RULE 74

Summary Settlement of Estate

Section 1. Extrajudicial settlement by agreement between heirs. — If the decedent left no

will and no debts and the heirs are all of age, or the minors are represented by their judicial
or legal representatives duly authorized for the purpose, the parties may without securing
letters of administration, divide the estate among themselves as they see fit by means of a
public instrument filed in the office of the register of deeds, and should they disagree, they
may do so in an ordinary action of partition. If there is only one heir, he may adjudicate to
himself the entire estate by means of an affidavit filled in the office of the register of deeds.
The parties to an extrajudicial settlement, whether by public instrument or by stipulation in
a pending action for partition, or the sole heir who adjudicates the entire estate to himself
by means of an affidavit shall file, simultaneously with and as a condition precedent to the
filing of the public instrument, or stipulation in the action for partition, or of the affidavit in
the office of the register of deeds, a bond with the said register of deeds, in an amount
equivalent to the value of the personal property involved as certified to under oath by the
parties concerned and conditioned upon the payment of any just claim that may be filed
under section 4 of this rule. It shall be presumed that the decedent left no debts if no
creditor files a petition for letters of administration within two (2) years after the death of
the decedent.

The fact of the extrajudicial settlement or administration shall be published in a newspaper

of general circulation in the manner provided in the nest succeeding section; but no
extrajudicial settlement shall be binding upon any person who has not participated therein
or had no notice thereof.

Section 2. Summary settlement of estate of small value. — Whenever the gross value of
the estate of a deceased person, whether he died testate or intestate, does not exceed ten
thousand pesos, and that fact is made to appear to the Court of First Instance having
jurisdiction of the estate by the petition of an interested person and upon hearing, which
shall be held not less than one (1) month nor more than three (3) months from the date of
the last publication of a notice which shall be published once a week for three (3)
consecutive weeks in a newspaper of general circulation in the province, and after such
other notice to interest persons as the court may direct, the court may proceed summarily,
without the appointment of an executor or administrator, and without delay, to grant, if
proper, allowance of the will, if any there be, to determine who are the persons legally
entitled to participate in the estate, and to apportion and divide it among them after the
payment of such debts of the estate as the court shall then find to be due; and such
persons, in their own right, if they are of lawful age and legal capacity, or by their

guardians or trustees legally appointed and qualified, if otherwise, shall thereupon be

entitled to receive and enter into the possession of the portions of the estate so awarded to
them respectively. The court shall make such order as may be just respecting the costs of
the proceedings, and all orders and judgments made or rendered in the course thereof shall
be recorded in the office of the clerk, and the order of partition or award, if it involves real
estate, shall be recorded in the proper register's office.

Section 3. Bond to be filed by distributees. — The court, before allowing a partition in

accordance with the provisions of the preceding section, my require the distributees, if
property other than real is to be distributed, to file a bond in an amount to be fixed by

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court, conditioned for the payment of any just claim which may be filed under the next
succeeding section.

Section 4. Liability of distributees and estate. — If it shall appear at any time within two
(2) years after the settlement and distribution of an estate in accordance with the provisions
of either of the first two sections of this rule, that an heir or other person has been unduly
deprived of his lawful participation in the estate, such heir or such other person may compel
the settlement of the estate in the courts in the manner hereinafter provided for the
purpose of satisfying such lawful participation. And if within the same time of two (2) years,
it shall appear that there are debts outstanding against the estate which have not been
paid, or that an heir or other person has been unduly deprived of his lawful participation
payable in money, the court having jurisdiction of the estate may, by order for that
purpose, after hearing, settle the amount of such debts or lawful participation and order
how much and in what manner each distributee shall contribute in the payment thereof, and
may issue execution, if circumstances require, against the bond provided in the preceding
section or against the real estate belonging to the deceased, or both. Such bond and such
real estate shall remain charged with a liability to creditors, heirs, or other persons for the
full period of two (2) years after such distribution, notwithstanding any transfers of real
estate that may have been made.

Section 5. Period for claim of minor or incapacitated person. — If on the date of the
expiration of the period of two (2) years prescribed in the preceding section the person
authorized to file a claim is a minor or mentally incapacitated, or is in prison or outside the
Philippines, he may present his claim within one (1) year after such disability is removed.

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 G.R. No. 187524, August 05, 2015

SPOUSES MARIA BUTIONG AND FRANCISCO VILLAFRIA, SUBSTITUTED BY DR.

RUEL B. VILLAFRIA, Petitioners, v. MA. GRACIA RIÑOZA PLAZO AND MA. FE RIÑOZA
ALARAS, Respondents.

DECISION

PERALTA, J.:

Before the-Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to reverse and set aside the Decision1 and Resolution,2 dated March 13, 2009 and
April 23, 2009, respectively, of the Court Appeals (CA) in CA-G.R. SP No. 107347, which
affirmed the Judgment3 dated October 1, 2001 of the Regional Trial Court (RTC) of
Nasugbu, Batangas, Branch 14, in Civil Case No. 217.

The antecedent facts are as follows:LawlibraryofCRAlaw

On November 16, 1989, Pedro L. Riñoza died intestate, leaving several heirs, including his
children with his first wife, respondents Ma. Gracia R. Plazo and Ma. Fe Alaras, as well as
several properties including a resort covered by Transfer Certificates of Title (TCT) No.
51354 and No. 51355, each with an area of 351 square meters, and a family home, the land
on which it stands is covered by TCT Nos. 40807 and 40808, both located in Nasugbu,
Batangas.4redarclaw

In their Amended Complaint for Judicial Partition with Annulment of Title and Recovery of
Possession5 dated September 15, 1993, respondents alleged that sometime in March 1991,
they discovered that their co-heirs, Pedro's second wife, Benita Tenorio and other children,
had sold the subject properties to petitioners, spouses Francisco Villafria and Maria Butiong,
who are now deceased and substituted by their son, Dr. Ruel B. Villafria, without their
knowledge and consent. When confronted about the sale, Benita acknowledged the same,
showing respondents a document she believed evidenced receipt of her share in the sale,
which, however, did not refer to any sort of sale but to a previous loan obtained by Pedro
and Benita from a bank.6 The document actually evidenced receipt from Banco Silangan of
the amount of P87,352.62 releasing her and her late husband's indebtedness
therefrom.7 Upon inquiry, the Register of Deeds of Nasugbu informed respondents that he
has no record of any transaction involving the subject properties, giving them certified true
copies of the titles to the same. When respondents went to the subject properties, they
discovered that 4 out of the 8 cottages in the resort had been demolished. They were not,
however, able to enter as the premises were padlocked.

Subsequently, respondents learned that on July 18, 1991, a notice of an extra-judicial

settlement of estate of their late father was published in a tabloid called Balita. Because of
this, they caused the annotation of their adverse claims over the subject properties before
the Register of Deeds of Nasugbu and filed their complaint praying, among others, for the
annulment of all documents conveying the subject properties to the petitioners and
certificates of title issued pursuant thereto.8redarclaw

In their Answer,9 petitioners denied the allegations of the complaint on the ground of lack of
personal knowledge and good faith in acquiring the subject properties. In the course of his
testimony during trial, petitioner Francisco further contended that what they purchased was
only the resort.10 He also presented an Extra-Judicial Settlement with Renunciation,

3
Repudiations and Waiver of Rights and Sale which provides, among others, that
respondents' co-heirs sold the family home to the spouses Rolando and Ma. Cecilia Bondoc
for P1 million as well as a Deed of Sale whereby Benita sold the resort to petitioners for
P650,000.00.11redarclaw

On October 1, 2001, the trial court nullified the transfer of the subject properties to
petitioners and spouses Bondoc due to irregularities in the documents of conveyance offered
by petitioners.as well as the circumstances surrounding the execution of the same.
Specifically, the Extra-Judicial Settlement was notarized by a notary public who was not
duly commissioned as such on the date it was executed.12 The Deed of Sale was undated,
the date of the acknowledgment therein was left blank, and the typewritten name "Pedro
Riñoza, Husband" on the left side of the document was not signed.13 The trial court also
observed that both documents were never presented to the Office of the Register of Deeds
for registration and that the titles to the subject properties were still in the names of Pedro
and his second wife Benita. In addition, the supposed notaries and buyers of the subject
properties were not even presented as witnesses who supposedly witnessed the signing and
execution of the documents of conveyance.14 On the basis thereof, the trial court ruled in
favor of respondents, in its Judgment, the pertinent portions of
its fallo provide:LawlibraryofCRAlaw

WHEREFORE, foregoing premises considered, judgment is hereby rendered as

follows:LawlibraryofCRAlaw

xxxx

4. a) Declaring as a nullity the Extra-Judicial Settlement with Renunciation, Repudiation and

Waiver of Rights and Sale" (Exh. "1", Villafria) notarized on December 23, 1991 by Notary
Public Antonio G. Malonzo of Manila, Doc. No. 190, Page No. 20, Book No. IXII, Series of
1991.

b) Declaring as a nullity the Deed of Absolute Sale (Exh. "2", Villafria), purportedly executed
by Benita T. Riñoza in favor of spouses Francisco Villafria and Maria Butiong, purportedly
notarized by one Alfredo de Guzman, marked Doc. No. 1136, Page No. 141, Book No. XXX,
Series of 1991.

c) Ordering the forfeiture of any and all improvements introduced by defendants Francisco
Villafria dnd Maria Butiong in the properties covered by TCT No. 40807, 40808, 51354 and
51355 of the Register of Deeds for Nasugbu, Batangas.

5. Ordering defendant Francisco Villafria and all persons, whose occupancy within the
premises of the four (4) parcels of land described in par. 4-c above is derived from the
rights and interest of defendant Villafria, to vacate its premises and to deliver possession
thereof, and all improvements existing thereon to plaintiffs, for and in behalf of the estate of
decedent Pedro L. Riñoza.

6. Declaring the plaintiffs and the defendants-heirs in the Amended Complaint to be the
legitimate heirs of decedent Pedro L. RifSoza, each in the capacity and degree established,
as well as their direct successors-in-interest, and ordering the defendant Registrar of Deeds
to issue the corresponding titles in their names in the proportion established by law, pro
indiviso, in TCT Nos. 40807, 40808, 51354, 51355 and 40353 (after restoration) within ten
(10) days from finality of this Decision, upon payment of lawful fees, except TCT No. 40353,
which shall be exempt from all expenses for its restoration.

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With no costs.

SO ORDERED.15

On appeal, the CA affirmed the trial court's Judgment in its Decision16 dated October 31,
2006 in the following wise:LawlibraryofCRAlaw

The person before whom the resort deed was acknowledged, Alfredo de Guzman,
was not commissioned as a notary public from 1989 to July 3, 1991, the date the
certification was issued. Such being the case, the resort deed is not a public
document and the presumption of- regularity accorded to public documents will
not apply to the same. As laid down in Tigno, el al. v. Aquino, et al.:LawlibraryofCRAlaw

The validity of a notarial certification necessarily derives from the authority of the notarial
officer. If the notary public does net have the capacity to notarize a document, but
does so anyway, then the document should be treated as unnotarized. The rule may
strike as rather harsh, and perhaps may prove to be prejudicial to parties in good faith
relying on the proferred authority of the notary public or the person pretending to be one.
Still, to admit otherwise would render merely officious the elaborate process devised by this
Court in order that a lawyer may receive a notarial commission. Without such a rule, the
notarization of a document by a duly-appointed notary public will have the same
legal effect as one accomplished by a non-lawyer engaged in pretense.

The notarization of a document carries considerable legal effect. Notarization of a private

document converts such document into a public one, and renders it admissible in
court without further proof of its authenticity. Thus, notarization is not an empty
routine; to the contrary, it engages public interest in a substantial degree and the protection
of that interest requires preventing those who are not qualified or authorized to act as
notaries public from imposing upon the public and the courts and administrative offices
generally.Parenthetically, the settlement/family home deed cannot be considered a
public document. This is because the following cast doubt on the document's
authenticity, to wit:LawlibraryofCRAlaw

1.) The date of its execution was not indicated;

2.) The amount of consideration was superimposed;
3.) It was not presented to the Registry of Deeds of Nasugbu, Batangas for
annotation; and
4.) Not even the supposed notary public," Alfredo de Guzman, or the purported
buyer, the Spouses Rolando and Ma. Cecilia Bondoc, were presented as witnesses.

