You are on page 1of 102

Page 1 of 102

LABRADOR NOTES

Contents
Reynaldo P. Bascara v. Javier and Pangilinan G.R. No. 188069, June 17, 2015 ............................................................. 1
Andy Ang vs. Severino Pacunio G.R. No. 208928 July 8, 2015 ................................................................................... 5
Morales v. Olondriz, 783 SCRA 151 .................................................................................................................... 7
Heirs of Jose Ma. Gepuela v. Meez-Andres, 780 SCRA 348 .................................................................................. 10
Arado v. Alcoran, 762 SCRA 37 ....................................................................................................................... 17
Planters Development Bank v. Lopez, G.R. No. 186332, October 23, 2013 .............................................................. 23
Palaganas v. Palaganas, G.R. No. 169144, January 26, 2011 ................................................................................ 29
Mendoza v. Delos Santos, G.R. No. 176422, March 20, 2013 ................................................................................ 32
Lopez v. Lopez, G.R. No. 189984, Nov. 12, 2012 ................................................................................................ 37
Heirs of Policarpio M. Ureta, Sr. v. Heirs of Liberato M. Ureta, G.R. No. 165748, Sep. 14, 2011 ................................... 39
Echavez v. Dozen Construction and Development Corp., G.R. No. 192916, Oct. 11, 2010 ............................................ 61
Del Rosario v. Ferrer, G.R. No. 187056, Sep. 20, 2010 .......................................................................................... 63
Orendain, Jr. v. Trusteeship of the Estate of Dona Margarita Rodriguez, G.R. No. 168660, June 30, 2009 ....................... 66
Lee v. Tambago, A.C. No. 5281, Feb. 12, 2008 ..................................................................................................... 72
Samaniego-Celada v. Abena, G.R. No. 145545, June 30, 2008 ................................................................................ 78
PCIB vs. Escolin, G.R. Nos. L-27860 and L-27896, March 29, 1974 (DIGEST nani siya) ................................................ 87
Rabadilla vs. CA, G.R. No. 113725, June 29, 2000 ................................................................................................ 92
Jaboneta vs. Gustilo, G.R. No. 1641, January 19, 1906 ......................................................................................... 97
Anselma Diaz vs. IAC and Felisa Jardin, G.R. No. L-66574, February 21, 1990 ........................................................... 99

Reynaldo P. Bascara v. Javier and Pangilinan G.R. No. 188069, June 17, 2015

G.R. No. 188069 June 17, 2015

REYNALDO P. BASCARA, Petitioner,


vs.
SHERIFF ROLANDO G. JAVIER and EVANGELINE PANGILINAN, Respondents.

DECISION

PERALTA, J.:

This petition for review on certiorari under Rule 45 of the 1997 Revised Rules on Civil Procedure (Rules) seeks
to reverse and set aside the March 4, 2009 Decision1 and May 29, 2009 Resolution2 of the Court of Appeals
(CA) in CA-G.R. SP No. 103194, which affirmed the Orders dated January 17, 20083 and April 3, 2008,4 of
the Regional Trial Court (RTC), Branch 111, Pasay City, in LRC Case No. 06-0036-CFM, denying petitioner's
motion to recall the writ of possession and directing respondent sheriff to implement the writ.

The facts are as follows:

On August 1, 2006, respondent Evangeline C. Pangilinan (Pangilinan) filed an ex parte petition for the
issuance of a writ of possession. The case, docketed as LRC Case No. 06-0036-CFM, was raffled before
Regional Trial Court, Branch111, Pasay City. Essentially, the petition alleged that, on August 13,2004,
Rosalina P. Pardo (Pardo) executed in favor of Pangilinan a real estate mortgage (REM) over a parcel of land
covered by Transfer Certificate of Title (TCT) No. 135066 as a security for the payment of a loan in the
amount of 200,000.00; that Pardo failed to comply with the terms and conditions of the promissory note with
REM; that upon compliance with the statutory requirements, the mortgaged property was sold at public
auction to Pangilinan as the highest bidder; that the one-year redemption period already elapsed without
Pardo exercising the right to redeem the subject property; that the title over the lot was consolidated and
transferred in the name of Pangilinan as evidenced by TCT No. 147777; and, that Pardo, her agents, and
persons claiming rights under her failed and refused to vacate the subject premises despite several
demands.5

On January 31, 2007, the trial court granted the petition.6 The Notice to Vacate and Surrender Possession was
issued by respondent Sheriff Rolando G. Javier (Javier) on April 15 2007 pursuant to the writ of possession
issued by the court on March 26, 2007.7

COMPILED BY: Jo-Al Y. Gealon


Page 2 of 102
LABRADOR NOTES

Claiming as the true, lawful and absolute owner of the subject property that is in his possession, petitioner
filed an Affidavit of Third-Party Claim8 and a Motion to Recall Writ of Possession9 on April 23, 2007. The
motion alleged as follows:

xxxx

3. On August 1, 2006, or prior to the filing of the above-entitled Petition for Writ of Possession, [Pangilinan]
filed with the Regional Trial Court of Pasay City, Branch 108, a Petition for Cancellation of Adverse Claim which
annotation was carried over to her title, Transfer Certificate of Title (TCT) No. 147777, from the previous title,
TCT No. 135066, in the name of Third-Party Claimants aunt and benefactor, the late ROSALINA P. PARDO x x
x;

4. In response to the said Petition for Cancellation of Adverse Claim, Third-Party Claimant filed an Opposition
and Motion to Dismiss x x x;

5. The said Opposition and Motion to Dismiss x x x states the following:

(a) [Third-Party Claimant] is the nephew and ward of the late ROSALINA P. PARDO x x x, who owned a certain
parcel of land, with improvements thereon x x x as evidenced by Transfer Certificate of Title (TCT) No. 135066
of the Registry of Deeds of Pasay City x x x;

(b) During her lifetime, or on May 15, 1999, PARDO executed a duly notarized deed of DONATION MORTIS
CAUSA donating the Subject Property to and in favor of Third-Party Claimant x x x;

(c) Four years later, or on May 20, 2003, PARDO, a widow, age 78, died intestate, and without issue x x x;

(d) PARDO having passed away intestate and without issue and by virtue of the DONATION MORTIS CAUSA,
Third-Party Claimant became the owner of the Subject Property. He and his family have since taken
possession thereof and are residing there up to now;

(e) To supplement what little and highly irregular, if totally unreliable, income he gets from working part time
in a cousins small business enterprise, Third-Party Claimant leases out portions of the house to boarders, one
of them a woman known by the name of EVANGELINE P. CACALDA;

(f) In the course of time, CACALDA, who represented herself as having the capacity to have the title
transferred to Third-Party Claimants name, was able to gain the complete confidence of the Third-Party
Claimant, and he, in all his laymans utter vulnerability, entrusted her not only with the owners duplicate of
TCT No. 135066x x x for purposes of transferring the Subject Property to Third-Party Claimants name but
also the amount of 135,000.00 (out of the hurried sale of another small property he also inherited from
PARDO) to pay what CACALDA made him believe was the amount of taxes and other expenses to be incurred
to have the title transferred;

(g) However, CACALDA never got the transfer done, and, not before long, left the Third-Party Claimants
house where she was boarding, and never showed up ever again;

(h) Sometime in October 2004, Third-Party Claimant discovered the following Entry No. 2004-5119/T-135066
which was annotated on August 13, 2004 on page 2 of TCT 135066 x x x, which reads:

ENTRY NO. 2004-5119/T-135066 REAL ESTATE MORTGAGE WITH SPECIAL POWER TO SELL MORTGAGE
(sic) PROPERTY WITHOUT JUDICIAL PROCEEDINGS In favor of EVANGELINE C. PANGILINAN (Mortgagee)
covering the property described herein to guarantee the credit facility or principal loan obligation in the
amount of TWO HUNDRED THOUSAND PESOS (200,000.00), Philippine Currency, upon terms and conditions
set forth in Doc. No. 458; page No. 92; Book No. 41; Series of 2004 acknowledged before Notary Public Jesus
B. Bongon for Pasay City.

(i) Upon learning about the above-cited annotation on TCT No. 135066 x x x Third-Party Claimant sought the
assistance of the Public [Attorneys] Office and filed a complaint for estafa against CACALDA on October 6,
2004 and annotated his Adverse Claim on TCT 135066 x x x per Entry No. 2004-7480/T-135066 dated
October 28, 2004;

(j) In response to the said Petition, Third-Party Claimant x x x filed an OPPOSITION AND MOTION TO DISMISS
x x x, to which [Pangilinan] filed her REPLY/COMMENT where she attached, among other documents, copies of
the following:

j.1 Real Estate Mortgage with Special Power to Sell Mortgaged Property Without Judicial Proceedings allegedly
signed by PARDO x x x;

j.2 The purported Community Tax Certificate (CTC) No. CC12003 21039100 issued July 13, 2004 in Pasay
City, of alleged PARDO who mortgaged the Subject Property x x x;

j.3 Two photographs taken by the alleged mortgagor-debtor PARDO when she signed the loan documents x x
x [.]

COMPILED BY: Jo-Al Y. Gealon


Page 3 of 102
LABRADOR NOTES

6. From all the foregoing, it is crystal clear that:

a. PARDO, the true and real owner of the Subject Property, COULD NOT HAVE ENTERED INTO, MUCH LESS
SIGNED, the Real Estate Mortgage with Special Power to Sell Mortgaged Property Without Judicial Proceedings
x x x, as she had been LONG DEAD at the time of the execution thereof x x x;

b. PARDO, the true and real owner of the Subject Property, who was born on December 29, 1924, was 78
years old at the time she died on May 20, 2003, as shown in her Death Certificate x x x and in her obituary x
x x, and could not have been the PARDO who issued the Community Tax Certificate (CTC) No. CC12003
21039100 issued July 13, 2004 in Pasay City x x x with the birth date "April 25, 1957," which CTC was
submitted to, and relied upon by, Defendant PANGILINAN to establish the identity of PARDO[,] the alleged
mortgagor-debtor;

c. The photographs x x x taken of the alleged PARDO who mortgaged the Subject Property and who received
the proceeds of the mortgage loan of 200,000.00 show CACALDA, the former boarder of [Third-Party
Claimant] and swindler par [excellence], and CERTAINLY NOT THE LONG DECEASED PARDO, the true and real
owner of the Subject Property;

d. All the signatures, including the thumbmarks, shown on the Real Estate Mortgage with Special Power to Sell
Mortgaged Property Without Judicial Proceedingsx x x are FAKE, COUNTERFEIT, BOGUS,PHONY AND FORGED,
as they DONT belong to PARDO, the true and real owner of the Subject Property, who had been LONG DEAD
at the time of the execution thereof, but to the impostor CACALDA.

7. The said Petition for Cancellation of Adverse Claim is yet to be resolved by Hon. Ma. Rosario B. Ragasa,
Presiding Judge of RTC Branch 108, and here is [Pangilinan] filing yet another petition, this time for Writ of
Possession;

8. Third-Party Claimant has already filed a complaint directly attacking the validity of [Pangilinans] title and
praying for, among other things, the annulment of TCT 147777 as having emanated from an illegal source, as
well as the reinstatement of the former title, TCT 135066, in the name of PARDO, Third-Party Claimants
deceased aunt, benefactor and donor without all the liens and [encumbrances] caused to be annotated
thereon by Petitioner x x x.

9. Third-Party Claimant is the rightful owner of the Subject Property and is entitled to its possession,
not[Pangilinan] whose title TCT 147777 emanated from an illegal source and is therefore null and void.10

In her Comment/Opposition,11 Pangilinan relied on Spouses Arquiza v. Court of Appeals,12 Autocorp Group &
Autographics, Inc. v. Court of Appeals,13 Chailease Finance, Corp. v. Spouses Ma,14 Sps. de Vera v. Hon.
Agloro,15 PNB v. Sanao Marketing Corp.,16 and Sps. Yulienco v. Court of Appeals17 insofar as these cases
held that the trial court has the ministerial duty to issue a writ of possession, which cannot be stayed by an
injunction or a pending action for annulment of the real estate mortgage or the extra-judicial foreclosure
proceedings.

Meanwhile, in April 2007, petitioner filed an action for Annulment of Title and Damages against Pangilinan and
Robert H. Guillermo in his official capacity as the Register of Deeds of Pasay City.18 It was docketed as Civil
Case No. 07-0529-CFM and raffled before the Pasay RTC, Branch 110.

After exchanges of subsequent pleadings19 in LRC Case No. 06-0036-CF, the trial court eventually ruled in
favor of Pangilinan. On January 17, 2008, it denied petitioners motion to recall the writ of possession and
directed respondent Sheriff Javier to implement the same. On April 3, 2008, petitioners motion for
reconsideration20 was likewise denied.

Petitioner elevated the case to the appellate court. Nevertheless, the CA did not find any evidence that the
trial court acted in a capricious and despotic manner or that the questioned Orders were issued by reason of
passion, prejudice or personal hostility. It opined that any question regarding the regularity and validity of the
extrajudicial foreclosure sale, as well as the consequent cancellation of the writ of possession, is to be
determined in a subsequent proceeding, pursuant to Section 8 of Act No. 3135,21 as amended by Act No.
4118,22 and that such question should not be raised as a justification for opposing the issuance of the writ
since the proceeding is heard ex parte.

The motion for reconsideration23 filed by petitioner was denied; hence, this petition.

We deny.

In extrajudicial foreclosures of real estate mortgages, the issuance of a writ of possession is governed by
Section 7 of Act No. 3135, as amended, which provides:

SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First
Instance (Regional Trial Court) of the province or place where the property or any part thereof is situated, to
give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use
of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was

COMPILED BY: Jo-Al Y. Gealon


Page 4 of 102
LABRADOR NOTES

made without violating the mortgage or without complying with the requirements of this Act. Such petition
shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if
the property is registered, or in special proceedings in the case of property registered under the Mortgage Law
or under section one hundred and ninety-four of the Administrative Code, or of any other real property
encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any
existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees
specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-
six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of
the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property
is situated, who shall execute said order immediately.

Although the above provision clearly pertains to a writ of possession availed of and issued within the
redemption period of the foreclosure sale, the same procedure also applies to a situation where a purchaser is
seeking possession of the foreclosed property bought at the public auction sale after the redemption period
has expired without redemption having been made. The only difference is that in the latter case, no bond is
required therefor, as held in China Banking Corporation v. Lozada, thus:

It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property purchased if
it is not redeemed during the period of one year after the registration of the sale. As such, he is entitled to the
possession of the said property and can demand it at any time following the consolidation of ownership in his
name and the issuance to him of a new transfer certificate of title. The buyer can in fact demand possession of
the land even during the redemption period except that he has to post a bond in accordance with Section 7 of
Act No. 3135, as amended. No such bond is required after the redemption period if the property is not
redeemed. x x x (Emphasis supplied

Upon the expiration of the period to redeem and no redemption was made, the purchaser, as confirmed
owner, has the absolute right to possess the land and the issuance of the writ of possession becomes a
ministerial duty of the court upon proper application and proof of title.24

There is, however, an exception to the rule. Under Section 33, Rule 39 of the Rules of Court,25 the possession
of the property shall be given to the purchaser or last redemptioner unless a third party is actually holding the
property in a capacity adverse to the judgment obligor. Thus, the courts obligation to issue an ex parte writ of
possession in favor of the purchaser in an extrajudicial foreclosure sale ceases to be ministerial when there is
a third party in possession of the property claiming a right adverse to that of the judgment
debtor/mortgagor.26 In such a case, the issuance of the writ of possession ceases to be ex-parte and non-
adversarial as the trial court must order a hearing to determine the nature of said possession, i.e., whether or
not possession of the subject property is under a claim averse to that of the judgment debtor.27 We
repeatedly emphasize though that the exception provided under Section 33 contemplates a situation in which
a third party holds the property by adverse title or right vis-a-vis the judgment debtor or mortgagor, such as
that of a co-owner, agricultural tenant or usufructuary, who possesses the property in his or her own right,
and is not merely the successor or transferee of the right of possession of another co-owner or the owner of
the property.28

In this case, while it is undisputed that petitioner was in possession of the subject property, it cannot be said
that his right to possess the same is by virtue of being a co-owner, agricultural tenant or usufructuary; nor is
the claim to his right of possession analogous to the foregoing situations. What is clear is that he allegedly
acquired the property from Pardo by reason of a donation mortis causa. He is, therefore, a transferee or
successor-in-interest who merely stepped into the shoes of his aunt. He cannot assert that his right of
possession is adverse to that of Pardo as he has no independent right of possession. Consequently, under
legal contemplation, he cannot be considered as a "third party who is actually holding the property adversely
to the judgment obligor." The trial court had the ministerial duty to issue, as it did issue, the possessory writ
in favor of respondent Pangilinan. As it appeared, there was no reason for it to order the recall of the writ
already issued.

Moreover, it is not amiss to point that the execution of Pardo of donation mortis causa in favor of petitioner
does not immediately transfer title to the property to the latter. Considering that the alleged donation is one
of mortis causa, the same partake of the nature of testamentary provision.29 As such, said deed must be
executed in accordance with the requisites on solemnities of wills and testaments under Articles 80530 and
80631 of the New Civil Code; otherwise, the donation is void and would produce no effect.32 Unless and until
the alleged donation is probated, i.e., proved and allowed in the proper court, no right to the subject property
has been transmitted to petitioner.33

WHEREFORE, the foregoing considered, the instant petition for review on certiorari is DENIED. The March 4,
2009 Decision and May 29, 2009 Resolution of the Court of Appeals in CA-G.R. SP No. 103194, which affirmed
the Orders dated January 17, 2008 and April 3, 2008 of the Regional Trial Court, Branch 111, Pasay City, in
LRC Case No. 06-0036-CFM, are AFFIRMED.

SO ORDERED.

COMPILED BY: Jo-Al Y. Gealon


Page 5 of 102
LABRADOR NOTES

Andy Ang vs. Severino Pacunio G.R. No. 208928 July 8, 2015

G.R. No. 208928 July 8, 2015

ANDY ANG, Petitioner,


vs.
SEVERINO PACUNIO, TERESITA P. TORRALBA, SUSANA LOBERANES, CHRISTOPHER N. PACUNIO,
and PEDRITO P. AZARCON, represented by their attorney-in-fact, GALILEO P.
TORRALBA, Respondents.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 under Rule 45 of the Rules of Court are the Decision2 dated
September 28, 2012 and the Resolution3 dated August 13, 2013 of the Court of Appeals (CA) in CA-G.R. CV
No. 00992-MIN, which affirmed the Summary Judgment 4 dated September 12, 2006 of the Regional Trial
Court of Cagayan de Oro City, Branch 38 (RTC) in Civil Case No. 2003-115 with modification declaring, inter
alia, the Deed of Absolute Sale between petitioner Andy Ang (petitioner) and Felicisima Udiaan (Udiaan) null
and void.

The Facts

The instant case arose from a Complaint5 dated March I 9, 2003 for Declaration of Nullity of Sale,
Reconveyance, and Damages filed by Pedrito N. PaGunio, Editha P. Yaba, and herein respondents Severino
Pacunio, Teresita P. Torralba, Susana Loberanes, Christopher N. Pacunio, and Pedrito P. Azaron (respondents)
against petitioner before the RTC involving a 98,851 square meter (sq. m.) parcel of land originally registered
in Udiaan's name as evidenced by Original Certificate of Title (OCT) No. T-35936 (subject land). In their
Complaint, respondents alleged that they are the grandchildren and successors-in-interest of Udiaan who
died7 on December 15, 1972 in Cagayan de Oro City and left the subject land as inheritance to her heirs.
However, on July 12, 1993, an impostor falsely representing herself as Udiaan sold the subject land to
petitioner, as evidenced by a Deed of Absolute Sale 8 of even date (Questioned Deed of Absolute Sale).
Consequently, OCT No. T-3593 was cancelled and Transfer Certificate of Title (TCT) No. T-790519 was issued
in the latter's name. In 1997, petitioner entered the subject land and used the same in his livestock business.
Respondents then informed petitioner that he did not validly acquire the subject land, and thereafter,
demanded for its return, but to no avail.10 Hence, they filed the aforesaid complaint, essentially contending
that Udiaan could not have validly sold the subject land to petitioner considering that she was already dead for
more than 20 years when the sale occurred. 11

In his Answer,12 petitioner denied respondents' allegations and countered that: (a) at first, he bought the
subject land from a person representing herself as Udiaan who showed a community tax certificate as proof of
identity, has in her possession OCT No. T-3593, knew the location of the subject land, and was not afraid to
face the notary public when they executed the Questioned Deed of Absolute Sale; ( b) he was initially
prevented from entering the subject land since it was being occupied by the Heirs of Alfredo Gaccion (Heirs of
Gaccion); (c) in order to buy peace, he had to "buy" the subject land anew from the Heirs of Gaccion; (d) he
was a buyer in good faith, for value, and was without any knowledge or participation in the alleged defects of
the title thereof; and ( e) respondents were never in possession of the subject land and they never paid real
property taxes over the same. Ultimately, petitioner claimed that he was duped and swindled into buying the
subject land twice.13

After the pre-trial conference, the parties submitted the case for summary judgment on the basis of the
documents and pleadings already filed.1awp++i1 The RTC then ordered the parties to simultaneously submit
their memoranda in support of their respective positions.14

The RTC Ruling

In a Summary Judgment15 dated September 12, 2006, the RTC ruled in petitioner's favor and accordingly,
dismissed the case for lack of merit.16 It found that while respondents claimed to be Udiaan's successors-in-
interest over the subject land, there is dearth of evidence proving their successional rights to Udiaan's estate,
specifically, over the subject land. As such, the RTC concluded that respondents are not the real parties in
interest to institute an action against petitioner, warranting the dismissal of their complaint. 17

Dissatisfied, respondents appealed18 to the CA.

The CA Ruling

In a Decision19 dated September 28, 2012, the CA affirmed with modification the RTC ruling in that: (a) it
nullified the Questioned Deed of Absolute Sale; (b) declared valid the deed of absolute sale between petitioner

COMPILED BY: Jo-Al Y. Gealon


Page 6 of 102
LABRADOR NOTES

and the Heirs of Gaccion over a 3,502-sq. m. portion of the subject land; and ( c) distributed portions of the
subject land to the Heirs of Gaccion and to the children of Udiaan.20

It agreed with the RTC's finding that respondents are not real parties in interest to the instant case,
considering that, as mere grandchildren of Udiaan, they have no successional rights to Udiaan's estate. In this
regard, the CA ratiocinated that respondents could only succeed from said estate by right of representation if
their mother, who is one of Udiaan's children,21 predeceased Udiaan. However, such fact was not
established.22

This notwithstanding, the CA nullified the Questioned Deed of Absolute Sale because it was clearly executed
by a person other than Udiaan, who died more than 20 years before such sale occurred. 23 Considering,
however, that some of Udiaan's heirs had already sold a 9,900-sq. m. portion of the subject land to the Heirs
of Gaccion, who in turn, sold a 3,502-sq. m. portion to petitioner, the CA apportioned the subject land as
follows: (a) 3,502 sq. m. to petitioner; (b) 6,398 sq. m. to the Heirs of Gaccion; and (c) the remainder of the
subject land to Udiaan's children.24

Aggrieved, petitioner moved for reconsideration,25 but was denied in a Resolution26 dated August 13, 2013;
hence, this petition.

The Issue Before the Court

The core issue for the Court's resolution is whether or not the CA correctly declared the nullity of the
Questioned Deed of Absolute Sale and distributed portions of the subject land to different parties, among
others, despite ruling that respondents are not real parties in interest to the instant case.

The Court's Ruling

The petition is meritorious.

Section 2, Rule 3 of the Rules of Court lays down the definition of a real party in interest as follows:

SEC. 2. Parties in interest. - A real party in interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise provided by law or these
Rules, every action must be prosecuted or defended in the name of the real party in interest.

The rule on real parties in interest has two (2) requirements, namely: (a) to institute an action, the plaintiff
must be the real party in interest; and (b) the action must be prosecuted in the name of the real party in
interest. Interest within the meaning of the Rules of Court means material interest or an interest in issue to be
affected by the decree or judgment of the case, as distinguished from mere curiosity about the question
involved. One having no material interest cannot invoke the jurisdiction of the court as the plaintiff in an
action. When the plaintiff is not the real party in interest, the case is dismissible on the ground of lack of
cause of action.27 In Spouses Oco v. Limbaring, 28 the Court expounded on the purpose of this rule, to wit:
Necessarily, the purposes of this provision are 1) to prevent the prosecution of actions by persons without any
right, title or interest in the case; 2) to require that the actual party entitled to legal relief be the one to
prosecute the action; 3) to avoid multiplicity of suits; and 4) discourage litigation and keep it within certain
bounds, pursuant to public policy.29

In the instant case, respondents claim to be the successors-in-interest of the subject land just because they
are Udiaan's grandchildren.1wphi1 Under the law, however, respondents will only be deemed to have a
material interest over the subject land - and the rest of Udiaan' s estate for that matter - if the right of
representation provided under Article 970,30 in relation to Article 982,31 of the Civil Code is available to them.
In this situation, representatives will be called to the succession by the law and not by the person
represented; and the representative does not succeed the person represented but the one whom the person
represented would have succeeded.32

For such right to be available to respondents, they would have to show first that their mother: (a)
predeceased Udiaan; (b) is incapacitated to inherit; or (c) was disinherited, if Udiaan died testate.33 However,
as correctly pointed out by the CA, nothing in the records would show that the right of representation is
available to respondents. Hence, the RTC and the CA correctly found that respondents are not real parties in
interest to the instant case. It is well-settled that factual findings of the RTC, when affirmed by the CA, are
entitled to great weight and respect by the Court and are deemed final and conclusive when supported by the
evidence on record,34 as in this case.

Having established that respondents are not the real parties in interest to the instant suit, the proper course
of action was for the CA to merely affirm the RTC's dismissal of their complaint. It therefore erred in
proceeding to resolve the other substantive issues of the case and granting one of the principal reliefs sought
by respondents, which is the declaration of the nullity of the Questioned Deed of Absolute Sale. 35 In the same
vein, the CA erred in awarding portions of the subject land to various non-parties to the case, such as the

COMPILED BY: Jo-Al Y. Gealon


Page 7 of 102
LABRADOR NOTES

Heirs of Gaccion and Udiaan's children. Basic is the rule that no relief can be extended in a judgment to a
stranger or one who is not a party to a case. 36

In sum, the CA transgressed prevailing law and jurisprudence in resolving the substantive issues of the instant
case despite the fact that respondents are not real parties in interest to the same. Necessarily, a
reinstatement of the R TC ruling is in order.

WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated September 28, 2012 and the
Resolution dated August 13, 2013 of the Court of Appeals in CA-G.R. CV No. 00992-MIN are hereby
REVERSED and SET ASIDE. Accordingly, the Summary Judgment dated September 12, 2006 of the Regional
Trial Court of Cagayan de Oro City, Branch 38 in Civil Case No. 2003-115 is REINSTATED.

SO ORDERED.

Morales v. Olondriz, 783 SCRA 151


G.R. No. 198994, February 03, 2016

IRIS MORALES, Petitioners, v. ANA MARIA OLONDRIZ, ALFONSO JUAN OLONDRIZ, JR., ALEJANDRO MORENO
OLONDRIZ, ISABEL ROSA OLONDRIZ AND FRANCISCO JAVIER MARIA OLONDRIZ, Respondent.

DECISION

BRION, J.:

This is a petition for review on certiorari filed by Iris Morales from the May 27, 2011 decision and October 12,
2011 resolution of the Court of Appeals (CA) in CA-G.R. SP No. 102358.1 The CA denied Morales' petition for
certiorari from the Regional Trial Court's (RTC) July 12, 2007 and October 30, 2007 orders in SP. Proc. No.
03-0060 and SP. Proc. No. 03-0069.2chanroblesvirtuallawlibrary

Antecedents

Alfonso Juan P. Olondriz, Sr. (the decedent) died on June 9, 2003. He was survived by his widow, Ana Maria
Ortigas de Olondriz, and his children: Alfonso Juan O. Olondriz, Jr., Alejandro Marino O. Olondriz, Isabel Rosa
O. Olondriz, Angelo Jose O. Olondriz, and Francisco Javier Maria Bautista Olondriz. His widow and children are
collectively referred to as the respondent heirs.

Believing that the decedent died intestate, the respondent heirs filed a petition with the Las Pias RTC for the
partition of the decedent's estate and the appointment of a special administrator on July 4, 2003. The case
was raffled to Branch 254 and docketed as Sp. Proc. Case No. SP-03-0060.

On July 11, 2003, the RTC appointed Alfonso Juan O. Olondriz, Jr. as special administrator.

However, on July 28, 2003, Iris Morales filed a separate petition with the RTC alleging that the decedent left a
will dated July 23, 1991. Morales prayed for the probate of the will and for hex appointment as special
administratrix. Her petition was also raffled to Branch 254 and docketed as Sp. Proc. Case No. SP-03-0069.

The pertinent portions of the decedent's will reads:chanRoblesvirtualLawlibrary


Upon my death, IRIS MORALES OLONDRIZ shall be the executor hereof and administrator of my estate until
its distribution in accordance herewith, x x x

My entire estate shall be divided into six (6) parts to be distributed equally among and between (1) IRIS
MORALES OLONDRIZ, my children (2) ALFONSO JUAN OLONDRIZ, JR., (3) ALEJANDRO OLONDRIZ, (4)
ISABEL OLONDRIZ, (5) ANGELO OLONDRIZ, and their mother (6) MARIA ORTEGAS OLONDRIZ, SR.3
Notably, the will omitted Francisco Javier Maria Bautista Olondriz, an illegitimate son of the decedent.

On September 1, 2003, Morales filed a manifestation in Sp. Proc. Case No. SP-03-0060 and moved to suspend
the intestate proceedings in order to give way to the probate proceedings in Sp. Proc. Case No. SP-03-0069.
The respondent heirs opposed Morales' motion for suspension and her petition for allowance of the will.

On November 27, 2003, the RTC consolidated Sp. Proc. Case No. SP-03-0060 with Sp. Proc. Case No. SP-03-
0069.

On January 6, 2004, the respondent heirs moved to dismiss the probate proceedings because Francisco was
preterited from the will.

COMPILED BY: Jo-Al Y. Gealon


Page 8 of 102
LABRADOR NOTES

On January 10, 2006, Morales agreed to the holding of an evidentiary hearing to resolve the issue of
preterition. Thus, the RTC ordered the parties to submit their factual allegations to support or negate the
existence of preterition. Only the respondent heirs complied with this order.

After several postponements at the instance of Morales, the reception of evidence for the evidentiary hearing
was scheduled on May 29, 2006. However, Morales failed to appear, effectively waiving her right to present
evidence on the issue of preterition.

On June 23, 2006, the RTC, through Judge Gloria Butay Aglugub, suspended the intestate proceedings in Sp.
Proc. Case No. SP-03-0060 and set the case for probate. The RTC reasoned that probate proceedings take
precedence over intestate proceedings.

The respondent heirs moved for reconsideration of the suspension order but the RTC denied the motion on
September 1, 2006. The RTC also summarily revoked the Letters of Administration previously issued to
Alfonso Jr.

The respondent heirs moved for reconsideration of the summary revocation of the Letters of Administration.
They also moved for the inhibition of Judge Aglugub of Branch 254.

On November 16, 2006, the RTC granted the motion for inhibition. The case was transferred to Branch 253
presided by Judge Salvador V. Timbang, Jr.

On July 12, 2007, the RTC resolved (1) the respondent heirs' motion for reconsideration of the revocation of
the Letters of Administration and (2) Morales' motion to be appointed Special Administratrix of the estate. The
RTC noted that while testacy is preferred over intestacy, courts will not hesitate to set aside probate
proceedings if it appears that the probate of the will might become an idle ceremony because the will is
intrinsically void.

The RTC observed: (1) that Morales expressly admitted that Francisco Javier Maria Bautista Olondriz is an heir
of the decedent; (2) that Francisco was clearly omitted from the will; and (3) that based on the evidentiary
hearings, Francisco was clearly preterited. Thus, the RTC reinstated Alfonso Jr. as administrator of the estate
and ordered the case to proceed in intestacy.

Morales moved for reconsideration which the RTC denied on October 30, 2007, for lack of merit.

On February 7, 2008, Morales filed a petition for certiorari against the orders of the RTC. Morales alleged that
the RTC acted with grave abuse of discretion in proceeding intestate despite the existence of the will. The
petition was docketed as CA-G.R. SP No. 102358.

On May 27, 2011, the CA dismissed Morales' petition for certiorari. The CA reasoned that while probate
proceedings take precedence over intestate proceedings, the preterition of a compulsory heir in the direct line
annuls the institution of heirs in the will and opens the entire inheritance into intestate succession.4 Thus, the
continuation of the probate proceedings would be superfluous and impractical because the inheritance will be
adjudicated intestate. The CA concluded that the RTC did not act with grave abuse of discretion.

Morales moved for reconsideration which the CA denied on October 12, 2011. Hence, she filed the present
petition for review on certiorari on December 5, 2011.

The Petition

Morales maintains that the RTC committed grave abuse of discretion when it ordered the case to proceed
intestate because: (1) the probate of a decedent's will is mandatory; (2) the RTC Branch 254 already ordered
the case to proceed into probate; (3) the order setting the case for probate already attained finality; (3) the
probate court cannot touch on the intrinsic validity of the will; and (4) there was no preterition because
Francisco received a house and lot inter vivos as an advance on his legitime.

The respondent heirs counter: (1) that it is within the RTC's jurisdiction to reverse or modify an interlocutory
order setting the case for probate; (2) that the petitioner failed to mention that she did not appear in any of
the evidentiary hearings to disprove their allegation of preterition; (3) that the RTC and the CA both found
that Francisco was preterited from the will; and (4) that Francisco's preterition annulled the institution of heirs
and opened the case into intestacy. They conclude that the RTC did not exceed its jurisdiction or act with
grave abuse of discretion when it reinstated Alfonso Jr. as the administrator of the estate and ordered the
case to proceed intestate.

Our Ruling

We join the ruling of the CA.

Preterition consists in the omission of a compulsory heir from the will, either because he is not named or,
although he is named as a father, son, etc., he is neither instituted as an heir nor assigned any part of the
estate without expressly being disinherited - tacitly depriving the heir of his legitime.5 Preterition requires that

COMPILED BY: Jo-Al Y. Gealon


Page 9 of 102
LABRADOR NOTES

the omission is total, meaning the heir did not also receive any legacies, devises, or advances on his
legitime.6

In other words, preterition is the complete and total omission of a compulsory heir from the testator's
inheritance without the heir's express disinheritance.

Article 854 of the Civil Code states the legal effects of preterition:chanRoblesvirtualLawlibrary
Art. 854. The preterition or omission of one, some, or all of the compulsory heirs in the direct line, whether
living at the time of the execution of the will or born after the death of the testator, shall annul the institution
of heir; but the devises and legacies shall be valid insofar as they are not inofficious.

If the omitted compulsory heirs should die before the testator, the institution shall be effectual, without
prejudice to the right of representation, (emphasis supplied)cralawlawlibrary
Under the Civil Code, the preterition of a compulsory heir in the direct line shall annul the institution of heirs,
but the devises and legacies shall remain valid insofar as the legitimes are not impaired. Consequently, if a
will does not institute any devisees or legatees, the preterition of a compulsory heir in the direct line will result
in total intestacy.7

In the present case, the decedent's will evidently omitted Francisco Olondriz as an heir, legatee, or devisee.
As the decedent's illegitimate son, Francisco is a compulsory heir in the direct line. Unless Morales could show
otherwise, Francisco's omission from the will leads to the conclusion of his preterition.

During the proceedings in the RTC, Morales had the opportunity to present evidence that Francisco received
donations inter vivos and advances on his legitime from the decedent. However, Morales did not appear
during the hearing dates, effectively waiving her right to present evidence on the issue. We cannot fault the
RTC for reaching the reasonable conclusion that there was preterition.

We will not entertain the petitioner's factual allegation that Francisco was not preterited because this Court is
not a trier of facts. Furthermore, the CA concurred with the RTC's conclusion. We see no cogent reason to
deviate from the factual findings of the lower courts.

The remaining question is whether it was proper for the RTC to (1) pass upon the intrinsic validity of the will
during probate proceedings and (2) order the case to proceed intestate because of preterition.

The general rule is that in probate proceedings, the scope of the court's inquiry is limited to questions on the
extrinsic validity of the will; the probate court will only determine the will's formal validity and due execution.8
However, this rule is not inflexible and absolute.9 It is not beyond the probate court's jurisdiction to pass upon
the intrinsic validity of the will when so warranted by exceptional circumstances.10 When practical
considerations demand that the intrinsic validity of the will be passed upon even before it is probated, the
probate court should meet the issue.11

The decedent's will does not contain specific legacies or devices and Francisco's preterition annulled the
institution of heirs. The annulment effectively caused the total abrogation of the will, resulting in total
intestacy of the inheritance.12 The decedent's will, no matter how valid it may appear extrinsically, is null and
void. The conduct of separate proceedings to determine the intrinsic validity of its testamentary provisions
would be superfluous. Thus, we cannot attribute error - much less grave abuse of discretion - on the RTC for
ordering the case to proceed intestate.

Finally, there is no merit in the petitioner's argument that the previous order setting the case for probate
barred the RTC from ordering the case to proceed intestate. The disputed order is merely interlocutory and
can never become final and executory in the same manner that a final judgment does.13 An interlocutory
order does not result in res judicata.14 It remains under the control of the court and can be modified or
rescinded at any time before final judgment.15

Certiorari is a limited form of review confined to errors of jurisdiction. An error of jurisdiction is one where the
officer or tribunal acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction.16 As discussed, it is well within the jurisdiction of the probate court to pass upon
the intrinsic validity of the will if probate proceedings might become an idle ceremony due to the nullity of the
will.

On the other hand, grave abuse of discretion is the capricious and whimsical exercise of judgment equivalent
to an evasion of positive duty, or a virtual refusal to act at all in contemplation of the law.17 It is present
when power is exercised in a despotic manner by reason, for instance, of passion and hostility. Morales failed
to show that the RTC acted in such a capricious and despotic manner that would have warranted the CA's
grant of her petition for certiorari. On the contrary, the RTC acted appropriately in accordance with the law
and jurisprudence.cralaw-red

WHEREFORE, the petition is DISMISSED. Costs against the petitioner.

SO ORDERED.

COMPILED BY: Jo-Al Y. Gealon


Page 10 of 102
LABRADOR NOTES

Heirs of Jose Ma. Gepuela v. Meez-Andres, 780 SCRA 348

G.R. No. 173636

HEIRS OF JOSE MA. GEPUELA, Petitioners,


vs.
BERNITA MENEZ-ANDRES, ET AL., Respondents.

x-----------------------x

G.R. No. 173770

HERNITA MENEZ-ANDRES and NELIA MEEZ CAYETANO, represented by their duly-appointed


Attorney-In-Fact ANGELITO MEEZ, Petitioners,
vs.
HEIRS OF JOSE MA. GEPUELA, Respondents.

DECISION

JARDELEZA, J.:

These are consolidated petitions for review on certiorari assailing the Decision1 dated January 31, 2005 and
the Amended Decision2 dated July 21, 2006 of the Court of Appeals (CA) which denied the appeals of both
parties and affirmed with modification the Decision3 dated May 25, 1999 of Branch 67 of the Regional Trial
Court of Pasig City. The assailed Amended Decision upheld the redemption made by the late Jose Ma. Gepuela
of the 36/72 pro indiviso share of the late Basilia Austria Vda. de Cruz over the property covered by Transfer
Certificate of Title (TCT) No. 95524, except for the two and a half percent (2.5%) share of Hernita Meez-
Andres and her co-heirs.

The Facts

The controversy arose from the redemption made by the late Jose Ma. Gepuela (Gepuela), petitioner in G.R.
No. 173636, and transferee of an aliquot portion of the property covered by TCT No. 95524, of the 36/72 pro
indiviso share of Basilia Austria Vda. de Cruz (Basilia). Hernita Meez-Andres and Nelia Meez-Cayetano
(Hernita, et al.), petitioners in G.R. No. 173770, assailed the redemption on the ground that Gepuela had no
legal personality to make the redemption.

Basilia was the widow of Pedro Cruz, with whom she had five children, namely, Perfecto, Alberto, Luz, Benita
and Isagani. Basilia executed a Huling Habilin,4 where she named her daughter Benitas children Hernita,
Nelia, Rosemarie, Angel and Gracita as voluntary heirs to ten percent (10%) of the free portion of her estate.
Basilias Huling Habilin was admitted into ante-mortem probate on March 1, 1957.5 Her daughter Luz Cruz
Salonga (Luz) was appointed Administratrix of Basilias estate on August 18, 1976. 6

When Basilia died, she left behind considerable properties, including a 36/72 pro indiviso share in a 5,492
square meter property in San Juan, then province of Rizal. This property was covered by TCT No. 95524 and
coowned with some of Basilias children and grandchildren, as follows:

Basilia Austria Vda. de Cruz, widow36/72; Perfecto Cruz, married to Flavia Jorge12/72; Luz Cruz, married
to Feliciano Salonga12/72; Isagani Cruz, married to Milagros Villareal4/72; Flavia Jorge, married to
Perfecto Cruz2/72; Pedrito Cruz, single2/72; Perfecto Cruz, Jr., single2/72; Vito Cruz, 20 years of age,
single2/72.7

Perfecto and Flavia sold their interests (14/72 pro indiviso share) in the property to Severino Etorma
(Etorma), who later on sold the same to Gepuela and one Antonio Cinco (Cinco). These transactions were
annotated on TCT No. 95524 as Entry Nos. 12640 and 73035, dated November 13, 1964 and November 18,
1971, respectively.8 In 1978, Cinco sold his share to Gepuela.9 This was likewise annotated in the title as
Entry No. 3904 dated May 20, 1988.10Luz also disposed, by way of a Sale of Rights with Mortgage, her
12/72 pro indiviso share in the property to Gepuela in another transaction registered as Entry No. 8536 dated
May 8, 1989 on TCT No. 95524.11

On July 29, 1986, Basilias 36/72 pro indiviso share was sold in a public auction to satisfy the judgment in Civil
Case No. 32824, entitled "Benita Me[]ez v. Luz Cruz Salonga as Administratrix of the Estate of Basilia Austria
Vda. [d]e Cruz." Benita, as judgment creditor in the case, emerged as the highest bidder.12

On May 14, 1987, Gepuela redeemed Basilias 36/72 pro indiviso share from Benita by paying the auction
price of Four Hundred Seventy-Four Thousand Nine Hundred Seventy-Seven Pesos (P474,977.00), inclusive of
interest and other legal fees.13 This was inscribed on the title as Entry No. 022 dated May 14, 1987.

COMPILED BY: Jo-Al Y. Gealon


Page 11 of 102
LABRADOR NOTES

Accordingly, Basilias estate, through Administratrix Luz, executed a Deed of Sale 14 and Waiver of
Redemption15 over the share, subject to the following conditions: 1) Gepuela should obtain court approval of
the sale; and 2) Gepuela should inform all heirs of the sale formally in writing.

