Salvador vs. Court of Appeals

A co-owner’s possession is deemed held for the benefit of all and is not adverse unless there are clear and convincing acts of repudiation amounting to ouster, made known to the other co-owners; without such repudiation, an action for partition is imprescriptible and cannot be barred by laches. Property acquired by onerous title during marriage is presumed conjugal under Article 160 of the Civil Code; property acquired after the dissolution of the marriage is exclusive.

Alipio Yabo owned two parcels of land — Lot No. 6080 and Lot No. 6180 — in Cagayan de Oro City. Upon his death before or during the Second World War, title devolved on his nine children as co-heirs. Maria Yabo, one of the children, married Pastor Makibalo. Over several decades, Pastor purchased the shares of seven siblings, took possession, and later transferred his interests to the Salvador spouses. After Maria’s death in 1962, disputes arose regarding the extent of Pastor’s ownership and the right of Maria’s collateral relatives to share in her estate.

The Properties and Heirs: Alipio Yabo was the original owner of Lot No. 6080 (1,267 sq m) and Lot No. 6180 (3,816 sq m) in Barrio Bulua, Cagayan de Oro City. Upon his death before or during the Second World War, the lots passed to his nine children — Victoriano, Procopio, Lope, Jose, Pelagia, Baseliza, Francisca, Maria, and Gaudencia — who became co-owners.

Acquisitions by Pastor Makibalo: Maria Yabo married Pastor Makibalo. During their marriage, Pastor purchased the shares of Baseliza (1942), Jose and Victoriano (via Pedro Ebarat in 1949–1952), Lope (via Dominador Canomon in 1951–1952), Procopio (1957), and Francisca (1958). He also acquired Pelagia’s share in 1967, five years after Maria’s death on 17 March 1962. The only unsold share was Gaudencia’s. Pastor took possession of the purchased portions, harvested the fruits, and in 1966 resold to Alberto Yabo a portion of Lot 6180 corresponding to Procopio’s share. In 1968, Pastor mortgaged the properties to spouses Eulogio and Remedios Salvador, and on 26 September 1978 executed a “Confirmation and Quitclaim” waiving all his rights in their favor.

The Two Civil Cases: Pastor filed Civil Case No. 5000 for quieting of title on 28 April 1976, alleging ownership of 8/9 of the lots. Five months later, the grandchildren and great-grandchildren of Alipio Yabo filed Civil Case No. 5174 for partition and quieting of title, claiming that the lots remained common property of Alipio’s heirs and that the Salvador spouses were strangers who had been harvesting coconuts, which cast a cloud on their title.

The Trial Court’s Findings: The trial court upheld the validity of the ancient documents evidencing the siblings’ sales. It found that Alberto Yabo purchased Jose’s share in bad faith with knowledge of the prior sale to Pastor. Pastor’s continuous, open, peaceful, and exclusive possession of the eight shares was declared adverse, and the trial court ruled that the collateral heirs of Maria had lost their rights through laches. The court declared the Salvador spouses owners of 8/9 of Lot 6080 and 7/9 of Lot 6180, ordered partition, and nullified a falsified notarial document.

The Court of Appeals’ Findings: The Court of Appeals affirmed that Maria never sold her share and that the document was falsified. It held that prescription and laches could not bar the co-heirs’ rights to Maria’s 1/9 hereditary share and her conjugal share in the purchased portions, because Pastor’s possession was that of a co-owner and not adverse. The CA further found that Procopio Yabo had not sold his share in Lot 6080 — the acknowledgment of sale mentioned only Lot 6180. The partition was modified accordingly, with specific fractions allocated to the heirs of Gaudencia, Alberto, Procopio, Maria’s estate (half to Pastor and half to collateral relatives), and the conjugal acquisitions.

