Republic of the Philippines
The Bank of the Philippine
SUPREME COURT
Manila
EN BANC
G.R. No. L-15499 February 28, 1962
ANGELA M. BUTTE, plaintiff-appellant,
vs.
MANUEL UY and SONS, INC., defendant-appellee.
Delgado, Flores and Macapagal for plaintiff-appellant.
Pelaez and Jalandoni for defendant-appellee.
REYES, J.B.L., J.:
Appeal from a decision of the Court of First instance of Manila
dismissing the action for legal redemption filed by plaintiff-
appellant.
It appears that Jose V. Ramirez, during his lifetime, was a co-
owner of a house and lot located at Sta. Cruz, Manila, as shown
by Transfer Certificate of Title No. 52789, issued in the name of
the following co-owners: Marie Garnier Vda. de Ramirez, 1/6;
Jose V. Ramirez, 1/6; Jose E. Ramirez, 1/6; Rita de Ramirez, 1/6;
and Jose Ma. Ramirez, 1/6.
On October 20, 1951, Jose V. Ramirez died. Subsequently,
Special Proceeding No. 15026 was instituted to settle his estate,
that included the one-sixth (1/6) undivided share in the
aforementioned property. And although his last will and
testament, wherein he bequeathed his estate to his children and
grandchildren and one-third (1/3) of the free portion to Mrs.
Angela M. Butte, hereinafter referred to as plaintiff-appellant, has
been admitted to probate, the estate proceedings are still pending
up to the present on account of the claims of creditors which
exceed the assets of the deceased.
Islands was appointed judicial administrator.
Meanwhile, on December 9, 1958, Mrs. Marie Garnier Vda. de
Ramirez, one of the co-owners of the late Jose V. Ramirez in the
Sta. Cruz property, sold her undivided 1/6 share to Manuel Uy &
Sons, Inc. defendant-appellant herein, for the sum of
P500,000.00. After the execution by her attorney-in-fact, Mrs.
Elsa R. Chambers, of an affidavit to the effect that formal notices
of the sale had been sent to all possible redemptioners, the deed
of sale was duly registered and Transfer Certificate of Title No.
52789 was cancelled in lieu of which a new one was issued in the
name of the vendee and the other-co-owners.
On the same day (December 9, 1958), Manuel Uy & Sons, Inc.
sent a letter to the Bank of the Philippine Islands as judicial
administrator of the estate of the late Jose V. Ramirez informing it
of the above-mentioned sale. This letter, together with that of the
bank, was forwarded by the latter to Mrs. Butte c/o her counsel
Delgado, Flores & Macapagal, Escolta, Manila, and having
received the same on December 10, 1958, said law office
delivered them to plaintiff-appellant's son, Mr. Miguel Papa, who
in turn personally handed the letters to his mother, Mrs. Butte, on
December 11 and 12, 1958. Aside from this letter of defendant-
appellant, the vendor, thru her attorney-in-fact Mrs. Chambers,
wrote said bank on December 11, 1958 confirming vendee's letter
regarding the sale of her 1/6 share in the Sta. Cruz property for
the sum of P500,000.00. Said letter was received by the bank on
December 15, 1958 and having endorsed it to Mrs. Butte's
counsel, the latter received the same on December 16, 1958.
Appellant received the letter on December 19, 1958.
On January 15, 1959, Mrs. Angela M. Butte, thru Atty.
Resplandor Sobretodo, sent a letter and a Philippine National
Bank cashier's check in the amount of P500,000.00 to Manuel Uy
& Sons, Inc. offering to redeem the 1/6 share sold by Mrs. Marie
Garnier Vda. de Ramirez. This tender having been refused,
plaintiff on the same day consigned the amount in court and filed
the corresponding action for legal redemption. Without prejudice
to the determination by the court of the reasonable and fair
market value of the property sold which she alleged to be grossly
excessive, plaintiff prayed for conveyance of the property, and for
actual, moral and exemplary damages.
After the filing by defendant of its answer containing a
counterclaim, and plaintiff's reply thereto, trial was held, after
which the court rendered decision on May 13, 1959, dismissing
plaintiff's complaint on the grounds that she has no right to
redeem the property and that, if ever she had any, she exercised
the same beyond the statutory 30-day period for legal
redemptions provided by the Civil Code. The counterclaim of
defendant for damages was likewise dismissed for not being
sufficiently established. Both parties appealed directly to this
Court.
Based on the foregoing facts, the main issues posed in this
appeal are: (1) whether or not plaintiff-appellant, having been
bequeathed 1/3 of the free portion of the estate of Jose V.
Ramirez, can exercise the right of legal redemption over the 1/6
share sold by Mrs. Marie Garnier Vda. de Ramirez despite the
presence of the judicial administrator and pending the final
distribution of her share in the testate proceedings; and (2)
whether or not she exercised the right of legal redemption within
the period prescribed by law.
The applicable law involved in the present case is contained in
Articles 1620, p. 1, and 1623 of the Civil Code of the Philippines,
which read as follows:
ART. 1620. A co-owner of a thing may exercise the right
of redemption in case the shares of all the other-co-
owners or of any of them, are sold to a third person. If the
price of the alienation is grossly excessive, the
redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right
of redemption, they may only do so in proportion to the
share they may respectively have in the thing owned in
common. (1522a)
ART. 1623. The right of legal predemption or redemption
shall not be exercised except within thirty days from the
notice in writing by the respective vendor, or by the
vendor, as the case may be. The deed of sale shall not be
accorded in the Registry of Property, unless accompanied
by an affidavit of the vendor that he has given written
notice thereof at all possible redemptioners.
The right of redemption of co-owners excludes that of
adjoining owners. (1524a)
That the appellant Angela M. Butte is entitled to exercise the right
of legal redemption is clear. As testamentary heir of the estate of
J.V. Ramirez, she and her co-heirs acquired an interest in the
undivided one-sixth (1/6) share owned by her predecessor
(causante) in the Santa Cruz property, from the moment of the
death of the aforesaid co-owner, J.V. Ramirez. By law, the rights
to the succession of a deceased persons are transmitted to his
heirs from the moment of his death, and the right of succession
includes all property rights and obligations that survive the
decedent.
ART. 776. The inheritance includes all the property, rights
and obligations of a person which are not extinguished by
his death. (659)
ART. 777. The rights to the succession are transmitted
from the moment of the death of the decedent. (657a)
ART. 947. The legatee or devisee acquires a right to the
pure and simple legacies or devisees from the death of
the testator, and transmits it to his heirs. (881a)
The principle of transmission as of the time of the predecessor's
death is basic in our Civil Code, and is supported by other related
articles. Thus, the capacity of the heir is determined as of the time
the decedent died (Art. 1034); the legitime is to be computed as
of the same moment(Art. 908), and so is the in officiousness of
the donation inter vivos (Art. 771). Similarly, the legacies of credit
and remission are valid only in the amount due and outstanding
at the death of the testator (Art. 935),and the fruits accruing after
that instant are deemed to pertain to the legatee (Art. 948).
As a consequence of this fundamental rule of succession, the
heirs of Jose V. Ramirez acquired his undivided share in the Sta.
Cruz property from the moment of his death, and from that
instant, they became co-owners in the aforesaid property,
together with the original surviving co-owners of their decedent
(causante). A co-owner of an undivided share is necessarily a co-
owner of the whole. Wherefore, any one of the Ramirez heirs, as
such co-owner, became entitled to exercise the right of legal
redemption (retracto de comuneros) as soon as another co-owner
(Maria Garnier Vda. de Ramirez) had sold her undivided share to
a stranger, Manuel Uy & Sons, Inc. This right of redemption
vested exclusively in consideration of the redemptioner's share
which the law nowhere takes into account.
The situation is in no wise altered by the existence of a judicial
administrator of the estate of Jose V. Ramirez while under the
Rules of Court the administrator has the right to the possession of
the real and personal estate of the deceased, so far as needed
for the payment of the decedent's debts and the expenses of
administration (sec. 3, Rule 85), and the administrator may bring
or defend actions for the recovery or protection of the property or
rights of the deceased (sec. 2, Rule 88), such rights of
possession and administration do not include the right of legal
redemption of the undivided share sold to Uy & Company by Mrs.
Garnier Ramirez. The reason is obvious: this right of legal
redemption only came into existence when the sale to Uy & Sons,
Inc. was perfected, eight (8) years after the death of Jose V.
Ramirez, and formed no part of his estate. The redemption right
vested in the heirs originally, in their individual capacity, they did
not derivatively acquire it from their decedent, for when Jose V.
Ramirez died, none of the other co-owners of the Sta. Cruz
property had as yet sold his undivided share to a stranger.
Hence, there was nothing to redeem and no right of redemption;
and if the late Ramirez had no such right at his death, he could
not transmit it to his own heirs. Much less could Ramirez acquire
such right of redemption eight years after his death, when the
sale to Uy & Sons, Inc. was made; because death extinguishes
civil personality, and, therefore, all further juridical capacity to
acquire or transmit rights and obligations of any kind (Civil Code
of the Phil., Art. 42).
It is argued that the actual share of appellant Mrs. Butte in the
estate of Jose V. Ramirez has not been specifically determined
as yet, that it is still contingent; and that the liquidation of estate of
Jose V. Ramirez may require the alienation of the decedent's
undivided portion in the Sta. Cruz property, in which event Mrs.
Butte would have no interest in said undivided portion. Even if it
were true, the fact would remain that so long as that undivided
share remains in the estate, the heirs of Jose V. Ramirez own it,
as the deceased did own it before his demise, so that his heirs
are now as much co-owners of the Sta. Cruz property as Jose V.
Ramirez was himself a co-owner thereof during his lifetime. As
co-owners of the property, the heirs of Jose V. Ramirez, or any
one of them, became personally vested with right of legal
redemption as soon as Mrs. Garnier sold her own pro-indiviso
interest to Uy & Sons. Even if subsequently, the undivided share
of Ramirez (and of his heirs) should eventually be sold to satisfy
the creditors of the estate, it would not destroy their ownership of
it before the sale, but would only convey or transfer it as in turn
sold (of it actually is sold) to pay his creditors. Hence, the right of
any of the Ramirez heirs to redeem the Garnier share will not be
retroactively affected. All that the law requires is that the legal
redemptioner should be a co-owner at the time the undivided
share of another co-owner is sold to a stranger. Whether or not
the redemptioner will continue being a co-owner after exercising
the legal redemptioner is irrelevant for the purposes of law.
Nor it can be argued that if the original share of Ramirez is sold
by the administrator, his heirs would stand in law as never having
acquired that share. This would only be true if the inheritance is
repudiated or the heir's quality as such is voided. But where the
heirship is undisputed, the purchaser of hereditary property is not
deemed to have acquired the title directly from the deceased
Ramirez, because a dead man can not convey title, nor from the
administrator who owns no part of the estate; the purchaser can
only derive his title from the Ramirez heirs, represented by the
administrator, as their trustee or legal representative.
The right of appellant Angela M. Butte to make the redemption
being established, the next point of inquiry is whether she had
made or tendered the redemption price within the 30 days from
notices as prescribed by law. This period, be it noted, is
peremptory, because the policy of the law is not to leave the
purchaser's title in uncertainty beyond the established 30-day
period. In considering whether or not the offer to redeem was
timely, we think that the notice given by the vendee (buyer)
should not be taken into account. The text of Article 1623 clearly
and expressly prescribes that the thirty days for making the
redemption are to be counted from notice in writing by the vendor.
Under the old law (Civ. Code of 1889, Art. 1524), it was
immaterial who gave the notice; so long as the redeeming co-
owner learned of the alienation in favor of the stranger, the
redemption period began to run. It is thus apparent that the
Philippine legislature in Article 1623 deliberately selected a
particular method of giving notice, and that method must be
deemed exclusive (39 Am. Jur., 237; Payne vs. State, 12 S.W.
[2d] 528). As ruled in Wampler vs. Lecompte, 150 Atl. 458 (affd.
in 75 Law Ed. [U.S.] 275) —
Why these provisions were inserted in the statute we are
not informed, but we may assume until the contrary is
shown, that a state of facts in respect thereto existed,
which warranted the legislature in so legislating.
The reasons for requiring that the notice should be given by the
seller, and not by the buyer, are easily divined. The seller of an
undivided interest is in the best position to know who are his co-
owners that under the law must be notified of the sale. Also, the
notice by the seller removes all doubts as to the fact of the sale,
its perfection; and its validity, the notice being a reaffirmation
thereof, so that the party need not entertain doubt that the seller
may still contest the alienation. This assurance would not exist if
the notice should be given by the buyer.
The notice which became operative is that given by Mrs.
Chambers, in her capacity as attorney-in-fact of the vendor Marie
Garnier Vda. de Ramirez. Under date of December 11, 1958, she
wrote the Administrator Bank of the Philippine Islands that her
principal's one-sixth (1/6) share in the Sta. Cruz property had
been sold to Manuel Uy & Sons, Inc. for P500,000.00. The Bank
received this notice on December 15, 1958, and on the same day
endorsed it to Mrs. Butte, care of Delgado, Flores and Macapagal
(her attorneys), who received the same on December 16, 1958.
Mrs. Butte tendered redemption and upon the vendee's refusal,
judicially consigned the price of P500,000.00 on January 15,
1959. The latter date was the last one of the thirty days allowed
by the Code for the redemption, counted by excluding December
16, 1958 and including January 15, 1959, pursuant to Article 13
of the Civil Code. Therefore, the redemption was made in due
time.
The date of receipt of the vendor's notice by the Administrator
Bank (December 15) can not be counted as determining the start
of thirty days; for the Administrator of the estate was not a proper
redemptioner, since, as previously shown, the right to redeem the
share of Marie Garnier did not form part of the estate of Jose V.
Ramirez.
We find no jurisdiction for appellant's claim that the P500,000,00.
paid by Uy & Sons, Inc. for the Garnier share is grossly
excessive. Gross excess cannot be predicated on mere individual
estimates of market price by a single realtor.
The redemption and consignation having been properly made,
the Uy counterclaim for damages and attorney's fees predicated
on the assumption that plaintiff's action was clearly unfounded,
becomes untenable.

PREMISES CONSIDERED, the judgment appealed from is

hereby reversed and set aside, and another one entered:

(a) Declaring the consignation of P500,000,00 made by

appellant Angela M. Butte duly and properly made;

(b) Declaring that said appellant properly exercised in due

time the legal redemption of the one-sixth (1/6) undivided
portion of the land covered by Certificate of Title No.
59363 of the Office of the Register of Deeds of the City of
Manila, sold on December 9, 1958 by Marie Garnier Vda.
de Ramirez to appellant Manuel Uy & Sons, Inc.

(c) Ordering appellant Manuel Uy & Sons, Inc. to accept

the consigned price and to convey to Angela M. Butte the
undivided portion above referred to, within 30 days from
the time our decision becomes final, and subsequently to
account for the rentals and fruits of the redeemed share
from and after January 15, 1958, until its conveyance;
and.

(d) Ordering the return of the records to the court of origin

for further proceedings conformable to this opinion.

Without finding as to costs.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion,

Barrera and Dizon, JJ., concur.
Paredes and De Leon, JJ., took no part.
G.R. No. 162784 June 22, 2007
NATIONAL HOUSING AUTHORITY, petitioner,
vs.
SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN
PEDRO, LAGUNA, BR. 31, respondents.
DECISION
PUNO, C.J.:
This is a Petition for Review on Certiorari under Rule 45 filed by
the National Housing Authority (NHA) against the Court of
Appeals, the Regional Trial Court of San Pedro Laguna, Branch
31, and private respondent Segunda Almeida.
On June 28, 1959, the Land Tenure Administration (LTA)
awarded to Margarita Herrera several portions of land which are
part of the Tunasan Estate in San Pedro, Laguna. The award is
evidenced by an Agreement to Sell No. 3787.1 By virtue of
Republic Act No. 3488, the LTA was succeeded by the
Department of Agrarian Reform (DAR). On July 31, 1975, the
DAR was succeeded by the NHA by virtue of Presidential Decree
No. 757.2 NHA as the successor agency of LTA is the petitioner in
this case.
The records show that Margarita Herrera had two children:
Beatriz Herrera-Mercado (the mother of private respondent) and
Francisca Herrera. Beatriz Herrera-Mercado predeceased her
mother and left heirs.
Margarita Herrera passed away on October 27, 1971.3
On August 22, 1974, Francisca Herrera, the remaining child of
the late Margarita Herrera executed a Deed of Self-Adjudication
claiming that she is the only remaining relative, being the sole
surviving daughter of the deceased. She also claimed to be the
exclusive legal heir of the late Margarita Herrera.
The Deed of Self-Adjudication was based on a Sinumpaang
Salaysay dated October 7, 1960, allegedly executed by Margarita
Herrera. The pertinent portions of which are as follows:
SINUMPAANG SALAYSAY
SA SINO MAN KINAUUKULAN;
Akong si MARGARITA HERRERA, Filipina, may 83 taong
gulang, balo, kasalukuyang naninirahan at tumatanggap
ng sulat sa Nayon ng San Vicente, San Pedro Laguna, sa
ilalim ng panunumpa ay malaya at kusang loob kong
isinasaysay at pinagtitibay itong mga sumusunod:
1. Na ako ay may tinatangkilik na isang lagay na lupang
tirikan (SOLAR), tumatayo sa Nayon ng San Vicente, San
Pedro, Laguna, mayroong PITONG DAAN AT
PITUMPU'T ISANG (771) METRONG PARISUKAT ang
laki, humigit kumulang, at makikilala sa tawag na Lote 17,
Bloke 55, at pag-aari ng Land Tenure Administration;
2. Na ang nasabing lote ay aking binibile, sa
pamamagitan ng paghuhulog sa Land Tenure
Administration, at noong ika 30 ng Julio, 1959, ang
Kasunduang sa Pagbibile (AGREEMENT TO SELL No.
3787) ay ginawa at pinagtibay sa Lungsod ng Maynila, sa
harap ng Notario Publico na si G. Jose C. Tolosa, at
lumalabas sa kaniyang Libro Notarial bilang Documento
No. 13, Pagina No. 4; Libro No. IV, Serie ng 1959;
3. Na dahilan sa ako'y matanda na at walang ano mang
hanap buhay, ako ay nakatira at pinagsisilbihan nang
aking anak na si Francisca Herrera, at ang tinitirikan o
 solar na nasasabi sa unahan ay binabayaran ng kaniyang
sariling cuarta sa Land Tenure Administration;
4. Na alang-alang sa nasasaysay sa unahan nito,
sakaling ako'y bawian na ng Dios ng aking buhay, ang
lupang nasasabi sa unahan ay aking ipinagkakaloob sa
nasabi kong anak na FRANCISCA HERRERA, Filipina,
nasa katamtamang gulang, kasal kay Macario Berroya,
kasalukuyang naninirahan at tumatanggap ng sulat sa
Nayong ng San Vicente, San Pedro Laguna, o sa
kaniyang mga tagapagmana at;
5. Na HINIHILING KO sa sino man kinauukulan, na
sakaling ako nga ay bawian na ng Dios ng aking buhay ay
KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman sa
pangalan ng aking anak na si Francisca Herrera ang
loteng nasasabi sa unahan.
SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng
hinlalaki ng kanan kong kamay sa ibaba nito at sa
kaliwang gilid ng unang dahon, dito sa Lungsod ng
Maynila, ngayong ika 7 ng Octubre, 1960.4
The said document was signed by two witnesses and notarized.
The witnesses signed at the left-hand side of both pages of the
document with the said document having 2 pages in total.
Margarita Herrera placed her thumbmark5above her name in the
second page and at the left-hand margin of the first page of the
document.
The surviving heirs of Beatriz Herrera-Mercado filed a case for
annulment of the Deed of Self-Adjudication before the then Court
of First Instance of Laguna, Branch 1 in Binan, Laguna (now,
Regional Trial Court Branch 25). The case for annulment was
docketed as Civil Case No. B-1263.6
On December 29, 1980, a Decision in Civil Case No. B-1263
(questioning the Deed of Self-Adjudication) was rendered and the
deed was declared null and void.7
During trial on the merits of the case assailing the Deed of Self-
Adjudication, Francisca Herrera filed an application with the NHA
to purchase the same lots submitting therewith a copy of the
"Sinumpaang Salaysay" executed by her mother. Private
respondent Almeida, as heir of Beatriz Herrera-Mercado,
protested the application.
In a Resolution8 dated February 5, 1986, the NHA granted the
application made by Francisca Herrera, holding that:
From the evidence of the parties and the records of the
lots in question, we gathered the following facts: the lots
in question are portions of the lot awarded and sold to the
late Margarita Herrera on July 28, 1959 by the defunct
Land Tenure Administration; protestant is the daughter of
the late Beatriz Herrera Mercado who was the sister of
the protestee; protestee and Beatriz are children of the
late Margarita Herrera; Beatriz was the transferee from
Margarita of Lot Nos. 45, 46, 47, 48 and 49, Block 50; one
of the lots transferred to Beatriz, e.g. Lot 47, with an area
of 148 square meters is in the name of the protestant;
protestant occupied the lots in question with the
permission of the protestee; protestee is a resident of the
Tunasan Homesite since birth; protestee was born on the
lots in question; protestee left the place only after
marriage but resided in a lot situated in the same
Tunasan Homesite; her (protestee) son Roberto Herrera
has been occupying the lots in question; he has been
there even before the death of the late Margarita
Herrera; on October 7, 1960, Margarita Herrera
executed a "Sinumpaang Salaysay" whereby she
waived or transferred all her rights and interest over
the lots in question in favor of the protestee; and
 protestee had paid the lots in question in full on March 8,
1966 with the defunct Land Tenure Administration.
This Office finds that protestee has a better preferential right to
purchase the lots in question.9
Private respondent Almeida appealed to the Office of the
President.10 The NHA Resolution was affirmed by the Office of the
President in a Decision dated January 23, 1987.11
On February 1, 1987, Francisca Herrera died. Her heirs executed
an extrajudicial settlement of her estate which they submitted to
the NHA. Said transfer of rights was approved by the NHA.12 The
NHA executed several deeds of sale in favor of the heirs of
Francisca Herrera and titles were issued in their
favor.13 Thereafter, the heirs of Francisca Herrera directed
Segunda Mercado-Almeida to leave the premises that she was
occupying.
Feeling aggrieved by the decision of the Office of the President
and the resolution of the NHA, private respondent Segunda
Mercado-Almeida sought the cancellation of the titles issued in
favor of the heirs of Francisca. She filed a Complaint on February
8, 1988, for "Nullification of Government Lot's Award," with the
Regional Trial Court of San Pedro, Laguna, Branch 31.
In her complaint, private respondent Almeida invoked her forty-
year occupation of the disputed properties, and re-raised the fact
that Francisca Herrera's declaration of self-adjudication has been
adjudged as a nullity because the other heirs were disregarded.
The defendant heirs of Francisca Herrera alleged that the
complaint was barred by laches and that the decision of the
Office of the President was already final and executory.14 They
also contended that the transfer of purchase of the subject lots is
perfectly valid as the same was supported by a consideration and
that Francisca Herrera paid for the property with the use of her
own money.15 Further, they argued that plaintiff's occupation of
the property was by mere tolerance and that they had been
paying taxes thereon.16
The Regional Trial Court issued an Order dated June 14, 1988
dismissing the case for lack of jurisdiction.17 The Court of Appeals
in a Decision dated June 26, 1989 reversed and held that the
Regional Trial Court had jurisdiction to hear and decide the case
involving "title and possession to real property within its
jurisdiction."18 The case was then remanded for further
proceedings on the merits.
A pre-trial was set after which trial ensued.
On March 9, 1998, the Regional Trial Court rendered a Decision
setting aside the resolution of the NHA and the decision of the
Office of the President awarding the subject lots in favor of
Francisca Herrera. It declared the deeds of sale executed by
NHA in favor of Herrera's heirs null and void. The Register of
Deeds of Laguna, Calamba Branch was ordered to cancel the
Transfer Certificate of Title issued. Attorney's fees were also
awarded to private respondent.
The Regional Trial Court ruled that the "Sinumpaang Salaysay"
was not an assignment of rights but a disposition of property
which shall take effect upon death. It then held that the said
document must first be submitted to probate before it can transfer
property.
Both the NHA and the heirs of Francisca Herrera filed their
respective motions for reconsideration which were both denied on
July 21, 1998 for lack of merit. They both appealed to the Court of
Appeals. The brief for the heirs of Francisca Herrera was denied
admission by the appellate court in a Resolution dated June 14,
2002 for being a "carbon copy" of the brief submitted by the NHA
and for being filed seventy-nine (79) days late.
On August 28, 2003, the Court of Appeals affirmed the decision
of the Regional Trial Court, viz:
There is no dispute that the right to repurchase the
subject lots was awarded to Margarita Herrera in 1959.
There is also no dispute that Margarita executed a
"Sinumpaang Salaysay" on October 7, 1960. Defendant
NHA claims that the "Sinumpaang Salaysay" is, in effect,
a waiver or transfer of rights and interest over the subject
lots in favor of Francisca Herrera. This Court is disposed
to believe otherwise. After a perusal of the "Sinumpaang
Salaysay" of Margarita Herrera, it can be ascertained
from its wordings taken in their ordinary and grammatical
sense that the document is a simple disposition of her
estate to take effect after her death. Clearly the Court
finds that the "Sinumpaang Salaysay" is a will of
Margarita Herrera. Evidently, if the intention of Margarita
Herrera was to merely assign her right over the lots to her
daughter Francisca Herrera, she should have given her
"Sinumpaang Salaysay" to the defendant NHA or to
Francisca Herrera for submission to the defendant NHA
after the full payment of the purchase price of the lots or
even prior thereto but she did not. Hence it is apparent
that she intended the "Sinumpaang Salaysay" to be her
last will and not an assignment of rights as what the NHA
in its resolution would want to make it appear. The
intention of Margarita Herrera was shared no less by
Francisca Herrera who after the former's demise
executed on August 22, 1974 a Deed of Self-Adjudication
claiming that she is her sole and legal heir. It was only
when said deed was questioned in court by the surviving
heirs of Margarita Herrera's other daughter, Beatriz
Mercado, that Francisca Herrera filed an application to
purchase the subject lots and presented the "Sinumpaang
Salaysay" stating that it is a deed of assignment of
rights.19
The Court of Appeals ruled that the NHA acted arbitrarily in
awarding the lots to the heirs of Francisca Herrera. It upheld the
trial court ruling that the "Sinumpaang Salaysay" was not an
assignment of rights but one that involved disposition of property
which shall take effect upon death. The issue of whether it was a
valid will must first be determined by probate.
Petitioner NHA elevated the case to this Court.
Petitioner NHA raised the following issues:
A. WHETHER OR NOT THE RESOLUTION OF THE
NHA AND THE DECISION OF THE OFFICE OF THE
PRESIDENT HAVE ATTAINED FINALITY, AND IF SO,
WHETHER OR NOT THE PRINCIPLE OF
ADMINISTRATIVE RES JUDICATA BARS THE COURT
FROM FURTHER DETERMINING WHO BETWEEN THE
PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD
OVER THE SUBJECT LOTS;
B. WHETHER OR NOT THE COURT HAS
JURISDICTION TO MAKE THE AWARD ON THE
SUBJECT LOTS; AND
C. WHETHER OR NOT THE AWARD OF THE SUBJECT
LOTS BY THE NHA IS ARBITRARY.
We rule for the respondents.
Res judicata is a concept applied in review of lower court
decisions in accordance with the hierarchy of courts. But
jurisprudence has also recognized the rule of administrative res
judicata: "the rule which forbids the reopening of a matter once
judicially determined by competent authority applies as well to the
judicial and quasi-judicial facts of public, executive or
administrative officers and boards acting within their jurisdiction
as to the judgments of courts having general judicial powers . . . It
has been declared that whenever final adjudication of persons
invested with power to decide on the property and rights of the
citizen is examinable by the Supreme Court, upon a writ of error
or a certiorari, such final adjudication may be pleaded as res
judicata."20 To be sure, early jurisprudence were already mindful
that the doctrine of res judicata cannot be said to apply
exclusively to decisions rendered by what are usually understood
as courts without unreasonably circumscribing the scope thereof
and that the more equitable attitude is to allow extension of the
defense to decisions of bodies upon whom judicial powers have
been conferred.
In Ipekdjian Merchandising Co., Inc. v. Court of Tax
Appeals,21 the Court held that the rule prescribing that
"administrative orders cannot be enforced in the courts in the
absence of an express statutory provision for that purpose" was
relaxed in favor of quasi-judicial agencies.
In fine, it should be remembered that quasi-judicial powers will
always be subject to true judicial power—that which is held by the
courts. Quasi-judicial power is defined as that power of
adjudication of an administrative agency for the "formulation of a
final order."22 This function applies to the actions, discretion and
similar acts of public administrative officers or bodies who are
required to investigate facts, or ascertain the existence of facts,
hold hearings, and draw conclusions from them, as a basis for
their official action and to exercise discretion of a judicial
nature.23 However, administrative agencies are not considered
courts, in their strict sense. The doctrine of separation of powers
reposes the three great powers into its three (3) branches—the
legislative, the executive, and the judiciary. Each department is
co-equal and coordinate, and supreme in its own sphere.
Accordingly, the executive department may not, by its own fiat,
impose the judgment of one of its agencies, upon the judiciary.
Indeed, under the expanded jurisdiction of the Supreme Court, it
is empowered to "determine whether or not there has been grave
abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the
Government."24 Courts have an expanded role under the 1987
Constitution in the resolution of societal conflicts under the grave
abuse clause of Article VIII which includes that duty to check
whether the other branches of government committed an act that
falls under the category of grave abuse of discretion amounting to
lack or excess of jurisdiction.25
Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary
Reorganization Act of 198026 where it is therein provided that the
Intermediate Appellate Court (now, Court of Appeals) shall
exercise the "exclusive appellate jurisdiction over all final
judgments, decisions, resolutions, orders or awards, of the
Regional Trial Courts and Quasi-Judicial agencies,
instrumentalities, boards or commissions, except those falling
within the jurisdiction of the Supreme Court in accordance with
the Constitution…"27 and contends that the Regional Trial Court
has no jurisdiction to rule over awards made by the NHA.
Well-within its jurisdiction, the Court of Appeals, in its decision of
August 28, 2003, already ruled that the issue of the trial court's
authority to hear and decide the instant case has already been
settled in the decision of the Court of Appeals dated June 26,
1989 (which has become final and executory on August 20, 1989
as per entry of judgment dated October 10, 1989).28 We find no
reason to disturb this ruling. Courts are duty-bound to put an end
to controversies. The system of judicial review should not be
misused and abused to evade the operation of a final and
executory judgment.29 The appellate court's decision becomes the
law of the case which must be adhered to by the parties by
reason of policy.30
Next, petitioner NHA contends that its resolution was grounded
on meritorious grounds when it considered the application for the
purchase of lots. Petitioner argues that it was the daughter
Francisca Herrera who filed her application on the subject lot; that
it considered the respective application and inquired whether she
had all the qualifications and none of the disqualifications of a
possible awardee. It is the position of the petitioner that private
respondent possessed all the qualifications and none of the
disqualifications for lot award and hence the award was not done
arbitrarily.
The petitioner further argues that assuming that the "Sinumpaang
Salaysay" was a will, it could not bind the NHA.31That, "insofar as
[the] NHA is concerned, it is an evidence that the subject lots
were indeed transferred by Margarita Herrera, the original
awardee, to Francisca Herrera was then applying to purchase the
same before it."32
We are not impressed. When the petitioner received the
"Sinumpaang Salaysay," it should have noted that the effectivity
of the said document commences at the time of death of the
author of the instrument; in her words "sakaling ako'y bawian na
ng Dios ng aking buhay…" Hence, in such period, all the interests
of the person should cease to be hers and shall be in the
possession of her estate until they are transferred to her heirs by
virtue of Article 774 of the Civil Code which provides that:
Art. 774. Succession is a mode of acquisition by virtue of
which the property, rights and obligations to the extent
of the value of the inheritance, of a person are
transmitted through his death to another or others
either by his will or by operation of law.33
By considering the document, petitioner NHA should have noted
that the original applicant has already passed away. Margarita
Herrera passed away on October 27, 1971.34 The NHA issued its
resolution35 on February 5, 1986. The NHA gave due course to
the application made by Francisca Herrera without considering
that the initial applicant's death would transfer all her property,
rights and obligations to the estate including whatever interest
she has or may have had over the disputed properties. To the
extent of the interest that the original owner had over the
property, the same should go to her estate. Margarita Herrera
had an interest in the property and that interest should go to her
estate upon her demise so as to be able to properly distribute
them later to her heirs—in accordance with a will or by operation
of law.
The death of Margarita Herrera does not extinguish her interest
over the property. Margarita Herrera had an existing Contract to
Sell36 with NHA as the seller. Upon Margarita Herrera's demise,
this Contract to Sell was neither nullified nor revoked. This
Contract to Sell was an obligation on both parties—Margarita
Herrera and NHA. Obligations are transmissible.37 Margarita
Herrera's obligation to pay became transmissible at the time of
her death either by will or by operation of law.
If we sustain the position of the NHA that this document is not a
will, then the interests of the decedent should transfer by virtue of
an operation of law and not by virtue of a resolution by the NHA.
For as it stands, NHA cannot make another contract to sell to
other parties of a property already initially paid for by the
decedent. Such would be an act contrary to the law on
succession and the law on sales and obligations.38
When the original buyer died, the NHA should have considered
the estate of the decedent as the next "person"39likely to stand in
to fulfill the obligation to pay the rest of the purchase price. The
opposition of other heirs to the repurchase by Francisca Herrera
should have put the NHA on guard as to the award of the lots.
Further, the Decision in the said Civil Case No. B-1263
(questioning the Deed of Self-Adjudication) which rendered the
deed therein null and void40 should have alerted the NHA that
there are other heirs to the interests and properties of the
decedent who may claim the property after a testate or intestate
proceeding is concluded. The NHA therefore acted arbitrarily in
the award of the lots.
We need not delve into the validity of the will. The issue is for the
probate court to determine. We affirm the Court of Appeals and
the Regional Trial Court which noted that it has an element of
testamentary disposition where (1) it devolved and transferred
property; (2) the effect of which shall transpire upon the death of
the instrument maker.41

IN VIEW WHEREOF, the petition of the National Housing
Authority is DENIED. The decision of the Court of Appeals in CA-
G.R. No. 68370 dated August 28, 2003, affirming the decision of
the Regional Trial Court of San Pedro, Laguna in Civil Case No.
B-2780 dated March 9, 1998, is hereby AFFIRMED.

No cost.

SO ORDERED.






















 [G.R. No. L-8437. November 28, 1956.] on behalf of the undersigned or any of them; and to pay, reimburse
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and make good to the COMPANY, its successors and assigns, all sums
ESTATE OF K. H. HEMADY, deceased, vs. LUZON SURETY CO., INC.,
and amount of money which it or its representatives shall pay or
claimant-Appellant.
cause to be paid, or become liable to pay, on account of the
undersigned or any of them, of whatsoever kind and nature, including
D E C I S I O N 15% of the amount involved in the litigation or other matters growing
out of or connected therewith for counsel or attorney’s fees, but in
REYES, J. B. L., J.: no case less than P25. It is hereby further agreed that in case of
Appeal by Luzon Surety Co., Inc., from an order of the Court of First extension or renewal of this ________ we equally bind ourselves for
Instance of Rizal, presided by Judge Hermogenes Caluag, dismissing the payment thereof under the same terms and conditions as above
its claim against the Estate of K. H. Hemady (Special Proceeding No. mentioned without the necessity of executing another indemnity
Q-293) for failure to state a cause of action. agreement for the purpose and that we hereby equally waive our
right to be notified of any renewal or extension of this ________
The Luzon Surety Co. had filed a claim against the Estate based on which may be granted under this indemnity agreement.
twenty different indemnity agreements, or counter bonds, each
subscribed by a distinct principal and by the deceased K. H. Hemady, Interest on amount paid by the Company. — Any and all sums of
a surety solidary guarantor) in all of them, in consideration of the money so paid by the company shall bear interest at the rate of
Luzon Surety Co.’s of having guaranteed, the various principals in 12% per annum which interest, if not paid, will be accummulated and
favor of different creditors. The twenty counterbonds, or indemnity added to the capital quarterly order to earn the same interests as the
agreements, all contained the following stipulations: chanroblesvirtuallawlibrary
capital and the total sum thereof, the capital and interest, shall be
paid to the COMPANY as soon as the COMPANY shall have become
“Premiums. — As consideration for this suretyship, the undersigned liable therefore, whether it shall have paid out such sums of money
jointly and severally, agree to pay the COMPANY the sum of or any part thereof or not.
________________ (P______) pesos, Philippines Currency, in
advance as premium there of for every __________ months or x x x x x x x x x
fractions thereof, this ________ or any renewal or substitution Waiver. — It is hereby agreed upon by and between the undersigned
thereof is in effect. that any question which may arise between them by reason of this
Indemnity. — The undersigned, jointly and severally, agree at all document and which has to be submitted for decision to Courts of
times to indemnify the COMPANY and keep it indemnified and hold Justice shall be brought before the Court of competent jurisdiction in
and save it harmless from and against any and all damages, losses, the City of Manila, waiving for this purpose any other venue. Our right
costs, stamps, taxes, penalties, charges, and expenses of whatsoever to be notified of the acceptance and approval of this indemnity
kind and nature which the COMPANY shall or may, at any time sustain agreement is hereby likewise waived.
or incur in consequence of having become surety upon this bond or x x x x x x x x x
any extension, renewal, substitution or alteration thereof made at
the instance of the undersigned or any of them or any order executed
Our Liability Hereunder. — It shall not be necessary for the COMPANY occur after Hemady’s death, are not chargeable to his estate because
to bring suit against the principal upon his default, or to exhaust the upon his death he ceased to be a guarantor.
property of the principal, but the liability hereunder of the
Another clear and strong indication that the surety company has
undersigned indemnitor shall be jointly and severally, a primary one,
exclusively relied on the personality, character, honesty and integrity
the same as that of the principal, and shall be exigible immediately
of the now deceased K. H. Hemady, was the fact that in the printed
upon the occurrence of such default.” (Rec. App. pp. 98- 102.)
form of the indemnity agreement there is a paragraph entitled
The Luzon Surety Co., prayed for allowance, as a contingent claim, of ‘Security by way of first mortgage, which was expressly waived and
the value of the twenty bonds it had executed in consideration of the renounced by the security company. The security company has not
counterbonds, and further asked for judgment for the unpaid demanded from K. H. Hemady to comply with this requirement of
premiums and documentary stamps affixed to the bonds, with 12 per giving security by way of first mortgage. In the supporting papers of
cent interest thereon. the claim presented by Luzon Surety Company, no real property was
mentioned in the list of properties mortgaged which appears at the
Before answer was filed, and upon motion of the administratrix of
back of the indemnity agreement.” (Rec. App., pp. 407-408).
Hemady’s estate, the lower court, by order of September 23, 1953,
dismissed the claims of Luzon Surety Co., on two grounds: (1) that chanroblesvirtuallawlibrary We find this reasoning untenable. Under the present Civil Code
the premiums due and cost of documentary stamps were not (Article 1311), as well as under the Civil Code of 1889 (Article 1257),
contemplated under the indemnity agreements to be a part of the the rule is that —
undertaking of the guarantor (Hemady), since they were not liabilities
“Contracts take effect only as between the parties, their assigns and
incurred after the execution of the counterbonds; and (2) that
heirs, except in the case where the rights and obligations arising from
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“whatever losses may occur after Hemady’s death, are not

the contract are not transmissible by their nature, or by stipulation
chargeable to his estate, because upon his death he ceased to be
or by provision of law.”
guarantor.”
While in our successional system the responsibility of the heirs for
Taking up the latter point first, since it is the one more far reaching in
the debts of their decedent cannot exceed the value of the
effects, the reasoning of the court below ran as follows:
inheritance they receive from him, the principle remains intact that
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“The administratrix further contends that upon the death of Hemady, these heirs succeed not only to the rights of the deceased but also to
his liability as a guarantor terminated, and therefore, in the absence his obligations. Articles 774 and 776 of the New Civil Code (and
of a showing that a loss or damage was suffered, the claim cannot be Articles 659 and 661 of the preceding one) expressly so provide,
considered contingent. This Court believes that there is merit in this thereby confirming Article 1311 already quoted.
contention and finds support in Article 2046 of the new Civil Code. It
“ART. 774. — Succession is a mode of acquisition by virtue of which
should be noted that a new requirement has been added for a person
the property, rights and obligations to the extent of the value of the
to qualify as a guarantor, that is: integrity. As correctly pointed out
inheritance, of a person are transmitted through his death to another
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by the Administratrix, integrity is something purely personal and is

or others either by his will or by operation of law.”
not transmissible. Upon the death of Hemady, his integrity was not
transmitted to his estate or successors. Whatever loss therefore, may
“ART. 776. — The inheritance includes all the property, rights and characterized the history of these institutions. From the Roman
obligations of a person which are not extinguished by his death.” concept of a relation from person to person, the obligation has
evolved into a relation from patrimony to patrimony, with the
In Mojica vs. Fernandez, 9 Phil. 403, this Supreme Court ruled:
persons occupying only a representative position, barring those rare
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“Under the Civil Code the heirs, by virtue of the rights of succession cases where the obligation is strictly personal, i.e., is contracted
are subrogated to all the rights and obligations of the deceased intuitu personae, in consideration of its performance by a specific
(Article 661) and cannot be regarded as third parties with respect to person and by no other. The transition is marked by the
a contract to which the deceased was a party, touching the estate of disappearance of the imprisonment for debt.
the deceased (Barrios vs. Dolor, 2 Phil. 44).
Of the three exceptions fixed by Article 1311, the nature of the
x x x x x x x x x obligation of the surety or guarantor does not warrant the conclusion
“The principle on which these decisions rest is not affected by the that his peculiar individual qualities are contemplated as a principal
provisions of the new Code of Civil Procedure, and, in accordance inducement for the contract. What did the creditor Luzon Surety Co.
with that principle, the heirs of a deceased person cannot be held to expect of K. H. Hemady when it accepted the latter as surety in the
be “third persons” in relation to any contracts touching the real counterbonds? Nothing but the reimbursement of the moneys that
estate of their decedent which comes in to their hands by right of the Luzon Surety Co. might have to disburse on account of the
inheritance; they take such property subject to all the obligations obligations of the principal debtors. This reimbursement is a payment
of a sum of money, resulting from an obligation to give; and to the
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resting thereon in the hands of him from whom they derive their chan roblesvirtualawlibrary

rights.” Luzon Surety Co., it was indifferent that the reimbursement should
be made by Hemady himself or by some one else in his behalf, so long
(See also Galasinao vs. Austria, 51 Off. Gaz. (No. 6) p. 2874 and de as the money was paid to it.
Guzman vs. Salak, 91 Phil., 265).
The second exception of Article 1311, p. 1, is intransmissibility by
The binding effect of contracts upon the heirs of the deceased party stipulation of the parties. Being exceptional and contrary to the
is not altered by the provision in our Rules of Court that money debts general rule, this intransmissibility should not be easily implied, but
of a deceased must be liquidated and paid from his estate before the must be expressly established, or at the very least, clearly inferable
residue is distributed among said heirs (Rule 89). The reason is that from the provisions of the contract itself, and the text of the
whatever payment is thus made from the estate is ultimately a agreements sued upon nowhere indicate that they are non-
payment by the heirs and distributees, since the amount of the paid transferable.
claim in fact diminishes or reduces the shares that the heirs would
have been entitled to receive. “(b) Intransmisibilidad por pacto. — Lo general es la transmisibilidad
de darechos y obligaciones; le excepcion, la intransmisibilidad.
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Under our law, therefore, the general rule is that a party’s contractual Mientras nada se diga en contrario impera el principio de la
rights and obligations are transmissible to the successors. The rule is transmision, como elemento natural a toda relacion juridica, salvo las
a consequence of the progressive “depersonalization” of patrimonial personalisimas. Asi, para la no transmision, es menester el pacto
rights and duties that, as observed by Victorio Polacco, has
expreso, porque si no, lo convenido entre partes trasciende a sus The lower court sought to infer such a limitation from Art. 2056, to
herederos. the effect that “one who is obliged to furnish a guarantor must
present a person who possesses integrity, capacity to bind himself,
Siendo estos los continuadores de la personalidad del causante,
and sufficient property to answer for the obligation which he
sobre ellos recaen los efectos de los vinculos juridicos creados por sus
guarantees”. It will be noted, however, that the law requires these
antecesores, y para evitarlo, si asi se quiere, es indespensable
qualities to be present only at the time of the perfection of the
convension terminante en tal sentido.
contract of guaranty. It is self-evident that once the contract has
Por su esencia, el derecho y la obligacion tienden a ir más allá de las become perfected and binding, the supervening incapacity of the
personas que les dieron vida, y a ejercer presion sobre los sucesores guarantor would not operate to exonerate him of the eventual
de esa persona; cuando no se quiera esto, se impone una
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liability he has contracted; and if that be true of his capacity to bind
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estipulacion limitativa expresamente de la transmisibilidad o de himself, it should also be true of his integrity, which is a quality
cuyos tirminos claramente se deduzca la concresion del concreto a mentioned in the article alongside the capacity.
las mismas personas que lo otorgon.” (Scaevola, Codigo Civil, Tomo
The foregoing concept is confirmed by the next Article 2057, that runs
XX, p. 541-542) (Emphasis supplied.)
as follows: chanroblesvirtuallawlibrary

Because under the law (Article 1311), a person who enters into a
“ART. 2057. — If the guarantor should be convicted in first instance
contract is deemed to have contracted for himself and his heirs and
of a crime involving dishonesty or should become insolvent, the
assigns, it is unnecessary for him to expressly stipulate to that effect;
creditor may demand another who has all the qualifications required
chan

hence, his failure to do so is no sign that he intended his bargain to

in the preceding article. The case is excepted where the creditor has
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terminate upon his death. Similarly, that the Luzon Surety Co., did not
required and stipulated that a specified person should be guarantor.”
require bondsman Hemady to execute a mortgage indicates nothing
more than the company’s faith and confidence in the financial From this article it should be immediately apparent that the
stability of the surety, but not that his obligation was strictly personal. supervening dishonesty of the guarantor (that is to say, the
disappearance of his integrity after he has become bound) does not
The third exception to the transmissibility of obligations under Article
terminate the contract but merely entitles the creditor to demand a
1311 exists when they are “not transmissible by operation of law”.
replacement of the guarantor. But the step remains optional in the
The provision makes reference to those cases where the law
creditor: it is his right, not his duty; he may waive it if he chooses,
expresses that the rights or obligations are extinguished by death, as
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and hold the guarantor to his bargain. Hence Article 2057 of the
is the case in legal support (Article 300), parental authority (Article
present Civil Code is incompatible with the trial court’s stand that the
327), usufruct (Article 603), contracts for a piece of work (Article
requirement of integrity in the guarantor or surety makes the latter’s
1726), partnership (Article 1830 and agency (Article 1919). By
undertaking strictly personal, so linked to his individuality that the
contract, the articles of the Civil Code that regulate guaranty or
guaranty automatically terminates upon his death.
suretyship (Articles 2047 to 2084) contain no provision that the
guaranty is extinguished upon the death of the guarantor or the The contracts of suretyship entered into by K. H. Hemady in favor of
surety. Luzon Surety Co. not being rendered intransmissible due to the
nature of the undertaking, nor by the stipulations of the contracts
themselves, nor by provision of law, his eventual liability thereunder The foregoing ruling is of course without prejudice to the remedies
necessarily passed upon his death to his heirs. The contracts, of the administratrix against the principal debtors under Articles 2071
therefore, give rise to contingent claims provable against his estate and 2067 of the New Civil Code.
under section 5, Rule 87 (2 Moran, 1952 ed., p. 437; Gaskell & Co.
Our conclusion is that the solidary guarantor’s liability is not
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vs. Tan Sit, 43 Phil. 810, 814).

extinguished by his death, and that in such event, the Luzon Surety
“The most common example of the contigent claim is that which Co., had the right to file against the estate a contingent claim for
arises when a person is bound as surety or guarantor for a principal reimbursement. It becomes unnecessary now to discuss the estate’s
who is insolvent or dead. Under the ordinary contract of suretyship liability for premiums and stamp taxes, because irrespective of the
the surety has no claim whatever against his principal until he himself solution to this question, the Luzon Surety’s claim did state a cause
pays something by way of satisfaction upon the obligation which is of action, and its dismissal was erroneous.
secured. When he does this, there instantly arises in favor of the
Wherefore, the order appealed from is reversed, and the records are
surety the right to compel the principal to exonerate the surety. But
ordered remanded to the court of origin, with instructions to proceed
until the surety has contributed something to the payment of the
in accordance with law. Costs against the
debt, or has performed the secured obligation in whole or in part, he
Administratrix- Appellee. SO ORDERED.
has no right of action against anybody — no claim that could be
reduced to judgment. (May vs. Vann, 15 Pla., 553; Gibson vs. chan roblesvirtualawlibrary
Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo,
Mithell, 16 Pla., 519; Maxey vs. Carter, 10 Yarg. [Tenn.], 521 Reeves
chan roblesvirtualawlibrary
Labrador, Concepcion, Endencia and Felix, JJ., concur.
vs. Pulliam, 7 Baxt. [Tenn.], 119; Ernst vs. Nou, 63 Wis., 134.)” chan roblesvirtualawlibrary
For Defendant administratrix it is averred that the above doctrine
refers to a case where the surety files claims against the estate of the
principal debtor; and it is urged that the rule does not apply to the
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case before us, where the late Hemady was a surety, not a principal
debtor. The argument evinces a superficial view of the relations
between parties. If under the Gaskell ruling, the Luzon Surety Co., as
guarantor, could file a contingent claim against the estate of the
principal debtors if the latter should die, there is absolutely no reason
why it could not file such a claim against the estate of Hemady, since
Hemady is a solidary co-debtor of his principals. What the Luzon

Surety Co. may claim from the estate of a principal debtor it may

equally claim from the estate of Hemady, since, in view of the existing
solidarity, the latter does not even enjoy the benefit of exhaustion of
the assets of the principal debtor.

G.R. No. L-770 April 27, 1948
ANGEL T. LIMJOCO, Petitioner, vs. INTESTATE
ESTATE OF PEDRO O. FRAGRANTE,
deceased, Respondent.
Angel Limjoco, Jr. and Delfin L. Gonzales for
petitioner.
Bienvenido A. Tan for respondent.
HILADO, J.:
Under date of May 21, 1946, the Public Service
Commission, through Deputy Commissioner Fidel
Ibañez, rendered its decision in case No. 4572 of
Pedro O. Fragante, as applicant for a certificate of
public convenience to install, maintain and
operate an ice plant in San Juan, Rizal, whereby
said commission held that the evidence therein
showed that the public interest and convenience
will be promoted in a proper and suitable manner
"by authorizing the operation and maintenance of
another ice plant of two and one-half (2-�) tons
in the municipality of San Juan; that the original
applicant Pedro O. Fragante was a Filipino Citizen
at the time of his death; and that his intestate
estate is financially capable of maintaining the
proposed service". The commission, therefore,
overruled the opposition filed in the case and
ordered "that under the provisions of section 15
of Commonwealth Act No. 146, as amended a
certificate of public convenience be issued to the
Intestate Estate of the deceased Pedro Fragante,
authorizing said Intestate Estate through its
Special or Judicial Administrator, appointed by the
proper court of competent jurisdiction, to
maintain and operate an ice plant with a daily
productive capacity of two and one-half (2-1/2)
tons in the Municipality of San Juan and to sell the
ice produced from said plant in the said
Municipality of San Juan and in the Municipality of
Mandaluyong, Rizal, and in Quezon City", subject
to the conditions therein set forth in detail
(petitioner's brief, pp. 33-34). chanroblesvirtualawlibrary chanrobles virtual law library
Petitioner makes four assignments of error in his
brief as follows:
1. The decision of the Public Service Commission
is not in accordance with law. chanroblesvirtualawlibrarychanrobles virtual law library
2. The decision of the Public Service Commission
is not reasonably supported by evidence. chanroblesvirtualawlibrary chanrobles virtual law library
3. The Public Service Commission erred in not
giving petitioner and the Ice and Cold Storage
Industries of the Philippines, Inc., as existing
operators, a reasonable opportunity to meet the
increased demand. chanroblesvirtualawlibrary chanrobles virtual law library
4. The decision of the Public Service Commission
is an unwarranted departure from its announced
policy with respect to the establishment and
operation of ice plant. (Pp. 1-2, petitioner's brief.)
In his argument petitioner contends that it was
error on the part of the commission to allow the
substitution of the legal representative of the
estate of Pedro O. Fragante for the latter as party
applicant in the case then pending before the
commission, and in subsequently granting to said
estate the certificate applied for, which is said to
be in contravention of law.chanroblesvirtualawlibrary
If Pedro O. Fragante had not died, there can be
no question that he would have had the right to
prosecute his application before the commission
to its final conclusion. No one would have denied
him that right. As declared by the commission in
its decision, he had invested in the ice plant in
question P 35,000, and from what the commission
said regarding his other properties and business,
he would certainly have been financially able to
maintain and operate said plant had he not died.
His transportation business alone was netting him
about P1,440 a month. He was a Filipino citizen
and continued to be such till his demise. The
commission declared in its decision, in view of the
evidence before it, that his estate was financially
able to maintain and operate the ice plant. The
aforesaid right of Pedro O. Fragante to prosecute
said application to its conclusion was one which
by its nature did not lapse through his death.
Hence, it constitutes a part of the assets of his
estate, for which a right was property despite the
possibility that in the end the commission might
have denied application, although under the facts
chanrobles virtual law library
of the case, the commission granted the
application in view of the financial ability of the
estate to maintain and operate the ice plant.
Petitioner, in his memorandum of March 19, 1947,
admits (page 3) that the certificate of public
convenience once granted "as a rule, should
descend to his estate as an asset". Such
certificate would certainly be property, and the
right to acquire such a certificate, by complying
with the requisites of the law, belonged to the
decedent in his lifetime, and survived to his estate
and judicial administrator after his death.
chanroblesvirtualawlibrary chanrobles virtual law library
If Pedro O. Fragrante had in his lifetime secured
an option to buy a piece of land and during the
life of the option he died, if the option had been
given him in the ordinary course of business and
not out of special consideration for his person,
there would be no doubt that said option and the
right to exercise it would have survived to his
estate and legal representatives. In such a case
there would also be the possibility of failure to
acquire the property should he or his estate or
legal representative fail to comply with the
conditions of the option. In the case at bar Pedro
O. Fragrante's undoubted right to apply for and
acquire the desired certificate of public
convenience - the evidence established that the
public needed the ice plant - was under the law
conditioned only upon the requisite citizenship
and economic ability to maintain and operate the
service. Of course, such right to acquire or obtain
such certificate of public convenience was subject
to failure to secure its objective through
nonfulfillment of the legal conditions, but the
situation here is no different from the legal
standpoint from that of the option in the
illustration just given.
Rule 88, section 2, provides that the executor or
administrator may bring or defend actions, among
other cases, for the protection of the property or
rights of the deceased which survive, and it says
that such actions may be brought or defended "in
the right of the deceased".
Rule 82, section 1, paragraph (a), mentions
among the duties of the executor or
administrator, the making of an inventory of all
goods, chattels, rights, credits, and estate of the
deceased which shall come to his possession or
knowledge, or to the possession of any other
person for him. chanroblesvirtualawlibrary chanrobles virtual law library
In his commentaries on the Rules of Court
(Volume II, 2nd ed., pages 366, 367) the present
chief Justice of this Court draws the following
conclusion from the decisions cited by him:
Therefore, unless otherwise expressly provided by
law, any action affecting the property
or rights (emphasis supplied) of a deceased
person which may be brought by or against him if
he were alive, may likewise be instituted and
prosecuted by or against the administrator, unless
the action is for recovery of money, debt or
interest thereon, or unless, by its very nature, it
cannot survive, because death extinguishes the
right . . . .
chanroblesvirtualawlibrary chanrobles virtual law library
It is true that a proceeding upon the application
for a certificate of public convenience before the
Public Service Commission is not an "action". But
the foregoing provisions and citations go to prove
that the decedent's rights which by their nature
are not extinguished by death go to make up a
chanroblesvirtualawlibrary chanrobles virtual law library part and parcel of the assets of his estate which,
being placed under the control and management
of the executor or administrator, can not be
exercised but by him in representation of the
estate for the benefit of the creditors, devisees or
legatees, if any, and the heirs of the decedent.
And if the right involved happens to consist in the
prosecution of an unfinished proceeding upon an
application for a certificate of public convenience
of the deceased before the Public Service
Commission, it is but logical that the legal
representative be empowered and entitled in
behalf of the estate to make the right effective in
that proceeding. chanroblesvirtualawlibrary chanrobles virtual law library
Manresa (Vol. III, 6th ed., p. 11) says that No. 10
of article 334 and article 336 of the Civil Code,
respectively, consider as immovable and movable
things rights which are not material. The same
eminent commentator says in the cited volume
(p. 45) that article 336 of the Civil Code has been
deficiently drafted in that it is not sufficiently
expressive of all incorporeal rights which are
also property for juridical purposes.
Corpus Juris (Vol. 50, p. 737) states that in the
broad sense of the term, property includes,
among other things, "an option", and "the
certificate of the railroad commission permitting
the operation of a bus line", and on page 748 of
the same volume we read:
However, these terms (real property, as estate or
interest) have also been declared to include every
species of title, inchoate or complete, and
embrace rights which lie in contract, whether
executory or executed. (Emphasis supplied.)
Another important question raised by petitioner is
whether the estate of Pedro O. Fragrante is a
"person" within the meaning of the Public Service
Act.chanroblesvirtualawlibrary chanrobles virtual law library
Words and Phrases, First Series, (Vol. 6, p, 5325),
states the following doctrine in the jurisdiction of
the State of Indiana:
As the estate of the decedent is in law regarded
as a person, a forgery committed after the death
of the man whose name purports to be signed to
the instrument may be prosecuted as with the
intent to defraud the estate. Billings vs. State,
107 Ind., 54, 55, 6 N. E. 914, 7 N. E. 763, 57 Am.
Rep. 77.
chanroblesvirtualawlibrary chanrobles virtual law library
The Supreme Court of Indiana in the decision
cited above had before it a case of forgery
committed after the death of one Morgan for the
purpose of defrauding his estate. The objection
was urged that the information did not aver that
the forgery was committed with the intent to
defraud any person. The Court, per Elliott, J.,
disposed of this objection as follows:
. . . The reason advanced in support of this
proposition is that the law does not regard the
estate of a decedent as a person. This intention
(contention) cannot prevail. The estate of the
decedent is a person in legal contemplation. "The
word "person" says Mr. Abbot, "in its legal
signification, is a generic term, and includes
artificial as well as natural persons," 2 Abb. Dict.
271; Douglas vs. Pacific, etc. Co., 4 Cal. 304;
Planters', etc., Bank vs. Andrews, 8 Port. (Ala.)
404. It said in another work that 'persons are of
two kinds: natural and artificial. A natural person
is a human being. Artificial persons include (1) a
collection or succession of natural persons
forming a corporation; (2) a collection of property
to which the law attributes the capacity of having
rights and duties. The latter class of artificial
persons is recognized only to a limited extent in
our law. "Examples are the estate of a bankrupt
or deceased person." 2 Rapalje & L. Law Dict.
954. Our own cases inferentially recognize the
correctness of the definition given by the authors
from whom we have quoted, for they declare that
it is sufficient, in pleading a claim against a
decedent's estate, to designate the defendant as
the estate of the deceased person, naming
him. Ginn vs. Collins, 43 Ind. 271. Unless we
accept this definition as correct, there would be a
failure of justice in cases where, as here, the
forgery is committed after the death of a person
whose name is forged; and this is a result to be
avoided if it can be done consistent with principle.
We perceive no difficulty in avoiding such a result;
for, to our minds, it seems reasonable that the
estate of a decedent should be regarded as an
artificial person. It is the creation of law for the
purpose of enabling a disposition of the assets to
be properly made, and, although natural persons
as heirs, devises, or creditors, have an interest in
the property, the artificial creature is a distinct
legal entity. The interest which natural persons
have in it is not complete until there has been a
due administration; and one who forges the name
of the decedent to an instrument purporting to be
a promissory note must be regarded as having
intended to defraud the estate of the decedent,
and not the natural persons having diverse
interests in it, since ha cannot be presumed to
have known who those persons were, or what was
the nature of their respective interest. The
fraudulent intent is against the artificial person, -
the estate - and not the natural persons who have
direct or contingent interest in it. (107 Ind. 54,
55, 6 N.E. 914-915.)
In the instant case there would also be a failure of
justice unless the estate of Pedro O. Fragrante is
considered a "person", for quashing of the
proceedings for no other reason than his death
would entail prejudicial results to his investment
amounting to P35,000.00 as found by the
commission, not counting the expenses and
disbursements which the proceeding can be
presumed to have occasioned him during his
lifetime, let alone those defrayed by the estate
thereafter. In this jurisdiction there are ample
precedents to show that the estate of a deceased
person is also considered as having legal
personality independent of their heirs. Among the
most recent cases may be mentioned that of
"Estate of Mota vs. Concepcion, 56 Phil., 712,
717, wherein the principal plaintiff was the estate
of the deceased Lazaro Mota, and this Court gave
judgment in favor of said estate along with the
other plaintiffs in these words:
. . . the judgment appealed from must be
affirmed so far as it holds that defendants
Concepcion and Whitaker are indebted to he
plaintiffs in the amount of P245,804.69 . . . .
Under the regime of the Civil Code and before the
enactment of the Code of Civil Procedure, the
heirs of a deceased person were considered in
contemplation of law as the continuation of his
personality by virtue of the provision of article
661 of the first Code that the heirs succeed to all
the rights and obligations of the decedent by the
mere fact of his death. It was so held by this
Court in Barrios vs. Dolor, 2 Phil., 44, 46.
However, after the enactment of the Code of Civil
Procedure, article 661 of the Civil Code was
abrogated, as held in Suiliong & Co. vs. Chio-
Taysan, 12 Phil., 13, 22. In that case, as well as
in many others decided by this Court after the
innovations introduced by the Code of Civil
Procedure in the matter of estates of deceased
persons, it has been the constant doctrine that it
is the estate or the mass of property, rights and
assets left by the decedent, instead of the heirs
directly, that becomes vested and charged with
his rights and obligations which survive after his
demise. chanroblesvirtualawlibrary chanrobles virtual law library
The heirs were formerly considered as the
continuation of the decedent's personality simply
by legal fiction, for they might not have been
flesh and blood - the reason was one in the
nature of a legal exigency derived from the
principle that the heirs succeeded to the rights
and obligations of the decedent. Under the
present legal system, such rights and obligations
as survive after death have to be exercised and
fulfilled only by the estate of the deceased. And if
the same legal fiction were not indulged, there
would be no juridical basis for the estate,
represented by the executor or administrator, to
exercise those rights and to fulfill those
obligations of the deceased. The reason and
purpose for indulging the fiction is identical and
the same in both cases. This is why according to
the Supreme Court of Indiana in Billings vs.
State, supra, citing 2 Rapalje & L. Dictionary, 954,
among the artificial persons recognized by law
figures "a collection of property to which the law
attributes the capacity of having rights and
duties", as for instance, the estate of a bankrupt
or deceased person. chanroblesvirtualawlibrary chanrobles virtual law library
Petitioner raises the decisive question of whether
or not the estate of Pedro O. Fragrante can be
considered a "citizen of the Philippines" within the
meaning of section 16 of the Public Service Act,
as amended, particularly the proviso thereof
expressly and categorically limiting the power of
the commission to issue certificates of public
convenience or certificates of public convenience
and necessity "only to citizens of the Philippines
or of the United States or to corporations,
copartnerships, associations, or joint-stock
companies constituted and organized under the
laws of the Philippines", and the further proviso
that sixty per centum of the stock or paid-up
capital of such entities must belong entirely to
citizens of the Philippines or of the United
States.chanroblesvirtualawlibrary chanrobles virtual law library
Within the Philosophy of the present legal system,
the underlying reason for the legal fiction by
which, for certain purposes, the estate of the
deceased person is considered a "person" is the
avoidance of injustice or prejudice resulting from
the impossibility of exercising such legal rights
and fulfilling such legal obligations of the
decedent as survived after his death unless the
fiction is indulged. Substantially the same reason
is assigned to support the same rule in the
jurisdiction of the State of Indiana, as announced
in Billings vs. State, supra, when the Supreme
Court of said State said:
. . . It seems reasonable that the estate of a
decedent should be regarded as an artificial
person. it is the creation of law for the purpose of
enabling a disposition of the assets to be properly
made . . . .
Within the framework and principles of the
constitution itself, to cite just one example, under
the bill of rights it seems clear that while the civil
rights guaranteed therein in the majority of cases
relate to natural persons, the term "person" used
in section 1 (1) and (2) must be deemed to
include artificial or juridical persons, for otherwise
these latter would be without the constitutional
guarantee against being deprived of property
without due process of law, or the immunity from
unreasonable searches and seizures. We take it
that it was the intendment of the framers to
include artificial or juridical, no less than natural,
persons in these constitutional immunities and in
others of similar nature. Among these artificial or
juridical persons figure estates of deceased
persons. Hence, we hold that within the
framework of the Constitution, the estate of Pedro
O. Fragrante should be considered an artificial or
juridical person for the purposes of the settlement
and distribution of his estate which, of course,
include the exercise during the judicial
administration thereof of those rights and the
fulfillment of those obligations of his which
survived after his death. One of those rights was
the one involved in his pending application before
the Public Service Commission in the instant case,
consisting in the prosecution of said application to
its final conclusion. As stated above, an injustice
would ensue from the opposite course. chanroblesvirtualawlibrary chanrobles virtual law library
How about the point of citizenship? If by legal
fiction his personality is considered extended so
that any debts or obligations left by, and
surviving, him may be paid, and any surviving
rights may be exercised for the benefit of his
creditors and heirs, respectively, we find no sound
and cogent reason for denying the application of
the same fiction to his citizenship, and for not
considering it as likewise extended for the
purposes of the aforesaid unfinished proceeding
before the Public Service Commission. The
outcome of said proceeding, if successful, would
in the end inure to the benefit of the same
creditors and the heirs. Even in that event commission the certificate for which he was
petitioner could not allege any prejudice in the applying. The situation has suffered but one
legal sense, any more than he could have done if change, and that is, his death. His estate was that
Fragrante had lived longer and obtained the of a Filipino citizen. And its economic ability to
desired certificate. The fiction of such extension of appropriately and adequately operate and
his citizenship is grounded upon the same maintain the service of an ice plant was the same
principle, and motivated by the same reason, as that it received from the decedent himself. In the
the fiction of the extension of personality. The absence of a contrary showing, which does not
fiction is made necessary to avoid the injustice of exist here, his heirs may be assumed to be also
subjecting his estate, creditors and heirs, solely Filipino citizens; and if they are not, there is the
by reason of his death to the loss of the simple expedient of revoking the certificate or
investment amounting to P35,000, which he has enjoining them from inheriting it.chanroblesvirtualawlibrary chanrobles virtual law library

already made in the ice plant, not counting the

other expenses occasioned by the instant Upon the whole, we are of the opinion that for the
proceeding, from the Public Service Commission purposes of the prosecution of said case No. 4572
of this Court. chanroblesvirtualawlibrary chanrobles virtual law library
of the Public Service Commission to its final
conclusion, both the personality and citizenship of
We can perceive no valid reason for holding that Pedro O. Fragrante must be deemed extended,
within the intent of the constitution (Article IV), within the meaning and intent of the Public
its provisions on Philippine citizenship exclude the Service Act, as amended, in harmony with the
legal principle of extension above adverted to. If constitution: it is so adjudged and decreed. chanroblesvirtualawlibrary chanrobles virtual law library

for reasons already stated our law indulges the

fiction of extension of personality, if for such Decision affirmed, without costs. So ordered. chanroblesvirtualawlibrary chanrobles virtual law library

reasons the estate of Pedro O. Fragrante should

be considered an artificial or juridical person Moran, C.J., Pablo, Bengzon, Briones, Padilla and
herein, we can find no justification for refusing to Tuason, JJ., concur.
declare a like fiction as to the extension of his Paras, J., I hereby certify that Mr. Justice Feria
citizenship for the purposes of this proceeding.
virtual law library
chanroblesvirtualawlibrary chanrobles
voted with the majority.

