Reillo vs. San Jose

A deed of extrajudicial settlement of estate executed without including some of the heirs who had no knowledge of and consent to the same is fraudulent and void. An answer that admits the material allegation of the existence of other heirs, thereby contradicting the deed’s recital of sole heirship, fails to tender an issue and justifies judgment on the pleadings. A counterclaim for partition of other parcels of land not related to the subject matter of the main action is a permissive counterclaim for which docket fees must be paid; non-payment precludes the court from acquiring jurisdiction over it.

Spouses Quiterio San Jose and Antonina Espiritu Santo owned a parcel of land in Teresa, Rizal, covered by TCT No. 458396. They had five children: Virginia, Virgilio, Galicano, Victoria, and Catalina. Antonina died in 1970, Quiterio in 1976; both died intestate. Virginia and Virgilio later died, survived by their respective families. On January 23, 1998, the children and surviving spouse of Virginia, along with Ma. Teresa Piñon (petitioners), executed a Deed of Extrajudicial Settlement of Estate Among Heirs with Waiver of Rights, declaring themselves the sole heirs. The deed waived all their rights in favor of Ma. Teresa, leading to the cancellation of the original title and the issuance of TCT No. M-94400 in her name on July 6, 1999. Respondents Galicano, Victoria, Catalina, and Maribeth (Virgilio’s daughter), as other heirs, were excluded and filed a complaint for annulment of the deed and title, partition, and damages.

• Nature of the Action: Respondents, as surviving children and grandchildren of spouses Quiterio San Jose and Antonina Espiritu Santo, filed a complaint for annulment of the Deed of Extrajudicial Settlement of Estate Among Heirs with Waiver of Rights dated January 23, 1998, annulment of TCT No. M-94400, partition, and damages.
• The Deed and Title: Petitioners—the children and surviving spouse of Virginia San Jose Fernando—executed the deed declaring themselves the “legitimate descendants and sole heirs” of the spouses Quiterio and Antonina. They waived their rights in favor of co-petitioner Ma. Teresa Piñon, which led to the cancellation of the original TCT No. 458396 and the issuance of TCT No. M-94400 in Ma. Teresa’s name.
• Admission in the Answer: Petitioners’ Answer denied that the deed was falsified and alleged it was executed in accordance with law. However, the answer admitted that the spouses Quiterio and Antonina had five children, thus confirming that respondents were co-heirs. The answer also included a counter-petition seeking partition and accounting of 12 other properties allegedly owned by the deceased spouses and in respondents’ possession.
• Procedural Motions: Respondents moved for judgment on the pleadings, arguing the denials were negative pregnant and that the admission of five children impliedly conceded that petitioners were not the sole heirs. Respondents also moved to dismiss the counter-petition for failure to pay docket fees. Petitioners did not specifically oppose the motion for judgment on the pleadings but prayed that their Answer and Rejoinder be considered; they opposed the motion to dismiss without addressing the docket fee issue or tendering payment.
• Trial Court’s Findings: The RTC found that the pleadings showed a misrepresentation in the deed as to sole heirship, that petitioners’ own counter-petition for partition of other properties bolstered the falsity of the claim of being sole heirs, and that the counter-petition could not be considered filed due to non-payment of docket fees.

• Error in Judgment on the Pleadings: Petitioners argued that their Answer denied falsification and stated the deed was made in accordance with law, thereby tendering an issue. They contended that the trial court should have considered the entire Answer with Counter-Petition and Rejoinder, not just the complaint, and that a trial would have shown that the subject land was inherited by their mother Virginia from her parents.
• Dismissal of Counter-Petition: Petitioners maintained that their counter-petition for partition was a compulsory counterclaim that did not require payment of docket fees. They contended that even if docket fees were required, the RTC could have simply directed them to pay rather than dismiss the claim; the dismissal would result in a multiplicity of suits.
• Validity of Partition Order: Petitioners argued that the RTC’s order to partition the property violated the basic law on intestate succession because the heirs had not been formally named and qualified through a petition for intestate succession. They further contended that the order was void for lack of publication as required under Rules 74 and 76 of the Rules of Court.

• Judgment on the Pleadings: Respondents countered that petitioners’ denials were negative pregnant and failed to specifically deny the material allegation that they misrepresented themselves as sole heirs. They argued that the admission of the existence of five children and the counter-petition for partition of other properties impliedly conceded that petitioners were not the sole heirs, leaving no genuine issue.
• Dismissal of Counter-Petition: Respondents moved to dismiss the counter-petition on the ground that no docket fees were paid, and thus the trial court lacked jurisdiction over it. They did not accept that it was a compulsory counterclaim exempt from fees.

• Propriety of Judgment on the Pleadings: Whether the Court of Appeals erred in affirming the RTC’s grant of judgment on the pleadings given petitioners’ denials and prayer to consider the entire Answer.
• Dismissal of Counter-Petition: Whether the RTC correctly dismissed the counter-petition for partition for non-payment of docket fees, and whether such counter-petition was a compulsory counterclaim exempt from docket fees.
• Validity of the Partition Order: Whether the RTC’s order directing partition of the subject property was valid despite the absence of a formal intestate proceeding and publication under Rules 74 and 76 of the Rules of Court.

