Palet v. Tejedor
REITERATIONFacts
The Antecedents: This case concerns a dispute over the ownership of two lots, identified as lot No. 1 and lot No. 2 of block No. 379 in the cadastral survey of Manila. The underlying issue stems from a partition agreement (Exhibit I) executed between the parties, which allegedly led to the improper adjudication of lot No. 2 to the respondents. The petitioners claim that lot No. 1, along with a house thereon (No. 694 A. Mabini Street), was the only property adjudicated to the respondents under this agreement, while lot No. 2 (property No. 678 A. Mabini Street) was not included in their share. Procedural History: The respondents initially filed a motion on August 21, 1929, in cadastral case No. 63, praying for the adjudication of lots Nos. 1 and 2 of block No. 379 in their favor. This motion was granted by the Court of First Instance of Manila on September 7, 1929, leading to the issuance of Original Certificate of Title No. 7171 to the respondents. Subsequently, on December 5, 1929, the petitioners filed a motion for review, alleging that the decree of adjudication was obtained through fraud. After a hearing, the court granted this motion on February 3, 1930, setting aside the previous decree and ordering the cancellation of the title. The respondents appealed this order, but before it was passed upon, they withdrew their motion for a new trial and agreed with the petitioners to submit the case for decision based on an agreed statement of facts. The Petition: The appellants, Gabriel Tejedor and others, are appealing the order of the Court of First Instance of Manila dated May 22, 1930, which adjudicated lot No. 2 of block No. 379 to the petitioners, Monserrat Palet and others. The appellants contend that the lower court erred in holding that the petitioners sufficiently alleged and proved fraud, in ordering the review of the registration decree, and in awarding lot No. 2 to the petitioners instead of the respondents. They argue that based on the partition agreement (Exhibit I), they are entitled to lot No. 2. The appeal is brought before the Supreme Court to challenge the lower court's decision regarding the ownership and adjudication of lot No. 2.
Issue(s)
Whether the lower court erred in holding that the petitioners sufficiently alleged fraud. Whether the lower court erred in holding that fraud was proven without evidence. Whether the lower court erred in ordering the review of the decree of registration for lot 2 of block 379. Whether the lower court erred in holding that lot 2 belongs to the petitioners and not the respondents by virtue of the instrument of partition (Exhibit 1). Whether the lower court erred in cancelling the respondents' title to lot 2 and awarding it to the petitioners. Whether the lower court erred in denying the motion for a new trial.
Ruling
The Supreme Court affirmed the order of the Court of First Instance of Manila, finding no error in its decision. The order adjudging lot 2 of block 379 to the petitioners is affirmed in its entirety.
Ratio Decidendi
On the alleged error of holding sufficient allegation of fraud: The Court found that the petitioners' motion for review sufficiently alleged fraud by stating that the decree of adjudication was obtained through fraud. The subsequent submission of the case on an agreed statement of facts and the pertinent portion of the deed of partition (Exhibit I) provided the basis for the court's determination of fraud. On the alleged error of holding fraud was proven without evidence: The agreed statement of facts and the deed of partition (Exhibit I) served as evidence. The Court noted that the respondents, by virtue of Exhibit I, were only entitled to lot No. 1, which was the property purchased by Agustin Palet y Roca from Francisco de Paula Ossorio y Cembrano. However, they sought adjudication of lot No. 2 as well, which comprised the property derived from Roman Martinez y Andueza and was not adjudicated to them by Exhibit I. This act of seeking adjudication of lot No. 2, knowing they were only entitled to lot No. 1, constituted bad faith and, consequently, fraud. On the alleged error in ordering the review of the decree of registration: Section 38 of Act No. 496 allows for the review of a decree of registration obtained by fraud within one year after its issuance. Since the decree of registration for lot No. 2 was issued on October 8, 1929, and the motion for review was filed on December 5, 1929, well within the one-year period, the review was proper on the ground of fraud. On the alleged error in holding that lot 2 belongs to the petitioners and not the respondents by virtue of Exhibit 1: The Court meticulously examined Exhibit I, the deed of partition and adjudication. It concluded that Exhibit I clearly adjudicated only lot No. 1 to the respondents, which corresponded to the house and lot at No. 694 A. Mabini Street, purchased by Agustin Palet y Roca. Lot No. 2, corresponding to property No. 678, was not included in this adjudication. Therefore, the respondents were only entitled to lot No. 1, and lot No. 2 rightfully belonged to the petitioners as per the partition. On the alleged error in cancelling the respondents' title and awarding lot 2 to petitioners: Based on the finding that the respondents acted in bad faith by seeking adjudication of lot No. 2 when they were only entitled to lot No. 1, the cancellation of their title to lot No. 2 and its award to the petitioners were justified. The Court also noted that even in the absence of fraud, or after the lapse of the one-year period, a co-owner may be compelled to convey a lot to the rightful recipient of the apportionment, provided the property remains registered in their name and no innocent third party has acquired it in good faith for value. On the alleged error in denying the motion for a new trial: The respondents withdrew their motion for a new trial before it was passed upon. Therefore, this assignment of error is moot.
Main Doctrine
A co-owner who applies for and obtains the adjudication and registration in his name of a lot that he knows has not been allotted to him in the partition acts in bad faith, and the decree issued may be reviewed within the year following its issuance. Even in the absence of fraud or after the lapse of one year, the co-owner may be compelled to convey the lot to whoever received it in the apportionment, provided it remains registered in his name and no third party has acquired it in good faith for valuable consideration.