G.R. No.

L-68053 May 7, 1990

LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ, petitioners,

vs.

THE HONORABLE INTERMEDIATE APELLATE COURT and JESUS YANES, ESTELITA

YANES, ANTONIO YANES, ROSARIO YANES, and ILUMINADO YANES, respondents.

Francisco G. Banzon for petitioner.

Renecio R. Espiritu for private respondents.

FERNAN, C.J.:

This is a petition for review on certiorari seeking the reversal of: (a) the decision of the Fourth Civil
Cases Division of the Intermediate Appellate Court dated August 31, 1983 in AC-G.R. CV No. 56626
entitled "Jesus Yanes et al. v. Dr. Rodolfo Siason et al." affirming the decision dated July 8, 1974 of
the Court of First Instance of Negros Occidental insofar as it ordered the petitioners to pay jointly and
severally the private respondents the sum of P20,000.00 representing the actual value of Lots Nos.
773-A and 773-B of the cadastral survey of Murcia, Negros Occidental and reversing the subject
decision insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages,
moral damages and attorney's fees, respectively and (b) the resolution of said appellate court dated May
30, 1984, denying the motion for reconsideration of its decision.

The real properties involved are two parcels of land identified as Lot 773-A and Lot 773-B which were
originally known as Lot 773 of the cadastral survey of Murcia, Negros Occidental. Lot 773, with an
area of 156,549 square meters, was registered in the name of the heirs of Aniceto Yanes under Original
Certificate of Title No. RO-4858 (8804) issued on October 9, 1917 by the Register of Deeds of
Occidental Negros (Exh. A).

Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private respondents,
Estelita, Iluminado and Jesus, are the children of Rufino who died in 1962 while the other private
respondents, Antonio and Rosario Yanes, are children of Felipe. Teodora was survived by her child,
Jovita (Jovito) Alib. 1 It is not clear why the latter is not included as a party in this case.

Aniceto left his children Lots 773 and 823. Teodora cultivated only three hectares of Lot 823 as she
could not attend to the other portions of the two lots which had a total area of around twenty-four
hectares. The record does not show whether the children of Felipe also cultivated some portions of the
lots but it is established that Rufino and his children left the province to settle in other places as a result
of the outbreak of World War II. According to Estelita, from the "Japanese time up to peace time", they
did not visit the parcels of land in question but "after liberation", when her brother went there to get
their share of the sugar produced therein, he was informed that Fortunato Santiago, Fuentebella
(Puentevella) and Alvarez were in possession of Lot 773. 2
It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of Title No.
RF 2694 (29797) covering Lot 773-A with an area of 37,818 square meters. 3 TCT No. RF 2694
describes Lot 773-A as a portion of Lot 773 of the cadastral survey of Murcia and as originally
registered under OCT No. 8804.

The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in the name of
Fortunato D. Santiago on September 6, 1938 Under TCT No. RT-2695 (28192 ). 4 Said transfer
certificate of title also contains a certification to the effect that Lot 773-B was originally registered
under OCT No. 8804.

On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in consideration
of the sum of P7,000.00. 5 Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292 were
issued in Fuentebella's name. 6

After Fuentebella's death and during the settlement of his estate, the administratrix thereof (Arsenia R.
Vda. de Fuentebella, his wife) filed in Special Proceedings No. 4373 in the Court of First Instance of
Negros Occidental, a motion requesting authority to sell Lots 773-A and 773-B. 7 By virtue of a court
order granting said motion, 8 on March 24, 1958, Arsenia Vda. de Fuentebella sold said lots for
P6,000.00 to Rosendo Alvarez. 9 Hence, on April 1, 1958 TCT Nos. T-23165 and T-23166 covering
Lots 773-A and 773-B were respectively issued to Rosendo Alvarez. 10

Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely,
Estelita, Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental a complaint
against Fortunato Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros
Occidental for the "return" of the ownership and possession of Lots 773 and 823. They also prayed that
an accounting of the produce of the land from 1944 up to the filing of the complaint be made by the
defendants, that after court approval of said accounting, the share or money equivalent due the
plaintiffs be delivered to them, and that defendants be ordered to pay plaintiffs P500.00 as damages in
the form of attorney's fees. 11

During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A, 773-B
and another lot for P25,000.00 to Dr. Rodolfo Siason. 12 Accordingly, TCT Nos. 30919 and 30920
were issued to Siason, 13 who thereafter, declared the two lots in his name for assessment purposes. 14

Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in behalf of the other plaintiffs,
and assisted by their counsel, filed a manifestation in Civil Case No. 5022 stating that the therein
plaintiffs "renounce, forfeit and quitclaims (sic) any claim, monetary or otherwise, against the
defendant Arsenia Vda. de Fuentebella in connection with the above-entitled case." 15

On October 11, 1963, a decision was rendered by the Court of First Instance of Negros Occidental in
Civil Case No. 5022, the dispositive portion of which reads:

WHEREFORE, judgment is rendered, ordering the defendant Rosendo Alvarez to reconvey to the
plaintiffs lots Nos. 773 and 823 of the Cadastral Survey of Murcia, Negros Occidental, now covered by
Transfer Certificates of Title Nos. T-23165 and T-23166 in the name of said defendant, and thereafter
to deliver the possession of said lots to the plaintiffs. No special pronouncement as to costs.

SO ORDERED. 16

It will be noted that the above-mentioned manifestation of Jesus Yanes was not mentioned in the
aforesaid decision.

However, execution of said decision proved unsuccessful with respect to Lot 773. In his return of
service dated October 20, 1965, the sheriff stated that he discovered that Lot 773 had been subdivided
into Lots 773-A and 773-B; that they were "in the name" of Rodolfo Siason who had purchased them
from Alvarez, and that Lot 773 could not be delivered to the plaintiffs as Siason was "not a party per
writ of execution." 17

The execution of the decision in Civil Case No. 5022 having met a hindrance, herein private
respondents (the Yaneses) filed on July 31, 1965, in the Court of First Instance of Negros Occidental a
petition for the issuance of a new certificate of title and for a declaration of nullity of TCT Nos.
T-23165 and T-23166 issued to Rosendo Alvarez. 18 Thereafter, the court required Rodolfo Siason to
produce the certificates of title covering Lots 773 and 823.

Expectedly, Siason filed a manifestation stating that he purchased Lots 773-A, 773-B and 658, not Lots
773 and 823, "in good faith and for a valuable consideration without any knowledge of any lien or
encumbrances against said properties"; that the decision in the cadastral proceeding 19 could not be
enforced against him as he was not a party thereto; and that the decision in Civil Case No. 5022 could
neither be enforced against him not only because he was not a party-litigant therein but also because it
had long become final and executory. 20 Finding said manifestation to be well-founded, the cadastral
court, in its order of September 4, 1965, nullified its previous order requiring Siason to surrender the
certificates of title mentioned therein. 21

In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ of execution in Civil
Case No. 5022. Siason opposed it. 22 In its order of September 28, 1968 in Civil Case No. 5022, the
lower court, noting that the Yaneses had instituted another action for the recovery of the land in
question, ruled that at the judgment therein could not be enforced against Siason as he was not a party
in the case. 23

The action filed by the Yaneses on February 21, 1968 was for recovery of real property with damages.
24 Named defendants therein were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez, Raymundo
Alvarez and the Register of Deeds of Negros Occidental. The Yaneses prayed for the cancellation of
TCT Nos. T-19291 and 19292 issued to Siason (sic) for being null and void; the issuance of a new
certificate of title in the name of the Yaneses "in accordance with the sheriffs return of service dated
October 20, 1965;" Siason's delivery of possession of Lot 773 to the Yaneses; and if, delivery thereof
could not be effected, or, if the issuance of a new title could not be made, that the Alvarez and Siason
jointly and severally pay the Yaneses the sum of P45,000.00. They also prayed that Siason render an
accounting of the fruits of Lot 773 from November 13, 1961 until the filing of the complaint; and that
the defendants jointly and severally pay the Yaneses moral damages of P20,000.00 and exemplary
damages of P10,000.00 plus attorney's fees of P4, 000.00. 25
In his answer to the complaint, Siason alleged that the validity of his titles to Lots 773-A and 773-B,
having been passed upon by the court in its order of September 4, 1965, had become res judicata and
the Yaneses were estopped from questioning said order. 26 On their part, the Alvarez stated in their
answer that the Yaneses' cause of action had been "barred by res judicata, statute of limitation and
estoppel." 27

In its decision of July 8, 1974, the lower court found that Rodolfo Siason, who purchased the properties
in question thru an agent as he was then in Mexico pursuing further medical studies, was a buyer in
good faith for a valuable consideration. Although the Yaneses were negligent in their failure to place a
notice of lis pendens "before the Register of Deeds of Negros Occidental in order to protect their rights
over the property in question" in Civil Case No. 5022, equity demanded that they recover the actual
value of the land because the sale thereof executed between Alvarez and Siason was without court
approval. 28 The dispositive portion of the decision states:

IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby rendered in the following

manner:

A. The case against the defendant Dr. Rodolfo Siason and the Register of Deeds are (sic) hereby
dismmissed,

B. The defendants, Laura, Flora and Raymundo, all surnamed Alvarez being the legitimate children
of the deceased Rosendo Alvarez are hereby ordered to pay jointly and severally the plaintiffs the sum
of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of Murcia Cadastre, Negros
Occidental; the sum of P2,000.00 as actual damages suffered by the plaintiff; the sum of P5,000.00
representing moral damages and the sum of P2.000 as attorney's fees, all with legal rate of interest from
date of the filing of this complaint up to final payment.

C. The cross-claim filed by the defendant Dr. Rodolfo Siason against the defendants, Laura, Flora
and Raymundo, all surnamed Alvarez is hereby dismissed.

D. Defendants, Laura, Flora and Raymundo, all surnamed Alvarez are hereby ordered to pay the
costs of this suit.

SO ORDERED. 29

The Alvarez appealed to the then Intermediate Appellate Court which in its decision of August 31,
1983 30 affirmed the lower court's decision "insofar as it ordered defendants-appellants to pay jointly
and severally the plaintiffs-appellees the sum of P20,000.00 representing the actual value of Lots Nos.
773-A and 773-B of the cadastral survey of Murcia, Negros Occidental, and is reversed insofar as it
awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and
attorney's fees, respectively." 31 The dispositive portion of said decision reads:
WHEREFORE, the decision appealed from is affirmed insofar as it ordered defendants-appellants to
pay jointly and severally the plaintiffs- appellees the sum of P20,000.00 representing the actual value
of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros Occidental, and is reversed
insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral
damages and attorney's fees, respectively. No costs.

SO ORDERED. 32

Finding no cogent reason to grant appellants motion for reconsideration, said appellate court denied the
same.

Hence, the instant petition. ln their memorandum petitioners raised the following issues:

1. Whethere or not the defense of prescription and estoppel had been timely and properly invoked
and raised by the petitioners in the lower court.

2. Whether or not the cause and/or causes of action of the private respondents, if ever there are any,
as alleged in their complaint dated February 21, 1968 which has been docketed in the trial court as
Civil Case No. 8474 supra, are forever barred by statute of limitation and/or prescription of action and
estoppel.

3. Whether or not the late Rosendo Alvarez, a defendant in Civil Case No. 5022, supra and father of
the petitioners become a privy and/or party to the waiver (Exhibit 4-defendant Siason) in Civil Case No.
8474, supra where the private respondents had unqualifiedly and absolutely waived, renounced and
quitclaimed all their alleged rights and interests, if ever there is any, on Lots Nos. 773-A and 773-B of
Murcia Cadastre as appearing in their written manifestation dated November 6, 1962 (Exhibits "4"
Siason) which had not been controverted or even impliedly or indirectly denied by them.

4. Whether or not the liability or liabilities of Rosendo Alvarez arising from the sale of Lots Nos.
773-A and 773-B of Murcia Cadastre to Dr. Rodolfo Siason, if ever there is any, could be legally
passed or transmitted by operations (sic) of law to the petitioners without violation of law and due
process . 33

The petition is devoid of merit.

As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the Supreme Court,
to review the decision in Civil Case No. 5022 ordering Alvarez to reconvey the lots in dispute to herein
private respondents. Said decision had long become final and executory and with the possible
exception of Dr. Siason, who was not a party to said case, the decision in Civil Case No. 5022 is the
law of the case between the parties thereto. It ended when Alvarez or his heirs failed to appeal the
decision against them. 34
Thus, it is axiomatic that when a right or fact has been judicially tried and determined by a court of
competent jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and
those in privity with them in law or estate. 35 As consistently ruled by this Court, every litigation must
come to an end. Access to the court is guaranteed. But there must be a limit to it. Once a litigant's right
has been adjudicated in a valid final judgment of a competent court, he should not be granted an
unbridled license to return for another try. The prevailing party should not be harassed by subsequent
suits. For, if endless litigation were to be allowed, unscrupulous litigations will multiply in number to
the detriment of the administration of justice. 36

There is no dispute that the rights of the Yaneses to the properties in question have been finally
adjudicated in Civil Case No. 5022. As found by the lower court, from the uncontroverted evidence
presented, the Yaneses have been illegally deprived of ownership and possession of the lots in question.
37 In fact, Civil Case No. 8474 now under review, arose from the failure to execute Civil Case No.
5022, as subject lots can no longer be reconveyed to private respondents Yaneses, the same having
been sold during the pendency of the case by the petitioners' father to Dr. Siason who did not know
about the controversy, there being no lis pendens annotated on the titles. Hence, it was also settled
beyond question that Dr. Siason is a purchaser in good faith.

Under the circumstances, the trial court did not annul the sale executed by Alvarez in favor of Dr.
Siason on November 11, 1961 but in fact sustained it. The trial court ordered the heirs of Rosendo
Alvarez who lost in Civil Case No. 5022 to pay the plaintiffs (private respondents herein) the amount
of P20,000.00 representing the actual value of the subdivided lots in dispute. It did not order defendant
Siason to pay said amount. 38

As to the propriety of the present case, it has long been established that the sole remedy of the
landowner whose property has been wrongfully or erroneously registered in another's name is to bring
an ordinary action in the ordinary court of justice for reconveyance or, if the property has passed into
the hands of an innocent purchaser for value, for damages. 39 "It is one thing to protect an innocent
third party; it is entirely a different matter and one devoid of justification if deceit would be rewarded
by allowing the perpetrator to enjoy the fruits of his nefarious decided As clearly revealed by the
undeviating line of decisions coming from this Court, such an undesirable eventuality is precisely
sought to be guarded against." 40

The issue on the right to the properties in litigation having been finally adjudicated in Civil Case No.
5022 in favor of private respondents, it cannot now be reopened in the instant case on the pretext that
the defenses of prescription and estoppel have not been properly considered by the lower court.
Petitioners could have appealed in the former case but they did not. They have therefore foreclosed
their rights, if any, and they cannot now be heard to complain in another case in order to defeat the
enforcement of a judgment which has longing become final and executory.

Petitioners further contend that the liability arising from the sale of Lots No. 773-A and 773-B made by
Rosendo Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of
his estate, after his death.

Such contention is untenable for it overlooks the doctrine obtaining in this jurisdiction on the general
transmissibility of the rights and obligations of the deceased to his legitimate children and heirs. Thus,
the pertinent provisions of the Civil Code state:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance, of a person are transmitted through his death to another or
others either by his will or by operation of law.

Art. 776. The inheritance includes all the property, rights and obligations of a person which are not
extinguished by his death.

Art. 1311. Contract stake effect only between the parties, their assigns and heirs except in case where
the rights and obligations arising from the contract are not transmissible by their nature, or by
stipulation or by provision of law. The heir is not liable beyond the value of the property received from
the decedent.

As explained by this Court through Associate Justice J.B.L. Reyes in the case of Estate of Hemady vs.
Luzon Surety Co., Inc. 41

The binding effect of contracts upon the heirs of the deceased party is not altered by the provision of
our Rules of Court that money debts of a deceased must be liquidated and paid from his estate before
the residue is distributed among said heirs (Rule 89). The reason is that whatever payment is thus made
from the state is ultimately a payment by the heirs or distributees, since the amount of the paid claim in
fact diminishes or reduces the shares that the heirs would have been entitled to receive.

Under our law, therefore. the general rule is that a party's contractual rights and obligations are
transmissible to the successors.

The rule is a consequence of the progressive "depersonalization" of patrimonial rights and duties that,
as observed by Victorio Polacco has characterized the history of these institutions. From the Roman
concept of a relation from person to person, the obligation has evolved into a relation from patrimony
to patrimony with the persons occupying only a representative position, barring those rare cases where
the obligation is strictly personal, i.e., is contracted intuitu personae, in consideration of its
performance by a specific person and by no other.

xxx xxx xxx

Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of
their father's transaction, which gave rise to the present claim for damages. That petitioners did not
inherit the property involved herein is of no moment because by legal fiction, the monetary equivalent
thereof devolved into the mass of their father's hereditary estate, and we have ruled that the hereditary
assets are always liable in their totality for the payment of the debts of the estate. 42

It must, however, be made clear that petitioners are liable only to the extent of the value of their
inheritance. With this clarification and considering petitioners' admission that there are other properties
left by the deceased which are sufficient to cover the amount adjudged in favor of private respondents,
we see no cogent reason to disturb the findings and conclusions of the Court of Appeals.
WHEREFORE, subject to the clarification herein above stated, the assailed decision of the Court of
Appeals is hereby AFFIRMED. Costs against petitioners.

SO ORDERED.

Gutierrez, Jr., Feliciano and Cortes, JJ., concur.

Bidin J., took no part.

G.R. No. 77029 August 30, 1990

BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE, ENRIQUITA and CLAUDIO, all

surnamed, GEVERO, petitioners,

vs.

INTERMEDIATE APPELLATE COURT and DEL MONTE DEVELOPMENT

CORPORATION, respondents.

Carlito B. Somido for petitioners.

Benjamin N. Tabios for private respondent.

PARAS, J.:

This is a petition for review on certiorari of the March 20, 1988 decision 1 of the then Intermediate
Appellate Court (now Court of Appeals) in AC-GR CV No. 69264, entitled Del Monte Development
Corporation vs. Enrique Ababa, et al., etc. affirming the decision 2 of the then Court of First Instance
(now Regional Trial Court) of Misamis Oriental declaring the plaintiff corporation as the true and
absolute owner of that portion of Lot 476 of the Cagayan Cadastre, particularly Lot No. 2476-D of the
subdivision plan (LRC) Psd-80450, containing an area of Seven Thousand Eight Hundred Seventy
Eight (7,878) square meters more or less.
As found by the Appellate Court, the facts are as follows:

The parcel of land under litigation is Lot No. 2476 of the Subdivision Plan Psd-37365 containing an
area of 20,119 square meters and situated at Gusa, Cagayan de Oro City. Said lot was acquired by
purchase from the late Luis Lancero on September 15, 1964 as per Deed of Absolute Sale executed in
favor of plaintiff and by virtue of which Transfer Certificate of Title No. 4320 was issued to plaintiff
(DELCOR for brevity). Luis Lancero, in turn acquired the same parcel from Ricardo Gevero on
February 5, 1952 per deed of sale executed by Ricardo Gevero which was duly annotated as entry No.
1128 at the back of Original Certificate of Title No. 7610 covering the mother lot identified as Lot No.
2476 in the names of Teodorica Babangha — 1/2 share and her children: Maria; Restituto, Elena,
Ricardo, Eustaquio and Ursula, all surnamed surnamed Gevero, 1/2 undivided share of the whole area
containing 48,122 square meters.

Teodorica Babangha died long before World War II and was survived by her six children
aforementioned. The heirs of Teodorica Babangha on October 17,1966 executed an Extra-Judicial
Settlement and Partition of the estate of Teodorica Babangha, consisting of two lots, among them was
lot 2476. By virtue of the extra-judicial settlement and partition executed by the said heirs of Teodorica
Babangha, Lot 2476-A to Lot 2476-I, inclusive, under subdivision plan (LRC) Psd-80450 duly
approved by the Land Registration Commission, Lot 2476-D, among others, was adjudicated to
Ricardo Gevero who was then alive at the time of extra-judicial settlement and partition in 1966.
Plaintiff (private respondent herein) filed an action with the CFI (now RTC) of Misamis Oriental to
quiet title and/or annul the partition made by the heirs of Teodorica Babangha insofar as the same
prejudices the land which it acquired a portion of lot 2476.

