Del Campo v. Court of Appeals

n. Rights of a Co-owner — Nature of right of co-owner before partition

Subject Home

16px

←Previous: Pamplona v. MoretoPrevious case

Primary source ↗Next: Cruz v. CristobalNext case→

Case DigestChapter III — Co-ownership

Del Campo v. Court of Appeals

G.R. No. 108228 · February 1, 2001 · Supreme Court

n. Rights of a Co-owner — Nature of right of co-owner before partition

Gist

In 1940 one of eight co-owners sold a metes-and-bounds portion of a Capiz lot out of her own 4/16 share. Eight years later she and two others sold nearly the whole lot to Jose Regalado, Sr., who eventually titled it in his own name — though he had earlier taken the very same portion as mortgage security from the first buyer. The Supreme Court held the 1940 sale valid to the extent of the seller's aliquot share, the buyers' 49 years of undisturbed possession a partial partition, and Regalado's heirs estopped by his own deed of mortgage.

Core Doctrine

The central doctrine is that a co-owner's sale of a physically segregated portion is not void where it does not exceed her aliquot share: "The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void," and the vendee "steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common." Where the buyer is then allowed to occupy that definite portion undisturbed "for a period too long to be ignored," that possession "had the effect of a partial partition of the co-owned property which entitles the possessor to the definite portion which he occupies."

Facts

Lot 162 of the Cadastral Survey of Pontevedra, Capiz, of 27,179 square metres under OCT No. 18047, was owned in common by eight Bornales siblings in aliquot shares: Salome 4/16, Consorcia 4/16, Alfredo 2/16, Maria 2/16, and Jose, Quirico, Rosalia and Julita 1/16 each. The 4/16 held by Salome is the ceiling against which every later transaction is measured.
On 14 July 1940, Salome sold part of her 4/16 share for ₱200.00 to Soledad Daynolo, by a deed signed by Salome and two other co-owners, Consorcia and Alfredo, describing the portion by metes and bounds with an accompanying sketch. The deed "expressly stipulated that the portion of Lot 162 sold to Soledad would be taken from Salome's 4/16 undivided interest" — which is why the sale is upheld in full rather than merely as an abstract share.
Soledad "immediately took possession of the land described above and built a house thereon."
On 1 May 1947, Soledad and her husband Simplicio Distajo mortgaged that same portion to Jose Regalado, Sr. as security for a ₱400.00 debt, by a Deed of Mortgage. This document is fatal to Regalado's successors: in it Soledad "declared herself absolute owner of the piece of land now being litigated," and Regalado accepted that declaration as mortgagee — the basis of estoppel by deed.
On 14 April 1948, three of the eight co-owners — Salome, Consorcia and Alfredo — sold 24,993 square metres of the lot to Jose Regalado, Sr. A year after taking the disputed portion as security, he bought "the whole lot" from sellers whose combined shares no longer covered it.
On 4 May 1951, Simplicio Distajo, heir of the by-then deceased Soledad, paid the debt and redeemed the portion; Regalado executed a Deed of Discharge of Mortgage in favour of Soledad's heirs — Simplicio, Rafael Distajo and Teresita Distajo-Regalado. On the same date those heirs sold the redeemed portion for ₱1,500.00 to petitioners, spouses Manuel Del Campo and Salvacion Quiachon. That Regalado executed the discharge "three years after the entire property was supposedly sold to him" is what makes his later claim untenable.
Regalado caused reconstitution of OCT No. 18047; the reconstituted OCT No. RO-4541 at first reflected the original co-owners' shares, but title later passed to Regalado, who subdivided the property into smaller lots titled in his own name — among them Lot No. 162-C-6, of 11,732 square metres, registered 24 February 1977 under TCT No. 14566.
In 1987 the Del Campos sued Regalado's heirs for "repartition, resurvey and reconveyance," claiming 1,544 square metres inside Lot 162-C-6 erroneously included in TCT No. 14566; they had occupied it "as residential dwelling ever since they purchased the property from the Distajos way back in 1951," declared it for taxation and paid the taxes. Twenty-six years passed between their purchase and Regalado's title, and thirty-six before suit — "at no instance during this time did respondents or Regalado... question petitioners' right over the land in dispute."
Summons was served on Regalado's widow Josefina Buenvenida and children Rosemarie and Antonio; Josefina and Rosemarie were declared in default on 10 May 1989, only Antonio answering — and he "failed to present any evidence to refute the claim of petitioners."
On 20 November 1990 the RTC of Roxas City, Branch 15 dismissed the complaint, holding that while Salome could alienate her pro indiviso share "she could not validly sell an undivided part thereof by meters and bounds," and that "mere possession cannot defeat the right of the Regalados who had a Torrens title." The Court of Appeals affirmed. Both propositions are reversed: the metes-and-bounds sale was valid to the extent of Salome's share, and the title was procured by fraud.

Issue

Whether the sale by a co-owner of a physical portion of an undivided property held in common is valid.

Secondary issues. Whether the respondents are estopped from denying the petitioners' right and title; and whether the petitioners are entitled to repartition, resurvey and reconveyance notwithstanding Regalado's Torrens title.

Ruling

Main issue. YES — valid, and to its full extent. "The mere fact that Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad... does not per se render the sale a nullity," as Article 493 and the jurisprudence show. Quoting Lopez v. Vda. de Cuaycong: "The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for it is a well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so. 'Quando res non valet ut ago, valeat quantum valere potest.'" Here "the object of the sale did not even exceed the ideal shares held by [Salome] in the co-ownership," the deed expressly taking the portion from her 4/16, "which the latter could validly transfer in whole or in part even without the consent of the other co-owners"; her right "is absolute in accordance with the well-settled doctrine that a co-owner has full ownership of his pro indiviso share." The Court then confines the familiar contrary principle: "We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him... the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common." Soledad thus became a co-owner in 1940, and it follows that in 1948 Salome, Consorcia and Alfredo held "only 10/16 of the undivided property less the aliquot share previously sold by Salome to Soledad." On the principle that "no one can give what he does not have", they "could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate more than his share," so "Regalado merely became a new co-owner of Lot 162 to the extent of the shares which Salome, Consorcia and Alfredo could validly convey," Soledad retaining hers and validly transferring them to the petitioners in 1951.

