G.R. No. L-28646 November 29, 1971
ESTEBAN JOSE, plaintiff-appellee, vs. CARMEN BLUE, ET AL., defendants, CATALINA CAYETANO, oppositor-appellant.

FACTS

Cipriano Jose died, survived by his widow Carmen Blue and his son from a first marriage, Esteban Jose. Carmen Blue fraudulently adjudicated to herself two parcels of land constituting Cipriano’s estate and sold them: one lot to Julita Luis and another to the spouses Pardo. Esteban Jose filed a suit to annul these transactions. A compromise agreement was eventually approved by the court, recognizing Esteban’s rightful share. Pertinently, the agreement declared the sale to Julita Luis void, ordered the lot reconveyed to the estate, and adjudicated it to be owned equally by Esteban Jose and Julita Luis, with Esteban having a monetary claim against Julita. Unbeknownst to the parties finalizing this compromise, Julita Luis had already sold the entire lot to Benjamin Agraviador, who then mortgaged it. The mortgage was foreclosed, and appellant Catalina Cayetano purchased the lot at the ensuing public auction.

ISSUE

The core issue is whether Catalina Cayetano, as an auction purchaser of the foreclosed mortgage, acquired a valid title to the entire lot, or only to the share that her predecessor-in-interest, Benjamin Agraviador, validly held.

RULING

The Supreme Court ruled that Catalina Cayetano acquired title only to an undivided one-half share of the lot. The legal logic proceeds from the principle that a person can only convey what he rightfully owns. The compromise judgment, which became final and executory, established that Julita Luis’s original purchase from Carmen Blue was void. Consequently, Julita never acquired valid title from Carmen Blue. However, the same compromise judgment created a new, direct adjudication, granting Julita Luis ownership of an undivided one-half share of the lot. Therefore, at the time Julita sold the property to Benjamin Agraviador, she only owned a one-half interest. She could only validly convey that one-half share to Agraviador. When Agraviador mortgaged the “entire” lot, the mortgage could only be validly constituted on his one-half interest. Upon foreclosure, the auction sale could only transfer the interest that was validly mortgaged. Thus, appellant Cayetano acquired only a one-half undivided share. The other one-half share rightfully belongs to appellee Esteban Jose as adjudged by the compromise agreement. The order was modified to direct the issuance of a new title in the names of Esteban Jose and Catalina Cayetano, share and share alike.