G.R. No. 99346 February 7, 1995 CASA FILIPINA REALTY CORPORATION, petitioner, vs.

OFFICE OF THE PRESIDENT and Spouses DENNIS and REBECCA SEVILLA, respondents. This is a motion for the reconsideration of the Resolution of August 5, 1991 1 dismissing the instant petition for certiorari for failure of herein petitioner Casa Filipina Realty Corporation to sufficiently show that respondent public officials have committed any reversible error in their decision which is unfavorable to the petitioner. The records show that sometime in May or June 1984, spouses Dennis and Rebecca Sevilla agreed to purchase from Casa Filipina Realty Corporation (CFRC) a parcel of land with an area of about 264 square meters located in Barrio San Dionisio, Paraaque, Metro Manila and identified as Lot 7, Block 6, Phase IV, Casa Filipina II Subdivision. The parties agreed that the purchase price of P150,480.00 would be paid on installment basis with P36,115.20 as down payment and P3,560.86 as monthly installment for five (5) years at 28% amortization interest per annum. The agreement was embodied in a contract to sell executed on November 15, 1984. In the ensuing months after the execution of the contract, the Sevilla spouses failed to pay the amortizations on time. The last installments they paid were for April to July 1985, which they paid, including penalties, on September 25, 1985. On November 5, 1985, Dennis Sevilla wrote a letter to CFRC calling its attention to the absence of any improvement in the subdivision and his discovery that, upon checking with the Register of Deeds of Pasay City, the mother title of the subdivision was under lis pendens and mortgaged to ComSavings Bank (formerly Royal Savings Bank). Sevilla, therefore, requested a refund of all installment payments made on account of the contract. 2 On November 19, 1985, the Sevilla spouses filed a complaint against CFRC with the Office of Appeals, Adjudication and Legal Affairs (OAALA) of the Human Settlements Regulatory Commission. They prayed for the refund of P70,431.12 which was the total amount they had paid CFRC on account of the contract, plus legal interest thereon from the date of the reservation or from the date of the contract to sell, whichever is applicable, attorney's fees of P5,000.00, and moral/liquidated damages in the amount of P20,000.00 and the costs of the suit. After due hearing, the OAALA rendered the decision of October 13, 1987 finding CFRC to be without license to sell the subdivision involved. OAALA held that, even assuming that CFRC had a license to sell, it was still liable for violation of Sec. 20 of Presidential Decree No. 957 as it had failed to develop the subdivision. In so holding, the OAALA took judicial notice of the report of Danilo B. Agus on the ocular inspection he had conducted on December 5, 1986 in the same subdivision project in "Ernesto Ola v. Casa Filipina Realty and Development Corporation", HLURB Case No. REM-0102386-3013, for non-development. Hence, the OAALA ordered CFRC to refund the Sevilla couple the amount of P70,431.12 with 28% interest per annum computed from November 19, 1985, the date of the filing of the complaint, until fully paid and to pay P4,000.00 as attorney's fees and P3,000.00 as administrative fine for violation of Sec. 20 of P.D. No. 957. Said decision was affirmed by the Housing and Land Use Regulatory Board (HLURB) on June 21, 1988 with the modification that instead of the 28% interest charged upon CFRC by the OAALA on the refundable amount, HLURB imposed only 6%. On January 31, 1990, the Office of the President dismissed for lack of merit the appeal taken by CFRC and affirmed the June 21, 1988 decision of the HLURB. 3 CFRC filed a motion for the reconsideration of the decision of the Office of the President but it was denied on May 7, 1991. 4

Hence, CFRC filed the instant petition 5 which, as earlier stated, was dismissed by this Court on August 5, 1991. Petitioner's motion for reconsideration is anchored on the contention that the petition should not have been dismissed as it involves the "interpretation and/or application" 6 of provisions of law as the court has to determine whether it is Sec. 23 or 24 of P.D. No. 957 which should be applied in the instant case. Petitioner argues that since private respondents desisted from paying the agreed installments, they should have notified the CFRC of such desistance in accordance with Sec. 23. Moreover, since private respondents desistance from further paying the amortization was due to litis pendentia and the mortgage of the mother title of the subdivision, Sec. 24 should have been applied in the case. As regards the interest charged on the refundable amount, petitioner contends that while it is not averse to making a refund, the 3% delinquency interest charged upon private respondents for their late amortizations should not be included in the amount refundable and the refund should be in accordance with P.D. No. 957. For a clear resolution of the motion for reconsideration, the provisions of P.D. No. 957 involved herein must be noted: Sec. 23. Non-Forfeiture of Payments. No installment payment made by a buyer in a subdivision or condominium project for a lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the owner or developer to develop the subdivision or condominium project according to the approved plans and within the time limit for complying with the same. Such buyer may, at his option, be reimbursed the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate. Sec. 24. Failure to pay installments. The rights of the buyer in the event of his failure to pay the installments due for reasons other than failure of the owner or developer to develop the project shall be governed by Republic Act No. 6552. In arguing for the reconsideration of the Resolution of August 5, 1991 dismissing the petition, petitioner underscores the holding of the Office of the President that Sec. 23 "does not require that a notice be given first before a demand for refund can be made" as the notice and demand "can be made in the same letter or communication" which was exactly what private respondents did. 7 While petitioner agrees that the notice and demand for reimbursement may be made in one communication, it avers that Sec. 23 clearly provides that there can be no forfeiture of payments made by a buyer only if such buyer has first given notice to the developer that he will not pay the installments anymore on the ground that the subdivision where the lot being bought is located has not been developed. Petitioner's contention is premised on its misleading statement that the private respondents' desistance from further paying the amortization was based merely on the notice of lis pendens and the mortgage annotated on the mother title of subject property 8 or on "reasons other than nondevelopment." 9 This is belied by the letter itself which, for clarity, we quote in full: November 5, 1985 MR. AUGUSTO S. PARCERO Vice President CASA FILIPINA REALTY CORP.

