[G.R. No. 143297. February 11, 2003]
SPOUSES VIRGILIO and MICHELLE CASTRO, MOISES B. MIAT and ALEXANDER V. MIAT, petitioners, vs. ROMEO V. MIAT, respondent.
D E C I S I O N
This is a petition for review on certiorari of the decision rendered by the Court of Appeals in CA-G.R. CV No. 43053, entitled “Romeo V. Miat vs. Spouses Virgilio and Michelle Castro, Moises B. Miat and Alexander V. Miat,” dated November 29, 1999.
The evidence shows that the spouses Moises and Concordia Miat bought two (2) parcels of land during their coverture. The first is located at Wawa La Huerta, Airport Village, Parañaque, Metro Manila and covered by TCT No. S-33535. The second is located at Paco, Manila, and covered by TCT No. 163863. Concordia died on April 30, 1978. They had two (2) children: Romeo and Alexander.
While at Dubai, United Arab Emirates, Moises agreed that the Parañaque and Paco properties would be given to Romeo and Alexander. However, when Moises returned in 1984, he renegotiated the agreement with Romeo and Alexander. He wanted the Parañaque property for himself but would leave the Paco property to his two (2) sons. They agreed.
It appears that Moises and Concordia bought the Paco property on installment basis on May 17, 1977. However, it was only on December 14, 1984 that Moises was able to pay its balance. He secured the title over the property in his name as a widower. According to Romeo, Moises violated the agreement that their (Romeo’s and Alexander’s) names would be registered in the title once the balance was paid. Upon demand, Moises gave the owner’s duplicate of the Paco property title to Romeo.
Romeo and Alexander lived on the Paco property. They paid its realty taxes and fire
insurance premiums. In early August 1985, Alexander and his
first wife left the house for personal reasons. In April 1988, Alexander agreed to sell to Romeo his share in the
Paco property for
P42,750.00. He received a partial payment of P6,000.00
from Romeo. Nonetheless, he never executed a deed of
assignment in favor of Romeo, as he “had lots of work to do and had no time and
x x x there [wa]s nothing to worry [as] the title [wa]s in [Romeo’s]
In February 1988, Romeo learned from his godmother in his
wedding, Mrs. Rosalina Castro, mother of petitioner Virgilio Castro, that she
had given Moises
P30,000.00 as downpayment for the sale by Moises of the
Paco property to her son Virgilio.
On December 1, 1988, Romeo was brought by petitioner Virgilio
Castro to the chambers of Judge Anunciacion of the Metropolitan Trial Court of
Manila where the status of the Paco property was discussed. On December 16, 1988, he received a letter
from petitioner Castro’s lawyer asking for a conference. Romeo was informed that the Paco property
had been sold to Castro by Moises by virtue of a deed of sale dated December 5,
for ninety-five thousand (
Ceferino Miat, brother of petitioner Moises,
testified that even before the death of Concordia
there was already an agreement that the Paco property would go to Romeo and
Alexander. This was reiterated at the deathbed of
Concordia. When Moises returned to Manila for good, the
agreement was reiterated in
front of the extended Miat family members. Initially, Romeo and Alexander orally
divided the Paco property between themselves. Later, however, Alexander sold his share to
Romeo. Alexander was given
downpayment. This was corroborated by
Pedro Miranda and Virgilio Miat.
Miranda worked with Moises at the Bayview Hotel and the Hotel Filipinas. His wife is the cousin of Romeo and
Alexander. Virgilio is the brother of Moises.
Moises confirmed that he and his wife Concordia bought the Paco
property on installment from the Fraval Realty, Inc. There was still a balance of
P12,000.00 on the lot at the
time of his wife’s death. He paid P3,500.00 in 1981
and P8,500.00 in 1984. He registered the title in his name. Romeo then borrowed the title as he was
going to mortgage it to his friend Lorenzo.
