FIRST DIVISION
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HEIRS OF VICENTE REYES, represented by DOMINADOR REYES; HEIRS OF
APOLONIA REYES SAMSON, represented by MILAGROS FRANCISCO; MONICO REYES
PALMARIO; FELICISIMA REYES CHING-CUANCO; JULIA REYES; LEONORA REYES;
EDILBERTA REYES; MAXIMA REYES; BIENVENIDO REYES; HEIRS OF MANUEL REYES SAMSON,
represented by ZENADIA FRILLES; MARIO SAMSON; GLISERIO SAMSON; CRISPIN
SAMSON; NUMERIANO SAMSON; FERMENIA SAMSON, HEIRS OF MARTIN SAMSON,
represented by MA. CLARA SAMSON; ELPIDIO SAMSON; RICARDO SAMSON; VICTORINO
SAMSON; EMILIANO SAMSON, JR.; CARMELITA SAMSON VERGARA; SHEILA ANN SAMSON;
FRANCISCO SAMSON AND MAGNO SARREAL, represented by the substituted heirs,
AIDA SARREAL and the HEIRS OF CELERINA SARREAL KAMANTIGUE, represented by
LAURA S. KAMANTIGUE, |
G.R. No. 157959 Present: PUNO, C.J., Chairperson, SANDOVAL-GUTIERREZ, AZCUNA, and GARCIA, JJ. Promulgated: March 28, 2007 |
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Petitioners, |
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- versus - |
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THE HONORABLE COURT OF APPEALS, ANATALIA REYES AND GLORIA
REYES-PAULINO, Respondents. |
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X----------------------------------------------------------------------------------------X
DECISION
AZCUNA,
J.:
This is a petition for review on certiorari[1]
assailing the Decision[2]
and Resolution[3] of
the Court of Appeals (CA) dated
The case stemmed from the action for partition and accounting filed by the children of the siblings of the late Eustaquia Reyes[4] against Magno Sarreal, Anatalia Reyes and Gloria Reyes-Paulino, Eustaquia’s husband and nieces, respectively, in relation to a parcel of land situated in Balintawak, Quezon City, with an area of Seven Thousand Four Hundred Eighty-Four (7,484) square meters (the “property”).
The property was originally registered in the name of Eustaquia under Transfer Certificate of Title (TCT) No. 26031 issued by the Registry of Deeds of Quezon City and was inherited by her prior to her marriage to Magno Sarreal.
On
On
Eustaquia
died of natural causes on
On
Private respondents filed a joint answer[12] to the complaint claiming, among others, that 1) the complaint does not state any cause of action; 2) they are the owners in fee simple of the property under TCT Nos. 272977 and 272976; 3) complainants are not compulsory heirs of Eustaquia; and 4) the title to the property has been transferred in the names of private respondents pursuant to a valid sale long before the death of Eustaquia.
A separate answer[13] was filed on behalf of Magno Sarreal by his purported guardian ad litem and natural daughter, Aida Sarreal, which admitted virtually all the allegations of the complaint except the portion which stated that the property belonged exclusively to Eustaquia. It alleged that the property, while originally paraphernal, became conjugal in character because of “the improvements introduced therein from the income of the spouses and/or from the income or fruits of their separate properties.”
However, at that time, it appeared
that the status of Aida Sarreal as guardian ad litem was still in issue
in two pending consolidated civil cases, namely, Civil Case No. Q-51482[14]
and Special Proceeding No. 50893.[15]
The appointed guardian ad litem of Magno in those cases, the University
of the
On
On
After the parties presented their respective evidence, another motion for the appointment of a receiver was filed by the children of Eustaquia’s siblings but before a ruling could be made thereon, the decision[20] dated September 7, 2001 was rendered by the RTC on September 12, 2001 in favor of petitioners which 1) declared the Deed of Absolute Sale executed between Eustaquia and private respondents null and void; 2) ordered the Register of Deeds of Quezon City to cancel TCT Nos. 272976 and 272977; 3) allowed the partition of the property among the legal heirs of Eustaquia and the legal heirs of her deceased husband, Magno; 4) appointed the Branch Clerk of Court as commissioner for the purpose of partitioning the property and rendering an account of all income received from the date of Eustaquia’s death; 5) pending partition, appointed the Clerk of Court as receiver of the property; and 6) ordered the defendants to pay attorney’s fees, litigation expenses and costs of suit.
