Valdez vs. Olorga

No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. Where a vendee is made to appear as the sole vendee in a deed of sale for the benefit of himself and his siblings, with the understanding that he holds the property in trust for them, the juridical relation is one of co-ownership, and the trustee's possession is not adverse and cannot ripen into title by prescription absent unequivocal acts of repudiation made known to the beneficiaries.

The parties are the heirs and successors-in-interest of the late spouses Federico Valdez, Sr. and Juanita Batul, who purchased Lot No. 18 of the Puerto Princesa Cadastre in 1924 from Dolores M. de Gutierrez for P500.00. The original owner's certificate of title was lost, so the transfer of the lot in the name of Federico Valdez, Sr. was never accomplished. The spouses died in 1931 and 1939, respectively, leaving several children as heirs, including Federico Valdez, Jr., who died in September 1960, leaving as his heirs his wife Teofila Olorga and daughter Carmen Valdez.

The spouses Federico Valdez, Sr. and Juanita Batul bought Lot No. 18 of the Puerto Princesa Cadastre from Dolores M. de Gutierrez in 1924 for P500.00. In 1930, the Valdez family occupied and lived in the premises of Lot No. 18. After the death of Federico Valdez, Sr., Juanita Batul executed a contract of lease over a portion of Lot No. 18 in favor of the protestant church of Puerto Princesa in 1936, and leased another portion to Mr. Gregorio Quicho in 1939. The transfer of the lot in the name of Federico Valdez, Sr. was never done because the owner's original certificate of title was lost.

In 1948, Josefina Valdez and Federico Valdez, Jr. commissioned their cousin Concepcion Castro to negotiate with the Gutierrez family so that the property might be transferred to them. The Gutierrez family was asking for an additional amount of P2,500.00. Mrs. Castro returned to Puerto Princesa without having realized her mission, and in the same year went back to Manila with Federico Valdez, Jr. and Mr. Gregorio Quicho. The deed of sale was executed for the amount of P2,200.00, which was given by Mr. Gregorio Quicho as payment for back rentals and payment for the purchase of the portion of Lot No. 18 which he was renting and occupying. In executing the deed of sale, Exhibit "I," the name of Federico Valdez, Jr. appeared as the only vendee, pursuant to the wishes of Mr. Quicho who advanced the money, with the understanding that Federico Valdez, Jr. would hold the same in trust for his other brothers and sisters.

When Federico Valdez, Jr. was still living, he never attempted to exclude the plaintiffs from ownership of the land in question. The plaintiffs had been in open, continuous, and uninterrupted possession of the premises they were occupying inside the lot long before the execution of the deed of sale. It was only after the death of Federico Valdez, Jr. in 1960 that the widow Teofila Olorga tried to eject the plaintiffs. At the time of the execution of the deed of sale, Federico Valdez, Jr. was barely 21 years old, a sophomore student in high school, and he and his wife were without any lucrative trade or calling. During his lifetime, Federico Valdez, Jr. sold a portion of the land and leased other portions to private parties, but he did so with the consent and approval of his elder sister, Josefina Valdez.

The defendants claimed that since the land was sold to Federico Valdez, Jr. in 1948 and the Transfer Certificate of Title was issued in his name in 1950, the action had already prescribed when it was filed more than ten years thereafter, in 1962, and that from the date of the sale up to his death in 1960, he exercised exclusive ownership of the land. The court a quo found that the deed of sale was placed in Federico Valdez, Jr.'s name alone pursuant to the wishes of Mr. Quicho, with the understanding that he would hold the same in trust for his other brothers and sisters, and that Federico Valdez, Jr. never attempted to exclude the plaintiffs from ownership of the land during his lifetime.

• Extinctive Prescription: The defendants-appellants argued that since the land was sold to the late Federico Valdez, Jr. in 1948 and the Transfer Certificate of Title was issued in his name in 1950, the action had already prescribed when it was filed more than ten years thereafter, or in 1962.
• Acquisitive Prescription: The defendants-appellants claimed that from the date of the sale up to the time of his death in 1960, Federico Valdez, Jr. exercised exclusive ownership of the land, and thus acquired title by acquisitive prescription.

N/A — The decision does not recount the plaintiffs-appellees' arguments beyond pointing out that the findings of fact of the court a quo are no longer reviewable by the Supreme Court, whose jurisdiction is limited to deciding purely legal questions.

• Extinctive Prescription: Whether the action for partition had prescribed when it was filed more than ten years after the issuance of the Transfer Certificate of Title in the name of Federico Valdez, Jr.
• Acquisitive Prescription: Whether Federico Valdez, Jr.'s possession of the property from 1948 until his death in 1960 ripened into title by acquisitive prescription.

