Settlement of the Estate 2019-2020
EDGAR SAN LUIS, petitioner, vs. FELICIDAD SAN LUIS, respondent.
G.R. No. 133743. February 6, 2007
FACTS: 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. The 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.
The second was Merry Lee Corwin, with whom he had a son, Tobias; and
Felicidad San Luis, then surnamed Sagalongos, with whom he had no
children with respondent but lived with her for 18 years from the time of
their marriage up to his death.
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 before the Regional Trial Court of
Makati City, Branch 146.
Thereater, the heirs of Virginia Sulit filed a motion to dismiss on the
grounds of improper venue and failure to state a cause of action. But the
trial court issued an order denying the two motions to dismiss. 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. The Court of Appeals reversed and set
aside the orders of the trial court, and, hence, the case before the
Supreme Court.
Issue: Whether respondent has legal capacity to file the subject petition
for letters of administration
Held:
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 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.
Morover, the Supreme Court found 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.
The 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. It was also REMANDED to the trial
court for further proceedings.
Garcia-Quanzon vs Belen
G.R. No. 189121 July 31, 2013
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
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.
Elise claims that she is the natural child of Eliseo having been conceived
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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. 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 issue was appealed to the CA but It was affirmed by the
appellate court. Thus this petition to the SC.
Issue:
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. III. THE COURT OF APPEALS OVERLOOKED THE FACT
THAT ELISE QUIAZON HAS NOT SHOWN ANY INTEREST
IN THE PETITION FOR LETTERS OF ADMINISTRATION.
HELD: 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
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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’ 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.
Agtarap vs Agtarap
G.R. No. 177099 June 08, 2011
FACTS: Joaquin Agtarap 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, and second with Caridad
Garcia. 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, Joseph, and Teresa). Joaquin married Caridad on
February 9, 1926. They also had three children—Eduardo, Sebastian, and
Mercedes (survived by her daughter Cecile).
Eduardo asked to be appointed administrator. He was latter appointed by
the probate court and was issued with letters of 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.
The RTC issued an Order of Partition, holding that considering that the
bulk of the estate property were acquired during the existence of the
second marriage. 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. The CA settled,
together with the settlement of the estate of Joaquin, the estates of Lucia,
Jesus, Jose, Mercedes, Gloria, and Milagros.
ISSUE: Whether or not the RTC, acting as an intestate court with limited
jurisdiction, is vested with the power and authority to determine questions
of ownership.
RESOLUTION OF ISSUE: Yes. 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. The patent
rationale for this rule is that such court merely exercises special and
limited jurisdiction.
The Court holds, however, 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
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properties are conjugal is but collateral to the probate court’s jurisdiction to
settle the estate of Joaquin.
DOCTRINE: The intestate court’s 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.
SUNTAY III vs Cojuangco-Suntay
G.R. No. 183053 October 10, 2012
FACTS: 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.
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.
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 to which Federico opposed. 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
were legitimate children of Emilio I, who can all represent him in the estate
of their legitimate grandmother, the decedent, Cristina.
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.
On 13 November 2000, Federico died.
In G.R. No. 183053 dated 16 June 2010, the Supreme Court
rendered the decision directing the issuance of joint letters of
administration to both petitioner Emilio A.M. Suntay III (Emilio III) and
respondent.
ISSUE: Whether or not the petitioner and the respondent should continue
being co-administrators of the estate.
HELD: No. The paramount consideration in the appointment of an
administrator over the estate of a decedent is the prospective
administrator’s interest in the estate. 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
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the consequences of waste, improvidence or mismanagement, have the
highest interest and most influential motive to administer the estate
correctly. 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. Likewise, a surviving
spouse is a compulsory heir of a decedent 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."
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, 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.
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 and depends on the facts and the attendant circumstances of the
case.
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. 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.
DOCTRINE: The paramount consideration in the appointment of an
administrator over the estate of a decedent is the prospective
administrator’s interest in the estate. 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.
