SPECIAL PROCEEDINGS
MODULE 1: RULE 72 (SUJECT
MATTER AND APPLICABILITY OF
GENERAL RULES
1. Montañer vs Shari’a District Court
Facts
1. In May 1995, Alejandro Montañer, Sr.
(decedent) died leaving petitioners Luisa
Kho, his wife, and his three children
(Alejandro, Jr., Lilibeth, and Rhodora) as
heirs to his estate.
2. Five years later, a complaint for judicial
partition of properties of the decedent was
filed by before the Shari’a District Court by
Liling Disangcopan and Almahleen
Montañer, who claimed that Alejandro was
a Muslim and that they were his first
family.
3. Petitioners filed a Motion to Dismiss the
complaint on the ground of lack of
jurisdiction of the Sharia’a Court, alleging
(1) that the decedent was a Roman
Catholic
(2) they also argued that the proceeding
before the district court is an ordinary civil
action against a deceased person.
Section 3 of the ROC defines a special
proceeding as a “remedy by which a party
seeks to establish a status, right, or a
particular fact.”
This Court has applied the Rules, particularly
the rules on special proceedings, for the
settlement of the estate of a deceased
Muslim.
In a petition for the issuance of LOA,
settlement, and distribution of estate, the
applicants seek to establish the fact of death
of the decedent and later to be duly
recognized as among the decedent’s heirs,
which would allow them to exercise their right
to participate in the settlement and liquidation
of the estate of the decedent.
Here, the respondents seek to establish the
fact of Alejandro’s death, and subsequently,
for private respondent Almahleen Liling S.
Montañer to be recognized as among his
heirs, if such is the case in fact.
As a special proceeding, the purpose of the
settlement of the estate is to determine all the
assets of the estate, pay its liabilities, and
distribute the residue to those entitled to the
same.
4. The Court dismissed the complaint,
holding that the deceased was not a
Muslim and the Court’s jurisdiction
extends only to settlement of estate of
deceased Muslims.
5. Private respondent, Liling Disangcopan,
filed a MR which was granted by the court.
It reconsidered its dismissal and allowed
respondents to adduce further evidence.
Later, it ordered the continuation of the
trial on merits. This was questioned by the
petitioners.
Issue: Whether the complaint filed by the
respondents in the Shari’a District Court for
the settlement of the estate is an ordinary civil
action.
Held: The complaint is a special proceeding.
The Court reiterates that the proceedings
before the court a quo are for the issuance of
LOAs, settlement, and distribution of the
estate of the deceased, which is a special
proceeding.
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2. Heirs of Gabatan vs CA
party seeks to establish a status, a right, or a
particular fact.
Facts:
1. Subject of the present controversy is a
1.1062 hectare parcel of land, identified
as Lot 3095 C-5 and situated at
Calinugan, Balulang, Cagayan de Oro
City. This lot was declared for taxation in
the name of Juan Gabatan.
2. Respondent, Lourdes Pacana, alleged
that she is the sole owner of the lot in
question, having inherited the same from
her deceased mother, Hermogena.
3. Respondent also alleged that her mother
is the only child of Juan and his wife
Laurena Gabatan.
4. Said lot was entrusted to Juan’s brother,
Teofilo Gabatan. Teofilo refused to return
the land to Hermogena and the
respondent.
5. Meanwhile, petitioners maintained that
Juan Gabatan died single in 1934 and
without any issue and that Juan was
survived by one brother and two sisters,
namely: Teofilo, Macaria, and Justa.
It is then decisively clear that the declaration
of heirship can be made only in a special
proceeding inasmuch as the petitioners here
are seeking the establishment of a status or
right.
This rule was reiterated in the cases of Litam
et al vs Rivera and Solivio vs CA.
EXC: This rule was relaxed in the case of
Portugal vs Portugal-Beltran.
In the present case, there appears to be only
one parcel of land being claimed by the
contending parties as their inheritance from
Juan Gabatan.
It would be more practical to dispense with a
separate special proceeding for the
determination of the status of respondent as
the sole heir of Juan Gabatan, specially in light
of the fact that the parties to Civil Case No.
89-092, had voluntarily submitted the issue to
the RTC and already presented their evidence
regarding the issue of heirship in these
proceeding. Also the RTC assumed
jurisdiction over the same and consequently
rendered judgment thereon.
6. Petitioners contended that the complaint
lacks or states no cause of action or, if
there was any, the same has long
prescribed and/or has been barred by
laches.
7. Both the RTC and CA ruled in favor of
respondent, Lourdes Pacana.
Issue: Whether the determination of the legal
heirs in the case at bar must be made In the
proper special proceedings and not in an
ordinary suit for recovery of ownership and
possession of property.
Held:
GR: The Court has consistently ruled that the
trial court cannot make a declaration of
heirship in the civil action for the reason that
such a declaration can only be made in a
special proceeding.
Under Section 3, Rule 1 of the 1997 Revised
Rules of Court, a civil action is defined as one
by which a party sues another for the
enforcement or protection of a right, or the
prevention or redress of a wrong while a
special proceeding is a remedy by which a
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3. Sheker vs Estate of Sheker
Facts:
1.
The RTC admitted to probate the
holographic will of Alice O. Sheker and
thereafter issued an order for all the
creditors to file their respective claims
against the estate.
2.
In compliance therewith, petitioner filed a
contingent claim for agent’s commission
due him amounting to approximately
P206,250 as reimbursement for expenses
incurred and/or to be incurred by
petitioner in the course of negotiating the
sale of said realties.
3.
Respondent executrix moved for the
dismissal of said money claim against the
estate on the grounds that:
(1) the requisite docket fee had not been
paid;
(2) the petitioner failed to attach a CNFS
(3) petitioner failed to attach a written
explanation why the money claim was not
filed and served personally.
4.
RTC dimissed without prejudice the
money claim on the grounds advanced by
respondent. However, petitioner insists
that Sec 2, Rule 72 of the ROC provides
that rules in ordinary actions applicable to
special proceedings only a suppletory
manner.
Issue: Whether the RTC erred in dismissing
the petitioner’s contingent money claim
against respondent estate for failure of the
petitioner to attach in his motion a CNFS.
Held: No.
Special provisions under Part II of the ROC
govern special proceedings; but in the
absence of special provisions, the rules
provided for in Part I of the Rules governing
ordinary civil actions shall be applicable to
special proceedings, as far as practicable.
Practicable: possible to practice or perform;
capable of being put into practice, done or
accomplished.
This means that in the absence of special
provisions, rules in ordinary actions may be
applied in special proceedings as much as
possible and where doing so would not pose
and obstacle to said proceedings.
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4. Hilado vs CA
Facts:
1. The well-known sugar magnate Roberto
S. Benedicto died intestate on May 15,
2000. He was survived by his wife, private
respondent Julita Benedicto (administatrix
Benedicto), and his only daughter,
Francisca Benedicto-Paulino.
2.
At the time of his death, there were 2
pending civil cases against Benedicto
involving the petitioners.
3.
The first was then pending with the RTC of
Bacolod City with petitioner Alfredo Hilado
as one of the plaintiffs. The second case,
also pending in Bacolod RTC, with
petitioners Lopez Sugar Corporation and
First Farmers Holding Corporation as
among the plaintiffs.
4.
Thereafter, the widow Benedicto filed and
was granted by the RTC of Manila, a
petition for the issuance of LOA in her
favor.
5.
In January 2001, the widow Benedicto
submitted an Inventory of the Estate, Lists
of Personal and Real Properties, and
Liabilities of the Estate which included as
among the liabilities, the above-mentioned
two pending claims being litigated before
the Bacolod City courts.
6.
Subsequently,
petitioners
filed
a
Manifestation/ Motion Ex Abundanti
Cautela, praying that they be furnished
with copies of all processes and orders
pertaining to the intestate proceedings.
7.
Both the RTC and CA ruled against the
petitioners (they were not the interested
parties within the contemplation of the
ROC to intervene in the intestate
proceedings).
material, direct and immediate, and not simply
contingent and expectant.”
Issue No. 2: Whether petitioners, as persons
interested in the estate of the deceased
person, are entitled to copies of all processes
and orders pertaining to the intestate
proceedings.
à Yes. The Court deems that while there is no
general right to intervene on the part of the
petitioners, they may be allowed to seek
certain prayers or reliefs from the intestate
court not explicitly provided for under the
Rules, if the prayer or relief sought is
necessary to protect their interest in the
estate, and there is no other modality under
the Rules by which such interests can be
protected.
Allowing creditors, contingent or otherwise,
access to the records of the intestate
proceedings in an eminently preferable
precedent than mandating the service of
processes and pleadings upon them.
Issue No.1: Whether creditors whose credit is
based on contingent claim have the right to
participate in the settlement proceedings by
way of intervention under Rule 19 of the ROC.
à The definition of “intervention” under Rule
19 simply does not accommodate contingent
claims.
While the language in the ROC does not
literally preclude petitioners from intervening
in the intestate proceedings, case law has
consistently held that the legal interest
required of an intervenor “must be actual and
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5. Golden Cane Furniture Mnfg Corp vs.
Steelpro Phils et al.
Facts:
1. On November 2008, Golden Cane filed a
Petition for Corporate Rehabilitation with
Pampanga RTC.
2. Thereafter, the RTC denied due course to
the petition because of:
(1) litis pendentia and forum shopping due
to the pendency of a separate Petition for
Suspension of Payments filed in 2007;
(2) consistent failure of the rehabilitation
receiver to fulfill her duties;
(3) receiver’s failure to file bond on time;
(4) receiver’s failure to submit Golden
Cane’s interim financial statements.
3. Golden Cane elevated the case to the CA
but was also dismissed by the appellate
court.
Golden Cane’s arguments:
(1) that A.M. No. 08-10-SC, or the 2008 Rules
of Procedure on Corporate Rehabilitation (the
2008 Rules) took effect on January 16, 2009,
and superseded A.M. No. 04-9-07-SC;
(2) that under Rule 8 of the 2008 Rules, an
order denying due course to the petition for
rehabilitation rendered before the approval or
disapproval of the rehabilitation plan is not
appealable to the CA under Rule 43;
(3) that the remedy against such an order is a
petition for certiorari under Rule 65 of the
Rules of Court.
