RULE 74
administration or applying for the appointment of an administrator.
Utolo vs Pasion
Nature:
This is an appeal taken by the Leona Pasion Vda de Garcia from the order of
the Court of First Instance of the Province of Tarlac appointing the applicant as
judicial administrator of the property left by the deceased Luz Garcia.
Facts:
Juan Garcia Sanchez died intestate, and in the proceedings instituted in the
Court of First Instance of Tarlac for the administration of his property. Leona
Pasion Vda. de Garcia, the surviving spouse and the herein oppositor, was
appointed judicial administratrix. The said deceased left legitimate children,
named Juan Garcia, jr., Patrocinio Garcia and Luz Garcia who, with the widow,
are the presumptive forced heirs. Luz Garcia married the applicant Pablo G.
Utulo and during the pendency of the administration proceedings of the said
deceased, she died in the province without any legitimate descendants, her
only forced heirs being her mother and her husband. The latter commenced in
the same court the judicial administration of the property of his deceased wife
(special proceedings No. 4188), stating in his petition that her only heirs were
he himself and his mother-in-law, the oppositor, and that the only property left
by the deceased consisted in the share due her from the intestate of her father,
Juan Garcia Sanchez, and asking that he be named administrator of the
property of said deceased. Leona Pasion Vda de Garcia objected to the
petition, opposing the judicial administration of the property of her daughter and
the appointment of the applicant as administrator. She alleged that inasmuch
as the said deceased left no indebtedness, there was no occasion for the said
judicial administration.
Issue:
Whether or not there is a need of appointing judicial administrator
Ruling:
There is no need to appoint judicial administrator. As a general rule that when a
person dies living property in the Philippine Islands, his property should be
judicially administered and the competent court should appoint a qualified
administrator, in the order established in the section, in case the deceased left
no will, or in case he had left one should he fail to name an executor therein.
This rule, however, is subject to the exceptions established by sections 596 and
597 of the Code of Civil Procedure, as finally amended. According to the first,
when all the heirs are of lawful age and there are no debts due from the estate,
they may agree in writing to partition the property without instituting the judicial
Construing the scope of section 596, this court 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 and
the appointment of an administrator are superfluous and unnecessary
proceedings (Ilustre vs.Alaras Frondosa, 17 Phil., 321; Malahacan vs. Ignacio,
19 Phil., 434; Bondad vs. Bondad, 34 Phil., 232; Baldemorvs. Malangyaon, 34
Phil., 367; Fule vs. Fule, 46 Phil., 317).
The SC finally held that, there is no weight in the argument adduced by the
appellee to the effect that his appointment as judicial administrator is necessary
so that he may have legal capacity to appear in the intestate of the deceased
Juan Garcia Sanchez. As he would appear in the said intestate by the right of
the representation, it would suffice for him to allege in proof of his interest that
he is a usufructuary forced heir of his deceased wife who, in turn, would be a
forced heir and an interested and necessary party if she were living. In order to
intervene in said intestate and to take part in the distribution of the property it is
not necessary that the administration of the property of his deceased wife be
instituted — an administration which will take up time and occasion
inconvenience and unnecessary expenses.
N B: This case was decided on Sept 30, 1938
Asuncion vs Dela Cruz
Nature: Summary Settlement of the Estate (Rule 74 Sec.2)
Facts:
The above-entitled proceedings originated with a petition presented in the Court
of First Instance of Tarlac for the summary settlement of the estate of the
deceased Benedicta de la Cruz. The petition alleges that said deceased left at
the time of her death five parcels of land all with original certificates of title in
the name of the said deceased. When moved to dismiss the proceedings on
the ground that the said oppositor had filed claims in the cadastral proceedings
for three of the parcels of land mentioned in the petition. Subsequently the
same oppositor filed another opposition on the ground that the said properties
did not belong to the deceased Benedicta de la Cruz but to oppositor's father;
that if the deceased had any right over the three parcels of land already been
transferred by her to the oppositor; that an undivided two-thirds of the other two
lots had also been ceded to the oppositor for a valuable consideration and the
said decedent had not repurchased the same; etc. After hearing the said
opposition the court found that two of the lots mentioned in the petition had
been mortgaged to one Juan Cojuangco and another mortgaged also to one
Santiago Nicolas, and for this reason the court denied the petition for summary
settlement. But a motion for reconsideration was presented, and in accordance
therewith the court reconsidered its order of dismissal and granted the
summary distribution prayed for, declaring the children of the decedent as her
heirs and assigning to all of them in equal shares, a one-half undivided interest
in each of the parcels mentioned in the petition.
Contention of the appellant:
The lower court erred in finding that the three lots were owned by the deceased
and ordering their distribution to her heirs, in the face of the claim of ownership
asserted by the oppositor-appellant; that it erred in giving course to the
settlement in spite of the fact that the petition in cadastral proceedings had
been presented wherein the oppositor-appellant had claimed the three parcels
of land in question; and that it erred in not denying the summary settlement in
so far as the three lots claimed by the oppositor-appellant are concerned.
Issue:
1.Whether or not the lower court erred in finding that the three lots were owned
by the deceased and ordering their distribution to her heirs, in the face of the
claim of ownership asserted by the oppositor-appellant
2 Whether or not summary settlement should be held in abeyance if there were
third party claiming for the title of the property subject of the said settlement.
Ruling:
1.No. it did not make a definite finding or conclusion to that effect as against the
oppositor-appellant. The court only went to say that there was a presumption
that said properties were still owned by the deceased at the time of her death
and are free from all incumbrances; but it makes the reservation in favor of the
oppositor's claim of the right to a separate action if the claims proprietary rights
over said properties. The court states thus in its order:
If Celestino de la Cruz claims some proprietary rights over these
properties, he can pursue his remedy in a separate and ordinary action
which he should bring against the proper parties.
2.No.In the same manner that the court in an administration proceeding
determines only in a prima facie manner if a property alleged to belong to the
state really belongs to the decedent (Corodova Vda. De Mañalac vs. Ocampo,
73 Phil., 661; Baquial vs. Amihan, 49 Off. Gaz., No. 2, p. 511),so also the court
in a summary settlement proceeding only determines prima facie the ownership
and possession of the properties; but such determination does not prevent the
heirs or third parties from claiming title adverse to the decedent's, which title or
claims must be decided in a separate suit. (Intestate estate of Miguel Guzman.
Guzman vs. Anog and Anog, 37 Phil., 61.) In consonance with these principles
the orders appealed from found prima facie that the lots sought to be distributed
among the heirs of the decedent belong to and were in the possession of the
said decedent at the time of her death. The orders do not deprive the oppositor-
appellant of his right to claim said properties as his own and to institute a
separate action to assert his title thereto as against the decedent or her heirs.
ADELAIDA S. MANECLANG vs. JUAN T. BAUN and AMPARO S. BAUN, ET
AL., defendants. CITY OF DAGUPAN
Facts: On 12 June 1947, Margarita Suri Santos died intestate. She was survived by
her husband Severo Maneclang and nine (9) children. On 30 July 1947, a petition
for the settlement of her estate was filed by Hector S. Maneclang, one of her
legitimate children. At the time of the filing of the petition, the ages of her children
were as follows:
Hector Maneclang - 21, Cesar Maneclang – 19, Oscar Maneclang – 17, Amanda
Maneclang – 16, Adelaida Meneclang – 13, Linda Maneclang – 7, Priscila
Maneclang – 6, Natividad Maneclang – 3, Teresita Maneclang – 2
No guardian ad litem was appointed by the court for the minor children.
On 2 September 1949, Pedro M. Feliciano, the administrator of the intestate estate
of Margarita, filed a petition in asking the court to give him "the authority to dispose
of so much of the estate that is necessary to meet the debts enumerated" in the
petition. While notice thereof was given to the surviving spouse, Severo Maneclang,
no such notice was sent to the heirs of Margarita.
On 9 September 1949, despite the absence of notice to the heirs, the intestate
court issued an Order "authorizing the administrator to mortgage or sell so much of
the properties of the estate for the purposes (sic) of paying off the obligations"
referred to in the petition.
Pursuant to this Order, Oscar Maneclang, the new administrator of the intestate
estate, executed on 4 October 1952 a deed of sale  1 in favor of the City of Dagupan,
represented by its mayor, Angel B. Fernandez involving the lot in dispute.
The City of Dagupan immediately took possession of the land and constructed
thereon a public market.
On 28 September 1965 (13 yrs after the sale), the new judicial administratrix of the
intestate estate, Adelaida S. Maneclang, daughter of the late Margarita Suri Santos,
filed an action for the annulment of the sales made by the previous administrator
Ruling:
As to the notification issue. It does not follow that for purposes of complying with
the requirement of notice under Rule 89 of the Rules of the Court, notice to the
father is notice to the children. Sections 2, 4 and 7 of said Rule state explicitly that
the notice, which must be in be writing, must be given to the heirs,  devisees, and
legatees and that the court shall fix a time and place for hearing such petition and
cause notice to be given to the interested parties.
There can be no dispute that if the heirs were duly represented by counsel or by a
guardian ad litem  in the case of the minors, the notice may be given to such
counsel or guardian ad litem.  In this case, however, only the surviving spouse,
Severo Maneclang, was notified through his counsel. Two of the heirs, Hector
Maneclang and Oscar Maneclang, who were then of legal age, were not
represented by counsel. The remaining seven (7) children were still minors with no
guardian ad litem  having been appointed to represent them. Obviously then, the
requirement of notice was not satisfied. The requisite set forth in the aforesaid
sections of Rule 89 are mandatory and essential. Without them, the authority to sell,
the sale itself and the order approving it would be null and void ab initio.  19 The
reason behind this requirement is that the heirs, as the presumptive owners  since
they succeed to all the rights and obligations of the deceased from the moment of
the latter's death, are the persons directly affected by the sale or mortage and
therefore cannot be deprived of the property except in the manner provided by law.
For want of notice to the children, the Order approving the sale are all void ab
initio as against said children. Severo Maneclang, however, stands on different
ground altogether. Having been duly notified of the application, he was bound by
the said order, sale and approval of the latter.
As to whether the plaintiff is in estoppel from assailing the validity of the
sale. Estoppel is unavailable as an argument against the administratrix of the
estate and against the children.
As to the former, this Court, in Boñaga vs. Soler, supra, reiterated the rule "that a
decedent's representative is not estopped to question the validity of his own void
deed purporting to convey land;  and if this be true of the administrator as to his
own acts, a fortiori, his successor can not be estopped to question the acts of his
predecessor are not conformable to law."  Not being the party who petitioned the
court for authority to sell and who executed the sale, she cannot be held liable for
any act or omission which could give rise to estoppel.
