Verona Pada-Kilario vs. Court of Appeals

An extrajudicial partition among heirs is valid and binding even if executed solely in an unregistered private document, as no law requires a writing or registration for its intrinsic efficacy among the heirs themselves. Further, occupation of land by mere tolerance or permission of the owner does not create a right of co-ownership nor classify the occupant as a possessor or builder in good faith; ejectment is the proper remedy upon demand.

Jacinto Pada died intestate, leaving six children and an estate that included a 1,301.92-square-meter parcel known as Cadastral Lot No. 5581. During Jacinto’s lifetime, his half-brother Feliciano Pada built a house on the northern portion of the lot with permission. After Feliciano’s death, his son Pastor continued residing there with his family, including petitioner Verona Pada-Kilario, who had lived in the house since 1960. In May 1951, the heirs of Jacinto Pada executed an extrajudicial partition through a private document written in the Bisayan dialect. The document was never registered. Lot 5581 was allocated to Marciano and Ananias. The shares of the other siblings, including Amador, consisted of different parcels. In 1978, Juanita Pada (Ananias’s heir) sold her father’s interest to Ernesto Paderes. On November 17, 1993, Maria Pada (Marciano’s daughter) sold Marciano’s share to private respondent Silverio Pada, her first cousin. Silverio demanded that petitioners vacate; they refused. After failed barangay conciliation, Silverio filed an ejectment suit.

• The Extrajudicial Partition: In May 1951, the six children of Jacinto Pada—or their representatives—executed a private document partitioning his estate. The document was written in the Bisayan dialect and never registered. Cadastral Lot No. 5581 was assigned jointly to Marciano (represented by his daughter Maria) and Ananias (who was present). Amador was allocated different parcels. The sisters Valentina and Ruperta had died without issue.

• Subsequent Transfers: Upon Ananias’s death, his daughter Juanita succeeded to his share and sold it to Engr. Ernesto Paderes in 1978. On November 17, 1993, Maria Pada sold Marciano’s share in Lot 5581 to private respondent Silverio Pada, her first cousin.

• Petitioners’ Occupation: Petitioner Verona Pada-Kilario, granddaughter of Feliciano Pada (Jacinto’s half-brother), had been living in the house on the northern portion of Lot 5581 since 1960. Her family’s presence on the land began with Jacinto’s permission to Feliciano. After the sale to Silverio, petitioners remained on the premises without paying rent, by the tolerance of the owners.

• The Donation to Petitioners: On July 24, 1995, after the ejectment complaint was filed, the heirs of Amador Pada—Concordia Pada-Bartolome, Esperanza Pada-Pavo, and Angelito Pada—executed a Deed of Donation transferring to Verona Pada-Kilario their alleged shares as co-owners of Lot 5581. This donation was invoked to resist ejectment.

• Demand and Ejectment Suit: Private respondent demanded that petitioners vacate so his family could use the area. Conciliation efforts at the barangay level failed, leading to the filing of the ejectment complaint.

• Invalidity of the Extrajudicial Partition: Petitioners contended that the 1951 extrajudicial partition was void because the children who represented Marciano, Amador, and Higino lacked special powers of attorney, and the partition was neither embodied in a public instrument nor registered. They argued that the estate remained under a co-ownership among all heirs of Jacinto Pada.

• Co-ownership by Donation: Petitioners maintained that the Deed of Donation executed by the heirs of Amador Pada conferred upon them the status of co-owners of Lot 5581, precluding ejectment since a co-owner cannot be ousted by another co-owner.

• Builders in Good Faith: Petitioners claimed they were builders in good faith, having constructed improvements on the lot with the consent of certain heirs and in reliance on a promise of donation, thus entitling them to reimbursement and the right of retention under Articles 448 and 546 of the Civil Code.

• Validity of the Partition and Conveyances: Private respondent argued that the 1951 extrajudicial partition was valid and binding; the subsequent conveyances by Juanita and Maria Pada were never questioned by their co-heirs for over 40 years, lending credence to their ownership. Any claim by other heirs was barred by prescription, laches, and estoppel.

• Possession by Mere Tolerance: Private respondent countered that petitioners’ possession was by sheer tolerance of the owners, as admitted in their Answer, and could be terminated at any time. Such possession did not confer any right of ownership or co-ownership.

• Void Donation and Lack of Good Faith: The donation from Amador’s heirs was void because the donors had no interest in Lot 5581, their share in the estate having consisted of other properties. It was a belated, afterthought gesture that could not convert petitioners into possessors in good faith.

• Validity of the Extrajudicial Partition: Whether the 1951 extrajudicial partition of Jacinto Pada’s estate was valid despite being executed in an unregistered private document and without special powers of attorney for some representatives.

• Status as Co-owners: Whether petitioners became co-owners of Cadastral Lot No. 5581 by virtue of the 1995 Deed of Donation from the heirs of Amador Pada, such that they could not be ejected.

• Builders in Good Faith: Whether petitioners were possessors and builders in good faith entitled to reimbursement for improvements and the right of retention under the Civil Code.

