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ANTIPOLO INING v. LEONARDO R. VEGA, GR No. 174727, 2013-08-12

Facts:
Leon Roldan (Leon), married to Rafaela Menez (Rafaela), is the owner of a... parcel of land (subject
property) in Kalibo, Aklan covered by Original Certificate of Title No. (24071) RO-630[5] (OCT RO-
630).
Leon was survived by his siblings Romana Roldan (Romana) and Gregoria Roldan Ining (Gregoria),
who are now both deceased.
Romana was survived by her daughter Anunciacion Vega and grandson, herein respondent Leonardo
R. Vega (Leonardo) (also both deceased). Leonardo in turn is survived by his wife Lourdes and
children Restonilo I. Vega, Crispulo M. Vega, Milbuena Vega-Restituto and Lenard Vega, the...
substituted respondents.
Gregoria, on the other hand, was survived by her six children: petitioners Natividad Ining-Ibea
(Natividad), Dolores Ining-Rimon (Dolores), Antipolo, and Pedro; Jose; and Amando. Natividad is
survived by Edilberto Ibea, Josefa Ibea, Martha Ibea, Carmen Ibea, Amparo
Ibea-Fernandez, Henry Ruiz and Pastor Ruiz. Dolores is survived by Jesus Rimon, Cesaria Rimon
Gonzales and Remedios Rimon Cordero. Antipolo is survived by Manuel Villanueva, daughter
Teodora Villanueva-Francisco (Teodora), Camilo Francisco (Camilo), Adolfo Francisco (Adolfo),...
Lucimo Francisco, Jr. (Lucimo Jr.), Milagros Francisco, Celedonio Francisco, and Herminigildo
Francisco (Herminigildo). Pedro is survived by his wife, Elisa Tan Ining and Pedro Ining, Jr. Amando
died without issue. As for Jose, it is not clear from the records if he was made... party to the
proceedings, or if he is alive at all.
In short, herein petitioners, except for Ramon Tresvalles (Tresvalles) and Roberto Tajonera
(Tajonera), are Gregoria's grandchildren or spouses thereof (Gregoria's heirs).
acting on the claim that one-half of subject property belonged to him as Romana's surviving heir,
Leonardo filed with the Regional Trial Court (RTC) of Kalibo, Aklan... recovery of ownership and
possession, with... damages, against Gregoria's heirs.
Leonardo alleged that on several occasions, he demanded the partition of the property but Gregoria's
heirs refused to heed his demands... that portions of the property were sold to Tresvalles and
Tajonera, which portions must be collated and included as part of the... portion to be awarded to
Gregoria's heirs
Leonardo thus prayed that he be declared the owner of half of the subject property;... that the same
be partitioned after collation and determination of the portion to which he is entitled; that Gregoria's
heirs be ordered to execute the necessary documents or agreements
Teodora, Camilo, Adolfo, Lucimo Jr. and Herminigildo claimed that Leonardo had no cause of action
against them; that they have become the sole owners of the subject property through Lucimo Sr. who
acquired the same in... good faith by sale from Juan Enriquez (Enriquez), who in turn acquired the
same from Leon, and Leonardo was aware of this fact; that they were in continuous, actual, adverse,
notorious and exclusive possession of the property with a just title; that they have been paying the...
taxes on the property; that Leonardo's claim is barred by estoppel and laches
As agreed during pre-trial, the trial court commissioned Geodetic Engineer Rafael M. Escabarte to
identify the metes and bounds of the property.
the trial court rendered a Decision
Dismissing the complaint on the ground that plaintiffs' right of action has long prescribed under Article
1141 of the New Civil Code;
Declaring Lot 1786... to be the common property of the heirs of Gregoria Roldan Ining and by virtue
whereof, OCT No. RO-630 (24071) is ordered cancelled and the Register of Deeds of the Province of
Aklan is directed to issue a transfer certificate... of title to the heirs of Natividad Ining, one-fourth (1/4)
share; Heirs of Dolores Ining, one-fourth (1/4) share; Heirs of Antipolo Ining, one-fourth (1/4) share;
and Heirs of Pedro Ining, one-fourth (1/4) share.
trial court found... deeds of sale to be spurious. It concluded that Leon never sold the property to
Enriquez, and in turn, Enriquez never sold the property to Lucimo Sr., hence, the subject property
remained part of Leon's estate at the... time of his death in 1962. Leon's siblings, Romana and
Gregoria, thus inherited the subject property in equal shares. Leonardo and the respondents are
entitled to Romana's share as the latter's successors.
the trial court held that Leonardo had only 30 years from Leon's death in 1962 or up to 1992 within
which to file the partition case. Since Leonardo instituted the partition suit only in 1997, the same was
already barred by prescription
In addition, the trial court held that for his long inaction, Leonardo was... guilty of laches as well.
Consequently, the property should go to Gregoria's heirs exclusively.
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Only respondents interposed an appeal with the CA... the appeal questioned the propriety of the trial
court's dismissal of Civil Case No. 5275, its application of Article 1141, and the award of the property
to Gregoria's heirs exclusively.
this appeal is GRANTED
CA held that the trial court's declaration of nullity of the April 4, 1943 and November 25, 1943 deeds
of sale in favor of Enriquez and Lucimo Sr., respectively, became final and was settled by petitioners'
failure to appeal the same. Proceeding from the premise that no... valid prior disposition of the
property was made by its owner Leon and that the property which remained part of his estate at the
time of his death passed on by succession to his two siblings, Romana and Gregoria, which thus
makes the parties herein who are Romana's and
Gregoria's heirs co-owners of the property in equal shares, the appellate court held that only the
issues of prescription and laches were needed to be resolved.
CA declared that prescription began to run not from Leon's death in 1962, but from Lucimo Sr.'s
execution of the Affidavit of Ownership of Land in 1979,... which amounted to a repudiation of his co-
ownership of the property with Leonardo. Applying the fifth paragraph of Article 494 of the Civil Code,
which provides that "[n]o 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," the CA held that it
