Logrosa vs. Spouses Azares

A person named as vendee in a notarized deed of absolute sale and as co-owner in certificates of title is entitled to compel partition under Article 494 of the New Civil Code, and this presumption of co-ownership cannot be overcome by mere self-serving testimony alleging a trust relationship, absent clear, convincing, and persuasive evidence to repudiate the co-ownership.

In 1987, eight parcels of land situated in Tagum City, Davao del Norte, were acquired from original owner Benjamin A. Gonzales through a notarized Deed of Absolute Sale dated April 14, 1987. The vendees named in the deed were petitioner Rogelio Logrosa, respondents Spouses Cleofe and Cesar Azares, respondents Spouses Abundio, Jr. and Antonieta Torres, respondent Nelson Sala, and respondent Bonifacio Baruiz, Jr. Transfer Certificates of Title (TCT Nos. T-52508 to T-52515) were subsequently issued on May 19, 1987, reflecting Logrosa and the other parties as co-owners. Logrosa took possession of a portion of the property and constructed a house thereon. More than two decades later, respondents Spouses Azares claimed they were the sole owners and that Logrosa and the other co-owners were merely trustees or nominees included in the titles to allow them to reside on the property for "mutual security."

• Nature of the Action: Petitioner Logrosa instituted a complaint for partition of eight parcels of land covered by TCT Nos. T-52508 to T-52515, invoking Article 494 of the New Civil Code which grants co-owners the right to demand partition at any time.

• Acquisition of Properties: The properties were acquired through a notarized Deed of Absolute Sale dated April 14, 1987, executed by vendor Benjamin A. Gonzales in favor of petitioner Logrosa, respondents Spouses Azares, respondents Spouses Torres, respondent Nelson Sala, and respondent Bonifacio Baruiz, Jr. The titles were issued on May 19, 1987, reflecting the parties as co-owners.

• Respondents' Defense: Spouses Azares contended that despite the inclusion of Logrosa's name in the titles and deed, they were the sole purchasers and owners. They alleged that Logrosa, their cousin and former employee in their gold mining business, lacked financial capacity to acquire the properties. They claimed Logrosa was included in the documents solely to provide a place for the parties to live near each other for "easy access and mutual security," and that he was merely a trustee.

• Evidence Presented: Logrosa presented the eight certificates of title and the notarized Deed of Absolute Sale. He also presented respondent Antonieta Torres to identify documents relating to the acquisition. Spouses Azares presented only respondent Cesar Azares as witness, who testified that he never intended to make Logrosa and the others co-owners.

• Tax Payments: Spouses Azares presented tax declarations and receipts to prove exclusive ownership, but Logrosa countered that these payments were made only in 2010 after the partition case was filed. Logrosa presented evidence that respondent Abundio Torres paid real property taxes for at least two years, supported by official receipts and tax declarations issued in the names of Cleofe, Abundio, Nelson, and Logrosa.

• Possession: Logrosa possessed a portion of the subject property and constructed a house thereon without opposition from the other parties until the filing of the partition complaint.

• Delay in Assertion of Ownership: Spouses Azares asserted their claim of sole ownership only in response to the partition complaint filed in 2009, more than two decades after the execution of the deed and issuance of titles in 1987.

• Presumption of Co-ownership: Logrosa maintained that the certificates of title and notarized Deed of Absolute Sale created a strong legal presumption of his status as co-owner, which respondents failed to overcome. He argued that under the principle of indefeasibility of title, the certificates constitute incontrovertible proof of ownership absent fraud or bad faith.

• Insufficient Evidence of Trust: Logrosa argued that respondents' bare allegation of trust, supported only by the self-serving testimony of respondent Cesar Azares, could not defeat the presumptive weight of public documents. He emphasized that the burden of proving a trust relationship requires clear, convincing, and trustworthy evidence, which respondents failed to discharge.

• Adverse Possession and Acquiescence: Logrosa contended that his possession of a portion of the property for over two decades without opposition from respondents, coupled with respondents' failure to assert sole ownership until the partition suit was filed, confirmed his status as co-owner.

• Tax Payments: Logrosa argued that tax declarations and receipts presented by respondents could not prevail over certificates of title, and that in any event, respondents' tax payments were made only after the institution of the case, while other co-owners had also paid taxes.

• Alleged Incapacity to Acquire: Spouses Azares argued that Logrosa lacked the financial capacity to purchase the properties, being merely a lowly employee in their mining business whom they had sent to school and housed out of benevolence.

• Trust or Nominee Relationship: Respondents maintained that Logrosa was merely a trustee or nominee included in the titles to allow him and the other respondents to reside on the property for mutual security, not as a true co-owner who contributed to the acquisition price.

• Exclusive Ownership and Tax Payments: Spouses Azares contended that they alone paid the purchase price and all real property taxes, and that their exclusive financial contribution demonstrated sole ownership notwithstanding the inclusion of other names in the titles.

• Self-serving Nature of Documents: Respondents argued that the inclusion of Logrosa's name in the deed and titles did not reflect the true agreement of the parties, and that the documents were executed merely to facilitate their stated purpose of providing housing for their employees and relatives.

• Existence of Co-ownership: Whether the CA erred in upholding the RTC's finding that no co-ownership existed between Logrosa and respondents, and that Logrosa was merely a trustee.

• Sufficiency of Evidence: Whether respondents' evidence was sufficient to overcome the strong legal presumption of co-ownership created by the certificates of title and notarized Deed of Absolute Sale.

• Existence of Co-ownership: Co-ownership was established. The certificates of title and notarized Deed of Absolute Sale created a strong legal presumption that Logrosa was a co-owner. The burden to prove otherwise shifted to respondents, which they failed to discharge. The Court found respondents' theory—that they included non-buyers in a deed of absolute sale and indefeasible certificates of title merely to provide housing—perplexing and contrary to ordinary human experience.