Concededly, the absence of notarization in the resort deed and/or the lacking details in the
settlement/family home deed did not necessarily invalidate the transactions evidenced by
the said documents. However, since the said deeds are private documents, perforce,
their due execution and authenticity becomes subject to the requirement of proof
under the Rules on Evidence, Section 20, Rule 132 of which provides:LawlibraryofCRAlaw
Sec. 20. Proof of private document. - Before any private document offered as authentic is
received in evidence, its due execution aijd .authenticity must be proved
either:LawlibraryofCRAlaw

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.The
Complaining Heirs insist that the settlement/family home and the resort deed are void as
their signatures thereon are forgeries as opposed to the Villafrias who profess the deeds'

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enforceability. After the Complaining Heirs presented proofs in support of their
claim that their signatures were forged, the burden then fell upon the Villafrias to
disprove the same, or conversely, to prove the authenticity and due execution of
the said deeds. The Villafrias failed in this regard.

As aforestated, the Villafrias did not present as witnesses (a) the notary public
who purportedly notarized the questioned instrument, (b) the witnesses who
appeared] in the instruments as eyewitnesses to the signing, or (c) an expert to
prove the authenticity and genuineness of all the signatures appearing o,n the
said instruments. Verily, the rule that, proper foundation must be laid for the
admission of documentary evidence; that is, the identity and authenticity of the
document must be reasonably established as a prerequisite to its admission, was
prudently observed by the lower court when it refused to admit the
settlement/family home and the resort deeds as their veracity are doubtful.17
Aggrieved, petitioners, substituted by their son Ruel Villafria, filed a Motion for
Reconsideration dated November 24, 2006 raising the trial court's lack of jurisdiction. It was
alleged that when the Complaint for Judicial Partition with Annulment of Title and Recovery
of Possession was filed, there was yet no settlement of Pedro's estate, determination as to
the nature thereof, nor was there an identification of the number of legitimate heirs. As
such, the trial court ruled on the settlement of the intestate estate of Pedro in its ordinary
jurisdiction when the action filed was for Judicial Partition. Considering that the instant
action is really one for settlement of intestate estate, the trial court, sitting merely in its
probate jurisdiction, exceeded its jurisdiction when it ruled upon the issues of forgery and
ownership. Thus, petitioner argued that said ruling is void and has no effect for having been
rendered without jurisdiction. The Motion for Reconsideration was, however, denied by the
appellate court on February 26, 2007.

On appeal, this Court denied on June 20, 2007, petitioner's Petition for Review
on Certiorari for submitting a verification of the petition, a certificate of non-forum shopping
and an affidavit of service that failed to comply with the 2004 Rules on Notarial Practice
regarding competent evidence of affiant's identities.18 In its Resolution19 dated September
26, 2007, this Court also denied petitioner's Motion for Reconsideration in the absence of
any compelling reason to warrant a modification of the previous denial. Thus, the June 20,
2007 Resolution became final and executory on October 31, 2007 as certified by the Entry
of Judgment issued by the Court.20redarclaw

On January 16, 2008, the Court further denied petitioner's motion for leave to admit a
second motion for reconsideration of its September 26, 2007 Resolution, considering that
the same is a prohibited pleading under Section 2, Rule 52, in relation to Section 4, Rule 56
of the 1997 Rules of Civil Procedure, as amended. Furthermore, petitioner's letter dated
December 18, 2007 pleading the Court to take a second, look at his petition for review
on certiorari and that a decision thereon be rendered based purely on its merits was noted
without action.21redarclaw

Unsatisfied, petitioner wrote a letter dated March 24, 2008 addressed to then Chief Justice
Reynato S. Puno praying that a decision on the case be rendered based on the .merits and
not on formal requirements "as he stands to lose everything his parents had left him just
because the verification against non-forum shopping is formally defective." However, in
view of the Entry of Judgment having been made on October 31, 2007, the Court likewise
noted said letter without action.22redarclaw

On November 27, 2008, the RTC issued an Order, issuing a Partial Writ of Execution of its
October 1, 2001 Decision with respect to the portions disposing of petitioner's claims as

6
affirmed by the CA.

The foregoing notwithstanding, petitioner filed, on February 11, 2009, a Petition for
Annulment of Judgment and Order before the CA assailing the October 1, 2001 Decision as
well as the November 27, 2008 Order of the RTC on the grounds of extrinsic fraud and lack
of jurisdiction. In its Decision dated March 13, 2009, however, the CA dismissed the petition
and affirmed the rulings of the trial court in the following wise:LawlibraryofCRAlaw

Although the assailed Decision of the Court a quo has already become final and executory
and in fact entry of judgment was issued on 31 October 2007, supra, nevertheless, to put
the issues to rest, We deem it apropos to tackle the same.

The Petitioner argues that the assailed Decision and Order of the Court a quo, supra, should
be annulled and set aside on the grounds of extrinsic fraud and lack of jurisdiction.

We are not persuaded,

xxxx

Section 2 of the Rules as stated above provides that the annulment of a judgment may "be
based only on grounds of extrinsic fraud and lack of jurisdiction." In RP v. The Heirs of
Sancho Magdato, the High Tribunal stressed that:LawlibraryofCRAlaw
There is extrinsic fraud when "the unsuccessful party had been prevented from
exhibiting fully his case, by fraud or deception practiced on him by his opponent,
as by keeping him away from court, ... or where the defendant never had
knowledge of the suit, being kept in ignorance by the acts of the
plaintiff; ..."Otherwise put, extrinsic or collateral fraud pertains to such fraud which
prevents the aggrieved party from having a trial or presenting his case to the court, or is
used to procure the judgment without fair submission of the controversy. This refers to acts
intended to keep the unsuccessful party away from the courts as when there is a false
promise of compromise or when one is kept in ignorance of the suit.

The pivotal issues before Us are: (1) whether there was a time during the
proceedings below that the Petitioners ever prevented from exhibiting fully their
case, by fraud or deception, practiced on them by Respondents, and (2) whether
the Petitioners were kept away from the court or kept in ignorance by the acts of
the Respondent?

We find nothing of that sort. Instead, what We deduced as We carefully delved

into the evidentiary facts surrounding the instant case as well as the proceedings
below as shown in the 36-page Decision of the Court a quo, is that the Petitioners
were given ample time to rebut the allegations of the Respondents and had in fact
addressed every detail of Respondent's cause of action against them. Thus,
Petitioners' allegation of the Court a quo's lack of jurisdiction is misplaced.

Our pronouncement on the matter finds support in the explicit ruling of the Supreme Court
in Sps. Santos, et al. v. Sps. Lumbao, thus:LawlibraryofCRAlaw
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
willingness to abide by the resolution of the case which will bar said party from
later on impugning the court's jurisdiction.In fine, under the circumstances obtaining in
this case the Petitioners are stopped from assailing the Court a quo's lack of jurisdiction.

7
Too, We do not find merit in the Petitioners' second issue, supra.

As mentioned earlier, entry of judgment had already been made on the assailed Decision
and Order as early as 31 October 2007.

xxxx

It maybe that the doctrine of finality of judgments permits certain equitable

remedies such as a petition for annulment. But the rules are clear. The annulment
by the Court of Appeals of judgments or final orders and resolutions in civil actions
of the Regional Trial Courts is resorted to only where the ordinary remedies of new
trial, appeal, petition for relief or other appropriate remedies are no longer
available through no fault of the petitioner, supra.

If Petitioners lost their chance to avail themselves of the appropriate remedies or

appeal before the Supreme Court, that is their own look out. The High Tribunal has
emphatically pointed out in Mercado, et al. v. Security Bank
Corporation, thus:LawlibraryofCRAlaw
A principle almost repeated to satiety is that "an action for annulment of judgment cannot
and is not a substitute for the lost remedy of-appeal." A party must have first availed of
appeal, a motion for new trial or a petition for relief before an action for
annulment can prosper. Its obvious rationale is to prevent the party from
benefiting from his inaction or negligence. Also, the action for annulment of
judgment must be based either on (a) extrinsic fraud or (b) lack of jurisdiction or
denial of due process. Having failed to avail of the remedies and there being a
clear showing that neither of the grounds was present, the petition must be
dismissed. Only a disgruntled litigant would find such legal disposition
unacceptable.23When the appellate court denied Petitioner's Motion for Reconsideration in
its Resolution dated April 23, 2009, petitioner filed the instant Petition for Review
on Certiorari on June 10, 2009, invoking the following ground:LawlibraryofCRAlaw

I.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT RULING THAT THE
REGIONAL TRIAL COURT, BRANCH 14, NASUGBU, BATANGAS, ACTED WITHOUT
JURISDICTION IN ENTERTAINING THE SPECIAL PROCEEDING FOR THE SETTLEMENT OF
ESTATE OF PEDRO RIÑOZA AND THE CIVIL ACTION FOR ANNULMENT OF TITLE OF THE
HEIRS AND THIRD PERSONS IN ONE PROCEEDING.24
Petitioner asserts that while the complaint filed by respondents was captioned as "Judicial
Partition with Annulment of Title and Recovery of Possession," the allegations therein show
that the cause of action is actually one for settlement of estate of decedent Pedro.
Considering that settlement of estate is a special proceeding cognizable by a probate court
of limited jurisdiction while judicial partition with annulment of title and recovery of
possession are ordinary civil actions cognizable by a court of general jurisdiction, the trial
court exceeded its jurisdiction in entertaining the latter while it was sitting merely in its
probate jurisdiction. This is in view of the prohibition found in the Rules on the joinder of
special civil actions and ordinary civil actions.25 Thus, petitioner argued that the ruling of the
trial court is void and has no effect for having been rendered in without jurisdiction.

Petitioner also reiterates the arguments raised before the appellate court that since the
finding of forgery relates only to the signature of respondents and not to their co-heirs who
assented to the conveyance, the transaction should be considered valid as to them.
Petitioner also denies the findings of the courts below that his parents are builders in bad

8
faith for they only took possession of the subject properties after the execution of the
transfer documents and after they paid the consideration on the sale.

The petition is bereft of merit.

Petitioner maintains that since respondents' complaint alleged the following causes of
action, the same is actually one for settlement of estate and not of judicial
partition:LawlibraryofCRAlaw

FIRST CAUSE OF ACTION

1. That Pedro L. Riñoza, Filipino and resident of Nasugbu, Batangas at the time of his
death, died intestate on November 16, 1989. Copy of his death certificate is hereto attached
as Annex "A";

2. That Plaintiffs together with the Defendants enumerated from paragraph 2-A to 2-

J are the only known heirs of the above-mentioned decedent. The plaintiffs and the
Defendants Rolando, Rafael, Antonio, Angelito, Lorna all surnamed Riñoza, and Myrna R.
Limon or Myrna R. Rogador, Epifanio Belo and Ma. Theresa R. Demafelix are the decedent's
legitimate children with his first wife, while Benita Tenorio Rifioza, is the decedent's widow
and Bernadette Riñoza, the decedent's daughter with said widow. As such, said parties
are co-owners by virtue of an intestate inheritance from the decedent, of the
properties enumerated in the succeeding paragraph;

3. That the decedent left the following real properties all located in Nasugbu,
Batangas:LawlibraryofCRAlaw

xxxx

16. That the estate of decedent Pedro L. Riñoza has no known legal indebtedness;

17. That said estate remains undivided up to this date and it will be to the best
interest of all heirs that same be partitioned judicially.26

Petitioner is mistaken. It is true that some of respondents' causes of action pertaining to the
properties left behind by the decedent Pedro, his known heirs, and the nature and extent of
their interests thereon, may fall under an action for settlement of estate. However, a
complete reading of the complaint would readily show that, based on the nature of the suit,
the allegations therein, and the reliefs prayed for, the action is clearly one for judicial
partition with annulment of title and recovery of possession.

