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G.R. No.

160762

Republic of the Philippines


SUPREME COURT
Manila

No redemption having been made during the one-year period, a Final


Sheriff's Certificate of Sale was eventually issued on August 26, 1982
conveying and transferring the said property to [petitioners].

FIRST DIVISION

"On September 4, 1984, [respondent] filed a Complaint with the


Regional Trial Court of Baguio City, docketed as Civil Case No. 417-R,
against [petitioners] and Sheriff Melgar for annulment and cancellation
of auction sale upon the same ground stated in the abovementioned
third-party claim. Citing the Order of the Regional Trial Court of Baguio
City, Branch V in LRC Case No. 2288, which ordered the cancellation
of TCT No. 12491 and directed the Register of Deeds to issue new title
in the name of Josephine Go x x x, [petitioners] moved to dismiss the
complaint on the ground of res judicata. In the Order dated November
28, 1984, the motion was denied by the trial court.

May 3, 2006

Spouses JOSEPHINE MENDOZA GO & HENRY GO, Petitioners,


vs.
LEONARDO YAMANE, Respondent.
DECISION
PANGANIBAN, CJ:
Property purchased by spouses during the existence of their marriage
is presumed to be conjugal in nature. This presumption stands, absent
any clear, categorical, and convincing evidence that the property is
paraphernal. Conjugal property cannot be held liable for the personal
obligation contracted by one spouse, unless some advantage or
benefit is shown to have accrued to the conjugal partnership.
The Case
Before the Court is a Petition for Review1 under Rule 45 of the Rules of
Court, challenging the November 22, 2002 Decision2 and the
September 17, 2003 Resolution3 of the Court of Appeals (CA) in CAGR CV No. 60939. The assailed Decision disposed as follows:
"WHEREFORE, premises considered, the Decision appealed from is
hereby REVERSED and SET ASIDE. The Sheriff's Certificate of Sale
dated August 12, 1981 and the Final Sheriff's Certificate of Sale dated
August 26, 1982 are declared NULL and VOID."4

"In their Answer filed on December 10, 1984, [petitioners] denied the
material allegations of the complaint and interposed the following
special affirmative defenses: that the cause of action was barred by
prior judgment; that [respondent] has not pursued any lawful remedy to
annul the execution proceeding; that there is no flaw or irregularity in
the auction sale; and that since the execution sale was made in
accordance with Section 21, Rule 39 of the Revised Rules of Court, it
is deemed final and any irregularity committed in the course thereof will
not vitiate its validity.
"On December 28, 1984, Muriel likewise lodged a Complaint for
Damages, docketed as Civil Case No. 505-R, against [petitioners] and
Atty. Guillermo De Guzman alleging, in gist, fraud, misrepresentation,
manipulation and unlawful acts of the defendants in causing the levy of
the subject property with an estimated commercial value of P200,000
as against a charging lien in the amount of P10,000.
"In its May 27, 1985 Order, the trial court ordered the joint hearing of
Civil Cases Nos. 417-R and 505-R. On August 30, 1985, Muriel was
declared non-suited for failure to appear in the hearing despite due
notice. As a consequence, Civil Case No. 505-R was dismissed on
October 15, 1985."5

The CA denied reconsideration in its September 17, 2003 Resolution.


The Facts
The undisputed factual findings of the CA are as follows:
"Involved in the suit is a 750 square meters (sic) parcel of lot located at
Res. Sec. 'K', Baguio City, registered in the name of Muriel Pucay
Yamane, wife of Leonardo Yamane, [respondent] herein, under
Transfer Certificate of Title No. 12491.
"As a result of a motion for execution of a charging lien filed by Atty.
Guillermo F. De Guzman in Civil Case No. 1841, entitled 'Florence
Pucay De Gomez, Elsie Pucay Kiwas and Muriel Pucay Yamane v.
Cypress Corporation,' which said counsel handled for the plaintiffs
therein, hereinafter collectively referred to as the Pucay sisters, the
subject property was levied to satisfy the lien for attorney's fees in the
amount of P10,000. The said property was scheduled to be sold at
public auction on August 11, 1981.
"Four days prior to the auction sale, [respondent] filed a Third-Party
Claim with the Office of the Provincial Sheriff to stop the public auction
on the ground that the subject property is conjugal property and,
therefore, should not be held answerable for the personal obligation of
the Pucay sisters. However, the Sheriff proceeded with the auction
sale despite [respondent's] protest. The subject property was sold to
spouses Josephine [and] Henry Go (or [petitioners]) as highest bidder.

In its Decision6 dated March 25, 1998, the Regional Trial Court (RTC)
of Baguio City, Branch 4, held that the subject parcel of land was the
paraphernal property of the late Muriel Pucay Yamane -- spouse of
respondent -- and was not their conjugal property. The appearance of
his name on the Transfer Certificate of Title (TCT) was deemed to be
merely descriptive of the civil status of the registered owner, his late
wife. Hence, finding that he had no legal standing to question the
auction sale or to pray for its annulment or cancellation, the RTC
dismissed the case for lack of merit.
Upon receipt of the RTC Decision on April 8, 1998, respondent filed a
Motion,7 in which he prayed that he be allowed to file his Motion for
Reconsideration of the Decision, on or before May 30, 1998. The trial
court granted8 his Motion; received the Motion for Reconsideration, 9
which was filed on May 28, 1998; and eventually denied it in its Order
dated June 5, 1998.10 He then elevated the matter to the CA on June
15, 1998.
Ruling of the Court of Appeals
The CA reversed the RTC's Decision. The Sheriff's Certificate of Sale
dated August 12, 1981, and the Final Sheriff's Certificate of Sale dated
August 26, 1982, were declared null and void.
According to the appellate court, property acquired during marriage is
presumed to be conjugal, unless the exclusive funds of one spouse are

shown to have been used for the purpose. That the land was acquired
during the spouses' coverture was sufficiently established by the TCT
and the Deed of Absolute Sale, both indicating that Muriel Pucay
Yamane was "married to Leonardo Yamane"; and by the undisputed
testimony of the previous owner, Eugene Pucay. Because of
petitioners' failure to establish that the land in question had been
acquired by Muriel using her exclusive funds, the CA concluded that
the contested land was conjugal property.

subsequently filed a Notice of Appeal on June 15, 1998. By this time,


the original period to appeal had expired. It should be clear that the
Rules prohibit an extension to file a motion for reconsideration.14

The appellate court further held thus:

There have been exceptions, however, in which the Court dispensed


with technical infirmities and gave due course to tardy appeals. In
some of those instances, the presence of any justifying circumstance
recognized by law -- such as fraud, accident, mistake or excusable
negligence -- properly vested the judge with discretion to approve or
admit an appeal filed out of time. 16 In other instances, lapsed appeals
were allowed in order to serve substantial justice, upon consideration
of a) matters of life, liberty, honor or property; b) the existence of
special or compelling circumstances; c) the merits of the case; d)
causes not entirely attributable to the fault or negligence of the party
that would be favored by the suspension of the rules; e) the failure to
show that the review being sought was merely frivolous and dilatory;
and f) the fact that the other party would not be unjustly prejudiced.17

"x x x [T]he disputed property being a conjugal property of [respondent]


and his wife, and absent any showing of some advantage or benefit
that accrued to their conjugal partnership from the transaction between
the Pucay sisters and Atty. De Guzman, the public auction sale of the
subject property in favor of [petitioners] is null and void."11
Hence, this Petition.12
Issues

The perfection of an appeal in the manner and within the period


prescribed by the Rules of Civil Procedure is not only mandatory, but
also jurisdictional; and the lapse of the appeal period of fifteen days
deprives a court of the jurisdiction to alter a final judgment. 15

Petitioners submit the following issues for our consideration:


"I. The Court of Appeals gravely erred in taking cognizance
of the appeal and in not dismissing the same, despite the
fact that the respondent failed to perfect his appeal within the
15-day reglementary period set by the Rules of Court.
"II. The Court of Appeals gravely erred in declaring the
subject property as conjugal property, despite the existence
of clear evidence showing that the subject property is the
exclusive paraphernal property of Muriel who, even during
her lifetime, always claimed the said property as her own
exclusive paraphernal property and not as property coowned with her husband, the respondent herein.1avvphil.net
"III. The Court of Appeals, assuming, ex grati argumenti, that
the subject property is conjugal property between
respondent and Muriel, gravely erred in ruling that the same
cannot answer for the charging lien of Atty. Guillermo de
Guzman in Civil Case No. 1841."13
In the main, they posit two issues. They raise, first, the procedural
question of whether the CA erred in giving due course to respondent's
lapsed appeal; and, second, the substantive issue of whether the
subject property is conjugal or paraphernal.
The Court's Ruling
The Petition has no merit.

Indeed, in some exceptional cases, the Court has allowed the


relaxation of the rules regulating the reglementary periods of appeal.
These exceptions were cited in Manila Memorial Park Cemetery v.
CA,18 from which we quote:
"In Ramos vs. Bagasao, the Court excused the delay of four days in
the filing of the notice of appeal because the questioned decision of the
trial court had been served upon appellant Ramos at a time when her
counsel of record was already dead. The new counsel could only file
the appeal four days after the prescribed reglementary period was
over. In Republic vs. Court of Appeals, the Court allowed the perfection
of an appeal by the Republic despite the delay of six days to prevent a
gross miscarriage of justice since the Republic stood to lose hundreds
of hectares of land already titled in its name and had since then been
devoted for public purposes. In Olacao vs. National Labor Relations
Commission, a tardy appeal was accepted considering that the subject
matter in issue had theretofore been judicially settled with finality in
another case, and a dismissal of the appeal would have had the effect
of the appellant being ordered twice to make the same reparation to
the appellee."19
We believe that a suspension of the Rules is similarly warranted in the
present controversy. We have carefully studied the merits of the case
and noted that the review being sought has not been shown to be
merely frivolous and dilatory. The Court has come to the conclusion
that the Decision of the RTC, Branch 4 (in Civil Case No. 417-R), must
be set aside. It would be far better and more prudent to attain the ends
of justice, rather than to dispose of the case on technicality and cause
grave injustice in the process. Thus, we would rather excuse a
technical lapse and afford respondent a review of the case on appeal.

Procedural Issue:
Substantive Issue:
Whether Respondent's Appeal Should Be Given Due Course
Paraphernal or Conjugal?
Petitioners contend that the CA erred in giving due course to the
appeal filed by respondent beyond the 15-day reglementary period.
Concededly, he received a copy of the RTC Decision on April 8, 1998.
He had, therefore, until April 23, 1998, within which to file an appeal.
Prior to the latter date, however, he moved that his new counsel be
allowed to file a motion for reconsideration on May 30, 1998. It was
eventually filed on May 28, 1998, but was denied. Respondent

The purchase of the property had been concluded in 1967, before


Family Code took effect on August 3, 1988.20 Accordingly,
transaction was aptly covered by the then governing provisions of
New Civil Code. On the latter basis, therefore, we shall resolve
issue of the nature of the contested property.

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Article 160 of the New Civil Code provides that "all property of the
marriage is presumed to belong to the conjugal partnership, unless it
be proved that it pertains exclusively to the husband or to the wife." 21
As a conditio sine qua non for the operation of this article in favor of
the conjugal partnership,22 the party who invokes the presumption must
first prove that the property was acquired during the marriage.23

Further, the mere registration of a property in the name of one spouse


does not destroy its conjugal nature.34 Hence, it cannot be contended
in the present case that, simply because the title and the Deed of Sale
covering the parcel of land were in the name of Muriel alone, it was
therefore her personal and exclusive property. In concluding that it was
paraphernal, the trial court's reliance on Stuart v. Yatco 35 was clearly
erroneous.

In other words, the presumption in favor of conjugality does not


operate if there is no showing of when the property alleged to be
conjugal was acquired.24 Moreover, the presumption may be rebutted
only with strong, clear, categorical and convincing evidence. 25 There
must be strict proof of the exclusive ownership of one of the spouses,26
and the burden of proof rests upon the party asserting it.27

As stated earlier, to rebut the presumption of the conjugal nature of the


property, petitioners must present clear and convincing evidence. We
affirm and quote below, for easy reference, the relevant dispositions of
the CA:

The CA committed no error in declaring that the parcel of land


belonged to the conjugal partnership of Spouses Muriel and Leonardo
Yamane. They acquired it from Eugene Pucay on February 27, 1967,28
or specifically during the marriage.29 We then follow the rule that proof
of the acquisition of the subject property during a marriage suffices to
render the statutory presumption operative. It is clear enough that the
presently disputed piece of land pertains to the conjugal partnership.

"x x x. We are unable to go along with [petitioners'] contention that the


subject property was acquired by Muriel with her exclusive funds. Mere
registration of the contested property in the name of the wife is not
sufficient to establish the paraphernal nature of the property. This
reminds Us of the teaching in the recent case of Diancin v. Court of
Appeals, that all the property acquired by the spouses, regardless of in
whose name the same is registered, during the marriage is presumed
to belong to the conjugal partnership of gains, unless it is proved that it
pertains exclusively to the husband or to the wife. To quote:

Petitioners concede that the property was acquired during the


subsistence of the marriage of Muriel to respondent. 30 Nonetheless,
they insist that it belonged exclusively to her for the following reasons:
First. Respondent never denied nor opposed her claim in
Civil Case No. 505-R, which she had filed during her lifetime;
or in AG-GR Sp. No. 01616 (entitled "Muriel Pucay Yamane
v. Josephine Go"), that the disputed parcel of land was her
exclusive paraphernal property. They allege that his failure to
file a denial or opposition in those cases is tantamount to a
judicial admission that militates against his belated claim.
Second. The Deed of Absolute Sale of the property is in the
sole name of Muriel. Petitioners posit that, had the spouses
jointly purchased this piece of land, the document should
have indicated this fact or carried the name of respondent as
buyer.
Third. The failure of respondent to redeem the parcel of land
within the redemption period after the auction sale indicated
that he was not its co-owner.
We will discuss the three arguments seriatim.
Unilateral Declaration
Respondent's interest cannot be prejudiced by the claim of Muriel in
her Complaint in Civil Case No. 505-R that the subject parcel of land
was her paraphernal property. Significantly, the nature of a property -whether conjugal or paraphernal -- is determined by law and not by the
will of one of the spouses.31 Thus, no unilateral declaration by one
spouse can change the character of a conjugal property.32
Besides, the issue presented in Civil Case No. 505-R was not the
nature of the subject piece of land being levied upon, but whether Atty.
Guillermo de Guzman was entitled to a charging lien. In that case,
Muriel claimed that she had not officially retained him as counsel, and
that no lawyer-client relationship had been established between
them.33
Deed and Title in the Name of One Spouse

"As a general rule, all property acquired by the spouses, regardless of


in whose name the same is registered, during the marriage is
presumed to belong to the conjugal partnership of gains, unless it is
proved that it pertains exclusively to the husband or to the wife. In the
case at bar, the fishpond lease right is not paraphernal having been
acquired during the coverture of the marriage between Matilde and
Tiburcio, which was on April 9, 1940. The fact that the grant was solely
in the name of Matilde did not make the property paraphernal property.
What was material was the time the fishpond lease right was acquired
by the grantee, and that was during the lawful existence of Matilde's
marriage to Tiburcio.
"x x x [T]his presumption is rebuttable, but only with strong, clear and
convincing evidence. The burden of proving that the property belongs
exclusively to the wife rests upon the party asserting it. Mere assertion
of the property's paraphernal nature is not sufficient."
"The record as well as the foregoing established jurisprudence lead us
to conclude that the contested property was indeed acquired during the
marriage of herein [respondent] and Muriel. To prove that it is
nonetheless paraphernal property, it is incumbent upon [petitioners] to
adduce strong, clear and convincing evidence that Muriel bought the
same with her exclusive funds. [Petitioners] failed to discharge the
burden. Nowhere in the evidence presented by them do We find any
indication that the land in question was acquired by Muriel with her
exclusive funds. The presumption not having been overthrown, the
conclusion is that the contested land is conjugal property."36
Non-Redemption After the Auction Sale
The non-redemption of the property by respondent within the period
prescribed by law did not, in any way, indicate the absence of his right
or title to it. Contrary to petitioners' allegation, the fact is that he filed a
Third-Party Claim37 with the sheriff, upon learning of the levy and
impending auction sale. This fact was specifically admitted by
petitioners.38 Respondent claimed that the parcel of land was conjugal,
and that he could not answer for the separate obligation of his wife and
her sisters.39 Notwithstanding his claim, the disputed piece of land was
sold at a public auction on August 11, 1981. Consequently issued were
a Sheriff's Certificate of Sale dated August 12, 1981, and a Final
Sheriff's Certificate of Sale dated August 26, 1982.40

Likewise, in his Opposition (Answer) to the Petition in LRC File Adm.


Case No. 2288,41 respondent raised the issue of the conjugal nature of
the property and reserved his right to file an independent action to
annul the auction sale. In its March 30, 1983 Order, 42 however, Branch
5 of the RTC of Baguio City did not rule on either the actual ownership
or the nature of the parcel of land. Rather, it granted the Petition to
issue a new certificate of title in favor of Petitioner Josephine Mendoza
Go. It found that, under Section 75 of Presidential Decree 1529,
respondent had no legal standing to question the auction sale,
because he was not the registered owner of the property. Instead, his
right to prove his claim in a separate and independent action was
upheld.43 Thus, he instituted the present case for annulment and
cancellation of the auction sale.

been shown to be one of the charges against the conjugal


partnership.50 Moreover, her rights to the property are merely inchoate
prior to the liquidation of the conjugal partnership.

The foregoing points clearly explain the failure of respondent to


redeem the property. Misplaced is petitioners' emphasis on his failure
to do so within the period required by law, because redemption in this
case would have been inconsistent with his claim that the sale was
invalid.44 Redemption would have served as an implied admission of
the regularity of the sale and estopped him from later impugning its
validity on that ground.45

The power of the court in executing judgments extends only to


properties unquestionably belonging to the judgment debtor alone. 55 In
this case, therefore, the property -- being conjugal in nature -- cannot
be levied upon.56

Since petitioners have failed to present convincing evidence that the


property is paraphernal, the presumption that it is conjugal therefore
stands. The next question before us is, whether the charging lien of
Atty. de Guzman may be properly enforced against the piece of land in
question.

Under the New Civil Code, a wife may bind the conjugal partnership
only when she purchases things necessary for the support of the
family, or when she borrows money for that purpose upon her
husband's failure to deliver the needed sum;51 when administration of
the conjugal partnership is transferred to the wife by the courts 52 or by
the husband;53 or when the wife gives moderate donations for charity.54
Failure to establish any of these circumstances in the present case
means that the conjugal asset may not be bound to answer for Muriel's
personal obligation.

WHEREFORE, the Petition is DENIED, and the assailed Decision and


Resolution AFFIRMED. Costs against petitioners.
SO ORDERED.

Charging Lien Not Chargeable Against Conjugal Property


It is indisputable that the services of Atty. de Guzman were acquired
during the marriage of respondent and Muriel. The lawyer's legal
services were engaged to recover from Cypress Corporation (in Civil
Case No. 1841) the balance of the purchase price of the sale of the
exclusive property of Muriel and her sisters. 46 The recovery was done
during the marriage.47
The CA elucidated on this matter as follows:
"x x x. The contract or transaction between Atty. De Guzman and the
Pucay sisters appears to have been incurred for the exclusive interest
of the latter. Muriel was acting privately for her exclusive interest when
she joined her two sisters in hiring the services of Atty. De Guzman to
handle a case for them. Accordingly, whatever expenses were incurred
by Muriel in the litigation for her and her sisters' private and exclusive
interests, are her exclusive responsibility and certainly cannot be
charged against the contested conjugal property.
"Even on the remote assumption that the conjugal property could be
held liable, levy on execution of the same property should still be
denied in accordance with the ruling in Luzon Surety Co., Inc. v. De
Garcia that before a conjugal property could be held liable for the
obligation contracted by a spouse, there must be a showing of some
advantage or benefit that accrued to the conjugal partnership.
Concededly, the burden is on the [petitioners] to prove that the
services rendered by Atty. De Guzman in handling Civil Case No. 1841
for the Pucay sisters had, somehow, redounded to the benefit of the
conjugal partnership of herein [respondent] and Muriel. This onus,
[petitioners], however, failed to discharge."48
We find no reason to deviate from the CA's findings, which are amply
supported by evidence. The expenses incurred by Muriel for the
recovery of the balance of the purchase price of her paraphernal
property are her exclusive responsibility.49 This piece of land may not
be used to pay for her indebtedness, because her obligation has not

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 146006

February 23, 2004

JOSE C. LEE AND ALMA AGGABAO, in their capacities as


President and Corporate Secretary, respectively, of
Philippines International Life Insurance Company, and
FILIPINO LOAN ASSISTANCE GROUP, petitioners
vs.
REGIONAL TRIAL COURT OF QUEZON CITY BRANCH 85
presided by JUDGE PEDRO M. AREOLA, BRANCH CLERK OF
COURT JANICE Y. ANTERO, DEPUTY SHERIFFS ADENAUER
G. RIVERA and PEDRO L. BORJA, all of the Regional Trial
Court of Quezon City Branch 85, MA. DIVINA ENDERES

claiming to be Special Administratrix, and other persons/


public officers acting for and in their behalf, respondents.
DECISION
CORONA, J.:
This is a petition for review under Rule 45 of the Rules of Court
seeking to reverse and set aside the decision 1 of the Court of
Appeals, First Division, dated July 26, 2000, in CA G.R. 59736,
which dismissed the petition for certiorari filed by petitioners Jose
C. Lee and Alma Aggabao (in their capacities as president and
secretary, respectively, of Philippine International Life Insurance
Company) and Filipino Loan Assistance Group.
The antecedent facts follow.
Dr. Juvencio P. Ortaez incorporated the Philippine International
Life Insurance Company, Inc. on July 6, 1956. At the time of the
companys incorporation, Dr. Ortaez owned ninety percent (90%)
of the subscribed capital stock.
On July 21, 1980, Dr. Ortaez died. He left behind a wife (Juliana
Salgado Ortaez), three legitimate children (Rafael, Jose and
Antonio Ortaez) and five illegitimate children by Ligaya Novicio
(herein private respondent Ma. Divina Ortaez-Enderes and her
siblings Jose, Romeo, Enrico Manuel and Cesar, all surnamed
Ortaez).2
On September 24, 1980, Rafael Ortaez filed before the Court of
First Instance of Rizal, Quezon City Branch (now Regional Trial
Court of Quezon City) a petition for letters of administration of the
intestate estate of Dr. Ortaez, docketed as SP Proc. Q-30884
(which petition to date remains pending at Branch 85 thereof).
Private respondent Ma. Divina Ortaez-Enderes and her siblings
filed an opposition to the petition for letters of administration and,
in a subsequent urgent motion, prayed that the intestate court
appoint a special administrator.
On March 10, 1982, Judge Ernani Cruz Pao, then presiding judge
of Branch 85, appointed Rafael and Jose Ortaez joint special
administrators of their fathers estate. Hearings continued for the
appointment of a regular administrator (up to now no regular
administrator has been appointed).
As ordered by the intestate court, special administrators Rafael
and Jose Ortaez submitted an inventory of the estate of their
father which included, among other properties, 2,0293 shares of
stock in Philippine International Life Insurance Company (hereafter
Philinterlife), representing 50.725% of the companys outstanding
capital stock.
On April 15, 1989, the decedents wife, Juliana S. Ortaez,
claiming that she owned 1,0144 Philinterlife shares of stock as her
conjugal share in the estate, sold said shares with right to
repurchase in favor of herein petitioner Filipino Loan Assistance
Group (FLAG), represented by its president, herein petitioner Jose
C. Lee. Juliana Ortaez failed to repurchase the shares of stock
within the stipulated period, thus ownership thereof was
consolidated by petitioner FLAG in its name.

On October 30, 1991, Special Administrator Jose Ortaez, acting


in his personal capacity and claiming that he owned the remaining
1,0115 Philinterlife shares of stocks as his inheritance share in the
estate, sold said shares with right to repurchase also in favor of
herein petitioner FLAG, represented by its president, herein
petitioner Jose C. Lee. After one year, petitioner FLAG
consolidated in its name the ownership of the Philinterlife shares of
stock when Jose Ortaez failed to repurchase the same.
It appears that several years before (but already during the
pendency of the intestate proceedings at the Regional Trial Court
of Quezon City, Branch 85), Juliana Ortaez and her two children,
Special Administrators Rafael and Jose Ortaez, entered into a
memorandum of agreement dated March 4, 1982 for the
extrajudicial settlement of the estate of Dr. Juvencio Ortaez,
partitioning the estate (including the Philinterlife shares of stock)
among themselves. This was the basis of the number of shares
separately sold by Juliana Ortaez on April 15, 1989 (1,014
shares) and by Jose Ortaez on October 30, 1991 (1,011 shares)
in favor of herein petitioner FLAG.
On July 12, 1995, herein private respondent Ma. Divina Ortaez
Enderes and her siblings (hereafter referred to as private
respondents Enderes et al.) filed a motion for appointment of
special administrator of Philinterlife shares of stock. This move
was opposed by Special Administrator Jose Ortaez.
On November 8, 1995, the intestate court granted the motion of
private respondents Enderes et al. and appointed private
respondent Enderes special administratrix of the Philinterlife
shares of stock.
On December 20, 1995, Special Administratrix Enderes filed an
urgent motion to declare void ab initio the memorandum of
agreement dated March 4, 1982. On January 9, 1996, she filed a
motion to declare the partial nullity of the extrajudicial settlement of
the decedents estate. These motions were opposed by Special
Administrator Jose Ortaez.
On March 22, 1996, Special Administratrix Enderes filed an urgent
motion to declare void ab initio the deeds of sale of Philinterlife
shares of stock, which move was again opposed by Special
Administrator Jose Ortaez.
On February 4, 1997, Jose Ortaez filed an omnibus motion for (1)
the approval of the deeds of sale of the Philinterlife shares of stock
and (2) the release of Ma. Divina Ortaez-Enderes as special
administratrix of the Philinterlife shares of stock on the ground that
there were no longer any shares of stock for her to administer.
On August 11, 1997, the intestate court denied the omnibus motion
of Special Administrator Jose Ortaez for the approval of the
deeds of sale for the reason that:
Under the Godoy case, supra, it was held in substance that a sale
of a property of the estate without an Order of the probate court is
void and passes no title to the purchaser. Since the sales in
question were entered into by Juliana S. Ortaez and Jose S.
Ortaez in their personal capacity without prior approval of the
Court, the same is not binding upon the Estate.

