Jarantilla v. Jarantilla
REITERATIONFacts
The Antecedents: The spouses Andres Jarantilla and Felisa Jaleco were survived by eight children. Petitioner Federico Jarantilla, Jr. is the grandson of the Jarantilla spouses. In 1948, the Jarantilla heirs extrajudicially partitioned their parents' real properties. The spouses Rosita Jarantilla and Vivencio Deocampo entered into a business agreement with spouses Buenaventura Remotigue and Conchita Jarantilla, which led to the establishment of manufacturing and trading businesses. This partnership ended in 1973. In 1957, Buenaventura and Conchita Remotigue executed an "Acknowledgement of Participating Capital" stating that while businesses like Manila Athletic Supply and Remotigue Trading were registered in Buenaventura's name, they were not the sole owners. The document listed participating capital as of 1952, including Antonieta Jarantilla's ₱8,000.00 and Federico Jarantilla, Jr.'s ₱5,000.00. Procedural History: Antonieta Jarantilla filed an amended complaint against Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr., Doroteo Jarantilla, and Tomas Jarantilla, seeking an accounting, partition, and delivery of her 8% share in the co-ownership, plus damages. She claimed a partnership was formed in 1946, with initial contributions from inheritance and her subsequent investments from farm proceeds. She also alleged co-ownership of certain real properties acquired by defendants using partnership funds. The defendants denied forming a partnership in 1946, stating Antonieta was still in school and her inheritance was used for her studies. They admitted the "Acknowledgement of Participating Capital" but limited Antonieta's share to the businesses enumerated therein. During trial, petitioner Federico Jarantilla, Jr. entered into a compromise agreement with Antonieta, supporting her claims and asserting his own entitlement to a 6% share. The Regional Trial Court (RTC) ruled in favor of Antonieta, ordering the delivery of her 8% share in specific real properties and businesses, and an accounting. Both petitioner and respondents appealed. The Court of Appeals (CA) set aside the RTC's decision, ruling that Antonieta's 8% share was limited to the businesses enumerated in the "Acknowledgement of Participating Capital." The CA also granted Federico Jarantilla, Jr. his 6% share in the same enterprises. Respondents' motion for partial reconsideration was denied. Antonieta Jarantilla's own petition for review was dismissed by the Supreme Court for failure to file within the reglementary period. The Petition: Petitioner Federico Jarantilla, Jr. filed a petition for review on certiorari with the Supreme Court, asserting that the CA erred in not ruling that he is entitled to a 6% share of the ownership of real properties acquired by the other defendants using common funds from the businesses where he had such a share. He claimed a partnership existed, evidenced by the "Acknowledgement of Participating Capital," and that several corporations and real properties were acquired from this partnership.
Issue(s)
Whether the petitioner is entitled to a share in the real properties acquired by the respondents, allegedly using common funds from the partnership. Whether the "Acknowledgement of Participating Capital" extends to real properties not explicitly enumerated therein. Whether the petitioner's claim over the subject real properties constitutes a collateral attack on the respondents' certificates of title.
Ruling
The petition is denied, and the Decision of the Court of Appeals is affirmed. The petitioner is entitled to his 6% share only in the assets and profits of the businesses explicitly enumerated in the "Acknowledgement of Participating Capital." He is not entitled to a share in the real properties acquired by the respondents, as there was insufficient proof that these properties were funded by the partnership, and asserting such a claim would constitute a collateral attack on the respondents' titles.
Ratio Decidendi
On the petitioner's entitlement to a share in the real properties: The Court held that the petitioner's claim over the subject real properties was not substantiated. While the "Acknowledgement of Participating Capital" indicated participating capital in specific businesses, it did not establish that these businesses funded the acquisition of the real properties in question. The petitioner failed to prove, with clear and satisfactory evidence, that the respondents used partnership funds, particularly his share, to purchase these properties. His assertions of trust were also unsubstantiated by trustworthy evidence, resting only on bare allegations and self-serving testimonies. On the scope of the "Acknowledgement of Participating Capital": The Court affirmed the Court of Appeals' ruling that the petitioner's share, as well as Antonieta Jarantilla's, was limited to the businesses explicitly enumerated in the "Acknowledgement of Participating Capital." This document, being a duly notarized and voluntarily executed instrument, specifically defined the scope of the partnership's coverage. There was no basis to extend the shares to other corporations or real properties not mentioned therein, as this would deviate from the clear agreement of the parties as documented. The Court reiterated that partners are entitled only to their agreed-upon share or their share in proportion to their contribution, as stipulated in the agreement. On the nature of the claim as a collateral attack: The Court found that the petitioner's claim over the subject real properties, based on alleged partnership funds, amounted to a collateral attack on the respondents' certificates of title. Presidential Decree No. 1529 (Property Registration Decree) explicitly prohibits collateral attacks on certificates of title; they can only be altered, modified, or cancelled in a direct proceeding. Since the petitioner failed to present evidence that the real properties were acquired with partnership funds and relied primarily on self-serving testimonies, his action was deemed an indirect challenge to the validity of the Torrens titles, which is impermissible in this case. The Court emphasized that testimonial evidence cannot prevail over documentary evidence, such as certificates of title and tax receipts presented by the respondents.
Main Doctrine
The Court of Appeals did not err in limiting the petitioner's share to the assets of the businesses enumerated in the Acknowledgement of Participating Capital, as there was a clear agreement that the capital contributed went to those specific businesses. Claims over other real properties acquired by respondents were not substantiated by evidence showing they were funded by the partnership, and asserting ownership over them would constitute a collateral attack on the respondents' certificates of title.