SUPREME COURT
Manila
THIRD DIVISION
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.
DECISION
YNARES-SANTIAGO, J.:
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 3 Resolutions 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 10 of the petition. On February 28, 1994, the trial court issued an
Order 11 denying the two motions to dismiss.
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
but said motions were denied. 28
26
and for the disqualification
27
of Judge Arcangel
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 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
Edgar, Linda, and Rodolfo filed separate motions for reconsideration
by the Court of Appeals.
34
which were denied
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 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 married to 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 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." 59 In 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)
xxxx
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 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 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 coownership 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.
SO ORDERED.
CONSUELO YNARES-SANTIAGO
Associate Justice
WE CONCUR:
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
ROMEO J. CALLEJO, SR.
Asscociate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
ATTESTATION
I attest that the conclusions in the above decision were reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Court’s
Division.
REYNATO S. PUNO
Chief Justice
Footnotes
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
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.
DECISION
PEREZ, J.:
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. 88589,1 the 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. M3957, 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
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’
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:
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.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justic
Chairpersone
ARTURO D. BRION
Associate Justice
MARIANO C. DEL CASTILLO
Associate Justice
ESTELA M. PERLAS-BERNABE
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision were reached in consultation be lore the
case was assigned to the writer or the opinion or the Court’s Division.
ATONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, it is hereby certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer or the opinion of the Court's
Division.
MARIA LOURDES P. A. SERENO
Chief Justice
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
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.
DECISION
NACHURA, J.:
Before us are the consolidated petitions for review on certiorari of petitioners Sebastian G.
Agtarap (Sebastian)1 and Eduardo G. Agtarap (Eduardo),2 assailing the Decision dated
November 21, 20063 and the 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.
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 to the house were shouldered by Gloria and Teresa, while the
restaurant (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
administration from his date of assumption up to the year ending December 31, 1996 per
Financial and Accounting Report dated June 2, 1997 which was approved by the Court. The
accounting report included the income earned and received for the period and the
expenses incurred in the administration, sustenance and allowance of the widow. In
accordance with said Financial and Accounting Report which was duly approved by this
Court in its Resolution dated July 28, 1998 – the deceased JOAQUIN AGTARAP left real
properties consisting of the following:
I LAND:
Two lots and two buildings with one garage quarter located at #3030 Agtarap 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, described as follows:
TCT NO.
LOT NO.
AREA/SQ.M.
ZONAL VALUE
AMOUNT
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
TOTAL------------------------------------------------------------- ₱13,330,000.00
II BUILDINGS AND IMPROVEMENTS:
BUILDING I (Lot # 745-B-1) ------------------------------
₱350,000.00
BUILDING II (Lot # 745-B-2) -----------------------------
320,000.00
Building Improvements --------------------------------------
97,500.00
Restaurant ------------------------------------------------------
80,000.00
TOTAL ---------------------------------------------------------
₱847,500.00
TOTAL NET WORTH -----------------------------------------
₱14,177,500.00
WHEREFORE, the net assets of the estate of the late JOAQUIN AGTARAP with a total value
of ₱14,177,500.00, together with whatever interest from bank deposits and all other
incomes or increments thereof accruing after the Accounting Report of December 31, 1996,
after deducting therefrom the compensation of the administrator and other expenses
allowed by the Court, are hereby ordered distributed as follows:
TOTAL ESTATE – ₱14,177,500.00
CARIDAD AGTARAP – ½ of the estate as her conjugal share – ₱7,088,750.00, the other
half of ₱7,088,750.00 – to be divided among the compulsory heirs as follows:
1) JOSE (deceased) -
₱1,181,548.30
2) MILAGROS (deceased) -
₱1,181,548.30
3) MERCEDES (deceased) -
₱1,181,548.30
4) SEBASTIAN -
₱1,181,548.30
5) EDUARDO -
₱1,181,548.30
6) CARIDAD -
₱1,181,548.30
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 Agtarap, Walter de Santos and half
brothers Eduardo and Sebastian Agtarap in equal proportions.
TERESA AGTARAP -
₱236,291.66
JOSEPH AGTARAP -
₱236,291.66
WALTER DE SANTOS -
₱236,291.66
SEBASTIAN AGTARAP -
₱236,291.66
EDUARDO AGTARAP -
₱236,291.66
Jose Agtarap died in 1967. His compulsory heirs are as follows:
COMPULSORY HEIRS:
1) GLORIA – (deceased) – represented by Walter de
Santos –
-
₱295,364.57
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
Total of
- as compulsory heir
₱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 resolution10 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:
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 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 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, onehalf (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.27 The 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 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.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice
ROBERTO A. ABAD
Associate Justice
JOSE CATRAL MENDOZA
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court’s
Division.