Considering that, except as to Oscar Maneclang who executed the deed of sale in
his capacity as judicial administrator, the rest of the heirs did not participate in such
sale, and considering further that the action was filed solely by the administratrix
without the children being impleaded as parties plaintiffs or intervenors, there is
neither rhyme nor reason to hold these heirs in estoppel. For having executed the
deed of sale, Oscar Maneclang is deemed to have assented to both the motion for
and the actual order granting the authority to sell. Estoppel operates solely against
him.
As to prescription.As to prescription, this Court ruled in the Boñaga case that
"[a]ctions to declare the inexsistence of contracts do not prescribe (Art. 1410,
N.C.C.), a principle applied even before the effectivity of the new Civil Code
(Eugenio, et al. vs. Perdido, et al., supra, citing Tipton vs. Velasco, 6 Phil. 67, and
Sabas vs. Germa , 66 Phil. 471 )."
As to laches. Laches is different from prescription. As the court held in Nielsen &
Co. Inc . vs. Lepanto Consolidated Mining Co.,  26 the defense of laches applies
independently of prescription. While prescription is concerned with the fact of delay,
laches is concerned with the effect of delay.
In the instant case, from time the deed of sale in favor of the City of Dagupan was
executed on 4 October 1952, up to the time of the filing of the complaint for
annulment on 28 September 1965, twelve (12) years, ten (10) months and twenty-
four (24) days had elapsed.
It is an undisputed fact that the City of Dagupan immediately took possession of the
property and constructed thereon a public market; such possession was open,
uninterrupted and continuous. Obviously, Hector, Cesar, Oscar and Amanda were
already of legal age when the deed of sale was executed. As it was Oscar who
executed the deed of sale, he cannot be expected to renounce his own act. With
respect to Hector, Cesar and Amanda, they should have taken immediate steps to
protect their rights. Their failure to do so for thirteen (13) years amounted to such
inaction and delay as to constitute laches. This conclusion, however, cannot apply
to the rest of the children — who were then minors and not represented by any
legal representative. They could not have filed an action to protect their interests;
hence, neither delay nor negligence could be attributed to them as a basis for
laches. Accordingly, the estate is entitled to recover 5/9 of the questioned property.
JULIAN BOÑAGA vs. ROBERTO SOLER, ET AL.
Facts: Spouses Alejandro Ros and Maria Isaac died in 1935 and 1940,
respectively. Intestate proceedings for the settlement of their estate were
commenced. Juan Garza was appointed administrator of the estate. Upon
application, Juan Garza was authorized by the probate court on to sell certain
parcels of land pertaining to the estate. Pursuant hereto, Garza sold said parcels of
land on in favor of appellee Roberto Soler. The heirs of the deceased wife, Maria
Isaac, sold all their shares and interests over certain parcels of land in favor of
appellee Soler.
Sometime during the war, the records of Special Proceeding were destroyed. Upon
reconstitution of these records by court order, Julian Boñaga was issued letters of
administration. The instant action was filed by Boñaga in his capacity as
administrator, seeking to annul the sales in favor of Roberto Soler on the ground
that said transactions were fraudulent made without notice to the heirs of Alejandro
Ros of the hearing of the application to sell.
Nothing in the record would show whether, as required by Rule 90, sections 4 and
7, the application for authority to sell was set for hearing, or that the court ever
caused notice thereof to be issued to the heirs of Alejandro Ros.
Ruling:
A sale of properties of an estate as beneficial to the interested parties, under
Sections 4 and 7, Rule 90, must comply with the requisites therein provided, which
are mandatory. Among these requisites, the fixing of the time and place of hearing
for an application to sell, and the notice thereof to the heirs, are essential; and
without them, the authority to sell, the sale itself, and the order approving it, would
be null and void ab initio.
Rule 90, Section 4, does not distinguish between heirs residing in and those
residing outside the Philippines. Therefore, its requirements should apply
regardless of the place of residence of those required to be notified under said rule.
The contention that the sale was made under Section 2, Rule 90 (wherein notice is
required only to those heirs, etc., residing in the Philippines), is not substantiated by
the record. Neither the deed of sale on August 30, 1944, nor the orders issued by
the probate court in connection there with, show whether, as required by said
Section 2, the personal properties were insufficient to pay the debts and expenses
of administration. There is not even a showing, to start with, that the sale was made
for the purpose of paying debts or expenses of administration (or legacies), a
condition which circumscribes the applicability of that section. On the face of the
reamended complaint at any rate, it does not appear that the contested sale was
one under section 2 of Rule 90; and the same can not be invoked to sustain the
motion to dismiss. Without reception of further evidence to determine whether the
requisites of the applicable provisions of the Rules had been followed, the dismissal
of the action was erroneous and improvident. Plaintiff should at least have been
given a chance to prove his case.
As to the plea of estoppel, the rule is that a decedent's representative is not
estopped to question the validity of his own void deed purporting to convey land
(Chase vs. Cartwright, 22 Am. St. Rep. 207, and cases cited; Meeks vs. Olpherts,
25 L. Ed. (U.S.) 735; 21 Am. Jur. 756, s. 667); and if this be true of the
administrator as to his own acts, a fortiori, his successor can not be estopped to
question the acts of his predecessor are not conformable to law (cf. Walker vs.
Portland Savings Bank, L.R.A. 1915 E, p. 840; 21 Am. Jur. p. 820, s. 785).
As to the plea of prescription. We also find untenable the claim of prescription of
the action. Actions to declare the inexistence of contracts do not prescribe (Art.
1410, N.C.C.), a principle applied even before the effectivity of the new Civil Code
(Eugenio, et al. vs. Perdido, et al., supra., citing Tipton vs. Velasco, 6 Phil. 67 and
Sabas vs. Germa, 66 Phil. 471). The sale on October 14, 1944 by the heirs of Maria
Isaac of whatever interests or participation they might have in the four parcels of
land covered by the deed may be valid (De Guanzon vs. Jalandoni and Ramos, L-
5049, October 31, 1953; De Jesus vs. Daza, 77 Phil. 152; Cea vs. C.A., 84 Phil.
798), yet it could not have effected an immediate absolute transfer of title to
appellee Soler over any part of the parcels of land themselves, much less over their
entirety. Necessarily, the sale was subject to the result of the administration
proceedings, a contingency upon which the deed of sale itself expressly founded
the transaction. By its terms, not only was the existence of possible heirs of
Alejandro Ros recognized, but it also provided for the contingency that said heirs
could yet be declared or adjudicated in the administration proceedings as the sole
owners of the four parcels being sold.
The subsequent registration of those lands covered by the sale, allegedly in the
exclusive name of appellee Roberto Soler, gave rise to an action for reconveyance
based on trust. Assuming that this case is one of constructive trust, and under the
theory that actions to recover property held in constructive trust would prescribe,
there is here no showing as to when the alleged fraud was discovered (Article 1391,
N.C.C.). Hence, it cannot be said that prescription has tolled the action.
Kalalo v. Luz, 34 SCRA 337
On November 17, 1959, plaintiff-appellee Octavio A. Kalalo (hereinafter
referred to as appellee), a licensed civil engineer doing business under the firm
name of O. A. Kalalo and Associates, entered into an agreement (Exhibit A) 1
with defendant-appellant Alfredo J. Luz (hereinafter referred to as appellant), a
licensed architect, doing business under firm name of A. J. Luz and Associates,
whereby the former was to render engineering design services to the latter for
fees, as stipulated in the agreement. Thereafter, Kalalo rendered engineering
services to Luz.
On December 11, 1961, appellee sent to appellant a statement of account
(Exhibit "1"), 3 to which was attached an itemized statement of defendant-
appellant's account (Exh. "1-A"), according to which the total engineering fee
asked by appellee for services rendered amounted to P116,565.00 from which
sum was to be deducted the previous payments made in the amount of
P57,000.00, thus leaving a balance due in the amount of P59,565.00.
On May 18, 1962 appellant sent appellee a resume of fees due to the latter.
Said fees, according to appellant, amounted to P10,861.08 instead of the
amount claimed by the appellee. On June 14, 1962 appellant sent appellee a
check for said amount, which appellee refused to accept as full payment of the
balance of the fees due him.
On August 10, 1962, appellee filed a complaint against, appellant, containing
four causes of action. In one of the causes of action, appellee alleged that for
services rendered in connection with the different projects therein mentioned
there was due him fees in sums consisting of $28,000 (U.S.) and
P100,204.46, excluding interests, of which sums only P69,323.21 had been
paid, thus leaving unpaid the $28,000.00 and the balance of P30,881.25.
The trial court rendered judgment in favor of Kalalo and against Luz, by
ordering the latter to pay plaintiff the sum of P51,539.91 and $28,000.00, from
which shall be deducted the sum of P69,475.46, which the defendant had paid
the plaintiff,
As to this issue, Luz contends that Kalalo was in estoppel and cannot modify
the statements of accounts that he previously gave to Luz
Issue:
W/N Kalalo is in estoppels.
Held:
"Art. 1431. Through estoppel an admission or representation is rendered
conclusive upon the person making it, and cannot be denied or disproved as
against the person relying thereon."
An essential element of estoppel is that the person invoking it has been
influenced and has relied on the representations or conduct of the person
sought to be estopped, and this element is wanting in the instant case. In
Cristobal vs. Gomez, 5 this Court held that no estoppel based on a document
can be invoked by one who has not been mislead by the false statements
contained therein. And in Republic of the Philippines vs. Garcia, et al., 6 this
Court ruled that there is no estoppel when the statement or action invoked as
its basis did not mislead the adverse party. Estoppel has been characterized as
harsh or odious, and not favored in law. 7 When misapplied, estoppel becomes
a most effective weapon to accomplish an injustice, inasmuch as it shuts a
man's mouth from speaking the truth and debars the truth in a particular case. 8
Estoppel cannot be sustained by mere argument or doubtful inference; it must
be clearly proved in all its essential elements by clear, convincing and
satisfactory evidence. 9 No party should be precluded from making out his case
according to its truth unless by force of some positive principle of law, and,
consequently, estoppel in pains must be applied strictly and should not be
enforced unless substantiated in every particular. 10
The essential elements of estoppel in pais may be considered In relation to
the party sought to be estopped, and in relation to the party invoking the
estoppel in his favor. As related to the party to be estopped, the essential
elements are: (1) conduct amounting to false representation or concealment of
material facts or at least calculated to convey the impression that the facts are
otherwise than, and inconsistent with, those which the party subsequently
attempts to assert; (2) intent, or at least expectation that this conduct shall be
acted upon by, or at least influence, the other party; and (3) knowledge, actual
or constructive, of the real facts. As related to the party claiming the estoppel,
the essential elements are (1) lack of knowledge and of the means of
knowledge of the truth as the facts in question; (2), reliance, in good faith, upon
the conduct or statements of the party to be estopped; (3) action or inaction
based thereon of such character as to change the position or status of the party
claiming the estoppel, to his injury, detriment or prejudice. 11
The first essential element in relation to the party sought to be estopped does
not obtain in the instant case, for, as appears in the Report of the
Commissioner, appellee testified "that when he wrote Exhibit 1 and prepared
Exhibit 1-A, he had not yet consulted the services of his counsel and it was only
upon advice of counsel that the terms of the contract were interpreted to him
resulting in his subsequent letters to the defendant demanding payments of his
fees pursuant to the contract Exhibit A." 12 This finding of the Commissioner
was adopted by the trial court. 13 It is established, therefore, that Exhibit 1-A
was written by appellee through ignorance or mistake, Anent this matter, it has
been held that if an act, conduct or misrepresentation of the party sought to be
estopped is due to ignorance founded on innocent mistake, estoppel will not
arise. 14 Regarding the essential elements of estoppel in relation to the party
claiming the estoppel, the first element does not obtain in the instant case, for it
cannot be said that appellant did not know, or at least did not have the means
of knowing, the services rendered, to him by appellee and the fees due thereon
as provided in Exhibit A. The second element is also wanting, for, as adverted
to, appellant did not rely on Exhibit 1-A but consistently denied the accounts
stated therein. Neither does the third element obtain, for appellant did not act
on the basis of the representations in Exhibit 1-A, and there was no change in
his position, to his own injury or prejudice
De Castro v. Ginete, 27 SCRA 623
Facts:
Petitioner Luis G. De Castro and respondent Julio G. Ginete were opposing
candidates for the office of municipal mayor of the municipality of Bulan,
province of Sorsogon, in the general elections held on November 14, 1967. On
January 1, 1968 the board of canvassers, as constituted by the Commission on
Elections, proclaimed De Castro as the winning candidate with a margin of 12
votes over Ginete.
