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A.M. No.

P-01-1448 June 25, 2013 and T-116468), also in the name of respondent, were issued on
(Formerly OCA IPI No. 99-664-P) February 28, 1997.6

RODOLFO C. SABIDONG, Complainant, On motion of Ernesto Pe Benito, Administrator of the Hodges Estate,
vs. NICOLASITO S. SOLAS (Clerk of Court IV), Respondent. a writ of demolition was issued on March 3, 1998 by the probate
court in favor of respondent and against all adverse occupants of Lot
The present administrative case stemmed from a sworn letter- 11.7
complaint1 dated May 29, 1999 filed before this Court by Rodolfo C.
Sabidong (complainant) charging respondent Nicolasito S. Solas, On June 14, 1999, this Court received the sworn letter-complaint
Clerk of Court IV, Municipal Trial Court in Cities (MTCC), Iloilo City asserting that as court employee respondent cannot buy property in
with grave and serious misconduct, dishonesty, oppression and litigation (consequently he is not a buyer in good faith), commit
abuse of authority. deception, dishonesty, oppression and grave abuse of authority.
Complainant specifically alleged the following:
The Facts
3. Complainant and his siblings, are possessors and
occupants of a parcel of land situated at Brgy. San Vicente,
Trinidad Sabidong, complainants mother, is one of the longtime
occupants of a parcel of land, designated as Lot 11 (Lot 1280-D-4-11 Jaro, Iloilo City, then identified as Lot No. 1280-D-4-11,
of consolidation-subdivision plan [LRC] Pcs-483) originally registered later consolidated and subdivided and became known as
in the name of C. N. Hodges and situated at Barangay San Vicente, Lot 11, then registered and titled in the name of Charles
Jaro, Iloilo City.2 The Sabidongs are in possession of one-half portion Newton Hodges. The Sabidong family started occupying
of Lot 11 of the said Estate (Hodges Estate), as the other half-portion this lot in 1948 and paid their monthly rentals until
was occupied by Priscila Saplagio. Lot 11 was the subject of an sometime in 1979 when the Estate of Hodges stopped
accepting rentals. x x x
ejectment suit filed by the Hodges Estate, docketed as Civil Case No.
14706 of the MTCC Iloilo City, Branch 4 ("Rosita R. Natividad in her
capacity as Administratrix of C.N. Hodges Estate, plaintiff vs. Priscila 4. Upon knowing sometime in 1987 that the property over
Saplagio, defendant"). On May 31, 1983, a decision was rendered in which their house is standing, was being offered for sale by
said case ordering the defendant to immediately vacate the portion of the Estate, the mother of complainant, TRINIDAD
Lot 11 leased to her and to pay the plaintiff rentals due, attorneys CLAVERIO SABIDONG (now deceased), took interest in
fees, expenses and costs.3 At the time, respondent was the Clerk of buying said property, Lot 11;
Court III of MTCC, Branch 3, Iloilo City.
Sometime in October 1984, respondent submitted an Offer to ordinary housekeeper and a laundrywoman, who never
Purchase on installment Lots 11 and 12. In a letter dated January 7, received any formal education, and did not even know how
1986, the Administratrix of the Hodges Estate rejected respondents to read and write. When Trinidad Claverio Sabidong,
offer in view of an application to purchase already filed by the actual together with her children and the complainant in this case,
occupant of Lot 12, "in line with the policy of the Probate Court to tried to negotiate with the Estate for the sale of the subject
give priority to the actual occupants in awarding approval of Offers". property, they were informed that all papers for transaction
While the check for initial down payment tendered by respondent must pass through the respondent in this case, Nicolasito
was returned to him, he was nevertheless informed that he may file Solas. This is unusual, so they made inquiries and they
an offer to purchase Lot 11 and that if he could put up a sufficient learned that, Nicolasito Solas was then the Clerk of Court
down payment, the Estate could immediately endorse it for approval 111, Branch 3, Municipal Trial Court in Cities, Iloilo City and
of the Probate Court so that the property can be awarded to him presently, the City Sheriff of Iloilo City;
"should the occupant fail to avail of the priority given to them." 4
6. The respondent Nicolasito Solas, then Clerk of Court III,
The following day, January 8, 1986, respondent again submitted an MTCC, Iloilo City, has knowledge, by reason of his position
Offer to Purchase Lot 11 with an area of 234 square meters for the that in 1983 Hodges Estate was ejecting occupants of its
amount of 35,100. Under the Order dated November 18, 1986 land. x x x Taking advantage of this inside information that
issued by the probate court (Regional Trial Court of Iloilo, Branch 27) the land subject of an ejectment case in the Municipal Trial
in Special Proceedings No. 1672 ("Testate Estate of the Late Charles Court in Cities, Iloilo City, whom respondent is a Clerk of
Newton Hodges, Rosita R. Natividad, Administratrix"), respondents Court III, the respondent surreptitiously offered to buy the
Offer to Purchase Lot 11 was approved upon the courts observation said lot in litigation. x x x
that the occupants of the subject lots "have not manifested their
desire to purchase the lots they are occupying up to this date and 7. Complainant nor any member of his family did not know
considering time restraint and considering further, that the sales in that as early as 1984, the respondent had offered to
favor of the x x x offerors are most beneficial to the estate x x x". On purchase the subject lot from the estate x x x. After
January 21, 1987, the probate court issued another Order granting receiving the notice of denial of his offer to purchase, dated
respondents motion for issuance of a writ of possession in his favor.
January 7, 1986, respondent made a second offer to
The writ of possession over Lot 11 was eventually issued on June purchase the subject property the following day, January 8,
27, 1989.5
1986, knowing fully well that the subject property was being
occupied. x x x
On November 21, 1994, a Deed of Sale With Mortgage covering Lot
11 was executed between respondent and the Hodges Estate 8. Because of this denial, respondent met with the family of
represented by its Administratrix, Mrs. Ruth R. Diocares. Lot 11 was
the complainant and negotiated for the sale of the property
thereby conveyed to respondent on installment for the total purchase and transfer of the title in favor of the latter. Respondent
price of 50,000.
made the complainant and his family believed that he is the
representative of the estate and that he needed a
Consequently, Transfer Certificate of Title (TCT) No. T-11836 in the downpayment right away. All the while, the Sabidong family
name of C. N. Hodges was cancelled and a new certificate of title, (who were carpenters, laundrywomen, a janitor, persons
TCT No. T-107519 in the name of respondent was issued on who belong to the underprivileged) relied on the
December 5, 1994. Lot 11 was later subdivided into two lots, Lots 11- representations of the respondent that he was authorized to
A and 11-B for which the corresponding titles (TCT Nos. T-116467
facilitate the sale, with more reason that respondent expenses for the subdivision of the subject lot. The
represented himself as the City Sheriff; respondent facilitated the subdivision and after the same
was approved, the complainant did not know that two (2)
9. That between 1992-1993, a sister of the complainant titles were issued in the name of the respondent. x x x;
who was fortunate to have worked abroad, sent the amount
of Ten Thousand (10,000.00) Pesos to complainants 20. Meanwhile, respondent prepared a Contract to Sell, for
mother, to be given to respondent Nicolasito Solas. x x x the complainant and his neighbor Norberto Saplagio to affix
After receiving the money, respondent assured the their signatures, pursuant to their previous agreement for
Sabidong family that they will not be ejected from the lot, he the buyers to avail of a housing loan with the Home
being the City Sheriff will take care of everything, and Development Mutual Fund (PAG-IBIG). Complainant
taking advantage of the illiteracy of Trinidad Claverio attended the seminar of the HDMF for seven (7) times, in
Sabidong, he did not issue any receipt; his desire to consummate the sale. However, when the
complainant affixed his signature in the contract, he was
10. True enough, they were not ejected instead it took the surprised that the owner of the subject property was the
respondent. When complainant raised a question about
respondent some time to see them again and demanded
additional payment. In the meanwhile, the complainant this, respondent assured complainant that everything was
alright and that sooner complainant will be the owner of the
waited for the papers of the supposed sale and transfer of
title, which respondent had promised after receiving the property. Complainant and his family, all these years, had
downpayment of 10,000.00; believed and continued to believe that the owner was the
estate of Hodges and that respondent was only the
representative of the estate;
11. That sometime again in 1995, respondent again
received from the mother of complainant the amount of Two
Thousand (2,000.00) Pesos, allegedly for the expenses of 21. The Contract to Sell, appeared to have been notarized
the documentation of sale and transfer of title, and again on June 3, 1996, however, no copy thereof was given to the
respondent promised that the Sabidong family will not be complainant by the respondent. Respondent then, took the
ejected; papers and documents required by the HDMF to be
completed, from the complainant allegedly for the purpose
of personally filing the same with the HDMF. Complainant
12. To the prejudice and surprise of the complainant and freely and voluntarily delivered all pertinent documents to
his family, respondent was able to secure an order for the the respondent, thinking that respondent was helping in the
approval of his offer to purchase x x x in Special fast and easy release of the loan. While the said documents
Proceedings No. 1672 x x x; were in the possession of the respondent, he never made
any transaction with the HDMF, worse, when complainant
13. Worse, respondent moved for the issuance of a Writ of tried to secure a copy of the Contract to Sell, the copy given
Possession in his favor, which the probate court acted was not signed by the Notary Public, x x x;
favorably x x x. A writ of possession was issued on June
27, 1989 x x x; 22. The complainant [was] shocked to learn that
respondent had canceled the sale and that respondent
14. x x x respondent took advantage of the trust and refused to return the documents required by the HDMF.
confidence which the Sabidong family has shown, Respondent claimed that as Sheriff, he can cause the
considering that respondent was an officer of the court and demolition of the house of the complainant and of his
a City Sheriff at that. The complainant and his family family. Respondent threatened the complainant and he is
thought that respondent, being a City Sheriff, could help capable of pursuing a demolition order and serve the same
them in the transfer of the title in their favor. Never had they with the assistance of the military. x x x;
ever imagined that while respondent had been receiving
from them hard-earned monies purportedly for the sale of 23. After learning of the demolition order, complainant
the subject property, respondent was also exercising acts attempted to settle the matter with the respondent,
of ownership adverse to the interest of the complainant and however, the same proved futile as respondent boasted
his family; that the property would now cost at Four Thousand Five
Hundred (4,500.00) Pesos;
15. Being an officer of the court and supposed to be an
embodiment of fairness and justice, respondent acted with 24. The threats of demolition is imminent. Clearly,
malice, with grave abuse of confidence and deceit when he complainant and his family were duped by the respondent
represented that he can facilitate the sale and titling of the and are helpless victims of an officer of the court who took
subject property in favor of the complainant and his family; advantage of their good faith and trust. Complainant later
was informed that the subject property was awarded to the
16. That when several thousands of pesos were given to respondent as his Sheriffs Fees, considering that
the respondent as payment for the same and incidental respondent executed the decisions in ejectment cases filed
expenses relative thereto, he was able to cause the transfer by the Hodges estate against the adverse occupants of its
of the title in his favor. x x x; vast properties;

17. After the death of Trinidad Claverio Sabidong x x x the 25. A civil case for the Annulment of Title of the respondent
respondent received from the complainant the amount of over the subject property is pending before the Regional
Five Thousand (5,000.00) Pesos x x x When a receipt Trial Court of Iloilo, Branch 37 and a criminal complaint for
was demanded, respondent refused to issue one, and Estafa is also pending preliminary investigation before the
instead promised and assured the complainant that they Office of the City Prosecutor of Iloilo City, known as I.S. No.
will not be ejected; 1559-99, both filed [by] the complainant against the
xxxx respondent.8

19. The complainant again, through his sister-in-law, Acting on the complaint, Court Administrator Alfredo L. Benipayo
Socorro Sabidong, delivered and gave to the respondent issued a 1st Indorsement9 dated July 8, 1999, requiring respondent
the amount of Three Thousand (3,000.00) Pesos as
to file his comment on the Complaint dated May 29, 1999. On the cases for Estafa and annulment of title and damages which
October 21, 1999, respondent submitted his Comment. 10 complainant filed against him.

