G.R. Nos. 208828-29 August 13, 2014 his stead, SILVERIO SR. was appointed as the new administrator.
VERIO SR. was appointed as the new administrator. Thereafter,
RICARDO C. SILVERIO, SR., Petitioner,
vs.
RICARDO S. SILVERIO, JR., CITRINE HOLDINGS, INC., MONICA P.
OCAMPO and ZEE2 RESOURCES, INC.,Respondents.
Before the Court is a petition for review under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, to reverse and set aside the Decision 1 dated
March 8, 2013 of the Court of Appeals (CA) insofar as CA-G.R. SP Nos.
121173 and 122024 are concerned, and Resolution2 dated July 4, 2013
denying petitioner's Motion for Partial Reconsideration. The CA nullified the
preliminary injunction issued by the Regional Trial Court (RTC) of Makati City
("intestate court"), Branch 57 in Sp. Proc. No. M-2629 and reversed said
court's Order dated August 18, 2011 declaring the sales and derivative titles
over two properties subject of intestate proceedings as null and void.
The factual and procedural antecedents of the case, as summarized by the CA,
are as follows: The late Beatriz S. Silverio died without leaving a will on
October 7, 1987. She was survived by her legal heirs, namely: Ricardo C.
Silverio, Sr. (husband), Edmundo S. Silverio (son), Edgardo S. Silverio (son),
Ricardo S. Silverio, Jr. (son), Nelia S.Silverio-Dee (daughter), and Ligaya S.
Silverio (daughter). Subsequently, an intestate proceeding (SP PROC. NO. M-
2629) for the settlement of her estate was filed by SILVERIO, SR.
In the course of the proceedings, the parties filed different petitions and appeal
challenging several orders ofthe intestate court that went all the way up to the
Supreme Court. To better understand the myriad of factual and procedural
antecedents leading to the instant consolidated case, this court will resolve the
petitions in seriatim.
The Petitions
CA-G.R. SP No. 121172
The first petition of the three consolidated petitions is CA-G.R. SP No. 121172
wherein petitioner, RICARDO S. SILVERIO JR. ("SILVERIO JR.") assails the
Order ofthe intestate court dated 16 June 2011 reinstating RICARDO
SILVERIO SR. ("SILVERIO SR.") as administrator to the estate of the late
Beatriz Silverio.
The administrator first appointed by the Court was EDGARDO SILVERIO
("EDGARDO"), but by virtue of a Joint Manifestation dated 3 November 1999
filed by the heirs of BEATRIZ D. SILVERIO, the motion to withdraw as
administrator filed by EDGARDO was approved by the intestate court and in
Page 1 of 77
an active exchange of pleadings to remove and appoint a new administrator
ensued between SILVERIO SR. and SILVERIO JR. The flip-flopping
appointment of administrator is summarized below:
In an Order dated 3 January 2005, SILVERIO SR. was removed as
administrator and in his stead, SILVERIO, JR. was designated as the new
administrator. A motion for reconsideration was separately filed by SILVERIO
SR. and Nelia Silverio-Dee ("SILVERIO-DEE") and on 31 May 2005, the
intestate court issued an Omnibus Order affirming among others, the Order of
3 January 2005. Inthe same Order, the intestate court also granted the motion
of SILVERIO JR. to take his oath as administrator effective upon receipt of the
order and expunged the inventory report filed by SILVERIO SR.
On 12 December 2005 the intestate court acting on the motion filed by
SILVERIO SR. recalled the Order granting letters of administration to
SILVERIO JR. and reinstated SILVERIO SR. as administrator. Then again, the
intestate court acting on the motion for partial consideration to the Order dated
12 December 2005 filed by SILVERIO JR. issued an Omnibus Order dated 31
October 2006 upholding the grant of Letters of Administration to SILVERIO JR.
and removed SILVERIO SR., ad administrator for gross violation of his duties
and functions under Section 1, Rule 81 of the Rules of Court.
SILVERIO SR. moved for reconsideration of the above Order whereas
SILVERIO-DEE on the other hand, filed a Petition for Certiorari before the
Court of Appeals docketed as CA-G.R. SP No. 97196. On 28 August 2008, the
Court of Appeals (Seventh Division) rendered a decision reinstating SILVERIO,
SR. as administrator, the decretal portion of the Order reads:
"WHEREFORE, the petition is GRANTED. The portions of the Omnibus Order
upholding the grant of letters of administration to and the taking of an oath of
administration by Ricardo Silverio, Jr., as well as the removal of Ricardo
Silverio, Sr. as administrator to the Estate of Beatriz Silverio, are declared
NULL and VOID. The writ of preliminary injunction earlier issued is MADE
PERMANENT in regard to the said portions. Respondent RTC is ORDERED to
reinstate Ricardo Silverio, Sr. as administrator to the Estate of Beatriz Silverio.
Costs against the Private Respondents.
SO ORDERED."
SILVERIO JR. filed a Petition for review on Certioraribefore the Supreme Court
docketed as G.R. No. 185619 challenging the 28 Augsut 2008 decision of the
Court of Appeals. On 11 February 2009, the Supreme Court issued a
resolution denying the petition for failure to sufficiently show any reversible
error inthe assailed judgment to warrant the exercise by the Court of
discretionary appellate jurisdiction. Acting on SILVERIO JR.’s motion for
reconsideration, the Supreme Court on 11 February 2011, denied the motion
with finality. An entry of judgment was made on 29 March 2011.
On 25 April 2011 SILVERIO SR. filed before the intestate court, an urgent
motion to be reinstated as administrator of the estate. Acting on the motion, the
intestate court issued the now challenged Order dated 16 June 2011, the
pertinent portion of the Order reads:
xxxx
"WHEREFORE, upon posting of a bond in the sum of TEN MILLION PESOS,
the same to be approved by this Court, Mr. Ricardo C. Silverio, Sr. is hereby
ordered reinstated as the Administrator to the estate of the late Beatriz Silverio
and to immediately take his oath as such, and exercise his duties and functions
as are incumbent under the law upon the said position. xxx."
xxxx
CA-G.R. SP No. 121173
xxxx
On 15 March 2011, heirs SILVERIO JR., EDMUNDO and LIGAYA represented
by her legal guardian moved for the disqualification and/or inhibition of JUDGE
GUANLAO, JR. based on the following grounds: (1) Absence of the written
consent of all parties in interest allowing JUDGE GUANLAO, JR. to continue
hearing the case considering that he appeared once as counsel in the intestate
proceedings; (2) JUDGE GUANLAO, JR. has shown bias and partiality in favor
of SILVERIO SR. by allowing the latter to pursue several motions and even
issued a TRO in violation of the rules against forum shopping; (3) Heir
LIGAYA’s Petition for Support and Release of Funds for Medical Support has
not been resolved; and (4) It is in the best interest of all the heirs that the
proceedings be presided and decided by the cold neutrality of an impartial
judge.
On 23 March 2011, JUDGE GUANLAO, JR. issued an order denying the
Motion for Disqualification and/or Inhibition. The movants filed a motion for
reconsideration but the same was denied in an order dated 14 June 2011.
Hence, the instant petition.
xxxx
CA-G.R. SP NO. 122024
Page 2 of 77
xxxx
The intestate court in its Omnibus Order dated 31 October 2006, ordered
among others, the sale of certain properties belonging to the estate. The
portion of the order which is pertinent to the present petition reads:
"WHEREFORE, above premises considered, this Court for the foregoing
reasons resolves to grant the following:
(1) xxx
(2) xxx
(3) Allowing the sale of the properties located at (1) No. 82 Cambridge
Circle, Forbes Park, Makati City, covered by T.C.T. No. 137155 issued
by Register of Deeds of Makati City; (2) No. 3 Intsia Road, Forbes
Park, Makati City covered by T.C.T. No. 4137154 issued by the
Register of Deeds of Makati City; and (3) No. 19 Taurus St., Bel-Air
Subd. Makati City covered by TCT No. 137156 issued by the Register
of Deeds of Makati City to partially settle the intestate estate of the late
Beatriz S. Silverio, and authorizing the Administrator to undertake the
proper procedure or transferring the titles involved to the name of the
estate; and
(4) To apply the proceeds of the sale mentioned in Number 3 above to
the payment of taxes, interests, penalties and other charges, if any,
and todistribute the residue among the heirs Ricardo C. Silverio, Sr.,
Ricardo S. Silverio, Jr., Ligaya S. Silverio represented by Legal
Guardian Nestor S. Dela Merced II, Edmundo S. Silverio and Nelia S.
SilverioDee in accordance with the law on intestacy.
SO ORDERED."
By virtue of the aforesaid Order, SILVERIO, JR. on 16 October 2007 executed
a Deed of Absolute Salein favor of CITRINE HOLDINGS, Inc. ("CITRINE") over
the property located at No. 3 Intsia Road, Forbes Park, Makati City. CITRINE
became the registered owner thereof on 06 September 2010 as evidenced by
TCT No. 006-201000063.
A Deed of Absolute Sale was likewise executed in favor of Monica P. Ocampo
(notarized on September 16, 2010) for the lot located at No. 82 Cambridge
Circle, Forbes Park, Makati City. On 23 December 2010, TCT No. 006-
2011000050 was issued toMonica P. Ocampo. The latter subsequently sold
said property to ZEE2 Resources, Inc. (ZEE2) and TCT No. 006-2011000190
was issued on 11 February 2011 under its name.
In the interim, or on 12 December 2006 SILVERIO-DEE filed a petition for
certioraribefore the Court of Appeals docketed as CA-G.R. SP No. 97196 with
prayer for injunctive relief. As prayed for, the Court of Appeals issued a
Temporary Restraining Order (TRO) on 5 February 2007. On 4 July 2007, the
Court issueda Writ of Preliminary Injunction conditioned upon the posting of the
bond in the amount of two million pesos (Php2,000,000.00). SILVERIO-DEE
posted the required bond on February 5, 2007 but in an order dated 3 January
2008, the Court ruled that the bond posted by SILVERIO-DEE failed to comply
with A.M. No. 04-7-02-SC. The Court, however, did not reverse the ruling
granting the injunction but instead ordered SILVERIO-DEE to comply with A.M.
No. 04-7-02-SC. The Court also increased the bond from two million to ten
million. On 29 February 2008, the Court issued a Resolution approving the ten
million bond and issued the Writ of Preliminary Injunction. Eventually, on 28
August 2008 the Court of Appeals (Seventh Division) issued a decision
reinstating SILVERIO SR. as administrator and declaring the Writ of
Preliminary Injunction permanent in regard to the appointment of administrator.
On 04 February 2011 SILVERIO SR. filed an Urgent Application for the
Issuance of Temporary Restraining Order/Preliminary Prohibitory Injunction
(With Motion For the Issuance of Subpoena Ad Testificandum and Subpoena
Duces Tecum) praying among others, that a TRO be issued restraining and/or
preventing SILVERIO, JR., MONICA OCAMPO, CITRINE HOLDINGS, INC.
and their successors-in-interest from committing any act that would affect the
titles to the three properties.
On 14 February 2011, SILVERIO SR. filed an Urgent Omnibus Motion (a) To
Declare as Null and Void the Deed of Absolute Sale dated 16 September 2010;
(b) To cancel the Transfer Certificate of Title No. 006-2011000050; and (c) To
reinstate the Transfer Certificate of Title No. 2236121 in the name of Ricardo
C. SilverioSr. and the Intestate Estate of the late Beatriz S. Silverio.
On 28 February 2011 the Intestate Court issued an Order granting a
Temporary Restraining Order enjoining SILVERIO JR., their agent or anybody
acting in their behalf from committing any act that would affect the titles to the
properties and enjoining the Register of Deeds of Makati City from accepting,
admitting, approving, registering, annotating or in any way giving due course to
whatever deeds, instruments or any other documents involving voluntary or
involuntary dealings which may have the effect of transferring, conveying,
encumbering, ceding, waiving, alienating, or disposing in favor of any individual
or any entity of the subject properties. Subpoena ad testificandumand duces
tecumwas also issued by the intestate court requiring SILVERIO, JR., MONICA
OCAMPO and ALEXANDRA GARCIA of CITRINE to testify and bring with
them any books and documents under their control to shed light on the
circumstances surrounding the transaction involving the properties in question.
Page 3 of 77
On 9 March 2011, SILVERIO Sr. filed a Supplement to the Urgent Omnibus
Motion dated 14 February 2011. On 18 August 2011, the intestate court
rendered the now assailed Order the decretal portion of the Order is quoted
hereunder:
"WHEREFORE, this Court hereby orders that:
1. The Deed of Absolute Sale dated 16 September 2010 as VOID:
2. The Transfer Certificate of Title No. 006-2011000050 in the name of
defendant MONICA OCAMPO or any of her successors-in-
interestincluding all derivative titles, as NULL AND VOID;
3. The Transfer Certificate of Title TCT No. 006-2011000190 in the
name of ZEE2 RESOURCES, INC. or any of its successors-in-interest
including all derivative titles, as NULL AND VOID;
4. (T)he Register of Deeds of Makati City to CANCEL Transfer
Certificate of Title No. 006-2011000050, Transfer Certificate of Title
No. 006-2011000190 and all of its derivative titles; and 5. Reinstating
the Transfer Certificate of Title No. 2236121 in the name of RICARDO
C. SILVERIO, SR. AND THE INTESTATE ESTATE OF THE LATE
BEATRIZ SILVERIO, and AS TO THE INTSIA PROPERTY:
1. The Register of Deeds ofMakati City to CANCEL Transfer
Certificate ofTitle No. 006-2010000063, in the name of
CITRINE HOLDINGS, INC. and all of its derivative titles; and
2. The reinstatement of Transfer Certificate of Title No. 223612
in the name of RICARDO C. SILVERIO, SR. and the
INTESTATE ESTATE OF THE LATE BEATRIZ SILVERIO.
SO ORDERED."
x x x x3
The consolidated petitions for certiorari filed by respondent Ricardo S. Silverio,
Jr. ("Silverio, Jr.") before the CA questioned the following issuances of the
intestate court: CA-G.R. SP No. 121172 – Order dated June 16, 2011
reinstating Silverio, Sr. as Administrator; CA-G.R. SP No. 121173 – (1) Order
dated March 23,2011 granting Silverio, Sr.’s application for preliminary
injunction enjoining Silverio, Jr. or anyone acting on their behalf from
committing any act that would affect the titles to the subject properties and
enjoining the Register of Deeds of Makati City from accepting, admitting,
approving, registering, annotating or in any way giving due course to whatever
deeds, instruments or any other documents involving the Cambridge and Intsia
properties, (2) Order dated March 23, 2011 which denied Silverio, Jr.’s motion
or disqualification and/or inhibition of Judge Guanlao, Jr., and (3) Order dated
June 14, 2011 denying the motion for reconsideration of the March 23, 2011
Order (granting application for preliminary injunction); and in CA-G.R. SP No.
122024 – Order dated August 18, 2011 declaring the Deed of Absolute Sale,
TCT and all derivative titles over the Cambridge and Intsiaproperties as null
and void.
On March 8, 2013, the CA rendered its Decision, the falloof which reads:
WHEREFORE, based on the foregoing premises, the Court hereby disposes
and orders the following:
1. The petition in CA G.R. SP No. 121172is DENIEDfor lack of merit.
Accordingly, the 16 June 2011 Order of the Regional Trial Court of
Makati City, Branch 57 reinstating MR. RICARDO C. SILVERIO, SR.
as Administrator is AFFIRMED.
2. The petition in CA GR. S.P. No. 121173is partly DENIEDfor lack of
merit insofar as it questions the 23 March 2011 Order denying
RICARDO SILVERIO, JR’s Motion for Disqualification and/or Inhibition
of Judge Honorio E. Guanlao, Jr. The petition is partly GRANTEDin
that the Preliminary Injunction issued by the Regional Trial Court of
Makati City, Branch 57 is herebydeclared NULL and VOID for being
issued with grave abuse of discretion.
3. The petition in CA G.R.-S.P. No. 122024is GRANTED. Accordingly,
the 18 August 2011 Order declaring the Deed of Absolute Sale,
Transfer Certificate of Title and all derivative titles over the Cambridge
and Intsia Property null and void is hereby REVERSEDand SET
ASIDE.
SO ORDERED.4
Ricardo C. Silverio, Sr. (petitioner) filed a Motion for Partial
Reconsideration5 "insofar as its ruling in CA-G.R. SP No. 122024" praying that
the August 18, 2011 Order of the intestate court be affirmed. By Resolution
dated July 4, 2013, the CA denied his motion for partial reconsideration.
Hence, this petition contending thatthe CA committed a reversible error in
upholding the validity of the Intsia and Cambridgeproperties upon the ground
that the intestate court cannotannul the sales as it has a limited jurisdiction only
and which does not includeresolving issues of ownership. It is asserted that the
Page 4 of 77
CA should nothave stopped there and looked into the nature of the properties
sold, which formed part of the conjugal partnership of Ricardo Silverio, Sr. and
Beatriz S. Silverio.
Petitioner seeks the reinstatement of the order of the intestate court annulling
the sales of the Cambridge and Intsia properties. In the alternative, should the
said sales be upheld, petitioner prays that this Court (1) declare the sales to be
valid only to the extent of 50% net remainder share of the late Beatriz less the
corresponding shares therefrom of petitioner and the other legal compulsory
heirs, and (2) order respondent Silverio, Jr. to account for the proceeds of
sales for distribution of the residue among the legal/compulsory heirs.
In their Comment, respondents Silverio, Jr., Monica Ocampo and Citrine
Holdings, Inc. argued that the intestate court should not have ruled on the
validity of the sale of the subject properties to third parties after it itself had
authorized their disposal in partial settlementof the estate, especially so when
separate actions assailing the new titles issued to said third parties were
already instituted by petitioner.
As to the issue of alleged lack ofprior consent of petitioner to the aforesaid
sales as the surviving spouses with a 50% conjugal share in the subject
properties, respondents point out that such is belied by the October 31, 2006
Order of the intestate court, which clearly showed that counsels of all the heirs
were present at the hearing of June 16, 2006 and no objection was made by
them to the sale of the properties and the partial settlement of the Estate of
Beatriz S. Silverio, together with the transfer of titles of these properties in the
name of the Estate as prayed for in petitioner’s Manifestation and Motion dated
April 19, 2006. Petitioner had not challenged or appealed the said order
authorizing the sale of the subject properties. Thus, it is too late in the day for
petitioner to raise this factual issue before this Court, not to mention that it
cannot be ventilated in the present appeal by certiorari as thisCourt is not a
trier of facts.
Respondent ZEE2 Resources Corporation filed its Comment contending that
the intestate court improperly nullified the titles despite the fact that the present
registered owners, who are indispensable parties, were not impleaded. Indeed,
a Torrens title cannot be collaterally attacked and may be cancelled only in a
direct proceeding brought for the purpose. Respondent points out that
petitioner himself recognized thata direct action is required to annul a Torrens
title ashe initially instituted two civil complaints before the RTC of Makati City
seeking to annul, among others, the TCT’s issued to respondent Ocampo for
the Cambridge property. After failing to secure restraining orders in these two
civil cases, petitioner filed in the intestate court his Urgent OmnibusMotion
dated February 14, 2011 to annul the said titles, including that of ZEE2. In any
case, respondent maintains that it is a buyer of good faith and for value, of
which the intestate court never made a determination nor did the aforesaid
Urgent Omnibus Motion and Supplement to the Omnibus Motion dated March
4, 2011 contain allegations indicating that respondent ZEE2 was not a buyer in
good faith and for value.
According to respondent ZEE2, petitioner’s act of filing a separate complaint
with application for a temporary restraining order (TRO) and preliminary
injunction on January 31, 2011 in another court (Civil Case Nos. 11-084 of the
RTC of Makati City, Branch 143) constitutes willful and deliberate forum
shopping asthe former also prayedsimilar primary reliefs and setting up the
alleged nullity of the subject deeds of absolute sale as those raised in the
Urgent Omnibus Motion and Supplement to the Urgent Omnibus Motion filed in
the intestate court.
At the outset, we emphasize that the probate court having jurisdiction over
properties under administration has the authority not only to approve any
disposition or conveyance, but also to annul an unauthorized sale by the
prospective heirs or administrator. Thus we held in Lee v. Regional Trial Court
of Quezon City, Branch 856:
Juliana Ortañez and Jose Ortañez sold specific properties of the estate,
without court approval. It is well-settled that court approval is necessary for the
validity of any disposition of the decedent’s estate. In the early case of Godoy
vs. Orellano, we laid down the rule that the sale of the property of the estate by
an administrator without the order of the probate court is void and passes no
title to the purchaser. And in the case of Dillena vs. Court of Appeals, we ruled
that: x x x x
It being settled that property under administration needs the approval of the
probate court before it can be disposed of, any unauthorized disposition does
not bind the estate and is null and void. Asearly as 1921 in the case of Godoy
vs. Orellano(42 Phil 347), We laid down the rule that a sale by an administrator
of property of the deceased, which is not authorized by the probate court is null
and void and title does not pass to the purchaser.
There is hardly any doubt that the probate court can declare null and void the
disposition of the property under administration, made by private respondent,
the same having been effected without authority from said court. It is the
probate court that has the power to authorize and/or approve the sale (Section
4 and 7, Rule 89), hence, a fortiori, it is said court that can declare it null and
void for as long as the proceedings had not been closed or terminated. To
uphold petitioner’s contention that the probate court cannot annul the
unauthorized sale, would render meaningless the power pertaining to the said
court. (Bonga vs. Soler, 2 SCRA 755). (italics ours) Our jurisprudence is
therefore clear that (1) any disposition of estate property by an administrator or
prospective heir pending final adjudication requires court approval and (2) any
Page 5 of 77
unauthorized disposition of estate property can be annulled by the probate
court, there being no need for a separate action to annul the unauthorized
disposition. (Emphasis supplied.)
In this case, the sale of the subject properties was executed by respondent
Silverio, Jr. with prior approval of the intestate court under its Omnibus Order
dated October 31, 2006. Subsequently, however, the sale was annulled by the
said court on motion by petitioner.
In reversing the intestate court’s order annulling the sale of the subject
properties, the CA noted that said ruling is anchored on the fact that the deeds
of sale were executed at the time when the TRO and writ of preliminary
injunction issued in CA-G.R. SP No. 97196 was still in effect. It then concluded
that the eventual decision in the latter case making the writ of preliminary
injunction permanent only with respect to the appointment of petitioner as
administrator and not to the grant of authority to sell mooted the issue of
whether the sale was executed at the time when the TRO and writ of
preliminary injunction were in effect.
The CA’s ruling on this issue is hereunder quoted:
The more crucial question that needs to be addressed is: Whether the authority
to sell the properties in question granted under the October 31, 2006 Omnibus
Order, was nullified by the decision of the Court of Appeals in CA-G.R. SP No.
97196. A look at the dispositive portion of the decision in CA-G.R. SP No.
97196 would lead us to reasonably conclude that the grant of authority to sell is
still good and valid. The fallo of the decision reads:
"WHEREFORE, the petition is GRANTED. The portions of the Omnibus Order
upholding the grant of letters of administration to and the taking of an oath of
administration by Ricardo Silverio, Jr., as well as the removal of Ricardo
Silverio, Sr. as administrator to the Estate of Beatriz Silverio, are declared
NULL and VOID. The writ of preliminary injunction earlier issued is made
permanent in regard to the said portions. Respondent RTC is ORDERED to
reinstate Ricardo Silverio, Sr. as administrator of the Estate of Beatriz Silverio.
Costs against the Private Respondents.
SO ORDERED."
The October 31, 2006 Omnibus Order of the testate [sic] court in so far as it
authorizes the saleof the three properties in question was not declared by the
Court of Appeals, Seventh Division as null and void.It is axiomatic that it is the
dispositive portion of the decision that finally invests rights upon the parties,
sets conditions for the exercise of those rights, and imposes the corresponding
duties or obligations.
From all the foregoing, We declare that it was grave abuse of discretion on the
part of the intestate court when it ordered the sale of the Cambridge Property
and Intsia Property as NULL and VOID citing as justification the decision of the
Court of Appeals, Seventh Division in CAG.R. SP No. 97196. To reiterate, the
injunction order which was made permanent by the Court of Appeals (Seventh
Division) was declared to be limited only to the portion ofthe Omnibus Order
that upheld the grant of letters of administrationby SILVERIO, JR. and the
removal of SILVERIO, SR. as administrator and nothing else.
Anent the preliminary injunction issued by the intestate court in its Order dated
23 March 2011 and challenged by SILVERIO JR. in CA-G.R. SP No. 121173,
we find that it was issued with grave abuse of discretion as it was directed
against acts which were already [fait]accompli. The preliminary injunction
sought to: 1) restrain SILVERIO JR., their agents, or anybody acting in their
behalf or any person from committing any act that would affect the titles to the
subject properties belonging to the Intestate Estate of the late Beatriz Silverio
and (2) enjoining the Register of Deeds of Makati City from accepting,
admitting, approving, registering, annotating or in any giving due course to
whatever deeds, instruments or any other documents involving voluntary or
involuntary dealings which may have the effect of transferring, conveying,
encumbering, ceding, waiving, alienating or disposing in favor of any individual
or any entity the above-enumerated properties belonging to the Intestate
Estate of the late Beatriz Silverio. However, the records show that when the
preliminary injunction was issued on 23 March 2011 new titles over the
disputed properties were already issued to CITRINE HOLDINGS, INC. and
ZEE2 RESOURCES INC.7 (Emphasis supplied.)
We affirm the CA.
It bears to stress that the October 31, 2006 Omnibus Order was issued by the
intestate court acting upon pending motions filed by petitioner and respondent
Silverio, Jr., father and son, respectively, who are the central figures in the now
decade-old controversy over the Intestate Estate of the late Beatriz S. Silverio.
The intestate court flip-flopped in appointing as administrator of the estate
petitioner and respondent Silverio, Jr., their personal conflicts becoming more
evident to the intestate court as the proceedings suffered delays. At the
hearing of the urgent motion filed by Edmundo Silverio to sell the subject
properties and partially settle the estate, the much awaited opportunity came
when the heirs represented by their respective counsels interposed no
objection to the same.
While it is true that petitioner was eventually reinstated as Administrator
pursuant to the August 28, 2008 decision in CA-G.R. SP No. 97196 (petition for
certiorari filed by Nelia Silverio-Dee), weagree with the CA that the permanent
injunction issued under the said decision, as explicitly stated in its fallo,
pertained only to the portions of the October 31, 2006 Omnibus Order
Page 6 of 77
upholding the grant of letters of administration to and taking of an oath of
administration by respondent Silverio, Jr., as otherwise the CA would have
expressly set aside as well the directive in the same Omnibus Order allowing
the sale of the subject properties. Moreover, the CA Decision attained finality
only on February 11, 2011 when this Court denied with finality respondent
Silverio, Jr.’s motion for reconsideration of the February 11, 2009 Resolution
denyinghis petition for review (G.R. No. 185619).1âwphi1
The CA therefore did not err in reversing the August 18, 2011 Order of the
intestate court annulling the sale of the subject properties grounded solely on
the injunction issued in CA-G.R. SP No. 97196. Respondents Ocampo, Citrine
and ZEE2 should not be prejudiced by the flip-flopping appointment of
Administrator by the intestate court, having relied in good faith that the sale
was authorized and with prior approval of the intestate court under its Omnibus
Order dated October 31, 2006 which remained valid and subsisting insofar as it
allowed the aforesaid sale.
WHEREFORE, the petition is DENIED. The Decision dated March 8, 2013 and
Resolution dated July 4, 2013 of the Court of Appeals in CAG.R. SP Nos.
121173 and 122024 are AFFIRMED. With costs against the petitioner.
G.R. No. 133743 February 6, 2007
EDGAR SAN LUIS, Petitioner,
vs.
FELICIDAD SAN LUIS, Respondent.
x ---------------------------------------------------- x
G.R. No. 134029 February 6, 2007
RODOLFO SAN LUIS, Petitioner,
vs.
FELICIDAD SAGALONGOS alias FELICIDAD SAN LUIS, Respondent.
Before us are consolidated petitions for review assailing the February 4, 1998
Decision 1 of the Court of Appeals in CA-G.R. CV No. 52647, which reversed
and set aside the September 12, 1995 2 and January 31, 1996 3Resolutions of
the Regional Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708;
and its May 15, 1998 Resolution 4 denying petitioners’ motion for
reconsideration.
The instant case involves the settlement of the estate of Felicisimo T. San Luis
(Felicisimo), who was the former governor of the Province of Laguna. During
his lifetime, Felicisimo contracted three marriages. His first marriage was with
Virginia Sulit on March 17, 1942 out of which were born six children, namely:
Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On August 11, 1963, Virginia
predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with
whom he had a son, Tobias. However, on October 15, 1971, Merry Lee, an
American citizen, filed a Complaint for Divorce 5 before the Family Court of the
First Circuit, State of Hawaii, United States of America (U.S.A.), which issued a
Decree Granting Absolute Divorce and Awarding Child Custody on December
14, 1973. 6
On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then
surnamed Sagalongos, before Rev. Fr. William Meyer, Minister of the United
Presbyterian at Wilshire Boulevard, Los Angeles, California, U.S.A. 7 He had
no children with respondent but lived with her for 18 years from the time of their
marriage up to his death on December 18, 1992.
Thereafter, respondent sought the dissolution of their conjugal partnership
assets and the settlement of Felicisimo’s estate. On December 17, 1993, she
filed a petition for letters of administration 8 before the Regional Trial Court of
Makati City, docketed as SP. Proc. No. M-3708 which was raffled to Branch
146 thereof.
Respondent alleged that she is the widow of Felicisimo; that, at the time of his
death, the decedent was residing at 100 San Juanico Street, New Alabang
Village, Alabang, Metro Manila; that the decedent’s surviving heirs are
respondent as legal spouse, his six children by his first marriage, and son by
his second marriage; that the decedent left real properties, both conjugal and
exclusive, valued at ₱30,304,178.00 more or less; that the decedent does not
have any unpaid debts. Respondent prayed that the conjugal partnership
assets be liquidated and that letters of administration be issued to her.
On February 4, 1994, petitioner Rodolfo San Luis, one of the children of
Felicisimo by his first marriage, filed a motion to dismiss 9 on the grounds of
improper venue and failure to state a cause of action. Rodolfo claimed that the
petition for letters of administration should have been filed in the Province of
Laguna because this was Felicisimo’s place of residence prior to his death. He
further claimed that respondent has no legal personality to file the petition
because she was only a mistress of Felicisimo since the latter, at the time of
his death, was still legally married to Merry Lee.
On February 15, 1994, Linda invoked the same grounds and joined her brother
Rodolfo in seeking the dismissal 10of the petition. On February 28, 1994, the
trial court issued an Order 11 denying the two motions to dismiss.
Page 7 of 77
Unaware of the denial of the motions to dismiss, respondent filed on March 5,
1994 her opposition 12 thereto. She submitted documentary evidence showing
that while Felicisimo exercised the powers of his public office in Laguna, he
regularly went home to their house in New Alabang Village, Alabang, Metro
Manila which they bought sometime in 1982. Further, she presented the
decree of absolute divorce issued by the Family Court of the First Circuit, State
of Hawaii to prove that the marriage of Felicisimo to Merry Lee had already
been dissolved. Thus, she claimed that Felicisimo had the legal capacity to
marry her by virtue of paragraph 2, 13 Article 26 of the Family Code and the
doctrine laid down in Van Dorn v. Romillo, Jr. 14
Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately
filed motions for reconsideration from the Order denying their motions to
dismiss. 15 They asserted that paragraph 2, Article 26 of the Family Code
cannot be given retroactive effect to validate respondent’s bigamous marriage
with Felicisimo because this would impair vested rights in derogation of Article
256 16 of the Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage,
filed a motion to disqualify Acting Presiding Judge Anthony E. Santos from
hearing the case.
On October 24, 1994, the trial court issued an Order 17 denying the motions for
reconsideration. It ruled that respondent, as widow of the decedent, possessed
the legal standing to file the petition and that venue was properly laid.
Meanwhile, the motion for disqualification was deemed moot and
academic 18 because then Acting Presiding Judge Santos was substituted by
Judge Salvador S. Tensuan pending the resolution of said motion.
Mila filed a motion for inhibition 19 against Judge Tensuan on November 16,
1994. On even date, Edgar also filed a motion for reconsideration 20 from the
Order denying their motion for reconsideration arguing that it does not state the
facts and law on which it was based.
On November 25, 1994, Judge Tensuan issued an Order 21 granting the motion
for inhibition. The case was re-raffled to Branch 134 presided by Judge Paul T.
Arcangel.
On April 24, 1995, 22 the trial court required the parties to submit their
respective position papers on the twin issues of venue and legal capacity of
respondent to file the petition. On May 5, 1995, Edgar manifested 23 that he is
adopting the arguments and evidence set forth in his previous motion for
reconsideration as his position paper. Respondent and Rodolfo filed their
position papers on June 14, 24 and June 20, 25 1995, respectively.
On September 12, 1995, the trial court dismissed the petition for letters of
administration. It held that, at the time of his death, Felicisimo was the duly
elected governor and a resident of the Province of Laguna. Hence, the petition
should have been filed in Sta. Cruz, Laguna and not in Makati City. It also ruled
that respondent was without legal capacity to file the petition for letters of
administration because her marriage with Felicisimo was bigamous, thus, void
ab initio. It found that the decree of absolute divorce dissolving Felicisimo’s
marriage to Merry Lee was not valid in the Philippines and did not bind
Felicisimo who was a Filipino citizen. It also ruled that paragraph 2, Article 26
of the Family Code cannot be retroactively applied because it would impair the
vested rights of Felicisimo’s legitimate children.
Respondent moved for reconsideration 26 and for the disqualification 27
Judge Arcangel but said motions were denied. 28
Respondent appealed to the Court of Appeals which reversed and set aside
the orders of the trial court in its assailed Decision dated February 4, 1998, the
dispositive portion of which states:
WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996
are hereby REVERSED and SET ASIDE; the Orders dated February 28 and
October 24, 1994 are REINSTATED; and the records of the case is
REMANDED to the trial court for further proceedings. 29
The appellante court ruled that under Section 1, Rule 73 of the Rules of Court,
the term "place of residence" of the decedent, for purposes of fixing the venue
of the settlement of his estate, refers to the personal, actual or physical
habitation, or actual residence or place of abode of a person as distinguished
from legal residence or domicile. It noted that although Felicisimo discharged
his functions as governor in Laguna, he actually resided in Alabang,
Muntinlupa. Thus, the petition for letters of administration was properly filed in
Makati City.
The Court of Appeals also held that Felicisimo had legal capacity to marry
respondent by virtue of paragraph 2, Article 26 of the Family Code and the
rulings in Van Dorn v. Romillo, Jr. 30 and Pilapil v. Ibay-Somera. 31 It found that
the marriage between Felicisimo and Merry Lee was validly dissolved by virtue
of the decree of absolute divorce issued by the Family Court of the First Circuit,
State of Hawaii. As a result, under paragraph 2, Article 26, Felicisimo was
capacitated to contract a subsequent marriage with respondent. Thus –
With the well-known rule – express mandate of paragraph 2, Article 26, of the
Family Code of the Philippines, the doctrines in Van Dorn, Pilapil, and the
reason and philosophy behind the enactment of E.O. No. 227, — there is no
justiciable reason to sustain the individual view — sweeping statement — of
Page 8 of 77
Judge Arc[h]angel, that "Article 26, par. 2 of the Family Code, contravenes the
basic policy of our state against divorce in any form whatsoever." Indeed,
courts cannot deny what the law grants. All that the courts should do is to give
force and effect to the express mandate of the law. The foreign divorce having
been obtained by the Foreigner on December 14, 1992, 32 the Filipino divorcee,
"shall x x x have capacity to remarry under Philippine laws". For this reason,
the marriage between the deceased and petitioner should not be denominated
as "a bigamous marriage.
Therefore, under Article 130 of the Family Code, the petitioner as the surviving
spouse can institute the judicial proceeding for the settlement of the estate of
the deceased. x x x 33
of
Edgar, Linda, and Rodolfo filed separate motions for reconsideration 34 which
were denied by the Court of Appeals.
On July 2, 1998, Edgar appealed to this Court via the instant petition for review
on certiorari. 35 Rodolfo later filed a manifestation and motion to adopt the said
petition which was granted. 36
In the instant consolidated petitions, Edgar and Rodolfo insist that the venue of
the subject petition for letters of administration was improperly laid because at
the time of his death, Felicisimo was a resident of Sta. Cruz, Laguna. They
contend that pursuant to our rulings in Nuval v. Guray 37 and Romualdez v.
RTC, Br. 7, Tacloban City, 38"residence" is synonymous with "domicile" which
denotes a fixed permanent residence to which when absent, one intends to
return. They claim that a person can only have one domicile at any given time.
Since Felicisimo never changed his domicile, the petition for letters of
administration should have been filed in Sta. Cruz, Laguna.
Petitioners also contend that respondent’s marriage to Felicisimo was void and
bigamous because it was performed during the subsistence of the latter’s
marriage to Merry Lee. They argue that paragraph 2, Article 26 cannot be
retroactively applied because it would impair vested rights and ratify the void
bigamous marriage. As such, respondent cannot be considered the surviving
wife of Felicisimo; hence, she has no legal capacity to file the petition for letters
of administration.
The issues for resolution: (1) whether venue was properly laid, and (2) whether
respondent has legal capacity to file the subject petition for letters of
administration.
The petition lacks merit.
Under Section 1, 39 Rule 73 of the Rules of Court, the petition for letters of
administration of the estate of Felicisimo should be filed in the Regional Trial
Court of the province "in which he resides at the time of his death." In the case
of Garcia Fule v. Court of Appeals, 40 we laid down the doctrinal rule for
determining the residence – as contradistinguished from domicile – of the
decedent for purposes of fixing the venue of the settlement of his estate:
[T]he term "resides" connotes ex vi termini "actual residence" as distinguished
from "legal residence or domicile." This term "resides," like the terms "residing"
and "residence," is elastic and should be interpreted in the light of the object or
purpose of the statute or rule in which it is employed. In the application of
venue statutes and rules – Section 1, Rule 73 of the Revised Rules of Court is
of such nature – residence rather than domicile is the significant factor. Even
where the statute uses the word "domicile" still it is construed as meaning
residence and not domicile in the technical sense. Some cases make a
distinction between the terms "residence" and "domicile" but as generally used
in statutes fixing venue, the terms are synonymous, and convey the same
meaning as the term "inhabitant." In other words, "resides" should be viewed or
understood in its popular sense, meaning, the personal, actual or physical
habitation of a person, actual residence or place of abode. It signifies physical
presence in a place and actual stay thereat. In this popular sense, the term
means merely residence, that is, personal residence, not legal residence or
domicile. Residence simply requires bodily presence as an inhabitant in a
given place, while domicile requires bodily presence in that place and also an
intention to make it one’s domicile. No particular length of time of residence is
required though; however, the residence must be more than
temporary. 41 (Emphasis supplied)
It is incorrect for petitioners to argue that "residence," for purposes of fixing the
venue of the settlement of the estate of Felicisimo, is synonymous with
"domicile." The rulings in Nuval and Romualdez are inapplicable to the instant
case because they involve election cases. Needless to say, there is a
distinction between "residence" for purposes of election laws and "residence"
for purposes of fixing the venue of actions. In election cases, "residence" and
"domicile" are treated as synonymous terms, that is, the fixed permanent
residence to which when absent, one has the intention of
returning. 42 However, for purposes of fixing venue under the Rules of Court,
the "residence" of a person is his personal, actual or physical habitation, or
actual residence or place of abode, which may not necessarily be his legal
residence or domicile provided he resides therein with continuity and
consistency. 43 Hence, it is possible that a person may have his residence in
one place and domicile in another.
In the instant case, while petitioners established that Felicisimo was domiciled
in Sta. Cruz, Laguna, respondent proved that he also maintained a residence
in Alabang, Muntinlupa from 1982 up to the time of his death. Respondent
Page 9 of 77
submitted in evidence the Deed of Absolute Sale 44 dated January 5, 1983
showing that the deceased purchased the aforesaid property. She also
presented billing statements 45 from the Philippine Heart Center and Chinese
General Hospital for the period August to December 1992 indicating the
address of Felicisimo at "100 San Juanico, Ayala Alabang, Muntinlupa."
Respondent also presented proof of membership of the deceased in the Ayala
Alabang Village Association 46 and Ayala Country Club, Inc., 47 letter-
envelopes 48 from 1988 to 1990 sent by the deceased’s children to him at his
Alabang address, and the deceased’s calling cards 49 stating that his home/city
address is at "100 San Juanico, Ayala Alabang Village, Muntinlupa" while his
office/provincial address is in "Provincial Capitol, Sta. Cruz, Laguna."
From the foregoing, we find that Felicisimo was a resident of Alabang,
Muntinlupa for purposes of fixing the venue of the settlement of his estate.
Consequently, the subject petition for letters of administration was validly filed
in the Regional Trial Court 50 which has territorial jurisdiction over Alabang,
Muntinlupa. The subject petition was filed on December 17, 1993. At that time,
Muntinlupa was still a municipality and the branches of the Regional Trial Court
of the National Capital Judicial Region which had territorial jurisdiction over
Muntinlupa were then seated in Makati City as per Supreme Court
Administrative Order No. 3. 51 Thus, the subject petition was validly filed before
the Regional Trial Court of Makati City.
Anent the issue of respondent Felicidad’s legal personality to file the petition for
letters of administration, we must first resolve the issue of whether a Filipino
who is divorced by his alien spouse abroad may validly remarry under the Civil
Code, considering that Felicidad’s marriage to Felicisimo was solemnized on
June 20, 1974, or before the Family Code took effect on August 3, 1988. In
resolving this issue, we need not retroactively apply the provisions of the
Family Code, particularly Art. 26, par. (2) considering that there is sufficient
jurisprudential basis allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr. 52 involved a marriage between a
foreigner and his Filipino wife, which marriage was subsequently dissolved
through a divorce obtained abroad by the latter. Claiming that the divorce was
not valid under Philippine law, the alien spouse alleged that his interest in the
properties from their conjugal partnership should be protected. The Court,
however, recognized the validity of the divorce and held that the alien spouse
had no interest in the properties acquired by the Filipino wife after the divorce.
Thus:
In this case, the divorce in Nevada released private respondent from the
marriage from the standards of American law, under which divorce dissolves
the marriage. As stated by the Federal Supreme Court of the United States in
Atherton vs. Atherton, 45 L. Ed. 794, 799:
"The purpose and effect of a decree of divorce from the bond of matrimony by
a competent jurisdiction are to change the existing status or domestic relation
of husband and wife, and to free them both from the bond. The marriage tie,
when thus severed as to one party, ceases to bind either. A husband without a
wife, or a wife without a husband, is unknown to the law. When the law
provides, in the nature of a penalty, that the guilty party shall not marry again,
that party, as well as the other, is still absolutely freed from the bond of the
former marriage."
Thus, pursuant to his national law, private respondent is no longer the husband
of petitioner. He would have no standing to sue in the case below as
petitioner’s husband entitled to exercise control over conjugal assets. As he is
bound by the Decision of his own country’s Court, which validly exercised
jurisdiction over him, and whose decision he does not repudiate, he is
estopped by his own representation before said Court from asserting his right
over the alleged conjugal property. 53
As to the effect of the divorce on the Filipino wife, the Court ruled that she
should no longer be considered married to the alien spouse. Further, she
should not be required to perform her marital duties and obligations. It held:
To maintain, as private respondent does, that, under our laws, petitioner
has to be considered still marriedto private respondent and still subject
to a wife's obligations under Article 109, et. seq. of the Civil Code cannot
be just. Petitioner should not be obliged to live together with, observe respect
and fidelity, and render support to private respondent. The latter should not
continue to be one of her heirs with possible rights to conjugal property. She
should not be discriminated against in her own country if the ends of
justice are to be served.54 (Emphasis added)
This principle was thereafter applied in Pilapil v. Ibay-Somera 55 where the
Court recognized the validity of a divorce obtained abroad. In the said case, it
was held that the alien spouse is not a proper party in filing the adultery suit
against his Filipino wife. The Court stated that "the severance of the marital
bond had the effect of dissociating the former spouses from each other, hence
the actuations of one would not affect or cast obloquy on the other." 56
Likewise, in Quita v. Court of Appeals, 57 the Court stated that where a Filipino
is divorced by his naturalized foreign spouse, the ruling in Van
Dorn applies. 58 Although decided on December 22, 1998, the divorce in the
said case was obtained in 1954 when the Civil Code provisions were still in
effect.
The significance of the Van Dorn case to the development of limited
recognition of divorce in the Philippines cannot be denied. The ruling has long
Page 10 of 77
been interpreted as severing marital ties between parties in a mixed marriage
and capacitating the Filipino spouse to remarry as a necessary consequence of
upholding the validity of a divorce obtained abroad by the alien spouse. In his
treatise, Dr. Arturo M. Tolentino cited Van Dorn stating that "if the foreigner
obtains a valid foreign divorce, the Filipino spouse shall have capacity to
remarry under Philippine law." 59In Garcia v. Recio, 60 the Court likewise cited
the aforementioned case in relation to Article 26. 61
In the recent case of Republic v. Orbecido III, 62 the historical background and
legislative intent behind paragraph 2, Article 26 of the Family Code were
discussed, to wit:
Brief Historical Background
On July 6, 1987, then President Corazon Aquino signed into law Executive
Order No. 209, otherwise known as the "Family Code," which took effect on
August 3, 1988. Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance with the laws in
force in the country where they were solemnized, and valid there as such, shall
also be valid in this country, except those prohibited under Articles 35, 37, and
38.
On July 17, 1987, shortly after the signing of the original Family Code,
Executive Order No. 227 was likewise signed into law, amending Articles 26,
36, and 39 of the Family Code. A second paragraph was added to Article 26.
As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in accordance with
the laws in force in the country where they were solemnized, and valid there as
such, shall also be valid in this country, except those prohibited under Articles
35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the Filipino spouse shall have
capacity to remarry under Philippine law. (Emphasis supplied)
x x x x
Legislative Intent
Records of the proceedings of the Family Code deliberations showed that the
intent of Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a
member of the Civil Code Revision Committee, is to avoid the absurd situation
where the Filipino spouse remains married to the alien spouse who, after
obtaining a divorce, is no longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case
of Van Dorn v. Romillo, Jr. The Van Dorn case involved a marriage
between a Filipino citizen and a foreigner. The Court held therein that a
divorce decree validly obtained by the alien spouse is valid in the
Philippines, and consequently, the Filipino spouse is capacitated to
remarry under Philippine law. 63 (Emphasis added)
As such, the Van Dorn case is sufficient basis in resolving a situation where a
divorce is validly obtained abroad by the alien spouse. With the enactment of
the Family Code and paragraph 2, Article 26 thereof, our lawmakers codified
the law already established through judicial precedent.1awphi1.net
Indeed, when the object of a marriage is defeated by rendering its continuance
intolerable to one of the parties and productive of no possible good to the
community, relief in some way should be obtainable. 64 Marriage, being a
mutual and shared commitment between two parties, cannot possibly be
productive of any good to the society where one is considered released from
the marital bond while the other remains bound to it. Such is the state of affairs
where the alien spouse obtains a valid divorce abroad against the Filipino
spouse, as in this case.
Petitioners cite Articles 15 65 and 17 66 of the Civil Code in stating that the
divorce is void under Philippine law insofar as Filipinos are concerned.
However, in light of this Court’s rulings in the cases discussed above, the
Filipino spouse should not be discriminated against in his own country if the
ends of justice are to be served. 67 In Alonzo v. Intermediate Appellate
Court, 68 the Court stated:
But as has also been aptly observed, we test a law by its results; and likewise,
we may add, by its purposes. It is a cardinal rule that, in seeking the meaning
of the law, the first concern of the judge should be to discover in its provisions
the intent of the lawmaker. Unquestionably, the law should never be interpreted
in such a way as to cause injustice as this is never within the legislative intent.
An indispensable part of that intent, in fact, for we presume the good motives of
the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in consonance
with justice. Law and justice are inseparable, and we must keep them so. To
be sure, there are some laws that, while generally valid, may seem arbitrary
when applied in a particular case because of its peculiar circumstances. In
such a situation, we are not bound, because only of our nature and functions,
to apply them just the same, in slavish obedience to their language. What we
Page 11 of 77
do instead is find a balance between the word and the will, that justice may be
done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply
the law as it is worded, yielding like robots to the literal command without
regard to its cause and consequence. "Courts are apt to err by sticking too
closely to the words of a law," so we are warned, by Justice Holmes again,
"where these words import a policy that goes beyond them."
xxxx
More than twenty centuries ago, Justinian defined justice "as the constant and
perpetual wish to render every one his due." That wish continues to motivate
this Court when it assesses the facts and the law in every case brought to it for
decision. Justice is always an essential ingredient of its decisions. Thus when
the facts warrants, we interpret the law in a way that will render justice,
presuming that it was the intention of the lawmaker, to begin with, that the law
be dispensed with justice. 69
Applying the above doctrine in the instant case, the divorce decree allegedly
obtained by Merry Lee which absolutely allowed Felicisimo to remarry, would
have vested Felicidad with the legal personality to file the present petition as
Felicisimo’s surviving spouse. However, the records show that there is
insufficient evidence to prove the validity of the divorce obtained by Merry Lee
as well as the marriage of respondent and Felicisimo under the laws of the
U.S.A. In Garcia v. Recio, 70 the Court laid down the specific guidelines for
pleading and proving foreign law and divorce judgments. It held that
presentation solely of the divorce decree is insufficient and that proof of its
authenticity and due execution must be presented. Under Sections 24 and 25
of Rule 132, a writing or document may be proven as a public or official record
of a foreign country by either (1) an official publication or (2) a copy thereof
attested by the officer having legal custody of the document. If the record is not
kept in the Philippines, such copy must be (a) accompanied by a certificate
issued by the proper diplomatic or consular officer in the Philippine foreign
service stationed in the foreign country in which the record is kept and (b)
authenticated by the seal of his office. 71
With regard to respondent’s marriage to Felicisimo allegedly solemnized in
California, U.S.A., she submitted photocopies of the Marriage Certificate and
the annotated text 72 of the Family Law Act of California which purportedly
show that their marriage was done in accordance with the said law. As stated
in Garcia, however, the Court cannot take judicial notice of foreign laws as they
must be alleged and proved. 73
Therefore, this case should be remanded to the trial court for further reception
of evidence on the divorce decree obtained by Merry Lee and the marriage of
respondent and Felicisimo.
Even assuming that Felicisimo was not capacitated to marry respondent in
1974, nevertheless, we find that the latter has the legal personality to file the
subject petition for letters of administration, as she may be considered the co-
owner of Felicisimo as regards the properties that were acquired through their
joint efforts during their cohabitation.
Section 6, 74 Rule 78 of the Rules of Court states that letters of administration
may be granted to the surviving spouse of the decedent. However, Section 2,
Rule 79 thereof also provides in part:
SEC. 2. Contents of petition for letters of administration. – A petition for letters
of administration must be filed by an interested person and must show, as far
as known to the petitioner: x x x.
An "interested person" has been defined as one who would be benefited by the
estate, such as an heir, or one who has a claim against the estate, such as a
creditor. The interest must be material and direct, and not merely indirect or
contingent. 75
In the instant case, respondent would qualify as an interested person who has
a direct interest in the estate of Felicisimo by virtue of their cohabitation, the
existence of which was not denied by petitioners. If she proves the validity of
the divorce and Felicisimo’s capacity to remarry, but fails to prove that her
marriage with him was validly performed under the laws of the U.S.A., then she
may be considered as a co-owner under Article 144 76 of the Civil Code. This
provision governs the property relations between parties who live together as
husband and wife without the benefit of marriage, or their marriage is void from
the beginning. It provides that the property acquired by either or both of them
through their work or industry or their wages and salaries shall be governed by
the rules on co-ownership. In a co-ownership, it is not necessary that the
property be acquired through their joint labor, efforts and industry. Any property
acquired during the union is prima facie presumed to have been obtained
through their joint efforts. Hence, the portions belonging to the co-owners shall
be presumed equal, unless the contrary is proven. 77
Meanwhile, if respondent fails to prove the validity of both the divorce and the
marriage, the applicable provision would be Article 148 of the Family Code
which has filled the hiatus in Article 144 of the Civil Code by expressly
regulating the property relations of couples living together as husband and wife
but are incapacitated to marry. 78 In Saguid v. Court of Appeals, 79 we held that
even if the cohabitation or the acquisition of property occurred before the
Page 12 of 77
Family Code took effect, Article 148 governs. 80 The Court described the
property regime under this provision as follows:
The regime of limited co-ownership of property governing the union of parties
who are not legally capacitated to marry each other, but who nonetheless live
together as husband and wife, applies to properties acquired during said
cohabitation in proportion to their respective contributions. Co-ownership will
only be up to the extent of the proven actual contribution of money, property or
industry. Absent proof of the extent thereof, their contributions and
corresponding shares shall be presumed to be equal.
xxxx
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved
the issue of co-ownership of properties acquired by the parties to a bigamous
marriage and an adulterous relationship, respectively, we ruled that proof of
actual contribution in the acquisition of the property is essential. x x x
As in other civil cases, the burden of proof rests upon the party who, as
determined by the pleadings or the nature of the case, asserts an affirmative
issue. Contentions must be proved by competent evidence and reliance must
be had on the strength of the party’s own evidence and not upon the weakness
of the opponent’s defense. x x x 81
In view of the foregoing, we find that respondent’s legal capacity to file the
subject petition for letters of administration may arise from her status as the
surviving wife of Felicisimo or as his co-owner under Article 144 of the Civil
Code or Article 148 of the Family Code.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals
reinstating and affirming the February 28, 1994 Order of the Regional Trial
Court which denied petitioners’ motion to dismiss and its October 24, 1994
Order which dismissed petitioners’ motion for reconsideration is AFFIRMED.
Let this case be REMANDED to the trial court for further proceedings.
G.R. No. 177099 June 8, 2011
EDUARDO G. AGTARAP, Petitioner,
vs.
SEBASTIAN AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP,
WALTER DE SANTOS, and ABELARDO DAGORO, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 177192
SEBASTIAN G. AGTARAP, Petitioner,
vs.
EDUARDO G. AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP,
WALTER DE SANTOS, and ABELARDO DAGORO, Respondents.
Before us are the consolidated petitions for review on certiorari of petitioners
Sebastian G. Agtarap (Sebastian)1 and Eduardo G. Agtarap
(Eduardo), assailing the Decision dated November 21, 20063 and the
2 to the house were shouldered by Gloria and Teresa, while the restaurant
Resolution dated March 27, 20074 of the Court of Appeals (CA) in CA-G.R. CV
No. 73916.
The antecedent facts and proceedings—
On September 15, 1994, Eduardo filed with the Regional Trial Court (RTC),
Branch 114, Pasay City, a verified petition for the judicial settlement of the
estate of his deceased father Joaquin Agtarap (Joaquin). It was docketed as
Special Proceedings No. 94-4055.
The petition alleged that Joaquin died intestate on November 21, 1964 in
Pasay City without any known debts or obligations. During his lifetime, Joaquin
contracted two marriages, first with Lucia Garcia (Lucia), 5 and second with
Caridad Garcia (Caridad). Lucia died on April 24, 1924. Joaquin and Lucia had
three children—Jesus (died without issue), Milagros, and Jose (survived by
three children, namely, Gloria,6 Joseph, and Teresa7). Joaquin married Caridad
on February 9, 1926. They also had three children—Eduardo, Sebastian, and
Mercedes (survived by her daughter Cecile). At the time of his death, Joaquin
left two parcels of land with improvements in Pasay City, covered by Transfer
Certificates of Title (TCT) Nos. 873-(38254) and 874-(38255). Joseph, a
grandson of Joaquin, had been leasing and improving the said realties and had
been appropriating for himself ₱26,000.00 per month since April 1994.
Eduardo further alleged that there was an imperative need to appoint him as
special administrator to take possession and charge of the estate assets and
their civil fruits, pending the appointment of a regular administrator. In addition,
he prayed that an order be issued (a) confirming and declaring the named
compulsory heirs of Joaquin who would be entitled to participate in the estate;
(b) apportioning and allocating unto the named heirs their aliquot shares in the
estate in accordance with law; and (c) entitling the distributees the right to
receive and enter into possession those parts of the estate individually
awarded to them.
On September 26, 1994, the RTC issued an order setting the petition for initial
hearing and directing Eduardo to cause its publication.
Page 13 of 77
On December 28, 1994, Sebastian filed his comment, generally admitting the
allegations in the petition, and conceding to the appointment of Eduardo as
special administrator.
Joseph, Gloria, and Teresa filed their answer/opposition. They alleged that the
two subject lots belong to the conjugal partnership of Joaquin with Lucia, and
that, upon Lucia’s death in April 1924, they became the pro indiviso owners of
the subject properties. They said that their residence was built with the
exclusive money of their late father Jose, and the expenses of the extensions
(Manong’s Restaurant) was built with the exclusive money of Joseph and his
business partner. They opposed the appointment of Eduardo as administrator
on the following grounds: (1) he is not physically and mentally fit to do so; (2)
his interest in the lots is minimal; and (3) he does not possess the desire to
earn. They claimed that the best interests of the estate dictate that Joseph be
appointed as special or regular administrator.
On February 16, 1995, the RTC issued a resolution appointing Eduardo as
regular administrator of Joaquin’s estate. Consequently, it issued him letters of
administration.
On September 16, 1995, Abelardo Dagoro filed an answer in intervention,
alleging that Mercedes is survived not only by her daughter Cecile, but also by
him as her husband. He also averred that there is a need to appoint a special
administrator to the estate, but claimed that Eduardo is not the person best
qualified for the task.
After the parties were given the opportunity to be heard and to submit their
respective proposed projects of partition, the RTC, on October 23, 2000,
issued an Order of Partition,8 with the following disposition—
In the light of the filing by the heirs of their respective proposed projects of
partition and the payment of inheritance taxes due the estate as early as 1965,
and there being no claim in Court against the estate of the deceased, the
estate of JOAQUIN AGTARAP is now consequently – ripe – for distribution
among the heirs minus the surviving spouse Caridad Garcia who died on
August 25, 1999.
Considering that the bulk of the estate property were acquired during the
existence of the second marriage as shown by TCT No. (38254) and TCT No.
(38255) which showed on its face that decedent was married to Caridad
Garcia, which fact oppositors failed to contradict by evidence other than their
negative allegations, the greater part of the estate is perforce accounted by the
second marriage and the compulsory heirs thereunder.
The Administrator, Eduardo Agtarap rendered a true and just accounting of his compensation of the administrator and other expenses allowed by the Court,
administration from his date of assumption up to the year ending December 31, are hereby ordered distributed as follows:
1996 per Financial and Accounting Report dated June 2, 1997 which was
approved by the Court. The accounting report included the income earned and TOTAL ESTATE – ₱14,177,500.00
received for the period and the expenses incurred in the administration,
sustenance and allowance of the widow. In accordance with said Financial and
CARIDAD AGTARAP – ½ of the estate as her conjugal share – ₱7,088,750.00,
Accounting Report which was duly approved by this Court in its Resolution
the other half of ₱7,088,750.00 – to be divided among the compulsory heirs as
dated July 28, 1998 – the deceased JOAQUIN AGTARAP left real properties follows:
consisting of the following:

