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ADORACION E. CRUZ v. CA

FACTS:

The case involves a petition for review on certiorari seeking to nullify the Court of Appeals (CA) Decision and Resolution which reversed the Regional Trial Court (RTC) of Antipolo, Rizal. The petitioners, Adoracion, Thelma Debbie, Gerry, and Arnel Cruz, filed an action for partition against the private respondents, Eliseo and Virginia Malolos. The trial court rendered a Decision ordering the partition of the seven parcels of land among the parties and directing them to execute a project of partition. On appeal, the CA reversed the trial court's decision and dismissed the complaint without prejudice to the claim of the plaintiffs for their shares in the proceeds of the auction sale of the lands in question. The facts of the case are that the plaintiffs, together with their mother, executed a notarized Deed of Partial Partition and a Memorandum Agreement, stating that they are common co-owners of the properties and that they shall share equally in the proceeds of the sale of any lot or lots allotted to them. The Memorandum Agreement was registered and annotated in the titles of the lands covered by the Deed of Partial Partition. The parties then caused the consolidation and subdivisions of the lands and obtained titles in their names. However, the lands in question were later sold by one of the parties, which led to the dispute over the partition of the proceeds.

The case involves the dispute over the ownership of several parcels of land between the spouses Nerissa Cruz-Tamayo and Nelson Tamayo and the spouses Eliseo and Virginia Malolos. A decision was rendered in favor of the Malolos couple in a civil case they filed against the Tamayo couple, which ordered the latter to pay a sum of money. After the decision became final, the lands in question were sold in an execution sale to the Malolos couple. Nerissa Cruz-Tamayo failed to exercise her right of redemption within the statutory period, and the final deed of sale was executed by the sheriff, conveying the lands to the Malolos couple. However, Nerissa refused to surrender the owner's duplicate copy of the titles to the Maloloses. The court ordered Nerissa to surrender the titles for cancellation, but she did not comply, prompting the Malolos couple to ask the court to declare the titles null and void. The Cruzes, claiming to be co-owners of the lands, intervened and opposed the Malolos' motion. Another case for partition was later filed by the Cruzes against the Malolos couple. The Court of Appeals resolved the central issue of whether a Memorandum of Agreement (MOA) revoked or superseded a Deed of Partial Partition (DPP). The court held that the DPP conferred absolute ownership to Nerissa and the MOA merely created an obligation to share the proceeds of the sale. The petitioners appealed the ruling, raising several assignment of errors.

ISSUES:

  1. Whether the Deed of Partial Partition (DPP) was cancelled or novated by the Memorandum of Agreement (MOA).

  2. Whether the MOA established a co-ownership of the parcels of land in question between the petitioners and the judgment debtor.

  3. Whether the petitioners are barred by estoppel from claiming co-ownership of the seven parcels of land.

  4. Whether res judicata has set in.

RULING:

  1. No Novation or Cancellation

    • The Court ruled that the MOA does not expressly or impliedly cancel or novate the DPP. The MOA and the DPP are not materially and substantially incompatible with each other, and thus, both can coexist.

  2. No Co-ownership in the MOA

    • The Court found that the MOA did not establish a co-ownership. Instead, it only created an obligation for the individual owners to share the proceeds from the sale of the lands.

  3. Estoppel by Deed

    • Petitioners are estopped from claiming co-ownership as they had previously held and disposed of other properties covered by the DPP as absolute owners, without indicating any co-ownership.

  4. No Res Judicata

    • The Court ruled that res judicata does not apply because the RTC of Quezon City's order in a prior collection case did not have jurisdiction over the partition case filed in the RTC of Antipolo, Rizal. Additionally, the parties, subject matter, and causes of action in the two cases are not identical.

PRINCIPLES:

  • Contracts as Law Between Parties Contracts must be read and interpreted in a manner that reconciles and gives life to all of them. The intent of the parties, as shown by the clear language used, prevails over post facto explanations not supported by the words or actions of the parties.

  • Novation

    • Requires: (1) previous valid obligation, (2) agreement to a new contract, (3) extinguishment of the old contract, and (4) validity of the new contract.

    • Can be express or implied, but must be unequivocal.

  • Estoppel

    • Bars a person from adopting an inconsistent position that causes loss or injury to another.

    • Prevents denying the truth of a fact settled by acts, judicial or legislative officers, or conventional writings.

  • Registration of Contracts

    • Registration confirms but does not confer title. It does not give a holder any better title than what they actually have.

  • Res Judicata

    • Requires: (1) a final judgment, (2) jurisdiction over subject matter and parties, (3) judgment on the merits, and (4) identity between parties, subject matter, and causes of action in both cases.