PEDROSA v COURT OF APPEALS

G.R. No. 118680; March 5, 2001; QUISUMBING, J.:

FACTS: In 1946, the spouses Miguel Rodriguez and Rosalina J. de Rodriguez initiated proceedings before the CFI of Ozamiz City for
the legal adoption of herein petitioner, Maria Elena Rodriguez Pedrosa. The CFI granted the petition and declared petitioner Pedrosa
the adopted child of Miguel and Rosalina. In 1972, Miguel died intestate. Thereafter, petitioner and Rosalina entered into an
extrajudicial settlement of Miguel's estate, adjudicating between themselves in equal proportion the estate of Miguel. Private
respondents filed an action to annul the adoption of petitioner before the CFI of Ozamiz City, with petitioner and herein respondent
Rosalina as defendants . The CFI denied the petition and upheld the validity of the adoption. Thereafter, private respondents
appealed said decision to the CA. In 1983, while said appeal was pending, the Rodriguezes entered into an extrajudicial settlement
with respondent Rosalina for the partition of the estate of Miguel and of another sister, Pilar. Rosalina acted as the representative of
the heirs of Miguel Rodriguez. Pilar had no heirs except his brothers and sisters. The Deed of Extrajudicial Settlement and Partition
covered fourteen parcels of land. These properties were divided among Jose, Carmen, Mercedes, Ramon and the heirs of Miguel,
represented solely by Rosalina.
Armed with the Deed of Extrajudicial Settlement and Partition, respondents Rodriguezes were able to secure new TCTs and
were able to transfer some parcels to the other respondents herein. The parties in the appeal which sought to annul the adoption of
petitioner Pedrosa filed a joint Motion to Dismiss but it was dismissed and the validity of the adoption of petitioner was upheld.
Thereafter, petitioner sent her daughter, Loreto Jocelyn, to claim their share of the properties from the Rodriguezes. The latter
refused saying that Maria Elena and Loreto were not heirs since they were not their blood relatives. Petitioner, then, filed a complaint
in 1987 to annul the 1983 partition but it was dismissed. Petitioner appealed to the CA but it affirmed the decision of the trial court.
Its ruling was premised on the following grounds: 1) that the participation of Rosalina has already estopped her from questioning the
validity of the partition, and since she is already estopped, it naturally follows that Maria Elena, her successor-in-interest, is likewise
estopped, applying Article 1439 of the Civil Code; 2) that the appeal of Maria Elena and her claim that the partition is null and void is
weakened by her inconsistent claim that the partition would have been alright had she been given a more equitable share; 3) the
action is essentially an action for rescission and had been filed late considering that it was filed beyond the 4 year period provided for
in Article 1100 of the Civil Code; 4) that fraud and/or bad faith was never established.
Hence, the petition. Petitioner argues that the complaint for annulment of the extrajudicial partition has not yet prescribed
since the prescriptive period which should be applied is four years following the case of Beltran vs. Ayson, 4 SCRA 69 (1962). She
also avers that Sec. 4, Rule 74 which provides for a two-year prescriptive period needs two requirements. One, the party assailing
the partition must have been given notice, and two, the party assailing the partition must have participated therein. Petitioner insists
these requirements are not present in her case, since she did not participate in the "Deed of Extrajudicial Settlement and Partition."
She cites Villaluz vs. Neme, 7 SCRA 27, 30 (1963), where we held that a deed of extrajudicial partition executed without including
some of the heirs, who had no knowledge and consent to the same, is fraudulent. She asserts that she is an adoptive daughter and
thus an heir of Miguel. Petitioner also contends that the respondent buyers were buyers in bad faith since they failed to exercise the
necessary due diligence required before purchasing the lots in question. In the alternative, petitioner wants to redeem the said lots
as a co-owner of respondent Rodriguezes under the provisions of Article 1620 of the New Civil Code. Lastly, petitioner asserts that
she will suffer lesion if the partition would be allowed. She asks for the rescission of the said partitioning under Articles 165-175 of
the Civil Code. Respondents, in response, claim that the action of petitioner had already prescribed. In addition, they argue that
petitioner, Maria Elena, and Rosalina already have their shares in the estate of Miguel Rodriguez reflected in the compromise
agreement they entered into with the respondent Rodriguezes. Finally, respondents aver that the non-participation of Maria Elena in
the extrajudicial partition was understandable since her status as an adopted child was then under litigation. In any case, they assert
that the shares of Miguel's heirs were adequately protected in the said partition.
ISSUE: WON the complaint for annulment of the "Deed of Extrajudicial Settlement and Partition" had already
prescribed.
RULING: The Court ruled in the negative.
Section 4, Rule 74 provides for a two year prescriptive period (1) to persons who have participated or taken part or had
notice of the extrajudicial partition, and in addition (2) when the provisions of Section 1 of Rule 74 have been strictly complied
with, i.e., that all the persons or heirs of the decedent have taken part in the extrajudicial settlement or are represented by
