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L-19060 May 29, 1964
IGNACIO GERONA, MARIA CONCEPCION GERONA, FRANCISCO GERONA and DELFIN GERONA, petitioners, vs. CARMEN DE GUZMAN, JOSE DE GUZMAN, CLEMENTE DE GUZMAN, FRANCISCO DE GUZMAN, RUSTICA DE GUZMAN, PACITA DE GUZMAN and VICTORIA DE GUZMANrespondents. Manuel J. Serapio for petitioners. D. F. Castro and Associates for respondents. CONCEPCION, J.: Appeal by certiorari from a decision of the Court of Appeals, affirming that of the Court of First Instance of Bulacan. In the complaint, filed with the latter court on September 4, 1958, petitioners herein, namely, Ignacio, Maria Concepcion, Francisco and Delfin, all surnamed Gerona, alleged that they are the legitimate children of Domingo Gerona and Placida de Guzman; that the latter, who died on August 9, 1941 was a legitimate daughter of Marcelo de Guzman and his first wife, Teodora de la Cruz; that after the death of his first wife, Marcelo de Guzman married Camila Ramos, who begot him several children, namely, respondents Carmen, Jose, Clemente, Francisco, Rustica, Pacita and Victoria, all surnamed De Guzman; that Marcelo de Guzman died on September 11, 1945; that subsequently, or on May 6, 1948, respondents executed a deed of "extra-judicial settlement of the estate of the deceased Marcelo de Guzman", fraudulently misrepresenting therein that they were the only surviving heirs of the deceased Marcelo de Guzman, although they well knew that petitioners were, also, his forced heirs; that respondents had thereby succeeded fraudulently in causing the transfer certificates of title to seven (7) parcels of land, issued in the name of said deceased, to be
cancelled and new transfer certificates of title to be issued in their own name, in the proportion of 1/7th individual interest for each; that such fraud was discovered by the petitioners only the year before the institution of the case; that petitioners forthwith demanded from respondents their (petitioners) share in said properties, to the extent of 1/8th interest thereon; and that the respondents refused to heed said demand, thereby causing damages to the petitioners. Accordingly, the latter prayed that judgment be rendered nullifying said deed of extrajudicial settlement, insofar as it deprives them of their participation of 1/18th of the properties in litigation; ordering the respondents to reconvey to petitioners their aforementioned share in said properties; ordering the register of deeds to cancel the transfer certificates of title secured by respondents as above stated and to issue new certificates of title in the name of both the petitioners and the respondents in the proportion of 1/8th for the former and 7/8th for the latter; ordering the respondents to render accounts of the income of said properties and to deliver to petitioners their lawful share therein; and sentencing respondents to pay damages and attorney's fees. In their answer, respondents maintained that petitioners' mother, the deceased Placida de Guzman, was not entitled to share in the estate of Marcelo de Guzman, she being merely a spurious child of the latter, and that petitioners' action is barred by the statute of limitations. After appropriate proceedings, the trial court rendered a decision finding that petitioners' mother was a legitimate child, by first marriage, of Marcelo de Guzman; that the properties described in the complaint belonged to the conjugal partnership of Marcelo de Guzman and his second wife, Camila Ramos; and that petitioners' action has already prescribed, and, accordingly, dismissing the complaint without costs. On appeal taken by the petitioners, this decision as affirmed by the Court of Appeals, with costs against them. Petitioners maintain that since they and respondents are co-heirs of the deceased Marcelo de Guzman, the present action for partition of the latter's estate is not subject to the statute of limitations of action; that, if affected by said statute, the period of four (4) years therein prescribed did not begin to run until actual discovery of the fraud perpetrated by respondents, which, it is claimed, took place in 1956 or 1957; and that accordingly, said period had not expired when the present action was commenced on November 4, 1958.
Villanueva. Magdangal. 1958. L-12149. therefore. paragraph 3. Inc. January 31. As correctly stated in the decision of the trial court: In the light of the foregoing it must. Ramos.. and. Fernandez. Inasmuch as petitioners seek to annul the aforementioned deed of "extra-judicial settlement" upon the ground of fraud in the execution thereof. v. Although. 1959. January 29. 1948. Plaintiff Francisco Gerona became of age only on 9 January 1952 so that he was still a minor when he gained knowledge (even if only constructive) of the deed of extra-judicial settlement on 25 June 1948. concur. 1962). L-10220. on June 25. with respect to Delfin. C. She also had only the remainder of the period of 4 years from December 1949 within which to commence her action.. the action therefor may be filed within four (4) years from the discovery of the fraud (Mauricio v. plaintiff Delfin Gerona became of legal age on 5 August 1954. Castro v. Padilla. L-7745. 1948). January 30. resulting from fraud. Alzona v. in relation to Section 43. Bengzon. 1962. set up a title adverse to them. Likewise. Paredes. be held that plaintiffs learned at least constructively.. and 5 August 1954. September 24. with respect to Francisco. And this is why petitioners have brought this action for the annulment of said deed upon the ground that the same is tainted with fraud. Labrador and Dizon.. January 31. 20 Phil. of the alleged fraud committed against them by defendants on 25 June 1948 when the deed of extra-judicial settlement of the estate of the deceased Marcelo de Guzman was registered in the registry of deeds of Bulacan. It is so ordered. J. L-11764. L-11229. the decision of the Court of Appeals is hereby affirmed. L-11578. Mendoza. L-9936. they thereby excluded the petitioners from the estate of the deceased. 1955). L-12540. Maribiles v. Avecilla v. He is deemed to have discovered defendants' fraud on 25 June 1948 and had. 362. February 28. 1964). and secured new transfer certificates of title in their own name. from the moment such adverse title is asserted by the possessor of the property (Ramos vs. WHEREFORE.J. Lopez v. consequently. Plaintiff Ignacio Gerona became of age on 3 March 1948. May 14. 857. L-10408. January 14. Act 190). Cordova. L-15539. Romero. Quinto. Barredo.Petitioners' contention is untenable. in the case at bar. L-11072. Cuison v.M. as a general rule. it is already settled in this jurisdiction that an action for reconveyance of real property based upon a constructive or implied trust. two years after the removal of their disability within which to commence their action (Section 45. that is. De los Angeles. Capunita. this is true only as long as the defendants do not hold the property in question under an adverse title (Cordova vs. The statute of limitations operates as in other cases. When respondents executed the aforementioned deed of extra-judicial settlement stating therein that they are the sole heirs of the late Marcelo de Guzman. therefore. 1960. 1956. . Plaintiff Maria Concepcion Gerona became of age on 8 December 1949 or after the registration of the deed of extra-judicial settlement. October 18.B. J.. only 4 years from the said date within which to file this action. September 30. Gorricho. 1952. Gonzaga. with costs against petitioners herein. 23). may be barred by the statute of limitations (Candelaria v. Tuason & Co. Camumot. L-18788.ñët Although. took no part. Plaintiffs' complaint in this case was not filed until 4 November 1958. JJ. 1959). JJ. so that he was also still a minor at the time he gained knowledge (although constructive) of the deed of extra-judicial settlement on 25 June 1948. an action for partition among co-heirs does not prescribe. 45 Phil. Bargayo v. Regala and Makalintal. for the registration of the deed of extra-judicial settlement constitute constructive notice to the whole world (Diaz v. 1959. or more than 10 years thereafter. 1äwphï1. 1958. March 29. November 18. when said instrument was filed with the Register of Deeds and new certificates of title were issued in the name of respondents exclusively. Echarri. 40 Phil. Yatco. and Sevilla v. Bautista Angelo. February 28. Reyes. Francisco Gerona and Delfin Gerona had. Such discovery is deemed to have taken place. therefore. there are some decisions to the contrary (Jacinto v.L.