RENATO C. CORONA
Chief Justice
Footnotes
1
Rollo (G.R. No. 177192), pp. 3-15.
2
Rollo (G.R. No. 177099), pp. 44-83.
3
Penned by Associate Justice Ramon M. Bato, Jr., with Associate Justices Jose L.
Sabio, Jr. and Rosalinda Asuncion-Vicente, concurring; rollo (G.R. No. 177192), pp.
16-37; rollo (G.R. No. 177099), pp. 85-106.
4
Id. at 38-41, 108-111.
5
Also, Lucia Garcia Mendietta.
6
Also, Gloria Agtarap-de Santos.
7
Also, Maria Teresa Agtarap-Viriña.
8
Rollo (G.R. No. 177099), pp. 417-433.
9
Id. at 429-433.
Republic of the Philippines
SUPREME COURT
Manila
SECOND SPECIAL DIVISION
G.R. No. 183053
October 10, 2012
EMILIO A.M. SUNTAY III, Petitioner,
vs.
ISABEL COJUANGCO-SUNTAY, Respondent.
RESOLUTION
PEREZ, J.:
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-M95. 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. 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-inIntervention 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 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."
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 coadministrators 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 coadministrator 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.
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 coadministrator 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, 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
Court32 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
1,36 paragraph 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 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.
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 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.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
MARIA LOURDES P.A. SERENO*
Chief Justice
DIOSDADO M. PERALTA
Associate Justice
ROBERTO A. ABAD
Associate Justice
ATTESTATION
I attest that the conclusions in the above Resolution had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Special Second Division
CETIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Resolution had been reached in
consultation before the case was assigned to the writer of the opinion of the Court's
Division.
MARIA LOURDES P.A. SERENO
Chief Justice
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.
DECISION
CORONA, J.:
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 1,0115 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.
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 OrtañezEnderes 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 FLAGcontrolled 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.
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:
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);
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 [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 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 and in 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 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. 11-944909, 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 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 CAG.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.
SO ORDERED.
Vitug, (Chairman), and Carpio-Morales, JJ., concur.
Sandoval-Gutierrez, J., no part.
Footnotes
1
Penned by Associate Justice Martin S. Villarama, concurred in by Associate Justices
Salome A. Montoya (Chairman of the First Division) and Romeo Callejo, Sr. (now
Associate Justice of the Supreme Court).
2
Recognized by the decedent, Dr. Juvencio P. Ortañez and declared by the intestate
court as lawful heirs of Dr. Ortañez in its resolution dated September 22,
2000; Rollo, pp. 203-214.
3
Inventory and Accounting of Properties of the Estate; Rollo, p. 572.
4
Deed of Sale with Right to Repurchase; Rollo, pp. 55-56.
5
Deed of Sale of Shares of Stock; Rollo, pp. 57-58.
6
Rollo, pp. 39-41.
7
Cited in the decision of the Court of Appeals dated June 23, 1998 in CA-G.R. SP
No. 46842, p. 3; Rollo, p. 240.
8
Rollo, pp. 238-258.
9
Rollo, p. 709.
10
Rollo, pp. 524-526.
11
Rollo, p. 70.
12
Rollo, p. 47-48.
13
Rollo, pp. 266-268.
14
Rollo, pp. 34-35.
15
Rollo, p. 38.
16
Rollo, p. 115.
17
Rollo, pp. 15-17.
18
Rollo, pp. 260-262.
19
Rollo, pp. 254-256.
20
Acebedo vs. Abesamis, 217 SCRA 186 [1993], citing Vda. De Gil vs. Cancio, 14
SCRA 796 [1965].
Based on the Civil Code provisions on co-ownership (Article 493). Acebedo vs.
Abesamis, 217 SCRA 186 [1993], citing Reyes vs. Concepcion, 190 SCRA 171
[1990], PNB vs. Court of Appeals, 98 SCRA 207 [1980], Mercado vs. Liwanag, 5
21
SCRA 472 [1962].
22
42 Phil. 347 [1921].
23
163 SCRA 631 [1988].
24
Rollo, pp. 603-604.
Inventory and Accounting of Properties of the Estate dated March 13, 1984, Rollo,
pp. 571-754.