• Extinctive Prescription: No. Under Article 494 of the Civil Code, no prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. The action to demand partition of the thing held in common does not prescribe.
• Acquisitive Prescription: No. The trustee's possession is not adverse and cannot ripen into title by prescription absent the concurrence of the following circumstances: (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) such positive acts of repudiation have been made known to the cestui que trust; and (c) the evidence thereon should be clear and conclusive. These circumstances were not present in this case.

• Extinctive Prescription: Given the antecedents of the property and the fact that its acquisition by Federico Valdez, Jr. was for the benefit not of himself alone but also of his brother and sisters, although for purposes of convenience he was made to appear as the sole vendee, the juridical relation that arose among them was one of co-ownership, with the plaintiffs-appellees actually in possession of a portion of the property. Under Article 494 of the Civil Code, no prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. This article is a restatement of Article 1965 of the Spanish Civil Code, which provides that as between co-heirs, co-owners, or proprietors of adjacent estates, the action to demand the partition of the inheritance or of the thing held in common does not prescribe.
• Acquisitive Prescription: From the standpoint of acquisitive prescription, the Court has held in numerous decisions involving fiduciary relations such as those occupied by a trustee with respect to the cestui que trust that as a general rule the former's possession is not adverse and therefore cannot ripen into a title by prescription. Adverse possession in such a case requires the concurrence of the following circumstances: (a) that the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) that such positive acts of repudiation have been made known to the cestui que trust; and (c) that the evidence thereon should be clear and conclusive. These circumstances were not present in this case, as Federico Valdez, Jr. never attempted to exclude the plaintiffs from ownership of the land during his lifetime, and the plaintiffs had been in continuous and uninterrupted possession of the premises they were occupying long before the execution of the deed of sale.

• Prescription between co-owners — Under Article 494 of the Civil Code, no prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. The Court applied this doctrine to hold that the action for partition had not prescribed, as Federico Valdez, Jr. recognized the co-ownership by never attempting to exclude the plaintiffs from the property.
• Trustee's possession not adverse — As a general rule, a trustee's possession with respect to the cestui que trust is not adverse and therefore cannot ripen into a title by prescription. Adverse possession in such a case requires the concurrence of the following circumstances: (a) that the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) that such positive acts of repudiation have been made known to the cestui que trust; and (c) that the evidence thereon should be clear and conclusive. The Court applied this doctrine to hold that Federico Valdez, Jr.'s possession did not ripen into title by prescription, as these circumstances were not present.

• "No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership." — This is the canonical formulation of Article 494 of the Civil Code, which the Court applied to reject the claim of extinctive prescription.
• "As between co-heirs, co-owners, or proprietors of adjacent estates, the action to demand the partition of the inheritance or of the thing held in common, or the survey of the adjacent properties, does not prescribe." — This restates Article 1965 of the Spanish Civil Code, which the Court cited as the antecedent of Article 494.
• "Adverse possession in such a case requires, the concurrence of the following-circumstances: (a) that the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) that such, positive acts of repudiation have been made known to the cestui que trust and (c) that the evidence thereon should be clear and conclusive." — This states the requisites for adverse possession by a trustee against the cestui que trust, which the Court applied to reject the claim of acquisitive prescription.

• Laguna vs. Levantina, 71 Phil. 566 — Cited as among the numerous decisions involving fiduciary relations holding that a trustee's possession is not adverse and cannot ripen into title by prescription.
• Bargayo vs. Camumot, 40 Phil. 875 — Cited in support of the rule that a trustee's possession is not adverse to the cestui que trust.
• Osorio, et al. vs. Osorio, et al., 85 Phil. 209 — Cited in support of the rule on prescription between co-owners and co-heirs.
• Sumira vs. Vistan, 74 Phil. 138 — Cited in support of the rule that a trustee's possession cannot ripen into title by prescription absent repudiation.

• Article 494, Civil Code — Provides that no prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. The Court applied this provision to reject the claim of extinctive prescription.
• Article 1965, Spanish Civil Code — Provides that as between co-heirs, co-owners, or proprietors of adjacent estates, the action to demand the partition of the inheritance or of the thing held in common does not prescribe. The Court cited this as the antecedent of Article 494 of the Civil Code.

Zaldivar, Castro, Fernando, Teehankee, Barredo, Makasiar, Antonio, and Esguerra, JJ., concurred.

N/A — No dissenting opinions are noted in the case text.