Republic of the Philippines SUPREME COURT Manila SECOND DIVISION (3) herein spouses-appellees to pay the equivalent of five per centum (5%) of the total amount due as attorney's fees.T. 1992 SPS. Branch XXV. 1978 until fully paid but deducting therefrom whatever amount the appellant Bank may mortgaged property. G. Records). 115. 66428 (Manila) and TCT 106211 (Rizal) as security for a loan in the amount of P200.R. 3945.924. 1963. 2. and .00 as principal and "those that the mortgagee may extend to the mortgagors. advances. applying to any and all future as well as existing transactions" of plaintiffs-appellees with the defendant-appellant bank pursuant to which "as security for any and all loans. Oca to jointly and severally pay the appellant's counterclaim in the amount of P7. which We quote as follows: On January 1963. Costs against appellees. Oca from the decision 1 dated June 30.R. No. Rizal. 1988 of the Court of Appeals in CA-G." (Exhibit A.C.000. credits. 11445. Inc. etc. NOCON. 2 The instant petition stems from the complaint for damages with preliminary injunction filed by petitioners against private respondent Republic Planters Bank before the Court of First Instance of Pasig. (2) the spouses Salustiano R. plaintiffs-appellees spouses Oca executed a mortgage in favor of appellant Bank over two (2) parcels of lands covered by T. J. On February 12. vs. On April 27. and/or Oca Electric Co. OCA. There is no dispute in the findings of fact made by the Court of Appeals. the judgment appealed from is hereby REVERSED and SET ASIDE and a new one entered authorizing: (1) the Republic Planters Bank and the Provincial Sheriff of Rizal. authorizing Salustiano R. petitioner.32 plus 12% interests [sic] per annum from August 11. which may come to the possession or custody of the Bank (Exhibit 1-A. Inc. Inc. into one (1) promissory note in favor the Bank (Exh. Oca Logging Industry. Oca to consolidate all credit accommodations extended by the Bank to Salustiano Oca and/or Salustiano R.. Oca Logging Industry. as follows: WHEREFORE. Oca Logging Industry. No. p.844. Records). including interest and expenses or other obligations owing to the mortgagee" as well as "the credit accommodations obtained from the mortgagee by S. respondents. SO ORDERED. pp. a resolution was passed by the Board of Directors of Salustiano R. Salustiano Oca executed a general loan and collateral agreement which constitutes a "continuing agreement. SALUSTIANO OCA and FLORA O.. Oca and Flora O. Oca and Flora O. Original Records).R. Inc. the dispositive of which reads. or their agents and/or representative to proceed with the sale on foreclosure of the property described in Exhibit F.: This is a petition for review on certiorari by Spouses Salustiano R." the plaintiffs gave a lien on property of any kind. COURT OF APPEALS. REPUBLIC PLANTERS BANK (formerly Republic Bank) and the PROVINCIAL SHERIFF OF RIZAL. L-84841 October 30. 1966. 144.
Salustiano R.00 with 12% interest per annum plus trust commission (Original Records). 1978 at 10:00 A. p. The corporation's and the personal undertaking of the spouses Oca's obligation covered by the promissory note was transferred into a time loan designated as time loan No.).478. Oca as President of North Mindanao Bay Woods Exports sent a letter to the bank acknowledging receipt of the Bank's July 13. Brief of the Defendant-Appellant. On August 12.655. 48. 0. (Exhibit. 3 After trial on the merits. p.T. with interests thereon at the rate of 12% per annum plus trust commission (Exhibit 9B. the Bank applied for extrajudicial foreclosure of the lot covered by TCT 106211 (Rizal). and. Salustiano R. together with his wife Flora O.. the property located in Manila covered by TCT 103316 was foreclosed and sold at public auction for the sum of P195. Brief for Plaintiffs-Appellees. Ibid.00 as principal. 106211. After their motion for reconsideration was denied. Oca. with 12% interest thereon per annum plus trust commission. obtained other credit accommodations. 119. (3) in not ruling that the right of respondent Bank to extrajudicially foreclosure the mortgage had prescribed. Ibid. among others.R.889.R. Oca Logging Industry. p. On August 4. arguing that the Court of Appeals erred (1) in holding that the real estate mortgage is a continuing security not only for loans extended by respondent Bank to them but also to those extended to S. Inc.000. Oca Logging Industry. Original Records).Ibid. Oca Logging Industry. 1977. 9-B. Inc. Exhibit B. and (2) in not holding the mortgage as a continuing security for all credit accommodations extended to petitioners and/or S. Inc. a promissory note in the sum of P3. 043 in the sum of P4. Oca Logging Industry. 3. LC6910106 D in the amount of P76. respondent Bank appealed the decision to the Court of Appeals. 53.M.R. (2) in holding that the additional conditions found on the dorsal portion of the real estate mortgage is binding upon them. 7.C. The Deputy Sheriff of Rizal scheduled the sale for July 28. 46. Rollo. Ibid.95 as of July 31. No. 4. Inc. Ibid.).On May 11. Subsequent to the execution of said promissory note. another letter of credit was opened in the amount of P66. . The Court of Appeals found the appeal meritorious and reversed and set aside the decision of the trial court.).830. p. the trial court ruled in favor of the petitioners and held that the real estate mortgage was constituted to secure only the personal obligations of the petitioners.). 124.29 computed as of June 8.).017.81 as principal. 116. On July 13.R. p. 043. Inc.66 was signed by Salustiano Oca in his capacity as President of S. in the form of letters of credit from the Bank as follows: (1) In 1969. the Bank sent a demand letter for the payment of time loan No. Rollo.721. Salustiano R. In May of 1978. p. Subsequent to the above auction sale. petitioners filed the instant petition.269. 1971 to S. 1966. Said promissory note is payable on or before May 11. Oca in her own behalf.000. LC-6910108 D in the amount of P50. that the trial court erred (1) in holding that its action to foreclosure the mortgage is barred by prescription.600. 118. 1977 (Exhibit 5. President and General Manager of North Mindanao Bay Woods Exports" for the payment of the promissory note dated May 11. 1971. and (4) in reversing the decision of the trial court. 1966 in the amount of 7. the Bank sent a demand letter to "Mr. and that respondent Bank is barred from foreclosing the real estate mortgage over T. 1977. p. Said foreclosure sale was restrained by the lower court upon commencement of the legal action for damages with preliminary injunction filed by the Oca spouses.00 with the Bank as the highest bidder (p. 1967 (Exh. Not satisfied with the decision. p. 124.. 1977 letter and at the same time requesting for an extension of 45 days within which its accounts will be settled (Exhibit 6. and in his own behalf. alleging. (2) In 1972. Oca Logging Industry.
