Uy v. Estate of Fernandez

9/20/2019 SUPREME COURT REPORTS ANNOTATED 822

G.R. No. 200612. April 5, 2017.*

AFAEL C. UY (CABANGBANG STORE), petitioner, vs.
ESTATE OF VIPA FERNANDEZ, respondent.
Remedial Law; Summary Procedure; Section 5 of the 1991

Revised Rules on Summary Procedure provides that affirmative
and negative defenses not pleaded in the answer shall be deemed
waived, except lack of jurisdiction over the subject matter.—
Rafael’s claim that the complaint below should have been
dismissed since Grace Joy has no authority to represent the
Estate of Vipa and that there was lack of prior barangay
conciliation is untenable. Unlawful de-
_______________
** Designated acting member vice Associate Justice Francis H.

Jardeleza per Raffle dated February 13, 2017.
* THIRD DIVISION.

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VOL. 822, APRIL 5, 2017 383

Uy vs. Estate of Vipa Fernandez
www.central.com.ph/sfsreader/session/0000016d4e5897e0db0b1f3b003600fb002c009e/t/?o=False 1/20
tainer cases are covered by the Rules on Summary Procedure.

Section 5 of the 1991 Revised Rules on Summary Procedure
provides that affirmative and negative defenses not pleaded in the
answer shall be deemed waived, except lack of jurisdiction over
the subject matter.
Barangay Conciliation; Only individuals may be parties to
barangay conciliation proceedings either as complainants or
respondents. Complaints by or against corporations, partnerships
or other juridical entities may not be filed with, received or acted
upon by the barangay for conciliation.—There was no need to
refer the dispute between the parties herein to the barangay for
conciliation pursuant to the Katarungang Pambarangay Law. It
bears stressing that only individuals may be parties to barangay
conciliation proceedings either as complainants or respondents.
Complaints by or against corporations, partnerships or other
juridical entities may not be filed with, received or acted upon by
the barangay for conciliation. The Estate of Vipa, which is the
complainant below, is a juridical entity that has a personality,
which is separate and distinct from that of Grace Joy. Thus, there
is no necessity to bring the dispute to the barangay for
conciliation prior to filing of the complaint for unlawful detainer
with the MTCC.
Remedial Law; Civil Procedure; Appeals; Fair play, justice,
and due process dictate that parties should not raise for the first
time on appeal issues that they could have raised but never did
during trial.—It is true that fair play, justice, and due process
dictate that parties should not raise for the first time on appeal
issues that they could have raised but never did during trial.
However, before a party may be barred from raising an issue for
the first time on appeal, it is imperative that the issue could have
been raised during the trial. What escaped the appellate court’s
attention is that the sale of the one-half undivided share in the
subject property to Rafael was consummated only on December
29, 2005, more than two years after Rafael filed with the MTCC
his answer to the complaint for unlawful detainer on July 18,
2003. Obviously, Rafael could not have raised his acquisition of
Levi’s share in the subject property as an affirmative defense in
the answer he filed with the MTCC.

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384 SUPREME COURT REPORTS ANNOTATED

Civil Law; Conjugal Partnership; Conjugal Properties;

Dissolution of Conjugal Partnership; Under Article 130 of the
Family Code, the conjugal partnership property, upon its
dissolution due to the death of either spouse, should be liquidated
either in the same proceeding for the settlement of the estate of the
deceased or, in the absence thereof, by the surviving spouse within
one (1) year from the death of the deceased spouse.—When Vipa
died on March 5, 1994, the conjugal partnership was
automatically terminated. Under Article 130 of the Family Code,
the conjugal partnership property, upon its dissolution due to the
death of either spouse, should be liquidated either in the same
proceeding for the settlement of the estate of the deceased or, in
the absence thereof, by the surviving spouse within one year from
the death of the deceased spouse. That absent any liquidation,
any disposition or encumbrance of the conjugal partnership
property is void.
Same; Same; Same; Under the regime of conjugal partnership
of gains, the husband and wife are co-owners of all the property of
the conjugal partnership.—It bears stressing that under the
regime of conjugal partnership of gains, the husband and wife are
co-owners of all the property of the conjugal partnership. Thus,
upon the termination of the conjugal partnership of gains due to
the death of either spouse, the surviving spouse has an actual and
vested one-half undivided share of the properties, which does not
consist of determinate and segregated properties until liquidation
and partition of the conjugal partnership. With respect, however,
to the deceased spouse’s share in the conjugal partnership
properties, an implied ordinary co-ownership ensues among the
surviving spouse and the other heirs of the deceased.
Same; Co-ownership; Before the partition of a land or thing
held in common, no individual or co-owner can claim title to any
definite portion thereof. All that the co-owner has is an ideal or
abstract quota or proportionate share in the entire land or thing.—
Upon Vipa’s death, one-half of the subject property was
automatically reserved in favor of the surviving spouse, Levi, as
his share in the conjugal partnership. The other half, which is
Vipa’s share, was transmitted to Vipa’s heirs — Grace Joy, Jill
Frances, and her husband Levi, who is entitled to the same share
as that of a legitimate child. The ensuing implied co-ownership is
governed by Article 493 of the Civil Code, which provides: Article
493. Each co-owner shall

