SECOND DIVISION

[G.R. No. 106401. September 29, 2000.]

SPOUSES FLORENTINO ZARAGOZA and ERLINDA ENRIQUE

ZARAGOZA, petitioners, vs. THE HONORABLE COURT OF
APPEALS, ALBERTA ZARAGOZA MORGAN, respondents.

Ermitaño Sangco Manzano and Associates for petitioners.

Cirilo T. Ganzon, Jr. and Clara Aligen for private respondent.

SYNOPSIS

Flavio Zaragoza Cano was the registered owner of certain parcels of land
situated in the Province of Iloilo. He had four children. On December 9, 1964,
he died without a will and was survived by his four children. His youngest
daughter, Alberta Zaragoza-Morgan, filed a complaint against her brother
Florentino and his wife Erlinda for the delivery of her inheritance share,
consisting of Lots 943 and 871, and for payment of damages. She alleged that
during the lifetime of her father, he partitioned the properties among his four
children. The shares of his brothers and sisters were given in advance by way
of deed of sale, without valid consideration. At that time she became an
American citizen by marriage, hence, she was prohibited to acquire land in the
Philippines except by hereditary succession. No formal deed of conveyance,
therefore, was executed in her favor covering the lots in question during the
lifetime of her father. Petitioners herein, Florentino and Erlinda, claimed that
Lot No. 943 was sold to them by their father for valuable consideration, while
Lot No. 871 was still registered in their father's name. They denied partitioning
the estate during the lifetime of their father. Petitioners filed a motion to
dismiss on the ground that the complaint did not state any cause of action and
it failed to implead indispensable parties. The trial court adjudicated Lot No.
871 in the name of Flavio Zaragoza Cano to Alberta Zaragoza-Morgan as
appertaining to her share in the estate, while her claim against Lot 943 was
dismissed. Both parties interposed an appeal in the Court of Appeals. The Court
of Appeals reversed the decision of the trial court in so far as spouses
Florentino and Erlinda Zaragoza were adjudged owner of Lot 943, while it
affirmed the decision in all other respects. Hence, this petition.

The Supreme Court granted the present petition. The decision of the Court
of Appeals was vacated and the complaint for delivery of inheritance share in
the trial court was dismissed for failure to implead indispensable parties.
According to the Supreme Court, partition during the lifetime of the decedent
Flavio Zaragoza Cano may be done for as long as legitimes are not prejudiced.
Legitime may be determined after collation. However, in this case collation
cannot be done because only one of the indispensable parties was impleaded.
As to the issue of the validity of title, such issue can only be raised in an action
expressly instituted for that purpose.
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 SYLLABUS

1. CIVIL LAW; SUCCESSION; PARTITION INTER VIVOS; MAY BE DONE SO

LONG AS LEGITIMES ARE NOT PREJUDICED; LEGITIME IS DETERMINED AFTER
COLLATION; NOT APPLICABLE IN CASE AT BAR. — It is basic in the law of
succession that a partition inter vivos may be done for as long as legitimes are
not prejudiced. Art. 1080 of the Civil Code is clear on this. The legitime of
compulsory heirs is determined after collation, as provided for in Article 1061:
Every compulsory heir, who succeeds with other compulsory heirs, must bring
into the mass of the estate any property or right which he may have received
from the decedent, during the lifetime of the latter, by way of donation, or any
other gratuitous title in order that it may be computed in the determination of
the legitime of each heir, and in the account of the partition. Unfortunately,
collation can not be done in this case where the original petition for delivery of
inheritance share only impleaded one of the other compulsory heirs. The
petition must therefore be dismissed without prejudice to the institution of a
new proceeding where all the indispensable parties are present for the rightful
determination of their respective legitime and if the legitimes were prejudiced
by the partitioning inter vivos. SDHITE