Pedro O. Fragrante was a Filipino citizen, and as

such, if he had lived, in view of the evidence of
record, he would have obtained from the
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-14070 March 29, 1961
MARIA GERVACIO BLAS, MANUEL GERVACIO BLAS,
LEONCIO GERVACIO BLAS and LODA GERVACIO
BLAS, plaintiffs-appellants,
vs.
ROSALINA SANTOS, in her capacity as Special
Administratrix of the Estate of the deceased MAXIMA
SANTOS VDA. DE BLAS, in Sp. Proc. No. 2524, Court of First
Instance of Rizal, defendants-appellants. MARTA GERVACIO
BLAS and DR. JOSE CHIVI, defendants-appellants.
Teofilo Sison and Nicanor Sison for plaintiffs-appellants.
De los Santos, Caluag, Pascal and Felizardo for defendants-
appellees.
LABRADOR, J.:
This action was instituted by plaintiffs against the administration
of the estate of Maxima Santos, to secure a judicial declaration
that one-half of the properties left by Maxima Santos Vda. de
Blas, the greater bulk of which are set forth and described in the
project of partition presented in the proceedings for the
administration of the estate of the deceased Simeon Blas, had
been promised by the deceased Maxima Santos to be delivered
upon her death and in her will to the plaintiffs, and requesting that
the said properties so promised be adjudicated to the plaintiffs.
The complaint also prays for actual damages in the amount of
P50,000. (Record on Appeal, pp. 1-65.) The alleged promise of
the deceased Maxima Santos is contained in a document
executed by Maxima Santos on December 26, 1936 attached to
the complaint as Annex "H" and introduced at the trial as Exhibit
"A". (Ibid., pp. 258-259.) The complaint also alleges that the
plaintiffs are entitled to inherit certain properties enumerated in
paragraph 3 thereof, situated in Malabon, Rizal and Obando,
Bulacan, but which properties have already been in included in
the inventory of the estate of the deceased Simeon Blas and
evidently partitioned and conveyed to his heirs in the proceedings
for the administration of his (Simeon Blas) estate.
Defendant, who is the administratrix of the estate of the deceased
Maxima Santos Vda. de Blas, filed an answer with a
counterclaim, and later, an amended answer and a counterclaim.
The said amended answer admits the allegations of the complaint
as to her capacity as administratrix the death of Simeon Blas on
January 3, 1937; the fact that Simeon Blas and Marta Cruz begot
three children only one of whom, namely, Eulalio Blas, left
legitimate descendants; that Simeon Blas contracted a second
marriage with Maxima Santos on June 28, 1898. She denies for
lack of sufficient information and belief, knowledge edge of the
first marriage of Simeon Blas to Marta Cruz, the averment that
Simeon Blas and Marta Cruz acquired properties situated in
Obando, Bulacan, that said properties were utilized as capital,
etc. As special defenses, she alleges that the properties of the
spouses Blas and Santos had been settled and liquidated in the
project of partition of the estate of said Simeon Blas; that
pursuant to the project of partition, plaintiffs and some defendants
had already received the respective properties adjudicated to
them; that the plaintiffs and the defendants Marta Geracio and
Jose Chivi are estopped from impugning the validity of the project
of partition of the estate of the deceased Simeon Blas and from
questioning the ownership in the properties conveyed in the
project of partition to Maxima Santos as her own exclusive
property; that the testament executed by Maxima Santos is valid,
the plain plaintiffs having no right to recover any portion of
Maxima Santos' estate now under administration by the court. A
counterclaim for the amount of P50,000 as damages is also
included in the complaint, as also a cross-claim against Marta
Gervacio Blas and Jose Chivi.
Trial of the case was Conducted and, thereafter, the court, Hon. II
Gustave Victoriano, presiding, rendered judgment dismissing the
complaint, with costs against plaintiff, and dismissing also the 1. Ang kalahati ng lahat ng aming pag-aari, matapos
counterclaim and cross-claim decision ,the plaintiffs filed by the mabayaran ang lahat ng aking o aming pag-kakautang na
defendants. From this district have appealed to this Court. mag-asawa, kung mayroon man, yayamang ang lahat ng
ito ay kita sa loob ng matrimonio (bienes ganaciales) ay
The facts essential to an understanding of the issues involved in bahagi ng para sa aking asawa, MAXIMA SANTOS DE
the case may be briefly summarized as follows: Simeon Blas BLAS, sang-ayon sa batas. (Record on Appeal, pp. 250-
contracted a first marriage with Marta Cruz sometime before 251.)
1898. They had three children, only one of whom, Eulalio, left
children, namely, Maria Gervacio Blas, one of the plaintiffs, Marta The above testamentary provisions may be translated as follows:
Gervacio Blas, one of the defendants, and Lazaro Gervacio Blas.
Lazaro died in 1950, and is survived by three legitimate children I
who are plaintiffs herein, namely, Manuel Gervacio Blas, Leoncio
Gervacio Blas and Loida Gervacio Blas. Marta Cruz died in 1898,
2. During my second marriage with Maxima Santos de
and the following year, Simeon Blas contracted a second
Blas, I possessed and acquired wealth and properties,
marriage with Maxima Santos. At the time of this second
consisting of lands, fishponds and other kinds of
marriage, no liquidation of the properties required by Simeon Blas
properties, the total assessed value of which reached the
and Marta Cruz was made. Three of the properties left are
amount P678,880.00.
fishponds located in Obando, Bulacan. Maxima Santos does not
appear to have apported properties to her marriage with Simeon
Blas. II

On December 26, 1936, only over a week before over a week 1. One-half of our properties, after the payment of my and
before his death on January 9, 1937, Simeon Blas executed a our indebtedness, all these properties having been
last will and testament. In the said testament Simeon Blas makes acquired during marriage (conjugal properties),
the following declarations: constitutes the share of my wife Maxima Santos de Blas,
according to the law.
I
At the time of the execution of said will, Andres Pascual a son-in-
law of the testator, and Avelina Pascual and others, were present.
2. Sa panahon ng aking pangalawang asawa, MAXIMA
Andres Pascual had married a descendant by the first marriage.
SANTOS DE BLAS, ay nagkaroon ako at nakatipon ng
The will was prepared by Andres Pascual, with the help of his
mga kayamanan (bienes) at pag-aari (propriedades) na
nephew Avelino Pascual. The testator asked Andres Pascual to
ang lahat ng lupa, palaisdaan at iba pang pag-aari ay
prepare a document which was presented in court as Exhibit "A",
umaabot sa halagang ANIM NA RAAN PITONG PU'T
thus:
WALONG DAAN LIBO WALONG DAAN WALONG PUNG
PISO (678,880-00) sang-ayon sa mga halaga sa
amillarimento (valor Amillarado.)
 Q — Was there anybody who asked you to prepare this
document?
A — Don Simeon Blas asked me to prepare this
document (referring to Exhibit "A"), (t.s.n., Sarmiento to,
P. 24).
The reason why the testator ordered the preparation of Exhibit "A"
was because the properties that the testator had acquired during
his first marriage with Marta Cruz had not been liquidated and
were not separated from those acquired during the second
marriage. Pascual's testimony is as follows:
Q — To whom do you refer with the word "they"?
A — Simeon Blas and his first wife, Marta Cruz. When
Marta Cruz died they had not made a liquidation of their
conjugal properties and so all those properties were
included all in the assets of the second marriage, and that
is the reason why this document was prepared. (t.s.n.,
Sarmiento, p. 36.)
The above testimony is fully corroborated by that of Leoncio
Gervacio, son-in-law of Simeon Blas.
Q — Please state to the Court?
A — My children were claiming from their grandfather
Simeon Blas the properties left by their grandmother
Marta Cruz in the year 1936.
Q — And what happened with that claim of your children
against Simeon Blas regarding the assets or properties of
the first marriage that were left after the death of Marta
Cruz in 1936?
A — The claim was not pushed through because they
reached into an agreement whereby the parties Simeon
Blas Maxima Santos, Maria Gervacio Bias, Marta
Gervacio Blas and Lazaro Gervacio Blas agreed that
Simeon Blas and Maxima Blas will give one-half of the
estate of Simeon Blas. (t.s.n., Sarmiento, pp. 143-144).
The document which was thus prepared and which is marked as
Exhibit "A" reads in Tagalog, thus:
MAUNAWA NG SINO MANG MAKABABASA:
Na akong si MAXIMA SANTOS DE BLAS, nasa hustong
gulang, kasal kay SIMEON BLAS, taga bayan ng
Malabon, Rizal, Philippines, sa pamamagitan ng
kasulatang ito ay malaya kong ipinahahayag:
Na aking nabasa at naunawa ang testamento at huling
kalooban na nilagdaan ng aking asawa, SIMEON BLAS,
at ipinahahayag ko sa ilalim ng aking karangalan at sa
harap ng aking asawa na igagalang at pagpipitaganan
ang lahat at bawa't isang bahagi ng nabanggit na
testamento at ipinangangako ko pa sa pamamagitan ng
kasulatang ito na ang lahat ng maiiwang pag-aari at
kayamanan naming mag-asawa, na nauukol at bahaging
para sa akin sa paggawa ko naman ng aking testamento
ay ipagkakaloob ko ang kalahati (½) sa mga herederos at
legatarios o pinamamanahan ng aking nabanggit na
asawa, SIMEON BLAS, sa kaniyang testamento, na ako'y
makapipili o makahihirang na kahit kangino sa kanila ng
aking pagbibigyan at pamamanahan sang-ayon sa
paggalang, paglilingkod, at pakikisama ng gagawin sa
akin.
SA KATUNAYAN NG LAHAT NG ITO ay nilagdaan ko
ang kasulatang ito ngayon ika 26 ng Diciembre ng taong
 1936, dito sa San Francisco del Monte, San Juan, Rizal,
Philippines. (Exh. "A", pp. 29-30 — Appellant's brief).
(Fdo.) MAXIMA SANTOS DE BLAS
and which, translated into English, reads as follows:
KNOW ALL MEN BY THESE PRESENTS:
That I MAXIMA SANTOS DE BLAS, of legal age, married
to SIMEON BLAS, resident of Malabon, Rizal, Philippines,
voluntarily state:
That I have read and knew the contents of the will signed
by my husband, SIMEON BLAS, (2) and I promise on my
word of honor in the presence of my husband that I will
respect and obey all and every disposition of said will (3)
and furthermore, I promise in this document that all the
properties my husband and I will leave, the portion and
share corresponding to me when I make my will, I will give
one-half (½) to the heirs and legatees or the beneficiaries
named in the will of my husband, (4) and that I can select
or choose any of them, to whom I will give depending
upon the respect, service and treatment accorded to me.
IN WITNESS WHEREOF, I signed this document this
26th day of December, 1936 at San Francisco del Monte,
San Juan, Rizal, Philippines. (Exh. "A", pp. 30-31,
Appellant's brief).
(Sgd.) MAXIMA SANTOS DE BLAS
The court below held that said Exhibit "A" has not created any
right in favor of plaintiffs which can serve as basis for the
complaint; that neither can it be considered as a valid and
enforceable contract for lack of consideration and because it
deals with future inheritance. The court also declared that Exhibit
"A" is not a will because it does not comply with the requisites for
the execution of a will; nor could it be considered as a donation,
etc.
Both the court below in its decision and the appellees in their brief
before us, argue vehemently that the heirs of Simeon Blas and
his wife Marta Cruz can no longer make any claim for the
unliquidated conjugal properties acquired during said first
marriage, because the same were already included in the mass
of properties constituting the estate of the deceased Simeon Blas
and in the adjudications made by virtue of his will, and that the
action to recover the same has prescribed. This contention is
correct. The descendants of Marta Cruz can no longer claim the
conjugal properties that she and her husband may have required
during their marriage although no liquidation of such properties
and delivery thereof to the heirs of Marta Cruz have been made,
no action to recover said propertied having been presented in the
proceedings for the settlement of the estate of Simeon Blas.
But the principal basis for the plaintiffs' action in the case at bar is
the document Exhibit "A". It is not disputed that this document
was prepared at the instance of Simeon Blas for the reason that
the conjugal properties of me on Blas for the reason his first
marriage had not been liquidated; that it was prepared at the
same time as the will of Simeon Blas on December 26, 1936, at
the instance of the latter himself. It is also not disputed that the
document was signed by Maxima Santos and one copy thereof,
which was presented in court as Exhibit "A", was kept by plaintiffs'
witness Andres Pascual.
Plaintiffs-appellants argue before us that Exhibit "A" is both a trust
agreement and a contract in the nature of a compromise to avoid
litigation. Defendants-appellees, in answer, claim that it is neither
a trust agreement nor a compromise a agreement. Considering
that the properties of the first marriage of Simeon Blas had not
been liquidated when Simeon Blas executed his will on
December 26, 1936', and the further fact such properties where
actually , and the further fact that included as conjugal properties
acquired during the second marriage, we find, as contended by
plaintiffs-appellants that the preparation and execution of Exhibit
"A" was ordered by Simeon Blas evidently to prevent his heirs by
his first marriage from contesting his will and demanding
liquidation of the conjugal properties acquired during the first
marriage, and an accounting of the fruits and proceeds thereof
from the time of the death of his first wife.
Exhibit "A", therefore, appears to be the compromise defined in
Article 1809 of the Civil Code of Spain, in force at the time of the
execution of Exhibit "A", which provides as follows:
Compromise is a contract by which each of the parties in
interest, by giving, promising, or retaining something
avoids the provocation of a suitor terminates one which
has already the provocation been instituted. (Emphasis
supplied.)
Exhibit "A" states that the maker (Maxima Santos) had read and
knew the contents of the will of her husband read and knew the
contents of the will Simeon Blas — she was evidently referring to
the declaration in the will(of Simeon Blas) that his properties are
conjugal properties and one-half thereof belongs to her (Maxima
Santos) as her share of the conjugal assets under the law. The
agreement or promise that Maxima Santos makes in Exhibit "A" is
to hold one-half of her said share in the conjugal assets in trust
for the heirs and legatees of her husband in his will, with the
obligation of conveying the same to such of his heirs or legatees
as she may choose in her last will and testament. It is to be noted
that the conjugal properties referred to are those that were
actually existing at that time, December 26, 1936. Simeon Blas
died on January 9, 1937. On June 2, 1937, an inventory of the
properties left by him, all considered conjugal, was submitted by
Maxima Santos herself as administratrix of his estate. A list of
said properties is found in Annex "E", the complete inventory
submitted by Maxima Santos Vda. de Blas, is administratrix of the
estate of her husband, dated March 10, 1939. The properties
which were given to Maxima Santos as her share in the conjugal
properties are also specified in the project of partition submitted
by said Maxima Santos herself on March 14, 1939. (Record on
Appeal, pp. 195-241.) Under Exhibit "A", therefore, Maxima
Santos contracted the obligation and promised to give one-half of
the above indicated properties to the heirs and legatees of
Simeon Blas.
Counsel for the defendant-appellee claims Exhibit "A" is a
worthless piece of paper because it is not a will nor a
donation mortis causa nor a contract. As we have in indicated
above, it is a compromise and at the same time a contract with a
sufficient cause or consideration. It is also contended that it deals
with future inheritance. We do not think that Exhibit "A" is a
contract on future inheritance. it is an obligation or promise made
by the maker to transmit one-half of her share in the conjugal
properties acquired with her husband, which properties are stated
or declared to be conjugal properties in the will of the husband.
The conjugal properties were in existence at the time of the
execution of Exhibit "A" on December 26, 1936. As a matter of
fact, Maxima Santos included these properties in her inventory of
her husband's estate of June 2, 1937. The promise does not refer
to any properties that the maker would inherit upon the death of
her husband, because it is her share in the conjugal assets. That
the kind of agreement or promise contained in Exhibit "A" is not
void under Article 1271 of the old Civil Code, has been decided
by the Supreme Court of Spain in its decision of October 8,
19154, thus:
Que si bien el art. 1271 del Codigo civil dispone que
sobre la herenciafutura no se podra celebrar otros
contratos que aquellos cuyo objecto seapracticar entre
vivos la division de un caudal, conforme al articulo
1056, esta prohibicion noes aplicable al caso, porque la
 obligacion que contrajoel recurr en contrato privado de
otorgar testamento e instituir heredera a su subrina de los
bienes que adquirio en virtud de herencia, procedentes
desu finada consorte que le quedasen sobrantes despues
de pagar las deudas, y del ganacial que se expresa, asi
como de reconocer, ademas, con alguna cosaa otros
sobrinos, se refiere a bienes conocidos y determinados
existentes cuando tal compromisi se otorgo, y no a la
universalidad de una herencia que, sequn el art. 659 del
citado Codigo civil, as determina a muerte,
constituyendola todos los bienes, derechos y obligaciones
que por ella no sehayan extinguido: ..." (Emphasis
supplied.)
It will be noted that what is prohibited to be the subject matter of a
contract under Article 1271 of the Civil Code is "future
inheritance." To us future inheritance is any property or right not
in existence or capable of determination at the time of the
contract, that a person may in the future acquire by succession.
The properties subject of the contract Exhibit "A" are well defined
properties, existing at the time of the agreement, which Simeon
Blas declares in his statement as belonging to his wife as her
share in the conjugal partnership. Certainly his wife's actual share
in the conjugal properties may not be considered
as future inheritance because they were actually in existence at
the time Exhibit "A" was executed.
The trial court held that the plaintiffs-appellants in the case at bar
are concluded by the judgement rendered in the proceedings for
the settlement of the estate of Simeon Blas for the reason that the
properties left by him belonged to himself and his wife Maxima
Santos; that the project of partition in the said case, adjudicating
to Maxima Santos one-half as her share in the conjugal
properties, is a bar to another action on the same subject matter,
Maxima Santos having become absolute owner of the said
properties adjudicated in her favor. As already adverted to above,
these contentions would be correct if applied to the claim of the
plaintiffs-appellants that said properties were acquired with the
first wife of Simeon Blas, Marta Cruz. But the main ground upon
which plaintiffs base their present action is the document Exhibit
"A", already fully considered above. As this private document
contains the express promise made by Maxima Santos to convey
in her testament, upon her death, one-half of the conjugal
properties she would receive as her share in the conjugal
properties, the action to enforce the said promise did not arise
until and after her death when it was found that she did not
comply with her above-mentioned promise. (Art. 1969, old Civil
Code.) The argument that the failure of the plaintiffs-appellants
herein to oppose the project of partition in the settlement of the
estate of Simeon Blas, especially that portion of the project which
assigned to Maxima Santos one-half of all the conjugal properties
bars their present action, is, therefore, devoid of merit. It may be
added that plaintiffs-appellants did not question the validity of the
project of partition precisely because of the promise made by
Maxima Santos in the compromise Exhibit "A"; they acquised in
the approval of said project of partition because they were relying
on the promise made by Maxima Santos in Exhibit "A", that she
would transmit one-half of the conjugal properties that she was
going to receive as her share in the conjugal partnership upon her
death and in her will, to the heirs and legatees of her husband
Simeon Blas.
Neither can the claim of prescription be considered in favor of the
defendants. The right of action arose at the time of the death of
Maxima Santos on October 5,1956, when she failed to comply
with the promise made by her in Exhibit "A". The plaintiffs-
appellants immediately presented this action on December 27,
1956, upon learning of such failure on the part of Maxima Santos
to comply with said promise. This defense is, therefore, also
without merit.
It is next contended by the defendant-appellee that Maxima
Santos complied with her above-mentioned promise, — that
Andres Pascual, Tomasa Avelino, Justo Garcia, Ludovico Pimpin
and Marta Gervacio Blas were given substancial legacies in the
will and testament of Maxima Santos. To determine whether she
had actually complied with the promise made in Exhibit "A", there 53. Calise Mabalumbum, Sexmoan, Pampanga
is herein set forth a list only of the fishponds and their respective
areas as contained in the list of properties she acquired as her 54. Messapinit Kineke, Sexmoan, Pampanga (a)
share in the conjugal partnership, which list includes, besides (b)
many ricelands as well as residential lots, thus:
(c)
31. Paco, Obando, Bulacan 5.8396 has. (d)
32. Pangjolo, Obando 3.5857 " (e)
34. Batang Pirasuan, Lubao, Pampanga 11.9515 " (f)
35. Calangian, Lubao, Pampanga 30.2059 " (g)
38. Bakuling, Lubao, Pampanga 215.4325 " (h)
39. Bakuling, Lubao, Pampanga 8.3763 " (i)
40. Bangkal, Sinubli 55. Dalang,
23.0730 " Banga, Sexmoan, Pampanga
41. Tagulod, 62. Alaminos,
6.8692 " Pangasinan 1
44. Bangkal Pugad (a) 80. Mangasu
34.2779 " Sexmoan, Pampanga
(b) 81. Don Tomas,
51.7919 " Sexmoan, Pampanga
(c) 82. Matikling,
2.5202 " Lubao, Pampanga
45. Magtapat Bangkal, Lubao, Pampanga (a) Total
18.0024 " area ............................... 10
(b) 7.3265 " (See Record on Record, pp. 195-241.)
(c) 53.5180 "
In her will, Maxima Santos devised to Marta Gervacio Blas the
46. Pinanganakan, Lubao, Pampanga 159.0078
80-hectare fishpond" situated in Lubao, Pampanga. The fishpond
47. Emigdio Lingid, Lubao, Pampanga devised34.5229
is evidently" that designated as "Propios" in Lubao,
Pampanga, item No. 8 in the list of properties adjudicated to her
48. Propios, Lubao, Pampanga 80.5382
in the project "
of partition. (Record on Appeal, p. 215.) Considering
49. Batang Mabuanbuan, Sexmoan, Pampanga that the 43.3350
total area of" the fishponds amount to 1045.7863
hectares, the 80 hectares devised to Marta Gervacio Blas is not
50. Binatang Mabuanbuan, Sexmoan, Pampanga 3.5069of the
even one-tenth " total area of the fishponds. Add to this the
51. Sapang Magtua, Sexmoan, Pampanga fact that56,8242
in the will "she imposed upon Marta Gervacio Blas de
Chivi an existing obligation on said fishponds, namely, its lease in
52. Kay Limpin, Sexmoan, Pampanga 1957 and5.0130
the duty "to pay out of the rentals thereof an obligation
to the Rehabilitation Finance Corporation RFC (Ibid., pp. 262-
263.) Angelina Blas was given only a lot of 150 square meters in her husband Simeon Blas. Considering that all said heirs and
Hulong Duhat, Malabon, Rizal, and Leony Blas, the sum of legatees, designated in the will of Simeon Blas as the persons for
P300.00 (Ibid., p. 264.) whose benefit Exhibit "A" had been executed, have not appeared
in these proceedings, the record is hereby remanded to the court
It is evident from a consideration of the above figures and facts below, with instructions that, after the conveyance of the
that Maxima Santos did not comply with her obligation to devise properties hereinabove ordered had been effected, the said heirs
one-half of her conjugal properties to the heirs and legatees of and legatees (of Simeon Blas) file adversary pleadings to
her husband. She does not state that she had complied with such determine the participation of each and every one of them in said
obligation in her will. If she intended to comply therewith by giving properties. Costs against the defendant- appellee Rosalina
some of the heirs of Simeon Blas the properties mentioned Santos.
above, the most that can be considered in her favor is to deduct
the value of said properties from the total amount of properties Padilla, Parades and Dizon, JJ., concur.
which she had undertaken to convey upon her death. Reyes, J.B.L. and Barrera, JJ., concur in a separate opinion.
Bengzon, C.J., reserves his vote.
All the issues in the pleadings of the parties and in their Concepcion, J., took no part.
respective briefs, have now been fully discussed and considered.
Reiterating what we have stated above, we declare that by
Exhibit "A", a compromise to avoid litigation, Maxima Santos
promised to devise to the heirs and legatees of her husband
Simeon Blas, one-half of the properties she received as her share
in the conjugal partnership of herself and her husband, which
share is specified in the project of partition submitted by herself
on March 14, 1939 in the settlement of the estate of her husband,
and which is found on pages 195 to 240 of the record on appeal
and on pages 27 to 46 of the project of partition, submitted by
Maxima Santos herself before the Court of First Instance of Rizal
in Civil Case No. 6707, entitled "Testamentaria del Finado Don
Simeon Blas, Maxima Santos Vda. de Bias, Administradora"; and
that she failed to comply with her aforementioned obligation.
(Exhibit "A")

WHEREFORE, the judgment appealed from is hereby reversed

and the defendant-appellee, administratrix of the estate of
Maxima Santos, is ordered to convey and deliver one-half of the
properties adjudicated o Maxima Santos as her share in the
conjugal properties in said Civil Case No. 6707, entitled
"Testamentaria del Finado Don Simeon Blas, Maxima Santos
Vda. de Blas, Administradora", to the heirs and the legatees of
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 188417 September 24, 2012
MILAGROS DE BELEN VDA. DE CABALU, MELITON
CABALU, SPS. ANGELA CABALU and RODOLFO
TALAVERA, and PATRICIO ABUS, Petitioners,
vs.
SPS. RENATO DOLORES TABU and LAXAMANA, Municipal
Trial Court in Cities, Tarlac City, Branch II,Respondents.
DECISION
MENDOZA, J.:
This is a "Petition for Review on Certiorari (under Rule 45)" of the
Rules of Court assailing the June 16, 2009 Decision1 of the Court
of Appeals (CA) in CA-GR. CV No. 81469 entitled "Milagros De
Belen Vda de Cabalu v. Renato Tabu."
The Facts
The property subject of the controversy is a 9,000 square meter
lot situated in Mariwalo, Tarlac, which was a portion of a property
registered in the name of the late Faustina Maslum (Faustina)
under Transfer Certificate of Title (TCT) No. 16776 with a total
area of 140,211 square meters.2
On December 8, 1941, Faustina died without any children. She
left a holographic will, dated July 27, 1939, assigning and
distributing her property to her nephews and nieces. The said
holographic will, however, was not probated. One of the heirs was
the father of Domingo Laxamana (Domingo), Benjamin
Laxamana, who died in 1960. On March 5, 1975, Domingo
allegedly executed a Deed of Sale of Undivided Parcel of Land
disposing of his 9,000 square meter share of the land to
Laureano Cabalu.3
On August 1, 1994, to give effect to the holographic will, the
forced and legitimate heirs of Faustina executed a Deed of Extra-
Judicial Succession with Partition. The said deed imparted 9,000
square meters of the land covered by TCT No. 16776 to
Domingo. Thereafter, on December 14, 1995, Domingo sold
4,500 square meters of the 9,000 square meters to his nephew,
Eleazar Tabamo. The document was captioned Deed of Sale of a
Portion of Land. On May 7, 1996, the remaining 4,500 square
meters of Domingo’s share in the partition was registered under
his name under TCT No. 281353.4
On August 4, 1996, Domingo passed away.
On October 8, 1996, two months after his death, Domingo
purportedly executed a Deed of Absolute Sale of TCT No.
281353 in favor of respondent Renato Tabu (Tabu). The resultant
transfer of title was registered as TCT No. 286484. Subsequently,
Tabu and his wife, Dolores Laxamana (respondent spouses),
subdivided the said lot into two which resulted into TCT Nos.
291338 and 291339.5
On January 15, 1999, respondent Dolores Laxamana-Tabu,
together with Julieta Tubilan-Laxamana, Teresita Laxamana,
Erlita Laxamana, and Gretel Laxamana, the heirs of Domingo,
filed an unlawful detainer action, docketed as Civil Case No.
7106, against Meliton Cabalu, Patricio Abus, Roger Talavera,
Jesus Villar, Marcos Perez, Arthur Dizon, and all persons
claiming rights under them. The heirs claimed that the defendants
were merely allowed to occupy the subject lot by their late father,
Domingo, but, when asked to vacate the property, they refused to
do so. The case was ruled in favor of Domingo’s heirs and a writ
of execution was subsequently issued.6
On February 4, 2002, petitioners Milagros de Belen Vda. De
Cabalu, Meliton Cabalu, Spouses Angela Cabalu and Rodolfo
Talavera, and Patricio Abus (petitioners), filed a case for
Declaration of Nullity of Deed of Absolute Sale, Joint Affidavit of
Nullity of Transfer Certificate of Title Nos. 291338 and 291339,
Quieting of Title, Reconveyance, Application for Restraining
Order, Injunction and Damages (Civil Case No. 9290) against
respondent spouses before the Regional Trial Court, Branch 63,
Tarlac City (RTC).7
1. declaring null and void the Deed of Absolute Sale dated
March 5, 1975, executed by Domingo Laxamana in favor
of Laureano Cabalu;
2. declaring null and void the Deed of Absolute Sale dated
October 8, 1996, executed by Domingo Laxamana in
favor of Renato Tabu, and that TCT Nos. 293338 and
291339, both registered in the name of Renato Tabu,
married to Dolores Laxamana be cancelled;

In their complaint, petitioners claimed that they were the lawful 3. restoring to its former validity, TCT No. 16770 in the
owners of the subject property because it was sold to their father, name of Faustina Maslum subject to partition by her
Laureano Cabalu, by Domingo, through a Deed of Absolute Sale, lawful heirs.
dated March 5, 1975. Hence, being the rightful owners by way of
succession, they could not be ejected from the subject property.8 Costs de oficio.

In their Answer, respondent spouses countered that the deed of SO ORDERED.11

sale from which the petitioners anchored their right over the 9,000
square meter property was null and void because in 1975,
Not in conformity, both parties appealed to the CA. Petitioners
Domingo was not yet the owner of the property, as the same was
contended that the RTC erred in declaring void the Deed of
still registered in the name of Faustina. Domingo became the
Absolute Sale, dated March 5, 1975. They claimed that Domingo
owner of the property only on August 1, 1994, by virtue of the
owned the property, when it was sold to Laureano Cabalu,
Deed of Extra-Judicial Succession with Partition executed by the
because he inherited it from his father, Benjamin, who was one of
forced heirs of Faustina. In addition, they averred that Domingo
the heirs of Faustina. Being a co-owner of the property left by
was of unsound mind having been confined in a mental institution
Benjamin, Domingo could dispose of the portion he owned,
for a time.9
notwithstanding the will of Faustina not being probated.
On September 30, 2003, the RTC dismissed the complaint as it
Respondent spouses, on the other hand, asserted that the Deed
found the Deed of Absolute Sale, dated March 5, 1975, null and
of Sale, dated March 5, 1975, was spurious and simulated as the
void for lack of capacity to sell on the part of Domingo. Likewise,
signature, PTR and the document number of the Notary Public
the Deed of Absolute Sale, dated October 8, 1996, covering the
were different from the latter’s notarized documents. They added
remaining 4,500 square meters of the subject property was
that the deed was without consent, Domingo being of unsound
declared ineffective having been executed by Domingo two
mind at the time of its execution. Further, they claimed that the
months after his death on August 4, 1996. The fallo of the
RTC erred in canceling TCT No. 266583 and insisted that the
Decision10 reads:
same should be restored to its validity because Benjamin and
Domingo were declared heirs of Faustina.
WHEREFORE, in view of the foregoing, the complaint is hereby
DISMISSED, and the decision is hereby rendered by way of:
On June 16, 2009, the CA rendered its decision and disposed as
follows:
WHEREFORE, in the light of the foregoing, the instant appeal is
partially GRANTED in that the decision of the trial court is
AFFIRMED WITH MODIFICATION that sub-paragraphs 2 & 3 of
the disposition, which reads:
"2. declaring null and void the Deed of Absolute Sale dated
October 8, 1996, executed by Domingo Laxamana in favor of
Renato Tabu, and that TCT Nos. 291338 and 291339, both
registered in the name of Renato Tabu, married to Dolores
Laxamana be cancelled;
3. restoring to its former validity, TCT No. 16776 in the name of
Faustina Maslum subject to partition by her lawful heirs," are
DELETED.
IT IS SO ORDERED.12
In finding Domingo as one of the heirs of Faustina, the CA
explained as follows:
It appears from the records that Domingo was a son of Benjamin
as apparent in his Marriage Contract and Benjamin was a
nephew of Faustina as stated in the holographic will and deed of
succession with partition. By representation, when Benjamin died
in 1960, Domingo took the place of his father in succession. In
the same vein, the holographic will of Faustina mentioned
Benjamin as one of her heirs to whom Faustina imparted 9,000
square meters of her property. Likewise, the signatories to the
Deed of Extra-judicial Succession with Partition, heirs of Faustina,
particularly declared Domingo as their co-heir in the succession
and partition thereto. Furthermore, the parties in this case
admitted that the relationship was not an issue.13
Although the CA found Domingo to be of sound mind at the time
of the sale on March 5, 1975, it sustained the RTC’s declaration
of nullity of the sale on the ground that the deed of sale was
simulated.
The CA further held that the RTC erred in canceling TCT No.
266583 in the name of Domingo and in ordering the restoration of
TCT No. 16770, registered in the name of Faustina, to its former
validity, Domingo being an undisputed heir of Faustina.
Hence, petitioners interpose the present petition before this Court
anchored on the following:
GROUNDS
(A)
THE DEED OF SALE OF UNDIVIDED PARCEL OF
LAND EXECUTED ON MARCH 5, 1975 BY DOMINGO
LAXAMANA IN FAVOR OF LAUREANO CABALU IS
VALID BECAUSE IT SHOULD BE ACCORDED THE
PRESUMPTION OF REGULARITY AND DECLARED
VALID FOR ALL PURPOSES AND INTENTS.
(B)
THE SUBPARAGRAPH NO. 2 OF THE DECISION OF
THE REGIONAL TRIAL COURT SHOULD STAY
BECAUSE THE HONORABLE COURT OF APPEALS
DID NOT DISCUSS THE ISSUE AND DID NOT STATE
THE LEGAL BASIS WHY SAID PARAGRAPH SHOULD
BE DELETED FROM THE SEPTEMBER 30, 2003
DECISION OF THE REGIONAL TRIAL COURT.14
The core issues to be resolved are 1) whether the Deed of Sale
of Undivided Parcel of Land covering the 9,000 square meter
property executed by Domingo in favor of Laureano Cabalu on
March 5, 1975, is valid; and 2) whether the Deed of Sale, dated
October 8, 1996, covering the 4,500 square meter portion of the
9,000 square meter property, executed by Domingo in favor of
Renato Tabu, is null and void.
Petitioners contend that the Deed of Absolute Sale executed by
Domingo in favor of Laureano Cabalu on March 5, 1975 should
have been declared valid because it enjoyed the presumption of
regularity. According to them, the subject deed, being a public
document, had in its favor the presumption of regularity, and to
contradict the same, there must be clear, convincing and more
than preponderant evidence, otherwise, the document should be
upheld. They insist that the sale transferred rights of ownership in
favor of the heirs of Laureano Cabalu.
They further argue that the CA, in modifying the decision of the
RTC, should not have deleted the portion declaring null and void
the Deed of Absolute Sale, dated October 8, 1996, executed by
Domingo in favor of Renato Tabu, because at the time of
execution of the said deed of sale, the seller, Domingo was
already dead. Being a void document, the titles originating from
the said instrument were also void and should be cancelled.
Respondent spouses, in their Comment15 and
Memorandum,16 counter that the issues raised are not questions of
law and call for another calibration of the whole evidence already
passed upon by the RTC and the CA. Yet, they argue that
petitioners’ reliance on the validity of the March 5, 1975 Deed of
Sale of Undivided Parcel of Land, based on presumption of
regularity, was misplaced because both the RTC and the CA, in
the appreciation of evidence on record, had found said deed as
simulated.
It is well to note that both the RTC and the CA found that the
evidence established that the March 5, 1975 Deed of Sale of
Undivided Parcel of Land executed by Domingo in favor of
Laureano Cabalu was a fictitious and simulated document. As
expounded by the CA, viz:
Nevertheless, since there are discrepancies in the signature of
the notary public, his PTR and the document number on the
lower-most portion of the document, as well as the said deed of
sale being found only after the plaintiffs-appellants were ejected
by the defendants-appellants; that they were allegedly not aware
that the said property was bought by their father, and that they
never questioned the other half of the property not occupied by
them, it is apparent that the sale dated March 5, 1975 had the
earmarks of a simulated deed written all over it. The lower court
did not err in pronouncing that it be declared null and void.17
Petitioners, in support of their claim of validity of the said
document of deed, again invoke the legal presumption of
regularity. To reiterate, the RTC and later the CA had ruled that
the sale, dated March 5, 1975, had the earmarks of a simulated
deed, hence, the presumption was already rebutted. Verily and as
aptly noted by the respondent spouses, such presumption of
regularity cannot prevail over the facts proven and already
established in the records of this case.
Even on the assumption that the March 5, 1975 deed was not
simulated, still the sale cannot be deemed valid because, at that
time, Domingo was not yet the owner of the property. There is no
dispute that the original and registered owner of the subject
property covered by TCT No. 16776, from which the subject
9,000 square meter lot came from, was Faustina, who during her
lifetime had executed a will, dated July 27, 1939. In the said will,
the name of Benjamin, father of Domingo, appeared as one of the
heirs. Thus, and as correctly found by the RTC, even if Benjamin
died sometime in 1960, Domingo in 1975 could not yet validly
dispose of the whole or even a portion thereof for the reason that
he was not the sole heir of Benjamin, as his mother only died
sometime in 1980.
Besides, under Article 1347 of the Civil Code, "No contract may
be entered into upon future inheritance except in cases expressly
authorized by law." Paragraph 2 of Article 1347, characterizes a
contract entered into upon future inheritance as void. The law
applies when the following requisites concur: (1) the succession
has not yet been opened; (2) the object of the contract forms part
of the inheritance; and (3) the promissor has, with respect to the
object, an expectancy of a right which is purely hereditary in
nature.18
In this case, at the time the deed was executed, Faustina’s will
was not yet probated; the object of the contract, the 9,000 square
meter property, still formed part of the inheritance of his father
from the estate of Faustina; and Domingo had a mere inchoate
hereditary right therein.
1âwphi1
Domingo became the owner of the said property only on August
1, 1994, the time of execution of the Deed of Extrajudicial
Succession with Partition by the heirs of Faustina, when the
9,000 square meter lot was adjudicated to him.
The CA, therefore, did not err in declaring the March 5, 1975
Deed of Sale null and void.
Domingo’s status as an heir of Faustina by right of representation
being undisputed, the RTC should have maintained the validity of
TCT No. 266583 covering the 9,000 square meter subject
property. As correctly concluded by the CA, this served as the
inheritance of Domingo from Faustina.
Regarding the deed of sale covering the remaining 4,500 square
meters of the subject property executed in favor of Renato Tabu,
it is evidently null and void. The document itself, the Deed of
Absolute Sale, dated October 8, 1996, readily shows that it was
executed on August 4, 1996 more than two months after the
death of Domingo. Contracting parties must be juristic entities at
the time of the consummation of the contract. Stated otherwise, to
form a valid and legal agreement it is necessary that there be a
party capable of contracting and a party capable of being
contracted with. Hence, if any one party to a supposed contract
was already dead at the time of its execution, such contract is
undoubtedly simulated and false and, therefore, null and void by
reason of its having been made after the death of the party who
appears as one of the contracting parties therein. The death of a
person terminates contractual capacity.19
The contract being null and void, the sale to Renato Tabu
produced no legal effects and transmitted no rights whatsoever.
Consequently, TCT No. 286484 issued to Tabu by virtue of the
October 8, 1996 Deed of Sale, as well as its derivative titles, TCT
Nos. 291338 and 291339, both registered in the name of Rena to
Tabu, married to Dolores Laxamana, are likewise void.
The CA erred in deleting that portion in the RTC decision
declaring the Deed of Absolute Sale, dated October 8, 1996, null
and void and canceling TCT Nos. 291338 and 291339.
WHEREFORE, the petition is partially GRANTED. The decretal
portion of the June 16, 2009 Decision of the Court of Appeals is
hereby MODIFIED to read as follows:
1. The Deed of Absolute Sale, dated March 5, 1975,
executed by Domingo Laxamana in favor of Laureano
Cabalu, is hereby declared as null and void.
2. The Deed of Absolute Sale, dated October 8, 1996,
executed by Domingo Laxamana in favor of Renato Tabu,
and TCT No. 286484 as well as the derivative titles TCT
Nos. 291338 and 291339, both registered in the name of
Renato Tabu, married to Dolores Laxamana, are hereby
declared null and void and cancelled.
3. TCT No. 281353 in the name of Domingo Laxamana is
hereby ordered restored subject to the partition by his
lawful heirs.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-41715 June 18, 1976
ROSALIO BONILLA (a minor) SALVACION BONILLA (a
minor) and PONCIANO BONILLA (their father) who
represents the minors, petitioners,
vs.
LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA
BARCENA, MANUEL BARCENA, AGUSTINA NERI, widow of
JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the
Court of First Instance of Abra, respondents.
Federico Paredes for petitioners.
Demetrio V. Pre for private respondents.
MARTIN, J:
This is a petition for review 1 of the Order of the Court of First
Instance of Abra in Civil Case No. 856, entitled Fortunata
Barcena vs. Leon Barcena, et al., denying the motions for
reconsideration of its order dismissing the complaint in the
aforementioned case.
On March 31, 1975 Fortunata Barcena, mother of minors Rosalio
Bonilla and Salvacion Bonilla and wife of Ponciano Bonilla,
instituted a civil action in the Court of First Instance of Abra, to
quiet title over certain parcels of land located in Abra.
On May 9, 1975, defendants filed a written motion to dismiss the
complaint, but before the hearing of the motion to dismiss, the
counsel for the plaintiff moved to amend the complaint in order to
include certain allegations therein. The motion to amend the
complaint was granted and on July 17, 1975, plaintiffs filed their
amended complaint.
On August 4, 1975, the defendants filed another motion to
dismiss the complaint on the ground that Fortunata Barcena is
dead and, therefore, has no legal capacity to sue. Said motion to
dismiss was heard on August 14, 1975. In said hearing, counsel
for the plaintiff confirmed the death of Fortunata Barcena, and
asked for substitution by her minor children and her husband, the
petitioners herein; but the court after the hearing immediately
dismissed the case on the ground that a dead person cannot be a
real party in interest and has no legal personality to sue.
On August 19, 1975, counsel for the plaintiff received a copy of
the order dismissing the complaint and on August 23, 1975, he
moved to set aside the order of the dismissal pursuant to
Sections 16 and 17 of Rule 3 of the Rules of Court. 2
On August 28, 1975, the court denied the motion for
reconsideration filed by counsel for the plaintiff for lack of merit.
On September 1, 1975, counsel for deceased plaintiff filed a
written manifestation praying that the minors Rosalio Bonilla and
Salvacion Bonilla be allowed to substitute their deceased mother,
but the court denied the counsel's prayer for lack of merit. From
the order, counsel for the deceased plaintiff filed a second motion
for reconsideration of the order dismissing the complaint claiming
that the same is in violation of Sections 16 and 17 of Rule 3 of the
Rules of Court but the same was denied.
Hence, this petition for review.
The Court reverses the respondent Court and sets aside its order
dismissing the complaint in Civil Case No. 856 and its orders
denying the motion for reconsideration of said order of dismissal.
While it is true that a person who is dead cannot sue in court, yet
he can be substituted by his heirs in pursuing the case up to its
completion. The records of this case show that the death of
Fortunata Barcena took place on July 9, 1975 while the complaint
was filed on March 31, 1975. This means that when the complaint
was filed on March 31, 1975, Fortunata Barcena was still alive,
and therefore, the court had acquired jurisdiction over her person.
If thereafter she died, the Rules of Court prescribes the procedure
whereby a party who died during the pendency of the proceeding
can be substituted. Under Section 16, Rule 3 of the Rules of
Court "whenever a party to a pending case dies ... it shall be the
duty of his attorney to inform the court promptly of such death ...
and to give the name and residence of his executor,
administrator, guardian or other legal representatives." This duty
was complied with by the counsel for the deceased plaintiff when
he manifested before the respondent Court that Fortunata
Barcena died on July 9, 1975 and asked for the proper
substitution of parties in the case. The respondent Court,
however, instead of allowing the substitution, dismissed the
complaint on the ground that a dead person has no legal
personality to sue. This is a grave error. Article 777 of the Civil
Code provides "that the rights to the succession are transmitted
from the moment of the death of the decedent." From the moment
of the death of the decedent, the heirs become the absolute
owners of his property, subject to the rights and obligations of the
decedent, and they cannot be deprived of their rights thereto
except by the methods provided for by law. 3 The moment of
death is the determining factor when the heirs acquire a definite
right to the inheritance whether such right be pure or
contingent. 4 The right of the heirs to the property of the deceased
vests in them even before judicial declaration of their being heirs
in the testate or intestate proceedings. 5 When Fortunata
Barcena, therefore, died her claim or right to the parcels of land in
litigation in Civil Case No. 856, was not extinguished by her death
but was transmitted to her heirs upon her death. Her heirs have
thus acquired interest in the properties in litigation and became
parties in interest in the case. There is, therefore, no reason for
the respondent Court not to allow their substitution as parties in
interest for the deceased plaintiff.
Under Section 17, Rule 3 of the Rules of Court "after a party dies
and the claim is not thereby extinguished, the court shall order,
upon proper notice, the legal representative of the deceased to
appear and be substituted for the deceased, within such time as
may be granted ... ." The question as to whether an action
survives or not depends on the nature of the action and the
damage sued for. 6 In the causes of action which survive the
wrong complained affects primarily and principally property and
property rights, the injuries to the person being merely incidental,
while in the causes of action which do not survive the injury
complained of is to the person, the property and rights of property
affected being incidental. 7 Following the foregoing criterion the
claim of the deceased plaintiff which is an action to quiet title over
the parcels of land in litigation affects primarily and principally
property and property rights and therefore is one that survives
even after her death. It is, therefore, the duty of the respondent
Court to order the legal representative of the deceased plaintiff to
appear and to be substituted for her. But what the respondent
Court did, upon being informed by the counsel for the deceased
plaintiff that the latter was dead, was to dismiss the complaint.
This should not have been done for under the same Section 17,
Rule 3 of the Rules of Court, it is even the duty of the court, if the
legal representative fails to appear, to order the opposing party to
procure the appointment of a legal representative of the
deceased. In the instant case the respondent Court did not have
to bother ordering the opposing party to procure the appointment
of a legal representative of the deceased because her counsel
has not only asked that the minor children be substituted for her
but also suggested that their uncle be appointed as guardian ad
litem for them because their father is busy in Manila earning a
living for the family. But the respondent Court refused the request
for substitution on the ground that the children were still minors
and cannot sue in court. This is another grave error because the
respondent Court ought to have known that under the same
Section 17, Rule 3 of the Rules of Court, the court is directed to
appoint a guardian ad litem for the minor heirs. Precisely in the
instant case, the counsel for the deceased plaintiff has suggested
to the respondent Court that the uncle of the minors be appointed
to act as guardian ad litem for them. Unquestionably, the
respondent Court has gravely abused its discretion in not
complying with the clear provision of the Rules of Court in
dismissing the complaint of the plaintiff in Civil Case No. 856 and
refusing the substitution of parties in the case.

IN VIEW OF THE FOREGOING, the order of the respondent

Court dismissing the complaint in Civil Case No. 856 of the Court
of First Instance of Abra and the motions for reconsideration of
the order of dismissal of said complaint are set aside and the
respondent Court is hereby directed to allow the substitution of
the minor children, who are the petitioners therein for the
deceased plaintiff and to appoint a qualified person as
guardian ad litem for them. Without pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Esguerra and Muñoz Palma,

JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-25952 June 30, 1967
MARGARITA SALVADOR, in her own behalf and as Attorney-
in-fact of CANDIDA SALVADOR, ET AL.,petitioners,
vs.
THE HON. JUDGE ANDRES STA. MARIA, DOMINADOR
CARDENAS, REMEDIOS CABRERA, ALBERTO M. K. JAMIR
and SIMEON ENRIQUEZ, respondents.
Arturo Joaquin for petitioners.
Pelaez, Jalandoni and Jamir and S. V. Enriquez, for respondent
Simeon Enriquez.
C. E. Medina and J. M. Locsin for respondent Philippine National
Bank.
Bala and Enriquez for the other respondents.
BENGZON, J.P., J.:
Seven parcels of titled land and two parcels of untitled land,
situated in Bigaa, Bulacan, were owned by Celestino Salvador. In
1941, he executed a deed of sale over them in favor of the
spouses Alfonso Salvador and Anatolia Halili. Alleging that the
sale was void for lack of consideration, he filed on May 12,1955,
against said vendees, a suit for reconveyance of said parcels of
land (CFI of Bulacan, Br. I, Civil Case No. 1082).
On April 27, 1956, Celestino Salvador died, testate. As his
alleged heirs, twenty-one persons1 were on May 18, 1956
substituted as plaintiffs in the action for reconveyance. And
meanwhile, special proceedings for the probate of his will and for
letters testamentary was instituted (CFI of Bulacan, Br. II, Sp.
Proceedings No. 940). In said proceedings, Dominador Cardenas
was appointed on June 11, 1956 special administrator of
Celestino Salvador's testate estate. 1äwphï1.ñët
On September 4, 1956 the administrator filed in Sp. Proceedings
No. 940 an inventory of properties of the estate, covering the
same parcels of land subject matter of the reconveyance action.
On September 7, 1956, Celestino Salvador's will was admitted to
probate and Dominador Cardenas was appointed executor of
said will. Actual issuance of letters testamentary to him was made
on October 27, 1956.
Twenty-three (23) persons were instituted heirs in the will. Of
these, nine (9) were not among the twenty-one (21) alleged
relatives substituted in the reconveyance case; and of the twenty-
one (21) substituted alleged heirs seven (7) were not instituted in
the will. 2
In the suit for reconveyance, on November 26, 1956, the Court
(CFI of Bulacan, Br. I) rendered judgment, ordering the
defendants therein (the spouses Alfonso and Anatolia), to
reconvey the parcels of land to the estate of Celestino Salvador.
Appeal therefrom to the Court of Appeals was interposed by said
defendants. 1äwphï1.ñët
On August 12, 1961, the Court of Appeals affirmed the
reconveyance judgment, with the correction that reconveyance
be in favor of the twenty-one (21) heirs substituted as plaintiffs
therein.
About three years later, pursuant to an order of the CFI of
Bulacan, Br. II, in the testacy proceedings, dated April 21, 1964,
one of the parcels of land involved, Lot 6, was sold so that with its
proceeds debtors who filed claims may be paid. The Philippine
National Bank bought it at P41,184.00. Said amount was then
deposited in the same bank by the administrator, subject to Court
order.
On December 18, 1964, defendants in the suit for reconveyance
executed a deed of reconveyance over the subject parcels of
land, in favor of Celestino Salvador's estate. Revoking the same
as lot in accordance with the final judgment therein, the CFI of
Bulacan, Br. I, on September 24, 1965, ordered a new deed of
reconveyance to be executed, in favor of the twenty-one persons
substituted as plaintiffs in that action. Accordingly, on September
30, 1965, a new deed of reconveyance was made, in favor of said
twenty-one (21) persons as heirs of Celestino.
Following this, on November 22, 1965, said Br. I, ordered the
corresponding title certificate (TCT No. 54639) in the
administrator's name, cancelled; new title certificate to be issued
in the names of the same twenty-one (21) persons. Said order
was carried out, and TCT No. 63734 was issued in the names of
the twenty-one persons. 3
On December 7, 1965, Br. I (reconveyance court) ordered the
Philippine National Bank to release the P41,184.00 proceeds of
the sale of Lot 6, to the twenty-one (21) plaintiffs in the
reconveyance case. Apparently, although the passbook was
given by the administrator to said twenty-one persons, no release
was made, as the Philippine National Bank awaited Br. II's order.
Br. II, on March 1, 1966, approved the following claims against
the estate:
Taxes — Nat'l. gov't P5,328.23
Atty's fees — Atty. Enriquez 8,000.00
Atty's fees — Atty. Jamir 12,000.00
Loan — R. Cabrera 13,544.35
TOTAL........
38,872.58
=========
On March 30, 1966, said Br. II (probate court), ordered return of
the passbook to the administrator; and release to the
administrator by the PNB of the P41,184.00, or so much thereof
is needed to pay the afore-stated debts of the estate.
After failing to get reconsideration of said order, the twenty-one
(21) substituted heirs, on April 25, 1966, filed with Us the present
special civil action for certiorari with preliminary injunction to
assail the order to pay the debts of the estate with the P41,184.00
proceeds of the sale of Lot 6; and to question Br. II's (probate
court) power to dispose of the parcels of land involved in the
reconveyance suit in Br. I.
Raised are these issues: (1) Are the parcels of land and the
proceeds of the sale of one of them, properties of the estate or
not? (2) Does final judgment in the reconveyance suit in favor of
the twenty-one so-called heirs who substituted Celestino
Salvador, bar the disposition of the reconveyed properties by the
settlement court?
It is a settled point of law that the right of heirs to specific,
distributive shares of inheritance does not become finally
determinable until all the debts of the estate are paid. Until then,
in the face of said claims, their rights cannot be enforced, are
inchoate, and subject to the existence of a residue after payment
of the debts (Castellvi de Raquiza v. Castellvi, L-17630, October
31, 1963; Jimoga-on v. Belmonte, 84 Phil. 545; Sec. 1, Rule 90,
Rules of Court).
Petitioners do not question the existence of the debts
abovementioned. They only contend that the properties involved
having been ordered by final judgment reconveyed to them, not to
the estate the same are not properties of the estate but their own,
and thus, not liable for debts of the estate.

Said contention is self-refuting. Petitioners rely for their rights on

their alleged character as heirs of Celestino; as such, they were
substituted in the reconveyance case; the reconveyance to them
was reconveyance to them as heirs of Celestino Salvador. It
follows that the properties they claim are, even by their own
reasoning, part of Celestino's estate. The right thereto as
allegedly his heirs would arise only if said parcels of land are part
of the estate of Celestino, not otherwise. Their having received
the same, therefore, in the reconveyance action, was perforce in
trust for the estate, subject to its obligations. They cannot
distribute said properties among themselves as substituted heirs
without the debts of the estate being first satisfied.

At any rate, the proceeds of Lot 6 alone (P41,184.00) appears

more than sufficient to pay the debt (P38,872.58); and there will
remain the other parcels of land not sold. As to the question of
who will receive how much as heirs, the same is properly
determinable by the settlement court, after payment of the debts
(Pimentel v. Palanca, 5 Phil. 436; Maningat v. Castillo, 75 Phil.
532; Jimoga-on v. Belmonte, supra).