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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 the 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. (Emphasis ours) Although Levi became a co-
owner of the conjugal partnership properties with Grace Joy and
Jill Frances, he could not yet assert or claim title to any specific
portion thereof without an actual partition of the property being
first done either by agreement or by judicial decree. Before the
partition of a land or thing held in common, no individual or co-
owner can claim title to any definite portion thereof. All that the
co-owner has is an ideal or abstract quota or proportionate share
in the entire land or thing.
Same; Same; A co-owner could sell his undivided share.—A
co-owner could sell his undivided share; hence, Levi had the right
to freely sell and dispose of his undivided interest. Thus, the sale
by Levi of his one-half undivided share in the subject property
was not necessarily void, for his right as a co-owner thereof was
effectively transferred, making the buyer, Rafael, a co-owner of
the subject property. It must be stressed that the binding force of
a contract must be recognized as far as it is legally possible to do
so (quando res non valet ut ago, valeat quantum valere potest).
Same; Interest Rates; In Nacar v. Gallery Frames, et al., 703
SCRA 439 (2013), the Supreme Court (SC) pointed out that
pursuant to Resolution No. 796 of the Bangko Sentral ng
Pilipinas-Monetary Board (BSP-MB), the interest rate of loans or
forbearance of money, in the absence of stipulation shall be six
percent (6%) effective only from July 1, 2013. Thus, prior to July 1,
2013, the rate of interest on loans or forbearance of money, in the
absence of stipulation, is still twelve percent (12%).—In Nacar v.
Gallery Frames, et al., 703 SCRA 439 (2013), the Court pointed
out that pursuant to Resolution No. 796 of the Bangko Sentral ng
Pilipinas Monetary Board, the interest rate of loans or
forbearance of money, in the absence of stipulation shall be six
percent (6%) effective only from July 1, 2013. Thus, prior to July
1, 2013, the rate of interest on loans or forbearance of money, in
the absence of stipulation, is still 12%. Accordingly, the amount of
P271,150.00, representing the unpaid rentals shall earn interest
at

386

the rates of 12% per annum from the date of the last demand
on May 3, 2003 until June 30, 2013 and 6% per annum from July
1, 2013 until fully paid.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Rene C. Estocapio for petitioner.
Reynaldo B. Tatoy for respondent.
REYES, J.:

This is a Petition for Review on Certiorari1 under Rule
45 of the Rules of Court seeking to annul and set aside the
Decision2 dated November 26, 2010 and Resolution3 dated
January 24, 2012 issued by the Court of Appeals (CA) in
C.A.-G.R. S.P. No. 04481.

Facts

Vipa Fernandez Lahaylahay (Vipa) is the registered
owner of a parcel of land situated in Lopez Jaena Street,
Jaro, Iloilo City covered by Transfer Certificate of Title No.
T-26576 (subject property).4 Vipa and her husband, Levi
Lahaylahay (Levi), have two children — Grace Joy
Somosierra (Grace Joy) and Jill Frances Lahaylahay (Jill
Frances).5
_______________
1 Rollo, pp. 14-41.

2 Penned by Associate Justice Agnes Reyes-Carpio, with Associate
Justices Edgardo L. Delos Santos and Eduardo B. Peralta, Jr., concurring;
id., at pp. 48-54.
3 Id., at pp. 45-46.
4 Id., at p. 134.
5 Id., at pp. 17-18.

