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RULE 81

BONDS OF EXECUTORS AND ADMINISTRATORS

Section 1. Bond to be given issuance of letters. Amount. Condition


SP2.5 Ocampo v. Ocampo, supra, cf. R. 79, S.3
SP3.5 Luzon Surety Co, Inc. v. Quebrar

RULE 82
Revocation of Administration, Death, Resignation, and Removal of Executors and Administrators

Section 2. Court may remove or accept regulation of executor or administrator. Proceedings upon death,
resignation, or removal.
SP4.5 Suntay III v. Cojuangco-Suntay
SP5.5 Hilado v. CA
FACTS: Roberto S. Benedicto died intestate on 15 May 2000. He was survived by his wife, private respondent Julita
Campos Benedicto (administratrix Benedicto), and his only daughter, Francisca Benedicto-Paulino. private respondent
Julita Campos Benedicto filed a petition for the issuance of letters of administration in her favor, the value of the assets of
the decedent to be P5 Million, net of liabilities, which was then granted to her through the issuance letters of
administration in her favor. There were two pending claims (in separate civil suits) against the Roberto Benedicto, having
Alfredo Hilado, and Lopez Sugar Corporation and First Farmers Holding Corporation as petitioners. Such claims were
included in an Inventory of the Estate, Lists of Personal and Real Properties, and Liabilities of the decedent.

Petitioners filed a motion that they be furnished with copies of all processes and orders pertaining to the intestate
proceedings. Private respondent opposed the manifestation/motion, disputing the personality of petitioners to intervene in
the intestate proceedings of her husband. The motion was denied by the RTC, which was then affirmed by the CA. Hence,
this petition to the SC. Petitioners contend they have the right to intervene in the intestate proceedings of the estate of
Roberto Benedicto and they have complaints against the general competence of the administrator.

ISSUE: Whether the petitioners (creditors) have the right to intervene in the all the aspect of intestate proceedings of the
estate of Roberto Benedicto; What remedy is available to the creditors if they find the administrator as incompetent

RULING: 1. No. Rules on Special Proceedings do not provide a creditor or any person interested in the estate, the right to
participate in every aspect of the testate or intestate proceedings, but instead provides for specific instances when such
persons may accordingly act in those proceedings.

2. Removal of the administrator - Concerning complaints against the general competence of the administrator, the
proper remedy is to seek the removal of the administrator in accordance with Section 2, Rule 82. While the provision is
silent as to who may seek with the court the removal of the administrator, we do not doubt that a creditor, even a
contingent one, would have the personality to seek such relief. After all, the interest of the creditor in the estate relates to
the preservation of sufficient assets to answer for the debt, and the general competence or good faith of the administrator
is necessary to fulfill such purpose.

SP6.5 Quasha Ancheta Pena and Nolasco Law Office v. LCN Construction Corp.
SP7.5 Pascual v. CA

Section 3. Acts before revocation, resignation, or removal to be valid

SP8.5 Vda. De Bacaling v. Laguna


MAIN POINT: Under Section 3, Rule 82 of the Rules of Court, petitioner's lawful acts before the revocation of her
letters of administration or before her removal shall have the same validity as if there was no such revocation or removal.
It is elementary that the effect of revocation of letters testamentary or of administration is to terminate the authority of the
executor or administrator, but the acts of the executor or administrator, done in good faith prior to the revocation of the
letters, will be protected, and a similar protection will be extended to rights acquired under a previous grant of
administration.


FACTS: Laguda is the registered owner of residential land in Iloilo City. Many years back, petitioner and her late
husband, Dr. Bacaling, with the acquiescence of Laguda, constructed a residential house on a portion of said lot paying a
monthly rental. Unable to pay the lease rental for more than one year, an action for ejectment was filed by Laguda against
petitioner in her capacity as judicial administratrix of the estate of her late husband. The filing of said case spawned
various court suits. The petitioner entered into a compromise agreement (which was approved by the court) with Laguda
(on the ejectment case). Said agreement provides among others that upon failure of defendant to comply with any
provision of the amicable settlement within fifty (50) days the plaintiff shall be entitled to 'immediate execution to restore
plaintiff in possession of the premises and to recover all the unpaid monthly rents.

For failure of the petitioner to satisfy the conditions of the settlement within the 50-day period, Laguda moved for
execution which the Court granted.
Petitioner moved to quash the writ of execution but was denied. A special order of
demolition was issued upon the motion of Laguda.
Petitioner claims that since she was no longer the judicial
administratrix of the estate of her late husband, Dr. Ramon Bacaling, and was no longer in control of estate funds when
the stipulated obligations in the amicable settlement became due and payable, the special order of demolition could not be
enforced.


ISSUE: Whether or not the acts of the petitioner as judicial administratrix prior to her discharge or removal are valid and
binding upon her successor

RULING: Such a view is not tenable. Under Section 3, Rule 82 of the Rules of Court, petitioner's lawful acts before the
revocation of her letters of administration or before her removal shall have the same validity as if there was no such
revocation or removal. It is elementary that the effect of revocation of letters testamentary or of administration is to
terminate the authority of the executor or administrator, but the acts of the executor or administrator, done in good faith
prior to the revocation of the letters, will be protected, and a similar protection will be extended to rights acquired under a
previous grant of administration.


RULE 83
Inventory and Appraisal. Provision for Support of Family

Section 1. Inventory and appraisal to be released within three months.

SP9.5 Aranas v. Mercado


MAINPOINT: The usage of the word all in Section 1 of Rule 83 demands the inclusion of all the real and personal
properties of the decedent in the inventory. The said section allows no exception, for the phrase true inventory implies that
no properties appearing to belong to the decedent can be excluded from the inventory, regardless of their being in the
possession of another person or entity.

FACTS: Emigdio S. Mercado died intestate survived by his second wife, Teresita V. Mercado and their five children. He
owned corporate shares in Mervir Realty and Cebu Emerson Transportation Corporation. He assigned his real properties
in exchange for corporate stocks of Mervir Realty, and sold his real property in Badian, Cebu to Mervir Realty.

Thelma, child of Emigdio in his first marriage, filed a petition for the appointment of Teresita as the administrator of
Emigdio's estate which was granted. Teresita submitted an inventory of the estate of Emigdio. She indicated in the
inventory that at the time of his death, Emigdio had left no real properties but only personal properties. Claiming that
Emigdio had owned other properties that were excluded from the inventory, Thelma moved that the RTC direct Teresita
to amend the inventory, and to be examined regarding it.

The RTC issued an order finding and holding that the inventory submitted by Teresita had excluded properties that should
be included, particularly the property sold and assigned to Mervir Realty. On appeal, the CA reversed the RTC decision
insofar as the inclusion of the of parcels of land located at Badian, Cebu and the various parcels of land subject matter of
the Deeds of Assignment in the revised inventory to be submitted by the administratrix is concerned.

ISSUE: Whether or not he RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in
directing the inclusion of certain properties in the inventory notwithstanding that such properties had been either
transferred by sale or exchanged for corporate shares in Mervir Realty by the decedent during his lifetime?

RULING: No. The CA's conclusion of grave abuse of discretion on the part of the RTC was unwarranted and erroneous.
Upon issuing the letters of administration to the surviving spouse, the RTC becomes duty-bound to direct the preparation
and submission of the inventory of the properties of the estate, and the surviving spouse, as the administrator, has the duty
and responsibility to submit the inventory within three months from the issuance of letters of administration pursuant to
Rule 83 of the Rules of Court, viz.:

Section 1. Inventory and appraisal to be returned within three months. — Within three (3)
months after his appointment every executor or administrator shall return to the court a
true inventory and appraisal of all the real and personal estate of the deceased which has
come into his possession or knowledge. In the appraisement of such estate, the court may
order one or more of the inheritance tax appraisers to give his or their assistance.

The usage of the word all in Section 1, supra, demands the inclusion of all the real and personal properties of the
decedent in the inventory. However, the word all is qualified by the phrase which has come into his possession or
knowledge, which signifies that the properties must be known to the administrator to belong to the decedent or are in her
possession as the administrator. Section 1 allows no exception, for the phrase true inventory implies that no properties
appearing to belong to the decedent can be excluded from the inventory, regardless of their being in the possession of
another person or entity.

SP10.5 Hilado v. CA
FACTS: Roberto S. Benedicto died intestate survived by his wife, private respondent Benedicto, and his only daughter.
At the time of his death, there were two pending civil cases against Benedicto involving the petitioners.
RTC issued an order appointing private respondent Benedicto as administrator of the estate of her deceased
husband, and issuing letters of administration in her favor. Private respondent submitted an Inventory of the Estate, Lists
of Personal and Real Properties, and Liabilities of the Estate of her deceased husband. In the List of Liabilities attached to
the inventory, private respondent included as among the liabilities, two pending claims then being litigated. Thereafter,
the RTC required private respondent to submit a complete and updated inventory and appraisal report pertaining to the
estate.
Petitioners filed with the RTC a motion praying that they be furnished with copies of all processes and orders
pertaining to the intestate proceedings. Private respondent opposed the motion, disputing the personality of petitioners to
intervene in the intestate proceedings of her husband. Petitioners also filed an omnibus motion praying that the RTC set a
deadline for the submission by private respondent of the required inventory of the decedent’s estate.

RTC: RTC issued an order denying the first motion, on the ground that petitioners are not interested parties within the
contemplation of the ROC to intervene in the intestate proceedings.