I LAND: 1) JOSE (deceased) - ₱1,181,548.30

2) MILAGROS (deceased)
Two lots and two buildings with one garage quarter located at #3030 Agtarap ₱1,181,548.30
-
St., Pasay City, covered by Transfer Certificate of Title Nos. 38254 and 38255
and registered with the Registry of Deeds of Pasay City, Metro Manila, 3) MERCEDES
₱1,181,548.30
described as follows: (deceased) -
4) SEBASTIAN - ₱1,181,548.30
LOT ZONAL 5) EDUARDO - ₱1,181,548.30
TCT NO. AREA/SQ.M. AMOUNT
NO. VALUE
6) CARIDAD - ₱1,181,548.30
38254 745-B-1 1,335 sq. m. ₱5,000.00 ₱6,675,000.00
38255 745-B-2 1,331 sq. m. ₱5,000.00 ₱6,655,000.00 The share of Milagros Agtarap as compulsory heir in the amount of
₱1,181,548.30 and who died in 1996 will go to Teresa Agtarap and Joseph
TOTAL------------------------------------------------------------- ₱13,330,000.00 Agtarap, Walter de Santos and half brothers Eduardo and Sebastian Agtarap in
equal proportions.

II BUILDINGS AND IMPROVEMENTS:

TERESA AGTARAP - ₱236,291.66

BUILDING I (Lot # 745-B-1) ------------------------------ ₱350,000.00 JOSEPH AGTARAP - ₱236,291.66

BUILDING II (Lot # 745-B-2) ----------------------------- 320,000.00 WALTER DE SANTOS - ₱236,291.66

Building Improvements -------------------------------------- 97,500.00 SEBASTIAN AGTARAP - ₱236,291.66

Restaurant ------------------------------------------------------ 80,000.00 EDUARDO AGTARAP - ₱236,291.66

TOTAL --------------------------------------------------------- ₱847,500.00 Jose Agtarap died in 1967. His compulsory heirs are as follows:

TOTAL NET WORTH ----------------------------------------- ₱14,177,500.00 COMPULSORY HEIRS:

WHEREFORE, the net assets of the estate of the late JOAQUIN AGTARAP 1) GLORIA – (deceased) – represented by
with a total value of ₱14,177,500.00, together with whatever interest from bank Walter de Santos –
deposits and all other incomes or increments thereof accruing after the
Accounting Report of December 31, 1996, after deducting therefrom the - ₱295,364.57