Wherefore, the petition for certiorari is denied, without costs. So

ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar

Sanchez and Castro JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-25049 August 30, 1968
FILEMON RAMIREZ, MONICA RAMIREZ, and JOSE
EGUARAS, plaintiffs-appellants,
vs.
ARTEMIO BALTAZAR, ET AL., defendants-appellees.
Eduardo M. Peralta for plaintiffs-appellants.
Tomas P. Anonuevo for defendants-appellees Artemio Baltazar
and Susana Flores.
Tirso Caballero for defendant-appellee Artemio Diawan.
ANGELES, J.:
On appeal from an order dismissing the complaint, on motion to
dismiss, in Civil Case No. SC-319 of the Court of First Instance of
Laguna.
It appears that on 6 January 1959, Victoriana Eguaras single,
made and executed a real estate mortgage over a parcel of land,
owned by her in fee simple, as security for a loan of P2,170.00 in
favor of the spouses Artemio Baltazar and Susana Flores.
Upon the demise of the mortgagor, the mortgagees, as creditors
of the deceased, on 16 September 1960 filed a petition for the
intestate proceedings of her estate, in the Court of First Instance
of Laguna, docketed as Civil Case No. SC-99 wherein said
mortgages, as petitioners, alleged that Filemon Ramirez and
Monica Ramirez are the heirs of the deceased. Filemon Ramirez
was appointed administrator of the estate; however, having failed
to qualify, on 16 January 1961, the court appointed Artemio
Diawan, then a deputy clerk of court, administrator of the estate
who, in due time, qualified for the office.
On 19 April 1961, the mortgagees, Artemio Baltazar and Susana
Flores, filed a complaint for foreclosure of the aforesaid
mortgage, against Artemio Diawan, in his capacity as
administrator of the estate, docketed as Civil Case No. SC-292 of
the Court of First Instance of Laguna. The defendant-
administrator was duly served with summons but he failed to
answer, whereupon, on petition of the plaintiffs said defendant
was declared in default. The case was referred to a commissioner
to receive the evidence for the plaintiffs, and defendant-
administrator, as deputy clerk of court, acted as such hearing
commissioner.
1äwphï1.ñët
On 16 August 1961, decision was rendered decreeing the
foreclosure of the mortgaged property and the sale thereof, if,
within ninety days from finality of the decision, the obligation was
not fully paid. The judgment not having been satisfied, a writ of
execution was issued for the sale of the mortgaged property, and
after compliance with the requirements of the law regarding the
sending, posting and publication of the notice of sale, the Sheriff
sold the property at public auction to the highest bidder, who
happened to be the plaintiffs themselves, for the sum of
P2,888.50 covering the amount of the judgment, plus the
expenses of the sale and the Sheriff's fees. On petition of the
plaintiffs, the sale was confirmed by the court on 26 January
1962.
On 6 February 1962, Filemon Ramirez, Monica Ramirez and
Jose Eguaras, the first two being the heirs named in the petition
for intestate proceedings, filed a complaint designated "For the
Annulment of all Proceedings in said Civil Case No. SC-292 for
the Foreclosure of the Mortgage", against the spouses Artemio
Baltazar and Susana Flores, and Artemio Diawan, in his capacity
as administrator of the estate of Victoriana Eguaras, deceased,
and Silverio Talabis, in his capacity as deputy provincial sheriff of
Laguna, docketed as Civil Case No. SC-319 of the Court of First
Instance of Laguna.
The facts hereinabove narrated are, succinctly, contained in the
complaint in said Civil Case No. SC-319, with the additional
averments that the defendant Diawan, the deputy clerk of court
appointed as administrator of the intestate estate of the
deceased, acted in collusion with the other defendants Artemio
Baltazar and Susana Flores, deliberately and in fraud of the
plaintiffs: (a) in allowing the reglementary period within which to
file an answer to lapse without notifying and/or informing the said
plaintiffs of the complaint for foreclosure, as a result of which he
was declared in default to the prejudice of the estate which he
represents; (b) that had the plaintiffs (Monica and Filemon) been
notified of the pendency of the case, the defendant administrator
could have interposed a counterclaim because payment in the
sum of P1,548.52 had been made and received by the
mortgagees on account of the debt; (c) in presiding as hearing
officer in the ex parte hearing in Civil Case No. 292, to receive
evidence for plaintiffs therein, notwithstanding the fact that there
was another deputy clerk of court available who could have acted
in his stead, as a result of which an anomalous situation was
created whereby he was a defendant and at the same time a
commissioner receiving evidence against himself as
administrator; (d) in allowing judgment to become final without
notifying the plaintiffs; (e) in deliberately, allowing the 90-day
period within which to make payment to expire without notifying
the heirs, as a result of which the said heirs were not afforded an
opportunity to make payments ordered by the Court in its
decision; and (f) in refusing to help the heirs seek postponement
of the auction sale. It is also alleged that it was only when the
property foreclosed was published for sale at public auction that
the heirs came to know about the foreclosure proceedings.
The defendants spouses, Artemio Baltazar and Susana Flores,
filed a motion to dismiss the complaint on the ground that the
plaintiffs have no legal capacity to sue; defendant Diawan
likewise moved to dismiss on two grounds: that plaintiffs have no
legal capacity to sue and that the complaint states no cause of
action.1äwphï1.ñët
Despite vigorous opposition interposed by the plaintiffs against
the aforesaid motions to dismiss, the court, on 13 March 1962,
dismissed the complaint with costs against the plaintiffs,
reasoning thus: that "upon consideration of the evidence, said
defendant could not have offered any evidence to avoid the
foreclosure of the mortgage which the Court found to be in order.
Under the circumstances and with the apparent disinterestedness
of Filemon and Rolando to qualify as administrator when
appointed, there could not have been any connivance and/or
collusion between plaintiffs in this case and Artemio Diawan as
administrator"; and that plaintiffs have no legal capacity to sue
since their status as legal heirs of the deceased has yet to be
determined precisely in Special Proceeding No. SC-99, and until
such status is so fixed by the Court, they have no cause of action
against defendants.
In that order of 13 March 1962, the court also denied plaintiffs'
petition for the issuance of a writ of preliminary injunction to
enjoin defendants from entering and taking physical possession
of the land in question on the ground "that possession thereof
was effected and delivered by the Provincial Sheriff to Artemio
Baltazar and Susana Flores on February, 1962."
Reconsideration of the aforesaid order having been denied, the
plaintiffs took the present appeal where they assigned the
following errors: (1) in holding that plaintiffs-appellants have no
legal capacity to sue until their status as legal heirs of the
deceased is determined in Special Proceeding No. SC-99; (2) in
ruling that there was no collusion or connivance among the
defendants-appellees, despite the fact that the issue in the motion
to dismiss is purely legal, not factual; and (3) in denying the
petition for a writ of preliminary injunction.
At the outset, let it be remembered that the defendants-appellees,
in availing themselves of the defense that the plaintiffs-appellants
had not been declared to be the heirs of the deceased Victoriana
Eguaras, have overlooked the fact that the (defendants-
appellees) themselves in their petition for intestate proceedings
(Case SC-99) have alleged that Filemon Ramirez and Monica
Ramirez, two of herein plaintiffs-appellants, are the heirs of the
deceased. Insofar as defendants-appellees are concerned, it is
our opinion that they are estopped from questioning the heirship
of these two named persons to the estate of the deceased.
There is no question that the rights to succession are
automatically transmitted to the heirs from the moment of the
death of the decedent.1 While, as a rule, the formal declaration or
recognition to such successional rights needs judicial
confirmation, this Court has, under special circumstances,
protected these rights from encroachments made or attempted
before the judicial declaration.2 In Pascual vs. Pascual,3 it was
ruled that although heirs have no legal standing in court upon the
commencement of testate or intestate proceedings, this rule
admits of an exception as "when the administrator fails or refuses
to act in which event the heirs may act in his place."
A similar situation obtains in the case at bar. The administrator is
being charged to have been in collusion and connivance with the
mortgagees of a property of the deceased, allowing its
foreclosure without notifying the heirs, to the prejudice of the
latter. Since the ground for the present action to annul the
aforesaid foreclosure proceedings is the fraud resulting from such
insidious machinations and collusion in which the administrator
has allegedly participated, it would be farfetched to expect the
said administrator himself to file the action in behalf of the estate.
And who else but the heirs, who have an interest to assert and to
protect, would bring the action? Inevitably, this case should fall
under the exception, rather than the general rule that pending
proceedings for the settlement of the estate, the heirs have no
right to commence an action arising out of the rights belonging to
the deceased.
On the second point raised, We fully agree with the plaintiffs-
appellants that the lower court had gone too far in practically
adjudicating the case on the merits when it made the observation
that "there could not have been any connivance and/or collusion
between plaintiffs in this case and Artemio Diawan as
administrator." A thorough scrutiny of the allegations in the
motions to dismiss filed by defendants-appellees does not
indicate that that question was ever put at issue therein. On the
other hand, the controversy — on the existence or inexistence of
collusion between the parties as a result of which judgment was
rendered against the estate — is the very core of the complaint
that was dismissed. Undoubtedly, the cause of action is based on
Section 30, Rule 132 of the Rules of Court.
We are not, however, in accord with the third assigned error —
the denial of the motion for the issuance of preliminary injunction
— for it puts at issue the factual finding made by the lower court
that the defendants had already been placed in possession of the
property. At this stage of the proceeding, and considering the
nature of the case before Us, such a question is, at this time,
beyond the competence of the Court.
PREMISES CONSIDERED, the order appealed from is hereby
set aside insofar as it dismissed the complaint in Civil Case No.
SC-319, and the records be remanded to the lower court for
further proceedings. Costs against defendants-appellees. The
Clerk of Court is directed to furnish a copy of this decision to the
Department of Justice for its information.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar,
Sanchez, Castro and Fernando, JJ., concur.
G.R. No. 177066 September 11, 2009
JOSELITO MUSNI PUNO (as heir of the late Carlos
Puno), Petitioner,
vs.
PUNO ENTERPRISES, INC., represented by JESUSA
PUNO, Respondent.
DECISION
NACHURA, J.:
Upon the death of a stockholder, the heirs do not automatically
become stockholders of the corporation; neither are they
mandatorily entitled to the rights and privileges of a stockholder.
This, we declare in this petition for review on certiorari of the
Court of Appeals (CA) Decision1 dated October 11, 2006 and
Resolution dated March 6, 2007 in CA-G.R. CV No. 86137.
The facts of the case follow:
Carlos L. Puno, who died on June 25, 1963, was an incorporator
of respondent Puno Enterprises, Inc. On March 14, 2003,
petitioner Joselito Musni Puno, claiming to be an heir of Carlos L.
Puno, initiated a complaint for specific performance against
respondent. Petitioner averred that he is the son of the deceased
with the latter’s common-law wife, Amelia Puno. As surviving heir,
he claimed entitlement to the rights and privileges of his late
father as stockholder of respondent. The complaint thus prayed
that respondent allow petitioner to inspect its corporate book,
render an accounting of all the transactions it entered into from
1962, and give petitioner all the profits, earnings, dividends, or
income pertaining to the shares of Carlos L. Puno.2
Respondent filed a motion to dismiss on the ground that petitioner
did not have the legal personality to sue because his birth
certificate names him as "Joselito Musni Muno." Apropos, there
was yet a need for a judicial declaration that "Joselito Musni
Puno" and "Joselito Musni Muno" were one and the same.
The court ordered that the proceedings be held in abeyance,
ratiocinating that petitioner’s certificate of live birth was no proof
of his paternity and relation to Carlos L. Puno.
Petitioner submitted the corrected birth certificate with the name
"Joselito M. Puno," certified by the Civil Registrar of the City of
Manila, and the Certificate of Finality thereof. To hasten the
disposition of the case, the court conditionally admitted the
corrected birth certificate as genuine and authentic and ordered
respondent to file its answer within fifteen days from the order
and set the case for pretrial.3
On October 11, 2005, the court rendered a Decision, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering Jesusa
Puno and/or Felicidad Fermin to allow the plaintiff to inspect the
corporate books and records of the company from 1962 up to the
present including the financial statements of the corporation.
The costs of copying shall be shouldered by the plaintiff. Any
expenses to be incurred by the defendant to be able to comply
with this order shall be the subject of a bill of costs.
SO ORDERED.4
On appeal, the CA ordered the dismissal of the complaint in its
Decision dated October 11, 2006. According to the CA, petitioner
was not able to establish the paternity of and his filiation to Carlos
L. Puno since his birth certificate was prepared without the
intervention of and the participatory acknowledgment of paternity
by Carlos L. Puno. Accordingly, the CA said that petitioner had no
right to demand that he be allowed to examine respondent’s
books. Moreover, petitioner was not a stockholder of the
corporation but was merely claiming rights as an heir of Carlos L.
Puno, an incorporator of the corporation. His action for specific
performance therefore appeared to be premature; the proper
action to be taken was to prove the paternity of and his filiation to
Carlos L. Puno in a petition for the settlement of the estate of the
latter.5
Petitioner’s motion for reconsideration was denied by the CA in its
Resolution6 dated March 6, 2007.
In this petition, petitioner raises the following issues:
I. THE HONORABLE COURT OF APPEALS ERRED IN NOT
RULING THAT THE JOSELITO PUNO IS ENTITLED TO THE
RELIEFS DEMANDED HE BEING THE HEIR OF THE LATE
CARLOS PUNO, ONE OF THE INCORPORATORS [OF]
RESPONDENT CORPORATION.
II. HONORABLE COURT OF APPEALS ERRED IN RULING
THAT FILIATION OF JOSELITO PUNO, THE PETITIONER[,] IS
NOT DULY PROVEN OR ESTABLISHED.
III. THE HONORABLE COURT ERRED IN NOT RULING THAT
JOSELITO MUNO AND JOSELITO PUNO REFERS TO THE
ONE AND THE SAME PERSON.
IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT
RULING THAT WHAT RESPONDENT MERELY DISPUTES IS
THE SURNAME OF THE PETITIONER WHICH WAS
MISSPELLED AND THE FACTUAL ALLEGATION E.G. RIGHTS
OF PETITIONER AS HEIR OF CARLOS PUNO ARE DEEMED
ADMITTED HYPOTHETICALLY IN THE RESPONDENT[’S]
MOTION TO DISMISS.
V. THE HONORABLE COURT OF APPEALS THEREFORE
ERRED I[N] DECREEING THAT PETITIONER IS NOT
ENTITLED TO INSPECT THE CORPORATE BOOKS OF
DEFENDANT CORPORATION.7
The petition is without merit. Petitioner failed to establish the right
to inspect respondent corporation’s books and receive dividends
on the stocks owned by Carlos L. Puno.
Petitioner anchors his claim on his being an heir of the deceased
stockholder. However, we agree with the appellate court that
petitioner was not able to prove satisfactorily his filiation to the
deceased stockholder; thus, the former cannot claim to be an heir
of the latter.
Incessantly, we have declared that factual findings of the CA
supported by substantial evidence, are conclusive and
binding.8 In an appeal via certiorari, the Court may not review the
factual findings of the CA. It is not the Court’s function under Rule
45 of the Rules of Court to review, examine, and evaluate or
weigh the probative value of the evidence presented.9
A certificate of live birth purportedly identifying the putative father
is not competent evidence of paternity when there is no showing
that the putative father had a hand in the preparation of the
certificate. The local civil registrar has no authority to record the
paternity of an illegitimate child on the information of a third
person.10 As correctly observed by the CA, only petitioner’s
mother supplied the data in the birth certificate and signed the
same. There was no evidence that Carlos L. Puno acknowledged
petitioner as his son.
As for the baptismal certificate, we have already decreed that it
can only serve as evidence of the administration of the sacrament
on the date specified but not of the veracity of the entries with
respect to the child’s paternity.11
In any case, Sections 74 and 75 of the Corporation Code
enumerate the persons who are entitled to the inspection of
corporate books, thus —
Sec. 74. Books to be kept; stock transfer agent. — x x x.
The records of all business transactions of the corporation and
the minutes of any meeting shall be open to the inspection of any
director, trustee, stockholder or member of the corporation at
reasonable hours on business days and he may demand, in
writing, for a copy of excerpts from said records or minutes, at his
expense.
Sec. 75. Right to financial statements. — Within ten (10) days
from receipt of a written request of any stockholder or member,
the corporation shall furnish to him its most recent financial
statement, which shall include a balance sheet as of the end of
the last taxable year and a profit or loss of statement for said
taxable year, showing in reasonable detail its assets and liabilities
and the result of its operations.12
The stockholder’s right of inspection of the corporation’s books
and records is based upon his ownership of shares in the
corporation and the necessity for self-protection. After all, a
shareholder has the right to be intelligently informed about
corporate affairs.13 Such right rests upon the stockholder’s
underlying ownership of the corporation’s assets and property.14
Similarly, only stockholders of record are entitled to receive
dividends declared by the corporation, a right inherent in the
ownership of the shares.15
1avvphi1
Upon the death of a shareholder, the heirs do not automatically
become stockholders of the corporation and acquire the rights
and privileges of the deceased as shareholder of the corporation.
The stocks must be distributed first to the heirs in estate
proceedings, and the transfer of the stocks must be recorded in
the books of the corporation. Section 63 of the Corporation Code
provides that no transfer shall be valid, except as between the
parties, until the transfer is recorded in the books of the
corporation.16 During such interim period, the heirs stand as the
equitable owners of the stocks, the executor or administrator duly
appointed by the court being vested with the legal title to the
stock.17 Until a settlement and division of the estate is effected,
the stocks of the decedent are held by the administrator or
executor.18 Consequently, during such time, it is the administrator
or executor who is entitled to exercise the rights of the deceased
as stockholder.
Thus, even if petitioner presents sufficient evidence in this case to
establish that he is the son of Carlos L. Puno, he would still not
be allowed to inspect respondent’s books and be entitled to
receive dividends from respondent, absent any showing in its
transfer book that some of the shares owned by Carlos L. Puno
were transferred to him. This would only be possible if petitioner
has been recognized as an heir and has participated in the
settlement of the estate of the deceased.
Corollary to this is the doctrine that a determination of whether a
person, claiming proprietary rights over the estate of a deceased
person, is an heir of the deceased must be ventilated in a special
proceeding instituted precisely for the purpose of settling the
estate of the latter. The status of an illegitimate child who claims
to be an heir to a decedent’s estate cannot be adjudicated in an
ordinary civil action, as in a case for the recovery of
property.19 The doctrine applies to the instant case, which is one
for specific performance — to direct respondent corporation to
allow petitioner to exercise rights that pertain only to the
deceased and his representatives.
WHEREFORE, premises considered, the petition is DENIED. The
Court of Appeals Decision dated October 11, 2006 and
Resolution dated March 6, 2007 are AFFIRMED.
SO ORDERED.
G.R. No. 165744 August 11, 2008
OSCAR C. REYES, petitioner,
vs.
HON. REGIONAL TRIAL COURT OF MAKATI, Branch 142,
ZENITH INSURANCE CORPORATION, and RODRIGO C.
REYES, respondents.
DECISION
BRION, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of
Court seeks to set aside the Decision of the Court of Appeals
1
(CA) promulgated on May 26, 2004 in CA-G.R. SP No. 74970. The
CA Decision affirmed the Order of the Regional Trial Court (RTC),
2
Branch 142, Makati City dated November 29, 2002 in Civil Case No.
00-1553 (entitled "Accounting of All Corporate Funds and Assets,
and Damages") which denied petitioner Oscar C. Reyes’ (Oscar)
Motion to Declare Complaint as Nuisance or Harassment Suit.
BACKGROUND FACTS
Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of
the four children of the spouses Pedro and Anastacia Reyes. Pedro,
Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith
Insurance Corporation (Zenith), a domestic corporation established
by their family. Pedro died in 1964, while Anastacia died in 1993.
Although Pedro’s estate was judicially partitioned among his heirs
sometime in the 1970s, no similar settlement and partition appear to
have been made with Anastacia’s estate, which included her
shareholdings in Zenith. As of June 30, 1990, Anastacia owned
136,598 shares of Zenith; Oscar and Rodrigo owned 8,715,637 and
3
4,250 shares, respectively.
4
On May 9, 2000, Zenith and Rodrigo filed a complaint with the
Securities and Exchange Commission (SEC) against Oscar,
docketed as SEC Case No. 05-00-6615. The complaint stated that it
is "a derivative suit initiated and filed by the complainant Rodrigo C.
Reyes to obtain an accounting of the funds and assets of
ZENITH INSURANCE CORPORATION which are now or formerly in
the control, custody, and/or possession of respondent [herein
petitioner Oscar] and to determine the shares of stock of
deceased spouses Pedro and Anastacia Reyes that were
arbitrarily and fraudulently appropriated [by Oscar] for himself [and]
which were not collated and taken into account in the partition,
distribution, and/or settlement of the estate of the deceased spouses,
for which he should be ordered to account for all the income from the
time he took these shares of stock, and should now deliver to his
5
brothers and sisters their just and respective shares." [Emphasis
supplied.]
6
In his Answer with Counterclaim, Oscar denied the charge that he
illegally acquired the shares of Anastacia Reyes. He asserted, as a
defense, that he purchased the subject shares with his own funds
from the unissued stocks of Zenith, and that the suit is not a bona
fide derivative suit because the requisites therefor have not been
complied with. He thus questioned the SEC’s jurisdiction to entertain
the complaint because it pertains to the settlement of the estate of
Anastacia Reyes.
7
When Republic Act (R.A.) No. 8799 took effect, the SEC’s exclusive
and original jurisdiction over cases enumerated in Section 5 of
Presidential Decree (P.D.) No. 902-A was transferred to the RTC
8
designated as a special commercial court. The records of Rodrigo’s
SEC case were thus turned over to the RTC, Branch 142, Makati,
and docketed as Civil Case No. 00-1553.
On October 22, 2002, Oscar filed a Motion to Declare Complaint as
9
Nuisance or Harassment Suit. He claimed that the complaint is a
mere nuisance or harassment suit and should, according to the
Interim Rules of Procedure for Intra-Corporate Controversies, be
dismissed; and that it is not a bona fide derivative suit as it partakes
of the nature of a petition for the settlement of estate of the deceased
Anastacia that is outside the jurisdiction of a special commercial
court. The RTC, in its Order dated November 29, 2002 (RTC Order),
denied the motion in part and declared:
 A close reading of the Complaint disclosed the presence of
two (2) causes of action, namely: a) a derivative suit for
accounting of the funds and assets of the corporation which
are in the control, custody, and/or possession of the
respondent [herein petitioner Oscar] with prayer to appoint a
management committee; and b) an action for determination
of the shares of stock of deceased spouses Pedro and
Anastacia Reyes allegedly taken by respondent, its
accounting and the corresponding delivery of these shares to
the parties’ brothers and sisters. The latter is not a derivative
suit and should properly be threshed out in a petition for
settlement of estate.
Accordingly, the motion is denied. However, only the
derivative suit consisting of the first cause of action will be
taken cognizance of by this Court.
10
Oscar thereupon went to the CA on a petition for certiorari,
11
prohibition, and mandamus and prayed that the RTC Order be
annulled and set aside and that the trial court be prohibited from
continuing with the proceedings. The appellate court affirmed the
RTC Order and denied the petition in its Decision dated May 26,
2004. It likewise denied Oscar’s motion for reconsideration in a
Resolution dated October 21, 2004.
Petitioner now comes before us on appeal through a petition for
review on certiorari under Rule 45 of the Rules of Court.
ASSIGNMENT OF ERRORS
Petitioner Oscar presents the following points as conclusions the CA
should have made:
1. that the complaint is a mere nuisance or harassment suit that
should be dismissed under the Interim Rules of Procedure of Intra-
Corporate Controversies; and
2. that the complaint is not a bona fide derivative suit but is in fact in
the nature of a petition for settlement of estate; hence, it is outside
the jurisdiction of the RTC acting as a special commercial court.
Accordingly, he prays for the setting aside and annulment of the CA
decision and resolution, and the dismissal of Rodrigo’s complaint
before the RTC.
THE COURT’S RULING
We find the petition meritorious.
The core question for our determination is whether the trial court,
sitting as a special commercial court, has jurisdiction over the subject
matter of Rodrigo’s complaint. To resolve it, we rely on the judicial
principle that "jurisdiction over the subject matter of a case is
conferred by law and is determined by the allegations of the
complaint, irrespective of whether the plaintiff is entitled to all or
12
some of the claims asserted therein."
JURISDICTION OF SPECIAL COMMERCIAL COURTS
P.D. No. 902-A enumerates the cases over which the SEC (now the
RTC acting as a special commercial court) exercises exclusive
jurisdiction:
SECTION 5. In addition to the regulatory and adjudicative
functions of the Securities and Exchange Commission over
corporations, partnership, and other forms of associations
registered with it as expressly granted under existing laws
and decrees, it shall have original and exclusive jurisdiction
to hear and decide cases involving:
a) Devices or schemes employed by or any acts of
the board of directors, business associates, its
officers or partners, amounting to fraud and
misrepresentation which may be detrimental to the
interest of the public and/or of the stockholders,
 partners, members of associations or organizations
registered with the Commission.
b) Controversies arising out of intra-corporate or
partnership relations, between and among
stockholders, members, or associates; between any
or all of them and the corporation, partnership or
association of which they are stockholders,
members, or associates, respectively; and between
such corporation, partnership or association and the
State insofar as it concerns their individual franchise
or right to exist as such entity; and
c) Controversies in the election or appointment of
directors, trustees, officers, or managers of such
corporations, partnerships, or associations.
The allegations set forth in Rodrigo’s complaint principally invoke
Section 5, paragraphs (a) and (b) above as basis for the exercise of
the RTC’s special court jurisdiction. Our focus in examining the
allegations of the complaint shall therefore be on these two
provisions.
Fraudulent Devices and Schemes
The rule is that a complaint must contain a plain, concise, and direct
statement of the ultimate facts constituting the plaintiff’s cause of
13
action and must specify the relief sought. Section 5, Rule 8 of the
Revised Rules of Court provides that in all averments of fraud or
mistake, the circumstances constituting fraud or mistake must
14
be stated with particularity. These rules find specific application to
Section 5(a) of P.D. No. 902-A which speaks of corporate devices or
schemes that amount to fraud or misrepresentation detrimental to the
public and/or to the stockholders.
In an attempt to hold Oscar responsible for corporate fraud, Rodrigo
alleged in the complaint the following:
3. This is a complaint…to determine the shares of stock of
the deceased spouses Pedro and Anastacia Reyes that
were arbitrarily and fraudulently appropriated for himself
[herein petitioner Oscar] which were not collated and taken
into account in the partition, distribution, and/or settlement of
the estate of the deceased Spouses Pedro and Anastacia
Reyes, for which he should be ordered to account for all the
income from the time he took these shares of stock, and
should now deliver to his brothers and sisters their just and
respective shares with the corresponding equivalent amount
of P7,099,934.82 plus interest thereon from 1978
representing his obligations to the Associated Citizens’ Bank
that was paid for his account by his late mother, Anastacia
C. Reyes. This amount was not collated or taken into
account in the partition or distribution of the estate of their
late mother, Anastacia C. Reyes.
3.1. Respondent Oscar C. Reyes, through other schemes
of fraud including misrepresentation, unilaterally, and
for his own benefit, capriciously transferred and took
possession and control of the management of Zenith
Insurance Corporation which is considered as a family
corporation, and other properties and businesses belonging
to Spouses Pedro and Anastacia Reyes.
xxxx
4.1. During the increase of capitalization of Zenith Insurance
Corporation, sometime in 1968, the property covered by TCT
No. 225324 was illegally and fraudulently used by
respondent as a collateral.
xxxx
5. The complainant Rodrigo C. Reyes discovered that by
some manipulative scheme, the shareholdings of their
deceased mother, Doña Anastacia C. Reyes, shares of
stocks and [sic] valued in the corporate books at
P7,699,934.28, more or less, excluding interest and/or
dividends, had been transferred solely in the name of
respondent. By such fraudulent manipulations and
misrepresentation, the shareholdings of said respondent
Oscar C. Reyes abruptly increased to P8,715,637.00 [sic]
and becomes [sic] the majority stockholder of Zenith
Insurance Corporation, which portion of said shares must be
distributed equally amongst the brothers and sisters of the
respondent Oscar C. Reyes including the complainant
herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes
and Anastacia C. Reyes valued at P7,099,934.28 were
illegally and fraudulently transferred solely to the
respondent’s [herein petitioner Oscar] name and
installed himself as a majority stockholder of
Zenith Insurance Corporation [and] thereby deprived his
brothers and sisters of their respective equal shares thereof
including complainant hereto.
xxxx
10.1 By refusal of the respondent to account of his [sic]
shareholdings in the company, he illegally and
fraudulently transferred solely in his name wherein [sic]
the shares of stock of the deceased Anastacia C. Reyes
[which] must be properly collated and/or distributed
equally amongst the children, including the complainant
Rodrigo C. Reyes herein, to their damage and prejudice.
xxxx
11.1 By continuous refusal of the respondent to account of
his [sic] shareholding with Zenith Insurance Corporation[,]
particularly the number of shares of stocks illegally and
fraudulently transferred to him from their deceased parents
Sps. Pedro and Anastacia Reyes[,] which are all subject for
collation and/or partition in equal shares among their
children. [Emphasis supplied.]
Allegations of deceit, machination, false pretenses,
misrepresentation, and threats are largely conclusions of law that,
without supporting statements of the facts to which the allegations of
fraud refer, do not sufficiently state an effective cause of
15
action. The late Justice Jose Feria, a noted authority in Remedial
Law, declared that fraud and mistake are required to be averred with
particularity in order to enable the opposing party to controvert the
16
particular facts allegedly constituting such fraud or mistake.
Tested against these standards, we find that the charges of fraud
against Oscar were not properly supported by the required factual
allegations. While the complaint contained allegations of fraud
purportedly committed by him, these allegations are not particular
enough to bring the controversy within the special commercial court’s
jurisdiction; they are not statements of ultimate facts, but are mere
conclusions of law: how and why the alleged appropriation of shares
can be characterized as "illegal and fraudulent" were not explained
nor elaborated on.
Not every allegation of fraud done in a corporate setting or
perpetrated by corporate officers will bring the case within the special
commercial court’s jurisdiction. To fall within this jurisdiction, there
must be sufficient nexus showing that the corporation’s nature,
structure, or powers were used to facilitate the fraudulent device or
scheme. Contrary to this concept, the complaint presented a reverse
situation. No corporate power or office was alleged to have facilitated
the transfer of the shares; rather, Oscar, as an individual and without
reference to his corporate personality, was alleged to have
transferred the shares of Anastacia to his name, allowing him to
become the majority and controlling stockholder of Zenith, and
eventually, the corporation’s President. This is the essence of the
complaint read as a whole and is particularly demonstrated under the
following allegations:
5. The complainant Rodrigo C. Reyes discovered that by
some manipulative scheme, the shareholdings of their
 deceased mother, Doña Anastacia C. Reyes, shares of
stocks and [sic] valued in the corporate books at
P7,699,934.28, more or less, excluding interest and/or
dividends, had been transferred solely in the name of
respondent. By such fraudulent manipulations and
misrepresentation, the shareholdings of said
respondent Oscar C. Reyes abruptly increased to
P8,715,637.00 [sic] and becomes [sic] the majority
stockholder of Zenith Insurance Corporation, which
portion of said shares must be distributed equally amongst
the brothers and sisters of the respondent Oscar C. Reyes
including the complainant herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes
and Anastacia C. Reyes valued at P7,099,934.28 were
illegally and fraudulently transferred solely to the
respondent’s [herein petitioner Oscar] name and
installed himself as a majority stockholder of
Zenith Insurance Corporation [and] thereby deprived his
brothers and sisters of their respective equal shares thereof
including complainant hereto. [Emphasis supplied.]
In ordinary cases, the failure to specifically allege the fraudulent acts
does not constitute a ground for dismissal since such defect can be
cured by a bill of particulars. In cases governed by the Interim Rules
of Procedure on Intra-Corporate Controversies, however, a bill of
17
particulars is a prohibited pleading. It is essential, therefore, for the
complaint to show on its face what are claimed to be the fraudulent
corporate acts if the complainant wishes to invoke the court’s special
commercial jurisdiction.
We note that twice in the course of this case, Rodrigo had been
given the opportunity to study the propriety of amending or
withdrawing the complaint, but he consistently refused. The court’s
function in resolving issues of jurisdiction is limited to the review of
the allegations of the complaint and, on the basis of these
allegations, to the determination of whether they are of such nature
and subject that they fall within the terms of the law defining the
court’s jurisdiction. Regretfully, we cannot read into the complaint
any specifically alleged corporate fraud that will call for the exercise
of the court’s special commercial jurisdiction. Thus, we cannot affirm
the RTC’s assumption of jurisdiction over Rodrigo’s complaint on the
18
basis of Section 5(a) of P.D. No. 902-A.
Intra-Corporate Controversy
A review of relevant jurisprudence shows a development in the
Court’s approach in classifying what constitutes an intra-corporate
controversy. Initially, the main consideration in determining whether a
dispute constitutes an intra-corporate controversy was limited to a
consideration of the intra-corporate relationship existing between or
19
among the parties. The types of relationships embraced under
Section 5(b), as declared in the case of Union Glass & Container
20
Corp. v. SEC, were as follows:
a) between the corporation, partnership, or association and
the public;
b) between the corporation, partnership, or association and
its stockholders, partners, members, or officers;
c) between the corporation, partnership, or association and
the State as far as its franchise, permit or license to operate
is concerned; and
d) among the stockholders, partners, or associates
themselves. [Emphasis supplied.]
The existence of any of the above intra-corporate relations was
sufficient to confer jurisdiction to the SEC, regardless of the subject
matter of the dispute. This came to be known as the relationship
test.
However, in the 1984 case of DMRC Enterprises v. Esta del Sol
21
Mountain Reserve, Inc., the Court introduced the nature of the
controversy test. We declared in this case that it is not the mere
existence of an intra-corporate relationship that gives rise to an intra-
corporate controversy; to rely on the relationship test alone will divest
the regular courts of their jurisdiction for the sole reason that the
dispute involves a corporation, its directors, officers, or stockholders.
We saw that there is no legal sense in disregarding or minimizing the
value of the nature of the transactions which gives rise to the
dispute.
Under the nature of the controversy test, the incidents of that
relationship must also be considered for the purpose of ascertaining
22
whether the controversy itself is intra-corporate. The controversy
must not only be rooted in the existence of an intra-corporate
relationship, but must as well pertain to the enforcement of the
parties’ correlative rights and obligations under the Corporation Code
and the internal and intra-corporate regulatory rules of the
corporation. If the relationship and its incidents are merely incidental
to the controversy or if there will still be conflict even if the
relationship does not exist, then no intra-corporate controversy
exists.
The Court then combined the two tests and declared that jurisdiction
should be determined by considering not only the status or
relationship of the parties, but also the nature of the question under
23
controversy. This two-tier test was adopted in the recent case
24
of Speed Distribution, Inc. v. Court of Appeals:
To determine whether a case involves an intra-corporate
controversy, and is to be heard and decided by the branches
of the RTC specifically designated by the Court to try and
decide such cases, two elements must concur: (a) the status
or relationship of the parties; and (2) the nature of the
question that is the subject of their controversy.
The first element requires that the controversy must arise out
of intra-corporate or partnership relations between any or all
of the parties and the corporation, partnership, or association
of which they are stockholders, members or associates;
between any or all of them and the corporation, partnership,
or association of which they are stockholders, members, or
associates, respectively; and between such corporation,
partnership, or association and the State insofar as it
concerns their individual franchises. The second element
requires that the dispute among the parties be intrinsically
connected with the regulation of the corporation. If the nature
of the controversy involves matters that are purely civil in
character, necessarily, the case does not involve an intra-
corporate controversy.
Given these standards, we now tackle the question posed for our
determination under the specific circumstances of this case:
Application of the Relationship Test
Is there an intra-corporate relationship between the parties that
would characterize the case as an intra-corporate dispute?
We point out at the outset that while Rodrigo holds shares of stock in
Zenith, he holds them in two capacities: in his own right with respect
to the 4,250 shares registered in his name, and as one of the heirs of
Anastacia Reyes with respect to the 136,598 shares registered in her
name. What is material in resolving the issues of this case under the
allegations of the complaint is Rodrigo’s interest as an heir since the
subject matter of the present controversy centers on the shares of
stocks belonging to Anastacia, not on Rodrigo’s personally-owned
shares nor on his personality as shareholder owning these shares. In
this light, all reference to shares of stocks in this case shall pertain to
the shareholdings of the deceased Anastacia and the parties’
interest therein as her heirs.
Article 777 of the Civil Code declares that the successional rights are
transmitted from the moment of death of the decedent. Accordingly,
upon Anastacia’s death, her children acquired legal title to her estate
(which title includes her shareholdings in Zenith), and they are, prior
25
to the estate’s partition, deemed co-owners thereof. This status as
co-owners, however, does not immediately and necessarily make
them stockholders of the corporation. Unless and until there is
compliance with Section 63 of the Corporation Code on the manner
of transferring shares, the heirs do not become registered
stockholders of the corporation. Section 63 provides:
Section 63. Certificate of stock and transfer of shares. – The
capital stock of stock corporations shall be divided into
shares for which certificates signed by the president or vice-
president, countersigned by the secretary or assistant
secretary, and sealed with the seal of the corporation shall
be issued in accordance with the by-laws. Shares of stock so
issued are personal property and may be transferred by
delivery of the certificate or certificates indorsed by the
owner or his attorney-in-fact or other person legally
authorized to make the transfer. No transfer, however,
shall be valid, except as between the parties, until the
transfer is recorded in the books of the corporation so
as to show the names of the parties to the transaction,
the date of the transfer, the number of the certificate or
certificates, and the number of shares
transferred. [Emphasis supplied.]
No shares of stock against which the corporation holds any
unpaid claim shall be transferable in the books of the
corporation.
Simply stated, the transfer of title by means of succession, though
effective and valid between the parties involved (i.e., between the
decedent’s estate and her heirs), does not bind the corporation and
third parties. The transfer must be registered in the books of the
corporation to make the transferee-heir a stockholder entitled to
recognition as such both by the corporation and by third parties.
26
We note, in relation with the above statement, that in Abejo v. Dela
27 28
Cruz and TCL Sales Corporation v. Court of Appeals we did not
require the registration of the transfer before considering the
transferee a stockholder of the corporation (in effect upholding the
existence of an intra-corporate relation between the parties and
bringing the case within the jurisdiction of the SEC as an intra-
corporate controversy). A marked difference, however, exists
between these cases and the present one.
In Abejo and TCL Sales, the transferees held definite and
uncontested titles to a specific number of shares of the
corporation; after the transferee had established prima
facie ownership over the shares of stocks in question, registration
became a mere formality in confirming their status as stockholders.
In the present case, each of Anastacia’s heirs holds only an
undivided interest in the shares. This interest, at this point, is still
inchoate and subject to the outcome of a settlement proceeding; the
right of the heirs to specific, distributive shares of inheritance will not
be determined until all the debts of the estate of the decedent are
paid. In short, the heirs are only entitled to what remains after
29
payment of the decedent’s debts; whether there will be residue
remains to be seen. Justice Jurado aptly puts it as follows:
No succession shall be declared unless and until a
liquidation of the assets and debts left by the decedent shall
have been made and all his creditors are fully paid. Until a
final liquidation is made and all the debts are paid, the right
of the heirs to inherit remains inchoate. This is so because
under our rules of procedure, liquidation is necessary in
order to determine whether or not the decedent has left
any liquid assets which may be transmitted to his
30
heirs. [Emphasis supplied.]
Rodrigo must, therefore, hurdle two obstacles before he can be
considered a stockholder of Zenith with respect to the shareholdings
originally belonging to Anastacia. First, he must prove that there are
shareholdings that will be left to him and his co-heirs, and this can be
determined only in a settlement of the decedent’s estate. No such
proceeding has been commenced to date. Second, he must register
the transfer of the shares allotted to him to make it binding against
the corporation. He cannot demand that this be done unless and until
he has established his specific allotment (and prima facieownership)
of the shares. Without the settlement of Anastacia’s estate, there can
be no definite partition and distribution of the estate to the heirs.
Without the partition and distribution, there can be no registration of
the transfer. And without the registration, we cannot consider the
transferee-heir a stockholder who may invoke the existence of an
intra-corporate relationship as premise for an intra-corporate
controversy within the jurisdiction of a special commercial court.
In sum, we find that – insofar as the subject shares of stock (i.e.,
Anastacia’s shares) are concerned – Rodrigo cannot be considered
a stockholder of Zenith. Consequently, we cannot declare that an
intra-corporate relationship exists that would serve as basis to bring
this case within the special commercial court’s jurisdiction under
Section 5(b) of PD 902-A, as amended. Rodrigo’s complaint,
therefore, fails the relationship test.
Application of the Nature of Controversy Test
The body rather than the title of the complaint determines the nature
31
of an action. Our examination of the complaint yields the conclusion
that, more than anything else, the complaint is about the protection
and enforcement of successional rights. The controversy it presents
is purely civil rather than corporate, although it is denominated as a
"complaint for accounting of all corporate funds and assets."
Contrary to the findings of both the trial and appellate courts, we read
only one cause of action alleged in the complaint. The "derivative suit
for accounting of the funds and assets of the corporation which are in
the control, custody, and/or possession of the respondent [herein
petitioner Oscar]" does not constitute a separate cause of action but
is, as correctly claimed by Oscar, only an incident to the "action for
determination of the shares of stock of deceased spouses Pedro and
Anastacia Reyes allegedly taken by respondent, its accounting and
the corresponding delivery of these shares to the parties’ brothers
and sisters." There can be no mistake of the relationship between
the "accounting" mentioned in the complaint and the objective of
partition and distribution when Rodrigo claimed in paragraph 10.1 of
the complaint that:
10.1 By refusal of the respondent to account of [sic] his
shareholdings in the company, he illegally and fraudulently
transferred solely in his name wherein [sic] the shares of
stock of the deceased Anastacia C. Reyes [which] must be
properly collated and/or distributed equally amongst the
children including the complainant Rodrigo C. Reyes herein
to their damage and prejudice.
We particularly note that the complaint contained no sufficient
allegation that justified the need for an accounting other thanto
determine the extent of Anastacia’s shareholdings for purposes of
distribution.
Another significant indicator that points us to the real nature of the
complaint are Rodrigo’s repeated claims of illegal and fraudulent
transfers of Anastacia’s shares by Oscar to the prejudice of the other
heirs of the decedent; he cited these allegedly fraudulent acts as
basis for his demand for the collation and distribution of Anastacia’s
shares to the heirs. These claims tell us unequivocally that the
present controversy arose from the parties’ relationship as heirs of
Anastacia and not as shareholders of Zenith. Rodrigo, in filing the
complaint, is enforcing his rights as a co-heir and not as a
stockholder of Zenith. The injury he seeks to remedy is one suffered
by an heir (for the impairment of his successional rights) and not by
the corporation nor by Rodrigo as a shareholder on record.
More than the matters of injury and redress, what Rodrigo clearly
aims to accomplish through his allegations of illegal acquisition by
Oscar is the distribution of Anastacia’s shareholdings without a prior
settlement of her estate – an objective that, by law and established
jurisprudence, cannot be done. The RTC of Makati, acting as a
special commercial court, has no jurisdiction to settle, partition, and
distribute the estate of a deceased. A relevant provision – Section 2
of Rule 90 of the Revised Rules of Court – that contemplates
properties of the decedent held by one of the heirs declares:
Questions as to advancement made or alleged to have
been made by the deceased to any heir may be heard and
determined by the court having jurisdiction of the estate
proceedings; and the final order of the court thereon shall
be binding on the person raising the questions and on the
heir. [Emphasis supplied.]
Worth noting are this Court’s statements in the case of Natcher v.
32
Court of Appeals:
 Matters which involve settlement and distribution of the
estate of the decedent fall within the exclusive province
of the probate court in the exercise of its limited jurisdiction.
xxxx
It is clear that trial courts trying an ordinary action cannot
resolve to perform acts pertaining to a special
proceeding because it is subject to specific prescribed
rules. [Emphasis supplied.]
That an accounting of the funds and assets of Zenith to determine
the extent and value of Anastacia’s shareholdings will be undertaken
by a probate court and not by a special commercial court is
completely consistent with the probate court’s limited jurisdiction. It
has the power to enforce an accounting as a necessary means to its
authority to determine the properties included in the inventory of the
estate to be administered, divided up, and distributed. Beyond this,
the determination of title or ownership over the subject shares
(whether belonging to Anastacia or Oscar) may be conclusively
settled by the probate court as a question of collation or
advancement. We had occasion to recognize the court’s authority to
act on questions of title or ownership in a collation or advancement
33
situation in Coca v. Pangilinan where we ruled:
It should be clarified that whether a particular matter should
be resolved by the Court of First Instance in the exercise of
its general jurisdiction or of its limited probate jurisdiction is
in reality not a jurisdictional question. In essence, it is a
procedural question involving a mode of practice "which may
be waived."
As a general rule, the question as to title to property should
not be passed upon in the testate or intestate proceeding.
That question should be ventilated in a separate action. That
general rule has qualifications or exceptions justified by
expediency and convenience.
Thus, the probate court may provisionally pass upon in an
intestate or testate proceeding the question of inclusion in, or
exclusion from, the inventory of a piece of property without
prejudice to its final determination in a separate action.
Although generally, a probate court may not decide a
question of title or ownership, yet if the interested parties
are all heirs, or the question is one of collation or
advancement, or the parties consent to the assumption of
jurisdiction by the probate court and the rights of third parties
are not impaired, the probate court is competent to
decide the question of ownership. [Citations omitted.
Emphasis supplied.]
In sum, we hold that the nature of the present controversy is not one
which may be classified as an intra-corporate dispute and is beyond
the jurisdiction of the special commercial court to resolve. In short,
Rodrigo’s complaint also fails the nature of the controversy test.
DERIVATIVE SUIT
Rodrigo’s bare claim that the complaint is a derivative suit will not
suffice to confer jurisdiction on the RTC (as a special commercial
court) if he cannot comply with the requisites for the existence of a
derivative suit. These requisites are:
a. the party bringing suit should be a shareholder during the
time of the act or transaction complained of, the number of
shares not being material;
b. the party has tried to exhaust intra-corporate remedies,
i.e., has made a demand on the board of directors for the
appropriate relief, but the latter has failed or refused to heed
his plea; and
c. the cause of action actually devolves on the corporation;
the wrongdoing or harm having been or being caused to the
corporation and not to the particular stockholder bringing the
34
suit.
Based on these standards, we hold that the allegations of the deceased Anastacia Reyes, a move that is not foreclosed by the
present complaint do not amount to a derivative suit. dismissal of his present complaint.

First, as already discussed above, Rodrigo is not a shareholder with WHEREFORE, we hereby GRANT the petition and REVERSE the
respect to the shareholdings originally belonging to Anastacia; he decision of the Court of Appeals dated May 26, 2004 in CA-G.R. SP
only stands as a transferee-heir whose rights to the share are No. 74970. The complaint before the Regional Trial Court, Branch
inchoate and unrecorded. With respect to his own individually-held 142, Makati, docketed as Civil Case No. 00-1553, is
shareholdings, Rodrigo has not alleged any individual cause or basis ordered DISMISSED for lack of jurisdiction.
as a shareholder on record to proceed against Oscar.
SO ORDERED.
Second, in order that a stockholder may show a right to sue on
behalf of the corporation, he must allege with some particularity in his
complaint that he has exhausted his remedies within the
corporation by making a sufficient demand upon the directors or
other officers for appropriate relief with the expressed intent to sue if
35
relief is denied. Paragraph 8 of the complaint hardly satisfies this
requirement since what the rule contemplates is the exhaustion of
remedies within the corporate setting:

8. As members of the same family, complainant Rodrigo C.

Reyes has resorted [to] and exhausted all legal means of
resolving the dispute with the end view of amicably settling
the case, but the dispute between them ensued.

Lastly, we find no injury, actual or threatened, alleged to have been

done to the corporation due to Oscar’s acts. If indeed he illegally and
fraudulently transferred Anastacia’s shares in his own name, then the
damage is not to the corporation but to his co-heirs; the wrongful
transfer did not affect the capital stock or the assets of Zenith. As
already mentioned, neither has Rodrigo alleged any particular cause
or wrongdoing against the corporation that he can champion in his
36
capacity as a shareholder on record.

In summary, whether as an individual or as a derivative suit, the RTC

– sitting as special commercial court – has no jurisdiction to hear
Rodrigo’s complaint since what is involved is the determination and
distribution of successional rights to the shareholdings of Anastacia
Reyes. Rodrigo’s proper remedy, under the circumstances, is to
institute a special proceeding for the settlement of the estate of the
G.R. No. L-28040 August 18, 1972
TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA,
administrator-appellee; JOSE DE BORJA, as administrator,
CAYETANO DE BORJA, MATILDE DE BORJA and CRISANTO
DE BORJA (deceased) as Children of Josefa
Tangco, appellees,
vs.
TASIANA VDA. DE DE BORJA, Special Administratrix of the
Testate Estate of Francisco de Borja, appellant. .
G.R. No L-28568 August 18, 1972
TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA,
TASIANA O. VDA. DE DE BORJA, special Administratrix
appellee,
vs.
JOSE DE BORJA, oppositor-appellant.
G.R. No. L-28611 August 18, 1972
TASIANA 0. VDA. DE BORJA, as Administratrix of the
Testate Estate of the late Francisco de Borja, plaintiff-
appellee,
vs.
JOSE DE BORJA, as Administrator of the Testate Estate of
the late Josefa Tangco, defendant-appellant.
L-28040
Pelaez, Jalandoni & Jamir for administrator-appellee.
Quiogue & Quiogue for appellee Matilde de Borja.
Andres Matias for appellee Cayetano de Borja.
Sevilla & Aquino for appellant.
L-28568
Sevilla & Aquino for special administratrix-appellee.
Pelaez, Jalandoni & Jamir for oppositor-appellant.
L-28611
Sevilla & Aquino for plaintiff-appellee.
Pelaez, Jalandoni & Jamir and David Gueverra for defendant-
appellant.
REYES, J.B.L., J.:p
Of these cases, the first, numbered L-28040 is an appeal by Tasiana Ongsingco Vda. de de
Borja, special administratrix of the testate estate of Francisco de Borja,1 from the approval of
a compromise agreement by the Court of First Instance of Rizal, Branch I, in its Special
Proceeding No. R-7866, entitled, "Testate Estate of Josefa Tangco, Jose de Borja,
Administrator".
Case No. L-28568 is an appeal by administrator Jose Borja from
the disapproval of the same compromise agreement by the Court
of First Instance of Nueva Ecija, Branch II, in its Special
Proceeding No. 832, entitled, "Testate Estate of Francisco de
Borja, Tasiana O. Vda. de de Borja, Special Administratrix".
And Case No. L-28611 is an appeal by administrator Jose de
Borja from the decision of the Court of First Instance of Rizal,
Branch X, in its Civil Case No. 7452, declaring the Hacienda
Jalajala Poblacion, which is the main object of the aforesaid
compromise agreement, as the separate and exclusive property
of the late Francisco de Borja and not a conjugal asset of the
community with his first wife, Josefa Tangco, and that said
hacienda pertains exclusively to his testate estate, which is under
administrator in Special Proceeding No. 832 of the Court of First
Instance of Nueva Ecija, Branch II.
It is uncontested that Francisco de Borja, upon the death of his
wife Josefa Tangco on 6 October 1940, filed a petition for the
probate of her will which was docketed as Special Proceeding
No. R-7866 of the Court of First Instance of Rizal, Branch I. The
will was probated on 2 April 1941. In 1946, Francisco de Borja
was appointed executor and administrator: in 1952, their son,
Jose de Borja, was appointed co-administrator. When Francisco
died, on 14 April 1954, Jose became the sole administrator of the
testate estate of his mother, Josefa Tangco. While a widower
Francisco de Borja allegedly took unto himself a second wife,
Tasiana Ongsingco. Upon Francisco's death, Tasiana instituted
testate proceedings in the Court of First Instance of Nueva Ecija,
where, in 1955, she was appointed special administratrix. The
validity of Tasiana's marriage to Francisco was questioned in said
proceeding.
The relationship between the children of the first marriage and
Tasiana Ongsingco has been plagued with several court suits
and counter-suits; including the three cases at bar, some
eighteen (18) cases remain pending determination in the courts.
The testate estate of Josefa Tangco alone has been unsettled for
more than a quarter of a century. In order to put an end to all
these litigations, a compromise agreement was entered into on
12 October 1963,2 by and between "[T]he heir and son of
Francisco de Borja by his first marriage, namely, Jose de Borja
personally and as administrator of the Testate Estate of Josefa
Tangco," and "[T]he heir and surviving spouse of Francisco de
Borja by his second marriage, Tasiana Ongsingco Vda. de Borja,
assisted by her lawyer, Atty. Luis Panaguiton Jr." The terms and
conditions of the compromise agreement are as follows:
AGREEMENT
THIS AGREEMENT made and entered into by
and between
The heir and son of Francisco de Borja by his first
marriage, namely, Jose de Borja personally and
as administrator of the Testate Estate of Josefa
Tangco,
AND
The heir and surviving spouse of Francisco de
Borja by his second marriage, Tasiana Ongsingco
Vda. de Borja, assisted by her lawyer, Atty. Luis
Panaguiton Jr.
WITNESSETH
THAT it is the mutual desire of all the parties
herein terminate and settle, with finality, the
various court litigations, controversies, claims,
counterclaims, etc., between them in connection
with the administration, settlement, partition,
adjudication and distribution of the assets as well
as liabilities of the estates of Francisco de Borja
and Josefa Tangco, first spouse of Francisco de
Borja.
THAT with this end in view, the parties herein
have agreed voluntarily and without any
reservations to enter into and execute this
agreement under the following terms and
conditions:
1. That the parties agree to sell the Poblacion
portion of the Jalajala properties situated in
Jalajala, Rizal, presently under administration in
the Testate Estate of Josefa Tangco (Sp. Proc.
No. 7866, Rizal), more specifically described as
follows:
 Linda al Norte con el Rio Puwang
que la separa de la jurisdiccion del
Municipio de Pililla de la Provincia
de Rizal, y con el pico del Monte
Zambrano; al Oeste con Laguna
de Bay; por el Sur con los
herederos de Marcelo de Borja; y
por el Este con los terrenos de la
Familia Maronilla
with a segregated area of approximately 1,313
hectares at the amount of P0.30 per square
meter.
2. That Jose de Borja agrees and obligates
himself to pay Tasiana Ongsingco Vda. de de
Borja the total amount of Eight Hundred Thousand
Pesos (P800,000) Philippine Currency, in cash,
which represent P200,000 as his share in the
payment and P600,000 as pro-rata shares of the
heirs Crisanto, Cayetano and Matilde, all
surnamed de Borja and this shall be considered
as full and complete payment and settlement of
her hereditary share in the estate of the late
Francisco de Borja as well as the estate of Josefa
Tangco, Sp. Proc. No. 832-Nueva Ecija and Sp.
Proc. No. 7866-Rizal, respectively, and to any
properties bequeathed or devised in her favor by
the late Francisco de Borja by Last Will and
Testament or by Donation Inter Vivos or Mortis
Causa or purportedly conveyed to her for
consideration or otherwise. The funds for this
payment shall be taken from and shall depend
upon the receipt of full payment of the proceeds of
the sale of Jalajala, "Poblacion."
3. That Tasiana Ongsingco Vda. de de Borja
hereby assumes payment of that particular
obligation incurred by the late Francisco de Borja
in favor of the Rehabilitation Finance Corporation,
now Development Bank of the Philippines,
amounting to approximately P30,000.00 and also
assumes payment of her 1/5 share of the Estate
and Inheritance taxes on the Estate of the late
Francisco de Borja or the sum of P3,500.00, more
or less, which shall be deducted by the buyer of
Jalajala, "Poblacion" from the payment to be
made to Tasiana Ongsingco Vda. de Borja under
paragraph 2 of this Agreement and paid directly to
the Development Bank of the Philippines and the
heirs-children of Francisco de Borja.
4. Thereafter, the buyer of Jalajala "Poblacion" is
hereby authorized to pay directly to Tasiana
Ongsingco Vda. de de Borja the balance of the
payment due her under paragraph 2 of this
Agreement (approximately P766,500.00) and
issue in the name of Tasiana Ongsingco Vda. de
de Borja, corresponding certified checks/treasury
warrants, who, in turn, will issue the
corresponding receipt to Jose de Borja.
5. In consideration of above payment to Tasiana
Ongsingco Vda. de de Borja, Jose de Borja
personally and as administrator of the Testate
Estate of Josefa Tangco, and Tasiana Ongsingco
Vda. de de Borja, for themselves and for their
heirs, successors, executors, administrators, and
assigns, hereby forever mutually renounce,
withdraw, waive, remise, release and discharge
any and all manner of action or actions, cause or
causes of action, suits, debts, sum or sums of
money, accounts, damages, claims and demands
whatsoever, in law or in equity, which they ever
had, or now have or may have against each other,
more specifically Sp. Proceedings Nos. 7866 and
1955, CFI-Rizal, and Sp. Proc. No. 832-Nueva
Ecija, Civil Case No. 3033, CFI Nueva Ecija and
Civil Case No. 7452-CFI, Rizal, as well as the
case filed against Manuel Quijal for perjury with
the Provincial Fiscal of Rizal, the intention being
to completely, absolutely and finally release each
other, their heirs, successors, and assigns, from
any and all liability, arising wholly or partially,
directly or indirectly, from the administration,
settlement, and distribution of the assets as well
as liabilities of the estates of Francisco de Borja
and Josefa Tangco, first spouse of Francisco de
Borja, and lastly, Tasiana Ongsingco Vda. de de
Borja expressly and specifically renounce
absolutely her rights as heir over any hereditary
share in the estate of Francisco de Borja.
6. That Tasiana Ongsingco Vda. de de Borja,
upon receipt of the payment under paragraph 4
hereof, shall deliver to the heir Jose de Borja all
the papers, titles and documents belonging to
Francisco de Borja which are in her possession
and said heir Jose de Borja shall issue in turn the
corresponding receive thereof.
7. That this agreement shall take effect only upon
the fulfillment of the sale of the properties
mentioned under paragraph 1 of this agreement
and upon receipt of the total and full payment of
the proceeds of the sale of the Jalajala property
"Poblacion", otherwise, the non-fulfillment of the
said sale will render this instrument NULL AND
VOID AND WITHOUT EFFECT THEREAFTER.
IN WITNESS WHEREOF, the parties hereto have
her unto set their hands in the City of Manila,
Philippines, the 12th of October, 1963.
On 16 May 1966, Jose de Borja submitted for Court approval the
agreement of 12 October 1963 to the Court of First Instance of
Rizal, in Special Proceeding No. R-7866; and again, on 8 August
1966, to the Court of First Instance of Nueva Ecija, in Special
Proceeding No. 832. Tasiana Ongsingco Vda. de de Borja
opposed in both instances. The Rizal court approved the
compromise agreement, but the Nueva Ecija court declared it
void and unenforceable. Special administratrix Tasiana
Ongsingco Vda. de de Borja appealed the Rizal Court's order of
approval (now Supreme Court G.R. case No. L-28040), while
administrator Jose de Borja appealed the order of disapproval
(G.R. case No. L-28568) by the Court of First Instance of Nueva
Ecija.
The genuineness and due execution of the compromised
agreement of 12 October 1963 is not disputed, but its validity is,
nevertheless, attacked by Tasiana Ongsingco on the ground that:
(1) the heirs cannot enter into such kind of agreement without first
probating the will of Francisco de Borja; (2) that the same
involves a compromise on the validity of the marriage between
Francisco de Borja and Tasiana Ongsingco; and (3) that even if it
were valid, it has ceased to have force and effect.
In assailing the validity of the agreement of 12 October 1963,
Tasiana Ongsingco and the Probate Court of Nueva Ecija rely on
this Court's decision in Guevara vs. Guevara. 74 Phil. 479,
wherein the Court's majority held the view that the presentation of
a will for probate is mandatory and that the settlement and
distribution of an estate on the basis of intestacy when the
decedent left a will, is against the law and public policy. It is
likewise pointed out by appellant Tasiana Ongsingco that Section
1 of Rule 74 of the Revised Rules explicitly conditions the validity
of an extrajudicial settlement of a decedent's estate by agreement
between heirs, upon the facts that "(if) the decedent left no
will and no debts, and the heirs are all of age, or the minors are
represented by their judicial and legal representatives ..." The will
of Francisco de Borja having been submitted to the Nueva Ecija
Court and still pending probate when the 1963 agreement was
made, those circumstances, it is argued, bar the validity of the
agreement.
Upon the other hand, in claiming the validity of the compromise
agreement, Jose de Borja stresses that at the time it was entered
into, on 12 October 1963, the governing provision was Section 1,
Rule 74 of the original Rules of Court of 1940, which allowed the
extrajudicial settlement of the estate of a deceased person
regardless of whether he left a will or not. He also relies on the
dissenting opinion of Justice Moran, in Guevara vs. Guevara, 74
Phil. 479, wherein was expressed the view that if the parties have
already divided the estate in accordance with a decedent's will,
the probate of the will is a useless ceremony; and if they have
divided the estate in a different manner, the probate of the will is
worse than useless.
The doctrine of Guevara vs. Guevara, ante, is not applicable to
the case at bar. This is apparent from an examination of the
terms of the agreement between Jose de Borja and Tasiana
Ongsingco. Paragraph 2 of said agreement specifically stipulates
that the sum of P800,000 payable to Tasiana Ongsingco —
shall be considered as full — complete payment
— settlement of her hereditary share in the estate
of the late Francisco de Borja as well as the
estate of Josefa Tangco, ... and to any properties
bequeathed or devised in her favor by the late
Francisco de Borja by Last Will and Testament or
by Donation Inter Vivos or Mortis Causa or
purportedly conveyed to her for consideration or
otherwise.
This provision evidences beyond doubt that the ruling in the
Guevara case is not applicable to the cases at bar. There was
here no attempt to settle or distribute the estate of Francisco de
Borja among the heirs thereto before the probate of his will. The
clear object of the contract was merely the conveyance by
Tasiana Ongsingco of any and all her individual share and
interest, actual or eventual in the estate of Francisco de Borja and
Josefa Tangco. There is no stipulation as to any other claimant,
creditor or legatee. And as a hereditary share in a decedent's
estate is transmitted or vested immediately from the moment of
the death of such causante or predecessor in interest (Civil Code
of the Philippines, Art. 777)3 there is no legal bar to a successor
(with requisite contracting capacity) disposing of her or his
hereditary share immediately after such death, even if the actual
extent of such share is not determined until the subsequent
liquidation of the estate.4 Of course, the effect of such alienation is
to be deemed limited to what is ultimately adjudicated to the
vendor heir. However, the aleatory character of the contract does
not affect the validity of the transaction; neither does the
coetaneous agreement that the numerous litigations between the
parties (the approving order of the Rizal Court enumerates
fourteen of them, Rec. App. pp. 79-82) are to be considered
settled and should be dismissed, although such stipulation, as
noted by the Rizal Court, gives the contract the character of a
compromise that the law favors, for obvious reasons, if only
because it serves to avoid a multiplicity of suits.
It is likewise worthy of note in this connection that as the surviving
spouse of Francisco de Borja, Tasiana Ongsingco was his
compulsory heir under article 995 et seq. of the present Civil
Code. Wherefore, barring unworthiness or valid disinheritance,
her successional interest existed independent of Francisco de
Borja's last will and testament and would exist even if such will
were not probated at all. Thus, the prerequisite of a previous
probate of the will, as established in the Guevara and analogous
cases, can not apply to the case of Tasiana Ongsingco Vda. de
de Borja.
Since the compromise contract Annex A was entered into by and
between "Jose de Borja personally and as administrator of the
Testate Estate of Josefa Tangco" on the one hand, and on the
other, "the heir and surviving spouse of Francisco de Borja by his
second marriage, Tasiana Ongsingco Vda. de de Borja", it is
clear that the transaction was binding on both in their individual
capacities, upon the perfection of the contract, even without
previous authority of the Court to enter into the same. The only
difference between an extrajudicial compromise and one that is
submitted and approved by the Court, is that the latter can be
enforced by execution proceedings. Art. 2037 of the Civil Code is
explicit on the point:
8. Art. 2037. A compromise has upon the parties
the effect and authority of res judicata; but there
shall be no execution except in compliance with a
judicial compromise.
It is argued by Tasiana Ongsingco that while the
agreement Annex A expressed no definite period
for its performance, the same was intended to
have a resolutory period of 60 days for its
effectiveness. In support of such contention, it is
averred that such a limit was expressly stipulated
in an agreement in similar terms entered into by
said Ongsingco with the brothers and sister of
Jose de Borja, to wit, Crisanto, Matilde and
Cayetano, all surnamed de Borja, except that the
consideration was fixed at P600,000 (Opposition,
Annex/Rec. of Appeal, L-28040, pp. 39- 46) and
which contained the following clause:
III. That this agreement shall take effect only upon
the consummation of the sale of the property
mentioned herein and upon receipt of the total
and full payment of the proceeds of the sale by
the herein owner heirs-children of Francisco de
Borja, namely, Crisanto, Cayetano and Matilde, all
surnamed de Borja; Provided that if no sale of the
said property mentioned herein is consummated,
or the non-receipt of the purchase price thereof by
the said owners within the period of sixty (60)
days from the date hereof, this agreement will
become null and void and of no further effect.
Ongsingco's argument loses validity when it is considered that
Jose de Borja was not a party to this particular contract (Annex
1), and that the same appears not to have been finalized, since it
bears no date, the day being left blank "this — day of October
1963"; and while signed by the parties, it was not notarized,
although plainly intended to be so done, since it carries a
proposed notarial ratification clause. Furthermore, the
compromise contract with Jose de Borja (Annex A), provides in its
par. 2 heretofore transcribed that of the total consideration of
P800, 000 to be paid to Ongsingco, P600,000 represent the
"prorata share of the heirs Crisanto, Cayetano and Matilde all
surnamed de Borja" which corresponds to the consideration of
P600,000 recited in Annex 1, and that circumstance is proof that
the duly notarized contract entered into wit Jose de Borja under
date 12 October 1963 (Annex A), was designed to absorb and
supersede the separate unformalize agreement with the other
three Borja heirs. Hence, the 60 days resolutory term in the
contract with the latter (Annex 1) not being repeated in Annex A,
can not apply to the formal compromise with Jose de Borja. It is
moreover manifest that the stipulation that the sale of the
Hacienda de Jalajala was to be made within sixty days from the
date of the agreement with Jose de Borja's co-heirs (Annex 1)
was plainly omitted in Annex A as improper and ineffective, since
the Hacienda de Jalajala (Poblacion) that was to be sold to raise
the P800,000 to be paid to Ongsingco for her share formed part
of the estate of Francisco de Borja and could not be sold until
authorized by the Probate Court. The Court of First Instance of
Rizal so understood it, and in approving the compromise it fixed a
term of 120 days counted from the finality of the order now under
appeal, for the carrying out by the parties for the terms of the
contract.
This brings us to the plea that the Court of First Instance of Rizal
had no jurisdiction to approve the compromise with Jose de Borja
(Annex A) because Tasiana Ongsingco was not an heir in the
estate of Josefa Tangco pending settlement in the Rizal Court,
but she was an heir of Francisco de Borja, whose estate was the
object of Special Proceeding No. 832 of the Court of First
Instance of Nueva Ecija. This circumstance is irrelevant, since
what was sold by Tasiana Ongsingco was only her eventual
share in the estate of her late husband, not the estate itself; and
as already shown, that eventual share she owned from the time
of Francisco's death and the Court of Nueva Ecija could not bar
her selling it. As owner of her undivided hereditary share, Tasiana
could dispose of it in favor of whomsoever she chose. Such
alienation is expressly recognized and provided for by article
1088 of the present Civil Code:
Art. 1088. Should any of the heirs sell his
hereditary rights to a stranger before the partition,
any or all of the co-heirs may be subrogated to the
rights of the purchaser by reimbursing him for the
price of the sale, provided they do so within the
period of one month from the time they were
notified in writing of the sale of the vendor.
If a sale of a hereditary right can be made to a stranger, then a
fortiori sale thereof to a coheir could not be forbidden.
Tasiana Ongsingco further argues that her contract with Jose de
Borja (Annex "A") is void because it amounts to a compromise as
to her status and marriage with the late Francisco de Borja. The
point is without merit, for the very opening paragraph of the
agreement with Jose de Borja (Annex "A") describes her as "the
heir and surviving spouse of Francisco de Borja by his second
marriage, Tasiana Ongsingco Vda. de de Borja", which is in itself
definite admission of her civil status. There is nothing in the text
of the agreement that would show that this recognition of
Ongsingco's status as the surviving spouse of Francisco de Borja
was only made in consideration of the cession of her hereditary
rights.
It is finally charged by appellant Ongsingco, as well as by the
Court of First Instance of Nueva Ecija in its order of 21
September 1964, in Special Proceedings No. 832 (Amended
Record on Appeal in L-28568, page 157), that the compromise
agreement of 13 October 1963 (Annex "A") had been abandoned,
as shown by the fact that, after its execution, the Court of First
Instance of Nueva Ecija, in its order of 21 September 1964, had
declared that "no amicable settlement had been arrived at by the
parties", and that Jose de Borja himself, in a motion of 17 June
1964, had stated that the proposed amicable settlement "had
failed to materialize".
It is difficult to believe, however, that the amicable settlement
referred to in the order and motion above-mentioned was the
compromise agreement of 13 October 1963, which already had
been formally signed and executed by the parties and duly
notarized. What the record discloses is that some time after its
formalization, Ongsingco had unilaterally attempted to back out
from the compromise agreement, pleading various reasons
restated in the opposition to the Court's approval of Annex "A"
(Record on Appeal, L-20840, page 23): that the same was invalid
because of the lapse of the allegedly intended resolutory period
of 60 days and because the contract was not preceded by the
probate of Francisco de Borja's will, as required by this
Court's Guevarra vs. Guevara ruling; that Annex "A" involved a
compromise affecting Ongsingco's status as wife and widow of
Francisco de Borja, etc., all of which objections have been
already discussed. It was natural that in view of the widow's
attitude, Jose de Borja should attempt to reach a new settlement
or novatory agreement before seeking judicial sanction and
enforcement of Annex "A", since the latter step might ultimately
entail a longer delay in attaining final remedy. That the attempt to
reach another settlement failed is apparent from the letter of
Ongsingco's counsel to Jose de Borja quoted in pages 35-36 of
the brief for appellant Ongsingco in G.R. No. 28040; and it is
more than probable that the order of 21 September 1964 and the
motion of 17 June 1964 referred to the failure of the parties' quest
for a more satisfactory compromise. But the inability to reach a
novatory accord can not invalidate the original compromise
(Annex "A") and justifies the act of Jose de Borja in finally seeking
a court order for its approval and enforcement from the Court of
First Instance of Rizal, which, as heretofore described, decreed
that the agreement be ultimately performed within 120 days from
the finality of the order, now under appeal.
We conclude that in so doing, the Rizal court acted in accordance
with law, and, therefore, its order should be upheld, while the
contrary resolution of the Court of First Instance of Nueva Ecija
should be, and is, reversed.
In her brief, Tasiana Ongsingco also pleads that the time elapsed
in the appeal has affected her unfavorably, in that while the
purchasing power of the agreed price of P800,000 has
diminished, the value of the Jalajala property has increased. But
the fact is that her delay in receiving the payment of the agreed
price for her hereditary interest was primarily due to her attempts
to nullify the agreement (Annex "A") she had formally entered into
with the advice of her counsel, Attorney Panaguiton. And as to
the devaluation de facto of our currency, what We said in Dizon
Rivera vs. Dizon, L-24561, 30 June 1970, 33 SCRA 554, that
"estates would never be settled if there were to be a revaluation
with every subsequent fluctuation in the values of currency and
properties of the estate", is particularly opposite in the present
case.
Coming now to Case G.R. No. L-28611, the issue is whether the
Hacienda de Jalajala (Poblacion), concededly acquired by
Francisco de Borja during his marriage to his first wife, Josefa
Tangco, is the husband's private property (as contended by his
second spouse, Tasiana Ongsingco), or whether it forms part of
the conjugal (ganancial) partnership with Josefa Tangco. The
Court of First Instance of Rizal (Judge Herminio Mariano,
presiding) declared that there was adequate evidence to
overcome the presumption in favor of its conjugal character
established by Article 160 of the Civil Code.
We are of the opinion that this question as between Tasiana
Ongsingco and Jose de Borja has become moot and academic,
in view of the conclusion reached by this Court in the two
preceding cases (G.R. No. L-28568), upholding as valid the
cession of Tasiana Ongsingco's eventual share in the estate of
her late husband, Francisco de Borja, for the sum of P800,000
with the accompanying reciprocal quit-claims between the parties.
But as the question may affect the rights of possible creditors and
legatees, its resolution is still imperative.
It is undisputed that the Hacienda Jalajala, of around 4,363
hectares, had been originally acquired jointly by Francisco de
Borja, Bernardo de Borja and Marcelo de Borja and their title
thereto was duly registered in their names as co-owners in Land
Registration Case No. 528 of the province of Rizal, G.L.R.O. Rec.
No. 26403 (De Barjo vs. Jugo, 54 Phil. 465). Subsequently, in
1931, the Hacienda was partitioned among the co-owners: the
Punta section went to Marcelo de Borja; the Bagombong section
to Bernardo de Borja, and the part in Jalajala proper (Poblacion)
corresponded to Francisco de Borja (V. De Borja vs. De Borja
101 Phil. 911, 932).
The lot allotted to Francisco was described as —
Una Parcela de terreno en Poblacion, Jalajala: N.
Puang River; E. Hermogena Romero; S. Heirs of
Marcelo de Borja O. Laguna de Bay; containing
an area of 13,488,870 sq. m. more or less,
assessed at P297,410. (Record on Appeal, pages
7 and 105)
On 20 November 1962, Tasiana O. Vda. de Borja, as
Administratrix of the Testate Estate of Francisco de Borja,
instituted a complaint in the Court of First Instance of Rizal (Civil
Case No. 7452) against Jose de Borja, in his capacity as
Administrator of Josefa Tangco (Francisco de Borja's first wife),
seeking to have the Hacienda above described declared
exclusive private property of Francisco, while in his answer
defendant (now appellant) Jose de Borja claimed that it was
conjugal property of his parents (Francisco de Borja and Josefa
Tangco), conformably to the presumption established by Article
160 of the Philippine Civil Code (reproducing Article 1407 of the
Civil Code of 1889), to the effect that:
Art. 160. All property of the marriage is presumed
to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband
or to the wife.
Defendant Jose de Borja further counterclaimed for damages,
compensatory, moral and exemplary, as well as for attorney's
fees.
After trial, the Court of First Instance of Rizal, per Judge Herminio
Mariano, held that the plaintiff had adduced sufficient evidence to
rebut the presumption, and declared the Hacienda de Jalajala
(Poblacion) to be the exclusive private property of the late
Francisco de Borja, and his Administratrix, Tasiana Ongsingco
Vda. de Borja, to be entitled to its possession. Defendant Jose de
Borja then appealed to this Court.
The evidence reveals, and the appealed order admits, that the
character of the Hacienda in question as owned by the conjugal
partnership De Borja-Tangco was solemnly admitted by the late
Francisco de Borja no less than two times: first, in the
Reamended Inventory that, as executor of the estate of his
deceased wife Josefa Tangco, he filed in the Special Proceedings
No. 7866 of the Court of First Instance of Rizal on 23 July 1953
(Exhibit "2"); and again, in the Reamended Accounting of the
same date, also filed in the proceedings aforesaid (Exhibit "7").
Similarly, the plaintiff Tasiana O. Vda. de Borja, herself, as
oppositor in the Estate of Josefa Tangco, submitted therein an
inventory dated 7 September 1954 (Exhibit "3") listing the Jalajala
property among the "Conjugal Properties of the Spouses
Francisco de Borja and Josefa Tangco". And once more, Tasiana
Ongsingco, as administratrix of the Estate of Francisco de Borja,
in Special Proceedings No. 832 of the Court of First Instance of
Nueva Ecija, submitted therein in December, 1955, an inventory
wherein she listed the Jalajala Hacienda under the heading
"Conjugal Property of the Deceased Spouses Francisco de Borja
and Josefa Tangco, which are in the possession of the
Administrator of the Testate Estate of the Deceased Josefa
Tangco in Special Proceedings No. 7866 of the Court of First
Instance of Rizal" (Exhibit "4").
Notwithstanding the four statements aforesaid, and the fact that
they are plain admissions against interest made by both
Francisco de Borja and the Administratrix of his estate, in the
course of judicial proceedings in the Rizal and Nueva Ecija
Courts, supporting the legal presumption in favor of the conjugal
community, the Court below declared that the Hacienda de
Jalajala (Poblacion) was not conjugal property, but the private
exclusive property of the late Francisco de Borja. It did so on the
strength of the following evidences: (a) the sworn statement by
Francis de Borja on 6 August 1951 (Exhibit "F") that —
He tomado possession del pedazo de terreno ya
delimitado (equivalente a 1/4 parte, 337
hectareas) adjunto a mi terreno personal y
exclusivo (Poblacion de Jalajala, Rizal).
and (b) the testimony of Gregorio de Borja, son of Bernardo de
Borja, that the entire Hacienda had been bought at a foreclosure
sale for P40,100.00, of which amount P25,100 was contributed by
Bernardo de Borja and P15,000. by Marcelo de Borja; that upon
receipt of a subsequent demand from the provincial treasurer for
realty taxes the sum of P17,000, Marcelo told his brother
Bernardo that Francisco (son of Marcelo) wanted also to be a co-
owner, and upon Bernardo's assent to the proposal, Marcelo
issue a check for P17,000.00 to pay the back taxes and said that
the amount would represent Francisco's contribution in the
purchase of the Hacienda. The witness further testified that —
Marcelo de Borja said that that money was
entrusted to him by Francisco de Borja when he
was still a bachelor and which he derived from his
 business transactions. (Hearing, 2 February 1965,
t.s.n., pages 13-15) (Emphasis supplied)
The Court below, reasoning that not only Francisco's sworn
statement overweighed the admissions in the inventories relied
upon by defendant-appellant Jose de Borja since probate courts
can not finally determine questions of ownership of inventoried
property, but that the testimony of Gregorio de Borja showed that
Francisco de Borja acquired his share of the original Hacienda
with his private funds, for which reason that share can not be
regarded as conjugal partnership property, but as exclusive
property of the buyer, pursuant to Article 1396(4) of Civil Code of
1889 and Article 148(4) of the Civil Code of the Philippines.
The following shall be the exclusive property of each spouse:
xxx xxx xxx
(4) That which is purchased with exclusive money
of the wife or of the husband.
We find the conclusions of the lower court to be untenable. In the
first place, witness Gregorio de Borja's testimony as to the source
of the money paid by Francisco for his share was plain hearsay,
hence inadmissible and of no probative value, since he was
merely repeating what Marcelo de Borja had told him (Gregorio).
There is no way of ascertaining the truth of the statement, since
both Marcelo and Francisco de Borja were already dead when
Gregorio testified. In addition, the statement itself is improbable,
since there was no need or occasion for Marcelo de Borja to
explain to Gregorio how and when Francisco de Borja had earned
the P17,000.00 entrusted to Marcelo. A ring of artificiality is
clearly discernible in this portion of Gregorio's testimony.
As to Francisco de Borja's affidavit, Exhibit "F", the quoted portion
thereof (ante, page 14) does not clearly demonstrate that the "mi
terreno personal y exclusivo (Poblacion de Jalajala, Rizal) " refers
precisely to the Hacienda in question. The inventories (Exhibits 3
and 4) disclose that there were two real properties in Jalajala
owned by Francisco de Borja, one of 72.038 sq. m., assessed at
P44,600, and a much bigger one of 1,357.260.70 sq. m., which is
evidently the Hacienda de Jalajala (Poblacion). To which of these
lands did the affidavit of Francisco de Borja (Exhibit "F") refer to?
In addition, Francisco's characterization of the land as "mi terreno
personal y exclusivo" is plainly self-serving, and not admissible in
the absence of cross examination.
It may be true that the inventories relied upon by defendant-
appellant (Exhibits "2", "3", "4" and "7") are not conclusive on the
conjugal character of the property in question; but as already
noted, they are clear admissions against the pecuniary interest of
the declarants, Francisco de Borja and his executor-widow,
Tasiana Ongsingco, and as such of much greater probative
weight than the self-serving statement of Francisco (Exhibit "F").
Plainly, the legal presumption in favor of the conjugal character of
the Hacienda de Jalajala (Poblacion) now in dispute has not been
rebutted but actually confirmed by proof. Hence, the appealed
order should be reversed and the Hacienda de Jalajala
(Poblacion) declared property of the conjugal partnership of
Francisco de Borja and Josefa Tangco.
No error having been assigned against the ruling of the lower
court that claims for damages should be ventilated in the
corresponding special proceedings for the settlement of the
estates of the deceased, the same requires no pro
announcement from this Court.
IN VIEW OF THE FOREGOING, the appealed order of the Court
of First Instance of Rizal in Case No. L-28040 is hereby affirmed;
while those involved in Cases Nos. L-28568 and L-28611 are
reversed and set aside. Costs against the appellant Tasiana
Ongsingco Vda. de Borja in all three (3) cases.
G.R. No. 146006 February 23, 2004
JOSE C. LEE AND ALMA AGGABAO, in their capacities as
President and Corporate Secretary, respectively, of
Philippines International Life Insurance Company, and
FILIPINO LOAN ASSISTANCE GROUP, petitioners
vs.
REGIONAL TRIAL COURT OF QUEZON CITY BRANCH 85
presided by JUDGE PEDRO M. AREOLA, BRANCH CLERK
OF COURT JANICE Y. ANTERO, DEPUTY SHERIFFS
ADENAUER G. RIVERA and PEDRO L. BORJA, all of the
Regional Trial Court of Quezon City Branch 85, MA. DIVINA
ENDERES claiming to be Special Administratrix, and other
persons/ public officers acting for and in their
behalf, respondents.
DECISION
CORONA, J.:
This is a petition for review under Rule 45 of the Rules of Court
seeking to reverse and set aside the decision1 of the Court of
Appeals, First Division, dated July 26, 2000, in CA G.R. 59736,
which dismissed the petition for certiorari filed by petitioners Jose
C. Lee and Alma Aggabao (in their capacities as president and
secretary, respectively, of Philippine International Life Insurance
Company) and Filipino Loan Assistance Group.
The antecedent facts follow.
Dr. Juvencio P. Ortañez incorporated the Philippine International
Life Insurance Company, Inc. on July 6, 1956. At the time of the
company’s incorporation, Dr. Ortañez owned ninety percent
(90%) of the subscribed capital stock.
On July 21, 1980, Dr. Ortañez died. He left behind a wife (Juliana
Salgado Ortañez), three legitimate children (Rafael, Jose and
Antonio Ortañez) and five illegitimate children by Ligaya Novicio
(herein private respondent Ma. Divina Ortañez-Enderes and her
siblings Jose, Romeo, Enrico Manuel and Cesar, all surnamed
Ortañez).2
On September 24, 1980, Rafael Ortañez filed before the Court of
First Instance of Rizal, Quezon City Branch (now Regional Trial
Court of Quezon City) a petition for letters of administration of the
intestate estate of Dr. Ortañez, docketed as SP Proc. Q-30884
(which petition to date remains pending at Branch 85 thereof).
Private respondent Ma. Divina Ortañez-Enderes and her siblings
filed an opposition to the petition for letters of administration and,
in a subsequent urgent motion, prayed that the intestate court
appoint a special administrator.
On March 10, 1982, Judge Ernani Cruz Paño, then presiding
judge of Branch 85, appointed Rafael and Jose Ortañez joint
special administrators of their father’s estate. Hearings continued
for the appointment of a regular administrator (up to now no
regular administrator has been appointed).
As ordered by the intestate court, special administrators Rafael
and Jose Ortañez submitted an inventory of the estate of their
father which included, among other properties, 2,0293 shares of
stock in Philippine International Life Insurance Company
(hereafter Philinterlife), representing 50.725% of the company’s
outstanding capital stock.
On April 15, 1989, the decedent’s wife, Juliana S. Ortañez,
claiming that she owned 1,0144 Philinterlife shares of stock as her
conjugal share in the estate, sold said shares with right to
repurchase in favor of herein petitioner Filipino Loan Assistance
Group (FLAG), represented by its president, herein petitioner
Jose C. Lee. Juliana Ortañez failed to repurchase the shares of
stock within the stipulated period, thus ownership thereof was
consolidated by petitioner FLAG in its name.
On October 30, 1991, Special Administrator Jose Ortañez, acting
in his personal capacity and claiming that he owned the
remaining 1,0115 Philinterlife shares of stocks as his inheritance
share in the estate, sold said shares with right to repurchase also
in favor of herein petitioner FLAG, represented by its president,
herein petitioner Jose C. Lee. After one year, petitioner FLAG
consolidated in its name the ownership of the Philinterlife shares
of stock when Jose Ortañez failed to repurchase the same.
It appears that several years before (but already during the
pendency of the intestate proceedings at the Regional Trial Court
of Quezon City, Branch 85), Juliana Ortañez and her two
children, Special Administrators Rafael and Jose Ortañez,
entered into a memorandum of agreement dated March 4, 1982
for the extrajudicial settlement of the estate of Dr. Juvencio
Ortañez, partitioning the estate (including the Philinterlife shares
of stock) among themselves. This was the basis of the number of
shares separately sold by Juliana Ortañez on April 15, 1989
(1,014 shares) and by Jose Ortañez on October 30, 1991 (1,011
shares) in favor of herein petitioner FLAG.
On July 12, 1995, herein private respondent Ma. Divina Ortañez–
Enderes and her siblings (hereafter referred to as private
respondents Enderes et al.) filed a motion for appointment of
special administrator of Philinterlife shares of stock. This move
was opposed by Special Administrator Jose Ortañez.
On November 8, 1995, the intestate court granted the motion of
private respondents Enderes et al. and appointed private
respondent Enderes special administratrix of the Philinterlife
shares of stock.
On December 20, 1995, Special Administratrix Enderes filed an
urgent motion to declare void ab initio the memorandum of
agreement dated March 4, 1982. On January 9, 1996, she filed a
motion to declare the partial nullity of the extrajudicial settlement
of the decedent’s estate. These motions were opposed by
Special Administrator Jose Ortañez.
On March 22, 1996, Special Administratrix Enderes filed an
urgent motion to declare void ab initio the deeds of sale of
Philinterlife shares of stock, which move was again opposed by
Special Administrator Jose Ortañez.
On February 4, 1997, Jose Ortañez filed an omnibus motion for
(1) the approval of the deeds of sale of the Philinterlife shares of
stock and (2) the release of Ma. Divina Ortañez-Enderes as
special administratrix of the Philinterlife shares of stock on the
ground that there were no longer any shares of stock for her to
administer.
On August 11, 1997, the intestate court denied the omnibus
motion of Special Administrator Jose Ortañez for the approval of
the deeds of sale for the reason that:
Under the Godoy case, supra, it was held in substance that a sale
of a property of the estate without an Order of the probate court is
void and passes no title to the purchaser. Since the sales in
question were entered into by Juliana S. Ortañez and Jose S.
Ortañez in their personal capacity without prior approval of the
Court, the same is not binding upon the Estate.
WHEREFORE, the OMNIBUS MOTION for the approval of the
sale of Philinterlife shares of stock and release of Ma. Divina
Ortañez-Enderes as Special Administratrix is hereby denied.6
On August 29, 1997, the intestate court issued another order
granting the motion of Special Administratrix Enderes for the
annulment of the March 4, 1982 memorandum of agreement or
extrajudicial partition of estate. The court reasoned that:
In consonance with the Order of this Court dated August 11, 1997
DENYING the approval of the sale of Philinterlife shares of stocks
and release of Ma. Divina Ortañez-Enderes as Special
Administratrix, the "Urgent Motion to Declare Void Ab
Initio Memorandum of Agreement" dated December 19, 1995. . .
is hereby impliedly partially resolved insofar as the
transfer/waiver/renunciation of the Philinterlife shares of stock are
concerned, in particular, No. 5, 9(c), 10(b) and 11(d)(ii) of the
Memorandum of Agreement.
WHEREFORE, this Court hereby declares the Memorandum of
Agreement dated March 4, 1982 executed by Juliana S. Ortañez,
Rafael S. Ortañez and Jose S. Ortañez as partially void ab
initio insofar as the transfer/waiver/renunciation of the Philinterlife
shares of stocks are concerned.7
Aggrieved by the above-stated orders of the intestate court, Jose
Ortañez filed, on December 22, 1997, a petition for certiorari in
the Court of Appeals. The appellate court denied his petition,
however, ruling that there was no legal justification whatsoever
for the extrajudicial partition of the estate by Jose Ortañez, his
brother Rafael Ortañez and mother Juliana Ortañez during the
pendency of the settlement of the estate of Dr. Ortañez, without
the requisite approval of the intestate court, when it was clear that
there were other heirs to the estate who stood to be prejudiced
thereby. Consequently, the sale made by Jose Ortañez and his
mother Juliana Ortañez to FLAG of the shares of stock they
invalidly appropriated for themselves, without approval of the
intestate court, was void.8
Special Administrator Jose Ortañez filed a motion for
reconsideration of the Court of Appeals decision but it was
denied. He elevated the case to the Supreme Court via petition
for review under Rule 45 which the Supreme Court dismissed on
October 5, 1998, on a technicality. His motion for reconsideration
was denied with finality on January 13, 1999. On February 23,
1999, the resolution of the Supreme Court dismissing the petition
of Special Administrator Jose Ortañez became final and was
subsequently recorded in the book of entries of judgments.
Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with
the rest of the FLAG-controlled board of directors, increased the
authorized capital stock of Philinterlife, diluting in the process the
50.725% controlling interest of the decedent, Dr. Juvencio
Ortañez, in the insurance company.9 This became the subject of a
separate action at the Securities and Exchange Commission filed
by private respondent-Special Administratrix Enderes against
petitioner Jose Lee and other members of the FLAG-controlled
board of Philinterlife on November 7, 1994. Thereafter, various
cases were filed by Jose Lee as president of Philinterlife and
Juliana Ortañez and her sons against private respondent-Special
Administratrix Enderes in the SEC and civil courts.10 Somehow,
all these cases were connected to the core dispute on the legality
of the sale of decedent Dr. Ortañez’s Philinterlife shares of stock
to petitioner FLAG, represented by its president, herein petitioner
Jose Lee who later became the president of Philinterlife after the
controversial sale.
On May 2, 2000, private respondent-Special Administratrix
Enderes and her siblings filed a motion for execution of the
Orders of the intestate court dated August 11 and August 29,
1997 because the orders of the intestate court nullifying the sale
(upheld by the Court of Appeals and the Supreme Court) had
long became final. Respondent-Special Administratrix Enderes
served a copy of the motion to petitioners Jose Lee and Alma
Aggabao as president and secretary, respectively, of
Philinterlife,11 but petitioners ignored the same.
On July 6, 2000, the intestate court granted the motion for
execution, the dispositive portion of which read:
WHEREFORE, premises considered, let a writ of execution issue
as follows:
1. Confirming the nullity of the sale of the 2,029
Philinterlife shares in the name of the Estate of Dr.
Juvencio Ortañez to Filipino Loan Assistance Group
(FLAG);
2. Commanding the President and the Corporate
Secretary of Philinterlife to reinstate in the stock and
transfer book of Philinterlife the 2,029 Philinterlife shares
of stock in the name of the Estate of Dr. Juvencio P.
Ortañez as the owner thereof without prejudice to other
claims for violation of pre-emptive rights pertaining to the
said 2,029 Philinterlife shares;
3. Directing the President and the Corporate Secretary of
Philinterlife to issue stock certificates of Philinterlife for
2,029 shares in the name of the Estate of Dr. Juvencio P.
Ortañez as the owner thereof without prejudice to other
claims for violations of pre-emptive rights pertaining to the
said 2,029 Philinterlife shares and,
4. Confirming that only the Special Administratrix, Ma.
Divina Ortañez-Enderes, has the power to exercise all the
rights appurtenant to the said shares, including the right to
vote and to receive dividends.
5. Directing Philinterlife and/or any other person or
persons claiming to represent it or otherwise, to
acknowledge and allow the said Special Administratrix to
exercise all the aforesaid rights on the said shares and to
refrain from resorting to any action which may tend
directly or indirectly to impede, obstruct or bar the free
exercise thereof under pain of contempt.
6. The President, Corporate Secretary, any responsible
officer/s of Philinterlife, or any other person or persons
claiming to represent it or otherwise, are hereby directed
to comply with this order within three (3) days from receipt
hereof under pain of contempt.
7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja
are hereby directed to implement the writ of execution
with dispatch to forestall any and/or further damage to the
Estate.
SO ORDERED.12
In the several occasions that the sheriff went to the office of
petitioners to execute the writ of execution, he was barred by the
security guard upon petitioners’ instructions. Thus, private
respondent-Special Administratrix Enderes filed a motion to cite
herein petitioners Jose Lee and Alma Aggabao (president and
secretary, respectively, of Philinterlife) in contempt.13
Petitioners Lee and Aggabao subsequently filed before the Court
of Appeals a petition for certiorari, docketed as CA G.R. SP No.
59736. Petitioners alleged that the intestate court gravely abused
its discretion in (1) declaring that the ownership of FLAG over the
Philinterlife shares of stock was null and void; (2) ordering the
execution of its order declaring such nullity and (3) depriving the
petitioners of their right to due process.
On July 26, 2000, the Court of Appeals dismissed the petition
outright:
We are constrained to DISMISS OUTRIGHT the present petition
for certiorari and prohibition with prayer for a temporary
restraining order and/or writ of preliminary injunction in the light of
the following considerations:
1. The assailed Order dated August 11, 1997 of the
respondent judge had long become final and executory;
2. The certification on non-forum shopping is signed by
only one (1) of the three (3) petitioners in violation of the
Rules; and
3. Except for the assailed orders and writ of execution,
deed of sale with right to repurchase, deed of sale of
 shares of stocks and omnibus motion, the petition is not
accompanied by such pleadings, documents and other
material portions of the record as would support the
allegations therein in violation of the second paragraph,
Rule 65 of the 1997 Rules of Civil Procedure, as
amended.
Petition is DISMISSED.
SO ORDERED.14
The motion for reconsideration filed by petitioners Lee and
Aggabao of the above decision was denied by the Court of
Appeals on October 30, 2000:
This resolves the "urgent motion for reconsideration" filed by the
petitioners of our resolution of July 26, 2000 dismissing outrightly
the above-entitled petition for the reason, among others, that the
assailed Order dated August 11, 1997 of the respondent Judge
had long become final and executory.
Dura lex, sed lex.
WHEREFORE, the urgent motion for reconsideration is hereby
DENIED, for lack of merit.
SO ORDERED.15
On December 4, 2000, petitioners elevated the case to the
Supreme Court through a petition for review under Rule 45 but on
December 13, 2000, we denied the petition because there was no
showing that the Court of Appeals in CA G.R. SP No. 59736
committed any reversible error to warrant the exercise by the
Supreme Court of its discretionary appellate jurisdiction.16
However, upon motion for reconsideration filed by petitioners Lee
and Aggabao, the Supreme Court granted the motion and
reinstated their petition on September 5, 2001. The parties were
then required to submit their respective memoranda.
Meanwhile, private respondent-Special Administratrix Enderes,
on July 19, 2000, filed a motion to direct the branch clerk of court
in lieu of herein petitioners Lee and Aggabao to reinstate the
name of Dr. Ortañez in the stock and transfer book of Philinterlife
and issue the corresponding stock certificate pursuant to Section
10, Rule 39 of the Rules of Court which provides that "the court
may direct the act to be done at the cost of the disobedient party
by some other person appointed by the court and the act when so
done shall have the effect as if done by the party." Petitioners Lee
and Aggabao opposed the motion on the ground that the intestate
court should refrain from acting on the motion because the issues
raised therein were directly related to the issues raised by them in
their petition for certiorari at the Court of Appeals docketed as
CA-G.R. SP No. 59736. On October 30, 2000, the intestate court
granted the motion, ruling that there was no prohibition for the
intestate court to execute its orders inasmuch as the appellate
court did not issue any TRO or writ of preliminary injunction.
On December 3, 2000, petitioners Lee and Aggabao filed a
petition for certiorari in the Court of Appeals, docketed as CA-
G.R. SP No. 62461, questioning this time the October 30, 2000
order of the intestate court directing the branch clerk of court to
issue the stock certificates. They also questioned in the Court of
Appeals the order of the intestate court nullifying the sale made in
their favor by Juliana Ortañez and Jose Ortañez. On November
20, 2002, the Court of Appeals denied their petition and upheld
the power of the intestate court to execute its order. Petitioners
Lee and Aggabao then filed motion for reconsideration which at
present is still pending resolution by the Court of Appeals.
Petitioners Jose Lee and Alma Aggabao (president and
secretary, respectively, of Philinterlife) and FLAG now raise the
following errors for our consideration:
The Court of Appeals committed grave reversible ERROR:
A. In failing to reconsider its previous resolution denying
the petition despite the fact that the appellate court’s
mistake in apprehending the facts had become patent and
evident from the motion for reconsideration and the
comment of respondent Enderes which had admitted the
factual allegations of petitioners in the petition as well as
in the motion for reconsideration. Moreover, the resolution
of the appellate court denying the motion for
reconsideration was contained in only one page without
even touching on the substantive merits of the exhaustive
discussion of facts and supporting law in the motion for
reconsideration in violation of the Rule on administrative
due process;
B. in failing to set aside the void orders of the intestate
court on the erroneous ground that the orders were final
and executory with regard to petitioners even as the latter
were never notified of the proceedings or order canceling
its ownership;
C. in not finding that the intestate court committed grave
abuse of discretion amounting to excess of jurisdiction (1)
when it issued the Omnibus Order nullifying the
ownership of petitioner FLAG over shares of stock which
were alleged to be part of the estate and (2) when it
issued a void writ of execution against petitioner FLAG as
present owner to implement merely provisional orders,
thereby violating FLAG’s constitutional right against
deprivation of property without due process;
D. In failing to declare null and void the orders of the
intestate court which nullified the sale of shares of stock
between the legitimate heir Jose S. Ortañez and petitioner
FLAG because of settled law and jurisprudence, i.e., that
an heir has the right to dispose of the decedent’s property
even if the same is under administration pursuant to Civil
Code provision that possession of hereditary property is
transmitted to the heir the moment of death of the
decedent (Acedebo vs. Abesamis, 217 SCRA 194);
E. In disregarding the final decision of the Supreme Court
in G.R. No. 128525 dated December 17, 1999 involving
substantially the same parties, to wit, petitioners Jose C.
Lee and Alma Aggabao were respondents in that case
while respondent Ma. Divina Enderes was the petitioner
therein. That decision, which can be considered law of the
case, ruled that petitioners cannot be enjoined by
respondent Enderes from exercising their power as
directors and officers of Philinterlife and that the intestate
court in charge of the intestate proceedings cannot
adjudicate title to properties claimed to be part of the
estate and which are equally CLAIMED BY petitioner
FLAG.17
The petition has no merit.
Petitioners Jose Lee and Alma Aggabao, representing Philinterlife
and FLAG, assail before us not only the validity of the writ of
execution issued by the intestate court dated July 7, 2000 but
also the validity of the August 11, 1997 order of the intestate court
nullifying the sale of the 2,029 Philinterlife shares of stock made
by Juliana Ortañez and Jose Ortañez, in their personal capacities
and without court approval, in favor of petitioner FLAG.
We cannot allow petitioners to reopen the issue of nullity of the
sale of the Philinterlife shares of stock in their favor because this
was already settled a long time ago by the Court of Appeals in its
decision dated June 23, 1998 in CA-G.R. SP No. 46342. This
decision was effectively upheld by us in our resolution dated
October 9, 1998 in G.R. No. 135177 dismissing the petition for
review on a technicality and thereafter denying the motion for
reconsideration on January 13, 1999 on the ground that there
was no compelling reason to reconsider said denial.18 Our
decision became final on February 23, 1999 and was accordingly
entered in the book of entry of judgments. For all intents and
purposes therefore, the nullity of the sale of the Philinterlife
shares of stock made by Juliana Ortañez and Jose Ortañez in
favor of petitioner FLAG is already a closed case. To reopen said
issue would set a bad precedent, opening the door wide open for
dissatisfied parties to relitigate unfavorable decisions no end. This
is completely inimical to the orderly and efficient administration of
justice.
The said decision of the Court of Appeals in CA-G.R. SP No.
46342 affirming the nullity of the sale made by Jose Ortañez and
his mother Juliana Ortañez of the Philinterlife shares of stock
read:
Petitioner’s asseverations relative to said [memorandum]
agreement were scuttled during the hearing before this Court
thus:
JUSTICE AQUINO:
Counsel for petitioner, when the Memorandum of
Agreement was executed, did the children of Juliana
Salgado know already that there was a claim for share in
the inheritance of the children of Novicio?
ATTY. CALIMAG:
Your Honor please, at that time, Your Honor, it is already
known to them.
JUSTICE AQUINO:
What can be your legal justification for extrajudicial
settlement of a property subject of intestate proceedings
when there is an adverse claim of another set of heirs,
alleged heirs? What would be the legal justification for
extra-judicially settling a property under administration
without the approval of the intestate court?
ATTY. CALIMAG:
Well, Your Honor please, in that extra-judicial settlement
there is an approval of the honorable court as to the
property’s partition x x x. There were as mentioned by the
respondents’ counsel, Your Honor.
ATTY. BUYCO:
No…
JUSTICE AQUINO:
The point is, there can be no adjudication of a property
under intestate proceedings without the approval of the
court. That is basic unless you can present justification on
that. In fact, there are two steps: first, you ask leave and
then execute the document and then ask for approval of
the document executed. Now, is there any legal
justification to exclude this particular transaction from
those steps?
ATTY. CALIMAG:
None, Your Honor.
ATTY. BUYCO:
With that admission that there is no legal justification,
Your Honor, we rest the case for the private respondent.
How can the lower court be accused of abusing its
discretion? (pages 33-35, TSN of January 29, 1998).
Thus, We find merit in the following postulation by private
respondent:
What we have here is a situation where some of the heirs of the
decedent without securing court approval have appropriated as
their own personal property the properties of [the] Estate, to the
exclusion and the extreme prejudice of the other claimant/heirs.
In other words, these heirs, without court approval, have
distributed the asset of the estate among themselves and
proceeded to dispose the same to third parties even in the
absence of an order of distribution by the Estate Court. As
admitted by petitioner’s counsel, there was absolutely no legal
justification for this action by the heirs. There being no legal
justification, petitioner has no basis for demanding that public
respondent [the intestate court] approve the sale of the
Philinterlife shares of the Estate by Juliana and Jose Ortañez in
favor of the Filipino Loan Assistance Group.
It is an undisputed fact that the parties to the Memorandum of
Agreement dated March 4, 1982 (see Annex 7 of the Comment). .
. are not the only heirs claiming an interest in the estate left by Dr.
Juvencio P. Ortañez. The records of this case. . . clearly show
that as early as March 3, 1981 an Opposition to the Application
for Issuance of Letters of Administration was filed by the
acknowledged natural children of Dr. Juvencio P. Ortañez with
Ligaya Novicio. . . This claim by the acknowledged natural
children of Dr. Juvencio P. Ortañez is admittedly known to the
parties to the Memorandum of Agreement before they executed
the same. This much was admitted by petitioner’s counsel during
the oral argument. xxx
Given the foregoing facts, and the applicable jurisprudence,
public respondent can never be faulted for not approving. . . the
subsequent sale by the petitioner [Jose Ortañez] and his mother
[Juliana Ortañez] of the Philinterlife shares belonging to the
Estate of Dr. Juvencio P. Ortañez." (pages 3-4 of Private
Respondent’s Memorandum; pages 243-244 of the Rollo)
Amidst the foregoing, We found no grave abuse of discretion
amounting to excess or want of jurisdiction committed by
respondent judge.19
From the above decision, it is clear that Juliana Ortañez, and her
three sons, Jose, Rafael and Antonio, all surnamed Ortañez,
invalidly entered into a memorandum of agreement extrajudicially
partitioning the intestate estate among themselves, despite their
knowledge that there were other heirs or claimants to the estate
and before final settlement of the estate by the intestate court.
Since the appropriation of the estate properties by Juliana
Ortañez and her children (Jose, Rafael and Antonio Ortañez) was
invalid, the subsequent sale thereof by Juliana and Jose to a third
party (FLAG), without court approval, was likewise void.
An heir can sell his right, interest, or participation in the property
under administration under Art. 533 of the Civil Code which
provides that possession of hereditary property is deemed
transmitted to the heir without interruption from the moment of
death of the decedent.20 However, an heir can only alienate such
portion of the estate that may be allotted to him in the division of
the estate by the probate or intestate court after final adjudication,
that is, after all debtors shall have been paid or the devisees or
legatees shall have been given their shares.21 This means that an
heir may only sell his ideal or undivided share in the estate, not
any specific property therein. In the present case, Juliana Ortañez
and Jose Ortañez sold specific properties of the estate (1,014
and 1,011 shares of stock in Philinterlife) in favor of petitioner
FLAG. This they could not lawfully do pending the final
adjudication of the estate by the intestate court because of the
undue prejudice it would cause the other claimants to the estate,
as what happened in the present case.
Juliana Ortañez and Jose Ortañez sold specific properties of the
estate, without court approval. It is well-settled that court approval
is necessary for the validity of any disposition of the decedent’s
estate. In the early case of Godoy vs. Orellano,22 we laid down
the rule that the sale of the property of the estate by an
administrator without the order of the probate court is void and
passes no title to the purchaser. And in the case of Dillena vs.
Court of Appeals,23 we ruled that:
[I]t must be emphasized that the questioned properties (fishpond)
were included in the inventory of properties of the estate
submitted by then Administratrix Fausta Carreon Herrera on
November 14, 1974. Private respondent was appointed as
administratrix of the estate on March 3, 1976 in lieu of Fausta
Carreon Herrera. On November 1, 1978, the questioned deed of
sale of the fishponds was executed between petitioner and
private respondent without notice and approval of the probate
court. Even after the sale, administratrix Aurora Carreon still
included the three fishponds as among the real properties of the
estate in her inventory submitted on August 13, 1981. In fact, as
stated by the Court of Appeals, petitioner, at the time of the sale
of the fishponds in question, knew that the same were part of the
estate under administration.
xxx xxx xxx
The subject properties therefore are under the jurisdiction of the
probate court which according to our settled jurisprudence has
the authority to approve any disposition regarding properties
under administration. . . More emphatic is the declaration We
made in Estate of Olave vs. Reyes (123 SCRA 767) where We
stated that when the estate of the deceased person is already the
subject of a testate or intestate proceeding, the administrator
cannot enter into any transaction involving it without prior
approval of the probate court.
Only recently, in Manotok Realty, Inc. vs. Court of Appeals (149
SCRA 174), We held that the sale of an immovable property
belonging to the estate of a decedent, in a special proceedings,
needs court approval. . . This pronouncement finds support in the
previous case of Dolores Vda. De Gil vs. Agustin Cancio (14
SCRA 797) wherein We emphasized that it is within the
jurisdiction of a probate court to approve the sale of properties of
a deceased person by his prospective heirs before final
adjudication. x x x
It being settled that property under administration needs the
approval of the probate court before it can be disposed of, any
unauthorized disposition does not bind the estate and is null and
void. As early as 1921 in the case of Godoy vs. Orellano (42 Phil
347), We laid down the rule that a sale by an administrator of
property of the deceased, which is not authorized by the probate
court is null and void and title does not pass to the purchaser.
There is hardly any doubt that the probate court can declare null
and void the disposition of the property under administration,
made by private respondent, the same having been effected
without authority from said court. It is the probate court that has
the power to authorize and/or approve the sale (Section 4 and 7,
Rule 89), hence, a fortiori, it is said court that can declare it null
and void for as long as the proceedings had not been closed or
terminated. To uphold petitioner’s contention that the probate
court cannot annul the unauthorized sale, would render
meaningless the power pertaining to the said court. (Bonga vs.
Soler, 2 SCRA 755). (emphasis ours)
Our jurisprudence is therefore clear that (1) any disposition of
estate property by an administrator or prospective heir pending
final adjudication requires court approval and (2) any
unauthorized disposition of estate property can be annulled by
the probate court, there being no need for a separate action to
annul the unauthorized disposition.
The question now is: can the intestate or probate court execute
its order nullifying the invalid sale?
We see no reason why it cannot. The intestate court has the
power to execute its order with regard to the nullity of an
unauthorized sale of estate property, otherwise its power to annul
the unauthorized or fraudulent disposition of estate property
would be meaningless. In other words, enforcement is a
necessary adjunct of the intestate or probate court’s power to
annul unauthorized or fraudulent transactions to prevent the
dissipation of estate property before final adjudication.
Moreover, in this case, the order of the intestate court nullifying
the sale was affirmed by the appellate courts (the Court of
Appeals in CA-G.R. SP No. 46342 dated June 23, 1998 and
subsequently by the Supreme Court in G.R. No. 135177 dated
October 9, 1998). The finality of the decision of the Supreme
Court was entered in the book of entry of judgments on February
23, 1999. Considering the finality of the order of the intestate
court nullifying the sale, as affirmed by the appellate courts, it was
correct for private respondent-Special Administratrix Enderes to
thereafter move for a writ of execution and for the intestate court
to grant it.
Petitioners Jose Lee, Alma Aggabao and FLAG, however,
contend that the probate court could not issue a writ of execution
with regard to its order nullifying the sale because said order was
merely provisional:
The only authority given by law is for respondent judge to
determine provisionally whether said shares are included or
excluded in the inventory… In ordering the execution of the
orders, respondent judge acted in excess of his jurisdiction and
grossly violated settled law and jurisprudence, i.e., that the
determination by a probate or intestate court of whether a
property is included or excluded in the inventory of the estate
being provisional in nature, cannot be the subject of
execution.24 (emphasis ours)
Petitioners’ argument is misplaced. There is no question, based
on the facts of this case, that the Philinterlife shares of stock were
part of the estate of Dr. Juvencio Ortañez from the very start as in
fact these shares were included in the inventory of the properties
of the estate submitted by Rafael Ortañez after he and his
brother, Jose Ortañez, were appointed special administrators by
the intestate court.25
The controversy here actually started when, during the pendency
of the settlement of the estate of Dr. Ortañez, his wife Juliana
Ortañez sold the 1,014 Philinterlife shares of stock in favor
petitioner FLAG without the approval of the intestate court. Her
son Jose Ortañez later sold the remaining 1,011 Philinterlife
shares also in favor of FLAG without the approval of the intestate
court.
We are not dealing here with the issue of inclusion or exclusion of
properties in the inventory of the estate because there is no
question that, from the very start, the Philinterlife shares of stock
were owned by the decedent, Dr. Juvencio Ortañez. Rather, we
are concerned here with the effect of the sale made by the
decedent’s heirs, Juliana Ortañez and Jose Ortañez, without
the required approval of the intestate court. This being so, the
contention of petitioners that the determination of the intestate
court was merely provisional and should have been threshed out
in a separate proceeding is incorrect.
The petitioners Jose Lee and Alma Aggabao next contend that
the writ of execution should not be executed against them
because they were not notified, nor they were aware, of the
proceedings nullifying the sale of the shares of stock.
We are not persuaded. The title of the purchaser like herein
petitioner FLAG can be struck down by the intestate court after a
clear showing of the nullity of the alienation. This is the logical
consequence of our ruling in Godoy andin several subsequent
cases.26 The sale of any property of the estate by an
administrator or prospective heir without order of the
probate or intestate court is void and passes no title to the
purchaser. Thus, in Juan Lao et al. vs. Hon. Melencio Geneto,
G.R. No. 56451, June 19, 1985, we ordered the probate court to
cancel the transfer certificate of title issued to the vendees at the
instance of the administrator after finding that the sale of real
property under probate proceedings was made without the prior
approval of the court. The dispositive portion of our decision read:
IN VIEW OF THE FOREGOING CONSIDERATIONS, the
assailed Order dated February 18, 1981 of the respondent Judge
approving the questioned Amicable Settlement is declared NULL
and VOID and hereby SET ASIDE. Consequently, the sale in
favor of Sotero Dioniosio III and by the latter to William Go is
likewise declared NULL and VOID. The Transfer Certificate of
Title issued to the latter is hereby ordered cancelled.
It goes without saying that the increase in Philinterlife’s
authorized capital stock, approved on the vote of petitioners’ non-
existent shareholdings and obviously calculated to make it difficult
for Dr. Ortañez’s estate to reassume its controlling interest in
Philinterlife, was likewise void ab initio.
Petitioners next argue that they were denied due process.
We do not think so.
The facts show that petitioners, for reasons known only to them,
did not appeal the decision of the intestate court nullifying the
sale of shares of stock in their favor. Only the vendor, Jose
Ortañez, appealed the case. A careful review of the records
shows that petitioners had actual knowledge of the estate
settlement proceedings and that they knew private respondent
Enderes was questioning therein the sale to them of the
Philinterlife shares of stock.
It must be noted that private respondent-Special Administratrix
Enderes filed before the intestate court (RTC of Quezon City,
Branch 85) a "Motion to Declare Void Ab Initio Deeds of Sale of
Philinterlife Shares of Stock" on March 22, 1996. But as early as
1994, petitioners already knew of the pending settlement
proceedings and that the shares they bought were under the
administration by the intestate court because private respondent
Ma. Divina Ortañez-Enderes and her mother Ligaya Novicio had
filed a case against them at the Securities and Exchange
Commission on November 7, 1994, docketed as SEC No. 11-94-
4909, for annulment of transfer of shares of stock, annulment of
sale of corporate properties, annulment of subscriptions on
increased capital stocks, accounting, inspection of corporate
books and records and damages with prayer for a writ of
preliminary injunction and/or temporary restraining order.27 In said
case, Enderes and her mother questioned the sale of the
aforesaid shares of stock to petitioners. The SEC hearing officer
in fact, in his resolution dated March 24, 1995, deferred to the
jurisdiction of the intestate court to rule on the validity of the sale
of shares of stock sold to petitioners by Jose Ortañez and Juliana
Ortañez:
Petitioners also averred that. . . the Philinterlife shares of Dr.
Juvencio Ortañez who died, in 1980, are part of his estate which
is presently the subject matter of an intestate proceeding of the
RTC of Quezon City, Branch 85. Although, private respondents
[Jose Lee et al.] presented the documents of partition whereby
the foregoing share of stocks were allegedly partitioned and
conveyed to Jose S. Ortañez who allegedly assigned the same to
the other private respondents, approval of the Court was not
presented. Thus, the assignments to the private respondents
[Jose Lee et al.] of the subject shares of stocks are void.
xxx xxx xxx
With respect to the alleged extrajudicial partition of the shares of
stock owned by the late Dr. Juvencio Ortañez, we rule that the
matter properly belongs to the jurisdiction of the regular court
where the intestate proceedings are currently pending.28
With this resolution of the SEC hearing officer dated as early as
March 24, 1995 recognizing the jurisdiction of the intestate court
to determine the validity of the extrajudicial partition of the estate
of Dr. Ortañez and the subsequent sale by the heirs of the
decedent of the Philinterlife shares of stock to petitioners, how
can petitioners claim that they were not aware of the intestate
proceedings?
Furthermore, when the resolution of the SEC hearing officer
reached the Supreme Court in 1996 (docketed as G.R. 128525),
herein petitioners who were respondents therein filed their
answer which contained statements showing that they knew of
the pending intestate proceedings:
[T]he subject matter of the complaint is not within the jurisdiction
of the SEC but with the Regional Trial Court; Ligaya Novicio and
children represented themselves to be the common law wife and
illegitimate children of the late Ortañez; that on March 4, 1982,
the surviving spouse Juliana Ortañez, on her behalf and for her
minor son Antonio, executed a Memorandum of Agreement with
her other sons Rafael and Jose, both surnamed Ortañez, dividing
the estate of the deceased composed of his one-half (1/2) share
in the conjugal properties; that in the said Memorandum of
Agreement, Jose S. Ortañez acquired as his share of the estate
the 1,329 shares of stock in Philinterlife; that on March 4, 1982,
Juliana and Rafael assigned their respective shares of stock in
Philinterlife to Jose; that contrary to the contentions of petitioners,
private respondents Jose Lee, Carlos Lee, Benjamin Lee and
Alma Aggabao became stockholders of Philinterlife on March 23,
1983 when Jose S. Ortañez, the principal stockholder at that
time, executed a deed of sale of his shares of stock to private
respondents; and that the right of petitioners to question the
Memorandum of Agreement and the acquisition of shares of
stock of private respondent is barred by prescription.29
Also, private respondent-Special Administratrix Enderes offered
additional proof of actual knowledge of the settlement
proceedings by petitioners which petitioners never denied: (1)
that petitioners were represented by Atty. Ricardo Calimag
previously hired by the mother of private respondent Enderes to
initiate cases against petitioners Jose Lee and Alma Aggabao for
the nullification of the sale of the shares of stock but said counsel
made a conflicting turn-around and appeared instead as counsel
of petitioners, and (2) that the deeds of sale executed between
petitioners and the heirs of the decedent (vendors Juliana
Ortañez and Jose Ortañez) were acknowledged before Atty.
Ramon Carpio who, during the pendency of the settlement
proceedings, filed a motion for the approval of the sale of
Philinterlife shares of stock to the Knights of Columbus Fraternal
Association, Inc. (which motion was, however, later
abandoned).30 All this sufficiently proves that petitioners, through
their counsels, knew of the pending settlement proceedings.
Finally, petitioners filed several criminal cases such as libel
(Criminal Case No. 97-7179-81), grave coercion (Criminal Case
No. 84624) and robbery (Criminal Case No. Q-96-67919) against
private respondent’s mother Ligaya Novicio who was a director of
Philinterlife,31 all of which criminal cases were related to the
questionable sale to petitioners of the Philinterlife shares of stock.
Considering these circumstances, we cannot accept petitioners’
claim of denial of due process. The essence of due process is the
reasonable opportunity to be heard. Where the opportunity to be
heard has been accorded, there is no denial of due process.32 In
this case, petitioners knew of the pending instestate proceedings
for the settlement of Dr. Juvencio Ortañez’s estate but for
reasons they alone knew, they never intervened. When the court
declared the nullity of the sale, they did not bother to appeal. And
when they were notified of the motion for execution of the Orders
of the intestate court, they ignored the same. Clearly, petitioners
alone should bear the blame.
Petitioners next contend that we are bound by our ruling in G.R.
No. 128525 entitled Ma. Divina Ortañez-Enderes vs. Court of
Appeals, dated December 17, 1999, where we allegedly ruled
that the intestate court "may not pass upon the title to a certain
property for the purpose of determining whether the same should
or should not be included in the inventory but such determination
is not conclusive and is subject to final decision in a separate
action regarding ownership which may be constituted by the
parties."
We are not unaware of our decision in G.R. No. 128525. The
issue therein was whether the Court of Appeals erred in affirming
the resolution of the SEC that Enderes et al. were not entitled to
the issuance of the writ of preliminary injunction. We ruled that
the Court of Appeals was correct in affirming the resolution of the
SEC denying the issuance of the writ of preliminary injunction
because injunction is not designed to protect contingent rights.
Said case did not rule on the issue of the validity of the sale of
shares of stock belonging to the decedent’s estate without court
approval nor of the validity of the writ of execution issued by the
intestate court. G.R. No. 128525 clearly involved a different issue
and it does not therefore apply to the present case.