Plaintiff now seeks to quiet title and/or annul the partition made by the heirs of Teodorica Babangha
insofar as the same prejudices the land which it acquired, a portion of Lot 2476. Plaintiff proved that
before purchasing Lot 2476-A it first investigated and checked the title of Luis Lancero and found the
same to be intact in the office of the Register of Deeds of Cagayan de Oro City. The same with the
subdivision plan (Exh. "B"), the corresponding technical description (Exh. "P") and the Deed of Sale
executed by Ricardo Gevero — all of which were found to be unquestionable. By reason of all these,
plaintiff claims to have bought the land in good faith and for value, occupying the land since the sale
and taking over from Lancero's possession until May 1969, when the defendants Abadas forcibly
entered the property. (Rollo, p. 23)

After trial the court a quo on July 18, 1977 rendered judgment, the dispositive portion of which reads
as follows:

WHEREFORE, premises considered, judgment is hereby rendered declaring the plaintiff corporation as
the true and absolute owner of that portion of Lot No. 2476 of the Cagayan Cadastre, particularly Lot
No. 2476-D of the subdivision plan (LRC) Psd-80450, containing an area of SEVEN THOUSAND
EIGHT HUNDRED SEVENTY EIGHT (7,878) square meters, more or less. The other portions of Lot
No. 2476 are hereby adjudicated as follows:

Lot No. 2476 – B – to the heirs of Elena Gevero;

Lot No. 2476 – C – to the heirs of Restituto Gevero;

Lot No. 2476 – E – to the defendant spouses Enrique C. Torres and Francisca Aquino;

Lot No. 2476 – F – to the defendant spouses Eduard Rumohr and Emilia Merida Rumohf ;

Lot Nos. 2476-H, 2476-I and 2476 — G — to defendant spouses Enrique Abada and Lilia Alvarez
Abada.

No adjudication can be made with respect to Lot No. 2476-A considering that the said lot is the subject
of a civil case between the Heirs of Maria Gevero on one hand and the spouses Daniel Borkingkito and
Ursula Gevero on the other hand, which case is now pending appeal before the Court of Appeals. No
pronouncement as to costs,

SO ORDERED. (Decision, Record on Appeal, p. 203; Rollo, pp. 21-22)

From said decision, defendant heirs of Ricardo Gevero (petitioners herein) appealed to the IAC (now
Court of Appeals) which subsequently, on March 20, 1986, affirmed the decision appealed from.

Petitioners, on March 31, 1986, filed a motion for reconsideration (Rollo, p. 28) but was denied on
April 21, 1986.

Hence, the present petition.

This petition is devoid of merit.

Basically, the issues to be resolved in the instant case are: 1) whether or not the deed of sale executed
by Ricardo Gevero to Luis Lancero is valid; 2) in the affirmative, whether or not the 1/2 share of
interest of Teodorica Babangha in one of the litigated lots, lot no. 2476 under OCT No. 7610 is
included in the deed of sale; and 3) whether or not the private respondents' action is barred by laches.

Petitioners maintain that the deed of sale is entirely invalid citing alleged flaws thereto, such as that: 1)
the signature of Ricardo was forged without his knowledge of such fact; 2) Lancero had recognized the
fatal defect of the 1952 deed of sale when he signed the document in 1968 entitled "Settlement to
Avoid the Litigation"; 3) Ricardo's children remained in the property notwithstanding the sale to
Lancero; 4) the designated Lot No. is 2470 instead of the correct number being Lot No. 2476; 5) the
deed of sale included the share of Eustaquio Gevero without his authority; 6) T.C.T. No. 1183 of
Lancero segregated the area of 20,119 square meters from the bigger area (OCT No. 7616) without the
consent of the other co-owners; 7) Lancero caused the 1952 Subdivision survey without the consent of
the Geveros' to bring about the segregation of the 20,119 square meters lot from the mother lot 2476
which brought about the issuance of his title T-1183 and to DELCOR's title T4320, both of which were
illegally issued; and 8) the area sold as per document is 20,649 square meters whereas the segregated
area covered by TCT No. T-1183 of Lancero turned out to be 20,119 square meters (Petitioners
Memorandum, pp. 62-78).

As to petitioners' claim that the signature of Ricardo in the 1952 deed of sale in favor of Lancero was
forged without Ricardo's knowledge of such fact (Rollo, p. 71) it will be observed that the deed of sale
in question was executed with all the legal formalities of a public document. The 1952 deed was duly
acknowledged by both parties before the notary public, yet petitioners did not bother to rebut the legal
presumption of the regularity of the notarized document (Dy v. Sacay, 165 SCRA 473 [1988]); Nuguid
v. C.A., G.R. No. 77423, March 13, 1989). In fact it has long been settled that a public document
executed and attested through the intervention of the notary public is evidence of the facts in clear,
unequivocal manner therein expressed. It has the presumption of regularity and to contradict all these,
evidence must be clear, convincing and more than merely preponderant (Rebuleda v. I.A.C., 155
SCRA 520-521 [1987]). Forgery cannot be presumed, it must be proven (Siasat v. IAC, No. 67889,
October 10, 1985). Likewise, petitioners allegation of absence of consideration of the deed was not
substantiated. Under Art. 1354 of the Civil Code, consideration is presumed unless the contrary is
proven.

As to petitioners' contention that Lancero had recognized the fatal defect of the 1952 deed when he
signed the document in 1968 entitled "Settlement to Avoid Litigation" (Rollo, p. 71), it is a basic rule
of evidence that the right of a party cannot be prejudiced by an act, declaration, or omission of another
(Sec. 28. Rule 130, Rules of Court). This particular rule is embodied in the maxim "res inter alios acta
alteri nocere non debet." Under Section 31, Rule 130, Rules of Court "where one derives title to
property from another, the act, declaration, or omission of the latter, while holding the title, in relation
to the property is evidence against the former." It is however stressed that the admission of the former
owner of a property must have been made while he was the owner thereof in order that such admission
may be binding upon the present owner (City of Manila v. del Rosario, 5 Phil. 227 [1905]; Medel v.
Avecilla, 15 Phil. 465 [1910]). Hence, Lanceros' declaration or acts of executing the 1968 document
have no binding effect on DELCOR, the ownership of the land having passed to DELCOR in 1964.

Petitioners' claim that they remained in the property, notwithstanding the alleged sale by Ricardo to
Lancero (Rollo, p. 71) involves a question of fact already raised and passed upon by both the trial and
appellate courts. Said the Court of Appeals:

Contrary to the allegations of the appellants, the trial court found that Luis Lancero had taken
possession of the land upon proper investigation by plaintiff the latter learned that it was indeed Luis
Lancero who was the owner and possessor of Lot 2476 D. . . . (Decision, C.A., p. 6).

As a finding of fact, it is binding upon this Court (De Gola-Sison v. Manalo, 8 SCRA 595 [1963];
Gaduco vs. C.A., 14 SCRA 282 [1965]; Ramos v. Pepsi-Cola, 19 SCRA 289 [1967]; Tan v. C.A., 20
SCRA 54 [1967]; Ramirez Tel. Co. v. Bank of America, 33 SCRA 737 [1970]; Lucero v. Loot, 25
SCRA 687 [1968]; Guerrero v. C.A., 142 SCRA 130 [1986]).

Suffice it to say that the other flaws claimed by the petitioners which allegedly invalidated the 1952
deed of sale have not been raised before the trial court nor before the appellate court. It is settled
jurisprudence that an issue which was neither averred in the complaint nor raised during the trial in the
court below cannot be raised for the first time on appeal as it would be offensive to the basic rules of
fair play, justice and due process. (Matienzo v. Servidad, 107 SCRA 276 [1981]; Dela Santa v. C.A.,
140 SCRA 44 [1985]; Dihiansan v. C.A., 157 SCRA 434 [1987]; Anchuelo v. IAC, 147 SCRA 434
[1987]; Dulos Realty and Development Corporation v. C.A., 157 SCRA [1988]; Kamos v. IAC, G.R.
No. 78282, July 5, 1989).

Petitioners aver that the 1/2 share of interest of Teodorica (mother of Ricardo) in Lot 2476 under OCT
No. 7610 was not included in the deed of sale as it was intended to limit solely to Ricardos'
proportionate share out of the undivided 1/2 of the area pertaining to the six (6) brothers and sisters
listed in the Title and that the Deed did not include the share of Ricardo, as inheritance from Teodorica,
because the Deed did not recite that she was deceased at the time it was executed (Rollo, pp. 67-68).

The hereditary share in a decedents' estate is transmitted or vested immediately from the moment of the
death of the "causante" or predecessor in interest (Civil Code of the Philippines, Art. 777), and there is
no legal bar to a successor (with requisite contracting capacity) disposing of his hereditary share
immediately after such death, even if the actual extent of such share is not determined until the
subsequent liquidation of the estate (De Borja v. Vda. de Borja, 46 SCRA 577 [1972]).

Teodorica Babangha died long before World War II, hence, the rights to the succession were
transmitted from the moment of her death. It is therefore incorrect to state that it was only in 1966, the
date of extrajudicial partition, when Ricardo received his share in the lot as inheritance from his mother
Teodorica. Thus, when Ricardo sold his share over lot 2476 that share which he inherited from
Teodorica was also included unless expressly excluded in the deed of sale.

Petitioners contend that Ricardo's share from Teodorica was excluded in the sale considering that a
paragraph of the aforementioned deed refers merely to the shares of Ricardo and Eustaquio (Rollo, p.
67-68).

It is well settled that laws and contracts shall be so construed as to harmonize and give effect to the
different provisions thereof (Reparations Commission v. Northern Lines, Inc., 34 SCRA 203 [1970]),
to ascertain the meaning of the provisions of a contract, its entirety must be taken into account (Ruiz v.
Sheriff of Manila, 34 SCRA 83 [1970]). The interpretation insisted upon by the petitioners, by citing
only one paragraph of the deed of sale, would not only create contradictions but also, render
meaningless and set at naught the entire provisions thereof.

Petitioners claim that DELCOR's action is barred by laches considering that the petitioners have
remained in the actual, open, uninterrupted and adverse possession thereof until at present (Rollo, p.
17).

An instrument notarized by a notary public as in the case at bar is a public instrument (Eacnio v. Baens,
5 Phil. 742). The execution of a public instrument is equivalent to the delivery of the thing (Art. 1498,
1st Par., Civil Code) and is deemed legal delivery. Hence, its execution was considered a sufficient
delivery of the property (Buencamino v. Viceo, 13 Phil. 97; [1906]; Puato v. Mendoza, 64 Phil. 457
[1937]; Vda. de Sarmiento v. Lesaca, 108 Phil. 900 [1960]; Phil. Suburban Development Corp. v.
Auditor Gen., 63 SCRA 397 (1975]).

Besides, the property sold is a registered land. It is the act of registration that transfers the ownership of
the land sold. (GSIS v. C.A., G.R. No. 42278, January 20, 1989). If the property is a registered land,
the purchaser in good, faith has a right to rely on the certificate of title and is under no duty to go
behind it to look for flaws (Mallorca v. De Ocampo, No. L-26852, March 25, 1970; Unchuan v. C.A.,
161 SCRA 710 [1988]; Nuguid v. CA-G.R. No. 77427, March 13, 1989).

Under the established principles of land registration law, the person dealing with registered land may
generally rely on the correctness of its certificate of title and the law will in no way oblige him to go
behind the certificate to determine the condition of the property (Tiongco v. de la Merced, L-2446, July
25, 1974; Lopez vs. CA., G.R. No. 49739, January 20, 1989; Davao Grains Inc. vs. IAC, 171 SCRA
612 [1989]). This notwithstanding, DELCOR did more than that. It did not only rely on the certificate
of title. The Court of Appeals found that it had first investigated and checked the title (T.C.T. No.
T-1183) in the name of Luis Lancero. It likewise inquired into the Subdivision Plan, the corresponding
technical description and the deed of sale executed by Ricardo Gevero in favor of Luis Lancero and
found everything in order. It even went to the premises and found Luis Lancero to be in possession of
the land to the exclusion of any other person. DELCOR had therefore acted in good faith in purchasing
the land in question.

Consequently, DELCOR's action is not barred by laches.

The main issues having been disposed of, discussion of the other issues appear unnecessary.

PREMISES CONSIDERED, the instant petition is hereby DISMISSED and the decision of the Court
of Appeals is hereby AFFIRMED.

SO ORDERED.

Melencio-Herrera (Chairman), Padilla and Regalado, JJ., concur.

Sarmiento, J., is on leave.

G.R. No. 89783 February 19, 1992

MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN, AUREA B. LOCSIN,

MATILDE L. CORDERO, SALVADOR B. LOCSIN and MANUEL V. DEL ROSARIO,
petitioners,

vs.

THE HON. COURT OF APPEALS, JOSE JAUCIAN, FLORENTINO JAUCIAN, MERCEDES

JAUCIAN ARBOLEDA, HEIRS OF JOSEFINA J. BORJA, HEIRS OF EDUARDO JAUCIAN
and HEIRS OF VICENTE JAUCIAN, respondents.

Aytona Law Office and Siquia Law Offices for petitioners.

Mabella, Sangil & Associates for private respondents.

NARVASA, C.J.:

Reversal of the decision of the Court of Appeals in CA-G.R. No. CV-11186 — affirming with
modification the judgment of the Regional Trial Court of Albay in favor of the plaintiffs in Civil Case
No. 7152 entitled "Jose Jaucian, et al. v. Mariano B. Locsin, et al.," an action for recovery of real
property with damages — is sought. in these proceedings initiated by petition for review on certiorari
in accordance with Rule 45 of the Rules of Court.

The petition was initially denied due course and dismissed by this Court. It was however reinstated
upon a second motion for reconsideration filed by the petitioners, and the respondents were required to
comment thereon. The petition was thereafter given due course and the parties were directed to submit
their memorandums. These, together with the evidence, having been carefully considered, the Court
now decides the case.

First, the facts as the Court sees them in light of the evidence on record:

The late Getulio Locsin had three children named Mariano, Julian and Magdalena, all surnamed Locsin.
He owned extensive residential and agricultural properties in the provinces of Albay and Sorsogon.
After his death, his estate was divided among his three (3) children as follows:

(a) the coconut lands of some 700 hectares in Bual, Pilar, Sorsogon, were adjudicated to his daughter,
Magdalena Locsin;

(b) 106 hectares of coconut lands were given to Julian Locsin, father of the petitioners Julian,
Mariano, Jose, Salvador, Matilde, and Aurea, all surnamed Locsin;

(c) more than forty (40) hectares of coconut lands in Bogtong, eighteen (18) hectares of riceland in
Daraga, and the residential lots in Daraga, Albay and in Legazpi City went to his son Mariano, which
Mariano brought into his marriage to Catalina Jaucian in 1908. Catalina, for her part, brought into the
marriage untitled properties which she had inherited from her parents, Balbino Jaucian and Simona
Anson. These were augmented by other properties acquired by the spouses in the course of their
union,1 which however was not blessed with children.

Eventually, the properties of Mariano and Catalina were brought under the Torrens System. Those that
Mariano inherited from his father, Getulio Locsin, were surveyed cadastrally and registered in the
name of "Mariano Locsin, married to Catalina Jaucian.'' 2
Mariano Locsin executed a Last Will and Testament instituting his wife, Catalina, as the sole and
universal heir of all his properties. 3 The will was drawn up by his wife's nephew and trusted legal
adviser, Attorney Salvador Lorayes. Attorney Lorayes disclosed that the spouses being childless, they
had agreed that their properties, after both of them shall have died should revert to their respective
sides of the family, i.e., Mariano's properties would go to his "Locsin relatives" (i.e., brothers and
sisters or nephews and nieces), and those of Catalina to her "Jaucian relatives." 4

Don Mariano Locsin died of cancer on September 14, 1948 after a lingering illness. In due time, his
will was probated in Special Proceedings No. 138, CFI of Albay without any opposition from both
sides of the family. As directed in his will, Doña Catalina was appointed executrix of his estate. Her
lawyer in the probate proceeding was Attorney Lorayes. In the inventory of her husband's estate 5
which she submitted to the probate court for approval, 6 Catalina declared that "all items mentioned
from Nos. 1 to 33 are the private properties of the deceased and form part of his capital at the time of
the marriage with the surviving spouse, while items Nos. 34 to 42 are conjugal." 7

Among her own and Don Mariano's relatives, Doña Catalina was closest to her nephew, Attorney
Salvador Lorayes, her nieces, Elena Jaucian, Maria Lorayes-Cornelio and Maria Olbes-Velasco, and
the husbands of the last two: Hostilio Cornelio and Fernando Velasco. 8 Her trust in Hostilio Cornelio
was such that she made him custodian of all the titles of her properties; and before she disposed of any
of them, she unfailingly consulted her lawyer-nephew, Attorney Salvador Lorayes. It was Atty.
Lorayes who prepared the legal documents and, more often than not, the witnesses to the transactions
were her niece Elena Jaucian, Maria Lorayes-Cornelio, Maria Olbes-Velasco, or their husbands. Her
niece, Elena Jaucian, was her life-long companion in her house.

Don Mariano relied on Doña Catalina to carry out the terms of their compact, hence, nine (9) years
after his death, as if in obedience to his voice from the grave, and fully cognizant that she was also
advancing in years, Doña Catalina began transferring, by sale, donation or assignment, Don Mariano's
as well as her own, properties to their respective nephews and nieces. She made the following sales and
donation of properties which she had received from her husband's estate, to his Locsin nephews and
nieces:

EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE WITNESSES

23 Jan. 26, 1957 Deed of Absolute Sale in 962 P 481

favor of Mariano Locsin

1-JRL Apr. 7, 1966 Deed of Sale in favor of 430,203 P 20,000

Jose R. Locsin

1-JJL Mar. 22, 1967 Deed of Sale in favor of 5,000 P 1,000 Hostilio Cornello

Julian Locsin (Lot 2020) Helen M. Jaucian

1 Nov. 29, 1974 Deed of Donation in 26,509

favor Aurea Locsin,

Matilde L. Cordero

and Salvador Locsin

2 Feb. 4, 1975 Deed of Donation in 34,045

favor Aurea Locsin,

Matilde L. Cordero

and Salvador Locsin

3 Sept. 9, 1975 Deed of Donation in (Lot 2059)

favor Aurea Locsin,

Matilde L. Cordero

and Salvador Locsin

4 July 15, 1974 Deed of Absolute Sale in 1,424 Hostilio Cornelio

favor of Aurea B. Locsin Fernando Velasco

5 July 15, 1974 Deed of Absolute Sale in 1,456 P 5,750 Hostilio Cornelio

favor of Aurea B. Locsin Elena Jaucian

6 July 15, 1974 Deed of Absolute Sale in 1,237 P 5,720 - ditto -

favor of Aurea B. Locsin

7 July 15, 1974 Deed of Absolute Sale in 1,404 P 4,050 - ditto -

favor of Aurea B. Locsin

15 Nov. 26, 1975 Deed of Sale in favor of 261 P 4,930 - ditto -

Aurea Locsin

16 Oct. 17, 1975 Deed of Sale in favor of 533 P 2,000 Delfina Anson

Aurea Locsin M. Acabado

17 Nov. 26, 1975 Deed of Sale in favor of 373 P 1,000 Leonor Satuito

Aurea Locsin Mariano B. Locsin

19 Sept. 1, 1975 Conditional Donation in 1,130 P 3,000 - ditto -

favor of Mariano Locsin

1-MVRJ Dec. 29, 1972 Deed of Reconveyance 1,5110.66 P 1,000 Delfina Anson

in favor of Manuel V. del (Lot 2155) Antonio Illegible

Rosario whose maternal

grandfather was Getulio

Locsin

2-MVRJ June 30, 1973 Deed of Reconveyance 319.34 P 500 Antonio Illegible

in favor of Manuel V. del (Lot 2155) Salvador Nical

Rosario but the rentals

from bigger portion of

Lot 2155 leased to Filoil

Refinery were assigned to

Maria Jaucian Lorayes

Cornelio

Of her own properties, Doña Catalina conveyed the following to her own nephews and nieces and
others:

EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE

2-JJL July 16, 1964 Deed of Sale in favor 5,000 P 1,000

Vicente Jaucian (lot 2020)

(6,825 sqm. when

resurveyed)

24 Feb. 12, 1973 Deed of Absolute Sale 100 P 1,000

in favor of Francisco M.