was only when Lucimo Sr. executed the Affidavit of Ownership of Land in 1979 and obtained a new
tax declaration over the property (TD 16414) solely in his name that a repudiation of his co-ownership
with
Leonardo was made, which repudiation effectively commenced the running of the 30-year prescriptive
period under Article 1141.
The CA did not consider Lucimo Sr.'s sole possession of the property for more than 30 years to the
exclusion of Leonardo and the respondents as a valid repudiation of the co-ownership either, stating
that his exclusive possession of the property and appropriation of its fruits... even his continuous
payment of the taxes thereon while adverse as against strangers, may not be deemed so as against
Leonardo in the absence of clear and conclusive evidence to the effect that the latter was ousted or
deprived of his rights as co-owner with the intention of... assuming exclusive ownership over the
property, and absent a showing that this was effectively made known to Leonardo.
CA granted respondents' prayer for partition, directing that the manner of partitioning the property
shall be governed by the Commissioner's Report and Sketch and the Supplementary Commissioner's
Report which the parties did not... contest.
Issues:
THE APPELLATE COURT COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING THE
DECISION OF THE TRIAL COURT ON THE GROUND THAT LUCIMO FRANCISCO REPUDIATED
THE CO-OWNERSHIP ONLY ON FEBRUARY 9, 1979.
THE APPELLATE COURT ERRED IN NOT UPHOLDING THE DECISION OF THE TRIAL COURT
DISMISSING THE COMPLAINT ON THE GROUND OF PRESCRIPTION AND LACHES
Ruling:
The Court denies the Petition.
The finding that Leon did not sell the property to Lucimo Sr. had long been settled and had become
final for failure of petitioners to appeal. Thus, the property remained part of Leon's estate.
The trial court, examining the two deeds of sale executed in favor of Enriquez and Lucimo Sr., found
them to be spurious. It then concluded that no such sale from
Leon to Lucimo Sr. ever took place. Despite this finding, petitioners did not appeal. Consequently, any
doubts regarding this matter should be considered settled. Thus, petitioners' insistence on Lucimo
Sr.'s 1943 purchase of the property to reinforce their claim over the... property must be ignored. Since
no transfer from Leon to Lucimo Sr. took place, the subject property clearly remained part of Leon's
estate upon his passing in 1962.
Leon died without issue; his heirs are his siblings Romana and Gregoria.
Since Leon died without issue, his heirs are his siblings, Romana and Gregoria, who thus inherited
the property in equal shares.
Gregoria's and Romana's heirs are co-owners of the subject property.
Thus, having succeeded to the property as heirs of Gregoria and Romana, petitioners and
respondents became co-owners thereof. As co-owners, they may use the property owned in common,
provided they do so in accordance with the purpose for which it is intended and in such a way as... not
to injure the interest of the co-ownership or prevent the other co-owners from using it according to
their rights.
For prescription to set in, the repudiation must be done by a co-owner.
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Time and again, it has been held that "a co-owner cannot acquire by prescription the share of the
other co-owners, absent any clear repudiation of the co-ownership. In order that the title may
prescribe in favor of a co-owner, the following requisites must concur: (1) the... co-owner has
performed unequivocal acts of repudiation amounting to an ouster of the other co-owners; (2) such
positive acts of repudiation have been made known to the other co-owners; and (3) the evidence
thereof is clear and convincing.
it is clear that the trial court erred in reckoning the prescriptive period within which Leonardo may seek
partition from the death of Leon in 1962. Article 1141 and Article 494 (fifth paragraph) provide that
prescription shall begin to run in... favor of a co-owner and against the other co-owners only from the
time he positively renounces the co-ownership and makes known his repudiation to the other co-
owners.
What escaped the trial and appellate courts' notice, however, is that while it may be argued that
Lucimo Sr. performed acts that may be characterized as a repudiation of the co-ownership, the fact is,
he is not a co-owner of the property. Indeed, he is not an heir of Gregoria;... he is merely Antipolo's
son-in-law, being married to Antipolo's daughter Teodora.
In point of law, therefore, Lucimo Sr. is not a co-owner of the property; Teodora is. Consequently, he
cannot validly effect a repudiation of the co-ownership, which he was never part of. For this reason,
prescription did not run adversely against Leonardo, and his right to seek... a partition of the property
has not been lost.
Leon remained the rightful owner of the land, and Lucimo Sr. knew this... very well, being married to
Teodora, daughter of Antipolo, a nephew of Leon. More significantly, the property, which is registered
under the Torrens system and covered by OCT RO-630, is in Leon's name. Leon's ownership ceased
only in 1962, upon his death when the property passed... on to his heirs by operation of law.
WHEREFORE, the Petition is DENIED.
Principles:
One who is merely related by affinity to the decedent does not inherit from the latter and cannot
become a co-owner of the decedent's property. Consequently, he cannot effect a repudiation of the
co-ownership of the estate that was formed among the... decedent's heirs.
Time and again, it has been held that "a co-owner cannot acquire by prescription the share of the
other co-owners, absent any clear repudiation of the co-ownership. In order that the title may
prescribe in favor of a co-owner, the following requisites must concur: (1) the... co-owner has
performed unequivocal acts of repudiation amounting to an ouster of the other co-owners; (2) such
positive acts of repudiation have been made known to the other co-owners; and (3) the evidence
thereof is clear and convincing.
…………………………………………………………………………………………….
Calalang vs Calalang 
G.R. No. 184148 | June 9, 2014 
Topic: Successional rights are vested only at the time of death; 
Facts: 