After the expiration of the periods to redeem, Gepuela filed an action to consolidate his ownership over the
36/72 pro indiviso share he acquired by way of redemption from Basilias estate. This was docketed as LRC
Case No. R-3855 and assigned to Branch 166 of the Regional Trial Court of Pasig. The other registered co-
owners Isagani, Perfecto, Jr., Pedrito, and Vito (Isagani, et al.) opposed this action, raising Gepuelas lack of
standing to redeem given that he is not a co-owner of Basilias one-half portion. In a Decision16 dated
December 6, 1989, the trial court granted Gepuelas petition, declared him the owner of Basilias 36/72 pro
indiviso share in the parcel of land covered by TCT No. 95524 and ordered the issuance of a new certificate of
title to reflect this change in ownership. 17

Aggrieved, oppositors Isagani, Perfecto, Jr., Pedrito, Vito and Alberto appealed the trial courts Decision to the
CA, docketed as CA-G.R. CV No. 25605. In a Decision18 dated January 31, 1992, the CA, however, affirmed
the trial courts findings. The CAs Decision in CA G.R. CV No. 25605 was not appealed and became
final and executory on February 26, 1992.19 TCT No. 5033-R was issued that same year, reflecting
Gepuelas ownership of the 36/72 pro indiviso share previously owned by Basilia.20

The proceedings covering Basilias estate were, per motion of her heirs, ordered closed on February 15,
1996.21The record also shows that Gepuela filed a case, docketed as SCA No. 302 with Branch 159 of the
Regional Trial Court of Pasig, for the partition of the property covered by TCT No. 5033-R.22 The lower court
rendered a decision ordering the partition of the property. TCT No. 5033-R was cancelled and several titles
were issued covering the respective shares of Gepuela, Isagani, Perfecto and Pedrito, and Vito Cruz in the
property.23

In the meantime, or on October 10, 1995, Basilias grandchildren Hernita and Nelia filed a Complaint for
Redemption and Consignation with Damages24 and a subsequent Amended Complaint for Declaration of Nullity
of Redemption, Cancellation of Notation in Title, and Consignation with Damages 25 against Gepuela. This was
docketed as Civil Case No. 65327 and raffled to Branch 67 of the Regional Trial Court of Pasig City.

In their complaint, Hernita and Nelia alleged, among others, that: 1) Gepuelas redemption was null and void
as he (not being an heir, legatee/devisee, co-owner or creditor) did not have the legal personality to redeem
the share;26and 2) Hernita and Nelia sent notices to Gepuela informing him of their intent to recover their
interest in Basilias 36/72 pro indiviso share and to tender payment of the redemption price paid by him, plus
interest, which Gepuela refused.27

In his Answer with Compulsory Counterclaim 28 dated December 28, 1995, Gepuela denied Hernita and Nelias
allegations and alleged that his redemption had already been adjudicated by the trial court in LRC Case No. R-
3855. This ruling has, in turn, been affirmed by the Seventh Division of the CA in CA G.R. CV No. 25605. No
further appeal having been made, Gepuela asserts that the CAs Decision became final and executory on
February 26, 1992.29

Ruling of the Regional Trial Court

In its Decision30 dated May 25, 1999, the trial court upheld Gepuelas redemption of Basilias 36/72 pro
indiviso share. It, however, ruled that because Gepuela failed to formally notify Hernita, Nelia and Rosemarie
of the redemption, the same was null and void insofar as it affected the latters six percent (6%) share in the
property. The dispositive portion of the trial courts Decision reads:

WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor of plaintiffs HERNITA
ME[]EZ ANDRES, NELIA ME[]EZ CAYETANO, ROSEMARIE ME[]EZ PRONSTROLLER, all
represented herein by their duly-appointed Attorney-in-fact, ANGELINO ME[]EZ and against defendant JOSE
MA. GEPUELA, declaring that:

1. [T]he redemption made by defendant GEPUELA of the 36/72 portion of the Estate of Basilia Austria
Vda. [d]e Cruz as covered previously by TCT No. 95524 and at present by TCT No. 5033-R is NULL
AND VOID only insofar as to the shares of plaintiffs which corresponds to Six Percent (6%) thereof;

2. [P]laintiffs are allowed to consign with the Court the redemption price of that portion which is their
share of the 36/72 pro indiviso share of the Estate of Basilia Austria Vda. [d]e Cruz with interest at
Twelve Percent 12% per annum from the institution of this action until fully paid;

3. [U]pon payment of the redemption price, and finality of this Decision the Register of Deeds of San
Juan, Metro Manila is ordered to cancel Transfer Certificate of Title No. 5033-R and to issue another
Transfer Certificate of Title reflecting therein the names of plaintiffs as owners of the pro
indiviso share corresponding to six percent (6%) of the 36/72 pro indiviso share of defendant Jose Ma.
Gepuela;

COMPILED BY: Jo-Al Y. Gealon


Page 12 of 102
LABRADOR NOTES

4. [D]efendant is ordered to pay the amount of Two Hundred Thousand Pesos (P200,000.00) for and
as attorneys fees;

5. [T]o pay the cost of suit.

SO ORDERED.31

Both parties filed their respective appeals before the CA.32

Ruling of the Court of Appeals

The CA rejected both appeals and affirmed the trial courts Decision, with certain modifications. At the
outset, the CA noted that the validity of Gepuelas redemption has already been settled in LRC Case
No. R-3855 and affirmed by the CA in CA G.R. CV No. 25605. Since the Decision in said case had already
become final and executory per entry of judgment dated February 26, 1992, the CA declared that Hernita, et
al. are barred from assailing it again under the principle of res judicata.33

Despite this, the CA still proceeded to resolve the case on the merits. Rejecting Hernita, et al.s claim that
Gepuela had no personality to redeem Basilias 36/72 pro indiviso share, the appellate court held that Gepuela
was not a stranger to, but rather a co-owner of, the entire communal property "x x x because the two estates
are not separate and distinct properties but actually constitute one and the same property owned in
community and covered by the same TCT No. 95524." 34 Since redemption inures to the benefit of the other
co-owners, the CA affirmed the trial courts decision insofar as it nullified the redemption in proportion to
Hernita, et al.s respective shares.35

The CA thereafter recomputed the corresponding shares as follows: Hernita, Nelia, and Rosemarie, with their
siblings Angel and Granito, are instituted heirs entitled to ten percent (10%) of the free portion of Basilias
estate, equivalent to two and a half percent (2.5%) share in the property. They are likewise entitled to the
five percent (5%) share corresponding to the legitime of their deceased mother Benita, to which they are
entitled to, by right of representation, as the latters heirs. The dispositive portion of the CAs Decision dated
January 31, 2005 thus reads:

WHEREFORE, both appeals of plaintiffs-appellants and defendant-appellant are dismissed and the trial courts
Decision dated May 25, 1999 is affirmed, with certain modification. The award of attorneys fees is deleted and
paragraphs 1, 2 and 3 of the dispositive portion thereof are modified to read as follows:

"1. [T]he redemption made by defendant GEPUELA of the 36/72 portion of the Estate of Basilia Austria
Vda. [d]e Cruz as covered previously by TCT No. 95524 and at present by TCT No. 5033-R is NULL
AND VOID only insofar as to the shares of plaintiffs (and their siblings Angel and Gracito Me[]ez)
which correspond[] to 7.5% thereof;

2. [P]laintiffs are allowed to consign with the Court the redemption price of that portion which is their
share of the 36/72 pro indiviso share of the Estate of Basilia Austria Vda. de Cruz with interest at
Twelve Percent 12% per annum from finality of this Decision until fully paid;

3. [U]pon payment of the redemption price[ ]and finality of this Decision[,] the Register of Deeds of
San Juan, Metro Manila is ordered to cancel Transfer Certificate of Title No. 5033-R and to issue
another Transfer Certificate of Title reflecting therein the names of plaintiffs as owners of the pro
indiviso share corresponding to 7.5% of the 36/72 pro indiviso share of defendant Jose Ma. Gepuela.

The trial courts Decision is affirmed in all other respects.

SO ORDERED.36

Both parties filed their respective motions for reconsideration.

In denying these motions, the CA held that: (1) under the principle of res judicata, Hernita, et al. are barred
from assailing the redemption made by Gepuela, the validity of which had long been settled in LRC Case No.
R-3855 and CA G.R. CV No. 25605;37 (2) the nullification of the redemption over Hernita, et al.s
proportionate share does not serve to disturb the final ruling in LRC Case No. R-3855 and CA G.R. CV No.
25605 because Hernita, et al.s rights as co-owners were not resolved in said cases;38 (3) the one year period
provided under the Rules of Court to redeem applies to redemption of properties sold on execution whereas
Hernita, et al.s right to recover their share is premised on the fact that they are co-owners of the subject
property;39 (4) the lapse of about nine years from the auction sale cannot be equated with laches because of
the equitable considerations that Hernita, et al. were neither shown to have been notified of the auction sale
in 1986, nor impleaded as parties in the petition for consolidation subsequently filed by defendant
Gepuela;40 (5) the imposition of 12% interest per annum from finality of Decision until fully paid is consistent
with the guidelines laid down in Eastern Shipping Lines case.41

COMPILED BY: Jo-Al Y. Gealon


Page 13 of 102
LABRADOR NOTES

The CA, however, modified its ruling with respect to the computation of Hernita, et al.s shares in Basilias
estate. According to the CA, since both parties attested to the fact that Benita Cruz was still alive, Hernita et
al.s right to inherit by representation has not accrued as yet.42 Thus, they shall inherit from Basilias estate
only to the extent of their right as devisees or voluntary heirs as per the Huling Habilin executed by the
deceased Basilia.43

The dispositive portion of the CAs Decision, as amended, now reads:

WHEREFORE, the motions for reconsideration filed by both parties are denied. The Decision dated January
31, 2005 is modified to read as follows:

1. [T]he redemption made by defendant GEPUELA of the 36/72 portion of the Estate of Basilia Austria
Vda. [d]e Cruz as covered previously by TCT No. 95524 and at present by TCT No. 5033-R is NULL
AND VOID only insofar as to the shares of plaintiffs (and their siblings Angel and Gracito Me[]ez)
which corresponds to 2.5% thereof;

2. [P]laintiffs are allowed to consign with the Court the redemption price of that portion which is their
share of the 36/72 pro indiviso share of the Estate of Basilia Austria Vda. de Cruz with interest at
Twelve Percent 12% per annum from finality of judgment until fully paid;

3. [U]pon payment of the redemption price[] and finality of this Decision[,] the Register of Deeds of
San Juan, Metro Manila is ordered to cancel Transfer Certificate of Title No. 5033-R and to issue
another Transfer Certificate of Title reflecting therein the names of plaintiffs as owners of the pro
indiviso share corresponding to 2.5% of the 36/72 pro indiviso share in the name of defendant Jose
Ma. Gepuela.

SO ORDERED.44

Hence, these petitions.

G.R. No. 173636

The Heirs of Gepuela maintain that the CA erred in nullifying his redemption of the 36/72 pro indiviso share of
Basilia. They argue that:

(1) By issuing the assailed Decisions, the CA indirectly disturbed and altered the judgment rendered in
LRC Case. No. R-3855 which had long attained finality;45

(2) Even assuming arguendo that the redemption inured to the benefit of the other co-owners, the
latter should have timely opposed the action for consolidation of ownership or filed an annulment of
the resulting judgment to protect their interest;46

(3) There is nothing more for Hernita, et al. to inherit as the 36/72 share was sold at auction and the
estate failed to redeem the same within the period provided by law;47

(4) The Mariano case cited by the CA is inapplicable as there is no community of interest (for the
redemption to inure to the benefit of all co-owners) Gepuela not being a co-owner of the 36/72
share which was the subject of the execution sale;48

(5) Hernita et al. cannot feign ignorance of the sale in Gepuelas favor as the same was duly
annotated in the title;49 and

(6) Interest should be reckoned not from the finality of decision but from the time the redemption was
made.50

G.R. No. 173770

Hernita et al., on the other hand, insist that Gepuelas redemption is null and void for the following reasons:

1) Benita Meez, who purchased the property, was a co-owner thereof and under Article 1620, when a
co-owner purchases the property, no stranger may redeem the same;

2) Gepuela is a complete stranger who could not redeem;

3) The portions of the property purchased by Gepuela were in custodia legis by a probate court and
could not have been purchased without court approval;

COMPILED BY: Jo-Al Y. Gealon


Page 14 of 102
LABRADOR NOTES

4) Gepuela will lose nothing if he is not able to redeem, his act was nothing but an illegitimate act of
expansion;

5) Gepuela is conclusively estopped from claiming that he became a co-owner of the property because
he admitted otherwise. He claimed that he was a co-owner in the estate of Pedro Cruz and not in the
estate of Basilia;

6) Gepuela deceived the other heirs and co-owners by not informing the latter about the court
proceedings initiated by him; and

7) As instituted heirs of Basilia, Hernita et al. had every right to redeem the property for themselves
and their co-heirs.51

Hernita, et al. also challenge the jurisdiction of the CA claiming that since Gepuela did not present any
evidence in the trial court, he and his successors-in-interest can only raise pure questions of law, over which
the appellate court has no jurisdiction.52

The Issues

The main issues presented for our consideration in this case are (1) whether Gepuelas redemption of Basilias
36/72 pro indiviso share in the subject property was valid; and (2) whether Hernita et al. could still redeem
the 36/72 pro indiviso share. Before these issues can be resolved, however, we must determine whether the
issues raised herein are already barred under the principle of res judicata.

The Courts Ruling

We rule in favor of the heirs of Gepuela, petitioners in G.R. No. 173636.

Under the rule of res judicata, a final judgment or decree on the merits by a court of competent jurisdiction is
conclusive as to the rights of the parties or their privies in all later suits, and on all points and matters
determined in the former suit.53

In the case of Degayo v. Magbanua-Dinglasan, we held that:

Res judicata literally means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter
settled by judgment." It also refers to the "rule that a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on points and
matters determined in the former suit. It rests on the principle that parties should not to be permitted to
litigate the same issue more than once; that, when a right or fact has been judicially tried and determined by
a court of competent jurisdiction, or an opportunity for such trial has been given, the judgment of the court,
so long as it remains unreversed, should be conclusive upon the parties and those in privity with them in law
or estate.

This judicially created doctrine exists as an obvious rule of reason, justice, fairness, expediency, practical
necessity, and public tranquility. Moreover, public policy, judicial orderliness, economy of judicial time, and
the interest of litigants, as well as the peace and order of society, all require that stability should be accorded
judgments, that controversies once decided on their merits shall remain in repose, that inconsistent judicial
decision shall not be made on the same set of facts, and that there be an end to litigation which, without the
doctrine of res judicata, would be endless. (Citations omitted.)54

It is embodied in Section 47, Rule 39 of the Rules of Court which provides:

SEC. 47. Effect of judgments or final orders. The effect of a judgment or final order rendered by a court of
the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

(a) In case of a judgment or final order against a specific thing, or in respect to the probate of a will,
or the administration of the estate of a deceased person, or in respect to the personal, political, or
legal condition or status of a particular person or his relationship to another, the judgment or final
order is conclusive upon the title to the thing, the will or administration, or the condition, status or
relationship of the person; however, the probate of a will or granting of letters of administration shall
only be prima facie evidence of the death of the testator or intestate;

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to
any other matter that could have been raised in relation thereto, conclusive between the parties and
their successors in interest, by title subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the same capacity; and

COMPILED BY: Jo-Al Y. Gealon


Page 15 of 102
LABRADOR NOTES

(c) In any other litigation between the same parties or their successors in interest, that only is
deemed to have been adjudged in a former judgment or final order which appears upon its face to
have been so adjudged, or which was actually and necessarily included therein or necessary thereto.

There are two distinct concepts of res judicata: (1) bar by former judgment and (2) conclusiveness of
judgment:

The first aspect is the effect of a judgment as a bar to the prosecution of a second action upon the same
claim, demand or cause of action. In traditional terminology, this aspect is known as merger or bar; in modern
terminology, it is called claim preclusion.

The second aspect precludes the relitigation of a particular fact of issue in another action between the same
parties on a different claim or cause of action. This is traditionally known as collateral estoppel; in modern
terminology, it is called issue preclusion.

Conclusiveness of judgment finds application when a fact or question has been squarely put in issue, judicially
passed upon, and adjudged in a former suit by a court of competent jurisdiction. The fact or question settled
by final judgment or order binds the parties to that action (and persons in privity with them or their
successors-in-interest), and continues to bind them while the judgment or order remains standing and
unreversed by proper authority on a timely motion or petition; the conclusively settled fact or question
furthermore cannot again be litigated in any future or other action between the same parties or their privies
and successors-in-interest, in the same or in any other court of concurrent jurisdiction, either for the same or
for a different cause of action. Thus, only the identities of parties and issues are required for the operation of
the principle of conclusiveness of judgment.

While conclusiveness of judgment does not have the same barring effect as that of a bar by former
judgment that proscribes subsequent actions, the former nonetheless estops the parties from raising in a later
case the issues or points that were raised and controverted, and were determinative of the ruling in the earlier
case. In other words, the dictum laid down in the earlier final judgment or order becomes conclusive and
continues to be binding between the same parties, their privies and successors-ininterest, as long as the facts
on which that judgment was predicated continue to be the facts of the case or incident before the court in a
later case; the binding effect and enforceability of that earlier dictum can no longer be relitigated in a later
case since the issue has already been resolved and finally laid to rest in the earlier case. 55 (Citations omitted;
emphasis in the original)

The former concept of res judicata, that is, bar by prior judgment, applies in this case. The following requisites
must concur in order that a prior judgment may bar a subsequent action, viz: (1) the former judgment or
order must be final; (2) it must be a judgment or order on the merits, that is, it was rendered after a
consideration of the evidence or stipulations submitted by the parties at the trial of the case; (3) it must have
been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there must be,
between the first and second actions, identity of parties, of subject matter and of cause of action. 56

We find that all of the foregoing elements are present in this case.

There is no question that the Decision rendered in LRC Case No. R-3855 and affirmed by the CA in CA G.R. CV
No. 25605 had already become final for failure of the parties to appeal the same. The Decision was rendered
by the Regional Trial Court which had jurisdiction over the action (for consolidation of ownership filed by
Gepuela) and the parties thereto. It was a judgment on the merits, with the trial court rejecting the claims of
the oppositors and declaring Gepuela as the owner of the disputed one-half portion of the property covered by
TCT No. 95524.57

Furthermore, as between LRC Case No. R-3855 and Civil Case No. 65327 (the action for nullity of the
redemption filed by Hernita, et al.), there is identity of parties, of subject matter, and of causes of action.

Identity of subject matter, parties and causes of action

It is not disputed that both LRC Case No. R-3855 and Civil Case No. 65327 involved the same subject matter,
that is, the 36/72 pro indiviso share of Basilia in the land covered by TCT No. 95524.

LRC Case No. R-3855, on the one hand, was filed by Gepuela to consolidate his ownership over Basilias
one-half portion of the parcel of land covered by TCT No. 95524. Isagani, Perfecto, Jr., Pedrito, and Vito, all
registered co-owners of the whole property, appeared as oppositors. In Civil Case No. 65327, on the other
hand, Hernita, et al. sought to nullify the earlier redemption made by Gepuela over Basilias portion and
redeem the same for their own account as Basilias instituted heirs.

Thus, while there appears to be a lack of identity between the concerned parties and the causes of action
involved in the two actions, it must be recalled that absolute identity is not required for res judicata to apply;

COMPILED BY: Jo-Al Y. Gealon


Page 16 of 102
LABRADOR NOTES

substantial identity of parties and causes of actions is sufficient.58 The court articulated this principle in Cruz v.
Court of Appeals,59 to wit:

x x x Only substantial identity is necessary to warrant the application of res judicata. The addition or
elimination of some parties does not alter the situation. There is substantial identity of parties when
there is a community of interest between a party in the first case and a party in the second case
albeit the latter was not impleaded in the first case.

In the case at bar, it is apparent that from the face of the complaint for Quieting of Title, private respondent
Rolando Bunag was not a party therein as his name does not appear in the title. This, notwithstanding, his
claim and that of the plaintiffs therein, which included private respondent Mariano Bunag, are the sameto be
declared the true owners of the parcel of land covered by Original Certificate of Title (OCT) No. 22262 and
Transfer Certificate of Title (TCT) No. 67161 of the Registry of Deeds of Nueva Ecija. Private respondent
Rolando Bunag and the plaintiffs are all heirs of the alleged owners of the parcel of land covered
by OCT No. 22262. Private respondent Rolando Bunag, though not a party therein, shared an identity of
interest from which flowed an identity of relief sought, namely, to declare them the true owners of the parcel
of land covered by OCT No. 22262 and TCT No. 67161. Such identity of interest is sufficient to make
them privy-inlaw, thereby satisfying the requisite of substantial identity of parties.60 (Emphasis
supplied; citations omitted.)

In this case, Hernita, et al., though not a party to LRC Case No. R-3855, share an identity of interest with
Isagani, et al., in that they (1) are heirs of Basilia, the owner of the disputed 36/72 portion of the land
covered by TCT No. 95524, and (2) both sought to challenge the redemption made by Gepuela of the said
portion of property. Following the ruling in Cruz, both Hernita, et al. and Isagani, et al. can be considered to
share "an identity of interest from which flowed an identity of relief sought," 61 that is, to be eventually
declared owners of the portion being contested.

Similarly, we find that there is identity in the causes of action involved in LRC Case No. R-3855 and Civil Case
No. 65327. To reiterate, for the doctrine of res judicata to apply, identity of causes of action does not mean
absolute identity. Otherwise, a party could easily escape the operation of the doctrine by simply changing the
form of the action or the relief sought.62

In Benedicto v. Lacson,63 we held:

The test to determine identity of causes of action is to ascertain whether the same evidence necessary to
sustain the second cause of action is sufficient to authorize a recovery in the first, even if the forms or the
nature of the two (2) actions are different from each other. If the same facts or evidence would sustain
both, the two (2) actions are considered the same within the rule that the judgment in the former
is a bar to the subsequent action; otherwise, it is not. This method has been considered the most accurate
test as to whether a former judgment is a bar in subsequent proceedings between the same parties. It has
even been designated as infallible.64 (Emphasis supplied)

The allegations in Civil Case No. 65327 show that Hernita, et al. Are seeking exactly the same relief sought by
the oppositors in LRC Case No. R-3855, that is, the denial of the consolidation of Gepuelas ownership over
Basilias 36/72 pro indiviso share. In fact, the issues presented against Gepuelas redemption over the
disputed portion had already been thoroughly ventilated in LRC Case No. R-3855. Thus, although ostensibly
styled in different forms, the complaints in Civil Case No. 65327 and LRC Case No. R-3855 are really litigating
for the same thing and seeking the same relief, that is, to remove from Gepuela ownership over the disputed
36/72 portion.

In fact, Civil Case No. 65327 was filed specifically seeking to declare the nullity of Gepuelas redemption of the
one-half share previously owned by Basilia.65 This issue, however, has already been conclusively settled in
LRC Case No. R-3855, where the trial court upheld Gepuelas redemption of the share and declared him
absolute owner of the same.

Hernita, et al. are not indispensable parties to LRC Case No. R-3855; their non-participation does not affect
the validity of the decision rendered

Hernita, et al., in their comment to Gepuelas petition, argue that the doctrine of res judicata "does not at all
attach, because the judgment in LRC Case No. [R-3855] is not valid for lack of due process and in the absence
of indispensable parties."66 As indispensable parties who were not made part of the proceedings, Hernita, et
al. claim that they cannot be bound by the decision in LRC Case No. R-3855 or the appeal in CA-G.R. No.
25605.67

We reject this contention.

An indispensable party is defined as a party in interest without whom no final determination can be had of an
action.68 Hernita, et al. are voluntary heirs to ten percent of the free portion of Basilias estate.69 In fact, the
complaint filed by Hernita, et al. in Civil Case No. 65327 reads:

COMPILED BY: Jo-Al Y. Gealon


Page 17 of 102
LABRADOR NOTES

III. Causes of Action

3.1 As instituted heirs in the "Huling Habilin" of Basilia Austria Vda. [d]e Cruz, it is indubitable that
the plaintiffs are co-owners of the 36/72 pro-indiviso share of the estate of said decedent in the
property formerly covered by [TCT] No. 95524 and now covered by [TCT] No. 5033-R and they are legally
entitled to redeem the same pursuant to Article 1620 of the Civil Code[.]70 (Emphasis and underscoring
supplied)

Given their limited participation in the estate, this Court is at a loss as to how Hernita, et al. can be considered
indispensable parties for purposes of LRC Case No. R-3855, an action to consolidate Gepuelas title over the
property covered by TCT No. 95524. The claim all the more fails to persuade especially when one considers
that the estate itself, through its Administratrix, and all the other registered co-owners of aliquot portions of
the property (namely, Isagani, Perfecto Jr., Pedrito, Vito and Alberto Cruz) appear to have been properly
notified of and, in fact, actively participated in, the proceedings in LRC Case No. R-3855.

We further note from Hernita, et al.s comment that the decision in LRC Case No. R-3855 was subject of a
petition for annulment of judgment (docketed as CA G.R. SP No. 50424) filed by their mother Benita. 71 In that
case, Benita alleged nullity of the proceedings on grounds of extrinsic fraud, want of jurisdiction and denial of
due process. We take judicial notice,72 however, of the Decision rendered by the CA denying the petition for
lack of merit.73 The CAs finding was later on affirmed by this Court which denied with finality Benitas petition
for the annulment of the decision in LRC Case No. R-3855.74

In sum, inasmuch as both LRC Case No. R-3855 and Civil Case No. 65327 are anchored on the same cause of
action, based on identical facts, and even claim the same reliefs, we hold that the latter case is barred by the
decision in the former case. The CA therefore erred when, after declaring that the Decision in LRC Case No. R-
3855 had become final, executory and unappealable, it still modified the terms of the case and awarded
Hernita, et al. with portions of the property allegedly corresponding to their shares as instituted heirs of
Basilias estate.

Hernita, et al. cannot claim a stake over a specific property of the decedent.

Even assuming that res judicata would not bar Civil Case No. 65327, Hernita, et al.s claim of a right to
redeem Basilias disputed share would still not prosper.

First. As instituted heirs only to a part of the free portion of Basilias estate, Hernita, et al. are entitled to
receive their share of the same, if any, only after payment of all debts, funeral charges, expenses of
administration, allowance to the widow and inheritance tax.75 Otherwise stated, their share would be
dependent on whether anything is left of the estate after payment of all its obligations.

In this case, the disputed 36/72 pro indiviso share was sold at public auction to satisfy the judgment claim of
a creditor (Benita) of the estate.1wphi1 When it was redeemed by Gepuela, no further redemption was
made. Upon expiration of the periods to redeem, Gepuela became entitled, as a matter of right, to the
consolidation of the ownership of the share in his name. The share no longer formed part of the estate which
can theoretically be distributed to Hernita, et al. as Basilia's voluntary heirs.

Second, and more importantly, as voluntary heirs to the free portion, Hernita, et al. have no right to claim any
specific property of the estate, such as the contested 36/72 pro indiviso share in the property, until after the
estate had been settled and distributed in accordance with law.

WHEREFORE, premises considered, the Petition in G.R. No. 173636 is GRANTED. The assailed Decisions of
the CA affirming with modification the Regional Trial Court's Decision are SET ASIDE. The Petition in G.R. No.
173770 is DENIED for lack of merit.

SO ORDERED.

Arado v. Alcoran, 762 SCRA 37

G.R. No. 163362, July 08, 2015

ALEJANDRA ARADO HEIRS: JESUSA ARADO, VICTORIANO ALCORIZA, PEDRO ARADO, HEIRS:
JUDITHO ARADO, JENNIFER ARADO, BOBBIE ZITO ARADO, SHIRLY ABAD, ANTONIETA ARADO,
NELSON SOMOZA, JUVENIL ARADO, NICETAS VENTULA, AND NILA ARADO, PEDRO ARADO, TOMASA
V. ARADO, Petitioners, v. ANACLETO ALCORAN AND ELENETTE SUNJACO, Respondents.

COMPILED BY: Jo-Al Y. Gealon


Page 18 of 102
LABRADOR NOTES

DECISION

BERSAMIN, J.:

Under review on certiorari is the decision promulgated on February 28, 2003,1 whereby the Court of Appeals
(CA) affirmed the judgment rendered on January 15, 1997 by the Regional Trial Court, Branch 43, in
Dumaguete City (RTC)2 dismissing the complaint and the counterclaim for being without merit.

Antecedents

Raymundo Alcoran (Raymundo) was married to Joaquina Arado (Joaquina), and their marriage produced a son
named Nicolas Alcoran (Nicolas).3 In turn, Nicolas married Florencia Limpahan (Florencia)4 but their union had
no offspring. During their marriage, however, Nicolas had an extramarital affair with Francisca Sarita
(Francisca), who gave birth to respondent Anacleto Alcoran (Anacleto) on July 13, 1951 5 during the
subsistence of Nicolas' marriage to Florencia.6 In 1972, Anacleto married Elenette Sonjaco.7redarclaw

Raymundo died in 1939, while Nicolas died m 1954. Likewise, Florencia died in 1960, and Joaquina in
1981.8redarclaw

Florencia had three siblings, namely: Sulpicio, Braulia and Veronica Limpahan. 9 Joaquina had four
siblings, i.e., Alejandra, Nemesio, Celedonia and Melania, all surnamed Arado.10 Nemesio had six children,
namely: (1) Jesusa, who was married to Victoriano Alcoriza; (2) Pedro, who was married to Tomasa Arado;
(3) Teodorico; (4) Josefina; (5) Gliceria;11 and (6) Felicisima.12 During the pendency of the case, Pedro died,
and was substituted by his following heirs, to wit: (1) Juditho and his spouse, Jennifer Ebrole; (2) Bobbie Zito
and his spouse, Shirly Abad; (3) Juvenil and his spouse, Nicetas Ventula; (4) Antonieta and her spouse,
Nelson Somoza; and (5) Nila.

On January 14, 1992, Alejandra, Jesusa, Victoriano Alcoriza, Pedro and Tomasa filed in the RTC a complaint
for recovery of property and damages (with application for a writ of preliminary mandatory injunction) against
Anacleto and Elenette.13 Named as unwilling co-plaintiffs were Sulpicio, Braulia and Veronica Limpahan, along
with Teodorico, Josefina, Gliceria and Felicisima.

The properties subject of the action were the following: (1) Lot No. 4100, covered by Original Certificate of
Title (OCT) No. OV-1379; (2) Lot No. 4054, covered by OCT No. OV-1380; (3) a parcel of land covered by Tax
Declaration No. 6065; (4) a parcel of land covered by Tax Declaration No. 20470; (5) a parcel of land covered
by Tax Declaration No. 11-028-A; (6) Lot No. 709 covered by OCT No. OV-7784; (7) a parcel of land covered
by Tax Declaration No. 87-011-215-A; (8) a parcel of land covered by Tax Declaration No. 87-011-217; (9)
Lot No. 5234 covered by OCT No. 3489-A; and (10) Lot No. 5224 covered by Tax Declaration No. 8-201.14 The
parties later stipulated that the first eight of the subject properties had previously belonged to Raymundo,
while the last two had been the paraphernal properties of Joaquina. 15redarclaw

The plaintiffs alleged in their complaint that when Raymundo died in 1939, his properties were inherited by his
son Nicolas alone "as it was during the period of the old Civil Code, where the spouse could not inherit but
only a share of the usufruct, which was extinguished upon the death of the usufructuary;" 16that when Nicolas
died in 1954 without issue, half of his properties were inherited by his wife, Florencia, and the other half by
his mother, Joaquina; that Florencia was, in turn, succeeded by her siblings Sulpicio, Braulia and Veronica;
that during the marriage of Nicolas and Florencia, the former had an affair with Francisca, from which affair
Anacleto was born, but it was unknown whether he was the spurious son of Nicolas; that Nicolas did not
recognize Anacleto as his spurious child during Nicolas' lifetime; hence, Anacleto was not entitled to inherit
from Nicolas; that nonetheless, Anacleto claimed entitlement to the properties as the heir of Nicolas and by
virtue of the will executed by Joaquina; that the will was void for not having been executed according to the
formalities of the law, and the same did not reflect the true intention of Joaquina; that the supposed testator
did not acknowledge the will, which was not submitted for probate; that they were the rightful heirs to the
properties; that notwithstanding their repeated demands for the return of the properties, the defendants
persistently refused; that a writ of preliminary mandatory injunction should issue to prevent the defendants
from further violating their rights in the properties; and that the defendants should be ordered to reconvey the
properties, and to pay; P20,000.00 as actual damages; P20,000.00 as moral and exemplary damages, and
P20,000.00 as attorney's fees.17redarclaw

In their answer,18 the defendants (respondents herein) countered that Anacleto was expressly recognized by
Nicolas as the latter's son, a fact evidenced by the certificate of birth of Anacleto; that Anacleto thus had the
right to inherit the properties from Nicolas; that because Anacleto was still too young when Nicolas died, the
administration of the properties passed to Anacleto's grandmother, Joaquina; that Joaquina executed a last
will and testament in Anacleto's favor; that Joaquina's possession of the properties was for and in behalf of
Anacleto, who had been living with her since his birth; that such possession began in 1954 when Nicolas died
and continued until Joaquina's death in 1981; that Anacleto then took over the possession of the properties to
the exclusion of all others; that granting for the sake of argument that the plaintiffs had rights in the
properties, the same were already lost through laches, estoppel and prescription; and that Anacleto was the
rightful owner of the properties, and his ownership and possession should not be disturbed.

By way of counterclaim, the defendants prayed that the plaintiffs be ordered to pay 50,000.00 as moral

COMPILED BY: Jo-Al Y. Gealon


Page 19 of 102
LABRADOR NOTES

damages, 1,000.00 "as initial expenses as costs of this litigation which will increase as the case
progresses"19 and 10,000.00 as attorney's fees.

Veronica Limpahan and Sulpicio Limpahan likewise filed their answer 20 to the complaint, stating that they were
not interested in pursuing any claim of ownership in the properties; that assuming that they were entitled,
they were abandoning their rights, interests, title and participation in the properties; and that they be
excluded from further court processes.

Judgrnent of the RTC

On January 15, 1997, the RTC rendered judgment, decreeing thusly:LawlibraryofCRAlaw


ChanRoblesVirtualawlibrary
Wherefore, premises considered, judgment is hereby rendered dismissing the complaint and the counterclaim
for lack of merit.

Costs against the plaintiffs.

SO ORDERED.21
The RTC opined that Anacleto established that he was really the acknowledged illegitimate son of Nicolas. It
cited the certificate of birth of Anacleto (Exhibit 4) and Page 53, Book 4, Register No. 214 of the Register of
Births of the Municipality of Bacong (Exhibit 3), which proved that Nicolas had himself caused the registration
of Anacleto's birth by providing the details thereof and indicating that he was the father of Anacleto. It
observed that the name of Nicolas appeared under the column "Remarks" in the register of births, which was
the space provided for the name of the informant; that because the plaintiffs did not present evidence to
refute the entry in the register of births, the entry became conclusive with respect to the facts contained
therein; that Anacleto's claim of recognition was bolstered by his baptismal certificate (Exhibit F), in which
was indicated that his parents were Nicolas Alcoran and Francisca Sarita; that also presented was a picture
taken during the wake of Nicolas (Exhibit 5) showing the young Anacleto being carried by Joaquina, and also
Nicolas' wife, Florencia; that in addition, the school records of Anacleto (Exhibit 6) showed that Joaquina stood
as his guardian during his grade school years; that when Anacleto got married, it was Joaquina who gave
consent to his marriage because he was then still a minor (Exhibit 8); and that Joaquina executed her will in
1978 (Exhibit 9), bequeathing the subject properties to Anacleto, but the will was yet to be probated.

As the case was filed during the effectivity of the Family Code, the RTC ruled that Articles 172,22 17323and
17524 of the Family Code allowed Anacleto to establish his filiation during his lifetime through the record of his
birth appearing in the civil register. It further ruled that because there were no legitimate children of Nicolas
who contested Anacleto's right to inherit, the rule on the separation of the legitimate from the illegitimate
family was rendered irrelevant; and that, accordingly, Anacleto was entitled to possess the subject properties
upon having established that he was the acknowledged illegitimate son of Nicolas. Consequently, it also
dismissed the defendants' counterclaim for lack of sufficient basis.

The plaintiffs appealed to the CA.25redarclaw

Decision of the CA

On February 28, 2003, the CA promulgated its decision,26 affirming the judgment of the RTC in this
wise:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED. Accordingly, the Decision of the
Regional Trial Court of Dumaguete City, Branch 43 stands.
The CA sustained the ruling of the RTC to the effect that Anacleto was an acknowledged illegitimate son of
Nicolas. It agreed that the Register of Births of the Municipality of Bacong, Negros Oriental showed that
Nicolas was the father of Anacleto, and that the former had supplied the information on the latter's birth. It
declared that the plaintiffs did not rebut the filiation of Anacleto by contrary evidence; that the baptismal
certificate of Anacleto and the picture taken during the wake of Nicolas further showed that Anacleto had been
acknowledged by Nicolas; that based on the Articles 172, 173 and 175 of the Family Code, the law applicable
at the time of the filing of the case, Anacleto's filiation was established by the record of his birth appearing in
the civil register; and that Anacleto possessed rights in the subject properties.

Anent the successional rights of the parties, the CA pronounced that after Raymundo died in 1939, his wife,
Joaquina, and his son, Nicolas, inherited his properties; that when Nicolas died in 1954, he was survived by
Joaquina (his mother), Florencia (his legitimate wife), and Anacleto (his illegitimate son); that Joaquina was
entitled to one-half of Nicolas' estate, and the remaining half should be divided between Florencia and
Anacleto; that in 1960, when Florencia died without issue, the share she had inherited from Nicolas was
inherited by her siblings Sulpicio, Braulia and Veronica; and that when Joaquina died in 1981, she was
survived by her sibling Alejandra; her nieces Jesusa,27 Josefina, Gliceria and Felicisima; her nephews Pedro
and Teodorico; and her illegitimate grandson, Anacleto.

The CA declared that the plaintiffs were already barred from asserting their rights in the properties by
estoppel by laches; that Joaquina had executed her last will and testament on April 19, 1978, whereby she
bequeathed her properties to Anacleto; that the properties were thus transmitted to Anacleto upon her death
in 1981; that the plaintiffs filed their complairtt in the RTC only on January 14, 1992; that it would be unjust

COMPILED BY: Jo-Al Y. Gealon


Page 20 of 102
LABRADOR NOTES

to award the subject properties to the plaintiffs who had slept on their rights for a long time; and that the
plaintiffs could probably pursue their claim in the appropriate intestate or testate proceedings.

The plaintiffs filed a Motion for Reconsideration,28 but the CA denied their motion on March 24, 2004.

Issues

In this appeal, the plaintiffs, herein petitioners,29 implore the Court to nullify the assailed rulings of the CA,
and to determine once and for all the following issues:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
(a) Whether Anacleto Alcoran is the illegitimate son of Nicolas Alcoran x x x; and

(b) Whether he is entitled to the properties in litigation.30


The petitioners insist that Anacleto was not duly recognized as Nicolas' illegitimate son; that inasmuch as
Anacleto was born to Francisca during the subsistence of Nicolas' marriage to Florencia, Anacleto could only be
the spurious child of Nicolas; that there was no law for the acknowledgment of a spurious child; that even if
Anacleto would be given the benefit of the doubt and be considered a natural child. Article 278 of the Civil
Code states that "[r]ecognition shall be made in the record of birth, a will, a statement before a court of
record, or in any authentic writing;" that the appearance of the father's name in the certificate of birth alone,
without his actual intervention, was insufficient to prove paternity; that the mere certificate by the civil
registrar that the father himself registered the child, without the father's signature, was not proof of the
father's voluntary acknowledgment; that the baptismal certificate was insufficient proof of paternity; and that
if there was ground for Anacleto's recognition, the period to claim recognition already prescribed.

The petitioners reject the claim of Anacleto that Joaquina bequeathed the subject properties to him by last will
and testament. They assail the validity and due execution of the will, which was not submitted for probate;
that the joint affidavit allegedly executed in favor of Anacleto by Sulpicio, Braulia and Veronica Limpahan, with
Josefina, Gliceria and Felicisima Arado, whereby they ceded their rights in the subject properties in favor of
Anacleto, was unwarranted; and that the veracity of the affidavit was doubtful because it was purportedly
inconsistent with Anacleto's stance that he had inherited the properties in his own right.

In tum, the defendants, herein respondents, counter that Nicolas recognized Anacleto as his illegitimate child
because Nicolas had himself caused the registration of Anacleto's birth; that the petitioners' allegation of
prescription lacked basis inasmuch as Anacleto was not seeking compulsory recognition; and that Anacleto
had already been voluntarily recognized by Nicolas as his illegitimate son.

Ruling of the Court

We affirm the dismissal of the petitioners' complaint by the RTC, albeit for different reasons.

The complaint filed by the petitioners in the RTC to recover the subject properties is properly characterized as
an accion reivindicatoria. According to Caezo v. Bautista,31 an "[a]ccion reivindicatoriaseeks the recovery of
ownership and includes the jus utendi and the jus fruendi brought in the proper regional trial court. Accion
reivindicatoria is an action whereby plaintiff alleges ownership over a parcel of land and seeks recovery of its
full possession." In essence, the petitioners seek to put an end to Anacleto's possession of the properties on
the basis of their being the rightful heirs considering that Anacleto, being the spurious child of Nicolas, held no
successional rights in the estate of Nicolas.

The burden of proof to establish the averments of the complaint by preponderance of evidence pertained to
the petitioners as the plaintiffs. In that regard, we have discoursed on preponderance of evidence in Amoroso
v. Alegre, Jr.,32 thusly:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
"Preponderance of evidence" is the weight, credit, and value of the aggregate evidence on either side and is
usually considered to be synonymous with the term "greater weight of the evidence" or "greater weight of the
credible evidence." Preponderance of evidence is a phrase which, in the last analysis, means
probability of the truth. It is evidence which is more convincing to the court as worthy of belief
than that which is offered in opposition thereto. If plaintiff claims a right granted or created by
law, he must prove his claim by competent evidence. He must rely on the strength of his own
evidence and not upon the weakness of that of his opponent. (Bold underscoring for emphasis)
The petitioners did not discharge their burden of proof.

At the outset, the Court affirms the holding by the RTC and the CA that the provisions of the Family
Code33 should apply because the petitioners' complaint was filed, litigated and decided by the RTC during the
effectivity of the Family Code. Under the Family Code, the classification of children is limited to either
legitimate or illegitimate.34 Illegitimate filiation is proved in accordance with Article 175 of the Family Code, to
wit:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
ART. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same
evidence as legitimate children.

The action must be brought within the same period specified in Article 173, except when the action is based

COMPILED BY: Jo-Al Y. Gealon


Page 21 of 102
LABRADOR NOTES

on the second paragraph of Article I72, in which case the action may be brought during the lifetime of the
alleged parent.
On the other hand, legitimate filiation is established m accordance with Articles 172 and 173 of the Family
Code, which state:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
ART. 172. The filiation of legitimate children is established by any of the following:LawlibraryofCRAlaw

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by
the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:LawlibraryofCRAlaw

(1) The open and continuous possession of the status of a legitimate child; or laws.

(2) Any other means allowed by the Rules of Court and special

ART. 173. The action to claim legitimacy may be brought by the child during his or her lifetime and shall be
transmitted to the heirs should the child die during minority or in a state of insanity. In these cases, the heirs
shall have a period of five years within which to institute the action.