25
Dillena vs. Court of Appeals, 163 SCRA 630 [1988]; Manotok Realty vs. Court of
Appeals, 149 SCRA 174 [1987]; Leabres vs. Court of Appeals, 146 SCRA 158
[1986]; Estate of Olave vs. Reyes, 123 SCRA 767 [1983] and Vda. De Gil vs. Cancio,
26
14 SCRA 797 [1965].
Cited in Ma. Divina Ortañez-Enderes et al. vs. Court of Appeals et al., 321 SCRA
178 [1999].
27
28
Rollo, pp. 147-149.
29
Rollo, p. 136.
30
Rollo, pp. 728-729.
31
Rollo, pp. 524-526.
32
Salonga vs. Court of Appeals, 269 SCRA 534 [1997].
The Lawphil Project - Arellano Law Foundation
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
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 RUIZMONTES, MARIA CATHRYN RUIZ, CANDICE ALBERTINE RUIZ, MARIA ANGELINE
RUIZ and THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF
PASIG, respondents.
DECISION
PUNO, J.:
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.
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
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. — 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 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 abovementioned 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 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.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.29 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.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 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.
SO ORDERED.
Regalado, Romero and Mendoza, JJ., concur.
G.R. No. 149926
February 23, 2005
UNION BANK OF THE PHILIPPINES, petitioner,
vs.
EDMUND SANTIBAÑEZ and FLORENCE SANTIBAÑEZ ARIOLA, respondents.
DECISION
CALLEJO, SR., J.:
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 AllPurpose 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 Agreement5 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 Liabilities9 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 Answer13 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 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 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 juris or 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
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 coheirs 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 evidence35 clearly reflects that the parties in the deed of assignment with
assumption of liabilities were the FCCC, and the Union Savings and Mortgage 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.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 171206
September 23, 2013
HEIRS OF THE LATE SPOUSES FLA VIANO MAGLASANG and SALUD ADAZAMAGLASANG, namely, OSCAR A. MAGLASANG, EDGAR A. MAGLASANG,
CONCEPCION CHONA A. MAGLASANG, GLENDA A. MAGLASANG-ARNAIZ, LERMA
A. MAGLASANG, FELMA A. · MAGLASANG, FE DORIS A. MAGLASANG, LEOLINO A.
MAGLASANG, MARGIE LEILA A. MAGLASANG,MA. MILALIE A. MAGLASANG,
SALUD A. MAGLASANG, and MA. FLASALIE A. MAGLASANG, REPRESENTING THE
ESTATES OF THEIR AFORE-NAMEDDECEASED PARENTS, Petitioners,
vs.
MANILA BANKING CORPORATION, now substituted by FIRST SOVEREIGN
ASSET MANAGEMENT SPV-AMC, INC. FSAMI, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated July 20, 2005 and
Resolution3 dated January 4, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 50410
which dismissed petitioners’ appeal and affirmed the Decision4 dated April 6, 1987 of the
Regional Trial Court of Ormoc City, Branch 12 (RTC) directing petitioners to jointly and
severally pay respondent Manila Banking Corporation the amount of ₱434,742.36, with
applicable interests, representing the deficiency of the former’s total loan obligation to the
latter after the extra-judicial foreclosure of the real estate mortgage subject of this case,
including attorney’s fees and costs of suit.
The 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.10
After Flaviano Maglasang (Flaviano) died intestate on February 14,1977, his widow Salud
Maglasang (Salud) and their surviving children, herein petitioners Oscar (Oscar),
Concepcion Chona, Lerma, Felma, FeDoris, Leolino, Margie Leila, Ma. Milalie, Salud and Ma.
Flasalie, all surnamed Maglasang, and Glenda Maglasang-Arnaiz, appointed11 their brother
petitioner Edgar Maglasang (Edgar) as their attorney-in-fact.12 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
Order14 granting the petition, thereby appointing Edgar as the administrator15 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.
During the pendency of the intestate proceedings, Edgar and Oscar were able to obtain
several loans from respondent, secured by promissory notes18 which they signed.
