~epublic

of tbe flbihppine~
$upreme QCourt
~aguio

QCitp

THIRD DIVISION

REY
CASTIGADOR
CATEDRILLA,
Petitioner,

-versus-

G.R. No. 179011

Present:

VELASCO, JR., J., Chairperson,

PERALTA,
ABAD,
MENDOZA, and
LEONEN,JJ.

MARIO
and
MARGIE 1
Promulgated:
LAURON,
Respondents.
APR t 5 2013 /iffcvrnrA?J~
X -------------------------------.:.---------------------------------------r-~p.:__ X

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari is the Decision2 dated

February 28, 2007 of the Court of Appeals ((A) in CA-G.R. SP No. 00939,
as well as its Resolution3 dated July 11, 2007 which denied petitioner's
motion for reconsideration.
On February 12, 2003, petitioner Rey Castigador Catedrilla filed with
4
the Municipal Trial Court (MTC) of Lambunao, Iloilo a Complaint for
ejectment against the spouses Mario and Margie Lauron alleging as follows:
that Lorenza Lizada is the owner of a parcel of land known as Lot 183,
located in Mabini Street, Lambunao, Iloilo, which was declared for taxation

Sometimes spelled as Mergie in some pleadings.

Penned by Associate Justice Pampio A. Abarintos, with Associate Justices Antonio L. Villamor and
Stephen C. Cruz, concurring; rolla, pp. 22-32.
3
/d.at21.
Docketed as Civil Case No. S !6, records, pp. 5-8.

Decision

-2-

G.R. No. 179011

purposes in her name under Tax Declaration No. 0363;5 that on February
13, 1972, Lorenza died and was succeeded to her properties by her sole heir
Jesusa Lizada Losaes, who was married to Hilarion Castigador
(Castigador); that the spouses Jesusa and Hilarion Castigador had a number
of children, which included Lilia Castigador (Lilia), who was married to
Maximo Catedrilla (Maximo); that after the death of the spouses Castigador,
their heirs agreed among themselves to subdivide Lot 183 and, pursuant to a
consolidation subdivision plan6 dated January 21, 1984, the parcel of lot
denominated as Lot No. 5 therein was to be apportioned to the heirs of Lilia
since the latter already died on April 9, 1976; Lilia was succeeded by her
heirs, her husband Maximo and their children, one of whom is herein
petitioner; that petitioner filed the complaint as a co-owner of Lot No. 5; that
sometime in 1980, respondents Mario and Margie Lauron, through the
tolerance of the heirs of Lilia, constructed a residential building of strong
materials on the northwest portion of Lot No. 5 covering an area of one
hundred square meters; that the heirs of Lilia made various demands for
respondents to vacate the premises and even exerted earnest efforts to
compromise with them but the same was unavailing; and that petitioner
reiterated the demand on respondents to vacate the subject lot on January 15,
2003, but respondents continued to unlawfully withhold such possession.
In their Answer,7 respondents claimed that petitioner had no cause of
action against them, since they are not the owners of the residential building
standing on petitioner's lot, but Mildred Kascher (Mildred), sister of
respondent Margie, as shown by the tax declaration in Mildred's name;8 that
in 1992, Mildred had already paid P10,000.00 as downpayment for the
subject lot to Teresito Castigador;9 that there were several instances that the
heirs of Lilia offered the subject Lot 183 for sale to respondents and Mildred
and demanded payment, however, the latter was only interested in asking
money without any intention of delivering or registering the subject lot; that
in 1998, Maximo, petitioner's father, and respondent Margie entered into an
amicable settlement10 before the Barangay Lupon of Poblacion Ilawod,
Lambunao, Iloilo wherein Maximo offered the subject lot to the spouses
Alfons and Mildred Kascher in the amount of P90,000.00 with the
agreement that all documents related to the transfer of the subject lot to
Maximo and his children be prepared by Maximo, but the latter failed to
comply; and that the amicable settlement should have the force and effect of
a final judgment of a court, hence, the instant suit is barred by prior
judgment. Respondents counterclaimed for damages.