• Exclusion of Pelagia’s Share: Petitioners argued that Pelagia’s 1/9 share, acquired in 1967 after Maria’s death, was Pastor’s exclusive property and should not have been included in the partition of conjugal mass.
• Prescription and Laches: Petitioners maintained that prescription and laches barred the claims of the private respondents to Maria’s 1/9 hereditary share and her half of the conjugal assets, because Pastor had been in open, continuous, and adverse possession since 1962.
• Procopio’s Share in Lot 6080: Petitioners contended that Procopio sold his consolidated share in both lots to Pastor, and that the repurchase by Alberto for the same price and the return of the receipt proved the sale covered Lot 6080 as well.
• Joinder of Jose Yabo: Petitioners argued that Jose Yabo should not participate as an heir of Maria because he had confirmed the sale of his own share, thereby disclaiming further interest, and had refused to participate in both civil cases.

• Conjugal vs. Exclusive Property: Whether the Court of Appeals erred in treating Pelagia’s share, purchased after Maria’s death, as conjugal property subject to partition.
• Prescription and Laches: Whether prescription and laches barred the private respondents from claiming their shares in Maria’s hereditary estate and her conjugal share.
• Sale of Procopio’s Share: Whether Procopio Yabo sold his share in Lot No. 6080 to Pastor Makibalo, and whether the resale to Alberto Yabo conveyed that entire share.
• Indispensable Party: Whether Jose Yabo may participate in the partition of Maria’s estate despite not being an original party and allegedly having rejected his interest.

• Conjugal vs. Exclusive Property: Under Article 160 of the Civil Code, all property acquired during the marriage is presumed conjugal. The shares of Jose, Victoriano, Lope, Baseliza, Procopio, and Francisca, bought during the marriage, were therefore conjugal. Pelagia’s share, acquired in 1967 after Maria’s death, was Pastor’s exclusive property. The partition was modified to allot Pelagia’s share entirely to the petitioners as Pastor’s successors-in-interest.

• Prescription and Laches: A co-owner’s possession is not adverse to other co-owners; it is held for the benefit of all. To be deemed adverse, the possession must be accompanied by (1) unequivocal acts of repudiation amounting to ouster, (2) made known to the co-owners, and (3) proved by clear and convincing evidence. Pastor did not adjudicate the estate to himself through an affidavit of self-adjudication, obtain a certificate of title in his name, or cancel the tax declaration. The only act of repudiation was the filing of the quiet title suit on 28 April 1976. That prescription period was tolled when the co-heirs filed their partition action on 8 October 1976 — a mere five months and ten days later. Hence, acquisitive prescription did not vest exclusive ownership in Pastor, and the action for partition remained imprescriptible, nor was it barred by laches.

• Sale of Procopio’s Share: The trial court’s finding that Procopio sold his share in both lots was supported by Pastor’s testimony and the fact that the repurchase was for the same amount and involved the same receipt. The CA erred in concluding that no sale of the Lot 6080 share occurred. However, because Procopio’s share was acquired during the marriage, it was conjugal. Upon Maria’s death, half formed part of her estate. Pastor’s resale to Alberto could therefore convey only his 1/2 conjugal share and his 1/4 hereditary share as Maria’s heir — totaling 3/4 of Procopio’s share. The remaining 1/4 belonged to Maria’s collateral heirs.

• Indispensable Party: Jose Yabo is an indispensable party to the partition of Maria’s estate. His non-joinder does not warrant dismissal. Under Sections 1 and 5 of Rule 10, in relation to Section 11 of Rule 3 of the Rules of Court, pleadings may be amended to add an indispensable party at any stage, even after judgment, to avoid multiplicity of suits and to determine the actual merits expeditiously. Jose had not objected to the determination and partition of the estate. Civil Case No. 5174 was therefore declared amended to implead Jose Yabo as a party plaintiff, and he may fully participate.

• Presumption of Conjugal Property — Article 160 of the Civil Code establishes that all property acquired by onerous title during the marriage is presumed conjugal. The shares purchased while Pastor and Maria were married were classified as conjugal assets; the share acquired after Maria’s death was Pastor’s exclusive property.

• Co-owner’s Possession and Adverse Claim — The possession of a co-owner is equivalent to that of a trustee and is not adverse to other co-owners. To constitute adverse possession, three elements must concur: (1) unequivocal acts of repudiation amounting to ouster; (2) such acts made known to the other co-owners; and (3) clear and convincing evidence. Mere silent possession, receipt of fruits, erection of structures, or payment of taxes is insufficient. Specific acts recognized as repudiation include the filing of a quiet title suit, issuance of a certificate of title in the possessor’s name, execution of a deed of partition and cancellation of the old title, and cancellation of title with issuance of a new one.

