G.R. No. 165427; March 21, 2011
BETTY B. LACBAYAN, Petitioner, vs. BAYANI S. SAMOY, JR., Respondent.

FACTS

Petitioner Betty B. Lacbayan and respondent Bayani S. Samoy, Jr., who was legally married to another, began an illicit relationship in 1978, resulting in the birth of a son in 1979. During their relationship, they, along with three other incorporators, established a manpower services company. Five parcels of land in Quezon City were acquired and registered in both their names, ostensibly as husband and wife. The titles variously indicated “Bayani S. Samoy, Jr. married to Betty Lacbayan,” “Spouses Bayani S. Samoy and Betty Lacbayan,” or similar formulations. Petitioner lived in several of these properties over the years. Their relationship ended in 1991. In 1998, they attempted to execute a Partition Agreement to divide the properties and terminate their business partnership, but negotiations broke down when petitioner made additional demands. Consequently, petitioner filed a complaint for judicial partition before the Regional Trial Court (RTC) of Quezon City on May 31, 1999.
In her complaint, petitioner claimed she and respondent lived together as husband and wife and were business partners who jointly acquired the properties. Respondent, in his Answer, denied cohabitation and asserted that the properties were purchased exclusively with his personal funds, without any contribution from petitioner. He testified that the properties were registered jointly with petitioner to exclude them from the property regime with his legal wife (who was a heavy gambler) and for investment purposes. Petitioner admitted during trial that although they spent much time together, respondent would return to his legal wife, and she claimed the properties were acquired from the income of their company, in which she owned only a 3.33% share.
The RTC dismissed the complaint for lack of merit, giving weight to petitioner’s admission that the properties were acquired from company income, not her personal funds, and noting her minimal ownership share in the company. The Court of Appeals affirmed the RTC decision. Petitioner elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

1. Whether an action for partition precludes a settlement on the issue of ownership.
2. Whether the Torrens title over the disputed properties was collaterally attacked in the action for partition.
3. Whether respondent is estopped from repudiating co-ownership over the subject realties.

RULING

The Supreme Court denied the petition, affirming the decisions of the lower courts.
1. On the issue of ownership in a partition case: The Court ruled that an action for partition necessarily requires the court to first determine the existence of co-ownership. The court must initially settle the issue of ownership because it cannot order the division of property without first making a determination as to the existence of co-ownership. Until the issue of ownership is resolved, partition would be premature. The first phase of a partition suit involves determining whether co-ownership exists. Therefore, the lower courts correctly addressed the ownership issue.
2. On the alleged collateral attack on Torrens titles: The Court held that the rule on the indefeasibility of a Torrens title applies only to original registration, not subsequent registration as in this case. The lower courts did not invalidate the certificates of title; they determined the ownership of the properties, which is a correlative and necessary issue in a claim of co-ownership underpinning an action for partition. The inapplicability of the principle is further underscored by the admitted falsity of the registration of the properties in the parties’ names as husband and wife.
3. On estoppel from repudiating co-ownership: The Court found no merit in petitioner’s argument that respondent was estopped from denying co-ownership. The evidence, including petitioner’s own admissions, showed that the properties were acquired primarily from respondent’s personal funds and the company’s income, with petitioner having only a minimal share in the company. The registration of the properties in both names did not, by itself, establish co-ownership where the facts demonstrated that petitioner did not contribute to their acquisition. The Partition Agreement, which respondent refused to sign after petitioner added new demands, did not constitute a judicial admission of co-ownership.
The Court also declined to revisit the factual findings of the lower courts regarding the source of funds for the properties, as these are questions of fact generally beyond the scope of a Rule 45 petition. The petition was bereft of merit.