CA: Petition for certiorari was filed with the CA. The CA dismissed the petition.

SC: One of the reliefs sought by petitioners; that a deadline be set for the submission by administratrix Benedicto to
submit a verified and complete inventory of the estate, and upon submission thereof: the inheritance tax appraisers of the
BIR be required to assist in the appraisal of the fair market value of the same; and that the intestate court set a deadline for
the submission by the administratrix of her verified annual account, and, upon submission thereof, set the date for her
examination under oath with respect thereto, with due notice to them and other parties interested in the collation,
preservation and disposition of the estate.

ISSUE: Whether the relief sought by the petitioners can be granted.

RULING: No. There are reliefs available to compel an administrator to return to the court a true inventory and appraisal
of all the real and personal estate of the deceased within three (3) months from appointment and to render an account of
his administration within one (1) year from receipt of the letters testamentary or of administration, but a person whose
claim against the estate is still contingent is not the party entitled to do so. Still, even if the administrator did delay in the
performance of these duties in the context of dissipating the assets of the estate, there are protections enforced and
available under Rule 88 to protect the interests of those with contingent claims against the estate.

Section 3. Allowance to widow and family.


SP11.5 Heirs of Bang v. Sy

SP12.5 Estate of Ruiz v. CA


MP: Grandchildren are not entitled to provisional support from the funds of the decedent’s estate.

FACTS: Hilario Ruiz executed a holographic will where he named the following as his heirs, Edmond Ruiz – only son;
Maria Pilar Ruiz – adopted daughter; Maria Cathryn, Candice Albertine and Maria Angeline - 3 granddaughters, all
daughters of Ruiz. Testator bequeathed to his heirs substantial cash, personal and real properties and named Edmond Ruiz
executor of his estate. Hilario Ruiz died and the cash component of his estate was immediately distributed among Ruiz
and respondents. Edmond, the named executor, did not take any action for the probate of his father's holographic will. 4
years after – Pilar filed before the RTC a petition for the probate and approval of the deceased’s will and for the issuance
of letters testamentary to Edmond Ruiz. Edmond opposed the petition on the ground that the will was executed under
undue influence. The house and lot in Valle Verde, Pasig which the testator bequeathed to the 3 granddaughters was
leased out by Edmond to third persons. Probate court ordered Edmond to deposit with the Branch Clerk of Court the rental
deposit and payments totalling P540,000.00 representing the one-year lease of the Valle Verde property. Edmond moved
for the release of P50,000.00 to pay the real estate taxes on the real properties of the estate. The probate court approved
the release of P7,722.00. Edmond withdrew his opposition to the probate of the will. Probate court admitted the will to
probate and ordered the issuance of letters testamentary to Edmond conditioned upon the filing of a bond in the amount of
P50,000.00. Testate Estate of Hilario Ruiz, with Edmond Ruiz as executor, filed an "Ex-Parte Motion for Release of
Funds: Prayed for release of the rent payments deposited with the Branch Clerk of Court; Montes opposed and praying
that the release of rent payments be given to the 3 granddaughters; Probate court denied the release of funds and granted
the motion of Montes due to Edmond’s lack of opposition. Probate Court ordered the release of the funds to Edmond but
only "such amount as may be necessary to cover the expenses of administration and allowances for support" of the
testator's three granddaughters subject to collation and deductible from their share in the inheritance. CA sustained probate
court’s order.

ISSUE: W/N the probate court, after admitting the will to probate but before payment of the estate's debts and
obligations, has the authority to grant an allowance from the funds of the estate for the support of the testator's
grandchildren.

RULING: NO. grandchildren are not entitled to provisional support from the funds of the decedent's estate.
a. The law clearly limits the allowance to "widow and children" and does not extend it to the deceased's
grandchildren, regardless of their minority or incapacity
b. Section 3 of Rule 83 of the Revised Rules of Court provides:
Sec. 3. Allowance to widow and family. — The widow and minor or incapacitated children of a deceased person, during
the settlement of the estate, shall receive therefrom under the direction of the court, such allowance as are provided by
law.
SP13.5 Santero v. CFI of Cavite
FACTS: Pablo Santero, the only legitimate son of Pascual and Simona Santero, had 3 children with Felixberta Pacursa
namely, Princesita, Federico and Willie (petitioners). Also had 4 children with Anselma Diaz namely, Victor, Rodrigo,
Anselmina, and Miguel (respondents). In 1973, Pablo Santero died. During pendency of the administration proceedings
involving the estate of the late Pablo Santero, petitioners filed a petition for certiorari with the SC questioning CFI
granting allowance (allegedly without hearing) in the amount of 2K, to respondents which includes tuition fees, clothing
materials and subsistence.That respondents were no longer studying, are of age, all except for Miguel are employed.
Respondents filed another motion for allowance with the CFI which included Juanita, Estelita and Pedrito, praying that a
sum of 6K be given to each of the 7 children as their allowance from the estate of their father. This was granted by the
CFI

CFI issued an amended order directing mother of respondents, to submit a clarification or explanation as to the additional
three children included in the said motion. She said in her clarification that in her previous motions, only the last four
minor children were included for support and the three children were then of age should have been included since all her
children have the right to receive allowance as advance payment of their shares in the inheritance of Pablo Santero. The
CFI issued an order directing the administrator to get back the allowance of the three additional children based on the
opposition of the petitioners.

MAINPOINT: Since the provision of the Civil Code, a substantive law, gives the surviving spouse and the children the
right to receive support during the liquidation of the estate of the deceased, such right cannot be impaired by Sec. 3 of
Rule 83 of the Rules of Court which is a procedural rule; "Spouse" interpreted to be the legitimate spouse, not common-
law spouse.

RULE 84
General Powers and Duties of Executors and Administrators

Section 2. Executor or administrator to keep buildings in repair.


SP14.5 Silverior v. CA
MAINPOINT: XXX in Rule 84, Sec. 2 of the Rules of Court, the administrator may only deliver properties of the estate
to the heirs upon order of the Court. Similarly, under Rule 90, Sec. 1 of the Rules of Court, the properties of the estate
shall only be distributed after the payment of the debts, funeral charges, and other expenses against the estate, except
when authorized by the Court.

FACTS: After Beatriz Silverio’s death, her surviving spouse, Ricardo Silverio, Sr., filed an intestate proceeding for the
settlement of her estate, with the RTC Makati, docketed as SP. PROC. NO. M-2629 entitled In Re: Estate of the Late
Beatriz D. Silverio, Ricardo C. Silverio, Sr. v. Ricardo S. Silverio Jr., et al.

When Ricardo Jr. was appointed by the court as the new administrator of the decedent’s properties, he an Urgent Motion
for an Order Prohibiting Any Person to Occupy/Stay/ Use Real Estate Properties Involved in the Intestate Estate of the
Late Beatriz Silverio, Without Authority from this Honorable Court.

RTC issued an Omnibus Order4 affirming its Order dated January 3, 2005 and denying private respondent’s motion for
reconsideration. In the Omnibus Order, the RTC also authorized Ricardo Silverio, Jr. to, upon receipt of the order,
immediately exercise his duties as administrator of the subject estate. The Omnibus Order also directed Nelia S. Silverio-
Dee to vacate the property at No. 3, Intsia, Forbes Park, Makati City within fifteen (15) days from receipt of the order.

Nelia S. Silverio-Dee alleged that she obtained the authority and permission to possess the property from Ricardo Sr.,
when the latter was still the administrator.

ISSUE: WN Nelia Silverio-Dee has real interest over the subject property.

RULING: No. Once an action for the settlement of an estate is filed with the court, the properties included therein are
under the control of the intestate court. And not even the administrator may take possession of any property that is part of
the estate without the prior authority of the Court.

In the instant case, the purported authority of Nelia Silverio-Dee, which she allegedly secured from Ricardo Silverio, Sr.,
was never approved by the probate court. She, therefore, never had any real interest in the specific property located at No.
3 Intsia Road, Forbes Park, Makati City.

Section 3. Executor or administrator to retain whole estate to pay debts, and to administer estate not willed.
SP1.6 Silverio v. CA
SP2.6 Estate of Ruiz v. CA

RULE 85
General Powers and Duties of Executors and Administrators

Section 8. When executor or administrator to render account.


SP3.6 Hilado v. CA
RULE 86
Claims against Estate

SP4.6 Boston Equity Resources v. CA


SP5.6 Metrobank v. Absolute Management Corporation
FACTS: Sherwood Holdings Corporation, Inc. (SHCI) alleged in its complaint that it made advance payments to AMC
for the purchase of 27,000 pieces of plywood and 16,500 plyboards by issuing Metrobank checks. The checks were given
to Chua, AMC’s general manager. Chua died and a special proceeding for the settlement of his estate was commenced.
After Chua’s death, SHCI made demands to AMC for allegedly undelivered items. AMC averred that it had no knowledge
of Chua’s transactions with SHCI and it did not receive any money from the latter. AMC also asked the RTC to hold
Metrobank liable for the subject checks in case it is adjudged liable to SHCI.

Metrobank admitted that it deposited the checks in question to the account of Ayala Lumber and Hardware, a sole
proprietorship Chua owned and managed. The deposit was allegedly done with the knowledge and consent of AMC.
According to Metrobank, Chua then gave the assurance that the arrangement for the handling of the checks carried
AMC’s consent. Metrobank filed a motion for leave to admit fourth-party complaint against Chua’s estate. Metrobank
alleged that Chua’s estate should reimburse Metrobank in case it would be held liable in the third-party complaint filed
against it by AMC. RTC denied Metrobank’s motion which was affirmed by the CA.