Petitioners and all parties claiming rights under them are hereby
warned not to further delay the execution of the Orders of the
intestate court dated August 11 and August 29, 1997.

WHEREFORE, the petition is hereby DENIED. The decision of

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

SO ORDERED.
G.R. No. 141634 February 5, 2001
Heirs of Spouses REMEDIOS R. SANDEJAS and ELIODORO
P. SANDEJAS SR. -- ROBERTO R. SANDEJAS, ANTONIO R.
SANDEJAS, CRISTINA SANDEJAS MORELAND, BENJAMIN
R. SANDEJAS, REMEDIOS R. SANDEJAS, and heirs of SIXTO
S. SANDEJAS II, RAMON R. SANDEJAS, TERESITA R.
SANDEJAS, and ELIODORO R. SANDEJAS JR., all
represented by ROBERTO R. SANDEJAS, petitioners,
vs.
ALEX A. LINA, respondent.
PANGANIBAN, J.:
A contract of sale is not invalidated by the fact that it is subject to
probate court approval. The transaction remains binding on the
seller-heir, but not on the other heirs who have not given their
consent to it. In settling the estate of the deceased, a probate
court has jurisdiction over matters incidental and collateral to the
exercise of its recognized powers. Such matters include selling,
mortgaging or otherwise encumbering realty belonging to the
estate. Rule 89, Section 8 of the Rules of Court, deals with the
conveyance of real property contracted by the decedent while still
alive. In contrast with Sections 2 and 4 of the same Rule, the said
provision does not limit to the executor or administrator the right
to file the application for authority to sell, mortgage or otherwise
encumber realty under administration. The standing to pursue
such course of action before the probate court inures to any
person who stands to be benefited or injured by the judgment or
to be entitled to the avails of the suit.
1âwphi1.nêt
The Case
Before us is a Petition for Review under Rule 45 of the Rules of
Court, seeking to reverse and set aside the Decision1 dated April
16, 1999 and the Resolution2 dated January 12, 2000, both
promulgated by the Court of Appeals in CA-GR CV No. 49491.
The dispositive portion of the assailed Decision reads as follows:3
"WHEREFORE, for all the foregoing, [w]e hereby
MODIFY the [O]rder of the lower court dated January 13,
1995, approving the Receipt of Earnest Money With
Promise to Buy and Sell dated June 7, 1982, only to the
three-fifth (3/5) portion of the disputed lots covering the
share of [A]dministrator Eliodoro Sandejas, Sr. [in] the
property. The intervenor is hereby directed to pay
appellant the balance of the purchase price of the three-
fifth (3/5) portion of the property within thirty (30) days
from receipt of this [O]rder and x x x the administrator [is
directed] to execute the necessary and proper deeds of
conveyance in favor of appellee within thirty (30) days
thereafter."
The assailed Resolution denied reconsideration of the foregoing
disposition.
The Facts
The facts of the case, as narrated by the Court of Appeals (CA),
are as follows:4
"On February 17, 1981, Eliodoro Sandejas, Sr. filed a
petition (Record, SP. Proc. No. R-83-15601, pp. 8-10) in
the lower court praying that letters of administration be
issued in his favor for the settlement of the estate of his
wife, REMEDIOS R. SANDEJAS, who died on April 17,
1955. On July 1, 1981, Letters of Administration [were
issued by the lower court appointing Eliodoro Sandejas,
Sr. as administrator of the estate of the late Remedios
Sandejas (Record, SP. Proc. No. R-83-15601, p. 16).
Likewise on the same date, Eliodoro Sandejas, Sr. took
his oath as administrator (Record, SP. Proc. No. R-83-
15601, p. 17). x x x.
"On November 19, 1981, the 4th floor of Manila City Hall
was burned and among the records burned were the
records of Branch XI of the Court of First Instance of
Manila. As a result, [A]dministrator Eliodoro Sandejas, Sr.
filed a [M]otion for [R]econstitution of the records of the
case on February 9, 1983 (Record, SP. Proc. No. R-83-
15601, pp. 1-5). On February 16, 1983, the lower court in
its [O]rder granted the said motion (Record, SP. Proc. No.
R-83-15601, pp. 28-29).
"On April 19, 1983, an Omnibus Pleading for motion to
intervene and petition-in-intervention was filed by
[M]ovant Alex A. Lina alleging among others that on June
7, 1982, movant and [A]dministrator Eliodoro P. Sandejas,
in his capacity as seller, bound and obligated himself, his
heirs, administrators, and assigns, to sell forever and
absolutely and in their entirety the following parcels of
land which formed part of the estate of the late Remedios
R. Sandejas, to wit:
1. 'A parcel of land (Lot No.22 Block No. 45 of the
subdivision plan Psd-21121, being a portion of
Block 45 described on plan Psd-19508, G.L.R.O.
Rec. No. 2029), situated in the "Municipality of
Makati, province of Rizal, containing an area of
TWO HUNDRED SEVENTY (270) SQUARE
METERS, more or less, with TCT No. 13465;
2. 'A parcel of land (Lot No. 21 Block No. 45 of the
subdivision plan Psd-21141, being a portion of
Block 45 described on plan Psd-19508 G.L.R.O.
Rec. No. 2029), situated in the Municipality of
Makati, Province of Rizal, containing an area of
TWO HUNDRED SEVENTY (270) SQUARE
METERS, more or less, with TCT No. 13464;'
3. 'A parcel of land (Lot No. 5 Block No. 45 of the
subdivision plan Psd-21141, being a portion of
Block 45 described on plan Psd-19508 G.L.R.O.
Rec. No. 2029), situated in the Municipality of
Makati, Province of Rizal, containing an area of
TWO HUNDRED EIGHT (208) SQUARE
METERS, more or less, with TCT No. 13468;'
4. 'A parcel of land (Lot No. 6, Block No. 45 of the
subdivision plan Psd-21141, being a portion of
Block 45 described on plan Psd-19508 G.L.R.O.
Rec. No. 2029), situated in the Municipality of
Makati, Province of Rizal, containing an area of
TWO HUNDRED EIGHT (208) SQUARE
METERS, more or less, with TCT No. 13468;'
"The [R]eceipt of the [E]arnest [M]oney with [P]romise to
[S]ell and to [B]uy is hereunder quoted, to wit:
'Received today from MR. ALEX A. LINA the sum
of ONE HUNDRED THOUSAND (P100,000.00)
PESOS, Philippine Currency, per Metropolitan
Bank & Trust Company Chec[k] No. 319913 dated
today for P100,000.00, x x x as additional earnest
money for the following:
xxx xxx xxx
all registered with the Registry of Deeds of the
[P]rovince of Rizal (Makati Branch Office) in the
name of SELLER 'EL!ODORO SANDEJAS,
Filipino Citizen, of legal age, married to Remedios
Reyes de Sandejas;' and which undersigned, as
SELLER, binds and obligates himself, his heirs,
administrators and assigns, to sell forever and
absolutely in their entirety (all of the four (4)
parcels of land above described, which are
contiguous to each other as to form one big lot) to
said Mr. Alex A. Lina, who has agreed to buy all of
them, also binding on his heirs, administrators and
assigns, for the consideration of ONE MILLION
(P1,000,000.00) PESOS, Philippine Currency,
upon such reasonable terms of payment as may
be agreed upon by them. The parties have,
however, agreed on the following terms and
conditions:
'1. The P100,000.00 herein received is in addition
to the P70,000.00 earnest money already
received by SELLER from BUYER, all of which
shall form part of, and shall be deducted from, the
purchase price of P1,000,000.00, once the deed
of absolute [sale] shall be executed;
'2. As a consideration separate and distinct from
the price, undersigned SELLER also
acknowledges receipt from Mr. Alex A. Lina of the
sum of ONE THOUSAND (P1,000.00) PESOS,
Philippine Currency, per Metropolitan Bank &
Trust Company Check No. 319912 dated today
and payable to SELLER for P1,000.00;
'3. Considering that Mrs. Remedios Reyes de
Sandejas is already deceased and as there is a
pending intestate proceedings for the settlement
of her estate (Spec. Proc. No.138393, Manila CFI,
Branch XI), wherein SELLER was appointed as
administrator of said Estate, and as SELLER, in
his capacity as administrator of said Estate, has
informed BUYER that he (SELLER) already filed a
[M]otion with the Court for authority to sell the
above parcels of land to herein BUYER, but which
has been delayed due to the burning of the
records of said Spec. Pro. No. 138398, which
records are presently under reconstitution, the
parties shall have at least ninety (90) days from
receipt of the Order authorizing SELLER, in his
capacity as administrator, to sell all THE ABOVE
DESCRIBED PARCELS OF LAND TO HEREIN
BUYER (but extendible for another period of
ninety (90) days upon the request of either of the
parties upon the other), within which to execute
the deed of absolute sale covering all above
parcels of land;
'4. In the event the deed of absolute sale shall not
proceed or not be executed for causes either due
to SELLER'S fault, or for causes of which the
BUYER is innocent, SELLER binds himself to
personally return to Mr. Alex A. Lina the entire
ONE HUNDRED SEVENTY THOUSAND
([P]170,000.00) PESOS In earnest money
received from said Mr. Lina by SELLER, plus
fourteen (14%) percentum interest per annum, all
of which shall be considered as liens of said
parcels of land, or at least on the share therein of
herein SELLER;
'5. Whether indicated or not, all of above terms
and conditions shall be binding on the heirs,
administrators, and assigns of both the SELLER
(undersigned MR. ELIODORO P. SANDEJAS,
SR.) and BUYER (MR. ALEX A. LINA).' (Record,
SP. Proc. No. R-83-15601, pp. 52-54)
"On July 17, 1984, the lower court issued an [O]rder
granting the intervention of Alex A. Lina (Record, SP.
Proc. No. R-83-15601, p. 167).
"On January 7, 1985, the counsel for [A]dministrator
Eliodoro P. Sandejas filed a [M]anifestation alleging
among others that the administrator, Mr. Eliodoro P.
Sandejas, died sometime in November 1984 in Canada
and said counsel is still waiting for official word on the fact
of the death of the administrator. He also alleged, among
others that the matter of the claim of Intervenor Alex A.
Lina becomes a money claim to be filed in the estate of
the late Mr. Eliodoro P. Sandejas (Record, SP. Proc. No.
R-83-15601, p. 220). On February 15, 1985, the, lower
court issued an [O]rder directing, among others, that the
counsel for the four (4) heirs and other heirs of Teresita R.
Sandejas to move for the appointment of [a] new
administrator within fifteen (15) days from receipt of this
[O]rder (Record, SP. Proc. No. R-83-15601, p. 227). In
the same manner, on November 4, 1985, the lower court
again issued an order, the content of which reads:
'On October 2, 1985, all the heirs, Sixto, Roberto,
Antonio, Benjamin all surnamed Sandejas were
ordered to move for the appointment of [a] new
administrator. On October 16, 1985, the same
heirs were given a period of fifteen (15) days from
said date within which to move for the
appointment of the new administrator. Compliance
was set for October 30, 1985, no appearance for
the aforenamed heirs. The aforenamed heirs are
hereby ordered to show cause within fifteen (15)
days from receipt of this Order why this Petition
for Settlement of Estate should not be dismissed
for lack of interest and failure to comply with a
lawful order of this Court.
'SO ORDERED.' (Record, SP. Proc. No. R-83-
15601, p. 273).
"On November 22, 1985, Alex A. Lina as petitioner filed
with the Regional Trial Court of Manila an Omnibus
Pleading for (1) petition for letters of administration [and]
(2) to consolidate instant case with SP. Proc. No. R-83-
15601 RTC-Branch XI-Manila, docketed therein as SP.
Proc. No. 85- 33707 entitled 'IN RE: INTESTATE
ESTATE OF ELIODORO P. SANDEJAS, SR., ALEX A.
LINA PETITIONER", [for letters of administration]
(Record, SP. Proc. No.85-33707, pp. 1-7). On November
29, 1985, Branch XXXVI of the Regional Trial Court of
Manila issued an [O]rder consolidating SP. Proc. No. 85-
33707, with SP. Proc. No. R-83-15601 (Record, SP. Proc.
No. 85-33707, p. 13). Likewise, on December 13, 1985,
the Regional Trial Court of Manila, Branch XI, issued an
[O]rder stating that 'this Court has no objection to the
consolidation of Special proceedings No. 85-331707, now
pending before Branch XXXVI of this Court, with the
present proceedings now pending before this Branch'
(Record, SP. Proc. No. R-83- 15601, p. 279).
"On January 15, 1986, Intervenor Alex A. Lina filed [a]
Motion for his appointment as a new administrator of the
Intestate Estate of Remedios R. Sandejas on the
following reasons:
'5.01. FIRST, as of this date, [i]ntervenor has not
received any motion on the part of the heirs Sixto,
Antonio, Roberto and Benjamin, all surnamed
Sandejas, for the appointment of anew
[a]dministrator in place of their father, Mr. Eliodoro
P. Sandejas, Sr.;
'5.02. SECOND, since Sp. Proc. 85-33707,
wherein the [p]etitioner is herein Intervenor Alex
A. Lina and the instant Sp. PROC. R-83-15601, in
effect are already consolidated, then the
appointment of Mr. Alex Lina as [a]dministrator of
the Intestate Estate of Remedios R. Sandejas in
instant Sp. Proc. R-83-15601, would be beneficial
to the heirs and also to the Intervenor;
'5.03. THIRD, of course, Mr. Alex A. Lina would be
willing to give way at anytime to any
[a]dministrator who may be proposed by the heirs
of the deceased Remedios R. Sandejas, so long
 as such [a]dministrator is qualified.' (Record, SP.
Proc. No. R-83-15601, pp. 281-283)
"On May 15, 1986, the lower court issued an order
granting the [M]otion of Alex A. Lina as the new
[a]dministrator of the Intestate Estate of Remedios R.
Sandejas in this proceedings. (Record, SP. Proc. No. R-
83-15601, pp. 288- 290)
"On August 281 1986, heirs Sixto, Roberto, Antonio and
Benjamin, all surnamed Sandejas, and heirs [sic] filed a
[M]otion for [R]econsideration and the appointment of
another administrator Mr. Sixto Sandejasl in lieu of
[I]ntervenor Alex A. Lina stating among others that it [was]
only lately that Mr. Sixto Sandejas, a son and heir,
expressed his willingness to act as a new administrator of
the intestate estate of his mother, Remedios R. Sandejas
(Record, SP. Proc. No. 85-33707, pp. 29-31). On October
2, 1986, Intervenor Alex A. Lina filed his [M]anifestation
and [C]ounter [M]otion alleging that he ha[d] no objection
to the appointment of Sixto Sandejas as [a]dministrator of
the [i]ntestate [e]state of his mother Remedios R.
Sandejas (Sp. Proc. No.85-15601), provided that Sixto
Sandejas be also appointed as administrator of the
[i]ntestate [e]state of his father, Eliodoro P . Sandejas, Sr.
(Spec. Proc. No. 85-33707), which two (2) cases have
been consolidated (Record, SP. Proc. No. 85-33707, pp.
34-36). On March 30, 1987, the lower court granted the
said [M]otion and substituted Alex Lina with Sixto
Sandejas as petitioner in the said [P]etitions (Record, SP.
Proc. No. 85-33707, p. 52). After the payment of the
administrator's bond (Record, SP. Proc. No. 83-15601,
pp. 348-349) and approval thereof by the court (Record,
SP. Proc. No. 83-15601, p. 361), Administrator Sixto
Sandejas on January 16, 1989 took his oath as
administrator of the estate of the deceased Remedios R.
Sandejas and Eliodoro P. Sandejas (Record, SP. Proc.
No. 83-15601, p. 367) and was likewise issued Letters of
Administration on the same day (Record, SP. Proc. No.
83-15601, p. 366).
"On November 29, 1993, Intervenor filed [an] Omnibus
Motion (a) to approve the deed of conditional sale
executed between Plaintiff-in-lntervention Alex A. Lina
and Elidioro [sic] Sandejas, Sr. on June 7, 1982; (b) to
compel the heirs of Remedios Sandejas and Eliodoro
Sandejas, Sr. thru their administrator, to execute a deed
of absolute sale in favor of [I]ntervenor Alex A. Lina
pursuant to said conditional deed of sale (Record, SP.
Proc. No. 83-15601, pp. 554-561) to which the
administrator filed a [M]otion to [D]ismiss and/or
[O]pposition to said omnibus motion on December 13,
1993 (Record, SP. Proc. No.83-15601, pp. 591-603).
"On January 13, 1995, the lower court rendered the
questioned order granting intervenor's [M]otion for the
[A]pproval of the Receipt of Earnest Money with promise
to buy between Plaintiff-in-lntervention Alex A. Lina and
Eliodoro Sandejas, Sr. dated June 7, 1982 (Record, SP.
Proc. No. 83-15601, pp. 652-654 ). x x x."
The Order of the intestate courts disposed as follows:
"WHEREFORE, [i]ntervenor's motion for the approval of
the Receipt Of Earnest Money With Promise To Sell And
To Buy dated June 7, 1982, is granted. The [i]ntervenor is
directed to pay the balance of the purchase price
amounting to P729,000.00 within thirty (30) days from
receipt of this Order and the Administrator is directed to
execute within thirty (30) days thereafter the necessary
and proper deeds of conveyancing."6
Ruling of the Court of Appeals
Overturning the RTC ruling, the CA held that the contract
between Eliodoro Sandejas Sr. and respondent was merely a
contract to sell, not a perfected contract of sale. It ruled that the
ownership of the four lots was to remain in the intestate estate of
Remedios Sandejas until the approval of the sale was obtained
from the settlement court. That approval was a positive
suspensive condition, the nonfulfillment of which was not
tantamount to a breach. It was simply an event that prevented the
obligation from maturing or becoming effective. If the condition
did not happen, the obligation would not arise or come into
existence.
The CA held that Section 1, Rule 897 of the Rules of Court was
inapplicable, because the lack of written notice to the other heirs
showed the lack of consent of those heirs other than Eliodoro
Sandejas Sr. For this reason, bad faith was imputed to him, for no
one is allowed to enjoyed a claim arising from one’s own
wrongdoing. Thus, Eliodoro Sr. was bound, as a matter of justice
and good faith, to comply with his contractual commitments as an
owner and heir. When he entered into the agreement with
respondent, he bound his conjugal and successional shares in
the property.
Hence, this Petition.8
Issues
In their Memorandum, petitioners submit the following issues for
our resolution:
"a) Whether or not Eliodoro P. Sandejas Sr. is legally
obligated to convey title to the property referred to in the
subject document which was found to be in the nature of
a contract to sell - where the suspensive condition set
forth therein [i.e.] court approval, was not complied with;
"b) Whether or not Eliodoro P. Sandejas Sr. was guilty of
bad faith despite the conclusion of the Court of Appeals
that the respondent [bore] the burden of proving that a
motion for authority to sell ha[d] been filed in court;
"c) Whether or not the undivided shares of Eliodoro P.
Sandejas Sr. in the subject property is three-fifth (3/5) and
the administrator of the latter should execute deeds of
conveyance therefor within thirty days from receipt of the
balance of the purchase price from the respondent; and
"d) Whether or not the respondent's petition-in-
intervention was converted to a money claim and whether
the [trial court] acting as a probate court could approve
the sale and compel the petitioners to execute [a] deed of
conveyance even for the share alone of Eliodoro P.
Sandejas Sr."9
In brief, the Petition poses the main issue of whether the CA
erred in modifying the trial court's Decision and in obligating
petitioners to sell 3/5 of the disputed properties to respondent,
even if the suspensive condition had not been fulfilled. It also
raises the following collateral issues: (1) the settlement court's
jurisdiction; (2) respondent-intervenor's standing to file an
application for the approval of the sale of realty in the settlement
case, (3) the decedent's bad faith, and (4) the computation of the
decedent's share in the realty under administration.
This Court’s Ruling
The Petition is partially meritorious.
Main Issue:
Obligation With a Suspensive Condition
Petitioners argue that the CA erred in ordering the conveyance of
the disputed 3/5 of the parcels of land, despite the nonfulfillment
of the suspensive condition -- court approval of the sale -- as
contained in the "Receipt of Earnest Money with Promise to Sell
and to Buy" (also referred to as the "Receipt"). Instead, they
assert that because this condition had not been satisfied, their
obligation to deliver the disputed parcels of land was converted
into a money claim.
We disagree. Petitioners admit that the agreement between the
deceased Eliodoro Sandejas Sr. and respondent was a contract
to sell. Not exactly. In a contract to sell, the payment of the
purchase price is a positive suspensive condition. The vendor's
obligation to convey the title does not become effective in case of
failure to pay.10
On the other hand, the agreement between Eliodoro Sr. and
respondent is subject to a suspensive condition -- the
procurement of a court approval, not full payment. There was no
reservation of ownership in the agreement. In accordance with
paragraph 1 of the Receipt, petitioners were supposed to deed
the disputed lots over to respondent. This they could do upon the
court's approval, even before full payment. Hence, their contract
was a conditional sale, rather than a contract to sell as
determined by the CA.
When a contract is subject to a suspensive condition, its birth or
effectivity can take place only if and when the condition happens
or is fulfilled.11 Thus, the intestate court's grant of the Motion for
Approval of the sale filed by respondent resulted in petitioners'
obligation to execute the Deed of Sale of the disputed lots in his
favor. The condition having been satisfied, the contract was
perfected. Henceforth, the parties were bound to fulfil what they
had expressly agreed upon.
Court approval is required in any disposition of the decedent's
estate per Rule 89 of the Rules of Court. Reference to judicial
approval, however, cannot adversely affect the substantive rights
of heirs to dispose of their own pro indiviso shares in the co-
heirship or co-ownership.12 In other words, they can sell their
rights, interests or participation in the property under
administration. A stipulation requiring court approval does not
affect the validity and the effectivity of the sale as regards the
selling heirs. It merely implies that the property may be taken out
of custodia legis, but only with the court's permission.13 It would
seem that the suspensive condition in the present conditional sale
was imposed only for this reason.
Thus, we are not persuaded by petitioners' argument that the
obligation was converted into a mere monetary claim. Paragraph
4 of the Receipt, which petitioners rely on, refers to a situation
wherein the sale has not materialized. In such a case," the seller
is bound to return to the buyer the earnest money paid plus
interest at fourteen percent per annum. But the sale was
approved by the intestate court; hence, the proviso does not
apply.
Because petitioners did not consent to the sale of their ideal
shares in the disputed lots, the CA correctly limited the scope of
the Receipt to the pro-indiviso share of Eliodoro Sr. Thus, it
correctly modified the intestate court's ruling by excluding their
shares from the ambit of the transaction.
First Collateral Issue:
Jurisdiction of Settlement Court
Petitioners also fault the CA Decision by arguing, inter alia, (a)
jurisdiction over ordinary civil action seeking not merely to enforce
a sale but to compel performance of a contract falls upon a civil
court, not upon an intestate court; and (b) that Section 8 of Rule
89 allows the executor or administrator, and no one else, to file
an application for approval of a sale of the property under
administration.
Citing Gil v. Cancio14 and Acebedo v. Abesamis,15 petitioners
contend that the CA erred in clothing the settlement court with the
jurisdiction to approve the sale and to compel petitioners to
execute the Deed of Sale. They allege factual differences
between these cases and the instant case, as follows: in Gil, the
sale of the realty in administration was a clear and an
unequivocal agreement for the support of the widow and the
adopted child of the decedent; and in Acebedo, a clear sale had
been made, and all the heirs consented to the disposition of their
shares in the realty in administration.
We are not persuaded. We hold that Section 8 of Rule 89 allows
this action to proceed. The factual differences alleged by
petitioners have no bearing on the intestate court's jurisdiction
over the approval of the subject conditional sale. Probate
jurisdiction covers all matters relating to the settlement of estates
(Rules 74 & 86-91) and the probate of wills (Rules 75-77) of
deceased persons, including the appointment and the removal of
administrators and executors (Rules 78-85). It also extends to
matters incidental and collateral to the exercise of a probate
court's recognized powers such as selling, mortgaging or
otherwise encumbering realty belonging to the estate. Indeed, the
rules on this point are intended to settle the estate in a speedy
manner, so that the benefits that may flow from such settlement
may be immediately enjoyed by the heirs and the beneficiaries.16
In the present case, the Motion for Approval was meant to settle
the decedent's obligation to respondent; hence, that obligation
clearly falls under the jurisdiction of the settlement court. To
require respondent to file a separate action -- on whether
petitioners should convey the title to Eliodoro Sr.'s share of the
disputed realty -- will unnecessarily prolong the settlement of the
intestate estates of the deceased spouses.
The suspensive condition did not reduce the conditional sale
between Eliodoro Sr. and respondent to one that was "not a
definite, clear and absolute document of sale," as contended by
petitioners. Upon the occurrence of the condition, the conditional
sale became a reciprocally demandable obligation that is binding
upon the parties.17 That Acebedo also involved a conditional sale
of real property18 proves that the existence of the suspensive
condition did not remove that property from the jurisdiction of the
intestate court.
Second Collateral Issue:
Intervenor's Standing
Petitioners contend that under said Rule 89, only the executor or
administrator is authorized to apply for the approval of a sale of
realty under administration. Hence, the settlement court allegedly
erred in entertaining and granting respondent's Motion for
Approval.
1âwphi1.nêt
We read no such limitation. Section 8, Rule 89 of the Rules of
Court, provides:
"SEC. 8. When court may authorize conveyance of realty
which deceased contracted to convey. Notice. Effect of
deed. -- Where the deceased was in his lifetime under
contract, binding in law, to deed real property, or an
interest therein, the court having jurisdiction of the estate
may, on application for that purpose, authorize the
executor or administrator to convey such property
according to such contract, or with such modifications as
are agreed upon by the parties and approved by the
court; and if the contract is to convey real property to the
executor or administrator, the clerk of the court shall
execute the deed. x x x."
This provision should be differentiated from Sections 2 and 4 of
the same Rule, specifically requiring only the executor or
administrator to file the application for authority to sell, mortgage
or otherwise encumber real estate for the purpose of paying
debts, expenses and legacies (Section 2);19 or for authority to sell
real or personal estate beneficial to the heirs, devisees or
legatees and other interested persons, although such authority is
not necessary to pay debts, legacies or expenses of
administration (Section 4).20 Section 8 mentions only an
application to authorize the conveyance of realty under a contract
that the deceased entered into while still alive. While this Rule
does not specify who should file the application, it stands to
reason that the proper party must be one .who is to be benefited
or injured by the judgment, or one who is to be entitled to the
avails of the suit.21
Third Collateral Issue:
Bad Faith
Petitioners assert that Eliodoro Sr. was not in bad faith, because
(a) he informed respondent of the need to secure court approval
prior to the sale of the lots, and (2) he did not promise that he
could obtain the approval.
We agree. Eliodoro Sr. did not misrepresent these lots to
respondent as his own properties to which he alone had a title in
fee simple. The fact that he failed to obtain the approval of the
conditional sale did not automatically imply bad faith on his part.
The CA held him in bad faith only for the purpose of binding him
to the conditional sale. This was unnecessary because his being
bound to it is, as already shown, beyond cavil.
Fourth Collateral Issue:
Computation of Eliodoro's Share
Petitioners aver that the CA's computation of Eliodoro Sr.'s share
in the disputed parcels of land was erroneous because, as the
conjugal partner of Remedios, he owned one half of these lots
plus a further one tenth of the remaining half, in his capacity as a
one of her legal heirs. Hence, Eliodoro's share should be 11/20 of
the entire property. Respondent poses no objection to this
computation.22
On the other hand, the CA held that, at the very least, the
conditional sale should cover the one half (1/2) pro indiviso
conjugal share of Eliodoro plus his one tenth (1/10) hereditary
share as one of the ten legal heirs of the decedent, or a total of
three fifths (3/5) of the lots in administration.23
Petitioners' correct. The CA computed Eliodoro's share as an heir
based on one tenth of the entire disputed property. It should be
based only on the remaining half, after deducting the conjugal
share.24
The proper determination of the seller-heir's shares requires
further explanation. Succession laws and jurisprudence require
that when a marriage is dissolved by the death of the husband or
the wife, the decedent's entire estate - under the concept of
conjugal properties of gains -- must be divided equally, with one
half going to the surviving spouse and the other half to the heirs
of the deceased.25 After the settlement of the debts and
obligations, the remaining half of the estate is then distributed to
the legal heirs, legatees and devices. We assume, however, that
this preliminary determination of the decedent's estate has
already been taken into account by the parties, since the only
issue raised in this case is whether Eliodoro's share is 11/20 or
3/5 of the disputed lots.
WHEREFORE, The Petition is hereby PARTIALLY
GRANTED. The appealed Decision and Resolution
are AFFIRMED with the MODIFICATION that respondent is
entitled to only a pro-indiviso share equivalent to 11/20 of the
disputed lots.
SO ORDERED.
G.R. No. 169129 March 28, 2007
SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS,
SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS,
ERNESTO F. SANTOS, and TADEO F. SANTOS, Petitioners,
vs.
SPS. JOSE LUMBAO and PROSERFINA
LUMBAO, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule
45 of the 1997 Revised Rules of Civil Procedure seeking to annul
and set aside the Decision1 and Resolution2 of the Court of
Appeals in CA-G.R. CV No. 60450 entitled, Spouses Jose
Lumbao and Proserfina Lumbao v. Spouses Virgilio F. Santos
and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas
F. Santos, Ernesto F. Santos and Tadeo F. Santos, dated 8 June
2005 and 29 July 2005, respectively, which granted the appeal
filed by herein respondents Spouses Jose Lumbao and
Proserfina Lumbao (Spouses Lumbao) and ordered herein
petitioners Spouses Virgilio F. Santos and Esperanza Lati,
Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F.
Santos and Tadeo F. Santos to reconvey to respondents
Spouses Lumbao the subject property and to pay the latter
attorney’s fees and litigation expenses, thus, reversing the
Decision3 of the Regional Trial Court (RTC) of Pasig City, dated
17 June 1998 which dismissed the Complaint for Reconveyance
with Damages filed by respondents Spouses Lumbao for lack of
merit.
Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all
surnamed Santos, are the legitimate and surviving heirs of the
late Rita Catoc Santos (Rita), who died on 20 October 1985. The
other petitioners Esperanza Lati and Lagrimas Santos are the
daughters-in-law of Rita.
Herein respondents Spouses Jose Lumbao and Proserfina
Lumbao are the alleged owners of the 107-square meter lot
(subject property), which they purportedly bought from Rita during
her lifetime.
The facts of the present case are as follows:
On two separate occasions during her lifetime, Rita sold to
respondents Spouses Lumbao the subject property which is a
part of her share in the estate of her deceased mother, Maria
Catoc (Maria), who died intestate on 19 September 1978. On the
first occasion, Rita sold 100 square meters of her inchoate share
in her mother’s estate through a document denominated as
"Bilihan ng Lupa," dated 17 August 1979.4 Respondents Spouses
Lumbao claimed the execution of the aforesaid document was
witnessed by petitioners Virgilio and Tadeo, as shown by their
signatures affixed therein. On the second occasion, an additional
seven square meters was added to the land as evidenced by a
document also denominated as "Bilihan ng Lupa," dated 9
January 1981.5
After acquiring the subject property, respondents Spouses
Lumbao took actual possession thereof and erected thereon a
house which they have been occupying as exclusive owners up
to the present. As the exclusive owners of the subject property,
respondents Spouses Lumbao made several verbal demands
upon Rita, during her lifetime, and thereafter upon herein
petitioners, for them to execute the necessary documents to
effect the issuance of a separate title in favor of respondents
Spouses Lumbao insofar as the subject property is concerned.
Respondents Spouses Lumbao alleged that prior to her death,
Rita informed respondent Proserfina Lumbao she could not
deliver the title to the subject property because the entire property
inherited by her and her co-heirs from Maria had not yet been
partitioned.
On 2 May 1986, the Spouses Lumbao claimed that petitioners,
acting fraudulently and in conspiracy with one another, executed
a Deed of Extrajudicial Settlement,6 adjudicating and partitioning
among themselves and the other heirs, the estate left by Maria,
which included the subject property already sold to respondents
Spouses Lumbao and now covered by TCT No. 817297 of the
Registry of Deeds of Pasig City.
On 15 June 1992, respondents Spouses Lumbao, through
counsel, sent a formal demand letter8 to petitioners but despite
receipt of such demand letter, petitioners still failed and refused to
reconvey the subject property to the respondents Spouses
Lumbao. Consequently, the latter filed a Complaint for
Reconveyance with Damages9 before the RTC of Pasig City.
Petitioners filed their Answer denying the allegations that the
subject property had been sold to the respondents Spouses
Lumbao. They likewise denied that the Deed of Extrajudicial
Settlement had been fraudulently executed because the same
was duly published as required by law. On the contrary, they
prayed for the dismissal of the Complaint for lack of cause of
action because respondents Spouses Lumbao failed to comply
with the Revised Katarungang Pambarangay Law under Republic
Act No. 7160, otherwise known as the Local Government Code of
1991, which repealed Presidential Decree No. 150810 requiring
first resort to barangay conciliation.
Respondents Spouses Lumbao, with leave of court, amended
their Complaint because they discovered that on 16 February
1990, without their knowledge, petitioners executed a Deed of
Real Estate Mortgage in favor of Julieta S. Esplana for the sum of
₱30,000.00. The said Deed of Real Estate Mortgage was
annotated at the back of TCT No. PT-81729 on 26 April 1991.
Also, in answer to the allegation of the petitioners that they failed
to comply with the mandate of the Revised Katarungang
Pambarangay Law, respondents Spouses Lumbao said that the
Complaint was filed directly in court in order that prescription or
the Statute of Limitations may not set in.
During the trial, respondents Spouses Lumbao presented
Proserfina Lumbao and Carolina Morales as their witnesses,
while the petitioners presented only the testimony of petitioner
Virgilio.
The trial court rendered a Decision on 17 June 1998, the
dispositive portion of which reads as follows:
Premises considered, the instant complaint is hereby denied for
lack of merit.
Considering that [petitioners] have incurred expenses in order to
protect their interest, [respondents spouses Lumbao] are hereby
directed to pay [petitioners], to wit: 1) the amount of ₱30,000.00
as attorney’s fees and litigation expenses, and 2) costs of the
suit.11
Aggrieved, respondents Spouses Lumbao appealed to the Court
of Appeals. On 8 June 2005, the appellate court rendered a
Decision, thus:
WHEREFORE, premises considered, the present appeal is
hereby GRANTED. The appealed Decision dated June 17, 1998
of the Regional Trial Court of Pasig City, Branch 69 in Civil Case
No. 62175 is hereby REVERSED and SET ASIDE. A new
judgment is hereby entered ordering [petitioners] to reconvey 107
square meters of the subject [property] covered by TCT No. PT-
81729 of the Registry of Deeds of Pasig City, Metro Manila, and
to pay to [respondents spouses Lumbao] the sum of ₱30,000.00
for attorney’s fees and litigation expenses.
No pronouncement as to costs.12
Dissatisfied, petitioners filed a Motion for Reconsideration of the
aforesaid Decision but it was denied in the Resolution of the
appellate court dated 29 July 2005 for lack of merit.
Hence, this Petition.
The grounds relied upon by the petitioners are the following:
I. THE APPELLATE COURT COMMITTED A REVERSIBLE
ERROR IN REVERSING THE DECISION OF THE TRIAL
COURT, THEREBY CREATING A VARIANCE ON THE
FINDINGS OF FACTS OF TWO COURTS.
II. THE APPELLATE COURT COMMITTED A REVERSIBLE
ERROR IN ORDERING THE PETITIONERS TO RECONVEY
THE SUBJECT [PROPERTY] TO THE RESPONDENTS
[SPOUSES LUMBAO] AND IN NOT RULING THAT THEY ARE
GUILTY OF LACHES, HENCE THEY CANNOT RECOVER THE
LOT ALLEGEDLY SOLD TO THEM.
III. THE APPELLATE COURT COMMITTED A REVERSIBLE
ERROR IN NOT FINDING HEREIN PETITIONER[S] TO BE IN
GOOD FAITH IN EXECUTING THE "DEED OF EXTRAJUDICIAL
SETTLEMENT" DATED [2 MAY 1986].
IV. THE APPELLATE COURT COMMITTED A REVERSIBLE
ERROR IN NOT FINDING THAT PETITIONERS ARE NOT
LEGALLY BOUND TO COMPLY WITH THE SUPPOSED
BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9
JANUARY 1981] THAT WERE SUPPOSEDLY EXECUTED BY
THE LATE RITA CATOC.
V. THE APPELLATE COURT COMMITTED A REVERSIBLE
ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES
LUMBAO’S] ACTION FOR RECONVEYANCE WITH DAMAGES
CANNOT BE SUPPORTED WITH AN UNENFORCEABLE
DOCUMENTS, SUCH AS THE BILIHAN NG LUPA DATED [17
AUGUST 1979] AND [9 JANUARY 1981].
VI. THE APPELLATE COURT COMMITTED A REVERSIBLE
ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES
LUMBAO’S] COMPLAINT FOR RECONVEYANCE IS
DISMISSABLE (SIC) FOR NON COMPLIANCE OF THE
MANDATE OF [P.D. NO.] 1508, AS AMENDED BY Republic Act
No. 7160.
VII. THE APPELLATE COURT COMMITTED A REVERSIBLE
ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES
LUMBAO] SHOULD BE HELD LIABLE FOR PETITIONERS’
CLAIM FOR DAMAGES AND ATTORNEY[‘]S FEES.
Petitioners ask this Court to scrutinize the evidence presented in
this case, because they claim that the factual findings of the trial
court and the appellate court are conflicting. They allege that the
findings of fact by the trial court revealed that petitioners Virgilio
and Tadeo did not witness the execution of the documents known
as "Bilihan ng Lupa"; hence, this finding runs counter to the
conclusion made by the appellate court. And even assuming that
they were witnesses to the aforesaid documents, still,
respondents Spouses Lumbao were not entitled to the
reconveyance of the subject property because they were guilty of
laches for their failure to assert their rights for an unreasonable
length of time. Since respondents Spouses Lumbao had slept on
their rights for a period of more than 12 years reckoned from the
date of execution of the second "Bilihan ng Lupa," it would be
unjust and unfair to the petitioners if the respondents will be
allowed to recover the subject property.
Petitioners allege they are in good faith in executing the Deed of
Extrajudicial Settlement because even respondents Spouses
Lumbao’s witness, Carolina Morales, testified that neither
petitioner Virgilio nor petitioner Tadeo was present during the
execution of the "Bilihan ng Lupa," dated 17 August 1979 and 9
January 1981. Petitioners affirm that the Deed of Extrajudicial
Settlement was published in a newspaper of general circulation to
give notice to all creditors of the estate subject of partition to
contest the same within the period prescribed by law. Since no
claimant appeared to interpose a claim within the period allowed
by law, a title to the subject property was then issued in favor of
the petitioners; hence, they are considered as holders in good
faith and therefore cannot be barred from entering into any
subsequent transactions involving the subject property.
Petitioners also contend that they are not bound by the
documents denominated as "Bilihan ng Lupa" because the same
were null and void for the following reasons: 1) for being falsified
documents because one of those documents made it appear that
petitioners Virgilio and Tadeo were witnesses to its execution and
that they appeared personally before the notary public, when in
truth and in fact they did not; 2) the identities of the properties in
the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981
in relation to the subject property in litigation were not established
by the evidence presented by the respondents Spouses Lumbao;
3) the right of the respondents Spouses Lumbao to lay their claim
over the subject property had already been barred through
estoppel by laches; and 4) the respondents Spouses Lumbao’s
claim over the subject property had already prescribed.
Finally, petitioners claim that the Complaint for Reconveyance
with Damages filed by respondents Spouses Lumbao was
dismissible because they failed to comply with the mandate of
Presidential Decree No. 1508, as amended by Republic Act No.
7160, particularly Section 412 of Republic Act No. 7160.
Given the foregoing, the issues presented by the petitioners may
be restated as follows:
I. Whether or not the Complaint for Reconveyance with
Damages filed by respondents spouses Lumbao is
dismissible for their failure to comply with the mandate of
the Revised Katarungang Pambarangay Law under R.A.
No. 7160.
II. Whether or not the documents known as "Bilihan ng
Lupa" are valid and enforceable, thus, they can be the
bases of the respondents spouses Lumbao’s action for
reconveyance with damages.
III. Whether or not herein petitioners are legally bound to
comply with the "Bilihan ng Lupa" dated 17 August 1979
and 9 January 1981 and consequently, reconvey the
subject property to herein respondents spouses Lumbao.
It is well-settled that in the exercise of the Supreme Court’s power
of review, the court is not a trier of facts and does not normally
undertake the re-examination of the evidence presented by the
contending parties during the trial of the case considering that the
findings of fact of the Court of Appeals are conclusive and binding
on the Court.13 But, the rule is not without exceptions. There are
several recognized exceptions14 in which factual issues may be
resolved by this Court. One of these exceptions is when the
findings of the appellate court are contrary to those of the trial
court. This exception is present in the case at bar.
Going to the first issue presented in this case, it is the argument
of the petitioners that the Complaint for Reconveyance with
Damages filed by respondents Spouses Lumbao should be
dismissed for failure to comply with the barangay conciliation
proceedings as mandated by the Revised Katarungang
Pambarangay Law under Republic Act No. 7160. This argument
cannot be sustained.
Section 408 of the aforesaid law and Administrative Circular No.
14-9315 provide that all disputes between parties actually residing
in the same city or municipality are subject to barangay
conciliation. A prior recourse thereto is a pre-condition before
filing a complaint in court or any government offices. Non-
compliance with the said condition precedent could affect the
sufficiency of the plaintiff’s cause of action and make his
complaint vulnerable to dismissal on ground of lack of cause of
action or prematurity; but the same would not prevent a court of
competent jurisdiction from exercising its power of adjudication
over the case before it, where the defendants failed to object to
such exercise of jurisdiction.16
While it is true that the present case should first be referred to the
Barangay Lupon for conciliation because the parties involved
herein actually reside in the same city (Pasig City) and the
dispute between them involves a real property, hence, the said
dispute should have been brought in the city in which the real
property, subject matter of the controversy, is located, which
happens to be the same city where the contending parties reside.
In the event that respondents Spouses Lumbao failed to comply
with the said condition precedent, their Complaint for
Reconveyance with Damages can be dismissed. In this case,
however, respondents Spouses Lumbao’s non-compliance with
the aforesaid condition precedent cannot be considered fatal.
Although petitioners alleged in their answer that the Complaint for
Reconveyance with Damages filed by respondents spouses
Lumbao should be dismissed for their failure to comply with the
condition precedent, which in effect, made the complaint
prematurely instituted and the trial court acquired no jurisdiction
to hear the case, yet, they did not file a Motion to Dismiss the said
complaint.
Emphasis must be given to the fact that the petitioners could
have prevented the trial court from exercising jurisdiction over the
case had they filed a Motion to Dismiss. However, instead of
doing so, they invoked the very same jurisdiction by filing an
answer seeking an affirmative relief from it. Worse, petitioners
actively participated in the trial of the case by presenting their
own witness and by cross-examining the witnesses presented by
the respondents Spouses Lumbao. It is elementary that the active
participation of a party in a case pending against him before a
court is tantamount to recognition of that court’s jurisdiction and a
willingness to abide by the resolution of the case which will bar
said party from later on impugning the court’s jurisdiction.17 It is
also well-settled that the non-referral of a case for barangay
conciliation when so required under the law is not jurisdictional in
nature and may therefore be deemed waived if not raised
seasonably in a motion to dismiss.18 Hence, herein petitioners can
no longer raise the defense of non-compliance with the barangay
conciliation proceedings to seek the dismissal of the complaint
filed by the respondents Spouses Lumbao, because they already
waived the said defense when they failed to file a Motion to
Dismiss.
As regards the second issue, petitioners maintain that the "Bilihan
ng Lupa," dated 17 August 1979 and 9 January 1981 are null and
void for being falsified documents as it is made to appear that
petitioners Virgilio and Tadeo were present in the execution of the
said documents and that the identities of the properties in those
documents in relation to the subject property has not been
established by the evidence of the respondents Spouses
Lumbao. Petitioners also claim that the enforceability of those
documents is barred by prescription of action and laches.
It is the petitioners’ incessant barking that the "Bilihan ng Lupa"
documents dated 17 August 1979 and 9 January 1981 were
falsified because it was made to appear that petitioners Virgilio
and Tadeo were present in the executions thereof, and their
allegation that even respondents Spouses Lumbao’s witness
Carolina Morales proved that said petitioners were not present
during the execution of the aforementioned documents. This is
specious.
Upon examination of the aforesaid documents, this Court finds
that in the "Bilihan ng Lupa," dated 17 August 1979, the
signatures of petitioners Virgilio and Tadeo appeared thereon.
Moreover, in petitioners’ Answer and Amended Answer to the
Complaint for Reconveyance with Damages, both petitioners
Virgilio and Tadeo made an admission that indeed they acted as
witnesses in the execution of the "Bilihan ng Lupa," dated 17
August 1979.19 However, in order to avoid their obligations in the
said "Bilihan ng Lupa," petitioner Virgilio, in his cross-
examination, denied having knowledge of the sale transaction
and claimed that he could not remember the same as well as his
appearance before the notary public due to the length of time that
had passed. Noticeably, petitioner Virgilio did not categorically
deny having signed the "Bilihan ng Lupa," dated 17 August 1979
and in support thereof, his testimony in the cross-examination
propounded by the counsel of the respondents Spouses Lumbao
is quoted hereunder:
ATTY. CHIU:
Q. Now, you said, Mr. Witness…Virgilio Santos, that you don’t
know about this document which was marked as Exhibit "A" for
the [respondents spouses Lumbao]?
ATTY. BUGARING:
The question is misleading, your Honor. Counsel premised the
question that he does not have any knowledge but not that he
does not know.
ATTY. CHIU:
Q. Being… you are one of the witnesses of this document? [I]s it
not?
WITNESS:
A. No, sir.
Q. I am showing to you this document, there is a signature at the
left hand margin of this document Virgilio Santos, will you please
go over the same and tell the court whose signature is this?
A. I don’t remember, sir, because of the length of time that had
passed.
Q. But that is your signature?
A. I don’t have eyeglasses… My signature is different.
Q. You never appeared before this notary public Apolinario
Mangahas?
A. I don’t remember.20
As a general rule, facts alleged in a party’s pleading are deemed
admissions of that party and are binding upon him, but this is not
an absolute and inflexible rule. An answer is a mere statement of
fact which the party filing it expects to prove, but it is not
evidence.21 And in spite of the presence of judicial admissions in
a party’s pleading, the trial court is still given leeway to consider
other evidence presented.22 However, in the case at bar, as the
Court of Appeals mentioned in its Decision, "[herein petitioners]
had not adduced any other evidence to override the admission
made in their [A]nswer that [petitioners Virgilio and Tadeo]
actually signed the [Bilihan ng Lupa dated 17 August 1979]
except that they were just misled as to the purpose of the
document, x x x."23 Virgilio’s answers were unsure and quibbled.
Hence, the general rule that the admissions made by a party in a
pleading are binding and conclusive upon him applies in this
case.
On the testimony of respondents Spouses Lumbao’s witness
Carolina Morales, this Court adopts the findings made by the
appellate court. Thus -
[T]he trial court gave singular focus on her reply to a question
during cross-examination if the [petitioners Virgilio and Tadeo]
were not with her and the vendor [Rita] during the transaction. It
must be pointed out that earlier in the direct examination of said
witness, she confirmed that [respondents spouses Lumbao]
actually bought the lot from [Rita] ("nagkabilihan"). Said witness
positively identified and confirmed the two (2) documents
evidencing the sale in favor of [respondents spouse Lumbao].
Thus, her subsequent statement that the [petitioners Virgilio and
Tadeo] were not with them during the transaction does not
automatically imply that [petitioners Virgilio and Tadeo] did not at
any time sign as witnesses as to the deed of sale attesting to their
mother’s voluntary act of selling a portion of her share in her
deceased mother’s property. The rule is that testimony of a
witness must be considered and calibrated in its entirety and not
by truncated portions thereof or isolated passages therein.24
Furthermore, both "Bilihan ng Lupa" documents dated 17 August
1979 and 9 January 1981 were duly notarized before a notary
public. It is well-settled that a document acknowledged before a
notary public is a public document25that enjoys the presumption of
regularity. It is a prima facie evidence of the truth of the facts
stated therein and a conclusive presumption of its existence and
due execution.26 To overcome this presumption, there must be
presented evidence that is clear and convincing. Absent such
evidence, the presumption must be upheld.27 In addition, one who
denies the due execution of a deed where one’s signature
appears has the burden of proving that contrary to the recital in
the jurat, one never appeared before the notary public and
acknowledged the deed to be a voluntary act. Nonetheless, in the
present case petitioners’ denials without clear and convincing
evidence to support their claim of fraud and falsity were not
sufficient to overthrow the above-mentioned presumption; hence,
the authenticity, due execution and the truth of the facts stated in
the aforesaid "Bilihan ng Lupa" are upheld.
The defense of petitioners that the identities of the properties
described in the "Bilihan ng Lupa," dated 17 August 1979 and 9
January 1981 in relation to the subject property were not
established by respondents Spouses Lumbao’s evidence is
likewise not acceptable.
It is noteworthy that at the time of the execution of the documents
denominated as "Bilihan ng Lupa," the entire property owned by
Maria, the mother of Rita, was not yet divided among her and her
co-heirs and so the description of the entire estate is the only
description that can be placed in the "Bilihan ng Lupa, dated 17
August 1979 and 9 January 1981" because the exact metes and
bounds of the subject property sold to respondents Spouses
Lumbao could not be possibly determined at that time.
Nevertheless, that does not make the contract of sale between
Rita and respondents Spouses Lumbao invalid because both the
law and jurisprudence have categorically held that even while an
estate remains undivided, co-owners have each full ownership of
their respective aliquots or undivided shares and may therefore
alienate, assign or mortgage them.28 The co-owner, however, has
no right to sell or alienate a specific or determinate part of the
thing owned in common, because such right over the thing is
represented by an aliquot or ideal portion without any physical
division. In any case, the mere fact that the deed purports to
transfer a concrete portion does not per se render the sale void.
The sale is valid, but only with respect to the aliquot share of the
selling co-owner. Furthermore, the sale is subject to the results of
the partition upon the termination of the co-ownership.29
In the case at bar, when the estate left by Maria had been
partitioned on 2 May 1986 by virtue of a Deed of Extrajudicial
Settlement, the 107- square meter lot sold by the mother of the
petitioners to respondents Spouses Lumbao should be deducted
from the total lot, inherited by them in representation of their
deceased mother, which in this case measures 467 square
meters. The 107-square meter lot already sold to respondents
Spouses Lumbao can no longer be inherited by the petitioners
because the same was no longer part of their inheritance as it
was already sold during the lifetime of their mother.
Likewise, the fact that the property mentioned in the two "Bilihan
ng Lupa" documents was described as "a portion of a parcel of
land covered in Tax Declarations No. A-018-01674," while the
subject matter of the Deed of Extrajudicial Settlement was the
property described in Transfer Certificate of Title (TCT) No. 3216
of the Registry of Deeds of the Province of Rizal in the name of
Maria is of no moment because in the "Bilihan ng Lupa," dated 17
August 1979 and 9 January 1981, it is clear that there was only
one estate left by Maria upon her death. And this fact was not
refuted by the petitioners. Besides, the property described in Tax
Declaration No. A-018-01674 and the property mentioned in TCT
No. 3216 are both located in Barrio Rosario, Municipality of
Pasig, Province of Rizal, and almost have the same boundaries.
It is, thus, safe to state that the property mentioned in Tax
Declaration No. A-018-01674 and in TCT No. 3216 are one and
the same.
The defense of prescription of action and laches is likewise
unjustifiable. In an action for reconveyance, the decree of
registration is respected as incontrovertible. What is sought
instead is the transfer of the property or its title which has been
wrongfully or erroneously registered in another person’s name to
its rightful or legal owner, or to the one with a better right. It is,
indeed, true that the right to seek reconveyance of registered
property is not absolute because it is subject to extinctive
prescription. However, when the plaintiff is in possession of the
land to be reconveyed, prescription cannot set in. Such an
exception is based on the theory that registration proceedings
could not be used as a shield for fraud or for enriching a person
at the expense of another.30
In the case at bar, the right of the respondents Spouses Lumbao
to seek reconveyance does not prescribe because the latter have
been and are still in actual possession and occupation as owners
of the property sought to be reconveyed, which fact has not been
refuted nor denied by the petitioners. Furthermore, respondents
Spouses Lumbao cannot be held guilty of laches because from
the very start that they bought the 107-square meter lot from the
mother of the petitioners, they have constantly asked for the
transfer of the certificate of title into their names but Rita, during
her lifetime, and the petitioners, after the death of Rita, failed to
do so on the flimsy excuse that the lot had not been partitioned
yet. Inexplicably, after the partition of the entire estate of Maria,
petitioners still included the 107-square meter lot in their
inheritance which they divided among themselves despite their
knowledge of the contracts of sale between their mother and the
respondents Spouses Lumbao.
Under the above premises, this Court holds that the "Bilihan ng
Lupa" documents dated 17 August 1979 and 9 January 1981 are
valid and enforceable and can be made the basis of the
respondents Spouses Lumbao’s action for reconveyance. The
failure of respondents Spouses Lumbao to have the said
documents registered does not affect its validity and
enforceability. It must be remembered that registration is not a
requirement for validity of the contract as between the parties, for
the effect of registration serves chiefly to bind third persons. The
principal purpose of registration is merely to notify other persons
not parties to a contract that a transaction involving the property
had been entered into. Where the party has knowledge of a prior
existing interest which is unregistered at the time he acquired a
right to the same land, his knowledge of that prior unregistered
interest has the effect of registration as to him.31 Hence, the
"Bilihan ng Lupa" documents dated 17 August 1979 and 9
January 1981, being valid and enforceable, herein petitioners are
bound to comply with their provisions. In short, such documents
are absolutely valid between and among the parties thereto.
Finally, the general rule that heirs are bound by contracts entered
into by their predecessors-in-interest applies in the present case.
Article 131132 of the NCC is the basis of this rule. It is clear from
the said provision that whatever rights and obligations the
decedent have over the property were transmitted to the heirs by
way of succession, a mode of acquiring the property, rights and
obligations of the decedent to the extent of the value of the
inheritance of the heirs.33 Thus, the heirs cannot escape the legal
consequence of a transaction entered into by their predecessor-
in-interest because they have inherited the property subject to the
liability affecting their common ancestor. Being heirs, there is
privity of interest between them and their deceased mother. They
only succeed to what rights their mother had and what is valid
and binding against her is also valid and binding as against them.
The death of a party does not excuse nonperformance of a
contract which involves a property right and the rights and
obligations thereunder pass to the personal representatives of the
deceased. Similarly, nonperformance is not excused by the death
of the party when the other party has a property interest in the
subject matter of the contract.34

