The Case

Before the Court is a petition^[1] for review on certiorari assailing the Decision^[2] dated 23 April 2008 and Resolution^[3] dated 10 September 2008 of the Court of Appeals (CA) in CA-G.R. CV. No. 85920.

The Facts

This case involves two lots allegedly co-owned by two brothers, petitioner Co Giok Lun (Lun) and Co Bon Fieng (Fieng), the father of respondent Jose Co (Co). The lots, which are situated in Sorsogon province, one in the town of Gubat and the other in the town of Barcelona, are described as:

Gubat Property

A parcel of commercial/residential land, located at Poblacion, Gubat, Sorsogon, containing an area of 720.68 square meters, more or less, bounded on the North by Angel Camara, on the East by Rodolfo Rocha, on the South by Guariña Street and on the West by Zulueta Street declared under Tax Declaration No. 11379 in the name of Co Bon Fieng and assessed at P12,370.00.^[4]

Barcelona Property

Terreno cocal radicada en el sitio de Telegrafo barrio de Luneta, Barcelona, Sorsogon, I. F. cabida de sesenta y cinco (65 a.) lindates por Norte Hertrudes Casulla, por sur Antonio Evasco, por Este con los manglares y por Oeste Atanacio Espera y Eugenio Esteves.

Terreno cocalero ubicado en el barrio de Luneta, Barcelona, Sorsogon, I.F. cabida de una hectaria dies y ocho areas y sesenta y ciete centiarias (1 hects. 18 hareas 67 centiareas) lindantes al Norte Cementerio Municipal antes Eugenio Esteves, al Este Gabriel Gredoña y Laudia Asis, al Sur Amando Torilla y Florentino Mercader, y al Oeste Carretera Provincial.

Terreno solar con doce ponos de coco situada en el barrio de Luneta, Barcelona, Sorsogon, I.F. cabida de dos riales y quevalente a trienta y cuatro areas y un camarin de materiales fuertes y deficada dentro de la misma lindante al Norte Camino para S. Antonio, al Sur Eugenio Esteves, al Este Carretera Provincial y al Oeste a los herederos del defunto Feliciano Fontelar.^[5]

Petitioners, the legal heirs of Lun who died on 12 January 1997, filed a complaint^[6] for partition and damages against Co with the Regional Trial Court (RTC) of Gubat, Sorsogon, Branch 54.

Claim of Petitioners

Petitioners claimed that Lun and Fieng came to the Philippines from China in 1929. Lun allegedly acquired the Gubat property from the P8,000.00 capital the brothers inherited from their father, Co Chaco (Chaco), before Chaco returned to China in 1926 due to old age. The Gubat property was named under Fieng only since it has been a common practice and custom in China that properties intended for the children are placed in the name of the eldest child. The Barcelona property, on the other hand, was acquired by Chaco in 1923 while he was still doing his business in Gubat.

Lun and Fieng set up a business, selling and trading of dry goods, called the Philippine Honest and Company. Using the company's funds, they rented the property of Crispina Rocha (Rocha), which was mortgaged and finally sold to them in 1935. Later, from the income of the business, they acquired the two adjoining residential and commercial lots which increased the size of the Gubat property to its present area of 720.68 square meters.

In 1946, Lun and Fieng dissolved and liquidated the business. After receiving his share of P26,000 from the liquidation, Lun established his own dry goods business called Shanghai Trading. Fieng, on the other hand, entered into other businesses with different partners.

Petitioners claimed that Lun stayed at the Gubat property from the time he arrived in China in 1929. Lun was the one who religiously paid for the realty taxes and made several repairs on the building to make the Gubat property habitable. It was only sometime in 1946 when Lun and Fieng decided to divide the two lots. However, the partition did not push through on the insistence of their mother, Po Kiat, who wanted to preserve and maintain close family ties.

Petitioners also alleged that Lun prevented the Gubat property from being appropriated when the lot was used by Fieng as a loan guarantee. Fieng incurred the P4,500 obligation from Erquiaga Corporation which Lun assumed and paid without any contribution from respondents, specifically Co. After Fieng suffered financial bankruptcy in Manila, he went back to Gubat. Upon the request of their mother, Lun lent his brother P30,000 which Fieng used to start up a business. However, until Fieng's death on 8 July 1958, the amount which Lun lent was never returned to him.

