FACTS:

The spouses Julian C. Viado and Virginia P. Viado owned a house and lot in Quezon City. Virginia P. Viado died in 1982, followed by Julian Viado in 1985. Their children, Nilo Viado, Rebecca Viado, Leah Viado Jacobs, and Delia Viado, survived them. Nilo Viado and Leah Viado Jacobs died in 1987, leaving behind Alicia Viado as Nilo Viado's wife and their two children, Cherri Viado and Fe Fides Viado. Petitioners and respondents had a common residence at the property, but tension arose when petitioners requested an equal division of the property. Respondents claimed absolute ownership over the property and demanded that petitioners vacate their portion. Petitioners filed a case for partition, attacking the validity of two documents relied upon by respondents to establish their ownership. These documents included a deed of donation executed by Julian Viado in favor of Nilo Viado, and a deed of extrajudicial settlement in which Julian Viado, Leah Viado Jacobs, and petitioner Rebecca Viado waived their rights and interests in the property. The trial court ruled in favor of respondents, and on appeal, the Court of Appeals affirmed the decision with some modifications. Petitioners filed a petition for review with the Supreme Court, which was denied.

ISSUES:

1. Whether the deed of donation and deed of extrajudicial settlement, which consolidated the title solely to Nilo Viado, are valid and binding.

2. Whether the exclusion of petitioner Delia Viado from the deed of extrajudicial settlement constitutes preterition and warrants the annulment of Transfer Certificate of Title No. 373646.

RULING:

1. The Court of Appeals ruled correctly that the deed of donation and deed of extrajudicial settlement are valid and binding. The trial court and the appellate court both found that the evidence submitted by petitioners was insufficient to prove the alleged fraud, forgery, and undue influence in the execution of the said documents. The registration of the documents, despite being delayed for five years, did not affect their validity.

2. The exclusion of petitioner Delia Viado from the deed of extrajudicial settlement constitutes preterition. However, in the absence of proof of fraud and bad faith, the preterition does not justify a collateral attack on Transfer Certificate of Title No. 373646. Instead, Article 1104 of the Civil Code provides that the preterited heir shall be paid the value of the share pertaining to her. The Court of Appeals, therefore, properly ordered the remand of the case for further proceedings to determine the proper valuation of the property and the amount due to petitioner Delia Viado.

PRINCIPLES:

• Every act intended to put an end to indivision among co-heirs and legatees or devisees would be a partition, regardless of its form (principle of partition).

• In the absence of fraud and bad faith, preterition does not warrant the rescission of a partition but requires payment of the value of the share to the preterited heir (principle of preterition).