• Propriety of Judgment on the Pleadings: Judgment on the pleadings was properly granted because the answer failed to tender an issue. Petitioners admitted the material allegation that the spouses had five children, thereby confirming that respondents are co-heirs. The denial of falsification could not override the admission that petitioners were not the sole heirs; the deed was therefore void for excluding known heirs who did not consent. A deed of extrajudicial partition that omits some heirs is fraudulent and vicious, and no extrajudicial settlement binds an heir who did not participate or had no notice under Rule 74, Section 1. The defense that Virginia inherited the property was not raised in the answer and cannot be introduced to avoid judgment on the pleadings.
• Dismissal of Counter-Petition: The counter-petition for partition of 12 other properties was a permissive counterclaim, not a compulsory one. Respondents’ complaint concerned the annulment of the deed and partition of a single parcel, while petitioners’ claim sought partition of entirely different properties. It did not arise out of or in connection with the transaction or occurrence that was the subject matter of the main action, as required under Rule 6, Section 7. As a permissive counterclaim, it required payment of docket fees for the court to acquire jurisdiction. Petitioners never paid the fees, never asked for time to pay, and did not raise the matter in their motion for reconsideration. Under these circumstances, dismissal was proper.
• Validity of the Partition Order: The order to partition the subject property was valid. The annulment of the deed and title reverted the property to the estate of the original owners. Since all parties admitted they were legal heirs, they owned the property in common, and an action to end indivision among co-heirs is a partition governed by Rule 69 of the Rules of Court. Rule 69, Section 1, does not require publication. Rules 74 and 76 apply to summary settlement of estates, not to an ordinary action for partition under Rule 69. The trial court’s directive to partition in accordance with intestate succession—given the absence of a will—was therefore correct.

• Judgment on the Pleadings (Rule 34, Sec. 1) — Where an answer fails to tender an issue or admits the material allegations of the adverse party’s pleading, the court may direct judgment on such pleading. The essential question is whether the pleadings generate issues; if the answer contains an admission that effectively concedes the plaintiff’s claim, no genuine issue exists.
• Void Extrajudicial Settlement (Rule 74, Sec. 1) — An extrajudicial partition executed without including some of the heirs, who had no knowledge of and consent to the same, is fraudulent and void. No extrajudicial settlement is binding upon any person who has not participated therein or had no notice thereof. The deed made by some heirs under a misrepresentation of sole heirship is invalid.
• Compulsory vs. Permissive Counterclaim (Rule 6, Secs. 6–7) — A counterclaim is compulsory when it arises out of or is necessarily connected with the transaction or occurrence constituting the subject matter of the opposing party’s claim. A counterclaim that does not meet this test is permissive and requires payment of docket fees for the court to acquire jurisdiction. A permissive counterclaim that is dismissed for non-payment of docket fees does not bar a separate action.
• Effect of Annulment of Deed on Partition — When a deed of extrajudicial settlement and the resulting title are annulled, the property reverts to the estate of the original owners. The co-heirs then hold it in common, and a partition under Rule 69 of the Rules of Court is proper without the need for publication.

• “A deed of extrajudicial partition executed without including some of the heirs, who had no knowledge of and consent to the same, is fraudulent and vicious. The deed of settlement made by petitioners was invalid because it excluded respondents who were entitled to equal shares in the subject property. Under the rule, no extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof.”
• “Where an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading. x x x. In a proper case for judgment on the pleadings, there is no ostensible issue at all because of the failure of the defending party’s answer to raise an issue.”
• “The defendants-appellants cannot pass on to the trial court the performance of a positive duty imposed upon them by the law.”

• Tan v. De la Vega, G.R. No. 168809, March 10, 2006, 484 SCRA 538 — Followed for the test of judgment on the pleadings: the answer must fail to tender an issue or admit the material allegations.
• Pedrosa v. Court of Appeals, G.R. No. 118680, March 5, 2001, 353 SCRA 620 — Followed for the rule that an extrajudicial settlement excluding some heirs is fraudulent and void.
• Lafarge Cement Philippines, Inc. v. Continental Cement Corporation, G.R. No. 155173, November 23, 2004, 443 SCRA 522 — Reference for the distinction between permissive and compulsory counterclaims.

• Rule 34, Section 1, Rules of Court — Judgment on the pleadings; applied because the answer admitted material allegations that petitioners were not the sole heirs, leaving no triable issue.
• Rule 74, Section 1, Rules of Court — Settlement of estate outside of court; cited for the rule that no extrajudicial settlement binds an heir who did not participate or had no notice; the deed was therefore void.
• Rule 6, Sections 6 and 7, Rules of Court — Counterclaims; the counter-petition for partition of other properties was permissive because it did not arise from the same transaction or occurrence; hence, docket fees were required.
• Rule 69, Section 1, Rules of Court — Action for partition of real estate; applied to the order directing partition of the subject property without publication requirement.

Associate Justice Consuelo Ynares-Santiago (Chairperson), Associate Justice Minita V. Chico-Nazario, Associate Justice Presbitero J. Velasco, Jr., Associate Justice Antonio Eduardo B. Nachura.