Lun even extended financial assistance to Co amounting to no less than P30,000 which remained unpaid. Later, when Lun already refused to lend money to Co, the latter made himself the administrator of the Gubat property without Lun's knowledge. Thereafter, Co filed a case for unlawful detainer against Lun with the Municipal Trial Court (MTC) of Gubat, docketed as Civil Case No. 210. This case was decided by the MTC in favor of Co but was reversed by the RTC in its Decision dated 28 April 1994. The RTC's decision was later affirmed by the CA and this Court.

Claim of Respondents

On the other hand, respondents, in their Amended Answer, maintained that the Gubat property is the exclusive property of their father. They asserted that Fieng acquired the lot by purchase from Rocha in 1935 or nine years after Chaco left for China in 1926. While Lun was still in China, Fieng and Rocha entered into an agreement for the use of the lot where Fieng built a "camalig" and started his sari-sari store business. On 13 March 1929, Fieng and Rocha entered into another contract extending Fieng's right to occupy the lot until 17 August 1938. On 16 March 1930, another extension was given until 19 August 1940. On 13 October 1935, Fieng and Rocha executed a Deed of Absolute Sale where Rocha sold the lot to Fieng for P3,000. On 6 August 1936, Ireneo Rocha also sold a parcel of the adjoining land to Fieng which increased the size of the Gubat property to its present area. Both documents had been properly notarized.

Fieng used the property not only as the family's residence but also for business and trade purposes until his death in 1958. It was even Fieng who had constructed the commercial building on the property in 1928. From 1937 to 1983, the land and tax declarations of the property was in the sole name of their father. In 1983, Co became the administrator of the Gubat property and had the property declared in his own name in substitution of his father without any objection from Lun.

Respondents denied that Lun and Fieng entered into any business together. Respondents claim that it was only in 1956 or 1957 when Lun was taken in by Fieng, who was then ill and could not manage his general merchandising business. Fieng allowed Lun to use the lower portion of the Gubat property and let him manage his business and properties as administrator. Lun was in possession of the property even after Fieng's death in 1958 because of the consent and tolerance of the respondents who were still young at that time.

Respondents further insisted that Chaco gave the Barcelona property to Fieng exclusively as advance inheritance and denied that Co ever borrowed money from Lun. As a counterclaim, respondents asked for the payment of rent for the use by Lun of the Gubat property, as well as moral damages, attorney's fees and litigation expenses.

The RTC's Ruling

In a Decision^[7] dated 21 July 2004, the RTC decided the case in favor of petitioners. The RTC stated that the documentary evidence presented in court showed that the Gubat property is indeed under Fieng's name. However, the chain of events prior to the purchase of the property and the evidence submitted by the petitioners prove the presence of co-ownership. The dispositive portion of the decision states:

WHEREFORE, in view of all the foregoing and by preponderance of evidence, judgment is hereby rendered that the Heirs of Co Chaco are pro indiviso owners of the Gubat and Barcelona properties which are to be partitioned among these heirs. They are hereby directed to cause the survey of the property and to submit to this Court the plan of partition for approval.

No costs.

SO ORDERED.^[8]

The Court of Appeals' Ruling


Respondents appealed to the CA. In a Decision dated 23 April 2008, the CA reversed the decision of the RTC and ruled in favor of the respondents. The dispositive portion states:

WHEREFORE, in view of the foregoing, the instant appeal is GRANTED. The assailed decision of the Regional Trial Court of Gubat, Sorsogon (Branch 54) in Civil Case No. 1601, is REVERSED. The order of the trial court to cause the survey of the subject properties for the partition thereof is SET ASIDE. The subject properties are declared exclusively owned by Co Bon Fieng, and now by his legal heirs, herein appellants.

SO ORDERED.^[9]

Petitioners filed a motion for reconsideration which the CA denied in a Resolution dated 10 September 2008.

Hence, this petition.

The Issue

The main issue is whether the CA erred in holding that no co-ownership existed between Lun and Fieng over the Gubat and Barcelona properties and in declaring Fieng as the exclusive owner of both properties.

The Court's Ruling
The petition lacks merit.

The original complaint filed by Lun involves an action for partition and damages. A division of property cannot be ordered by the court unless the existence of co-ownership is first established. In Ocampo v. Ocampo,^[10] we held that an action for partition will not lie if the claimant has no rightful interest over the property. Basic is the rule that the party making an allegation in a civil case has the burden of proving it by a preponderance of evidence.