Lee vs RTC of QC
G.R. No. 146006 February 23, 2004
FACTS: Dr. Juvencio P. Ortañez incorporated the Philippine International
Life Insurance Company, Inc. 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. Rafael Ortañez, one of Dr. Ortañez’s
legitimate children, filed before the Regional Trial Court of Quezon City a
petition for letters of administration of the intestate estate of Dr. Ortañez.
Private respondent Ma. Divina Ortañez-Enderes, one of the illegitimate
children of Dr. Ortañez, and her siblings filed an opposition to the petition
for letters of administration.
Judge Ernani Cruz Paño, then presiding judge of Branch 85,
appointed Rafael and Jose Ortañez joint special administrators of their
father’s estate. They submitted an inventory of the estate of their father
which included 2,029 shares of stock in Philippine International Life
Insurance Company, representing 50.725% of the company’s outstanding
capital stock.
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Juliana Ortañez, the decedent’s wife, and Special Administrator
Jose Ortañez, both claiming that they owned their 1,014 and 1,011
Philinterlife shares of stock respectively, sold their shares with right to
repurchase in favor of petitioner Filipino Loan Assistance Group (FLAG),
represented by its president Jose Lee. Juliana and Jose both failed to
repurchase their shares of stock within the stipulated period, thus
ownership thereof was consolidated by FLAG in its name.
It appears that several years before, Juliana and her two children
Special Administrators Rafael and Jose entered into a memorandum of
agreement for the extrajudicial settlement of estate of Dr. Ortañez,
partitioning the estate among themselves. Ma. Divina filed a motion for
appointment of special administrator of Philinterlife shares of stock, which
was granted by the intestate court. Thereafter, she filed motions to declare
void ab initio the memorandum of agreement and to declare the partial
nullity of the extrajudicial settlement of the decedent’s estate. The Court
declared the memorandum of agreement executed by Juliana, Rafael, and
Jose as partially void ab initio insofar as the transfer/waiver/renunciation of
the Philinterlife shares of stock are concerned.
Meanwhile, Jose Lee and Alma Aggabao, with the rest of the
FLAG-controlled board of director, increased the authorized capital stock
of Philinterlife, diluting in the process the 50.725% controlling interest of
Dr. Ortañez, in the insurance company. Ma. Divina filed an action at the
Securities and Exchange Commission (SEC) against Lee and other
members of FLAG-controlled board of Philinterlife. Thereafter, various
cases were filed by Jose Lee and Juliana Ortañez and her sons against
Ma. Divina in the SEC and civil courts. Somehow, all these cases were
connected to the core dispute on the legality of sale of decedent Dr.
Ortañez’s Philinterlife shares of stock to FLAG.
ISSUE: Whether or not the sale of the shares of stock to FLAG by
petitioners is valid.
HELD: NO. It is clear that Juliana, and her three sons, 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
was invalid, the subsequent sale thereof by Juliana and Jose to FLAG,
without court approval, was likewise void.
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 heir may only sell his ideal or
undivided share in the estate, not nay specific property therein. In the
present case, Juliana and Jose sold specific properties of the estate (1,014
and 1,011 shares of stock in Philinterlife) in favor of FLAG.
Juliana and Jose 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.
DOCTRINE/S: 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.
HEIRS of Hilario Ruiz vs Edmond Ruiz
[G.R. No. 118671. January 29, 1996]
FACTS: 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.
On June 27, 1987, Hilario M. Ruiz 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.
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On April 12, 1988, Hilario Ruiz died. Thereafter, the cash component of the
estate was distributed among Edmond Ruiz and private respondents in
accordance with the decedents will. But Edmond did not take any action
for the probate of his father’s holographic will.
Four years after the testator’s death, private respondent Maria Pilar Ruiz
Montes filed before the Regional Trial Court, Branch 156, Pasig, a petition
for the probate. 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 Valle Verde IV, Pasig which the testator bequeathed to Maria
Cathryn, Candice Albertine and Maria Angeline - 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 totaling
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.
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
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 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 testators 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 petitioners motion for
release of funds but granted respondent Montes motion in view of
petitioners lack of opposition. It thus ordered the release of the rent
payments to the decedents 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 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 Valle Verde property had been renewed for another
year.