Maquiniana

26 July 15, 1973 Deed of Absolute Sale in 130 P 1,300

favor of Francisco
Maquiniana

27 May 3, 1973 Deed of Absolute Sale in 100 P 1,000

favor of Ireneo Mamia

28 May 3, 1973 Deed of Absolute Sale in 75 P 750

favor of Zenaida Buiza

29 May 3, 1973 Deed of Absolute Sale in 150 P 1,500

favor of Felisa Morjella

30 Apr. 3, 1973 Deed of Absolute Sale in 31 P 1,000

favor of Inocentes Motocinos

31 Feb. 12, 1973 Deed of Absolute Sale in 150 P 1,500

favor of Casimiro Mondevil

32 Mar. 1, 1973 Deed of Absolute Sale in 112 P 1,200

favor of Juan Saballa

25 Dec. 28, 1973 Deed of Absolute Sale in 250 P 2,500

of Rogelio Marticio

Doña Catalina died on July 6, 1977.

Four years before her death, she had made a will on October 22, 1973 affirming and ratifying the
transfers she had made during her lifetime in favor of her husband's, and her own, relatives. After the
reading of her will, all the relatives agreed that there was no need to submit it to the court for probate
because the properties devised to them under the will had already been conveyed to them by the
deceased when she was still alive, except some legacies which the executor of her will or estate,
Attorney Salvador Lorayes, proceeded to distribute.

In 1989, or six (6) years after Doña Catalina's demise, some of her Jaucian nephews and nieces who
had already received their legacies and hereditary shares from her estate, filed action in the Regional
Trial Court of Legaspi City (Branch VIII, Civil Case No. 7152) to recover the properties which she had
conveyed to the Locsins during her lifetime, alleging that the conveyances were inofficious, without
consideration, and intended solely to circumvent the laws on succession. Those who were closest to
Doña Catalina did not join the action.
After the trial, judgment was rendered on July 8, l985 in favor of the plaintiffs (Jaucian), and against
the Locsin defendants, the dispositive part of which reads:

WHEREFORE, this Court renders judgment for the plaintiffs and against the defendants:

(1) declaring the, plaintiffs, except the heirs of Josefina J. Borja and Eduardo Jaucian, who withdrew,
the rightful heirs and entitled to the entire estate, in equal portions, of Catalina Jaucian Vda. de Locsin,
being the nearest collateral heirs by right of representation of Juan and Gregorio, both surnamed
Jaucian, and full-blood brothers of Catalina;

(2) declaring the deeds of sale, donations, reconveyance and exchange and all other instruments
conveying any part of the estate of Catalina J. Vda. de Locsin including, but not limited to those in the
inventory of known properties (Annex B of the complaint) as null and void ab-initio;

(3) ordering the Register of Deeds of Albay and/or Legazpi City to cancel all certificates of title and
other transfers of the real properties, subject of this case, in the name of defendants, and derivatives
therefrom, and issue new ones to the plaintiffs;

(4) ordering the defendants, jointly and severally, to reconvey ownership and possession of all such
properties to the plaintiffs, together with all muniments of title properly endorsed and delivered, and all
the fruits and incomes received by the defendants from the estate of Catalina, with legal interest from
the filing of this action; and where reconveyance and delivery cannot be effected for reasons that might
have intervened and prevent the same, defendants shall pay for the value of such properties, fruits and
incomes received by them, also with legal interest from the filing, of this case

(5) ordering each of the defendants to pay the plaintiffs the amount of P30,000.00 as exemplary
damages; and the further sum of P20,000.00 each as moral damages; and

(6) ordering the defendants to pay the plaintiffs attorney's fees and litigation expenses, in the amount
of P30,000.00 without prejudice to any contract between plaintiffs and counsel.

Costs against the defendants.9

The Locsins appealed to the Court of Appeals (CA-G.R. No. CV-11186) which rendered its now
appealed judgment on March 14, 1989, affirming the trial court's decision.

The petition has merit and should be granted.

The trial court and the Court of Appeals erred in declaring the private respondents, nephews and nieces
of Doña Catalina J. Vda. de Locsin, entitled to inherit the properties which she had already disposed of
more than ten (10) years before her death. For those properties did not form part of her hereditary estate,
i.e., "the property and transmissible rights and obligations existing at the time of (the decedent's) death
and those which have accrued thereto since the opening of the succession." 10 The rights to a person's
succession are transmitted from the moment of his death, and do not vest in his heirs until such time.11
Property which Doña Catalina had transferred or conveyed to other persons during her lifetime no
longer formed part of her estate at the time of her death to which her heirs may lay claim. Had she died
intestate, only the property that remained in her estate at the time of her death devolved to her legal
heirs; and even if those transfers were, one and all, treated as donations, the right arising under certain
circumstances to impugn and compel the reduction or revocation of a decedent's gifts inter vivos does
not inure to the respondents since neither they nor the donees are compulsory (or forced) heirs. 12

There is thus no basis for assuming an intention on the part of Doña Catalina, in transferring the
properties she had received from her late husband to his nephews and nieces, an intent to circumvent
the law in violation of the private respondents' rights to her succession. Said respondents are not her
compulsory heirs, and it is not pretended that she had any such, hence there were no legitimes that
could conceivably be impaired by any transfer of her property during her lifetime. All that the
respondents had was an expectancy that in nowise restricted her freedom to dispose of even her entire
estate subject only to the limitation set forth in Art. 750, Civil Code which, even if it were breached,
the respondents may not invoke:

Art. 750. The donation may comprehend all the present property of the donor or part thereof, provided
he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all
relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the
donor. Without such reservation, the donation shall be reduced on petition of any person affected.
(634a)

The lower court capitalized on the fact that Doña Catalina was already 90 years old when she died on
July 6, 1977. It insinuated that because of her advanced years she may have been imposed upon, or
unduly influenced and morally pressured by her husband's nephews and nieces (the petitioners) to
transfer to them the properties which she had inherited from Don Mariano's estate. The records do not
support that conjecture.

For as early as 1957, or twenty-eight (28) years before her death, Doña Catalina had already begun
transferring to her Locsin nephews and nieces the properties which she received from Don Mariano.
She sold a 962-sq.m. lot on January 26, 1957 to his nephew and namesake Mariano Locsin II. 13 On
April 7, 1966, or 19 years before she passed away, she also sold a 43 hectare land to another Locsin
nephew, Jose R. Locsin.14 The next year, or on March 22, 1967, she sold a 5,000-sq.m. portion of Lot
2020 to Julian Locsin.15

On March 27, 1967, Lot 2020 16 was partitioned by and among Doña Catalina, Julian Locsin, Vicente
Jaucian and Agapito Lorete.17 At least Vicente Jaucian, among the other respondents in this case, is
estopped from assailing the genuineness and due execution of the sale of portions of Lot 2020 to
himself, Julian Locsin, and Agapito Lorete, and the partition agreement that he (Vicente) concluded
with the other co-owners of Lot 2020.

Among Doña, Catalina's last transactions before she died in 1977 were the sales of property which she
made in favor of Aurea Locsin and Mariano Locsin in 1975.18
There is not the slightest suggestion in the record that Doña Catalina was mentally incompetent when
she made those dispositions. Indeed, how can any such suggestion be made in light of the fact that even
as she was transferring properties to the Locsins, she was also contemporaneously disposing of her
other properties in favor of the Jaucians? She sold to her nephew, Vicente Jaucian, on July 16, 1964 (21
years before her death) one-half (or 5,000 sq.m.) of Lot 2020. Three years later, or on March 22, 1967,
she sold another 5000 sq.m. of the same lot to Julian Locsin.19

From 1972 to 1973 she made several other transfers of her properties to her relatives and other persons,
namely: Francisco Maquiniana, Ireneo Mamia, Zenaida Buiza, Feliza Morjella, Inocentes Motocinos,
Casimiro Mondevil, Juan Saballa and Rogelio Marticio. 20 None of those transactions was impugned
by the private respondents.

In 1975, or two years before her death, Doña Catalina sold some lots not only to Don Mariano's niece,
Aurea Locsin, and his nephew, Mariano Locsin

II, 21 but also to her niece, Mercedes Jaucian Arboleda. 22 If she was competent to make that
conveyance to Mercedes, how can there be any doubt that she was equally competent to transfer her
other pieces of property to Aurea and Mariano II?

The trial court's belief that Don Mariano Locsin bequeathed his entire estate to his wife, from a
"consciousness of its real origin" which carries the implication that said estate consisted of properties
which his wife had inherited from her parents, flies in the teeth of Doña Catalina's admission in her
inventory of that estate, that "items 1 to 33 are the private properties of the deceased (Don Mariano)
and forms (sic) part of his capital at the time of the marriage with the surviving spouse, while items 34
to 42 are conjugal properties, acquired during the marriage." She would have known better than anyone
else whether the listing included any of her paraphernal property so it is safe to assume that none was
in fact included. The inventory was signed by her under oath, and was approved by the probate court in
Special Proceeding No. 138 of the Court of First Instance of Albay. It was prepared with the assistance
of her own nephew and counsel, Atty. Salvador Lorayes, who surely would not have prepared a false
inventory that would have been prejudicial to his aunt's interest and to his own, since he stood to inherit
from her eventually.

This Court finds no reason to disbelieve Attorney Lorayes' testimony that before Don Mariano died, he
and his wife (Doña Catalina), being childless, had agreed that their respective properties should
eventually revert to their respective lineal relatives. As the trusted legal adviser of the spouses and a
full-blood nephew of Doña Catalina, he would not have spun a tale out of thin air that would also
prejudice his own interest.

Little significance, it seems, has been attached to the fact that among Doña Catalina's nephews and
nieces, those closest to her: (a) her lawyer-nephew Attorney Salvador Lorayes; (b) her niece and
companion Elena Jaucian: (c) her nieces Maria Olbes-Velasco and Maria Lorayes-Cornelio and their
respective husbands, Fernando Velasco and Hostilio Cornelio, did not join the suit to annul and undo
the dispositions of property which she made in favor of the Locsins, although it would have been to
their advantage to do so. Their desistance persuasively demonstrates that Doña Catalina acted as a
completely free agent when she made the conveyances in favor of the petitioners. In fact, considering
their closeness to Doña Catalina it would have been well-nigh impossible for the petitioners to employ
"fraud, undue pressure, and subtle manipulations" on her to make her sell or donate her properties to
them. Doña Catalina's niece, Elena Jaucian, daughter of her brother, Eduardo Jaucian, lived with her in
her house. Her nephew-in-law, Hostilio Cornelio, was the custodian of the titles of her properties. The
sales and donations which she signed in favor of the petitioners were prepared by her trusted legal
adviser and nephew, Attorney Salvador Lorayes. The (1) deed of donation dated November 19,

197423 in favor of Aurea Locsin, (2) another deed of donation dated February 4, 1975 24 in favor of
Matilde Cordero, and (3) still another deed dated September 9, 1975 25 in favor of Salvador Lorayes,
were all witnessed by Hostilio Cornelio (who is married to Doña Catalina's niece, Maria Lorayes) and
Fernando Velasco who is married to another niece, Maria Olbes.26 The sales which she made in favor
of Aurea Locsin on July 15, 1974 27 were witnessed by Hostilio Cornelio and Elena Jaucian. Given
those circumstances, said transactions could not have been anything but free and voluntary acts on her
part.

Apart from the foregoing considerations, the trial court and the Court of Appeals erred in not
dismissing this action for annulment and reconveyance on the ground of prescription. Commenced
decades after the transactions had been consummated, and six (6) years after Doña Catalina's death, it
prescribed four (4) years after the subject transactions were recorded in the Registry of Property,28
whether considered an action based on fraud, or one to redress an injury to the rights of the plaintiffs.
The private respondents may not feign ignorance of said transactions because the registration of the
deeds was constructive notice thereof to them and the whole world.29

WHEREFORE, the petition for review is granted. The decision dated March 14, 1989 of the Court of
Appeals in CA-G.R. CV No. 11186 is REVERSED and SET ASIDE. The private respondents'
complaint for annulment of contracts and reconveyance of properties in Civil Case No. 7152 of the
Regional Trial Court, Branch VIII of Legazpi City, is DISMISSED, with costs against the private
respondents, plaintiffs therein.

SO ORDERED.

Cruz, Griño-Aquino and Medialdea, JJ., concur.

[G.R. No. 125835. July 30, 1998]

NATALIA CARPENA OPULENCIA, petitioner, vs. COURT OF APPEALS, ALADIN

SIMUNDAC and MIGUEL OLIVAN, respondents.

DECISION

PANGANIBAN, J.

Is a contract to sell a real property involved in testate proceedings valid and binding without the
approval of the probate court?

Statement of the Case

This is the main question raised in this petition for review before us, assailing the Decision[1] of the
Court of Appeals[2] in CA-GR CV No. 41994 promulgated on February 6, 1996 and its Resolution[3]
dated July 19, 1996. The challenged Decision disposed as follows:

WHEREFORE, premises considered, the order of the lower court dismissing the complaint is SET
ASIDE and judgment is hereby rendered declaring the CONTRACT TO SELL executed by appellee in
favor of appellants as valid and binding, subject to the result of the administration proceedings of the
testate Estate of Demetrio Carpena.

SO ORDERED. [4]

Petitioners Motion for Reconsideration was denied in the challenged Resolution.[5]

The Facts

The antecedent facts, as succinctly narrated by Respondent Court of Appeals are:

In a complaint for specific performance filed with the court a quo [herein private respondents] Aladin
Simundac and Miguel Oliven alleged that [herein petitioner] Natalia Carpena Opulencia executed in
their favor a CONTRACT TO SELL Lot 2125 of the Sta. Rosa Estate, consisting of 23,766 square
meters located in Sta. Rosa, Laguna at P150.00 per square meter; that plaintiffs paid a downpayment of
P300,000.00 but defendant, despite demands, failed to comply with her obligations under the contract.
[Private respondents] therefore prayed that [petitioner] be ordered to perform her contractual
obligations and to further pay damages, attorneys fee and litigation expenses.

In her traverse, [petitioner] admitted the execution of the contract in favor of plaintiffs and receipt of
P300,000.00 as downpayment. However, she put forward the following affirmative defenses: that the
property subject of the contract formed part of the Estate of Demetrio Carpena (petitioners father), in
respect of which a petition for probate was filed with the Regional Trial Court, Branch 24, Bian,
Laguna; that at the time the contract was executed, the parties were aware of the pendency of the
probate proceeding; that the contract to sell was not approved by the probate court; that realizing the
nullity of the contract [petitioner] had offered to return the downpayment received from [private
respondents], but the latter refused to accept it; that [private respondents] further failed to provide
funds for the tenant who demanded P150,00.00 in payment of his tenancy rights on the land; that
[petitioner] had chosen to rescind the contract.

At the pre-trial conference the parties stipulated on [sic] the following facts:

1. That on February 3, 1989, [private respondents] and [petitioner] entered into a contract to sell
involving a parcel of land situated in Sta. Rosa, Laguna, otherwise known as Lot No. 2125 of the Sta.
Rosa Estate.
2. That the price or consideration of the said sell [sic] is P150.00 per square meters;

3. That the amount of P300,000.00 had already been received by [petitioner];

4. That the parties have knowledge that the property subject of the contract to sell is subject of the
probate proceedings;

5. That [as] of this time, the probate Court has not yet issued an order either approving or denying the
said sale. (p. 3, appealed Order of September 15, 1992, pp. 109-112, record).

[Private respondents] submitted their evidence in support of the material allegations of the complaint.
In addition to testimonies of witnesses, [private respondents] presented the following documentary
evidences: (1) Contract to Sell (Exh A); (2) machine copy of the last will and testament of Demetrio
Carpena (defendants father) to show that the property sold by defendant was one of those devised to
her in said will (Exh B); (3) receipts signed by defendant for the downpayment in the total amount of
P300,000.00 (Exhs C, D & E); and (4) demand letters sent to defendant (Exhs F & G).

It appears that [petitioner], instead of submitting her evidence, filed a Demurrer to Evidence. In essence,
defendant maintained that the contract to sell was null and void for want of approval by the probate
court. She further argued that the contract was subject to a suspensive condition, which was the probate
of the will of defendants father Demetrio Carpena. An Opposition was filed by [private respondents]. It
appears further that in an Order dated December 15, 1992 the court a quo granted the demurrer to
evidence and dismissed the complaint. It justified its action in dismissing the complaint in the
following manner:

It is noteworthy that when the contract to sell was consummated, no petition was filed in the Court with
notice to the heirs of the time and place of hearing, to show that the sale is necessary and beneficial. A
sale of properties of an estate as beneficial to the interested parties must comply with the requisites
provided by law, (Sec. 7, Rule 89, Rules of Court) which are mandatory, and without them, the
authority to sell, the sale itself, and the order approving it, would be null and void ab initio. (Arcilla vs.
David, 77 Phil. 718, Gabriel, et al., vs. Encarnacion, et al., L-6736, May 4, 1954; Bonaga vs. Soler, 2
Phil. 755) Besides, it is axiomatic that where the estate of a deceased person is already the subject of a
testate or intestate proceeding, the administrator cannot enter into any transaction involving it without
prior approval of the probate Court. (Estate of Obave, vs. Reyes, 123 SCRA 767).

As held by the Supreme Court, a decedents representative (administrator) is not estopped from
questioning the validity of his own void deed purporting to convey land. (Bona vs. Soler, 2 Phil, 755).
In the case at bar, the [petitioner,] realizing the illegality of the transaction[,] has interposed the nullity
of the contract as her defense, there being no approval from the probate Court, and, in good faith offers
to return the money she received from the [private respondents]. Certainly, the administratrix is not
estop[ped] from doing so and the action to declare the inexistence of contracts do not prescribe. This is
what precipitated the filing of [petitioners] demurrer to evidence.[6]

The trial courts order of dismissal was elevated to the Court of Appeals by private respondents who
alleged:
1. The lower court erred in concluding that the contract to sell is null and void, there being no approval
of the probate court.

2. The lower court erred in concluding that [petitioner] in good faith offers to return the money to
[private respondents].

3. The lower court erred in concluding that [petitioner] is not under estoppel to question the validity of
the contract to sell.

4. The lower court erred in not ruling on the consideration of the contract to sell which is tantamount to
plain unjust enrichment of [petitioner] at the expense of [private respondents].[7]

Public Respondents Ruling

Declaring the Contract to Sell valid, subject to the outcome of the testate proceedings on Demetrio
Carpenas estate, the appellate court set aside the trial courts dismissal of the complaint and correctly
ruled as follows:

It is apparent from the appealed order that the lower court treated the contract to sell executed by
appellee as one made by the administratrix of the Estate of Demetrio Carpena for the benefit of the
estate. Hence, its main reason for voiding the contract in question was the absence of the probate courts
approval. Presumably, what the lower court had in mind was the sale of the estate or part thereof made
by the administrator for the benefit of the estate, as authorized under Rule 89 of the Revised Rules of
Court, which requires the approval of the probate court upon application therefor with notice to the
heirs, devisees and legatees.