ISSUE: Whether Metrobank’s fourth-party complaint against Chua’s estate should be allowed

RULING: No. Metrobank’s claim against a deceased person should be filed under Section 5, Rule 86 of the Rules of
Court and, as such, should have been so filed in Special Proceedings No. 99-0023 where AMC raised its claim against
Chua’s estate. Metrobank’s claim against Chua’s estate is one based on quasi-contract. In its fourth-party complaint,
Metrobank claims that Chua’s estate should reimburse it if it becomes liable on the checks. This fulfills the requisites of
solutio indebiti. A distinctive character of Metrobank’s fourth-party complaint is its contingent nature – the claim depends
on the possibility that Metrobank would be adjudged liable to AMC, a future event that may or may not happen. This
characteristic unmistakably marks the complaint as a contingent one that must be included in the claims falling under the
terms of Section 5, Rule 86 of the Rules of Court:
Sec. 5. Claims which must be filed under the notice. If not filed, barred; exceptions. – All claims for money against the
decedent, arising from contract, express or implied, whether the same be due, not due, or contingent, all claims for funeral
expenses and expenses for the last sickness of the decedent, and judgment for money against the decedent, must be filed
within the time limited in the notice.

SP6.6 Gabriel v. Bilon


SP7.6 Unionbank v. Santibanez

SP8.6 Heirs of Maglasang v. Manila Banking Corporation


MAIN POINT: Sec. 7, Rule 86 of ROC lays down the options for the secured creditor to claim against the estate and,
according to jurisprudence, the availment of the 3rd option BARS HIM FROM CLAIMING ANY DEFICIENCY amount.
After 3rd option is chosen (under Sec. 7, Rule 86), the procedure governing the manner in which the extra-judicial
foreclosure should proceed would still be governed by the provisions of Act No. 3135.

FACTS: Sps. Maglasang obtained a credit line from MBC secured by REM. When Flaviano Maglasang died, his son
Edgar was appointed as atty-in-fact by Flaviano’s heirs. He filed a petition for letters of administration of Flaviano’s
intestate estate w/c the probate court granted. Court issued a Notice to Creditors for filing of money claims against the
estate. MBC notified the court of its claim. When Court terminated the proceedings and executed an extra-judicial
partition over the properties, the loan obligations owed to MBC remained unsatisfied though the court recognized the
rights of MBC to foreclose the mortgage. MBC extrajudicially foreclosed the mortgage; however, after auction sale, a
deficiency remained on Maglasangs’ obligation. Thus, it filed a suit to recover the deficiency. RTC ruled in their favor so
Maglasangs appealed to CA contending that under Remedies available to Manila Banking Corp. under Sec. 7, Rule 86 of
ROC are alternative and exclusive, such that the election of one operates as a waiver of the others and since MBC filed a
claim in the probate court, it has abandoned its right to foreclose the property and is barred from recovering any
deficiency. CA denied the appeal and contended that Act. 3135 applies w/c allows MBC to extrajudicially foreclose and
recover the deficiency.

ISSUE: Whether the remedy sought by the party is proper

RULING: MBC had a right to extrajudicially foreclose the property but it cannot recover the deficiency. Both Sec. 7,
Rule 86 of ROC and Act. 3135 apply complementarily in the case at bar. Foreclosure under the 3rd remedy in Sec. 7, Rule
86 of ROC includes extrajudicial foreclosure under Act. 3135. However, upon choosing said remedy, creditor waives his
right to recover the deficiency. When MBC sought to extra-judicially foreclose the mortgage of the properties previously
belonging to Sps. Maglasang and it therefore, availed of the third option waiving its right to recover the deficiency.

There are 3 remedies/options by secured creditor under Sec. 7, Rule 86: (a) waive the mortgage and claim the entire debt
from the estate of the mortgagor as an ordinary claim; (b) foreclose the mortgage judicially and prove the deficiency as
an ordinary claim; and (c) rely on the mortgage exclusively, or other security and foreclose the same before it is barred
by prescription, without the right to file a claim for any deficiency. These may be ALTERNATIVELY adopted for the
satisfaction of his indebtedness. However, these remedies are distinct, independent and mutually EXCLUSIVE from each
other; the election of one effectively BARS the exercise of the others.

Sec. 7, Rule 86 of ROC lays down the options for the secured creditor to claim against the estate and, according to
jurisprudence, the availment of the 3rd option BARS HIM FROM CLAIMING ANY DEFICIENCY amount. After 3rd
option is chosen (under Sec. 7, Rule 86), the procedure governing the manner in which the extra-judicial foreclosure
should proceed would still be governed by the provisions of Act No. 3135.

SP9.6 PNB v. CA
MAINPOINT: Section 7, Rule 86 grants to the mortgagee three distinct, independent and mutually exclusive remedies
that can be alternatively pursued by the mortgage creditor for the satisfaction of his credit in case the mortgagor dies.
Once the mortgagee has chosen his remedy, this choice now bars any subsequent deficiency claim against the estate of the
deceased.

FACTS: Spouses Antonio and Asuncion Chua were the owners of a parcel of land covered by a TCT and registered in
their names. Upon the death of Antonio, the probate court appointed his son, private respondent Allan Chua as special
administrator of the intestate estate. The court also authorized Allan to obtain a loan accommodation from PNB to be
secured by a real estate mortgage over the above-mentioned parcel of land, which Allan did for P450,000.00 with interest.

For failure to pay the loan in full, the bank extra judicially foreclosed the real estate mortgage. During the auction, PNB
was the highest bidder. However, the loan had a payable balance. To claim this deficiency, PNB instituted an action with
the RTC against Asuncion and Allan. The RTC dismissed PNB’s complaint. The CA affirmed the decision. PNB appealed
contending that under prevailing jurisprudence, when the proceeds from an extrajudicial foreclosure is not enough to pay
off the loan, the mortgagee can file a civil case against the mortgagor to satisfy the deficiency.

ISSUE: Whether PNB may still pursue by civil action the recovery of the balance of indebtedness after having foreclosed
the property securing the same

RULING: No. It follows that Sec. 7 of Rule 86, appropriately applies to the controversy at hand. Case law holds that this
rule grants to the mortgagee three distinct, independent and mutually exclusive remedies that can be alternatively pursued
by the mortgage creditor for the satisfaction of his credit in case the mortgagor dies, among them:

(1) to waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim;

(2) to foreclose the mortgage judicially and prove any deficiency as an ordinary claim; and

(3) to rely on the mortgage exclusively, foreclosing the same at any time before it is barred by prescription without right
to file a claim for any deficiency.

Petitioner herein has chosen the mortgage-creditors option of extrajudicially foreclosing the mortgaged property of the
Chuas. This choice now bars any subsequent deficiency claim against the estate of the deceased, Antonio M. Chua.
Petitioner may no longer avail of the complaint for the recovery of the balance of indebtedness against said estate, after
petitioner foreclosed the property securing the mortgage in its favor. It follows that in this case no further liability remains
on the part of respondents and the late Antonio M. Chuas estate.

RULE 87
Actions by and Against Executors and Administrators

SP10.6 Dr. Cabugao v. People


FACTS: An information was filed alleging that DR. CABUGAO and DR. YNZON, being then the attending physicians
of one RODOLFO PALMA, JR., a minor 10 years old, fail through negligence to perform immediate operation upon their
patient, of acute appendicitis, when they, the said physicians, should have been done so considering that examinations
conducted upon their patient seriously manifest to do so, causing the victim to die to the damage and prejudice of the legal
heirs of said deceased RODOLFO PALMA, JR. and other consequential damages relative thereto.

RTC: The trial court's finding was that in treating JR, appellants have demonstrated indifference and neglect of the
patient's condition as a serious case.

SC: While this case is pending appeal, counsel for petitioner Dr. Ynzon informed the Court that the latter died due to
"multiorgan failure" as evidenced by a copy of death certificate.

ISSUE: Whether or not the death of accused Dr. Clenio Ynzon prior to the disposition of this case, extinguishes his
criminal and civil liability.

RULING: The death of the accused prior to final judgment terminates his criminal liability and only the civil liability
directly arising from and based solely on the offense committed.
Corollarily, the claim for civil liability survives notwithstanding the death of accused, if the same may also be
predicated on a source of obligation other than delict--- a) Law b) Contracts c) Quasi-contracts d) x x x x x x x x x e)
Quasi-delicts
Where the civil liability survives, an action for recovery therefor may be pursued but only by way of filing a
separate civil action. This separate civil action may be enforced either against the executor/admin-istrator or the estate of
the accused, depending on the source of obligation upon which the same is based as explained above.
Finally, the private offended party need not fear a forfeiture of his right to file this separate civil action by
prescription, in cases where during the prosecution of the criminal action and prior to its extinction, the private-offended
party instituted together therewith the civil action.

MAINPOINT: upon the extinction of the criminal liability and the offended party desires to recover damages from the
same act or omission complained of, the party may file a separate civil action based on the other sources of obligation in
accordance with Section 4, Rule 111. If the same act or omission complained of arises from quasi-delict, as in this case, a
separate civil action must be filed against the executor or administrator of the estate of the accused, pursuant to Section 1,
Rule 87 of the Rules of Court:

SP11.6 Atty. Sarsaba v. Vda. De Te

SP12.6 Romero v. CA
MP: It is only the probate court that can liquidate the conjugal partnership and distribute the same to the heirs, after the
debts of the estate have been paid.