In a Resolution11 dated July 19, 1999, Public Prosecutor Constantino On September 10, 2007, respondent compulsorily retired from
C. Tubilleja dismissed the Estafa charge against respondent for service. Prior to this, he wrote then Senior Deputy Court
insufficiency of evidence. Administrator Zenaida N. Elepao, requesting for the release of his
retirement benefits pending resolution of the administrative cases
against him.24 In a Memorandum25 dated September 24, 2007,
On November 29, 2000, Court Administrator Benipayo issued an
Evaluation and Recommendation12 finding respondent guilty of Senior Deputy Court Administrator Elepao made the following
violating Article 149113 of the Civil Code. Said rule prohibits the recommendations:
purchase by certain court officers of property and rights in litigation a) The request of Nicolasito S. Solas, former Clerk of Court,
within their jurisdiction. Court Administrator Benipayo recommended MTCC, Iloilo City for partial release of his retirement
that: benefits be GRANTED; and
1. this administrative complaint be treated as an b) Atty. Lilian Barribal Co, Chief, Financial Management
Office, Office of the Court Administrator be DIRECTED to
administrative matter;
2. respondent Nicolasito S. Solas, Clerk of Court IV, OCC, (1) WITHHOLD the amount of Two Hundred Thousand
Pesos (200,000.00) from the retirement benefits of
MTCC, Iloilo City be SUSPENDED for six (6) months, with
warning that a repetition of the same offense in the future Nicolasito S. Solas to answer for any administrative liability
will be dealt with more severely; that the Court may find against him in A.M. No. P-01-1448
3. inasmuch as there are factual issues regarding the (Formerly Administrative Matter OCA IPI No. 99-664-P);
delivery of substantial amounts which complainant alleged OCA IPI No. 99-659-P; OCA IPI No. 99-670-P; and OCA
and which defendant denied, this issue should be IPI No. 99-753-P; and (2) RELEASE the balance of his
investigated and the Executive Judge of the Regional Trial retirement benefits.26
Court of Iloilo City should be designated to hear the
evidence and to make a report and recommendation within Eventually, the case was assigned to Judge Roger B. Patricio, the
sixty (60) days from receipt.14 new Executive Judge of the Iloilo City RTC for investigation, report
and recommendation.
In a Resolution15 dated January 22, 2001, this Court adopted the
recommendation of the Court Administrator to treat the present On June 2, 2008, Judge Patricio submitted his final Report and
administrative action as a regular administrative matter and to Recommendation27 finding respondent liable for grave misconduct
designate the Executive Judge of the RTC of Iloilo City to hear the and dishonesty under A.M. No. 03-06-13-SC or the Code of Conduct
evidence of the parties. for Court Personnel. Based on the evidence presented, Judge
Patricio concluded that respondent misappropriated the money which
he received for the filing of complainants loan application. Such
The Court, however, noted without action the Court Administrators
recommendation to suspend respondent for six months. money could not have been used for the partition of Lot No. 1280-D-
4-11 since the same was already subdivided into Lots 11-A and 11-B
when respondent presented the Contract to Sell to complainant. And
On March 13, 2001, Acting Court Administrator Zenaida N. Elepao despite respondents promise to keep complainant and his family in
forwarded the records of this case to Executive Judge Tito G. Gustilo peaceful possession of the subject property, respondent caused the
of the Iloilo City RTC.16 In a Resolution17 dated July 18, 2001, the issuance of a writ of demolition against them. Thus, Judge Patricio
Court referred this case to the Executive Judge of the RTC of Iloilo recommended the forfeiture of respondents salary for six months to
City for investigation, report and recommendation within 60 days be deducted from his retirement benefits.
from notice. By Order18 dated August 30, 2001, Executive Judge
Gustilo set the case for reception of evidence.
In a Resolution28 dated September 29, 2008, the Court noted Judge
Patricios Investigation Report and referred the same to the Office of
On March 19, 2004, the RTC of Iloilo, Branch 37, dismissed the case the Court Administrator (OCA) for evaluation, report and
for annulment of title, damages and injunction against respondent for recommendation.
lack of merit.19
Findings and Recommendation of the OCA
In a Resolution20 dated June 15, 2005, the Court resolved to reassign
the instant administrative case to Executive Judge Rene S. Hortillo
for investigation, report and recommendation within 60 days from In a Memorandum29 dated January 16, 2009, then Court
notice. In a Letter21 dated September 15, 2005, Executive Judge Administrator Jose P. Perez found respondent liable for serious and
Hortillo informed the Court that per the records, the parties have grave misconduct and dishonesty and recommended the forfeiture of
presented their testimonial and documentary evidence before retired respondents salary for six months, which shall be deducted from his
Executive Judge Tito G. Gustilo. retirement benefits.

On September 12, 2005, Executive Judge Hortillo required the The Court Administrator held that by his unilateral acts of
parties to file their respective memoranda within 60 days from notice, extinguishing the contract to sell and forfeiting the amounts he
upon submission of which the case shall be deemed submitted for received from complainant and Saplagio without due notice,
resolution.22 respondent failed to act with justice and equity. He found
respondents denial to be anchored merely on the fact that he had
not issued receipts which was belied by his admission that he had
In his Memorandum,23 respondent maintained that his purchase of asked money for the expenses of partitioning Lot 11 from
the subject land is not covered by the prohibition in paragraph 5, complainant and Saplagio. Since their PAG-IBIG loan applications
Article 1491 of the Civil Code. He pointed out that he bought Lot 11-A did not materialize, complainant should have returned the amounts
a decade after the MTCC of Iloilo, Branch 3, had ordered the given to him by complainant and Saplagio.
ejectment of Priscila Saplagio and Trinidad Sabidong from the
subject lot. He insisted that public trust was observed when
complainant was accorded his right of first refusal in the purchase of On February 11, 2009, the Court issued a Resolution30 requiring the
parties to manifest whether they are willing to submit the case for
Lot 11-A, albeit the latter failed to avail said right. Asserting that he is
a buyer in good faith and for value, respondent cited the dismissal of decision on the basis of the pleadings and records already filed with
the Court. However, the copy of the Resolution dated February 11,
2009 which was sent to complainant was returned unserved with the On the charges against the respondent, we find him liable for
postal carriers notation "RTS-Deceased." Meanwhile, in a dishonesty and grave misconduct.
Compliance31 dated August 24, 2009, respondent expressed his
willingness to submit the case for decision and prayed for an early Misconduct is a transgression of some established and definite rule
resolution of the case. of action, more particularly, unlawful behavior as well as gross
negligence by a public officer. To warrant dismissal from service, the
Our Ruling misconduct must be grave, serious, important, weighty, momentous
and not trifling. The misconduct must imply wrongful intention and not
Article 1491, paragraph 5 of the Civil Code prohibits court officers a mere error of judgment. The misconduct must also have a direct
such as clerks of court from acquiring property involved in litigation relation to and be connected with the performance of the public
within the jurisdiction or territory of their courts. Said provision reads: officers official duties amounting either to maladministration or willful,
intentional neglect, or failure to discharge the duties of the office. 39

Article 1491. The following persons cannot acquire by purchase,

even at a public or judicial auction, either in person or through the Dishonesty is the "disposition to lie, cheat, deceive, defraud or
mediation of another: betray; untrustworthiness; lack of integrity; lack of honesty, probity, or
xxxx integrity in principle; and lack of fairness and straightforwardness." 40