1967.R. 1966 On or before May 11. nor was there any reference made to said conditions in deed. subsequent events show that the same was converted into a continuing security for credit accommodations extended by respondent Bank to S. that the President of the corporation [petitioner Salustiano R. While it may be true that at the time the mortgage was constituted. when due.66 on or before May 11. jointly and severally promised to pay respondent Bank the sum of P3.We find the petition unmeritorious.000. 1966. Inc. jointly and severally. for enforcement of the payment thereof the .017.000.R. which shall cover amortization on the principal and interest at the above mentioned rate.00). the same to be executed in the name of the corporation by its President and Vice President. and the subsequent payments on the 11th day of every month thereafter.R. We are unimpressed by petitioners' arguments. In support of their first two assigned errors. Moreover. to borrow and negotiate for loans. or an amount equivalent to Forty per centum (40%) of the proceeds from our exports/local sales. Oca Logging Industry. at its office at 227 Escolta. for value received. The most significant of these events was the resolution adopted by the Board of Directors of S. 43) as joint and solidary debtors along with S. the sum of THREE MILLION SEVENTEEN THOUSAND SEVEN TWENTY ONE & 66/100 PESOS (P3. or order.721.017. Ocal]. the first payment to be made on June 11. 4 Shortly thereafter. In case of non-payment of the amount of this note or any portion of it on demand. Inc. or any other amount or amounts due on the account of this note. Inc. Manila. during its special meeting held on April 27. All unpaid amortizations shall bear interest at the rate of Twelve per centum (12%) per annum. 1967. We quote the promissory note in full: P3. Inc. to consolidated all credit accommodations granted in the names of Salustiano R. as well as other loans the spouses may obtain in their personal capacity. petitioners argued that the real estate mortgage was executed to secure a loan in the amount of P200. Inc. as liquidated damages. petitioners signed a promissory note 5 wherein they and S. In is to be understood that we shall pay whatever unpaid balance remains — on the due date of this note.R. 1966 (also known as Time Loan No. it can be seen from the two events that petitioners intended to make their properties as securities for whatever credit accommodations respondents Bank might extend to S. and in connection therewith. Oca Logging Industry. whichever amount is higher. Oca Logging Industry.721. to wit: RESOLVED. Petitioners further argue that the additional condition found at the back of the real estate mortgage (also known as the Addendum) does not bind them since these conditions were not embodied in the document proper itself. May 11. the fact remains that petitioners signed the promissory note of May 11. on May 11. by the said bank into one promissory note in favor of said Republic Bank. promise to pay the REPUBLIC BANK. and each of all such payments shall be THIRTY THOUSAND PESOS (P30.R.66 Manila. Oca and/or S. shall have the power and authority to enter into negotiations with the Republic Bank. the additional conditions did not have the prior conformity of the petitioners.00 obtained by the spouses from respondent Bank. Thus. 1966. I/we.017.66).R. the entire obligation shall become due and demandable and if. Even if this Court were to agree with petitioner's contentions that the real estate mortgage they executed in 1963 was only to answer for their personal obligations to respondents Bank and their assertion that the Addendum found at the dorsal portion of the real estate mortgage did not bind them. Oca Logging Industry. Philippines Currency. Philippines. Before the date of maturity. 1966. Oca Logging Industry.721. to execute promissory notes or any evidences of indebtedness. which resolution states. Oca Logging Industry. with interest at the rate of twelve per centum (12%) per annum. I/we hereby bind myself/ourselves to make partial payments. Inc. it was intended to secure a loan obtained by petitioners in their personal capacities from respondent Bank.
jointly and severally. Oca as President and General Manager of North Mindanao Bay Woods Exports. Inc. to settle the time loan. 8 a copy of which was furnished petitioner Salustiano R. OCA In his own behalf (sgd.) FLORA O. respondent Bank made an extrajudicial demand upon S. 1977 addressed to petitioner Salustiano R. as provided for in the mortgage contract. when petitioners failed to fully pay the time loan. . Inc. Given Our foregoing discussion of the merits of the case.R. in addition to the legal fees and other incidental expenses. 1971. from the Mortgagee. Regalado. Philippine currency. 10 and another dated July 13. Presence of: INDUSTRY. 1155.. Oca Logging Industry. books and records of the Mortgagee . the decision appealed from is hereby affirmed in toto. The tolling of the prescriptive period within which respondent Bank had to file the foreclosure action began to run on said date. including interest and expenses or any other obligation owing to the Mortgagee. . principal or secondary. 11 These letters sent by respondent Bank to petitioners and/or S.. overdrafts and other credit accommodations obtained. New Civil Code). Oca Logging Industry. Inc. when there is a written extrajudicial demand by the creditors. WHEREFORE.. However. On August 12. Costs against petitioners. 1973 addressed to S. concur. C.R. As correctly observed by the Court of Appeals: It is true that the mortgage actions prescribe after ten (10) years (Article 1142.. 9 Two other demand letters were sent by respondent Bank: one dated March 13.) (Unintelligible) SALUSTIANO R. INC.) SALUSTIANO R. Nocon. (Unintelligible) by: (sgd.REPUBLIC BANK is constrained to entrust the case to its attorneys. as appears in the accounts.J.00). SO ORDERED. 43 matured on May 12. as well as those that the Mortgagee may extend to the Mortgagor.R.R. OCA President (sgd. . the principals of all of which is hereby fixed at TWO HUNDRED THOUSAND PESOS (P200. Oca Logging Industry. We hold that the Court of Appeals committed no error in reversing the decision of the trial court. JJ. Under the terms found therein. I/we. Article 1155 of the new Civil Code provides: Art. Time Loan No.000. 12 Thus. The prescription of actions is interrupted when they are filed before the court. whether direct or indirect. bind myself/ourselves to pay for attorneys fees. Navasa. the institution of extrajudicial foreclosure proceedings by respondent Bank in 1977 was not yet barred by prescription. (1973a). is on leave. . Feliciano and Campos Jr. and when there is any written acknowledgment of the debt by the debtor. its running has effectively been interrupted by written demands from the Bank as well as the written acknowledgment issued by Salustiano Oca himself. Oca by registered mail. and to secure the payment of the same and those that may hereafter obtained. In the S. OCA In her own behalf 6 This gave effect to the portion of the real estate mortgage which estates: That for and in consideration of certain loans. OCA LOGGING. effectively stopped the tolling of the prescriptive period. 1967. 7 The question that now remains to be settled is whether the right of respondent Bank to foreclose the mortgage had already prescribed.
and hence may be used only as prescribed and in the circumstances authorized by statute. 1989 PALUWAGAN NG BAYAN SAVINGS BANK. or (b) by leaving the copies at defendant's office or regular place of business with some competent person in charge thereof. Atienza." Thus. Jr. 118 Perea Street. The impossibility of prompt service should be shown by stating the efforts made to find the defendant personally and the fact that such efforts failed. JR. its stockholders or members and other persons.R. J. 03386 entitled "Paluwagan ng Bayan Savings Bank vs. However. Cruz. 1 Such service of summons may be made at the defendant's dwelling house or residence or at his office or regular place of business. Summons and copies of the complaints were served upon MFC and private respondents at the 4th Floor.. for the recovery of money market placements through certain promissory notes. and its resolution dated April 22. and private respondents.Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation. This statement should be made in the proof of service.: The rule on service of summons in this jurisdiction is too well-known. No. 78252 April 12. They were charged jointly and solidarily in accordance with Section 31 of the Corporation Code 5 which provides as follows: Section 31. ANGELO KING. QUINTIN CALDERON. 1987. vs. Ken Suy Wat. Najomot Jr. Liability of Directors. the statutory requirements of substituted service must be followed strictly. who acknowledged receipt thereof for and in behalf of MFC and the GANCAYCO. 1987.respondents. and any substituted service other than that authorized by the statute is considered ineffective. under the controlling decisions. the service of summons on a defendant is made by handing a copy thereof to the defendant in person. This is necessary because substituted service is in derogation of the usual method of service. In civil cases. CV No. which is the stated office address of MFC in the complaint. Trustees. when the defendant cannot be served personally within a reasonable time. LI. Makati. No.Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G. Calderon and Ferrer. it is a method extraordinary in character. et al. Syquia Law Offices for respondents King. by tendering it to him. It has been held that this method of service is "in derogation of the common law. KEN SUY WAT JOSE FERRER. substituted service may be effected (a) by leaving copies of the summons at the defendant's dwelling house or residence with some person of suitable age and discretion then residing therein. Sato for respondent Domingo K Li. FE SARINO and DOMINGO K. It is only when the defendant cannot be served personally within a reasonable time that substituted service maybe resorted to. petitioner. faithfully and fully. LTA Building. Nasario S. as directors and officers of MFC. or if he refuses to receive it. Metro Manila. 2 . Simeon C. Alday and Tuason for petitioner." dated January 27. through its Assistant Manager Mr. Petitioner sued Mercantile Financing Corporation MFC. Officers. Durian.R. Agabin. Mercantile Financing Corporation. 4 The facts are undisputed. The essence of personal service is the handing or tendering of a copy of the summons to the defendant himself. 3 The application of the foregoing rules is the issue in this petition for review by certiorari of a decision of the Court of Appeals in G.