5
6
7
8
9
10

Rollo, p. 158.
Id. at 157.
Id. at 27-30.
Id. at 77.
Id. at 93.
Id. at 94.

Decision

-3-

G.R. No. 179011

On November 14, 2003, the MTC rendered its Decision,11 the

dispositive portion of which reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered
in favor of the plaintiff ordering the defendants:
1.
To vacate the lot in question and restore possession to the plaintiff;
2.
To pay plaintiff in the reduced amount of TWENTY THOUSAND
PESOS (P20,000.00) as Atty's fees, plus ONE THOUSAND (P1,000.00) per
Court appearance;
3.
To pay plaintiff reasonable compensation for the use of the lot in
question ONE THOUSAND (P1,000.00) pesos yearly counted from the date
of demand;
4.
To pay the cost of litigation.
No award of moral and exemplary damages.
Defendants' counterclaim is hereby dismissed for lack of sufficient
evidence.12

The MTC found that from the allegations and evidence presented, it
appeared that petitioner is one of the heirs of Lilia Castigador Catedrilla, the
owner of the subject lot and that respondents are occupying the subject lot;
that petitioner is a party who may bring the suit in accordance with Article
48713 of the Civil Code; and as a co-owner, petitioner is allowed to bring this
action for ejectment under Section 1, Rule 7014 of the Rules of Court; that
respondents are also the proper party to be sued as they are the occupants of
the subject lot which they do not own; and that the MTC assumed that the
house standing on the subject lot has been standing thereon even before
1992 and only upon the acquiescence of the petitioner and his predecessorin-interest.
The MTC found that respondents would like to focus their defense on
the ground that Mildred is an indispensable party, because she is the owner
of the residential building on the subject lot and that there was already a
perfected contract to sell between Mildred and Maximo because of an
amicable settlement executed before the Office of the Punong Barangay.
11

Per Judge Augusto L. Nobleza; rollo, pp. 137-142.

Id. at 142. (Citations omitted)
13
Art. 487. Anyone of the co-owners may bring an action in ejectment.
14
Rule 70. Forcible Entry and Unlawful Detainer
Section 1. Who may institute proceedings, and when. Subject to the provisions of the next
succeeding section, a person deprived of the possession of any land or building by force, intimidation,
threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any
land or building is unlawfully withheld after the expiration or termination of the right to hold possession,
by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor,
vendor, vendee, or other person, may, at any time within one (1) year after such unlawful deprivation or
withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons
unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the
restitution of such possession, together with damages and costs.
12

Decision

-4-

G.R. No. 179011

However, the MTC, without dealing on the validity of the document and its
interpretation, ruled that it was clear that respondent Margie was
representing her parents, Mr. and Mrs. Bienvenido Loraa, in the dispute
presented with the Punong Barangay. It also found that even Mildred's
letter to petitioner's father Maximo recognized the title of petitioner's father
over the subject lot and that it had not been established by respondents if
Teresito Castigador, the person who signed the receipt evidencing Mildred's
downpayment of P10,000.00 for the subject lot, is also one of the heirs of
Lilia. The MTC concluded that respondents could not be allowed to deflect
the consequences of their continued stay over the property, because it was
their very occupation of the property which is the object of petitioner's
complaint; that in an action for ejectment, the subject matter is material
possession or possession de facto over the real property, and the side issue
of ownership over the subject lot is tackled here only for the purpose of
determining who has the better right of possession which is to prove the
nature of possession; that possession of Lot 183 should be relinquished by
respondents to petitioner, who is a co-owner, without foreclosing other
remedies that may be availed upon by Mildred in the furtherance of her
supposed rights.
Respondents filed their appeal with the Regional Trial Court (RTC) of
Iloilo City, raffled off to Branch 26. On March 22, 2005, the RTC rendered
its Order,15 the dispositive portion of which reads:
WHEREFORE, circumstances herein-above considered, the
decision of the court dated November 14, 2003 is hereby AFFIRMED,
except for the payment of P20,000.00 as attorney's fees.
SO ORDERED.16