The action already commenced by the child shall survive notwithstanding the death of either or both of the
parties.
Rightly enough, the RTC and the CA unanimously concluded that Nicolas had duly acknowledged Anacleto as
his illegitimate son. The birth certificate of Anacleto appearing in the Register of Births of the Municipality of
Bacong, Negros Oriental (Exhibits 3, 3-A) showed that Nicolas had himself caused the registration of the birth
of Anacleto. The showing was by means of the name of Nicolas appearing in the column "Remarks" in Page
53, Book 4, Register No. 214 of the Register of Births. Based on the certification (Exhibit 3-B) issued by the
Local Civil Registrar of the Municipality of Bacong, Negros Oriental, the column in the Register of Births
entitled "Remarks" (Observaciones) was the space provided for the name of the informant of the live birth to
be registered. Considering that Nicolas, the putative father, had a direct hand in the preparation of the birth
certificate, reliance on the birth certificate of Anacleto as evidence of his paternity was fully
warranted.35redarclaw

Anacleto's baptismal certificate (Exhibit 7) was of no consequence in determining his filiation. We have already
held in Cabatania v. Court of Appeals36 that "while a baptismal certificate may be considered a public
document, it can only serve as evidence of the administration of the sacrament on the date specified but not
the veracity of the entries with respect to the child's paternity;" and that baptismal certificates were "per
se inadmissible in evidence as proof of filiation," and thus "cannot be admitted indirectly as circumstantial
evidence to prove [filiation]." Hence, we attach no probative value to the baptismal certificate as proof of the
filiation of Anacleto.

The weight accorded by the RTC and the CA to the picture depicting the young Anacleto in the arms of
Joaquina as she stood beside the coffin of the departed Nicolas (Exhibit 5) was also undeserved. At best, the
picture merely manifested that it was Joaquina who had acknowledged her filiation with Anacleto. Cautioning
against the admission in evidence of a picture of similar nature, we have pointed out in Solinap v. Locsin,
Jr.37 that:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
[R]espondent's photograph with his mother near the coffin of the late Juan C. Locsin cannot and will not
constitute proof of filiation, lest we recklessly set a very dangerous precedent that would encourage and
sanction fraudulent claims. Anybody can have a picture taken while standing before a coffin with others and
thereafter utilize it in claiming the estate of the deceased.
The school records of Anacleto (Exhibit 6), which evinced that Joaquina was the guardian of Anacleto in his
grade school years, and the marriage contract between Anacleto and Elenette (Exhibits 8 to 8-C), which
indicated that Joaquina had given consent to Anacleto's marriage, did not have the evidentiary value accorded
by the RTC and the CA. Joaquina's apparent recognition of Anacleto mattered little, for, as we stressed
in Cenido v. Apacionado,38 the recognition "must be made personally by the parent himself or herself, not by
any brother, sister or relative; after all, the concept of recognition speaks of a voluntary declaration by
the parent, of if the parent refuses, by judicial authority, to establish the paternity or maternity of children
born outside wedlock."

The lack of probative value of the respondents' aforecited corroborative evidence notwithstanding, Anacleto's
recognition as Nicolas' illegitimate child remained beyond question in view of the showing that Nicolas had
personally and directly acknowledged Anacleto as his illegitimate son.

How should the acknowledgment of Anacleto by Nicolas affect the respective rights of the parties in relation to
the specific properties subject of the complaint?

To recall, the parties stipulated that the first eight of the subject properties had previously belonged to
Raymundo, while the remaining two had been the paraphernal properties of Joaquina.

COMPILED BY: Jo-Al Y. Gealon


Page 22 of 102
LABRADOR NOTES

With Raymundo having died in 1939, the Spanish Civil Code of 1889 was the governing law on succession.
Under Article 807 thereof,39 Joaquina and Nicolas, i.e., the surviving spouse and the legitimate son of
Raymundo, were the forced heirs who acquired legal title to Raymundo's estate upon his death. In accordance
with Article 834 thereof,40 Nicolas was entitled to inherit the entire estate of Raymundo, while Joaquina was
entitled to a portion in usufruct equal to the one third portion available for betterment.

When Nicolas died in 1954, the Civil Code of the Philippines was already in effect.41 Under Article 1000
thereof,42 the heirs entitled to inherit from Nicolas's estate were Joaquina (his mother), Florencia (his
surviving spouse), and Anacleto (his acknowledged illegitimate son). Said heirs became co-owners of the
properties comprising the entire estate of Nicolas prior to the estate's partition in accordance with Article
107843 of the Civil Code.

Anacleto had an established right to inherit from Nicolas, whose estate included the first eight of the subject
properties that had previously belonged to Raymundo. Anacleto became a co-owner of said properties, pro
indiviso, when Nicolas died in 1954.44 Likewise, Joaquina succeeded to, and became a pro indiviso co-owner
of, the properties that formed part of the estate of Nicolas. When Joaquina died in 1981, her hereditary estate
included the two remaining properties, as well as her share in the estate of Nicolas. In as much as Joaquina
died without any surviving legitimate descendant, ascendant, illegitimate child or spouse, Article 1003 45 of
the Civil Code mandated that her collateral relatives should inherit her entire estate.

Contrary to the rulings of the lower courts, Anacleto was barred by law from inheriting from the estate of
Joaquina. To start with, Anacleto could not inherit from Joaquina by right of representation of Nicolas, the
legitimate son of Joaquina.46 Under Article 992 of the Civil Code, an illegitimate child has no right to inherit ab
intestato from the legitimate children and relatives of his father or mother; in the same manner, such children
or relatives shall not inherit from the illegitimate child. As certified in Diaz v. Intermediate Appellate
Court,47 the right of representation is not available to illegitimate descendants of legitimate children in the
inheritance of a legitimate grandparent. And, secondly, Anacleto could not inherit from the estate of Joaquina
by virtue of the latter's last will and testament, i.e., the Katapusan Tugon (Testamento) (Exhibit K). Article
838 of the Civil Code dictates that no will shall pass either real or personal property unless the same is proved
and allowed in accordance with the Rules of Court. We have clarified in Gallanosa v. Arcangel48 that in order
that a will may take effect, "it has to be probated, legalized or allowed in the proper testamentary proceeding.
The probate of the will is mandatory." It appears that such will remained ineffective considering that the
records are silent as to whether it had ever been presented for probate, and had been allowed by a court of
competent jurisdiction. The petitioners alleged this fact in their complaint, and the respondents did not
controvert the allegation. In the absence of proof showing that the supposed will of Joaquina had been duly
approved by the competent court, we hold that it had not been so approved. Hence, we cannot sustain the
CA's ruling to the effect that Joaquina had bequeathed her properties to Anacleto by will, and that the
properties had been transmitted to him upon her death.

As the petitioners were among the collateral relatives of Joaquina, they are the ones entitled to inherit from
her estate.

Nonetheless, the petitioners' appeal still fails because the parties did not establish that the estates of
Raymundo, Nicolas and Joaquina had been respectively settled with finality through the appropriate testate or
intestate proceedings, and partitioned in due course. Unless there was a proper and valid partition of the
assets of the respective estates of Raymundo, Nicolas and Joaquina, whether extrajudicially or judicially, their
heirs could not adjudicate unto themselves and claim specific portions of their estates, because, as we have
declared in Carvajal v. Court of Appeals:49
ChanRoblesVirtualawlibrary
x x x Unless a project of partition is effected, each heir cannot claim ownership over a definite portion of the
inheritance. Without partition, either by agreement between the parties or by judicial proceeding, a co-heir
cannot dispose of a specific portion of the estate. For where there are two or more heirs, the whole estate of
the decedent is, before its partition, owned in common by such heirs. Upon the death of a person, each of his
heirs becomes the undivided owner of the whole estate left with respect to the part or portion which might be
adjudicated to him, a community of ownership being thus formed among the co-owners of the estate or co-
heirs while it remains undivided.
Without the showing that the respective estates of Raymundo, Nicolas and Joaquina had been previously
partitioned, the Court concludes and holds that none of the parties herein can lay claim over any of the
disputed specific properties. The petitioners cannot contend, therefore, that they were the rightful owners of
the properties of the late Joaquina to the exclusion of Anacleto. Thus, we uphold the dismissal of the
petitioners' complaint for recovery of such properties.

WHEREFORE, the Court AFFIRMS the decision promulgated on February 28, 2003 by the Court of Appeals;
and ORDERS the petitioners to pay the costs of suit.

SO ORDERED.cralawlawlibrary

COMPILED BY: Jo-Al Y. Gealon


Page 23 of 102
LABRADOR NOTES

Planters Development Bank v. Lopez, G.R. No. 186332, October 23, 2013

G.R. No. 186332 October 23, 2013

PLANTERS DEVELOPMENT BANK, Petitioner,


vs.
SPOUSES ERNESTO LOPEZ and FLORENTINA LOPEZ substituted by JOSEPH WILFRED JOVEN
JOSEPH GILBERT JOVEN and MARLYN JOVEN, Respondents.

DECISION

BRION, J.:

We resolve the petition for review on certiorari1 filed by petitioner Planters Development Bank Planters Bank)
to challenge the July 30, 2007 amended decision2 and the February 5, 2009 resolution3 of the Court of
Appeals CA) in CA-G.R. CV No. 61358.

The Factual Antecedents

Sometime in 1983, the spouses Emesto and Florentina Lopez applied for and obtained a real estate loan in the
amount of 3,000,000.00 from Planters Bank. The loan was intended to finance the construction of a four-story
concrete dormitory building. The loan agreement 4 dated May 18, 1983 provided that the loan is payable for
fourteen (14) years and shall bear a monetary interest at twenty-one percent (21%) per annum (p.a.).
Furthermore, partial drawdowns on the loan shall be based on project completion, and shall be allowed upon
submission of job accomplishment reports by the project engineer. To secure the payment of the loan, the
spouses Lopez mortgaged a parcel of land covered by Transfer Certificate of Title No. T-16233.5

On July 21, 1983, the parties signed an amendment to the loan agreement. Accordingly, the interest rate was
increased to twenty-three percent (23%) p.a. and the term of the loan was shortened to three years. 6 On
March 9, 1984, the parties executed a second amendment to the loan agreement. The interest rate was
further increased to twenty-five percent (25%) p.a. The contract also provided that releases on the loan shall
be subject to Planters Banks availability of funds.7

Meanwhile, the Philippine economy deteriorated as the political developments in the country worsened. The
value of the peso plunged. The price of the materials and the cost of labor escalated.8 Eager to finish the
project, the spouses Lopez obtained an additional loan in the amount of 1,200,000.00 from Planters Bank.

On April 25, 1984, they entered into a third amendment to the loan agreement. The amount of the loan and
the interest rate were increased to 4,200,000.00 and twenty-seven percent (27%) p.a., respectively.
Furthermore, the term of the loan was shortened to one year. The contract also provided that the remaining
loan shall only be available to the spouses Lopez until June 30, 1984. 9 On the same date, the spouses Lopez
increased the amount secured by the mortgage to 4,200,000.00. 10 On August 15, 1984, Planters Bank
unilaterally increased the interest rate to thirty-two percent (32%) p.a.11

The spouses Lopez failed to avail the full amount of the loan because Planters Bank refused to release the
remaining amount of 700,000.00. On October 13, 1984, the spouses Lopez filed against Planters Bank
complaint for rescission of the loan agreements and for damages with the Regional Trial Court (RTC) of Makati
City.12 They alleged that they could not continue the construction of the dormitory building because Planters
Bank had refused to release the remaining loan balance.

In defense, Planters Bank argued that the spouses Lopez had no cause of action. It pointed out that its refusal
to release the loan was the result of the spouses Lopezs violations of the loan agreement, namely: (1) non-
submission of the accomplishment reports; and (2) construction of a six-story building. As a counterclaim,
Planters Bank prayed for the payment of the overdue released loan in the amount of 3,500,000.00, with
interest and damages.13

On November 16, 1984, Planters Bank foreclosed the mortgaged properties in favor of third parties after the
spouses Lopez defaulted on their loan.14

The RTC Ruling

In a decision15 dated August 18, 1997, the RTC ruled in Planters Banks favor. It held that the spouses Lopez
had no right to rescind the loan agreements because they were not the injured parties. It maintained that the
spouses Lopez violated the loan agreement by failing to submit accomplishment reports and by deviating from
the construction project plans. It further declared that rescission could not be carried out because the
mortgaged properties had already been sold in favor of third parties. The dispositive portion of the RTC
decision provides:

COMPILED BY: Jo-Al Y. Gealon


Page 24 of 102
LABRADOR NOTES

IN VIEW OF THE FOREGOING, judgment is hereby rendered ordering the plaintiffs to pay the defendant-bank
the amount of Three Million Five Hundred Thousand Pesos (3,500,000.00) plus the 27% stipulated interest
per annum commencing on June 22, 1994 until fully paid minus the proceeds of the foreclosed mortgaged
property in the auction sale.16 (emphasis ours) Subsequently, the RTC amended 17 its decision, upon Planters
Banks filing of a Motion for Partial Reconsideration and/or Amendment of the Decision dated August 18,
1997.18 It clarified that the interest rate shall commence on June 22, 1984, as proven during trial, thus:

IN VIEW OF THE FOREGOING, judgment is hereby rendered ordering the plaintiffs to pay the defendant-bank
the amount of Three Million Five Hundred Thousand Pesos (3,500,000.00) plus the 27% stipulated interest
per annum commencing on June 22, 1984 until fully paid minus the proceeds of the foreclosed mortgaged
property in the auction sale.19 (emphasis ours)

CA Ruling

The spouses Lopez died during the pendency of the case. On appeal to the CA, compulsory heirs Joseph
Wilfred, Joseph Gilbert and Marlyn, all surnamed Joven20 (respondents) substituted for the deceased
Florentina Lopez.

On November 27, 2006, the CA reversed the RTC ruling. 21 It held that Planters Banks refusal to release the
loan was a substantial breach of the contract. It found that the spouses Lopez submitted accomplishment
reports. It gave weight to Engineer Edgard Fianzas testimony that he prepared accomplishment reports prior
to the release of the funds. Moreover, Planters Banks appraisal department head, Renato Marayag, testified
that accomplishment reports were a prerequisite for the release of the loan.

It also declared that Planters Bank was estopped from raising the issue of the spouses Lopezs deviation from
the construction project. Planters Bank conducted several ocular inspections of the building from 1983 to
1987. Planters Bank continuously released partial amounts of the loan despite its knowledge of the
construction of a six-story building.

It further concluded that Planters Bank did not release the loan because the Development Bank of the
Philippines (DBP) lacked funds. Ma. Agnes Jopson Angeles, Planters Banks senior accountant for the
marketing group, testified that Planters Banks source of funds in real estate loans was DBP. According to the
CA, Angeles admitted DBPs non-availability of funds in her testimony. The dispositive ruling of the CA decision
provides:

WHEREFORE, the appealed Decision is MODIFIED in that the loan interest to be paid by plaintiff-appellant to
defendant-appellee is hereby reduced to 12% per annum computed from finality of this Decision until full
payment of the amount of 3.5 million, minus the proceeds of auction sale of the foreclosed mortgaged
property.22

Subsequently, the respondents filed a motion for reconsideration. They sought clarification of the dispositive
portion which does not declare the rescission of the loan and accessory contracts. On the other hand, Planters
Bank filed a Comment on March 2, 2007, praying for the reinstatement of the RTC ruling. The CA re-examined
the case and treated the comment as a motion for reconsideration. It affirmed its previous decision but
modified the dispositive portion, thus:

ACCORDINGLY, defendant-appellees motion for reconsideration is DENIED while plaintiffs-appellants motion


for reconsideration is PARTLY GRANTED. The dispositive part of Our Decision dated November 27, 2006 is
hereby clarified and corrected to read as follows:

WHEREFORE, the appealed Decision is REVERSED and SET ASIDE. The loan agreement between the parties,
including all its accessory contracts, is declared RESCINDED.

Plaintiffs-appellants are ordered to return to defendant-appellee bank the amount of 2,885,830.56 with
interest of twelve percent (12%) per annum from the time this Decision becomes final and executory until it is
fully paid.

Defendant-appellee bank is ordered to convey and restore to plaintiffs-appellants the foreclosed


property.23(emphases and underscores supplied)

The CA also denied Planters Banks Motion for Reconsideration dated August 22, 2007, prompting it to file the
present petition.

The Petitioners Position

Planters Bank reiterates in its petition before this Court that the respondents had no cause of action. It posits
that the spouses Lopez violated the loan agreements for their failure to submit accomplishment reports and by
constructing a six-story building instead of a four-story building. It maintains that there was no estoppel

COMPILED BY: Jo-Al Y. Gealon


Page 25 of 102
LABRADOR NOTES

because only one year and twenty days have elapsed from the violation of the contract until the spouses
Lopezs filing of the complaint. It argues that there must be an unjustifiable neglect for an unreasonable
period of time for estoppel to apply. It also avers that even assuming that it breached the contract, it was only
a slight breach because only 700,000.00 of the 4,200,000.00 loan was not released. Moreover, it highlights
that it cannot convey the foreclosed properties because they were already sold to third parties. 24

Planters Bank also clarifies its date of receipt of the CA amended decision in a Manifestation dated March 13,
2009.25 It states that it received the amended decision on August 7, 2007, as evidenced by the attached
certifications from the Makati and Manila Central Post Offices.

The Respondents Position

In their Comments,26 the respondents reiterate the CAs arguments. They also assert that the amended
decision has already become final and executory due to Planters Banks belated filing of a motion for
reconsideration on August 22, 2007. They point out that Planters Bank unequivocably stated in the pleadings
that it received a copy of the amended decision on August 2, 2007. Furthermore, they aver that Planters
Banks motion for reconsideration is a second motion for reconsideration disallowed by the Rules of Court.
They highlight that Planters Banks comment to the respondents motion for reconsideration sought the
reinstatement of the RTC ruling. Consequently, the comment is Planters Banks first motion for
reconsideration.

The Issues

This case presents to us the following issues:

1) Whether the CAs amended decision dated July 30, 2007 is final and executory;

2) Whether the spouses Lopez violated the loan agreement;

a) Whether the spouses Lopez submitted accomplishment reports, and

b) Whether the spouses Lopez deviated from the construction project;

3) Whether Planters Bank substantially breached the loan agreement; and

4) Whether the amount of awards rendered by the CA is proper.

The Courts Ruling

We reverse the CAs decision.

The CAs amended decision dated July 30, 2007 is not yet final and executory

Section 13, Rule 13 of the Rules of Court provides that if service is made by registered mail, proof shall be
made by an affidavit of the person mailing of facts showing compliance with Section 7, Rule 13 of the Rules of
Court and the registry receipt issued by the mailing office. However, the presentation of an affidavit and a
registry receipt is not indispensable in proving service by registered mail. Other competent evidence, such as
the certifications from the Philippine Post Office, may establish the fact and date of actual service. These
certifications are direct and primary pieces of evidence of completion of service. 27

We believe Planters Banks assertion that its motion for reconsideration dated August 22, 2007 was filed on
time. The Manila Central Post Offices certification states that the amended decision was only dispatched from
the Manila Central Post Office to the Makati Central Post Office on August 2, 2007. 28 On the other hand, the
Makati Central Post Offices certification provides that Planters Banks actual receipt of the decision was on
August 7, 2007.29These certifications conclusively show that Planters Banks counsel received the amended
decision on August 7, 2007 and not on August 2, 2007.

There is also no merit to the respondents argument that Planters Banks motion for reconsideration is
disallowed under Section 2, Rule 52 of the Rules of Court.30 We point out in this respect that there is a
difference between an amended judgment and a supplemental judgment. In an amended judgment, the lower
court makes a thorough study of the original judgment and renders the amended and clarified judgment only
after considering all the factual and legal issues. The amended and clarified decision is an entirely new
decision which supersedes or takes the place of the original decision. On the other hand, a supplemental
decision does not take the place of the original; it only serves to add to the original decision. 31

COMPILED BY: Jo-Al Y. Gealon


Page 26 of 102
LABRADOR NOTES

In the present case, the CA promulgated an amended decision because it re-examined its factual and legal
findings in its original decision. Thus, Planters Bank may file a motion for reconsideration. The amended
decision is an entirely new decision which replaced the CAs decision dated November 27, 2006.

In sum, the amended decision is not yet final and executory because Planters Bank filed a motion for
reconsideration on time; its filing is allowed by the Rules of Court.

The spouses Lopez submitted accomplishment reports

We see no reason to disturb the CAs finding that the spouses Lopez religiously submitted accomplishment
reports. The evidence on record32 shows that Engr. Fianza submitted accomplishment reports from November
19, 1983 until June 9, 1984. Engr. Fianza also testified that he prepared these accomplishment reports. 33 His
testimony is corroborated by the testimony of Marayag, Planters Banks appraisal department head.

This latter testimony shows that the spouses Lopez indeed submitted accomplishment reports.

Planters Bank is estopped from opposing the spouses Lopezs deviation from the construction project

We also affirm the CAs finding that Planters Bank is estopped from opposing the spouses Lopezs construction
of a six-story building. Section 2, Rule 131 of the Rules of Court provides that whenever a party has, by his
own declaration, act, or omission, intentionally and deliberately led another to believe that a particular thing is
true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission,
be permitted to falsify it.

The concurrence of the following requisites is necessary for the principle of equitable estoppel to apply: (a)
conduct amounting to false representation or concealment of material facts or at least calculated to convey
the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently
attempts to assert; (b) intent, or at least expectation that this conduct shall be acted upon, or at least
influenced by the other party; and (c) knowledge, actual or constructive, of the actual facts.

Inaction or silence may under some circumstances amount to a misrepresentation, so as to raise an equitable
estoppel. When the silence is of such a character and under such circumstances that it would become a fraud
on the other party to permit the party who has kept silent to deny what his silence has induced the other to
believe and act on, it will operate as an estoppel. This doctrine rests on the principle that if one maintains
silence, when in conscience he ought to speak, equity will debar him from speaking when in conscience he
ought to remain silent.

The principle of equitable estoppel prevents Planters Bank from raising the spouses Lopezs violation of the
loan agreement. Planters Bank was already aware that the spouses Lopez were building six floors as early as
September 30, 1983. Records disclose that Planters Bank also conducted a series of ocular
inspections.35 Despite such knowledge, the bank kept silent on the violation of the loan agreement as Planters
Bank still continued to release the loan in partial amounts to the spouses Lopez. As the CA correctly pointed
out, Planters Bank only raised this argument during trial a move that highly appears to be an afterthought.

Planters Bank only committed a slight or casual breach of the contract

Despite our affirmation of the CAs factual findings, we disagree with the CAs conclusion that rescission is
proper. Planters Bank indeed incurred in delay by not complying with its obligation to make further loan
releases.36 Its refusal to release the remaining balance, however, was merely a slight or casual breach as
shown below. In other words, its breach was not sufficiently fundamental to defeat the object of the parties in
entering into the loan agreement. The well-settled rule is that rescission will not be permitted for a slight or
casual breach of the contract. The question of whether a breach of contract is substantial depends upon the
attending circumstances.37

The factual circumstances of this case lead us to the conclusion that Planters Bank substantially complied with
its obligation. To reiterate, Planters Bank released 3,500,000.00 of the 4,200,000.00 loan. Only the amount
of 700,000.00 was not released. This constitutes 16.66% of the entire loan. Moreover, the progress report
dated May 30, 1984 states that 85% of the six-story building was already completed by the spouses
Lopez.38 It is also erroneous to solely impute the non-completion of the building to Planters Bank. Planters
Bank is not an insurer of the buildings construction. External factors, such as the steep price of the materials
and the cost of labor, affected the erection of the building. More importantly, the spouses Lopez took the risk
that the project would not be finished when they constructed a six-story building instead of four-story
structure.

Even assuming that Planters Bank substantially breached its obligation, the fourth paragraph of Article 1191 of
the Civil Code expressly provides that rescission is without prejudice to the rights of third persons who have
acquired the thing, in accordance with Article 1385 of the Civil Code. In turn, Article 1385 states that

COMPILED BY: Jo-Al Y. Gealon


Page 27 of 102
LABRADOR NOTES

rescission cannot take place when the things which are the object of the contract are legally in the possession
of third persons who did not act in bad faith.

In the present case, the mortgaged properties had already been foreclosed. They were already sold to the
highest bidder at a public auction. We recognize that transferees pendente lite are proper, but not
indispensable, parties in this case, as they would, in any event, be bound by the judgment against Planters
Bank.39 However, the respondents did not overcome the presumption that the buyers bought the foreclosed
properties in good faith.40 The spouses Lopez did not cause the annotation of notice of lis pendens at the back
of the title of the mortgaged lot.41Moreover, the respondents did not adduce any evidence that would show
that the buyers bought the property with actual knowledge of the pendency of the present case. Furthermore,
the spouses Lopezs failure to pay the overdue loan made them parties in default, not entitled to rescission
under Article 1191 of the Civil Code.

The estate of Florentina Lopez shall pay Planters Bank the amount of 3,500,000.00 with 12% monetary
interest p.a. from June 22, 1984 until full payment of the obligation

Planters Bank and the spouses Lopez undertook reciprocal obligations when they entered into a loan
agreement. In reciprocal obligations, the obligation or promise of each party is the consideration for that of
the other. The mere pecuniary inability of one contracting party to fulfill an engagement does not discharge
the other contracting party of the obligation in the contract.42 Planters Banks slight breach does not excuse
the spouses Lopez from paying the overdue loan in the amount of 3,500,000.00. Despite this finding,
however, we cannot sustain the imposition of the interest rate in the loan contract.

We are aware that the parties did not raise this issue in the pleadings. However, it is a settled rule that an
appeal throws the entire case open for review once accepted by this Court. This Court has thus the authority
to review matters not specifically raised or assigned as error by the parties, if their consideration is necessary
in arriving at a just resolution of the case.43

In the present case, Planters Bank unilaterally increased the monetary interest rate to 32% p.a. after the
execution of the third amendment to the loan agreement. This is patently violative of the element of mutuality
of contracts. Our Civil Code has long entrenched the basic principle that the validity of or compliance to the
contract cannot be left to the will of one party.44

Even if we disregard the 32% p.a., the interest rate of 27% p.a. in the third amended agreement is still
excessive. In Trade & Investment Devt Corp. of the Phil. v. Roblett Industrial Construction Corp., 45 we
lowered the interest resulting charge for being excessive in the context of its computation period . We
equitably reduced the interest rate from 18% p.a. to 12% p.a. because the case was decided with finality
sixteen years after the filing of the complaint. We noted that the amount of the loan swelled to a considerably
disproportionate sum, far exceeding the principal debt.

A parallel situation prevails in the present case. Almost 29 years have elapsed since the filing of the complaint
in 1984. The amount of the principal loan already ballooned to an exorbitant amount unwarranted in fact and
in operation. While the Court recognizes the right of the parties to enter into contracts, this rule is not
absolute. We are allowed to temper interest rates when necessary. We have thus ruled in several cases that
when the agreed rate is iniquitous, it is considered as contrary to morals, if not against the law. Such
stipulation is void.46

The manifest unfairness caused to the respondents by this ruling and our sense of justice dictate that we
judiciously reduce the monetary interest rate. Our imposition of the lower interest rate is based on the
demands of substantial justice and in the exercise of our equity jurisdiction.

We thus equitably reduce the monetary interest rate to 12% p.a. on the amount due computed from June 22,
1984 until full payment of the obligation. We point out in this respect that the monetary interest accrues
under the terms of the loan agreement until actual payment is effected 47 for the reason that its imposition is
based on the stipulation of the parties. 48

In the present case, the lower courts found that the monetary interest accrued on June 22, 1984. Incidentally,
the lower courts also found that June 22, 1984 is also the spouses Lopezs date of default.

The estate of Florentina Lopez shall further be liable for compensatory interest at the rates of 12% p.a. from
June 22, 1984 until June 30, 2013 and 6% p.a. from July 1, 2013 until the finality of this Decision

With respect to the computation of compensatory interest, Section 1 of Bangko Sentral ng Pilipinas (BSP)
Circular No. 799, Series of 2013, which took effect on July 1, 2013, provides:

Section 1. The rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed
in judgments, in the absence of an express contract as to such rate of interest, shall be six percent (6%) per
annum. [emphasis ours]

COMPILED BY: Jo-Al Y. Gealon


Page 28 of 102
LABRADOR NOTES

This provision amends Section 2 of Central Bank (CB) Circular No. 905-82, Series of 1982, which took effect
on January 1, 1983. Notably, we recently upheld the constitutionality of CB Circular No. 905-82 in Advocates
for Truth in Lending, Inc., et al. v. Bangko Sentral ng Pilipinas Monetary Board, etc. 49 Section 2 of CB Circular
No. 905-82 provides:

Section 2. The rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed
in judgments, in the absence of express contract as to such rate of interest, shall continue to be twelve
percent (12%) per annum. [emphasis ours]

Pursuant to these changes, this Court modified the guidelines in Eastern Shipping Lines, Inc. v. Court of
Appeals50in the case of Dario Nacar v. Gallery Frames, et al.51 (Nacar). In Nacar, we established the following
guidelines:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi- contracts, delicts or quasi-delicts is
breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of
the Civil Code govern in determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the
rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default,
i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the
Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on


the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or
until the demand can be established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably
established at the time the demand is made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification of damages may be deemed to have
been reasonably ascertained). The actual base for the computation of legal interest shall, in any case,
be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of
legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per
annum from such finality until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit. And, in addition to the above, judgments that have become final
and executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein. [emphasis ours]

Since we declare void the monetary interest agreed upon by the parties, we impose a compensatory interest
of 12% p.a. which accrues from June 22, 1984 until June 30, 2013, pursuant to CB Circular No. 905-82.52 As
we have earlier stated, June 22, 1984 is the spouses Lopezs established date of default. In recognition of the
prospective application of BSP Circular No. 799, we reduce the compensatory interest of 12% p.a. to 6% p.a.
from July 1, 2013 until the finality of this Decision. Furthermore, the interest due shall earn legal interest from
the time it is judicially demanded, pursuant to Article 2212 of the Civil Code.

The estate of Florentina Lopez shall further be liable for interest at the rate of 6% p.a. from the finality of this
decision until full payment of the obligation

Also, pursuant to the above-quoted Section 1 of BSP Circular No. 799, we impose an interest rate of 6% p.a.
from the finality of this Decision until the obligation is fully paid, the interim period being deemed equivalent
to a forbearance of credit.

Lastly, to prevent future litigation in the enforcement of the award, we clarify that the respondents are not
personally responsible for the debts of their predecessor. The respondents extent of liability to Planters Bank
is limited to the value of the estate which they inherited from Florentina Lopez.53 In our jurisdiction, "it is the
estate or mass of the property left by the decedent, instead of the heirs directly, that becomes vested and
charged with his rights and obligations which survive after his death." 54To rule otherwise would unduly deprive
the respondents of their properties.

WHEREFORE, premises considered, the assailed amended decision dated July 30, 2007 and resolution dated
February 5, 2009 of the Court of Appeals are hereby REVERSED. Respondents Joseph Wilfred, Joseph Gilbert
and Marlyn, all surnamed Joven, are ordered to pay THREE MILLION FIVE HUNDRED THOUSAND PESOS (1

COMPILED BY: Jo-Al Y. Gealon


Page 29 of 102
LABRADOR NOTES

3,500,000.00) with 12% monetary interest per annum commencing on June 22, 1984 until fully paid; 12%
compensatory interest per annum commencing on June 22, 1984 until June 30, 2013; 6% compensatory
interest per annum commencing on July 1 2013 until the finality of this Decision; and 6% interest rate per
annum commencing from the finality of this Decision until fully paid. The proceeds of the foreclosed
mortgaged property in the auction sale shall be deducted from the principal of the loan from the time payment
was made to Planters Bank and the remainder shall be the new principal from which the computation shall
thereafter be made. Furthermore, the respondents' liability is limited to the value of the inheritance they
received from the deceased Florentina Lopez.

SO ORDERED.

Palaganas v. Palaganas, G.R. No. 169144, January 26, 2011


IN RE: IN THE MATTER OF THE G.R. No. 169144
PETITION TO APPROVE THE WILL
OF RUPERTA PALAGANAS WITH
PRAYER FOR THE APPOINTMENT
OF SPECIAL ADMINISTRATOR,

MANUEL MIGUEL PALAGANAS and


BENJAMIN GREGORIO PALAGANAS,
Petitioners, Present:
CARPIO, J., Chairperson,
- versus - NACHURA,
ABAD,
MENDOZA, and
SERENO,* JJ.
ERNESTO PALAGANAS,
Respondent. Promulgated:

January 26, 2011


x --------------------------------------------------------------------------------------- x

DECISION

ABAD, J.:

This case is about the probate before Philippine court of a will executed abroad by a foreigner although it has

not been probated in its place of execution.

The Facts and the Case

On November 8, 2001 Ruperta C. Palaganas (Ruperta), a Filipino who became a naturalized United States

(U.S.) citizen, died single and childless. In the last will and testament she executed in California, she

designated her brother, Sergio C. Palaganas (Sergio), as the executor of her will for she had left properties in

the Philippines and in the U.S.

On May 19, 2003 respondent Ernesto C. Palaganas (Ernesto), another brother of Ruperta, filed with the

Regional Trial Court (RTC) of Malolos, Bulacan, a petition for the probate of Rupertas will and for his

appointment as special administrator of her estate.[1] On October 15, 2003, however, petitioners Manuel

Miguel Palaganas (Manuel) and Benjamin Gregorio Palaganas (Benjamin), nephews of Ruperta, opposed the

petition on the ground that Rupertas will should not be probated in the Philippines but in the U.S. where she

COMPILED BY: Jo-Al Y. Gealon


Page 30 of 102
LABRADOR NOTES

executed it. Manuel and Benjamin added that, assuming Rupertas will could be probated in the Philippines, it

is invalid nonetheless for having been executed under duress and without the testators full understanding of

the consequences of such act. Ernesto, they claimed, is also not qualified to act as administrator of the estate.

Meantime, since Rupertas foreign-based siblings, Gloria Villaluz and Sergio, were on separate occasions in

the Philippinesfor a short visit, respondent Ernesto filed a motion with the RTC for leave to take their

deposition, which it granted. On April, 13, 2004 the RTC directed the parties to submit their memorandum on

the issue of whether or not Rupertas U.S. will may be probated in and allowed by a court in the Philippines.

On June 17, 2004 the RTC issued an order:[2] (a) admitting to probate Rupertas last will; (b) appointing

respondent Ernesto as special administrator at the request of Sergio, the U.S.-based executor designated in

the will; and (c) issuing the Letters of Special Administration to Ernesto.

Aggrieved by the RTCs order, petitioner nephews Manuel and Benjamin appealed to the Court of Appeals

(CA),[3] arguing that an unprobated will executed by an American citizen in the U.S. cannot be probated for

the first time in the Philippines.

On July 29, 2005 the CA rendered a decision,[4] affirming the assailed order of the RTC,[5] holding that the RTC

properly allowed the probate of the will, subject to respondent Ernestos submission of the authenticated

copies of the documents specified in the order and his posting of required bond. The CA pointed out that

Section 2, Rule 76 of the Rules of Court does not require prior probate and allowance of the will in the country

of its execution, before it can be probated in the Philippines. The present case, said the CA, is different from

reprobate, which refers to a will already probated and allowed abroad. Reprobate is governed by different

rules or procedures. Unsatisfied with the decision, Manuel and Benjamin came to this Court.

The Issue Presented

The key issue presented in this case is whether or not a will executed by a foreigner abroad may be probated

in the Philippines although it has not been previously probated and allowed in the country where it was

executed.

The Courts Ruling

Petitioners Manuel and Benjamin maintain that wills executed by foreigners abroad must first be probated and

allowed in the country of its execution before it can be probated here. This, they claim, ensures prior

compliance with the legal formalities of the country of its execution. They insist that local courts can only allow

probate of such wills if the proponent proves that: (a) the testator has been admitted for probate in such

foreign country, (b) the will has been admitted to probate there under its laws, (c) the probate court has

COMPILED BY: Jo-Al Y. Gealon


Page 31 of 102
LABRADOR NOTES

jurisdiction over the proceedings, (d) the law on probate procedure in that foreign country and proof of

compliance with the same, and (e) the legal requirements for the valid execution of a will.

But our laws do not prohibit the probate of wills executed by foreigners abroad although the same have not as

yet been probated and allowed in the countries of their execution. A foreign will can be given legal effects in

our jurisdiction.Article 816 of the Civil Code states that the will of an alien who is abroad produces effect in

the Philippines if made in accordance with the formalities prescribed by the law of the place where he resides,

or according to the formalities observed in his country.[6]

In this connection, Section 1, Rule 73 of the 1997 Rules of Civil Procedure provides that if the decedent is an

inhabitant of a foreign country, the RTC of the province where he has an estate may take cognizance of the

settlement of such estate.Sections 1 and 2 of Rule 76 further state that the executor, devisee, or legatee

named in the will, or any other person interested in the estate, may, at any time after the death of the

testator, petition the court having jurisdiction to have the will allowed, whether the same be in his possession

or not, or is lost or destroyed.

Our rules require merely that the petition for the allowance of a will must show, so far as known to the

petitioner: (a) the jurisdictional facts; (b) the names, ages, and residences of the heirs, legatees, and

devisees of the testator or decedent; (c) the probable value and character of the property of the estate; (d)

the name of the person for whom letters are prayed; and (e) if the will has not been delivered to the court,

the name of the person having custody of it. Jurisdictional facts refer to the fact of death of the decedent, his

residence at the time of his death in the province where the probate court is sitting, or if he is an inhabitant of

a foreign country, the estate he left in such province.[7] The rules do not require proof that the foreign will has

already been allowed and probated in the country of its execution.

In insisting that Rupertas will should have been first probated and allowed by the court of California,

petitioners Manuel and Benjamin obviously have in mind the procedure for the reprobate of will before

admitting it here. But, reprobate or re-authentication of a will already probated and allowed in a foreign

country is different from that probate where the will is presented for the first time before a competent

court. Reprobate is specifically governed by Rule 77 of the Rules of Court.Contrary to petitioners stance, since

this latter rule applies only to reprobate of a will, it cannot be made to apply to the present case. In

reprobate, the local court acknowledges as binding the findings of the foreign probate court provided its

jurisdiction over the matter can be established.

Besides, petitioners stand is fraught with impractically. If the instituted heirs do not have the means to go

abroad for the probate of the will, it is as good as depriving them outright of their inheritance, since our law

COMPILED BY: Jo-Al Y. Gealon


Page 32 of 102
LABRADOR NOTES

requires that no will shall pass either real or personal property unless the will has been proved and allowed by

the proper court.[8]

Notably, the assailed RTC order of June 17, 2004 is nothing more than an initial ruling that the court can take

cognizance of the petition for probate of Rupertas will and that, in the meantime, it was designating Ernesto

as special administrator of the estate. The parties have yet to present evidence of the due execution of the

will, i.e. the testators state of mind at the time of the execution and compliance with the formalities required

of wills by the laws of California. This explains the trial courts directive for Ernesto to submit the duly

authenticated copy of Rupertas will and the certified copies of the Laws of Succession and Probate of Will of

California.

WHEREFORE, the Court DENIES the petition and AFFIRMS the Court of Appeals decision in CA-G.R. CV

83564 dated July 29, 2005.

SO ORDERED.

Mendoza v. Delos Santos, G.R. No. 176422, March 20, 2013

G.R. No. 176422 March 20, 2013

MARIA MENDOZA, in her own capacity and as Attorney-in-fact of DEOGRACIAS, MARCELA,


DIONISIA, ADORA CION, all surnamed MENDOZA, REMEDIOS MONTILLA, FELY BAUTISTA, JULIANA
GUILALAS and ELVIRA MENDOZA, Petitioners,
vs.
JULIA POLl CARPIO DELOS SANTOS, substituted by her heirs, CARMEN P. DELOS SANTOS, ROSA
BUENA VENTURA, ZENAIDA P. DELOS SANTOS VDA. DE MATEO, LEONILA P. DELOS SANTOS,
ELVIRA P. DELOS SANTOS VDA. DE JOSE, TERESITA P. DELOS SANTOS-CABUHAT, MERCEDITA P.
DELOS SANTOS, LYDIA P. DELOS SANTOS VDA. DE HILARIO, PERFECTO P. DELOS SANTOS, JR., and
CECILIA M. MENDOZA,Respondents.

DECISION

REYES, J.:

Reserva troncal is a special rule designed primarily to assure the return of a reservable property to the third
degree relatives belonging to the line from which the property originally came, and avoid its being dissipated
into and by the relatives of the inheriting ascendant.1

The Facts

The properties subject in the instant case are three parcels of land located in Sta. Maria, Bulacan: (1) Lot
1681-B, with an area of 7,749 square meters;2 (2) Lot 1684, with an area of 5,667 sq m;3 and (3) Lot No.
1646-B, with an area of 880 sq m.4 Lot Nos. 1681-B and 1684 are presently in the name of respondent Julia
Delos Santos5(respondent). Lot No. 1646-B, on the other hand, is also in the name of respondent but co-
owned by Victoria Pantaleon, who bought one-half of the property from petitioner Maria Mendoza and her
siblings.

Petitioners are grandchildren of Placido Mendoza (Placido) and Dominga Mendoza (Dominga). Placido and
Dominga had four children: Antonio, Exequiel, married to Leonor, Apolonio and Valentin. Petitioners Maria,
Deogracias, Dionisia, Adoracion, Marcela and Ricardo are the children of Antonio. Petitioners Juliana, Fely,
Mercedes, Elvira and Fortunato, on the other hand, are Valentins children. Petitioners alleged that the
properties were part of Placido and Domingas properties that were subject of an oral partition and
subsequently adjudicated to Exequiel. After Exequiels death, it passed on to his spouse Leonor and only
daughter, Gregoria. After Leonors death, her share went to Gregoria. In 1992, Gregoria died intestate and

COMPILED BY: Jo-Al Y. Gealon


Page 33 of 102
LABRADOR NOTES

without issue. They claimed that after Gregorias death, respondent, who is Leonors sister, adjudicated unto
herself all these properties as the sole surviving heir of Leonor and Gregoria. Hence, petitioners claim that the
properties should have been reserved by respondent in their behalf and must now revert back to them,
applying Article 891 of the Civil Code on reserva troncal.

Respondent, however, denies any obligation to reserve the properties as these did not originate from
petitioners familial line and were not originally owned by Placido and Dominga. According to respondent, the
properties were bought by Exequiel and Antonio from a certain Alfonso Ramos in 1931. It appears, however,
that it was only Exequiel who was in possession of the properties.6

The Regional Trial Court (RTC) of Malolos, Bulacan, Branch 6, found merit in petitioners claim and granted
their action for Recovery of Possession by Reserva Troncal, Cancellation of TCT and Reconveyance. In its
Decision dated November 4, 2002, the RTC disposed as follows:

WHEREFORE, premised from the foregoing judgment is hereby rendered:

1. Ordering respondents (heirs of Julia Policarpio) to reconvey the three (3) parcels of land subject of
this action in the name of the plaintiffs enumerated in the complaint including intervenor Maria Cecilia
M. Mendoza except one-half of the property described in the old title, TCT No. T-124852(M) which
belongs to Victorina Pantaleon;

2. Ordering the Register of Deeds of Bulacan to cancel the titles in the name of Julia Policarpio, TCT
No. T-149033(M), T-183631(M) and T-149035(M) and reconvey the same to the enumerated
plaintiffs; and

3. No pronouncement as to claims for attorneys fees and damages and costs.

SO ORDERED.7

On appeal, the Court of Appeals (CA) reversed and set aside the RTC decision and dismissed the complaint
filed by petitioners. The dispositive portion of the CA Decision dated November 16, 2006 provides:

WHEREFORE, premises considered, the November 4, 2002 Decision of the Regional Trial Court, Br. 6, Third
Judicial Region, Malolos, Bulacan, is REVERSED and SET ASIDE. The Third Amended Complaint in Civil Case
No. 609-M-92 is hereby DISMISSED. Costs against the Plaintiffs-Appellants.