• Sufficiency of Evidence: The self-serving testimony of respondent Cesar Azares, standing alone, could not overcome the presumptive validity of public documents. The Court noted that respondents' assertion of sole ownership came only after more than two decades and solely as a reaction to the partition complaint, conduct wholly inconsistent with true ownership. Moreover, respondent Cesar's admission during trial that he intended to give the land to the other parties ("whatever they would decide to till the land in that particular area that would be given to them") confirmed the existence of co-ownership.

• Trust Allegations: The burden of proving the existence of a trust rests on the party asserting it, requiring clear, convincing, and persuasive evidence. Respondents failed to present such evidence; no precautionary document was executed to protect their alleged sole ownership, and their delay in asserting their rights undermined their claim.

• Tax Declarations: Tax declarations and receipts cannot prevail over certificates of title as evidence of ownership. Furthermore, respondents' tax payments were made only in 2010 after the case was filed, while evidence showed other co-owners also paid taxes.

• Capacity to Acquire: Financial capacity to purchase is irrelevant to the right to compel partition; the law makes no distinction as to how co-ownership is derived, whether through gratuity or onerous consideration.

• Indefeasibility of Title and Presumption of Ownership — A certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein, and becomes the best proof of ownership. The doctrine applies unless acquisition of title is attended with fraud or bad faith.

• Presumption of Validity of Notarized Documents — A duly notarized document, such as a deed of sale, is considered a public document and enjoys the presumption of validity as to its authenticity and due execution. Under Section 23, Rule 132 of the Rules of Court, public documents are prima facie evidence of the facts which gave rise to their execution.

• Self-serving Testimony vs. Public Documents — The self-serving testimony of a party to an instrument cannot be given more weight and reliability than the contents of such instrument, especially if such instrument enjoys presumptive weight.

• Burden of Proof in Trust Claims — The burden of proving the existence of a trust is on the party asserting its existence, and such proof must be clear and satisfactorily show the existence of the trust and its elements. While implied trusts may be proved by oral evidence, the evidence must be trustworthy and received by the courts with extreme caution, and should not be made to rest on loose, equivocal or indefinite declarations.

• Tax Declarations as Evidence — Tax declarations and tax receipts as evidence of ownership cannot prevail over a certificate of title which is incontrovertible proof of ownership.

• Right to Partition — Article 494 of the New Civil Code provides that no co-owner shall be obliged to remain in co-ownership, and each co-owner may demand at any time the partition of the thing owned in common. A person may exercise the right to compel partition if he sets forth in his complaint the nature and extent of his title and proves the same, regardless of whether title was acquired through gratuity or onerous consideration.

• "The self-serving testimony of a party to an instrument cannot be given more weight and reliability than the contents of such instrument, especially if such instrument enjoys presumptive weight."

• "No one in his right mind would include non-buyers or non-owners in a notarized deed of absolute sale and in indefeasible certificates of title if he truly believes that he is the sole owner of the property."

• "The burden of proving the existence of a trust is on the party asserting its existence, and such proof must be clear and satisfactorily show the existence of the trust and its elements. While implied trusts may be proved by oral evidence, the evidence must be trustworthy and received by the courts with extreme caution, and should not be made to rest on loose, equivocal or indefinite declarations."

• "Tax declarations and tax receipts as evidence of ownership cannot prevail over a certificate of title which, to reiterate, is an incontrovertible proof of ownership."

• "The law does not make a distinction as to how the co-owner derived his/her title, may it be through gratuity or through onerous consideration. In other words, a person who derived his title and was granted co-ownership rights through gratuity may compel partition."

• Heirs of Brusas v. Court of Appeals, 372 Phil. 47 (1999) — Cited for the principle that a certificate of title serves as evidence of an indefeasible and incontrovertible title.

• Federated Realty Corp. v. Court of Appeals, 514 Phil. 93 (2005) — Cited regarding the application of the doctrine of indefeasibility of title absent fraud or bad faith.

• Heirs of Santiago v. Heirs of Santiago, 452 Phil. 238 (2003) — Cited for the rule that one's assertion of ownership is strengthened by possession coupled with lack of opposition from other parties, and for the presumption of validity of notarized documents.

• Development Bank of the Phils. v. National Merchandising Corp., 148-B Phil. 310 (1971) — Cited for the principle that self-serving testimony cannot outweigh the contents of an instrument enjoying presumptive weight.

• Heirs of Vencilao, Sr. v. Court of Appeals, 351 Phil. 815 (1998) — Cited for the rule that tax declarations cannot prevail over certificates of title.

• Oco v. Limbaring, 516 Phil. 691 (2006) — Cited regarding the burden of proof in establishing the existence of a trust and the requirement that evidence thereof must be trustworthy and received with extreme caution.

• Lacbayan v. Samoy, Jr., 661 Phil. 306 (2011) — Cited for the qualification that while a certificate of title does not foreclose the possibility that the registrant may be a trustee, the opposing party must carry the burden of proving with clear, convincing, and persuasive evidence to repudiate the co-ownership.

• Article 494, New Civil Code of the Philippines — Provides that no co-owner shall be obliged to remain in co-ownership and that each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned.

• Section 23, Rule 132, Rules of Court — States that public documents are prima facie evidence of the fact which gave rise to their execution and of the date of the latter.

• Rule 69, Section 1, Rules of Court — Governs the procedure for partition of real property, requiring the plaintiff to set forth the nature and extent of his title and an adequate description of the property.

• Articles 484 and 488, New Civil Code of the Philippines — Cited in relation to Rule 69 regarding the nature of co-ownership and the prohibition against accession by one co-owner of the property of others.

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