Not satisfied, private respondents appealed the decision
to the CA. On
WHEREFORE, the appealed decision is
REVERSED and SET ASIDE, and another is entered:
a)
Dismissing the
complaint;
b)
Revoking the
appointment of a receiver over the property in suit;
c)
Discharging
forthwith the appointed receiver, Atty. Mercedes Gatmaytan, the Clerk of Court
of the Regional Trial Court of Quezon City; and
d)
Ordering the
discharged receiver to restore forthwith the possession of the subject property
to the appellants Anatalia Reyes and Gloria Reyes-Paulino and render a full
accounting and settlement of her receivership to the latter.
The CA pointed out that during
pre-trial, the parties agreed that the sole issue that would limit or control
the course of the trial was whether the conveyance of the property to private respondents
was simulated or fictitious. The CA ruled that the burden of proof, which
rested upon complainants in this instance, was not met, after finding that the
testimonies of the complainants’ two witnesses[22]
to the effect that private respondents had no means or source of income that
would enable them to buy the property and that they merely lived with the
spouses Eustaquia and Magno
Sarreal during their lifetime were mere generalities and fell short of the
“clear, convincing and more than merely preponderant evidence necessary to
overcome the notarized deed of sale.”[23]
The CA, moreover, found the testimony of private respondent Gloria Reyes-Paulino
more convincing in that she was able to establish she was earning an income and
that she lived with her husband independently of the spouses Eustaquia and
Magno.
The CA held that the RTC showed undue bias in favor of complainants by resolving the case on issues not agreed upon during the pre-trial, particularly with regard to the true nature of the property and whether the same was paraphernal or conjugal. It should be kept in mind that because the property was deemed conjugal, the RTC held that the Deed of Absolute Sale which did not bear Magno’s signature was void.
Thereafter, separate motions for reconsideration[24] were filed by the children of Eustaquia’s siblings and the heirs of Magno Sarreal. Collaborating counsel for private respondents, on the other hand, filed a notice of entry of appearance with omnibus motion.[25] The omnibus motion, attached as Annex “A” to the notice, prayed for 1) the revocation of the appointment of the receiver over the property; 2) the discharge of the appointed receiver; and 3) an order for the discharged receiver to restore possession of the property to private respondents.
After
petitioners interposed their comment/opposition to the omnibus motion, another
collaborating counsel for private respondents filed a notice of entry of
appearance with application for damages against receiver’s bond[26] on P1,000,000.00
be declared liable for damages sustained by private respondents. On
In
the assailed Resolution dated
This
petition was thereupon filed on
Petitioners anchor their petition on the following grounds:
1.
Respondent Court
of Appeals committed serious deviations from the law and settled jurisprudence
in holding that the land in dispute did not become conjugal property of the
late spouses Magno Sarreal and Eustaquia Reyes and in reversing the trial court
on the issue of nullity of the deed of sale.
2.
Respondent Court
likewise erred most grievously in overturning the trial court’s factual
findings on the basis of a uniquely one-sided or lopsided treatment of the
facts and in total disregard of the tenet in law that issues of credibility should
be left for the trial court to resolve because unlike the appellate court, it
had the opportunity to observe the demeanor of witnesses at close range.
3.
Respondent Court
acted in grave abuse of discretion tantamount to excess of jurisdiction when it
ordered the trial court to issue forthwith a writ of execution of the
directives in its decision despite their lack of finality.
4.
The Resolution
turns a blind eye upon the ruling of the Honorable Supreme Court in Heirs of
the Late Justice Jose B.L. Reyes vs. Court of Appeals (338 SCRA 282), and has
the deleterious effect of opening the door to a dissipation of the fruits of
the property in dispute to the grave detriment of the petitioners should the
assailed Decision be reversed by the Honorable Court.
The crux of the present
controversy involves the resolution of validity or invalidity of the conveyance
of the property to private respondents.
The trial court concluded on
the basis of the evidence presented that the Deed of Absolute Sale was void for
not embodying the consent of Eustaquia’s husband. The conclusion was drawn upon
the finding of the RTC that the property subject of the deed was conjugal in
character due to the improvements constructed thereon at the expense of the
conjugal partnership.
To reiterate, in reversing
the decision of the trial court, the CA pointed out that the RTC had gone
beyond the scope of the lone issue agreed upon by the parties during pre-trial,
that is, whether the sale of the property to private respondents was simulated
or fictitious.