In the end, despite the death of the petitioners’ mother, they are
still bound to comply with the provisions of the "Bilihan ng Lupa,"
dated 17 August 1979 and 9 January 1981. Consequently, they
must reconvey to herein respondents Spouses Lumbao the 107-
square meter lot which they bought from Rita, petitioners’ mother.
And as correctly ruled by the appellate court, petitioners must pay
respondents Spouses Lumbao attorney’s fees and litigation
expenses for having been compelled to litigate and incur
expenses to protect their interest.35 On this matter, we do not find
reasons to reverse the said findings.

WHEREFORE, premises considered, the instant Petition is

hereby DENIED. The Decision and Resolution of the Court of
Appeals dated 8 June 2005 and 29 July 2005, respectively, are
hereby AFFIRMED. Herein petitioners are ordered to reconvey to
respondents Spouses Lumbao the subject property and to pay
the latter attorney’s fees and litigation expenses. Costs against
petitioners.

SO ORDERED.
G.R. No. L-21993 June 21, 1966
ANGELA RODRIGUEZ, MARIA RODRIGUEZ, ET
AL., petitioners,
vs.
HON. JUAN DE BORJA, as Judge of the Court of First
Instance of Bulacan, Branch III,
ANATOLIA PANGILINAN and ADELAIDA
JACALAN, respondents.
Lorenzo Somulong for petitioners.
Torres and Torres for respondents.
REYES, J.B.L., J.:
Petitioners Angela, Maria, Abelardo and Antonio, surnamed
Rodriguez, petition this Court for a writ of certiorari and prohibition
to the Court of First Instance of Bulacan, for its refusal to grant
their motion to dismiss its Special Proceeding No. 1331, which
said Court is alleged to have taken cognizance of without
jurisdiction.
The facts and issues are succinctly narrated in the order of the
respondent court, dated June 13, 1963 (Petition, Annex 0), in this
wise:
It is alleged in the motion to dismiss filed by Angela,
Maria, Abelardo and Antonio Rodriguez, through counsel,
that this Court "has no jurisdiction to try the above-entitled
case in view of the pendency of another action for the
settlement of the estate of the deceased Rev. Fr.
Celestino Rodriguez in the Court of First Instance of Rizal,
namely, Sp. Proceedings No. 3907 entitled 'In the matter
of the Intestate Estate of the deceased Rev. Fr. Celestino
Rodriguez which was filed ahead of the instant case".
The records show that Fr. Celestino Rodriguez died on
February 12, 1963 in the City of Manila; that on March 4,
1963, Apolonia Pangilinan and Adelaida Jacalan
delivered to the Clerk of Court of Bulacan a purported last
will and testament of Fr. Rodriguez; that on March 8,
1963, Maria Rodriguez and Angela Rodriguez, through
counsel filed a petition for leave of court to allow them to
examine the alleged will; that on March 11, 1963 before
the Court could act on the petition, the same was
withdrawn; that on March 12, 1963, aforementioned
petitioners filed before the Court of First Instance of Rizal
a petition for the settlement of the intestate estate of Fr.
Rodriguez alleging, among other things, that Fr.
Rodriguez was a resident of Parañaque, Rizal, and died
without leaving a will and praying that Maria Rodriguez be
appointed as Special Administratrix of the estate; and that
on March 12, 1963 Apolonia Pangilinan and Adelaida
Jacalan filed a petition in this Court for the probation of
the will delivered by them on March 4, 1963. It was
stipulated by the parties that Fr. Rodriguez was born in
Parañaque, Rizal; that he was Parish priest of the
Catholic Church of Hagonoy, Bulacan, from the year 1930
up to the time of his death in 1963; that he was buried in
Parañaque, and that he left real properties in Rizal,
Cavite, Quezon City and Bulacan.
The movants contend that since the intestate proceedings
in the Court of First Instance of Rizal was filed at 8:00
A.M. on March 12, 1963 while the petition for probate was
filed in the Court of First Instance of Bulacan at 11:00
A.M. on the same date, the latter Court has no jurisdiction
to entertain the petition for probate, citing as authority in
support thereof the case of Ongsingco Vda. de Borja vs.
Tan and De Borja, G.R. No. 7792, July 27, 1955.
The petitioners Pangilinan and Jacalan, on the other
hand, take the stand that the Court of First Instance of
Bulacan acquired jurisdiction over the case upon delivery
 by them of the will to the Clerk of Court on March 4, 1963,
and that the case in this Court therefore has precedence
over the case filed in Rizal on March 12, 1963.
The Court of First Instance, as previously stated denied the
motion to dismiss on the ground that a difference of a few hours
did not entitle one proceeding to preference over the other; that,
as early as March 7, movants were aware of the existence of the
purported will of Father Rodriguez, deposited in the Court of
Bulacan, since they filed a petition to examine the same, and that
movants clearly filed the intestate proceedings in Rizal "for no
other purpose than to prevent this Court (of Bulacan) from
exercising jurisdiction over the probate proceedings".
Reconsideration having been denied, movants, now petitioners,
came to this Court, relying principally on Rule 73, section 1 of the
Rules of Court, and invoking our ruling in Ongsingco vs. Tan and
De Borja, L-7792, July 27, 1955.
SECTION 1. Where estate of deceased persons settled.
— If the decedent is an inhabitant of the Philippines at the
time of his death, whether a citizen or an alien, his will
shall be proved, or letters of administration granted, and
his estate settled, in the Court of First Instance in the
province in which he resides at the time of his death, and
if he is an inhabitant of a foreign country, the Court of First
Instance of any province which he had estate. The court
first taking cognizance of the settlement of the estate of a
decedent, shall exercise jurisdiction to the exclusion of all
other courts. The jurisdiction assumed by a court, as far
as it depends on the place of residence of the decedent,
or of the location of his estate, shall not be contested in a
suit or proceeding, except in an appeal from that court, in
the original case, or when the want of jurisdiction appears
on the record.
We find this recourse to be untenable. The jurisdiction of the
Court of First Instance of Bulacan became vested upon the
delivery thereto of the will of the late Father Rodriguez on March
4, 1963, even if no petition for its allowance was filed until later,
because upon the will being deposited the court could, motu
proprio, have taken steps to fix the time and place for proving the
will, and issued the corresponding notices conformably to what is
prescribed by section 3, Rule 76, of the Revised Rules of Court
(Section 3, Rule 77, of the old Rules):
SEC. 3. Court to appoint time for proving will. Notice
thereof to be published. — When a will is delivered to, or
a petition for the allowance of a will is filed in, the Court
having jurisdiction, such Court shall fix a time and place
for proving the will when all concerned may appear to
contest the allowance thereof, and shall cause notice of
such time and place to be published three (3) weeks
successively, previous to the time appointed, in a
newspaper of general circulation in the province.
But no newspaper publication shall be made where the
petition for probate has been filed by the testator himself.
The use of the disjunctive in the words "when a will is delivered to
OR a petition for the allowance of a will is filed" plainly indicates
that the court may act upon the mere deposit therein of a
decedent's testament, even if no petition for its allowance is as
yet filed. Where the petition for probate is made after the deposit
of the will, the petition is deemed to relate back to the time when
the will was delivered. Since the testament of Fr. Rodriguez was
submitted and delivered to the Court of Bulacan on March 4,
while petitioners initiated intestate proceedings in the Court of
First Instance of Rizal only on March 12, eight days later, the
precedence and exclusive jurisdiction of the Bulacan court is
incontestable.1äwphï1.ñët
But, petitioners object, section 3 of revised Rule 76 (old Rule 77)
speaks of a will being delivered to "the Court having jurisdiction,"
and in the case at bar the Bulacan court did not have it because
the decedent was domiciled in Rizal province. We can not
disregard Fr. Rodriguez's 33 years of residence as parish priest in
Hagonoy, Bulacan (1930-1963); but even if we do so, and
consider that he retained throughout some animus revertendi to
the place of his birth in Parañaque, Rizal, that detail would not
imply that the Bulacan court lacked jurisdiction. As ruled in
previous decisions, the power to settle decedents' estates is
conferred by law upon all courts of first instance, and the domicile
of the testator only affects the venue but not the jurisdiction of the
Court (In re Kaw Singco, 74 Phil. 239; Reyes vs. Diaz, 73 Phil.
484; Bernabe vs. Vergara, 73 Phil. 676). Neither party denies that
the late Fr. Rodriguez is deceased, or that he left personal
property in Hagonoy, province of Bulacan (t.s.n. p. 46, hearing of
June 11, 1963, Annex "H", Petition, Rec., p. 48). That is sufficient
in the case before us.
In the Kaw Singco case (ante) this Court ruled that:
"... If we consider such question of residence as one
affecting the jurisdiction of the trial court over the subject-
matter, the effect shall be that the whole proceedings
including all decisions on the different incidents which
have arisen in court will have to be annulled and the same
case will have to be commenced anew before another
court of the same rank in another province. That this is of
mischievous effect in the prompt administration of justice
is too obvious to require comment. (Cf. Tanunchuan vs.
Dy Buncio & Co., G.R. No. 48206, December 31, 1942).
Furthermore, section 600 of Act No. 190, providing that
the estate of a deceased person shall be settled in the
province where he had last resided, could not have been
intended as defining the jurisdiction of the probate court
over the subject matter, because such legal provision is
contained in a law of procedure dealing merely with
procedural matters, and, as we have said time and again,
procedure is one thing and jurisdiction over the subject
matter is another. (Attorney General vs. Manila Railroad
Company, 20 Phil. 523.) The law of jurisdiction — Act No.
136, Section 56, No. 5 — confers upon Courts of First
Instance jurisdiction over all probate cases independently
of the place of residence of the deceased.1 Since,
however, there are many Courts of First Instance in the
Philippines, the Law of Procedure, Act No. 190, section
600, fixes the venue or the place where each case shall
be brought. Thus, the place of residence of the deceased
is not an element of jurisdiction over the subject matter
but merely of venue. And it is upon this ground that in the
new Rules of Court the province where the estate of a
deceased person shall be settled is properly called
"venue" (Rule 75, section 1.) Motion for reconsideration is
denied.
The estate proceedings having been initiated in the Bulacan
Court of First Instance ahead of any other, that court is entitled to
assume jurisdiction to the exclusion of all other courts, even if it
were a case of wrong venue by express provisions of Rule 73
(old Rule 75) of the Rules of Court, since the same enjoins that:
The Court first taking cognizance of the settlement of the
estate of a decedent shall exercise jurisdiction to the
exclusion of all other courts. (Sec. 1)
This disposition presupposes that two or more courts have been
asked to take cognizance of the settlement of the estate. Of them
only one could be of proper venue, yet the rule grants
precedence to that Court whose jurisdiction is first invoked,
without taking venue into account.
There are two other reasons that militate against the success of
petitioners. One is that their commencing intestate proceedings in
Rizal, after they learned of the delivery of the decedent's will to
the Court of Bulacan, was in bad faith, patently done with a view
to divesting the latter court of the precedence awarded it by the
Rules. Certainly the order of priority established in Rule 73 (old
Rule 75) was not designed to convert the settlement of
decedent's estates into a race between applicants, with the
administration of the properties as the price for the fleetest.
The other reason is that, in our system of civil law, intestate
succession is only subsidiary or subordinate to the testate, since
intestacy only takes place in the absence of a valid operative will.
Says Article 960 of the Civil Code of the Philippines:
ART. 960. Legal or intestate succession takes place:
Wherefore, the writ of certiorari applied for is denied. Costs
against petitioners Rodriguez.
Concepcion, C.J., Barrera, Dizon, Regala, Makalintal, Bengzon,
J.P., Zaldivar and Sanchez, JJ., concur.

(1) If a person dies without a will, or with a void will, or

one which has subsequently lost its validity;

(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 in which the testator has not disposed;

(3) If the suspensive condition attached to the institution

of heir does not happen or is not fulfilled, or if the heir dies
before the testator, or repudiates the inheritance, there
being no substitution, and no right of accretion takes
place;

(4) When the heir instituted is incapable of succeeding,

except in cases provided in this Code.

Therefore, as ruled in Castro, et al. vs. Martinez, 10 Phil. 307,

"only after final decision as to the nullity of testate succession
could an intestate succession be instituted in the form of pre-
established action". The institution of intestacy proceedings in
Rizal may not thus proceed while the probate of the purported will
of Father Rodriguez is pending.

We rule that the Bulacan Court of First Instance was entitled to

priority in the settlement of the estate in question, and that in
refusing to dismiss the probate. proceedings, said court did not
commit any abuse of discretion. It is the proceedings in the Rizal
Court that should be discontinued.
G.R. No. 174727 August 12, 2013
ANTIPOLO INING (DECEASED), SURVIVED BY MANUEL
VILLANUEVA, TEODORA VILLANUEVA-FRANCISCO,
CAMILO FRANCISCO, ADOLFO FRANCISCO, LUCIMO
FRANCISCO, JR., MILAGROS FRANCISCO,* CELEDONIO
FRANCISCO, HERMINIGILDO FRANCISCO; RAMON
TRESVALLES, ROBERTO TAJONERA, NATIVIDAD INING-
IBEA (DECEASED) SURVIVED BY EDILBERTO IBEA,
JOSEFA IBEA, MARTHA IBEA, CARMEN IBEA, AMPARO
IBEA-FERNANDEZ, HENRY RUIZ, EUGENIO RUIZ AND
PASTOR RUIZ; DOLORES INING-RIMON (DECEASED)
SURVIVED BY JESUS RIMON, CESARIA RIMON GONZALES
AND REMEDIOS RIMON CORDERO; AND PEDRO INING
(DECEASED) SURVIVED BY ELISA TAN INING (WIFE) AND
PEDRO INING, JR., PETITIONERS,
vs.
LEONARDO R. VEGA, SUBSTITUTED BY LOURDES VEGA,
RESTONILO I. VEGA, CRISPULO M. VEGA, MILBUENA
VEGA-RESTITUTO, AND LENARD VEGA, RESPONDENTS.
DECISION
DEL CASTILLO, J.:
One who is merely related by affinity to the decedent does not
inherit from the latter and cannot become a co-owner of the
decedent’s property. Consequently, he cannot effect a
repudiation of the co-ownership of the estate that was formed
among the decedent’s heirs.
Assailed in this Petition for Review on Certiorari1 are the March
14, 2006 Decision2 of the Court of Appeals (CA) in CA-G.R. CV
No. 74687 and its September 7, 2006 Resolution3 denying
petitioners’ Motion for Reconsideration.4
Factual Antecedents
Leon Roldan (Leon), married to Rafaela Menez (Rafaela), is the
owner of a 3,120-square meter parcel of land (subject property) in
Kalibo, Aklan covered by Original Certificate of Title No. (24071)
RO-6305 (OCT RO-630). Leon and Rafaela died without issue.
Leon was survived by his siblings Romana Roldan (Romana) and
Gregoria Roldan Ining (Gregoria), who are now both deceased.
Romana was survived by her daughter Anunciacion Vega and
grandson, herein respondent Leonardo R. Vega (Leonardo) (also
both deceased). Leonardo in turn is survived by his wife Lourdes
and children Restonilo I. Vega, Crispulo M. Vega, Milbuena Vega-
Restituto and Lenard Vega, the substituted respondents.
Gregoria, on the other hand, was survived by her six children:
petitioners Natividad Ining-Ibea (Natividad), Dolores Ining-Rimon
(Dolores), Antipolo, and Pedro; Jose; and Amando. Natividad is
survived by Edilberto Ibea, Josefa Ibea, Martha Ibea, Carmen
Ibea, Amparo Ibea-Fernandez, Henry Ruiz and Pastor Ruiz.
Dolores is survived by Jesus Rimon, Cesaria Rimon Gonzales
and Remedios Rimon Cordero. Antipolo is survived by Manuel
Villanueva, daughter Teodora Villanueva-Francisco (Teodora),
Camilo Francisco (Camilo), Adolfo Francisco (Adolfo), Lucimo
Francisco, Jr. (Lucimo Jr.), Milagros Francisco, Celedonio
Francisco, and Herminigildo Francisco (Herminigildo). Pedro is
survived by his wife, Elisa Tan Ining and Pedro Ining, Jr. Amando
died without issue. As for Jose, it is not clear from the records if
he was made party to the proceedings, or if he is alive at all.
In short, herein petitioners, except for Ramon Tresvalles
(Tresvalles) and Roberto Tajonera (Tajonera), are Gregoria’s
grandchildren or spouses thereof (Gregoria’s heirs).
In 1997, acting on the claim that one-half of subject property
belonged to him as Romana’s surviving heir, Leonardo filed with
the Regional Trial Court (RTC) of Kalibo, Aklan Civil Case No.
52756 for partition, recovery of ownership and possession, with
damages, against Gregoria’s heirs. In his Amended
Complaint,7 Leonardo alleged that on several occasions, he
demanded the partition of the property but Gregoria’s heirs
refused to heed his demands; that the matter reached the level of
the Lupon Tagapamayapa, which issued a certification to file a
court action sometime in 1980; that Gregoria’s heirs claimed sole
ownership of the property; that portions of the property were sold
to Tresvalles and Tajonera, which portions must be collated and
included as part of the portion to be awarded to Gregoria’s heirs;
that in 1979, Lucimo Francisco, Sr. (Lucimo Sr.), husband of
herein petitioner Teodora, illegally claimed absolute ownership of
the property and transferred in his name the tax declaration
covering the property; that from 1988, Lucimo Sr. and Teodora
have deprived him (Leonardo) of the fruits of the property
estimated at ₱1,000.00 per year; that as a result, he incurred
expenses by way of attorney’s fees and litigation costs. Leonardo
thus prayed that he be declared the owner of half of the subject
property; that the same be partitioned after collation and
determination of the portion to which he is entitled; that Gregoria’s
heirs be ordered to execute the necessary documents or
agreements; and that he (Leonardo) be awarded actual damages
in the amount of ₱1,000.00 per year from 1988, attorney’s fees of
₱50,000.00, and lawyer’s appearance fees of ₱500.00 per
hearing.
8
In their Answer with counterclaim, Teodora, Camilo, Adolfo,
Lucimo Jr. and Herminigildo claimed that Leonardo had no cause
of action against them; that they have become the sole owners of
the subject property through Lucimo Sr. who acquired the same
in good faith by sale from Juan Enriquez (Enriquez), who in turn
acquired the same from Leon, and Leonardo was aware of this
fact; that they were in continuous, actual, adverse, notorious and
exclusive possession of the property with a just title; that they
have been paying the taxes on the property; that Leonardo’s
claim is barred by estoppel and laches; and that they have
suffered damages and were forced to litigate as a result of
Leonardo’s malicious suit. They prayed that Civil Case No. 5275
be dismissed; that Leonardo be declared to be without any right
to the property; that Leonardo be ordered to surrender the
certificate of title to the property; and that they be awarded
₱20,000.00 as moral damages, ₱10,000.00 as temperate and
nominal damages, ₱20,000.00 as attorney’s fees, and double
costs.
The other Gregoria heirs, as well as Tresvalles and Tajonera
were declared in default.9
As agreed during pre-trial, the trial court commissioned Geodetic
Engineer Rafael M. Escabarte to identify the metes and bounds
of the property.10 The resulting Commissioner’s Report and
Sketch,11 as well as the Supplementary Commissioner’s
Report,12 were duly approved by the parties. The parties then
submitted the following issues for resolution of the trial court:
Whether Leonardo is entitled to a share in Leon’s estate;
Whether Leon sold the subject property to Lucimo Sr.; and
Whether Leonardo’s claim has prescribed, or that he is barred by
estoppel or laches.13
In the meantime, Leonardo passed away and was duly
substituted by his heirs, the respondents herein.14
During the course of the proceedings, the following additional
relevant facts came to light:
1. In 1995, Leonardo filed against petitioners Civil Case
No. 4983 for partition with the RTC Kalibo, but the case
was dismissed and referred to the Kalibo Municipal Trial
Court (MTC), where the case was docketed as Civil Case
No. 1366. However, on March 4, 1997, the MTC
dismissed Civil Case No. 1366 for lack of jurisdiction and
declared that only the RTC can take cognizance of the
partition case;15
 2. The property was allegedly sold by Leon to Enriquez
through an unnotarized document dated April 4,
1943.16 Enriquez in turn allegedly sold the property to
Lucimo Sr. on November 25, 1943 via another private
sale document;17
3. Petitioners were in sole possession of the property for
more than 30 years, while Leonardo acquired custody of
OCT RO-630;18
4. On February 9, 1979, Lucimo Sr. executed an Affidavit
of Ownership of Land19 claiming sole ownership of the
property which he utilized to secure in his name Tax
Declaration No. 16414 (TD 16414) over the property and
to cancel Tax Declaration No. 20102 in Leon’s name;20
5. Lucimo Sr. died in 1991; and
6. The property was partitioned among the petitioners, to
the exclusion of Leonardo.21
Ruling of the Regional Trial Court
On November 19, 2001, the trial court rendered a
Decision,22 which decreed as follows:
WHEREFORE, premises considered, judgment is hereby
rendered:
Dismissing the complaint on the ground that plaintiffs’ right of
action has long prescribed under Article 1141 of the New Civil
Code;
Declaring Lot 1786 covered by OCT No. RO-630 (24071) to be
the common property of the heirs of Gregoria Roldan Ining and by
virtue whereof, OCT No. RO-630 (24071) is ordered cancelled
and the Register of Deeds of the Province of Aklan is directed to
issue a transfer certificate of title to the heirs of Natividad Ining,
one-fourth (1/4) share; Heirs of Dolores Ining, one-fourth (1/4)
share; Heirs of Antipolo Ining, one-fourth (1/4) share; and Heirs of
Pedro Ining, one-fourth (1/4) share.
For lack of sufficient evidence, the counterclaim is ordered
dismissed.
With cost against the plaintiffs.
SO ORDERED.23
The trial court found the April 4, 1943 and November 25, 1943
deeds of sale to be spurious. It concluded that Leon never sold
the property to Enriquez, and in turn, Enriquez never sold the
property to Lucimo Sr., hence, the subject property remained part
of Leon’s estate at the time of his death in 1962. Leon’s siblings,
Romana and Gregoria, thus inherited the subject property in
equal shares. Leonardo and the respondents are entitled to
Romana’s share as the latter’s successors.
However, the trial court held that Leonardo had only 30 years
from Leon’s death in 1962 – or up to 1992 – within which to file
the partition case. Since Leonardo instituted the partition suit only
in 1997, the same was already barred by prescription. It held that
under Article 1141 of the Civil Code,24 an action for partition and
recovery of ownership and possession of a parcel of land is a real
action over immovable property which prescribes in 30 years. In
addition, the trial court held that for his long inaction, Leonardo
was guilty of laches as well. Consequently, the property should
go to Gregoria’s heirs exclusively.
Respondents moved for reconsideration25 but the same was
denied by the RTC in its February 7, 2002 Order.26
Ruling of the Court of Appeals
Only respondents interposed an appeal with the CA. Docketed as
CA-G.R. CV No. 74687, the appeal questioned the propriety of
the trial court’s dismissal of Civil Case No. 5275, its application of
Article 1141, and the award of the property to Gregoria’s heirs
exclusively.
On March 14, 2006, the CA issued the questioned
Decision,27 which contained the following decretal portion:
IN LIGHT OF ALL THE FOREGOING, this appeal is GRANTED.
The decision of the Regional Trial Court, Br. 8, Kalibo, Aklan in
Civil Case No. 5275 is REVERSED and SET ASIDE. In lieu
thereof, judgment is rendered as follows:
1. Declaring 1/2 portion of Lot 1786 as the share of the
plaintiffs as successors-in-interest of Romana Roldan;
2. Declaring 1/2 portion of Lot 1786 as the share of the
defendants as successors-in-interest of Gregoria Roldan
Ining;
3. Ordering the defendants to deliver the possession of
the portion described in paragraphs 8 and 9 of the
Commissioner’s Report (Supplementary) to the herein
plaintiffs;
4. Ordering the cancellation of OCT No. RO-630 (24071)
in the name of Leon Roldan and the Register of Deeds of
Aklan is directed to issue transfer certificates of title to the
plaintiffs in accordance with paragraphs 8 and 9 of the
sketch plan as embodied in the Commissioner’s Report
(Supplementary) and the remaining portion thereof be
adjudged to the defendants.
Other claims and counterclaims are dismissed.
Costs against the defendants-appellees.
SO ORDERED.28
The CA held that the trial court’s declaration of nullity of the April
4, 1943 and November 25, 1943 deeds of sale in favor of
Enriquez and Lucimo Sr., respectively, became final and was
settled by petitioners’ failure to appeal the same. Proceeding from
the premise that no valid prior disposition of the property was
made by its owner Leon and that the property – which remained
part of his estate at the time of his death – passed on by
succession to his two siblings, Romana and Gregoria, which thus
makes the parties herein – who are Romana’s and Gregoria’s
heirs – co-owners of the property in equal shares, the appellate
court held that only the issues of prescription and laches were
needed to be resolved.
The CA did not agree with the trial court’s pronouncement that
Leonardo’s action for partition was barred by prescription. The CA
declared that prescription began to run not from Leon’s death in
1962, but from Lucimo Sr.’s execution of the Affidavit of
Ownership of Land in 1979, which amounted to a repudiation of
his co-ownership of the property with Leonardo. Applying the fifth
paragraph of Article 494 of the Civil Code, which provides that
"[n]o prescription shall run in favor of a co-owner or co-heir
against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership," the CA held that it was
only when Lucimo Sr. executed the Affidavit of Ownership of
Land in 1979 and obtained a new tax declaration over the
property (TD 16414) solely in his name that a repudiation of his
co-ownership with Leonardo was made, which repudiation
effectively commenced the running of the 30-year prescriptive
period under Article 1141.
The CA did not consider Lucimo Sr.’s sole possession of the
property for more than 30 years to the exclusion of Leonardo and
the respondents as a valid repudiation of the co-ownership either,
stating that his exclusive possession of the property and
appropriation of its fruits – even his continuous payment of the
taxes thereon – while adverse as against strangers, may not be
deemed so as against Leonardo in the absence of clear and
conclusive evidence to the effect that the latter was ousted or
deprived of his rights as co-owner with the intention of assuming
exclusive ownership over the property, and absent a showing that
this was effectively made known to Leonardo. Citing Bargayo v.
Camumot29 and Segura v. Segura,30 the appellate court held that
as a rule, possession by a co-owner will not be presumed to be
adverse to the other co-owners but will be held to benefit all, and
that a co-owner or co-heir is in possession of an inheritance pro-
indiviso for himself and in representation of his co-owners or co-
heirs if he administers or takes care of the rest thereof with the
obligation to deliver the same to his co-owners or co-heirs, as is
the case of a depositary, lessee or trustee.
The CA added that the payment of taxes by Lucimo Sr. and the
issuance of a new tax declaration in his name do not prove
ownership; they merely indicate a claim of ownership. Moreover,
petitioners’ act of partitioning the property among themselves to
the exclusion of Leonardo cannot affect the latter; nor may it be
considered a repudiation of the co-ownership as it has not been
shown that the partition was made known to Leonardo.
The CA held further that the principle of laches cannot apply as
against Leonardo and the respondents. It held that laches is
controlled by equitable considerations and it cannot be used to
defeat justice or to perpetuate fraud; it cannot be utilized to
deprive the respondents of their rightful inheritance.
On the basis of the above pronouncements, the CA granted
respondents’ prayer for partition, directing that the manner of
partitioning the property shall be governed by the Commissioner’s
Report and Sketch and the Supplementary Commissioner’s
Report which the parties did not contest.
Petitioners filed their Motion for Reconsideration31 which the CA
denied in its assailed September 7, 2006 Resolution.32 Hence, the
present Petition.
Issues
Petitioners raise the following arguments:
I
THE APPELLATE COURT COMMITTED GRAVE ABUSE
OF DISCRETION IN REVERSING THE DECISION OF
THE TRIAL COURT ON THE GROUND THAT LUCIMO
FRANCISCO REPUDIATED THE CO-OWNERSHIP
ONLY ON FEBRUARY 9, 1979.
II
THE APPELLATE COURT ERRED IN NOT UPHOLDING
THE DECISION OF THE TRIAL COURT DISMISSING
THE COMPLAINT ON THE GROUND OF
PRESCRIPTION AND LACHES.33
Petitioners’ Arguments
Petitioners insist in their Petition and Reply34 that Lucimo Sr.’s
purchase of the property in 1943 and his possession thereof
amounted to a repudiation of the co-ownership, and that
Leonardo’s admission and acknowledgment of Lucimo Sr.’s
possession for such length of time operated to bestow upon
petitioners – as Lucimo Sr.’s successors-in-interest – the benefits
of acquisitive prescription which proceeded from the repudiation.
Petitioners contend that Leonardo’s inaction – from Lucimo Sr.’s
taking possession in 1943, up to 1995, when Leonardo filed Civil
Case No. 4983 for partition with the RTC Kalibo – amounted to
laches or neglect. They add that during the proceedings before
the Lupon Tagapamayapa in 1980, Leonardo was informed of
Lucimo Sr.’s purchase of the property in 1943; this
notwithstanding, Leonardo did not take action then against
Lucimo Sr. and did so only in 1995, when he filed Civil Case No.
4983 – which was eventually dismissed and referred to the MTC.
They argue that, all this time, Leonardo did nothing while Lucimo
Sr. occupied the property and claimed all its fruits for himself.
Respondents’ Arguments
Respondents, on the other hand, argue in their Comment35 that –
For purposes of clarity, if [sic] is respectfully submitted that
eighteen (18) legible copies has [sic] not been filed in this case
for consideration in banc [sic] and nine (9) copies in cases heard
before a division in that [sic] all copies of pleadings served to the
offices concern [sic] where said order [sic] was issued were not
furnished two (2) copies each in violation to [sic] the adverse
parties [sic] to the clerk of court, Regional Trial Court, Branch 8,
Kalibo, Aklan, Philippines; to the Honorable Court of Appeals so
that No [sic] action shall be taken on such pleadings, briefs,
memoranda, motions, and other papers as fail [sic] to comply with
the requisites set out in this paragraph.
The foregoing is confirmed by affidavit of MERIDON F.
OLANDESCA, the law secretary of the Petitioner [sic] who sent
[sic] by Registered mail to Court of Appeals, Twentieth Division,
Cebu City; to Counsel for Respondent [sic] and to the Clerk of
Court Supreme Court Manila [sic].
These will show that Petitioner has [sic] violated all the
requirements of furnishing two (2) copies each concerned party
[sic] under the Rule of Courts [sic].36
Our Ruling
The Court denies the Petition.
The finding that Leon did not sell the property to Lucimo Sr. had
long been settled and had become final for failure of petitioners to
appeal. Thus, the property remained part of Leon’s estate.
One issue submitted for resolution by the parties to the trial court
is whether Leon sold the property to Lucimo Sr. The trial court,
1âwphi1
examining the two deeds of sale executed in favor of Enriquez
and Lucimo Sr., found them to be spurious. It then concluded that
no such sale from Leon to Lucimo Sr. ever took place. Despite
this finding, petitioners did not appeal. Consequently, any doubts
regarding this matter should be considered settled. Thus,
petitioners’ insistence on Lucimo Sr.’s 1943 purchase of the
property to reinforce their claim over the property must be
ignored. Since no transfer from Leon to Lucimo Sr. took place,
the subject property clearly remained part of Leon’s estate upon
his passing in 1962.
Leon died without issue; his heirs are his siblings Romana and
Gregoria.
Since Leon died without issue, his heirs are his siblings, Romana
and Gregoria, who thus inherited the property in equal shares. In
turn, Romana’s and Gregoria’s heirs – the parties herein –
became entitled to the property upon the sisters’ passing. Under
Article 777 of the Civil Code, the rights to the succession are
transmitted from the moment of death.
Gregoria’s and Romana’s heirs are co-owners of the subject
property.
Thus, having succeeded to the property as heirs of Gregoria and
Romana, petitioners and respondents became co-owners thereof.
As co-owners, they may use the property owned in common,
provided they do so in accordance with the purpose for which it is
intended and in such a way as not to injure the interest of the co-
ownership or prevent the other co-owners from using it according
to their rights.37 They have the full ownership of their parts and of
the fruits and benefits pertaining thereto, and may alienate,
assign or mortgage them, and even substitute another person in
their enjoyment, except when personal rights are involved.38 Each
co-owner may demand at any time the partition of the thing
owned in common, insofar as his share is concerned.39 Finally, no
prescription shall run in favor of one of the co-heirs against the
others so long as he expressly or impliedly recognizes the co-
ownership.40
For prescription to set in, the repudiation must be done by a co-
owner.
Time and again, it has been held that "a co-owner cannot acquire
by prescription the share of the other co-owners, absent any clear
repudiation of the co-ownership. In order that the title may
prescribe in favor of a co-owner, the following requisites must
concur: (1) the co-owner has performed unequivocal acts of
repudiation amounting to an ouster of the other co-owners; (2)
such positive acts of repudiation have been made known to the
other co-owners; and (3) the evidence thereof is clear and
convincing."41
From the foregoing pronouncements, it is clear that the trial court
erred in reckoning the prescriptive period within which Leonardo
may seek partition from the death of Leon in 1962. Article 1141
and Article 494 (fifth paragraph) provide that prescription shall
begin to run in favor of a co-owner and against the other co-
owners only from the time he positively renounces the co-
ownership and makes known his repudiation to the other co-
owners.
Lucimo Sr. challenged Leonardo’s co-ownership of the property
only sometime in 1979 and 1980, when the former executed the
Affidavit of Ownership of Land, obtained a new tax declaration
exclusively in his name, and informed the latter – before the
Lupon Tagapamayapa – of his 1943 purchase of the property.
These apparent acts of repudiation were followed later on by
Lucimo Sr.’s act of withholding Leonardo’s share in the fruits of
the property, beginning in 1988, as Leonardo himself claims in his
Amended Complaint. Considering these facts, the CA held that
prescription began to run against Leonardo only in 1979 – or
even in 1980 – when it has been made sufficiently clear to him
that Lucimo Sr. has renounced the co-ownership and has claimed
sole ownership over the property. The CA thus concluded that the
filing of Civil Case No. 5275 in 1997, or just under 20 years
counted from 1979, is clearly within the period prescribed under
Article 1141.
What escaped the trial and appellate courts’ notice, however, is
that while it may be argued that Lucimo Sr. performed acts that
may be characterized as a repudiation of the co-ownership, the
fact is, he is not a co-owner of the property. Indeed, he is not an
heir of Gregoria; he is merely Antipolo’s son-in-law, being married
to Antipolo’s daughter Teodora.42 Under the Family Code, family
relations, which is the primary basis for succession, exclude
relations by affinity.
Art. 150. Family relations include those:
(1) Between husband and wife;
(2) Between parents and children;
(3) Among other ascendants and descendants; and
(4) Among brothers and sisters, whether of the full or half
blood.
In point of law, therefore, Lucimo Sr. is not a co-owner of the
property; Teodora is. Consequently, he cannot validly effect a
repudiation of the co-ownership, which he was never part of. For
this reason, prescription did not run adversely against Leonardo,
and his right to seek a partition of the property has not been lost.
Likewise, petitioners’ argument that Leonardo’s admission and
acknowledgment in his pleadings – that Lucimo Sr. was in
possession of the property since 1943 – should be taken against
him, is unavailing. In 1943, Leon remained the rightful owner of
the land, and Lucimo Sr. knew this very well, being married to
Teodora, daughter of Antipolo, a nephew of Leon. More
significantly, the property, which is registered under the Torrens
system and covered by OCT RO-630, is in Leon’s name. Leon’s
ownership ceased only in 1962, upon his death when the property
passed on to his heirs by operation of law.

In fine, since none of the co-owners made a valid repudiation of

the existing co-ownership, Leonardo could seek partition of the
property at any time.

WHEREFORE, the Petition is DENIED. The assailed March 14,

2006 Decision and the September 7, 2006 Resolution of the
Court of Appeals in CA-G.R. CV No. 74687are AFFIRMED.

SO ORDERED.
G.R. No. L-33006 December 8, 1982
NICANOR NACAR, petitioner,
vs.
CLAUDIO A. NISTAL as Municipal Judge of Esperanza,
Agusan del Sur, PROVINCIAL SHERIFF of Agusan del Sur,
ILDEFONSO JAPITANA and ANTONIO DOLORICON,
respondents.
Tranquilino O. Calo, Jr. for petitioner.
Ildefonso Japitana and Antonio Boloricon for respondents.
GUTIERREZ, JR., J.:
Nicanor Nacar filed this petition for certiorari, prohibition, and
mandamus with preliminary injunction to annul an order of the
respondent judge of the municipal court of Esperanza, Agusan
del Sur directing the attachment of seven (7) carabaos, to effect
the return of four (4) carabaos seized under the questioned order,
and to stop the respondent judge from further proceeding in Civil
Case No. 65.
Respondent Ildefonso Japitana filed the complaint in Civil Case
No. 65 and entitled it "Claim Against the Estate of the Late
Isabelo Nacar With Preliminary Attachment:" On the basis of this
complaint, including an allegation "that defendant are (sic) about
to remove and dispose the above-named property (seven
carabaos) with intent to defraud plaintiff herein", and considering
that Mr. Japitana had given security according to the Rules of
Court, Judge Nistal issued the order commanding the provincial
sheriff to attach the seven (7) heads of cattle in the possession of
petitioner Nicanor Nacar. Actually only four (4) carabaos were
attached because three (3) carabaos had earlier been
slaughtered during the rites preceding the burial of the late
Isabelo Nacar.
Nicanor Nacar filed a motion to dismiss, to dissolve writ of
preliminary attachment, and to order the return of the carabaos.
Private respondent Japitana filed an opposition to this motion
while intervenor Antonio Doloricon filed a complaint in
intervention asserting that he was the owner of the attached
carabaos and that the certificates of ownership of large cattle
were in his name.
The respondent Judge denied the motion to dismiss prompting
Mr. Nacar to come to the Supreme Court.
In a resolution dated January 12, 1971, this Court, upon the
posting of a bond in the amount of P1,000.00, directed the
issuance of a preliminary mandatory injunction. The respondents
were enjoined from further enforcing the writ of attachment and to
return the seized carabaos. The judge was restrained from further
proceeding with Civil Case No. 65.
We find the petition meritorious.
The pertinent portions of the complaint filed by Mr. Japitana with
the municipal court read as follows:
ILDEFONSO JAPITANA Civil Case No. 65
Plaintiff,
FOR:
— Versus —
CLAIM AGAINST THE ESTATE NICANOR
NACAR THE LATE ISABELO NACAR WITH
Defendant. PRELIMINARY ATTACHMENT x ------
---------------------------x
COMPLAINT
COMES NOW the undersigned plaintiff and
before this Honorable Court, respectfully avers:
xxx xxx xxx
That at various dates since the year 1968, the
defendant have (sic) incurred indebtedness to the
plaintiff in the total sum of TWO THOUSAND
SEVEN HUNDRED NINETY ONE (P2,791.00)
PESOS, which said amount had long been
overdue for payment, and which the defendant up
to this date have (sic) not been able to pay,
despite repeated demands from the plaintiff;
That the defendant Isabelo Nacar died last April,
1970 leaving among other things personal
property consisting seven (7) heads of carabaos
now in the possession of the defendant Nicanor
Nacar;
That plaintiff herein file a claim against the estate
of the late Isabelo Nacar to recover the
aforementioned sum of P2,791.99;
That defendant are (sic) about to remove and
dispose the above mentioned property with intent
to defraud plaintiff herein;
That plaintiff is willing to put up a bond for the
issuance of a preliminary attachment in an
amount to be fixed by the Court, not exceeding
the sum of P 2,791.00 which is the plaintiff's claim
herein;
WHEREFORE, it is respectfully prayed that
pending the hearing of this case, a writ of
preliminary attachment be issued against the
properties of the defendant to serve as security for
the payment or satisfaction of any judgment that
may be recovered herein; and that after due
hearing on the principal against the defendant for
the sum of P 2,791,00 with legal interest from
September 15, 1970 plus costs of this suit. (Annex
"A", p. 7 rollo).
In his motion to dismiss, the petitioner raised the issue of lack of
jurisdiction and absence of a cause of action. Mr. Nacar averred
that the indebtedness mentioned in the complaint was alleged to
have been incurred by the late Isabelo Nacar and not by Nicanor
Nacar. There was, therefore, no cause of action against him. The
petitioner also stated that a municipal court has no jurisdiction to
entertain an action involving a claim filed against the estate of a
deceased person.
The same grounds have been raised in this petition. Mr. Nacar
contends:
xxx xxx xxx
9. That the respondent judge acted without
jurisdiction.The municipal courts or inferior courts
have NO jurisdiction to settle the estate of
deceased persons. The proper remedy is for the
creditor to file the proper proceedings in the court
of first instance and file the corresponding claim.
But assuming without admitting that the
respondent judge had jurisdiction, it is very patent
that he committed a very grave abuse of
discretion and totally disregarded the provisions of
the Rules of Court and decisions of this honorable
Court when he issued an ex-parte writ of
preliminary attachment, when there is no showing
 that the plaintiff therein has a sufficient cause of
action, that there is no other security for the claim
sought to be enforced by the plaintiff; or that the
amount claimed in the action is as much as the
sum for which the order is prayed for above all
legal counterclaims; There was no bond to answer
for whatever damages that herein petitioner may
suffer; (Rollo, pp. 3- 4).
xxx xxx xxx
The respondent judge tried to avoid the consequences of the
issues raised in the motion to dismiss by stating that although the
title of the complaint styled it a claim against the estate of the late
Isabelo Nacar, the allegations showed that the nature of the
action was really for the recovery of an indebtedness in the
amount of P2,791.99.
The rule cited by the judge is correctly stated but it is hardly
relevant to the contents of the complaint filed by Mr. Japitana.
It is patent from the portions of the complaint earlier cited that the
allegations are not only vague and ambiguous but downright
misleading. The second paragraph of the body of the complaint
states that the defendant (herein petitioner Nicanor Nacar) at
various dates since the year 1968 incurred debts to the plaintiff in
the sum of P2,791.00. And yet, in the subsequent paragraphs,
one clearly gathers that the debts were actually incurred by the
late Isabelo Nacar, who died several months before the filing of
the complaint. The complaint which the respondent judge reads
as one for the collection of a sum of money and all the
paragraphs of which are incidentally unnumbered, expressly
states as a material averment:
xxx xxx xxx
That plaintiff herein file (sic) a claim against the estate of the late
Isabelo Nacar to recover the aforementioned sum of P2,791.00;
xxx xxx xxx
Under the circumstances of this case, respondent Japitana has
no cause of action against petitioner Nacar. Mathay v.
Consolidated Bank and Trust Company (58 SCRA 559) gives the
elements of a valid cause of action:
A cause of action is an act or omission of one
party in violation of the legal right of the other. Its
essential elements are, namely: (1) the existence
of a legal right in the plaintiff, (2) a correlative
legal duty in the defendant, and (3) an act or
omission of the defendant in violation of plaintiff's
right with consequential injury or damage to the
plaintiff for which he may maintain an action for
the recovery of damages or other appropriate
relief. ( Ma-ao Sugar Central Co., Inc. vs. Barrios,
et al., 79 Phil. 666, 667; Ramitere et al. vs.
Montinola Vda. de Yulo, et al., L-19751, February
28, 1966, 16 SCRA 251, 255). On the other hand,
Section 3 of Rule 6 of the Rules of Court provides
that the complaint must state the ultimate facts
constituting the plaintiff's cause of action. Hence,
where the complaint states ultimate facts that
constitute the three essential elements of a cause
of action, the complaint states a cause of action;
(Community Investment and Finance Corp. vs.
Garcia, 88 Phil. 215, 218) otherwise, the
complaint must succumb to a motion to dismiss
on that ground.
Indeed, although respondent Japitana may have a legal right to
recover an indebtedness due him, petitioner Nicanor Nacar has
no correlative legal duty to pay the debt for the simple reason that
there is nothing in the complaint to show that he incurred the debt
or had anything to do with the creation of the liability. As far as
the debt is concerned, there is no allegation or showing that the
petitioner had acted in violation of Mr. Japitana's rights with
consequential injury or damage to the latter as would create a
cause of action against the former.
It is also patent from the complaint that respondent Japitana filed
the case against petitioner Nacar to recover seven (7) heads of
carabaos allegedly belonging to Isabelo Nacar which Japitana
wanted to recover from the possession of the petitioner to answer
for the outstanding debt of the late Isabelo Nacar. This matter,
however, is only ancillary to the main action. The ancillary matter
does not cure a fatal defect in the complaint for the main action is
for the recovery of an outstanding debt of the late lsabelo Nacar
due respondent Japitana, a cause of action about which petitioner
Nacar has nothing to do.
In fact the fatal defect in the complaint was noticed by the
respondent court when it advised respondent Japitana to amend
his complaint to conform with his evidence and from the court's
admission that it was inclined to dismiss the case were it not for
the complaint in intervention of respondent Doloricon.
Respondent Doloricon filed his complaint for intervention on the
ground that the four carabaos, subject of the writ of attachment,
were actually his carabaos. Thus, the respondent court in its
Order denying the petitioner's motion to dismiss, to dissolve writ
of preliminary attachment and in order the return of the carabaos
said:
... Antonio Doloricon manifested before this Court
that he is filing a third-party complaint alleging that
he is the true and lawful owner of the carabaos in
questions.
IN VIEW OF ALL THE FOREGOING, this Court
for the interest of both parties will not for the
meantime dismiss this case. Antonio Doloricon is
hereby given 10 days from receipt hereof within
which to file his third-party complaint. The plaintiff
who in his opposition to defendant's motion to
dismiss pray (sic) for the custody of the carabaos.
This Court further requires plaintiff to put up the
additional bond of P I,000.00 after which the latter
may be entitled of (sic) the custody of the
carabaos subject of litigation pending final
termination of this case. (Rollo, pp. 18-19)
The respondent court's reason for not dismissing the case is
contrary to applicable precedents on the matter. We ruled
in Mathay v. Consolidated Bank and Trust Company, supra:
Section I, Rule 16 of the Rules of Court, providing
in part that:
Within the time for pleading a
motion to dismiss may be made on
any of the following grounds; ...
(g) That the complaint states no
cause of action. ...
explicitly requires that the sufficiency of the complaint must be
tested exclusively on the basis of the complaint itself and no other
should be considered when the ground for motion to dismiss is
that the complaint states no cause of action. Pursuant thereto this
Court has ruled that:
As a rule the sufficiency of the
complaint, when challenged in a
motion to dismiss, must be
determined exclusively on the
basis of the facts alleged therein'
(Uy Chao vs. De La Rama
Steamship Co., Inc., L-14495,
September 29, 1962, 6 SCRA 69,
 72. See also De Jesus, et al. vs. issuance of a writ of attachment were followed by the respondent
Belarmino et al., 95 Phil. 365, 371; court in issuing the subject writ of attachment.
Dalandan, et at. vs. Julio, et al., L-
19101, February 29, 1964, 10 WHEREFORE, the petition is hereby granted. The preliminary
SCRA 400; Ramitere et al. vs. mandatory injunction issued on January 13, 1971 is made
Montinola Vda. de Yulo, et al., L- permanent and the cash bond filed by the petitioner in connection
19751, February 28, 1966, 16 therewith is ordered returned to him.
SCRA 250, 254; Acuna vs. Batac
Producers Cooperative Marketing SO ORDERED.
Association, Inc., et al., L-20338,
June 30, 1967, 20 SCRA 526,
531)

Hence, it was error for the respondent court not to dismiss the
case simply because respondent Doloricon filed the complaint for
intervention alleging that he owned the carabaos.

Moreover, even assuming that respondent Japitana had a legal

right to the carabaos which were in the possession of petitioner
Nacar, the proper procedure would not be to file an action for the
recovery of the outstanding debts of the late Isabelo Nacar
against his stepfather, the petitioner Nacar as defendant. As we
said in Maspil v. Romero (61 SCRA 197):

Appropriate actions for the enforcement or

defense of rights must be taken in accordance
with procedural rules and cannot be left to the
whims or caprices of litigants. It cannot even be
left to the untrammeled discretion of the courts of
justice without sacrificing uniformity and equality
in the application and effectivity thereof.

Considering the foregoing, the respondent court's denial of the

motion to dismiss the complaint and its issuance of a writ of
attachment based on the allegations of the complaint are
improper. With this conclusion, we find no need to discuss the
other issue on whether or not the procedural rules on the

G.R. No. L-15388 January 31, 1961
DORA PERKINS ANDERSON, petitioner-appellee,
vs.
IDONAH SLADE PERKINS, oppositor-appellant.
Appeal against an order of the Court of First Instance of Manila in
Special Proceedings No. 29636 authorizing the special
administrator of the testate estate of the late Eugene Arthur
Perkins to sell at public auction certain personal properties left by
the deceased.
It appears that said special proceedings were commenced on
May 10, 1956, by a petition presented by Dora Perkin Anderson
for the probate of the supposed last will and testament of the late
Eugene Arthur Perkins, who died in Manila on April 28, 1956
allegedly possessed of personal and real properties with a
probable value of P5,000,000. On the same date of the filing of
the aforesaid petition, petitioner Dora Perkins Anderson also filed
a urgent petition for the appointment of Alfonso Ponce Enrile as
special administrator of the estate, and on the same day, the
court issued an order appointing Alfonso Ponce Enrile as such
special administrator upon his posting of a bond in the amount of
P50,000. On July 9, 1956, Idonah Slade Perkins, surviving
spouse of the deceased entered an opposition to the probate of
the will presented by petitioner Dora Perkins Anderson. On
September 28, 1956 the special administrator submitted an
inventory of all the assets which have come to his knowledge as
belonging to the deceased Eugene Arthur Perkins at the time of
his death.
About two years later, or on September 4, 1958, the special
administrator submitted to the court a petition seeking authority to
sell, or give away to some charitable or educational institution or
institutions, certain personal effects left by the deceased, such as
clothes, books, gadgets, electrical appliances, etc., which were
allegedly deteriorating both physically and in value, in order to
avoid their further deterioration and to save whatever value migh
be obtained in their disposition. When the motion was heard on
September 25, 1958, the court required the administrator to
submit a specification of the properties sought to be sold, and in
compliance therewith, the special administrator, on October 21,
1958, submitted to the court, in place of a specification, a copy of
the inventory of the personal properties belonging to the estate
with the items sought to be sold marked with a check in red
pencil, with the statement that said items were too voluminous to
enumerate.
On July 9, 1956, Idonah Slade Perkins filed an opposetion to the
proposed sale. Reasons, for the opposition were that (1) most of
the properties sought to be sold were conjugal properties of
herself and her deceased husband; and (2) that unauthorized
removal of fine pieces of furniture belonging to the estate had
been made.
The opposition notwithstanding, the lower court, on December 2,
1958, approved the proposed sale, authorizing the Sheriff of
Manila to conduct the same. Oppositor Idonah Slade Perkins
moved to reconsider this order on the grounds (1) that said order
in effect authorized the special administrator to sell the entire
personal estate of the deceased, contrary to Rule 81, section 2.
Rules of Court; (2) that said order was issued without a showing
that the goods and chattels sought to be sold were perishable,
pursuant to Rule 81, section 2, Rules of Court; (3) that the
personalty sought to be sold represented the lifetime savings and
collections of oppositor; (4) that there is evidence on record
showing unauthorized withdrawals from the properties of the
estate, and the sale of the inventoried lot would prevent
identification and recovery of the articles removed; and (5) that
there is also evidence showing oppositor's separate rights to a
substantial part of the personal estate.
On February 23, 1959, the lower court denied the above motion
for reconsideration. Whereupon, oppositor Idonah Slade Perkins
appealed to this court.
Appellant first claims that the personal properties sought to be
sold not being perishable, the special administrator has no legal
authority to sell them. This argument is untenable, because
section 2, Rule 81, of the Rules of Court, specifically provides that
the special administrator "may sell such perishable and other
property as the court orders sold", which shows that the special
administrator's power to sell is not limited to "perishable" property
only.
It is true that the function of a special administrator is only to
collect and preserve the property of the deceased until a regular
administrator is appointed (sec. 2, Rule 81; De Gala v. Gonzales,
53 Phil. 104; Collins v. Henry, 118 S.E. 729, 155 Ga. 886;
Sqydelko v. Smith's Estate, 244 N.W. 149, 259 Mich. 519). But it
is not alone the specific property of the estate which is to be
preserved, but its value as well, as shown by the legal provision
for the sale by a special administrator of perishable property (Cao
vs. Cascade Silver Mines & Mills, et al., 213 P. 109 66 Mont.
488). It is in line with this general power of the special
administrator to preserve not only the property of the estate but
also its value, that section 2, Rule 81, also empowers such
administrator to sell "other proerty as the court ordered sold;" .
There is, however, a serious obstacle to the proposed sale,
namely, the vigorous opposition presented thereto the appellant,
the surviving spouse of the deceased, on the ground that she is
allegedly entitled to a large portion of the personal properties in
question, either because the were conjugal property of herself
and the deceased, or because they are her own, exclusive,
personal property. Indeed the records show that up to the time
the propose sale was asked for and judicially approved, no
proceeding had as yet been taken, or even started, to segregate
the alleged exclusive property of the oppositor-appellant from the
mass of the estate supposedly left by the deceased or to liquidate
the conjugal partnership property of the oppositor-appellant and
the deceased. Until, therefore the issue of the ownership of the
properties sought to be sold is heard and decided, and the
conjugal partnership liquidated; or, at least, an agreement be
reached with a appellant as to which properties of the conjugal
partnership she would not mind being sold to preserve their value
the proposed sale is clearly premature. After all, most of the items
sought to be sold — pieces of furniture, kitchen and dinner ware,
electrical appliances, various gadget and books — can easily be
protected and preserved with proper care and storage measures
in either or both of two residential houses (in Manila and in
Baguio City left by the deceased, so that no reasons of extreme
urgency justify the proposed sale at this time over the strong
opposition and objection of oppositor-appellant who may later be
adjudged owner of a substantial portion of the personal estate in
question.
The special administrator claims in his brief that t oppositor-
appellant should have indicated the alleged "fine furniture" which
she did not want sold and that her refusal to do so is an indication
of her unmeritorious claim. But it does not appear that appellant
was given a reasonable opportunity to point out which items in
the inventory she did not want sold. In fact, her opposition to the
proposed sale and later her motion for reconsideration to the
order approving the same were overruled by the court without so
much as stating reasons why the grounds for her opposition were
not well-founded; the records do not even show that an inquiry
was made as to the validity of the grounds of her opposition.
WHEREFORE, the lower court's order of December 2, 1958
authorizing the special administrator to sell certain personal
properties of the estate is set aside, with costs against the special
administrator Alfonso Ponce Enrile and petition-appellee Dora
Perkins Anderson.
G.R. No. L-31048 January 20, 1976
LUCENA MAGALLANES, petitioner,
vs.
HON. UNION KAYANAN, Presiding Judge of Branch IV, CFI,
Quezon and the HEIRS OF ELIGIO
MAGALLANES, respondents.
Abelio M. Marte and Clemente T. Alcala for petitioner.
Eufemio E. de Mesa for private respondents.
MARTIN. J.:
The validity of a summary judgment rendered in the Court of First
Instance of Quezon, in Special Proceedings No. 3913, entitled
Re: Summary Settlement of the Estate of Filomena Magallanes,
Lucena Magallanes, petitioner, versus Heirs of Eligio Magallanes,
oppositors, is the main issue in this petition for review.
On August 4, 1960, petitioner Lucena Magallanes filed a
"Solicitud" praying that Lot No. 2657 covered by Original
Certificate of Title No. 1091 and one-half (½) of Lot No. 3465
covered by Original Certificate of Title No. 6447, both of the
Register of Deeds of Tayabas (Quezon) be partitioned and
distributed among the heirs of the deceased Filomena
Magallanes.
On October 31, 1961, private respondents, the Heirs of Eligio
Magallanes, namely: Maria San Buenaventura, Godofredo
Magallanes and Carmen Magallanes de Ingente filed their
opposition and motion to dismiss the "Solicitud" claiming title and
ownership over the parcels of land in question and raising the
issue that the trial court is devoid of jurisdiction to resolve the
issues raised in the pleadings.
On July 12, 1968, the private respondents filed a petition for
summary judgment on the pleadings praying that their absolute
right of ownership over the properties in question be recognized
and confirmed. Petitioner files her opposition to the petition for
summary judgment on the ground that in a summary settlement
of an estate, the Court has no jurisdiction to pass finally and
definitely upon the title or ownership over the properties involved
therein; and that summary judgment is not proper, there being a
genuine issue or material controversy raised by the pleadings of
the parties.
On March 21, 1969, the lower court, rendered a summary
judgment on the pleadings submitted by the parties confirming
the private respondents' (Heirs of Eligio Magallanes) absolute and
exclusive right of ownership and possession over the whole of Lot
No. 2657 and the one-half undivided portion of Lot No. 3465 and
ordering the Register of Deeds of Quezon Province to cancel the
Notice of Lis Pendens on Original Certificate of Title No. 1091
covering Lot No. 2657.
On April 22, 1969, the petitioner moved for reconsideration of the
aforesaid summary judgment and/or new trial but the lower court
on June 19, 1969 denied the motion for reconsideration for being
pro forma and declared its decision dated March 21, 1969 to be
final and executory. Accordingly, a writ of execution was issued
and served upon the petitioner on July 14, 1969. However, even
before said date, petitioner was able to perfect her appeal on
June 30, 1969, with the filing of the notice of appeal, appeal bond
and record on appeal.
In her brief, petitioner presses upon the lower court the following
errors:
I
THE TRIAL COURT ERRED IN PASSING UPON
FINALLY AND DEFINITELY THE TITLE TO OR
OWNERSHIP OF LOT 2657 OF THE LUCENA
CADASTRE, COVERED BY ORIGINAL
CERTIFICATE OF TITLE NO. 1091 OF THE
REGISTER OF DEEDS OF TAYABAS AND ONE-
HALF (½) OF LOT NO. 3465 OF THE LUCENA
CADASTRE, COVERED BY CERTIFICATE OF
TITLE NO. 6447 OF THE REGISTER OF DEEDS
OF TAYABAS, WHEN IT HAS NO
JURISDICTION TO SO ACT, THE PETITIONER
HAVING CONSISTENTLY REFUSED TO
SUBMIT THAT ISSUE TO THE JURISDICTION
OF THE TRIAL COURT.
II
THE TRIAL COURT ERRED IN NOT MERELY
DETERMINING IN THE DECISION DATED
MARCH 21, 1969 WHETHER OR NOT THE
PROPERTIES IN QUESTION SHOULD BE
INCLUDED IN THE INVENTORY ASSUMING
THE AFORESAID DECISION RENDERED
THROUGH SUMMARY JUDGMENT WAS
PROPER AND REGULAR.
III
THE TRIAL COURT ERRED IN RENDERING
THE DECISION DATED MARCH 21, 1969
THROUGH SUMMARY JUDGMENT, WITHOUT
TRIAL, WHERE THERE ARE GENUINE ISSUES
AND MATERIAL CONTROVERSY, THE
PETITIONER CLAIMING IN HER PLEADINGS
THAT SHE AND HER CO-HEIRS OWN THE
REALTIES IN QUEZON BY INHERITANCE
FROM THE DECEASED FILOMENA
MAGALLANES WHILE THE RESPONDENTS
CLAIM OWNERSHIP OVER THE AFORESAID
REALTIES BY PURCHASE FROM THE
DECEASED FILOMENA MAGALLANES DURING
HER LIFETIME.
IV
THE TRIAL COURT ERRED WHEN IT HELD IN
ITS ORDER OF JUNE 19, 1969 THAT THE
MOTION FOR RECONSIDERATION DATED
APRIL 21, 1969 IS PRO FORMA AND DID NOT
SUSPEND THE RUNNING OF THE PERIOD TO
APPEAL.
V
THE TRIAL COURT ERRED IN HOLDING THE
DECISION DATED MARCH 21, 1969 FINAL AND
EXECUTORY.
VI
THE TRIAL COURT ERRED IN ORDERING THE
ISSUANCE OF A WRIT OF EXECUTION IN THE
SAME ORDER OF JUNE 19, 1969.
VII
THE TRIAL COURT ERRED IN ISSUING THE
WRIT OF EXECUTION DATED JUNE 19, 1969
WHICH IS VOID AND OF NO EFFECT.
We find merit in the petitioner's argument that the lower court has
no jurisdiction to pass finally and definitely upon the title or
ownership of the properties involved in the summary settlement of
the estate of the deceased Filomena Magallanes instituted by the
petitioner. Well established is the doctrine that the property,
whether real or personal, which are alleged to form part of the
estate of a deceased person but claimed by another to be his
property by adverse title to that of the deceased and his estate
and not by virtue of any right of inheritance from ' the deceased,
cannot be determined by the probate court. Such questions must
be submitted to the Court of First Instance in the exercise of its
general jurisdiction to try and determine ordinary actions. 1 The
probate court may do so only for the purpose of determining
whether or not a given property should be included in the
inventory of the estate of the deceased, but such determination is
not conclusive and is still subject to a final decision in a separate
action to be instituted between the parties. 2 Likewise, the probate
court may also determine questions of title to property if the
parties voluntarily submitted to its jurisdiction and introduced
evidence to prove ownership.3
In the case at bar, the action instituted by the petitioner was not
for the purpose of determining whether or not a given property
should be included in the inventory of the estate of the deceased.
The action was for partition and distribution of the properties left
by the deceased. Neither have all of the parties voluntarily
submitted the issue of ownership for resolution by the court. As a
matter of fact the petitioner opposed the petition of private
respondents to have the issue of ownership or title decided in the
proceeding for the settlement of the estate of the deceased. It
was therefore erroneous for the lower court to resolve the
question of title or ownership over the properties in said
proceeding. It could only pass upon such a question in the
exercise of its general jurisdiction in an ordinary action.
Petitioner faulted the lower court for rendering summary judgment
on the case. Summary judgment can be availed of where no
genuine issue as to any material fact is raised in the
pleadings. 4 Where there is an issue or issues of fact joined by the
parties or where the facts pleaded by the parties are disputed or
contested, neither one of them can pray for a summary judgment
to take the place of a trial. 5 Summary judgment can be rendered
only where there are no questions of fact in issue or where the
material allegations of the pleadings are not disputed.
An examination of the pleadings in this case clearly shows that
there is a genuine issue or material controversy raised therein.
Thus, petitioner claims that she and her co-heirs have the right to
inherit the properties in question as they form part of the estate of
Filomena Magallanes. On the other hand, herein private
respondents contend that they acquired the ownership over the
said properties by purchase from Filomena Magallanes during her
lifetime. In the face of the conflicting claims of both petitioner and
respondents a factual dispute certainly arises which can only be
properly settled by means of a trial on the merits. Summary
judgment was, therefore, uncalled for in the premises.
Petitioner also assailed the order of the lower court denying her
motion for reconsideration of the summary judgment in question
as pro forma. A motion for new trial or reconsideration on the
ground that the judgment is contrary to law, which does not point
out the supposed defects in the judgment is pro forma Section 2,
Rule 37 of the Rules of Court requires the movant for the new trial
to point out the findings of fact or conclusions of law supposed to
be insufficiently borne out by the evidence or contrary to law. 6 A
reading of the motion for reconsideration of the aforesaid
summary judgment show's specifically the conclusions reached
by the lower court which are contrary to law, the lack of
jurisdiction on the part of the lower court to resolve the issue of
ownership and possession of properties left by a deceased
person in the settlement of his estate proceeding and the
propriety of the rendition of the summary judgment on the
pleadings submitted by the parties. Although the former pleadings
of the petitioner already contained allegations on the question of
jurisdiction and the propriety of the summary judgment, this fact
does not make the motion for reconsideration pro forma because
it expressly made reference to what portion of the lower court's
conclusion are contrary to law and to established jurisprudence.
In a case7 the Supreme Court held that the motion for new trial or
reconsideration cannot be considered as simply pro forma where
t not only states that the decision is contrary to law but also
explains in detail relevant facts for seeking its revocation. Since
the motion for reconsideration is not pro forma the filing of the
same on time stopped the running of the period within which to
appeal the decision. It was therefore an error on the part of the
lower court to issue a writ of execution of the decision in question
before it has become final and executory.