A Complaint for Annulment of Sale and Reconveyance of Property was filed with the RTC by the
respondents and asserted their ownership over a certain parcel of land against the petitioners.
According to the respondents, their father, Pedro Calalang contracted two marriages during his
lifetime. The petitioners argue that the disputed property belonged to the conjugal partnership of the
second marriage of Pedro Calalang which was issued to Pedro Calalang during the subsistence of the
second marriage. On the other hand, the respondents claim that the disputed property was
transferred by their maternal grandmother, Francisca Silverio, to their parents on the first marriage,
Pedro Calalang and Encarnacion Silverio, during the latter’s marriage. Thus, the respondents argue
that it belonged to the conjugal partnership of the first marriage of Pedro Calalang with Encarnacion
Silverio. 

The trial court rendered decision in favor of the respondents and held that when the first marriage was
dissolved, the corresponding shares to the disputed property were acquired by the heirs of the
decedent according to the laws of succession. Upon appeal from the CA, it reversed the factual
findings of the trial court and held that Pedro Calalang was the sole and exclusive owner of the
subject parcel of land, on the ground of insufficient evidence, to prove that the disputed property was
indeed jointly acquired from the parents of Encarnacion Silverio during the first marriage. 

Issue: 
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1. WON Pedro Calalang deprived his heirs of their respective shares over the disputed property when
he alienated the same. – NO 

Held: 

1. It is hornbook doctrine that successional rights are vested only at the time of death. Article 777 of
the New Civil Code provides that "[t]he rights to the succession are transmitted from the moment of
the death of the decedent." In Butte v. Manuel Uy and Sons, Inc., we proclaimed the fundamental
tenets of succession: 

The principle of transmission as of the time of the predecessor's death is basic in our Civil Code, and
is supported by other related articles. Thus, the capacity of the heir is determined as of the time the
decedent died (Art. 1034); the legitime is to be computed as of the same moment (Art. 908), and so is
the in officiousness of the donation inter vivas (Art. 771). Similarly, the legacies of credit and
remission are valid only in the amount due and outstanding at the death of the testator (Art. 935), and
the fruits accruing after that instant are deemed to pertain to the legatee (Art. 948). 

Thus, it is only upon the death of Pedro Calalang on December 27, 1989 that his heirs acquired their
respective inheritances, entitling them to their pro indiviso shares to his whole estate. At the time of
the sale of the disputed property, the rights to the succession were not yet bestowed upon the heirs of
Pedro Calalang. And absent clear and convincing evidence that the sale was fraudulent or not duly
supported by valuable consideration (in effect an in officious donation inter vivas), the respondents
have no right to question the sale of the disputed property on the ground that their father deprived
them of their respective shares. Well to remember, fraud must be established by clear and convincing
evidence. Mere preponderance of evidence is not even adequate to prove fraud. The Complaint for
Annulment of Sale and Reconveyance of Property must therefore be dismissed.

It is hornbook doctrine that successional rights are vested only at the time of death. Article 777 of the
New Civil Code provides that "[t]he rights to the succession are transmitted from the moment of the
death of the decedent." In Butte v. Manuel Uy and Sons, Inc., we proclaimed the fundamental tenets
of succession:
The principle of transmission as of the time of the predecessor's death is basic in our Civil Code, and
is supported by other related articles. Thus, the capacity of the heir is determined as of the time the
decedent died (Art. 1034); the legitime is to be computed as of the same moment (Art. 908), and so is
the in officiousness of the donation inter vivas (Art. 771). Similarly, the legacies of credit and
remission are valid only in the amount due and outstanding at the death of the testator (Art. 935), and
the fruits accruing after that instant are deemed to pertain to the legatee (Art. 948).
MANUEL TORRES v. VS.. MARGARITA LOPEZ, GR No. 24569, 1926-02-26
Facts:
Tomas Rodriguez  died... leaving a considerable estate
Shortly thereafter, Manuel Torres, one of the executors named in  the will, asked that  the will  of 
Rodriguez be... allowed.  Opposition was entered by  Margarita Lopez, the first cousin of the
deceased,  on the grounds: (1)  That the testator lacked mental capacity because at the time of the
execution of the supposed will he  was suffering from senile... dementia and  was under guardianship;
(2)  that undue influence had been exercised by the persons benefited in the document in 
conjunction  with others  who  acted in their behalf; and (3) that the signature of  Tomas Rodriguez to
the... document was obtained  through fraud and deceit.
After a prolonged  trial, judgment  was rendered denying the legalization of the will.
From  the  decision and judgment above-mentioned, the proponents have appealed.   Two errors are
specified, viz: (1)  The court below erred in holding  that at the time of signing his will, Tomas
Rodriguez did not possess the mental capacity... necessary to make the same; and  (2) the court
below erred in holding that the signatures of Tomas Rodriguez to  the  will were  obtained  through
fraudulent and deceitful representations, made by persons interested in the execution of said will
Tomas Rodriguez passed away in  the Philippine General Hospital, as we have said, on February 25,
1924.  But . even  prior to his  demise,  the  two factions in the Lopez family had prepared themselves
for a fight over the estate.
As to the mental state of Tomas Rodriguez on January 3, 1924,  Doctors  Calderon, Domingo,  and
Herrera  admit that he was  senile.
certify that the  intellectual faculties of the patient are "sound, except that  his memory is weak,"  and
that  in executing the will the "testator had full understanding of the act he was performing,... and full
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knowledge of the contents thereof,... The  will was attacked on the further ground of undue influence
exercised  by the persons benefited in the will in collaboration with others.  The trial judge found this
allegation  to  have been established and made it one of the bases of his... decision.  It is now for us
to say if the facts justify this finding.
Issues:
Did Tomas Rodriguez on January 3, 1924, possess sufficient mentality to make a   will which would
meet the legal test regarding testamentary capacity, and... have the proponents of the will carried
successfully  the burden of proof and shown him to be of sound mind on that date?
Ruling:
Two of the subscribing witnesses to the will, one a physician, testified  clearly to the regular manner in
which the will  was executed and to... the testator's mental condition.  The other subscribing witness,
also a  physician,  on the contrary testified to a fact which, if substantiated, would require the court to
disallow the will.  The attending physician and three other eminent members of the... medical
fraternity, who  were present at the execution of the will, expressed opinions entirely favorable to the
capacity of the testator.  As against this we have the professional speculations  of  three other  equally
eminent members of the medical... profession who, however, were not included among those present
when the will was executed.  The advantage on  these facts is all  with those who  offer  the will for
probate.
he judgment of the trial  court  will be set aside and the will of Tomas Rodriguez  y Lopez will be
admitted to probate, without special pronouncement as to costs in this instance.
Principles:
Law. The  Code of Civil Procedure prescribes as a requisite to the allowance of a will that the testator
be of "sound mind"  (Code of Civil Procedure, sec. 614).  A "sound mind" is  a "disposing mind."  One
of the grounds for disallowing a... will  is "If the testator  was insane or otherwise mentally incapable
of  the execution of such an instrument at the time of its execution."   (Code of Civil Procedure, sec.
634 [2].)
B. Law. One of the grounds for disallowing a will is that it was procured by undue and improper
pressure and influence on the part of the  beneficiary or some other person for his benefit (Code of 
Civil Procedure, sec. 634[4]).
……………………………………………………………………………………………….
Danilo ALUAD, et al., petitioners vs. Zenaido ALUAD, respondent
G.R. No. 176943, October 17, 2008