Later, Moises ran into financial difficulties and he mortgaged
P30,000.00 the Paco property to the parents of petitioner Virgilio
Castro. He informed Romeo and Alexander that he
would be forced to sell the Paco property if they would not redeem the
mortgage. He accompanied his children
to the Manila City Hall to discuss its sale with a judge and a lawyer. Also present in the meeting were petitioner
Virgilio Castro and his parents. After
the conference, he proceeded to sell the property to the petitioners-spouses
Alexander testified that after the sale, his father got one-third
(1/3) of the proceeds while he received two-thirds (2/3). Romeo did not get a single centavo but was
given the right to till their Nueva Ecija property. From his share of the proceeds, Alexander
intended to return to Romeo the
P6,000.00 given him earlier by the
latter. He considered the money to be a
personal debt due Romeo, not Romeo’s downpayment of his share in the Paco
The buyer of the property, petitioner Virgilio P. Castro, testified that he informed Romeo that his father Moises was selling the Paco property. Romeo replied: “Bahala siya.” The second time he informed Romeo about the pending sale was when he brought Romeo, Alexander and Moises to Judge Anunciacion to “consult him [as to] who has [the] right over the [Paco] property.” He further declared that he “went to the Metropolitan Trial Court because [he] wanted to be sure whether [he] could buy the property.” During the meeting, he was told by Romeo that the Paco property was already given to him (Romeo) by Moises. He admitted knowing that the title to the Paco property was in the possession of Romeo. However, he proceeded with the sale. Moises assured him that he would be able to get the title from Romeo.
These events precipitated the case at bar. Romeo filed an action to nullify the sale between Moises and the Castro spouses; to compel Moises and Alexander to execute a deed of conveyance or assignment of the Paco property to him upon payment of the balance of its agreed price; and to make them pay damages.
After trial, the Regional Trial Court rendered its decision, which in its dispositive portion states as follows:
“WHEREFORE, in view of the foregoing, the Court hereby orders the
following: 1) Defendant Alexander V. Miat to execute a deed of sale of his
share in the property upon payment by plaintiff Romeo of the balance of the
purchase price in the sum of
P36,750.00; 2) Plaintiff Romeo V. Miat to
recognize as valid the sale of defendant Moises’ share in the house and lot
located at No. 1495-C Fabie Estate, Paco, Manila; 3) the dismissal of
defendants’ counter-claim; and 4) defendants to pay the costs of suit.”
Both parties appealed to Court of Appeals. On November 29, 1999, the appellate Court modified the Decision as follows:
“WHEREFORE, the appealed decision is MODIFIED as follows:
(1) The deed of sale entered into between defendants-appellants Moises Miat and spouses Virgilio and Michelle Castro is hereby NULLIFIED.
Moises Miat and Alexander Miat are ordered to execute a deed of conveyance over
the Paco property with TCT No. 16383 (sic)
in favor of plaintiff-appellant Romeo Miat, upon payment by Romeo Miat of the
balance of the purchase price in the sum of
are ordered, jointly and severally, to pay plaintiff-appellant attorney’s fees
in the amount of
P30,000.00 and to pay the costs of suit.”
Reconsideration was denied on May 17, 2000.
Hence, this petition where the petitioners assign the following errors:
“THE RESPONDENT COURT OF APPEALS GRAVELY ERRED AND DID PETITIONERS AN INJUSTICE IN MODIFYING OR REVERSING THE DECISION OF THE TRIAL COURT DATED MARCH 17, 1993 WHICH ORDERED RESPONDENT ROMEO MIAT TO RECOGNIZE AS VALID THE DEED OF SALE ENTERED INTO BETWEEN PETITIONERS MOISES MIAT AND SPS. VIRGILIO AND MICHELLE CASTRO PERTAINING TO PETITIONER MOISES MIAT’S SHARE IN THE HOUSE AND LOT LOCATED IN PACO, MANILA, WHEN IT DECLARED SAID DEED OF SALE NULLIFIED.