WHEREFORE, the OMNIBUS MOTION for the approval of the


sale of Philinterlife shares of stock and release of Ma. Divina
Ortaez-Enderes as Special Administratrix is hereby denied.6
On August 29, 1997, the intestate court issued another order
granting the motion of Special Administratrix Enderes for the
annulment of the March 4, 1982 memorandum of agreement or
extrajudicial partition of estate. The court reasoned that:
In consonance with the Order of this Court dated August 11, 1997
DENYING the approval of the sale of Philinterlife shares of stocks
and release of Ma. Divina Ortaez-Enderes as Special
Administratrix, the "Urgent Motion to Declare Void Ab Initio
Memorandum of Agreement" dated December 19, 1995. . . is
hereby
impliedly
partially
resolved
insofar
as
the
transfer/waiver/renunciation of the Philinterlife shares of stock are
concerned, in particular, No. 5, 9(c), 10(b) and 11(d)(ii) of the
Memorandum of Agreement.
WHEREFORE, this Court hereby declares the Memorandum of
Agreement dated March 4, 1982 executed by Juliana S. Ortaez,
Rafael S. Ortaez and Jose S. Ortaez as partially void ab initio
insofar as the transfer/waiver/renunciation of the Philinterlife
shares of stocks are concerned.7
Aggrieved by the above-stated orders of the intestate court, Jose
Ortaez filed, on December 22, 1997, a petition for certiorari in the
Court of Appeals. The appellate court denied his petition, however,
ruling that there was no legal justification whatsoever for the
extrajudicial partition of the estate by Jose Ortaez, his brother
Rafael Ortaez and mother Juliana Ortaez during the pendency
of the settlement of the estate of Dr. Ortaez, without the requisite
approval of the intestate court, when it was clear that there were
other heirs to the estate who stood to be prejudiced thereby.
Consequently, the sale made by Jose Ortaez and his mother
Juliana Ortaez to FLAG of the shares of stock they invalidly
appropriated for themselves, without approval of the intestate
court, was void.8
Special Administrator Jose Ortaez filed a motion for
reconsideration of the Court of Appeals decision but it was denied.
He elevated the case to the Supreme Court via petition for review
under Rule 45 which the Supreme Court dismissed on October 5,
1998, on a technicality. His motion for reconsideration was denied
with finality on January 13, 1999. On February 23, 1999, the
resolution of the Supreme Court dismissing the petition of Special
Administrator Jose Ortaez became final and was subsequently
recorded in the book of entries of judgments.
Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with
the rest of the FLAG-controlled board of directors, increased the
authorized capital stock of Philinterlife, diluting in the process the
50.725% controlling interest of the decedent, Dr. Juvencio
Ortaez, in the insurance company.9 This became the subject of a
separate action at the Securities and Exchange Commission filed
by private respondent-Special Administratrix Enderes against
petitioner Jose Lee and other members of the FLAG-controlled
board of Philinterlife on November 7, 1994. Thereafter, various
cases were filed by Jose Lee as president of Philinterlife and
Juliana Ortaez and her sons against private respondent-Special
Administratrix Enderes in the SEC and civil courts. 10 Somehow, all
these cases were connected to the core dispute on the legality of

the sale of decedent Dr. Ortaezs Philinterlife shares of stock to


petitioner FLAG, represented by its president, herein petitioner
Jose Lee who later became the president of Philinterlife after the
controversial sale.
On May 2, 2000, private respondent-Special Administratrix
Enderes and her siblings filed a motion for execution of the Orders
of the intestate court dated August 11 and August 29, 1997
because the orders of the intestate court nullifying the sale (upheld
by the Court of Appeals and the Supreme Court) had long became
final. Respondent-Special Administratrix Enderes served a copy of
the motion to petitioners Jose Lee and Alma Aggabao as president
and secretary, respectively, of Philinterlife, 11 but petitioners ignored
the same.
On July 6, 2000, the intestate court granted the motion for
execution, the dispositive portion of which read:
WHEREFORE, premises considered, let a writ of execution issue
as follows:
1. Confirming the nullity of the sale of the 2,029
Philinterlife shares in the name of the Estate of Dr.
Juvencio Ortaez to Filipino Loan Assistance Group
(FLAG);
2. Commanding the President and the Corporate
Secretary of Philinterlife to reinstate in the stock and
transfer book of Philinterlife the 2,029 Philinterlife shares
of stock in the name of the Estate of Dr. Juvencio P.
Ortaez as the owner thereof without prejudice to other
claims for violation of pre-emptive rights pertaining to the
said 2,029 Philinterlife shares;
3. Directing the President and the Corporate Secretary of
Philinterlife to issue stock certificates of Philinterlife for
2,029 shares in the name of the Estate of Dr. Juvencio P.
Ortaez as the owner thereof without prejudice to other
claims for violations of pre-emptive rights pertaining to
the said 2,029 Philinterlife shares and,
4. Confirming that only the Special Administratrix, Ma.
Divina Ortaez-Enderes, has the power to exercise all
the rights appurtenant to the said shares, including the
right to vote and to receive dividends.
5. Directing Philinterlife and/or any other person or
persons claiming to represent it or otherwise, to
acknowledge and allow the said Special Administratrix to
exercise all the aforesaid rights on the said shares and to
refrain from resorting to any action which may tend
directly or indirectly to impede, obstruct or bar the free
exercise thereof under pain of contempt.
6. The President, Corporate Secretary, any responsible
officer/s of Philinterlife, or any other person or persons
claiming to represent it or otherwise, are hereby directed
to comply with this order within three (3) days from
receipt hereof under pain of contempt.

7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja


are hereby directed to implement the writ of execution
with dispatch to forestall any and/or further damage to
the Estate.
SO ORDERED.12
In the several occasions that the sheriff went to the office of
petitioners to execute the writ of execution, he was barred by the
security guard upon petitioners instructions. Thus, private
respondent-Special Administratrix Enderes filed a motion to cite
herein petitioners Jose Lee and Alma Aggabao (president and
secretary, respectively, of Philinterlife) in contempt.13
Petitioners Lee and Aggabao subsequently filed before the Court
of Appeals a petition for certiorari, docketed as CA G.R. SP No.
59736. Petitioners alleged that the intestate court gravely abused
its discretion in (1) declaring that the ownership of FLAG over the
Philinterlife shares of stock was null and void; (2) ordering the
execution of its order declaring such nullity and (3) depriving the
petitioners of their right to due process.
On July 26, 2000, the Court of Appeals dismissed the petition
outright:
We are constrained to DISMISS OUTRIGHT the present petition
for certiorari and prohibition with prayer for a temporary restraining
order and/or writ of preliminary injunction in the light of the
following considerations:
1. The assailed Order dated August 11, 1997 of the
respondent judge had long become final and executory;
2. The certification on non-forum shopping is signed by
only one (1) of the three (3) petitioners in violation of the
Rules; and
3. Except for the assailed orders and writ of execution,
deed of sale with right to repurchase, deed of sale of
shares of stocks and omnibus motion, the petition is not
accompanied by such pleadings, documents and other
material portions of the record as would support the
allegations therein in violation of the second paragraph,
Rule 65 of the 1997 Rules of Civil Procedure, as
amended.
Petition is DISMISSED.
SO ORDERED.14
The motion for reconsideration filed by petitioners Lee and
Aggabao of the above decision was denied by the Court of
Appeals on October 30, 2000:
This resolves the "urgent motion for reconsideration" filed by the
petitioners of our resolution of July 26, 2000 dismissing outrightly
the above-entitled petition for the reason, among others, that the
assailed Order dated August 11, 1997 of the respondent Judge
had long become final and executory.
Dura lex, sed lex.

WHEREFORE, the urgent motion for reconsideration is hereby


DENIED, for lack of merit.
SO ORDERED.15
On December 4, 2000, petitioners elevated the case to the
Supreme Court through a petition for review under Rule 45 but on
December 13, 2000, we denied the petition because there was no
showing that the Court of Appeals in CA G.R. SP No. 59736
committed any reversible error to warrant the exercise by the
Supreme Court of its discretionary appellate jurisdiction.16
However, upon motion for reconsideration filed by petitioners Lee
and Aggabao, the Supreme Court granted the motion and
reinstated their petition on September 5, 2001. The parties were
then required to submit their respective memoranda.
Meanwhile, private respondent-Special Administratrix Enderes, on
July 19, 2000, filed a motion to direct the branch clerk of court in
lieu of herein petitioners Lee and Aggabao to reinstate the name of
Dr. Ortaez in the stock and transfer book of Philinterlife and issue
the corresponding stock certificate pursuant to Section 10, Rule 39
of the Rules of Court which provides that "the court may direct the
act to be done at the cost of the disobedient party by some other
person appointed by the court and the act when so done shall
have the effect as if done by the party." Petitioners Lee and
Aggabao opposed the motion on the ground that the intestate
court should refrain from acting on the motion because the issues
raised therein were directly related to the issues raised by them in
their petition for certiorari at the Court of Appeals docketed as CAG.R. SP No. 59736. On October 30, 2000, the intestate court
granted the motion, ruling that there was no prohibition for the
intestate court to execute its orders inasmuch as the appellate
court did not issue any TRO or writ of preliminary injunction.
On December 3, 2000, petitioners Lee and Aggabao filed a petition
for certiorari in the Court of Appeals, docketed as CA-G.R. SP No.
62461, questioning this time the October 30, 2000 order of the
intestate court directing the branch clerk of court to issue the stock
certificates. They also questioned in the Court of Appeals the order
of the intestate court nullifying the sale made in their favor by
Juliana Ortaez and Jose Ortaez. On November 20, 2002, the
Court of Appeals denied their petition and upheld the power of the
intestate court to execute its order. Petitioners Lee and Aggabao
then filed motion for reconsideration which at present is still
pending resolution by the Court of Appeals.
Petitioners Jose Lee and Alma Aggabao (president and secretary,
respectively, of Philinterlife) and FLAG now raise the following
errors for our consideration:
The Court of Appeals committed grave reversible ERROR:
A. In failing to reconsider its previous resolution denying
the petition despite the fact that the appellate courts
mistake in apprehending the facts had become patent
and evident from the motion for reconsideration and the
comment of respondent Enderes which had admitted the
factual allegations of petitioners in the petition as well as
in the motion for reconsideration. Moreover, the
resolution of the appellate court denying the motion for
reconsideration was contained in only one page without

even touching on the substantive merits of the


exhaustive discussion of facts and supporting law in the
motion for reconsideration in violation of the Rule on
administrative due process;
B. in failing to set aside the void orders of the intestate
court on the erroneous ground that the orders were final
and executory with regard to petitioners even as the
latter were never notified of the proceedings or order
canceling its ownership;
C. in not finding that the intestate court committed grave
abuse of discretion amounting to excess of jurisdiction
(1) when it issued the Omnibus Order nullifying the
ownership of petitioner FLAG over shares of stock which
were alleged to be part of the estate and (2) when it
issued a void writ of execution against petitioner FLAG
as present owner to implement merely provisional orders,
thereby violating FLAGs constitutional right against
deprivation of property without due process;

review on a technicality and thereafter denying the motion for


reconsideration on January 13, 1999 on the ground that there was
no compelling reason to reconsider said denial.18 Our decision
became final on February 23, 1999 and was accordingly entered in
the book of entry of judgments. For all intents and purposes
therefore, the nullity of the sale of the Philinterlife shares of stock
made by Juliana Ortaez and Jose Ortaez in favor of petitioner
FLAG is already a closed case. To reopen said issue would set a
bad precedent, opening the door wide open for dissatisfied parties
to relitigate unfavorable decisions no end. This is completely
inimical to the orderly and efficient administration of justice.
The said decision of the Court of Appeals in CA-G.R. SP No.
46342 affirming the nullity of the sale made by Jose Ortaez and
his mother Juliana Ortaez of the Philinterlife shares of stock read:
Petitioners asseverations relative to said [memorandum]
agreement were scuttled during the hearing before this Court thus:
JUSTICE AQUINO:

D. In failing to declare null and void the orders of the


intestate court which nullified the sale of shares of stock
between the legitimate heir Jose S. Ortaez and
petitioner FLAG because of settled law and
jurisprudence, i.e., that an heir has the right to dispose of
the decedents property even if the same is under
administration pursuant to Civil Code provision that
possession of hereditary property is transmitted to the
heir the moment of death of the decedent (Acedebo vs.
Abesamis, 217 SCRA 194);

Counsel for petitioner, when the Memorandum of


Agreement was executed, did the children of Juliana
Salgado know already that there was a claim for share in
the inheritance of the children of Novicio?

E. In disregarding the final decision of the Supreme Court


in G.R. No. 128525 dated December 17, 1999 involving
substantially the same parties, to wit, petitioners Jose C.
Lee and Alma Aggabao were respondents in that case
while respondent Ma. Divina Enderes was the petitioner
therein. That decision, which can be considered law of
the case, ruled that petitioners cannot be enjoined by
respondent Enderes from exercising their power as
directors and officers of Philinterlife and that the intestate
court in charge of the intestate proceedings cannot
adjudicate title to properties claimed to be part of the
estate and which are equally CLAIMED BY petitioner
FLAG.17

JUSTICE AQUINO:

The petition has no merit.


Petitioners Jose Lee and Alma Aggabao, representing Philinterlife
and FLAG, assail before us not only the validity of the writ of
execution issued by the intestate court dated July 7, 2000 but also
the validity of the August 11, 1997 order of the intestate court
nullifying the sale of the 2,029 Philinterlife shares of stock made by
Juliana Ortaez and Jose Ortaez, in their personal capacities and
without court approval, in favor of petitioner FLAG.
We cannot allow petitioners to reopen the issue of nullity of the
sale of the Philinterlife shares of stock in their favor because this
was already settled a long time ago by the Court of Appeals in its
decision dated June 23, 1998 in CA-G.R. SP No. 46342. This
decision was effectively upheld by us in our resolution dated
October 9, 1998 in G.R. No. 135177 dismissing the petition for

ATTY. CALIMAG:
Your Honor please, at that time, Your Honor, it is already
known to them.

What can be your legal justification for extrajudicial


settlement of a property subject of intestate proceedings
when there is an adverse claim of another set of heirs,
alleged heirs? What would be the legal justification for
extra-judicially settling a property under administration
without the approval of the intestate court?
ATTY. CALIMAG:
Well, Your Honor please, in that extra-judicial settlement
there is an approval of the honorable court as to the
propertys partition x x x. There were as mentioned by the
respondents counsel, Your Honor.
ATTY. BUYCO:
No
JUSTICE AQUINO:
The point is, there can be no adjudication of a property
under intestate proceedings without the approval of the
court. That is basic unless you can present justification
on that. In fact, there are two steps: first, you ask leave
and then execute the document and then ask for
approval of the document executed. Now, is there any

legal justification to exclude this particular transaction


from those steps?
ATTY. CALIMAG:
None, Your Honor.
ATTY. BUYCO:
With that admission that there is no legal justification,
Your Honor, we rest the case for the private respondent.
How can the lower court be accused of abusing its
discretion? (pages 33-35, TSN of January 29, 1998).
Thus, We find merit in the following postulation by private
respondent:
What we have here is a situation where some of the heirs of the
decedent without securing court approval have appropriated as
their own personal property the properties of [the] Estate, to the
exclusion and the extreme prejudice of the other claimant/heirs. In
other words, these heirs, without court approval, have distributed
the asset of the estate among themselves and proceeded to
dispose the same to third parties even in the absence of an order
of distribution by the Estate Court. As admitted by petitioners
counsel, there was absolutely no legal justification for this action
by the heirs. There being no legal justification, petitioner has no
basis for demanding that public respondent [the intestate court]
approve the sale of the Philinterlife shares of the Estate by Juliana
and Jose Ortaez in favor of the Filipino Loan Assistance Group.
It is an undisputed fact that the parties to the Memorandum of
Agreement dated March 4, 1982 (see Annex 7 of the Comment). . .
are not the only heirs claiming an interest in the estate left by Dr.
Juvencio P. Ortaez. The records of this case. . . clearly show that
as early as March 3, 1981 an Opposition to the Application for
Issuance of Letters of Administration was filed by the
acknowledged natural children of Dr. Juvencio P. Ortaez with
Ligaya Novicio. . . This claim by the acknowledged natural children
of Dr. Juvencio P. Ortaez is admittedly known to the parties to the
Memorandum of Agreement before they executed the same. This
much was admitted by petitioners counsel during the oral
argument. xxx
Given the foregoing facts, and the applicable jurisprudence, public
respondent can never be faulted for not approving. . . the
subsequent sale by the petitioner [Jose Ortaez] and his mother
[Juliana Ortaez] of the Philinterlife shares belonging to the Estate
of Dr. Juvencio P. Ortaez." (pages 3-4 of Private Respondents
Memorandum; pages 243-244 of the Rollo)
Amidst the foregoing, We found no grave abuse of discretion
amounting to excess or want of jurisdiction committed by
respondent judge.19
From the above decision, it is clear that Juliana Ortaez, and her
three sons, Jose, Rafael and Antonio, all surnamed Ortaez,
invalidly entered into a memorandum of agreement extrajudicially
partitioning the intestate estate among themselves, despite their
knowledge that there were other heirs or claimants to the estate
and before final settlement of the estate by the intestate court.

Since the appropriation of the estate properties by Juliana Ortaez


and her children (Jose, Rafael and Antonio Ortaez) was invalid,
the subsequent sale thereof by Juliana and Jose to a third party
(FLAG), without court approval, was likewise void.
An heir can sell his right, interest, or participation in the property
under administration under Art. 533 of the Civil Code which
provides that possession of hereditary property is deemed
transmitted to the heir without interruption from the moment of
death of the decedent.20 However, an heir can only alienate such
portion of the estate that may be allotted to him in the division of
the estate by the probate or intestate court after final adjudication,
that is, after all debtors shall have been paid or the devisees or
legatees shall have been given their shares. 21 This means that an
heir may only sell his ideal or undivided share in the estate, not
any specific property therein. In the present case, Juliana Ortaez
and Jose Ortaez sold specific properties of the estate (1,014 and
1,011 shares of stock in Philinterlife) in favor of petitioner FLAG.
This they could not lawfully do pending the final adjudication of the
estate by the intestate court because of the undue prejudice it
would cause the other claimants to the estate, as what happened
in the present case.
Juliana Ortaez and Jose Ortaez sold specific properties of the
estate, without court approval. It is well-settled that court approval
is necessary for the validity of any disposition of the decedents
estate. In the early case of Godoy vs. Orellano,22 we laid down the
rule that the sale of the property of the estate by an administrator
without the order of the probate court is void and passes no title to
the purchaser. And in the case of Dillena vs. Court of Appeals,23 we
ruled that:
[I]t must be emphasized that the questioned properties (fishpond)
were included in the inventory of properties of the estate submitted
by then Administratrix Fausta Carreon Herrera on November 14,
1974. Private respondent was appointed as administratrix of the
estate on March 3, 1976 in lieu of Fausta Carreon Herrera. On
November 1, 1978, the questioned deed of sale of the fishponds
was executed between petitioner and private respondent without
notice and approval of the probate court. Even after the sale,
administratrix Aurora Carreon still included the three fishponds as
among the real properties of the estate in her inventory submitted
on August 13, 1981. In fact, as stated by the Court of Appeals,
petitioner, at the time of the sale of the fishponds in question, knew
that the same were part of the estate under administration.
xxx

xxx

xxx

The subject properties therefore are under the jurisdiction of the


probate court which according to our settled jurisprudence has the
authority to approve any disposition regarding properties under
administration. . . More emphatic is the declaration We made in
Estate of Olave vs. Reyes (123 SCRA 767) where We stated that
when the estate of the deceased person is already the subject of a
testate or intestate proceeding, the administrator cannot enter into
any transaction involving it without prior approval of the probate
court.
Only recently, in Manotok Realty, Inc. vs. Court of Appeals (149
SCRA 174), We held that the sale of an immovable property
belonging to the estate of a decedent, in a special proceedings,
needs court approval. . . This pronouncement finds support in the

previous case of Dolores Vda. De Gil vs. Agustin Cancio (14 SCRA
797) wherein We emphasized that it is within the jurisdiction of a
probate court to approve the sale of properties of a deceased
person by his prospective heirs before final adjudication. x x x
It being settled that property under administration needs the
approval of the probate court before it can be disposed of, any
unauthorized disposition does not bind the estate and is null and
void. As early as 1921 in the case of Godoy vs. Orellano (42 Phil
347), We laid down the rule that a sale by an administrator of
property of the deceased, which is not authorized by the probate
court is null and void and title does not pass to the purchaser.
There is hardly any doubt that the probate court can declare null
and void the disposition of the property under administration, made
by private respondent, the same having been effected without
authority from said court. It is the probate court that has the power
to authorize and/or approve the sale (Section 4 and 7, Rule 89),
hence, a fortiori, it is said court that can declare it null and void for
as long as the proceedings had not been closed or terminated. To
uphold petitioners contention that the probate court cannot annul
the unauthorized sale, would render meaningless the power
pertaining to the said court. (Bonga vs. Soler, 2 SCRA 755).
(emphasis ours)
Our jurisprudence is therefore clear that (1) any disposition of
estate property by an administrator or prospective heir pending
final adjudication requires court approval and (2) any unauthorized
disposition of estate property can be annulled by the probate court,
there being no need for a separate action to annul the
unauthorized disposition.
The question now is: can the intestate or probate court execute its
order nullifying the invalid sale?
We see no reason why it cannot. The intestate court has the power
to execute its order with regard to the nullity of an unauthorized
sale of estate property, otherwise its power to annul the
unauthorized or fraudulent disposition of estate property would be
meaningless. In other words, enforcement is a necessary adjunct
of the intestate or probate courts power to annul unauthorized or
fraudulent transactions to prevent the dissipation of estate property
before final adjudication.
Moreover, in this case, the order of the intestate court nullifying the
sale was affirmed by the appellate courts (the Court of Appeals in
CA-G.R. SP No. 46342 dated June 23, 1998 and subsequently by
the Supreme Court in G.R. No. 135177 dated October 9, 1998).
The finality of the decision of the Supreme Court was entered in
the book of entry of judgments on February 23, 1999. Considering
the finality of the order of the intestate court nullifying the sale, as
affirmed by the appellate courts, it was correct for private
respondent-Special Administratrix Enderes to thereafter move for a
writ of execution and for the intestate court to grant it.

excluded in the inventory In ordering the execution of the orders,


respondent judge acted in excess of his jurisdiction and grossly
violated settled law and jurisprudence, i.e., that the determination
by a probate or intestate court of whether a property is included or
excluded in the inventory of the estate being provisional in nature,
cannot be the subject of execution.24 (emphasis ours)
Petitioners argument is misplaced. There is no question, based on
the facts of this case, that the Philinterlife shares of stock were part
of the estate of Dr. Juvencio Ortaez from the very start as in fact
these shares were included in the inventory of the properties of the
estate submitted by Rafael Ortaez after he and his brother, Jose
Ortaez, were appointed special administrators by the intestate
court.25
The controversy here actually started when, during the pendency
of the settlement of the estate of Dr. Ortaez, his wife Juliana
Ortaez sold the 1,014 Philinterlife shares of stock in favor
petitioner FLAG without the approval of the intestate court. Her son
Jose Ortaez later sold the remaining 1,011 Philinterlife shares
also in favor of FLAG without the approval of the intestate court.
We are not dealing here with the issue of inclusion or exclusion of
properties in the inventory of the estate because there is no
question that, from the very start, the Philinterlife shares of stock
were owned by the decedent, Dr. Juvencio Ortaez. Rather, we
are concerned here with the effect of the sale made by the
decedents heirs, Juliana Ortaez and Jose Ortaez, without
the required approval of the intestate court. This being so, the
contention of petitioners that the determination of the intestate
court was merely provisional and should have been threshed out in
a separate proceeding is incorrect.
The petitioners Jose Lee and Alma Aggabao next contend that the
writ of execution should not be executed against them because
they were not notified, nor they were aware, of the proceedings
nullifying the sale of the shares of stock.
We are not persuaded. The title of the purchaser like herein
petitioner FLAG can be struck down by the intestate court after a
clear showing of the nullity of the alienation. This is the logical
consequence of our ruling in Godoy and in several subsequent
cases.26 The sale of any property of the estate by an
administrator or prospective heir without order of the probate
or intestate court is void and passes no title to the purchaser.
Thus, in Juan Lao et al. vs. Hon. Melencio Geneto, G.R. No.
56451, June 19, 1985, we ordered the probate court to cancel the
transfer certificate of title issued to the vendees at the instance of
the administrator after finding that the sale of real property under
probate proceedings was made without the prior approval of the
court. The dispositive portion of our decision read:

Petitioners Jose Lee, Alma Aggabao and FLAG, however, contend


that the probate court could not issue a writ of execution with
regard to its order nullifying the sale because said order was
merely provisional:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the assailed


Order dated February 18, 1981 of the respondent Judge approving
the questioned Amicable Settlement is declared NULL and VOID
and hereby SET ASIDE. Consequently, the sale in favor of Sotero
Dioniosio III and by the latter to William Go is likewise declared
NULL and VOID. The Transfer Certificate of Title issued to the
latter is hereby ordered cancelled.

The only authority given by law is for respondent judge to


determine provisionally whether said shares are included or

It goes without saying that the increase in Philinterlifes authorized


capital stock, approved on the vote of petitioners non-existent

shareholdings and obviously calculated to make it difficult for Dr.


Ortaezs estate to reassume its controlling interest in Philinterlife,
was likewise void ab initio.
Petitioners next argue that they were denied due process.
We do not think so.
The facts show that petitioners, for reasons known only to them,
did not appeal the decision of the intestate court nullifying the sale
of shares of stock in their favor. Only the vendor, Jose Ortaez,
appealed the case. A careful review of the records shows that
petitioners had actual knowledge of the estate settlement
proceedings and that they knew private respondent Enderes was
questioning therein the sale to them of the Philinterlife shares of
stock.
It must be noted that private respondent-Special Administratrix
Enderes filed before the intestate court (RTC of Quezon City,
Branch 85) a "Motion to Declare Void Ab Initio Deeds of Sale of
Philinterlife Shares of Stock" on March 22, 1996. But as early as
1994, petitioners already knew of the pending settlement
proceedings and that the shares they bought were under the
administration by the intestate court because private respondent
Ma. Divina Ortaez-Enderes and her mother Ligaya Novicio had
filed a case against them at the Securities and Exchange
Commission on November 7, 1994, docketed as SEC No. 11-944909, for annulment of transfer of shares of stock, annulment of
sale of corporate properties, annulment of subscriptions on
increased capital stocks, accounting, inspection of corporate books
and records and damages with prayer for a writ of preliminary
injunction and/or temporary restraining order.27 In said case,
Enderes and her mother questioned the sale of the aforesaid
shares of stock to petitioners. The SEC hearing officer in fact, in
his resolution dated March 24, 1995, deferred to the jurisdiction of
the intestate court to rule on the validity of the sale of shares of
stock sold to petitioners by Jose Ortaez and Juliana Ortaez:
Petitioners also averred that. . . the Philinterlife shares of Dr.
Juvencio Ortaez who died, in 1980, are part of his estate which is
presently the subject matter of an intestate proceeding of the RTC
of Quezon City, Branch 85. Although, private respondents [Jose
Lee et al.] presented the documents of partition whereby the
foregoing share of stocks were allegedly partitioned and conveyed
to Jose S. Ortaez who allegedly assigned the same to the other
private respondents, approval of the Court was not presented.
Thus, the assignments to the private respondents [Jose Lee et al.]
of the subject shares of stocks are void.
xxx

xxx

xxx

With respect to the alleged extrajudicial partition of the shares of


stock owned by the late Dr. Juvencio Ortaez, we rule that the
matter properly belongs to the jurisdiction of the regular court
where the intestate proceedings are currently pending.28
With this resolution of the SEC hearing officer dated as early as
March 24, 1995 recognizing the jurisdiction of the intestate court to
determine the validity of the extrajudicial partition of the estate of
Dr. Ortaez and the subsequent sale by the heirs of the decedent
of the Philinterlife shares of stock to petitioners, how can

petitioners claim that they were not aware of the intestate


proceedings?
Furthermore, when the resolution of the SEC hearing officer
reached the Supreme Court in 1996 (docketed as G.R. 128525),
herein petitioners who were respondents therein filed their answer
which contained statements showing that they knew of the pending
intestate proceedings:
[T]he subject matter of the complaint is not within the jurisdiction of
the SEC but with the Regional Trial Court; Ligaya Novicio and
children represented themselves to be the common law wife and
illegitimate children of the late Ortaez; that on March 4, 1982, the
surviving spouse Juliana Ortaez, on her behalf and for her minor
son Antonio, executed a Memorandum of Agreement with her
other sons Rafael and Jose, both surnamed Ortaez, dividing the
estate of the deceased composed of his one-half (1/2) share in the
conjugal properties; that in the said Memorandum of Agreement,
Jose S. Ortaez acquired as his share of the estate the 1,329
shares of stock in Philinterlife; that on March 4, 1982, Juliana and
Rafael assigned their respective shares of stock in Philinterlife to
Jose; that contrary to the contentions of petitioners, private
respondents Jose Lee, Carlos Lee, Benjamin Lee and Alma
Aggabao became stockholders of Philinterlife on March 23, 1983
when Jose S. Ortaez, the principal stockholder at that time,
executed a deed of sale of his shares of stock to private
respondents; and that the right of petitioners to question the
Memorandum of Agreement and the acquisition of shares of stock
of private respondent is barred by prescription.29
Also, private respondent-Special Administratrix Enderes offered
additional proof of actual knowledge of the settlement proceedings
by petitioners which petitioners never denied: (1) that petitioners
were represented by Atty. Ricardo Calimag previously hired by the
mother of private respondent Enderes to initiate cases against
petitioners Jose Lee and Alma Aggabao for the nullification of the
sale of the shares of stock but said counsel made a conflicting
turn-around and appeared instead as counsel of petitioners, and
(2) that the deeds of sale executed between petitioners and the
heirs of the decedent (vendors Juliana Ortaez and Jose Ortaez)
were acknowledged before Atty. Ramon Carpio who, during the
pendency of the settlement proceedings, filed a motion for the
approval of the sale of Philinterlife shares of stock to the Knights of
Columbus Fraternal Association, Inc. (which motion was, however,
later abandoned).30 All this sufficiently proves that petitioners,
through their counsels, knew of the pending settlement
proceedings.
Finally, petitioners filed several criminal cases such as libel
(Criminal Case No. 97-7179-81), grave coercion (Criminal Case
No. 84624) and robbery (Criminal Case No. Q-96-67919) against
private respondents mother Ligaya Novicio who was a director of
Philinterlife,31 all of which criminal cases were related to the
questionable sale to petitioners of the Philinterlife shares of stock.
Considering these circumstances, we cannot accept petitioners
claim of denial of due process. The essence of due process is the
reasonable opportunity to be heard. Where the opportunity to be
heard has been accorded, there is no denial of due process. 32 In
this case, petitioners knew of the pending instestate proceedings
for the settlement of Dr. Juvencio Ortaezs estate but for reasons
they alone knew, they never intervened. When the court declared
the nullity of the sale, they did not bother to appeal. And when they

were notified of the motion for execution of the Orders of the


intestate court, they ignored the same. Clearly, petitioners alone
should bear the blame.

vs.
SAMUEL RABANILLO, Respondent.
DECISION

Petitioners next contend that we are bound by our ruling in G.R.


