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Republic of thePhilippines SUPREME

COURT Manila

SECOND DIVISION

G.R. No.182435 August 13,2012

LILIA B. ADA, LUZ B.ADANZA, FLORA C. BA

YLON, REMO BA YLON,JOSE BA YLON, ERIC BA

YLON, FLORENTINO BAYLON, and MA. RUBY BAYLON, Petitioners,

vs. FLORANTE BAYLON, Respondent.

VILLARAMA, JR.,*

D E C I S I O N

REYES, J .:

Before this Court is apetition for review oncertiorari under Rule 45 of

the Rules of Court seekingto annul and set aside theDecision1dated October 26,2007 rendered by the Courtof Appeals (CA) in CA-G.R.CV No. 01746. The assaileddecision partially reversed

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and set aside the Decision2dated October 20, 2005issued ~y the Regional TrialCourt (RTC), Tan jay City,Negros Oriental, Branch 43in Civil Case No. 11657.

The Antecedent Facts

This case involves theestate of spouses FlorentinoBaylon and Maximina ElnasBaylon (Spouses Baylon)who died on November 7,

1961 and May 5, 1974,respectively.3 At the time oftheir death, Spouses Baylonwere survived by theirlegitimate children, namely,Rita Baylon (Rita), VictoriaBaylon (Victoria), DoloresBaylon (Dolores), PanfilaGomez (Panfila), RamonBaylon (Ramon) and herein

petitioner Lilia B. Ada (Lilia).

Dolores died intestate andwithout issue on August 4,1976. Victoria died onNovember 11, 1981 andwas survived by herdaughter, herein petitionerLuz B. Adanza. Ramon died

intestate on July 8, 1989and was survived by hereinrespondent Florante Baylon(Florante), his child from hisfirst marriage, as well as bypetitioner Flora Baylon, hissecond wife, and their

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legitimate children, namely,Ramon, Jr. and hereinpetitioners Remo, Jose,Eric, Florentino and Ma.Ruby, all surnamed Baylon.

On July 3, 1996, thepetitioners filed with theRTC a Complaint4 forpartition, accounting anddamages against Florante,Rita and Panfila. Theyalleged therein thatSpouses Baylon, during

their lifetime, owned 43parcels of land5 all situatedin Negros Oriental. After thedeath of Spouses Baylon,they claimed that Rita tookpossession of the saidparcels of land andappropriated for herself theincome from the same.Using the income producedby the said parcels of land,Rita allegedly purchasedtwo parcels of land, Lot No.47096 and half of Lot No.4706,7 situated in Canda-uay, Dumaguete City. Thepetitioners averred that Ritarefused to effect a partitionof the said parcels of land.

In their Answer,8 Florante,Rita and Panfila assertedthat they and the petitionersco-owned 229 out of the 43parcels of land mentioned inthe latters complaint,

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whereas Rita actuallyowned 10 parcels of land10out of the 43 parcels whichthe petitioners sought topartition, while theremaining 11 parcels of landare separately owned byPetra Cafino Adanza,11Florante,12 Meliton Adalia,13Consorcia Adanza,14 Lilia15and Santiago Mendez.16Further, they claimed thatLot No. 4709 and half of LotNo. 4706 were acquired by

Rita using her own money.They denied that Ritaappropriated solely forherself the income of theestate of Spouses Baylon,and expressed no objectionto the partition of the estateof Spouses Baylon, but onlywith respect to the co-owned parcels of land.

During the pendency of thecase, Rita, through a Deedof Donation dated July 6,1997, conveyed Lot No.4709 and half of Lot No.4706 to Florante. On July16, 2000, Rita died intestateand without any issue.

Thereafter, learning of thesaid donation inter vivos infavor of Florante, thepetitioners filed aSupplemental Pleading17dated February 6, 2002,praying that the said

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donation in favor of therespondent be rescinded inaccordance with Article1381(4) of the Civil Code.They further alleged thatRita was already sick andvery weak when the saidDeed of Donation wassupposedly executed and,thus, could not have validlygiven her consent thereto.

