ALBERTO HERBON, MARGARITO HERBON AND GABINO HERBON, PETITIONERS, VS. LEOPOLDO T. PALAD AND HELEN P. CAYETANO, RESPONDENTS.

Herbon versus Palad

The Case

This is a petition for review on certiorari brought by Alberto Herbon, Margarito Herbon and Gabino Herbon against Leopoldo T. Palad and Helen P. Cayetano. The respondents sued the petitioners for recovery of possession of a portion of a registered agricultural lot in Bagac, Bataan, claiming a better right as the grandchildren and successors-in-interest of the deceased registered co-owner Gonzalo Palad. The petitioners resisted on the ground that they are themselves co-owners by inheritance from their mother, Remedios Torres, who was Gonzalo's surviving spouse in his second marriage. The case matters because it settles two things every reviewee must carry into the bar: the strict standard for proving a purchase money resulting trust by oral evidence, and the rule that a co-owner may not be ejected from the common property before partition.

Procedural History

After the barangay conciliation failed, the respondents filed a complaint for recovery of possession of real property with damages before the Regional Trial Court, Branch 1, Balanga, Bataan. The trial court dismissed the complaint and ordered the respondents to pay attorney's fees and the costs of suit, holding that the petitioners had shown themselves to be co-owners and could not be ejected absent a definite portion allotted to them. The respondents appealed to the Court of Appeals, which set aside the trial court's decision and ordered the petitioners to vacate the premises in favor of the respondents. The petitioners filed no motion for reconsideration and went straight to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

In his lifetime, Gonzalo Palad was a co-owner of Lot 421, an agricultural land of 32,944 square meters in Poblacion, Bagac, Bataan, covered by a transfer certificate of title. His share was one-fourth and one-fourteenth, and it was conjugal property acquired during his marriage to his first wife, Alejandra Nava. Alejandra died during the Japanese Occupation. On September 14, 1949, Gonzalo married Remedios Torres, a widow who had three sons from her previous marriage, the herein petitioners. That second union bore no children. Gonzalo died on November 16, 1983, and Remedios died on November 9, 1992.

Thereafter, the petitioners took possession of a portion of Lot 421 and refused the respondents' demands to vacate. The respondents claimed that Gonzalo had intended his share in Lot 421 to go to their father, Ignacio, and that the clan tradition was that inherited land should be sold only to clan members. The petitioners, for their part, produced two deeds of absolute sale: one dated December 9, 1957, in which Jacinto Palad sold his shares to Gonzalo, Adelaida and Ignacio, and one dated December 16, 1957, in which the sisters Modesta and Concordia Nojadera sold their separate shares to the same three vendees. The petitioners argued that these shares, acquired during Gonzalo's marriage to Remedios, formed part of the conjugal partnership, and that Remedios inherited a portion of Gonzalo's estate which in turn passed to them as her compulsory heirs.

In rebuttal, two witnesses testified that it was Benjamin, Gonzalo's son, who actually paid for Jacinto's shares, and Concordia Nojadera disowned the second deed and her signature on it. The trial court believed the petitioners and dismissed the complaint. The Court of Appeals reversed, finding an implied trust in favor of Benjamin, declaring the second deed void for forgery, and holding that the respondents had the better title.

Issues

• Whether or not the Court may review the factual findings of the Court of Appeals in a petition for review on certiorari.
• Whether or not a purchase money resulting trust was established by the oral testimony that Benjamin paid for Jacinto's shares.
• Whether or not the notarized deed of sale executed by Modesta and Concordia was void for forgery.
• Whether or not the petitioners, as heirs of Remedios, are co-owners entitled to remain in possession of Lot 421.

Applicable Provisions

Article 1448 of the Civil Code provides:

Article 1448. There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.

This is the provision under which the Court of Appeals found a trust in favor of Benjamin, and which the Supreme Court holds was not sufficiently proved.

Article 960 of the Civil Code provides:

Article 960. Legal or intestate succession takes place: (1) If a person dies without a will, or with a void will, or one which has subsequently lost its validity.

This governs the disposition of Gonzalo's estate, there being no written will, and it defeats the claimed clan tradition.

Article 996 of the New Civil Code provides:

Article 996. If a widow or widower and legitimate children or descendants are left, the surviving spouse has in the succession the same share as that of each of the children.

This is the basis for Remedios inheriting from Gonzalo, and in turn for the petitioners inheriting from her.

Article 887 of the New Civil Code provides:

Article 887. The following are compulsory heirs: (1) Legitimate children and descendants, with respect to their legitimate parents and ascendants.

This makes the petitioners compulsory heirs of their mother Remedios.

Ruling

On the first issue, the Court acknowledged that its jurisdiction in a petition for review is generally limited to questions of law, and that findings of fact of the appellate court are conclusive. It nevertheless held that several recognized exceptions applied, among them that the inference made was manifestly mistaken, that the judgment rested on a misapprehension of facts, that the findings were conflicting, and that the findings were contrary to those of the trial court. The Court therefore reviewed the facts.

On the second issue, the Court held that the parol evidence of an implied trust was lean, frail and far from convincing. The testimonies that Benjamin paid for Jacinto's shares were vague and contained no specifics, and the witnesses were strangers to the intent of the contracting parties. The Court stressed that the intention of the parties is deciphered from the language of the contract itself, and the deed clearly named Gonzalo, Adelaida and Ignacio as vendees. No trust was established.

On the third issue, the Court held that notarization converts a private document into a public one, clothed with the presumption of regularity and entitled to full faith and credit. Mere denial by Concordia could not prevail over that presumption, and forgery cannot be presumed but must be proved by clear, positive and convincing evidence. No specimen signatures were offered for comparison, and comparing the two signatures on the same document proves nothing. The deed stands.

On the fourth issue, the Court held that in the absence of a will, the law on intestate succession governs, and the so-called Palad tradition cannot supersede it. The shares Gonzalo acquired during his first marriage were conjugal, so that upon Alejandra's death one-half was reserved to Gonzalo and her rights to the other half passed to her children and surviving spouse. The shares acquired under the two deeds during his marriage to Remedios were likewise conjugal, so that upon Gonzalo's death one-half was reserved to Remedios, while his rights to the other half passed to his widow and his children. Upon Remedios's death, her inherited shares passed to the petitioners as her compulsory heirs. The petitioners are therefore co-owners with the right to possess, and until partition the provisions on co-ownership govern.

Doctrine

First, a purchase money resulting trust under Article 1448 must be proved by clear and convincing evidence; though oral evidence is allowed, it must be trustworthy and received with extreme caution, and must be as fully convincing as an authentic document. Second, the intention of the parties to a contract is determined from the language of the deed, not from the post facto assertions of strangers. Third, a notarized deed enjoys the presumption of regularity and can be overthrown only by strong, complete and conclusive proof of falsity; forgery is never presumed. Fourth, intestate succession, not clan custom, governs the estate of one who dies without a will. Fifth, a co-owner may not be ejected from the common property; the proper remedy is an action for partition, where the specific shares are determined.

Disposition

The petition was granted; the decision of the Court of Appeals was reversed and set aside, and the decision of the trial court dismissing the complaint was reinstated, with no costs.

Remember This

Memorize this line: a co-owner cannot be ejected from the common property before partition, and an implied trust cannot rest on vague oral testimony. Examiners use this case for the requisites of a purchase money resulting trust, the presumption favoring notarized deeds against bare claims of forgery, and the rule that intestate succession prevails over family tradition.