Heirs of Feliciano Yambao vs. Heirs of Hermogenes Yambao

An action for partition among co-owners is imprescriptible where the co-owners remain in actual possession of the property, and the issuance of a Torrens title in one co-owner's name creates an implied trust by operation of law that cannot be repudiated by reliance on the registration. Prescription begins to run against a co-owner only upon unequivocal acts of repudiation made known to the other co-owners, and even the issuance of a certificate of title—while constituting an open repudiation—does not start the prescriptive period if the other co-owners are still in actual possession of the property.

The subject property is a parcel of land in Barangay Bangan, Botolan, Zambales, originally possessed by Macaria De Ocampo. Macaria's nephew, Hermogenes Yambao, acted as administrator of the property and paid realty taxes therefor. Hermogenes had eight children: Ulpiano, Dominic, Teofilo, Feliciano, Asesclo, Delia, Amelia, and Melinda, all surnamed Yambao. After Hermogenes died, all of his heirs freely picked and harvested from fruit-bearing trees on the property, and Eleanor Yambao, Ulpiano's daughter, constructed a house thereon. Feliciano was eventually awarded a free patent over the property, for which Original Certificate of Title No. P-10737 was issued on November 29, 1989.

The subject property is a parcel of land located in Barangay Bangan, Botolan, Zambales, originally possessed by Macaria De Ocampo. Macaria's nephew, Hermogenes Yambao, acted as administrator of the property and paid the realty taxes therefor. Hermogenes had eight children: Ulpiano, Dominic, Teofilo, Feliciano, Asesclo, Delia, Amelia, and Melinda, all surnamed Yambao.

After Hermogenes died, all of his heirs were free to pick and harvest from the fruit-bearing trees planted on the subject property, and Eleanor Yambao, Ulpiano's daughter, even constructed a house thereon. This communal and mutual use of the property by the heirs of Hermogenes continued until sometime in 2005, when the heirs of Feliciano prohibited them from entering the property and ejected Eleanor therefrom.

Feliciano had been awarded a free patent over the subject property, for which Original Certificate of Title No. P-10737 was issued on November 29, 1989. In his application for free patent, Feliciano acknowledged that the source of his claim of possession was Hermogenes's possession of the property in a peaceful, open, continuous, and adverse manner, in the concept of an owner, since 1944. The heirs of Feliciano claimed that their father was in possession of the property in the concept of owner since time immemorial and that the cause of action questioning the validity of OCT No. P-10737 had prescribed after the lapse of one year from its issuance.

The ouster of the heirs of Hermogenes in 2005 prompted them to file a complaint for partition, declaration of nullity of title/documents, and damages against the heirs of Feliciano with the RTC, alleging that both groups are co-owners of the subject property, having inherited the right thereto from Hermogenes. The heirs of Feliciano denied the allegations and contended that Feliciano possessed the property in the concept of owner since time immemorial.

• Existence of Co-ownership: Petitioners argued that the Court of Appeals erred in ruling that there is co-ownership between the heirs of Feliciano and the heirs of Hermogenes over the subject property.
• Collateral Attack on Title: Petitioners averred that the CA erred in ordering the partition of the subject property, since such action amounts to a collateral attack on the validity of OCT No. P-10737.
• Prescription: Petitioners claimed that the cause of action in the complaint filed by the heirs of Hermogenes, which questioned the validity of OCT No. P-10737, prescribed after the lapse of one year from its issuance on November 29, 1989.

• Co-ownership: Whether the heirs of Hermogenes and the heirs of Feliciano are co-owners of the subject property.
• Prescription: Whether the action for partition filed by the heirs of Hermogenes had prescribed.
• Collateral Attack: Whether the action for partition amounts to a collateral attack on the validity of OCT No. P-10737.

• Co-ownership: Yes. Feliciano's free patent application itself acknowledged that his possession was tacked from Hermogenes's possession since 1944, implicitly recognizing co-ownership among all of Hermogenes's heirs, and no evidence showed that Hermogenes bequeathed the property solely to Feliciano.
• Prescription: No. The prescriptive period did not begin to run upon issuance of OCT No. P-10737 on November 29, 1989, because the heirs of Hermogenes were still in possession of the property at that time; it was only in 2005 that the heirs of Feliciano expressly prohibited them from entering.
• Collateral Attack: No. The complaint for partition sought a declaration of co-ownership and conveyance of lawful shares, not an attack on Feliciano's title; no fraud, mistake, or irregularity in the registration decree was alleged.

• Co-ownership: Feliciano's free patent application indicated that he merely tacked his possession of the subject property from Hermogenes, his father, who held the property in a peaceful, open, continuous, and adverse manner in the concept of an owner since 1944. This constituted an implicit recognition that Feliciano merely co-owns the subject property with the other heirs of Hermogenes. The heirs of Feliciano presented no evidence that Hermogenes bequeathed the property solely to Feliciano. Co-ownership is a form of trust, with each owner being a trustee for each other, and mere actual possession by one co-owner does not give rise to the inference that the possession was adverse, since a co-owner is entitled to possession of the property.

• Prescription: As a rule, prescription does not run in favor of a co-heir or co-owner as long as he expressly or impliedly recognizes the co-ownership, and a co-owner cannot acquire by prescription the share of the other co-owners absent a clear repudiation of the co-ownership. For a co-owner's possession to be deemed adverse, three requisites must concur: (1) unequivocal acts of repudiation amounting to an ouster of the other co-owners; (2) such positive acts of repudiation made known to the other co-owners; and (3) clear and convincing evidence thereof. While the issuance of a certificate of title constitutes an open and clear repudiation of any trust, and an action for partition prescribes in ten years from the date of issuance, this rule applies only when the plaintiff is not in possession of the property. Here, although OCT No. P-10737 was registered in Feliciano's name on November 29, 1989, the heirs of Hermogenes were still in possession at that time. It was only in 2005 that the heirs of Feliciano expressly prohibited them from entering the property. The right to demand partition had not yet prescribed.