Florante and Panfilaopposed the rescission of

the said donation, assertingthat Article 1381(4) of theCivil Code applies onlywhen there is already a prior

judicial decree on whobetween the contendingparties actually owned theproperties under litigation.18

The RTC Decision

On October 20, 2005, theRTC rendered a Decision,19the decretal portion of whichreads:

Wherefore judgment ishereby rendered:

(1) declaring the existenceof co-ownership overparcels nos. 1, 2, 3, 5, 7, 10,13, 14, 16, 17, 18, 26, 29,30, 33, 34, 35, 36, 40 and41 described in thecomplaint;

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(2) directing that the abovementioned parcels of landbe partitioned among theheirs of Florentino Baylonand Maximina Baylon;

(3) declaring a co-ownershipon the properties of RitaBaylon namely parcelsno[s]. 6, 11, 12, 20, 24, 27,31, 32, 39 and 42 anddirecting that it shall bepartitioned among her heirswho are the plaintiffs and

defendant in this case;

(4) declaring the donationinter vivos rescinded withoutprejudice to the share ofFlorante Baylon to theestate of Rita Baylon anddirecting that parcels nos. 1and 2 paragraph V of thecomplaint be included in the

division of the property as ofRita Baylon among herheirs, the parties in thiscase;

(5) excluding from the co-ownership parcels nos. 20,21, 22, 9, 43, 4, 8, 19 and37.

Considering that the partiesfailed to settle this caseamicably and could notagree on the partition, theparties are directed tonominate a representative

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to act as commissioner tomake the partition. He shallimmediately take [his] oathof office upon [his]appointment. Thecommissioner shall make areport of all the proceedingsas to the partition withinfifteen (15) days from thecompletion of this partition.The parties are given ten(10) days within which toobject to the report afterwhich the Court shall act on

the commissioner report.

SO ORDERED.20(Emphasis ours)

The RTC held that the deathof Rita during the pendencyof the case, having diedintestate and without anyissue, had rendered the

issue of ownership insofaras parcels of land which sheclaims as her own mootsince the parties below arethe heirs to her estate.Thus, the RTC regardedRita as the owner of thesaid 10 parcels of land and,accordingly, directed that

the same be partitionedamong her heirs.Nevertheless, the RTCrescinded the donation intervivos of Lot No. 4709 andhalf of Lot No. 4706 in favorof Florante. In rescinding

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the said donation intervivos, the RTC explainedthat:

However, with respect to lotnos. 4709 and 4706 which[Rita] had conveyed toFlorante Baylon by way ofdonation inter vivos, theplaintiffs in theirsupplemental pleadings(sic) assailed the same tobe rescissible on the groundthat it was entered into by

the defendant Rita Baylonwithout the knowledge andapproval of the litigants [or]of competent judicialauthority. The subjectparcels of lands areinvolved in the case forwhich plaintiffs have askedthe Court to partition thesame among the heirs ofFlorentino Baylon andMaximina Elnas.

Clearly, the donation intervivos in favor of FloranteBaylon was executed toprejudice the plaintiffs rightto succeed to the estate ofRita Baylon in case of death

considering that as testifiedby Florante Baylon, RitaBaylon was very weak andhe tried to give her vitaminsx x x. The donation intervivos executed by RitaBaylon in favor of Florante

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Baylon is rescissible for thereason that it refers to theparcels of land in litigation xx x without the knowledgeand approval of the plaintiffsor of this Court. However,the rescission shall notaffect the share of FloranteBaylon to the estate of RitaBaylon.21

Florante soughtreconsideration of theDecision dated October 20,

2005 of the RTC insofar asit rescinded the donation ofLot No. 4709 and half of LotNo. 4706 in his favor.22 Heasserted that, at the time ofRitas death on July 16,2000, Lot No. 4709 and halfof Lot No. 4706 were nolonger part of her estate asthe same had already beenconveyed to him through adonation inter vivos threeyears earlier. Thus, Florantemaintained that Lot No.4709 and half of Lot No.4706 should not be includedin the properties that shouldbe partitioned among theheirs of Rita.

On July 28, 2006, the RTCissued an Order23 whichdenied the motion forreconsideration filed byFlorante.

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The CA Decision

On appeal, the CA rendereda Decision24 dated October26, 2007, the dispositiveportion of which reads:

WHEREFORE, the Decisiondated October 20, 2005 andOrder dated July 28, 2006are REVERSED and SETASIDE insofar as theydecreed the rescission ofthe Deed of Donation dated

July 6, 1997 and theinclusion of lot no. 4709 andhalf of lot no. 4706 in theestate of Rita Baylon. Thecase is REMANDED to thetrial court for thedetermination of ownershipof lot no. 4709 and half of lotno. 4706.