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VOL. 822, APRIL 5, 2017 387

Sometime in 1990, a contract of lease was executed

between Vipa and Rafael Uy (Rafael) over the subject
property and the improvements thereon, pursuant to
which, Rafael bound himself to pay Vipa, as consideration
for the lease of the property, the amount of P3,000.00 per
month, with a provision for a 10% increase every year
thereafter.6
On March 5, 1994, Vipa died leaving no will or
testament whatsoever. Grace Joy became the de facto
administrator of the estate of Vipa. After Vipa’s death, Levi
lived in Aklan.7
In June 1998, Rafael stopped paying the monthly rents.8
Consequently, on June 12, 2003, the Estate of Vipa,
through Grace Joy, filed a complaint9 for unlawful detainer
with the Municipal Trial Court in Cities (MTCC) of Iloilo
City against Rafael. It was alleged therein that, as of June
1998, Rafael was already bound to pay rent at the amount
of P3,300.00 per month and that his last payment was
made in May 1998. Accordingly, at the time of the filing of
the Complaint, Rafael’s unpaid rents amounted to
P271,150.00.10 The Estate of Vipa claimed that despite
repeated demands, Rafael refused to pay the rents due.11
In his Answer,12 Rafael denied that he refused to pay
the rent for the lease of the subject property. He claimed
that sometime in June 1998 Patria Fernandez-Cuenca
(Patria), Vipa’s sister, demanded for the payment of the
rents, claiming that she is the rightful heir of Vipa.13 Since
he had no idea on who is entitled to receive the rent for the
subject property, he deposited the amount of P10,000.00
with the Office of the Clerk of Court of the Regional Trial
Court (RTC) of Iloilo City
_______________
6 Id., at p. 49.
7 Id., at p. 18.
8 Id., at p. 49.
9 Id., at pp. 131-132.
10 Id., at p. 131.
11 Id., at p. 132.
12 Id., at pp. 124-127.
13 Id., at p. 124.

388

on November 20, 1998 and that Grace Joy was informed of

such consignation.14 He claimed that a case for the
settlement of the Estate of Vipa was instituted by Patria
with the RTC, which was docketed as Special Proceeding
No. 6910. He averred that he is willing to pay the rent on
the leased property to the rightful heirs of Vipa and that he
made another consignation with the RTC in the amount of
P6,000.00.15
On June 12, 2008, the MTCC rendered a Decision,16 the
decretal portion of which reads:
WHEREFORE, in the light of the foregoing ratiocination,

judgment is hereby rendered in favor of the [Estate of Vipa] and
against [Rafael], ordering the latter, to wit:
1. to vacate the premises subject of this case and covered by
TCT No. T-26576 and to peacefully turn over the possession
of the same to the [Estate of Vipa];
2. to pay the [Estate of Vipa] the amount of Php271,150.00 as
payment for the unpaid rentals with 12% interest per
annum from the last demand on May 3, 2003 until the
whole amount is paid;
3. to pay the [Estate of Vipa] the amount of Php3,000.00 per
month with 12% interest per annum for the use and
occupancy of the premises computed from the date of the
filing of this case on June 12, 2003 until fully paid;
4. to pay the [Estate of Vipa] attorney’s fees in the amount of
Php20,000.00; [and]
5. to pay the costs of suit.
SO ORDERED.17
_______________
14 Id., at pp. 124-125.

15 Id., at p. 125.
16 Rendered by Presiding Judge Marie Yvette D. Go; id., at
pp. 115-123.
17 Id., at p. 123.

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VOL. 822, APRIL 5, 2017 389

The MTCC found that after Vipa’s death in 1994 until

1998, Rafael was paying the rent for the lease of the subject
property to Grace Joy.18 That the real reason why Patria
claimed to be the heir of Vipa is because she owed Rafael
money which she could not pay. Patria then charged the
debt she owes to Rafael from the monthly rent of the
subject property, an arrangement that Rafael took
advantage to avoid paying Grace Joy the monthly rents.
The MTCC further opined that the consignations made by
Rafael in the total amount of P16,000.00 are not valid since
there was no prior tender of payment.19
On appeal, the RTC, in its Decision20 dated April 15,
2009, reversed the MTCC’s Decision dated June 12, 2008
and, thus, dismissed the complaint for unlawful detainer
filed by the Estate of Vipa. Thus:
WHEREFORE, premises considered, the Decision appealed

from is REVERSED and SET ASIDE; and the herein complaint is
hereby DISMISSED for lack of merit; and further DISMISSING
[Rafael’s] counterclaim for failure to substantiate the same.
SO ORDERED.21

The RTC opined that Grace Joy was actually the
plaintiff in the case and not the Estate of Vipa. It then
pointed out that Grace Joy failed to bring the dispute to the
barangay for conciliation prior to filing the complaint for
unlawful detainer.22
The RTC further held that the MTCC erred in including
the entire subject property as part of the Estate of Vipa.
The
_______________
18 Id., at p. 119.
19 Id., at p. 120.
20 Rendered by Judge Antonio M. Natino; id., at pp. 101-114.
21 Id., at p. 114.
22 Id., at p. 107.

