MAXIMINA OYOD DE GARCES, ET AL., PLAINTIFFS-APPELLANTS, VS. ESMERALDA BROCE, ET AL, DEFENDANTS. ESMERALDA BROCE, DEFENDANT-APPELLANT.

Appeal instituted by both
parties in Civil Case No. 137 (6780) of the Court of First Instance of Negros Occidental, from the deci­sion rendered therein,
dismissing the complaint in said case; declaring as valid the sale to defendant
Esmeralda Broce, by the heirs of Fortunata
Oyod, of a portion of Lot No. 228 of the San Carlos
Cadastre and referred to as Lot No. 228-D; and ordering therein defendant.  Esmeralda Broce to pay to plaintiffs the sum of P780.00 with legal interest
thereon, from the date of the promul­gation of the decision until its full
payment.

The following facts are not in dispute:

In a complaint filed on
September 19, 1962 in the Court of First Instance of Negros
Occidental (which was later amended), Maximina Oyod de Garces, Gregorio Oyod and Pio V. Garces sought the termination of a lease and annulment of
sale, in favor of defendants Tranquilino Broce and Esmeralda Broce, and
the return by the latter, of a parcel of land described as Lot No. 228-D of the
subdivision of Lot No. 228 of the Cadastral Survey of San
Carlos, Negros Occidental, with an area of 354,250
square meters more or less, that plaintiffs claimed to be their property pro–indiviso.

At the pre-trial hearing
of the case, the parties stipulated on the following:

1.  That the original owners
of Lot No. 228 were Severo Oyod
and Bonifecia Mahinay and
their ownership is evidenced by Original Certificate of Title No. 23777 of the
Registry of Deeds of Negros Occidental.

2.  That the said registered
owners had four children namely – Fortunata, Eugenia,
Gregorio and Maxima Oyod.

3.  That Eugenia died
sometime in 1950 after the death of Severo Oyod; that Maxima Oyod is married
to Pio V. Garces; and that Fortunata Oyod, married Pedro Barbon and their
children are Melecia, Narciso,
Leopoldo, Carlos, Margarita, Leonardo, Lilia and Ildefonso Barbon.

4.  That in 1930 the heirs of
Severe Oyod executed a Deed of Extra-Judicial
partition which is document 888, page 12, book 7, series of 1930 of Notary
Public Victorino G. Apuhin
(pp. 101 to 105 of record).

5.  That on September 5, 1951 the heirs of Severo
Oyod executed a Deed of Extra-judicial Settlement
which is document 457, page 93, book 2, series of 1951 of No­tary Public Filomeno T. Enriquez (pp. 77 to 78 of the record).

6.  That Fortunata
Oyod executed a lease agreement in favor of Tranquilino Broce on October 28, 1957 (Document 284, page
39, book 9, series of 1957 of Notary Public Apuhin,
pp. 77 to 78 of the Record).

7.  That on September 25, 1962, the heirs of Fortunata Oyod Barbon executed an Extra-judicial Settlement and Sale
in favor of Esmeralda P. Broce which is document 188,
page 92, book 1, series of 1962 of Notary Public Roque Agravante (pp. 109 to 111
of the record).

8.  That the questions before
this Court are as follows:

(a) Which should prevail, the Extra-judicial Settlement of 1930 or
that of 1951?

(b) If the 1930 Extra-Judicial Settlement is upheld, then the buyer
Esmeralda Broce bought on September 25, 1962, Lot No. 228-D, as described
in the 1930 document.

(c) If the 1951 Extra-judicial Settlement is upheld, then Fortunata Oyod owned an undivided
share in Lot No. 288; and what Esmeralda Broce
acquired in 1962 is not Lot No. 228-D specifically, but an undivided share of
1/4 in Lot 228.

After due hearing, the court rendered judgment on July 11, 1964,
upholding the due execution and validity of the 1930 extrajudicial partition by
the heirs of Severo Oyod
and Bonifacia Mahinay of
Lot No. 228, and of the sale in 1962 to Esmeralda Broce
of Lot No. 22 8-D by the heirs of Fortunata Oyod.  And, finding
that the heirs of the deceased Severo Oyod contracted an
obligation with the Philippine National Bank prior to the sale of lot No.
228-D, to pay the outstanding taxes on the entire Lot 228, the court ruled that lien was thus
created and attached to the land. 
Esmeralda Broce was then ordered to pay to
plaintiffs the sum of P780.00 or 1/5 of the said obligation, as share of Lot
228-D.

Both parties appealed; plaintiffs excepting from the ruling that
sustains the validity of the extrajudicial partition of 1930 and the order to
Esmeralda Broce to pay only the sum of P780.00
instead of P2,392.00; whereas, defendant Esmeralda Broce prays for her total exculpation from any liability.

It is evident from the issues formulated and litigated in the
court below, which are again being raised in this appeal by the
plaintiffs-appellants, that the controversy lies on the effect of the execution
of the extrajudicial partition of 1951, which was duly recorded in the Registry
of Deeds, upon the 1930 agreement which, although embodied in a public
instrument, was admittedly not registered.^[1]
For, if there was a valid partition of Lot No. 228 (one of the properties
included in the 1930 agreement) and ownership of the portions respectively
assigned to the heirs thereunder had indeed passed to
the latter, then the sale of Lot No. 228-D to Esmeralda Broce
in 1962 would also be valid.  Upon the
other hand, if there was proper cancellation and substitution of that 1930
settlement, by the extrajudicial partition of 1951, wherein the heirs agreed
to, form a co-ownership of the whole Lot 228, then what could be acquired by defendant-appellee
Esmeralda Broce would only be an undetermined 1/4
share of the same lot.