SO ORDERED.25

The CA held that before thepetitioners may file anaction for rescission, theymust first obtain a favorable

judicial ruling that Lot No.4709 and half of Lot No.4706 actually belonged tothe estate of SpousesBaylon and not to Rita. Untilthen, the CA asserted, anaction for rescission ispremature. Further, the CAruled that the petitionersaction for rescission cannot

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be joined with their actionfor partition, accounting anddamages through a meresupplemental pleading.Thus:

If Lot No. 4709 and half ofLot No. 4706 belonged tothe Spouses estate, thenRita Baylons donationthereof in favor of FloranteBaylon, in excess of herundivided share therein asco-heir, is void. Surely, she

could not have validlydisposed of something shedid not own. In such a case,an action for rescission ofthe donation may, therefore,prosper.

If the lots, however, arefound to have belongedexclusively to Rita Baylon,

during her lifetime, herdonation thereof in favor ofFlorante Baylon is valid. Forthen, she merely exercisedher ownership right todispose of what legallybelonged to her. Upon herdeath, the lots no longerform part of her estate as

their ownership nowpertains to Florante Baylon.On this score, an action forrescission against suchdonation will not prosper. xx x.

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Verily, before plaintiffs-appellees may file an actionfor rescission, they mustfirst obtain a favorable

judicial ruling that lot no.4709 and half of lot no.4706 actually belonged tothe estate of SpousesFlorentino and MaximinaBaylon, and not to RitaBaylon during her lifetime.Until then, an action forrescission is premature. Forthis matter, the applicability

of Article 1381, paragraph 4,of the New Civil Code mustlikewise await the trialcourts resolution of theissue of ownership.

Be that as it may, an actionfor rescission should be filedby the parties concernedindependent of theproceedings below. The firstcannot simply be lumped upwith the second through amere supplementalpleading.26(Citation omitted)

The petitioners soughtreconsideration27 of theDecision dated October 26,

2007 but it was denied bythe CA in its Resolution28dated March 6, 2008.

Hence, this petition.

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Issue

The lone issue to beresolved by this Court iswhether the CA erred inruling that the donation intervivos of Lot No. 4709 andhalf of Lot No. 4706 in favorof Florante may only berescinded if there is alreadya judicial determination thatthe same actually belongedto the estate of SpousesBaylon.

The Courts Ruling

The petition is partlymeritorious.

Procedural Matters

Before resolving the lonesubstantive issue in the

instant case, this Courtdeems it proper to addresscertain procedural mattersthat need to be threshed outwhich, by laxity orotherwise, were not raisedby the parties herein.

Misjoinder of Causes ofAction

The complaint filed by thepetitioners with the RTCinvolves two separate,distinct and independentactions partition andrescission. First, the

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petitioners raised the refusalof their co-heirs, Florante,Rita and Panfila, to partitionthe properties which theyinherited from SpousesBaylon. Second, in theirsupplemental pleading, thepetitioners assailed thedonation inter vivos of LotNo. 4709 and half of Lot No.4706 made by Rita in favorof Florante pendente lite.

The actions of partition

and

rescission cannot bejoined in a single action.

By a joinder of actions, ormore properly, a joinder ofcauses of action is meantthe uniting of two or moredemands or rights of actionin one action, the statementof more than one cause of

action in a declaration. It isthe union of two or morecivil causes of action, eachof which could be made thebasis of a separate suit, inthe same complaint,declaration or petition. Aplaintiff may under certaincircumstances join several

distinct demands,controversies or rights ofaction in one declaration,complaint or petition.29

The objectives of the rule orprovision are to avoid a

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multiplicity of suits wherethe same parties andsubject matter are to bedealt with by effecting in oneaction a completedetermination of all mattersin controversy and litigationbetween the partiesinvolving one subjectmatter, and to expedite thedisposition of litigation atminimum cost. Theprovision should beconstrued so as to avoid

such multiplicity, wherepossible, without prejudiceto the rights of the litigants.30

Nevertheless, while partiesto an action may assert inone pleading, in thealternative or otherwise, asmany causes of action asthey may have against anopposing party, such joinderof causes of action issubject to the condition,inter alia, that the joindershall not include special civilactions governed by specialrules.31

Here, there was a

misjoinder of causes ofaction. The action forpartition filed by thepetitioners could not be

joined with the action for therescission of the saiddonation inter vivos in favor

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of Florante. Lest it beoverlooked, an action forpartition is a special civilaction governed by Rule 69of the Rules of Court whilean action for rescission is anordinary civil actiongoverned by the ordinaryrules of civil procedure. Thevariance in the procedure inthe special civil action ofpartition and in the ordinarycivil action of rescissionprecludes their joinder in

one complaint or their beingtried in a single proceedingto avoid confusion indetermining what rules shallgovern the conduct of theproceedings as well as inthe determination of thepresence of requisiteelements of each particularcause of action.32

A misjoined cause ofaction, if not severedupon motion of a partyor by the court suasponte, maybe adjudicated by thecourt together with theother causes of action.