The Court is mindful of the
rule that the determination of issues at a pre-trial conference bars the
consideration of other questions on appeal. A pre-trial is meant to serve as a
device to clarify and narrow down the basic issues between the parties, to
ascertain the facts relative to those issues and to enable the parties to
obtain the fullest possible knowledge of the issues and facts before civil
trials and thus prevent trials from being carried on in the dark. Thus, to obviate the element of surprise,
parties are expected to disclose at a pre-trial conference all issues of law
and fact which they intend to raise at the trial, except such as may involve
privileged or impeaching matters.[27]
The rule, however, is not to be applied with rigidity and admits of certain
exceptions.[28]
There is merit in petitioners’
claim that the limitation upon the issue embodied in the pre-trial order did
not control the course of the trial. The issue on the nature of the property was
embodied in the pleadings filed by the
parties subsequent to the complaint and was actively litigated by them without
any objection on the part of private respondents. In view thereof, the
latter are deemed to have given their implied consent for the RTC to try this issue.
It is worthy to note that a careful perusal of the RTC decision would reveal
that the trial court found it unnecessary to make a categorical finding as to
whether the deed was simulated or fictitious, the focal point being the
character of the property at the time of the transfer to private respondents. While
it is true that the RTC cited the evidence introduced by petitioners to
establish that the sale was simulated or fictitious, it did not make a clear
and definitive ruling on this matter, and instead stated as follows:
While
these circumstances may be considered in the determination of the alleged fraud
in the transfer of property by way of Deed of Sale allegedly executed by
Eustaquia Reyes in favor of defendants Gloria Reyes-Paulino and Anatalia Reyes,
the Court is nevertheless confronted with a significant factual element which,
by and in itself alone and independent of circumstances indicative of fraud,
nullifies the said Deed of Sale. There is a clear absence of Magno Sarreal’s
signature in the Deed of
Contrary
to the assumption made by the CA, the deed was clearly not nullified on the basis
that it was simulated or fictitious. Rather, the ruling was that the absence of
Magno’s conformity rendered the deed of absolute sale fatally defective. In
this regard, the evidence relied upon by the RTC to support its conclusion that
the property had become conjugal and therefore required Magno’s consent was principally
the testimony of Monico Reyes Palmario as well as the lease agreement executed
with ACME, to wit:
After a careful examination of the testimonial and
documentary evidence adduced by both parties, it appears to the Court that:
x x x
6. The
subject property was acquired by Eustaquia Reyes prior to her marriage to Magno
Sarreal. During the lifetime of the marriage, improvements were made thereon as
declared in page 4 Paragraph XI (Exhibit “A-7”) of the Lease Agreement showing
that all improvements in the said parcel of land as of
x x x
As in
the Embrado Case, the sale of the subject property to defendants Gloria Reyes-Paulino
and Anatalia Reyes was void because Magno Sarreal did not consent to the sale,
which consent was necessary because the property is conjugal, hence the consent
of Magno Sarreal as spouse is necessary. While it is true that the parcel of
land covered by TCT 26031 was acquired by Eustaquia Reyes prior to her marriage
to defendant Sarreal, it was established that improvements were made consisting
of houses, buildings for rent. Likewise, all improvements introduced
thereon by Acme-Abrasive Manufacturing Corporation upon the expiration of the
lease on
In the present case, the CA
considered only the improvements introduced by ACME during the subsistence of
the latter’s lease to determine whether the property became conjugal. It ruled in
the negative after concluding that these improvements were not at the
partnership’s expense, but rather at the expense of the lessee.
It is argued by private
respondents that the improvements made by ACME did not transform the character
of the property from being paraphernal into being conjugal. The statutory
requirement set forth under
Article 158 of the Civil Code[31]
is that the improvements have to be made or undertaken at the expense of the conjugal partnership. Under the
terms of the lease agreement, the lessee was allowed to build on the property at its own expense, subject to the
condition that after the termination of the lease, ownership over the same
would inure to the benefit of the lessor.
This Court agrees that the expense incurred by ACME in constructing the
buildings on Eustaquia’s property cannot be construed as being converted into
an expense taken against the civil fruits of the property by virtue of the lease. Rather, under the terms of the lease
contract, it was the building itself that would inure to the lessor as fruits but only at the end of the lease period on
This notwithstanding, the
RTC did not rely solely upon the improvements introduced by ACME in ruling that
the property became conjugal. As mentioned above, it likewise gave full faith
and credence to the testimony of Monico Reyes Palmario who testified that there
were houses and buildings that were constructed on the property prior to the
purported sale to private respondents.
The CA, however, held
otherwise, stating that the testimony of private respondent Gloria
Reyes-Paulino was more credible, thus:
The complaint, however, never mentioned
any “house” or a “building occupied by a knitting company”; it confined itself
only to a “parcel of land” and “market stalls.” Hence, Palmario must be
referring to another land and his lack of certitude is confirmed by his
inability to be sure of the number of houses that he was talking about.
