G.R. No. L-7888, December 6, 1913
DIONISIO CABUNIAG, administrator of the estate of the deceased Narcisa Gagarino, plaintiff-appellant, vs. MARCOS MAGUNDAYAO, defendant-appellee.

FACTS:
Dionisio Cabuniag, as judicial administrator of the estate of the deceased Narcisa Gagarino, filed an action for recovery of possession and annulment of contracts. He alleged that Narcisa Gagarino died in February 1903 as the owner of a piece of coconut land and a residential lot in Tiaong, Tayabas. One month after her death, Roberto Jonas, pretending to be her heir, took possession of the properties. Jonas sold the coconut land to Marcos Magundayao and mortgaged the residential lot to Benita Safont to cover funeral expenses. The plaintiff contended that Jonas had no right to the estate as Narcisa died intestate, leaving three legitimate grandchildren as her legal heirs.

The defendant Magundayao claimed he acquired the coconut land by purchase from Roberto Jonas, Urbana Jonas, and Paula Gagarino, and that he was a possessor in good faith who introduced valuable improvements on the land.

The trial court absolved defendant Magundayao from the complaint. It ordered Benita Safont to restore the lot to the plaintiff’s estate upon reimbursement of the loan amount, without interest. The plaintiff appealed.

ISSUE:
Whether the contracts of sale and mortgage executed by Roberto Jonas (and others) over the properties of the deceased Narcisa Gagarino are null and void, thereby entitling her estate to recover said properties.

RULING:
The Supreme Court AFFIRMED the trial court’s judgment, with modification regarding the lot mortgaged to Benita Safont.

1. Regarding the Coconut Land Sold to Magundayao: The Court found that the 12-hectare land, which included the coconut land in dispute, was originally owned by Justa (mother of Narcisa, Paula, and another deceased sister). Upon Justa’s death, the land remained undivided among her three heirs: Narcisa, Paula, and the children (Roberto and Urbana Jonas) of the other predeceased sister. Therefore, the property was held in common (pro indiviso). Narcisa owned only a one-third share. The sale to Magundayao was executed by Paula Gagarino and Roberto and Urbana Jonas, covering only one-third of the undivided landthe share belonging to them as co-owners. They did not dispose of Narcisa’s one-third share. Consequently, the sale was a valid exercise of their right to dispose of their own property and did not prejudice the heirs of Narcisa. The action for annulment and recovery against Magundayao had no basis.

2. Regarding the Lot Mortgaged to Safont: The Court agreed with the trial court that the residential lot was the exclusive property of Narcisa Gagarino, who possessed it for over thirty years. However, the act of Roberto Jonas in mortgaging it to Benita Safont to secure a loan for Narcisa’s funeral expenses was not declared utterly void. Instead, the transaction was treated as one susceptible to redemption. Safont, who acted in good faith, must return the lot to Narcisa’s estate upon payment of the loan amount, without interest. She is not liable to account for the fruits or revenues derived from the lot, as the estate did not pay interest on the loan.

The Court held there were no grounds to annul the contracts. Defendant Magundayao was correctly absolved. The estate could recover the mortgaged lot from Safont upon reimbursing the loan principal. No costs were awarded.