Delos Santos vs. Delos Santos

An extrajudicial settlement that excludes co-heirs is void and inexistent, but conveyances made by a co-owner pertaining to their undivided share are valid to the extent of that share, subject to proper liquidation and partition, pursuant to the principle of Quando res non valet ut ago, valeat quantum valere potest.

The dispute involves conjugal partnership properties of Emerenciano and Adalia. Adalia died in 1996, survived by Emerenciano and their natural and adopted children (Demy, Montano, Irene, and Seatiel). Approximately seven years later, Emerenciano married Luz, with whom he had three children (Francis, Catherine, and Lorence). The legal controversy centers on the validity of Emerenciano's extrajudicial settlement and conveyances of the conjugal properties to his second family, which excluded his children from his first marriage.

The subject properties are two parcels of land with improvements in Olongapo City, covered by TCT No. T-3337 and OCT No. P-1850, forming part of the conjugal partnership of Emerenciano and Adalia. Adalia died in 1996, survived by Emerenciano and their natural child Demy and adopted children Montano, Irene, and Seatiel. Approximately seven years later, Emerenciano married Luz, with whom he had three children: Francis, Catherine, and Lorence.

In 2009, Emerenciano and Luz, representing their minor children, executed an Extrajudicial Settlement of Estate with Waiver (EJSW) over the subject properties. In the EJSW, Emerenciano and his minor children misrepresented themselves as the sole heirs of Adalia. Emerenciano adjudicated to himself one-half of the properties as his conjugal share and conveyed the entirety of the properties to Francis, Catherine, and Lorence. The following year, Emerenciano executed a Deed of Waiver, Quitclaim and Transfer of Residential Buildings, further conveying the residential buildings to Catherine and Lorence. New TCTs and Tax Declarations were subsequently issued in the names of the second family.

Emerenciano died in 2011. Demy, Montano, Irene, and Seatiel discovered the conveyances and, failing to settle the matter amicably, filed a complaint for annulment of the EJSW and Deed of Waiver, and cancellation of the new titles. They claimed the properties were conjugal and that they were unlawfully excluded from their mother's estate. Luz and her children countered by attacking the filiation of the respondents and arguing that the respondents were already given other properties, thus estopping them from complaining.

The RTC recognized the respondents as legal heirs and declared the deeds void, but acknowledged that the second family might be entitled to the free portion of Emerenciano's share. Despite this, the RTC annulled the deeds altogether and ordered the cancellation of the new titles. Luz and her children appealed to the CA, which affirmed the RTC in toto, prompting the present petition.

• Filiation and Jurisdiction: Petitioners argued that filiation cannot be determined in an ordinary civil case for annulment of documents and requires a separate special proceeding.
• Estoppel: Petitioners maintained that respondents were aware of the conveyances and had received other properties from Emerenciano, thus estopping them from questioning the extrajudicial settlement.
• Laches and Prescription: Petitioners contended that laches and prescription had set in because respondents failed to object during Emerenciano's lifetime.
• Validity of Conveyance: Petitioners claimed the EJSW should be interpreted to give effect to Emerenciano's intention to transfer his share in the conjugal properties to his children from the second marriage.

• Void Conveyances: Respondents argued that the conveyed properties were conjugal properties of their parents, and the conveyances excluding them were void as they were deprived of their rightful shares as legal heirs of Adalia.
• Misrepresentation: Respondents pointed out that Emerenciano and his minor children grossly misrepresented themselves as the only heirs of Adalia, and that Francis, Catherine, and Lorence are not related to Adalia and not entitled to her share.
• Premature Alienation: Respondents argued that their mother's estate should have been settled first before their father alienated his share in favor of his children from the second marriage.

• Necessity of Separate Proceeding: Whether a separate proceeding is necessary before the trial court can acknowledge respondents' heirship.
• Validity of Nullification: Whether the courts a quo erred in nullifying the EJSW and the Deed of Waiver, Quitclaim and Transfer of Residential Buildings, as well as the TCTs and TDs issued by virtue of the nullified deeds.
• Laches and Prescription: Whether respondents' cause of action was already barred by laches and prescription.

• Necessity of Separate Proceeding: No. A separate proceeding is not necessary because respondents are legal heirs by operation of law and are not seeking to establish their heirship but to enforce their hereditary rights against void deeds.
• Validity of Nullification: Partly yes. The lower courts erred in annulling the deeds altogether; the EJSW is void only insofar as the settlement excluded the lawful heirs, but the conveyances are valid to the extent of Emerenciano's undivided share, subject to liquidation and partition.
• Laches and Prescription: No. Laches and prescription cannot bar a co-heir deprived of their lawful participation, and an action for declaration of inexistence of a contract does not prescribe.