No. 128525 entitled Ma. Divina Ortaez-Enderes vs. Court of
Appeals, dated December 17, 1999, where we allegedly ruled that
the intestate court "may not pass upon the title to a certain
property for the purpose of determining whether the same should
or should not be included in the inventory but such determination is
not conclusive and is subject to final decision in a separate action
regarding ownership which may be constituted by the parties."
We are not unaware of our decision in G.R. No. 128525. The issue
therein was whether the Court of Appeals erred in affirming the
resolution of the SEC that Enderes et al. were not entitled to the
issuance of the writ of preliminary injunction. We ruled that the
Court of Appeals was correct in affirming the resolution of the SEC
denying the issuance of the writ of preliminary injunction because
injunction is not designed to protect contingent rights. Said case
did not rule on the issue of the validity of the sale of shares of
stock belonging to the decedents estate without court approval nor
of the validity of the writ of execution issued by the intestate court.
G.R. No. 128525 clearly involved a different issue and it does not
therefore apply to the present case.
Petitioners and all parties claiming rights under them are hereby
warned not to further delay the execution of the Orders of the
intestate court dated August 11 and August 29, 1997.

CORONA, J.:
This petition for review seeks the reversal of the decision 1 of the
Court of Appeals (CA) dated October 29, 2001 in CA-G.R. CV No.
60069, the dispositive portion of which read:
WHEREFORE, the decision rendered in Civil Case No. Q-9626270 on February 27, 1998 is hereby REVERSED and SET
ASIDE. As prayed for in the answer, Transfer Certificate of Title
No. 56210 over the 240 square-meter lot located at 92 (now 102)
K-5th Street, Kamuning, Quezon City issued in the name of
Eusebio Pigaos children is hereby ordered CANCELLED and the
Register of Deeds of Quezon City is hereby ordered to ISSUE a
new one in lieu thereof in the names of both Eusebio Pigaos
children and Samuel Rabanillo, with the front half portion of the lot
pertaining to the latter and the back half portion pertaining to the
former.
Let a copy of this decision be furnished the Register of Deeds of
Quezon City for proper action.
SO ORDERED.2
The antecedent facts follow.

WHEREFORE, the petition is hereby DENIED. The decision of the


Court of Appeals in CA-G.R. S.P. No. 59736 dated July 26, 2000,
dismissing petitioners petition for certiorari and affirming the July
6, 2000 order of the trial court which ordered the execution of its
(trial courts) August 11 and 29, 1997 orders, is hereby AFFIRMED.
SO ORDERED.

Sometime in 1947, the late Eusebio Pigao, petitioners father,


together with his family, settled on a 240 square meter lot located
at 92 (now 102) K-5th Street, Kamuning, Quezon City. The parcel
of land used to be government property owned by the Peoples
Homesite and Housing Corporation (PHHC), 3 under Transfer
Certificate of Title (TCT) No. 27287. 4 Eusebio applied for the
purchase of the subject lot and a contract to sell for a
consideration of P1,022.19 was thereafter entered into by Eusebio
and PHHC.
In 1959, Eusebio executed a deed of assignment of rights over
one-half of the property in favor of respondent, for a consideration
of P1,000. Respondent proceeded to occupy the front half portion,
established a residential building thereon, and paid the
amortizations for the said portion.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 150712

May 2, 2006

ESTRELLA PIGAO, ROMEO PIGAO, EMMANUEL PIGAO,


ISABELITA ABAD, PURITA SARTIGA, CESAR PIGAO,
TERESITA PIGAO, VIRGILIO PIGAO and EVANGELINE
KIUNISALA, Petitioners,

In 1970, Eusebio executed a deed of mortgage over the same halfportion of the property in favor of respondent. After the
amortizations on the subject lot were fully paid in 1973, the PHHC
issued a deed of sale over the entire lot in favor of Eusebio.
Consequently, TCT No. 197941 was issued in Eusebios name. In
1978, respondent executed an affidavit of adverse claim over the
front half portion of the lot registered in Eusebios name. This
affidavit was duly annotated on TCT No. 197941. On June 17,
1979, Eusebio died and was survived by his children, herein
petitioners.
In 1988, after the Office of the Register of Deeds of Quezon City
was gutted by fire, petitioner Estrella Pigao applied for the
reconstitution of the original of TCT No. 197941 that was burned.
This was approved in 1990 and TCT No. RT-11374 was issued,

still in the name of Eusebio. This reconstituted title no longer


carried the annotation of the adverse claim of respondent.
In 1992, petitioners executed an extrajudicial settlement of
Eusebios estate among themselves, including the entire subject
lot. As a consequence, TCT No. 56210 was issued for the entire lot
in the name of petitioners. Respondent continued to occupy the
front half portion through his tenant, Gil Ymata. On January 29,
1996, petitioners instituted civil case no. Q-96-26270 in the
Regional Trial Court (RTC) of Quezon City, Branch 95, against
respondent and Ymata wherein they sought to quiet their title over
the entire lot and to recover possession of the front half portion.
They averred that Eusebios deed of assignment and deed of
mortgage were clouds on their title which should be nullified. 5 The
RTC ruled in favor of petitioners:
WHEREFORE, judgment is hereby rendered in the following:
1. Declaring [petitioners] the absolute owners of the
entire land described in TCT No. 56210 and declaring the
deed of assignment issued by the late Eusebio Pigao in
favor of [respondent] null and void.
2. Ordering [petitioners] to pay [respondent] the value of
the house and improvements thereon in the event that
they choose to appropriate the same in which case
[respondent] is given the right of retention until he has
been reimbursed by [petitioners]; or to compel
[respondent] to buy the land in case they choose not to.
In the latter case, [respondent] cannot be compelled to
buy the land if the value thereof is higher than the value
of the improvements.
3. Dismissing the case against defendant Gil Ymata for
lack of cause of action there being no privity of contract
between him and [petitioners];
4. Dismissing both [petitioners] and [respondents]
claims for damages and attorneys fees there being no
satisfactory warrant thereto; and
5. No pronouncements as to costs.
IT IS SO ORDERED.6
As stated earlier, the CA reversed the RTC decision and ruled in
favor of respondent.
Petitioners filed this petition on the following grounds:
I.
THE [CA] ERRED IN DECLARING THAT THE SUBJECT DEED
OF ASSIGNMENT IS VALID AND THAT THERE IS NO
PROHIBITION [AGAINST] THE SALE [OF] RIGHTS OVER THE
AWARDED LOT MADE BY EUSEBIO PIGAO.
II.

THE [CA] ERRED IN DECLARING THAT A RELATIONSHIP OF


IMPLIED TRUST OVER THE [ONE-HALF] (1/2) PORTION OF
THE SUBJECT LOT WAS CREATED BETWEEN EUSEBIO
PIGAO AND [RESPONDENT].7
The first issue before us is the validity of the deed of assignment
whereby Eusebio assigned to respondent his rights to half of the
lot. Petitioners argue that the lot subject of this case was public
land granted by the PHHC to their predecessor, Eusebio. Hence,
they contend that Section 118 of Commonwealth Act No. 141 (CA
141)8 otherwise known as the Public Land Act, was applicable:
Sec. 118. Except in favor of the Government or any of its
branches, units, or institutions, lands acquired under free patent
or homestead provisions shall not be subject to encumbrance
or alienation from the date of the approval of the application
and for a term of five years from and after the date of
issuance of the patent or grant, nor shall they become liable to
the satisfaction of any debt contracted prior to the expiration of
said period, but the improvements or crops on the land may be
mortgaged or pledged to qualified persons, associations, or
corporations. (emphasis supplied)
xxx xxx xxx
Petitioners assert that the deed of assignment was null and void
because it was entered into during the prohibited period, 9 i.e., the
entire period from the date of approval of Eusebios application to
purchase up to five years from and after the date of issuance of
the patent to him in 1973. Respondent counters that CA 141 did
not apply because it covered only homestead or sales patents.10
We agree that CA 141 was inapplicable. The proscription under CA
141 on re-sale within the five-year restricted period referred to free
patents and homestead lands only.11 Here, the lot in dispute was
neither homestead land nor one acquired through patent. It was
owned by PHHC, a government corporation,12 under TCT No.
27287.131avvphil.net
It was not disputed that Eusebio and respondent entered into a
deed of assignment in 1959, long before PHHC executed a (final)
deed of sale in favor of Eusebio in 1973. At that time, title to the lot
was still in the name of PHHC. The deed of assignment itself
explicitly stated that the property was "owned by the PHHC." 14 And
when the (final) deed of sale was issued by PHHC in favor of
Eusebio in 1973, this deed contained a prohibition against the
alienation of the lot:
(2) Within a period of one year from the issuance of the Certificate
of Title by virtue of this deed, no transfer or alienation whatsoever
of the property subject hereof, in whole or in part, shall be made or
registered without the written consent of the Vendor, and such
transfer or alienation may be made only in favor of persons
qualified to acquire residential lands under the laws of the
Philippines.15
The CA, however, held that what was assigned by Eusebio in 1959
was his right to buy, own and occupy the front half portion of the lot
and not the lot itself. It went on to conclude that the deed of
assignment was perfectly valid since Eusebio was under no
prohibition to sell such right.

Petitioners insist there was such a prohibition. To support their


claim, they request this Court to take judicial notice of the fact that
the pro-forma conditional contracts-to- sell between PHHC and
applicants for the purchase of its lots contained a condition stating
that "the applicant agree(d) not to sell, assign, encumber,
mortgage, lease, sublet or in any other manner affect his right
under this contract, at any time, in any manner whatsoever, in
whole or in part, without first obtaining the written consent of the
Corporation." Although they admitted that they failed to present
during the trial the conditional contract to sell between Eusebio
and PHHC, they claimed that they did not have a copy thereof. 16 In
fact, what they submitted to this Court was a copy of a conditional
contract to sell between a certain Armando Bernabe and the
PHHC pertaining to a lot located at 94 K-5th St., Kamuning,
Quezon City17 to prove the existence of the aforementioned
condition. Respondent objects to this attempt of petitioners to seek
admission of evidence which was presented neither during trial nor
on appeal.18
We agree with respondent. We cannot take cognizance of this
document the conditional contract to sell between Bernabe and
the PHHC alleged to be the pro-forma contract used by PHHC with
its applicants - which petitioners are presenting for the first time.
This document is not among the matters the law mandatorily
requires us to take judicial notice of. 19 Neither can we consider it of
public knowledge nor capable of unquestionable demonstration
nor ought to be known to judges because of their judicial
functions.20 We have held that:
Matters of judicial notice have three material requisites: (1) the
matter must be one of common and general knowledge; (2) it must
be well and authoritatively settled and not doubtful or uncertain;
and (3) it must be known to be within the limits of jurisdiction of the
court. The power of taking judicial notice is to be exercised by
courts with caution. Care must be taken that the requisite
notoriety exists and every reasonable doubt on the subject
should be promptly resolved in the negative.21 (emphasis
supplied)
Consequently, for this document to be properly considered by us, it
should have been presented during trial and formally offered as
evidence. Otherwise, we would be denying due process of law to
respondent:
It is settled that courts will only consider as evidence that which
has been formally offered. xxx If [petitioners] neglected to offer
[any document] in evidence, however vital [it] may be, [they] only
have themselves to blame, not respondent who was not even
given a chance to object as the documents were never offered in
evidence.
A document, or any article for that matter, is not evidence when it
is simply marked for identification; it must be formally offered, and
the opposing counsel given an opportunity to object to it or crossexamine the witness called upon to prove or identify it. A formal
offer is necessary since judges are required to base their findings
of fact and judgment only and strictly upon the evidence
offered by the parties at the trial. To allow a party to attach any
document to his pleading and then expect the court to consider it
as evidence may draw unwarranted consequences. The opposing
party will be deprived of his chance to examine the document and
object to its admissibility. The appellate court will have difficulty
reviewing documents not previously scrutinized by the court below.

The pertinent provisions of the Revised Rules of Court on the


inclusion on appeal of documentary evidence or exhibits in the
records cannot be stretched as to include such pleadings or
documents not offered at the hearing of the case.22
Besides, this document does not even pertain to the lot and parties
involved here. Accordingly, it is neither relevant nor material
evidence. But even assuming that it were, then it would
substantially affect the outcome of the case so respondent should
have been given the chance to scrutinize the document and object
to it during the trial of the case. It is too late to present it now when
nothing prevented petitioners from introducing it before.
Nevertheless, we hold that the deed of assignment between
Eusebio and respondent is null and void for being contrary to
public policy. Under PHHC rules, preference for the purchase of
residential lots from the PHHC was accorded to bona fide
occupants of such lots.23 This policy was supported by the PHHC
charter given that one of the purposes of the PHHC was:
to acquire, develop, improve, subdivide, lease and sell lands and
construct, lease and sell buildings or any interest therein in the
cities and populous towns in the Philippines with the object of
providing decent housing for those who may be found unable
otherwise to provide themselves therewith.24 (emphasis
supplied)
Eusebio, as a bona fide occupant of the subject lot, had a vested
right to buy the property. This did not, however, give him the
unbridled freedom to transfer his right to a third party, specially one
who was unqualified to avail of it. Undoubtedly, the PHHC was
clothed with authority to determine if a person was qualified to
purchase a residential lot from it. The right to purchase was a
personal right that the qualified applicant, as determined by PHHC,
must personally exercise. As a personal right, it could not be
transferred to just another person.
Any transfer of rights, to be valid, must be in line with the policy of
PHHC which was to provide "decent housing for those who may be
found unable otherwise to provide themselves therewith." Thus,
any transfer of an applicants right to buy a lot was invalid if done
without the consent of PHHC. The same policy was enunciated by
the terms of the deed of sale.25 There is no showing that the
PHHCs approval for the assignment of half of the lot to
respondent was ever obtained. Stated otherwise, there is no proof
that respondent would have been allowed to avail of the
preferential rights exclusively granted to bona fide occupants of
PHHC-owned lots like Eusebio. Thus, the assignment of rights by
Eusebio to respondent, who was not a bona fide occupant of the
lot, frustrated the public policy of the government. It should
therefore be struck down as null and void.
It follows that the second issue of whether an implied trust
relationship was created between Eusebio and his heirs as
trustees and respondent as beneficiary must also be resolved
against respondent. We do not agree with the reasoning of the CA:
xxx [A]fter the execution of the deed of assignment, [respondent]
proceeded to buy the front half portion from PHHC by paying the
amortizations due thereon in exercise of the right which he
purchased by way of deed of assignment. He also established his
residence on this portion since he was then secure in the

knowledge that he eventually will own the same portion having


also purchased this right to own in the deed of assignment.
Therefore, when the purchase price for the entire lot was finally
paid, the deed of its conveyance was finally executed and the title
to the entire lot was issued in Eusebio Pigaos name, an implied
trust relationship was created over the front half portion between
Pigao and [respondent].
Per Article 1448 of the Civil Code, "there is an implied trust when
property is sold, and the legal estate is granted to one party but the
price is paid by another for the purpose of having the beneficial
interest of the property." The former party is referred to as the
trustee, while the latter is referred to as the beneficiary.
In the case at bench, the trustee is Pigao, who, with the title to the
entire lot issued to him, holds the front half portion thereof in trust
for [respondent], who is the beneficiary.
xxx xxx xxx26
The CA declared that Article 1448 of the Civil Code was applicable:
Art. 1448. There is an implied trust when property is sold, and the
legal estate is granted to one party but the price is paid by another
for the purpose of having the beneficial interest of the property.
The former is the trustee, while the latter is the beneficiary.
xxx xxx xxx
In Morales v. Court of Appeals,27 we extensively discussed the
concept of "trust:"
A trust is the legal relationship between one person having an
equitable ownership in property and another person owning the
legal title to such property, the equitable ownership of the former
entitling him to the performance of certain duties and the exercise
of certain powers by the latter.
xxx xxx xxx
Trusts are either express or implied. Express trusts are created by
the intention of the trustor or of the parties, while implied trusts
come into being by operation of law, either through implication of
an intention to create a trust as a matter of law or through the
imposition of the trust irrespective of, and even contrary to, any
such intention. In turn, implied trusts are either resulting or
constructive trusts. Resulting trusts are based on the equitable
doctrine that valuable consideration and not legal title determines
the equitable title or interest and are presumed always to have
been contemplated by the parties. They arise from the nature or
circumstances of the consideration involved in a transaction
whereby one person thereby becomes invested with legal title but
is obligated in equity to hold his legal title for the benefit of another.
xxx xxx xxx
A resulting trust is exemplified by Article 1448 of the Civil Code xxx
The trust created under the first sentence of Article 1448 is
sometimes referred to as a purchase money resulting trust. The
trust is created in order to effectuate what the law presumes to

have been the intention of the parties in the circumstances that the
person to whom the land was conveyed holds it as trustee for the
person who supplied the purchase money.
To give rise to a purchase money resulting trust, it is essential that
there be:
1. an actual payment of money, property or services, or
an equivalent, constituting valuable consideration;
2. and such consideration must be furnished by the
alleged beneficiary of a resulting trust.
There are recognized exceptions to the establishment of an
implied resulting trust. The first is stated in the last part of Article
1448 itself. Thus, where A pays the purchase money and title is
conveyed by absolute deed to A's child or to a person to whom A
stands in loco parentis and who makes no express promise, a trust
does not result, the presumption being that a gift was intended.
Another exception is, of course, that in which an actual contrary
intention is proved. Also where the purchase is made in violation of
an existing statute and in evasion of its express provision, no trust
can result in favor of the party who is guilty of the fraud. 28
Another exception to the establishment of an implied resulting trust
under Article 1448 is when its enforcement contravenes public
policy. We have already ruled that the transfer of rights by Eusebio
to respondent was null and void ab initio for being contrary to
public policy. As we held in Ramos v. Court of Appeals:29
Otherwise stated, as an exception to the law on trusts, "[a]
trust or a provision in the terms of a trust is invalid if the
enforcement of the trust or provision would be against public
policy, even though its performance does not involve the
commission of a criminal or tortious act by the trustee." The parties
must necessarily be subject to the same limitations on allowable
stipulations in ordinary contracts, i.e., their stipulations must not be
contrary to law, morals, good customs, public order, or public
policy. What the parties then cannot expressly provide in their
contracts for being contrary to law and public policy, they cannot
impliedly or implicitly do so in the guise of a resulting trust. 30
(emphasis supplied)
Admittedly, respondent shouldered half of the amortizations which
were received by Eusebios wife31 and paid to the PHHC for the
purchase of the lot. He also paid for the realty taxes for the said
portion.32 However, this was not an implied trust wherein
petitioners held the title over the front half portion in trust for
respondent. Otherwise, it would again run against public policy.
WHEREFORE, the instant petition is hereby GRANTED. The
Court of Appeals decision dated October 29, 2001 in CA-G.R. CV
No. 60069 is REVERSED and SET ASIDE. The decision of the
Regional Trial Court of Quezon City, Branch 95 in Civil Case No.
Q-96-26270 is REINSTATED.
SO ORDERED.

Subsequently, all the heirs of the Aying siblings executed an ExtraJudicial Partition of Real Estate with Deed of Absolute Sale dated
March 3, 1964, conveying the subject parcel of land to herein
petitioner Aznar Brothers Realty Company. Said deed was
registered with the Register of Deeds of Lapu-Lapu City on March
6, 1964 under Act No. 3344 (the law governing registration for
unregistered land), and since then, petitioner had been religiously
paying real property taxes on said property.
In 1988, herein petitioner filed a Petition for Reconstitution of the
Original Title as the original title over the subject property had been
lost during the war. On April 12, 1988, the court granted said
petition, thereby directing the Register of Deeds of Lapu-Lapu City
to issue a reconstituted title in the name of the abovementioned
Aying siblings. Thus, Original Certificate of Title (OCT) No. RO2856 was issued.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 144773

May 16, 2005

AZNAR BROTHERS REALTY COMPANY, petitioner,


vs.
LAURENCIO AYING, IN HIS OWN BEHALF AND IN BEHALF OF
THE OTHER HEIRS OF EMILIANO AYING, PAULINO AYING, IN
HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF
SIMEON AYING, AND WENCESLAO SUMALINOG, IN HIS OWN
BEHALF AND IN BEHALF OF THE OTHER HEIRS OF
ROBERTA AYING, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the petition for review on certiorari seeking the
modification of the Decision1 of the Court of Appeals (CA) dated
March 7, 2000 which affirmed with modification the Decision of the
Regional Trial Court (RTC) of Lapu-Lapu City, Branch 27 in Civil
Case No. 2930-L; and the Resolution dated August 2, 2000
denying petitioners motion for reconsideration of the
aforementioned decision.
The antecedent facts are as follows:
The disputed property is Lot No. 4399 with an area of 34,325
square meters located at Dapdap, Lapu-Lapu City. Crisanta
Maloloy-on petitioned for the issuance of a cadastral decree in her
favor over said parcel of land. After her death in 1930, the
Cadastral Court issued a Decision directing the issuance of a
decree in the name of Crisanta Maloloy-ons eight children,
namely: Juan, Celedonio, Emiliano, Francisco, Simeon, Bernabe,
Roberta and Fausta, all surnamed Aying. The certificate of title
was, however, lost during the war.

In 1991, petitioner, claiming to be the rightful owner of the subject


property, sent out notices to vacate, addressed to persons
occupying the property. Unheeded, petitioner then filed a complaint
for ejectment against the occupants before the Metropolitan Trial
Court (MTC), Lapu-Lapu City.
On February 1, 1994, the MTC ordered the occupants to vacate
the property. The case eventually reached this Court, docketed as
G.R. No. 128102, entitled Aznar Brothers Realty Company vs.
Court of Appeals, Luis Aying, Demetrio Sida, Felomino Augusto,
Federico Abing, and Romeo Augusto.2 On March 7, 2000, a
Decision was promulgated in favor of herein petitioner, declaring it
as the rightful possessor of the parcel of land in question.
Meanwhile, herein respondents, along with other persons claiming
to be descendants of the eight Aying siblings, all in all numbering
around 220 persons, had filed a complaint for cancellation of the
Extra-Judicial Partition with Absolute Sale, recovery of ownership,
injunction and damages with the RTC of Lapu-Lapu City. The
complaint was dismissed twice without prejudice. Said complaint
was re-filed on August 19, 1993, docketed as Civil Case No. 2930L.
In their amended complaint, herein respondents (plaintiffs before
the RTC) alleged that: they are co-owners of subject property,
being descendants of the registered owners thereof under OCT
No. RO-2856; they had been in actual, peaceful, physical, open,
adverse, continuous and uninterrupted possession in concept of
owner of subject parcel of land since time immemorial; their
possession was disturbed only in the last quarter of 1991 when
some of them received notices to vacate from petitioner and
several weeks thereafter, earthmoving equipment entered the
disputed land, bulldozing the same and destroying plants, trees
and concrete monuments ("mohon"); respondents discovered that
such activities were being undertaken by petitioner together with
Sta. Lucia Realty and Development, Inc.; petitioner claimed to be
the owner of subject property by virtue of an extra-judicial partition
of real estate with deed of absolute sale executed in petitioners
favor by the alleged heirs of Crisanta Maloloy-on; the
aforementioned extra-judicial partition of real estate with deed of
absolute sale is a fraud and is null and void ab initio because not
all the co-owners of subject property affixed their signature on said
document and some of the co-owners who supposedly signed said
document had been dead at the time of the execution thereof;
petitioner entered subject land in bad faith, knowing fully well that it
did not have any right to the land and used force, threat and

intimidation against respondents; and they suffered moral


damages.3
Petitioner (defendant before the RTC) filed its Answer, denying that
respondents are the lawful owners of subject parcel of land by
virtue of their being descendants or heirs of the registered owners
of subject property. Instead, petitioner alleged that it had been in
actual possession of subject land as owner thereof by virtue of the
extra-judicial partition of real property and deed of absolute sale
executed in its favor; that in fact, it had been paying taxes thereon
religiously; that it tolerated about 6 persons to live on said land but
said persons were eventually ejected by court order. Petitioner
then raised the affirmative defenses of failure to state cause of
action and prescription, as it took respondents 27 years, 10
months and 27 days to file the action to recover subject property,
when an action to recover property based on an implied trust
should be instituted within 4 years from discovery of the fraud. 4
In the Pre-Trial Order dated January 30, 1995 of the RTC, the
issues were narrowed down to the following:
1. Whether or not the plaintiffs [herein respondents] are
the heirs of the registered owners of Lot No. 4399.
2. Whether or not plaintiffs are the owners of Lot No.
4399.
3. Whether or not the defendant Aznar [herein petitioner]
is estopped to make any claim on Lot No. 4399.
4. Whether or not the defendant Aznar is a builder in bad
faith.
5. Whether or not the defendants are liable for damages
and attorneys fees in favor of the plaintiffs.
6. Whether or not the Extra-Judicial Partition of Real
Estate with Deed of Absolute Sale is valid and had, in
effect, validly conveyed to defendant Aznar Lot No. 4399.
7. Whether or not the plaintiffs action has prescribed.5
After trial, the RTC rendered a Decision dated July 4, 1997, ruling
that respondents evidence failed to prove that the extra-judicial
partition with deed of absolute sale was a totally simulated or
fictitious contract and concluded that said document is valid, thus,
effectively conveying to petitioner the property in question. It
further held that respondents action had prescribed in that the
action is considered as one for reconveyance based on implied or
constructive trust, it prescribed in 10 years from the registration of
the deed on March 6, 1964; and if the action is considered as one
for annulment of contract on the ground of fraud, it should have
been filed within 4 years from discovery of the fraud. The trial court
also ruled that respondents failed to present any admissible proof
of filiation, hence, they were not able to prove that they are indeed
heirs of the eight Aying siblings who appear as the registered
owners under OCT No. RO-2856.
The dispositive portion of the RTC Decision reads as follows:

WHEREFORE, judgment is hereby rendered dismissing


the amended complaint on the ground of prescription,
and declaring the Extra-Judicial Partition of Real Estate
with Deed of Absolute Sale dated March 3, 1964 as valid
and binding, adjudging that Lot 4399 with an area of
34,325 square meters located at Dapdap, Mactan, LapuLapu City had been validly conveyed to and in favor of
Aznar Brothers Realty Company, and directing the
Register of Deeds of Lapu-Lapu City to register the
above-mentioned deed in accordance with law and to
cancel Original Certificate of Title No. RO-2856, and to
issue a transfer certificate of title in the name of Aznar
Brothers Realty Company upon payment of the
necessary registration fees pursuant thereto.
The Writ of Preliminary Injunction issued in this case is
hereby ordered dissolved.
The Motion for Contempt filed by the plaintiffs against
defendants is dismissed for want of factual and legal
basis.
Costs against the plaintiffs.
SO ORDERED.6
Herein respondents appealed the foregoing decision to the CA and
on March 7, 2000, said court promulgated its Decision, the
dispositive portion of which is reproduced hereunder:
THE FOREGOING CONSIDERED, the contested
Decision while AFFIRMED is hereby MODIFIED. The
heirs of Emiliano Aying, Simeon Aying and Roberta Aying
are hereby declared as the lawful owners of the
contested property but equivalent only to 3/8.
SO ORDERED.
In modifying the RTC judgment, the CA ratiocinated that "an action
for recovery of possession of registered land never prescribes in
view of the provision of Section 44, Act No. 496 (now Sec. 47, PD
1520), to the effect that no title to registered land in derogation to
that of a registered owner shall be acquired by prescription." The
CA further ruled that even if the action is deemed to be based on
implied trust, prescription did not begin to run since there is no
evidence that positive acts of repudiation were made known to the
heirs who did not participate in the execution of the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale. Thus, striking
down the RTCs ruling that the respondents complaint is
dismissible on the ground of prescription, the CA held instead that
herein respondents action had not prescribed but upheld the
validity of the Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale, except as to the shares of the heirs of Emiliano,
Simeon and Roberta, who did not participate in the execution of
said document.
Herein petitioners motion for reconsideration of the CA decision
was denied per Resolution dated August 2, 2000.
Hence, the present petition for review on certiorari assailing the CA
decision on the following grounds:

I
THE COURT OF APPEALS ERRED IN FAILING TO
APPLY THE RULE THAT AN HEIR OF THE ORIGINAL
REGISTERED OWNER MAY LOSE HIS RIGHT TO
RECOVER A TITLED PROPERTY BY REASON OF
LACHES;
II
THE COURT OF APPEALS ERRED IN FAILING TO
APPLY THE RULE THAT THE ACT OF REGISTRATION
OF THE DEED OF PARTITION WITH SALE MAY BE
CONSIDERED AN UNEQUIVOCAL REPUDIATION OF
THE TRUST GIVING RISE TO PRESCRIPTION;
III
THE COURT OF APPEALS ERRED IN FAILING TO
APPLY THE PROVISIONS OF ARTICLE 1104 OF THE
CIVIL CODE TO THE EFFECT THAT IN THE ABSENCE
OF BAD FAITH OR FRAUD, THE PARTITION WITH
PRETERITION OF ANY COMPULSORY HEIR SHALL
NOT BE RESCINDED.7
In their Comment, respondents argue that this case is an action to
declare as null and void the Extra-Judicial Partition of Real Estate
with Deed of Absolute Sale, hence, under Article 1410 of the Civil
Code, an action for declaration of an inexistent contract does not
prescribe. Respondents further posit that the principle of laches
should be applied against petitioner and not against them, as they
(respondents) had been in actual possession of the subject
property, while petitioner merely brought action to eject them more
than 29 years after the alleged execution of the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale. They also
refuted petitioners arguments regarding the application of the
principles of implied and constructive trusts in this case.
At the outset, it should be stressed that not all the plaintiffs who
filed the amended complaint before the trial court had been
impleaded as respondents in the present petition. The only parties
impleaded are the heirs of Emiliano, Simeon and Roberta Aying,
whom the CA adjudged as owners of a 3/8 portion of the land in
dispute for not having participated in the execution of the ExtraJudicial Partition of Real Estate with Deed of Absolute Sale.
It is significant to note that herein petitioner does not question the
CA conclusion that respondents are heirs of the aforementioned
three Aying siblings. Hence, the trial court and appellate courts
findings that the Extra- Judicial Partition of Real Estate with Deed
of Absolute Sale was not forged nor simulated and that the heirs of
Emiliano, Simeon and Roberta Aying did not participate in the
execution thereof, are now beyond cavil.
The issues raised by petitioner for the Courts resolution are (1)
whether or not respondents cause of action is imprescriptible; and
(2) if their right to bring action is indeed imprescriptible, may the
principle of laches apply.
Respondents alleged in their amended complaint that not all the
co-owners of the land in question signed or executed the

document conveying ownership thereof to petitioner and made the


conclusion that said document is null and void. We agree with the
ruling of the RTC and the CA that the Extra-Judicial Partition of
Real Estate with Deed of Absolute Sale is valid and binding only as
to the heirs who participated in the execution thereof, hence, the
heirs of Emiliano, Simeon and Roberta Aying, who undisputedly
did not participate therein, cannot be bound by said document.
However, the facts on record show that petitioner acquired the
entire parcel of land with the mistaken belief that all the heirs have
executed the subject document. Thus, the trial court is correct that
the provision of law applicable to this case is Article 1456 of the
Civil Code which states:
ART. 1456. If property is acquired through mistake or
fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of
the person from whom the property comes.
In Vda. De Esconde vs. Court of Appeals,8 the Court expounded
thus:
Construing this provision of the Civil Code, in Philippine
National Bank v. Court of Appeals, the Court stated:
A deeper analysis of Article 1456 reveals that it
is not a trust in the technical sense for in a
typical trust, confidence is reposed in one
person who is named a trustee for the benefit of
another who is called the cestui que trust,
respecting property which is held by the trustee
for the benefit of the cestui que trust. A
constructive trust, unlike an express trust, does
not emanate from, or generate a fiduciary
relation. While in an express trust, a beneficiary
and a trustee are linked by confidential or
fiduciary relations, in a constructive trust, there
is neither a promise nor any fiduciary relation to
speak of and the so-called trustee neither
accepts any trust nor intends holding the
property for the beneficiary.9
The concept of constructive trusts was further elucidated in the
same case, as follows:
. . . implied trusts are those which, without being
expressed, are deducible from the nature of the
transaction as matters of intent or which are
superinduced on the transaction by operation of law as
matters of equity, independently of the particular intention
of the parties. In turn, implied trusts are either resulting or
constructive trusts. These two are differentiated from
each other as follows:
Resulting trusts are based on the equitable
doctrine that valuable consideration and not
legal title determines the equitable title or
interest and are presumed always to have been
contemplated by the parties. They arise from
the
nature
of
circumstances
of the
consideration involved in a transaction whereby
one person thereby becomes invested with

legal title but is obligated in equity to hold his


legal title for the benefit of another. On the other
hand, constructive trusts are created by the
construction of equity in order to satisfy the
demands of justice and prevent unjust
enrichment. They arise contrary to intention
against one who, by fraud, duress or abuse
of confidence, obtains or holds the legal
right to property which he ought not, in
equity and good conscience, to hold. 10
(Emphasis supplied)

issuance of the certificate of title over the property, but if the


person claiming to be the owner thereof is in actual possession of
the property, the right to seek reconveyance, which in effect seeks
to quiet title to the property, does not prescribe.14

Based on such concept of constructive trusts, the Court ruled in


said case that:

The question then arises as to the date from which the ten-year
period should be reckoned, considering that the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale was registered
under Act No. 3344 and not under Act No. 496 (Land Registration
Act), despite the fact the land in dispute was already titled under
Act No. 496 in the names of the Aying siblings at the time the
subject document was executed.