In an Order19 dated December 14, 1978 (December 14, 1978 Order),the probate court
terminated the proceedings with the surviving heirs executing an extra-judicial partition of
the properties of Flaviano’s estate. The loan obligations owed by the estate to respondent,
however, remained unsatisfied due to respondent’s certification that Flaviano’s account was
undergoing a restructuring. Nonetheless, the probate court expressly recognized the rights
of respondent under the mortgage and promissory notes executed by the Sps. Maglasang,
specifically, its "right to foreclose the same within the statutory period."20
In this light, respondent proceeded to extra-judicially foreclose the mortgage covering the
Sps. Maglasang’s properties and emerged as the highest bidder at the public auction for
the amount of ₱350,000.00.21 There, however, remained a deficiency on Sps. Maglasang’s
obligation to respondent. Thus, on June 24, 1981, 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. 1998-0.22
The RTC Ruling and Subsequent Proceedings
After trial on the merits, the RTC (formerly, the probate court)23 rendered a Decision24 on
April 6, 1987 directing the petitioners 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.25 The RTC found that it was shown, by a
preponderance of evidence, that petitioners, after the extra-judicial foreclosure of all the
properties mortgaged, still have an outstanding obligation in the amount and as of the date
as above-stated. The RTC also found in order the payment of interests and penalty charges
as above-mentioned as well as attorney’s fees equivalent to 10% of the outstanding
obligation.26
Dissatisfied, petitioners elevated the case to the CA on appeal, contending,27 inter alia, that
the remedies available to respondent under Section 7, Rule 86 of the Rules of Court (Rules)
are alternative and exclusive, such that the election of one operates as a waiver or
abandonment of the others. Thus, when respondent filed its claim against the estate of
Flaviano in the proceedings before the probate court, it effectively abandoned its right to
foreclose on the mortgage. Moreover, even on the assumption that it has not so waived its
right to foreclose, it is nonetheless barred from filing any claim for any deficiency amount.
During the pendency of the appeal, Flaviano’s widow, Salud, passed away on July 25,
1997.28
The CA Ruling
In a Decision29 dated July 20, 2005, the CA denied the petitioners’ appeal and affirmed the
RTC’s Decision. At the outset, it pointed out that the probate court erred when it, through
the December 14, 1978 Order, closed and terminated the proceedings in Sp. Proc. No.
1604-0 without first satisfying the claims of the creditors of the estate – in particular,
respondent – in violation of Section 1, Rule 90 of the Rules.30 As a consequence,
respondent was not able to collect from the petitioners and thereby was left with the
option of foreclosing the real estate mortgage.31 Further, the CA held that Section 7, Rule
86 of the Rules does not apply to the present case since the same does not involve a
mortgage made by the administrator over any property belonging to the estate of the
decedent.32 According to the CA, what should apply is Act No. 313533 which entitles
respondent to claim the deficiency amount after the extra-judicial foreclosure of the real
estate mortgage of Sps. Maglasang’s properties.34
Petitioners’ motion for reconsideration was subsequently denied in a Resolution35 dated
January 4, 2006. Hence, the present recourse.
The Issue Before the Court
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.
Petitioners assert36 that it is not Act No. 3135 but Section 7, Rule 86of the Rules which
applies in this case. The latter provision provides alternative and exclusive remedies for the
satisfaction of respondent’s claim against the estate of Flaviano.37 Corollarily, having filed
its claim against the estate during the intestate proceedings, petitioners argue that
respondent had effectively waived the remedy of foreclosure and, even assuming that it
still had the right to do so, it was precluded from filing a suit for the recovery of the
deficiency obligation.38
Likewise, petitioners maintain that the extra-judicial foreclosure of the subject properties
was null and void, not having been conducted in the capital of the Province of Leyte in
violation of the stipulations in the real estate mortgage contract.39 They likewise deny any
personal liability for the loans taken by their deceased parents.40
The Court’s Ruling
The petition is partly meritorious.
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:
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."
In this accord, it bears to stress that the CA’s reliance on Philippine National Bank v.
CA43 (PNB) was misplaced as the said case did not, in any manner, limit the scope of
Section 7, Rule 86. It only stated that the aforesaid section equally applies to cases where
the administrator mortgages the property of the estate to secure the loan he
obtained.44 Clearly, the pronouncement was a ruling of inclusion and not one which created
a distinction. It cannot, therefore, be doubted that it is Section 7, Rule 86which remains
applicable in dealing with a creditor’s claim against the mortgaged property of the
deceased debtor, as in this case, as well as mortgages made by the administrator, as that
in the PNB case.
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. With
respect to real properties, the Court in Bank of America v. American Realty
Corporation46 pronounced:
In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative
and not cumulative. Notably, an election of one remedy operates as a waiver of the other.