00-on or before January 30. Li filed a petition for relief from judgment with a prayer for the issuance of a writ of preliminary injunction alleging therein that there was no service of . counsel for defendants filed a pleading entitled "Clarification" thereby seeking a correction of the compromise judgment on the ground that he erroneously filed the Compromise Agreement in behalf of all the defendants when in fact he was the counsel for MFC only. 1984. Aragones as counsel for the defendants. The plaintiff agrees to the proposal of settlement offered by the defendants provided that in case the latter fail to pay. On July 14. 1983. The motion for clarification was denied on January 20. 1983 100. On June 13. 1983. 1984. then account with the plaintiff as of June 15. Except those mentioned above. Quintin Calderon and Jose J. On January 26. On June 27. 1983 giving the defendants an extension of twenty (20) days from the expiration of the reglementary period within which to file the responsive pleading and/or motion to dismiss. 1983.000. that they were not served copies of the decision of the court. a decision was rendered by the trial court approving the said Compromise Agreement and enjoining the parties to comply with the terms and conditions embodied therein.00-on or before July 18. The defendants propose to pay.000. 1983.1984.00--on or before December 30. Keng Suy Wat. filed a motion to set aside the decision dated July 18. said counsel for defendants filed a motion asking for a suspension of the action for a period of sixty (60) days on the ground that there was an ongoing negotiation for an amicable settlement of the case between the parties.000.1984. The motion was denied. 1983 100. Ferrer.000. 1983. 1983. said counsel filed a "Motion To Correct Compromise Agreement" attaching thereto a copy of the resolution of the Board of Directors of MFC of July 6. On January 24. 1983 100. 1983 100. 1983. On January 16. assisted by their counsel. This motion was granted in an order dated June 29.00-on or before November 30. the plaintiff is entitled to secure from the Court a writ of execution for the collection of the unpaid account of the defendants. Aragones and Associates filed a motion for extension of time to file a responsible pleading and/or motion to dismiss. 6 On July 18.000. and praying for the correction of the judgment. Jr. in the sum of P707. 1983. 1983 on the ground that there was no service of summons upon each of them as the corporate address of the corporation was not their address as they were no longer connected therewith.1984.000. private respondent Domingo F.01 with 20% interest per annum as follows: P100. the law firm of Guillermo E.1983. It reads as follows: 1.500.1983 showing that he was the attorney-in-fact of MFC only. the parties.00-on or before August 30. 1983. Aragones had no authority to represent them in the action and compromise agreement. Guillermo E. the Syquia Law Offices. 2. counsel for plaintiff filed a motion to declare defendants in default for failure to file an answer.private respondents. in behalf of private respondents Angelo King. The motion was granted in an order dated May 26. the Compromise Agreement and the writ of execution dated December 21. jointly and severally.00-on or before October 30. The trial court granted the motion on December 16. that they learned about the same only when it was being executed.000. The said motion was signed by Atty. 1983 100. and that they did not participate as directors or officers of MFC in the subject transaction. Partial payments were made under the compromise judgment. 1983 100. petitioner filed a motion for the issuance of a writ of execution of judgment. submitted a compromise Agreement for the approval of the court. Upon failure of private respondent to make the other payments. 3. that Atty.00-on or before September 30. On January 17. two or more successive monthly installments. accordingly. This is so recited in the certification of deputy sheriff Bernardo San Juan dated May 11. the plaintiff has no more claim against the defendants.. jointly and severally. 1984. On May 24.
and (2) the case is remanded to the court of origin which is hereby ordered to direct proper service of summons on the aforesaid individual appellants at their respective correct addresses and thereafter to proceed in accordance with law. Jose Ferrer.1984 BY PRIVATE RESPONDENTS ANGELO KING. and that they were no longer connected with MFC at the time they were sued. WERE FILED OUT OF TIME. that they have not ratified the same by a partial payment of the compromise judgment. In due time. KENG SUY WAT. Hence. After an opposition to said motion was filed by the petitioner. QUINTIN CALDERON and JOSE FERRER.1983 APPROVING THE COMPROMISE AGREEMENT WHICH HAS LONG BECOME FINAL AND EXECUTORY. and (b) DOES NOT INVOLVE ANY APPEAL FROM TRIAL COURT'S DECISION DATED JULY 19. 1984. if they refuse to receive the same. Although private respondents were sued in their capacity as directors and officers of MFC. The petition is devoid of merit. 1987. Keng Suy Wat. JR. the lower court denied the same in its order dated April 6. The office address of the .1984. (C) THAT PRIVATE RESPONDENTS WHO WERE SUED AS DIRECTORS AND OFFICERS OF MFC WERE PROPERLY SERVED WITH SUMMONS. nevertheless. the instant petition predicated on the following grounds: (A) THAT THE CASE AT BAR (a) PERTAINS TO (AN) APPEAL FROM ORDER OF TRIAL COURT DATED APRIL 6. reiterating that there was no service of summons upon each of them as service of summons was made at the address of the firm with which they had severed connections. by tendering it to them. SO ORDERED. Thus. 7 A motion for reconsideration of the said decision filed by petitioner was denied by the appellate court on April 22. Aragones was not authorized to represent him or to enter into the Compromise Agreement. LI'S 'PETITION FOR RELIEF FROM JUDGMENT FILED JANUARY 25. the rule on personal service of summons must be observed in that summons must be served personally on private respondents or. The proof of service prepared by the sheriff does not show that such personal service of summons was effected. that the counsel of record of MFC has no authority to represent them in the case and in the Compromise Agreement. and Domingo Li are hereby SET ASIDE.1984.1984 BY PRIVATE RESPONDENTS ANGELO KING. DENYING (i) PRIVATE RESPONDENT DOMINGO K LI'S 'PETITION FOR RELIEF FROM JUDGMENT' FILED JANUARY 25. AND (ii) MOTION TO SET ASIDE DECISION.. Hence. a decision was rendered by the appellate court on January 27.. QUINTIN CALDERON AND JOSE FERRER. 1983 approving the compromise agreement rendered by the lower court as well as the writ of execution issued pursuant thereto as against appellants Angelo King. Jr. 1984. (B) THAT RESPONDENT COURT OF APPEALS COMPLETELY IGNORED THE BASIC QUESTION OF WHETHER (a) PRIVATE RESPONDENT DOMINGO K. and (b)'THE MOTION TO SET ASIDE DECISION. being held personally liable for the obligation subject of the litigation under the complaint filed by petitioner. COMPROMISE AGREEMENT AND QUASH EXECUTION' FILED JANUARY 14. the dispositive part of which reads as follows: In view of the foregoing.1984. KING SUY WAT. JR. Separate motions for reconsideration filed by the private respondents were also denied on May 4. they are. 1987.summons upon him and that Atty. COMPROMISE AGREEMENT AND QUASH EXECUTION FILED JANUARY 14. Quintin Calderon. private respondents appealed to the respondent Court of Appeals. the other errors assigned by the appellants need not be resolved: Wherefore: (1) the decision dated July 18.