Section 1, Rule 74 of the Rules of Court provides:LawlibraryofCRAlaw

RULE 74
Summary Settlement of Estate

Section 1. Extrajudicial settlement by agreement between heirs. — If the decedent left

no will and no debts and the heirs are all of age, or the minors are represented by
their judicial or legal representatives duly authorized for the purpose, the parties may
without securing letters of administration, divide the estate among themselves as they
see fit by means of a public instrument filed in the office of the register of deeds, and should
they disagree, they may do so in an ordinary action of partition. If there is only one

9
heir, he may adjudicate to himself the entire estate by means of an affidavit filled in the
office of the register of deeds. The parties to an extrajudicial settlement, whether by public
instrument or by stipulation in a pending action for partition, or the sole heir who
adjudicates the entire estate to himself by means of an affidavit shall file, simultaneously
with and as a condition precedent to the filing of the public instrument, or stipulation in the
action for partition, or of the affidavit in the office of the register of deeds, a bond with the
said register of deeds, in an amount equivalent to the value of the personal property
involved as certified to under oath by the parties concerned and conditioned upon the
payment of any just claim that may be filed under section 4 of this rule. It shall be
presumed that the decedent left no debts if no creditor files a petition for letters of
administration within two (2) years after the death of the decedent.

The fact of the extrajudicial settlement or administration shall be published in a newspaper

of general circulation in the manner provided in the next succeeding section; but no
extrajudicial settlement shall be binding upon any person who has not participated therein
or had no notice thereof.27

In this relation, Section 1, Rule 69 of the Rules of Court provides:LawlibraryofCRAlaw

Section 1. Complaint in action for partition of real estate. — A person having the right to
compel the partition of real estate may do so as provided in this Rule, setting forth in his
complaint the nature and extent of his title and an adequate description of the real
estate of which partition is demanded and joining as defendants all other persons
interested in the property.28

As can be gleaned from the foregoing provisions, the allegations of respondents in their
complaint are but customary, in fact, mandatory, to a complaint for partition of real estate.
Particularly, the complaint alleged: (1) that Pedro died intestate; (2) that respondents,
together with their co-heirs, are all of legal age, with the exception of one who is
represented by a judicial representative duly authorized for the purpose; (3) that the heirs
enumerated are the only known heirs of Pedro; (4) that there is an account and description
of all real properties left by Pedro; (5) that Pedro's estate has no known indebtedness; and
(6) that respondents, as rightful heirs to the decedent's estate, pray for the partition of the
same in accordance with the laws of intestacy. It is clear, therefore, that based on the
allegations of the complaint, the case is one for judicial partition. That the complaint alleged
causes of action identifying the heirs of the decedent, properties of the estate, and their
rights thereto, does not perforce make it an action for settlement of estate.

It must be recalled that the general rule is that when a person dies intestate, or, if testate,
failed to name an executor in his will or the executor so named is incompetent, or refuses
the trust, or. fails to furnish the bond required by the Rules of Court, then the decedent's
estate shall be judicially administered and the competent court shall appoint a qualified
administrator in the order established in Section 6 of Rule 78 of the Rules of Court.29 An
exception to this rule, however, is found in the aforequoted Section 1 of Rule 74 wherein
the heirs of a decedent, who left no will and no debts due from his estate, may divide the
estate either extrajudicially or in an ordinary action for partition without submitting the
same for judicial administration nor applying for the appointment of an administrator by the
court.30 The reason is that where the deceased dies without pending obligations, there is no
necessity for the appointment of an administrator to administer the estate for them and to
deprive the real owners of their possession to which they are immediately
entitled.31redarclaw

10
In this case, it was expressly alleged in the complaint, and was not disputed, that Pedro
died without a will, leaving his estate without any pending obligations. Thus, contrary to
petitioner'.s contention, respondents were under no legal obligation to submit me subject
properties of the estate to a special proceeding for settlement of intestate estate, and are,
in fact, encouraged to have the same partitioned, judicially or extrajudicially, by Pereira v.
Court of Appeals:32redarclaw

Section 1, Rule 74 of the Revised Rules of Court, however, does not preclude the heirs from
instituting administration proceedings, even if the estate has no" debts or obligations, if
they do not desire to resort for good reasons to an ordinary action for partition. While
Section 1 allows the heirs to divide the estate among themselves as they may see fit, or to
resort to an ordinary action for partition, the said provision does not compel them to do so if
they have good reasons to take a different course of action. It should be noted that
recourse to an administration proceeding even if the estate has no debts is sanctioned only
if the heirs have good reasons for not resorting to an action for partition. Where' partition
is possible, either in or out of court, the estate should not be burdened with an
administration proceeding without good and compelling reasons.

Thus, it has been repeatedly held that when a person dies without leaving pending
obligations to be paid, his heirs, whether of age or not, are not bound to submit
the property to a judicial administration, which is always long and costly, or to
apply for the appointment of an administrator by the Court. It has been uniformly
held that in such case the judicial administration and the appointment of an
administrator are superfluous and unnecessary proceedings. 33

Thus, respondents committed no error in filing an action for judicial partition instead of a
special proceeding for the settlement of estate as the same is expressly permitted by law.
That the complaint contained allegations inherent in an action for settlement of estate does
not mean that there was a prohibited joinder of causes of action for questions as to the
estate's properties as well as a determination of the heirs, their status as such, and the
nature and extent of their titles to the estate, may also be properly ventilated in partition
proceedings alone.34 In fact, a complete inventory of the estate may likewise be done during
the partition proceedings, especially since the estate has no debts.35 Indeed, where the
more expeditious remedy of partition is available to the heirs, then they may not be
compelled to submit to administration proceedings, dispensing of the risks of delay and of
the properties being dissipated.36redarclaw

Moreover, the fact that respondents' complaint al$o prayed for the annulment of title and
recovery of possession does not strip the trial court off of its jurisdiction to hear and decide
the case. Asking for the annulment of certain transfers of property could very well be
achieved in an action for partition,37 as can be seen in cases where courts determine the
parties' rights arising from complaints asking not only for the partition of estates but also
for the annulment of titles and recovery of ownership and possession of property.38 In fact,
in Bagayas v. Bagayas,39 wherein a complaint for annulment of sale and partition was
dismissed by the trial court due to the impropriety of an action for annulment as it
constituted a collateral attack on the certificates of title of the respondents therein, this
Court found the dismissal to be improper in the following manner:LawlibraryofCRAlaw

In Lacbayan v. Samoy, Jr. (Lacbayan) which is an action for partition premised on

the existence or non-existence of co-ownership between the parties, the Court
categorically pronounced that a resolution on the issue of ownership does not
subject the Torrens title issued over the disputed realties to a collateral attack. It

11
must be borne in mind that what cannot be collaterally attacked is the certificate
of title and not the title itself. As pronounced in Lacbayan:LawlibraryofCRAlaw

There is no dispute that a Torrens certificate of title cannot be collaterally attacked, but that
rule is not material to the case at bar. What cannot be collaterally attacked is the
certificate of title and not the title itself. The certificate referred to is that
document issued by the Register of Deeds known as the TCT. In contrast, the title
referred to by law means ownership which is, more often than not, represented by
that document. Petitioner apparently confuses title with the certificate of title. Title as a
concept of ownership should not be confused with the certificate of title as evidence of such
ownership although both are interchangeably used. (Emphases supplied)

Thus, the RTC erroneously dismissed petitioner's petition for annulment of sale on
the ground that it constituted a collateral attack since she was actually assailing
Rogelio and Orlando's title to the subject lands and not any Torrens certificate of
title over the same.

Indeed, an action for partition does not preclude the settlement of the issue of ownership.
In fact, the determination as to the existence of the same is necessary in the resolution of
an action for partition, as held in Municipality of Biñan v. Garcia:40redarclaw

The first phase of a partition and/or accounting suit is taken up with the
determination of whether or not a co-ownership in fact exists, and a partition is
proper (i.e., not otherwise legally proscribed) and may be made by voluntary agreement of
all the parties interested in the property. This phase may end with a declaration that
plaintiff is not entitled to have a partition either because a co-ownership does not exist, or
partition is legally prohibited. It may end, on ¦ the other hand, with an adjudgment that a
co-ownership does in truth exist, partition is proper in the premises and an accounting of
rents and profits received by the defendant from the real estate in question is in order, x x x

The second phase commences when it appears that "the parties are unable to agree upon
the partition" directed by the court. In that event[,] partition shall be done for the parties by
the [c]ourt with the assistance of not more than three (3) commissioners. This second stage
may well also deal with the rendition of the accounting itself and its approval by the [cjourt
after the- parties have been accorded opportunity to be heard thereon, and an award for
the recovery by the party or parties thereto entitled of their just share in the rents and
profits of the real estate in question, x x x.41redarclaw

An action for partition, therefore, is premised on the existence or non-existence of co-

ownership between the parties.42 Unless and until the issue of co-ownership is definitively
resolved, it would be premature to effect a partition of an estate.43redarclaw

In view of the foregoing, petitioner's argument that the trial court acted without jurisdiction
in entertaining -the action of settlement of estate and annulment of title in a single
proceeding is clearly erroneous for the instant complaint is precisely one for judicial partition
with annulment of title and recovery of possession, filed within the confines of applicable
law and jurisprudence. Under Section 144 of Republic Act No. 7691 (RA 7691),45 amending
Batas Pambansa Big. 129, the RTC shall exercise exclusive original jurisdiction over all civil
actions in which the subject of the litigation is incapable of pecuniary estimation. Since the
action herein was not merely for partition and recovery of ownership but also for annulment
of title and documents, the action is incapable of pecuniary estimation and thus cognizable
by the RTC. Hence, considering that the trial court clearly had jurisdiction in rendering its

12
decision, the instant petition for annulment Sf judgment must necessarily fail.

Note that even if the instant action was one for annulment of title alone, without the prayer
for judicial partition, the requirement of instituting a separate special proceeding for the
determination of the status and rights of the respondents as putative heirs may be
dispensed with, in light of the fact that the parties had voluntarily submitted the issue to the
trial court and had already presented evidence regarding the issue of heirship.46 In Portugal
v. Portugal-Beltran,47 the Court explained:LawlibraryofCRAlaw

In the case at bar, respondent, believing rightly or wrongly that she was the sole
heir to Portugal's estate, executed on February 15, 1988 the questioned Affidavit
of Adjudication under the second sentence of Rule 74, Section 1 of the Revised
Rules of Court. Said rule is an exception to the general rule that when a person
dies leaving a property, it should be judicially administered and the competent
court should appoint a qualified administrator, in the order established in Sec. 6, Rule
78 in case the deceased left no will, or in case he did, he failed to name an executor
therein.

xxxx

It appearing, however, that in the present case the only property of the intestate
estate of Portugal is the Caloocan parcel of land, to still subject it, under the
circumstances of the case, to a special proceeding which could be long, hence, not
expeditious, just to establish the status of petitioners as heirs is not only
impractical; it is burdensome to the estate with the costs and expenses of an
administration proceeding. And it is superfluous in light of the fact that the parties
to the civil case - subject of the present case, could and had already in fact
presented evidence before the trial court which assumed jurisdiction over the case
upon the issues it defined during pre-trial.

In fine, under the circumstances of the present case, there being no compelling reason
to still subject Portugal's estate to administration proceedings since a
determination of petitioners' status as heirs could be achieved in the civil case
filed by petitioners, the trial court should proceed to evaluate the evidence
presented by the parties during the trial and render a decision thereon upon the issues
it defined during pre-trial, x x x.48

Thus, in view of the clarity of respondents' complaint and the causes of action alleged
therein, as well as the fact that the trial court, in arriving at its decision, gave petitioner
more than ample opportunity to advance his claims, petitioner cannot now be permitted to
allege lack of jurisdiction just because the judgment rendered was adverse to them. To
repeat, the action filed herein is one for judicial partition and not for settlement of intestate
estate. Consequently, that respondents also prayed for the annulment of title and recovery
of possession in the same proceeding does not strip the court off of its jurisdiction for asking
for the annulment of certain transfers of property could very well be achieved in an action
for partition.

As for petitioner's contention that the sale must be considered valid as to the heirs who
assented to the conveyance as well as their allegation of good faith, this Court does not find
any Compelling reason to deviate from the ruling of the appellate court. As sufficiently found
by both courts below, the authenticity and due execution of the documents on which
petitioner's claims are based were inadequately proven. They were undated, forged, and

13
acknowledged before a notary public who was not commissioned as such on the date they
were executed. They were never presented to the Register of Deeds for registration. Neither
were the supposed notaries and buyers of the subject properties presented as witnesses.