2. ID.; LAND REGISTRATION; PROPERTY REGISTRATION DECREE; PETITION

FOR THE DELIVERY OF INHERITANCE SHARE; CANNOT COLLATERALLY ATTACK
THE VALIDITY OF A REGISTERED TITLE; CASE AT BAR. — Private respondent, in
submitting her petition for the delivery of inheritance share, was in effect
questioning the validity of the deed of sale covering Lot 943 in favor of
petitioner and consequently, the Transfer Certificate of Title issued in the
latter's name. Could this be done? The petition is a collateral attack. It is not
allowed by Sec. 48 of the Presidential Decree No. 1529, otherwise known as the
Property Registration Decree, which provides: Sec. 48. Certificate not subject to
Collateral attack. — A certificate of title shall not be subject to collateral attack.
It can not be altered, modified, or cancelled except in a direct proceeding in
accordance with law. The Court has reiterated this rule in the case of Halili vs.
Court of Industrial Relations , 257 SCRA 174, 184 (1996), citing the earlier cases
o f Constantino vs. Espiritu, 45 SCRA 557, 562 (1972), and Co vs. Court of
Appeals. [196 SCRA 705, 711 (1991)] In Halili, it was held that a certificate of
title accumulates in one document a precise and correct statement of the exact
status of the fee held by its owner. The certificate, in the absence of fraud, is
the evidence of title and shows exactly the real interest of its owner. The title
once registered, with very few exceptions, should not thereafter be impugned,
altered, changed, modified, enlarged or diminished, except in some direct
proceeding permitted by law. Otherwise, all security in registered titles would
be lost. In Constantino, the Court decided that the certificate, in the absence of
fraud, is the evidence of title and shows exactly the real interest of its owner.
The title once registered, with very few exceptions, should not thereafter be
impugned, altered, changed, modified, enlarged or diminished, except in some
direct proceeding permitted by law. Otherwise all security in registered titles
would be lost. And in Co, it was stated that a Torrens title cannot be collaterally
attacked. The issue on the validity of title, i.e., whether or not it was
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 fraudulently issued, can only be raised in an action expressly instituted for that
purpose.

DECISION

QUISUMBING, J : p

Before the Court is a petition for review on certiorari, which seeks (1) the
reversal of the decision 1 of the Court of Appeals promulgated on March 27,
1992 in CA-G.R. CV No. 12587, which affirmed the decision 2 of the Regional
Trial Court in Civil Case No. 14178, except the dismissal of private respondent's
claim over lot 943; (2) the dismissal of the complaint filed by private
respondent in the Regional Trial Court of Iloilo; and (3) the declaration of the
deed of sale executed by Flavio Zaragoza covering Lot 943 as valid.
The facts of the case as found by the Court of Appeals and on record are
as follows:
Flavio Zaragoza Cano was the registered owner of certain parcels of land
situated at the Municipalities of Cabatuan, New Lucena and Sta. Barbara,
Province of Iloilo. He had four children: Gloria, Zacariaz, Florentino and Alberta,
all surnamed Zaragoza. On December 9, 1964, he died without a will and was
survived by his four children.
On December 28, 1981, private respondent Alberta Zaragoza-Morgan filed
a complaint with the Court of First Instance of Iloilo against Spouses Florentino
and Erlinda, herein petitioners, for delivery of her inheritance share, consisting
of Lots 943 and 871, and for payment of damages. She claims that she is a
natural born Filipino citizen and the youngest child of the late Flavio. She
further alleged that her father, in his lifetime, partitioned the aforecited
properties among his four children. The shares of her brothers and sister were
given to them in advance by way of deed of sale, but without valid
consideration, while her share, which consists of lots no. 871 and 943, was not
conveyed by way of deed of sale then. She averred that because of her
marriage, she became an American citizen and was prohibited to acquire lands
in the Philippines except by hereditary succession. For this reason, no formal
deed of conveyance was executed in her favor covering these lots during her
father's lifetime.