Issue: Whether the correct remedy to
challenge the outright dismissal of Golden
Cane’s petition for rehabilitation is a petition
for review under Rule 43 or a petition for
certiorari under Rule 65, both of the Rules of
Court.
Thus, in 2004, the Court enacted A.M. No. 049-07-SC to clarify the proper mode of appeal
from decisions and final orders of Rehabilitatin
Courts: … appealable through Petition for
Review under Rule 43 of the ROC.
In 2008, this Court enacted the Rules of
Procedure on Corp Rehabilitation. The 2008
Rules now included MR as a relief from any
order of the court prior to the approval of the
rehabilitation plan.
Notably, the 2008 Rules also allowed a
petition for certiorari under Rule 65 of the ROC
as a recourse, but only against an order
issued after the approval of the rehabilitation
plan.
Held: Petition for Review under Rule 43
Golden Cane filed its petition for rehabilitation
on November 3, 2008 under the regime of the
Interim Rules. The initial hearing was also held
on January 7, 2009, before the effectivity of
the 2008 Rules.
Accordingly, the Interim Rules – not the 2008
Rules – apply to Golden Cane’s petition for
corporate rehabilitation.
Pursuant to A.M. No. 04-9-07-SC, the correct
remedy against all decisions and final orders
of the rehabilitation courts in proceedings
governed by the Interim Rules is a petition for
review to the CA under Rule 43 of the ROC. A
petition for certiorari under Rule 65 is evidently
the wrong mode of appeal.
6. DFA vs BCA Intl Corp.
Refer to separate online digest
Brief overview of relevant laws à
The SC enacted enacted A.M. No. 00-8-10SC or the Interim Rules of Procedure on
Corporate Rehabilitation (Interim Rules) which
took effect on December 15, 2000. Under the
Interim Rules, a motion for reconsideration
was a prohibited pleading.Orders issued by
the rehabilitation court were also immediately
executory unless restrained by the appellate
court.
However, the Interim Rules did not specifically
indicate the mode of appeal that governed
corp rehabilitation cases.
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7. Pacific Banking Corp. vs CA
1. On March 13, 1989 the Pacific Banking
Corporation Employees Organization
(Union for short), petitioner in G.R. No.
109373, filed a complaint-in-intervention
seeking payment of holiday pay, 13th
month pay differential, salary increase
differential, Christmas bonus, and cash
equivalent of Sick Leave Benefit due its
members as employees of PaBC.
2. September 13, 1991, The trial court
ordered payment of the principal claims of
the Union.
3. September 16, 1991, The Liquidator
received a copy of the order.
4. October 16, 1991, he filed a Motion for
Reconsideration and Clarification of the
order.
5. December 6, 1991, the judge modified his
September 13, 1991 but in effect denied
the
Liquidator’s
motion
for
reconsideration.
6. The following day, he filed a Notice of
Appeal and a Motion for Additional Time to
Submit Record on Appeal.
7. February 10, 1992, respondent judge
disallowed the Liquidator’s Notice of
Appeal on the ground that it was late, i.e.,
more than 15 days after receipt of the
decision. The judge declared his
September
13,
1991
order
and
subsequent orders to be final and
executory and denied reconsideration.
8. March 27, 1992, he granted the Union’s
Motion for issuance of a writ of Execution.
9. September 30, 1992 he moved for
reconsideration, but his motion was
denied by the court on October 2, 1992.
10. October 14, 1992 he filed a Notice of
Appeal from the orders of granting the
Union’s Motion for issuance of a writ of
execution and denied Motion for
reconsideration. However, the judge
ordered the Notice of Appeal stricken off
the record on the ground that it had
been filed without authority of the Central
Bank and beyond 15 days.
Proceedings in the Court of Appeals
The Liquidator filed petitions for Certiorari,
Prohibition and Mandamus in the Court of
Appeals to set aside the orders of the trial
court denying his appeal from the orders
granting the claims of Union.
In its decision of November 17, 1992 in CAG.R. SP No. 27751 (now G.R. No. 09373) the
Fifth Division held in the case of the Union that
the proceeding before the trial court was
a special proceeding and, therefore, the
period for appealing from any decision or final
order rendered therein is 30 days.
Since the notice of appeal of the Liquidator
was filed on the 30th day of his receipt of the
decision granting the Union’s claims, the
appeal was brought on time. The Fifth
Division, therefore, set aside the orders of the
lower court and directed the latter to give due
course to the appeal of the Liquidator and set
the Record on Appeal he had filed for hearing.
Issue: Whether or not a petition for liquidation
under sec 29 of Rep. Act No. 265 is in the
nature of a special proceeding.
If it is, then the period of appeal is 30 days and
the party appealing must, in addition to
a notice of appeal, file with the trial court
a record on appeal in order to perfect his
appeal. Otherwise, if a liquidation proceeding
is an ordinary action, the period of appeal is
15 days from notice of the decision or final
order appealed from.
Held:
Yes. The Interim Rules and Guidelines to
implement BP Blg. 129 provides:
19. Period of Appeals. —
(a) All appeals, except in habeas corpus cases
and in the cases referred to in paragraph (b)
hereof, must be taken within fifteen (15) days
from notice of the judgment, order, resolution
or award appealed from.
(b) In appeals in special proceedings in
accordance with Rule 109 of the Rules of
Court and other cases wherein multiple
appeals are allowed, the period of appeals
shall be thirty (30) days, a record on appeal
being required.
§1. Action defined. — Action means an
ordinary suit in a court of justice, by which the
party prosecutes another for the enforcement
or protection of a right, or the prevention or
redress of a wrong.
§2. Special Proceeding Distinguished. —
Every other remedy, including one to establish
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the status or right of a party or a particular fact,
shall be by special proceeding.
Elucidating the crucial distinction between an
ordinary
action
and
a
special
proceeding, Chief Justice Moran states:”
Action is the act by which one sues
another in a court of justice for the
enforcement or protection of a right, or
the prevention or redress of a wrong
while special proceeding is the act by
which one seeks to establish the
status or right of a party, or a particular
fact.
Hence, action is distinguished from special
proceeding in that the former is a formal
demand of a right by one against another,
while the latter is but a petition for a
declaration of a status, right or fact. Where
a party litigant seeks to recover property from
another, his remedy is to file an action. Where
his purpose is to seek the appointment of a
guardian for an insane, his remedy is a special
proceeding to establish the fact or status of
insanity calling for an appointment of
guardianship.
Considering this distinction, a petition for
liquidation of an insolvent corporation
should be classified a special proceeding
and not an ordinary action. Such petition
does not seek the enforcement or protection
of a right nor the prevention or redress of a
wrong against a party. It does not pray for
affirmative relief for injury arising from a
party’s wrongful act or omission nor state a
cause of action that can be enforced against
any person.
What it seeks is merely a declaration by the
trial court of the corporation’s insolvency so
that its creditors may be able to file their
claims in the settlement of the corporation’s
debts and obligations.
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8. Heirs of Ypon vs Ricaforte
1. The Ypons filed a complaint for
Cancellation of Title and Reconveyance
with Damages (subject complaint) against
respondent Ricaforte a.k.a. "Gaudioso E.
Ypon" (Gaudioso).
2. In their complaint, they alleged that
Magdaleno Ypon died intestate and
childless leaving certain lots. Claiming to
be the sole heir of Magdaleno, Gaudioso
executed an Affidavit of Self-Adjudication
and caused the cancellation of the
aforementioned certificates of title, leading
to their subsequent transfer in his
name to the prejudice of petitioners who
are Magdaleno’s collateral relatives and
successors-in-interest.
3. In his Answer, Gaudioso alleged that he is
the lawful son of Magdaleno as evidenced
by: (a) his certificate of Live Birth; (b) two
(2) letters from Polytechnic School; and (c)
a certified true copy of his passport.
Further, by way of affirmative defense, he
claimed that: (a) petitioners have no cause
of action against him; (b) the complaint
fails to state a cause of action; and (c) the
case is not prosecuted by the real partiesin-interest, as there is no showing that the
petitioners have been judicially declared
as Magdaleno’s lawful heirs.
4. RTC dismissed the case for lack of cause
of action. It observed that while the
plaintiffs therein had established their
relationship with Magdaleno in a previous
special proceeding for the issuance of
letters of administration, this did not mean
that they could already be considered as
the decedent’s compulsory heirs quite the
contrary, Gaudioso
satisfactorily
established the fact that he is Magdaleno’s
son – and hence, his compulsory heir –
through
the documentary
evidence
he submitted.
ISSUE/S: WON the RTC’s dismissal of the
case on the ground that the subject complaint
failed to state a cause of action was proper
HELD: YES. Since the petitioners failed
to establish their relationship with Magdaleno
in a previous special proceeding for purposes
of heirship.
The General Rule is that the determination of
who are the decedent’s lawful heirs must be
made in the proper special proceeding for
such purpose, and not in an ordinary suit for
recovery of ownership and/or possession.
Section 3, Rule 1 of the 1997 Revised Rules of
Court provides that a civil action is defined as
one by which a party sues another for the
enforcement or protection of a right, or the
prevention or redress of a wrong while
a special proceeding is a remedy by which a
party seeks to establish a status, a right, or a
particular fact. It is then decisively clear that
the declaration of heirship can be made only
in a special proceeding inasmuch as the
petitioners here are seeking the establishment
of a status or right.
An exception to the general rule is for
practicality, as when the parties in the civil
case had voluntarily submitted the issue to the
trial court and already presented their
evidence regarding the issue of heirship, and
the RTC had consequently rendered judgment
thereon, or when a special proceeding had
been instituted but had been finally closed
and terminated, and hence, cannot be reopened.
In this case, none of the foregoing exceptions,
or those of similar nature, appear to exist.
5. The Court also denied their motion for
reconsideration due to the counsel’s
failure to state the date on which his
Mandatory Continuing Legal Education
Certificate of Compliance was issued.