Nevertheless, misjoinder ofcauses of action is not aground for dismissal.Indeed, the courts have thepower, acting upon themotion of a party to the case

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or sua sponte, to order theseverance of the misjoinedcause of action to beproceeded with separately.33However, if there is noobjection to the improper

joinder or the court did notmotu proprio direct aseverance, then there existsno bar in the simultaneousadjudication of all theerroneously joined causesof action. On this score, ourdisquisition in Republic of

the Philippines v. Herbieto34is instructive, viz:

This Court, however,disagrees with petitionerRepublic in this regard. Thisprocedural lapse committedby the respondents shouldnot affect the jurisdiction ofthe MTC to proceed withand hear their applicationfor registration of theSubject Lots.

x x x x

Considering everyapplication for landregistration filed in strict

accordance with theProperty RegistrationDecree as a single cause ofaction, then the defect in the

joint application forregistration filed by therespondents with the MTC

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constitutes a misjoinder ofcauses of action andparties. Instead of a singleor joint application forregistration, respondentsJeremias and David, moreappropriately, should havefiled separate applicationsfor registration of Lots No.8422 and 8423,respectively.

Misjoinder of causes ofaction and parties do not

involve a question ofjurisdiction of the court tohear and proceed with thecase. They are not evenaccepted grounds fordismissal thereof. Instead,under the Rules of Court,the misjoinder of causes ofaction and parties involvean implied admission of thecourts jurisdiction. Itacknowledges the power ofthe court, acting upon themotion of a party to the caseor on its own initiative, toorder the severance of themisjoined cause of action, tobe proceeded withseparately (in case of

misjoinder of causes ofaction); and/or the droppingof a party and theseverance of any claimagainst said misjoined party,also to be proceeded withseparately (in case of

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misjoinder of parties).35(Citations omitted)

It should be emphasizedthat the foregoing rule onlyapplies if the court trying thecase has jurisdiction over allof the causes of actiontherein notwithstanding themisjoinder of the same. Ifthe court trying the case hasno jurisdiction over amisjoined cause of action,then such misjoined cause

of action has to be severedfrom the other causes ofaction, and if not sosevered, any adjudicationrendered by the court withrespect to the same wouldbe a nullity.

Here, Florante posed noobjection, and neither did

the RTC direct theseverance of the petitionersaction for rescission fromtheir action for partition.While this may be a patentomission on the part of theRTC, this does notconstitute a ground to assailthe validity and correctness

of its decision. The RTCvalidly adjudicated theissues raised in the actionsfor partition and rescissionfiled by the petitioners.

Asserting a New Cause of

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Action in a SupplementalPleading

In its Decision datedOctober 26, 2007, the CApointed out that the saidaction for rescission shouldhave been filed by thepetitioners independently ofthe proceedings in theaction for partition. It opinedthat the action for rescissioncould not be lumped up withthe action for partition

through a meresupplemental pleading.

We do not agree.

A supplemental pleadingmay raise a new cause ofaction as long as it hassome relation to theoriginal cause of action

set forth in the

originalcomplaint.

Section 6, Rule 10 of theRules of Court reads:

Sec. 6. SupplementalPleadings.Upon motion ofa party the court may, uponreasonable notice and uponsuch terms as are just,permit him to serve asupplemental pleadingsetting forth transactions,occurrences or eventswhich have happened since

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the date of the pleadingsought to be supplemented.The adverse party mayplead thereto within ten (10)days from notice of theorder admitting thesupplemental pleading.

In Young v. Spouses Sy,36this Court had theopportunity to elucidate onthe purpose of asupplemental pleading.Thus:

As its very name denotes, asupplemental pleading onlyserves to bolster or addsomething to the primarypleading. A supplementexists side by side with theoriginal. It does not replacethat which it supplements.Moreover, a supplemental

pleading assumes that theoriginal pleading is to standand that the issues joinedwith the original pleadingremained an issue to betried in the action. It is but acontinuation of thecomplaint. Its usual office isto set up new facts which

justify, enlarge or changethe kind of relief withrespect to the same subjectmatter as the controversyreferred to in the originalcomplaint.

