G.R. No. 109910 April 5, 1995REMEDIOS G. SALVADOR and GRACIA G. SALVADOR,petitioners,vs.COURT OF APPEALS, ALBERTO and ELPIA YABO, FRANCISCA YABO, et al., respondents.DAVIDE, JR.,J.:Assailed in this petition is the legal determination made by the Court of Appeals on the issues of which portion of Lot No. 6080 and Lot No. 6180 formed part of the conjugal assets of the spouses Pastor Makibalo and Maria Yabo, and of whether or not the rights of Pastor's co-heirs in the estate of Maria Yabo were extinguished through prescription or laches.Alipio Yabo was the owner of Lot No. 6080 and Lot No. 6180 situated in Barrio Bulua, Cagayan de Oro City, containing an area of 1,267 and 3,816 square meters, respectively. Title thereto devolved upon his nine children, namely, Victoriano, Procopio, Lope, Jose, Pelagia, Baseliza, Francisca, Maria, and Gaudencia, upon his death sometime before or during the second world war.On 28 April 1976, Pastor Makibalo, who is the husband of Maria Yabo, one of Alipio's children, filed with the then Court of First Instance of Misamis Oriental a complaint, docketed as Civil Case No. 5000, against the spouses Alberto and Elpia Yabo for "Quieting of Title, Annulment of Documents, and Damages." In the complaint, he alleged that he owned a total of eight shares of the subject lots, having purchased the shares of seven of Alipio's children and inherited the share of his wife, Maria, and that except for the portion corresponding to Gaudencia's share which he did not buy, he occupied, cultivated, and possessed continuously, openly, peacefully, and exclusively the two parcels of land. He then prayed that he be declared the absolute owner of 8/9 of the lots in question.1On 8 October 1976, the grandchildren and great-grandchildren of the late Alipio Yabo2lodged with the same court a complaint for partition and quieting of title with damages,3docketed as Civil Case No. 5174, against Pastor Makibalo, Enecia Cristal, and the spouses Eulogio and Remedies Salvador. They alleged that Lot No. 6080 and Lot No. 6180 are the common property of the heirs of Alipio Yabo, namely, the plaintiffs, defendant Enecia Cristal, Maria Yabo and Jose Yabo, whose share had been sold to Alberto Yabo; that after Alipio's death, the spouses Pastor and Maria Makibalo, Enecia Cristal and Jose Yabo became thede factoadministrators of the said properties; and that much to their surprise, they discovered that the Salvador spouses, who were strangers to the family, have been harvesting coconuts from the lots, which act as a cloud on the plaintiffs' title over the lots.The plaintiffs then prayed that (a) they, as well as defendant Pastor Makibalo, in representation of his wife, and Enecia Cristal, in representation of Gaudencia, be declared as the owners of the lots; (b) the Salvador spouses be declared as having no rights thereto except as possible assignees of their co-defendants, Pastor Makibalo and Enecia Cristal; (c) the lots be partitioned according to law among the aforementioned co-owners; and (d) the defendants be made to pay for the value of the fruits they harvested from the lots and for moral and exemplary damages, attorney's fees, expenses of the litigation, and costs of the suit.The two cases were consolidated and jointly heard by Branch 5 of the Court of First Instance of Cagayan de Oro City.By evidence, Pastor, Makibalo sought to prove the following allegations:He was married to Maria Yabo who died on 17 March 1962.4In August 1949, Jose and Victoriano, both surnamed Yabo, sold their respective shares in the disputed lots to one Pedro Ebarat, and in 1952 the latter sold both shares to Pastor Makibalo.5Ebarat formalized this conveyance by executing an Affidavit of Waiver and Quitclaim dated 30 May 1969 in favor of Pastor.6On 16 January 1951, the heirs of the late Lope Yabo sold Lope's shares in the litigated properties to one Dominador Canomon,7who, in turn, sold the same to Pastor.8Canomon afterwards executed an Affidavit of Waiver and Quitclaim in favor of the latter.9Pastor Makibalo likewise purchased the shares of Baseliza in the two lots in 1942, of Procopio in 1957, of Francisca in 1958, and of Pelagia in 1967. The only share he did not buy was that of Gaudencia. After every purchase, he took possession of the portions bought and harvested the products thereof.10In 1966, Pastor sold back to Alberto a portion of Lot No. 6180 which was formerly the share of Alberto's father, Procopio.11In December 1968, Pastor mortgaged the two lots to the spouses Eulogio and Remedios Salvador.12On 26 September 1978, he executed a document denominated as a "Confirmation and Quitclaim" whereby he waived all his rights, interests, and participation in the lots in favor of the Salvador spouses.13On the other hand, by their evidence,l4the spouses Alberto and Elpia Yabo tried to prove that they had repurchased from Pastor Makibalo the share of Procopio, which was previously sold to Pastor, and had bought the shares of Jose and Maria.15Filoteo Yabo denied having sold the share of his father, Lope Yabo, in the contested lots and disowned his signature and those of his mother, brothers, and sisters appearing at the back of Exhibit "C".16Ignacio Yabo testified that his father, Victoriano Yabo, did not know how to write and sign his name. He further declared that he had no knowledge that his father affixed his thumbmark in the document marked as Exhibit "A" purporting to alienate his father's share in the disputed lots.l7On 15 January 1983, the trial court rendered its decision18holding as follows:Assuming that the thumbmark on the typewritten name "Jose Yabo" in Exh. 3 was that of Jose Yabo, Alberto Yabo and Elpia R. Yabo purchased the share of Jose Yabo in bad faith because they knew before and up to the execution of Exh. 3 on October 24, 1972 that Jose Yabo was no longer the owner of that area because from the documents she borrowed from Mrs. Salvador they came to know that Jose Yabo had sold his shares to Pedro Ebarat, and they have seen that Pastor Makibalo has been in possession of those shares together with the seven others exclusively as owner, he having mortgaged them to Mrs. Salvador.As Jose Yabo was no longer the owner of the one-ninth (1/9) shares which he sold to Alberto Yabo and Elpia Yabo under Exh. 3, the sale is null and void, and Alberto and Elpia acquired nothing because Jose Yabo had no more title, right or interest to dispose of.. . .Pastor Makibalo had been in possession of Jose Yabo's share since 1949 after purchasing it from Ebarat, and has been in possession thereof up to September 26, 1978 when he sold it to the spouses Eulogio Salvador and Remedios Salvador, who are now in possession of the same.Exh. A, evidencing the sale of Victoriano Yabo's share to Pedro Ebarat was identified by the latter who testified that he sold it to Pastor Makibalo in 1951. Exh. A is an ancient document 1949 when the document came to existence up to now is more than 30 years, and the document had been in the possession of Pastor Makibalo, then Remedios Salvador who had interest in its preservation.As regards the shares of Lope Yabo, the same had been sold by his surviving spouse Juana Legaspi, and his children Filoteo, Andresa, Jovita, Bonifacio, and Rundino for P105.00 on January 16, 1951 to Dominador Conomon (Exh. C and C-1), who in turn sold it to Pastor Makibalo in 1952, executing a formal Deed of Waiver and Quitclaim on May 30, 1969(Exh. D).Exh. C is an ancient document, being more than 30 years old and has been in the possession of Pastor Makibalo and then the spouses Eulogio and Remedios Salvador who had an interest in its preservation. The claim of Filoteo Yabo that the signatures appearing in Exh. C are not his and those of his brothers and sisters are of no avail, for if they were not the ones who affixed those signatures and so they did not sell the shares of their father Lope Yabo, why did they not then take possession of said shares they remained silent from 1951 to September 16, 1976 a period of 25 years. They are now [e]stopped by laches.And as regards the shares of Baseliza, Francisca and Pelagia, there is no evidence presented to effectively rebut the testimony of Pastor Makibalo that he acquired the shares of Baseliza Yabo in 1942 by changing it with a buffalo; that he bought the shares of Francisca Yabo in 1958 and that he bought the shares of Pelagia Yabo in 1967; Pastor Makibalo had been in possession of these shares from the time he acquired them, continuously, adversely, openly, and peacefully, as owner up to the time he sold his rights and interest therein to the spouses Eulogio and Remedies Salvador. The heirs of Baseliza, Francisca and Pelagia have not taken any step to protect their rights over those shares for over 40 years in the case of Baseliza's share, for about 20 years in the case of Francisca's share, and for more than 10 years in the case of Pelagia's share. Laches, likewise has rendered their rights stale.On March 10, 1966 Pastor Makibalo sold back to Alberto Yabo the share of Procopio Yabo in Lot 6180 (Exh. 1 and 2), but there is nothing to show that. Pastor Makibalo also sold back Procopio's share in Lot 6080.So then, by purchase, Pastor Makibalo and Maria Yabo acquired the shares of Baseliza, Victoriano, Jose, Lope, Procopio and Francisca, or six (6) shares from Lots 6080 and 6180. These belonged to the conjugal partnership of Pastor Makibalo and Maria Yabo. Maria Yabo had also a share from Lots 6080 and 6180, and Pastor Makibalo acquired the shares of Pelagia Yabo in both Lots 6080 and 6180. All in all; Pastor Makibalo acquired eight shares in both Lot 6080 and 6180.While Maria Yabo died on March 17, 1962, and so one-fourth (1/4) of the shares of Baseliza, Victoriano, Jose, Lope, and Francisca, or one-fourth of five-ninth (5/9) of both lots and one-fourth (1/4) of Lot 6080 should go to the children of the brothers and sisters of Maria Yabo by virtue of the provisions of Article 1001 of the New Civil Code, the latter have lost their rights thereto by laches for their inaction for a very long period and their rights have become stale. On the other hand, Pastor Makibalo who had been in possession of the whole of the eight shares in both Lots 6080 and 6180, enjoying the fruits thereof exclusively, uninterruptedly, publicly, peacefully, and continuously from the death of Maria Yabo up to the filing of the complaint in Civil Case No. 5174 on October 8, 1976, or a period of 14 years, had acquired title to the whole of the eight shares in Lot 6080 and seven shares in Lot 6180 (the share of Procopio in Lot 6180 had been sold back to Alberto Yabo).IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered finding Pastor Makibalo, now Eulogio Salvador and Remedios Salvador the owner of eight (8) shares, equivalent to eight-ninth (8/9) of Lot No. 6080, and of seven (7) shares, equivalent to seven-ninth (7/9) of Lot No. 6180, and therefore, ordering the partition of Lot 6080 so that the one-ninth (1/9) alloted to Gaudencia Yabo will go to her heirs or their assigns, and the remaining eight-ninth (8/9) will go to the spouses Eulogio Salvador and Remedios Salvador, as successor of Pastor Makibalo, and the partition of Lot 6180 so that the seven-ninth (7/9) portion which formerly belonged to