The rule that a trustee cannot acquire by prescription


ownership over property entrusted to him until and unless
he repudiates the trust, applies to express trusts and
resulting implied trusts. However, in constructive implied
trusts, prescription may supervene even if the trustee
does not repudiate the relationship. Necessarily,
repudiation of said trust is not a condition precedent to
the running of the prescriptive period.11

In the present case, respondents Wenceslao Sumalinog, an heir of


Roberta Aying; Laurencio Aying, an heir of Emiliano Aying; and
Paulino Aying, an heir of Simeon Aying, all testified that they had
never occupied or been in possession of the land in dispute. 15
Hence, the prescriptive period of ten years would apply to herein
respondents.

In Spouses Abrigo vs. De Vera,16 it was held that registration of


instruments must be done in the proper registry, in order to affect
and bind the land and, thus, operate as constructive notice to the
world.17 Therein, the Court ruled:

The next question is, what is the applicable prescriptive period?


In Amerol vs. Bagumbaran,12 the Court expounded on the
prescriptive period within which to bring an action for
reconveyance of property based on implied or constructive trust, to
wit:
. . . under the present Civil Code, we find that just as an
implied or constructive trust is an offspring of the law (Art.
1456, Civil Code), so is the corresponding obligation to
reconvey the property and the title thereto in favor of the
true owner. In this context, and vis--vis prescription,
Article 1144 of the Civil Code is applicable.
Article 1144. The following actions must be
brought within ten years from the time the right
of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
xxx

xxx

xxx

An action for reconveyance based on an implied or


constructive trust must perforce prescribe in ten years
and not otherwise. A long line of decisions of this Court,
and of very recent vintage at that, illustrates this rule.
Undoubtedly, it is now well-settled that an action for
reconveyance based on an implied or constructive trust
prescribes in ten years from the issuance of the Torrens
title over the property.13
It has also been ruled that the ten-year prescriptive period begins
to run from the date of registration of the deed or the date of the

x x x If the land is registered under the Land Registration


Act (and has therefore a Torrens Title), and it is sold but
the subsequent sale is registered not under the Land
Registration Act but under Act 3344, as amended, such
sale is not considered REGISTERED x x x .18
In this case, since the Extra-Judicial Partition of Real Estate with
Deed of Absolute Sale was registered under Act No. 3344 and not
under Act No. 496, said document is deemed not registered.
Accordingly, the ten-year prescriptive period cannot be reckoned
from March 6, 1964, the date of registration of the subject
document under Act No. 3344. The prescriptive period only began
to run from the time respondents had actual notice of the ExtraJudicial Partition of Real Estate with Deed of Absolute Sale.
The only evidence on record as to when such prescriptive period
commenced as to each of the respondents are Wenceslao
Sumalinogs (heir of Roberta Aying) testimony that about three
years after 1964, they already learned of the existence of the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale; 19
and Laurencio Ayings (heir of Emiliano Aying) admission that he
found out about the sale of the land in dispute a long time ago and
can only estimate that it must be after martial law.20 Paulino Aying
(heir of Simeon Aying) gave no testimony whatsoever as to when
the children of Simeon Aying actually learned of the existence of
the document of sale. On the other hand, petitioner did not present
any other evidence to prove the date when respondents were
notified of the execution of the subject document.
In view of the lack of unambiguous evidence of when the heirs of
Emiliano Aying and Simeon Aying discovered the existence of the
document of sale, it must be determined which party had the
burden of proof to establish such fact.
The test for determining where the burden of proof lies is to ask
which party to an action or suit will fail if he offers no evidence
competent to show the facts averred as the basis for the relief he

seeks to obtain.21 Moreover, one alleging a fact that is denied has


the burden of proving it and unless the party asserting the
affirmative of an issue sustains the burden of proof of that issue by
a preponderance of the evidence, his cause will not succeed. 22
Thus, the defendant bears the burden of proof as to all affirmative
defenses which he sets up in answer to the plaintiffs claim or
cause of action; he being the party who asserts the truth of the
matter he has alleged, the burden is upon him to establish the
facts on which that matter is predicated and if he fails to do so, the
plaintiff is entitled to a verdict or decision in his favor.23
In the case at bar, it was petitioner, as the defendant before the
RTC, which set up in its Answer the affirmative defense of
prescription. It was, therefore, incumbent upon petitioner to prove
the date from which the prescriptive period began to run. Evidence
as to the date when the ten-year prescriptive period began exists
only as to the heirs of Roberta Aying, as Wenceslao Sumalinog
admitted that they learned of the existence of the document of sale
in the year 1967. As to the heirs of Emiliano Aying and Simeon
Aying, there is no clear evidence of the date when they discovered
the document conveying the subject land to petitioner. Petitioner
miserably failed to adduce proof of when the heirs of Emiliano
Aying and Simeon Aying were notified of the subject document.
Hence, with regard to said heirs, the Court may consider the
admission in the amended complaint that they learned of the
conveyance of the disputed land only in 1991 when petitioner sent
notices to vacate to the occupants of the subject land, as the date
from which the ten-year prescriptive period should be reckoned.
Respondents filed their Amended Complaint on December 6,
1993.24 Thus, with regard to respondent heirs of Roberta Aying
who had knowledge of the conveyance as far back as 1967, their
cause of action is already barred by prescription when said
amended complaint was filed as they only had until 1977 within
which to bring action. As to the respondent heirs of Emiliano and
Simeon Aying, they were able to initiate their action for
reconveyance of property based on implied or constructive trust
well within the ten-year prescriptive period reckoned from 1991
when they were sent by petitioner a notice to vacate the subject
property.
Evidently, laches cannot be applied against respondent heirs of
Emiliano and Simeon Aying, as they took action to protect their
interest well within the period accorded them by law.
With regard to petitioners argument that the provision of Article
1104 of the Civil Code, stating that a partition made with preterition
of any of the compulsory heirs shall not be rescinded, should be
applied, suffice it to say that the Extra-Judicial Partition of Real
Estate with Deed of Absolute Sale is not being rescinded. In fact,
its validity had been upheld but only as to the parties who
participated in the execution of the same. As discussed above,
what was conveyed to petitioner was ownership over the shares of
the heirs who executed the subject document. Thus, the law,
particularly, Article 1456 of the Civil Code, imposed the obligation
upon petitioner to act as a trustee for the benefit of respondent
heirs of Emiliano and Simeon Aying who, having brought their
action within the prescriptive period, are now entitled to the
reconveyance of their share in the land in dispute.
IN VIEW OF THE FOREGOING, the petition is PARTIALLY
GRANTED and the Decision of the Court of Appeals dated March
7, 2000 is MODIFIED, as follows: The amended complaint of the

heirs of Roberta Aying is DISMISSED on the ground of


prescription. However, the heirs of Emiliano Aying and Simeon
Aying, having instituted the action for reconveyance within the
prescriptive period, are hereby DECLARED as the LAWFUL
OWNERS of a 2/8 portion of the parcel of land covered by Original
Certificate of Title No. RO-2856.
SO ORDERED.

By Decision of May 5, 2004,7 the Court of Appeals denied the


Republics petition on procedural and substantive grounds in this
wise:

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 163604

May 6, 2005

REPUBLIC OF THE PHILIPPINES, petitioner,


vs.
THE HON. COURT OF APPEALS (Twentieth Division), HON.
PRESIDING JUDGE FORTUNITO L. MADRONA, RTC-BR. 35
and APOLINARIA MALINAO JOMOC, respondents.
DECISION
CARPIO-MORALES, J.:
In "In the Matter of Declaration of Presumptive Death of Absentee
Spouse Clemente P. Jomoc, Apolinaria Malinao Jomoc, petitioner,"
the Ormoc City, Regional Trial Court, Branch 35, by Order of
September 29, 1999,1 granted the petition on the basis of the
Commissioners Report2 and accordingly declared the absentee
spouse, who had left his petitioner-wife nine years earlier,
presumptively dead.
In granting the petition, the trial judge, Judge Fortunito L. Madrona,
cited Article 41, par. 2 of the Family Code. Said article provides
that for the purpose of contracting a valid subsequent marriage
during the subsistence of a previous marriage where the prior
spouse had been absent for four consecutive years, the spouse
present must institute summary proceedings for the declaration
of presumptive death of the absentee spouse, without prejudice to
the effect of the reappearance of the absent spouse.
The Republic, through the Office of the Solicitor General, sought to
appeal the trial courts order by filing a Notice of Appeal.3
By Order of November 22, 1999s,4 the trial court, noting that no
record of appeal was filed and served "as required by and
pursuant to Sec. 2(a), Rule 41 of the 1997 Rules of Civil
Procedure, the present case being a special proceeding,"
disapproved the Notice of Appeal.
The Republics Motion for Reconsideration of the trial courts order
of disapproval having been denied by Order of January 13, 2000,5
it filed a Petition for Certiorari6 before the Court of Appeals, it
contending that the declaration of presumptive death of a person
under Article 41 of the Family Code is not a special proceeding or
a case of multiple or separate appeals requiring a record on
appeal.

At the outset, it must be stressed that the petition is not


sufficient in form. It failed to attach to its petition a
certified true copy of the assailed Order dated January
13, 2000 [denying its Motion for Reconsideration of the
November 22, 1999 Order disapproving its Notice of
Appeal]. Moreover, the petition questioned the [trial
courts] Order dated August 15, 1999, which declared
Clemente Jomoc presumptively dead, likewise for having
been issued with grave abuse of discretion amounting to
lack of jurisdiction, yet, not even a copy could be found in
the records. On this score alone, the petition should have
been dismissed outright in accordance with Sec. 3, Rule
46 of the Rules of Court.
However, despite the procedural lapses, the Court
resolves to delve deeper into the substantive issue of the
validity/nullity of the assailed order.
The principal issue in this case is whether a petition
for declaration of the presumptive death of a person
is in the nature of a special proceeding. If it is, the
period to appeal is 30 days and the party appealing must,
in addition to a notice of appeal, file with the trial court a
record on appeal to perfect its appeal. Otherwise, if the
petition is an ordinary action, the period to appeal is 15
days from notice or decision or final order appealed from
and the appeal is perfected by filing a notice of appeal
(Section 3, Rule 41, Rules of Court).
As defined in Section 3(a), Rule 1 of the Rules of Court,
"a civil action is one by which a party sues another for
the enforcement or protection of a right, or the prevention
of redress of a wrong" while a special proceeding under
Section 3(c) of the same rule is defined as "a remedy by
which a party seeks to establish a status, a right or a
particular fact (Heirs of Yaptinchay, et al. v. Del Rosario,
et al., G.R. No. 124320, March 2, 1999).
Considering the aforementioned distinction, this Court
finds that the instant petition is in the nature of a
special proceeding and not an ordinary action. The
petition merely seeks for a declaration by the trial court of
the presumptive death of absentee spouse Clemente
Jomoc. It does not seek the enforcement or protection of
a right or the prevention or redress of a wrong. Neither
does it involve a demand of right or a cause of action that
can be enforced against any person.
On the basis of the foregoing discussion, the subject
Order dated January 13, 2000 denying OSGs Motion for
Reconsideration of the Order dated November 22, 1999
disapproving its Notice of Appeal was correctly issued.
The instant petition, being in the nature of a special
proceeding, OSG should have filed, in addition to its
Notice of Appeal, a record on appeal in accordance
with Section 19 of the Interim Rules and Guidelines to
Implement BP Blg. 129 and Section 2(a), Rule 41 of the
Rules of Court . . . (Emphasis and underscoring supplied)

The Republic (petitioner) insists that the declaration of presumptive


death under Article 41 of the Family Code is not a special
proceeding involving multiple or separate appeals where a record
on appeal shall be filed and served in like manner.

Sec. 2. Applicability of rules of civil actions. In the


absence of special provisions, the rules provided for in
ordinary actions shall be, as far as practicable, applicable
in special proceedings. (Underscoring supplied)

Petitioner cites Rule 109 of the Revised Rules of Court which


enumerates the cases wherein multiple appeals are allowed and a
record on appeal is required for an appeal to be perfected. The
petition for the declaration of presumptive death of an absent
spouse not being included in the enumeration, petitioner contends
that a mere notice of appeal suffices.

The pertinent provision of the Civil Code on presumption of death


provides:

By Resolution of December 15, 2004, 8 this Court, noting that copy


of the September 27, 2004 Resolution9 requiring respondent to file
her comment on the petition was returned unserved with
postmasters notation "Party refused," Resolved to consider that
copy deemed served upon her.
The pertinent provisions on the General Provisions on Special
Proceedings, Part II of the Revised Rules of Court entitled
SPECIAL PROCEEDINGS, read:
RULE 72
SUBJECT MATTER AND APPLICABILITY
OF GENERAL RULES
Section 1. Subject matter of special proceedings. Rules
of special proceedings are provided for in the following:

Art. 390. After an absence of seven years, it being


unknown whether or not the absentee still lives, he shall
be presumed dead for all purposes, except for those of
succession.
x x x (Emphasis and underscoring supplied)
Upon the other hand, Article 41 of the Family Code, upon which
the trial court anchored its grant of the petition for the declaration
of presumptive death of the absent spouse, provides:
Art. 41. A marriage contracted by any person during the
subsistence of a previous marriage shall be null and void,
unless before the celebration of the subsequent
marriage, the prior spouses had been absent for four
consecutive years and the spouse present had a wellfounded belief that the absent spouses was already
dead. In case of disappearance where there is danger of
death under the circumstances set forth in the provisions
of Article 391 of the Civil Code, an absence of only two
years shall be sufficient.

(a) Settlement of estate of deceased persons;


(b) Escheat;
(c) Guardianship and custody of children;
(d) Trustees;
(e) Adoption;
(f) Rescission and revocation of adoption;

For the purpose pf contracting the subsequent marriage


under the preceding paragraph, the spouses present
must institute a summary proceeding as provided in
this Code for the declaration of presumptive death of the
absentee, without prejudice to the effect of a
reappearance of the absent spouse. (Emphasis and
underscoring supplied)
Rule 41, Section 2 of the Revised Rules of Court, on Modes of
Appeal, invoked by the trial court in disapproving petitioners
Notice of Appeal, provides:

(g) Hospitalization of insane persons;

Sec. 2. Modes of appeal. -

(h) Habeas corpus;

(a) Ordinary appeal. - The appeal to the Court of Appeals


in cases decided by the Regional Trial Court in the
exercise of its original jurisdiction shall be taken by filing
a notice of appeal with the court which rendered the
judgment or final order appealed from and serving a copy
thereof upon the adverse party. No record on appeal
shall be required except in special proceedings and
other cases of multiple or separate appeals where the
law or these Rules so require. In such cases, the
record on appeal shall be filed and served in like manner.
(Emphasis and underscoring supplied)

(i) Change of name;


(j) Voluntary dissolution of corporations;
(k) Judicial approval of voluntary recognition of
minor natural children;
(l) Constitution of family home;
(m) Declaration of absence and death;
(n) Cancellation or correction of entries in the
civil registry.

xxx
By the trial courts citation of Article 41 of the Family Code, it is
gathered that the petition of Apolinaria Jomoc to have her absent
spouse declared presumptively dead had for its purpose her desire

to contract a valid subsequent marriage. Ergo, the petition for that


purpose is a "summary proceeding," following above-quoted Art.
41, paragraph 2 of the Family Code.

REMANDED to it for appropriate action in light of the foregoing


discussion.
SO ORDERED.

Since Title XI of the Family Code, entitled SUMMARY JUDICIAL


PROCEEDING IN THE FAMILY LAW, contains the following
provision, inter alia:
xxx
Art. 238. Unless modified by the Supreme Court, the
procedural rules in this Title shall apply in all cases
provided for in this Codes requiring summary court
proceedings. Such cases shall be decided in an
expeditious manner without regard to technical
rules. (Emphasis and underscoring supplied)
x x x,
there is no doubt that the petition of Apolinaria Jomoc required,
and is, therefore, a summary proceeding under the Family Code,
not a special proceeding under the Revised Rules of Court appeal
for which calls for the filing of a Record on Appeal. It being a
summary ordinary proceeding, the filing of a Notice of Appeal from
the trial courts order sufficed.
That the Family Code provision on repeal, Art. 254, provides as
follows:
Art. 254. Titles III, IV, V, VI, VII, VIII, IX, XI and XV of
Book I of Republic Act No. 386, otherwise known as the
Civil Code of the Philippines, as amended, and Articles
17, 18, 19, 27, 28, 29, 30, 31, 39, 40, 41 and 42 of
Presidential Decree No. 603, otherwise known as the
Child and Youth Welfare Code, as amended, and all
laws, decrees, executive orders, proclamations rules
and regulations, or parts thereof, inconsistent therewith
are hereby repealed, (Emphasis and underscoring
supplied),
seals the case in petitioners favor.
Finally, on the alleged procedural flaw in petitioners petition before
the appellate court. Petitioners failure to attach to his petition
before the appellate court a copy of the trial courts order denying
its motion for reconsideration of the disapproval of its Notice of
Appeal is not necessarily fatal, for the rules of procedure are not to
be applied in a technical sense. Given the issue raised before it by
petitioner, what the appellate court should have done was to direct
petitioner to comply with the rule.
As for petitioners failure to submit copy of the trial courts order
granting the petition for declaration of presumptive death, contrary
to the appellate courts observation that petitioner was also
assailing it, petitioners 8-page petition 10 filed in said court does not
so reflect, it merely having assailed the order disapproving the
Notice of Appeal.
WHEREFORE, the assailed May 5, 2004 Decision of the Court of
Appeals is hereby REVERSED and SET ASIDE. Let the case be

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 146550

March 17, 2006

FELIPA DELFIN, GINA MAALAT, SHIRLEY TAMAYO, RECIO


DAOS, and ROBERTO DELFIN, Petitioners,
vs.
PRESENTACION D. BILLONES, ROSARIO D. DEMONARCA
(accompanied by husband Pedro and Demonarca), WENEFREDO
DEGALA (representing Pedro Degala), RAMON DELA CRUZ
(representing his deceased wife Maria Daradar dela Cruz),
TERESITA DALIVA DEVIENTE (daughter of Esperanza Daradar
Daliva), and JOLLY DATAR (representing his deceased mother
Trinidad D. Datar) and the COURT OF APPEALS, Respondents.
DECISION
TINGA, J.:
This treats of the petition for review on certiorari assailing the Decision 1
and Resolution of the Court of Appeals in CA-G.R. CV No. 54035
entitled Presentacion D. Billones, et al. v. Felipa Delfin, et al.,
promulgated on 13 October 2000 and 26 December 2000, respectively,
which reversed the 27 May 1996 Decision of the Regional Trial Court,
Branch 15 of Roxas City.
The antecedents are as follows:
On 29 July 1960, a Deed of Absolute Sale2 over Lot No. 213, covered
by RO-5563 (14516) of the Cadastral Survey of Panitan, Capiz, was
executed by Teresa Daos, Esperanza Daradar, Estrella Daradar and
Maria Daradar, with the marital consent of Cipriano Degala, husband of
Teresa Daos, in favor of the spouses Rodolfo Delfin and Felipa Belo
(spouses Delfin). The document, so it appears, bore the signatures of
Esperanza and Estrella, as well as the thumb marks of Teresa, Maria,
and Cipriano, and was acknowledged before a notary public. On 18
November 1980, the spouses Delfin registered the Deed of Absolute
Sale with the Register of Deeds of the Province of Capiz. Thereupon, a

new title, Transfer Certificate of Title (TCT) No. T-17071, was issued in
the name of the spouses Delfin.3
Meanwhile, on 26 March 1965, an Extra-Judicial Partition and Absolute
Deed of Sale4 involving Lot No. 3414 then covered by TCT No. T16804 was made between Teresa Daos, Trinidad Degala, Leopoldo
Degala, Presentacion Degala, Rosario Degala and Pedro
Degala, on one part, and the spouses Delfin, on the other. The deed,
bearing either the thumb marks or the signatures of the sellers, was
likewise notarized. Said document was registered by the spouses
Delfin on 24 June 1980. Thus, TCT No. T-16804 covering Lot No. 3414
was cancelled and a new one, TCT No. T-16805, was issued in the
names of the spouses Delfin on 24 June 1980.5
The spouses Delfin then consolidated Lots No. 213 and No. 3414 and
subdivided the resulting lot into six (6) smaller lots. 6 Lot No. 1, covered
by TCT No. T-19618, was sold to Roberto Delfin on 21 October 1989;
Lot No. 2 covered by TCT No. T-19619 to Recio Daos on 25 April
1985; Lot No. 3 covered by TCT No. T-19620 to Gina Maalat on 14
June 1989, and; Lot No. 4 covered by TCT No. T-19621 to Shirley
Tamayo on 11 August 1989. Lot No. 5 remained with the spouses
Delfin, while Lot No. 6 was used as an access road.7
On 12 April 1994, herein respondents, claiming to be the heirs of the
former owners of Lots No. 213 and No. 3414, filed an action for
annulment, reconveyance, recovery of ownership and possession and
damages.8 According to them, it was only in 19899 when they
discovered that Teresa Daos, sick and in dire need of money, was
constrained to mortgage the one-half (1/2) portion of Lot No. 3414 to
the spouses Delfin for P300.00 sometime in 1965.10 Taking advantage
of her condition, the spouses Delfin made her sign a document
purporting to be a mortgage, but which turned out to be an extrajudicial
partition with deed of absolute sale. As to Lot No. 213, respondents
averred that the Deed of Sale covering the property was fictitious and
the signatures and thumb marks contained therein were all forged
because three (3) of the signatories therein died before the alleged
sale in 1960, namely: Estrella Daradar, who died in 1934, and
Esperanza Daradar and Cipriano Degala, who both died in 1946. 11 As
proof thereof, respondents presented certifications 12 on the deaths of
Esperanza Daradar and Cipriano Degala by the Local Civil Registrar of
Panitan, Capiz.
To counter respondents arguments, petitioners alleged that
respondents action was already barred by prescription and laches.
Further, they argued that the spouses Delfin, as well as the
subsequent owners of the subject properties, are innocent purchasers
for value and in good faith, whose titles to the lots at the time of the
purchase were all clean and free from liens and encumbrances.13 The
documents
evidencing the conveyance of the properties were personally and
unilaterally executed by the vendors-signatories therein without any
intervention from the spouses Delfin, and duly acknowledged before a
notary public, petitioners averred.14
Giving credence to the claims of petitioners, the trial court ruled that
respondents claim of ownership over the subject properties was not
established by a preponderance of evidence. Compared to
respondents verbal claims of ownership, the spouses Delfin were able
to prove that they bought the properties from the original owners, the
trial court added. The trial court held that the deeds of sale being duly
executed notarial and public documents, they enjoy the presumption of
regularity which can only be contradicted by clear and convincing

evidence. In addition, respondents claims based on fraud were barred


by prescription, having been filed more than four (4) years from the
time the instruments were registered with the Register of Deeds, and
they are estopped from annulling the documents by reason of laches,
the action having been filed 15 years after the deeds were registered.
The trial court also denied respondents claims for damages.15
Respondents elevated the case to the Court of Appeals, which
reversed the ruling of the trial court. In its Decision, 16 the Court of
Appeals ruled that while an action for reconveyance based on implied
or constructive trust prescribes in ten (10) years from the date of the
issuance of the certificate of title over the property, such prescriptive
period does not apply if the person claiming to be the owner of the
property is in possession thereof, such as respondents in this case.17
Moreover, considering that a similar action for reconveyance was filed
by respondents as early as 1989 which was eventually dismissed
without prejudice, respondents action to annul the two (2) deeds on
the ground of fraud has not yet prescribed, according to the Court of
Appeals.18
The appellate court annulled the Extra-Judicial Partition and Deed of
Sale covering Lot No. 3414. The appellate court noted that: (i) Teresa
Daos was a very old and sickly woman; (ii) she and her children
lacked formal education to fully comprehend the document to which
they affixed their signatures and/or thumb marks; (iii) P300.00 was
inadequate consideration for a lot consisting of 1,565 square meters
even in 1965; (iv) respondents were allowed to remain in the subject
properties; and (v) the questioned document was registered in the
name of the spouses Delfin 15 years after the alleged date of its
execution, when most of the alleged vendors have already died. These
circumstances surrounding the execution of the said document show
that the real intention was merely to secure the loan of P300.00. Thus,
what took place was in fact, an equitable mortgage and not a sale. 19
As for Lot No. 213, the Court of Appeals held that the Deed of Absolute
Sale could not have been executed on 9 July 1960. Relying on the
certifications of death presented by respondents, the Court of Appeals
ruled that the defense of due execution cannot prevail over the fact
that two (2) of the signatories therein have already died prior to said
date.20 Roberto Delfin, Recio Daos, Gina Maalat, and Shirley Tamayo,
buyers of the subdivided lot, could not be considered as purchasers in
good faith nor entitled to be protected in their rights because they were
informed by respondents prior to the purchase that they, and not the
spouses Delfin, are the real owners of the lots, the appellate court
added.21
The Court of Appeals thus ruled:
WHEREFORE, premises considered, the present appeal is hereby
GRANTED. The Decision dated May 27, 1996 of the Regional Trial
Court of Roxas City, Capiz, Branch 15 presided over by Judge Roger
B. Patricio is hereby REVERSED and SET SIDE and a new one
entered:
(1) Annulling the Extra-Judicial Partition and Deed of
Absolute Sale dated March 26, 1965 and Deed of Absolute
Sale dated July 9, 1960;
(2) Reinstating OCT No. RO-5563 (14516) referring to Lot
213 registered in the names of Teresa Daos (1/2 portion),
and the children of Lucia Daos, namely: Esperanza
Daradar, Estrella Daradar and Maria Daradar (1/2 proindiviso) and OCT No. (4650) RO-5529 referring to Lot 3414
registered in the names of the late spouses Cipriano Degala
and Teresa Daos, and canceling the TCTs issued
thereafter;