(5) Justices, judges, prosecuting attorneys, clerks of superior and In this case, respondent deceived complainants family who were led
inferior courts, and other officers and employees connected with the to believe that he is the legal representative of the Hodges Estate, or
administration of justice, the property and rights in litigation or levied at least possessed of such power to intercede for overstaying
upon an execution before the court within whose jurisdiction or occupants of the estates properties like complainant. Boasting of his
territory they exercise their respective functions; this prohibition position as a court officer, a City Sheriff at that, complainants family
includes the act of acquiring by assignment and shall apply to completely relied on his repeated assurance that they will not be
lawyers, with respect to the property and rights which may be the ejected from the premises. Upon learning that the lot they were
object of any litigation in which they may take part by virtue of their occupying was for sale and that they had to negotiate for it through
profession. respondent, complainants family readily gave the amounts he
x x x x (Emphasis supplied.) demanded and, along with Saplagio, complied with the requirements
for a loan application with PAG-IBIG. All the while and unknown to
The rationale advanced for the prohibition is that public policy complainants family, respondent was actually working to acquire Lot
disallows the transactions in view of the fiduciary relationship 11 for himself.
involved, i.e., the relation of trust and confidence and the peculiar
control exercised by these persons.32"In so providing, the Code tends Thus, while respondent was negotiating with the Hodges Estate for
to prevent fraud, or more precisely, tends not to give occasion for the sale of the property to him, he collected as down payment 5,000
fraud, which is what can and must be done."33
from complainants family in July 1986. Four months later, on
November 18, 1986, the probate court approved respondents offer
For the prohibition to apply, the sale or assignment of the property to purchase Lot 11. The latter received further down payment from
must take place during the pendency of the litigation involving the complainant in the amount of 10,000 between 1992 and 1993, or
property.34 Where the property is acquired after the termination of the before the Deed of Sale with Mortgage41 dated November 21, 1994
case, no violation of paragraph 5, Article 1491 of the Civil Code could be executed in respondents favor.
Thereafter, respondent demanded 3,000 from complainant
In the case at bar, when respondent purchased Lot 11-A on supposedly for the subdivision of Lot 11 between the latter and the
November 21, 1994, the Decision in Civil Case No. 14706 which was Saplagios. Yet, it was not until respondent obtained title over said lot
promulgated on May 31, 1983 had long become final. Be that as it that the same was subdivided into Lots 11-A and 11-B. The
may, it can not be said that the property is no longer "in litigation" at records42 of the case show that the Subdivision Plan dated April 25,
that time considering that it was part of the Hodges Estate then under 1996, duly approved by the Land Management Services (DENR)
settlement proceedings (Sp. Proc. No. 1672). subdividing Lot 11 into sublots 11-A and 11-B, was inscribed on
February 28, 1997 two years after TCT No. T-107519 covering Lot
A thing is said to be in litigation not only if there is some contest or 11 was issued in respondents name on December 5, 1994.
litigation over it in court, but also from the moment that it becomes
subject to the judicial action of the judge. 36 A property forming part of Finally, in 1995, respondent received the amount of 2,000 to defray
the estate under judicial settlement continues to be subject of the expenses for documentation and transfer of title in complainants
litigation until the probate court issues an order declaring the estate name. In the latter instance, while it may be argued that respondent
proceedings closed and terminated. The rule is that as long as the already had the capacity to sell the subject property, the sum of all
order for the distribution of the estate has not been complied with, the the circumstances belie an honest intention on his part to convey Lot
probate proceedings cannot be deemed closed and 11-A to complainant. We note the inscription in TCT No. T-1183643 in
terminated.37 The probate court loses jurisdiction of an estate under the name of C.N. Hodges that respondent executed a Request dated
administration only after the payment of all the debts and the February 19, 1997 "for the issuance of separate titles in the name of
remaining estate delivered to the heirs entitled to receive the the registered owner."44 Soon after, TCT No. T-11646745 covering Lot
same.38 Since there is no evidence to show that Sp. Proc. No. 1672 11-A and TCT No. T-11646846 covering Lot 11-B were issued in the
in the RTC of Iloilo, Branch 27, had already been closed and name of respondent on February 28, 1997 only eight months after
terminated at the time of the execution of the Deed of Sale With he executed the Contract to Sell47 in favor of complainant on June 3,
Mortgage dated November 21, 1994, Lot 11 is still deemed to be "in 1996.
litigation" subject to the operation of Article 1491 (5) of the Civil
Code. Respondents bare denials were correctly disregarded by the Court
Administrator in the light of his own admission that he indeed asked
This notwithstanding, we hold that the sale of Lot 11 in favor of money from both complainant and Saplagio. The evidence on record
respondent did not violate the rule on disqualification to purchase clearly established that by misrepresenting himself as the estates
property because Sp. Proc. No. 1672 was then pending before representative and as a court officer having the power to protect
another court (RTC) and not MTCC where he was Clerk of Court. complainants family from eviction, respondent was able to collect
sums totaling 20,000 from complainants family. Even after the
latter realized they were duped since respondent was already the THELMA M. ARANAS, Petitioner,
owner of Lot 11, they still offered to buy the property from him. vs. TERESITA V. MERCADO, FELIMON V. MERCADO,
Respondent, however, changed his mind and no longer wanted to CARMENCITA M. SUTHERLAND, RICHARD V. MERCADO, MA.
sell the property after nothing happened to the loan applications of TERESITA M. ANDERSON, and FRANKLIN L.
complainant and Saplagio. This subsequent unilateral cancellation by MERCADO, Respondents.
respondent of the contract to sell with complainant may have been
an afterthought, and plainly unjustified, based merely on his own The probate court is authorized to determine the issue of ownership
assumption that complainant could not make full payment. But it did of properties for purposes of their inclusion or exclusion from the
not negate the deception and fraudulent acts perpetrated against inventory to be submitted by the administrator, but its determination
complainants family who were forced into submission by the shall only be provisional unless the interested parties are all heirs of
constant threat of eviction. Such acts constitute grave misconduct for
the decedent, or the question is one of collation or advancement, or
which respondent should be held answerable. the parties consent to the assumption of jurisdiction by the probate
court and the rights of third parties are not impaired. Its jurisdiction
In Re: Complaint Filed by Paz De Vera Lazaro Against Edna extends to matters incidental or collateral to the settlement and
Magallanes, Court Stenographer III, RTC Br. 28 and Bonifacio G. distribution of the estate, such as the determination of the status of
Magallanes, Process Server, RTC Br. 30, Bayombong, Nueva each heir and whether property included in the inventory is the
Vizcaya,48 the Court stressed that to preserve decency within the conjugal or exclusive property of the deceased spouse.
judiciary, court personnel must comply with just contractual
obligations, act fairly and adhere to high ethical standards. In that Antecedents
case, we said that court employees are expected to be paragons of
uprightness, fairness and honesty not only in their official conduct but
also in their personal dealings, including business and commercial Emigdio S. Mercado (Emigdio) died intestate on January 12, 1991,
transactions to avoid becoming the courts albatross of infamy. 49 survived by his second wife, Teresita V. Mercado (Teresita), and
their five children, namely: Allan V. Mercado, Felimon V. Mercado,
Carmencita M. Sutherland, Richard V. Mercado, and Maria Teresita
More importantly, Section 4(c) of Republic Act No. 6713 50 or the M. Anderson; and his two children by his first marriage, namely:
Code of Conduct and Ethical Standards for Public Officials and respondent Franklin L. Mercado and petitioner Thelma M. Aranas
Employees mandates that public officials and employees shall (Thelma).
remain true to the people at all times. They must act with justness
and sincerity and shall not discriminate against anyone, especially
the poor and the underprivileged.1wphi1 They shall at all times Emigdio inherited and acquired real properties during his lifetime. He
respect the rights of others, and shall refrain from doing acts contrary owned corporate shares in Mervir Realty Corporation (Mervir Realty)
to law, good morals, good customs, public policy, public order, public and Cebu Emerson Transportation Corporation (Cebu Emerson). He
safety and public interest. assigned his real properties in exchange for corporate stocks of
Mervir Realty, and sold his real property in Badian, Cebu (Lot 3353
covered by Transfer Certificate of Title No. 3252) to Mervir Realty.
Under Section 52,51 Rule IV of the Uniform Rules on Administrative
Cases in the Civil Service, dishonesty and grave misconduct are
classified as grave offenses with the corresponding penalty of On June 3, 1991, Thelma filed in the Regional Trial Court (RTC) in
dismissal for the first offense. Section 58(a) states that the penalty of Cebu City a petition for the appointment of Teresita as the
dismissal shall carry with it the cancellation of eligibility, forfeiture of administrator of Emigdios estate (Special Proceedings No. 3094-
retirement benefits, and the perpetual disqualification for CEB).1 The RTC granted the petition considering that there was no
reemployment in the government service. opposition. The letters of administration in favor of Teresita were
issued on September 7, 1992.
Section 53 further provides that mitigating circumstances attendant to
the commission of the offense should be considered in the As the administrator, Teresita submitted an inventory of the estate of
determination of the penalty to be imposed on the erring government Emigdio on December 14, 1992 for the consideration and approval
employee. However, no such mitigating circumstance had been by the RTC. She indicated in the inventory that at the time of his
shown. On the contrary, respondent had been previously held death, Emigdio had "left no real properties but only personal
administratively liable for irregularities in the performance of his properties" worth 6,675,435.25 in all, consisting of cash of
duties as Clerk of Court. In A.M. No. P-01-1484,52 this Court imposed 32,141.20; furniture and fixtures worth 20,000.00; pieces of
on respondent a fine of 5,000 for acting imprudently in notarizing jewelry valued at 15,000.00; 44,806 shares of stock of Mervir
documents and administering oath on matters alien to his official Realty worth 6,585,585.80; and 30 shares of stock of Cebu
duties. And in A.M. Nos. P-08-2567 (formerly OCA IPI No. 99-670-P) Emerson worth 22,708.25.2
and P-08-2568 (formerly OCA IPI No. 99-753-P),53 respondent was
found liable for simple misconduct and ordered to pay a fine Claiming that Emigdio had owned other properties that were
equivalent to his three (3) months salary to be deducted from his excluded from the inventory, Thelma moved that the RTC direct
retirement benefits. Teresita to amend the inventory, and to be examined regarding it.
The RTC granted Thelmas motion through the order of January 8,
Since respondent had compulsorily retired from service on 1993.
September 10, 2007, for this additional administrative case he should
be fined in an amount equivalent to his salary for six months which On January 21, 1993, Teresita filed a compliance with the order of
shall likewise be deducted from his retirement benefits. January 8, 1993,3 supporting her inventory with copies of three
certificates of stocks covering the 44,806 Mervir Realty shares of
WHEREFORE, the Court finds respondent Nicolasito S. Solas, stock;4 the deed of assignment executed by Emigdio on January 10,
retired Clerk of Court IV, Municipal Trial Court in Cities, Iloilo City, 1991 involving real properties with the market value of 4,440,651.10
LIABLE FOR GRAVE MISCONDUCT AND DISHONESTY. in exchange for 44,407 Mervir Realty shares of stock with total par
Respondent is FINED in an amount equivalent to his salary for six (6) value of 4,440,700.00;5 and the certificate of stock issued on
months to be deducted from his retirement benefits. SO ORDERED. January 30, 1979 for 300 shares of stock of Cebu Emerson worth
G.R. No. 156407 January 15, 2014
On January 26, 1993, Thelma again moved to require Teresita to be
examined under oath on the inventory, and that she (Thelma) be
allowed 30 days within which to file a formal opposition to or
comment on the inventory and the supporting documents Teresita THE HONORABLE RESPONDENT JUDGE HAS COMMITTED
On February 4, 1993, the RTC issued an order expressing the need PROPERTIES WHICH ARE IN THE POSSESSION OF AND
for the parties to present evidence and for Teresita to be examined to ALREADY REGISTERED IN THE NAME (OF) PRIVATE
enable the court to resolve the motion for approval of the inventory. 7 CORPORATION (MERVIR REALTY CORPORATION) BE
On April 19, 1993, Thelma opposed the approval of the inventory, III
and asked leave of court to examine Teresita on the inventory. THE HONORABLE RESPONDENT JUDGE HAS COMMITTED
With the parties agreeing to submit themselves to the jurisdiction of EXCESS OF JURISDICTION IN HOLDING THAT PETITIONERS
the court on the issue of what properties should be included in or ARE NOW ESTOPPED FROM QUESTIONING ITS JURISDICTION
excluded from the inventory, the RTC set dates for the hearing on IN PASSING UPON THE ISSUE OF WHAT PROPERTIES SHOULD
Ruling of the RTC
On May 15, 2002, the CA partly granted the petition for certiorari,
disposing as follows:13
After a series of hearings that ran for almost eight years, the RTC
issued on March 14, 2001 an order finding and holding that the
inventory submitted by Teresita had excluded properties that should WHEREFORE, FOREGOING PREMISES CONSIDERED, this
be included, and accordingly ruled: petition is GRANTED partially. The assailed Orders dated March 14,
2001 and May 18, 2001 are hereby reversed and set aside insofar as
the inclusion of parcels of land known as Lot No. 3353 located at
WHEREFORE, in view of all the foregoing premises and Badian, Cebu with an area of 53,301 square meters subject matter of
considerations, the Court hereby denies the administratrixs motion the Deed of Absolute Sale dated November 9, 1989 and the various
for approval of inventory. The Court hereby orders the said parcels of land subject matter of the Deeds of Assignment dated
administratrix to re-do the inventory of properties which are supposed February 17, 1989 and January 10, 1991 in the revised inventory to
to constitute as the estate of the late Emigdio S. Mercado by be submitted by the administratrix is concerned and affirmed in all
including therein the properties mentioned in the last five immediately other respects. SO ORDERED.
preceding paragraphs hereof and then submit the revised inventory
within sixty (60) days from notice of this order.
The CA opined that Teresita, et al. had properly filed the petition for
certiorari because the order of the RTC directing a new inventory of
The Court also directs the said administratrix to render an account of properties was interlocutory; that pursuant to Article 1477 of the Civil
her administration of the estate of the late Emigdio S. Mercado which Code, to the effect that the ownership of the thing sold "shall be
had come to her possession. She must render such accounting transferred to the vendee" upon its "actual and constructive delivery,"
within sixty (60) days from notice hereof. SO ORDERED. 9 and to Article 1498 of the Civil Code, to the effect that the sale made
through a public instrument was equivalent to the delivery of the
On March 29, 2001, Teresita, joined by other heirs of Emigdio, timely object of the sale, the sale by Emigdio and Teresita had transferred
sought the reconsideration of the order of March 14, 2001 on the the ownership of Lot No. 3353 to Mervir Realty because the deed of
ground that one of the real properties affected, Lot No. 3353 located absolute sale executed on November 9, 1989 had been notarized;
in Badian, Cebu, had already been sold to Mervir Realty, and that the that Emigdio had thereby ceased to have any more interest in Lot
parcels of land covered by the deed of assignment had already come 3353; that Emigdio had assigned the parcels of land to Mervir Realty
into the possession of and registered in the name of Mervir as early as February 17, 1989 "for the purpose of saving, as in
Realty.10 Thelma opposed the motion. avoiding taxes with the difference that in the Deed of Assignment
dated January 10, 1991, additional seven (7) parcels of land were
included"; that as to the January 10, 1991 deed of assignment,
On May 18, 2001, the RTC denied the motion for Mervir Realty had been "even at the losing end considering that such
reconsideration,11 stating that there was no cogent reason for the parcels of land, subject matter(s) of the Deed of Assignment dated
reconsideration, and that the movants agreement as heirs to submit February 12, 1989, were again given monetary consideration through
to the RTC the issue of what properties should be included or shares of stock"; that even if the assignment had been based on the
excluded from the inventory already estopped them from questioning deed of assignment dated January 10, 1991, the parcels of land
its jurisdiction to pass upon the issue. could not be included in the inventory "considering that there is
nothing wrong or objectionable about the estate planning scheme";
Decision of the CA that the RTC, as an intestate court, also had no power to take
cognizance of and determine the issue of title to property registered
in the name of third persons or corporation; that a property covered
Alleging that the RTC thereby acted with grave abuse of discretion in
by the Torrens system should be afforded the presumptive
refusing to approve the inventory, and in ordering her as
conclusiveness of title; that the RTC, by disregarding the
administrator to include real properties that had been transferred to
presumption, had transgressed the clear provisions of law and
Mervir Realty, Teresita, joined by her four children and her stepson
infringed settled jurisprudence on the matter; and that the RTC also
Franklin, assailed the adverse orders of the RTC promulgated on
gravely abused its discretion in holding that Teresita, et al. were
March 14, 2001 and May 18, 2001 by petition for certiorari, stating:
estopped from questioning its jurisdiction because of their agreement
to submit to the RTC the issue of which properties should be
included in the inventory.
MERCADO DURING HIS LIFETIME TO A PRIVATE In the instant case, public respondent court erred when it ruled that
CORPORATION (MERVIR REALTY CORPORATION) BE petitioners are estopped from questioning its jurisdiction considering
INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE that they have already agreed to submit themselves to its jurisdiction
EMIGDIO S. MERCADO. of determining what properties are to be included in or excluded from
the inventory to be submitted by the administratrix, because actually, order, and should not be the subject of an appeal. The reason for
a reading of petitioners Motion for Reconsideration dated March 26, disallowing an appeal from an interlocutory order is to avoid
2001 filed before public respondent court clearly shows that multiplicity of appeals in a single action, which necessarily suspends
petitioners are not questioning its jurisdiction but the manner in which the hearing and decision on the merits of the action during the
it was exercised for which they are not estopped, since that is their pendency of the appeals. Permitting multiple appeals will necessarily
right, considering that there is grave abuse of discretion amounting to delay the trial on the merits of the case for a considerable length of
lack or in excess of limited jurisdiction when it issued the assailed time, and will compel the adverse party to incur unnecessary
Order dated March 14, 2001 denying the administratrixs motion for expenses, for one of the parties may interpose as many appeals as
approval of the inventory of properties which were already titled and there are incidental questions raised by him and as there are
in possession of a third person that is, Mervir Realty Corporation, a interlocutory orders rendered or issued by the lower court. An
private corporation, which under the law possessed a personality interlocutory order may be the subject of an appeal, but only after a
distinct and separate from its stockholders, and in the absence of any judgment has been rendered, with the ground for appealing the order
cogency to shred the veil of corporate fiction, the presumption of being included in the appeal of the judgment itself.
conclusiveness of said titles in favor of Mervir Realty Corporation
should stand undisturbed. The remedy against an interlocutory order not subject of an appeal is
an appropriate special civil action under Rule 65, provided that the
Besides, public respondent court acting as a probate court had no interlocutory order is rendered without or in excess of jurisdiction or
authority to determine the applicability of the doctrine of piercing the with grave abuse of discretion. Then is certiorari under Rule 65
veil of corporate fiction and even if public respondent court was not allowed to be resorted to.
merely acting in a limited capacity as a probate court, private
respondent nonetheless failed to adjudge competent evidence that The assailed order of March 14, 2001 denying Teresitas motion for
would have justified the court to impale the veil of corporate fiction the approval of the inventory and the order dated May 18, 2001
because to disregard the separate jurisdictional personality of a denying her motion for reconsideration were interlocutory. This is
corporation, the wrongdoing must be clearly and convincingly because the inclusion of the properties in the inventory was not yet a
established since it cannot be presumed.14 final determination of their ownership. Hence, the approval of the
inventory and the concomitant determination of the ownership as
On November 15, 2002, the CA denied the motion for basis for inclusion or exclusion from the inventory were provisional
reconsideration of Teresita, et al.15 and subject to revision at anytime during the course of the
administration proceedings.
In Valero Vda. De Rodriguez v. Court of Appeals, 17 the Court, in
Did the CA properly determine that the RTC committed grave abuse affirming the decision of the CA to the effect that the order of the
of discretion amounting to lack or excess of jurisdiction in directing intestate court excluding certain real properties from the inventory
was interlocutory and could be changed or modified at anytime
the inclusion of certain properties in the inventory notwithstanding
that such properties had been either transferred by sale or during the course of the administration proceedings, held that the
order of exclusion was not a final but an interlocutory order "in the
exchanged for corporate shares in Mervir Realty by the decedent
during his lifetime? sense that it did not settle once and for all the title to the San Lorenzo
Village lots." The Court observed there that:

Ruling of the Court

The prevailing rule is that for the purpose of determining whether a
The appeal is meritorious.
I certain property should or should not be included in the inventory, the
probate court may pass upon the title thereto but such determination
Was certiorari the proper recourse
to assail the questioned orders of the RTC? is not conclusive and is subject to the final decision in a separate
action regarding ownership which may be instituted by the parties (3
Morans Comments on the Rules of Court, 1970 Edition, pages 448-9
The first issue to be resolved is procedural. Thelma contends that the and 473; Lachenal vs. Salas, L-42257, June 14, 1976, 71 SCRA 262,
resort to the special civil action for certiorari to assail the orders of 266).18 (Bold emphasis supplied)
the RTC by Teresita and her co-respondents was not proper.
To the same effect was De Leon v. Court of Appeals, 19 where the
Thelmas contention cannot be sustained. Court declared that a "probate court, whether in a testate or intestate
proceeding, can only pass upon questions of title provisionally," and
The propriety of the special civil action for certiorari as a remedy reminded, citing Jimenez v. Court of Appeals, that the "patent reason
depended on whether the assailed orders of the RTC were final or is the probate courts limited jurisdiction and the principle that
interlocutory in nature. In Pahila-Garrido v. Tortogo,16 the Court questions of title or ownership, which result in inclusion or exclusion
distinguished between final and interlocutory orders as follows: from the inventory of the property, can only be settled in a separate
action." Indeed, in the cited case of Jimenez v. Court of
Appeals,20 the Court pointed out:
The distinction between a final order and an interlocutory order is
well known. The first disposes of the subject matter in its entirety or
terminates a particular proceeding or action, leaving nothing more to All that the said court could do as regards the said properties is
be done except to enforce by execution what the court has determine whether they should or should not be included in the
determined, but the latter does not completely dispose of the case inventory or list of properties to be administered by the administrator.
but leaves something else to be decided upon. An interlocutory order If there is a dispute as to the ownership, then the opposing parties
deals with preliminary matters and the trial on the merits is yet to be and the administrator have to resort to an ordinary action for a final
held and the judgment rendered. The test to ascertain whether or not determination of the conflicting claims of title because the probate
an order or a judgment is interlocutory or final is: does the order or court cannot do so. (Bold emphasis supplied)
judgment leave something to be done in the trial court with respect to
the merits of the case? If it does, the order or judgment is On the other hand, an appeal would not be the correct recourse for
interlocutory; otherwise, it is final. Teresita, et al. to take against the assailed orders. The final judgment
rule embodied in the first paragraph of Section 1, Rule 41, Rules of
The order dated November 12, 2002, which granted the application Court,21 which also governs appeals in special proceedings,
for the writ of preliminary injunction, was an interlocutory, not a final, stipulates that only the judgments, final orders (and resolutions) of a
court of law "that completely disposes of the case, or of a particular Section 1. Inventory and appraisal to be returned within three
matter therein when declared by these Rules to be appealable" may months. Within three (3) months after his appointment every
be the subject of an appeal in due course. The same rule states that executor or administrator shall return to the court a true inventory and
an interlocutory order or resolution (interlocutory because it deals appraisal of all the real and personal estate of the deceased which
with preliminary matters, or that the trial on the merits is yet to be has come into his possession or knowledge. In the appraisement of
held and the judgment rendered) is expressly made non-appealable. such estate, the court may order one or more of the inheritance tax
appraisers to give his or their assistance.
Multiple appeals are permitted in special proceedings as a practical
recognition of the possibility that material issues may be finally The usage of the word all in Section 1, supra, demands the inclusion
determined at various stages of the special proceedings. Section 1, of all the real and personal properties of the decedent in the
Rule 109 of the Rules of Court enumerates the specific instances in inventory.22 However, the word all is qualified by the phrase which
which multiple appeals may be resorted to in special proceedings, has come into his possession or knowledge, which signifies that the
viz: properties must be known to the administrator to belong to the
decedent or are in her possession as the administrator. Section 1
allows no exception, for the phrase true inventory implies that no
Section 1. Orders or judgments from which appeals may be taken. -
An interested person may appeal in special proceedings from an properties appearing to belong to the decedent can be excluded from
the inventory, regardless of their being in the possession of another
order or judgment rendered by a Court of First Instance or a Juvenile
and Domestic Relations Court, where such order or judgment: person or entity.
(a) Allows or disallows a will;
(b) Determines who are the lawful heirs of a deceased The objective of the Rules of Court in requiring the inventory and
person, or the distributive share of the estate to which such appraisal of the estate of the decedent is "to aid the court in revising
person is entitled; the accounts and determining the liabilities of the executor or the
(c) Allows or disallows, in whole or in part, any claim administrator, and in making a final and equitable distribution
against the estate of a deceased person, or any claim (partition) of the estate and otherwise to facilitate the administration
presented on behalf of the estate in offset to a claim against of the estate."23Hence, the RTC that presides over the administration
it; of an estate is vested with wide discretion on the question of what
(d) Settles the account of an executor, administrator, properties should be included in the inventory. According to Peralta
trustee or guardian; v. Peralta,24 the CA cannot impose its judgment in order to supplant
(e) Constitutes, in proceedings relating to the settlement of that of the RTC on the issue of which properties are to be included or
the estate of a deceased person, or the administration of a excluded from the inventory in the absence of "positive abuse of
trustee or guardian, a final determination in the lower court discretion," for in the administration of the estates of deceased
of the rights of the party appealing, except that no appeal persons, "the judges enjoy ample discretionary powers and the
shall be allowed from the appointment of a special appellate courts should not interfere with or attempt to replace the
administrator; and action taken by them, unless it be shown that there has been a
(f) Is the final order or judgment rendered in the case, and positive abuse of discretion."25 As long as the RTC commits no
affects the substantial rights of the person appealing, patently grave abuse of discretion, its orders must be respected as
unless it be an order granting or denying a motion for a new part of the regular performance of its judicial duty.
trial or for reconsideration.
There is no dispute that the jurisdiction of the trial court as an
Clearly, the assailed orders of the RTC, being interlocutory, did not intestate court is special and limited. The trial court cannot adjudicate
come under any of the instances in which multiple appeals are title to properties claimed to be a part of the estate but are claimed to
permitted. belong to third parties by title adverse to that of the decedent and the
estate, not by virtue of any right of inheritance from the decedent. All
II that the trial court can do regarding said properties is to determine
whether or not they should be included in the inventory of properties
Did the RTC commit grave abuse of discretion
in directing the inclusion of the properties to be administered by the administrator. Such determination is
provisional and may be still revised. As the Court said in Agtarap v.
in the estate of the decedent?