• Validity of the Extrajudicial Partition: The 1951 extrajudicial partition was held valid. No law requires a partition among heirs to be in writing or registered to be intrinsically effective among the heirs themselves. The requirement in Section 1, Rule 74 of the Revised Rules of Court—that a partition be in a public document and registered—aims to protect creditors and provide constructive notice, but non-compliance does not affect validity when no creditors are involved. Partition is not a conveyance of real property subject to the Statute of Frauds under Article 1403 of the Civil Code; it is a confirmation of the heirs’ respective titles. Thus, the allocation of Lot 5581 to Marciano and Ananias was binding, and Juanita and Maria Pada validly transferred the property to their respective buyers.

• Status as Co-owners: Petitioners did not become co-owners. The donation from the heirs of Amador Pada was void because, under the 1951 partition, Amador had been allocated different parcels—not Lot 5581. The donors had no ownership interest to convey. Their belated donation, made 44 years after the partition without any prior challenge to its validity, was legally ineffectual. Moreover, petitioners admitted occupying the land without paying rent by the tolerance of the owners. Possession by mere tolerance does not establish co-ownership; it creates an implied obligation to vacate upon demand. Ejectment is the proper remedy.

• Builders in Good Faith: Petitioners were not possessors in good faith. Possession by sheer tolerance of the owners is incompatible with good faith possession, which requires a belief in ownership. Articles 448 and 546 of the Civil Code apply only to one who builds on land in the honest belief that he is the owner. The prior promise of donation had not been fulfilled at the time improvements were built and constituted a mere expectancy; when the donation was eventually executed, it was void. Therefore, petitioners were not entitled to reimbursement or retention.

• Validity of Unregistered Extrajudicial Partition — An extrajudicial partition among heirs does not require a public instrument or registration for its intrinsic validity as among the heirs. The formalities prescribed in Section 1, Rule 74 of the Rules of Court and Article 1358 of the Civil Code are primarily for the protection of creditors and third parties. Partition amounts to a confirmation of title, not a conveyance of real property, and is therefore not within the Statute of Frauds. The voluntary division is conclusive among the participating heirs absent unpaid estate debts.

• Possession by Tolerance — One who occupies land by mere tolerance or permission of the owner possesses no independent right and is bound by an implied promise to vacate upon demand. Such possession is not possession in good faith and does not mature into ownership or co-ownership; the proper remedy of the owner is an ejectment suit.

• Builder in Good Faith Requires Belief of Ownership — The rights under Articles 448 and 546 of the Civil Code, including reimbursement for improvements and retention of the premises, apply exclusively to a possessor who builds on land in the honest belief that he is the owner thereof. Occupants whose possession is based solely on the owner’s tolerance cannot claim the status of builders in good faith. An unfulfilled promise of donation does not convert such possession into one in good faith.

• “No law requires partition among heirs to be in writing and be registered in order to be valid. The requirement in Sec. 1, Rule 74 of the Revised Rules of Court that a partition be put in a public document and registered, has for its purpose the protection of creditors and the heirs themselves against tardy claims. … It follows then that the intrinsic validity of partition not executed with the prescribed formalities is not undermined when no creditors are involved.”

• “Persons who occupy the land of another at the latter’s tolerance or permission, without any contract between them, is necessarily bound by an implied promise that they will vacate the same upon demand, failing in which a summary action for ejectment is the proper remedy against them.”

• “[B]oth Article 448 and Article 546 of the New Civil Code … apply only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. Verily, persons whose occupation of a realty is by sheer tolerance of its owners are not possessors in good faith.”

• Vda. de Reyes v. Court of Appeals, 199 SCRA 646 (1991) — Followed; established that an extrajudicial partition among heirs is not invalid for lack of a public document or registration when no creditors are involved, and that partition is not a conveyance of real property subject to the Statute of Frauds.

• Madamba v. Magno, 10 Phil. 86 (1908); De Guzman v. Pangilinan, 28 Phil. 322 (1914); De Garces v. Broce, 23 SCRA 612 (1968) — Cited as foundational authorities that no prescribed formality is essential for the validity of an extrajudicial partition among heirs.

• Leaño v. Leaño, 25 Phil. 180 (1913) — Applied; the voluntary and spontaneous division of an estate among heirs creates a conclusive legal status, binding unless unpaid debts exist.

• Refugia v. Court of Appeals, 258 SCRA 347 (1996) — Applied; defined possession by tolerance and the proper remedy of ejectment.

• Geminiano v. Court of Appeals, 259 SCRA 344 (1996) — Applied; distinguished possession in good faith from possession by tolerance for purposes of Articles 448 and 546 of the Civil Code.

• Article 448, Civil Code — Grants the right of appropriation or reimbursement to one who builds, sows, or plants in good faith on another’s land. Held inapplicable because petitioners were not possessors in good faith.

• Article 546, Civil Code — Entitles a possessor in good faith to reimbursement for necessary and useful expenses and to retain the thing until reimbursed. Held inapplicable for the same reason.

• Article 1358, Civil Code — Requires that acts creating or extinguishing real rights over immovable property appear in a public instrument. Merely a convenience; non-compliance does not affect validity among the parties.

• Article 1403 (Statute of Frauds), Civil Code — Not applied to partition; partition is not a conveyance of real property but a confirmation of title.

• Section 1, Rule 74, Revised Rules of Court — Prescribes registration and public instrument for extrajudicial settlements. Purpose is protective, not determinative of intrinsic validity among heirs when no creditors exist.

Bellosillo, Mendoza, Quisumbing, and Buena, JJ., concurred.

None.