390

RTC explained that the subject property was acquired by

Vipa during the subsistence of her marriage with Levi and,
as such, is part of their conjugal properties. That after
Vipa’s death, the conjugal partnership was terminated,
entitling Levi to one-half of the property.23 The RTC then
pointed out that Levi sold his share in the subject property
to Rafael, as evidenced by a Deed of Sale24 dated December
29, 2005.25 Accordingly, the RTC ruled that Rafael, as co-
owner of the subject property, having bought Levi’s one-
half share thereof, had the right to possess the same.26
The Estate of Vipa sought a reconsideration27 of the
Decision dated April 15, 2009, but it was denied by the
RTC in its Order dated July 28, 2009.28
The Estate of Vipa then filed a Petition for Review29
with the CA. On November 26, 2010, the CA rendered a
Decision,30 which declared:
WHEREFORE, in view of all the foregoing, the instant

petition for review is GRANTED and the April 15, 2009 Decision
of the court a quo in Civil Case No. 08-29842 is hereby
REVERSED and SET ASIDE. Accordingly, the June 12, 2008
Decision of the Municipal Trial Court, Branch 4, Iloilo City, in
Civil Case No. 03-208 is hereby REINSTATED.
SO ORDERED.31
_______________
23 Id., at pp. 112-113.

24 Id., at pp. 137-138.
25 Id., at p. 113.
26 Id., at p. 114.
27 Id., at pp. 95-100.
28 Id., at p. 51.
29 Id., at pp. 78-94.
30 Id., at pp. 48-54.
31 Id., at p. 54.

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The CA held that there was no necessity to bring the

dispute before the barangay for conciliation since the
Estate of Vipa, being a juridical person, cannot be
impleaded to a barangay conciliation proceeding. The CA
likewise pointed out that any allegations against Grace
Joy’s authority to represent the Estate of Vipa had been
laid to rest when she was appointed as administrator of the
Estate of Vipa in Special Proceedings No. 6910 pending
before the RTC.32
Further, the CA held that Rafael raised the issue of
ownership of the subject property, i.e., Levi’s sale of his
one-half share in the subject property to Rafael, only for
the first time in his appeal with the RTC. Accordingly, it
was error on the part of the RTC to have resolved the issue
of ownership of the subject property.33 Furthermore, the
CA agreed with the MTCC that Rafael’s consignation of the
rent to the RTC is ineffective. It ruled that Rafael made the
consignation only twice and the amount consigned was
patently insignificant compared to the amount of rent
due.34
Rafael’s motion for reconsideration35 was denied by the
CA in its Resolution36 dated January 24, 2012.
Hence, the instant petition.
Rafael maintains that Grace Joy has no authority to
represent the Estate of Vipa and, when she filed the
complaint for unlawful detainer with the MTCC, she did so
in her personal capacity. Thus, Rafael claims that the
dispute should have been brought to the barangay for
conciliation before the complaint was filed in the MTCC.37
He further claims that the CA erred in reversing the RTC’s
ruling on the issue of ownership
_______________
32 Id., at p. 52.
33 Id., at p. 53.
34 Id.
35 Id., at pp. 55-64.
36 Id., at pp. 45-46.
37 Id., at pp. 24-25.

392

of the subject property. He insists that he already

purchased Levi’s one-half share in the subject property.38
On the other hand, the Estate of Vipa, in its Comment,39
avers that the supposed lack of authority of Grace Joy to
file the complaint for unlawful detainer and the ownership
of the subject property were never raised in the proceedings
before the MTCC and, hence, could not be passed upon by
the RTC in the appellate proceedings. In any case, it
pointed out that the RTC’s Decision40 dated October 28,
2005 in Special Proceedings No. 6910, which appointed
Grace Joy as the administrator of the intestate estate of
Vipa, recognized that the latter and Jill Frances are
legitimate children of Vipa and Levi.

Issue

Essentially, the issue set forth for the Court’s resolution
is whether the CA erred in reversing the RTC’s Decision
dated April 15, 2009.