6. Hence this instant petition which directly
appealed to the Supreme Court since it
only raises pure questions of law.
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MODULE 2: RULE 73 (SETTLEMENT
OF ESTATE)
1. PSB vs. Hon. Lantin
Facts:
1. Private Respondent, Candido Ramos,
built a duplex-apartment house for the
Spouses Tabligan.
2. The total cost of the house was P32,927
but spouses were only able to pay Ramos,
P7,139. Hence, Ramos used his own
money, P25,788.50, to finish the
construction of the house.
3. Meanwhile,
the
spouses
Tabligan
obtained from petitioner Philippine
Savings Bank three (3) loans in the total
amount of P35,000.00, the purpose of
which was to complete the construction of
the duplex-apartment. To secure payment
of the loans, the spouses executed in favor
of the petitioner three (3) promissory notes
and three (3) deeds of real estate
mortgages over the property subject
matter of this litigation.
4. The spouses failed to pay their monthly
amortizations. As a result thereof, the
petitioner bank foreclosed the mortgages.
5. The bank later emerged as highest bidder
in the public auction and consolidated its
ownership over the property in question.
6. On the other hand, the private respondent
filed an action against the spouses to
collect the unpaid cost of the construction
of the duplex- apartment docketed as Civil
Case No. 69228. During its pendency, the
private
respondent
succeeded
in
obtaining the issuance of a writ of
preliminary attachment, and pursuant
thereto, had the property in question
attached. Consequently, a notice of
adverse claim was annotated at the back
of Transfer Certificate of Title No. 86195.
7. Several years later, a decision was
rendered in Civil Case No. 69228 in favor
of the private respondent but Spouses
refused to deliver to Ramos his pro-rata
share of the duplex-apartment.
8. Rmaos maintains that the proceedings
before the Court below can qualify as a
general liquidation of the estate of the
Spouses because the only existing
property of said spouses is the property
subject matter of this litigation.
Issue: Whether the case at bar partakes of the
nature of general liquidation of an estate to
merit the application of Article 2249 and 2242
of the NCC (concurrence and preference of
credits).
Held: No.
A careful considering of this petition leads us
to agree with the petitioner. The conclusions
of the lower court are not supported by the
law and the facts.
Under the De Barreto decision, the full
application of Articles 2242 and 2249
demands that there must first be some
proceeding where the class of all the preferred
creditors may be bindingly adjudicated, such
as insolvency, the settlement of a decedent's
estate under Rule 87 of the Rules of Court, or
other liquidation proceedings of similar
import.
The proceedings in the court below do not
partake of the nature of the insolvency
proceedings or settlement of a decedent's
estate. The action filed by Ramos was only
to collect the unpaid cost of the
construction of the duplex apartment. It is
far from being a general liquidation of the
estate of the Tabligan spouses.
In the case at bar, although the lower court
found that "there were no known creditors
other than the plaintiff and the defendant
herein", this can not be conclusive.
It will not bar other creditors in the event they
show up and present their claims against the
petitioner bank, claiming that they also have
preferred liens against the property involved.
Consequently, Transfer Certificate of Title No.
101864 issued in favor of the bank which is
supposed to be indefeasible would remain
constantly unstable and questionable. Such
could not have been the intention of Article
2243 of the Civil Code although it considers
claims and credits under Article 2242 as
statutory liens.
Festin (relevant legal principles):
The settlement of a decedent’s estate is a
proceeding in rem which is binding against the
whole world. All persons having interest in the
subject matter involved, whether they were
notified or not, are equally bound.
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2. Heirs of Maglasang vs. Manila Banking Corp.
Facts:
1. Spouses Maglasang obtained a credit line
from respondent bank in the amount of
P350,000 which was secured by a REM
executed over 7 of their properties in
Ormoc and Leyte.
2. They availed of their credit line by securing
a P209k and P139k loan.
3. Thereafter, Flaviano Maglasang died
intestate and was survived by his wife,
Salud, and children.
4. The AIF, Edgar Maglasang filed and was
granted LOA of the intestate estate of
Flaviano.
5. During the pendency of the intestate
proceedings, Edgar and Oscar Maglasang
were able to obtain several loans from
respondent bank, secured by promissory
note which they signed.
6. Several years later, the surviving heirs
executed an EJ partition of the properties
of Flaviano’s estate terminating the
intestate proceedings.
7. However, the loan obligations owed by the
estate to respondent bank remained
unsatisfied despite being expressly
recognized by the probate court.
8. This prompted respondent bank to EJ
foreclose the mortgage covering the Sps.
Maglasang's properties and emerged as
the highest bidder at the public auction for
the amount of P350,000.00. 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
P250,601.05 as of May 31, 1981 against
the estate of Flaviano, his widow Salud
and petitioners, docketed as Civil Case
No. 1998-0.
9. Both the RTC and CA ruled that the
surviving heirs must pay the deficiency
amount.
10. 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. According to the CA, what
should apply is Act No. 3135 which
entitles respondent to claim the deficiency
amount after the extra-judicial foreclosure
of the real estate mortgage of Sps.
Maglasang's properties.
Issue: Whether the CA erred in affirming the
RTC’s award of the deficiency amount in favor
of respondent bank.
Held: YES
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.
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.
Anent the third remedy, it must be
mentioned that the same includes the
option of extra-judicially 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.
Festin (relevant legal principle):
Claims against the deceased persons should be
filed during the settlement proceedings of their
estate. 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
suppletoriy.
10
3. Fule vs Malvar
1.
Petitioner, Virginia Fule, filed and was
granted her petition for LOA over
decedent, Amado Garcia’s several
properties. She also moved and was
granted her ex parte motion to be
appointed as special administratix.
2.
Meanwhile, Preciosa Garcia filed a MR
contending that she should be preferred in
the appointment of special administratix
since she is the surviving spouse of
Amado.
3.
Fule then filed "Supplemental Petition for
the Appointment of Regular Administrator"
modifying the original petition in four
aspects:
(1) the allegation that during the lifetime of
the deceased Amado Garcia, he was
elected as Constitutional Delegate for the
First District of Laguna and his last place
of residence was at Calamba, Laguna;
(2) the deletion of the names of Preciosa
B. Garcia and Agustina Garcia as legal
heirs of Amado G. Garcia;
(3) the allegation that Carolina Carpio, who
was simply listed as heir in the original
petition, is the surviving spouse of Amado
G. Garcia and that she has expressly
renounced her preferential right to the
administration of the estate in favor of
Virginia G. Fule; and
(4) that Virginia G. Fule be appointed as
the regular administratrix.
4.
5.
6.
The admission of this supplemental
petition was opposed by Preciosa B.
Garcia for the reason, among others, that
it attempts to confer jurisdiction on the
Court of First Instance of Laguna, of which
the court was not possessed at the
beginning because the original petition
was deficient.
During the hearing of the various
incidents of this case before Judge
Malvar, Petioner Fule presented the
death certificate of Amado Garcia
showing that his residence at the time
of his death was Quezon City. But she
also testified that Amado Garcia was
residing in Calamba, Laguna at the time
of his death, and that he was a delegate
to the 1971 Constitutional Convention
for the first district of Laguna.
The CA ruled in favor of Garcia, annulling
the proceedings before Judge Malvar for
lack of jurisdiction. Denied of their motion
for reconsideration on Fule forthwith
elevated the matter to the SC on appeal by
certiorari. The case was docketed as G.R.
No. L-40502 (1st case).
7.
However, even before Virginia Fule could
receive the decision of the Court of
Appeals, Preciosa Garcia had already filed
a petition for letters of administration
before the CFI of Rizal, Quezon City
Branch, docketed as Sp. Proc. No. Q19738, over the same intestate estate of
Amado G. Garcia. She was then appointed
as special administratix by Judge Ericta.
8.
Next, VIRGINIA G. FULE then instituted in
G.R. No. L-42670, a petition for certiorari
with temporary restraining order, to annul
the proceedings in Sp. Proc. No. Q-19738
and to restrain Judge Ernani Cruz Paño
(who succeeded Judge Ericta) from further
acting in the case.
Legal Principles:
à Section 1, Rule 73 (formerly Rule 75,
Section 1), specifically the clause "so far as it
depends on the place of residence of the
decedent, or of the location of the estate," is
in reality a matter of venue, as the caption of
the Rule indicates: "Settlement of Estate of
Deceased Persons. Venue and Processes."
It could not have been intended to define the
jurisdiction over the subject matter, because
such legal provision is contained in a law of
procedure dealing merely with procedural
matters. Procedure is one thing; jurisdiction
over the subject matter is another. The power
or authority of the court over the subject
matter "existed and was fixed before
procedure in a given cause began."
à What does the term “resides” mean?
The term 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.
Issue: What was the last place of residence of
the deceased, Amado Garcia?
11 Carmel Avenue, Carmel Subdivision,
Quezon City, and not at Calamba, Laguna. A
death certificate is admissible to prove the
residence of the decedent at the time of his
death.
11
4. Quiazon vs Belen
Facts:
1.
Eliseo Quiazon died intestate. A petition
for LOA of his estate was filed by his
common-law wife, Lourdes and his
daughter Elise.
2.
This was opposed by the decedent’s wife
Amelia and children Jenneth and Jennifer
on the ground of improper venue.
3.
The latter claimed that it should have been
filed in Capas, Tarlac where Eliseo is a
resident of and not in Las Piñas where he
lived at the time of his death.
Issue: Whether the proper venue for the filing
of the LOA is in Las Piñas or in Capas, Tarlac.
Held: The case was properly filed in Las Piñas
City, the place where the decedent resides at
the time of his death.
Under Section 1, Rule 73 of the ROC, the
petition for LOA 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.
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.
5. Reynoso vs Santiago
Facts:
1.
Leoncio Cadiz and other heirs of
Salvadora
Obispo
presented
an
application in the Court of First Instance of
Quezon for the administration of the
property of the deceased, Salvadora
Obispo.
2.
Petitioners, Victorio and Juan Reynoso,
the decedent’s surviving spouse and
eldest son, respectively, opposed the
application and filed a document, which
purported to be the last will and testament
of
Salvadora
Obispo,
with
a
counterpetition for its probate.