The issue – of the effect
of an unregistered extrajusdicial settiernent^[2] among the heirs of the estate of a deceased
person – is not new.  It was previously
resolved by this Court in favor of the validity of that partition in the case
of Hernandez vs. Andal, 78 Phil. 196, in this wise:

“Is section 1 of Rule 74 constitutive and not merely evidential
of partition?  In other words, is writing
the act that confers legal validity upon the agreement?  There are no indications in the phraseology
of this rule which justify an affirmative answer to these ques­tions.  It must be noted that where the law intends a writing or other formality to be the essential requisite to the validity of the transaction, it says
so in clear and unequivocal terms.  Thus,
the statute of frauds as originally enacted in England and as enacted in some
of the states, uses the words ‘utterly void’ with refer­ence to certain
transactions.  Under the terms of such
statute transactions required to be in writing are absolutely void and not
merely voidable if not made in the manner
indicated.  Again article 633 of the
Civil Code says that donation may be valid only when
made in a public document.  Article 146
of the Mortgage Law makes known
its intention to have the
execution of a public instrument and its registration in the registry indispensable to the validity of the contract by using this
phrase:  ‘in order that voluntary
mortgages may be legally created in a valid manner.’ Article 1765 of the Civil
Code also employs for the same purpose similar expression with reference to the
execution of a public document:  ‘in
order that mortgage may be validly constituted,’ And with respect to the formalities of last wills and
testaments, section 618 of Act No. 190 makes this emphatic statement:  ‘No will shall be valid to pass upon any
estate real or personal nor charge or affect the same, unless it be written
etc.’ Other examples might be mentioned.

“Section I of Rule 74 contains no such express or clear declaration that the required public instrument is to
be constitutive of a contract of partition or an inherent element of its
effectiveness as between the parties.  And this Court had no apparent reason, in adopting this rule, to make the
efficacy of a partition as between the parties dependent on the execution of a
public instrument and its registration.  x x x.”
(78 Phil. 204-205).

Touching
on the purpose of the registration-requirement in the said, provision, this
Court ruled in the same case:

“The requirement that a partition be put in a public document
and registered has, in our opinion, for its purpose the protection of creditors
and at the same time the protection of the heirs themselves against tardy
claims.  Note that the last sentence of
the sec­tion speaks of debts and creditors. 
The object of registration is to serve as constructive notice, and this
means notice to others.  It must follow
that the intrinsic validity of a
partition not executed with the prescribed formalities does not come into play
when, as in this case, there are no creditors or the rights of the creditors are not affected.  No rights of creditors being involved, it is
competent for the heirs of an estate to enter into an agreement for
distribution in a manner and upon a plan different from those provided by
law.” (Cas. cit.,
pp. 208-209).

There is nothing here on record to indicate that when the first partition
agreement was entered into, there existed any claim against the estate of the
deceased or that prejudice was thereby caused to any third party.  Considering that a voluntary division of the
estate of the deceased, by the heirs among themselves, is conclusive^[3]
and confers upon said heirs exclusive ownership of the respective portions
assigned to them,^[4]
the extrajudicial partition made by the heirs of Severo
Oyod in 1930 could not have been cancelled or substituted by the
execution, by some of these heirs, of another extrajudicial settlement of the
same estate in 1951 even if the latter document be registered, particularly
since one of the co-signers of the 1930 agreement, Eugenia Oyod,
had died on January 8, 1950 (Exh. D) before the second extrajudicial settlement was made.  The lower court, therefore, committed no
error in holding that the sale to defendant-appellee
Esmeralda Broce of Lot 228-D
in 1962 did not suffer from any infirmity.

A second reason is that it is not shown that the appellee Broce had notice or
knowledge of the second partition of 1951. 
As the 1930 partition was operative to vest title in Fortunata Oyod to the lot
allotted to her even if the agreement was unrecorded, Brace had reason to rely
thereon.

However, there is no basis to the lower court’s order to
defendant-appellant, Esmeralda Broce, to assume a
proportionate share of the indebtedness contracted by the surviving heirs of
the deceased Severo Oyod
with the Philippine National Bank.  The
fact alone that the property in dispute originally formed part of the estate of said deceased person and that
the obligation was contracted prior to its purchase by herein
defendant-appellant, to pay the taxes due on the estate of the deceased, does
not render the vendee answerable therefor.  As pronounced by this Court in the case of Habaña vs. Imbo, supra
if there is really need to sell properties belonging to an heir to pay the
debts of the estate, there should first be exhaustion of other properties still
owned by the said heir.  In the present
case, there is no proof that the heirs of Fortunata Oyod received from the estate of Severo Oyod no property other than Lot 228-D. 
Furthermore, it does not even appear that this obligation to the
Philippine National Bank was duly constituted as an encumbrance on the whole Lot 228. 
As mere vendee of Lot 228-D,
defendant-appellant cannot be required to share in the pay­ment of an
obligation contracted by the heirs of the estate, of which she is not one.

WHEREFORE, as above modified, the decision appealed from
is hereby affirmed.  Costs
against plaintiffs-appellants.

Concepcion, C.J., Dizon,
Makalintal, Zaldivar,
Sanchez, Castro, and Angeles, JJ., concur.

^[1]
By the 1951 agreement, the heirs (except Eugenia Oyod)
agreed to hold the properties pro–indiviso, while in the 1930 settlement, the
heirs allocated to each a specific portion of the properties left by their
common ancestor.

^[2]
Under Section 1 of Rule 74 of the Rules of Court, the heirs may divide the
estate of a deceased person among themselves as hey see fit “by means of a
public instrument filed in the office of the register of deeds”.

^[3]
Leaño vs.
Leaño 25 Phil. 180, 184.

^[4]
Habaña vs.
Imbo, L-15598 & L-15726, March 31, 1964; Art. 1068, Civil Code of 1889.