In its assailed decision, the CA concluded that the RTC committed

grave abuse of discretion for including properties in the inventory The general rule is that the jurisdiction of the trial court, either as a
probate court or an intestate court, relates only to matters having to
notwithstanding their having been transferred to Mervir Realty by
Emigdio during his lifetime, and for disregarding the registration of do with the probate of the will and/or settlement of the estate of
the properties in the name of Mervir Realty, a third party, by applying deceased persons, but does not extend to the determination of
the doctrine of piercing the veil of corporate fiction. questions of ownership that arise during the proceedings. The patent
rationale for this rule is that such court merely exercises special and
limited jurisdiction. As held in several cases, a probate court or one in
Was the CA correct in its conclusion? charge of estate proceedings, whether testate or intestate, cannot
adjudicate or determine title to properties claimed to be a part of the
The answer is in the negative. It is unavoidable to find that the CA, in estate and which are claimed to belong to outside parties, not by
reaching its conclusion, ignored the law and the facts that had fully virtue of any right of inheritance from the deceased but by title
warranted the assailed orders of the RTC. adverse to that of the deceased and his estate. All that the said court
could do as regards said properties is to determine whether or not
they should be included in the inventory of properties to be
Under Section 6(a), Rule 78 of the Rules of Court, the letters of administered by the administrator. If there is no dispute, there poses
administration may be granted at the discretion of the court to the no problem, but if there is, then the parties, the administrator, and the
surviving spouse, who is competent and willing to serve when the opposing parties have to resort to an ordinary action before a court
person dies intestate. Upon issuing the letters of administration to the exercising general jurisdiction for a final determination of the
surviving spouse, the RTC becomes duty-bound to direct the conflicting claims of title.
preparation and submission of the inventory of the properties of the
estate, and the surviving spouse, as the administrator, has the duty
and responsibility to submit the inventory within three months from However, this general rule is subject to exceptions as justified by
the issuance of letters of administration pursuant to Rule 83 of the expediency and convenience.
Rules of Court, viz:
First, the probate court may provisionally pass upon in an intestate or death of all property to the extent of any interest therein of which the
a testate proceeding the question of inclusion in, or exclusion from, decedent has at any time made a transfer in contemplation of death.
the inventory of a piece of property without prejudice to final So, the inventory to be approved in this case should still include the
determination of ownership in a separate action. Second, if the said properties of Emigdio Mercado which were transferred by him in
interested parties are all heirs to the estate, or the question is one of contemplation of death. Besides, the said properties actually
collation or advancement, or the parties consent to the assumption of appeared to be still registered in the name of Emigdio S. Mercado at
jurisdiction by the probate court and the rights of third parties are not least ten (10) months after his death, as shown by the certification
impaired, then the probate court is competent to resolve issues on issued by the Cebu City Assessors Office on October 31, 1991
ownership. Verily, its jurisdiction extends to matters incidental or (Exhibit O).28
collateral to the settlement and distribution of the estate, such as the
determination of the status of each heir and whether the property in
Thereby, the RTC strictly followed the directives of the Rules of Court
the inventory is conjugal or exclusive property of the deceased and the jurisprudence relevant to the procedure for preparing the
spouse.27 (Italics in the original; bold emphasis supplied)
inventory by the administrator. The aforequoted explanations
indicated that the directive to include the properties in question in the
It is clear to us that the RTC took pains to explain the factual bases inventory rested on good and valid reasons, and thus was far from
for its directive for the inclusion of the properties in question in its whimsical, or arbitrary, or capricious.
assailed order of March 14, 2001, viz:
Firstly, the shares in the properties inherited by Emigdio from
In the first place, the administratrix of the estate admitted that Severina Mercado should be included in the inventory because
Emigdio Mercado was one of the heirs of Severina Mercado who, Teresita, et al. did not dispute the fact about the shares being
upon her death, left several properties as listed in the inventory of inherited by Emigdio.
properties submitted in Court in Special Proceedings No. 306-R
which are supposed to be divided among her heirs. The Secondly, with Emigdio and Teresita having been married prior to the
administratrix admitted, while being examined in Court by the effectivity of the Family Code in August 3, 1988, their property regime
counsel for the petitioner, that she did not include in the inventory was the conjugal partnership of gains. 29 For purposes of the
submitted by her in this case the shares of Emigdio Mercado in the settlement of Emigdios estate, it was unavoidable for Teresita to
said estate of Severina Mercado. Certainly, said properties include his shares in the conjugal partnership of gains. The party
constituting Emigdio Mercados share in the estate of Severina asserting that specific property acquired during that property regime
Mercado should be included in the inventory of properties required to did not pertain to the conjugal partnership of gains carried the burden
be submitted to the Court in this particular case.
of proof, and that party must prove the exclusive ownership by one of
them by clear, categorical, and convincing evidence. 30 In the
In the second place, the administratrix of the estate of Emigdio absence of or pending the presentation of such proof, the conjugal
Mercado also admitted in Court that she did not include in the partnership of Emigdio and Teresita must be provisionally liquidated
inventory shares of stock of Mervir Realty Corporation which are in to establish who the real owners of the affected properties
her name and which were paid by her from money derived from the were,31 and which of the properties should form part of the estate of
taxicab business which she and her husband had since 1955 as a Emigdio. The portions that pertained to the estate of Emigdio must
conjugal undertaking. As these shares of stock partake of being be included in the inventory.
conjugal in character, one-half thereof or of the value thereof should
be included in the inventory of the estate of her husband. Moreover, although the title over Lot 3353 was already registered in
the name of Mervir Realty, the RTC made findings that put that title in
In the third place, the administratrix of the estate of Emigdio Mercado dispute. Civil Case No. CEB-12692, a dispute that had involved the
admitted, too, in Court that she had a bank account in her name at ownership of Lot 3353, was resolved in favor of the estate of
Union Bank which she opened when her husband was still alive. Emigdio, and
Again, the money in said bank account partakes of being conjugal in
character, and so, one-half thereof should be included in the Transfer Certificate of Title No. 3252 covering Lot 3353 was still in
inventory of the properties constituting as estate of her husband. Emigdios name.1wphi1 Indeed, the RTC noted in the order of
March 14, 2001, or ten years after his death, that Lot 3353 had
In the fourth place, it has been established during the hearing in this remained registered in the name of Emigdio.
case that Lot No. 3353 of Pls-657-D located in Badian, Cebu
containing an area of 53,301 square meters as described in and Interestingly, Mervir Realty did not intervene at all in Civil Case No.
covered by Transfer Certificate of Title No. 3252 of the Registry of CEB-12692. Such lack of interest in Civil Case No. CEB-12692 was
Deeds for the Province of Cebu is still registered in the name of susceptible of various interpretations, including one to the effect that
Emigdio S. Mercado until now. When it was the subject of Civil Case
the heirs of Emigdio could have already threshed out their
No. CEB-12690 which was decided on October 19, 1995, it was the differences with the assistance of the trial court. This interpretation
estate of the late Emigdio Mercado which claimed to be the owner
was probable considering that Mervir Realty, whose business was
thereof. Mervir Realty Corporation never intervened in the said case managed by respondent Richard, was headed by Teresita herself as
in order to be the owner thereof. This fact was admitted by Richard its President. In other words, Mervir Realty appeared to be a family
Mercado himself when he testified in Court. x x x So the said corporation.
property located in Badian, Cebu should be included in the inventory
in this case.
Also, the fact that the deed of absolute sale executed by Emigdio in
favor of Mervir Realty was a notarized instrument did not sufficiently
Fifthly and lastly, it appears that the assignment of several parcels of justify the exclusion from the inventory of the properties involved. A
land by the late Emigdio S. Mercado to Mervir Realty Corporation on notarized deed of sale only enjoyed the presumption of regularity in
January 10, 1991 by virtue of the Deed of Assignment signed by him favor of its execution, but its notarization did not per se guarantee the
on the said day (Exhibit N for the petitioner and Exhibit 5 for the legal efficacy of the transaction under the deed, and what the
administratrix) was a transfer in contemplation of death. It was made contents purported to be. The presumption of regularity could be
two days before he died on January 12, 1991. A transfer made in rebutted by clear and convincing evidence to the contrary. 32 As the
contemplation of death is one prompted by the thought that the
Court has observed in Suntay v. Court of Appeals: 33
transferor has not long to live and made in place of a testamentary
disposition (1959 Prentice Hall, p. 3909). Section 78 of the National
Internal Revenue Code of 1977 provides that the gross estate of the x x x. Though the notarization of the deed of sale in question vests in
decedent shall be determined by including the value at the time of his its favor the presumption of regularity, it is not the intention nor the
function of the notary public to validate and make binding an authority and discretion of the RTC as an intestate court. In making
instrument never, in the first place, intended to have any binding its determination, the RTC acted with circumspection, and proceeded
legal effect upon the parties thereto. The intention of the parties still under the guiding policy that it was best to include all properties in
and always is the primary consideration in determining the true the possession of the administrator or were known to the
nature of a contract. (Bold emphasis supplied) administrator to belong to Emigdio rather than to exclude properties
that could turn out in the end to be actually part of the estate. As long
It should likewise be pointed out that the exchange of shares of stock as the RTC commits no patent grave abuse of discretion, its orders
of Mervir Realty with the real properties owned by Emigdio would still must be respected as part of the regular performance of its judicial
have to be inquired into. That Emigdio executed the deed of duty. Grave abuse of discretion means either that the judicial or
assignment two days prior to his death was a circumstance that quasi-judicial power was exercised in an arbitrary or despotic manner
by reason of passion or personal hostility, or that the respondent
should put any interested party on his guard regarding the exchange,
considering that there was a finding about Emigdio having been sick judge, tribunal or board evaded a positive duty, or virtually refused to
perform the duty enjoined or to act in contemplation of law, such as
of cancer of the pancreas at the time.34 In this regard, whether the
CA correctly characterized the exchange as a form of an estate when such judge, tribunal or board exercising judicial or quasi-judicial
planning scheme remained to be validated by the facts to be powers acted in a capricious or whimsical manner as to be
established in court. equivalent to lack of jurisdiction.39