3rd Flr., Corinthian Plaza Legaspi Vill., Makati, Metro Manila Dear Sir: This is in connection of our lot we purchased at CASA FILIPINA SUBDIVISION, more particularly described as follows: Phase IV Block #6 Lot #7 As we see and understand that the property mentioned has no development improvements even on the project features. Since we convinced to pay the reservation and the full down payment and now the amortization, we keep on visiting the place for construction . . . (illegible) and we don't even know where our lot is exactly located, nor we go over the place because of the overhead growth of the cogon grass. The last time I arrived from Saudi Arabia, we decided to check at the Register of Deeds of Pasay regarding the said lot, and we found out that the mother title has a Less Pendins case and we also found out that the said title was under mortgage to Com Savings Bank formerly Royal Saving Bank. In behalf of this unexpected circumstances, we are requesting for a refund for the money we paid up to Casa Filipina Realty Corporation. Hoping for your kind consideration regarding this matter. Private respondent's refusal to continue paying the amortization is thus based on two principal grounds: nondevelopment of the subdivision and the encumbrance of the property subject of the sale which became apparent to the buyer only after conducting his own investigation. As such, the case falls squarely within the purview of both Secs. 23 and 24 of P.D. No. 957. Considering, however, the peculiar circumstances of this case, we agree with the Solicitor General that the requirements of Sec. 23 have been complied with by the private respondents. In this regard, public respondent, after conceding the petitioner's argument that Sec. 23 requires the buyer to notify the developer or subdivision owner of his intention not to remit further payments on the property on account of nondevelopment of the subdivision, states: Appellant's reading of Section 23 elicits our concurrence. However, its claim that appellees had failed to give the required notice before demanding for refund, is not borne out by the evidence. Records show that in a letter of November 5, 1985, Dennis Sevilla already gave notice to appellant regarding, among other things, the nondevelopment of the subdivision, and therein demanded for refund. To our mind, Section 23 does not require that a notice be given first before a demand for refund can be made. The notice and the demand can be made in the same letter or communication, and this is what the appellees did. But appellant would insist that, when appellees demanded a refund of installments paid in their letter of November 5, 1985, they were already in default as of August 30, 1985, and that their said demand had "the sound of belated and hindsight attempt to cover up the default for which contract cancellation would be the necessary consequence." We find the contention untenable.

The general rule is that an obligor incurs in delay (default) only after a demand, judicial or extrajudicial, has been made from him for the fulfillment of his obligation. Thus, Article 1169 of the Civil Code provides that "Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation." Here, there was no such demand by the appellant. The letters it sent to appellees were the usual remind letters that are ordinarily sent by creditors to late-paying debtors. They are not the demand contemplated by law. 11 Being in accord with the spirit behind P.D. No. 947, public respondent's conclusions are hereby affirmed. This decree, aptly entitled "The Subdivision and Condominium Buyers' Protective Decree", was issued in the wake of numerous reports that many real estate subdivision owners, developers, operators and/or sellers "have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems and other basic requirements" for the health and safety of home and lot buyer's. 12 It was designed to stem the tide of "fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to buyers or titles free from liens and encumbrances." 13 Should the notice requirement provided for in Sec. 23 be construed as required to be given before a buyer desists from further paying amortizations as in this case, the intent of the law to protect subdivision lot buyers, such as private respondents, will tend to be defeated. It should be noted that the petitioner did not only fail to develop the subdivision it was selling but had also encumbered the property prior to selling the same. The inscription of acts and transactions relating to the ownership and other rights over immovable property, even as it serves as a constructive notice to the whole world, is intended to protect the person in whose favor the entry is made and the public in general against any possible undue prejudice due to ignorance on the status of the realty. The rule on constructive notice is not so designed, however, as to allow a person to escape from a lawfully incurred liability. Thus, a vendor of real estate whereon an adverse claim is validly annotated cannot invoke such registration to avoid his own obligation to make a full disclosure to the vendee of adverse claims affecting the property. The registration protects the adverse claimant because of the rule on constructive notice but not the person who makes the conveyance. It behooves such real estate developer and dealers to make proper arrangements with the financial institutions to allow the release of titles to buyers upon their full payment of the purchase price. Moreover, the HLURB found that petitioner had not secured a license prior to the sale of the subject lot 14 which is a requirement of Sec. 5 of P.D. No. 957. These factual findings of the administrative bodies which are equipped with expertise as far as their jurisdiction is concerned, should be accorded, not only respect but even finality as they are supported by substantial evidence even if not overwhelming or preponderant. 15 Thus, a stringent application of the law is demanded as far as petitioner is concerned. On the issue of delinquency interest which Sec. 23 of P.D. No. 957 explicitly excludes from the amount to be reimbursed to lot buyers, the Solicitor General avers that since the matter has been belatedly raised, the same should be deemed waived. 16 However, while the rule is that no error which does not affect jurisdiction will be considered unless stated in the assignment of errors, the trend in modern-day procedure is to accord the courts broad discretionary power such that the appellate court may consider matters bearing on the issues submitted for resolution which the parties failed to raise or which the lower court ignored. Since rules of procedure are mere tools designed to facilitate the attainment of justice, their strict and rigid application which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be avoided. 17 Technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. 18

ACCORDINGLY, petitioner's motion for reconsideration of the resolution of August 5, 1991 dismissing the instant petition for certiorari is hereby DENIED and the decision of the Office of the President is AFFIRMED. This Resolution is immediately executory. No costs. G.R. No. L-52361 April 27, 1981 SUNSET VIEW CONDOMINIUM CORPORATION, petitioner, vs. THE HON. JOSE C. CAMPOS, JR. OF THE COURT OF FIRST INSTANCE, BRANCH XXX, PASAY CITY and AGUILAR-BERNARES REALTY, respondents. G.R. No. L-52524 April 27, 1981 SUNSET VIEW CONDOMINIUM CORPORATION, petitioner, vs. THE HON. JOSE C. CAMPOS, JR., PRESIDING JUDGE OF THE COURT OF FIRST INSTANCE, BRANCH XXX, PASAY CITY, and LIM SIU LENG, respondents. These two cases which involve similar facts and raise Identical questions of law were ordered consolidated by resolution of this Court dated March 17, 1980. 1 The petitioner, Sunset View Condominium Corporation, in both cases, is a condominium corporation within the meaning of Republic Act No. 4726 in relation to a duly registered Amended Master Deed with Declaration of Restrictions of the Sunset View Condominium Project located at 2230 Roxas Boulevard, Pasay City of which said petitioner is the Management Body holding title to all the common and limited common areas. 2 G.R. NO. 52361 The private respondent, Aguilar-Bernares Realty, a sole proprietorship with business name registered with the Bureau of Commerce, owned and operated by the spouses Emmanuel G. Aguilar and Zenaida B. Aguilar, is the assignee of a unit, "Solana", in the Sunset View Condominium Project with La Perla Commercial, Incorporated, as assignor. 3 The La Perla Commercial, Incorporated bought the "Solana" unit on installment from the Tower Builders, Inc. 4 The petitioner, Sunset View Condominium Corporation, filed for the collection of assessments levied on the unit against Aguilar-Bernares Realty, private respondent herein, a complaint dated June 22, 1979 docketed as Civil Case No. 7303-P of the Court of First Instance of Pasay City, Branch XXX. The private respondent filed a Motion to Dismiss the complaint on the grounds (1) that the complaint does not state a cause of action: (2) that the court has no jurisdiction over the subject or nature other action; and (3) that there is another action pending between the same parties for the same cause. The petitioner filed its opposition thereto. The motion to dismiss was granted on December 11, 1979 by the respondent Judge who opined that the private respondent is, pursuant to Section 2 of Republic Act No. 4726, a "holder of a separate interest" and consequently, a shareholder of the plaintiff condominium corporation; and that "the case should be properly filed with the Securities & Exchange Commission which has exclusive original jurisdiction on controversies arising between shareholders of the corporation." the motion for reconsideration thereof having been denied, the petitioner, alleging grave abuse of discretion on the part of respondent Judge, filed the instant petition for certiorari praying that the said orders be set aside. G.R. NO. 52524 The petitioner filed its amended complaint dated July 16, 1979 docketed as Civil Case No. 14127 of Branch I of the City Court of Pasay City for the collection of overdue accounts on assessments and insurance premiums and the interest thereon amounting to P6,168 06 as of March 31, 1979 against