While it may be argued that Benita, one of the co-heirs to the estate, actually acknowledged
the sale of the resort, the circumstances surrounding the same militate against the fact of
its occurrence. Not only was the Deed of Sale supposedly executed by Benita undated and
unsigned by Pedro, but the document she presented purportedly evidencing her receipt of
her share in the sale, did not refer to any sort of sale but to a previous loan obtained by
Pedro and Benita from a bank.

Moreover, credence must be given on the appellate court's observations as to petitioners'

actuations insofar as the transactions alleged herein are concerned. First, they were
seemingly uncertain as to the number and/or identity of the properties bought by them.49 In
their Answer, they gave the impression that" they bought both the resort and the family
home and yet, during trial, Francisco Villafria claimed they only bought the resort. In fact, it
was only then that they presented the subject Extra-Judicial Settlement and Deed of
Sale.50Second, they never presented any other document which would evidence their actual
payment of consideration to the selling heirs.51Third, in spite of the blatant legal infirmities
of the subject documents of conveyance, petitioners still took possession of the properties,
demolished several cottages, and introduced permanent improvements thereon.

In all, the Court agrees with the appellate court that petitioners failed to adequately
substantiate, with convincing, credible and independently verifiable proof, their claim that
they had, in fact, purchased the subject properties. The circumstances surrounding the
purported transfers cast doubt on whether they actually took place. In substantiating their
claim, petitioners relied solely on the Extra-Judicial Settlement and Deed of Sale, who
utterly failed to prove their authenticity and due execution. They cannot, therefore, be
permitted to claim absolute ownership of the subject lands based on the same.

Neither can they be considered as innocent purchasers for value and builders in good faith.
Good faith consists in the belief of the builder that the land the latter is building on is one's
own without knowledge of any defect or flaw in one's title.52 However, in view of the
manifest defects in the instruments conveying their titles, petitioners should have been
placed on guard. Yet, they still demolished several cottages and constructed improvement
on the properties. Thus, their claim of good faith cannot be given credence.

Indeed, a judgment which has acquired finality becomes immutable and unalterable, hence,
may no longer be modified in any respect except to correct clerical errors or mistakes, all
the issues between the parties being deemed resolved and. laid to rest.53 It is a
fundamental principle in our judicial system and essential to an effective and efficient
administration of justice that, once a judgment has become final, the winning party be, not
through a mere subterfuge, deprived of the fruits of the verdict.54 Exceptions to the
immutability of final judgment are allowed only under the most extraordinary of
circumstances.55 Yet, when petitioner is given more than ample opportunity to be heard,
unbridled access to the appellate courts, as well as unbiased judgments rendered after a
consideration of evidence presented by the parties, as in the case at hand, the Court shall
refrain from reversing the rulings of the courts below in the absence of any showing that the
same were rendered with fraud or lack of jurisdiction.

WHEREFORE, premises considered, the instant petition is DENIED. The Decision and
Resolution, dated March 13, 2009 and April 23, 2009, respectively, of the Court Appeals in
CA-G.R. SP No. 107347, which affirmed the Judgment dated October 1, 2001 of the

14
Regional Trial Court of Nasugbu, Batangas, Branch 14, in Civil Case No. 217, insofar as it
concerns the resort covered by Transfer Certificates of Title No. 51354 and No. 51355, and
family home covered by TCT No. 40807 and 40808, are AFFIRMED.

SO ORDERED.cralawlawlibrary

Velasco, Jr., (Chairperson), Perez,* Leonen,**and Jardeleza, JJ., concur.

15
 [G.R. NO. 161220 : July 30, 2008]

SPOUSES GORGONIO BENATIRO and COLUMBA CUYOS-BENATIRO substituted by

their heirs, namely: Isabelita, Renato, Rosadelia and Gorgonio, Jr., surnamed
Benatiro, and SPOUSES RENATO C. BENATIRO and ROSIE M.
BENATIRO, Respondents, v. HEIRS OF EVARISTO CUYOS, namely: Gloria Cuyos-
Talian, Patrocenia Cuyos-Mijares, Numeriano Cuyos, and Enrique Cuyos,
represented by their attorney-in-fact, Salud Cuyos, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by
petitioners seeking to annul the Decision1 dated July 18, 2003 of the Court of Appeals (CA)
and its Resolution2 dated November 13, 2003 denying petitioners' motion for
reconsideration issued in CA-G.R. SP No. 65630.3

Spouses Evaristo Cuyos and Agatona Arrogante Cuyos were blessed with nine children,
namely: Francisco, Victoria, Columba, Lope, Salud, Gloria, Patrocenia, Numeriano, and
Enrique. On August 28, 1966, Evaristo died leaving six parcels of land located in Tapilon,
Daanbantayan, Cebu covered by Tax Declaration (TD) Nos. 000725, 000728, 000729,
000730, 000731, 000732, all under the name of Agatona Arrogante.

On July 13, 1971, one of the heirs, Gloria Cuyos-Talian (respondent Gloria) represented by
Atty. Victor Elliot Lepiten (Atty. Lepiten), filed before the Court of First Instance (CFI) now
Regional Trial Court (RTC), Cebu, Branch XI, a petition4 for Letters of Administration,
docketed as Special Proceeding (SP) No. 24-BN entitled "In the Matter of the Intestate
Estate of Evaristo Cuyos, Gloria Cuyos-Talian, petitioner." The petition was opposed by
Gloria's brother, Francisco, who was represented by Atty. Jesus Yray (Atty. Yray).

In the hearing held on January 30, 1973, both parties together with their respective
counsels appeared. Both counsels manifested that the parties had come to an agreement to
settle their case. The trial court on even date issued an Order5 appointing Gloria as
administratrix of the estate. The dispositive portion reads:

WHEREFORE, letters of administration of the estate of the late Evaristo Cuyos and including
the undivided half accruing to his spouse Agatona Arrogante who recently died is hereby
issued in favor of Mrs. Gloria Cuyos Talian who may qualify as such administratrix after
posting a nominal bond of P1,000.00.6

Subsequently, in the Order7 dated December 12, 1975, the CFI stated that when the
Intestate Estate hearing was called on that date, respondent Gloria and her brother,
oppositor Francisco, together with their respective counsels, appeared; that Atty. Yray,
Francisco's counsel, manifested that the parties had come to an agreement to settle the
case amicably; that both counsels suggested that the Clerk of Court, Atty. Andres C. Taneo
(Atty. Taneo), be appointed to act as Commissioner to effect the agreement of the parties
and to prepare the project of partition for the approval of the court. In the same Order, the
Court of First Instance (CFI) appointed Atty. Taneo and ordered him to make a project of
partition within 30 days from December 12, 1975 for submission and approval of the court.

16
In his Commissioner's Report8 dated July 29, 1976, Atty. Taneo stated that he issued
subpoenae supplemented by telegrams to all the heirs to cause their appearance on
February 28 and 29, 1976 in Tapilon, Daanbantayan, Cebu, where the properties are
located, for a conference or meeting to arrive at an agreement; that out of the nine heirs,
only respondents Gloria, Salud and Enrique Cuyos failed to attend; that per return of the
service, these three heirs could not be located in their respective given addresses; that
since some of the heirs present resided outside the province of Cebu, they decided to go
ahead with the scheduled meeting.

Atty. Taneo declared in his Report that the heirs who were present:

1. Agreed to consider all income of the properties of the estate during the time that
Francisco Cuyos, one of the heirs, was administering the properties of the estate (without
appointment from the Court) as having been properly and duly accounted for.

2. Agreed to consider all income of the properties of the estate during the administration of
Gloria Cuyos Talian, (duly appointed by the Court) also one of the heirs as having been
properly and duly accounted for.

3. Agreed to consider all motions filed in this proceedings demanding an accounting from
Francisco Cuyos and Gloria Cuyos Talian, as having been withdrawn.

4. Agreed not to partition the properties of the estate but instead agreed to first sell it for
the sum of P40,000.00 subject to the condition that should any of the heirs would be in a
position to buy the properties of the estate, the rest of the eight (8) heirs will just receive
only Four Thousand Pesos (P4,000.00) each.

5. Agreed to equally divide the administration expenses to be deducted from their

respective share of P4,000.00.9

The Report further stated that Columba Cuyos-Benatiro (Columba), one of the heirs,
informed all those present in the conference of her desire to buy the properties of the
estate, to which everybody present agreed, and considered her the buyer. Atty. Taneo
explained that the delay in the submission of the Report was due to the request of
respondent Gloria that she be given enough time to make some consultations on what was
already agreed upon by the majority of the heirs; that it was only on July 11, 1976 that the
letter of respondent Gloria was handed to Atty. Taneo, with the information that respondent
Gloria was amenable to what had been agreed upon, provided she be given the sum
of P5,570.00 as her share of the estate, since one of properties of the estate was
mortgaged to her in order to defray their father's hospitalization.

Quoting the Commissioner's Report, the CFI issued the assailed Order10 dated December 16,
1976, the dispositive portion of which reads as follows:

WHEREFORE, finding the terms and conditions agreed upon by the heirs to be in order, the
same being not contrary to law, said compromise agreement as embodied in the report of
the commissioner is hereby approved. The Court hereby orders the Administratrix to
execute the deed of sale covering all the properties of the estate in favor of Columba Cuyos
Benatiro after the payment to her of the sum of P36,000.00. The said sum of money shall
remain in custodia legis, but after all the claims and administration expenses and the estate

17
taxes shall have been paid for, the remainder shall, upon order of the Court, be divided
equally among the heirs.11

The CFI disapproved the claim of respondent Gloria for the sum of P5,570.00, as the same
had been allegedly disregarded by the heirs present during the conference.

In an Order12 dated January 11, 1978, the CFI appointed Lope Cuyos (Cuyos) as the new
administrator of the estate, purportedly on the basis of the motion to relieve respondent
Gloria, as it appeared that she was already residing in Central Luzon and her absence was
detrimental to the early termination of the proceedings.

On May 25, 1979, administrator Cuyos executed a Deed of Absolute Sale13 over the six
parcels of land constituting the intestate estate of the late Evaristo Cuyos in favor of
Columba for a consideration of the sum of P36,000.00.

Sometime in February 1998, the heirs of Evaristo Cuyos, namely: Gloria Cuyos-Talian,
Patrocenia Cuyos-Mijares, Numeriano Cuyos and Enrique Cuyos, represented by their
attorney-in-fact, Salud Cuyos (respondents), allegedly learned that Tax Declaration Nos.
000725, 000728, 000729, 000730, 000731 and 000732, which were all in the name of their
late mother Agatona Arrogante, were canceled and new Tax Declaration Nos., namely, 20-
14129, 20-14130, 20-141131, 20-14132, 2014133 and 20-14134, were issued in Columba's
name; and that later on, Original Certificates of Titles covering the estate of Evaristo Cuyos
were issued in favor of Columba; that some of these parcels of land were subsequently
transferred to the names of spouses Renato C. Benatiro and Rosie M. Benatiro, son and
daughter-in-law, respectively, of petitioners Gorgonio and Columba, for which transfer
certificates of title were subsequently issued; that they subsequently discovered the
existence of the assailed CFI Order dated December 16, 1976 and the Deed of Absolute Sale
dated May 25, 1979.

Respondents filed a complaint against petitioner Gorgonio Benatiro before the Commission
on the Settlement of Land Problems (COSLAP) of the Department of Justice, which on June
13, 2000 dismissed the case for lack of jurisdiction.14

Salud Cuyos brought the matter for conciliation and mediation at the barangay level, but
was unsuccessful.15

On July 16, 2001, Salud Cuyos, for herself and in representation16 of the other heirs of
Evaristo Cuyos, namely: Gloria, Patrocenia, Numeriano,17 and Enrique, filed with the CA a
petition for annulment of the Order dated December 16, 1976 of the CFI of Cebu, Branch
XI, in SP No. 24-BN under Rule 47 of the Rules of Court. They alleged that the CFI Order
dated December 16, 1976 was null and void and of no effect, the same being based on a
Commissioner's Report, which was patently false and irregular; that such report practically
deprived them of due process in claiming their share of their father's estate; that Patrocenia
Cuyos-Mijares executed an affidavit, as well as the unnotarized statement of Gloria stating
that no meeting ever took place for the purpose of discussing how to dispose of the estate
of their parents and that they never received any payment from the supposed sale of their
share in the inheritance; that the report was done in close confederacy with their co-heir
Columba, who stood to be benefited by the Commissioner's recommendation, should the
same be approved by the probate court; that since the report was a falsity, any order
proceeding therefrom was invalid; that the issuance of the certificates of titles in favor of
respondents were tainted with fraud and irregularity, since the CFI which issued the assailed
order did not appear to have been furnished a copy of the Deed of Absolute Sale; that the

18
CFI was not in custodia legis of the consideration of the sale, as directed in its Order so that
it could divide the remainder of the consideration equally among the heirs after paying all
the administration expenses and estate taxes; that the intestate case had not yet been
terminated as the last order found relative to the case was the appointment of Lope as
administrator vice Gloria; that they never received their corresponding share in the
inheritance; and that the act of petitioners in manifest connivance with administrator Lope
amounted to a denial of their right to the property without due process of law, thus, clearly
showing that extrinsic fraud caused them to be deprived of their property.