THE RESPONDENT COURT OF
APPEALS PATENTLY ERRED IN AFFIRMING OR UPHOLDING THE TRIAL COURT’S DECISION
ORDERING ALEXANDER MIAT AND INCLUDING MOISES MIAT TO EXECUTE A DEED OF
CONVEYANCE OVER THE PACO PROPERTY WITH TCT NO. 16383 IN FAVOR OF ROMEO MIAT
UPON PAYMENT BY THE LATTER OF THE BALANCE OF THE PURCHASE PRICE IN THE SUM OF
THE RESPONDENT COURT OF
APPEALS GRAVELY ERRED IN FURTHER ORDERING PETITIONERS TO PAY RESPONDENT,
JOINTLY AND SEVERALLY, ATTORNEY’S FEES IN THE AMOUNT OF
AFFIRMING THE COURT A QUO’S ORDER FOR THE PETITIONERS TO PAY THE COST OF SUIT.”
The issues can be simplified thus:
1. Whether the Paco property is conjugal or capital;
2. Whether there was a valid oral partition covering the said property; and
3. Whether the spouses Castro were buyers in good faith.
The petitioners contend that the Paco property is the capital
property of Moises. They allege that
the spouses Moises and Concordia purchased the property on installment basis in
1977 but stress that it was Moises who paid the balance of twelve thousand (
pesos in 1984. At that time, Concordia
had long been dead. She died in 1978.
Since Moises and Concordia were married before the effectivity of the Family Code, the provisions of the New Civil Code apply.
Article 153(1) of the New Civil Code provides as follows:
“The following are conjugal partnership property:
(1) Those acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses; x x x.”
The records show that the Paco property was acquired by onerous title during the marriage out of the common fund. It is clearly conjugal property.
Petitioners also overlook Article 160 of the New Civil Code. It provides that “all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife.” This article does not require proof that the property was acquired with funds of the partnership. The presumption applies even when the manner in which the property was acquired does not appear.
Petitioners’ reliance on Lorenzo vs. Nicolas is misplaced. That case involved two (2) parcels of land that Magdalena Clemente purchased on installment and started paying for when she was not yet married to Manuel Lorenzo. When she married Manuel Lorenzo she continued to pay the installments in her own name. Upon completion of payment, the deed of final conveyance was executed in her sole favor and the land was registered in the exclusive name of Magdalena Clemente. The Court ruled that the two (2) parcels of land were the paraphernal properties of Magdalena Clemente, thus:
“x x x the fact that all receipts for installments paid even during the lifetime of the late husband Manuel Lorenzo were issued in the name of Magdalena Clemente and that the deed of sale or conveyance of parcel no. 6 was made in her name in spite of the fact that Manuel Lorenzo was still alive shows that the two parcels of land belonged to Magdalena Clemente.” (emphasis supplied)
In the case at bar, Moises and Concordia bought the Paco property during their marriage — Moises did not bring it into their marriage, hence it has to be considered as conjugal.
Likewise, Jovellanos vs. Court of Appeals cited by the petitioners is inapropos. In said case, Daniel Jovellanos, while he was still married to his first wife, Leonor Dizon, entered into a “contract of lease and conditional sale” with Philamlife. He continued paying the rental after the death of his first wife and during the subsistence of his marriage with his second wife, Anette Jovellanos. He completed the payment during the existence of his second marriage. The Court ruled that the property belonged to the conjugal partnership with the second wife as Daniel Jovellanos “acquired ownership thereof only upon full payment of the said amount hence, although he had been in possession of the premises since September 2, 1955, it was only on January 8, 1975 that the Philamlife executed the deed of absolute sale thereof in his favor. x x x Since as early as 1967, he was already married to Annette H. Jovellanos, this property necessarily belonged to his conjugal partnership with his second wife.” In the case at bar, Moises and Concordia executed a Deed of Sale with Mortgage. The contract is one of sale — the title passed to them upon delivery of the Paco property. In fine, title was gained during the conjugal partnership.