FACTS: On 1974, when Judge Romero died his wife, Aurora was appointed as legal guardian. During the pendency of
Settlement Proceedings of the estate of their deceased father, Leo and David Romero filed a Complaint for Annulment of
Sale, Nullification of Title, and Conveyance of Title against their mother Aurora C. Romero and brother Vittorio C.
Romero alleging that their brother Vittorio – through fraud, misrepresentation and duress – succeeded in registering the
several properties in his name through of Deeds of Sale executed by their mother, Aurora. The RTC dismissed the
complaint. Likewise, the RTC denied their MR, citing Section 3, Rule 87 of the Rules of Court which bars an heir or a
devisee from maintaining an action to recover the title or possession of lands until such lands have actually been assigned.
The court ruled that “plaintiffs must first cause the termination of settlement proceedings to its logical conclusion before
their case could be entertained by the Court. Leo and David filed Petition for Certiorari before the CA alleging grave
abuse of discretion in the Resolutions issued by the RTC of Lingayen, Pangasinan. The CA dismissed the petition.
Petitioners assert that the jurisdiction of the RTC sitting as a probate or intestate court relates only to matters having to do
with the settlement of the estate of deceased persons or the appointment of executors, but does not extend to the
determination of questions of ownership that arise during the proceedings. Hence this appeal.

ISSUE: Whether or not a separate civil action for annulment of sale and reconveyance of title, despite the pendency of the
settlement proceedings for the estate of the late Judge Dante Y. Romero may prosper?

RULING: NO. Section 3, Rule 87 bars petitioners from filing the present action.

The said provision states that:

“Sec. 3. Heir may not sue until share assigned. – When an executor or administrator is appointed and assumes the trust, no
action to recover the title or possession of lands or for damages done to such lands shall be maintained against him by an
heir or devisee until there is an order of the court assigning such lands to such heir or devisee or until the time allowed for
paying debts has expired.”

SP13.6 Chua v. Absolute Management Corp.


FACTS: A petition for letters of administration. RTC appointed Betty T. Chua as administratrix of the intestate estate of
her deceased husband. One of the creditors of the deceased, Absolute Management Corporation, filed a claim in the
amount of 63M plus. Chua accepted said amount as correct, with a statement that it shall be reduced or adjusted as
additional evidences may warrant. Respondent noticed that the deceased’s shares of stocks with Ayala Sales and Ayala
Construction were not included in the inventory of assets. Chua alleged that these shares had already been assigned and
transferred to other parties prior to the death of her husband.

Respondent, suspecting that the proof of transfer of the shares were spurious and simulated, filed a motion for the
examination of the supposed transferees.

xxx It premised its motion on Section 6, Rule 87, Revised ROC, infra, which states that when a person is
suspected of having concealed, embezzled, or conveyed away any of the properties of the deceased, a creditor may file
a complaint with the trial court and the trial court may cite the suspected person to appear before it and be examined
under oath on the matter of such complaint. xxx

RTC denied the motion. CA reversed RTC.

ISSUE: WON Section 6, Rule 87 of the Rules of Court, mandatory or merely directory on the trial court

MAINPOINT: Section 6 of Rule 87 seeks to secure evidence from persons suspected of having possession or knowledge
of the properties left by a deceased person, or of having concealed, embezzled or conveyed any of the properties of the
deceased.
The court which acquires jurisdiction over the properties of a deceased person through the filing of the corresponding
proceedings has supervision and control over these properties. The trial court has the inherent duty to see to it that the
inventory of the administrator lists all the properties, rights and credits which the law requires the administrator to include
in his inventory. The court also has the inherent power to determine what properties, rights and credits the administrator
should include or exclude in the inventory. An heir or person interested may call the court’s attention that certain
properties, rights or credits are left out from the inventory. In such a case, it is likewise the court’s duty to hear the
observations of such party. The court has the power to determine if such observations deserve attention and if such
properties belong prima facie to the estate.

SP14.6 Punongbayan v. Punongbayan


MAINPOINT: Rule 87 Section 6. Proceedings when property concealed, embezzled, or fraudulently conveyed. —
If an executor or administrator, heir, legatee, creditor or other individual interested in the estate of the deceased,
complains to the court having jurisdiction of the estate that a person is suspected of having concealed, embezzled, or
conveyed away any of the money, goods, or chattels of the deceased, or that such person has in his possession or has
knowledge of any deed, conveyance, bond, contract, or other writing which contains evidence of or tends or discloses the
right, title, interest, or claim of the deceased, the court may cite such suspected person to appear before it any may
examine him on oath on the matter of such complaint; and if the person so cited refuses to appear, or to answer on such
examination or such interrogatories as are put to him, the court may punish him for contempt, and may commit him to
prison until he submits to the order of the court. The interrogatories put any such person, and his answers thereto, shall be
in writing and shall be filed in the clerk's office.

FACTS: Escolastica Punongbayan-Paguio died intestate leaving behind considerable properties in Misamis Oriental,
Iligan City, and Bulacan.

She was survived by her husband, Miguel Paguio; brothers Nicolas (now deceased) and SOTERO (herein petitioner),
sisters Leonila and Leonora (both now deceased), all surnamed Punongbayan; nephews DANILO (herein respondent),
Restituto, Perfecto, and Alfredo, and nieces Brigida, Lilia, Marilou, Adeluisa, and Grace, who were the children of
Escolastica’s brother, Perfecto Punongbayan, Sr., who predeceased her.

Proceedings for the settlement of her estate were initiated in the then Court of First Instance of Misamis Oriental,
docketed as Special Proceedings No. 1053. Miguel Paguio was appointed administrator and later, DANILO, as co-
administrator to represent the interests of the Punongbayan family.

The intestate court granted the motion in an Order dated February 1, 1995 and directed DANILO to—

1. Effect the immediate distribution of the Estate in accordance with the Compromise Agreement dated September 30,
1974 approved by this Honorable Court in its Order of June 7, 1976;

2. Deposit with the Clerk of Court the proceeds of the sale of whatever properties [were] already sold; and

3. Render an accounting of his administration of the estate for the last twenty (20) years or from the time he assumed as
administrator up to the present, within sixty (60) days from receipt of this Order.

DANILO assailed the said order contending (1) that Sotero Punongbayan and other heirs made unauthorized sales of
estate properties in Bulacan which should first be declared illegal before a distribution of estate properties could be made;
(2) that the proceeds from sales of estate properties were deposited in three banks in the name of the estate and it is better
that they remain there; and (3) that he is still consolidating all income of the estate for purposes of accounting.

Meanwhile, SOTERO moved for his appointment as co-administrator of the estate in June 2000 on the grounds that
DANILO failed to discharge his duties as administrator, to render an accounting of his administration, and to turn over
P25,000,000.00 in proceeds from the sales of a substantial portion of the estate, as required in the Order dated February 1,
1995. The motion was granted and SOTERO took his oath as co-administrator of the estate on August 30, 2000.

On September 1, 2000, DANILO filed a “Motion to Order Sotero Punongbayan to Render an Accounting”12 alleging that
SOTERO appropriated five (5) lots of the estate to the exclusion of the other heirs; that two (2) of the five lots were
illegally sold to third persons while two (2) others were illegally transferred in his own name; and, that the fifth lot was
leased to a third person without turning over lease rentals to the estate. DANILO alleged that he encountered difficulties
in rendering an accounting of estate income and properties because of the illegal sales and lease made by SOTERO.
Hence, DANILO alleged that SOTERO should be made to account first for the income derived from such illegal transfers
and lease before he (DANILO) could render the full accounting required by the intestate court.

ISSUE: WN intestate court correctly denied DANILO’s motion for accounting filed against SOLTERO.

RULING: Yes.

The intestate court correctly denied DANILO’s motion for accounting. It is obvious that the motion was just another ploy
of DANILO to delay his compliance with the court’s Order dated February 1, 1995 directing him to render an accounting
of his administration of the estate and to turn over the certificates of placement of the proceeds from the sales of estate
properties amounting to millions of pesos XXX. The issue of SOLTERO’s alleged illegal transfers are, in fact, pending
before the RTC of Malolos, Bulacan where cases for their annulment have been filed by DANILO. DANILO admits that
they involve the very same properties in respect to which the motion for accounting was filed. Thus, there is no more
reason for DANILO to further delay the accounting of his administration of the estate XXX. Clearly, DANILO was not
entitled to the writ of certiorari erroneously issued by the CA. Certiorari, being an equitable remedy, will not issue where
the petitioner (DANILO) is in bad faith.

Applying Sec. 8, Rule 85, the intestate court denied the motion on the ground that it was premature considering that
petitioner has been co-administrator for only one (1) day at the time it was filed. With the denial, petitioner’s
accountability as co-administrator was in no way settled as it did not preclude or forestall future accountings by him
which, under said Sec. 8, he is obliged to render within one (1) year from receiving letters of administration, or as required
by the court until the estate is settled. Neither an accounting or an examination of petitioner under Section 7, Rule 87,
definitely settle the issue of his alleged illegal transfers and lease since a proceeding under this section, like that under
Sec. 6 of the same Rule, is merely in the nature of fact-finding inquiries. It is intended to elicit information or evidence
relative to estate properties. The Regional Trial Court (RTC) of Cagayan de Oro City which has jurisdiction over the
administration and settlement of the estate has limited jurisdiction and is without authority to resolve issues of ownership
with finality especially when third persons are involved.