Herein petitioners contend that respondents' allegation that they discovered the assailed
order dated December 16, 1976 only in February 1998 was preposterous, as respondents
were represented by counsel in the intestate proceedings; thus, notice of Order to counsel
was notice to client; that this was only a ploy so that they could claim that they filed the
petition for annulment within the statutory period of four (4) years; that they have been in
possession of the six parcels of land since May 25, 1979 when the same was sold to them
pursuant to the assailed Order in the intestate proceedings; that no extrinsic fraud attended
the issuance of the assailed order; that Numeriano executed an affidavit in which he
attested to having received his share of the sale proceeds on May 18, 1988; that
respondents were estopped from assailing the Order dated December 16, 1976, as it had
already attained the status of finality.

On July 18, 2003, the CA granted the petition and annulled the CFI order, the dispositive
portion of which reads:

FOR ALL THE FOREGOING REASONS, the instant petition is hereby GRANTED. Accordingly,
the Order issued by the Court of First Instance of Cebu Branch XI dated December 16, 1976
as well as the Certificates of Title issued in the name of Columba Cuyos-Benatiro and the
subsequent transfer of these Titles in the name of spouses Renato and Rosie Benatiro are
hereby ANNULLED and SET ASIDE. Further, SP Proc. Case No. 24-BN is hereby ordered
reopened and proceedings thereon be continued.18

The CA declared that the ultimate fact that was needed to be established was the veracity
and truthfulness of the Commissioner's Report, which was used by the trial court as its basis
for issuing the assailed Order. The CA held that to arrive at an agreement, there was a need
for all the concerned parties to be present in the conference; however, such was not the
scenario since in their separate sworn statements, the compulsory heirs of the decedent
attested to the fact that no meeting or conference ever happened among them; that
although under Section 3(m), Rule 133 on the Rules of Evidence, there is a presumption of
regularity in the performance of an official duty, the same may be contradicted and
overcome by other evidence to prove the contrary.

The CA noted some particulars that led it to conclude that the conference was not held
accordingly, to wit: (1) the Commissioner's Report never mentioned the names of the heirs
who were present in the alleged conference but only the names of those who were absent,
when the names of those who were present were equally essential, if not even more
important, than the names of those who were absent; (2) the Report also failed to include
any proof of conformity to the agreement from the attendees, such as letting them sign the
report to signify their consent as regards the agreed mechanisms for the estate's
settlement; (3) there was lack or absence of physical evidence attached to the report
indicating that the respondents were indeed properly notified about the scheduled
conference. The CA then concluded that due to the absence of the respondents' consent, the
legal existence of the compromise agreement did not stand on a firm ground.

19
The CA further observed that although it appeared that notice of the report was given to
Atty. Lepiten and Atty. Yray, lawyers of Gloria and Francisco Cuyos, respectively, the same
cannot be taken as notice to the other heirs of Evaristo Cuyos; that a lawyer's authority to
compromise cannot be simply presumed, since what was required was the special authority
to compromise on behalf of his client; that a compromise agreement entered into by a
person not duly authorized to do so by the principal is void and has no legal effect,
citing Quiban v. Butalid;19 that being a void compromise agreement, the assailed Order had
no legal effect.

Thus, the CA ruled that the Certificates of Titles obtained by herein petitioners were
procured fraudulently; that the initial transfer of the properties to Columba Cuyos-Benatiro
by virtue of a Deed of Absolute Sale executed by Lope Cuyos was clearly defective, since
the compromise agreement which served as the basis of the Deed of Absolute Sale was void
and had no legal effect.

The CA elaborated that there was no showing that Columba paid the sum of P36,000.00 to
the administrator as consideration for the sale, except for the testimony of Numeriano
Cuyos admitting that he received his share of the proceeds but without indicating the exact
amount that he received; that even so, such alleged payment was incomplete and was not
in compliance with the trial court's order for the administratix to execute the deed of sale
covering all properties of the estate in favor of Columba Cuyos-Benatiro after the payment
to the administratrix of the sum of P36,000.00; that said sum of money shall remain
in custodia legis, but after all the claims and administration expenses and the estate taxes
shall have been paid for, the remainder shall, upon order of the Court, be divided equally
among the heirs.

Moreover, the CA found that the copy of the Deed of Sale was not even furnished the trial
court nor was said money placed under custodia legis as agreed upon; that the Certification
dated December 9, 1998 issued by the Clerk of Court of Cebu indicated that the case had
not yet been terminated and that the last Order in the special proceeding was the
appointment of Lope Cuyos as the new administrator of the estate; thus, the transfer of the
parcels of land, which included the execution of the Deed of Absolute Sale, cancellation of
Tax Declarations and the issuance of new Tax Declarations and Transfer Certificates of Title,
all in favor of petitioners, were tainted with fraud. Consequently, the CA concluded that the
compromise agreement, the certificates of title and the transfers made by petitioners
through fraud cannot be made a legal basis of their ownership over the properties, since to
do so would result in enriching them at the expense of the respondents; and that it was also
evident that the fraud attendant in this case was one of extrinsic fraud, since respondents
were denied the opportunity to fully litigate their case because of the scheme utilized by
petitioners to assert their claim.

Hence, herein petition raising the following issues:

Whether or not annulment of order under Rule 47 of the Rules of Court was a proper
remedy where the aggrieved party had other appropriate remedies, such as new trial,
appeal, or petition for relief, which they failed to take through their own fault.

Whether or not the Court of Appeals misapprehended the facts when it annulled the 24 year
old Commissioner's Report of the Clerk of Court - an official act which enjoys a strong
presumption of regularity - based merely on belated allegations of irregularities in the
performance of said official act.

20
Whether or not upon the facts as found by the Court of Appeals in this case, extrinsic fraud
existed which is a sufficient ground to annul the lower court's order under Rule 47 of the
Rules of Court.20

Subsequent to the filing of their petition, petitioners filed a Manifestation that they were in
possession of affidavits of waiver and desistance executed by the heirs of Lope Cuyos21 and
respondent Patrocenia Cuyos-Mijares22 on February 17, 2004 and December 17, 2004,
respectively. In both affidavits, the affiants stated that they had no more interest in
prosecuting/defending the case involving the settlement of the estate, since the subject
estate properties had been bought by their late sister Columba, and they had already
received their share of the purchase price. Another heir, respondent Numeriano Cuyos, had
also earlier executed an Affidavit23 dated December 13, 2001, stating that the subject estate
was sold to Columba and that she had already received her share of the purchase price on
May 18, 1988. In addition, Numeriano had issued a certification24 dated May 18, 1988,
which was not refuted by any of the parties, that he had already received P4,000.00 in
payment of his share, which could be the reason why he refused to sign the Special Power
of Attorney supposedly in favor of Salud Cuyos for the filing of the petition with the CA.

The issue for resolution is whether the CA committed a reversible error in annulling the CFI
Order dated December 16, 1976, which approved the Commissioner's Report embodying
the alleged compromise agreement entered into by the heirs of Evaristo and Agatona
Arrogante Cuyos.

We rule in the negative.

The remedy of annulment of judgment is extraordinary in character25 and will not so easily

and readily lend itself to abuse by parties aggrieved by final judgments. Sections 1 and 2 of
Rule 47 impose strict conditions for recourse to it, viz.:

Section 1. Coverage. - This Rule shall govern the annulment by the Court of Appeals of
judgments or final orders and resolutions in civil actions of Regional Trial Courts for which
the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies
are no longer available through no fault of the petitioner.

Section 2. Grounds for annulment. - The annulment may be based only on the grounds of
extrinsic fraud and lack of jurisdiction.

Extrinsic fraud shall not be a valid ground if it was availed of, or could have been availed of,
in a motion for new trial or petition for relief.

Although Section 2 of Rule 47 of the Rules of Court provides that annulment of a final
judgment or order of an RTC may be based "only on the grounds of extrinsic fraud and lack
of jurisdiction," jurisprudence recognizes denial of due process as additional .ground
therefor.26

An action to annul a final judgment on the ground of fraud will lie only if the fraud is
extrinsic or collateral in character.27 Extrinsic fraud exists when there is a fraudulent act
committed by the prevailing party outside of the trial of the case, whereby the defeated
party was prevented from presenting fully his side of the case by fraud or deception
practiced on him by the prevailing party.28 Fraud is regarded as extrinsic where it prevents a
party from having a trial or from presenting his entire case to the court, or where it

21
operates upon matters pertaining not to the judgment itself but to the manner in which it is
procured. The overriding consideration when extrinsic fraud is alleged is that the fraudulent
scheme of the prevailing litigant prevented a party from having his day in court.29

While we find that the CA correctly annulled the CFI Order dated December 16, 1976, we
find that it should be annulled not on the ground of extrinsic fraud, as there is no sufficient
evidence to hold Atty. Taneo or any of the heirs guilty of fraud, but on the ground that the
assailed order is void for lack of due process.

Clerk of Court Taneo was appointed to act as Commissioner to effect the agreement of the
heirs and to prepare the project of partition for submission and approval of the court. Thus,
it was incumbent upon Atty. Taneo to set a time and place for the first meeting of the heirs.
In his Commissioner's Report, Atty. Taneo stated that he caused the appearance of all the
heirs of Evaristo Cuyos and Agatona Arrogante Cuyos in the place, where the subject
properties were located for settlement, by sending them subpoenae supplemented by
telegrams for them to attend the conference scheduled on February 28 to 29, 1976. It was
also alleged that out of the nine heirs, only six attended the conference; however, as the CA
aptly found, the Commissioner did not state the names of those present, but only those
heirs who failed to attend the conference, namely: respondents Gloria, Salud and Enrique
who, as stated in the Report, based on the return of service, could not be located in their
respective given addresses.

However, there is nothing in the records that would establish that the alleged subpoenae,
supplemented by telegrams, for the heirs to appear in the scheduled conference were
indeed sent to the heirs. In fact, respondent Patrocenia Cuyos-Mijares, one of the heirs,
who was presumably present in the conference, as she was not mentioned as among those
absent, had executed an affidavit30 dated December 8, 1998 attesting, to the fact that she
was not called to a meeting nor was there any telegram or notice of any meeting received
by her. While Patrocenia had executed on December 17, 2004 an Affidavit of Waiver and
Desistance31 regarding this case, it was only for the reason that the subject estate
properties had been bought by their late sister Columba, and that she had already received
her corresponding share of the purchase price, but there was nothing in the affidavit that
retracted her previous statement that she was not called to a meeting. Respondent Gloria
also made an unnotarized statement32 that there was no meeting held. Thus, the veracity of
Atty. Taneo's holding of a conference with the heirs was doubtful.

Moreover, there was no evidence showing that the heirs indeed convened for the purpose of
arriving at an agreement regarding the estate properties, since they were not even required
to sign anything to show their attendance of the alleged meeting. In fact, the
Commissioner's Report, which embodied the alleged agreement of the heirs, did not bear
the signatures of the alleged attendees to show their consent and conformity thereto.

It bears stressing that the purpose of the conference was for the heirs to arrive at a
compromise agreement over the estate of Evaristo Cuyos. Thus, it was imperative that all
the heirs must be present in the conference and be heard to afford them the opportunity to
protect their interests. Considering that no separate instrument of conveyance was
executed among the heirs embodying their alleged agreement, it was necessary that the
Report be signed by the heirs to prove that a conference among the heirs was indeed held,
and that they conformed to the agreement stated in the Report.