The fact that the properties were already covered by Torrens titles in In light of the foregoing, the CA's conclusion of grave abuse of
the name of Mervir Realty could not be a valid basis for immediately discretion on the part of the RTC was unwarranted and erroneous.
excluding them from the inventory in view of the circumstances
admittedly surrounding the execution of the deed of assignment. This WHEREFORE, the Court GRANTS the petition for review on
is because: certiorari; REVERSES and SETS ASIDE the decision promulgated
on May 15, 2002; REINSTATES the orders issued on March 14,
The Torrens system is not a mode of acquiring titles to lands; it is 2001 and May 18, 2001 by the Regional Trial Court in Cebu;
merely a system of registration of titles to lands.1wphi1However, DIRECTS the Regional Trial Court in Cebu to proceed with dispatch
justice and equity demand that the titleholder should not be made to in Special Proceedings No. 3094-CEB entitled Intestate Estate of the
bear the unfavorable effect of the mistake or negligence of the late Emigdio Mercado, Thelma Aranas, petitioner, and to resolve the
States agents, in the absence of proof of his complicity in a fraud or case; and ORDERS the respondents to pay the costs of suit. SO
of manifest damage to third persons. The real purpose of the Torrens ORDERED.
system is to quiet title to land and put a stop forever to any question
as to the legality of the title, except claims that were noted in the G.R. No. 187524 August 5, 2015
certificate at the time of registration or that may arise subsequent
thereto. Otherwise, the integrity of the Torrens system shall forever SPOUSES MARIA BUTIONG and VILLAFRlA, DR. RUEL B.
be sullied by the ineptitude and inefficiency of land registration
officials, who are ordinarily presumed to have regularly performed Petitioners,
their duties.35
ALARAS, Respondents.
Assuming that only seven titled lots were the subject of the deed of
assignment of January 10, 1991, such lots should still be included in Before the Court is a petition for review on certiorari under Rule 45 of
the inventory to enable the parties, by themselves, and with the
the Rules of Court seeking to reverse and set aside the
assistance of the RTC itself, to test and resolve the issue on the Decision 1 and Resolution, 2 dated March 13, 2009 and April 23,
validity of the assignment. The limited jurisdiction of the RTC as an
2009, respectively, of the Court Appeals (CA) in CA-G.R. SP No.
intestate court might have constricted the determination of the rights 107347, Which affirmed the Judgment 3 dated October 1, 2001 of the
to the properties arising from that deed,36 but it does not prevent the Regional Trial Court (RTC) of Nasugbu, Batangas, Branch 14, in Civil
RTC as intestate court from ordering the inclusion in the inventory of Case No. 217.
the properties subject of that deed. This is because the RTC as
intestate court, albeit vested only with special and limited jurisdiction,
was still "deemed to have all the necessary powers to exercise such The antecedent facts are as follows:
jurisdiction to make it effective."37
On November 16, 1989, Pedro L. Rifioza died intestate, leaving
Lastly, the inventory of the estate of Emigdio must be prepared and several heirs, including his_ children with his first wife, respondents
submitted for the important purpose of resolving the difficult issues of Ma. Gracia R. Plazo and Ma. Fe Alaras, as well as several properties
collation and advancement to the heirs. Article 1061 of the Civil Code including a resort covered by Transfer Certificates of Title (TCT) No.
required every compulsory heir and the surviving spouse, herein 51354 and No. 51355, each with an area of 351 square meters, and
Teresita herself, to "bring into the mass of the estate any property or a family home, the land on which it stands is covered by TCT Nos.
right which he (or she) may have received from the decedent, during 40807 and 40808, both located in Nasugbu, Batangas. 4
the lifetime of the latter, by way of donation, or any other gratuitous
title, in order that it may be computed in the determination of the In their Amended Complaint for Judicial Partition with Annulment of
legitime of each heir, and in the account of the partition." Section 2, Title and Recovery of Possession 5 dated September 15, 1993,
Rule 90 of the Rules of Court also provided that any advancement by respondents alleged that sometime in March 1991, they discovered
the decedent on the legitime of an heir "may be heard and that their co-heirs, Pedros second wife, Benita"Tenorio and other
determined by the court having jurisdiction of the estate proceedings, children, had sold the subject properties to petitioners, spouses
and the final order of the court thereon shall be binding on the person Francisco Villafria and Maria Butiong, who are now deceased and
raising the questions and on the heir." Rule 90 thereby expanded the substituted by their son, Dr. Ruel B. Villafria, without their knowledge
special and limited jurisdiction of the RTC as an intestate court about and consent. When confronted about the sale, Benita acknowledged
the matters relating to the inventory of the estate of the decedent by the same, showing respondents a document she believed evidenced
authorizing it to direct the inclusion of properties donated or receipt of her share in the sale, which, however, did not refer to any
bestowed by gratuitous title to any compulsory heir by the sort of sale but to a previous loan obtoiined by Pedro and Benita from
decedent.38 a bank. 6 The document actually evidenced receipt from Banco
Silangan of the amount of 87, 352.62 releasing her and her late
The determination of which properties should be excluded from or husbands indebtedness therefrom. 7 Upon inquiry, the Register of
included in the inventory of estate properties was well within the Deeds of Nasugbu informed respondents that he has no record of
any transaction involving the subject properties, giving them certified 6. Declaring the plaintiffs and the defendants-heirs in the Amended
true copies of the titles to the same. When respondents went to the Complaint to be the legitimate heirs of decedent Pedro L. Rifioza,
subject properties, they discovered that 4 out of the 8 cottages in the each in the capacity and degree established, as well as their direct
resort had been demolished. They were not, however, able to enter successors-in interest, and ordering the defendant Registrar of
as the premises were padlocked. Deeds to issue the co1Tesponding titles in their names in the
proportion established by law, pro in division, in TCT Nos. 40807,
Subsequently, respondents learned that on July 18, 1991, a notice of 40808, 51354, 51355 and 40353 (after restoration) within ten (10)
an extra-judicial settlement of estate of their late father was published days from finality of this Decision, 4pon payment of lawful fees,
in a tabloid called Balita. Because of this, They caused the except TCT No. 40353, which shall be exempt from all expenses for
annotation of their adverse claims over the subject properties before its restoration. With no costs. SO ORDERED. 15
the Register of Deeds of Nasugbu and filed their complaint praying,
among others, for the annulment of all documents conveying the On appeal, the CA affirmed the trial courts Judgment in its
subject properties to the petitioners and certificates of title issued Decision 16 dated October 31, 2006 in the following wise:
pursuant thereto. 8
The person before whom the resort deed was acknowledged, Alfredo
In their Answer, 9 petitioners denied the allegations of the complaint de Guzman, was not commissioned as a notary public from 1989 to
on the groun_d of lack of personal knowledge and good faith in July 3, 1991, the date the certification was issued. Such being the
acquiring the subject properties. In the course of his testimony during case, the resort deed is not a public document and the presumption
trial, petitioner Francisco further contended that what they purchased of regularity accorded to public documents will not apply to the same.
was only the resort. 10 He also presented an Extra-Judicial As laid down in Tigno, et al. v. Aquino, et al.:
Settlement with Renunciation, Repudiations and Waiver of Rights
and Sale which provides, among others, that respondents' co-heirs The validity of a notarial certification necessarily derives from the
sold the family home to the spouses Rolando and Ma. Cecilia authority of the notarial officer. If the notary public docs net have the
Bondoc for Pl million as well as a Deed of Sale whereby Benita sold capacity to notarize a document, but does so anyway, then the
the resort to petitioners for 650, 000.00. 11 document should be treated as A. Unnotarized. The rule may strike
as rather harsh, and perhaps may prove to be prejudicial to parties in
On October 1, 2001, the trial court nullified the transfer of the subject good faith relying on the proferred authority of the notary public or the
Properties to petitioners and spouses Bondoc due to irregularities in person pretending to be one. Still, to admit otherwise would render
the Documents of conveyance offered by petitioners .as well as the merely officious the elaborate process devised by this Court in order
circumstances Surrounding the execution of the same. Specifically, that a lawyer may receive a notarial commission. Without such a rule,
the Extra-Judicial Settlement was notarized by a notary public that
was not duly commissioned as such on the date it was The notarization of a document by a duly appointed notary public will
executed. 12 The Deed of Sale was Undated, the date of the have the same legal effect as one accomplished by a non-lawyer
acknowledgment therein was left blank, and the Typewritten name
engaged in pretense. The notarization of a document carries
"Pedro Rifioza, Husband" on the left side of the document Was not considerable legal effect. Notarization of a private document converts
signed. 13 The trial court also observed that both documents were
such document into a public one, and renders it admissible in court
Never presented to the Office of the Register of Deeds for without further proof of its authenticity. Thus, notarization is not an
registration and That the titles to the subject properties were still in empty routine; to the contrary, it engages public interest in a
the names of Pedro and His second wife Benita. In addition, the substantial degree and the protection of that interest requires
supposed notaries and buyers of the Subject properties were not preventing those who are not qualified or authorized to act as
even presented as witnesses whom supposedly witnessed the notaries public from imposing upon the public and the courts and
signing and execution of the documents of conveyance. 14 On The administrative offices generally.
basis thereof, the triaI court ruled in favor of respondents, in its
Judgment, the pertinent portions of its fallo provide:
Parenthetically, the settlement/family home deed cannot be
considered a public document. This is because the following cast
WHEREFORE, foregoing premises considered, judgment is Hereby doubt on the document's authenticity, to wit: .
rendered as follows: 1.) The date of its execution was not indicated;
xxxx 2.) The amount of consideration was superimposed;
4. A) Declaring as a nullity the ~'Extra-Judicial Settlement with
3.) It was not presented to the Registry of Deeds of Nasugbu,
Renunciation, Repudiation and Waiver of Rights and Sale" (Ex. "l ", Batangas for annotation; and
Villafria) notarized on December 23, 1991 by Notary Public Antonio
4.) Not even the supposed notary public," Alfredo de Guzman, or the
G. Malonzo of Manila, Doc. No. 190, Page No. 20, Book No. IXII, purported buyer, the Spouses Rolando and Ma. Cecilia Bondoc,
Series of 1991. . were presented as witnesses. Concededly, the absence of
b) Declaring as a nullity the Deed of Absolute Sale (Ex. "2", notarization in the resort deed and/or the lacking details in the
Villafria), purportedly executed by Benita T. Rifioza in favor settlement/family home deed did not necessarily invalidate the
of spouses Francisco Villafria and Maria Butiong, transactions evidenced by the said documents. However, since the
purportedly notarized by one Alfredo de Guzman marked said deeds are private documents, perforce, their due execution and
Doc. No. 1136, Page No. 141, and Book. No. XXX, Series authenticity becomes subject to the requirement of proof under the
of 1991. Rules on Evidence, Section 20, Rule 132 of which provides: Sec. 20.
c) Ordering the forfeiture of any and all improvements
Proof of private document. - Before any private. Document offered as
introduced By defendants Francisco Villafria and Maria authentic is received in evidence, its due execution a"Q.d.
Butiong in the properties Covered by TCT No. 40807,
authenticity must be proved either:
40808, 51354 and 51355 of the Register of Deeds for (a). By anyone who saw the document executed or written;
Nasugbu, Batangas. . or
(b) By evidence of the genuineness of the signature or
5. Ordering defendant Francisco Villafria and all persons, whose handwriting of the maker.
Occupancy within the premises of the four- (4) parcels of land The Complaining Heirs insist that the settlement/family home and the
described in Par. 4-c above is derived from the rights and interest of resort deed are void, as their signatures thereon are forgeries as
defendant Villafria, to vacate its premises and to deliver possession opposed to the Villafrias who profess the deeds' enforceability. After
thereof, and all improvements existing thereon to plaintiffs, for and in the Complaining Heirs presented proofs in support of their claim that
behalf of the estate of decedent Pedro L. Rifioza. their signatures were forged, the burden then fell upon the Villafrias
to disprove the ~ame2 or conversely, to prove the authenticity and was issued on 31 October 2007, supra, nevertheless, to put the
due execution of the said deeds. The Villafrias failed in this regard. issues to rest,We deem it apropos to tackle the same.