(3) Ordering plaintiffs-appellants, jointly and severally, to pay


defendant Felipa Belo Delfin the amount of P300.00 within
thirty (30) days from the date of finality of this decision;

the signatures. Notarized documents enjoy the presumption of


regularity which can be overturned only by clear and convincing
evidence.33

(4) Ordering defendants-appellees to free Lots 3414 and 213


from any and all obligations and encumbrances that may
have been attached to both lots and thereafter to deliver
possession of the same to plaintiffs-appellants; and

As plaintiffs in the action before the trial court, respondents have the
burden to establish their case by a preponderance of evidence, or
evidence which is of greater weight or more convincing than that which
is offered in opposition to it. Hence, parties who have the burden of
proof must produce such quantum of evidence, with plaintiffs having to
rely on the strength of their own evidence, not on the weakness of the
defendants.34

(5) Ordering defendants-appellees, jointly and severally, to


pay plaintiffs-appellants P10,000.00 as exemplary damages,
and [sic] for attorneys fees and P10,000.00 as litigation
expenses.
Costs against defendants-appellees.
SO ORDERED.22
In the present petition for review under Rule 45, petitioners claim that
the Court of Appeals erred in finding that respondents retained
possession of the subject properties. Moreover, petitioners posit that
respondents allegations of fraud and forgery confine their action to a
four (4)-year prescriptive period which has long expired. Additionally,
they argue that respondents failed to: (i) prove the inadequacy of the
selling price of Lot No. 3414; (ii) prove the frail condition of Teresa
Daos; (iii) show that fraud attended the sale of Lot No. 213; (iv) show
that Roberto Delfin, Recio Daos, Gina Maalat and Shirley Tamayo are
not purchasers in good faith; and (v) overcome the presumption of
regularity enjoyed by the notarized deeds of sale. Petitioners also
question the award of exemplary damages and attorneys fees in favor
of respondents.23 On the other hand, respondents for the most part
merely reiterated the ruling of the Court of Appeals.24
The complete resolution of the issues presented before the Court
requires a determination of facts, which this Court, not being a trier of
facts, does not normally exercise in an appeal by certiorari.25 This rule,
however, is subject to exceptions, such as where the factual findings of
the Court of Appeals and the trial court are conflicting or
contradictory,26 as in the instant case.
When ones property is registered in anothers name without the
formers consent, an implied trust is created by law in favor of the true
owner.27 Implied trusts are those which, without being expressed, are
deducible from the nature of the transaction by operation of law as
matters of equity, independently of the particular intention of the
parties. Meanwhile, constructive trusts are created in order to satisfy
the demands of justice and prevent unjust enrichment. They arise
against one who, by fraud, duress or abuse of confidence, obtains or
holds the legal right to property which he ought not, in equity and good
conscience, to hold.28 An action for reconveyance based upon an
implied or constructive trust prescribes in ten (10) years from the
registration of the deed or from the issuance of the title, registration
being constructive notice to all persons. 29 However, an action for
reconveyance based on fraud is imprescriptible where the plaintiff is in
possession of the property subject of the acts.30
In essence, petitioners insist that respondents failed to prove that fraud
attended the sale of Lots No. 213 and No. 3414. The Court agrees.
A contract or conduct apparently honest and lawful must be treated as
such until it is shown to be otherwise by either positive or
circumstantial evidence.31 A duly executed contract carries with it the
presumption of validity. The party who impugns its regularity has the
burden of proving its simulation.32 A notarized document is executed to
lend truth to the statements contained therein and to the authenticity of

As regards Lot No. 3414, respondents specifically alleged that the


spouses Delfin "tricked the plaintiffs and their late mother into signing a
fictitious and simulated document," and that "TCT No. T-16805 was the
product of a fictitious and simulated transaction [that] was obtained
through fraud, the same should be declared null and void". 35 They
claimed that the original owners of Lot No. 3414 did not intend to
execute a deed of extra-judicial partition and absolute sale but only a
mortgage instrument. However, all that respondents came out with
were bare allegations that the said owners were either old and sickly or
illiterate; that the purported selling price of P300.00 was
unconscionable; and that petitioners failed to eject respondents from
the subject land, as respondents were unable to present any evidence
to substantiate their claims, much less the charge of fraud.
Respondents did not present any witness to testify on the execution of
the deed, nor on the condition of the signatories thereto. At best, their
witnesses merely testified as to the identity of the previous owners of
the property. Worse, petitioners Presentacion Degala Billones and
Rosario Degala Demonarca, both signatories to the subject deed, were
not presented to testify on the real circumstances surrounding the
assailed transaction. As for the selling price of P300.00, suffice it to say
that respondents did not even present a witness to testify as to its
alleged unconscionability vis-a-vis the prevailing market value of the
property at the time of the sale. Meanwhile, the belated registration of
the document with the Register of Deeds can be explained by the fact
that the original of OCT No. 4650 covering Lot No. 3414 was either lost
or destroyed and was reconstituted only in 1971, while the original
copy of the deed of sale was lost by Felipa Delfin.36
Even respondents claim of possession of the subject properties has
not been sufficiently proved. This Court has uniformly held that "the
one who is in actual possession of a piece of land claiming to be the
owner thereof may wait until his possession is disturbed or his title is
attacked before taking steps to vindicate his right. His undisturbed
possession gives him a continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse claim of a
third party and its effect on his own title, which right can be claimed
only by one who is in possession."37 Actual possession of land consists
in the manifestation of acts of dominion over it of such a nature as
those a party would naturally exercise over his own property.38
Contrary to the appellate courts illation, respondents have not
established possession of the subject properties. Save for the lone
testimony of Orlando Buday, a neighbor, that Rosario Degala Daradar
was the only one still residing in the properties in dispute, no other
evidence was presented to show that respondents are in actual
occupation and possession thereof. Not even Rosario herself testified.
Doubts also arise as to the veracity of respondents claim of
possession since respondents themselves averred in their complaint
that the spouses Delfin had immediately taken possession of the
subject properties in the same year that the sale was made, and
appropriated the produce found in the subject lots from then on. 39
Admissions made in the complaint are judicial admissions which are
binding on the party who made them and cannot be contradicted 40

absent any showing that it was made through palpable mistake. No


amount of rationalization can offset such admission.41 By their very
own admissions, it can be inferred that respondents or their
predecessors-in-interest did not exercise actual occupancy, as they
had ceased to perform acts of dominion over the property upon the
sale thereof.

respondent Jolly Datar.50 A document or writing which is admitted not


as an independent evidence but merely as part of the testimony of a
witness does not constitute proof of the facts related therein. 51 Clearly
then, the certifications cannot be given probative value, and their
contents cannot be deemed to constitute proof of the facts therein
stated.

Fraud may be, and often is, proved by or inferred from circumstances,
and the circumstances proved may in some cases raise a presumption
of its existence. However, while fraud may be proved by circumstances
or presumed from them, it cannot be demonstrated by mere
construction, but must be proven in all cases. 42 Respondents indeed
failed to prove that fraud attended the execution of the Extra-Judicial
Partition and Deed of Absolute Sale. Their bare and unsupported
allegations are not enough to overthrow the presumption of the validity
of said agreement or to raise the presumption of fraud.

More importantly, the very exhibits of respondents dispel the


presumption of regularity of the issuance of the certifications of death
relied upon by the Court of Appeals. The certifications state that both
Esperanza Daradar and Cipriano Degala died in 1946 at ages 24 and
63, respectively. However, a careful study of the records of the case
shows that in OCT No. RO 5563 (14516), 52 Esperanza Daradar was
already 20 years old in 1929, making her date of birth to be sometime
in 1909. This is totally incongruous with her supposed age of 24 years
in 1946, which places the year of her birth in 1922. Likewise, the Court
takes note of the Decision of the Court of Appeals in CA-G.R. CV No.
31739,53 wherein the appellate court in its statement of facts found that
Esperanza Daradar died on 10 August 1940, while Estrella Daradar
died on 15 June 1943, contrary to the claim of respondents in this
case.54 The Esperanza Daradar named in the OCT and the one
referred to in the aforesaid Decision could not have been the same
Esperanza Daradar in the Local Civil Registrars certification.

Considering that respondents failed to establish the existence of fraud


in the spouses Delfins acquisition of Lot No. 3414, it cannot be said
that implied or constructive trust was created between respondents
and the spouses Delfin. The action for reconveyance of Lot No. 3414
must fail. Further, in view of respondents failure to show their valid title
to Lot No. 3414 or even their occupation thereof, the case cannot
prosper even when it is viewed as one for quieting of title.
On the other hand, the Court of Appeals annulled the Deed of Absolute
Sale dated 9 July 1960 covering Lot No. 213 because "one of the
vendors therein was already dead,"43 relying on the certifications
issued by the Local Civil Registrar. In assailing this declaration,
petitioners once more point out that the Deed of Sale, being a duly
notarized document, should be given full faith and credit. Also, they
argue that the appellate courts conclusion is based on the disputable
presumption that identity of names means identity of persons.
Documents consisting of entries in public records made in the
performance of a duty by a public officer are prima facie evidence of
the facts therein stated.44 Public documents are (i) the written official
acts, or records of the official acts of the sovereign authority, official
bodies and tribunals, and public officers, whether of the Philippines, or
of a foreign country; (ii) documents acknowledged before a notary
public except last wills and testaments; and (iii) public records, kept in
the Philippines, of private documents required by law to be entered
therein.45 Public documents may be proved by the original copy, an
official publication thereof, or a certified true copy thereof; 46 and when a
copy of a document or record is attested for the purpose of evidence,
the attestation by the officer having legal custody of the record must
state that the copy is a correct copy of the original, or a specific part
thereof, as the case may be. 47 A duly-registered death certificate is
considered a public document and the entries found therein are
presumed correct, unless the party who contests its accuracy can
produce positive evidence establishing otherwise.48 Nevertheless, this
presumption is disputable and is satisfactory only if uncontradicted,
and may be overcome by other evidence to the contrary.
The documents presented by respondents were mere certifications
and not the certified copies or duly authenticated reproductions of the
purported death certificates of Esperanza Daradar and Cipriano
Degala. They are not the public documents referred to by the Rules of
Court, nor even records of public documents; thus, they do not enjoy
the presumption granted by the Rules. Respondents did not even
present the local civil registrar who supposedly issued the certifications
to authenticate and identify the same. Likewise, respondent Jolly Datar
who adverted to the certifications did not testify on how the
certifications were obtained, much less his role therein. 49 As a
consequence, the trial court did not admit the certifications as
independent pieces of evidence but merely as part of the testimony of

As for the Ciprianos thumb mark on the deed, suffice it to say that his
consent was not in fact needed to perfect the sale. Teresa Daos
Degalas share in Lot 213 was paraphernal property and, under the
provisions of the Civil Code applicable at the time of the sale, she
could alienate or dispose of the said property without the permission or
consent of her husband.55 Thus, with or without such thumb mark,
whether it was forged or not, the Deed of Absolute Sale remains valid
and effectual.
Under the circumstances, therefore, respondents were unable to
overthrow the presumption of validity of the Deed of Absolute Sale.
Said deed, as well as the titles derived as a result thereof must be
accorded respect and must remain undisturbed.
Anent the charge of bad faith on the part of petitioners, the Court takes
note of respondents statement in their Plaintiff-Appellants Brief, 56 to
wit:
From the facts and circumstances of this case, Lot 213 and 3414 both
of Panitan Cadastre which were consolidated, into one single lot, per
consolidated plan as appearing at the back of TCT No. T-17071, and
after the two lots were consolidated, and the same was subdivided,
into six smaller lots, Lots 1, 4 and 5 thereof still remained in the names
of appellees spouses Rodolfo Delfin and Felipa Belo, while Lots 2 and
3 thereof were transferred by the said spouses appellees to Recio
Daos and Gina Maalat, respectively. These two transferees are
innocent purchasers for value which appellants admit, and this appeal
is only an appeal by appellants against defendant-appellees spouses
Rodolfo Delfin and Felipa Belo, and not against Recio Daos and Gina
Maalat.57 (Emphasis supplied.)
In effect, contrary to the testimony of respondents witness Myrna
Degala-Distura that her mother warned petitioners against buying the
subject lots,58 respondents admitted that the only persons they
consider to be not innocent purchasers are the spouses Delfin.
However, in view of respondents failure to prove the fraud attributed to
the spouses Delfin, the Court has no choice but to declare all
petitioners to be purchasers for value and in good faith.
WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals dated 13 October 2000 is REVERSED and SET ASIDE. The

Decision of the Regional Trial Court dated 27 May 1996 is


REINSTATED.
No pronouncement as to costs.
SO ORDERED.

on November 29, 1997.3 The search was conducted on the said date;
articles were seized and the petitioner and Bueta were apprehended
and detained. Among the articles found in the possession of the
petitioner was U.S. Passport No. Z4613110 issued on June 2, 1983 by
the U.S. Embassy in Manila to and in the name of Raymond Michael
Jackson, born on October 17, 1951 in South Dakota; and U.S.
Passport No. 085238399 issued on August 15, 1996 by the New
Orleans Passport Agency, Louisiana to and under the name of Steven
Bernard Bator, born on August 20, 1949 in Detroit, Michigan.4
Another application for a search warrant was filed by SPO3 Pedro B.
Barsana, Jr. with the RTC of Makati City for violation of Article 176 of
the Revised Penal Code for the search of the premises at No. 5518
Second Floor, Macodyn Building, South Superhighway (corner Pasay
Road), Makati City under the contract of Raymond Jackson a.k.a. Allen
Miller and Bernard Bator and for the seizure of the articles described
therein. Acting on the application on November 28, 1997, Judge Pedro
N. Laggui of Branch 60 of the RTC issued Search Warrant No. 97029.5
On December 2, 1997, an Information docketed as Criminal Case No.
97-2078 was filed with the Municipal Trial Court of Angeles City against
the petitioner and Bueta for violation of Article 176 of the Revised
Penal Code.6
When apprised of the seizure of the aforementioned passports from
the petitioner, U.S. Vice Consul Raymond Greene of the United States
Embassy in the Philippines advised the Department of Justice on
December 10, 1997 that the said passports had been cancelled. 7
Summary deportation proceedings were initiated at the Commission of
Immigration and Deportation (CID) against the petitioner docketed as
SDO No. BOC 97-46. On December 11, 1997, the Board of
Commissioners (BOC) issued an Order ordering the summary
deportation of the petitioner to his country of origin and directing the
Chief of Civil Security Unit to implement the order within three days
from notice thereof, subject to compliance with the 1997 Deportation
Rules of Procedures - Office Memorandum No. ELM-97-013. 8 In the
meantime, the name of the petitioner was included in the blacklist of
the CID.9
Aside from the aforementioned criminal cases, other criminal cases
were filed against Jackson with the RTC as follows:
Criminal
Case No.

G.R. No. 139255

The Accused

In What Court Cases


are Pending

1. 98-1155

Raymond Michael Jackson


alias Allen Miller

Makati RTC
Branch 133

Republic of the Philippines


SUPREME COURT
Manila

2. 98-903

Raymond Jackson

Makati RTC
Branch 135

SECOND DIVISION

3. 97-202

Raymond M. Jackson
a.k.a. Allen Miller and
Jaime Bueta

QC RTC
Branch 83

4. 98-1152

Raymond Jackson

Makati RTC Branch


13510

November 24, 2003

RAYMOND MICHAEL JACKSON, petitioner,


vs.
HON. FLORITO S. MACALINO, RUFUS B. RODRIGUEZ, BUREAU
OF IMMIGRATION, JOHN DOE and JANE DOE, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for certiorari under Rule 65 of the Rules of Court, as
amended, for the reversal of the Decision 1 of the Regional Trial Court
(RTC) of Pasay City, Branch 267, in Special Proceedings No. 10948
dismissing the petition for habeas corpus filed by the petitioner.
The Antecedents
SPO3 Rodolfo M. Villaceran of the Philippine National Police (PNP)
filed an application with the RTC of Angeles City, Pampanga, for the
issuance of a search warrant against petitioner Raymond M. Jackson,
an American citizen, a.k.a. Allen Miller, and Jaime C. Bueta for the
search of the articles listed therein at No. 17-21 Apple Street,
Hensonville Homes, Balibago, Angeles City, and the seizure thereof for
violation of Article 176 of the Revised Penal Code. 2 Judge Bernardita
G. Erum granted the application and issued Search Warrant No. 97-29

On December 7, 1997, the Quezon City RTC ordered the release of


the petitioner in Criminal Case No. 97-202 after posting a P6,000 bail.11
On September 18, 1998, the Makati RTC issued an order in Criminal
Case No. 98-1155 directing the CID to hold the departure of the
petitioner from the Philippines in view of the pending criminal cases
against him.12 On September 28, 1998, the Makati RTC ordered the
release of the petitioner in Criminal Case No. 98-1152 after he posted
bail in the amount of P40,000.13
On October 1, 1998, the petitioner filed a motion for reconsideration
with the CID for the reconsideration of the BOC Order dated December
11, 1997 directing his deportation.14 He alleged inter alia that: (a) he
was married to Lily Morales by whom he had two children: Cristina
Jackson and Judaline Jackson; (b) his status was converted into that
of a permanent resident on September 30, 1987 under Section 13-A of
the Immigration Act, as amended with Official Passport No. 3121487;
(c) his deportation from the Philippines would deprive him of the
opportunity to defend himself in the criminal cases pending against

him. He appended to his motion a copy of his marriage contract with


Lily Morales and their childrens birth certificates. On October 14, 1998,
the CID issued an order denying the petitioners motion for
reconsideration for lack of merit.15
The petitioner could not be deported because he filed a petition to lift
the summary order of deportation with the CID which as of December
15, 1998 had not yet been resolved,16 pending the issuance of
clearances from the NBI and PNP, travel documents and an airplane
ticket.
On May 18, 1999, Tedd Archabal, Vice Consul of the Anti-Fraud Unit in
the U.S. Embassy in Manila, issued a certification that U.S. Passport
No. Z4613110 issued to and under the name of "Raymond Michael
Jackson" and No. 085238399 issued to Steven Bernard Bator had
been cancelled because the persons appearing in the photographs
affixed in the said passports did not match those appearing in the
photographs affixed in the original applications for the issuance of the
same.17 The CID issued Mission Order No. RBR-99-164 on May 21,
1999 for the petitioners arrest for being an undesirable alien under
Section 37(a), paragraph 9 of the Philippine Immigration Act of 1940,
as amended,18 based on the hold departure order in Criminal Case No.
98-1155 and the certification of Vice Consul Tedd Archabal. The
petitioner was arrested by P/C Inspector James B. Mejia of the Foreign
Intelligence and Liaison Office, PNP Intelligence Group, Camp Crame,
Quezon City, who turned him over to the CID on the said date.19
The petitioner filed a petition for habeas corpus with the Court on June
28, 1999 against the Commissioner of the CID and John Doe and Jane
Doe; and on the same date, the Court issued a resolution (a) directing
the issuance of a writ of habeas corpus and the respondents to make a
return of the writ on or before July 2, 1999 at 8:30 a.m.; (b) ordering
the Pasig RTC Judge to whom the case would be raffled to conduct a
hearing of the petition, to render judgment and to serve a copy of its
decision within two days from its promulgation.20
In their return filed with the RTC on July 8, 1999, the respondents
alleged inter alia that the petitioner was arrested and detained at the
CID on the basis of the summary deportation order issued by the BOC
on December 11, 1997 and of the hold departure order of the Makati
RTC in Criminal Case No. 98-1155; the petitioners petition for habeas
corpus was premature as there was a pending petition to lift the
summary deportation order before the BOC filed by him. 21 On July 15,
1999, the RTC rendered a decision dismissing the petition of Jackson
and denied his plea for a writ of habeas corpus.22
The petitioner assails the decision of the RTC and prays for the
reversal thereof, contending that:
A. RODRIGUEZ CANNOT ISSUE WARRANTS OF ARREST
SINCE ONLY JUDGES CAN ISSUE THE SAME.
B.
ASSUMING,
WITHOUT
CONCEDING,
THAT
RODRIGUEZ CAN ISSUE WARRANTS OF ARREST, SUCH
CAN ONLY BE ISSUED TO ENFORCE A FINAL ORDER OF
DEPORTATION; HOWEVER, IN THE INSTANT CASE,
THERE IS NO FINAL ORDER OF DEPORTATION.
C. PETITIONERS RIGHT TO DUE PROCESS HAS BEEN
VIOLATED.23
The petitioner avers that under Article III, Section 2 of the Philippine
Constitution, only judges are vested with authority to issue warrants for
the arrest of persons, including aliens. Even if it is assumed that the
Commissioner of the CID is authorized to issue a warrant of arrest, this
is limited only to those cases where a final order of deportation had
already been issued by the BOC, and only for the purpose of
implementing the said order. According to the petitioner, the order of
deportation issued by the BOC on December 11, 1999 is illegal; hence,
null and void. The petitioner was not apprised of any specific charges
filed against him with the CID and was not heard on the said charges
as required by law before the order was issued. The petitioner asserts
that there was no probable cause for his arrest by the CID and that the
respondents even violated the Memorandum Circular of the Secretary
of Justice dated June 7, 1999.24 The petitioner cited the ruling of the
Court in Lao Gi v. CA25 to fortify his petition.
In their comment on the petition, the respondents averred that the CID
is authorized under Section 37(a) of the Philippine Immigration Act of
1940, as amended, to issue warrants for the arrest of aliens on the
CIDs finding of the existence of a ground for deportation. The

petitioner cannot feign lack of due process because he filed a motion


for the reconsideration of the December 11, 1997 Order of the BOC
ordering his summary deportation which the BOC denied on October
14, 1998. When Mission Order RBR-99-164 was issued on May 21,
1999 to effect the arrest of the petitioner, it was on the basis of a final
and executory order of deportation. The RTC, for its part, held that (a)
the petition was premature because the petitioners petition with the
CID to lift the summary order of deportation had not yet been resolved
by the BOC of the CID; (b) the petition for habeas corpus was
inappropriate because the petitioner was validly detained under a
mission order issued by the Commissioner based on the order of
deportation issued by the BOC on December 11, 1997; (c) the
petitioner is estopped from assailing his arrest and detention by the
CID.
The petition is dismissed.
Section 1, Rule 102 of the Rules of Court, as amended, provides that
"except as otherwise expressly provided by law, the writ of habeas
corpus shall extend to all cases of illegal confinement or detention by
which any person is deprived of his liberty, or by which the rightful
custody of any person is withheld from the person entitled thereto."
The ultimate purpose of the writ of habeas corpus is to relieve a person
from unlawful restraint. It is essentially a writ of inquiry and is granted
to test the right under which he is detained. 26 Section 4, Rule 102 of
the said Rules provides when the writ of habeas corpus is not allowed
or discharged authorized:
Sec. 4. When writ not allowed or discharged authorized. If it appears
that the person alleged to be restrained of his liberty is in the custody
of an officer under process issued by a court or judge or by virtue of a
judgment or order of a court of record, and that the court or judge had
jurisdiction to issue the process, render the judgment; or make the
order, the writ shall not be allowed; or if the jurisdiction appears after
the writ is allowed, the person shall not be discharged by reason of any
informality or defect in the process, judgment, or order. Nor shall
anything in this rule be held to authorize the discharge of a person
charged with or convicted of an offense in the Philippines, or of a
person suffering imprisonment under lawful judgment.
The term "court" includes quasi-judicial bodies like the Deportation
Board of the Bureau of Immigration.27
Even if the arrest of a person is illegal, supervening events may bar his
release or discharge from custody. What is to be inquired into is the
legality of his detention as of, at the earliest, the filing of the application
for a writ of habeas corpus, for even if the detention is at its inception
illegal, it may, by reason of same supervening events such as the
instances mentioned in Section 4, Rule 102, be no longer illegal at the
time of the filing of the application. Any such supervening events are
the issuance of a judicial process preventing the discharge of the
detained person.28
As a general rule, the burden of proving illegal restraint by the
respondents rests on the petitioner who attaches such restraints.
Whether the return sets forth process where on its face shows good
ground for the detention of the petitioner, it is incumbent on him to
allege and prove new matter that tends to invalidate the apparent
effects of such process.29
Section 13 of Rule 102 of the Rules of Court, as amended, provides
that if it appears that the detained person is in custody under a warrant
of commitment in pursuance of law, the return shall be considered
prima facie evidence of the cause of restraint:
Sec. 13. When the return evidence, and when only a plea. If it
appears that the prisoner is in custody under a warrant of commitment
in pursuance of law, the return shall be considered prima facie
evidence of the cause of restraint; but if he is restrained of his liberty
by any alleged private authority, the return shall be considered only as
a plea of the facts therein set forth, and the party claiming the custody
must prove such facts.
In this case, based on the return of the writ by the respondents, the
petitioner was arrested and detained at the CID detention center at
Bicutan, Paraaque City, under Mission Order No. RBR-99-164 dated
May 21, 1999 based on the Order of the BOC dated December 11,
1997 which had become final and executory. The BOC found, after due
proceedings, that:

Records show that on 10 December 1997, Vice Consul Raymond


Greene of the U.S. Embassy in Manila advised the Department of
Justice that the U.S. passports which were confiscated from the
abovenamed respondent when he was arrested by PNP operatives in
Angeles City on 30 November 1997 and purportedly issued to
Raymond Michael Jackson and Steven Bernard Bator have been
determined to have been tampered. As a consequence, said passports
were cancelled by the U.S. Embassy.

tampered with; hence, cancelled were sufficient grounds for the arrest
and deportation of aliens from the Philippines:

In Schonemann vs. Commissioner Santiago, et al., (G.R. No. 86461,


30 May 1989), the Supreme Court ruled that if a foreign embassy
cancels the passport of an alien, or does not reissue a valid passport
to him, the alien loses the privilege to remain in the country.

Furthermore, the foregoing letters of the official representative of the


Taiwanese government belie the petitioners submission that there was
no evidence to prove the findings of the CA and the Board of
Commissioners. Verily, these documents constitute sufficient
justification for his deportation. As the Court held in the landmark case
Forbes v. Chuoco Tiaco, "[t]he mere fact that a citizen or subject is out
of the territory of his country does not relieve him from that allegiance
which he owes to his government, and his government may, under
certain conditions, properly and legally request his return."33

WHEREFORE, in view of the foregoing, the Board of Commissioners


hereby orders the summary deportation of NORMAN LLOYD @
RAYMOND MICHAEL JACKSON @ STEVEN BERNARD BATOR to
his country of origin subject to compliance with the 1997 Deportation
Rules of Procedures-Office Memorandum Order No. ELM-97-013.
The Chief of the Civil Security Unit is hereby ordered to implement this
Order within three (03) days from receipt hereof.
Include respondents name on the Blacklist.
Give respondent a copy hereof.30
The information relayed by U.S. Vice Consul Raymond Greene to the
DOJ on December 10, 1997 was reiterated by U.S. Vice Consul Tedd
Archabal in his certification forwarded to the DOJ on May 18, 1999,
thus:
C E R TI F I CATI O N
I, Tedd Archabal, Vice Consul of the United States hereby certify that
United States Passport Number Z4613110 issued June 2, 1983 at the
U.S. Embassy, Manila in the name of RAYMOND MICHAEL
JACKSON, born October 17, 1951 at South Dakota is a genuine
United States Government document that has been altered and
photosubstituted.
I also certify that United States Passport Number 085238399 issued
August 15, 1996 at the New Orleans Passport Agency, Louisiana, in
the name of STEVEN BERNARD BATOR, born August 20, 1949 at
Detroit, Michigan, is a genuine United States Government document
that has been altered and photosubstituted, as well.
I further certify that a comparison of photographs affixed to U.S.
Passports Number Z4613110 and 085238399 which were seized by
Philippine National Police officers on or about November 29, 1997 from
a man claiming to be Raymond Michael Jackson and photographs
affixed to the original applications for passports number Z4613110 and
085238399 in the names of Raymond Michael Jackson and Steven
Bernard Bator on file with the U.S. Department of State, Washington,
DC, revealed that these are not/not the same people.31
The petitioners arrest and detention are in accord with Section 45(d) in
relation to Section 37(a)(9) of the Philippine Immigration Act of 1940
which respectively reads:
SEC. 45. (d) being an alien, enters the Philippines without inspection
and admission by the immigration officials, or obtains entry into the
Philippines by willful, false, or misleading representation or willful
concealment of a material fact;

SEC. 37. (a) The following aliens shall be arrested upon the warrant of
the Commissioner of Immigration or of any other officer designated by
him for the purpose and deported upon the warrant of the
Commissioner of Immigration after a determination by the Board of
Commissioners of the existence of the ground for deportation as
charged against the alien:

(9) Any alien who commits any of the acts described in Sections Fortyfive and Forty-six of this Act, independent of criminal action which may
be brought against him:
In Tung Chin Hui v. Rodriguez,32 this Court held that such documents
from a foreign embassy attesting to the cancellation of the passports
held by their national on the ground that the said passports were

The above-quoted official letters demonstrate the speciousness of the


petitioners contention that his passport could not have been cancelled
in 1995, inasmuch as he was allowed to enter the country as late as
1998. The letters show that the Philippine government was informed
about the cancellation only in 1998.

