FACTS:

The spouses Alfonso and Eteria Tan filed a case for partition and accounting against the private respondents, Celestino and Rosario Tan, and Maximo and Teresita Sy, claiming co-ownership of a residential lot with improvements in Cebu City. The private respondents alleged that the family business was dissolved and that Alfonso mismanaged it. They also claimed that Alfonso's share of the property was mortgaged to his sister. Alfonso filed a motion to dismiss, which was denied. During trial, Eteria testified that she and Alfonso bought the residential lot during their marriage. The trial court ordered the partition of the property, finding that the family business had been dissolved due to losses. The private respondents filed a motion for reconsideration, claiming that the disputed property was inherited from their mother, but it was denied. They then filed a petition for review on certiorari.

ISSUES:

1. Whether or not the 906-square meter lot with improvements should be partitioned equally among the three brothers and their respective wives.

RULING:

1. The Supreme Court affirmed the decision of the Regional Trial Court, which ordered the partition of the lot and awarded the one-third share of Eteria Teves Tan. The Court held that since the lot was acquired during the marriage of Eteria and Alfonso, Eteria is entitled to her share of the conjugal property, which is one-third of the lot. The fact that the family business was dissolved due to losses does not affect the partition of the lot.

PRINCIPLES:

• Co-owners have the right to partition the property held in common (Article 494, New Civil Code).

• Spouses have equal shares in the conjugal partnership of gains (Article 144, Civil Code).

• The dissolution of a business does not affect the right to partition the property owned by co-owners.