Secondary issues. Estopped, and entitled to reconveyance. The disputed area "had already been effectively segregated from the 'mother lot' even before title was issued in favor of Regalado": 26 years ran from the petitioners' purchase to the 1977 title and 36 to the 1987 complaint, unquestioned throughout. Per Vda. de Cabrera v. Court of Appeals, "where the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a definite portion thereof and had not disturbed the same for a period too long to be ignored, the possessor is in a better condition or right than said transferees (Potior est condition possidentis). Such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the possessor to the definite portion which he occupies." The lower courts' reliance on Torrens indefeasibility "is misplaced, considering that petitioners were deprived of their dominical rights over the said lot through fraud and with evident bad faith on the part of Regalado" — "[f]ailure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud," and "it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person". Regalado's knowledge is established by his own dealings: he took the very portion as mortgage security in 1947, "one year prior to the alienation of the whole lot in favor of the latter," never questioned Soledad's ownership, and executed a Release of Mortgage in 1951, "three years after the entire property was supposedly sold to him" — "[i]t would certainly be illogical for any mortgagee to accept property as security, purchase the mortgaged property and, thereafter, claim the very same property as his own while the mortgage was still subsisting." Hence estoppel by deed: "a party to a deed and his privies are precluded from asserting as against the other and his privies any right or title in derogation of the deed, or from denying the truth of any material fact asserted in it," and in the mortgage "Soledad, as mortgagor, had declared herself absolute owner," a declaration "accepted by Regalado as mortgagee" which "his heirs cannot now be permitted to deny." The fraud "created an implied trust in favor of petitioners," and though reconveyance on an implied trust "ordinarily prescribes in ten years," it is imprescriptible where the true owner "remains undisturbed in his possession," being "in the nature of a suit for quieting of title." "[C]ertificates of title merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud."

"WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R. CV No. 30438 is REVERSED and SET ASIDE. The parties are directed to cause a SURVEY for exact determination of their respective portions in Lot 162-C-6. Transfer Certificate of Title No. 14566 is declared CANCELLED and the Register of Deeds of Capiz is ordered to ISSUE a new title in accordance with said survey, upon finality of this decision. Costs against respondents. SO ORDERED."

Ratio

A metes-and-bounds sale by a co-owner is not void. "The mere fact that Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad, however, does not per se render the sale a nullity. This much is evident under Article 493 of the Civil Code and pertinent jurisprudence."
Lopez v. Vda. de Cuaycong. "The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for it is a well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so. 'Quando res non valet ut ago, valeat quantum valere potest.'"
The sale is good in full because it fits within the share. "[T]here can be no doubt that the transaction entered into by Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the co-ownership." The deed "expressly stipulated that the portion... would be taken from Salome's 4/16 undivided interest," which she "could validly transfer in whole or in part even without the consent of the other co-owners."
The contrary principle, confined. "We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him. Since the co-owner/vendor's undivided interest could properly be the object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common."
Consequences for the 1948 sale. "Resultantly, Soledad became a co-owner of Lot 162 as of the year 1940... It follows that Salome, Consorcia and Alfredo could not have sold the entire Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by the three co-owners/vendors were equivalent to only 10/16 of the undivided property less the aliquot share previously sold by Salome to Soledad." Based on "no one can give what he does not have," they "could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate more than his share in the co-ownership"; "Regalado merely became a new co-owner of Lot 162 to the extent of the shares which Salome, Consorcia and Alfredo could validly convey. Soledad retained her rights as co-owner and could validly transfer her share to petitioners in 1951."
Effective segregation before the title issued. "[W]e find that the area subject matter of this petition had already been effectively segregated from the 'mother lot' even before title was issued in favor of Regalado": 26 years from the 1951 purchase to the 1977 title, and 36 years to the 1987 complaint, during which "at no instance... did respondents or Regalado, for that matter, question petitioners' right over the land in dispute."
Vda. de Cabrera. "[W]here the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a definite portion thereof and had not disturbed the same for a period too long to be ignored, the possessor is in a better condition or right than said transferees (Potior est condition possidentis). Such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the possessor to the definite portion which he occupies." "Conformably, petitioners are entitled to the disputed land, having enjoyed uninterrupted possession thereof for a total of 49 years up to the present."
Torrens title is no shield here. "The lower court's reliance on the doctrine that mere possession cannot defeat the right of a holder of a registered Torrens title over property is misplaced, considering that petitioners were deprived of their dominical rights over the said lot through fraud and with evident bad faith on the part of Regalado." "Failure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud. Likewise, it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person."
Regalado's knowledge proved out of his own transactions. The disputed area "was mortgaged by Soledad and her husband to Jose Regalado, Sr. as early as May 1, 1947 or one year prior to the alienation of the whole lot in favor of the latter"; he "never questioned the ownership of the lot given by Soledad as security" and "must have at least known that Soledad bought the subject portion from Salome since he could not have reasonably accepted the lot as security for the mortgage debt if such were not the case." "By accepting the said portion... as security for the mortgage obligation, Regalado had in fact recognized Soledad's ownership," and he executed a Release of Mortgage on 4 May 1951, "three years after the entire property was supposedly sold to him." "It would certainly be illogical for any mortgagee to accept property as security, purchase the mortgaged property and, thereafter, claim the very same property as his own while the mortgage was still subsisting."
Estoppel by deed. "[R]espondents are barred from making this assertion under the equitable principle of estoppel by deed, whereby a party to a deed and his privies are precluded from asserting as against the other and his privies any right or title in derogation of the deed, or from denying the truth of any material fact asserted in it." "A perusal of the documents evidencing the mortgage would readily reveal that Soledad, as mortgagor, had declared herself absolute owner of the piece of land now being litigated. This declaration of fact was accepted by Regalado as mortgagee and accordingly, his heirs cannot now be permitted to deny it."
Implied trust and imprescriptibility. "Although Regalado's certificate of title became indefeasible after the lapse of one year from the date of the decree of registration, the attendance of fraud in its issuance created an implied trust in favor of petitioners and gave them the right to seek reconveyance... An action for reconveyance based on an implied trust ordinarily prescribes in ten years. But when the right of the true and real owner is recognized, expressly or implicitly such as when he remains undisturbed in his possession, the said action is imprescriptible, it being in the nature of a suit for quieting of title."
The limit of indefeasibility. "The alleged incontrovertibility of Regalado's title cannot be successfully invoked by respondents because certificates of title merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud."