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The purpose of thesupplemental pleading is tobring into the records newfacts which will enlarge orchange the kind of relief towhich the plaintiff is entitled;hence, any supplementalfacts which further developthe original right of action, orextend to vary the relief, areavailable by way ofsupplemental complainteven though theythemselves constitute a

right of action.37 (Citationsomitted and emphasis ours)

Thus, a supplementalpleading may properlyallege transactions,occurrences or eventswhich had transpired afterthe filing of the pleadingsought to be supplemented,even if the saidsupplemental factsconstitute another cause ofaction.

Admittedly, in Leobrera v.Court of Appeals,38we heldthat a supplementalpleading must be based on

matters arising subsequentto the original pleadingrelated to the claim ordefense presented therein,and founded on the samecause of action. We furtherstressed therein that a

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supplemental pleading maynot be used to try a newcause of action.

However, in PlantersDevelopment Bank v. LZKHoldings and DevelopmentCorp.,39 we clarified that,while a matter stated in asupplemental complaintshould have some relationto the cause of action setforth in the original pleading,the fact that the

supplemental pleadingtechnically states a newcause of action should notbe a bar to its allowance butonly a matter that may beconsidered by the court inthe exercise of its discretion.In such cases, we stressedthat a broad definition of"cause of action" should beapplied.

Here, the issue as to thevalidity of the donation intervivos of Lot No. 4709 andhalf of Lot No. 4706 madeby Rita in favor of Floranteis a new cause of action thatoccurred after the filing of

the original complaint.However, the petitionersprayer for the rescission ofthe said donation inter vivosin their supplementalpleading is germane to, andis in fact, intertwined with

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the cause of action in thepartition case. Lot No. 4709and half of Lot No. 4706 areincluded among theproperties that were soughtto be partitioned.

The petitionerssupplemental pleadingmerely amplified the originalcause of action, on accountof the gratuitousconveyance of Lot No. 4709and half of Lot No. 4706

after the filing of the originalcomplaint and prayed foradditional reliefs, i.e.,rescission. Indeed, thepetitioners claim that thesaid lots form part of theestate of Spouses Baylon,but cannot be partitionedunless the gratuitousconveyance of the same isrescinded. Thus, theprincipal issue raised by thepetitioners in their originalcomplaint remained thesame.

Main Issue: Propriety ofRescission

After having threshed outthe procedural matters, wenow proceed to adjudicatethe substantial issuepresented by the instantpetition.

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The petitioners assert thatthe CA erred in remandingthe case to the RTC for thedetermination of ownershipof Lot No. 4709 and half ofLot No. 4706. They maintainthat the RTC aptlyrescinded the said donationinter vivos of Lot No. 4709and half of Lot No. 4706pursuant to Article 1381(4)of the Civil Code.

In his Comment,40 Florante

asserts that before thepetitioners may file anaction for rescission, theymust first obtain a favorable

judicial ruling that Lot No.4709 and half of Lot No.4706 actually belonged tothe estate of SpousesBaylon. Until then, Floranteavers that an action forrescission would bepremature.

The petitioners contentionsare well-taken.

The resolution of the instantdispute is fundamentallycontingent upon a

determination of whetherthe donation inter vivos ofLot No. 4709 and half of LotNo. 4706 in favor ofFlorante may be rescindedpursuant to Article 1381(4)of the Civil Code on the

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ground that the same wasmade during the pendencyof the action for partitionwith the RTC.

Rescission is a remedy toaddress the damage orinjury caused tothe contracting parties orthird persons.

Rescission is a remedygranted by law to thecontracting parties and even

to third persons, to securethe reparation of damagescaused to them by acontract, even if it should bevalid, by means of therestoration of things to theircondition at the momentprior to the celebration ofsaid contract.41 It is aremedy to make ineffective

a contract, validly enteredinto and therefore obligatoryunder normal conditions, byreason of external causesresulting in a pecuniaryprejudice to one of thecontracting parties or theircreditors.42

Contracts which arerescissible are validcontracts having all theessential requisites of acontract, but by reason ofinjury or damage caused toeither of the parties therein

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or to third persons areconsidered defective and,thus, may be rescinded.

The kinds of rescissiblecontracts, according to thereason for theirsusceptibility to rescission,are the following: first, thosewhich are rescissiblebecause of lesion orprejudice;43 second, thosewhich are rescissible onaccount of fraud or bad

faith;44

and third, thosewhich, by special provisionsof law,45 are susceptible torescission.46

Contracts which refer tothings subject oflitigation isrescissible pursuant toArticle 1381(4) of

the

Civil Code.