Page 14 of 77
 2) JOSEPH AGTARAP - ₱295,364.57
3) TERESA AGTARAP - ₱295,364.57
4) PRISCILLA AGTARAP
₱295,364.57
-
Hence, Priscilla Agtarap will inherit ₱295,364.57.
Adding their share from Milagros Agtarap, the following heirs of the first
marriage stand to receive the total amount of:
HEIRS OF THE FIRST MARRIAGE:
1avvphi1
1) JOSEPH AGTARAP - ₱236,291.66 – share from Milagros
Agtarap
₱295,364.57 – as compulsory heir of
₱531,656.23 Jose Agtarap
2) TERESA AGTARAP - ₱236,291.66 – share from Milagros
Agtarap
₱295,364.57 – as compulsory heir of
₱531,656.23 Jose Agtarap
3) WALTER DE SANTOS ₱236,291.66 – share from Milagros
- Agtarap
₱295,364.57 – as compulsory heir of
₱531,656.23 Jose Agtarap
HEIRS OF THE SECOND MARRIAGE:
a) CARIDAD AGTARAP - died on August 25, 1999
₱7,088,750.00 - as conjugal share
₱1,181,458.30 - as compulsory heir
Page 15 of 77
Total of ₱8,270,208.30
b) SEBASTIAN AGTARAP ₱1,181,458.38 – as compulsory heir
-
₱ 236,291.66 – share from Milagros
c) EDUARDO AGTARAP - ₱1,181,458.38 – as compulsory heir
₱ 236,291.66 – share from Milagros
d) MERCEDES - as represented by Abelardo Dagoro as
the
surviving spouse of a compulsory heir
₱1,181,458.38
REMAINING HEIRS OF CARIDAD AGTARAP:
1) SEBASTIAN AGTARAP
2) EDUARDO AGTARAP
MERCEDES AGTARAP (Predeceased Caridad Agtarap)
In sum, Sebastian Agtarap and Eduardo Agtarap stand to inherit:
SEBASTIAN – ₱4,135,104.10 – share from Caridad Garcia
₱1,181,458.30 - as compulsory heir
₱ 236,291.66 - share from Milagros
₱5,522,854.06
EDUARDO – ₱4,135,104.10 – share from Caridad Garcia
₱1,181,458.30 – as compulsory heir
₱ 236,291.66 – share from Milagros
₱5,522,854.06
SO ORDERED.9
Eduardo, Sebastian, and oppositors Joseph and Teresa filed their respective
motions for reconsideration.
On August 27, 2001, the RTC issued a resolution 10 denying the motions for
reconsideration of Eduardo and Sebastian, and granting that of Joseph and
Teresa. It also declared that the real estate properties belonged to the conjugal
partnership of Joaquin and Lucia. It also directed the modification of the
October 23, 2000 Order of Partition to reflect the correct sharing of the heirs.
However, before the RTC could issue a new order of partition, Eduardo and
Sebastian both appealed to the CA.
On November 21, 2006, the CA rendered its Decision, the dispositive portion of
which reads—
WHEREFORE, premises considered, the instant appeals are DISMISSED for
lack of merit. The assailed Resolution dated August 27, 2001 is AFFIRMED
and pursuant thereto, the subject properties (Lot No. 745-B-1 [TCT No. 38254]
and Lot No. 745-B-2 [TCT No. 38255]) and the estate of the late Joaquin
Agtarap are hereby partitioned as follows:
The two (2) properties, together with their improvements, embraced by TCT
No. 38254 and TCT No. 38255, respectively, are first to be distributed among
the following:
Lucia Mendietta - ½ of the property. But since she is deceased, her share shall
be inherited by Joaquin, Jesus, Milagros and Jose in equal shares.
Joaquin Agtarap - ½ of the property and ¼ of the other half of the property
which pertains to Lucia Mendietta’s share.
Jesus Agtarap - ¼ of Lucia Mendietta’s share. But since he is already
deceased (and died without issue), his inheritance shall, in turn, be acquired by
Joaquin Agtarap.
Milagros Agtarap - ¼ of Lucia Mendietta’s share. But since she died in 1996
without issue, 5/8 of her inheritance shall be inherited by Gloria (represented
by her husband Walter de Santos and her daughter Samantha), Joseph
Agtarap and Teresa Agtarap, (in representation of Milagros’ brother Jose
Agtarap) and 1/8 each shall be inherited by Mercedes (represented by her
husband Abelardo Dagoro and her daughter Cecile), Sebastian Eduardo, all
surnamed Agtarap.
Jose Agtarap - ¼ of Lucia Mendietta’s share. But since he died in 1967, his
inheritance shall be acquired by his wife Priscilla, and children Gloria
(represented by her husband Walter de Santos and her daughter Samantha),
Joseph Agtarap and Teresa in equal shares.
Then, Joaquin Agtarap’s estate, comprising three-fourths (3/4) of the subject
properties and its improvements, shall be distributed as follows:
Page 16 of 77
Caridad Garcia - 1/6 of the estate. But since she died in 1999, her share shall
be inherited by her children namely Mercedes Agtarap (represented by her
husband Abelardo Dagoro and her daughter Cecilia), Sebastian Agtarap and
Eduardo Agtarap in their own right, dividing the inheritance in equal shares.
Milagros Agtarap - 1/6 of the estate. But since she died in 1996 without issue,
5/8 of her inheritance shall be inherited by Gloria (represented by her husband
Walter de Santos and her daughter Samantha), Joseph Agtarap and Teresa
Agtarap, (in representation of Milagros’ brother Jose Agtarap) and 1/8 each
shall be inherited by Mercedes (represented by her husband Abelardo Dagoro
and her daughter Cecile), Sebastian and Eduardo, all surnamed Agtarap.
Jose Agtarap - 1/6 of the estate. But since he died in 1967, his inheritance shall
be acquired by his wife Priscilla, and children Gloria (represented by her
husband Walter de Santos and her daughter Samantha), Joseph Agtarap and
Teresa Agtarap in equal shares.
Mercedes Agtarap - 1/6 of the estate. But since she died in 1984, her
inheritance shall be acquired by her husband Abelardo Dagoro and her
daughter Cecile in equal shares.
Sebastian Agtarap - 1/6 of the estate.
Eduardo Agtarap - 1/6 of the estate.
SO ORDERED.11
Aggrieved, Sebastian and Eduardo filed their respective motions for
reconsideration.
In its Resolution dated March 27, 2007, the CA denied both motions. Hence,
these petitions ascribing to the appellate court the following errors:
G.R. No. 177192
1. – The Court of Appeals erred in not considering the aforementioned
important facts12 which alter its Decision;
2. – The Court of Appeals erred in not considering the necessity of
hearing the issue of legitimacy of respondents as heirs;
3. – The Court of Appeals erred in allowing violation of the law and in
not applying the doctrines of collateral attack, estoppel, and res
judicata.13
G.R. No. 177099
THE COURT OF APPEALS (FORMER TWELFTH DIVISION) DID NOT
ACQUIRE JURISDICTION OVER THE ESTATE OF MILAGROS G. AGTARAP
AND ERRED IN DISTRIBUTING HER INHERITANCE FROM THE ESTATE
OF JOAQUIN AGTARAP NOTWITHSTANDING THE EXISTENCE OF HER
LAST WILL AND TESTAMENT IN VIOLATION OF THE DOCTRINE OF
PRECEDENCE OF TESTATE PROCEEDINGS OVER INTESTATE
PROCEEDINGS.
II. THE COURT OF APPEALS (FORMER TWELFTH DIVISION) ERRED IN
DISMISSING THE DECISION APPEALED FROM FOR LACK OF MERIT AND
IN AFFIRMING THE ASSAILED RESOLUTION DATED AUGUST 27, 2001 OF
THE LOWER COURT HOLDING THAT THE PARCELS OF LAND COVERED
BY TCT NO. 38254 AND TCT (NO.) 38255 OF THE REGISTRY OF DEEDS
FOR THE CITY OF PASAY BELONG TO THE CONJUGAL PARTNERSHIP
OF JOAQUIN AGTARAP MARRIED TO LUCIA GARCIA MENDIETTA
NOTWITHSTANDING THEIR REGISTRATION UNDER THEIR EXISTING
CERTIFICATES OF TITLE AS REGISTERED IN THE NAME OF JOAQUIN
AGTARAP, CASADO CON CARIDAD GARCIA. UNDER EXISTING
JURISPRUDENCE, THE PROBATE COURT HAS NO POWER TO
DETERMINE THE OWNERSHIP OF THE PROPERTY DESCRIBED IN
THESE CERTIFICATES OF TITLE WHICH SHOULD BE RESOLVED IN AN
APPROPRIATE SEPARATE ACTION FOR A TORRENS TITLE UNDER THE
LAW IS ENDOWED WITH INCONTESTABILITY UNTIL IT HAS BEEN SET
ASIDE IN THE MANNER INDICATED IN THE LAW ITSELF.14
As regards his first and second assignments of error, Sebastian contends that
Joseph and Teresa failed to establish by competent evidence that they are the
legitimate heirs of their father Jose, and thus of their grandfather Joaquin. He
draws attention to the certificate of title (TCT No. 8026) they submitted, stating
that the wife of their father Jose is Presentacion Garcia, while they claim that
their mother is Priscilla. He avers that the marriage contracts proffered by
Joseph and Teresa do not qualify as the best evidence of Jose’s marriage with
Priscilla, inasmuch as they were not authenticated and formally offered in
evidence. Sebastian also asseverates that he actually questioned the
legitimacy of Joseph and Teresa as heirs of Joaquin in his motion to exclude
them as heirs, and in his reply to their opposition to the said motion. He further
claims that the failure of Abelardo Dagoro and Walter de Santos to oppose his
motion to exclude them as heirs had the effect of admitting the allegations
therein. He points out that his motion was denied by the RTC without a
hearing.
With respect to his third assigned error, Sebastian maintains that the
certificates of title of real estate properties subject of the controversy are in the
name of Joaquin Agtarap, married to Caridad Garcia, and as such are
Page 17 of 77
conclusive proof of their ownership thereof, and thus, they are not subject to
collateral attack, but should be threshed out in a separate proceeding for that
purpose. He likewise argues that estoppel applies against the children of the
first marriage, since none of them registered any objection to the issuance of
the TCTs in the name of Caridad and Joaquin only. He avers that the estate
must have already been settled in light of the payment of the estate and
inheritance tax by Milagros, Joseph, and Teresa, resulting to the issuance of
TCT No. 8925 in Milagros’ name and of TCT No. 8026 in the names of
Milagros and Jose. He also alleges that res judicata is applicable as the court
order directing the deletion of the name of Lucia, and replacing it with the name
of Caridad, in the TCTs had long become final and executory.
In his own petition, with respect to his first assignment of error, Eduardo
alleges that the CA erroneously settled, together with the settlement of the
estate of Joaquin, the estates of Lucia, Jesus, Jose, Mercedes, Gloria, and
Milagros, in contravention of the principle of settling only one estate in one
proceeding. He particularly questions the distribution of the estate of Milagros
in the intestate proceedings despite the fact that a proceeding was conducted
in another court for the probate of the will of Milagros, bequeathing all to
Eduardo whatever share that she would receive from Joaquin’s estate. He
states that this violated the rule on precedence of testate over intestate
proceedings.
Anent his second assignment of error, Eduardo contends that the CA gravely
erred when it affirmed that the bulk of the realties subject of this case belong to
the first marriage of Joaquin to Lucia, notwithstanding that the certificates of
title were registered in the name of Joaquin Agtarap casado con ("married to")
Caridad Garcia. According to him, the RTC, acting as an intestate court with
limited jurisdiction, was not vested with the power and authority to determine
questions of ownership, which properly belongs to another court with general
jurisdiction.
The Court’s Ruling
As to Sebastian’s and Eduardo’s common issue on the ownership of the
subject real properties, we hold that the RTC, as an intestate court, had
jurisdiction to resolve the same.
The general rule is that the jurisdiction of the trial court, either as a probate or
an intestate court, relates only to matters having to do with the probate of the
will and/or settlement of the estate of deceased persons, but does not extend
to the determination of questions of ownership that arise during the
proceedings.15 The patent rationale for this rule is that such court merely
exercises special and limited jurisdiction.16 As held in several cases,17 a
probate court or one in charge of estate proceedings, whether testate or
intestate, cannot adjudicate or determine title to properties claimed to be a part
of the estate and which are claimed to belong to outside parties, not by virtue
of any right of inheritance from the deceased but by title adverse to that of the
deceased and his estate. All that the said court could do as regards said
properties is to determine whether or not they should be included in the
inventory of properties to be administered by the administrator. If there is no
dispute, there poses no problem, but if there is, then the parties, the
administrator, and the opposing parties have to resort to an ordinary action
before a court exercising general jurisdiction for a final determination of the
conflicting claims of title.
However, this general rule is subject to exceptions as justified by expediency
and convenience.
First, the probate court may provisionally pass upon in an intestate or a testate
proceeding the question of inclusion in, or exclusion from, the inventory of a
piece of property without prejudice to the final determination of ownership in a
separate action.18 Second, if the interested parties are all heirs to the estate, or
the question is one of collation or advancement, or the parties consent to the
assumption of jurisdiction by the probate court and the rights of third parties are
not impaired, then the probate court is competent to resolve issues on
ownership.19 Verily, its jurisdiction extends to matters incidental or collateral to
the settlement and distribution of the estate, such as the determination of the
status of each heir and whether the property in the inventory is conjugal or
exclusive property of the deceased spouse.20
We hold that the general rule does not apply to the instant case considering
that the parties are all heirs of Joaquin and that no rights of third parties will be
impaired by the resolution of the ownership issue. More importantly, the
determination of whether the subject properties are conjugal is but collateral to
the probate court’s jurisdiction to settle the estate of Joaquin.1auuphi1
It should be remembered that when Eduardo filed his verified petition for
judicial settlement of Joaquin’s estate, he alleged that the subject properties
were owned by Joaquin and Caridad since the TCTs state that the lots were
registered in the name of Joaquin Agtarap, married to Caridad Garcia. He also
admitted in his petition that Joaquin, prior to contracting marriage with Caridad,
contracted a first marriage with Lucia. Oppositors to the petition, Joseph and
Teresa, however, were able to present proof before the RTC that TCT Nos.
38254 and 38255 were derived from a mother title, TCT No. 5239, dated March
17, 1920, in the name of FRANCISCO VICTOR BARNES Y JOAQUIN
AGTARAP, el primero casado con Emilia Muscat, y el Segundo con Lucia
Garcia Mendietta (FRANCISCO VICTOR BARNES y JOAQUIN AGTARAP, the
first married to Emilia Muscat, and the second married to Lucia Garcia
Mendietta).21 When TCT No. 5239 was divided between Francisco Barnes and
Joaquin Agtarap, TCT No. 10864, in the name of Joaquin Agtarap, married to
Page 18 of 77
Lucia Garcia Mendietta, was issued for a parcel of land, identified as Lot No.
745 of the Cadastral Survey of Pasay, Cadastral Case No. 23, G.L.R.O.
Cadastral Record No. 1368, consisting of 8,872 square meters. This same lot
was covered by TCT No. 5577 (32184)22 issued on April 23, 1937, also in the
name of Joaquin Agtarap, married to Lucia Garcia Mendietta.
The findings of the RTC and the CA show that Lucia died on April 24, 1924,
and subsequently, on February 9, 1926, Joaquin married Caridad. It is worthy
to note that TCT No. 5577 (32184) contained an annotation, which reads—
Ap-4966 – NOTA: Se ha enmendado el presente certificado de titulo, tal como
aparece, tanchando las palabras "con Lucia Garcia Mendiet[t]a" y poniendo en
su lugar, entre lineas y en tinta encarnada, las palabras "en segundas nupcias
con Caridad Garcia", en complimiento de un orden de fecha 28 de abril de
1937, dictada por el Hon. Sixto de la Costa, juez del Juzgado de Primera
Instancia de Rizal, en el expediente cadastal No. 23, G.L.R.O. Cad. Record
No. 1368; copia de cual orden has sido presentada con el No. 4966 del Libro
Diario, Tomo 6.0 y, archivada en el Legajo T-No. 32184.
Pasig, Rizal, a 29 abril de 1937.23
Thus, per the order dated April 28, 1937 of Hon. Sixto de la Costa, presiding
judge of the Court of First Instance of Rizal, the phrase con Lucia Garcia
Mendiet[t]a was crossed out and replaced by en segundas nuptias con Caridad
Garcia, referring to the second marriage of Joaquin to Caridad. It cannot be
gainsaid, therefore, that prior to the replacement of Caridad’s name in TCT No.
32184, Lucia, upon her demise, already left, as her estate, one-half (1/2)
conjugal share in TCT No. 32184. Lucia’s share in the property covered by the
said TCT was carried over to the properties covered by the certificates of title
derivative of TCT No. 32184, now TCT Nos. 38254 and 38255. And as found
by both the RTC and the CA, Lucia was survived by her compulsory heirs –
Joaquin, Jesus, Milagros, and Jose.
Section 2, Rule 73 of the Rules of Court provides that when the marriage is
dissolved by the death of the husband or the wife, the community property shall
be inventoried, administered, and liquidated, and the debts thereof paid; in the
testate or intestate proceedings of the deceased spouse, and if both spouses
have died, the conjugal partnership shall be liquidated in the testate or intestate
proceedings of either. Thus, the RTC had jurisdiction to determine whether the
properties are conjugal as it had to liquidate the conjugal partnership to
determine the estate of the decedent. In fact, should Joseph and Teresa
institute a settlement proceeding for the intestate estate of Lucia, the same
should be consolidated with the settlement proceedings of Joaquin, being
Lucia’s spouse.24 Accordingly, the CA correctly distributed the estate of Lucia,
with respect to the properties covered by TCT Nos. 38254 and 38255 subject
of this case, to her compulsory heirs.
Therefore, in light of the foregoing evidence, as correctly found by the RTC and
the CA, the claim of Sebastian and Eduardo that TCT Nos. 38254 and 38255
conclusively show that the owners of the properties covered therein were
Joaquin and Caridad by virtue of the registration in the name of Joaquin
Agtarap casado con (married to) Caridad Garcia, deserves scant
consideration. This cannot be said to be a collateral attack on the said TCTs.
Indeed, simple possession of a certificate of title is not necessarily conclusive
of a holder’s true ownership of property.25 A certificate of title under the Torrens
system aims to protect dominion; it cannot be used as an instrument for the
deprivation of ownership.26 Thus, the fact that the properties were registered in
the name of Joaquin Agtarap, married to Caridad Garcia, is not sufficient proof
that the properties were acquired during the spouses’ coverture. 27The phrase
"married to Caridad Garcia" in the TCTs is merely descriptive of the civil status
of Joaquin as the registered owner, and does not necessarily prove that the
realties are their conjugal properties.28
Neither can Sebastian’s claim that Joaquin’s estate could have already been
settled in 1965 after the payment of the inheritance tax be upheld. Payment of
the inheritance tax, per se, does not settle the estate of a deceased person. As
provided in Section 1, Rule 90 of the Rules of Court—
SECTION 1. When order for distribution of residue made. -- When the debts,
funeral charges, and expenses of administration, the allowance to the widow,
and inheritance tax, if any, chargeable to the estate in accordance with law,
have been paid, the court, on the application of the executor or administrator,
or of a person interested in the estate, and after hearing upon notice, shall
assign the residue of the estate to the persons entitled to the same, naming
them and the proportions, or parts, to which each is entitled, and such persons
may demand and recover their respective shares from the executor or
administrator, or any other person having the same in his possession. If there
is a controversy before the court as to who are the lawful heirs of the deceased
person or as to the distributive share to which each person is entitled under the
law, the controversy shall be heard and decided as in ordinary cases.
No distribution shall be allowed until the payment of the obligations above
mentioned has been made or provided for, unless the distributees, or any of
them, give a bond, in a sum to be fixed by the court, conditioned for the
payment of said obligations within such time as the court directs.
Thus, an estate is settled and distributed among the heirs only after the
payment of the debts of the estate, funeral charges, expenses of
Page 19 of 77
administration, allowance to the widow, and inheritance tax. The records of
these cases do not show that these were complied with in 1965.
As regards the issue raised by Sebastian on the legitimacy of Joseph and
Teresa, suffice it to say that both the RTC and the CA found them to be the
legitimate children of Jose. The RTC found that Sebastian did not present clear
and convincing evidence to support his averments in his motion to exclude
them as heirs of Joaquin, aside from his negative allegations. The RTC also
noted the fact of Joseph and Teresa being the children of Jose was never
questioned by Sebastian and Eduardo, and the latter two even admitted this in
their petitions, as well as in the stipulation of facts in the August 21, 1995
hearing.29 Furthermore, the CA affirmed this finding of fact in its November 21,
2006 Decision.30
Also, Sebastian’s insistence that Abelardo Dagoro and Walter de Santos are
not heirs to the estate of Joaquin cannot be sustained. Per its October 23,
2000 Order of Partition, the RTC found that Gloria Agtarap de Santos died on
May 4, 1995, and was later substituted in the proceedings below by her
husband Walter de Santos. Gloria begot a daughter with Walter de Santos,
Georgina Samantha de Santos. The RTC likewise noted that, on September
16, 1995, Abelardo Dagoro filed a motion for leave of court to intervene,
alleging that he is the surviving spouse of Mercedes Agtarap and the father of
Cecilia Agtarap Dagoro, and his answer in intervention. The RTC later granted
the motion, thereby admitting his answer on October 18, 1995. 31 The CA also
noted that, during the hearing of the motion to intervene on October 18, 1995,
Sebastian and Eduardo did not interpose any objection when the intervention
was submitted to the RTC for resolution.32
Indeed, this Court is not a trier of facts, and there appears no compelling
reason to hold that both courts erred in ruling that Joseph, Teresa, Walter de
Santos, and Abelardo Dagoro rightfully participated in the estate of Joaquin. It
was incumbent upon Sebastian to present competent evidence to refute his
and Eduardo’s admissions that Joseph and Teresa were heirs of Jose, and
thus rightful heirs of Joaquin, and to timely object to the participation of Walter
de Santos and Abelardo Dagoro. Unfortunately, Sebastian failed to do so.
Nevertheless, Walter de Santos and Abelardo Dagoro had the right to
participate in the estate in representation of the Joaquin’s compulsory heirs,
Gloria and Mercedes, respectively.33
This Court also differs from Eduardo’s asseveration that the CA erred in
settling, together with Joaquin’s estate, the respective estates of Lucia, Jesus,
Jose, Mercedes, and Gloria. A perusal of the November 21, 2006 CA Decision
would readily show that the disposition of the properties related only to the
settlement of the estate of Joaquin. Pursuant to Section 1, Rule 90 of the Rules
of Court, as cited above, the RTC was specifically granted jurisdiction to
determine who are the lawful heirs of Joaquin, as well as their respective
shares after the payment of the obligations of the estate, as enumerated in the
said provision. The inclusion of Lucia, Jesus, Jose, Mercedes, and Gloria in the
distribution of the shares was merely a necessary consequence of the
settlement of Joaquin’s estate, they being his legal heirs.
However, we agree with Eduardo’s position that the CA erred in distributing
Joaquin’s estate pertinent to the share allotted in favor of Milagros. Eduardo
was able to show that a separate proceeding was instituted for the probate of
the will allegedly executed by Milagros before the RTC, Branch 108, Pasay
City.34 While there has been no showing that the alleged will of Milagros,
bequeathing all of her share from Joaquin’s estate in favor of Eduardo, has
already been probated and approved, prudence dictates that this Court refrain
from distributing Milagros’ share in Joaquin’s estate.
It is also worthy to mention that Sebastian died on January 15, 2010, per his
Certificate of Death.35 He is survived by his wife Teresita B. Agtarap (Teresita)
and his children Joaquin Julian B. Agtarap (Joaquin Julian) and Ana Ma.
Agtarap Panlilio (Ana Ma.).
Henceforth, in light of the foregoing, the assailed November 21, 2006 Decision
and the March 27, 2007 Resolution of the CA should be affirmed with
modifications such that the share of Milagros shall not yet be distributed until
after the final determination of the probate of her purported will, and that
Sebastian shall be represented by his compulsory heirs.
WHEREFORE, the petition in G.R. No. 177192 is DENIED for lack of merit,
while the petition in G.R. No. 177099 is PARTIALLY GRANTED, such that the
Decision dated November 21, 2006 and the Resolution dated March 27, 2007
of the Court of Appeals are AFFIRMED with the following MODIFICATIONS:
that the share awarded in favor of Milagros Agtarap shall not be distributed
until the final determination of the probate of her will, and that petitioner
Sebastian G. Agtarap, in view of his demise on January 15, 2010, shall be
represented by his wife Teresita B. Agtarap and his children Joaquin Julian B.
Agtarap and Ana Ma. Agtarap Panlilio.
These cases are hereby remanded to the Regional Trial Court, Branch 114,
Pasay City, for further proceedings in the settlement of the estate of Joaquin
Agtarap. No pronouncement as to costs.
G.R. No. 183053 October 10, 2012
EMILIO A.M. SUNTAY III, Petitioner,
vs.
ISABEL COJUANGCO-SUNTAY, Respondent.
Page 20 of 77
The now overly prolonged, all-too familiar and too-much-stretched imbroglio
over the estate of Cristina Aguinaldo-Suntay has continued. We issued a
Decision in the dispute as in Inter Caetera. 1 We now find a need to replace the
decision.
Before us is a Motion for Reconsideration filed by respondent Isabel
Cojuangco-Suntay (respondent Isabel) of our Decision2 in G.R. No. 183053
dated 16 June 2010, directing the issuance of joint letters of administration to
both petitioner Emilio A.M. Suntay III (Emilio III) and respondent. The
dispositive portion thereof reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
in CA-G.R. CV No. 74949 is REVERSED and SET ASIDE. Letters of
Administration over the estate of decedent Cristina Aguinaldo-Suntay shall
issue to both petitioner Emilio A.M. Suntay III and respondent Isabel
Cojuangco-Suntay upon payment by each of a bond to be set by the Regional
Trial Court, Branch 78, Malolos, Bulacan, in Special Proceeding Case No. 117-
M-95. The Regional Trial Court, Branch 78, Malolos, Bulacan is likewise
directed to make a determination and to declare the heirs of decedent Cristina
Aguinaldo-Suntay according to the actual factual milieu as proven by the
parties, and all other persons with legal interest in the subject estate. It is
further directed to settle the estate of decedent Cristina Aguinaldo-Suntay with
dispatch. No costs.3
We are moved to trace to its roots the controversy between the parties.
The decedent Cristina Aguinaldo-Suntay (Cristina) died intestate on 4 June
1990. Cristina was survived by her spouse, Dr. Federico Suntay (Federico) and
five grandchildren: three legitimate grandchildren, including herein respondent,
Isabel; and two illegitimate grandchildren, including petitioner Emilio III, all by
Federico’s and Cristina’s only child, Emilio A. Suntay (Emilio I), who
predeceased his parents.
The illegitimate grandchildren, Emilio III and Nenita, were both reared from
infancy by the spouses Federico and Cristina. Their legitimate grandchildren,
Isabel and her siblings, Margarita and Emilio II, lived with their mother Isabel
Cojuangco, following the separation of Isabel’s parents, Emilio I and Isabel
Cojuangco. Isabel’s parents, along with her paternal grandparents, were
involved in domestic relations cases, including a case for parricide filed by
Isabel Cojuangco against Emilio I. Emilio I was eventually acquitted.
In retaliation, Emilio I filed a complaint for legal separation against his wife,
charging her among others with infidelity. The trial court declared as null and
void and of no effect the marriage of Emilio I and Isabel Cojuangco on the
finding that:
From February 1965 thru December 1965 plaintiff was confined in the Veterans
memorial Hospital. Although at the time of the trial of parricide case
(September 8, 1967) the patient was already out of the hospital, he continued
to be under observation and treatment.
It is the opinion of Dr. Aramil that the symptoms of the plaintiffs mental
aberration classified as schizophernia (sic) had made themselves manifest
even as early as 1955; that the disease worsened with time, until 1965 when
he was actually placed under expert neuro-psychiatrist (sic) treatment; that
even if the subject has shown marked progress, the remains bereft of adequate
understanding of right and wrong.
There is no controversy that the marriage between the parties was effected on
July 9, 1958, years after plaintiffs mental illness had set in. This fact would
justify a declaration of nullity of the marriage under Article 85 of the Civil Code
which provides:
Art. 95. (sic) A marriage may be annulled for any of the following causes after
(sic) existing at the time of the marriage:
xxxx
(3) That either party was of unsound mind, unless such party, after coming to
reason, freely cohabited with the other as husband or wife.
There is a dearth of proof at the time of the marriage defendant knew about the
mental condition of plaintiff; and there is proof that plaintiff continues to be
without sound reason. The charges in this very complaint add emphasis to the
findings of the neuro-psychiatrist handling the patient, that plaintiff really lives
more in fancy than in reality, a strong indication of schizophernia (sic). 4
Intent on maintaining a relationship with their grandchildren, Federico and
Isabel filed a complaint for visitation rights to spend time with Margarita, Emilio
II, and Isabel in the same special lower court. The Juvenile Domestic Relations
Court in Quezon City (JDRC-QC) granted their prayer for one hour a month of
visitation rights which was subsequently reduced to thirty minutes, and
ultimately stopped, because of respondent Isabel’s testimony in court that her
grandparents’ visits caused her and her siblings stress and anxiety. 5
On 27 September 1993, more than three years after Cristina’s death, Federico
adopted his illegitimate grandchildren, Emilio III and Nenita.
On 26 October 1995, respondent Isabel, filed before the Regional Trial Court
(RTC), Malolos, Bulacan, a petition for the issuance of letters of administration
over Cristina’s estate docketed as Special Proceeding Case No. 117-M-95.
Page 21 of 77
Federico, opposed the petition, pointing out that: (1) as the surviving spouse of
the decedent, he should be appointed administrator of the decedent’s estate;
(2) as part owner of the mass of conjugal properties left by the decedent, he
must be accorded preference in the administration thereof; (3) Isabel and her
siblings had been alienated from their grandparents for more than thirty (30)
years; (4) the enumeration of heirs in the petition was incomplete as it did not
mention the other children of his son, Emilio III and Nenita; (5) even before the
death of his wife, Federico had administered their conjugal properties, and
thus, is better situated to protect the integrity of the decedent’s estate; (6) the
probable value of the estate as stated in the petition was grossly overstated;
and (7) Isabel’s allegation that some of the properties are in the hands of
usurpers is untrue.
Federico filed a Motion to Dismiss Isabel’s petition for letters of administration
on the ground that Isabel had no right of representation to the estate of
Cristina, she being an illegitimate grandchild of the latter as a result of Isabel’s
parents’ marriage being declared null and void. However, in Suntay v.
Cojuangco-Suntay, we categorically declared that Isabel and her siblings,
having been born of a voidable marriage as opposed to a void marriage based
on paragraph 3, Article 85 of the Civil Code, were legitimate children of Emilio
I, who can all represent him in the estate of their legitimate grandmother, the
decedent, Cristina.
Undaunted by the set back, Federico nominated Emilio III to administer the
decedent’s estate on his behalf in the event letters of administration issues to
Federico. Consequently, Emilio III filed an Opposition-In-Intervention, echoing
the allegations in his grandfather’s opposition, alleging that Federico, or in his
stead, Emilio III, was better equipped than respondent to administer and
manage the estate of the decedent, Cristina.
On 13 November 2000, Federico died.
Almost a year thereafter or on 9 November 2001, the trial court rendered a
decision appointing Emilio III as administrator of decedent Cristina’s intestate
estate:
WHEREFORE, the petition of Isabel Cojuangco-Suntay is DENIED and the
Opposition-in-Intervention is GRANTED.
Accordingly, the Intervenor, Emilio A.M. Suntay, III (sic) is hereby appointed
administrator of the estate of the decedent Cristina Aguinaldo Suntay, who
shall enter upon the execution of his trust upon the filing of a bond in the
amount of ₱ 200,000.00, conditioned as follows:
(1) To make and return within three (3) months, a true and complete inventory;
(2) To administer the estate and to pay and discharge all debts, legatees, and
charge on the same, or dividends thereon;
(3) To render a true and just account within one (1) year, and at any other time
when required by the court, and
(4) To perform all orders of the Court.
Once the said bond is approved by the court, let Letters of Administration be
issued in his favor.6
On appeal, the Court of Appeals reversed and set aside the decision of the
RTC, revoked the Letters of Administration issued to Emilio III, and appointed
respondent as administratrix of the subject estate:
WHEREFORE, in view of all the foregoing, the assailed decision dated
November 9, 2001 of Branch 78, Regional Trial Court of Malolos, Bulacan in
SPC No. 117-M-95 is REVERSED and SET ASIDE and the letters of
administration issued by the said court to Emilio A.M. Suntay III, if any, are
consequently revoked. Petitioner Isabel Cojuangco-Suntay is hereby appointed
administratrix of the intestate estate of Cristina Aguinaldo Suntay. Let letters of
administration be issued in her favor upon her filing of a bond in the amount of
Two Hundred Thousand (₱ 200,000.00) Pesos.7
As previously adverted to, on appeal by certiorari, we reversed and set aside
the ruling of the appellate court. We decided to include Emilio III as co-
administrator of Cristina’s estate, giving weight to his interest in Federico’s
estate. In ruling for co-administration between Emilio III and
Isabel, we considered that:
1. Emilio III was reared from infancy by the decedent, Cristina, and her
husband, Federico, who both acknowledged him as their grandchild;
2. Federico claimed half of the properties included in the estate of the
decedent, Cristina, as forming part of their conjugal partnership of
gains during the subsistence of their marriage;
3. Cristina’s properties, forming part of her estate, are still commingled
with those of her husband, Federico, because her share in the conjugal
partnership remains undetermined and unliquidated; and
4. Emilio III is a legally adopted child of Federico, entitled to share in
the distribution of the latter’s estate as a direct heir, one degree from
Page 22 of 77
Federico, and not simply in representation of his deceased illegitimate
father, Emilio I.
In this motion, Isabel pleads for total affirmance of the Court of Appeals’
Decision in favor of her sole administratorship based on her status as a
legitimate grandchild of Cristina, whose estate she seeks to administer.
Isabel contends that the explicit provisions of Section 6, Rule 78 of the Rules of
Court on the order of preference for the issuance of letters of administration
cannot be ignored and that Article 992 of the Civil Code must be followed.
Isabel further asserts that Emilio III had demonstrated adverse interests and
disloyalty to the estate, thus, he does not deserve to become a co-
administrator thereof.
Specifically, Isabel bewails that: (1) Emilio III is an illegitimate grandchild and
therefore, not an heir of the decedent; (2) corollary thereto, Emilio III, not being
a "next of kin" of the decedent, has no interest in the estate to justify his
appointment as administrator thereof; (3) Emilio III’s actuations since his
appointment as administrator by the RTC on 9 November 2001 emphatically
demonstrate the validity and wisdom of the order of preference in Section 6,
Rule 78 of the Rules of Court; and (4) there is no basis for joint administration
as there are no "opposing parties or factions to be represented."
To begin with, the case at bar reached us on the issue of who, as between
Emilio III and Isabel, is better qualified to act as administrator of the decedent’s
estate. We did not choose. Considering merely his demonstrable interest in the
subject estate, we ruled that Emilio III should likewise administer the estate of
his illegitimate grandmother, Cristina, as a co-administrator. In the context of
this case, we have to make a choice and therefore, reconsider our decision of
16 June 2010.
The general rule in the appointment of administrator of the estate of a decedent
is laid down in Section 6, Rule 78 of the Rules of Court:
SEC. 6. When and to whom letters of administration granted. – If no executor is
named in the will, or the executor or executors are incompetent, refuse the
trust, or fail to give bond, or a person dies intestate, administration shall be
granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or
both, in the discretion of the court, or to such person as such surviving
husband or wife, or next of kin, requests to have appointed, if competent and
willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the
person selected by them, be incompetent or unwilling, or if the husband or
widow, or next of kin, neglects for thirty (30) days after the death of the person
to apply for administration or to request that administration be granted to some
other person, it may be granted to one or more of the principal creditors, if
competent and willing to serve;
(c) If there is not such creditor competent and willing to serve, it may be
granted to such other person as the court may select.
Textually, the rule lists a sequence to be observed, an order of preference, in
the appointment of an administrator. This order of preference, which
categorically seeks out the surviving spouse, the next of kin and the creditors in
the appointment of an administrator, has been reinforced in jurisprudence.8
The paramount consideration in the appointment of an administrator over the
estate of a decedent is the prospective administrator’s interest in the
estate.9 This is the same consideration which Section 6, Rule 78 takes into
account in establishing the order of preference in the appointment of
administrator for the estate. The rationale behind the rule is that those who will
reap the benefit of a wise, speedy and economical administration of the estate,
or, in the alternative, suffer the consequences of waste, improvidence or
mismanagement, have the highest interest and most influential motive to
administer the estate correctly.10 In all, given that the rule speaks of an order of
preference, the person to be appointed administrator of a decedent’s estate
must demonstrate not only an interest in the estate, but an interest therein
greater than any other candidate.
To illustrate, the preference bestowed by law to the surviving spouse in the
administration of a decedent’s estate presupposes the surviving spouse’s
interest in the conjugal partnership or community property forming part of the
decedent’s estate.11 Likewise, a surviving spouse is a compulsory heir of a
decedent12 which evinces as much, if not more, interest in administering the
entire estate of a decedent, aside from her share in the conjugal partnership or
absolute community property.
It is to this requirement of observation of the order of preference in the
appointment of administrator of a decedent’s estate, that the appointment of
co-administrators has been allowed, but as an exception. We again refer to
Section 6(a) of Rule 78 of the Rules of Court which specifically states that
letters of administration may be issued to both the surviving spouse and the
next of kin. In addition and impliedly, we can refer to Section 2 of Rule 82 of the
Rules of Court which say that "x x x when an executor or administrator dies,
resigns, or is removed, the remaining executor or administrator may administer
the trust alone, x x x."
Page 23 of 77
In a number of cases, we have sanctioned the appointment of more than one
administrator for the benefit of the estate and those interested therein. 13 We
recognized that the appointment of administrator of the estate of a decedent or
the determination of a person’s suitability for the office of judicial administrator
rests, to a great extent, in the sound judgment of the court exercising the power
of appointment.14
Under certain circumstances and for various reasons well-settled in Philippine
and American jurisprudence, we have upheld the appointment of co-
administrators: (1) to have the benefits of their judgment and perhaps at all
times to have different interests represented;15 (2) where justice and equity
demand that opposing parties or factions be represented in the management of
the estate of the deceased; (3) where the estate is large or, from any cause, an
intricate and perplexing one to settle;16 (4) to have all interested persons
satisfied and the representatives to work in harmony for the best interests of
the estate;17 and when a person entitled to the administration of an estate
desires to have another competent person associated with him in the office. 18
In the frequently cited Matias v. Gonzales, we dwelt on the appointment of
special co-administrators during the pendency of the appeal for the probate of
the decedent’s will. Pending the probate thereof, we recognized Matias’ special
interest in the decedent’s estate as universal heir and executrix designated in
the instrument who should not be excluded in the administration thereof. Thus,
we held that justice and equity demands that the two (2) factions among the
non-compulsory heirs of the decedent, consisting of an instituted heir (Matias)
and intestate heirs (respondents thereat), should be represented in the
management of the decedent’s estate.19
Another oft-cited case is Vda. de Dayrit v. Ramolete, where we held that
"inasmuch as petitioner-wife owns one-half of the conjugal properties and that
she, too, is a compulsory heir of her husband, to deprive her of any hand in the
administration of the estate prior to the probate of the will would be unfair to her
proprietary interests."20
Hewing closely to the aforementioned cases is our ruling in Ventura v.
Ventura21 where we allowed the appointment of the surviving spouse and
legitimate children of the decedent as co-administrators. However, we drew a
distinction between the heirs categorized as next of kin, the nearest of kin in
the category being preferred, thus:
In the case at bar, the surviving spouse of the deceased Gregorio Ventura is
Juana Cardona while the next of kin are: Mercedes and Gregoria Ventura and
Maria and Miguel Ventura. The "next of kin" has been defined as those
persons who are entitled under the statute of distribution to the decedent’s
property (citations omitted). It is generally said that "the nearest of kin, whose
interest in the estate is more preponderant, is preferred in the choice of
administrator. ‘Among members of a class the strongest ground for preference
is the amount or preponderance of interest. As between next of kin, the nearest
of kin is to be preferred.’" (citations omitted)
As decided by the lower court and sustained by the Supreme Court, Mercedes
and Gregoria Ventura are the legitimate children of Gregorio Ventura and his
wife, the late Paulina Simpliciano. Therefore, as the nearest of kin of Gregorio
Ventura, they are entitled to preference over the illegitimate children of
Gregorio Ventura, namely: Maria and Miguel Ventura. Hence, under the
aforestated preference provided in Section 6 of Rule 78, the person or persons
to be appointed administrator are Juana Cardona, as the surviving spouse, or
Mercedes and Gregoria Ventura as nearest of kin, or Juana Cardona and
Mercedes and Gregoria Ventura in the discretion of the Court, in order to
represent both interests.22 (Emphasis supplied)
In Silverio, Sr. v. Court of Appeals,23 we maintained that the order of preference
in the appointment of an administrator depends on the attendant facts and
circumstances. In that case, we affirmed the legitimate child’s appointment as
special administrator, and eventually as regular administrator, of the
decedent’s estate as against the surviving spouse who the lower court found
unsuitable. Reiterating Sioca v. Garcia24 as good law, we pointed out that
unsuitableness for appointment as administrator may consist in adverse
interest of some kind or hostility to those immediately interested in the estate.
In Valarao v. Pascual,25 we see another story with a running theme of heirs
squabbling over the estate of a decedent. We found no reason to set aside the
probate court’s refusal to appoint as special co-administrator Diaz, even if he
had a demonstrable interest in the estate of the decedent and represented one
of the factions of heirs, because the evidence weighed by the probate court
pointed to Diaz’s being remiss in his previous duty as co-administrator of the
estatein the early part of his administration. Surveying the previously discussed
cases of Matias, Corona, and Vda. de Dayrit, we clarified, thus:
Respondents cannot take comfort in the cases of Matias v. Gonzales, Corona
v. Court of Appeals, and Vda. de Dayrit v. Ramolete, cited in the assailed
Decision. Contrary to their claim, these cases do not establish an absolute right
demandable from the probate court to appoint special co-administrators who
would represent the respective interests of squabbling heirs. Rather, the cases
constitute precedents for the authority of the probate court to designate not just
one but also two or more special co-administrators for a single estate. Now
whether the probate court exercises such prerogative when the heirs are
fighting among themselves is a matter left entirely to its sound discretion.
Page 24 of 77
Furthermore, the cases of Matias, Corona and Vda. de Dayrit hinge upon
factual circumstances other than the incompatible interests of the heirs which
are glaringly absent from the instant case. In Matias this Court ordered the
appointment of a special co-administrator because of the applicant's status as
the universal heir and executrix designated in the will, which we considered to
be a "special interest" deserving protection during the pendency of the appeal.
Quite significantly, since the lower court in Matias had already deemed it best
to appoint more than one special administrator, we found grave abuse of
discretion in the act of the lower court in ignoring the applicant's distinctive
status in the selection of another special administrator.
In Corona we gave "highest consideration" to the "executrix's choice of Special
Administrator, considering her own inability to serve and the wide latitude of
discretion given her by the testatrix in her will," for this Court to compel her
appointment as special co-administrator. It is also manifest from the decision in
Corona that the presence of conflicting interests among the heirs therein was
not per se the key factor in the designation of a second special administrator as
this fact was taken into account only to disregard or, in the words of Corona, to
"overshadow" the objections to the appointment on grounds of "impracticality
and lack of kinship."
Finally in Vda. de Dayrit we justified the designation of the wife of the decedent
as special co-administrator because it was "our considered opinion that
inasmuch as petitioner-wife owns one-half of the conjugal properties and that
she, too, is a compulsory heir of her husband, to deprive her of any hand in the
administration of the estate prior to the probate of the will would be unfair to her
proprietary interests." The special status of a surviving spouse in the special
administration of an estate was also emphasized in Fule v. Court of Appeals
where we held that the widow would have more interest than any other next of
kin in the proper administration of the entire estate since she possesses not
only the right of succession over a portion of the exclusive property of the
decedent but also a share in the conjugal partnership for which the good or bad
administration of the estate may affect not just the fruits but more critically the
naked ownership thereof. And in Gabriel v. Court of Appeals we recognized the
distinctive status of a surviving spouse applying as regular administrator of the
deceased spouse's estate when we counseled the probate court that "there
must be a very strong case to justify the exclusion of the widow from the
administration."
Clearly, the selection of a special co-administrator in Matias, Corona and Vda.
de Dayrit was based upon the independent proprietary interests and moral
circumstances of the appointee that were not necessarily related to the
demand for representation being repeatedly urged by respondents. 26(Emphasis
supplied)
In Gabriel v. Court of Appeals, we unequivocally declared the mandatory
character of the rule on the order of preference for the issuance of letters of
administration:
Evidently, the foregoing provision of the Rules prescribes the order of
preference in the issuance of letters of administration, it categorically seeks out
the surviving spouse, the next of kin and the creditors, and requires that
sequence to be observed in appointing an administrator. It would be a grave
abuse of discretion for the probate court to imperiously set aside and
insouciantly ignore that directive without any valid and sufficient reason
therefor.27
Subsequently, in Angeles v. Angeles-Maglaya,28 we expounded on the legal
contemplation of a "next of kin," thus:
Finally, it should be noted that on the matter of appointment of administrator of
the estate of the deceased, the surviving spouse is preferred over the next of
kin of the decedent. When the law speaks of "next of kin," the reference is to
those who are entitled, under the statute of distribution, to the decedent's
property; one whose relationship is such that he is entitled to share in the
estate as distributed, or, in short, an heir. In resolving, therefore, the issue of
whether an applicant for letters of administration is a next of kin or an heir of
the decedent, the probate court perforce has to determine and pass upon the
issue of filiation. A separate action will only result in a multiplicity of suits. Upon
this consideration, the trial court acted within bounds when it looked into and
passed upon the claimed relationship of respondent to the late Francisco
Angeles.29
Finally, in Uy v. Court of Appeals,30 we took into consideration the size of, and
benefits to, the estate should respondent therein be appointed as co-
administrator. We emphasized that where the estate is large or, from any
cause, an intricate and perplexing one to settle, the appointment of co-
administrators may be sanctioned by law.
In our Decision under consideration, we zeroed in on Emilio III’s demonstrable
interest in the estate and glossed over the order of preference set forth in the
Rules. We gave weight to Emilio III’s demonstrable interest in Cristina’s estate
and without a closer scrutiny of the attendant facts and circumstances, directed
co-administration thereof. We are led to a review of such position by the
foregoing survey of cases.
The collected teaching is that mere demonstration of interest in the estate to be
settled does not ipso facto entitle an interested person to co-administration
thereof. Neither does squabbling among the heirs nor adverse interests
necessitate the discounting of the order of preference set forth in Section 6,
Page 25 of 77
Rule 78. Indeed, in the appointment of administrator of the estate of a
deceased person, the principal consideration reckoned with is the interest in
said estate of the one to be appointed as administrator. 31 Given Isabel’s
unassailable interest in the estate as one of the decedent’s legitimate
grandchildren and undoubted nearest "next of kin," the appointment of Emilio
III as co-administrator of the same estate, cannot be a demandable right. It is a
matter left entirely to the sound discretion of the Court 32 and depends on the
facts and the attendant circumstances of the case.33
Thus, we proceed to scrutinize the attendant facts and circumstances of this
case even as we reiterate Isabel’s and her sibling’s apparent greater interest in
the estate of Cristina.
These considerations do not warrant the setting aside of the order of
preference mapped out in Section 6, Rule 78 of the Rules of Court. They
compel that a choice be made of one over the other.
1. The bitter estrangement and long-standing animosity between
Isabel, on the one hand, and Emilio III, on the other, traced back from
the time their paternal grandparents were alive, which can be
characterized as adverse interest of some kind by, or hostility of, Emilio
III to Isabel who is immediately interested in the estate;
2. Corollary thereto, the seeming impossibility of Isabel and Emilio III
working harmoniously as co-administrators may result in prejudice to
the decedent’s estate, ultimately delaying settlement thereof; and
3. Emilio III, for all his claims of knowledge in the management of
Cristina’s estate, has not looked after the estate’s welfare and has
acted to the damage and prejudice thereof.
Contrary to the assumption made in the Decision that Emilio III’s demonstrable
interest in the estate makes him a suitable co-administrator thereof, the
evidence reveals that Emilio III has turned out to be an unsuitable administrator
of the estate. Respondent Isabel points out that after Emilio III’s appointment
as administrator of the subject estate in 2001, he has not looked after the
welfare of the subject estate and has actually acted to the damage and
prejudice thereof as evidenced by the following:
1. Emilio III, despite several orders from the probate court for a
complete inventory, omitted in the partial inventories34 he filed
therewith properties of the estate35 including several parcels of land,
cash, bank deposits, jewelry, shares of stock, motor vehicles, and
other personal properties, contrary to Section 1,36paragraph a, Rule 81
of the Rules of Court.
 2. Emilio III did not take action on both occasions against Federico’s
settlement of the decedent’s estate which adjudicated to himself a
number of properties properly belonging to said estate (whether wholly
or partially), and which contained a declaration that the decedent did
not leave any descendants or heirs, except for Federico, entitled to
succeed to her estate.37
In compliance to our Resolution dated 18 April 2012 requiring Emilio III to
respond to the following imputations of Isabel that:
1. Emilio III did not file an inventory of the assets until November 14, 2002;
2. The inventory Emilio III submitted did not include several properties of the
decedent;
3. That properties belonging to the decedent have found their way to different
individuals or persons; several properties to Federico Suntay himself; and
4. While some properties have found their way to Emilio III, by reason of
falsified documents;38
Emilio III refutes Isabel’s imputations that he was lackadaisical in assuming
and performing the functions of administrator of Cristina’s estate:
1. From the time of the RTC’s Order appointing Emilio III as
administrator, Isabel, in her pleadings before the RTC, had vigorously
opposed Emilio III’s assumption of that office, arguing that "the
decision of the RTC dated 9 November 2001 is not among the
judgments authorized by the Rules of Court which may be immediately
implemented or executed;"
2. The delay in Emilio III’s filing of an inventory was due to Isabel’s
vociferous objections to Emilio III’s attempts to act as administrator
while the RTC decision was under appeal to the Court of Appeals;
3. The complained partial inventory is only initiatory, inherent in the
nature thereof, and one of the first steps in the lengthy process of
settlement of a decedent’s estate, such that it cannot constitute a
complete and total listing of the decedent’s properties; and
4. The criminal cases adverted to are trumped-up charges where
Isabel, as private complainant, has been unwilling to appear and
testify, leading the Judge of the Regional Trial Court, Branch 44 of
Page 26 of 77
Mamburao, Occidental Mindoro, to warn the prosecutor of a possible
motu propio dismissal of the cases.
While we can subscribe to Emilio III’s counsel’s explanation for the blamed
delay in the filing of an inventory and his exposition on the nature thereof,
partial as opposed to complete, in the course of the settlement of a decedent’s
estate, we do not find any clarification on Isabel’s accusation that Emilio III had
deliberately omitted properties in the inventory, which properties of Cristina he
knew existed and which he claims to be knowledgeable about.
The general denial made by Emilio III does not erase his unsuitability as
administrator rooted in his failure to "make and return x x x a true and complete
inventory" which became proven fact when he actually filed partial inventories
before the probate court and by his inaction on two occasions of Federico’s
exclusion of Cristina’s other compulsory heirs, herein Isabel and her siblings,
from the list of heirs.
As administrator, Emilio III enters into the office, posts a bond and executes an
oath to faithfully discharge the duties of settling the decedent’s estate with the
end in view of distribution to the heirs, if any. This he failed to do. The
foregoing circumstances of Emilio III’s omission and inaction become even
more significant and speak volume of his unsuitability as administrator as it
demonstrates his interest adverse to those immediately interested in the estate
of the decedent, Cristina.
In this case, palpable from the evidence on record, the pleadings, and the
protracted litigation, is the inescapable fact that Emilio III and respondent
Isabel have a deep aversion for each other.1awp++i1 To our mind, it becomes
highly impractical, nay, improbable, for the two to work as co-administrators of
their grandmother’s estate. The allegations of Emilio III, the testimony of
Federico and the other witnesses for Federico and Emilio III that Isabel and her
siblings were estranged from their grandparents further drive home the point
that Emilio III bears hostility towards Isabel. More importantly, it appears
detrimental to the decedent’s estate to appoint a co-administrator (Emilio III)
who has shown an adverse interest of some kind or hostility to those, such as
herein respondent Isabel, immediately interested in the said estate.
Bearing in mind that the issuance of letters of administration is simply a
preliminary order to facilitate the settlement of a decedent’s estate, we here
point out that Emilio III is not without remedies to protect his interests in the
estate of the decedent. In Hilado v. Court of Appeals,39 we mapped out as
among the allowable participation of "any interested persons" or "any persons
interested in the estate" in either testate or intestate proceedings:
xxxx
4. Section 640 of Rule 87, which allows an individual interested in the estate of
the deceased "to complain to the court of the concealment, embezzlement, or
conveyance of any asset of the decedent, or of evidence of the decedent’s title
or interest therein;"
5. Section 1041 of Rule 85, which requires notice of the time and place of the
examination and allowance of the Administrator’s account "to persons
interested;"
6. Section 7(b)42 of Rule 89, which requires the court to give notice "to the
persons interested" before it may hear and grant a petition seeking the
disposition or encumbrance of the properties of the estate; and
7. Section 1,43 Rule 90, which allows "any person interested in the estate" to
petition for an order for the distribution of the residue of the estate of the
decedent, after all obligations are either satisfied or provided for. 44
In addition to the foregoing, Emilio III may likewise avail of the remedy found in
Section 2, Rule 82 of the Rules of Court, to wit:
Sec. 2. Court may remove or accept resignation of executor or
administrator. Proceedings upon death, resignation, or removal. – If an
executor or administrator neglects to render his account and settle the estate
according to law, or to perform an order or judgment of the court, or a duty
expressly provided by these rules, or absconds, or becomes insane, or
otherwise incapable or unsuitable to discharge the trust, the court may remove
him, or, in its discretion, may permit him to resign. When an executor or
administrator dies, resigns, or is removed, the remaining executor or
administrator may administer the trust alone, unless the court grants letters to
someone to act with him. If there is no remaining executor or administrator,
administration may be granted to any suitable person.
Once again, as we have done in the Decision, we exercise judicial restraint: we
uphold that the question of who are the heirs of the decedent Cristina is not yet
upon us. Article 992 of the Civil Code or the curtain bar rule is inapplicable in
resolving the issue of who is better qualified to administer the estate of the
decedent.
Thus, our disquisition in the assailed Decision:
Nonetheless, it must be pointed out that judicial restraint impels us to refrain
from making a final declaration of heirship and distributing the presumptive
shares of the parties in the estates of Cristina and Federico, considering that
the question on who will administer the properties of the long deceased couple
has yet to be settled.
Page 27 of 77
Our holding in Capistrano v. Nadurata on the same issue remains good law:
The declaration of heirs made by the lower court is premature, although the
evidence sufficiently shows who are entitled to succeed the deceased. The
estate had hardly been judicially opened, and the proceeding has not as yet
reached the stage of distribution of the estate which must come after the
inheritance is liquidated.
Section 1, Rule 90 of the Rules of Court does not depart from the foregoing
admonition:
Sec. 1. When order for distribution of residue is made. - x x x. If there is a
controversy before the court as to who are the lawful heirs of the deceased
person or as to the distributive shares to which each person is entitled under
the law, the controversy shall be heard and decided as in ordinary cases.
No distribution shall be allowed until the payment of the obligations above
mentioned has been made or provided for, unless the distributees, or any of
them, give a bond, in a sum to be fixed by the court, conditioned for the
payment of said obligations within such time as the court directs. 45
Lastly, we dispose of a peripheral issue raised in the Supplemental
Comment46 of Emilio III questioning the Special Second Division which issued
the 18 April 2012 Resolution. Emilio III asseverates that "the operation of the
Special Second Division in Baguio is unconstitutional and void" as the Second
Division in Manila had already promulgated its Decision on 16 June 2010 on
the petition filed by him:
7. The question is: who created the Special Second Division in Baguio, acting
separately from the Second Division of the Supreme Court in Manila? There
will then be two Second Divisions of the Supreme Court: one acting with the
Supreme Court in Manila, and another Special Second Division acting
independently of the Second Division of the Supreme Court in Manila.47
For Emilio III’s counsels’ edification, the Special Second Division in Baguio is
not a different division created by the Supreme Court.
The Second Division which promulgated its Decision on this case on 16 June
2010, penned by Justice Antonio Eduardo B. Nachura, now has a different
composition, with the advent of Justice Nachura’s retirement on 13 June 2011.
Section 7, Rule 2 of the Internal Rules of the Supreme Court provides:
Sec. 7. Resolutions of motions for reconsideration or clarification of decisions
or signed resolutions and all other motions and incidents subsequently filed;
creation of a Special Division. – Motions for reconsideration or clarification of a
decision or of a signed resolution and all other motions and incidents
