The Supreme Court has clarified the requirements for proving an oral partition of inherited property, emphasizing the need for clear evidence and adherence to evidentiary rules. The court ruled that while oral partitions can be valid, they must be proven by a preponderance of evidence, and certain documents, like declarations against interest, have specific limitations on their applicability to different parties. This decision provides guidance on how to navigate inheritance disputes where verbal agreements are central to the claims, protecting the rights of heirs while ensuring fairness in property distribution.

Dividing the Inheritance: Can a Verbal Agreement Override a Written Deed?

Spouses Ambrocio and Matilde Bandoy had three children: Arturo, Angelita, and Alexander. Upon Ambrocio’s death, his heirs executed an “Extrajudicial Settlement of the Estate… with Absolute Deed of Sale,” dividing their inherited land. Later, disputes arose when the heirs of Arturo and Angelita sought to partition the remaining land with Alexander, who claimed sole ownership based on an alleged oral agreement. The central legal question was whether this oral partition could supersede the written extrajudicial settlement and how Angelita’s handwritten note and affidavit factored into proving such an agreement. The Regional Trial Court initially ordered partition, but the Court of Appeals reversed this decision, favoring Alexander’s claim. This prompted the heirs of Arturo and Angelita to elevate the case to the Supreme Court.

The Supreme Court addressed whether an oral partition could indeed be valid in the Philippines. The Court recognized that Philippine law does not mandate partitions among heirs to be in writing to be considered valid. Citing previous cases such as Vda. De Reyes v. Court of Appeals, the Court reiterated that oral partitions are enforceable, especially when the rights of creditors are not affected. According to the Court, the purpose of requiring a public document and registration is to protect creditors and the heirs themselves against belated claims. The absence of such rights means that heirs can distribute an estate in a manner different from what the law prescribes. Moreover, it noted that oral partition is not covered by the Statute of Frauds because it is a confirmation or ratification of title or right of property by the heir renouncing in favor of another heir accepting and receiving the inheritance, not exactly a conveyance of real property.

Building on this principle, the Court then considered whether the alleged oral partition between Alexander, Angelita, and Arturo was sufficiently proven. This involved examining the admissibility and weight of Angelita’s handwritten note and affidavit, which Alexander presented as evidence of his sole ownership. The Court clarified that it was Alexander’s responsibility to prove that the extrajudicial settlement failed to reflect the parties’ true intentions. The Court disagreed with the Court of Appeals’ ruling that the handwritten note and affidavit may be admitted in evidence as an exception to the parol evidence rule against Angelita and Arturo’s respective interest in Lot No. 3516.

The parol evidence rule, outlined in Section 9, Rule 130 of the Rules of Court, generally restricts the introduction of external evidence to modify or contradict the terms of a written agreement. The Court stated that the written agreement serves as the sole repository and memorial of everything the parties agreed on. However, there are exceptions, such as cases involving ambiguity, mistake, or failure to express the parties’ true intent. While Alexander argued that the extrajudicial settlement did not reflect the true agreement, the Court found the settlement’s terms were clear and unambiguous. The settlement explicitly stated that the heirs adjudicated the property to themselves “pro indiviso,” meaning without division. The document also specified that Angelita, Arturo, and Alexander sold a portion of their undivided shares to Florencio Benitez. Thus, the remaining portion of the property should have been equally divided among them.

Furthermore, the Court addressed Alexander’s argument that Angelita’s handwritten note and affidavit should be admitted as declarations against interest, an exception to the hearsay rule. The Court clarified that these statements were, in fact, admissions against interest, applicable only against Angelita and her heirs, provided they were proven genuine and duly executed. In Lazaro v. Agustin, the Court distinguished between admissions and declarations against interest, noting that admissions are made by a party or someone in privity with a party, while declarations are made by someone who is not a party. Here, Angelita’s statements could only waive her own claim to the property but could not bind Arturo’s heirs because the rights of a party cannot be prejudiced by an act, declaration, or omission of another.