Petitioner’s mother, Maria Aluad and respondent Zenaido Aluad were raised by the childless spouses
Matilde and Crispin Aluad. Crispin was the owner of six lots of Pilar Cadastre, Capiz. After his death,
Matilde adjudicated the lots to herself and thereafter, she executed a Deed of Donation of Real
Property Inter Vivos in favor of Maria covering all the six lots. The Deed provided that such will
become effective upon the death of the Donor, but in the event that the Donee should die before the
Donor, the present donation shall be deemed rescinded. Provided, however, that anytime during the
lifetime of the Donor or anyone of them who should survive, they could use, encumber or even
dispose of any or even all of the parcels of the land.
Matilde sold one of the lots to Zenaido and subsequently, Matilde executed a last will and testament
devising four (4) of the lots to Maria and the remaining lot to Zenaido. Maria died a few months after
Matilde’s death. Thereafter, Maria’s heirs (herein petitioners) filed before the RTC a complaint for
declaration and recovery of ownership and possession of the two lots conveyed and donated to
Zenaido, alleging that no rights have been transmitted to the latter because such lots have been
previously alienated to them to Maria via the Deed of Donation. The lower court decided in favor of
the petitioners however, CA reversed said decision upon appeal of Zenaido which held that the Deed
of Donation was actually a donation mortis causa, not inter vivos and as such it had to, but did not,
comply with the formalities of a will. Due to the denial of the petitioner’s Motion for Reconsideration,
the present Petition for Review has been filed.
Whether or not the Deed of Donation is donation inter vivos and whether or not such deed is valid.
If so, whether or not Matilde Aluad has the right to convey the lots in question to Zenaido Aluad.
The Court finds the donation to Maria Aluad (petitioner’s mother) one of mortis causa, it having the
following characteristics:
It conveys no title or ownership to the transferee before the death of the transferor, or what amounts
to the same thing, that the transferor should retain the ownership (full or naked) and control of the
property while alive;
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That before the death of the transferor, the transfer should be revocable, by the transferor at will, ad
nutum, but revocability may be provided for indirectly by means of a reserved power in the donor to
dispose of the properties conveyed; and
That the transfer should be void of the transferor should survive the transferee.
The phrase in the earlier-qouted Deed of Donation “to become effective upon the death of the
DONOR” admits of no other interpretation than to mean that Matilde did not intend to transfer the
ownership of the six lots to petitioner’s mother during the former’s lifetime. Further the statement,
“anytime during the lifetime of the DONOR or anyone of them who should survive, they could use,
encumber or even dispose of any or even all the parcels of land herein donated,” means that Matilde
retained ownership of the lots and reserved in her the right to dispose them. For the right to dispose of
a thing without other limitations than those established by law is an attribute of ownership. The
phrase, “anyone of them who should survive” is out of sync. For the Deed of Donation clearly stated
that it would take effect upon the death of the donor, hence, said phrase could only have referred to
the donor.
The donation being then mortis causa, the formalities of a will should have been observed but they
were not, as it was witnessed by only two, not three or more witnesses following Article 805 of the
Civil Code. It is void and transmitted no right to petitioner’s mother. But even assuming arguendo that
the formalities were observed, since it was not probated, no right to the two lots was transmitted to
Maria. Matilde thus validly disposed the lot to Zenaido by her last will and testament, subject to the
qualification that her will must be probated. With respect to the conveyed lot, the same had been
validly sold by Matilde to Zenaido.

DEL CASTILLO, J.:

This Petition for Review on Certiorari[1] assails the March 13, 2012 Decision[2] and June 18, 2012
Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 82774, which respectively reversed the
March 12, 2004 Order[4] of the Quezon City Regional Trial Court, Branch 224 (RTC) in Civil Case No.
Q-93-16621 and denied herein petitioner' Motion for Reconsideration. [5]

Factual Antecedents

Spouses Juan and herein petitioner Conchita Gloria (Conchita) are registered owners of a parcel of
land located in Kamuning, Quezon City covered by Transfer Certificate of Title No. 35814 (TCT
35814).[6]  Petitioner Maria Lourdes Gloria-Payduan (Lourdes) is their daughter. [7]

On August 14, 1987, Juan passed away. [8]

On December 7, 1993, Conchita and Lourdes filed before the RTC a Second Amended
Complaint[9] against respondent Builders Savings and Loan Association, Inc. (Builders Savings),
Benildo Biag (Biag), and Manuel F. Lorenzo for "declaration of null and void real estate mortgage,
promissory note, cancellation of notation in the transfer certificate of title, and damages" [10] with prayer
for injunctive relief. The case was docketed as Civil Case No. Q-93-16621. Petitioners claimed that
Biag duped them into surrendering TCT 35814 to him under the pretense that Biag would verify the
title, which he claimed might have been fraudulently transferred to another on account of a fire that
gutted the Quezon City Registry of Deeds; that Biag claimed that the title might need to be
reconstituted; that Biag instead used the title to mortgage the Kamuning property to respondent
Builders Savings; that Conchita was fraudulently made to sign the subject loan and mortgage
documents by Biag, who deceived Conchita into believing that it was actually Lourdes who requested
that these documents be signed; that the subject Mortgage [11] and Promissory Note[12] contained the
signature not only of Conchita, but of Juan, who was by then already long deceased, as mortgagor
and co-maker; that at the time the loan and mortgage documents were supposedly executed,
Conchita was already sickly and senile, and could no longer leave her house; that Biag and Builders
Savings conspired in the execution of the forged loan and mortgage documents, that the forged loan
and mortgage documents were not signed/affirmed before a notary public; that on account of Biag
and Builders Savings' collusion, the subject property was foreclosed and sold at auction to the latter;
and that the loan and mortgage documents, as well as the foreclosure and sale proceedings, were
null and void and should he annulled. Petitioners thus prayed that the Mortgage and Promissory Note
be declared null and void; that the encumbrances/annotations in the subject title be cancelled; that the
certificate of title be returned to them; and that they be awarded P500,000.00 moral damages,
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P50,000.00 exemplary damages, P20,000.00 actual damages, P20,000.00 attorney's fees and other
legal expenses, and costs of suit.