As forestalled, the Villafrias did not present as witnesses (a) the The Petitioner argues that the assailed Decision and Order of the
notary public who purportedly notarized the questioned instrument, Court a quo, supra, should be annulled and set aside on the grounds
(b) the witnesses who appear [Ed] in the instruments as of extrinsic fraud and lack of jurisdiction.
eyewitnesses to the signing, or (c) an expert to prove the authenticity
and genuineness of all the signatures appearing on the said
We are not persuaded.
instruments. Verily, the rule that, proper foundation must be laid for
the admission of documentary evidence; that is, the identity and
authenticity of the document must be reasonably established as a xxxx
pre requisite to its admission, was prudently observed by the lower Section 2 of the Rules as stated above provides that the annulment
court when it refused to admit the settlement/family home and the of a judgment may "be based only on grounds of extrinsic fraud and
resort deeds as their veracity are doubtful. 17 lack of jurisdiction." In RP v. The Heirs of Sancho Magdato, the High
Tribunal stressed that: There is extrinsic fraud when "the
unsuccessful party had been prevented from exhibiting fully his
Aggrieved, petitioners, substituted by their son Ruel Villafria, filed a case, by fraud or deception practiced on him by his opponent, as by
Motion for Reconsideration dated November 24, 2006 raising the trial keeping him away from court, ... or where the defendant never had
courts lack of jurisdiction. It was alleged that when the Complaint for knowledge of the suit, being kept in ignorance by the acts of the
Judicial Partition with Annulment of Title and Recovery of Possession
plaintiff; ... "
was filed, there was yet no settlement of Pedro's estate,
determination as to the nature thereof, nor was there an identification
of the number of legitimate heirs. As such, the trial court ruled on the Otherwise put, extrinsic or collateral fraud pertains to such fraud,
settlement of the intestate estate of Pedro in its ordinary jurisdiction which prevents the aggrieved party from having a trial or presenting
when the action filed was for Judidal Partition. Considering that the his case to the court, or is used to procure the judgment without fair
instant action is really one for settlement of intestate estate, the trial submission of the controversy. This refers to acts intended to keep
court, sitting merely in its probate jurisdiction, exceeded its the unsuccessful party away from the courts as when there is a false
jurisdiction when it ruled upon the issues of forgery and ownership. promise of compromise or when one is kept in ignorance of the suit.
Thus, petitioner argued that. Said ruling is void and has no effect for The pivotal issues before us are (1) whether. There was a time
having been rendered without jurisdiction. The Motion for during the proceedings below that the Petitioners ever prevented
Reconsideration was, however, denied by the appellate court on from exhibiting fully their case, by fraud or deception, practiced on
February 26, 2007. them by Respondents, and (2) whether the Petitioners were kept
away from the court or kept in ignorance by the acts of the
On appeal, this Court denied on June 20, 2007, petitioner's Petition
for Review on Certiorari for submitting a verification of the petition, a
certificate of non-forum shopping and an affidavit of service that We find nothing of that sort. Instead, what we deduced as We
failed to comply with the 2004 Rules on Notarial Practice regarding carefully delved. Into the evidentiary facts surrounding the instant
competent evidence of affiant' s identities. 18 In its Resolution 19 dated case as well as the proceedings below as shown in the 36-page
September 26, 2007, this Court also denied petitioner's Motion for Decision of the Court a quo, is that the Petitioners were given ample
Reconsideration in the absence of any compelling reason to warrant time to rebut the allegations of the Respondents and had in fact
a modification of the previous denial. Thus, the June 20, 2007 addressed every detail of. Respondent's cause of action against
Resolution became final and executors on October 31, 2007 as them. Thus, Petitioners' allegation of the Court a quo s lack of
certified by the Entry of Judgment issued by the Court. 20 On January jurisdiction is misplaced.
16, 2008, the Court further denied petitioner' s motion for leave to
admit a second motion for reconsideration of its September 26, 2007 Our pronouncement on the matter finds support in the explicit ruling
Resolution, considering that the same is a prohibited pleading under of the Supreme Court in Sps. Santos, et al. v. Sps. Lumbao, thus: It
Section 2, Rule 52, in relation to Section 4, Rule 56 of the 1997 is elementary that' the active participation of a party in a case
Rules of Civil Procedure, as amended. Furthennore, petitioner's letter pending against him before a court is tantamount to recognition of
dated December 18, 2007 pleading the Court to take a second. Look that court's jurisdiction and willingness to abide by the resolution of
at his petition for review on certiorari and that a decision thereon be the case which will bar said party from later on impugning the courts
rendered based purely on its merits was noted without action. 21 jurisdiction. ' In fine, under the circumstances obtaining in this case
the Petitioners are stopped from assailing the Court a quo 's lack of
Unsatisfied, petitioner wrote a letter dated March 24, 2008 addressed jurisdiction. Too, We do not find merit in the Petitioners' second
to then Chief Justice Reynato S. Puno praying that a decision on the issue, supra. As mentioned earlier, entry of judgment had already
case be rendered based on the. Merits and not on formal been made on the assailed Decision and Order as early as 31
requirements "as he stands to lose everything his parents had left October 2007.
him just because the verification against non-forum shopping is
formally defective." However, in view of the Entry of Judgment having xxxx
been made on October 31, 2007, the Court likewise noted said letter It maybe that the doctrine of finality of judgments permits certain
without action. 22 equitable remedies such as a petition for annulment. But the I. Rules
are clear. The annulment by the Court of Appeals of judgments or
final orders and resolutions in civil actions of the Regional Trial
On November 27, 2008, the RTC issued an Order, issuing a Part Courts is resorted to only where the ordinary remedies of new trial,
Writ of Execution of its October 1, 2001 Decision with respect to the appeal, petition for relief or other appropriate remedies are no longer
portions disposing of petitioner's claims as affirmed by the CA. available through no fault of the petitioner, supra.

The foregoing notwithstanding, petitioner filed, on February 11, 200 a

If Petitioners lost their chance to avail themselves of the appropriate
Petition for Annulment of Judgment and Order before the CA remedies or appeal before the Supreme Court, that is their own look
assailing October 1, 2001 Decision as well as the November 27, out. The High Tribunal has emphatically pointed out in Mercado, et
2008 Order of the RTC on the grounds of extrinsic fraud and lack of
al. v. Security Bank Corporation, thus:
jurisdiction. In Decision dated March 13, 2009, however, the CA
dismissed the petition a affirmed the rulings of the trial court in the
following wise: Although the assailed Decision of the Court a quo has A principle almost repeated to satiety is that "an action for annulment
already become final and executory and in fact entry of judgment of judgment cannot and is not a substitute for the lost remedy
ofappeal." A party must have first availed of appeal, a motion for 17. That said estate remains undivided up to this date and it
new trial or a petition for relief before an action for annulment can will be to the best interest of all heirs that it be partitioned
prosper. Its obvious rationale is to prevent the party from benefiting judicially. 26.
from his inaction or negligence. Also, the action for annulment of Petitioner is mistaken. It is true that some of respondents' causes of
judgment must be based either on (a) extrinsic fraud or (b) lack of action pertaining to the properties left behind by the decedent Pedro,
jurisdiction or denial of due process. Having failed to avail of the his known heirs, and the nature and extent of their interests thereon
remedies and there being 'a Clear showing that neither of the may fall under an action for settlement of estate. However, a
grounds was present, the petition must be dismissed. Only a complete reading of the complaint would readily show that, based on
disgruntled litigant would find such legal disposition unacceptable. 23 the nature of the suit, the llegations therein, and the reliefs prayed
When the appellate court denied Petitioners Motion for for, the action, is clearly one for udicial partition with annulment of
Reconsideration in its Resolution dated April 23, 2009, petitioner filed title and recovery of possession.
the instant Petition for Review on Certiorari on June 10, 2009,
invoking the following ground: Section 1, Rule 74 of the Rules of Court proyides:
I. Summary Settlement of Estate
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN Section 1. Extrajudicial settlement by agreement between heirs. - If
NOT RULING THAT THE REGIONAL TRIAL COURT, BRANCH 14, the decedent left no will and no debts and the heirs are all of age5 or
NASUGBU, BATANGAS, ACTED WITHOUT JURISDCITION IN the minors are represented by their judicial or legal representatives
ENTERTAINING THE SPECIAL PROCEEDING FOR THE duly authorized for the purpose, the parties may without securing
letters of administration, divide the estate among themselves as they
ACTION FOR ANNULMENT OF TITLE OF THE HEIRS AND THIRD see fit by means of a public instrument filed in the office of the
register of deeds, and should they disagree, they may do so in an
ordinary action of partition. If there is only one heir, he may
adjudicate to himself the entire estate by means of an affidavit filled
Petitioner asserts that while the complaint filed by respondents was in the office of the register of deeds. The parties to an Extrajudicial
captioned as "Judicial Partition with Annulment of Title and Recovery settlement, whether by public instrument or by stipulation in a
of Possession," the allegations therein show that the cause of action pending action for partition, or the sole heir who adjudicates the
is actually one for settlement of estate of decedent Pedro. entire estate to himself by means of an affidavit shall file,
Considering that settlement of estate is a special proceeding simultaneously with and as a condition precedent to the filing of the
cognizable by a probate court of limited jurisdiction while judicial public instrument, or stipulation in the action for partition, or of the
partition with annulment of title and recovery of possession are affidavit in the office of the register of deeds, a bond with the said
ordinary civil actions cognizable by a court of general jurisdiction, the register of deeds, in an amount equivalent to the value of the
trial court exceeded its jurisdiction in entertaining the latter while it personal property involved as certified to under oath by the parties
was sitting merely in its probate jurisdiction. This is in view of the concerned and conditioned upon the payment of any just claim that
prohibition found in the Rules on the joiner of special civil actions and may be filed under section 4 of this rule. It shall be presumed that the
ordinary civil actions. 25 Thus, petitioner argued that the ruling of the decedent left no debts if no creditor files a petition for letters of
trial court is void and has no effect for having been rendered in administration within two (2) years after the death of the decedent.
without jurisdiction.
The fact of the Extrajudicial settlement or administration shall be
Petitioner also reiterates the arguments raised before the appellate Published in a newspaper of general circulation in the manner
court that since the finding of forgery relates only to the signature of provided in the next succeeding section; but no Extrajudicial
respondents and not to their co-heirs, who assented to the settlement shall be binding upon any person who has not participated
conveyance, the transaction should be considered valid as to them. therein or had no notice thereof. 27
Petitioner also denies the indings of the courts below that his parents
are builders in bad faith for they only took possession of the subject
properties after the execution of the transfer documents and after In this relation, Section 1, Rule 69 of the Rules of Court provides:
they paid the consideration on the sale.
Section 1. Complaint in action for partition of real estate. - A person
The petition is bereft of merit. Petitioner maintains that since. having the right to compel the partition of real estate may do so as
Respondents complaint alleged the following causes of action, the provided in this Rule, setting forth in his complaint the nature and
same is actually one for settlement of estate and not of judicial extent of his title and an adequate description of the real estate of
partition: FIRST CAUSE OF ACTION which partition is demanded and joining as defendants all other
1. That Pedro L. Rifi.oza, Filipino and resident of Nasugbu, persons interested in the property. 28
Batangas at the time of his death, died intestate on
November 16, 1989. Copy of his death certificate is hereto As can be gleaned from the foregoing provisions, the allegations of
attached as Annex "A"; respondents in their complaint are but customary, in fact, mandatory,
2. That Plaintiffs together with the Defendants enumerated to a complaint for partition of real estate. Particularly, the complaint
from paragraph 2-A to 2-J are the only known heirs of the alleged: (1) that Pedro died intestate; (2) that respondents, together
above-mentioned decedent. The plaintiffs and the with their co-heirs, are all of legal age, with the exception of one who
Defendants Rolando, Rafael, Antonio, Angelita, Loma all is represented by a judicial representative duly authorized for the
surnamed Rifioza, and Myrna R. Limon or Myrna R. purpose; (3) that the heirs enumerated are the only known heirs of
Rogador, Epifania Belo and Ma. Theresa R. Demafelix are Pedro; (4) that there is an account and description of all real
the decedents legitimate children with his first wife, while properties left by Pedro; (5) that Pedro's estate has no known
Benita Tenorio Rifioza, is the decedents widow and indebtedness; and (6) that respondents, as rightful heirs to the
Bernadette Rifioza, the decedent's daughter with said decedents estate, pray for the partition of the same in accordance
widow. As such, said parties are co-owners by virtue of an with the laws of intestacy. It is clear, therefore, that based on the
intestate inheritance from the decedent, of the properties allegations of the complaint, the case is one for judicial partition. That
enumerated in the succeeding paragraph; the complaint alleged causes of action identifying the heirs of the
3. That the decedent left the following real properties all decedent, properties of the estate, and their rights thereto, does not
located in Nasugbu, Batangas: perforce make it an action for settlement of estate.
16. That the estate of decedent Pedro L. Rifioza has no
It must be recalled that the general rule is that when a person dies
known legal indebtedness; intestate, or, if testate, failed to name an executor in his will or the
executor o named is incompetent, or refuses the trust, or. Fails to certificates of title of the respondents therein, this Court found the
furnish the bond equipped by the Rules of Court, then the decedent's dismissal to be improper in the following manner:
estate shall be judicially administered and the competent court shall
appoint a qualified administrator the order established in Section 6 of In Lacbayan v. Samoy, Jr. (Lacbayan) which is an action. For
Rule 78 of the Rules of Court. 29 An exception to this rule, however, partition premised on the existence or non-existence of co-ownership
is found in the aforequoted Section 1 of Rule 4 wherein the heirs of a between the parties, the Court categorically pronounced that a
decedent, who left no will and no debts due from is estate, may resolution on the issue of ownership does not subject the Torrens
divide the estate either extrajudicially or in an ordinary action or title issued over the disputed realties 'to a collateral attack. It must be
partition without submitting the same for judicial administration nor borne in mind that what cannot be collaterally attacked is the
applying for the appointment of an administrator by the court. 30The certificate of title and not the title itself. As pronounced in Lacbayan:
reasons that where the deceased dies without pending obligations,
there is no necessity for the appointment of an administrator to
administer the. Estate for hem and to deprive the real owners of their There is no dispute that a Torrens certificate of title cannot be
possession to which they are immediately entitled. 31 collaterally attacked, but that rule is not material to the case at bar.
What cannot be collaterally attacked is the certificate of title and not
the title itself. The' certificate referred to is that -document issued by
In this case, it was expressly alleged in the complaint, and was not the Register of Deeds known as the TCT. In contrast, the title
isputed, that Pedro died without a will, leaving his estate without any
referred to by law means ownership, which is, more often than not,
ending obligations. Thus, contrary to petitioners contention, represented by that document. Petitioner c.pparently confuses title
respondents were under no legal obligation to submit the subject with the certificate of title. Title as a concept of ownership should not
properties of the estate of a special proceeding for settlement of be confused with the certificate of title as evidence of such ownership
intestate estate, and are, in fact, encouraged to have the same although both are interchangeably used. (Emphases supplied)
partitioned, judicially or extrajudicially, by ereira v. Court of
Appeals: 32
Thus, the RTC erroneously dismissed petitioner's petition for
annulment of sale on the ground that it constituted a collateral attack
Section 1, Rule 74 of the Revised Rules of Court, however, does not since she was actually assailing Rogelio and Orlando's title to the
preclude the heirs from instituting administration proceedings, even if subject lands and not any Torrens certificate oftitle over the same.
the estate has no debts or obligations, if they do not desire to resort
for good reasons to an ordinary action for partition. While Section 1
allows the heirs to divide the estate among themselves as they may Indeed, an action for partition does not preclude the settlement of the
see fit, qr. to resort to an ordinary action for partition, the said issue of ownership. In fact, the determination as to the existence of
provision does not compel them to do so if they have good reasons the same is necessary in the resolution of an action for partition, as
to take a different course of action. It should be noted that recourse held in Municipality of Bifzanv. Garcia: 40
to an administration proceeding even if the estate has no debts is
sanctioned only if the heirs have good reasons for not resorting to an The first phase of a partition and/or accounting suit is taken up with
action for partition. Where partition is possible, either in or out of the determination of whether or not a co-ownership in fact exists, and
court, the estate should not be burdened with an administration a partition is proper (i.e., not otherwise legally proscribed) and may
proceeding without good and compelling reasons. be made by voluntary agreement of all the parties interested in the
property. This phase may end with a declaration that plaintiff is not
Thus, it has been repeatedly 4eld that when a person dies without entitled to have a partition either because a co-ownership does not
leaving pending obligations to be paid, his heirs, whether of age or exist, or partition is_ legally prohibited. It may end, on the other hand,
not, are not bound to submit the property to a judicial administration, with an adjudgment that a co-ownership does in truth exist, partition
which is always long and costly, or to apply for the appointment of an is proper in the premises and an accounting of rents and profits
administrator by the Court. It has been uniformly held that in such received by the defendant from the real estate in question is in order.
case the judicial administration and the appointment of an xxx
administrator are superfluous and unnecessary proceedings. 33
The second phase commences when it appears that "the parties are
Thus, respondents committed no error in. filing an action for judicial unable to agree upon the partition" directed by the court. In that
partition instead of a special proceeding for the settlement of estate event [,] partition shall be done for the parties by the [c] ourt with the
as law expressly permits the same.1avvphi1 That the complaint assistance of not more than three (3) commissioners. This second
contained allegations inherent in an action for settlement of estate stage may well also deal with the rendition of the accounting itself
does not. Mean that there was a prohibited joined of causes of action and its approval by the [c] ourt after the. Parties have been accorded
for questions as to the estate's properties as well as a determination opportunity to be heard Thereon, and an award for the recovery by
of the heirs, their status as such, and the nature and extent of their the party or parties thereto entitled of their just share in the rents and
titles to the estate, may also be properly ventilated in partition profits of the real estate in question. xx x. 41
proceedings alone.34 In fact, a complete inventory of the estate may
likewise be done during the partition proceedings, especially since An action for partition, therefore, is premised on the existence or non-
the estate has no debts.~5 Indeed, where the more expeditious existence of co-ownership between the parties. 42 Unless and until
remedy 9f partition is available to the heirs, then they may not be the issue of co-ownership is definitively resolved, it would be
compelled to submit to administration proceedings, dispensing of the premature to effect a partition of an estate. 43
risks of delay and of the properties being dissipated. 36
In view of the foregoing, petitioner' s argument that the trial court
Moreover, the fact that respondents' complaint also prayed for the acted without jurisdiction in entertaining the action of settlement of
annulment of title and recovery of possession does not strip the trial estate and annulment of title in a single proceeding is clearly
court off of its jurisdiction to hear and decide the case. Asking for the erroneous for the instant complaint is precisely one for judicial
annulment of certain transfers of property could very well be partition with annulment of title and recovery of possession, filed
achieved in an action for partition, 37 as can be seen in cases where within the confines of applicable law and jurisprudence. Under
1-ourts determine the parties' rights arising from complaints asking Section 144 of Republic Act No. 7691 (RA 7691),45 amending Batas
not only for the partition of estates but also for the annulment of titles Pambansa Big. 129, the RTC shall exercise exclusive original
and recovery of ownership and possession of property. 38 In fact, in jurisdiction over all civil actions in which the subject of the litigation is
Bagayas v. Bagayas, 39wherein a complaint for annulment of sale incapable of pecuniary estimation. Since the action herein was not
and partition was dismissed by the trial court due to the impropriety merely for partition and recovery of ownership but also for annulment
of an action for annulment as it constituted a collateral attack on the of title and documents, the action is incapable of pecuniary
estimation and thus cognizable by the RTC. Hence, considering that evidencing her receipt of her share in the sale, did not refer to any
the trial court clearly had jurisdiction in rendering its decision, the sort of sale but to a previous loan obtained by Pedro and Benita from
instant petition for annulment of judgment must necessarily fail. a bank.