Contracts which arerescissible due to fraud orbad faith include thosewhich involve things underlitigation, if they have beenentered into by thedefendant without the

knowledge and approval ofthe litigants or of competentjudicial authority. Thus,Article 1381(4) of the CivilCode provides:

Art. 1381. The following

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contracts are rescissible:

x x x x

(4) Those which refer to

things under litigation if theyhave been entered into bythe defendant without theknowledge and approval ofthe litigants or of competent

judicial authority.

The rescission of a contractunder Article 1381(4) of the

Civil Code only requires theconcurrence of thefollowing: first, thedefendant, during thependency of the case,enters into a contract whichrefers to the thing subject oflitigation; and second, thesaid contract was enteredinto without the knowledge

and approval of the litigantsor of a competent judicialauthority. As long as theforegoing requisites concur,it becomes the duty of thecourt to order the rescissionof the said contract.

The reason for this issimple. Article 1381(4)seeks to remedy thepresence of bad faithamong the parties to a caseand/or any fraudulent actwhich they may commit withrespect to the thing subject

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of litigation.

When a thing is the subjectof a judicial controversy, itshould ultimately be boundby whatever disposition thecourt shall render. Theparties to the case aretherefore expected, indeference to the courtsexercise of jurisdiction overthe case, to refrain fromdoing acts which woulddissipate or debase the

thing subject of the litigationor otherwise render theimpending decision thereinineffectual.

There is, then, a restrictionon the disposition by theparties of the thing that isthe subject of the litigation.

Article 1381(4) of the Civil

Code requires that anycontract entered into by adefendant in a case whichrefers to things underlitigation should be with theknowledge and approval ofthe litigants or of acompetent judicial authority.

Further, any disposition ofthe thing subject of litigationor any act which tends torender inutile the courtsimpending disposition insuch case, sans theknowledge and approval of

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the litigants or of the court,is unmistakably andirrefutably indicative of badfaith. Such acts underminethe authority of the court tolay down the respectiverights of the parties in acase relative to the thingsubject of litigation and bindthem to such determination.

It should be stressed,though, that the defendantin such a case is not

absolutely proscribed fromentering into a contractwhich refer to things underlitigation. If, for instance, adefendant enters into acontract which conveys thething under litigation duringthe pendency of the case,the conveyance would bevalid, there being no definitedisposition yet coming fromthe court with respect to thething subject of litigation.

After all, notwithstandingthat the subject thereof is athing under litigation, suchconveyance is but merelyan exercise of ownership.

This is true even if thedefendant effected theconveyance without theknowledge and approval ofthe litigants or of acompetent judicial authority.The absence of such

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knowledge or approvalwould not precipitate theinvalidity of an otherwisevalid contract. Nevertheless,such contract, thoughconsidered valid, may berescinded at the instance ofthe other litigants pursuantto Article 1381(4) of the CivilCode.

Here, contrary to the CAsdisposition, the RTC aptlyordered the rescission of the

donation inter vivos of LotNo. 4709 and half of Lot No.4706 in favor of Florante.The petitioners hadsufficiently established thepresence of the requisitesfor the rescission of acontract pursuant to Article1381(4) of the Civil Code. Itis undisputed that, at thetime they were gratuitouslyconveyed by Rita, Lot No.4709 and half of Lot No.4706 are among theproperties that were thesubject of the partition casethen pending with the RTC.It is also undisputed thatRita, then one of the

defendants in the partitioncase with the RTC, did notinform nor sought theapproval from thepetitioners or of the RTCwith regard to the donationinter vivos of the said

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parcels of land to Florante.

Although the gratuitousconveyance of the saidparcels of land in favor ofFlorante was valid, thedonation inter vivos of thesame being merely anexercise of ownership,Ritas failure to inform andseek the approval of thepetitioners or the RTCregarding the conveyancegave the petitioners the right

to have the said donationrescinded pursuant to

Article 1381(4) of the CivilCode.

Rescission under Article1381(4) of the Civil Codeis notpreconditioned upon the

judicial determination

as

to the ownership ofthe thing subject oflitigation.

In this regard, we also findthe assertion that rescissionmay only be had after theRTC had finally determinedthat the parcels of land

belonged to the estate ofSpouses Baylon intrinsicallyamiss. The petitioners rightto institute the action forrescission pursuant to

Article 1381(4) of the CivilCode is not preconditioned

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upon the RTCsdetermination as to theownership of the saidparcels of land.