Ginete filed a motion of protest against the election of De Castro before the
Court of First Instance of Sorsogon, alleging the commission of frauds and
irregularities to favor the candidacy of De Castro.
De Castro then filed a so-called "Manifestation and Motion," which is practically
a motion to dismiss the protest upon the ground of estoppel. It is alleged in the
"Manifestation and Motion" that Ginete filed his protest after he had made a
written concession of the election of De Castro, and after he had publicly
declared during the inauguration and induction of De Castro as Mayor that De
Castro had won by a margin of 12 votes and on that occasion he urged the
people of Bulan to cooperate with the administration of De Castro.
De Castro claims that Ginete is in estoppel due to the following:
Petitioner De Castro invited respondent Ginete to attend the ceremony on his
inauguration as municipal mayor, scheduled for January 6, 1968, and said
respondent accepted the invitation. During the inauguration respondent Ginete
accompanied the petitioner to the municipal building and to the plaza where the
inaugural program was held. Respondent Ginete went up the inaugural stage
along with other officials. Before turning over the symbolic key of responsibility
to petitioner De Castro, respondent Ginete delivered a speech saying that the
mayor elect had been proclaimed with a majority vote and that the people of
Bulan should cooperate with his administration. The outgoing mayor Ginete
pleaded with the people that if he had any shortcomings during the four years
of his incumbency that he be forgiven by the people.
It is now urged by petitioner De Castro before this Court that the lower court
should have dismissed the protest because respondent Ginete, by his own acts
and utterances, is estopped from contesting the election of herein petitioner.
Issue:
W/N respondent Ginete is estopped from contesting the election of petitioner
De Castro.
Held:
We cannot sustain the contention of De Castro that Ginete is in estoppel to
contest his election. Estoppel rests on this rule: "Whenever a party has, by his
own declaration, act or omission, intentionally and deliberately led another to
believe a particular thing true, and to act upon such belief, he cannot, in any
litigation arising out of such declaration, act, or omission, be permitted to falsify
it." 2 The elements of estoppel by conduct are: (1) that there must have
been a representation or concealment of material facts; (2) that the
representation must have been made with knowledge of the facts; (3) that
the party to whom it was made must have been ignorant of the truth of the
matter; and (4) that it must have been made with intention that the other
party would act upon it. 3
In the case now before Us, it cannot be said that Ginete had by his acts and
declarations made representations of fact regarding De Castro's election which
were not known to the latter. Ginete simply made a formal recognition of the
fact that De Castro had been proclaimed winner by the municipal board of
canvassers of Bulan, and congratulated him — and this Ginete did only after
the board of canvassers had proclaimed De Castro winner. It can not be said
that De Castro came to know about his having won the election because Ginete
told him so. Ginete did not mislead De Castro to the belief that he had won the
election. It can not be said that De Castro was led to act — in assuming the
office as mayor — because Ginete has made representation to him that he (De
Castro) had won the election. De Castro assumed office as mayor by operation
of law, because he was proclaimed elected by the municipal board of
canvassers in accordance with law. Ginete, by his acts and/or utterances, had
not induced De Castro to believe that his election was unquestionable. Ginete
is not the one called upon to declare the election of De Castro valid, and so De
Castro can not claim that he was induced to believe that he was elected and he
assumed office as mayor simply on the basis of Ginete's acts and utterances.
Ginete never made any statement that he would not question the election of De
Castro. The election case, or the election protest, case that Ginete brought
against De Castro did not arise out of any act or declaration of Ginete. The
election was that Ginete brought against De Castro has for its basis
circumstances that had taken place during the election held on November 14,
1967, or long before Ginete had recognized the proclamation of De Castro as
winner. If De Castro was not the real winner in the elections it would not help
his case in the election protest to assert that Ginete had congratulated him after
he was proclaimed winner by the board of canvassers. We do not see in the
facts and/or circumstances shown by the evidence in this case the elements of
estoppel that would bar Ginete from questioning the election of De Castro.
NIELSON & COMPANY vs. LEPANTO CONSOLIDATED MINING COMPANY
G.R. No. L-21601, Dec. 17, 1966
FACTS: On Jan. 30, 1937, a 5-year contract was executed between Nielson
and Lepanto whereby Nielson operated and managed the mining properties
owned by the Lepanto for a management fee of P2,500.00 a month and a 10%
participation in the net profits resulting from the operation of the mining
properties. This was later renewed in 1941 for another 5 years.
In January, 1942 operation of the mining properties was disrupted on
account of the war. The Japanese occupied the mining properties during the
war and were ousted from the mining properties only in Aug. of 1945. Lepanto
took possession of the properties and its rehabilitation and reconstruction was
not completed until 1948. On June 26, 1948 the mines resumed operation
under the exclusive management of Lepanto.
Nielson and Lepanto had a disagreement as to the status of the
operating contract which as renewed expired in 1947. Under its terms the
management contract shall remain in suspense in case of fortuitous event or
force majeure, such as war or civil commotion, adversely affects the work of
mining and milling.
Nielson held the view that, on account of the war, the contract was
suspended during the war; hence the life of the contract should be considered
extended for such time of the period of suspension. On the other hand, Lepanto
contended that the contract should expire in 1947 as originally agreed upon
because the period of suspension accorded by virtue of the war did not operate
to extend further the life of the contract.
On Feb. 6, 1958, Nielson brought an action against Lepanto to recover
certain sums of money representing damages allegedly suffered by the former
in view of the refusal of the latter to comply with the terms of a management
contract.
ISSUES/ HELD:
1. WON the management contract has been suspended as a result of the
supervening war? YES
In order that the management contract may be deemed suspended two
events must take place which must be brought in a satisfactory manner to the
attention of defendant within a reasonable time, to wit: (1) the event constituting
the force majeure must be reasonably beyond the control of Nielson, and (2) it
must adversely affect the work of mining and milling the company is called
upon to undertake.
The Court take judicial notice that war supervened in our country and
that the mines in the Philippines were either destroyed or taken over by the
occupation forces with a view to their operation, the Lepanto mines included.
Reports by Mr. DeWitt (president of Lepanto) and Mr. Blessing (an
official Nielson) stated that on February of 1942, the mill, power plant, supplies
on hand, equipment, concentrates on hand, and mine, were destroyed upon
orders of the U.S. Army to prevent their utilization by the enemy.
Beginning February, 1942 the operation of the Lepanto mines stopped
or became suspended as a result of the destruction of the mill, power plant and
other important equipment necessary for such operation in view of a cause
which was clearly beyond the control of Nielson and that as a consequence
such destruction adversely affected the work of mining and milling which the
latter was called upon to undertake under the management contract.
Consequently, by virtue of the very terms of said contract the same may be
deemed suspended from February, 1942 and as of that month the contract still
had 60 months to go.
The Lepanto mines were liberated on Aug. 1, 1945, but because of the
period of rehabilitation and reconstruction it cannot be said that the suspension
of the contract ended on that date. Hence, the contract must still be deemed
suspended during the succeeding years of reconstruction and rehabilitation,
and this period can only be said to have ended on June 26, 1948 when the
company officially resumed the mining operations of the Lepanto. The period of
suspension is from Feb. 1942 to June 26, 1948 as urged by Nielson.
2. WON such suspension extended the period of the management
contract for the period of said suspension? YES.
The management contract was extended from June 27, 1948 to June
26, 1953, or for a period of 60 months.
Schoely (officer of both companies) and Nestle (employee of Nelson)
testified that the suspension had the effect of extending the period of the
contract. The standard force majeure clause embodied in the management
contract was taken from similar mining contracts regarding mining operations
and the understanding regarding the nature and effect of said clause was that
when there is suspension of the operation that suspension meant the extension
of the contract.
Records or minutes of the Special Meeting of the Board of Directors of
Lepanto where President DeWitt expressed the opinion that as a result of the
suspension of the mining operation because of the effects of the war the period
of the contract had been extended.
3. WON Nielson is guilty of laches? NO.
The elements of laches are the following: (1) conduct on the part of the
defendant, or of one under whom he claims, giving rise to the situation of which
complaint is made and for which the complaint seeks a remedy; (2) delay in
asserting the complainant's rights, the complainant having had knowledge or
notice of the defendant's conduct and having been afforded an opportunity to
institute a suit; (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,
or the suit is not held barred. Not all the elements are present in this case.
The 1st element is conceded by Nielson when it claimed that Lepanto
refused to pay its management fees, its percentage of profits and refused to
allow it to resume the management operation
As to the 2nd element, while Nielson knew since 1945 that Lepanto
refused to permit it to resume management and that since 1948 Lepanto has
resumed operation of the mines and Nielson filed its complaint only on
February 6, 1958, the delay is justified and as such cannot constitute laches.
Only a period of less than one year had elapsed from the date of the final denial
of the claim[June 25, 1957] to the date of the filing of the complaint [Feb. 6,
1958], which certainly cannot be considered as unreasonable delay.
As to the 3rd element, it cannot be said that Lepanto did not know that
Nielson would assert its rights on which it based suit. Since March 10, 1945,
Nielson already claimed its right to the extension of the contract.
Lastly if there has been some delay in bringing the case to court it was
mainly due to the attempts at arbitration and negotiation made by both parties.