Despite petitioners 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 testators 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.
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 courts order in a decision
dated November 10, 1994 and a resolution dated January 5, 1995.
Hence, this petition.
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ISSUE/S: Whether or not the CA erred in granting support for the
grandchildren and allowing the release of the titles before the obligations
of the estate has been settled.
HELD: Grandchildren are not entitled to provisional support from the funds
of the decedents estate. The law clearly limits the allowance to widow and
children and does not extend it to the deceased grandchildren, regardless
of their minority or incapacity. It was error, therefore, for the appellate court
to sustain the probate courts 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.
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 estate tax is one of those obligations that
must be paid before distribution of 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.
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,
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.
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. Neither 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. 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. 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 subject to a determination by
the court as to their veracity, propriety and justness.
The decision and resolution of the Court of Appeals affirming the order of
the Regional Trial Court, Branch 156, Pasig are affirmed with the
modification that those portions of the order granting an allowance to the
testators grandchildren and ordering the release of the titles to the private
respondents upon notice to creditors are annulled and set aside.
DOCTRINE: Only the widow and children of the decedent is covered by
support. Properties under probate should not be distributed to the heirs
unless after all debts and obligations against the estate is settled.
Union Bank vs Santibanez
G.R. No. 149926. February 23, 2005
FACTS: On May 31, 1980, the First Countryside Credit Corporation
(FCCC) and Efraim Santibañez entered into a loan agreement in the
amount of P128,000.00. The amount was intended for the payment of one
(1) unit Ford 6600 Agricultural 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. On Dec. 1980, FCCC and
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 Settlement of the Estate 2019-2020
Efraim entered into another loan agreement for the payment of another
unit of Ford 6600 and one unit of a Rotamotor. Again, Efraim and Edmund
executed a promissory note and a Continuing Guaranty Agreement for the
later loan. In 1981, Efraim died, leaving a holographic will. Testate
proceedings commenced before the RTC of Iloilo City. Edmund was
appointed as the special administrator of the estate. During the pendency
of the testate proceedings, the surviving heirs, Edmund and his sister
Florence, executed a Joint Agreement, wherein they agreed to divide
between themselves and take possession of the three (3) tractors: (2)
tractors for Edmund and (1) for Florence. Each of them was to assume the
indebtedness of their late father to FCCC, corresponding to the tractor
respectively taken by them. In the meantime, a Deed of Assignment with
Assumption of Liabilities was executed by and between FCCC and Union
Bank, wherein the FCCC assigned all its assets and liabilitiesto Union
Bank.
Demand letters were sent by Union Bank to Edmund, but the latter refused
to pay. Thus, on February 5, 1988, Union Bank filed a Complaint for sum
of money against the heirs of Efraim Santibañez, Edmund and Florence,
before the RTC of Makati City. 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. Florence filed her Answer 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 Union Bank under the joint agreement.
Union Bank asserts that the obligation of the deceased had passed to his
legitimate heirs (Edmund and Florence) as provided in Article 774 of the
Civil Code; and that the unconditional signing of the joint agreement
estopped Florence, and that she cannot deny her liability under the said
document.
In her comment to the petition, Florence maintains that Union Bank 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. 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.
ISSUE:
1.W/N the claim of Union Bank should have been filed with the
probate court before which the testate estate of the late Efraim Santibañez
was pending.
2.W/N the agreement between Edmund and Florence (which was
in effect, a partition of hte estate) was void considering that it had not been
approved by the probate court. W/N there can be a valid partition among
the heirs before the will is probated.
HELD: In our jurisdiction, the rule is that there can be no valid partition
among the heirs until after the will has been probated. In the present case,
Efraim left a holographic will which contained the provision which reads as
follows:
In our jurisdiction, the rule is that there can be no valid partition among the
heirs until after the will has been probated. In the present case, Efraim left
a holographic will which contained 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.