3.
Upon trial the court rejected that
instrument as a forgery, but on appeal the
Court of Appeals reversed the finding of
the court below, found the will authentic
and drawn with all the formalities of law.
4.
Thereafter Petitioners Reynoso filed 2
petitions: the first prayed that the
appointed
special
amdministrator,
Palabrica be ordered to turn over the
properties of the deceased to them and
the second one asking that Victoria
Reynos be appointed executor of
Salvadora Obispo’s last will and
testament.
Issue: Whether the intestate proceeding
already commenced should be discontinued
and a new proceeding under a separate
number and title be constituted.
Held: Whether the intestate proceeding
already commenced should be discontinued
and a new proceeding under a separate
number and title should be constituted is
entirely a matter of form and lies within the
sound discretion of the court. In no manner
does it prejudice the substantial rights of
any of the heirs or creditors. Amor propio
is perhaps the only thing that is at stake on
this phase of the controversy.
The appointment of a special administrator is
justified only when there is delay in granting
letters testamentary or of administration
occasioned by an appeal from the allowance
or disallowance of a will or some other cause.
The Court of Appeals having decreed the
probate of the will and the appointment of an
albacea, there is no valid reason for the further
retention of the special administrator.
The appointment of a regular administrator is
necessary for the prompt settlement and
distribution of the estate. There are important
duties devolving on a regular administrator
which a special administrator can not perform,
and there are many actions to be taken by the
court which could not be accomplished
before a regular administrator is appointed.
But whether or not Victorio Reynoso should
be appointed as administrator we do not and
cannot of course decide in a petition for
mandamus. While the surviving spouse is
entitled to preference in the appointment
(section 6, Rule 79), circumstances might
warrant his rejection and the appointment of
someone else.
12
executrix and Ethel be ordered to account
for the properties received by them and
return the same to Maxine.
6. Roberts vs. Judge Leonidas
Facts:
1.
2.
Edward Grimm, an American resident of
Manila died on November 1977 and was
survived by his second wife, Maxine
Grimm and their 2 children, Edward II and
Linda, and by Juanita Grimm Morris and
Ethel Grimm Roberts (McFadden), his two
children by a first marriage which ended in
divorce.
Grimm executed two wills in San
Francisco, California on January 23, 1959.
One will disposed of his Philippine estate
described as conjugal property of himself
and his second wife. The second will
disposed of his estate outside the
Philippines.
8.
Maxine alleged that they were defrauded
due to the machinations of Ethel, that the
compromise agreement was illegal and
the intestate proceeding was void
because Grimm died testate so partition
was contrary to the decedent’s wills.
9.
Ethel filed a motion to dismiss the petition
which was denied by Judge Leonidas for
lack of merit.
ISSUE: Whether the judge committed grave
abuse of discretion amounting to lack of
jurisdiction in denying Ethel’s motion to
dismiss.
HELD:
The two wills and a codicil were
presented for probate in Utah by
Maxine on March 1978. Maxine
admitted that she received notice of the
intestate petition filed in Manila by Ethel
in January 1978. The Utah Court admitted
the two wills and codicil to probate on
April 1978 and was issued upon
consideration of the stipulation between
the attorneys for Maxine and Ethel.
We hold that respondent judge did not
commit any grave abuse of discretion,
amounting to lack of jurisdiction, in denying
Ethel’s motion to dismiss.
4.
Also in April 1978, Maxine and Ethel, with
knowledge of the intestate proceeding in
Manila, entered into a compromise
agreement in Utah regarding the estate.
5.
As mentioned, in January 1978, an
intestate proceeding was instituted by
Ethel. On March 1978, Maxine filed an
opposition and motion to dismiss the
intestate proceeding on the ground of
pendency of the Utah probate
proceedings.
The probate of the will is mandatory. It is
anomalous that the estate of a person who
died testate should be settled in an intestate
proceeding. Therefore, the intestate case
should be consolidated with the testate
proceeding and the judge assigned to the
testate proceeding should continue hearing
the two cases.
3.
6.
She submitted to the court a copy of
Grimm’s will. However, pursuant to the
compromise
agreement,
Maxine
withdrew the opposition and the motion
to dismiss. The court ignored the will
found in the record. The estate was
partitioned.
7.
In 1980, Maxine filed a petition praying for
the probate of the two wills (already
probated in Utah), that the partition
approved by the intestate court be set
aside and the letters of administration
revoked, that Maxine be appointed
A testate proceeding is proper in this case
because Grimm died with two wills and “no
will shall pass either real or personal property
unless it is proved and allowed” (Art. 838, Civil
Code; sec. 1, Rule 75, Rules of Court).
Festin (relevant legal principle)
It has been held that the probate of the will is
mandatory. It is anomalous that the estate of a
person who died testate should be settled in an
intestate proceeding and the judge assigned to
the testate proceeding should continue hearing
the 2 cases.
13
7. Uriarte vs CFI Negros Occidental
8. Advincula vs Hon. Teodoro (1956) EN BANC
Facts:
1. Juan Uriarte y Goite died in Spain and he
left reasonable properties in the
Philippines. Vicente Uriarte, who is
claiming to be the son and sole heir of the
deceased, filed a petition for the intestate
settlement of the estate of the deceased in
the Court of First Instance of Negros
Occidental.
Facts:
1. Emilio
Advincula,
was
special
administrator, later, regular administrator
of the estate of his deceased wife, Josefa
Lacson Advincula.
2. However, said petition was opposed by
the nephews of Juan stating that there is a
valid will left by the deceased in Spain, a
copy of which is being requested. Then,
the nephews filed a settlement of the
estate in the court of Manila, on the basis
of the alleged will of the deceased.
3. Vicente filed an opposition to the
settlement of estate in the court of Manila
stating that the court of Negros Occidental
has already acquired original jurisdiction
over the case.
4. The opposition of Vicente was dismissed
together with the intestate settlement In
the CFI of Negros.
5. Hence, Vicente filed a petition for certiorari
questioning the dismissal of the intestate
settlement in the CFI of Negros.
Issue: Whether the intestate settlement
should be dismissed.
Held:
When the estate to be settled is that of a nonresident alien — like the decedent in the
instant case — the Courts of First Instance in
provinces where the deceased left any
property have concurrent jurisdiction to take
cognizance of the proper special proceeding
for the settlement of his estate.
Testate proceedings for the settlement of the
estate of a deceased person take precedence
over intestate proceedings for the same
purpose.
Thus, if in the course of intestate proceedings
pending before a court of first instance it is
found that the decedent had left a last will,
proceedings for the probate of the latter
should replace the intestate proceedings even
if at that stage an administrator had already
been appointed, the latter being required to
render final account and turn over the estate
in his possession to the executor
subsequently appointed.
2. Thereafter, the brothers of the deceased
submitted to the court, a document
purporting to be the deceased’s last will
and testament. Enrique Lacson, one of
Josefa’s also submitted that he be
appointing administrator of said estate.
3. Respondent Judge revoked Advincula and
appointed Lacson as the administrator of
the estate. The latter then gave the
requisite bond, LOA was issued to him,
and he tried to take possession of the
estate.
4. This prompted petitioner Advincula to file
the present action for certiorari against the
orders of respondent Judge upon the
ground they were issued with grave abuse
of discretion.
Issue: Whether the petition for certiorari filed
by Advincula has merit and should be granted.
Held: Yes.
Lacson's appointment, in lieu of Advincula, as
administrator of the estate of Josefa Lacson
Advincula, is predicated upon the fact that the
former is named executor in the alleged will of
said deceased. The provision therein to this
effect cannot be enforced, however, until after
said document has been allowed to probate
(Section 4, Rule 79 of the ROC).
Besides, the discovery of a document
purporting to be the last will and testament of
a deceased, after the appointment of an
administrator of the estate of the latter, upon
the assumption that he or she had died
intestate, does not ipso facto nullify the
letters of administration already issued or
even authorize the revocation thereof, until
the alleged will has been "proved and
allowed by the court (Section 1, Rule 83 of
the ROC).
14
9. David et al vs Calilung (2021) EN BANC
1. Lucila married Rene Aguas, together they
begot five children, petitioners – Aguas
heirs.
2. Thereafter Rene filed for and was granted
the nullity of his marriage from Lucila on
the ground of psychological incapacity.
The same Decision also ordered for the
division of their conjugal properties
consisting of the lot covered by TCT No.
90811 and the house standing thereon
(Sunset Valley Estate), as well as for the
support and delivery of presumptive
legitimes of their common children.
3. However, the 2005 Nullity Decision, as
well as its certificate of finality was not
registered with the Office of the Registry of
Deeds of Angeles City, thus, no annotation
of the said Decision on TCT No. 90811
was ever made. Also, actual partition of
the Sunset Valley Estate had not been
undertaken and the presumptive legitimes
of the Aguas heirs were not delivered.
4. On October 2006, Rene contracted a
second marriage with Cherry and later
died intestate on 2015.
5. Cherry filed a petition for the settlement
of the intestate estate of Rene but
Lucila and the Aguas heirs opposed
arguing that there was no liquidation or
separation of the properties acquired
during the marriage in accordance with
the provisions of the Family Code.
6. Lucila and the Aguas heirs also filed with
the RTC of Angeles City – Branch 59, a
petition for Declaration of Nullity of
Marriage of Rene and Cherry on the
ground that the said subsequent marriage
was entered into without complying the
provisions in Arts 52 & 53 of the FC.
7. Branch 59 argued that since the case
involves a collateral attack on the
validity of the marriage, it does not fall
within its jurisdiction as a Family Court.
8. When the case was re-raffled to Branch
60, said Court said that since the
petition is hinged upon the validity of
marriage, it no longer has jurisdiction
since it is no longer a Family Court.
9. Hence, this petition brought by the
aggrieved petitioners.
Issue: Whether it is Branch 59 or Branch 60
which has jurisdiction over the RTC petition
for declaration of nullity of marriage.
