G.R. No. 48184. March 12, 1990.
PAULA GARCIA, ET AL., petitioners, vs. ANDRES GONZALES, RAMON EAMIGUEL, NICASIO PARILLA and COURT OF APPEALS, respondents.

FACTS

This case originated from a complaint for recovery of real properties, partition, and accounting filed by the nephews and nieces of the deceased, childless spouses Fructuoso Garcia and Quintina Gonzales. The properties in dispute consisted of four parcels. Parcels 3 and 4 were donated to the spouses in 1911 and were subsequently sold by them in 1921 to Fr. Sergio Eamiguel, who later donated them to his nephews. These parcels were eventually possessed by respondents Ramon Eamiguel (Parcel 4) and Nicasio Parilla (Parcel 3). Parcel 2 was sold by the widow Quintina to her nephew, respondent Andres Gonzales, in 1945, after Fructuoso’s death. Parcel 1 was unclaimed by any respondent.
The petitioners, as collateral relatives of Fructuoso, claimed rights to these properties. They argued that the 1945 sale of Parcel 2 by Quintina to Gonzales was invalid, asserting that under Article 995 of the Civil Code, they were entitled to one-half of Quintina’s intestate estate, as the properties were conjugal, not her paraphernal assets. They also sought to recover Parcels 3 and 4, challenging the validity of the 1921 sale to Fr. Eamiguel.

ISSUE

The primary issues were: (1) the validity of Quintina Gonzales’ sale of Parcel 2 to Andres Gonzales; (2) the ownership of Parcel 1; and (3) the recoverability of Parcels 3 and 4 from the respondents.

RULING

The Supreme Court modified the Court of Appeals’ decision. On Parcel 2, the Court ruled the sale to Andres Gonzales was entirely valid. Quintina, as the surviving spouse, was entitled to the entire estate of Fructuoso under the rules of intestate succession of the Spanish Civil Code (Article 837), which applied at the time of Fructuoso’s death in 1922. This provision granted the entire estate to the surviving spouse in the absence of legitimate descendants or ascendants. Thus, Quintina had full ownership and the capacity to convey Parcel 2. Petitioners’ claim under Article 995 of the new Civil Code was inapplicable, as succession rights are determined by the law in force at the time of the decedent’s death.
Regarding Parcel 1, the Court declared it owned absolutely by the petitioners as heirs of Fructuoso Garcia, as no respondent laid claim to it. For Parcels 3 and 4, the Court affirmed the appellate court’s ruling that the petitioners’ action was barred by prescription. The sale from the spouses to Fr. Eamiguel occurred in 1921, and the petitioners filed their complaint only in 1967, well beyond the prescriptive period for challenging the sale. The respondents’ open, continuous, and adverse possession for decades extinguished any possible claim.
Finally, the Court affirmed the deletion of awards for moral damages and attorney’s fees. The petitioners’ institution of the case was an exercise of a bona fide right to litigate and was partially meritorious concerning Parcel 1. An adverse result does not automatically imply a malicious suit warranting damages.