SO ORDERED.8

Petitioners filed a motion for reconsideration but the CA denied the same per Resolution 9 dated January 17,
2007.

In dismissing the complaint, the CA ruled that petitioners failed to establish that Placido and Dominga owned
the properties in dispute.10 The CA also ruled that even assuming that Placido and Dominga previously owned
the properties, it still cannot be subject to reserva troncal as neither Exequiel predeceased Placido and
Dominga nor did Gregoria predecease Exequiel.11

Now before the Court, petitioners argue that:

A.

THE HONORABLE [CA] GRIEVOUSLY ERRED IN HOLDING THAT THE SUBJECT PROPERTIES ARE NOT
RESERVABLE PROPERTIES, COMING AS THEY DO FROM THE FAMILY LINE OF THE PETITIONERS
MENDOZAS.

B.

THE HONORABLE [CA] GRIEVOUSLY ERRED IN HOLDING THAT THE PETITIONERS MENDOZAS DO NOT
HAVE A RIGHT TO THE SUBJECT PROPERTIES BY VIRTUE OF THE LAW ON RESERVA TRONCAL.12

Petitioners take exception to the ruling of the CA, contending that it is sufficient that the properties came from
the paternal line of Gregoria for it to be subject to reserva troncal. They also claim the properties in
representation of their own predecessors, Antonio and Valentin, who were the brothers of Exequiel. 13

Ruling of the Court

COMPILED BY: Jo-Al Y. Gealon


Page 34 of 102
LABRADOR NOTES

This petition is one for review on certiorari under Rule 45 of the Rules of Court. The general rule in this regard
is that it should raise only questions of law. There are, however, admitted exceptions to this rule, one of which
is when the CAs findings are contrary to those of the trial court.14 This being the case in the petition at hand,
the Court must now look into the differing findings and conclusion of the RTC and the CA on the two issues
that arise one, whether the properties in dispute are reservable properties and two, whether petitioners are
entitled to a reservation of these properties.

Article 891 of the Civil Code on reserva troncal

The principle of reserva troncal is provided in Article 891 of the Civil Code:

Art. 891. The ascendant who inherits from his descendant any property which the latter may have acquired by
gratuitous title from another ascendant, or a brother or sister, is obliged to reserve such property as he may
have acquired by operation of law for the benefit of relatives who are within the third degree and belong to
the line from which said property came. (Emphasis ours)

There are three (3) lines of transmission in reserva troncal. The first transmission is by gratuitous title,
whether by inheritance or donation, from an ascendant/brother/sister to a descendant called the prepositus.
The second transmission is by operation of law from the prepositus to the other ascendant or reservor, also
called the reservista. The third and last transmission is from the reservista to the reservees or reservatarios
who must be relatives within the third degree from which the property came. 15

The lineal character of the


reservable property is reckoned
from the ascendant from whom the
prepositus received the property by
gratuitous title

Based on the circumstances of the present case, Article 891 on reserva troncal is not applicable.

The fallacy in the CAs resolution is that it proceeded from the erroneous premise that Placido is the ascendant
contemplated in Article 891 of the Civil Code. From thence, it sought to trace the origin of the subject
properties back to Placido and Dominga, determine whether Exequiel predeceased Placido and whether
Gregoria predeceased Exequiel.

The persons involved in reserva troncal are:

(1) The ascendant or brother or sister from whom the property was received by the descendant by
lucrative or gratuitous title;

(2) The descendant or prepositus (propositus) who received the property;

(3) The reservor (reservista), the other ascendant who obtained the property from the prepositus by
operation of law; and

COMPILED BY: Jo-Al Y. Gealon


Page 35 of 102
LABRADOR NOTES

(4) The reservee (reservatario) who is within the third degree from the prepositus and who belongs to
the (linea o tronco) from which the property came and for whom the property should be reserved by
the reservor.16

It should be pointed out that the ownership of the properties should be reckoned only from Exequiels as he is
the ascendant from where the first transmission occurred, or from whom Gregoria inherited the properties in
dispute. The law does not go farther than such ascendant/brother/sister in determining the lineal character of
the property.17It was also immaterial for the CA to determine whether Exequiel predeceased Placido and
Dominga or whether Gregoria predeceased Exequiel. What is pertinent is that Exequiel owned the properties
and he is the ascendant from whom the properties in dispute originally came. Gregoria, on the other hand, is
the descendant who received the properties from Exequiel by gratuitous title.

Moreover, Article 891 simply requires that the property should have been acquired by the descendant or
prepositus from an ascendant by gratuitous or lucrative title. A transmission is gratuitous or by gratuitous title
when the recipient does not give anything in return.18 At risk of being repetitious, what was clearly
established in this case is that the properties in dispute were owned by Exequiel (ascendant). After his death,
Gregoria (descendant/prepositus) acquired the properties as inheritance.

Ascendants, descendants and


collateral relatives under Article
964 of the Civil Code

Article 891 provides that the person obliged to reserve the property should be an ascendant (also known as
the reservor/reservista) of the descendant/prepositus. Julia, however, is not Gregorias ascendant; rather, she
is Gregorias collateral relative.

Article 964 of the Civil Code provides for the series of degrees among ascendants and descendants, and those
who are not ascendants and descendants but come from a common ancestor, viz:

Art. 964. A series of degrees forms a line, which may be either direct or collateral.1wphi1 A direct line is that
constituted by the series of degrees among ascendants and descendants.

A collateral line is that constituted by the series of degrees among persons who are not ascendants and
descendants, but who come from a common ancestor. (Emphasis and italics ours)

Gregorias ascendants are her parents, Exequiel and Leonor, her grandparents, great-grandparents and so on.
On the other hand, Gregorias descendants, if she had one, would be her children, grandchildren and great-
grandchildren. Not being Gregorias ascendants, both petitioners and Julia, therefore, are her collateral
relatives. In determining the collateral line of relationship, ascent is made to the common ancestor and then
descent to the relative from whom the computation is made. In the case of Julias collateral relationship with
Gregoria, ascent is to be made from Gregoria to her mother Leonor (one line/degree), then to the common
ancestor, that is, Julia and Leonors parents (second line/degree), and then descent to Julia, her aunt (third
line/degree). Thus, Julia is Gregorias collateral relative within the third degree and not her ascendant.

First cousins of the


descendant/prepositus are fourth
degree relatives and cannot be
considered reservees/reservatarios

Moreover, petitioners cannot be considered reservees/reservatarios as they are not relatives within the third
degree of Gregoria from whom the properties came. The person from whom the degree should be reckoned is
the descendant/prepositusthe one at the end of the line from which the property came and upon whom the
property last revolved by descent.19 It is Gregoria in this case. Petitioners are Gregorias fourth degree
relatives, being her first cousins. First cousins of the prepositus are fourth degree relatives and are not
reservees or reservatarios.20

They cannot even claim representation of their predecessors Antonio and Valentin as Article 891 grants a
personal right of reservation only to the relatives up to the third degree from whom the reservable properties
came. The only recognized exemption is in the case of nephews and nieces of the prepositus, who have the
right to represent their ascendants (fathers and mothers) who are the brothers/sisters of the prepositus and
relatives within the third degree.21 In Florentino v. Florentino,22 the Court stated:

Following the order prescribed by law in legitimate succession, when there are relatives of the descendant
within the third degree, the right of the nearest relative, called reservatario, over the property which the
reservista (person holding it subject to reservation) should return to him, excludes that of the one more
remote. The right of representation cannot be alleged when the one claiming same as a reservatario of the
reservable property is not among the relatives within the third degree belong to the line from which such
property came, inasmuch as the right granted by the Civil Code in Article 811 now Article 891 is in the highest
degree personal and for the exclusive benefit of the designated persons who are the relatives, within the third

COMPILED BY: Jo-Al Y. Gealon


Page 36 of 102
LABRADOR NOTES

degree, of the person from whom the reservable property came. Therefore, relatives of the fourth and the
succeeding degrees can never be considered as reservatarios, since the law does not recognize them as such.

x x x Nevertheless there is right of representation on the part of reservatarios who are within the third degree
mentioned by law, as in the case of nephews of the deceased person from whom the reservable property
came. x x x.23 (Emphasis and underscoring ours)

The conclusion, therefore, is that while it may appear that the properties are reservable in character,
petitioners cannot benefit from reserva troncal. First, because Julia, who now holds the properties in dispute,
is not the other ascendant within the purview of Article 891 of the Civil Code and second, because petitioners
are not Gregorias relatives within the third degree. Hence, the CAs disposition that the complaint filed with
the RTC should be dismissed, only on this point, is correct. If at all, what should apply in the distribution of
Gregorias estate are Articles 1003 and 1009 of the Civil Code, which provide:

Art. 1003. If there are no descendants, ascendants, illegitimate children, or a surviving spouse, the collateral
relatives shall succeed to the entire estate of the deceased in accordance with the following articles.

Art. 1009. Should there be neither brothers nor sisters, nor children of brothers or sisters, the other collateral
relatives shall succeed to the estate.

The latter shall succeed without distinction of lines or preference among them by reason of relationship by the
whole blood.

Nevertheless, the Court is not in the proper position to determine the proper distribution of Gregorias estate
at this point as the cause of action relied upon by petitioners in their complaint filed with the RTC is based
solely on reserva troncal. Further, any determination would necessarily entail reception of evidence on
Gregorias entire estate and the heirs entitled thereto, which is best accomplished in an action filed specifically
for that purpose.

A reservista acquires ownership of


the reservable property until the
reservation takes place or is
extinguished

Before concluding, the Court takes note of a palpable error in the RTCs disposition of the case. In upholding
the right of petitioners over the properties, the RTC ordered the reconveyance of the properties to petitioners
and the transfer of the titles in their names. What the RTC should have done, assuming for arguments sake
that reserva troncal is applicable, is have the reservable nature of the property registered on respondents
titles. In fact, respondent, as reservista, has the duty to reserve and to annotate the reservable character of
the property on the title.24 In reserva troncal, the reservista who inherits from a prepositus, whether by the
latters wish or by operation of law, acquires the inheritance by virtue of a title perfectly transferring absolute
ownership. All the attributes of ownership belong to him exclusively. 25

The reservor has the legal title and dominion to the reservable property but subject to the resolutory condition
that such title is extinguished if the reservor predeceased the reservee. The reservor is a usufructuary of the
reservable property. He may alienate it subject to the reservation. The transferee gets the revocable and
conditional ownership of the reservor. The transferees rights are revoked upon the survival of the reservees
at the time of the death of the reservor but become indefeasible when the reservees predecease the
reservor.26 (Citations omitted)

It is when the reservation takes place or is extinguished, 27 that a reservatario becomes, by operation of law,
the owner of the reservable property.28 In any event, the foregoing discussion does not detract from the fact
that petitioners are not entitled to a reservation of the properties in dispute.

WHEREFORE, the petition is DENIED. The Decision dated November 16, 2006 and Resolution dated January
17, 2007 of the Court of Appeals in CA-G.R. CV No. 77694 insofar as it dismissed the Third Amended
Complaint in Civil Case No. 609-M-92 are AFFIRMED. This Decision is without prejudice to any civil action that
the heirs of Gregoria

Mendoza may file for the settlement of her estate or for the determination of ownership of the properties in
question.

SO ORDERED.

COMPILED BY: Jo-Al Y. Gealon


Page 37 of 102
LABRADOR NOTES

Lopez v. Lopez, G.R. No. 189984, Nov. 12, 2012

G.R. No. 189984 November 12, 2012

IN THE MATTER OF THE PETITION FOR THE PROBATE OF THE LAST WILL AND TESTAMENT OF
ENRIQUE S. LOPEZ RICHARD B. LOPEZ, Petitioner,
vs.
DIANA JEANNE LOPEZ, MARYBETH DE LEON and VICTORIA L. TUAZON, Respondents.

RESOLUTION

PERLAS-BERNABE, J.:

This Petition for Review on Certiorari assails the March 30, 2009 Decision 1 and October 22, 2009 Resolution2 of
the Court of Appeals (CA) in CA-G.R. CV No. 87064 which affirmed the August 26, 2005 Decision 3 of the
Regional Trial Court of Manila, Branch 42 (RTC), in SP. Proc. No. 99-95225 disallowing the probate of the Last
Will and Testament of Enrique S. Lopez.

The Factual Antecedents

On June 21, 1999, Enrique S. Lopez (Enrique) died leaving his wife, Wendy B. Lopez, and their four legitimate
children, namely, petitioner Richard B. Lopez (Richard) and the respondents Diana Jeanne Lopez (Diana),
Marybeth de Leon (Marybeth) and Victoria L. Tuazon (Victoria) as compulsory heirs. Before Enriques death,
he executed a Last Will and Testament4 on August 10, 1996 and constituted Richard as his executor and
administrator.

On September 27, 1999, Richard filed a petition for the probate of his father's Last Will and Testament before
the RTC of Manila with prayer for the issuance of letters testamentary in his favor. Marybeth opposed the
petition contending that the purported last will and testament was not executed and attested as required by
law, and that it was procured by undue and improper pressure and influence on the part of Richard. The said
opposition was also adopted by Victoria.

After submitting proofs of compliance with jurisdictional requirements, Richard presented the attesting
witnesses, namely: Reynaldo Maneja; Romulo Monteiro; Ana Maria Lourdes Manalo (Manalo); and the notary
public who notarized the will, Atty. Perfecto Nolasco (Atty. Nolasco). The instrumental witnesses testified that
after the late Enrique read and signed the will on each and every page, they also read and signed the same in
the latter's presence and of one another. Photographs of the incident were taken and presented during trial.
Manalo further testified that she was the one who prepared the drafts and revisions from Enrique before the
final copy of the will was made.

Likewise, Atty. Nolasco claimed that Enrique had been his client for more than 20 years. Prior to August 10,
1996, the latter consulted him in the preparation of the subject will and furnished him the list of his properties
for distribution among his children. He prepared the will in accordance with Enrique's instruction and that
before the latter and the attesting witnesses signed it in the presence of one another, he translated the will
which was written in English to Filipino and added that Enrique was in good health and of sound mind at that
time.

On the other hand, the oppositors presented its lone witness, Gregorio B. Paraon (Paraon), Officer-in-Charge
of the Notarial Section, Office of the Clerk of Court, RTC, Manila. His testimony centered mainly on their
findings that Atty. Nolasco was not a notary public for the City of Manila in 1996, which on cross examination
was clarified after Paraon discovered that Atty. Nolasco was commissioned as such for the years 1994 to
1997.

Ruling of the RTC

In the Decision dated August 26, 2005,5 the RTC disallowed the probate of the will for failure to comply with
Article 805 of the Civil Code which requires a statement in the attestation clause of the number of pages used
upon which the will is written. It held that while Article 809 of the same Code requires mere substantial
compliance of the form laid down in Article 805 thereof, the rule only applies if the number of pages is
reflected somewhere else in the will with no evidence aliunde or extrinsic evidence required. While the
acknowledgment portion stated that the will consists of 7 pages including the page on which the ratification
and acknowledgment are written, the RTC observed that it has 8 pages including the acknowledgment portion.
As such, it disallowed the will for not having been executed and attested in accordance with law.

Aggrieved, Richard filed a Notice of Appeal which the RTC granted in the Order dated October 26, 2005. 6

Ruling of the Court of Appeals

COMPILED BY: Jo-Al Y. Gealon


Page 38 of 102
LABRADOR NOTES

On March 30, 2009,7 the CA issued the assailed decision dismissing the appeal. It held that the RTC
erroneously granted Richard's appeal as the Rules of Court is explicit that appeals in special proceedings, as in
this case, must be made through a record on appeal. Nevertheless, even on the merits, the CA found no valid
reason to deviate from the findings of the RTC that the failure to state the number of pages of the will in the
attestation clause was fatal. It noted that while Article 809 of the Civil Code sanctions mere substantial
compliance with the formal requirements set forth in Article 805 thereof, there was a total omission of such
fact in the attestation clause. Moreover, while the acknowledgment of the will made mention of "7 pages
including the page on which the ratification and acknowledgment are written," the will had actually 8 pages
including the acknowledgment portion thus, necessitating the presentation of evidence aliunde to explain the
discrepancy. Richard's motion for reconsideration from the decision was likewise denied in the second assailed
Resolution8 dated October 22, 2009.

Hence, the instant petition assailing the propriety of the CA's decision.

Ruling of the Court

The petition lacks merit.

The provisions of the Civil Code on Forms of Wills, particularly, Articles 805 and 809 of the Civil Code provide:

ART. 805. Every will, other than a holographic will, must be subscribed at the end thereof by the testator
himself or by the testator's name written by some other person in his presence, and by his express direction,
and attested and subscribed by three or more credible witnesses in the presence of the testator and of one
another.

The testator or the person requested by him to write his name and the instrumental witnesses of the will, shall
also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all the pages
shall be numbered correlatively in letters placed on the upper part of each page.

The attestation shall state the number of pages used upon which the will is written, and the fact that the
testator signed the will and every page thereof, or caused some other person to write his name, under his
express direction, in the presence of the instrumental witnesses, and that the latter witnessed and signed the
will and all the pages thereof in the presence of the testator and of one another.

If the attestation clause is in a language not known to the witnesses, it shall be interpreted to
them.1wphi1 (underscoring supplied)

ART. 809. In the absence of bad faith, forgery, or fraud, or undue and improper pressure and influence,
defects and imperfections in the form of attestation or in the language used therein shall not render the will
invalid if it is proved that the will was in fact executed and attested in substantial compliance with all the
requirements of Article 805.

The law is clear that the attestation must state the number of pages used upon which the will is written. The
purpose of the law is to safeguard against possible interpolation or omission of one or some of its pages and
prevent any increase or decrease in the pages.9

While Article 809 allows substantial compliance for defects in the form of the attestation clause, Richard
likewise failed in this respect. The statement in the Acknowledgment portion of the subject last will and
testament that it "consists of 7 pages including the page on which the ratification and acknowledgment are
written"10 cannot be deemed substantial compliance. The will actually consists of 8 pages including its
acknowledgment which discrepancy cannot be explained by mere examination of the will itself but through the
presentation of evidence aliund. 11 On this score is the comment of Justice J.B.L. Reyes regarding the
application of Article 809, to wit:

x x x The rule must be limited to disregarding those defects that can be supplied by an examination of the will
itself: whether all the pages are consecutively numbered; whether the signatures appear in each and every
page; whether the subscribing witnesses are three or the will was notarized. All these are facts that the will
itself can reveal, and defects or even omissions concerning them in the attestation clause can be safely
disregarded. But the total number of pages, and whether all persons required to sign did so in the presence of
each other must substantially appear in the attestation clause, being the only check against perjury in the
probate proceedings.12 (Emphasis supplied)

Hence, the CA properly sustained the disallowance of the will. Moreover, it correctly ruled that Richard
pursued the wrong mode of appeal as Section 2(a), Rule 41 of the Rules of Court explicitly provides that in
special proceedings, as in this case, the appeal shall be made by record on appeal.

WHEREFORE, premises considered, the petition is DENIED.

COMPILED BY: Jo-Al Y. Gealon


Page 39 of 102
LABRADOR NOTES

SO ORDERED.

Heirs of Policarpio M. Ureta, Sr. v. Heirs of Liberato M. Ureta, G.R. No. 165748, Sep. 14, 2011
HEIRS OF POLICRONIO M. URETA, SR., G.R. No. 165748
namely: CONRADO B. URETA, MACARIO B.
URETA, GLORIA URETA-GONZALES, ROMEO
B. URETA, RITA URETA-SOLANO, NENA
URETA-TONGCUA, VENANCIO B. URETA,
LILIA URETA-TAYCO, and HEIRS OF
POLICRONIO B. URETA, JR., namely:
MIGUEL T. URETA, RAMON POLICRONIO T.
URETA, EMMANUEL T. URETA, and
BERNADETTE T. URETA,
Petitioners,

- versus -

HEIRS OF LIBERATO M. URETA, namely:


TERESA F. URETA, AMPARO URETA-
CASTILLO, IGNACIO F. URETA, SR.,
EMIRITO F. URETA, WILKIE F. URETA,
LIBERATO F. URETA, JR., RAY F. URETA,
ZALDY F. URETA, and MILA JEAN URETA
CIPRIANO;
HEIRS OF PRUDENCIA URETA PARADERO,
namely: WILLIAM U. PARADERO, WARLITO
U. PARADERO, CARMENCITA P. PERLAS,
CRISTINA P. CORDOVA, EDNA P.
GALLARDO, LETICIA P. REYES; NARCISO
M. URETA;
VICENTE M. URETA;
HEIRS OF FRANCISCO M. URETA, namely:
EDITA T. URETA-REYES and LOLLIE T.
URETA-VILLARUEL; ROQUE M. URETA;
ADELA URETA-GONZALES; HEIRS OF
INOCENCIO M. URETA, namely: BENILDA
V. URETA, ALFONSO V. URETA II, DICK
RICARDO V. URETA, and ENRIQUE V.
URETA; MERLINDA U. RIVERA; JORGE
URETA; ANDRES URETA, WENEFREDA U.
TARAN; and BENEDICT URETA,

Respondents.
x--------------------------------------------------x
HEIRS OF LIBERATO M. URETA, namely: G.R. No. 165930
TERESA F. URETA, AMPARO URETA-
CASTILLO, IGNACIO F. URETA, SR.,
EMIRITO F. URETA, WILKIE F. URETA,
LIBERATO F. URETA, JR., RAY F. URETA,
ZALDY F. URETA, and MILA JEAN URETA
CIPRIANO;
HEIRS OF PRUDENCIA URETA PARADERO,
namely: WILLIAM U. PARADERO, WARLITO
U. PARADERO, CARMENCITA P. PERLAS,
CRISTINA P. CORDOVA, EDNA P.
GALLARDO, LETICIA P. REYES; NARCISO
M. URETA;
VICENTE M. URETA;
HEIRS OF FRANCISCO M. URETA, namely:
EDITA T. URETA-REYES and LOLLIE T.
URETA-VILLARUEL; ROQUE M. URETA;
ADELA URETA-GONZALES; HEIRS OF
INOCENCIO M. URETA, namely: BENILDA
V. URETA, ALFONSO V. URETA II, DICK
RICARDO V. URETA, and ENRIQUE V.
URETA; MERLINDA U. RIVERA; JORGE

COMPILED BY: Jo-Al Y. Gealon


Page 40 of 102
LABRADOR NOTES

URETA; ANDRES URETA, WENEFREDA U.


TARAN; and BENEDICT URETA,

Petitioners,

- versus

HEIRS OF POLICRONIO M. URETA, SR., Present:


namely: CONRADO B. URETA, MACARIO B.
URETA, GLORIA URETA-GONZALES, ROMEO VELASCO, JR., J., Chairperson,
B. URETA, RITA URETA-SOLANO, NENA PERALTA,
URETA-TONGCUA, VENANCIO B. URETA, ABAD,
LILIA URETA-TAYCO, and HEIRS OF MENDOZA, and
POLICRONIO B. URETA, JR., namely: SERENO,* JJ.
MIGUEL T. URETA, RAMON POLICRONIO T.
URETA, EMMANUEL T. URETA, and
BERNADETTE T. URETA,

Promulgated:
Respondents. September 14, 2011

x--------------------------------------------------x
DECISION

MENDOZA, J.:

These consolidated petitions for review on certiorari under Rule 45 of the 1997 Revised Rules of Civil
Procedure assail the April 20, 2004 Decision[1] of the Court of Appeals (CA), and its October 14, 2004
Resolution[2] in C.A.-G.R. CV No. 71399, which affirmed with modification the April 26, 2001 Decision [3] of the
Regional Trial Court, Branch 9, Kalibo, Aklan (RTC) in Civil Case No. 5026.

The Facts

In his lifetime, Alfonso Ureta (Alfonso) begot 14 children, namely, Policronio, Liberato, Narciso, Prudencia,
Vicente, Francisco, Inocensio, Roque, Adela, Wenefreda, Merlinda, Benedicto, Jorge, and Andres. The children
of Policronio (Heirs of Policronio), are opposed to the rest of Alfonsos children and their descendants (Heirs of
Alfonso).

Alfonso was financially well-off during his lifetime. He owned several fishpens, a fishpond, a sari-sari store, a
passenger jeep, and was engaged in the buying and selling of copra. Policronio, the eldest, was the only child
of Alfonso who failed to finish schooling and instead worked on his fathers lands.

Sometime in October 1969, Alfonso and four of his children, namely, Policronio, Liberato, Prudencia, and
Francisco, met at the house of Liberato. Francisco, who was then a municipal judge, suggested that in order to
reduce the inheritance taxes, their father should make it appear that he had sold some of his lands to his
children. Accordingly, Alfonso executed four (4) Deeds of Sale covering several parcels of land in favor of
Policronio,[4] Liberato,[5] Prudencia,[6] and his common-law wife, Valeriana Dela Cruz. [7] The Deed of Sale
executed on October 25, 1969, in favor of Policronio, covered six parcels of land, which are the properties in
dispute in this case.

COMPILED BY: Jo-Al Y. Gealon


Page 41 of 102
LABRADOR NOTES

Since the sales were only made for taxation purposes and no monetary consideration was given, Alfonso
continued to own, possess and enjoy the lands and their produce.

When Alfonso died on October 11, 1972, Liberato acted as the administrator of his fathers estate. He was later
succeeded by his sister Prudencia, and then by her daughter, Carmencita Perlas. Except for a portion of parcel
5, the rest of the parcels transferred to Policronio were tenanted by the Fernandez Family. These tenants
never turned over the produce of the lands to Policronio or any of his heirs, but to Alfonso and, later, to the
administrators of his estate.

Policronio died on November 22, 1974. Except for the said portion of parcel 5, neither Policronio nor
his heirs ever took possession of the subject lands.

On April 19, 1989, Alfonsos heirs executed a Deed of Extra-Judicial Partition,[8] which included all the
lands that were covered by the four (4) deeds of sale that were previously executed by Alfonso for taxation
purposes. Conrado, Policronios eldest son, representing the Heirs of Policronio, signed the Deed of Extra-
Judicial Partition in behalf of his co-heirs.

After their fathers death, the Heirs of Policronio found tax declarations in his name covering the six parcels of
land. On June 15, 1995, they obtained a copy of the Deed of Sale executed on October 25, 1969 by Alfonso in
favor of Policronio.

Not long after, on July 30, 1995, the Heirs of Policronio allegedly learned about the Deed of Extra-Judicial
Partition involving Alfonsos estate when it was published in the July 19, 1995 issue of the Aklan Reporter.

Believing that the six parcels of land belonged to their late father, and as such, excluded from the
Deed of Extra-Judicial Partition, the Heirs of Policronio sought to amicably settle the matter with the Heirs of
Alfonso. Earnest efforts proving futile, the Heirs of Policronio filed a Complaint for Declaration of Ownership,
Recovery of Possession, Annulment of Documents, Partition, and Damages [9] against the Heirs of Alfonso
before the RTC on November 17, 1995 where the following issues were submitted: (1) whether or not the
Deed of Sale was valid; (2) whether or not the Deed of Extra-Judicial Partition was valid; and (3) who between
the parties was entitled to damages.

The Ruling of the RTC

On April 26, 2001, the RTC dismissed the Complaint of the Heirs of Policronio and ruled in favor of the Heirs of
Alfonso in a decision, the dispositive portion of which reads:

WHEREFORE, the Court finds that the preponderance of evidence tilts in favor of the
defendants, hence the instant case is hereby DISMISSED.

The counterclaims are likewise DISMISSED.

With costs against plaintiffs.

SO ORDERED.

The RTC found that the Heirs of Alfonso clearly established that the Deed of Sale was null and void. It
held that the Heirs of Policronio failed to rebut the evidence of the Heirs of Alfonso, which proved that the
Deed of Sale in the possession of the former was one of the four (4) Deeds of Sale executed by Alfonso in
favor of his 3 children and second wife for taxation purposes; that although tax declarations were issued in the
name of Policronio, he or his heirs never took possession of the subject lands except a portion of parcel 5; and

COMPILED BY: Jo-Al Y. Gealon


Page 42 of 102
LABRADOR NOTES

that all the produce were turned over by the tenants to Alfonso and the administrators of his estate and never
to Policronio or his heirs.

The RTC further found that there was no money involved in the sale. Even granting that there was, as
claimed by the Heirs of Policronio, 2,000.00 for six parcels of land, the amount was grossly inadequate. It
was also noted that the aggregate area of the subject lands was more than double the average share
adjudicated to each of the other children in the Deed of Extra-Judicial Partition; that the siblings of Policronio
were the ones who shared in the produce of the land; and that the Heirs of Policronio only paid real estate
taxes in 1996 and 1997. The RTC opined that Policronio must have been aware that the transfer was merely
for taxation purposes because he did not subsequently take possession of the properties even after the death
of his father.

The Deed of Extra-Judicial Partition, on the other hand, was declared valid by the RTC as all the heirs
of Alfonso were represented and received equal shares and all the requirements of a valid extra-judicial
partition were met. The RTC considered Conrados claim that he did not understand the full significance of his
signature when he signed in behalf of his co-heirs, as a gratutitous assertion. The RTC was of the view that
when he admitted to have signed all the pages and personally appeared before the notary public, he was
presumed to have understood their contents.

Lastly, neither party was entitled to damages. The Heirs of Alfonso failed to present testimony to serve
as factual basis for moral damages, no document was presented to prove actual damages, and the Heirs of
Policronio were found to have filed the case in good faith.

The Ruling of the CA

Aggrieved, the Heirs of Policronio appealed before the CA, which rendered a decision on April 20, 2004,
the dispositive portion of which reads as follows:

WHEREFORE, the appeal is PARTIALLY GRANTED. The appealed Decision, dated 26


April 2001, rendered by Hon. Judge Dean R. Telan of the Regional Trial Court of Kalibo, Aklan,
Branch 9, is hereby AFFIRMED with MODIFICATION:

1.) The Deed of Sale in favor of Policronio Ureta, Sr., dated 25 October 1969, covering
six (6) parcels of land is hereby declared VOID for being ABSOLUTELY SIMULATED;

2.) The Deed of Extra-Judicial Partition, dated 19 April 1989, is ANNULLED;

3.) The claim for actual and exemplary damages are DISMISSED for lack of factual
and legal basis.

The case is hereby REMANDED to the court of origin for the proper partition of
ALFONSO URETAS Estate in accordance with Rule 69 of the 1997 Rules of Civil Procedure. No
costs at this instance.

SO ORDERED.

The CA affirmed the finding of the RTC that the Deed of Sale was void. It found the Deed of Sale to be
absolutely simulated as the parties did not intend to be legally bound by it. As such, it produced no legal
effects and did not alter the juridical situation of the parties. The CA also noted that Alfonso continued to
exercise all the rights of an owner even after the execution of the Deed of Sale, as it was undisputed that he
remained in possession of the subject parcels of land and enjoyed their produce until his death.

Policronio, on the other hand, never exercised any rights pertaining to an owner over the subject lands
from the time they were sold to him up until his death. He never took or attempted to take possession of the

COMPILED BY: Jo-Al Y. Gealon


Page 43 of 102
LABRADOR NOTES

land even after his fathers death, never demanded delivery of the produce from the tenants, and never paid
realty taxes on the properties. It was also noted that Policronio never disclosed the existence of the Deed of
Sale to his children, as they were, in fact, surprised to discover its existence. The CA, thus, concluded that
Policronio must have been aware that the transfer was only made for taxation purposes.

The testimony of Amparo Castillo, as to the circumstances surrounding the actual arrangement and
agreement between the parties prior to the execution of the four (4) Deeds of Sale, was found by the CA to be
unrebutted. The RTCs assessment of the credibility of her testimony was accorded respect, and the intention of
the parties was given the primary consideration in determining the true nature of the contract.

Contrary to the finding of the RTC though, the CA annulled the Deed of Extra-Judicial Partition due to
the incapacity of one of the parties to give his consent to the contract. It held that before Conrado could
validly bind his co-heirs to the Deed of Extra-Judicial Partition, it was necessary that he be clothed with the
proper authority. The CA ruled that a special power of attorney was required under Article 1878 (5) and (15)
of the Civil Code. Without a special power of attorney, it was held that Conrado lacked the legal capactiy to
give the consent of his co-heirs, thus, rendering the Deed of Extra-Judicial Partition voidable under Article
1390 (1) of the Civil Code.

As a consequence, the CA ordered the remand of the case to the RTC for the proper partition of the estate,
with the option that the parties may still voluntarily effect the partition by executing another agreement or by
adopting the assailed Deed of Partition with the RTCs approval in either case. Otherwise, the RTC may proceed
with the compulsory partition of the estate in accordance with the Rules.

With regard to the claim for damages, the CA agreed with the RTC and dismissed the claim for actual
and compensatory damages for lack of factual and legal basis.

Both parties filed their respective Motions for Reconsideration, which were denied by the CA for lack of
merit in a Resolution dated October 14, 2004.

In their Motion for Reconsideration, the Heirs of Policronio argued that the RTC violated the best evidence rule
in giving credence to the testimony of Amparo Castillo with regard to the simulation of the Deed of Sale, and
that prescription had set in precluding any question on the validity of the contract.

The CA held that the oral testimony was admissible under Rule 130, Section 9 (b) and (c), which
provides that evidence aliunde may be allowed to explain the terms of the written agreement if the same failed
to express the true intent and agreement of the parties thereto, or when the validity of the written agreement
was put in issue. Furthermore, the CA found that the Heirs of Policronio waived their right to object to
evidence aliunde having failed to do so during trial and for raising such only for the first time on appeal. With
regard to prescription, the CA ruled that the action or defense for the declaration of the inexistence of a
contract did not prescribe under Article 1410 of the Civil Code.

On the other hand, the Heirs of Alfonso argued that the Deed of Extra-Judicial Partition should not
have been annulled, and instead the preterited heirs should be given their share. The CA reiterated that
Conrados lack of capacity to give his co-heirs consent to the extra-judicial settlement rendered the same
voidable.

Hence, the present Petitions for Review on Certiorari.

The Issues

COMPILED BY: Jo-Al Y. Gealon


Page 44 of 102
LABRADOR NOTES

The issues presented for resolution by the Heirs of Policronio in G.R. No. 165748 are as follows:
I.

Whether the Court of Appeals is correct in ruling that the Deed of Absolute Sale of 25
October 1969 is void for being absolutely fictitious and in relation therewith, may
parol evidence be entertained to thwart its binding effect after the parties have both
died?

Assuming that indeed the said document is simulated, whether or not the parties
thereto including their successors in interest are estopped to question its validity,
they being bound by Articles 1412 and 1421 of the Civil Code?

II.

Whether prescription applies to bar any question respecting the validity of the Deed
of Absolute Saledated 25 October 1969? Whether prescription applies to bar any
collateral attack on the validity of the deed of absolute sale executed 21 years
earlier?

III.

Whether the Court of Appeals correctly ruled in nullifying the Deed of Extrajudicial
Partition because Conrado Ureta signed the same without the written authority from
his siblings in contravention of Article 1878 in relation to Article 1390 of the Civil
Code and in relation therewith, whether the defense of ratification and/or
preterition raised for the first time on appeal may be entertained?
The issues presented for resolution by the Heirs of Alfonso in G.R. No. 165930 are as follows:

I.

Whether or not grave error was committed by the Trial Court and Court of Appeals in
declaring the Deed of Sale of subject properties as absolutely simulated and null and
void thru parol evidence based on their factual findings as to its fictitious nature,
and there being waiver of any objection based on violation of the parol evidence
rule.

II.

Whether or not the Court of Appeals was correct in holding that Conrado Uretas lack
of capacity to give his co-heirs consent to the Extra-Judicial Partition rendered the
same voidable.

III.

Granting arguendo that Conrado Ureta was not authorized to represent his co-heirs
and there was no ratification, whether or not the Court of Appeals was correct in
ordering the remand of the case to the Regional Trial Court for partition of the estate
of Alfonso Ureta.

IV.

Since the sale in favor of Policronio Ureta Sr. was null and void ab initio, the
properties covered therein formed part of the estate of the late Alfonso Ureta and
was correctly included in the Deed of Extrajudicial Partition even if no prior action
for nullification of the sale was filed by the heirs of Liberato Ureta.

V.

Whether or not the heirs of Policronio Ureta Sr. can claim that estoppel based on
Article 1412 of the Civil Code as well as the issue of prescription can still be raised
on appeal.

COMPILED BY: Jo-Al Y. Gealon


Page 45 of 102
LABRADOR NOTES

These various contentions revolve around two major issues, to wit: (1) whether the Deed of Sale is
valid, and (2) whether the Deed of Extra-Judicial Partition is valid. Thus, the assigned errors shall be discussed
jointly and in seriatim.

The Ruling of the Court

Validity of the Deed of Sale

Two veritable legal presumptions bear on the validity of the Deed of Sale: (1) that there was sufficient
consideration for the contract; and (2) that it was the result of a fair and regular private transaction. If shown
to hold, these presumptions infer prima facie the transactions validity, except that it must yield to the
evidence adduced.[10]

As will be discussed below, the evidence overcomes these two presumptions.

Absolute Simulation

First, the Deed of Sale was not the result of a fair and regular private transaction because it was absolutely
simulated.

The Heirs of Policronio argued that the land had been validly sold to Policronio as the Deed of Sale
contained all the essential elements of a valid contract of sale, by virtue of which, the subject properties were
transferred in his name as evidenced by the tax declaration. There being no invalidation prior to the execution
of the Deed of Extra-Judicial Partition, the probity and integrity of the Deed of Sale should remain
undiminished and accorded respect as it was a duly notarized public instrument.

The Heirs of Policronio posited that his loyal services to his father and his being the eldest among Alfonsos
children, might have prompted the old man to sell the subject lands to him at a very low price as an advance
inheritance. They explained that Policronios failure to take possession of the subject lands and to claim their
produce manifests a Filipino family practice wherein a child would take possession and enjoy the fruits of the
land sold by a parent only after the latters death. Policronio simply treated the lands the same way his father
Alfonso treated them - where his children enjoyed usufructuary rights over the properties, as opposed to
appropriating them exclusively to himself. They contended that Policronios failure to take actual possession of
the lands did not prove that he was not the owner as he was merely exercising his right to dispose of
them. They argue that it was an error on the part of the CA to conclude that ownership by Policronio was not
established by his failure to possess the properties sold. Instead, emphasis should be made on the fact that
the tax declarations, being indicia of possession, were in Policronios name.

They further argued that the Heirs of Alfonso failed to appreciate that the Deed of Sale was clear
enough to convey the subject parcels of land. Citing jurisprudence, they contend that there is a presumption
that an instrument sets out the true agreement of the parties thereto and that it was executed for valuable
consideration,[11] and where there is no doubt as to the intention of the parties to a contract, the literal
meaning of the stipulation shall control.[12] Nowhere in the Deed of Sale is it indicated that the transfer was
only for taxation purposes. On the contrary, the document clearly indicates that the lands were sold.
Therefore, they averred that the literal meaning of the stipulation should control.

The Court disagrees.

COMPILED BY: Jo-Al Y. Gealon


Page 46 of 102
LABRADOR NOTES

The Court finds no cogent reason to deviate from the finding of the CA that the Deed of Sale is null
and void for being absolutely simulated. The Civil Code provides:

Art. 1345. Simulation of a contract may be absolute or relative. The former takes place when
the parties do not intend to be bound at all; the latter, when the parties conceal their true
agreement.

Art. 1346. An absolutely simulated or fictitious contract is void. A relative simulation, when it
does not prejudice a third person and is not intended for any purpose contrary to law, morals,
good customs, public order or public policy binds the parties to their real agreement.

Valerio v. Refresca[13] is instructive on the matter of simulation of contracts:

In absolute simulation, there is a colorable contract but it has no substance as the


parties have no intention to be bound by it. The main characteristic of an absolute simulation
is that the apparent contract is not really desired or intended to produce legal effect or in any
way alter the juridical situation of the parties. As a result, an absolutely simulated or fictitious
contract is void, and the parties may recover from each other what they may have given
under the contract. However, if the parties state a false cause in the contract to conceal their
real agreement, the contract is relatively simulated and the parties are still bound by their real
agreement. Hence, where the essential requisites of a contract are present and the simulation
refers only to the content or terms of the contract, the agreement is absolutely binding and
enforceable between the parties and their successors in interest.

Lacking, therefore, in an absolutely simulated contract is consent which is essential to a valid and
enforceable contract.[14] Thus, where a person, in order to place his property beyond the reach of his
creditors, simulates a transfer of it to another, he does not really intend to divest himself of his title and
control of the property; hence, the deed of transfer is but a sham.[15] Similarly, in this case, Alfonso simulated
a transfer to Policronio purely for taxation purposes, without intending to transfer ownership over the subject
lands.

The primary consideration in determining the true nature of a contract is the intention of the
parties. If the words of a contract appear to contravene the evident intention of the parties, the latter shall
prevail. Such intention is determined not only from the express terms of their agreement, but also from the
contemporaneous and subsequent acts of the parties.[16]The true intention of the parties in this case was
sufficiently proven by the Heirs of Alfonso.

The Heirs of Alfonso established by a preponderance of evidence[17] that the Deed of Sale was one of
the four (4) absolutely simulated Deeds of Sale which involved no actual monetary consideration, executed by
Alfonso in favor of his children, Policronio, Liberato, and Prudencia, and his second wife, Valeriana, for
taxation purposes.

Amparo Castillo, the daughter of Liberato, testified, to wit:

Q: Now sometime in the year 1969 can you recall if your grandfather and his children [met] in
your house?

A: Yes sir, that was sometime in October 1969 when they [met] in our house, my grandfather,
my late uncle Policronio Ureta, my late uncle Liberato Ureta, my uncle Francisco Ureta, and
then my auntie Prudencia Ureta they talk[ed] about, that idea came from my uncle Francisco
Ureta to [sell] some parcels of land to his children to lessen the inheritance tax whatever
happened to my grandfather, actually no money involved in this sale.

Q: Now you said there was that agreement, verbal agreement. [W]here were you when this
Alfonso Ureta and his children gather[ed] in your house?

A: I was near them in fact I heard everything they were talking [about]

xxx

COMPILED BY: Jo-Al Y. Gealon


Page 47 of 102
LABRADOR NOTES

Q: Were there documents of sale executed by Alfonso Ureta in furtherance of their verbal
agreement?

A: Yes sir.

Q: To whom in particular did your grandfather Alfonso Ureta execute this deed of sale without
money consideration according to you?

A: To my uncle Policronio Ureta and to Prudencia Ureta Panadero.

Q: And who else?

A: To Valeriana dela Cruz.

Q: How about your father?