On the other hand, Builders Savings claimed that –

x x x Lourdes Payduan had neither the capacity to sue nor the authority and interest to file the case  a
quo. She was merely an "ampon" or "palaki" of the Spouses Juan and Conchita Gloria and was not
legally adopted by them. Moreover, Conchita neither signed the verification attached to the complaint
nor executed a special power of attorney to authorize her daughter Maria Lourdes to pursue the
case a quo. Further, Conchita never appeared in court to testify during trial. BLSA presented its Credit
Investigator Danilo Reyes who testified that he personally met Spouses Juan and Conchita Gloria,
Maria Lourdes and her husband, and Benildo Biag when they went to their office to apply for a loan.
He also saw the identification card presented by Juan to verify and confirm his identity. Likewise,
Conchita was a retired public school teacher who could not be cajoled by Benildo to execute a real
estate mortgage on her property against her will. In the same vein, the fact that Conchita submitted
floor plans of her house and its tax declarations only signified that she voluntarily mortgaged her
property.[13]

Ruling of the Regional Trial Court

On September 26, 2003, the RTC issued its Decision in Civil Case No. Q-93-16621 dismissing
petitioners' complaint for lack of merit. The counterclaims and crossclaims were likewise dismissed.

Petitioners moved to reconsider.

On March 12, 2004, the RTC issued its Order granting petitioners' motion for reconsideration. The trial
court held:

When plaintiff Marides Gloria Payduan testified, she told the Court that Benildo Biag was introduced
to her by her husband for the purpose or reconstituting TCT No. 35814 because it was one of those
burned. Benildo Biag told them that he [knows] of someone who could help them reconstitute the title.
This happened sometime [in] June of 1988. So, they gave him the original copy of the title on June 26
at their residence at 161 K-3rd Street, Kamuning, Quezon City. Mr. Benildo Biag promised to return
the title to them, but failed to [do so] until they knew that it has already been mortgaged. (TSN April
25, 1997, pp. 21 to 26).

x x x x

[Thus, when p]laintiff Conchita Gloria x x x signed the promissory note and the real estate mortgage[,
she] was not acting freely and with all her faculties functioning. She signed the papers given to her by
Benildo Biag under the thought that this will be used in the reconstitution of her original certificate of
title but it turned out however that Benildo Biag used them to secure the loan proceeds from the
defendant Builders.

Under Article 1330 of the Civil Code, a contract where consent is given through mistake, violence,
intimidation, undue influence or fraud is voidable.

x x x x

Under the circumstances, defendant Builders should have exerted extra diligence before it approved
the loan application of Benildo Biag and had it [exerted] extra effort in investigating the factual
circumstances of the loan application, it could have discovered that plaintiff Conchita Gloria's
signature in the promissory note x x x and the deed of real estate mortgage x x x were not authorized
and that her husband Juan Gloria had died x x x before the filing of the loan application. These are
factual milieu which militates against Builders. As held in Gatioan vs. Gaffud (27 SCRA 706), before a
bank grants a loan on the security of land, it must undertake a careful examination of the title of the
applicant as well as a physical and on the spot investigation of the land offered as a security. There is
8 wills

a dearth of proof in the Builders evidence that it has investigated the person of plaintiff Conchita
Gloria and the land offered as a collateral.

The case of Rural Bank of Caloocan City vs. CA (104 SCRA 151) is also four square. It was held
therein that 'A contract may be annulled on the ground of vitiated consent, if deceit by a third person,
even without connivance or complicity with one of the contracting parties, resulted in mutual error on
the part of the parties to the contract. x x x The possibility of her not knowing that she signed the
promissory note as co-maker x x x, and that her property was mortgaged to secure the x x x loans, in
view of her personal circumstances - ignorance, lack of education and old age - should have placed
the Bank on prudent inquiry to protect its interest and that of the public it serves. With the recent
occurrence of events that have supposedly affected adversely our banking system, attributable to
laxity in the conduct of bank business by its bank officials, the need [for] extreme caution and
prudence by said officials and employees in the discharge of their functions cannot be
overemphasized.'

Art. 2085 of the Civil Code, is also appropriate. It provides that:

x x x x

3. The mortgagor should have the free disposal of the property mortgaged and in the absence thereof,
he should be authorized for the purpose.

Thus, it is settled that if a forger mortgages another's property, the mortgage is void. (De Lara vs.
Ayroso, 95 Phil. 185)

x x x x

Similarly, in Parqui vs. PNB (96 Phil. 157), the Court said, there can be no question that the mortgage
under consideration is a nullity the same having been executed by an impostor without the authority of
the owner of the interest mortgaged. Its registration under the Land Registration Law lends no validity
because, according to the last proviso to the second paragraph of Section 55 of that law, registration
procured by the presentation of a forged deed is null and void.'

The evidence extant in the records being preponderant to establish the negligence of Builders, the
Court next looks at plaintiffs' claim tor damages. x x x

x x x x

Under Article 2217 of the New Civil Code, moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary estimation, moral damages may be recovered if they are
the proximate result of the defendant's wrongful act or omission. An amount of P200,000.00 to answer
for her sufferings, anguish and fright appears to be reasonable and fair.

On the other hand, the Court has to deny plaintiffs' prayer for actual damages since plaintiffs failed to
substantiate the same, either by testimonial or documentary evidence. It is a basic rule that one is
entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly
proved. (Art. 2219, NCC). x x x

The Court likewise finds it proper to award an attorney's fees in the amount of P20,000.00 in favor of
the plaintiffs as they were compelled to litigate the instant case through their counsel. x x x

x x x x

Accordingly, therefore, the decision of the Court dated September 26, 2003 is hereby reconsidered
and set aside and a new one is entered in favor of the plaintiff[s] and as against the defendant:

a) declaring the real estate mortgage dated June 26, 2001 and the promissory note dated June 28,
2001 null and void;
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b) directing the cancellation of the annotations in the TCT No. 35814 of Conchita Gloria;

c) directing the defendant Builders Savings and Loan Association, Inc. to return to plaintiffs TCT No.
35814 of the Registry of Deeds of Quezon City free from all liens and encumbrances;

d) directing the defendant Builders to pay plaintiffs moral damages in the amount of P200,000.00; and

e) directing the defendant Builders to pay plaintiffs attorney's fees in the amount of P20,000.00.