However, as adverted to by appellants in their brief, the contract to sell in question is not covered by
Rule 89 of the Revised Rules of Court since it was made by appellee in her capacity as an heir, of a
property that was devised to her under the will sought to be probated. Thus, while the document
inadvertently stated that appellee executed the contract in her capacity as executrix and administratrix
of the estate, a cursory reading of the entire text of the contract would unerringly show that what she
undertook to sell to appellants was one of the other properties given to her by her late father, and more
importantly, it was not made for the benefit of the estate but for her own needs. To illustrate this point,
it is apropos to refer to the preambular or preliminary portion of the document, which reads:

WHEREAS, the SELLER is the lawful owner of a certain parcel of land, which is more particularly
described as follows:

xxxxxxxxx

xxxxxxxxx
xxxxxxxxx

WHEREAS, the SELLER suffers difficulties in her living and has forced to offer the sale of the
above-described property, which property was only one among the other properties given to her by her
late father, to anyone who can wait for complete clearance of the court on the Last Will Testament of
her father.

WHEREAS, the SELLER in order to meet her need of cash, has offered for sale the said property at
ONE HUNDRED FIFTY PESOS (150.00) Philippine Currency, per square meter unto the BUYERS,
and with this offer, the latter has accepted to buy and/or purchase the same, less the area for the road
and other easements indicated at the back of Transfer Certificate of Title No. 2125 duly confirmed after
the survey to be conducted by the BUYERs Licensed Geodetic Engineer, and whatever area [is] left.
(Emphasis added).

To emphasize, it is evident from the foregoing clauses of the contract that appellee sold Lot 2125 not in
her capacity as executrix of the will or administratrix of the estate of her father, but as an heir and more
importantly as owner of said lot which, along with other properties, was devised to her under the will
sought to be probated. That being so, the requisites stipulated in Rule 89 of the Revised Rules of Court
which refer to a sale made by the administrator for the benefit of the estate do not apply.

xxxxxxxxx

It is noteworthy that in a Manifestation filed with this court by appellants, which is not controverted by
appellee, it is mentioned that the last will and testament of Demetrio Carpena was approved in a final
judgment rendered in Special Proceeding No. B-979 by the Regional Trial Court, Branch 24 Binan,
Laguna. But of course such approval does not terminate the proceeding[s] since the settlement of the
estate will ensue. Such proceedings will consist, among others, in the issuance by the court of a notice
to creditors (Rule 86), hearing of money claims and payment of taxes and estate debts (Rule 88) and
distribution of the residue to the heirs or persons entitled thereto (Rule 90). In effect, the final execution
of the deed of sale itself upon appellants payment of the balance of the purchase price will have to wait
for the settlement or termination of the administration proceedings of the Estate of Demetrio Carpena.
Under the foregoing premises, what the trial court should have done with the complaint was not to
dismiss it but to simply put on hold further proceedings until such time that the estate or its residue will
be distributed in accordance with the approved will.

The rule is that when a demurrer to the evidence is granted by the trial court but reversed on appeal,
defendant loses the right to adduce his evidence. In such a case, the appellate court will decide the
controversy on the basis of plaintiffs evidence. In the case at bench, while we find the contract to sell
valid and binding between the parties, we cannot as yet order appellee to perform her obligations under
the contract because the result of the administration proceedings of the testate Estate of Demetrio
Carpena has to be awaited. Hence, we shall confine our adjudication to merely declaring the validity of
the questioned Contract to Sell.

Hence, this appeal.[8]

The Issue

Petitioner raises only one issue:

Whether or not the Contract to Sell dated 03 February 1989 executed by the [p]etitioner and [p]rivate
[r]espondent[s] without the requisite probate court approval is valid.

The Courts Ruling

The petition has no merit.

Contract to Sell Valid

In a nutshell, petitioner contends that where the estate of the deceased person is already the subject of a
testate or intestate proceeding, the administrator cannot enter into any transaction involving it without
prior approval of the Probate Court.[9] She maintains that the Contract to Sell is void because it was
not approved by the probate court, as required by Section 7, Rule 89 of the Rules of Court:

SEC. 7. Regulations for granting authority to sell, mortgage, or otherwise encumber estate. The court
having jurisdiction of the estate of the deceased may authorize the executor or administrator to sell,
mortgage, or otherwise encumber real estate, in cases provided by these rules and when it appears
necessary or beneficial, under the following regulations:

xxx

Insisting that the above rule should apply to this case, petitioner argues that the stipulations in the
Contract to Sell require her to act in her capacity as an executrix or administratrix. She avers that her
obligation to eject tenants pertains to the administratrix or executrix, the estate being the landlord of the
said tenants.[10] Likewise demonstrating that she entered into the contract in her capacity as executor
is the stipulation that she must effect the conversion of subject land from irrigated rice land to
residential land and secure the necessary clearances from government offices. Petitioner alleges that
these obligations can be undertaken only by an executor or administrator of an estate, and not by an
heir.[11]

The Court is not persuaded. As correctly ruled by the Court of Appeals, Section 7 of Rule 89 of the
Rules of Court is not applicable, because petitioner entered into the Contract to Sell in her capacity as
an heiress, not as an executrix or administratrix of the estate. In the contract, she represented herself as
the lawful owner and seller of the subject parcel of land.[12] She also explained the reason for the sale
to be difficulties in her living conditions and consequent need of cash.[13] These representations
clearly evince that she was not acting on behalf of the estate under probate when she entered into the
Contract to Sell. Accordingly, the jurisprudence cited by petitioner has no application to the instant
case.

We emphasize that hereditary rights are vested in the heir or heirs from the moment of the decedents
death.[14] Petitioner, therefore, became the owner of her hereditary share the moment her father died.
Thus, the lack of judicial approval does not invalidate the Contract to Sell, because the petitioner has
the substantive right to sell the whole or a part of her share in the estate of her late father.[15] Thus, in
Jakosalem vs. Rafols,[16] the Court resolved an identical issue under the old Civil Code and held:

Article 440 of the Civil Code provides that the possession of hereditary property is deemed to be
transmitted to the heir without interruption from the instant of the death of the decedent, in case the
inheritance be accepted. And Manresa with reason states that upon the death of a person, each of his
heirs becomes the undivided owner of the whole estate left with respect to the part or portion which
might be adjudicated to him, a community of ownership being thus formed among the coowners of the
estate while it remains undivided. xxx And according to article 399 of the Civil Code, every part owner
may assign or mortgage his part in the common property, and the effect of such assignment or
mortgage shall be limited to the portion which may be allotted him in the partition upon the dissolution
of the community. Hence, where some of the heirs, without the concurrence of the others, sold a
property left by their deceased father, this Court, speaking thru its then Chief Justice Cayetano Arellano,
said that the sale was valid, but that the effect thereof was limited to the share which may be allotted to
the vendors upon the partition of the estate.

Administration of the Estate Not Prejudiced by the Contract to Sell

Petitioner further contends that [t]o sanction the sale at this stage would bring about a partial
distribution of the decedents estate pending the final termination of the testate proceedings.[17] This
becomes all the more significant in the light of the trial courts finding, as stated in its Order dated
August 20, 1997, that the legitime of one of the heirs has been impaired.[18]

Petitioners contention is not convincing. The Contract to Sell stipulates that petitioners offer to sell is
contingent on the complete clearance of the court on the Last Will Testament of her father.[19]
Consequently, although the Contract to Sell was perfected between the petitioner and private
respondents during the pendency of the probate proceedings, the consummation of the sale or the
transfer of ownership over the parcel of land to the private respondents is subject to the full payment of
the purchase price and to the termination and outcome of the testate proceedings. Therefore, there is no
basis for petitioners apprehension that the Contract to Sell may result in a premature partition and
distribution of the properties of the estate. Indeed, it is settled that the sale made by an heir of his share
in an inheritance, subject to the pending administration, in no wise stands in the way of such
administration.[20]

Estoppel

Finally, petitioner is estopped from backing out of her representations in her valid Contract to Sell with
private respondents, from whom she had already received P300,000 as initial payment of the purchase
price. Petitioner may not renege on her own acts and representations, to the prejudice of the private
respondents who have relied on them.[21] Jurisprudence teaches us that neither the law nor the courts
will extricate a party from an unwise or undesirable contract he or she entered into with all the required
formalities and with full awareness of its consequences.[22]

WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals
AFFIRMED. Costs against petitioner.

SO ORDERED.

Davide, Jr., (Chairman), Bellosillo, Vitug, and Quisumbing, JJ., concur.

[G.R. No. 126334. November 23, 2001]

EMILIO EMNACE, petitioner, vs. COURT OF APPEALS, ESTATE OF VICENTE TABANAO,

SHERWIN TABANAO, VICENTE WILLIAM TABANAO, JANETTE TABANAO DEPOSOY,
VICENTA MAY TABANAO VARELA, ROSELA TABANAO and VINCENT TABANAO,
respondents.

DECISION

YNARES-SANTIAGO, J.:

Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were partners in a business
concern known as Ma. Nelma Fishing Industry. Sometime in January of 1986, they decided to dissolve
their partnership and executed an agreement of partition and distribution of the partnership properties
among them, consequent to Jacinto Divinagracias withdrawal from the partnership.[1] Among the
assets to be distributed were five (5) fishing boats, six (6) vehicles, two (2) parcels of land located at
Sto. Nio and Talisay, Negros Occidental, and cash deposits in the local branches of the Bank of the
Philippine Islands and Prudential Bank.

Throughout the existence of the partnership, and even after Vicente Tabanaos untimely demise in 1994,
petitioner failed to submit to Tabanaos heirs any statement of assets and liabilities of the partnership,
and to render an accounting of the partnerships finances. Petitioner also reneged on his promise to turn
over to Tabanaos heirs the deceaseds 1/3 share in the total assets of the partnership, amounting to
P30,000,000.00, or the sum of P10,000,000.00, despite formal demand for payment thereof.[2]

Consequently, Tabanaos heirs, respondents herein, filed against petitioner an action for accounting,
payment of shares, division of assets and damages.[3] In their complaint, respondents prayed as
follows:

1. Defendant be ordered to render the proper accounting of all the assets and liabilities of the
partnership at bar; and
2. After due notice and hearing defendant be ordered to pay/remit/deliver/surrender/yield to the
plaintiffs the following:

A. No less than One Third (1/3) of the assets, properties, dividends, cash, land(s), fishing vessels,
trucks, motor vehicles, and other forms and substance of treasures which belong and/or should belong,
had accrued and/or must accrue to the partnership;

B. No less than Two Hundred Thousand Pesos (P200,000.00) as moral damages;

C. Attorneys fees equivalent to Thirty Percent (30%) of the entire share/amount/award which the
Honorable Court may resolve the plaintiffs as entitled to plus P1,000.00 for every appearance in
court.[4]

Petitioner filed a motion to dismiss the complaint on the grounds of improper venue, lack of
jurisdiction over the nature of the action or suit, and lack of capacity of the estate of Tabanao to sue.[5]
On August 30, 1994, the trial court denied the motion to dismiss. It held that venue was properly laid
because, while realties were involved, the action was directed against a particular person on the basis of
his personal liability; hence, the action is not only a personal action but also an action in personam. As
regards petitioners argument of lack of jurisdiction over the action because the prescribed docket fee
was not paid considering the huge amount involved in the claim, the trial court noted that a request for
accounting was made in order that the exact value of the partnership may be ascertained and, thus, the
correct docket fee may be paid. Finally, the trial court held that the heirs of Tabanao had a right to sue
in their own names, in view of the provision of Article 777 of the Civil Code, which states that the
rights to the succession are transmitted from the moment of the death of the decedent.[6]

The following day, respondents filed an amended complaint,[7] incorporating the additional prayer that
petitioner be ordered to sell all (the partnerships) assets and thereafter pay/remit/deliver/surrender/yield
to the plaintiffs their corresponding share in the proceeds thereof. In due time, petitioner filed a
manifestation and motion to dismiss,[8] arguing that the trial court did not acquire jurisdiction over the
case due to the plaintiffs failure to pay the proper docket fees. Further, in a supplement to his motion to
dismiss,[9] petitioner also raised prescription as an additional ground warranting the outright dismissal
of the complaint.

On June 15, 1995, the trial court issued an Order,[10] denying the motion to dismiss inasmuch as the
grounds raised therein were basically the same as the earlier motion to dismiss which has been denied.
Anent the issue of prescription, the trial court ruled that prescription begins to run only upon the
dissolution of the partnership when the final accounting is done. Hence, prescription has not set in the
absence of a final accounting. Moreover, an action based on a written contract prescribes in ten years
from the time the right of action accrues.

Petitioner filed a petition for certiorari before the Court of Appeals,[11] raising the following issues:

I. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in
taking cognizance of a case despite the failure to pay the required docket fee;
II. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in
insisting to try the case which involve (sic) a parcel of land situated outside of its territorial jurisdiction;

III. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in
allowing the estate of the deceased to appear as party plaintiff, when there is no intestate case and filed
by one who was never appointed by the court as administratrix of the estates; and

IV. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in not
dismissing the case on the ground of prescription.

On August 8, 1996, the Court of Appeals rendered the assailed decision,[12] dismissing the petition for
certiorari, upon a finding that no grave abuse of discretion amounting to lack or excess of jurisdiction
was committed by the trial court in issuing the questioned orders denying petitioners motions to
dismiss.

Not satisfied, petitioner filed the instant petition for review, raising the same issues resolved by the
Court of Appeals, namely:

I. Failure to pay the proper docket fee;

II. Parcel of land subject of the case pending before the trial court is outside the said courts territorial
jurisdiction;

III. Lack of capacity to sue on the part of plaintiff heirs of Vicente Tabanao; and

IV. Prescription of the plaintiff heirs cause of action.

It can be readily seen that respondents primary and ultimate objective in instituting the action below
was to recover the decedents 1/3 share in the partnerships assets. While they ask for an accounting of
the partnerships assets and finances, what they are actually asking is for the trial court to compel
petitioner to pay and turn over their share, or the equivalent value thereof, from the proceeds of the sale
of the partnership assets. They also assert that until and unless a proper accounting is done, the exact
value of the partnerships assets, as well as their corresponding share therein, cannot be ascertained.
Consequently, they feel justified in not having paid the commensurate docket fee as required by the
Rules of Court.

We do not agree. The trial court does not have to employ guesswork in ascertaining the estimated value
of the partnerships assets, for respondents themselves voluntarily pegged the worth thereof at Thirty
Million Pesos (P30,000,000.00). Hence, this case is one which is really not beyond pecuniary
estimation, but rather partakes of the nature of a simple collection case where the value of the subject
assets or amount demanded is pecuniarily determinable.[13] While it is true that the exact value of the
partnerships total assets cannot be shown with certainty at the time of filing, respondents can and must
ascertain, through informed and practical estimation, the amount they expect to collect from the
partnership, particularly from petitioner, in order to determine the proper amount of docket and other
fees.[14] It is thus imperative for respondents to pay the corresponding docket fees in order that the
trial court may acquire jurisdiction over the action.[15]

Nevertheless, unlike in the case of Manchester Development Corp. v. Court of Appeals,[16] where
there was clearly an effort to defraud the government in avoiding to pay the correct docket fees, we see
no attempt to cheat the courts on the part of respondents. In fact, the lower courts have noted their
expressed desire to remit to the court any payable balance or lien on whatever award which the
Honorable Court may grant them in this case should there be any deficiency in the payment of the
docket fees to be computed by the Clerk of Court.[17] There is evident willingness to pay, and the fact
that the docket fee paid so far is inadequate is not an indication that they are trying to avoid paying the
required amount, but may simply be due to an inability to pay at the time of filing. This consideration
may have moved the trial court and the Court of Appeals to declare that the unpaid docket fees shall be
considered a lien on the judgment award.

Petitioner, however, argues that the trial court and the Court of Appeals erred in condoning the
non-payment of the proper legal fees and in allowing the same to become a lien on the monetary or
property judgment that may be rendered in favor of respondents. There is merit in petitioners assertion.
The third paragraph of Section 16, Rule 141 of the Rules of Court states that:

The legal fees shall be a lien on the monetary or property judgment in favor of the pauper-litigant.

Respondents cannot invoke the above provision in their favor because it specifically applies to
pauper-litigants. Nowhere in the records does it appear that respondents are litigating as paupers, and as
such are exempted from the payment of court fees.[18]

The rule applicable to the case at bar is Section 5(a) of Rule 141 of the Rules of Court, which defines
the two kinds of claims as: (1) those which are immediately ascertainable; and (2) those which cannot
be immediately ascertained as to the exact amount. This second class of claims, where the exact
amount still has to be finally determined by the courts based on evidence presented, falls squarely
under the third paragraph of said Section 5(a), which provides:

In case the value of the property or estate or the sum claimed is less or more in accordance with the
appraisal of the court, the difference of fee shall be refunded or paid as the case may be. (Underscoring
ours)

In Pilipinas Shell Petroleum Corporation v. Court of Appeals,[19] this Court pronounced that the
above-quoted provision clearly contemplates an initial payment of the filing fees corresponding to the
estimated amount of the claim subject to adjustment as to what later may be proved.[20] Moreover, we
reiterated therein the principle that the payment of filing fees cannot be made contingent or dependent
on the result of the case. Thus, an initial payment of the docket fees based on an estimated amount must
be paid simultaneous with the filing of the complaint. Otherwise, the court would stand to lose the
filing fees should the judgment later turn out to be adverse to any claim of the respondent heirs.
The matter of payment of docket fees is not a mere triviality. These fees are necessary to defray court
expenses in the handling of cases. Consequently, in order to avoid tremendous losses to the judiciary,
and to the government as well, the payment of docket fees cannot be made dependent on the outcome
of the case, except when the claimant is a pauper-litigant.

Applied to the instant case, respondents have a specific claim 1/3 of the value of all the partnership
assets but they did not allege a specific amount. They did, however, estimate the partnerships total
assets to be worth Thirty Million Pesos (P30,000,000.00), in a letter[21] addressed to petitioner.
Respondents cannot now say that they are unable to make an estimate, for the said letter and the
admissions therein form part of the records of this case. They cannot avoid paying the initial docket
fees by conveniently omitting the said amount in their amended complaint. This estimate can be made
the basis for the initial docket fees that respondents should pay. Even if it were later established that the
amount proved was less or more than the amount alleged or estimated, Rule 141, Section 5(a) of the
Rules of Court specifically provides that the court may refund the excess or exact additional fees
should the initial payment be insufficient. It is clear that it is only the difference between the amount
finally awarded and the fees paid upon filing of this complaint that is subject to adjustment and which
may be subjected to a lien.

In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion,[22] this Court held
that when the specific claim has been left for the determination by the court, the additional filing fee
therefor shall constitute a lien on the judgment and it shall be the responsibility of the Clerk of Court or
his duly authorized deputy to enforce said lien and assess and collect the additional fee. Clearly, the
rules and jurisprudence contemplate the initial payment of filing and docket fees based on the estimated
claims of the plaintiff, and it is only when there is a deficiency that a lien may be constituted on the
judgment award until such additional fee is collected.

Based on the foregoing, the trial court erred in not dismissing the complaint outright despite their
failure to pay the proper docket fees. Nevertheless, as in other procedural rules, it may be liberally
construed in certain cases if only to secure a just and speedy disposition of an action. While the rule is
that the payment of the docket fee in the proper amount should be adhered to, there are certain
exceptions which must be strictly construed.[23]

In recent rulings, this Court has relaxed the strict adherence to the Manchester doctrine, allowing the
plaintiff to pay the proper docket fees within a reasonable time before the expiration of the applicable
prescriptive or reglementary period.[24]

In the recent case of National Steel Corp. v. Court of Appeals,[25] this Court held that:

The court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by
the payment of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as
of the time of full payment of the fees within such reasonable time as the court may grant, unless, of
course, prescription has set in the meantime.

It does not follow, however, that the trial court should have dismissed the complaint for failure of
private respondent to pay the correct amount of docket fees. Although the payment of the proper docket
fees is a jurisdictional requirement, the trial court may allow the plaintiff in an action to pay the same
within a reasonable time before the expiration of the applicable prescriptive or reglementary period. If
the plaintiff fails to comply within this requirement, the defendant should timely raise the issue of
jurisdiction or else he would be considered in estoppel. In the latter case, the balance between the
appropriate docket fees and the amount actually paid by the plaintiff will be considered a lien or any
award he may obtain in his favor. (Underscoring ours)

Accordingly, the trial court in the case at bar should determine the proper docket fee based on the
estimated amount that respondents seek to collect from petitioner, and direct them to pay the same
within a reasonable time, provided the applicable prescriptive or reglementary period has not yet
expired. Failure to comply therewith, and upon motion by petitioner, the immediate dismissal of the
complaint shall issue on jurisdictional grounds.