the private respondent Lim Siu Leng 5 to whom was assigned on July 11, 1977 a unit called "Alegria" of the Sunset. View Condominium Project by Alfonso Uy 6 who had entered into a "Contract to Buy and Sell" with Tower Builders, Inc. over the said unit on installment basis. 7 The private respondent filed a motion to dismiss on the ground of lack of jurisdiction, alleging that the amount sought to be collected is an assessment. The correctness and validity of which is certain to involve a dispute between her and the petitioner corporation; that she has automatically become, as a purchaser of the condominium unit, a stockholder of the petitioner pursuant to Section 2 of the Condominium Act, Republic Act No. 4726; that the dispute is intra-corporate and is consequently under the exclusive jurisdiction of the Securities & Exchange Commission as provided in Section 5 of P.D. No. 902-A. 8 The petitioner filed its opposition thereto, alleging that the private respondent who had not fully paid for the unit was not the owner thereof, consequently was not the holder of a separate interest which would make her a stockholder, and that hence the case was not an intra-corporate dispute. 9 After the private respondent had filed her answer to the opposition to the motion to dismiss 10 of the petitioner, the trial court issued an order dated August 13, 1979 denying the motion to dismiss. 11 The private respondent's motion for reconsideration thereof was denied by the trial court in its Order dated September 19, 1979. 12 The private respondent then appealed pursuant to Section 10 of Rule 40 of the Rules of Court to the Court of First Instance, where the appeal was docketed as Civil Case No. 7530P. The petitioner filed its "Motion to Dismiss Appeal" on the ground that the order of the trial court appealed from is interlocutory. 13 The motion to dismiss the appeal was denied and the parties were ordered to submit their respective memorandum on the issue raised before the trial court and on the disputed order of the trial judge. 14 After the parties had submitted their respective memoranda on the matter, the respondent Judge issued an order dated December 14, 1979 in which he directed that "the appeal is hereby dismissed and d the judgment of the lower court is reversed. The case is dismissed and the parties are directed to ventilate their controversy with the Securities & Exchange Commission. 15 The petitioner's motion for reconsideration thereof was denied in an order dated January 14, 1980. 16 Hence this petition for certiorari, alleging grave abuse of discretion on the part of the respondent Judge. Issues Common to Both Cases It is admitted that the private respondents in both cases have not yet fully paid the purchase price of their units. The Identical issues raised in both petitions are the following: 1. Is a purchaser of a condominium unit in the condominium project managed by the petitioner, who has not yet fully paid the purchase price thereof, automaticaly a ,stockholder of the petitioner Condominium Corporation 2. Is it the regular court or the Securities & Exchange Commission that has jurisdiction over cases for collection of assessments assessed by the Condominium Corporation on condominium units the full purchase price of which has not been paid? The private respondents in both cases argue that every purchaser of a condominium unit, regardless of whether or not he has fully paid the purchase price, is a "holder of a separate interest" mentioned in Section 2 of Republic Act No. 4726, otherwise known as "The Condominium Act" and is automatically a shareholder of the condominium corporation.

The contention has no merit. Section 5 of the Condominium Act expressly provides that the shareholding in the Condominium Corporation will be conveyed only in a proper case. Said Section 5 provides: Any transfer or conveyance of a unit or an apartment, office or other space therein, shall include the transfer or conveyance of the undivided interests in the common areas or, in a proper case, the membership or shareholding in the condominium corporation ... It is clear then that not every purchaser of a condominium unit is a shareholder of the condominium corporation. The Condominium Act leaves to the Master Deed the determination of when the shareholding will be transferred to the purchaser of a unit. Thus, Section 4 of said Act provides: The provisions of this Act shall apply to property divided or to be divided into condominium only if there shall be recorded in the Register of Deeds of the province or city in which the property lies and duly annotated in the corresponding certificate of title of the land ... an enabling or master deed which shall contain, among others, the following: xxx xxx xxx (d) Astatement of the exact nature of the interest acquired or to be acquired by the purchaser in the separate units and in the common areas of the condominium project ... The Amended Master Deeds in these cases, which were duly registered in the Register of Deeds, and which contain, by mandate of Section 4, a statement of the exact nature of the interest acquired by a purchaser of a unit, provide in Section 6 of Part 1: (d) Each Unit owner shall, as an essential condition to such ownership, acquire stockholding in the Condominium Corporation herein below provided ... 17 The Amended Master Deeds likewise provide in Section 7 (b), thus. (b) All unit owners shall of necessity become stockholders of the Condominium Corporation. TOWER shall acquire all the shares of stock of SUNSET VIEW and shall allocate the said shares to the units in proportion to the appurtenant interest in the COMMON AREAS and LIMITED COMMON AREAS as provided in Section 6 (b) above. Said shares allocated are mere appurtenances of each unit, and therefore, the same cannot be transferred, conveyed, encumbered or otherwise disposed of separately from the Unit ... 18 It is clear from the above-quoted provisions of the Master Deeds that the shareholding in the Condominium Corporation is inseparable from the unit to which it is only an appurtenant and that only the owner of a unit is a shareholder in the Condominium Corporation. Subparagraph (a) of Part 1, Section 6, of the Master Deeds determines when and under what conditions ownership of a unit is acquired by a purchaser thus: (a) The purchaser of a unit shall acquire title or ownership of such Unit, subject to the terms and conditions of the instrument conveying the unit to such purchaser and to the terms and conditions of any subsequent conveyance under which the purchaser takes title to the Unit, and subject further to this MASTER DEED ... 19