Doctrine

A Metes-and-Bounds Sale by a Co-Owner Is Not Void (Art. 493): "[T]he binding force of a contract must be recognized as far as it is legally possible to do so" — quando res non valet ut ago, valeat quantum valere potest.
The Vendee Steps Into the Vendor's Shoes: He "acquires a proportionate abstract share in the property held in common," becoming a co-owner from the date of the sale.
Full Effect Where Within the Share: Where "the object of the sale did not even exceed the ideal shares held by [the vendor]," the sale "can be given effect to the full extent."
Nemo Dat (Art. 1459): A later sale by the remaining co-owners transfers only what they still hold; "Regalado merely became a new co-owner... to the extent of the shares which [they] could validly convey."
Undisturbed Possession as Partial Partition (Art. 494): Possession of a definite portion left undisturbed "for a period too long to be ignored" has "the effect of a partial partition... which entitles the possessor to the definite portion which he occupies" — potior est condition possidentis.
Fraud in Registration (Art. 1456): "Failure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud," creating an implied trust.
Reconveyance Imprescriptible While in Possession: The ten-year period does not run where the true owner "remains undisturbed in his possession," the action being "in the nature of a suit for quieting of title."
Estoppel by Deed (Art. 1431): A party to a deed and his privies cannot assert any right "in derogation of the deed" or deny "the truth of any material fact asserted in it" — here, a mortgagee who accepted the mortgagor's declaration of absolute ownership.
Title Confirms, It Does Not Create: Certificates "merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud."

Where this sits among the sale cases. Bailon-Casilao cuts a sale down because the sellers exceeded their shares; Pamplona upholds one in full because the seller's share exceeded what he sold; Del Campo does both at once — upholding the 1940 sale (within Salome's 4/16) and cutting down the 1948 sale (which reached into what she had already parted with).

Full Digest — Recitation Format

I. Gist and Central Doctrine

Relationship to requested topic: DIRECT. Salome Bornales, one of eight co-owners of Lot 162 in Pontevedra, Capiz, sold a metes-and-bounds portion out of her 4/16 share to Soledad Daynolo in 1940. In 1948 Salome and two other co-owners sold nearly the whole lot to Jose Regalado, Sr., who by 1977 had titled a subdivided portion in his own name — though in 1947 he had accepted the very same parcel as mortgage security from Soledad and in 1951 executed its discharge. Soledad's successors, the Del Campos, sued in 1987; the RTC and Court of Appeals dismissed, but the Supreme Court reversed. The central doctrines are that a co-owner's sale of a physical portion within her aliquot share is valid and makes the vendee a co-owner "step[ping] into the shoes of the vendor"; that undisturbed possession of a definite portion "for a period too long to be ignored" works a partial partition; and that a title procured while concealing another's possession is held on an implied trust, its holder estopped by his own deed.

II. Chronological Narration of Material Facts

Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita, all surnamed Bornales, were the original co-owners of Lot 162 of the Cadastral Survey of Pontevedra, Capiz, of 27,179 square metres, under OCT No. 18047, in aliquot shares of 4/16, 4/16, 2/16, 2/16, 1/16, 1/16, 1/16 and 1/16 respectively.
On 14 July 1940, Salome sold part of her 4/16 share for ₱200.00 to Soledad Daynolo, by a Deed of Absolute Sale signed by Salome and co-owners Consorcia and Alfredo, describing the portion by measurements from points "9" to "10" to "11" with an accompanying sketch "made an integral part of this deed."
"Thereafter, Soledad Daynolo immediately took possession of the land described above and built a house thereon."
On 1 May 1947, Soledad and her husband Simplicio Distajo mortgaged the subject portion to Jose Regalado, Sr. as security for a ₱400.00 debt, by Deed of Mortgage.
On 14 April 1948, "three of the eight co-owners of Lot 162, specifically, Salome, Consorcia and Alfredo, sold 24,993 square meters of said lot to Jose Regalado, Sr."
On 4 May 1951, Simplicio Distajo, heir of the deceased Soledad, paid the mortgage debt and redeemed the portion; Regalado executed a Deed of Discharge of Mortgage in favour of Simplicio, Rafael Distajo and Teresita Distajo-Regalado. On the same date, those heirs sold the redeemed portion for ₱1,500.00 to petitioners, spouses Manuel Del Campo and Salvacion Quiachon.
Regalado caused the reconstitution of OCT No. 18047; OCT No. RO-4541 "initially reflected the shares of the original co-owners," but title was later transferred to Regalado, who "subdivided the entire property into smaller lots, each covered by a respective title in his name" — among them Lot No. 162-C-6, of 11,732 square metres, registered 24 February 1977 under TCT No. 14566.
In 1987, the Del Campos sued Regalado's heirs for "repartition, resurvey and reconveyance," claiming 1,544 square metres within Lot 162-C-6 "erroneously included in TCT No. 14566," alleging occupation "as residential dwelling ever since they purchased the property from the Distajos way back in 1951," and payment of taxes.
On 1 April 1987, summons was served on Regalado's widow Josefina Buenvenida and children Rosemarie and Antonio; on 10 May 1989 Josefina and Rosemarie were declared in default, only Antonio having answered — and he "failed to present any evidence to refute the claim of petitioners."
On 20 November 1990, the RTC of Roxas City, Branch 15 (Civil Case No. V-5369) dismissed the complaint, holding that while Salome could alienate her pro indiviso share, "she could not validly sell an undivided part thereof by meters and bounds," and that "mere possession cannot defeat the right of the Regalados who had a Torrens title over the land."
The Court of Appeals (CA-G.R. CV No. 30438) affirmed, with no pronouncement as to costs; the Supreme Court reversed on 1 February 2001.

III. Arguments of the Parties

A. Petitioners (Spouses Manuel Del Campo and Salvacion Quiachon)

Petitioners maintained that "[t]he fact that the sale of the subject portion constitutes a sale of a concrete or definite portion of land owned in common does not absolutely deprive herein petitioners of any right or title thereto," and that "in any event, herein private respondents are all estopped from denying the right and title of herein petitioners."

