines) requires a public instrument solely to ensure efficacy, not to validate the contract. Once the existence of the contract is established by any competent evidence, the obligor may be compelled to execute the formal document. The parties’ reciprocal obligations remain binding and enforceable.

• Proof of Consent in Unwritten Agreements — A party’s consent to a contract may be proved by any relevant evidence, including testimonial and circumstantial proof, even where the written document memorializing the contract is unsigned by that party. The trial court’s assessment of credibility and preponderance of evidence is entitled to great weight on appeal.

• Effect of Sheriff’s Sale on Co-owned Property — A judicial sale of a co-owner’s undivided share affects only that share and does not prejudice the rights of the other co-owners who were not parties to the execution proceedings. After the redemption period lapses, the purchaser acquires irrevocable title to the share sold and may be placed in possession of the whole property, subject to the rights of the other co-owners.

• Antichresis Arrangement Among Co-heirs — Co-heirs may validly agree that one who advances funds to recover co-owned property from a stranger shall retain possession under antichresis until reimbursed, with the other co-heirs working the land as tenants. Upon full reimbursement, the property is to be divided among all co-heirs. The agreement binds those who consented, even if not all co-heirs participated.

• “The correctness of the opinion of the trial judge with regard to the efficacy of all such acts wherein none of the other co-heirs of Santos Depiño had taken part, is a point that is beyond all doubt.” — Affirming that a sheriff’s sale of one co-owner’s share does not bind non-party co-heirs.

• “[T]he rule contained in article 1280 of the Civil Code which provides that acts and contracts, the objects of which are the creation, transmission, modification, or extinction of property rights in real property, must appear in a public instrument; this provision does not require such form in order to validate the act or contract but to insure its efficacy, so that after the existence of the act or contract has been admitted under the said article of the Civil Code, the party bound may be compelled to execute the document, as has already been held by this court.” — The controlling statement on the effect of non-compliance with the public instrument requirement.

• “Neither was error committed by the court below in admitting the existence or truth of the agreement, although it was not signed by the defendants.” — Upholding the sufficiency of evidence outside the four corners of an unsigned document.

• None are identified by name in the decision. The opinion refers to a prior holding of the Court on Article 1280 of the Civil Code but does not specify the case.

• Article 1280, Civil Code of 1889 — Requires acts and contracts creating, transmitting, modifying, or extinguishing real rights over immovable property to appear in a public instrument. The Court applied the provision to hold that the absence of a public instrument does not void the agreement but entitles the party to compel execution of the required form.
• Section 466, Code of Civil Procedure (Act No. 190) — Governs the rights acquired by a purchaser at an execution sale after the redemption period expires. The Court relied on it to explain Montinola’s consolidated ownership and right to possession.

Torres, Mapa, Johnson, and Willard, JJ., concurred.