Held: The petition for declaration of nullity of
marriage is under the jurisdiction of the RTC
branch designated as Family Court pursuant
to RA 8369 when there is one in the area.
In the case at bar, Branch 59 was
designated as Family Court to exercise
exclusive jurisdiction over family cases,
thus it had jurisdiction over the subject
matter of the RTC petition.
Also, Aguas heirs can collaterally attack the
validity of Rene and Cherry’s marriage in the
proceedings for the settlement of the estate of
Rene.
As explained in Enrico, while A.M. No. 02-1110-SC declares that a petition for declaration
of absolute nullity of void marriage may be
filed solely by the husband or the wife, it does
not mean that the compulsory or intestate
heirs are already without any recourse under
the law. They can still protect their
successional right, for, as stated in the
Rationale of the Rules on Annulment of
Voidable Marriages and Declaration of
Absolute Nullity of Void Marriages, Legal
Separation and Provisional Orders (Rationale
of the Rules), compulsory or intestate heirs
can still question the validity of the marriage
of the spouses, not in a proceeding for
declaration of nullity, but upon the death of a
spouse in a proceeding for the settlement of
the estate of the deceased spouse filed in the
regular courts.
As stated, Section 1, Rule 73 grants to the
court first taking cognizance of the settlement
of the decedent's estate the exclusive
jurisdiction to hear and decide all matters
relating to the settlement and liquidation of the
decedent's estate to the exclusion of all other
courts of concurrent jurisdiction.
The main function of the settlement of estate
proceedings is to settle and liquidate the
estates of deceased persons. Integral to this
process is the determination of the assets that
form part of the decedent’s estate, the heirs
who shall participate in said estate, and the
amount of proportion of these heirs’
respective shares therein. Certainly Br 59,
which is handling the Settlement Proceeding,
has primary and exclusive subject matter
jurisdiction over the Aguas heirs’ successional
rights and share in Rene’s estate where they
can collaterally attack the validity of marriage.
15
10. Alferez vs Spouses Canencia
1. Federico Alferez died intestate and was
survived by his spouse, Teodora and 3
children, namely: Ma. Concepcion,
Antonio, and Esperanza.
2. Thereafter, Ma. Concepcion filed and was
issued LOA by the court, appointing her as
administratrix of the Estate of Federico.
3. By reason of the outstanding debts
incurred by the late Federico, part of his
needed to be sold to settle the same.
Necessarily,
Ma.
Concepcion
as
administratrix was constrained to file an
Urgent Motion to Allow her to Sell
Properties.
4. She also executed a Deed of Sale with
Assumption of Mortgage with respondent
Spouses Canencia for a consideration of
P300k.
5. Petitioners, later filed an action for
Annulment and/or Declaration of Nullity of
Deed of Sale with Assumption of
Mortgage, Recovery of Possession,
Damages,
and
Attorney's
Fees.
Petitioners assert that during negotiations
with respondents, they were clear that the
land forming part of Federico and
Teodora's estate, which was about 71
hectares, was not entirely for sale; what
they intended to sell was only the half of
Federico.
6. When the last yearly installment for the
portion belonging to Federico was settled
by respondents Canencia in 1990, Ma.
Concepcion
reminded
respondents
Canencia of their agreement regarding the
purchase of the conjugal share of
Teodora.
To
her
astonishment,
respondents Canencia instead showed
her the supposed temporary Deed, telling
her that they had already paid for the entire
estate of Federico and Teodora.
7. Respondents Canencia, presented their
own version of the facts: … After fully
paying the consideration of the sale on,
respondents requested petitioner to
facilitate the transfer of titles to them. To
their surprise, Ma. Concepcion refused to
accede to their request. Instead, she filed
an action before the RTC for Annulment of
Deed of Sale and Recovery of Possession.
8. RTC ruled in favor of respondents but CA
declared void the judgement of the RTC
for lack of jurisdiction.
In finding the assailed RTC Judgment to
be suffering from jurisdictional infirmity,
the CA cites Rule 73, Section 1 of the
Rules of Court, which provides that "the
court first taking cognizance of the
settlement of the estate of a decedent
shall exercise jurisdiction to the exclusion
of all other courts."
Here, when Federico died intestate, he left
behind several bank debts. As a result, his
heirs, herein petitioners, instituted
intestate proceedings before the CPI,
Branch 5 of Davao del Sur. Undoubtedly,
CPI, Branch 5, being the court to first take
cognizance of the settlement of the
intestate estate of the late Federico,
acquired jurisdiction over the properties to
the exclusion of all other courts. RTC,
Branch 19, in issuing the assailed
Judgment, encroached on the jurisdiction
of the CPI, Branch 5.
Issue: Which court has jurisdiction over the
case at bar.
The law is clear: an action for probate, both
testate and intestate, as in this case, is
cognizable by the CFI, now the RTC. By
concluding that the RTC, Branch 19, Davao
del Sur lacks jurisdiction pursuant to Section
1 of Rule 73, the CA has apparently confused
jurisdiction with venue, which pertains to the
place or geographical location where a case is
filed.
A party's objections to venue must be brought
at the earliest opportunity in a motion to
dismiss or in the answer; otherwise, the
objection shall be deemed waived. When the
venue of a civil action is improperly laid, the
court cannot motu proprio dismiss the case.
Wrong venue is merely a procedural infirmity,
not a jurisdictional impediment.
Respondents did not even object to the
allegedly wrongful venue of the complaint filed
by petitioners; in fact, they actively
participated in the case.
Consequently, in failing to raise their
objections to it either in a motion to dismiss or
in an answer, coupled with having sought
favorable judgment from the court,
respondents themselves have evinced an
acceptance on the venue of the action.
16
Parenthetically, it is indubitable that the CFI,
Branch 5, sitting as a probate court, is a
tribunal of limited jurisdiction. It acts on
matters pertaining to the estate, but never on
the rights to property arising from the
contract.
In Aranas v. Mercado, et al., the Court has
expounded that the jurisdiction of the trial
court as an intestate court is special and
limited. It cannot adjudicate title to
properties claimed to be part of the estate
but are claimed to belong to third parties
by title adverse to that of the decedent and
the estate. 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.
This rule is not without certain qualifications or
exceptions: if the interested parties are all
heirs, 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 decide the question of ownership.
The Court finds that the case does not fall
under any such exceptions. Obviously,
respondents, as interested parties and
purchasers of the lands, are not heirs of the
late Federico.
Further, the point in issue is glaringly not
one of collation or advancement; rather,
the question sought to be resolved by the
RTC, Branch 19, is one involving
ownership. Sans any applicable exceptions
in this case, CFI, Branch 5 is devoid of any
jurisdiction to decide on such issue. Thus,
with all the more reason should the Court
lend credence to the Judgment of the RTC,
Branch 19, as questions pertaining to
ownership
17
MODULE 3: RULE 74 (SUMMARY
SETTLEMENT OF ESTATE)
1. Utulo vs Vda. de Garcia
1. Juan Garcia Sanchez died intestate and
was survived by his wife, respondent Vda.
de Garcia and 3 children. The widow filed
for and was appointed as judicial
administratix.
2. Thereafter, the youngest child Luz Garcia
married the petitioner Utulo and during the
pendency
of
the
administration
proceedings of the said deceased, she
died in the province without any legitimate
descendants, her only forced heirs being
her mother and her husband.
Festin (relevant legal principle):
GR: When a person dies leaving property, the
same should be judicially administered and the
competent court should appoint a qualified
administrator, in the order established in Section
6, Rule 78, in case the deceased left no will, or in
case he had left one, should he fail to name an
executor therein.
2 exceptions to GR of judicial administration:
1. Extrajudicial Settlement
2. Summary settlement of estates of small value
(not exceeding 10k)
3. Utulo then commenced in the same court
the judicial administration of the property
of his deceased wife, asking that he be
named the administrator of the property of
Juan Garcia Sanchez.
4. Vda. de Garcia, opposed the petition
alleging that inasmuch as the said
deceased left no indebtedness, there was
no occasion for the said judicial
administration; but she stated that should
the court grant the administration of the
property, she should be appointed the
administratrix thereof inasmuch as she
had a better right than the applicant.
5. TC ruled in favor of Vda. de Garcia.
Issue: Whether upon the admitted facts the
judicial administration of the property left by
the deceased Luz Garcia lies, with the
consequent appointment of an administrator
Held:
When a person died without leaving
pending obligations to be paid, his heirs,
whether or 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.
18
2. Buot vs Dujali
1. Buot filed before the RTC a petition for
letters of administration of the estate of
deceased Gregorio Dujali (Gregorio). Buot
alleged that she was a surviving heir of
Gregorio who died intestate. She also
claimed that since Gregorio’s death, there
had been no effort to settle his estate. And
that Dujali purportedly continued to
manage and control the properties to the
exclusion of all the other heirs.
2. Buot further alleged that Dujali, for no
justifiable reason, denied her request to
settle the estate. Thus, Buot asked that: (1)
an administrator be appointed to preserve
Gregorio’s estate; (2) a final inventory of
the properties be made; (3) the heirs be
established; and (4) the net estate be
ordered distributed in accordance with law
among the legal heirs.
3. Dujali filed an opposition with motion to
dismiss. According to Dujali, when an
estate has no debts, recourse to
administration proceedings is allowed only
when there are good and compelling
reasons. Where an action for partition
(whether in or out of court) is possible, the
estate should not be burdened with an
administration proceeding.
4. Buot maintains that heirs are not
precluded from instituting a petition for
administration if they do not, for good
reason, wish to pursue an ordinary action
for partition. In her case, she claims that
there are good reasons justifying her
recourse to administration proceedings:
(1) the Amended Extrajudicial Settlement
did not cover the entire estate; (2) there
has been no effort to partition the property;
(3) Dujali seeks to challenge Buot’ s status
as an heir; (4) other heirs have been
deprived of the properties of the estate;
and (5) other heirs, particularly Constancia
Dujali and Marilou Dujali, have already
manifested that they are amenable to the
appointment of an administrator.
Issue: Whether the LOA filed by Buot should
be granted.
Held: NO.