4. WON the action of Nielson prescribed? NO.
The defense of laches applies independently of prescription. Laches is
different from the statute of limitations. Prescription is concerned with the fact of
delay, whereas laches is concerned with the effect of delay. Prescription is a
matter of time; laches is principally a question of inequity of permitting a claim
to be enforced, this inequity being founded on some change in the condition of
the property or the relation of the parties. Prescription is statutory; laches is not.
Laches applies in equity, whereas prescription applies at law. Prescription is
based on fixed time, laches is not.
Lepanto contended that the period to be considered for the prescription
of the claim regarding participation in the profits is only four years, because the
modification of the sharing embodied in the management contract is merely
verbal, no written document to that effect having been presented. This
contention is untenable. A modification, was made in the management contract
relative to the participation in the profits by Nielson, as contained in the minutes
of the special meeting of the Board of Directors of Lepanto held on Aug. 21,
1940, should be considered as a written contract insofar as the application of
the statutes of limitations is concerned. Hence, the action thereon prescribes
within ten (10) years.
The right of Nielson to its 10% participation in the 1941 operations
accrued on Dec. 21, 1941 and the right to commence an action thereon began
on Jan. 1, 1942 so that the action must be brought within 10 years from the
latter date.
In this case, even if complaint was filed only on Feb. 6, 1958 (16y, 1m,
5d), the SC held that the action has not yet prescribed for the following
reasons:
a. Operation of the Moratorium Law: moratorium may be imposed in times of
economic crisis or a natural disaster like a flood or earthquake, to allow
people to return to normal before having to worry about preventing
foreclosures and the like. Operation of the Moratorium Law suspends the
running of the statue of limitations. SC held that the Moratorium Law had
been enforced for 8 years, 2 months and 8 days. Deducting this period from
the time that had elapsed since the accrual of the right of action to the date
of the filing of the complaint, there would be less than 8 years to be counted
for purposes of prescription. Hence appellant's action on its claim of 10%
on the 1941 profits had not yet prescribed.
b. Arbitration clause in the management contract between Nielson and
Lepanto. It requires that any disagreement as to any amount of profits shall
be subject to arbitration before an action may be taken to court. The
evidence shows that an arbitration committee was constituted but it failed to
accomplish its purpose on June 25, 1957.
YUSINGCO vs. ONG HING LIAN
G.R. No. L-26523, Dec.24, 1971
FACTS: On Feb. 13, 1952 Pelagio Yusingco, filed a petition under R.A. No. 26
for the reconstitution of certificates of title covering lots nos. 519, 520, 1014,
1015, 1016, and 1020, alleging, that Alfonso Yusingco having died, his children
formed a partnership called Alfonso Yusingco Hermanos to continue his
business; that the certificates of title to the said lots had also been transferred
to Yusingco Hermanos and prayed, that the transfer certificates of title in the
name of the Yusingco Hermanos which had been lost or destroyed be
reconstituted and the same be cancelled and in lieu thereof transfer certificates
of title be issued in the name of the heirs of Alfonso.
The said petition was opposed by Ong Hing Lian, as administrator of
the estate of the late Ong Bonpin, alleging in effect that he and his co-heirs are
the lawful owners and possessors of the lots covered by the certificates of title
sought to be reconstituted as successors of Ong Bonpin, who at the time of his
death was the lawful owner thereof.
The lower court issued an order denying the petition for reconstitution,
predicated on a finding that Ong Bonpin and his heirs exercised possession of
the lots in concept of owners. After remanding the case twice, the Court of
Appeals affirmed the decision of the lower court on July 30, 1964.
On Oct. 30, 1964, Yusingco filed this 2 nd civil complaint (Accion
Reivindicatoria with damages and preliminary injunction) against Ong Hing
Lian, in his own behalf and/or as administrator of the estate of Ong Bonpin to
recover possession and ownership of the lots.
On Jan. 12, 1965, the defendant filed a motion to dismiss the present
action contending that the same is barred by prior judgment or by the statute of
limitations. On Feb. 23, 1965, defendant filed an amended motion to dismiss,
alleging further that the plaintiffs have no legal capacity to sue, the complaint
states no cause of action, the cause of action has been abandoned, and the
plaintiffs are in estoppel and/or guilty of laches.
In an order dated June 17, 1965, the lower court dismissed the case.
ISSUES/HELD:
1. WON the 2nd civil complaint (Accion Reivindicatoria with damages and
preliminary injunction) was barred by res judicata? YES.
For a prior judgment to constitute a bar to a subsequent case the
following requisites must concur: (1) It must be a final judgment or order; (2) the
court rendering the same must have jurisdiction over the subject matter and
over the parties; (3) It must be a judgment or order of the merits; and (4) there
must be between the two case identity of parties, identity of subject matter, and
identify of action.
 A prior judgment is conclusive in a subsequent suit between the same
parties on the same subject matter, and on the same cause of action, not only
as to matters which were decided in the first action, but also as to every other
matter which the parties could have properly set up in the prior suit.
The judgment in the reconstitution case was on the merits and is now
final and that the reconstitution court had jurisdiction over the subject matter
and over the parties. The present case and the reconstitution suit refer to the
same subject matter — Lots Nos. 519, 520, 1014, 1015, and 1020.
Yusingco dispute the identity of cause of action between the two suits,
contending that the 1st action was merely for the reconstitution of certificates,
wherein the question of possession and ownership cannot be validly passed
upon; whereas the present action is an accion reivindicatoria, the proper action
to determine the question of possession and ownership
In the petition for reconstitution, Yusingco not only asked for the
reconstitution of the certificates of title in the name of Yusingco Hermanos but
also that the certificates, once reconstituted, be cancelled and new ones be
issued in the name of the heirs of Alfonso Yusingco, asserting in effect their
right of ownership over the disputed parcels of lands, and the same was
opposed by Ong Hing Lian who also asserted his right of ownership over the
lands. It is patent that the issue of ownership became the determinative factor
in the success of the petition for reconstitution.
Between the two suits, there is identity of cause of action — the
Yusingcos' claim of ownership over the disputed lost as opposed by Ong Hing
Lian. What is different here is the form of action. But the employment of two
different forms of action, does not enable one to escape the operation of the
principle that one and the same cause of action shall not be twice litigated.
The parties in the two cases are not entirely identical. The only
petitioner in the reconstitution case was Pelagio Yusingco. The CA decision in
the reconstitution case, therefore does not bind his co-heirs, his co-plaintiffs in
the second case for reivindicacion; said decision therefore can only be
considered as res judicata as far as Pelagio Yusingco is concerned, but not as
against his co-heirs.
2. WON Yusingco’s claim over the disputed lots is barred by laches? YES.
The claim of ownership of Pelagio Yusingco over the disputed lots is also
barred by the equitable principle of laches, which requires the ff essential
comments:
a. conduct on the part of the defendant, or one under whom he claims, giving
rise to the situation that led to the complaint and for which the complaint
seeks a remedy;
b. delay in asserting the complainant's rights, the complainant having had
knowledge or notice of the defendant's conduct and having been afforded
an opportunity to institute a suit;
c. 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
d. injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held barred.
The first element is present because Ong Hing Lian and their
predecessors took possession in 1936 of the disputed parcels of land and since
then have been exercising acts ownership over the same, which constitute an
invasion of Yusingco and his predecessors' alleged rights of ownership and
possession.
The second element is present because from 1936 Yusingco could
have instituted the proper action to recover possession and ownership of the
disputed lots, but notwithstanding the invasion of their alleged rights of
possession and ownership, Yusingco knowing of the intrusion because of the
open, adverse and continuous possession by the appellees and their
predecessors instituted a suit only on Oct. 30, 1964 or after 28 years. The fact
that a petition for reconstitution of certificates of title was filed by Yusingco on
Feb. 13, 1952, does not alter the situation; because even if we count as of that
date (Feb. 13, 1952), the fact of delay as an element of laches still obtains
considering that as of that date a period of 16 years had elapsed from 1936.
The third element is likewise present, since from the time Ong Bonpin
and his predecessors took possession of the disputed lots, no voice of protest
was raised by Yusingco even though he knew of the construction of the
buildings being undertaken by the appellees on the disputed lots.
Clear also that the fourth element is present, considering that the
appellees will, in the event relief is granted to the Yusingcos, be deprived not
only of the lots which they acquired for valuable consideration but also of the
valuable permanent improvements which they have introduced on the disputed
lots.
VILLALUZ vs. NEME
G.R. No. L-14676 January 31, 1963
Facts: Maria Rocabo died intestate on February 17, 1937, leaving a parcel of
land and granted her under Homestead Patent. She has 6 children: Pedro,
Severina, Gregoria, Sinforosa, Patricia and Maria.
After the approval of her application, but before granting of the patent, Maria
Rocabo donated the southern portion of the land to Maria, and the northern
portion to Patricia, in two notarial deeds donation, giving them the right to
present their deeds of donations to the Bureau of Lands. Maria and Patricia,
however, forgot and cared not to present the deeds of donation to the Bureau
of Lands.
On March 27, 1930, the patent was granted and O.C.T. No. 217 was issued in
the name of Maria Rocabo. Carlos de Jesus, Maria, Patricia and Sinforosa (3
sisters) executed a deed of extrajudicial partition among themselves, to the
exclusion and without the knowledge and consent of their nephews and nieces,
and in virtue thereof, O.C.T. No. 217 was cancelled and Transfer Certificate of
Title No. 269 was issued in their names after having made representations that
they were the only heirs of their mother, Maria Rocabo.
Plaintiffs filed a complaint for partition of said land and recovery of their
respective shares on the property and accounting of the fruits thereof.
RTC held that the plaintiffs' cause of action had already prescribed.
Issue: WON there was prescription?
Held: No. Sec. 4, Rule 73 of the Rules refers only to the settlement and
distribution of the estate of the deceased by the heirs who make such partition
among themselves in good faith, believing that they are the only heirs with the
right succeed.
In the case at bar, however, the surviving sisters could not have ignored that
they had co-heirs, the children of the 3 brothers who predeceased their mother.
Considering that Maria Rocabo died during the regime of the Spanish Civil
Code, the distribution of her properties should be governed by said Code,
wherein it is provided that between co-heirs, the act to demand the partition of
the inheritance does not prescribe. Verily the 3 living sisters were possessing
the property as administratrices or trustees for and in behalf of the other co-
heirs, plaintiffs-appellants herein, who have the right to vindicate their
inheritance, regardless of the lapse of time.
Moreover, the acquisition of the land in question is governed by the Public Land
Act No. 141 and the Land Registration Law Act No. 496. And considering that
the deed of sale had not been registered in accordance with the said laws, the
same did not constitute a conveyance which would bind or affect the land,
because the registration of a voluntary sale of land is the operative act that
transmits or transfers title.
JAVIER vs. MAGTIBAY
G.R. No. L-6829  December 29, 1954
Facts: Rufina Mercado died intestate, survived by her second husband Eulogio
Magtibay, her only living daughter Catalina Javier and the descendants of her
two deceased daughters — all three daughters being of the first marriage.