Baseliza, Victoriano, Jose, Lope, Maria, Francisca, and Pelagia will go to the spouses Eulogio and Remedios Salvador, the one-ninth (1/9) which formerly belonged to Procopio, will go to Alberto Yabo, and the remaining one-ninth (1/9) which formerly belonged to Gaudencia, will go to Gaudencia's heirs or their assigns.Doc. No. 720, recorded on page 28 of Notarial Register No. VII, and acknowledged before Notary Public Isidro S. Baculio (Exh. E) [purportedly executed by Maria Yabo and Pastor Makibalo] is hereby declared null and void, and so the Office of the City Fiscal is directed to cause an investigation of this matter to find out the person or persons responsible for the falsification of the said document, and if the evidence warrants, to file the corresponding criminal action in court. The Office of the City Assessor of Cagayan de Oro City is, likewise, directed to cause the cancellation of Tax Declarations Nos. 33553, marked as Exh. H-3, 33557, marked as Exh. H-2, both in the name of Alberto Yabo, for having been issued on the basis of a falsified document. Let copies of this decision be furnished the Offices of the City Fiscal and City Assessor, both of Cagayan de Oro City.No pronouncement as to damages, attorney's fees and costs.SO ORDERED.19The defendants in Civil Case No. 5000 and the plaintiffs in Civil Case No. 5174 appealed from the decision to the Court of Appeals on 19 August 1983.20In its decision of 3 February 1993,21the Court of Appeals held that (a) Maria Yabo did not sell her share to Alberto and Elpia Yabo; (b) prescription and laches have not run against the private respondents with respect to the 1/9 share of Maria Yabo in the estate of her father and to her conjugal share in the portions acquired from her brothers and sisters; and (c) Procopio never sold his share in Lot No. 6080 to Pastor Makibalo. More specifically it stated:Exh. E is the document found by the lower court to be a falsification. This finding appellants do not dispute and have not raised an error.. . .While acknowledging. that upon the death of Maria Yabo on March 17, 1962, one-half (1/2) of the share of Maria Yabo in Lots 6080 and 6180 and one-half (1/2) of Maria Yabo's conjugal share in the portions bought from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca should go to the children of the brothers and sisters of Maria in accordance with Article 1001 of the Civil Code, the lower court rule that said children have lost their rights by laches "for their inaction for a very long period and their rights have become stale" (Decision, p. 16; Record, Vol. 2, p. 158).Appellants in their second assignment of error aver that this is an error.We agree that the lower court erred.While between March 17, 1962 when Maria Yabo died and October 8, 1976, when Civil Case No. 5174 for partition was filed, was a period of more than fourteen (14) years, that alone to our mind would not suffice to establish laches or prescription. Upon the death of Maria Yabo, appellee Pastor Makibalo and appellants and the other children of the brothers and sisters of Maria, by operation of law become co-owners of the one-ninth (1/9) share of Maria as heir of her father Alipio and the conjugal share of Maria in the portions acquired from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca. Time alone is not a decisive factor. Appellee Pastor Makibalo, it must be remembered, is the husband of Maria and, therefore, an uncle in-law of appellants. In our culture, a demand by an heir or heirs for partition immediately upon the death of a relative is more often taken not as a legitimate assertion of a right but of something else, like greed. It must also be noted that the spouses, the appellee Pastor Makibalo and his deceased wife Maria, were childless and, therefore, appellants and the other children of the brothers and sisters of Maria must have felt that at any rate the property would go to them in the course of time. This probably explains why appellants started asserting their right over the property only after appellee Pastor Makibalo sold the same to the spouses Eulogio and Remedios Salvador. Besides, Lots 6080 and 6180 have a combined area only of 5,083 square meters and before the development of Northern Mindanao, and even in 1962 when Maria Yabo died, were not that valuable. This is shown by the fact that each heir sold his other share only for P110.00.As we have said not time alone. In the early case ofCortes v. Oliva, 33 Phil. 480, it was held that"(o)rdinarily, possession by one joint owner will not be presumed to be adverse to the others, but will, as a rule, be held to be for the benefit of all. Much stronger evidence is required to show an adverse holding by one of several joint owners than by a stranger; and in such cases, to sustain a plea of prescription, it must always clearly appear that one who was originally a joint owner has repudiated the claims of his co-owners, and that his co-owners were apprised or should have been apprised of his claim of adverse and exclusive ownership before the alleged prescription began to run (at page 484). This ruling on prescription should apply with equal force to laches.The third assignment of error challenges the finding of the lower court that "there is nothing to show that Pastor Makibalo also sold back Procopio's share in Lot 6080" (Decision, p. 16; Records, Vol. 2,p. 158).Exhibits 1 and 2 cover only Procopio's share in Lot 6180. In other words, Exhibits 1 and. 2 conveyed back to Alberto Yabo only his father, Procopio's share in Lot 6180.There is indeed no evidence that Pastor Makibalo also sold back to Alberto, his father Procopio's share in Lot 6080.But from the evidence it appears that Procopio Yabo never sold his share in Lot 6080 to Pastor Makibalo. So there was no need to convey back Procopio's share in Lot 6080.This fact is evident from the Affidavit of Confirmation of Sale (Exh. M) dated April 22, 1970, executed by Alberto Yabo, which is the very document relied upon by the lower court (Decision, p. 11; Record, Vol. 2, p. 153) in finding that "Alberto Yabo admitted that the share of his father Procopio Yabo was previously bought by Pastor Makibalo." A look at Exh. M, particularly par. 3 thereof, reveals that AlbertoYabo merely acknowledged or confirmed the sale of his father's share to Pastor Makibalo in Lot 6180. In effect, it at the same time proves that Lot 6080 was never sold by Procopio to appellee Pastor Makibalo; otherwise, it would have been included in the said Affidavit of Confirmation of Sale. The Deed of Absolute Sale (Exh. 2) subsequently executed by Pastor Makibalo in favor of Alberto Yabo on April 23, 1970, further proves this point, since the latter merely bought back what was previously sold, his father's share in Lot 6180.22The respondent court then concluded and held as follows:In summary, appellee Pastor Makibalo and his assigns, the spouses Eulogio and Remedios Salvador, are entitled only to one-half () of the one-ninth (1/9) share of Maria and three-fourths (3/4) of the six-ninth (6/9) shares acquired from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca. Accordingly, the partition should be done as follows:(1) 1/9 of Lots 6080 end 6180 should be given to the heirs of Gaudencia Yabo or their successors and assigns;(2) 1/9 of Lot 6180 should go to Alberto Yabo and his wife Elpia Yabo;(3) 1/9 of Lot 6080 should be given to the heirs of Procopio Yabo and their successors end assigns, including Alberto Yabo;(4) The 1/9 share of Maria Yabo in Lots 6080 and 6180 should be partitioned: One-half (1/2) for the surviving spouse Pastor Makibalo (now the spouses Eulogio Salvador and Remedios Salvador) and the other half for the children of the brothers and sisters of Maria Yabo in equal shares.(5) The remaining 6/9, one-half (1/2) of which is conjugal between Maria Yabo and appellee Pastor Makibalo should be partitioned three-fourths (3/4) for Pastor Makibalo (now the spouses Eulogio Salvador and Remedios Salvador) and one-fourth (1/4) for the children of the brothers and sisters of Maria Yabo in equal shares.(6) Jose Yabo if he is still alive should participate in the partition as heir of Maria otherwise he shall be represented by his children.WHEREFORE, premises considered, subject to the modification in the partition, as indicated above, the decision appealed from is AFFIRMED, without pronouncement as to costs. The lower court is directed if necessary to fully effect the partition, to conduct further hearings and determine whether Jose Yabo is still alive and who are the children of the brothers and sisters of Maria Yabo.23Unable to obtain a reconsideration of the said-decision, Remedios Salvador, together with her daughter, Ma. Gracia Salvador, as one of the successors-in-interest of Eulogio M. Salvador who died during the pendency of the appeal,24elevated the case to this Court contending that the respondent court erred in ruling that: (1) the shares of Pelagia Yabo should be included in the partition; (2) prescription and laches have not run against the private respondents in relation to the 1/9 share of Maria Yabo in the estate of her father and to her conjugal share in those acquired by purchase; (3) Procopio Yabo never sold to Pastor Makibalo his share in Lot No. 6080; and(4) Jose Yabo should be allowed to participate as heir of Maria even as he had openly rejected this option by refusing to participate in both civil cases.25Article 160 of the Civil Code provides that all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains .exclusively to the husband or to the wife. Since the shares of Jose, Victoriano, Lope, Baseliza, Procopio, and Francisca in Lot No. 6180 and Lot No. 6080 had been purchased by Pastor during his marriage with Maria, and there is no proof that these were acquired with his exclusive money, the same are deemed conjugal properties. Not forming part of the conjugal partnership are: (1) the 1/9 share inherited by Maria which remained as her exclusive property pursuant to Article 146 (2) of the Civil Code; (2) the 1/9 share of Gaudencia which was not sold to Pastor; and (3) the 1/9 share of Pelagia which was acquired by Pastor in 1967 or five years after the death of his wife and which was therefore his exclusive property.There is, thus; merit in the petitioners' first assigned error. The Court of .Appeals should have excluded from the conjugal partnership the share of Pelagia which Pastor had acquired after his wife's death.Upon Maria's death in 1962, the conjugal partnership of gains was dissolved.26Half of the conjugal properties, together with Maria's l/9 hereditary share in the disputed lots, constituted Maria's estate and should thus go to her surviving heirs.27Under Article 1001 of the Civil Code, her heirs are her spouse, Pastor Makibalo, who shall be entitled to-one-half (1/2) of her estate, her brother, Jose, and the children of her other brothers and sisters, who shall inherit the other half. There having been no actual partition of the estate yet, the said heirs became co-owners thereof by operation of law.28We now determine whether prescription and laches can be applied against the co-heirs of Pastor Makibalo.It has been said that Article 494 of the Civil Code which provides that each co-owner may demand at any time the partition of the common property