Rivera vs. Villanueva

The legitime of an illegitimate child who is neither an acknowledged natural child nor a natural child by legal fiction is four-fifths (4/5) of the legitime of an acknowledged natural child under Article 895(2) of the Civil Code. An action for partition by a co-heir does not prescribe absent an express or implied repudiation of the co-ownership, and an extrajudicial settlement that omits an heir without notice or participation is void as to that heir.

Donato Pacheco Sr. died intestate on August 21, 1956, survived by his legitimate children Emerenciana Pacheco-Tiglao and Milagros Pacheco-Rivera, and by four illegitimate children — Flora, Donato Jr., Ruperto, and Virgilio, all surnamed Pacheco — whom he had with Emiliana dela Cruz. After his death, the legitimate children took over his properties and business, executed an extrajudicial partition on September 7, 1956 declaring themselves the sole heirs, and eventually caused titles to be issued in their names to the exclusion of their half-siblings. Decades later, the illegitimate children intervened in the settlement of Emerenciana’s estate and secured judicial recognition of their filiation and their right to inherit from Donato Sr. The present controversy arose when they demanded partition of the intestate estate and the petitioners, the children of Milagros, resisted on the grounds of prescription, prior adjudication, and the alleged exclusive ownership of certain properties.

• Family Relations: Donato Pacheco Sr. (Donato Sr.) was legally married to Anatacia Santos and had two legitimate children — Emerenciana Pacheco-Tiglao and Milagros Pacheco-Rivera. During his marriage, Donato Sr. had an illicit relationship with Emiliana dela Cruz, with whom he begot four children: Flora Pacheco (born May 9, 1928), Donato Pacheco Jr. (born April 22, 1930), Ruperto Pacheco (born March 27, 1934), and Virgilio Pacheco (born May 28, 1937). Petitioners Daniel and Elpidio Rivera are the children of Milagros and thus the nephews of respondents.

• Death and Estate of Donato Sr.: Donato Sr. died intestate on August 21, 1956. The properties he left included a parcel of land in San Miguel, Bulacan (788 sq m, TCT No. T-14024); an undivided interest in a parcel of land at 2441 San Anton St., Sampaloc, Manila; apartments and rooms on that land; SMC shares; and a house and lot at 608-B M. Earnshaw, Sampaloc. The exact extent of his ownership in the Sampaloc property and the improvements was later litigated in the settlement proceedings of Emerenciana’s estate.

• Management and Extrajudicial Partition: After Donato Sr.’s death, Emerenciana took over the management of his business and properties. On September 7, 1956, Emerenciana and Milagros executed an Affidavit of Extrajudicial Partition, declaring themselves the only surviving heirs and adjudicating to themselves the Bulacan property and SMC shares. They subsequently caused titles to be issued in their names. When Emerenciana died on February 13, 1964, Milagros assumed administration, and upon Milagros’s death on July 30, 1988, petitioner Elpidio Rivera took over.

• Recognition of Illegitimate Heirs: In the special proceedings for the settlement of Emerenciana’s estate (CFI Manila, Branch IV), respondents intervened and sought exclusion of certain properties as belonging to Donato Sr.’s estate. Judge Serafin R. Cuevas, in an Order dated October 14, 1977, declared Flora, Donato Jr., Ruperto, and Virgilio as the illegitimate children of Donato Sr. entitled to intervene and inherit. Judge Herminio C. Mariano, in an Order dated November 22, 1984, identified the properties owned by Donato Sr. and ordered them excluded from Emerenciana’s estate: (1) the San Miguel, Bulacan lot (TCT No. T-14029); (2) a 46.9% undivided share in the San Anton, Sampaloc lot (without improvements, because construction expenses came from Milagros’s and Emerenciana’s personal funds); and (3) the SMC shares. The Earnshaw property was found to have been acquired after Donato Sr.’s death and was covered by a title in the names of Emerenciana and Milagros.

• Complaint for Partition: On January 9, 1991, respondents filed a complaint for partition of the properties of Donato Sr., later amended twice. They alleged that they had never received any share of the fruits or income, that the extrajudicial partition and the resulting titles (TCT Nos. 1988-31 and 1988-32) were fraudulently obtained to exclude them, and that their demands for partition had been ignored. They prayed for partition, nullification of the titles, and accounting.

• Answer and Defenses: Petitioners countered that the Bulacan property and SMC shares had been validly partitioned under the 1956 Affidavit, that the Sampaloc property was only 46.9% owned by Donato Sr., and that the Earnshaw property was exclusively owned by Emerenciana and Milagros. They raised the affirmative defenses of prescription, lack of cause of action because the complaint was filed 35 years after Donato Sr.’s death, and absence of a formal demand for partition upon Emerenciana or Milagros.

