G.R. No. L-16579. June 29, 1964.
SATURNINA HOLLERO and JOSE CAMENO, petitioners, vs. THE COURT OF APPEALS, JOSE HOLLERO, ANITA HARDER, ISAGANI EVANGELISTA, ET AL., respondents.

FACTS

The case involves a parcel of land in Jaro, Iloilo, originally the paraphernal property of Paz Hollero. Upon her death in 1935, the property passed to her only son, Felix, and then, upon his death in 1944, to her husband, Generoso Hollero. The respondents, who are the brothers, sisters, and nieces/nephews of Paz (the relatives within the third degree of the descendant, Felix), claim ownership through the operation of reserva troncal. They argue that upon Generoso’s death, the property should revert to them as reservatarios.
The petitioners, Saturnina Hollero (Generoso’s successor) and Jose Cameno, assert ownership derived from Generoso. Their claim is based on a 1934 pacto de retro sale of the land by Paz to Andrea Gustilo and a subsequent 1936 sale by Andrea to Generoso. The core factual dispute in the lower courts was whether the 1934 pacto de retro constituted an absolute sale or merely an equitable mortgage.

ISSUE

The principal issue before the Supreme Court was whether the Court of Appeals erred in its application of the law, specifically in: (1) awarding shares of the property to individuals who had previously relinquished their rights to the petitioners, and (2) awarding damages based on annual crops.

RULING

The Supreme Court affirmed the Court of Appeals’ decision with modifications. On the central factual issue, the Court held that the characterization of the 1934 document as an equitable mortgage, not a sale, was a final finding of fact by the Court of Appeals. This finding established that the property never left Paz’s estate; it was inherited by Felix and then by Generoso, who held it subject to the reserva troncal obligation under Article 891 of the Civil Code. Thus, upon Generoso’s death, the property rightly passed to the reservatarios, the relatives of the descendant (Felix) within the third degree.
However, the Court found merit in the petitioners’ first assignment of error. The dispositive portion of the appellate court’s decision erroneously included shares for Manuel Hollero (Paz’s brother) and Felix Harder (a nephew). The record showed these individuals had previously relinquished their rights in favor of the petitioners in a prior ejectment case (Civil Case No. 2239). Consequently, their respective shares in the property must be adjudicated to the petitioners. Manuel Hollero was entitled to a 1/6 share, and Felix Harder to a 1/24 share (being one of four heirs of his mother Socorro, who had a 1/6 share). The petitioners’ aggregate share was thus 5/24 of the property.
Regarding the second error on damages, the Court declined to review the award of P5,000 annual indemnity, as it involved an assessment of evidence which is within the appellate court’s final authority. This indemnity was, however, ordered reduced proportionally by 5/24. The case was remanded to the trial court to effect the partition of the property according to the corrected shares, unless the parties agreed to hold it pro-indiviso.