HEIRS OF JACINTO GADINGAN, NAMELY: JUAN, FERDIE, BERNARDINO AND PATRICIA, ALL SURNAMED MABBORANG Y GADINGAN, PLAINTIFFS-APPELLEES, VS.JUAN TORRENTE, EUGENIO TORRENTE, MARIO AGUS…

Heirs of Gadingan versus Torrente

The Case

This is a case about co-ownership of a homestead. The Heirs of Jacinto Gadingan, namely Juan, Ferdie, Bernardino and Patricia, all surnamed Mabborang, sued Juan Torrente, Eugenio Torrente, Mario Agustin, Victor Agustin, Isidro Guiab, Maria Agustin and Eleutria Guiab for recovery of possession, damages and injunction over a parcel of land in Echague, Isabela. The plaintiffs claim the land under a certificate of title issued in the name of the Heirs of Jacinto Gadingan. The defendants claim portions of the same land by purchase from the Balayans, who are themselves grandchildren of Jacinto Gadingan. The case matters because it teaches two enduring rules: a certificate of title cannot be attacked collaterally, and a co-owner may sell only his own undivided share, never the shares of his co-owners. It also teaches the correct remedy when co-owners sell without the consent of the others, which is partition, not recovery of possession.

Procedural History

The plaintiffs filed their complaint for recovery of possession, damages and injunction before the Regional Trial Court, Branch 24, Echague, Isabela. The trial court rendered judgment in favor of the plaintiffs. It recognized a co-ownership between the plaintiffs and the Balayans, sustained the plaintiffs' personality to sue and their ownership under their certificate of title, declared void the sale made by Francisco Balayan in favor of the defendants, voided the certificate of title issued in the name of Cornelio Agustin and Dolores Agustin, ordered the defendants to vacate the property, and held Juan Torrente and Eugenio Torrente liable for actual damages of 50,000 pesos and attorney's fees of 30,000 pesos. The defendants moved for reconsideration, which the trial court denied. The defendants then appealed to the Supreme Court, assigning five errors against the trial court's decision.

Facts

The late Jacinto Gadingan filed a homestead application over three lots in Malitao, Echague, Isabela, with an aggregate area of 194,350 square meters. During the pendency of the application, Jacinto died and was substituted by his son-in-law Francisco Balayan and his grandchild Antonio Balayan. While the application was pending, Francisco sold one hectare to Juan Torrente and four hectares to Leonardo Agustin, and Antonio sold a portion of one lot to Eugenio Torrente. A certificate of title was later issued in the name of Antonio Balayan over a lot of 42,653 square meters.

The other heirs of Jacinto Gadingan, represented by Domingo Mabborang, protested the substitution and transfer of the homestead rights. The Land Management Bureau issued an order revoking the proposed transfer to Francisco Balayan and giving due course to the homestead application of Jacinto Gadingan, represented by Domingo Mabborang. That order became final, and a writ of execution required Francisco Balayan, his children Jose and Antonio Balayan, and the tenants Juan Torrente, Eugenio Torrente, Leonardo Agustin, Maria Agustin and Isidro Guiab to surrender possession to the plaintiffs. A certificate of delivery of possession was issued, and a certificate of title was later issued in the name of the Heirs of Jacinto Gadingan, represented by Domingo Mabborang.

In 2003, the plaintiffs filed the complaint for recovery of possession, damages and injunction. During trial, the trial court found that the Balayans are also grandchildren of Jacinto Gadingan, and so it recognized a co-ownership between the plaintiffs and the Balayans. The trial court ruled for the plaintiffs, declared the sales void, and ordered the defendants to vacate. The defendants appealed, arguing that the Balayans were indispensable parties who were not impleaded, that the plaintiffs' title was void, and that in any event the defendants, as buyers from co-owners, had become co-owners themselves.

Issues

• Whether or not the Balayans are indispensable parties whose non-joinder renders the proceedings void, such that the complaint should be dismissed.
• Whether or not the certificate of title of the plaintiffs may be attacked as void in this action for recovery of possession.
• Whether or not the plaintiffs have a superior right to possess the lots occupied by the defendants.
• Whether or not the defendants, as buyers from the Balayans, became co-owners of the property, and whether recovery of possession is the proper remedy.
• Whether or not the plaintiffs are entitled to damages and attorney's fees.

Applicable Provisions

Section 7, Rule 3 of the Revised Rules of Court defines indispensable parties, and the Court uses it to test whether the Balayans had to be joined:

Section 7. Compulsory joinder of indispensable parties. — Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants.