This decision is immediately executory. report and recommendation on Atty. Counsel should be made to account before his peers. It was only after the writ of execution of the compromise judgment was being enforced that he perked up by saying that he committed an oversight and that he was not authorized by the private respondents to represent them as counsel. and that it was only then that Atty. that thereafter. There was no compliance with the requirements of the rule that there must be a previous personal service and a failure to effect the same before substituted service could be resorted to. Let a copy of this decision be furnished the Integrated Bar of the Philippines for an appropriate administrative investigation. Cruz.. WHEREFORE. SO ORDERED. He represented himself to be the counsel for the defendants including the private respondents not only in the motions he filed but also in the Compromise Agreement he submitted. Aragones. the petition is DENIED. Since the Compromise Agreement was signed by Atty. the compromise judgment is also null and void as to private respondents. Aragones was revealed when he produced the resolution of the Board of Directors of MFC to the effect that the authority of said counsel was in behalf of said corporation only and not in behalf of the private respondents. 6774 Ayala Avenue. . the lack of authority of Atty. No costs. JJ. sought an extension of time to file an answer or a responsive pleading. To say one thing today and another tomorrow is a transgression of this imperative. that said judgment was partially complied with but upon default in the payment of the balance. Candor towards the courts is a cardinal requirement of the practicing lawyer. Aragones informed the court that he committed an oversight in having filed the Compromise Agreement in behalf of private respondents when it was only MFC which hired his services. Aragones who holds office at the 9th Floor of the Finasia Building.corporation as indicated in the complaint does not appear to be the office address of private respondents as they were no longer connected with the corporation then. a writ of execution was sought from and granted by the trial court. much less in the Compromise Agreement. It is true that Atty. the trial court never acquired jurisdiction over their persons. By the same token. Personal service of summons should have been made on them at their residences as shown in the records of the Securities and Exchange Commission and the Central Bank. Such substituted service is not valid. As the private respondents have not been duly served with summons. Narvasa. Aragones' appears to be remiss in his duties and reckless in the performance of his responsibility as counsel of record in said case. Instead. he signed a Compromise Agreement in behalf of MFC and private respondents which was submitted to the court on the basis of which a compromise judgment was rendered. Metro Manila. who entered his appearance in behalf of MFC and private respondents. Griño-Aquino and Medialdea. his voluntary appearance in their behalf by the filing of the aforementioned pleadings and the Compromise Agreement would constitute a waiver of the defect in the service of summons. Aragones was duly authorized to appear in behalf of the defendants. If Atty. concur. However. An action to declare the nullity of a void judgment does not prescribe. Guillermo E. the same is null and void in so far as they are concerned. Aragones in behalf of the private respondents without their authority. Atty. the sheriff effected substituted service by leaving copies of the summons with the Assistant Manager of MFC at the place of business of said corporation with which as above stated private respondents were no longer connected. Makati. and a suspension of the proceedings pending a possible settlement of the case. 8 One last word. The ruling of the lower court that the motion to set aside the judgment and the petition for relief from judgment were filed beyond the reglementary period is untenable.
participated as an intervenor. Teves.T. TEVES. the parties to the case entered into a Compromise Agreement which embodied the partition of all the properties of Don Julian.: Once again. 12th Judicial District. et al. Josefa and Emilio likewise were given other properties at Bais. In other words. which was originally registered in the name of the conjugal partnership of Don Julian and Antonia under Original Certificate of Title (OCT) No. the second wife of Don Julian. rendered a Decision dated 31 January 1964. On the basis of the compromise agreement and approving the same.” the commercial areas. That in the event of death of Julian L. and after her death. Teves (Don Julian) contracted two marriages. The property was to remain undivided during the lifetime of Don Julian. Milagros Donio Teves. a conflict ironically made grievous by the fact that the decedent in this case had resorted to great lengths to allocate which properties should go to which set of heirs. Emilio and Josefa executed a Deed of Assignment of Assets with Assumption of Liabilities in favor of J. Julian L. Emilio B. the land was among the properties involved in an action for partition and damages docketed as Civil Case No. The present controversy involves a parcel of land covering nine hundred and fifty-four (954) square meters. Don Julian. Don Julian died intestate. with Milagros Donio Teves (Milagros Donio). the properties now selected and adjudicated to Julian L. The CFI decision declared a tract of land known as Hacienda Medalla Milagrosa as property owned in common by Don Julian and his two (2) children of the first marriage.. 5203 of the Registry of Deeds of Bais City. Milagros Reyes Teves (Milagros Reyes) and Pedro Reyes Teves (Pedro). On 14 April 1974. namely. Teves. Paragraph 13 of the Compromise Agreement. When Antonia died. (Emphasis supplied) On 16 November 1972. Teves and his four minor children. Branch 45. in favor of petitioner.T. Don Julian. petitioner. at the heart of the present dispute. Teves.SECOND DIVISION [G. Josefa and Emilio also executed an instrument entitled Supplemental to the Deed of Assignment of Assets with the Assumption of Liabilities (Supplemental Deed) dated 31 July 1973. Julian Teves. (excluding the properties comprised as Hacienda Medalla Milagrosa together with all its accessories and accessions) shall be understood as including not only their one-half share which they inherited from their mother but also the legitimes and other successional rights which would correspond to them of the other half belonging to their father. 63. vs. lays down the effect of the eventual death of Don Julian vis-àvis his heirs: 13. of Bais City. JULIAN L. 3443 entitled “Josefa Teves Escaño v. This instrument which constitutes a supplement to the earlier deed of assignment transferred ownership over Lot No. the Court is faced with the perennial conflict of property claims between two sets of heirs. the properties hereinafter adjudicated to Josefa Teves Escaňo and Emilio B. ANTONIO BALANSAG and HILARIA CADAYDAY. 2005] J. 63 of the Bais Cadastre. 141882. respondents. namely: Maria Evelyn Donio Teves (Maria Evelyn). including the electric plant. Teves. Thereafter.L. He had also four (4) children with Milagros Donio.R. and the house where Don Julian was living. among other properties. J. The factual antecedents follow. The remainder of the properties was retained by Don Julian. Less than a year later. Don Julian L. Don Julian had two children with Antonia. DECISION TINGA.” Milagros Donio. Agro. the “movie property. No. namely: Josefa Teves Escaño (Josefa) and Emilio Teves (Emilio). the Court of First Instance (CFI) of Negros Oriental. Negros Oriental. known as Lot No. including Lot No. (petitioner). his two acknowledged natural children Milagros Reyes Teves and Pedro Reyes Teves and his two legitimated children Maria Evelyn Donio Teves and Jose Catalino Donio Teves. INC. represented by its Manager. 63. Jose Catalino Donio Teves (Jose Catalino). This is a Rule 45 petition assailing the Decision dated 30 September 1999 of the Court of Appeals which reversed the Decision dated 7 May 1993 of the Regional Trial Court (RTC). . Inc. Teves (not including his share in the Hacienda Medalla Milagrosa) shall exclusively be adjudicated to the wife in second marriage of Julian L. AGRO.L. first with Antonia Baena (Antonia). March 11.