implies that an action to demand partition is imprescriptible or cannot be barred by laches.29The imprescriptibility of the action cannot, however, be invoked when one of the co-owners has possessed the property as exclusive owner and for a period sufficient to acquire it by prescription.30What needs to be addressed first is whether or not Pastor Makibalo has acquired by prescription the shares of his other co-heirs or co-owners. Prescription as a mode of acquiring ownership requires a continuous, open, peaceful, public, and adverse possession for a period of time fixed by law.This Court has held that the possession of a co-owner is like that of a trustee and shall not be regarded as adverse to the other co-owners but in fact as beneficial to all of them.31Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned. A mere silent possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection of buildings and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners.32Thus, in order that a co-owner's possession may be deemed adverse to thecestui que trustor the other co-owners, the following elements must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of thecestui que trustor the other co-owners; (2) that such positive acts of repudiation have been made known to thecestui que trustor the other co-owners; and (3) that the evidence thereon must be clear and convincing.33InPangan vs. Court of Appeals,34this Court had occasion to lay down specific acts which are considered as acts of repudiation:Filing by a trustee ofan action in courtagainst the trustor to quiet title to property, or for recovery of ownership thereof, held in possession by the former, may constitute an act of repudiation of the trust reposed on him by the latter.Theissuance of the certificate of titlewould constitute an open and clear repudiation of any trust, and the lapse of more than 20 years, open and adverse possession as owner would certainly suffice to vest title by prescription.An action for the reconveyance of land based on implied or constructive trust prescribes within 10 years. And it is from the date of theissuance of such titlethat the effective assertion of adverse title for purposes of the statute of limitation is counted.The prescriptive period may only be counted from the time petitioners repudiated the trust relation in 1955 upon thefiling of the complaint for recovery of possessionagainst private respondents so that the counterclaim of the private respondents contained in their amended answer wherein they asserted absolute ownership of the disputed realty by reason of the continuous and adverse possession of the same is well within the l0-year prescriptive period.There is clear repudiation of a trust when one who is an apparent administrator of property causes thecancellation of the titlethereto in the name of the apparent beneficiaries and gets a new certificate of title in his own name.It is only when the defendants, alleged co-owners of the property in question,executed a deed of partition and on the strength thereof obtained the cancellation of the titlein the name of their predecessor and the issuance of a new one wherein they appear as the new owners of a definite area each, thereby in effect denying or repudiating the ownership of one of the plaintiffs over his alleged share in the entire lot, that the statute of limitations started to run for the purposes of the action instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights thereunder.The records do not show that Pastor Makibalo adjudicated to himself the whole estate of his wife by means of an affidavit filed with the Office of the Register of Deeds as allowed under Section 1 Rule 74 of the Rules of Court, or that he caused the issuance of a certificate of title in his name or the cancellation of the tax declaration in Alipio's name and the issuance of a new one in his own name. The only act which may be deemed as a repudiation by Pastor of the co-ownership over the lots is his filing on 28 April 1976 of an action to quiet title (Civil Case No. 5000). The period of prescription started to run only from this repudiation. However, this was tolled when his co-heirs, the private respondents herein, instituted on 8 October 1976 an action for partition (Civil Case No. 5174) of the lots. Hence, the adverse possession by Pastor being for only about six months would not vest in him exclusive ownership of his wife's estate, and absent acquisitive prescription of ownership, laches and prescription of the action for partition will not lie in favor of Pastor.35The issue presented by the petitioners in their third assigned error involves a question of fact. This Court is not ordinarily a trier of facts, its jurisdiction being limited to errors of law. Thus; the findings of facts of the Court of Appeals are as a rule deemed conclusive. However, when the findings of facts of the appellate court vary with those of the trial court, this Court has to review the evidence in order to arrive at the correct findings.36In the instant case, a conflict in the findings of facts of the lower courts exists. The trial court found that Pastor was the owner of Procopio's share in Lot No. 6080, as there was nothing to show that he sold it back to Alberto Yabo. The respondent court on the other hand, held that Procopio Yabo never sold his share in Lot No. 6080 to pastor, thus, there was no need to convey it back to Procopio's son, Alberto.At this juncture, it is worthy to quote pertinent portions of the testimony of Pastor Makibalo:COURT: (To the witness.)Q Where is AlbertoYabo living?A It is there in their house at Bulua.ATTY. JARAULA: (Continuing.)Q In whose land?A Alipio Yabo's land.Q What relation has that land to the two (2) parcels of land under litigation?A I bought already.Q So, will you please tell the Honorable Court, why Alberto Yabo is staying on that land when you said you have bought that land already.A So, I sold back a portion to them because they requested me.COURT: (To the witness.)Q When was that when you said that Alberto Yabo requested a portion?A In 1967.COURT:Q Did you give that portion which they requested?A Their share being inherited from their father Procopio was the portion they requested.COURTQ Yes. Did you grant that?A Yes.Q That is the area you sold to Alberto Yabo, pursuant to his request?A Because that was the land they inherited from their father that was what they requested.Q All right. So that, the area now being occupied by Alberto Yabo?A Yes. That land in the Centro.Q This is now identified as Lot No. 6180?A Yes, Your Honor.ATTY. JARAULA: (Continuing.)Q Where did you sign a document ceding that portion requested by Alberto Yabo?A We did not make any receipt in favor of AlbertoYabo because they got only the receipt of that of his father.COURT: (To the witness.)Q You mean to say, that the receipt which Procopio signed when he sold his share for [sic] the document which Alberto got?A Yes.COURT:All right.ATTY. JARAULA (Continuing.)Q Now, for how much did you buy. the shares of each of the brothers and sisters of your wife?A One Hundred Ten (P110.00) Pesos.Q When you sold back to Alberto Yabo, the portion corresponding to the share of his father Procopio in the Poblacion, how much did he pay you?A The same.Q By the same, you are referring by the same amount of One Hundred Ten (P110.00) Pesos?A Yes, Sir. The same amount.37The petitioners contend that the sales or conveyances made by Alipio's heirs were for their consolidated shares in the two lots. If this was so, and the receipt which Procopio signed when he sold his consolidated share to Pastor was turned over to Alberto, the inevitable conclusion is that Alberto redeemed his father's share in both lots, not only in Lot: No. 6180. This conclusion is further buttressed by the above-quoted testimony of Pastor that he bought the shares (consolidated) of each of Alipio's heirs for P110.00 and that when he sold back to Alberto the former share of Procopio, Alberto paid him the same amount of P110.00.However, since the share of Procopio in the two litigated parcels of land was purchased by Pastor during his marriage with Maria, the same became conjugal property, and half of it formed part of Maria's estate upon her death in 1962. Accordingly, Pastor's resale in favor of Alberto could only be valid with respect to Pastor's one-half (1/2) conjugal share and one-fourth (1/4) hereditary share as heir of Maria.38The remaining one-fourth (1/4) should go to Pastor's co-heirs, the private respondents herein.Now on the fourth assigned error.Section 1, Rule 69 of the Rules of Court requires that all persons interested in the land sought to be partitioned must be joined as defendants in the complaints. All co-owners and persons having an interest in the property are considered indispensable parties and an action for partition will not lie without the joinder of said persons.39It has been held that the absence of an indispensable party in a case renders ineffective all the proceedings subsequent to the filing of the complaint including the judgment.40It must be recalled that in Civil Case No. 5174 the private respondents sought the partition of the two lots based on the co-ownership which arose from the right of succession to Alipio's estate. Since Jose Yabo confirmed, through his thumbmark in the verification of the complaint, that he had already parted with his share in Alipio's estate, he in effect admitted that he had ceased to be a co-owner of the two lots which comprised his father's estate. Thus, his non-joinder as a party-plaintiff in the complaint would appear to be proper. He does not, as well, appear to be an indispensable party in Civil Case No. 5000.As it turned out, however, the evidence and the issues which cropped up rendered imperative the determination of the conjugal assets of Pastor Makibalo and Maria Yabo and the partition of the latter's estate among her heirs. Her estate consists of one-half() of the conjugal properties, which should then be divided pursuant to Article 1001 of the Civil Code since the marriage produced no child; thus: one-half () to Pastor, and the other half to her brother Jose, and to her nephews and nieces.Insofar as the partition of Maria Yabo's estate is concerned, Jose is an indispensable party. Strictly, the rule on indispensable parties may bar a partition of Maria's estate. Considering, however, that such estate or its partition are but incidents in Civil Case No. 5000 and Civil Case No. 5174, and the parties have not offered any objection to the propriety of the determination and partition of her estate, then in the light of Section 11 of Rule 341and Sections 1 and 5, Rule 1042of the Rules of Court, and following the rulings of this Court in the 1910 case ofAlonso vs. Villamor43and the 1947 case ofCuyugan vs. Dizon,44an amendment of the complaint in Civil Case No. 5174 to implead Jose Yabo as party plaintiff would be in order.InAlonso, it was held that under Section 110 of the Code of Civil Procedure whose first paragraph is substantially the same as the aforesaid Section 1 of Rule 10 and Section 503 thereof, this Court "has full power, apart from that power and authority which is inherent, to amend the process, pleadings, proceedings, and decision in this case by substituting, as