B. Respondents (Heirs of Jose Regalado, Sr.)

Only Antonio answered, and he presented no evidence; the defence rested on Regalado's Torrens title and on the trial court's view that a co-owner cannot sell a definite portion by metes and bounds before partition.

C. Common Ground

"Pure questions of law are raised in this appeal as the... factual antecedents are undisputed" — the shares, the 1940 sale, the 1947 mortgage, the 1948 sale, the 1951 discharge and resale, and the 1977 title.

IV. Issues

A. MAIN ISSUE

"Would the sale by a co-owner of a physical portion of an undivided property held in common be valid?"

B. SECONDARY ISSUES

"Is respondent estopped from denying petitioners' right and title over the disputed area?" and "[u]nder the facts and circumstances duly established by the evidence, are petitioners entitled to 'repartition, resurvey and reconveyance' of the property in question?"

V. Ruling / Disposition

A. MAIN ISSUE

YES. "The mere fact that Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad... does not per se render the sale a nullity." The transaction "could be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the co-ownership," and "the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common." Hence "Soledad became a co-owner of Lot 162 as of the year 1940," and the 1948 sellers, holding "only 10/16... less the aliquot share previously sold by Salome to Soledad," could not give what they did not have: "Regalado merely became a new co-owner of Lot 162 to the extent of the shares which Salome, Consorcia and Alfredo could validly convey."

B. SECONDARY ISSUES

Estopped, and entitled to reconveyance. The area "had already been effectively segregated from the 'mother lot' even before title was issued," undisturbed possession having "the effect of a partial partition"; the title was obtained through fraud, creating an implied trust and a reconveyance action that is imprescriptible while the true owner remains in possession; and the respondents are barred by estoppel by deed arising from Regalado's own Deed of Mortgage and Discharge.

"WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R. CV No. 30438 is REVERSED and SET ASIDE. The parties are directed to cause a SURVEY for exact determination of their respective portions in Lot 162-C-6. Transfer Certificate of Title No. 14566 is declared CANCELLED and the Register of Deeds of Capiz is ordered to ISSUE a new title in accordance with said survey, upon finality of this decision. Costs against respondents. SO ORDERED."

VI. Ratio Decidendi and Doctrines

A. Ratio Decidendi

The sale is not void. "The mere fact that Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad, however, does not per se render the sale a nullity. This much is evident under Article 493 of the Civil Code and pertinent jurisprudence on the matter."
Lopez v. Vda. de Cuaycong, per Justice Bocobo: "The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for it is a well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so. 'Quando res non valet ut ago, valeat quantum valere potest.'"
Within the share, hence valid entire. "[T]here can be no doubt that the transaction entered into by Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the co-ownership... Salome's right to sell part of her undivided interest in the co-owned property is absolute... Since Salome's clear intention was to sell merely part of her aliquot share in Lot 162, in our view no valid objection can be made against it and the sale can be given effect to the full extent."
The principle confined. "We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him... the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common."
The 1948 sale cut down. "It follows that Salome, Consorcia and Alfredo could not have sold the entire Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by the three co-owners/vendors were equivalent to only 10/16 of the undivided property less the aliquot share previously sold by Salome to Soledad." "Based on the principle that 'no one can give what he does not have,' Salome, Consorcia and Alfredo could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate more than his share in the co-ownership."
Effective segregation. "[T]he area subject matter of this petition had already been effectively segregated from the 'mother lot' even before title was issued in favor of Regalado" — 26 years to the title, 36 to the complaint, "at no instance during this time did respondents or Regalado, for that matter, question petitioners' right over the land in dispute."
Vda. de Cabrera. "Such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the possessor to the definite portion which he occupies." "Conformably, petitioners are entitled to the disputed land, having enjoyed uninterrupted possession thereof for a total of 49 years up to the present."
Fraud in registration. "Failure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud. Likewise, it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person." "[W]e are convinced that Regalado knew of the fact that he did not have a title to the entire lot and could not, therefore, have validly registered the same in his name alone."
His own deeds prove it. The area "was mortgaged by Soledad and her husband to Jose Regalado, Sr. as early as May 1, 1947 or one year prior to the alienation of the whole lot in favor of the latter"; "[b]y accepting the said portion of Lot 162 as security for the mortgage obligation, Regalado had in fact recognized Soledad's ownership of this definite portion"; and he executed the Release "three years after the entire property was supposedly sold to him." "It would certainly be illogical for any mortgagee to accept property as security, purchase the mortgaged property and, thereafter, claim the very same property as his own while the mortgage was still subsisting."
Estoppel by deed. "[R]espondents are barred from making this assertion under the equitable principle of estoppel by deed, whereby a party to a deed and his privies are precluded from asserting as against the other and his privies any right or title in derogation of the deed, or from denying the truth of any material fact asserted in it."
Implied trust, imprescriptible action. "[T]he attendance of fraud in its issuance created an implied trust in favor of petitioners and gave them the right to seek reconveyance... An action for reconveyance based on an implied trust ordinarily prescribes in ten years. But when the right of the true and real owner is recognized, expressly or implicitly such as when he remains undisturbed in his possession, the said action is imprescriptible, it being in the nature of a suit for quieting of title."
Indefeasibility does not shelter fraud. "[C]ertificates of title merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud."

B. Doctrines/Rules

Metes-and-Bounds Sale by a Co-Owner (Art. 493): Not void; recognised "as far as it is legally possible," and given full effect where within the vendor's aliquot share.
The Vendee Becomes a Co-Owner: He acquires "the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration."
Nemo Dat (Art. 1459): Later sellers convey only what remains to them.
Undisturbed Possession = Partial Partition (Art. 494): Potior est condition possidentis.
Concealment of Another's Possession Is Actual Fraud (Art. 1456): And creates an implied trust.
Reconveyance Is Imprescriptible While the Owner Possesses.
Estoppel by Deed (Art. 1431): A mortgagee who accepts the mortgagor's declaration of ownership, and his heirs, cannot afterwards deny it.
Title Records, It Does Not Create.