SO ORDERED.[14]

Ruling of the Court of Appeals

Respondent interposed an appeal before the CA. On March 13, 2012, the CA issued the assailed
Decision, decreeing as follows:

In fine, BSLA asserts that x x x Conchita voluntarily executed the real estate mortgage who submitted
supporting documents to secure the loan of Benildo Biag. The testimony of Maria Lourdes assailing
the contract was merely hearsay and could not be used as evidence and basis for the nullification of
the contract.

x x x x

The appeal is impressed with merit.

x x x x

Here, after a careful perusal of the records, this Court finds that there are procedural infirmities that
warrant the dismissal of the complaint a quo.

First,  the complaint sought for the nullification of real estate mortgage contract and promissory note
executed by Conchita to secure the loan of Benildo with BSLA on the ground that Conchita's
signature was obtained through fraud, without her full knowledge of the import of her act.

The parties to a contract are the real parties in interest in an action upon it. Thus, Rule 3 of the Rules
of Court defines a real party in interest, thus:

Sec. 2. Parties in interest. - A real party in interest is the party who stands to be benefited or injured
by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized
by law or these Rules, every action must be prosecuted or defended in the name of the real party in
interest.
The aforestated provision has two (2) requirements: 1) to institute an action, the plaintiff must be the
real party in interest, and 2) the action must be prosecuted in the name of the real party in interest. x x
x When the plaintiff is not the real party in interest, the case is dismissible on the ground of lack of
cause of action. Accordingly, only the contracting parties are bound by the stipulations in the contract
since they are the ones who would benefit from and could violate it. Hence, one who is not a party
thereto, and for whose benefit it was not expressly made, cannot maintain an action on it. x x x In the
case at bar, the real party in interest was Conchita being the person who executed the real estate
mortgage contract. It was she who would stand to suffer by the fulfillment of its terms because she
obligated herself as a mortgagor who would answer to BSLA upon the default of Benildo.

On the other hand, Maria Lourdes claimed that she is a real party in interest because she is a co-
owner of the property for having inherited a portion thereof from her deceased father, Juan.

We are not persuaded.

When an alleged heir [sues] to nullify a document which would impair her interest as such heir, her
10 wills

successional rights must first be determined in a special proceeding. x x x

x x x x

Thus, in order that Maria Lourdes be clothed with personality to institute the complaint a quo, she
must show that she has a real interest which would suffer any detriment by its performance or
annulment. This she must do only after establishing that she is a legal heirs of Juan and that she
inherited the property subject of the mortgage and accordingly, a co-owner thereof This, however,
Maria failed to do. Nothing in the records appear that a judicial or extrajudicial partition was made by
Juan's heirs. Neither does it appear that the only property left by Juan is the same property subject of
the mortgage. Further, Maria Lourdes did not present any evidence to establish her rights as heir or
prove that Juan had no other heirs who are not parties in this case. Apparently, there is yet a need to
first determine Maria Lourdes' rights through a special proceeding. Clearly, then, Maria Lourdes could
not be considered a real party in interest to institute the action in the court a quo to nullify the real
estate mortgage executed by Conchita absent any proof to show that she has an interest over the
subject property.

On this note, this brings us to the second point in issue. A careful perusal of the record shows that
plaintiffs-appellees' Second Amended Complaint appears to have been accompanied with a defective
verification which was signed by Maria Lourdes only and not Conchita, with no reasonable justification
for the omission whatsoever. It was likewise not accompanied by a certification against non-forum
shopping [sic] with no justification presented by plaintiffs-appellees. x x x

x x x x

It is true that defect in the verification will not render the pleading fatally detective. This, however,
does not hold true for a certification against forum shopping which must be signed by all the plaintiffs.
Failure to do so will result to the dropping of the parties who did not sign. Here, the failure of Conchita
to sign the certification against non-forum shopping [sic], not once, but thrice, [in]
the Complaint,  Amended Complaint, and Second Amended Complaint,  would result to dropping her
from the case as plaintiff therein. She was not able to provide any justification for this omission to
warrant the relaxation of the rules. Moreover, Conchita and Maria Lourdes do not hold a common
interest because Conchita was the party who executed the real estate mortgage contract and the
registered owner of the subject property, while as above-discussed, Maria Lourdes's interest was not
established.

Assuming arguendo that Conchita will not be dropped as party to the case, the evidence presented by
plaintiffs-appellees are not sufficient to support the grant of their complaint. The allegations of fraud
were established only through the testimony of Maria Lourdes who had no personal knowledge of the
circumstances that would constitute the fraud allegedly committed by BSLA. She merely relied on the
statement made by Conchita that she was misled into signing the contract making her believe that it
was for the reconstitution of her title with the Register of Deeds. Thus, Maria Lourdes' statement has
no probative value absent any showing that the evidence falls within the exception to the hearsay
evidence rule.

Based on the foregoing, this Court is constrained to dismiss plaintiffs-appellees' complaint.

WHEREFORE, the Order dated March 12, 2004 of the Regional Trial Court (RTC), National Capital
Judicial Region, Branch 224, Quezon City, in Civil Case No. Q-93-16621, entitled "Conchita Gloria, et
al., Plaintiffs, versus Builders Savings and Loan Association Inc., et al., Defendants, is REVERSED
AND SET ASIDE. The Second Amended Complaint dated December 3, 1993 filed by plaintiffs-
appellees Conchita Gloria and Maria Lourdes Payduan is DISMISSED.

SO ORDERED.[15]

Petitioners moved to reconsider, but in a June 18, 2012 Resolution, the CA held its ground. Hence,
the present Petition.
11 wills

Issues

Petitioners submit the following issues to be resolved:

1. WHETHER x x x PETITIONER MARIA LOURDES GLORIA-PAYDUAN AS CO-OWNER OF

SUBJECT REAL PROPERTY, IS A REAL PARTY IN INTEREST IN THIS CASE.