CA erred in granting the writ of certiorari. Certiorari under Rule 65 will lie only where a grave abuse of discretion or an
act without or in excess of jurisdiction is clearly shown. The abuse of discretion must be so patent and gross as to amount
to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of
law as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility.

Special Proceedings in RTC CDO City is REINSTATED.

RULE 89
Sales, Mortgages, and other Encumbrances of Property of Decedent

SP1.7 Orola v. The Rural Bank of Pontevedra


Only the executor or administrator of the estate may be authorized by the intestate estate court to mortgage real estate
belonging to the estate; hence, the order of the estate court authorizing the petitioners to mortgage the realty of the
estate to the respondent Rural Bank is a nullity.

FACTS: Josephine Orola and her siblings, Mryna, Angeline, Manuel, Antonio and Althea filed a complaint against the
Rural bank of Pontevedra, their father Emilio Orola (the administrator of his wife’s estate, Trinidad Laserna) and the Ex-
officio Provincial sheriff for the nullification of the promissory notes and real estate mortgages executed by Josephine
Manuel and Antonio Orola, and the sale of the property subject of the said deed at public auction.

They alleged that the real estate mortgage contracts were null and void because the same were never submitted to and
approved by the RTC in a special proceeding. Moreover, they were hoodwinked by their father-administrator Emilio
Orola into signing the contracts of lease and amended contracts of lease, promissory notes and deeds of real estate
mortgages as security for the P600,000 loan on the assurance that they would benefit therefrom but did not receive he
proceeds of the said loan. As such, the extra judicial foreclosure of the real estate mortgages and the sale of the property
covered by the said deeds were null and void.

The RTC of Roxas City gave their favor on the petitioner. But the CA reversed the RTC decision.

ISSUE: Whether the mortgages constituted over the real estate properties of petitioners-appellees are void

RULING: Yes. Any mortgage of the realty of the estate without the appropriate authority of the estate court has no legal
support and is void. The purchaser at public auction acquires no title over the realty. The real estate mortgage contracts, as
well as the extrajudicial foreclosure thereof and the sale of the property described therein at public auction, can thus be
attacked directly and collaterally.

The Court agrees with the petitioners’ contention that respondent Emilio Orola failed to secure an order from the intestate
estate court authorizing him to mortgage the subject lots and execute a REM contract in favor of respondent bank.

What the intestate estate court approved was the authority incorporated in the amended contracts of lease respondent
Orola gave to petitioners Josephine, Manuel and Antonio Orola so that the said lots could be mortgaged to the respondent
Rural Bank as security for the P600,000 loan under their respective names. In fine, intestate estate court authorized the
petitioners, not respondent Orola, to mortgage the said lots to respondent Rural Bank. Lastly, under Section 7 of Rule 89
of the Rules of Court, only the executor or administrator of the estate may be authorized by the intestate estate court to
mortgage real estate belonging to the estate; hence the order of the estate court authorizing the petitioners to mortgage the
realty of the estate to the respondent Rural Bank is a nullity.

SP2.7 Sps. Lebin v. Mirasol


SP3.7 Pahamotang v. PNB
SP4.7 PNB v. CA
SP5.7 Liu v. Loy
FACTS:
1. Teodoro Vao, as attorney-in-fact of Jose Vao, sold seven lots of the Banilad Estate located in Cebu City to Benito
Liu and Cirilo Pangalo. Meanwhile, Jose Vao passed away.
2. Benito Liu subsequently paid installments totaling P2,900, leaving a balance of P1,000.
3. Benito Liu sold to Frank Liu the five lots which Benito Liu purchased from Teodoro Vao. Frank Liu assumed the
balance of P1,000 for the five lots. Cirilo Pangalo likewise sold to Frank Liu the two lots that Pangalo purchased
from Teodoro Vao. Frank Liu likewise assumed the balance of P417 for the two lots.
4. Frank Liu reiterated in a letter his request for Teodoro Vao to execute the deed of sale covering the seven lots so
he could secure the corresponding certificates of title in his name.
5. In the letter, Frank Liu alleged that he sent to Teodoro Vao. According to Frank Liu, he enclosed PBC Check
for P1,417, which is the total balance of the accounts of Benito Liu and Cirilo Pangalo on the seven lots.
6. Teodoro Vao sold Lot No. 6 to respondent Teresita Loy for P3,930 and Lot No. 5 to respondent Alfredo Loy
for P3,910, the Register of Deeds of Cebu City entered said sales.
7. Frank Liu filed before the probate court a claim against the Estate of Jose Vao for Specific Performance,
Execution of Deed of Absolute Sale, and Issuance of Certificate of Title.
8. During the proceedings, Teodoro Vao died. His widow, Milagros Vao, succeeded as administratrix of the Estate
of Jose Vao.
9. The probate court approved the claim of Frank Liu. Milagros Vao executed a deed of conveyance covering the
seven lots in favor of Frank Liu, in compliance with the probate court’s order.
10. The probate court, upon an ex-parte motion filed by Teresita Loy and by Alfredo Loy, Jr., issued an order
approving the sales to them by Teodor Vao of said lots.
11. Milagros Vao, as administratrix of the estate, filed a motion for reconsideration of the Orders of the probate
court which was denied on the ground that the conflicting claims regarding the ownership of Lot Nos. 5 and 6
were already under litigation in a civil case.
12. The RTC rendered judgment against Frank Liu confirming the unilateral extrajudicial rescission of the contract
Exhibit A by the late Teodoro Vao, conditioned upon the refund by the Estate of Jose Vao of one-half (1/2) of
what the plaintiff had paid under that contract.

ISSUE: Whether the probate courts ex-parte approval of the contracts of the Loys was valid

RULING: No. Section 8, Rule 89 of the 1964 Rules of Court specifically requires notice to all interested parties in any
application for court approval to convey property contracted by the decedent in his lifetime. Despite the clear requirement
of Section 8 of Rule 89, the Loys did not notify the administratrix of the motion and hearing to approve the sale of the lots
to them. The administratrix, who had already signed the deed of sale to Frank Liu as directed by the same probate court,
objected to the sale of the same lots to the Loys. The failure to notify the administratrix and other interested persons
rendered the sale to the Loys void. Since the Loys have no contract of sale validly approved by the probate court,
while Frank Liu has a contract of sale approved by the probate court in accordance with Section 8 of Rule 89, Lot
Nos. 5 and 6 belong to Frank Liu. The Estate of Jose Vao should reimburse the Loys their payments on Lot Nos. 5
and 6.

SP6.7 Heirs of Sps. Sandejas v. Lina

RULE 90
DISTRIBUTION AND PARTITION OF ESTATE

SP7.7 Agtarap v. Agtarap


SP8.7 Quasha Ancheta Pena and Nolasco Office v. LCN Construstion Corp.

SP9.7 Estate of Ruiz v. CA


MAINPOINT: In settlement of estate proceedings, the distribution of the estate properties can only be made: (1) after all
the debts, funeral charges, expenses of administration, allowance to the widow, and estate tax have been paid; or (2)
before payment of said obligations only if the distributees or any of them gives a bond in a sum fixed by the court
conditioned upon the payment of said obligations within such time as the court directs, or when provision is made to meet
those obligation.

FACTS: Hilario M. Ruiz executed a holographic will naming as his heirs his only son, Edmond Ruiz, his adopted
daughter Maria Pilar Ruiz Montes, and his three granddaughters. Immediately after Hilario’s death, the cash component of
his estate was distributed among Edmond Ruiz and private respondents in accordance with the decedent's will.

For unknown reasons, Edmond, the named executor, did not take any action for the probate of his father's holographic
will. But four years after the testator's death, private respondent Maria Pilar Ruiz Montes filed a petition for the probate
and approval of Hilario Ruiz's will. The will was admitted to probate. Petitioner Testate Estate of Hilario Cruz and
Edmond then moved for the release of P50,000 to pay the real estate taxes on the real properties of the estate. The Court
denied the release of funds and ordered the delivery of the titles to and possession of the properties bequeathed to the three
granddaughters and respondent Montes after the lapse of six months from the date of first publication of the notice to
creditors.

Petitioner assailed this order before the Court of Appeals. CA dismissed the petition.
ISSUE: Whether the probate court, after admitting the will to probate but before payment of the estate's debts and
obligations, has the authority to order the release of the titles to certain heirs

RULING: No. An order releasing titles to properties of the estate amounts to an advance distribution of the estate which
is allowed only under certain conditions.

In settlement of estate proceedings, the distribution of the estate properties can only be made:

(1) after all the debts, funeral charges, expenses of administration, allowance to the widow, and estate tax have
been paid; or

(2) before payment of said obligations only if the distributees or any of them gives a bond in a sum fixed by the
court conditioned upon the payment of said obligations within such time as the court directs, or when provision is
made to meet those obligations.

In the case at bar, the probate court ordered the release of the real properties to the private respondents after the lapse of
six months from the date of first publication of the notice to creditors. The questioned order speaks of notice to creditors,
not payment of debts and obligations. Hilario Ruiz allegedly left no debts when he died but the taxes on his estate had not
been paid, much less ascertained. The estate tax is one of those obligations that must be paid before distribution of the
estate. If not yet paid, the rule requires that the distributees post a bond or make such provisions as to meet the said tax
obligation in proportion to their respective shares in the inheritance. Notably, at the time the order was issued the
properties of the estate had not yet been inventoried and appraised.