party plaintiff, the real party in interest." Our ruling inCuyuganstates:We, however, do not believe that the case should be dismissed for plaintiff's failure to join her husband. (Sec. 11, Rule 2, Rules of Court). Nor should the case be remanded to the court below and a new trial ordered on this account. The complaint may and should be amended here, to cure the defect of party plaintiffs, after final decision is rendered. Section 11, Rule 2, and Section 2, Rule 17, explicitly authorize such procedure. As this Court had occasion to say inQuison vs. Salud, (12 Phil., 109, 116), "a second action would be but a repetition of the first and would involve both parties, plaintiffs and defendant, in much additional expense and would cause much delay, in that way defeating the purpose of the section, which is expressly stated to be "that the actual merits of the controversy may speedily be determined without regard to technicalities and in the most expeditious and inexpensive manner." (See also Diaz vs. De la Rama, 73 Phil., 104)To avoid further delay in the disposition of this case, we declare Civil Case No. 5174 as thus duly amended. Consequently, Jose Yabo may participate in the partition of the estate of Maria Yabo. The fourth assigned error must then be rejected.In view of the foregoing disquisitions, the appealed judgment should be modified as follows: (a) the former 1/9 share of Pelagia Yabo in Lots No. 6180 and 6080 which she sold to Pastor should be treated as the latter's exclusive property which should now pertain to the petitioners, his successors-in-interest; and (b) the former 1/9 share of Procopio Yabo in both lots should be divided as follows: 3/4 (respondent Pastor's 1/2 conjugal share and 1/4 representing his share therein as Maria's heir) for the spouses Alberto and Elpia Yabo, and 1/4 (representing the share therein of Maria's collateral relatives as Maria's heirs) for the private respondents, including Alberto and Jose Yabo. The partition of the two lots in controversy should therefore be made in this wise:(1) 1/9 share of Gaudencia Yabo should be allotted to her heirs or successors-in-interest;(2) 1/9 share formerly belonging to Pelagia Yabo to the petitioners as successors-in-interest of Pastor Makibalo;(3) 1/9 hereditary share of Maria Yabo to be divided as follows:(a) 1/2 for the petitioners (as successors-in-interest of Pastor Makibalo), and(b) 1/2 for the private respondents, including Jose Yabo or his heirs;(4) 1/9 share formerly belonging to Procopio Yabo to be divided thus:(a) 3/4 for Spouses Alberto and Elpia Yabo, and(b) 1/4 for the other private respondents, including Jose Yabo or his heirs;(5) 5/9 shares which became the conjugal properties of Pastor Makibalo and Maria Yabo to be divided thus:(a) 3/4 for the petitioners (as successors-in-interest of Pastor Makibalo), and(b) for the private respondents, including Jose Yabo or his heirs.In sum, Lots Nos. 6180 anid 6080 should be partitioned as follows:1/9 or 4/36 to Guadencia Yabo's heirs or successors-in-interest;3/4 of 1/9 or 3/36 to the spouses Alberto and Elpina Yabo;8/36 to the private respondents, including Jose Yabu or his heirs;21/36 to the petitioners as successors-in-interest of Pastor Makibalo.WHEREFORE, the challenged decision of the Court of Appeals of 8 February 1993 in CA-G.R. CV No. 12839 is AFFIRMED, subject to the modifications indicated above. Upon the finality of this decision, let this case be forthwith remanded to thecourt a quofor further proceedings on the partition of Lots Nos. 6180 and 6080 in conformity with this decision.No pronouncement as to costs.SO ORDERED.Padilla, Bellosillo, Quiason and Kapunan, JJ., concur.Footnotes41 It provides:Sec. 11. Misjoinder and non-joinder of parties. Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately.42 They provide:Sec. 1. Amendments in general. Pleadings may be amended by adding or striking out an allegation or the name of any party, or by correcting a mistake in the name of a party or a mistaken or inadequate allegation or description in any other respect, so that the actual merits of the controversy may speedily be determined, without regard to technicalities, and in the most expeditious and inexpensive manner.xxx xxx xxxSec. 5. Amendment to conform to or authorize presentation of evidence. When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects, as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at anytime, even after judgment; but failure so to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence.G.R. No. 103301 December 8, 1995SERVICEWIDE SPECIALISTS INCORPORATED,petitioner,vs. HON. COURT OF APPEALS and ARMANDO CUSTODIO, JR.,respondents. VITUG,J.:This petition of Servicewide Specialists, Incorporated, seeks a review oncertiorariof the 30th August 1991 decision of the Court of Appeals1in CA-G.R. CV No. 20289 setting aside the judgment of the Regional Trial Court of Manila, Branch 19,2which disposed of then Civil Case No. 83-18536, a suit for replevin and damages, as follows:WHEREFORE, judgment is hereby rendered, in favor of plaintiff and against the defendant Armando Custodio, Jr., ordering him to deliver and return the motor vehicle in question, complete with accessories and equipment; and in the event that manual delivery of the said meter vehicle cannot be effected, ordering said defendant to pay the sum of P54,642.50, plus interest at the rate of 14%per annum, from June 18, 1983 until fully paid, and to pay the costs.SO ORDERED.3The litigation concerns a motor vehicle, a Colt Galant Sigma 1600E, 1977 model, 4-door sedan, colored Baikal White, with Serial No. A-121-UL-493 and Engine No. 2G-171-34. The decisions of both the appellate court and the trial court rest on the following representation of the facts:Plaintiff's evidence shows that, on August 29, 1977, Eleuterio Bondoc executed and delivered to Carmark Philippines a promissory note in the sum of P66,119.04, payable in installments, Exhibit A, and in order to secure payment, a chattel mortgage was executed in favor of Carmark Philippines over the aforementioned motor vehicle, Exhibit B, which was subsequently assigned in favor of Filinvest Corporation, with the conformity of Eleuterio Bondoc, Exhibit C.On July 27, 1979, Eleuterio Bondoc, as vendor, executed a deed of sale with assumption of mortgage of the balance of the account in favor of Cesar Dollente, Exhibits D and D-1, which, upon approval by Filinvest Corporation, Cesar Dollente executed and delivered to Filinvest Corporation a promissory note in the amount of P37,528.83, payable in installments, Exhibit E. On October 26, 1979, Cesar Dollente, as vendor, executed a deed of sale with assumption of mortgage over the aforementioned vehicle for the balance of his account in favor of Ernesto Dollente, Exhibit E. On September 28, 1979, Ernesto Dollente executed and delivered to Filinvest Corporation a promissory note for the sum of P37,528.83, payable in monthly installments. This obligation was secured by a chattel mortgage executed between Cesar Dollente and Ernesto Dollente, which was annotated and registered, Exhibit B-1. Subsequently, Filinvest Corporation assigned all its rights and interests on the promissory note and chattel mortgage to plaintiff, with notice to Ernesto Dollente. The original defendant Ernesto Dollente, having defaulted in the payment of the monthly installments which fell due on June 15, 1979 up to September 15, 1981, plaintiff demanded from said defendant the payment of the entire balance, which includes interest thereon and to return the motor vehicle in question. By reason of the refusal of the original defendant to pay the entire balance and to surrender possession of the subject motor vehicle, this case was filed and, upon its filing, upon motion, a writ of seizure was issued and the same was implemented by the sheriff. A counter-replevin bond having been filed, defendant Armando Custodio, Jr. had obtained possession of the mortgaged vehicle.Traversing the plaintiffs claim, defendant's evidence shows that, on September 8, 1978, defendant Armando Custodio, Jr. obtained the motor vehicle in question by purchase from Ernesto Dollente, Exhibit 1. Ernesto Dollente bought the same on April 14, 1978 from Venus Motor Sales, Exhibits 2 and 3. When defendant bought the said vehicle from Ernesto Dollente, he was issued a clearance from the Constabulary Highway Patrol Group, Exhibits 4 and 4-A. Since then defendant has been possessing the vehicle in question. This vehicle was previously registered at Urdaneta, Pangasinan.4Finding preponderance of the evidence in favor of herein petitioner, the lower court ruled:The claim of herein defendant that, Ernesto Dollente's breach of the chattel mortgage should not bind him, because he is not a privy to such contract, is hardly acceptable, for the reason that the registration of the chattel mortgage is an effective and binding notice to him of its existence. The transaction of Ernesto Dollente, which led to the transfer of the registration of this motor vehicle in favor of defendant Armando Custodio, Jr., is doubtful and must have been conveniently arranged or manipulated to effect this transfer. It is settled that once a mortgage is registered with the Register of Deeds and in the Land Transportation Commission, it is binding against anybody, including defendant Armando Custodio, Jr. As correctly pointed out, in purchasing the motor vehicle in question, defendant Armando Custodio, Jr. knew or, at least, was presumed to know, by the mere fact that the mortgage was registered in the Office of the Register of Deeds, as in this case, the said chattel mortgage was subject to a mortgage lien.5On appeal to it, the Court of Appeals saw merit in the contention of private respondent that the dismissal at the instance of petitioner himself of the amended complaint against Ernesto Dollente after a failure of summons on him, was "fatal to the entire action" Dollente being, in the considered view of the appellate court, an indispensable party to the proceedings. The appellate court elaborated:. . . it is abundantly clear that the dismissal of the complaint as against the principal defendant Dollente has robbed the action of any cause for survival. The replevin suit owed its existence to an alleged right to possession of the motor vehicle, which right in turn was founded on the alleged default of Dollente. Now, since "the case against Ernesto Dollente" was dismissed, albeit without prejudice, there remains no cause of action against said defendant in the case. And since, there is no distinct cause of action against the remaining defendant, herein appellant Custodio, there remains no provable cause in the action. The plaintiff's right to possession of the car in case which is "conditioned upon the fact of actual default on the part of the principal obligor" the existence of which fact "may naturally be the subject of controversy" could not properly be established in the absence, and after the plaintiff-initiated exclusion, of the principal obligor and principal defendant. There is no question, under the circumstances, that Dollente was an indispensable party in the action. His presence is indispensable, essential and compulsory if a final determination of the action should be achieved (Sec. 7, Rule 3).It was clearly an error for the trial court to have proceeded with the case without the indispensable Dollente. The judgment rendered by the trial court following such flawed proceedings is therefore ineffectual and ineffective.6While, in its present petition for review oncertiorari, Servicewide has raised a number of points, the crucial issue still remains, however, to be whether or not an action filed by the mortgagee for replevin to effect a foreclosure of the property covered by the chattel mortgage would require that the mortgagor be so impleaded as an indispensable party thereto.Rule 60 of the Rules of Court allows a plaintiff, in an action for the recovery of possession of personal property, to apply for a writ of replevin if it can be shown that he is "theownerof the property claimed . . . or isentitled to the possessionthereof."7The plaintiff need not be the owner so long as he is able to specify his right to the possession of the property and his legal basis therefor. The question then, insofar as the matter finds relation to the instant case, is whether or not the plaintiff (herein petitioner) who has predicated his right on being the mortgagee of a chattel mortgage should implead the mortgagor in his complaint that seeks to recover possession of the encumbered property in order to effect its foreclosure.The answer has to be in the affirmative.8In a suit for replevin, a clear right of possession must be established. A foreclosure under a chattel mortgage may properly be commenced only once there is default on the part of the mortgagor of his obligation secured by the mortgage. The replevin in the instant case has been sought to pave the way for the foreclosure of the object covered by the chattel mortgage. The conditions essential for that foreclosure would be to show, firstly, the existence of the chattel mortgage and, secondly, the default of the mortgagor. These requirements must be established since the validity of the plaintiffs exercise of the right of foreclosure are inevitably dependent thereon. It would thus seem, considering particularly an adverse and independentclaim of ownershipby private respondent, that the lower court acted improvidently when it granted the dismissal of the complaint against Dollente,albeiton petitioner's (then plaintiff) plea, on the ground that the "non-service of summons upon Ernesto Dollente (would) only delay the determination of the merits of the case, to the prejudice of the parties."9InImson v.Court of Appeals, we have explained:. . . An indispensable party is one whose interest will be affected by the court's action in the litigation, and without whom no final determination of the case can be had. The party's interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties' that his legal presence as a party to the proceeding is an absolute necessity. In his absence there cannot be a resolution of the dispute of the parties before the court which is effective, complete, or equitable.Conversely, a party is not indispensable to the suit if his interest in the controversy or subject matter is distinct and divisible from the interest of the other parties and will not necessarily be prejudiced by a judgment which does complete justice to the parties in court. He is not indispensable if his presence would merely permit complete relief between him and those already parties to the action or will simply avoid multiple litigation.10Without the presence of indispensable parties to a suit or proceeding, a judgment of a court cannot attain real finality.11Having arrived at the foregoing conclusion, the Court need not take up the other issues raised by petitioner.In passing, the failure of summons upon Ernesto Dollente, per the Sheriffs Return dated July 19, 1983,12is said to have been due to defendant's being no longer a resident "at the given address as per information gathered from the present occupant of the premises." It appears that the remedial measures provided in Rule 14 of the Rules of Court regrettably have not been properly availed of; for instance, substitute service of summons under Section 8 thereof could have been resorted to.13WHEREFORE, the decision of the Court of Appeals is AFFIRMED. Costs against petitioner.SO ORDERED.Footnotes7 Section 1. Application. Whenever the complaint in an action prays for the recovery of possession of personal property, the plaintiff may, at the commencement of the action or at any time before answer, apply for an order for the delivery of such property to him, in the manner hereinafter provided.Section. 2. Affidavit and bond. Upon applying for such order the plaintiff must show by his own affidavit or that of some other person who personally knows the facts:(a) That the plaintiff is the owner of the property claimed, particularly describing it, or is entitled to the possession thereof;(b) That the property is wrongfully detained by the defendant, alleging the cause of detention thereof according to his best knowledge, information, and belief;(c) That it has not been taken for a tax assessment or fine pursuant to law, or seized under an execution, or an attachment against the property of the plaintiff, or if so seized, that it is exempt from such seizure; and(d) The actual value of the property.The plaintiff must also give a bond, executed to the defendant in double the value of the property as stated in the affidavit aforementioned, for the return of the property to the defendant if the return thereof be adjudged, and for the payment to the defendant of such sum he may recover from the plaintiff in the action.8 Sec. 7 Compulsory joinder of indespensable parties. Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants. (Rule 3, Rules of Court)THIRD DIVISION[G.R. No. 141970.September 10, 2001]METROPOLITAN BANK, & TRUST COMPANY,petitioner, vs.Hon. FLORO T. ALEJO, in His Capacity as Presiding Judge ofBranch 172 of the Regional Trial Court of Valenzuela; and SY TAN SE, represented by his Attorney-in-Fact, SIAN SUAT NGO,respondents.D E C I S I O NPANGANIBAN,J.:In a suit to nullify an existing Torrens Certificate of Title (TCT) in which a real estate mortgage is annotated, the mortgagee is an indispensable party.In such suit, a decision canceling the TCT and the mortgage annotation is subject to a petition for annulment of judgment, because the non-joinder of the mortgagee deprived the court of jurisdiction to pass upon the controversy.The CaseBefore this Court is a Petition for Review onCertiorari[1]under Rule 45 of the Rules of Court, assailing the March 25, 1999 Resolution of the Court of Appeals (CA) in CA-GR SP No. 50638, which states in full:This resolves the petition for annulment of judgment based on external (sic) fraud filed by petitioner Metropolitan Bank and Trust Company seeking to annul the Decision dated August 12, 1998 rendered by respondent judge, Honorable Floro T. Alejo, Presiding Judge of the Regional Trial Court, Branch 172, Valenzuela, Metro Manila, in Civil Case No. 4930-V-96 entitled Sy Tan Se, represented by his attorney-in-fact Sian Suat Ngo v. Raul Acampado, et al.This Court has observed that petitioner knew of the questioned Decision sometime [i]n October 1998 (Petition, Rollo, p. 3).This being the case, petitioner should have first sought recourse by way of petition for relief from judgment under Rule 38 of the 1997 Rules of Civil Procedure.Accordingly, the petition for annulment of judgment is DENIED DUE COURSE and DISMISSED outright for being insufficient in form and substance (Section 2, Rule 47, 1997 Rules of Civil Procedure).Also challenged is the January 27, 2000 CA Resolution[2]denying petitioners Motion for Reconsideration.The FactsOn November 21, 1995[3]and January 30, 1996,[4]Spouses Raul and Cristina Acampado obtained loans from petitioner in the amounts ofP5,000,000 andP2,000,000, respectively.As security for the payment of these credit accommodations, the Acampados executed in favor of petitioner a Real Estate Mortgage[5]and an Amendment of Real Estate Mortgage[6]over a parcel of land registered in their names.The land was covered by TCT No. V-41319 in the Registry of Deeds of Valenzuela City, where the contracts were also registered on November 20, 1995 and January 23, 1996, respectively.[7]On June 3, 1996, a Complaint for Declaration of Nullity of TCT No. V-41319 was filed by Respondent Sy Tan Se against Spouses Acampado.In the Regional Trial Court (RTC) of Valenzuela, Branch 172, it was docketed as Civil Case No. 4930-V-96,[8]the progenitor of the present controversy.Despite being the registered mortgagee of the real property covered by the title sought to be annulled, petitioner was not made a party to Civil Case No. 4930-V-96,[9]nor was she notified of its existence.Because the spouses defaulted in the payment of their loan, extrajudicial foreclosure proceedings over the mortgaged property were initiated on April 19, 1997.On June 17, 1997, the sheriff of Valenzuela conducted an auction sale of the property, during which petitioner submitted the highest and winning bid.[10]On July 15, 1997, a Certificate of Sale was issued in its favor.[11]This sale was entered in the Registry of Deeds of Valenzuela on July 28, 1997.When the redemption period lapsed exactly a year after, on July 28, 1998, petitioner executed an Affidavit of Consolidation of Ownership to enable the Registry of Deeds of Valenzuela to issue a new TCT in its name.Upon presentation to the Register of Deeds of the Affidavit of Consolidation of Ownership, petitioner was informed of the existence of the August 12, 1998 RTC Decision in Civil Case No. 4930-V-96, annulling TCT No. V-41319.The dispositive portion of the Decision[12]stated:WHEREFORE, judgment is hereby rendered declaring as null and void Transfer Certificate of Title No.V-41319 in the name of defendant Raul Acampado for having proceeded from an illegitimate source.With costs against the defendant.SO ORDERED.On January 27, 1999, petitioner filed with the Court of Appeals a Petition for Annulment of the RTC Decision.Ruling of the Court of AppealsFor being insufficient in form and substance, the Petition for Annulment was outrightly dismissed by the CA.It ruled that petitioner ought to have filed, instead, a petition for relief from judgment or an action for quieting of title.Hence, this Petition.[13]IssuesIn its Memorandum, petitioner presents the following issues:Ix x x [W]hether or not a petition for annulment of judgment under Rule 47 of the 1997 Rules of Civil Procedure is the proper remedy available to petitioner under the circumstances.IIx x x [W]hether or not the judgment of the trial court in Civil Case No. 4930-V-96 should be annulled.[14]The Courts RulingThe Petition is meritorious.First Issue:ProperRemedyRespondents aver that a petition for annulment is not proper, because there were three different remedies available but they were not resorted to by petitioner.We are not persuaded.First, a petition for relief, the remedy pointed to by the Court of Appeals, was not available to petitioner.Section 1, Rule 38 of the Rules of Court, states:Petition for relief from judgment, order, or other proceedings.