It bears stressing that theright to ask for therescission of a contractunder Article 1381(4) of theCivil Code is not contingentupon the final determinationof the ownership of the thingsubject of litigation. Theprimordial purpose of Article

1381(4) of the Civil Code isto secure the possibleeffectivity of the impending

judgment by a court withrespect to the thing subjectof litigation. It seeks toprotect the binding effect ofa courts impendingadjudication vis--vis thething subject of litigationregardless of which amongthe contending claimstherein would subsequentlybe upheld. Accordingly, adefinitive judicialdetermination with respectto the thing subject oflitigation is not a conditionsine qua non before the

rescissory actioncontemplated under Article1381(4) of the Civil Codemay be instituted.

Moreover, conceding thatthe right to bring the

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rescissory action pursuantto Article 1381(4) of the CivilCode is preconditionedupon a judicialdetermination with regard tothe thing subject litigation,this would only bring aboutthe very predicament thatthe said provision of lawseeks to obviate. Assumingarguendo that a rescissoryaction under Article 1381(4)of the Civil Code could onlybe instituted after the

dispute with respect to thething subject of litigation is

judicially determined, thereis the possibility that thesame may had already beenconveyed to third personsacting in good faith,rendering any judicialdetermination with regard tothe thing subject of litigationillusory. Surely, thisparadoxical eventuality isnot what the law hadenvisioned.

Even if the donation intervivos is validlyrescinded, adetermination as to the

ownership of thesubject parcels of land isstill necessary.

Having established that theRTC had aptly ordered therescission of the said

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donation inter vivos in favorof Florante, the issue thathas to be resolved by thisCourt is whether there is stilla need to determine theownership of Lot No. 4709and half of Lot No. 4706.

In opting not to make adetermination as to theownership of Lot No. 4709and half of Lot No. 4706, theRTC reasoned that theparties in the proceedings

before it constitute not onlythe surviving heirs ofSpouses Baylon but thesurviving heirs of Rita aswell. As intimated earlier,Rita died intestate duringthe pendency of theproceedings with the RTCwithout any issue, leavingthe parties in theproceedings before the RTCas her surviving heirs. Thus,the RTC insinuated, adefinitive determination asto the ownership of the saidparcels of land isunnecessary since, in anycase, the said parcels ofland would ultimately be

adjudicated to the parties inthe proceedings before it.

We do not agree.

Admittedly, whoever may beadjudicated as the owner of

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Lot No. 4709 and half of LotNo. 4706, be it Rita orSpouses Baylon, the samewould ultimately betransmitted to the parties inthe proceedings before theRTC as they are the onlysurviving heirs of bothSpouses Baylon and Rita.However, the RTC failed torealize that a definitiveadjudication as to theownership of Lot No. 4709and half of Lot No. 4706 is

essential in this case as itaffects the authority of theRTC to direct the partition ofthe said parcels of land.Simply put, the RTC cannotproperly direct the partitionof Lot No. 4709 and half ofLot No. 4706 until andunless it determines that thesaid parcels of land indeedform part of the estate ofSpouses Baylon.

It should be stressed thatthe partition proceedingsbefore the RTC only coversthe properties co-owned bythe parties therein in theirrespective capacity as the

surviving heirs of SpousesBaylon. Hence, the authorityof the RTC to issue an orderof partition in theproceedings before it onlyaffects those propertieswhich actually belonged to

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the estate of SpousesBaylon.

In this regard, if Lot No.4709 and half of Lot No.4706, as unwaveringlyclaimed by Florante, areindeed exclusively ownedby Rita, then the saidparcels of land may not bepartitioned simultaneouslywith the other propertiessubject of the partition casebefore the RTC. In such

case, although the parties inthe case before the RTC arestill co-owners of the saidparcels of land, the RTCwould not have the authorityto direct the partition of thesaid parcels of land as theproceedings before it is onlyconcerned with the estate ofSpouses Baylon.

WHEREFORE, inconsideration of theforegoing disquisitions, thepetition is PARTIALLYGRANTED. The Decisiondated October 26, 2007issued by the Court of

Appeals in CA-G.R. CV No.

01746 is MODIFIED in thatthe Decision dated October20, 2005 issued by theRegional Trial Court, TanjayCity, Negros Oriental,Branch 43 in Civil Case No.11657, insofar as it decreed

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the rescission of the Deedof Donation dated July 6,1997 is herebyREINSTATED. The case isREMANDED to the trialcourt for the determinationof the ownership of Lot No.4709 and half of Lot No.4706 in accordance with thisDecision.

SO ORDERED.

BIENVENIDO L.

REYES

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Senior Associate

Justice Chairperson,Second Division

ARTURO D.

Associate JJOSE PORTUGAL

PEREZAssociate Justice

C E R T I F I C A T I O N

I certify that the conclusionsin the above Decision hadbeen reached inconsultation before the case

was assigned to the writerof the opinion of the Court'sDivision.

