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PAHAMOTANG v PNB

Melitona Pahamotang & was survived by her husband Agustin, & their 8 children:
Ana, Genoveva, Isabelita, Corazon, Susana, Concepcion, Josephine & Eleanor.
Agustin filed a Petition for the Issuance of Letters of Administration over the estate
of his wife & this was granted. In his petition, he identified Josephine & Eleanor as
among the heirs of Melitona. In an earlier case, Agustin was appointed as Josephine
& Eleanors judicial guardian.
PNB & Agustin executed an Amendment of Real & Chattel Mortgages w/ Assumption
of Obligation. Earlier, the intestate court approved the mortgage to PNB of assets of
the estate to secure an obligation in the amount of P570K. offered as securities are
12 parcels of registered land. Austin filed a Petition for Authority to Increase
Mortgage on the properties & this was granted.
Agustin again filed w/ the intestate court another petition, Petition for Declaration of
Heirs & For Authority to Increase Indebtedness where he alleged the necessity for an
additional loan form PNB to capitalize the business of the estate, the additional loan
to be secured by additional collateral in the form of a parcel of land covered by an
OCT in the name of Heirs of Melitona. The court ranted the authority to seek
additional loan not exceeding P5M, but denied Agustin s prayer for declaration of
heirs for being premature. Thus a real estate mortgage contract for P4.5M was
executed by PNB & Agustin.
Agustin filed a Petition/Request for Judicial Authority to Sell Certain Properties of the
Estate, praying for authority to sell to Arturo Arguna certain properties of the estate.
He again filed a Petition to Sell the Properties of the Estate in favour of Pahamotang
Logging Enterprises Inc. (PLEI). In separate orders, the court granted Agustin
authority to sell estate properties in w/c orders the court also required all heirs of
Melitona to give their express conformity to the disposal of the subject properties of
the estate & to sign the deed of sale to be submitted to the court. (Strangely, the 2
orders were dated 2 days earlier than the day Agustin supposedly filed his petition.)
Thus the estate properties were sold to Arguna & PLEI. Ana, Isabelita & Corazon
petitioned for the payment of their shares from the sales of estate properties w/c
was granted.
The obligation secured by the mortgages were never satisfied, thus PNB was able to
foreclose the mortgage in its favour. Josephine & Eleanor filed their complaint for
Nullification of Mortgage Contracts & Foreclosure Proceedings & Damages against
Agustin, PNB, Arguna, and PLEI. This was granted by the RTC. The CA reversed.
Josephine & Eleanors contentions: As heirs of their mother, they are entitled to
notice of Agustins several petitions seeking authority to sell & mortgage estate
properties. Thus, the 4 orders w/c allowed Agustin to sell & mortgage the properties
are void on account of Agustins non-compliance w/ the mandatory requirements of
Rule 89.
PNBs contention: The validity of the orders can only be challenged in a direct action
for such purpose & not in an action to annul contracts as they had done. The
mortgage on the properties is valid because it was made w/ the approval of the court
& w/ the knowledge of the heirs of Melitona.
ISSUE
(a) W/N Josephine & Eleanor can obtain relief from the effects of contracts of sale &
mortgage entered into by Agustin w/o 1
st

initiating a direct action against the orders


of the intestate court authorizing the challenged contracts.
(b) W/N laches could be imputed against Josephine & Eleanor.
RULING
(a) YES. The RTC made a factual finding that Josephine & Eleanor were not notified
by their father of the filing of his petitions for permission to mortgage/sell the estate
properties. Settled is the rule that when an order authorizing the sale or
encumbrance of real property was issued by the testate or intestate court w/o

previous notice to the heirs, devisees & legatees as required by the Rules, it is not
only the contract itself w/c is null & void but also the order of the court authorizing
the same.
(b) NO. Laches is negligence/omission to assert a right w/in a reasonable time,
warranting the presumption that the party entitled to assert it has either abandoned
or declined the right. In the case at bar, the element of delay in questioning the
subject orders of the court is sorely lacking. They were totally unaware of the plan of
Agustin to mortgage/sell the properties.

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