• Collateral Attack: The complaint for partition sought first a declaration that the heirs of Hermogenes are co-owners of the subject property, and second, the conveyance of their lawful shares. The heirs of Hermogenes did not attack Feliciano's title and alleged no fraud, mistake, or irregularity that would justify a review of the registration decree. Their theory was that although the property was registered solely in Feliciano's name, they are co-owners entitled to conveyance of their shares. Moreover, when Feliciano registered the property in his name to the exclusion of the other heirs, an implied trust was created by force of law, making him a trustee of the undivided shares of the other heirs. As trustees, the heirs of Feliciano cannot repudiate the trust by relying on the registration.

• Co-ownership as a Form of Trust — A co-ownership is a form of trust, with each owner being a trustee for each other. Mere actual possession by one co-owner will not give rise to the inference that the possession was adverse, because a co-owner is entitled to possession of the property. The Court applied this doctrine to hold that Feliciano's possession, tacked from Hermogenes, did not extinguish co-ownership among all heirs.

• Imprescriptibility of Action for Partition Among Co-owners — An action to demand partition among co-owners is imprescriptible, and each co-owner may demand at any time the partition of the common property. Prescription does not run in favor of a co-heir or co-owner as long as he expressly or impliedly recognizes the co-ownership. The Court applied this to hold that the heirs of Hermogenes' right to demand partition had not prescribed, since they remained in possession until ousted in 2005.

• Requisites for Adverse Possession by a Co-owner — Three requisites must concur for a co-owner's possession to be deemed adverse to the other co-owners: (1) unequivocal acts of repudiation amounting to an ouster of the cestui que trust or other co-owners; (2) such positive acts of repudiation made known to the cestui que trust or other co-owners; and (3) clear and convincing evidence thereof. The Court found that while issuance of a certificate of title constitutes an open and clear repudiation, the prescriptive period did not run because the other co-owners were still in actual possession.

• Implied Trust by Operation of Law Upon Registration — When a co-owner registers property in his name to the exclusion of the other co-owners, an implied trust is created by force of law, and the registering co-owner is considered a trustee of the undivided shares of the other co-owners. A trustee who obtains a Torrens title over a property held in trust for another cannot repudiate the trust by relying on the registration. The Court applied this to bar the heirs of Feliciano from repudiating the trust through reliance on OCT No. P-10737.

• "A co-ownership is a form of trust, with each owner being a trustee for each other. Mere actual possession by one will not give rise to the inference that the possession was adverse because a co-owner is, after all, entitled to possession of the property." — This passage articulates the foundational principle that possession by one co-owner is presumed to be held for the benefit of all, not adverse to them, and is central to the Court's finding that co-ownership persisted despite Feliciano's registration.

• "In order that a co-owners possession may be deemed adverse to the cestui que trust or other co-owners, the following requisites must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or other co-owners; (2) that such positive acts of repudiation have been made known to the cestui que trust or other co-owners; and (3) that the evidence thereon must be clear and convincing." — This sets out the canonical three-part test for when a co-owner's possession becomes adverse, a formulation frequently cited in property law jurisprudence.

• "A trustee who obtains a Torrens title over a property held in trust for him by another cannot repudiate the trust by relying on the registration." — This encapsulates the doctrine of implied trust in the context of Torrens registration, barring a trustee from using the certificate of title to defeat the beneficial interests of the other co-owners.

• Fangonil-Herrera vs. Fangonil, 558 Phil. 235 (2007) — Cited for the proposition that prescription does not run in favor of a co-owner who recognizes the co-ownership, and that an action for partition among co-owners is imprescriptible.
• Heirs of Juanita Padilla vs. Magdua, 645 Phil. 140 (2010) — Cited for the three requisites that must concur for a co-owner's possession to be deemed adverse to the other co-owners.
• Pangan vs. Court of Appeals, G.R. No. L-39299, Oct. 18, 1988, 166 SCRA 375 — Cited for the rule that the issuance of a certificate of title constitutes an open and clear repudiation of any trust, in turn citing Lopez vs. Gonzaga, 119 Phil. 424 (1964).
• Heirs of Jose Olviga vs. Court of Appeals, G.R. No. 104813, Oct. 21, 1993, 227 SCRA 330 — Cited for the rule that the ten-year prescriptive period for partition applies only when the plaintiff is not in possession, and that the right to demand partition does not prescribe if the person claiming ownership is in actual possession.
• Ringor vs. Ringor, 480 Phil. 141 (2004) — Cited for the doctrine that a trustee who obtains a Torrens title over property held in trust cannot repudiate the trust by relying on the registration.
• Vda. de Figuracion vs. Figuracion-Gerilla, 703 Phil. 455 (2013) — Cited for the proposition that registration of property in one co-owner's name to the exclusion of others creates an implied trust by force of law.

• Rule 45, Rules of Court — The petition was filed as a petition for review on certiorari under Rule 45, seeking to annul the CA decision.
• Presidential Decree No. 1529 (Property Registration Decree) — The issuance of OCT No. P-10737 under a free patent was governed by the land registration laws; the Court addressed the effect of such registration on co-ownership and the creation of an implied trust.

Presbitero J. Velasco, Jr. (Chairperson, on official leave), Diosdado M. Peralta, Jose Portugal Perez, and Francis H. Jardaleza concurred. No separate concurring opinions were written.