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June 16, 2014

Lacbayan vs. Samoy

Facts:

  • Betty Lacbayan (petitioner) and Bayani S. Samoy (respondent) had an illicit relationship. 
  • During their relationship, they, together with three more incorporators, were able to establish a manpower services company.
  • The company acquired five parcels of land were registered in petitioner and respondent’s names, ostensibly as husband and wife.
  • When their relationship turned sour, they decided to divide the said properties and terminate their business partnership by executing a Partition Agreement.
  • Initially, respondent agreed to petitioner’s proposal that the properties in Malvar St. and Don Enrique Heights be assigned to the latter, while the ownership over the three other properties will go to respondent.
  • However, when Lacbayan wanted additional demands to be included in the partition agreement, Samoy refused.
  • Feeling aggrieved, petitioner filed a complaint for judicial partition of the said properties.
  • Petitioner’s contention: She claimed that they started to live together as husband and wife in 1979 without the benefit of marriage and worked together as business partners, acquiring real properties amounting to P15,500,000.00.
  • Respondent’s contention: He purchased the properties using his own personal funds.
  • RTC and CA ruled in favor or respondent. 

Issues:
1. WON an action for partition precludes a settlement on the issue of ownership.
2. Would a resolution on the issue of ownership subject the Torrens title issued over the disputed realties to a collateral attack?

Held: 

1. No.

While it is true that the complaint involved here is one for partition, the same is premised on the existence or non-existence of co-ownership between the parties. Until and unless this issue of co-ownership is definitely and finally resolved, it would be premature to effect a partition of the disputed properties. More importantly, the complaint will not even lie if the claimant, or petitioner in this case, does not even have any rightful interest over the subject properties.

A careful perusal of the contents of the so-called Partition Agreement indicates that the document involves matters which necessitate prior settlement of questions of law, basic of which is a determination as to whether the parties have the right to freely divide among themselves the subject properties.

2. No. 

There is no dispute that a Torrens certificate of title cannot be collaterally attacked, but that rule is not material to the case at bar. What cannot be collaterally attacked is the certificate of title and not the title itself. The certificate referred to is that document issued by the Register of Deeds known as the TCT. In contrast, the title referred to by law means ownership which is, more often than not, represented by that document. 

Moreover, placing a parcel of land under the mantle of the Torrens system does not mean that ownership thereof can no longer be disputed. Mere issuance of the certificate of title in the name of any person does not foreclose the possibility that the real property may be under co-ownership with persons not named in the certificate, or that the registrant may only be a trustee, or that other parties may have acquired interest over the property subsequent to the issuance of the certificate of title. Needless to say, registration does not vest ownership over a property, but may be the best evidence thereof.

Other topic: 

Whether respondent is estopped from repudiating co-ownership over the subject realties.

YES. Petitioner herself admitted that she did not assent to the Partition Agreement after seeing the need to amend the same to include other matters. Petitioner does not have any right to insist on the contents of an agreement she intentionally refused to sign.

Moreover, to follow petitioner’s argument would be to allow respondent not only to admit against his own interest but that of his legal spouse as well, who may also be lawfully entitled co-ownership over the said properties.

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