-When a judgment or final order is entered, or any other proceeding is thereafter takenagainst a partyin any court through fraud, accident, mistake, orexcusable negligence, he may file a petition in such court and in the same case praying that the judgment, order or proceeding be set aside. (Italics supplied)It must be emphasized that petitioner was never a party to Civil Case No. 4930-V-96.InLagula et al. v. Casimiro etal.,[15]the Court held that -- relative to a motion for relief on the ground of fraud, accident, mistake, or excusable negligence-- Rule 38 of the Rules of Court only applies when the one deprived of his right is a party to the case.Since petitioner was never a party to the case or even summoned to appear therein, then the remedy of relief from judgment under Rule 38 of the Rules of Court was not proper.This is plainly provided in the italicized words of the present provision just quoted.Second, in denying petitioners Motion for Reconsideration of the Decision dismissing the Petition for Annulment of Judgment, the Court of Appeals reasoned that another remedy, an action for quieting of title, was also available to petitioner.We do not agree.It should be stressed that this case was instituted to ask for relief from the peremptory declaration of nullity of TCT No. V-41319, which had been issued without first giving petitioner an opportunity to be heard.Petitioner focused on the judgment in Civil Case No. 4930-V-96 which adversely affected it, and which it therefore sought to annul.Filing an action for quieting of title will not remedy what it perceived as a disregard of due process; it is therefore not an appropriate remedy.Equally important, an action for quieting of title is filed only when there is a cloud on title to real property or any interest therein. As defined, a cloud on title is a semblance of title which appears in some legal form but which is in fact unfounded.[16]In this case, the subject judgment cannot be considered as a cloud on petitioners title or interest over the real property covered by TCT No. V-41319, which does not even have a semblance of being a title.It would not be proper to consider the subject judgment as a cloud that would warrant the filing of an action for quieting of title, because to do so would require the court hearing the action to modify or interfere with the judgment or order of another co-equal court.Well-entrenched in our jurisdiction is the doctrine that a court has no power to do so, as that action may lead to confusion and seriously hinder the administration of justice.[17]Clearly, an action for quieting of title is not an appropriate remedy in this case.Third, private respondent cites a last remedy: the intervention by petitioner in Civil Case No. 4930-V-96.The availability of this remedy hinges on petitioners knowledge of the pendency of that case, which would have otherwise been alerted to the need to intervene therein.Though presumed by private respondent, any such knowledge prior to October 1998 is, however, emphatically denied by petitioner.The Petition for Annulment before the Court of Appeals precisely alleged that private respondent purposely concealed the case by excluding petitioner as a defendant in Civil Case No. 4930-V-96, even if the latter was an indispensable party.Without due process of law, the former intended to deprive petitioner of the latters duly registered property right.Indeed, the execution of the Decision in Civil Case No. 4930-V-96 necessarily entailed its enforcement against petitioner, even though it was not a party to that case.Hence, the latter concludes that annulment of judgment was the only effective remedy open to it.The allegation of extrinsic fraud, if fully substantiated by a preponderance of evidence, may be the basis for annulling a judgment.[18]The resort to annulment becomes proper because of such allegation, coupled with the unavailability of the other remedies pointed to by respondents.Second Issue:Lack of JurisdictionIt is undisputed that the property covered by TCT No. V-41319 was mortgaged to petitioner, and that the mortgage was annotated on TCT No. V-41319 before the institution of Civil Case No. 4930-V-96. It is also undisputed that all subsequent proceedings pertaining to the foreclosure of the mortgage were entered in the Registry of Deeds.The nullification and cancellation of TCT No. V-41319 carried with it the nullification and cancellation of the mortgage annotation.Although a mortgage affects the land itself and not merely the TCT covering it, the cancellation of the TCT and the mortgage annotation exposed petitioner to real prejudice, because its rights over the mortgaged property would no longer be known and respected by third parties.Necessarily, therefore, the nullification of TCT No. V-41319 adversely affected its property rights, considering that a real mortgage is a real right and a real property by itself.[19]Evidently, petitioner is encompassed within the definition of an indispensable party; thus, it should have been impleaded as a defendant in Civil Case No. 4930-V-96.An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made, in his absence, without injuring or affecting that interest[;] a party who has not only an interest in the subject matter of the controversy, but also has an interest of such nature that a final decree cannot be made without affecting his interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience.It has also been considered that an indispensable party is a person in whose absence there cannot be a determination between the parties already before the court which is effective, complete, or equitable.Further, an indispensable party is one who must be included in an action before it may properly go forward.A person is not an indispensable party, however, if his interest in the controversy or subject matter is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which does complete justice between them.[20]The joinder of indispensable parties to an action is mandated by Section 7, Rule 3 of the Revised Rules of Civil Procedures, which we quote:SEC 7.Compulsory joinder of indispensable parties. Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants.Aside from the above provision, jurisprudence requires such joinder, as the following excerpts indicate:Indispensable parties must always be joined either as plaintiffs or defendants, for the court cannot proceed without them. x x x. Indispensable parties are those with such an interest in the controversy that a final decree would necessarily affect their rights, so that the courts cannot proceed without their presence.[21]"x x x. Without the precence of indispensable parties to a suit or proceeding, a judgment of a Court cannot attain real finality."[22]Whenever it appears to the court in the course of a proceeding that an indispensable party has not been joined, it is the duty of the court to stop the trial and to order the inclusion of such party. (The Revised Rules of Court, Annotated & Commented by Senator Vicente J. Francisco, Vol. I, p. 271, 1973 ed., See also Cortez vs. Avila, 101 Phil. 705.)Such an order is unavoidable, for the general rule with reference to the making of parties in a civil action requires the joinder of all necessary parties wherever possible, and the joinder of all indispensable parties under any and all conditions, the presence of those latter parties being a sine qua non of the exercise of judicial power.(Borlasa vs. Polistico, 47 Phil. 345, at p. 347.)It is precisely when an indispensable party is not before the court (that) the action should be dismissed.(People vs. Rodriguez, 106 Phil. 325. at p. 327.)The absence of an indispensable party renders all subsequent actuations of the court null and void, for want of authority to act, not only as to the absent parties but even as to those present.[23](emphasis supplied)The evident aim and intent of the Rules regarding the joinder of indispensable and necessary parties is a complete determination of all possible issues, not only between the parties themselves but also as regards to other persons who may be affected by the judgment.A valid judgment cannot even be rendered where there is want of indispensable parties.[24]From the above, it is clear that the presence of indispensable parties is necessary to vest the court with jurisdiction, which is the authority to hear and determine a cause, the right to act in a case.[25]We stress that the absence of indispensable parties renders all subsequent actuations of the court null and void, because of that courts want of authority to act, not only as to the absent parties but even as to those present.It is argued that petitioner cannot possibly be an indispensable party, since the mortgage may not even be valid because of the possible absence of compliance with the requirement[26]that the mortgagor be the absolute owner of the thing mortgaged.It should be emphasized, however, that at the time the mortgage was constituted, there was an existing TCT (No. V-41319), which named the mortgagors, the Acampado spouses, as the registered owners of the property.InSeno v. Mangubat[27]this Court held as follows:The well-known rule in this jurisdiction is that a person dealing with a registered land has a right to rely upon the face of the Torrens Certificate of Title and to dispense with the need of inquiring further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry.x x xx x xx x xThus, where innocent third persons relying on the correctness of the certificate of title issued, acquire rights over the property, the court cannot disregard such rights and order the total cancellation of the certificate for that would impair public confidence in the certificate of title; otherwise everyone dealing with property registered under the Torrens system would have to inquire in every instance as to whether the title ha[s] been regularly or irregularly issued by the court.Indeed this is contrary to the evident purpose of the law.The peremptory disregard of the annotations registered and entered in TCT No. V-41319 constituted a deprivation of private property without due process of law and was therefore unquestionably unjust and iniquitous.This, we cannot countenance.Clearly, it was the trial courts duty to order petitioners inclusion as a party to Civil Case No. 4930-V-96.This was not done.Neither the court nor private respondents bothered to implead petitioner as a party to the case.In the absence of petitioner, an indispensable party, the trial court had no authority to act on the case.Its judgment therein was null and void due to lack of jurisdiction over an indispensable party.InLeonor v. Court of Appeals[28]andArcelona v. Court of Appeals,[29]we held thus:A void judgment for want of jurisdiction is no judgment at all.It cannot be the source of any right nor the creator of any obligation.All acts performed pursuant to it and all claims emanating from it have no legal effect.Hence, it can never become final and any writ of execution based on it is void:x x x it may be said to be a lawless thing which can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head.WHEREFORE, the Petition isGRANTEDand the assailed Resolutions of the Court of Appeals areREVERSED.The Decision of the Regional Trial Court in Civil Case No. 4930-V-41319 is herebyNULLIFIEDandSET ASIDE.No costs.SO ORDERED.Melo, (Chairman), Vitug, Gonzaga-Reyes,andSandoval-Gutierrez, JJ.,concur.