C. Limitations/Exceptions

Reconveyance on an implied trust does prescribe in ten years where the claimant is not in possession; the imprescriptibility here turns on the petitioners' unbroken occupation.
The principle that a co-owner cannot dispose of a particular portion before partition is not abolished — it is confined so that the vendee still takes the vendor's ideal share.
Two of the three respondents were in default and the third offered no evidence, so the factual findings rest on the petitioners' documents alone.

D. Topic Integration

The relationship is DIRECT.
On "Nature of right of co-owner before partition," this is the case that resolves the apparent contradiction students meet: a co-owner cannot sell a specific portion versus a co-owner may freely alienate his share. Both are true — the sale is valid as a sale of the vendor's ideal share, and the vendee becomes a co-owner rather than the owner of that patch of ground.
It completes the trio with Bailon-Casilao and Pamplona, and uniquely shows both movements in one case: the first sale upheld in full, the second cut down to what the sellers still owned.
It also carries the chapter's recurring theme of partition in fact — here achieved by nothing more than the buyers' long, unchallenged occupation — and adds the registration-law overlay: a co-owner who quietly titles the whole in his own name holds the excess on an implied trust, and his own earlier deeds may estop his heirs from denying it.

VII. Separate Opinions

NOT IN RECORD. The decision was penned for the Second Division, with Justices Bellosillo, Mendoza, Buena and De Leon, Jr. concurring.

Cited Laws & Provisions

Every statute, rule, and issuance the decision turns on — the text as written, and the work it does in this case.

Civil Code

Article 493, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book II (Property, Ownership, and Its Modifications), Title III (Co-Ownership)

Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. (399)

Why it is cited here

The article, and the answer to a proposition students often over-state. "Each co-owner shall have the full ownership of his part... and he may therefore alienate, assign or mortgage it... But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership."

The over-stated proposition is that "a co-owner cannot sell a definite portion before partition." The Court accepts the principle and then confines it: "We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him."

What the vendee gets is the vendor's own interest: "what the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common."

And the arithmetic saves the sale outright, as in Pamplona v. Moreto: "the object of the sale did not even exceed the ideal shares held by [Salome] in the co-ownership," the deed expressly taking the portion from her 4/16 interest.

Civil Code

Article 1459, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title VI (Sales), Chapter 1 (Nature and Form of the Contract)

The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (n)

Why it is cited here

The principle that cuts the second sale down: the vendor "must have a right to transfer the ownership thereof at the time it is delivered" — or, as the Court puts it, "no one can give what he does not have" (nemo dat quod non habet).

By 1948 Salome had already parted with a slice of her 4/16, so she, Consorcia and Alfredo together held "only 10/16 of the undivided property less the aliquot share previously sold by Salome to Soledad." Hence "Salome, Consorcia and Alfredo could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate more than his share in the co-ownership."

The result is the familiar pro tanto rule of Bailon-Casilao: "even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent," so "Regalado merely became a new co-owner of Lot 162 to the extent of the shares which Salome, Consorcia and Alfredo could validly convey."

Civil Code

Article 494, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book II (Property, Ownership, and Its Modifications), Title III (Co-Ownership)

No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement.

A donor or testator may prohibit partition for a period which shall not exceed twenty years.

Neither shall there be any partition when it is prohibited by law.

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. (400a)

Why it is cited here

Partition again achieved in fact rather than by decree. The Court draws on Vda. de Cabrera v. Court of Appeals: "where the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a definite portion thereof and had not disturbed the same for a period too long to be ignored, the possessor is in a better condition or right than said transferees (Potior est condition possidentis). Such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the possessor to the definite portion which he occupies."

The periods are what carry it: 26 years from the 1951 purchase to the 1977 title, and 36 years to the 1987 complaint, "at no instance during this time did respondents or Regalado... question petitioners' right over the land" — 49 years of possession by the time of decision.

Compare Pamplona, where the partial partition came from the vendor pointing out the boundaries with the co-owners acquiescing. Here it comes from the transferees' own long inaction. Either way a definite portion leaves the community.

Civil Code

Article 1456, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title V (Trusts (N)), Chapter 3 (Implied Trusts)

If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

Why it is cited here

Why a Torrens title did not end the matter. Property acquired "through mistake or fraud" makes the person obtaining it "a trustee of an implied trust for the benefit of the person from whom the property comes."

The fraud is found concretely: "[f]ailure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud," and "it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person."

Then the prescription rule that matters most in practice: "[a]n action for reconveyance based on an implied trust ordinarily prescribes in ten years. But when the right of the true and real owner is recognized, expressly or implicitly[,] such as when he remains undisturbed in his possession, the said action is imprescriptible, it being in the nature of a suit for quieting of title."

And the limit of indefeasibility: "certificates of title merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud."

Civil Code

Article 1431, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title IV (Estoppel (N))

Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

Why it is cited here

Estoppel by deed, the independent ground on which the respondents lose. "Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon."

Its specific form here: "a party to a deed and his privies are precluded from asserting as against the other and his privies any right or title in derogation of the deed, or from denying the truth of any material fact asserted in it."

The deed is Regalado's own Deed of Mortgage of 1 May 1947, in which "Soledad, as mortgagor, had declared herself absolute owner of the piece of land now being litigated. This declaration of fact was accepted by Regalado as mortgagee and accordingly, his heirs cannot now be permitted to deny it."

The Court adds the common-sense point that makes the estoppel obvious: "[i]t would certainly be illogical for any mortgagee to accept property as security, purchase the mortgaged property and, thereafter, claim the very same property as his own while the mortgage was still subsisting."

Cited laws & provisions

Article 493, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book II (Property, Ownership, and Its Modifications), Title III (Co-Ownership)

Why it is cited here

Full entry below ↓

Article 1459, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title VI (Sales), Chapter 1 (Nature and Form of the Contract)

The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (n)

Why it is cited here

Full entry below ↓

Article 494, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book II (Property, Ownership, and Its Modifications), Title III (Co-Ownership)

No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement.

A donor or testator may prohibit partition for a period which shall not exceed twenty years.

Neither shall there be any partition when it is prohibited by law.