Indeed, appellant GLORIA, who is renting
one of those “houses” or apartments from Eustaquia and Magno, and who is thus
more knowledgeable of the place and
hence, more reliable, declared that they are outside the land in controversy.[32]
Applying the
well-known test of credibility called the actor’s rule, it is the witness whose
action is more closely connected to the point at issue that should be given
more credence.[33] In the present case, the RTC gave credence to
the testimony of petitioner Monico Reyes Palmario, who claimed he worked as
carpenter on the property in question, and there were houses and buildings
constructed on the property including a knitting factory. The CA, however, sustained the testimony of
private respondent Gloria Reyes-Paulino, who rented from the spouses Eustaquia
and Magno one of the “houses” or apartments, and lived therein, and who
testified that these houses and buildings were on a different property. As between these two witnesses, the latter is
more reliable since her act of renting and living in one of the “houses” or
apartments makes her the actor more closely related to the point at issue, i.e., whether or not the houses were on
the property in question. For while a
carpenter would not concern himself with the title of the property, a lessee
would normally look into the title covering the property leased, including its
precise location or boundaries, and in fact Gloria Reyes-Paulino testified that
the lot on which the house she rented was found had a separate title.
Accordingly, the
CA aptly held as follows:
For his part, plaintiff-appellee Monico
Reyes Palmario testified on “more or less” ten (10) houses constructed on the
land in dispute by EUSTAQUIA and Magno, on which he even had the occasion to
work on them as a carpenter, aside from a building occupied by a knitting
company, viz.:
“Q And
will you also inform this Honorable Court if the spouses Magno Sarreal and Eustaquia
Reyes had left any property?
“A Yes,
sir, they have a portion of land and a “paupahang bahay”.
“Q Do
you know where is this parcel of land?
“A Balintawak,
sir,
[“Q] What
city?
“A Balintawak,
sir.
x x x x
x x x x x
“Q Do
you know the area of this parcel of land?
“A Seven
thousand square meters, sir.
“Q Is
that parcel of land you identified the same parcel of land subject matter of
this case?
“A Yes,
sir.
“Q Mr.
witness, do you have any occasion to work on the Seven Thousand square meter
parcel of land?
“A Yes,
sir.
“Q What
was that work that you did, Mr. Witness?
“A I
worked as a carpenter, sir.
“Q You
made mention of house. How many houses
are there inside this property?
“A More
or less ten (10) houses, sir.
“Q By
the way, who was . . . or who spent for the construction of those houses, if
you know?
“A The
spouses Eustaquia Reyes and Magno Sarreal, sir.
“Q Aside
from those houses, do you know if there are other improvements or other building
inside the property?
“A Yes,
sir, knitting company.
“Q Who
owns the building that occupy the factory?
“A Spouses
Eustaquia Reyes and Magno Sarreal, sir.”
The
complaint, however, never mentioned any “house” or a “building occupied by a
knitting company;” it confined itself only to a “parcel of land” and “market
stalls.” Hence, Palmario must be
referring to another land and his lack of certitude is confirmed by his
inability to be sure of the number of the houses that he was talking about.
Indeed, appellant GLORIA, who is renting one of those
“houses” or apartments from EUSTAQUIA and Magno, and who is thus more
knowledgeable of the place and, hence, more reliable declared that they are
outside the land in controversy.
“Q Now,
let us talk about the parcel of land.
How far is this parcel of land from the place where you were residing in
1979?
“A It
is just at the back, sir.
“Q Do
you mean to tell us that the land of which your apartment was situated is not
part of the parcel of land with an area of 7,484 square meters?
“A No,
sir.
“Q When
you say “hindi”, the lot on which your
apartment was situated has a separate title of its own?
“A Yes, sir. [34]
“Q And
the title to that apartment was in the name of the spouses?
“A Yes,
sir.
Be that as it may, the improvements
referred to by the trial court which purportedly made the property conjugal
consisted of “houses, buildings for rent” and “improvements introduced thereon
by lessee Acme-Abrasive Manufacturing Corporation upon the expiration of the lease
on June [1], 1983.” It said:
“As in the Embrado Case, the sale of
the subject property to defendants Gloria Reyes Paulino and Anatalia Reyes was
void because Magno Sarreal did not consent to the sale, which consent was
necessary because the property is conjugal hence the consent of Magno Sarreal
as spouse is necessary. While it is true
that the parcel of land covered by TCT 26031 was acquired by Eustaquia Reyes
prior to her marriage to defendant Sarreal, it was established that
improvements were made consisting of houses, buildings for rent. Likewise, all improvements introduced
thereon by lessee Acme-Abrasive Manufacturing Corporation upon the expiration
of the lease on June [1], 1983 became the conjugal properties of Spouses
Eustaquia Reyes Sarreal and Magno Sarreal.