For this purpose, a remedy is deemed chosen upon the filing of the suit for collection or
upon the filing of the complaint in an action for foreclosure of mortgage, pursuant to the
provision of Rule 68 of the 1997 Rules of Civil Procedure. As to extrajudicial foreclosure,
such remedy is deemed elected by the mortgage creditor upon filing of the petition not
with any court of justice but with the Office of the Sheriff of the province where the sale is
to be made, in accordance with the provisions of Act No. 3135, as amended by Act
No.4118.47 (Emphasis supplied)
Anent the third remedy, it must be mentioned that the same includes the option of extrajudicially foreclosing the mortgage under Act No. 3135,as availed of by respondent in this
case. However, the plain result of adopting the last mode of foreclosure is that the creditor
waives his right to recover any deficiency from the estate.48 These precepts were discussed
in the PNB case, citing Perez v. Philippine National Bank49 which overturned the earlier
Pasno v. Ravina ruling:50
Case law now holds that this rule grants to the mortgagee three distinct, independent and
mutually exclusive remedies that can be alternatively pursued by the mortgage creditor for
the satisfaction of his credit in case the mortgagor dies, among them:
(1) to waive the mortgage and claim the entire debt from the estate of the
mortgagor as an ordinary claim;
(2) to foreclose the mortgage judicially and prove any deficiency as an ordinary
claim; and
(3) to rely on the mortgage exclusively, foreclosing the same at anytime before it is
barred by prescription without right to file a claim for any deficiency
In Perez v. Philippine National Bank, reversing Pasno vs. Ravina, we held:
The ruling in Pasno v. Ravina not having been reiterated in any other case, we have
carefully reexamined the same, and after mature deliberation have reached the conclusion
that the dissenting opinion is more in conformity with reason and law. Of the three
alternative courses that section 7, Rule 87 (now Rule 86), offers the mortgage creditor, to
wit, (1) to waive the mortgage and claim the entire debt from the estate of the mortgagor
as an ordinary claim; (2) foreclose the mortgage judicially and prove any deficiency as an
ordinary claim; and (3) to rely on the mortgage exclusively, foreclosing the same at any
time before it is barred by prescription, without right to file a claim for any deficiency, the
majority opinion in Pasno v. Ravina, in requiring a judicial foreclosure, virtually wipes out
the third alternative conceded by the Rules to the mortgage creditor, and which would
precisely include extra-judicial foreclosures by contrast with the second alternative.
The plain result of adopting the last mode of foreclosure is that the creditor waives his
right to recover any deficiency from the estate. Following the Perez ruling that the third
mode includes
extrajudicial foreclosure sales, the result of extrajudicial foreclosure is that the creditor
waives any further deficiency claim. x x x.51 (Emphases and underscoring supplied; italics
in the original)
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 extrajudicial foreclosure is filed, the requirements of publication and posting and the place of
sale – must be governed by Act No. 3135.
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 notified52 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.
As a final point, petitioners maintain that the extra-judicial foreclosure of the subject
properties was null and void since the same was conducted in violation of the stipulation in
the real estate mortgage contract stating that the auction sale should be held in the capital
of the province where the properties are located, i.e., the Province of Leyte.
The Court disagrees.
As may be gleaned from the records, the stipulation under the real estate
mortgage54 executed by Sps. Maglasang which fixed the place of the foreclosure sale at
Tacloban City lacks words of exclusivity which would bar any other acceptable for a
wherein the said sale may be conducted, to wit:
It is hereby agreed that in case of foreclosure of this mortgage under Act 3135, the auction
sale shall be held at the capital of the province if the property is within the territorial
jurisdiction of the province concerned, or shall be held in the city if the property is within
the territorial jurisdiction of the city concerned; x x x.55
Case law states that absent such qualifying or restrictive words to indicate the exclusivity of
the agreed forum, the stipulated place should only be as an additional, not a limiting
venue.56 As a consequence, the stipulated venue and that provided under Act No. 3135 can
be applied alternatively.
In particular, Section 2 of Act No. 3135 allows the foreclosure sale to be done within the
province where the property to be sold is situated, viz.:
SEC. 2. Said sale cannot be made legally outside of the province which the property sold is
situated; and in case the place within said province in which the sale is to be made is
subject to stipulation, such sale shall be made in said place or in the municipal building of
the municipality in which the property or part thereof is situated. (Italics supplied) ..
In this regard, since the auction sale was conducted in Ormoc City, which is within the
territorial jurisdiction of the Province of Leyte, then the Court finds sufficient compliance
with the above-cited requirement.
All told, finding that the extra-judicial foreclosure subject of this case was properly
conducted in accordance with the formalities of Act No. 3135,the Court upholds the same
as a valid exercise of respondent's third option under Section 7, Rule 86. To reiterate,
respondent cannot, however, file any suit to recover any deficiency amount since it
effectively waived its right thereto when it chose to avail of extra-judicial foreclosure as
jurisprudence instructs.
