G.R. No. 231721 & 231722, March 18, 2021
Jesus E. Ulay, Petitioner, vs. Maranguyod Bustamante, Respondent; and Jesus E. Ulay, Petitioner, vs. Salome Bustamante-Sarol, Heirs of Adelaida Bustamante-Pedroroja, namely: Mario Pedroroja, Geraldine P. Edera, Sheila P. Lubama and Heirs of Ramon Bustamante, represented by Maranguyod Bustamante, Respondents.

FACTS

Candido Bustamante and Candida Dela Cruz-Bustamante owned an unregistered 19-hectare parcel, Lot No. 1089. Their son, Eugenio Bustamante, inherited it. Upon Eugenio’s death, his widow Juana and their five children (Victoria, Gregoria, Salome, Ramon, and Adelaida, collectively the Bustamantes) partitioned the lot via a Deed of Extrajudicial Partition (DEP) dated November 15, 1977. The DEP allocated specific 1.9379-hectare portions to each heir. Juana was allotted Lot 1089-E, and Gregoria, Lot 1089-F. However, a subsequent subdivision plan dated December 7, 1979, erroneously interchanged their lot designations, listing Gregoria as owner of Lot 1089-E and Juana of Lot 1089-F. Despite this error in the plan and the subsequent issuance of Original Certificate of Title (OCT) No. P-17509 for Lot 1089-E in Gregoria’s name (1981), Juana and Gregoria physically possessed and cultivated the lots originally assigned to them in the DEP.
Upon Gregoria’s death, her eight children (the Gregoria Heirs) inherited her actual possession of Lot 1089-F. Juana, who cohabited with Arturo Remillano, had two children, Emelita and Felicitas Remillano (the Remillanos). After Juana’s death, on April 5, 1999, four of the Gregoria Heirs (Ernesto, Erlinda, Amelia, and Hilyn) and Emelita (purporting to represent all of Juana’s heirs) executed a Deed of Exchange to formalize the correction of the mistaken designations, exchanging the four heirs’ rights to the titled Lot 1089-E for the Remillanos’ rights to the physically possessed Lot 1089-F. Pursuant to this, on January 16, 2001, the same four Gregoria Heirs sold a 9,689-square meter portion of Lot 1089-F to petitioner Jesus Ulay.
On May 3, 2001, respondent Maranguyod Bustamante (widow of Ramon) entered and built on the portion Jesus Ulay purchased. Ulay filed a case for Recovery of Possession (Civil Case No. 26-2003). During its pendency, the Remillanos executed an Affidavit of Waiver (September 17, 2004) waiving their rights over Lot 1089-F in favor of Ulay and two other Gregoria Heirs (Dionisia and Roger), and Ulay obtained OCT No. P-41507 for his portion (December 23, 2004). The Bustamantes then filed an Annulment case (Civil Case No. 37-2005) against Ulay, the Gregoria Heirs, and the Remillanos, seeking annulment of the deeds, title, and reconveyance.
The Regional Trial Court (RTC) ruled in favor of the Bustamantes. It declared the Deed of Exchange and the Deed of Sale to Ulay null and void, dismissed the recovery case, ordered reimbursement to Ulay, declared Ulay’s title void, and ordered reconveyance. The Court of Appeals (CA) affirmed with modification, declaring the Deed of Exchange valid, the Affidavit of Waiver null and void, and adjusting the interest rate on the reimbursement.

ISSUE

The core issue is whether the Deed of Exchange dated April 5, 1999, executed by some of the co-owners (four Gregoria Heirs and Emelita Remillano) to correct a mistaken lot designation in a subdivision plan, is valid and binding upon the other co-owners who were not parties to the deed.

RULING

The Supreme Court DENIED the petitions and AFFIRMED the assailed CA Decision with modification.
1. Validity of the Deed of Exchange: The Court upheld the CA’s ruling that the Deed of Exchange is VALID. The DEP was a binding contract among the heirs. The subsequent erroneous subdivision plan did not supersede the DEP. The fact that Juana and Gregoria possessed the lots according to the DEP during their lifetimes showed they never acquiesced to the plan’s mistake. The Deed of Exchange was merely executed to correct this clerical error and give effect to the original partition intent. Since the exchange only involved the specific shares of the signatory heirs and did not prejudice the other co-owners (the Bustamantes and the non-signatory Gregoria Heirs), but in fact benefited them by clarifying ownership, it did not require the consent of all co-owners. The rights of the non-signatory co-owners over their own respective shares remained unaffected.
2. Consequences on Ulay’s Purchase: Since the Deed of Exchange was valid, the four Gregoria Heirs validly acquired rights over Lot 1089-F and thus had the right to sell a portion thereof to Jesus Ulay. Consequently, Ulay was a buyer in good faith and acquired valid title. The subsequent Affidavit of Waiver by the Remillanos was correctly declared null and void by the CA, as the Remillanos had already ceded their rights via the Deed of Exchange and had nothing left to waive.
3. Disposition of the Recovery Case: The Court found that the CA erred in not reinstating Ulay’s recovery case. As a co-owner of Lot 1089-F by virtue of his valid purchase, Ulay had the right under Article 487 of the Civil Code to bring an action for ejectment to recover possession from a fellow co-owner (Maranguyod) who unlawfully withheld it. The case should be remanded to the trial court to determine if Ulay was indeed deprived of possession by force, intimidation, threat, strategy, or stealth, as required under Rule 70 of the Rules of Court.
Final Orders: The Supreme Court affirmed the validity of the Deed of Exchange and the Deed of Sale to Ulay, upheld the nullity of the Affidavit of Waiver, and ordered the remand of the recovery case for further proceedings. The award of reimbursement to Ulay was deleted as his title was upheld.