Note that even if the instant action was one for annulment of title Moreover, credence must be given on the appellate courts
alone, without the prayer for judicial partition, the requirement of observations as to petitioners' actuations insofar as the transactions
instituting a separate special proceeding for the determination of the alleged herein are concerned. First, they were seemingly uncertain
status and rights of the respondents as putative heirs may be as to the number and/or identity of the properties bought by
dispensed with, in light of the fact that the parties had voluntarily them. 49 In their Answer, they gave the impression 'that they bought
submitted the issue to the trial court and had already presented both the resort and the family home and yet, during trial, Francisco
evidence regarding the issue of heirship. 46 In Portugal v. Portugal- Villafria claimed they only bought the resort. In fact, it was only then
Beltran, 47 the Court explained: that they presented the subject Extra Judicial Settlement and Deed of
Sale. 50 Second, they never presented any other document which
In the case at bar, respondent, believing rightly or wrongly that she w0uld evidence their actual payment of consideration to the selling
heirs. 51 Third, in spite of the. Blatant legal infirmities of the subject
was the sole heir to Portugal's estate, executed on February 15,
1988 the questioned Affidavit of Adjudication under the second documents of conveyance, petitioners still took possession of the
properties, demolished several cottages, and introduced permanent
sentence of Rule 74, Section 1 of the Revised Rules of Court. Said
rule is an exception to the general rule that when a person dies improvements thereon.
leaving a property, it should be judicially administered and the
competent court should appoint a qualified administrator, in the order In all, the Court agrees with the appellate court: that petitioners failed
established in Sec. 6, Rule 78 in case the deceased left no will, or in to adequately substantiate, with convincing, credible and
case he did, he failed to name an executor therein. independently verifiable proof, their claim that they had, in fact,
xxxx purchased the subject properties. The circumstances surrounding the
It appearing, however, that in the present case the only property of purported transfers cast doubt on whether they actually took place. In
the intestate estate of Portugal is the Caloocan parcel of land, to still substantiating their claim, petitioners relied solely on the Extra-
subject it, under the circumstances of the case, to a special Judicial Settlement and Deed of Sale, who utterly failed to prove their
proceeding which could be long, hence, not expeditious, just to authenticity and due execution. They cannot, therefore, be permitted
establish the status of petitioners as heirs is not only impractical; it is to claim. Absolute ownership of the subject lands based on the same.
burdensome to the estate with the costs and expenses of an
administration proceeding. And it is superfluous in light of the fact
Neither can they be considered as innocent purchasers for value and
that the parties to the evil case - subject of the present case, could builders in good faith. Good faith consists in the belief of title builder
and had already in fact presented evidence before the trial court
that the land the latter is building on is one's own without knowledge
which assumed jurisdiction over the case upon the issues it defined of any defect or flaw in one's. Title. 52 However, in view of .the
during pre-trial. manifest defects in the instruments conveying their titles, petitioners
should have been placed on guard. Yet, they still demolished several
In fine, under the circumstances of the present case, there being no cottages and constructed improvement on the properties. Thus, their
compelling reason to still subject Portugals estate to administration claim of. Good faith cannot be given credence.
proceedings since a determination of petitioners status as heirs
could be achieved in the civil case filed by petitioners, the trial court Indeed, a judgment which has acquired finality becomes immutable
should proceed to evaluate the evidence presented by the parties and unalterable, hence, may no longer be modified in any respect
during the trial and render a decision thereon upon the issues it except to correct clerical errors or mistakes, all the issues between
defined during pre-trial, x x x. 48 the parties being deemed resolved and. laid to rest. 53 it is a
fundamental principle in our judicial system and essential to an
Thus, in view of the clarity of respondents' complaint and the causes effective and efficient administration of justice that, once a judgment
of action alleged therein, as well as the fact that the trial court, in has become final, the winning party be, not through a mere
arriving at its decision, gave petitioner more than ample opportunity subterfuge, deprived of the fruits of the verdict. 54 Exceptions to the
to advance his claims, petitioner cannot now be permitted to allege immutability of final judgment is allowed only under the most
lack of jurisdiction just because the judgment rendered was adverse extraordinary of circumstances. 55 Yet, when petitioner is given more
to them. To repeat, the action filed herein is one for judicial partition than ample opportunity to be heard, unbridled access to the
and not for settlement of intestate estate. Consequently, that appellate courts, as well as unbiased judgments rendered after a
respondents also prayed for the annulment of title and recovery of consideration of evidence presented by the parties, as in the case at
possession in the same proceeding does not strip the court off of its hand, the Court shall refrain from reversing the rulings of the courts
jurisdiction for asking for 'the annulment of certain transfers of below in the absence of any showing that the same were rendered
property could very well be achieved in an action for partition. with fraud or lack of jurisdiction.

As for petitioner's contention that the sale must be considered valid WHEREFORE, premises considered, .the instant petition is DENIED.
as to the heirs who assented to the conveyance as well as their The Decision and Resolution, dated March 13, 2009 and April 23,
allegation of good faith, this Court does not find any compelling 2009, respectively, of the Court Appeals for CA-G.R. SP No. 107347,
reason to deviate from the ruling of the appellate court. As sufficiently which affirmed the Judgment dated October 1, 2001 of the Regional
found by both courts below, the authenticity and due execution of the Trial Court of Nasugbu, Batangas, Branch 14, in Civil Case No. 217,
documents on which petitioners claims are based were inadequately insofar as it conce1ns the resort covered by Transfer Certificates of
proven. They were undated, forged, and acknowledged before a Title No. 513 54 and No. 51355, and family home covered by TCT
notary public who was not commissioned as such on the date they No. 40807 and 40808, are AFFIRMED. SO ORDERED.
were executed. They were never presented to the Register of Deeds
for registration. Neither were the supposed notaries and buyers of
the subject properties presented as witnesses.

While it may be argued that Benita, one of the co-heirs to the estate,
actually acknowledged the sale of the resort, the circumstances
surrounding the same militate against the fact of its occurrence. Not
only was the Deed of Sale supposedly executed by Benita undated
and unsigned by Pedro, but the document she presented purportedly