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 agreement executed by Edmund and Florence, partitioning the
tractors among themselves, is invalid, specially so since at the time of its
execution, there was already a pending proceeding for the probate of their
late father’s holographic will covering the said tractors.
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The Court notes that the loan was contracted by the decedent. The bank,
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.
The filing of a money claim against the decedent’s estate in the probate
court is mandatory. 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.
Perusing the records of the case, nothing therein could hold Florence
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.
Doctrine: 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. The said court is primarily concerned with the administration,
liquidation and distribution of the estate.
Heirs of Maglasang vs MBC
G.R. No. 171206 September 23, 2013
FACTS: On June 16, 1975, spouses Flaviano and Salud Maglasang
(Sps.Maglasang) obtained a credit line from respondent5 in the amount of
₱350,000.00 which was secured by a real estate mortgage6 executed over
seven of their properties7 located in Ormoc City and the Municipality of
Kananga, Province of Leyte.8 They availed of their credit line by securing
loans in the amounts of ₱209,790.50 and ₱139,805.83 on October 24,
1975and March 15, 1976, respectively,9 both of which becoming due and
demandable within a period of one year. Further, the parties agreed that
the said loans would earn interest at 12% per annum (p.a.) and an
additional 4% penalty would be charged upon default.
After Flaviano Maglasang (Flaviano) died intestate, Edgar Maglasang
(Edgar) was appointed as attoryney in fact by the surviving heirs. Thus, on
March 30, 1977, Edgar filed a verified petition for letters of administration
of the intestate estate of Flaviano before the then Court of First Instance of
Leyte, Ormoc City, Branch 5 (probate court), docketed as Sp. Proc. No.
1604-0.13 On August 9, 1977, the probate court issued an Order 14 granting
the petition, thereby appointing Edgar as the administrator 15 of Flaviano’s
estate.
In view of the issuance of letters of administration, the probate court, on
August 30, 1977, issued a Notice to Creditors16 for the filing of money
claims against Flaviano’s estate. Accordingly, as one of the creditors of
Flaviano, respondent notified17 the probate court of its claim in the amount
of ₱382,753.19 as of October 11, 1978, exclusive of interests and charges.
In spite of all the exhaustion of the properties, it was not enough to cover
the debt and thus the respondent filed a suit to recover the deficiency
amount of ₱250,601.05 as of May 31, 1981 against the estate of Flaviano,
his widow Salud and petitioners, docketed as Civil Case No. 1998-0. The
RTC ruled in favor of the bank ordering them to pay respondent, jointly and
severally, the amount of ₱434,742.36 with interest at the rate of 12% p.a.,
plus a 4% penalty charge, reckoned from September 5,1984 until fully
paid. The case was raised to CA for appeal, the CA affirmed the decision
of the RTC. Thus this issue to the SC.
Issue: The essential issue in this case is whether or not the CA erred in
affirming the RTC’s award of the deficiency amount in favor of respondent.
HELD: Claims against deceased persons should be filed during the
settlement proceedings of their estate.41 Such proceedings are primarily
governed by special rules found under Rules 73 to 90 of the Rules,
although rules governing ordinary actions may, as far as practicable, apply
suppletorily.42 Among these special rules, Section 7, Rule 86 of the Rules
(Section 7, Rule86) provides the rule in dealing with secured claims
against the estate:
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SEC. 7. Mortgage debt due from estate. – A creditor holding a claim
against the deceased secured by a mortgage or other collateral security,
may abandon the security and prosecute his claim in the manner provided
in this rule, and share in the general distribution of the assets of the estate;
or he may foreclose his mortgage or realize upon his security, by action in
court, making the executor or administrator a party defendant, and if there
is a judgment for a deficiency, after the sale of the mortgaged premises, or
the property pledged, in the foreclosure or other proceeding to realize
upon the security, he may claim his deficiency judgment in the manner
provided in the preceding section; or he may rely upon his mortgage or
other security alone, and foreclose the same at any time within the period
of the statute of limitations, and in that event he shall not be admitted as a
creditor, and shall receive no share in the distribution of the other assets of
the estate; but nothing herein contained shall prohibit the executor or
administrator from redeeming the property mortgaged or pledged, by
paying the debt for which it is held as security, under the direction of the
court, if the court shall adjudged it to be for the best interest of the estate
that such redemption shall be made. (Emphasis and underscoring
supplied)
As the foregoing generally speaks of "a creditor holding a claim against the
deceased secured by a mortgage or other collateral security" as above-
highlighted, it may be reasonably concluded that the aforementioned
section covers all secured claims, whether by mortgage or any other form
of collateral, which a creditor may enforce against the estate of the
deceased debtor. On the contrary, nowhere from its language can it be
fairly deducible that the said section would – as the CA interpreted –
narrowly apply only to mortgages made by the administrator over any
property belonging to the estate of the decedent. To note, mortgages of
estate property executed by the administrator, are also governed by Rule
89 of the Rules, captioned as "Sales, Mortgages, and Other
Encumbrances of Property of Decedent."