The petitioner cannot feign ignorance of the charges against him in the
CID and insist on being deprived by the BOC of his right to due
process as prescribed for in Section 37(c) of the Philippine Immigration
Act of 1940, thus:
(c) No alien shall be deported without being informed of the specific
grounds for deportation nor without being given a hearing under rules
of procedure to be prescribed by the Commissioner of Immigration.
This is so because on October 1, 1998, the petitioner filed a motion
with the CID for the reconsideration of the December 11, 1997 Order of
the BOC. The petitioner did not allege therein that he was not informed
of the charges against him. In fact, the petitioner did not even rebut the
claim of the U.S. Vice Consul that the passport he was carrying was
tampered and had been already cancelled. Neither did he allege that
he requested for the reinstatement of his passport with the United
States Embassy. Despite the finality of the deportation order of the
BOC, it still entertained the petitioners motion for reconsideration but
denied the same on its findings that there were inconsistencies in his
sworn statement and the documents he presented in support of his
motion, thus:
After going over the motion, we find no valid reason to disturb the order
of 12 (sic) December 1997. Likewise, the same had long become final
and executory.
Furthermore, the grounds alleged in the motion have no merit and are
irrelevant. The alleged marriage of respondent to a Filipina, a certain
Lily Morales, with whom respondent allegedly begot two (2) children
named Cristina and Judaline both surnamed Jackson, and the
supposed conversion of respondents status to permanent resident on
30 September 1987 under Section 13(a) of the Immigration Act (CA
No. 613, as amended), does not change the fact that the two (2) US
passports purportedly issued to Raymond Michael Jackson and Steven
Bernard Bator which were used by respondent, were tampered and
subsequently cancelled by the U.S. Embassy. Respondent already lost
the privilege to remain in the country (Schonemann v. Comm.
Santiago, G.R. No. 86461, 30 May 1989).
It is also significant to note the evident inconsistencies in the sworn
statement of respondent conducted by Special Prosecutor Henry B.
Tubban on 5 December 1997 with the documents attached in the
motion. Hereunder are the said inconsistencies:
1. Annex "A" of the Motion is an alleged Marriage Contract
between the respondent and one Lily H. Morales showing
Manila City Hall as the place of marriage and which was held
on 6 September 1984.
In the Sworn Statement, the respondent claimed to have
entered the country for the first time only in 1988 (p. 1 of
sworn statement), that he married a certain Lily Morales
sometime in 1989 in Angeles City (p. 2 of sworn statement).
2. The motion stated that out of the union of the respondent
with Ms. Morales, two (2) children named Cristina and
Judaline both surnamed Jackson, were born. In the sworn
statement of the respondent, he stated that they have five
(5) children.
In addition, in the marriage contract (Annex "A" of motion), it
was stated that Ms. Morales is 17 years of age, a minor.
However, below the personal circumstances of the

respondent and Mrs. Morales is a statement in bold letters


that "BOTH PARTIES ARE OF LEGAL AGES."
The foregoing creates a serious doubt on the allegations in the motion
and on the authenticity of the documents attached thereto. With more
reason that the motion should be denied.34
Moreover, the petitioner, in his motion for reconsideration with the CID,
offered to post a bail bond for his provisional release to enable him to
secure the necessary documents to establish the appropriate grounds
for his permanent stay in the Philippines. By offering to post a bail
bond, the petitioner thereby admitted that he was under the custody of
the CID and voluntarily accepted the jurisdiction of the CID.35
The present as clearly as the petitioners petition to lift the order of
deportation was as yet unresolved by the BOC when he filed the
petition for habeas corpus.
IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED. The
Decision of the RTC in Special Proceedings No. 10948 is AFFIRMED.
Costs against the petitioner.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 163998

September 13, 2004

IN THE MATTER OF THE PETITION FOR ISSUANCE OF


WRIT OF HABEAS CORPUS OF COLONEL JOSE F.
GAMOS, COLONEL JOSE F. GAMOS, petitioner,
vs.
LT. GEN. EFREN F. ABU, Commanding General, Philippine
Army, AFP, COL. ARNULFO A. TINGA, and YLANAN,
Commanding Officer, HHSG, Philippine Army-Fort Andres
Bonifacio, respondents.
RESOLUTION
AZCUNA, J.:

Before us is a petition for habeas corpus filed by Colonel Jose


F. Gamos, who is at present under arrest or restricted to his
quarters at B1933 PAOVILLE, Fort Bonifacio.
Col. Gamos claims in his petition that on or about March 25,
2004, he sought permission for a leave of absence of sixty (60)
days for the following reasons: "(a) to attend to some very
important personal and family concerns; and (b) to have ample
time to finish [my] thesis as required [for the completion] of
[my] MA in Public Administration at the Centro Escolar
University in Manila."1 He purportedly went to Mindanao
sometime around the last week of April, 2004, and stayed
particularly in the Region IX area. According to him, he used to
be assigned in the said area and he went there to buy scrap
metals, a business in which he had lately been engaged. This,
said petitioner, is his way of augmenting the family income.
While there, he met with former classmates from the Philippine
Military Academy (PMA) who helped him look for scrap metals.
However, before he could consummate any transaction
regarding this business, he received word that his leave of
absence had been cut short, effective May 15, 2004. He was
ordered to report back to his mother unit at the 901st Infantry
Brigade based in Villahermosa, Albay. Petitioner claims that it
was only after his making some inquiries that he learned that
the heads of the AFP in Manila received intelligence reports
that he traveled to Region IX for the purpose of monitoring the
election in the area on behalf of the presidential candidate,
Fernando Poe, Jr. Petitioner flew back to Manila from
Zamboanga City on May 20, 2004. Upon his arrival in Manila,
he was allegedly "immediately taken into custody and placed
under house arrest or restricted to his quarters" upon the
orders of Lieutenant General Efren F. Abu, the Commanding
General of the Philippine Army.2 Petitioner Gamos claims that
he was not given any opportunity to know the reason for his
arrest and that no formal or written order for his commitment or
arrest was ever issued by the AFP. According to him, his arrest
was effected merely upon the verbal order of Lt. Gen. Abu.3
On June 14, 2004, petitioners counsel wrote a letter to Lt.
Gen. Abu protesting the arrest and confinement of petitioner.4
On June 18, 2004, petitioner, through his counsel, received a
reply from the Army Judge Advocate stating that he had
already been charged under Commonwealth Act No. 408, also
known as the Articles of War. It further said that there is
probable cause that petitioner Gamos "ha[d] committed gross
violation[s] of the provisions of Commonwealth Act 408,
particularly Article of War 96 (Conduct Unbecoming of an
Officer and a Gentleman) and Article of War 97 (Disorders and
Neglects to the Prejudice of Good Order and Military
Discipline)." Attached to the letter were copies of the Charge
Sheet dated June 8, 2004 and an Affidavit of a certain Mannan
Tambayong stating that he saw petitioner Gamos campaigning
for the presidential candidate, Fernando Poe, Jr., in Patikul,
Sulu, on May 5, 2004.5
The respondents were required to file their Answer to the
petition in a resolution issued by this Court on July 6, 2004.
Represented by the Solicitor General, the respondents
complied on July 21, 2004.lavvphil.net

The question raised herein is whether or not petitioners


confinement is devoid of support in law.
The Solicitor General has submitted proof that orders for
petitioners arrest exist. Respondents set forth in the Answer
that the arrest or restriction to quarters of petitioner was
effected pursuant to a written order from the Commander of
the Southern Command (COMSOUTHCOM) dated May 15,
2004, and signed by Colonel Pedro P. Biasbas, Acting Chief of
Staff of the Southcom. Annexed to the Answer was a copy of
the Official Report dated June 8, 2004, which was made by
Army Provost Marshall Colonel Roberto C. Ver and submitted
to the G1, Philippine Army, Assistant Chief of Staff for
Personnel. The aforesaid report summarized the alleged
electioneering activities of the petitioner in Mindanao. The
contents of the report were based on investigation reports,
disposition forms, affidavits, and other records of the Army
Provost Marshall investigation proceedings. Respondents also
aver that on May 27, 2004, at 2:30 p.m., the petitioner was
informed during an investigation by the Army Provost Marshall
of the reason for his arrest or restriction to quarters. Petitioner,
allegedly, was with his counsel, Atty. Kenneth Radaza. It was
also during this investigation that petitioner was shown the
documentary evidence against him. Another investigation was
conducted on June 3, 2004 at 4:00 p.m., during when
petitioner was shown the affidavit of Mannan Tambayong, one
of the alleged witnesses.
Furthermore, respondents argue that petitioner himself even
admitted having received a facsimile copy of the Charge Sheet
dated June 8, 2004, which he even appended as Annex "C" to
his petition. A certified true copy of the charge sheet is also
attached as Annex "4" to respondents Answer herein, which
has been furnished petitioner, through counsel.
Petitioner thus stands charged in court martial proceedings for
alleged violations of the Articles of War, specifically, Articles of
War 96 and 97 thereof.
The filing of the case against petitioner before the military court
defeats this petition. The case having been filed in court,
petitioners remedy lies in that court.
WHEREFORE, the petition is DISMISSED. No costs.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 141311

May 26, 2005

BERNICE LEGASPI, petitioner,


vs.
SPOUSES RITA and FRANCISCO ONG, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari filed by petitioner Bernice
Legaspi seeking to annul and set aside the Decision dated July 30,
1998 of the Court of Appeals (CA)1 reversing the decision of the trial
court and ruling that the deed of sale with right to repurchase executed
by respondent spouses in favor of petitioner over the subject property
was an equitable mortgage; and its Resolution dated January 4, 20002
denying petitioners motion for reconsideration.
Respondent spouses Francisco and Rita Ong were owners of a parcel
of land located at 375 Matienza Street, San Miguel, Manila with an
area of 1,010 square meters and a two-storey house. They mortgaged
the subject property with the Permanent Savings and Loan Bank
(PSLB) to secure their loan. For their failure to pay their loan, PSLB
foreclosed the mortgage on the subject property and thereafter sold it
in a public auction where the bank emerged as the highest bidder.
Respondent spouses failed to redeem the property within the
redemption period, thus, the title was consolidated in the name of
PSLB under Transfer Certificate of Title (TCT) No. 182956 on
November 10, 19883 but respondent spouses continued to occupy the
premises. When PSLB was subsequently ordered liquidated by the
Monetary Board of the Central Bank, PSLBs acquired assets were
required to be disposed of to pay its debts, thus respondent spouses,
being the original owners of the subject property, were given first
priority by the Central Bank Liquidator to buy back their property in the
amount of P2,655,000.00 on or before June 13, 1989. Since
respondent spouses had no money then, they approached petitioners
father, Stephen Hong, a classmate and friend of respondent Francisco,
and sought his help to pay and redeem the subject property. Petitioner
and her father were shown the title of the subject property in
respondent Ritas name. After some deliberations thereon, the parties
agreement was reduced into writing denominated as a Deed of Sale
with Right to Repurchase4 drafted by petitioners counsel, Atty.
Bienvenido Rillo, in the following terms and conditions:
...
The title to above-described property is presently held by the
Central Bank of the Philippines and the latter has given
VENDOR the privilege of getting back the title to the abovedescribed property by paying them the amount of TWO
MILLION SIX HUNDRED FIFTY FIVE THOUSAND
(P2,655,000.00) PESOS;

VENDOR has offered to sell this property to VENDEE on


condition she be allowed to repurchase this property subject
to the terms and conditions hereinafter recited:
1. VENDEE shall pay the Central Bank of the Philippines the
amount of TWO MILLION SIX HUNDRED FIFTY FIVE
THOUSAND (P2,655,000.00) PESOS for and in behalf of
VENDOR;
2. VENDOR shall have the right to repurchase the abovedescribed property within a period of four (4) months, without
interest, which shall be extended by another month upon
request of the VENDOR;
3. During the four (4) month period or its extension VENDOR
shall have the right to re-sell the said property to any party,
other than the VENDEE, who may desire to purchase the
property;
4. In the event VENDOR should fail to repurchase the
property within the four (4) months agreed upon then
VENDEE, notwithstanding the extended period, shall pay
interest at the rate of four (4%) percent per month reckoned
from the execution of this document;
5. In the event VENDOR shall repurchase the property at
any time before the expiration of four (4) months or its
extended period the VENDOR shall pay interest on the
amount at the rate of four (4%) percent per month reckoned
from the signing of this Agreement;
6. Should VENDOR fail to comply with the foregoing terms
and conditions then the property shall by virtue thereof
become the property of VENDEE;
7. All expenses to be incurred as a result of this transaction
such as documentary stamps, transfer fee, capital gains tax
and documentation fees, shall be for the account of
VENDOR;
NOW, THEREFORE, for and in consideration of the
foregoing, VENDOR hereby sells, cedes, transfers and
conveys unto the VENDEE the above-described parcel of
land together with all the improvement thereon fall (sic) from
any lien and encumbrances. VENDOR hereby warrants the
property is not devoted to the cultivation of palay or corn nor
is it covered by the priority development program of the
government.5

amount of P2,655,000.00 on its due date will force her to take the
corresponding action to consolidate title on the property in her name.
On November 23, 1989, petitioners counsel wrote respondents a
letter10 informing them that petitioner, acting on their request for
extension of a weeks time to repurchase the subject property,
consented to give them up to November 28, 1989. However,
respondent spouses failed to redeem the subject property from
petitioner within the period given them. Despite the expiration of the
period to repurchase, petitioner still granted respondent spouses
opportunity to repurchase the subject property in a letter dated April 14,
1990, where petitioners counsel demanded for the payment of the
amount of P2,655,000.00 plus all the interest due thereon within five
days from receipt otherwise, necessary legal action will be taken to
transfer ownership in petitioners name.11
In October 1990, petitioner filed a petition for consolidation of
ownership12 before the Regional Trial Court (RTC) of Manila, which
was raffled to Branch 39,13 docketed as Civil Case No. 90-54623.
Petitioner prayed for the cancellation of TCT No. 182956 and for the
issuance of a new title in her name, attorneys fees and cost of suit.
In their answer with compulsory counterclaim, 14 respondent spouses
alleged that the Deed of Sale with Right to Repurchase did not reflect
the true intention of the parties because the document was actually an
equitable mortgage with illegal provision, i.e., pactum commissorium;
that petitioner has no cause of action against respondents; that there
was non-joinder of the real party-in-interest; that the Court has no
jurisdiction over the case; that relief sought will cause undue
enrichment on respondents as the subject property claimed was worth
P15 million.15 They prayed for the dismissal of the petition and asked
for damages, attorneys fees and costs of the suit as counterclaim.
On July 6, 1993, the RTC rendered its decision 16 in favor of petitioner,
the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered ordering the consolidation of title in the name of
petitioner Bernice Legaspi and the Register of Deeds of the
City of Manila is hereby ordered to cancel Transfer
Certificate of Title No. 182956, issued in the name of
Permanent Savings and Loan Bank, and in lieu thereof, a
new one be issued in the name of petitioner BERNICE
LEGASPI upon payment of the corresponding charges.
Respondents are hereby ordered to pay attorneys fees in
the sum of P25,000.00.
Respondents counterclaim is hereby DISMISSED for lack of
merit. With costs against respondents.17
In arriving at its decision, the trial court made the following disquisition:

which respondent spouses and petitioner signed on June 13, 1989.


Immediately after the deed was signed, and since it was the last day to
redeem the property, petitioner, with her lawyer, Atty. Rillo, and
respondent Francisco went to the Central Bank and with petitioners
check paid the amount of P2,655,000.00 to the bank for and in behalf
of respondents. A Deed of Absolute Sale6 was executed between
PSLBs Liquidator, Renan V. Santos, and respondent spouses, as
original owners, over the subject property on June 13, 1989.
Respondent Francisco then wrote7 the Deputy Liquidator of PSLB,
Central Bank, to release the Deed of Sale and the title to the subject
property to petitioner as his authorized representative. Petitioner
received the documents on June 19, 1989.8
On September 26, 1989, petitioner wrote respondents a letter 9
reminding them that the four-month period to repurchase the subject
property will expire on October 12, 1989 and that failure to pay the

The main controversy centers on the true nature of Exhibit


"C", the Deed of Absolute Sale with Right to Repurchase.
The Court examines Exhibit "C", and finds it clear,
unambiguous and unequivocal. If the terms of the contract
are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of the stipulation shall
control (Art. 1370 CC). The intention of the parties is to be
deduced from the language employed by them and the
terms of the contract found unambiguous, are conclusive in
the absence of averment and proof of mistake, the question
being not what intention existed in the minds of the parties
but what intention is expressed by the language used. When
the words of a contract are plain and readily understandable,
there is no room for construction (Dihiasan, et al. vs. CA,
G.R. 49839, Sept. 14, 1987).

According to Rita Ong who admitted having signed the


document she trusted Mr. Hong as her husbands former
classmate. There is a presumption in law that a person takes
ordinary care of his concern (Rule 131, Sec. 5(d), Revised
Rules of Evidence). It is to be presumed that Rita Ong a
pharmacy and medical technology graduate would not sign a
document without being satisfied of the contents thereof.
She knew fully well what she was signing. Rita Ong admitted
on the stand that the matter was discussed in the residence
of the petitioner in the presence of her husband and Mr.
Hong. She was completely aware, therefore, that she was
executing a document, a Deed of Sale with Right to
Repurchase. If she did not like its contents, she could easily
refrain from signing the document. After signing the
document, she cannot now be heard to complain that the
parties to said exhibit intended the same to be loan with
mortgage contrary to what are clearly expressed therein.
The natural presumption is that one does not sign a
document without first informing himself of its contents. It is
the duty of every contracting party to learn and know the
contents of a contract before he signs and delivers it. He
owes this duty to the other party to the contract because the
latter may probably pay his money and shape his action in
reliance upon the agreement. To permit a party when sued
on a written contract to admit that he signed it but to deny
that it expresses the agreement he made or to allow him to
admit that he signed it but did not read it or know its
stipulation could absolutely destroy the value of all contracts.
(Tan Tun Sia vs. Yu Bin Sentua, 56 Phil. 711).
The Court rejects respondents Exhibits "11", "11-A" and "12"
to show the inadequacy of the price considering that
evaluation of P4,500.00 per square meter and the appraisal
of P15M were not made on or before June 13, 1989, the
date the contract was executed by the parties. The evidence
shows that the lot in question is titled in the name of
Permanent Savings and Loan Bank for P2,655,000.00 and
was paid by the petitioner in such amount. Said amount is
approximately 50% of their total assessed value of
P1,016,580.00 (Exhibit "D") as appearing in the tax
declaration. A difference in value is not always a decisive
factor for determining whether or not the contract is one of
sale with right to repurchase or equitable mortgage.
After the sale on June 13, 1989, Spouses Ong did not pay
the real estate taxes on the land.
The records show that after the expiration of respondents
right to repurchase the lot, demands were made but were
completely ignored, hence, the filing of this case and the
unlawful detainer with the Metropolitan Trial Court (Exhibit
"E").
Assessing the evidence on record, the Court declares that
the contract entered into by the petitioner and respondents
Spouses Ong is one of a sale with right to repurchase, as
supported by the evidence on record. Respondents Ongs
had already parted with their property when the mortgage
was foreclosed by Permanent Savings and Loan Bank for
P2,655,000.00 which was the price of the lot and, therefore,
having discussed the transaction with the petitioner prior to
the preparation of the contract, respondents cannot now
repudiate what they have done. Since petitioner was forced
to litigate to enforce her right under the contract, respondent
spouses Ong should pay reasonable attorneys fees.18

Respondent spouses motion for reconsideration was denied in an


Order dated November 25, 1993.19
At the time that the proceedings for the petition for consolidation of
ownership were on-going, petitioner, on February 14, 1991, claiming
her right to possess the subject property on the basis of respondents
failure to repurchase the subject property had filed an unlawful detainer
case against respondents20 before the Metropolitan Trial Court (MeTC),
Branch 19, Manila, docketed as Civil Case No. 134770-CV. The MeTC
decided against respondent spouses on September 1, 1993 21 whereby
respondent spouses were ordered to vacate the subject property and
surrender possession thereof to petitioner; to pay P25,000.00 a month
from February 13, 1991 as reasonable compensation for the use and
occupancy of the subject property until possession is surrendered to
petitioner; and attorneys fees plus cost of the suit. The MeTC granted
the motion for execution filed by petitioner and issued a writ of
execution on October 8, 1993. 22 Possession of the subject property
was delivered by the sheriff to petitioners father on October 11, 1993.23
Respondent spouses appeal with the RTC was dismissed in an Order
dated March 9, 199424 for being moot and academic as the
respondents had already abandoned the property and possession
thereof was turned over to petitioner and ordered that the records be
remanded to the court a quo for execution of its own judgment.
As respondents were aggrieved by the decision of the RTC granting
the consolidation of title in petitioners name, respondent spouses
appealed to the CA. During the pendency of respondents appeal,
petitioner filed a motion for execution pending appeal of the RTCs
decision dated July 6, 1993. The appellate court granted the motion for
execution pending appeal in a Resolution 25 dated December 1, 1994,
subject to the posting of a bond in the amount of P50,000.00. It
anchored its judgment on the following findings: 26 (1) the property had
been adjudged by the trial court to be owned by petitioner who paid the
purchase price to the bank; (2) the ejectment case filed by petitioner
against respondents was decided by the MeTC in favor of the former
by ordering respondents to vacate the property, to pay P25,000.00 a
month from February 13, 1991, as compensation for the use of the
property and to surrender possession, in addition to attorneys fees; (3)
possession of the property was already delivered to petitioner and that
respondents had already abandoned the premises "much earlier"; (4)
upon inspection made by the sheriff, it was found that the house was
destroyed, cannibalized and stripped of vital fixtures and furnitures; (5)
major repairs had to be undertaken at "quite staggering cost"; (6) realty
taxes were not paid by respondents from 1989 up to the present nor
did they pay the capital gains tax, transfer fee, documentary stamps
and documentation fees even though there was an agreement for such
payment; (7) taxes due on the property, and surcharges on overdue
payment continue to accumulate which endangered the property and
the possibility of its being lost through auction sale; and (8) the grant of
execution pending appeal would then bind the petitioner to preserve
the property and to return it to respondents should the appeal be in
their favor.
Respondent spouses filed their motion for reconsideration which was
denied by the CA in a Resolution dated June 30, 1995. 27 As a
consequence, the Register of Deeds of Manila cancelled TCT No.
182956 in the name of PSLB and issued TCT No. 219397 in
petitioners name.
On July 30, 1998, the CA rendered herein assailed decision reversing
the RTC decision dated July 6, 1993, the dispositive portion of which
reads:
Wherefore, judgment is hereby rendered setting aside the
decision of the court a quo dated July 6, 1993 in Civil Case

No. 90-54623 and dismissing the complaint of plaintiffappellee.


The appellants are hereby ordered to redeem the property
from appellee in the amount of P2,655,000.00 with legal
interest computed from the time the sale of redemption fell
due up to the time the obligation is fully paid.
Appellee is hereby ordered to pay appellants the monthly
rent of the subject premises from October 1993 up to the
time possession thereof is turned over to appellant, which is
hereby fixed in the amount of P25,000.00 a month;
attorneys fees in the amount of P100,000.00; and the cost
of suit.28
The appellate courts reversal was based on the following findings:
Art. 1602. The contract shall be presumed to be an equitable
mortgage, in any of the following cases:
(1) When the price of a sale with right to
repurchase is unusually inadequate;
(2) When the vendor remains in possession as
lessee or otherwise;
(3) When upon or after the expiration of the right to
repurchase another instrument extending the
period of redemption or granting a new period is
executed;
(4) When the purchaser retains for himself a part
of the purchase price;
(5) When the vendor binds himself to pay the
taxes on the thing sold;
(6) In any other case where it may be fairly
inferred that the real intention of the parties is that
the transaction shall secure the payment of a debt
or the performance of any other obligation.
In any of the foregoing cases, any money, fruits, or other
benefit to be received by the vendee as rent or otherwise
shall be considered as interest which shall be subject to the
usury laws.
From the aforecited provisions, it is clear that the contract
executed between the parties is one of equitable mortgage.
The law requires anyone, and not the concurrence of all the
circumstances mentioned therein to conclude that the
transaction is one of equitable mortgage. It is clear from the
records of the case, that appellants remained in possession
of the property even after the execution of the contract, aside
from the fact that the amount in the document purportedly
the consideration of the sale was only P2.6 Million, while the
property commands the price of P16 Million (Exhs. 12-12-U;
TSN, August 12, 1992, pp. 16-17, 19), hence, there was
gross inadequacy of the price. Likewise, the deed stipulates
the payment of interest (TSN, April 27, 1992, p. 40; TSN,
May 28, 1992, p. 31), and there were a number of
extensions of time given by the appellee for the payment by
appellants of the sum of P2.6 Million (TSN, Sept. 30, 1991,
pp. 5-6, 54-56).