The instrument conveying the unit "Solana" in G.R. NO. 52361 is the "Contract to Buy and Sell" dated September 13, 1977, Annex "D", while that conveying the unit "Alegria" in G.R. NO. 52524 is the "Contract to Buy and Sell" dated May 12, 1976, Annex "C". In both deeds of conveyance, it is provided: 4. Upon full payment by the BUYER of the total purchase price and full compliance by the BUYER of an its obligations herein, the SELLER will convey unto the BUYER, as soon as practicable after completion of the construction, full and absolute title in and to the subject unit, to the shares of stock pertaining thereto and to an rights and interests in connection therewith ... 20 The share of stock appurtenant to the unit win be transferred accordingly to the purchaser of the unit only upon full payment of the purchase price at which time he will also become the owner of the unit. Consequently, even under the contract, it is only the owner of a unit who is a shareholder of the Condominium Corporation. Inasmuch as owners is conveyed only upon full payment of the purchase price, it necessarily follows that a purchaser of a unit who has not paid the full purchase price thereof is not The owner of the unit and consequently is not a shareholder of the Condominium Corporation. That only the owner of a unit is a stockholder of the Condominium Corporation is inferred from Section 10 of the Condominium Act which reads: SEC. 10. ... Membership in a condominium corporation, regardless of whether it is a stock or non-stock corporation, shall not be transferable separately from the condominium unit of which it is an appurtenance When a member or stockholder ceases is to own a unit in the project in which the condominium corporation owns or holds the common areas, he shall automatically cease to be a member or stockholder of the condominium corporation. Pursuant to the above statutory provision, ownership of a unit is a condition sine qua non to being a shareholder in the condominium corporation. It follows that a purchaser of a unit who is not yet the owner thereof for not having fully paid the full purchase price, is not a shareholder By necessary implication, the "separate interest" in a condominium, which entitles the holder to become automatically a share holder in the condominium corporation, as provided in Section 2 of the Condominium Act, can be no other than ownership of a unit. This is so because nobody can be a shareholder unless he is the owner of a unit and when he ceases to be the owner, he also ceases automatically to be a shareholder. The private respondents, therefore, who have not fully paid the purchase price of their units and are consequently not owners of their units are not members or shareholders of the petitioner condominium corporation, Inasmuch as the private respondents are not shareholders of the petitioner condominium corporation, the instant case for collection cannot be a "controversy arising out of intracorporate or partnership relations between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively" which controversies are under the original and exclusive jurisdiction of the Securities & Exchange Commission, pursuant to Section 5 (b) of P.D. No. 902- A. The subject matters of the instant cases according to the allegations of the complaints are under the jurisdiction of the regular courts: that of G.R. NO. 52361, which is for the collection of P8,335.38 with interest plus attorney's fees equivalent to the principal or a total of more than P10,000.00 is under the jurisdiction of the Court of First Instance; and that of G.R. NO. 52524, which is for the collection of P6,168-06 is within the jurisdiction of the City Court.

In view of the foregoing, it is no longer necessary to resolve the issue raised in G.R. NO. 52524 of whether an order of the City Court denying a motion to dismiss on the ground of lack of jurisdiction can be appealed to the Court of First Instance. WHEREFORE, the questioned orders of the respondent Judge dated December 11, 1979 and January 4, 1980 in Civil Case No. 7303-P, subject matter of the Petition in G.R. No. 52361, are set aside and said Judge is ordered to try the case on the merits. The orders dated December 14, 1979 and January 14, 1980 in Civil Case No. 7530-P, subject matter of the petition in G.R. No. 52524 are set aside and the case is ordered remanded to the court a quo, City Court of Pasay City, for trial on the merits, with costs against the private respondents G.R. No. 95778 July 17, 1992 SKYWORLD CONDOMINIUM OWNERS ASSOCIATION, INC., petitioners, vs. SECURITIES AND EXCHANGE COMMISSION and BAGUIO SKYWORLD CONDOMINIUM, respondents.

This is a petition to review the decision of the Securities and Exchange Commission (SEC), en banc. The petition was reinstated after a reconsideration of two previous resolutions of this Court denying the same for non-compliance with the required payment of costs and clerk's commission, and after recalling the entry of judgment issued on February 6, 1992. We also decided to treat the petition as an exception to the rule that SEC decisions must first pass the intermediate appeal process. Petitioner Skyworld Condominium Owners Association, Inc. (SCOAI) was the appellant in SEC-AC No. 297. Its appeal was treated by the Commission, en banc as a motion for reconsideration. The Petitioner primarily assails the allegedly unauthorized action of Special Prosecutor Norberto Ruiz of the Prosecution and Enforcement Department of the SEC to decide the consolidated petitions for revocation of certificate of registration. Petitioner SCOAI claims to be a legitimate condominium corporation in relation to the Skyworld Condominium located at Session Road corner Calderon St., Baguio City and covered by Transfer Certificate of Title (TCT) No. 33451 of the Registry of Deeds of Baguio City. SCOAI was organized and granted a certificate of registration on March 21, 1985 by the SEC. It claims to be the condominium corporation recognized by the Inter-Realty Development Corporation (hereinafter referred to as Inter-Realty), the original owner of the land covered by TCT No. 33451 and the condominium project. It also claims to have been recognized by the China Banking Corporation (CBC), the subsequent owner of the condominium project because the latter consented to the organization of the SCOAI. The antecedent facts of the case are as follows: On September 12, 1975, Inter Realty obtained a loan from the CBC as security for which it mortgaged three (3) parcels of land, which were later consolidated into one title, TCT No. 33451, and the improvements thereon. On July 21, 1987, the initial indebtedness was increased to P7,000,000.00.

For Inter-Realty's failure to pay the debt, the CBC foreclosed the condominium project. The foreclosure sale was held on April 11, 1983 after compliance with the notice requirements. The project was sold to CBC which who the highest bidder. On April 6, 1984, Inter-Realty and CBC executed a Memorandum of Agreement providing for an extended period for redemption of the condominium project, until all the condominium units shall have been sold and the proceeds turned over to the CBC and applied to the loan accounts of InterRealty (Rollo, pp. 38-42). Meanwhile, on the same date, April 6, 1984, Inter-Realty made a written authorization in favor of Angel Bautista, a real estate dealer, to buy or sell the condominium units to buyers (Rollo, pp. 4344). The authority was for a period of one year or until April 1985 in order to facilitate the disposition of the units and the payment of indebtedness with the CBC. In May, 1985, CBC was notified by petitioner SCOAI through Angel Bautista, who was the latter's president, of the organization and official incorporation of the SCOAI. When Inter-Realty failed to redeem the foreclosed properties by October 1985, CBC consolidated its ownership over the land (now covered by TCT No. 38837) and 78% of the condominiums residential units and common areas. On December 16, 1985, the CBC as new owner of the foreclosed properties and with the aim of recovering the unpaid debt of Inter-Realty, authorized Angel Bautista to sell the unsold condominium units. This authority was, however, revoked by CBC on April 17, 1986 after discovering that Bautista violated his fiduciary obligations as agent. Two petitions were filed against the petitioner SCOAI, one of them contesting the existence of the petitioner as an entity, and the other, for a writ of preliminary injunction praying that the petitioner be stopped from exercising the prerogatives of a condominium corporation. The first petition was filed on August 8, 1986 by CBC before the SEC docketed as SEC No. 3035. The second was filed on October 9, 1986 before the Regional Trial Court of Baguio, Branch V (Civil Case No. 915-R) by the respondent Baguio Skyworld Condominium Corporation (BSCC) which was organized at the instance of CBC and registered with the SEC on September 19, 1986. On October 3, 1986, a petition was filed by CBC against Angel Bautista before the Regional Trial Court of Baguio City (Branch III, Civil Case No. 908-R) for a writ of preliminary injunction to enjoin Mr. Bautista from further representing himself as agent of the new owner-developer, the CBC, which already revoked his authority to sell. The trial court granted a writ of preliminary injunction which was later made permanent by the Court of Appeals. On November 14, 1986, the case filed by the BSCC was dismissed by the trial court. On February 3, 1988, the case filed by the CBC was dismissed by the SEC. On June 20, 1988, BSCC filed a complaint before the SEC's Prosecution and Enforcement Department (PED) to revoke the certificate of registration of petitioner on the ground of fraudulent procurement of the certificate. The case was docketed as PED No. 88-0418 (Rollo, p. 73, et. seq). On January 13, 1989, petitioner SCOAI in turn sued to revoke the certificate of registration of the BSCC before the SEC's Securities Investigation and Clearing Department (SICD). The case was docketed as SEC No. 3493. Acting upon the complaint of the BSCC in PED No. 88-0418, the PED, through Senior SE Specialist Norberto Ruiz filed a petition docketed as SEC No. 3601 dated June 30, 1989 with the