Jurisprudence breaks down the rule under Section 7, Rule 86 and explains
that the secured creditor has three remedies/options that he may
alternatively adopt for the satisfaction of his indebtedness. In particular, he
may choose to: (a) waive the mortgage and claim the entire debt from the
estate of the mortgagor as an ordinary claim; (b) foreclose the mortgage
judicially and prove the deficiency as an ordinary claim; and (c) rely on the
mortgage exclusively, or other security and foreclose the same before it is
barred by prescription, without the right to file a claim for any deficiency.45
It must, however, be emphasized that these remedies are distinct,
independent and mutually exclusive from each other; thus, the election of
one effectively bars the exercise of the others.
To obviate any confusion, the Court observes that the operation of Act No.
3135 does not entirely discount the application of Section 7, Rule 86, or
vice-versa. Rather, the two complement each other within their respective
spheres of operation. On the one hand, Section 7, Rule 86 lays down the
options for the secured creditor to claim against the estate and, according
to jurisprudence, the availment of the third option bars him from claiming
any deficiency amount. On the other hand, after the third option is chosen,
the procedure governing the manner in which the extra-judicial foreclosure
should proceed would still be governed by the provisions of Act No.
3135.Simply put, Section 7, Rule 86 governs the parameters and the
extent to which a claim may be advanced against the estate, whereas Act
No. 3135sets out the specific procedure to be followed when the creditor
subsequently chooses the third option – specifically, that of extra-judicially
foreclosing real property belonging to the estate. The application of the
procedure under Act No. 3135 must be concordant with Section 7, Rule 86
as the latter is a special rule applicable to claims against the estate, and at
the same time, since Section 7, Rule 86 does not detail the procedure for
extra-judicial foreclosures, the formalities governing the manner of availing
of the third option – such as the place where the application for extra-
judicial foreclosure is filed, the requirements of publication and posting and
the place of sale – must be governed by Act No. 3135.
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In this case, respondent sought to extra-judicially foreclose the mortgage
of the properties previously belonging to Sps. Maglasang (and now, their
estates) and, therefore, availed of the third option. Lest it be
misunderstood, it did not exercise the first option of directly filing a claim
against the estate, as petitioners assert, since it merely notified 52 the
probate court of the outstanding amount of its claim against the estate of
Flaviano and that it was currently restructuring the account. 53 Thus, having
unequivocally opted to exercise the third option of extra-judicial foreclosure
under Section 7, Rule 86, respondent is now precluded from filing a suit to
recover any deficiency amount as earlier discussed.