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. (400a)

Why it is cited here

Full entry below ↓

Article 1456, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title V (Trusts (N)), Chapter 3 (Implied Trusts)

If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

Why it is cited here

Full entry below ↓

Article 1431, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title IV (Estoppel (N))

Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

Why it is cited here

Full entry below ↓

Facts

Lot 162 of the Cadastral Survey of Pontevedra, Capiz, of 27,179 square metres under OCT No. 18047, was owned in common by eight Bornales siblings in aliquot shares: Salome 4/16, Consorcia 4/16, Alfredo 2/16, Maria 2/16, and Jose, Quirico, Rosalia and Julita 1/16 each. The 4/16 held by Salome is the ceiling against which every later transaction is measured.
On 14 July 1940, Salome sold part of her 4/16 share for ₱200.00 to Soledad Daynolo, by a deed signed by Salome and two other co-owners, Consorcia and Alfredo, describing the portion by metes and bounds with an accompanying sketch. The deed "expressly stipulated that the portion of Lot 162 sold to Soledad would be taken from Salome's 4/16 undivided interest" — which is why the sale is upheld in full rather than merely as an abstract share.
Soledad "immediately took possession of the land described above and built a house thereon."
On 1 May 1947, Soledad and her husband Simplicio Distajo mortgaged that same portion to Jose Regalado, Sr. as security for a ₱400.00 debt, by a Deed of Mortgage. This document is fatal to Regalado's successors: in it Soledad "declared herself absolute owner of the piece of land now being litigated," and Regalado accepted that declaration as mortgagee — the basis of estoppel by deed.
On 14 April 1948, three of the eight co-owners — Salome, Consorcia and Alfredo — sold 24,993 square metres of the lot to Jose Regalado, Sr. A year after taking the disputed portion as security, he bought "the whole lot" from sellers whose combined shares no longer covered it.
On 4 May 1951, Simplicio Distajo, heir of the by-then deceased Soledad, paid the debt and redeemed the portion; Regalado executed a Deed of Discharge of Mortgage in favour of Soledad's heirs — Simplicio, Rafael Distajo and Teresita Distajo-Regalado. On the same date those heirs sold the redeemed portion for ₱1,500.00 to petitioners, spouses Manuel Del Campo and Salvacion Quiachon. That Regalado executed the discharge "three years after the entire property was supposedly sold to him" is what makes his later claim untenable.
Regalado caused reconstitution of OCT No. 18047; the reconstituted OCT No. RO-4541 at first reflected the original co-owners' shares, but title later passed to Regalado, who subdivided the property into smaller lots titled in his own name — among them Lot No. 162-C-6, of 11,732 square metres, registered 24 February 1977 under TCT No. 14566.
In 1987 the Del Campos sued Regalado's heirs for "repartition, resurvey and reconveyance," claiming 1,544 square metres inside Lot 162-C-6 erroneously included in TCT No. 14566; they had occupied it "as residential dwelling ever since they purchased the property from the Distajos way back in 1951," declared it for taxation and paid the taxes. Twenty-six years passed between their purchase and Regalado's title, and thirty-six before suit — "at no instance during this time did respondents or Regalado... question petitioners' right over the land in dispute."
Summons was served on Regalado's widow Josefina Buenvenida and children Rosemarie and Antonio; Josefina and Rosemarie were declared in default on 10 May 1989, only Antonio answering — and he "failed to present any evidence to refute the claim of petitioners."
On 20 November 1990 the RTC of Roxas City, Branch 15 dismissed the complaint, holding that while Salome could alienate her pro indiviso share "she could not validly sell an undivided part thereof by meters and bounds," and that "mere possession cannot defeat the right of the Regalados who had a Torrens title." The Court of Appeals affirmed. Both propositions are reversed: the metes-and-bounds sale was valid to the extent of Salome's share, and the title was procured by fraud.

Issue

Whether the sale by a co-owner of a physical portion of an undivided property held in common is valid.

Ruling

"WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R. CV No. 30438 is REVERSED and SET ASIDE. The parties are directed to cause a SURVEY for exact determination of their respective portions in Lot 162-C-6. Transfer Certificate of Title No. 14566 is declared CANCELLED and the Register of Deeds of Capiz is ordered to ISSUE a new title in accordance with said survey, upon finality of this decision. Costs against respondents. SO ORDERED."

