Ungab-Valeroso vs. Ungab-Grado

A registered Torrens title in the name of one person does not defeat a co-ownership shown to exist before registration, and a notarized affidavit of acknowledgment and a compromise agreement may establish an express trust that does not prescribe unless the trustee repudiates it.

Anita Ungab-Valeroso is the only child of Timoteo Ungab, now deceased; respondent Felix Ungab is Timoteo’s brother, while the other respondents are heirs of Timoteo’s other brothers and sisters, namely Simeona, Eugenia, Lorenzo, Lazaro, and Margarito. The land in dispute is a 14.3375-hectare parcel in Binuni, Kolambugan, Lanao (now Binuni, Bacolod, Lanao del Norte) registered in Timoteo’s name under OCT No. (P-41)-1,550. Respondents anchor their claim on co-ownership existing before the Torrens title was issued, not on succession from Timoteo.

Timoteo Ungab, now deceased, was the registered owner of a 14.3375-hectare parcel of land in Binuni, Kolambugan, Lanao (now Binuni, Bacolod, Lanao del Norte) under OCT No. (P-41)-1,550. Anita Ungab-Valeroso is Timoteo’s only child; respondent Felix Ungab is Timoteo’s brother, and the remaining respondents are the heirs of Timoteo’s other siblings Simeona, Eugenia, Lorenzo, Lazaro, and Margarito. In 1972, the heirs of Ciriaco Ungab filed a complaint docketed as Civil Case No. II-74 in the CFI of Iligan City, Lanao del Norte, against the brothers, sisters, and heirs of Timoteo for partition, accounting, and reconveyance of the subject land. When the case was called for trial, the parties submitted a written compromise agreement.

On February 15, 1973, the CFI rendered judgment adopting the compromise agreement in toto. The decretal portion gave the plaintiffs an area of 4,779 square meters of the coconut land as a portion of the titled land in the name of Heirs of Timoteo Ungab under OCT No. T-41 (should be P-41), Homestead Patent No. V-4777, located at Binoni, Bacolod, Lanao del Norte (formerly Kolambugan, Lanao); it held the defendants entitled to an area of 138,596 square meters (13.8596 hectares) from the same titled land; it allocated segregation survey expenses equally among the nine heirs, with three heirs representing the plaintiffs and six heirs representing the defendants; it provided for ejectment of named squatters and equal sharing of damages and produce; it acknowledged that the portion pertaining to Simona Ungab had been sold under Pacto de Retro for ₱3,000.00 more or less to Margarito Ungab and wife, to be paid by the nine sets of heirs; and it denied all other prayers and remedies and adjudged no costs.

The parties did not have the land partitioned but divided the proceeds of the land in accordance with the decision. In December 1996, Anita refused to give respondents their respective shares. Respondents then filed against petitioners Anita and her husband Ruselo Valeroso a complaint for recovery of possession, partition, enforcement of the compromise agreement, and damages docketed as Civil Case No. 4048 with the RTC of Iligan City.

During pre-trial, respondents presented Timoteo’s affidavit dated March 13, 1939, acknowledging that he co-owned with his brothers and sisters Simeona, Eugenia, Lorenzo, Lazaro, Felix, and Margarito a parcel of land with an area of 18.8993 hectares in Binuni, Kolambugan, Lanao under Homestead Application No. 218565. Respondents also presented the Affidavit of Acknowledgment dated August 4, 1960 of Anita Ungab and her mother Aurelia Ungab acknowledging the rights of Simeona, Eugenia, Lorenzo, Lazaro, Felix, and Margarito as co-owners of the land.

In their defense, the Spouses Anita and Ruselo claimed that Anita exclusively owns the land as sole heir of Timoteo; that the decision in Civil Case No. II-74 had become dormant and could no longer be executed; and that Anita was not privy to the compromise agreement that led to the decision in Civil Case No. II-74. Petitioners also contended that Anita was misled in signing the Affidavit of Acknowledgment. The RTC found that the compromise agreement bound the parties’ heirs and assigns and that petitioners failed to overcome the presumption of regularity of Timoteo’s affidavit; the CA found that the evidence showed the land was owned in common and that Anita had signed the August 4, 1960 Affidavit of Acknowledgment.