Ruling of the Court

The petition is partly meritorious.
Rafael’s claim that the complaint below should have
been dismissed since Grace Joy has no authority to
represent the Estate of Vipa and that there was lack of
prior barangay conciliation is untenable. Unlawful detainer
cases are covered by the Rules on Summary Procedure.41
Section 5 of the 1991 Revised Rules on Summary Procedure
provides that affirmative and negative defenses not
pleaded in the answer shall be
_______________
38 Id., at pp. 27-33.

39 Id., at pp. 143-145.
40 Id., at pp. 146-150.
41 The 1991 REVISED RULES ON SUMMARY PROCEDURE, Section 1(A)(1).

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deemed waived, except lack of jurisdiction over the subject

matter.
Rafael failed to plead in the answer he filed with the
MTCC that Grace Joy has no authority to represent the
Estate of Vipa. Neither did he raise therein the lack of
barangay conciliation between the parties herein prior to
the filing of the complaint for unlawful detainer.
Accordingly, the foregoing defenses are already deemed
waived.
In any case, the issue of the supposed lack of authority
of Grace Joy to represent the Estate of Vipa had already
been rendered moot with the RTC’s appointment of Grace
Joy as the administrator of the Estate of Vipa in Special
Proceedings No. 6910.
Also, there was no need to refer the dispute between the
parties herein to the barangay for conciliation pursuant to
the Katarungang Pambarangay Law.42 It bears stressing
that only individuals may be parties to barangay
conciliation proceedings either as complainants or
respondents. Complaints by or against corporations,
partnerships or other juridical entities may not be filed
with, received or acted upon by the barangay for
conciliation.43 The Estate of Vipa, which is the complainant
below, is a juridical entity that has a personality, which is
separate and distinct from that of Grace Joy.44 Thus, there
is no necessity to bring the dispute to the barangay for
conciliation prior to filing of the complaint for unlawful
detainer with the MTCC.
_______________
42 Sections 399 to 422, Chapter 7, Title One, Book III and Section 515,
Title One, Book IV of Republic Act No. 7160 (The Local Government
Code).
43 Universal Robina Sugar Milling Corporation v. Heirs of Angel
Teves, 438 Phil. 26, 41; 389 SCRA 316, 327 (2002), citing Section 1, Rule
VI of the Katarungang Pambarangay Rules implementing the
Katarungang Pambarangay Law.
44 See Limjoco v. Intestate of Fragante, 80 Phil. 776 (1948).

394

The CA, nevertheless, erred in hastily dismissing

Rafael’s allegation as regards the ownership of the subject
property. In disregarding Rafael’s claim that he owns Levi’s
one-half undivided share in the subject property, the CA
ruled that the said issue was raised for the first time on
appeal and should thus not have been considered by the
RTC, viz.:
On the second issue, the records show that [Rafael] raised the
issue of ownership only for the first time on appeal; hence, the
[RTC] erred in deciding the appeal before it on the findings that
part of the subject premises is owned by petitioners, allegedly
having bought the same from [Levi], the husband of [Vipa].
The Court is not unmindful that in forcible entry and unlawful
detainer cases, the MTC may rule on the issue [of] ownership in
order to determine the issue of possession. However, the issue of
ownership must be raised by the defendant on the earliest
opportunity; otherwise, it is already deemed waived. Moreover,
the instant case was covered by the Rules on Summary
Procedure, which expressly provide that affirmative and negative
defenses not pleaded therein shall be deemed waived, except for
lack of jurisdiction over the subject matter. Thus, the [RTC] erred
in resolving the issue of ownership for the first time on appeal.45
(Citations omitted)

It is true that fair play, justice, and due process dictate
that parties should not raise for the first time on appeal
issues that they could have raised but never did during
trial. However, before a party may be barred from raising
an issue for the first time on appeal, it is imperative that
the issue could have been raised during the trial.46 What
escaped the appellate court’s attention is that the sale of
the one-half
_______________
45 Rollo, p. 53.
46 See Sañado v. Court of Appeals, 408 Phil. 669; 356 SCRA 546
(2001).