Shortly after Rufinas' death, these heirs made an extrajudicial partition of her
properties.
Alleging that there were some properties not included in the partition, one of the
heirs, Catalina Javier, petitioned the court for letters of administration and the
appointment of herself as administratrix. The other heirs opposed the petition
on the ground that there was not necessity for subjecting the estate to judicial
administration since, according to them, the decedent left no debts, all her
properties had already been partitioned and the heirs were all of age or
represented by guardian.
Issue: Is the court justified in issuing letters of administration?
Held: No. When a person dies without leaving pending obligations to be paid,
his heirs, whether of age or not, are bound to submit the property to judicial
administration, which is always long and costly, or to apply for the
appointment of an administrator by the court, "for in such the judicial
administration and the appointment of an administrator are superflous
and unnecessary proceedings."
Where administration proceeding is unnecessary because the estate has no
debts and the more expeditious remedy by partition is available the heirs or the
majority of them may not be compelled to submit the estate to such proceeding.
Since the property of the deceased belongs, from the moment of his death, to
the heirs, "what reason can there be," if there are no debts, "for the
appointment of a judicial administrator to administer the estate for them and to
deprive the real owners of their possession to which they are immediately
entitled." Withholding the inheritance from the heirs by subjecting it to an
administration proceeding for no useful purpose, would only unnecessarily
expose it to the risk of being wasted or squandered as not infrequently
happens.
Take note of the exception to the rule: Section 1 of Rule 74 "does not
preclude the heirs from instituting administration proceedings, even if the estate
has no debts or obligation, if they do not desire to resort for good reasons an
ordinary action of partition." That statement, it should be noted, sanctions
recourse to an administration proceeding even if the estate has no debts only
if, as heren expressly stated, the heirs have good reasons for not resorting
to an action for partition, and is thus a reaffirmance rather than a repudiation
of the doctrine being in line with its policy that 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.
There appearing to be no good reason for burdening of the estate of the
deceased Rufina Mercado with the costs and expenses of an administration
proceeding, the trial court was not justified in issuing letters of administration.
JOSE McMICKING vs. BENITO SY CONBIENG
G.R. No. L-6871            January 15, 1912
21 Phil 211
Road Map:
1902 – Margarita Jose (died) – Engracio Palanca (administrator) – Mariano
Ocampo Lao Sempco and Dy Cunyao (surities)
1904 – Mariano Ocampo Lao Sempco (died) – Doroteo Velasco
(administrator) - Mariano Velasco and Pio de la Guardia Barretto (surities)
1905 - Pio de la Guardia Barretto (died) - Benito Sy Conbieng
(administrator)
Facts: In 1902 one Margarita Jose, died and one Engracio Palanca was
appointed administrator with the will annexed of the estate of the said Margarita
Jose, and Mariano Ocampo Lao Sempco and Dy Cunyao became his
sureties.
After the execution of this bond said Palanca, as such administrator, took
possession of all the property of the said Margarita Jose. In 1904, Mariano
Ocampo Lao Sempco died in the city of Manila. CFI made an order directing
the Palanca to furnish a bond to take the place of the undertaking upon which
said Mariano Ocampo and Dy Cuyao. The bond thus required was duly filed
and the new surities thereon being Juan Fernandez, Luis Saenz de
Vismanos and Alejandro Palanca.
In the same year 1904, Doroteo Velasco was appointed administrator of
Mariano Ocampo Lao Sempco and Mariano Velasco and Pio de la Guardia
Barretto qualified as sureties of the said administrator. Doroteo Velasco, as
administrator, filed with the court a complete report and inventory of the
property of the deceased, together with a statement of all his debts and
liabilities. As a part of this report and inventory said administrator filed an
instrument signed by all of the persons interested in the estate of the said
Mariano Ocampo agreeing to the partition of the estate among themselves
without proceedings in court, at the same time assuming the payment of all
obligations against the estate.
The CFI, upon the request of the administrator and of all parties interested in
the estate of the said Mariano Ocampo, entered an order in said agreement.
Pursuant to such agreement and order of the court approving the same,
Doroteo Velasco, as administrator, delivered to the devisees and legatees of
Mariano Ocampo, all of the property of said decedent pursuant to the terms of
said agreement of partition, leaving in the hands of the administrator no
property or thing of value whatsoever belonging to the said estate. From that
time forward said administrator has not had in his possession or control any of
the assets of the said estate and has not had any participation in the
management thereof. At the time the agreement for participation was made and
signed and at the time of the distribution of the property of the estate pursuant
thereto, no committee had been appointed to hear claims against the estate of
the said Mariano Ocampo, and no notice had been published to creditors of the
said deceased to present their claims against the said estate in the manner
prescribed by law.
In 1908, Palanca was removed from office as administrator of the estate of said
Margarita Jose and Jose McMicking, was appointed in his stead. Palanca
refused to render an account of the property and funds of the estate of the said
Margarita Jose. Instead of so doing, he retained possession of said property
and funds, absconded with the same, and never returned to the Philippine
Islands.
In 1909, Jose McMicking, as administrator, made an application to the court for
the appointment of commissioners of the estate of said Mariano Ocampo for
the purpose of hearing claims against the estate. The commission having been
appointed and qualified, a claim was presented to it by the plaintiff based upon
the defalcation of said Engracio Palanca, as administrator, which claim was
allowed by said commission and later approved by the court, which directed
that the said claim be paid by Doroteo Velasco, if he had sufficient funds to
make such payment. No part of the sum thus found to be due by the
commission has been paid to the representative of the estate of said Margarita
Jose.
In 1905, Pio de la Barretto died and letters of administration were issued to
Benito Sy Conbieng. In 1909, upon the application of McMicking,  a committee
was appointed by CFI Manila to appraise the estate of the said Pio de la
Guardia Barretto, deceased, and to hear claims presented against his estate.
The claim so presented against the estate of Pio de la Guardia Barretto,
deceased, was disallowed by the committee thereof. 
Upon these facts the court having heard the evidence and the arguments of
counsel, rendered judgment in favor of the defendant and against the plaintiff,
dismissing the complaint upon merits, without costs.
Hence this appeal.
Held: The judgement must be affirmed base upon the ground that Doroteo
Velasco, for whom the deceased Pio de la Guardia Barretto was surety, would
not have been liable himself had this action been commenced against him. If
the principal is not liable upon the obligation, the surety cannot be.
At the head of the law of administration of the Philippine Islands stands
sections 596 and 597 of the Code of Civil Procedure. They are as follows:
SEC. 596. Settlement of intestate estates, without legal proceedings, in
certain cases. — Whatever all the heirs of a deceased person are of lawful
 age and legal capacity, and their are no debts due from the intestate estate,
or all the debts have been paid by the heirs, the heirs may, by a family
council as shown under Spanish law, or by agreement between themselves,
duly executed in writing, apportion and divide the estate among themselves,
as they may see fit, without proceedings in court.
SEC. 597. In such case distributees liable for debts. — But if it shall appear,
at any time within two years after such settlement and distribution of the
estate, that there are debts outstanding against the estate which have not
been paid, any creditor may compel the settlement of the estate in the
courts in the manner hereinafter provided, unless his debt shall be paid, with
interest; and the administrator appointed by the court may recover the
assets of the estate from those who have received them, for the purpose of
paying the debts; and the real estate belonging to the deceased shall
remain charged with the liability to creditors for the full period of two years
after such distribution, notwithstanding any transfers thereof that may have
been made.
These sections provide for the voluntary division of the whole property of the
decedent without proceedings in court. These provisions should, therefore, be
given the most liberal construction so that the intent of the framers may be fully
carried out. In the case at the bar we are of the opinion that, the decision of the
property of Mariano Ocampo, deceased, falls within the provisions of said
sections and may be termed, a partition of the property of a decedent
without legal proceedings within the meaning of those sections. The fact
of the prior appointment of an administrator and the filing of an inventory before
such partition is of no consequence so far as the right of the owners to partition
is concerned. The only requisite for such petition prescribed by the law is
that "there are no debts . . . or all the debts have been paid by the heirs."
When the condition is fulfilled the partition can take place, no matter what stage
the administration may have reached.
The basis of the liability of a surety on an administrators' bond is the fault
or failure of the principal. The liability of the principal precedes that of the
surety. If Velasco incurred no liability, then his surety incurred none. When the
persons interested in the estate of Mariano Ocampo agreed voluntarily upon a
partition and division of the property of said estate and the actual partition
followed, the matter passed out of the hands of Velasco as administrator.
Observance of the law discharges obligations; it does not create them; and an
obligation once discharged cannot be re-acted by the act of others in which the
person as to whom it was discharged takes no part.
Moreover, the sureties of an administrator so appointed cannot be held liable
for property which by force of law has been taken from the principal and its
ownership and control turned over to others. Their obligation is that their
principal shall obey the law in the handling and distribution of the estate. Their
obligation is discharged when the estate is legally turned over to those entitled
thereto. The law requires the principal to turn it over to those who bring
themselves within the provisions of section 596. Having turned over the whole
estate under the compelling power of the law, his obligation ceased. The
responsibility of the sureties ceased at the same time. Without their consent
another obligation could not be imposed upon them in relation to the same
principal, and the same property, or apart thereof, especially after the lapse of
two years. Their undertaking was that their principal should discharge one
obligation, not two.
It requires no argument to demonstrate that the administration contemplated by
section 597 is a new administration and one entirely apart from any other
administration theretofore had. This section requires the appointment of a new
administrator, with a new undertaking. The administration under the section is
distinct and separate from any administration which may have been in progress
at the time of the partition and division under section 596. 
After the partition and division provided for in sections 596 and 597 have been
fully consummated, no further administration of the estate can be had unless
there occur the following requisites:
1. There must have been discovered a claim against the estate "within two
years after such settlement and distribution of estate."
2. The creditor holding the claim must be the person who moves the court for
the appointment of an administrator.
In the case at bar:
1. No debt was discovered during the prescribed period. It was nearly four
years after the partition of the estate and the taking possession by the
heirs of their respective portions before it was even discovered that
Palanca had been guilty of converting the property of the estate to his
own use; and, so far as the records shows, it was nearly five years
before the alleged claim against the estate of Mariano Ocampo was
fixed; and
2. No creditor made his application.
The necessary conclusion is that the appointment of commissioners to hear the
claim above referred to was beyond the powers of the court and was without
jurisdiction. The finding of the commissioners had no force or effect. It gave no
right against the estate and none against the so-called administrator.
This section creates a statute of limitations which deprives all debts which are
not discovered within the prescribed time of the power of requiring an
administration of the estate. The administration of the estate after the
partition under the law has been accomplished depends upon the
discovery of the debt "at any time within two years after such settlement
and distribution of the estate." The law does not operate unless that
discovery is made within the time prescribed.
