G.R. No. 160711 ; August 14, 2004
HEIRS OF MAXIMO LABANON, represented by ALICIA LABANON CAÑEDO and the PROVINCIAL ASSESSOR OF COTABATO, Petitioners, vs. HEIRS OF CONSTANCIO LABANON, represented by ALBERTO MAKILANG, Respondents.

FACTS

Constancio Labanon settled on and cultivated a parcel of public agricultural land. Due to his limited education, he asked his brother, Maximo Labanon, to file the homestead application under an express agreement that the land would be divided between them. Maximo’s application was approved, and Original Certificate of Title No. P-14320 was issued in his name. To honor their agreement, Maximo executed a notarized “Assignment of Rights and Ownership” on February 11, 1955, conveying a specified eastern portion of the lot to Constancio, his heirs and assigns. Maximo later executed a sworn statement on April 25, 1962, reiterating this intent and requesting the issuance of separate titles.
After Constancio’s death, his heirs sold the eastern portion to Alberto Makilang, who declared it for taxation. In 1991, the heirs of Maximo caused the cancellation of this tax declaration. The heirs of Constancio, through Makilang, demanded the surrender of the owner’s copy of the title to effect the transfer but were refused. This led to the filing of a complaint for specific performance and recovery of ownership.

ISSUE

Whether the heirs of Constancio Labanon have a rightful claim to the eastern portion of the land based on the 1955 Assignment executed by Maximo Labanon.

RULING

Yes. The Supreme Court affirmed the Court of Appeals’ decision recognizing the rights of Constancio’s heirs. The 1955 Assignment of Rights and Ownership was a valid and enforceable contract. Maximo, as the registered owner, had the capacity to bind the property. The document was a clear act of conveyance, not a mere promise to sell, transferring ownership rights over the specified portion to Constancio. The subsequent 1962 sworn statement reinforced this intent. The defense of unenforceability under the Statute of Frauds was unavailing as the agreement, having been partially executed through Constancio’s long-term possession and the execution of the notarized deed, was taken out of its scope.
Furthermore, petitioners, as heirs of Maximo, are bound by the contractual obligations of their predecessor-in-interest under Article 1311 of the Civil Code. They were subrogated to his rights and obligations and cannot repudiate the valid commitment he made. Consequently, the Court ordered the segregation and subdivision of the titled lot in accordance with the 1955 Assignment and the issuance of separate titles to the heirs of Maximo and Constancio, respectively.