Article 484 of the Civil Code which defines co-ownership, states:

Art. 484. There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. x x x

In the present case, petitioners insist that their predecessor-in-interest Lun co-owned the Gubat and Barcelona properties with his brother Fieng. To prove co-ownership over the Gubat property, petitioners presented: (1) tax declarations from 1929 to 1983 under the name of Fieng but paid by Lun; (2) the renewal certificate from Malayan Insurance Company Inc.; (3) the insurance contract; and (4) the statements of account from Supreme Insurance Underwriters which named Lun as administrator of the property. Likewise, to prove their right over the Barcelona property as legal heirs under intestate succession, petitioners presented a Deed of Sale dated 24 August 1923 between Chaco, as buyer, and Gabriel Gredona and Engracia Legata, as sellers, involving a price consideration of P1,200.

On the other hand, respondents presented notarized documents: (1) Deed of Sale dated 13 October 1935, and (2) Sale of Real Property dated 6 August 1936 showing that the former owners of the Gubat property entered into a sale transaction with Fieng, as buyer and Lun, as a witness to the sale. They also presented tax declarations in the name of Fieng from 1937 to 1958. After Fieng's death, Co declared the Gubat property in his name in the succeeding tax declarations. Likewise, the respondents presented documents proving the declaration of the Barcelona property in the name of Co.

After a careful scrutiny of the records, we hold that the evidence of petitioners were insufficient or immaterial to warrant a positive finding of co-ownership over the Gubat and Barcelona properties. The CA correctly observed that petitioners failed to substantiate with reasonable certainty that (1) Chaco gave Fieng a start-up capital of P8,000 to be used by Lun and Fieng in setting up a business, (2) that the Philippine Honest and Company was a partnership between Lun and Fieng, and (3) that the Deed of Sale dated 24 August 1923 involving the Barcelona property is sufficient to establish co-ownership. Also, petitioners were not able to prove the existence of the alleged Chinese custom of placing properties in the name of the eldest child as provided under Article 12^[11] of the Civil Code.

In contrast, respondents were able to show documents of sale from the original owners of the Gubat property rendering the claim of custom as immaterial.^[12] Also, respondents sufficiently established that Fieng was the registered owner of the Gubat and Barcelona properties while Lun was merely an administrator.

The relevant portions of the CA decision provide:

x x x As to the Gubat property, appellee (petitioner Co Giok Lun in this case) failed to establish the following with reasonable certainty: a) that Co Chaco gave Co Bon Fieng P8,000.00 as business capital for him and his brother; and b) that Philippine Honest and Company is a partnership between him and Co Bon Fieng. Appellee's testimony is that his father told him that the latter gave Co Bon Fieng P8,000.00 is hearsay since he had no personal knowledge of the fact that Co Chaco gave Co Bon Fieng said amount. Even if the trial court admitted said testimony, it remains without probative value. x x x Allegedly, this amount was the contribution of appellee and Co Bon Fieng to the capital of their partnership - Philippine Honest and Company. Nevertheless, by reason of appellee's failure to prove the existence of this amount, the existence of the partnership remains doubtful. Appellee present[ed] the certification of registration of the Philippine Honest and Company to prove the existence of the partnership but the registration indicates only the name of Co Bon Fieng as the owner thereof. Without the capital contribution and the partnership, appellee's claim of co-ownership over the Gubat property does not have any basis.

To further prove his claim of co-ownership over the Gubat property, appellee presents Tax Declarations pertaining to the subject property from 1929 to 1983, renewal certificate from Malayan Insurance Company, Inc., insurance contract and statements of accounts from Supreme Insurance Underwriters. These documents, however, uniformly indicate Co Bon Fieng as the owner of the subject property and appellee as mere administrator thereof. Too, appellee proffers utility bills and receipts indicating payment to Erquiaga, Inc., a creditor of Co Bon Fieng, in support of his claim of co-ownership. These documents however, find no relevance in this case. Appellee's assumption of Co Bon Fieng's liabilities and his payment of utilities without getting any contribution from appellants are kind acts but certainly do not prove his claim of co-ownership. Neither do the court declarations in Civil Case No. 210 prove appellee's claim of co-ownership, for only issues concerning possession were resolved in said unlawful detainer suit. Lastly, contrary to the claim of appellee, the affidavit of Co Che Bee, which recognizes appellee as a co-owner of the subject property, cannot bind Co Bon Fieng, for well-settled is the rule that the rights of a party cannot be prejudiced by an act, declaration, or omission of another. Hence, appellee's claim of co-ownership over the Gubat property must fail.