• Succession and Sole Ownership: Petitioners argued that the property was registered in Timoteo’s name and that, under the law of intestate succession, Anita, as Timoteo’s sole heir, is the sole owner of the land.
• Identity of the Land in Timoteo’s Affidavit: Petitioners maintained that respondents could not base their claim on Timoteo’s March 13, 1939 affidavit because it referred to a different parcel of land; since the description in the OCT and in Timoteo’s affidavit differed, respondents bore the burden of proving that the lots in the affidavit were the same as those under OCT No. (P-41)-1,550, and they failed to discharge that burden.
• Due Execution of the Affidavit of Acknowledgment: Petitioners contended that respondents could not use the August 4, 1960 Affidavit of Acknowledgment signed by Anita and her mother because Anita was misled in signing it.
• Prescription of the Judgment: Petitioners claimed that because respondents failed to execute the judgment within the ten-year prescription period, the judgment had prescribed and could not be used to convey any right.
• Ten-Year Limit on Co-ownership: Petitioners argued that the co-ownership was already extinguished because the Civil Code provides that an agreement to keep a thing undivided shall not exceed ten years.
• Affidavit Not a Mode of Acquiring Ownership: Petitioners contended that an affidavit of acknowledgment is not one of the modes of acquiring ownership recognized under the Civil Code, citing Acap vs. Court of Appeals.
• Lack of Privity: Petitioners maintained that Anita was not privy to the compromise agreement that led to the decision in Civil Case No. II-74.

• Co-ownership, Not Succession: Respondents countered that the case is not about succession; they are not claiming as heirs of Timoteo but as his co-owners.
• Torrens Title Cannot Confirm a Non-Existent Right: Respondents asserted that where one does not have any rightful claim over real property, the Torrens system of registration can confirm or record nothing.
• Pre-existing Co-ownership Shown by Affidavit: Respondents claimed that the land was already governed by a state of co-ownership even before the title was issued, and that this fact is shown by the Affidavit of Acknowledgment signed by Anita herself.

• Co-ownership: Whether respondents are co-owners of the parcel of land covered by OCT No. (P-41)-1,550.
• Propriety of Partition Suit: Whether respondents’ suit for partition in the court below is legally proper.

• Co-ownership: Yes. Respondents are co-owners, their claim being based on a co-ownership existing before the Torrens title and supported by the notarized Affidavit of Acknowledgment and the compromise agreement, which established an express trust. The due execution of the affidavit is a question of fact not reviewable under Rule 45.
• Propriety of Partition Suit: Yes. The partition suit is proper because co-ownership was established and the compromise judgment identified the parties’ shares; the ten-year limit on co-ownership may be extended, and the action to reconvey does not prescribe while the property stands in the trustee’s name.

• Co-ownership: The SC first agreed that the case does not involve successional rights; respondents claim a right of co-ownership existing before the land title was issued in Timoteo’s name, so the threshold issue is whether they are truly co-owners. The records lack evidence sufficiently showing that the land covered by Homestead Application No. 218565 in Timoteo’s affidavit is the same land covered by OCT No. (P-41)-1,550 originating from Homestead Patent No. V-4777; the records do not show whether Homestead Application No. 218565 was the one granted in Homestead Patent No. V-4777, and the SC cannot fill that deficiency. Even without Timoteo’s affidavit, however, the August 4, 1960 Affidavit of Acknowledgment is evidence that respondents and Timoteo owned the land in common. Petitioners’ claim that Anita was misled in signing it raises due execution, which requires inquiry into appreciation of evidence, a matter not reviewable in a Rule 45 petition; the truth or falsehood of the affidavit is a question of fact. As a notarized document, the Affidavit of Acknowledgment enjoys the presumption of regularity, and petitioners’ mere allegation that Anita was misled by her mother could not overcome it. The SC also rejected the argument based on Acap vs. Court of Appeals: unlike in Acap, the Affidavit of Acknowledgment and compromise agreement were presented not to show how respondents acquired their rights but as proof that their rights exist.
• Propriety of Partition Suit: The SC held that the failure to execute the judgment within the ten-year period did not prescribe it; when the parties started sharing the proceeds of the land, they had in effect partially executed the compromise agreement and the judgment in Civil Case No. II-74, and such partial execution weighed heavily as evidence that they agreed on the co-ownership arrangement. The judgment did not explicitly order partition of the land itself but merely identified the rights to and respective shares of the parties in the land. The Civil Code limits an agreement to keep a thing undivided to ten years, but the term may be extended; the action to reconvey does not prescribe so long as the property stands in the name of the trustee, because allowing prescription would allow a trustee to acquire title against his principal and true owner. The execution of the Affidavit of Acknowledgment and the compromise agreement established an express trust wherein respondents, as trustors, reposed confidence on Anita and her mother, as trustees, to hold the land subject of the co-ownership; no particular words are required to create an express trust, it being sufficient that a trust is clearly intended. Express trusts do not prescribe except when the trustee repudiates the trust.