subsequently filed in the case shall be acted upon by the ponente and the
other Members of the Division who participated in the rendition of the decision
or signed resolution.
If the ponente has retired, is no longer a Member of the Court, is disqualified,
or has inhibited himself or herself from acting on the motion for reconsideration
or clarification, he or she shall be replaced through raffle by a new ponente
who shall be chosen among the new Members of the Division who participated
in the rendition of the decision or signed resolution and who concurred therein.
If only one Member of the Court who participated and concurred in the
rendition of the decision or signed resolution remains, he or she shall be
designated as the new ponente.
If a Member (not the ponente) of the Division which rendered the decision or
signed resolution has retired, is no longer a Member of the Court, is
disqualified, or has inhibited himself or herself from acting on the motion for
reconsideration or clarification, he or she shall be replaced through raffle by a
replacement Member who shall be chosen from the other Divisions until a new
Justice is appointed as replacement for the retired Justice. Upon the
appointment of a new Justice, he or she shall replace the designated Justice
as replacement Member of the Special Division.
Any vacancy or vacancies in the Special Division shall be filled by raffle from
among the other Members of the Court to constitute a Special Division of five
(5) Members.
If the ponente and all the Members of the Division that rendered the Decision
or signed Resolution are no longer Members of the Court, the case shall be
raffled to any Member of the Court and the motion shall be acted upon by him
or her with the participation of the other Members of the Division to which he or
she belongs.
If there are pleadings, motions or incidents subsequent to the denial of the
motion for reconsideration or clarification, the case shall be acted upon by the
ponente on record with the participation of the other Members of the Division to
which he or she belongs at the time said pleading, motion or incident is to be
taken up by the Court. (Emphasis supplied)
As regards the operation thereof in Baguio City, such is simply a change in
venue for the Supreme Court's summer session held last April.48
WHEREFORE, the Motion for Reconsideration is PARTIALLY GRANTED. Our
Decision in G.R. No. 183053 dated 16 June 2010 is MODIFIED. Letters of
Administration over the estate of decedent Cristina Aguinaldo-Suntay shall
Page 28 of 77
solely issue to respondent Isabel Cojuangco-Suntay upon payment of a bond
to be set by the Regional Trial Court, Branch 78, Malolos, Bulacan, in Special
Proceeding Case No. 117-M-95. The Regional Trial Court, Branch 78, Malolos,
Bulacan is likewise directed to settle the estate of decedent Cristina Aguinaldo-
Suntay with dispatch. No costs.
G.R. No. 146006 February 23, 2004
JOSE C. LEE AND ALMA AGGABAO, in their capacities as President and
Corporate Secretary, respectively, of Philippines International Life
Insurance Company, and FILIPINO LOAN ASSISTANCE
GROUP, petitioners
vs.
REGIONAL TRIAL COURT OF QUEZON CITY BRANCH 85 presided by
JUDGE PEDRO M. AREOLA, BRANCH CLERK OF COURT JANICE Y.
ANTERO, DEPUTY SHERIFFS ADENAUER G. RIVERA and PEDRO L.
BORJA, all of the Regional Trial Court of Quezon City Branch 85, MA.
DIVINA ENDERES claiming to be Special Administratrix, and other
persons/ public officers acting for and in their behalf, respondents.
This is a petition for review under Rule 45 of the Rules of Court seeking to
reverse and set aside the decision1 of the Court of Appeals, First Division,
dated July 26, 2000, in CA G.R. 59736, which dismissed the petition for
certiorari filed by petitioners Jose C. Lee and Alma Aggabao (in their capacities
as president and secretary, respectively, of Philippine International Life
Insurance Company) and Filipino Loan Assistance Group.
The antecedent facts follow.
Dr. Juvencio P. Ortañez incorporated the Philippine International Life Insurance
Company, Inc. on July 6, 1956. At the time of the company’s incorporation, Dr.
Ortañez owned ninety percent (90%) of the subscribed capital stock.
On July 21, 1980, Dr. Ortañez died. He left behind a wife (Juliana Salgado
Ortañez), three legitimate children (Rafael, Jose and Antonio Ortañez) and five
illegitimate children by Ligaya Novicio (herein private respondent Ma. Divina
Ortañez-Enderes and her siblings Jose, Romeo, Enrico Manuel and Cesar, all
surnamed Ortañez).2
On September 24, 1980, Rafael Ortañez filed before the Court of First Instance
of Rizal, Quezon City Branch (now Regional Trial Court of Quezon City) a
petition for letters of administration of the intestate estate of Dr. Ortañez,
docketed as SP Proc. Q-30884 (which petition to date remains pending at
Branch 85 thereof).
Private respondent Ma. Divina Ortañez-Enderes and her siblings filed an
opposition to the petition for letters of administration and, in a subsequent
urgent motion, prayed that the intestate court appoint a special administrator.
On March 10, 1982, Judge Ernani Cruz Paño, then presiding judge of Branch
85, appointed Rafael and Jose Ortañez joint special administrators of their
father’s estate. Hearings continued for the appointment of a regular
administrator (up to now no regular administrator has been appointed).
As ordered by the intestate court, special administrators Rafael and Jose
Ortañez submitted an inventory of the estate of their father which included,
among other properties, 2,0293 shares of stock in Philippine International Life
Insurance Company (hereafter Philinterlife), representing 50.725% of the
company’s outstanding capital stock.
On April 15, 1989, the decedent’s wife, Juliana S. Ortañez, claiming that she
owned 1,0144 Philinterlife shares of stock as her conjugal share in the estate,
sold said shares with right to repurchase in favor of herein petitioner Filipino
Loan Assistance Group (FLAG), represented by its president, herein petitioner
Jose C. Lee. Juliana Ortañez failed to repurchase the shares of stock within
the stipulated period, thus ownership thereof was consolidated by petitioner
FLAG in its name.
On October 30, 1991, Special Administrator Jose Ortañez, acting in his
personal capacity and claiming that he owned the remaining 1,011 5 Philinterlife
shares of stocks as his inheritance share in the estate, sold said shares with
right to repurchase also in favor of herein petitioner FLAG, represented by its
president, herein petitioner Jose C. Lee. After one year, petitioner FLAG
consolidated in its name the ownership of the Philinterlife shares of stock when
Jose Ortañez failed to repurchase the same.
It appears that several years before (but already during the pendency of the
intestate proceedings at the Regional Trial Court of Quezon City, Branch 85),
Juliana Ortañez and her two children, Special Administrators Rafael and Jose
Ortañez, entered into a memorandum of agreement dated March 4, 1982 for
the extrajudicial settlement of the estate of Dr. Juvencio Ortañez, partitioning
the estate (including the Philinterlife shares of stock) among themselves. This
was the basis of the number of shares separately sold by Juliana Ortañez on
April 15, 1989 (1,014 shares) and by Jose Ortañez on October 30, 1991 (1,011
shares) in favor of herein petitioner FLAG.
On July 12, 1995, herein private respondent Ma. Divina Ortañez–Enderes and
her siblings (hereafter referred to as private respondents Enderes et al.) filed a
motion for appointment of special administrator of Philinterlife shares of stock.
This move was opposed by Special Administrator Jose Ortañez.
Page 29 of 77
On November 8, 1995, the intestate court granted the motion of private
respondents Enderes et al. and appointed private respondent Enderes special
administratrix of the Philinterlife shares of stock.
On December 20, 1995, Special Administratrix Enderes filed an urgent motion
to declare void ab initio the memorandum of agreement dated March 4, 1982.
On January 9, 1996, she filed a motion to declare the partial nullity of the
extrajudicial settlement of the decedent’s estate. These motions were opposed
by Special Administrator Jose Ortañez.
On March 22, 1996, Special Administratrix Enderes filed an urgent motion to
declare void ab initio the deeds of sale of Philinterlife shares of stock, which
move was again opposed by Special Administrator Jose Ortañez.
On February 4, 1997, Jose Ortañez filed an omnibus motion for (1) the
approval of the deeds of sale of the Philinterlife shares of stock and (2) the
release of Ma. Divina Ortañez-Enderes as special administratrix of the
Philinterlife shares of stock on the ground that there were no longer any shares
of stock for her to administer.
On August 11, 1997, the intestate court denied the omnibus motion of Special
Administrator Jose Ortañez for the approval of the deeds of sale for the reason
that:
Under the Godoy case, supra, it was held in substance that a sale of a property
of the estate without an Order of the probate court is void and passes no title to
the purchaser. Since the sales in question were entered into by Juliana S.
Ortañez and Jose S. Ortañez in their personal capacity without prior approval
of the Court, the same is not binding upon the Estate.
WHEREFORE, the OMNIBUS MOTION for the approval of the sale of
Philinterlife shares of stock and release of Ma. Divina Ortañez-Enderes as
Special Administratrix is hereby denied.6
On August 29, 1997, the intestate court issued another order granting the
motion of Special Administratrix Enderes for the annulment of the March 4,
1982 memorandum of agreement or extrajudicial partition of estate. The court
reasoned that:
In consonance with the Order of this Court dated August 11, 1997 DENYING
the approval of the sale of Philinterlife shares of stocks and release of Ma.
Divina Ortañez-Enderes as Special Administratrix, the "Urgent Motion to
Declare Void Ab Initio Memorandum of Agreement" dated December 19, 1995.
. . is hereby impliedly partially resolved insofar as the
transfer/waiver/renunciation of the Philinterlife shares of stock are concerned,
in particular, No. 5, 9(c), 10(b) and 11(d)(ii) of the Memorandum of Agreement.
WHEREFORE, this Court hereby declares the Memorandum of Agreement
dated March 4, 1982 executed by Juliana S. Ortañez, Rafael S. Ortañez and
Jose S. Ortañez as partially void ab initio insofar as the
transfer/waiver/renunciation of the Philinterlife shares of stocks are concerned. 7
Aggrieved by the above-stated orders of the intestate court, Jose Ortañez filed,
on December 22, 1997, a petition for certiorari in the Court of Appeals. The
appellate court denied his petition, however, ruling that there was no legal
justification whatsoever for the extrajudicial partition of the estate by Jose
Ortañez, his brother Rafael Ortañez and mother Juliana Ortañez during the
pendency of the settlement of the estate of Dr. Ortañez, without the requisite
approval of the intestate court, when it was clear that there were other heirs to
the estate who stood to be prejudiced thereby. Consequently, the sale made by
Jose Ortañez and his mother Juliana Ortañez to FLAG of the shares of stock
they invalidly appropriated for themselves, without approval of the intestate
court, was void.8
Special Administrator Jose Ortañez filed a motion for reconsideration of the
Court of Appeals decision but it was denied. He elevated the case to the
Supreme Court via petition for review under Rule 45 which the Supreme Court
dismissed on October 5, 1998, on a technicality. His motion for reconsideration
was denied with finality on January 13, 1999. On February 23, 1999, the
resolution of the Supreme Court dismissing the petition of Special
Administrator Jose Ortañez became final and was subsequently recorded in
the book of entries of judgments.
Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with the rest of the
FLAG-controlled board of directors, increased the authorized capital stock of
Philinterlife, diluting in the process the 50.725% controlling interest of the
decedent, Dr. Juvencio Ortañez, in the insurance company. 9 This became the
subject of a separate action at the Securities and Exchange Commission filed
by private respondent-Special Administratrix Enderes against petitioner Jose
Lee and other members of the FLAG-controlled board of Philinterlife on
November 7, 1994. Thereafter, various cases were filed by Jose Lee as
president of Philinterlife and Juliana Ortañez and her sons against private
respondent-Special Administratrix Enderes in the SEC and civil
courts.10 Somehow, all these cases were connected to the core dispute on the
legality of the sale of decedent Dr. Ortañez’s Philinterlife shares of stock to
petitioner FLAG, represented by its president, herein petitioner Jose Lee who
later became the president of Philinterlife after the controversial sale.
Page 30 of 77
On May 2, 2000, private respondent-Special Administratrix Enderes and her
siblings filed a motion for execution of the Orders of the intestate court dated
August 11 and August 29, 1997 because the orders of the intestate court
nullifying the sale (upheld by the Court of Appeals and the Supreme Court) had
long became final. Respondent-Special Administratrix Enderes served a copy
of the motion to petitioners Jose Lee and Alma Aggabao as president and
secretary, respectively, of Philinterlife,11 but petitioners ignored the same.
On July 6, 2000, the intestate court granted the motion for execution, the
dispositive portion of which read:
WHEREFORE, premises considered, let a writ of execution issue as follows:
1. Confirming the nullity of the sale of the 2,029 Philinterlife shares in
the name of the Estate of Dr. Juvencio Ortañez to Filipino Loan
Assistance Group (FLAG);
2. Commanding the President and the Corporate Secretary of
Philinterlife to reinstate in the stock and transfer book of Philinterlife the
2,029 Philinterlife shares of stock in the name of the Estate of Dr.
Juvencio P. Ortañez as the owner thereof without prejudice to other
claims for violation of pre-emptive rights pertaining to the said 2,029
Philinterlife shares;
3. Directing the President and the Corporate Secretary of Philinterlife
to issue stock certificates of Philinterlife for 2,029 shares in the name
of the Estate of Dr. Juvencio P. Ortañez as the owner thereof without
prejudice to other claims for violations of pre-emptive rights pertaining
to the said 2,029 Philinterlife shares and,
4. Confirming that only the Special Administratrix, Ma. Divina Ortañez-
Enderes, has the power to exercise all the rights appurtenant to the
said shares, including the right to vote and to receive dividends.
5. Directing Philinterlife and/or any other person or persons claiming to
represent it or otherwise, to acknowledge and allow the said Special
Administratrix to exercise all the aforesaid rights on the said shares
and to refrain from resorting to any action which may tend directly or
indirectly to impede, obstruct or bar the free exercise thereof under
pain of contempt.
6. The President, Corporate Secretary, any responsible officer/s of
Philinterlife, or any other person or persons claiming to represent it or
otherwise, are hereby directed to comply with this order within three (3)
days from receipt hereof under pain of contempt.
 7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby
directed to implement the writ of execution with dispatch to forestall
any and/or further damage to the Estate.
SO ORDERED.12
In the several occasions that the sheriff went to the office of petitioners to
execute the writ of execution, he was barred by the security guard upon
petitioners’ instructions. Thus, private respondent-Special Administratrix
Enderes filed a motion to cite herein petitioners Jose Lee and Alma Aggabao
(president and secretary, respectively, of Philinterlife) in contempt.13
Petitioners Lee and Aggabao subsequently filed before the Court of Appeals a
petition for certiorari, docketed as CA G.R. SP No. 59736. Petitioners alleged
that the intestate court gravely abused its discretion in (1) declaring that the
ownership of FLAG over the Philinterlife shares of stock was null and void; (2)
ordering the execution of its order declaring such nullity and (3) depriving the
petitioners of their right to due process.
On July 26, 2000, the Court of Appeals dismissed the petition outright:
We are constrained to DISMISS OUTRIGHT the present petition for certiorari
and prohibition with prayer for a temporary restraining order and/or writ of
preliminary injunction in the light of the following considerations:
1. The assailed Order dated August 11, 1997 of the respondent judge
had long become final and executory;
2. The certification on non-forum shopping is signed by only one (1) of
the three (3) petitioners in violation of the Rules; and
3. Except for the assailed orders and writ of execution, deed of sale
with right to repurchase, deed of sale of shares of stocks and omnibus
motion, the petition is not accompanied by such pleadings, documents
and other material portions of the record as would support the
allegations therein in violation of the second paragraph, Rule 65 of the
1997 Rules of Civil Procedure, as amended.
Petition is DISMISSED.
SO ORDERED.14
The motion for reconsideration filed by petitioners Lee and Aggabao of the
above decision was denied by the Court of Appeals on October 30, 2000:
Page 31 of 77
This resolves the "urgent motion for reconsideration" filed by the petitioners of
our resolution of July 26, 2000 dismissing outrightly the above-entitled petition
for the reason, among others, that the assailed Order dated August 11, 1997 of
the respondent Judge had long become final and executory.
Dura lex, sed lex.
WHEREFORE, the urgent motion for reconsideration is hereby DENIED, for
lack of merit.
SO ORDERED.15
On December 4, 2000, petitioners elevated the case to the Supreme Court
through a petition for review under Rule 45 but on December 13, 2000, we
denied the petition because there was no showing that the Court of Appeals in
CA G.R. SP No. 59736 committed any reversible error to warrant the exercise
by the Supreme Court of its discretionary appellate jurisdiction.16
However, upon motion for reconsideration filed by petitioners Lee and
Aggabao, the Supreme Court granted the motion and reinstated their petition
on September 5, 2001. The parties were then required to submit their
respective memoranda.
Meanwhile, private respondent-Special Administratrix Enderes, on July 19,
2000, filed a motion to direct the branch clerk of court in lieu of herein
petitioners Lee and Aggabao to reinstate the name of Dr. Ortañez in the stock
and transfer book of Philinterlife and issue the corresponding stock certificate
pursuant to Section 10, Rule 39 of the Rules of Court which provides that "the
court may direct the act to be done at the cost of the disobedient party by some
other person appointed by the court and the act when so done shall have the
effect as if done by the party." Petitioners Lee and Aggabao opposed the
motion on the ground that the intestate court should refrain from acting on the
motion because the issues raised therein were directly related to the issues
raised by them in their petition for certiorari at the Court of Appeals docketed
as CA-G.R. SP No. 59736. On October 30, 2000, the intestate court granted
the motion, ruling that there was no prohibition for the intestate court to execute
its orders inasmuch as the appellate court did not issue any TRO or writ of
preliminary injunction.
On December 3, 2000, petitioners Lee and Aggabao filed a petition for
certiorari in the Court of Appeals, docketed as CA-G.R. SP No. 62461,
questioning this time the October 30, 2000 order of the intestate court directing
the branch clerk of court to issue the stock certificates. They also questioned in
the Court of Appeals the order of the intestate court nullifying the sale made in
their favor by Juliana Ortañez and Jose Ortañez. On November 20, 2002, the
Court of Appeals denied their petition and upheld the power of the intestate
court to execute its order. Petitioners Lee and Aggabao then filed motion for
reconsideration which at present is still pending resolution by the Court of
Appeals.
Petitioners Jose Lee and Alma Aggabao (president and secretary, respectively,
of Philinterlife) and FLAG now raise the following errors for our consideration:
The Court of Appeals committed grave reversible ERROR:
A. In failing to reconsider its previous resolution denying the petition
despite the fact that the appellate court’s mistake in apprehending the
facts had become patent and evident from the motion for
reconsideration and the comment of respondent Enderes which had
admitted the factual allegations of petitioners in the petition as well as
in the motion for reconsideration. Moreover, the resolution of the
appellate court denying the motion for reconsideration was contained
in only one page without even touching on the substantive merits of the
exhaustive discussion of facts and supporting law in the motion for
reconsideration in violation of the Rule on administrative due process;
B. in failing to set aside the void orders of the intestate court on the
erroneous ground that the orders were final and executory with regard
to petitioners even as the latter were never notified of the proceedings
or order canceling its ownership;
C. in not finding that the intestate court committed grave abuse of
discretion amounting to excess of jurisdiction (1) when it issued the
Omnibus Order nullifying the ownership of petitioner FLAG over shares
of stock which were alleged to be part of the estate and (2) when it
issued a void writ of execution against petitioner FLAG as present
owner to implement merely provisional orders, thereby violating
FLAG’s constitutional right against deprivation of property without due
process;
D. In failing to declare null and void the orders of the intestate court
which nullified the sale of shares of stock between the legitimate heir
Jose S. Ortañez and petitioner FLAG because of settled law and
jurisprudence, i.e., that an heir has the right to dispose of the
decedent’s property even if the same is under administration pursuant
to Civil Code provision that possession of hereditary property is
transmitted to the heir the moment of death of the decedent (Acedebo
vs. Abesamis, 217 SCRA 194);
Page 32 of 77
E. In disregarding the final decision of the Supreme Court in G.R. No.
128525 dated December 17, 1999 involving substantially the same
parties, to wit, petitioners Jose C. Lee and Alma Aggabao were
respondents in that case while respondent Ma. Divina Enderes was the
petitioner therein. That decision, which can be considered law of the
case, ruled that petitioners cannot be enjoined by respondent Enderes
from exercising their power as directors and officers of Philinterlife and
that the intestate court in charge of the intestate proceedings cannot
adjudicate title to properties claimed to be part of the estate and which
are equally CLAIMED BY petitioner FLAG.17
The petition has no merit.
Petitioners Jose Lee and Alma Aggabao, representing Philinterlife and FLAG,
assail before us not only the validity of the writ of execution issued by the
intestate court dated July 7, 2000 but also the validity of the August 11, 1997
order of the intestate court nullifying the sale of the 2,029 Philinterlife shares of
stock made by Juliana Ortañez and Jose Ortañez, in their personal capacities
and without court approval, in favor of petitioner FLAG.
We cannot allow petitioners to reopen the issue of nullity of the sale of the
Philinterlife shares of stock in their favor because this was already settled a
long time ago by the Court of Appeals in its decision dated June 23, 1998 in
CA-G.R. SP No. 46342. This decision was effectively upheld by us in our
resolution dated October 9, 1998 in G.R. No. 135177 dismissing the petition for
review on a technicality and thereafter denying the motion for reconsideration
on January 13, 1999 on the ground that there was no compelling reason to
reconsider said denial.18 Our decision became final on February 23, 1999 and
was accordingly entered in the book of entry of judgments. For all intents and
purposes therefore, the nullity of the sale of the Philinterlife shares of stock
made by Juliana Ortañez and Jose Ortañez in favor of petitioner FLAG is
already a closed case. To reopen said issue would set a bad precedent,
opening the door wide open for dissatisfied parties to relitigate unfavorable
decisions no end. This is completely inimical to the orderly and efficient
administration of justice.
The said decision of the Court of Appeals in CA-G.R. SP No. 46342 affirming
the nullity of the sale made by Jose Ortañez and his mother Juliana Ortañez of
the Philinterlife shares of stock read:
Petitioner’s asseverations relative to said [memorandum] agreement were
scuttled during the hearing before this Court thus:
JUSTICE AQUINO: Counsel for petitioner, when the Memorandum of
Agreement was executed, did the children of Juliana Salgado know
 already that there was a claim for share in the inheritance of the
children of Novicio?
ATTY. CALIMAG: Your Honor please, at that time, Your Honor, it is
already known to them.
JUSTICE AQUINO: What can be your legal justification for extrajudicial
settlement of a property subject of intestate proceedings when there is
an adverse claim of another set of heirs, alleged heirs? What would be
the legal justification for extra-judicially settling a property under
administration without the approval of the intestate court?
ATTY. CALIMAG: Well, Your Honor please, in that extra-judicial
settlement there is an approval of the honorable court as to the
property’s partition x x x. There were as mentioned by the respondents’
counsel, Your Honor.
ATTY. BUYCO: No…
JUSTICE AQUINO: The point is, there can be no adjudication of a
property under intestate proceedings without the approval of the court.
That is basic unless you can present justification on that. In fact, there
are two steps: first, you ask leave and then execute the document and
then ask for approval of the document executed. Now, is there any
legal justification to exclude this particular transaction from those
steps?
ATTY. CALIMAG: None, Your Honor.
ATTY. BUYCO: With that admission that there is no legal justification,
Your Honor, we rest the case for the private respondent. How can the
lower court be accused of abusing its discretion? (pages 33-35, TSN of
January 29, 1998).
Thus, We find merit in the following postulation by private respondent:
What we have here is a situation where some of the heirs of the decedent
without securing court approval have appropriated as their own personal
property the properties of [the] Estate, to the exclusion and the extreme
prejudice of the other claimant/heirs. In other words, these heirs, without court
approval, have distributed the asset of the estate among themselves and
proceeded to dispose the same to third parties even in the absence of an order
of distribution by the Estate Court. As admitted by petitioner’s counsel, there
was absolutely no legal justification for this action by the heirs. There being no
legal justification, petitioner has no basis for demanding that public respondent
Page 33 of 77
[the intestate court] approve the sale of the Philinterlife shares of the Estate by
Juliana and Jose Ortañez in favor of the Filipino Loan Assistance Group.
It is an undisputed fact that the parties to the Memorandum of Agreement
dated March 4, 1982 (see Annex 7 of the Comment). . . are not the only heirs
claiming an interest in the estate left by Dr. Juvencio P. Ortañez. The records
of this case. . . clearly show that as early as March 3, 1981 an Opposition to
the Application for Issuance of Letters of Administration was filed by the
acknowledged natural children of Dr. Juvencio P. Ortañez with Ligaya Novicio.
. . This claim by the acknowledged natural children of Dr. Juvencio P. Ortañez
is admittedly known to the parties to the Memorandum of Agreement before
they executed the same. This much was admitted by petitioner’s counsel
during the oral argument. xxx
Given the foregoing facts, and the applicable jurisprudence, public respondent
can never be faulted for not approving. . . the subsequent sale by the petitioner
[Jose Ortañez] and his mother [Juliana Ortañez] of the Philinterlife shares
belonging to the Estate of Dr. Juvencio P. Ortañez." (pages 3-4 of Private
Respondent’s Memorandum; pages 243-244 of the Rollo)
Amidst the foregoing, We found no grave abuse of discretion amounting to
excess or want of jurisdiction committed by respondent judge. 19
From the above decision, it is clear that Juliana Ortañez, and her three sons,
Jose, Rafael and Antonio, all surnamed Ortañez, invalidly entered into a
memorandum of agreement extrajudicially partitioning the intestate estate
among themselves, despite their knowledge that there were other heirs or
claimants to the estate and before final settlement of the estate by the intestate
court. Since the appropriation of the estate properties by Juliana Ortañez and
her children (Jose, Rafael and Antonio Ortañez) was invalid, the subsequent
sale thereof by Juliana and Jose to a third party (FLAG), without court
approval, was likewise void.
An heir can sell his right, interest, or participation in the property under
administration under Art. 533 of the Civil Code which provides that possession
of hereditary property is deemed transmitted to the heir without interruption
from the moment of death of the decedent.20 However, an heir can only
alienate such portion of the estate that may be allotted to him in the division of
the estate by the probate or intestate court after final adjudication, that is, after
all debtors shall have been paid or the devisees or legatees shall have been
given their shares.21 This means that an heir may only sell his ideal or
undivided share in the estate, not any specific property therein. In the present
case, Juliana Ortañez and Jose Ortañez sold specific properties of the estate
(1,014 and 1,011 shares of stock in Philinterlife) in favor of petitioner FLAG.
This they could not lawfully do pending the final adjudication of the estate by
the intestate court because of the undue prejudice it would cause the other
claimants to the estate, as what happened in the present case.
Juliana Ortañez and Jose Ortañez sold specific properties of the estate,
without court approval. It is well-settled that court approval is necessary for the
validity of any disposition of the decedent’s estate. In the early case of Godoy
vs. Orellano,22 we laid down the rule that the sale of the property of the estate
by an administrator without the order of the probate court is void and passes no
title to the purchaser. And in the case of Dillena vs. Court of Appeals,23 we
ruled that:
[I]t must be emphasized that the questioned properties (fishpond) were
included in the inventory of properties of the estate submitted by then
Administratrix Fausta Carreon Herrera on November 14, 1974. Private
respondent was appointed as administratrix of the estate on March 3, 1976 in
lieu of Fausta Carreon Herrera. On November 1, 1978, the questioned deed of
sale of the fishponds was executed between petitioner and private respondent
without notice and approval of the probate court. Even after the sale,
administratrix Aurora Carreon still included the three fishponds as among the
real properties of the estate in her inventory submitted on August 13, 1981. In
fact, as stated by the Court of Appeals, petitioner, at the time of the sale of the
fishponds in question, knew that the same were part of the estate under
administration.
xxx xxx xxx
The subject properties therefore are under the jurisdiction of the probate court
which according to our settled jurisprudence has the authority to approve any
disposition regarding properties under administration. . . More emphatic is the
declaration We made in Estate of Olave vs. Reyes (123 SCRA 767) where We
stated that when 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.
Only recently, in Manotok Realty, Inc. vs. Court of Appeals (149 SCRA 174),
We held that the sale of an immovable property belonging to the estate of a
decedent, in a special proceedings, needs court approval. . . This
pronouncement finds support in the previous case of Dolores Vda. De Gil vs.
Agustin Cancio (14 SCRA 797) wherein We emphasized that it is within the
jurisdiction of a probate court to approve the sale of properties of a deceased
person by his prospective heirs before final adjudication. x x x
It being settled that property under administration needs the approval of the
probate court before it can be disposed of, any unauthorized disposition does
not bind the estate and is null and void. As early as 1921 in the case of Godoy
Page 34 of 77
vs. Orellano (42 Phil 347), We laid down the rule that a sale by an
administrator of property of the deceased, which is not authorized by the
probate court is null and void and title does not pass to the purchaser.
There is hardly any doubt that the probate court can declare null and void the
disposition of the property under administration, made by private respondent,
the same having been effected without authority from said court. It is the
probate court that has the power to authorize and/or approve the sale (Section
4 and 7, Rule 89), hence, a fortiori, it is said court that can declare it null and
void for as long as the proceedings had not been closed or terminated. To
uphold petitioner’s contention that the probate court cannot annul the
unauthorized sale, would render meaningless the power pertaining to the said
court. (Bonga vs. Soler, 2 SCRA 755). (emphasis ours)
Our jurisprudence is therefore clear that (1) any disposition of estate property
by an administrator or prospective heir pending final adjudication requires court
approval and (2) any unauthorized disposition of estate property can be
annulled by the probate court, there being no need for a separate action to
annul the unauthorized disposition.
The question now is: can the intestate or probate court execute its order
nullifying the invalid sale?
We see no reason why it cannot. The intestate court has the power to execute
its order with regard to the nullity of an unauthorized sale of estate property,
otherwise its power to annul the unauthorized or fraudulent disposition of
estate property would be meaningless. In other words, enforcement is a
necessary adjunct of the intestate or probate court’s power to annul
unauthorized or fraudulent transactions to prevent the dissipation of estate
property before final adjudication.
Moreover, in this case, the order of the intestate court nullifying the sale was
affirmed by the appellate courts (the Court of Appeals in CA-G.R. SP No.
46342 dated June 23, 1998 and subsequently by the Supreme Court in G.R.
No. 135177 dated October 9, 1998). The finality of the decision of the Supreme
Court was entered in the book of entry of judgments on February 23, 1999.
Considering the finality of the order of the intestate court nullifying the sale, as
affirmed by the appellate courts, it was correct for private respondent-Special
Administratrix Enderes to thereafter move for a writ of execution and for the
intestate court to grant it.
Petitioners Jose Lee, Alma Aggabao and FLAG, however, contend that the
probate court could not issue a writ of execution with regard to its order
nullifying the sale because said order was merely provisional:
The only authority given by law is for respondent judge to determine
provisionally whether said shares are included or excluded in the inventory… In
ordering the execution of the orders, respondent judge acted in excess of his
jurisdiction and grossly violated settled law and jurisprudence, i.e., that the
determination by a probate or intestate court of whether a property is included
or excluded in the inventory of the estate being provisional in nature, cannot be
the subject of execution.24 (emphasis ours)
Petitioners’ argument is misplaced. There is no question, based on the facts of
this case, that the Philinterlife shares of stock were part of the estate of Dr.
Juvencio Ortañez from the very start as in fact these shares were included in
the inventory of the properties of the estate submitted by Rafael Ortañez after
he and his brother, Jose Ortañez, were appointed special administrators by the
intestate court.25
The controversy here actually started when, during the pendency of the
settlement of the estate of Dr. Ortañez, his wife Juliana Ortañez sold the 1,014
Philinterlife shares of stock in favor petitioner FLAG without the approval of the
intestate court. Her son Jose Ortañez later sold the remaining 1,011
Philinterlife shares also in favor of FLAG without the approval of the intestate
court.
We are not dealing here with the issue of inclusion or exclusion of properties in
the inventory of the estate because there is no question that, from the very
start, the Philinterlife shares of stock were owned by the decedent, Dr.
Juvencio Ortañez. Rather, we are concerned here with the effect of the
sale made by the decedent’s heirs, Juliana Ortañez and Jose Ortañez,
without the required approval of the intestate court. This being so, the
contention of petitioners that the determination of the intestate court was
merely provisional and should have been threshed out in a separate
proceeding is incorrect.
The petitioners Jose Lee and Alma Aggabao next contend that the writ of
execution should not be executed against them because they were not notified,
nor they were aware, of the proceedings nullifying the sale of the shares of
stock.
We are not persuaded. The title of the purchaser like herein petitioner FLAG
can be struck down by the intestate court after a clear showing of the nullity of
the alienation. This is the logical consequence of our ruling in Godoy andin
several subsequent cases.26 The sale of any property of the estate by an
administrator or prospective heir without order of the probate or intestate
court is void and passes no title to the purchaser. Thus, in Juan Lao et al.
vs. Hon. Melencio Geneto, G.R. No. 56451, June 19, 1985, we ordered the
probate court to cancel the transfer certificate of title issued to the vendees at
Page 35 of 77
the instance of the administrator after finding that the sale of real property
under probate proceedings was made without the prior approval of the court.
The dispositive portion of our decision read:
IN VIEW OF THE FOREGOING CONSIDERATIONS, the assailed Order dated
February 18, 1981 of the respondent Judge approving the questioned
Amicable Settlement is declared NULL and VOID and hereby SET ASIDE.
Consequently, the sale in favor of Sotero Dioniosio III and by the latter to
William Go is likewise declared NULL and VOID. The Transfer Certificate of
Title issued to the latter is hereby ordered cancelled.
It goes without saying that the increase in Philinterlife’s authorized capital
stock, approved on the vote of petitioners’ non-existent shareholdings and
obviously calculated to make it difficult for Dr. Ortañez’s estate to reassume its
controlling interest in Philinterlife, was likewise void ab initio.
Petitioners next argue that they were denied due process.
We do not think so.
The facts show that petitioners, for reasons known only to them, did not appeal
the decision of the intestate court nullifying the sale of shares of stock in their
favor. Only the vendor, Jose Ortañez, appealed the case. A careful review of
the records shows that petitioners had actual knowledge of the estate
settlement proceedings and that they knew private respondent Enderes was
questioning therein the sale to them of the Philinterlife shares of stock.
It must be noted that private respondent-Special Administratrix Enderes filed
before the intestate court (RTC of Quezon City, Branch 85) a "Motion to
Declare Void Ab Initio Deeds of Sale of Philinterlife Shares of Stock" on March
22, 1996. But as early as 1994, petitioners already knew of the pending
settlement proceedings and that the shares they bought were under the
administration by the intestate court because private respondent Ma. Divina
Ortañez-Enderes and her mother Ligaya Novicio had filed a case against them
at the Securities and Exchange Commission on November 7, 1994, docketed
as SEC No. 11-94-4909, for annulment of transfer of shares of stock,
annulment of sale of corporate properties, annulment of subscriptions on
increased capital stocks, accounting, inspection of corporate books and
records and damages with prayer for a writ of preliminary injunction and/or
temporary restraining order.27 In said case, Enderes and her mother
questioned the sale of the aforesaid shares of stock to petitioners. The SEC
hearing officer in fact, in his resolution dated March 24, 1995, deferred to the
jurisdiction of the intestate court to rule on the validity of the sale of shares of
stock sold to petitioners by Jose Ortañez and Juliana Ortañez:
Petitioners also averred that. . . the Philinterlife shares of Dr. Juvencio Ortañez
who died, in 1980, are part of his estate which is presently the subject matter of
an intestate proceeding of the RTC of Quezon City, Branch 85. Although,
private respondents [Jose Lee et al.] presented the documents of partition
whereby the foregoing share of stocks were allegedly partitioned and conveyed
to Jose S. Ortañez who allegedly assigned the same to the other private
respondents, approval of the Court was not presented. Thus, the assignments
to the private respondents [Jose Lee et al.] of the subject shares of stocks are
void.
xxx xxx xxx
With respect to the alleged extrajudicial partition of the shares of stock owned
by the late Dr. Juvencio Ortañez, we rule that the matter properly belongs to
the jurisdiction of the regular court where the intestate proceedings are
currently pending.28
With this resolution of the SEC hearing officer dated as early as March 24,
1995 recognizing the jurisdiction of the intestate court to determine the validity
of the extrajudicial partition of the estate of Dr. Ortañez and the subsequent
sale by the heirs of the decedent of the Philinterlife shares of stock to
petitioners, how can petitioners claim that they were not aware of the intestate
proceedings?
Furthermore, when the resolution of the SEC hearing officer reached the
Supreme Court in 1996 (docketed as G.R. 128525), herein petitioners who
were respondents therein filed their answer which contained statements
showing that they knew of the pending intestate proceedings:
[T]he subject matter of the complaint is not within the jurisdiction of the SEC
but with the Regional Trial Court; Ligaya Novicio and children represented
themselves to be the common law wife and illegitimate children of the late
Ortañez; that on March 4, 1982, the surviving spouse Juliana Ortañez, on her
behalf and for her minor son Antonio, executed a Memorandum of Agreement
with her other sons Rafael and Jose, both surnamed Ortañez, dividing the
estate of the deceased composed of his one-half (1/2) share in the conjugal
properties; that in the said Memorandum of Agreement, Jose S. Ortañez
acquired as his share of the estate the 1,329 shares of stock in Philinterlife;
that on March 4, 1982, Juliana and Rafael assigned their respective shares of
stock in Philinterlife to Jose; that contrary to the contentions of petitioners,
private respondents Jose Lee, Carlos Lee, Benjamin Lee and Alma Aggabao
became stockholders of Philinterlife on March 23, 1983 when Jose S. Ortañez,
the principal stockholder at that time, executed a deed of sale of his shares of
stock to private respondents; and that the right of petitioners to question the
Page 36 of 77
Memorandum of Agreement and the acquisition of shares of stock of private
respondent is barred by prescription. 29
Also, private respondent-Special Administratrix Enderes offered additional
proof of actual knowledge of the settlement proceedings by petitioners which
petitioners never denied: (1) that petitioners were represented by Atty. Ricardo
Calimag previously hired by the mother of private respondent Enderes to
initiate cases against petitioners Jose Lee and Alma Aggabao for the
nullification of the sale of the shares of stock but said counsel made a
conflicting turn-around and appeared instead as counsel of petitioners, and (2)
that the deeds of sale executed between petitioners and the heirs of the
decedent (vendors Juliana Ortañez and Jose Ortañez) were acknowledged
before Atty. Ramon Carpio who, during the pendency of the settlement
proceedings, filed a motion for the approval of the sale of Philinterlife shares of
stock to the Knights of Columbus Fraternal Association, Inc. (which motion
was, however, later abandoned).30 All this sufficiently proves that petitioners,
through their counsels, knew of the pending settlement proceedings.
Finally, petitioners filed several criminal cases such as libel (Criminal Case No.
97-7179-81), grave coercion (Criminal Case No. 84624) and robbery (Criminal
Case No. Q-96-67919) against private respondent’s mother Ligaya Novicio
who was a director of Philinterlife,31 all of which criminal cases were related to
the questionable sale to petitioners of the Philinterlife shares of stock.
Considering these circumstances, we cannot accept petitioners’ claim of denial
of due process. The essence of due process is the reasonable opportunity to
be heard. Where the opportunity to be heard has been accorded, there is no
denial of due process.32 In this case, petitioners knew of the pending instestate
proceedings for the settlement of Dr. Juvencio Ortañez’s estate but for reasons
they alone knew, they never intervened. When the court declared the nullity of
the sale, they did not bother to appeal. And when they were notified of the
motion for execution of the Orders of the intestate court, they ignored the
same. Clearly, petitioners alone should bear the blame.
Petitioners next contend that we are bound by our ruling in G.R. No. 128525
entitled Ma. Divina Ortañez-Enderes vs. Court of Appeals, dated December 17,
1999, where we allegedly ruled that the intestate court "may not pass upon the
title to a certain property for the purpose of determining whether the same
should or should not be included in the inventory but such determination is not
conclusive and is subject to final decision in a separate action regarding
ownership which may be constituted by the parties."
We are not unaware of our decision in G.R. No. 128525. The issue therein was
whether the Court of Appeals erred in affirming the resolution of the SEC that
Enderes et al. were not entitled to the issuance of the writ of preliminary
injunction. We ruled that the Court of Appeals was correct in affirming the
resolution of the SEC denying the issuance of the writ of preliminary injunction
because injunction is not designed to protect contingent rights. Said case
did not rule on the issue of the validity of the sale of shares of stock belonging
to the decedent’s estate without court approval nor of the validity of the writ of
execution issued by the intestate court. G.R. No. 128525 clearly involved a
different issue and it does not therefore apply to the present case.
Petitioners and all parties claiming rights under them are hereby warned not to
further delay the execution of the Orders of the intestate court dated August 11
and August 29, 1997.
WHEREFORE, the petition is hereby DENIED. The decision of the Court of
Appeals in CA-G.R. S.P. No. 59736 dated July 26, 2000, dismissing
petitioners’ petition for certiorari and affirming the July 6, 2000 order of the trial
court which ordered the execution of its (trial court’s) August 11 and 29, 1997
orders, is hereby AFFIRMED.
G.R. No. 118671 January 29, 1996
THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ, Executor, petitioner,
vs.
THE COURT OF APPEALS (Former Special Sixth Division), MARIA PILAR
RUIZ-MONTES, MARIA CATHRYN RUIZ, CANDICE ALBERTINE RUIZ,
MARIA ANGELINE RUIZ and THE PRESIDING JUDGE OF THE REGIONAL
TRIAL COURT OF PASIG, respondents.
This petition for review on certiorari seeks to annul and set aside the decision
dated November 10, 1994 and the resolution dated January 5, 1995 of the
Court of Appeals in CA-G.R. SP No. 33045.
The facts show that on June 27, 1987, Hilario M. Ruiz1 executed a holographic
will naming as his heirs his only son, Edmond Ruiz, his adopted daughter,
private respondent Maria Pilar Ruiz Montes, and his three granddaughters,
private respondents Maria Cathryn, Candice Albertine and Maria Angeline, all
children of Edmond Ruiz. The testator bequeathed to his heirs substantial
cash, personal and real properties and named Edmond Ruiz executor of his
estate.2
On April 12, 1988, Hilario Ruiz died. Immediately thereafter, the cash
component of his estate was distributed among Edmond Ruiz and private
respondents in accordance with the decedent's will. For unbeknown reasons,
Edmond, the named executor, did not take any action for the probate of his
father's holographic will.
Page 37 of 77
On June 29, 1992, four years after the testator's death, it was private
respondent Maria Pilar Ruiz Montes who filed before the Regional Trial Court,
Branch 156, Pasig, a petition for the probate and approval of Hilario Ruiz's will
and for the issuance of letters testamentary to Edmond Ruiz, 3 Surprisingly,
Edmond opposed the petition on the ground that the will was executed under
undue influence.
On November 2, 1992, one of the properties of the estate — the house and lot
at No. 2 Oliva Street, Valle Verde IV, Pasig which the testator bequeathed to
Maria Cathryn, Candice Albertine and Maria Angeline4 — was leased out by
Edmond Ruiz to third persons.
On January 19, 1993, the probate court ordered Edmond to deposit with the
Branch Clerk of Court the rental deposit and payments totalling P540,000.00
representing the one-year lease of the Valle Verde property. In compliance, on
January 25, 1993, Edmond turned over the amount of P348,583.56,
representing the balance of the rent after deducting P191,416.14 for repair and
maintenance expenses on the estate.5
In March 1993, Edmond moved for the release of P50,000.00 to pay the real
estate taxes on the real properties of the estate. The probate court approved
the release of P7,722.00.6
On May 14, 1993, Edmond withdrew his opposition to the probate of the will.
Consequently, the probate court, on May 18, 1993, admitted the will to probate
and ordered the issuance of letters testamentary to Edmond conditioned upon
the filing of a bond in the amount of P50,000.00. The letters testamentary were
issued on June 23, 1993.
On July 28, 1993, petitioner Testate Estate of Hilario Ruiz, with Edmond Ruiz
as executor, filed an "Ex-Parte Motion for Release of Funds." It prayed for the
release of the rent payments deposited with the Branch Clerk of Court.
Respondent Montes opposed the motion and concurrently filed a "Motion for
Release of Funds to Certain Heirs" and "Motion for Issuance of Certificate of
Allowance of Probate Will." Montes prayed for the release of the said rent
payments to Maria Cathryn, Candice Albertine and Maria Angeline and for the
distribution of the testator's properties, specifically the Valle Verde property and
the Blue Ridge apartments, in accordance with the provisions of the
holographic will.
On August 26, 1993, the probate court denied petitioner's motion for release of
funds but granted respondent Montes' motion in view of petitioner's lack of
opposition. It thus ordered the release of the rent payments to the decedent's
three granddaughters. It further ordered the delivery of the titles to and
possession of the properties bequeathed to the three granddaughters and
respondent Montes upon the filing of a bond of P50,000.00.
Petitioner moved for reconsideration alleging that he actually filed his
opposition to respondent Montes's motion for release of rent payments which
opposition the court failed to consider. Petitioner likewise reiterated his
previous motion for release of funds.
On November 23, 1993, petitioner, through counsel, manifested that he was
withdrawing his motion for release of funds in view of the fact that the lease
contract over the Valle Verde property had been renewed for another year. 7
Despite petitioner's manifestation, the probate court, on December 22, 1993,
ordered the release of the funds to Edmond but only "such amount as may be
necessary to cover the expenses of administration and allowances for support"
of the testator's three granddaughters subject to collation and deductible from
their share in the inheritance. The court, however, held in abeyance the release
of the titles to respondent Montes and the three granddaughters until the lapse
of six months from the date of first publication of the notice to creditors.8 The
court stated thus:
xxx xxx xxx
After consideration of the arguments set forth thereon by the parties
the court resolves to allow Administrator Edmond M. Ruiz to take
possession of the rental payments deposited with the Clerk of Court,
Pasig Regional Trial Court, but only such amount as may
be necessary to cover the expenses of administration and allowances
for support of Maria Cathryn Veronique, Candice Albertine and Maria
Angeli, which are subject to collation and deductible from the share in
the inheritance of said heirs and insofar as they exceed the fruits or
rents pertaining to them.
As to the release of the titles bequeathed to petitioner Maria Pilar Ruiz-
Montes and the above-named heirs, the same is hereby reconsidered
and held in abeyance until the lapse of six (6) months from the date of
first publication of Notice to Creditors.
WHEREFORE, Administrator Edmond M. Ruiz is hereby ordered to
submit an accounting of the expenses necessary for administration
including provisions for the support Of Maria Cathryn Veronique Ruiz,
Candice Albertine Ruiz and Maria Angeli Ruiz before the amount
required can be withdrawn and cause the publication of the notice to
creditors with reasonable dispatch.9
Page 38 of 77
Petitioner assailed this order before the Court of Appeals. Finding no grave
abuse of discretion on the part of respondent judge, the appellate court
dismissed the petition and sustained the probate court's order in a decision
dated November 10, 199410 and a resolution dated January 5, 1995.11
Hence, this petition.
Petitioner claims that:
THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN AFFIRMING AND CONFIRMING THE
ORDER OF RESPONDENT REGIONAL TRIAL COURT OF PASIG,
BRANCH 156, DATED DECEMBER 22, 1993, WHICH WHEN GIVEN
DUE COURSE AND IS EFFECTED WOULD: (1) DISALLOW THE
EXECUTOR/ADMINISTRATOR OF THE ESTATE OF THE LATE
HILARIO M. RUIZ TO TAKE POSSESSION OF ALL THE REAL AND
PERSONAL PROPERTIES OF THE ESTATE; (2) GRANT SUPPORT,
DURING THE PENDENCY OF THE SETTLEMENT OF AN ESTATE,
TO CERTAIN PERSONS NOT ENTITLED THERETO; AND (3)
PREMATURELY PARTITION AND DISTRIBUTE THE ESTATE
PURSUANT TO THE PROVISIONS OF THE HOLOGRAPHIC WILL
EVEN BEFORE ITS INTRINSIC VALIDITY HAS BEEN DETERMINED,
AND DESPITE THE EXISTENCE OF UNPAID DEBTS AND
OBLIGATIONS OF THE ESTATE.12
The issue for resolution is whether the probate court, after admitting the will to
probate but before payment of the estate's debts and obligations, has the
authority: (1) to grant an allowance from the funds of the estate for the support
of the testator's grandchildren; (2) to order the release of the titles to certain
heirs; and (3) to grant possession of all properties of the estate to the executor
of the will.
On the matter of allowance, Section 3 of Rule 83 of the Revised Rules of Court
provides:
Sec. 3. Allowance to widow and family. — The widow and minor or
incapacitated children of a deceased person, during the settlement of
the estate, shall receive therefrom under the direction of the court,
such allowance as are provided by law.
Petitioner alleges that this provision only gives the widow and the minor or
incapacitated children of the deceased the right to receive allowances for
support during the settlement of estate proceedings. He contends that the
testator's three granddaughters do not qualify for an allowance because they
are not incapacitated and are no longer minors but of legal age, married and
gainfully employed. In addition, the provision expressly states "children" of the
deceased which excludes the latter's grandchildren.
It is settled that allowances for support under Section 3 of Rule 83 should not
be limited to the "minor or incapacitated" children of the deceased. Article
18813 of the Civil Code of the Philippines, the substantive law in force at the
time of the testator's death, provides that during the liquidation of the conjugal
partnership, the deceased's legitimate spouse and children, regardless of their
age, civil status or gainful employment, are entitled to provisional support from
the funds of the estate.14 The law is rooted on the fact that the right and duty to
support, especially the right to education, subsist even beyond the age of
majority.15
Be that as it may, grandchildren are not entitled to provisional support from the
funds of the decedent's estate. The law clearly limits the allowance to "widow
and children" and does not extend it to the deceased's grandchildren,
regardless of their minority or incapacity.16 It was error, therefore, for the
appellate court to sustain the probate court's order granting an allowance to the
grandchildren of the testator pending settlement of his estate.
Respondent courts also erred when they ordered the release of the titles of the
bequeathed properties to private respondents six months after the date of first
publication of notice to creditors. An order releasing titles to properties of the
estate amounts to an advance distribution of the estate which is allowed only
under the following conditions:
Sec. 2. Advance distribution in special proceedings. — estate tax is one of those obligations that must be paid before distribution of
Nothwithstanding a pending controversy or appeal in proceedings to
settle the estate of a decedent, the court may, in its discretion and
upon such terms as it may deem proper and just, permit that such part
of the estate as may not be affected by the controversy or appeal be
distributed among the heirs or legatees, upon compliance with the
conditions set forth in Rule 90 of these Rules.17
And Rule 90 provides that:
Sec. 1. When order for distribution of residue made. — When the
debts, funeral charges, and expenses of administration the allowance
to the widow, and inheritance tax if any, chargeable to the estate in
accordance with law, have been paid, the court, on the application of
the executor or administrator, or of a person interested in the estate,
and after hearing upon notice shall assign the residue of the estate to
the persons entitled to the same, naming them and the proportions or
parts, to which each is entitled, and such persons may demand and
Page 39 of 77
recover their respective shares from the executor or administrator, or
any other person having the same in his possession. If there is a
controversy before the court as to who are the lawful heirs of the
deceased person or as to the distributive shares to which each person
is entitled under the law, the controversy shall be heard and decided
as in ordinary cases.
No distribution shall be allowed until the payment of the obligations
above-mentioned has been made or provided for, unless the
distributees, or any of them, give a bond, in a sum to be fixed by the
court, conditioned for the payment of said obligations within such time
as the court directs.18
In settlement of estate proceedings, the distribution of the estate properties can
only be made: (1) after all the debts, funeral charges, expenses of
administration, allowance to the widow, and estate tax have been paid; or (2)
before payment of said obligations only if the distributees or any of them gives
a bond in a sum fixed by the court conditioned upon the payment of said
obligations within such time as the court directs, or when provision is made to
meet those obligations.19
In the case at bar, the probate court ordered the release of the titles to the
Valle Verde property and the Blue Ridge apartments to the private respondents
after the lapse of six months from the date of first publication of the notice to
creditors. The questioned order speaks of "notice" to creditors, not payment of
debts and obligations. Hilario Ruiz allegedly left no debts when he died but the
taxes on his estate had not hitherto been paid, much less ascertained. The
the estate. If not yet paid, the rule requires that the distributees post a bond or
make such provisions as to meet the said tax obligation in proportion to their
respective shares in the inheritance.20 Notably, at the time the order was issued
the properties of the estate had not yet been inventoried and appraised.
It was also too early in the day for the probate court to order the release of the
titles six months after admitting the will to probate. The probate of a will is
conclusive as to its due execution and extrinsic validity21 and settles only the
question of whether the testator, being of sound mind, freely executed it in
accordance with the formalities prescribed by law.22 Questions as to the
intrinsic validity and efficacy of the provisions of the will, the legality of any
devise or legacy may be raised even after the will has been authenticated. 23
The intrinsic validity of Hilario's holographic will was controverted by petitioner
before the probate court in his Reply to Montes' Opposition to his motion for
release of funds24 and his motion for reconsideration of the August 26, 1993
order of the said court.25 Therein, petitioner assailed the distributive shares of
the devisees and legatees inasmuch as his father's will included the estate of
his mother and allegedly impaired his legitime as an intestate heir of his
mother. The Rules provide that if there is a controversy as to who are the
lawful heirs of the decedent and their distributive shares in his estate, the
probate court shall proceed to hear and decide the same as in ordinary
cases.26
Still and all, petitioner cannot correctly claim that the assailed order deprived
him of his right to take possession of all the real and personal properties of the
estate. The right of an executor or administrator to the possession and
management of the real and personal properties of the deceased is not
absolute and can only be exercised "so long as it is necessary for the payment
of the debts and expenses of administration,"27 Section 3 of Rule 84 of the
Revised Rules of Court explicitly provides:
Sec. 3. Executor or administrator to retain whole estate to pay debts,
and to administer estate not willed. — An executor or administrator
shall have the right to the possession and management of the real as
well as the personal estate of the deceased so long as it is necessary
for the payment of the debts and expenses for administration.28
When petitioner moved for further release of the funds deposited with the clerk
of court, he had been previously granted by the probate court certain amounts
for repair and maintenance expenses on the properties of the estate, and
payment of the real estate taxes thereon. But petitioner moved again for the
release of additional funds for the same reasons he previously cited. It was
correct for the probate court to require him to submit an accounting of the
necessary expenses for administration before releasing any further money in
his favor.
It was relevantly noted by the probate court that petitioner had deposited with it
only a portion of the one-year rental income from the Valle Verde property.
Petitioner did not deposit its succeeding rents after renewal of the
lease.29Neither did he render an accounting of such funds.
Petitioner must be reminded that his right of ownership over the properties of
his father is merely inchoate as long as the estate has not been fully settled
and partitioned.30 As executor, he is a mere trustee of his father's estate. The
funds of the estate in his hands are trust funds and he is held to the duties and
responsibilities of a trustee of the highest order. 31 He cannot unilaterally assign
to himself and possess all his parents' properties and the fruits thereof without
first submitting an inventory and appraisal of all real and personal properties of
the deceased, rendering a true account of his administration, the expenses of
administration, the amount of the obligations and estate tax, all of which are
Page 40 of 77
subject to a determination by the court as to their veracity, propriety and
justness.32
IN VIEW WHEREOF, the decision and resolution of the Court of Appeals in
CA-G.R. SP No. 33045 affirming the order dated December 22, 1993 of the
Regional Trial Court, Branch 156, Pasig in SP Proc. No. 10259 are affirmed
with the modification that those portions of the order granting an allowance to
the testator's grandchildren and ordering the release of the titles to the private