A: He has.[18]

The other Deeds of Sale executed by Alfonso in favor of his children Prudencia and Liberato, and
second wife Valeriana, all bearing the same date of execution, were duly presented in evidence by the Heirs of
Alfonso, and were uncontested by the Heirs of Policronio. The lands which were the subject of these Deeds of
Sale were in fact included in the Deed of Extra-Judicial Partition executed by all the heirs of Alfonso, where it
was expressly stipulated:

That the above-named Amparo U. Castillo, Prudencia U. Paradero, Conrado B. Ureta


and Merlinda U. Rivera do hereby recognize and acknowledge as a fact that the properties
presently declared in their respective names or in the names of their respective parents and
are included in the foregoing instrument are actually the properties of the deceased Alfonso
Ureta and were transferred only for the purpose of effective administration and development
and convenience in the payment of taxes and, therefore, all instruments conveying or
affecting the transfer of said properties are null and void from the beginning.[19]

As found by the CA, Alfonso continued to exercise all the rights of an owner even after the execution of
the Deeds of Sale. It was undisputed that Alfonso remained in possession of the subject lands and enjoyed
their produce until his death. No credence can be given to the contention of the Heirs of Policrionio that their
father did not take possession of the subject lands or enjoyed the fruits thereof in deference to a Filipino family
practice. Had this been true, Policronio should have taken possession of the subject lands after his father died.
On the contrary, it was admitted that neither Policronio nor his heirs ever took possession of the subject lands
from the time they were sold to him, and even after the death of both Alfonso and Policronio.

It was also admitted by the Heirs of Policronio that the tenants of the subject lands never turned over
the produce of the properties to Policronio or his heirs but only to Alfonso and the administrators of his estate.
Neither was there a demand for their delivery to Policronio or his heirs. Neither did Policronio ever pay real
estate taxes on the properties, the only payment on record being those made by his heirs in 1996 and 1997
ten years after his death. In sum, Policronio never exercised any rights pertaining to an owner over the subject
lands.

The most protuberant index of simulation of contract is the complete absence of an attempt in any
manner on the part of the ostensible buyer to assert rights of ownership over the subject properties.
Policronios failure to take exclusive possession of the subject properties or, in the alternative, to collect
rentals, is contrary to the principle of ownership. Such failure is a clear badge of simulation that renders the
whole transaction void. [20]

It is further telling that Policronio never disclosed the existence of the Deed of Sale to his children.
This, coupled with Policronios failure to exercise any rights pertaining to an owner of the subject lands, leads

COMPILED BY: Jo-Al Y. Gealon


Page 48 of 102
LABRADOR NOTES

to the conclusion that he was aware that the transfer was only made for taxation purposes and never intended
to bind the parties thereto.

As the above factual circumstances remain unrebutted by the Heirs of Policronio, the factual findings of the
RTC, which were affirmed by the CA, remain binding and conclusive upon this Court.[21]

It is clear that the parties did not intend to be bound at all, and as such, the Deed of Sale produced no
legal effects and did not alter the juridical situation of the parties. The Deed of Sale is, therefore, void for
being absolutely simulated pursuant to Article 1409 (2) of the Civil Code which provides:

Art. 1409. The following contracts are inexistent and void from the beginning:

xxx

(2) Those which are absolutely simulated or fictitious;

xxx

For guidance, the following are the most fundamental characteristics of void or inexistent contracts:

1) As a general rule, they produce no legal effects whatsoever in accordance with the principle
"quod nullum est nullum producit effectum."

2) They are not susceptible of ratification.

3) The right to set up the defense of inexistence or absolute nullity cannot be waived or
renounced.

4) The action or defense for the declaration of their inexistence or absolute nullity is
imprescriptible.

5) The inexistence or absolute nullity of a contract cannot be invoked by a person whose


interests are not directly affected.[22]

Since the Deed of Sale is void, the subject properties were properly included in the Deed of Extra-
Judicial Partition of the estate of Alfonso.

Absence and Inadequacy of Consideration

The second presumption is rebutted by the lack of consideration for the Deed of Sale.

In their Answer,[23] the Heirs of Alfonso initially argued that the Deed of Sale was void for lack of
consideration, and even granting that there was consideration, such was inadequate. The Heirs of Policronio
counter that the defenses of absence or inadequacy of consideration are not grounds to render a contract
void.

The Heirs of Policronio contended that under Article 1470 of the Civil Code, gross inadequacy of the
price does not affect a contract of sale, except as it may indicate a defect in the consent, or that the parties
really intended a donation or some other act or contract. Citing jurisprudence, they argued that inadequacy of
monetary consideration does not render a conveyance inexistent as liberality may be sufficient cause for a
valid contract, whereas fraud or bad faith may render it either rescissible or voidable, although valid until
annulled.[24] Thus, they argued that if the contract suffers from inadequate consideration, it remains valid until

COMPILED BY: Jo-Al Y. Gealon


Page 49 of 102
LABRADOR NOTES

annulled, and the remedy of rescission calls for judicial intervention, which remedy the Heirs of Alfonso failed
to take.

It is further argued that even granting that the sale of the subject lands for a consideration of
2,000.00 was inadequate, absent any evidence of the fair market value of the land at the time of its sale, it
cannot be concluded that the price at which it was sold was inadequate. [25] As there is nothing in the records
to show that the Heirs of Alfonso supplied the true value of the land in 1969, the amount of 2,000.00 must
thus stand as its saleable value.

On this issue, the Court finds for the Heirs of Alfonso.

For lack of consideration, the Deed of Sale is once again found to be void. It states that Policronio
paid, and Alfonso received, the 2,000.00 purchase price on the date of the signing of the contract:

That I, ALFONSO F. URETA, x x x for and in consideration of the sum of TWO


THOUSAND (2,000.00) PESOS, Philippine Currency, to me in hand paid by POLICRONIO M.
URETA, x x x, do hereby CEDE, TRANSFER, and CONVEY, by way of absolute sale, x x x six (6)
parcels of land x x x.[26] [Emphasis ours]

Although, on its face, the Deed of Sale appears to be supported by valuable consideration, the RTC found that
there was no money involved in the sale.[27] This finding was affirmed by the CA in ruling that the sale is void
for being absolutely simulated. Considering that there is no cogent reason to deviate from such factual
findings, they are binding on this Court.

It is well-settled in a long line of cases that where a deed of sale states that the purchase price has been paid
but in fact has never been paid, the deed of sale is null and void for lack of consideration. [28] Thus, although
the contract states that the purchase price of 2,000.00 was paid by Policronio to Alfonso for the subject
properties, it has been proven that such was never in fact paid as there was no money involved. It must,
therefore, follow that the Deed of Sale is void for lack of consideration.

Given that the Deed of Sale is void, it is unnecessary to discuss the issue on the inadequacy of
consideration.

Parol Evidence and Hearsay

The Heirs of Policronio aver that the rules on parol evidence and hearsay were violated by the CA in
ruling that the Deed of Sale was void.

They argued that based on the parol evidence rule, the Heirs of Alfonso and, specifically, Amparo
Castillo, were not in a position to prove the terms outside of the contract because they were not parties nor
successors-in-interest in the Deed of Sale in question. Thus, it is argued that the testimony of Amparo Castillo
violates the parol evidence rule.

Stemming from the presumption that the Heirs of Alfonso were not parties to the contract, it is also
argued that the parol evidence rule may not be properly invoked by either party in the litigation against the
other, where at least one of the parties to the suit is not a party or a privy of a party to the written instrument
in question and does not base a claim on the instrument or assert a right originating in the instrument or the
relation established thereby.[29]

COMPILED BY: Jo-Al Y. Gealon


Page 50 of 102
LABRADOR NOTES

Their arguments are untenable.

The objection against the admission of any evidence must be made at the proper time, as soon as the
grounds therefor become reasonably apparent, and if not so made, it will be understood to have been waived.
In the case of testimonial evidence, the objection must be made when the objectionable question is asked or
after the answer is given if the objectionable features become apparent only by reason of such answer. [30] In
this case, the Heirs of Policronio failed to timely object to the testimony of Amparo Castillo and they are, thus,
deemed to have waived the benefit of the parol evidence rule.

Granting that the Heirs of Policronio timely objected to the testimony of Amparo Castillo, their
argument would still fail.

Section 9 of Rule 130 of the Rules of Court provides:


Section 9. Evidence of written agreements. When the terms of an agreement have been
reduced to writing, it is considered as containing all the terms agreed upon and there can be,
between the parties and their successors in interest, no evidence of such terms other than the
contents of the written agreement.

However, a party may present evidence to modify, explain or add to the terms of written
agreement if he puts in issue in his pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the
parties thereto;

(c) The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors in interest after
the execution of the written agreement.

The term "agreement" includes wills.

[Emphasis ours]

Paragraphs (b) and (c) are applicable in the case at bench.

The failure of the Deed of Sale to express the true intent and agreement of the parties was clearly put
in issue in the Answer[31] of the Heirs of Alfonso to the Complaint. It was alleged that the Deed of Sale was
only made to lessen the payment of estate and inheritance taxes and not meant to transfer ownership. The
exception in paragraph (b) is allowed to enable the court to ascertain the true intent of the parties, and once
the intent is clear, it shall prevail over what the document appears to be on its face. [32] As the true intent of
the parties was duly proven in the present case, it now prevails over what appears on the Deed of Sale.

The validity of the Deed of Sale was also put in issue in the Answer, and was precisely one of the
issues submitted to the RTC for resolution.[33] The operation of the parol evidence rule requires the existence
of a valid written agreement. It is, thus, not applicable in a proceeding where the validity of such agreement is
the fact in dispute, such as when a contract may be void for lack of consideration. [34] Considering that the
Deed of Sale has been shown to be void for being absolutely simulated and for lack of consideration, the Heirs
of Alfonso are not precluded from presenting evidence to modify, explain or add to the terms of the written
agreement.

The Heirs of Policronio must be in a state of confusion in arguing that the Heirs of Alfonso may not
question the Deed of Sale for not being parties or successors-in-interest therein on the basis that the parol
evidence rule may not be properly invoked in a proceeding or litigation where at least one of the parties to the

COMPILED BY: Jo-Al Y. Gealon


Page 51 of 102
LABRADOR NOTES

suit is not a party or a privy of a party to the written instrument in question and does not base a claim on the
instrument or assert a right originating in the instrument or the relation established thereby. If their argument
was to be accepted, then the Heirs of Policronio would themselves be precluded from invoking the parol
evidence rule to exclude the evidence of the Heirs of Alfonso.

Indeed, the applicability of the parol evidence rule requires that the case be between parties and their
successors-in-interest.[35] In this case, both the Heirs of Alfonso and the Heirs of Policronio are successors-in-
interest of the parties to the Deed of Sale as they claim rights under Alfonso and Policronio, respectively. The
parol evidence rule excluding evidence aliunde, however, still cannot apply because the present case falls
under two exceptions to the rule, as discussed above.

With respect to hearsay, the Heirs of Policronio contended that the rule on hearsay was violated when
the testimony of Amparo Castillo was given weight in proving that the subject lands were only sold for
taxation purposes as she was a person alien to the contract. Even granting that they did not object to her
testimony during trial, they argued that it should not have been appreciated by the CA because it had no
probative value whatsoever.[36]

The Court disagrees.

It has indeed been held that hearsay evidence whether objected to or not cannot be given credence
for having no probative value.[37] This principle, however, has been relaxed in cases where, in addition to the
failure to object to the admissibility of the subject evidence, there were other pieces of evidence presented or
there were other circumstances prevailing to support the fact in issue. In Top-Weld Manufacturing, Inc. v.
ECED S.A.,[38] this Court held:

Hearsay evidence alone may be insufficient to establish a fact in an injunction suit


(Parker v. Furlong, 62 P. 490) but, when no objection is made thereto, it is, like any other
evidence, to be considered and given the importance it deserves. (Smith v. Delaware &
Atlantic Telegraph & Telephone Co., 51 A 464). Although we should warn of the undesirability
of issuing judgments solely on the basis of the affidavits submitted, where as here, said
affidavits are overwhelming, uncontroverted by competent evidence and not inherently
improbable, we are constrained to uphold the allegations of the respondents regarding the
multifarious violations of the contracts made by the petitioner.

In the case at bench, there were other prevailing circumstances which corroborate the testimony of
Amparo Castillo. First, the other Deeds of Sale which were executed in favor of Liberato, Prudencia, and
Valeriana on the same day as that of Policronios were all presented in evidence. Second, all the properties
subject therein were included in the Deed of Extra-Judicial Partition of the estate of Alfonso. Third, Policronio,
during his lifetime, never exercised acts of ownership over the subject properties (as he never demanded or
took possession of them, never demanded or received the produce thereof, and never paid real estate taxes
thereon). Fourth, Policronio never informed his children of the sale.

As the Heirs of Policronio failed to controvert the evidence presented, and to timely object to the
testimony of Amparo Castillo, both the RTC and the CA correctly accorded probative weight to her testimony.

Prior Action Unnecessary

The Heirs of Policronio averred that the Heirs of Alfonso should have filed an action to declare the sale
void prior to executing the Deed of Extra-Judicial Partition. They argued that the sale should enjoy
the presumption of regularity, and until overturned by a court, the Heirs of Alfonso had no authority to include
the land in the inventory of properties of Alfonsos estate. By doing so, they arrogated upon themselves the

COMPILED BY: Jo-Al Y. Gealon


Page 52 of 102
LABRADOR NOTES

power of invalidating the Deed of Sale which is exclusively vested in a court of law which, in turn, can rule
only upon the observance of due process. Thus, they contended that prescription, laches, or estoppel have set
in to militate against assailing the validity of the sale.

The Heirs of Policronio are mistaken.

A simulated contract of sale is without any cause or consideration, and is, therefore, null and void; in
such case, no independent action to rescind or annul the contract is necessary, and it may be treated as non-
existent for all purposes.[39]A void or inexistent contract is one which has no force and effect from the
beginning, as if it has never been entered into, and which cannot be validated either by time or ratification. A
void contract produces no effect whatsoever either against or in favor of anyone; it does not create, modify or
extinguish the juridical relation to which it refers.[40] Therefore, it was not necessary for the Heirs of Alfonso to
first file an action to declare the nullity of the Deed of Sale prior to executing the Deed of Extra-Judicial
Partition.
Personality to Question Sale

The Heirs of Policronio contended that the Heirs of Alfonso are not parties, heirs, or successors-in-
interest under the contemplation of law to clothe them with the personality to question the Deed of Sale. They
argued that under Article 1311 of the Civil Code, contracts take effect only between the parties, their assigns
and heirs. Thus, the genuine character of a contract which personally binds the parties cannot be put in issue
by a person who is not a party thereto. They posited that the Heirs of Alfonso were not parties to the contract;
neither did they appear to be beneficiaries by way of assignment or inheritance. Unlike themselves who are
direct heirs of Policronio, the Heirs of Alfonso are not Alfonsos direct heirs. For the Heirs of Alfonso to qualify
as parties, under Article 1311 of the Civil Code, they must first prove that they are either heirs or assignees.
Being neither, they have no legal standing to question the Deed of Sale.

They further argued that the sale cannot be assailed for being barred under Article 1421 of the Civil
Code which provides that the defense of illegality of a contract is not available to third persons whose
interests are not directly affected.

Again, the Court disagrees.

Article 1311 and Article 1421 of the Civil Code provide:

Art. 1311. Contracts take effect only between the parties, their assigns and heirs, x x x

Art. 1421. The defense of illegality of contracts is not available to third persons whose
interests are not directly affected.

The right to set up the nullity of a void or non-existent contract is not limited to the parties, as in the
case of annullable or voidable contracts; it is extended to third persons who are directly affected by the
contract. Thus, where a contract is absolutely simulated, even third persons who may be prejudiced thereby
may set up its inexistence.[41] The Heirs of Alfonso are the children of Alfonso, with his deceased children
represented by their children (Alfonsos grandchildren). The Heirs of Alfonso are clearly his heirs and
successors-in-interest and, as such, their interests are directly affected, thereby giving them the right to
question the legality of the Deed of Sale.

Inapplicability of Article 842

COMPILED BY: Jo-Al Y. Gealon


Page 53 of 102
LABRADOR NOTES

The Heirs of Policronio further argued that even assuming that the Heirs of Alfonso have an interest in
the Deed of Sale, they would still be precluded from questioning its validity. They posited that the Heirs of
Alfonso must first prove that the sale of Alfonsos properties to Policronio substantially diminished their
successional rights or that their legitimes would be unduly prejudiced, considering that under Article 842 of
the Civil Code, one who has compulsory heirs may dispose of his estate provided that he does not contravene
the provisions of the Civil Code with regard to the legitime of said heirs. Having failed to do so, they argued
that the Heirs of Alfonso should be precluded from questioning the validity of the Deed of Sale.

Still, the Court disagrees.

Article 842 of the Civil Code provides:

Art. 842. One who has no compulsory heirs may dispose by will of all his estate or any part of
it in favor of any person having capacity to succeed.

One who has compulsory heirs may dispose of his estate provided he does not contravene the
provisions of this Code with regard to the legitime of said heirs.

This article refers to the principle of freedom of disposition by will. What is involved in the case at
bench is not a disposition by will but by Deed of Sale. Hence, the Heirs of Alfonso need not first prove that the
disposition substantially diminished their successional rights or unduly prejudiced their legitimes.

Inapplicability of Article 1412

The Heirs of Policronio contended that even assuming that the contract was simulated, the Heirs of
Alfonso would still be barred from recovering the properties by reason of Article 1412 of the Civil Code, which
provides that if the act in which the unlawful or forbidden cause does not constitute a criminal offense, and
the fault is both on the contracting parties, neither may recover what he has given by virtue of the contract or
demand the performance of the others undertaking. As the Heirs of Alfonso alleged that the purpose of the
sale was to avoid the payment of inheritance taxes, they cannot take from the Heirs of Policronio what had
been given to their father.

On this point, the Court again disagrees.

Article 1412 of the Civil Code is as follows:

Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a
criminal offense, the following rules shall be observed:

(1) When the fault is on the part of both contracting parties, neither may recover what he
has given by virtue of the contract, or demand the performance of the others undertaking;

(2) When only one of the contracting parties is at fault, he cannot recover what he has given
by reason of the contract, or ask for the fulfillment of what has been promised him. The
other, who is not at fault, may demand the return of what he has given without any
obligation to comply with his promise.

Article 1412 is not applicable to fictitious or simulated contracts, because they refer to contracts with
an illegal cause or subject-matter.[42] This article presupposes the existence of a cause, it cannot refer to
fictitious or simulated contracts which are in reality non-existent.[43] As it has been determined that the Deed
of Sale is a simulated contract, the provision cannot apply to it.

Granting that the Deed of Sale was not simulated, the provision would still not apply. Since the
subject properties were included as properties of Alfonso in the Deed of Extra-Judicial Partition, they are

COMPILED BY: Jo-Al Y. Gealon


Page 54 of 102
LABRADOR NOTES

covered by corresponding inheritance and estate taxes. Therefore, tax evasion, if at all present, would not
arise, and Article 1412 would again be inapplicable.

Prescription

From the position that the Deed of Sale is valid and not void, the Heirs of Policronio argued that any
question regarding its validity should have been initiated through judicial process within 10 years from its
notarization in accordance with Article 1144 of the Civil Code. Since 21 years had already elapsed when the
Heirs of Alfonso assailed the validity of the Deed of Sale in 1996, prescription had set in. Furthermore, since
the Heirs of Alfonso did not seek to nullify the tax declarations of Policronio, they had impliedly acquiesced
and given due recognition to the Heirs of Policronio as the rightful inheritors and should, thus, be barred from
laying claim on the land.

The Heirs of Policronio are mistaken.

Article 1410 of the Civil Code provides:

Art. 1410. The action for the declaration of the inexistence of a contract does not prescribe.

This is one of the most fundamental characteristics of void or inexistent contracts. [44]

As the Deed of Sale is a void contract, the action for the declaration of its nullity, even if filed 21 years after
its execution, cannot be barred by prescription for it is imprescriptible. Furthermore, the right to set up the
defense of inexistence or absolute nullity cannot be waived or renounced.[45] Therefore, the Heirs of Alfonso
cannot be precluded from setting up the defense of its inexistence.

Validity of the Deed of Extra-Judicial Partition

The Court now resolves the issue of the validity of the Deed of Extra-Judicial Partition.

Unenforceability

The Heirs of Alfonso argued that the CA was mistaken in annulling the Deed of Extra-Judicial Partition due to
the incapacity of Conrado to give the consent of his co-heirs for lack of a special power of attorney. They
contended that what was involved was not the capacity to give consent in behalf of the co-heirs but the
authority to represent them. They argue that the Deed of Extra-Judicial Partition is not a voidable or an
annullable contract under Article 1390 of the Civil Code, but rather, it is an unenforceable or, more
specifically, an unauthorized contract under Articles 1403 (1) and 1317 of the Civil Code. As such, the Deed of
Extra-Judicial Partition should not be annulled but only be rendered unenforceable against the siblings of
Conrado.

They further argued that under Article 1317 of the Civil Code, when the persons represented without
authority have ratified the unauthorized acts, the contract becomes enforceable and binding. They contended
that the Heirs of Policronio ratified the Deed of Extra-Judicial Partition when Conrado took possession of one of
the parcels of land adjudicated to him and his siblings, and when another parcel was used as collateral for a
loan entered into by some of the Heirs of Policronio. The Deed of Extra-Judicial Partition having been ratified
and its benefits accepted, the same thus became enforceable and binding upon them.

COMPILED BY: Jo-Al Y. Gealon


Page 55 of 102
LABRADOR NOTES

The Heirs of Alfonso averred that granting arguendo that Conrado was not authorized to represent his
co-heirs and there was no ratification, the CA should not have remanded the case to the RTC for partition of
Alfonsos estate. They argued that the CA should not have applied the Civil Code general provision on
contracts, but the special provisions dealing with succession and partition. They contended that contrary to
the ruling of the CA, the extra-judicial parition was not an act of strict dominion, as it has been ruled that
partition of inherited land is not a conveyance but a confirmation or ratification of title or right to the
land.[46] Therefore, the law requiring a special power of attorney should not be applied to partitions.

On the other hand, the Heirs of Policronio insisted that the CA pronouncement on the invalidity of the
Deed of Extra-Judicial Partition should not be disturbed because the subject properties should not have been
included in the estate of Alfonso, and because Conrado lacked the written authority to represent his siblings.
They argued with the CA in ruling that a special power of attorney was required before Conrado could sign in
behalf of his co-heirs.

The Heirs of Policronio denied that they ratified the Deed of Extra-Judicial Partition. They claimed that
there is nothing on record that establishes that they ratified the partition. Far from doing so, they precisely
questioned its execution by filing a complaint. They further argued that under Article 1409 (3) of the Civil
Code, ratification cannot be invoked to validate the illegal act of including in the partition those properties
which do not belong to the estate as it provides another mode of acquiring ownership not sanctioned by law.

Furthermore, the Heirs of Policronio contended that the defenses of unenforceability, ratification, and
preterition are being raised for the first time on appeal by the Heirs of Alfonso. For having failed to raise them
during the trial, the Heirs of Alfonso should be deemed to have waived their right to do so.

The Court agrees in part with the Heirs of Alfonso.

To begin, although the defenses of unenforceability, ratification and preterition were raised by the
Heirs of Alfonso for the first time on appeal, they are concomitant matters which may be taken up. As long as
the questioned items bear relevance and close relation to those specifically raised, the interest of justice
would dictate that they, too, must be considered and resolved. The rule that only theories raised in the initial
proceedings may be taken up by a party thereto on appeal should refer to independent, not concomitant
matters, to support or oppose the cause of action.[47]

In the RTC, the Heirs of Policronio alleged that Conrados consent was vitiated by mistake and undue
influence, and that he signed the Deed of Extra-Judicial Partition without the authority or consent of his co-
heirs.

The RTC found that Conrados credibility had faltered, and his claims were rejected by the RTC as
gratuitous assertions. On the basis of such, the RTC ruled that Conrado duly represented his siblings in the
Deed of Extra-Judicial Partition.

On the other hand, the CA annulled the Deed of Extra-Judicial Partition under Article 1390 (1) of the
Civil Code, holding that a special power of attorney was lacking as required under Article 1878 (5) and (15) of
the Civil Code. These articles are as follows:

Art. 1878. Special powers of attorney are necessary in the following cases:
xxx

(5) To enter into any contract by which the ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable consideration;
xxx

COMPILED BY: Jo-Al Y. Gealon


Page 56 of 102
LABRADOR NOTES

(15) Any other act of strict dominion.

Art. 1390. The following contracts are voidable or annullable, even though there may have
been no damage to the contracting parties:

(1) Those where one of the parties is incapable of giving consent to a contract;

(2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or
fraud.

These contracts are binding, unless they are annulled by a proper action in court. They are
susceptible of ratification.

This Court finds that Article 1878 (5) and (15) is inapplicable to the case at bench. It has been held in
several cases[48] that partition among heirs is not legally deemed a conveyance of real property resulting in
change of ownership. It is not a transfer of property from one to the other, but rather, it is a confirmation or
ratification of title or right of property that an heir is renouncing in favor of another heir who accepts and
receives the inheritance. It is merely a designation and segregation of that part which belongs to each heir.
The Deed of Extra-Judicial Partition cannot, therefore, be considered as an act of strict dominion. Hence, a
special power of attorney is not necessary.

In fact, as between the parties, even an oral partition by the heirs is valid if no creditors are affected.
The requirement of a written memorandum under the statute of frauds does not apply to partitions effected by
the heirs where no creditors are involved considering that such transaction is not a conveyance of property
resulting in change of ownership but merely a designation and segregation of that part which belongs to each
heir.[49]

Neither is Article 1390 (1) applicable. Article 1390 (1) contemplates the incapacity of a party to give
consent to a contract. What is involved in the case at bench though is not Conrados incapacity to give consent
to the contract, but rather his lack of authority to do so. Instead, Articles 1403 (1), 1404, and 1317 of the Civil
Code find application to the circumstances prevailing in this case. They are as follows:

Art. 1403. The following contracts are unenforceable, unless they are ratified:

(1) Those entered into in the name of another person by one who has been given no authority
or legal representation, or who has acted beyond his powers;

Art. 1404. Unauthorized contracts are governed by Article 1317 and the principles of agency in
Title X of this Book.

Art. 1317. No one may contract in the name of another without being authorized by the latter,
or unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority or legal
representation, or who has acted beyond his powers, shall be unenforceable, unless it is
ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it
is revoked by the other contracting party.

Such was similarly held in the case of Badillo v. Ferrer:

The Deed of Extrajudicial Partition and Sale is not a voidable or an annullable contract
under Article 1390 of the New Civil Code. Article 1390 renders a contract voidable if one of the
parties is incapable of giving consent to the contract or if the contracting partys consent is
vitiated by mistake, violence, intimidation, undue influence or fraud. x x x

The deed of extrajudicial parition and sale is an unenforceable or, more specifically, an
unauthorized contract under Articles 1403(1) and 1317 of the New Civil Code. [50]

COMPILED BY: Jo-Al Y. Gealon


Page 57 of 102
LABRADOR NOTES

Therefore, Conrados failure to obtain authority from his co-heirs to sign the Deed of Extra-Judicial
Partition in their behalf did not result in his incapacity to give consent so as to render the contract voidable,
but rather, it rendered the contract valid but unenforceable against Conrados co-heirs for having been entered
into without their authority.

A closer review of the evidence on record, however, will show that the Deed of Extra-Judicial Partition
is not unenforceable but, in fact, valid, binding and enforceable against all the Heirs of Policronio for having
given their consent to the contract. Their consent to the Deed of Extra-Judicial Partition has been proven by a
preponderance of evidence.

Regarding his alleged vitiated consent due to mistake and undue influence to the Deed of Extra-
Judicial Partition, Conrado testified, to wit:

Q: Mr. Ureta you remember having signed a document entitled deed of extra judicial partition
consisting of 11 pages and which have previously [been] marked as Exhibit I for the plaintiffs?

A: Yes sir.

Q: Can you recall where did you sign this document?

A: The way I remember I signed that in our house.

Q: And who requested or required you to sign this document?

A: My aunties.

Q: Who in particular if you can recall?

A: Nay Pruding Panadero.

Q: You mean that this document that you signed was brought to your house by your Auntie
Pruding Pa[r]adero [who] requested you to sign that document?

A: When she first brought that document I did not sign that said document because I [did]
no[t] know the contents of that document.

Q: How many times did she bring this document to you [until] you finally signed the
document?

A: Perhaps 3 times.

Q: Can you tell the court why you finally signed it?

A: Because the way she explained it to me that the land of my grandfather will be partitioned.

Q: When you signed this document were your brothers and sisters who are your co-plaintiffs
in this case aware of your act to sign this document?

A: They do not know.

xxx

Q: After you have signed this document did you inform your brothers and sisters that you
have signed this document?

A: No I did not. [51]

xxx

Q: Now you read the document when it was allegedly brought to your house by your
aunt Pruding Pa[r]adero?

A: I did not read it because as I told her I still want to ask the advise of my brothers and
sisters.

COMPILED BY: Jo-Al Y. Gealon


Page 58 of 102
LABRADOR NOTES

Q: So do I get from you that you have never read the document itself or any part thereof?

A: I have read the heading.

xxx

Q: And why is it that you did not read all the pages of this document because I understand
that you know also how to read in English?

A: Because the way Nay Pruding explained to me is that the property of my grandfather will
be partitioned that is why I am so happy.

xxx

Q: You mean to say that after you signed this deed of extra judicial partition up to the present
you never informed them?

A: Perhaps they know already that I have signed and they read already the document and
they have read the document.

Q: My question is different, did you inform them?

A: The document sir? I did not tell them.

Q: Even until now?

A: Until now I did not inform them.[52]

This Court finds no cogent reason to reverse the finding of the RTC that Conrados explanations were
mere gratuitous assertions not entitled to any probative weight. The RTC found Conrados credibility to have
faltered when he testified that perhaps his siblings were already aware of the Deed of Extra-Judicial
Partition. The RTC was in the best position to judge the credibility of the witness testimony. The CA also
recognized that Conrados consent was not vitiated by mistake and undue influence as it required a special
power of attorney in order to bind his co-heirs and, as such, the CA thereby recognized that his signature was
binding to him but not with respect to his co-heirs. Findings of fact of the trial court, particularly when
affirmed by the CA, are binding to this Court.[53]

Furthermore, this Court notes other peculiarities in Conrados testimony. Despite claims of undue
influence, there is no indication that Conrado was forced to sign by his aunt, Prudencia Paradero. In fact, he
testified that he was happy to sign because his grandfathers estate would be partitioned. Conrado, thus,
clearly understood the document he signed. It is also worth noting that despite the document being brought to
him on three separate occasions and indicating his intention to inform his siblings about it, Conrado failed to
do so, and still neglected to inform them even after he had signed the partition. All these circumstances
negate his claim of vitiated consent. Having duly signed the Deed of Extra-Judicial Partition, Conrado is bound
to it. Thus, it is enforceable against him.

Although Conrados co-heirs claimed that they did not authorize Conrado to sign the Deed of Extra-Judicial
Partition in their behalf, several circumstances militate against their contention.

First, the Deed of Extra-Judicial Partition was executed on April 19, 1989, and the Heirs of Policronio claim
that they only came to know of its existence on July 30, 1995 through an issue of the Aklan Reporter. It is
difficult to believe that Conrado did not inform his siblings about the Deed of Extra-Judicial Partition or at least
broach its subject with them for more than five years from the time he signed it, especially after indicating in
his testimony that he had intended to do so.

Second, Conrado retained possession of one of the parcels of land adjudicated to him and his co-heirs
in the Deed of Extra-Judicial Partition.

COMPILED BY: Jo-Al Y. Gealon


Page 59 of 102
LABRADOR NOTES

Third, after the execution of the partition on April 19, 1989 and more than a year before they claimed
to have discovered the existence of the Deed of Extra-Judicial Partition on July 30, 1995, some of the Heirs of
Policronio, namely, Rita Solano, Macario Ureta, Lilia Tayco, and Venancio Ureta executed on June 1, 1994, a
Special Power of Attorney[54] in favor of their sister Gloria Gonzales, authorizing her to obtain a loan from a
bank and to mortgage one of the parcels of land adjudicated to them in the Deed of Extra-Judicial Partition to
secure payment of the loan. They were able to obtain the loan using the land as collateral, over which a Real
Estate Mortgage[55] was constituted. Both the Special Power of Attorney and the Real Estate Mortgage were
presented in evidence in the RTC, and were not controverted or denied by the Heirs of Policronio.

Fourth, in the letter dated August 15, 1995, sent by the counsel of the Heirs of Policronio to the Heirs
of Alfonso requesting for amicable settlement, there was no mention that Conrados consent to the Deed of
Extra-Judicial Partition was vitiated by mistake and undue influence or that they had never authorized Conrado
to represent them or sign the document on their behalf. It is questionable for such a pertinent detail to have
been omitted. The body of said letter is reproduced hereunder as follows:

Greetings:

Your nephews and nieces, children of your deceased brother Policronio Ureta, has referred to
me for appropriate legal action the property they inherited from their father consisting of six
(6) parcels of land which is covered by a Deed of Absolute Sale dated October 25, 1969. These
properties ha[ve] already been transferred to the name of their deceased father immediately
after the sale, machine copy of the said Deed of Sale is hereto attached for your ready
reference.

Lately, however, there was published an Extra-judicial Partition of the estate of Alfonso Ureta,
which to the surprise of my clients included the properties already sold to their father before
the death of said Alfonso Ureta. This inclusion of their property is erroneous and illegal
because these properties were covered by the Deed of Absolute Sale in favor of their father
Policronio Ureta no longer form part of the estate of Alfonso Ureta. Since Policronio Ureta has
[sic] died in 1974 yet, these properties have passed by hereditary succession to his children
who are now the true and lawful owners of the said properties.

My clients are still entitled to a share in the estate of Alfonso Ureta who is also their
grandfather as they have stepped into the shoes of their deceased father Policronio Ureta. But
this estate of Alfonso Ureta should already exclude the six (6) parcels of land covered by the
Deed of Absolute Sale in favor of Policronio Ureta.

My clients cannot understand why the properties of their late father [should] be
included in the estate of their grandfather and be divided among his brothers and sisters when
said properties should only be divided among themselves as children of Policronio Ureta.

Since this matter involves very close members of the same family, I have counseled my
clients that an earnest effort towards a compromise or amicable settlement be first explored
before resort to judicial remedy is pursued. And a compromise or amicable settlement can
only be reached if all the parties meet and discuss the problem with an open mind. To this
end, I am suggesting a meeting of the parties on September 16, 1995 at 2:00 P.M. at B Place
Restaurant at C. Laserna St., Kalibo, Aklan. It would be best if the parties can come or be
represented by their duly designated attorney-in-fact together with their lawyers if they so
desire so that the problem can be discussed unemotionally and intelligently.

I would, however, interpret the failure to come to the said meeting as an indication that the
parties are not willing to or interested in amicable settlement of this matter and as a go signal
for me to resort to legal and/or judicial remedies to protest the rights of my clients.

Thank you very much.[56]

Based on the foregoing, this Court concludes that the allegation of Conrados vitiated consent and lack
of authority to sign in behalf of his co-heirs was a mere afterthought on the part of the Heirs of Policronio. It
appears that the Heirs of Policronio were not only aware of the existence of the Deed of Extra-Judicial Partition
prior to June 30, 1995 but had, in fact, given Conrado authority to sign in their behalf. They are now estopped
from questioning its legality, and the Deed of Extra-Judicial Partition is valid, binding, and enforceable against
them.

COMPILED BY: Jo-Al Y. Gealon


Page 60 of 102
LABRADOR NOTES

In view of the foregoing, there is no longer a need to discuss the issue of ratification.

Preterition

The Heirs of Alfonso were of the position that the absence of the Heirs of Policronio in the partition or
the lack of authority of their representative results, at the very least, in their preterition and not in the
invalidity of the entire deed of partition. Assuming there was actual preterition, it did not render the Deed of
Extra-Judicial Partition voidable. Citing Article 1104 of the Civil Code, they aver that a partition made with
preterition of any of the compulsory heirs shall not be rescinded, but the heirs shall be proportionately obliged
to pay the share of the person omitted. Thus, the Deed of Extra-Judicial Partition should not have been
annulled by the CA. Instead, it should have ordered the share of the heirs omitted to be given to them.

The Heirs of Alfonso also argued that all that remains to be adjudged is the right of the preterited
heirs to represent their father, Policronio, and be declared entitled to his share. They contend that remand to
the RTC is no longer necessary as the issue is purely legal and can be resolved by the provisions of the Civil
Code for there is no dispute that each of Alfonsos heirs received their rightful share. Conrado, who received
Policronios share, should then fully account for what he had received to his other co-heirs and be directed to
deliver their share in the inheritance.

These arguments cannot be given credence.

Their posited theory on preterition is no longer viable. It has already been determined that the Heirs
of Policronio gave their consent to the Deed of Extra-Judicial Partition and they have not been excluded from
it. Nonetheless, even granting that the Heirs of Policronio were denied their lawful participation in the
partition, the argument of the Heirs of Alfonso would still fail.

Preterition under Article 854 of the Civil Code is as follows:


Art. 854. The preterition or omission of one, some, or all of the compulsory heirs in the direct
line, whether living at the time of the execution of the will or born after the death of the
testator, shall annul the institution of heir; but the devises and legacies shall be valid insofar
as they are not inofficious.

If the omitted compulsory heirs should die before the testator, the institution shall be
effectual, without prejudice to the right of representation.

Preterition has been defined as the total omission of a compulsory heir from the inheritance. It
consists in the silence of the testator with regard to a compulsory heir, omitting him in the testament, either
by not mentioning him at all, or by not giving him anything in the hereditary property but without expressly
disinheriting him, even if he is mentioned in the will in the latter case. [57] Preterition is thus a concept of
testamentary succession and requires a will. In the case at bench, there is no will involved. Therefore,
preterition cannot apply.

Remand Unnecessary

The Deed of Extra-Judicial Partition is in itself valid for complying with all the legal requisites, as found
by the RTC, to wit:

A persual of the Deed of Extra-judicial Partition would reveal that all the heirs and
children of Alfonso Ureta were represented therein; that nobody was left out; that all of them
received as much as the others as their shares; that it distributed all the properties of Alfonso
Ureta except a portion of parcel 29 containing an area of 14,000 square meters, more or less,
which was expressly reserved; that Alfonso Ureta, at the time of his death, left no debts; that
the heirs of Policronio Ureta, Sr. were represented by Conrado B. Ureta; all the parties signed
the document, was witnessed and duly acknowledged before Notary Public Adolfo M. Iligan of
Kalibo, Aklan; that the document expressly stipulated that the heirs to whom some of the

COMPILED BY: Jo-Al Y. Gealon


Page 61 of 102
LABRADOR NOTES

properties were transferred before for taxation purposes or their children, expressly recognize
and acknowledge as a fact that the properties were transferred only for the purpose of
effective administration and development convenience in the payment of taxes and, therefore,
all instruments conveying or effecting the transfer of said properties are null and void from the
beginning (Exhs. 1-4, 7-d).[58]

Considering that the Deed of Sale has been found void and the Deed of Extra-Judicial Partition valid,
with the consent of all the Heirs of Policronio duly given, there is no need to remand the case to the court of
origin for partition.

WHEREFORE, the petition in G.R. No. 165748 is DENIED. The petition in G.R. No. 165930
is GRANTED. The assailed April 20, 2004 Decision and October 14, 2004 Resolution of the Court of Appeals in
CA-G.R. CV No. 71399, are hereby MODIFIED in this wise:

(1) The Deed of Extra-Judicial Partition, dated April 19, 1989, is


VALID, and

(2) The order to remand the case to the court of origin is hereby DELETED.

SO ORDERED.

Echavez v. Dozen Construction and Development Corp., G.R. No. 192916, Oct. 11, 2010
MANUEL A. ECHAVEZ, G.R. No. 192916
Petitioner,
Present:

- versus - CARPIO MORALES, J., Chairperson,


BRION,
BERSAMIN,
DOZEN CONSTRUCTION AND DEVELOPMENT VILLARAMA, JR., and
CORPORATION and THE REGISTER OF DEEDS SERENO, JJ.
OF CEBU CITY, Promulgated:
Respondents. October 11, 2010
x----------------------------------------------------------------------------------------x

RESOLUTION

BRION, J.:

Vicente Echavez (Vicente) was the absolute owner of several lots in Cebu City, which includes Lot No.

1956-A and Lot No. 1959 (subject lots). On September 7, 1985, Vicente donated the subject lots to petitioner

Manuel Echavez (Manuel) through a Deed of Donation Mortis Causa.[1] Manuel accepted the donation.

In March 1986, Vicente executed a Contract to Sell over the same lots in favor of Dozen Construction

and Development Corporation (Dozen Corporation). In October 1986, they executed two Deeds of Absolute

Sale over the same properties covered by the previous Contract to Sell.

On November 6, 1986, Vicente died. Emiliano Cabanig, Vicentes nephew, filed a petition for the

settlement of Vicentes intestate estate. On the other hand, Manuel filed a petition to approve Vicentes

donation mortis causa in his favor and an action to annul the contracts of sale Vicente executed in

favor of Dozen Corporation. These cases were jointly heard.

The Regional Trial Court (RTC) dismissed Manuels petition to approve the donation and his

action for annulment of the contracts of sale.[2] The RTC found that the execution of a Contract to Sell in

COMPILED BY: Jo-Al Y. Gealon


Page 62 of 102
LABRADOR NOTES

favor of Dozen Corporation, after Vicente had donated the lots to Manuel, was an equivocal act that revoked

the donation. The Court of Appeals (CA) affirmed the RTCs decision.[3] The CA held that since the donation in

favor of Manuel was a donation mortis causa, compliance with the formalities for the validity of wills should

have been observed. The CA found that the deed of donation did not contain an attestation clause

and was therefore void.

The Petition for Review on Certiorari

Manuel claims that the CA should have applied the rule on substantial compliance in the construction of a will

to Vicentes donation mortis causa. He insists that the strict construction of a will was not warranted in the

absence of any indication of bad faith, fraud, or substitution in the execution of the Deed of Donation Mortis

Causa. He argues that the CA ignored the Acknowledgment portion of the deed of donation, which contains

the import and purpose of the attestation clause required in the execution of wills. The Acknowledgment

reads:
BEFORE ME, Notary Public, this 7th day of September 1985 at Talisay, Cebu, personally
appeared VICENTE S. Echavez with Res. Cert. No. 16866094 issued on April 10, 1985 at [sic]
Talisay, Cebu known to me to be the same person who executed the foregoing instrument of
Deed of Donartion Mortis Causa before the Notary Public and in the presence of the foregoing
three (3) witnesses who signed this instrument before and in the presence of each other and
of the Notary Public and all of them acknowledge to me that the same is their voluntary act
and deed. [Emphasis in the original.]

THE COURTS RULING

The CA correctly declared that a donation mortis causa must comply with the formalities prescribed by

law for the validity of wills,[4] otherwise, the donation is void and would produce no effect. [5] Articles 805 and

806 of the Civil Code should have been applied.

As the CA correctly found, the purported attestation clause embodied in the Acknowledgment portion

does not contain the number of pages on which the deed was written. The exception to this rule in Singson v.

Florentino[6] and Taboada v. Hon. Rosal,[7] cannot be applied to the present case, as the facts of this case are

not similar with those of Singson and Taboada. In those cases, the Court found that although the attestation

clause failed to state the number of pages upon which the will was written, the number of pages was stated in

one portion of the will. This is not the factual situation in the present case.

Even granting that the Acknowledgment embodies what the attestation clause requires, we are not

prepared to hold that an attestation clause and an acknowledgment can be merged in one statement.