On the matter of improper venue, we find no error on the part of the trial court and the Court of
Appeals in holding that the case below is a personal action which, under the Rules, may be commenced
and tried where the defendant resides or may be found, or where the plaintiffs reside, at the election of
the latter.[26]

Petitioner, however, insists that venue was improperly laid since the action is a real action involving a
parcel of land that is located outside the territorial jurisdiction of the court a quo. This contention is not
well-taken. The records indubitably show that respondents are asking that the assets of the partnership
be accounted for, sold and distributed according to the agreement of the partners. The fact that two of
the assets of the partnership are parcels of land does not materially change the nature of the action. It is
an action in personam because it is an action against a person, namely, petitioner, on the basis of his
personal liability. It is not an action in rem where the action is against the thing itself instead of against
the person.[27] Furthermore, there is no showing that the parcels of land involved in this case are being
disputed. In fact, it is only incidental that part of the assets of the partnership under liquidation happen
to be parcels of land.

The time-tested case of Claridades v. Mercader, et al.,[28] settled this issue thus:

The fact that plaintiff prays for the sale of the assets of the partnership, including the fishpond in
question, did not change the nature or character of the action, such sale being merely a necessary
incident of the liquidation of the partnership, which should precede and/or is part of its process of
dissolution.

The action filed by respondents not only seeks redress against petitioner. It also seeks the enforcement
of, and petitioners compliance with, the contract that the partners executed to formalize the
partnerships dissolution, as well as to implement the liquidation and partition of the partnerships assets.
Clearly, it is a personal action that, in effect, claims a debt from petitioner and seeks the performance of
a personal duty on his part.[29] In fine, respondents complaint seeking the liquidation and partition of
the assets of the partnership with damages is a personal action which may be filed in the proper court
where any of the parties reside.[30] Besides, venue has nothing to do with jurisdiction for venue
touches more upon the substance or merits of the case.[31] As it is, venue in this case was properly laid
and the trial court correctly ruled so.

On the third issue, petitioner asserts that the surviving spouse of Vicente Tabanao has no legal capacity
to sue since she was never appointed as administratrix or executrix of his estate. Petitioners objection in
this regard is misplaced. The surviving spouse does not need to be appointed as executrix or
administratrix of the estate before she can file the action. She and her children are complainants in their
own right as successors of Vicente Tabanao. From the very moment of Vicente Tabanaos death, his
rights insofar as the partnership was concerned were transmitted to his heirs, for rights to the
succession are transmitted from the moment of death of the decedent.[32]

Whatever claims and rights Vicente Tabanao had against the partnership and petitioner were
transmitted to respondents by operation of law, more particularly by succession, which is a mode of
acquisition by virtue of which the property, rights and obligations to the extent of the value of the
inheritance of a person are transmitted.[33] Moreover, respondents became owners of their respective
hereditary shares from the moment Vicente Tabanao died.[34]

A prior settlement of the estate, or even the appointment of Salvacion Tabanao as executrix or
administratrix, is not necessary for any of the heirs to acquire legal capacity to sue. As successors who
stepped into the shoes of their decedent upon his death, they can commence any action originally
pertaining to the decedent.[35] From the moment of his death, his rights as a partner and to demand
fulfillment of petitioners obligations as outlined in their dissolution agreement were transmitted to
respondents. They, therefore, had the capacity to sue and seek the courts intervention to compel
petitioner to fulfill his obligations.

Finally, petitioner contends that the trial court should have dismissed the complaint on the ground of
prescription, arguing that respondents action prescribed four (4) years after it accrued in 1986. The trial
court and the Court of Appeals gave scant consideration to petitioners hollow arguments, and rightly
so.

The three (3) final stages of a partnership are: (1) dissolution; (2) winding-up; and (3) termination.[36]
The partnership, although dissolved, continues to exist and its legal personality is retained, at which
time it completes the winding up of its affairs, including the partitioning and distribution of the net
partnership assets to the partners.[37] For as long as the partnership exists, any of the partners may
demand an accounting of the partnerships business. Prescription of the said right starts to run only upon
the dissolution of the partnership when the final accounting is done.[38]

Contrary to petitioners protestations that respondents right to inquire into the business affairs of the
partnership accrued in 1986, prescribing four (4) years thereafter, prescription had not even begun to
run in the absence of a final accounting. Article 1842 of the Civil Code provides:

The right to an account of his interest shall accrue to any partner, or his legal representative as against
the winding up partners or the surviving partners or the person or partnership continuing the business,
at the date of dissolution, in the absence of any agreement to the contrary.

Applied in relation to Articles 1807 and 1809, which also deal with the duty to account, the above-cited
provision states that the right to demand an accounting accrues at the date of dissolution in the absence
of any agreement to the contrary. When a final accounting is made, it is only then that prescription
begins to run. In the case at bar, no final accounting has been made, and that is precisely what
respondents are seeking in their action before the trial court, since petitioner has failed or refused to
render an accounting of the partnerships business and assets. Hence, the said action is not barred by
prescription.
In fine, the trial court neither erred nor abused its discretion when it denied petitioners motions to
dismiss. Likewise, the Court of Appeals did not commit reversible error in upholding the trial courts
orders. Precious time has been lost just to settle this preliminary issue, with petitioner resurrecting the
very same arguments from the trial court all the way up to the Supreme Court. The litigation of the
merits and substantial issues of this controversy is now long overdue and must proceed without further
delay.

WHEREFORE, in view of all the foregoing, the instant petition is DENIED for lack of merit, and the
case is REMANDED to the Regional Trial Court of Cadiz City, Branch 60, which is ORDERED to
determine the proper docket fee based on the estimated amount that plaintiffs therein seek to collect,
and direct said plaintiffs to pay the same within a reasonable time, provided the applicable prescriptive
or reglementary period has not yet expired. Thereafter, the trial court is ORDERED to conduct the
appropriate proceedings in Civil Case No. 416-C.

Costs against petitioner.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo, JJ., concur

[G.R. No. 104482. January 22, 1996]

BELINDA TAREDO, for herself and in representation of her brothers and sisters, and
TEOFILA CORPUZ TANEDO, representing her minor daughter VERNA TANEDO, petitioners,
vs. THE COURT OF APPEALS, SPOUSES RICARDO M. TAREDO AND TERESITA
BARERA TAREDO, respondents.

DECISION

PANGANIBAN, J.:

Is a sale of future inheritance valid? In multiple sales of the same real property, who has preference in
ownership? What is the probative value of the lower courts finding of good faith in registration of such
sales in the registry of property? These are the main questions raised in this Petition for review on
certiorari under Rule 45 of the Rules of Court to set aside and reverse the Decision1 of the Court of
Appeals2 in CA-G.R. CV NO. 24987 promulgated on September 26, 1991 affirming the decision of the
Regional Trial Court, Branch 63, Third Judicial Region, Tarlac, Tarlac in Civil Case No. 6328, and its
Resolution denying reconsideration thereof, promulgated on May 27, 1992.
By the Courts Resolution on October 25, 1995, this case (along with several others) was transferred
from the First to the Third Division and after due deliberation, the Court assigned it to the undersigned
ponenle for the writing of this Decision.

The Facts

On October 20, 1962, Lazardo Taedo executed a notarized deed of absolute sale in favor of his eldest
brother, Ricardo Taedo, and the latters wife, Teresita Barera, private respondents herein, whereby he
conveyed to the latter in consideration of P1,500.00, one hectare of whatever share I shall have over
Lot No. 191 of the cadastral survey of Gerona, Province of Tarlac and covered by Title T-l3829 of the
Register of Deeds of Tarlac, the said property being his future inheritance from his parents (Exh. 1).
Upon the death of his father Matias, Lazaro executed an Affidavit of Conformity dated February 28,
1980 (Exh. 3) to re-affirm, respect. acknowledge and validate the sale I made in 1962. On January 13,
1981, Lazaro executed another notarized deed of sale in favor of private respondents covering his
undivided ONE TWELVE (1/12) of a parcel of land known as Lot 191 x x (Exh. 4). He acknowledged
therein his receipt of P 10,000.00 as consideration therefor. In February 1981, Ricardo learned that
Lazaro sold the same property to his children, petitioners herein, through a deed of sale dated
December 29, 1980 (Exh. E). On June 7, 1982, private respondents recorded the Deed of Sale (Exh. 4)
in their favor in the Registry of Deeds and the corresponding entry was made in Transfer Certificate of
Title No. 166451 (Exh. 5).

Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of the deeds of sale
executed by Lazaro in favor of private respondents covering the property inherited by Lazaro from his
father.

Petitioners claimed that their father, Lazaro, executed an Absolute Deed of Sale dated December 29,
1980 (Exit. E), conveying to his ten children his allotted portion under the extrajudicial partition
executed by the heirs of Matias, which deed included the land in litigation (Lot 191).

Petitioners also presented in evidence: (1) a private writing purportedly prepared and signed by Matias
dated December 28, 1978, stating that it was his desire that whatever inheritance Lazaro would receive
from him should be given to his (Lazaros) children (Exh. A); (2) a typewritten document dated March
10, 1979 signed by Lazaro in the presence of two witnesses, wherein he confirmed that he would
voluntarily abide by the wishes of his father, Matias, to give to his (Lazaros) children all the property
he would inherit from the latter (Exh. B); and (3) a letter dated January 1, 1980 of Lazaro to his
daughter, Carmela, stating that his share in the extrajudicial settlement of the estate of his father was
intended for his children, petitioners herein (Exh. C).

Private respondents, however presented in evidence a Deed of Revocation of a Deed of Sale dated
March 12, 1981 (Exh. 6), wherein Lazaro revoked the sale in favor of petitioners for the reason that it
was simulated or fictitious - without any consideration whatsoever.

Shortly after the case a quo was filed, Lazaro executed a sworn statement (Exh. G) which virtually
repudiated the contents of the Deed of Revocation of a Deed of Sale (Exh. 6) and the Deed of Sale
(Exh. 4) in favor of private respondents. However, Lazaro testified that he sold the property to Ricardo,
and that it was a lawyer who induced him to execute a deed of sale in favor of his children after giving
him five pesos (P5.00) to buy a drink (TSN September 18, 1985, pp. 204-205).
The trial court decided in favor of private respondents, holding that petitioners failed to adduce a
preponderance of evidence to support (their) claim. On appeal, the Court of Appeals affirmed the
decision of the trial court, ruling that the Deed of Sale dated January 13, 1981 (Exh. 9) was valid and
that its registration in good faith vested title in said respondents.

The Issues

Petitioners raised the following errors in the respondent Court, which they also now allege in the
instant Petition:

I. The trial court erred in concluding that the Contract of Sale of October 20, 1962 (Exhibit 7, Answer)
is merely voidable or annulable and not void ab initio pursuant to paragraph 2 of Article 1347 of the
New Civil Code involving as it does a future inheritance.

II. The trial court erred in holding that defendants-appellees acted in good faith in registering the deed
of sale of January 13, 1981 (Exhibit 9) with the Register of Deeds of Tarlac and therefore ownership of
the land in question passed on to defendants-appellees.

III. The trial court erred in ignoring and failing to consider the testimonial and documentary evidence
of plaintiffs-appellants which clearly established by preponderance of evidence that they are indeed the
legitimate and lawful owners of the property in question.

IV. The decision is contrary to law and the facts of the case and the conclusions drawn from the
established facts are illogical and off-tangent.

From the foregoing, the issues may be restated as follows:

1. Is the sale of a future inheritance valid?

2. Was the subsequent execution on January 13, 1981 (and registration with the Registry of Property)
of a deed of sale covering the same property to the same buyers valid?

3. May this Court review the findings of the respondent Court (a) holding that the buyers acted in good
faith in registering the said subsequent deed of sale and (b) in failing to consider petitioners evidence?
Are the conclusions of the respondent Court illogical and off-tangent?

The Courts Ruling

At the outset, let it be clear that the errors which are reviewable by this Court in this petition for review
on certiorari are only those allegedly committed by the respondent Court of Appeals and not directly
those of the trial court, which is not a party here. The assignment of errors in the petition quoted above
are therefore totally misplaced, and for that reason, the petition should be dismissed. But in order to
give the parties substantial justice we have decided to delve into the issues as above re-stated. The
errors attributed by petitioners to the latter (trial) court will be discussed only insofar as they are
relevant to the appellate courts assailed Decision and Resolution.

The sale made in 1962 involving future inheritance is not really at issue here. In context, the assailed
Decision conceded it may be legally correct that a contract of sale of anticipated future inheritance is
null and void.3

But to remove all doubts, we hereby categorically rule that, pursuant to Article 1347 of the Civil Code,
(n)o contract may be entered into upon a future inheritance except in cases expressly authorized by law.

Consequently, said contract made in 1962 is not valid and cannot be the source of any right nor the
creator of any obligation between the parties.

Hence, the affidavit of conformity dated February 28, 1980, insofar as it sought to validate or ratify the
1962 sale, is also useless and, in the words of the respondent Court, suffers from the same infirmity.
Even private respondents in their memorandum4 concede this.

However, the documents that are critical to the resolution of this case are: (a) the deed of sale of
January 13, 1981 in favor of private respondents covering Lazaros undivided inheritance of one-twelfth
(1/12) share in Lot No. 191, which was subsequently registered on June 7, 1982; and (b) the deed of
sale dated December 29, 1980 in favor of petitioners covering the same property. These two documents
were executed after the death of Matias (and his spouse) and after a deed of extrajudicial settlement of
his (Matias) estate was executed, thus vesting in Lazaro actual title over said property. In other words,
these dispositions, though conflicting, were no longer infected with the infirmities of the 1962 sale.

Petitioners contend that what was sold on January 13, 1981 was only one-half hectare out of Lot No.
191, citing as authority the trial courts decision. As earlier pointed out, what is on review in these
proceedings by this Court is the Court of Appeals decision - which correctly identified the subject
matter of the January 13, 1981 sale to be the entire undivided 1/12 share of Lazaro in Lot No. 191 and
which is the same property disposed of on December 29, 1980 in favor of petitioners.

Critical in determining which of these two deeds should be given effect is the registration of the sale in
favor of private respondents with the register of deeds on June 7, 1982.

Article 1544 of the Civil Code governs the preferential rights of vendees in cases of multiple sales, as
follows:
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should be
movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good
faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in
the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is
good faith.

The property in question is land, an immovable, and following the above-quoted law, ownership shall
belong to the buyer who in good faith registers it first in the registry of property. Thus, although the
deed of sale in favor of private respondents was later than the one in favor of petitioners, ownership
would vest in the former because of the undisputed fact of registration. On the other hand, petitioners
have not registered the sale to them at all.

Petitioners contend that they were in possession of the property and that private respondents never took
possession thereof. As between two purchasers, the one who registered the sale in his favor has a
preferred right over the other who has not registered his title, even if the latter is in actual possession of
the immovable property.5

As to third issue, while petitioners conceded the fact of registration, they nevertheless contended that it
was done in bad faith. On this issue, the respondent Court ruled:

Under the second assignment of error, plaintiffs-appellants contend that defendants-appellees acted in
bad faith when they registered the Deed of Sale in their favor as appellee Ricardo already knew of the
execution of the deed of sale in favor of the plaintiffs; appellants cite the testimony of plaintiff Belinda
Tafledo to the effect that defendant Ricardo Taedo called her up on January 4 or 5, 1981 to tell her that
he was already the owner of the land in question but the contract of sale between our father and us were
(sic) already consumated (pp. 9-10, tsn, January 6, 1984). This testimony is obviously self-serving, and
because it was a telephone conversation, the deed of sale dated December 29, 1980 was not shown;
Belinda merely told her uncle that there was already a document showing that plaintiffs are the owners
(p. 80). Ricardo Taedo controverted this and testified that he learned for the first time of the deed of
sale executed by Lazaro in favor of his children about a month or sometime in February 1981 (p. 111,
tsn, Nov. 28, 1984). x x x6

The respondent Court, reviewing the trial courts findings, refused to overturn the latters assessment of
the testimonial evidence, as follows:

We are not prepared to set aside the finding of the lower court upholding Ricardo Tanedos testimony,
as it involves a matter of credibility of witnesses which the trial judge, who presided at the hearing, was
in a better position to resolve. (Court of Appeals Decision, p. 6.)
In this connection, we note the tenacious allegations made by petitioners, both in their basic petition
and in their memorandum, as follows:

1. The respondent Court allegedly ignored the claimed fact that respondent Ricardo by fraud and deceit
and with foreknowledge that the property in question had already been sold to petitioners, made Lazaro
execute the deed of January 13, 1981;

2. There is allegedly adequate evidence to show that only 1/2 of the purchase price of P10,000.00 was
paid at the time of the execution of the deed of sale, contrary to the written acknowledgment, thus
showing bad faith;

3. There is allegedly sufficient evidence showing that the deed of revocation of the sale in favor of
petitioners was tainted with fraud or deceit.

4. There is allegedly enough evidence to show that private respondents took undue advantage over the
weakness and unschooled and pitiful situation of Lazaro Tafledo . . . and that respondent Ricardo
Taedo exercised moral ascendancy over his younger brother he being the eldest brother and who
reached fourth year college of law and at one time a former Vice-Governor of Tarlac, while his
younger brother only attained first year high school x x x ;

5. The respondent Court erred in not giving credence to petitioners evidence, especially Lazaro Taedos
Sinumpaang Salaysay dated July 27, 1982 stating that Ricardo Taedo deceived the former in executing
the deed of sale in favor of private respondents.

To be sure, there are indeed many conflicting documents and testimonies as well as arguments over
their probative value and significance. Suffice it to say, however, that all the above contentions involve
questions of fact, appreciation of evidence and credibility of witnesses, which are not proper in this
review. It is well-settled that the Supreme Court is not a trier of facts. In petitions for review under
Rule 45 of the Revised Rules of Court, only questions of law may be raised and passed upon. Absent
any whimsical or capricious exercise of judgment, and unless the lack of any basis for the conclusions
made by the lower courts be amply demonstrated, the Supreme Court will not disturb their findings. At
most, it appears that petitioners have shown that their evidence was not believed by both the trial and
the appellate courts, and that the said courts tended to give more credence to the evidence presented by
private respondents. But this in itself is not a reason for setting aside such findings. We are far from
convinced that both courts gravely abused their respective authorities and judicial prerogatives.

As held in the recent case of Chua Tiong Tay vs. Court of Appeals and Goidrock Construction and
Development Corp.:7

The Court has consistently held that the factual findings of the trial court, as well as the Court of
Appeals, are final and conclusive and may not be reviewed on appeal. Among the exceptional
circumstances where a reassessment of facts found by the lower courts is allowed are when the
conclusion is a finding grounded entirely on speculation, surmises or conjectures; when the inference
made is manifestly absurd, mistaken or Impossible; when there is grave abuse of discretion in the
appreciation of facts; when the judgment is premised on a misapprehension of facts; when the findings
went beyond the issues of the case and the same are contrary to the admissions of both appellant and
appellee. After a careful study of the case at bench, we find none of the above grounds present to
justify the re-evaluation of the findings of fact made by the courts below.

In the same vein, the ruling in the recent case of South Sea Surety and Insurance Company, Inc. vs.
Hon. Court of Appeals, et al.[8] is equally applicable to the present case:

We see no valid reason to discard the factual conclusions of the appellate court. x x x (I)t is not the
function of this Court to assess and evaluate all over again the evidence, testimonial and documentary,
adduced by the parties, particularly where, such as here, the findings of both the trial court and the
appellate court on the matter coincide. (italics supplied)

WHEREFORE, the petition is DENIED and the assailed Decision of the Court of Appeals is
AFFIRMED. No Costs.

SO ORDERED.

Narvasa, C.J. (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.

