G.R. No. L-55201 February 3, 1994
MARIANO T. LIM, JAIME T. LIM, JOSE T. LIM, JOVITA T. LIM, ANACORITA T. LIM, ANTONIETTA T. LIM, RUBEN T. LIM, BENJAMIN T. LIM, ET AL., petitioners, vs. COURT OF APPEALS, LORENZO O. TAN and HERMOGENES O. TAN, respondents.

FACTS

The case involves the partition of the properties of the deceased spouses Tan Quico and Josefa Oraa, who died intestate in 1932, leaving approximately 96 hectares of land in Albay. They were survived by their children: Cresencia, Lorenzo, Hermogenes, and Elias (who died without issue). Cresencia died in 1967, survived by her husband, Lim Chay Sing, and her children (the petitioners). The petitioners, heirs of Cresencia, demanded partition of the estate from respondent Lorenzo, who had been administering the properties. Lorenzo and Hermogenes resisted partition, contending that (1) the properties had already been orally partitioned, and (2) Cresencia had sold and conveyed all her interests to Lorenzo during her lifetime, as evidenced by a “Deed of Confirmation of Extra Judicial Settlement of the Estate of Tan Quico and Josefa Oraa” and a receipt of payment. The trial court ruled in favor of the petitioners, voiding the Deed on the ground that Cresencia, who was illiterate (reaching only second grade and unable to read or write English), did not understand it when she signed. The Court of Appeals, by a 4-1 vote, reversed the trial court, finding evidence of prior oral partition and no undue influence in the execution of the Deed.

ISSUE

The primary issues are: (1) Whether the subject properties had already been partitioned among the heirs; and (2) Whether the “Deed of Confirmation of Extra Judicial Settlement of the Estate of Tan Quico and Josefa Oraa” is valid, specifically whether its terms were fully explained to the illiterate Cresencia as required by law and whether it was procured through undue influence, fraud, or mistake.

RULING

The Supreme Court granted the petition, reversing the Court of Appeals and reinstating the trial court’s decision.
1. On the issue of prior oral partition: The Court found no credible evidence that the properties had been partitioned. Respondent Hermogenes himself testified, “We did not have exactly a partition in 1930.” Documentary evidence, including a receipt referring to Cresencia’s “pro-indiviso share” and tax declarations still in the names of the deceased parents, supported the conclusion that no partition had taken place. The title of the “Deed of Confirmation” also omitted any reference to a prior partition.
2. On the validity of the Deed: The Court held the Deed invalid. Applying Article 1332 of the Civil Code, which requires that when a party is unable to read or the contract is in a language not understood by them, the person enforcing the contract must show that its terms were fully explained, the Court found that respondents failed to discharge this burden. Cresencia was illiterate and did not understand English, the language of the Deed, which was prepared by her brother Lorenzo, a lawyer and CPA. The evidence that Lorenzo and Hermogenes explained the Deed to her in Bicolano was insufficient to meet the mandatory requirement of Article 1332. Given the circumstances of trust and confidence, and the failure to prove a full explanation, the Deed was declared null and void. The Court ordered the partition of the properties among the heirs, with one-third each to Hermogenes, Lorenzo, and the petitioners (representing Cresencia’s share), and required Lorenzo to render an accounting of the fruits and income from the properties.