That the requirements of attestation and acknowledgment are embodied in two separate provisions of the Civil

Code (Articles 805 and 806, respectively) indicates that the law contemplates two distinct acts that serve

different purposes. An acknowledgment is made by one executing a deed, declaring before a competent officer

or court that the deed or act is his own. On the other hand, the attestation of a will refers to the act of the

instrumental witnesses themselves who certify to the execution of the instrument before them and to the

manner of its execution.[8]

COMPILED BY: Jo-Al Y. Gealon


Page 63 of 102
LABRADOR NOTES

Although the witnesses in the present case acknowledged the execution of the Deed of

Donation Mortis Causa before the notary public, this is not the avowal the law requires from the instrumental

witnesses to the execution of a decedents will. An attestation must state all the details the third paragraph of

Article 805 requires. In the absence of the required avowal by the witnesses themselves, no attestation clause

can be deemed embodied in the Acknowledgement of the Deed of Donation Mortis Causa.

Finding no reversible error committed by the CA, the Court hereby DENIES Manuels petition for

review on certiorari.

SO ORDERED.

Del Rosario v. Ferrer, G.R. No. 187056, Sep. 20, 2010


JARABINI G. DEL ROSARIO, G.R. No. 187056
Petitioner,
Present:
CARPIO, J., Chairperson,
- versus - PERALTA,
BERSAMIN,*
ABAD, and
PEREZ,** JJ.
ASUNCION G. FERRER, substituted
by her heirs, VICENTE, PILAR,
ANGELITO, FELIXBERTO, JR.,
all surnamed G. FERRER, and Promulgated:
MIGUELA FERRER ALTEZA,
Respondents. September 20, 2010

x --------------------------------------------------------------------------------------- x

DECISION

ABAD, J.:

This case pertains to a gift, otherwise denominated as a donation mortis causa, which in reality is a

donation inter vivos made effective upon its execution by the donors and acceptance thereof by the donees,

and immediately transmitting ownership of the donated property to the latter, thus precluding a subsequent

assignment thereof by one of the donors.

The Facts and the Case

On August 27, 1968 the spouses Leopoldo and Guadalupe Gonzales executed a document entitled

Donation Mortis Causa[1] in favor of their two children, Asuncion and Emiliano, and their granddaughter,

Jarabini (daughter of their predeceased son, Zoilo) covering the spouses 126-square meter lot and the house

on it in Pandacan, Manila[2] in equal shares. The deed of donation reads:

It is our will that this Donation Mortis Causa shall be irrevocable and shall be
respected by the surviving spouse.

It is our will that Jarabini Gonzales-del Rosario and Emiliano Gonzales will
continue to occupy the portions now occupied by them.

It is further our will that this DONATION MORTIS CAUSA shall not in any way
affect any other distribution of other properties belonging to any of us donors
whether testate or intestate and where ever situated.

COMPILED BY: Jo-Al Y. Gealon


Page 64 of 102
LABRADOR NOTES

It is our further will that any one surviving spouse reserves the right,
ownership, possession and administration of this property herein donated and
accepted and this Disposition and Donation shall be operative and effective upon the
death of the DONORS.[3]

Although denominated as a donation mortis causa, which in law is the equivalent of a will, the deed

had no attestation clause and was witnessed by only two persons. The named donees, however, signified their

acceptance of the donation on the face of the document.

Guadalupe, the donor wife, died in September 1968. A few months later or on December 19, 1968,

Leopoldo, the donor husband, executed a deed of assignment of his rights and interests in subject property to

their daughter Asuncion.Leopoldo died in June 1972.

In 1998 Jarabini filed a petition for the probate of the August 27, 1968 deed of donation mortis

causa before the Regional Trial Court (RTC) of Manila in Sp. Proc. 98-90589.[4] Asuncion opposed the petition,

invoking his father Leopoldos assignment of his rights and interests in the property to her.

After trial, the RTC rendered a decision dated June 20, 2003, [5] finding that the donation was in fact

one made inter vivos, the donors intention being to transfer title over the property to the donees during the

donors lifetime, given its irrevocability. Consequently, said the RTC, Leopoldos subsequent assignment of his

rights and interest in the property was void since he had nothing to assign. The RTC thus directed the

registration of the property in the name of the donees in equal shares.[6]

On Asuncions appeal to the Court of Appeals (CA), the latter rendered a decision on December 23,
[7]
2008, reversing that of the RTC. The CA held that Jarabini cannot, through her petition for the probate of the

deed of donation mortis causa, collaterally attack Leopoldos deed of assignment in Asuncions favor. The CA

further held that, since no proceeding exists for the allowance of what Jarabini claimed was actually a

donation inter vivos, the RTC erred in deciding the case the way it did. Finally, the CA held that the donation,

being one given mortis causa, did not comply with the requirements of a notarial will,[8] rendering the same

void. Following the CAs denial of Jarabinis motion for reconsideration,[9] she filed the present petition with this

Court.

Issue Presented

The key issue in this case is whether or not the spouses Leopoldo and Guadalupes donation to

Asuncion, Emiliano, and Jarabini was a donation mortis causa, as it was denominated, or in fact a

donation inter vivos.

The Courts Ruling

That the document in question in this case was captioned Donation Mortis Causa is not

controlling. This Court has held that, if a donation by its terms is inter vivos, this character is not altered by

the fact that the donor styles it mortis causa.[10]

COMPILED BY: Jo-Al Y. Gealon


Page 65 of 102
LABRADOR NOTES

In Austria-Magat v. Court of Appeals,[11] the Court held that irrevocability is a quality absolutely

incompatible with the idea of conveyances mortis causa, where revocability is precisely the essence of the

act. A donation mortis causa has the following characteristics:

1. It conveys no title or ownership to the transferee before the death of the


transferor; or, what amounts to the same thing, that the transferor should retain the
ownership (full or naked) and control of the property while alive;

2. That before his death, the transfer should be revocable by the transferor at
will, ad nutum; but revocability may be provided for indirectly by means of a
reserved power in the donor to dispose of the properties conveyed; and

3. That the transfer should be void if the transferor should survive the
transferee.[12] (Underscoring supplied)

The Court thus said in Austria-Magat that the express irrevocability of the donation is the distinctive

standard that identifies the document as a donation inter vivos. Here, the donors plainly said that it is our will

that this Donation Mortis Causa shall be irrevocable and shall be respected by the surviving spouse. The intent

to make the donation irrevocable becomes even clearer by the proviso that a surviving donor shall respect the

irrevocability of the donation. Consequently, the donation was in reality a donation inter vivos.

The donors in this case of course reserved the right, ownership, possession, and administration of the

property and made the donation operative upon their death. But this Court has consistently held that such
reservation (reddendum) in the context of an irrevocable donation simply means that the donors parted with

their naked title, maintaining only beneficialownership of the donated property while they lived.[13]

Notably, the three donees signed their acceptance of the donation, which acceptance the deed

required.[14] This Court has held that an acceptance clause indicates that the donation is inter vivos, since

acceptance is a requirement only for such kind of donations. Donations mortis causa, being in the form of a

will, need not be accepted by the donee during the donors lifetime.[15]

Finally, as Justice J. B. L. Reyes said in Puig v. Peaflorida,[16] in case of doubt, the conveyance should

be deemed a donation inter vivos rather than mortis causa, in order to avoid uncertainty as to the ownership

of the property subject of the deed.

Since the donation in this case was one made inter vivos, it was immediately operative and final. The

reason is that such kind of donation is deemed perfected from the moment the donor learned of the donees

acceptance of the donation.The acceptance makes the donee the absolute owner of the property donated.[17]

Given that the donation in this case was irrevocable or one given inter vivos, Leopoldos subsequent

assignment of his rights and interests in the property to Asuncion should be regarded as void for, by then, he

had no more rights to assign.He could not give what he no longer had. Nemo dat quod non habet.[18]

The trial court cannot be faulted for passing upon, in a petition for probate of what was initially

supposed to be a donation mortis causa, the validity of the document as a donation inter vivos and the nullity

of one of the donors subsequent assignment of his rights and interests in the property. The Court has held

before that the rule on probate is not inflexible and absolute.[19] Moreover, in opposing the petition for probate

COMPILED BY: Jo-Al Y. Gealon


Page 66 of 102
LABRADOR NOTES

and in putting the validity of the deed of assignment squarely in issue, Asuncion or those who substituted her

may not now claim that the trial court improperly allowed a collateral attack on such assignment.

WHEREFORE, the Court GRANTS the petition, SETS ASIDE the assailed December 23, 2008

Decision and March 6, 2009 Resolution of the Court of Appeals in CA-G.R. CV 80549, and REINSTATES in

toto the June 20, 2003 Decision of the Regional Trial Court of Manila, Branch 19, in Sp. Proc. 98-90589.

SO ORDERED.

Orendain, Jr. v. Trusteeship of the Estate of Dona Margarita Rodriguez, G.R. No. 168660, June 30,
2009
HILARION, JR. and ENRICO ORENDAIN, represented by FE D. G.R. No. 168660
ORENDAIN,
Petitioners,[1] Present:

YNARES-SANTIAGO, J.,
Chairperson,
- versus - CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.
TRUSTEESHIP OF THE ESTATE OF DOA MARGARITA
RODRIGUEZ, Promulgated:
Respondent.
June 30, 2009

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This petition for certiorari, filed under Rule 65 of the Rules of Court, assails the Order [2] of the Regional Trial

Court (RTC) of Manila, Branch 4 in SP. PROC. No. 51872 which denied petitioners (Hilarion, Jr. and Enrico

Orendain, heirs of Hilarion Orendain, Sr.) Motion to Dissolve the Trusteeship of the Estate of Doa Margarita

Rodriguez.

First, we revisit the long settled facts.

On July 19, 1960, the decedent, Doa Margarita Rodriguez, died in Manila, leaving a last will and

testament. On September 23, 1960, the will was admitted to probate by virtue of the order of the Court of

First Instance of Manila City (CFI Manila) in Special Proceeding No. 3845. On August 27, 1962, the CFI Manila

approved the project of partition presented by the executor of Doa Margarita Rodriguezs will.

At the time of her death, the decedent left no compulsory or forced heirs and, consequently, was

completely free to dispose of her properties, without regard to legitimes,[3] as provided in her will. Some of

Doa Margarita Rodriguezs testamentary dispositions contemplated the creation of a trust to manage the
income from her properties for distribution to beneficiaries specified in the will, to wit:

COMPILED BY: Jo-Al Y. Gealon


Page 67 of 102
LABRADOR NOTES

xxxx

CLAUSULA SEGUNDA O PANG-DALAWA: - x x x Ipinaguutos ko na matapos magawa


ang pagaayos ng aking Testamentaria at masara na ang Expediente ng aking Testamentaria,
ang lahat ng pagaare ko sa aking ipinaguutos na pangasiwaan sa habang panahon ay
ipagbukas sa Juzgado ng tinatawag na FIDEICOMISO at ang ilalagay na fideicomisario ang
manga taong nasabi ko na sa itaas nito, at ang kanilang gaganahin ay ang nasasabi sa
testamentong ito na gaganahen ng tagapangasiwa at albacea. x x x x

CLAUSULA TERCERA O PANG-TATLO: - Ipinaguutos ko na ang kikitain ng lahat ng aking


pagaare, na ang hindi lamang kasama ay ang aking lupain na nasasabi sa Certificado de
Transferencia de Titulo No. 7156 (Lote No. 1088-C), Certificado Original de Titulo No. 4588
(LOTE No. 2492), Certificado Original de Titulo No. 4585 (Lote No. 1087) ng lalawigan ng
Quezon, at ang bahaging maytanim na palay ng lupang nasasaysay sa Certificado Original de
Titulo No. 4587 (Lote No. 1180) ng Quezon, ay IIPUNIN SA BANCO upang maibayad sa
anillaramiento, ang tinatawag na estate Tax, ang impuesto de herencia na dapat pagbayaran
ng aking pinagbibigyan na kasama na din ang pagbabayaran ng Fideicomiso, gastos sa
abogado na magmamakaalam ng testamentaria at gastos sa Husgado. Ngunit bago ipasok sa
Banco ang kikitaen ng nabangit na manga gagaare, ay aalisin muna ang manga sumusunod
na gastos:

xxxx

CLAUSULA DECIMA O PANG-SAMPU: - Ipinaguutos ko na ang manga pagaareng nasasabi sa


Clausulang ito ay pangangasiwaan sa habang panahon, at ito nga ang ipagbubukas ng
Fideicomiso sa Jusgado pagkatapos na maayos ang naiwanan kong pagaare. Ang
pangangasiwaang pagaare ay ang manga sumusunod:

xxxx

Ang lahat ng pagaaring nasasabe sa Clusulang ito (hindi kasama ang generator at
automovil) hindi maisasanla o maipagbibili kailan man, maliban sa pagaaring nasa
Quezon Boulevard, Maynila, na maaring isanla kung walang fondo na gagamitin sa
ipagpapaigui o ipagpapagawa ng panibago alinsunod sa kaayusang hinihingi ng
panahon.

xxxx

CLAUSULA DECIMA SEGUNDA O PANG-LABING DALAWA: - Ang kuartang matitipon sa Banco


ayon sa tagubilin na nasasaysay sa Clausulang sinusundan nito ay gagamitin sa manga
sumusunod na pagkakagastusan; at ganito din ang gagawin sa lahat ng aking pagaare na
nasasakop ng fideicomiso at walang ibang pinaguukulan. Ang pagkakagastusan na ito ay ang
sumusunod:

xxxx

CLAUSULA VIGESIMA CUARTA O PANG-DALAWANGPU AT APAT: - Ipinaguutos ko sa aking


manga Tagapangasiwa na sa fondong ipinapasok sa Banco para sa gastos ng Nia Maria, Misa
at iba pa, kukuha sila na kakailanganin para maitulong sa manga sumusunod: Florentina
Luna, Roberta Ponce, Marciada Ponce, Benita Ponce, Constancia Pineda, Regino Pineda, Tomas
Payumo, Rosito Payumo, Loreto Payumo, Brigido Santos at Quintin Laino, Hilarion Orendain at
manga anak. Ang manga dalaga kung sakali at inabutan ng pagkamatay ko na ako ay
pinagtiisan at hindi humiwalay sa akin, kung magkasakit ay ipagagamot at ibabayad sa
medico, at ibibili ng gamot, at kung kailangan ang operacion ay ipaooperacion at ipapasok sa
Hospital na kinababagayan ng kaniyang sakit, at kahit maypagkakautang pa sa impuesto de
herencia at estate tax ay ikukuha sa nasabing fondo at talagang ibabawas doon, at ang
paggagamot ay huag pagtutuusan, at ang magaalaga sa kanya ay bibigyan ng gastos sa
pagkain at sa viaje at iba pa na manga kailangan ng nagaalaga. Kung nasa provincia at
dadalhin ditto sa Maynila ay bibigyan ng gastos sa viaje ang maysakit at ang kasama sa viaje,
at ang magaalaga ay dito tutuloy sa bahay sa Tuberias at Tanduay na natatalaga sa manga
may servicio sa akin, at kung mamatay at gusting iuwi sa provincia ang bangkay ay iupa at
doon ilibing at dapit ng Pare at hated sa nicho na natotoka sa kanya. Ganito din ang gagawain
kung mayasawa man ay nasa poder ko ng ako ay mamatay. Ang wala sa poder ko datapua at
nagservicio sa akin, kaparis ng encargado, ang gagawaing tulong ay ipagagamot, ibibili ng
gamot at kung kailangan ang operacion o matira sa Hospital, ipaooperacion at ipagbabayad sa
Hospital.[4] (emphasis supplied)

xxxx

COMPILED BY: Jo-Al Y. Gealon


Page 68 of 102
LABRADOR NOTES

As regards Clause 10 of the will which explicitly prohibits the alienation or mortgage of the properties specified

therein, we had occasion to hold, in Rodriguez, etc., et al. v. Court of Appeals, et al.,[5] that the clause, insofar

as the first twenty-year period is concerned, does not violate Article 870 [6] of the Civil Code. We declared,

thus:

The codal provision does not need any interpretation. It speaks categorically. What is declared
void is the testamentary disposition prohibiting alienation after the twenty-year period. In the
interim, such a provision does not suffer from the vice of invalidity. It cannot be stricken
down. Time and time again, We have said, and We now repeat, that when a legal provision is
clear and to the point, there is no room for interpretation. It must be applied according to its
literal terms.

Even with the purpose that the testatrix had in mind were not as unequivocal, still the same
conclusion emerges. There is no room for intestacy as would be the effect if the challenged
resolution of January 8, 1968 were not set aside. The wishes of the testatrix constitute the
law. Her will must be given effect. This is so even if there could be an element of uncertainty
insofar as the ascertainment thereof is concerned. In the language of a Civil Code provision: If
a testamentary disposition admits of different interpretations, in case of doubt, that
interpretation by which the disposition is to be operative shall be preferred. Nor is this all. A
later article of the Civil Code equally calls for observance. Thus: The words of a will are to
receive an interpretation which will give to every expression some effect, rather than one
which will render any of the expressions inoperative; and of two modes of interpreting a will,
that is to be preferred which will prevent intestacy.

xxxx

Nothing can be clearer, therefore, than that [Petra, Antonia and Rosa, all surnamed
Rodriguez] could not challenge the provision in question. [They] had no right to vindicate.
Such a right may never arise. The twenty-year period is still with us. What would transpire
thereafter is still locked up in the inscrutable future, beyond the power of mere mortals to
foretell. At any rate, We cannot anticipate. Nor should We. We do not possess the power
either of conferring a cause of action to a party when, under the circumstances disclosed, it
had none.[7]

Almost four decades later, herein petitioners Hilarion, Jr. and Enrico Orendain, heirs of Hilarion Orendain, Sr.

who was mentioned in Clause 24 of the decedents will, moved to dissolve the trust on the decedents estate,

which they argued had been in existence for more than twenty years, in violation of Articles 867 [8] and 870 of

the Civil Code, and inconsistent with our ruling in Rodriguez v. Court of Appeals.[9]

On April 18, 2005, the RTC issued the herein assailed Order:[10]

The above-cited provisions of the civil code find no application in the present motion to
dissolve the trust created by the testatrix. There is no question that the testamentary
disposition of Doa Margarita Rodriguez prohibiting the mortgage or sale of properties
mentioned in clause X of her Last Will and Testament forevermore is void after the lapse of the
twenty year period. However, it does not mean that the trust created by [the] testatrix in
order to carry out her wishes under clauses 12, 13 and 24 will also become void upon
expiration of the twenty year period. As ruled by the Supreme Court in Emetrio Barcelon v.
CA, the codal provision cited in Art. 870 is clear and unequivocal and does not need any
interpretation. What is declared void is the testamentary disposition prohibiting alienation
after the twenty year period. Hence, the trustees may dispose of the properties left by the
testatrix in order to carry out the latters testamentary disposition.

The question as to whether a trust can be perpetual, the same finds support in Article 1013[,]
paragraph 4 of the Civil Code, which provides that the Court, at the instance of an interested
party or its motion, may order the establishment of a permanent trust so that only the income
from the property shall be used. In the present case, the testatrix directed that all the twenty
five (25) pieces of property listed in the tenth clause should be placed under the trusteeship
and should be perpetually administered by the trustees and a certain percentage of the
income from the trust estate should be deposited in a bank and should be devoted for the
purposes specifically indicated in the clauses 12, 13 and 24.

COMPILED BY: Jo-Al Y. Gealon


Page 69 of 102
LABRADOR NOTES

The wishes of the testatrix constitute the law. Her will must be given effect. This is
even if there could be an element of uncertainty insofar as the ascertainment thereof is
concerned. This Court so emphatically expressed it in a decision rendered more than sixty
years ago. Thus, respect for the will of a testator as [an] expression of his last testamentary
disposition, constitutes the principal basis of the rules which the law prescribes for the correct
interpretation of all of the clauses of the will; the words and provision therein written must be
plainly construed in order to avoid a violation of his intentions and real purpose. The will of the
testator clearly and explicitly stated must be respected and complied with as an inviolable law
among the parties in interest. Such is the doctrine established by the Supreme Court of Spain,
constantly maintained in a great number of decisions.

Hence, this petition, positing the following issues:

1. WHETHER THE TRUSTEESHIP OVER THE PROPERTIES LEFT BY DOA MARGARITA


RODRIGUEZ CAN BE DISSOLVED APPLYING ARTICLES 867 AND 870 OF THE CIVIL CODE.

2. WHETHER THE LOWER COURT IS CORRECT IN STATING THAT THE ABOVE-CITED


PROVISIONS OF THE CIVIL CODE FINDS NO APPLICATION IN THE PRESENT MOTION TO
DISSOLVE THE TRUST CREATED BY THE TESTATRIX.

3. CONCOMITANT THERETO, [WHETHER] THE LOWER COURT [IS] CORRECT IN


APPLYING ARTICLE 1013 PARAGRAPH 4 OF THE CIVIL CODE.[11]

Before we delve into the foregoing issues, it is noteworthy that the present petition, albeit captioned as a

petition for certiorari, is actually a petition for review on certiorari, raising only pure questions of law. On more

than one occasion, we have allowed erroneously labeled actions based on the averments contained in the

petition or complaint.[12] Thus, we now disregard the incorrect designation and treat this as a petition for

review on certiorari under Rule 45 of the Rules of Court.

The petition is impressed with merit.

The issues being intertwined, we shall discuss them jointly.

Quite categorical from the last will and testament of the decedent is the creation of a perpetual trust

for the administration of her properties and the income accruing therefrom, for specified beneficiaries. The

decedent, in Clause 10 of her will, listed a number of properties to be placed under perpetual administration of

the trust. In fact, the decedent unequivocally forbade the alienation or mortgage of these properties. In all,

the decedent did not contemplate the disposition of these properties, but only sought to bequeath the income

derived therefrom to various sets of beneficiaries.

On this score, we held in Rodriguez v. Court of Appeals[13] that the perpetual prohibition was valid only

for twenty (20) years. We affirmed the CAs holding that the trust stipulated in the decedents will prohibiting

perpetual alienation or mortgage of the properties violated Articles 867 and 870 of the Civil Code. However,

we reversed and set aside the CAs decision which declared that that portion of the decedents estate, the

properties listed in Clause 10 of the will, ought to be distributed based on intestate succession, there being no

institution of heirs to the properties covered by the perpetual trust.

As previously quoted, we reached a different conclusion and upheld the trust, only insofar as the first

twenty-year period is concerned. We refrained from forthwith declaring the decedents testamentary
disposition as void and the properties enumerated in Clause 10 of the will as subject to intestate succession.

COMPILED BY: Jo-Al Y. Gealon


Page 70 of 102
LABRADOR NOTES

We held that, in the interim, since the twenty-year period was then still upon us, the wishes of the testatrix

ought to be respected.

Thus, at present, there appears to be no more argument that the trust created over the properties of

the decedent should be dissolved as the twenty-year period has, quite palpably, lapsed.

Notwithstanding the foregoing, the RTC ruled otherwise and held that: (a) only the perpetual

prohibition to alienate or mortgage is declared void; (b) the trust over her properties stipulated by the

testatrix in Clauses 12, 13 and 24 of the will remains valid; and (c) the trustees may dispose of these

properties in order to carry out the latters testamentary disposition.

We disagree.

Apparent from the decedents last will and testament is the creation of a trust on a specific set of

properties and the income accruing therefrom. Nowhere in the will can it be ascertained that the decedent

intended any of the trusts designated beneficiaries to inherit these properties. The decedents will did not

institute any heir thereto, as clearly shown by the following:

1. Clause 2 instructed the creation of trust;

2. Clause 3 instructed that the remaining income from specified properties, after the necessary

deductions for expenses, including the estate tax, be deposited in a fund with a bank;

3. Clause 10 enumerated the properties to be placed in trust for perpetual administration

(pangasiwaan sa habang panahon);

4. Clauses 11 and 12 directed how the income from the properties ought to be divided among, and

distributed to the different beneficiaries; and

5. Clause 24 instructed the administrators to provide medical support to certain beneficiaries, to be

deducted from the fund deposits in the bank mentioned in Clauses 2 and 3.

Plainly, the RTC was mistaken in denying petitioners motion to dissolve and ordering the disposition of

the properties in Clause 10 according to the testatrixs wishes. As regards these properties, intestacy should

apply as the decedent did not institute an heir therefor. Article 782, in relation to paragraph 2, Article 960 of

the Civil Code, provides:

Art. 782. An heir is a person called to the succession either by the provision of a will or by
operation of law.

xxxx

Art. 960. Legal or intestate succession takes place:

xxxx

(2) When the will does not institute an heir to, or dispose of all the property belonging to the
testator. In such case, legal succession shall take place only with respect to the property of
which the testator has not disposed;

xxx

We find as erroneous the RTCs holding that paragraph 4,[14] Article 1013 of the same code specifically allows a

perpetual trust, because this provision of law is inapplicable. Suffice it to state that the article is among the

COMPILED BY: Jo-Al Y. Gealon


Page 71 of 102
LABRADOR NOTES

Civil Code provisions on intestate succession, specifically on the State inheriting from a decedent, in default of

persons entitled to succeed. Under this article, the allowance for a permanent trust, approved by a court of

law, covers property inherited by the State by virtue of intestate succession. The article does not cure a void

testamentary provision which did not institute an heir. Accordingly, the article cannot be applied to dispose of

herein decedents properties.

We are not unmindful of our ruling in Palad, et al. v. Governor of Quezon Province, et al.[15] where we

declared, thus:

Article 870 of the New Civil Code, which regards as void any disposition of the testator
declaring all or part of the estate inalienable for more than 20 years, is not violated by the
trust constituted by the late Luis Palad; because the will of the testator does not interdict the
alienation of the parcels devised. The will merely directs that the income of said two parcels be
utilized for the establishment, maintenance and operation of the high school.

Said Article 870 was designed to give more impetus to the socialization of the ownership of
property and to prevent the perpetuation of large holdings which give rise to agrarian
troubles. The trust herein involved covers only two lots, which have not been shown to be a
large landholding. And the income derived therefrom is being devoted to a public and social
purpose the education of the youth of the land. The use of said parcels therefore is in a sense
socialized. There is no hint in the record that the trust has spawned agrarian conflicts. [16]

In this case, however, we reach a different conclusion as the testatrix specifically prohibited the alienation or

mortgage of her properties which were definitely more than the two (2) properties in the aforecited case. The

herein testatrixs large landholdings cannot be subjected indefinitely to a trust because the ownership thereof

would then effectively remain with her even in the afterlife.

In light of the foregoing, therefore, the trust on the testatrixs properties must be dissolved and this case

remanded to the lower court to determine the following:

1. The properties listed in Clause 10 of the will, constituting the perpetual trust, which are still within reach

and have not been disposed of as yet; and

2. The intestate heirs of the decedent, with the nearest relative of the deceased entitled to inherit the

remaining properties.

One final note. To obviate confusion, we clarify that the petitioners, although correct in moving for the

dissolution of the trust after the twenty-year period, are not necessarily declared as intestate heirs of the

decedent. Our remand of the case to the RTC means that the probate court should now make a determination

of the heirship of the intestate heirs of the decedent where petitioners, and all others claiming to be heirs of

the decedent, should establish their status as such consistent with our ruling in Heirs of Yaptinchay v. Hon. del

Rosario.[17]

WHEREFORE, premises considered, the petition is GRANTED. The Order of the Regional Trial Court of

Manila, Branch 4 in SP. PROC. No. 51872 is REVERSED and SET ASIDE. The trust approved by the Regional

Trial Court of Manila, Branch 4 in SP. PROC. No. 51872 is DISSOLVED. We ORDER the Regional Trial Court of

Manila, Branch 4 in SP. PROC. No. 51872 to determine the following:

1. the properties listed in Clause 10 of Doa Margarita Rodriguezs will, constituting the perpetual trust, which
are still within reach and have not been disposed of as yet; and

COMPILED BY: Jo-Al Y. Gealon


Page 72 of 102
LABRADOR NOTES

2. the intestate heirs of Doa Margarita Rodriguez, with the nearest relative of the decedent entitled to inherit

the remaining properties.

SO ORDERED.

Lee v. Tambago, A.C. No. 5281, Feb. 12, 2008


MANUEL L. LEE, A.C. No. 5281
Complainant,
Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA and
LEONARDO-DE CASTRO, JJ.

ATTY. REGINO B. TAMBAGO,


Respondent. Promulgated:

February 12, 2008

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION

CORONA, J.:

In a letter-complaint dated April 10, 2000, complainant Manuel L. Lee charged respondent Atty.

Regino B. Tambago with violation of the Notarial Law and the ethics of the legal profession for notarizing a

spurious last will and testament.

In his complaint, complainant averred that his father, the decedent Vicente Lee, Sr., never executed

the contested will. Furthermore, the spurious will contained the forged signatures of Cayetano Noynay and

Loreto Grajo, the purported witnesses to its execution.

In the said will, the decedent supposedly bequeathed his entire estate to his wife Lim Hock Lee, save

for a parcel of land which he devised to Vicente Lee, Jr. and Elena Lee, half-siblings of complainant.

The will was purportedly executed and acknowledged before respondent on June 30,

1965.[1] Complainant, however, pointed out that the residence certificate [2] of the testator noted in the

acknowledgment of the will was dated January 5, 1962. [3] Furthermore, the signature of the testator was not

the same as his signature as donor in a deed of donation[4] (containing his purported genuine signature).

Complainant averred that the signatures of his deceased father in the will and in the deed of donation were in

any way (sic) entirely and diametrically opposed from (sic) one another in all angle[s]. [5]

Complainant also questioned the absence of notation of the residence certificates of the purported

witnesses Noynay and Grajo. He alleged that their signatures had likewise been forged and merely copied

from their respective voters affidavits.

COMPILED BY: Jo-Al Y. Gealon


Page 73 of 102
LABRADOR NOTES

Complainant further asserted that no copy of such purported will was on file in the archives division of

the Records Management and Archives Office of the National Commission for Culture and the Arts (NCCA). In

this connection, the certification of the chief of the archives division dated September 19, 1999 stated:

Doc. 14, Page No. 4, Book No. 1, Series of 1965 refers to an AFFIDAVIT executed by
BARTOLOME RAMIREZ on June 30, 1965 and is available in this Office[s] files.[6]

Respondent in his comment dated July 6, 2001 claimed that the complaint against him contained false

allegations: (1) that complainant was a son of the decedent Vicente Lee, Sr. and (2) that the will in question

was fake and spurious. He alleged that complainant was not a legitimate son of Vicente Lee, Sr. and the last

will and testament was validly executed and actually notarized by respondent per affidavit [7] of Gloria Nebato,

common-law wife of Vicente Lee, Sr. and corroborated by the joint affidavit [8] of the children of Vicente Lee,

Sr., namely Elena N. Lee and Vicente N. Lee, Jr. xxx.[9]

Respondent further stated that the complaint was filed simply to harass him because the criminal case

filed by complainant against him in the Office of the Ombudsman did not prosper.

Respondent did not dispute complainants contention that no copy of the will was on file in the archives

division of the NCCA. He claimed that no copy of the contested will could be found there because none was

filed.

Lastly, respondent pointed out that complainant had no valid cause of action against him as he

(complainant) did not first file an action for the declaration of nullity of the will and demand his share in the

inheritance.

In a resolution dated October 17, 2001, the Court referred the case to the Integrated Bar of the

Philippines (IBP) for investigation, report and recommendation.[10]

In his report, the investigating commissioner found respondent guilty of violation of pertinent provisions of the

old Notarial Law as found in the Revised Administrative Code. The violation constituted an infringement of

legal ethics, particularly Canon 1[11] and Rule 1.01[12] of the Code of Professional Responsibility

(CPR).[13] Thus, the investigating commissioner of the IBP Commission on Bar Discipline recommended the

suspension of respondent for a period of three months.

The IBP Board of Governors, in its Resolution No. XVII-2006-285 dated May 26, 2006, resolved:

[T]o ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, with modification, the
Report and Recommendation of the Investigating Commissioner of the above-entitled case,
herein made part of this Resolution as Annex A; and, finding the recommendation fully
supported by the evidence on record and the applicable laws and rules, and considering

COMPILED BY: Jo-Al Y. Gealon


Page 74 of 102
LABRADOR NOTES

Respondents failure to comply with the laws in the discharge of his function as a notary public,
Atty. Regino B. Tambago is hereby suspended from the practice of law for one year and
Respondents notarial commission is Revoked and Disqualified from reappointment as
Notary Public for two (2) years.[14]

We affirm with modification.

A will is an act whereby a person is permitted, with the formalities prescribed by law, to control to a

certain degree the disposition of his estate, to take effect after his death. [15] A will may either be notarial or

holographic.

The law provides for certain formalities that must be followed in the execution of wills. The object of

solemnities surrounding the execution of wills is to close the door on bad faith and fraud, to avoid substitution

of wills and testaments and to guarantee their truth and authenticity. [16]

A notarial will, as the contested will in this case, is required by law to be subscribed at the end thereof

by the testator himself. In addition, it should be attested and subscribed by three or more credible witnesses

in the presence of the testator and of one another.[17]

The will in question was attested by only two witnesses, Noynay and Grajo. On this circumstance

alone, the will must be considered void.[18] This is in consonance with the rule that acts executed against the

provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their validity.

The Civil Code likewise requires that a will must be acknowledged before a notary public by the

testator and the witnesses.[19] The importance of this requirement is highlighted by the fact that it was

segregated from the other requirements under Article 805 and embodied in a distinct and separate

provision.[20]

An acknowledgment is the act of one who has executed a deed in going before some competent officer

or court and declaring it to be his act or deed. It involves an extra step undertaken whereby the signatory

actually declares to the notary public that the same is his or her own free act and deed. [21] The

acknowledgment in a notarial will has a two-fold purpose: (1) to safeguard the testators wishes long after his

demise and (2) to assure that his estate is administered in the manner that he intends it to be done.

A cursory examination of the acknowledgment of the will in question shows that this particular

requirement was neither strictly nor substantially complied with. For one, there was the conspicuous absence

of a notation of the residence certificates of the notarial witnesses Noynay and Grajo in the acknowledgment.

Similarly, the notation of the testators old residence certificate in the same acknowledgment was a clear

breach of the law. These omissions by respondent invalidated the will.

COMPILED BY: Jo-Al Y. Gealon


Page 75 of 102
LABRADOR NOTES

As the acknowledging officer of the contested will, respondent was required to faithfully observe the

formalities of a will and those of notarization. As we held in Santiago v. Rafanan:[22]

The Notarial Law is explicit on the obligations and duties of notaries public. They are
required to certify that the party to every document acknowledged before him had presented
the proper residence certificate (or exemption from the residence tax); and to enter its
number, place of issue and date as part of such certification.

These formalities are mandatory and cannot be disregarded, considering the degree of importance and

evidentiary weight attached to notarized documents.[23] A notary public, especially a lawyer,[24] is bound to

strictly observe these elementary requirements.

The Notarial Law then in force required the exhibition of the residence certificate upon notarization of

a document or instrument:

Section 251. Requirement as to notation of payment of [cedula] residence tax. Every contract,
deed, or other document acknowledged before a notary public shall have certified thereon that
the parties thereto have presented their proper [cedula] residence certificate or are exempt
from the [cedula] residence tax, and there shall be entered by the notary public as a part of
such certificate the number, place of issue, and date of each [cedula] residence certificate as
aforesaid.[25]

The importance of such act was further reiterated by Section 6 of the Residence Tax Act [26] which

stated:

When a person liable to the taxes prescribed in this Act acknowledges any document before a
notary public xxx it shall be the duty of such person xxx with whom such transaction is had or
business done, to require the exhibition of the residence certificate showing payment of the
residence taxes by such person xxx.

In the issuance of a residence certificate, the law seeks to establish the true and correct identity of the

person to whom it is issued, as well as the payment of residence taxes for the current year. By having allowed

decedent to exhibit an expired residence certificate, respondent failed to comply with the requirements of both

the old Notarial Law and the Residence Tax Act. As much could be said of his failure to demand the exhibition

of the residence certificates of Noynay and Grajo.

On the issue of whether respondent was under the legal obligation to furnish a copy of the notarized

will to the archives division, Article 806 provides:

Art. 806. Every will must be acknowledged before a notary public by the testator and
the witness. The notary public shall not be required to retain a copy of the will, or file
another with the office of the Clerk of Court. (emphasis supplied)

COMPILED BY: Jo-Al Y. Gealon


Page 76 of 102
LABRADOR NOTES

Respondents failure, inadvertent or not, to file in the archives division a copy of the notarized will was

therefore not a cause for disciplinary action.

Nevertheless, respondent should be faulted for having failed to make the necessary entries pertaining

to the will in his notarial register. The old Notarial Law required the entry of the following matters in the

notarial register, in chronological order:

1. nature of each instrument executed, sworn to, or acknowledged before him;


2. person executing, swearing to, or acknowledging the instrument;
3. witnesses, if any, to the signature;
4. date of execution, oath, or acknowledgment of the instrument;
5. fees collected by him for his services as notary;
6. give each entry a consecutive number; and
7. if the instrument is a contract, a brief description of the substance of the instrument.[27]

In an effort to prove that he had complied with the abovementioned rule, respondent contended that

he had crossed out a prior entry and entered instead the will of the decedent. As proof, he presented a

photocopy of his notarial register. To reinforce his claim, he presented a photocopy of a certification[28] stating

that the archives division had no copy of the affidavit of Bartolome Ramirez.

A photocopy is a mere secondary evidence. It is not admissible unless it is shown that the original is

unavailable. The proponent must first prove the existence and cause of the unavailability of the

original,[29] otherwise, the evidence presented will not be admitted. Thus, the photocopy of respondents

notarial register was not admissible as evidence of the entry of the execution of the will because it failed to

comply with the requirements for the admissibility of secondary evidence.

In the same vein, respondents attempt to controvert the certification dated September 21,

1999[30] must fail. Not only did he present a mere photocopy of the certification dated March 15, 2000; [31] its

contents did not squarely prove the fact of entry of the contested will in his notarial register.

Notaries public must observe with utmost care [32] and utmost fidelity the basic requirements in the

performance of their duties, otherwise, the confidence of the public in the integrity of notarized deeds will be

undermined.[33]

Defects in the observance of the solemnities prescribed by law render the entire will invalid. This

carelessness cannot be taken lightly in view of the importance and delicate nature of a will, considering that

the testator and the witnesses, as in this case, are no longer alive to identify the instrument and to confirm its

contents.[34] Accordingly, respondent must be held accountable for his acts. The validity of the will was

seriously compromised as a consequence of his breach of duty.[35]

COMPILED BY: Jo-Al Y. Gealon


Page 77 of 102
LABRADOR NOTES

In this connection, Section 249 of the old Notarial Law provided:

Grounds for revocation of commission. The following derelictions of duty on the part of a
notary public shall, in the discretion of the proper judge of first instance, be sufficient ground
for the revocation of his commission:

xxx xxx xxx

(b) The failure of the notary to make the proper entry or entries in his notarial register
touching his notarial acts in the manner required by law.

xxx xxx xxx

(f) The failure of the notary to make the proper notation regarding cedula certificates. [36]

These gross violations of the law also made respondent liable for violation of his oath as a lawyer and

constituted transgressions of Section 20 (a), Rule 138 of the Rules of Court [37] and Canon 1[38] and Rule

1.01[39] of the CPR.

The first and foremost duty of a lawyer is to maintain allegiance to the Republic of the Philippines,

uphold the Constitution and obey the laws of the land.[40] For a lawyer is the servant of the law and belongs to

a profession to which society has entrusted the administration of law and the dispensation of justice. [41]

While the duty to uphold the Constitution and obey the law is an obligation imposed on every citizen,

a lawyer assumes responsibilities well beyond the basic requirements of good citizenship. As a servant of the

law, a lawyer should moreover make himself an example for others to emulate.[42] Being a lawyer, he is

supposed to be a model in the community in so far as respect for the law is concerned. [43]

The practice of law is a privilege burdened with conditions.[44] A breach of these conditions justifies

disciplinary action against the erring lawyer. A disciplinary sanction is imposed on a lawyer upon a finding or

acknowledgment that he has engaged in professional misconduct. [45] These sanctions meted out to errant

lawyers include disbarment, suspension and reprimand.

Disbarment is the most severe form of disciplinary sanction. [46] We have held in a number of cases

that the power to disbar must be exercised with great caution [47] and should not be decreed if any punishment

less severe such as reprimand, suspension, or fine will accomplish the end desired. [48] The rule then is that

disbarment is meted out only in clear cases of misconduct that seriously affect the standing and character of

the lawyer as an officer of the court.[49]

Respondent, as notary public, evidently failed in the performance of the elementary duties of his

office. Contrary to his claims that he exercised his duties as Notary Public with due care and with due regard

to the provision of existing law and had complied with the elementary formalities in the performance of his

COMPILED BY: Jo-Al Y. Gealon


Page 78 of 102
LABRADOR NOTES

duties xxx, we find that he acted very irresponsibly in notarizing the will in question. Such recklessness

warrants the less severe punishment of suspension from the practice of law. It is, as well, a sufficient basis for

the revocation of his commission[50] and his perpetual disqualification to be commissioned as a notary

public.[51]

WHEREFORE, respondent Atty. Regino B. Tambago is hereby found guilty of professional misconduct.

He violated (1) the Lawyers Oath; (2) Rule 138 of the Rules of Court; (3) Canon 1 and Rule 1.01 of the Code

of Professional Responsibility; (4) Art. 806 of the Civil Code and (5) the provisions of the old Notarial Law.

Atty. Regino B. Tambago is hereby SUSPENDED from the practice of law for one year and his notarial

commission REVOKED. Because he has not lived up to the trustworthiness expected of him as a notary public

and as an officer of the court, he is PERPETUALLY DISQUALIFIED from reappointment as a notary public.

Let copies of this Resolution be furnished to all the courts of the land, the Integrated Bar of the

Philippines and the Office of the Bar Confidant, as well as made part of the personal records of respondent.

SO ORDERED.

Samaniego-Celada v. Abena, G.R. No. 145545, June 30, 2008


PAZ SAMANIEGO-CELADA, G.R. No. 145545
Petitioner,
Present:

QUISUMBING, J., Chairperson,


- versus - CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.

LUCIA D. ABENA, Promulgated:


Respondent.
June 30, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION

QUISUMBING, J.:

This is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure seeking to reverse the
Decision[1]dated October 13, 2000 of the Court of Appeals in CA-G.R. CV No. 41756, which affirmed the
Decision[2] dated March 2, 1993 of the Regional Trial Court (RTC), Branch 66, Makati City. The RTC had
declared the last will and testament of Margarita S. Mayores probated and designated respondent Lucia D.
Abena as the executor of her will. It also ordered the issuance of letters testamentary in favor of respondent.

The facts are as follows:

COMPILED BY: Jo-Al Y. Gealon


Page 79 of 102
LABRADOR NOTES

Petitioner Paz Samaniego-Celada was the first cousin of decedent Margarita S. Mayores (Margarita)
while respondent was the decedents lifelong companion since 1929.

On April 27, 1987, Margarita died single and without any ascending nor descending heirs as her
parents, grandparents and siblings predeceased her. She was survived by her first cousins Catalina
Samaniego-Bombay, ManuelitaSamaniego Sajonia, Feliza Samaniego, and petitioner.

Before her death, Margarita executed a Last Will and Testament [3] on February 2, 1987 where she
bequeathed one-half of her undivided share of a real property located at Singalong Manila, consisting of 209.8
square meters, and covered by Transfer Certificate of Title (TCT) No. 1343 to respondent, Norma A.
Pahingalo, and Florentino M. Abena in equal shares or one-third portion each. She likewise bequeathed one-
half of her undivided share of a real property located at San Antonio Village, Makati, consisting of 225 square
meters, and covered by TCT No. 68920 to respondent, Isabelo M. Abena, and Amanda M. Abena in equal
shares or one-third portion each. Margarita also left all her personal properties to respondent whom she
likewise designated as sole executor of her will.