Ratio

A metes-and-bounds sale by a co-owner is not void. "The mere fact that Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad, however, does not per se render the sale a nullity. This much is evident under Article 493 of the Civil Code and pertinent jurisprudence."
Lopez v. Vda. de Cuaycong. "The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for it is a well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so. 'Quando res non valet ut ago, valeat quantum valere potest.'"
The sale is good in full because it fits within the share. "[T]here can be no doubt that the transaction entered into by Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the co-ownership." The deed "expressly stipulated that the portion... would be taken from Salome's 4/16 undivided interest," which she "could validly transfer in whole or in part even without the consent of the other co-owners."
The contrary principle, confined. "We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him. Since the co-owner/vendor's undivided interest could properly be the object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common."
Consequences for the 1948 sale. "Resultantly, Soledad became a co-owner of Lot 162 as of the year 1940... It follows that Salome, Consorcia and Alfredo could not have sold the entire Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by the three co-owners/vendors were equivalent to only 10/16 of the undivided property less the aliquot share previously sold by Salome to Soledad." Based on "no one can give what he does not have," they "could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate more than his share in the co-ownership"; "Regalado merely became a new co-owner of Lot 162 to the extent of the shares which Salome, Consorcia and Alfredo could validly convey. Soledad retained her rights as co-owner and could validly transfer her share to petitioners in 1951."
Effective segregation before the title issued. "[W]e find that the area subject matter of this petition had already been effectively segregated from the 'mother lot' even before title was issued in favor of Regalado": 26 years from the 1951 purchase to the 1977 title, and 36 years to the 1987 complaint, during which "at no instance... did respondents or Regalado, for that matter, question petitioners' right over the land in dispute."
Vda. de Cabrera. "[W]here the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a definite portion thereof and had not disturbed the same for a period too long to be ignored, the possessor is in a better condition or right than said transferees (Potior est condition possidentis). Such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the possessor to the definite portion which he occupies." "Conformably, petitioners are entitled to the disputed land, having enjoyed uninterrupted possession thereof for a total of 49 years up to the present."
Torrens title is no shield here. "The lower court's reliance on the doctrine that mere possession cannot defeat the right of a holder of a registered Torrens title over property is misplaced, considering that petitioners were deprived of their dominical rights over the said lot through fraud and with evident bad faith on the part of Regalado." "Failure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud. Likewise, it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person."
Regalado's knowledge proved out of his own transactions. The disputed area "was mortgaged by Soledad and her husband to Jose Regalado, Sr. as early as May 1, 1947 or one year prior to the alienation of the whole lot in favor of the latter"; he "never questioned the ownership of the lot given by Soledad as security" and "must have at least known that Soledad bought the subject portion from Salome since he could not have reasonably accepted the lot as security for the mortgage debt if such were not the case." "By accepting the said portion... as security for the mortgage obligation, Regalado had in fact recognized Soledad's ownership," and he executed a Release of Mortgage on 4 May 1951, "three years after the entire property was supposedly sold to him." "It would certainly be illogical for any mortgagee to accept property as security, purchase the mortgaged property and, thereafter, claim the very same property as his own while the mortgage was still subsisting."
Estoppel by deed. "[R]espondents are barred from making this assertion under the equitable principle of estoppel by deed, whereby a party to a deed and his privies are precluded from asserting as against the other and his privies any right or title in derogation of the deed, or from denying the truth of any material fact asserted in it." "A perusal of the documents evidencing the mortgage would readily reveal that Soledad, as mortgagor, had declared herself absolute owner of the piece of land now being litigated. This declaration of fact was accepted by Regalado as mortgagee and accordingly, his heirs cannot now be permitted to deny it."
Implied trust and imprescriptibility. "Although Regalado's certificate of title became indefeasible after the lapse of one year from the date of the decree of registration, the attendance of fraud in its issuance created an implied trust in favor of petitioners and gave them the right to seek reconveyance... An action for reconveyance based on an implied trust ordinarily prescribes in ten years. But when the right of the true and real owner is recognized, expressly or implicitly such as when he remains undisturbed in his possession, the said action is imprescriptible, it being in the nature of a suit for quieting of title."
The limit of indefeasibility. "The alleged incontrovertibility of Regalado's title cannot be successfully invoked by respondents because certificates of title merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud."

Doctrine

A Metes-and-Bounds Sale by a Co-Owner Is Not Void (Art. 493): "[T]he binding force of a contract must be recognized as far as it is legally possible to do so" — quando res non valet ut ago, valeat quantum valere potest.
The Vendee Steps Into the Vendor's Shoes: He "acquires a proportionate abstract share in the property held in common," becoming a co-owner from the date of the sale.
Full Effect Where Within the Share: Where "the object of the sale did not even exceed the ideal shares held by [the vendor]," the sale "can be given effect to the full extent."
Nemo Dat (Art. 1459): A later sale by the remaining co-owners transfers only what they still hold; "Regalado merely became a new co-owner... to the extent of the shares which [they] could validly convey."
Undisturbed Possession as Partial Partition (Art. 494): Possession of a definite portion left undisturbed "for a period too long to be ignored" has "the effect of a partial partition... which entitles the possessor to the definite portion which he occupies" — potior est condition possidentis.
Fraud in Registration (Art. 1456): "Failure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud," creating an implied trust.
Reconveyance Imprescriptible While in Possession: The ten-year period does not run where the true owner "remains undisturbed in his possession," the action being "in the nature of a suit for quieting of title."
Estoppel by Deed (Art. 1431): A party to a deed and his privies cannot assert any right "in derogation of the deed" or deny "the truth of any material fact asserted in it" — here, a mortgagee who accepted the mortgagor's declaration of absolute ownership.
Title Confirms, It Does Not Create: Certificates "merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud."

Full Digest — Recitation Format

I. Gist and Central Doctrine

II. Chronological Narration of Material Facts

Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita, all surnamed Bornales, were the original co-owners of Lot 162 of the Cadastral Survey of Pontevedra, Capiz, of 27,179 square metres, under OCT No. 18047, in aliquot shares of 4/16, 4/16, 2/16, 2/16, 1/16, 1/16, 1/16 and 1/16 respectively.
On 14 July 1940, Salome sold part of her 4/16 share for ₱200.00 to Soledad Daynolo, by a Deed of Absolute Sale signed by Salome and co-owners Consorcia and Alfredo, describing the portion by measurements from points "9" to "10" to "11" with an accompanying sketch "made an integral part of this deed."
"Thereafter, Soledad Daynolo immediately took possession of the land described above and built a house thereon."
On 1 May 1947, Soledad and her husband Simplicio Distajo mortgaged the subject portion to Jose Regalado, Sr. as security for a ₱400.00 debt, by Deed of Mortgage.
On 14 April 1948, "three of the eight co-owners of Lot 162, specifically, Salome, Consorcia and Alfredo, sold 24,993 square meters of said lot to Jose Regalado, Sr."
On 4 May 1951, Simplicio Distajo, heir of the deceased Soledad, paid the mortgage debt and redeemed the portion; Regalado executed a Deed of Discharge of Mortgage in favour of Simplicio, Rafael Distajo and Teresita Distajo-Regalado. On the same date, those heirs sold the redeemed portion for ₱1,500.00 to petitioners, spouses Manuel Del Campo and Salvacion Quiachon.
Regalado caused the reconstitution of OCT No. 18047; OCT No. RO-4541 "initially reflected the shares of the original co-owners," but title was later transferred to Regalado, who "subdivided the entire property into smaller lots, each covered by a respective title in his name" — among them Lot No. 162-C-6, of 11,732 square metres, registered 24 February 1977 under TCT No. 14566.
In 1987, the Del Campos sued Regalado's heirs for "repartition, resurvey and reconveyance," claiming 1,544 square metres within Lot 162-C-6 "erroneously included in TCT No. 14566," alleging occupation "as residential dwelling ever since they purchased the property from the Distajos way back in 1951," and payment of taxes.
On 1 April 1987, summons was served on Regalado's widow Josefina Buenvenida and children Rosemarie and Antonio; on 10 May 1989 Josefina and Rosemarie were declared in default, only Antonio having answered — and he "failed to present any evidence to refute the claim of petitioners."
On 20 November 1990, the RTC of Roxas City, Branch 15 (Civil Case No. V-5369) dismissed the complaint, holding that while Salome could alienate her pro indiviso share, "she could not validly sell an undivided part thereof by meters and bounds," and that "mere possession cannot defeat the right of the Regalados who had a Torrens title over the land."
The Court of Appeals (CA-G.R. CV No. 30438) affirmed, with no pronouncement as to costs; the Supreme Court reversed on 1 February 2001.