SP10.7 De Leon v. CA
FACTS: petitioner Teresita N. de Leon was appointed administratrix of the estate of Rafael C. Nicolas. Deceased spouses
Rafael and Salud Nicolas were the parents of petitioner Teresita, Estrellita, Antonio (deceased husband of petitioner
Zenaida), Ramon and Roberto.
Private respondent Ramon, an oppositorapplicant in the intestate proceedings, filed a Motion for Collation,
claiming that deceased Rafael, during his lifetime, had given real properties to his children by gratuitous title and that
administratrix-petitioner Teresita failed to include the same in the inventory of the estate of the decedent. Ramon filed an
Amended Motion for Collation specifying the properties to be collated and attaching to said motion
A comparison with the original motion for collation reveals that the amended motion refers to the same real
properties enumerated in the original except for 2 items which are not found in the original motion.

RTC: RTC ordered the Administratrix to include the real properties which were received by the children of Ramon from
the decedent for collation in the instant probate proceedings.
Petitioner Teresita filed an MR alleging that the properties subject of the Order were already titled in their names
years ago and that titles may not be collaterally attacked in a motion for collation. RTC denied said motion, ruling that it
is within the jurisdiction of the court to determine whether titled properties should be collated.

CA: CA ruled that the RTC Order directing the inclusion of the properties therein enumerated in the estate of the deceased
Rafael Nicolas had already become final for failure of petitioners to appeal from the order of collation.

ISSUE: Whether the assailed Order is a final order and therefore appealable and that due to petitioners failure to appeal in
due time, they are now bound by said Order (reliance of the respondents on Sec. 2 of Rule 90 of the ROC).

RULING: No. The order of exclusion (or inclusion) is not a final order; that it is interlocutory in the sense that it did not
settle once and for all the title to the subject lots; that the prevailing rule is that for the purpose of determining whether a
certain property should or should not be included in the inventory, the probate court may pass upon the title thereto but
such determination is not conclusive and is subject to the final decision in a separate action regarding ownership which
may be instituted by the parties.

SP11.7 Reyes-Masugas v. Reyes

RULE 91
ESCHEATS

SP12.7 RCBC v. Hi-Tri Development Corp.


MP: In case the bank complies with the provisions of the law and the unclaimed balances are eventually escheated to the
Republic, the bank shall not thereafter be liable to any person for the same and any action which may be brought by any
person against any bank for unclaimed balances so deposited shall be defended by the Solicitor General without cost to
such bank

FACTS: Luz and Manuel Bakunawa are registered owners of 6 parcels of land. Sometime in 1990,Teresita Millan offered
to buy said lots for P 6, 724,085.71 with a promise that she will take care of clearing whatever preliminary obstacles to
effect completion of sale. Millan failed to comply with the condition. Spouses Bakunawa rescinded the sale and filed a
complaint docketed as Civil Case No. Q-91-10719 against Millan to return the copies of Transfer of Certificate Titles and
ordered to receive the Manager’s check of P 1,019,514.29 for the down payment made by the latter. Upon advice of their
counsel, the spouses retained the custody of the check and are refrained from negotiating and canceling it. Millan was
informed that it was available for her withdrawal.

On January 31, 2003, during pendency of the above mentioned case and without the knowledge of Hi tri, RCBC reported
P 1,019,514.29- credit existing in favor “Rosmil” to Bureau of Treasury as among its unclaimed balances.

On December 14, 2006, OSG filed in the RTC for escheat proceedings. On April 30, 2008,Bakunawa and Millan settled
amicably, the former agreed to pay Rosmil and Millan P 3,000,000.00 inclusive of the P 1,019,514.29. However when
Bakunawa inquired from RCBC the availability of P1,019,514.29 the amount was already subject for escheat proceedings.
On May 19, 2008, the RTC rendered a decision pursuant to PD 679 declaring the amount as subject for escheat
proceedings and ordered the amount to be deposited in favor of the Republic. Consequently, respondents filed an
Omnibus Motion seeking partial reconsideration contending that the said amount was subject to an ongoing dispute and
that they be include as party defendants allowed to intervene. Motion was denied.

The Court of Appeals reversed the decision of RTC and ruled that the bank’s failure to notify respondents deprived them
of an opportunity to intervene in the escheat proceedings and to present evidence to substantiate their claim, in violation
of their right to due process. Furthermore, the CA pronounced that the Makati City RTC Clerk of Court failed to issue
individual notices directed to all persons claiming interest in the unclaimed balances, as well as to require them to appear
after publication and show cause why the unclaimed balances should not be deposited with the Treasurer of the
Philippines. Thus, herein a petition for Review on Certiorari.

ISSUE: Whether or not the allocated funds may be escheated in favor of the Republic?

RULING: YES.In case the bank omplies with the provisions of the law and the unclaimed balances are eventually
escheated to the Republic, the bank “shall not thereafter be liable to any person for the same and any action which may be
brought by any person against in any bank xxx for unclaimed balances so deposited xxx shall be defended by the Solicitor
General without cost to such bank.” Otherwise, should it fail to comply with the legally outlined procedure to the
prejudice of the depositor, the bank may not raise the defense provided under Section 5 of Act No. 3936, as amended.

SP13.7 Republic v. Register of Deeds of Roxas City


FACTS: A Chinese citizen bought Lot No. 398, which passed by succession to his wife and 2 sons. During the son’s
lifetime, the Court refused to nullify the sale on the doctrine of in pari delicto. 40 years after, after the lot has passed by
succession to the sons’ widows, the OSG filed a complaint for reversion of title. SC ruled against the OSG.

ISSUE: Whether reversion proceedings is still viable, considering that the lot has already been transferred to Filipino
citizens.

RULING: No. In this case, the reversion proceedings was initiated only after 40 years. If land is invalidly transferred to
an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in the original transaction is considered
cured and the title of the transferee is rendered valid.

MAINPOINT: Although ownership of the land cannot revert to the original sellers, because of the doctrine of pari
delicto, the Solicitor General may initiate an action for reversion or escheat of the land to the State, subject to other
defenses, as hereafter set forth.

SP14.7 Republic v. CA
MAINPOINT:

1. Escheat is a proceeding, unlike that of succession or assignment, whereby the state, by virtue of its sovereignty, steps in
and claims the real or personal property of a person who dies intestate leaving no heir.

2. A claimant to an escheated property must file his claim within five (5) years from the date of such judgment.

3. A judgment in escheat proceedings when rendered by a court of competent jurisdiction is conclusive against all persons
with actual or constructive notice, but not against those who are not parties or privies thereto.

FACTS:

For more than three (3) decades (from 1952 to 1985) private respondent Amada Solano served as the all-around personal
domestic helper of the late Elizabeth Hankins, a widow and a French national. During Ms. Hankins’ lifetime and most
especially during the waning years of her life, respondent Solano was her faithful girl Friday and a constant companion
since no close relative as available to tend to her needs.

In recognition of Solano’s faithful and dedicated service, Ms. Hankins executed in her favor two (2) deeds of donation
involving two (2) parcels of land covered by TCT Nos. 7807 and 7808 of the Registry of Deeds. Private respondent
alleged that she misplaced the deeds of donation and were nowhere to be found.

While the deeds of donation were missing, the Republic filed a petition for the escheat of the estate of Elizabeth Hankins
before the Regional Trial Court of Pasay City.
During the proceedings, a motion for intervention was filed by Romeo Solano, spouse of private respondent, and one
Gaudencio Regosa, but the motion was denied by the trial court for the reason that “they miserably failed to show valid
claim or right to the properties in question.”

Since it was established that there were no known heirs and persons entitled to the properties of decedent Hankins, the
lower court escheated the estate of the decedent in favor of petitioner Republic of the Philippines.

ISSUE: Does herein private respondent, not being an heir but allegedly a donee, have the personality to be a claimant
within the purview of Sec. 4, Rule 91, of the Revised Rules of Court?

RULING: Yes, in a special proceeding for escheat xxx. Any person alleging to have a direct right or interest in the
property sought to be escheated is likewise an interested party and may appear and oppose the petition for escheat.

HOWEVER:

In the instant petition, the escheat judgment was handed down by the lower court as early as 27 June 1989 but it was only
on 8 January 1997, more or less seven (7) years after, when private respondent decided to contest the escheat judgment in
the guise of a petition for annulment of judgment before the Court of Appeals. Obviously, private respondent’s belated
assertion of her right over the escheated properties militates against recovery.

A judgment in escheat proceedings when rendered by a court of competent jurisdiction is conclusive against all persons
with actual or constructive notice, but not against those who are not parties or privies thereto. Xxx With the lapse of the 5-
year period therefore, private respondent has irretrievably lost her right to claim and the supposed “discovery of the deeds
of donation” is not enough justification to nullify the escheat judgment which has long attained finality.

XXX the subject properties were owned by the decedent during the time that the escheat proceedings were being
conducted and the lower court was not divested of its jurisdiction to escheat them in favor of Pasay City notwithstanding
an allegation that they had been previously donated. We recall that a motion for intervention was earlier denied by the
escheat court for failure to show “valid claim or right to the properties in question.” Where a person comes into an escheat
proceeding as a claimant, the burden is on such intervenor to establish his title to the property and his right to intervene. A
fortiori, the certificates of title covering the subject properties were in the name of the decedent indicating that no transfer
of ownership involving the disputed properties was ever made by the deceased during her lifetime. In the absence
therefore of any clear and convincing proof showing that the subject lands had been conveyed by Hankins to private
respondent Solano, the same still remained, at least before the escheat, part of the estate of the decedent and the lower
court was right not to assume otherwise.