G.R. No. 169129 March 28, 2007

SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS, SPS.VICTORINO F. SANTOS,

& LAGRIMAS SANTOS, ERNESTO F. SANTOS, and TADEO F. SANTOS, Petitioners,

vs.

SPS. JOSE LUMBAO and PROSERFINA LUMBAO, Respondents.

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of
Civil Procedure seeking to annul and set aside the Decision1 and Resolution2 of the Court of Appeals
in CA-G.R. CV No. 60450 entitled, Spouses Jose Lumbao and Proserfina Lumbao v. Spouses Virgilio
F. Santos and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos
and Tadeo F. Santos, dated 8 June 2005 and 29 July 2005, respectively, which granted the appeal filed
by herein respondents Spouses Jose Lumbao and Proserfina Lumbao (Spouses Lumbao) and ordered
herein petitioners Spouses Virgilio F. Santos and Esperanza Lati, Spouses Victorino F. Santos and
Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos to reconvey to respondents Spouses
Lumbao the subject property and to pay the latter attorney’s fees and litigation expenses, thus,
reversing the Decision3 of the Regional Trial Court (RTC) of Pasig City, dated 17 June 1998 which
dismissed the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao for
lack of merit.

Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed Santos, are the legitimate and
surviving heirs of the late Rita Catoc Santos (Rita), who died on 20 October 1985. The other petitioners
Esperanza Lati and Lagrimas Santos are the daughters-in-law of Rita.

Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are the alleged owners of the
107-square meter lot (subject property), which they purportedly bought from Rita during her lifetime.

The facts of the present case are as follows:

On two separate occasions during her lifetime, Rita sold to respondents Spouses Lumbao the subject
property which is a part of her share in the estate of her deceased mother, Maria Catoc (Maria), who
died intestate on 19 September 1978. On the first occasion, Rita sold 100 square meters of her inchoate
share in her mother’s estate through a document denominated as "Bilihan ng Lupa," dated 17 August
1979.4 Respondents Spouses Lumbao claimed the execution of the aforesaid document was witnessed
by petitioners Virgilio and Tadeo, as shown by their signatures affixed therein. On the second occasion,
an additional seven square meters was added to the land as evidenced by a document also denominated
as "Bilihan ng Lupa," dated 9 January 1981.5

After acquiring the subject property, respondents Spouses Lumbao took actual possession thereof and
erected thereon a house which they have been occupying as exclusive owners up to the present. As the
exclusive owners of the subject property, respondents Spouses Lumbao made several verbal demands
upon Rita, during her lifetime, and thereafter upon herein petitioners, for them to execute the necessary
documents to effect the issuance of a separate title in favor of respondents Spouses Lumbao insofar as
the subject property is concerned. Respondents Spouses Lumbao alleged that prior to her death, Rita
informed respondent Proserfina Lumbao she could not deliver the title to the subject property because
the entire property inherited by her and her co-heirs from Maria had not yet been partitioned.

On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting fraudulently and in conspiracy
with one another, executed a Deed of Extrajudicial Settlement,6 adjudicating and partitioning among
themselves and the other heirs, the estate left by Maria, which included the subject property already
sold to respondents Spouses Lumbao and now covered by TCT No. 817297 of the Registry of Deeds of
Pasig City.

On 15 June 1992, respondents Spouses Lumbao, through counsel, sent a formal demand letter8 to
petitioners but despite receipt of such demand letter, petitioners still failed and refused to reconvey the
subject property to the respondents Spouses Lumbao. Consequently, the latter filed a Complaint for
Reconveyance with Damages9 before the RTC of Pasig City.

Petitioners filed their Answer denying the allegations that the subject property had been sold to the
respondents Spouses Lumbao. They likewise denied that the Deed of Extrajudicial Settlement had been
fraudulently executed because the same was duly published as required by law. On the contrary, they
prayed for the dismissal of the Complaint for lack of cause of action because respondents Spouses
Lumbao failed to comply with the Revised Katarungang Pambarangay Law under Republic Act No.
7160, otherwise known as the Local Government Code of 1991, which repealed Presidential Decree No.
150810 requiring first resort to barangay conciliation.

Respondents Spouses Lumbao, with leave of court, amended their Complaint because they discovered
that on 16 February 1990, without their knowledge, petitioners executed a Deed of Real Estate
Mortgage in favor of Julieta S. Esplana for the sum of ₱30,000.00. The said Deed of Real Estate
Mortgage was annotated at the back of TCT No. PT-81729 on 26 April 1991. Also, in answer to the
allegation of the petitioners that they failed to comply with the mandate of the Revised Katarungang
Pambarangay Law, respondents Spouses Lumbao said that the Complaint was filed directly in court in
order that prescription or the Statute of Limitations may not set in.

During the trial, respondents Spouses Lumbao presented Proserfina Lumbao and Carolina Morales as
their witnesses, while the petitioners presented only the testimony of petitioner Virgilio.

The trial court rendered a Decision on 17 June 1998, the dispositive portion of which reads as follows:

Premises considered, the instant complaint is hereby denied for lack of merit.

Considering that [petitioners] have incurred expenses in order to protect their interest, [respondents
spouses Lumbao] are hereby directed to pay [petitioners], to wit: 1) the amount of ₱30,000.00 as
attorney’s fees and litigation expenses, and 2) costs of the suit.11

Aggrieved, respondents Spouses Lumbao appealed to the Court of Appeals. On 8 June 2005, the
appellate court rendered a Decision, thus:

WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Decision
dated June 17, 1998 of the Regional Trial Court of Pasig City, Branch 69 in Civil Case No. 62175 is
hereby REVERSED and SET ASIDE. A new judgment is hereby entered ordering [petitioners] to
reconvey 107 square meters of the subject [property] covered by TCT No. PT-81729 of the Registry of
Deeds of Pasig City, Metro Manila, and to pay to [respondents spouses Lumbao] the sum of
₱30,000.00 for attorney’s fees and litigation expenses.

No pronouncement as to costs.12

Dissatisfied, petitioners filed a Motion for Reconsideration of the aforesaid Decision but it was denied
in the Resolution of the appellate court dated 29 July 2005 for lack of merit.

Hence, this Petition.

The grounds relied upon by the petitioners are the following:

I. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN REVERSING THE
DECISION OF THE TRIAL COURT, THEREBY CREATING A VARIANCE ON THE FINDINGS
OF FACTS OF TWO COURTS.

II. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN ORDERING THE

PETITIONERS TO RECONVEY THE SUBJECT [PROPERTY] TO THE RESPONDENTS
[SPOUSES LUMBAO] AND IN NOT RULING THAT THEY ARE GUILTY OF LACHES, HENCE
THEY CANNOT RECOVER THE LOT ALLEGEDLY SOLD TO THEM.

III. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING

HEREIN PETITIONER[S] TO BE IN GOOD FAITH IN EXECUTING THE "DEED OF
EXTRAJUDICIAL SETTLEMENT" DATED [2 MAY 1986].

IV. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT
PETITIONERS ARE NOT LEGALLY BOUND TO COMPLY WITH THE SUPPOSED BILIHAN
NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981] THAT WERE SUPPOSEDLY
EXECUTED BY THE LATE RITA CATOC.

V. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT

RESPONDENTS [SPOUSES LUMBAO’S] ACTION FOR RECONVEYANCE WITH DAMAGES
CANNOT BE SUPPORTED WITH AN UNENFORCEABLE DOCUMENTS, SUCH AS THE
BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981].

VI. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT
RESPONDENTS [SPOUSES LUMBAO’S] COMPLAINT FOR RECONVEYANCE IS
DISMISSABLE (SIC) FOR NON COMPLIANCE OF THE MANDATE OF [P.D. NO.] 1508, AS
AMENDED BY Republic Act No. 7160.

VII. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT
RESPONDENTS [SPOUSES LUMBAO] SHOULD BE HELD LIABLE FOR PETITIONERS’
CLAIM FOR DAMAGES AND ATTORNEY[‘]S FEES.

Petitioners ask this Court to scrutinize the evidence presented in this case, because they claim that the
factual findings of the trial court and the appellate court are conflicting. They allege that the findings of
fact by the trial court revealed that petitioners Virgilio and Tadeo did not witness the execution of the
documents known as "Bilihan ng Lupa"; hence, this finding runs counter to the conclusion made by the
appellate court. And even assuming that they were witnesses to the aforesaid documents, still,
respondents Spouses Lumbao were not entitled to the reconveyance of the subject property because
they were guilty of laches for their failure to assert their rights for an unreasonable length of time.
Since respondents Spouses Lumbao had slept on their rights for a period of more than 12 years
reckoned from the date of execution of the second "Bilihan ng Lupa," it would be unjust and unfair to
the petitioners if the respondents will be allowed to recover the subject property.
Petitioners allege they are in good faith in executing the Deed of Extrajudicial Settlement because even
respondents Spouses Lumbao’s witness, Carolina Morales, testified that neither petitioner Virgilio nor
petitioner Tadeo was present during the execution of the "Bilihan ng Lupa," dated 17 August 1979 and
9 January 1981. Petitioners affirm that the Deed of Extrajudicial Settlement was published in a
newspaper of general circulation to give notice to all creditors of the estate subject of partition to
contest the same within the period prescribed by law. Since no claimant appeared to interpose a claim
within the period allowed by law, a title to the subject property was then issued in favor of the
petitioners; hence, they are considered as holders in good faith and therefore cannot be barred from
entering into any subsequent transactions involving the subject property.

Petitioners also contend that they are not bound by the documents denominated as "Bilihan ng Lupa"
because the same were null and void for the following reasons: 1) for being falsified documents
because one of those documents made it appear that petitioners Virgilio and Tadeo were witnesses to
its execution and that they appeared personally before the notary public, when in truth and in fact they
did not; 2) the identities of the properties in the "Bilihan ng Lupa," dated 17 August 1979 and 9
January 1981 in relation to the subject property in litigation were not established by the evidence
presented by the respondents Spouses Lumbao; 3) the right of the respondents Spouses Lumbao to lay
their claim over the subject property had already been barred through estoppel by laches; and 4) the
respondents Spouses Lumbao’s claim over the subject property had already prescribed.

Finally, petitioners claim that the Complaint for Reconveyance with Damages filed by respondents
Spouses Lumbao was dismissible because they failed to comply with the mandate of Presidential
Decree No. 1508, as amended by Republic Act No. 7160, particularly Section 412 of Republic Act No.
7160.

Given the foregoing, the issues presented by the petitioners may be restated as follows:

I. Whether or not the Complaint for Reconveyance with Damages filed by respondents spouses
Lumbao is dismissible for their failure to comply with the mandate of the Revised Katarungang
Pambarangay Law under R.A. No. 7160.

II. Whether or not the documents known as "Bilihan ng Lupa" are valid and enforceable, thus, they can
be the bases of the respondents spouses Lumbao’s action for reconveyance with damages.

III. Whether or not herein petitioners are legally bound to comply with the "Bilihan ng Lupa" dated 17
August 1979 and 9 January 1981 and consequently, reconvey the subject property to herein
respondents spouses Lumbao.

It is well-settled that in the exercise of the Supreme Court’s power of review, the court is not a trier of
facts and does not normally undertake the re-examination of the evidence presented by the contending
parties during the trial of the case considering that the findings of fact of the Court of Appeals are
conclusive and binding on the Court.13 But, the rule is not without exceptions. There are several
recognized exceptions14 in which factual issues may be resolved by this Court. One of these
exceptions is when the findings of the appellate court are contrary to those of the trial court. This
exception is present in the case at bar.
Going to the first issue presented in this case, it is the argument of the petitioners that the Complaint for
Reconveyance with Damages filed by respondents Spouses Lumbao should be dismissed for failure to
comply with the barangay conciliation proceedings as mandated by the Revised Katarungang
Pambarangay Law under Republic Act No. 7160. This argument cannot be sustained.

Section 408 of the aforesaid law and Administrative Circular No. 14-9315 provide that all disputes
between parties actually residing in the same city or municipality are subject to barangay conciliation.
A prior recourse thereto is a pre-condition before filing a complaint in court or any government offices.
Non-compliance with the said condition precedent could affect the sufficiency of the plaintiff’s cause
of action and make his complaint vulnerable to dismissal on ground of lack of cause of action or
prematurity; but the same would not prevent a court of competent jurisdiction from exercising its
power of adjudication over the case before it, where the defendants failed to object to such exercise of
jurisdiction.16

While it is true that the present case should first be referred to the Barangay Lupon for conciliation
because the parties involved herein actually reside in the same city (Pasig City) and the dispute
between them involves a real property, hence, the said dispute should have been brought in the city in
which the real property, subject matter of the controversy, is located, which happens to be the same city
where the contending parties reside. In the event that respondents Spouses Lumbao failed to comply
with the said condition precedent, their Complaint for Reconveyance with Damages can be dismissed.
In this case, however, respondents Spouses Lumbao’s non-compliance with the aforesaid condition
precedent cannot be considered fatal. Although petitioners alleged in their answer that the Complaint
for Reconveyance with Damages filed by respondents spouses Lumbao should be dismissed for their
failure to comply with the condition precedent, which in effect, made the complaint prematurely
instituted and the trial court acquired no jurisdiction to hear the case, yet, they did not file a Motion to
Dismiss the said complaint.

Emphasis must be given to the fact that the petitioners could have prevented the trial court from
exercising jurisdiction over the case had they filed a Motion to Dismiss. However, instead of doing so,
they invoked the very same jurisdiction by filing an answer seeking an affirmative relief from it. Worse,
petitioners actively participated in the trial of the case by presenting their own witness and by
cross-examining the witnesses presented by the respondents Spouses Lumbao. It is elementary that the
active participation of a party in a case pending against him before a court is tantamount to recognition
of that court’s jurisdiction and a willingness to abide by the resolution of the case which will bar said
party from later on impugning the court’s jurisdiction.17 It is also well-settled that the non-referral of a
case for barangay conciliation when so required under the law is not jurisdictional in nature and may
therefore be deemed waived if not raised seasonably in a motion to dismiss.18 Hence, herein
petitioners can no longer raise the defense of non-compliance with the barangay conciliation
proceedings to seek the dismissal of the complaint filed by the respondents Spouses Lumbao, because
they already waived the said defense when they failed to file a Motion to Dismiss.

As regards the second issue, petitioners maintain that the "Bilihan ng Lupa," dated 17 August 1979 and
9 January 1981 are null and void for being falsified documents as it is made to appear that petitioners
Virgilio and Tadeo were present in the execution of the said documents and that the identities of the
properties in those documents in relation to the subject property has not been established by the
evidence of the respondents Spouses Lumbao. Petitioners also claim that the enforceability of those
documents is barred by prescription of action and laches.
It is the petitioners’ incessant barking that the "Bilihan ng Lupa" documents dated 17 August 1979 and
9 January 1981 were falsified because it was made to appear that petitioners Virgilio and Tadeo were
present in the executions thereof, and their allegation that even respondents Spouses Lumbao’s witness
Carolina Morales proved that said petitioners were not present during the execution of the
aforementioned documents. This is specious.

Upon examination of the aforesaid documents, this Court finds that in the "Bilihan ng Lupa," dated 17
August 1979, the signatures of petitioners Virgilio and Tadeo appeared thereon. Moreover, in
petitioners’ Answer and Amended Answer to the Complaint for Reconveyance with Damages, both
petitioners Virgilio and Tadeo made an admission that indeed they acted as witnesses in the execution
of the "Bilihan ng Lupa," dated 17 August 1979.19 However, in order to avoid their obligations in the
said "Bilihan ng Lupa," petitioner Virgilio, in his cross-examination, denied having knowledge of the
sale transaction and claimed that he could not remember the same as well as his appearance before the
notary public due to the length of time that had passed. Noticeably, petitioner Virgilio did not
categorically deny having signed the "Bilihan ng Lupa," dated 17 August 1979 and in support thereof,
his testimony in the cross-examination propounded by the counsel of the respondents Spouses Lumbao
is quoted hereunder:

ATTY. CHIU:

Q. Now, you said, Mr. Witness…Virgilio Santos, that you don’t know about this document which was
marked as Exhibit "A" for the [respondents spouses Lumbao]?

ATTY. BUGARING:

The question is misleading, your Honor. Counsel premised the question that he does not have any
knowledge but not that he does not know.

ATTY. CHIU:

Q. Being… you are one of the witnesses of this document? [I]s it not?

WITNESS:

A. No, sir.

Q. I am showing to you this document, there is a signature at the left hand margin of this document
Virgilio Santos, will you please go over the same and tell the court whose signature is this?

A. I don’t remember, sir, because of the length of time that had passed.
Q. But that is your signature?

A. I don’t have eyeglasses… My signature is different.

Q. You never appeared before this notary public Apolinario Mangahas?

A. I don’t remember.20

As a general rule, facts alleged in a party’s pleading are deemed admissions of that party and are
binding upon him, but this is not an absolute and inflexible rule. An answer is a mere statement of fact
which the party filing it expects to prove, but it is not evidence.21 And in spite of the presence of
judicial admissions in a party’s pleading, the trial court is still given leeway to consider other evidence
presented.22 However, in the case at bar, as the Court of Appeals mentioned in its Decision, "[herein
petitioners] had not adduced any other evidence to override the admission made in their [A]nswer that
[petitioners Virgilio and Tadeo] actually signed the [Bilihan ng Lupa dated 17 August 1979] except
that they were just misled as to the purpose of the document, x x x."23 Virgilio’s answers were unsure
and quibbled. Hence, the general rule that the admissions made by a party in a pleading are binding and
conclusive upon him applies in this case.

On the testimony of respondents Spouses Lumbao’s witness Carolina Morales, this Court adopts the
findings made by the appellate court. Thus -

[T]he trial court gave singular focus on her reply to a question during cross-examination if the
[petitioners Virgilio and Tadeo] were not with her and the vendor [Rita] during the transaction. It must
be pointed out that earlier in the direct examination of said witness, she confirmed that [respondents
spouses Lumbao] actually bought the lot from [Rita] ("nagkabilihan"). Said witness positively
identified and confirmed the two (2) documents evidencing the sale in favor of [respondents spouse
Lumbao]. Thus, her subsequent statement that the [petitioners Virgilio and Tadeo] were not with them
during the transaction does not automatically imply that [petitioners Virgilio and Tadeo] did not at any
time sign as witnesses as to the deed of sale attesting to their mother’s voluntary act of selling a portion
of her share in her deceased mother’s property. The rule is that testimony of a witness must be
considered and calibrated in its entirety and not by truncated portions thereof or isolated passages
therein.24

Furthermore, both "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 were duly
notarized before a notary public. It is well-settled that a document acknowledged before a notary public
is a public document25 that enjoys the presumption of regularity. It is a prima facie evidence of the
truth of the facts stated therein and a conclusive presumption of its existence and due execution.26 To
overcome this presumption, there must be presented evidence that is clear and convincing. Absent such
evidence, the presumption must be upheld.27 In addition, one who denies the due execution of a deed
where one’s signature appears has the burden of proving that contrary to the recital in the jurat, one
never appeared before the notary public and acknowledged the deed to be a voluntary act. Nonetheless,
in the present case petitioners’ denials without clear and convincing evidence to support their claim of
fraud and falsity were not sufficient to overthrow the above-mentioned presumption; hence, the
authenticity, due execution and the truth of the facts stated in the aforesaid "Bilihan ng Lupa" are
upheld.
The defense of petitioners that the identities of the properties described in the "Bilihan ng Lupa," dated
17 August 1979 and 9 January 1981 in relation to the subject property were not established by
respondents Spouses Lumbao’s evidence is likewise not acceptable.