The RTC found that petitioner, being one of the co-owners of the
subject lot, is the proper party in interest to prosecute against any intruder
thereon. It found that the amicable settlement signed and executed by the
representatives of the registered owner of the premises before the Lupon is
not binding and unenforceable between the parties. It further ruled that even
if Mildred has her name in the tax declaration signifying that she is the
owner of the house constructed on the subject lot, tax declarations are not
evidence of ownership but merely issued to the declarant for purposes of
payment of taxes; that she cannot be considered as an indispensable party in
a suit for recovery of possession against respondents; that Mildred should
have intervened and proved that she is an indispensable party because the
records showed that she was not in actual possession of the subject lot. The
RTC deleted the attorney's fees, since the MTC decision merely ordered the
payment of attorney's fees without any basis.
15
16

Per Judge Antonio M. Natino, rollo, pp. 65-75.

Id. at 75.

Decision

-5-

G.R. No. 179011

Respondents' motion for reconsideration was denied in an Order17

dated June 8, 2005.
Dissatisfied, respondents filed with the CA a petition for review.
Petitioner filed his Comment thereto.
On February 28, 2007, the CA issued its assailed decision, the
dispositive portion of which reads:
IN LIGHT OF ALL THE FOREGOING, this petition for review
is GRANTED. The assailed decision of the Regional Trial Court, Br. 26,
Iloilo City, dated March 22, 2005, that affirmed the MTC Decision dated
November 14, 2003, is REVERSED and SET ASIDE.
Consequently, the complaint for ejectment of the respondent is
DISMISSED.18

The CA found that only petitioner filed the case for ejectment against
respondents and ruled that the other heirs should have been impleaded as
plaintiffs citing Section 1,19 Rule 7 and Section 7,20 Rule 3 of the Rules of
Court; that the presence of all indispensable parties is a condition sine qua
non for the exercise of judicial power; that when an indispensable party is
not before the court, the action should be dismissed as without the presence
of all the other heirs as plaintiffs, the trial court could not validly render
judgment and grant relief in favor of the respondents.
The CA also ruled that while petitioner asserted that the proper parties
to be sued are the respondents as they are the actual possessors of the subject
lot and not Mildred, petitioner still cannot disclaim knowledge that it was
to Mildred to whom his co-owners offered the property for sale, thus, he
knew all along that the real owner of the house on the subject lot is Mildred
and not respondents; that Mildred even paid P10,000.00 out of the total
consideration for the subject lot and required respondents' relatives to secure
the documents that proved their ownership over the subject lot; that Maximo
and Mildred had previously settled the matter regarding the sale of the
subject lot before the Barangay as contained in an amicable settlement
17

Id. at 76.
Id. at 31.
19
Section 1. Caption. The caption sets forth the name of the court, the title of the action, and the
docket number if assigned.
The title of the action indicates the names of the parties. They shall all be named in the original
complaint or petition; but in subsequent pleadings, it shall be sufficient if the name of the first party on each
side be stated with an appropriate indication when there are other parties.
Their respective participation in the case shall be indicated.
20
Section 7. Compulsory joinder of indispensable parties. Parties in interest without whom no
final determination can be had of an action shall be joined either as plaintiffs or defendants.
18

Decision

-6-

G.R. No. 179011

signed by Maximo and respondent Margie. Thus, the question in this case
extends to mere possessory rights and non-inclusion of indispensable parties
made the complaint fatally defective. From the facts obtaining in this case,
ejectment being a summary remedy is not the appropriate action to file
against the alleged deforciant of the property.
Hence, this petition for review wherein petitioner raises the following
issues:
I
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS
DISCRETION WHEN IT HELD THAT THE DECISION OF THE TRIAL
COURT WAS A NULLITY .
II
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS
DISCRETION WHEN IT HELD THAT PETITIONER KNEW ALL
ALONG THAT MILDRED KASCHER, AND NOT RESPONDENTS,
WERE THE REAL OWNERS OF THE RESIDENTIAL BUILDING.21