Pilapil vs Heirs of Briones
G.R. NO. 150175, February 05, 2007
FACTS: Maximino was married to Donata but their union did not produce
any children. When Maximino died, Donata instituted intestate
proceedings to settle her husband’s estate, and appointed her as the
administratrix of Maximino’s estate. Donata died. Erlinda (heir of
Donata) instituted a petition for the administration of the intestate estate
of Donata and together with her husband, they were appointed as
administrators of Donata’s intestate estate. Silverio Briones, nephew of
Maximino, filed for Letters of Administration for the intestate estate of
Maximino, which was granted. Gregorio filed with the RTC a Motion to
Set Aside the Order, 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. The heirs of Maximino filed a
complaint against the heirs of Donata for the partition, annulment, and
recovery of possession of real property. Petitioner alleged that the heirs
of Maximino knew that Maximino died, they even attended his wake. 33
years have lapsed from Maximino’s death before one of them, Silverio,
filed a Petition for Letters of Administration for the intestate estate of
Maximino. Upon learning that the intestate estate of Maximino was
already settled in a special proceeding, they waited another two years,
before instituting, a complaint for partition, annulment and recovery of
the real property belonging to the estate of Maximino. They later filed an
Amended Complaint and 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. Heirs of Maximino won the case in RTC and the same
was affirmed by CA.
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.
Issues:
1. Whether or not respondents’ right to recover possession of the
disputed properties, based on implied trust, is also barred by laches?
2. Whether or not, the CFI Order on Special Proceeding case dated 2
October 1952 could be subject to collateral attack.
HELD: MR Denied.
1. YES. Respondents’ right to recover possession of the disputed
properties, based on implied trust, is also barred by laches. 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
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 Settlement of the Estate 2019-2020
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. In view of the foregoing, the Motion
for Reconsideration is DENIED.
2. No. 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. 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.
The 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. 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.
Doctrines:
1. 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.
2. Court decision on Special Proceeding cannot be attacked collaterally.
Respondents should 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.
Sabidong vs Solas
A.M. No. P-01-1448 June 25, 2013
FACTS: The complainant is one of the long time occupants of a parcel of
land, who are in possession of the one-half portion lot subject to an
ejectment suit filed by Hodges Estate against Priscila Saplagio. Solas the
clerk of court III of MTCC of Iloilo City submitted to an Offer to Purchase
to the Hodges Estate but it was rejected due to an offer to purchase by
the Sabidong’s who are actual occupants at that time.
The sale this pushed thru and it was awarded by the probate court to
Solas and a writ of demolition was issued in favor of the respondent, with
this Sabidong filed administrative complaint to the Supreme Court
asserting that court employees cannot buy property subject to litigation
who is not a buyer in good faith, commit deception, dishonesty,
oppression and grave abuse of authority.
Solas was suspended for 6 months by the Court Administrator Alfredo
Benipayo, such Administrative matter was re-assigned by the Supreme
Court to the Executive Judge of Iloilo to adduce evidence by both parties.
Solas maintained that such property is not covered by the prohibition, as
he bought the lot 10 years after the MTCC ruling on the ejectment case
and asserted that he is a buyer in good faith and for value.
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However, 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.
Issue: WON the Lot in question is covered by the prohibition or not?
Held: 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:
(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.
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."
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.
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).
Doctrine:
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. A property forming part of the
estate under judicial 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.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.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.
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Aranas vs Mercado
G.R. No. 156407. January 15, 2014
FACTS: Emigdio Mercado died intestate, survived by his second wife,
Teresita, and their five children, and his two children by his first marriage,
one of them is the petitioner, Thelma. Emigdio inherited and acquired real
properties during his lifetime. He owned corporate shares in Cebu
Emerson Transportation Corporation (Cebu Emerson) and Mervir Realty
Corporation (Mervir Realty) which appeared to be a family corporation of
Mercados. He assigned his real properties in exchange for corporate
stocks of Mervir Realty, and sold his real property in Cebu to Mervir
Realty.
Thelma filed in the RTC in Cebu City a petition for the
appointment of Teresita as the administrator of Emigdio’s estate. The RTC
granted the petition considering that there was no opposition. The letters of
administration were issued in favor of Teresita. As the administrator,
Teresita submitted an inventory of the estate of Emigdio for the
consideration and approval by the RTC which indicates that Emigdio, at
the time of his death, had "left no real properties but only personal
properties.”