22
Petitioners point out that the Commissioner was an officer of the court and a disinterested
party and that, under Rule 133, Section 3(m) of the Rules on Evidence, there is a
presumption that official duty has been regularly performed.

While, under the general rule, it is to be presumed that everything done by an officer in
connection with the performance of an official act in the line of his duty was legally done,
such presumption may be overcome by evidence to the contrary. We find the instances
mentioned by the CA, such as absence of the names of the persons present in the
conference, absence of the signatures of the heirs in the Commissioner's Report, as well as
absence of evidence showing that respondents were notified of the conference, to be
competent proofs of irregularity that rebut the presumption.

Thus, we find no reversible error committed by the CA in ruling that the conference was not
held accordingly and in annulling the assailed order of the CFI.

Petitioners attached a Certification33 dated August 7, 2003 issued by the Officer In Charge

(OIC), Branch Clerk of Court of the RTC, Branch 11, to show that copies of the
Commissioner's Report were sent to all the heirs, except Salud and Enrique, as well as to
Attys. Lepiten and Yray as enumerated in the Notice found at the lower portion of the
Report with the accompanying registry receipts.34

In Cua v. Vargas,35 in which the issue was whether heirs were deemed constructively
notified of and bound by an extra-judicial settlement and partition of the estate, regardless
of their failure to participate therein, when the extra-judicial settlement and partition has
been duly published, we held:

The procedure outlined in Section 1 of Rule 74 is an ex parte proceeding. The rule

plainly states, however, that persons who do not participate or had no notice of an
extrajudicial settlement will not be bound thereby. It contemplates a notice that
has been sent out or issued before any deed of settlement and/or partition is
agreed upon (i.e., a notice calling all interested parties to participate in the said
deed of extrajudicial settlement and partition), and not after such an agreement
has already been executed as what happened in the instant case with the
publication of the first deed of extrajudicial settlement among heirs.

The publication of the settlement does not constitute constructive notice to the heirs who
had no knowledge or did not take part in it because the same was notice after the fact of
execution. The requirement of publication is geared for the protection of creditors and was
never intended to deprive heirs of their lawful participation in the decedent's estate. In this
connection, the records of the present case confirm that respondents never signed either of
the settlement documents, having discovered their existence only shortly before the filing of
the present complaint. Following Rule 74, these extrajudicial settlements do not bind
respondents, and the partition made without their knowledge and consent is invalid insofar
as they are concerned36 (Emphasis supplied)cralawlibrary

Applying the above-mentioned case by analogy, what matters is whether the heirs were
indeed notified before the compromise agreement was arrived at, which was not
established, and not whether they were notified of the Commissioner's Report embodying
the alleged agreement afterwards.

We also find nothing in the records that would show that the heirs were called to a hearing
to validate the Report. The CFI adopted and approved the Report despite the absence of the

23
signatures of all the heirs showing conformity thereto. The CFI adopted the Report despite
the statement therein that only six out of the nine heirs attended the conference, thus,
effectively depriving the other heirs of their chance to be heard. The CFI's action was
tantamount to a violation of the constitutional guarantee that no person shall be deprived of
property without due process of law. We find that the assailed Order dated December 16,
1976, which approved a void Commissioner's Report, is a void judgment for lack of due
process.

We are not persuaded by petitioners' contentions that all the parties in the intestate estate
proceedings in the trial court were duly represented by respective counsels, namely, Atty.
Lepiten for petitioners-heirs and Atty. Yray for the oppositors-heirs; that when the heirs
agreed to settle the case amicably, they manifested such intention through their lawyers, as
stated in the Order dated January 30, 1973; that an heir in the settlement of the estate of a
deceased person need not hire his own lawyer, because his interest in the estate is
represented by the judicial administrator who retains the services of a counsel; that a
judicial administrator is the legal representative not only of the estate but also of the heirs,
legatees, and creditors whose interest he represents; that when the trial court issued the
assailed Order dated December 16, 1976 approving the Commissioner's Report, the parties'
lawyers were duly served said copies of the Order on December 21, 1976 as shown by the
Certification37 dated August 7, 2003 of the RTC OIC, Clerk of Court; that notices to lawyers
should be considered notices to the clients, since, if a party is represented by counsel,
service of notices of orders and pleadings shall be made upon the lawyer; that upon receipt
of such order by counsels, any one of the respondents could have taken the appropriate
remedy such as a motion for reconsideration, a motion for new trial or a petition for relief
under Rule 38 at the proper time, but they failed to do so without giving any cogent reason
for such failure.

While the trial court's order approving the Commissioner's Report was received by Attys.
Yray and Lepiten, they were the lawyers of Gloria and Francisco, respectively, but not the
lawyers of the other heirs. As can be seen from the pleadings filed before the probate court,
Atty. Lepiten was Gloria's counsel when she filed her Petition for letters of administration,
while Atty. Yray was Francisco's lawyer when he filed his opposition to the petition for
letters of administration and his Motion to Order administrarix Gloria to render an
accounting and for the partition of the estate. Thus, the other heirs who were not
represented by counsel were not given any notice of the judgment approving the
compromise. It was only sometime in February 1998 that respondents learned that the tax
declarations covering the parcels of land, which were all in the name of their late mother
Agatona Arrogante, were canceled; and new Tax Declarations were issued in Columba's
name, and Original Certificates of Titles were subsequently issued in favor of Columba.
Thus, they could not have taken an appeal or other remedies.

Considering that the assailed Order is a void judgment for lack of due process of law, it is no
judgment at all. It cannot be the source of any right or of any obligation.38

In Nazareno v. Court of Appeals,39 we stated the consequences of a void judgment, thus:

A void judgment never acquires finality. Hence, while admittedly, the petitioner in the
case at bar failed to appeal timely the aforementioned decision of the Municipal Trial Court
of Naic, Cavite, it cannot be deemed to have become final and executory. In contemplation
of law, that void decision is deemed non-existent. Thus, there was no effective or operative
judgment to appeal from. In Metropolitan Waterworks & Sewerage System v. Sison, this
Court held that:

24
x x x [A] void judgment is not entitled to the respect accorded to a valid judgment, but may
be entirely disregarded or declared inoperative by any tribunal in which effect is sought to
be given to it. It is attended by none of the consequences of a valid adjudication. It has no
legal or binding effect or efficacy for any purpose or at any place. It cannot affect, impair or
create rights. It is not entitled to enforcement and is, ordinarily, no protection to those who
seek to enforce. All proceedings founded on the void judgment are themselves regarded as
invalid. In other words, a void judgment is regarded as a nullity, and the situation is the
same as it would be if there were no judgment. It, accordingly, leaves the parties litigants in
the same position they were in before the trial.

Thus, a void judgment is no judgment at all. It cannot be the source of any right nor of any
obligation. All acts performed pursuant to it and all claims emanating from it have no legal
effect. Hence, it can never become final and any writ of execution based on it is void: "x x x
it may be said to be a lawless thing which can be treated as an outlaw and slain at sight, or
ignored wherever and whenever it exhibits its head."40 (Emphasis supplied)cralawlibrary

The CFI's order being null and void, it may be assailed anytime, collaterally or in a direct
action or by resisting such judgment or final order in any action or proceeding whenever it
is invoked, unless barred by laches.41 Consequently, the compromise agreement and the
Order approving it must be declared null and void and set aside.

We find no merit in petitioners' claim that respondents are barred from assailing the
judgment after the lapse of 24 years from its finality on ground of laches and estoppel.

Section 3, Rule 47 of the Rules of Court provides that an action for annulment of judgment
based on extrinsic fraud must be filed within four years from its discovery and, if based on
lack of jurisdiction, before it is barred by laches or estoppel.

The principle of laches or "stale demands" ordains that the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by exercising due diligence
could or should have been done earlier, or the negligence or omission to assert a right
within a reasonable time, warrants a presumption that the party entitled to assert it either
has abandoned it or declined to assert it.42

There is no absolute rule as to what constitutes laches or staleness of demand; each case is
to be determined according to its particular circumstances.43 The question of laches is
addressed to the sound discretion of the court and, being an equitable doctrine, its
application is controlled by equitable considerations. It cannot be used to defeat justice or
perpetrate fraud and injustice. It is the better rule that courts, under the principle of equity,
will not be guided or bound strictly by the statute of limitations or the doctrine of laches
when to be so, a manifest wrong or injustice would result.44

In this case, respondents learned of the assailed order only sometime in February 1998 and
filed the petition for annulment of judgment in 2001. Moreover, we find that respondents'
right to due process is the paramount consideration in annulling the assailed order. It bears
stressing that an action to declare the nullity of a void judgment does not prescribe.45

Finally, considering that the assailed CFI judgment is void, it has no legal and binding effect,
force or efficacy for any purpose. In contemplation of law, it is non-existent. Hence, the
execution of the Deed of Sale by Lope in favor of Columba pursuant to said void judgment,
the issuance of titles pursuant to said Deed of Sale, and the subsequent transfers are
void ab initio. No reversible error was thus committed by the CA in annulling the judgment.

25
WHEREFORE, the petition is DENIED and the Decision dated July 18, 2003 and Resolution
dated November 13, 2003 of the Court of Appeals are AFFIRMED. The Regional Trial Court,
Branch XI, Cebu and the Heirs of Evaristo Cuyos are DIRECTED to proceed with SP
Proceedings Case No. 24-BN for the settlement of the Estate of Evaristo Cuyos.

No costs.

SO ORDERED.

26
G.R. No. 156536             October 31, 2006

JOSEPH CUA, petitioner,
vs.
GLORIA A. VARGAS, AURORA VARGAS, RAMON VARGAS, MARITES VARGAS,
EDELINA VARGAS AND GEMMA VARGAS, respondents.

AZCUNA, J.:

This is a petition for review under Rule 45 of the Rules of Court seeking the reversal of the
decision1 dated March 26, 2002, and the resolution2 dated December 17, 2002, of the Court
of Appeals in CA-G.R. SP No. 59869 entitled "Gloria A. Vargas, Aurora Vargas, Ramon
Vargas, Marites Vargas, Edelina Vargas and Gemma Vargas v. Joseph Cua."

The facts are as follows:

A parcel of residential land with an area of 99 square meters located in San Juan, Virac,
Catanduanes was left behind by the late Paulina Vargas. On February 4, 1994, a notarized
Extra Judicial Settlement Among Heirs was executed by and among Paulina Vargas' heirs,
namely Ester Vargas, Visitacion Vargas, Juan Vargas, Zenaida V. Matienzo, Rosario V.
Forteza, Andres Vargas, Gloria Vargas, Antonina Vargas and Florentino Vargas, partitioning
and adjudicating unto themselves the lot in question, each one of them getting a share of
11 square meters. Florentino, Andres, Antonina and Gloria, however, did not sign the
document. Only Ester, Visitacion, Juan, Zenaida and Rosario signed it. The Extra Judicial
Settlement Among Heirs was published in the Catanduanes Tribune for three consecutive
weeks.3

On November 15, 1994, an Extra Judicial Settlement Among Heirs with Sale4 was again
executed by and among the same heirs over the same property and also with the same
sharings. Once more, only Ester, Visitacion, Juan, Zenaida and Rosario signed the document
and their respective shares totaling 55 square meters were sold to Joseph Cua, petitioner
herein.

According to Gloria Vargas, the widow of Santiago Vargas and one of respondents herein,
she came to know of the Extra Judicial Settlement Among Heirs with Sale dated November
16, 1994 only when the original house built on the lot was being demolished sometime in
May 1995.5 She likewise claimed she was unaware that an earlier Extra Judicial Settlement
Among Heirs dated February 4, 1994 involving the same property had been published in the
Catanduanes Tribune.6

After knowing of the sale of the 55 square meters to petitioner, Gloria Vargas tried to
redeem the property, with the following letter7 sent to petitioner on her behalf:

29th June 1995

Mr. Joseph Cua

Capilihan, Virac, Catanduanes

Sir:

27
 This is in behalf of my client, Ms. Aurora Vargas,8 (c/o Atty. Prospero V. Tablizo) one
of the lawful heirs of the late Paulina Vargas, original owner of Lot No. 214 of Virac,
Poblacion covered by ARP No. 031-0031 in her name.