petitioner has been paying taxes assessed on the subject lot. It cited paragraph 14 of the Compromise Agreement in support of his conclusion. as the lot was still subject to future disposition by Don Julian during his lifetime. The trial court further stressed that with the use of the words “shall be. petitioner sought the registration of the subject lot in its name. they failed to register the deed. Meanwhile. the trial court dismissed the complaint filed by respondents. With Lot No. T-375. Had respondents exercised prudence before buying the subject lot by investigating the registration of the same with the Registry of Deeds. Consequently. the trial court also declared that Milagros Donio and her children had no hereditary rights thereto except as to the conjugal share of Don Julian.On the strength of the Supplemental Deed in its favor. OCT No. respondents temporarily established their home and constructed a lumber yard. the same is hereby ordered dismissed. 63 was no longer a part of his estate since he had earlier assigned it to petitioner on 31 July 1973. It added that the direct adjudication of the properties listed in the Compromise Agreement was only in favor of Don Julian and his two children by the first marriage. T-375 in the name of petitioner and the transfer of the title to Lot No.  On Lot No. the lot could not be a proper subject of extrajudicial partition by Milagros Donio and her children. were free from the forced legitimary rights of Josefa and Emilio. to Milagros Donio and her four (4) children. plus damages. 5203 in the name of spouses Don Julian and Antonia on 12 November 1979. filed a complaint before the RTC Branch 45 of Bais City. premises considered. 63. After hearing. In the deed of partition. except Hacienda Medalla Milagrosa. upon Don Julian’s death. Thus. As such. Finding no basis on the counterclaim by defendant. they entered into a yearly lease agreement with spouses Antonio Balansag and Hilaria Cadayday. the properties adjudicated in favor of Josefa and Emilio comprised their shares in the estate of their deceased mother Antonia. Respondents. Thus. Josefa and Emilio could not claim any share in his estate. 5203 (2) That plaintiffs vacate the subject land. Lot No. Maria Evelyn and Jose Catalino. Milagros Donio and her children had immediately taken possession over the subject lot after the execution of the Compromise Agreement. Paragraph 13 served only as an amplification of the terms of the adjudication in favor of Don Julian and his two children by the first marriage. 63 registered under Transfer Certificate of Title No. respondents herein. this Court finds judgment in favor of the defendant and against the plaintiff. 63. which they could claim only upon the death of the latter. The dispositive portion of the decision reads: WHEREFORE. Unaware that the subject lot was already registered in the name of petitioner in 1979. and thus hereby orders: (1) That complaint be dismissed. A court. seeking the declaration of nullity and cancellation of TCT No. The trial court ruled that the resolution of the case specifically hinged on the interpretation of paragraph 13 of the Compromise Agreement. The trial court ruled that at the time of Don Julian’s death on 14 April 1974. particularly identified as Lot No. In 1974. At the Register of Deeds while trying to register the deed of absolute sale. . T-375 was issued in the name of petitioner. Milagros Donio and her children executed a Deed of Extrajudicial Partition of Real Estate dated 18 March 1980. respondents discovered that the lot was already titled in the name of petitioner. According to the trial court. as vendees of Lot No. 63 was allotted to Milagros Donio and her two (2) children. among his other properties. (3) That plaintiffs pay costs. and not being the owners they could not have sold it. and Don Julian was under no impediment to allocate the subject lot. so it appeared. 63 in their names. issued an order cancelling OCT No. and on the same date TCT No. 63 being the conjugal property of Don Julian and Antonia. 63 from Milagros Donio as evidenced by the Deed of Absolute Sale of Real Estate dated 9 November 1983. the properties adjudicated in favor of Don Julian. Subsequently. respondents bought Lot No. Lot No. they would have discovered that five (5) years earlier. Josefa and Emilio. by preponderance of evidence. except their proper share in the Hacienda Medalla Milagrosa which was adjudicated in favor of Don Julian in the Compromise Agreement.” the adjudication in favor of Milagros Donio and her four (4) children was not final and operative. Since then. as well as their potential share in the estate of Don Julian upon the latter’s death.
L. where we defined future inheritance as any property or right not in existence or capable of determination at the time of the contract. the trial court added. and Page No. the Compromise Agreement incorporated in CFI decision dated 31 January 1964. the Court of Appeals ruled that the adjudication in favor of the heirs of Don Julian from the second marriage became automatically operative upon the approval of the Compromise Agreement. The appellate court likewise emphasized that nobody in his right judgment would preterit his legal heirs by simply executing a document like the Supplemental Deed which practically covers all properties which Don Julian had reserved in favor of his heirs from the second marriage. paragraph 13 of the Compromise Agreement has to be quoted again: 13. the application of the appropriate provisions of law to the facts borne out by the evidence on record nonetheless warrants the affirmance of the result reached by the Court of Appeals in favor of respondents. at the upper right corner of TCT No. the properties herein adjudicated to Josefa Teves Escaño and Emilio B. The disposition in the CFI decision constitutes res judicata.” were not filled up. adjudicated and reserved prior to the death of Don Julian. reversed the trial court’s decision. Teves. premises considered. petitioner elevated it to this Court via a petition for review on certiorari. thereby indicating that the TCT is “spurious and of dubious origin. It also found out that the blanks reserved for the Book No.Teves. Article 1347 of the New Civil Code explicitly provides: . T-375 in the name of petitioner. Teves and his four minor children.” Aggrieved by the appellate court’s decision. petitioner assigns as errors the following rulings of the appellate court. the properties now selected and adjudicated to Julian L. While most of petitioner’s legal arguments have merit. thereby vesting on them the right to validly dispose of Lot No. and (d) that TCT No. T-375 in the name of petitioner is spurious for not containing entries on the Book No. to wit: (a) that future legitime can be determined. (b) that Don Julian had no right to dispose of or assign Lot No. Teves. (excluding the properties comprised as Hacienda Medalla Milagrosa together with all its accessories and accessions) shall be understood as including not only their one-half share which they inherited from their mother but also the legitimes and other successional rights which would correspond to them of the other half belonging to their father. 63. Teves (not including his share in the Hacienda Medalla Milagrosa) shall exclusively be adjudicated to the wife in second marriage of Julian L. T-375. represented by its Manager. Agro. raising pure questions of law.had already been cancelled and replaced by TCT No. however. and Page No. Petitioner argues that the appellate court erred in holding that future legitime can be determined. as null and void. Inc. Milagros Donio Teves.” (Emphasis supplied) With the quoted paragraph as basis. Julian L. including Lot No. Per the appellate court. Santos is relevant. that a person may in the future acquire by succession. With costs against defendant J. The Court of Appeals. namely.L. Before this Court. (c) that the Supplemental Deed was tantamount to a preterition of his heirs from the second marriage. Teves. determined. That in the event of death of Julian L. Being the key adjudicative provision. “to identify the exact location where the said title was registered or transferred. T-375 registered in the name of J.T. The decretal part of the appellate decision reads: WHEREFORE. The Court agrees. Our declaration in Blas v. adjudicated and reserved prior to the death of Don Julian. particularly paragraph 13 thereof. The two sets of heirs acquired full ownership and possession of the properties respectively adjudicated to them in the CFI decision and Don Julian himself could no longer dispose of the same. Inc. the decision appealed from is hereby REVERSED and SET ASIDE and a new one is entered declaring the Transfer Certificate of Title No. SO ORDERED. adjudicated and reserved to Don Julian’s two sets of heirs their future legitimes in his estate except as regards his (Don Julian’s) share in Hacienda Medalla Milagrosa. 63 to petitioner because he reserved the same for his heirs from the second marriage pursuant to the Compromise Agreement. In other words. Agro. 63 in favor of respondents. Don Julian could have disposed of only his conjugal share in the Hacienda Medalla Milagrosa. his two acknowledged natural children Milagros Reyes Teves and Pedro Reyes Teves and his two legitimated children Maria Evelyn Donio Teves and Jose Catalino Donio Teves.T. Julian L.