Finally, private respondents claim that the trial court erred in

approving petitioner's record on appeal after it had lost jurisdiction
over the case. There is no need to resolve the assigned error. It is
elementary that in a petition for certiorari like the case before Us,
the submission of a record on appeal is not necessary.

WHEREFORE, in view of all the foregoing judgment is hereby

rendered:

1. Declaring the decision of the lower court dated March 21, 1968
and the writ of execution dated June 19, 1969 null and void; and

2. Remanding the case to the lower court as a court of general

jurisdiction to settle the title and ownership over the parcels of
land in question between Lucena Magallanes who claims to have
inherited the same from Filomena Magallanes and-the heirs of
Eligio Magallanes who claim to have purchased them.

Costs against the private respondents.

SO ORDERED.
G.R. No. 56700 March 28, 1983
WARLITO MABALOT and ARACELI MABALOT, petitioners,
vs.
THE HON. JUDGE TOMAS P. MADELA, JR., in his capacity as
Judge of the Court of First Instance of Manila and PEDRO V.
MALIT, respondents.
Efren A. Santo for petitioners.
Pedro V. Malit in his own behalf.
VASQUEZ, J.:
This is an unlawful detainer case originally commenced in the
City of Manila by private respondent to eject the petitioners from
an apartment located at No. 2262 Coral Street, San Andres,
Manila. The decision of said court, which was in favor of the
petitioners, was appealed by the private respondent to the Court
of First Instance of Manila where it was assigned to the branch
presided over by respondent Judge Tomas P. Madela, Jr. A
decision rendered on January 6, 1981 by Judge Madela reversed
the decision of the City Court and ordered the petitioners to
vacate the premises in question.
The petitioners took a direct appeal from the decision of the Court
of First Instance of Manila on the legal question raised by them
with respect to the alleged lack of jurisdiction of the City Court of
Manila and the Court of First Instance of Manila to take
cognizance of the basic action.
The facts of this case, as synthesized in the decision of Judge
Madela and which are impliedly admitted by the petitioners in
taking this direct appeal to this Court on a pure question of law,
are as follows:
From the records and evidence of the case,
plaintiff appellant as owner of an apartment No.
2262 located at Coral Street, San Andres, Manila
leased it to Atty. Armando Galvez on a monthly
basis of P200.00 a month since 1967. Staying
with him in said apartment is defendant Araceli
Mabalot and a maid the former claiming to be a
ward of Atty. Galvez since she was 10 years old
when her mother died and her father could not
support her (t.s.n. pp. 3-4, Dec. 6, 1979). In 1970
Araceli Mabalot married defendant Warlito
Mabalot and continued to stay with Atty. Galvez
until his death on August 23, 1977. After the death
of Atty. Armando Galvez, the arrearages for the
monthly rentals of July and August were paid by
Atty. Fernando Galvez, a brother of the late Atty.
Armando Galvez and for the month of September
1977, Atty. Fernando Galvez issued a check (pay
to cash) which he gave to the defendants-
appellees to pay the plaintiff-appellant. However,
the corresponding receipts were issued by plaintiff
in the name of Atty. Fernando Galvez.
As early as September 1, 1977, in his letter to
Atty. Fernando Galvez, the plaintiff-appellant
intimated that with the death of his brother, Araceli
Mabalot and husband cannot take over the
apartment as the contract of lease between him
and Atty. Armando Galvez is a personal one and
could not be transmitted to them (Exh. "A"). On
September 5, 1977, plaintiff wrote the defendants
that they could not take over the apartment as it
could not be the subject of inheritance and gave
them three (3) months to vacate the same (Exhibit
"B"). However, defendants refused to receive said
letter, as plaintiff with the help of patrolman
Tomas Soriaga served it the following morning
with the policeman as a witness (Exh. "B-1").
 Araceli Mabalot admitted that the late Armando
Galvez has his own family, a wife and children
namely, Cynthia, Rosalinda, Danilo, Jocelyn and
Olivia who were mentioned in his application for
insurance as his legitimate children with Araceli
mentioned as a niece (t.s.n. p. 16, Oct. 25, 1977).
The succeeding payments of the rentals were
paid by defendants- appellees' counsel, Atty.
Efren Santos.
The question to be resolved is, whether or not the
defendants, Warlito and Araceli Mabalot have the
right to continue as tenants of the plaintiff from the
death of Atty. Armando Galvez. (Annex "A",
Petitioners' Brief, p. 72, Rello.)
As may be noted from the definition of the issue by Judge
Madela, the question which was raised and argued by the parties
in the lower courts was the right of the petitioners to succeed to
the lease over the subject apartment previously existing between
Armando Galvez and the private respondent. Apparently
convinced of the correctness of the holding of Judge Madela that
they may not continue said lease inasmuch as the petitioners are
not heirs of Armando Galvez (Art. 1311, Civil Code), nor was
such lease assigned by Armando Galvez to the petitioners with
the consent of private respondent (Art. 1649, Ibid), the petitioners
now rely on the alleged legal infirmity of the proceedings had in
the lower courts by attacking their jurisdiction to take cognizance
of the case.
It is the petitioners' main contention that the City Court lacked
jurisdiction to entertain the action filed by the private respondent
inasmuch as it is not an action for unlawful detainer, but one the
subject matter of which is incapable of pecuniary estimation
falling within the original jurisdiction of the court of first instance
pursuant to Section 44(a) of the former Judiciary Act. Petitioners
argue that an action for unlawful detainer must be filed within one
year after the unlawful deprivation of the possession of the
subject property by the defendant. They contend that this
requirement does not exist in this case inasmuch as petitioner
Araceli Mabalot was admittedly staying in the apartment together
with Armando Galvez since 1966, and the action to eject her was
filed only on January 8, 1978. They further point out that in
paragraph 7 of the complaint, the private respondent had
expressly alleged that he denied the request of the petitioners to
continue the lease of Armando Galvez on the ground "that a
lease contract is personal in nature and cannot be the subject of
inheritance." By this allegation, so the petitioners contend, the
basic issue becomes a determination of whether or not a lease
contract may be the subject of inheritance, thereby making the
action as one of the subject matter of which is not capable of
pecuniary estimation.
Petitioners' submissions are typical examples of the arguments
advanced by defendants in ejectment cases in their attempt to
prolong their occupancy of premises over which they ceased to
have valid ground to possess, by keeping alive the litigation
involving their ejectment therefrom. The records of our courts will
reveal that a considerable percentage of the cases pending in
them are actions for forcible entry and detainer. Ordained by law
to be commenced in the courts at the municipal or city level, they
pass thru all the other grades of courts in the judicial system up to
the Highest Court of the land. It is ironic that a forcible entry or
detainer case which is intended to be disposed of in summary
fashion has oftentimes proved to be the most cumbersome and
difficult to terminate. It has become a truism that, if a landlord
would like to eject a tenant in the shortest possible time, the worst
thing that he could do is to file an ejectment case. It is, indeed,
about time that this situation be remedied if only to contribute to
the solution of the worsening problem of court congestion, by
refusing to edify these cases by giving them a full-blown
treatment in all the courts in the judicial structure, and thereby
save the courts the expenditure of precious time and energy
which could otherwise be devoted to more significant and vital
litigations.
The time limitation of one year within which to file an action for WHEREFORE, the petition is hereby DISMISSED. With costs
forcible entry and detainer is reckoned not from the moment of against the petitioners.
occupancy by the defendant, but from the time that his
possession becomes unlawful. The occupancy of the apartment SO ORDERED.
by Araceli Mabalot in 1966 was not unlawful because she was
then a member of the household of Armando Galvez who was the
lessee of the premises in question. The possession of the
petitioners became unlawful only after Armando Galvez died,
which was on August 23, 1977. Such death of Armando Galvez
terminated the lease in his favor. Petitioners do not have any
colorable right to occupy the apartment thereafter. The filing of
the case on January 8, 1978 was well within one year period from
August 23, 1977.

There is less merit in the contention that the action filed by the
private respondent is one in which the subject matter is incapable
of pecuniary estimation just because it involves the legal question
as to the right of the petitioners to continue the lease by reason of
inheritance. Such legal issue is purely incidental to the question
of whether they are entitled to possess the apartment in question.
The action is for the recovery of the possession of real property
brought within one year from the time the possession of the
defendant became unlawful, technically known as an action for
unlawful detainer. Although it is a real action which should
ordinarily fall under the jurisdiction of the court of first instance
(now the regional trial court), the law vests the exclusive original
jurisdiction over it in the courts at the municipal or city level as an
exception to the general rule on jurisdiction over real actions,
presumably in view of the summary nature of the proceedings
contemplated to be taken therein. This kind of action is different
and distinct from the class of actions where the subject of the
litigation is incapable of pecuniary estimation. An action does not
become one where the subject is incapable of pecuniary
estimation by the mere fact that an issue of law is raised therein.
Such a view would result in converting virtually all civil actions
into that category, and in depriving the municipal and city trial
courts of jurisdiction over all civil cases where a party raises a
question of law.
G.R. No. L-14127 August 21, 1962 "upon all the rights, interest and participation which the spouses
Bartolome Driz and Pilar Belmonte have or might have" in a
ISIDORO M. MERCADO, plaintiff-appellee, parcel of land covered by original certificate of title No. 3484 of
vs. the Registrar of Deeds in and for the province of Nueva Ecija
LEON C. VIARDO and PROVINCIAL SHERIFF OF NUEVA (Exhibit A, p.3). This certificate of title covers a parcel of land (Lot
ECIJA, defendants-appellants. No. 1, Psu-14371) in the barrios of Nieves and Santo Rosario,
municipality of Zaragoza, province of Nueva Ecija, containing an
----------------------------- area of 1,192,775 square meters, more or less. The land is
registered in the names of "Leonor Belmonte, Felisa Belmonte,
Pilar Belmonte and Ines de Guzman, subject . . . to the condition
G.R. No. L-14128 August 21, 1962
that ¼ share [that] belongs to Ines de Guzman is usufructuary
"correspondiendo la nuda propiedad a sus tres hijas arriba
LEON C. VIARDO, plaintiff-appellant, citadas en participaciones iguales quienes se consolidara el
vs. dominio despues del fallecimiento de su madre' " (Exhibit A, p. 2).
PILAR BELMONTE, PATRICIA DRIZ, JOAQUINA DRIZ,
ISIDORO MERCADO,
On 25 February 1941, by virtue of the writ of execution above
TRINIDAD ISIDRO, ZACARIAS BELMONTE, TERESITA
mentioned, the provincial sheriff of Nueva Ecija sold at public
FLORES,
auction one-half (½) of the following property:
PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY,
INC. and PHILIPPINE NATIONAL BANK,defendants-appellees.
TAX DECLARATION NO. 11313 OF THE MUNICIPALITY OF
ZARAGOZA, PROVINCE OF NUEVA ECIJA AND COVERED BY
No. L-14127:
ORIGINAL CERTIFICATE OF TITLE NO. 3484 OF THE LAND
Agustin C. Bagasao for plaintiff-appellee.
RECORDS OF NUEVA ECIJA.
Manuel A. Concordia for defendants-appellants.
A parcel of land, situated in the sitio of Valdez, barrio Sto.
No. L-14128:
Rosario, municipality of Zaragoza, Province of Nueva
Manuel A. Concordia for plaintiff-appellant.
Ecija. Bounded on the North by property of Felisa
E. A. Bello, M. Y. Macias and A. A. Reyes for defendant-appellee
Belmonte; on the East by Sapang Dalagot; on the
Philippine American General Insurance Company, Inc.
Southeast by Ines de Guzman; on the South by the
Cecilio F. Wycoco for defendants-appellees Pilar Belmonte and
property of Felisa Belmonte; and on then West by the
Teresita Flores.
property of Cirilo Acosta; containing an area of THIRTY
Carlos M. Ferrer for defendants-appellees Patricia Driz, et al.
(30) HECTARES, more or less. Declared under tax No.
11313 in the name of Pilar Belmonte with an assessed
PADILLA, J.: value of P8,400.00.

In civil case No. 7611 of the Court of First Instance of Nueva The highest bidder at the auction sale was the judgment creditor,
Ecija, entitled Leon C. Viardo vs. Bartolome Driz and Pilar Leon C. Viardo, who paid P2,125.64 for the interest sold and
Belmonte, a writ of execution was issued and levy was made P83.15 for the land tax corresponding to such interest (Exhibit B).
When the judgment debtors failed to redeem the property within
the statutory period of one year from the date of sale (21
February 1941), the provincial sheriff of Nueva Ecija executed on
12 May 1943 a Final Bill of Sale of the property described in
Exhibit B in favor of Leon C. Viardo (Exhibit C). On 3 May 1943 a
co-owner's copy of the certificate of title was issued to Leon C.
Viardo (Exhibit A, p. 3).
On 28 December 1945 the Court of First Instance of Nueva Ecija,
in Land Registration Case No. 918, G.L.R.O. Record No. 17910,
acting upon a verified petition of Leon C. Viardo, ordered the
Registrar of Deeds in and for Nueva Ecija —
to cancel Original Certificate of Title No. 3484 and to
issue another in lieu thereof in the name of and in the
proportion as follows: LEONOR BELMONTE ¼ share;
FELISA BELMONTE, ¼ share; PILAR BELMONTE, ¹/8
share; LEON C. VIARDO, ¹/8 share; and INES DE GUZMAN, ¼ share, upon the
payment of the corresponding fees (Exhibit D).
However, it appears from Original Certificate of Title No. 3484
(Exhibit A) that the above-mentioned order was not carried out
and that said original certificate of title was not cancelled.
On 27 May 1946 Bartolome Driz and Pilar Belmonte filed in the
Court of First Instance of Nueva Ecija a complaint against Leon
C. Viardo (civil case No. 161) praying that judgment be rendered
against the defendant:
(a) Ordering the defendant to reconvey the property in
question in favor of plaintiffs herein upon payment by the
latter of the lawful redemption price in accordance with
law, or the sum of P2,125.64 with interest at the rate of
one per centum (1%) per month for twelve (12) months
from February 27, 1941 to February 27, 1942. (Exhibit E.)
On 4 June 1946 Patricia Blando, attorney for the plaintiffs
Bartolome Driz and Pilar Belmonte, requested the Registrar of
Deeds in and for Nueva Ecija for —
the annotation of a Notice of LIS PENDENS on the back
of ORIGINAL CERTIFICATE OF TITLE NO. 3484 of the
Office of the Register of Deeds for the Province of Nueva
Ecija, affecting the undivided one-half (½) portion of the
property of the plaintiffs in the above-entitled cause,
situated in the Sitio of Valdez, Barrio of Sto. Rosario,
Municipality of Zaragoza, which is involved in the said
controversy against the defendant LEON C. VIARDO, and
which is more particularly described under paragraph (4)
of the plaintiffs' complaint a copy of which is hereby
presented, hereunto attached. (Exhibit F.)
On 6 June 1946 the Registrar of Deeds made the following
annotation on the back of original certificate of title No. 3484:
Entry No. 3347/0-3484: Kind — Lis Pendens — Executed
in favor of Bartolome Driz and Pilar Belmonte; Conditions
— Al the rights, interests, and participation of Leon C.
Viardo in this title is the subject of a complaint filed in Civil
Case No. 16 of the C.F.I. of N.E. now pending for action.
Date of the instrument — June 4, 1946; Date of the
inscription — June 6, 1946 at 3:18 (?) p.m. (Sgd.) F.C.
Cuizon, Acting Register of Deeds. (Exhibit A, p. 3.)
While the above-mentioned case was pending in the Court of
First Instance of Nueva Ecija, Pilar Belmonte, one of the plaintiffs,
entered into the following contracts involving her interest or rights
over the parcel of land covered by original certificate of title No.
3484:
(1) Entry No. 10984: Kind — Sale; Executed in favor of —
Isidro M. Mercado & Trinidad Isidro; Conditions--Pilar
Belmonte sold a portion of Seven and One-Half (7-½)
 hectares of the property described in this title for the sum
of P5,500.00 (D-126: P-90: B-11: S-1948, Herminio E.
Algas, N. E.) Date of the Inst. — June 28, 1948 at 1:30
p.m. (Sgd.) F.C. CUIZON, Register of Deeds.
(2) Entry No. 10985/0-3484: Kind — Sale with right of
repurchase: Executed in favor of — Federico Aquino;
Conditions — Pilar Belmonte sold with a right of
repurchase seven and one-half (7-½) hectares of her
share, interest and participation in this title for the sum of
P3,600.00 (D-127: P-90: B-11: S-48. H. Algas, N. E.) Date
of the Inst. — June 28, 1948; Date of the Inscription —
June 28, 1948 at 1:30 p.m. (Sgd.) F. C. CUIZON, Register
of Deeds.
(3) Entry No. 15110/0-3484: Kind — Resale: Executed in
favor of — Pilar Belmonte; Conditions — Federico Aquino
resold his share in this title consisting of 7-½ Has. for the
sum of P3,600.00 (D-63: P-15: B-6: S-1949, Jose E.
Castañeda, Manila) Date of the Inst. — March 8, 1958:
Date of the Inscription — April 8, 1949 at 11:30 a.m.
(Sgd.) F.C. CUIZON, Register of Deeds.
(4) Entry No. 15111/0-3484: Kind — Sale; Executed in
favor of — Dominador Asuncion and Tomasita Dansil:
Pilar Belmonte sold a portion of seven (7) Has. of her
share and participation in this title for the sum of
P7,000.00. (D-64: P-15: B-6: S-1949, J. E. Castañeda,
Manila) Date of the Inst. — March 9, 1949; Date of the
Inscription — April 8, 1949 at 11:30 a.m. (Sgd.) F.C.
CUIZON, Register of Deeds. (Exhibit A, p. 4)
On 11 April 1950 the Court of First Instance of Nueva Ecija
rendered judgment in civil case No. 161, as follows:
IN VIEW OF THE FOREGOING, the Court absolves the
defendant from the complaint of the plaintiffs, in the same manner
that plaintiffs are absolved from the counter complaint of the
defendant. Defendant is the legal owner of the land in question
and the right of redemption of the plaintiff of said land had already
elapsed. With costs to the plaintiff. (Exhibit G.)
Not satisfied with the judgment dismissing his counter-claim, the
defendant Leon C. Viardo appealed to the Court of Appeals.
While the appeal was pending, the following transactions
involving the interest or rights of Pilar Belmonte over the parcel of
land covered by original certificate of title No. 3484 took place:
(1) Entry No. 7967/NT-15162: Kind — Partition: Executed
in favor of — Felisa Belmonte, et al.; Conditions — By
virtue of a deed of partition, the share of the deceased
Ines de Guzman and Isidro Belmonte has been
adjudicated in favor of the heirs of said deceased. (D-891:
P-77: B-V: S-1948, Manuel E. Castañeda, Manila) Date of
the Inst. — March 31, 1948: Date of the Inscription —
Feb. 18, 1954 at 10:18 a.m. (Sgd.) F.C. CUIZON,
Register of Deeds.
(2) Entry No. 7968/NT-15162: Kind — Agreement:
Executed in favor of — Felisa Belmonte, et al; Conditions
— By virtue of an agreement of the parties concerned in
the partition, Lots Nos. 1-D and 1-J, with an area of
300,000 sq. m. and 80,000 sq.m., more or less,
respectively in the subdivision plan Psd-36340, a portion
of lot 1 described on plan Psu-14371, of this title, have
been adjudicated in favor of Felisa Belmonte and Lot 1-G
with an area of 75,000 sq.m., more or less, of the same
subdivision, has been adjudicated in favor of Isidoro
Mercado, See TCT No. 15162 and 15163, Vol. No. 76.
(D-211: P-44: B-IV: S-1952, P. Bautista, Cab. City) Date
of the Inst. — Jan. 22, 1952: Date of the Inscription —
Feb. 18, 1954 at 10:18 a.m.(Sgd.) F.C. CUIZON, Register
of Deeds.
(3) Entry No. 9715/NT-15746: Kind — Sale; Executed in
favor of — Sp. Zacarias Belmonte and Teresita Flores;
Conditions — Dominador Asuncion and Tomasita Dansil
sold all their rights and interest in this title consisting of
seven hectares for the sum of P6,000.00. (D-177: P-37:
B-IV: S-1952; R. S. Pengson, N.E.) Date of the Inst. —
Feb. 4, 1952; Date of Inscription — May 13, 1954 at 10:08
a.m. (Sgd.) F.C. CUIZON, Register of Deeds.
(4) Entry No. 12168/NT-15162: Kind — Project of Partition
— Executed in favor of Pilar Belmonte; Conditions — By
virtue of a project of partition re-estate of the late Ines de
Guzman, a portion of 13.2775 hectares of the land
described in this title has been adjudicated in favor of
Pilar Belmonte. (D-891: P-77: B-V: S-1948, Manuel E.
Castañeda, Manila) Date of the Inst. — March 31, 1948:
Date of the Inscription — Aug. 23, 1954 at 2:00 p.m.
(Sgd.) F.C. CUIZON, Register of Deeds. 1äwphï1.ñët
(5) Entry No. 12169/NT-16440: Kind — Sale; Executed in
favor of — Joaquin Driz: Conditions — Pilar Belmonte
sold Lot 1-B of the subdivision plan of this title Psd-36340
a portion taken from her undivided 13.2775 hectares with
an area of 52,775 sq.m., more or less, for the sum of
P800.00. See TCT NT-16440, Vol. No. 83. (D-160: P-33:
B-I: S-1954, Adolfo San Juan, Cab. City) Date of the Inst.
— Aug. 23, 1954; Date of the Inscription — Aug. 23, 1954
at 2:00 p.m. (Sgd.) F.C. CUIZON, Register of Deeds.
(6) Entry No. 12370/NT-16488: Kind — Sale; Executed in
favor of — Patricia Driz: Conditions — Pilar Belmonte sold
Lot 1-A of the subdivision plan Psd-36340 being a portion
of Lot 1 described in plan Psu-14371, G.L.R.O. Cad.
Record No. 17910, of this title for the sum of P1,000.00
with an area of 80,000 sq.m., with respect to her share of
13.2775 hectares. See TCT No. NT-16488, Vol. 83. (D-
440: P-90: B-V: S-1954, H. V. Garcia, Cab. City) Date of
the Inst. — Aug. 31, 1954: Date of the Inscription — Sept.
2, 1954 at 8:00 p.m. (Sgd.) F.C. CUIZON, Register of
Deeds.
(7) Entry No. 12512/NT-16546: Kind — Sale; Executed in
favor of — Patricia Driz: Conditions — Pilar Belmonte sold
Lots Nos. 1-H and 1-I of the subdivision plan Psd-30340
of the property described in this title for the sum of
P850.00. See TCT No. NT-16524, Vol. 83. (D-167: P-35:
B-I: S-1954, Adolfo San Juan, Cab. City) Date of the Inst.
— Sept. 9, 1954; Date of the Inscription — Sept. 9, 1954
at 11:50 a.m. (Sgd.) F. C. CUIZON, Register of Deeds.
(8) Entry No. 12569/NT-16546: Kind — Sale; Executed
favor of — Patricia Driz; Conditions — Pilar Belmonte sold
Lot I-E of the subdivision plan Psd-30340 of the property
described in this title, with an area of 79,848 sq.m., more
or less the subdivision plan of this title, was sold for the
sum of P2,000.00. See TCT No. NT-16546, Vol. 83. (D-
172: P-36: BS-1954, Adolfo San Juan, Cab. City) Date of
the Inst. — Sept. 11, 1954; Date of the Inscription —
Sept. 13, 1954 at 8:20 am. (Sgd.) F.C. CUIZON, Register
of Deeds. (Exhibit A, pp. 4-5.)
On 22 September 1954, a few days after the last transactions
mentioned above, the Court of Appeals passed a resolution
granting the prayer of defendant-appellant Leon C. Viardo that
the children and only heirs, namely, Artemio, Patricia, Mario,
Domingo, Joaquina and Catalina, surnamed Driz, who were all of
age, be substituted for the deceased appellee Bartolome Driz (the
husband of Pilar Belmonte). (Exhibit H-1).
On 25 September 1954 the Court of Appeals rendered judgment
awarding damages prayed for in the counterclaim of Leon V.
Viardo. The judgment made the following findings and
conclusions:
 . . . The area of the contested property is 15 hectares. By
computation, this is capable of producing 750 cavans of
palay a year. On the basis of 70-30, defendant is entitled
to 225 cavans of palay a year. Therefore, plaintiffs are
under obligation to deliver to defendant this quantity of
palay every agricultural year from the filing of defendant's
answer on August 5, 1946, up to the time he vacates said
land, or pay the equivalent value thereof at P12.00 a
cavan.
Having been declared owner of the land in dispute,
defendant is entitled to its possession. Inasmuch as the
court below did not order plaintiffs to restore the
possession of the land in question, we hereby order them
to vacate the same and restore possession thereof to
defendant. (Exhibit H.)
This judgment of the Court of Appeals became final and
executory and the records were remanded to the lower court. On
16 December 1954 the Court of First Instance of Nueva Ecija
issued a writ of execution (Exhibit W). The return made by Chief
of Police of the Municipality of Zaragoza on 14 February 1955
states that Leon C. Viardo had been placed in possession of the
parcel of land referred to in the writ and that levy was made on a
total of 86 cavans and 74 kilos of palay, and that the same were
deposited in a warehouse (Exhibit X).
On or about 4 January 1955 Isidoro M. Mercado filed a third party
claim with the Provincial Sheriff of Nueva Ecija (Exhibit Y). The
affidavit attached to the claim states that Isidoro M. Mercado and
his wife purchased from Pilar Belmonte on 28 June 1948 seven
and one-half hectares of her undivided share in the land
described in original certificate of title No. 3484, that on the same
day the deed of sale was registered, that a transfer certificate of
title was issued in their names, and that since 1948 up to the time
of the levy on execution he had been in actual possession of the
parcel of land, paying the corresponding taxes thereon and had
exclusively benefited from the harvests therein, (Exhibit Y-1). The
sheriff was requested not to continue with the levy on the harvest
in the parcel of land they were claiming.
On 2 February 1955 Isidoro M. Mercado filed in the Court of First
Instance of Nueva Ecija a complaint docketed as civil case No.
1718, against Leon C. Viardo and the Provincial Sheriff. The
complaint alleged that improper levy had been made on the
harvest in plaintiff's parcel of land and prayed that judgment be
rendered ordering the defendants to return the palay levied upon,
together with damages. On 26 February 1955 the defendants
answered that plaintiffs' purchase of the parcel of land in question
from Pilar Belmonte was subject to whatever judgment the courts
might render in civil case No. 161 between Pilar Belmonte and
Leon C. Viardo. On 17 October 1955 the Court of First Instance
of Nueva Ecija entered an order suspending the trial of the case,
in view of the information by counsel for the defendant that his
client Leon C. Viardo would file a complaint against all persons
claiming ownership of or interest in the parcel of land covered by
original certificate of title No. 3484 (Record on Appeal, pp. 2-11).
On 5 December 1955 civil case No. 2004 was filed by Leon V.
Viardo against Pilar Belmonte, Patricia Driz, Joaquina Driz,
Isidoro Mercado, Trinidad Isidro, Zacarias Belmonte, Teresita
Flores, Philippine American General Insurance Co., Inc. and the
Philippine National Bank, as parties claiming some right,
participation, share or interest in the parcel of land covered by
original certificate of title No. 3484 or by trader certificates of title
derived therefrom. The defendants filed their answers. After
trial,1 on 24 August 1956 the trial court rendered judgment in civil
cases Nos. 1718 and 2004, the dispositive part of which reads as
follows:
IN VIEW OF THE FOREGOING CONSIDERATIONS, in
Civil Case 2004, Leon C. Viardo, Isidoro M. Mercado,
Zacarias Belmonte and Patricia Driz are hereby declared
CO-OWNERS PRO-INDIVISO of lots 1-A PSD-16864,
which is the ¼ share of Pilar Belmonte in Lot 1, PSU
14371, OCT No. 3484 in the following proportions: ONE-
 HALF for LEON C. VIARDO; 7½ hectares for Isidoro M.
Mercado; 7 hectares for Zacarias Belmonte, and the
remainder for Patricia Driz, it being understood that
whatever is adjudicated to Patricia Driz in the partition
shall be subject to the mortgage in favor of the Philippine
National Bank; the deeds of sale executed by Pilar
Belmonte in favor of Patricia Driz, Exhibits R and S are
declared NULL AND VOID; the deeds of partition Exhibits
L and N, are set aside, and the certificates of title issued
in favor of Zacarias Belmonte, Isidoro M. Mercado and
Patricia Driz, Exhibits P, Q, R-1 and S-1 are ordered
cancelled. And in civil case 1718 Isidoro M. Mercado is
hereby declared to be entitled to the products which had
been levied upon by the Provincial Sheriff. No damages
are awarded. The parties in civil case 2004 shall come to
an amicable settlement with respect to the partition. Upon
their failure to arrive at an amicable settlement,
commissioner shall be appointed by this Court in
accordance with a law to make the partition.
With costs against the defendants in both cases.
Only Leon C. Viardo, plaintiff in civil case No. 2004 and defendant
in civil case No. 1718, appealed to the Court of Appeals. On 21
May 1958 the latter certified and forwarded the appeals to this
Court because the facts are not in dispute and "the questions
raised by appellant in his brief are purely legal in nature."
In his first assignment of error the appellant contends that the trial
court "erred in not annulling the sale executed by Pilar Belmonte
to Isidoro M. Mercado, marked as Exhibit I, and to Dominador
Asuncion and Teresita Bansil (Exhibit J) and the sale by
Dominador Asuncion to Zacarias Belmonte and Teresita Flores in
a Deed of Sale marked Exhibit M." In support thereof he argues
that the three sales took place and were registered after he had
become the absolute owner of an undivided one-half interest in
the parcel of land owned by Pilar Belmonte and after notice of lis
pendens had been recorded on the title of Pilar Belmonte.
The argument is without merit. It is true that the appellant became
the absolute owner of an undivided one-half interest in the
undivided one-fourth interest owned by Pilar Belmonte in the
parcel of land described in original certificate of title No. 3484;
that before Pilar Belmonte sold parts of her undivided share in the
parcel of land to Isidoro M. Mercado and Dominador Asuncion
and the last in turn sold his part to Zacarias Belmonte, there was
notice of lis pendens recorded on the certificate of title; and that
this notice is binding upon all who should acquire an interest in
the property subsequent to the record of the lis pendens. The
notice of lis pendens (Exhibit A), however, was limited to one-half
interest acquired by Leon C. Viardo from Pilar Belmonte. The
other one-half undivided interest of the latter was not in litigation
and therefore the trial court correctly held that Pilar Belmonte, as
the owner of this undivided one-half interest, had a right to sell it
and could convey absolute title thereto or to parts thereof. Of
course, the deeds of sale executed by Pilar Belmonte appears to
convey definite or segregated parts of her remaining interest in
the parcel of land described in original certificate of title No. 3484,
which she could not do, because this one-fourth in interest had
not yet been subdivided to show the interest acquired by Leon C.
Viardo, amounting to one-half of the said one-fourth interest. This
defect, however, does not result in the nullity of the deeds of sale
she had executed relating to her remaining interest of one-eighth.
The sales were valid, subject only to the condition that the
interests acquired by the vendees were limited to the parts which
might be assigned to them in the division upon the termination of
the co-ownership (Article 493, Civil Code).
In the second assignment of error the appellant contends that the
trial court "erred in not annulling the sales executed by Pilar
Belmonte in favor of her daughters Joaquina and Patricia Driz of
lots 1-B and 1-A, Exhibits U and V of Plan PSD 36340."
Lots 1-B and 1-A of Plan PSD-36340 are taken, not from the
original one-fourth interest of Pilar Belmonte in the parcel of land
covered by original certificate of title No. 3484, which interest was
levied upon and thereafter acquired by Leon C. Viardo to the
extent of one-half, but from another one-fourth interest in the
same parcel of land, which belonged originally to Ines de
Guzman, the mother of Pilar Belmonte. This one-fourth interest
subsequently devolved upon Pilar Belmonte and her two sisters.
The three sisters partitioned this one-fourth interest among
themselves and lots 1-A and 1-B were assigned to Pilar Belmonte
who, in turn, sold them to her daughters. These sales, the
appellant contends, are fictitious and in fraud of his rights as
creditor.
The only evidence adduced by the appellant in support of this
contention is that the sales were made by the mother to her
daughters. This is not enough evidence to hold the sale fictitious
and fraudulent. There is no evidence whatsoever that Pilar
Belmonte, at the time she sold the lots, had outstanding debts or
was in an otherwise embarrasing financial position. Even the
credit of Leon C. Viardo, the appellant, was established only after
the sales were executed, when the Court of Appeals modified the
judgment of the trial court in civil case No. 161 by awarding
damages to him. There is no merit, therefore, in the second
assignment of error.
In the third assignment of error the appellant contends that the
trial court "erred in declaring that the "product raised in the portion
under the occupancy of Isidoro Mercado, therefore, pertains to
him and was not subject to the levy or execution in favor of Leon
C. Viardo in Civil Case No. 161." In support of this assignment the
appellant again harps on the fact that the time Isidoro Mercado
acquired an interest in the property, there was notice of lis
pendens, and therefore Isidoro Mercado "is not a purchaser in
good faith."
This contention has been overruled in the first assignment of error
when the notice of lis pendens (Exhibits A and F) was held to
refer not to the remaining one-eighth interest of Pilar Belmonte in
the parcel of land described in original certificate of title No. 3484,
but to the one-eighth interest which Leon C. Viardo had acquired
from Pilar Belmonte, and which the latter was trying to recover
from him in civil case No. 161. It was Pilar Belmonte who caused
the notice of lis pendens to be recorded to subject "all the rights,
interests and participation of Leon C. Viardo in this Title" to the
result of the litigation in the aforesaid civil case No. 161. Pilar
Belmonte did not thereby subject her remaining one-eighth
interest to the result of civil case No. 161 which she had filed
against Leon C. Viardo. If the latter wanted to subject the
remaining one-eighth interest of Pilar Belmonte to the outcome of
his counterclaim in civil case No. 161, he should have asked for
it.
The view held by this Court in passing upon the third assignment
of error renders it unnecessary for the Court to discuss the
respective rights and liabilities of co-owners when one co-owner,
without the knowledge and/or consent of the other co-owners,
plants or builds on the property owned in common.
The appellant further contends that the trial court erred "in
concluding that the heirs of Bartolome Driz could not be held
personally liable for the judgment rendered against the plaintiffs in
Civil Case No. 161 and therefore Lots 1-A and 1-B cannot be
subject to the payment of the judgment in favor of Leon C.
Viardo."
The only ground of appellant for this contention is that the present
owners of these lots are the children of the spouses Pilar
Belmonte and Bartolome Driz, the plaintiffs in civil case No. 161,
and that, upon the death of Bartolome Driz during the pendency
of the appeal in civil case No. 161, these children were
substituted as parties. This assignment of error is without merit.
The substitution of parties was made obviously because the
children of Bartolome Driz are his legal heirs and therefore could
properly represent and protect whatever interest he had in the
case on appeal. But such a substitution did not and cannot have
the effect of making these substituted parties personally liable for
whatever judgment might be rendered on the appeal against their
deceased father. Article 774 of the Civil Code provides:
 Succession is a mode of acquisition by virtue of which the
property, rights and obligations to the extent of the value
of the inheritance, of a person are transmitted through his
death to another or others either by his will or by
operation of law. (Emphasis supplied.)
The trial court, therefore, correctly ruled that the remedy of Leon
C. Viardo, the creditor, was to proceed against the estate of
Bartolome Driz.
Moreover, it appears from the evidence that Bartolome Driz was
only a formal party to civil case No. 161, the real party in interest
being his wife Pilar Belmonte. The subject matter in litigation was
Pilar Belmonte's interest in the parcel of land described in original
certificate of title No. 3484, which appears to be paraphernal
property.
The appellant's fifth and last assignment of error is that "the trial
court erred in not awarding damages to the plaintiff Leon C.
Viardo in Civil Case No. 2004." Obviously the appellant refers to
the prayer in his complaint that P5,000 be awarded to him against
Pilar Belmonte for attorney's fees. He maintains that appellee
Pilar Belmonte had disposed of all her property with the intent of
avoiding payment of her liability or debt to him.
A review of the record lends credence to the appellant's claim.
Appellee Pilar Belmonte had one-fourth interest in a parcel of
land containing an area of 119.2775 hectares. On 12 May 1943
Leon C. Viardo acquired one-half interest of Pilar Belmonte's one-
fourth interest. In a partition, where the appellant did not
participate but which he does not impugn, Pilar Belmonte's
original one-fourth interest was segregated and delimited. She
was assigned in that partition and subdivision, Lot 1-A of Plan
PSD-16864, containing an area of 30 hectares (Exhibit K). Upon
the death of her mother, she acquired another 13.2775 hectares.
These 13.2775 hectares she sold to her two daughters and the
validity of the sales has been upheld by this Court. With the
original 30 hectares, however, Pilar Belmonte did not act in good
faith when she sold more than 15 hectares to her daughter
Patricia Driz. Knowing that one-half of said 30 hectares or a total
of 15 hectares belonged to the appellant Leon C. Viardo, she
nevertheless proceeded to enter into the following transactions:
(1) sale of seven and one-half hectares to Isidoro Mercado, dated
28 June 1948, Exhibit A; (2) sale of seven hectares to Dominador
Asuncion, who later sold the same parcel or interest to Zacarias
Belmonte, dated 9 March 1949, Exhibit A; (3) subdivision and
partition of her lot 1-A, PSD-16864, into lots 1-E, 1-F, 1-G, 1-H
and 1-I, without the knowledge of her co-owner Leon C. Viardo,
Plan PSD-36340, Exhibit O; (4) sale in favor of her daughter
Patricia Driz of lots 1-H and 1-I, Plan PSD-36340, containing an
area of 20,000 and 55,152 sq. meters, respectively, dated 9
September 1954, Exhibits R and A; and (5) sale in favor of her
daughter Patricia Driz of lot 1-E; Plan PSD-36340, containing an
area of 79,848 sq. meters, dated 11 September 1954, Exhibits S
and A.
It will thus be seen that on 9 March 1949, after Pilar Belmonte
had sold seven hectares to Dominador Asuncion, she had only
one-half hectare left to dispose of, since out of her original thirty
hectares (Lot 1-A, PSD-16864) the appellant Leon C. Viardo had
acquired one-half or fifteen hectares, Isidoro Mercado, seven and
one-half hectares, and Dominador Asuncion, seven hectares.
Fully aware that one-half hectare remained her only property,
Pilar Belmonte nevertheless proceeded to sell to her daughter
Patricia Driz three lots containing a combined area of more than
fifteen hectares. It is obvious, therefore, that the sales to Patricia
Driz cannot be sustained, regardless of whether Pilar Belmonte
was aware or suspected that she would be held liable for
damages to Leon C. Viardo in civil case No. 161, as in fact she
was held liable by the Court of Appeals about two weeks after
she had executed the sales in favor of her daughter. The sales
above referred to stand on a different footing from the sales made
in favor of Isidoro Mercado and Dominador Asuncion, because in
the latter sales Pilar Belmonte still had something to sell, namely,
her remaining fifteen hectares. But after she had disposed of
fourteen and one-half hectares to Mercado and Asuncion she had appealed from is affirmed, with costs against appellees Pilar
only one-half hectare left and therefore could not sell another Belmonte and Patricia Driz.
fifteen hectares.
Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Reyes,
The trial court, however, did not completely annul the sales made J.B.L., Barrera, Paredes, Dizon, Regala and Makalintal, JJ.,
by Pilar Belmonte in favor of her daughter. It merely reduced the concur.
sale of fifteen hectares to a sale of one-half hectare, obviously in
the belief that the sales should be sustained to the extent of Pilar
Belmonte's remaining interest. The record shows that both Pilar
Belmonte and her daughter Patricia Driz knew that one-half
hectare only remained as the former's property, but they
nevertheless proceeded to sell and purchase more than fifteen
hectares. When it is considered further that the final judgment in
civil case No. 161 awarded damages to Leon C. Viardo
amounting to 225 cavans of palay from 1946 (Exhibit H) and that
when this judgment was executed in 1954 no property of Pilar
Belmonte could be found to satisfy the damages (p. 11, t.s.n.), it
is evident that Pilar Belmonte and her daughter Patricia Driz had
conspired to dispose of all the property of Pilar Belmonte in order
to frustrate any award of damages the Court of Appeals might
make in favor of Leon C. Viardo and that this conspiracy must
have taken place at the latest on 9 September 1954 when Pilar
Belmonte proceeded to sell to her daughter Patricia Driz parcels
of land which no longer belonged to her.

The judgment appealed from is modified by holding and declaring

that (1) Leon C. Viardo, Isidoro M. Mercado, Zacarias Belmonte
and Pilar Belmonte (not Patricia Driz) are the co-owners pro-
indiviso of lot 1-A, Plan PSD-16864, which is the one-fourth share
of Pilar Belmonte in lot 1, PSD-14371, original certificate of title
No. 3484, in the following proportion: one-half or fifteen hectares
owned by Leon C. Viardo, seven and one-half hectares by Isidoro
M. Mercado, seven hectares by Zacarias Belmonte, and one-half
hectares by Pilar Belmonte, subject to the rights of Leon C.
Viardo to the balance of his judgment credit against Pilar
Belmonte; and (2) Leon C. Viardo is awarded damages of P1,000
against Pilar Belmonte. In all other respects, the judgment
G.R. No. L-33187 March 31, 1980
CORNELIO PAMPLONA alias GEMINIANO PAMPLONA and
APOLONIA ONTE, petitioners,
vs.
VIVENCIO MORETO, VICTOR MORETO, ELIGIO MORETO,
MARCELO MORETO, PAULINA MORETO, ROSARIO
MORETO, MARTA MORETO, SEVERINA MENDOZA, PABLO
MENDOZA, LAZARO MENDOZA, VICTORIA TUIZA,
JOSEFINA MORETO, LEANDRO MORETO and LORENZO
MENDOZA, respondents.
E.P. Caguioa for petitioners.
Benjamin C. Yatco for respondents.
GUERRERO, J.:
This is a petition for certiorari by way of appeal from the decision
of the Court of Appeals 1 in CA-G.R. No. 35962-R, entitled
"Vivencio Moreto, et al., Plaintiff-Appellees vs. Cornelio
Pamplona, et al., Defendants-Appellants," affirming the decision
of the Court of First Instance of Laguna, Branch I at Biñan.
The facts, as stated in the decision appealed from, show that:
Flaviano Moreto and Monica Maniega were husband and wife.
During their marriage, they acquired adjacent lots Nos. 1495,
4545, and 1496 of the Calamba Friar Land Estate, situated in
Calamba, Laguna, containing 781-544 and 1,021 square meters
respectively and covered by certificates of title issued in the name
of "Flaviano Moreto, married to Monica Maniega."
The spouses Flaviano Moreto and Monica Maniega begot during
their marriage six (6) children, namely, Ursulo, Marta, La Paz,
Alipio, Pablo, and Leandro, all surnamed Moreto.
Ursulo Moreto died intestate on May 24, 1959 leaving as his heirs
herein plaintiffs Vivencio, Marcelo, Rosario, Victor, Paulina, Marta
and Eligio, all surnamed Moreto.
Marta Moreto died also intestate on April 30, 1938 leaving as her
heir plaintiff Victoria Tuiza.
La Paz Moreto died intestate on July 17, 1954 leaving the
following heirs, namely, herein plaintiffs Pablo, Severina, Lazaro,
and Lorenzo, all surnamed Mendoza.
Alipio Moreto died intestate on June 30, 1943 leaving as his heir
herein plaintiff Josefina Moreto.
Pablo Moreto died intestate on April 25, 1942 leaving no issue
and as his heirs his brother plaintiff Leandro Moreto and the other
plaintiffs herein.
On May 6, 1946, Monica Maniega died intestate in Calamba,
Laguna.
On July 30, 1952, or more than six (6) years after the death of his
wife Monica Maniega, Flaviano Moreto, without the consent of the
heirs of his said deceased wife Monica, and before any liquidation
of the conjugal partnership of Monica and Flaviano could be
effected, executed in favor of Geminiano Pamplona, married to
defendant Apolonia Onte, the deed of absolute sale (Exh. "1")
covering lot No. 1495 for P900.00. The deed of sale (Exh. "1")
contained a description of lot No. 1495 as having an area of 781
square meters and covered by transfer certificate of title No.
14570 issued in the name of Flaviano Moreto, married to Monica
Maniega, although the lot was acquired during their marriage. As
a result of the sale, the said certificate of title was cancelled and a
new transfer certificate of title No. T-5671 was issued in the name
of Geminiano Pamplona married to Apolonia Onte (Exh. "A").
After the execution of the above-mentioned deed of sale (Exh.
"1"), the spouses Geminiano Pamplona and Apolonia Onte
constructed their house on the eastern part of lot 1496 as
Flaviano Moreto, at the time of the sale, pointed to it as the land
which he sold to Geminiano Pamplona. Shortly thereafter, Rafael
Pamplona, son of the spouses Geminiano Pamplona and
Apolonia Onte, also built his house within lot 1496 about one
meter from its boundary with the adjoining lot. The vendor
Flaviano Moreto and the vendee Geminiano Pamplona thought all
the time that the portion of 781 square meters which was the
subject matter of their sale transaction was No. 1495 and so lot
No. 1495 appears to be the subject matter in the deed of sale
(Exh. "1") although the fact is that the said portion sold thought of
by the parties to be lot No. 1495 is a part of lot No. 1496.
From 1956 to 1960, the spouses Geminiano Pamplona and
Apolonio Onte enlarged their house and they even constructed a
piggery corral at the back of their said house about one and one-
half meters from the eastern boundary of lot 1496.
On August 12, 1956, Flaviano Moreto died intestate. In 1961, the
plaintiffs demanded on the defendants to vacate the premises
where they had their house and piggery on the ground that
Flaviano Moreto had no right to sell the lot which he sold to
Geminiano Pamplona as the same belongs to the conjugal
partnership of Flaviano and his deceased wife and the latter was
already dead when the sale was executed without the consent of
the plaintiffs who are the heirs of Monica. The spouses
Geminiano Pamplona and Apolonia Onte refused to vacate the
premises occupied by them and hence, this suit was instituted by
the heirs of Monica Maniega seeking for the declaration of the
nullity of the deed of sale of July 30, 1952 above-mentioned as
regards one-half of the property subject matter of said deed; to
declare the plaintiffs as the rightful owners of the other half of said
lot; to allow the plaintiffs to redeem the one-half portion thereof
sold to the defendants. "After payment of the other half of the
purchase price"; to order the defendants to vacate the portions
occupied by them; to order the defendants to pay actual and
moral damages and attorney's fees to the plaintiffs; to order the
defendants to pay plaintiffs P120.00 a year from August 1958
until they have vacated the premises occupied by them for the
use and occupancy of the same.
The defendants claim that the sale made by Flaviano Moreto in
their favor is valid as the lot sold is registered in the name of
Flaviano Moreto and they are purchasers believing in good faith
that the vendor was the sole owner of the lot sold.
After a relocation of lots 1495, 1496 and 4545 made by
agreement of the parties, it was found out that there was mutual
error between Flaviano Moreto and the defendants in the
execution of the deed of sale because while the said deed recited
that the lot sold is lot No. 1495, the real intention of the parties is
that it was a portion consisting of 781 square meters of lot No.
1496 which was the subject matter of their sale transaction.
After trial, the lower court rendered judgment, the dispositive part
thereof being as follows:
WHEREFORE, judgment is hereby rendered for
the plaintiffs declaring the deed of absolute sale
dated July 30, 1952 pertaining to the eastern
portion of Lot 1496 covering an area of 781
square meters null and void as regards the 390.5
square meters of which plaintiffs are hereby
declared the rightful owners and entitled to its
possession.
The sale is ordered valid with respect to the
eastern one-half (1/2) of 1781 square meters of
Lot 1496 measuring 390.5 square meters of which
 defendants are declared lawful owners and
entitled to its possession.
After proper survey segregating the eastern one-
half portion with an area of 390.5 square meters
of Lot 1496, the defendants shall be entitled to a
certificate of title covering said portion and
Transfer Certificate of Title No. 9843 of the office
of the Register of Deeds of Laguna shall be
cancelled accordingly and new titles issued to the
plaintiffs and to the defendants covering their
respective portions.
Transfer Certificate of Title No. 5671 of the office
of the Register of Deeds of Laguna covering Lot
No. 1495 and registered in the name of Cornelio
Pamplona, married to Apolonia Onte, is by virtue
of this decision ordered cancelled. The
defendants are ordered to surrender to the office
of the Register of Deeds of Laguna the owner's
duplicate of Transfer Certificate of Title No. 5671
within thirty (30) days after this decision shall have
become final for cancellation in accordance with
this decision.
Let copy of this decision be furnished the Register
of Deeds for the province of Laguna for his
information and guidance.
With costs against the defendants. 2
The defendants-appellants, not being satisfied with said
judgment, appealed to the Court of Appeals, which affirmed the
judgment, hence they now come to this Court.
The fundamental and crucial issue in the case at bar is whether
under the facts and circumstances duly established by the
evidence, petitioners are entitled to the full ownership of the
property in litigation, or only one-half of the same.
There is no question that when the petitioners purchased the
property on July 30, 1952 from Flaviano Moreto for the price of
P900.00, his wife Monica Maniega had already been dead six
years before, Monica having died on May 6, 1946. Hence, the
conjugal partnership of the spouses Flaviano Moreto and Monica
Maniega had already been dissolved. (Article 175, (1) New Civil
Code; Article 1417, Old Civil Code). The records show that the
conjugal estate had not been inventoried, liquidated, settled and
divided by the heirs thereto in accordance with law. The
necessary proceedings for the liquidation of the conjugal
partnership were not instituted by the heirs either in the testate or
intestate proceedings of the deceased spouse pursuant to Act
3176 amending Section 685 of Act 190. Neither was there an
extra-judicial partition between the surviving spouse and the heirs
of the deceased spouse nor was an ordinary action for partition
brought for the purpose. Accordingly, the estate became the
property of a community between the surviving husband, Flaviano
Moreto, and his children with the deceased Monica Maniega in
the concept of a co-ownership.
The community property of the marriage, at the
dissolution of this bond by the death of one of the
spouses, ceases to belong to the legal partnership
and becomes the property of a community, by
operation of law, between the surviving spouse
and the heirs of the deceased spouse, or the
exclusive property of the widower or the widow, it
he or she be the heir of the deceased spouse.
Every co-owner shall have full ownership of his
part and in the fruits and benefits derived
therefrom, and he therefore may alienate, assign
or mortgage it, and even substitute another
person in its enjoyment, unless personal rights are
in question. (Marigsa vs. Macabuntoc, 17 Phil.
107)
In Borja vs. Addision, 44 Phil. 895, 906, the Supreme Court said
that "(t)here is no reason in law why the heirs of the deceased
wife may not form a partnership with the surviving husband for
the management and control of the community property of the
marriage and conceivably such a partnership, or rather
community of property, between the heirs and the surviving
husband might be formed without a written agreement." In Prades
vs. Tecson, 49 Phil. 230, the Supreme Court held that
"(a)lthough, when the wife dies, the surviving husband, as
administrator of the community property, has authority to sell the
property with ut the concurrence of the children of the marriage,
nevertheless this power can be waived in favor of the children,
with the result of bringing about a conventional ownership in
common between the father and children as to such property; and
any one purchasing with knowledge of the changed status of the
property will acquire only the undivided interest of those members
of the family who join in the act of conveyance.
It is also not disputed that immediately after the execution of the
sale in 1952, the vendees constructed their house on the eastern
part of Lot 1496 which the vendor pointed out to them as the area
sold, and two weeks thereafter, Rafael who is a son of the
vendees, also built his house within Lot 1496. Subsequently, a
cemented piggery coral was constructed by the vendees at the
back of their house about one and one-half meters from the
eastern boundary of Lot 1496. Both vendor and vendees believed
all the time that the area of 781 sq. meters subject of the sale was
Lot No. 1495 which according to its title (T.C.T. No. 14570)
contains an area of 781 sq. meters so that the deed of sale
between the parties Identified and described the land sold as Lot
1495. But actually, as verified later by a surveyor upon agreement
of the parties during the proceedings of the case below, the area
sold was within Lot 1496.
Again, there is no dispute that the houses of the spouses
Cornelio Pamplona and Apolonia Onte as well as that of their son
Rafael Pamplona, including the concrete piggery coral adjacent
thereto, stood on the land from 1952 up to the filing of the
complaint by the private respondents on July 25, 1961, or a
period of over nine (9) years. And during said period, the private
respondents who are the heirs of Monica Maniega as well as of
Flaviano Moreto who also died intestate on August 12, 1956,
lived as neighbors to the petitioner-vendees, yet lifted no finger to
question the occupation, possession and ownership of the land
purchased by the Pamplonas, so that We are persuaded and
convinced to rule that private respondents are in estoppel by
laches to claim half of the property, in dispute as null and void.
Estoppel by laches is a rule of equity which bars a claimant from
presenting his claim when, by reason of abandonment and
negligence, he allowed a long time to elapse without presenting
the same. (International Banking Corporation vs. Yared, 59 Phil.
92)
We have ruled that at the time of the sale in 1952, the conjugal
partnership was already dissolved six years before and therefore,
the estate became a co-ownership between Flaviano Moreto, the
surviving husband, and the heirs of his deceased wife, Monica
Maniega. Article 493 of the New Civil Code is applicable and it
provides a follows:
Art. 493. Each co-owner shall have the full
ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even substitute another
person in its enjoyment, except when personal
rights are involve. But the effect of the alienation
or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be
allotted to him in the division upon the termination
of the co-ownership.
We agree with the petitioner that there was a partial partition of
the co-ownership when at the time of the sale Flaviano Moreto
pointed out the area and location of the 781 sq. meters sold by
him to the petitioners-vendees on which the latter built their house
and also that whereon Rafael, the son of petitioners likewise
erected his house and an adjacent coral for piggery.
Petitioners point to the fact that spouses Flaviano Moreto and
Monica Maniega owned three parcels of land denominated as Lot
1495 having an area of 781 sq. meters, Lot 1496 with an area of
1,021 sq. meters, and Lot 4545 with an area of 544 sq. meters.
The three lots have a total area of 2,346 sq. meters. These three
parcels of lots are contiguous with one another as each is
bounded on one side by the other, thus: Lot 4545 is bounded on
the northeast by Lot 1495 and on the southeast by Lot 1496. Lot
1495 is bounded on the west by Lot 4545. Lot 1496 is bounded
on the west by Lot 4545. It is therefore, clear that the three lots
constitute one big land. They are not separate properties located
in different places but they abut each other. This is not disputed
by private respondents. Hence, at the time of the sale, the co-
ownership constituted or covered these three lots adjacent to
each other. And since Flaviano Moreto was entitled to one-half
pro-indiviso of the entire land area or 1,173 sq. meters as his
share, he had a perfect legal and lawful right to dispose of 781
sq. meters of his share to the Pamplona spouses. Indeed, there
was still a remainder of some 392 sq. meters belonging to him at
the time of the sale.
We reject respondent Court's ruling that the sale was valid as to
one-half and invalid as to the other half for the very simple reason
that Flaviano Moreto, the vendor, had the legal right to more than
781 sq. meters of the communal estate, a title which he could
dispose, alienate in favor of the vendees-petitioners. The title may
be pro-indiviso or inchoate but the moment the co-owner as
vendor pointed out its location and even indicated the boundaries
over which the fences were to be erectd without objection, protest
or complaint by the other co-owners, on the contrary they
acquiesced and tolerated such alienation, occupation and
possession, We rule that a factual partition or termination of the
co-ownership, although partial, was created, and barred not only
the vendor, Flaviano Moreto, but also his heirs, the private
respondents herein from asserting as against the vendees-
petitioners any right or title in derogation of the deed of sale
executed by said vendor Flaiano Moreto.
Equity commands that the private respondents, the successors of
both the deceased spouses, Flaviano Moreto and Monica
Maniega be not allowed to impugn the sale executed by Flaviano
Moreto who indisputably received the consideration of P900.00
and which he, including his children, benefitted from the same.
Moreover, as the heirs of both Monica Maniega and Flaviano
Moreto, private respondents are duty-bound to comply with the
provisions of Articles 1458 and 1495, Civil Code, which is the
obligation of the vendor of the property of delivering and
transfering the ownership of the whole property sold, which is
transmitted on his death to his heirs, the herein private
respondents. The articles cited provide, thus:
Art. 1458. By the contract of sale one of the
contracting parties obligates himself to transfer
the ownership of and to deliver a determinate
thing, and the other part to pay therefore a price
certain in money or its equivalent.
A contract of sale may be absolute or
conditionial.
Art. 1495. The vendor is bound to transfer the
ownership of and deliver, as well as warrant the
thing which is the object of the sale.
Under Article 776, New Civil Code, the inheritance which private
respondents received from their deceased parents and/or
predecessors-in-interest included all the property rights and
obligations which were not extinguished by their parents' death.
And under Art. 1311, paragraph 1, New Civil Code, the contract
of sale executed by the deceased Flaviano Moreto took effect
between the parties, their assigns and heirs, who are the private
respondents herein. Accordingly, to the private respondents is
transmitted the obligation to deliver in full ownership the whole
area of 781 sq. meters to the petitioners (which was the original
obligation of their predecessor Flaviano Moreto) and not only
one-half thereof. Private respondents must comply with said
obligation.

The records reveal that the area of 781 sq. meters sold to and
occupied by petitioners for more than 9 years already as of the
filing of the complaint in 1961 had been re-surveyed by private
land surveyor Daniel Aranas. Petitioners are entitled to a
segregation of the area from Transfer Certificate of Title No. T-
9843 covering Lot 1496 and they are also entitled to the issuance
of a new Transfer Certificate of Title in their name based on the
relocation survey.

WHEREFORE, IN VIEW OF THE FOREGOING, the judgment

appealed from is hereby AFFIRMED with modification in the
sense that the sale made and executed by Flaviano Moreto in
favor of the petitioners-vendees is hereby declared legal and valid
in its entirely.

Petitioners are hereby declared owners in full ownership of the

781 sq. meters at the eastern portion of Lot 1496 now occupied
by said petitioners and whereon their houses and piggery coral
stand.

The Register of Deeds of Laguna is hereby ordered to segregate

the area of 781 sq. meters from Certificate of Title No. 9843 and
to issue a new Transfer Certificate of Title to the petitioners
covering the segregated area of 781 sq. meters.

No costs.

SO ORDERED.
G.R. No. L-44837 November 23, 1938
SOCORRO LEDESMA and ANA QUITCO LEDESMA, plaintiffs-
appellees,
vs.
CONCHITA MCLACHLIN, ET AL., defendants-appellants.
Adriano T. de la Cruz for appellants.
Simeon Bitanga for appellees.
VILLA-REAL, J.:
This case is before us by virtue of an appeal taken by the
defendants Conchita McLachlin, Lorenzo Quitco, Jr., Sabina
Quitco, Rafael Quitco and Marcela Quitco, from the decision of
the Court of First Instance of Occidental Negros, the dispositive
part of which reads:
For the foregoing considerations, the court renders
judgment in this case declaring Ana Quitco Ledesma an
acknowledged natural daughter of the deceased Lorenzo
M. Quitco, for legal purposes, but absolving the
defendants as to the prayer in the first cause of action that
the said Ana Quitco Ledesma be declared entitled to
share in the properties left by the deceased Eusebio
Quitco.
As to the second cause of action, the said defendants are
ordered to pay to the plaintiff Socorro Ledesma, jointly
and severally, only the sum of one thousand five hundred
pesos(P1,500), with legal interest thereon from the filing
of this complaint until fully paid. No pronouncement is
made as to the costs. So ordered.
In support of their appeal, the appellants assign the following
errors allegedly committed by the trial court in its aforesaid
decision:
1. That the trial court erred in holding, that the action for
the recovery of the sum of P1,500, representing the last
installment of the note Exhibit C has not yet prescribed.
2. That the trial court erred in holding that the property
inherited by the defendants from their deceased
grandfather by the right of representation is subject to the
debts and obligations of their deceased father who died
without any property whatsoever. lawphi1.net
3. That the trial court erred in condemning the defendants
to pay jointly and severally the plaintiff Socorro Ledesma
the sum of P1,500.
The only facts to be considered in the determination of the legal
questions raised in this appeal are those set out in the appealed
decision, which have been established at the trial, namely:
In the year 1916, the plaintiff Socorro Ledesma lived
maritally with Lorenzo M. Quitco, while the latter was still
single, of which relation, lasting until the year 1921, was
born a daughter who is the other plaintiff Ana Quitco
Ledesma. In 1921, it seems hat the relation between
Socorro Ledesma and Lorenzo M. Quitco came to an end,
but the latter executed a deed (Exhibit A), acknowledging
the plaintiff Ana Quitco Ledesma as his natural daughter
and on January 21, 1922, he issued in favor of the plaintiff
Socorro Ledesma a promissory note (Exhibit C), of the
following tenor:
P2,000. For value received I promise to pay Miss Socorro
Ledesma the sum of two thousand pesos (P2,000).
Philippine currency under the following terms: Two
hundred and fifty pesos (P250) to be paid on the first day
of March 1922; another two hundred and fifty pesos
(P250)to be paid on the first day of November
1922; the remaining one thousand and five hundred
(P1,500) to be paid two years from the date of the
execution of this note. San Enrique, Occ. Negros, P. I.,
Jan. 21, 1922.
Subsequently, Lorenzo M. Quitco married the defendant
Conchita McLachlin, with whom he had four children, who
are the other defendants. On March 9, 1930, Lorenzo M.
Quitco died (Exhibit 5), and, still later, that is, on
December 15, 1932, his father Eusebio Quitco also died,
and as the latter left real and personal properties upon his
death, administration proceedings of said properties were
instituted in this court, the said case being known as the
"Intestate of the deceased Eusebio Quitco," civil case No.
6153 of this court.
Upon the institution of the intestate of the deceased
Eusebio Quitco and the appointment of the committee on
claims and appraisal, the plaintiff Socorro Ledesma, on
August 26, 1935, filed before said committee the
aforequoted promissory note for payment, and the
commissioners, upon receipt of said promissory note,
instead of passing upon it, elevated the same to this court
en consulta (Exhibit F), and as the Honorable Jose Lopez
Vito, presiding over the First Branch, returned said
consulta and refrained from giving his opinion thereon
(Exhibit C), the aforesaid commissioners on claims and
appraisal, alleging lack of jurisdiction to pass upon the
claim, denied he same (Exhibit H).
On November 14, 1933 (Exhibit I), the court
issued an order of declaration of heirs in the intestate of
the deceased Eusebio Quitco, and as Ana Quitco
Ledesma was not included among the declared heirs,
Socorro Ledesma, as mother of Ana Quitco Ledesma,
asked for the reconsideration of said order, a petition
which the court denied. From the order denying the said
petition no appeal was taken, and in lieu thereof there
was filed the complaint which gives rise to this case.
The first question to be decided in this appeal, raised in the first
assignment of alleged error, is whether or not the action to
recover the sum of P1,500, representing the last installment for
the payment of the promissory note Exhibit C, has prescribed.
According to the promissory note Exhibit C, executed by the
deceased Lorenzo M. Quitco, on January 21, 1922, the last
installment of P1,500 should be paid two years from the date of
the execution of said promissory note, that is, on January 21,
1924. The complaint in the present case was filed on June 26,
1934, that is, more than ten years after he expiration of the said
period. The fact that the plaintiff Socorro Ledesma filed her claim,
on August 26, 1933, with the committee on claims and appraisal
appointed in the intestate of Eusebio Quitco, does not suspend
the running of the prescriptive period of the judicial action for the
recovery of said debt, because the claim for the unpaid balance
of the amount of the promissory note should no have been
presented in the intestate of Eusebio Quitco, the said deceased
not being the one who executed the same, but in the intestate of
Lorenzo M. Quitco, which should have been instituted by the said
Socorro Ledesma as provided in section 642 of the Code of Civil
Procedure, authorizing a creditor to institute said case through
the appointment of an administrator for the purpose of collecting
his credit. More than ten years having thus elapsed from the
expiration of the period for the payment of said debt of P1,500,
the action for its recovery has prescribed under section 43, No. 1,
of the Code of Civil Procedure.
The first assignment of alleged error is, therefore, well-founded.
As to the second assignment of alleged error, consisting in that
the trial court erred in holding that the properties inherited by the
defendants from their deceased grandfather by representation
are subject to the payment of debts and obligations of their Avanceña, C.J., Imperial, Diaz, Laurel and Concepcion, JJ.,
deceased father, who died without leaving any property, while it is concur.
true that under the provisions of articles 924 to 927 of the Civil
Code, a children presents his father or mother who died before
him in the properties of his grandfather or grandmother, this right
of representation does not make the said child answerable for the
obligations contracted by his deceased father or mother,
because, as may be seen from the provisions of the Code of Civil
Procedure referring to partition of inheritances, the inheritance is
received with the benefit of inventory, that is to say, the heirs only
answer with the properties received from their predecessor. The
herein defendants, as heirs of Eusebio Quitco, in representation
of their father Lorenzo M. Quitco, are not bound to pay the
indebtedness of their said father from whom they did not inherit
anything.