• Co-ownership Existing Before Registration — The SC agreed that the case did not involve successional rights because respondents claimed a right of co-ownership existing prior to the issuance of the land title in Timoteo’s name; the SC then upheld that co-ownership on the evidence.
• Express Trust — No particular words are required to create an express trust; it is sufficient that a trust is clearly intended. Express trusts do not prescribe except when the trustee repudiates the trust. The SC found that the Affidavit of Acknowledgment and compromise agreement established an express trust with respondents as trustors and Anita and her mother as trustees, so the action was not barred.
• Presumption of Regularity of Notarized Documents — A notarized document enjoys the presumption of regularity, and a mere allegation that a signatory was misled does not overcome it. The SC applied this to the August 4, 1960 Affidavit of Acknowledgment signed by Anita and her mother.
• Question of Fact under Rule 45 — The SC cannot review questions of fact or appreciation of evidence in a petition for review on certiorari under Rule 45. The SC applied this by refusing to inquire into the due execution and truth or falsehood of the Affidavit of Acknowledgment.
• Partial Execution of Judgment/Compromise — When parties share the proceeds of property in accordance with a compromise judgment, they have in effect partially executed the judgment; such partial execution is strong evidence of their agreement on co-ownership. The SC used this to reject the claim that the judgment had prescribed.
• Non-prescription of Action to Reconvey against Trustee — An action to reconvey does not prescribe so long as the property stands in the name of the trustee; allowing prescription would let the trustee acquire title against the principal and true owner. The SC applied this to the express trust.
• Ten-Year Limit on Co-ownership — Under Article 494 of the Civil Code, an agreement to keep a thing undivided for a certain period not exceeding ten years is valid, but the term may be extended by a new agreement. The SC held the limit did not extinguish the co-ownership or bar partition.
• Acap vs. Court of Appeals Distinguished — A stranger to succession cannot conclusively claim ownership solely on a waiver document that does not cite a derivative mode of acquiring ownership. The SC distinguished Acap because the Affidavit of Acknowledgment and compromise agreement were presented as proof that respondents’ rights exist, not to show how they acquired those rights.

• "The records lack evidence sufficiently showing that the land covered by Homestead Application No. 218565 referred to in the Affidavit of Timoteo is the same land covered by OCT No. (P-41)-1,550 which originated from Homestead Patent No. V-4777." — The SC found the identity of the land in Timoteo’s affidavit not sufficiently proven, but this did not defeat co-ownership because other evidence existed.
• "Moreover, the Affidavit of Acknowledgment, being a notarized document, enjoys the presumption of regularity." — The SC rejected petitioners’ claim that Anita was misled into signing the affidavit.
• "When the parties started sharing the proceeds of the land, they had in effect partially executed the compromise agreement and the judgment in Civil Case No. II-74." — The SC used partial execution to reject the prescription argument and support the co-ownership arrangement.
• "The action to reconvey does not prescribe so long as the property stands in the name of the trustee. To allow prescription would be tantamount to allowing a trustee to acquire title against his principal and true owner." — The SC held the express trust had not prescribed, so the partition action was not barred.

• Pacific Airways Corporation vs. Tonda, 441 Phil. 156, 162 (2002) — Relied on for the rule that the SC cannot review questions of fact or appreciation of evidence in a Rule 45 petition.
• Towne & City Development Corporation vs. Court of Appeals, G.R. No. 135043, July 14, 2004, 434 SCRA 356, 360 — Relied on for the rule that the truth or falsehood of a document is a question of fact.
• Macaspac vs. Puyat, Jr., G.R. No. 150736, April 29, 2005, 457 SCRA 632, 644 — Relied on for the presumption of regularity of notarized documents.
• Ringor vs. Ringor, G.R. No. 147863, August 13, 2004, 436 SCRA 484, 500 — Relied on for the rule that an action to reconvey does not prescribe while the property stands in the trustee’s name.
• Vda. de Esconde vs. Court of Appeals, G.R. No. 103635, February 1, 1996, 253 SCRA 66, 75 — Relied on for the rule that express trusts do not prescribe except when the trustee repudiates the trust.
• Acap vs. Court of Appeals, 321 Phil. 381 (1995) — Distinguished; the SC held its ruling on a stranger to succession relying solely on a waiver document did not apply because the affidavit and compromise agreement here were proof that respondents’ rights exist, not of how they acquired them.

• Article 494, Civil Code — A co-owner may demand partition at any time; an agreement to keep the thing undivided for a period not exceeding ten years is valid, and the term may be extended by a new agreement. The SC applied this to hold that the ten-year limit did not extinguish the co-ownership or bar the partition suit.
• Article 1444, Civil Code — No particular words are required for the creation of an express trust; it is sufficient that a trust is clearly intended. The SC applied this to the Affidavit of Acknowledgment and compromise agreement, which established an express trust.
• Rule 45, Rules of Court — A petition for review on certiorari to the SC is limited to questions of law; the SC cannot inquire into the appreciation of evidence or questions of fact. The SC applied this to refuse review of the due execution and truth or falsehood of the Affidavit of Acknowledgment.