respondents upon notice to creditors are annulled and set aside.
Respondent judge is ordered to proceed with dispatch in the proceedings
below.
G.R. No. 149926 February 23, 2005
UNION BANK OF THE PHILIPPINES, petitioner,
vs.
EDMUND SANTIBAÑEZ and FLORENCE SANTIBAÑEZ
ARIOLA, respondents.
Before us is a petition for review on certiorari under Rule 45 of the Revised
Rules of Court which seeks the reversal of the Decision1 of the Court of
Appeals dated May 30, 2001 in CA-G.R. CV No. 48831 affirming the
dismissal2 of the petitioner’s complaint in Civil Case No. 18909 by the Regional
Trial Court (RTC) of Makati City, Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim
M. Santibañez entered into a loan agreement3 in the amount of ₱128,000.00.
The amount was intended for the payment of the purchase price of one (1) unit
Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and
his son, Edmund, executed a promissory note in favor of the FCCC, the
principal sum payable in five equal annual amortizations of ₱43,745.96 due on
May 31, 1981 and every May 31st thereafter up to May 31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan
agreement,4 this time in the amount of ₱123,156.00. It was intended to pay the
balance of the purchase price of another unit of Ford 6600 Agricultural All-
Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor
Model AR 60K. Again, Efraim and his son, Edmund, executed a promissory
note for the said amount in favor of the FCCC. Aside from such promissory
note, they also signed a Continuing Guaranty Agreement 5 for the loan dated
December 13, 1980.
Sometime in February 1981, Efraim died, leaving a holographic
will.6 Subsequently in March 1981, testate proceedings commenced before the
RTC of Iloilo City, Branch 7, docketed as Special Proceedings No. 2706. On
April 9, 1981, Edmund, as one of the heirs, was appointed as the special
administrator of the estate of the decedent.7 During the pendency of the testate
proceedings, the surviving heirs, Edmund and his sister Florence Santibañez
Ariola, executed a Joint Agreement8 dated July 22, 1981, wherein they agreed
to divide between themselves and take possession of the three (3) tractors;
that is, two (2) tractors for Edmund and one (1) tractor for Florence. Each of
them was to assume the indebtedness of their late father to FCCC,
corresponding to the tractor respectively taken by them.
On August 20, 1981, a Deed of Assignment with Assumption of Liabilities 9 was
executed by and between FCCC and Union Savings and Mortgage Bank,
wherein the FCCC as the assignor, among others, assigned all its assets and
liabilities to Union Savings and Mortgage Bank.
Demand letters10 for the settlement of his account were sent by petitioner Union
Bank of the Philippines (UBP) to Edmund, but the latter failed to heed the same
and refused to pay. Thus, on February 5, 1988, the petitioner filed a
Complaint11 for sum of money against the heirs of Efraim Santibañez, Edmund
and Florence, before the RTC of Makati City, Branch 150, docketed as Civil
Case No. 18909. Summonses were issued against both, but the one intended
for Edmund was not served since he was in the United States and there was
no information on his address or the date of his return to the
Philippines.12 Accordingly, the complaint was narrowed down to respondent
Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola filed her Answer 13 and
alleged that the loan documents did not bind her since she was not a party
thereto. Considering that the joint agreement signed by her and her brother
Edmund was not approved by the probate court, it was null and void; hence,
she was not liable to the petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and re-raffled to the RTC of
Makati City, Branch 63.14 Consequently, trial on the merits ensued and a
decision was subsequently rendered by the court dismissing the complaint for
lack of merit. The decretal portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered DISMISSING the complaint for
lack of merit.15
The trial court found that the claim of the petitioner should have been filed with
the probate court before which the testate estate of the late Efraim Santibañez
was pending, as the sum of money being claimed was an obligation incurred
Page 41 of 77
by the said decedent. The trial court also found that the Joint Agreement
apparently executed by his heirs, Edmund and Florence, on July 22, 1981,
was, in effect, a partition of the estate of the decedent. However, the said
agreement was void, considering that it had not been approved by the probate
court, and that there can be no valid partition until after the will has been
probated. The trial court further declared that petitioner failed to prove that it
was the now defunct Union Savings and Mortgage Bank to which the FCCC
had assigned its assets and liabilities. The court also agreed to the contention
of respondent Florence S. Ariola that the list of assets and liabilities of the
FCCC assigned to Union Savings and Mortgage Bank did not clearly refer to
the decedent’s account. Ruling that the joint agreement executed by the heirs
was null and void, the trial court held that the petitioner’s cause of action
against respondent Florence S. Ariola must necessarily fail.
The petitioner appealed from the RTC decision and elevated its case to the
Court of Appeals (CA), assigning the following as errors of the trial court:
1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT
AGREEMENT (EXHIBIT A) SHOULD BE APPROVED BY THE
PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE
NO VALID PARTITION AMONG THE HEIRS UNTIL AFTER THE
WILL HAS BEEN PROBATED.
3. THE COURT A QUO ERRED IN NOT FINDING THAT THE
DEFENDANT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-
LITIGATED IN THE ESTATE PROCEEDING.16
The petitioner asserted before the CA that the obligation of the deceased had
passed to his legitimate children and heirs, in this case, Edmund and Florence;
the unconditional signing of the joint agreement marked as Exhibit "A"
estopped respondent Florence S. Ariola, and that she cannot deny her liability
under the said document; as the agreement had been signed by both heirs in
their personal capacity, it was no longer necessary to present the same before
the probate court for approval; the property partitioned in the agreement was
not one of those enumerated in the holographic will made by the deceased;
and the active participation of the heirs, particularly respondent Florence S.
Ariola, in the present ordinary civil action was tantamount to a waiver to re-
litigate the claim in the estate proceedings.
On the other hand, respondent Florence S. Ariola maintained that the money
claim of the petitioner should have been presented before the probate court.17
The appellate court found that the appeal was not meritorious and held that the
petitioner should have filed its claim with the probate court as provided under
Sections 1 and 5, Rule 86 of the Rules of Court. It further held that the partition
made in the agreement was null and void, since no valid partition may be had
until after the will has been probated. According to the CA, page 2, paragraph
(e) of the holographic will covered the subject properties (tractors) in generic
terms when the deceased referred to them as "all other properties." Moreover,
the active participation of respondent Florence S. Ariola in the case did not
amount to a waiver. Thus, the CA affirmed the RTC decision, viz.:
WHEREFORE, premises considered, the appealed Decision of the Regional
Trial Court of Makati City, Branch 63, is hereby AFFIRMED in toto.
SO ORDERED.18
In the present recourse, the petitioner ascribes the following errors to the CA:
I. THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE
JOINT AGREEMENT SHOULD BE APPROVED BY THE PROBATE COURT.
II. THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE
NO VALID PARTITION AMONG THE HEIRS OF THE LATE EFRAIM
SANTIBAÑEZ UNTIL AFTER THE WILL HAS BEEN PROBATED.
III. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE
RESPONDENT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-
LITIGATED IN THE ESTATE PROCEEDING.
IV. RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY
LIABLE WITH THE PRINCIPAL DEBTOR THE LATE EFRAIM SANTIBAÑEZ
ON THE STRENGTH OF THE CONTINUING GUARANTY AGREEMENT
EXECUTED IN FAVOR OF PETITIONER-APPELLANT UNION BANK.
V. THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF
₱128,000.00 AND DECEMBER 13, 1980 IN THE AMOUNT OF ₱123,000.00
CATEGORICALLY ESTABLISHED THE FACT THAT THE RESPONDENTS
BOUND THEMSELVES JOINTLY AND SEVERALLY LIABLE WITH THE LATE
DEBTOR EFRAIM SANTIBAÑEZ IN FAVOR OF PETITIONER UNION
BANK.19
The petitioner claims that the obligations of the deceased were transmitted to
the heirs as provided in Article 774 of the Civil Code; there was thus no need
for the probate court to approve the joint agreement where the heirs partitioned
the tractors owned by the deceased and assumed the obligations related
thereto. Since respondent Florence S. Ariola signed the joint agreement
Page 42 of 77
without any condition, she is now estopped from asserting any position
contrary thereto. The petitioner also points out that the holographic will of the
deceased did not include nor mention any of the tractors subject of the
complaint, and, as such was beyond the ambit of the said will. The active
participation and resistance of respondent Florence S. Ariola in the ordinary
civil action against the petitioner’s claim amounts to a waiver of the right to
have the claim presented in the probate proceedings, and to allow any one of
the heirs who executed the joint agreement to escape liability to pay the value
of the tractors under consideration would be equivalent to allowing the said
heirs to enrich themselves to the damage and prejudice of the petitioner.
The petitioner, likewise, avers that the decisions of both the trial and appellate
courts failed to consider the fact that respondent Florence S. Ariola and her
brother Edmund executed loan documents, all establishing the vinculum jurisor
the legal bond between the late Efraim Santibañez and his heirs to be in the
nature of a solidary obligation. Furthermore, the Promissory Notes dated May
31, 1980 and December 13, 1980 executed by the late Efraim Santibañez,
together with his heirs, Edmund and respondent Florence, made the obligation
solidary as far as the said heirs are concerned. The petitioner also proffers
that, considering the express provisions of the continuing guaranty agreement
and the promissory notes executed by the named respondents, the latter must
be held liable jointly and severally liable thereon. Thus, there was no need for
the petitioner to file its money claim before the probate court. Finally, the
petitioner stresses that both surviving heirs are being sued in their respective
personal capacities, not as heirs of the deceased.
In her comment to the petition, respondent Florence S. Ariola maintains that
the petitioner is trying to recover a sum of money from the deceased Efraim
Santibañez; thus the claim should have been filed with the probate court. She
points out that at the time of the execution of the joint agreement there was
already an existing probate proceedings of which the petitioner knew about.
However, to avoid a claim in the probate court which might delay payment of
the obligation, the petitioner opted to require them to execute the said
agreement.1a\^/phi1.net
According to the respondent, the trial court and the CA did not err in declaring
that the agreement was null and void. She asserts that even if the agreement
was voluntarily executed by her and her brother Edmund, it should still have
been subjected to the approval of the court as it may prejudice the estate, the
heirs or third parties. Furthermore, she had not waived any rights, as she even
stated in her answer in the court a quo that the claim should be filed with the
probate court. Thus, the petitioner could not invoke or claim that she is in
estoppel.
Respondent Florence S. Ariola further asserts that she had not signed any
continuing guaranty agreement, nor was there any document presented as
evidence to show that she had caused herself to be bound by the obligation of
her late father.
The petition is bereft of merit.
The Court is posed to resolve the following issues: a) whether or not the
partition in the Agreement executed by the heirs is valid; b) whether or not the
heirs’ assumption of the indebtedness of the deceased is valid; and c) whether
the petitioner can hold the heirs liable on the obligation of the
deceased.1awphi1.nét
At the outset, well-settled is the rule that a probate court has the jurisdiction to
determine all the properties of the deceased, to determine whether they should
or should not be included in the inventory or list of properties to be
administered.20 The said court is primarily concerned with the administration,
liquidation and distribution of the estate.21
In our jurisdiction, the rule is that there can be no valid partition among the
heirs until after the will has been probated:
In testate succession, there can be no valid partition among the heirs until after
the will has been probated. The law enjoins the probate of a will and the public
requires it, because unless a will is probated and notice thereof given to the
whole world, the right of a person to dispose of his property by will may be
rendered nugatory. The authentication of a will decides no other question than
such as touch upon the capacity of the testator and the compliance with those
requirements or solemnities which the law prescribes for the validity of a will. 22
This, of course, presupposes that the properties to be partitioned are the same
properties embraced in the will.23 In the present case, the deceased, Efraim
Santibañez, left a holographic will24 which contained, inter alia, the provision
which reads as follows:
(e) All other properties, real or personal, which I own and may be discovered
later after my demise, shall be distributed in the proportion indicated in the
immediately preceding paragraph in favor of Edmund and Florence, my
children.
We agree with the appellate court that the above-quoted is an all-
encompassing provision embracing all the properties left by the decedent
which might have escaped his mind at that time he was making his will, and
other properties he may acquire thereafter. Included therein are the three (3)
subject tractors. This being so, any partition involving the said tractors among
the heirs is not valid. The joint agreement25 executed by Edmund and Florence,
partitioning the tractors among themselves, is invalid, specially so since at the
Page 43 of 77
time of its execution, there was already a pending proceeding for the probate of
their late father’s holographic will covering the said tractors.
It must be stressed that the probate proceeding had already acquired
jurisdiction over all the properties of the deceased, including the three (3)
tractors. To dispose of them in any way without the probate court’s approval is
tantamount to divesting it with jurisdiction which the Court cannot allow. 26 Every
act intended to put an end to indivision among co-heirs and legatees or
devisees is deemed to be a partition, although it should purport to be a sale, an
exchange, a compromise, or any other transaction.27 Thus, in executing any
joint agreement which appears to be in the nature of an extra-judicial partition,
as in the case at bar, court approval is imperative, and the heirs cannot just
divest the court of its jurisdiction over that part of the estate. Moreover, it is
within the jurisdiction of the probate court to determine the identity of the heirs
of the decedent.28 In the instant case, there is no showing that the signatories
in the joint agreement were the only heirs of the decedent. When it was
executed, the probate of the will was still pending before the court and the
latter had yet to determine who the heirs of the decedent were. Thus, for
Edmund and respondent Florence S. Ariola to adjudicate unto themselves the
three (3) tractors was a premature act, and prejudicial to the other possible
heirs and creditors who may have a valid claim against the estate of the
deceased.
The question that now comes to fore is whether the heirs’ assumption of the
indebtedness of the decedent is binding. We rule in the negative. Perusing the
joint agreement, it provides that the heirs as parties thereto "have agreed to
divide between themselves and take possession and use the above-described
chattel and each of them to assume the indebtedness corresponding to the
chattel taken as herein after stated which is in favor of First Countryside Credit
Corp."29 The assumption of liability was conditioned upon the happening of an
event, that is, that each heir shall take possession and use of their respective
share under the agreement. It was made dependent on the validity of the
partition, and that they were to assume the indebtedness corresponding to the
chattel that they were each to receive. The partition being invalid as earlier
discussed, the heirs in effect did not receive any such tractor. It follows then
that the assumption of liability cannot be given any force and effect.
The Court notes that the loan was contracted by the decedent.l^vvphi1.net The
petitioner, purportedly a creditor of the late Efraim Santibañez, should have
thus filed its money claim with the probate court in accordance with Section 5,
Rule 86 of the Revised Rules of Court, which provides:
Section 5. Claims which must be filed under the notice. If not filed barred;
exceptions. — All claims for money against the decedent, arising from contract,
express or implied, whether the same be due, not due, or contingent, all claims
for funeral expenses for the last sickness of the decedent, and judgment for
money against the decedent, must be filed within the time limited in the notice;
otherwise they are barred forever, except that they may be set forth as
counterclaims in any action that the executor or administrator may bring
against the claimants. Where an executor or administrator commences an
action, or prosecutes an action already commenced by the deceased in his
lifetime, the debtor may set forth by answer the claims he has against the
decedent, instead of presenting them independently to the court as herein
provided, and mutual claims may be set off against each other in such action;
and if final judgment is rendered in favor of the defendant, the amount so
determined shall be considered the true balance against the estate, as though
the claim had been presented directly before the court in the administration
proceedings. Claims not yet due, or contingent, may be approved at their
present value.
The filing of a money claim against the decedent’s estate in the probate court is
mandatory.30 As we held in the vintage case of Py Eng Chong v. Herrera:31
… This requirement is for the purpose of protecting the estate of the deceased
by informing the executor or administrator of the claims against it, thus
enabling him to examine each claim and to determine whether it is a proper
one which should be allowed. The plain and obvious design of the rule is the
speedy settlement of the affairs of the deceased and the early delivery of the
property to the distributees, legatees, or heirs. `The law strictly requires the
prompt presentation and disposition of the claims against the decedent's estate
in order to settle the affairs of the estate as soon as possible, pay off its debts
and distribute the residue.32
Perusing the records of the case, nothing therein could hold private respondent
Florence S. Ariola accountable for any liability incurred by her late father. The
documentary evidence presented, particularly the promissory notes and the
continuing guaranty agreement, were executed and signed only by the late
Efraim Santibañez and his son Edmund. As the petitioner failed to file its
money claim with the probate court, at most, it may only go after Edmund as
co-maker of the decedent under the said promissory notes and continuing
guaranty, of course, subject to any defenses Edmund may have as against the
petitioner. As the court had not acquired jurisdiction over the person of
Edmund, we find it unnecessary to delve into the matter further.
We agree with the finding of the trial court that the petitioner had not sufficiently
shown that it is the successor-in-interest of the Union Savings and Mortgage
Bank to which the FCCC assigned its assets and liabilities. 33 The petitioner in
its complaint alleged that "by virtue of the Deed of Assignment dated August
20, 1981 executed by and between First Countryside Credit Corporation and
Union Bank of the Philippines…"34 However, the documentary
35
evidence clearly reflects that the parties in the deed of assignment with
assumption of liabilities were the FCCC, and the Union Savings and Mortgage
Page 44 of 77
Bank, with the conformity of Bancom Philippine Holdings, Inc. Nowhere can the
petitioner’s participation therein as a party be found. Furthermore, no
documentary or testimonial evidence was presented during trial to show that
Union Savings and Mortgage Bank is now, in fact, petitioner Union Bank of the
Philippines. As the trial court declared in its decision:
… [T]he court also finds merit to the contention of defendant that plaintiff failed
to prove or did not present evidence to prove that Union Savings and Mortgage
Bank is now the Union Bank of the Philippines. Judicial notice does not apply
here. "The power to take judicial notice is to [be] exercised by the courts with
caution; care must be taken that the requisite notoriety exists; and every
reasonable doubt upon the subject should be promptly resolved in the
negative." (Republic vs. Court of Appeals, 107 SCRA 504).36
This being the case, the petitioner’s personality to file the complaint is wanting.
Consequently, it failed to establish its cause of action. Thus, the trial court did
not err in dismissing the complaint, and the CA in affirming the same.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The
assailed Court of Appeals Decision is AFFIRMED. No costs.
G.R. No. 189121 July 31, 2013
AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFER
QUIAZON, Petitioners,
vs.
MA. LOURDES BELEN, for and in behalf of MARIA LOURDES ELISE
QUIAZON, Respondent.
This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the
Revised Rules of Court, primarily assailing the 28 November 2008 Decision
rendered by the Ninth Division of the Court of Appeals in CA-G.R. CV No.
88589,1the decretal portion of which states:
WHEREFORE, premises considered, the appeal is hereby DENIED. The
assailed Decision dated March 11, 2005, and the Order dated March 24, 2006
of the Regional Trial Court, Branch 275, Las Piñas City are AFFIRMED in toto. 2
The Facts
This case started as a Petition for Letters of Administration of the Estate of
Eliseo Quiazon (Eliseo), filed by herein respondents who are Eliseo’s common-
law wife and daughter. The petition was opposed by herein petitioners Amelia
Garcia-Quaizon (Amelia) to whom Eliseo was married. Amelia was joined by
her children, Jenneth Quiazon (Jenneth) and Maria Jennifer Quiazon
(Jennifer).
Eliseo died intestate on 12 December 1992.
On 12 September 1994, Maria Lourdes Elise Quiazon (Elise), represented by
her mother, Ma. Lourdes Belen (Lourdes), filed a Petition for Letters of
Administration before the Regional Trial Court (RTC) of Las Piñas City. 3 In her
Petition docketed as SP Proc. No. M-3957, Elise claims that she is the natural
child of Eliseo having been conceived and born at the time when her parents
were both capacitated to marry each other. Insisting on the legal capacity of
Eliseo and Lourdes to marry, Elise impugned the validity of Eliseo’s marriage to
Amelia by claiming that it was bigamous for having been contracted during the
subsistence of the latter’s marriage with one Filipito Sandico (Filipito). To prove
her filiation to the decedent, Elise, among others, attached to the Petition for
Letters of Administration her Certificate of Live Birth4 signed by Eliseo as her
father. In the same petition, it was alleged that Eliseo left real properties worth
₱2,040,000.00 and personal properties worth ₱2,100,000.00. In order to
preserve the estate of Eliseo and to prevent the dissipation of its value, Elise
sought her appointment as administratrix of her late father’s estate.
Claiming that the venue of the petition was improperly laid, Amelia, together
with her children, Jenneth and Jennifer, opposed the issuance of the letters of
administration by filing an Opposition/Motion to Dismiss. 5 The petitioners
asserted that as shown by his Death Certificate, 6 Eliseo was a resident of
Capas, Tarlac and not of Las Piñas City, at the time of his death. Pursuant to
Section 1, Rule 73 of the Revised Rules of Court, 7 the petition for settlement of
decedent’s estate should have been filed in Capas, Tarlac and not in Las Piñas
City. In addition to their claim of improper venue, the petitioners averred that
there are no factual and legal bases for Elise to be appointed administratix of
Eliseo’s estate.
In a Decision8 dated 11 March 2005, the RTC directed the issuance of Letters
of Administration to Elise upon posting the necessary bond. The lower court
ruled that the venue of the petition was properly laid in Las Piñas City, thereby
discrediting the position taken by the petitioners that Eliseo’s last residence
was in Capas, Tarlac, as hearsay. The dispositive of the RTC decision reads:
Having attained legal age at this time and there being no showing of any
disqualification or incompetence to serve as administrator, let letters of
administration over the estate of the decedent Eliseo Quiazon, therefore, be
issued to petitioner, Ma. Lourdes Elise Quiazon, after the approval by this
Court of a bond in the amount of ₱100,000.00 to be posted by her.9
Page 45 of 77
On appeal, the decision of the trial court was affirmed in toto in the 28
November 2008 Decision10 rendered by the Court of Appeals in CA-G.R.CV
No. 88589. In validating the findings of the RTC, the Court of Appeals held that
Elise was able to prove that Eliseo and Lourdes lived together as husband and
wife by establishing a common residence at No. 26 Everlasting Road, Phase 5,
Pilar Village, Las Piñas City, from 1975 up to the time of Eliseo’s death in 1992.
For purposes of fixing the venue of the settlement of Eliseo’s estate, the Court
of Appeals upheld the conclusion reached by the RTC that the decedent was a
resident of Las Piñas City. The petitioners’ Motion for Reconsideration was
denied by the Court of Appeals in its Resolution11 dated 7 August 2009.
The Issues
The petitioners now urge Us to reverse the assailed Court of Appeals Decision
and Resolution on the following grounds:
I. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING
THAT ELISEO QUIAZON WAS A RESIDENT OF LAS PIÑAS AND
THEREFORE, THE PETITION FOR LETTERS OF ADMINISTRATION
WAS PROPERLY FILED WITH THE RTC OF LAS PIÑAS;
II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING
THAT AMELIA GARCIA-QUIAZON WAS NOT LEGALLY MARRIED
TO ELISEO QUIAZON DUE TO PREEXISTING MARRIAGE; AND
III. THE COURT OF APPEALS OVERLOOKED THE FACT THAT
ELISE QUIAZON HAS NOT SHOWN ANY INTEREST IN THE
PETITION FOR LETTERS OF ADMINISTRATION.12
The Court’s Ruling
We find the petition bereft of merit.
Under Section 1, Rule 73 of the Rules of Court, the petition for letters of
administration of the estate of a decedent should be filed in the RTC of the
province where the decedent resides at the time of his death:
Sec. 1. Where estate of deceased persons settled. – If the decedent is an
inhabitant of the Philippines at the time of his death, whether a citizen or an
alien, his will shall be proved, or letters of administration granted, and his
estate settled, in the Court of First Instance now Regional Trial Court in the
province in which he resides at the time of his death, and if he is an inhabitant
of a foreign country, the Court of First Instance now Regional Trial Court of any
province in which he had estate. The court first taking cognizance of the
settlement of the estate of a decedent, shall exercise jurisdiction to the
exclusion of all other courts. The jurisdiction assumed by a court, so far as it
depends on the place of residence of the decedent, or of the location of his
estate, shall not be contested in a suit or proceeding, except in an appeal from
that court, in the original case, or when the want of jurisdiction appears on the
record. (Emphasis supplied).
The term "resides" connotes ex vi termini "actual residence" as distinguished
from "legal residence or domicile." This term "resides," like the terms "residing"
and "residence," is elastic and should be interpreted in the light of the object or
purpose of the statute or rule in which it is employed. In the application of
venue statutes and rules – Section 1, Rule 73 of the Revised Rules of Court is
of such nature – residence rather than domicile is the significant factor. 13 Even
where the statute uses word "domicile" still it is construed as meaning
residence and not domicile in the technical sense.14 Some cases make a
distinction between the terms "residence" and "domicile" but as generally used
in statutes fixing venue, the terms are synonymous, and convey the same
meaning as the term "inhabitant."15 In other words, "resides" should be viewed
or understood in its popular sense, meaning, the personal, actual or physical
habitation of a person, actual residence or place of abode.16 It signifies physical
presence in a place and actual stay thereat.17 Venue for ordinary civil actions
and that for special proceedings have one and the same meaning. 18 As thus
defined, "residence," in the context of venue provisions, means nothing more
than a person’s actual residence or place of abode, provided he resides therein
with continuity and consistency.19
Viewed in light of the foregoing principles, the Court of Appeals cannot be
faulted for affirming the ruling of the RTC that the venue for the settlement of
the estate of Eliseo was properly laid in Las Piñas City. It is evident from the
records that during his lifetime, Eliseo resided at No. 26 Everlasting Road,
Phase 5, Pilar Village, Las Piñas City. For this reason, the venue for the
settlement of his estate may be laid in the said city.
In opposing the issuance of letters of administration, the petitioners harp on the
entry in Eliseo’s Death Certificate that he is a resident of Capas, Tarlac where
they insist his estate should be settled. While the recitals in death certificates
can be considered proofs of a decedent’s residence at the time of his death,
the contents thereof, however, is not binding on the courts. Both the RTC and
the Court of Appeals found that Eliseo had been living with Lourdes, deporting
themselves as husband and wife, from 1972 up to the time of his death in
1995. This finding is consistent with the fact that in 1985, Eliseo filed an action
for judicial partition of properties against Amelia before the RTC of Quezon
City, Branch 106, on the ground that their marriage is void for being
bigamous.20 That Eliseo went to the extent of taking his marital feud with
Amelia before the courts of law renders untenable petitioners’ position that
Eliseo spent the final days of his life in Tarlac with Amelia and her children. It
disproves rather than supports petitioners’ submission that the lower courts’
Page 46 of 77
findings arose from an erroneous appreciation of the evidence on record.
Factual findings of the trial court, when affirmed by the appellate court, must be
held to be conclusive and binding upon this Court.21
Likewise unmeritorious is petitioners’ contention that the Court of Appeals
erred in declaring Amelia’s marriage to Eliseo as void ab initio. In a void
marriage, it was though no marriage has taken place, thus, it cannot be the
source of rights. Any interested party may attack the marriage directly or
collaterally. A void marriage can be questioned even beyond the lifetime of the
parties to the marriage.22 It must be pointed out that at the time of the
celebration of the marriage of Eliseo and Amelia, the law in effect was the Civil
Code, and not the Family Code, making the ruling in Niñal v.
Bayadog23 applicable four-square to the case at hand. In Niñal, the Court, in no
uncertain terms, allowed therein petitioners to file a petition for the declaration
of nullity of their father’s marriage to therein respondent after the death of their
father, by contradistinguishing void from voidable marriages, to wit:
Consequently, void marriages can be questioned even after the death of either
party but voidable marriages can be assailed only during the lifetime of the
parties and not after death of either, in which case the parties and their
offspring will be left as if the marriage had been perfectly valid. That is why the
action or defense for nullity is imprescriptible, unlike voidable marriages where
the action prescribes. Only the parties to a voidable marriage can assail it but
any proper interested party may attack a void marriage.24
It was emphasized in Niñal that in a void marriage, no marriage has taken
place and it cannot be the source of rights, such that any interested party may
attack the marriage directly or collaterally without prescription, which may be
filed even beyond the lifetime of the parties to the marriage. 25
Relevant to the foregoing, there is no doubt that Elise, whose successional
rights would be prejudiced by her father’s marriage to Amelia, may impugn the
existence of such marriage even after the death of her father. The said
marriage may be questioned directly by filing an action attacking the validity
thereof, or collaterally by raising it as an issue in a proceeding for the
settlement of the estate of the deceased spouse, such as in the case at bar.
Ineluctably, Elise, as a compulsory heir,26 has a cause of action for the
declaration of the absolute nullity of the void marriage of Eliseo and Amelia,
and the death of either party to the said marriage does not extinguish such
cause of action.
Having established the right of Elise to impugn Eliseo’s marriage to Amelia, we
now proceed to determine whether or not the decedent’s marriage to Amelia is
void for being bigamous.
Contrary to the position taken by the petitioners, the existence of a previous
marriage between Amelia and Filipito was sufficiently established by no less
than the Certificate of Marriage issued by the Diocese of Tarlac and signed by
the officiating priest of the Parish of San Nicolas de Tolentino in Capas, Tarlac.
The said marriage certificate is a competent evidence of marriage and the
certification from the National Archive that no information relative to the said
marriage exists does not diminish the probative value of the entries therein. We
take judicial notice of the fact that the first marriage was celebrated more than
50 years ago, thus, the possibility that a record of marriage can no longer be
found in the National Archive, given the interval of time, is not completely
remote. Consequently, in the absence of any showing that such marriage had
been dissolved at the time Amelia and Eliseo’s marriage was solemnized, the
inescapable conclusion is that the latter marriage is bigamous and, therefore,
void ab initio.27
Neither are we inclined to lend credence to the petitioners’ contention that Elise
has not shown any interest in the Petition for Letters of Administration.
Section 6, Rule 78 of the Revised Rules of Court lays down the preferred
persons who are entitled to the issuance of letters of administration, thus:
Sec. 6. When and to whom letters of administration granted. — If no executor
is named in the will, or the executor or executors are incompetent, refuse the
trust, or fail to give bond, or a person dies intestate, administration shall be
granted:
(a) To the surviving husband or wife, as the case may be, or next of
kin, or both, in the discretion of the court, or to such person as such
surviving husband or wife, or next of kin, requests to have appointed, if
competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of
kin, or the person selected by them, be incompetent or unwilling, or if
the husband or widow, or next of kin, neglects for thirty (30) days after
the death of the person to apply for administration or to request that
administration be granted to some other person, it may be granted to
one or more of the principal creditors, if competent and willing to serve;
(c) If there is no such creditor competent and willing to serve, it may be
granted to such other person as the court may select.
Upon the other hand, Section 2 of Rule 79 provides that a petition for Letters of
Administration must be filed by an interested person, thus:
Page 47 of 77
Sec. 2. Contents of petition for letters of administration. — A petition for letters
of administration must be filed by an interested person and must show, so far
as known to the petitioner:
(a) The jurisdictional facts;
(b) The names, ages, and residences of the heirs, and the names and
residences of the creditors, of the decedent;
(c) The probable value and character of the property of the estate;
(d) The name of the person for whom letters of administration are
prayed.
But no defect in the petition shall render void the issuance of letters of
administration.
An "interested party," in estate proceedings, is one who would be benefited in
the estate, such as an heir, or one who has a claim against the estate, such as
a creditor. Also, in estate proceedings, the phrase "next of kin" refers to those
whose relationship with the decedent Is such that they are entitled to share in
the estate as distributees.28
In the instant case, Elise, as a compulsory heir who stands to be benefited by
the distribution of Eliseo’s estate, is deemed to be an interested party. With the
overwhelming evidence on record produced by Elise to prove her filiation to
Eliseo, the petitioners’ pounding on her lack of interest in the administration of
the decedent’s estate, is just a desperate attempt to sway this Court to reverse
the findings of the Court of Appeals. Certainly, the right of Elise to be appointed
administratix of the estate of Eliseo is on good grounds. It is founded on her
right as a compulsory heir, who, under the law, is entitled to her legitimate after
the debts of the estate are satisfied.29 Having a vested right in the distribution
of Eliseo’s estate as one of his natural children, Elise can rightfully be
considered as an interested party within the purview of the law.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
Accordingly, the Court of Appeals assailed 28 November 2008 Decision and 7
August 2009 Resolution, arc AFFIRMED in toto.
G.R. No. 150175 February 5, 2007
ERLINDA PILAPIL and HEIRS OF DONATA ORTIZ BRIONES, namely:
ESTELA, ERIBERTO AND VIRGILIO SANTOS, ANA SANTOS CULTURA,
ELVIRA SANTOS INOCENTES, ERNESTO MENDOZA, RIZALINA SANTOS,
ADOLFO MENDOZA and PACITA MENDOZA, Petitioners,
vs.
HEIRS OF MAXIMINO R. BRIONES, namely: SILVERIO S. BRIONES,
PETRA BRIONES, BONIFACIO CABAHUG, JR., ANITA TRASMONTE,
CIRILITA FORTUNA, CRESENCIA BRIONES, FUGURACION MEDALLE
and MERCEDES LAGBAS, Respondents.
On 10 March 2006, this Court promulgated its Decision1 in the above-entitled
case, ruling in favor of the petitioners. The dispositive portion 2 reads as follows:
IN VIEW OF THE FOREGOING, the assailed Decision of the Court of Appeals
in CA-GR CV No. 55194, dated 31 August 2001, affirming the Decision of the
Cebu City RTC in Civil Case No. CEB-5794, dated 28 September 1986, is
hereby REVERSED and SET ASIDE; and the Complaint for partition,
annulment, and recovery of possession filed by the heirs of Maximino in Civil
Case No. CEB-5794 is hereby DISMISSED.
On 10 May 2006, a Motion for Reconsideration3 of the foregoing Decision was
filed by Atty. Celso C. Reales of the Reales Law Office on behalf of the
respondents, heirs of Maximino R. Briones. On 19 May 2006, petitioners
Erlinda Pilapil and the other co-heirs of Donata Ortiz Vda. de Briones, through
counsel, filed an Opposition to Respondents’ Motion for Reconsideration,4 to
which the respondents filed a Rejoinder5 on 23 May 2006. Thereafter, Atty.
Amador F. Brioso, Jr. of the Canto Brioso Arnedo Law Office entered his
appearance as collaborating counsel for the respondents. 6 Atty. Brioso then
filed on 11 June 2006 and 16 June 2006, respectively, a Reply7 and
Supplemental Reply8 to the petitioners’ Opposition to respondents’ Motion for
Reconsideration. Finally, petitioners filed a Rejoinder 9 to the respondents’
Reply and Supplemental Reply on 5 July 2006.
The facts of the case, as recounted in the Decision,10 are as follows –
Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting
of her surviving sister, Rizalina Ortiz-Aguila (Rizalina); Rizalina’s daughter,
Erlinda Pilapil (Erlinda); and the other nephews and nieces of Donata, in
representation of her two other sisters who had also passed away.
Respondents, on the other hand, are the heirs of the late Maximino Briones
(Maximino), composed of his nephews and nieces, and grandnephews and
grandnieces, in representation of the deceased siblings of Maximino.
xxxx
Maximino was married to Donata but their union did not produce any children.
When Maximino died on 1 May 1952, Donata instituted intestate proceedings
to settle her husband’s estate with the Cebu City Court of First Instance (CFI),
Page 48 of 77
14th Judicial District, designated as Special Proceedings No. 928-R. On 8 July
1952, the CFI issued Letters of Administration appointing Donata as the
administratrix of Maximino’s estate. She submitted an Inventory of Maximino’s
properties, which included, among other things, the following parcels of land x
x x.
xxxx
The CFI would subsequently issue an Order, dated 2 October 1952, awarding
ownership of the aforementioned real properties to Donata. On 27 June 1960,
Donata had the said CFI Order recorded in the Primary Entry Book of the
Register of Deeds, and by virtue thereof, received new TCTs, covering the said
properties, now in her name.
Donata died on 1 November 1977. Erlinda, one of Donata’s nieces, instituted
with the RTC a petition for the administration of the intestate estate of Donata.
Erlinda and her husband, Gregorio, were appointed by the RTC as
administrators of Donata’s intestate estate. Controversy arose among Donata’s
heirs when Erlinda claimed exclusive ownership of three parcels of land,
covered by TCTs No. 21542, 21545, and 58684, based on two Deeds of
Donation, both dated 15 September 1977, allegedly executed in her favor by
her aunt Donata. The other heirs of Donata opposed Erlinda’s claim. This
Court, however, was no longer informed of the subsequent development in the
intestate proceedings of the estate of Donata; and as far as this Petition is
concerned, all the heirs of Donata, including Erlinda, appear to be on the same
side.
On 21 January 1985, Silverio Briones (Silverio), a nephew of Maximino, filed a
Petition with the RTC for Letters of Administration for the intestate estate of
Maximino, which was initially granted by the RTC. The RTC also issued an
Order, dated 5 December 1985, allowing Silverio to collect rentals from
Maximino’s properties. But then, Gregorio filed with the RTC a Motion to Set
Aside the Order, dated 5 December 1985, claiming that the said properties
were already under his and his wife’s administration as part of the intestate
estate of Donata. Silverio’s Letters of Administration for the intestate estate of
Maximino was subsequently set aside by the RTC.
On 3 March 1987, the heirs of Maximino filed a Complaint with the RTC against
the heirs of Donata for the partition, annulment, and recovery of possession of
real property, docketed as Civil Case No. CEB-5794. They later filed an
Amended Complaint, on 11 December 1992. They alleged that Donata, as
administratrix of the estate of Maximino, through fraud and misrepresentation,
in breach of trust, and without the knowledge of the other heirs, succeeded in
registering in her name the real properties belonging to the intestate estate of
Maximino.
xxxx
After trial in due course, the RTC rendered its Decision, dated 8 April 1986, in
favor of the heirs of Maximino x x x.
xxxx
x x x[T]he RTC declared that the heirs of Maximino were entitled to ½ of the
real properties covered by TCTs No. 21542, 21543, 21544, 21545, 21546, and
58684. It also ordered Erlinda to reconvey to the heirs of Maximino the said
properties and to render an accounting of the fruits thereof.
The heirs of Donata appealed the RTC Decision, dated 8 April 1986, to the
Court of Appeals. The Court of Appeals, in its Decision, promulgated on 31
August 2001, affirmed the RTC Decision, x x x.
xxxx
Unsatisfied with the afore-quoted Decision of the Court of Appeals, the heirs of
Donata filed the present Petition, x x x.
In its Decision, dated 10 March 2006, this Court found the Petition meritorious
and, reversing the Decisions of the Court of Appeals and the Regional Trial
Court (RTC), dismissed the Complaint for partition, annulment, and recovery of
possession of real property filed by the heirs of Maximino in Civil Case No.
CEB-5794. This Court summed up its findings,11 thus –
In summary, the heirs of Maximino failed to prove by clear and convincing
evidence that Donata managed, through fraud, to have the real properties,
belonging to the intestate estate of Maximino, registered in her name. In the
absence of fraud, no implied trust was established between Donata and the
heirs of Maximino under Article 1456 of the New Civil Code. Donata was able
to register the real properties in her name, not through fraud or mistake, but
pursuant to an Order, dated 2 October 1952, issued by the CFI in Special
Proceedings No. 928-R. The CFI Order, presumed to be fairly and regularly
issued, declared Donata as the sole, absolute, and exclusive heir of Maximino;
hence, making Donata the singular owner of the entire estate of Maximino,
including the real properties, and not merely a co-owner with the other heirs of
her deceased husband. There being no basis for the Complaint of the heirs of
Maximino in Civil Case No. CEB-5794, the same should have been dismissed.
Respondents move for the reconsideration of the Decision of this Court raising
still the arguments that Donata committed fraud in securing the Court of First
Instance Order, dated 2 October 1952, which declared her as the sole heir of
her deceased husband Maximino and authorized her to have Maximino’s
Page 49 of 77
properties registered exclusively in her name; that respondents’ right to
succession to the disputed properties was transmitted or vested from the
moment of Maximino’s death and which they could no longer be deprived of;
that Donata merely possessed and held the properties in trust for her co-
heirs/owners; and that, by virtue of this Court’s ruling in Quion v. Claridad 12and
Sevilla, et al. v. De Los Angeles,13 respondents’ action to recover title to and
possession of their shares in Maximino’s estate, held in trust for their benefit by
Donata, and eventually, by petitioners as the latter’s successors-in-interest, is
imprescriptible. Respondents also advance a fresh contention that the CFI
Order, dated 2 October 1952, being based on the fraudulent misrepresentation
of Donata that she was Maximino’s sole heir, was a void order, which produced
no legal effect. Lastly, respondents asseverate that, by relying on certain
procedural presumptions in its Decision, dated 10 March 2006, this Court has
sacrificed their substantive right to succession, thus, making justice
"subservient to the dictates of mere procedural fiats."14
While this Court is persuaded to reexamine and clarify some points in its
previous Decision in this case, it does not find any new evidence or argument
that would adequately justify a change in its previous position.
On the finding of fraud
As this Court declared in its Decision, the existence of any trust relations
between petitioners and respondents shall be examined in the light of Article
1456 of the New Civil Code, which provides that, "[i]f property is acquired
through mistake or fraud, the person obtaining it is, by force of law, considered
a trustee of an implied trust for the benefit of the person from whom the
property comes." Hence, the foremost question to be answered is still whether
an implied trust under Article 1456 of the New Civil Code had been sufficiently
established in the present case.
In the Decision, this Court ruled in the negative, since there was insufficient
evidence to establish that Donata committed fraud. It should be remembered
that Donata was able to secure certificates of title to the disputed properties by
virtue of the CFI Order in Special Proceedings No. 928-R (the proceedings she
instituted to settle Maximino’s intestate estate), which declared her as
Maximino’s sole heir. In the absence of proof to the contrary, the Court
accorded to Special Proceedings No. 928-R the presumptions of regularity and
validity. Reproduced below are the relevant portions 15 of the Decision –
At the onset, it should be emphasized that Donata was able to secure the
TCTs covering the real properties belonging to the estate of Maximino by virtue
of a CFI Order, dated 2 October 1952. It is undisputed that the said CFI Order
was issued by the CFI in Special Proceedings No. 928-R, instituted by Donata
herself, to settle the intestate estate of Maximino. The petitioners, heirs of
Donata, were unable to present a copy of the CFI Order, but this is not
surprising considering that it was issued 35 years prior to the filing by the heirs
of Maximino of their Complaint in Civil Case No. CEB-5794 on 3 March 1987.
The existence of such CFI Order, nonetheless, cannot be denied. It was
recorded in the Primary Entry Book of the Register of Deeds on 27 June 1960,
at 1:10 p.m., as Entry No. 1714. It was annotated on the TCTs covering the
real properties as having declared Donata the sole, absolute, and exclusive
heir of Maximino. The non-presentation of the actual CFI Order was not fatal to
the cause of the heirs of Donata considering that its authenticity and contents
were never questioned. The allegation of fraud by the heirs of Maximino did not
pertain to the CFI Order, but to the manner or procedure by which it was issued
in favor of Donata. Moreover, the non-presentation of the CFI Order, contrary
to the declaration by the RTC, does not amount to a willful suppression of
evidence that would give rise to the presumption that it would be adverse to the
heirs of Donata if produced. x x x.
xxxx
The CFI Order, dated 2 October 1952, issued in Special Proceedings No. 928-
R, effectively settled the intestate estate of Maximino by declaring Donata as
the sole, absolute, and exclusive heir of her deceased husband. The issuance
by the CFI of the said Order, as well as its conduct of the entire Special
Proceedings No. 928-R, enjoy the presumption of validity pursuant to the
Section 3(m) and (n) of Rule 131 of the Revised Rules of Court, reproduced
below –
SEC. 3. Disputable presumptions. – The following presumptions are
satisfactory if uncontradicted, but may be contradicted and overcome by other
evidence:
xxxx
(m) That official duty has been regularly performed;
(n) That a court, or judge acting as such, whether in the Philippines or
elsewhere, was acting in the lawful exercise of jurisdiction.
By reason of the foregoing provisions, this Court must presume, in the absence
of any clear and convincing proof to the contrary, that the CFI in Special
Proceedings No. 928-R had jurisdiction of the subject matter and the parties,
and to have rendered a judgment valid in every respect; and it could not give
credence to the following statements made by the Court of Appeals in its
Decision.
xxxx
Page 50 of 77
There was totally no evidentiary basis for the foregoing pronouncements. First
of all, the Petition filed by Donata for Letters of Administration in Special
Proceedings No. 928-R before the CFI was not even referred to nor presented
during the course of the trial of Civil Case No. CEB-5794 before the RTC. How
then could the Court of Appeals make a finding that Donata willfully excluded
from the said Petition the names, ages, and residences of the other heirs of
Maximino? Second, there was also no evidence showing that the CFI actually
failed to send notices of Special Proceedings No. 928-R to the heirs of
Maximino or that it did not require presentation of proof of service of such
notices. It should be remembered that there stands a presumption that the CFI
Judge had regularly performed his duties in Special Proceedings No. 928-R,
which included sending out of notices and requiring the presentation of proof of
service of such notices; and, the heirs of Maximino did not propound sufficient
evidence to debunk such presumption. They only made a general denial of
knowledge of Special Proceedings No. 928-R, at least until 1985. There was
no testimony or document presented in which the heirs of Maximino
categorically denied receipt of notice from the CFI of the pendency of Special
Proceedings No. 928-R. The only evidence on record in reference to the
absence of notice of such proceedings was the testimony of Aurelia Briones
(Aurelia), one of the heirs of Maximino, x x x.
xxxx
Aurelia’s testimony deserves scant credit considering that she was not
testifying on matters within her personal knowledge. The phrase "I don’t think"
is a clear indication that she is merely voicing out her opinion on how she
believed her uncles and aunts would have acted had they received notice of
Special Proceedings No. 928-R.
It is worth noting that, in its foregoing ratiocination, the Court was proceeding
from an evaluation of the evidence on record, which did not include an actual
copy of the CFI Order in Special Proceedings No. 928-R. Respondents only
submitted a certified true copy thereof on 15 June 2006, annexed to their
Supplemental Reply to petitioners’ opposition to their motion for
reconsideration of this Court’s Decision. Respondents did not offer any
explanation as to why they belatedly produced a copy of the said Order, but
merely claimed to have been "fortunate enough to obtain a copy" thereof from
the Register of Deeds of Cebu.16
Respondents should be taken to task for springing new evidence so late into
the proceedings of this case. Parties should present all their available evidence
at the courts below so as to give the opposing party the opportunity to
scrutinize and challenge such evidence during the course of the trial. However,
given that the existence of the CFI Order in Special Proceedings No. 928-R
was never in issue and was, in fact, admitted by the petitioners; that the copy
submitted is a certified true copy of the said Order; and that the said Order may
provide new information vital to a just resolution of the present case, this Court
is compelled to consider the same as part of the evidence on record.
The CFI Order17 in question reads in full as –
ORDER
This is with reference to the Motion of the Administratrix, dated January 5,
1960, that she be declared the sole heir of her deceased husband, Maximino
Suico Briones, the latter having died without any legitimate ascendant nor
descendant, nor any legitimate brother or sister, nephews or nieces.
At the hearing of this incident today, nobody appeared to resist the motion, and
based on the uncontradicted testimony of Donata G. Ortiz that she was the
nearest surviving relative of the deceased Maximino Suico Briones at the time
of the latter’s death, and pursuant to the pertinent provisions of the new Civil
Code of the Philippines, the Court hereby declares the aforesaid Donata G.
Ortiz the sole, absolute and exclusive heir of the estate of the deceased
Maximino Suico Briones, and she is hereby entitled to inherit all the residue of
this estate after paying all the obligations thereof, which properties are those
contained in the Inventory, dated October 2, 1952.1awphi1.net
Cebu City, January 15, 1960.
From the contents of the afore-quoted Order, this Court is able to deduce that
the CFI Order was in fact issued on 15 January 1960 and not 2 October 1952,
as earlier stated in the Decision. It was the inventory of properties, submitted
by Donata as administratrix of Maximino’s intestate estate, which was dated 2
October 1952.18 Other than such observation, this Court finds nothing in the
CFI Order which could change its original position in the Decision under
consideration.
While it is true that since the CFI was not informed that Maximino still had
surviving siblings and so the court was not able to order that these siblings be
given personal notices of the intestate proceedings, it should be borne in mind
that the settlement of estate, whether testate or intestate, is a proceeding in
rem,19 and that the publication in the newspapers of the filing of the application
and of the date set for the hearing of the same, in the manner prescribed by
law, is a notice to the whole world of the existence of the proceedings and of
the hearing on the date and time indicated in the publication. The publication
requirement of the notice in newspapers is precisely for the purpose of
informing all interested parties in the estate of the deceased of the existence of
the settlement proceedings, most especially those who were not named as
heirs or creditors in the petition, regardless of whether such omission was
voluntarily or involuntarily made.
Page 51 of 77
This Court cannot stress enough that the CFI Order was the result of the
intestate proceedings instituted by Donata before the trial court. As this Court
pointed out in its earlier Decision, the manner by which the CFI judge
conducted the proceedings enjoys the presumption of regularity, and
encompassed in such presumption is the order of publication of the notice of
the intestate proceedings. A review of the records fails to show any allegation
or concrete proof that the CFI also failed to order the publication in newspapers
of the notice of the intestate proceedings and to require proof from Donata of
compliance therewith. Neither can this Court find any reason or explanation as
to why Maximino’s siblings could have missed the published notice of the
intestate proceedings of their brother.
In relying on the presumptions of the regular performance of official duty and
lawful exercise of jurisdiction by the CFI in rendering the questioned Order,
dated 15 January 1960, this Court is not, as counsel for respondents allege,
sacrificing the substantive right of respondents to their share in the inheritance
in favor of mere procedural fiats. There is a rationale for the establishment of
rules of procedure, as amply explained by this Court in De Dios v. Court of
Appeals20 –
Procedural rules are designed to insure the orderly and expeditious
administration of justice by providing for a practical system by which the parties
to a litigation may be accorded a full and fair opportunity to present their
respective positions and refute each other's submissions under the prescribed
requirements, conditions and limitations. Adjective law is not the counterfoil of
substantive law. In fact, there is a symbiotic relationship between them. By
complying faithfully with the Rules of Court, the bench and the bar are better
able to discuss, analyze and understand substantive rights and duties and
consequently to more effectively protect and enforce them. The other
alternative is judicial anarchy.
Thus, compliance with the procedural rules is the general rule, and
abandonment thereof should only be done in the most exceptional
circumstances. The presumptions relied upon by this Court in the instant case
are disputable presumptions, which are satisfactory, unless contradicted or
overcome by evidence. This Court finds that the evidence presented by
respondents failed to overcome the given presumptions.
Although Donata may have alleged before the CFI that she was her husband’s
sole heir, it was not established that she did so knowingly, maliciously and in
bad faith, so as for this Court to conclude that she indeed committed fraud.
This Court again brings to the fore the delay by which respondents filed the
present case, when the principal actors involved, particularly, Donata and
Maximino’s siblings, have already passed away and their lips forever sealed as
to what truly transpired between them. On the other hand, Special Proceedings
No. 928-R took place when all these principal actors were still alive and each
would have been capable to act to protect his or her own right to Maximino’s
estate. Letters of Administration of Maximino’s estate were issued in favor of
Donata as early as 8 July 1952, and the CFI Order in question was issued only
on 15 January 1960. The intestate proceedings for the settlement of
Maximino’s estate were thus pending for almost eight years, and it is the
burden of the respondents to establish that their parents or grandparents,
Maximino’s surviving siblings, had absolutely no knowledge of the said
proceedings all these years. As established in Ramos v. Ramos,21 the degree
of proof to establish fraud in a case where the principal actors to the
transaction have already passed away is proof beyond reasonable doubt, to wit
–
"x x x But length of time necessarily obscures all human evidence; and as
it thus removes from the parties all the immediate means to verify the
nature of the original transactions, it operates by way of presumption, in
favor of innocence, and against imputation of fraud. It would be
unreasonable, after a great length of time, to require exact proof of all the
minute circumstances of any transaction, or to expect a satisfactory
explanation of every difficulty, real or apparent, with which it may be
encumbered. The most that can fairly be expected, in such cases, if the parties
are living, from the frailty of memory, and human infirmity, is, that the material
facts can be given with certainty to a common intent; and, if the parties are
dead, and the cases rest in confidence, and in parol agreements, the most that
we can hope is to arrive at probable conjectures, and to substitute general
presumptions of law, for exact knowledge. Fraud, or breach of trust, ought
not lightly to be imputed to the living; for, the legal presumption is the
other way; as to the dead, who are not here to answer for themselves, it
would be the height of injustice and cruelty, to disturb their ashes, and
violate the sanctity of the grave, unless the evidence of fraud be clear,
beyond a reasonable doubt (Prevost vs. Gratz, 6 Wheat. [U.S.], 481, 498).
Moreover, even if Donata’s allegation that she was Maximino’s sole heir does
constitute fraud, it is insufficient to justify abandonment of the CFI Order, dated
15 January 1960,22 considering the nature of intestate proceedings as being in
rem and the disputable presumptions of the regular performance of official duty
and lawful exercise of jurisdiction by the CFI in rendering the questioned Order,
dated 15 January 1960, in Special Proceedings No. 928-R.
On prescription of the right to recover based on implied trust
Assuming, for the sake of argument, that Donata’s misrepresentation
constitutes fraud that would impose upon her the implied trust provided in
Article 1456 of the Civil Code, this Court still cannot sustain respondents’
contention that their right to recover their shares in Maximino’s estate is
imprescriptible. It is already settled in jurisprudence that an implied trust, as
opposed to an express trust, is subject to prescription and laches.
Page 52 of 77
The case of Ramos v. Ramos23 already provides an elucidating discourse on
the matter, to wit –
"Trusts are either express or implied. Express trusts are created by the
intention of the trustor or of the parties. Implied trusts come into being by
operation of law" (Art. 1441, Civil Code). "No express trusts concerning an
immovable or any interest therein may be proven by oral evidence. An implied
trust may be proven by oral evidence" (Ibid; Arts. 1443 and 1457).
"No particular words are required for the creation of an express trust, it being
sufficient that a trust is clearly intended" (Ibid; Art. 1444; Tuason de Perez vs.
Caluag, 96 Phil. 981; Julio vs. Dalandan, L-19012, October 30, 1967, 21 SCRA
543, 546). "Express trusts are those which are created by the direct and
positive acts of the parties, by some writing or deed, or will, or by words either
expressly or impliedly evincing an intention to create a trust" (89 C.J. S. 122).
"Implied trusts are those which, without being expressed, are deducible from
the nature of the transaction as matters of intent, or which are superinduced on
the transaction by operation of law as matters of equity, independently of the
particular intention of the parties" (89 C.J.S. 724). They are ordinarily
subdivided into resulting and constructive trusts (89 C.J.S. 722).
"A resulting trust is broadly defined as a trust which is raised or created by the
act or construction of law, but in its more restricted sense it is a trust raised by