The Court emphasized that subsequent conduct by Alexander contradicted Angelita’s statements. Notably, Alexander and Arturo jointly sold a portion of the land to Silverio B. Bautista after the extrajudicial settlement. This action indicated that Arturo continued to be recognized as a co-owner, undermining Alexander’s claim that Arturo had already sold his entire share. The Court cited Mancol, Jr. v. Development Bank of the Philippines, stating that the admissibility of evidence does not equate to its probative value, which depends on judicial evaluation according to the Rules of Evidence. Therefore, the Court gave greater weight to the extrajudicial settlement and considered Angelita’s later statements binding only to her heirs.

In light of these considerations, the Court determined the proper division of the property. It recognized that Alexander, Arturo, and Angelita each initially held a 4,921 square meter share. Angelita effectively waived her claim by acknowledging her sale to Benitez. The remaining portion sold to Benitez should be deducted from the shares of Arturo and Alexander, leaving them with 2,718 square meters each. Subsequent sales by Alexander and Arturo should then be deducted from their respective shares. This division aligns with Article 493 of the Civil Code, which allows co-owners to alienate their shares, but the effect of such alienation is limited to the portion allotted upon the termination of the co-ownership.

The Court then outlined the final division of the property, accounting for the various sales made by Alexander and Arturo. Ultimately, the Court concluded that the heirs of Arturo were entitled to 2,518 square meters, while Alexander was entitled to 922 square meters. The case was remanded to the Regional Trial Court for partition in accordance with Rule 69 of the Rules of Court. This ruling clarifies the interplay between written agreements, oral partitions, and evidentiary standards in inheritance disputes, ensuring a fair and legally sound distribution of property among heirs.

FAQs

What was the key issue in this case?	The main issue was whether an oral agreement to partition inherited property could override the terms of a written extrajudicial settlement, especially when later statements by one heir contradicted the written document. The court had to determine the validity and enforceability of the alleged oral partition.
Is an oral partition of inherited property valid in the Philippines?	Yes, the Supreme Court has consistently held that oral partitions among heirs are valid, especially when the rights of creditors are not affected. The law does not require a written agreement for a partition to be enforceable among the heirs themselves.
What is the parol evidence rule, and how did it apply to this case?	The parol evidence rule generally prevents parties from introducing evidence of prior or contemporaneous agreements to contradict a written contract. In this case, the rule limited the admissibility of Angelita’s handwritten note and affidavit to alter the terms of the extrajudicial settlement.
What is an admission against interest, and how does it differ from a declaration against interest?	An admission against interest is a statement made by a party to a lawsuit (or someone in privity with them) that is contrary to their own interest. A declaration against interest is made by a non-party. In this case, Angelita’s statements were treated as admissions against interest, binding on her heirs.
How did the Court weigh Angelita’s handwritten note and affidavit?	The Court ruled that Angelita’s statements could only be used against her own interest and the interest of her heirs, but not against the interests of Arturo’s heirs. Her statements acknowledging the sale of her share were considered binding on her successors, but her statements about Arturo’s share were not.
Why was Alexander’s subsequent conduct relevant to the Court’s decision?	Alexander’s act of jointly selling a portion of the property with Arturo after the extrajudicial settlement contradicted his claim that Arturo had already sold his entire share. This inconsistency undermined the credibility of Angelita’s later statements regarding Arturo’s share.
What is the significance of the term “pro indiviso” in this case?	“Pro indiviso” means “undivided.” The fact that the heirs initially adjudicated the property to themselves pro indiviso in the extrajudicial settlement meant they held the property in common, without specific portions allocated to each heir until a formal partition occurred.
What is the res inter alios acta rule?	The res inter alios acta rule states that the rights of a party cannot be prejudiced by the act, declaration, or omission of another. This rule prevented Angelita’s statements from being used to diminish the rights of Arturo’s heirs.
How did the Court determine the final division of the property?	The Court considered the initial shares of each heir, the sales made to third parties, and Angelita’s waiver of her share. After accounting for these factors, the Court determined the remaining shares for Alexander and the heirs of Arturo, remanding the case for a formal partition.

In summary, the Supreme Court’s decision highlights the importance of clear, consistent evidence in inheritance disputes involving oral partitions. While oral agreements can be valid, parties must present convincing proof to overcome the terms of written documents. The ruling also clarifies the scope and limitations of evidentiary rules, ensuring a balanced and equitable distribution of inherited property.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: HEIRS OF ARTURO E. BANDOY VS. ALEXANDER E. BANDOY, G.R. No. 255258, October 19, 2022