WHEREFORE, the petition is PARTLY GRANTED. The complaint for the recovery of the
deficiency amount after extra-judicial foreclosure filed by respondent Manila Banking
Corporation is hereby DISMISSED. The extra-judicial foreclosure of the mortgaged
properties, however, stands.
SO ORDERED.
ESTELA M. PERLAS-BERNABE
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION
Associate Justice
MARIANO C. DEL CASTILLO
Associate Justice
JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court's
Division.
MARIA LOURDES P. A. SERENO
Chief Justice
Footnotes
THIRD DIVISION
[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, v. 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.
RESOLUTION
CHICO-NAZARIO, J.:
On 10 March 2006, this Court promulgated its Decision1 in the above-entitled case, ruling
in favor of the petitioners. The dispositive portion2 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 Rejoinder9 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.
x x x
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), 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.
x x x
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.
x x x
After trial in due course, the RTC rendered its Decision, dated 8 April 1986, in favor of the
heirs of Maximino x x x.
x x x
x x x[T]he RTC declared that the heirs of Maximino were entitled to - 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.
x x x
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 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. Claridad12 and 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 portions15 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.
x x x
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:
x x x
(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.
x x x
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.
x x x
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.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
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.
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 v. 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.
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 v. Caluag, 96 Phil. 981;
Julio v. 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 v. 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 v. 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 v. 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 v. Canlas, 94 Phil. 776; Cristobal v. 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 v. 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 v. Quito, 100 Phil. 64; Bancairen v. Diones, 98 Phil. 122, 126; Juan v. Zuñiga,
62 O.G. 1351; 4 SCRA 1221; Jacinto v. Jacinto, L-17957, May 31, 1962. See Tamayo v.
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 v. Gorricho and
Aguado, 103 Phil. 261, 266; Laguna v. Levantino, 71 Phil. 566; Sumira v. Vistan, 74 Phil.
138; Golfeo v. Court of Appeals, 63 O.G. 4895, 12 SCRA 199; Caladiao v. 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 v. Romero, 109 Phil. 500, 502-3; Martinez v. Graño, 42 Phil. 35; Buencamino v.
Matias, 63 O. G. 11033, 16 SCRA 849).
The rule of imprescriptibility was misapplied to constructive trusts (Geronimo and Isidoro v.
Nava and Aquino, 105 Phil. 145, 153. Compare with Cuison v. Fernandez and Bengzon, 105
Phil. 135, 139; De Pasion v. 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 v. Levantino, supra; Salinas v.
Tuason, 55 Phil. 729. Compare with the rule regarding co-owners found in the last
paragraph of Article 494, Civil Code; Casañas v. Rosello, 50 Phil. 97; Gerona v. 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 v. Capunitan, L-10228,
February 28, 1962, 4 SCRA 450; Gerona v. De Guzman, supra; Claridad v. Henares, 97
Phil. 973; Gonzales v. Jimenez, L-19073, January 30, 1965, 13 SCRA 80; Boñaga v. Soler,
112 Phil. 651; J. M. Tuason & Co., v. Magdangal, L-15539, January 30, 1962, 4 SCRA
84). Prescription may supervene in an implied trust (Bueno v. Reyes, L-22587, April 28,
1969, 27 SCRA 1179; Fabian v. Fabian, L-20449, January 29, 1968; Jacinto v. Jacinto, L17957, 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 v. Gorricho and Aguado, supra;
Compare with Mejia v. 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 aforequoted 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 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.
xxx
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 v. McCahan, 41 Ill., 45; Roberts v. Stowers, 7 Bush,
295, Huls v. Buntin, 47 Ill., 396; Sherrell v. Goodrum, 3 Humph., 418; Andrews v. State, 2
Sneed, 549; Hollingsworth v. Bagley, 35 Tex., 345; Morton v. Root, 2 Dill., 312;
Commercial Bank of Manchester v. Martin, 9 Smedes & M., 613; Hargis v. Morse, 7 Kan.,
259. See also Cornell v. Barnes, 7 Hill, 35; Dawson and Another v. Wells, 3 Ind., 399;
Meyer v. Mintonye, 106 Ill., 414; Olson v. Nunnally, 47 Kan., 391; White v. 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 v. Harnden, 1 Paine, 55; Towns v.
Springer, 9 Ga., 130; Mobley v. Mobley, 9 Ga., 247; Beverly and McBride v. Burke, 9 Ga.,
440; Central Bank of Georgia v. Gibson, 11 Ga., 453; Johnson v. Johnson, 30 Ill., 215; St.
Louis and Sandoval Coal and Mining Co. v. Sandoval Coal and Mining Co., 111 Ill., 32;
Swiggart v. Harber, 4 Scam., 364; Miller v. Snyder, 6 Ind., 1; Seely v. Reid, 3 Greene
[Iowa], 374.)34
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.
