CRUZ v LEIS- Redemption and Co-ownership

Redemption by a co-owner doesn't terminate the co-ownership nor give her title to the whole property subject of the co-ownership

FACTS:

Leis and Isidro married each other in 1923. Isidro subsequently acquired from the Department of Agriculture and Natural Resources a parcel of land, which was titled in her name, with the description that she was a “widow”. Leis only passed away in 1973 without executing a will.

Isidro then secured a loan from Cruz (PhP 15,000, with 5% interest) secured by a mortgage on the land from DANR, but failed to pay on due date. Isidro executed 2 contracts in favor of Cruz: an Deed of Absolute Sale and a Contract indicating a pacto de retro sale. Isidro still failed to repurchase the property within 1 year, so she consolidated the ownership of the land in favor of Cruz.

When Isidro died, Cruz demanded her heirs to vacate the premises. The heirs then filed a complaint with the RTC averring that the land was conjugal property having been purchased during their marriage. The RTC found in favor of the heirs. The case was appealed to the CA, but the CA merely affirmed the ruling because Cruz failed to get a judicial order to have the land consolidated in his name after failure of Isidro to comply with the requirements of the right to repurchase (Art. 1607).

ISSUE:

Whether or not the land in question is conjugal property, and therefore subject to the rules on co-ownership?

HELD:

Although the land was purchased during the marriage, upon Leis’ death, the conjugal property regime ceased, and gave Isidro an equal portion of Leis’ half of the property to be divided among his legitimes. Co-ownership of the land then began.

However, upon failure of Isidro the heirs to exercise the right to repurchase, the ownership of the land transferred to Cruz. Despite the TCT being void for non-compliance with 1607, the ownership did not transfer back to the heirs, for compliance with 1607 is merely for purposes of registering the title in the Torrens System.