Petitioners, in their Answer, admitted their affinity with private respondent

and the allegations on the properties of their father. They, however, denied
knowledge of an alleged distribution by way of deeds of sale to them by their
father. They said that lot 871 is still registered in their father's name, while lot
943 was sold by him to them for a valuable consideration. They denied
knowledge of the alleged intention of their father to convey the cited lots to
Alberta, much more, the reason for his failure to do so because she became an
American citizen. They denied that there was partitioning of the estate of their
father during his lifetime.
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 On November 23, 1983, petitioners filed a Motion to Dismiss, on the
ground that the complaint did not state a cause of action and it failed to
implead indispensable parties. The resolution of said Motion was deferred by
the lower court until the case was tried on the merits.
On October 7, 1986, the Regional Trial Court of Iloilo promulgated its
decision, the decretal portion of which reads: acCETD

WHEREFORE, in view of the above findings, judgment is hereby

rendered, adjudicating Lot 871 in the name of Flavio Zaragoza Cano to
plaintiff Alberta Zaragoza-Morgan as appertaining her share in his
estate and ordering defendants to vacate its premises and deliver
immediately the portion occupied by them to herein plaintiff. Plaintiff's
claim against defendants over Lot 943 is dismissed as well as claims
for damages interposed against each other. 3

In the above decision, the RTC found that Flavio partitioned his properties
during his lifetime among his three children by deeds of sales; that the
conveyance of Lot 943 to petitioners was part of his plan to distribute his
properties among his children during his lifetime; and that he intended Lot 871
to be the share of private respondent. 4

Not satisfied with the above decision, both parties interposed an appeal in
the Court of Appeals docketed as CA-GR CV No. 12587.

On March 27, 1992, respondent court rendered the assailed decision, the
decretal portion of which reads:
WHEREFORE, WE reverse the decision appealed from, insofar as
defendant-appellants, spouses Florentino Zaragoza and Erlinda E.
Zaragoza, were adjudged owner of Lot 943. In all other respects, the
decision appealed from is hereby AFFIRMED. 5

The appellate court gave weight to the testimonial and documentary

evidence presented by private respondent to support its finding that Lots 871
and 943 were inheritance share of private respondent. Specifically, it noted the
admission by petitioner in his letter in 1981 to private respondent's counsel,
that their father had given them their inheritance. 6 Further, public respondent
found that the alleged sale of lot 943 in favor of petitioner Florentino was
fictitious and void. The signature of Don Flavio in the said document was
markedly different from his other signatures appearing in other documents he
signed from January to February 1957. 7

The Motion for Reconsideration was denied in a Resolution 8 dated June

26, 1992.
Hence, this petition for review on certiorari, 9 with a supplemental
petition, raising the following assigned errors:
A. THE COURT OF APPEALS ERRED IN HOLDING THAT LOTS 871 AND
943 ARE THE INHERITANCE SHARE OF THE PRIVATE
RESPONDENT NOTWITHSTANDING THE FACT THAT THE
DECEDENT FLAVIO ZARAGOZA HAS NOT EXECUTED ANY WILL
NOR ANY DOCUMENT GIVING THESE TWO PROPERTIES IN FAVOR
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 OF PRIVATE RESPONDENT;
B. THE COURT OF APPEALS ERRED IN ADMITTING AND GIVING WEIGHT
TO THE TESTIMONIES OF PRIVATE RESPONDENT'S WITNESSES TO
THE EFFECT THAT LOTS 871 AND 943 ARE THE INHERITANCE
SHARE OF PRIVATE RESPONDENT AS TOLD TO THEM BY FLAVIO
ZARAGOZA DESPITE THE FACT THAT THESE TESTIMONIES ARE
HEARSAY;

C. THE COURT OF APPEALS ERRED IN CONCLUDING THAT THE DEED OF

SALE EXECUTED BY FLAVIO ZARAGOZA IN FAVOR OF PETITIONER
OVER LOT 943 IS A FORGERY, NOTWITHSTANDING THE FACT
THAT:
1. THE THEORY THAT THE AFORESAID DEED OF SALE WAS A
FORGERY WAS NEVER RAISED IN THE COMPLAINT NOR
ESTABLISHED BY EVIDENCE.