It is noteworthy that at the time of the execution of the documents denominated as "Bilihan ng Lupa,"
the entire property owned by Maria, the mother of Rita, was not yet divided among her and her co-heirs
and so the description of the entire estate is the only description that can be placed in the "Bilihan ng
Lupa, dated 17 August 1979 and 9 January 1981" because the exact metes and bounds of the subject
property sold to respondents Spouses Lumbao could not be possibly determined at that time.
Nevertheless, that does not make the contract of sale between Rita and respondents Spouses Lumbao
invalid because both the law and jurisprudence have categorically held that even while an estate
remains undivided, co-owners have each full ownership of their respective aliquots or undivided shares
and may therefore alienate, assign or mortgage them.28 The co-owner, however, has no right to sell or
alienate a specific or determinate part of the thing owned in common, because such right over the thing
is represented by an aliquot or ideal portion without any physical division. In any case, the mere fact
that the deed purports to transfer a concrete portion does not per se render the sale void. The sale is
valid, but only with respect to the aliquot share of the selling co-owner. Furthermore, the sale is subject
to the results of the partition upon the termination of the co-ownership.29

In the case at bar, when the estate left by Maria had been partitioned on 2 May 1986 by virtue of a
Deed of Extrajudicial Settlement, the 107- square meter lot sold by the mother of the petitioners to
respondents Spouses Lumbao should be deducted from the total lot, inherited by them in representation
of their deceased mother, which in this case measures 467 square meters. The 107-square meter lot
already sold to respondents Spouses Lumbao can no longer be inherited by the petitioners because the
same was no longer part of their inheritance as it was already sold during the lifetime of their mother.

Likewise, the fact that the property mentioned in the two "Bilihan ng Lupa" documents was described
as "a portion of a parcel of land covered in Tax Declarations No. A-018-01674," while the subject
matter of the Deed of Extrajudicial Settlement was the property described in Transfer Certificate of
Title (TCT) No. 3216 of the Registry of Deeds of the Province of Rizal in the name of Maria is of no
moment because in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981, it is clear that
there was only one estate left by Maria upon her death. And this fact was not refuted by the petitioners.
Besides, the property described in Tax Declaration No. A-018-01674 and the property mentioned in
TCT No. 3216 are both located in Barrio Rosario, Municipality of Pasig, Province of Rizal, and almost
have the same boundaries. It is, thus, safe to state that the property mentioned in Tax Declaration No.
A-018-01674 and in TCT No. 3216 are one and the same.

The defense of prescription of action and laches is likewise unjustifiable. In an action for reconveyance,
the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the
property or its title which has been wrongfully or erroneously registered in another person’s name to its
rightful or legal owner, or to the one with a better right. It is, indeed, true that the right to seek
reconveyance of registered property is not absolute because it is subject to extinctive prescription.
However, when the plaintiff is in possession of the land to be reconveyed, prescription cannot set in.
Such an exception is based on the theory that registration proceedings could not be used as a shield for
fraud or for enriching a person at the expense of another.30

In the case at bar, the right of the respondents Spouses Lumbao to seek reconveyance does not
prescribe because the latter have been and are still in actual possession and occupation as owners of the
property sought to be reconveyed, which fact has not been refuted nor denied by the petitioners.
Furthermore, respondents Spouses Lumbao cannot be held guilty of laches because from the very start
that they bought the 107-square meter lot from the mother of the petitioners, they have constantly asked
for the transfer of the certificate of title into their names but Rita, during her lifetime, and the
petitioners, after the death of Rita, failed to do so on the flimsy excuse that the lot had not been
partitioned yet. Inexplicably, after the partition of the entire estate of Maria, petitioners still included
the 107-square meter lot in their inheritance which they divided among themselves despite their
knowledge of the contracts of sale between their mother and the respondents Spouses Lumbao.

Under the above premises, this Court holds that the "Bilihan ng Lupa" documents dated 17 August
1979 and 9 January 1981 are valid and enforceable and can be made the basis of the respondents
Spouses Lumbao’s action for reconveyance. The failure of respondents Spouses Lumbao to have the
said documents registered does not affect its validity and enforceability. It must be remembered that
registration is not a requirement for validity of the contract as between the parties, for the effect of
registration serves chiefly to bind third persons. The principal purpose of registration is merely to
notify other persons not parties to a contract that a transaction involving the property had been entered
into. Where the party has knowledge of a prior existing interest which is unregistered at the time he
acquired a right to the same land, his knowledge of that prior unregistered interest has the effect of
registration as to him.31 Hence, the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January
1981, being valid and enforceable, herein petitioners are bound to comply with their provisions. In
short, such documents are absolutely valid between and among the parties thereto.

Finally, the general rule that heirs are bound by contracts entered into by their predecessors-in-interest
applies in the present case. Article 131132 of the NCC is the basis of this rule. It is clear from the said
provision that whatever rights and obligations the decedent have over the property were transmitted to
the heirs by way of succession, a mode of acquiring the property, rights and obligations of the decedent
to the extent of the value of the inheritance of the heirs.33 Thus, the heirs cannot escape the legal
consequence of a transaction entered into by their predecessor-in-interest because they have inherited
the property subject to the liability affecting their common ancestor. Being heirs, there is privity of
interest between them and their deceased mother. They only succeed to what rights their mother had
and what is valid and binding against her is also valid and binding as against them. The death of a party
does not excuse nonperformance of a contract which involves a property right and the rights and
obligations thereunder pass to the personal representatives of the deceased. Similarly, nonperformance
is not excused by the death of the party when the other party has a property interest in the subject
matter of the contract.34

In the end, despite the death of the petitioners’ mother, they are still bound to comply with the
provisions of the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981. Consequently, they
must reconvey to herein respondents Spouses Lumbao the 107-square meter lot which they bought
from Rita, petitioners’ mother. And as correctly ruled by the appellate court, petitioners must pay
respondents Spouses Lumbao attorney’s fees and litigation expenses for having been compelled to
litigate and incur expenses to protect their interest.35 On this matter, we do not find reasons to reverse
the said findings.

WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and
Resolution of the Court of Appeals dated 8 June 2005 and 29 July 2005, respectively, are hereby
AFFIRMED. Herein petitioners are ordered to reconvey to respondents Spouses Lumbao the subject
property and to pay the latter attorney’s fees and litigation expenses. Costs against petitioners.
SO ORDERED.

G.R. No. 162784 June 22, 2007

NATIONAL HOUSING AUTHORITY, petitioner,

vs.

SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN PEDRO, LAGUNA, BR. 31,
respondents.

DECISION

PUNO, C.J.:

This is a Petition for Review on Certiorari under Rule 45 filed by the National Housing Authority
(NHA) against the Court of Appeals, the Regional Trial Court of San Pedro Laguna, Branch 31, and
private respondent Segunda Almeida.

On June 28, 1959, the Land Tenure Administration (LTA) awarded to Margarita Herrera several
portions of land which are part of the Tunasan Estate in San Pedro, Laguna. The award is evidenced by
an Agreement to Sell No. 3787.1 By virtue of Republic Act No. 3488, the LTA was succeeded by the
Department of Agrarian Reform (DAR). On July 31, 1975, the DAR was succeeded by the NHA by
virtue of Presidential Decree No. 757.2 NHA as the successor agency of LTA is the petitioner in this
case.

The records show that Margarita Herrera had two children: Beatriz Herrera-Mercado (the mother of
private respondent) and Francisca Herrera. Beatriz Herrera-Mercado predeceased her mother and left
heirs.

Margarita Herrera passed away on October 27, 1971.3

On August 22, 1974, Francisca Herrera, the remaining child of the late Margarita Herrera executed a
Deed of Self-Adjudication claiming that she is the only remaining relative, being the sole surviving
daughter of the deceased. She also claimed to be the exclusive legal heir of the late Margarita Herrera.

The Deed of Self-Adjudication was based on a Sinumpaang Salaysay dated October 7, 1960, allegedly
executed by Margarita Herrera. The pertinent portions of which are as follows:

SINUMPAANG SALAYSAY
SA SINO MAN KINAUUKULAN;

Akong si MARGARITA HERRERA, Filipina, may 83 taong gulang, balo, kasalukuyang naninirahan
at tumatanggap ng sulat sa Nayon ng San Vicente, San Pedro Laguna, sa ilalim ng panunumpa ay
malaya at kusang loob kong isinasaysay at pinagtitibay itong mga sumusunod:

1. Na ako ay may tinatangkilik na isang lagay na lupang tirikan (SOLAR), tumatayo sa Nayon ng San
Vicente, San Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T ISANG (771) METRONG
PARISUKAT ang laki, humigit kumulang, at makikilala sa tawag na Lote 17, Bloke 55, at pag-aari ng
Land Tenure Administration;

2. Na ang nasabing lote ay aking binibile, sa pamamagitan ng paghuhulog sa Land Tenure

Administration, at noong ika 30 ng Julio, 1959, ang Kasunduang sa Pagbibile (AGREEMENT TO
SELL No. 3787) ay ginawa at pinagtibay sa Lungsod ng Maynila, sa harap ng Notario Publico na si G.
Jose C. Tolosa, at lumalabas sa kaniyang Libro Notarial bilang Documento No. 13, Pagina No. 4; Libro
No. IV, Serie ng 1959;

3. Na dahilan sa ako'y matanda na at walang ano mang hanap buhay, ako ay nakatira at pinagsisilbihan
nang aking anak na si Francisca Herrera, at ang tinitirikan o solar na nasasabi sa unahan ay binabayaran
ng kaniyang sariling cuarta sa Land Tenure Administration;

4. Na alang-alang sa nasasaysay sa unahan nito, sakaling ako'y bawian na ng Dios ng aking buhay, ang
lupang nasasabi sa unahan ay aking ipinagkakaloob sa nasabi kong anak na FRANCISCA HERRERA,
Filipina, nasa katamtamang gulang, kasal kay Macario Berroya, kasalukuyang naninirahan at
tumatanggap ng sulat sa Nayong ng San Vicente, San Pedro Laguna, o sa kaniyang mga tagapagmana
at;

5. Na HINIHILING KO sa sino man kinauukulan, na sakaling ako nga ay bawian na ng Dios ng aking
buhay ay KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman sa pangalan ng aking anak na si
Francisca Herrera ang loteng nasasabi sa unahan.

SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng hinlalaki ng kanan kong kamay sa ibaba nito at
sa kaliwang gilid ng unang dahon, dito sa Lungsod ng Maynila, ngayong ika 7 ng Octubre, 1960.4

The said document was signed by two witnesses and notarized. The witnesses signed at the left-hand
side of both pages of the document with the said document having 2 pages in total. Margarita Herrera
placed her thumbmark5 above her name in the second page and at the left-hand margin of the first page
of the document.

The surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of the Deed of
Self-Adjudication before the then Court of First Instance of Laguna, Branch 1 in Binan, Laguna (now,
Regional Trial Court Branch 25). The case for annulment was docketed as Civil Case No. B-1263.6
On December 29, 1980, a Decision in Civil Case No. B-1263 (questioning the Deed of
Self-Adjudication) was rendered and the deed was declared null and void.7

During trial on the merits of the case assailing the Deed of Self-Adjudication, Francisca Herrera filed
an application with the NHA to purchase the same lots submitting therewith a copy of the "Sinumpaang
Salaysay" executed by her mother. Private respondent Almeida, as heir of Beatriz Herrera-Mercado,
protested the application.

In a Resolution8 dated February 5, 1986, the NHA granted the application made by Francisca Herrera,
holding that:

From the evidence of the parties and the records of the lots in question, we gathered the following facts:
the lots in question are portions of the lot awarded and sold to the late Margarita Herrera on July 28,
1959 by the defunct Land Tenure Administration; protestant is the daughter of the late Beatriz Herrera
Mercado who was the sister of the protestee; protestee and Beatriz are children of the late Margarita
Herrera; Beatriz was the transferee from Margarita of Lot Nos. 45, 46, 47, 48 and 49, Block 50; one of
the lots transferred to Beatriz, e.g. Lot 47, with an area of 148 square meters is in the name of the
protestant; protestant occupied the lots in question with the permission of the protestee; protestee is a
resident of the Tunasan Homesite since birth; protestee was born on the lots in question; protestee left
the place only after marriage but resided in a lot situated in the same Tunasan Homesite; her (protestee)
son Roberto Herrera has been occupying the lots in question; he has been there even before the death of
the late Margarita Herrera; on October 7, 1960, Margarita Herrera executed a "Sinumpaang Salaysay"
whereby she waived or transferred all her rights and interest over the lots in question in favor of the
protestee; and protestee had paid the lots in question in full on March 8, 1966 with the defunct Land
Tenure Administration.

This Office finds that protestee has a better preferential right to purchase the lots in question.9

Private respondent Almeida appealed to the Office of the President.10 The NHA Resolution was
affirmed by the Office of the President in a Decision dated January 23, 1987.11

On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her
estate which they submitted to the NHA. Said transfer of rights was approved by the NHA.12 The
NHA executed several deeds of sale in favor of the heirs of Francisca Herrera and titles were issued in
their favor.13 Thereafter, the heirs of Francisca Herrera directed Segunda Mercado-Almeida to leave
the premises that she was occupying.

Feeling aggrieved by the decision of the Office of the President and the resolution of the NHA, private
respondent Segunda Mercado-Almeida sought the cancellation of the titles issued in favor of the heirs
of Francisca. She filed a Complaint on February 8, 1988, for "Nullification of Government Lot's
Award," with the Regional Trial Court of San Pedro, Laguna, Branch 31.

In her complaint, private respondent Almeida invoked her forty-year occupation of the disputed
properties, and re-raised the fact that Francisca Herrera's declaration of self-adjudication has been
adjudged as a nullity because the other heirs were disregarded. The defendant heirs of Francisca
Herrera alleged that the complaint was barred by laches and that the decision of the Office of the
President was already final and executory.14 They also contended that the transfer of purchase of the
subject lots is perfectly valid as the same was supported by a consideration and that Francisca Herrera
paid for the property with the use of her own money.15 Further, they argued that plaintiff's occupation
of the property was by mere tolerance and that they had been paying taxes thereon.16

The Regional Trial Court issued an Order dated June 14, 1988 dismissing the case for lack of
jurisdiction.17 The Court of Appeals in a Decision dated June 26, 1989 reversed and held that the
Regional Trial Court had jurisdiction to hear and decide the case involving "title and possession to real
property within its jurisdiction."18 The case was then remanded for further proceedings on the merits.

A pre-trial was set after which trial ensued.

On March 9, 1998, the Regional Trial Court rendered a Decision setting aside the resolution of the
NHA and the decision of the Office of the President awarding the subject lots in favor of Francisca
Herrera. It declared the deeds of sale executed by NHA in favor of Herrera's heirs null and void. The
Register of Deeds of Laguna, Calamba Branch was ordered to cancel the Transfer Certificate of Title
issued. Attorney's fees were also awarded to private respondent.

The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an assignment of rights but a
disposition of property which shall take effect upon death. It then held that the said document must first
be submitted to probate before it can transfer property.

Both the NHA and the heirs of Francisca Herrera filed their respective motions for reconsideration
which were both denied on July 21, 1998 for lack of merit. They both appealed to the Court of Appeals.
The brief for the heirs of Francisca Herrera was denied admission by the appellate court in a Resolution
dated June 14, 2002 for being a "carbon copy" of the brief submitted by the NHA and for being filed
seventy-nine (79) days late.

On August 28, 2003, the Court of Appeals affirmed the decision of the Regional Trial Court, viz:

There is no dispute that the right to repurchase the subject lots was awarded to Margarita Herrera in
1959. There is also no dispute that Margarita executed a "Sinumpaang Salaysay" on October 7, 1960.
Defendant NHA claims that the "Sinumpaang Salaysay" is, in effect, a waiver or transfer of rights and
interest over the subject lots in favor of Francisca Herrera. This Court is disposed to believe otherwise.
After a perusal of the "Sinumpaang Salaysay" of Margarita Herrera, it can be ascertained from its
wordings taken in their ordinary and grammatical sense that the document is a simple disposition of her
estate to take effect after her death. Clearly the Court finds that the "Sinumpaang Salaysay" is a will of
Margarita Herrera. Evidently, if the intention of Margarita Herrera was to merely assign her right over
the lots to her daughter Francisca Herrera, she should have given her "Sinumpaang Salaysay" to the
defendant NHA or to Francisca Herrera for submission to the defendant NHA after the full payment of
the purchase price of the lots or even prior thereto but she did not. Hence it is apparent that she
intended the "Sinumpaang Salaysay" to be her last will and not an assignment of rights as what the
NHA in its resolution would want to make it appear. The intention of Margarita Herrera was shared no
less by Francisca Herrera who after the former's demise executed on August 22, 1974 a Deed of
Self-Adjudication claiming that she is her sole and legal heir. It was only when said deed was
questioned in court by the surviving heirs of Margarita Herrera's other daughter, Beatriz Mercado, that
Francisca Herrera filed an application to purchase the subject lots and presented the "Sinumpaang
Salaysay" stating that it is a deed of assignment of rights.19

The Court of Appeals ruled that the NHA acted arbitrarily in awarding the lots to the heirs of Francisca
Herrera. It upheld the trial court ruling that the "Sinumpaang Salaysay" was not an assignment of rights
but one that involved disposition of property which shall take effect upon death. The issue of whether it
was a valid will must first be determined by probate.

Petitioner NHA elevated the case to this Court.

Petitioner NHA raised the following issues:

A. WHETHER OR NOT THE RESOLUTION OF THE NHA AND THE DECISION OF THE
OFFICE OF THE PRESIDENT HAVE ATTAINED FINALITY, AND IF SO, WHETHER OR NOT
THE PRINCIPLE OF ADMINISTRATIVE RES JUDICATA BARS THE COURT FROM FURTHER
DETERMINING WHO BETWEEN THE PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD
OVER THE SUBJECT LOTS;

B. WHETHER OR NOT THE COURT HAS JURISDICTION TO MAKE THE AWARD ON THE
SUBJECT LOTS; AND

C. WHETHER OR NOT THE AWARD OF THE SUBJECT LOTS BY THE NHA IS ARBITRARY.

We rule for the respondents.

Res judicata is a concept applied in review of lower court decisions in accordance with the hierarchy of
courts. But jurisprudence has also recognized the rule of administrative res judicata: "the rule which
forbids the reopening of a matter once judicially determined by competent authority applies as well to
the judicial and quasi-judicial facts of public, executive or administrative officers and boards acting
within their jurisdiction as to the judgments of courts having general judicial powers . . . It has been
declared that whenever final adjudication of persons invested with power to decide on the property and
rights of the citizen is examinable by the Supreme Court, upon a writ of error or a certiorari, such final
adjudication may be pleaded as res judicata."20 To be sure, early jurisprudence were already mindful
that the doctrine of res judicata cannot be said to apply exclusively to decisions rendered by what are
usually understood as courts without unreasonably circumscribing the scope thereof and that the more
equitable attitude is to allow extension of the defense to decisions of bodies upon whom judicial
powers have been conferred.

In Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals,21 the Court held that the rule
prescribing that "administrative orders cannot be enforced in the courts in the absence of an express
statutory provision for that purpose" was relaxed in favor of quasi-judicial agencies.
In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial
power—that which is held by the courts. Quasi-judicial power is defined as that power of adjudication
of an administrative agency for the "formulation of a final order."22 This function applies to the actions,
discretion and similar acts of public administrative officers or bodies who are required to investigate
facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for
their official action and to exercise discretion of a judicial nature.23 However, administrative agencies
are not considered courts, in their strict sense. The doctrine of separation of powers reposes the three
great powers into its three (3) branches—the legislative, the executive, and the judiciary. Each
department is co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive
department may not, by its own fiat, impose the judgment of one of its agencies, upon the judiciary.
Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered to "determine whether
or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government."24 Courts have an expanded role under the 1987
Constitution in the resolution of societal conflicts under the grave abuse clause of Article VIII which
includes that duty to check whether the other branches of government committed an act that falls under
the category of grave abuse of discretion amounting to lack or excess of jurisdiction.25

Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 198026 where it
is therein provided that the Intermediate Appellate Court (now, Court of Appeals) shall exercise the
"exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards, of
the Regional Trial Courts and Quasi-Judicial agencies, instrumentalities, boards or commissions,
except those falling within the jurisdiction of the Supreme Court in accordance with the
Constitution…"27 and contends that the Regional Trial Court has no jurisdiction to rule over awards
made by the NHA.