The CA found that petitioner's co-heirs to the subject lot should have
been impleaded as co-plaintiffs in the ejectment case against respondents,
since without their presence, the trial court could not validly render
judgment and grant relief in favor of petitioner.
We do not concur.
Petitioner can file the action for ejectment without impleading his coowners. In Wee v. De Castro,22 wherein petitioner therein argued that the
respondent cannot maintain an action for ejectment against him, without
joining all his co-owners, we ruled in this wise:
Article 487 of the New Civil Code is explicit on this point:
ART. 487. Any one of the co-owners may bring an action in
ejectment.
This article covers all kinds of action for the recovery of
possession, i.e., forcible entry and unlawful detainer (accion interdictal),
recovery of possession (accion publiciana), and recovery of ownership
(accion de reivindicacion). As explained by the renowned civilest,
Professor Arturo M. Tolentino:
A co-owner may bring such an action, without
the necessity of joining all the other co-owners as coplaintiffs, because the suit is deemed to be instituted for
21
22

Rollo, p. 10.
G.R. No. 176405, August 20, 2008, 562 SCRA 695.

Decision

-7-

G.R. No. 179011

the benefit of all. If the action is for the benefit of the

plaintiff alone, such that he claims possession for himself
and not for the co-ownership, the action will not prosper.
In the more recent case of Carandang v. Heirs of De Guzman, this
Court declared that a co-owner is not even a necessary party to an action
for ejectment, for complete relief can be afforded even in his absence,
thus:
In sum, in suits to recover properties, all co-owners
are real parties in interest. However, pursuant to Article 487
of the Civil Code and the relevant jurisprudence, any one of
them may bring an action, any kind of action for the
recovery of co-owned properties. Therefore, only one of the
co-owners, namely the co-owner who filed the suit for the
recovery of the co-owned property, is an indispensable
party thereto. The other co-owners are not indispensable
parties. They are not even necessary parties, for a complete
relief can be afforded in the suit even without their
participation, since the suit is presumed to have been filed
for the benefit of all co-owners.23

In this case, although petitioner alone filed the complaint for unlawful
detainer, he stated in the complaint that he is one of the heirs of the late Lilia
Castigador, his mother, who inherited the subject lot, from her parents.
Petitioner did not claim exclusive ownership of the subject lot, but he filed
the complaint for the purpose of recovering its possession which would
redound to the benefit of the co-owners. Since petitioner recognized the
existence of a co-ownership, he, as a co-owner, can bring the action without
the necessity of joining all the other co-owners as co-plaintiffs.
Petitioner contends that the CA committed a reversible error in finding
that Mildred Kascher is an indispensable party and that her non-inclusion as
a party defendant in the ejectment case made the complaint fatally defective,
thus, must be dismissed.
We agree with petitioner.
The CA based its findings that Mildred is an indispensable party
because it found that petitioner knew all along that Mildred is the owner of
the house constructed on the subject lot as shown in the affidavits24 of
Maximo and petitioner stating that petitioner's co-owners had offered for
sale the subject lot to Mildred, and that Maximo, petitioner's father, and
23

Id. at 710-711.
Rollo, pp. 160-161; 168-169, respectively.
8. My family offered the lot being occupied now by the Laurons for sale to them and more
particularly to her sister, Mildred Kascher, however, negotiations for the sale failed. (Rollo, p. 161)