implication of law and presumed always to have been contemplated by the
parties, the intention as to which is to be found in the nature of their
transaction, but not expressed in the deed or instrument of conveyance" (89
C.J.S. 725). Examples of resulting trusts are found in Article 1448 to 1455 of
the Civil Code. See Padilla vs. Court of Appeals, L-31569, September 28,
1973, 53 SCRA 168, 179).
On the other hand, a constructive trust is a trust "raised by construction of law,
or arising by operation of law." In a more restricted sense and as
contradistinguished from a resulting trust, a constructive trust is "a trust not
created by any words, either expressly or impliedly evincing a direct intention to
create a trust, but by the construction of equity in order to satisfy the demands
of justice. It does not arise by agreement or intention but by operation of law."
(89 C.J.S. 726-727). "If a person obtains legal title to property by fraud or
concealment, courts of equity will impress upon the title a so-called
constructive trust in favor of the defrauded party." A constructive trust is not a
trust in the technical sense (Gayondato vs. Treasurer of the P.I., 49 Phil. 244;
See Art. 1456, Civil Code).
There is a rule that a trustee cannot acquire by prescription the ownership of
property entrusted to him (Palma vs. Cristobal, 77 Phil. 712), or that an action
to compel a trustee to convey property registered in his name in trust for the
benefit of the cestui qui trust does not prescribe (Manalang vs. Canlas, 94 Phil.
776; Cristobal vs. Gomez, 50 Phil. 810), or that the defense of prescription
cannot be set up in an action to recover property held by a person in trust for
the benefit of another (Sevilla vs. De los Angeles, 97 Phil. 875), or that property
held in trust can be recovered by the beneficiary regardless of the lapse of time
(Marabilles vs. Quito, 100 Phil. 64; Bancairen vs. Diones, 98 Phil. 122, 126;
Juan vs. Zuñiga, 62 O.G. 1351; 4 SCRA 1221; Jacinto vs. Jacinto, L-17957,
May 31, 1962. See Tamayo vs. Callejo, 147 Phil. 31, 37).
That rule applies squarely to express trusts. The basis of the rule is that the
possession of a trustee is not adverse. Not being adverse, he does not acquire
by prescription the property held in trust. Thus, Section 38 of Act 190 provides
that the law of prescription does not apply "in the case of a continuing and
subsisting trust" (Diaz vs. Gorricho and Aguado, 103 Phil. 261, 266; Laguna vs.
Levantino, 71 Phil. 566; Sumira vs. Vistan, 74 Phil. 138; Golfeo vs. Court of
Appeals, 63 O.G. 4895, 12 SCRA 199; Caladiao vs. Santos, 63 O.G. 1956, 10
SCRA 691).
The rule of imprescriptibility of the action to recover property held in trust may
possibly apply to resulting trusts as long as the trustee has not repudiated the
trust (Heirs of Candelaria vs. Romero, 109 Phil. 500, 502-3; Martinez vs.
Graño, 42 Phil. 35; Buencamino vs. Matias, 63 O. G. 11033, 16 SCRA 849).
The rule of imprescriptibility was misapplied to constructive trusts (Geronimo
and Isidoro vs. Nava and Aquino, 105 Phil. 145, 153. Compare with Cuison vs.
Fernandez and Bengzon, 105 Phil. 135, 139; De Pasion vs. De Pasion, 112
Phil. 403, 407).
Acquisitive prescription may bar the action of the beneficiary against the
trustee in an express trust for the recovery of the property held in trust where
(a) the trustee has performed unequivocal acts of repudiation amounting to an
ouster of the cestui qui trust; (b) such positive acts of repudiation have been
made known to the cestui qui trust and (c) the evidence thereon is clear and
conclusive (Laguna vs. Levantino, supra; Salinas vs. Tuason, 55 Phil. 729.
Compare with the rule regarding co-owners found in the last paragraph of
Article 494, Civil Code; Casañas vs. Rosello, 50 Phil. 97; Gerona vs. De
Guzman, L-19060, May 29, 1964, 11 SCRA 153, 157).
With respect to constructive trusts, the rule is different. The prescriptibility of an
action for reconveyance based on constructive trust is now settled (Alzona vs.
Capunitan, L-10228, February 28, 1962, 4 SCRA 450; Gerona vs. De Guzman,
supra; Claridad vs. Henares, 97 Phil. 973; Gonzales vs. Jimenez, L-19073,
January 30, 1965, 13 SCRA 80; Boñaga vs. Soler, 112 Phil. 651; J. M. Tuason
& Co., vs. Magdangal, L-15539, January 30, 1962, 4 SCRA 84). Prescription
Page 53 of 77
may supervene in an implied trust (Bueno vs. Reyes, L-22587, April 28, 1969,
27 SCRA 1179; Fabian vs. Fabian, L-20449, January 29, 1968; Jacinto vs.
Jacinto, L-17957, May 31, 1962, 5 SCRA 371).
And whether the trust is resulting or constructive, its enforcement may be
barred by laches (90 C.J.S. 887-889; 54 Am Jur. 449-450; Diaz vs. Gorricho
and Aguado, supra; Compare with Mejia vs. Gampona, 100 Phil. 277).
[Emphases supplied.]
A present reading of the Quion24 and Sevilla25 cases, invoked by respondents,
must be made in conjunction with and guided accordingly by the principles
established in the afore-quoted case. Thus, while respondents’ right to
inheritance was transferred or vested upon them at the time of Maximino’s
death, their enforcement of said right by appropriate legal action may be barred
by the prescription of the action.
Prescription of the action for reconveyance of the disputed properties based on
implied trust is governed by Article 1144 of the New Civil Code, which reads –
ART. 1144. The following actions must be brought within ten years from the
time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
Since an implied trust is an obligation created by law (specifically, in this case,
by Article 1456 of the New Civil Code), then respondents had 10 years within
which to bring an action for reconveyance of their shares in Maximino’s
properties. The next question now is when should the ten-year prescriptive
period be reckoned from. The general rule is that an action for reconveyance of
real property based on implied trust prescribes ten years from registration
and/or issuance of the title to the property,26 not only because registration
under the Torrens system is a constructive notice of title,27 but also because by
registering the disputed properties exclusively in her name, Donata had already
unequivocally repudiated any other claim to the same.
By virtue of the CFI Order, dated 15 January 1960, in Special Proceedings No.
928-R, Donata was able to register and secure certificates of title over the
disputed properties in her name on 27 June 1960. The respondents filed with
the RTC their Complaint for partition, annulment, and recovery of possession of
the disputed real properties, docketed as Civil Case No. CEB-5794, only on 3
March 1987, almost 27 years after the registration of the said properties in the
name of Donata. Therefore, respondents’ action for recovery of possession of
the disputed properties had clearly prescribed.
Moreover, even though respondents’ Complaint before the RTC in Civil Case
No. CEB-5794 also prays for partition of the disputed properties, it does not
make their action to enforce their right to the said properties imprescriptible.
While as a general rule, the action for partition among co-owners does not
prescribe so long as the co-ownership is expressly or impliedly recognized, as
provided for in Article 494, of the New Civil Code, it bears to emphasize that
Donata had never recognized respondents as co-owners or co-heirs, either
expressly or impliedly.28 Her assertion before the CFI in Special Proceedings
No. 928-R that she was Maximino’s sole heir necessarily excludes recognition
of some other co-owner or co-heir to the inherited properties; Consequently,
the rule on non-prescription of action for partition of property owned in common
does not apply to the case at bar.
On laches as bar to recovery
Other than prescription of action, respondents’ right to recover possession of
the disputed properties, based on implied trust, is also barred by laches. The
defense of laches, which is a question of inequity in permitting a claim to be
enforced, applies independently of prescription, which is a question of time.
Prescription is statutory; laches is equitable.29
Laches is defined as the failure to assert a right for an unreasonable and
unexplained length of time, warranting a presumption that the party entitled to
assert it has either abandoned or declined to assert it. This equitable defense
is based upon grounds of public policy, which requires the discouragement of
stale claims for the peace of society.30
This Court has already thoroughly discussed in its Decision the basis for
barring respondents’ action for recovery of the disputed properties because of
laches. This Court pointed out therein31 that –
In further support of their contention of fraud by Donata, the heirs of Maximino
even emphasized that Donata lived along the same street as some of the
siblings of Maximino and, yet, she failed to inform them of the CFI Order, dated
[15 January 1960], in Special Proceedings No. 928-R, and the issuance in her
name of new TCTs covering the real properties which belonged to the estate of
Maximino. This Court, however, appreciates such information differently. It
actually works against the heirs of Maximino. Since they only lived nearby,
Maximino’s siblings had ample opportunity to inquire or discuss with Donata
the status of the estate of their deceased brother. Some of the real properties,
which belonged to the estate of Maximino, were also located within the same
area as their residences in Cebu City, and Maximino’s siblings could have
Page 54 of 77
regularly observed the actions and behavior of Donata with regard to the said
real properties. It is uncontested that from the time of Maximino’s death on 1
May 1952, Donata had possession of the real properties. She managed the
real properties and even collected rental fees on some of them until her own
death on 1 November 1977. After Donata’s death, Erlinda took possession of
the real properties, and continued to manage the same and collect the rental
fees thereon. Donata and, subsequently, Erlinda, were so obviously exercising
rights of ownership over the real properties, in exclusion of all others, which
must have already put the heirs of Maximino on guard if they truly believed that
they still had rights thereto.
The heirs of Maximino knew he died on 1 May 1952. They even attended his
wake. They did not offer any explanation as to why they had waited 33 years
from Maximino’s death before one of them, Silverio, filed a Petition for Letters
of Administration for the intestate estate of Maximino on 21 January 1985. After
learning that the intestate estate of Maximino was already settled in Special
Proceedings No. 928-R, they waited another two years, before instituting, on 3
March 1987, Civil Case No. CEB-5794, the Complaint for partition, annulment
and recovery of the real property belonging to the estate of Maximino. x x x
Considering the circumstances in the afore-quoted paragraphs, as well as
respondents’ conduct before this Court, particularly the belated submission of
evidence and argument of new issues, respondents are consistently displaying
a penchant for delayed action, without any proffered reason or justification for
such delay.
It is well established that the law serves those who are vigilant and diligent and
not those who sleep when the law requires them to act. The law does not
encourage laches, indifference, negligence or ignorance. On the contrary, for a
party to deserve the considerations of the courts, he must show that he is not
guilty of any of the aforesaid failings.32
On void judgment or order
Respondents presented only in their Reply and Supplemental Reply to the
petitioners’ Opposition to their Motion for Reconsideration the argument that
the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R is
void and, thus, it cannot have any legal effect. Consequently, the registration of
the disputed properties in the name of Donata pursuant to such Order was
likewise void.
This Court is unconvinced.
In the jurisprudence referred to by the respondents, 33 an order or judgment is
considered void when rendered by the court without or in excess of its
jurisdiction or in violation of a mandatory duty, circumstances which are not
present in the case at bar.
Distinction must be made between a void judgment and a voidable one, thus –
"* * * A voidable judgment is one which, though not a mere nullity, is liable to be
made void when a person who has a right to proceed in the matter takes the
proper steps to have its invalidity declared. It always contains some defect
which may become fatal. It carries within it the means of its own overthrow. But
unless and until it is duly annulled, it is attended with all the ordinary
consequences of a legal judgment. The party against whom it is given may
escape its effect as a bar or an obligation, but only by a proper application to
have it vacated or reversed. Until that is done, it will be efficacious as a claim,
an estoppel, or a source of title. If no proceedings are ever taken against it, it
will continue throughout its life to all intents a valid sentence. If emanating from
a court of general jurisdiction, it will be sustained by the ordinary presumptions
of regularity, and it is not open to impeachment in any collateral action. * * *"
But it is otherwise when the judgment is void. "A void judgment is in legal effect
no judgment. By it no rights are divested. From it no rights can be obtained.
Being worthless in itself, all proceedings founded upon it are equally worthless.
It neither binds nor bars any one. All acts performed under it and all claims
flowing out of it are void. The parties attempting to enforce it may be
responsible as trespassers. The purchaser at a sale by virtue of its authority
finds himself without title and without redress." (Freeman on Judgments, sec.
117, citing Campbell vs. McCahan, 41 Ill., 45; Roberts vs. Stowers, 7 Bush,
295, Huls vs. Buntin, 47 Ill., 396; Sherrell vs. Goodrum, 3 Humph., 418;
Andrews vs. State, 2 Sneed, 549; Hollingsworth vs. Bagley, 35 Tex., 345;
Morton vs. Root, 2 Dill., 312; Commercial Bank of Manchester vs. Martin, 9
Smedes & M., 613; Hargis vs. Morse, 7 Kan., 259. See also Cornell vs.
Barnes, 7 Hill, 35; Dawson and Another vs. Wells, 3 Ind., 399; Meyer vs.
Mintonye, 106 Ill., 414; Olson vs. Nunnally, 47 Kan., 391; White vs. Foote L. &
M. Co., 29 W. Va., 385.)
It is not always easy to draw the line of demarcation between a void judgment
and a voidable one, but all authorities agree that jurisdiction over the subject-
matter is essential to the validity of a judgment and that want of such
jurisdiction renders it void and a mere nullity. In the eye of the law it is non-
existent. (Fisher vs. Harnden, 1 Paine, 55; Towns vs. Springer, 9 Ga., 130;
Mobley vs. Mobley, 9 Ga., 247; Beverly and McBride vs. Burke, 9 Ga., 440;
Central Bank of Georgia vs. Gibson, 11 Ga., 453; Johnson vs. Johnson, 30 Ill.,
215; St. Louis and Sandoval Coal and Mining Co. vs. Sandoval Coal and
Mining Co., 111 Ill., 32; Swiggart vs. Harber, 4 Scam., 364; Miller vs. Snyder, 6
Ind., 1; Seely vs. Reid, 3 Greene [Iowa], 374.)34
Page 55 of 77
The fraud and misrepresentation fostered by Donata on the CFI in Special
Proceedings No. 928-R did not deprive the trial court of jurisdiction over the
subject-matter of the case, namely, the intestate estate of Maximino. Donata’s
fraud and misrepresentation may have rendered the CFI Order, dated 15
January 1960, voidable, but not void on its face. Hence, the said Order, which
already became final and executory, can only be set aside by direct action to
annul and enjoin its enforcement.35 It cannot be the subject of a collateral
attack as is being done in this case. Note that respondents’ Complaint before
the RTC in Civil Case No. CEB-5794 was one for partition, annulment, and
recovery of possession of the disputed properties. The annulment sought in the
Complaint was not that of the CFI Order, dated 15 January 1960, but of the
certificates of title over the properties issued in Donata’s name. So until and
unless respondents bring a direct action to nullify the CFI Order, dated 15
January 1960, in Special Proceedings No. 928-R, and attain a favorable
judgment therein, the assailed Order remains valid and binding.
Nonetheless, this Court also points out that an action to annul an order or
judgment based on fraud must be brought within four years from the discovery
of the fraud.36 If it is conceded that the respondents came to know of Donata’s
fraudulent acts only in 1985, during the course of the RTC proceedings which
they instituted for the settlement of Maximino’s estate, then their right to file an
action to annul the CFI Order, dated 15 January 1960, in Special Proceedings
No. 928-R (earlier instituted by Donata for the settlement of Maximino’s estate),
has likewise prescribed by present time.
In view of the foregoing, the Motion for Reconsideration is DENIED.
A.M. No. P-01-1448 June 25, 2013
(Formerly OCA IPI No. 99-664-P)
RODOLFO C. SABIDONG, Complainant,
vs.
NICOLASITO S. SOLAS (Clerk of Court IV), Respondent.
The present administrative case stemmed from a sworn letter-complaint1 dated
May 29, 1999 filed before this Court by Rodolfo C. Sabidong (complainant)
charging respondent Nicolasito S. Solas, Clerk of Court IV, Municipal Trial
Court in Cities (MTCC), Iloilo City with grave and serious misconduct,
dishonesty, oppression and abuse of authority.
The Facts
Trinidad Sabidong, complainant’s mother, is one of the longtime occupants of a
parcel of land, designated as Lot 11 (Lot 1280-D-4-11 of consolidation-
subdivision plan [LRC] Pcs-483) originally registered in the name of C. N.
Hodges and situated at Barangay San Vicente, Jaro, Iloilo City. 2 The
Sabidongs are in possession of one-half portion of Lot 11 of the said Estate
(Hodges Estate), as the other half-portion was occupied by Priscila Saplagio.
Lot 11 was the subject of an ejectment suit filed by the Hodges Estate,
docketed as Civil Case No. 14706 of the MTCC Iloilo City, Branch 4 ("Rosita R.
Natividad in her capacity as Administratrix of C.N. Hodges Estate, plaintiff vs.
Priscila Saplagio, defendant"). On May 31, 1983, a decision was rendered in
said case ordering the defendant to immediately vacate the portion of Lot 11
leased to her and to pay the plaintiff rentals due, attorney’s fees, expenses and
costs.3 At the time, respondent was the Clerk of Court III of MTCC, Branch 3,
Iloilo City.
Sometime in October 1984, respondent submitted an Offer to Purchase on
installment Lots 11 and 12. In a letter dated January 7, 1986, the Administratrix
of the Hodges Estate rejected respondent’s offer in view of an application to
purchase already filed by the actual occupant of Lot 12, "in line with the policy
of the Probate Court to give priority to the actual occupants in awarding
approval of Offers". While the check for initial down payment tendered by
respondent was returned to him, he was nevertheless informed that he may file
an offer to purchase Lot 11 and that if he could put up a sufficient down
payment, the Estate could immediately endorse it for approval of the Probate
Court so that the property can be awarded to him "should the occupant fail to
avail of the priority given to them."4
The following day, January 8, 1986, respondent again submitted an Offer to
Purchase Lot 11 with an area of 234 square meters for the amount of ₱35,100.
Under the Order dated November 18, 1986 issued by the probate court
(Regional Trial Court of Iloilo, Branch 27) in Special Proceedings No. 1672
("Testate Estate of the Late Charles Newton Hodges, Rosita R. Natividad,
Administratrix"), respondent’s Offer to Purchase Lot 11 was approved upon the
court’s observation that the occupants of the subject lots "have not manifested
their desire to purchase the lots they are occupying up to this date and
considering time restraint and considering further, that the sales in favor of the
x x x offerors are most beneficial to the estate x x x". On January 21, 1987, the
probate court issued another Order granting respondent’s motion for issuance
of a writ of possession in his favor. The writ of possession over Lot 11 was
eventually issued on June 27, 1989.5
On November 21, 1994, a Deed of Sale With Mortgage covering Lot 11 was
executed between respondent and the Hodges Estate represented by its
Administratrix, Mrs. Ruth R. Diocares. Lot 11 was thereby conveyed to
respondent on installment for the total purchase price of ₱50,000.
Consequently, Transfer Certificate of Title (TCT) No. T-11836 in the name of C.
N. Hodges was cancelled and a new certificate of title, TCT No. T-107519 in
the name of respondent was issued on December 5, 1994. Lot 11 was later
Page 56 of 77
subdivided into two lots, Lots 11-A and 11-B for which the corresponding titles
(TCT Nos. T-116467 and T-116468), also in the name of respondent, were
issued on February 28, 1997.6
On motion of Ernesto Pe Benito, Administrator of the Hodges Estate, a writ of
demolition was issued on March 3, 1998 by the probate court in favor of
respondent and against all adverse occupants of Lot 11.7
On June 14, 1999, this Court received the sworn letter-complaint asserting that
as court employee respondent cannot buy property in litigation (consequently
he is not a buyer in good faith), commit deception, dishonesty, oppression and
grave abuse of authority. Complainant specifically alleged the following:
3. Complainant and his siblings, are possessors and occupants of a
parcel of land situated at Brgy. San Vicente, Jaro, Iloilo City, then
identified as Lot No. 1280-D-4-11, later consolidated and subdivided
and became known as Lot 11, then registered and titled in the name of
Charles Newton Hodges. The Sabidong family started occupying this
lot in 1948 and paid their monthly rentals until sometime in 1979 when
the Estate of Hodges stopped accepting rentals. x x x
4. Upon knowing sometime in 1987 that the property over which their
house is standing, was being offered for sale by the Estate, the mother
of complainant, TRINIDAD CLAVERIO SABIDONG (now deceased),
took interest in buying said property, Lot 11;
5. TRINIDAD CLAVERIO SABIDONG, was then an ordinary
housekeeper and a laundrywoman, who never received any formal
education, and did not even know how to read and write. When
Trinidad Claverio Sabidong, together with her children and the
complainant in this case, tried to negotiate with the Estate for the sale
of the subject property, they were informed that all papers for
transaction must pass through the respondent in this case, Nicolasito
Solas. This is unusual, so they made inquiries and they learned that,
Nicolasito Solas was then the Clerk of Court 111, Branch 3, Municipal
Trial Court in Cities, Iloilo City and presently, the City Sheriff of Iloilo
City;
6. The respondent Nicolasito Solas, then Clerk of Court III, MTCC,
Iloilo City, has knowledge, by reason of his position that in 1983
Hodges Estate was ejecting occupants of its land. x x x Taking
advantage of this inside information that the land subject of an
ejectment case in the Municipal Trial Court in Cities, Iloilo City, whom
respondent is a Clerk of Court III, the respondent surreptitiously offered
to buy the said lot in litigation. x x x
7. Complainant nor any member of his family did not know that as early
as 1984, the respondent had offered to purchase the subject lot from
the estate x x x. After receiving the notice of denial of his offer to
purchase, dated January 7, 1986, respondent made a second offer to
purchase the subject property the following day, January 8, 1986,
knowing fully well that the subject property was being occupied. x x x
8. Because of this denial, respondent met with the family of the
complainant and negotiated for the sale of the property and transfer of
the title in favor of the latter. Respondent made the complainant and
his family believed that he is the representative of the estate and that
he needed a downpayment right away. All the while, the Sabidong
family (who were carpenters, laundrywomen, a janitor, persons who
belong to the underprivileged) relied on the representations of the
respondent that he was authorized to facilitate the sale, with more
reason that respondent represented himself as the City Sheriff;
9. That between 1992-1993, a sister of the complainant who was
fortunate to have worked abroad, sent the amount of Ten Thousand
(₱10,000.00) Pesos to complainant’s mother, to be given to
respondent Nicolasito Solas. x x x After receiving the money,
respondent assured the Sabidong family that they will not be ejected
from the lot, he being the City Sheriff will take care of everything, and
taking advantage of the illiteracy of Trinidad Claverio Sabidong, he did
not issue any receipt;
10. True enough, they were not ejected instead it took the respondent
some time to see them again and demanded additional payment. In
the meanwhile, the complainant waited for the papers of the supposed
sale and transfer of title, which respondent had promised after
receiving the downpayment of ₱10,000.00;
11. That sometime again in 1995, respondent again received from the
mother of complainant the amount of Two Thousand (₱2,000.00)
Pesos, allegedly for the expenses of the documentation of sale and
transfer of title, and again respondent promised that the Sabidong
family will not be ejected;
12. To the prejudice and surprise of the complainant and his family,
respondent was able to secure an order for the approval of his offer to
purchase x x x in Special Proceedings No. 1672 x x x;
13. Worse, respondent moved for the issuance of a Writ of Possession
in his favor, which the probate court acted favorably x x x. A writ of
possession was issued on June 27, 1989 x x x;
Page 57 of 77
14. x x x respondent took advantage of the trust and confidence which
the Sabidong family has shown, considering that respondent was an
officer of the court and a City Sheriff at that. The complainant and his
family thought that respondent, being a City Sheriff, could help them in
the transfer of the title in their favor. Never had they ever imagined that
while respondent had been receiving from them hard-earned monies
purportedly for the sale of the subject property, respondent was also
exercising acts of ownership adverse to the interest of the complainant
and his family;
15. Being an officer of the court and supposed to be an embodiment of
fairness and justice, respondent acted with malice, with grave abuse of
confidence and deceit when he represented that he can facilitate the
sale and titling of the subject property in favor of the complainant and
his family;
16. That when several thousands of pesos were given to the
respondent as payment for the same and incidental expenses relative
thereto, he was able to cause the transfer of the title in his favor. x x x;
17. After the death of Trinidad Claverio Sabidong x x x the respondent
received from the complainant the amount of Five Thousand
(₱5,000.00) Pesos x x x When a receipt was demanded, respondent
refused to issue one, and instead promised and assured the
complainant that they will not be ejected;
xxxx
19. The complainant again, through his sister-in-law, Socorro
Sabidong, delivered and gave to the respondent the amount of Three
Thousand (₱3,000.00) Pesos as expenses for the subdivision of the
subject lot. The respondent facilitated the subdivision and after the
same was approved, the complainant did not know that two (2) titles
were issued in the name of the respondent. x x x;
20. Meanwhile, respondent prepared a Contract to Sell, for the
complainant and his neighbor Norberto Saplagio to affix their
signatures, pursuant to their previous agreement for the buyers to avail
of a housing loan with the Home Development Mutual Fund (PAG-
IBIG). Complainant attended the seminar of the HDMF for seven (7)
times, in his desire to consummate the sale. However, when the
complainant affixed his signature in the contract, he was surprised that
the owner of the subject property was the respondent. When
complainant raised a question about this, respondent assured
complainant that everything was alright and that sooner complainant
will be the owner of the property. Complainant and his family, all these
years, had believed and continued to believe that the owner was the
estate of Hodges and that respondent was only the representative of
the estate;
21. The Contract to Sell, appeared to have been notarized on June 3,
1996, however, no copy thereof was given to the complainant by the
respondent. Respondent then, took the papers and documents
required by the HDMF to be completed, from the complainant allegedly
for the purpose of personally filing the same with the HDMF.
Complainant freely and voluntarily delivered all pertinent documents to
the respondent, thinking that respondent was helping in the fast and
easy release of the loan. While the said documents were in the
possession of the respondent, he never made any transaction with the
HDMF, worse, when complainant tried to secure a copy of the Contract
to Sell, the copy given was not signed by the Notary Public, x x x;
22. The complainant [was] shocked to learn that respondent had
canceled the sale and that respondent refused to return the documents
required by the HDMF. Respondent claimed that as Sheriff, he can
cause the demolition of the house of the complainant and of his family.
Respondent threatened the complainant and he is capable of pursuing
a demolition order and serve the same with the assistance of the
military. x x x;
23. After learning of the demolition order, complainant attempted to
settle the matter with the respondent, however, the same proved futile
as respondent boasted that the property would now cost at Four
Thousand Five Hundred (₱4,500.00) Pesos;
24. The threats of demolition is imminent. Clearly, complainant and his
family were duped by the respondent and are helpless victims of an
officer of the court who took advantage of their good faith and trust.
Complainant later was informed that the subject property was awarded
to the respondent as his Sheriff’s Fees, considering that respondent
executed the decisions in ejectment cases filed by the Hodges estate
against the adverse occupants of its vast properties;
25. A civil case for the Annulment of Title of the respondent over the
subject property is pending before the Regional Trial Court of Iloilo,
Branch 37 and a criminal complaint for Estafa is also pending
preliminary investigation before the Office of the City Prosecutor of
Iloilo City, known as I.S. No. 1559-99, both filed [by] the complainant
against the respondent.8
Page 58 of 77
Acting on the complaint, Court Administrator Alfredo L. Benipayo issued a 1st
Indorsement9 dated July 8, 1999, requiring respondent to file his comment on
the Complaint dated May 29, 1999. On October 21, 1999, respondent
submitted his Comment.10
In a Resolution11 dated July 19, 1999, Public Prosecutor Constantino C.
Tubilleja dismissed the Estafa charge against respondent for insufficiency of
evidence.
On November 29, 2000, Court Administrator Benipayo issued an Evaluation
and Recommendation12 finding respondent guilty of violating Article 149113 of
the Civil Code. Said rule prohibits the purchase by certain court officers of
property and rights in litigation within their jurisdiction. Court Administrator
Benipayo recommended that:
1. this administrative complaint be treated as an administrative matter;
2. respondent Nicolasito S. Solas, Clerk of Court IV, OCC, MTCC,
Iloilo City be SUSPENDED for six (6) months, with warning that a
repetition of the same offense in the future will be dealt with more
severely;
3. inasmuch as there are factual issues regarding the delivery of
substantial amounts which complainant alleged and which defendant
denied, this issue should be investigated and the Executive Judge of
the Regional Trial Court of Iloilo City should be designated to hear the
evidence and to make a report and recommendation within sixty (60)
days from receipt.14
In a Resolution15 dated January 22, 2001, this Court adopted the
recommendation of the Court Administrator to treat the present administrative
action as a regular administrative matter and to designate the Executive Judge
of the RTC of Iloilo City to hear the evidence of the parties.
The Court, however, noted without action the Court Administrator’s
recommendation to suspend respondent for six months.
On March 13, 2001, Acting Court Administrator Zenaida N. Elepaño forwarded
the records of this case to Executive Judge Tito G. Gustilo of the Iloilo City
RTC.16 In a Resolution17 dated July 18, 2001, the Court referred this case to
the Executive Judge of the RTC of Iloilo City for investigation, report and
recommendation within 60 days from notice. By Order 18 dated August 30,
2001, Executive Judge Gustilo set the case for reception of evidence.
On March 19, 2004, the RTC of Iloilo, Branch 37, dismissed the case for
annulment of title, damages and injunction against respondent for lack of
merit.19
In a Resolution20 dated June 15, 2005, the Court resolved to reassign the
instant administrative case to Executive Judge Rene S. Hortillo for
investigation, report and recommendation within 60 days from notice. In a
Letter21 dated September 15, 2005, Executive Judge Hortillo informed the
Court that per the records, the parties have presented their testimonial and
documentary evidence before retired Executive Judge Tito G. Gustilo.
On September 12, 2005, Executive Judge Hortillo required the parties to file
their respective memoranda within 60 days from notice, upon submission of
which the case shall be deemed submitted for resolution.22
In his Memorandum,23 respondent maintained that his purchase of the subject
land is not covered by the prohibition in paragraph 5, Article 1491 of the Civil
Code. He pointed out that he bought Lot 11-A a decade after the MTCC of
Iloilo, Branch 3, had ordered the ejectment of Priscila Saplagio and Trinidad
Sabidong from the subject lot. He insisted that public trust was observed when
complainant was accorded his right of first refusal in the purchase of Lot 11-A,
albeit the latter failed to avail said right. Asserting that he is a buyer in good
faith and for value, respondent cited the dismissal of the cases for Estafa and
annulment of title and damages which complainant filed against him.
On September 10, 2007, respondent compulsorily retired from service. Prior to
this, he wrote then Senior Deputy Court Administrator Zenaida N. Elepaño,
requesting for the release of his retirement benefits pending resolution of the
administrative cases against him.24 In a Memorandum25 dated September 24,
2007, Senior Deputy Court Administrator Elepaño made the following
recommendations:
a) The request of Nicolasito S. Solas, former Clerk of Court, MTCC,
Iloilo City for partial release of his retirement benefits be GRANTED;
and
b) Atty. Lilian Barribal Co, Chief, Financial Management Office, Office
of the Court Administrator be DIRECTED to (1) WITHHOLD the
amount of Two Hundred Thousand Pesos (₱200,000.00) from the
retirement benefits of Nicolasito S. Solas to answer for any
administrative liability that the Court may find against him in A.M. No.
P-01-1448 (Formerly Administrative Matter OCA IPI No. 99-664-P);
OCA IPI No. 99-659-P; OCA IPI No. 99-670-P; and OCA IPI No. 99-
753-P; and (2) RELEASE the balance of his retirement benefits.26
Page 59 of 77
Eventually, the case was assigned to Judge Roger B. Patricio, the new
Executive Judge of the Iloilo City RTC for investigation, report and
recommendation.
On June 2, 2008, Judge Patricio submitted his final Report and
Recommendation27 finding respondent liable for grave misconduct and
dishonesty under A.M. No. 03-06-13-SC or the Code of Conduct for Court
Personnel. Based on the evidence presented, Judge Patricio concluded that
respondent misappropriated the money which he received for the filing of
complainant’s loan application. Such money could not have been used for the
partition of Lot No. 1280-D-4-11 since the same was already subdivided into
Lots 11-A and 11-B when respondent presented the Contract to Sell to
complainant. And despite respondent’s promise to keep complainant and his
family in peaceful possession of the subject property, respondent caused the
issuance of a writ of demolition against them. Thus, Judge Patricio
recommended the forfeiture of respondent’s salary for six months to be
deducted from his retirement benefits.
In a Resolution28 dated September 29, 2008, the Court noted Judge Patricio’s
Investigation Report and referred the same to the Office of the Court
Administrator (OCA) for evaluation, report and recommendation.
Findings and Recommendation of the OCA
In a Memorandum29 dated January 16, 2009, then Court Administrator Jose P.
Perez found respondent liable for serious and grave misconduct and
dishonesty and recommended the forfeiture of respondent’s salary for six
months, which shall be deducted from his retirement benefits.
The Court Administrator held that by his unilateral acts of extinguishing the
contract to sell and forfeiting the amounts he received from complainant and
Saplagio without due notice, respondent failed to act with justice and equity. He
found respondent’s denial to be anchored merely on the fact that he had not
issued receipts which was belied by his admission that he had asked money
for the expenses of partitioning Lot 11 from complainant and Saplagio. Since
their PAG-IBIG loan applications did not materialize, complainant should have
returned the amounts given to him by complainant and Saplagio.
On February 11, 2009, the Court issued a Resolution30 requiring the parties to
manifest whether they are willing to submit the case for decision on the basis of
the pleadings and records already filed with the Court. However, the copy of
the Resolution dated February 11, 2009 which was sent to complainant was
returned unserved with the postal carrier’s notation "RTS-Deceased."
Meanwhile, in a Compliance31 dated August 24, 2009, respondent expressed
his willingness to submit the case for decision and prayed for an early
resolution of the case.
Our Ruling
Article 1491, paragraph 5 of the Civil Code prohibits court officers such as
clerks of court from acquiring property involved in litigation within the
jurisdiction or territory of their courts. Said provision reads:
Article 1491. The following persons cannot acquire by purchase, even at a
public or judicial auction, either in person or through the mediation of another:
xxxx
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the administration of
justice, the property and rights in litigation or levied upon an execution before
the court within whose jurisdiction or territory they exercise their respective
functions; this prohibition includes the act of acquiring by assignment and shall
apply to lawyers, with respect to the property and rights which may be the
object of any litigation in which they may take part by virtue of their profession.
x x x x (Emphasis supplied.)
The rationale advanced for the prohibition is that public policy disallows the
transactions in view of the fiduciary relationship involved, i.e., the relation of
trust and confidence and the peculiar control exercised by these persons. 32"In
so providing, the Code tends to prevent fraud, or more precisely, tends not to
give occasion for fraud, which is what can and must be done."33
For the prohibition to apply, the sale or assignment of the property must take
place during the pendency of the litigation involving the property. 34 Where the
property is acquired after the termination of the case, no violation of paragraph
5, Article 1491 of the Civil Code attaches.35
In the case at bar, when respondent purchased Lot 11-A on November 21,
1994, the Decision in Civil Case No. 14706 which was promulgated on May 31,
1983 had long become final. Be that as it may, it can not be said that the
property is no longer "in litigation" at that time considering that it was part of the
Hodges Estate then under settlement proceedings (Sp. Proc. No. 1672).
A thing is said to be in litigation not only if there is some contest or litigation
over it in court, but also from the moment that it becomes subject to the judicial
action of the judge.36 A property forming part of the estate under judicial
Page 60 of 77
settlement continues to be subject of litigation until the probate court issues an
order declaring the estate proceedings closed and terminated. The rule is that
as long as the order for the distribution of the estate has not been complied
with, the probate proceedings cannot be deemed closed and terminated. 37 The
probate court loses jurisdiction of an estate under administration only after the
payment of all the debts and the remaining estate delivered to the heirs entitled
to receive the same.38 Since there is no evidence to show that Sp. Proc. No.
1672 in the RTC of Iloilo, Branch 27, had already been closed and terminated
at the time of the execution of the Deed of Sale With Mortgage dated
November 21, 1994, Lot 11 is still deemed to be "in litigation" subject to the
operation of Article 1491 (5) of the Civil Code.
This notwithstanding, we hold that the sale of Lot 11 in favor of respondent did
not violate the rule on disqualification to purchase property because Sp. Proc.
No. 1672 was then pending before another court (RTC) and not MTCC where
he was Clerk of Court.
On the charges against the respondent, we find him liable for dishonesty and
grave misconduct.
Misconduct is a transgression of some established and definite rule of action,
more particularly, unlawful behavior as well as gross negligence by a public
officer. To warrant dismissal from service, the misconduct must be grave,
serious, important, weighty, momentous and not trifling. The misconduct must
imply wrongful intention and not a mere error of judgment. The misconduct
must also have a direct relation to and be connected with the performance of
the public officer’s official duties amounting either to maladministration or
willful, intentional neglect, or failure to discharge the duties of the office.39
Dishonesty is the "disposition to lie, cheat, deceive, defraud or betray;
untrustworthiness; lack of integrity; lack of honesty, probity, or integrity in
principle; and lack of fairness and straightforwardness."40
In this case, respondent deceived complainant’s family who were led to believe
that he is the legal representative of the Hodges Estate, or at least possessed
of such power to intercede for overstaying occupants of the estate’s properties
like complainant. Boasting of his position as a court officer, a City Sheriff at
that, complainant’s family completely relied on his repeated assurance that
they will not be ejected from the premises. Upon learning that the lot they were
occupying was for sale and that they had to negotiate for it through respondent,
complainant’s family readily gave the amounts he demanded and, along with
Saplagio, complied with the requirements for a loan application with PAG-IBIG.
All the while and unknown to complainant’s family, respondent was actually
working to acquire Lot 11 for himself.
Thus, while respondent was negotiating with the Hodges Estate for the sale of
the property to him, he collected as down payment ₱5,000 from complainant’s
family in July 1986. Four months later, on November 18, 1986, the probate
court approved respondent’s offer to purchase Lot 11. The latter received
further down payment from complainant in the amount of ₱10,000 between
1992 and 1993, or before the Deed of Sale with Mortgage41 dated November
21, 1994 could be executed in respondent’s favor.
Thereafter, respondent demanded ₱3,000 from complainant supposedly for the
subdivision of Lot 11 between the latter and the Saplagios. Yet, it was not until
respondent obtained title over said lot that the same was subdivided into Lots
11-A and 11-B. The records42 of the case show that the Subdivision Plan dated
April 25, 1996, duly approved by the Land Management Services (DENR)
subdividing Lot 11 into sublots 11-A and 11-B, was inscribed on February 28,
1997 – two years after TCT No. T-107519 covering Lot 11 was issued in
respondent’s name on December 5, 1994.
Finally, in 1995, respondent received the amount of ₱2,000 to defray the
expenses for documentation and transfer of title in complainant’s name. In the
latter instance, while it may be argued that respondent already had the
capacity to sell the subject property, the sum of all the circumstances belie an
honest intention on his part to convey Lot 11-A to complainant. We note the
inscription in TCT No. T-1183643 in the name of C.N. Hodges that respondent
executed a Request dated February 19, 1997 "for the issuance of separate
titles in the name of the registered owner."44 Soon after, TCT No. T-
11646745 covering Lot 11-A and TCT No. T-11646846 covering Lot 11-B were
issued in the name of respondent on February 28, 1997 – only eight months
after he executed the Contract to Sell47 in favor of complainant on June 3,
1996.
Respondent’s bare denials were correctly disregarded by the Court
Administrator in the light of his own admission that he indeed asked money
from both complainant and Saplagio. The evidence on record clearly
established that by misrepresenting himself as the estate’s representative and
as a court officer having the power to protect complainant’s family from
eviction, respondent was able to collect sums totaling ₱20,000 from
complainant’s family. Even after the latter realized they were duped since
respondent was already the owner of Lot 11, they still offered to buy the
property from him. Respondent, however, changed his mind and no longer
wanted to sell the property after nothing happened to the loan applications of
complainant and Saplagio. This subsequent unilateral cancellation by
respondent of the contract to sell with complainant may have been an
afterthought, and plainly unjustified, based merely on his own assumption that
complainant could not make full payment. But it did not negate the deception
and fraudulent acts perpetrated against complainant’s family who were forced
Page 61 of 77
into submission by the constant threat of eviction. Such acts constitute grave
misconduct for which respondent should be held answerable.
In Re: Complaint Filed by Paz De Vera Lazaro Against Edna Magallanes,
Court Stenographer III, RTC Br. 28 and Bonifacio G. Magallanes, Process
Server, RTC Br. 30, Bayombong, Nueva Vizcaya, 48 the Court stressed that to
preserve decency within the judiciary, court personnel must comply with just
contractual obligations, act fairly and adhere to high ethical standards. In that
case, we said that court employees are expected to be paragons of
uprightness, fairness and honesty not only in their official conduct but also in
their personal dealings, including business and commercial transactions to
avoid becoming the court’s albatross of infamy.49
More importantly, Section 4(c) of Republic Act No. 6713 50 or the Code of
Conduct and Ethical Standards for Public Officials and Employees mandates
that public officials and employees shall remain true to the people at all times.
They must act with justness and sincerity and shall not discriminate against
anyone, especially the poor and the underprivileged.1âwphi1 They shall at all
times respect the rights of others, and shall refrain from doing acts contrary to
law, good morals, good customs, public policy, public order, public safety and
public interest.
Under Section 52,51 Rule IV of the Uniform Rules on Administrative Cases in
the Civil Service, dishonesty and grave misconduct are classified as grave
offenses with the corresponding penalty of dismissal for the first offense.
Section 58(a) states that the penalty of dismissal shall carry with it the
cancellation of eligibility, forfeiture of retirement benefits, and the perpetual
disqualification for reemployment in the government service.
Section 53 further provides that mitigating circumstances attendant to the
commission of the offense should be considered in the determination of the
penalty to be imposed on the erring government employee. However, no such
mitigating circumstance had been shown. On the contrary, respondent had
been previously held administratively liable for irregularities in the performance
of his duties as Clerk of Court. In A.M. No. P-01-1484,52 this Court imposed on
respondent a fine of ₱5,000 for acting imprudently in notarizing documents and
administering oath on matters alien to his official duties. And in A.M. Nos. P-08-
2567 (formerly OCA IPI No. 99-670-P) and P-08-2568 (formerly OCA IPI No.
99-753-P),53 respondent was found liable for simple misconduct and ordered to
pay a fine equivalent to his three (3) months salary to be deducted from his
retirement benefits.
Since respondent had compulsorily retired from service on September 10,
2007, for this additional administrative case he should be fined in an amount
equivalent to his salary for six months which shall likewise be deducted from
his retirement benefits.
WHEREFORE, the Court finds respondent Nicolasito S. Solas, retired Clerk of
Court IV, Municipal Trial Court in Cities, Iloilo City, LIABLE FOR GRAVE
MISCONDUCT AND DISHONESTY. Respondent is FINED in an amount
equivalent to his salary for six (6) months to be deducted from his retirement
benefits.
G.R. No. 156407 January 15, 2014
THELMA M. ARANAS, Petitioner,
vs.
TERESITA V. MERCADO, FELIMON V. MERCADO, CARMENCITA M.
SUTHERLAND, RICHARD V. MERCADO, MA. TERESITA M. ANDERSON,
and FRANKLIN L. MERCADO, Respondents.
The probate court is authorized to determine the issue of ownership of
properties for purposes of their inclusion or exclusion from the inventory to be
submitted by the administrator, but its determination shall only be provisional
unless the interested parties are all heirs of the decedent, or the question is
one of collation or advancement, or the parties consent to the assumption of
jurisdiction by the probate court and the rights of third parties are not impaired.
Its jurisdiction extends to matters incidental or collateral to the settlement and
distribution of the estate, such as the determination of the status of each heir
and whether property included in the inventory is the conjugal or exclusive
property of the deceased spouse.
Antecedents
Emigdio S. Mercado (Emigdio) died intestate on January 12, 1991, survived by
his second wife, Teresita V. Mercado (Teresita), and their five children, namely:
Allan V. Mercado, Felimon V. Mercado, Carmencita M. Sutherland, Richard V.
Mercado, and Maria Teresita M. Anderson; and his two children by his first
marriage, namely: respondent Franklin L. Mercado and petitioner Thelma M.
Aranas (Thelma).
Emigdio inherited and acquired real properties during his lifetime. He owned
corporate shares in Mervir Realty Corporation (Mervir Realty) and Cebu
Emerson Transportation Corporation (Cebu Emerson). He assigned his real
properties in exchange for corporate stocks of Mervir Realty, and sold his real
property in Badian, Cebu (Lot 3353 covered by Transfer Certificate of Title No.
3252) to Mervir Realty.
Page 62 of 77
On June 3, 1991, Thelma filed in the Regional Trial Court (RTC) in Cebu City a
petition for the appointment of Teresita as the administrator of Emigdio’s estate
(Special Proceedings No. 3094-CEB).1 The RTC granted the petition
considering that there was no opposition. The letters of administration in favor
of Teresita were issued on September 7, 1992.
As the administrator, Teresita submitted an inventory of the estate of Emigdio
on December 14, 1992 for the consideration and approval by the RTC. She
indicated in the inventory that at the time of his death, Emigdio had "left no real
properties but only personal properties" worth ₱6,675,435.25 in all, consisting
of cash of ₱32,141.20; furniture and fixtures worth ₱20,000.00; pieces of
jewelry valued at ₱15,000.00; 44,806 shares of stock of Mervir Realty worth
₱6,585,585.80; and 30 shares of stock of Cebu Emerson worth ₱22,708.25.2
Claiming that Emigdio had owned other properties that were excluded from the
inventory, Thelma moved that the RTC direct Teresita to amend the inventory,
and to be examined regarding it. The RTC granted Thelma’s motion through
the order of January 8, 1993.
On January 21, 1993, Teresita filed a compliance with the order of January 8,
1993,3 supporting her inventory with copies of three certificates of stocks
covering the 44,806 Mervir Realty shares of stock;4 the deed of assignment
executed by Emigdio on January 10, 1991 involving real properties with the
market value of ₱4,440,651.10 in exchange for 44,407 Mervir Realty shares of
stock with total par value of ₱4,440,700.00;5 and the certificate of stock issued
on January 30, 1979 for 300 shares of stock of Cebu Emerson worth
₱30,000.00.6
On January 26, 1993, Thelma again moved to require Teresita to be examined
under oath on the inventory, and that she (Thelma) be allowed 30 days within
which to file a formal opposition to or comment on the inventory and the
supporting documents Teresita had submitted.
On February 4, 1993, the RTC issued an order expressing the need for the
parties to present evidence and for Teresita to be examined to enable the court
to resolve the motion for approval of the inventory.7
On April 19, 1993, Thelma opposed the approval of the inventory, and asked
leave of court to examine Teresita on the inventory.
With the parties agreeing to submit themselves to the jurisdiction of the court
on the issue of what properties should be included in or excluded from the
inventory, the RTC set dates for the hearing on that issue.8
Ruling of the RTC
After a series of hearings that ran for almost eight years, the RTC issued on
March 14, 2001 an order finding and holding that the inventory submitted by
Teresita had excluded properties that should be included, and accordingly
ruled:
WHEREFORE, in view of all the foregoing premises and considerations, the
Court hereby denies the administratrix’s motion for approval of inventory. The
Court hereby orders the said administratrix to re-do the inventory of properties
which are supposed to constitute as the estate of the late Emigdio S. Mercado
by including therein the properties mentioned in the last five immediately
preceding paragraphs hereof and then submit the revised inventory within sixty
(60) days from notice of this order.
The Court also directs the said administratrix to render an account of her
administration of the estate of the late Emigdio S. Mercado which had come to
her possession. She must render such accounting within sixty (60) days from
notice hereof.
SO ORDERED.9
On March 29, 2001, Teresita, joined by other heirs of Emigdio, timely sought
the reconsideration of the order of March 14, 2001 on the ground that one of
the real properties affected, Lot No. 3353 located in Badian, Cebu, had already
been sold to Mervir Realty, and that the parcels of land covered by the deed of
assignment had already come into the possession of and registered in the
name of Mervir Realty.10 Thelma opposed the motion.
On May 18, 2001, the RTC denied the motion for reconsideration,11 stating that
there was no cogent reason for the reconsideration, and that the movants’
agreement as heirs to submit to the RTC the issue of what properties should
be included or excluded from the inventory already estopped them from
questioning its jurisdiction to pass upon the issue.
Decision of the CA
Alleging that the RTC thereby acted with grave abuse of discretion in refusing
to approve the inventory, and in ordering her as administrator to include real
properties that had been transferred to Mervir Realty, Teresita, joined by her
four children and her stepson Franklin, assailed the adverse orders of the RTC
promulgated on March 14, 2001 and May 18, 2001 by petition for certiorari,
stating:
I. THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE
ABUSE OF JURISDICTION (sic) AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN HOLDING THAT THE REAL PROPERTY WHICH WAS
Page 63 of 77
SOLD BY THE LATE EMIGDIO S. MERCADO DURING HIS LIFETIME TO A
PRIVATE CORPORATION (MERVIR REALTY CORPORATION) BE
INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE EMIGDIO
S. MERCADO.
II. THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE
ABUSE OF JURISDICTION (sic) AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN HOLDING THAT REAL PROPERTIES WHICH ARE IN
THE POSSESSION OF AND ALREADY REGISTERED IN THE NAME (OF)
PRIVATE CORPORATION (MERVIR REALTY CORPORATION) BE
INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE EMIGDIO
S. MERCADO.
III. THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN HOLDING THAT PETITIONERS ARE NOW ESTOPPED
FROM QUESTIONING ITS JURISDICTION IN PASSING UPON THE ISSUE
OF WHAT PROPERTIES SHOULD BE INCLUDED IN THE INVENTORY OF
THE ESTATE OF THE LATE EMIGDIO MERCADO.12
On May 15, 2002, the CA partly granted the petition for certiorari, disposing as
follows:13
WHEREFORE, FOREGOING PREMISES CONSIDERED, this petition is
GRANTED partially. The assailed Orders dated March 14, 2001 and May 18,
2001 are hereby reversed and set aside insofar as the inclusion of parcels of
land known as Lot No. 3353 located at Badian, Cebu with an area of 53,301
square meters subject matter of the Deed of Absolute Sale dated November 9,
1989 and the various parcels of land subject matter of the Deeds of
Assignment dated February 17, 1989 and January 10, 1991 in the revised
inventory to be submitted by the administratrix is concerned and affirmed in all
other respects.
SO ORDERED.
The CA opined that Teresita, et al. had properly filed the petition for certiorari
because the order of the RTC directing a new inventory of properties was
interlocutory; that pursuant to Article 1477 of the Civil Code, to the effect that
the ownership of the thing sold "shall be transferred to the vendee" upon its
"actual and constructive delivery," and to Article 1498 of the Civil Code, to the
effect that the sale made through a public instrument was equivalent to the
delivery of the object of the sale, the sale by Emigdio and Teresita had
transferred the ownership of Lot No. 3353 to Mervir Realty because the deed of
absolute sale executed on November 9, 1989 had been notarized; that Emigdio
had thereby ceased to have any more interest in Lot 3353; that Emigdio had
assigned the parcels of land to Mervir Realty as early as February 17, 1989 "for
the purpose of saving, as in avoiding taxes with the difference that in the Deed
of Assignment dated January 10, 1991, additional seven (7) parcels of land
were included"; that as to the January 10, 1991 deed of assignment, Mervir
Realty had been "even at the losing end considering that such parcels of land,
subject matter(s) of the Deed of Assignment dated February 12, 1989, were
again given monetary consideration through shares of stock"; that even if the
assignment had been based on the deed of assignment dated January 10,
1991, the parcels of land could not be included in the inventory "considering
that there is nothing wrong or objectionable about the estate planning scheme";
that the RTC, as an intestate court, also had no power to take cognizance of
and determine the issue of title to property registered in the name of third
persons or corporation; that a property covered by the Torrens system should
be afforded the presumptive conclusiveness of title; that the RTC, by
disregarding the presumption, had transgressed the clear provisions of law and
infringed settled jurisprudence on the matter; and that the RTC also gravely
abused its discretion in holding that Teresita, et al. were estopped from
questioning its jurisdiction because of their agreement to submit to the RTC the
issue of which properties should be included in the inventory.
The CA further opined as follows:
In the instant case, public respondent court erred when it ruled that petitioners
are estopped from questioning its jurisdiction considering that they have
already agreed to submit themselves to its jurisdiction of determining what
properties are to be included in or excluded from the inventory to be submitted
by the administratrix, because actually, a reading of petitioners’ Motion for
Reconsideration dated March 26, 2001 filed before public respondent court
clearly shows that petitioners are not questioning its jurisdiction but the manner
in which it was exercised for which they are not estopped, since that is their
right, considering that there is grave abuse of discretion amounting to lack or in
excess of limited jurisdiction when it issued the assailed Order dated March 14,
2001 denying the administratrix’s motion for approval of the inventory of
properties which were already titled and in possession of a third person that is,
Mervir Realty Corporation, a private corporation, which under the law
possessed a personality distinct and separate from its stockholders, and in the
absence of any cogency to shred the veil of corporate fiction, the presumption
of conclusiveness of said titles in favor of Mervir Realty Corporation should
stand undisturbed.
Besides, public respondent court acting as a probate court had no authority to
determine the applicability of the doctrine of piercing the veil of corporate fiction
and even if public respondent court was not merely acting in a limited capacity
as a probate court, private respondent nonetheless failed to adjudge
competent evidence that would have justified the court to impale the veil of
corporate fiction because to disregard the separate jurisdictional personality of
Page 64 of 77
a corporation, the wrongdoing must be clearly and convincingly established
since it cannot be presumed.14
On November 15, 2002, the CA denied the motion for reconsideration of
Teresita, et al.15
Issue
Did the CA properly determine that the RTC committed grave abuse of
discretion amounting to lack or excess of jurisdiction in directing the inclusion
of certain properties in the inventory notwithstanding that such properties had
been either transferred by sale or exchanged for corporate shares in Mervir
Realty by the decedent during his lifetime?
Ruling of the Court
The appeal is meritorious.
I
Was certiorari the proper recourse
to assail the questioned orders of the RTC?
The first issue to be resolved is procedural. Thelma contends that the resort to
the special civil action for certiorari to assail the orders of the RTC by Teresita
and her co-respondents was not proper.
Thelma’s contention cannot be sustained.
The propriety of the special civil action for certiorari as a remedy depended on
whether the assailed orders of the RTC were final or interlocutory in nature. In
Pahila-Garrido v. Tortogo,16 the Court distinguished between final and
interlocutory orders as follows:
The distinction between a final order and an interlocutory order is well known.
The first disposes of the subject matter in its entirety or terminates a particular
proceeding or action, leaving nothing more to be done except to enforce by
execution what the court has determined, but the latter does not completely
dispose of the case but leaves something else to be decided upon. An
interlocutory order deals with preliminary matters and the trial on the merits is
yet to be held and the judgment rendered. The test to ascertain whether or not
an order or a judgment is interlocutory or final is: does the order or judgment
leave something to be done in the trial court with respect to the merits of the
case? If it does, the order or judgment is interlocutory; otherwise, it is final.
The order dated November 12, 2002, which granted the application for the writ
of preliminary injunction, was an interlocutory, not a final, order, and should not
be the subject of an appeal. The reason for disallowing an appeal from an
interlocutory order is to avoid multiplicity of appeals in a single action, which
necessarily suspends the hearing and decision on the merits of the action
during the pendency of the appeals. Permitting multiple appeals will
necessarily delay the trial on the merits of the case for a considerable length of
time, and will compel the adverse party to incur unnecessary expenses, for one
of the parties may interpose as many appeals as there are incidental questions
raised by him and as there are interlocutory orders rendered or issued by the
lower court. An interlocutory order may be the subject of an appeal, but only
after a judgment has been rendered, with the ground for appealing the order
being included in the appeal of the judgment itself.
The remedy against an interlocutory order not subject of an appeal is an
appropriate special civil action under Rule 65, provided that the interlocutory
order is rendered without or in excess of jurisdiction or with grave abuse of
discretion. Then is certiorari under Rule 65 allowed to be resorted to.
The assailed order of March 14, 2001 denying Teresita’s motion for the
approval of the inventory and the order dated May 18, 2001 denying her motion
for reconsideration were interlocutory. This is because the inclusion of the
properties in the inventory was not yet a final determination of their ownership.