The Court of Appeals therefore cannot perfunctorily presuppose that the subject properties were no longer part of the
decedent’s estate at the time the lower court handed down its decision on the strength of a belated allegation that the same
had previously been disposed of by the owner. It is settled that courts decide only after a close scrutiny of every piece of
evidence and analyze each case with deliberate precision and unadulterated thoroughness, the judgment not being diluted
by speculations, conjectures and unsubstantiated assertions.

RULES 92-97
General Guardians and Guardianship

A.M. No. 03-02-05-SC- Rule on Guardianship on Minors

Meaning of the word “incompetent”


SP1.8 Oropesa v. Oropesa
FACTS: This is a petition for review on certiorari under Rule 45 of the Decision rendered by the CA affirming the Order
of the RTC in a Special Proceedings which dismissed Nilo Oropesa’s, petitioner, petition for guardianship over the
properties of his father, respondent, Cirilo Oropesa.

Petitioner filed with the RTC of Parañaque City, a petition for him and a certain Ms. Louie Ginez to be appointed as
guardians over the property of his father, respondent, Cirilo Oropesa. In said petition, petitioner alleged that respondent
has been afflicted with several maladies and has been sickly for over 10 years already having suffered a stroke that his
judgment and memory were impaired and such has been evident after his hospitalization. That due to his age and medical
condition, he cannot, without outside aid, manage his property wisely, and has become easy prey for deceit and
exploitation by people around him, particularly his girlfriend, Ms. Luisa Agamata.

Respondent filed his Opposition to the petition for guardianship filed by his son. During trial, petitioner presented his
evidence which consists of his, his sister, and respondent’s former nurse’s testimony. After presenting evidence, petitioner
rested his case but failed to file his written formal offer of evidence.

Respondent, thereafter, filed his Omnibus Motion to declare that petitioner has waived the presentation of his Offer of
Exhibits and Evidence since they were not formally offered; to expunge the documents of the petitioner from records; and
to grant leave to the Oppositor to file Demurrer to Evidence. A subsequent Demurrer was filed and was granted.
MR was filed by petitioner and appealed the case to CA; failed, now to the SC.

ISSUE: Whether respondent is considered incompetent as per the Rules who should be placed under guardianship?

RULING: No. A reading of Section 2, Rule 92 of the Rules of Court tells us that persons who, though of sound mind but
by reason of age, disease, weak mind or other similar causes, are incapable of taking care of themselves and their property
without outside aid are considered as incompetents who may properly be placed under guardianship. The full text of the
said provision reads: Sec. 2. Meaning of the word “incompetent.”—Under this rule, the word “incompetent” includes
persons suffering the penalty of civil interdiction or who are hospitalized lepers, prodigals, deaf and dumb who are
unable to read and write, those who are of unsound mind, even though they have lucid intervals, and persons not being
of unsound mind, but by reason of age, disease, weak mind, and other similar causes, cannot, without outside aid, take
care of themselves and manage their property, becoming thereby an easy prey for deceit and exploitation.

Since the only medical document on record is the Report of Neuropsychological Screening. Said report, was ambivalent at
best, although had negative findings regarding memory lapses on the part of respondent, it also contained finding that
supported the view that respondent on the average was indeed competent. The Report concludes that Gen. Oropesa
possesses intact cognitive functioning, except for mildly impaired abilities in memory, reasoning and orientation. It is the
observation of the Court that oppositor is still sharp, alert and able.

Appointment of Guardianship
SP2.8 Alaymari v. Pabale
SP3.8 Cabales v. CA

Selling and Encumbering Property of Ward


SP4.8 De Pua v. San Agustin

General Powers and Duties of Guardianship


SP5.8 Cabales v. CA
FACTS:

1. Rufino Cabales died and left a 5,714-square meter parcel of land located in Sogod, Southern Leyte, to his
surviving wife Saturnina and children Bonifacio, Albino, Francisco, Leonora, Alberto and petitioner Rito.
2. Alberto died, survived by his wife and minor son, Nelson.
3. Saturnina and her four (4) children Bonifacio, Albino, Francisco and Leonora sold the subject parcel of land to
respondents-spouses Jesus and Anunciacion Feliano for P8,000.00. Rito was still a minor when such sale took
place.
4. Saturnina and her four (4) children executed an affidavit to the effect that petitioner Nelson would only receive
the amount of P176.34 from respondents-spouses when he reaches the age of 21.
5. 24-year old petitioner Rito Cabales acknowledged receipt of the sum of P1,143.00 from respondent Jesus Feliano,
representing the formers share in the proceeds of the sale of subject property.
6. Saturnina died.
7. Contending that they could not have sold their respective shares in subject property when they were minors,
petitioners filed before the Regional Trial Court of Maasin, Southern Leyte, a complaint for redemption of the
subject land plus damages.
8. The trial court ruled against petitioners.
9. Court of Appeals modified the decision of the trial court. It held that the sale by Saturnina of petitioner Ritos
undivided share to the property was unenforceable for lack of authority or legal representation but that the
contract was effectively ratified by petitioner Ritos receipt of the proceeds.
10. Hence this this petition for review on certiorari

ISSUE: Whether the sale of Rito’s and Nelson’s share while they were minors rendered the sale of their shares
unenforceable

RULING: Yes. Rule 93, Section 7 of the Revised Rules of Court, automatically designates the parent as legal
guardian of the child without need of any judicial appointment in case the latter’s property does not exceed two
thousand pesos. Saturnina was clearly petitioner Ritos legal guardian without necessity of court appointment considering
that the amount of his property or one-seventh of subject property was P1,143.00, which is less than two thousand pesos.
However, Rule 96, Sec. 1 provides that the legal guardian only has the plenary power of administration of the
minor’s property. It does not include the power of alienation, which needs judicial authority. Thus, when Saturnina,
as legal guardian of petitioner Rito, sold the latters pro-indiviso share in subject land, she did not have the legal authority
to do so.

Accordingly, the contract of sale as to the pro-indiviso share of petitioner Rito was unenforceable. However, when
he acknowledged receipt of the proceeds of the sale, petitioner Rito effectively ratified it.

With respect to petitioner Nelson, on the other hand, the contract of sale was void. He was a minor at the time of the
sale. Saturnina or any and all the other co-owners were not his legal guardians with judicial authority to alienate or
encumber his property. It was his mother who was his legal guardian and, if duly authorized by the courts, could validly
sell his undivided share to the property. She did not. Thus the SC denied the petition but ordered that a new certificate of
title in the name of respondents-spouses Jesus and Anunciacion Feliano for the 6/7 portion, and petitioner Nelson Cabales
and his mother for the remaining 1/7 portion, pro indiviso.

SP6.8 Caniza v. CA

RULE 98
TRUSTEES

SP7.8 Home Guaranty Corp. v. R-II Builders, Inc.

RULE 99-Adoption and Custody of Minors


RULE 100- Rescission and Revocation of Adoption

A.M. No. 02-6-02-SC Rule on Adoption


A.M. No. 03-04-03-SC Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors
R.A. No. 8552 Domestic Adoption Act of 1998
R.A. No. 8043 Inter-Country Adoption Act of 1995
R.A. No. 9523 An Act Requiring Certification of the DSWD to declare a “Child Legally Available for
Adoption”

SP8.8 In Re: Petition for the Adoption of Michelle Lim


SP9.8 Landingin v. Republic
MAINPOINT: The written consent of the biological parents is indispensable for the validity of the decree of adoption.
Indeed, the natural right of a parent to his child requires that his consent must be obtained before his parental rights and
duties may be terminated and re-establish in adoptive parents. In this case, petitioner failed to submit the written consent
of Amelia Ramos to the adoption.

FACTS: Petitioner, a citizen and a resident of Guam, USA but of Filipino parentage, filed a petition for the adoption of
three minors who are the children of her deceased brother. The mother of said children, Amelia Ramos, went to Italy to
work but later on re-married and now has two children by her second marriage. Allegedly, the mother no longer
communicated with her children nor provided them support. The trial court granted her petition for adoption but the Court
of Appeals revoked such grant contending, among others, that the voluntary consent of the natural parent must be
obtained.

ISSUE: Whether the consent of the biological parent is required in a petition for adoption?

RULING: Yes. Section 9(b) of Republic Act No. 8552, otherwise known as the Domestic Adoption Act of 1998 provides
that the written consent of the biological parent(s) of the child, if known, or the legal guardian, or the proper government
instrumentality which has legal custody of the child is necessary to the adoption after being properly counselled and
informed of his/her right to give or withhold his/her approval of the adoption. Indeed, the natural right of a parent to his
child requires that his consent must be obtained before his parental rights and duties may be terminated and re-established
in adoptive parents.

In this case, petitioner failed to submit the written consent of Amelia Ramos to the adoption. It was even shown that the
mother did not relinquish entirely her motherly obligations of rearing the children as she was consulted for serious
personal problems and continued to send financial support to the children though in minimal amounts.

SP10.8 In the Matter of Adoption of Stephanie Astorga, Honorato Catindig


FACTS: Honorato B. Catindig filed a petition to adopt his minor illegitimate child Stephanie Astorga Garcia. Stephanie
had been using her mother’s middle name and surname; and that he is now a widower and qualified to be her adopting
parent. He prayed that Stephanie’s middle name be changed to Garcia, her mother’s surname, and that her surname
“Garcia” be changed to “Catindig” his surname. The RTC granted and ordered pursuant to article 189 of the Family Code,
He then filed a motion for classification and/or reconsideration that she be allowed to use the surname of her natural
mother (Garcia) as her middle name. The lower court denied holding that there is no law allowing an adopted child to use
the surname of his biological mother as his middle name.