Concerning the Barcelona property, appellee proffers a deed of sale dated 24 August 1923 to support his claim that he and Co Bon Fieng are co-owners thereof. Under said deed, the subject property was sold to Co Chaco. Nevertheless, the deed proves just that - Co Chaco purchased the subject property. It does not establish subsequent events or validly dispute the transfer of the subject property by Co Chaco to Co Bon Fieng. Moreover, said document does not have any probative value to refute the real property tax declarations of the subject property in the name of appellant Jose Co. This document is inadequate to establish co-ownership between appellee and Co Bon Fieng over the Barcelona property.

In fine, appellee's evidence in support of his claim is either insufficient or immaterial to warrant the finding that the subject properties fall under the purview of co-ownership. Appellee failed to prove that he is a co-owner of the subject properties.

In contrast, appellants offer convincing evidence that their father, Co Bon Fieng owns the subject properties exclusively. In the "Deed of Sale" dated 13 October 1935 and the "Sale of Real Property" dated 6 August 1936, the former owners of the Gubat property sold the same to Co Bon Fieng only. Although appellee's signature appears in the first document as a witness to its execution, there is no indication in said document or in the other that he was purchasing the subject property together with Co Bon Fieng. Appellee interjects that the foregoing deeds indicate Co Bon Fieng as the owner of the subject property because of the Chinese custom that in similar transactions, the eldest son of the family is normally placed as the purchaser of a property. Appellee, however, failed to prove this custom as a fact; hence cannot be given weight.

x x x

After purchasing the Gubat property, Co Bon Fieng declared the same in tax declarations from 1937 to 1958 as his property. After the death of Co Bon Fieng, appellant Jose Co declared the Gubat property in his name in ensuing tax declarations over the same. As well, the Barcelona property is declared in the name of Jose Co. The Barcelona property was even surveyed for the benefit of appellants, as heirs of Co Bon Fieng.

x x x

x x x Here, we find compelling reasons to reverse the findings of the trial court and hold that the subject properties were owned exclusively by Co Bon Fieng, and now by his legal heirs.^[13]

We see no reason to disturb the findings of the CA. Petitioners failed to substantiate their claim of co-ownership over the Gubat and Barcelona properties. The action for partition cannot be acted upon since petitioners failed to establish any rightful interest in the properties. Petitioners also failed to prove that co-ownership existed between the parties' predecessors-in-interest. Thus, respondents, as legal heirs of Fieng, are entitled to the exclusive ownership of the Gubat and Barcelona properties.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 23 April 2008 and Resolution dated 10 September 2008 of the Court of Appeals in CA-G.R. CV. No. 85920.

SO ORDERED.

Leonardo-De Castro,^* Brion, Perez, and Sereno, JJ., concur.

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^* Designated Acting Member per Special Order No. 1006 dated 10 June 2011.

^[1] Under Rule 45 of the 1997 Revised Rules of Civil Procedure.

^[2] Rollo, pp. 11-23. Penned by Justice Marlene Gonzales-Sison with Justices Lucenito N. Tagle and Monina Arevalo Zenarosa, concurring.

^[3] Id. at 6-10. Penned by Justice Marlene Gonzales-Sison with Presiding Justice Conrado M. Vasquez, Jr. and Justice Monina Arevalo Zenarosa, concurring.

^[4] Id. at 66.

^[5] Id. Roughly translated as:

"Cocoa land situated in Telegrafo Luneta barrio, Barcelona , Sorsogon, with a capacity of 65 "areas" bordered in the North by Hertrudes Casulla, in the south by Antonio Evasco, in the east by the mangroves, and in the west by Atanacio Espera and Eugenio Esteves.

Cocoa land located in Luneta barrio, Barcelona, Sorsogon, with a capacity of 1 hectare, 18 hareas and 67 centiareas, bordered in the north by the Municipal Cemetery before Eugenio Esteves, to the east by Gabriel Gredoña and Laudia Asis, to the south by Amanda Torilla and Florentino Mercader, and to the West by the provincial road.

Undeveloped land with 12 cocoa (or coconut) located in Luneta Barrio, Barcelona, Sorsogon, with a capacity of 2 river inlets equivalent to 34 areas, and a house within the same borders to the North: S. Antonio, to the South: Eugenio Esteves, to the East: provincial road, and to the West: the heirs of the deceased Feliciano Fontelar."

^[6] Docketed as Civil Case No. 1601.

^[7] Rollo, pp. 66-78.

^[8] Id. at 78.

^[9] Id. at 22.

^[10] 471 Phil. 519 (2004).

^[11] Art. 12. A custom must be proved as a fact, according to the rules of evidence.

^[12] Supra note 10.

^[13] Rollo, pp. 18-22.