The next issue is whether the oral partition between Moises and his sons, Romeo and Alexander, involving the said property is valid. In ruling in favor of its validity which we affirm, the appellate court relied on a portion of Moises’ letter to Romeo, which reads as follows:
“KAYA PAG-USAPAN LANG NINYONG MABUTI ANG ANONG BALAK AT GUSTO NINYONG PAGHATI SA BAHAY, AT YAN AY PAGPAPASIYAHAN KO KONG (sic) MAKAKABUTI SA INYONG DALAWA. AT WALA AKONG HIGIT NA PAPABURAN SA INYONG DALAWA PAREHO KAYONG MAHAL SA AKIN, HINDI AKO TULAD SA IBANG MAGULANG NA HINDI PAREHO ANG PAGTINGIN SA MGA ANAK. ANG BAHAY AY PARA SA INYONG DALAWA, LALO NA NGAYONG MAY ASAWA NA KAYONG PAREHO. x x x” [All caps in the original]
Ceferino Miat, brother of Moises, testified that before Concordia died, there was an agreement that the Parañaque property would go to Moises while the Paco property would go to Romeo and Alexander. This was reiterated at the deathbed of Concordia. When Moises returned to Manila for good, the agreement was affirmed in front of the extended Miat family members. Initially, Romeo and Alexander orally divided the Paco property between them. Later, Alexander sold his share to Romeo.
This agreement was attested to by the extended Miat Family members in a document marked as Exhibit “D,” which reads as follows:
“Pebrero 18, 1989
SA MGA KINAUUKULAN,
Kami, na nakalagda sa ibaba, ay nanunumpa sa harapan ng Punong Barangay, na si G. REYNALDO P. WONG:
Na kami ay mga saksi sa kasunduan nina G. MOISES B. MIAT, asawa ng yumao na, na si Gng. CONCORDIA VALENZUELA MIAT, at mga anak nitong sina G. ROMEO V. MIAT at G. ALEXANDER V. MIAT:
Na ang kasunduan ay ang mga sumusunod:
1. Na ang pag-aaring lupa (132 sq. m.) ng mag-asawa (MOISES at CONCORDIA) sa Airport Village sa Parañaque, Metro Manila ay mapupunta kay G. MOISES B. MIAT;
2. Na ang pag-aaring lupa at bahay (70 sq. m.) ng mag-asawa ring nabanggit ay sa magkapatid na ROMEO at ALEXANDER mapupunta at ito ay nasa address na 1495-C FABIE, PACO, MANILA.
1) Ceferino B. Miat 6) Lorenzo C. Valenzuela
(kapatid ni Moises) (kapatid ni Concordia)
2) Avelina J. Miat 7) Patricio C. Valenzuela
(asawa ni Ceferino) (kapatid ni Concordia)
3) Virgilio Miat 8) Victor C. Valenzuela
(kapatid ni Moises) (kapatid ni Concordia)
4) Aurea Miat-Joson 9) Elsa P. Miranda
(kapatid ni Moises)
5) Jose A. Joson
(asawa ni Aurea)
REYNALDO P. WONG
Kapitan ng Barangay
Sta. Maria, Licab, N.E.”(emphasis supplied)
The consideration for the grant to Romeo and Alexander of the Paco property was best expressed by Moises himself in his letter to Romeo, which reads as follows:
“Labis akong nagpapasalamat at nauunawaan ninyo ang mga pagkakamali ko at mga kasalanan kong nagawa sa inyong mag-iina, huwag kayong mag-alala at lahat nang naipundar namin nang (sic) inyong nanay ay sa inyong dalawang magkapatid mapupunta.”
We also hold that the oral partition between Romeo and Alexander
is not covered by the Statute of Frauds.
It is enforceable for two reasons.
Firstly, Alexander accepted the six thousand (
given by Romeo as downpayment for the purchase of his share in the Paco
property. Secondly, Romeo and his
witnesses, Ceferino Miat and Pedro Miranda, who testified regarding the sale of
Alexander’s share to Romeo, were intensely questioned by petitioners’ counsel.