• Estoppel and Prescription: Petitioners argued that respondents are barred by estoppel from seeking partition and that the action had prescribed. They contended that while partition is imprescriptible, a demandant must show entitlement and that the right has not been lost by any means provided by law. Since the extrajudicial partition had been executed and registered, and respondents were not yet recognized as heirs at that time, the properties could no longer be partitioned.

• Ownership of Specific Properties: Petitioners maintained that the Sampaloc property was not wholly owned by Donato Sr. but only to the extent of 46.9%, and that the improvements belonged solely to Emerenciana and Milagros. The SMC shares and Bulacan property, having been adjudicated to Emerenciana and Milagros by the extrajudicial partition, were owned in common by those two, not by the estate.

• Legitime: The Court of Appeals erred in ruling that the legitime of each illegitimate child is one-half of that of a legitimate child. Since Donato Sr. died in 1956, the Civil Code governs; under Article 983 in relation to Article 895, the share of an illegitimate child who is not an acknowledged natural child is four-fifths of the legitime of an acknowledged natural child. Applying the Family Code would impair the vested rights of legitimate heirs.

• Litigation Expenses: The award of ₱30,000.00 as litigation expenses lacked factual and legal basis because petitioners acted in good faith and merely defended their rights.

• Res Judicata and Forum-Shopping: Petitioners asserted that the subject properties had already been adjudicated in the final and executory Order dated November 22, 1984 in the settlement of Emerenciana’s estate, rendering the present action barred by res judicata and constituting forum-shopping.

• Prescription and Validity of Extrajudicial Partition: Respondents countered that their right to demand partition had not prescribed. The two-year period under Section 4, Rule 74 of the Rules of Court does not apply to those who had no part in or no notice of the settlement. The extrajudicial partition executed without their knowledge and consent was null and void as to them, leaving their right to partition intact.

• Reckoning Period for Accounting: The Court of Appeals correctly ordered accounting from the death of Donato Sr. on August 21, 1956, as succession rights are transmitted at the moment of death under Article 774 of the Civil Code.

• Legitime: The CA properly declared that each illegitimate child is entitled to one-half of the legitime of a legitimate child.

• Litigation Expenses: Respondents are entitled to litigation expenses because petitioners, despite knowing of the existence of their half-blood relatives, unjustifiably refused to deliver their rightful shares, compelling respondents to litigate.

• Res Judicata and Forum-Shopping: Whether the action for partition was barred by res judicata or constituted forum-shopping in light of the final Order dated November 22, 1984 in the settlement of Emerenciana’s estate.

• Prescription of Action: Whether respondents’ action for partition had prescribed.

• Validity of Extrajudicial Partition: Whether the Affidavit of Extrajudicial Partition executed by Emerenciana and Milagros precluded respondents from demanding partition.

• Reckoning Period for Accounting: Whether the accounting of income should be reckoned from the death of Donato Sr. or from the filing of the complaint.

• Legitime of Illegitimate Children: Whether the legitime of respondents, as illegitimate children, should be one-half of the legitime of a legitimate child or four-fifths of the legitime of an acknowledged natural child.

• Litigation Expenses: Whether the award of ₱30,000.00 as litigation expenses was proper.

• Res Judicata and Forum-Shopping: Res judicata did not apply. The prior final Order of the RTC pertained to the settlement of the estate of Emerenciana, while the present case concerned the partition of the intestate estate of Donato Sr., a different subject matter and cause of action. No identity of parties or issues existed, and thus forum-shopping was not committed.

• Prescription of Action: The action for partition had not prescribed. Article 494 of the Civil Code provides that no prescription runs in favor of a co-owner or co-heir against other co-owners or co-heirs as long as the co-ownership is expressly or impliedly recognized. Prescription only lies when the co-ownership has been repudiated, which was not established here. The 35-year interval did not bar the claim.

• Validity of Extrajudicial Partition: The extrajudicial partition was not effective against respondents because they had no knowledge of and did not participate in it. Under established rule, no extrajudicial settlement binds a person who had no notice or part therein. Emerenciana and Milagros knew of the existence of their half-siblings — Flora, Ruperto, and Donato Jr. had lived in the family home — yet deliberately excluded them, rendering the partition fraudulent and void as to the omitted heirs.

• Reckoning Period for Accounting: The CA correctly ordered accounting from August 21, 1956, the date of Donato Sr.’s death. Succession rights are transmitted from the moment of death pursuant to Article 774 and Article 777 of the Civil Code. Respondents, as intestate heirs, became co-owners of the estate at that moment and are entitled to the fruits proportionate to their shares. The accounting, however, is limited to the properties belonging to the estate: the Bulacan property, the 46.9% share in the Sampaloc lot (without improvements, because the buildings were funded by Emerenciana and Milagros’s personal money), and the SMC shares.