All things which are not outside the commerce of men. Don Julian retained the absolute right to dispose of it during his lifetime. but an instrument of a special character. It had no attribute of property. good customs. and the interest to which it related was at the time nonexistent and might never exist. may be the object of a contract. . Neither will the formalities of a donation be required since donation will not be the mode of acquiring the ownership here after death. where the following requisites concur: (1) That the succession has not yet been opened. and (3) That the promissor has.” the succession must not have been opened at the time of the contract. and the exception to the exception is the partition inter vivos referred to in Article 1080. which provides the exception to the exception and therefore aligns with the general rule on future things. The partition inter vivos of the properties of Don Julian is undoubtedly valid pursuant to Article 1347. For the inheritance to be considered “future. no formalities are prescribed by the Article. It derives its binding force on the heirs from the respect due to the will of the owner of the property. Evidently. His right cannot be challenged by Milagros Donio and her children on the ground that it had already been adjudicated to them by virtue of the compromise agreement. since no will has been made it follows that the mode will be succession (intestate succession). he must first make a will with all the formalities provided by law. 1347. such partition shall be respected. Well-entrenched is the rule that all things. Article 1056 of the old Civil Code (now Article 1080) authorizes a testator to partition inter vivos his property. (2) That the object of the contract forms part of the inheritance. as the owner of the subject lot. The partition will of course be effective only after death. and this partition is neither a donation nor a testament. Thus. 63 in favor of petitioner.. prohibited under the second paragraph of Article 1347. as under the old law) to partition his estate by act inter vivos. In interpreting this provision. and distribute them among his heirs. Being the prospect of a future acquisition. including future things. 1080. It was a bare hope of succession to the property of their father. with respect to the object. However. morals. limited only by his creditors and the intangibility of the legitime of the forced heirs. The only change in the provision is that Article 1080 now permits any person (not a testator. All rights which are not intransmissible may also be the object of contracts. considering that it would become legally operative only upon the death of Don Julian. . Besides. which is revocable at any time by the causante during his lifetime. at the time of the execution of the deed of assignment covering Lot No. The historical antecedent of Article 1080 of the New Civil Code is Article 1056 of the old Civil Code.ART. Don Julian remained the owner of the property since ownership over the subject lot would only pass to his heirs from the second marriage at the time of his death. public order or public policy may likewise be the object of a contract. All services which are not contrary to law. which are not outside the commerce of man may be the object of a contract. This was intended to abrogate the then prevailing doctrine that for a testator to partition his estate by an act inter vivos. reads: ART. even future ones. the interest by its nature was inchoate. sui generis. The first paragraph of Article 1080. The exception is that no contract may be entered into with respect to future inheritance. or by will. and does not operate as a conveyance of title until his death. Should a person make a partition of his estate by an act inter vivos.. the right of his heirs from the second marriage to the properties adjudicated to him under the compromise agreement was but a mere expectancy. insofar as it does not prejudice the legitime of the compulsory heirs. A contract may be classified as a contract upon future inheritance. It does not necessarily require the formalities of a will for after all it is not the partition that is the mode of acquiring ownership. No contract may be entered into upon future inheritance except in cases expressly authorized by law. an expectancy of a right which is purely hereditary in nature. the partition here is merely the physical determination of the part to be given to each heir.. Justice Edgardo Paras advanced the opinion that if the partition is made by an act inter vivos.
And. Don Julian was also the president and director of petitioner. omitting him in the testament. 57. But there is no preterition where the testator allotted to a descendant a share less than the legitime. even if he is mentioned in the will in the latter case. Hence. The truth. 63 from the estate from which Milagros and her children could inherit. Don Julian did not execute a will since what he resorted to was a partition inter vivos of his properties. either by not naming him at all or. It consists in the silence of the testator with regard to a compulsory heir. the total omission from inheritance of Don Julian’s heirs from the second marriage. (Emphasis supplied) . a requirement for preterition to exist. Josefa. by not instituting him as heir without disinheriting him expressly. containing as it does a prohibited preterition of Don Julian’s heirs from the second marriage.C. some. Presentation of owner’s duplicate upon entry of new certificate. the illegality is reflected on the face of both titles.Emerging as the crucial question in this case is whether Don Julian had validly transferred ownership of the subject lot during his lifetime. A certificate of title accumulates in one document a precise and correct statement of the exact status of the fee held by its owner. Thus. there are other properties which the heirs from the second marriage could inherit from Don Julian upon his death. or all of the compulsory heirs in the direct line. contrary to the appellate court’s ruling.T. however. was the treasurer thereof. but the devises and legacies shall be valid insofar as they are not inofficious.. the appearance of a mere thumbmark of Don Julian instead of his signature in the Supplemental Deed would not affect the validity of petitioner’s title for this Court has ruled that a thumbmark is a recognized mode of signature. is the evidence of title and shows exactly the real interest of its owner. for cause shown.. There is of course no legal prohibition against such a transfer to a family corporation. The appellate court disagreed. The sections read. of course. as it contravenes the orthodox. Manresa defines preterition as the omission of the heir in the will. whether living at the time of the execution of the will or born after the death of the testator. while mentioning him as father. The lower court ruled that he had done so through the Supplemental Deed. holding that the Supplemental Deed is not valid. Well-settled. is the rule that a certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein. It is the total omission of a compulsory heir in the direct line from inheritance. shall annul the institution of heir. Both the alleged transfer deed and the title which necessarily must have emanated from it have to be subjected to incisive and detailed examination. This is evident from Sections 53 and 57 of Presidential Decree (P. in the absence of fraud. son. 1529 or the Property Registration Decree. No. still the petition would ultimately rise or fall on whether there was a valid transfer effected by Don Julian to petitioner. as evidenced by the court approved Compromise Agreement. The certificate. either by not mentioning him at all. the transferee relies on a voluntary instrument to secure the issuance of a new title in his name such instrument has to be presented to the Registry of Deeds. Despite the debunking of respondents’ argument on preterition.D. worse still. especially considering that such transfer would remove Lot No.. Thus. Where.. SEC. 5203 in the name of Julian by T. Besides. is that the replacement of OCT No.) No. 53. To successfully assail the juristic value of what a Torrens title establishes. or by not giving him anything in the hereditary property but without expressly disinheriting him. and his daughter from the first marriage. Procedure in registration of conveyances. nor assigning to him some part of the properties. – An owner desiring to convey his registered land in fee simple shall execute and register a . conventional and normal process established by law. since there was no total omission of a forced heir. Notably. Petitioner contends that the ruling of the Court of Appeals is erroneous. T-375 is marred by a grave irregularity which is also an illegality. Yet close scrutiny is in order. it is premature if not irrelevant to speak of preterition prior to the death of Don Julian in the absence of a will depriving a legal heir of his legitime. a sufficient and convincing quantum of evidence on the defect of the title must be adduced to overcome the predisposition in law in favor of a holder of a Torrens title. except in cases expressly provided for in this Decree or upon order of the court. as in this case. etc. thus: SEC. A couple of provisions in the Compromise Agreement are indicative of Don Julian’s desire along this line. is hardly imaginable as it is unfounded. In the case at bar. The contention is well-founded. Article 854 provides that the preterition or omission of one. – No voluntary instrument shall be registered by the Register of Deeds unless the owner’s duplicate certificate is presented with such instrument.