BSCC as a relator, for the revocation of the registration of the herein petitioner. (See Rollo, pp. 95107). The said petition was approved by PED Director Elnora Adviento as recommended by the Chief of the Prosecution Division, Villamin P. Lam. On July 5, 1989, the SICD endorsed SEC No. 3493 (the one filed by SCOAI) to the PED so that a new docket number, PED No. 89-572-A was assigned to that case. The two cases for revocation of registration of the SCOAI (PED No. 88-0418) and the BSCC (PED No. 89-572-A) were consolidated on July 25, 1989. A hearing was conducted on September 11, 1989 by the PED with Mr. Norberto Ruiz as the hearing officer. The counsels of the two parties were present. On December 12, 1989, the PED issued a resolution ordering the revocation of the certificate of registration of the SCOAI. The resolution was prepared by Mr. Norberto Ruiz after studying the substantial evidence he received and the arguments of the parties in the memoranda submitted by the parties to him. On the same date, the resolution was presented by PED Director Elnora Adviento before the Commission en banc which approved the same. As reflected in the Minutes of the Executive Session of the Commission Sitting En Banc, December 12, 1989, 3:50 p.m.: PED MATTERS Baguio Skyworld Condominium Corporation v. Skyworld Condominium Owner's Association, Inc. . . . Based on the foregoing documentary evidence submitted to them, she (Director Elnora Adviento) recommended that the Certificate of Registration of Skyworld Condominium Owners Association, Inc. be revoked and cancelled in view of the findings that it procured its certificate of registration through fraud/misrepresentation and there is no evidence to show that Skyworld Condominium Owners Association have managed the Skyworld Condominium. The Commission en banc resolved to approve the resolution, as recommended. (Rollo, pp. 110-111; emphasis supplied) A motion for reconsideration was filed before the PED but was denied. On March 6, 1990, the petitioner filed a notice of appeal before the Commission, en banc. The appeal was docketed as SEC-AC No. 297. The Commission treated it as a motion for reconsideration because the approved resolution was deemed to be the decision of the Commission, en banc on the issue of revocation. The motion was denied for lack of merit. Hence, this petition in which the following assigned errors are raised: I THE RESPONDENT COMMISSION ERRED WHEN IT ALLOWED SPECIAL PROSECUTOR NORBERTO RUIZ IN DECIDING (sic) THE CASE AFTER FILING THE PETITION WITH THE SICD WITHOUT HEARING. II

THE RESPONDENT COMMISSION ERRED WHEN IT APPROVED THE RESOLUTION OF NORBERTO B. RUIZ DATED DECEMBER 12, 1989 IN AN EXECUTIVE SESSION IN THE AFTERNOON OF THE SAME DAY WITHOUT APPEAL. III THE RESPONDENT COMMISSION ERRED WHEN IT DECLARED THAT PROSECUTOR NORBERTO B. RUIZ HAS AUTHORITY TO DECIDE THE REVOCATION CASE AFTER HE HAS FILED A PETITION WITH SICD TO REVOKE THE CERTIFICATE OF REGISTRATION OF PETITIONER. IV THE RESPONDENT COMMISSION ERRED WHEN IT TREATED THE APPEAL AS MOTION FOR RECONSIDERATION. V THE RESPONDENT COMMISSION ERRED WHEN IT DISMISSED THE APPEAL. (Rollo, p. 14) The assigned errors can more conveniently be restated into the following: 1) whether or not the respondent Commission validly approved the alleged unauthorized resolution or decision made by Mr. Norberto B. Ruiz on the revocation case; and 2) whether or not the appeal, SEC-AC No. 297 was correctly treated as a motion for reconsideration and, thereafter, dismissed. The petitioner essentially questions the authority of Mr. Ruiz to decide. It was Mr. Ruiz who was assigned the case of PED No. 88-0418 for investigation and prosecution. Accordingly, Mr. Ruiz filed a petition (SEC No. 3601) before the Securities Investigation and Clearance Department (SICD) of the SEC. It is argued that Mr. Ruiz acted as prosecutor and judge over the case, hence, he issued the resolution without authority and with grave abuse of discretion. He allegedly went beyond the duties required of a member of the PED which are limited to investigation and prosecution of civil and criminal cases as well as other actions involving violation of laws, rules and regulations enforced by the SEC. The petitioner adds that the presentation for approval of the resolution of Mr. Ruiz to the Commission, en banc was irregular, null and void for being done without the knowledge of the petitioner. Thus, the petitioner was allegedly deprived of the benefit of an appeal from the resolution to the Commission, en banc. The contentions are without merit. Pres. Decree No. 902-A vests on the Commission the original and exclusive jurisdiction to hear and decide cases involving, among others, disputes between the corporation and the state regarding its legal right to exist, and the power to hear and decide on the suspension or revocation of a certificate of registration of a corporation. Section 5, Pres. Decree No. 902-A provides: Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations, partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving: xxx xxx xxx

b. Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the State insofar as it concerns their individual franchise or right to exist as such entity; . . . . (Emphasis Supplied) More specifically, Pres. Decree No. 902-A grants to the Commission in paragraph 1(1), Section 6 the power: Sec. 6. xxx xxx xxx 1) To suspend or revoked, after proper notice and hearing, the franchise or certificate of registration of corporations, partnerships or associations, upon any of the grounds, provided by law, including the following: 1) Fraud in procuring its certificate of registration; xxx xxx xxx The Commission can validly delegate the authority to exercise the specific powers assigned to it by law. The final paragraph of Section 6, Pres. Decree No. 902-A states: In the exercise of the foregoing authority and jurisdiction of the Commission, hearings shall be conducted by the Commission or by a Commissioner or by such other bodies, boards, committees and/or officers as may be created or designated by the Commission for the purpose. . . . In the consolidated cases, the Commission empowered the PED to conduct the hearing and to decide on the revocation of a certificate of registration. The task was assigned to Mr. Ruiz for and in behalf of the Commission. It is true that Mr. Ruiz signed a petition with the BSCC as a relator prior to the consolidation of the two cases. However, that petition was apparently disregarded. Mr. Ruiz was validly authorized to handle the two cases simultaneously filed by the private parties themselves against each other. It must be recalled that in PED No. 88-0418, BSCC pursued its case by itself and not as a mere relator suing through the help of the PED. A private entity is not prohibited from prosecuting its action for revocation of registration by itself. Otherwise, the petition of SCOAI against the BSCC also seeking the revocation of the latter's registration would not have been taken cognizance of by the SEC on the ground that the case should have been prosecuted by the Commission upon the relation of SCOAI. Under the old rules, the Commission may, motu propio, commence such an action (Section 3(c), Rule XX, SEC Rules of Procedure [1977]; See also Section 2(a) and (b), Rule XX, SEC Revised Rules of Procedure [1989]). Commencement of a similar action by a private citizen or corporation is not precluded. In judging the merits of the case at the instance of the Commission, Mr. Ruiz acted only as a trier of the facts presented to him and not as a prosecutor at the same time. The resolution arrived at was adopted by the Commission, en banc as its own decision, upon its approval.