themselves or through guardians. Petitioner, as the records confirm, did not participate in the extrajudicial partition. Patently then,
the two-year prescriptive period is not applicable in her case. The applicable prescriptive period here is four (4) years as
provided in Gerona vs. De Guzman, 11 SCRA 153 (1964), which held that: “The action to annul] a deed of "extrajudicial settlement"
upon the ground of fraud...may be filed within four years from the discovery of the fraud. Such discovery is deemed to have taken
place when said instrument was filed with the Register of Deeds and new certificates of title were issued in the name of respondents
exclusively.” Considering that the complaint of the petitioner was filed on January 28, 1987, or three years and ten months after the
questioned extrajudicial settlement dated March 11, 1983, was executed, we hold that her action against the respondents on the
basis of fraud has not yet prescribed. Section 1 of Rule 74 of the Rules of Court is the applicable rule on publication of extrajudicial
settlement. It states: “The fact of the extrajudicial settlement or administration shall be published in a newspaper of general
circulation in the manner provided in the next succeeding section; but no extrajudicial settlement shall be binding upon any person
who has not participated therein or had no notice thereof.”
Under said provision, without the participation of all persons involved in the proceedings, the extrajudicial settlement cannot
be binding on said persons. The rule contemplates a notice which must be sent out or issued before the Deed of Settlement and/or
Partition is agreed upon, i.e., a notice calling all interested parties to participate in the said deed of extrajudicial settlement and
partition, not after, which was when publication was done in the instant case. Following Rule 74 and the ruling in Beltran vs. Ayson,
since Maria Elena did not participate in the said partition, the settlement is not binding on her. The provision of Section 4, Rule 74
will also not apply when the deed of extrajudicial partition is sought to be annulled on the ground of fraud. A deed of extrajudicial
partition executed without including some of the heirs, who had no knowledge of and consent to the same, is fraudulent and
vicious. Maria Elena is an heir of Miguel together with her adopting mother, Rosalina. Being the lone descendant of Miguel, she
excludes the collateral relatives of Miguel from participating in his estate, following the provisions of Article 1003 of the Civil
Code. The private respondent Rodriguezes cannot claim that they were not aware of Maria Elena's adoption since they even filed an
action to annul the decree of adoption. Neither can they claim that their actions were valid since the adoption of Maria Elena was still
being questioned at the time they executed the deed of partition. The complaint seeking to annul the adoption was filed only twenty
six (26) years after the decree of adoption, patently a much delayed response to prevent Maria Elena from inheriting from her
adoptive parents. The decree of adoption was valid and existing. With this factual setting, it is patent that private respondents
executed the deed of partition in bad faith with intent to defraud Maria Elena. In the case of Segura vs. Segura, the Court held:
This section [referring to section 4, Rule 74] provides in gist that a person who has been deprived of his lawful participation
in the estate of the decedent, whether as heir or as creditor, must assert his claim within two years after the extrajudicial or
summary settlement of such estate under Sections 1 and 2 respectively of the same Rule 74. Thereafter, he will be
precluded from doing so as the right will have prescribed.
It is clear that Section 1 of Rule 74 does not apply to the partition in question which was null and void as far as the plaintiffs
were concerned. The rule covers only valid partitions. The partition in the present case was invalid because it excluded six
of the nine heirs who were entitled to equal shares in the partitioned property. Under the rule, "no extrajudicial settlement
shall be binding upon any person who has not participated therein or had no notice thereof." As the partition was a total
nullity and did not affect the excluded heirs, it was not correct for the trial court to hold that their right to challenge the
partition had prescribed after two years from its execution in 1941.25
To say that Maria Elena was represented by Rosalina in the partitioning is imprecise. Maria Elena, the adopted child, was no longer a
minor at the time Miguel died. Rosalina, only represented her own interests and not those of Maria Elena. Since Miguel predeceased
Pilar, a sister, his estate automatically vested to his child and widow, in equal shares. Respondent Rodriguezes' interests did not
include Miguel's estate but only Pilar's estate.

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Could petitioner still redeem the properties from buyers? Given the circumstances in this case, we are constrained to hold that this is
not the proper forum to decide this issue. The properties sought to be recovered by the petitioner are now all registered under the
name of third parties. Well settled is the doctrine that a Torrens Title cannot be collaterally attacked. The validity of the title can only
be raised in an action expressly instituted for such purpose.

The petition was granted.