There is no substantial evidence presented as to the source of funds
used in the improvements but it was testified upon that the same were made
during the subsistence of the marriage hence the presumption that the funds
used were conjugal stands. “Under
Article 158 of the Civil Code, the land becomes conjugal upon the construction
of the building without awaiting reimbursement before or at the liquidation of
the partnership upon the concurrence of two conditions, to wit: (a) the construction of the building at the
expense of the partnership, and (b) the ownership of the land by one of the
spouses. (Embrado vs. Court of Appeals,
supra)” Thus, in this instant case,
while the land originally belonged to Eustaquia Reyes, the same became conjugal
upon the construction of improvements thereon.”
The “houses or apartments being outside the land in
suit, the only improvements that should be looked into in the case at bench are
the “improvements introduced thereon by the lessee Acme-Abrasive Manufacturing
Corporation.” In this connection, it is
worth reiterating that paragraph XI of the contract of lease provided:
“XI
That this contract of lease shall be
for a period of TWENTY (20) YEARS from June 1st, 1963 and expiring
on June 1st 1983; and that upon termination of the period of this
contract, the ownership of all the improvements found within the leased
property, (except machineries of any kind, stocks, furniture and other personal
property found in the building) shall be automatically transferred to the
LESSOR without reimbursement and without paying the cost and value thereof to
the LESSEE; and that if it is necessary for the LESSEE to execute and deliver papers,
documents and other writings, whatsoever to effect the transfer of the ownership
of all the said improvements to the LESSOR, the LESSEE shall execute and
deliver the same to the LESSOR.”
Two (2) decisive facts are clearly
discernible therefrom: first, no
conjugal fund ever went into the construction of the improvements as they were
all done at the expense of the lessee; and second, the improvements shall
devolve to the ownership of the lessor only upon the expiration of the lease.
The lease expired on
Accordingly,
since the property sold by Eustaquia to private respondents on
WHEREFORE, the petition is DENIED
and the assailed Decision and Resolution dated
Costs against petitioners.
SO ORDERED.
ADOLFO S. AZCUNA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chairperson
Chief Justice
ANGELINA
SANDOVAL-GUTIERREZ RENATO C.
CORONA
Associate Justice
Associate Justice
CANCIO
C. GARCIA
Associate Justice
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution, it is hereby certified that
the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Under Rule 45 of the Rules of Court.
[2] Rollo, pp. 45-81.
[3]
[4] Vicente Reyes, Apolonia Reyes Samson, Monico Reyes Palmario, Felicisima Reyes Chingcuanco, Julia Reyes, Leonora Reyes, Edilberta Reyes, Maxima Reyes, Bienvenido Reyes, Manuel Reyes Samson, Calixto Eugenio, Agripino Eugenio, Brigido Eugenio, Arsenio Francisco, Mario Samson, Gliserio Samson, Crispin Samson, Numeriano Samson, Fermenia Samson, Martin Samson, Elpidia Samson, Ricardo Samson, Victorino Samson, Emiliano D. Samson, Jr., Carmelita Samson Vergara, Sheila Ann V. Samson, and Francisco Samson.
[5] Records, pp. 248-253.
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14] An action for recognition of illegitimate child entitled “Aida Sarreal v. Magno Sarreal.”
[15] Entitled “In Re: Guardianship of Magno Sarreal for Guardianship of an Incompetent.”
[16] Records, p. 136.
[17]
[18]
[19]
[20]
[21] Rollo, pp. 45-81.
[22] Monico Reyes Palmario and Celerina Sarreal Kamantigue.
[23] Rollo, p. 65.
[24] CA Rollo, pp. 216-231, 286-290.
[25]
[26]
[27] Caltex (Phils.), Inc. v. Court of
Appeals, G.R. No. 97753,
[28] Son v. Son, G.R. No. 73077,
[29] Records, p. 560.
[30] Rollo, p. 113.
[31] Civil
Code, ARTICLE 158.
Improvements, whether for utility or
adornment, made on the separate property of the spouses through advancements
from the partnership or through the industry of either the husband or the wife,
belong to the conjugal partnership.
Buildings constructed, at the expense of the partnership, during the marriage on land belonging to one of the spouses, also pertain to the partnership, but the value of the land shall be reimbursed to the spouse who owns the same.
[32] Rollo, pp. 74-75.
[33] See, passim, MOORE ON FACTS.
[34] Emphasis ours.
[35] Rollo, pp. 73-78.