[13]This case was deemed submitted for resolution on January 25, 2001, upon receipt by this Court of respondents 3-page Memorandum, which was signed by Atty. Melencio A. Cea.Petitioners Memorandum, signed by Atty. Renato B. Corpuz Jr. of Santiago Corpuz & Ejercito, was filed earlier on December 29, 2000.

THIRD DIVISION[G.R. No.139306.August 29, 2000]MARIA MERCEDES NERY, BENJAMIN NERY, MARIA PAZ NERY, APOLINAR NERY and ROBERTO FRANCISCO NERY -- all represented by LICINIUS ABADIANO and LOURDES DEL RIO ESPIRITU,petitioners, vs.GABRIEL LEYSON, JOSEFINA LEYSON POBLETE, FE LEYSON, ESPERANZA LEYSON, CARIDAD LEYSON, ESTATES OF DECEASED Spouses JOSE LEYSON and LOURDES VELEZ,respondents.D E C I S I O NPANGANIBAN,J.:The Court of Appeals has exclusive jurisdiction over actions for annulment of trial court decisions.Hence, a regional trial court has no authority to annul the final judgment of a co-equal court.The CaseBefore us is a Petition for Review onCertiorariof the Decision[1]dated February 10, 1999 and the Resolution[2]dated June 30, 1999, issued by the Court of Appeals (CA) in CA-GR CV No. 43655 affirming the dismissal of the Complaint, instituted by the petitioners against the respondents, for the declaration of nullity of the subject certificate of title and judicial proceedings, with damages.The assailed Decision disposed as follows:[3]WHEREFORE, premises considered, the Decision dated February 10, 1993 is herebyAFFIRMEDin toto.Costs against the plaintiffs-appellants.The assailed Resolution denied reconsideration.The FactsThe facts of this case are summarized by the CA, as follows:[4]The [Petitioners] Maria Mercedes, Benjamin, Maria Paz, Apolinar and Roberto Francisco, all surnamed Nery[,] claim that they xxx are the children of xxx Mercedes del Rio, who died during World War II.They are also heirs of their maternal grandmother Agatona del Corro, who as a widow, died in 1976.When Mercedes del Rio died, she left a share in the parcel of land in Lapu-Lapu City covered by O.C.T. No. RO-0083 in the name of Agatona del Corro, et al.The land is being managed by [petitioners] uncle Eduardo del Rio and Lourdes del Rio Espiritu.After the death of Mercedes del Rio, her heirs executed an Extrajudicial Partition and Declaration of Heirs dated January 28, 1964 covering the share of Mercedes del Rio in the land in question.The death of Mercedes del Rio was duly annotated on O.C.T. No. RO-0083 (Exh. A-1) on February 27, 1964.On December 2, 1964, a Notice of Lis Pendens (Re-Civil Case No. R-8646 C.F.I. of Cebu) was executed and annotated on the title by Atty. Regino Hermosisima representing Lourdes Leyson, et al.It appears that the Leysons had filed a case for annulment and cancellation of O.C.T. No. RO-0083.The [petitioners] claim that they were not made parties to said case and that although their mother Mercedes del Rio was impleaded as defendant, she was already dead when Civil Case No. [R-]8646 was filed in 1964.They maintain that the decision in Civil Case No. [R-]8646 does not bind them for they [were] not parties thereto, hence, the same [was] null and void.They therefore filed this case [docketed as Civil Case No. 2379-L] seeking the declaration of nullity of T.C.T. No. 119747 in the name of the Leysons and of the judicial proceedings in Civil Case No. [R-]8646.[Respondents] evidence, on the other hand, show that the land in dispute, Lot No. 73 of Cadastral Survey of Opon (now Lapu-Lapu City) is titled in their names under T.C.T. No. 19747 which was derived from O.C.T. No. 15615.Appearing in the said title is the name of their father Jose S. Leyson who acquired the land through purchase from Rosario Miranda.They were in possession of the property until 1963 when Agatona del Corro and her children took over the possession of the same.Lot No. 73 of the Cadastral Survey of Opon (now Lapu-Lapu City) covered by T.C.T. No. 19747 became the subject of litigation in Civil Case No. R-8646 entitled Lourdes Velez Leyson, Josefina Leyson Poblete, Fe Leyson, Esperanza Leyson, Caridad Leyson and Gabriel Leyson versus Agatona del Corro, Antolin del Rio, Consuelo del Rio, Mercedes del Rio, Socorro del Rio, Lourdes del Rio and Eduardo del Rio.The case was filed on December 2, 1964 before the then Court of First Instance of Cebu, Branch V.The trial court in Civil Case No. [R-]8646 rendered a Decision on May 2, 1968 in favor of plaintiffs Lourdes V. Leyson, et al., and against therein defendants Agatona del Corro, et al.The dispositive portion of said decision reads as follows:IN VIEW OF THE FOREGOING findings, the Court hereby renders judgment in favor of the plaintiffs and against the defendants:(1)Setting aside the order of this Court dated September 23, 1963 reconstituting the Original Certificate of Title for Lot No. 73 of the Opon Cadastre;(2)Declaring the reconstituted Original Certificate of Title No. RO-0083 covering Lot No. 73 in the name of the defendants as cancelled, null and void, and, without legal force and effect; and, ordering, therefore, the defendants to turn over the possession of the lot in question to the plaintiffs who have the right to possess it;(3)Declaring the plaintiffs Transfer Certificate of Title No. 19747 for Lot No. 73 valid and with legal force and effect;(4)Declaring the herein plaintiffs to be the real and absolute owners of Lot No. 73;(5)Ordering the defendants to pay jointly and severally to the plaintiffs the sum ofP4,800.00 as actual damages;(6)To pay P2,000.00 representing attorneys fees and to pay the costs of the suit.SO ORDERED.Defendants Agatona, et al. appealed the aforesaid decision to the Court of Appeals where it was docketed as CA-G.R. No. 45878-R.In its Decision promulgated on March 15, 1976, the appellate court affirmed in all respects the decision appealed from (Exh. 2 and 2-A).For failure of the defendants Agatona del Corro, et al. to appeal the decision of the Court of Appeals, the same xxx [became] final and executory on April 10, 1976 as shown by the Entry of Judgment (Exh. 3 and 3-A).Subsequent to the finality of the appellate courts decision in Civil Case No. R-8646 on April 10, 1976, there were efforts on the part of the Leysons to execute the decision in Civil Case No. R-8646 but for one reason or another, the same did not materialize as testified to by one of the [respondents] in the present case, Caridad V. Leyson.x x x.On January 16, 1991, the petitioners instituted against the respondents an action for the declaration of nullity of TCT No. 19747 and the judicial proceedings in Civil Case No. R-8646.The Regional Trial Court of Lapu-Lapu City, Branch 27,[5]rendered a Decision[6]dated February 10, 1993, in favor of the respondents.It disposed as follows:[7]WHEREFORE, premises considered, judgment is hereby rendered in favor of the [herein respondents] and against the [herein petitioners], dismissing the case with cost against the [petitioners].As earlier stated, the CA denied the petitioners appeal.Ruling of the Court of AppealsThe CA ruled that petitioners action for annulment of title and judicial proceedings was not barred byres judicata, which was inapplicable, but by the principle of conclusiveness of judgment under Rule 39, Section 49, par. (c) of the Rules of Court.The issue of which between the two reconstituted titles was valid and genuine was settled by the CA in the earlier case docketed as CA-GR No. 45678-R, which ruled:Insofar as the two titles existing over the same parcel of land are concerned, [w]e agree with the lower court that TCT No. 19747 should prevail, and that the reconstituted OCT No. RO-0083 should be cancelled.Upon the facts set forth above, it is evident that OCT No. 15615 and TCT No. 8834, both in the names of the defendants, have been cancelled.Said title[s], or either of them, therefore, may no longer be validly reconstituted.The provisions of Republic Act No. 26 are applicable and their mandate must be obeyed.According to said law, reconstitution of the lost or destroyed title may be ordered by the court only if, after hearing, it finds, among others, that the documents represented as supported by parole evidence or otherwise, are sufficient and proper to warrant the reconstitution, and that the petitioner is the registered owner of the property or has an interest therein, and that said certificate of title was in force at the time it was lost or destroyed (Section 15).As plaintiffs title had already cancelled the title relied upon by the defendants in their petition for reconstitution, it follows that the reconstitution of the latter was null and void and, therefore, the court a quo was correct in ordering its cancellation.The petitioners action for annulment was filed fifteen years after the above-mentioned judgment had become final on April 10, 1976.The long period of time that had lapsed precluded them from further prosecuting the same issue.Finally, a regional trial court has no jurisdiction to annul the judgment of a co-equal court; jurisdiction in such cases lies in the Court of Appeals.Hence, this Petition.[8]Issues

Insisting that they were deprived of their day in court, petitioners, in their Memorandum, raise the following issues:[9]1.Whether or not the Court of Appeals erred in ruling that the petitioners cause of action was barred by the principle of conclusiveness of judgment under Rule 39, Section 49, Paragraph (c) of the Rules of Court.2.Whether or not the Court of Appeals erred in ruling that the decision in Civil Case No. R-8646, as affirmed by the Court of Appeals in CA-GR No. 45678-R, [became] final and executory against herein petitioners.