The second assignment of alleged error is also well-founded.

Being a mere sequel of the first two assignments of alleged

errors, the third assignment of error is also well-founded.

For the foregoing considerations, we are of the opinion and so

hold: (1) That the filing of a claim before the committee on claims
and appraisal, appointed in the intestate of the father, for a
monetary obligation contracted by a son who died before him,
does not suspend the prescriptive period of the judicial action for
the recovery of said indebtedness; (2) that the claim for the
payment of an indebtedness contracted by a deceased person
cannot be filed for its collection before the committee on claims
and appraisal, appointed in the intestate of his father, and the
propertiesinherited from the latter by the children of said
deceased do not answer for the payment of the indebtedness
contracted during the lifetime of said person.

Wherefore, the appealed judgment is reversed, and the

defendants are absolved from the complaint, with the costs to the
appellees. So ordered.
G.R. No. 113725 June 29, 2000
JOHNNY S. RABADILLA,1 petitioner,
vs.
COURT OF APPEALS AND MARIA
MARLENA2 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
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).
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 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 8438 and
8459 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
decedent10 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
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 CA-G.R. No. CV-35555 AFFIRMED. No pronouncement as to
to deliver One Hundred (100) piculs of sugar yearly to Marlena costs
Belleza Coscuella. Such obligation is imposed on the instituted
heir, Dr. Jorge Rabadilla, his heirs, and their buyer, lessee, or SO ORDERED.
mortgagee should they sell, lease, mortgage or 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
G.R. No. 92436 July 26, 1991
MARIA VDA. DE REYES, EFREN REYES, ELVIRA REYES-
TIMBOL, ERLINDA REYES-VALERIO, ERNESTO REYES,
ELIZABETH REYES, ALEX, RAFAEL II, EMELINA and
EVELYN, all surnamed REYES, represented by their mother,
MARIA VDA. DE REYES, petitioners,
vs.
THE COURT OF APPEALS AND SPOUSES DALMACIO
GARDIOLA and ROSARIO MARTILLANO respondents.
De Lara, De Lunas & Rosales for petitioners.
Santos, Pilapil & Associates for private respondents.
DAVIDE, JR., J.:
Assailed before Us in this appeal by certiorari under Rule 45 of
the Rules of Court is the decision of the respondent Court of
Appeals in C.A.-G.R. CV No. 11934, promulgated on 20 October
1989,1 reversing the decision of 1 October 1986 of Branch 21
(Imus, Cavite) of the Regional Trial Court of the Fourth Judicial
Region in Civil Case No. RTC-BCV-83-17 entitled Maria vda. de
Reyes, et al. vs. Spouses Dalmacio Gardiola and Rosario
Martillano, and Spouses Ricardo M. Gardiola and Emelita
Gardiola,2 and the resolution of 1 March 1990 denying the
petitioner's motion for reconsideration.
As culled from both decisions and the pleadings of the parties,
the following facts have been preponderantly established:
During his lifetime, one Gavino Reyes owned a parcel of land of
approximately 70 hectares, more or less, located at Sangayad,
Ulong-Tubig, Carmona, Cavite. He sought to bring said land
under the operation of the Torrens System of registration of
property. Unfortunately, he died in 1921 without the title having
been issued to him. The application was prosecuted by his son,
Marcelo Reyes, who was the administrator of his property.
In 1936 the above property was surveyed and subdivided by
Gavino's heirs (Exh. "6"). In the subdivision plan, each resultant
lot was earmarked, indicated for and assigned to a specific heir. It
appears therein that two lots, one of which is Lot No. I A-14 (Exh.
"6-A"), were allotted to Rafael Reyes, Sr., one of Gavino's
children. Per testimony of Juan Poblete, the children thereafter
secured tax declarations for their respective shares.
In 1941, or about twenty (20) years after the death of Gavino, the
original certificate of title for the whole property — OCT No. 255
— was issued. It was, however, kept by Juan Poblete, son-in-law
of Marcelo Reyes, who was by then already deceased. The heirs
of Gavino were not aware of this fact.
On 3 December 1943, Rafael Reyes, Sr. sold a parcel of land
with an area of 23,431 square meters, more or less, to private
respondent Dalmacio Gardiola (Exh. "5"). According to the
vendee, this parcel corresponds to Lot No. 1-A-14 of the
subdivision plan aforestated. The deed of sale, however, did not
specifically mention Lot No. 1-A-14. The vendee immediately took
possession of the property and started paying the land taxes
therein.
In 1945 or thereabouts, Juan Poblete "revalidated" the original
Certificate of Title. As reconstituted, the new title is OCT (0-4358)
RO-255 (Exhs. "4" to "4-A").
On 21 October 1967, when the heirs of Gavino Reyes executed a
Deed of Extrajudicial Settlement of Estate (Exh. "D") based on the
aforestated subdivision plan (Exh. "6"), the lot that was intended
for Rafael Reyes, Sr., who was already deceased, was instead
adjudicated to his only son and heir, Rafael Reyes, Jr. (the
predecessor-in-interest of the petitioners herein). Private
respondent Rosario Martillano signed the deed in representation
of her mother, Marta Reyes, one of the children of Gavino Reyes.
As a result of the Extrajudicial Settlement, OCT RO-255 was
cancelled and in lieu thereof, several transfer certificates of title
covering the subdivided lots were issued in the names of the
respective adjudicatees. One of them is TCT No. 27257 in the
name of Rafael Reyes, Jr. covering Lot No. 1-A-14. The Transfer
Certificates of Title were, however, kept by one Candido Hebron.
On 10 January 1969, some of the heirs of Gavino Reyes filed a
case of Annulment of Partition and Recovery of Possession
before the Court of First Instance of Cavite City, which was
docketed therein as Civil Case No. 1267. One of the defendants
in said case is herein private respondent Rosario Martillano. The
case was dismissed on 18 September 1969, but Candido Hebron
was ordered by the trial court to deliver to the heirs concerned all
the transfer certificates of title in his possession.3
After obtaining the Transfer Certificate of Title for Lot No. 1-A-14
from Hebron, pursuant to the aforesaid order in Civil Case No.
1267, petitioners herein, as successors-in-interest of Rafael
Reyes, Jr., filed on 14 March 1983 with the Regional Trial Court
the above-mentioned Civil Case No. RTC-BCV-83-17 against
private respondents (defendants therein) for recovery of
possession or, in the alternative, for indemnification, accounting
and damages. They allege therein that after "having definitely
discovered that they are the lawful owners of the property," (Lot
No. 1-A-14), they, "including Rafael Reyes, Jr., during his lifetime,
made repeated demands to (sic) defendants to surrender the
possession of and vacate the parcel of land belonging to the
former, but defendants refused to vacate and surrender the
possession of the said land to herein plaintiffs;" the last of the
demands was allegedly made on 8 October 1982. They further
allege that they have been deprived by said defendants of the
rightful possession and enjoyment of the property since
September 1969 — which coincides with the date of the order in
Civil Case No. 1267.4
In their answer, private respondents deny the material averments
in the complaint and assert that they are the owners of the lot in
question, having bought the same from Rafael Reyes, Sr., that
the issuance of TCT No. 27257 is null and void, for such sale was
known to Rafael Reyes, Jr.; that they have been in possession of
the property and have been paying the land taxes thereon; and
that petitioners are barred by prescription and/or laches.5
Petitioners amended their complaint on 21 March 1985 to
implead as additional defendants the spouses Ricardo M.
Gardiola and Emerita Gardiola, on the basis of the following
claims:
xxx xxx xxx
9. Meanwhile, during the presentation of the defendants
spouses Dalmacio Gardiola and Rosario Martillano's
evidence the former testified that they mortgaged the
subject land to the Rural Bank of Carmona Inc. For their
failure to redeem the mortgage the same was foreclosed
by the bank.
10. However, within the period of one(1) year from such
foreclosure the questioned land was redeemed by the
original defendants' son in the person of Ricardo M.
Gardiola, who was knowledgeable/aware of the pendency
of the above captioned case. The corresponding
redemption was effected through a deed of conveyance, .
. . .6
The prayer of the amended complaint now contains the
alternative relief for indemnification for the reasonable value of
the property "in the event restitution of the property is no longer
possible."7
In its decision of 1 October 1986,8 the trial court concluded that
petitioners' "title over the subject property is valid and regular and
thus they are entitled to its possession and enjoyment," and
accordingly decided thus:
WHEREFORE, the defendants or anyone acting for and
in their behalf are hereby ordered to relinguish possession
or vacate the property in question which is covered by
Transfer Certificate of Title No. T-27257 in favor of the
plaintiffs.
All other claims and/or counterclaims of the parties
relative to this case are dismissed for lack of proper
substantiation.
The conclusion of the trial court is based on its finding that (a)
there is no evidence that the heirs of Gavino Reyes entered into
any written agreement of partition in 1936 based on the
subdivision plan; (b) there is no identity between Lot No. 1-14-A
and the land sold to private respondents by Rafael Reyes, Sr., or
otherwise stated, the description of the latter as indicated in the
deed of sale (Exh. "5") does not tally with the description of the
former; and (c) moreover:
Granting, arguendo, that the sale made by Rafael Reyes,
Sr. to the defendants covered the land in question — Lot
No. 1-A-14 — and that Transfer Certificate of Title No. T-
27257 was obtained by means of fraud, the claim of the
defendants over the said property is already barred.
Action for reconveyance prescribes in four (4) years from
the discovery thereof. If there was fraud, the defendant
could have discovered the same in 1967 when the
partition was made in as much as defendant Rosario
Martillano was a party to that partition. Let us grant further
that the issuance of Transfer Certificate of Title No. T-
27257 to Rafael Reyes, Jr. created a constructive or
implied trust in favor of the defendants, again, the claim of
the defendants is also barred. From 1967 to the filing of
their answer (let us consider this as an action for
reconveyance) to this case sometime in July, 1983, a
period of about sixteen (16) years had already elapsed.
Prescriptibility of an action for reconveyance based on
implied or constructive trust is ten (10) years.
The trial court further held that the continued possession by
private respondents, which it found to have started in 1943, did
not ripen into ownership because at that time, the property was
already registered, hence it cannot be acquired by prescription or
adverse possession.9
Private respondents appealed the said decision to the Court of
Appeals which docketed the appeal as C.A.-G.R. CV No. 11934.
In its decision of 20 October 1989, the respondent Court of
Appeals formulated the issues before it as follows:
I
Whether or not the lower court erred in declaring that the
property of the late Gavino Reyes consisting of 70
hectares was partitioned only in 1967 by his grandchildren
after discovery of the existence of OCT No. 255 and that
no actual partition was made in 1936 by the decedent's
children.
II
Whether or not the lower court erred in concluding that
the parcel of land sold by the appellees' predecessor-in-
interest, the late Rafael Reyes, Sr. to appellant Dalmacio
Gardiola was not the same parcel of land under litigation.10
and resolved such issues, thus:
On the first issue, We believe that the lower court
committed a reversible error when it declared that the
landed estate of the late Gavino Reyes was partitioned
only in 1967 by the latter's grandchildren; and that no
actual partition was made in 1936 by the decedents' (sic)
children. The evidence on record bears out the existence
of a subdivision plan (Exh. 6) which was not controverted
nor denied by the appellees. In like manner, the lower
court itself recognized the fact that the property of the late
Gavino Reyes consisting of 70 hectares was surveyed
and subdivided in 1936 as evidenced by the said
subdivision plan (Exh. 6). With the existence of a
subdivision plan, and from the uncontroverted testimony
of appellants' witness, We can only infer that at least an
oral partition, which under the law is valid and binding,
was entered into by the heirs of Gavino Reyes regarding
his properties in 1936. As held in a long line of decisions,
extrajudicial partition can be done orally, and the same
would be valid if freely entered into (Belen v. Belen, 49
O.G. 997, March 1953). The reason for this is because a
partition is not exactly a conveyance for the reason that it
does not involve transfer of property from one to the other
but rather a confirmation by them of their ownership of the
property. It must also be remembered that when Gavino
Reyes died on March 7, 1921, his property was admittedly
not yet covered by a torrens title, as it was only in 1941
when said properties were brought into the application of
the torrens system. With this factual milieu, it can also be
concluded that his heirs have indeed settled, subdivided
and partitioned Gavino Reyes' landed estate without
formal requirements of Rule 74 of the Rules of Court
when a parcel of land is covered by a torrens title. As told
earlier, the Subdivision Plan (Exh. 6) undisputedly
showed on its face that the 70 hectares of land belonging
to the late Gavino Reyes was subdivided and partitioned
by his children in 1936. On this score, the partition of the
said property even without the formal requirements under
the rule is valid as held in the case of Hernandez vs.
Andal, 78 Phil. 176, which states:
xxx xxx xxx
Moreover, in the Deed of Sale dated December 3, 1943
(Exh. 5) executed by Rafael Reyes, Sr. in favor of
appellant Dalmacio Gardiola, the land sold therein was
described as "na aking minana sa aking ama." This alone
would confirm the contention of the appellants that there
was already an actual partition (at least an oral partition)
of the property of Gavino Reyes in 1936. As aforestated,
the presence of the Subdivision Plan (Exh. 6) is an (sic)
evidence of such partition which appellees failed to
controvert not to mention the fact that the lower court itself
recognized the existence of said plan, in the same
manner that it concluded that the property was already
surveyed and actually subdivided in 1936 (page 3, pars. 3
and 4, Decision).
From the foregoing considerations it is evident that the
Deed of Extrajudicial Settlement of Estate (Exh. D)
executed by the grandchildren of the late Gavino Reyes in
1967 is of no moment considering that the property
subject of the partition in the deed was already partitioned
in 1936 by the children of Gavino Reyes. It is for this
reason that the lots supposedly inherited by the
grandchildren named in the deed of 1967 were the same
lots inherited and given to their respective fathers or
mothers in 1936 while the land was not yet covered by the
torrens system. Hence, in the case of Rafael Reyes, Sr.,
the land inherited by him was two (2) parcels of land
known as Lots Nos. 1-A-3 and 1-A-14 described in the
Subdivision plan of 1936 (Exh. 6), which were the same
parcels of land allegedly inherited by Rafael Reyes, Jr.
from Gavino Reyes in representation of his father,
pursuant to the Deed of Extrajudicial Settlement of Estate
for which TCT No. 27257 was issued.
Coming to the second issue, the lower court likewise
erred when it concluded that the parcel of land sold by
appellee's predecessor-in-interest to appellant Dalmacio
Gardiola was not the same parcel of land under litigation.
It must be pointed out that the identity of the parcel of land
which the appellees sought to recover from the appellants
was never an issue in the lower court, because the
litigants had already conceded that the parcel identified as
Lot No. 1-A-14 in TCT No. 27257 was the same parcel of
land identified as Cadastral Lot No. 1228 and 1235
described in Tax Declaration No. 4766. Despite this
admission, however, the lower court declared that "as
described in the deed of sale (Exh. 5), the land's
description does not tally with the description of Lot No. 1-
A-14, the land in litigation." As correctly pointed out by the
appellants however, the discrepancy in the description
was due to the fact that the description of the land sold in
the Deed of Sale was expressed in layman's language
whereas the description of Lot No. 1-A-14 in TCT No.
27257 was done in technical terms. This was so because,
when Rafael Reyes, Sr. sold the property in dispute to
appellant Dalmacio Gardiola on December 3, 1943, the
only evidence of title to the land then available in so far as
Rafael Reyes, Sr. was concerned was Tax Declaration
No. 4766, because at that time, neither he nor appellant
Dalmacio Gardiola was aware of the existence of OCT
No. 255 as in fact TCT No. 27257 was issued only in
1967. Consequently, the land subject of the Deed of Sale
was described by the vendor in the manner as described
in Tax Declaration No. 4766. However, the description of
the land appearing in the Deed of Sale (Exh. 5) was
exactly the same land identified as Lot No. 1-A-14 in the
Subdivision Plan (Exh. 6) of 1936. Accordingly, the
assumption of the lower court that "if the land sold by
Rafael Reyes, Sr. was the one now in litigation, he could
have easily indicated Lot No. 1-A-14" is bereft of merit
under the foregoing circumstances. Interestingly enough,
the appellees never denied the identity of the subject lot
during the hearing at the lower court. What they were
denying only was the sale made by Rafael Reyes, Sr. to
appellant Dalmacio Gardiola which does not hold true
because of the document denominated as Deed of Sale
(Exh. 5).11
It concluded that the trial court erred when it ordered the private
respondents or anyone acting in their behalf to relinquish the
possession or vacate the property in question. It thus decreed:
WHEREFORE, the appealed Judgment is ordered
REVERSED and SET ASIDE and a new one is rendered
declaring appellants to be the lawful owners of the lot
identified as Lot No. 1-A-14 in TCT No. 27257. No
costs.12
Their motion to reconsider the above decision having been
denied by the Court of Appeals in its resolution of 1 March
1990,13 petitioners filed the instant petition on 6 April 1990 after
having obtained an extension of time within which to file it.
The petition does not implead original new defendants Ricardo
Gardiola and Emelita Gardiola.
As ground for their plea for the review of the decision of the Court
of Appeals, petitioners allege that said court has decided
questions of substance in a way not in accord with law or
applicable jurisprudence when it held that "the deed of
extrajudicial settlement of estate (Exh. "D") executed by the
grandchildren of the late Gavino Reyes in 1967 is of no moment
considering that the property subject of the partition was already
partitioned in 1936 by the children of Gavino Reyes." In support
thereof, they claim that (a) TCT No. 27257 covers two parcels of
land; the lot described in paragraph 1 thereof is owned by
petitioners and that ownership was confirmed by this Court in
G.R. No. 79882, hence, the Court of Appeals should have
affirmed the decision of the trial court; (b) private respondent
Rosario Martillano was a party to the extrajudicial settlement of
estate which was duly registered in the Registry of Deeds in
1967; said registration is the operative act that gives validity to
the transfer or creates a lien upon the land and also constituted
constructive notice to the whole world. The court cannot disregard
the binding effect thereof Finally, the pronouncement of the Court
of Appeals that private respondents are the lawful owners of the
lot in question "militates against the indefeasible and
incontrovertible character of the torrens title,"14 and allows
reconveyance which is not tenable since the action therefor had
already prescribed, as stated in the decision of the trial court.
In the resolution of 7 May 1990, We required respondents to
comment on the petition. But even before it could do so,
petitioner, without obtaining prior leave of the Court, filed on 29
May 1990 a so-called Supplemental Arguments in Support of The
Petition For Review On certiorari15 wherein they assert, among
others, that: (a) the findings of facts of respondent Court are
contrary to those of the trial court and appear to be contradicted
by the evidence on record thus calling for the review by this
Court;16 (b) it also committed misapprehension of the facts in this
case and its findings are based on speculation, conjecture and
surmises; (c) private respondents' attack on petitioners' title is a
collateral attack which is not allowed; even if it is allowed, the
same had already prescribed and is now barred.
It was only on 15 June 1990 that private respondents filed their
Comment.17 We required petitioners to reply thereto, which they
complied with on 8 August 1990.18 A rejoinder was filed by private
respondents on 29 August 1990.
We gave due course to the petition on 19 September 1990 and
required the parties to submit simultaneously their respective
memoranda which they complied with.
Attached as Annex "A" to private respondent's Memorandum,
which was filed on 10 December 1990, is the Resolution of this
Court (Third Division) of 20 August 1990 in G.R. No. 92811
entitled Spouses Artemio Durumpili and Angustia Reyes vs. The
Court of Appeals and Spouses Dalmacio Gardiola and Rosario
Martillano, which also involves the property of Gavino Reyes, the
partition thereof among his children in 1936, and the extrajudicial
settlement in 1967.
In said resolution, this Court held:
. . . The partition made in 1936, although oral, was valid.
The requirement in Article 1358 of the Civil Code that acts
which have for their object the creation, transmission,
modification or extinguishment of real rights over
immovable property must appear in a public instrument is
only for convenience and not for validity or enforceability
as between the parties themselves. [Thunga Hui vs. Que
Bentec, 2 Phil. 561 (1903)] The subsequent execution by
the heirs of the Extrajudicial Partition in 1967 did not alter
the oral partition as in fact the share pertaining to
Angustia Reyes corresponded to that previously assigned
to her father. Considering that Angel Reyes sold this
property to Basilio de Ocampo who, in turn, sold the same
to respondents, we agree with the Court of Appeals that
the latter lawfully acquired the property and are entitled to
ownership and possession thereof.
In answer to the charge of private respondents that petitioners
deliberately failed to cite this resolution, the latter, in their reply-
memorandum dated 15 March 1991 and filed three days
thereafter, allege:
Our failure to mention the aforementioned resolution
before this Honorable Court is not deliberate nor with
malice aforethought. The reason is that to date, we have
not yet received any resolution to our Motion For Leave of
Court To Refer Case To The Honorable Supreme
Court En Banc. Moreover, we honestly feel that the
resolution that will be issued therein will not be applicable
to the case before this Honorable Court's Second
Division. It should be mentioned that in the Durumpili case
before the Third Division, the Court of Appeals relied on
the alleged confirmation of the sale executed by Angustia
 Reyes, while in the Reyes case before this Second
Division, there was no sale that was executed by the
petitioners Reyes' predecessor-in-interest, Rafael Reyes,
Jr.
The foregoing claim is not supported by the rollo of G.R. No.
92811, which reveals the following: (a) On 18 September 1990,
petitioners therein, represented by De Lara, De Lunas and
Rosales, who are the lawyers of petitioners in the instant case,
filed a motion for the reconsideration of the resolution of 20
August 1990.19 b) This motion was denied in the resolution of 1
October 1990.20 c) On 17 November 1990, petitioners therein,
through the same lawyers, filed a Motion For Leave Of Court To
Refer Case To The Honorable Supreme Court En Banc And/Or
Motion For Reconsideration21 wherein they specifically admit that
said case and the instant petition have "identity and/or similarity
of the parties, the facts, the issues raised," even going to the
extent of "graphically" illustrating where such similarities lie.22 d)
This motion was denied in the resolution of 28 November 1990.
Copy thereof was furnished the attorneys for petitioners.23 e) Entry
of judgment had already been made therein and a copy thereof
was sent to petitioner's counsel per Letter of Transmittal of the
Deputy Court and Chief of the Judicial Records Office dated 20
December 1990.
What comes out prominently from the disquisitions of the parties
is this simple issue: whether or not respondent Court of Appeals
committed any reversible error in setting aside the decision of the
trial court.
We find none. The reversal of the trial court's decision is
inevitable and unavoidable because the legal and factual
conclusions made by the trial court are unfounded and clearly
erroneous. The Court of Appeals was not bound to agree to such
conclusions. The trial court erred in holding that: (a) there was no
partition among the children of Gavino Reyes in 1936 since there
is no written evidence in support thereof; yet, it admits that there
was a survey and subdivision of the property and the adjudication
of specific subdivision lots to each of the children of Gavino; (b)
the land sold by Rafael Reyes, Sr. to private respondents is not
identical to Lot No. 1-A-14, the lot specified for and adjudicated to
Rafael Reyes, Jr. in the partition agreement; and (c) if the land
sold by Rafael Reyes, Sr. to private respondent Dalmacio
Gardiola is indeed Lot No. 1-A-14 and that TCT No. T-27257 was
obtained through fraud, the remedy open to the vendee was an
action for reconveyance, which should have been brought within
four (4) years from the discovery thereof in 1967 when the
Extrajudicial Settlement was executed since private respondent
Rosario Martillano, wife of Dalmacio, was a party thereto.
The Court of Appeals correctly held that the partition made by the
children of Gavino Reyes in 1936, although oral, was valid and
binding. There is no law that requires partition among heirs to be
in writing to be valid.24 In Hernandez vs. Andal, supra, this Court,
interpreting Section 1 of Rule 74 of the Rules of Court, held that
the requirement that a partition be put in a public document and
registered has for its purpose the protection of creditors and at
the same time the protection of the heirs themselves against
tardy claims. The object of registration is to serve as constructive
notice to others. It follows then that the intrinsic validity of partition
not executed with the prescribed formalities does not come into
play when there are no creditors or the rights of creditors are not
affected. Where no such rights are involved, it is competent for
the heirs of an estate to enter into an agreement for distribution in
a manner and upon a plan different from those provided by law.
There is nothing in said section from which it can be inferred that
a writing or other formality is an essential requisite to the validity
of the partition. Accordingly, an oral partition is valid.
Barcelona, et al. vs. Barcelona, et al., supra, provides the reason
why oral partition is valid and why it is not covered by the Statute
of Frauds: partition among heirs or renunciation of an inheritance
by some of them is not exactly a conveyance of real property for
the reason that it does not involve transfer of property from one to
the other, but rather a confirmation or ratification of title or right of
property by the heir renouncing in favor of another heir accepting
and receiving the inheritance.
Additionally, the validity of such oral partition in 1936 has been
expressly sustained by this Court in the Resolution of 20 August
1990 in G.R. No. 92811.25
But even if We are to assume arguendo that the oral partition
executed in 1936 was not valid for some reason or another, We
would still arrive at the same conclusion for upon the death of
Gavino Reyes in 1921, his heirs automatically became co-owners
of his 70-hectare parcel of land. The rights to the succession are
transmitted from the moment of death of the decedent.26 The
estate of the decedent would then be held in co-ownership by the
heirs. The co-heir or co-owner may validly dispose of his share or
interest in the property subject to the condition that the portion
disposed of is eventually allotted to him in the division upon
termination of the co-ownership. Article 493 of the Civil Code
provides:
Each co-owner shall have the full ownership of his part
and the fruits and benefits pertaining thereto, and he may
even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him
in the division upon the termination of the co-ownership.
In Ramirez vs. Bautista,27 this Court held that every co-heir has
the absolute ownership of his share in the community property
and may alienate, assign, or mortgage the same, except as to
purely personal rights, but the effect of any such transfer is limited
to the portion which may be awarded to him upon the partition of
the property.
In the case at bar, the lot sold by Rafael Reyes, Sr. to private
respondent Dalmacio Gardiola is his share in the estate of his
deceased father, Gavino Reyes. It is the same property which
was eventually adjudicated to his son and heir, Rafael Reyes, Jr.,
represented in turn by his heirs-petitioners herein-in the
extrajudicial settlement of 1967.
In respect to the issue as to whether the property sold by Rafael
Reyes, Sr. is identical to Lot No. 1-14-A, the trial court based its
conclusion that it is not, on his observation that the description of
the former does not tally with that of the latter, moreover, if Rafael
did intend to sell Lot No. 1-14-A, he should have specifically
stated it in the deed since at that time, the property had already
been partitioned and said lot was adjudicated to him. In addition
to the contrary findings and conclusion of the respondent Court
on this issue to which We fully agree, it is to be stressed that
Rafael had this property declared for taxation purposes and the
tax declaration issued was made the basis for the description of
the property in the deed of sale. Upon the execution of the deed
of sale, vendee — herein private respondent Dalmacio Gardiola
— immediately took possession of the property. This is the very
same property which is the subject matter of this case and which
petitioners seek to recover from the private respondents. The
main evidence adduced for their claim of ownership and
possession over it is TCT No. T-27257, the certificate of title
covering Lot No. 1-14-A. They therefore admit and concede that
the property claimed by private respondent, which was acquired
by sale from Rafael Reyes, Sr., is none other than Lot No. 1-14-
A.
The participation of private respondent Rosario Gardiola in the
Extrajudicial Settlement did not place private respondents in
estoppel to question the issuance of TCT No. T-27257. As
correctly maintained by private respondents, she signed it in
representation of her deceased mother, Marta Reyes, a daughter
and an heir of Gavino Reyes. She did not sign for and in behalf of
her husband, Dalmacio Gardiola, vendee of the share of Rafael
Reyes, Sr.
The same did not operate to divest the vendee of the share of issuance of the transfer certificate of title in the name of Rafael
Rafael Reyes, Sr. in the estate of Gavino. Petitioners, as mere
1âwphi1 Reyes, Jr.
successors-in-interest of Rafael Reyes, Jr., son of Rafael Reyes,
Sr., can only acquire that which Rafael, Jr. could transmit to them The instant petition then is without merit.
upon his death. The latter never became the owner of Lot No. 1-
A-14 because it was sold by his father in 1943. The issuance of WHEREFORE, judgment is hereby rendered DENYING the
TCT No. T-27257 in the name of Rafael Reyes, Jr., in so far as petition with costs against petitioners.
Lot No. 1-14-A is concerned, was clearly erroneous because he
never became its owner. An extrajudicial settlement does not
SO ORDERED.
create a light in favor of an heir. As this Court stated in
the Barcelona case,28 it is but a confirmation or ratification of title
or right to property. Thus, since he never had any title or right to
Lot No. 1-14-A, the mere execution of the settlement did not
improve his condition, and the subsequent registration of the
deed did not create any right or vest any title over the property in
favor of the petitioners as heirs of Rafael Reyes, Jr. The latter
cannot give them what he never had before. Nemo dare potest
quod non habet.

There is one more point that should be stressed here. Petitioners'

immediate predecessor-in-interest, Rafael Reyes, Jr., never took
any action against private respondents from the time his father
sold the lot to the latter. Neither did petitioners bring any action to
recover from private respondents the ownership and possession
of the lot from the time Rafael Reyes, Jr. died. As categorically
admitted by petitioners in their complaint and amended complaint,
it was only in or about September 1969 when, after the delivery of
TCT No. 27257 by Candido Hebron to them, that they definitely
discovered that they were the owners of the property in question.
And yet, despite full knowledge that private respondents were in
actual physical possession of the property, it was only about
thirteen and one-half (13 1/2) years later that they decided to file
an action for recovery of possession. As stated earlier, the
original complaint was filed in the trial court on 14 March 1983.
There was then absolutely no basis for the trial court to place the
burden on private respondents to bring an action for
reconveyance within four (4) years from their discovery of the
 [G.R. No. 94918. September 2, 1992.]
DANILO I. SUAREZ, EUFROCINA SUAREZ-ANDRES,
MARCELO I. SUAREZ, JR., EVELYN SUAREZ-DE LEON
and REGINIO I. SUAREZ, Petitioners, v. THE COURT
OF APPEALS, VALENTE RAYMUNDO, VIOLETA
RAYMUNDO, MA. CONCEPCION VITO and VIRGINIA
BANTA, Respondents.
Villareal Law Offices, for Petitioners.
Nelson Loyola for Private Respondent.
SYLLABUS
1. CIVIL LAW; WILLS AND SUCCESSION; LEGITIME;
PROPRIETARY INTEREST OF THE CHILDREN, DIFFERENT
AND ADVERSE FROM THEIR MOTHER. — The legitime of
the surviving spouse is equal to the legitime of each
child. The proprietary interest of petitioners in the levied
and auctioned property is different from and adverse to
that of their mother. Petitioners became co-owners of the
property not because of their mother but through their
own right as children of their deceased father. Therefore,
petitioners are not barred in any way from instituting the
action to annul the auction sale to protect their own
interest.
DECISION
NOCON, J.:
The ultimate issue before Us is whether or not private
respondents can validly acquire all the five (5) parcels of
land co-owned by petitioners and registered in the name
of petitioner’s deceased father. Marcelo Suarez, whose
estate has not been partitioned or liquidated, after the
said properties were levied and publicly sold en masse to
private respondents to satisfy the personal judgment
debt of Teofista Suarez, the surviving spouse of Marcelo
Suarez, mother of herein petitioners. chanrobles law library
The undisputed facts of the case are as follows: chanrob1es virtual 1aw library
Herein petitioners are brothers and sisters. Their father
died in 1955 and since then his estate consisting of
several valuable parcels of land in Pasig, Metro Manila
has lot been liquidated or partitioned. In 1977,
petitioners’ widowed mother and Rizal Realty Corporation
lost in the consolidated cases for rescission of contract
and for damages, and were ordered by Branch 1 of the
then Court of First Instance of Rizal (now Branch 151,
RTC of Pasig) to pay, jointly and severally, herein
respondents the aggregate principal amount of about
P70,000 as damages. 1
The judgment against petitioner’s mother and Rizal
Realty Corporation having become final and executory,
five (5) valuable parcel of land in Pasig, Metro Manila,
(worth to be millions then) were levied and sold on
execution on June 24, 1983 in favor of the private
respondents as the highest bidder for the amount of
P94,170.000. Private respondents were then issued a
certificate of sale which was subsequently registered or
August 1, 1983.
On June 21, 1984 before the expiration of the
redemption period, petitioners filed a reinvindicatory
action 2 against private respondents and the Provincial
Sheriff of Rizal, thereafter docketed as Civil Case No.
51203, for the annulment of the auction sale and the
recovery of the ownership of the levied pieces of
property. Therein, they alleged, among others, that being
strangers to the case decided against their mother, they
cannot be held liable therefor and that the five (5)
parcels of land, of which they are co-owners, can neither
be levied nor sold on execution.
On July 31, 1984, the Provincial Sheriff of Rizal issued to
private respondents a final deed of sale 3 over the
properties.
On October 22, 1984, Teofista Suarez joined by herein
petitioners filed with Branch 151 a Motion for
Reconsideration 4 of the Order dated October 10, 1984,
claiming that the parcels of land are co-owned by them
and further informing the Court the filing and pendency
of an action to annul the auction sale (Civil Case No.
51203), which motion however, was denied. chanrobles.com:cralaw:red
On February 25, 1985, a writ of preliminary injunction
was issued enjoining private respondents from
transferring to third parties the levied parcels of land
based on the finding that the auctioned lands are co-
owned by petitioners.
On March 1, 1985, private respondent Valente Raymundo
filed in Civil Case No. 51203 a Motion to Dismiss for
failure on the part of the petitioners to prosecute,
however, such motion was later denied by Branch 155,
Regional Trial Court, Pasig.
On December 1985, Raymundo filed in Civil Case No.
51203 an Ex-Parte Motion to Dismiss complaint for
failure to prosecute. This was granted by Branch 155
through an Order dated May 29, 1986, notwithstanding
petitioner’s pending motion for the issuance of alias
summons to be served upon the other defendants in the
said case. A motion for reconsideration was filed but was
later denied.
On October 10, 1984, RTC Branch 151 issued in Civil
Case Nos. 21736-21739 an Order directing Teofista
Suarez and all persons claiming right under her to vacate
the lots subject of the judicial sale; to desist from
removing or alienating improvements thereon; and to
surrender to private respondents the owner’s duplicate
copy of the torrens title and other pertinent documents.
Teofista Suarez then filed with the then Court of Appeals
a petition for certiorari to annul the Orders of Branch 151
dated October 10, 1984 and October 14, 1986 issued in
Civil Case Nos. 21736-21739.
On December 4, 1986 petitioners filed with Branch 155 a
Motion for reconsideration of the Order 5 dated
September 24, 1986. In an Order dated June 10, 1987, 6
Branch 155 lifted its previous order of dismissal and
directed the issuance of alias summons. chanrobles law library : red
Respondents then appealed to the Court of Appeals
seeking to annul the orders dated February 25, 1985, 7
May 19, 1989 8 and February 26, 1990 9 issued in Civil
Case No. 51203 and further ordering respondent Judge
to dismiss Civil Case No. 51203. The appellate court
rendered its decision on July 27, 1990, 10 the dispositive
portion of which reads:jgc:chanrobles.com.ph
"WHEREFORE, the petition for certiorari is hereby
granted and the questioned orders dated February 25,
1985, May 19, 1989 and February 26, 1990 issued in
Civil Case No. 51203 are hereby annulled, further
respondent Judge is ordered to dismiss Civil Case No.
51203." 11
Hence, this appeal.
Even without touching on the incidents and issues raised
by both petitioner and private respondents and the
developments subsequent to the filing of the complaint,
We cannot but notice the glaring error committed by the
trial court.
It would be useless to discuss the procedural issue on the
validity of the execution and the manner of publicly
selling en masse the subject properties for auction. To
start with, only one-half of the 5 parcels of land should
have been the subject of the auction sale.
The law in point is Article 777 of the Civil Code, the law
applicable at the time of the institution of the case.
"The rights to the succession are transmitted from the
moment of the death of the decedent."
Article 888 further provides: chanrobles.com.ph : virtual law library
"The legitime of the legitimate children and descendants
consists of one-half of the hereditary estate of the father
and of the mother.
The latter may freely dispose of the remaining half,
subject to the rights of illegitimate children and of the
surviving spouse as hereinafter provided."
Article 892 par. 2 likewise provides: jgc:chanrobles.com.ph
"If there are two or more legitimate children or
descendants, the surviving spouse shall be entitled to a
portion equal to the legitime of each of the legitimate
children or descendants." cralaw virtua1aw library
Thus, from the foregoing, the legitime of the surviving
spouse is equal to the legitime of each child.
The proprietary interest of petitioners in the levied and
auctioned property is different from and adverse to that
of their mother. Petitioners became co-owners of the
property not because of their mother but through their
own right as children of their deceased father. Therefore,
petitioners are not barred in any way from instituting the
action to annul the auction sale to protect their own
interest.
WHEREFORE, the decision of the Court of Appeals dated
July 27, 1990 as well as its Resolution of August 28,
1990 are hereby REVERSED and set aside; and Civil Case
No. 51203 is reinstated only to determine that portion
which belongs to petitioners and to annul the sale with
cralaw virtua1aw library regard to said portion.chanrobles law library
SO ORDERED.
cralaw virtua1aw library
G.R. No. 126950 July 2, 1999
NELSON NUFABLE, SILMOR NUFABLE and AQUILINA
NUFABLE, petitioners,
vs.
GENEROSA NUFABLE, VILFOR NUFABLE, MARCELO
NUFABLE, and the COURT OF APPEALS,respondents.
GONZAGA-REYES, J.:
This petition for review on certiorari seeks to reverse and set
aside the Decision dated November 25, 1995 of the Fifth
Division1 of the Court of Appeals for allegedly being contrary to
law.
The following facts as found by the Court of Appeals are
undisputed:
Edras Nufable owned at Poblacion, Manjuyod,
Negros Oriental, consisting of 948 square meters,
more or less. He died on August 9, 1965 and was
survived by his children, namely: Angel Custodio,
Generosa, Vilfor and Marcelo, all surnamed
Nufable. Upon petition for probate filed by said
heirs and after due publication and hearing, the
then Court of First Instance of Negros Oriental
(Branch II) issued an Order dated March 30, 1966
admitting to probate the last will and testament
executed by the deceased Edras Nufable (Exhs.
B, C and C-1).
On June 6, 1966 the same court issued an Order
approving the Settlement of Estate submitted by
the heirs of the late ESdras Nufable, portions of
which read:
KNOW ALL MEN BY THESE
PRESENTS:
We, ANGEL CUSTODIO
NUFABLE, GENEROSA
NUFABLE, VILFOR NUFABLE
and MARCELO NUFABLE, all of
legal ages (sic), Filipinos, and with
residence and postal address at
Manjuyod, Negros Oriental,
Philippines,
— HEREBY DECLARE AND
MAKE MANIFEST —
1. That on August 9, 1965, Rev.
Fr. Esdras Nufable died leaving (a)
Last Will and Testament (marked
Exh. G) disposing (of) his
properties or estate in favor of his
four legitimate children, namely:
Angel Custodio Nufable, Generosa
Nufable, Vilfor Nufable and
Marcelo Nufable;
2. That on March 30, 1966 the
said Last Will and Testament was
probated by the Honorable Court,
Court of First Instance of Negros
Oriental, and is embodied in the
same order appointing an
Administratrix, Generosa Nufable,
but to qualify only if she put up a
necessary bond of P1,000.00;
3. That herein legitimate children
prefer not to appoint an
 Administratrix, as agreed upon
(by) all the heirs, because they
have no objection as to the
manner of disposition of their
share made by the testator, the
expenses of the proceedings and
that they have already taken
possession of their respective
shares in accordance with the will;
4. That the herein heirs agreed, as
they hereby agree to settle the
estate in accordance with the
terms and condition of the will in
the following manner, to wit:
a) That the parcel of land situated
in Poblacion Manjuyod, Negros
Oriental remains undivided for
community ownership but
respecting conditions imposed
therein (sic) in the will;
xxx xxx xxx
(Exhs. "E" and "E-1")
Two months earlier, or on March 15, 1966,
spouses Angel Custodio and Aquilina Nufable
mortgaged the entire property located at
Manjuyod to the Development Bank of the
Philippines [DBP] (Pre-trial Order, dated January
7, 1992, p. 103, Original Records). Said
mortgagors became delinquent for which reason
the mortgaged property was foreclosed by DBP
on February 26, 1973 (id.).
On January 11, 1980, Nelson Nufable, the son of
Angel Custodio Nufable (who died on August 29,
1978 [TSN, Testimony of Nelson Nufable, Hearing
of August 18, 1992, p. 17]), purchased said
property from DBP (Exh. "1").
Generosa, Vilfor and Marcelo, all surnamed
Nufable filed with the lower court a complaint
dated July 25, 1985 "To Annul Fraudulent
Transactions, to Quiet Title and To Recover
Damages' against Nelson Nufable, and wife,
Silmor Nufable and his mother Aquilina Nufable.
Plaintiffs pray:
WHEREFORE, plaintiffs pray this
Honorable Court that after trial
judgment be rendered ordering:
(a) That the said Deed of Sale
(Annex "C") executed by the
Development Bank of the
Philippines in favor of the
defendants be declared null and
void as far as the three fourths
(3/4) rights which belongs (sic) to
the plaintiffs are concerned;
(b) That the said three fourths
(3/4) rights over the above parcel
in question be declared as
belonging to the plaintiffs at one
fourth right to each of them;
(c) To order the defendants to pay
jointly and severally to the plaintiffs
by way of actual and moral
damages the amount of
 P10,000.00 and another
P5,000.00 as Attorney's fees, and
to pay the costs.
(d) Plus any other amount which
this Court may deem just and
equitable. (p. 6, Original Records)
In their Answer, defendants contend:
4. Paragraph 4 is denied, the truth
being that the late Angel Nufable
was the exclusive owner of said
property, that as such owner he
mortgaged the same to the
Development Bank of the
Philippines on March 15, 1966,
that said mortgage was foreclosed
and the DBP became the
successful bidder at the auction
sale, that ownership was
consolidated in the name of the
DBP, and that defendant Nelson
Nufable bought said property from
the DBP thereafter. During this
period, the plaintiffs never
questioned the transactions which
were public, never filed any third
party claim nor attempted to
redeem said property as
redemptioners, and that said Deed
of Sale, Annex "B" to the
complaint, is fictitious, not being
supported by any consideration;
(pp. 20-21, id.)
The Deed of Sale (Annex "B"), referred to by the
parties is a notarized Deed of Sale, dated July 12,
1966 (marked as Exhibit "H") by virtue of which,
spouses Angel and Aquilina Nufable, as vendors,
sold 3/4 portion of the subject property to herein
plaintiffs for and in consideration of P1,000.00
(Exh. "5").2
On November 29, 1995, the Court of Appeals rendered judgment,
the dispositive portion3 of which reads:
WHEREFORE, the appealed decision of the lower
court is REVERSED and SET ASIDE. A new
judgment is hereby entered declaring plaintiffs-
appellants as the rightful co-owners of the subject
property and entitled to possession of 3/4
southern portion thereof; and defendant-appellee
Nelson Nufable to 1/4 portion.
No award on damages.
No costs.
Defendants-appellees' Motion for Reconsideration was denied for
lack of merit in the Resolution of the Court of Appeals4 dated
October 2, 1996.
Hence, the present petition. Petitioners raise the following
grounds for the petition:
1. Honorable Court of Appeals erred in
considering as controlling the probate of the Last
Will and Testament of Esdras Nufable, the
probate thereof not being an issue in this case;
2. The Honorable Court of Appeals erred in not
considering the fact that the Development Bank of
the Philippines became absolute, exclusive, legal
and rightful owner of the land in question, from
 whom petitioner Nelson Nufable acquired the
same by purchase and that, therefore, no award
can be made in favor of private respondent unless
and until the Development Bank of the Philippines'
title thereto is first declared null and void by the
court.
The Court of Appeals, in its decision, stated that the trial court
failed to take into consideration the probated will of the late
Esdras Nufable bequeathing the subject property to all his four
children.5 In the present petition, petitioner present the issue of
whether or not the Last Will and Testament of Esdras Nufable
and its subsequent probate are pertinent and material to the
question of the right of ownership of petitioner Nelson Nufable
who purchased the land in question from, and as acquired
property of, the Development Bank of the Philippines (DBP, for
short). They contend that the probate of the Last Will Testament
and of Esdras Nufable did not determine the ownership of the
land in question as against third parties. 1âwphi1.nêt
As a general rule, courts in probate proceedings are limited only
to passing upon the extrinsic validity of the will sought to be
probated, the due execution thereof, the testator's testamentary
capacity and the compliance with the requisites or solemnities
prescribes by law. Said court at this stage of the proceedings is
not called to rule on the rule on the intrinsic validity or efficacy of
the will.6 The question of the intrinsic validity of a will normally
comes only after the court has declared that the will has been
duly authenticated.
The records show that upon petition for probate filed by the heirs
of the late Esdras Nufable, an Order dated March 30, 1966 was
issued by then Court of First Instance of Negros Oriental, Branch
II, admitting to probate the last will and testament executed by the
decedent.7 Thereafter, on June 6, 1966, the same court approved
the Settlement of Estate submitted by the heirs of the late Esdras
Nufable wherein they agreed "(T)hat the parcel land situated in
Poblacion Manjuyod, Negros Oriental remains undivided for
community ownership but respecting conditions imposed therein
(sic) in the will."8 In paragraph 3 thereof, they stated that "they
have no objection as to the manner of disposition of their share
made by the testator, the expenses of the proceeding and that
they have already taken possession of their respective shares in
accordance with the will." Verily, it was the heirs of the late
Esdras Nufable who agreed among themselves on the disposition
of their shares. The probate court simply approved the agreement
among the heirs which approval was necessary for the validity of
any disposition of the decedent's estate.9
It should likewise be noted that the late Esdras Nufable died on
August 9, 1965. When the entire property located at Manjuyod
was mortgaged on March 15, 1966 by his son Angel Custodio
with DBP, the other heirs of Esdras — namely: Generosa, Vilfor
and Marcelo — had already acquired successional rights over the
said property. This is so because of the principle contained in
Article 777 of the Civil Code to the effect that the rights to the
succession are transmitted from the moment of death of the
decedent. Accordingly, for the purpose of transmission of rights, it
does not matter whether the Last Will and Testament of the late
Esdras Nufable was admitted on March 30, 1966 or thereafter or
that the Settlement of Estate was approved on June 6, 1966 or
months later. It is to be noted that the probated will of the late
Esdras Nufable specifically referred to the subject property in
stating that "the land situated in the Poblacion, Manjuyod, Negros
Oriental, should not be divided because this must remain in
common for them, but it is necessary to allow anyone of them
brothers and sisters to construct a house therein."10 It was therefor
the will of the decedent that the subject property should
undivided, although the restriction should not exceed twenty (20)
years pursuant to Article 870 11 of the Civil Code.
Thus, when Angel Nufable and his spouses mortgaged the
subject property to DBP on March 15, 1966, they had no right to
mortgage the entire property. Angel's right over the subject
property was limited only to 1/4 pro indivisoshare. As co-owner of
the subject property, Angel's right to sell, assign or mortgage is
limited to that portion that may be allotted to him upon termination
of the co-ownership. Well-entrenched is the rule that a co-owner
can only alienate his pro indiviso share in the co-owned
property. 12
The Court of Appeals did not err in ruling that Angel Custodio
Nufable "had no right to mortgage the subject property in its
entirety. His right to encumber said property was limited only to
1/4 pro indiviso share of the property in question." 13 Article 493 of
the Civil Code spells out the rights or co-owners over a co-owned
property. Pursuant to said Article, a co-owner shall have full
ownership of his part and of the fruits and benefits pertaining
thereto. He has the right to alienate, assign or mortgage it, and
even substitute another person in its enjoyment. As a mere part
owner, he cannot alienate the shares of the other co-owners. The
prohibition is premised on the elementary rule that "no one can
give what he does not have." 14
Moreover, respondents stipulated that they were not aware of the
mortgage by petitioners of the subject property. 15This being the
case, a co-owner does not lose his part ownership of a co-owned
property when his share is mortgaged by another co-owner
without the former's knowledge and consent 16 as in the case at
bar. It has likewise been ruled that the mortgage of the inherited
property is not binding against co-heirs who never benefitted. 17
Furthermore, the Deed of Sale dated June 17, 1966 marked as
Exhibit "H" executed by spouses Angel and Aquilina Nufable in
favor of respondents Generosa, Vilfor and Marcelo wherein the
former sold, ceded and transferred back to the latter the 3/4
portion of the subject property bolsters respondents' claim that
there was co-ownership. Petitioner Nelson himself claimed that
he was aware of the aforesaid Deed of Sale. 18
Anent the second ground of the petition, petitioners allege that
the Development Bank of the Philippines acquired ownership of
the land in question through foreclosure, purchase and
consolidation of ownership. Petitioners argue that if petitioner
Nelson Nufable had not bought said land from the DBP, private
respondents, in order to acquire said property, must sue said
bank for the recovery thereof, and in so doing, must allege
grounds for the annulment of documents evidencing the bank's
ownership thereof. Petitioners contend that since petitioner
Nelson Nufable simply bought the whole land from the bank, they
cannot be deprived of the ownership of 3/4 without making any
pronouncement as to the legality or illegality of the bank's
ownership of said land. It is argued that there was no evidence to
warrant declaration of nullity of the bank's acquisition of said land;
and that neither was there a finding by the court that the bank
illegally acquired the said property.
As adverted to above, when the subject property was mortgaged
by Angel Custodio, he had no right to mortgage the entire
property but only with respect to his 1/4 pro indiviso share as the
property was subject to the successional rights of the other heirs
of the late Esdras. Moreover, in case of foreclosure; a sale would
result in the transmission of title to the buyer which is feasible
only if the seller can be in a position to convey ownership of the
things sold. 19And in one case, 20 it was held that a foreclosure
would be ineffective unless the mortgagor has title to the property
to be foreclosed. Therefore, as regards the remaining 3/4 pro
indiviso share, the same was held in trust for the party rightfully
entitled thereto, 21 who are the private respondents herein.
Pursuant to Article 1451 of the Civil Code, when land passes by
succession to any person and he causes the legal title to be put
in the name of another, a trust is established by implication of law
for the benefit of the true owner. Likewise, under Article 1456 of
the same Code, if property is acquired through mistake or fraud,
the person obtaining it is, by force of law, considered a trustee of
an implied trust for the benefit of the person from whom the
property comes. In the case of Noel vs. Court of Appeals, 22 this
Court held that "a buyer of a parcel of land at a public auction to
satisfy a judgment against a widow acquired only one-half interest
on the land corresponding to the share of the widow and the other
half belonging to the heirs of her husband became impressed
with a constructive trust in behalf of said heirs."
Neither does the fact that DBP succeeded in consolidating
ownership over the subject property in its name terminate the
existing co-ownership. Registration of property is not a means of
acquiring ownership. 23 When the subject property was sold to and
consolidated in the name of DBP, it being the winning bidder in
the public auction, DBP merely held the 3/4 portion in trust for the
private respondents. When petitioner Nelson purchased the said
property, he merely stepped into the shoes of DBP and acquired
whatever rights and obligations appertain thereto.
This brings us to the issue of whether or not the DBP should have
been impleaded as party-defendant in the case at bar. Petitioners
contend that DBP was never impleaded and that due process
requires that DBP be impleaded so that it can defend its sale to
petitioner Nelson Nufable; and that it was the duty of private
respondents, and not of petitioner Nelson, to implead the bank
and ask for the annulment of documents evidencing the bank's
ownership of the disputed land.
In the Rejoinder to the Reply, private respondents that the non-
inclusion of DBP as a "necessary party" was not questioned by
petitioners from the time the Complaint was filed until the case
was "finished." It was only after the adverse decision by the
respondent Court of Appeals that petitioners raised the issue.
At the outset, it should be stated petitioners never raised this
issue in their Answers and pursuant to Section 2, Rule 9 of the
Rules of Court, defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived.
Nonetheless, the rule is that indispensable parties, i.e., parties in
interest without whom no final determination can be had of an
action, shall be joined either as plaintiffs or defendants; the
inclusion as a party, i.e., persons who are not indispensable but
ought to be parties if complete relief is to be accorded as between
those already parties, the court may, in its discretion, proceed in
the action without making such persons parties, and the judgment
rendered therein shall be without prejudice to the rights of such
persons. 25 Proper parties, therefore, have been described as
parties whose presence in necessary in order to adjudicate the
whole controversy, but whose interests are so far separable that
a final decree can be made in their absence without affecting
them. 26 Any claim against a party may be severed and proceeded
with separately. 27
The pivotal issue to be determined is whether DBP is an
indispensable party in this case.
Private respondents do not question the legality of the foreclosure
of the mortgaged property and the subsequent sale of the same
to DBP. The subject property was already purchased by petitioner
Nelson from DBP and latter, by such sale, transferred its rights
and obligations to the former. Clearly, petitioners' interest in the
controversy is distinct and separable from the interest of DBP and
a final determination can be had of the action despite the non-
inclusion of DBP as party-defendant. Hence, DBP, not being an
indispensable party, did not have to be impleaded in this case.
WHEREFORE, there being no reversible error in the decision
appealed from, the petition for review on certiorari is hereby
DENIED. 1âwphi1.nêt
SO ORDERED.
G.R. No. L-60174 February 16, 1983
EDUARDO FELIPE, HERMOGENA V. FELIPE AND VICENTE
V. FELIPE, petitioners,
vs.
HEIRS OF MAXIMO ALDON, NAMELY: GIMENA ALMOSARA,
SOFIA ALDON, SALVADOR ALDON, AND THE HONORABLE
COURT OF APPEALS, respondents.
Romulo D. San Juan for petitioner.
Gerundino Castillejo for private respondent.
ABAD SANTOS, J.:
Maximo Aldon married Gimena Almosara in 1936. The spouses
bought several pieces of land sometime between 1948 and 1950.
In 1960-62, the lands were divided into three lots, 1370, 1371 and
1415 of the San Jacinto Public Land Subdivision, San Jacinto,
Masbate.
In 1951, Gimena Almosara sold the lots to the spouses Eduardo
Felipe and Hermogena V. Felipe. The sale was made without the
consent of her husband, Maximo.
On April 26, 1976, the heirs of Maximo Aldon, namely his widow
Gimena and their children Sofia and Salvador Aldon, filed a
complaint in the Court of First Instance of Masbate against the
Felipes. The complaint which was docketed as Civil Case No.
2372 alleged that the plaintiffs were the owners of Lots 1370,
1371 and 1415; that they had orally mortgaged the same to the
defendants; and an offer to redeem the mortgage had been
refused so they filed the complaint in order to recover the three
parcels of land.
The defendants asserted that they had acquired the lots from the
plaintiffs by purchase and subsequent delivery to them. The trial
court sustained the claim of the defendants and rendered the
following judgment:
a. declaring the defendants to be the lawful
owners of the property subject of the present
litigation;
b. declaring the complaint in the present action to
be without merit and is therefore hereby ordered
dismissed;
c. ordering the plaintiffs to pay to the defendants
the amount of P2,000.00 as reasonable attorney's
fees and to pay the costs of the suit.
The plaintiffs appealed the decision to the Court of Appeals which
rendered the following judgment:
PREMISES CONSIDERED, the decision
appealed from is hereby REVERSED and SET
ASIDE, and a new one is hereby RENDERED,
ordering the defendants-appellees to surrender
the lots in question as well as the plaintiffs'-
appellants' muniments of title thereof to said
plaintiffs-appellants, to make an accounting of the
produce derived from the lands including
expenses incurred since 1951, and to solidarity
turn over to the plaintiffs-appellants the NET
monetary value of the profits, after deducting the
sum of P1,800.00. No attorney's fees nor moral
damages are awarded for lack of any legal
justification therefor. No. costs.
The ratio of the judgment is stated in the following paragraphs of
the decision penned by Justice Edgardo L. Paras with the
concurrence of Justices Venicio Escolin and Mariano A. Zosa:
One of the principal issues in the case involves
the nature of the aforementioned conveyance or
transaction, with appellants claiming the same to
be an oral contract of mortgage or antichresis, the
redemption of which could be done anytime upon
repayment of the P1,800.00 involved (incidentally
the only thing written about the transaction is the
aforementioned receipt re the P1,800). Upon the
other hand, appellees claim that the transaction
was one of sale, accordingly, redemption was
improper. The appellees claim that plaintiffs never
conveyed the property because of a loan or
mortgage or antichresis and that what really
transpired was the execution of a contract of sale
thru a private document designated as a 'Deed of
Purchase and Sale' (Exhibit 1), the execution
having been made by Gimena Almosara in favor
of appellee Hermogena V. Felipe.
After a study of this case, we have come to the
conclusion that the appellants are entitled to
recover the ownership of the lots in question. We
so hold because although Exh. 1 concerning the
sale made in 1951 of the disputed lots is, in Our
opinion, not a forgery the fact is that the sale
made by Gimena Almosara is invalid, having been
executed without the needed consent of her
husband, the lots being conjugal. Appellees'
argument that this was an issue not raised in the
pleadings is baseless, considering the fact that
the complaint alleges that the parcels 'were
purchased by plaintiff Gimena Almosara and her
late husband Maximo Aldon' (the lots having been
purchased during the existence of the marriage,
the same are presumed conjugal) and
inferentially, by force of law, could not, be
disposed of by a wife without her husband's
consent.
The defendants are now the appellants in this petition for review.
They invoke several grounds in seeking the reversal of the
decision of the Court of Appeals. One of the grounds is factual in
nature; petitioners claim that "respondent Court of Appeals has
found as a fact that the 'Deed of Purchase and Sale' executed by
respondent Gimena Almosara is not a forgery and therefore its
authenticity and due execution is already beyond question." We
cannot consider this ground because as a rule only questions of
law are reviewed in proceedings under Rule 45 of the Rules of
Court subject to well-defined exceptions not present in the instant
case.
The legal ground which deserves attention is the legal effect of a
sale of lands belonging to the conjugal partnership made by the
wife without the consent of the husband.
It is useful at this point to re-state some elementary rules: The
husband is the administrator of the conjugal partnership. (Art.
165, Civil Code.) Subject to certain exceptions, the husband
cannot alienate or encumber any real property of the conjugal
partnership without the wife's consent. (Art. 166, Idem.) And the
wife cannot bind the conjugal partnership without the husband's
consent, except in cases provided by law. (Art. 172, Idem.)
In the instant case, Gimena, the wife, sold lands belonging to the
conjugal partnership without the consent of the husband and the
sale is not covered by the phrase "except in cases provided by
law." The Court of Appeals described the sale as "invalid" - a term
which is imprecise when used in relation to contracts because the
Civil Code uses specific names in designating defective
contracts, namely: rescissible (Arts. 1380 et seq.), voidable (Arts.
1390 et seq.), unenforceable (Arts. 1403, et seq.), and void or
inexistent (Arts. 1409 et seq.)
The sale made by Gimena is certainly a defective contract but of
what category? The answer: it is a voidable contract.
According to Art. 1390 of the Civil Code, among the voidable
contracts are "[T]hose where one of the parties is incapable of
giving consent to the contract." (Par. 1.) In the instant case-
Gimena had no capacity to give consent to the contract of sale.
The capacity to give consent belonged not even to the husband
alone but to both spouses.
The view that the contract made by Gimena is a voidable contract
is supported by the legal provision that contracts entered by the
husband without the consent of the wife when such consent is
required, are annullable at her instance during the marriage and
within ten years from the transaction questioned. (Art. 173, Civil
Code.)
Gimena's contract is not rescissible for in such contract all the
essential elements are untainted but Gimena's consent was
tainted. Neither can the contract be classified as unenforceable
because it does not fit any of those described in Art. 1403 of the
Civil Code. And finally, the contract cannot be void or inexistent
because it is not one of those mentioned in Art. 1409 of the Civil
Code. By process of elimination, it must perforce be a voidable
contract.
The voidable contract of Gimena was subject to annulment by her
husband only during the marriage because he was the victim who
had an interest in the contract. Gimena, who was the party
responsible for the defect, could not ask for its annulment. Their
children could not likewise seek the annulment of the contract
while the marriage subsisted because they merely had an
inchoate right to the lands sold.
The termination of the marriage and the dissolution of the
conjugal partnership by the death of Maximo Aldon did not
improve the situation of Gimena. What she could not do during
the marriage, she could not do thereafter.
The case of Sofia and Salvador Aldon is different. After the death
of Maximo they acquired the right to question the defective
contract insofar as it deprived them of their hereditary rights in
their father's share in the lands. The father's share is one-half
(1/2) of the lands and their share is two-thirds (2/3) thereof, one-
third (1/3) pertaining to the widow.
The petitioners have been in possession of the lands since 1951.
It was only in 1976 when the respondents filed action to recover
the lands. In the meantime, Maximo Aldon died.
Two questions come to mind, namely: (1) Have the petitioners
acquired the lands by acquisitive prescription? (2) Is the right of
action of Sofia and Salvador Aldon barred by the statute of
limitations?
Anent the first question, We quote with approval the following
statement of the Court of Appeals:
We would like to state further that appellees
[petitioners herein] could not have acquired
ownership of the lots by prescription in view of
what we regard as their bad faith. This bad faith is
revealed by testimony to the effect that defendant-
appellee Vicente V. Felipe (son of appellees
Eduardo Felipe and Hermogena V. Felipe)
attempted in December 1970 to have Gimena
Almosara sign a ready-made document purporting
to self the disputed lots to the appellees. This
actuation clearly indicated that the appellees knew
the lots did not still belong to them, otherwise, why
were they interested in a document of sale in their
favor? Again why did Vicente V. Felipe tell
Gimena that the purpose of the document was to
 obtain Gimena's consent to the construction of an Escolin J., took no part.
irrigation pump on the lots in question? The only
possible reason for purporting to obtain such
consent is that the appellees knew the lots were
not theirs. Why was there an attempted
improvement (the irrigation tank) only in 1970?
Why was the declaration of property made only in
1974? Why were no attempts made to obtain the
husband's signature, despite the fact that Gimena
and Hermogena were close relatives? An these
indicate the bad faith of the appellees. Now then,
even if we were to consider appellees' possession
in bad faith as a possession in the concept of
owners, this possession at the earliest started in
1951, hence the period for extraordinary
prescription (30 years) had not yet lapsed when
the present action was instituted on April 26,
1976.

As to the second question, the children's cause of action accrued

from the death of their father in 1959 and they had thirty (30)
years to institute it (Art. 1141, Civil Code.) They filed action in
1976 which is well within the period.

WHEREFORE, the decision of the Court of Appeals is hereby

modified. Judgment is entered awarding to Sofia and Salvador
Aldon their shares of the lands as stated in the body of this
decision; and the petitioners as possessors in bad faith shall
make an accounting of the fruits corresponding to the share
aforementioned from 1959 and solidarity pay their value to Sofia
and Salvador Aldon; costs against the petitioners.

SO ORDERED.

Concepcion Jr., Guerrero and De Castro, JJ., concur.

Makasiar, (Chairman), J., In the result.

G.R. No. L-55076 September 21, 1987
MATILDE S. PALICTE, petitioner,
vs.
HON. JOSE O. RAMOLETE as Presiding Judge of Court of
First Instance of Cebu, Branch III, and MARCELO SOTTO,
Administrator, respondents.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari of the order of the then
Court of First Instance of Cebu declaring the deed of redemption
executed for the petitioner null and void and denying the
petitioner's motion that the Registrar of Deeds of the City of Cebu
be directed to transfer the Owner's Duplicate Certificates of Title
to Lot Nos. 1049, 1051, and 1052 from Filemon Sotto to her and
to issue a new Owner's Duplicate Certificate of Title to Lot 2179-C
in her name.
On July 5, 1979, a sale at public auction was held pursuant to a
writ of execution issued on February 5, 1979 by the respondent
judge and to a court order dated June 4, 1979 in the case of Pilar
Teves, et al. vs Marcelo Sotto, Administrator, Civil Case No. R-
10027, for the satisfaction of judgment in the amount of
P725,270.00.
The following properties belonging to the late Don Filemon Sotto
and administered by respondent Marcelo Sotto were levied upon:
1. Parcel of land on Lot No. 1049, covered by TCT
No. 27640 of the Banilad Friar Lands Estate,
Cebu City;
2. Parcel of land on Lot No. 1052, covered by TCT
No. 27642 of the Banilad Friar Lands Estate,
Cebu City;
3. Parcel of land on Lot No. 1051,covered by TCT
No. 27641 of the Banilad Friad Lands Estate,
Cebu City;
4. Parcel of land on Lot No. 5253 of the Cebu
Cadastre, Cebu City, covered by TCT No. 27639;
5. Parcel of land situated at Mantalongon,
Dalaguete, Cebu, covered by TD No. 010661,
with an area of 76-708; (sic)
6. Parcel of land on Lot No. 4839 of the Upon
Cadastre, at Barrio Sa-ac Mactan Island, with an
area of Forty Four Thousand Six Hundred Forty
Four (44,644) square meters more or less;
7. Residential House of strong materials, situated
on a Government lot at Lahug, Cebu City;
8. Residential House of strong materials, situated
at Central, Cebu City. " (Rollo, p. 40)
Seven of the above-described properties were awarded to Pilar
Teves, who alone bid for them for the amount of P217,300.00.
The residential house situated on a government lot at Lahug,
Cebu City, was awarded to lone bidder Asuncion Villarante for the
amount of P10,000.00.
Within the period for redemption, petitioner Matilde S. Palicte, as
one of the heirs of the late Don Filemon Sotto, redeemed from
purchaser Pilar Teves, four (4) lots for the sum of P60,000.00.
A deed of redemption dated July 29, 1980, executed by Deputy ruled that the deed of redemption is null and void. The motion of
Provincial Sheriff Felipe V. Belandres and approved by the Clerk Palicte was denied.
of Court, Esperanza Garcia as Ex-Officio Sheriff, was issued for
these lots: Hence, the present petition.

1. A parcel of land or Lot No. 2179-C-PDI-25027
Cebu Cadastre, Cebu City, bid at P20,000.00;
2. A parcel of land or Lot No. 1052, covered by
TCT No. 27642, of the Banilad Friar Lands Estate,
Cebu City, bid at P15,000.00;
3. A parcel of land or Lot No.1051,covered by
TCT No. 27641, of the Banilad Friar Lands Estate,
Cebu City, at P5,000.00;
4. A parcel of land or Lot No. 1049, covered by
TCT No. 27640, of the Banilad Friar Lands Estate,
Cebu City, at P20,000.00. (Rollo, p. 42)
The petitioner raises the following assignment of errors:
A
RESPONDENT JUDGE ERRED IN RULING
THAT THE JUDGMENT DEBTOR ENTITLED TO
REDEEM UNDER SECTION 29(a), RULE 39 OF
THE REVISED RULES OF COURT REAL
PROPERTY SOLD ON EXECUTION AGAINST
THE ESTATE OF THE DECEDENT IS ONLY
THE ADMINISTRATOR OF THE ESTATE, OR
HIS SUCCESSOR-IN-INTEREST.
B

On July 24, 1980, petitioner Palicte filed a motion with respondent RESPONDENT JUDGE ERRED IN RULING
Judge Ramolete for the transfer to her name of the titles to the THAT PETITIONER, WHO IS A DECLARED
four (4) parcels of land covered by the deed of redemption. HEIR OF THE DECEDENT, IS NOT THE
JUDGMENT DEBTOR NOR DOES SHE
This motion was opposed by the plaintiffs in Civil Case No. R- QUALIFY AS A SUCCESSOR-IN-INTEREST OF
10027, entitled "Pilar Teves, et al. vs Marcelo Sotto, THE ADMINISTRATOR OF THE ESTATE
administrator" on several grounds, principal among which, is that ENTITLED TO RIGHT OF REDEMPTION
movant, Palicte, is not one of those authorized to redeem under UNDER SECTION 29(a), RULE 39 OF THE
the provisions of the Rules of Court. RULES OF COURT.