24

Decision

-8-

G.R. No. 179011

Mildred had previously settled before the Barangay the matter regarding the
sale of the subject lot to the latter as contained in the amicable settlement.
We find that the affidavits of Maximo and petitioner merely stated that
the lot was offered for sale to Mildred, but nowhere did it admit that Mildred
is the owner of the house constructed on the subject lot.
Also, it appears that the amicable settlement25 before the Barangay
wherein it was stated that Maximo will sell the subject lot to the spouses
Alfons and Mildred Kascher was signed by Maximo on behalf of his
children and respondent Margie on behalf of Mr. and Mrs. Bienvenido
Loraa. Thus, there is no basis for the CA's conclusion that it was Mildred
and Maximo who had previously settled the sale of the subject lot.
Moreover, it appears however, that while there was a settlement, Liah
C. Catedrilla, one of petitioner's co-heirs, wrote a letter26 dated October 30,
2002, to the Spouses Loraa and respondent Margie stating that the latter
had made a change on the purchase price for the subject lot which was
different from that agreed upon in the amicable settlement. Records neither
show that respondent Margie had taken steps to meet with Liah or any of her
co-heirs to settle the matter of the purchase price nor rebut such allegation in
the letter if it was not true. The letter27 dated July 5, 2003 of respondent
Margie's counsel addressed to petitioner's counsel, stating that his client is
amenable in the amount as proposed in the amicable settlement, would not
alter the fact of respondents' non-compliance with the settlement since the
letter was sent after the ejectment case had already been filed by petitioner.
In Chavez v. Court of Appeals,28 we explained the nature of the
amicable settlement reached after a barangay conciliation, thus:
Indeed, the Revised Katarungang Pambarangay Law provides that
an amicable settlement reached after barangay conciliation proceedings
25

Id. at 94.
We, complainants and respondents in the above-captioned case, do hereby agree to settle our
dispute as follows:
1. The complainant/owner, Mr. Maximo Catedrilla, in behalf of his children agree to sell Lot. No. 54
to spouses Alfons and Mildred Kascher in the amount of P90,000.00.
2. The buyer agrees to buy at the price stated, payment will be made at the time the documents
showing his ownership and the Deed of Sale shall have been finished.
3. In case the owner fails to gather the necessary documents pertaining to his ownership on time, he
has the option to extend the time of execution of the Deed of Sale until such time that the
documents have been completed.
4. In case the buyer fails to pay the amount at the time that the Deed of Sale is ready for execution
they will lose their right to purchase and the owner shall give a warning to remove all the
improvements they have made on the said lot.
5. Date of execution of the Deed of Sale shall be on September 30, 1998.
26
Rollo, p. 97.
27
Id. at 96.
28
G.R. No. 159411, March 18, 2005, 453 SCRA 843.

Decision

-9-

G.R. No. 179011

has the force and effect of a final judgment of a court if not repudiated or a
petition to nullify the same is filed before the proper city or municipal
court within ten (10) days from its date. It further provides that the
settlement may be enforced by execution by the lupong tagapamayapa
within six (6) months from its date, or by action in the appropriate city or
municipal court, if beyond the six-month period. This special provision
follows the general precept enunciated in Article 2037 of the Civil Code,
viz.:
A compromise has upon the parties the effect and authority of res
judicata; but there shall be no execution except in compliance with a
judicial compromise.
Thus, we have held that a compromise agreement which is not
contrary to law, public order, public policy, morals or good customs is a
valid contract which is the law between the parties themselves. It has upon
them the effect and authority of res judicata even if not judicially
approved, and cannot be lightly set aside or disturbed except for vices of
consent and forgery.
However, in Heirs of Zari, et al. v. Santos, we clarified that the
broad precept enunciated in Art. 2037 is qualified by Art. 2041 of the same
Code, which provides:
If one of the parties fails or refuses to abide by the
compromise, the other party may either enforce the
compromise or regard it as rescinded and insist upon his
original demand.
We explained, viz.:
[B]efore the onset of the new Civil Code, there was
no right to rescind compromise agreements. Where a party
violated the terms of a compromise agreement, the only
recourse open to the other party was to enforce the terms
thereof.
When the new Civil Code came into being, its
Article 2041 x x x created for the first time the right of
rescission. That provision gives to the aggrieved party the
right to "either enforce the compromise or regard it as
rescinded and insist upon his original demand." Article
2041 should obviously be deemed to qualify the broad
precept enunciated in Article 2037 that "[a] compromise
has upon the parties the effect and authority of res judicata.
In exercising the second option under Art. 2041, the aggrieved
party may, if he chooses, bring the suit contemplated or involved in his
original demand, as if there had never been any compromise agreement,
without bringing an action for rescission. This is because he may regard
the compromise as already rescinded by the breach thereof of the other
party.29

29

Id. at 849-851.