On August 11, 1987, petitioner filed a petition for letters of administration of the estate of Margarita
before the RTC of Makati. The case was docketed as SP Proc. No. M-1531.

On October 27, 1987, respondent filed a petition for probate of the will of Margarita before the RTC of
Makati. The case was docketed as SP Proc. No. M-1607 and consolidated with SP Proc. No. M-1531.

On March 2, 1993, the RTC rendered a decision declaring the last will and testament of Margarita
probated and respondent as the executor of the will. The dispositive portion of the decision states:

In view of the foregoing, judgment is hereby rendered:

1) declaring the will as probated;

2) declaring Lucia Abena as the executor of the will who will serve as such without
a bond as stated in paragraph VI of the probated will;

3) ordering the issuance of letters testamentary in favor of Lucia Abena.

So ordered.[4]

Petitioner appealed the RTC decision to the Court of Appeals. But the Court of Appeals, in a decision
dated October 13, 2000, affirmed in toto the RTC ruling. The dispositive portion of the Court of Appeals
decision states:
WHEREFORE, foregoing premises considered, the appeal having no merit in fact and
in law, is hereby ORDERED DISMISSED and the appealed Decision of the trial
court AFFIRMED IN TOTO, with cost to oppositors-appellants.
SO ORDERED.[5]

Hence, the instant petition citing the following issues:


I.

WHETHER OR NOT THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN NOT


INVALIDATING THE WILL SINCE IT DID NOT CONFORM TO THE FORMALITIES REQUIRED BY
LAW;

II.

WHETHER OR NOT THE COURT OF APPEALS COMMITTED ERROR IN NOT INVALIDATING THE
WILL BECAUSE IT WAS PROCURED THROUGH UNDUE INFLUENCE AND PRESSURE[;] AND

COMPILED BY: Jo-Al Y. Gealon


Page 80 of 102
LABRADOR NOTES

III.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN NOT DECLARING


PETITIONER, HER SIBLINGS AND COUSIN AS THE LEGAL HEIRS OF MARGARITA S.
MAYORES AND IN NOT ISSUING LETTERS OF ADMINISTRATION TO HER.[6]

Briefly stated, the issues are (1) whether the Court of Appeals erred in not declaring the will invalid for
failure to comply with the formalities required by law, (2) whether said court erred in not declaring the will
invalid because it was procured through undue influence and pressure, and (3) whether it erred in not
declaring petitioner and her siblings as the legal heirs of Margarita, and in not issuing letters of administration
to petitioner.

Petitioner, in her Memorandum,[7] argues that Margaritas will failed to comply with the formalities
required under Article 805[8] of the Civil Code because the will was not signed by the testator in the presence
of the instrumental witnesses and in the presence of one another. She also argues that the signatures of the
testator on pages A, B, and C of the will are not the same or similar, indicating that they were not signed on
the same day. She further argues that the will was procured through undue influence and pressure because at
the time of execution of the will, Margarita was weak, sickly, jobless and entirely dependent upon respondent
and her nephews for support, and these alleged handicaps allegedly affected her freedom and willpower to
decide on her own. Petitioner thus concludes that Margaritas total dependence on respondent and her
nephews compelled her to sign the will. Petitioner likewise argues that the Court of Appeals should have
declared her and her siblings as the legal heirs of Margarita since they are her only living collateral relatives in
accordance with Articles 1009[9] and 1010[10] of the Civil Code.

Respondent, for her part, argues in her Memorandum [11] that the petition for review raises questions
of fact, not of law and as a rule, findings of fact of the Court of Appeals are final and conclusive and cannot be
reviewed on appeal to the Supreme Court. She also points out that although the Court of Appeals at the
outset opined there was no compelling reason to review the petition, the Court of Appeals proceeded to tackle
the assigned errors and rule that the will was validly executed, sustaining the findings of the trial court that
the formalities required by law were duly complied with. The Court of Appeals also concurred with the findings
of the trial court that the testator, Margarita, was of sound mind when she executed the will.

After careful consideration of the parties contentions, we rule in favor of respondent.

We find that the issues raised by petitioner concern pure questions of fact, which may not be the
subject of a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure.

The issues that petitioner is raising now i.e., whether or not the will was signed by the testator in the
presence of the witnesses and of one another, whether or not the signatures of the witnesses on the pages of
the will were signed on the same day, and whether or not undue influence was exerted upon the testator
which compelled her to sign the will, are all questions of fact.

This Court does not resolve questions of fact in a petition for review under Rule 45 of the 1997 Rules
of Civil Procedure. Section 1[12] of Rule 45 limits this Courts review to questions of law only.

Well-settled is the rule that the Supreme Court is not a trier of facts. When supported by substantial
evidence, the findings of fact of the Court of Appeals are conclusive and binding on the parties and are not
reviewable by this Court, unless the case falls under any of the following recognized exceptions:
(1) When the conclusion is a finding grounded entirely on speculation, surmises and
conjectures;

(2) When the inference made is manifestly mistaken, absurd or impossible;

COMPILED BY: Jo-Al Y. Gealon


Page 81 of 102
LABRADOR NOTES

(3) Where there is a grave abuse of discretion;

(4) When the judgment is based on a misapprehension of facts;

(5) When the findings of fact are conflicting;

(6) When the Court of Appeals, in making its findings, went beyond the issues of the case and
the same is contrary to the admissions of both appellant and appellee;

(7) When the findings are contrary to those of the trial court;

(8) When the findings of fact are conclusions without citation of specific evidence on which
they are based;

(9) When the facts set forth in the petition as well as in the petitioners main and reply briefs
are not disputed by the respondents; and

(10) When the findings of fact of the Court of Appeals are premised on the supposed absence
of evidence and contradicted by the evidence on record.[13]

We find that this case does not involve any of the abovementioned exceptions.

Nonetheless, a review of the findings of the RTC as upheld by the Court of Appeals, reveal that
petitioners arguments lack basis. The RTC correctly held:
With [regard] to the contention of the oppositors [Paz Samaniego-Celada, et al.] that
the testator [Margarita Mayores] was not mentally capable of making a will at the time of the
execution thereof, the same is without merit. The oppositors failed to establish, by
preponderance of evidence, said allegation and contradict the presumption that the testator
was of sound mind (See Article 800 of the Civil Code). In fact, witness for the oppositors, Dr.
Ramon Lamberte, who, in some occasions, attended to the testator months before her death,
testified that Margarita Mayores could engage in a normal conversation and he even stated
that the illness of the testator does not warrant hospitalization. Not one of the oppositors
witnesses has mentioned any instance that they observed act/s of the testator during her
lifetime that could be construed as a manifestation of mental incapacity. The testator may be
admitted to be physically weak but it does not necessarily follow that she was not of sound
mind. [The] testimonies of contestant witnesses are pure aforethought.

Anent the contestants submission that the will is fatally defective for the reason that
its attestation clause states that the will is composed of three (3) pages while in truth and in
fact, the will consists of two (2) pages only because the attestation is not a part of the notarial
will, the same is not accurate. While it is true that the attestation clause is not a part of the
will, the court, after examining the totality of the will, is of the considered opinion that error in
the number of pages of the will as stated in the attestation clause is not material to invalidate
the subject will. It must be noted that the subject instrument is consecutively lettered with
pages A, B, and C which is a sufficient safeguard from the possibility of an omission of some of
the pages. The error must have been brought about by the honest belief that the will is the
whole instrument consisting of three (3) pages inclusive of the attestation clause and the
acknowledgement. The position of the court is in consonance with the doctrine of liberal
interpretation enunciated in Article 809 of the Civil Code which reads:

In the absence of bad faith, forgery or fraud, or undue [and] improper


pressure and influence, defects and imperfections in the form of
attestation or in the language used therein shall not render the will
invalid if it is proved that the will was in fact executed and attested in
substantial compliance with all the requirements of Article 805.

The court also rejects the contention of the oppositors that the signatures of the
testator were affixed on different occasions based on their observation that the signature on
the first page is allegedly different in size, texture and appearance as compared with the
signatures in the succeeding pages. After examination of the signatures, the court does not
share the same observation as the oppositors. The picture (Exhibit H-3) shows that the
testator was affixing her signature in the presence of the instrumental witnesses and the
notary. There is no evidence to show that the first signature was procured earlier
than February 2, 1987.

Finally, the court finds that no pressure nor undue influence was exerted on the
testator to execute the subject will. In fact, the picture reveals that the testator was in a good
mood and smiling with the other witnesses while executing the subject will (See Exhibit H).

COMPILED BY: Jo-Al Y. Gealon


Page 82 of 102
LABRADOR NOTES

In fine, the court finds that the testator was mentally capable of making the will at the
time of its execution, that the notarial will presented to the court is the same notarial will that
was executed and that all the formal requirements (See Article 805 of the Civil Code) in the
execution of a will have been substantially complied with in the subject notarial
will.[14](Emphasis supplied.)

Thus, we find no reason to disturb the abovementioned findings of the RTC. Since, petitioner and her
siblings are not compulsory heirs of the decedent under Article 887 [15] of the Civil Code and as the decedent
validly disposed of her properties in a will duly executed and probated, petitioner has no legal right to claim
any part of the decedents estate.

WHEREFORE, the petition is DENIED. The assailed Decision dated October 13, 2000 of the Court of
Appeals in CA-G.R. CV No. 41756 is AFFIRMED.

Costs against petitioner.

SO ORDERED.

Seangio v. Reyes, G.R. Nos. 140371-72, Nov. 27, 2


DY YIENG SEANGIO, G.R. Nos. 140371-72
BARBARA D. SEANGIO
and VIRGINIA D. SEANGIO,
Petitioners, Present:

PUNO, J., Chairperson,


- versus - SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
HON. AMOR A. REYES, in her GARCIA, JJ.
capacity as Presiding Judge,
Regional Trial Court, National
Capital Judicial Region, Branch 21,
Manila, ALFREDO D. SEANGIO,
ALBERTO D. SEANGIO, ELISA D. Promulgated:
SEANGIO-SANTOS, VICTOR D.
SEANGIO, ALFONSO D. SEANGIO,
SHIRLEY D. SEANGIO-LIM, November 27, 2006
BETTY D. SEANGIO-OBAS and
JAMES D. SEANGIO,
Respondents.
x ---------------------------------------------------------------------------------------- x

DECISION

AZCUNA, J.:

This is a petition for certiorari[1] with application for the issuance of a writ of preliminary injunction and/or

temporary restraining order seeking the nullification of the orders, dated August 10, 1999 and October 14,

1999, of the Regional Trial Court of Manila, Branch 21 (the RTC), dismissing the petition for probate on the

ground of preterition, in the consolidated cases, docketed as SP. Proc. No. 98-90870 and SP. Proc. No. 99-

93396, and entitled, In the Matter of the Intestate Estate of Segundo C. Seangio v. Alfredo D. Seangio, et al.

and In the Matter of the Probate of the Will of Segundo C. Seangio v. Dy Yieng Seangio, Barbara D. Seangio

and Virginia Seangio.


The facts of the cases are as follows:

On September 21, 1988, private respondents filed a petition for the settlement of the intestate estate of the

late Segundo Seangio, docketed as Sp. Proc. No. 9890870 of the RTC, and praying for the appointment of

COMPILED BY: Jo-Al Y. Gealon


Page 83 of 102
LABRADOR NOTES

private respondent Elisa D. SeangioSantos as special administrator and guardian ad litem of petitioner Dy

Yieng Seangio.

Petitioners Dy Yieng, Barbara and Virginia, all surnamed Seangio, opposed the petition. They

contended that: 1) Dy Yieng is still very healthy and in full command of her faculties; 2) the deceased

Segundo executed a general power of attorney in favor of Virginia giving her the power to manage and

exercise control and supervision over his business in the Philippines; 3) Virginia is the most competent and

qualified to serve as the administrator of the estate of Segundo because she is a certified public accountant;

and, 4) Segundo left a holographic will, dated September 20, 1995, disinheriting one of the private

respondents, Alfredo Seangio, for cause. In view of the purported holographic will, petitioners averred that in

the event the decedent is found to have left a will, the intestate proceedings are to be automatically

suspended and replaced by the proceedings for the probate of the will.

On April 7, 1999, a petition for the probate of the holographic will of Segundo, docketed as SP. Proc. No.

9993396, was filed by petitioners before the RTC. They likewise reiterated that the probate proceedings

should take precedence over SP. Proc. No. 9890870 because testate proceedings take precedence and enjoy

priority over intestate proceedings.[2]

The document that petitioners refer to as Segundos holographic will is quoted, as follows:

Kasulatan sa pag-aalis ng mana

Tantunin ng sinuman

Ako si Segundo Seangio Filipino may asawa naninirahan sa 465-A Flores St., Ermita, Manila at
nagtatalay ng maiwanag na pag-iisip at disposisyon ay tahasan at hayagang inaalisan ko ng
lahat at anumang mana ang paganay kong anak na si Alfredo Seangio dahil siya ay naging
lapastangan sa akin at isan beses siya ng sasalita ng masama harapan ko at mga kapatid niya
na si Virginia Seangio labis kong kinasama ng loob ko at sasabe rin ni Alfredo sa akin na ako
nasa ibabaw gayon gunit daratin ang araw na ako nasa ilalim siya at siya nasa ibabaw.

Labis kong ikinasama ng loob ko ang gamit ni Alfredo ng akin pagalan para makapagutang na
kuarta siya at kanya asawa na si Merna de los Reyes sa China Bangking Corporation na millon
pesos at hindi ng babayad at hindi ng babayad ito ay nagdulot sa aking ng malaking kahihiya
sa mga may-ari at stockholders ng China Banking.
At ikinagalit ko pa rin ang pagkuha ni Alfredo at ng kanyang asawa na mga custome[r] ng
Travel Center of the Philippines na pinagasiwaan ko at ng anak ko si Virginia.
Dito ako nagalit din kaya gayon ayoko na bilanin si Alfredo ng anak ko at hayanan kong
inaalisan ng lahat at anoman mana na si Alfredo at si Alfredo Seangio ay hindi ko siya anak at
hindi siya makoha mana.
Nila[g]daan ko ngayon ika 20 ng Setyembre 1995 sa longsod ng Manila sa harap ng tatlong
saksi. [3]
(signed)
Segundo Seangio

Nilagdaan sa harap namin

(signed)
Dy Yieng Seangio (signed)
Unang Saksi ikalawang saksi

(signed)
ikatlong saksi

On May 29, 1999, upon petitioners motion, SP. Proc. No. 9890870 and SP. Proc. No. 9993396 were

consolidated.[4]

COMPILED BY: Jo-Al Y. Gealon


Page 84 of 102
LABRADOR NOTES

On July 1, 1999, private respondents moved for the dismissal of the probate proceedings [5] primarily

on the ground that the document purporting to be the holographic will of Segundo does not contain any

disposition of the estate of the deceased and thus does not meet the definition of a will under Article 783 of

the Civil Code. According to private respondents, the will only shows an alleged act of disinheritance by the

decedent of his eldest son, Alfredo, and nothing else; that all other compulsory heirs were not named nor

instituted as heir, devisee or legatee, hence, there is preterition which would result to intestacy. Such being

the case, private respondents maintained that while procedurally the court is called upon to rule only on the

extrinsic validity of the will, it is not barred from delving into the intrinsic validity of the same, and ordering

the dismissal of the petition for probate when on the face of the will it is clear that it contains no testamentary

disposition of the property of the decedent.

Petitioners filed their opposition to the motion to dismiss contending that: 1) generally, the authority

of the probate court is limited only to a determination of the extrinsic validity of the will; 2) private

respondents question the intrinsic and not the extrinsic validity of the will; 3) disinheritance constitutes a

disposition of the estate of a decedent; and, 4) the rule on preterition does not apply because Segundos will

does not constitute a universal heir or heirs to the exclusion of one or more compulsory heirs.[6]

On August 10, 1999, the RTC issued its assailed order, dismissing the petition for probate

proceedings:
A perusal of the document termed as will by oppositors/petitioners Dy Yieng Seangio, et al.,
clearly shows that there is preterition, as the only heirs mentioned thereat are Alfredo and
Virginia. [T]he other heirs being omitted, Article 854 of the New Civil Code thus applies.
However, insofar as the widow Dy Yieng Seangio is concerned, Article 854 does not apply, she
not being a compulsory heir in the direct line.
As such, this Court is bound to dismiss this petition, for to do otherwise would amount to an
abuse of discretion. The Supreme Court in the case of Acain v. Intermediate Appellate
Court [155 SCRA 100 (1987)] has made its position clear: for respondents to have tolerated
the probate of the will and allowed the case to progress when, on its face, the will appears to
be intrinsically void would have been an exercise in futility. It would have meant a waste of
time, effort, expense, plus added futility. The trial court could have denied its probate outright
or could have passed upon the intrinsic validity of the testamentary provisions before the
extrinsic validity of the will was resolved (underscoring supplied).

WHEREFORE, premises considered, the Motion to Suspend Proceedings is hereby DENIED for
lack of merit. Special Proceedings No. 9993396 is hereby DISMISSED without pronouncement
as to costs.
SO ORDERED.[7]

Petitioners motion for reconsideration was denied by the RTC in its order dated October 14, 1999.

Petitioners contend that:


THE RESPONDENT JUDGE ACTED IN EXCESS OF HER JURISDICTION OR WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION AND DECIDED A
QUESTION OF LAW NOT IN ACCORD WITH LAW AND JURISPRUDENCE IN ISSUING THE
QUESTIONED ORDERS, DATED 10 AUGUST 1999 AND 14 OCTOBER 1999 (ATTACHMENTS A
AND B HEREOF) CONSIDERING THAT:

I
THE RESPONDENT JUDGE, WITHOUT EVEN COMPLYING WITH SECTIONS 3 AND 4 OF RULE 76
OF THE RULES OF COURT ON THE PROPER PROCEDURE FOR SETTING THE CASE FOR INITIAL
HEARING FOR THE ESTABLISHMENT OF THE JURISDICTIONAL FACTS, DISMISSED THE
TESTATE CASE ON THE ALLEGED GROUND THAT THE TESTATORS WILL IS VOID ALLEGEDLY
BECAUSE OF THE EXISTENCE OF PRETERITION, WHICH GOES INTO THE INTRINSIC VALIDITY
OF THE WILL, DESPITE THE FACT THAT IT IS A SETTLED RULE THAT THE AUTHORITY OF
PROBATE COURTS IS LIMITED ONLY TO A DETERMINATION OF THE EXTRINSIC VALIDITY OF
THE WILL, I.E., THE DUE EXECUTION THEREOF, THE TESTATORS TESTAMENTARY CAPACITY
AND THE COMPLIANCE WITH THE REQUISITES OR SOLEMNITIES PRESCRIBED BY LAW;

II
EVEN ASSUMING ARGUENDO THAT THE RESPONDENT JUDGE HAS THE AUTHORITY TO RULE
UPON THE INTRINSIC VALIDITY OF THE WILL OF THE TESTATOR, IT IS INDUBITABLE FROM

COMPILED BY: Jo-Al Y. Gealon


Page 85 of 102
LABRADOR NOTES

THE FACE OF THE TESTATORS WILL THAT NO PRETERITON EXISTS AND THAT THE WILL IS
BOTH INTRINSICALLY AND EXTRINSICALLY VALID; AND,

III
RESPONDENT JUDGE WAS DUTY BOUND TO SUSPEND THE PROCEEDINGS IN THE INTESTATE
CASE CONSIDERING THAT IT IS A SETTLED RULE THAT TESTATE PROCEEDINGS TAKE
PRECEDENCE OVER INTESTATE PROCEEDINGS.

Petitioners argue, as follows:

First, respondent judge did not comply with Sections 3 and 4 of Rule 76 of the Rules of Court which

respectively mandate the court to: a) fix the time and place for proving the will when all concerned may

appear to contest the allowance thereof, and cause notice of such time and place to be published three weeks

successively previous to the appointed time in a newspaper of general circulation; and, b) cause the mailing of

said notice to the heirs, legatees and devisees of the testator Segundo;

Second, the holographic will does not contain any institution of an heir, but rather, as its title clearly

states, Kasulatan ng Pag-Aalis ng Mana, simply contains a disinheritance of a compulsory heir. Thus, there is

no preterition in the decedents will and the holographic will on its face is not intrinsically void;

Third, the testator intended all his compulsory heirs, petitioners and private respondents alike, with the sole

exception of Alfredo, to inherit his estate. None of the compulsory heirs in the direct line of Segundo were

preterited in the holographic will since there was no institution of an heir;

Fourth, inasmuch as it clearly appears from the face of the holographic will that it is both intrinsically and

extrinsically valid, respondent judge was mandated to proceed with the hearing of the testate case; and,

Lastly, the continuation of the proceedings in the intestate case will work injustice to petitioners, and will

render nugatory the disinheritance of Alfredo.

The purported holographic will of Segundo that was presented by petitioners was dated, signed and written by

him in his own handwriting. Except on the ground of preterition, private respondents did not raise any issue as

regards the authenticity of the document.

The document, entitled Kasulatan ng Pag-Aalis ng Mana, unmistakably showed Segundos intention of

excluding his eldest son, Alfredo, as an heir to his estate for the reasons that he cited therein. In effect,

Alfredo was disinherited by Segundo.

For disinheritance to be valid, Article 916 of the Civil Code requires that the same must be effected through a

will wherein the legal cause therefor shall be specified. With regard to the reasons for the disinheritance that

were stated by Segundo in his document, the Court believes that the incidents, taken as a whole, can be

considered a form of maltreatment of Segundo by his son, Alfredo, and that the matter presents a sufficient

cause for the disinheritance of a child or descendant under Article 919 of the Civil Code:
Article 919. The following shall be sufficient causes for the disinheritance of children and
descendants, legitimate as well as illegitimate:

(1) When a child or descendant has been found guilty of an attempt against the life
of the testator, his or her spouse, descendants, or ascendants;

COMPILED BY: Jo-Al Y. Gealon


Page 86 of 102
LABRADOR NOTES

(2) When a child or descendant has accused the testator of a crime for which the law
prescribes imprisonment for six years or more, if the accusation has been found
groundless;
(3) When a child or descendant has been convicted of adultery or concubinage with
the spouse of the testator;
(4) When a child or descendant by fraud, violence, intimidation, or undue influence
causes the testator to make a will or to change one already made;
(5) A refusal without justifiable cause to support the parents or ascendant
who disinherit such child or descendant;
(6) Maltreatment of the testator by word or deed, by the child or descendant; [8]
(7) When a child or descendant leads a dishonorable or disgraceful life;
(8) Conviction of a crime which carries with it the penalty of civil interdiction.

Now, the critical issue to be determined is whether the document executed by Segundo can be considered as

a holographic will.

A holographic will, as provided under Article 810 of the Civil Code, must be entirely written, dated, and signed

by the hand of the testator himself. It is subject to no other form, and may be made in or out of

the Philippines, and need not be witnessed.

Segundos document, although it may initially come across as a mere disinheritance instrument, conforms to

the formalities of a holographic will prescribed by law. It is written, dated and signed by the hand of Segundo

himself. An intent to dispose mortis causa[9] can be clearly deduced from the terms of the instrument, and

while it does not make an affirmative disposition of the latters property, the disinheritance of Alfredo,

nonetheless, is an act of disposition in itself. In other words, the disinheritance results in the disposition of the

property of the testator Segundo in favor of those who would succeed in the absence of Alfredo. [10]

Moreover, it is a fundamental principle that the intent or the will of the testator, expressed in the form and

within the limits prescribed by law, must be recognized as the supreme law in succession. All rules of

construction are designed to ascertain and give effect to that intention. It is only when the intention of the

testator is contrary to law, morals, or public policy that it cannot be given effect. [11]

Holographic wills, therefore, being usually prepared by one who is not learned in the law, as illustrated in the

present case, should be construed more liberally than the ones drawn by an expert, taking into account the

circumstances surrounding the execution of the instrument and the intention of the testator. [12] In this regard,

the Court is convinced that the document, even if captioned as Kasulatan ng Pag-Aalis ng Mana, was intended

by Segundo to be his last testamentary act and was executed by him in accordance with law in the form of a

holographic will. Unless the will is probated,[13] the disinheritance cannot be given effect.[14]

With regard to the issue on preterition,[15] the Court believes that the compulsory heirs in the direct

line were not preterited in the will. It was, in the Courts opinion, Segundos last expression to bequeath his

estate to all his compulsory heirs, with the sole exception of Alfredo. Also, Segundo did not institute an

heir[16] to the exclusion of his other compulsory heirs. The mere mention of the name of one of the petitioners,

Virginia, in the document did not operate to institute her as the universal heir. Her name was included plainly

as a witness to the altercation between Segundo and his son, Alfredo.

Considering that the questioned document is Segundos holographic will, and that the law favors testacy over

intestacy, the probate of the will cannot be dispensed with. Article 838 of the Civil Code provides that no will
shall pass either real or personal property unless it is proved and allowed in accordance with the Rules of

COMPILED BY: Jo-Al Y. Gealon


Page 87 of 102
LABRADOR NOTES

Court. Thus, unless the will is probated, the right of a person to dispose of his property may be rendered

nugatory.[17]

In view of the foregoing, the trial court, therefore, should have allowed the holographic will to be probated. It

is settled that testate proceedings for the settlement of the estate of the decedent take precedence over

intestate proceedings for the same purpose.[18]

WHEREFORE, the petition is GRANTED. The Orders of the Regional Trial Court of Manila, Branch 21,

dated August 10, 1999 and October 14, 1999, are set aside. Respondent judge is directed to reinstate and

hear SP Proc. No. 99-93396 for the allowance of the holographic will of Segundo Seangio. The intestate case

or SP. Proc. No. 98-90870 is hereby suspended until the termination of the aforesaid testate proceedings.

No costs.

SO ORDERED.

PCIB vs. Escolin, G.R. Nos. L-27860 and L-27896, March 29, 1974 (DIGEST nani siya)
Short version: The Hodges lived in the Philippines for almost half a century and died leaving substantial
properties in Iloilo and in the US. The missus died 5 years before the husband, providing in her will that while
her estate would go to him, upon his death, the remainder should pass to her siblings. (They were childless.)
The court held that this testamentary provision, while probably ineffectual as a substitution under the Civil
Code, is not actually a substitution, but is a valid and simultaneous institution of heirs, though the passing of
title to the inheritance to the others (the siblings) was made to depend on a resolutory condition (the
husbands death). Case was remanded to the trial court for the determination of the proper application of the
renvoi principle (conflict of laws between Philippines and Texas law), and the proper distribution of Linnies,
Charles, and their conjugal estates.

Facts:
Charles Newton Hodges and Linnie Jane Hodges were originally from Texas, USA. During their marriage, they
had acquired and accumulated considerable assets and properties in the Philippines and in Oklahoma and
Texas in the US. They both lived, worked and were domiciled in Iloilo City for around 50 years. Before her
death, Linnie Jane executed a will leaving her estate, less her debts and funeral expenses, to her husband
Charles. Should Charles die, the will provided that the remainder of her estate go to her brothers and sisters,
share and share alike. Should any of the brothers and sisters die before the husband, Linnie willed that the
heirs of the said sibling be substituted in the deceaseds siblings place.

When Linnie died, Charles took the will to probate court, and was appointed Executor, then later, Special
Administrator. He moved to be allowed to continue administering the family business, as per Linnie Janes
wishes, and to engage in sales, conveyances, leases, mortgages and other necessary transactions. He also
filed the necessary and appurtenant administration/accounting records, and income tax returns for the estate.
Charles named seven brothers and sisters of Linnie Jane as her heirs (Esta, Emma, Leonard, Aline, David,
Sadie, Era and Nimroy), but the order admitting the will to probate unfortunately omitted one of the heirs,
Roy (Nimroy?) Higdon, so Charles filed a verified motion to have Roys name included.

As an executor, he was bound to file tax returns for the estate he was administering under American law. He
did file such as estate tax return on August 8, 1958. In Schedule "M" of such return, he answered "Yes" to the
question as to whether he was contemplating "renouncing the will". On the question as to what property
interests passed to him as the surviving spouse, he answered:

None, except for purposes of administering the Estate, paying debts, taxes and other legal charges.
It is the intention of the surviving husband of deceased to distribute the remaining property and
interests of the deceased in their Community estate to the devisees and legatees named in the will
when the debts, liabilities, taxes and expenses of administration are finally determined and paid.

Charles died in Iloilo in December 1962 without having liquidated Linnies estate, which includes her share in
the conjugal partnership. A longtime employee of the Hodges, Avelina Magno, was appointed Administratrix
(for Linnies estate) and a Special Administratrix (for Charles). Magno was appointed, but later Harold Davies
(representative of Charles heirs in the US) was designated Co-Special Administrator, who was then replaced
by one Joe Hodges, Charles nephew. One Atty. Mirasol was also appointed as co-administrator, and an order
of probate and letters of administration were issued to Hodges and Mirasol.

COMPILED BY: Jo-Al Y. Gealon


Page 88 of 102
LABRADOR NOTES

At this point, the SC was already very much confused about the gaps in the facts, convinced that the parties
representing both estates had cooked up a modus operandi to settle money matters (a settlement with
records the Court never saw)which, however, went awry, with more and more heirs from the US flocking to
the Iloilo shores, and lawyers (Ozaetas! Mabantas! Manglapuses!) filing their respective claims for retainer
fees. Much much later, PCIB became the administrator of Charles estate, asserting a claim to all of his estate,
including those properties/assets that passed to him upon Linnie Janes death. Avelina naturally opposed this,
as Linnie Janes other heirs (the HIGDONS) would be prejudiced, so she continued acting in her capacity as
administrator (entering into sales and other such conveyances). For these acts, the PCIB dismissed her as an
employee of Charles estate, to which she responded by locking up the premises being used by PCIB as
offices, which were among the estates properties.

PCIBs Claims

Linnie Janes will should be governed by Philippine Law, with respect to the order of succession, the amount of
successional rights, and the intrinsic validity of its testamentary provisions.

Linnie intended Philippine laws to govern her Will.


Article 16, CC, provides that "the national law of the person whose succession is under consideration,
whatever may be the nature of the property and regardless of the country wherein said property may
be found", shall prevail. However, the Conflict of Law of Texas, which is the "national law" of the
testatrix, Linnie Jane Hodges, provide that the domiciliary law (Philippine law) should govern the
testamentary dispositions and successional rights over movables, and the law of the situs of the
property (also Philippine law as to properties located in the Philippines) as regards immovables.
Thus applying the "Renvoi Doctrine", as approved and applied in the Christensen case (1963),
Philippine law should apply.
Under Philippine and Texas law, the conjugal or community estate of spouses shall, upon dissolution,
be divided equally between them. Thus, upon Linnies death, of the entirety of the assets of the
Hodges spouses constituting their conjugal estate pertained automatically to Charles, not by way of
inheritance, but in his own right as partner in the conjugal partnership.
The other one-half (1/2) portion forming part of Linnies estate, cannot, under a clear and specific
provision of her Will, be enhanced or increased by income, earnings, rents, or emoluments accruing
after her death. All rents, emoluments and income from said estate shall belong to him (C. N.
Hodges) and he is further authorized to use any part of the principal of said estate as he may need or
desire."
Articles 900, 995 and 1001 provide that the surviving spouse of a deceased leaving no ascendants or
descendants is entitled, as a matter of right and by way of irrevocable legitime, to at least one-half
(1/2) of the estate of the deceased, and no testamentary disposition by the deceased can legally and
validly affect this right of the surviving spouse. In fact, her husband is entitled to said one-half (1/2)
portion of her estate by way of legitime. (Article 886)
Clearly, therefore, immediately upon the death of Linnie Jane Hodges, C. N. Hodges was the owner of
at least 3/4 or 75% percent of all of the conjugal assets of the spouses, 50% by way of conjugal
partnership share and 1/4 or 25% by way of inheritance and legitime) plus all "rents, emoluments and
income" accruing to said conjugal estate from the moment of Linnie Jane Hodges' death.
In his capacity as sole heir and successor to Linnies estate, Charles appropriated to himself the
entirety of her estate. He operated all the assets, engaged in business and performed all acts in
connection with the entirety of the conjugal estate, in his own name alone, just as he had been
operating, engaging and doing while the late Linnie Jane Hodges was still alive. Upon his death on
December 25, 1962, therefore, all said conjugal assets were in his sole possession and control, and
registered in his name alone, not as executor, but as exclusive owner of all said assets.
As the sole and exclusive heir, Charles did not need to liquidate the estate. Neither was there any
asset left to Linnies estate at the time of Charles death, though Linnies estate may have referred to
all of the rest, residue and remainder of my estate which would go to her siblings in the event of
Charles death. The provision is thus void and invalid at least as to Philippine assets.

There are generally only two kinds of substitution provided for and authorized by our Civil Code
(Articles 857-870), namely, (1) simple or common substitution, sometimes referred to
as vulgar substitution (Article 859), and (2) fideicommissary substitution (Article 863). All other
substitutions are merely variations of these. The substitution provided for by paragraph four of the
Will of Linnie Jane Hodges is not fideicommissary substitution, because there is clearly no obligation
on the part of C. N. Hodges as the first heir designated, to preserve the properties for the substitute
heirs. At most, it is a vulgar or simple substitution. However, in order that
a vulgar orsimple substitution can be valid, three alternative conditions must be present, namely, that
the first designated heir (1) should die before the testator; or (2) should not wish to accept the
inheritance; or (3) should be incapacitated to do so. None of these conditions apply to C. N. Hodges,
and, therefore, the substitution provided for by the above-quoted provision of the Will is not
authorized by the Code, and, therefore, it is void. Manresa even said, when another heir is
designated to inherit upon the death of a first heir, the second designation can have effect only in case
the first instituted heir dies before the testator, whether or not that was the true intention of said
testator.

COMPILED BY: Jo-Al Y. Gealon


Page 89 of 102
LABRADOR NOTES

The remedy of the Higdons, then, who are claiming dubious rights to of the conjugal estate of the
Hodges, is to file a claim against the estate of Charles.
It also follows that the conveyances executed by Avelina, claiming to be merely in continuation of the
Hodges businesses, and which corresponding deeds of sale were confirmed by the probate court, are
null and void and should be subject to reconveyance.

Avelinas Claims
(At one point, even Linnies heirs wanted to have Avelina removed from her capacity as administrator, but the
lower court reversed its earlier grant of the motion, on account of a previous injunction it issued.)
Linnie Jane merely gave Charles a life-estate or a usufruct over all her estate, and gave a vested
remainder-estate or the naked title over the same estate, to her relatives.
After Linnies death, Charles, as administrator and executor of the will, unequivocably and clearly
through oral and written declarations and sworn public statements, renounced, disclaimed and
repudiated his life-estate and usufruct.
Since there was no separation or segregation of the interests of Linnie and Charles in the combined
conjugal estate, as there has been no such separation or segregation, and because of Charles
repudiation, both interests have continually earned exactly the same amount of rents, emoluments
and income.

Issue:
1. Is Linnies disposition in favor of her siblings void? NO
2. How should the estate be partitioned/liquidated? REMAND!

Reasoning:

1. To a certain extent, PCIBs contention that Linnies testamentary substitution, when viewed as a
substitution, may not be given effect, is correct. Indeed, legally speaking, Linnies will provides neither for a
simple or vulgar substitution under Article 859 of the Civil Code nor for a fideicommissary substitution under
Article 863 thereof. There is no vulgar substitution because there is no provision for either (1) predecease of
the testator by the designated heir or (2) refusal or (3) incapacity of the latter to accept the inheritance, as
required by Article 859; and neither is there a fideicommissary substitution therein because no obligation is
imposed thereby upon Hodges to preserve the estate or any part thereof for anyone else. But from these
premises, it is not correct to jump to the conclusion, as PCIB does, that the testamentary dispositions in
question are therefore inoperative and invalid.

The error in PCIB's position lies simply in the fact that it views the said disposition exclusively in the light of
substitutions covered by the Civil Code section on that subject, (Section 3, Chapter 2, Title IV, Book III) when
it is obvious that substitution occurs only when another heir is appointed in a will "so that he may enter into
inheritance in default of the heir originally instituted," (Article 857) and, in the present case, no such possible
default is contemplated. The brothers and sisters of Mrs. Hodges are not substitutes for Hodges because,
under her will, they are not to inherit what Hodges cannot, would not or may not inherit, but what he would
not dispose of from his inheritance; rather, therefore, they are also heirs instituted simultaneously with
Hodges, subject, however, to certain conditions, partially resolutory insofar as Hodges was concerned and
correspondingly suspensive with reference to his brothers and sisters-in-law. It is partially resolutory, since it
bequeaths unto Hodges the whole of her estate to be owned and enjoyed by him as universal and sole heir
with absolute dominion over them only during his lifetime, which means that while he could completely and
absolutely dispose of any portion thereof inter vivos to anyone other than himself, he was not free to do
so mortis causa, and all his rights to what might remain upon his death would cease entirely upon the
occurrence of that contingency, inasmuch as the right of his brothers and sisters-in-law to the inheritance,
although vested already upon the death of Mrs. Hodges, would automatically become operative upon the
occurrence of the death of Hodges in the event of actual existence of any remainder of her estate then.

Contrary to Avelinas view, however, it was not the usufruct alone of Linnies estate, as contemplated in Article
869, that she bequeathed to Charles during his lifetime, but the full ownership thereof, although the same was
to last also during his lifetime only, even as there was no restriction whatsoever against his disposing or
conveying the whole or any portion thereof to anybody other than himself. The Court saw no legal impediment
to this kind of institution, except that it cannot apply to the legitime of Charles as the surviving spouse,
consisting of one-half of the estate, considering that Linnie had no surviving ascendants nor descendants.
(Arts. 872, 900, and 904.)

Hodges acts of administration and accounting strongly negate PCIBs claims that he had adjudicated to
himself all of Linnies estate. While he may have used language like herein executor (being) the only devisee
or legatee of the deceased, in accordance with the last will and testament already probated there is no other
person interested in the Philippines of the time and place of examining herein account to be given notice, he
wouldve known that doing so would impute bad faith unto him. Also, in his very motions, Hodges asserted the

COMPILED BY: Jo-Al Y. Gealon


Page 90 of 102
LABRADOR NOTES

rights of Linnies named heirs. He even moved to include Roys name included in the probate courts order,
lest Roys heirs think that they had been omitted.

Thus, he recognized, in his own way, the separate identity of his wifes estate from his own share of the
conjugal partnership up to the time of his death, more than 5 years after that of his wife. He never considered
the whole estate as a single one belonging exclusively to himself. The only conclusion one can gather from
this is that he could have been preparing the basis for the eventual transmission of his wife's estate, or, at
least, so much thereof as he would not have been able to dispose of during his lifetime, to her brothers and
sisters in accordance with her expressed desire, as intimated in his tax return in the US. And assuming that he
did pay the corresponding estate and inheritance taxes in the Philippines on the basis of his being sole heir,
such payment is not necessarily inconsistent with his recognition of the rights of his co-heirs. The Court thus
viewed that under the peculiar provisions of his wife's will, and for purposes of the applicable inheritance tax
laws, Hodges had to be considered as her sole heir, pending the actual transmission of the remaining portion
of her estate to her other heirs, upon the eventuality of his death, and whatever adjustment might be
warranted should there be any such remainder then is a matter that could well be taken care of by the
internal revenue authorities in due time. The Court also considered as basis of Charles intentions several
questionnaires in solemn forms in filing estate taxes abroad, though they have not been introduced in
evidence (!!!), only referred to several times by the parties.

It is obvious, though, that Charles procrastinating in settling Linnies estate, and his sole administration of it,
commingled his and his co-heirs interests, making it difficult to properly make an accounting of their shares.
PCIB, then, cannot administer the properties on its own. What would be just and proper is for both
administrators of the two estates to act conjointly until after said estates have been segregated from each
other.

2. The parties were in disagreement as to how Article 16 of the Civil Code should be applied. On the one hand,
PCIB claimed that inasmuch as Linnie was a resident of the Philippines at the time of her death, under said
Article 16, construed in relation to the pertinent laws of Texas and the principle of renvoi, what should be
applied here should be the rules of succession under the Civil Code, and, therefore, her estate could consist of
no more than one-fourth of the said conjugal properties, the other fourth being, as already explained, the
legitime of her husband (Art. 900) which she could not have disposed of nor burdened with any condition (Art.
872). On the other hand, Avelina denied that Linnie died a resident of the Philippines, since allegedly she
never changed nor intended to change her original residence of birth in Texas, United States of America, and
contends that, anyway, regardless of the question of her residence, she being indisputably a citizen of Texas,
under said Article 16 of the Civil Code, the distribution of her estate is subject to the laws of said State which,
according to her, do not provide for any legitime, hence, Linnies brothers and sisters are entitled to the
remainder of the whole of her share of the conjugal partnership properties consisting of one-half thereof.
Avelina further maintained that, in any event, Charles had renounced his rights under the will in favor of his
co-heirs, as allegedly proven by the documents touching on the point already mentioned earlier, the
genuineness and legal significance of which PCIB questioned.

The Court cannot decide on the claims, though, for neither the evidence submitted by the parties appeared to
be adequate enough for it to render an intelligent comprehensive and just resolution. No clear and reliable
proof of what in fact the possibly applicable laws of Texas are, was presented (Remember judicial notice in
case of foreign laws?). Then also, the genuineness of documents relied upon by Avelina is disputed. In Justice,
therefore, to all the parties concerned, these and all other relevant matters should first be threshed out fully
in the trial court in the proceedings thereafter to be held for the purpose of ascertaining and adjudicating
and/or distributing the estate of Mrs. Hodges to her heirs in accordance with her duly probated will.

Linnies estate is the remainder of 1/4 of the conjugal partnership properties, considering that even PCIB did
not maintain that the application of the laws of Texas would result in the other heirs of Mrs. Hodges not
inheriting anything under her will. And since PCIB's representations in regard to the laws of Texas virtually
constitute admissions of fact which the other parties and the Court are being made to rely and act upon, PCIB
is not permitted to contradict them or subsequently take a position contradictory to or inconsistent with them.

The only question that remains to be settled in the remand to the court below are:
(1) whether or not the applicable laws of Texas do provide in effect for more, such as, when there is no
legitime provided therein
(2) whether or not Hodges has validly waived his whole inheritance from Mrs. Hodges.