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undivided share in the subject property to Rafael was

consummated only on December 29, 2005, more than two
years after Rafael filed with the MTCC his answer to the
complaint for unlawful detainer on July 18, 2003.47
Obviously, Rafael could not have raised his acquisition of
Levi’s share in the subject property as an affirmative
defense in the answer he filed with the MTCC.
Moreover, Rafael’s ownership of the one-half undivided
share in the subject property would necessarily affect the
property relations between the parties herein. Thus, the
CA should have exerted efforts to resolve the said issue
instead of dismissing the same on the flimsy ground that it
was not raised during the proceedings before the MTCC.
Levi and Vipa were married on March 24, 196148 and in
the absence of a marriage settlement, the system of
conjugal partnership of gains governs their property
relations.49 It is presumed that the subject property is part
of the conjugal properties of Vipa and Levi considering that
the same was acquired during the subsistence of their
marriage and there being no proof to the contrary.50
When Vipa died on March 5, 1994, the conjugal
partnership was automatically terminated.51 Under Article
130 of the Family Code, the conjugal partnership property,
upon its dissolution due to the death of either spouse,
should be liquidated either in the same proceeding for the
settlement of the estate of the deceased or, in the absence
thereof, by the surviving spouse within one year from the
death of the deceased spouse. That absent any liquidation,
any disposition or encumbrance of the conjugal partnership
property is void. Thus:
_______________
47 Rollo, p. 21.
48 Certificate of Marriage; id., at p. 133.
49 CIVIL CODE OF THE PHILIPPINES, Article 119.
50 Id., Article 160.
51 Id., Article 175(1).

396

Article 130. Upon the termination of the marriage by death,

the conjugal partnership property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased.
If no judicial settlement proceeding is instituted, the
surviving spouse shall liquidate the conjugal partnership
property either judicially or extrajudicially within six
months from the death of the deceased spouse. If upon the
lapse of the six-month period no liquidation is made, any
disposition or encumbrance involving the conjugal
partnership property of the terminated marriage shall be
void.
Should the surviving spouse contract a subsequent marriage
without compliance with the foregoing requirements, a mandatory
regime of complete separation of property shall govern the
property relations of the subsequent marriage. (Emphasis ours)

Article 130 of the Family Code is applicable to conjugal
partnership of gains already established between the
spouses prior to the effectivity of the Family Code pursuant
to Article 105 thereof, viz.:
Article 105. In case the future spouses agree in the marriage

settlements that the regime of conjugal partnership of gains shall
govern their property relations during marriage, the provisions in
this Chapter shall be of supplementary application.
The provisions of this Chapter shall also apply to
conjugal partnerships of gains already established
between spouses before the effectivity of this Code, without
prejudice to vested rights already acquired in accordance with the
Civil Code or other laws as provided in Article 256. (Emphasis
ours)

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Rafael bought Levi’s one-half share in the subject

property in consideration of P500,000.00 as evidenced by
the Deed of Sale52 dated December 29, 2005. At that time,
the conjugal partnership properties of Levi and Vipa were
not yet liquidated. However, such disposition,
notwithstanding the absence of liquidation of the conjugal
partnership properties, is not necessarily void.
It bears stressing that under the regime of conjugal

partnership of gains, the husband and wife are co-owners
of all the property of the conjugal partnership.53 Thus,
upon the termination of the conjugal partnership of gains
due to the death of either spouse, the surviving spouse has
an actual and vested one-half undivided share of the
properties, which does not consist of determinate and
segregated properties until liquidation and partition of the
conjugal partnership.54 With respect, however, to the
deceased spouse’s share in the conjugal partnership
properties, an implied ordinary co-ownership ensues among
the surviving spouse and the other heirs of the deceased.55
Thus, upon Vipa’s death, one-half of the subject property
was automatically reserved in favor of the surviving
spouse, Levi, as his share in the conjugal partnership. The
other half, which is Vipa’s share, was transmitted to Vipa’s
heirs — Grace Joy, Jill Frances, and her husband Levi,
who is entitled to the same share as that of a legitimate
child. The ensuing implied co-ownership is governed by
Article 493 of the Civil Code, which provides:
Article 493. Each co-owner shall have the full ownership of

his part and of the fruits and benefits per-
_______________
52 Rollo, pp. 137-138.

53 CIVIL CODE OF THE PHILIPPINES, Article 143.
54 See Domingo v. Molina, G.R. No. 200274, April 20, 2016, 791 SCRA
47.
55 See Dael v. Intermediate Appellate Court, 253 Phil. 516, 526; 171
SCRA 524, 532-533 (1989).