The contention that upon the assumption that a partition is void unless
every debt is paid or provided for by the petitioning parties, and may therefore
be entirely disregarded by the creditor holding a claim either unpaid or provided means of a public document, recognized the right of the said Modesta Pabalan,
for. We do not believe that this assumption is warranted. In the first place, we Procopio Pabalan, Basilio Salgado, and Juan Banay-banay as the owners of
must remember that the partition proceedings in question are proceedings  out the one-half of the undivided property in question, and thereafter appointed
of court. Consequently there is no prescribed method of ascertaining and Modesta Pabalan as "administradora" of all of the house in question, in
settling claims. The appointment of commissioners, the publication of notice to substitution of the said Francisco Salgado deceased.
creditors, and all the other proceedings necessary in cases of administration in
court are not required in partition  out of court. Damasa Alcala presented a petition in the CFI of Laguna, praying that she be
appointed administratrix of the property in question which was granted.
Second, it was not the intention of the law to pronounce the partition void of no
effect simply because not all of the debts were paid before the partition was Issue: WON the appointment of Damasa Alcala as an administratrix correct.
made. The fact of non payment cannot, then, because by the creditor as a
reason for attacking the partition directly; that is, by asserting that, inasmuch as Held: No.
a payment of all the debts is a condition precedent to the right of partition, such
partition cannot legally and validly take place while a debt is outstanding. The
The lower court in appointing the Alcala as administratrix of the property in
mere fact, therefore, that a creditor was not paid before the partition took place
question, evidently did so upon the theory that the said property was still the
furnishes no ground for a revocation of the partition. It simply provides a fact
property of the estate of Juan Banatin. In this theory the lower court was
which he may urge as a reason for the appointment of an administrator and the
mistaken. There was nothing left of the estate of Juan Banatin to be
consequent administration of so much of the estate as may be necessary to
administered. The heirs by mutual agreement had divided the property among
pay the debt discovered.
themselves.
DAMASA ALCALA vs. MODESTA PABALAN
After the actual division of the estate among themselves they became the
G.R. No. L-6463            August 12, 1911
absolute owners of their respective allotments and were tenants in common of
19 Phil 520
that portion of the property which remained pro indiviso. After the mutual
agreement among themselves for the division of the estate, either actually
Facts: On April 23, 1897, Juan Banatin died, leaving a widow and seventeen
distributing their respective shares or leaving the same undivided, the property
nieces and nephews. That on the June 13, 1987, the said widow and all of the
in question was no longer the property of the estate of Juan Banatin, but the
seventeen nieces and nephews, except Tranquilina Banatin, entered into a
undivided property of the heirs.
voluntary agreement among themselves for the division "entre ellos," of all of
the property left by the said Juan Banatin, deceased, except the house. That by
the terms of said agreement, the said house was to remain undivided and the There was no occasion and no reason for the appointment of an administrator
widow should receive the one-half of the usufruct of said house during her by the probate court, and, therefore, the judgment of the lower court appointing
lifetime. That the other one-half of the usufruct should be distributed equally Damasa Alcala as administratrix of the estate of Juan Banatin for the purpose
among the other seventeen heirs and Francisco Salgado, one of the nephews, of administering the property mentioned in paragraph 4 of the petition, is hereby
should administer the said house, collecting the rents of the same and deliver revoked.
one-half to the widow and the other one-half to the nieces and nephews.
Francisco Salgado, having failed to pay to Damasa Alcala her share of the
usufruct of said property, was sued by her and a judgment was finally rendered Hernandez v, Andal, 78 Phil 196
against him for the same.
Lajom v. Viola, 60 OG 452
In 1907,  one-half of the undivided property in question was sold to one Macario
Decena. In October 1908, the said one-half of the property in question was VICENTA FALCATAN vs. ANASTACIO SANCHEZ (Unreported case)
repurchased by the heirs of Francisco Salgado. The money used in
repurchasing the property by the heirs of Francisco Salgado was the money of Appeal from a decision of the CFI of the City of Zamboanga providing for the
four of the heirs of Juan Banatin to wit: Modesta Pabalan, Procopio Pabalan, summary settlement of the estate of Patricio Sanchez, deceased. The main
Basilio Salgado, and Juan Banay-banay and not the money of Francisco issue refers to the manner in which the lot in question shall be divided.
Salgado.  Thirteen of the nieces and nephews or heirs of Juan Banatin, by Appellant assails the decision upon the ground that in proceedings for the
summary settlement of the estate of a deceased person under section 2 Rule
74, the court has no jurisdiction to pass upon the question of title to real
property. This is true only where the title is disputed by a third person, not by
the surviving spouse or heirs of the deceased, as successors of the latter.
There are 2 conjugal partnerships involved here. Under the circumstances, it
would be fair to hold that the property in question belongs to the 2 conjugal
partnerships, share and share alike.
HEIRS OF JOAQUIN TEVES vs. COURT OF APPEALS and the HEIRS OF
ASUNCION IT-IT G.R. No. 109963 October 13, 1999
Marcelina Cimafranca and Joaquin Teves had nine children, namely Teotimo,
Felicia, Pedro, Andres, Asuncion, Gorgonio, Cresenciano, Arcadia and Maria.
After they died, intestate and without debts, in 1943 and 1953, respectively,
their children executed extrajudicial settlements purporting to adjudicate unto
themselves the ownership over two parcels of land belonging to their deceased
parents and to alienate their shares thereto in favor of their sister Asuncion
Teves.
On May 9, 1984, plaintiffs-appellants Ricardo, son of Cresenciano, and Arcadia
Teves filed a complaint with the RTC of Negros Oriental for the partition and
reconveyance of two parcels of land located in Dumaguete, designated as Lots
769-A and 6409, against the heirs of Asuncion Teves. The complaint was
subsequently amended to include Maria Teves and the heirs of Teotimo,
Felicia, Pedro, and Gorgonio Teves as plaintiffs. They alleged that defendants-
appellees, without any justifiable reason, refused to partition the said parcels of
land and to convey to plaintiffs their rightful shares. The present controversy
involves only Marcelina Cimafranca's one-fourth (1/4) share in the land,
designated as Lot 769-A.
On June 13, 1956, Teotimo, Felicia, Pedro, Asuncion, Gorgonio and Arcadia
Teves executed a document entitled "Settlement of Estate and Sale,"
adjudicating unto themselves, in equal shares, Lot 769-A and conveying their
shares, interests and participations over the same in favor of Asuncion Teves
for the consideration of P425.00. A similar deed denominated "Extrajudicial
Settlement and Sale” was signed by Maria Teves on April 21, 1959. Under such
deed, Maria conveys her own share over Lot 769-A in favor of Asuncion Teves
for the consideration of P80.00. The two settlements were denounced by the
plaintiffs as spurious. In answer to plaintiffs-appellants' charges of fraud,
defendants-appellees maintained that the assailed documents were executed
with all the formalities required by law and are therefore binding and legally
effective as bases for acquiring ownership or legal title over the lots in question.
Furthermore, it is contended that plaintiffs-appellants have slept on their rights
and should now be deemed to have abandoned such rights.
The trial court ruled in favor of defendants-appellees and rendered judgment
dismissing the complaint with costs against plaintiffs-appellants. The Court of
Appeals upheld the trial court's decision.
Issue 1: Are the extrajudicial settlements executed by the heirs of Teves valid?
Held: YES. For a partition pursuant to section 1 of Rule 74 to be valid, the
following conditions must concur: (1) the decedent left no will; (2) the decedent
left no debts, or if there were debts left, all had been paid; (3) the heirs are all of
age, or if they are minors, the latter are represented by their judicial guardian or
legal representatives; (4) the partition was made by means of a public
instrument or affidavit duly filed with the Register of Deeds.
We uphold, finding no cogent reason to reverse, the trial and appellate courts'
factual finding that the evidence presented by plaintiffs-appellants is insufficient
to overcome the evidentiary value of the extrajudicial settlements. The deeds
are public documents and it has been held by this Court that a public document
executed with all the legal formalities is entitled to a presumption of truth as to
the recitals contained therein. In order to overthrow a certificate of a notary
public to the effect that the grantor executed a certain document and
acknowledged the fact of its execution before him, mere preponderance of
evidence will not suffice. Rather, the evidence must be so clear, strong and
convincing as to exclude all reasonable dispute as to the falsity of the
certificate. When the evidence is conflicting, the certificate will be upheld. The
appellate court's ruling that the evidence presented by plaintiffs-appellants does
not constitute the clear, strong, and convincing evidence necessary to
overcome the positive value of the extrajudicial settlements executed by the
parties, all of which are public documents, being essentially a finding of fact, is
entitled to great respect by the appellate court and should not be disturbed on
appeal.
The division of Lot 769-A was embodied in two deeds. The first extrajudicial
settlement was entered into by Teotimo, Felicia, Pedro, Gorgonio, Arcadia and
Asuncion Teves in 1956 , while the second deed was executed in 1959 by
Maria Teves. Cresenciano was not a signatory to either settlement. However, in
contrast to the extrajudicial settlement covering Lot 6409, the two extrajudicial
settlements involving Lot 769-A do not purport to exclude Cresenciano from his
participation in Lot 769-A or to cede his share therein in favor of Asuncion. The
settlement clearly adjudicated the property in equal shares in favor of the eight
heirs of Marcelina Cimafranca. Moreover, the deeds were intended to convey to
Asuncion Teves only the shares of those heirs who affixed their signatures in
the two documents.
Issue 2: Does the non-registration of an extrajudicial settlement affect its
intrinsic validity?
Held: No. In the case of Vda. de Reyes vs. CA, the Court, interpreting section
1 of Rule 74 of the Rules of Court, upheld the validity of an oral partition of the
decedent's estate and declared that the non-registration of an extrajudicial
settlement does not affect its intrinsic validity. It was held in this case that —
[t]he requirement that a partition be put in a public document and registered has
for its purpose the protection of creditors and at the same time the protection of
the heirs themselves against tardy claims. The object of registration is to serve
as constructive notice to others. It follows then that the intrinsic validity of
partition not executed with the prescribed formalities does not come into play
when there are no creditors or the rights of creditors are not affected. Where no
such rights are involved, it is competent for the heirs of an estate to enter into
an agreement for distribution in a manner and upon a plan different from those
provided by law.
Thus, despite its non-registration, the extrajudicial settlements involving Lot
769-A are legally effective and binding among the heirs of Marcelina
Cimafranca since their mother had no creditors at the time of her death.
G.R. No. L-5217             May 13, 1953
Intestate Estate of the deceased, CARLOS VELORIA. VICENTE VILORIA,
petitioner-appelle, vs. ISIDRO VILORIA, oppositor-appellant.
FACTS:
On May 10, 1948, petitioner Vicente Viloria filed in the CFI of
Pangasinan a petition for summary distribution of the properties left by the
deceased Carlos Viloria among the petitioner and Isidoro Viloria.