The Supreme Court held that the reasons
which Buot proffers to warrant the grant of her
petition for letters of administration do not
suffice to warrant the submission of
Gregorio’s
estate
proceedings.
to
administration
Buot’s allegation that the extrajudicial
settlement in this case did not cover
Gregorio’s entire estate is, by no means, a
sufficient
reason
to
order
the
administration of the estate. Whether the
extrajudicial settlement did in fact cover
the entire estate and whether an
extrajudicial settlement that does not cover
the entire estate may be considered valid
do not automatically create a compelling
reason to order the administration of the
estate
As to Buot’s other allegations that: (1) there
has been no effort to partition the estate; (2)
that Dujali challenges her status as an heir; (3)
that other heirs have been deprived of the
estate; and (4) these heirs are amenable to the
appointment of an administrator, we find that
none of these allegations actually prevent the
filing of an ordinary action for partition.
An action for partition is also the proper venue
to ascertain Buot’s entitlement to participate
in the proceedings as an heir. Not only would
it allow for the full ventilation of the issues as
to the properties that ought to be included in
the partition and the true heirs entitled to
receive their portions of the estate, it is also
the appropriate forum to litigate questions of
fact that may be necessary to ascertain if
partition is proper and who may participate in
the proceedings.
Section 1 of Rule 74, however, does not
prevent
the
heirs
from
instituting
administration proceedings if they have good
reasons for choosing not to file an action for
partition.
In the case of Rodriguez, et al. v. Tan, etc.
and Rodriguez, à Section 1 of Rule 74 does
not preclude the heirs from instituting
administration proceedings, even if the estate
has no debts or obligation, if they do not
desire to resort for good reasons to an
ordinary action of partition.
Said section is not mandatory or compulsory
as may be gleaned from the use made therein
of the word may.
In Pereira v. CA we refused to allow
administration proceedings where the only
reason why the appointment of an
administrator was sought so that one heir can
take possession of the estate from the other
heir.
19
3. Heirs of Morales vs. Agustin
1. Sps. Jayme and Telesfora Morales both
died intestate and were survived by their 4
children, namely: Vicente, Simeon, Jose,
Martina.
2. The respondent, Astrid Morales Agustin, is
a grandchild of Jayme, who initiated the
instant complaint for the partition of
Jayme’s property in Laoag City.
3. On the other hand, Ernesto Morales, as
one of the heirs of Vicente Morales, filed
an Answer with Motion to Dismiss and
Compulsory Counter- claims. He alleged
that herein respondent has no cause of
action against the petitioners because: (1)
the proper remedy should not be a
complaint for partition but an action for the
settlement of the intestate estate of Jayme
and his wife; and (2) herein respondent has
no more right of participation over the
subject property because the same has
long been conveyed to Ernesto Morales
(as substituted by herein petitioners) by
the respondent's parents, Simeon and
Leonila Morales.
4. RTC rendered its decision via a summary
judgment in favor of herein respondent.
RTC ruled that: (1) the estate of a
deceased who died intestate may be
partitioned without need of any settlement
or administration proceeding; and (2) the
RTC properly and lawfully rendered
summary judgment despite the absence of
any motion from any of the parties praying
for the application of the rules thereon.
5. Aggrieved, the petitioners elevated the
case to the CA, which dismissed their
appeal and affirmed the RTC decision.
Issue: Whether the partition of the subject
property is proper despite the absence of the
settlement of the estate of the deceased
registered owner thereof.
According to Rule 74 of the Rules of Court, the
heirs may resort to an ordinary action of
partition of the estate of the deceased if they
disagree as to the exact division of the estate,
and only "[i]f 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 ordinary action for partition therefore
is meant to take the place of the special
proceeding on the settlement of the estate.
The reason is that, if the deceased dies
without pending obligations, there is no
necessity for the appointment of an
administrator to administer the estate for the
heirs and the creditors, much less, the
necessity to deprive the real owners of their
possession to which they are immediately
entitled.
In the case at hand, the parties are the heirs of
the late Jayme Morales. The land being
sought to be divided was a property duly
registered under Jayme's name. Necessarily,
therefore, the partition invoked by the
respondents is the partition of the estate of the
deceased Jayme.
As such, when the petitioners alleged in their
answer that there is yet another property that
needs to be partitioned among the parties,
they were actually invoking the Civil Code
provisions, not on Co-ownership, but on
Succession, which necessarily includes
Article 1601 of the Civil Code – the provision
on collation. It is therefore proper for the trial
court to have delved into this issue presented
by the petitioner instead of disregarding the
same and limiting itself only to that singular
property submitted by the respondent for
partition.
Nonetheless, lest it be misunderstood, the law
does not prohibit partial partition. In fact, the
Court, in administration proceedings, have
allowed partition for special instances. But the
Court should caution that this power should
be exercised sparingly. This is because a
partial partition and distribution of the
estate does not put to rest the question of
the division of the entire estate.
In this case, the Court is of the opinion that
there is no cogent reason to render the
partition of one of Jayme's properties and
totally ignore the others, if any. Absent any
circumstance that would warrant the partial
partition and distribution of Jayme's estate,
the prudent remedy is to settle the entirety of
the estate in the partition proceedings in the
court a quo.
Besides, as stated by the Court in Gulang, it is
quite unnecessary to require the plaintiff to file
another action, separate and independent
from that of partition originally instituted. This
would entail wastage of additional time and
resources, which could already be avoided
through consolidated proceedings in the court
a quo.
20
4. Figuracion-Gerilla vs. Vda. de Figuracion
1. On August 23, 1955, Leandro Figuracion
executed a deed of quitclaim over his real
properties in favor of his six children.
2. When he died in 1958, he left behind two
parcels of land. Leandro had inherited
both lots from his deceased parents.
3. What gave rise to the complaint for
partition, however, was a dispute between
petitioner and her sister, respondent Mary,
over the eastern half of Lot.
4. While petitioner points out that the estate
is allegedly without any debt and she and
respondents are Leandro Figuracion’s
only legal heirs, she does not dispute the
finding of the CA that “certain expenses”
including those related to her father’s final
5. illness and burial have not been properly
settled.
Issue: Whether an action for partition is
appropriate in this case.
Held: No.
In a situation where there remains an issue as
to the expenses chargeable to the estate,
partition is inappropriate. While petitioner
points out that the estate is allegedly without
any debt and she and respondents are
Leandro Figuracion’s only legal heirs, she
does not dispute the finding of the CA that
“certain expenses” including those related to
her father’s final illness and burial have not
been properly settled.
Thus, the heirs (petitioner and respondents)
have to submit their father’s estate to
settlement because the determination of
these expenses cannot be done in an
action for partition.
In estate settlement proceedings, there is a
proper procedure for the accounting of all
expenses for which the estate must answer. If
it is any consolation at all to petitioner, the
heirs or distributees of the properties may
take possession thereof even before the
settlement of accounts, as long as they first
file a bond conditioned on the payment of
the estate’s obligations.
21
5. Avelino vs. CA
1. Petitioner Maria Socorro Avelino is a
daughter and compulsory heir of the late
Antonio Avelino Sr., and the private
respondent is his wife, Angelina Avelino.
where the heirs disagree as to the partition of
the estate and no EJS is possible, then an
ordinary action for partition may be resorted
to, as in this case.
2. Petitioner filed before the RTC a petition
for the issuance of LA of the estate of
Antonio Avelino, Sr., who died on April 10,
1989. She asked to be appointed the
admin of the estate.
3. Respondents Angelina and the siblings
filed their opposition by filing a motion to
convert said judicial proceedings to an
action for judicial partition which petitioner
duly opposed.
4. Public respondent judge granted the
partition. Thus, petitioner filed a motion for
reconsideration which was denied.
Petitioner went to the CA and questioned
the grant to private respondents’ motion to
convert the judicial proceedings for the
issuance of LOA to an action for judicial
partition.
Issue: Whether respondent appellate court
committed an error of law and gravely abused
its discretion in upholding the TC’s finding that
a judicial partition is proper.
Held: No.
The heirs succeed immediately to all the rights
and properties of the deceased at the moment
of latter’s death. Section 1, Rule 74 of the
ROC, allows heirs to divide the estate among
themselves without need of delay and risks of
being dissipated.
When a person dies without leaving pending
obligations, his heirs, are not required to
submit the property for judicial administration,
nor apply for the appointment of an
administrator by the court.
The CA committed no reversible error when it
ruled that the lower court did not err in
converting petitioner’s action for LOA into an
action for judicial partition.
Nor can the Court sustain petitioner’s
argument that the Order of the TC converting
an action for LOA to one for judicial partition
has no basis in the ROC, hence procedurally
infirm.
The basis for the trial court’s Order is Section
1, Rule 74 of the ROC. It provides that in cases
22
6. Espinas-Lanuza vs Luna, Jr.
1. Simon had four children, namely,
Heriberto Velasco (Heriberto), Genoviva
Velasco (Genoviva), Felisa Velasco
(Felisa), and Juan Velasco (Juan). Felix
Luna, Jr. (Felix), is the son of Genoviva,
while Armando Velasco and Antonio
Velasco are the children of Heriberto
(collectively, respondents).
2. Respondents allege that Juan and Felisa,
through
deceit,
connivance,
and
misrepresentation, executed a Deed of
Extrajudicial Settlement and Sale dated
May 14, 1966, which adjudicated the
subject property to Leopoldo Espinas
(Leopoldo), son of Felisa. They further
contend that they discovered the fraud in
2010 when they came to know that Tax
Declaration No. 02-040- 0147 was issued
in Leopoldo's name.
3. In their defense, Lilibeth Espinas-Lanuza
and Onel Espinas (petitioners), children of
Leopoldo, argue that when Simon died
intestate, his children agreed to partition
his estate such that the property situated
in Magogon, Camalig, Albay went to
Genoviva and the parcel of land located in
Ting-ting, Taloto, Camalig, Albay went to
Heriberto.
4. RTC held that the sale by Felisa and Juan
of their respective undivided shares in the
co-ownership was valid and the vendee,
Leopoldo, became the owner of the shares
sold to him.