Hence, the approval of the inventory and the concomitant determination of the
ownership as basis for inclusion or exclusion from the inventory were
provisional and subject to revision at anytime during the course of the
administration proceedings.
In Valero Vda. De Rodriguez v. Court of Appeals,17 the Court, in affirming the
decision of the CA to the effect that the order of the intestate court excluding
certain real properties from the inventory was interlocutory and could be
changed or modified at anytime during the course of the administration
proceedings, held that the order of exclusion was not a final but an
interlocutory order "in the sense that it did not settle once and for all the title to
the San Lorenzo Village lots." The Court observed there that:
The prevailing rule is that for the purpose of determining whether a certain
property should or should not be included in the inventory, the probate court
may pass upon the title thereto but such determination is not conclusive and is
subject to the final decision in a separate action regarding ownership which
may be instituted by the parties (3 Moran’s Comments on the Rules of Court,
1970 Edition, pages 448-9 and 473; Lachenal vs. Salas, L-42257, June 14,
1976, 71 SCRA 262, 266).18 (Bold emphasis supplied)
Page 65 of 77
To the same effect was De Leon v. Court of Appeals,19 where the Court
declared that a "probate court, whether in a testate or intestate proceeding, can
only pass upon questions of title provisionally," and reminded, citing Jimenez v.
Court of Appeals, that the "patent reason is the probate court’s limited
jurisdiction and the principle that questions of title or ownership, which result in
inclusion or exclusion from the inventory of the property, can only be settled in
a separate action." Indeed, in the cited case of Jimenez v. Court of
Appeals,20 the Court pointed out:
All that the said court could do as regards the said properties is determine
whether they should or should not be included in the inventory or list of
properties to be administered by the administrator. If there is a dispute as to
the ownership, then the opposing parties and the administrator have to resort
to an ordinary action for a final determination of the conflicting claims of title
because the probate court cannot do so. (Bold emphasis supplied)
On the other hand, an appeal would not be the correct recourse for Teresita, et
al. to take against the assailed orders. The final judgment rule embodied in the
first paragraph of Section 1, Rule 41, Rules of Court, 21 which also governs
appeals in special proceedings, stipulates that only the judgments, final orders
(and resolutions) of a court of law "that completely disposes of the case, or of a
particular matter therein when declared by these Rules to be appealable" may
be the subject of an appeal in due course. The same rule states that an
interlocutory order or resolution (interlocutory because it deals with preliminary
matters, or that the trial on the merits is yet to be held and the judgment
rendered) is expressly made non-appealable.
Multiple appeals are permitted in special proceedings as a practical recognition
of the possibility that material issues may be finally determined at various
stages of the special proceedings. Section 1, Rule 109 of the Rules of Court
enumerates the specific instances in which multiple appeals may be resorted to
in special proceedings, viz:
Section 1. Orders or judgments from which appeals may be taken. - An
interested person may appeal in special proceedings from an order or
judgment rendered by a Court of First Instance or a Juvenile and Domestic
Relations Court, where such order or judgment:
(a) Allows or disallows a will;
(b) Determines who are the lawful heirs of a deceased person, or the
distributive share of the estate to which such person is entitled;
 (c) Allows or disallows, in whole or in part, any claim against the estate
of a deceased person, or any claim presented on behalf of the estate
in offset to a claim against it;
(d) Settles the account of an executor, administrator, trustee or
guardian;
(e) Constitutes, in proceedings relating to the settlement of the estate
of a deceased person, or the administration of a trustee or guardian, a
final determination in the lower court of the rights of the party
appealing, except that no appeal shall be allowed from the
appointment of a special administrator; and
(f) Is the final order or judgment rendered in the case, and affects the
substantial rights of the person appealing, unless it be an order
granting or denying a motion for a new trial or for reconsideration.
Clearly, the assailed orders of the RTC, being interlocutory, did not come under
any of the instances in which multiple appeals are permitted.
II
Did the RTC commit grave abuse of discretion
in directing the inclusion of the properties
in the estate of the decedent?
In its assailed decision, the CA concluded that the RTC committed grave abuse
of discretion for including properties in the inventory notwithstanding their
having been transferred to Mervir Realty by Emigdio during his lifetime, and for
disregarding the registration of the properties in the name of Mervir Realty, a
third party, by applying the doctrine of piercing the veil of corporate fiction.
Was the CA correct in its conclusion?
The answer is in the negative. It is unavoidable to find that the CA, in reaching
its conclusion, ignored the law and the facts that had fully warranted the
assailed orders of the RTC.
Under Section 6(a), Rule 78 of the Rules of Court, the letters of administration
may be granted at the discretion of the court to the surviving spouse, who is
competent and willing to serve when the person dies intestate. Upon issuing
the letters of administration to the surviving spouse, the RTC becomes duty-
bound to direct the preparation and submission of the inventory of the
properties of the estate, and the surviving spouse, as the administrator, has the
Page 66 of 77
duty and responsibility to submit the inventory within three months from the
issuance of letters of administration pursuant to Rule 83 of the Rules of Court,
viz:
Section 1. Inventory and appraisal to be returned within three months. – Within
three (3) months after his appointment every executor or administrator shall
return to the court a true inventory and appraisal of all the real and personal
estate of the deceased which has come into his possession or knowledge. In
the appraisement of such estate, the court may order one or more of the
inheritance tax appraisers to give his or their assistance.
The usage of the word all in Section 1, supra, demands the inclusion of all the
real and personal properties of the decedent in the inventory. 22 However, the
word all is qualified by the phrase which has come into his possession or
knowledge, which signifies that the properties must be known to the
administrator to belong to the decedent or are in her possession as the
administrator. Section 1 allows no exception, for the phrase true inventory
implies that no properties appearing to belong to the decedent can be excluded
from the inventory, regardless of their being in the possession of another
person or entity.
The objective of the Rules of Court in requiring the inventory and appraisal of
the estate of the decedent is "to aid the court in revising the accounts and
determining the liabilities of the executor or the administrator, and in making a
final and equitable distribution (partition) of the estate and otherwise to facilitate
the administration of the estate."23Hence, the RTC that presides over the
administration of an estate is vested with wide discretion on the question of
what properties should be included in the inventory. According to Peralta v.
Peralta,24 the CA cannot impose its judgment in order to supplant that of the
RTC on the issue of which properties are to be included or excluded from the
inventory in the absence of "positive abuse of discretion," for in the
administration of the estates of deceased persons, "the judges enjoy ample
discretionary powers and the appellate courts should not interfere with or
attempt to replace the action taken by them, unless it be shown that there has
been a positive abuse of discretion."25 As long as the RTC commits no patently
grave abuse of discretion, its orders must be respected as part of the regular
performance of its judicial duty.
There is no dispute that the jurisdiction of the trial court as an intestate court is
special and limited. The trial court cannot adjudicate title to properties claimed
to be a part of the estate but are claimed to belong to third parties by title
adverse to that of the decedent and the estate, not by virtue of any right of
inheritance from the decedent. All that the trial court can do regarding said
properties is to determine whether or not they should be included in the
inventory of properties to be administered by the administrator. Such
determination is provisional and may be still revised. As the Court said in
Agtarap v. Agtarap:26
The general rule is that the jurisdiction of the trial court, either as a probate
court or an intestate court, relates only to matters having to do with the probate
of the will and/or settlement of the estate of deceased persons, but does not
extend to the determination of questions of ownership that arise during the
proceedings. The patent rationale for this rule is that such court merely
exercises special and limited jurisdiction. As held in several cases, a probate
court or one in charge of estate proceedings, whether testate or intestate,
cannot adjudicate or determine title to properties claimed to be a part of the
estate and which are claimed to belong to outside parties, not by virtue of any
right of inheritance from the deceased but by title adverse to that of the
deceased and his estate. All that the said court could do as regards said
properties is to determine whether or not they should be included in the
inventory of properties to be administered by the administrator. If there is no
dispute, there poses no problem, but if there is, then the parties, the
administrator, and the opposing parties have to resort to an ordinary action
before a court exercising general jurisdiction for a final determination of the
conflicting claims of title.
However, this general rule is subject to exceptions as justified by expediency
and convenience.
First, the probate court may provisionally pass upon in an intestate or a testate
proceeding the question of inclusion in, or exclusion from, the inventory of a
piece of property without prejudice to final determination of ownership in a
separate action. Second, if the interested parties are all heirs to the estate, or
the question is one of collation or advancement, or the parties consent to the
assumption of jurisdiction by the probate court and the rights of third parties are
not impaired, then the probate court is competent to resolve issues on
ownership. Verily, its jurisdiction extends to matters incidental or collateral to
the settlement and distribution of the estate, such as the determination of the
status of each heir and whether the property in the inventory is conjugal or
exclusive property of the deceased spouse.27 (Italics in the original; bold
emphasis supplied)
It is clear to us that the RTC took pains to explain the factual bases for its
directive for the inclusion of the properties in question in its assailed order of
March 14, 2001, viz:
In the first place, the administratrix of the estate admitted that Emigdio
Mercado was one of the heirs of Severina Mercado who, upon her death, left
several properties as listed in the inventory of properties submitted in Court in
Special Proceedings No. 306-R which are supposed to be divided among her
Page 67 of 77
heirs. The administratrix admitted, while being examined in Court by the
counsel for the petitioner, that she did not include in the inventory submitted by
her in this case the shares of Emigdio Mercado in the said estate of Severina
Mercado. Certainly, said properties constituting Emigdio Mercado’s share in
the estate of Severina Mercado should be included in the inventory of
properties required to be submitted to the Court in this particular case.
In the second place, the administratrix of the estate of Emigdio Mercado also
admitted in Court that she did not include in the inventory shares of stock of
Mervir Realty Corporation which are in her name and which were paid by her
from money derived from the taxicab business which she and her husband had
since 1955 as a conjugal undertaking. As these shares of stock partake of
being conjugal in character, one-half thereof or of the value thereof should be
included in the inventory of the estate of her husband.
In the third place, the administratrix of the estate of Emigdio Mercado admitted,
too, in Court that she had a bank account in her name at Union Bank which
she opened when her husband was still alive. Again, the money in said bank
account partakes of being conjugal in character, and so, one-half thereof
should be included in the inventory of the properties constituting as estate of
her husband.
In the fourth place, it has been established during the hearing in this case that
Lot No. 3353 of Pls-657-D located in Badian, Cebu containing an area of
53,301 square meters as described in and covered by Transfer Certificate of
Title No. 3252 of the Registry of Deeds for the Province of Cebu is still
registered in the name of Emigdio S. Mercado until now. When it was the
subject of Civil Case No. CEB-12690 which was decided on October 19, 1995,
it was the estate of the late Emigdio Mercado which claimed to be the owner
thereof. Mervir Realty Corporation never intervened in the said case in order to
be the owner thereof. This fact was admitted by Richard Mercado himself when
he testified in Court. x x x So the said property located in Badian, Cebu should
be included in the inventory in this case.
Fifthly and lastly, it appears that the assignment of several parcels of land by
the late Emigdio S. Mercado to Mervir Realty Corporation on January 10, 1991
by virtue of the Deed of Assignment signed by him on the said day (Exhibit N
for the petitioner and Exhibit 5 for the administratrix) was a transfer in
contemplation of death. It was made two days before he died on January 12,
1991. A transfer made in contemplation of death is one prompted by the
thought that the transferor has not long to live and made in place of a
testamentary disposition (1959 Prentice Hall, p. 3909). Section 78 of the
National Internal Revenue Code of 1977 provides that the gross estate of the
decedent shall be determined by including the value at the time of his death of
all property to the extent of any interest therein of which the decedent has at
any time made a transfer in contemplation of death. So, the inventory to be
approved in this case should still include the said properties of Emigdio
Mercado which were transferred by him in contemplation of death. Besides, the
said properties actually appeared to be still registered in the name of Emigdio
S. Mercado at least ten (10) months after his death, as shown by the
certification issued by the Cebu City Assessor’s Office on October 31, 1991
(Exhibit O).28
Thereby, the RTC strictly followed the directives of the Rules of Court and the
jurisprudence relevant to the procedure for preparing the inventory by the
administrator. The aforequoted explanations indicated that the directive to
include the properties in question in the inventory rested on good and valid
reasons, and thus was far from whimsical, or arbitrary, or capricious.
Firstly, the shares in the properties inherited by Emigdio from Severina
Mercado should be included in the inventory because Teresita, et al. did not
dispute the fact about the shares being inherited by Emigdio.
Secondly, with Emigdio and Teresita having been married prior to the effectivity
of the Family Code in August 3, 1988, their property regime was the conjugal
partnership of gains.29 For purposes of the settlement of Emigdio’s estate, it
was unavoidable for Teresita to include his shares in the conjugal partnership
of gains. The party asserting that specific property acquired during that
property regime did not pertain to the conjugal partnership of gains carried the
burden of proof, and that party must prove the exclusive ownership by one of
them by clear, categorical, and convincing evidence. 30 In the absence of or
pending the presentation of such proof, the conjugal partnership of Emigdio
and Teresita must be provisionally liquidated to establish who the real owners
of the affected properties were,31 and which of the properties should form part
of the estate of Emigdio. The portions that pertained to the estate of Emigdio
must be included in the inventory.
Moreover, although the title over Lot 3353 was already registered in the name
of Mervir Realty, the RTC made findings that put that title in dispute. Civil Case
No. CEB-12692, a dispute that had involved the ownership of Lot 3353, was
resolved in favor of the estate of Emigdio, and
Transfer Certificate of Title No. 3252 covering Lot 3353 was still in Emigdio’s
name.1âwphi1 Indeed, the RTC noted in the order of March 14, 2001, or ten
years after his death, that Lot 3353 had remained registered in the name of
Emigdio.
Interestingly, Mervir Realty did not intervene at all in Civil Case No. CEB-
12692. Such lack of interest in Civil Case No. CEB-12692 was susceptible of
various interpretations, including one to the effect that the heirs of Emigdio
could have already threshed out their differences with the assistance of the trial
Page 68 of 77
court. This interpretation was probable considering that Mervir Realty, whose
business was managed by respondent Richard, was headed by Teresita
herself as its President. In other words, Mervir Realty appeared to be a family
corporation.
Also, the fact that the deed of absolute sale executed by Emigdio in favor of
Mervir Realty was a notarized instrument did not sufficiently justify the
exclusion from the inventory of the properties involved. A notarized deed of
sale only enjoyed the presumption of regularity in favor of its execution, but its
notarization did not per se guarantee the legal efficacy of the transaction under
the deed, and what the contents purported to be. The presumption of regularity
could be rebutted by clear and convincing evidence to the contrary. 32 As the
Court has observed in Suntay v. Court of Appeals:33
x x x. Though the notarization of the deed of sale in question vests in its favor
the presumption of regularity, it is not the intention nor the function of the
notary public to validate and make binding an instrument never, in the first
place, intended to have any binding legal effect upon the parties thereto. The
intention of the parties still and always is the primary consideration in
determining the true nature of a contract. (Bold emphasis supplied)
It should likewise be pointed out that the exchange of shares of stock of Mervir
Realty with the real properties owned by Emigdio would still have to be inquired
into. That Emigdio executed the deed of assignment two days prior to his death
was a circumstance that should put any interested party on his guard regarding
the exchange, considering that there was a finding about Emigdio having been
sick of cancer of the pancreas at the time.34 In this regard, whether the CA
correctly characterized the exchange as a form of an estate planning scheme
remained to be validated by the facts to be established in court.
The fact that the properties were already covered by Torrens titles in the name
of Mervir Realty could not be a valid basis for immediately excluding them from
the inventory in view of the circumstances admittedly surrounding the
execution of the deed of assignment. This is because:
The Torrens system is not a mode of acquiring titles to lands; it is merely a
system of registration of titles to lands.1âwphi1However, justice and equity
demand that the titleholder should not be made to bear the unfavorable effect
of the mistake or negligence of the State’s agents, in the absence of proof of
his complicity in a fraud or of manifest damage to third persons. The real
purpose of the Torrens system is to quiet title to land and put a stop forever to
any question as to the legality of the title, except claims that were noted in the
certificate at the time of registration or that may arise subsequent thereto.
Otherwise, the integrity of the Torrens system shall forever be sullied by the
ineptitude and inefficiency of land registration officials, who are ordinarily
presumed to have regularly performed their duties.35
Assuming that only seven titled lots were the subject of the deed of assignment
of January 10, 1991, such lots should still be included in the inventory to
enable the parties, by themselves, and with the assistance of the RTC itself, to
test and resolve the issue on the validity of the assignment. The limited
jurisdiction of the RTC as an intestate court might have constricted the
determination of the rights to the properties arising from that deed, 36 but it does
not prevent the RTC as intestate court from ordering the inclusion in the
inventory of the properties subject of that deed. This is because the RTC as
intestate court, albeit vested only with special and limited jurisdiction, was still
"deemed to have all the necessary powers to exercise such jurisdiction to
make it effective."37
Lastly, the inventory of the estate of Emigdio must be prepared and submitted
for the important purpose of resolving the difficult issues of collation and
advancement to the heirs. Article 1061 of the Civil Code required every
compulsory heir and the surviving spouse, herein Teresita herself, to "bring into
the mass of the estate any property or right which he (or she) may have
received from the decedent, during the lifetime of the latter, by way of donation,
or any other gratuitous title, in order that it may be computed in the
determination of the legitime of each heir, and in the account of the partition."
Section 2, Rule 90 of the Rules of Court also provided that any advancement
by the decedent on the legitime of an heir "may be heard and determined by
the court having jurisdiction of the estate proceedings, and the final order of the
court thereon shall be binding on the person raising the questions and on the
heir." Rule 90 thereby expanded the special and limited jurisdiction of the RTC
as an intestate court about the matters relating to the inventory of the estate of
the decedent by authorizing it to direct the inclusion of properties donated or
bestowed by gratuitous title to any compulsory heir by the decedent.38
The determination of which properties should be excluded from or included in
the inventory of estate properties was well within the authority and discretion of
the RTC as an intestate court. In making its determination, the RTC acted with
circumspection, and proceeded under the guiding policy that it was best to
include all properties in the possession of the administrator or were known to
the administrator to belong to Emigdio rather than to exclude properties that
could turn out in the end to be actually part of the estate. As long as the RTC
commits no patent grave abuse of discretion, its orders must be respected as
part of the regular performance of its judicial duty. Grave abuse of discretion
means either that the judicial or quasi-judicial power was exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, or that
the respondent judge, tribunal or board evaded a positive duty, or virtually
refused to perform the duty enjoined or to act in contemplation of law, such as
when such judge, tribunal or board exercising judicial or quasi-judicial powers
Page 69 of 77
acted in a capricious or whimsical manner as to be equivalent to lack of
jurisdiction.39
In light of the foregoing, the CA's conclusion of grave abuse of discretion on
the part of the RTC was unwarranted and erroneous.
WHEREFORE, the Court GRANTS the petition for review on certiorari;
REVERSES and SETS ASIDE the decision promulgated on May 15, 2002;
REINSTATES the orders issued on March 14, 2001 and May 18, 2001 by the
Regional Trial Court in Cebu; DIRECTS the Regional Trial Court in Cebu to
proceed with dispatch in Special Proceedings No. 3094-CEB entitled Intestate
Estate of the late Emigdio Mercado, Thelma Aranas, petitioner, and to resolve
the case; and ORDERS the respondents to pay the costs of suit.
G.R. No. 187524 August 5, 2015
SPOUSES MARIA BUTIONG and VILLAFRlA, DR. RUEL B. SPOUSES
MARIA FRANCISCO substituted by VILLAFRIA, Petitioners,
vs.
MA. GRACIA RINOZA PLAZO and MA. FE RINOZA ALARAS, Respondents.
Before the Court is a petition for review on certiorari under Rule 45 of the Rules
of Court seeking to reverse and set aside the Decision 1 and
Resolution, 2 dated March 13, 2009 and April 23, 2009·, respectively, of the
Court Appeals (CA) in CA-G.R. SP No. 107347, Which affirmed the
Judgment 3 dated October 1, 2001 of the Regional Trial Court (RTC) of
Nasugbu, Batangas, Branch 14, in Civil Case No. 217.
The antecedent facts are as follows:
On November 16, 1989, Pedro L. Rifioza died intestate, leaving several heirs,
including his_ children with his first wife, respondents Ma. Gracia R. Plazo and
Ma. Fe Alaras, as well as several properties including a resort covered by
Transfer Certificates of Title (TCT) No. 51354 and No. 51355, each with an
area of 351 square meters, and a family home, the land on which it stands is
covered by TCT Nos. 40807 and 40808, both located in Nasugbu, Batangas. 4
In their Amended Complaint for Judicial Partition with Annulment of Title and
Recovery of Possession 5 dated September 15, 1993, respondents alleged that
sometime in March 1991, they discovered that their co-heirs, Pedro’s second
wife, Benita"Tenorio and other children, had sold the subject properties to
petitioners, spouses Francisco Villafria and Maria Butiong, who are now
deceased and substituted by their son, Dr. Ruel B. Villafria, without their
knowledge and consent. When confronted about the sale, Benita
acknowledged the same, showing respondents a document she believed
evidenced receipt of her share in the sale, which, however, did not refer to any
sort of sale but to a previous loan obtoiined by Pedro and Benita from a
bank. 6 The document actually evidenced receipt from Banco Silangan of the
amount of ₱87, 352.62 releasing her and her late husband’s indebtedness
therefrom. 7 Upon inquiry, the Register of Deeds of Nasugbu informed
respondents that he has no record of any transaction involving the subject
properties, giving them certified true copies of the titles to the same. When
respondents went to the subject properties, they discovered that 4 out of the 8
cottages in the resort had been demolished. They were not, however, able to
enter as the premises were padlocked.
Subsequently, respondents learned that on July 18, 1991, a notice of an extra-
judicial settlement of estate of their late father was published in a tabloid called
Balita. Because of this, They caused the annotation of their adverse claims
over the subject properties before the Register of Deeds of Nasugbu and filed
their complaint praying, among others, for the annulment of all documents
conveying the subject properties to the petitioners and certificates of title
issued pursuant thereto. 8
In their Answer, 9 petitioners denied the allegations of the complaint on the
groun_d of lack of personal knowledge and good faith in acquiring the subject
properties. In the course of his testimony during trial, petitioner Francisco
further contended that what they purchased was only the resort. 10 He also
presented an Extra-Judicial Settlement with Renunciation, Repudiations and
Waiver of Rights and Sale which provides, among others, that respondents' co-
heirs sold the family home to the spouses Rolando and Ma. Cecilia Bondoc for
Pl million as well as a Deed of Sale whereby Benita sold the resort to
petitioners for ₱650, 000.00. 11
On October 1, 2001, the trial court nullified the transfer of the subject
Properties to petitioners and spouses Bondoc due to irregularities in the
Documents of conveyance offered by petitioner’s .as well as the circumstances
Surrounding the execution of the same. Specifically, the Extra-Judicial
Settlement was notarized by a notary public that was not duly commissioned
as such on the date it was executed. 12 The Deed of Sale was Undated, the
date of the acknowledgment therein was left blank, and the Typewritten name
"Pedro Rifioza, Husband" on the left side of the document Was not
signed. 13 The trial court also observed that both documents were Never
presented to the Office of the Register of Deeds for registration and That the
titles to the subject properties were still in the names of Pedro and His second
wife Benita. In addition, the supposed notaries and buyers of the Subject
properties were not even presented as witnesses whom supposedly witnessed
the signing and execution of the documents of conveyance. 14 On The basis
thereof, the triaI court ruled in favor of respondents, in its Judgment, the
pertinent portions of its fallo provide:
Page 70 of 77
WHEREFORE, foregoing premises considered, judgment is Hereby rendered
as follows:
xxxx
4. A) Declaring as a nullity the ~'Extra-Judicial Settlement with Renunciation,
Repudiation and Waiver of Rights and Sale" (Ex. "l ", Villafria) notarized on
December 23, 1991 by Notary Public Antonio G. Malonzo of Manila, Doc. No.
190, Page No. 20, Book No. IXII, Series of 1991. .
b) Declaring as a nullity the Deed of Absolute Sale (Ex. "2", Villafria),
purportedly executed by Benita T. Rifioza in favor of spouses
Francisco Villafria and Maria Butiong, purportedly notarized by one
Alfredo de Guzman marked Doc. No. 1136, Page No. 141, and Book.
No. XXX, Series of 1991.
c) Ordering the forfeiture of any and all improvements introduced By
defendants Francisco Villafria and Maria Butiong in the properties
Covered by TCT No. 40807, 40808, 51354 and 51355 of the Register
of Deeds for Nasugbu, Batangas. .
5. Ordering defendant Francisco Villafria and all persons, whose Occupancy
within the premises of the four- (4) parcels of land described in Par. 4-c above
is derived from the rights and interest of defendant Villafria, to vacate its
premises and to deliver possession thereof, and all improvements existing
thereon to plaintiffs, for and in behalf of the estate of decedent Pedro L.
Rifioza.
6. Declaring the plaintiffs and the defendants-heirs in the Amended Complaint
to be the legitimate heirs of decedent Pedro L. Rifioza, each in the capacity
and degree established, as well as their direct successors-in interest, and
ordering the defendant Registrar of Deeds to issue the co1Tesponding titles in
their names in the proportion established by law, pro in division, in TCT Nos.
40807, 40808, 51354, 51355 and 40353 (after restoration) within ten (10) days
from finality of this Decision, 4pon payment of lawful fees, except TCT No.
40353, which shall be exempt from all expenses for its restoration.
With no costs.
SO ORDERED. 15
On appeal, the CA affirmed the trial ‘court’s Judgment in its Decision 16 dated
October 31, 2006 in the following wise:
The person before whom the resort deed was acknowledged, Alfredo de
Guzman, was not commissioned as a notary public from 1989 to July 3, 1991,
the date the certification was issued. Such being the case, the resort deed is
not a public document and the presumption of regularity accorded to public
documents will not apply to the same. As laid down in Tigno, et al. v. Aquino, et
al.:
The validity of a notarial certification necessarily derives from the authority of
the notarial officer. If the notary public docs net have the capacity to notarize a
document, but does so anyway, then the document should be treated as A.
Unnotarized. The rule may strike as rather harsh, and perhaps may prove to be
prejudicial to parties in good faith relying on the proferred authority of the
notary public or the person pretending to be one. Still, to admit otherwise would
render merely officious the elaborate process devised by this Court in order
that a lawyer may receive a notarial commission. Without such a rule,
The notarization of a document by a duly appointed notary public will have the
same legal effect as one accomplished by a non-lawyer engaged in pretense.
The notarization of a document carries considerable legal effect. Notarization
of a private document converts such document into a public one, and renders it
admissible in court without further proof of its authenticity. Thus, notarization is
not an empty routine; to the contrary, it engages public interest in a substantial
degree and the protection of that interest requires preventing those who are not
qualified or authorized to act as notaries public from imposing upon the public
and the courts and administrative offices generally.
Parenthetically, the settlement/family home deed cannot be considered a
public document. This is because the following cast doubt on the document's
authenticity, to wit: J.
1.) The date of its execution was not indicated;
2.) The amount of consideration was superimposed;
3.) It was not presented to the Registry of Deeds of Nasugbu, Batangas for
annotation; and
4.) Not even the supposed notary public," Alfredo de Guzman, or the purported
buyer, the Spouses Rolando and Ma. Cecilia Bondoc, were presented as
witnesses. · Concededly, the absence of notarization in the resort deed and/or
the lacking details in the settlement/family home deed did not necessarily
invalidate the transactions evidenced by the said documents. However, since
the said deeds are private documents, perforce, their due execution and
authenticity becomes subject to the requirement of proof under the Rules on
Evidence, Section 20, Rule 132 of which provides: Sec. 20. Proof of private
Page 71 of 77
document. - Before any private. Document offered as authentic is received in
evidence, its due execution a"Q.d. authenticity must be proved either:
(a). By anyone who saw the document executed or written; or
(b) By evidence of the genuineness of the signature or handwriting of
the maker.
The Complaining Heirs insist that the settlement/family home and the resort
deed are void, as their signatures thereon are forgeries as opposed to the
Villafrias who profess the deeds' enforceability. After the Complaining Heirs
presented proofs in support of their claim that their signatures were forged, the
burden then fell upon the Villafrias to disprove the ~ame2 or conversely, to
prove the authenticity and due execution of the said deeds. The Villafrias failed
in this regard.
As forestalled, the Villafrias did not present as witnesses (a) the notary public
who purportedly notarized the questioned instrument, (b) the witnesses who
appear [Ed] in the instruments as eyewitnesses to the signing, or (c) an expert
to prove the authenticity and genuineness of all the signatures appearing on
the said instruments. Verily, the rule that, proper foundation must be laid for the
admission of documentary evidence; that is, the identity and authenticity of the
document must be reasonably established as a pre requisite to its admission,
was prudently observed by the lower court when it refused to admit the
settlement/family home and the resort deeds as their veracity are doubtful. 17
Aggrieved, petitioners, substituted by their son Ruel Villafria, filed a Motion for
Reconsideration dated November 24, 2006 raising the trial court’s lack of
jurisdiction. It was alleged that when the Complaint for Judicial Partition with
Annulment of Title and Recovery of Possession was filed, there was yet no
settlement of Pedro's estate, determination as to the nature thereof, nor was
there an identification of the number of legitimate heirs. As such, the trial court
ruled on the settlement of the intestate estate of Pedro in its ordinary·
jurisdiction when the action filed was for Judidal Partition. Considering that the
instant action is really one for settlement of intestate estate, the trial court,
sitting merely in its probate jurisdiction, exceeded its jurisdiction when it ruled
upon the issues of forgery and ownership. Thus, petitioner argued that. Said
ruling is void and has no effect for having been rendered without jurisdiction.
The Motion for Reconsideration was, however, denied by the appellate court
on February 26, 2007.
On appeal, this Court denied on June 20, 2007, petitioner's Petition for Review
on Certiorari for submitting a verification of the petition, a certificate of non-
forum shopping and an affidavit of service that failed to comply with the 2004
Rules on Notarial Practice regarding competent evidence of affiant' s
identities. 18 In its Resolution 19 dated September 26, 2007, this Court also
denied petitioner's Motion for Reconsideration in the absence of any
compelling reason to warrant a modification of the previous denial. Thus, the
June 20, 2007 Resolution became final and executors on October 31, 2007 as
certified by the Entry of Judgment issued by the Court. 20 On January 16, 2008,
the Court further denied petitioner' s motion for leave to admit a second motion
for reconsideration of its September 26, 2007 Resolution, considering that the
same is a prohibited pleading under Section 2, Rule 52, in relation to Section 4,
Rule 56 of the 1997 Rules of Civil Procedure, as amended. Furthennore,
petitioner's letter dated December 18, 2007 pleading the Court to take a
second. Look at his petition for review on certiorari and that a decision thereon
be rendered based purely on its merits was noted without action. 21
Unsatisfied, petitioner wrote a letter dated March 24, 2008 addressed to then
Chief Justice Reynato S. Puno praying that a decision on the case be rendered
based on the. Merits and not on formal requirements "as he stands to lose
everything his parents had left him just because the verification against non-
forum shopping is formally defective." However, in view of the Entry of
Judgment having been made on October 31, 2007, the Court likewise noted
said letter without action. 22
On November 27, 2008, the RTC issued an Order, issuing a Part Writ of
Execution of its October 1, 2001 Decision with respect to the portions disposing
of petitioner's claims as affirmed by the CA.
The foregoing notwithstanding, petitioner filed, on February 11, 200 a Petition
for Annulment of Judgment and· Order before the CA assailing October 1,
2001 Decision as well as the November 27, 2008 Order of the RTC on the
grounds of extrinsic fraud and lack of jurisdiction. In Decision dated March 13,
2009, however, the CA dismissed the petition a affirmed the rulings of the trial
court in the following wise: Although the assailed Decision of the Court a quo
has already become final and executory and in fact entry of judgment was
issued on 31 October 2007, supra, nevertheless, to put the issues to rest,·We
deem it apropos to tackle the same.
The Petitioner argues that the assailed Decision and Order of the Court a quo,
supra, should be annulled and set aside on the grounds of extrinsic fraud and
lack of jurisdiction.
We are not persuaded.
xxxx
Section 2 of the Rules as stated above provides that the annulment of a
judgment may "be based only on grounds of extrinsic fraud and lack of
Page 72 of 77
jurisdiction." In RP v. The Heirs of Sancho Magdato, the High Tribunal stressed
that: There is extrinsic fraud when "the unsuccessful party had been ·prevented
from exhibiting fully his case, by fraud or deception practiced on him by his
opponent, as by keeping him away from court, ... or where the defendant never
had knowledge of the suit, being kept in ignorance by the acts of the plaintiff; ...
"
Otherwise put, extrinsic or collateral fraud pertains to such fraud, which
prevents the aggrieved party ·from having a trial or presenting his case to the
court, or is used to procure the judgment without fair submission of the
controversy. This refers to acts intended to keep the unsuccessful party away
from the courts as when there is a false promise of compromise or when one is
kept in ignorance of the suit. The pivotal issues before us are (1) whether.
There was a time during the proceedings below that the Petitioners ever
prevented from exhibiting fully their case, by fraud or deception, practiced on
them by Respondents, and (2) whether the Petitioners were kept away from
the court or kept in ignorance by the acts of the Respondent?
We find nothing of that sort. Instead, what we deduced as We carefully delved.
Into the evidentiary facts surrounding the instant case as well as the
proceedings below as shown in the 36-page Decision of the Court a quo, is
that the Petitioners were given ample time to rebut the allegations of the
Respondents and had in fact addressed every detail of. Respondent's cause of
action against them. Thus, Petitioners' allegation of the Court a quo ‘s lack of
jurisdiction is misplaced.
Our pronouncement on the matter finds support in the explicit ruling of the
Supreme Court in Sps. Santos, et al. v. Sps. Lumbao, thus: 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 willingness to
abide by the resolution of the case which will bar said party from later on
impugning the court’s jurisdiction. ' In fine, under the circumstances obtaining in
this case the Petitioners are stopped from assailing the Court a quo 's lack of
jurisdiction. Too, We do not find merit in the Petitioners' second issue, supra.
As mentioned earlier, entry of judgment had already been made on the
assailed Decision and Order as early as 31 October 2007.
xxxx
It maybe that the doctrine of finality of judgments permits certain equitable
remedies such as a petition for annulment. But the I. Rules are clear. The
annulment by the Court of Appeals of judgments or final orders and resolutions
in civil actions of the Regional Trial Courts is resorted to only where the
ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available through no fault of the petitioner, supra.
If Petitioners lost their chance to avail themselves of the appropriate remedies
or appeal before the Supreme Court, that is their own look out. The High
Tribunal has emphatically pointed out in Mercado, et al. v. Security Bank
Corporation, thus:
A principle almost repeated to satiety is that "an action for annulment of
judgment cannot and is not a substitute for the lost remedy of·appeal." A party
must have first availed of appeal, a motion for new trial or a petition for relief
before an action for annulment can prosper. Its obvious rationale is to prevent
the party from benefiting from his inaction or negligence. Also, the action for
annulment of judgment must be based either on (a) extrinsic fraud or (b) lack of
jurisdiction or denial of due process. Having failed to avail of the remedies and
there being 'a Clear showing that neither of the grounds was present, the
petition must be dismissed. Only a disgruntled litigant would find such legal
disposition unacceptable. 23 When the appellate court denied Petitioner’s
Motion for Reconsideration in its Resolution dated April 23, 2009, petitioner
filed the instant Petition for Review on Certiorari on June 10, 2009, invoking the
following ground:
I.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT
RULING THAT THE REGIONAL TRIAL COURT, BRANCH 14, NASUGBU,
BATANGAS, ACTED WITHOUT JURISDCITION IN ENTERTAINING THE
SPECIAL PROCEEDING FOR THE SETTLEMENT OF ESTATE OF PEDRO
RINOZA AND THE CIVIL ACTION FOR ANNULMENT OF TITLE OF THE
HEIRS AND THIRD PERSONS IN ONE PROCEEDING. 24
Petitioner asserts that while the complaint filed by respondents was captioned
as "Judicial Partition with Annulment of Title and Recovery of Possession," the
allegations therein show that the cause of action is actually one for settlement
of estate of decedent Pedro. Considering that settlement of estate is a special
proceeding cognizable by a probate court of limited jurisdiction while judicial
partition with annulment of title and recovery of possession are ordinary civil
actions cognizable by a court of general jurisdiction, the trial court exceeded its
jurisdiction in entertaining the latter while it was sitting merely in its probate
jurisdiction. This is in view of the prohibition found in the Rules on the joiner of
special civil actions and ordinary civil actions. 25 Thus, petitioner argued that
the ruling of the trial court is void and has no effect for having been rendered in
without jurisdiction.
Petitioner also reiterates the arguments raised before the appellate court that
since the finding of forgery relates only to the signature of respondents and not
to their co-heirs, who assented to the conveyance, the transaction should be
considered valid as to them. Petitioner also denies the indings of the courts
Page 73 of 77
below that his parents are builders in bad faith for they only took possession of
the subject properties after the execution of the transfer documents and after
they paid the consideration on the sale.
The petition is bereft of merit. Petitioner maintains that since. Respondents’
complaint alleged the following causes of action, the same is actually one for
settlement of estate and not of judicial partition: FIRST CAUSE OF ACTION
1. That Pedro L. Rifi.oza, Filipino and resident of Nasugbu, Batangas
at the time of his death, died intestate on November 16, 1989. Copy of
his death certificate is hereto attached as Annex "A";
2. That Plaintiffs together with the Defendants enumerated from
paragraph 2-A to 2-J are the only known heirs of the above-mentioned
decedent. The plaintiffs and the Defendants Rolando, Rafael, Antonio,
Angelita, Loma all surnamed Rifioza, and Myrna R. Limon or Myrna R.
Rogador, Epifania Belo and Ma. Theresa R. Demafelix are the
decedent’s legitimate children with his first wife, while Benita Tenorio
Rifioza, is the decedent’s widow and Bernadette Rifioza, the
decedent's daughter with said widow. As such, said parties are co-
owners by virtue of an intestate inheritance from the decedent, of the
properties enumerated in the succeeding paragraph; ‘
3. That the decedent left the following real properties all located in
Nasugbu, Batangas:
xxxx
16. That the estate of decedent Pedro L. Rifioza has no known legal
indebtedness;
17. That said estate remains undivided up to this date and it will be to
the best interest of all heirs that it be partitioned judicially. 26.
Petitioner is mistaken. It is true that some of respondents' causes of action
pertaining to the properties left behind by the decedent Pedro, his known heirs,
and the nature and extent of their interests thereon may fall under an action for
settlement of estate. However, a complete reading of the complaint would
readily show that, based on the nature of the suit, the llegations therein, and
the relief’s prayed for, the action, is clearly one for udicial partition with
annulment of title and recovery of possession.
Section 1, Rule 74 of the Rules of Court proyides:
 RULE 74
Summary Settlement of Estate
Section 1. Extrajudicial settlement by agreement between heirs. - If the
decedent left no will and no debts and the heirs are all of age5 or the minors
are represented by their judicial or legal representatives duly authorized for the
purpose, the parties may without securing letters of administration, divide the
estate among themselves as they see fit by means of a public instrument filed
in the office of the register of deeds, and should they disagree, they may do so
in an ordinary action of partition. If there is only one heir, he may adjudicate to
himself the entire estate by means of an affidavit filled in the office of the
register of deeds. The parties to an Extrajudicial settlement, whether by public
instrument or by stipulation in a pending action for partition, or the sole heir
who adjudicates the entire estate to himself by means of an affidavit shall file,
simultaneously with and as a condition precedent to the filing of the public
instrument, or stipulation in the action for partition, or of the affidavit in the
office of the register of deeds, a bond with the said register of deeds, in an
amount equivalent to the value of the personal property involved as certified to
under oath by the parties concerned and conditioned upon the payment of any
just claim that may be filed under section 4 of this rule. It shall be presumed
that the decedent left no debts if no creditor files a petition for letters of
administration within two (2) years after the death of the decedent.
The fact of the Extrajudicial settlement or administration shall be Published in a
newspaper of general circulation in the manner provided in the next
succeeding section; but no Extrajudicial settlement shall be binding upon any
person who has not participated therein or had no notice thereof. 27
In this relation, Section 1, Rule 69 of the Rules of Court provides:
Section 1. Complaint in action for partition of real estate. - A person having the
right to compel the partition of real estate may do so as provided in this Rule,
setting forth in his complaint the nature and extent of his title and an adequate
description of the real estate of which partition is demanded and joining as
defendants all other persons interested in the property. 28
As can be gleaned from the foregoing provisions, the allegations of
respondents in their complaint are but customary, in fact, mandatory, to a
complaint for partition of real estate. Particularly, the complaint alleged: (1) that
Pedro died intestate; (2) that respondents, together with their co-heirs, are all
of legal age, with the exception of one who is represented by a judicial
representative duly authorized for the purpose; (3) that the heirs enumerated
are the only known heirs of Pedro; (4) that there is an account and description
of all real properties left by Pedro; (5) that Pedro's estate has no known
indebtedness; and (6) that respondents, as rightful heirs to the decedent’s
Page 74 of 77
estate, pray for the partition of the same in accordance with the laws of
intestacy. It is clear, therefore, that based on the allegations of the complaint,
the case is one for judicial partition. That the complaint alleged causes of
action identifying the heirs of the decedent, properties of the estate, and their
rights thereto, does not perforce make it an action for settlement of estate.
It must be recalled that the general rule is that when a person dies intestate, or,
if testate, failed to name an executor in his will or the executor o named is
incompetent, or refuses the trust, or. Fails to furnish the bond equipped by the
Rules of Court, then the decedent's estate shall be judicially administered and
the competent court shall appoint a qualified administrator the order
established in Section 6 of Rule 78 of the Rules of Court. 29 An exception to
this rule, however, is found in the aforequoted Section 1 of Rule 4 wherein the
heirs of a decedent, who left no will and no debts due from is estate, may
divide the estate either extrajudicially or in an ordinary action or partition
without submitting the same for judicial administration nor applying for the
appointment of an administrator by the court. 30The reasons that where the
deceased dies without pending obligations, there is no necessity for the
appointment of an administrator to administer the. Estate for hem and to
deprive the real owners of their possession to which they are immediately
entitled. 31
In this case, it was expressly alleged in the complaint, and was not isputed,
that Pedro died without a will, leaving his estate without any ending obligations.
Thus, contrary to petitioner’s contention, respondents were under no legal
obligation to submit the subject properties of the estate of a special proceeding
for settlement of intestate estate, and are, in fact, encouraged to have the
same partitioned, judicially or extrajudicially, by ereira v. Court of Appeals: 32
Section 1, Rule 74 of the Revised Rules of Court, however, does not preclude
the heirs from instituting administration proceedings, even if the estate has no·
debts or obligations, if they do not desire to resort for good reasons to an
ordinary action for partition. While Section 1 allows the heirs to divide the
estate among themselves as they may see fit, qr. to resort to an ordinary action
for partition, the said provision does not compel them to do so if they have
good reasons to take a different course of action. It should be noted that
recourse to an administration proceeding even if the estate has no debts is
sanctioned only if the heirs have good reasons for not resorting to an action for
partition. Where partition is possible, either in or out of court, the estate should
not be burdened with an administration proceeding without good and
compelling reasons.
Thus, it has been repeatedly 4eld that when a person dies without leaving
pending obligations to be paid, his heirs, whether of age or not, are not bound
to submit the property to a judicial administration, which is always long and
costly, or to apply for the appointment of an administrator by the Court. It has
been uniformly held that in such case the judicial administration and the
appointment of an administrator are superfluous and unnecessary
proceedings. 33
Thus, respondents committed no error in. filing an action for judicial partition
instead of a special proceeding for the settlement of estate as law expressly
permits the same.1avvphi1 That the complaint contained allegations inherent in
an action for settlement of estate does not. Mean that there was a prohibited
joined of causes of action for questions as to the estate's properties as well as
a determination of the heirs, their status as such, and the nature and extent of
their titles to the estate, may also be properly ventilated in partition proceedings
alone.34 In fact, a complete inventory of the estate may likewise be done during
the partition proceedings, especially since the estate has no debts.~5 Indeed,
where the more expeditious remedy 9f partition is available to the heirs, then
they may not be compelled to submit to administration proceedings, dispensing
of the risks of delay and of the properties being dissipated. 36
Moreover, the fact that respondents' complaint also prayed for the annulment
of title and recovery of possession does not strip the trial court off of its
jurisdiction to hear and decide the case. Asking for the annulment of certain
transfers of property could very well be achieved in an action for partition, 37 as
can be seen in cases where 1-ourts determine the parties' rights arising from
complaints asking not only for the partition of estates but also for the
annulment of titles and recovery of ownership and possession of property. 38 In
fact, in Bagayas v. Bagayas, 39·wherein a complaint for annulment of sale and
partition was dismissed by the trial court due to the impropriety of an action for
annulment as it constituted a collateral attack on the certificates of title of the
respondents therein, this Court found the dismissal to be improper in the
following manner:
In Lacbayan v. Samoy, Jr. (Lacbayan) which is an action. For partition
premised on the existence or non-existence of co-ownership between the
parties, the Court categorically pronounced that a resolution on the issue of
ownership does not subject the Torrens title issued over the disputed realties
'to a collateral attack. It must be borne in mind that what cannot be collaterally
attacked is the certificate of title and not the title itself. As pronounced in
Lacbayan:
There is no dispute that a Torrens certificate of title cannot be collaterally
attacked, but that rule is not material to the case at bar. What cannot be
collaterally attacked is the certificate of title and not the title itself. The'
certificate referred to is that -document issued by the Register of Deeds known
as the TCT. In contrast, the title referred to by law means ownership, which is,
more often than not, represented by that document. Petitioner c.pparently
confuses title with the certificate of title. Title as a concept of ownership should
Page 75 of 77
not be confused with the certificate of title as evidence of such ownership
although both are interchangeably used. (Emphases supplied)
Thus, the RTC erroneously dismissed petitioner's petition for annulment of sale
on the ground that it constituted a collateral attack since she was actually
assailing Rogelio and Orlando's title to the subject lands and not any Torrens
certificate oftitle over the same.
Indeed, an action for partition does not preclude the settlement of the issue of
ownership. In fact, the determination as to the existence of the same is
necessary in the resolution of an action for partition, as held in Municipality of
Bifzan·v. Garcia: 40
The first phase of a partition and/or accounting suit is taken up with the
determination of whether or not a co-ownership in fact exists, and a partition is
proper (i.e., not otherwise legally proscribed) and may be made by voluntary
agreement of all the parties interested in the property. This phase may end with
a declaration that plaintiff is not entitled to have a partition either because a co-
ownership does not exist, or partition is_ legally prohibited. It may end, on the
other hand, with an adjudgment that a co-ownership does in truth exist,
partition is proper in the premises and an accounting of rents and profits
received by the defendant from the real estate in question is in order. x x x
The second phase commences when it appears that "the parties are unable to
agree upon the partition" directed by the court. In that event [,] partition shall be
done for the parties by the [c] ourt with the assistance of not more than three
(3) commissioners. This second stage may well also deal with the rendition of
the accounting itself and its approval by the [c] ourt after the. Parties have been
accorded opportunity to be heard Thereon, and an award for the recovery by
the party or parties thereto entitled of their just share in the rents and profits of
the real estate in question. xx x. 41 ·
An action for partition, therefore, is premised on the existence or non-existence
of co-ownership between the parties. 42 Unless and until the issue of co-
ownership is definitively resolved, it would be premature to effect a partition of
an estate. 43
In view of the foregoing, petitioner' s argument that the trial court acted without
jurisdiction in entertaining the action of settlement of estate and annulment of
title in a single proceeding is clearly erroneous for the instant complaint is
precisely one for judicial partition with annulment of title and recovery of
possession, filed within the confines of applicable law and jurisprudence. Under
Section 144 of Republic Act No. 7691 (RA 7691),45 amending Batas Pambansa
Big. 129, the RTC shall exercise exclusive original jurisdiction over all civil
actions in which the subject of the litigation is incapable of pecuniary
estimation. Since the action herein was not merely for partition and recovery of
ownership but also for annulment of title and documents, the action is
incapable of pecuniary estimation and thus cognizable by the RTC. Hence,
considering that the trial court clearly had jurisdiction in rendering its decision,
the instant petition for annulment of judgment must necessarily fail.
Note that even if the instant action was one for annulment of title alone, without
the prayer for judicial partition, the requirement of instituting a separate special
proceeding for the determination of the status and rights of the respondents as
putative heirs may be dispensed with, in light of the fact that the parties had
voluntarily submitted the issue to the trial court and had already presented
evidence regarding the issue of heirship. 46 In Portugal v. Portugal-
Beltran, 47 the Court explained:
In the case at bar, respondent, believing rightly or wrongly that she was the
sole heir to Portugal's estate, executed on February 15, 1988 the questioned
Affidavit of Adjudication under the second sentence of Rule 74, Section 1 of the
Revised Rules of Court. Said rule is an exception to the general rule that when
a person dies leaving a property, it should be judicially administered and the
competent court should appoint a qualified administrator, in the order
established in Sec. 6, Rule 78 in case the deceased left no will, or in case he
did, he failed to name an executor therein.
xxxx
It appearing, however, that in the present case the only property of the
intestate estate of Portugal is the Caloocan parcel of land, to still subject it,
under the circumstances of the case, to a special proceeding which could be
long, hence, not expeditious, just to establish the status of petitioners as heirs
is not only impractical; it is burdensome to the estate with the costs and
expenses of an administration proceeding. And it is superfluous in light of the
fact that the parties to the evil case - subject of the present case, could and
had already in fact presented evidence before the trial court which assumed
jurisdiction over the case upon the issues it defined during pre-trial.
In fine, under the circumstances of the present case, there being no compelling
reason to still subject · Portugal’s estate to administration proceedings since a
determination of petitioners’ status as heirs could be achieved in the civil case
filed by petitioners, the trial court should proceed to evaluate the evidence
presented by the parties during the trial and render a decision thereon upon the
issues it defined during pre-trial, x x x. 48
Thus, in view of the clarity of respondents' complaint and the causes of action
alleged therein, as well as the fact that the trial court, in arriving at its decision,
gave petitioner more than ample opportunity to advance his claims, petitioner
Page 76 of 77
cannot now be permitted to allege lack of jurisdiction just because the
judgment rendered was adverse to them. To repeat, the action filed herein is
one for judicial partition and not for settlement of intestate estate.
Consequently, that respondents also prayed for the annulment of title and
recovery of possession in the same proceeding does not strip the court off of
its jurisdiction for asking for 'the annulment of certain transfers of property
could very well be achieved in an action for partition.
As for petitioner's contention that the sale must be considered valid as to the
heirs who assented to the conveyance as well as their allegation of good faith,
this Court does not find any compelling reason to deviate from the ruling of the
appellate court. As sufficiently found by both courts below, the authenticity and
due execution of the documents on which petitioner’s claims are based were
inadequately proven. They were undated, forged, and acknowledged before a
notary public who was not commissioned as such on the date they were
executed. They were never presented to the Register of Deeds for registration.
Neither were the supposed notaries and buyers of the subject properties
presented as witnesses.
While it may be argued that Benita, one of the co-heirs to the estate, actually
acknowledged the sale of the resort, the circumstances surrounding the same
militate against the fact of its occurrence. Not only was the Deed of Sale
supposedly executed by Benita undated and unsigned by Pedro, but the
document she presented purportedly evidencing her receipt of her share in the
sale, did not refer to any sort of sale but to a previous loan obtained by Pedro
and Benita from a bank.
Moreover, credence must be given on the appellate court’s observations as to
petitioners' actuations insofar as the transactions alleged herein are
concerned. First, they were seemingly uncertain as to the number and/or
identity of the properties bought by them. 49 In their Answer, they gave the
impression 'that· they bought both the resort and the family home and yet,
during trial, Francisco Villafria claimed they only bought the resort. In fact, it
was only then that they presented the subject Extra Judicial Settlement and
Deed of Sale. 50 Second, they never presented any other document which
w0uld evidence their actual payment of consideration to the selling
heirs. 51 Third, in spite of the. Blatant legal infirmities of the subject documents
of conveyance, petitioners still took possession of the properties, demolished
several cottages, and introduced permanent improvements thereon.
In all, the Court agrees with the appellate court: that petitioners failed to
adequately substantiate, with convincing, credible and independently verifiable
proof, their claim that they had, in fact, purchased the subject properties. The
circumstances surrounding the purported transfers cast doubt on whether they
actually took place. In substantiating their claim, petitioners relied solely on the
Extra-Judicial Settlement and Deed of Sale, who utterly failed to prove their
authenticity and due execution. They cannot, therefore, be permitted to claim.
Absolute ownership of the subject lands based on the same.