I understand that a document "Extra Judicial Settlement Among Heirs with Sale" was
executed by some of my client's co-heirs and alleged representatives of other co-
heirs, by virtue of which document you acquired by purchase from the signatories to
the said document, five (5) shares with a total area of fifty-five square meters of the
above-described land.

This is to serve you notice that my client shall exercise her right of legal redemption
of said five (5) shares as well as other shares which you may likewise have acquired
by purchase. And you are hereby given an option to agree to legal redemption within
a period of fifteen (15) days from your receipt hereof.

Should you fail to convey to me your agreement within said 15-day-period, proper
legal action shall be taken by my client to redeem said shares.

Thank you.

Very truly yours,

(Sgd.)
JUAN G. ATENCIA

When the offer to redeem was refused and after having failed to reach an amicable
settlement at the barangay level,9 Gloria Vargas filed a case for annulment of Extra Judicial
Settlement and Legal Redemption of the lot with the Municipal Trial Court (MTC) of Virac,
Catanduanes against petitioner and consigned the amount of P100,000 which is the amount
of the purchase with the Clerk of Court on May 20, 1996.10 Joining her in the action were
her children with Santiago, namely, Aurora, Ramon, Marites, Edelina and Gemma, all
surnamed Vargas.

Subsequently, Carlos Gianan, Jr. and Gloria Arcilla, heirs of the alleged primitive owner of
the lot in question, Pedro Lakandula, intervened in the case.11

Respondents claimed that as co-owners of the property, they may be subrogated to the
rights of the purchaser by reimbursing him the price of the sale. They likewise alleged that
the 30-day period following a written notice by the vendors to their co-owners for them to
exercise the right of redemption of the property had not yet set in as no written notice was
sent to them. In effect, they claimed that the Extra Judicial Settlement Among Heirs and the
Extra Judicial Settlement Among Heirs with Sale were null and void and had no legal and
binding effect on them.12

After trial on the merits, the MTC rendered a decision13 in favor of petitioner, dismissing the
complaint as well as the complaint-in-intervention for lack of merit, and declaring the Deed
of Extra Judicial Settlement Among Heirs with Sale valid and binding. The MTC upheld the
sale to petitioner because the transaction purportedly occurred after the partition of the
property among the co-owner heirs. The MTC opined that the other heirs could validly
dispose of their respective shares. Moreover, the MTC found that although there was a
failure to strictly comply with the requirements under Article 1088 of the Civil Code14 for a

28
written notice of sale to be served upon respondents by the vendors prior to the exercise of
the former's right of redemption, this deficiency was cured by respondents' actual
knowledge of the sale, which was more than 30 days before the filing of their complaint,
and their consignation of the purchase price with the Clerk of Court, so that the latter action
came too late. Finally, the MTC ruled that respondents failed to establish by competent
proof petitioner's bad faith in purchasing the portion of the property owned by respondents'
co-heirs.15

On appeal, the Regional Trial Court (RTC), Branch 42, of Virac, Catanduanes affirmed the
MTC decision in a judgment dated November 25, 1999. The matter was thereafter raised to
the Court of Appeals (CA).

The CA reversed the ruling of both lower courts in the assailed decision dated March 26,
2002, declaring that the Extra Judicial Settlement Among Heirs and the Extra Judicial
Settlement Among Heirs with Sale, dated February 4, 1994 and November 15, 1994,
respectively, were void and without any legal effect. The CA held that, pursuant to Section
1, Rule 74 of the Rules of Court, 16 the extrajudicial settlement made by the other co-heirs
is not binding upon respondents considering the latter never participated in it nor did they
ever signify their consent to the same.

His motion for reconsideration having been denied, petitioner filed the present petition for
review.

The issues are:

Whether heirs are deemed constructively notified and bound, regardless of their
failure to participate therein, by an extrajudicial settlement and partition of estate
when the extrajudicial settlement and partition has been duly published; and,

Assuming a published extrajudicial settlement and partition does not bind persons
who did not participate therein, whether the written notice required to be served by
an heir to his co-heirs in connection with the sale of hereditary rights to a stranger
before partition under Article 1088 of the Civil Code17 can be dispensed with when
such co-heirs have actual knowledge of the sale such that the 30-day period within
which a co-heir can exercise the right to be subrogated to the rights of a purchaser
shall commence from the date of actual knowledge of the sale.

Petitioner argues, as follows:

Firstly, the acquisition by petitioner of the subject property subsequent to the extrajudicial
partition was valid because the partition was duly published. The publication of the same
constitutes due notice to respondents and signifies their implied acquiescence thereon.
Respondents are therefore estopped from denying the validity of the partition and sale at
this late stage. Considering that the partition was valid, respondents no longer have the
right to redeem the property.

Secondly, petitioner is a possessor and builder in good faith.

Thirdly, the MTC had no jurisdiction over the complaint because its subject matter was
incapable of pecuniary estimation. The complaint should have been filed with the RTC.

29
Fourthly, there was a non-joinder of indispensable parties, the co-heirs who sold their
interest in the subject property not having been impleaded by respondents.

Fifthly, the appeal to the CA should have been dismissed as it was not properly verified by
respondents. Gloria Vargas failed to indicate that she was authorized to represent the other
respondents (petitioners therein) to initiate the petition. Moreover, the verification was
inadequate because it did not state the basis of the alleged truth and/or correctness of the
material allegations in the petition.

The petition lacks merit.

The procedure outlined in Section 1 of Rule 74 is an ex parte proceeding. The rule plainly
states, however, that persons who do not participate or had no notice of an extrajudicial
settlement will not be bound thereby.18 It contemplates a notice that has been sent out or
issued before any deed of settlement and/or partition is agreed upon (i.e., a notice calling
all interested parties to participate in the said deed of extrajudicial settlement and
partition), and not after such an agreement has already been executed19 as what happened
in the instant case with the publication of the first deed of extrajudicial settlement among
heirs.

The publication of the settlement does not constitute constructive notice to the heirs who
had no knowledge or did not take part in it because the same was notice after the fact of
execution. The requirement of publication is geared for the protection of creditors and was
never intended to deprive heirs of their lawful participation in the decedent's estate. In this
connection, the records of the present case confirm that respondents never signed either of
the settlement documents, having discovered their existence only shortly before the filing of
the present complaint. Following Rule 74, these extrajudicial settlements do not bind
respondents, and the partition made without their knowledge and consent is invalid insofar
as they are concerned.

This is not to say, though, that respondents' co-heirs cannot validly sell their hereditary
rights to third persons even before the partition of the estate. The heirs who actually
participated in the execution of the extrajudicial settlements, which included the sale to
petitioner of their pro indiviso shares in the subject property, are bound by the same.
Nevertheless, respondents are given the right to redeem these shares pursuant to Article
1088 of the Civil Code. The right to redeem was never lost because respondents were never
notified in writing of the actual sale by their co-heirs. Based on the provision, there is a
need for written notice to start the period of redemption, thus:

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 by the
vendor. (Emphasis supplied.)

It bears emphasis that the period of one month shall be reckoned from the time that a co-
heir is notified in writing by the vendor of the actual sale. Written notice is indispensable
and mandatory,20 actual knowledge of the sale acquired in some other manner by the
redemptioner notwithstanding. It cannot be counted from the time advance notice is given
of an impending or contemplated sale. The law gives the co-heir thirty days from the time
written notice of the actual sale within which to make up his or her mind and decide to
repurchase or effect the redemption.21

30
Though the Code does not prescribe any particular form of written notice nor any distinctive
method for written notification of redemption, the method of notification remains exclusive,
there being no alternative provided by law.22 This proceeds from the very purpose of Article
1088, which is to keep strangers to the family out of a joint ownership, if, as is often the
case, the presence of outsiders be undesirable and the other heir or heirs be willing and in a
position to repurchase the share sold.23

It should be kept in mind that the obligation to serve written notice devolves upon the
vendor co-heirs because the latter are in the best position to know the other co-owners
who, under the law, must be notified of the sale.24 This will remove all uncertainty as to the
fact of the sale, its terms and its perfection and validity, and quiet any doubt that the
alienation is not definitive.25 As a result, the party notified need not entertain doubt that the
seller may still contest the alienation. 26

Considering, therefore, that respondents' co-heirs failed to comply with this requirement,
there is no legal impediment to allowing respondents to redeem the shares sold to petitioner
given the former's obvious willingness and capacity to do so.

Likewise untenable is petitioner's contention that he is a builder in good faith. Good faith
consists in the belief of the builder that the land the latter is building on is one's own
without knowledge of any defect or flaw in one's title.27 Petitioner derived his title from the
Extra Judicial Settlement Among Heirs With Sale dated November 15, 1994. He was very
much aware that not all of the heirs participated therein as it was evident on the face of the
document itself. Because the property had not yet been partitioned in accordance with the
Rules of Court, no particular portion of the property could have been identified as yet and
delineated as the object of the sale. This is because the alienation made by respondents' co-
heirs was limited to the portion which may be allotted to them in the division upon the
termination of the co-ownership. Despite this glaring fact, and over the protests of
respondents, petitioner still constructed improvements on the property. For this reason, his
claim of good faith lacks credence.

As to the issue of lack of jurisdiction, petitioner is estopped from raising the same for the
first time on appeal. Petitioner actively participated in the proceedings below and sought
affirmative ruling from the lower courts to uphold the validity of the sale to him of a portion
of the subject property embodied in the extrajudicial settlement among heirs. Having failed
to seasonably raise this defense, he cannot, under the peculiar circumstances of this case,
be permitted to challenge the jurisdiction of the lower court at this late stage. While it is a
rule that a jurisdictional question may be raised at any time, an exception arises where
estoppel has already supervened.

Estoppel sets in when a party participates in all stages of a case before challenging the
jurisdiction of the lower court. One cannot belatedly reject or repudiate its decision after
voluntarily submitting to its jurisdiction, just to secure affirmative relief against one's
opponent or after failing to obtain such relief. The Court has, time and again, frowned upon
the undesirable practice of a party submitting a case for decision and then accepting the
judgment, only if favorable, and attacking it for lack of jurisdiction when adverse.28

Petitioner's fourth argument, that there is a non-joinder of indispensable parties, similarly

lacks merit. An indispensable party is a party-in-interest without whom there can be no final
determination of an action and who is required to be joined as either plaintiff or
defendant.29 The party's interest in the subject matter of the suit and in the relief sought is
so inextricably intertwined with the other parties that the former's legal presence as a party

31
to the proceeding is an absolute necessity. Hence, an indispensable party is one whose
interest will be directly affected by the court's action in the litigation. In the absence of such
indispensable party, there cannot be a resolution of the controversy before the court which
is effective, complete, or equitable.30

In relation to this, it must be kept in mind that the complaint filed by respondents ultimately
prayed that they be allowed to redeem the shares in the property sold by their co-heirs.
Significantly, the right of the other heirs to sell their undivided share in the property to
petitioner is not in dispute. Respondents concede that the other heirs acted within their
hereditary rights in doing so to the effect that the latter completely and effectively
relinquished their interests in the property in favor of petitioner. Petitioner thus stepped into
the shoes of the other heirs to become a co-owner of the property with respondents. As a
result, only petitioner's presence is absolutely required for a complete and final
determination of the controversy because what respondents seek is to be subrogated to his
rights as a purchaser.

Finally, petitioner contends that the petition filed by respondents with the CA should have
been dismissed because the verification and certificate of non-forum shopping appended to
it were defective, citing specifically the failure of respondent Gloria Vargas to: (1) indicate
that she was authorized to represent her co-respondents in the petition, and (2) state the
basis of the alleged truth of the allegations.

The general rule is that the certificate of non-forum shopping must be signed by all the
plaintiffs or petitioners in a case and the signature of only one of them is
insufficient.31 Nevertheless, the rules on forum shopping, which were designed to promote
and facilitate the orderly administration of justice, should not be interpreted with such
absolute literalness as to subvert their own ultimate and legitimate objective. Strict
compliance with the provisions regarding the certificate of non-forum shopping merely
underscores its mandatory nature in that the certification cannot be altogether dispensed
with or its requirements completely disregarded.32 Under justifiable circumstances, the
Court has relaxed the rule requiring the submission of such certification considering that
although it is obligatory, it is not jurisdictional.33

Thus, when all the petitioners share a common interest and invoke a common cause of
action or defense, the signature of only one of them in the certification against forum
shopping substantially complies with the rules.34 The co-respondents of respondent Gloria
Vargas in this case were her children. In order not to defeat the ends of justice, the Court
deems it sufficient that she signed the petition on their behalf and as their representative.

WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioner.

SO ORDERED.

Puno, J., Chairperson, Sandoval-Gutierrez, Corona, and Garcia, JJ., concur.

32
G.R. No. 147468            April 9, 2003

SPOUSES EDUARDO ARENAS DOMINGO & JOSEFINA CHAVEZ DOMINGO, petitioners,

vs.
LILIA MONTINOLA ROCES, CESAR ROBERTO M. ROCES, ANA INES MAGDALENA
ROCES TOLENTINO, LUIS MIGUEL M. ROCES, JOSE ANTONIO M. ROCES and MARIA
VIDA PRESENTACION ROCES, respondents.

YNARES-SANTIAGO, J.:

This is a petition for review on certiorari of the decision of the Court of Appeals dated
November 22, 2000 in CA-G.R. CV No. 62473,1 as well as the resolution dated March 15,
2001, denying petitioners' Motion for Reconsideration.2

The facts are not in dispute.

The spouses Cesar and Lilia Roces were the owners of two contiguous parcels of land
located on Arayat Street, Mandaluyong, covered by Transfer Certificates of Title Nos. 57217
and 57218.3 On November 13, 1962, the Government Service Insurance System (GSIS)
caused the annotation of an affidavit of adverse claim on the titles alleging that the spouses
have mortgaged the same to it.4

Subsequently, GSIS wrote a letter to Cesar Roces demanding the surrender of the owner's
duplicates of titles. When Roces failed to comply, GSIS filed a petition with the then Court of
First Instance of Rizal, docketed as Civil Case No. R-1359, praying that the owner's
duplicates in Roces' possession be declared null and void and that the Register of Deeds of
Pasig be directed to issue new owner's duplicates to GSIS.5 On September 5, 1977, the
Court of First Instance issued an order granting the petition.6 The order became final and
executory, and TCT Nos. 57217 (11663) and 57218 (11664) were issued in the name of
GSIS.7

Cesar Roces died intestate on January 26, 1980.8 He was survived by his widow, Lilia Roces,
and their children: Cesar Roberto Roces, Ana Ines Magdalena Roces Tolentino, Luis Miguel
M. Roces, Jose Antonio Roces and Maria Vida Presentacion Roces, all of whom are the
respondents in this case.

On July 22, 1992, Reynaldo L. Montinola, a nephew of Lilia Roces, executed an affidavit of
self-adjudication over the Arayat properties. He alleged that the properties were owned by
the spouses Cesar and Lilia Roces, both of whom died intestate, on September 13, 1987
and June 27, 1989, respectively; that the properties were acquired during the existence of
their marriage; that the spouses left no heirs except the brother of Lilia Roces, who was his
father; that neither of the spouses left any will nor any debts; and that he was the sole heir
of the Roces spouses.9

On January 5, 1993, Montinola filed a petition against GSIS with the Regional Trial Court of
Pasig, docketed as Civil Case No. R-4743, praying for the cancellation of TCT Nos. 57217
(11663) and 57218 (11664).10 During the trial, GSIS failed to produce any document
evidencing the alleged real estate mortgage by Roces of the properties. Hence, the trial
court rendered judgment in favor of Montinola, declaring the owner's duplicates of TCT No.
57217 (11663) and 57218 (11664) as null and void and ordering the Registry of Deeds of
Mandaluyong to issue new owner's duplicates of the said titles.11

33
GSIS did not appeal the aforesaid judgment; thus, the same became final and executory.
Accordingly, the Registry of Deeds of Mandaluyong issued TCT No. 7299 in the name of
Montinola in lieu of TCT No. 57218 (11664).12

Sometime in July 1993, Montinola executed a deed of absolute sale of the property covered
by TCT No. 7299 in favor of petitioner spouses Eduardo and Josefina Domingo.13 Thereafter,
TCT No. 7673 was issued in the names of petitioners.

Both TCT Nos. 7299 and 7673 contained the following annotation:

Subject to the provision of Section 4, Rule 74 of the Rules of Court with respect to
the inheritance left by the deceased SPS. CESAR ROCES & LILIA MONTINOLA.14

When respondents learned of the sale of the property to petitioners, they filed a complaint
against Montinola and petitioners with the Regional Trial Court of Pasig. They argued that
the affidavit of self-adjudication was fraudulent because Montinola was not an heir of the
Roces spouses and it was not true that Lilia Roces was dead. Therefore, the affidavit of self-
adjudication, as well as the deed of absolute sale, TCT No. 7299, and TCT No. 7673, all
covering the subject property, were null and void.15

In their answer, petitioners alleged that they were buyers in good faith and that their action
was barred by estoppel and laches.16

After trial, the court a quo rendered judgment in favor of respondents, the dispositive
portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs against the

defendant Reynaldo L. Montinola who is hereby ordered to pay to the plaintiffs the
following sums:

a) P1,200,000.00 as actual damages, with interest thereon at the legal rate of

six (6) per centum per annum until fully paid;

b) Moral damages in the sum of P100,000.00;

c) Exemplary damages in the sum of P50,000.00;

d) Attorney's fees in the reasonable amount of P30,000.00; and costs.

The counterclaim of defendant spouses Eduardo and Josefina Domingo is dismissed

and the complaint against the Register of Deeds is likewise dismissed without costs.

SO ORDERED.17

Respondents appealed to the Court of Appeals, reiterating the reliefs prayed for in their
complaint below.18 On November 22, 2000, the Court of Appeals rendered the assailed
Decision, the decretal portion of which reads:

IN THE LIGHT OF ALL THE FOREGOING, the appeal is GRANTED. The Decision of the
Court a quo appealed from is SET ASIDE AND REVERSED. Another Decision is hereby
rendered in favor of the Appellants as follows:

34
 1. The "Affidavit of Self-Adjudication" (Exhibit "G"), Transfer Certificate of Title No.
7299 (Exhibits "N" and "22", Domingo), the "Deed of Absolute Sale" (Exhibit "20")
and Transfer Certificate of Title No. 7673 (Exhibit "21") are hereby declared null and
void.

2. Transfer Certificate of Title No. 57218 (11664), under the names of Cesar P.
Roces and Lilia Montinola, is hereby reinstated.

3. The Appellees are hereby ordered to pay, jointly and severally, to the Appellants
the amount of P50,000.00 as and by way of attorney's fees.

4. Appellants' claims for actual, moral and exemplary damages are dismissed.

5. The Appellee Reynaldo Montinola is hereby ordered to pay to the Appellees

Spouses Domingo the amount of P1,800,000.00, with interest thereon at the rate of
12% per annum from the date of the Decision of this Court until the said amount is
paid in full by the said Appellee, the other cross-claims of the Appellees, inter se, are
dismissed.

SO ORDERED.19

Petitioners filed a Motion for Reconsideration,20 which was denied in a Resolution dated

March 15, 2000.21 Hence this petition, raising the following errors:

1. THE COURT OF APPEALS ERRED IN HOLDING THAT THE ANNOTATION IN THE

TITLE REGARDING SEC. 4, RULE 74 IS AN ENCUMBRANCE WHICH DISQUALIFIES
PETITIONERS FROM BEING INNOCENT PURCHASERS FOR VALUE;

2. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT IT WAS RESPONDENTS

WHO MADE IT POSSIBLE FOR REYNALDO MONTINOLA TO PERPETUATE THE FRAUD
AND, THEREFORE, THEY SHOULD BE THE ONE TO BEAR RESULTING DAMAGE;

3. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENTS HAVE NO

EXISTING INTEREST IN THE PROPERTY SINCE IT WAS PREVIOUSLY MORTGAGED
AND FORECLOSED BY THE G.S.I.S.; AND

4. THE COURT OF APPEALS ERRED IN HOLDING PETITIONERS LIABLE TO

RESPONDENTS FOR ATTORNEY'S FEES, THEREBY ADDING MORE INJURY TO THEIR
MISFORTUNE.22

The petition lacks merit.

It is true that one who deals with property registered under the Torrens system need not go
beyond the same, but only has to rely on the title. He is charged with notice only of such
burdens and claims as are annotated on the title. However, this principle does not apply
when the party has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry or when the purchaser has knowledge of a
defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent
man to inquire into the status of the title of the property in litigation. One who falls within
the exception can neither be denominated an innocent purchaser for value nor a purchaser
in good faith.23

35
As stated above, the titles, namely, TCT Nos. 7299 and 7673, contained annotations which
made reference to the provisions of Rule 74, Section 4 of the Rules of Court, viz:

SEC. 4. Liability of distributees and estate. — If it shall appear at any time within two
(2) years after the settlement and distribution of an estate in accordance with the
provisions of either of the first two sections of this rule, that an heir or other person
has been unduly deprived of his lawful participation in the estate, such heir or such
other person may compel the settlement of the estate in the courts in the manner
hereinafter provided for the purpose of satisfying such lawful participation. And if
within the same time of two (2) years, it shall appear that there are debts
outstanding against the estate which have not been paid, or that an heir or other
person has been unduly deprived of his lawful participation payable in money, the
court having jurisdiction of the estate may, by order for that purpose, after hearing,
settle the amount of such debts or lawful participation and order how much and in
what manner each distributee shall contribute in the payment thereof, and may issue
execution, if circumstances require, against the bond provided in the preceding
section or against the real estate belonging to the deceased, or both. Such bond and
such real estate shall remain charged with a liability to creditors, heirs, or other
persons for the full period of two (2) years after such distribution, notwithstanding
any transfers of real estate that may have been made.24

The foregoing rule clearly covers transfers of real property to any person, as long as the
deprived heir or creditor vindicates his rights within two years from the date of the
settlement and distribution of estate. Contrary to petitioners' contention, the effects of this
provision are not limited to the heirs or original distributees of the estate properties, but
shall affect any transferee of the properties.

In David v. Malay,25 it was held that the buyer of real property the title of which contain an
annotation pursuant to Rule 74, Section 4 of the Rules of Court cannot be considered
innocent purchasers for value. In the same vein, the annotation at the back of TCT No. 7299
in this case referring to Rule 74, Section 4 of the Rules of Court was sufficient notice to
petitioners of the limitation on Montinola's right to dispose of the property. The presence of
an irregularity which excites or arouses suspicion should prompt the vendee to look beyond
the certificate and investigate the title of the vendor appearing on the face
thereof.26 Purchasers of registered land are bound by the annotations found at the back of
the certificate of title.27

Hence, petitioners cannot be considered buyers in good faith and cannot now avoid the
consequences brought about by the application of Rule 74, Section 4 of the Rules of Court.

Petitioner's claim that respondents were guilty of laches and estoppel is likewise untenable.
Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do
that which, by exercising due diligence, could or should have been done earlier. The
essential elements of laches are: (1) conduct on the part of defendant or one under whom
he claims, giving rise to the situation complained of; (2) delay in asserting complainant's
right after he had knowledge of the defendant's conduct and after he has an opportunity to
sue; (3) lack of knowledge or notice on the part of the defendant that the complainant
would assert the right on which he bases his suit; and (4) injury or prejudice to the
defendant in the event relief is accorded to the complainant.28

36
On the other hand, estoppel by laches arises from the negligence or omission to assert a
right within a reasonable time, warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it.29

In the case at bar, only four months elapsed from the time respondents discovered
Montinola's fraudulent acts, sometime in May 1993, to the time they filed their complaint on
September 6, 1993. This relatively short span of time can hardly be called unreasonable,
especially considering that respondents used this period of time to investigate the transfers
of the property.30 Delay is an indispensable requisite for a finding of estoppel by laches, but
to be barred from bringing suit on grounds of estoppel and laches, the delay must be
lengthy and unreasonable.31 No unreasonable delay can be attributed to respondents in this
case.

WHEREFORE, in view of the foregoing, the instant petition for review is DENIED. The
decision and resolution of the Court of Appeals in CA-G.R. No. CV No. 62473 are
AFFIRMED in toto.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Vitug, Carpio, and Azcuna, JJ., concur.

37