• Imprescriptibility of the Action for Partition — An action to demand partition among co-owners is imprescriptible and cannot be barred by laches, unless one co-owner has possessed the property as exclusive owner for a period sufficient to acquire it by prescription. Because Pastor’s possession never ripened into exclusive ownership, the partition action was not barred.

• Amendment to Add an Indispensable Party — Under Rule 10, Sections 1 and 5, and Rule 3, Section 11, a court may allow amendment of the pleadings to add an indispensable party at any stage, even after judgment, when the party’s interest has been ventilated and the amendment avoids multiplicity of suits and serves the expeditious determination of the merits.

• “The possession of a co-owner is like that of a trustee and shall not be regarded as adverse to the other co-owners but in fact as beneficial to all of them. Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned. A mere silent possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection of buildings and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners.”

• “[I]n order that a co-owner’s possession may be deemed adverse to the cestui que trust or the other co-owners, the following elements must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or the other co-owners; (2) that such positive acts of repudiation have been made known to the cestui que trust or the other co-owners; and (3) that the evidence thereon must be clear and convincing.”

• From Pangan vs. Court of Appeals, specific acts of repudiation were catalogued: filing an action in court to quiet title; issuance of a certificate of title; cancellation of the title in the name of the beneficiaries and issuance of a new one; and execution of a deed of partition coupled with cancellation of the old title.

• “It has been said that Article 494 of the Civil Code which provides that each co-owner may demand at any time the partition of the common property implies that an action to demand partition is imprescriptible or cannot be barred by laches. The imprescriptibility of the action cannot, however, be invoked when one of the co-owners has possessed the property as exclusive owner and for a period sufficient to acquire it by prescription.”

• Pangan vs. Court of Appeals, 166 SCRA 375 (1988) — Defined specific acts that constitute repudiation of a trust by a co-owner; applied to hold that the filing of the quiet title suit was repudiation, but prescription was tolled.
• Bicarme vs. Court of Appeals, 186 SCRA 294 (1990) — Affirmed that a co-owner’s possession is not adverse without clear evidence of ouster, and that imprescriptibility of partition cannot be invoked where exclusive ownership has been acquired by prescription.
• Delima vs. Court of Appeals, 201 SCRA 641 (1991) — Established the three requisites for adverse possession by a co-owner. Followed.
• Del Banco vs. Intermediate Appellate Court, 156 SCRA 55 (1987) — Held that an action for partition is imprescriptible and cannot be barred by laches. Cited with approval.
• Cortes v. Oliva, 33 Phil. 480 — Laid down the rule that possession by a joint owner is presumed for the benefit of all; stronger evidence is required to show adverse possession. Extrapolated to laches.
• Cuyugan vs. Dizon, 79 Phil. 80 (1947) — Allowed amendment of a complaint to cure a defect in party plaintiffs even after final decision to avoid multiplicity of suits. Applied to implead Jose Yabo.

• Article 160, Civil Code — Presumption of conjugal property. Applied to classify the shares purchased during the marriage as conjugal, and Pelagia’s share as exclusive.
• Article 146(2), Civil Code — Property inherited by a spouse remains exclusive. Maria’s 1/9 hereditary share was therefore her exclusive property.
• Article 1001, Civil Code — Applicable intestate succession where decedent leaves no descendants or ascendants; surviving spouse inherits half, and siblings or their children inherit the other half. Governed the partition of Maria’s estate.
• Article 494, Civil Code — No co-owner is obliged to remain in co-ownership; an action for partition is imprescriptible. Precluded the defense of laches absent acquisitive prescription.
• Section 1, Rule 69, Rules of Court — All persons interested in the property must be joined in an action for partition. Jose Yabo was an indispensable party.
• Sections 1 and 5, Rule 10; Section 11, Rule 3, Rules of Court — Allow amendment of pleadings to add parties at any stage, even after judgment, to serve the merits. Enabled the joinder of Jose Yabo without dismissing the case.

Padilla, Bellosillo, Quiason, and Kapunan, JJ., concur.