DANILO A. AQUINO, LOURDES A. AGUSTIN, ANSELMO A. AQUINO, PLACIDO A. AQUINO, ROSALINA A. GALOPE, ALFREDO L. AQUINO III, VIRGINIA A. DE LOS REYES, TEODULO A. AQUINO AND NORMA A. C…

Aquino versus Aquino

The Case

This is an appeal brought by Estelita Aquino and her co-defendants against their own relatives, Danilo Aquino and the other plaintiffs, in an action for judicial partition of a parcel of land in Malate, Manila that their deceased parents left to eleven heirs. The plaintiffs asked the trial court to divide the property among the co-owners; the defendants resisted, insisting that the plaintiffs had already sold their shares to a third person named Wally dela Cruz, that this buyer was therefore an indispensable party who had not been impleaded, and that they themselves should have been given the first chance to buy. The case matters because it gathers in one decision the two phases of a partition suit, the waiver of defenses not pleaded, the rule that ownership is not transferred by mere agreement but by delivery, the absence of any pre-emptive right among co-owners, and the consequence of failing to make a formal offer of evidence.

Procedural History

The plaintiffs filed a complaint for judicial partition before Branch 42 of the Regional Trial Court of Manila. After trial, that court rendered a decision ordering the partition of the subject property. The defendants moved for reconsideration, and the motion was denied. They then filed a notice of appeal, which the trial court gave due course. The appeal went up to the Supreme Court, which decided the case through its Third Division.

Facts

Alfredo Aquino and Marcelina Amor-Aquino owned a parcel of land with improvements in Malate, Manila, covered by a transfer certificate of title. When both parents died, the property passed by intestate succession to their heirs, eleven in number, among them the plaintiffs and the defendants. The defendants are the widow and children of a deceased brother, Virgilio Aquino, and one defendant is a half-sister of the plaintiffs.

In August 2007 the plaintiffs told the defendants they wanted an extra-judicial partition. The parties first agreed to sell the whole property to one buyer, and the plaintiffs' sister negotiated a sale to Wally dela Cruz for two million five hundred thousand pesos. The defendants changed their minds and refused to sign the deed of sale, finding the price too low and having no other place to transfer to. They asked instead to be given the area they were occupying, which was practically the entire property. Negotiations failed, and a letter requesting a meeting went unheeded, so the plaintiffs filed the complaint for partition.

In their answer the defendants denied the meetings but admitted the initial agreement to sell, and by counterclaim sought damages for the alleged demolition of part of the house and reimbursement of taxes and preservation expenses. At trial the plaintiffs presented Danilo Aquino, while the defendants presented Mary Antonette Manuel and Estelita Aquino. The trial court ordered partition, and the defendants appealed.

Issues

• Whether or not the trial court erred in ordering partition despite the absence of Wally dela Cruz, whom the defendants claim to be an indispensable party.
• Whether or not the defendants may still raise the non-inclusion of Wally dela Cruz after failing to plead it in their answer and after it was excluded from the pre-trial order.
• Whether or not the defendants have a right of first refusal over the shares of the plaintiffs.
• Whether or not the defendants are entitled to restitution in the form of damages and attorney's fees.

Applicable Provisions

Section 1 of Rule 9 of the Rules of Court provides:

Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim.

This is the omnibus motion rule, and it bars the defendants from raising the indispensable party question for the first time on appeal.

Section 7 of Rule 18 of the Rules of Court provides:

Record of pre-trial. The proceedings in the pre-trial shall be recorded. Upon the termination thereof, the court shall issue an order which shall recite in detail the matters taken up in the conference, the action taken thereon, the amendments allowed to the pleadings, and the agreements or admissions made by the parties as to any of the matters considered. Should the action proceed to trial, the order shall explicitly define and limit the issues to be tried. The contents of the order shall control the subsequent course of the action, unless modified before trial to prevent manifest injustice.

This confines the trial to the issues fixed at pre-trial, and the indispensable party question was not among them.

Article 1496 of the Civil Code provides:

The ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee.

This is the rule of delivery, which defeats the claim that the plaintiffs had already parted with their shares.

Article 1497 of the Civil Code provides:

The thing sold shall be understood as delivered when it is placed in the control and possession of the vendee.

This defines when delivery takes place, and the records show no such transfer to Wally dela Cruz.

Ruling

On the first issue, the Court held that a co-owner is indeed an indispensable party in a partition case, but that the defendants bore the burden of proving by convincing evidence that Wally dela Cruz had become a co-owner. He who asserts, not he who denies, must prove. The alleged deed of sale was not in the records, and even granting Danilo's admission that it was executed, ownership is not acquired by mere agreement but by tradition or delivery. There was no allegation or proof that Wally dela Cruz had taken actual possession, and no showing that the sale was embodied in a public instrument. The sale was not consummated, so Wally dela Cruz was not a co-owner and not an indispensable party.

On the second issue, the Court held that the defendants were proscribed from raising the matter at all, since they did not plead it in their answer and it was not included in the pre-trial order. The only grounds a court may notice even if not pleaded are lack of jurisdiction over the subject matter, another action pending between the same parties for the same cause, and bar by prior judgment or by statute of limitations, and none of these exists here. The rules speak in clear and categorical language, so there is no occasion for interpretation, only room for application.

On the third issue, the Court found no merit in the claim of a right of first refusal. The legal provisions on co-ownership do not grant to any co-owner a pre-emptive right to purchase the pro-indiviso shares of his co-owners. The Court added that the defendants may still exercise their right of legal redemption under Article 1620 of the Civil Code once it is established that the plaintiffs have actually sold and transferred their shares to a third party.

On the fourth issue, the Court ruled against the defendants for lack of factual basis. The burden of proof lies on the party who makes the allegations, and the defendants failed to make a formal offer of evidence within the time given, which is deemed a waiver; evidence not offered is excluded and rejected. Their monetary claims, moreover, belong to the second phase of partition.

The Court explained that a partition suit has two phases. In the first, the court determines whether a co-ownership in fact exists and whether partition is proper; until that is definitely resolved, it is premature to effect a partition. In the second, the court undertakes the partition itself with the assistance of not more than three commissioners, and deals with the accounting and the award of shares in the rents and profits.

Doctrine

A partition suit has two phases: the first determines whether co-ownership exists and whether partition is proper, and the second effects the partition and the accounting. Defenses and objections not pleaded in a motion to dismiss or in the answer are deemed waived, save only lack of jurisdiction over the subject matter, another action pending between the same parties for the same cause, and bar by prior judgment or by statute of limitations. The issues to be tried are limited to those defined in the pre-trial order, which controls the subsequent course of the action. A co-owner is an indispensable party in a partition case, but the party asserting that a third person has become a co-owner must prove it, for he who asserts, not he who denies, must prove. Ownership of the thing sold is not acquired by mere agreement but by delivery, actual or constructive. The legal provisions on co-ownership grant no co-owner a pre-emptive right to purchase the pro-indiviso shares of his co-owners; his remedy is legal redemption under Article 1620 of the Civil Code once a sale to a third party is established. Evidence not formally offered is excluded and rejected.

Disposition

The Supreme Court denied the appeal and affirmed in full the decision of the trial court ordering the partition of the subject property.

Remember This

Memorize this line: ownership of the thing sold is not acquired by mere agreement but by delivery, so an alleged buyer who never took possession is not a co-owner and not an indispensable party. Examiners use this case for the two phases of partition, the omnibus motion rule and the pre-trial order, the absence of a pre-emptive right among co-owners, and the waiver arising from failure to make a formal offer of evidence.