This Courts Ruling

The Court, after due deliberation, resolves to deny the Petition.

First Issue:Conclusiveness of Judgment

Petitioners challenge the application to this case of the principle of conclusiveness of judgment, arguing that jurisdiction over them was never acquired by the trial court.Barring their action would be tantamount to deprivation of property without due process of law, they argue.Respondents, on the other hand, insist that the trial court in Civil Case No. R-8646 acquired jurisdiction over the persons of the defendants therein including the petitioners because (1) it was the duty of the attorney for the deceased Mercedes del Rio to inform the court of the clients death, and (2) the attorney represented the same interest as the other defendants -- their grandmother, uncles and aunts.Respondents add that petitioners failure to raise this defense in the Answer and Amended Answer constituted a waiver of this defense; hence, the latter are estopped from raising it now.Rule 39, Section 49 of the Rules of Court, which the CA cited as the basis for the assailed Decision, provides:SEC. 49.Effect of judgments.The effect of a judgment or final order rendered by a court or judge of the Philippines, having jurisdiction to pronounce the judgment or order, may be as follows:(a)In case of a judgment or order against a specific thing, or in respect to the probate of a will, or the administration of the estate of a deceased person, or in respect to the personal, political, or legal condition or status of a particular person or his relationship to another, the judgment or order is conclusive upon the title to the thing, the will or administration, or the condition, status or relationship of the person; however, the probate of a will or granting of letters of administration shall only be prima facie evidence of the death of the testator or intestate;(b)In other cases, the judgment or order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity;(c)In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.[10]To bar the petitioners action for annulment on the ground ofres judicata, the following elements should be present:(1) the judgment being sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be based on a judgment or an order on the merits; and (4) there must be identity of parties, subject matter and causes of action.[11]There is clearly no identity of parties between Civil Case R-8646 and 2379-L.[12]The petitioners were indispensable parties in Civil Case R-8646, as they were the legal heirs of Mercedes del Rio, who was one of the registered owners in OCT RO-0083/15615 which covered the disputed land.Furthermore, she has been dead since 1942 oryears before Civil Case R-8646 was filed in 1964.The joinder of indispensable parties or parties in interest, without whom there can be no final determination of an action is compulsory under Rule 3, Section 7 of the Rules of Court.[13]However, petitioners were never served summons; neither did they join their relatives in filing the Answer and Amended Answer.Nor were they given a chance to set up their own defenses against the respondents claim of ownership over the disputed lot.Plainly then, the trial court did not acquire jurisdiction over them.Respondents, on the other hand, contend that the trial court acquired jurisdiction over the petitioners when they failed to notify the lower court of the death of Mercedes del Rio during the trial of Civil Case R-8646.We disagree.Under Section 16, Rule 3 of the Rules of Court, only in a pending case is the counsel of a party required to inform the court in case the client dies or becomes incapacitated or incompetent.A pending case necessarily implies that the court has already acquired jurisdiction over the person of the party who died or became incapacitated or incompetent.Prior to this development, the trial court cannot impose such requirement on the counsel for the defendants; Section 16 of Rule 3 thus finds no application to this case.On the other hand, it is the duty of the plaintiff to implead all the necessary or indispensable parties for the complete determination of the action.OCT RO-0083/15615 reveals that Mercedes del Rio was a registered co-owner of the disputed lot, but she was not placed under the jurisdiction of the trial court in Civil Case No. R-8646.Neither were her heirs.Respondents also posit that the service of summons on the petitioners could be dispensed with, since there is substantial identity between the mother and the siblings of Mercedes del Rio, on the one hand, and the petitioners on the other.The reason for this substantial identity is that the petitioners represent the same interest as the other defendants in Civil Case R-8646.Again, we disagree.True,res judicatais not defeated by a minor difference of parties, as it does not require absolute but only substantial identity of parties.[14]But there is substantial identity only when the additional party acts in the same capacity or is in privity with the parties in the former action.[15]This is not so in the present case.Co-owners are not partiesinter sein relation to the property owned in common.[16]A subsequent action by a co-heir, who did not join the earlier dismissed action for recovery of property, should not be barred by prior judgment.[17]Neither will conclusiveness of judgment apply because there was no identity of parties.In view of the foregoing discussion, petitioners should not be bound by the decision in Civil Case No. R-8646.This, however, does not justify the reversal of the assailed Decision.As will now be explained, the petitioners action suffers from a fatal defect which prevents their action for annulment from prospering.

Second Issue:Annulment of Judgment

The reason why the herein Petition cannot be granted is the trial courts lack of jurisdiction to annul a final judgment of a co-equal court.Petitioners allege that the decision in Civil Case R-8646 passed upon the validity of OCT RO-0083/15615.Such allegation makes the root of their present action one for annulment of a final judgment.This Court cannot ignore the fact that such action is outside the jurisdiction of the RTC.On this point, the CA ruled, albeit in passing, that xxx the courta quodoes not have the jurisdiction to annul the judgment of a regional trial court as jurisdiction thereon is lodged with the Court of Appeals.[18]We sustain the Court of Appeals on this point.Section 9 of BP 129,[19]as amended, vests in the CA [e]xclusive jurisdiction over actions for annulment of judgments of regional trial courts xxx.[20]Hence, even if the trial court in Civil Case No. R-8646 did not acquire jurisdiction over the petitioners, the trial court in Civil Case No. 2379-L cannot annul the final judgment in Civil Case No. R-8646, as jurisdiction over the subject matter, which in this case is annulment of final judgment, is vested by law in a higher court, the CA.[21]WHEREFORE, the Petition isDENIEDand, for the reasons above-stated, the assailed Decision and Resolution areAFFIRMED.Costs against the petitioners.SO ORDERED.Melo, (Chairman), Vitug, Purisima,andGonzaga-Reyes, JJ.,concur.

THIRD DIVISIONELPIDIO S. UY,doing business under the name and style EDISON DEVELOPMENT & CONSTRUCTION,Petitioner,G.R. No. 157065Present:

- versus -QUISUMBING,J., Chairperson,CARPIO,CARPIO MORALES,TINGA, andVELASCO, JR.,JJ.

HONORABLE COURT OF APPEALSand the HERITAGE PARK MANAGEMENT CORPORATION (HPMC),Respondents.Promulgated:July 11, 2006

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xDECISIONQUISUMBING,J.:This is a Petition for Review seeking to reverse and set aside the Decision[1]datedJanuary 31, 2003of the Court of Appeals in CA-G.R. SP. No. 69771.TheHeritageMemorial Parkis a flagship project of the Bases Conversion Development Authority (BCDA) inFortBonifacio. To implement the project, the BCDA, onSeptember 9, 1994, entered into an agreement denominated as the Pool Formation Trust Agreement[2](PFTA) with the Philippine National Bank (PNB) and the Public Estates Authority (PEA).The BCDA was designated as the Project Owner; PEA, the Project Manager; and PNB as the Trustee.As project owner, the BCDA was tasked to sell the Heritage Park Investment Certificates to the public and buyers become certificate holders.The certificate gives the PNB the absolute legal and beneficial title toHeritageParkin trust for the certificate holders.The PNB, as trustee, shall protect the values of the assets in the trust, receive and have custody over the proceeds from the sale of the certificates, administer the various funds, including disbursements for project costs and related expenses, turnover the Perpetual Care Fund to the Successor Trustee, turnover custody over documents pertaining to the Heritage Park and the residual funds to BCDA, and turnover all the documents and records to the Board of Trustees after completion of the project.[3]PEA, as project manager, is tasked to implement and complete the various engineering works and improvements ofHeritagePark.On November 20, 1996, PEA and the petitioner, a single proprietorship doing business under the name and style of Edison Development and Construction, executed a Landscaping and Construction Agreement whereby the petitioner undertook to do all the landscaping, including the construction of aterrasoleumof the Heritage Park.The Heritage Park Executive Committee[4]approved the agreement onMay 29, 1997.[5]Pursuant to Section 11.01[6]of the PFTA, in April 1999, the certificate holders of the project organized themselves into a non-stock, non-profit corporation, the Heritage