### **Facts:**
**Background Events:**
1. Simon Velasco owned a parcel of land covered by OCT No. 20630 in Daraga, Albay.
2. Simon’s children: Heriberto, Genoviva, Felisa, and Juan, inherited the property upon his death.
3. In 1966, Juan and Felisa executed a Deed of Extrajudicial Settlement and Sale, transferring the property to Leopoldo Espinas, Felisa’s son.
**Discovery and Allegations of Fraud:**
4. In 2010, the respondents Felix Luna, Jr., Armando Velasco, and Antonio Velasco discovered the property transfer, and alleged it was done through deceit and fraud.
5. Respondents claimed they had no knowledge or consent for the extrajudicial settlement and sale, violating their rights as co-heirs.
**Defense of Petitioners:**
6. Petitioners Lilibeth Espinas-Lanuza and Onel Espinas (children of Leopoldo) defended claiming all heirs had agreed orally to partition Simon’s estate previously, giving definite shares to each heir:
– Property in Magogon, Camalig, Albay to Genoviva.
– Property in Ting-ting, Taloto, Camalig, Albay to Heriberto.
– Subject property shared by Juan and Felisa, sold to Leopoldo.
### **Procedural Posture:**
– **RTC Decision (Dec. 2, 2014):** Validated Juan and Felisa’s sale of their respective undivided shares to Leopoldo, recognizing the latter and respondents as co-owners of the subject property.
– **CA Decision (June 13, 2016):** Annulled the extrajudicial settlement due to the exclusion of other heirs (Heriberto and Genoviva), emphasized fraud, determined respondents as co-owners, denied petitioners’ motion for reconsideration.
– **Petition for Review on Certiorari:** Filed by petitioners raising errors about the heirs’ partition, validity of the sale, and laches.
### **Issues:**
1. Whether the property was already validly partitioned among Simon Velasco’s heirs prior to the execution of the Deed of Extrajudicial Settlement and Sale in 1966.
2. Whether the Deed of Extrajudicial Settlement and Sale executed in 1966 was fraudulent.
3. Whether laches and prescription barred the respondents from asserting their claim.
### **Court’s Decision:**
**Issue 1 – Partition Validity:**
The Court found that an oral partition of Simon’s estate had occurred, evidenced by each heir’s possession of their respective shares and the noticeable improvements on their portions. Long-term, undisputed possession and acts of ownership validated the partition, nullifying the claim of co-ownership over the subject property.
**Issue 2 – Fraudulent Deed:**
Although the Deed of Extrajudicial Settlement did not include all heirs, it was not actionable, given the actual partition and possession by Felisa and Juan. Hence, the sale of their shares to Leopoldo was lawful, and no fraud ensued as alleged by respondents.
**Issue 3 – Laches and Prescription:**
Laches prevented the respondents from disputing the sale. The delay of 44 years constituted neglect, prejudicing petitioners relying on the transaction. The respondents’ predecessors had sufficient time to object but chose not to, cementing the partition.
**Ruling:**
The Court reversed the CA’s decision and declared Leopoldo (and thus petitioners) the rightful possessors by virtue of the Deed of Extrajudicial Settlement and Sale.
### **Doctrine:**
– An oral partition of an estate is valid among heirs if supported by strong evidence such as long possession and acts of ownership.
– Laches may bar actions where there is an unjustifiable delay in asserting a right, causing prejudice to the opposing party.
– Mere inclusion in the property’s tax declaration does not conclusively establish co-ownership.
### **Class Notes:**
**Key Elements/Concepts:**
– **Oral Partition**: Heirs can partition an estate orally and without a public instrument if possession and acts of ownership can be proven.
– **Laches**:
1. Delay in asserting a right after knowing facts necessary for the claim.
2. Time lapse causing equitable estoppel.
– **Article 433 of Civil Code**: Actual possession under a claim of ownership raises a presumption of ownership.
**Relevant Legal Provisions:**
– **Civil Code Article 541**: Presumption of just title for possession in the concept of an owner.
– **Rules of Court Rule 74 Sec. 1**: Extrajudicial settlement requires all heirs’ participation or notice.
– **Civil Code Article 1082**: Act to finalize co-ownership deemed a partition.
In context, the case reminds students of procedural diligence in inheritance cases and provides a cogent example of principles like oral partition and laches applied by the Supreme Court.
### **Historical Background:**
The case underscores long-standing property disputes within families and clarifies that oral agreements concerning property can carry significant legal weight if substantiated by continuous possession and usage. The historical struggle for land ownership and the frequent informal resolutions among heirs add context to procedural scrupulousness observed by Philippine courts.
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