Well-within its jurisdiction, the Court of Appeals, in its decision of August 28, 2003, already ruled that
the issue of the trial court's authority to hear and decide the instant case has already been settled in the
decision of the Court of Appeals dated June 26, 1989 (which has become final and executory on
August 20, 1989 as per entry of judgment dated October 10, 1989).28 We find no reason to disturb this
ruling. Courts are duty-bound to put an end to controversies. The system of judicial review should not
be misused and abused to evade the operation of a final and executory judgment.29 The appellate
court's decision becomes the law of the case which must be adhered to by the parties by reason of
policy.30

Next, petitioner NHA contends that its resolution was grounded on meritorious grounds when it
considered the application for the purchase of lots. Petitioner argues that it was the daughter Francisca
Herrera who filed her application on the subject lot; that it considered the respective application and
inquired whether she had all the qualifications and none of the disqualifications of a possible awardee.
It is the position of the petitioner that private respondent possessed all the qualifications and none of
the disqualifications for lot award and hence the award was not done arbitrarily.

The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it could not
bind the NHA.31 That, "insofar as [the] NHA is concerned, it is an evidence that the subject lots were
indeed transferred by Margarita Herrera, the original awardee, to Francisca Herrera was then applying
to purchase the same before it."32

We are not impressed. When the petitioner received the "Sinumpaang Salaysay," it should have noted
that the effectivity of the said document commences at the time of death of the author of the instrument;
in her words "sakaling ako'y bawian na ng Dios ng aking buhay…" Hence, in such period, all the
interests of the person should cease to be hers and shall be in the possession of her estate until they are
transferred to her heirs by virtue of Article 774 of the Civil Code which provides that:

Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance, of a person are transmitted through his death to another or
others either by his will or by operation of law.33

By considering the document, petitioner NHA should have noted that the original applicant has already
passed away. Margarita Herrera passed away on October 27, 1971.34 The NHA issued its resolution35
on February 5, 1986. The NHA gave due course to the application made by Francisca Herrera without
considering that the initial applicant's death would transfer all her property, rights and obligations to the
estate including whatever interest she has or may have had over the disputed properties. To the extent
of the interest that the original owner had over the property, the same should go to her estate. Margarita
Herrera had an interest in the property and that interest should go to her estate upon her demise so as to
be able to properly distribute them later to her heirs—in accordance with a will or by operation of law.

The death of Margarita Herrera does not extinguish her interest over the property. Margarita Herrera
had an existing Contract to Sell36 with NHA as the seller. Upon Margarita Herrera's demise, this
Contract to Sell was neither nullified nor revoked. This Contract to Sell was an obligation on both
parties—Margarita Herrera and NHA. Obligations are transmissible.37 Margarita Herrera's obligation
to pay became transmissible at the time of her death either by will or by operation of law.

If we sustain the position of the NHA that this document is not a will, then the interests of the decedent
should transfer by virtue of an operation of law and not by virtue of a resolution by the NHA. For as it
stands, NHA cannot make another contract to sell to other parties of a property already initially paid for
by the decedent. Such would be an act contrary to the law on succession and the law on sales and
obligations.38

When the original buyer died, the NHA should have considered the estate of the decedent as the next
"person"39 likely to stand in to fulfill the obligation to pay the rest of the purchase price. The
opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard as
to the award of the lots. Further, the Decision in the said Civil Case No. B-1263 (questioning the Deed
of Self-Adjudication) which rendered the deed therein null and void40 should have alerted the NHA
that there are other heirs to the interests and properties of the decedent who may claim the property
after a testate or intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of
the lots.

We need not delve into the validity of the will. The issue is for the probate court to determine. We
affirm the Court of Appeals and the Regional Trial Court which noted that it has an element of
testamentary disposition where (1) it devolved and transferred property; (2) the effect of which shall
transpire upon the death of the instrument maker.41

IN VIEW WHEREOF, the petition of the National Housing Authority is DENIED. The decision of the
Court of Appeals in CA-G.R. No. 68370 dated August 28, 2003, affirming the decision of the Regional
Trial Court of San Pedro, Laguna in Civil Case No. B-2780 dated March 9, 1998, is hereby
AFFIRMED.
No cost.

SO ORDERED.

Sandoval-Gutierrez, Corona, Azcuna, Garcia, JJ., concur.

G.R. No. 84450 February 4, 1991

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.

GLORIA UMALI y AMADO AND SUZETH UMALI y AMADO, defendants-appellants.

The Solicitor General for plaintiff-appellee.

Public Attorney's Office for defendants-appellants.

MEDIALDEA, J.:

In Criminal Case No. 85-473 of the Regional Trial Court, Branch 53, Lucena City, Gloria Umali and
Suzeth Umali were charged for violation of Section 4, Article 1 of the Dangerous Drugs Act of 1972
under an information which reads:

That on or about the 22nd day of April, 1985, at Recto Street, Poblacion, Municipality of Tiaong,
Province of Quezon, Philippines, and within the jurisdiction of this Honorable Court, the abovenamed
accused, conspiring and confederating together and mutually helping each other, did then and there
willfully, unlawfully and feloniously sell, deliver and give marijuana or Indian Hemp, a prohibited drug
to one Francisco Manalo y Arellano, without authority of law.

Contrary to law. (Rollo, pp. 7-8)

Upon arraignment, Gloria Umali entered a plea of "not, guilty" as accused Suzeth Umali remained at
large. After trial, the lower court rendered a decision on September 9, 1987, the dispositive portion
thereof states:

WHEREFORE, premises considered, this Court finds accused Gloria Umali guilty beyond reasonable
doubt of violating Sec. 4, Art. 1 (sic) of RA 6425 as amended, otherwise known as the Dangerous
Drugs Act of 1972, and is hereby sentenced to suffer the penalty of Reclusion Perpetua. Accused being
a detention prisoner is entitled to enjoy the privileges of her preventive imprisonment. The case against
Suzeth Umali, her co-accused in this case is hereby ordered ARCHIVED to be revived until the arrest
of said accused is effected. The warrant of arrest issued against her is hereby ordered reiterated.

SO ORDERED. (Rollo, p. 30)

Hence, this appeal from the lower court's decision with the following assignment of errors:

THE COURT A QUO GRAVELY ERRED IN GIVING WEIGHT AND CREDENCE TO THE
BIASED TESTIMONY OF FRANCISCO MANALO

II

THE COURT A QUO GRAVELY ERRED IN ADMITTING THE PROSECUTION'S EVIDENCE

WHICH WERE OBTAINED IN VIOLATION OF ACCUSED'S CONSTITUTIONAL RIGHTS
AGAINST ILLEGAL SEARCH AND SEIZURE

III

THE COURT A QUO GRAVELY ERRED IN DECLARING THAT ACCUSED NEVER DISPUTED
THE CLAIM THAT SHE WAS THE SOURCE OF MARIJUANA LEAVES FOUND IN THE
POSSESSION OF FRANCISCO MANALO ON APRIL 5, 1985 AND THAT WHICH WAS USED
BY PIERRE PANGAN RESULTING TO THE LATTER'S DRUG DEPENDENCY

IV

THE COURT A QUO GRAVELY ERRED IN FINDING ACCUSED GLORIA 1, GUILTY OF

VIOLATION OF DANGEROUS DRUGS ACT OF 1972 ON THE BASIS OF MERE
CONJECTURES AND NOT ON FACTS AND CIRCUMSTANCES PROVEN

THE COURT A QUO GRAVELY ERRED IN NOT FINDING THAT THE GUILT OF THE
ACCUSED DID NOT PASS THE TEST OF MORAL CERTAINTY. (Rollo, p. 49)

The antecedent facts of this case as recounted by the trial court are as follows:
On April 27, 1985 Pierre Pangan a minor was investigated by Pat. Felino Noguerra for drug
dependency and for an alleged crime of robbery. In the course of the investigation, the policemen
discovered that Pierre Pangan was capable of committing crime against property, only if under the
influence of drug (sic). As Pierre Pangan is a minor, the police investigators sought the presence of his
parents. Leopoldo Pangan, father of the minor was invited to the police headquarters and was informed
about the problem of his son. Mr. Pangan asked the police investigators if something could be done to
determine the source of the marijuana which has not only socially affected his son, but other minors in
the community. Previous to the case of Pierre Pangan was the case of Francisco Manalo, who was
likewise investigated by operatives of the Tiaong, Quezon Police Department and for which a case for
violation of the Dangerous Drug Act was filed against him, covered by Criminal Case No. 85-516
before Branch 60 of the Regional Trial Court of Lucena City. Aside from said case, accused Francisco
Manalo was likewise facing other charges such as concealment of deadly weapon and other crimes
against property. Pat. Felino Noguerra went to the Tiaong Municipal Jail, and sought the help of
Francisco Manalo and told him the social and pernicious effect of prohibited drugs like marijuana
being peddled to minors of Tiaong, Quezon. Manalo although a detention prisoner was touched by the
appeal made to him by the policeman and agreed to help in the identification of the source of the
marijuana. In return he asked the policeman to help him in some cases pending against him. He did not
negotiate his case for violating the dangerous drug act, as he has entered a plea of guilty to the charged
(sic) before the sala of Judge Eriberto Rosario.

With the consent of Francisco Manalo, Pfc. Sarmiento, Chief of the Investigation Division gave him
four (4) marked P5.00 bills to buy marijuana from sources known to him. The serial numbers of the
money was entered in the police blotter. The instruction was (sic) for Manalo to bring back the
prohibited drug purchased by him to the police headquarters. Few minutes there after (sic), Manalo
returned with two (2) foils of dried marijuana which lie allegedly bought from the accused Gloria
Umali. Thereafter, he was asked by the police investigators to give a statement on the manner and
circumstances of how he was able to purchase two (2) marijuana foils from accused Gloria Umali.
With the affidavit of Francisco Manalo, supported by the two (2) foils of marijuana. the Chief of the
Investigation Division petitioned the Court for the issuance of a search warrant as a justification for
them to search the house of Gloria Umali located at Rector (sic) Street. Poblacion, Tiaong, Quezon.
After securing the same, the police operatives, went to the house of Gloria Umali and served the search
warrant on her. Confiscated from the person of Gloria Umali were the four P5.00 bills with serial
numbers BA26943, DT388005, CC582000 and EW69873, respectively as reflected in the police blotter.
Likewise, present in the four (4) P5.00 bills were the letters T which were placed by the police
investigators to further identify the marked four (4) P5.00 bills. The searched (sic) in the house was
made in the presence of Brgy. Capt. Punzalan. The search resulted in the confiscation of a can of milo,
containing sixteen (16) foils of dried marijuana leaves which were placed in a tupperware and kept in
the kitchen where rice was being stored. The return of the search warrant reads as follows:

DATE: 22 April 1985

WHAT: "RAID"

WHERE: Residence of Dr. Emiliano Umali

Poblacion, Tiaong, Quezon

WHO: MBRS. OF TIAONG INP

TIME STARTED/ARRIVED AT SAID PLACE:

221410H Apr '85

SERVED TO: MRS. GLORIA UMALI

MR. EMILIANO UMALI

PERSON APPREHENDED/PROPERTY SEIZED/RECOVERED

Mrs. Gloria Umali 16 Aluminum Foils of

Mr. Emiliano Umali Suspected Marijuana leaves

TIME/DATE LEFT SAID PLACE: 221450H Apr '85

WITNESSES (sic) BY:

1. (Sgd) Reynaldo S. Pasumbal

2. (Sgd) Luisabel P. Punzalan

3. (Sgd) Arnulfo C. Veneracion

4. (Sgd) Isidro C. Capino

Samples of the marijuana leaves confiscated were submitted to the PC Came Laboratory for
examination. Capt. Rosalinda Royales of the PC crime Laboratory took the witness stand, testified and
identified the marijuana submitted to her and in a written report which was marked as Exhibit "G" she
gave the following findings:

Qualitative examination conducted on the specimen mentioned above gave POSITIVE result to the
tests fur marijuana.

In Criminal Case No. 85-516, Francisco Manalo was charged of having in his possession Indian Hemp
on April 5, 1985, in violation of Section 8, Article 11 of Republic Act 6425 as amended, otherwise as
the Dangerous Drugs Act of 1972. The Court in rendering against him disposed the case as follows:
In view of the foregoing, the Court hereby finds the accused Guilty beyond reasonable doubt of the
crime of illegal possession of "Indian Hemp" penalized under Sec. 8 of Article 6425 (sic); as amended
otherwise known as the Dangerous Drugs Act of 1972 and the Court hereby sentences him to suffer an
imprisonment of two (2) years and four (4) months of prision correccional to six (6) years and one (1)
day of Prision Mayor and to pay a fine of Six Thousand Pesos (P6,000.00). Let the period of detention
of the accused be credited to his sentence.

Accused never disputed the claim of Francisco Manalo that the marijuana found in his possession on
April 5, 1985 in the municipality of Tiaong, Quezon was sold to him by the accused Gloria Umali. The
defense also did not dispute the claim of the prosecution that in the investigation of Pierre Pangan, the
police investigator came to know that Gloria Umali was the source of the marijuana leaves which he
used and smoked resulting in his present drug dependency. (Rollo, pp. 22-27)

The appellant vehemently denied the findings of the lower court and insisted that said court committed
reversible errors in convicting her. She alleged that witness Francisco Manalo is not reputed to be
trustworthy and reliable and that his words should not be taken on its face value. Furthermore, he
stressed that said witness has several charges in court and because of his desire to have some of his
cases dismissed, he was likely to tell falsehood.

However, the plaintiff-appellee through the Solicitor General said that even if Francisco Manalo was
then facing several criminal charges when he testified, such fact did not in any way disqualify him as a
witness. "His testimony is not only reasonable and probable but more so, it was also corroborated in its
material respect by the other prosecution witnesses, especially the police officers." (Rollo, pp. 83-84)

The appellant also claimed that the marked money as well as the marijuana were confiscated for no
other purpose than using them as evidence against the accused in the proceeding for violation of
Dangerous Drugs Act and therefore the search warrant issued is illegal from the very beginning. She
stressed that there can be no other plausible explanation other than that she was a victim of a frame-up.

In relation to this contention, the Solicitor General noted that it is not true that the evidences submitted
by the prosecution were obtained in violation of her constitutional right against illegal search and
seizure.

Furthermore, the appellant contended that the essential elements of the crime of which she was charged
were never established by clear and convincing evidence to warrant the findings of the court a quo. She
also stressed that the court's verdict of conviction is merely based on surmises and conjectures.

However, the Solicitor General noted that the positive and categorical testimonies of the prosecution
witnesses who had personal knowledge of the happening together with the physical evidence submitted
clearly prove the guilt beyond reasonable doubt of accused-appellant for violation of the Dangerous
Drugs Act.

Time and again, it is stressed that this Court is enjoined from casually modifying or rejecting the trial
court's factual findings. Such factual findings, particularly the trial judge's assessment of the credibility
of the testimony of the witnesses are accorded with great respect on appeal for the trial judge enjoys the
advantage of directly and at first hand observing and examining the testimonial and other proofs as
they are presented at the trial and is therefore better situated to form accurate impressions and
conclusions on the basis thereof (See People v. Bravo, G.R. No. 68422, 29 December, 1989,180 SCRA
694,699). The findings of the trial court are entitled to great weight, and should not be disturbed on
appeal unless it is shown that the trial court had overlooked certain facts of weight and importance, it
being acknowledged that the court below, having seen and heard the witnesses during the trial, is in a
better position to evaluate their testimonies (People v. Alverez y Soriano, G.R. No. 70831, 29 July
1988, 163 SCRA 745, 249; People v. Dorado, G.R. No. L-23464, October 31, 1969, 30 SCRA 53;
People v. Espejo, G.R. No. L-27708, December 19, 1970, 36 SCRA 400). Hence, in the absence of any
showing that the trial court had overlooked certain substantial facts, said factual findings are entitled to
great weight, and indeed are binding even on this Court.

Rule 130, Section 20 of the Revised Rules of Court provides that:

Except as provided in the next succeeding section, all persons who can perceive, and perceiving can
make known their perception to others may be witnesses.

Religious or political belief, interest in the outcome of the case, or conviction of a crime unless
otherwise provided by law, shall not be a ground for disqualification.

The phrase "conviction of a crime unless otherwise provided by law" takes into account Article 821 of
the Civil Code which states that persons 91 convicted of falsification of a document, perjury or false
testimony" are disqualified from being witnesses to a will." (Paras, RULES OF COURT
ANNOTATED, Vol. IV First Ed., p. 44)

Since the witness Francisco Manalo is not convicted of any of the above-mentioned crimes to
disqualify him as a witness and this case does not involve the probate of a will, We rule that the fact
that said witness is facing several criminal charges when he testified did not in any way disqualify him
as a witness.

The testimony of a witness should be given full faith and credit, in the absence of evidence that he was
actuated by improper motive (People v. Melgar, G.R. No. 75268,29 January 1988, 157 SCRA 718).
Hence, in the absence of any evidence that witness Francisco Manalo was actuated by improper motive,
his testimony must be accorded full credence.

Appellant's contention that she was a victim of a "frame-up" is devoid of merit.1âwphi1 "Courts must
be vigilant. A handy defense in such cases is that it is a frame-up and that the police attempted to extort
from the accused. Extreme caution must be exercised in appreciating such defense. It is just as easy to
concoct as a frame-up. At all times the police, the prosecution and the Courts must be always on guard
against these hazards in the administration of criminal justice." (People v. Rojo, G.R. No. 82737, 5 July
1989, 175 SCRA 119)

The appellant's allegation that the search warrant is illegal cannot also be given any merit. "Where
marked peso bills were seized by the police as a result of the search made on the appellant, the
admissibility of these marked peso bills hinges on the legality of the arrest and search on the person of
the appellant" (People v. Paco, G.R. No. 76893, 27 February 1989, 170 SCRA 681). Since the search is
predicated on a valid search warrant, absent any showing that such was procured maliciously the things
seized are admissible in evidence.

Appellant argues that the lower court's verdict is based on surmises and conjectures, hence the essential
elements of the crime were never established by clear and convincing evidence.

Conviction cannot be predicated on a presumption or speculation. A conviction for a criminal offense

must be based on clear and positive evidence and not on mere presumptions (Gaerlan v. Court of
Appeals, G.R. No. 57876, 6 November 1989, 179 SCRA 20). The prosecution's evidence consisted of
the testimony of witness Manalo and the law enforcers as well as the physical evidence consisting of
the seized marked peso bills, the two (2) foils of marijuana purchased and the can containing sixteen
(16) aluminum foils of dried marijuana.

Credence is accorded to the prosecution's evidence more so as it consisted mainly of testimonies of

policemen. Law enforcers are presumed to have regularly performed their duty in the absence of proof
to the contrary (People v. Tejada, G.R. No. 81520, 21 February 1989, 170 SCRA 497). Hence, in the
absence of proof to the contrary, full credence should be accorded to the prosecution's evidence. The
evidence on record sufficiently established that Umali gave two (2) foils of marijuana to witness
Manalo for which she was given and received four (4) marked five peso (P5.00) bills, and fully
supports conviction for drug pushing in violation of Section 4 Article II of the Dangerous Drugs Act.

Thus, the Court has no option but to declare that the trial court did not err in finding, on the basis of the
evidence on record, that the accused-appellant Gloria Umali violated Section 4, Article II of the
Dangerous Drugs Act.

Pursuant to recent jurisprudence and law, the case is covered by Section 4 of Republic Act No. 6425 as
amended by Presidential Decree No. 1675, effective February 17, 1980, which raised the penalty for
selling prohibited drugs from life imprisonment to death and a fine ranging from twenty to thirty
thousand pesos (People v. Adriano, G.R. No. 65349, October 31, 1984, 133 SCRA 132) Thus, the trial
court correctly imposed the penalty of life imprisonment but failed to impose a fine.

ACCORDINGLY, the appealed decision is AFFIRMED with the modification that a fine of twenty
thousand pesos (P20,000.00) be imposed, as it is hereby imposed, on the accused-appellant.

SO ORDERED.

Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.