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. Hence, Teresita, as the administrator, filed a compliance
with the order supporting her inventory with copies certificates of stocks
covering the 44,806 Mervir Realty shares of stock; the deed of assignment
executed by Emigdio involving real properties in exchange for 44,407
Mervir Realty shares of stock; and the certificate of stock issued for 300
shares of stock of Cebu Emerson. However, 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.
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. 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. After a series of hearings, the RTC
issued an order finding and holding that the inventory submitted by
Teresita had excluded properties that should be included and ordered the
said administratrix to re-do the inventory of properties which are supposed
to constitute as the estate of the late Emigdio.
Teresita, joined by other heirs of Emigdio, timely sought the
reconsideration of the order of on the ground that one of the real properties
affected 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. The RTC denied the motion for reconsideration.
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 Thelma’s sibling, assailed the adverse
orders of the RTC by petition for certiorari. The CA partly granted the
petition for certiorari which ordered the exclusion of the parcels of land
located at Badian, Cebu subject matter of the Deed of Absolute Sale and
the various parcels of land subject matter of the Deeds of Assignment in
the revised inventory.
Among the reasons cited by the CA are the a) notarization of the
Deed of Absolute Sale executed by Emigdio making the same as a public
instrument which transfers the property subject matter 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, b) that the Deed of Assignment executed is valid since
there is nothing wrong or objectionable about the estate planning scheme,
and c) that a property covered by the Torrens system should be afforded
the presumptive conclusiveness of title, among others.
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ISSUE: WON the CA erred in ruling 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?
HELD:
Yes, the CA erred in its ruling.
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. 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. Such determination is provisional and
may be still revised. 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, a) if the interested parties are all heirs to the estate, or b)
the question is one of collation or advancement, or c) 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, the probate court’s 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.
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 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.
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."
Hence, the RTC that presides over the administration of an estate is
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vested with wide discretion on the question of what properties should be
included in the inventory.
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, viz:
According to the Supreme Court, the following should be included in
Emigdio’s estate:
 Emigdio 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 heirs. Certainly, said properties
constituting Emigdio’s share in the estate of Severina Mercado
should be included in the inventory.
 Teresita’s shares of stock of Mervir Realty Corporation which are
in her name and which were paid by from money derived from the
taxicab business which she and Emigdio had 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.
 Thelma’s 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.
 The lot located in Badian, Cebu covered by a transfer certificate of
title registered in the name of Emigdio until the settlement of his
estate. Mervir Realty Corporation never intervened in the said
case in order to be the owner thereof. So the said property located
in Badian, Cebu should be included in the inventory.
 It appears that the assignment of several parcels of land by the
late Emigdio to Mervir Realty Corporation by virtue of the Deed of
Assignment signed by him on the said day was a transfer in
contemplation of death. It was made two days before he died. 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 which were transferred by him in contemplation of
death. Besides, the said properties actually appeared to be still
registered in the name of Emigdio at least ten (10) months after
his death.
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.
DOCTRINE
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
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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.
Other doctrine:
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. (Examples: Order denying motion for the approval of the
inventory and order denying motion for reconsideration are 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)
Silverio Sr. vs Silverio Jr.
G.R. Nos. 208828-29 August 13, 2014
Facts:
The instant controversy stemmed from the settlement of estate of the
deceased Beatriz Silverio. After her death, her surviving spouse, Ricardo
Silverio, Sr., filed an intestate proceeding for the settlement of her estate.
On November 16, 2004, during the pendency of the case, Ricardo Silverio,
Jr. filed a petition to remove Ricardo C. Silverio, Sr. as the administrator of
the subject estate. On November 22, 2004, Edmundo S. Silverio also filed
a comment/opposition for the removal of Ricardo C. Silverio, Sr. as
administrator of the estate and for the appointment of a new administrator.
On January 3, 2005, the RTC issued an Order granting the petition and
removing Ricardo Silverio, Sr. as administrator of the estate, while
appointing Ricardo Silverio, Jr. as the new administrator.
On February 4, 2005, Ricardo Silverio Jr. filed an Urgent Motion for an
Order Prohibiting Any Person to Occupy/Stay/Use Real Estate Properties
Involved in the Intestate Estate of the Late Beatriz Silverio, Without
Authority from this Honorable Court.
