Heirs of Jarque v. Jarque
REITERATIONFacts
The Antecedents: This case concerns the ownership of an unregistered parcel of land, Lot No. 2560, originally declared in the name of Laureano Jarque. Laureano was married to Servanda Hagos, and they had four children: Roger, Lupo, Sergio, and Natalia. The petitioners are the heirs of Roger, while the respondents are the children of Lupo. The petitioners claim that Roger inherited Lot No. 2560 after Laureano's death in 1946 and exercised ownership over it. They allege an oral partition of their parents' estate after Servanda's death in 1975, wherein Lot No. 2560 was ceded to Roger. The dispute escalated when Roger's sons discovered that the respondents were claiming ownership, citing a Ratification of Ownership of Real Property executed by Dominga (Lupo's daughter) and a Waiver and Confirmation of Rights of Real Property executed by Marcial and Teresita (Lupo's sons) in favor of Lelia (Lupo's daughter), who then obtained a tax declaration in her name. Procedural History: Roger Jarque, through his heirs, filed a complaint for annulment of deeds, recovery of ownership and possession, accounting, and damages against the respondents before the 1st Municipal Circuit Trial Court (MCTC) of Casiguran, Sorsogon. The MCTC ruled in favor of the petitioners, declaring them the rightful owners and possessors of the property and nullifying the deeds executed by Dominga, Marcial, and Teresita. The Regional Trial Court (RTC), Branch 52, Sorsogon City, affirmed the MCTC's decision in its entirety. However, the Court of Appeals (CA), in its Decision dated September 7, 2010, reversed the rulings of the MCTC and RTC, finding that Servanda, as Laureano's surviving spouse, had the right to dispose of her share of the conjugal property and that Dominga rightfully acquired ownership through redemption. The CA's Resolution dated April 12, 2011, denied the motion for reconsideration. The Petition: The petitioners, the heirs of Roger Jarque, filed this petition for review on certiorari under Rule 45 of the Revised Rules of Court. They argue that the CA erred in its application of the Old Civil Code, asserting that Servanda could not inherit from Laureano as all his children were qualified heirs, thus she had no authority to alienate the property. They contend that Servanda could not have authorized Dominga to repurchase the property as the sale with right to repurchase was void. Furthermore, they claim the CA erred in not finding the contract an equitable mortgage and in not giving weight to the trial courts' assessment of evidence, particularly regarding the alleged transfer of repurchase rights from Servanda to Dominga. Petitioners also assert that redemption is not a mode of conveyance and that the oral partition among Laureano's children was valid. They seek to nullify the CA's decisions and reinstate the MCTC's ruling.
Issue(s)
Whether the Court of Appeals erred in holding that Servanda was entitled to 1/2 of the conjugal property and had the authority to dispose of Lot No. 2560, and whether the oral partition among Laureano's children was valid and effective. Whether Dominga acquired ownership over Lot No. 2560 by redeeming it from Benito Coranes. Whether respondents acquired ownership over Lot No. 2560 through acquisitive prescription. Whether the sale with right of repurchase was an equitable mortgage.
Ruling
The petition is GRANTED. The Court of Appeals Decision is REVERSED, and the MCTC Decision dated March 7, 2007 is REINSTATED with modifications on interest rates.
Ratio Decidendi
On Servanda's Authority to Dispose and the Validity of the Oral Partition: The Court held that Laureano died in 1946, prior to the New Civil Code, making the Old Civil Code applicable. Under the Old Civil Code, the conjugal partnership of gains was the default property regime. Upon Laureano's death, Servanda was entitled to her 1/2 share in the partnership, while the other half devolved to Laureano's estate, to be inherited by his forced heirs. The Court found that the property was admitted to be conjugal. However, it was not shown that a partition was effected between Servanda and the heirs of Laureano's estate. The absence of a formal partition resulted in co-ownership between Servanda and her children. The Court found that Roger's exercise of ownership over Lot No. 2560 after Laureano's death, including mortgaging and redeeming it, constituted an oral partition that terminated the co-ownership as to that specific property. This occurred prior to the alleged sale to Benito in 1972, meaning Servanda had no right to sell Lot No. 2560 at that time, even considering her usufructuary rights, as usufruct does not include the jus disponendi (power to alienate). Therefore, the CA erred in concluding Servanda had the authority to sell the property. On Dominga's Acquisition of Ownership: The Court ruled that Dominga did not acquire ownership over Lot No. 2560 when she redeemed it. In a sale with right to repurchase, the vendor's right to repurchase is a resolutory condition. While this right can be transferred, the evidence did not establish that Servanda transferred her right of repurchase to Dominga in a manner that would vest ownership in Dominga. The Court noted that the Deed of Sale with Right to Repurchase was executed by Servanda in favor of Benito, and Dominga's repurchase was for P950.00. The Court found that Dominga's repurchase was merely an act of paying the purchase price on behalf of Servanda, making Dominga an agent or a third party who acquired a lien for the amount advanced. She did not acquire title or ownership in her own right. The Ratification of Ownership executed by Dominga was based on her redemption, not on a valid transfer of ownership. Thus, Dominga, at most, acquired Servanda's aliquot share in the co-ownership or her usufruct, subject to the lien for the repurchase price. On Acquisitive Prescription: The Court agreed with the trial courts that respondents' possession did not ripen into ownership through prescription. Acquisitive prescription requires possession in the concept of an owner, public, peaceful, and uninterrupted. Ordinary prescription requires good faith and just title for 10 years, while extraordinary prescription requires 30 years of adverse possession. The Court found that respondents' possession, and that of their predecessor Dominga, was by mere tolerance of Roger. Their possession only became adverse when Dominga executed the Deed of Ratification of Ownership in 1991. This was insufficient to meet the 30-year requirement for extraordinary prescription, especially since Roger repeatedly asserted his ownership and offered to redeem the property. Therefore, respondents failed to acquire ownership by prescription. On Equitable Mortgage: The Court found it unnecessary to rule on the claim that the sale with right of repurchase was an equitable mortgage, given its disposition that Servanda's sale only affected her rights at most, and the right of repurchase was exercised.
Main Doctrine
A co-owner's exercise of the right to repurchase a property, even if done by a third party on behalf of the vendor, does not vest ownership in the third party but merely grants them a lien for the amount advanced. Possession by mere tolerance, without a just title and good faith, cannot ripen into ownership through prescription.