Neither can they be considered as innocent purchasers for value and builders
in good faith. Good faith consists in the belief of title builder that the land the
latter is building on is one's own without knowledge of any defect or flaw in
one's. Title. 52 However, in view of .the manifest defects in the instruments
conveying their titles, petitioners should have been placed on guard. Yet, they
still demolished several cottages and constructed improvement on the
properties. Thus, their claim of. Good faith cannot be given credence.

Indeed, a judgment which has acquired finality becomes immutable and

unalterable, hence, may no longer be modified in any respect except to correct
clerical errors or mistakes, all the issues between the parties being deemed
resolved and. laid to rest. 53 it is a fundamental principle in our judicial system
and essential to an effective and efficient administration of justice that, once a
judgment has become final, the winning party be, not through a mere
subterfuge, deprived of the fruits of the verdict. 54 Exceptions to the
immutability of final judgment is allowed only under the most extraordinary of
circumstances. 55 Yet, when petitioner is given more than • ample opportunity
to be heard, unbridled access to the appellate courts, as well as unbiased
judgments rendered after a consideration of evidence presented by the parties,
as in the case at hand, the Court shall refrain from reversing the rulings of the
courts below in the absence of any showing that the same were rendered with
fraud or lack of jurisdiction. ·

WHEREFORE, premises considered, .the instant petition is DENIED. The

Decision and Resolution, dated March 13, 2009 and April 23, 2009,
respectively, of the Court Appeals for CA-G.R. SP No. 107347, which affirmed
the Judgment dated October 1, 2001 of the Regional Trial Court of Nasugbu,
Batangas, Branch 14, in Civil Case No. 217, insofar as it conce1ns the resort
covered by Transfer Certificates of Title No. 513 54 and No. 51355, and family
home covered by TCT No. 40807 and 40808, are AFFIRMED.

SO ORDERED.

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