III. Arguments of the Parties

A. Petitioners (Spouses Manuel Del Campo and Salvacion Quiachon)

B. Respondents (Heirs of Jose Regalado, Sr.)

C. Common Ground

IV. Issues

A. MAIN ISSUE

"Would the sale by a co-owner of a physical portion of an undivided property held in common be valid?"

B. SECONDARY ISSUES

V. Ruling / Disposition

A. MAIN ISSUE

B. SECONDARY ISSUES

VI. Ratio Decidendi and Doctrines

A. Ratio Decidendi

The sale is not void. "The mere fact that Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad, however, does not per se render the sale a nullity. This much is evident under Article 493 of the Civil Code and pertinent jurisprudence on the matter."
Lopez v. Vda. de Cuaycong, per Justice Bocobo: "The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for it is a well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so. 'Quando res non valet ut ago, valeat quantum valere potest.'"
Within the share, hence valid entire. "[T]here can be no doubt that the transaction entered into by Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the co-ownership... Salome's right to sell part of her undivided interest in the co-owned property is absolute... Since Salome's clear intention was to sell merely part of her aliquot share in Lot 162, in our view no valid objection can be made against it and the sale can be given effect to the full extent."
The principle confined. "We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him... the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common."
The 1948 sale cut down. "It follows that Salome, Consorcia and Alfredo could not have sold the entire Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by the three co-owners/vendors were equivalent to only 10/16 of the undivided property less the aliquot share previously sold by Salome to Soledad." "Based on the principle that 'no one can give what he does not have,' Salome, Consorcia and Alfredo could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate more than his share in the co-ownership."
Effective segregation. "[T]he area subject matter of this petition had already been effectively segregated from the 'mother lot' even before title was issued in favor of Regalado" — 26 years to the title, 36 to the complaint, "at no instance during this time did respondents or Regalado, for that matter, question petitioners' right over the land in dispute."
Vda. de Cabrera. "Such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the possessor to the definite portion which he occupies." "Conformably, petitioners are entitled to the disputed land, having enjoyed uninterrupted possession thereof for a total of 49 years up to the present."
Fraud in registration. "Failure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud. Likewise, it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person." "[W]e are convinced that Regalado knew of the fact that he did not have a title to the entire lot and could not, therefore, have validly registered the same in his name alone."
His own deeds prove it. The area "was mortgaged by Soledad and her husband to Jose Regalado, Sr. as early as May 1, 1947 or one year prior to the alienation of the whole lot in favor of the latter"; "[b]y accepting the said portion of Lot 162 as security for the mortgage obligation, Regalado had in fact recognized Soledad's ownership of this definite portion"; and he executed the Release "three years after the entire property was supposedly sold to him." "It would certainly be illogical for any mortgagee to accept property as security, purchase the mortgaged property and, thereafter, claim the very same property as his own while the mortgage was still subsisting."
Estoppel by deed. "[R]espondents are barred from making this assertion under the equitable principle of estoppel by deed, whereby a party to a deed and his privies are precluded from asserting as against the other and his privies any right or title in derogation of the deed, or from denying the truth of any material fact asserted in it."
Implied trust, imprescriptible action. "[T]he attendance of fraud in its issuance created an implied trust in favor of petitioners and gave them the right to seek reconveyance... An action for reconveyance based on an implied trust ordinarily prescribes in ten years. But when the right of the true and real owner is recognized, expressly or implicitly such as when he remains undisturbed in his possession, the said action is imprescriptible, it being in the nature of a suit for quieting of title."
Indefeasibility does not shelter fraud. "[C]ertificates of title merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud."

B. Doctrines/Rules

Metes-and-Bounds Sale by a Co-Owner (Art. 493): Not void; recognised "as far as it is legally possible," and given full effect where within the vendor's aliquot share.
The Vendee Becomes a Co-Owner: He acquires "the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration."
Nemo Dat (Art. 1459): Later sellers convey only what remains to them.
Undisturbed Possession = Partial Partition (Art. 494): Potior est condition possidentis.
Concealment of Another's Possession Is Actual Fraud (Art. 1456): And creates an implied trust.
Reconveyance Is Imprescriptible While the Owner Possesses.
Estoppel by Deed (Art. 1431): A mortgagee who accepts the mortgagor's declaration of ownership, and his heirs, cannot afterwards deny it.
Title Records, It Does Not Create.

C. Limitations/Exceptions

Reconveyance on an implied trust does prescribe in ten years where the claimant is not in possession; the imprescriptibility here turns on the petitioners' unbroken occupation.
The principle that a co-owner cannot dispose of a particular portion before partition is not abolished — it is confined so that the vendee still takes the vendor's ideal share.
Two of the three respondents were in default and the third offered no evidence, so the factual findings rest on the petitioners' documents alone.

D. Topic Integration

The relationship is DIRECT.
On "Nature of right of co-owner before partition," this is the case that resolves the apparent contradiction students meet: a co-owner cannot sell a specific portion versus a co-owner may freely alienate his share. Both are true — the sale is valid as a sale of the vendor's ideal share, and the vendee becomes a co-owner rather than the owner of that patch of ground.
It completes the trio with Bailon-Casilao and Pamplona, and uniquely shows both movements in one case: the first sale upheld in full, the second cut down to what the sellers still owned.
It also carries the chapter's recurring theme of partition in fact — here achieved by nothing more than the buyers' long, unchallenged occupation — and adds the registration-law overlay: a co-owner who quietly titles the whole in his own name holds the excess on an implied trust, and his own earlier deeds may estop his heirs from denying it.

VII. Separate Opinions

NOT IN RECORD. The decision was penned for the Second Division, with Justices Bellosillo, Mendoza, Buena and De Leon, Jr. concurring.