2. WHETHER x x x IT IS APPROPRIATE FOR THE APPELLATE COURT TO PASS UPON ISSUE

NOT RAISED BY APPELLANT IN ITS APPELLANT'S BRIEF'S ASSIGNMENT OF ERRORS. [16]

Petitioners' Arguments

Petitioners contend that Lourdes had proved that she was the daughter of Conchita and Juan; that the
subject property was conjugal property belonging to both Juan and Conchita; that when Juan died in
1987, Lourdes became a co-owner of the subject property by virtue of her being a compulsory heir of
Juan; that as co-owner of the subject property, she has the required interest to prosecute Civil Case
No. Q-93-16621; that the CA erred in declaring that Lourdes must first obtain a declaration of heirship,
since Article 777 of the Civil Code specifically provides that successional rights are transmitted from
the decedent to his/her heirs from the moment of death of the former; that even if there were no
pending settlement proceedings for the distribution of a decedent's estate, there was no need for a
prior declaration of heirship before the heirs may commence an action arising from any right of the
deceased, such as the right to bring an action to annul a sale; [17] that the issue of lack or improper
verification was never raised by the respondent at any stage of the proceedings, yet the CA unduly
took cognizance thereof that even if Conchita failed to sign the amended complaint, this could not
affect the same since both she and Lourdes shared a common interest in the subject property as co-
owners thereof; and that the subject real estate mortgage and promissory note were null void for
being simulated, since they were supposedly signed and executed by Juan in 1991, when he actually
passed away in 1987.

Petitioners pray that the CA dispositions be annulled and in lieu thereof, the RTC's March 12, 2004
Order be reinstated.

Respondent's Arguments

Respondent, on the other hand, failed to comment on the Petition despite repeated directives from the
Court.

Our Ruling

The Petition is granted.

The evidence reveals that Lourdes is the daughter of Juan and Conchita. There is on record a
Certification of Birth[18] issued by the Lipa City Office of the Local Civil Registrar indicating that
Lourdes was born to Juan and Conchita; this document was marked as Exhibit "H" during the
proceedings below, and remains uncontested. Moreover, Lourdes categorically testified during trial
that she was the natural child of Juan and Conchita, thus:

CROSS-EXAMINATION
 
ATTY. Ms. Marides Gloria, you claimed to be the daughter of Conchita Gloria, one of
-
TAMPOC the plaintiffs in this case?
A - Yes, sir.
You are, however, claiming only to be the adopted daughter of plaintiff
Q -
Conchita Gloria, correct?
12 wills

A No, sir, I am the true daughter, sir.

   
COURT - Tunay na anak?
A - I was the daughter, Your Honor.
Q - Being a daughter she is a compulsory heir, Atty. Tampo.
 
xxxx  
   
COURT - Ano ka ba, tunay na anak o adopted ka lang?
A I am a true daughter, Your Honor. In fact, I have a birth  certificate.[19]

Being the daughter of the deceased Juan and Conchita, Lourdes has an interest in the subject
property as heir to Juan and co-owner with Conchita. The fact that she was not judicially declared as
heir is of no moment, for, as correctly argued by petitioners, there was no need for a prior declaration
of heirship before heirs may commence an action arising from any right of their predecessor, such as
one for annulment of mortgage. "[N]o judicial declaration of heirship is necessary in order that an heir
may assert his or her right to the property of the deceased." [20]

x x x. A prior settlement of the estate is not essential before the heirs can commence any action
originally pertaining to the deceased as we explained in Quison v. Salud –

Claro Quison died in 1902. It was proven at the trial that the present plaintiffs are next of kin and heirs,
but it is said by the appellants that they [were] not entitled to maintain this action because there [was]
no evidence that any proceedings [had] been taken in court for the settlement of the estate of Claro
Quison; and that without such settlement, the heirs cannot maintain this action. There is nothing in
this point. [Under] the Civil Code [and/or] Code of Civil Procedure, the title to the property owned by a
person who dies intestate passes at once to his heirs. Such transmission is, under the present law,
subject to the claims of administration and the property may be taken from the heirs for the purpose of
paying debts and expenses, but this does not prevent an immediate passage of the title, upon the
death of the intestate, from himself to his heirs. Without some showing that a judicial administrator
had been appointed in proceedings to settle the estate of Claro Quison, the right of the plaintiffs to
maintain this action is established.

Conformably with the foregoing and taken in conjunction with Arts. 777 and 494 of the Civil Code,
from the death of Lourdes Sampayo her rights as a co-owner, incidental to which is the light to ask for
partition at any time or to terminate the co-ownership, were transmitted to her rightful heirs. In so
demanding partition private respondents merely exercised the right originally pertaining to the
decedent, their predecessor-in-interest.[21] (Citations omitted)

As regards the supposed defective verification occasioned by Conchita's failure to sign the amended
complaint with its concomitant verification and certification against forum shopping the Court has
repeatedly held that in a case involving co-owners of property where said property is the subject
matter of the suit, the failure of the other co-owners to sign the verification and certification against
forum shopping is not fatal, as the signing by only one or some of them constitutes substantial
compliance with the rule.

Finally, we find no merit in respondents' argument that the present petition should be dismissed for
failure of the other co-heirs/co-petitioners to sign the verification and certification against forum-
shopping as required by Sections 4 and 5, Rule 7 of the 1997 Rules of Civil Procedure.

In the case of Iglesia  Ni Cristo  v. Judge  Ponferrada  we expounded on the purpose and sufficiency
of compliance with the verification and certification against forum shopping requirements, viz.:
13 wills

The issue in the present case is not the lack of verification but the sufficiency of one executed by only
one of [the] plaintiffs. This Court held in Ateneo de  Naga University v. Manalo,  that the verification
requirement is deemed substantially complied with when, as in the present case, only one of the
heirs-plaintiffs, who has sufficient knowledge and belief to swear to the truth of the allegations in the
petition (complaint), signed the verification attached to it. Such verification is deemed sufficient
assurance that the matters alleged in the petition have been made in good faith or are true and
correct, not merely speculative.