A hearing on the said motion, with both parties adducing C

evidence was held.
RESPONDENT JUDGE ERRED IN RULING
The lower court held that although Palicte is one of the declared THAT ALTHOUGH PETITIONER IS A
heirs in Spl. Proc. No. 2706-R, she does not qualify as a DECLARED HEIR OF THE DECEDENT, HER
successor-in-interest who may redeem the real properties sold. It RIGHT TO THE ESTATE, LIKE THAT OF
REDEMPTION OF CERTAIN ESTATE
 PROPERTY, COULD ONLY ARISE AFTER
DISTRIBUTION OF THE ESTATE AS THERE IS
STILL JUDGMENT DEBT CHARGEABLE
AGAINST THE ESTATE.
D Magno vs Viola and Sotto (61 Phil. 80, 84-85) states that:
RESPONDENT JUDGE ERRED IN RULING
THAT PETITIONER'S REDEMPTION OF FOUR
(4) PARCELS OF LAND OF THE ESTATE OF
THE DECEDENT SOLD ON EXECUTION OF
JUDGMENT AGAINST THE ESTATE IS NULL
AND VOID AND INEFFECTIVE. (Rollo, pp. 17-
18)
These assigned errors center on whether or not petitioner Palicte
may validly exercise the right of redemption under Sec. 29, Rule
39 of the Rules of Court.
We answer in the affirmative. Sec. 29 of Rule 39 provides:
SEC. 29. Who may redeem real property so sold.
— Real property sold as provided in the last
preceding section, or any part thereof sold
separately, may be redeemed in the manner
hereinafter provided, by the following persons:
(a) The judgment debtor, or his successor in
interest in the whole or any part of the property;
(b) A creditor having a lien by attachment,
judgment or mortgage on the property sold, or on
some part thereof, subsequent to the judgment
under which the property was sold. Such
redeeming creditor is termed a redemptioner.
Under Subsection (a), property sold subject to redemption may
be redeemed by the judgment debtor or his successor-in-interest
in the whole or any part of the property. Does Matilde Palicte fall
within the term "successor-in-interest"?
The rule is that the term "successor-in-interest"
includes one to whom the debtor has transferred
his statutory right of redemption (Big Sespe Oil
Co. vs Cochran, 276 Fed., 216, 223); one to
whom the debtor has conveyed his interest in the
property for the purpose of redemption (Southern
California Lumber Co. vs. McDowell, 105 Cal, 99;
38 Pac., 627; Simpson vs. Castle, 52 Cal., 644;
Schumacher vs. Langford, 20 Cal. App., 61; 127
Pac., 1057); one who succeeds to the interest of
the debtor by operation of law (XI McKinney's
California Jurisprudence, 99); one or more joint
debtors who were joint owners of the property
sold (Emerson vs. Yosemite Gold Min. etc. Co.,
149 Cal., 50; 85 Pac., 122); the wife as regards
her husband's homestead by reason of the fact
that some portion of her husband' title passes to
her (Hefner vs. Urton, 71 Cal., 479; 12 Pac., 486).
This court has held that a surety can not redeem
the property of the principal sold on execution
because the surety, by paying the debt of the
principal, stands in the place of the creditor, not of
the debtor, and consequently is not a successor in
interest in the property. (G. Urruitia & Co. vs.
Moreno and Reyes, 28 Phil., 260, 268).
(Emphasis supplied).
In the case at bar, petitioner Palicte is the daughter of the late
Don Filemon Sotto whose estate was levied upon on execution to
satisfy the money judgment against it. She is one of the declared
heirs in Special Proceeding No. 2706-R. As a legitimate heir, she
qualifies as a successor-in- interest.
Art. 777 of the Civil Code states that:
The rights to the succession are transmitted from
the moment of the death of the decedent.
At the moment of the decedent's death, the heirs start to own the
property, subject to the decedent's liabilities. In fact, they may
dispose of the same even while the property is under
administration. (Barretto vs. Tuason, 59 Phil. 845; Jakosalem vs.
Rafols, 73 Phil. 628). If the heirs may dispose of their shares in
the decedent's property even while it is under administration. With
more reason should the heirs be allowed to redeem redeemable
properties despite the presence of an administrator.
The respondents contend that the petitioner must positively prove
that the three other co-heirs, the administrator, and the intestate
court had expressly agreed to the redemption of the disputed
parcels of land. We see no need for such prior approval. While it
may have been desirable, it is not indispensable under the
circumstances of this case. What is important is that all of them
acquiesced in the act of redeeming property for the estate. The
petitioner contends that the administrator and the three other
heirs agreed to the redemption. There is, however. no clear proof
of such approval. What is beyond dispute from the records is that
they did not disapprove nor reprobate the acts of the petitioner.
There is likewise nothing in the records to indicate that the
redemption was not beneficial to the estate of Don Filemon
Sotto.
It may be true that the interest of a specific heir is not yet fixed
and determinate pending the order of distribution but,
nonetheless, the heir's interest in the preservation of the estate
and the recovery of its properties is greater than anybody else's,
definitely more than the administrator's who merely holds it for the
creditors, the heirs, and the legatees.
The petitioner cites precedents where persons with inchoate or
contingent interest were allowed to exercise the right of
redemption as "successors-in-interest," e.g. Director of Lands vs.
Lagniton (103 Phil. 889, 892) where a son redeemed the property
of his parents sold on execution and Rosete vs. Provincial Sheriff
of Zambales (95 Phil. 560, 564), where a wife by virtue of what
the Court called "inchoate right of dower or contingent interest"
redeemed a homestead as successor-in-interest of her husband.
In fact, the Court was explicit in Lagniton that:
... The right of a son, with respect to the property
of a father or mother, is also an inchoate or
contingent interest, because upon the death of the
father or the mother or both, he will have a right to
inherit said conjugal property. If any holder of an
inchoate interest is a successor in interest with
right to redeem a property sold on execution, then
the son is such a successor in interest, as he has
an inchoate right to the property of his father.
The lower court, therefore, erred in considering the person of the
administrator as the judgment debtor and as the only "successor-
in-interest." The estate of the deceased is the judgment debtor
and the heirs who will eventually acquire that estate should not be
prohibited from doing their share in its preservation.
Although petitioner Palicte validly redeemed the properties, her
motion to transfer the titles of the four (4) parcels of land covered
by the Deed of Redemption from registration in the name of
Filemon Sotto to her name cannot prosper at this time.
Otherwise, to allow such transfer of title would amount to a
distribution of the estate.
As held in the case of Philippine Commercial and Industrial Bank
vs. Escolin (56 SCRA 267, 345- 346):
Indeed, the law on the matter is specific,
categorical and unequivocal. Section 1 of Rule 90
provides:
SECTION 1. When order for distribution of
residue made. — When the debts, funeral
charges, and expenses of administration, the
allowance to the widow, and inheritance tax, if
any, chargeable to the estate in accordance with
law, have been paid, the court, on the application
of the executor or administrator, or of a person
interested in the estate, and after hearing upon
notice, shall assign the residue of the estate to the
persons entitled to the same, naming them and
the proportions, or parts, to which each is entitled,
and such persons may demand and recover their
respective shares from the executor or
administrator, or any other person having the
same in his possession. If there is a controversy
before the court as to who are the lawful heirs of
the deceased person or as to the distributive
shares to which each person is entitled under the
law, the controversy shall be heard and decided
as in ordinary cases.
No distribution shall be allowed until the payment
of the obligations above mentioned has been
made or provided for, unless the distributees, or
any of them, give a bond, in a sum to be fixed by
the court, conditioned for the payment of said
obligations within such time as the court directs.
These provisions cannot mean anything less than
that in order that a proceeding for the settlement
of the estate of a deceased may be deemed ready
for final closure, (1) there should have been
issued already an order of distribution or
assignment of the estate of the decedent among
or to those entitled thereto by will or by law, but
(2) such order shall not be issued until after it is
shown that the "debts, funeral expenses,
expenses of administration, allowances, taxes,
etc., chargeable to the estate" have been paid,
which is but logical and proper, (3) besides, such
an order is usually issued upon proper and
specific application for the purpose of the
interested party or parties, and not of the court."
The other heirs are, therefore, given a six months period to join
as co-redemptioners in the redemption made by the petitioner
before the motion to transfer titles to the latter's name may be
granted.
WHEREFORE, the petition is hereby GRANTED. The respondent
court's orders declaring the deed of redemption null and void and
denying the motion to transfer title over the redeemed properties
to Matilda Palicte are REVERSED and SET ASIDE, subject to the
right of the other heirs to join in the redemption as stated above.
SO ORDERED.
G.R. No. 109979 March 11, 1999
RICARDO C. SILVERIO, SR., petitioner,
vs.
COURT OF APPEALS, SPECIAL SEVENTH DIVISION, HON.
FRANCISCO X. VELEZ, Presiding Judge, RTC, Makati,
Branch 57 and EDGARDO S. SILVERIO, respondents.
PURISIMA, J.:
At bar is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court seeking the reversal of the Decision 1 of the Court
of Appeals (Special Seventh Division) 2 dated January 20, 1993 in
CA GR SP No. 29038.
On November 12, 1990, or more than three (3) years from the
death of the deceased, Edgardo Silverio filed a Petition for Letters
of Administration with Branch 57, of the Regional Trial Court in
Makati City. On November 28, 1990, he filed an Urgent Petition
for Appointment of Special Administrator, alleging that during her
marriage with Ricardo Silverio, the deceased acquired real and
personal properties in the Philippines and outside the country, the
character, identity and aggregate value of which are still
undetermined and not known to petitioner except the personal
properties estimated to be worth P1,000,000.00; that during the
lifetime of the late Beatriz Silverio, the surviving spouse has not
made any settlement, judicial or extrajudicial, of the properties of
the deceased; that their surviving son, Ricardo Silverio, Jr., has
taken control and management of the properties left by the
deceased for his own benefit and advantage; that petitioner, one
of the legal heirs of the deceased, is competent and willing to act
as administrator.

On October 7, 1987, Beatriz Silverio died without leaving any will
in the Municipality of Makati, Metro Manila, she was survived by
the legal heirs, namely:
NAMES
RELATION
1. Ricardo Silverio Husband
2. Edmundo Silverio Son
3. Edgardo Silverio Son
4. Ricardo Silverio, Jr. Son
5. Nelia Silverio Daughter
On December 4, 1990, the respondent judge issued an Order to
the following effect:
WHEREFORE, notice is hereby given that said
Petition is set for hearing on January 24, 1991 at
8:30 o'clock in the morning, at which date and
time, all interested parties are hereby cited to
appear and show cause if any they have, why
said Petition should not be granted.
Let this Order be published at the expense of the
Petitioner, once a week for three (3) consecutive
weeks in a newspaper of general circulation, the
publication of which is to be assigned to the
newspaper chosen after the raffle conducted by
the Executive Judge of this Court.

6. Ligaya S. dela Merced Likewise, let this Order and the Petition be posted
Daughter 3 at least two (2) weeks before hearing by the
Branch Sheriff at petitioner's expense in the
 Bulletin Board of the Clerk of Court of Makati,
Metro Manila, Municipal Building and Public
Market of Makati, Metro Manila.
Let copies of this Order be sent by registered mail
to all the surviving heirs of the late BEATRIZ
SILVERIO mentioned above. 4
On December 17, 1990, respondent Judge Francisco X. Velez of
Branch 57, Regional Trial Court, Makati City, issued the following
Order appointing Edgardo Silverio as Special Administrator.
WHEREFORE, EDGARDO SILVERIO is hereby
appointed as Special Administrator pending
appointment of a Regular Administrator and the
Branch Clerk of this Court is hereby
commissioned to administer the oath of
EDGARDO SILVERIO. 5
On January 24, 1991, Ricardo Silverio, Sr. interposed his
Opposition to the Petition for Letters of Administration.
On February 21, 1997, the private respondent testified or his
behalf and was cross-examined on October 7, 1991.
The reception of evidence for petitioner was scheduled on
October 25 and 28, 1991. However, on October 22, 1991, the
petitioner filed an Urgent Motion to Transfer the Hearing to any
day during the last week of November or first week of December
1991 because he had a settlement conference in the case
against Land Use Development Corporation at Department 8 of
the Superior Court of Contra Cost Country at 725, Court Street,
Martinez, California, in Case No. C-105-025, entitled Silicor
USA, Inc. vs. Kraft Developers, Incorporated, et al.
On October 28, 1991, the trial judge declared that the failure of
petitioner to appear and adduce evidence on his behalf amounted
to a waiver of his right to present evidence; ratiocinating, thus:
When this case was called for hearing today for
the start of the reception of the evidence for the
Oppositor, Ricardo Silverio, Sr., counsel for the
said Oppositor instead invited the attention of this
Court to this URGENT, MOTION FOR
TRANSFER OF HEARING dated October 21,
1991 and pointed out to this Court that the said
motion was also intended to postpone the hearing
set for today. For his part, petitioner's counsel
thereupon reiterated his vehement objection to
another postponement, pointing out that
eventhough the said oppositor filed his
OPPOSITION herein as early as January 1991,
yet the said Oppositor never has appeared
personally nor exerted any effort to prosecute his
Opposition and has instead, employed all means
to postpone or otherwise defer the reception of his
evidence, even after the herein petitioner had
been designated by this Court as Special
Administrator (see our Order of December 17,
1990). Petition's counsel also pointed out that the
opposing counsel is aware that he resides in
Sydney, Australia and incurs substantial expenses
everytime he comes to the Philippines for the
hearing of this case, and then only to be faced by
a postponement sought each time by the
oppositor's counsel.
This Court recalls the setting of this case on
October 25 and 28, 1991 were fixed after the
oppositor's counsel assured this Court that the
oppositor would return from the United States for
this purpose. Yet again, we are now confronted
with another effort of the oppositor to postpone
 the hearing of this case, despite the petitioner's
own open court motion to consider the oppositor
as having waived his right to adduce evidence in
support of his petition. Since there is no indication
whatever that the oppositor is serious in his
opposition, other than the assurances of his
counsel which have all turned out to be false
inasmuch as the oppositor has never appeared as
promised since January of this year, thereby
resulting in the undue delay bereft of any progress
in this present case, the court hereby to consider
the failure of the Oppositor Ricardo Silverio, Sr. to
appear or present evidence in his behalf as a
waiver of his right to present evidence in support
of his opposition. 6
On October 29, 1991, the respondent judge appointed the private
respondent as regular administrator in an Order stating:
WHEREFORE, EDGARDO SILVEREO is hereby
appointed as regular ADMINISTRATOR of the
Intestate Estate of the late Beatriz Silverio to
serve with a P200,000.00 bond. He is hereby
required to take possession and management of
all the real and personal estate of the deceased
and shall return to this Court a true inventory and
appraisal of all the properties of the deceased
which shall come into his possession and
knowledge within three (3) months from date
thereof. 7
xxx xxx xxx
On November 19, 1991, the Oppositor presented an Omnibus
Motion to transfer the hearing set on June 4, 1992 on the ground
that oppositor movant was preoccupied with a) post-election
matters and b) preparation for his assumption of office as
Congressman for the Third District of Bulacan, but the said
motion was denied on June 4, 1992, respondent Judge ruling, as
follows:
In response thereto, the petitioner's counsel
registered his vehement objections to the
postponement, first upon the ground that the
excuse given in the said motion is not a valid
ground for the cancellation of hearing.
Furthermore, according to petitioner's counsel, the
hearing today was set as a result of a joint
agreement of the contending counsels arrived in
open Court during the last hearing on Feb. 5,
1991 and that said petitioner's counsel was not
given ample time to react thereto because the
said motion was filed only last June 1, 1992 and
the said petitioner's counsel has not even
received yet a copy thereof. Moreover, petitioner's
counsel likewise recalled to the Court that he
agreed to postpone his cross-examination of the
Oppositor during the last hearing of this case
upon the declared agreement for its resumption
set for today. Lastly, petitioner's counsel
complains that both the respondent and his
counsel are aware of the fact that petitioner's
counsel is domiciled in Sydney, Australia and it
has cost a lot of time, effort and money for the
said petitioner's counsel to travel to the
Philippines in order to be present in court today,
and only to find out that both Oppositor and his
counsel have not appeared. As correctly
concluded by the petitioner's counsel, the
Oppositor and his counsel have no legal ground to
presume that their motion for transfer of hearing
will be approved by this Court. 8
So also, on August 17, 1992, the respondent judge denied the
Motion for Reconsideration filed by the petitioner on June 29,
1992.
On September 23, 1992, Ricardo C. Silverio Sr. filed a Petition showing that said respondent has acted with
for Certiorari with Prayer for a Writ of Preliminary Injunction, grave abuse of discretion, amounting to lack or in
Prohibition and/or Restraining Order with the Court of Appeals excess of jurisdiction in Civil Case No. 11-9146.
docketed as CA GR SP No. 29038, seeking to annul and set When private respondent filed the said civil case,
aside the following orders of the respondent judge, to wit: he had been appointed as special administrator
by respondent Judge Velez of Branch 57 of the
a) Order dated same court in Sp. Proc M-2629. . . .
December 17,
1990 appointing Secondly, petitioner is estopped by laches from
questioning the validity of the Order December 17,
Private 1990 appointing private respondent as special
Respondent as administrator considering that he participated in
Special the subsequent proceedings without assailing said
Administrator; order in due time.

b) Order dated xxx xxx xxx

October 28, 1991;
. . . The petition failed to show that respondent
c) Order dated Judge was whimsical or capricious in issuing said
October 29, 1991 orders. It is evident from said orders that the
appointing Private herein petitioner has not been true to his
Respondent as assurance that he will be present the next hearing
Regular agreed upon by the parties. . . .
Administrator;
xxx xxx xxx
d) Order dated
June 4, 1992; The rule is clear and unequivocal. It does not
provide that the surviving spouse takes
e) Order dated precedence exclusive of and over all other heirs of
August 17, 1992. 9 the deceased in the appointment of the
administrator. . . .
On January 20, 1993, the respondent court dismissed for lack of
merit the petition for certiorari, pursuant to Section 2(c), Rule 6 of Lastly, . . . If at all an error is committed by
the Revised Internal of the Court of Appeals, ratiocinating thus: respondent Judge Velez, it is an error of judgment
that is correctible only by appeal. Errors of
First of all, with respect to respondent Judge judgment are not within the province of a special
Benito of Branch 152, RTC of Makati, there is no civil action for certiorari (Purefoods Corp vs.
 NLRC 171 SCRA 475) Petitioner made mention of
an appeal brought by him to this Court but a
verification from the Judicial Records Division
does not show that an appeal from the orders
appointing private respondent as regular and
denying petitioner's motion for reconsideration
has been perfected. . . . 10
On April 27, 1993, respondent court denied the motion for
reconsideration of its Decision dated February 8, 1993.
Undaunted, petitioner found his way to this Court via the present
petition for review on certiorari, contending that:
I administrator of the intestate estate of the
RESPONDENT COURT COMMITTED GRAVE
ABUSE OF DISCRETION IN HOLDING THAT
PETITIONER WAS NOT DENIED DUE
PROCESS OF LAW.
II
RESPONDENT COURT ERRED IN ITS
INTERPRETATION THAT SECTION 6, RULE
78 11 OF THE REVISED RULES OF COURT
DOES NOT PROVIDE FOR AN ORDER OF
PREFERENCE IN THE APPOINTMENT OF THE
ADMINISTRATOR.
III
RESPONDENT COURT ERRED IN NOT RULING
THAT PRIVATE RESPONDENT HAS NOT
SATISFACTORY ESTABLISHED BY AT LEAST
AN IOTA OF PROOF THAT HE IS QUALIFIED
AND COMPETENT TO ACT AS
ADMINISTRATOR. 12
On July 26, 1993, the private respondent sent in a Comment,
stating as follows:
Another cognate reason that militates against the
appointment of petitioner as administrator, is his
utter failure to show that he is a fit and proper
person to discharge the duties of an administrator.
The conduct of the petitioner in relation to the
management of the assets of the conjugal
partnership between petitioner and the deceased
spouse betrays his moral fitness to act as
decedent. Petitioner was not only cheating on his
wife by maintaining illicit relationship with another
woman. He was also at the same time
systematically stripping assets of their conjugal
partnership then under his administration.
During the period covering June, 1965, June 1971
and February, 1974 the petitioner, acting in his
capacity as administrator/trustee of the conjugal
partnership between him and his wife Beatriz S.
Silverio, and using funds of said conjugal
partnership, purchased three (3) properties
situated at North Forbes, Makati, Metro Manila,
Old Forbes, Makati, Metro Manila, and Bel Air,
Makati, Metro Manila. In breach of his fiduciary
duty as administrator of the said conjugal
partnership, and without the knowledge and
consent of his wife Beatriz, petitioner fraudulently
and surreptitiously caused the said properties to
be registered in the names of three (3) illegitimate
children with his mistress Carmen Zuniga, in order
to place said properties beyond the reach of his
lawful wife Beatriz Silverio.
To deprive further his legitimate wife of her lawful
share in, the conjugal assets, petitioner removed
assets of the conjugal partnership from the
Philippines and invested them in California, U.S.A.
under either his name and/or corporation, to the
exclusion of his legal wife. Thus, having stripped
the conjugal partnership of assets, no reasonable
mind can perceive the petitioner, as administrator,
bringing suit against himself for the recovery of
those assets of the conjugal partnership, which he
had fraudulently removed and concealed for his
own benefit and advantage.
In the meantime, private respondent, as
administrator, had already succeeded in
identifying four (4) valuable real properties
belonging to the conjugal partnership of petitioner
and the deceased Beatriz S. Silverio. Suits have
been commenced for the recovery of said
properties from the present registered owners
holding the same for petitioner. . . . Amended
Complaint filed by the private respondent, as
administrator of the intestate estate of the late
Beatriz S. Silverio, against petitioner Ricardo C.
Silverio, Sr. and his alter ego Pilipinas
Development Corporation, docketed as Civil Case
No. 91-1146 RTC Makati. . . . Amended
Complaint-in-intervention filed by the private
respondent herein, as administrator, against
petitioner Ricardo C. Silverio, Sr. and his three (3)
illegitimate children with Carmen Zuniga,
docketed as Civil Case No. 17467, RTC Makati,
for the recovery of three (3) valuable real
properties placed by petitioner in the names of his
illegitimate children.
xxx xxx xxx
Aside from the conflict of interest, the moral
reputation and integrity of petitioner is dubious- if
not totally wanting, as evidenced by the news item
in the Philippine Daily Inquirer last April 23, 1991,
which reported that the Supreme Court upheld
action taken by a Cebu Judge to cancel the
bailbond of businessman Ricardo C. Silverio, Sr.,
who had allegedly delayed the resolution of tax
evasion charges filed against him. . . .
xxx xxx xxx
In sheer desperation to oust private respondent as
administrator of the intestate estate of the late
Beatriz S. Silverio, petitioner's counsel, with a
measure of haughtiness unworthy of his
professional calling, embarked in character
assassination by wilfully (sic) and unlawfully
labeling the private respondent as a greedy and
avaricious person, and fabricating an alleged
unholy alliance among the private respondent,
Biomega Corporation, and creditors of petitioners
and Delta Motor Corporation. Petitioner
meticulously alleges that "respondent through
Biomega Corporation with offices at No. 384 E.
Rodriguez Avenue, Cubao, Quezon City, offered
their services to collect whatever claims Toyota
Motor Corporation has with Delta Motor
Corporation and advised Toyota Motor
Corporation that they had definite information
concerning assets pertaining to Delta Motor
Corporation and the petitioner, both in the
Philippines and overseas that are held in the
names of third parties."
xxx xxx xxx
 In resorting to character assassination, the motive
of petitioner is highly suspicious. Firstly, private
respondent was never a subscriber, director, or
officer of any entity known as Biomega
Corporation; secondly, verification with the
Securities and Exchange Commission discloses
that Biomega Corporation is non-existent; thirdly,
it is unthinkable that a letter supposedly
addressed to a certain Masao Mitake, President of
Toyota Motor Philippines, Inc., would be sent to
Atty. Marcelo P. Villanueva; and lastly, the interest
of Delta Motor Corporation is totally separate and
distinct from that of the intestate estate of the late
Beatriz S. Silverio, so much so that even granting
for argument's sake that private respondent
proposes to act in behalf of Toyota Motor
Corporation to recover its claims against Delta
Motor Corporation, such actuation has no bearing
or relevance to the administration of the intestate
estate of the late Beatriz S. Silverio. . . . 13
On August 18, 1993, Ricardo C. Silverio, Sr. filed a Reply
alleging, among others:
Private respondent attached in his Comment a
news clipping from the Philippine Daily Inquirer
dated April 23, 1991 . . . wherein it was reported
that "In a decision the tribunal upheld the action
taken by a Cebu Judge to cancel the bail bond of
businessman Ricardo Silverio, Sr., who had
allegedly delayed the resolution of the tax evasion
charges filed against him during the Marcos
regime due to frequent trips abroad". Private
respondent has been capitalizing on this alleged
"tax evasion charges". The case referred to is
Crim. Case No. CBU-6304 entitled "People of the
Phils. vs. Ricardo C. Silverio, Sr., et al" for
violation of Securities Act and not for tax evasion.
Petitioner in the said case was charged together
with some officers of Philippine Underwriters and
Finance Corporation in his capacity as Chairman
of the Board of the defunct financing company.
The case is still pending in the sala of Judge
Ramon Gaviola of Cebu where Petitioner herein
has filed a Demurrer to the Evidence. Petitioner
has since then been given clearance to travel.
xxx xxx xxx
Private Respondent does not have the business
acumen that his stepfather has. It is of public
knowledge that Petitioner has built a business
empire from car assembly to appliance
manufacturing banking and finance, to shipping
and mining and real estate.
Private respondent endeavored to show conflict of
interest which are merely gratuitous allegations.
xxx xxx xxx 14
On September 7, 1993, the petitioner presented a Supplemental
Reply to the Comment. Attached thereto was the Information in
Criminal Case No. CBU-6394, entitled: "People of the Philippines
vs. Ricardo Silverio, Sr., Hermilo Rodis, Sr., Edgar Quinto, Ruben
Rodis, Jose A.M. Flores and Douglas San Diego; "For Violation of
Section 20(4) of the Revised Securities Act".
In his Rejoinder dated October 13, 1993, private respondent
asserted that:
In the t instant case, petitioner gratuitously
concludes that he can no longer avail of the
remedy provided for by Section 2, Rule 82 of the
Rules of Court "because the appeal had been
perfected and respondent Judge has lost
jurisdiction over the case.
With respect, it is submitted that such conclusion
is unwarranted and completely erroneous. The
mere perfection of an appeal from an Order
appointing a regular administrator does not
deprive the intestate court of jurisdiction to
entertain application for removal of an
administrator pursuant to Section 2, Rule 82 of the
Rules of Court. An appeal from said Order does
not stay the implementation thereof, especially
where administrator appointed has taken his oath
and commenced to discharge the duties of his
office as such. Hence, the original record of the
case remains with the intestate court, so that the
intestate court may deal with other matters related
to the administration of the estate of the
deceased.
xxx xxx xxx
In any event, there is nothing on record to show
that petitioner was indeed preoccupied with his
alleged legal struggle in the U.S. over the
administration of the estate of the deceased in the
United States. Besides, the existence of any legal
contest between petitioner and his son, Ricardo S.
Silverio, Jr., in the United States, is not a legal
impediment to the filing of the proper petition for
letters of administration over the estate of the
deceased spouse in the proper courts of the
Philippines.
Anent the allegation that private respondent has
not presented up to now any evidence that
petitioner was not only cheating on his wife by
maintaining illicit marital relationship with another
woman, and systematically stripping assets of
their conjugal partnership then under
administration, the Court may please take judicial
notice that in Civil Case No. 17467 of the
Regional Trial Court, Makati, Metro Manila,
entitled "Edgardo S. Silverio, as special
administrator of the intestate estate of the
late BEATRIZ S. SILVERIO vs. Maria Rowena
Z. Silverio De Los Reyes, Ricardo C.
Silverio, Sr., et al., petitioner candidly admitted
that during the lifetime of his legal wife Beatriz
Silverio, he was cohabiting with a certain Carmen
Zuniga with whom he has three (3) children,
namely, Maria Rowena Z. Silverio, Maria Roxanne
Z. Silverio, and Ricardo Z. Silverio III. Petitioner
also admitted in said civil case that he purchased
three (3) valuable real properties in Cambridge
Circle, North Forbes, Intsia Street, Old Forbes,
and Taurus Street, Bel Air, all in Makati, Metro
Manila, and placed said properties in the names
of his three (3) illegitimate children.
. . . Be that as it may, is (sic) a person charged of
violation of the Securities Act morally forthright
and honest? The Court may please take judicial
notice that many investors of Philfinance, Inc., a
corporation of which petitioner is either a
stockholders, (sic) directors, (sic) and/or officers,
(sic) lost their lifesavings as a result of the serious
breach of the Securities Act by the officers of said
corporation.
. . . But this imaginary business acumen of the
petitioner is not enough to warrant his
appointment as administrator of the estate of his
deceased spouse, for it is also of public
knowledge that petitioner built his business
empire during the time his crony, Ferdinand
Marcos, was President of the Philippines. As well,
it is also of public knowledge that petitioner
succeeded in managing his companies into
bankruptcy, so much so that none of the alleged
businesses built by petitioner is presently
operating.
xxx xxx xxx
More significantly, the private respondent has
demonstrated his competence and fitness as
administrator of the intestate estate of the late
Beatriz Silverio. Just recently, the private
respondent has obtained a judgment in Civil Case
No. 1746 of the Regional Trial Court, Makati,
Metro Manila, entitled "Edgardo S. Silverio, etc. vs
Ricardo C. Silverio, Sr., et al.," whereby the
defendants were ordered to reconvey the three (3)
real properties placed by petitioner in the names
of his illegitimate children to the conjugal
partnership of petitioner and the late Betriz S.
Silverio. Petitioner received a copy of said
decision, through the counsel, on 31 August 1993,
and no appeal has been taken therefrom by
petitioner notwithstanding the lapse of the period
for perfecting an appeal. . . .
. . . there are indications that the letters addressed
to Mr. Masao Mitake and Toyota Motor
Corporation, Tokyo, Japan, are fabricated,
particularly the transmission thereof to petitioners
counsel. The Honorable Court may please take
note that it takes the fastest facsimile machine
(GROUP III) at least one (1) minute to transmit
one (1) page of a document. Yet, as indicated in
the notation on each of the letters allegedly
received by petitioner's counsel, each letter bears
the notation "10/03/91 at 14.24" indicating that all
the three letters were sent at 14:25 or 2:25 pm,
which is physically impossible. 15
On November 4, 1993, the petitioner filed a Respectful
Manifestation as regards the order of acquittal in Crim. Case No.
CBU-6304 for violation of the Securities Act and not for tax
evasion issued by Hon. Judge Benigno Gaviola of Branch 9,
Regional Trial Court, Cebu City. 16
On June 28, 1996, petitioner filed a Respectful Urgent
Manifestation and Motion for the Issuance of a Temporary
Restraining Order and/or Early Resolution, alleging:
4. That on April 22, 1996, Petitioner received
through the undersigned counsel a "Petition To
Allow Claim Against the Estate and For
Annotation of Attorney's Lien filed by Atty. Cesar
P. Uy, counsel of Private Respondent Edgardo S.
Silverio. In this Petition, Counsel of Private
Respondent Edgardo S. Silverio claims that he is
entitled to Thirty three and one-third (33 1/3%)
percent of the fair market value of the properties
he allegedly recovered for the estate of Beatriz S.
Silverio as Intervenor in Civil Case No. 17467 of
the Regional Trial Court, Makati, Branch 143 as
his attorney's fees as counsel of the
"Administrator" Edgardo S. Silverio. Atty. Uy
estimated that the said properties have a total
value of P450,000,000.00, more or less. Not only
did Atty. Uy claim that Edgardo S. Silverio is the
"Administrator" but he also peremptorily changed
the caption of the case in Branch 57, RTC, Makati
from "Edgardo S. Silverio, Petitioner" to "Edgardo
S. Silverio, Administrator". . . .
. . . It is the respectful submission of the Petitioner
herein that Respondent Judge Francisco X. Velez,
whose Orders are being subject of review should
 wait for the Decision/Resolution of this Honorable
Supreme Court. . . .
xxx xxx xxx
8. . . . despite Petitioner's plea that Respondent
Judge should wait for the resolution/decision of
this Honorable Supreme Court as a matter of
judicial courtesy and respect to this Honorable
Supreme Court and not to pre-empt the decision
that might be rendered by this Honorable
Supreme Court in the above-entitled case,
Respondent Judge appears to have shown undue
interest in the case, bias and partiality towards.
Private Respondent Edgardo S. Silverio and his
counsel Atty. Cesar P. Uy.
xxx xxx xxx
10. That on the same date, June 21, 1996,
Petitioner herein filed a "Motion To Inhibit"
addressed to Respondent Judge for him to
voluntarily inhibit himself from hearing the
"PETITION TO ALLOW CLAIM AGAINST THE
ESTATE AND FOR ANNOTATION OF
ATTORNEY'S LIEN" and for presiding in the
SUBSEQUENT HEARINGS for the settlement of
the INTESTATE ESTATE OF THE LATE
BEATRIZ S. SILVERIO and that the case before
Respondent Judge be re-raffled for assignment to
another branch of the Regional Trial Court, Makati
City, in order to avoid any suspicion of bias,
partiality and/or prejudice and in the interest of
substantial justice. . . . 17
On July 10, 1996, Edgardo S. Silverio filed his Comment the said
motion for the issuance of a temporary retraining order, theorizing
that the relief sought by the petitioner should be threshed out in a
separate proceeding instead of cluttering the records of this case.
He added that according to Section 1(e), Rule 109 of the Revised
Rules of Court which provides that "no appeal shall be allowed
from the appointment of a special administrator", the Order
appointing a special administrator of a decedent could not be
stayed by a special civil action of certiorari, considering that such
order is usually issued as dictated by the urgent need of an
administrator to preserve the estate of the deceased person.
Anent Petitioner's Motion for Inhibition, private respondent placing
reliance on Sections 4 and 5 of Rule 15 of the Revised Rules of
Court and Philippine Virginia Tobacco Administration vs. De los
Angeles, G.R. No 27829, August 19, 1988, and Sembrano vs.
Ramirez, G.R. No. L-45447, September 28, 1988; maintains that
the same must be denied since it did not contain a notice of
hearing and was addressed to the Branch Clerk of Court and not
to the parties.
The allegation of bias or partiality without a recitation of facts
constituting the alleged bias or partiality is insufficient to disqualify
a judge or deny him the authority to proceed with the case and it
carries with it the insidious insinuation of malice on the part of the
respondent judge, highly offensive, disparaging, and clear insult
to the judicial officer without justifiable cause.
Meanwhile, on July 17, 1996, Edmundo S. Silverio, one of the
heirs, presented a Manifestation and Motion, contesting the
appointment of Edgardo S. Silverio as regular administrator
without his knowledge and consent and questioning why
publication was resorted to instead of personal notice for him to
timely object to the said appointment.
On August 19, 1996, Ricardo C. Silverio filed a Supplemental to
Respectful Urgent Manifestation and Motion for the Issuance of
the Temporary Restraining Order and/or Early Resolution, which
is the subject of the Order of the respondent judge, dated July 31,
1996, which reads:
 Accordingly, the Court hereby:
(1) approves the Agreement for Attorney's
Contingent Fee and allows the herein movant the
corresponding claim against the estate of the
deceased Beatriz S. Silverio equivalent to 33 1/3
percent of the fair market value of all the
properties recovered by the said petitioner's
counsel including the properties recovered in CV
17467 which originated from Br. 143 of the
Regional Trial Court of Makati;
(2) directs the Register of Deeds of Makati City to
annotate forthwith in the proper books of his office
and in the original copies of TCT Nos. (147129)
137156, (436570) 137155 and (36986) 337033 or
any other transfer certificate of titles issued in lieu
thereof the movant's claim of attorney's fees
equivalent to 33 1/3 percent of all recovery for the
estate of the late Beatriz S. Silverio; and
(3) authorizing and ordering the Administrator to
sell any and/or all of the aforesaid real properties
for such amount or amounts approximating their
fair market value and to pay out from the
proceeds of such sale the corresponding
attorney's fees of petitioner's counsel Atty. Cesar
P. Uy equivalent to 33 1/3 percent of the fair
market value of the fair market of the
aforementioned three properties recovered by
said petitioner's counsel for the benefit of the
intestate estate of Beatriz S. Silverio. 18
On October 10, 1996, Ricardo C. Silverio filed a Reply alleging
that:
In the aforesaid Order dated July 31, 1996,
respondent Judge Francisco X. Velez approved
the Agreement for Attorney's Contingent Fee
which was allegedly entered into by Atty. Cesar P.
Uy with private respondent on January 21, 1991
for his approval. This alleged agreement was not
previously submitted to respondent Judge
immediately after January 21, 1991 for his
approval. Neither were the heirs specially the
petitioner herein informed of the unconscionable
agreement which will give to Atty. Cesar P. Uy 33
1/3 percent of the estate to the prejudice of the
heirs. For the subject properties, which according
to Atty. Cesar P. Uy is estimated to have a fair
market value of P450,000,000.00, the latter claims
that he is entitled to 33 1/3 percent or
P150,000,000.00, much bigger than the share of
the petitioner who is a partner in the conjugal
properties and an heir expects to get. . . .
Even assuming arguendo that the appointment of
Edgardo Silverio as a special administrator was
valid and that his act of retaining Atty. Cesar P. Uy
as counsel for the subject estate for a contingent
fee of 33-1/3 % of any recovery was also valid,
the Order of July 31, 1996 nevertheless erred in
awarding to Atty. Cesar P. Uy a 33-1/3 % interest
in the three Makati real properties. The reason is
that Atty. Uy was retained only as counsel for the
subject estate and not for herein petitioner.
Petitioner herein was already represented by the
law firm of Quisumbing Torres and Evangelista in
Civil case No. 17467 where the three Makati
properties were recovered. The said law firm was
also representing the original plaintiff Nelia
Silverio Dee. Nelia Silverio Dee who was the first
to prosecute the cause of action to declare the
defendants holding title to the Makati properties in
trust for the conjugal partnership, and for
reconveyance thereof to the conjugal partnership.
...
xxx xxx xxx
Respondent judge has no power of authorize, the
private respondent Edgardo S. Silverio to sell the
conjugal partnership properties and even real
properties of the estate to pay the attorney's fees
of Atty. Cesar P. Uy. The Special Administrator
may only sell properties which are perishable and
personal properties not real properties in
pursuance of his responsibility to preserve the
estate and it is for the best interest of the estate.
A special administrator may be allowed to sell the
properties of the estate if the purpose is to
preserve the properties and its value but not
payment of debts. (Public Administrator vs.
Burdell, 4 Brad, Surr. (N.Y.) 252). The order of
respondent judge authorizing private respondent
to sell the subject properties or any portion thereof
to pay to pay (sic) alleged attorney's fees of Atty.
Cesar P. Uy in the estimated amount of
P150,000,000.00 is definitely a grave abuse of
judicial discretion amounting to lack of jurisdiction.
This is not preservation but dissipation of the
estate.
xxx xxx xxx
The properties which form part of the conjugal
assets and the estate were accumulated through
the efforts of petitioner and private respondent
must not be allowed to dilute the same to his
advantage and to the detriment of the other heirs
and therefore must be stopped. The interest of the
private respondent in the estate is only 1/8 as
against petitioner herein and the other heirs
supporting petitioner which is 7/8. Respondent
Judge did not consider these facts in all his
actuations.
xxx xxx xxx
. . . and that the motion is not a contentious and
litigious pleading. 19
The petition is devoid of merit.
To begin with, petitioner contends that he was denied due
process of law when the respondent judge considered his failure
to be present on October 28 and 29, 1991 and adduce evidence
on his behalf as a waiver of his right.
After a careful study, the Court is of the view, and so holds, that
contrary to petitioner's contention, the respondent judge did not
err in so ruling, as it is evident from the Decision of the
respondent court that the petitioner was not sincere in his own
motion made in open court to attend the scheduled hearings for
the reception of evidence.
Well settled to the point of being elementary is the doctrine that
the findings by the trial courts are binding on appellate courts and
will not be disturbed on appeal. After a thorough review and
examination of the evidence on hand, we discern no ground or
basis for disregarding the findings and conclusion arrived at by
the respondent judge.
xxx xxx xxx
 Factual findings of the trial court shall not be
disturbed on appeal unless the trial court has
overlooked or ignored some fact or circumstance
of sufficient weight or significance which, if
considered, would alter the situation. . . . (The
Heirs of Felicidad Canque, et al. v. Court of
Appeals, et al., 275 SCRA 741)
. . . applicable here, is the hornbook precept that
factual findings of the trial court, specially when
affirmed by the Court of Appeals, are deemed
final and conclusive by this Court when supported
by substantial evidence. (Ugddan v. Court of
Appeals, et al., 275 SCRA 35). . .
Factual findings of the Court of Appeals are final
and may not be reviewed on appeal by the
Supreme Court except when the lower court and
the Court of Appeals arrived at diverse factual
findings. (Yobido et al v. Court of Appeals et al.,
281 SCRA 1)
. . . Where the factual findings of both the trial
court and the Court of Appeals coincide, the same
are binding on the Supreme Court. . . . (National
Steel Corporation v. Court of Appeals, et al., 283
SCRA 45)
With respect to the contention that petitioner was denied due
process, the same is also untenable, it appearing from the
records of the case that petitioner was amply given the
opportunity to present his evidence, which he, however, waived.
In a long line of decisions, this Court ruled that:
xxx xxx xxx
The essence of due process is to be found in the
reasonable opportunity to be heard and submit
any evidence one may have in support of one's
defense. (Salonga v. Court of Appeals, 269 SCRA
534, PMI Colleges v. National Labor Relations
Commission, 277 SCRA 462)
What is repugnant to due process is the denial of
the opportunity to be heard. (Garment and Textile
Export Board v. Court of Appeals, 268 SCRA 258)
There is no denial of due process where a party
was given an opportunity to be heard. (Gutierrez
v. Commission on Elections, 270 SCRA 413)
The essence of due process is simply an
opportunity to be heard and not that an actual
hearing should always and indispensably be held.
(Conti v. Labor Relations Commission, 271 SCRA
114)
The essence of due process is simply an
opportunity to be heard. Ysmael v. Court of
Appeals, 273 SCRA 165 and Carvajal v. Court of
Appeals, 280 SCRA 351)
A formal type or trial-type hearing is not at all
times and in all instances essential to due process
the requirements of which are satisfied where the
parties are afforded fair and reasonable
opportunity to explain their side of the
controversy. (Taberrah v. National Labor
Relations Commission, 276 SCRA 431)
For as long as the parties are given the
opportunity to be heard before judgment is
rendered, the demands of due process are
 sufficiently met. (Bangalisan v. Court of Appeals,
276 SCRA 619)
As long as the party was given an opportunity to
defend her interests in due course, she cannot be
said to have been denied due process of law, for
this opportunity to be heard is the very essence of
due process. (Legarda v. Court of Appeals, 280
SCRA 642)
Anent the issue concerning the interpretation of Section 6, Rule
78 of the Revised Rules of Court, we are of the view, and so hold,
that the order of preference in the appointment of an
administrator depends on the attendant facts and circumstances.
In the case under consideration, the appointment of Edgardo S.
Silverio as administrator is proper.
Although in the case of Intestate Estate of the deceased
Geronima Uy Coque. Juan Navas L. Sioca vs. Jose Garcia, 44
Phil 711[1923], this Court held that:
A probate court cannot arbitrarily disregard the
preferential rights of the surviving spouse to the
administration of the estate of a deceased person;
but if the person enjoying such preferential rights
is unsuitable the court may appoint another
person.
In the same case, the court disregarded the order of
preference ratiocinating, thus:
. . . The determination of a person's suitability for
the office of administrator rests, to a great extent,
in the sound judgment of the court exercising the
power of appointment and such judgment will not
be interfered with on appeal unless it appears
affirmatively that the court below was in error.
. . . Unsuitableness for appointment as
administrator may consist in adverse interest of
some kind or hostility to those immediately
interested in the estate. . . .
In the case of Esler vs. Tad-y, 46 Phil 854, this Court answered in
the affirmative the query whether the probate court, in the
exercise of its discretion, may disregard the order of preference to
the administration, set forth in the Rules of Court.
The deceased left a widow and a minor child. A
person named as executor in a will which was not
probated because not executed according to law
was appointed administrator. The widow appealed
on the ground that such administrator should not
have been appointed without her consent. HELD:
If the administrator was appointed by the trial
court for the estate in accordance with Rule 79,
section 6 of the Rules of Court, the trial court had
discretion to issue the letters of administration to
any of the persons mentioned in said section, and
unless there has been an abuse of discretion,
which does not appear to have been committed in
the present case, appointment shall not be
revoked on appeal. 20
So, also, in the case of Villamor vs. Court of Appeals, 162 SCRA
578, 579, this Court held that:
We do not consider as "intriguing" the observation
of the lower court and concurred in by the Court of
Appeals that in both Special Proceedings in
question, the administrators appointed were
complete strangers to the decedents. There is
nothing repulsive in this nor is this an indicium of
fraud and collusion as found by the courts.
Section 642 of the Code of Civil Procedure
enumerates the persons who can act as
 executors and administrators. It provides that in
case the persons who have the preferential right
to be appointed are not competent or are unwilling
to serve, administration may be granted to such
other person as the court may appoint.
And in the case of En el intestado del finado BERNABE
BUSTAMANTE. RUFINA AREVALO contra JOSE
BUSTAMANTE, ET AL., 69 Phil 656, [1940], the Court said:
No es ciertamente destitucion la cue le hizo cesar
en el cargo al apelante, porque destitucion
supone siempre correccion o castigo, sino
revocacion de la orden en virtud de la cual fue
nombrado Administrador judicical, por causa de
incapacidad. Es que en esta jurisdiccion, como ya
se ha resuelto,el tener interes adverso a los de
una Testamentaria o un Intestado, o a los de
aquellos que estan interesados en ellos, es
motivo suficiente de incapacidad para ser
nombrado Administrador judicial de cualquiera de
los mismos. . . .
The appointment of a special administrator in a
probate case lies in the sound discretion of the
court, and he may be removed without reference
to section 653 of the Code of Civil Procedure. (De
Gala v. Gonzales and Ona, 53 Phil 104 [1929])
We discern no ground to disregard the finding of the respondent
judge and the respondent court on the competence of the
decedent's son, Edgardo S. Silverio, to act as administrator. His
appointment as special, and later, as the regular administrator is
sanctioned by law.
Petitioner's Respectful Urgent Manifestation and Motion for the
Issuance of a Temporary Restraining Order and/or Early
Resolution on the Petition to Allow Claim against the Estate and
for the Annotation of Attorney's Lien filed by counsel for private
respondent, which was favorably acted upon by the respondent
court, is impressed with merit. The respondent court is not vested
with the power to order the special administrator to sell real
properties of the estate pending determination of the validity of
the regular administrator's appointment, pursuant to Section 2,
Rule 80 of the Revised Rules of Court, which provides:
Powers and duties of special administrator. Such
special administrator shall take possession and
charge of the goods, chattels, rights, credits, and
estate of the deceased and preserve the same for
the executor or administrator afterwards
appointed, and for that purpose may commence
and maintain suits as administrator. He may sell
only such perishable and other property as the
court orders sold. A special administrator shall not
be liable to pay any debt of the deceased unless
so ordered by the court.
In the case of Testamentary Proceedings, Estate of the
Deceased Juan Pimentel. Tecla Arganda v. Velez et al., Vol.
XXXV, No. 134 O. G. 2429, the Court found, that:
Under the title "Sale of Estate" in Chapter XXXVI
of the Code of the Civil Procedure, and the
provisions which it comprises, from Section 714 to
724, the Code treats of and designates the
powers of the Court of First Instance in
testamentary and intestate proceedings, in
connection with the sale of property belonging to
the Estate. By virtue of the authority conferred by
sections 714 to 724, the court may grant
permission or authority for the sale of said
property upon previous petition of the executor or
administrator, provided the legal requirements are
complied with, and the grounds required by the
 law in each case provided for in the above-
mentioned sections are shown. The executor or
administrator must comply with the rules
established by section 722 of the Code. Of course
in exercising its powers, when the court is
convinced that a sufficient valid reason exists, it
may order the executor or administrator to request
permission or authority to sell property; but it
cannot directly order its sale, because that would
be neglecting to comply with the rules which must
be observed before granting the said permission
or authority. Section 722 requires that satisfactory
proof be adduced and that the rules established in
the first paragraphs be complied with, before
granting the permission or authority to the
executor or administrator. (Baun v. Heirs of Baun,
53 Phil., 654)
With the exception of the case provided for in
section 717 regarding the sale of the entire
personality or part thereof for the purpose of
preserving the other property of the deceased,
and of that provided for in section 720 with
reference to the sale of realty acquired by the
executor or administrator by virtue of the
execution of a judgment or the foreclosure of a
mortgage the legal provisions above referred to,
only recognize as a ground for the court to
authorize the sale of the estate of a deceased
person subject to administration, the application of
its proceeds to the payment of the debts or
expenses of administration or the settlement of
any legacy (secs. 714, 715, 716, 717, 718, 719
and 721).
As a rule and as a matter of courtesy and respect, the respondent
court has to wait for the Decision of this Court before ruling on the
matter of the claim for agreed contingent attorney's fees by Atty.
Cesar P. Uy, amounting to thirty three and one third (33 1/3 %)
per cent of the fair market value of the recovered properties.
However, the issue has become moot and academic in light of
the finding by this Court that Edgardo Silverio has been duly
appointed as regular administrator.
As regards the Motion to Inhibit the respondent judge, respondent
Judge Francisco X. Velez may voluntarily inhibit himself pursuant
to Section 1(2), Rule 137 of the Revised Rules of Court 21 and in
line with the following ruling of this court:
. . . no judge should not handle a case in which he
might be perceived, rightly or wrongly, to be
susceptible to bias and partiality. His judgment
must not be tainted by even the slightest
suspicion of improbity or preconceived interest.
The rule is aimed at preserving at all times the
faith and confidence in courts of justice by any
party to the litigation. . . . (Urbanes, Jr. v. Court of
Appeals, 236 SCRA 72, 77)
However, this is not the attendant circumstance in this
case. Petitioner's mere allegation of partiality and bias
without the supporting facts is insufficient for the
respondent judge to be required to decline from presiding
over the subsequent proceedings. We are of the view that
it does not constitute "just and valid reason".
WHEREFORE, the Petition is partly granted and the Decision of
the Court of Appeals AFFIRMED except the Order of Judge
Francisco X. Velez, dated July 31, 1996, approving the Petition to
Allow Claim for the Estate and for Annotation of Attorney's Lien
which is SET ASIDE. No pronouncement as to costs.
SO ORDERED.
G.R. No. 112193 March 13, 1996 6. The plaintiffs' father, Jose M. Aruego,
acknowledged and recognized the herein plaintiffs
JOSE E. ARUEGO, JR., SIMEONA SAN JUAN ARUEGO, MA. as his children verbally among plaintiffs' and their
IMMACULADA T. ALANON, ROBERTO A. TORRES, CRISTINA mother's family friends, as well as by myriad
A. TORRES, JUSTO JOSE TORRES and AGUSTIN different paternal ways, including but not limited to
TORRES, petitioners, the following:
vs.
THE HON. COURT OF APPEALS, THIRTEENTH DIVISION and (a) Regular support and educational expenses;
ANTONIA ARUEGO, respondents.
(b) Allowance to use his surname;

(c) Payment of maternal bills;

HERMOSISIMA, JR., J.:p
(d) Payment of baptismal expenses and
On March 7, 1983, a Complaint1 for Compulsory Recognition and Enforcement of attendance therein;
Successional Rights was filed before Branch 30 of the Regional Trial Court of Manila by the
minors, private respondent Antonia F. Aruego and her alleged sister Evelyn F. Aruego,
represented by their mother and natural guardian, Luz M. Fabian. Named defendants (e) Taking them to restaurants and department
therein were Jose E. Aruego, Jr. and the five (5) minor children of the deceased Gloria A.
Torres, represented by their father and natural guardian, Justo P. Torres, Jr., now the stores on occasions of family rejoicing;
petitioners herein.

(f) Attendance to school problems of plaintiffs;

In essence, the complaint avers that the late Jose M. Aruego, Sr.,
a married man, had an amorous relationship with Luz M. Fabian (g) Calling and allowing plaintiffs to his office
sometime in 1959 until his death on March 30, 1982. Out of this every now and then;
relationship were born Antonia F. Aruego and Evelyn F. Aruego
on October 5, 1962 and September 3, 1963, respectively. The
(h) Introducing them as such children to family
complaint prayed for an Order praying that herein private
friends.
respondent and Evelyn be declared the illegitimate children of the
deceased Jose M. Aruego, Sr.; that herein petitioners be
compelled to recognize and acknowledge them as the 7. The plaintiffs are thus, in continuous
compulsory heirs of the deceased Jose M. Aruego; that their possession of the status
share and participation in the estate of their deceased father be of (illegitimate) children of the deceased Jose M.
determined and ordered delivered to them. Aruego who showered them, with the continuous
and clear manifestations of paternal care and
affection as above outlined.2
The main basis of the action for compulsory recognition is their
alleged "open and continuous possession of the status of
illegitimate children" as stated in paragraphs 6 and 7 of the Petitioners denied all these allegations.
Complaint, to wit:
After trial, the lower court rendered judgment, dated June 15,
1992, the dispositive portion of which reads:
WHEREFORE, judgment is rendered —
1. Declaring Antonia Aruego as illegitimate
daughter of Jose Aruego and Luz Fabian;
2. Evelyn Fabian is not an illegitimate daughter of
Jose Aruego with Luz Fabian;
3. Declaring that the estate of deceased Jose
Aruego are the following:
xxx xxx xxx
4. Antonia Aruego is entitled to a share equal to
1/2 portion of share of the legitimate children of
Jose Aruego;
5. Defendants are hereby ordered to recognize
Antonia Aruego as the illegitimate daughter of
Jose Aruego with Luz Fabian;
6. Defendants are hereby ordered to deliver to
Antonia Aruego (her) share in the estate of Jose
Aruego, Sr.;
7. Defendants to play (sic) plaintiffs (Antonia
Aruego) counsel the sum of P10,000.00 as atty's
fee;
8. Cost against the defendants.3
Herein petitioners filed a Motion for Partial Reconsideration of the
decision alleging loss of jurisdiction on the part of the trial court
over the complaint by virtue of the passage of Executive Order
No. 209 (as amended by Executive Order No. 227), otherwise
known as the Family Code of the Philippines which took effect on
August 3, 1988. This motion was denied by the lower court in the
Order, dated January 14, 1993.
Petitioners interposed an appeal but the lower court refused to
give it due course on the ground that it was filed out of time.
A Petition for Prohibition and Certiorari with prayer for a Writ of
Preliminary Injunction was filed by herein petitioners before
respondent Court of Appeals, the petition was dismissed for lack
of merit in a decision promulgated on August 31, 1993. A Motion
for Reconsideration when filed was denied by the respondent
court in a minute resolution, dated October 13, 1993.
Hence, this Petition for Review on Certiorari under Rule 45
alleging the following grounds:
A
RESPONDENT COURT HAD DECIDED A
QUESTION OF SUBSTANCE IN A WAY NOT IN
ACCORD WITH THE LAW AND IS DIRECTLY
CONTRADICTORY TO THE APPLICABLE
DECISION ALREADY ISSUED BY THIS
HONORABLE COURT.
B
RESPONDENT COURT ERRED IN HOLDING
THAT THE PETITION FILED BY PETITIONERS
BEFORE IT DOES NOT INVOLVE A QUESTION
OF JURISDICTION.
C
 RESPONDENT COURT HAD CLEARLY ERRED
IN RULING THAT THERE IS NO PERCEPTIBLE
DIFFERENCE BETWEEN THE CIVIL CODE
PROVISION AND THOSE OF THE FAMILY
CODE ANENT THE TIME AN ACTION FOR
COMPULSORY RECOGNITION MAY BE MADE
AND THAT THERE IS NO DIFFERENCE UNDER
THE CIVIL CODE FROM THAT OF THE FAMILY
CODE CONCERNING THE REQUIREMENT
THAT AN ACTION FOR COMPULSORY
RECOGNITION ON THE GROUND OF
CONTINUOUS POSSESSION OF THE STATUS
OF AN ILLEGITIMATE CHILD SHOULD BE
FILED DURING THE LIFETIME OF THE
PUTATIVE PARENT, IN UTTER DISREGARD OF
THE RULING OF THIS HONORABLE COURT IN
THE UYGUANGCO CASE THAT THE CIVIL
CODE PROVISION HAD BEEN SUPERSEDED
OR AT LEAST MODIFIED BY THE
CORRESPONDING ARTICLES IN THE FAMILY
CODE.
The law cited reads:
D
RESPONDENT COURT ERRED IN DISMISSING
PETITIONERS' PETITION FOR PROHIBITION
AND IN HOLDING THAT PETITIONERS
REMEDY IS THAT OF AN APPEAL WHICH
ALLEGEDLY HAD ALREADY BEEN LOST.4
Private respondent's action for compulsory recognition as an
illegitimate child was brought under Book I, Title VIII of the Civil
Code on PERSONS, specifically Article 285 thereof, which state
the manner by which illegitimate children may prove their filiation,
to wit:
Art. 285. The action for the recognition of natural
children may be brought only during the lifetime of
the presumed parents, except in the following
cases:
(1) If the father or mother died during the minority
of the child, in which case the latter may file the
action before the expiration of four years from the
attainment of his majority; . . . .
Petitioners, on the other hand, submit that with the advent
of the New Family Code on August 3, 1988, the trial court
lost jurisdiction over the complaint of private respondent
on the ground of prescription, considering that under
Article 175, paragraph 2, in relation to Article 172 of the
New Family Code, it is provided that an action for
compulsory recognition of illegitimate filiation, if based on
the "open and continuous possession of the status of an
illegitimate child," must be brought during the lifetime of
the alleged parent without any exception, otherwise the
action will be barred by prescription.
Art. 172. The filiation of legitimate children is
established by any of the following:
(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:
(1) The open and continuous possession of the
status of a legitimate child; or
 (2) Any other means allowed by the Rules of
Court and special laws.
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 [during the lifetime
of the child], except when the action is based on
the second paragraph of Article 172, in which
case the action may be brought during the lifetime
of the alleged parent.
In the case at bench, petitioners point out that, since the
complaint of private respondent and her alleged sister
was filed on March 7, 1983, or almost one (1) year after
the death of their presumed father on March 30, 1982, the
action has clearly prescribed under the new rule as
provided in the Family Code. Petitioners, further, maintain
that even if the action was filed prior to the effectivity of
the Family Code, this new law must be applied to the
instant case pursuant to Article 256 of the Family Code
which provides:
This Code shall, have retroactive effect insofar as
it does not prejudice or impair vested of acquired
rights in accordance with the Civil Code or other
laws.
The basic question that must be resolved in this case, therefore,
appears to be:
Should the provisions of the Family Code be applied in the instant
case? As a corollary Will the application of the Family Code in
this case prejudice or impair any vested right of the private
respondent such that it should not be given retroactive effect in
this particular case?
The phrase "vested or acquired rights" under Article 256, is not
defined by the Family Code. "The Committee did not define what
is meant by a 'vested or acquired right,' thus leaving it to the
courts to determine what it means as each particular issue is
submitted to them. It is difficult to provide the answer for each and
every question that may arise in the future."5
In Tayag vs. Court of Appeals,6 a case which involves a similar
complaint denominated as "Claim for Inheritance" but treated by
this court as one to compel recognition as an illegitimate child
brought prior to the effectivity of the Family Code by the mother of
the minor child, and based also on the "open and continuous
possession of the status of an illegitimate child," we had occasion
to rule that:
Under the circumstances obtaining in the case at
bar, we hold that the right of action of the minor
child has been vested by the filing of the
complaint in court under the regime of the Civil
Code and prior to the effectivity of the Family
Code. We herein adopt our ruling in the recent
case of Republic of the Philippines vs. Court of
Appeals, et. al. 7 where we held that the fact of
filing of the petition already vested in the petitioner
her right to file it and to have the same proceed to
final adjudication in accordance with the law in
force at the time, and such right can no longer be
prejudiced or impaired by the enactment of a new
law.
xxx xxx xxx
Accordingly, Article 175 of the Family Code finds
no proper application to the instant case since it
 will ineluctably affect adversely a right of private WHEREFORE, the petition is DENIED and the decision of the
respondent and, consequentially, of the minor Court of Appeals dated August 31, 1993 and its Resolution dated
child she represents, both of which have been October 13, 1993 are hereby AFFIRMED.
vested with the filing of the complaint in court. The
trial court is, therefore, correct in applying the SO ORDERED.
provisions of Article 285 of the Civil Code and in
holding that private respondent's cause of action
has not yet prescribed.

Tayag applies four-square with the case at bench. The action

brought by private respondent Antonia Aruego for compulsory
recognition and enforcement of successional rights which was
filed prior to the advent of the Family Code, must be governed by
Article 285 of the Civil Code and not by Article 175, paragraph 2
of the Family Code. The present law cannot be given retroactive
effect insofar as the instant case is concerned, as its application
will prejudice the vested right of private respondent to have her
case decided under Article 285 of the Civil Code. The right was
vested to her by the fact that she filed her action under the regime
of the Civil Code. Prescinding from this, the conclusion then
ought to be that the action was not yet barred, notwithstanding
the fact that it was brought when the putative father was already
deceased, since private respondent was then still a minor when it
was filed, an exception to the general rule provided under Article
285 of the Civil Code. Hence, the trial court, which acquired
jurisdiction over the case by the filing of the complaint, never lost
jurisdiction over the same despite the passage of E.O. No. 209,
also known as the Family Code of the Philippines.

Our ruling herein reinforces the principle that the jurisdiction of a

court, whether in criminal or civil cases, once attached cannot be
ousted by subsequent happenings or events, although of a
character which would have prevented jurisdiction from attaching
in the first instance, and it retains jurisdiction until it finally
disposes of the case. 8
G.R. No. 116018 November 13, 1996
NELIA A. CONSTANTINO, petitioner,
vs.
COURT OF APPEALS, AURORA S. ROQUE, PRISCILLA S.
LUNA and JOSEFINA S. AUSTRIA, respondents.
BELLOSILLO, J.:
JOSEFA TORRES died intestate leaving a parcel of land located
at Balagtas, Bulacan. Among her heirs are respondents Aurora S.
Roque, Priscilla S. Luna and Josefina S. Austria. Sometime in
1984, the heirs of Josefa Torres, as vendors, and petitioner Nelia
A. Constantino, as vendee, entered into a contract to sell a parcel
of land with a total land area of two hundred and fifty (250) square
meters. The lot, owned in common by the Torres heirs, is being
occupied by petitioners' mother and sister. An adjoining lot, also
co-owned by the heirs, is being occupied by spouses Severino
and Consuelo Lim. Pursuant to their agreement, the heirs
authorized petitioner to prepare the necessary Deed of
Extrajudicial Settlement of Estate with Sale.
After having the document drafted — with several spaces left
blank including the specification as to the metes and bounds of
the land — petitioner asked the heirs to affix their signatures on
the document. The heirs signed the document with the
understanding that respondent Aurora S. Roque, one of the heirs,
would be present when the latter would seek permission from the
Bureau of Lands and have the land surveyed.
However, without the participation of any of the Torres heirs, the
property was subsequently surveyed, subdivided and then
covered by TCT Nos. T-292265 and T-292266. Petitioner did not
furnish the heirs with copies of the Deed of Extrajudicial
Settlement of Estate with Sale nor of the subdivision plan and the
certificates of title. Upon securing a copy of the deed from the
Registry of Deeds, the respondents learned that the area of the
property purportedly sold to petitioner was much bigger than that
agreed upon by the parties. It already included the portion being
occupied by the spouses Severino and Consuelo Lim.
On 2 June 1986, private respondents sent a letter to petitioner
demanding the surrender to them of the deed of settlement and
conveyance, the subdivision plan and the certificates of title; but
to no avail. On 25 June 1986 respondents filed with the Regional
Trial Court of Bulacan an action for annulment of the deed and
cancellation of the certificates of title, with prayer for recovery of
damages, attorney's fees and costs of suit. 1
Petitioner controverted the allegations of respondents by
presenting the Deed of Extrajudicial Settlement of Estate with
Sale dated 10 October 1984 wherein respondents agreed to
divide and adjudicate among themselves the inherited property
with an area of one thousand five hundred and three (1,503)
square meters. In the same document, they caused the
subdivision of the property into two (2) lots according to Plan No.
PSD-03-009105 identified as Lot 4-A with an area of one
thousand ninety-six (1,096) square meters, and Lot 4-B with an
area of four hundred and seven (407) square meters, and
acknowledged the sale to petitioner of said Lot 4-B. As a
consequence, on 18 March 1985, the Register of Deeds issued
TCT No. T-292265 in the name of the heirs of Josefa Torres and
TCT No. T-292266 in the name of petitioner.
In reply, private respondents reiterated that all the heirs signed
the document before the land was surveyed and subdivided,
hence, there was as yet no definite area to be sold that could be
indicated in the deed at the time of the signing. They also claimed
that they were not notified about the survey and the subdivision of
the lot and therefore they could not have agreed on the area
supposedly sold to petitioner. The respondent heirs insist that
they could not have agreed to the extent of the area actually
reflected in the deed because it included the portion being
occupied by the Lim spouses, which was already the subject of a
previous agreement to sell between them and their predecessor.
The trial court entertained serious doubts with respect to the
preparation and due execution of the Deed of Extrajudicial
Settlement of Estate with Sale taking into account that (a) while
petitioner claimed that all the heirs signed before the notary public
and in her presence, she was not able to enumerate all the
signatories to the document; (b) while petitioner claimed that the
document was signed only after the survey of the land was
completed, or on 10 October 1984, such fact was negated by her
own witness who testified that the survey was conducted only on
16 October 1984; and, (c) while petitioner alleged that the
document was signed and notarized in Manila no explanation was
offered why the same could not have been signed and notarized
in Bulacan where notaries public abound which could have been
less inconvenient to the parties concerned. Additionally, the trial
court relied heavily on the assertions of respondents as reflected
in their demand letter that they did not give their consent to the
sale of Lot 4-B.
Thus, on the basis of the evidence on record, the trial court on 27
September 1990 ordered the annulment and cancellation of
the Deed of Extrajudicial Settlement of Estate with Sale, TCT
Nos. T-292265 and T-292266 and Subdivision Plan No. PSD-03-
009105. It also ordered petitioner to pay private respondents
P50,000.00 for moral damages, P15,000.00 for attorney's fees,
and to pay the costs of suit. 2
On 16 March 1994 respondent Court of Appeals sustained the
decision of the trial court, 3 and on 20 June 1994 denied the
motion to reconsider its decision. 4
Petitioner faults respondent Court of Appeals: (a) for disregarding
documentary evidence already presented, marked and identified
on a purely technical ground, and (b) for concluding that the Deed
of Extrajudicial Settlement of Estate with Sale did not reflect the
true intent of the parties.
Petitioner argues that the trial court should not have denied her
motion to admit formal offer of evidence merely on the basis of
technicality such as late filing, citing Siguenza v. Court of
Appeals. 5 We are not persuaded. Indeed, we held
in Siguenza that rules of procedure are not to be applied in a very
rigid and technical sense as they are used only to help secure,
not override, substantial justice. Yet the holding is inapplicable to
the present case as the trial court had a reasonable basis for
denying petitioner's motion —
On February 6, 1990, Atty. Ponciano Mercado,
defendant's counsel, manifested in Court that he
has (sic) no more witness to present. He asked
that he be given 15 days to make a formal offer of
evidence and which the Court granted. At the
scheduled hearing of April 03, 1990, Atty.
Ponciano Mercado . . . . was not in Court. Atty.
Veneracion, plaintiffs' counsel, called the attention
of the Court that Atty. Mercado has (sic) not yet
filed and/or complied with the Court Order dated
February 06, 1990, which is to file his formal offer
of evidence. On motion of Atty. Veneracion,
defendant's right to file a formal offer of evidence
was deemed waived. Atty. Veneracion waived the
presentation of rebuttal evidence considering that
the defendant can (sic) no longer make a formal
offer of evidence.
On May 11, 1990, the Court was in receipt of a
motion to admit formal offer of exhibits filed by the
defendant thru counsel, Atty. Ponciano Mercado,
on May 02, 1990. Considering that the same was
filed out of time and the plaintiffs having filed their
memorandum already, the motion to admit formal
offer of exhibits was denied (emphasis supplied).
The trial court was correct in holding that petitioner waived the
right to formally offer his evidence. A considerable lapse of time,
about three (3) months, had already passed before petitioner's
counsel made effort to formally offer his evidence. For the trial
court to grant petitioner's motion to admit her exhibits would be to
condone an inexcusable laxity if not non-compliance with a court
order which, in effect, would encourage needless delays and
derail the speedy administration of justice.
Petitioner also insists that the real intent of the parties was to
make the entire Lot 4-B the subject matter of the sale. She claims
that during cross-examination respondent Aurora S. Roque
admitted that she signed in behalf of her co-heirs a receipt for
P30,000.00 as partial payment for the lot occupied by Ka
Baring and Lina (relatives of petitioner) and Iling (Consuelo Lim).
Moreover, according to petitioner, the assertions of private
respondents to petitioner contained in the demand letter should
not necessarily be true and that the validity of the Deed of
Extrajudicial Settlement of Estate with Sale was not affected by
the fact that it was notarized in a place other than where the
subject matter thereof was situated, citing Sales v. Court of
Appeals. 6
These other arguments of petitioner are barren and futile. The
admission of respondent Roque cannot prevail in the face of the
clear evidence that there was as yet no meeting of the minds on
the land area to be sold since private respondents were still
awaiting the survey to be conducted on the premises. Obviously,
the trial court only lent credence to the assertions in the demand
letter after having weighed the respective evidence of the parties.
But even without the letter, the evidence of respondents had
already amply substantiated their claims.
We ruled in the Sales case that the extrinsic validity of a
document was not affected by the fact that it was notarized in a
place other than where the subject matter thereof was located.
What is more important under the Notarial Law is that the notary
public has authority to acknowledge the document executed
within his territorial jurisdiction. The ruling in Sales is not
applicable to the present case. Our concern here is not whether
the notary public had the authority to acknowledge the document
executed within his territorial jurisdiction but whether respondents
indeed appeared before him and signed the deed. However, the
quantum of evidence shows that they did not.
The trial court correctly appreciated the fact that the deed was
notarized in Manila when it could have been notarized in Bulacan.
This additional detail casts doubt on the procedural regularity in
the preparation, execution and signing of the deed. It is not easy
to believe that petitioner and the ten (10) Torres heirs traveled all
the way to Manila to have their questioned document notarized
considering that they, with the exception of respondent Roque,
are residents of Balagtas, Bulacan, where notaries public are
easy to find. Consequently, the claim of private respondents that
they did not sign the document before a notary public is more
plausible than petitioner's feeble claim to the contrary.
Likewise, we find the allegation of respondents that they signed
the deed prior to the survey, or before determination of the area
to be sold, worthy of credit as against the contention of petitioner
that they signed after the survey or on 10 October 1984. As found
by the trial court, such contention was contradicted by petitioner's
own witness who positively asserted in court that the survey was
conducted only on 16 October 1984 or six (6) days after the
signing. Quite obviously, when respondents affixed their
signatures on the deed, it was still incomplete since petitioner
who caused it to be prepared left several spaces blank, more
particularly as regards the dimensions of the property to be sold.
The heirs were persuaded to sign the document only upon the
assurance of petitioner that respondent Roque, pursuant to their
understanding, would be present when the property would be
surveyed after obtaining permission from the Bureau of Lands. As
it surfaced, the supposed understanding was merely a ruse of
petitioner to induce respondents to sign the deed without which
the latter would not have given their conformity
thereto. 7 Apparently, petitioner deceived respondents by filling
the blank spaces in the deed, having the lots surveyed and
subdivided, and then causing the issuance of transfer certificates
of title without their knowledge, much less consent. Thus all the
elements of fraud vitiating consent for purposes of annulling a
contract concur: (a) It was employed by a contracting party upon
the other; (b) It induced the other party to enter into the contract;
(c) It was serious; and, (d) It resulted in damages and injury to the
party seeking annulment. 8

Perhaps, another compelling reason for the annulment of the

document of settlement and conveyance is that the second page
thereof clearly manifests that the number of the subdivision plan
and the respective areas of Lots 4-A and 4-B were merely
handwritten while all the rest of the statements therein were
typewritten, which leads us to the conclusion that handwritten
figures thereon were not available at the time the document was
formalized.

WHEREFORE, their being no error to warrant a reversal of the

decision and resolution in question of respondent Court of
Appeals, which affirmed the decision of the Regional Trial Court
of Malolos, Bulacan, Br. 22, the instant petition is DENIED.

SO ORDERED.