“[N]o law requires partition among heirs to be in writing and be registered in order to be valid. The requirement in Sec. 1, Rule 74 of the Revised Rules of Court that a partition be put in a public document and registered, has for its purpose the protection of creditors and the heirs themselves against tardy claims. The object of registration is to serve as constructive notice to others. It follows then that the intrinsic validity of partition not executed with the prescribed formalities is not undermined when no creditors are involved. Without creditors to take into consideration, it is competent for the heirs of an estate to enter into an agreement for distribution thereof in a manner and upon a plan different from those provided by the rules from which, in the first place, nothing can be inferred that a writing or other formality is essential for the partition to be valid. The partition of inherited property need not be embodied in a public document so as to be effective as regards the heirs that participated therein. The requirement of Article 1358 of the Civil Code that acts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property, must appear in a public instrument, is only for convenience, non-compliance with which does not affect the validity or enforceability of the acts of the parties as among themselves. And neither does the Statute of Frauds under Article 1403 of the New Civil Code apply because partition among heirs is not legally deemed a conveyance of real property, considering that it involves not a transfer of property from one to the other but rather, a confirmation or ratification of title or right of property that an heir is renouncing in favor of another heir who accepts and receives the inheritance. x x x.”
The appellate court also correctly held that the petitioners-spouses Castro were not buyers in good faith. A purchaser in good faith is one who buys property and pays a full and fair price for it at the time of the purchase or before any notice of some other person’s claim on or interest in it. The rule is settled that a buyer of real property, which is in the possession of persons other than the seller, must be wary and should investigate the rights of those in possession. Otherwise, without such inquiry, the buyer can hardly be regarded as buyer in good faith.
This finding of the appellate court that the Castro spouses were not buyers in good faith is supported by evidence. Petitioner Virgilio Castro admitted in his testimony that Romeo told him that Moises had given the Paco property to them. In fact, they consulted Judge Anunciacion on who had the right to the property — Moises or Romeo. As well pointed out by the appellate court:
“In the case at bench, the said spouses have actual knowledge of the adverse claim of plaintiff-appellant. The most protuberant index that they are not buyers in good faith is that before the sale, Virgilio Castro talked with Romeo Miat on the supposed sale. Virgilio testified that together with Romeo, Alexander and Moses Miat, they went to Judge Anunciacion of Manila in order to find out if Romeo has a right over the property. Romeo told Virgilio in that meeting that Romeo has a right over the Paco property by virtue of an oral partition and assignment. Virgilio even admitted that he knew Romeo was in possession of the title and Romeo then insisted that he is the owner of the property.
x x x x x x x x x
“Virgilio Castro is further aware that plaintiff is in possession of the property, they being neighbors. A purchaser who was fully aware of another person’s possession of the lot he purchased cannot successfully pretend to be an innocent purchaser for value.”
It is abundantly clear that the petitioners-spouses Castro did not buy the Paco property in good faith. They have no right to the property.
WHEREFORE, the decision of the appellate court in CA-G.R. CV No. 43053 is affirmed. Costs against petitioners.
Panganiban, Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur.
 The appellate court’s decision modified that rendered by the trial court on March 17, 1993 in Civil Case No. 89-48182.
 TSN (Romeo Miat), December 9, 1989, p. 9.
 Exhibit “I,” Original Record, p. 258. TCT No. S-27754 covering 264 square meters (Exhibit “G,” Original Record, pp. 254-255), was issued originally to Moises and Concordia Miat on May 6, 1976. After ½ of the property was sold to Trancilacion Miranda Ligas [TSN (Romeo Miat), February 21, 1991, p. 28], TCT No. S-33535 covering 132 square meters, was issued on August 30, 1976.
 TSN (Romeo Miat), December 9, 1989, pp. 7-8.
 Exhibit “C,” Original Record, pp. 184-186.
 TSN (Romeo Miat), August 7, 1990, p. 9.
 Id., pp. 11-12.
Downpayment in the amount of
P1,050.00, Exhibit “B,” Original Record, p.
 Id., p. 9.
 Id., p. 6.
 Id., pp. 13-14.
 Id., p. 15.
 Id., p. 23.
 Id., pp. 25-26.
 Id., p. 27.
 Id., p. 28.
 TSN (Romeo Miat), August 7, 1990, p. 32 [also February 21, 1991, pp. 42-43].