The Court agrees with the analysis of the respondent Commission that the petitioner was barred by estoppel by laches from repudiating the jurisdiction of the hearing officer to whom it has submitted itself and before whom it presented evidence by way of memorandum. The petitioner alleges further that Mr. Ruiz went beyond the limited powers to investigate and to prosecute granted to the PED by Pres. Decree No. 902-A as amended by Pres. Decree No. 1758 (1981). The pertinent provision, Section 6 of Pres. Decree No. 1758 states: Sec. 6. The Prosecution and Enforcement Department shall have, subject to the Commission's control and supervision, the exclusive authority to investigate, on complaint or motu propio, any act or omission of the Board of Directors/Trustees of corporations, or of partnerships, or of other associations, or of their stockholders, officers or partners, including any fraudulent devices, schemes or representations, in violation of any law or rules and regulations administered and enforced by the Commission; to file and prosecute in accordance with law and rules and regulations issued by the Commission and in appropriate cases, the corresponding criminal or civil case before the Commission or the proper court or body upon prima facie finding of violation of any laws or rules and regulations administered and enforced by the Commission; and to perform such other powers and functions as may be provided by law or duly delegated to it by the Commission. xxx xxx xxx (Emphasis supplied) The action of Mr. Ruiz was still within the ambit of the investigative authority given to him by the Commission under its delegated power to revoke, after proper notice and hearing, a certificate of registration of any corporation on the ground of fraud in procuring the certificate of registration (Section 6, 1[1], Pres. Decree No. 902-A as amended). At the time the consolidated cases were filed and tried, the SEC Rules of Procedure (effective July 12, 1977) did not contain any provision specifically designating the body or officer who should hear and decide suits for suspension or revocation of franchise or certificates of registration. No amendments were yet infused into the rules to keep up with the changes introduced by Pres. Decree No. 1758. The Commission had to rely on a particular office to hear the case on September 11, 1989. The Revised SEC Rules of Procedure (1989) that designates the body (SICD) before which, actions for suspension or revocation of franchise or certificate of registration of a corporation should be filed took effect only on October 29, 1989 (See Section 2[c], Rule XX). To require the specified body to take over the adjudication after the case was ready for decision was improper and impractical. We take this occasion to reiterate our ruling on the validity of the delegation of the power to hold a hearing. In American Tobacco Company v. Director of Patents, 67 SCRA 287 (1975); where the authority of the Director of Patents to assign hearing officers to receive evidence was questioned, we ruled: Thus it is well-settled that while the power resides solely in the administrative agency vested by law, this does not preclude a delegation of the power to hold a hearing on the basis of which the decision of the administrative agency will be made.

The rule that requires an administrative officer to exercise his own judgment and discretion does not preclude him from utilizing, as a matter of practical administrative procedure, the aid of subordinates to investigate and report to him the facts, on the basis of which the officer makes his decisions. It is sufficient that the judgment and discretion finally exercised are those of the officer authorized by law. xxx xxx xxx In the case at bar, while the hearing officer may make preliminary rulings on the myriad of questions raised at the hearings of these cases, the ultimate decision on the merits of all the issues and questions involved is left to the Director of Patents. (Emphasis supplied, at pp. 295-296). The provisions of Pres. Decree No. 902-A as amended do not prohibit the respondent Commission from designating an officer or a division to hear a case. The Court reiterates that in the absence in the then rules of the Commission of a provision designating a particular officer or department that should try a particular action, the Commission can validly call upon any of its qualified departments to try a particular action, including the PED to hear and make a preliminary ruling on the case. This was what the Commission did to meet the demands of orderly and responsible administration of all the tasks assigned to it as a government agency. The reduction of existing delays in regulating agencies requires the elimination of needless work at top levels. Unnecessary and unimportant details often occupy far too much of the time and energy of the heads of these agencies and prevent full and expeditious consideration of the more important issues. The remedy is a far wider range of delegations to subordinate officers. The subdelegation of power has been justified by "sound principles of organization" which demand that "those at the top be able to concentrate their attention upon the larger and more important questions of policy and practice; and their time be freed, so far as possible, from the consideration of the smaller and far less important matters of detail." (American Tobacco Co. v. Director of Patents, supra, at page 293-294). The Commission can not also be faulted for approving the PED resolution without the knowledge of the petitioner. The parties do not participate in the deliberation and decision making process. They are not supposed to be present when the SEC deliberates and votes on the action to be taken. Notice is given after the decision is promulgated but not before the Board sits down to act on cases already heard and awaiting resolution. In the present case, it was the Commission for whom the PED acted in gathering data in the consolidated cases. The delegation made to the PED was done in accordance with law and the resulting recommendation was arrived at after notice and hearing. The subsequent approval by the Commission, en banc was the ultimate exercise of judgment of the Commission. Contrary to the allegation of the petitioner, the approval by the Commission, en banc was regular and valid for having been done in the exercise of its original jurisdiction on a case involving the right of each of the party corporations to exist as an entity (Section 5, Pres. Decree No. 902-A as amended). In view of these, it was also proper for the commission to have treated the appeal of the petitioner as a motion for reconsideration. In doing so, no right of the petitioner to due process was violated. The Court finds no grave abuse of discretion committed by the Commission in deciding in that manner. The Commission properly made a thorough study of the facts presented by the opposing

