Fajardo vs. Cua-Malate

An oral partition of an estate among heirs is valid and binding even without a written instrument, as partition among heirs is not a conveyance of real property but a confirmation or ratification of title, and thus is not covered by the Statute of Frauds; a written compromise agreement that merely reduces a prior oral partition into writing is valid and enforceable even if one heir did not sign it.

Respondent Belen Cua-Malate and petitioner Victoria T. Fajardo, together with their siblings Ramon, Adelaida, Emelita, and Elena, are compulsory heirs of their late mother, Ceferina Toregosa Cua, who died intestate on June 10, 1998. The estate comprised real and personal properties located in Metro Manila and the Bicol Region. Respondent Belen filed a complaint for partition and accounting, alleging she had not received her lawful share from the estate. The dispute centers on whether a partition agreement reached during court-annexed mediation is binding on a heir who did not sign the written compromise agreement subsequently drafted to memorialize the oral terms.

On December 1, 2003, respondent Belen Cua-Malate filed an Amended Complaint for Partition and Accounting with Damages before the Regional Trial Court of Calabanga, Camarines Sur, Branch 63, against her siblings — petitioner Victoria T. Fajardo, Ramon T. Cua, Adelaida T. Cua, Emelita T. Cua, and Elena T. Cua. Respondent Belen alleged that she and the defendants siblings are compulsory heirs of their late mother, Ceferina Toregosa Cua, who died intestate on June 10, 1998, leaving certain real and personal properties as well as interests in real properties located in Metro Manila and the Bicol Region. She claimed she did not receive her lawful share from Ceferina's estate and prayed for partition and distribution of the entire estate, award of her lawful share, and payment of moral damages, exemplary damages, contingency fee, and litigation expenses.

On April 6, 2004, defendants Ramon, Adelaida, Emelita, and Elena filed their Answer, alleging willingness to settle amicably and asserting that respondent Belen was already receiving her share from the income of the properties left by Ceferina. They further claimed it was respondent Belen who refused to show documents pertaining to the supposed properties. On August 14, 2004, petitioner Victoria filed her own Answer stating she was in favor of the partition and accounting of Ceferina's properties.

Pre-trial was conducted and terminated on January 25, 2007. After respondent Belen's direct examination and before cross-examination, the parties agreed to refer the case to mediation. The RTC issued an Order of Referral dated October 22, 2008, referring the case to the Philippine Mediation Center. Mediation conferences were held on November 17, 2008; November 28, 2008; January 29, 2009; March 20, 2009; April 23, 2009; June 18, 2009; September 3, 2009; November 5, 2009; and January 21, 2010. During these conferences, all parties attended, assisted by their respective counsel, and successfully arrived at an agreement on the manner of partition of Ceferina's estate. The parties agreed on the specific properties allotted to each of them, covering both Bicol Region and Metro Manila properties. The RTC found that petitioner Victoria was present during the last conference and agreed to the partition of both the Bicol Region and National Capital Region properties.

Because of the agreement reached, the mediator issued an Order dated November 5, 2009, requiring respondent Belen's counsel to draft a written Compromise Agreement. A meeting was scheduled on April 8, 2010 for the signing of the document. On that date, petitioner Victoria did not appear, while all her other siblings did. Petitioner Victoria's counsel explained that she was unable to attend because she did not have enough money to travel from Manila to Calabanga, Camarines Sur — not because she disagreed with the terms. Respondent Belen and the other siblings proceeded to sign the Compromise Agreement and submitted it to the RTC for approval. From the signing on April 8, 2010 until the RTC rendered its judgment on compromise on July 1, 2010, petitioner Victoria raised no objection to the Compromise Agreement. The RTC approved the Compromise Agreement on July 1, 2010, finding it not contrary to law, morals, public order, good customs, and public policy. Petitioner Victoria appealed to the CA, which affirmed the RTC Decision on October 23, 2013 and denied her Motion for Reconsideration on July 21, 2014.

• Non-Signature and Lack of Consent: Petitioner Victoria argued that the Compromise Agreement cannot be binding as to her because she did not sign it and supposedly did not consent to its execution.
• Disagreement with Terms: Petitioner Victoria asserted that she did not sign the compromise agreement because she did not agree with the manner of partition of their mother's estate.

• Validity of Oral Partition: Whether the RTC erred in rendering its Decision based on the compromise agreement entered into by the parties during the mediation conferences before the Philippine Mediation Center, notwithstanding petitioner Victoria's failure to sign the written Compromise Agreement.

• Validity of Oral Partition: No. The RTC did not err in rendering judgment on the compromise agreement. An oral partition among heirs is valid and binding, and the written Compromise Agreement merely reduced into writing a prior oral agreement already validly reached during the mediation conferences.