These circumstances proven by the appellants to show that


the agreement was not sale with right to repurchase but one
of equitable mortgage are conclusive. On the other hand,
appellee failed to rebut these pieces of evidence.
...
The extensions of the original period of redemption as
contained in pars. 2, 3 and 5 of the Deed of Sale with Right
to Repurchase are indicative that the instrument was one of
equitable mortgage. As ruled by the Supreme Court in Reyes
vs. De Leon, 20 SCRA 639 and Burdalian vs. CA, 129 SCRA
645, it said that
It is well-settled that extension of the period of
redemption is indicative of equitable mortgage.
After a careful evaluation of the above-stated circumstances,
this Court finds the present case to exhibit several of the
familiar badges of a concealed mortgage enumerated by Art.
1602 of the Civil Code. According to the said provisions of
the Civil Code, presence of any of the circumstances
enumerated would be sufficient enough to declare the
transaction of absolute sale as one impressed with an
equitable mortgage. In the instant case there is even more
than one circumstance indicating an equitable mortgage . . .
It has also been convincingly shown that appellants were
badly in need of money at the time of the transaction
because they wanted to redeem the property and the
deadline within which to do that had almost been up. This
circumstance is likewise conclusive of the fact that "a pacto
de retro sale may be deemed an equitable mortgage when
executed due to urgent necessity for money of the apparent
vendor."29
The CA denied petitioners motion for reconsideration in a Resolution
dated January 4, 2000.
Petitioner filed the instant petition for review on certiorari on the
question of whether a Deed of Sale with Right To Repurchase may be
interpreted as one of equitable mortgage as found by the CA.
As a rule, only questions of law may be raised in a petition for review
under Rule 45 of the Rules of Court, nonetheless factual issues may
be entertained by this Court in exceptional cases. These include
instances where the findings of fact are conflicting or when the findings
of the CA are contrary to those of the trial court, 30 as in the present
case. We are constrained to go over the records of the case and
examine the arguments of the parties in their pleadings.
We have consistently decreed that the nomenclature used by the
contracting parties to describe a contract does not determine its
nature.31 Decisive for the proper determination of the true nature of the
transaction between the parties is the intent of the parties, 32 as shown
not necessarily by the terminology used in the contract but by all the
surrounding circumstances, such as the relative situations of the
parties at that time; the attitudes, acts, conduct, and declarations of the
parties; the negotiations between them leading to the deed; and
generally, all pertinent facts having a tendency to fix and determine the
real nature of their design and understanding.33
Even if a contract is denominated as a pacto de retro, the owner of the
property may still disprove it by means of parol evidence, provided that
the nature of the agreement is placed in issue by the pleadings filed

with the trial court. It must be stressed, however, that there is no


conclusive test to determine whether a deed absolute on its face is
really a simple loan accommodation secured by a mortgage. In fact, it
is often a question difficult to resolve and is frequently made to depend
on the surrounding circumstances of each case. When in doubt, courts
are generally inclined to construe a transaction purporting to be a sale
as an equitable mortgage, which involves a lesser transmission of
rights and interests over the property in controversy.34
Art. 1602 of the Civil Code enumerates the instances when a contract,
regardless of its nomenclature, may be presumed to be an equitable
mortgage. They are as follows: (a) when the price of a sale with right to
repurchase is unusually inadequate; (b) when the vendor remains in
possession as lessee or otherwise; (c) when upon or after the
expiration of the right to repurchase another instrument extending the
period of redemption or granting a new period is executed; (d) when
the purchaser retains for himself a part of the purchase price; (e) when
the vendor binds himself to pay the taxes on the thing sold; and, (f) in
any other case where it may be fairly inferred that the real intention of
the parties is that the transaction shall secure the payment of a debt or
the performance of any other obligation. Art. 1603 provides that in case
of doubt, a contract purporting to be a sale with right to repurchase
shall be construed as an equitable mortgage.
The presence of even one of the above-mentioned circumstances as
enumerated in Article 1602 is sufficient basis to declare a contract of
sale with right to repurchase as one of equitable mortgage. As stated
by the Code Commission which drafted the new Civil Code, in
practically all of the so-called contracts of sale with right of repurchase,
the real intention of the parties is that the pretended purchase price is
money loaned and in order to secure the payment of the loan, a
contract purporting to be a sale with pacto de retro is drawn up.35
The CA found the presence of four circumstances in the transaction on
which bases it ruled that the transaction was an equitable mortgage, to
wit: (a) respondents remained in possession of the subject property
even after the execution of the contract; (b) there was gross
inadequacy of price of P2,655,000.00 as contract price since the
property commands the price of P16 million; (c) extensions of the
original period of redemption; and (d) stipulation of interest.
We agree with the finding of the CA that the transaction between
respondents and petitioner was not a sale with right to repurchase but
an equitable mortgage.
Petitioner argues that Article 1602 does not apply in the instant case;
that petitioner was the one who purchased the subject property from
PSLB, the registered owner, for and in behalf of respondents; that
since the ownership had been consolidated in PSLB and the title was
in PSLBs name as early as November 10, 1988, respondents were no
longer the owners of the subject property at the time the Deed of Sale
with Right To Repurchase was executed by respondents in favor of
petitioner on June 13, 1989; that respondents can no longer constitute
a mortgage on the subject property; that respondents had the
personality to sell the property only because they were the original
owners who were favored by the Bank with the first option but it was
petitioners money that was used in buying back the subject property.
Petitioner also claims that there was never any loan between the
parties as money was not given by one to the other since petitioner
paid her money directly to the bank, thus debt which is a condition sine
qua non of an equitable mortgage was absent.
We are not persuaded.
While it is true that the title to the subject property was consolidated in
PSLBs name as early as 1988, the property was bought back by

respondent spouses, the original owners, who were given the first
option to buy it during PSLBs liquidation. Respondents were given up
to June 13, 1989 to buy back the property and since they had no
money, they had to approach petitioners father to help them in their
predicament. As respondents were able to redeem the subject property
with the use of petitioners money, a deed of sale was executed by the
Liquidator in favor of respondent spouses on June 13, 1989, the last
day given to respondents to buy back the property. Since the money
came from petitioner, respondent spouses, as owners, had executed a
document, which was denominated as a Deed of Sale with Right to
Repurchase, which was prepared by petitioners counsel and signed
by the parties also on June 13, 1989. It can be seen that the
transactions are intimately related and they were even embodied in the
deed of sale with right to repurchase, to wit:
The title to above-described property is presently held by the
Central Bank of the Philippines and the latter has given
VENDOR the privilege of getting back the title to the abovedescribed property by paying them the amount of TWO
MILLION SIX HUNDRED FIFTY FIVE THOUSAND
(P2,655,000.00) PESOS;
VENDOR has offered to sell this property to VENDEE on
condition she be allowed to repurchase this property subject
to the terms and conditions hereinafter recited:
1. VENDEE shall pay the Central Bank of the
Philippines the amount of TWO MILLION SIX
HUNDRED
FIFTY
FIVE
THOUSAND
(P2,655,000.00) PESOS for and in behalf of
VENDOR;
Clearly, the deed of sale with right to repurchase was precisely
executed by respondents to secure the money paid by petitioner for
and in behalf of respondents to PSLB Liquidator to buy back the
subject property, i.e., as equitable mortgage. Notably, respondent
spouses bought back the subject property in the amount of
P2,655,000.00 and sold the same to petitioner at exactly the same
amount they paid to PSLB Liquidator. If the intention of the respondent
spouses were to sell, they could have at least earned some profit or
interest on such sale, otherwise, they could have just allowed PSLB
Liquidator to sell it to anybody in a public bidding. Respondents wanted
to hold on to their property and not to part with it by selling the same.
Petitioner claims that respondents expressly recognized their intention
to sell the subject property to her when they executed a letter 36
requesting the bank Liquidator to release the Deed of Sale executed
between the bank and respondents as well as the duplicate copy of the
title to petitioner.
We are not impressed.
Respondent Francisco wrote Deputy Liquidator Leopoldo Ramos and
requested him to release the deed of sale and title to the subject
property to petitioner as his authorized representative. There was
nothing in the letter that would show that respondents acknowledged
petitioner as the new owner of the property.
Although, we do not agree with the CA that the price of the sale with
right to repurchase is grossly inadequate since the appraisal of the
property in the amount of more than P16 million was not made on or
before June 13, 1989, the date the contract was executed by the
parties, but only on July 24, 1992,37 we find in the transaction the
presence of some other circumstances enumerated in Art. 1602 of the

Civil Code which would establish that the transaction was an equitable
mortgage rather than sale.

stipulation in the deed shows the intention to mortgage rather than to


sell.

Respondent spouses, as vendors, remained in the possession of the


subject property even after the execution of the deed of sale with right
to repurchase.38 Well settled to the point of being elementary is the
doctrine that where the vendor remains in physical possession of the
land as lessee or otherwise, the contract should be treated as an
equitable mortgage.39 If the deed executed was really what it purports
to be, a sale with right to repurchase, petitioner should have asserted
her right for the immediate delivery of the subject property to her so
that she would have the enjoyment and possession of the same, since
petitioner, during those times, was renting a place in New Manila,
Quezon City,40 and not allowed respondents to freely stay in the
premises.

Moreover, the following provision, to wit:

Notably, in all the letters of petitioner and her lawyer, i.e., reminding
respondents that the period to repurchase was about to lapse and later
the extension of period to repurchase and demands for respondents to
repurchase the property in the amount of P2,655,000.00 plus interest
within a certain period, were sent to respondents address which is the
subject property, without registering any objection on respondents
continuous possession of the same. In effect, petitioner acknowledged
respondents right to retain possession of the subject property even
after the execution of the "pacto de retro sale." It was only on January
14, 1991 that petitioner made a demand for respondents to vacate the
subject property after respondents failed to "repurchase" the property.
Another circumstance is the fact that the period to repurchase the
subject property was extended by petitioner. In the letter dated
November 23, 198941 to respondents by petitioners counsel, Atty. Rillo,
he stated that petitioner had consented to respondents request for an
extension of time to repurchase the subject property by giving them up
to November 28, 1989. In fact, even in the petition for consolidation
itself, petitioner stated that despite the expiration of the right to
repurchase on November 28, 1989, petitioner still granted respondent
spouses opportunity to repurchase the subject property in a letter
dated April 14, 1990 by paying the amount due thereon. Moreover,
petitioner, on cross-examination, even admitted that more than one
extension was given for the respondents to repurchase. 42 It is well
settled that extension of the period of redemption is indicative of
equitable mortgage.43
Petitioner claims that there was no separate instrument extending the
period of redemption granting a new period executed between the
parties. Petitioner through her counsel wrote Exhibit "I" extending the
period of redemption. In Claravall vs. Court of Appeals,44 we held that a
note executed extending a period of redemption is indicative of
equitable mortgage.
Also, we find that there was no transmission of ownership to the
vendee. As stated in the deed, to wit:
8. Should VENDOR fail to comply with the foregoing terms
and conditions then the property shall by virtue thereof
become the property of VENDEE;
This stipulation is contrary to the nature of a true pacto de retro sale
since ownership of the property sold is immediately transferred to the
vendee a retro upon execution of the sale, subject only to the
repurchase of a vendor a retro within the stipulated period. Such
stipulation is considered a pactum commissorium enabling the
mortgagee to acquire ownership of the mortgaged properties without
need of foreclosure proceedings which is a nullity being contrary to the
provisions of Article 2088 of the Civil Code. The inclusion of such

3. During the four (4) month period or its extension VENDOR


shall have the right to re-sell the said property to any party,
other than the VENDEE, who may desire to purchase the
property;
of the subject deed is a concrete revelation of the real intention of the
parties, as contemplated in paragraph (6) of Article 1602 of the Civil
Code, that the transaction was merely to secure the payment of a debt.
A purchaser like the petitioner would not allow the respondent
spouses, as the purported vendors, to re-sell the property to any party
who may desire to purchase the property. This clearly indicates that
petitioner recognized the right of respondent spouses to exercise their
ownership of the property.
Petitioner contends that the assailed decision of the CA runs counter
with the findings of the same appellate court in the Resolution dated
December 1, 1994 granting petitioners motion for execution pending
appeal.
While the appellate court had earlier issued a Resolution granting the
motion for execution pending appeal which upheld the trial courts
findings that the transaction between the parties was one of sale, such
finding did not preclude the same appellate court from making its final
judgment on the appealed case after a review of the evidence. The
nature of the transaction is the very issue raised in the appeal filed by
the respondents. Execution pending appeal does not bar the
continuance of the appeal on the merits, 45 for the Rules of Court
precisely provides for restitution according to equity in case the
executed judgment is reversed on appeal.46
We find no basis for the CA to order petitioner to pay respondents the
monthly rent of P25,000.00 for the formers possession of the subject
property from October 1993 up to the time the property is surrendered
to respondents. The origin of this petition for review is the petition for
consolidation of ownership filed by petitioner which was granted by the
trial court since it found that the transaction between respondents and
petitioner is a sale. Respondents then filed their appeal with the CA. An
examination of the appellants (respondents) brief filed before the
appellate court merely claimed that they are the ones entitled to the
damages and attorneys fees without mention of any back rentals. In
fact, in the prayer in their brief, respondents merely asked that another
judgment be rendered dismissing the plaintiffs (petitioners) complaint.
Moreover, the appellate court did not make any discussion on the basis
of how it arrived in the amount of P25,000.00 as monthly rental since
the same was only mentioned in the dispositive portion of the decision.
Courts in making an award must point out specific facts which can
serve as basis for measuring whatever compensatory or actual
damages are borne.47
We also disallow the award of attorneys fees as the appellate court
merely stated such award in the dispositive portion without explicitly
stating in the text of the decision the legal reason for such award. In
Consolidated Bank & Trust Corporation (Solidbank) vs. Court of
Appeals,48 we held:
The award of attorneys fees lies within the discretion of the
court and depends upon the circumstances of each case.
However, the discretion of the court to award attorneys fees
under Article 2208 of the Civil Code of the Philippines
demands factual, legal and equitable justification, without

which the award is a conclusion without a premise and


improperly left to speculation and conjecture. It becomes a
violation of the proscription against the imposition of a
penalty on the right to litigate (Universal Shipping Lines Inc.
v. Intermediate Appellate Court, 188 SCRA 170 [1990]). The
reason for the award must be stated in the text of the courts
decision. If it is stated only in the dispositive portion of the
decision, the same shall be disallowed. As to the award of
attorneys fees being an exception rather than the rule, it is
necessary for the court to make findings of fact and law that
would bring the case within the exception and justify the
grant of the award. Refractories Corporation of the
Philippines v. Intermediate Appellate Court, 176 SCRA 539
[1989].
WHEREFORE, the petition is PARTIALLY GRANTED. The decision of
the Court of Appeals is AFFIRMED with MODIFICATION to the effect
that the award of monthly rentals on the subject property and
attorneys fees in favor of respondents is DELETED.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 137359

September 13, 2004

EDWIN N. TRIBIANA, petitioner,


vs.
LOURDES M. TRIBIANA, respondent
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari1 seeks to reverse the Court
of Appeals Resolutions2 dated 2 July 1998 and 18 January
1999 in CA-G.R. SP No. 48049. The Court of Appeals affirmed
the Order3 of the Regional Trial Court, Branch 19, Bacoor,
Cavite ("RTC"), denying petitioner Edwin N. Tribianas
("Edwin") motion to dismiss the petition for habeas corpus filed
against him by respondent Lourdes Tribiana ("Lourdes").
Antecedent Facts
Edwin and Lourdes are husband and wife who have lived
together since 1996 but formalized their union only on 28
October 1997. On 30 April 1998, Lourdes filed a petition for
habeas corpus before the RTC claiming that Edwin left their
conjugal home with their daughter, Khriza Mae Tribiana
("Khriza"). Edwin has since deprived Lourdes of lawful custody
of Khriza who was then only one (1) year and four (4) months
of age. Later, it turned out that Khriza was being held by
Edwins mother, Rosalina Tribiana ("Rosalina"). Edwin moved

to dismiss Lourdes petition on the ground that the petition


failed to allege that earnest efforts at a compromise were made
before its filing as required by Article 151 of the Family Code.
On 20 May 1998, Lourdes filed her opposition to Edwins
motion to dismiss claiming that there were prior efforts at a
compromise, which failed. Lourdes attached to her opposition
a copy of the Certification to File Action from their Barangay
dated 1 May 1998.
On 18 May 1998, the RTC denied Edwins motion to dismiss
and reiterated a previous order requiring Edwin and his mother,
Rosalina to bring Khriza before the RTC. Upon denial of his
motion for reconsideration, Edwin filed with the Court of
Appeals a petition for prohibition and certiorari under Rule 65
of the Rules of Civil Procedure. The appellate court denied
Edwins petition on 2 July 1998. The appellate court also
denied Edwins motion for reconsideration.
Hence, this petition.
The Rulings of the RTC and the Court of Appeals
The RTC denied Edwins motion to dismiss on the ground that
the Certification to File Action attached by Lourdes to her
opposition clearly indicates that the parties attempted to reach
a compromise but failed.
The Court of Appeals upheld the ruling of the RTC and added
that under Section 412 (b) (2) of the Local Government Code,
conciliation proceedings before the barangay are not required
in petitions for habeas corpus.
The Issue
Edwin seeks a reversal and raises the following issue for
resolution:
WHETHER THE TRIAL AND APPELLATE COURTS
SHOULD HAVE DISMISSED THE PETITION FOR
HABEAS CORPUS ON THE GROUND OF FAILURE
TO COMPLY WITH THE CONDITION PRECEDENT
UNDER ARTICLE 151 OF THE FAMILY CODE.
The Ruling of the Court
The petition lacks merit.
Edwin argues that Lourdes failure to indicate in her petition for
habeas corpus that the parties exerted prior efforts to reach a
compromise and that such efforts failed is a ground for the
petitions dismissal under Section 1(j), Rule 16 of the 1997
Rules of Civil Procedure.4 Edwin maintains that under Article
151 of the Family Code, an earnest effort to reach a
compromise is an indispensable condition precedent. Article
151 provides:

No suit between members of the same family shall


prosper unless it should appear from the verified
complaint or petition that earnest efforts toward a
compromise have been made, but that the same have
failed. If it is shown that no such efforts were in fact
made, the case must be dismissed.
This rule shall not apply to cases which may not be the subject
of compromise under the Civil Code.
Edwins arguments do not persuade us.
It is true that the petition for habeas corpus filed by Lourdes
failed to allege that she resorted to compromise proceedings
before filing the petition. However, in her opposition to Edwins
motion to dismiss, Lourdes attached a Barangay Certification
to File Action dated 1 May 1998. Edwin does not dispute the
authenticity of the Barangay Certification and its contents. This
effectively established that the parties tried to compromise but
were unsuccessful in their efforts. However, Edwin would have
the petition dismissed despite the existence of the Barangay
Certification, which he does not even dispute.
Evidently, Lourdes has complied with the condition precedent
under Article 151 of the Family Code. A dismissal under
Section 1(j) of Rule 16 is warranted only if there is a failure to
comply with a condition precedent. Given that the alleged
defect is a mere failure to allege compliance with a condition
precedent, the proper solution is not an outright dismissal of
the action, but an amendment under Section 1 of Rule 10 of
the 1997 Rules of Civil Procedure. 5 It would have been a
different matter if Edwin had asserted that no efforts to arrive at
a compromise have been made at all.
In addition, the failure of a party to comply with a condition
precedent is not a jurisdictional defect. 6 Such defect does not
place the controversy beyond the courts power to resolve. If a
party fails to raise such defect in a motion to dismiss, such
defect is deemed waived.7 Such defect is curable by
amendment as a matter of right without leave of court, if made
before the filing of a responsive pleading. 8 A motion to dismiss
is not a responsive pleading.9 More importantly, an amendment
alleging compliance with a condition precedent is not a
jurisdictional matter. Neither does it alter the cause of action of
a petition for habeas corpus. We have held that in cases where
the defect consists of the failure to state compliance with a
condition precedent, the trial court should order the
amendment of the complaint.10 Courts should be liberal in
allowing amendments to pleadings to avoid multiplicity of suits
and to present the real controversies between the parties.11
Moreover, in a habeas corpus proceeding involving the welfare
and custody of a child of tender age, the paramount concern is
to resolve immediately the issue of who has legal custody of
the child. Technicalities should not stand in the way of giving
such child of tender age full protection. 12 This rule has sound
statutory basis in Article 213 of the Family Code, which states,
"No child under seven years of age shall be separated from the
mother unless the court finds compelling reasons to order

otherwise." In this case, the child (Khriza) was only one year
and four months when taken away from the mother.
The Court of Appeals dismissed Edwins contentions by citing
as an additional ground the exception in Section 412 (b) (2) of
the Local Government Code ("LGC") on barangay conciliation,
which states:
(b) Where the parties may go directly to court. the
parties may go directly to court in the following
instances:
xxx
2) Where a person has otherwise been
deprived of personal liberty calling for
habeas corpus proceedings;
xxx.
Under Rule 102 of the 1997 Rules of Civil Procedure,
a party may resort to a habeas corpus proceeding in
two instances. The first is when any person is
deprived of liberty either through illegal confinement
or through detention. The second instance is when
custody of any person is withheld from the person
entitled to such custody. The most common case
falling under the second instance involves children
who are taken away from a parent by another parent
or by a relative. The case filed by Lourdes falls under
this category.
The barangay conciliation requirement in Section 412 of the
LGC does not apply to habeas corpus proceedings where a
person is "deprived of personal liberty." In such a case, Section
412 expressly authorizes the parties "to go directly to court"
without need of any conciliation proceedings. There is
deprivation of personal liberty warranting a petition for habeas
corpus where the "rightful custody of any person is withheld
from the person entitled thereto."13 Thus, the Court of Appeals
did not err when it dismissed Edwins contentions on the
additional ground that Section 412 exempts petitions for
habeas corpus from the barangay conciliation requirement.
The petition for certiorari filed by Edwin questioning the RTCs
denial of his motion to dismiss merely states a blanket
allegation of "grave abuse of discretion." An order denying a
motion to dismiss is interlocutory and is not a proper subject of
a petition for certiorari.14 Even in the face of an error of
judgment on the part of a judge denying the motion to dismiss,
certiorari will not lie. Certiorari is not a remedy to correct errors
of procedure.15 The proper remedy against an order denying a
motion to dismiss is to file an answer and interpose as
affirmative defenses the objections raised in the motion to
dismiss. It is only in the presence of extraordinary
circumstances evincing a patent disregard of justice and fair
play where resort to a petition for certiorari is proper.16

The litigation of substantive issues must not rest on a


prolonged contest on technicalities. This is precisely what has
happened in this case. The circumstances are devoid of any
hint of the slightest abuse of discretion by the RTC or the Court
of Appeals. A party must not be allowed to delay litigation by
the sheer expediency of filing a petition for certiorari under
Rule 65 based on scant allegations of grave abuse. More
importantly, any matter involving the custody of a child of
tender age deserves immediate resolution to protect the childs
welfare.
WHEREFORE, we DISMISS the instant petition for lack of
merit. We AFFIRM the Resolutions of the Court of Appeals
dated 2 July 1998 and 18 January 1999 in CA-G.R. SP No.
48049. The Regional Trial Court, Branch 19, Bacoor, Cavite is
ordered to act with dispatch in resolving the petition for habeas
corpus pending before it. This decision is IMMEDIATELY
EXECUTORY.
SO ORDERED.

ROSILYN TELIN DELANTAR," praying that the birth certificate


of Rosilyn be canceled and declared null and void for the
reasons that said birth certificate was made an instrument of
the crime of simulation of birth and therefore invalid and
spurious, and it falsified all material entries therein, as follows:
a. The name of her mother which should not be petitioner
Librada A. Telin;
b. The signature of informant referring to Librada T. Delantar
being a forgery;

Republic of the Philippines


SUPREME COURT
SECOND DIVISION
G.R. No. 140305 December 9, 2005
PLATON AND LIBRADA CERUILA, Petitioners,
vs.
ROSILYN DELANTAR, represented by her guardian,
DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT,
Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Petitioners-spouses Platon Ceruila and Librada D. Ceruila
(Ceruilas) filed an action with the Regional Trial Court (RTC) of
Manila, docketed as Spec. Proc. No. 97-818932, for the
annulment and cancellation of the birth certificate of Maria
Rosilyn Telin Delantar (Rosilyn), the child-victim in the rape
case involving Romeo Jaloslos.1 The RTC granted the
Ceruilas petition in its decision dated April 11, 1997 2 which was
nullified, however, by the Court of Appeals (CA) on June 10,
1999.3 The CA denied petitioners motion for reconsideration.4
Hence the present petition.
The antecedents are as follows:
Sometime in 1996, Rosilyn complained against her father,
Simplicio Delantar (Simplicio) for child abuse, particularly
prostitution. Simplicio was incarcerated at the Pasay City Jail
starting August 22, 1996 which prompted the filing of a petition
for involuntary commitment of Rosilyn in favor of the
Department of Social Welfare and Development (DSWD), as
the whereabouts of the mother, Librada Ceruila, was unknown.
The petition was granted by the RTC of Pasay City, Branch 119
on November 9, 1996 and Simplicios motion to vacate said
judgment was denied by said court on January 20, 1997.5
On February 3, 1997, the Ceruilas filed a petition before the
RTC of Manila, entitled "IN THE MATTER OF CANCELLATION
AND ANNULMENT OF THE BIRTH CERTIFICATE OF MARIA

c. The name of Simplicio Delantar as the biological father,


considering that, as already mentioned, he is merely the foster
father and co-guardian in fact of Maria Rosilyn and the name of
the natural father in (sic) unknown;
d. The date of marriage of the supposed parents, since the
parents reflected in said certificate were (sic) actually full blood
brother and sister and therefore marriage between the two is
virtually impossible;
e. The status of Maria Rosilyn as a legitimate child as the
same (sic) is actually not legitimate;
f. The date of actual birth of Marial (sic) Rosilyn, since the
known father merely made it appear that she was born at the
time the informations for the birth certificate were supplied by
him to the civil registrar or (sic) proper recording;
g. The name of the physician who allegedly attended at the
time of birth of Maria Rosilyn, being a fictitious Dr. Santos.6
On February 7, 1997, the RTC issued an Order setting the
case for hearing on March 19, 1997 and directed the
publication of said order once a week for three consecutive
weeks in a newspaper of general circulation. The Order also
stated that any person who is interested in the petition may
interpose his/her comment or opposition thereto on or before
the scheduled hearing.7
Summons was sent to the Civil Register of Manila. 8 However,
no representative appeared during the scheduled hearing.9
On April 11, 1997, the RTC rendered its decision granting the
petition of the Ceruilas as follows:
WHEREFORE, judgment is hereby rendered:
1. DECLARING the certificate of live birth of the Minor Maria
Rosilyn Telin Delantar as registered under the Local Civil
Registry No. 85-27325 of the office of the City Civil Registrar of
Manila as null and void ab initio: and
2. ORDERING the City Civil Registrar of Manila and the
National Statistics Office, Manila, to expunge from their
respective marriage registers the entry of the birth of said
minor and such other documents pertaining thereto, if any.

Let a copy of this Decision be served on the Office of the City


Civil Registrar of Manila and the National Statistics Office for
record purposes.
SO ORDERED.10
The RTC explained in its Decision thus:
During the initial trial, the petition was read aloud in open court
to find out if there is any opposition thereto. There being none,
the petitioners counsel, Atty. Goering G.C. Paderanga, then
established the jurisdictional requirements (Exhibits "A" to
"E").11 Thereafter, petitioner husband Platon Ceruila was
placed on the stand as the lone witness for the petitioner and
after he completed his testimony, Atty. Paderanga formally
offered his evidence and rested his case.
The evidence on record reveals the following:
On May 11, 1985, a child was born at the Dr. Jose Fabella
Memorial Hospital in Sta. Cruz, Manila. The name of the child
was entered in her birth certificate as Maria Rosilyn Telin
Delantar (Exhibit "I"). In the said birth certificate the name of
the childs mother appear as Librada A. Telin (Entry No. 6)
while that of her father as Simplicio R. Delantar (Entry No. 9).
The birth certificate likewise shows that the parents of the
child, Simplicio R. Delantar and Librada A. Telin, were married
on February 14, 1977 in Manila (Entry No. 12). Likewise, in
Entry No. 21 of the same document, it is made to appear that
the mother of the child was 27 years old when the child was
born and that she was attended in her delivery thereof by Dr.
Santos (Entry No. 13). The birth certificate was signed by one
Librada T. delos Santos as the informant and mother of the
child with her given address as 2165 P. Burgos St., Pasay City
(Entry No. 14). This is the very certificate of live birth that is
being seriously impugned by the herein petitioners.
In support of their petition, the petitioners submitted the
baptismal certificates of Simplicio Delantar (Exhibit "J") and
Librada Delantar (Exhibit "K") to prove that they are full blood
brother and sister and could not have been possible for them
to have sired Rosilyn (sic). In the said baptismal certificates,
the names of the parents of Simplicio and Librada are similarly
entered as Juan Delantar and Carila Telen (Exhibit "J-1" and
"K-1"). The Court is inclined to concur with the observation of
the petitioner that it is highly unlikely that the alleged parents of
Rosilyn would commit an incestuous act and proclaim to the
whole world that they are the parents of the herein minor. The
court has also observed that in the baptismal certificate of
Librada Delantar, it is entered therein that she was born on
January 8, 1940 in Tubod, Manglanilla, Cebu (Exhibit "K-2").
Such being the case, then Librada must have been 45 years of
age at the time of the birth of Rosilyn in stark contrast to her
age appearing in Entry No. 27 (sic) of the birth certificate of the
latter which shows that Librada was 27 years old at the time of
her delivery. The presentation of the baptismal certificate of
Librada Delantar as secondary evidence of her birth certificate
was resorted to after the Office of the Local Civil Registrar of
Minglanilla, Cebu gave a certification to the effect that the

records of birth on file with the office for the period January,
1940 to April, 1945 were all destroyed by WORLD WAR II
(Exhibit "L"). And going for the jugular, so to speak, the
signature of the person named Librada T. delos Santos in the
birth certificate (Exhibit "I") purporting to be that of the
petitioner wife and the signature of the latter appearing in the
verification of the petitioner (sic) (Exhibit "A-6") are so strikingly
dissimilar that they could not have but proceeded from two
different hands. For it does not require the trained eye of an
expert calligrapher to discern such discrepancy in the writing
style.
In fine, there being an abundance of evidence to support the
petitioners claim that the birth certificate is indeed a falsified
document, the Court is left with no other alternative but to grant
the relief prayed for in the petition. To let the birth certificate
reamin (sic) as it is would adversely affect the rights and
interests of the herein petitioners.12
On July 15, 1997, Rosilyn, represented by her legal guardian,
the DSWD, filed, with the CA, a petition for the annulment of
judgment in the petition for cancellation of entry of her birth
certificate.13 She claimed that she and her guardian were not
notified of the petition and the subsequent judgment and
learned about the same only from the news on May 16, 1997. 14
She argued that the RTC decision was issued without
jurisdiction and in violation of her right to due process; that the
Judge did not have authority to declare her to be illegitimate;
and that mere correction of entries, not cancellation of the
entire certificate, is the appropriate remedy.15
Rosilyn further argued that: granting, without admitting that
Librada is not her mother, still it was erroneous to cancel or
annul her entire birth certificate; Librada is not an interested
party concerning the issue of whether Simplicio is the father,
the date of actual birth, and the name of the physician who
attended to the birth;16 Libradas allegations are also
contradicted by (a) the "Records Based on Cord Dressing
Room Book dated April 13-May 29, 1985," issued by
Emelita H. Avinante, Head of the Medical Records Section and
Admitting Unit of the Fabella Hospital, which is attached to the
petition for annulment as Annex "E" and which states that
Maria Rosilyn Delantar was born on May 11, 1985 at the
Fabella Hospital and that her parents are Librada Telin and
Simplicio Delantar;17 and (b) the admission of Simplicio in his
Motion to Vacate Judgment18 in Sp. Proc. No. 96-41919
regarding the custody of Rosilyn, which is attached to the
petition to annul as Annex "F," where he stated that he, as the
rightful parent of Rosilyn, should not be deprived of his
parental authority.20
On June 10, 1999, the CA rendered the herein assailed
decision, the dispositive portion of which reads:
WHEREFORE, premises considered, the instant Petition is
GRANTED.