2. THE SAID DEED OF SALE WAS IN A PUBLIC INSTRUMENT.

3. NO WITNESSES WAS EVER PRESENTED TO ASSAIL THE
GENUINENESS OF THE SIGNATURE OF FLAVIO ZARAGOZA.
4. THE SAID DEED OF SALE WAS EVEN WITNESSED BY HIS OTHER
DAUGHTER GLORIA ZARAGOZA NUÑEZ AND NOTARIZED BY
NOTARY PUBLIC ATTY. EDURESE.
D. RESPONDENT COURT OF APPEALS ERRED IN MODIFYING THE
DECISION OF THE LOWER COURT WITH RESPECT TO LOT 943
WHEN THE LATTER SUSTAINED THE GENUINENESS OF THE
SIGNATURE OF PETITIONER'S FATHER FOUND IN EXH. I. HSIDTE

E. THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF

ESTOPPEL, IGNORING THE FACT THAT IT IS THE LAW ON
INTESTATE SUCCESSION, AND THE CORRESPONDING RULES OF
COURT ON THE SETTLEMENT OF THE ESTATE THAT IS
APPLICABLE ON THIS CASE. 10

In their Supplemental Petition for Review dated October 29, 1992,

petitioners additionally raised:
I. THE HONORABLE COURT OF APPEALS ERRED IN NOT DISMISSING THE
COMPLAINT FILED BEFORE THE TRIAL COURT FOR FAILURE TO
STATE A CAUSE OF ACTION,

II. ALTERNATIVELY, THE COURT ERRED IN NOT CONSIDERING THAT

LOTS TRANSFERRED INTER VIVOS TO THE OTHER HEIRS SHOULD
HAVE BEEN COLLATED TO THE MASS OF THE ESTATE OF THE
DECEASED FLAVIO ZARAGOZA (y) CANO.
III. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING AS
LAWFUL AND VALID ALL THE DISPOSITIONS MADE BY THE
DECEASED FLAVIO ZARAGOZA (y) CANO EXCEPT LOT # 943
DESPITE UTTER LACK OF EVIDENCE TO SUPPORT ITS FINDING
THAT THE SIGNATURE OF THE LATE FLAVIO ZARAGOZA (y) CANO
IN EXH. "M-11-A" APPEARING IN THE DEED OF SALE DATED
FEBRUARY 5, 1957 (EXH. "1", FLORENTINO) WAS A FORGERY.
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 IV. THE COURT ERRED IN NOT CONSIDERING THAT TRANSFER
CERTIFICATE OF TITLE NO. T-35946 (EXHIBIT 2) COVERING LOT
943 IN FAVOR OF THE PETITIONER CONCLUSIVELY EVIDENCES
THE LATTER'S OWNERSHIP THEREOF. 11

Essentially, we are asked to resolve two issues: (1) whether the partition
inter vivos by Flavio Zaragoza Cano of his properties, which include Lots 871
and 943, is valid; and (2) whether the validity of the Deed of Sale and
consequently, the Transfer Certificate of Title over Lot 943 registered in the
name of the petitioners, can be a valid subject matter of the entire proceeding
for the delivery of inheritance share.
On the first issue. It is the main contention of the petitioner that the
adjudication of Lots 943 and 871 in favor of private respondent, as her
inheritance share, has no legal basis since there is no will nor any document
that will support the transfer.
Both the trial court and the public respondent found that during the
lifetime of Flavio, he already partitioned and distributed his properties among
his three children, excepting private respondent, through deeds of sale. A deed
of sale was not executed in favor of private respondent because she had
become an American citizen and the Constitution prohibited a sale in her favor.
Petitioner admitted Lots 871 and 943 were inheritance shares of the private
respondent. These are factual determinations of the Court of Appeals, based on
documentary and testimonial evidence. As a rule, we are bound by findings of
facts of the Court of Appeals. 12

Was the partition done during the lifetime of Flavio Zaragoza Cano valid?
We think so. It is basic in the law of succession that a partition inter vivos may
be done for as long as legitimes are not prejudiced. Art. 1080 of the Civil Code
is clear on this. 13 The legitime of compulsory heirs is determined after
collation, as provided for in Article 1061:
Every compulsory heir, who succeeds with other compulsory
heirs, must bring into the mass of the estate any property or right
which he may have received from the decedent, during the lifetime of
the latter, by way of donation, or any other gratuitous title in order that
it may be computed in the determination of the legitime of each heir,
and in the account of the partition.