5. The CA reversed the RTC ruling and held
that Heriberto and Genoviva were
excluded in the execution of the EJS
entered into by Juan and Felisa as there
was no showing that Heriberto and
Genoviva were already deceased when
the deed was executed.
exercised acts of ownership, or otherwise
partly performed the partition agreement, that
equity will confirm such partition and in a
proper case decree title in accordance with
the possession in severalty.
In the case at bar, it has been shown that upon
the death of Simon, his children, Genoviva,
Heriberto, Juan and Felisa, orally partitioned
the estate among themselves, with each one
of them possessing their respective shares
and exercising acts of ownership.
It must be emphasized that no one among the
children of Simon disturbed the status quo
which has been going on from the year 1966.
To be sure, Genoviva and Heriberto were not
without knowledge that the subject property
was transferred to Leopoldo and that the latter
had introduced improvements thereon.
Hence, it can be gleaned unerringly that the
heirs of Simon agreed to orally partition his
estate among themselves, as evinced by their
possession of the inherited premises, their
construction of improvements thereon, and
their having declared in their names for
taxation purposes their respective shares.
Actual possession and exercise of dominion
over definite portions of the property in
accordance with an alleged partition are
considered strong proof of an oral partition.
On Laches: Respondents’ suit was instituted
in 2010, 44 years after the property was
conveyed to Leopoldo in 1966. Again,
respondents’
predecessors-in-interest,
Genoviva and Heriberto, could not have been
unaware of Leopoldo’s open and continuous
possession of the subject property.
Issue: Whether the deed of EJ partition
executed by the Velasco siblings was valid.
Held: YES.
Partition is the separation, division and
assignment of a thing held in common among
those to whom it may belong. It may be
effected extrajudicially by the heirs
themselves through a public instrument filed
before the register of deeds.
Citing Hernandez vs. Andal - oral partition
under which the parties went into possession,
23
7. Vda. De la Rosa vs. Heirs of Rustia
1. Luisa Delgado, the sister of Josefa, filed a
Petition on Letters of Administration of the
estate of deceased spouses Josefa
Delgado and Guillermo Rustia (died 1972
and 1974 respectively).
2. Such letter was opposed by Marciana
Rustia, a sister of Guillermo, claiming that
they should be the beneficiaries of the
estate.
3. The trial court then allowed Guillerma
Rustia, a legitimate child of Guillermo, to
intervene in the case as she claimed that
she possessed the status of an
acknowledged legitimate natural child,
hence, she should be the sole heir of the
estate.
4. Later, Luisa Delgado said that the spouses
were living together without marriage.
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
à In the appointment of an administrator, the
principal consideration is the interest in the
estate of the one to be appointed.
The order of preference does not rule out the
appointment of co-administrators, especially
in cases where justice and equity demand that
opposing parties or factions be represented in
the management of the estates, a situation
which obtains here.
It is in this light that we see fit to appoint joint
administrators, in the persons of Carlota
Delgado vda. de de la Rosa and a nominee of
the nephews and nieces of Guillermo Rustia.
They are the next of kin of the deceased
spouses Josefa Delgado and Guillermo
Rustia, respectively.
5. Luisa Delgado died and was substituted
dela Rosa (herein petitioner) in this case.
Festin (relevant legal principle):
6. The RTC appointed dela Rosa as the
administrator of the estates of the
deceased.
Adjudication by an heir of the decedent’s entire
estate to himself by means of an affidavit is only
allowed if he is the sole heir of the estate.
Issue: Who is entitled to the LOA over the
deceased couple’s intestate estate.
An administrator is a person appointed by the
Court to administer the intestate estate of the
decedent.
Section 6, Rule 78 of the ROC prescribes an
order of preference in the appointment of an
administrator:
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 a 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
24
8. Rebusquillo vs. Sps. Gualvez
1. Decedent was Eulalio Abarientos who was
survived by his wife, Victoria , six
legitimate children, and one illegitimate
child, namely: (1) Avelina AbarientosRebusquillo, petitioner in this case; (2)
Fortunata Abarientos-Orosco, the mother
of petitioner Salvador; (3) Rosalino
Abarientos; (4) Juan Abarientos; (5)
Feliciano
Abarientos;
(6)
Abraham
Abarientos; and (7) Carlos Abarientos.
2. On his death Eulialio left behind an untitled
parcel of land in Legazpi City consisting of
two thousand eight hundred sixty-nine
(2,869) square meters, more or less, which
was covered by TD No. 0141.
3. Petitioner, Avelina was supposedly made
to sign two (2) documents by her daughter
Emelinda Rebusquillo-Gualvez (Emelinda)
and her son-in-law Domingo Gualvez
(Domingo), respondents in this case, on
the pretext that the documents were
needed to facilitate the titling of the lot. It
was only in 2003, so petitioners claim,
that Avelina realized that what she
signed was an Affidavit of SelfAdjudication and a Deed of Absolute
Sale in favor of respondents.
4. As respondents purportedly ignored her
when she tried to talk to them, Avelina
sought the intervention of the RTC to
declare null and void the Deed of SelfAdjudication and Deed of Sale, reinstate
TD 0141 and so correct the injustice done
to the other heirs of Eulalio.
5. In their answer, respondents admitted
that the execution of the Affidavit of
Self-Adjudication and the Deed of Sale
was intended to facilitate the titling of
the subject property.
6. RTC ruled in favor or petitioners but CA
reversed the RTC ruling and held that
issues on heirship must be made in
administration or intestate proceedings,
not in an ordinary civil action.
Issue: Whether the issues on heirship in the
case at bar must be made in a separate
administration or intestate proceedings.
Held: No.
It has indeed been ruled that the declaration
of heirship must be made in a special
proceeding, not in an independent civil action.
However, this Court had likewise held that
recourse to administration proceedings to
determine who heirs are is sanctioned only if
there is a good and compelling reason for
such recourse.
Hence, the Court had allowed exceptions to
the rule requiring administration proceedings
as when the parties in the civil case already
presented their evidence regarding the issue
of heirship, and the RTC had consequently
rendered judgment upon the issues it defined
during the pre-trial.
Citing: Portugal vs. Porttugal-Beltran
Similar to Portugal, in the present case, there
appears to be only one parcel of land being
claimed by the contending parties as the
inheritance from Eulalio. It would be more
practical, as Portugal teaches, to dispense
with a separate special proceeding for the
determination of the status of petitioner
Avelina as sole heir of Eulalio, especially in
light of the fact that respondents spouses
Gualvez admitted in court that they knew for a
fact that petitioner Avelina was not the sole
heir of Eulalio and that petitioner Salvador was
one of the other living heirs with rights over the
subject land.
Accordingly, the court a quo had properly
rendered judgment on the validity of the
Affidavit of Self-Adjudication executed by
Avelina. As pointed out by the trial court, an
Affidavit of Self-Adjudication is only proper
when the affiant is the sole heir of the
decedent. The second sentence of Section 1,
Rule 74 of the Rules of Court is patently clear
that self-adjudication is only warranted when
there is only one heir:
Section 1. Extrajudicial settlement by
agreement between heirs. — . . . If
there is only one heir , he may
adjudicate to himself the entire estate
by means of an affidavit filed in the
office of the register of deeds. . . .
(emphasis supplied)
Festin (relevant legal principles):
As admitted by respondents, Avelina was not the
sole heir of Eulalio. In fact, petitioner Salvador is
one of the co-heirs by right of representation of
his mother. Without a doubt, Avelina had
perjured herself when she declared in the
affidavit that she is “the only daughter and sole
heir of the decedent-spouses.” The falsity of this
claim renders her act of adjudicating to herself
the inheritance left by her father invalid.
25
9. Sps. Benatiro vs. Heirs of Cuyos
1. When Evaristo Cuyos died in 1966, he left
six parcels of land in Daanbantayan, Cebu.
Gloria, one of Evatisto’s 9 children, was
appointed as administrator of his estate.
2. Subsequently, Atty. Taneo, the COC of the
CFI which granted the LOA to Gloria, was
appointed to act as Commissioner in
charge to effect the agreement of the heirs
and to prepare the project of partition of
the estate.
3. In his report, Atty. Taneo stated that in a
conference to arrive at an agreement for
partition attended by 6 out of 9 heirs, it was
agreed that the properties of the estate
would be sold to Columba Cuyos
Benatiro, one of the heirs of the decedent.
Held: NO.
The assailed order, which approved a void
Commissioner’s Report, is void for lack of due
process.
Citing Cua vs. Vargas – The procedure
outlined in Section 1, Rule 74 is an ex parte
proceeding.
This rule plainly states, however, that persons
who do not participate or had no notice of
extrajudicial settlement will not be bound
thereby. It contemplates a notice that has
been sent out or issued before any deed of
settlement and/or partition is agreed upon,
and not such an agreement that has already
been executed as what happened in the
instant case with the publication of the first
deed of EJS among the heirs.
4. Finding the terms of the agreement in
order, the CFI approved the compromise
agreement
embodied
in
the
Commissioner’s
Report.
Thus,
to
implement the agreement, Lope, the new
administrator, executed a Deed of
Absolute Sale in favor of Columba. Later,
the titles to the parcel of land acquired by
Columba were subsequently transferred to
Sps. Renato and Rosia Benatiro, also
herein petitioners.
The publication of the settlement does not
constitute constructive notice to the heirs
who had no knowledge or did not take part
in it because the same was notice after the
fact of execution.
5. In February 1988, or nearly 20 years later,
four of the heirs, filed with the CA a petition
for the annulment of the CFI order which
approved the compromise agreement
claiming that the Commissioner’s
Report practically deprived them of due
process, in that no meeting between the
heirs ever took place and that they
never received any payment from the
sale of their share in the inheritance.
In this connection, the records of the present
case confirm that respondents never signed
either of the settlement documents, having
discovered their existence only shortly before
the filing of the present complaint. Following
Rule 74, these EJSs do not bind respondents,
and the partition made without their
knowledge and consent is invalid insofar as
they are concerned.
The requirement of publication is geared
for the protection of creditors and was
never intended to deprive heirs of their
lawful participation in the decedent’s
estate.