ANTONIO T.CARPIO Senior AssociateJustice (Per Section 12,

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R.A. 296 The Judiciary Actof 1948, as amended)

Footnotes

* Additional member perSpecial Order No. 1274dated July 30, 2012 vice

Associate Justice MariaLourdes P.A. Sereno.

1 Penned by AssociateJustice Amy C. Lazaro-

Javier, with AssociateJustices Pampio A.Abarintos and Francisco P.Acosta, concurring; rolla,pp. 17-24.

2 Under the sal a of JudgeWinston M. Villegas; id. at68-77.

3

Id. at 59.4Id. at 36-51.

5 Covered by OriginalCertificate of Title (OCT)Nos. FV-17761, FV-17763,FV-17753, FV-17775, FV-29781, FV-17757, FV-17754, FV-17776, FV-

17778, FV-17760, FV-17758, FV-17762, FV-17764, FV-17766, FV-17767, FV-17769 and FV-27756 and Tax DeclarationNos. 85-11-071, 85-04-019,85-11-013, 85-06-047, 85-

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06-048, 85-07-069, 88-06-109-A, 94-25-0021-A, 94-25-0020-A, 94-25-0056-A,94-25-0057-A, 94-25-0286-

A, 94-25-0285-A, 85-13-086, 85-06-007, 85-13-148,85-09-010-A, 85-13-047,85-09-076-A, 85-09-054-A,93-001-10-270R, 85-09-044-A, 85-08-035, 85-08-058, 85-09-134 and 85-11-068.

6 Covered by Transfer

Certificate of Title (TCT) No.2775.

7Covered by TCT No. 2973.

8Rollo, pp. 53-55.

9 OCT Nos. FV-17761, FV-17763, FV-17753, FV-29781, FV-17754, FV-

17760, FV-17764, FV-17767 and FV-17769 andTax Declaration Nos. 85-11-071, 85-11-013, 85-06-047,85-06-048, 94-25-0285-A,85-06-007, 85-13-148, 85-09-010-A, 85-09-054-A, 93-001-10-270R, 85-09-044-A,85-08-035 and 85-09-134.

10OCT Nos. FV-17757, FV-17758, FV-17762, FV-17766 and FV-27756 andTax Declaration Nos. 88-06-109-A, 94-25-0057-A, 85-13-086, 85-13-047 and 85-

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09-076-A.

11 OCT No. FV-17778 andTax Declaration No. 85-11-068.

12 OCT Nos. FV-17775 andFV-17776 and TaxDeclaration Nos. 85-07-069,94-25-0056-A and 85-08-058.

13 Tax Declaration No. 85-04-019.

14 Tax Declaration No. 94-25-0021-A.

15 Tax Declaration No. 94-25-0020-A.

16 Tax Declaration No. 94-25-0286-A.

17

Rollo, pp. 57-58.18Id. at 20.

19Id. at 68-77.

20Id. at 77.

21Id. at 76-77.

22Id. at 78-79.

23Id. at 80-81.

24Id. at 17-24.

25Id. at 23.

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26Id. at 22-23.

27Id. at 25-28.

28Id. at 31.

29 Republic v. Hernandez,323 Phil. 606, 624-625(1996).

30Id. at 625.

31THE RULES OF COURT,Rule 2, Section 5.

32 See Francisco, RemedialLaw Compendium, Vol. 1,9th Rev. Ed., p. 77.

33THE RULES OF COURT,Rule 2, Section 6.

34498 Phil. 227 (2005).

35Id. at 237-239.

36534 Phil. 246 (2006).

37Id. at 260.

38252 Phil. 737 (1989).

39496 Phil. 263 (2005).

40Rollo, pp. 96-99.

41 Tolentino,COMMENTARIES ANDJURISPRUDENCE ON THECIVIL CODE OF THEPHILIPPINES, Vol. IV, 1991

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ed., p. 570.

42 Caguioa, Comments andCases on Civil Law, Vol. IV,1968 ed., pp. 443-444.

43See CIVIL CODE OF THEPHILIPPINES, Articles1381(1) and (2) and 1098.

44See CIVIL CODE OF THEPHILIPPINES, Articles1381(3) and (4) and 1382.

45See CIVIL CODE OF THEPHILIPPINES, Articles1189, 1191, 1526, 1534,1538, 1539, 1542, 1556,1560, 1567 and 1659.

46 Supra note 42, at 446;Reyes and Puno, An Outlineof Philippine Civil Law, Vol.IV, 1957 ed., pp. 233-235.

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