 Id., p. 33.
 Original Record, p. 9 (Deed of Absolute Sale, Annex “B,” Complaint, Civil Case No. 89-48082, RTC, Branch 10, Manila).
 TSN (Ceferino Miat), January 25, 1990, p. 6.
 TSN (Romeo Miat), December 9, 1989, p. 8.
 TSN (Ceferino Miat), April 5, 1990, p. 8.
 Id., p.8.
 TSN (Ceferino Miat), January 25, 1990, p. 11.
 Id., p. 12.
 TSN (Ceferino Miat), April 5, 1990, p. 14.
 TSN (Ceferino Miat), January 25, 1990, p. 12.
 Id., p. 13.
 TSN (Pedro Miranda), April 5, 1990, p. 21.
 TSN (Pedro Miranda), April 5, 1990, p. 20.
 TSN (Moises Miat), September 5, 1991, p. 7.
 Id., p. 8.
 Id., p. 9.
 TSN (Moises Miat), May 2, 1991, p. 6. In the TSN (Moises Miat), September 5, 1991, p. 16, Moises clarified the mortgage to be a “panghahawakan lang ni Lorenzo.” A contrary testimony was given by Alex [TSN (Alex Miat), August 4, 1992, pp. 40-41]: Romeo got the title from their father to lend to Ramon Lorenzo who was using the title to borrow money for himself (Ramon Lorenzo).
TSN (Moises Miat), May 2, 1991, pp. 12-13. In the TSN (Moises Miat), September
5, 1991, pp. 17-22, Moises clarified the mortgage to be actually a promissory
P30,000.00, with the condition that, if the same would not be
paid after one (1) year, he would sell the property to Mr. & Mrs. Levi
Castro for P85,000.00 (actually P95,000.00 as seen in said
promissory note, Exhibit “K,” Original Record, p. 262).
 TSN (Moises Miat), May 2, 1991, pp. 14-15.
 TSN (Alex Miat), August 4, 1992, p. 12.
 Id., pp. 21-26.
 TSN (Virgilio Castro), August 4, 1992, pp. 50-51.
 Id., p. 57.
 Id., p. 60.
 Id., p. 54.
 Id., p. 61.
 Original Record, pp. 1-9 (Complaint, Civil Case No. 89-48082, RTC, Branch 10, Manila).
 Original Record, pp. 311-314.
 Rollo, pp. 25-43.
 Id., p. 17.
 Now Article 117(1) of the Family Code.
 91 Phil. 686 (1952).
 Lorenzo vs. Nicolas, 91 Phil. 686, 692-693 (1952).
 210 SCRA 126 (1992).
 Id., pp. 133-135.
 Salazar vs. Court of Appeals, 258 SCRA 317 (1996).
 Original Record, p. 260, lines 19-24 of Exhibit “J-1,” letter dated July 31, 1983.
 In Exhibit “D,” infra, the second (2nd) kasunduan speaks of “lupa at bahay (70 sq. m.)” going to Romeo and Alexander.
 TSN (Romeo Miat), August 7, 1990 [Original Record, p. 187].
 Other descriptive information, e.g., addresses, voter’s ID No., etc., omitted for brevity.
 TSN (Romeo Miat), February 21, 1991, p. 5 [Note: Read into the record by Romeo Miat. The letter was not, however, marked as an Exhibit.].
 When the nature of the testimonies of Ceferino Miat [TSN, January 25, 1990, pp. 4-5] and Pedro Miranda [TSN, April 5, 1990, p. 18] was offered, i.e., that they were privy to the oral partion of the Paco property between Moises Miat and his two sons and, subsequently, between Romeo and Alexander, no objection was offered by opposing counsel. [“Art. 1405 (New Civil Code). Contracts infringing the Statute of Frauds, referred to in No. 2 of Article 1403, are ratified by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefits under them.”]
 322 SCRA 481, 490-491 (2000).
 Rollo, pp. 39-40 [Decision, CA-G.R. CV No. 43053, November 29, 1999, pp. 15-16].