After several postponement of the hearing, the parties, assisted by their
respective attorneys, submitted a written stipulation whereby one-fourth portion
on the western side of lot No. 3436 and a one-fourth portion of the northeastern
side of lot No. 3394 are ceded to the Isidoro Viloria and the remaining three-
fourths of said lots are ceded to the petitioner Vicente Viloria.
In view of this stipulation, the CFI of Pangasinan rendered a decision
on March 8,1951, that the dispositive parts of which reads as follows: “… said
properties be summarily adjudicated in accordance with the stipulated
agreement submitted by said heirs on February 26,1951 and which is hereby
approved, subject, however, to the provision of section 4, Rule 74 of the Rules
of Court.”
Notice of this decision was served on the parties, thru their respective
attorneys, on March 13, 1951. On August 1, 1951, the oppositor, Isidoro Viloria,
thru another counsel filed a petition praying that said decision be set aside and
a trial on the merits be ordered, on the ground that the oppositor, being
illiterate, does not know the true contents of the stipulation on which of the
decision was based, and that said decision came to his personal knowledge
only on July 23, 1951.
ISSUE:
Whether or not the stipulation or agreement is binding between the
parties.
RULING: YES.
Appellant argued that his petition is one for relief under Rule 38 of the
Rules of Court, founded on fraud or mistake consisting in the fact that he
signed the stipulation in question in the belief that it adjudicated to him one-half
of the entire estate left by the deceased Carlos Viloria. We cannot accept the
appellant's position. The stipulation bore not only his signature but also that of
his attorney, and during the hearing held on March 5, 1951, he confirmed, upon
being questioned by the trial Judge, his thumbmark appearing on the document
containing the stipulation. His attorney was also present at the hearing, and it
cannot be supposed, in the absence of any showing to the contrary, that the
latter acted irregularly. Indeed, the appellant did not ask for a change of
attorney. The appellant cannot claim that he learned of the decision only on
July 23, 1951, because he was represented by counsel who received notice on
March 13, 1951, and this is notice to the appellant. Much less can the latter
claim that he was not timely apprised of the tenor of the appealed decision, but
he must have known that said decision was to conform to the stipulation in
question.
G.R. No. L-10474             February 28, 1958
BENNY SAMPILO and HONORATO SALACUP, petitioners, vs. THE COURT
OF APPEALS and FELISA SINOPERA respondent.
FACTS:
Teodoro Tolete died intestate in January, 1945. He left 4 parcels of
land in San Manuel, Pangasinan. He left as heirs his widow, Leoncia de Leon,
and several nephews and nieces, children of deceased brothers and sisters.
On July 25, 1946, without any judicial proceedings, his widow executed
an affidavit stating that "the deceased Teodoro Tolete left no children or
ascendants or acknowledged natural children neither brother, sisters, nephews
or nieces, but the, widow Leoncia de Leon, alone to inherit the above
properties". On the same day, she executed a deed of sale of all the above
parcels of land in favor of Benny Sampilo for the sum of P10,000. On June 17,
1950, Benny Sampilo, in turn, sold the said parcels of land to Honorato Salacup
for P50,000.
In March, 1950, Felisa Sinopera instituted proceedings for the
administration of the estate of Teodoro Tolete (Special Proceeding No. 3694,
Pangasinan), and having secured her appointment as administratrix, brought
the present action on June 20, 1950. The complaint alleges that the widow
Leoncia de Leon, had no right to execute the affidavit of adjudication and the
invalidity of the sale. Sampilo and Salacup filed an amended answer alleging
that the complaint states no cause of action; and that if such a cause exists the
same is barred.
The CFI rendered judgment for the plaintiff, Felisa Sinopera, declaring
that the affidavit of adjudication and the deeds of sale as all null and void. The
case was appealed to the CA. It held that the sale is valid as to the one-half
share of the land.
ISSUE:
Whether or not respondent Felisa Sinopera's right of action to recover
her and her co-heirs' participation to the lands in question had not prescribed at
the time the action to recover was filed.
RULING: YES.
It is argued that as the action was instituted almost 4 years after the
affidavit of adjudication was registered in the Office of the Register of Deeds Of
Pangasinan, the right of action of the administratrix has prescribed and lapsed
because the same was not brought within the period of 2 years as prescribed in
Section 4 of Rule 74 of the Rules of Court, and as decided in the cases of
McMicking vs. Sy Conbieng, 21 Phil., 211 and Ramirez vs. Gmur, 42 Phil., 855
869.
Section 4 of Rule 74 provides, in part, as follows:
SEC. 4. Liability of distributees and estate. — If it shall appear at any time
within two 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 has been unduly deprived of his lawful participation of
the such heir or such other person may compel the settlement estate in the
courts in the manner hereinafter provided for the purpose of satisfying such
lawful participation. . . .
Section 1, which is mentioned in Section 4, reads as follows:
SEC. 1. Extrajudcial settlement by agreement between the heirs. — If the
decedent left no debts and the heirs and legatees are all of age, or the
minors are represented by their judicial guardians, 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 or one legatee, he may adjudicate to
himself the entire estate by means of an affidavit filed in the office of the
register of deeds. It shall be presumed that the decedent left no debts if no
creditor files a petition for letters of administration within two years after the
death of the decedent.
There are two significant provisions in Sections 1 and 4 of Rule 74. In
Section 1, it is required that if there are two or more heirs, both or all of them
should take part in the extrajudicial settlement. This requirement is made more
imperative in the old law (Section 596, Act No. 190) by the addition of the
clause "and not otherwise." By the title of Section 4, the "distributees and
estate" indicates the persons to answer for rights violated by the extrajudicial
settlement. On the other hand, it is also significant that no mention is made
expressly of the effect of the extrajudicial settlement on persons who did not
take part therein or had no notice or knowledge thereof. There cannot be any
doubt that those who took part or had knowledge of the extrajudicial settlement
are bound thereby. As to them the law is clear that if they claim to have been in
any manner deprived of their lawful right or share in the estate by the
extrajudicial settlement, they may demand their rights or interest within the
period of two years, and both the distributees and estate would be liable to
them for such rights or interest.
But as to those who did not take part in the settlement or had no notice
of the death of the decedent or of the settlement, there is no direct or express
provision. Thus, it is unreasonable and unjust that they also be required to
assert their claims within the period of two years. To extend the effects of the
settlement to them, to those who did not take part or had no knowledge thereof,
without any express legal provision to that effect, would be violative of the
fundamental right to due process of law.
The procedure outlined in Section 1 of Rule 74 of extrajudicial
settlement, or by affidavit, is an ex parte proceeding. It cannot by any reason or
logic be contended that such settlement or distribution would affect third
persons who had no knowledge either of the death of the decedent or of the
extrajudicial settlement or affidavit, especially as no mention of such effect is
made, either directly or by implication.
Hence, the provisions of Section 4 of Rule 74, barring distributees or
heirs from objecting to an extrajudicial partition after the expiration of two years
from such extrajudicial partition, is applicable only (1) to persons who have
participated or taken part or had notice of the extrajudicial partition, and, in
addition, (2) when the provisions of Section 1 of Rule 74 have been strictly
complied with, i.e., that all the persons or heirs of the decedent have taken part
in the extrajudicial settlement or are represented by themselves or through
guardians. The case at bar fails to comply with both requirements because not
all the heirs interested have participated in the extrajudicial settlement, the
Court of Appeals having found that the decedent left aside from his widow,
nephews and nieces living at the time of his death.
BELTRAN, ET ALvs. AYSON and JEMINEZ G.R. No. L-14662
FACTS:
This action was commenced principally to set aside a deed of extrajudicial
partition registered with the proper Registry of Deeds, Pursuant to Section 1,
Rule 74, of the Rules of Court (extrajudicial settlement by agreement between
heirs), and the Torrens title issued by virtue thereof.
The parties stipulated on the facts:
1. That there is no question about the Original Certificate of Title No.
51521 in the name of Macario Beltran;
2. That a deed of partition was made in the year 1943 by Corazon
Ayson and Jose de la Cruz;
3. That pursuant to the deed of extrajudicial partition, the defendants
obtained Transfer Certificate of Title No. 23235;
4. That the plaintiffs are the nephews and nieces of Macario Beltran,
being the children of his brothers and sisters; Leonarda Beltran, sister
of Macario Beltran, survived by Bartolome, Mariano, Felipe, Juan, Felix,
Marcela, Pilar all surnamed Jeminez; Marcela died in 1950, survived by
her children, Juanita and Gregorio, both surnamed Austria; Genoveva
Beltran died survived by Damian, Petra Dionisio, and Donato, all
surnamed De la Cruz, as children;
5. That the defendant is the widow of Macario Beltran;
6. That the plaintiffs were not aware of the deed of extrajudicial partition
until shortly before the filing of the complaint;
The Court of First Instance handed down a decision, declaring the
plaintiffs the co-owners of the land in litigation, subject to the usufruct of
defendant Corazon Ayson over one-half of the share of each co-owner. 1ä
wphï1.ñët
The defendants appealed directly to this Court.
ISSUE: WON the instant action has prescribed for failure of appellees (not a
party to the extrajudicial partition), to pursue the remedy within two years after
the registration of the deed of extrajudicial partition.
RULING: No.
Appellants invoke Section 4 of Rule 74, which reads: .
SEC. 4. Liability of distributees and estate. — If it shall appear at any
time within two 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 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 years after such distribution, notwithstanding any
transfers of the real estate that may have been made.
Appellants contend that the instant action has prescribed for failure of
appellees to pursue the remedy pointed out by the Rules within two years after
the registration of the deed of extrajudicial partition for the purpose of securing
their lawful shares in the property.
... the provisions of Section 4 of Rule 74, barring distributees or heirs
from objecting to an extrajudicial partition is applicable only (1) to
persons who have participated or taken part or had notice of the
extrajudicial partition, and, in addition, (2) when the provisions of
Section 1 of Rule 74 have been strictly complied with, i.e., that all the
persons or heirs of the decedent have taken part in the extrajudicial
settlement or are represented by themselves or through guardians.
The next contention of appellants is that plaintiff's action is barred by
the statute of limitations. The origin of the provision (Section 4, Rule 74), upon
which this contention is predicated, which is Section 596 of Act No. 190, fails to
support the contention.
In the first place, there is nothing therein, or in its sources, which shows
clearly a statute of limitations and a bar of action against third persons. It is only
a bar against the parties who had taken part in the extrajudicial proceedings,
but not against third persons not parties thereto. In the second place, the
statute of limitations is contained in a different chapter of Act No. 190, Chapter
XL, and if Section 596 of the Act had been meant to be a statute of limitations, it
would naturally have been included in the chapter which defines the statute.
In the instant case, both requirements were not complied with, because
not all the interested heirs have participated in the extrajudicial settlement, it
being admitted that the deceased left, aside from his widow, appellant Corazon
Ayson and his half-brother, Jose de la Cruz, nephews, nieces and a sister living
at the time of his death, and that the latter heirs were not aware of the deed of
extrajudicial partition until shortly before the filing of their complaint.