• Necessity of Separate Proceeding: Respondents asserted their rights as natural and adopted children of Adalia, seeking annulment of deeds that deprived them of hereditary rights. They already possess heirship status by operation of law. Furthermore, petitioners were the ones who raised the issue of filiation, so they cannot question the RTC's jurisdiction over the matter. A separate special proceeding may be dispensed with when parties voluntarily submit the issue and present evidence, which the RTC consequently adjudged.
• Validity of Nullification: The properties are conjugal, making Emerenciano and respondents co-owners upon Adalia's death. The EJSW misrepresented that the second family were the sole heirs, unlawfully excluding respondents. Under Rule 74, Section 1, an extrajudicial settlement is not binding on non-participants. An EJSW excluding co-heirs is void and inexistent. However, under Article 493 of the Civil Code, a co-owner has full ownership of their part and may alienate it. Thus, the conveyances are valid to the extent of Emerenciano's undivided interest—one-half as his conjugal share and one-fifth of Adalia's estate as his inheritance—subject to liquidation and partition. The lower courts erred in annulling the deeds altogether. The principle of Quando res non valet ut ago, valeat quantum valere potest applies.
• Laches and Prescription: Laches and prescription cannot work against co-heirs deprived of their lawful participation. Respondents had no knowledge of the deeds until Emerenciano's death and acted within a reasonable time. Furthermore, Article 1410 of the Civil Code provides that an action for declaration of inexistence of a contract does not prescribe.

• Quando res non valet ut ago, valeat quantum valere potest — A contract must be recognized as far as it is legally possible to do so. An extrajudicial settlement excluding co-heirs is void and inexistent, but transfers pertaining to the undivided share of the conveying co-heir should be recognized as valid subject to proper liquidation and partition.
• Co-ownership and Alienation of Undivided Shares (Article 493, Civil Code) — Each co-owner has full ownership of their part and may alienate it, but the effect of the alienation is limited to the portion that may be allotted to them upon termination of the co-ownership. A surviving spouse's conveyance of conjugal property is valid only to the extent of their undivided share.
• Inexistence of Contract and Prescription (Article 1410, Civil Code) — An action or defense for the declaration of the inexistence of a contract does not prescribe. Laches and prescription cannot bar co-heirs deprived of their lawful participation in an estate.

• "Quando res non valet ut ago, valeat quantum valere potest: 'a contract must be recognized as far as it is legally possible to do so.' Thus, while an extrajudicial settlement or conveyance which excluded co-heirs of their rightful share in the inheritance is void and inexistent, transfers pertaining to the undivided share of the conveying co-heir should be recognized as valid subject to proper liquidation and partition." — This passage from the opening of the decision encapsulates the core ruling and the governing principle applied to reconcile the void settlement with the valid portion of the conveyances.
• "The conveyances under the EJSW and Deed of Waiver, Quitclaim and Transfer may be sustained to the extent of Emerenciano's undivided interest (one-half portion of the entire properties as his conjugal share and one-fifth portion of the other half pertaining to Adalia's estate as his inheritance), subject to proper liquidation of the conjugal partnership and partition of Adalia's estate." — This specifies the exact extent to which the conveyances are deemed valid, applying Article 493 of the Civil Code on co-ownership to the facts of the case.

• Heirs of Protacio Go, Sr. vs. Servacio, 672 Phil. 447 (2011) — Cited as instructive on the validity of a surviving spouse's disposal of conjugal property. It established that the sale is void only as to the share of the deceased spouse, and the buyers become trustees for the benefit of the other heirs, with the transaction not being void ab initio.
• Treyes vs. Larlar, G.R. No. 232579 (2020) — Cited to support the ruling that a separate special proceeding for the determination of heirship may be dispensed with when parties voluntarily submit the issue to the trial court.
• Neri vs. Heirs of Hadji Usop Uy, 697 Phil. 217 (2012) — Cited for the doctrines that an extrajudicial settlement excluding co-heirs is void and inexistent, and that laches and prescription cannot bar co-heirs deprived of their lawful participation.

• Article 493, Civil Code — Provides that each co-owner has full ownership of their part and may alienate it, but the effect of the alienation is limited to the portion allotted to them upon division. Applied to sustain the validity of Emerenciano's conveyance to the extent of his undivided share.
• Rule 74, Section 1, Rules of Court — Provides that no extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof. Applied to declare the EJSW void as against the excluded respondents.
• Article 1410, Civil Code — Provides that an action or defense for the declaration of the inexistence of a contract does not prescribe. Applied to bar the defense of prescription.
• Articles 980, 979, and 996, Civil Code — Govern intestate succession, providing that children of the deceased inherit in equal shares and the surviving spouse has the same share as each child. Applied to determine the respective shares of Emerenciano and the respondents in Adalia's estate.

Leonen, SAJ. (Chairperson), Lazaro-Javier, J. Lopez, and Kho, Jr., JJ., concur.