In the course of the deliberations, it was brought out by some members of the Court that to avoid or, at least,
minimize further protracted legal controversies between the respective heirs of the Hodges spouses, it is
imperative to elucidate on the possible consequences of dispositions made by Charles after Linnies death,
from the mass of the unpartitioned estates without any express indication in the pertinent documents as to
whether his intention is to dispose of part of his inheritance from his wife or part of his own share of the
conjugal estate as well as of those made by PCIB after the death of Hodges. After a long discussion, the
consensus arrived at was as follows:

COMPILED BY: Jo-Al Y. Gealon


Page 91 of 102
LABRADOR NOTES

(1) any such dispositions made gratuitously in favor of third parties, whether these be individuals,
corporations or foundations, shall be considered as intended to be of properties constituting part of Hodges'
inheritance from his wife, it appearing from the tenor of his motions of May 27 and December 11, 1957 that in
asking for general authority to make sales or other disposals of properties under the jurisdiction of the court,
which include his own share of the conjugal estate, he was not invoking particularly his right over his own
share, but rather his right to dispose of any part of his inheritance pursuant to the will of his wife;

(2) as regards sales, exchanges or other remunerative transfers, the proceeds of such sales or the properties
taken in by virtue of such exchanges, shall be considered as merely the products of "physical changes" of the
properties of her estate which the will expressly authorizes Hodges to make, provided that whatever of said
products should remain with the estate at the time of the death of Hodges should go to her brothers and
sisters;
(3) the dispositions made by PCIB after the death of Hodges must naturally be deemed as covering only the
properties belonging to his estate considering that being only the administrator of the estate of Hodges, PCIB
could not have disposed of properties belonging to the estate of his wife. Neither could such dispositions be
considered as involving conjugal properties, for the simple reason that the conjugal partnership automatically
ceased when Linnie died, and by the peculiar provision of her will, under discussion, the remainder of her
share descended also automatically upon the death of Hodges to her brothers and sisters, thus outside of the
scope of PCIB's administration. Accordingly, these constructions of Linnies will should be adhered to by the
trial court in its final order of adjudication and distribution and/or partition of the two estates in question.

Disposition
Remand for determination of proper application of Art. 16, CC (renvoi), and of Charles alleged renunciation of
his ineritance under Linnies will. Avelina remains to be the administrator of Linnies estate. The said estate
consists of of the community properties of the said spouses, as of the time of Linnies death on May 23,
1957, minus whatever the husband had already gratuitously disposed of in favor of third persons from said
date until his death, provided, first, that with respect to remunerative dispositions, the proceeds thereof shall
continue to be part of the wife's estate, unless subsequently disposed of gratuitously to third parties by the
husband, and second, that should the purported renunciation be declared legally effective, no deductions
whatsoever are to be made from said estate. PCIB and Avelina should act thenceforth always conjointly, never
independently from each other, as administrators.

CONCURRING OPINIONS

Fernandoconcurred with procedural aspect of the decision.

Teehankeeagreed with most parts but had substantial differences in the reasoning:
C. N. Hodges could not validly make gratuitous dispositions of any part or all of his wife's estate
"completely and absolutely dispose of any portion thereof inter vivos to anyone other than himself" in the
language of the main opinion and thereby render ineffectual and nugatory her institution of her brothers
and sisters as her designated heirs to succeed to her whole estate "at the death of (her) husband."

If according to the main opinion, Hodges could not make such gratuitous "complete and absolute dispositions"
of his wife Linnie's estate "mortis causa," it would seem that by the same token and rationale he was likewise
proscribed by the will from making such dispositions of Linnie's estate inter vivos.

I believe that the two questions of renvoi and renunciation should be


resolved preferentially and expeditiously by the probate court ahead of the partition and segregation of
the minimum one-fourth of the conjugal or community properties constituting Linnie Jane
Hodges' separate estate, which task considering that it is now seventeen (17) years since Linnie Jane Hodges'
death and her conjugal estate with C. N. Hodges has remained unliquidated up to now might take a similar
number of years to unravel with the numerous items, transactions and details of the sizable estates involved.

Such partition of the minimum one-fourth would not be final, since if the two prejudicial questions
of renvoi and renunciation were resolved favorably to Linnie's estate meaning to say that if it should be held
that C. N. Hodges is not entitled to any legitime of her estate and at any rate he had totally renounced his
inheritance under the will), then Linnie's estate would consist not only of the minimum one-fourth but one-
half of the conjugal or community properties of the Hodges spouses, which would require again the partition
and segregation of still another one-fourth of said properties to complete Linnie's separate estate.

Justice Teehankee also drew up suggested guidelines for application in the probate court. Please see original
case.

Makalintal, CJ.
Regardless of whether or not C. N. Hodges was entitled to a legitime in his deceased wife's estate which
question, still to be decided by the said probate court, may depend upon what is the law of Texas and upon its
applicability in the present case the said estate consists of one-half, not one-fourth, of the conjugal
properties. There is neither a minimum of one-fourth nor a maximum beyond that. It is important to bear this
in mind because the estate of Linnie Hodges consists of her share in the conjugal properties, is still under
administration and until now has not been distributed by order of the court.

COMPILED BY: Jo-Al Y. Gealon


Page 92 of 102
LABRADOR NOTES

The reference in both the main and separate opinions to a one-fourth portion of the conjugal properties as
Linnie Hodges minimum share is a misnomer and is evidently meant only to indicate that if her husband
should eventually be declared entitled to a legitime, then the disposition made by Linnie Hodges in favor of
her collateral relatives would be valid only as to one-half of her share, or one-fourth of the conjugal
properties, since the remainder, which constitutes such legitime, would necessarily go to her husband in
absolute ownership, unburdened by any substitution, term or condition, resolutory or otherwise. And until the
estate is finally settled and adjudicated to the heirs who may be found entitled to it, the administration must
continue to cover Linnie's entire conjugal share.

Rabadilla vs. CA, G.R. No. 113725, June 29, 2000

JOHNNY S. RABADILLA,[1] petitioner, vs. COURT OF APPEALS AND MARIA


MARLENA[2]COSCOLUELLA Y BELLEZA VILLACARLOS, respondents.

DECISION

PURISIMA, J.:

This is a petition for review of the decision of the Court of Appeals, [3] dated December 23, 1993, in
CA-G.R. No. CV-35555, which set aside the decision of Branch 52 of the Regional Trial Court in
Bacolod City, and ordered the defendants-appellees (including herein petitioner), as heirs of Dr. Jorge
Rabadilla, to reconvey title over Lot No. 1392, together with its fruits and interests, to the estate of
Aleja Belleza.

The antecedent facts are as follows:

In a Codicil appended to the Last Will and Testament of testatrix Aleja Belleza, Dr. Jorge Rabadilla,
predecessor-in-interest of the herein petitioner, Johnny S. Rabadilla, was instituted as a devisee of
511, 855 square meters of that parcel of land surveyed as Lot No. 1392 of the Bacolod Cadastre. The
said Codicil, which was duly probated and admitted in Special Proceedings No. 4046 before the then
Court of First Instance of Negros Occidental, contained the following provisions:

"FIRST

I give, leave and bequeath the following property owned by me to Dr. Jorge Rabadilla resident
of 141 P. Villanueva, Pasay City:

(a) Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002
(10942), which is registered in my name according to the records of the Register of Deeds of
Negros Occidental.

(b) That should Jorge Rabadilla die ahead of me, the aforementioned property and the rights
which I shall set forth hereinbelow, shall be inherited and acknowledged by the children and
spouse of Jorge Rabadilla.

xxx

FOURTH

(a)....It is also my command, in this my addition (Codicil), that should I die and Jorge
Rabadilla shall have already received the ownership of the said Lot No. 1392 of the Bacolod
Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10942), and also at the time
that the lease of Balbinito G. Guanzon of the said lot shall expire, Jorge Rabadilla shall have
the obligation until he dies, every year to give to Maria Marlina Coscolluela y Belleza, Seventy
(75) (sic) piculs of Export sugar and Twenty Five (25) piculs of Domestic sugar, until the said
Maria Marlina Coscolluela y Belleza dies.

FIFTH

(a) Should Jorge Rabadilla die, his heir to whom he shall give Lot No. 1392 of the Bacolod
Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10492), shall have the
obligation to still give yearly, the sugar as specified in the Fourth paragraph of his testament,
to Maria Marlina Coscolluela y Belleza on the month of December of each year.

SIXTH

COMPILED BY: Jo-Al Y. Gealon


Page 93 of 102
LABRADOR NOTES

I command, in this my addition (Codicil) that the Lot No. 1392, in the event that the one to
whom I have left and bequeathed, and his heir shall later sell, lease, mortgage this said Lot,
the buyer, lessee, mortgagee, shall have also the obligation to respect and deliver yearly ONE
HUNDRED (100) piculs of sugar to Maria Marlina Coscolluela y Belleza, on each month of
December, SEVENTY FIVE (75) piculs of Export and TWENTY FIVE (25) piculs of Domestic,
until Maria Marlina shall die, lastly should the buyer, lessee or the mortgagee of this lot, not
have respected my command in this my addition (Codicil), Maria Marlina Coscolluela y Belleza,
shall immediately seize this Lot No. 1392 from my heir and the latter's heirs, and shall turn it
over to my near desendants, (sic) and the latter shall then have the obligation to give the ONE
HUNDRED (100) piculs of sugar until Maria Marlina shall die. I further command in this my
addition (Codicil) that my heir and his heirs of this Lot No. 1392, that they will obey and follow
that should they decide to sell, lease, mortgage, they cannot negotiate with others than my
near descendants and my sister."[4]

Pursuant to the same Codicil, Lot No. 1392 was transferred to the deceased, Dr. Jorge Rabadilla, and
Transfer Certificate of Title No. 44498 thereto issued in his name.

Dr. Jorge Rabadilla died in 1983 and was survived by his wife Rufina and children Johnny (petitioner),
Aurora, Ofelia and Zenaida, all surnamed Rabadilla.

On August 21, 1989, Maria Marlena Coscolluela y Belleza Villacarlos brought a complaint, docketed as
Civil Case No. 5588, before Branch 52 of the Regional Trial Court in Bacolod City, against the above-
mentioned heirs of Dr. Jorge Rabadilla, to enforce the provisions of subject Codicil. The Complaint
alleged that the defendant-heirs violated the conditions of the Codicil, in that:

1. Lot No. 1392 was mortgaged to the Philippine National Bank and the Republic Planters Bank
in disregard of the testatrix's specific instruction to sell, lease, or mortgage only to the near
descendants and sister of the testatrix.

2. Defendant-heirs failed to comply with their obligation to deliver one hundred (100) piculs of
sugar (75 piculs export sugar and 25 piculs domestic sugar) to plaintiff Maria Marlena
Coscolluela y Belleza from sugar crop years 1985 up to the filing of the complaint as mandated
by the Codicil, despite repeated demands for compliance.

3. The banks failed to comply with the 6th paragraph of the Codicil which provided that in case
of the sale, lease, or mortgage of the property, the buyer, lessee, or mortgagee shall likewise
have the obligation to deliver 100 piculs of sugar per crop year to herein private respondent.

The plaintiff then prayed that judgment be rendered ordering defendant-heirs to reconvey/return-Lot
No. 1392 to the surviving heirs of the late Aleja Belleza, the cancellation of TCT No. 44498 in the
name of the deceased, Dr. Jorge Rabadilla, and the issuance of a new certificate of title in the names
of the surviving heirs of the late Aleja Belleza.

On February 26, 1990, the defendant-heirs were declared in default but on March 28, 1990 the Order
of Default was lifted, with respect to defendant Johnny S. Rabadilla, who filed his Answer, accordingly.

During the pre-trial, the parties admitted that:

On November 15, 1998, the plaintiff (private respondent) and a certain Alan Azurin, son-in-law of the
herein petitioner who was lessee of the property and acting as attorney-in-fact of defendant-heirs,
arrived at an amicable settlement and entered into a Memorandum of Agreement on the obligation to
deliver one hundred piculs of sugar, to the following effect:

"That for crop year 1988-89, the annuity mentioned in Entry No. 49074 of TCT No. 44489 will
be delivered not later than January of 1989, more specifically, to wit:

75 piculs of 'A' sugar, and 25 piculs of 'B' sugar, or then existing in any of our
names, Mary Rose Rabadilla y Azurin or Alan Azurin, during December of each
sugar crop year, in Azucar Sugar Central; and, this is considered compliance of
the annuity as mentioned, and in the same manner will compliance of the
annuity be in the next succeeding crop years.

That the annuity above stated for crop year 1985-86, 1986-87, and 1987-88, will be complied
in cash equivalent of the number of piculs as mentioned therein and which is as herein agreed
upon, taking into consideration the composite price of sugar during each sugar crop year,
which is in the total amount of ONE HUNDRED FIVE THOUSAND PESOS (P105,000.00).

COMPILED BY: Jo-Al Y. Gealon


Page 94 of 102
LABRADOR NOTES

That the above-mentioned amount will be paid or delivered on a staggered cash installment, payable
on or before the end of December of every sugar crop year, to wit:

For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or
before December of crop year 1988-89;

For 1986-87, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or
before December of crop year 1989-90;

For 1987-88, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or
before December of crop year 1990-91; and

For 1988-89, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or
before December of crop year 1991-92."[5]

However, there was no compliance with the aforesaid Memorandum of Agreement except for a partial
delivery of 50.80 piculs of sugar corresponding to sugar crop year 1988 -1989.

On July 22, 1991, the Regional Trial Court came out with a decision, dismissing the complaint and
disposing as follows:

"WHEREFORE, in the light of the aforegoing findings, the Court finds that the action is
prematurely filed as no cause of action against the defendants has as yet arose in favor of
plaintiff. While there maybe the non-performance of the command as mandated exaction from
them simply because they are the children of Jorge Rabadilla, the title holder/owner of the lot
in question, does not warrant the filing of the present complaint. The remedy at bar must fall.
Incidentally, being in the category as creditor of the left estate, it is opined that plaintiff may
initiate the intestate proceedings, if only to establish the heirs of Jorge Rabadilla and in order
to give full meaning and semblance to her claim under the Codicil.

In the light of the aforegoing findings, the Complaint being prematurely filed is DISMISSED
without prejudice.

SO ORDERED."[6]

On appeal by plaintiff, the First Division of the Court of Appeals reversed the decision of the trial
court; ratiocinating and ordering thus:

"Therefore, the evidence on record having established plaintiff-appellant's right to receive 100
piculs of sugar annually out of the produce of Lot No. 1392; defendants-appellee's obligation
under Aleja Belleza's codicil, as heirs of the modal heir, Jorge Rabadilla, to deliver such
amount of sugar to plaintiff-appellant; defendants-appellee's admitted non-compliance with
said obligation since 1985; and, the punitive consequences enjoined by both the codicil and
the Civil Code, of seizure of Lot No. 1392 and its reversion to the estate of Aleja Belleza in
case of such non-compliance, this Court deems it proper to order the reconveyance of title
over Lot No. 1392 from the estates of Jorge Rabadilla to the estate of Aleja Belleza. However,
plaintiff-appellant must institute separate proceedings to re-open Aleja Belleza's estate, secure
the appointment of an administrator, and distribute Lot No. 1392 to Aleja Belleza's legal heirs
in order to enforce her right, reserved to her by the codicil, to receive her legacy of 100 piculs
of sugar per year out of the produce of Lot No. 1392 until she dies.

Accordingly, the decision appealed from is SET ASIDE and another one entered ordering
defendants-appellees, as heirs of Jorge Rabadilla, to reconvey title over Lot No. 1392, together
with its fruits and interests, to the estate of Aleja Belleza.

SO ORDERED."[7]

Dissatisfied with the aforesaid disposition by the Court of Appeals, petitioner found his way to this
Court via the present petition, contending that the Court of Appeals erred in ordering the reversion of
Lot 1392 to the estate of the testatrix Aleja Belleza on the basis of paragraph 6 of the Codicil, and in
ruling that the testamentary institution of Dr. Jorge Rabadilla is a modal institution within the purview
of Article 882 of the New Civil Code.

The petition is not impressed with merit.

Petitioner contends that the Court of Appeals erred in resolving the appeal in accordance with Article
882 of the New Civil Code on modal institutions and in deviating from the sole issue raised which is

COMPILED BY: Jo-Al Y. Gealon


Page 95 of 102
LABRADOR NOTES

the absence or prematurity of the cause of action. Petitioner maintains that Article 882 does not find
application as there was no modal institution and the testatrix intended a mere simple substitution -
i.e. the instituted heir, Dr. Jorge Rabadilla, was to be substituted by the testatrix's "near
descendants" should the obligation to deliver the fruits to herein private respondent be not complied
with. And since the testatrix died single and without issue, there can be no valid substitution and such
testamentary provision cannot be given any effect.

The petitioner theorizes further that there can be no valid substitution for the reason that the
substituted heirs are not definite, as the substituted heirs are merely referred to as "near
descendants" without a definite identity or reference as to who are the "near descendants" and
therefore, under Articles 843 [8] and 845[9] of the New Civil Code, the substitution should be deemed as
not written.

The contentions of petitioner are untenable. Contrary to his supposition that the Court of Appeals
deviated from the issue posed before it, which was the propriety of the dismissal of the complaint on
the ground of prematurity of cause of action, there was no such deviation. The Court of Appeals found
that the private respondent had a cause of action against the petitioner. The disquisition made on
modal institution was, precisely, to stress that the private respondent had a legally demandable right
against the petitioner pursuant to subject Codicil; on which issue the Court of Appeals ruled in
accordance with law.

It is a general rule under the law on succession that successional rights are transmitted from the
moment of death of the decedent [10] and compulsory heirs are called to succeed by operation of law.
The legitimate children and descendants, in relation to their legitimate parents, and the widow or
widower, are compulsory heirs.[11] Thus, the petitioner, his mother and sisters, as compulsory heirs of
the instituted heir, Dr. Jorge Rabadilla, succeeded the latter by operation of law, without need of
further proceedings, and the successional rights were transmitted to them from the moment of death
of the decedent, Dr. Jorge Rabadilla.

Under Article 776 of the New Civil Code, inheritance includes all the property, rights and obligations of
a person, not extinguished by his death. Conformably, whatever rights Dr. Jorge Rabadilla had by
virtue of subject Codicil were transmitted to his forced heirs, at the time of his death. And since
obligations not extinguished by death also form part of the estate of the decedent; corollarily, the
obligations imposed by the Codicil on the deceased Dr. Jorge Rabadilla, were likewise transmitted to
his compulsory heirs upon his death.

In the said Codicil, testatrix Aleja Belleza devised Lot No. 1392 to Dr. Jorge Rabadilla, subject to the
condition that the usufruct thereof would be delivered to the herein private respondent every year.
Upon the death of Dr. Jorge Rabadilla, his compulsory heirs succeeded to his rights and title over the
said property, and they also assumed his (decedent's) obligation to deliver the fruits of the lot
involved to herein private respondent. Such obligation of the instituted heir reciprocally corresponds to
the right of private respondent over the usufruct, the fulfillment or performance of which is now being
demanded by the latter through the institution of the case at bar. Therefore, private respondent has a
cause of action against petitioner and the trial court erred in dismissing the complaint below.

Petitioner also theorizes that Article 882 of the New Civil Code on modal institutions is not applicable
because what the testatrix intended was a substitution - Dr. Jorge Rabadilla was to be substituted by
the testatrix's near descendants should there be noncompliance with the obligation to deliver the
piculs of sugar to private respondent.

Again, the contention is without merit.

Substitution is the designation by the testator of a person or persons to take the place of the heir or
heirs first instituted. Under substitutions in general, the testator may either (1) provide for the
designation of another heir to whom the property shall pass in case the original heir should die before
him/her, renounce the inheritance or be incapacitated to inherit, as in a simple substitution, [12] or (2)
leave his/her property to one person with the express charge that it be transmitted subsequently to
another or others, as in a fideicommissary substitution.[13] The Codicil sued upon contemplates neither
of the two.

In simple substitutions, the second heir takes the inheritance in default of the first heir by reason of
incapacity, predecease or renunciation.[14] In the case under consideration, the provisions of subject
Codicil do not provide that should Dr. Jorge Rabadilla default due to predecease, incapacity or
renunciation, the testatrix's near descendants would substitute him. What the Codicil provides is that,
should Dr. Jorge Rabadilla or his heirs not fulfill the conditions imposed in the Codicil, the property
referred to shall be seized and turned over to the testatrix's near descendants.

Neither is there a fideicommissary substitution here and on this point, petitioner is correct. In a
fideicommissary substitution, the first heir is strictly mandated to preserve the property and to

COMPILED BY: Jo-Al Y. Gealon


Page 96 of 102
LABRADOR NOTES

transmit the same later to the second heir.[15] In the case under consideration, the instituted heir is
in fact allowed under the Codicil to alienate the property provided the negotiation is with the near
descendants or the sister of the testatrix. Thus, a very important element of a fideicommissary
substitution is lacking; the obligation clearly imposing upon the first heir the preservation of the
property and its transmission to the second heir. "Without this obligation to preserve clearly imposed
by the testator in his will, there is no fideicommissary substitution." [16] Also, the near descendants'
right to inherit from the testatrix is not definite. The property will only pass to them should Dr. Jorge
Rabadilla or his heirs not fulfill the obligation to deliver part of the usufruct to private respondent.

Another important element of a fideicommissary substitution is also missing here. Under Article 863,
the second heir or the fideicommissary to whom the property is transmitted must not be beyond one
degree from the first heir or the fiduciary. A fideicommissary substitution is therefore, void if the first
heir is not related by first degree to the second heir.[17] In the case under scrutiny, the near
descendants are not at all related to the instituted heir, Dr. Jorge Rabadilla.

The Court of Appeals erred not in ruling that the institution of Dr. Jorge Rabadilla under subject Codicil
is in the nature of a modal institution and therefore, Article 882 of the New Civil Code is the provision
of law in point. Articles 882 and 883 of the New Civil Code provide:

Art. 882. The statement of the object of the institution or the application of the property left
by the testator, or the charge imposed on him, shall not be considered as a condition unless it
appears that such was his intention.

That which has been left in this manner may be claimed at once provided that the instituted
heir or his heirs give security for compliance with the wishes of the testator and for the return
of anything he or they may receive, together with its fruits and interests, if he or they should
disregard this obligation.

Art. 883. When without the fault of the heir, an institution referred to in the preceding article
cannot take effect in the exact manner stated by the testator, it shall be complied with in a
manner most analogous to and in conformity with his wishes.

The institution of an heir in the manner prescribed in Article 882 is what is known in the law of
succession as an institucion sub modo or a modal institution. In a modal institution, the testator states
(1) the object of the institution, (2) the purpose or application of the property left by the testator, or
(3) the charge imposed by the testator upon the heir.[18] A "mode" imposes an obligation upon the
heir or legatee but it does not affect the efficacy of his rights to the succession. [19] On the other hand,
in a conditional testamentary disposition, the condition must happen or be fulfilled in order for the heir
to be entitled to succeed the testator. The condition suspends but does not obligate; and the mode
obligates but does not suspend.[20] To some extent, it is similar to a resolutory condition. [21]

From the provisions of the Codicil litigated upon, it can be gleaned unerringly that the testatrix
intended that subject property be inherited by Dr. Jorge Rabadilla. It is likewise clearly worded that
the testatrix imposed an obligation on the said instituted heir and his successors-in-interest to deliver
one hundred piculs of sugar to the herein private respondent, Marlena Coscolluela Belleza, during the
lifetime of the latter. However, the testatrix did not make Dr. Jorge Rabadilla's inheritance and the
effectivity of his institution as a devisee, dependent on the performance of the said obligation. It is
clear, though, that should the obligation be not complied with, the property shall be turned over to the
testatrix's near descendants. The manner of institution of Dr. Jorge Rabadilla under subject Codicil is
evidently modal in nature because it imposes a charge upon the instituted heir without, however,
affecting the efficacy of such institution.

Then too, since testamentary dispositions are generally acts of liberality, an obligation imposed upon
the heir should not be considered a condition unless it clearly appears from the Will itself that such
was the intention of the testator. In case of doubt, the institution should be considered as modal and
not conditional.[22]

Neither is there tenability in the other contention of petitioner that the private respondent has only a
right of usufruct but not the right to seize the property itself from the instituted heir because the right
to seize was expressly limited to violations by the buyer, lessee or mortgagee.

In the interpretation of Wills, when an uncertainty arises on the face of the Will, as to the application
of any of its provisions, the testator's intention is to be ascertained from the words of the Will, taking
into consideration the circumstances under which it was made. [23] Such construction as will sustain
and uphold the Will in all its parts must be adopted.[24]

Subject Codicil provides that the instituted heir is under obligation to deliver One Hundred (100) piculs
of sugar yearly to Marlena Belleza Coscuella. Such obligation is imposed on the instituted heir, Dr.
Jorge Rabadilla, his heirs, and their buyer, lessee, or mortgagee should they sell, lease, mortgage or

COMPILED BY: Jo-Al Y. Gealon


Page 97 of 102
LABRADOR NOTES

otherwise negotiate the property involved. The Codicil further provides that in the event that the
obligation to deliver the sugar is not respected, Marlena Belleza Coscuella shall seize the property and
turn it over to the testatrix's near descendants. The non-performance of the said obligation is thus
with the sanction of seizure of the property and reversion thereof to the testatrix's near descendants.
Since the said obligation is clearly imposed by the testatrix, not only on the instituted heir but also on
his successors-in-interest, the sanction imposed by the testatrix in case of non-fulfillment of said
obligation should equally apply to the instituted heir and his successors-in-interest.

Similarly unsustainable is petitioner's submission that by virtue of the amicable settlement, the said
obligation imposed by the Codicil has been assumed by the lessee, and whatever obligation petitioner
had become the obligation of the lessee; that petitioner is deemed to have made a substantial and
constructive compliance of his obligation through the consummated settlement between the lessee
and the private respondent, and having consummated a settlement with the petitioner, the recourse
of the private respondent is the fulfillment of the obligation under the amicable settlement and not the
seizure of subject property.

Suffice it to state that a Will is a personal, solemn, revocable and free act by which a person disposes
of his property, to take effect after his death.[25] Since the Will expresses the manner in which a
person intends how his properties be disposed, the wishes and desires of the testator must be strictly
followed. Thus, a Will cannot be the subject of a compromise agreement which would thereby defeat
the very purpose of making a Will.

WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of Appeals, dated
December 23, 1993, in CA-G.R. No. CV-35555 AFFIRMED. No pronouncement as to costs

SO ORDERED.

Jaboneta vs. Gustilo, G.R. No. 1641, January 19, 1906

G.R. No. 1641 January 19, 1906

GERMAN JABONETA, plaintiff-appellant,


vs.
RICARDO GUSTILO, ET AL., defendants-appellees.

Ledesma, Sumulong and Quintos for appellant.


Del-Pan, Ortigas and Fisher for appellees.

CARSON, J.:

In these proceedings probate was denied the last will and testament of Macario Jaboneta, deceased, because
the lower court was of the opinion from the evidence adduced at the hearing that Julio Javellana, one of the
witnesses, did not attach his signature thereto in the presence of Isabelo Jena, another of the witnesses, as
required by the provisions of section 618 of the Code of Civil Procedure.

The following is a copy of the evidence which appears of record on this particular point, being a part of the
testimony of the said Isabeo Jena:

Q. 1641 Who first signed the will?

A. 1641 I signed it first, and afterwards Aniceto and the others.

Q. 1641 Who were those others to whom you have just referred?

A. 1641 After the witness Aniceto signed the will I left the house, because I was in a hurry, and
at the moment when I was leaving I saw Julio Javellana with the pen in his hand in position ready to
sign (en actitud de firmar). I believe he signed, because he was at the table. . . .

Q. 1641 State positively whether Julio Javellana did or did not sign as a witness to the will.

A. 1641 I can't say certainly, because as I was leaving the house I saw Julio Javellana with the
pen in his hand, in position ready to sign. I believe he signed.

Q. 1641 Why do you believe Julio Javellana signed?

COMPILED BY: Jo-Al Y. Gealon


Page 98 of 102
LABRADOR NOTES

A. 1641 Because he had the pen in his hand, which was resting on the paper, though I did not
actually see him sign.

Q. 1641 Explain this contradictory statement.

A. 1641 After I signed I asked permission to leave, because I was in a hurry, and while I was
leaving Julio had already taken the pen in his hand, as it appeared, for the purpose of signing, and
when I was near the door I happened to turn my face and I saw that he had his hand with the pen
resting on the will, moving it as if for the purpose of signing.

Q. 1641 State positively whether Julio moved his hand with the pen as if for the purpose of
signing, or whether he was signing

A. I believe he was signing.

The truth and accuracy of the testimony of this witness does not seem to have been questioned by any of the
parties to the proceedings, but the court, nevertheless, found the following facts:

On the 26th day of December, 1901, Macario Jaboneta executed under the following circumstances
the document in question, which has been presented for probate as his will:

Being in the house of Arcadio Jarandilla, in Jaro, in this province, he ordered that the document in
question be written, and calling Julio Javellana, Aniceto Jalbuena, and Isabelo Jena as witnesses,
executed the said document as his will. They were all together, and were in the room where Jaboneta
was, and were present when he signed the document, Isabelo Jena signing afterwards as a witness, at
his request, and in his presence and in the presence of the other two witnesses. Aniceto Jalbuena then
signed as a witness in the presence of the testator, and in the presence of the other two persons who
signed as witnesses. At that moment Isabelo Jena, being in a hurry to leave, took his hat and left the
room. As he was leaving the house Julio Javellana took the pen in his hand and put himself in position
to sign the will as a witness, but did not sign in the presence of Isabelo Jena; but nevertheless, after
Jena had left the room the said Julio Javellana signed as a witness in the presence of the testator and
of the witness Aniceto Jalbuena.

We can not agree with so much of the above finding of facts as holds that the signature of Javellana was not
signed in the presence of Jena, in compliance with the provisions of section 618 of the Code of Civil Procedure.
The fact that Jena was still in the room when he saw Javellana moving his hand and pen in the act of affixing
his signature to the will, taken together with the testimony of the remaining witnesses which shows that
Javellana did in fact there and then sign his name to the will, convinces us that the signature was affixed in
the presence of Jena. The fact that he was in the act of leaving, and that his back was turned while a portion
of the name of the witness was being written, is of no importance. He, with the other witnesses and the
testator, had assembled for the purpose of executing the testament, and were together in the same room for
that purpose, and at the moment when the witness Javellana signed the document he was actually and
physically present and in such position with relation to Javellana that he could see everything which took place
by merely casting his eyes in the proper direction, and without any physical obstruction to prevent his doing
so, therefore we are of opinion that the document was in fact signed before he finally left the room.

The purpose of a statutory requirement that the witness sign in the presence of the testator is said to
be that the testator may have ocular evidence of the identity of the instrument subscribed by the
witness and himself, and the generally accepted tests of presence are vision and mental apprehension.
(See Am. & Eng. Enc. of Law, vol. 30, p. 599, and cases there cited.)

In the matter of Bedell (2 Connoly (N.Y.), 328) it was held that it is sufficient if the witnesses are together for
the purpose of witnessing the execution of the will, and in a position to actually see the testator write, if they
choose to do so; and there are many cases which lay down the rule that the true test of vision is not whether
the testator actually saw the witness sign, but whether he might have seen him sign, considering his mental
and physical condition and position at the time of the subscription. (Spoonemore vs. Cables, 66 Mo., 579.)

The principles on which these cases rest and the tests of presence as between the testator and the witnesses
are equally applicable in determining whether the witnesses signed the instrument in the presence of each
other, as required by the statute, and applying them to the facts proven in these proceedings we are of
opinion that the statutory requisites as to the execution of the instrument were complied with, and that the
lower court erred in denying probate to the will on the ground stated in the ruling appealed from.

We are of opinion from the evidence of record that the instrument propounded in these proceedings was
satisfactorily proven to be the last will and testament of Macario Jaboneta, deceased, and that it should
therefore be admitted to probate.

COMPILED BY: Jo-Al Y. Gealon


Page 99 of 102
LABRADOR NOTES

The judgment of the trial court is reversed, without especial condemnation of costs, and after twenty days the
record will be returned to the court form whence it came, where the proper orders will be entered in
conformance herewith. So ordered.

Anselma Diaz vs. IAC and Felisa Jardin, G.R. No. L-66574, February 21, 1990

G.R. No. L-66574

ANSELMA DIAZ, guardian of VICTOR, RODRIGO, ANSELMINA and MIGUEL, all surnamed SANTERO,
petitioners, and FELIXBERTA PACURSA guardian of FEDERICO SANTERO, et al.,
vs.
INTERMEDIATE APPELLATE COURT and FELISA PAMUTI JARDIN, respondents.

Ambrosia Padilla, Mempin & Reyes Law Offices for petitioners.


Pedro S. Sarino for respondent F.P. Jardin.

PARAS, J.:

Private respondent filed a Petition dated January 23, 1976 with the Court of First Instance of Cavite in Sp.
Proc. Case No. B-21, "In The Matter of the Intestate Estate of the late Simona Pamuti Vda. de Santero,"
praying among other things, that the corresponding letters of Administration be issued in her favor and that
she be appointed as special Administratrix of the properties of the deceased Simona Pamuti Vda. de Santero.

It is undisputed: 1) that Felisa Pamuti Jardin is a niece of Simona Pamuti Vda. de Santero who together with
Felisa's mother Juliana were the only legitimate children of the spouses Felipe Pamuti and Petronila Asuncion;
2) that Juliana married Simon Jardin and out of their union were born Felisa Pamuti and another child who
died during infancy; 3) that Simona Pamuti Vda. de Santero is the widow of Pascual Santero and the mother
of Pablo Santero; 4) that Pablo Santero was the only legitimate son of his parents Pascual Santero and
Simona Pamuti Vda. de Santero; 5) that Pascual Santero died in 1970; Pablo Santero in 1973 and Simona
Santero in 1976; 6) that Pablo Santero, at the time of his death was survived by his mother Simona Santero
and his six minor natural children to wit: four minor children with Anselma Diaz and two minor children with
Felixberta Pacursa.

Judge Jose Raval in his Orders dated December 1, 1976 1 and December 9, 1976 2
declared Felisa Pamuti
Jardin as the sole legitimate heir of Simona Pamuti Vda. de Santero.

Before the trial court, there were 4 interrelated cases filed to wit:

a) Sp. Proc. No. B-4 is the Petition for the Letters of Administration of the intestate Estate of Pablo
Santero;

b) Sp. Proc. No. B-5 is the Petition for the Letters of Administration of the Intestate Estate of
Pascual Santero;

c) Sp. Proc. No. B-7 is the Petition for Guardianship over the properties of an Incompetent Person,
Simona Pamuti Vda. de Santero;

d) Sp. Proc. No. B-21 is the Petition for Settlement of the Intestate Estate of Simona Pamuti Vda.
de Santero.

Felisa Jardin upon her Motion to Intervene in Sp. Proceedings Nos. B-4 and B-5, was allowed to intervene in
the intestate estates of Pablo Santero and Pascual Santero by Order of the Court dated August 24, 1977.

Petitioner Anselma Diaz, as guardian of her minor children, filed her "Opposition and Motion to Exclude Felisa
Pamuti Jardin dated March 13, 1980, from further taking part or intervening in the settlement of the intestate
estate of Simona Pamuti Vda. de Santero, as well as in the intestate estate of Pascual Santero and Pablo
Santero.

Felixberta Pacursa guardian for her minor children, filed thru counsel, her Manifestation of March 14, 1980
adopting the Opposition and Motion to Exclude Felisa Pamuti, filed by Anselma Diaz.

COMPILED BY: Jo-Al Y. Gealon


Page 100 of 102
LABRADOR NOTES

On May 20, 1980, Judge Ildefonso M. Bleza issued an order excluding Felisa Jardin "from further taking part or
intervening in the settlement of the intestate estate of Simona Pamuti Vda. de Santero, as well as in the
intestate estates of Pascual Santero and Pablo Santero and declared her to be, not an heir of the deceased
Simona Pamuti Vda. de Santero." 3

After her Motion for Reconsideration was denied by the trial court in its order dated November 1, 1980, Felisa
P. Jardin filed her appeal to the Intermediate Appellate Court in CA-G.R. No. 69814-R. A decision 4 was
rendered by the Intermediate Appellate Court on December 14, 1983 (reversing the decision of the trial court)
the dispositive portion of which reads

WHEREFORE, finding the Order appealed from not consistent with the facts and law applicable, the
same is hereby set aside and another one entered sustaining the Orders of December 1 and 9, 1976
declaring the petitioner as the sole heir of Simona Pamuti Vda. de Santero and ordering oppositors-
appellees not to interfere in the proceeding for the declaration of heirship in the estate of Simona
Pamuti Vda. de Santero.

Costs against the oppositors-appellees.

The Motion for Reconsideration filed by oppositors-appellees (petitioners herein) was denied by the same
respondent court in its order dated February 17, 1984 hence, the present petition for Review with the
following:

ASSIGNMENT OF ERRORS

I. The Decision erred in ignoring the right to intestate succession of petitioners grandchildren Santero
as direct descending line (Art. 978) and/or natural/"illegitimate children" (Art. 988) and prefering a
niece, who is a collateral relative (Art. 1003);

II. The Decision erred in denying the right of representation of the natural grandchildren Santero to
represent their father Pablo Santero in the succession to the intestate estate of their
grandmother Simona Pamuti Vda.de Santero (Art. 982);

III. The Decision erred in mistaking the intestate estate of the grandmother Simona Pamuti Vda. de
Santero as the estate of "legitimate child or relative" of Pablo Santero, her son and father of the
petitioners' grandchildren Santero;

IV. The Decision erred in ruling that petitioner-appellant Felisa P. Jardin who is a niece and therefore
a collateral relative of Simona Pamuti Vda. de Santero excludes the natural children of her son Pablo
Santero, who are her direct descendants and/or grand children;

V. The Decision erred in applying Art. 992, when Arts. 988, 989 and 990 are the applicable provisions
of law on intestate succession; and

VI. The Decision erred in considering the orders of December 1 and December 9, 1976 which are
provisional and interlocutory as final and executory.

The real issue in this case may be briefly stated as follows who are the legal heirs of Simona Pamuti Vda.
de Santero her niece Felisa Pamuti Jardin or her grandchildren (the natural children of Pablo Santero)?

The dispute at bar refers only to the intestate estate of Simona Pamuti Vda. de Santero and the issue here is
whether oppositors-appellees (petitioners herein) as illegitimate children of Pablo Santero could inherit from
Simona Pamuti Vda. de Santero, by right of representation of their father Pablo Santero who is a legitimate
child of Simona Pamuti Vda, de Santero.

Now then what is the appropriate law on the matter? Petitioners contend in their pleadings that Art. 990 of the
New Civil Code is the applicable law on the case. They contend that said provision of the New Civil Code
modifies the rule in Article 941 (Old Civil Code) and recognizes the right of representation (Art. 970) to
descendants, whether legitimate or illegitimate and that Art. 941, Spanish Civil Code denied illegitimate
children the right to represent their deceased parents and inherit from their deceased grandparents, but that
Rule was expressly changed and/or amended by Art. 990 New Civil Code which expressly grants the
illegitimate children the right to represent their deceased father (Pablo Santero) in the estate of their
grandmother Simona Pamuti)." 5

Petitioners' contention holds no water. Since the heridatary conflict refers solely to the intestate estate of
Simona Pamuti Vda. de Santero, who is the legitimate mother of Pablo Santero, the applicable law is the
provision of Art. 992 of the Civil Code which reads as follows:

COMPILED BY: Jo-Al Y. Gealon


Page 101 of 102
LABRADOR NOTES

ART. 992. An illegitimate child has no right to inherit ab intestato from the legitimate children and
relatives of his father or mother; nor shall such children or relatives inherit in the same manner from
the illegitimate child. (943a)

Pablo Santero is a legitimate child, he is not an illegitimate child. On the other hand, the oppositors
(petitioners herein) are the illegitimate children of Pablo Santero.

Article 992 of the New Civil Code provides a barrier or iron curtain in that it prohibits absolutely a
succession ab intestato between the illegitimate child and the legitimate children and relatives of the father or
mother of said legitimate child. They may have a natural tie of blood, but this is not recognized by law for the
purposes of Art. 992, Between the legitimate family and the illegitimate family there is presumed to be an
intervening antagonism and incompatibility. The illegitimate child is disgracefully looked down upon by the
legitimate family; the family is in turn, hated by the illegitimate child; the latter considers the privileged
condition of the former, and the resources of which it is thereby deprived; the former, in turn, sees in the
illegitimate child nothing but the product of sin, palpable evidence of a blemish broken in life; the law does no
more than recognize this truth, by avoiding further grounds of resentment. 6

Thus, petitioners herein cannot represent their father Pablo Santero in the succession of the letter to the
intestate estate of his legitimate mother Simona Pamuti Vda. de Santero, because of the barrier provided for
under Art. 992 of the New Civil Code.

In answer to the erroneous contention of petitioners that Article 941 of the Spanish Civil Code is changed by
Article 990 of the New Civil Code, We are reproducing herewith the Reflections of the Illustrious Hon. Justice
Jose B.L. Reyes which also finds full support from other civilists, to wit:

In the Spanish Civil Code of 1889 the right of representation was admitted only within the legitimate
family; so much so that Article 943 of that Code prescribed that an illegitimate child can riot inherit ab
intestato from the legitimate children and relatives of his father and mother. The Civil Code of the
Philippines apparently adhered to this principle since it reproduced Article 943 of the Spanish Code in
its own Art. 992, but with fine inconsistency, in subsequent articles (990, 995 and 998) our Code
allows the hereditary portion of the illegitimate child to pass to his own descendants, whether
legitimate or illegitimate. So that while Art. 992 prevents the illegitimate issue of a legitimate child
from representing him in the intestate succession of the grandparent, the illegitimates of an
illegitimate child can now do so. This difference being indefensible and unwarranted, in the future
revision of the Civil Code we shall have to make a choice and decide either that the illegitimate issue
enjoys in all cases the right of representation, in which case Art. 992 must be suppressed; or
contrariwise maintain said article and modify Articles 995 and 998. The first solution would be more in
accord with an enlightened attitude vis-a-vis illegitimate children. (Reflections on the Reform of
Hereditary Succession, JOURNAL of the Integrated Bar of the Philippines, First Quater, 1976, Volume
4, Number 1, pp. 40-41).

It is therefore clear from Article 992 of the New Civil Code that the phrase "legitimate children and relatives of
his father or mother" includes Simona Pamuti Vda. de Santero as the word "relative" includes all the kindred
of the person spoken of. 7 The record shows that from the commencement of this case the only parties who
claimed to be the legitimate heirs of the late Simona Pamuti Vda. de Santero are Felisa Pamuti Jardin and the
six minor natural or illegitimate children of Pablo Santero. Since petitioners herein are barred by the
provisions of Article 992, the respondent Intermediate Appellate Court did not commit any error in holding
Felisa Pamuti-Jardin to be the sole legitimate heir to the intestate estate of the late Simona Pamuti Vda. de
Santero.

Lastly, petitioners claim that the respondent Intermediate Appellate Court erred in ruling that the Orders of
the Court a quo dated December 1, 1976 and December 9, 1976 are final and executory. Such contention is
without merit. The Hon. Judge Jose Raval in his order dated December 1, 1976 held that the oppositors
(petitioners herein) are not entitled to intervene and hence not allowed to intervene in the proceedings for the
declaration of the heirship in the intestate estate of Simona Pamuti Vda. de Santero. Subsequently, Judge
Jose Raval issued an order, dated December 9, 1976, which declared Felisa Pamuti-Jardin to be the sole
legitimate heir of Simona Pamuti. The said Orders were never made the subjects of either a motion for
reconsideration or a perfected appeal. Hence, said orders which long became final and executory are already
removed from the power of jurisdiction of the lower court to decide anew. The only power retained by the
lower court, after a judgment has become final and executory is to order its execution. The respondent Court
did not err therefore in ruling that the Order of the Court a quo dated May 30, 1980 excluding Felisa Pamuti
Jardin as intestate heir of the deceased Simona Pamuti Vda. de Santero "is clearly a total reversal of an Order
which has become final and executory, hence null and void. "

WHEREFORE, this petition is hereby DISMISSED, and the assailed decision is hereby AFFIRMED.

SO ORDERED.

COMPILED BY: Jo-Al Y. Gealon


Page 102 of 102
LABRADOR NOTES

COMPILED BY: Jo-Al Y. Gealon