• Legitime of Illegitimate Children: The lower courts erred in fixing the legitime at one-half of that of a legitimate child. Respondents, though acknowledged, are not natural children because their parents were disqualified from marrying each other (Donato Sr. was married to another). They are, therefore, illegitimate children who are neither acknowledged natural children nor natural children by legal fiction. The second paragraph of Article 895 of the Civil Code governs: their legitime is four-fifths of the legitime of an acknowledged natural child. An acknowledged natural child’s legitime is one-half of the legitime of a legitimate child under the first paragraph of Article 895. Accordingly, respondents’ legitime is four-fifths of that amount. The Family Code’s provisions do not apply retroactively to impair the vested rights of legitimate heirs fixed under the Civil Code at the time of Donato Sr.’s death.

• Litigation Expenses: The award of ₱30,000.00 was proper under Article 2208(2) and (5) of the Civil Code. Petitioners unjustifiably refused to satisfy respondents’ plainly valid demand, compelling them to litigate to protect their interests. Petitioners’ knowledge of respondents’ status as heirs and their continued refusal demonstrated bad faith sufficient to support the award.

• Imprescriptibility of Action for Partition Among Co-Heirs — Under Article 494 of the Civil Code, no prescription shall run in favor of a co-owner or co-heir against other co-owners or co-heirs as long as the co-ownership is expressly or impliedly recognized. Prescription only commences upon an unequivocal repudiation of the co-ownership, communicated to the other co-owners. Here, no such repudiation occurred; petitioners’ possession of the inherited properties was merely as trustees for the co-owners.

• Voidness of Extrajudicial Settlement as to Excluded Heirs — An extrajudicial settlement of estate is binding only upon those who participated in it or had notice of it. A settlement that excludes known heirs who had no knowledge or participation is fraudulent and void as to them. The excluded heirs may still demand partition, and the two-year period under Rule 74 does not run against them.

• Legitime of Illegitimate Children Who Are Not Natural Children — Under Article 895(2) of the Civil Code, the legitime of an illegitimate child who is neither an acknowledged natural child nor a natural child by legal fiction is four-fifths of the legitime of an acknowledged natural child. An acknowledged natural child’s legitime, in turn, is one-half of the legitime of each legitimate child or descendant under Article 895(1). This rule applies to an intestate succession opened during the effectivity of the Civil Code, and the retroactive application of the Family Code cannot prejudice vested rights of legitimate heirs.

• “No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.” (Art. 494, Civil Code) — Cited to underscore that the action for partition had not prescribed.

• “[N]o extra-judicial settlement shall be binding upon any person who has not participated therein or had no notice thereof.” — This encapsulates the rule that the 1956 Affidavit of Extrajudicial Partition was ineffective against respondents.

• “The legitime of an illegitimate child who is neither an acknowledged natural, nor a natural child by legal fiction, shall be equal in every case to four-fifths of the legitime of an acknowledged natural child.” (Art. 895, par. 2, Civil Code) — The controlling provision on the legitime that corrected the error of the lower courts.

• “[P]etitioners have already acquired vested rights as to their share in the legitime, which consists of one-half of the hereditary estate as provided in Article 888 of the Civil Code.” — Reinforcing that the Family Code does not retroact to impair rights crystallized upon Donato Sr.’s death.

• Mariategui v. Court of Appeals, 282 Phil. 348 (1992) — Followed for the rule that prescription does not run against a co-heir’s right to demand partition absent repudiation of the co-ownership.

• Cruz v. Cruz, 826 Phil. 758 (2018) — Cited repeatedly for the principle that an extrajudicial settlement without notice to all heirs is not binding upon those who did not participate.

• Neri v. Heirs of Hadji Yusop Uy, 697 Phil. 217 (2012) and Segura v. Segura, 247-A Phil. 440 (1988) — Referenced in the Cruz decision as supporting the voidness of extrajudicial settlements that exclude heirs with no notice.

• Article 494, Civil Code — Applied to hold that no prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs as long as the co-ownership is recognized, barring the defense of prescription.

• Articles 774, 777, Civil Code — Grounded the ruling that the accounting period is reckoned from the decedent’s death because succession transmits the inheritance at that moment.

• Article 895, par. 2, Civil Code — Applied to fix the legitime of respondents as 4/5 of the legitime of an acknowledged natural child, rather than 1/2 of a legitimate child’s legitime.

• Article 888, Civil Code — Referenced to establish that legitimate children’s legitime is one-half of the hereditary estate, which formed the base for computing the share of illegitimate children.

• Article 269, Civil Code — Defined natural children as those born outside wedlock to parents who were not disqualified from marrying each other; used to exclude respondents from that classification.

• Article 255, Family Code — Invoked to prevent retroactive application of the Family Code’s legitime provisions that would impair vested rights under the Civil Code.

• Article 2208(2) and (5), Civil Code — Provided the statutory basis for the award of litigation expenses due to petitioners’ unjustified refusal to satisfy a valid demand.

Gesmundo, C.J. (Chairperson), Caguioa, Zalameda, and Gaerlan, JJ., concurred.