Article 487 of the Civil Code allows any co-owner to bring an action for the recovery of co-owned property, and it is the basis for holding that only the suing co-owner is indispensable:

Article 487. Any one of the co-owners may bring an action in ejectment.

Article 493 of the Civil Code defines the rights of a co-owner over his undivided share, and it is the provision the Court quotes in full to resolve the validity of the sales:

Article 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

This provision bears on the case because it limits the effect of the Balayans' sales to the shares that may be allotted to them upon partition, and it is the reason the sales are valid only as to their undivided shares.

Ruling

On the first issue, the Court held that the Balayans are not indispensable parties. In suits to recover co-owned property, all co-owners are real parties in interest, but under Article 487 any one of them may bring any kind of action for the recovery of the co-owned property. Only the co-owner who filed the suit is indispensable. The other co-owners are not even necessary parties, because complete relief can be afforded without them, since the suit is presumed to have been filed for the benefit of all co-owners. The defendants therefore cannot seek dismissal on this ground.

On the second issue, the Court held that the defendants' argument that the plaintiffs' title is void is a collateral attack on the certificate of title. A certificate of title cannot be subject to collateral attack and can be altered, modified or cancelled only in a direct proceeding in accordance with law. The trial court correctly sustained the validity of the plaintiffs' certificate of title.

On the third issue, the Court partly agreed with the defendants. The surveyor's report, the sketch plan and the consolidation plan established that the lot of 42,653 square meters owned by Eugenio Torrente is not included in the plaintiffs' certificate of title. The plaintiffs therefore cannot claim possession of that lot, and the trial court erred in sustaining their right of possession over it.

On the fourth issue, the Court held that the property covered by the plaintiffs' title is co-owned by the Balayans and the plaintiffs. Under Article 493, every co-owner has full ownership of his undivided interest and may alienate it, but he cannot alienate the shares of his co-owners, because no one can give what he does not have. The plaintiffs never questioned the sale by the Balayans of their respective shares. The rights of the Balayans as co-owner-sellers were therefore transferred to the defendants as buyers, making the defendants co-owners of the property. The proper action in cases like this is not the nullification of the sale or the recovery of possession from the third person who substituted the co-owner, but the division of the common property as if it continued to remain in the possession of the co-owners who sold. The appropriate recourse of co-owners whose consent was not secured in a sale of undivided shares is an action for partition. Neither recovery of possession nor restitution can be granted, since the defendant buyers are legitimate proprietors and possessors in joint ownership of the common property claimed. The Court then divided the 194,350 square meter property between the two children of Jacinto Gadingan, Luisa Gadingan Balayan and Maria Gadingan Mabborang, each inheriting 97,175 square meters. The shares of Luisa passed to the Balayans, and the shares of Maria passed to the plaintiffs. The conveyances by the Balayans in favor of the defendants are therefore valid insofar as they involve the Balayans' share of 97,175 square meters.

On the fifth issue, the Court held that the plaintiffs are not entitled to attorney's fees, because the defendants had the right not to surrender possession, since they too are co-owners with the right to possess the property.

Doctrine

Three rules must be retained. First, in a suit to recover co-owned property, only the co-owner who filed the suit is an indispensable party; the other co-owners are not even necessary parties, because under Article 487 any one co-owner may bring any kind of action for the recovery of the co-owned property, and the suit is presumed filed for the benefit of all. Second, a certificate of title cannot be attacked collaterally; it can be altered, modified or cancelled only in a direct proceeding in accordance with law. Third, under Article 493, a co-owner has full ownership of his undivided share and may alienate it, but he cannot alienate the shares of his co-owners, because no one can give what he does not have. The effect of the alienation is limited to the portion that may be allotted to the seller upon partition. Where co-owners sell their undivided shares without the consent of the others, the proper remedy is an action for partition, not recovery of possession or nullification of the sale, because the buyers step into the shoes of the sellers and become co-owners themselves.

Disposition

The Supreme Court granted the appeal, reversed and set aside the decision of the trial court, declared the sale by the Balayans valid insofar as it involves their undivided share of 97,175 square meters, and dismissed the complaint for recovery of possession, damages and injunction.

Remember This

Memorize this line: a co-owner may sell only his own undivided share, never the shares of his co-owners, and the remedy of the other co-owners is partition, not recovery of possession. Examiners like to use this case on the indispensable party rule in suits to recover co-owned property, on the prohibition against collateral attack on a certificate of title, and on the rights of a co-owner under Article 493 of the Civil Code.