Then, on May 31, 2005, the RTC issued an Omnibus Order directing the
private respondent, among several orders of the court, to vacate the
property at No. 3, Intsia, Forbes Park, Makati City within fifteen (15) days
from receipt of the order.
Private respondent filed a Motion for Reconsideration which was later
denied by the RTC. Consequently, the private respondent filed a Petition
for Certiorari and Prohibition (with TRO and Writ of Preliminary Injunction)
with the CA, and the latter annulled and set aside the order and notice to
vacate issued by the RTC.
Issue: W/N the CA committed grave abuse of discretion when it annulled
and set aside the order and notice to vacate issued by the RTC ordering
the private respondent to leave the property in Forbes Park, Makati City
because such occupancy prevents the property from being sold in order to
secure funds for the payment of the taxes due.
Held: In the instant case, Nelia Silverio-Dee appealed the May 31, 2005
Order of the RTC on the ground that it ordered her to vacate the premises
of the property located at No. 3 Intsia Road, Forbes Park, Makati City. On
that aspect the order is not a final determination of the case or of the issue
of distribution of the shares of the heirs in the estate or their rights therein.
It must be borne in mind that until the estate is partitioned, each heir only
has an inchoate right to the properties of the estate, such that no heir may
lay claim on a particular property.
Art. 1078 of the Civil Code provides that where there are two or more
heirs, the whole estate of the decedent is, before partition, owned in
common by such heirs, subject to the payment of the debts of the
deceased. Under a co-ownership, the ownership of an undivided thing or
right belongs to different persons. Each co-owner of property which is held
pro indiviso exercises his rights over the whole property and may use and
enjoy the same with no other limitation than that he shall not injure the
interests of his co-owners. The underlying rationale is that until a division is
made, the respective share of each cannot be determined and every co-
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owner exercises, together with his co-participants, joint ownership over the
pro indiviso property, in addition to his use and enjoyment of the same.
Under Rule 90, Sec. 1 of the Rules of Court, the properties of the estate
shall only be distributed after the payment of the debts, funeral charges,
and other expenses against the estate, except when authorized by the
Court.
Verily, once an action for the settlement of an estate is filed with the court,
the properties included therein are under the control of the intestate court.
And not even the administrator may take possession of any property that is
part of the estate without the prior authority of the Court.
In the instant case, the purported authority of Nelia Silverio-Dee, which she
allegedly secured from Ricardo Silverio, Sr., was never approved by the
probate court. She, therefore, never had any real interest in the specific
property located at No. 3 Intsia Road, Forbes Park, Makati City.
Butiong vs Plazo
G.R. No. 187524 August 5, 2015
Facts: 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 nd a family home, the land on which it stands in Nasugbu,
Batangas.
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.
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. In their Answer,
petitioners denied the allegations of the complaint on the groun_d of lack
of personal knowledge and good faith in acquiring the subject properties.
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.
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. On appeal, the CA affirmed the trial ‘court’s Judgment.
Issue: Whether the CA acted without jurisdiction in entertaining the special
proceeding for the settlement of estate and the civil action for annulment of
documents in one proceeding.
Held: No, 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 allegations therein,
and the relief’s prayed for, the action, is clearly one for judicial partition
with annulment of title and recovery of possession.
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
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court. 30 The 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
disputed, 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.
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 or 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 held 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.
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. That the complaint contained allegations
inherent in an action for settlement of estate does not mean that there was
a prohibited joinder 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. In fact, a complete inventory of
the estate may likewise be done during the partition proceedings,
especially since the estate has no debts. Indeed, where the more
expeditious remedy of 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.
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, as can be seen in cases where courts 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. In fact, 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.
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.
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.
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 court with the assistance of
not more than three (3) commissioners. This second stage may well also
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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.

An action for partition, therefore, is premised on the existence or non-

existence of co-ownership between the parties. Unless and until the issue
of co-ownership is definitively resolved, it would be premature to effect a
partition of an estate.

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