The same liberality should likewise be applied to the certification against forum shopping. The general
rule is that the certification must be signed by all plaintiffs in a case and the signature of only one of
them is insufficient. However, the Court has also stressed in a number of cases that the rules on
forum shopping were designed to promote and facilitate the orderly administration of justice and thus
should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate
objective. The rule of substantial compliance may be availed of with respect to the contents of the
certification. This is because the requirement of strict compliance with the provisions merely
underscores its mandatory nature in that the certification cannot be altogether dispensed with or its
requirements completely disregarded.

The substantial compliance rule has been applied by this Court in a number of cases: Cavile v. Heirs
of Cavile, where the Court sustained the validity of the certification signed by only one of petitioners
because he is a relative of the other petitioner and co-owner of the properties in dispute; Heirs of
Agapito T. Olarte v. Office of the President of the Philippines, where the Court allowed a certification
signed by only two petitioners because the case involved a family home in which all the petitioners
shared a common interest; Gudoy v.  Guadalquiver, where the Court considered as valid the
certification signed by only four of the nine petitioner because all petitioners filed as co-owners pro
indiviso a complaint against respondents for quieting of title and damages, as such, they all have joint
interest in the undivided whole; and Dar v. Alonzo-Legasto,  where the Court sustained the
certification signed by only one of the spouses as they were sued jointly involving a property in which
they had a common interest.

It is noteworthy that in all of the above cases, the Court applied the rule on substantial compliance
because of the commonality of interest of all the parties with respect to the subject of the controversy.
[22]
 (Citations omitted)

"As such co-owners, each of the heirs may properly bring an action for ejectment, forcible entry and
detainer, or any kind of action for the recovery of possession of the subject properties. Thus, a co-
owner may bring such an action, even without joining all the other co-owners as co-plaintiffs, because
the suit is deemed to be instituted for the benefit of all." [23]

Finally, the Court finds the trial court to be correct in issuing the March 12, 2004 Order granting
petitioners' motion for reconsideration and declaring the mortgage and promissory note as null and
void. The evidence indicates that these documents were indeed simulated; as far as petitioners were
concerned, they merely entrusted the title to the subject property to Biag for the purpose of
reconstituting the same as he claimed that the title on file with the Registrar of Deeds of Quezon City
may have been lost by fire. Petitioners did not intend for Biag to mortgage the subject property in
1991 to secure a loan; yet the latter, without petitioners' knowledge and consent, proceeded to do just
that, and in the process, he falsified the loan and mortgage documents and the accompanying
promissory note by securing Conchita's signatures thereon through fraud and misrepresentation and
taking advantage of her advanced age and naivete and forged Juan's signature and made it appear
that the latter was still alive at the time, when in truth and in fact, he had passed away in 1987. A
Certificate of Death[24] issue d by the Quezon City Local Civil Registrar and marked as Exhibit "D" and
admitted by the trial court proves this fact. Under the Civil Code,

Art. 1346. An absolutely simulated or fictitious contract is void. x x x

Art. 1409. The following contracts are in existent and void from the beginning:

(1) x x x;
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(2) Those which are absolutely simulated or fictitious;

In the case of Spouses Solivel v. Judge Francisco,[25] the Court made the following pronouncement:

x x x Thus, in Ayroso,  this Court annulled a mortgage executed by an impostor who had
unauthorizedly gained possession of the certificate of title thru the owner's daughter and forged said
owner's name to the deed of mortgage which was subsequently registered. In so doing, the Court
found more applicable the case of Ch. Veloso vs. La Urbana and Del Mar,  which also voided a
mortgage of real property owned by plaintiff Veloso constituted by her brother-in-law, the defendant
Del Mar, using two powers-of-attorney to which he had forged the signatures of said plaintiff and her
husband, and which mortgage was later registered with the aid of the certificate of title that had come
into Del Mar's possession by unknown means. x x x

Even more in point and decisive or the issue here raised, however, is the much later case of Joaquin
vs. Madrid,  where the spouses Abundio Madrid and Rosalinda Yu, owners of a residential lot in
Makati, seeking a building construction loan from the then Rehabilitation Finance Corporation,
entrusted their certificate of title for surrender to the RFC to Rosalinda's godmother, a certain
Carmencita de Jesus, who had offered to expedite the approval of the loan. Later having obtained a
loan from another source, the spouses decided to withdraw the application they had filed with the
RFC and asked Carmencita to retrieve their title and return it to them. Carmencita failed to do so,
giving the excuse that the employee in charge of keeping the title was on leave. It turned out,
however, that through the machinations of Carmencita, the property had been mortgaged to
Constancio Joaquin in a deed signed by two persons posing as the owners and that after said deed
had been registered, the amount for which the mortgage was constituted had been given to the
person who had passed herself off as Rosalinda Yu. x x x (Citations omitted)

As a consequence of Biag's fraud and forgery of the loan and mortgage documents, the same were
rendered null and void. This proceeds from the fact that Biag was not the Owner of the subject
property and may not thus validly mortgage it, as well as the well-entrenched rule that a forged or
fraudulent deed is a nullity and conveys no title.  "In a real estate mortgage contract, it is essential that
the mortgagor be the absolute owner of the property to be mortgaged; otherwise, the mortgage is
void."[26] And "when the instrument presented for registration is forged, even if accompanied by the
owner's duplicate certificate of title, the registered owner does not thereby lose his title, and neither
does the mortgagee acquire any right or title to the property. In such a case, the mortgagee under the
forged instrument is not a mortgagee protected by Law." [27] Lastly, when "the person applying for the
loan is other than the registered owner of the real property being mortgaged[,it] should have already
raised a red flag and x x x should have induced the [mortgagee] to make inquiries into and confirm
[the authority of the mortgagor]."[28]

WHEREFORE, the Petition is GRANTED. The assailed March 13, 2012 Decision and June 18, 2012
Resolution of the Court of Appeals in CA-G.R. CV No. 82774 are ANNULLED and SET ASIDE. The
March 12, 2004 Order of the Quezon City Regional Trial Court Branch 224 in Civil Case No. Q-93-
16621 is REINSTATED.