parties, and exhaustively explained its reasons for sustaining its decision to revoke the certificate of registration of the SCOAI. A reading of the order in SEC-AC No. 297 dated September 14, 1990 reveals that its findings are supported by substantial evidence and justified by the relevant laws and jurisprudence. The Court, thus, upholds the finding of the Commission that the indispensable requirement that all incorporators of a condominium corporation must be shareholders thereof was not satisfactorily complied with by the petitioner at the time a certificate of registration was applied for. (Section 5, Corporation Code of the Philippines [Batas Pambansa Blg. 68]; Section 10, Condominium Act [Rep. Act. 4726]. To be a shareholder, one must necessarily be an owner of a condominium unit. (Sunset View Condominium Corporation v. Campos, Jr., 104 SCRA 295 [1981]). In the case at bar, it was found by the SEC that only one, Angel Bautista, was considered to be an owner of a unit in the Skyworld Condominium at the time of incorporation. (Rollo, p. 32) The Master Deed with Declaration of Restrictions in its section 8 provides that a condominium corporation should be organized by a developer "pursuant to the provisions of the Condominium Act and of the Corporation Code as amended for the purpose of holding files to all common areas and managing the project." (See Rollo, p. 158). The Court likewise confirms the analysis of the respondent Commission that petitioner SCOAI was barred by estoppel from repudiating the resulting adverse decision after it had voluntarily submitted to the jurisdiction of the hearing officer in settling the issue of revocation. (Tijam v. Sibonghanoy, 23 SCRA 29 [1968]; Baaga v. Commission on the Settlement of Land Problems, 181 SCRA 599 [1990]; Sapugay v. Court of Appeals, 183 SCRA 464 [1990]; 166 SCRA 657 [1988]; Maersk-Tabacalera Shipping Agency (Filipinas), Inc. v. Court of Appeals, 187 SCRA 646 [1990]; Marquez v. Secretary of Labor, 171 SCRA 337 (1989]). The contentions that the private respondent BSCC and the CBC were engaged in forum-shopping and that the prosecution of the SEC consolidated cases was barred by res judicata deserve scant consideration. Suffice it to state that the actions before the courts commonly involved prayers for restraint and/or injunction against SCOAI. The petitions did not seek an administrative inquiry on revocation of a certificate of registration. The pertinent issue in the case at bar is one that is more appropriately dealt with by an administrative agency such as the SEC. Hence, even if the courts did touch on the right of a corporation (SCOAI) to exist and to exercise prerogatives as such, the court decisions would not bind the parties as to prevent a recourse before the SEC. The Court finds this petition to be part of a dilatory attempt to stall the execution of the order revoking and cancelling the certificate of registration of the Skyworld Condominium Owners Association, Inc. That petitioner seeks a re-examination of the facts is evident from its arguments. It is unfortunate for it that courts do not grant a judicial review much less a factual inquiry absent any showing of arbitrary action or manifest and grievous error on the part of administrative agencies regarding the determination of facts and interpretation of laws which they are entrusted to enforce (Blue Bar Coconut Philippines V. Tantuico, Jr., 163 SCRA 716 [1988]; Beautifont, Inc. v. Court of Appeals, 157 SCRA 481 [1988]; Maximo v. Court of Appeals, 182 SCRA 420 [1990]). We have further held that: The legal presumption is that official duty has been duly performed (Section 5, m, Rule 131, Rules of Court); and it is "particularly strong as regards administrative agencies . . . vested with powers said to be quasi-judicial in nature, in connection with the enforcement of laws affecting particular fields of activity, the proper regulation and/or promotion of which requires a technical or special training, aside from a good knowledge and grasp of the overall conditions, relevant to said field obtaining in the nation" [Pangasinan Transportation v. Public Utility Commission, 70 Phil. 221]. (Beautifont, Inc. v Court of Appeals, at p. 493).

The Court sustains the decision of the respondent Commission dated December 12, 1989 and the Order dated September 14, 1990 denying the motion for reconsideration since no jurisdictional flaw has been found to justify a reversal. WHEREFORE, the petition is hereby DISMISSED for lack of grave abuse of discretion committed by the public respondent. The Order revoking and cancelling the certificate of registration of petitioner corporation is AFFIRMED. G.R. No. 2426 January 24, 1906

FERNANDO MONTAO LOPEZ, plaintiff-appellee, vs. PEDRO MARTINEZ ILUSTRE, defendant-appellant. . On the 26th day of December, 1902, Francisco Martinez and the defendant, Pedro Martinez, his son, were the owners as tenants in common of two separate parcels of land in Calle Dulumbayan, in the city of Manila, each being the owner of an undivided one-half of each of said tracts of land. On the 26th day of December, 1902, Francisco Martinez conveyed to the plaintiff his undivided half interest in both said tracts of land. This deed contained a clause giving Martinez the right to repurchase the property within one year from December 26, 1902. He did not repurchase it, and on the 28th of December, 1903, the plaintiff caused the proper marginal entry to be made upon the books in the registry of property in which registry the conveyance had been recorded, and afterwards brought this action in March, 1904, asking for a partition of the two lots of land, between himself and the defendant, and that defendant account for and pay to the plaintiff his part of the rents of the said properties from the 26th day of December, 1903. It appeared that Francisco Martinez and the defendant, his son, were the owners as tenants in common of twenty-six other parcels of land; that in June, 1903, before the expiration of the year in which Francisco Martinez had the right to repurchase the property so conveyed to the plaintiff, he and the defendant, his son, made a voluntary partition of these twenty-eight tracts of land, which partition was approved by the Court of First Instance of manila on the 15th day of June, 1903. These twenty-eight tracts of land had been acquired by Francisco Martinez during his marriage with his wife, Doa Germana Ilustre. The wife having died, her estate was in process of administration in the Court of First Instance of Manila, and the partition above mentioned was made on the theory that these lands were the property of the conjugal partnership existing between Francisco Martinez and his wife. In this partition the two parcels of land in question in this case fell to the defendant, and his claim is that by this partition plaintiff lost all his interest in the property. Judgment was entered in the court below in favor of plaintiff as prayed for in his complaint, and the defendant has brought the case here by bill of exceptions. Article 399 of the Civil Code is as follows: Every coowner shall have full ownership of his part and in the fruits and benefits derived therefrom, and he therefore may alienate, assign, or mortgage it, and even substitute another person in its enjoyment, unless personal rights are in question. But the effect of the alienation or mortgage, with regard to the coowners, shall be limited to the share which may be awarded him in the division on the dissolution of the community. This article gives the owner of an undivided interest in the property the right to freely sell and dispose of it that is, of his undivided interest. he has no right to sell a divided part of the real estate. If he is the owner of an undivided half of a tract of land, he has a right to sell and convey an undivided half, but he has no right to divide the lot into two parts, and convey the whole of one part

by metes and bounds. All that Francisco Martinez undertook to do in this case was to convey his undivided interest in these two properties. This he had a perfect right to do, in accordance with the terms of said article. There is nothing in the last clause of the article inconsistent with this position. That declares simply that when the property is divided the purchaser gets an interest only in that part which may be assigned to him. For the purposes of this case we see no difference between it and a case in which the tenant in common makes an absolute conveyance of his undivided interest in the property, without reserving the right to repurchase. In the case of an absolute conveyance of that character, the relation between the grantor in the deed and his cotenant is terminated. They are no longer cotenants. The grantee in the deed takes the place of the grantor, and he and the other owner of the property become cotenants. In such a case the grantor loses all interest in the property, and of course has no right to take any part in the partition of it. It would be absurd to say that after such conveyance the grantor, who had lost all his interest in the property, could by agreement with the other owner make a partition of property in which he had no interest that would be binding upon his grantee. We do not see how the fact that Francisco Martinez and his son were the owners of other pieces of property as tenants in common can affect the question presented in this case. Each tract was separate and distinct from all the others. The parties had a right to deal with one lot without any reference to the other twenty-seven. The fact that the defendant acquired title to all of them by inheritance from his mother did not make them physically one tract of land, so that a conveyance by the son of his undivided half interest in one of these lots would amount to a conveyance of a divided part of a tract of land held by him in common with this father. The judgment of the court below is affirmed, with the costs of this instance against the appellant, and after the expiration of twenty days judgment should be entered in accordance herewith and the case remanded to the court below for execution. So ordered. G.R. No. L-14429 June 30, 1962