398

taining 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 the 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. (Emphasis ours)

Although Levi became a co-owner of the conjugal
partnership properties with Grace Joy and Jill Frances, he
could not yet assert or claim title to any specific portion
thereof without an actual partition of the property being
first done either by agreement or by judicial decree. Before
the partition of a land or thing held in common, no
individual or co-owner can claim title to any definite
portion thereof. All that the co-owner has is an ideal or
abstract quota or proportionate share in the entire land or
thing.56
Nevertheless, a co-owner could sell his undivided share;
hence, Levi had the right to freely sell and dispose of his
undivided interest. Thus, the sale by Levi of his one-half
undivided share in the subject property was not necessarily
void, for his right as a co-owner thereof was effectively
transferred, making the buyer, Rafael, a co-owner of the
subject property. It must be stressed that the binding force
of a contract must be recognized as far as it is legally
possible to do so (quando res non valet ut ago, valeat
quantum valere potest).57
However, Rafael became a co-owner of the subject
property only on December 29, 2005 — the time when Levi
sold his one-half undivided share over the subject property
to the former. Thus, from December 29, 2005 Rafael, as a
co-owner, has the right to possess the subject property as
an incident of ownership. Otherwise stated, prior to his
acquisition of Levi’s
_______________
56 Sanchez v. Court of Appeals, 452 Phil. 665, 676; 404 SCRA 540, 548
(2003).
57 See Lopez v. Cuaycong, et al., 74 Phil. 601 (1944).

399
VOL. 822, APRIL 5, 2017 399

one-half undivided share, Rafael was a mere lessee of the

subject property and is thus obliged to pay the rent for his
possession thereof.
Accordingly, Rafael could no longer be directed to vacate
the subject property since he is already a co-owner thereof.
Nevertheless, Rafael is still bound to pay the unpaid

rentals from June 1998 until April 2003 in the amount of
P271,150.00. In Nacar v. Gallery Frames, et al.,58 the Court
pointed out that pursuant to Resolution No. 796 of the
Bangko Sentral ng Pilipinas-Monetary Board, the interest
rate of loans or forbearance of money, in the absence of
stipulation shall be six percent (6%) effective only from
July 1, 2013. Thus, prior to July 1, 2013, the rate of
interest on loans or forbearance of money, in the absence of
stipulation, is still 12%. Accordingly, the amount of
P271,150.00, representing the unpaid rentals shall earn
interest at the rates of 12% per annum from the date of the
last demand on May 3, 2003 until June 30, 2013 and 6%
per annum from July 1, 2013 until fully paid.
Further, Rafael is likewise bound to pay reasonable rent
for the use and occupancy of the subject property from May
2003 until December 28, 2005 at the rate of P3,000.00 per
month with interest at the rate of 12% per annum from the
date of the last demand, i.e., the filing of the complaint
with the MTCC on June 12, 2003, until June 30, 2013 and
6% per annum from July 1, 2013 until fully paid.
The award of attorney’s fees of P20,000.00 is likewise
proper. Attorney’s fees can be awarded in the cases
enumerated in Article 2208 of the Civil Code, specifically:
Article 2208. x x x

x x x x
(2) Where the defendant’s act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses to
protect his interest[.]
_______________
58 716 Phil. 267; 703 SCRA 439 (2013).

400

Certainly, because of Rafael’s unjustified refusal to pay

the rents due on the lease of the subject property, the
Estate of Vipa was put to unnecessary expense and trouble
to protect its interest under paragraph (2), Article 2208 of
the Civil Code. In unlawful detainer cases, where
attorney’s fees are awarded, the same shall not exceed

P20,000.00.59
WHEREFORE, in view of the foregoing disquisitions,
the petition for review on certiorari is PARTIALLY
GRANTED. The Decision dated November 26, 2010 and
Resolution dated January 24, 2012 issued by the Court of
Appeals in C.A.-G.R. S.P. No. 04481 are hereby
REVERSED and SET ASIDE. Petitioner Rafael C. Uy is
hereby directed to pay the Estate of Vipa Fernandez the
following:
1. The amount of P271,150.00, representing the unpaid
rentals, with interest at the rates of twelve percent (12%)
per annum from the date of the last demand on May 3,
2003 until June 30, 2013, and six percent (6%) per annum
from July 1, 2013 until fully paid;
2. Reasonable rent for the use and occupancy of the
subject property from May 2003 until December 28, 2005 at
the rate of P3,000.00 per month with interest at the rates
of twelve percent (12%) per annum from the date of the last
demand, i.e., the filing of the complaint for unlawful
detainer on June 12, 2003, until June 30, 2013, and six
percent (6%) per annum from July 1, 2013 until fully paid;
and
3. The amount of P20,000.00 as attorney’s fees.
SO ORDERED.
Velasco, Jr. (Chairperson), Bersamin, Jardeleza and

Tijam, JJ., concur.
_______________
59 1991 REVISED RULES ON SUMMARY PROCEDURE, Section 1(A)(1).