” as required by Section 57 of P. 375 is issued per Order of the Court of First Instance on file in this office. What appears instead on OCT No.L. 1979 4:00 P. Going by the legal.T. which has not been lost.. 5203. entry is to be believed. gains significant relevance. series of 1972. as the petition for reconstitution is premised on the loss merely of the owner’s duplicate of the OCT Apparently. and the court issued an order for the reconstitution of the owner’s duplicate and its replacement with a new one. No. accepted and normal process. Emilio B. There is nothing on OCT No. Teves. 5203 and the consequent issuance of TCT No. INC. the reconstitution court may order the reconstitution and replacement of the lost title only. Teves. petitioner had resorted to the court order as a convenient contrivance to effect the transfer of title to the subject lot in its name. directed the issuance of a new transfer certificate of title —even designating the very number of the new transfer certificate of title itself—the order would be patently unlawful. and null and void and a new Certificate of Title No. it should have presented it to the Register of Deeds to secure the transfer of the title in its name. A court cannot legally order the cancellation and replacement of the original of the O. all its assets and liabilities as reflected in the Balance Sheet of the former as of December 31. as the entry intimates. But if the court order. 12.. the court concerned (CFI. The provision reads: . instead of the Supplemental Deed which should be its proper course of action.M. But if the . The Register of Deeds shall note upon the original and duplicate certificate the date of transfer. WHEREAS. Escaño. MONTESA Acting Deputy Register of Deeds II (Emphasis supplied) What the entry indicates is that the owner’s duplicate of OCT No. the Register of Deeds exceeded his authority in issuing not just a reconstituted owner’s copy of the original certificate of title but a new transfer certificate of title in place of the original certificate of title. it had not done so. The original and the owner’s duplicate of the grantor’s certificate shall be stamped “cancelled.” The deed of conveyance shall be filed and endorsed with the number and the place of registration of the certificate of title of the land conveyed. A plain reading of the pertinent provisions of the Supplemental Deed discloses that the assignment is not supported by any consideration. T-375 although the original of OCT No. and entered in the latter’s notarial register as Doc. there is absolutely no mention of a reference to said document in the original and transfer certificates of title. 5203 on file with the Registry of Deeds had not been lost. Page No. nothing else. Since what was lost is the owner’s copy of OCT No. 1374: Kind: Order: Executed in favor of J. according to the entry) issued an order for the issuance of a new title which is TCT No. V. No. Book No. 5203 is the following pertinent entry: Entry No. It was so constrained to do because the Supplemental Deed does not constitute a deed of conveyance of the “registered land in fee simple” “in a form sufficient in law. transferred. 1971. The Register of Deeds shall thereafter make out in the registration book a new certificate of title to the grantee and shall prepare and deliver to him an owner’s duplicate certificate. AGRO. only that owner’s copy could be ordered replaced.. Escaño at Dumaguete City on 16th day of November 1972 and ratified in the City of Dumaguete before Notary Public Lenin Victoriano. Teves and Josefa T. (SGD) MANUEL C.T. It is in this regard that the finding of the Court of Appeals concerning the absence of entries on the blanks intended for the Book No.T. in the Deed of Assignment of Assets with the Assumption of Liabilities executed by Julian L. In fact. this aspect fortifies the conclusion that the cancellation of OCT No. (Emphasis supplied) As petitioner bases its right to the subject lot on the Supplemental Deed. T-375 either which shows that it had presented the Supplemental Deed. Date of Instrument: November 12. 5203 or on the succeeding TCT No.C.D. Julian L. 5203 was lost. conveyed and assigned unto J. 1979 Date of Inscription: Nov. T-375 in its place are not predicated on a valid transaction. 367. Thus. a petition for the reconstitution of the said owner’s duplicate was filed in court..L. 17. Teves and Josefa T. Emilio B.deed of conveyance in a form sufficient in law. the volume and page of the registration book in which the new certificate is registered and a reference by number to the last preceding certificate. Indeed. and Page No. 1529. INC. AGRO. CONDITIONS: Lost owner’s duplicate is hereby cancelled. Apparently.
paragraph (2). If the acceptance does not appear in the same document. the above described parcel of land[s] with a fair market value of EIGHTY-FOUR THOUSAND PESOS (P84. We quote. (2) object certain which is the subject matter of the contract. The acceptance may be made in the same deed of donation or in a separate public document. specifying therein the property donated and the value of the charges which the donee must satisfy. not of petitioner. Neither could the Supplemental Deed validly operate as a donation. Consequently. for and in consideration of the above premises the ASSIGNOR hereby transfers. Certificate of Title No. said mortgage. executed as it was in favor of the Rehabilitation Finance Corporation and there being no showing that petitioner itself paid off the mortgate obligation. The acceptance may be made in the very same instrument of donation. Rather.. the testimony of petitioner’s accountant that the assignment is supported by consideration cannot prevail over the clear provision to the contrary in the Supplemental Deed. of which Lot No. 63. the said annotation shows that the mortgage was actually executed in favor of Rehabilitation Finance Corporation. No. Article 1318 of the New Civil Code enumerates the requisites of a valid contract. apparently considered the 1948 mortgage which is annotated on the back of the TCT No. Lot No. Article 749 of the New Civil Code is clear on the point. or with unlawful cause produce no effect whatsoever. Philippine Currency. as mentioned in the Decision made in the Court of First Instance of Negros Oriental. 31. 1964 pertaining to Civil Case No. made in a separate instrument. NOW.. conveys. 749. forecloses the application of the presumption of existence of consideration established by law. et al.. Thus.00).. 12th Judicial District Branch II. is either not . namely: (1) consent of the contracting parties. 3443 the following properties were adjudicated to Don Julian L. and which transfer.. thus: Art. The absence of the usual recital of consideration in a transaction which normally should be supported by a consideration such as the assignment made by Don Julian of all nineteen (19) lots he still had at the time. this Deed of Assignment is executed by the parties herein in order to effect the registration of the transfer of the above corporation. et al v. However. INC. this Court declared that title to immovable property does not pass from the donor to the donee by virtue of a deed of donation until and unless it has been accepted in a public instrument and the donor duly notified thereof. and (3) Cause of the obligation which is established. it is a mere statement of the fair market value of all the nineteen (19) properties enumerated in the instrument. that were transferred by Don Julian in favor of petitioner. Clearly. on the other hand. but it shall not take effect unless it is done during the lifetime of the donor. Tax Dec. it must be made in a public document. If the acceptance is made in a separate instrument. 5203.WHEREAS. Article 1352 declares that contracts without cause. or where the formal notice of the acceptance.000.00 adverted to in the dispositive portion of the instrument does not represent the consideration for the assignment made by Don Julian. In order that the donation of the immovable may be valid. Where the deed of donation fails to show the acceptance. and assigns unto J. Those contracts lack an essential element and they are not only voidable but void or inexistent pursuant to Article 1409. In Sumipat.. could not have been the consideration for the assignment to petitioner. together with all improvements. conveyance and assignment shall become absolute upon signing. WHEREAS. 63 is just one..T. THEREFORE.P2. Assessed value .L. T-375 as the consideration for the assignment. 33. on the compromise agreement. on Dec. it must be made in another. (Emphasis supplied) The amount of P84. The Court of Appeals.. AGRO. and this step shall be noted in both instruments.00 . Teves. Banga.720. the donor shall be notified thereof in an authentic form. From the properties at Bais Adjudicated to Don Julian L.Teves . coupled with the fact that the assignee is a corporation of which Don Julian himself was also the President and Director.000.
. concur. matters not assigned as errors on appeal but consideration of which are necessary in arriving at a just decision and complete resolution of the case.. . WHEREFORE.. Agro. Thus. In the instant case. whether it is valid or void. this Court has ruled that appellate courts have ample authority to rule on specific matters not assigned as errors or otherwise not raised in an appeal. From the substantive and procedural standpoints. SO ORDERED.e. is unmistakably determinative of the underlying controversy. the correct characterization of the Supplemental Deed. Puno. especially as it appears on its face to be a blatant nullity. i. In the case at bar. the donation is null and void. Inc. Specifically.given to the donor or else not noted in the deed of donation and in the separate acceptance. Austria-Martinez. (Chairman). Thus. the cardinal objectives to write finis to a protracted litigation and avoid multiplicity of suits are worth pursuing at all times. the Decision dated 30 September 1999 of the Court of Appeals is hereby AFFIRMED. and Chico-Nazario. the issue of validity or nullity of the instrument which is at the core of the controversy is interwoven with the issues adopted by the parties and the rulings of the trial court and the appellate court. JJ. the absence of acceptance by the donee in the same deed or even in a separate document is a glaring violation of the requirement.T. or to serve the interest of justice or to avoid dispensing piecemeal justice. this Court is also resolute in striking down the alleged deed in this case. if these are indispensable or necessary to the just resolution of the pleaded issues. One final note. Sr. In other words. although the Supplemental Deed appears in a public document. foregoing premises considered. Callejo. Costs against petitioner J.L.
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