Inalvez v. Nool
REITERATIONFacts
The Antecedents: This case concerns a dispute over the possession of a parcel of land originally covered by Transfer Certificate of Title (TCT) No. 58398. The land was initially co-owned by several parties, including Spouses Cornelio and Bayang Nool. Over time, portions of the land were sold, leading to various title issuances and a mortgage that was eventually foreclosed by Tarlac Development Bank (TDB). The petitioners, Spouses Primo and Juliana Inalvez, eventually purchased the property from TDB. The respondents, Bayang Nool and her sons, continued to possess a portion of the land, asserting co-ownership rights derived from inheritance. The petitioners initiated legal action to recover possession, alleging their sole ownership based on their purchase from TDB and the respondents' failure to meet cultivation-sharing obligations. Procedural History: The dispute began with a complaint for ejectment and collection of shares filed by the petitioners against the respondents before the Department of Agrarian Reform Adjudication Board (DARAB), which was dismissed for lack of a tenancy relationship. Subsequently, the petitioners filed a complaint for recovery of possession and damages with the Regional Trial Court (RTC) of Camiling, Tarlac. The RTC ruled in favor of the petitioners, ordering the respondents to vacate the property and pay damages. On appeal, the Court of Appeals (CA) reversed the RTC's decision, finding that a co-ownership existed between the parties and that the petitioners had not acquired exclusive ownership. The CA's decision was affirmed by the Supreme Court. The Petition: The petitioners filed a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the decision and resolution of the Court of Appeals. They argued that their purchase of the property from TDB after foreclosure vested them with exclusive ownership, thereby terminating any co-ownership. The core issue presented to the Supreme Court was whether a co-ownership persisted between the petitioners and respondents despite the foreclosure and subsequent repurchase of the property by the petitioners. The petitioners contended that the respondents' claim of co-ownership was a collateral attack on their registered title. The Supreme Court, however, reviewed the facts and affirmed the CA's ruling, finding that the co-ownership had not been terminated and that the respondents' rights as co-owners were preserved.
Issue(s)
Whether a co-ownership exists between the petitioners and the respondents. Whether the foreclosure of the real estate mortgage and the subsequent purchase of the property by the petitioners from the mortgagee terminated the co-ownership. Whether the respondents' claim of forgery regarding the Real Estate Mortgage is valid. Whether the respondents have acquired ownership through ordinary acquisitive prescription, and whether the resolution on ownership constitutes a collateral attack on the Torrens title.
Ruling
The petition is DENIED. The Decision dated June 19, 2008, and the Resolution dated May 26, 2009, of the Court of Appeals in CA-G.R. CV No. 89378 are AFFIRMED.
Ratio Decidendi
On the existence of co-ownership: The Court affirmed the CA's finding that a co-ownership existed between the parties. The property was originally owned by the father of Juliana Inalvez and Bayang Nool. The issuance of TCT No. 58439, which listed Spouses Nicolas and Francisca for one-half share, Spouses Cornelio and Bayang for one-eighth share, Maria Zamora for one-fourth share, and the petitioners for one-eighth share, clearly established a co-ownership prior to the foreclosure and consolidation of title in favor of TDB. The Court reiterated the principle that "co-ownership is a form of trust and every co-owner is a trustee for the others." Even if the legal title was placed in the name of another, a trust is established by implication of law for the benefit of the true owner, pursuant to Article 1451 of the Civil Code. On the termination of co-ownership by foreclosure and subsequent purchase: The Court held that the co-ownership was not terminated by the foreclosure of the mortgage and the subsequent purchase of the property by the petitioners from TDB. It emphasized that "should a co-owner alienate or mortgage the co-owned property itself, the alienation or mortgage shall remain valid but only to the extent of the portion which may be allotted to him in the division upon the termination of the co-ownership." In case of foreclosure, "a sale would result in the transmission only of whatever rights the seller had over of the thing sold." Therefore, a co-owner does not lose his part ownership when his share is mortgaged by another co-owner without his knowledge and consent. The mortgage was not binding against co-heirs who never benefited. When the petitioners bought back the property from TDB, they merely stepped into the shoes of TDB and acquired whatever rights and obligations appertained thereto, which did not include the respondents' share. On the claim of forgery: The Court upheld the CA's finding of forgery regarding the Real Estate Mortgage (REM). The signature on the REM purportedly of Cornelio Nool was found to be a forgery because Cornelio Nool died on December 21, 1979, prior to the execution of the mortgage on April 16, 1980. Furthermore, Bayang Nool's claim that her signature was forged was not rebutted by the petitioners. The CA also noted manifest disparities between Bayang's purported signature on the REM and her genuine signature on her Marriage Contract, supporting the conclusion that her signature was also forged. The trial court's failure to consider this evidence and compare the disputed handwriting was noted. On acquisitive prescription and collateral attack: While the respondents argued for acquisitive prescription, the Court's primary basis for affirming the CA decision was the continued existence of co-ownership and the invalidity of the mortgage as to their shares. However, the Court also noted that the respondents had been in possession of the subject property for more than 35 years, even before the petitioners bought back the property from TDB. This undisturbed possession, for a period too long to be ignored, had the effect of a partial partition, entitling the possessor to the definite portion they occupy, citing Vda. de Cabrera v. CA and Spouses Del Campo v. CA. The portion respondents occupied corresponded to their one-eighth aliquot share. The Court clarified that a resolution on the issue of ownership does not subject a Torrens title to a collateral attack. It reiterated that "what cannot be collaterally attacked is the certificate of title and not the title itself." Certificates of title merely confirm or record existing titles and cannot be used as a shield for fraud. The petitioners' argument that the respondents' claim constituted a collateral attack was therefore dismissed.
Main Doctrine
A co-ownership over a property is not terminated by the foreclosure of a real estate mortgage executed without the consent of all co-owners, nor by the subsequent purchase of the property by one of the co-owners from the mortgagee. The rights of the co-owners who did not consent to the mortgage are preserved, and the purchasing co-owner merely steps into the shoes of the mortgagee.