Unfortunately, collation can not be done in this case where the original
petition for delivery of inheritance share only impleaded one of the other
compulsory heirs. The petition must therefore be dismissed without prejudice
to the institution of a new proceeding where all the indispensable parties are
present for the rightful determination of their respective legitime and if the
legitimes were prejudiced by the partitioning inter vivos.
We now come to the second issue. Private respondent, in submitting her
petition for the delivery of inheritance share, was in effect questioning the
validity of the deed of sale covering Lot 943 in favor of petitioner and
consequently, the Transfer Certificate of Title issued in the latter's name.
Although the trial court, as an obiter, made a finding of validity of the
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 conveyance of Lot 943 in favor of petitioners, since according to it, private
respondent did not question the genuineness of the signature of the deceased,
nevertheless, when the case was elevated to the Court of Appeals, the latter
declared the sale to be fictitious because of finding of marked differences in the
signature of Flavio in the Deed of Sale vis-a-vis signatures found in earlier
documents. Could this be done? The petition is a collateral attack. It is not
allowed by Sec. 48 of the Presidential Decree No. 1529, otherwise known as the
Property Registration Decree, which provides: DcCHTa

SECTION 48. Certificate not subject to collateral attack. — A

certificate of title shall not be subject to collateral attack. It can not be
altered, modified, or cancelled except in a direct proceeding in
accordance with law.

We have reiterated this rule in the case of Halili vs. Court of Industrial
Relations, 14 citing the earlier cases of Constantino vs. Espiritu, 15 and Co vs.
Court of Appeals, 16 I n Halili, we held that a certificate of title accumulates in
one document a precise and correct statement of the exact status of the fee
held by its owner. The certificate, in the absence of fraud, is the evidence of
title and shows exactly the real interest of its owner. The title once registered,
with very few exceptions, should not thereafter be impugned, altered, changed,
modified, enlarged or diminished, except in some direct proceeding permitted
by law. Otherwise, all security in registered titles would be lost. In Constantino,
the Court decided that the certificate, in the absence of fraud, is the evidence
of title and shows exactly the real interest of its owner. The title once
registered, with very few exceptions, should not thereafter be impugned,
altered, changed, modified, enlarged or diminished, except in some direct
proceeding permitted by law. Otherwise all security in registered titles would be
lost. And in Co, we stated that a Torrens title cannot be collaterally attacked.
The issue on the validity of title, i.e., whether or not it was fraudulently issued,
can only be raised in an action expressly instituted for that purpose.

ACCORDINGLY, judgment is hereby rendered GRANTING the instant

petition for review. The decision of the Court of Appeals dated March 27, 1992
in CA-G.R. CV No. 12587, entitled Alberta Zaragoza-Morgan vs. Spouses
Florentino Zaragoza and Erlinda Enriquez-Zaragoza is VACATED and SET ASIDE.
The complaint for delivery of inheritance share in the Regional Trial Court, for
failure to implead indispensable parties, is also DISMISSED without prejudice to
the institution of the proper proceedings.

No pronouncement as to costs.
SO ORDERED.
Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.

Footnotes
1. CA Records, pp. 49-60.
2. Id., at 29.
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 3. Rollo , p. 116.
4. Id., at 115.

5. CA Records, p. 59.
6. Id., at 58-59.
7. Ibid.
8. Id., at 107.
9. Rollo , pp. 16-64.

10. Id. at 17-18.

11. Id. at 133.
12. Atillo III v. Court of Appeals, 266 SCRA 596, 605-606 (1997).
13. NCC, Art. 1080: Should a person make a partition of his estate by an act inter
vivos, or by will, such partition shall be respected, insofar as it does not
prejudice the legitime of the compulsory heirs.
14. 257 SCRA 174, 184 (1996).
15. 45 SCRA 557, 562 (1972).
16. 196 SCRA 705, 711 (1991).

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