ELIGIO LLANERA, vs.ANA LOPOS, ET AL. G.R. No. L-12588          
FACTS:
Gorgonio Llanera died single and intestate on October 13, 1942. He left
an estate consisting of the proceeds of an insurance policy amounting to
$5,150.00.
Upon the request of RemediosAyqueAltavano who claimed to be a
relative of the deceased, a petition for settlement of his estate was filed in the
Court of First Instance of Albayon January 22, 1948, wherein one Elias Ayque
was appointed administrator of the estate.
After hearing, the Court found that the deceased died without parents,
brothers, sisters, nephews or nieces, but left the following relatives: Ana,
Eustaquio, Julia and Maximina, surnamed Lopos, brothers and sisters of
AnicetaLopos, who was the mother of Gorgonio Llanera, and Casiana,
Teodoro, Petronilo, Cenen, Felix, Sotero and Ambrosia, all surnamed Lopos,
first degree cousin of the deceased, being the children of a brother and sister of
AnicetaLopos.
The court ordered the balance of the estate to be distributed among
said heirs. And on May 28, 1949, the Court ordered the closure and termination
of the proceedings.
It developed later that the deceased had a brother by the name of
Zacarias who died on June 19,1935 leaving a son, Eligio. And when in 1953
Eligio came to know that his uncle Gorgonio died leaving an insurance policy
the proceeds of which were distributed in the intestate proceedings instituted in
the Court of First Instance of Albay and were adjudicated to those who were not
entitled thereto, Eligio on September 30, 1954 filed a motion in said
proceedings in order to assert his claim over the property as the sole heir of the
deceased, which motion however he later withdrew because he intended to file
a separate civil action for the vindication of his right in the proper court.
And so on February 21, 1955, Eligio commenced this action in the
Court of First Instance of Laguna to recover the proceeds of the insurance
policy left by his uncle against those to whom they were illegally adjudicated
alleging that the latter misrepresented that they were the only heirs of the
deceased when in fact they knew well that he left a nephew who was alive and
was the only one entitled to inherit his property.
On February 18, 1957, the court rendered decision dismissing the
complaint on the ground that the venue was improperly laid and plaintiff's cause
of action had already prescribed.
ISSUE: WON the action already prescribed.
RULING:NO.
In holding that the present action has already prescribed, the trial court
said: "The claim of the plaintiff, in the opinion of the Court, was filed out of time.
In summary settlement of the estate of a deceased person, any heir deprived of
his lawful participation therein should file the corresponding petition in the court
having jurisdiction of the estate within two years after the settlement and
distribution thereof (sec. 4, Rule 74, Rules of Court).While the Rules of the
Court do not prescribed any time limit during which an heir deprived of his
lawful participation in the state of a person which was settled in a regular
testate or intestate proceeding, Article 1100 of the Civil Code, however,
provides that action for rescission on account of "lesion" shall prescribe after
four years from the time the partition was made. Considering that judicial
partition of the estate of Gorgonio Llanera was made on May 17, 1949, hence
plaintiff's action was commenced beyond the prescriptive period provided by
law."
We find this reasoning incorrect, for it overlooks the fact that the
present action is not for rescission of a contract based on "lesion" but an action
to recover property based on fraud which under our law may be filed within a
period of four years from the discovery of the fraud. (sec. 43 par. 3, Act 190).
Since, as alleged in the complaint, fraud was discovered only in 1953 and the
action was brought in 1955, it is clear that plaintiff's action has not yet
prescribed. It is therefore an error to dismiss the complaint based on
prescription.
Esquivel v. CA, April 20, 1956
ANCOG vs. COURT OF APPEAL
G.R. No. 112260 June 30, 1997
Gregorio Yap died, leaving his wife, private respondent Rosario Diez,
and children, petitioners Jovita Yap Ancog and Gregorio Yap, Jr.(who was a
minor at this time), and private respondent Caridad Yap as his heirs.
Rosario Diez obtained loans from the Bank of Calape, secured by a
mortgage on the disputed land. The land, with improvements thereon, was
formerly the conjugal property of the spouses Gregorio Yap and Rosario Diez.
The bank's lawyer, Atty. Narciso de la Serna, suggested that she
submit an extrajudicial settlement covering the disputed land as a means of
facilitating the approval of her application. The suggestion was accepted and
Atty. de la Serna prepared an extrajudicial settlement, which the heirs, with the
exception of petitioner Gregorio Yap, Jr., then only 15 years old, signed.
The loan was approved by the bank.
Rosario Diez exercised rights of ownership over the land. She brought
an ejectment suit against petitioner Jovita Yap Ancog's husband and son to
evict them from the ground floor of the house built on the land for failure to pay
rent. Thereafter, petitioner Jovita Ancog learned that private respondent
Rosario Diez had offered the land for sale.
Petitioner Ancog immediately informed her younger brother, petitioner
Gregorio Yap, Jr. of their mother's plan to sell the land. They filed this action for
partition in the RTC. As private respondent Caridad Yap was unwilling to join in
the action against their mother, Caridad was impleaded as a defendant.
Petitioners alleged that the extrajudicial instrument was simulated and
therefore void. They claimed that in signing the instrument they did not really
intend to convey their interests in the property to their mother, but only to
enable her to obtain a loan on the security of the land to cover expenses for
Caridad's school fees and for household repairs.
Issue:
1) Whether or not the extrajudicial settlement was valid. Yes.
2) Whether or not Gregorio Yap is barred by laches? No.
Ruling:
1) In this case, the trial court and the Court of Appeals found no evidence
to show that the extrajudicial settlement was required to enable private
respondent Rosario Diez to obtain a loan from the Bank of Calape. Petitioners
merely claimed that the extrajudicial settlement was demanded by the bank.
To the contrary, that the heirs (Jovita Yap Ancog and Caridad Yap)
meant the extrajudicial settlement to be fully effective is shown by the fact that
Rosario Diez performed acts of dominion over the entire Land, beginning with
its registration, without any objection from them. Instead, petitioner Jovita
Ancog agreed to lease the land from her mother, private respondent Rosario
Diez, and accepted from her a special power of attorney to use the land in
question as collateral for a loan she was applying from the DBP. Indeed it was
private respondent Diez who paid the loan of the Ancogs in order to secure the
release of the property from mortgage.
2) The Court of Appeals erred in ruling that the claim of petitioner
Gregorio Yap, Jr. was barred by laches. In accordance with Rule 74, Sec. 1 of
the Rules of Court, as he did not take part in the partition, he is not bound by
the settlement. It is uncontroverted that, at the time the extrajudicial settlement
was executed, Gregorio Yap, Jr. was a minor. For this reason, he was not
included or even informed of the partition.
Instead, the registration of the land in Rosario Diez's name created an
implied trust in his favor by analogy to Art. 1451 of the Civil Code.
(just in case)
In the case of O'Laco v. Co Cho Chit, Art. 1451 was held as creating a
resulting trust, which is founded on the presumed intention of the parties. As a
general rule, it arises where such may be reasonably presumed to be the
intention of the parties, as determined from the facts and circumstances
existing at the time of the transaction out of which it is sought to be
established. In this case, the records disclose that the intention of the parties to
the extrajudicial settlement was to establish a trust in favor of petitioner Yap, Jr.
to the extent of his share. Rosario Diez testified that she did not claim the entire
property, while Atty. de la Serna added that the partition only involved the
shares of the three participants. 
Arenas v. Roces, Gr no. 147468, April 9, 2003
FACTS:
Spouses Cesar and Lilia Roces were the owners of two contiguous parcels of
land located in Arayat St. Mandaluyong. It is cover by TCT nos. 57217 and
57218.
On Nov.13, 1962, GSIS caused the annotations of an affidavit of adverse claim
on the titles alleging that the spouses have mortgaged the same to it.
GSIS wrote a letter to Cesar Roces demanding that they surrender the owners
duplicate titles. Roces failed to surrender such, hence GSIS filed a petition to
then CFI of Rizal praying that the owners duplicate titles in possession of
Roces be declared null and void and a new TCT be issued in favor of GSIS.
The court issued and order granting the petition.
Cesar Roces died intestate on Jan. 26, 1980. He was survived by his widow
Lilia Roces and their children all of whom are respondents in this case.
On July 22, 1922, Reynaldo Montinola, a nephew of Lilia Roces executed an
affidavit of self adjudication over the Arayat properties alleging that the
properties were owned by Cesar and Lilia both of whom died intestate and left
no heirs except the brother of Lilia Roces who was his father, that neither of the
spouses left any will nor any debt and that he was the sole heir of the Roces
spouse.
On Jan. 5, 1993, Montinola filed a petition against GSIS with the RTC of Pasig
praying for the cancellations of the TCT’s in favor of GSIS. GSIS failed to
present any evidences that shows the properties were indeed mortgage to
them, hence the RTC rendered judgment in favor of Moninola of which the
TCT’s in favor of GSIS were declared null and void and a new owners duplicate
title be issued. The Registry of deeds of Mandaluyong issued TCT no. 7299 in
lieu of TCT no. 57218.
In July 1993, Montinola executed a deed of absolute sale of the property
covered by TCT no. 7299 in favor of petitioner sps. Eduardo and Josefina
Domingo, thereafter TCT no. 7673 was issued in the name of the petitioners.
Both TCT nos. 7299 and 7673 contained the following annotations:
“Subject to the provsison of Sec.4 Rule 74 of the Rules of Court with respect to
the inheritance left by the deceased sps. Roces”.
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.
In their answer, petitioners alleged that they were buyers in good faith and that
their action was barred by estoppel and laches.
The RTC ruled in favor of the respondents. Respondents appealed to the CA
reiterating the reliefs prayed for. The CA granted the appeal and the decision of
the RTC is set aside and reversed. The CA rendered a decision in favor of the
appellants of which the affidavit of self adjudication, deed of absolute sale and
TCT no. 7673 are declared null and void. The TCT no. 7218 under sps Roces
were reinstated. Petitioners filed a Motion for Recon but was denied hence this
petition.
ISSUE:
Whether or not the annotation in the TCT regarding Sec.4 Rule 74 of the Rules
of Court serves as an encumbrance that prevents Petitioners from being an
innocent purchaser for value?
HELD:
Well settled is the rule that one who deals with property registered under the
Torrens system need not go beyond the same but must rely on the title.
However such rule admits an exception such as the 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 a 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.
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.
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.
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.
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. 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. 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. No unreasonable delay can be attributed to respondents in this
case.
Cua v. Vargas, G.R. No. 156536, October 31, 2006
Facts:
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 a letter7 sent to petitioner.
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.
After trial on the merits, the MTC rendered a decision 13 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.
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.
Issues:
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 Code 17
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.

Ruling:

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 executed 19 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