Non vs. Court of Appeals

The Court held that the delayed registration of a deed of donation or extrajudicial settlement does not adversely affect its validity between the parties or indicate fraud, as registration is merely a ministerial act that creates constructive notice to third persons. Furthermore, the preterition of an heir in an extrajudicial settlement, absent fraud or bad faith, does not warrant rescission of the partition or a collateral attack on the title, but entitles the preterited heir to payment of the value of her share under Article 1104 of the Civil Code.

Spouses Julian and Virginia Viado owned a house and lot in Quezon City. Upon Virginia's intestate death in 1982, her conjugal share was transmitted to her husband Julian and their children Nilo, Leah, Rebecca, and Delia, creating a co-ownership. In 1983, Julian executed a deed of donation over his conjugal share in favor of Nilo, and Julian, Leah (through Nilo as attorney-in-fact), and Rebecca executed a deed of extrajudicial settlement waiving their inherited shares from Virginia in favor of Nilo. Both documents were registered in 1988, resulting in the issuance of a new title solely in the name of Nilo's heirs (respondents). Following Julian's death in 1985 and the subsequent deaths of Nilo and Leah in 1987, Rebecca demanded the partition of the property, prompting respondents to assert absolute ownership and demand that petitioners vacate.

• Co-ownership Origins: Spouses Julian and Virginia Viado owned the Isarog property. Virginia died intestate on October 20, 1982, transmitting her conjugal share to her husband Julian and their children Nilo, Leah, Rebecca, and Delia, creating a co-ownership.
• Consolidation of Title: On August 26, 1983, Julian executed a deed of donation covering his one-half conjugal share in favor of Nilo. On the same day, Julian, Leah (represented by Nilo via power of attorney), and Rebecca executed a deed of extrajudicial settlement waiving their rights over Virginia's share in favor of Nilo.
• Registration and Issuance of Title: The instruments were registered on January 7, 1988, resulting in the cancellation of the original Transfer Certificate of Title and the issuance of a new title in the name of Nilo's heirs. By the time of registration, Julian, Nilo, and Leah had all died.
• Conflict and Demand: Petitioners and respondents shared the property since 1977. When Rebecca asked for the property to be divided to accommodate their growing children, respondents claimed absolute ownership and demanded that petitioners vacate.
• Action for Partition: Petitioners filed a case for partition on February 1, 1988, attacking the validity of the 1983 instruments.

• Petitioners argued that Nilo Viado employed forgery and undue influence to coerce Julian Viado into executing the deed of donation.
• Petitioner Rebecca Viado contended that Nilo employed fraud to procure her signature on the deed of extrajudicial settlement, claiming she signed under the mistaken belief that the instrument pertained merely to property administration.
• Petitioners maintained that the exclusion of Delia Viado, a retardate, from the extrajudicial settlement constituted preterition warranting the instrument's annulment.
• Petitioners asseverated that the five-year gap between the execution of the instruments in 1983 and their registration in 1988 was indicative of fraud.

• Respondents predicated their claim of absolute ownership on the deed of donation and the deed of extrajudicial settlement, which validly consolidated title in Nilo Viado.
• Respondents demanded that petitioners vacate the portion of the property they occupied based on the consolidated title.

• Procedural Issues: N/A
• Substantive Issues:
  • Whether the deed of donation and deed of extrajudicial settlement are void on grounds of fraud, forgery, and undue influence.
  • Whether the delayed registration of the instruments adversely affects their validity or indicates fraud.
  • Whether the preterition of a retardate heir in an extrajudicial settlement warrants the rescission of the partition and the annulment of the title.

• Procedural: N/A
• Substantive:
  • The Court ruled that the instruments are valid and not vitiated by fraud, forgery, or undue influence. The issues raised by petitioners boil down to the appreciation of evidence, which both the trial court and the Court of Appeals resolved against petitioners. Petitioners' evidence was found to be wanting and self-serving, and they were vague on how the alleged vices occurred. The Court found it difficult to believe that Rebecca, a teacher by profession, could have misunderstood the document she signed.
  • The Court held that the delayed registration of the instruments did not adversely affect their validity or indicate fraud. Registration is a ministerial act that merely creates constructive notice to third persons; between the parties, the instruments remain valid and binding.
  • The Court ruled that the preterition of Delia Viado does not justify rescission of the partition or a collateral attack on the title. Absent proof of fraud and bad faith, Article 1104 of the Civil Code governs, which mandates that the partition shall not be rescinded but the preterited heir shall be paid the value of the share pertaining to her.

• Vested Right of Inheritance — The inheritance is vested from the moment of the decedent's death, and the property remains under a co-ownership regime among the heirs until partition.
• Nature of Registration — The registration of a document is a ministerial act that merely creates a constructive notice of its contents against all third persons. Between the parties to the instrument, it remains completely valid and binding regardless of delayed registration.
• Preterition in Partition Without Bad Faith — Under Article 1104 of the Civil Code, if a partition is made with preterition of an heir but without fraud or bad faith, the partition is not rescinded; instead, the preterited heir is entitled to payment of the value of the share pertaining to her.

• "The fact alone that the two deeds were registered five years after the date of their execution did not adversely affect their validity nor would such circumstance alone be indicative of fraud. The registration of the documents was a ministerial act and merely created a constructive notice of its contents against all third persons. Among the parties, the instruments remained completely valid and binding."
• "The exclusion of petitioner Delia Viado, alleged to be a retardate, from the deed of extrajudicial settlement verily has had the effect of preterition. This kind of preterition, however, in the absence of proof of fraud and bad faith, does not justify a collateral attack on Transfer Certificate of Title No. 373646."

• Baritua vs. CA, 183 SCRA 565 — Cited as controlling authority for the principle that inheritance vests from the moment of the decedent's death.
• Favor vs. CA, 194 SCRA 308 — Followed for the proposition that every act intended to put an end to indivision among co-heirs and legatees or devisees constitutes a partition, even if it purports to be a sale, exchange, compromise, donation, or extrajudicial settlement.
• In re Consults of Vicente J. Francisco on behalf of Cabantog, 67 Phil. 222 — Cited to support the ruling that the registrar of deeds is not authorized to determine whether or not fraud was committed in the deed sought to be registered, reinforcing the ministerial nature of registration.

• Article 484, Civil Code — Defines co-ownership as existing when the title to an undivided thing or right belongs to different persons. Applied to establish the regime governing the heirs' rights prior to partition.
• Article 1104, Civil Code — Provides that where preterition occurs without bad faith and fraud, the partition shall not be rescinded but the preterited heir shall be paid the value of the share pertaining to her. Applied to determine the proper relief for Delia Viado's exclusion from the extrajudicial settlement.

Melo, Panganiban, Purisima, and Gonzaga-Reyes, JJ.