• Validity of Oral Partition: Both the RTC and CA factually found that the parties — including petitioner Victoria — had already reached a valid oral agreement on the manner of partition of Ceferina's estate during the mediation conferences held from November 2008 to January 2010. The RTC established that petitioner Victoria was present during the last conference and agreed to the partition of both Bicol Region and Metro Manila properties. Her counsel explained that her absence at the April 8, 2010 signing was due to lack of transportation money, not disagreement with the terms. As a rule, in an appeal by certiorari under Rule 45, the Court does not pass upon questions of fact, the factual findings of the trial and appellate courts being binding. Petitioner Victoria failed to present clear and convincing evidence to rebut the factual findings that a valid oral partition was reached. Her silence from the signing date until the RTC's July 1, 2010 judgment, and her failure to oppose the mediator's November 5, 2009 Order to reduce the agreement into writing, further undermined her claim of non-consent. Under Rule 74, Section 1 of the Rules of Court, there is nothing requiring partition among heirs to be in writing to be valid. An oral partition is valid because partition among heirs is not a conveyance of real property but a confirmation or ratification of title or right of property by the heir renouncing in favor of another heir accepting and receiving the inheritance; hence, it is not covered by the Statute of Frauds. Courts of equity have likewise enforced oral partition when it has been completely or partly performed, and in this case the terms of the Compromise Agreement had already been partially performed by the parties without refutation from petitioner Victoria.

• Validity of Oral Partition Among Heirs — An oral partition of an estate among heirs is valid and binding even without a written instrument. There is no law requiring partition among heirs to be in writing to be valid. Under Rule 74, Section 1 of the Rules of Court, nothing in the provision implies that writing or other formality is an essential requisite to the validity of a partition. Partition among heirs or renunciation of an inheritance by some of them is not a conveyance of real property because it does not involve transfer of property from one to the other, but rather a confirmation or ratification of title or right of property by the heir renouncing in favor of another heir accepting and receiving the inheritance. Accordingly, an oral partition is not covered by the Statute of Frauds. Courts of equity have enforced oral partition when it has been completely or partly performed. In this case, the Court applied the doctrine to uphold the binding effect of the oral partition reached during mediation conferences, even though petitioner Victoria did not sign the written Compromise Agreement that merely memorialized the prior oral agreement.

• Factual Findings Binding in Rule 45 Appeals — In an appeal by certiorari under Rule 45, the Supreme Court does not pass upon questions of fact; the factual findings of the trial and appellate courts are binding on the Court. To disprove such findings, the petitioner bears the burden of providing clear and convincing evidence. Petitioner Victoria failed to meet this burden, offering only self-serving statements without corroborating evidence.

• "an oral partition may be valid and binding upon the heirs; there is no law that requires partition among heirs to be in writing to be valid." — This passage states the controlling rule on the validity of oral partition, directly resolving the central issue of the case.

• "the partition among heirs or renunciation of an inheritance by some of them is not exactly a conveyance of real property because it does not involve transfer of property from one to the other, but rather a confirmation or ratification of title or right of property by the heir renouncing in favor of another heir accepting and receiving the inheritance. Hence, an oral partition is not covered by the Statute of Frauds." — This passage articulates the doctrinal rationale for why oral partition escapes the Statute of Frauds, distinguishing partition from conveyance.

• "independent and in spite of the statute of frauds, courts of equity have enforced oral partition when it has been completely or partly performed." — This passage establishes the equitable enforcement principle for oral partitions that have been performed, which the Court applied given the partial performance of the Compromise Agreement's terms.

• Vda. de Reyes vs. Court of Appeals, 276 Phil. 706 (1991) — Controlling precedent directly cited for the proposition that an oral partition may be valid and binding upon heirs and that no law requires partition among heirs to be in writing to be valid. The Court relied on this case as the primary authority for upholding the oral partition in the instant case.

• Hernandez vs. Andal, 78 Phil. 196 (1947) — Followed and cited through Vda. de Reyes for the principle that under Rule 74, Section 1 of the Rules of Court, nothing implies that writing is an essential requisite to the validity of partition, and that courts of equity enforce oral partition when completely or partly performed.

• Barcelona vs. Barcelona, 100 Phil. 251 (1956) — Cited through Vda. de Reyes in support of the proposition that an oral partition is not covered by the Statute of Frauds.

• Romualdez-Licaros vs. Licaros, 449 Phil. 824, 837 (2003) — Cited for the procedural doctrine that in an appeal by certiorari under Rule 45, the Court does not pass upon questions of fact and is not a trier of facts.

• Rule 74, Section 1, Rules of Court (Extrajudicial Settlement by Agreement Between Heirs) — This provision governs extrajudicial settlement of estates by agreement among heirs. The Court cited it to establish that nothing in the section requires partition among heirs to be in writing to be valid, thereby supporting the validity of the oral partition reached during mediation.

Carpio (Chairperson), Perlas-Bernabe, J. Reyes, Jr., and Lazaro-Javier, JJ., concurred.