Decision

- 10 -

G.R. No. 179011

While the amicable settlement executed between Maximo and

respondent Margie before the Barangay had the force and effect of a final
judgment of a court, it appears that there was non-compliance thereto by
respondent Margie on behalf of her parents which may be construed as
repudiation. The settlement is considered rescinded in accordance with the
provision of Article 2041 of the Civil Code. Since the settlement was
rescinded, petitioner, as a co-owner, properly instituted the action for
ejectment to recover possession of the subject lot against respondents who
are in possession of the same.
Even the receipt30 signed by a certain Teresito Castigador,
acknowledging having received from Mildred the amount of P10,000.00 as
downpayment for the purchase of the subject lot, would not also prove
respondents' allegation that there was already a perfected contract to sell the
subject lot to Mildred, since the authority of Teresito to sell on behalf of the
heirs of Lilia Castigador was not established.
In ejectment cases, the only issue to be resolved is who is entitled to
the physical or material possession of the property involved, independent of
any claim of ownership set forth by any of the party-litigants.31 In an action
for unlawful detainer, the real party-in-interest as party-defendant is the
person who is in possession of the property without the benefit of any
contract of lease and only upon the tolerance and generosity of its owner.32
Well settled is the rule that a person who occupies the land of another at the
latters tolerance or permission, without any contract between them, is
bound by an implied promise that he will vacate the same upon demand,
failing which a summary action for ejectment is the proper remedy against
him.33 His status is analogous to that of a lessee or tenant whose term of
lease has expired but whose occupancy continued by tolerance of the
owner.34
Here, records show that the subject lot is owned by petitioner's
mother, and petitioner, being an heir and a co-owner, is entitled to the
possession of the subject lot. On the other hand, respondent spouses are the
occupants of the subject lot which they do not own. Respondents'
possession of the subject lot was without any contract of lease as they failed
to present any, thus lending credence to petitioner's claim that their stay in
the subject lot is by mere tolerance of petitioner and his predecessors. It is
indeed respondents spouses who are the real parties-in-interest who were
correctly impleaded as defendants in the unlawful detainer case filed by
petitioner.
30

Rollo, p. 93.
Lao v. Lao, G.R. No. 149599, May 16, 2005, 458 SCRA 539, 546.
32
Id. at 547.
33
Arambulo v. Gungab, 508 Phil. 612, 621-622 (2005), citing Boy v. Court of Appeals, 471 Phil. 102,
114 (2004).
34
Lao v. Lao, supra note 31, at 547.
31

Decision

G.R. No. 179011

- 11 -

WHEREFORE, premises considered, the petition is hereby

GRANTED. The Decision dated February 28, 2007 and the Resolution
dated July 11, 2007 of the Court of Appeals are hereby REVERSED and
SET ASIDE. The Order dated March 22, 2005 of the Regional Trial Court,
Branch 26, Iloilo City, in Civil Case No. 04-27978, is hereby
REINSTATED.

SO ORDERED.

WE CONCUR:

PRESBITE 0 J. VELASCO, JR.

As ociate Justice

ROBERTO A. ABAD
Associate Justice

JOSE

CA~ENDOZA
A~~i~7e~J~stice

Decision

- 12 -

G.R. No. 179011

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.

PRESBITERO . VELAS0, JR.

Asso ate Justice
Chairper n, Third Divis,ion

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the

Division Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice