G.R. No. 229775 . March 11, 2019
LILIBETH ESPINAS-LANUZA, ONEL ESPINAS, AS HEIRS OF LEOPOLDO ESPINAS, AND THE MUNICIPAL ASSESSOR OF DARAGA, ALBAY, PETITIONERS, VS. FELIX LUNA, JR., ARMANDO VELASCO AND ANTONIO VELASCO, AS HEIRS OF SIMON VELASCO, RESPONDENTS.

FACTS

Simon Velasco died intestate, leaving four children: Heriberto, Genoviva, Felisa, and Juan. The contested property, covered by OCT No. 20630, was part of his estate. In 1966, Felisa and Juan executed a Deed of Extrajudicial Settlement and Sale, adjudicating and selling the property to Leopoldo Espinas, Felisa’s son. The petitioners are Leopoldo’s heirs. The respondents, heirs of Heriberto and Genoviva, filed an action for annulment in 2010, alleging the deed was fraudulent as it excluded their predecessors who were still alive at its execution, thereby violating rules on extrajudicial settlement.
The petitioners defended that an oral partition of Simon’s estate had occurred long before 1966, whereby Genoviva and Heriberto received other specific properties, leaving the subject lot as the exclusive share of Felisa and Juan. They argued Felisa and Juan thus validly conveyed their already partitioned shares to Leopoldo. The Regional Trial Court and the Court of Appeals ruled for the respondents, declaring the deed void for excluding co-heirs and establishing a state of co-ownership among all heirs’ successors.

ISSUE

Whether the Deed of Extrajudicial Settlement and Sale executed in 1966 is valid, or whether it is void for excluding co-heirs, thereby rendering the property as held in co-ownership.

RULING

The Supreme Court GRANTED the petition, REVERSING the CA and RTC. The Court upheld the validity of the 1966 deed and recognized Leopoldo Espinas’s ownership, thereby dismissing the claim for co-ownership.
The legal logic centers on the validity of oral partition and the application of laches. First, the Court found that an oral partition among Simon’s children had indeed been consummated prior to 1966. Jurisprudence recognizes that a partition may be effected orally and proven by subsequent acts of the parties. Here, the heirs’ exclusive, continuous, and public possession of their respective allotted properties for decades constituted clear ratification of the oral agreement. Felisa and Juan, having received the subject property as their specific share, held full ownership rights over it. Consequently, their 1966 deed was not a settlement of an undivided estate but a sale of their already segregated property, requiring no participation from Heriberto and Genoviva.
Second, the Court ruled that the respondents’ action was barred by laches. The essential elements of laches were present: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation complained of; (2) delay in asserting the complainant’s rights; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right; and (4) injury or prejudice to the defendant if the relief is accorded. The respondents filed suit 44 years after the sale. Their predecessors, Heriberto and Genoviva, never questioned the possession or ownership during their lifetimes, despite Leopoldo’s open, continuous, and notorious possession since 1966. This prolonged inaction, coupled with the prejudice to the petitioners who relied on the settled state of ownership, precluded the respondents from now seeking to ann