ISSUE: Whether or not an illegitimate child may use the surname of her mother as her middle name when she is
subsequently adopted by her natural father.

RULING: One of the effects of adoption is that the adopted is deemed to be a legitimate child of the adapter for all
intents and purposes pursuant to Article 189 of the Family Code and Section 17 of Article V of RA 8557.

Being a legitimate by virtue of her adoption, Stephanie is entitled to all the rights by law to a legitimate child without
discrimination of any kind, including the right to bear the surname of her father and her mother. This is consistent with the
intention of the members of the Civil Code and Family Law Committees.

SP11.8 Cang v. CA
SP12.8 Lahom v. Sibulo
MP: Interestingly, even before the passage of the statute, an action to set aside the adoption is subject to the five-year bar
rule under Rule 100 of the Rules of Court and that the adopter would lose the right to revoke the adoption decree after the
lapse of that period. The exercise of the right within a prescriptive period is a condition that could not fulfill the
requirements of a vested right entitled to protection; Matters relating to adoption, including the withdrawal of the right of
an adopter to nullify the adoption decree, are subject to regulation by the State.

FACTS: A childless couple adopted the wife’s nephew and brought him up as their own. Inn1972 the trial court granted
the petition for adoption and ordered the Civil Registrar to change the name of Jose Melvin Sibulo to Jose Melvin Lahom.
Jose Melvin refused to use the surname Lahom and continued to use Sibulo in all his transactions despite pleas from the
Lahom spouses leading to Mrs Lahom commencing a petition to rescind the decree of adoption. Prior to the institution of
the case, in 1998, RA 8552 (Domestic Adoption Act) went into effect, this law deleted the right of adopters rescind a
decree of adoption; where it was provided that: “Adoption being in the interest of the child, shall not be subject to
rescission by the adopter(s). However the adopter(s) may disinherit the adoptee for causes provided in Article 919 of the
Civil Code. Due to Jose Melvin’s averred callous indifference, ingratitude and lack of care and concern prompted the
couple to file a petition in Court in 1999 to rescind the decree of adoption issued in 1972.

ISSUE: WON the adoption maybe revoked after the effectivity of RA 8552

RULING: NO. Jurisdiction of the court is determined by the statute in force at the time of the commencement of the
action.The controversy should be resolved in light of the law governing at the time the petition was filed.In this case, it
was months after the effectivity of RA 8552 that Lahom filed an action to revoke the decree of adoption in 1972. The new
law has already abrogated and repealed the right of the adopter under the Civil Code and Family Code to rescind the
decree of adoption, thus the rescission of the adoption decree, having been inititated by Lahom in 1999, after the
effectivity of RA 8552 (1998) had come into force, could no longer be pursued.

Prescription- Even before passage of RA 8552, an action to set aside the adoption is subject to the five year bar rule under
Rule 100 of the Rules of Court and the adopter would lose right to revoke the adoption decree after the lapse of that
period.

SP13.8 Bartolome v. SSS


FACTS: John Colcol was employed as electrician by Scanmar Maritime Services, Inc. He was enrolled under the
government’s Employees’ Compensation Program (ECP). He died to an accident while on board the vessel. John was, at
the time of his death, childless and unmarried. Thus, petitioner Bernardina P. Bartolome, John’s biological mother and,
allegedly, sole remaining beneficiary, filed a claim for death benefits. SSS denied the claim on the ground that Bernardina
was no longer considered as the parent of John since the latter was legally adopted by Cornelio Colcol. As such, it is
Cornelio who qualifies as John’s primary beneficiary, not petitioner. According to the records, Cornelio died during
John’s minority.

ISSUES:

1. Is the death of the adopter during the adoptee’s minority results to the restoration of the parental authority to the
biological parents of the latter?

2. Is Bernardina is considered as a legal beneficiary of John?

RULING:

1. Yes. Otherwise, taking into account that adoption is a personal relationship and that there are no collateral relatives by
virtue of adoption, who was then left to care for the minor adopted child if the adopter passed away? The parental
authority of the adoptee’s biological parents shall be restored if the adoptee is still a minor or incapacitated.

2. Yes. The death does not deprive petitioner of the right to receive the benefits stemming from John’s death as a
dependent parent given Cornelio’s untimely demise during John’s minority. Since the parent by adoption already died,
then the death benefits under the Employees’ Compensation Program shall accrue solely to herein petitioner, John’s sole
remaining beneficiary.

SP14.8 Castro v. Gregorio (2014)

MAINPOINT:

1. The law on adoption requires that the adoption by the father of a child born out of wedlock obtain not only the consent
of his wife but also the consent of his legitimate children. Under Article III, Section 7 of Republic Act No. 8552, the
husband must first obtain the consent of his wife if he seeks to adopt his own children born out of wedlock.

2. As a general rule, the husband and wife must file a joint petition for adoption; The law provides for several exceptions
to the general rule, as in a situation where a spouse seeks to adopt his or her own children born out of wedlock. However,
the spouse seeking to adopt must first obtain the consent of his or her spouse.

3. Domestic Adoption Act of 1993 (R.A. No. 8552) fails to provide any provision on the status of adoption decrees if the
adoption is found to have been obtained fraudulently.

4. An action for annulment based on extrinsic fraud must be brought within four (4) years from discovery.
5. When fraud is employed by a party precisely to prevent the participation of any other interested party, then the fraud is
extrinsic, regardless of whether the fraud was committed through the use of forged documents or perjured testimony
during the trial.

FACTS:

Rosario alleged that she and Jose were married on August 5, 1962 in Laoag City. Their marriage had allegedly been
troubled. They had a child, Rose Marie, who was born in 1963, but succumbed to congenital heart disease and only lived
for nine days. Rosario allegedly left Jose after a couple of months because of the incompatibilities between them.

Rosario and Jose, however, briefly reconciled in 1969. Rosario gave birth to Joanne a year later. She and Jose allegedly
lived as husband and wife for about a year even if she lived in Manila and Jose stayed in Laoag City. Jose would visit her
in Manila during weekends. Afterwards, they separated permanently because Rosario alleged that Jose had homosexual
tendencies. She insisted, however, that they “remained friends for fifteen (15) years despite their separation.

Jose filed a petition for adoption before the Regional Trial Court of Batac, Ilocos Norte. In the petition, he alleged that Jed
and Regina were his illegitimate children with Lilibeth Fernandez Gregorio (Lilibeth), whom Rosario alleged was his
erstwhile housekeeper. At the time of the filing of the petition, Jose was 70 years old.

According to the Home Study Report conducted by the Social Welfare Officer of the trial court, Jose belongs to a
prominent and respected family, being one of the three children of former Governor Mauricio Castro. He was also a well-
known lawyer in Manila and Ilocos Norte. The report mentioned that he was once married to Rosario, but the marriage
did not produce any children. It also stated that he met and fell in love with Lilibeth in 1985, and Lilibeth was able to bear
him two children, Jed on August 1987, and Regina on March 1989.

At the time of the report, Jose was said to be living with Jed and Regina temporarily in Batac, Ilocos Norte. The children
have allegedly been in his custody since Lilibeth’s death in July 1995.

On October 16, 2000 the trial court approved of the adoption. A certificate of finality was issued on February 9, 2006.

On July 3, 2006, Rosario, through her lawyer, Atty. Rene V. Saguisag, filed a complaint for disbarment against Jose with
the Integrated Bar of the Philippines. In her complaint, she alleged that Jose had been remiss in providing support for their
daughter, Joanne, for the past 36 years. She alleged that she single-handedly raised and provided financial support to
Joanne while Jose had been showering gifts to his driver and alleged lover, Larry R. Rentegrado (Larry), and even went to
the extent of adopting Larry’s two children, Jed and Regina, without her and Joanne’s knowledge and consent. She also
alleged that Jose made blatant lies to the trial court by alleging that Jed and Regina were his illegitimate children with
Larry’s wife, Lilibeth, to cover up for his homosexual relationship with Larry.

Jose denies being remiss in his fatherly duties to Joanne during her minority. He alleged that he always offered help, but it
was often declined.

On October 8, 2006, Jose died in Laoag City, Ilocos Norte.

On October 18, 2007, Rosario and Joanne filed a petition for annulment of judgment under Rule 47 of the Rules of Civil
Procedure with the Court of Appeals, seeking to annul the October 16, 2000 decision of the trial court approving Jed and
Regina’s adoption.

In their petition, Rosario and Joanne allege that they learned of the adoption sometime in 2005. They allege that Rosario’s
affidavit of consent, marked by the trial court as “Exh. K,” was fraudulent, as well as the NSO birth certificates showed
inconsistencies.

ISSUE: WN the judgment on the adoption rendered by the trial court should be annulled.

RULING: Yes. Petitioners should have been given notice by the trial court of the adoption, as adoption laws require their
consent as a requisite in the proceedings. Under Article III, Section 7 of Republic Act No. 8552, the husband must first
obtain the consent of his wife if he seeks to adopt his own children born out of wedlock.

The grant of adoption over respondents should be annulled as the trial court did not validly acquire jurisdiction over the
proceedings, and the favorable decision was obtained through extrinsic fraud.