Judgment is hereby rendered DECLARING NULL and VOID


the decision of the respondent Regional Trial Court dated April
11, 1997 in Special Proceedings No. 97-81893.

said decision dated April 11, 1997 is considered null and void
for lack of due process there being no adversarial proceedings
(was) conducted by the public respondent Regional Trial Court.

With costs against private respondents.

SO ORDERED.21

And, even if the same judgment had already become final and
executory, and had in fact been executed, as in the instant
case, still the execution thereof produces no legal effects. 22

The CA reasoned that:


As shown in the caption of the petition in Special Proceedings
No. 97-81893 entitled "In the Matter of Cancellation and
Annulment of the Birth Certificate of Maria Rosilyn Telin
Delantar", herein petitioner Rosilyn Delantar represented by
her legal guardian, DSWD, was not made a party-respondent
therein,contrary to the mandatory provision of Section 3 of
Rule 108 of the Rules of Court
In the said Special Proceeding No. 97-81893, petitioners
therein, Platon Ceruila and Librada D. Ceruila, sought not only
a cancellation or correction of an entry in the birth certificate of
Rosilyn Telin Delantar but in effect sought to annul, cancel or
expunge from the Civil Register the subject birth certificate.
With more reasons, therefore, that all parties, particularly
Rosilyn Telin Delantar, or thru her legal guardian, the DSWD,
whose birth certificate was sought to be annulled or cancelled
from the Civil Register must not only be notified but must be
made a party in the said petition.

Petitioner and her guardian are undoubtedly persons who have


interest which would be affected by the petition for the obvious
reason that it is the entry of her birth which is being sought to
be annulled and cancelled.

In a similar case, the Supreme Court ruled that corrections of


substantial entries in the certificate other than mere clerical
errors, should be passed upon in an appropriate adversary
proceedings with all the persons interested are made parties
therein Republic vs. Valencia (141 SCRA 462; 468-469; 470474).
The proceedings undertaken in said Special Proceedings No.
97-81893 is indeed wanting of the required notice to all the
parties having claim or interest which would be affected
thereby, and of the adversarial proceedings, as disclosed in the
decision dated April 11, 1997

With the foregoing disquisitions, We find that the decision


dated April 11, 1997 null and void for want of jurisdiction over
the person of herein petitioner Rosilyn Delantar and the DSWD
as her legal guardian and all persons who have or claim any
interest which would be affected by the said decision. Also, the

The CA denied the motion for reconsideration of petitioners. 23


Hence, the present petition raising the following issues:
I
WHETHER OR NOT THE COURT OF APPEALS ERRED AND
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OF JURISDICTION IN DECLARING NULL AND
VOID THE DECISION RENDERED BY THE REGIONAL
TRIAL COURT OF MANILA BRANCH 38 DATED APRIL 11,
1997 IN SPEC. PROCEEDING NO. 97-81893 ENTITLED: IN
THE MATTER OF CANCELLATION AND ANNULMENT OF
THE BIRTH CERTIFICATE OF MARIA ROSILYN TELIN
DELANTAR
II
WHETHER OR NOT THE HONORABLE COURT OF
APPEALS SHOULD HAVE EXERCISED ITS PEREMPTORY
POWER TO DECLARE THE SUBJECT BIRTH CERTIFICATE
NULL AND VOID AB INITIO.24
As to the first issue, petitioners argue that: since the
falsification of the entries in the birth certificate of Rosilyn
renders the same void ab initio, the case should be liberally
construed as an ordinary civil action for declaration of nullity of
falsified documents based on Article 5 of the Civil Code25 and
Section 15, Rule 6 of the Rules of Court 26 and not as a special
proceeding; petitioners were only constrained to utilize the
provisions of Rule 108 of the Rules of Court on the
Cancellation or Correction of Entries in the Civil Registry since
Article 5 of the Civil Code provides no procedure for the
nullification of void documents which happens to be a birth
certificate in this case; since the present case involves an
ordinary civil action, the cases relied upon by the CA which are
applicable only to special proceedings should not be applied
herein; the civil registrar, which is an indispensable party, was
duly served summons by mail; respondent, meanwhile, is not
an indispensable party and granting that she is, she was
deemed duly impleaded as her name was clearly stated in the
caption of the case; respondents location could not be
determined as she was reported to have ran away from the
custody of Simplicio, thus the publication of the petition and the
order of the RTC setting the case for hearing once a week for
three consecutive weeks in a newspaper of general circulation
should be considered substantial notice and the requirements
of due process deemed substantially complied with; there was
no adversarial proceeding in court because the parties were

declared in general default thus, just like an ordinary civil case,


the court should receive evidence ex parte.27
As to the second issue, petitioners claim that: the CA should
have exercised its peremptory power to declare the birth
certificate of Rosilyn as null and void ab initio following the
doctrine that where an instrument is void ab initio for being
contrary to law, no amount of technicalities could correct its
inherent nullity; otherwise, there will be multiplicity of actions as
the parties will have to file cases anew to annul respondents
birth certificate.28
They then pray that the CA decision dated June 10, 1999 be
reversed and that the RTC judgment dated April 11, 1997 be
reinstated.29
Anent the first issue, the Solicitor General, for the respondent,
contends that: since the petitioners chose to file a petition
under Rule 108 they cannot in the present action turn around
and claim that their case is not a special proceeding; in any
case, due process was not complied with rendering the
proceedings a quo annullable; petitioners sought to establish
Librada Ceruilas status, i.e., whether or not she is the mother
of respondent, thus, the action falls within the ambit of Sec.
3(c), Rule 1 of the Rules of Court; 30 petitioners did not allege
that they are bringing the suit to enforce or protect their right or
to prevent or redress a wrong, for their case to be categorized
as an ordinary civil action; Art. 5 of the Civil Code which is
being invoked by petitioners is a general provision, while
entries of record of birth in the civil register are governed by
Republic Act No. 3753 (Civil Registry Law) as amended, and
Presidential Decree No. 651; since the law provides for a
remedy when an entry in a record found in the civil registry is
erroneous or falsified, petitioners cannot, by their mere
allegation, transport their case from the realm of the rules on
special proceedings for the correction of entry to that of an
ordinary civil case for annulment of a falsified document; in
Republic vs. Valencia,31 it was held that the parties who must
be made parties to a proceeding concerning the cancellation or
correction of an entry in the civil register are the civil registrar
and all persons who have or who are claiming interests who
would be affected thereby; respondent, being a person whose
interests would be adversely affected by the petition, is an
indispensable party to the case; publication cannot be
substituted for notice; respondent cannot be declared in default
since she was not properly notified.32
Anent the second issue, respondent contends that the CA has
no authority to rule on the merits of the case since in a petition
for annulment of judgment on the ground of lack of jurisdiction,
its authority is limited to ruling on whether or not the petitioner
was denied due process of law; that if the CA were to rule on
the merits of the case, it would have deprived respondent of
due process; and that in any case, respondents record of birth
is not void as Librada was only able to prove that she is not the
mother of respondent.33
Preliminarily, this Court notes that while the petition states that
it is one for review on certiorari, it claimed at the same time

that the CA committed grave abuse of discretion amounting to


lack of jurisdiction, which is properly a ground for a petition for
certiorari under Rule 65 and not for a petition for review on
certiorari under Rule 45. Considering however the substance
of the issues raised herein, we shall treat the present petition,
as it claims, to be a petition for review on certiorari.34
Is the petition for annulment and cancellation of the birth
certificate of Rosilyn an ordinary civil action or a special
proceeding? Considering that the petition, based on its
allegations, does not question the fact of birth of Rosilyn, all
matters assailing the truthfulness of any entry in the birth
certificate properly, including the date of birth, fall under Rule
108 of the Rules of Court which governs cancellation or
correction of entries in the Civil Registry. Thus, the petition filed
by the Ceruilas, alleging material entries in the certificate as
having been falsified, is properly considered as a special
proceeding pursuant to Section 3(c), Rule 1 and Rule 108 of
the Rules of Court.
Did the Ceruilas comply with the requirements of Rule 108?
We answer in the negative.
Sec. 3, Rule 108 of the Rules of Court, expressly states that:
SEC. 3. Parties. --- When cancellation or correction of an entry
in the civil register is sought, the civil registrar and all persons
who have or claim any interest which would be affected
thereby shall be made parties to the proceeding.
Indeed, not only the civil registrar but also all persons who
have or claim any interest which would be affected by a
proceeding concerning the cancellation or correction of an
entry in the civil register must be made parties thereto.35 As
enunciated in Republic vs. Benemerito,36 unless all possible
indispensable parties were duly notified of the proceedings, the
same shall be considered as falling much too short of the
requirements of the rules.37
Here, it is clear that no party could be more interested in the
cancellation of Rosilyns birth certificate than Rosilyn herself.
Her filiation, legitimacy, and date of birth are at stake.
Petitioners claim that even though Rosilyn was never made a
party to the proceeding, it is enough that her name was
included in the caption of the petition. Such reasoning is
without merit.
As we pronounced in Labayo-Rowe vs. Republic38 where the
mother sought changes in the entries of her two childrens birth
certificates:
since only the Office of the Solicitor General was notified
through the Office of the Provincial Fiscal, representing the
Republic of the Philippines as the only respondent, the
proceedings taken, which is summary in nature, is short of
what is required in cases where substantial alterations are
sought. Aside from the Office of the Solicitor General, all
other indispensable parties should have been made

respondents. They include not only the declared father of


the child but the child as well, together with the paternal
grandparents, if any, as their hereditary rights would be
adversely affected thereby. All other persons who may be
affected by the change should be notified or
represented . . ..39 (Emphasis supplied)
In the present case, only the Civil Registrar of Manila was
served summons, who, however, did not participate in the
proceedings. This alone is clearly not sufficient to comply with
the requirements laid down by the rules.
Petitioners further claim that the lack of summons on Rosilyn
was cured by the publication of the order of the trial court
setting the case for hearing for three consecutive weeks in a
newspaper of general circulation.
We do not agree. Summons must still be served, not for the
purpose of vesting the courts with jurisdiction, but to comply
with the requirements of fair play and due process.40 This is but
proper, to afford the person concerned the opportunity to
protect her interest if she so chooses.
Indeed, there were instances when we ruled that even though
an interested party was not impleaded in the petition, such
defect was cured by compliance with Sec. 4, Rule 108 on
publication. In said cases, however, earnest efforts were made
by the petitioners in bringing to court all possible interested
parties.41
Such is not the case at bar. Rosilyn was never made a party at
all to the proceedings seeking the cancellation of her birth
certificate. Neither did petitioners make any effort to summon
the Solicitor General.
It does not take much to deduce the real motive of petitioners
in seeking the cancellation of Rosilyns birth certificate and in
not making her, her guardian, the DSWD, and the Republic of
the Philippines, through the Solicitor General, parties to the
petition. Rosilyn was involved in the rape case against Romeo
Jalosjos, where her father, as appearing in the birth certificate,
was said to have pimped her into prostitution. In the criminal
case, the defense contended that the birth certificate of Rosilyn
should not have been considered by the trial court to prove
Rosilyns age and thus find basis for statutory rape, as said
birth certificate has been cancelled by the RTC of Manila,
Branch 38, in the special proceeding antecedent to this
petition. Their efforts in this regard, however, were thwarted
when the CA overturned Branch 38s decision, and the Court,
in G.R. Nos. 132875-7642 considered other evidence as proof
of Rosilyns age at the time of the commission of the crime.
There is also no merit in the contention of petitioners that
because of the false entries in the birth certificate of Rosilyn,
the same is void ab initio, hence should be nullified under Art. 5
of the Civil Code, or should be nullified by the CA in exercise of
its peremptory power to declare null and void the said
certificate.

The function of a petition for annulment of judgment, under


Rule 47 of the Rules of Court, is not to replace the trial courts
decision sought to be annulled. The action under Sections 1, 2
and 7 of said Rule, to wit:
Section. 1. Coverage. --- This Rule shall govern the annulment
by the Court of Appeals of judgments or final orders and
resolutions in civil actions of Regional Trial Courts for which the
ordinary remedies of new trial, appeal, petition for relief or
other appropriate remedies are no longer available through no
fault of the petitioner.
Sec. 2. Grounds for annulment. --- The annulment may be
based only on the grounds of extrinsic fraud and lack of
jurisdiction.
Extrinsic fraud shall not be a valid ground if it was availed of, or
could have been availed of, in a motion for new trial or petition
for relief.
Sec. 7. Effect of judgment. --- A judgment of annulment shall
set aside the questioned judgment or final order or resolution
and render the same null and void, without prejudice to the
original action being refiled in the proper court. However,
where the judgment or final order or resolution is set aside on
the ground of extrinsic fraud, the court may on motion order the
trial court to try the case as if a timely motion for new trial had
been granted therein.
is merely for the annulment of the RTC Decision on grounds of
extrinsic fraud and lack of jurisdiction, nothing more. The Rules
do not allow the CA to resolve the merits of the petition for the
amendment and cancellation of the birth certificate of Rosilyn
or to substitute its own findings thereon.
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.

and appointed private respondent as co-administrator of the


estate. Petitioners motion for reconsideration was denied.
Petitioner then moved that private respondent bring into the estate
properties belonging to the deceased, which motion was granted
by the trial court. Not satisfied with the compliance of private
respondent, petitioner reiterated his motion for removal of the
former as co-administrator, but the same was denied.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 167979

The trial court found that private respondent substantially complied


with the order directing him to bring into the estate properties
owned by or registered in the name of the deceased not subject of
any adverse claim or controversy when he listed the alleged
properties suspected to be concealed, embezzled or conveyed
away by the persons named therein. Thus, it found no cogent
reason to remove private respondent as co-administrator.7

March 15, 2006

WILSON S. UY, as Judicial Administrator of the Intestate


Estate of the Deceased JOSE K. C. UY, Petitioner,
vs.
THE HON. COURT OF APPEALS, HON. ANASTACIO C.
RUFON, As Presiding Judge of Branch 52, of the Regional
Trial Court, Sixth Judicial Region, sitting at Bacolod City, and
JOHNNY K. H. UY, Respondents.
DECISION
YNARES-SANTIAGO, J.:
Petitioner assails the August 20, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 72678, 1 affirming the January 22, 2002
Order of the Regional Trial Court, Branch 52 of Bacolod City in
Special Proceedings No. 97-241,2 as well as the April 29, 2005
Resolution denying the motion for reconsideration. 3
The facts of the case show that Jose K.C. Uy (Deceased) died
intestate on August 20, 1996 and is survived by his spouse, Sy Iok
Ing Uy, and his five children, namely, Lilian S. Uy, Lilly S. Uy, Livian
S. Uy-Garcia , Lilen S. Uy and Wilson S. Uy (Petitioner).
On February 18, 1997, Special Proceedings No. 97-241 was
instituted and Lilia Hofilea was appointed as special administrator
of the estate of the deceased. Petitioner moved to reconsider the
order appointing Lilia Hofilea as special administrator with prayer
that letters of administration be issued to him instead. 4
On June 9, 1998, Judge Ramon B. Posadas revoked Lilia
Hofileas appointment as special administrator and denied her
petition to be appointed as regular administrator. Meanwhile,
letters of administration were granted to petitioner, who took his
oath of office as administrator on June 23, 1998.
On February 17, 1999, Johnny K. H. Uy (Private Respondent) filed
a motion to intervene, praying that he be appointed as
administrator of the estate in lieu of petitioner. He alleged that he is
the brother and a creditor of the deceased, and has knowledge of
the properties that should be included in the estate.
The trial court initially denied private respondents motion to
intervene,5 but on March 16, 2000, 6 it reconsidered its earlier order

Thereafter, petitioner appealed to the Court of Appeals by way of a


petition for certiorari which however, dismissed the petition.
The Court of Appeals held that the refusal of the trial court to
remove private respondent as co-administrator of the estate is
neither an error of jurisdiction nor a grave abuse of discretion; that
the appointment of private respondent was justified; that the order
of preference under Section 6 of Rule 78 of the Rules of Court
does not rule out the appointment of co-administrators; that the
institution of a case for annulment of title and reconveyance
against respondent does not justify private respondents removal
as co-administrator.
Petitioners motion for reconsideration was denied, hence, this
petition on the following grounds:
WHETHER OR NOT THE COURT OF APPEALS AND THE
RESPONDENT REGIONAL TRIAL COURT HAVE ACTED
WITHOUT JURISDICTION OR IN GRAVE ABUSE OF THEIR
DISCRETION TANTAMOUNT TO LACK OF JURISDICTION (sic),
IN VIOLATION [OF] THE ESTABLISHED AND ACCEPTED RULE
OF LAW AND IN COMPLETE DISREGARD OF SUBSTANTIAL
JUSTICE AND EQUITY IN APPOINTING A CO-ADMINISTRATOR
OF AN ESTATE (IN THE PROCESS OF SETTLEMENT) WHERE
THERE IS AN INCUMBENT ADMINISTRATOR WHOSE
APPOINTMENT IS FIRM, FINAL, IMPLEMENTED AND
INAPPEALABLE, AND WHICH (sic) APPOINTMENT HAS NOT
BEEN CANCELLED, RECALLED, REVOKED OR RESCINDED
BY APPOINTING, AT THAT, A PERSON
(a)
ALIEN TO THE ESTATE OF THE DECEASED, WITH VARIOUS
SERIOUS INTERESTS (ACTUAL JUDICIAL CONTROVERSIES)
IN CONFLICT WITH THOSE OF THE ESTATE, AND
(B)
WITH NO PROPER INTEREST IN THE ESTATE AND WHO IS
PERSONALLY
UNFIT,
UNSUITABLE,
UNWORTHY,
UNDESERVING OF THE TRUST INHERENT IN THE POSITION
OF
CO-ADMINISTRATOR
OF
THE
ESTATE,
AND
UNACCEPTABLE AND REPULSIVE TO THE FAMILY OF THE
LEGAL HEIRS OF THE DECEASED; AND THEN REFUSING TO

REMOVE HIM AS CO-ADMINISTRATOR AFTER IT WAS SHOWN


THAT HIS REPRESENTATIONS ON WHICH HE WAS
APPOINTED CO-ADMINISTRATOR WERE EMPTY AND FALSE;
AND

SEC. 6. When and to whom letters of administration granted. If


no executor is named in the will, or the executor or executors are
incompetent, refuse the trust, or fail to give bond, or a person dies
intestate, administration shall be granted:

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS


DENIED PETITIONER HIS CONSTITUTIONAL RIGHTS TO DUE
PROCESS OF LAW AND HIS RIGHT TO PETITION THE
GOVERNMENT FOR REDRESS OF GRIEVANCES BY NOT
ADDRESSING AND RESOLVING THE ISSUES BROUGHT TO IT
BY THE PETITIONER, MORE ESPECIFICALLY THE ISSUES OF

(a) To the surviving husband or wife, as the case may be,


or next of kin, or both, in the discretion of the court, or to
such person as such surviving husband or wife, or next
of kin, requests to have appointed, if competent and
willing to serve;

(1)
RES JUDICATA AND STABILITY OF THE JUDGMENT
APPOINTING THE PETITIONER HEREIN AS JUDICIAL
ADMINISTRATOR OF THE ESTATE IN QUESTION,
AND
(2)
DECIDING THE ISSUES INVOLVED IN A MANNER
CONTRARY TO THE RULES SET DOWN BY THE
SUPREME COURT ON THE MATTER.8
The main issues for resolution are: (1) whether the trial court acted
with grave abuse of discretion in appointing private respondent as
co-administrator to the estate of the deceased; and (2) whether the
Court of Appeals deprived petitioner of his constitutional right to
due process and his right to petition the government for redress of
grievances by not addressing the issues raised before it.
The petition is without merit.
Petitioner asserts that his appointment as a regular administrator is
already final, unassailable or res judicata; that the inferior court
has no authority to re-open the issue of the appointment of an
administrator without removing the incumbent administrator; that
private respondent is not only alien to the estate, but has a conflict
of interest with it; that the trial courts appointment of private
respondent as co-administrator constitutes grave abuse of
discretion tantamount to lack of jurisdiction.
There is no question that petitioner was appointed as regular
administrator of the estate of the deceased Jose K. C. Uy on June
9, 1998. However, private respondent in his motion to intervene
sought to be appointed as administrator as he is not only the
brother of the decedent but also a creditor who knows the extent of
the latters properties. Thus, the trial court, while retaining
petitioner as administrator, appointed private respondent as coadministrator of the estate.
The main function of a probate court is to settle and liquidate the
estates of deceased persons either summarily or through the
process of administration.9 In the case at bar, the trial court
granted letters of administration to petitioner and thereafter to
private respondent as co-administrator. Under Section 6, Rule 78
of the Rules of Court, the preference to whom letters of
administration may be granted are as follows:

(b) If such surviving husband or wife, as the case may


be, or next of kin, or the person selected by them, be
incompetent or unwilling, or if the husband or widow, or
next of kin, neglects for thirty (30) days after the death of
the person to apply for administration or to request that
administration be granted to some other person, it may
be granted to one or more of the principal creditors, if
competent and willing to serve;
(c) If there is no such creditor competent and willing to
serve, it may be granted to such other person as the
court may select.
The order of preference in the appointment of an administrator
depends on the attendant facts and circumstances. 10 In Sioca v.
Garcia,11 this Court set aside the order of preference, to wit:
It is well settled that a probate court cannot arbitrarily and without
sufficient reason disregard the preferential rights of the surviving
spouse to the administration of the estate of the deceased spouse.
But, if the person enjoying such preferential rights is
unsuitable, the court may appoint another person. The
determination of a persons suitability for the office of administrator
rests, to a great extent, in the sound judgment of the court
exercising the power of appointment and such judgment will not be
interfered with on appeal unless it appears affirmatively that the
court below was in error.
x x x Unsuitableness may consist in adverse interest of some
kind or hostility to those immediately interested in the estate.
x x x.12 (Emphasis supplied, citations omitted)
In the instant case, the order of preference was not disregarded by
the trial court. Instead of removing petitioner, it appointed private
respondent, a creditor, as co-administrator since the estate was
sizeable and petitioner was having a difficult time attending to it
alone. In fact, petitioner did not submit any report regarding the
estate under his administration. In its March 16, 2000 Order,13 the
trial court found thus:
Going over all the arguments of the parties, after hearing has been
set relative thereto, this Court has observed that indeed the judicial
administrator had not submitted to the Court any report about the
Estate under his administration except those involving the cases
he filed and/or intervened in other branches. This may be due to
his being inexperienced, but this fact will not be reason enough to
remove him from the administration of the Estate as Judicial
Administrator thereof. However, considering that the Intervenor is
claiming to be the patriarch of the Uy family and who claims to
have enormous knowledge of the businesses and properties of the
decedent Jose K.C. Uy, it is the feeling of this Court that it will be

very beneficial to the Estate if he be appointed co-administrator


(without removing the already appointed Judicial Administrator) of
the Estate of Jose K.C. Uy, if only to shed more light to the alleged
enormous properties/businesses and to bring them all to the
decedents Estate pending before this Court.14
A co-administrator performs all the functions and duties and
exercises all the powers of a regular administrator, only that he is
not alone in the administration.15 The practice of appointing coadministrators in estate proceedings is not prohibited. In Gabriel v.
Court of Appeals,16 this Court reaffirmed that jurisprudence allows
the appointment of co-administrators under certain circumstances,
to wit:
Under both Philippine and American jurisprudence, the
appointment of co-administrators has been upheld for various
reasons, viz: (1) to have the benefit of their judgment and perhaps
at all times to have different interests represented; (2) where
justice and equity demand that opposing parties or factions be
represented in the management of the estate of the deceased; (3)
where the estate is large or, from any cause, an intricate and
perplexing one to settle; (4) to have all interested persons
satisfied and the representatives to work in harmony for the best
interests of the estate; and (5) when a person entitled to the
administration of an estate desires to have another competent
person associated with him in the office.17 (Emphasis supplied)
Thus, petitioners argument that the trial court cannot re-open the
issue of the appointment of an administrator without removing the
incumbent administrator is erroneous. In probate proceedings,
considerable latitude is allowed a probate court in modifying or
revoking its own orders as long as the proceedings are pending in
the same court and timely applications or motions for such
modifications or revocations are made by the interested parties. 18
In the instant case, the estate of the deceased has not yet been
settled and the case is still within the jurisdiction of the court.
The foregoing discussion renders moot the second issue raised by
petitioner. We see no cogent reason to set aside the findings of the
Court of Appeals, because its findings of fact is conclusive and
binding on the parties and not subject to review by this Court,
unless the case falls under any of the exceptions to the rule. 19
WHEREFORE, the petition is DENIED. The August 20, 2004
Decision of the Court of Appeals in CA-G.R. SP No. 72678
affirming the January 22, 2002 Order of the Regional Trial Court in
Special Proceedings No. 97-241, as well as the April 29, 2005
Resolution denying the motion for reconsideration are
AFFIRMED.1avvphil.net
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 147270

August 15, 2001

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS


OF PETE C. LAGRAN, PETE C. LAGRAN, petitioner.
PUNO,J.:
On April 18, 1994, petitioner Pete C. Lagran was convicted by
the Regional Trial Court of Quezon City of three (3) counts of
violation of Batas Pambansa (BP) Blg. 22. He was sentenced
to suffer imprisonment of one (1) year for each count and to
pay a fine of P125,000.00, with subsidiary imprisonment in
case of insolvency.1 He appealed the decision of the trial court
to the Court of Appeals but the appeal was dismissed on July
11, 1997 for failure to file appellant's brief. The decision
became final and executory on August 6, 1997 and entry of
judgment was made on March 5, 1998.2
By virtue of a Commitment Order issued by Hon. Elsa I. De
Guzman, Presiding Judge, Regional Trial Court of Quezon
City, Branch 93, petitioner was committed to the Quezon City
Jail on February 24, 1999.3 On April 3, 1999, he was
transferred to the New Bilibid Prison 4 where he has been
serving his sentence until the present.
Petitioner filed the instant petition for habeas corpus on March
19, 2001. He prayed for his immediate release as he had
allegedly completed the service of his sentence. Citing Article
70 of the Revised Penal Code, he argued that if the penalties
or sentences imposed on the accused are identical, and such
penalties or sentences emanated from one court and one
complaint, the accused shall serve them simultaneously. He
stated that he has been incarcerated for two (2) years and four
(4) days, counted from February 28, 2001, thus, his detention
in the New Bilibid Prison is now without legal basis.
Petitioner's argument deserves scant consideration.
Section 70 of the Revised Penal Code provides:

"ARTICLE 70. Successive service of sentences.


When the culprit has to serve two or more penalties,
he shall serve them simultaneously if the nature of the
penalties will so permit; otherwise, the following rules
shall be observed:
In the imposition of the penalties, the order of their
respective severity shall be followed so that they may
be executed successively or as nearly as may be
possible, should a pardon have been granted as to
the penalty or penalties first imposed, or should they
have been served out.
For the purpose of applying the provisions of the next
preceding paragraph the respective severity of the
penalties shall be determined in accordance with the
following scale:
1. Death,
2. Reclusion perpetua,
3. Reclusion temporal,
4. Prision mayor,
5. Prision correccional,
6. Arresto mayor,
7. Arresto menor,
8. Destierro,
9. Perpetual absolute disqualification,
10. Temporary absolute disqualification,
11. Suspension from public office, the right to
vote and be voted for, the right to follow
profession or calling, and
12. Public censure.

Notwithstanding the provisions of the rule next


preceding, the maximum duration of the convict's
sentence shall not be more than threefold the length
of time corresponding to the most severe of the
penalties imposed upon him. No other penalty to
which he may be liable shall be inflicted after the sum
total of those imposed equals the same maximum
period.
Such maximum period shall in no case exceed forty
years.
In applying the provisions of this rule the duration of
perpetual penalties (penal perpetua) shall be
computed at thirty years."
Article 70 of the Revised Penal Code allows simultaneous
service of two or more penaltiesonly if the nature of the
penalties so permit.5 The penalties that can be simultaneously
served are: (1) perpetual absolute disqualification, (2)
perpetual special disqualification, (3) temporary absolute
disqualification, (4) temporary special disqualification, (5)
suspension, (6)destierro, (7) public censure, (8) fine and bond
to keep the peace, (9) civil interdiction, and (10) confiscation
and payment of costs. These penalties, exceptdestierro, can
be served simultaneously with imprisonment. The penalties
consisting in deprivation of liberty cannot be served
simultaneously by reason of the nature of such penalties. 6
Where the accused is sentenced to two or more terms of
imprisonment, the terms should be served successively.7
In the case at bar, petitioner was sentenced to suffer one year
imprisonment for every count of the offense committed. The
nature of the sentence does not allow petitioner to serve all the
prison terms simultaneously. Applying the rule on successive
service of sentence, we find that petitioner has not yet
completed the service of his sentence as he commenced
serving his sentence only on February 24, 1999. His prayer,
therefore, for the issuance of a writ ofhabeas corpushas no
basis.
IN VIEW WHEREOF, the petition is DISMISSED.
SO ORDERED.