401
VOL. 822, APRIL 5, 2017 401

Petition partially granted, judgment and resolution

reversed and set aside.
Notes.—The Revised Katarungang Pambarangay Law

provides that an amicable settlement reached after
barangay conciliation proceedings has the force and effect
of a final judgment of a court if not repudiated or a petition
to nullify the same is filed before the proper city or
municipal court within ten (10) days from its date.

(Catedrilla vs. Lauron, 696 SCRA 341 [2013])
Even granting that an irregularity had intervened in the
Barangay Captain’s issuance of the Certification to File an
Action, the Supreme Court (SC) notes that this irregularity
is not a jurisdictional flaw that warrants the dismissal of
the criminal cases before the Metropolitan Trial Court
(MeTC). (Sabay vs. People, 737 SCRA 423 [2014])

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9/20/2019 SUPREME COURT REPORTS ANNOTATED 822

G.R. No. 200612. April 5, 2017.*

Remedial Law; Summary Procedure; Section 5 of the 1991

** Designated acting member vice Associate Justice Francis H.

VOL. 822, APRIL 5, 2017 383

tainer cases are covered by the Rules on Summary Procedure.

384 SUPREME COURT REPORTS ANNOTATED

Civil Law; Conjugal Partnership; Conjugal Properties;

VOL. 822, APRIL 5, 2017 385

Uy vs. Estate of Vipa Fernandez

386 SUPREME COURT REPORTS ANNOTATED

PETITION for review on certiorari of the decision and

1 Rollo, pp. 14-41.

VOL. 822, APRIL 5, 2017 387

Sometime in 1990, a contract of lease was executed

388 SUPREME COURT REPORTS ANNOTATED

on November 20, 1998 and that Grace Joy was informed of

WHEREFORE, in the light of the foregoing ratiocination,

14 Id., at pp. 124-125.

VOL. 822, APRIL 5, 2017 389

The MTCC found that after Vipa’s death in 1994 until

WHEREFORE, premises considered, the Decision appealed

390 SUPREME COURT REPORTS ANNOTATED

Uy vs. Estate of Vipa Fernandez

RTC explained that the subject property was acquired by

WHEREFORE, in view of all the foregoing, the instant

23 Id., at pp. 112-113.

VOL. 822, APRIL 5, 2017 391

The CA held that there was no necessity to bring the

392 SUPREME COURT REPORTS ANNOTATED

of the subject property. He insists that he already

38 Id., at pp. 27-33.

VOL. 822, APRIL 5, 2017 393

deemed waived, except lack of jurisdiction over the subject

394 SUPREME COURT REPORTS ANNOTATED

The CA, nevertheless, erred in hastily dismissing

VOL. 822, APRIL 5, 2017 395

undivided share in the subject property to Rafael was

396 SUPREME COURT REPORTS ANNOTATED

Article 130. Upon the termination of the marriage by death,

Article 105. In case the future spouses agree in the marriage

VOL. 822, APRIL 5, 2017 397

Rafael bought Levi’s one-half share in the subject

It bears stressing that under the regime of conjugal

Article 493. Each co-owner shall have the full ownership of

52 Rollo, pp. 137-138.

398 SUPREME COURT REPORTS ANNOTATED

taining thereto, and he may therefore alienate, assign or

VOL. 822, APRIL 5, 2017 399

one-half undivided share, Rafael was a mere lessee of the

Nevertheless, Rafael is still bound to pay the unpaid

Article 2208. x x x

58 716 Phil. 267; 703 SCRA 439 (2013).

400 SUPREME COURT REPORTS ANNOTATED

Certainly, because of Rafael’s unjustified refusal to pay

attorney’s fees are awarded, the same shall not exceed

Velasco, Jr. (Chairperson), Bersamin, Jardeleza and

59 1991 REVISED RULES ON SUMMARY PROCEDURE, Section 1(A)(1).

VOL. 822, APRIL 5, 2017 401

Petition partially granted, judgment and resolution