RAMON MERCADO, BASILIA MERCADO joined by her husband, FRANCISCO RONQUILLO, plaintiffs-appellants, vs. PIO D. LIWANAG, defendant-appellee. The present appeal, taken by the plaintiff from the decision of the Court of First Instance of Rizal (Quezon City), is before us on a certification by the Court of Appeals, the questions involved being purely legal. The case was submitted to the trial court upon the following stipulation of facts: 1. That the complaint filed by the plaintiffs against the defendant seeks to annul a Deed of Sale on the ground of fraud and on the provisions of Article 493 of the Civil Code. 2. That on July 14, 1956, in the City of Manila, Philippines, the plaintiff Ramon Mercado and the defendant Pio D. Liwanag executed a Deed of Sale, photostat copy of which is attached hereto marked as Annex "A" and forming an integral hereof, covering a divided half and described in meter and bounds, or an area of 2,196 square meters at P7.00 per square meter or for a total amount of P15,372.00, of a parcel of land situated at Kangkong, Quezon City, covered Transfer Certificate of Title No. 20805 of the Register of Deeds for the province of Rizal, now Quezon City: 3. That the said T.C.T. No. 20805 containing an area of 4,392 square meters, is issued in the name of the plaintiffs Ramon Mercado and Basilia Mercado as co-owners PROINDIVISO, and the sale was without the knowledge and consent of plaintiff Basilia Mercado;

4. That out of the total area of 4,392 square meters, an area consisting of 391 square meters was expropriated by the National Power Corporation sometime in December 1953 at a price of P10.00 per square meter, Civil Case No. Q-829 (Eminent Domain) of the Court of First Instance of Rizal, Quezon City Branch, entitled "National Power Corporation, plaintiff, versus Brigido Almodoban, et als., defendants," but this fact of expropriation came to the knowledge of the defendant Pio D. Liwanag upon the registration of the Deed of Sale Annex "A". . 5. That pursuant to the Deed of Sale Annex "A" T.C.T. No. 32757 was issued in the name of Pio Liwanag and Basilia photostat copy of which is hereto attached and marked as Annex "B". 6. That defendant submits the receipt signed by plaintiff Ramon Mercado dated July 14, 1956 photostat copy of which is attached hereto and marked as Annex "C" and promissory note of the same date for P10,000.00, photostat copy of which is attached hereto and marked is Annex "D" which are both self-explanatory, but plaintiff Ramon Mercado disclaims payment and receipt of such check and promissory note, the check being uncashed and is still in the possession of Atty. Eugenio de Garcia; 7. That plaintiffs and defendant respectfully submit for resolution of this Honorable Court the issue of whether or not the Deed of Sale Annex "A" court be annulled based in the foregoing facts in relation to Article 493 of the Civil Code, setting aside all other issues in the pleadings. Upon the issue thus presented the trial court held that under Article 493 of the Civil Code the sale in question was valid and so dismissed the complaint, without costs. This ruling is now assailed as erroneous. Article 493 provides: Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be alloted to him in the division upon the termination of the coownership. Appellants except to the application of this provision in this case for the reason that in the deed of sale sought to be annulled the vendor disposed of a divided and determinate half of the land under co-ownership. The argument, as far as it goes, seems to be tenable. What a co-owner may dispose of under Article 493 is only his undivided aliquot share, which shall be limited to the portion which may be allotted to him upon the termination of the co-ownership. He has no right to divide the property into parts and then convey one part by metes and bounds. Lopez vs. Ilustre, 5 Phil. 567; Gonzales, et al. vs. Itchon, et al., 47 O.G. 6290; Manresa, Vol. 3, 7th ed. p. 630. The pertinent recitals in the disputed deed of sale read: I hereby sell, transfer and convey absolutely and irrevocably unto said Pio D. Liwanag, his heirs, successors, and assigns my rights, title and interest on my chosen portion of the above described property which consist of one-half of aforesaid ownership bounded on the West by Pacifico Gahudo, on the North by Hacienda de Piedad and on the South by Circumferential Road, consisting of 50 meters more or less frontal length along Circumferential Road, and with a total area of 2,196 square meters as indicated in Coowners Transfer Certificate of Title No. 20805.

Nevertheless, upon registration of the sale and cancellation of transfer certificate of title No. 20805 in the names of the previous co-owners, the new transfer certificate that was issued (No. 32757) did not reproduce the description in the instrument but carried the names of appellee Pio D. Liwanag and Basilia Mercado as "co-owners pro-indiviso." There is no suggestion by any of the parties that this new certificate of title is invalid, irregular or inaccurate. There is no prayer that it be canceled. As far as Basilia Mercado is concerned she retains in all their integrity her rights as coowner which she had before the sale, and consequently, she has no cause to complain. Much less has Ramon Mercado, for it was he who was responsible for whatever indicia there may be in the deed of sale that a determinate portion of the property was being sold, as shown by the second paragraph thereof, quoted without contradiction in appellee's brief as follows: That the aforesaid Transfer Certificate of Title was originally in my name, but was split into two equal parts by virtue of my desire to donate to my sister-in-law Juana Gregorio an equal half thereof with the understanding that I as donor would have the absolute power to choose from the property owned in common that part which I would like to segregate for myself or my heir and assigns. And of course appellee himself not only does not challenge the new certificate of title, wherein he appears as co-owner of an undivided one-half share, but precisely relies upon it for his defense in this action. The title is the final and conclusive repository of the rights of the new co-owners. The question of whether or not the deed of sale should be annulled must be considered in conjunction with the title issued pursuant thereto. Since, according to this title, what appellee acquired by virtue of the sale is only an undivided half-share of the property, which under the law the vendor Ramon Mercado had the absolute right to dispose of, the trial court committed no error in dismissing the action. The endresult of the transaction is in accordance with Article 493 of the Civil Code. The other point raised by appellants refers to the statement in the dispositive portion of the decision appealed from that "the stipulation with regards to the deed of sale based on the ground of fraud is insufficient for all purposes and besides, no proof showing the allegation of such fraud exists in the accord." It is contended that the trial court erred in making such statement, the same being contrary to the stipulation in which the parties expressly eliminated the issue of fraud. From the entire context of the decision, however, it can be gathered that the case was not decided on the basis of the said issue. In any event, even if the court did err in considering the question of fraud in spite of the stipulation, the error is not a prejudicial one. As far as the dismissal of the actions concerned, it makes no difference whether fraud has not been proven or fraud has been abandoned as an issue by express agreement. WHEREFORE, the decision appealed from is affirmed, with costs against appellants in this instance.