SO ORDERED.
Endnotes:
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
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.
DECISION
VILLARAMA, JR., J.:
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] Pcs483) 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 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-411, 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
xx
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;
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
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 Order18 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
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 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 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. 671350 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.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
WE CONCUR:
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
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.
DECISION
BERSAMIN, J.:
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.
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 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 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)
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 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."23 Hence, 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 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 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.1âwphi1 However, 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 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.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
MARIA LOURDES P. A. SERENO
Chief Justice
TERESITA J. LEONARDO-DE
CASTRO
Associate Justice
MARTIN S. VILLARAMA, JR.
Associate Justice
BIENVENIDO L. REYES
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court's Division.
MARIA LOURDES P. A. SERENO
Chief Justice
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. Nos. 208828-29
August 13, 2014
RICARDO C. SILVERIO, SR., Petitioner,
vs.
RICARDO S. SILVERIO, JR., CITRINE HOLDINGS, INC., MONICA P. OCAMPO and
ZEE2 RESOURCES, INC., Respondents.
DECISION
VILLARAMA, JR., J.:
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 Decision1 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 his stead, SILVERIO SR. was appointed as the new administrator.
Thereafter, 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 ("SILVERIODEE") 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 CAG.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
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. 04-702-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.
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: CAG.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 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 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 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 CAG.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.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
THIRD DIVISION
G.R. No. 187524, August 05, 2015
SPOUSES MARIA BUTIONG AND FRANCISCO VILLAFRIA, SUBSTITUTED BY DR.
RUEL B. VILLAFRIA, Petitioners, v. MA. GRACIA RIÑOZA PLAZO AND MA. FE
RIÑOZA ALARAS, Respondents.
DECISION
PERALTA, J.:
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 Decision1 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 Judgment3 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:LawlibraryofCRAlaw
On November 16, 1989, Pedro L. Riñoza 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.4redarclaw
In their Amended Complaint for Judicial Partition with Annulment of Title and Recovery of
Possession5 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 obtained by
Pedro and Benita from a bank.6 The document actually evidenced receipt from Banco
Silangan of the amount of P87,352.62 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.8redarclaw
In their Answer,9 petitioners denied the allegations of the complaint on the ground 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 P1 million as well as a Deed of Sale whereby Benita sold the resort to petitioners for
P650,000.00.11redarclaw
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 petitioners.as well as the circumstances surrounding the execution of the same.
Specifically, the Extra-Judicial Settlement was notarized by a notary public who 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
Riñoza, 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 who supposedly witnessed the signing
and execution of the documents of conveyance.14 On the basis thereof, the trial court ruled
in favor of respondents, in its Judgment, the pertinent portions of
its fallo provide:LawlibraryofCRAlaw
WHEREFORE, foregoing premises considered, judgment is hereby rendered as
follows:LawlibraryofCRAlaw
xxxx
4. a) Declaring as a nullity the Extra-Judicial Settlement with Renunciation, Repudiation
and Waiver of Rights and Sale" (Exh. "1", 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 (Exh. "2", Villafria), purportedly
executed by Benita T. Riñoza in favor of spouses Francisco Villafria and Maria Butiong,
purportedly notarized by one Alfredo de Guzman, marked Doc. No. 1136, Page No. 141,
Book No. XXX, Series of 1991.
c) Ordering the forfeiture of any and all improvements introduced by defendants Francisco
Villafria dnd 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. Riñoza.
6. Declaring the plaintiffs and the defendants-heirs in the Amended Complaint to be the
legitimate heirs of decedent Pedro L. RifSoza, 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 corresponding titles in their names in the proportion established by law, pro
indiviso, in TCT Nos. 40807, 40808, 51354, 51355 and 40353 (after restoration) within ten
(10) days from finality of this Decision, upon 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 Decision16 dated October 31,
2006 in the following wise:LawlibraryofCRAlaw
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, el al. v. Aquino, et
al.:LawlibraryofCRAlaw
The validity of a notarial certification necessarily derives from the authority of the notarial
officer. If the notary public does net have the capacity to notarize a document,
but does so anyway, then the document should be treated as 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:LawlibraryofCRAlaw
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:LawlibraryofCRAlaw
Sec. 20. Proof of private document. - Before any private document offered as authentic is
received in evidence, its due execution aijd .authenticity must be proved
either:LawlibraryofCRAlaw
(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 same, or conversely, to prove the authenticity and due execution
of the said deeds. The Villafrias failed in this regard.