6. CA granted the petition and annulled the
CFI order, concluding that the Report
never mentioned any of the names of
those present, but only mentioned the
names of those who were absent; that the
report did not contain the signatures of
those present; and that no evidence of
notice of the conference to the
respondents was presented. CA held that
since the order stemmed from a void
compromise agreement, the annulled
order had no legal effect.
Issue: Whether the TC order approving the
Commissioner’s Report (on the compromise
agreement without notice) was valid.
26
10. Cruz vs Cruz
(The present action involves a situation where
one heir was able — through the expedient of
an extrajudicial settlement that was written in
a language that is not understood by one of
her co-heirs — to secure a share in the estate
of her parents that was greater than that of her
siblings, in violation of the principle in
succession that heirs should inherit in equal
shares.)
1. Respondents
Angelito
S.
Cruz,
Concepcion S. Cruz (Concepcion), and
Serafin S. Cruz alleged that they —
together with their siblings, petitioner
Amparo S. Cruz (Amparo) and Antonia
Cruz (Antonia) — inherited a 940-squaremeter parcel of land (the subject property)
from their late parents, spouses Felix and
Felisa Cruz
2. On July 31, 1986, the parties executed a
deed of extrajudicial settlement of estate
covering the subject property, on the
agreement that each heir was to receive an
equal portion of the subject property as
mandated by law.
3. However, respondents discovered that
Antonia was allocated 2 lots, as against 1
for each of the heirs. Antonia's allocation
of two lots contravened the agreement
among the heirs that they would receive
equal shares in the subject property
4. Amparo and Antonia were able to
perpetrate the fraud by inducing
Concepcion — who was illiterate — to sign
the deed of extrajudicial settlement of
estate, taking advantage of her ignorance
and mental weakness.
However, while the CA was correct in ruling in
favor of Concepcion and setting aside the
subject deed of extrajudicial settlement, it
erred in appreciating and ruling that the case
involved fraud — thus applying the four-year
prescriptive period — when it should have
simply held that the action for the declaration
of nullity of the defective deed of extrajudicial
settlement does not prescribe, under the
circumstances, given that the same was a
total nullity.
Clearly, the issue of literacy is relevant to the
extent that Concepcion was effectively
deprived of her true inheritance, and not so
much that she was defrauded.
Citing Segura vs. Segura
It is clear that Section 1, Rule 74 does not
apply to the partition in question which was
null and void insofar as the plaintiffs were
concerned.
The partition in the present case was
invalid because it excluded 6 of the 9 heirs
who were entitled to equal shares in the
partitioned property.
Under the rule ‘no EJS shall be binding upon
any person who has not participated therein
or had no notice thereof.’ As the partition was
a total nullity and did not affect the excluded
heirs, it was not correct for the trial court to
hold that their right to challenge the partition
had prescribed after 2 years from execution.
5. Respondents prayed that the EJS be
declared null and void on the grounds of
fraud, deceit, misrepresentation or
mistake.
6. RTC ruled in favor of petitioners but the CA
reversed the RTC ruling and ruled in favor
of petitioners. It held that the consent
given by appellant Concepcion to the
subject EJS of estate was not given
voluntarily.
Issue: Whether the EJS executed by the heirs
should be declared void on the grounds of
fraud, deceit, misrepresentation, or mistake.
Held: NO.
27
11. Roman Catholic Bishop of Tuguegarao vs.
Prudencio
This is a case of exclusion of the rightful heirs
in the partition of the estate of the deceased,
followed by the sale of their shares to third
persons who claim good faith. Both petitioner
and Spouses Cepeda consistently contend
that they were not aware that any person,
other than the seller, has interest over the
Cagayan lot. Thus, they are innocent
purchasers for value.
1. Felipe Prudencio (Felipe) married twice
during his lifetime. With his first wife, Elena
Antonio (Elena), he begot five (5) children,
namely: Valentina, Eusebia, Paula,
Florentina and Avelina.
2. With his second wife, Teodora Abad
(Teodora), he had two (2) children namely:
Felipe Prudencio, Jr. (Prudencio, Jr.) and
Leonora.
3. During the 1st marriage of Felipe and Elena,
they acquired a 13 hectare parcel of land
in Cagayan. When Elena died, Felipe and
their children became co-owners of the
property.
4. When Felipe died intestate during his
second marriage, Teodora and his 2
children executed a EJS of the estate
Felipe with Waiver of Rights in favor of
Teodora.
5. While
the
Extra-Judicial
Partition
acknowledged that the Cagayan lot was
acquired during the marriage of Felipe and
Elena, it stated that Felipe and Elena did
not have any children who could inherit
the property; hence, Tedoroa and her
children with Felipe are the only living
heirs by operation of law. Accordingly,
title to the Cagayan lot was transferred to
Teodora’s name.
Cagayan lot, while the other undivided half
remained with Felipe. Upon the death of
Felipe,
respondents-appellees
then
became owners as well of Felipe's
conjugal share in the property, together
with Teodora, Prudencio, Jr. and Leonora.
8. Respondents-appellees argued that they
were fraudulently deprived of their rightful
shares in the estate of Felipe and Elena
when the EJ Partition declared Teodora as
the sole owner of the Cagayan lot.
Issue: Did the partition validly pass ownership
of the Cagayan lot to Teodora so that she had
the right to sell the entire lot.
In this case, it is undisputed that respondentsappellees were children of Felipe by his first
marriage. Teodora, Prudencio, Jr. and
Leonora did not deny respondents-appellees'
relation with Felipe. Despite this, however,
Teodora, Prudencio, Jr. and Leonora declared
in the Extra-Judicial Partition that they are the
only living heirs of Felipe by operation of law.
They claimed that Felipe had no child with his
first wife Elena, in effect depriving
respondents-appellees of their rightful shares
in the estate of their parents. They arrogated
upon themselves not only the share of Felipe
in the Cagayan lot but also the shares
belonging to respondents-appellees.
à Considering that respondents-appellees
have neither knowledge nor participation in
the EJ Partition, the same is a total nullity. It is
not binding upon them.
à The EJ Partition is void under Article
1409(1) or those whose cause, object or
purpose is contrary to law, morals, good
customs, public order or public policy. As a
consequence it has no force and effect from
the beginning, as if it had never been entered
into and it cannot be validated either by time
or ratification.
6. Thereafter, Teodora sold the Cagayan lot
to respondent Spouses Cepeda who in
turn sold the same to petitioner, Roman
Catholic Bishop of Tuguegarao.
7. Later, respondent-appellees filed a
Complaint for Partition with Reconveyance
against petitioner, Spouses Cepeda and
Teodora, Prudencio, Jr. and Leonora
before the RTC. They alleged that they are
the children and grandchildren of Felipe
by his first marriage. They asserted that
upon the death of Elena, they became the
owners of Elena's conjugal share on the
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12. Estate of Ortañez vs Lee
1. Dr. Ortañez organized and founded the
Philippine International Life Insurance
Company, Inc. (Philinterlife). At the time of
its incorporation, Dr. Ortañez owned
ninety percent (90%) of the subscribed
capital stock of Philinterlife.
2. Upon his death, he left behind an estate
consisting of 2,029 shares of stock in
Philinterlife, then representing at least
50.725% of the outstanding capital stock
of Philinterlife which was at 4,000 shares
valued at P4,000,000.00.
3. Petitioners filed a Complaint for Election
Contest before the RTC of Quezon City
challenging the lawfulness and validity of
the
meeting
conducted
by
the
respondents on March 15, 2006.
4. Petitioners, who insisted that they
represented at least 51% of the
outstanding capital stock of 5,000 shares
of Philinterlife, conducted on the same day
and in the same venue but in a different
room, their own annual stockholders'
meeting and proceeded to elect their own
set of directors, to wit: Rafael Ortañez,
Divina Ortañez-Enderes, Ligaya Novicio,
Cesar Ortañez and Leopoldo Tomas.
5. Petitioners complained that despite being
the true and lawful directors, they were
prevented by respondents to enter into the
office premises of Philinterlife's corporate
records and assets.
6. In their backgrounder, petitioners narrated
that on 15 April 1989 and 30 October
1991, the 2,029 shares of stock of the
Estate were sold to the group of Lee,
through an entity called Filipino Loan
Assistance Group (FLAG). By reason of
said sale, respondents took control of the
management of the corporation. In the
course of their management, and by voting
on the shares that they had illegally
acquired, respondents increased the
authorized capital stock of Philinterlife to
5,000 shares.
8. Respondents, for their part, categorically
denied the material allegations of the
complaint and raised the defense that the
stockholders' meeting they conducted on
15 March 2006 was valid as it was
allegedly attended by stockholders
representing 98.76% of the 50,000 shares
representing the authorized and issued
capital stock of Philinterlife.
9. RTC and CA ruled in favor of respondents.
Hence, this petition.
Issue: Who has the controlling interest over
Philinterlife the petitioner estate or the
respondents.
Held: RESPONDENTS.
We agree with the lower courts that the
petitioners failed to present credible and
convincing evidence that Philinterlife's
outstanding capital stock during the 15 March
2006 annual stockholders' meeting was 5,000
and that they own more than 2,550 shares or
51% thereof. The unrebutted presumption is
that respondents, as defendants below, were
duly elected as directors-officers of
Philinterlife
GR No. 146006 case
SC: We observed in the aforesaid decision
that Juliana Ortañez and her 3 sons invalidly
entered into a MOA extra-judicially
partitioning the intestate estate among
themselves, despite their knowledge that
there other heirs or claimants to the Estate and
before the final settlement of the Estate by the
intestate court.
Since the appropriation of the estate
properties was invalid, the subsequent sale
thereof by Juliana and Lee to a third party
(FLAG), without court approval, was likewise
void.
7. Petitioners were able to obtain a favorable
decision in the GR No. 146006 case ruling
that the sale of the shares of stock was null
and void. Notwithstanding this decision,
respondents still unlawfully held on to the
management and control of Philinterlife
and maliciously resisted and prevented all
their efforts to regain control and
management thereof.
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