As aforestated, the Villafrias did not present as witnesses (a) the notary public
who purportedly notarized the questioned instrument, (b) the witnesses who
appeared] in the instruments as eyewitnesses to the signing, or (c) an expert to
prove the authenticity and genuineness of all the signatures appearing o,n 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 prerequisite 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 Judicial 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 Resolution19 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 executory on October 31, 2007 as certified
by the Entry of Judgment issued by the Court.20redarclaw
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. Furthermore, 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.21redarclaw
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.22redarclaw
On November 27, 2008, the RTC issued an Order, issuing a Partial 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, 2009, a Petition for
Annulment of Judgment and Order before the CA assailing the 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 its Decision dated March 13, 2009, however, the CA dismissed the
petition and affirmed the rulings of the trial court in the following wise:LawlibraryofCRAlaw
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 jurisdiction." In RP v. The Heirs of
Sancho Magdato, the High Tribunal stressed that:LawlibraryofCRAlaw
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:LawlibraryofCRAlaw
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 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:LawlibraryofCRAlaw
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.23When 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:LawlibraryofCRAlaw
I.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT RULING THAT THE
REGIONAL TRIAL COURT, BRANCH 14, NASUGBU, BATANGAS, ACTED WITHOUT
JURISDICTION IN ENTERTAINING THE SPECIAL PROCEEDING FOR THE SETTLEMENT OF
ESTATE OF PEDRO RIÑOZA 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 joinder 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 findings of the courts below that his parents are builders in bad
faith for they only took possession of the subject properties after the execution of the
transfer documents and after 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:LawlibraryofCRAlaw
FIRST CAUSE OF ACTION
1. That Pedro L. Riñoza, 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 2J are the only known heirs of the above-mentioned decedent. The plaintiffs and the
Defendants Rolando, Rafael, Antonio, Angelito, Lorna all surnamed Riñoza, and Myrna R.
Limon or Myrna R. Rogador, Epifanio 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 Riñoza, 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:LawlibraryofCRAlaw
xxxx
16. That the estate of decedent Pedro L. Riñoza 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 same 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 allegations therein, and the reliefs prayed for, the action is clearly
one for judicial partition with annulment of title and recovery of possession.
Section 1, Rule 74 of the Rules of Court provides:LawlibraryofCRAlaw
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 age, 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:LawlibraryofCRAlaw
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 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 so named is incompetent, or refuses
the trust, or. fails to furnish the bond required by the Rules of Court, then the decedent's
estate shall be judicially administered and the competent court shall appoint a qualified
administrator in 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 74 wherein
the heirs of a decedent, who left no will and no debts due from his estate, may divide the
estate either extrajudicially or in an ordinary action for partition without submitting the
same for judicial administration nor applying for the appointment of an administrator by
the court.30 The reason is that where the deceased dies without pending obligations, there
is no necessity for the appointment of an administrator to administer the estate for them
and to deprive the real owners of their possession to which they are immediately
entitled.31redarclaw
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 pending obligations. Thus, contrary to
petitioner'.s contention, respondents were under no legal obligation to submit me subject
properties of the estate to a special proceeding for settlement of intestate estate, and are,
in fact, encouraged to have the same partitioned, judicially or extrajudicially, by Pereira v.
Court of Appeals:32redarclaw
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.33
Thus, respondents committed no error in filing an action for judicial partition instead of a
special proceeding for the settlement of estate as the same is expressly permitted by law.
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.34 In fact, a complete inventory of the estate may likewise be done
during the partition proceedings, especially since the estate has no debts.35 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.36redarclaw
Moreover, the fact that respondents' complaint al$o 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 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.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:LawlibraryofCRAlaw
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:LawlibraryofCRAlaw
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 apparently confuses title with the certificate
of title. Title as a concept of ownership should 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 of title 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 Biñan v. Garcia:40redarclaw
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
[cjourt 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, x x x.41redarclaw
An action for partition, therefore, is premised on the existence or non-existence of coownership 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.43redarclaw
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 Sf
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:LawlibraryofCRAlaw
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 civil 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 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.50Second, they never presented any other document which would
evidence their actual payment of consideration to the selling heirs.51Third, 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 the 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 are 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 in
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
concerns the resort covered by Transfer Certificates of Title No. 51354 and No. 51355, and
family home covered by TCT No. 40807 and 40808, are AFFIRMED.
SO ORDERED.cralawlawlibrary
Velasco, Jr., (Chairperson), Perez,* Leonen,**and Jardeleza, JJ., concur.
Endnotes: