G.R. No.

133743

February 6, 2007

EDGAR SAN LUIS, Petitioner,

vs.
FELICIDAD SAN LUIS, Respondent.
x ---------------------------------------------------- x
G.R. No. 134029

February 6, 2007

RODOLFO SAN LUIS, Petitioner,

vs.
FELICIDAD SAGALONGOS alias FELICIDAD SAN LUIS, Respondent.
DECISION
YNARES-SANTIAGO, J.:
Before us are consolidated petitions for review assailing the February 4, 1998 Decision 1 of the Court of
Appeals in CA-G.R. CV No. 52647, which reversed and set aside the September 12, 1995 2 and January
31, 1996 3Resolutions of the Regional Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and
its May 15, 1998 Resolution 4 denying petitioners motion for reconsideration.
The instant case involves the settlement of the estate of Felicisimo T. San Luis (Felicisimo), who was the
former governor of the Province of Laguna. During his lifetime, Felicisimo contracted three marriages. His
first marriage was with Virginia Sulit on March 17, 1942 out of which were born six children, namely:
Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On August 11, 1963, Virginia predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son, Tobias.
However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for Divorce 5 before the
Family Court of the First Circuit, State of Hawaii, United States of America (U.S.A.), which issued a
Decree Granting Absolute Divorce and Awarding Child Custody on December 14, 1973. 6
On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then surnamed Sagalongos, before
Rev. Fr. William Meyer, Minister of the United Presbyterian at Wilshire Boulevard, Los Angeles, California,
U.S.A. 7 He had no children with respondent but lived with her for 18 years from the time of their marriage
up to his death on December 18, 1992.
Thereafter, respondent sought the dissolution of their conjugal partnership assets and the settlement of
Felicisimos estate. On December 17, 1993, she filed a petition for letters of administration 8 before the
Regional Trial Court of Makati City, docketed as SP. Proc. No. M-3708 which was raffled to Branch 146
thereof.
Respondent alleged that she is the widow of Felicisimo; that, at the time of his death, the decedent was
residing at 100 San Juanico Street, New Alabang Village, Alabang, Metro Manila; that the decedents
surviving heirs are respondent as legal spouse, his six children by his first marriage, and son by his
second marriage; that the decedent left real properties, both conjugal and exclusive, valued

at P30,304,178.00 more or less; that the decedent does not have any unpaid debts. Respondent prayed
that the conjugal partnership assets be liquidated and that letters of administration be issued to her.
On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by his first marriage,
filed a motion to dismiss 9 on the grounds of improper venue and failure to state a cause of action.
Rodolfo claimed that the petition for letters of administration should have been filed in the Province of
Laguna because this was Felicisimos place of residence prior to his death. He further claimed that
respondent has no legal personality to file the petition because she was only a mistress of Felicisimo
since the latter, at the time of his death, was still legally married to Merry Lee.
On February 15, 1994, Linda invoked the same grounds and joined her brother Rodolfo in seeking the
dismissal10 of the petition. On February 28, 1994, the trial court issued an Order 11 denying the two
motions to dismiss.
Unaware of the denial of the motions to dismiss, respondent filed on March 5, 1994 her
opposition 12 thereto. She submitted documentary evidence showing that while Felicisimo exercised the
powers of his public office in Laguna, he regularly went home to their house in New Alabang Village,
Alabang, Metro Manila which they bought sometime in 1982. Further, she presented the decree of
absolute divorce issued by the Family Court of the First Circuit, State of Hawaii to prove that the marriage
of Felicisimo to Merry Lee had already been dissolved. Thus, she claimed that Felicisimo had the legal
capacity to marry her by virtue of paragraph 2, 13 Article 26 of the Family Code and the doctrine laid down
in Van Dorn v. Romillo, Jr. 14
Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately filed motions for
reconsideration from the Order denying their motions to dismiss. 15 They asserted that paragraph 2,
Article 26 of the Family Code cannot be given retroactive effect to validate respondents bigamous
marriage with Felicisimo because this would impair vested rights in derogation of Article 256 16 of the
Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage, filed a motion to disqualify
Acting Presiding Judge Anthony E. Santos from hearing the case.
On October 24, 1994, the trial court issued an Order 17 denying the motions for reconsideration. It ruled
that respondent, as widow of the decedent, possessed the legal standing to file the petition and that
venue was properly laid. Meanwhile, the motion for disqualification was deemed moot and
academic 18 because then Acting Presiding Judge Santos was substituted by Judge Salvador S. Tensuan
pending the resolution of said motion.
Mila filed a motion for inhibition 19 against Judge Tensuan on November 16, 1994. On even date, Edgar
also filed a motion for reconsideration 20 from the Order denying their motion for reconsideration arguing
that it does not state the facts and law on which it was based.
On November 25, 1994, Judge Tensuan issued an Order 21 granting the motion for inhibition. The case
was re-raffled to Branch 134 presided by Judge Paul T. Arcangel.
On April 24, 1995, 22 the trial court required the parties to submit their respective position papers on the
twin issues of venue and legal capacity of respondent to file the petition. On May 5, 1995, Edgar
manifested 23 that he is adopting the arguments and evidence set forth in his previous motion for

reconsideration as his position paper. Respondent and Rodolfo filed their position papers on June
14, 24 and June 20, 25 1995, respectively.
On September 12, 1995, the trial court dismissed the petition for letters of administration. It held that, at
the time of his death, Felicisimo was the duly elected governor and a resident of the Province of Laguna.
Hence, the petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It also ruled that
respondent was without legal capacity to file the petition for letters of administration because her marriage
with Felicisimo was bigamous, thus, void ab initio. It found that the decree of absolute divorce dissolving
Felicisimos marriage to Merry Lee was not valid in the Philippines and did not bind Felicisimo who was a
Filipino citizen. It also ruled that paragraph 2, Article 26 of the Family Code cannot be retroactively applied
because it would impair the vested rights of Felicisimos legitimate children.
Respondent moved for reconsideration
motions were denied. 28

26

and for the disqualification 27 of Judge Arcangel but said

Respondent appealed to the Court of Appeals which reversed and set aside the orders of the trial court in
its assailed Decision dated February 4, 1998, the dispositive portion of which states:
WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996 are hereby REVERSED and
SET ASIDE; the Orders dated February 28 and October 24, 1994 are REINSTATED; and the records of
the case is REMANDED to the trial court for further proceedings. 29
The appellante court ruled that under Section 1, Rule 73 of the Rules of Court, the term "place of
residence" of the decedent, for purposes of fixing the venue of the settlement of his estate, refers to the
personal, actual or physical habitation, or actual residence or place of abode of a person as distinguished
from legal residence or domicile. It noted that although Felicisimo discharged his functions as governor in
Laguna, he actually resided in Alabang, Muntinlupa. Thus, the petition for letters of administration was
properly filed in Makati City.
The Court of Appeals also held that Felicisimo had legal capacity to marry respondent by virtue of
paragraph 2, Article 26 of the Family Code and the rulings in Van Dorn v. Romillo, Jr. 30 and Pilapil v. IbaySomera. 31 It found that the marriage between Felicisimo and Merry Lee was validly dissolved by virtue of
the decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii. As a result,
under paragraph 2, Article 26, Felicisimo was capacitated to contract a subsequent marriage with
respondent. Thus
With the well-known rule express mandate of paragraph 2, Article 26, of the Family Code of the
Philippines, the doctrines in Van Dorn, Pilapil, and the reason and philosophy behind the enactment of
E.O. No. 227, there is no justiciable reason to sustain the individual view sweeping statement of
Judge Arc[h]angel, that "Article 26, par. 2 of the Family Code, contravenes the basic policy of our state
against divorce in any form whatsoever." Indeed, courts cannot deny what the law grants. All that the
courts should do is to give force and effect to the express mandate of the law. The foreign divorce having
been obtained by the Foreigner on December 14, 1992,32 the Filipino divorcee, "shall x x x have capacity
to remarry under Philippine laws". For this reason, the marriage between the deceased and petitioner
should not be denominated as "a bigamous marriage.
Therefore, under Article 130 of the Family Code, the petitioner as the surviving spouse can institute the
judicial proceeding for the settlement of the estate of the deceased. x x x 33

Edgar, Linda, and Rodolfo filed separate motions for reconsideration

Appeals.

34

which were denied by the Court of

On July 2, 1998, Edgar appealed to this Court via the instant petition for review on certiorari.
later filed a manifestation and motion to adopt the said petition which was granted. 36

35

Rodolfo

In the instant consolidated petitions, Edgar and Rodolfo insist that the venue of the subject petition for
letters of administration was improperly laid because at the time of his death, Felicisimo was a resident of
Sta. Cruz, Laguna. They contend that pursuant to our rulings in Nuval v. Guray 37 and Romualdez v. RTC,
Br. 7, Tacloban City, 38 "residence" is synonymous with "domicile" which denotes a fixed permanent
residence to which when absent, one intends to return. They claim that a person can only have one
domicile at any given time. Since Felicisimo never changed his domicile, the petition for letters of
administration should have been filed in Sta. Cruz, Laguna.
Petitioners also contend that respondents marriage to Felicisimo was void and bigamous because it was
performed during the subsistence of the latters marriage to Merry Lee. They argue that paragraph 2,
Article 26 cannot be retroactively applied because it would impair vested rights and ratify the void
bigamous marriage. As such, respondent cannot be considered the surviving wife of Felicisimo; hence,
she has no legal capacity to file the petition for letters of administration.
The issues for resolution: (1) whether venue was properly laid, and (2) whether respondent has legal
capacity to file the subject petition for letters of administration.
The petition lacks merit.
Under Section 1, 39 Rule 73 of the Rules of Court, the petition for letters of administration of the estate of
Felicisimo should be filed in the Regional Trial Court of the province "in which he resides at the time of his
death." In the case of Garcia Fule v. Court of Appeals, 40 we laid down the doctrinal rule for determining
the residence as contradistinguished from domicile of the decedent for purposes of fixing the venue of
the settlement of his estate:
[T]he term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or
domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be
interpreted in the light of the object or purpose of the statute or rule in which it is employed. In the
application of venue statutes and rules Section 1, Rule 73 of the Revised Rules of Court is of such
nature residence rather than domicile is the significant factor. Even where the statute uses the word
"domicile" still it is construed as meaning residence and not domicile in the technical sense. Some cases
make a distinction between the terms "residence" and "domicile" but as generally used in statutes fixing
venue, the terms are synonymous, and convey the same meaning as the term "inhabitant." In other
words, "resides" should be viewed or understood in its popular sense, meaning, the personal, actual or
physical habitation of a person, actual residence or place of abode. It signifies physical presence in a
place and actual stay thereat. In this popular sense, the term means merely residence, that is, personal
residence, not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in
a given place, while domicile requires bodily presence in that place and also an intention to make it ones
domicile. No particular length of time of residence is required though; however, the residence must be
more than temporary. 41 (Emphasis supplied)

It is incorrect for petitioners to argue that "residence," for purposes of fixing the venue of the settlement of
the estate of Felicisimo, is synonymous with "domicile." The rulings in Nuval and Romualdez are
inapplicable to the instant case because they involve election cases. Needless to say, there is a
distinction between "residence" for purposes of election laws and "residence" for purposes of fixing the
venue of actions. In election cases, "residence" and "domicile" are treated as synonymous terms, that is,
the fixed permanent residence to which when absent, one has the intention of returning. 42 However, for
purposes of fixing venue under the Rules of Court, the "residence" of a person is his personal, actual or
physical habitation, or actual residence or place of abode, which may not necessarily be his legal
residence or domicile provided he resides therein with continuity and consistency. 43 Hence, it is possible
that a person may have his residence in one place and domicile in another.
In the instant case, while petitioners established that Felicisimo was domiciled in Sta. Cruz, Laguna,
respondent proved that he also maintained a residence in Alabang, Muntinlupa from 1982 up to the time
of his death. Respondent submitted in evidence the Deed of Absolute Sale 44 dated January 5, 1983
showing that the deceased purchased the aforesaid property. She also presented billing
statements 45 from the Philippine Heart Center and Chinese General Hospital for the period August to
December 1992 indicating the address of Felicisimo at "100 San Juanico, Ayala Alabang, Muntinlupa."
Respondent also presented proof of membership of the deceased in the Ayala Alabang Village
Association 46 and Ayala Country Club, Inc., 47 letter-envelopes 48from 1988 to 1990 sent by the
deceaseds children to him at his Alabang address, and the deceaseds calling cards 49 stating that his
home/city address is at "100 San Juanico, Ayala Alabang Village, Muntinlupa" while his office/provincial
address is in "Provincial Capitol, Sta. Cruz, Laguna."
From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for purposes of fixing
the venue of the settlement of his estate. Consequently, the subject petition for letters of administration
was validly filed in the Regional Trial Court 50 which has territorial jurisdiction over Alabang, Muntinlupa.
The subject petition was filed on December 17, 1993. At that time, Muntinlupa was still a municipality and
the branches of the Regional Trial Court of the National Capital Judicial Region which had territorial
jurisdiction over Muntinlupa were then seated in Makati City as per Supreme Court Administrative Order
No. 3. 51 Thus, the subject petition was validly filed before the Regional Trial Court of Makati City.
Anent the issue of respondent Felicidads legal personality to file the petition for letters of administration,
we must first resolve the issue of whether a Filipino who is divorced by his alien spouse abroad may
validly remarry under the Civil Code, considering that Felicidads marriage to Felicisimo was solemnized
on June 20, 1974, or before the Family Code took effect on August 3, 1988. In resolving this issue, we
need not retroactively apply the provisions of the Family Code, particularly Art. 26, par. (2) considering
that there is sufficient jurisprudential basis allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr. 52 involved a marriage between a foreigner and his Filipino wife,
which marriage was subsequently dissolved through a divorce obtained abroad by the latter. Claiming that
the divorce was not valid under Philippine law, the alien spouse alleged that his interest in the properties
from their conjugal partnership should be protected. The Court, however, recognized the validity of the
divorce and held that the alien spouse had no interest in the properties acquired by the Filipino wife after
the divorce. Thus:
In this case, the divorce in Nevada released private respondent from the marriage from the standards of
American law, under which divorce dissolves the marriage. As stated by the Federal Supreme Court of
the United States in Atherton vs. Atherton, 45 L. Ed. 794, 799:

"The purpose and effect of a decree of divorce from the bond of matrimony by a competent jurisdiction
are to change the existing status or domestic relation of husband and wife, and to free them both from the
bond. The marriage tie, when thus severed as to one party, ceases to bind either. A husband without a
wife, or a wife without a husband, is unknown to the law. When the law provides, in the nature of a
penalty, that the guilty party shall not marry again, that party, as well as the other, is still absolutely freed
from the bond of the former marriage."
Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would
have no standing to sue in the case below as petitioners husband entitled to exercise control over
conjugal assets. As he is bound by the Decision of his own countrys Court, which validly exercised
jurisdiction over him, and whose decision he does not repudiate, he is estopped by his own
representation before said Court from asserting his right over the alleged conjugal property. 53
As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longer be considered
married to the alien spouse. Further, she should not be required to perform her marital duties and
obligations. It held:
To maintain, as private respondent does, that, under our laws, petitioner has to be considered still
married to private respondent and still subject to a wife's obligations under Article 109, et. seq. of the Civil
Code cannot be just. Petitioner should not be obliged to live together with, observe respect and fidelity,
and render support to private respondent. The latter should not continue to be one of her heirs with
possible rights to conjugal property. She should not be discriminated against in her own country if the
ends of justice are to be served. 54 (Emphasis added)
This principle was thereafter applied in Pilapil v. Ibay-Somera 55 where the Court recognized the validity of
a divorce obtained abroad. In the said case, it was held that the alien spouse is not a proper party in filing
the adultery suit against his Filipino wife. The Court stated that "the severance of the marital bond had the
effect of dissociating the former spouses from each other, hence the actuations of one would not affect or
cast obloquy on the other." 56
Likewise, in Quita v. Court of Appeals, 57 the Court stated that where a Filipino is divorced by his
naturalized foreign spouse, the ruling in Van Dorn applies. 58 Although decided on December 22, 1998,
the divorce in the said case was obtained in 1954 when the Civil Code provisions were still in effect.
The significance of the Van Dorn case to the development of limited recognition of divorce in the
Philippines cannot be denied. The ruling has long been interpreted as severing marital ties between
parties in a mixed marriage and capacitating the Filipino spouse to remarry as a necessary consequence
of upholding the validity of a divorce obtained abroad by the alien spouse. In his treatise, Dr. Arturo M.
Tolentino cited Van Dorn stating that "if the foreigner obtains a valid foreign divorce, the Filipino spouse
shall have capacity to remarry under Philippine law." 59 In Garcia v. Recio, 60 the Court likewise cited the
aforementioned case in relation to Article 26. 61
In the recent case of Republic v. Orbecido III, 62 the historical background and legislative intent behind
paragraph 2, Article 26 of the Family Code were discussed, to wit:
Brief Historical Background

On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise
known as the "Family Code," which took effect on August 3, 1988. Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited
under Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was
likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. A second paragraph was
added to Article 26. As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there as such, shall also be valid in this country, except
those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall have capacity to remarry under Philippine law. (Emphasis supplied)
xxxx
Legislative Intent
Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2 of
Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to
avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after
obtaining a divorce, is no longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo,
Jr. TheVan Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court held
therein that a divorce decree validly obtained by the alien spouse is valid in the Philippines, and
consequently, the Filipino spouse is capacitated to remarry under Philippine law. 63 (Emphasis added)
As such, the Van Dorn case is sufficient basis in resolving a situation where a divorce is validly obtained
abroad by the alien spouse. With the enactment of the Family Code and paragraph 2, Article 26 thereof,
our lawmakers codified the law already established through judicial precedent.1awphi1.net
Indeed, when the object of a marriage is defeated by rendering its continuance intolerable to one of the
parties and productive of no possible good to the community, relief in some way should be
obtainable. 64 Marriage, being a mutual and shared commitment between two parties, cannot possibly be
productive of any good to the society where one is considered released from the marital bond while the
other remains bound to it. Such is the state of affairs where the alien spouse obtains a valid divorce
abroad against the Filipino spouse, as in this case.
Petitioners cite Articles 15 65 and 17 66 of the Civil Code in stating that the divorce is void under Philippine
law insofar as Filipinos are concerned. However, in light of this Courts rulings in the cases discussed
above, the Filipino spouse should not be discriminated against in his own country if the ends of justice are
to be served. 67 In Alonzo v. Intermediate Appellate Court, 68 the Court stated:

But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its
purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should
be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should never be
interpreted in such a way as to cause injustice as this is never within the legislative intent. An
indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render
justice.
Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice
are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid,
may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a
situation, we are not bound, because only of our nature and functions, to apply them just the same, in
slavish obedience to their language. What we do instead is find a balance between the word and the will,
that justice may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded,
yielding like robots to the literal command without regard to its cause and consequence. "Courts are apt
to err by sticking too closely to the words of a law," so we are warned, by Justice Holmes again, "where
these words import a policy that goes beyond them."
xxxx
More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to render
every one his due." That wish continues to motivate this Court when it assesses the facts and the law in
every case brought to it for decision. Justice is always an essential ingredient of its decisions. Thus when
the facts warrants, we interpret the law in a way that will render justice, presuming that it was the intention
of the lawmaker, to begin with, that the law be dispensed with justice. 69
Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry Lee which
absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal personality to file the
present petition as Felicisimos surviving spouse. However, the records show that there is insufficient
evidence to prove the validity of the divorce obtained by Merry Lee as well as the marriage of respondent
and Felicisimo under the laws of the U.S.A. In Garcia v. Recio, 70 the Court laid down the specific
guidelines for pleading and proving foreign law and divorce judgments. It held that presentation solely of
the divorce decree is insufficient and that proof of its authenticity and due execution must be presented.
Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or official record
of a foreign country by either (1) an official publication or (2) a copy thereof attested by the officer having
legal custody of the document. If the record is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign
service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his
office. 71
With regard to respondents marriage to Felicisimo allegedly solemnized in California, U.S.A., she
submitted photocopies of the Marriage Certificate and the annotated text 72 of the Family Law Act of
California which purportedly show that their marriage was done in accordance with the said law. As stated
in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be alleged and
proved. 73

Therefore, this case should be remanded to the trial court for further reception of evidence on the divorce
decree obtained by Merry Lee and the marriage of respondent and Felicisimo.
Even assuming that Felicisimo was not capacitated to marry respondent in 1974, nevertheless, we find
that the latter has the legal personality to file the subject petition for letters of administration, as she may
be considered the co-owner of Felicisimo as regards the properties that were acquired through their joint
efforts during their cohabitation.
Section 6, 74 Rule 78 of the Rules of Court states that letters of administration may be granted to the
surviving spouse of the decedent. However, Section 2, Rule 79 thereof also provides in part:
SEC. 2. Contents of petition for letters of administration. A petition for letters of administration must be
filed by an interested person and must show, as far as known to the petitioner: x x x.
An "interested person" has been defined as one who would be benefited by the estate, such as an heir, or
one who has a claim against the estate, such as a creditor. The interest must be material and direct, and
not merely indirect or contingent. 75
In the instant case, respondent would qualify as an interested person who has a direct interest in the
estate of Felicisimo by virtue of their cohabitation, the existence of which was not denied by petitioners. If
she proves the validity of the divorce and Felicisimos capacity to remarry, but fails to prove that her
marriage with him was validly performed under the laws of the U.S.A., then she may be considered as a
co-owner under Article 144 76 of the Civil Code. This provision governs the property relations between
parties who live together as husband and wife without the benefit of marriage, or their marriage is void
from the beginning. It provides that the property acquired by either or both of them through their work or
industry or their wages and salaries shall be governed by the rules on co-ownership. In a co-ownership, it
is not necessary that the property be acquired through their joint labor, efforts and industry. Any property
acquired during the union is prima facie presumed to have been obtained through their joint efforts.
Hence, the portions belonging to the co-owners shall be presumed equal, unless the contrary is proven. 77
Meanwhile, if respondent fails to prove the validity of both the divorce and the marriage, the applicable
provision would be Article 148 of the Family Code which has filled the hiatus in Article 144 of the Civil
Code by expressly regulating the property relations of couples living together as husband and wife but are
incapacitated to marry. 78In Saguid v. Court of Appeals, 79 we held that even if the cohabitation or the
acquisition of property occurred before the Family Code took effect, Article 148 governs. 80 The Court
described the property regime under this provision as follows:
The regime of limited co-ownership of property governing the union of parties who are not legally
capacitated to marry each other, but who nonetheless live together as husband and wife, applies to
properties acquired during said cohabitation in proportion to their respective contributions. Co-ownership
will only be up to the extent of the proven actual contribution of money, property or industry. Absent proof
of the extent thereof, their contributions and corresponding shares shall be presumed to be equal.
xxxx
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-ownership of
properties acquired by the parties to a bigamous marriage and an adulterous relationship, respectively,
we ruled that proof of actual contribution in the acquisition of the property is essential. x x x

As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or
the nature of the case, asserts an affirmative issue. Contentions must be proved by competent evidence
and reliance must be had on the strength of the partys own evidence and not upon the weakness of the
opponents defense. x x x81
In view of the foregoing, we find that respondents legal capacity to file the subject petition for letters of
administration may arise from her status as the surviving wife of Felicisimo or as his co-owner under
Article 144 of the Civil Code or Article 148 of the Family Code.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals reinstating and affirming the
February 28, 1994 Order of the Regional Trial Court which denied petitioners motion to dismiss and its
October 24, 1994 Order which dismissed petitioners motion for reconsideration is AFFIRMED. Let this
case be REMANDED to the trial court for further proceedings.
SO ORDERED.
San Luis v San Luis digest

San Luis v San Luis

2007
G.R. No. 133743 February 6, 2007
EDGAR SAN LUIS, Petitioner,vs.FELICIDAD SAN LUIS, Respondent.
x ---------------------------------------------------- x
G.R. No. 134029 February 6, 2007
RODOLFO SAN LUIS, Petitioner,vs.FELICIDAD SAGALONGOS alias FELICIDAD SAN
LUIS, Respondent.
FACTS:
FACTS:
During his lifetime, Felicisimo contracted three marriages. His first marriage was with Virginia Sulit on
March 17, 1942 out of which were born six children, namely: Rodolfo, Mila, Edgar, Linda, Emilita and
Manuel. On August 11, 1963, Virginia predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son, Tobias.
However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for Divorce before the
Family Court of the First Circuit, State of Hawaii, United States of America (U.S.A.), which issued a
Decree Granting Absolute Divorce and Awarding Child Custody on December 14, 1973. On June 20,
1974, Felicisimo married respondent Felicidad San Luis, then surnamed Sagalongos, before Rev. Fr.
William Meyer, Minister of the United Presbyterian at Wilshire Boulevard, Los Angeles, California,
U.S.A. He had no children with respondent but lived with her for 18 years from the time of their marriage
up to his death on December 18, 1992.
Thereafter, respondent sought the dissolution of their conjugal partnership assets and the settlement of
Felicisimos estate. On December 17, 1993, she filed a petition for letters of administration before the
Regional Trial Court
On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by his first marriage,
filed a motion to dismiss on the grounds of improper venue and failure to state a cause of action. Rodolfo
claimed that the petition for letters of administration should have been filed in the Province of Laguna
because this was Felicisimos place of residence prior to his death. He further claimed that respondent
has no legal personality to file the petition because she was only a mistress of Felicisimo since the latter,
at the time of his death, was still legally married to Merry Lee.

DECISION OF LOWER COURTS:

(1) Trial Court: denied the motion to dismiss, ruled that respondent, as widow of the decedent, possessed
the legal standing to file the petition and that venue was properly laid. Mila filed a motion for
inhibition against Judge Tensuan on November 16, 1994. Thus, a new trial ensued.
(2) Trial Court (new): dismissed the petition for letters of administration. It held that, at the time of his
death, Felicisimo was the duly elected governor and a resident of the Province of Laguna. Hence, the
petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It found that the decree of
absolute divorce dissolving Felicisimos marriage to Merry Lee was not valid in the Philippines and did not
bind Felicisimo who was a Filipino citizen. It also ruled that paragraph 2, Article 26 of the Family Code
cannot be retroactively applied because it would impair the vested rights of Felicisimos legitimate
children.
(3) CA: reversed and set aside the orders of the trial court
ISSUES:
(1) Whether venue was properly laid, and
(2) Whether a Filipino who is divorced by his alien spouse abroad may validly remarry under the Civil
Code, considering that Felicidads marriage to Felicisimo was solemnized on June 20, 1974, or before the
Family Code took effect on August 3, 1988.
(3) Whether respondent has legal capacity to file the subject petition for letters of administration.
RULING:
(1) Yes, the venue was proper. Section 1, Rule 73 of the Rules of Court, the petition for letters of
administration of the estate of Felicisimo should be filed in the Regional Trial Court of the province "in
which he resides at the time of his death."
For purposes of fixing venue under the Rules of Court, the "residence" of a person is his personal, actual
or physical habitation, or actual residence or place of abode, which may not necessarily be his legal
residence or domicile provided he resides therein with continuity and consistency. While petitioners
established that Felicisimo was domiciled in Sta. Cruz, Laguna, respondent proved that he also
maintained a residence in Alabang, Muntinlupa from 1982 up to the time of his death. From the foregoing,
we find that Felicisimo was a resident of Alabang, Muntinlupa for purposes of fixing the venue of the
settlement of his estate.
(2) Yes. Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo, Jr. The Van
Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court held therein that a
divorce decree validly obtained by the alien spouse is valid in the Philippines, and consequently,
the Filipino spouse is capacitated to remarry under Philippine law. As such, the Van Dorn case is sufficient
basis in resolving a situation where a divorce is validly obtained abroad by the alien spouse. With the
enactment of the Family Code and paragraph 2, Article 26 thereof, our lawmakers codified the law already
established through judicial precedent.
The divorce decree allegedly obtained by Merry Lee which absolutely allowed Felicisimo to remarry,
would have vested Felicidad with the legal personality to file the present petition as Felicisimos surviving
spouse. However, the records show that there is insufficient evidence to prove the validity of the divorce
obtained by Merry Lee as well as the marriage of respondent and Felicisimo under the laws of the U.S.A.
With regard to respondents marriage to Felicisimo allegedly solemnized in California, U.S.A., she
submitted photocopies of the Marriage Certificate and the annotated text of the Family Law Act of
California which purportedly show that their marriage was done in accordance with the said law. As stated
in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be alleged and
proved.Therefore, this case should be remanded to the trial court for further reception of evidence on the
divorce decree obtained by Merry Lee and the marriage of respondent and Felicisimo.
(3) Yes. Respondents legal capacity to file the subject petition for letters of administration may arise from
her status as the surviving wife of Felicisimo or as his co-owner under Article 144 of the Civil Code or
Article 148 of the Family Code.
Even assuming that Felicisimo was not capacitated to marry respondent in 1974, nevertheless, we find
that the latter has the legal personality to file the subject petition for letters of administration, as she may

be considered the co-owner of Felicisimo as regards the properties that were acquired through their joint
efforts during their cohabitation.

G.R. No. 189121

July 31, 2013

AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFER QUIAZON, Petitioners,

vs.
MA. LOURDES BELEN, for and in behalf of MARIA LOURDES ELISE QUIAZON, Respondent.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the Revised Rules of Court,
primarily assailing the 28 November 2008 Decision rendered by the Ninth Division of the Court of Appeals
in CA-G.R. CV No. 88589,1 the decretal portion of which states:
WHEREFORE, premises considered, the appeal is hereby DENIED. The assailed Decision dated March
11, 2005, and the Order dated March 24, 2006 of the Regional Trial Court, Branch 275, Las Pias City are
AFFIRMED in toto.2
The Facts
This case started as a Petition for Letters of Administration of the Estate of Eliseo Quiazon (Eliseo), filed
by herein respondents who are Eliseos common-law wife and daughter. The petition was opposed by
herein petitioners Amelia Garcia-Quaizon (Amelia) to whom Eliseo was married. Amelia was joined by her
children, Jenneth Quiazon (Jenneth) and Maria Jennifer Quiazon (Jennifer).
Eliseo died intestate on 12 December 1992.
On 12 September 1994, Maria Lourdes Elise Quiazon (Elise), represented by her mother, Ma. Lourdes
Belen (Lourdes), filed a Petition for Letters of Administration before the Regional Trial Court (RTC) of Las
Pias City.3 In her Petition docketed as SP Proc. No. M-3957, Elise claims that she is the natural child of
Eliseo having been conceived and born at the time when her parents were both capacitated to marry
each other. Insisting on the legal capacity of Eliseo and Lourdes to marry, Elise impugned the validity of
Eliseos marriage to Amelia by claiming that it was bigamous for having been contracted during the
subsistence of the latters marriage with one Filipito Sandico (Filipito). To prove her filiation to the
decedent, Elise, among others, attached to the Petition for Letters of Administration her Certificate of Live
Birth4 signed by Eliseo as her father. In the same petition, it was alleged that Eliseo left real properties
worth P2,040,000.00 and personal properties worth P2,100,000.00. In order to preserve the estate of
Eliseo and to prevent the dissipation of its value, Elise sought her appointment as administratrix of her
late fathers estate.
Claiming that the venue of the petition was improperly laid, Amelia, together with her children, Jenneth
and Jennifer, opposed the issuance of the letters of administration by filing an Opposition/Motion to
Dismiss.5 The petitioners asserted that as shown by his Death Certificate, 6 Eliseo was a resident of
Capas, Tarlac and not of Las Pias City, at the time of his death. Pursuant to Section 1, Rule 73 of the
Revised Rules of Court,7 the petition for settlement of decedents estate should have been filed in Capas,
Tarlac and not in Las Pias City. In addition to their claim of improper venue, the petitioners averred that
there are no factual and legal bases for Elise to be appointed administratix of Eliseos estate.

In a Decision8 dated 11 March 2005, the RTC directed the issuance of Letters of Administration to Elise
upon posting the necessary bond. The lower court ruled that the venue of the petition was properly laid in
Las Pias City, thereby discrediting the position taken by the petitioners that Eliseos last residence was in
Capas, Tarlac, as hearsay. The dispositive of the RTC decision reads:
Having attained legal age at this time and there being no showing of any disqualification or incompetence
to serve as administrator, let letters of administration over the estate of the decedent Eliseo Quiazon,
therefore, be issued to petitioner, Ma. Lourdes Elise Quiazon, after the approval by this Court of a bond in
the amount of P100,000.00 to be posted by her.9
On appeal, the decision of the trial court was affirmed in toto in the 28 November 2008
Decision10 rendered by the Court of Appeals in CA-G.R.CV No. 88589. In validating the findings of the
RTC, the Court of Appeals held that Elise was able to prove that Eliseo and Lourdes lived together as
husband and wife by establishing a common residence at No. 26 Everlasting Road, Phase 5, Pilar
Village, Las Pias City, from 1975 up to the time of Eliseos death in 1992. For purposes of fixing the
venue of the settlement of Eliseos estate, the Court of Appeals upheld the conclusion reached by the
RTC that the decedent was a resident of Las Pias City. The petitioners Motion for Reconsideration was
denied by the Court of Appeals in its Resolution11 dated 7 August 2009.
The Issues
The petitioners now urge Us to reverse the assailed Court of Appeals Decision and Resolution on the
following grounds:
I. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THAT ELISEO QUIAZON WAS
A RESIDENT OF LAS PIAS AND THEREFORE, THE PETITION FOR LETTERS OF
ADMINISTRATION WAS PROPERLY FILED WITH THE RTC OF LAS PIAS;
II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT AMELIA GARCIAQUIAZON WAS NOT LEGALLY MARRIED TO ELISEO QUIAZON DUE TO PREEXISTING
MARRIAGE; AND
III. THE COURT OF APPEALS OVERLOOKED THE FACT THAT ELISE QUIAZON HAS NOT
SHOWN ANY INTEREST IN THE PETITION FOR LETTERS OF ADMINISTRATION.12
The Courts Ruling
We find the petition bereft of merit.
Under Section 1, Rule 73 of the Rules of Court, the petition for letters of administration of the estate of a
decedent should be filed in the RTC of the province where the decedent resides at the time of his death:
Sec. 1. Where estate of deceased persons settled. If the decedent is an inhabitant of the Philippines at
the time of his death, whether a citizen or an alien, his will shall be proved, or letters of administration
granted, and his estate settled, in the Court of First Instance now Regional Trial Court in the province in
which he resides at the time of his death, and if he is an inhabitant of a foreign country, the Court of First
Instance now Regional Trial Court of any province in which he had estate. The court first taking
cognizance of the settlement of the estate of a decedent, shall exercise jurisdiction to the exclusion of all

other courts. The jurisdiction assumed by a court, so far as it depends on the place of residence of the
decedent, or of the location of his estate, shall not be contested in a suit or proceeding, except in an
appeal from that court, in the original case, or when the want of jurisdiction appears on the record.
(Emphasis supplied).
The term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or
domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be
interpreted in the light of the object or purpose of the statute or rule in which it is employed. In the
application of venue statutes and rules Section 1, Rule 73 of the Revised Rules of Court is of such
nature residence rather than domicile is the significant factor.13 Even where the statute uses word
"domicile" still it is construed as meaning residence and not domicile in the technical sense. 14 Some cases
make a distinction between the terms "residence" and "domicile" but as generally used in statutes fixing
venue, the terms are synonymous, and convey the same meaning as the term "inhabitant." 15 In other
words, "resides" should be viewed or understood in its popular sense, meaning, the personal, actual or
physical habitation of a person, actual residence or place of abode. 16 It signifies physical presence in a
place and actual stay thereat.17 Venue for ordinary civil actions and that for special proceedings have one
and the same meaning.18 As thus defined, "residence," in the context of venue provisions, means nothing
more than a persons actual residence or place of abode, provided he resides therein with continuity and
consistency.19
Viewed in light of the foregoing principles, the Court of Appeals cannot be faulted for affirming the ruling of
the RTC that the venue for the settlement of the estate of Eliseo was properly laid in Las Pias City. It is
evident from the records that during his lifetime, Eliseo resided at No. 26 Everlasting Road, Phase 5, Pilar
Village, Las Pias City. For this reason, the venue for the settlement of his estate may be laid in the said
city.
In opposing the issuance of letters of administration, the petitioners harp on the entry in Eliseos Death
Certificate that he is a resident of Capas, Tarlac where they insist his estate should be settled. While the
recitals in death certificates can be considered proofs of a decedents residence at the time of his death,
the contents thereof, however, is not binding on the courts. Both the RTC and the Court of Appeals found
that Eliseo had been living with Lourdes, deporting themselves as husband and wife, from 1972 up to the
time of his death in 1995. This finding is consistent with the fact that in 1985, Eliseo filed an action for
judicial partition of properties against Amelia before the RTC of Quezon City, Branch 106, on the ground
that their marriage is void for being bigamous.20 That Eliseo went to the extent of taking his marital feud
with Amelia before the courts of law renders untenable petitioners position that Eliseo spent the final days
of his life in Tarlac with Amelia and her children. It disproves rather than supports petitioners submission
that the lower courts findings arose from an erroneous appreciation of the evidence on record. Factual
findings of the trial court, when affirmed by the appellate court, must be held to be conclusive and binding
upon this Court.21
Likewise unmeritorious is petitioners contention that the Court of Appeals erred in declaring Amelias
marriage to Eliseo as void ab initio. In a void marriage, it was though no marriage has taken place, thus, it
cannot be the source of rights. Any interested party may attack the marriage directly or collaterally. A void
marriage can be questioned even beyond the lifetime of the parties to the marriage. 22 It must be pointed
out that at the time of the celebration of the marriage of Eliseo and Amelia, the law in effect was the Civil
Code, and not the Family Code, making the ruling in Nial v. Bayadog 23 applicable four-square to the
case at hand. In Nial, the Court, in no uncertain terms, allowed therein petitioners to file a petition for the

declaration of nullity of their fathers marriage to therein respondent after the death of their father, by
contradistinguishing void from voidable marriages, to wit:
Consequently, void marriages can be questioned even after the death of either party but voidable
marriages can be assailed only during the lifetime of the parties and not after death of either, in which
case the parties and their offspring will be left as if the marriage had been perfectly valid. That is why the
action or defense for nullity is imprescriptible, unlike voidable marriages where the action prescribes. Only
the parties to a voidable marriage can assail it but any proper interested party may attack a void
marriage.24
It was emphasized in Nial that in a void marriage, no marriage has taken place and it cannot be the
source of rights, such that any interested party may attack the marriage directly or collaterally without
prescription, which may be filed even beyond the lifetime of the parties to the marriage. 25
Relevant to the foregoing, there is no doubt that Elise, whose successional rights would be prejudiced by
her fathers marriage to Amelia, may impugn the existence of such marriage even after the death of her
father. The said marriage may be questioned directly by filing an action attacking the validity thereof, or
collaterally by raising it as an issue in a proceeding for the settlement of the estate of the deceased
spouse, such as in the case at bar. Ineluctably, Elise, as a compulsory heir,26 has a cause of action for the
declaration of the absolute nullity of the void marriage of Eliseo and Amelia, and the death of either party
to the said marriage does not extinguish such cause of action.
Having established the right of Elise to impugn Eliseos marriage to Amelia, we now proceed to determine
whether or not the decedents marriage to Amelia is void for being bigamous.
Contrary to the position taken by the petitioners, the existence of a previous marriage between Amelia
and Filipito was sufficiently established by no less than the Certificate of Marriage issued by the Diocese
of Tarlac and signed by the officiating priest of the Parish of San Nicolas de Tolentino in Capas, Tarlac.
The said marriage certificate is a competent evidence of marriage and the certification from the National
Archive that no information relative to the said marriage exists does not diminish the probative value of
the entries therein. We take judicial notice of the fact that the first marriage was celebrated more than 50
years ago, thus, the possibility that a record of marriage can no longer be found in the National Archive,
given the interval of time, is not completely remote. Consequently, in the absence of any showing that
such marriage had been dissolved at the time Amelia and Eliseos marriage was solemnized, the
inescapable conclusion is that the latter marriage is bigamous and, therefore, void ab initio. 27
Neither are we inclined to lend credence to the petitioners contention that Elise has not shown any
interest in the Petition for Letters of Administration.
Section 6, Rule 78 of the Revised Rules of Court lays down the preferred persons who are entitled to the
issuance of letters of administration, thus:
Sec. 6. When and to whom letters of administration granted. If no executor is named in the will, or the
executor or executors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate,
administration shall be granted:

(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion
of the court, or to such person as such surviving husband or wife, or next of kin, requests to have
appointed, if competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected
by them, be incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty
(30) days after the death of the person to apply for administration or to request that administration
be granted to some other person, it may be granted to one or more of the principal creditors, if
competent and willing to serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to such other
person as the court may select.
Upon the other hand, Section 2 of Rule 79 provides that a petition for Letters of Administration must be
filed by an interested person, thus:
Sec. 2. Contents of petition for letters of administration. A petition for letters of administration must be
filed by an interested person and must show, so far as known to the petitioner:
(a) The jurisdictional facts;
(b) The names, ages, and residences of the heirs, and the names and residences of the creditors,
of the decedent;
(c) The probable value and character of the property of the estate;
(d) The name of the person for whom letters of administration are prayed.
But no defect in the petition shall render void the issuance of letters of administration.
An "interested party," in estate proceedings, is one who would be benefited in the estate, such as an heir,
or one who has a claim against the estate, such as a creditor. Also, in estate proceedings, the phrase
"next of kin" refers to those whose relationship with the decedent Is such that they are entitled to share in
the estate as distributees.28
In the instant case, Elise, as a compulsory heir who stands to be benefited by the distribution of Eliseos
estate, is deemed to be an interested party. With the overwhelming evidence on record produced by Elise
to prove her filiation to Eliseo, the petitioners pounding on her lack of interest in the administration of the
decedents estate, is just a desperate attempt to sway this Court to reverse the findings of the Court of
Appeals. Certainly, the right of Elise to be appointed administratix of the estate of Eliseo is on good
grounds. It is founded on her right as a compulsory heir, who, under the law, is entitled to her legitimate
after the debts of the estate are satisfied.29Having a vested right in the distribution of Eliseos estate as
one of his natural children, Elise can rightfully be considered as an interested party within the purview of
the law.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. Accordingly, the Court of
Appeals assailed 28 November 2008 Decision and 7 August 2009 Resolution, arc AFFIRMED in toto.

SO ORDERED.

DIGEST:
AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFERQUIAZON,
Petitioners,vs.
MA. LOURDES BELEN, for and in behalf of MARIA LOURDES ELISE QUIAZON,
Respondent.
G.R. No. 189121 July 31, 2013
FACTS
Elise Quiazon is the daughter of Eliseo Quiazon and his common-law wife Ma. LourdesBelen. When
Eliseo died intestate, Elise represented by her mother, Lourdes, filed a Petition forLetters of
Administration before the RTC of Las Pias City in order to preserve the estate ofEliseo and to prevent
the dissipation of its value. She likewise sought her appointment as
administratrix of her late fathers estate.
Amelia Quiazon, to whom Eliseo was married, together with her two children, filed anOpposition/Motion
to Dismiss on the ground of improper venue asserting that Eliseo was aresident of Capas, Tarlac and not
of Las Pias City. In addition to their claim of improper venue,the petitioners averred that there are no
factual and legal bases for Elise to be appointedadmi
nistratix of Eliseos estate.
RTC rendered a decision directing the issuance of Letters of Administration to Elise uponposting the
necessary bond. On appeal, the decision of the trial court was affirmed in toto bythe Court of Appeals. In
validating the findings of the RTC, the Court of Appeals held that Elisewas able to prove that Eliseo and
Lourdes lived together as husband and wife by establishing acommon residence at No. 26 Everlasting
Road, Phase 5, Pilar Village, Las Pias City, from 1975up to th
e time of Eliseos death in 1992. For purposes of fixing the venue of the settlement ofEliseos estate, the
Court of Appeals upheld the conclusion reached by the RTC that the
decedent was a resident of Las Pias City.
ISSUE/S:1.
Whether or not Las Pinas City was the proper venue.2.
Whether or not Elise is qualified to be administrator of the estate.

G.R. No. 177099

June 8, 2011

EDUARDO G. AGTARAP, Petitioner,

vs.
SEBASTIAN AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER DE SANTOS, and
ABELARDO DAGORO, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 177192
SEBASTIAN G. AGTARAP, Petitioner,
vs.
EDUARDO G. AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER DE SANTOS, and
ABELARDO DAGORO, Respondents.
DECISION
NACHURA, J.:

Before us are the consolidated petitions for review on certiorari of petitioners Sebastian G. Agtarap
(Sebastian)1and Eduardo G. Agtarap (Eduardo),2 assailing the Decision dated November 21, 20063 and
the Resolution dated March 27, 20074 of the Court of Appeals (CA) in CA-G.R. CV No. 73916.
The antecedent facts and proceedings
On September 15, 1994, Eduardo filed with the Regional Trial Court (RTC), Branch 114, Pasay City, a
verified petition for the judicial settlement of the estate of his deceased father Joaquin Agtarap (Joaquin).
It was docketed as Special Proceedings No. 94-4055.
The petition alleged that Joaquin died intestate on November 21, 1964 in Pasay City without any known
debts or obligations. During his lifetime, Joaquin contracted two marriages, first with Lucia Garcia
(Lucia),5 and second with Caridad Garcia (Caridad). Lucia died on April 24, 1924. Joaquin and Lucia had
three childrenJesus (died without issue), Milagros, and Jose (survived by three children, namely,
Gloria,6 Joseph, and Teresa7). Joaquin married Caridad on February 9, 1926. They also had three
childrenEduardo, Sebastian, and Mercedes (survived by her daughter Cecile). At the time of his death,
Joaquin left two parcels of land with improvements in Pasay City, covered by Transfer Certificates of Title
(TCT) Nos. 873-(38254) and 874-(38255). Joseph, a grandson of Joaquin, had been leasing and
improving the said realties and had been appropriating for himselfP26,000.00 per month since April 1994.
Eduardo further alleged that there was an imperative need to appoint him as special administrator to take
possession and charge of the estate assets and their civil fruits, pending the appointment of a regular
administrator. In addition, he prayed that an order be issued (a) confirming and declaring the named
compulsory heirs of Joaquin who would be entitled to participate in the estate; (b) apportioning and
allocating unto the named heirs their aliquot shares in the estate in accordance with law; and (c) entitling
the distributees the right to receive and enter into possession those parts of the estate individually
awarded to them.
On September 26, 1994, the RTC issued an order setting the petition for initial hearing and directing
Eduardo to cause its publication.
On December 28, 1994, Sebastian filed his comment, generally admitting the allegations in the petition,
and conceding to the appointment of Eduardo as special administrator.
Joseph, Gloria, and Teresa filed their answer/opposition. They alleged that the two subject lots belong to
the conjugal partnership of Joaquin with Lucia, and that, upon Lucias death in April 1924, they became
the pro indiviso owners of the subject properties. They said that their residence was built with the
exclusive money of their late father Jose, and the expenses of the extensions to the house were
shouldered by Gloria and Teresa, while the restaurant (Manongs Restaurant) was built with the exclusive
money of Joseph and his business partner. They opposed the appointment of Eduardo as administrator
on the following grounds: (1) he is not physically and mentally fit to do so; (2) his interest in the lots is
minimal; and (3) he does not possess the desire to earn. They claimed that the best interests of the estate
dictate that Joseph be appointed as special or regular administrator.
On February 16, 1995, the RTC issued a resolution appointing Eduardo as regular administrator of
Joaquins estate. Consequently, it issued him letters of administration.
On September 16, 1995, Abelardo Dagoro filed an answer in intervention, alleging that Mercedes is
survived not only by her daughter Cecile, but also by him as her husband. He also averred that there is a
need to appoint a special administrator to the estate, but claimed that Eduardo is not the person best
qualified for the task.
After the parties were given the opportunity to be heard and to submit their respective proposed projects
of partition, the RTC, on October 23, 2000, issued an Order of Partition, 8 with the following disposition

In the light of the filing by the heirs of their respective proposed projects of partition and the payment of
inheritance taxes due the estate as early as 1965, and there being no claim in Court against the estate of
the deceased, the estate of JOAQUIN AGTARAP is now consequently ripe for distribution among the
heirs minus the surviving spouse Caridad Garcia who died on August 25, 1999.
Considering that the bulk of the estate property were acquired during the existence of the second
marriage as shown by TCT No. (38254) and TCT No. (38255) which showed on its face that decedent
was married to Caridad Garcia, which fact oppositors failed to contradict by evidence other than their
negative allegations, the greater part of the estate is perforce accounted by the second marriage and the
compulsory heirs thereunder.
The Administrator, Eduardo Agtarap rendered a true and just accounting of his administration from his
date of assumption up to the year ending December 31, 1996 per Financial and Accounting Report dated
June 2, 1997 which was approved by the Court. The accounting report included the income earned and
received for the period and the expenses incurred in the administration, sustenance and allowance of the
widow. In accordance with said Financial and Accounting Report which was duly approved by this Court in
its Resolution dated July 28, 1998 the deceased JOAQUIN AGTARAP left real properties consisting of
the following:
I LAND:
Two lots and two buildings with one garage quarter located at #3030 Agtarap St., Pasay City, covered by
Transfer Certificate of Title Nos. 38254 and 38255 and registered with the Registry of Deeds of Pasay
City, Metro Manila, described as follows:
TCT NO.

LOT NO.

AREA/SQ.M.

ZONAL VALUE

AMOUNT

38254

745-B-1

1,335 sq. m.

P5,000.00

P6,675,000.00

38255

745-B-2

1,331 sq. m.

P5,000.00

P6,655,000.00

TOTAL-------------------------------------------------------------

P13,330,000.00

II BUILDINGS AND IMPROVEMENTS:

BUILDING I (Lot # 745-B-1) ------------------------------

P350,000.00

BUILDING II (Lot # 745-B-2) -----------------------------

320,000.00

Building Improvements --------------------------------------

97,500.00

Restaurant ------------------------------------------------------

80,000.00

TOTAL --------------------------------------------------------TOTAL NET WORTH -----------------------------------------

P847,500.00
P14,177,500.00

WHEREFORE, the net assets of the estate of the late JOAQUIN AGTARAP with a total value
of P14,177,500.00, together with whatever interest from bank deposits and all other incomes or
increments thereof accruing after the Accounting Report of December 31, 1996, after deducting therefrom
the compensation of the administrator and other expenses allowed by the Court, are hereby ordered
distributed as follows:

TOTAL ESTATE P14,177,500.00

CARIDAD AGTARAP of the estate as her conjugal share P7,088,750.00, the other half
of P7,088,750.00 to be divided among the compulsory heirs as follows:
1) JOSE (deceased) -

P1,181,548.30

2) MILAGROS (deceased) -

P1,181,548.30

3) MERCEDES (deceased) -

P1,181,548.30

4) SEBASTIAN -

P1,181,548.30

5) EDUARDO -

P1,181,548.30

6) CARIDAD -

P1,181,548.30

The share of Milagros Agtarap as compulsory heir in the amount of P1,181,548.30 and who died in 1996
will go to Teresa Agtarap and Joseph Agtarap, Walter de Santos and half brothers Eduardo and Sebastian
Agtarap in equal proportions.
TERESA AGTARAP -

P236,291.66

JOSEPH AGTARAP -

P236,291.66

WALTER DE SANTOS -

P236,291.66

SEBASTIAN AGTARAP -

P236,291.66

EDUARDO AGTARAP -

P236,291.66

Jose Agtarap died in 1967. His compulsory heirs are as follows:

COMPULSORY HEIRS:
1) GLORIA (deceased) represented by Walter de Santos
-

P295,364.57

2) JOSEPH AGTARAP -

P295,364.57

3) TERESA AGTARAP -

P295,364.57

4) PRISCILLA AGTARAP -

P295,364.57

Hence, Priscilla Agtarap will inherit P295,364.57.

Adding their share from Milagros Agtarap, the following heirs of the first marriage stand to receive the total
amount of:
HEIRS OF THE FIRST MARRIAGE:
1avvphi1
1) JOSEPH AGTARAP -

P236,291.66 share from Milagros Agtarap

P295,364.57 as compulsory heir of

P531,656.23 Jose Agtarap
2) TERESA AGTARAP -

P236,291.66 share from Milagros Agtarap

P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap

3) WALTER DE SANTOS -

P236,291.66 share from Milagros Agtarap

P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap

HEIRS OF THE SECOND MARRIAGE:

a) CARIDAD AGTARAP - died on August 25, 1999
P7,088,750.00 - as conjugal share
P1,181,458.30
Total of
b) SEBASTIAN AGTARAP -

- as compulsory heir

P8,270,208.30
P1,181,458.38 as compulsory heir
P 236,291.66 share from Milagros

c) EDUARDO AGTARAP -

P1,181,458.38 as compulsory heir

P 236,291.66 share from Milagros

d) MERCEDES -

as represented by Abelardo Dagoro as the

surviving spouse of a compulsory heir
P1,181,458.38

REMAINING HEIRS OF CARIDAD AGTARAP:

1) SEBASTIAN AGTARAP
2) EDUARDO AGTARAP
MERCEDES AGTARAP (Predeceased Caridad Agtarap)
In sum, Sebastian Agtarap and Eduardo Agtarap stand to inherit:

SEBASTIAN

P4,135,104.10 share from Caridad Garcia

P1,181,458.30 - as compulsory heir
P 236,291.66 - share from Milagros
P5,522,854.06

EDUARDO

P4,135,104.10 share from Caridad Garcia

P1,181,458.30 as compulsory heir
P 236,291.66 share from Milagros
P5,522,854.06

SO ORDERED.9
Eduardo, Sebastian, and oppositors Joseph and Teresa filed their respective motions for reconsideration.
On August 27, 2001, the RTC issued a resolution10 denying the motions for reconsideration of Eduardo
and Sebastian, and granting that of Joseph and Teresa. It also declared that the real estate properties
belonged to the conjugal partnership of Joaquin and Lucia. It also directed the modification of the October
23, 2000 Order of Partition to reflect the correct sharing of the heirs. However, before the RTC could issue
a new order of partition, Eduardo and Sebastian both appealed to the CA.
On November 21, 2006, the CA rendered its Decision, the dispositive portion of which reads
WHEREFORE, premises considered, the instant appeals are DISMISSED for lack of merit. The assailed
Resolution dated August 27, 2001 is AFFIRMED and pursuant thereto, the subject properties (Lot No.
745-B-1 [TCT No. 38254] and Lot No. 745-B-2 [TCT No. 38255]) and the estate of the late Joaquin
Agtarap are hereby partitioned as follows:
The two (2) properties, together with their improvements, embraced by TCT No. 38254 and TCT No.
38255, respectively, are first to be distributed among the following:
Lucia Mendietta - of the property. But since she is deceased, her share shall be inherited by Joaquin,
Jesus, Milagros and Jose in equal shares.
Joaquin Agtarap - of the property and of the other half of the property which pertains to Lucia
Mendiettas share.
Jesus Agtarap - of Lucia Mendiettas share. But since he is already deceased (and died without issue),
his inheritance shall, in turn, be acquired by Joaquin Agtarap.
Milagros Agtarap - of Lucia Mendiettas share. But since she died in 1996 without issue, 5/8 of her
inheritance shall be inherited by Gloria (represented by her husband Walter de Santos and her daughter
Samantha), Joseph Agtarap and Teresa Agtarap, (in representation of Milagros brother Jose Agtarap)
and 1/8 each shall be inherited by Mercedes (represented by her husband Abelardo Dagoro and her
daughter Cecile), Sebastian Eduardo, all surnamed Agtarap.
Jose Agtarap - of Lucia Mendiettas share. But since he died in 1967, his inheritance shall be acquired
by his wife Priscilla, and children Gloria (represented by her husband Walter de Santos and her daughter
Samantha), Joseph Agtarap and Teresa in equal shares.
Then, Joaquin Agtaraps estate, comprising three-fourths (3/4) of the subject properties and its
improvements, shall be distributed as follows:

Caridad Garcia - 1/6 of the estate. But since she died in 1999, her share shall be inherited by her children
namely Mercedes Agtarap (represented by her husband Abelardo Dagoro and her daughter Cecilia),
Sebastian Agtarap and Eduardo Agtarap in their own right, dividing the inheritance in equal shares.
Milagros Agtarap - 1/6 of the estate. But since she died in 1996 without issue, 5/8 of her inheritance shall
be inherited by Gloria (represented by her husband Walter de Santos and her daughter Samantha),
Joseph Agtarap and Teresa Agtarap, (in representation of Milagros brother Jose Agtarap) and 1/8 each
shall be inherited by Mercedes (represented by her husband Abelardo Dagoro and her daughter Cecile),
Sebastian and Eduardo, all surnamed Agtarap.
Jose Agtarap - 1/6 of the estate. But since he died in 1967, his inheritance shall be acquired by his wife
Priscilla, and children Gloria (represented by her husband Walter de Santos and her daughter Samantha),
Joseph Agtarap and Teresa Agtarap in equal shares.
Mercedes Agtarap - 1/6 of the estate. But since she died in 1984, her inheritance shall be acquired by her
husband Abelardo Dagoro and her daughter Cecile in equal shares.
Sebastian Agtarap - 1/6 of the estate.
Eduardo Agtarap - 1/6 of the estate.
SO ORDERED.11
Aggrieved, Sebastian and Eduardo filed their respective motions for reconsideration.
In its Resolution dated March 27, 2007, the CA denied both motions. Hence, these petitions ascribing to
the appellate court the following errors:
G.R. No. 177192
1. The Court of Appeals erred in not considering the aforementioned important facts 12 which
alter its Decision;
2. The Court of Appeals erred in not considering the necessity of hearing the issue of legitimacy
of respondents as heirs;
3. The Court of Appeals erred in allowing violation of the law and in not applying the doctrines of
collateral attack, estoppel, and res judicata.13
G.R. No. 177099
THE COURT OF APPEALS (FORMER TWELFTH DIVISION) DID NOT ACQUIRE JURISDICTION OVER
THE ESTATE OF MILAGROS G. AGTARAP AND ERRED IN DISTRIBUTING HER INHERITANCE FROM
THE ESTATE OF JOAQUIN AGTARAP NOTWITHSTANDING THE EXISTENCE OF HER LAST WILL
AND TESTAMENT IN VIOLATION OF THE DOCTRINE OF PRECEDENCE OF TESTATE
PROCEEDINGS OVER INTESTATE PROCEEDINGS.
II.
THE COURT OF APPEALS (FORMER TWELFTH DIVISION) ERRED IN DISMISSING THE DECISION
APPEALED FROM FOR LACK OF MERIT AND IN AFFIRMING THE ASSAILED RESOLUTION DATED
AUGUST 27, 2001 OF THE LOWER COURT HOLDING THAT THE PARCELS OF LAND COVERED BY

TCT NO. 38254 AND TCT (NO.) 38255 OF THE REGISTRY OF DEEDS FOR THE CITY OF PASAY
BELONG TO THE CONJUGAL PARTNERSHIP OF JOAQUIN AGTARAP MARRIED TO LUCIA GARCIA
MENDIETTA NOTWITHSTANDING THEIR REGISTRATION UNDER THEIR EXISTING CERTIFICATES
OF TITLE AS REGISTERED IN THE NAME OF JOAQUIN AGTARAP, CASADO CON CARIDAD
GARCIA. UNDER EXISTING JURISPRUDENCE, THE PROBATE COURT HAS NO POWER TO
DETERMINE THE OWNERSHIP OF THE PROPERTY DESCRIBED IN THESE CERTIFICATES OF
TITLE WHICH SHOULD BE RESOLVED IN AN APPROPRIATE SEPARATE ACTION FOR A TORRENS
TITLE UNDER THE LAW IS ENDOWED WITH INCONTESTABILITY UNTIL IT HAS BEEN SET ASIDE IN
THE MANNER INDICATED IN THE LAW ITSELF.14
As regards his first and second assignments of error, Sebastian contends that Joseph and Teresa failed
to establish by competent evidence that they are the legitimate heirs of their father Jose, and thus of their
grandfather Joaquin. He draws attention to the certificate of title (TCT No. 8026) they submitted, stating
that the wife of their father Jose is Presentacion Garcia, while they claim that their mother is Priscilla. He
avers that the marriage contracts proffered by Joseph and Teresa do not qualify as the best evidence of
Joses marriage with Priscilla, inasmuch as they were not authenticated and formally offered in evidence.
Sebastian also asseverates that he actually questioned the legitimacy of Joseph and Teresa as heirs of
Joaquin in his motion to exclude them as heirs, and in his reply to their opposition to the said motion. He
further claims that the failure of Abelardo Dagoro and Walter de Santos to oppose his motion to exclude
them as heirs had the effect of admitting the allegations therein. He points out that his motion was denied
by the RTC without a hearing.
With respect to his third assigned error, Sebastian maintains that the certificates of title of real estate
properties subject of the controversy are in the name of Joaquin Agtarap, married to Caridad Garcia, and
as such are conclusive proof of their ownership thereof, and thus, they are not subject to collateral attack,
but should be threshed out in a separate proceeding for that purpose. He likewise argues that estoppel
applies against the children of the first marriage, since none of them registered any objection to the
issuance of the TCTs in the name of Caridad and Joaquin only. He avers that the estate must have
already been settled in light of the payment of the estate and inheritance tax by Milagros, Joseph, and
Teresa, resulting to the issuance of TCT No. 8925 in Milagros name and of TCT No. 8026 in the names of
Milagros and Jose. He also alleges that res judicata is applicable as the court order directing the deletion
of the name of Lucia, and replacing it with the name of Caridad, in the TCTs had long become final and
executory.
In his own petition, with respect to his first assignment of error, Eduardo alleges that the CA erroneously
settled, together with the settlement of the estate of Joaquin, the estates of Lucia, Jesus, Jose, Mercedes,
Gloria, and Milagros, in contravention of the principle of settling only one estate in one proceeding. He
particularly questions the distribution of the estate of Milagros in the intestate proceedings despite the fact
that a proceeding was conducted in another court for the probate of the will of Milagros, bequeathing all to
Eduardo whatever share that she would receive from Joaquins estate. He states that this violated the rule
on precedence of testate over intestate proceedings.
Anent his second assignment of error, Eduardo contends that the CA gravely erred when it affirmed that
the bulk of the realties subject of this case belong to the first marriage of Joaquin to Lucia,
notwithstanding that the certificates of title were registered in the name of Joaquin Agtarap casado con
("married to") Caridad Garcia. According to him, the RTC, acting as an intestate court with limited
jurisdiction, was not vested with the power and authority to determine questions of ownership, which
properly belongs to another court with general jurisdiction.
The Courts Ruling
As to Sebastians and Eduardos common issue on the ownership of the subject real properties, we hold
that the RTC, as an intestate court, had jurisdiction to resolve the same.

The general rule is that the jurisdiction of the trial court, either as a probate or an intestate court, relates
only to matters having to do with the probate of the will and/or settlement of the estate of deceased
persons, but does not extend to the determination of questions of ownership that arise during the
proceedings.15 The patent rationale for this rule is that such court merely exercises special and limited
jurisdiction.16 As held in several cases,17 a probate court or one in charge of estate proceedings, whether
testate or intestate, cannot adjudicate or determine title to properties claimed to be a part of the estate
and which are claimed to belong to outside parties, not by virtue of any right of inheritance from the
deceased but by title adverse to that of the deceased and his estate. All that the said court could do as
regards said properties is to determine whether or not they should be included in the inventory of
properties to be administered by the administrator. If there is no dispute, there poses no problem, but if
there is, then the parties, the administrator, and the opposing parties have to resort to an ordinary action
before a court exercising general jurisdiction for a final determination of the conflicting claims of title.
However, this general rule is subject to exceptions as justified by expediency and convenience.
First, the probate court may provisionally pass upon in an intestate or a testate proceeding the question of
inclusion in, or exclusion from, the inventory of a piece of property without prejudice to the final
determination of ownership in a separate action.18 Second, if the interested parties are all heirs to the
estate, or the question is one of collation or advancement, or the parties consent to the assumption of
jurisdiction by the probate court and the rights of third parties are not impaired, then the probate court is
competent to resolve issues on ownership.19Verily, its jurisdiction extends to matters incidental or
collateral to the settlement and distribution of the estate, such as the determination of the status of each
heir and whether the property in the inventory is conjugal or exclusive property of the deceased spouse. 20
We hold that the general rule does not apply to the instant case considering that the parties are all heirs
of Joaquin and that no rights of third parties will be impaired by the resolution of the ownership issue.
More importantly, the determination of whether the subject properties are conjugal is but collateral to the
probate courts jurisdiction to settle the estate of Joaquin.1auuphi1
It should be remembered that when Eduardo filed his verified petition for judicial settlement of Joaquins
estate, he alleged that the subject properties were owned by Joaquin and Caridad since the TCTs state
that the lots were registered in the name of Joaquin Agtarap, married to Caridad Garcia. He also admitted
in his petition that Joaquin, prior to contracting marriage with Caridad, contracted a first marriage with
Lucia. Oppositors to the petition, Joseph and Teresa, however, were able to present proof before the RTC
that TCT Nos. 38254 and 38255 were derived from a mother title, TCT No. 5239, dated March 17, 1920,
in the name of FRANCISCO VICTOR BARNES Y JOAQUIN AGTARAP, el primero casado con Emilia
Muscat, y el Segundo con Lucia Garcia Mendietta (FRANCISCO VICTOR BARNES y JOAQUIN
AGTARAP, the first married to Emilia Muscat, and the second married to Lucia Garcia Mendietta). 21 When
TCT No. 5239 was divided between Francisco Barnes and Joaquin Agtarap, TCT No. 10864, in the name
of Joaquin Agtarap, married to Lucia Garcia Mendietta, was issued for a parcel of land, identified as Lot
No. 745 of the Cadastral Survey of Pasay, Cadastral Case No. 23, G.L.R.O. Cadastral Record No. 1368,
consisting of 8,872 square meters. This same lot was covered by TCT No. 5577 (32184) 22 issued on April
23, 1937, also in the name of Joaquin Agtarap, married to Lucia Garcia Mendietta.
The findings of the RTC and the CA show that Lucia died on April 24, 1924, and subsequently, on
February 9, 1926, Joaquin married Caridad. It is worthy to note that TCT No. 5577 (32184) contained an
annotation, which reads
Ap-4966 NOTA: Se ha enmendado el presente certificado de titulo, tal como aparece, tanchando las
palabras "con Lucia Garcia Mendiet[t]a" y poniendo en su lugar, entre lineas y en tinta encarnada, las
palabras "en segundas nupcias con Caridad Garcia", en complimiento de un orden de fecha 28 de abril
de 1937, dictada por el Hon. Sixto de la Costa, juez del Juzgado de Primera Instancia de Rizal, en el
expediente cadastal No. 23, G.L.R.O. Cad. Record No. 1368; copia de cual orden has sido presentada
con el No. 4966 del Libro Diario, Tomo 6.0 y, archivada en el Legajo T-No. 32184.

Pasig, Rizal, a 29 abril de 1937.23

Thus, per the order dated April 28, 1937 of Hon. Sixto de la Costa, presiding judge of the Court of First
Instance of Rizal, the phrase con Lucia Garcia Mendiet[t]a was crossed out and replaced by en segundas
nuptias con Caridad Garcia, referring to the second marriage of Joaquin to Caridad. It cannot be gainsaid,
therefore, that prior to the replacement of Caridads name in TCT No. 32184, Lucia, upon her demise,
already left, as her estate, one-half (1/2) conjugal share in TCT No. 32184. Lucias share in the property
covered by the said TCT was carried over to the properties covered by the certificates of title derivative of
TCT No. 32184, now TCT Nos. 38254 and 38255. And as found by both the RTC and the CA, Lucia was
survived by her compulsory heirs Joaquin, Jesus, Milagros, and Jose.
Section 2, Rule 73 of the Rules of Court provides that when the marriage is dissolved by the death of the
husband or the wife, the community property shall be inventoried, administered, and liquidated, and the
debts thereof paid; in the testate or intestate proceedings of the deceased spouse, and if both spouses
have died, the conjugal partnership shall be liquidated in the testate or intestate proceedings of either.
Thus, the RTC had jurisdiction to determine whether the properties are conjugal as it had to liquidate the
conjugal partnership to determine the estate of the decedent. In fact, should Joseph and Teresa institute a
settlement proceeding for the intestate estate of Lucia, the same should be consolidated with the
settlement proceedings of Joaquin, being Lucias spouse. 24 Accordingly, the CA correctly distributed the
estate of Lucia, with respect to the properties covered by TCT Nos. 38254 and 38255 subject of this case,
to her compulsory heirs.
Therefore, in light of the foregoing evidence, as correctly found by the RTC and the CA, the claim of
Sebastian and Eduardo that TCT Nos. 38254 and 38255 conclusively show that the owners of the
properties covered therein were Joaquin and Caridad by virtue of the registration in the name of Joaquin
Agtarap casado con (married to) Caridad Garcia, deserves scant consideration. This cannot be said to be
a collateral attack on the said TCTs. Indeed, simple possession of a certificate of title is not necessarily
conclusive of a holders true ownership of property.25 A certificate of title under the Torrens system aims to
protect dominion; it cannot be used as an instrument for the deprivation of ownership. 26 Thus, the fact that
the properties were registered in the name of Joaquin Agtarap, married to Caridad Garcia, is not sufficient
proof that the properties were acquired during the spouses coverture. 27 The phrase "married to Caridad
Garcia" in the TCTs is merely descriptive of the civil status of Joaquin as the registered owner, and does
not necessarily prove that the realties are their conjugal properties. 28
Neither can Sebastians claim that Joaquins estate could have already been settled in 1965 after the
payment of the inheritance tax be upheld. Payment of the inheritance tax, per se, does not settle the
estate of a deceased person. As provided in Section 1, Rule 90 of the Rules of Court
SECTION 1. When order for distribution of residue made. -- When the debts, funeral charges, and
expenses of administration, the allowance to the widow, and inheritance tax, if any, chargeable to the
estate in accordance with law, have been paid, the court, on the application of the executor or
administrator, or of a person interested in the estate, and after hearing upon notice, shall assign the
residue of the estate to the persons entitled to the same, naming them and the proportions, or parts, to
which each is entitled, and such persons may demand and recover their respective shares from the
executor or administrator, or any other person having the same in his possession. If there is a controversy
before the court as to who are the lawful heirs of the deceased person or as to the distributive share to
which each person is entitled under the law, the controversy shall be heard and decided as in ordinary
cases.
No distribution shall be allowed until the payment of the obligations above mentioned has been made or
provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court,
conditioned for the payment of said obligations within such time as the court directs.

Thus, an estate is settled and distributed among the heirs only after the payment of the debts of the
estate, funeral charges, expenses of administration, allowance to the widow, and inheritance tax. The
records of these cases do not show that these were complied with in 1965.
As regards the issue raised by Sebastian on the legitimacy of Joseph and Teresa, suffice it to say that
both the RTC and the CA found them to be the legitimate children of Jose. The RTC found that Sebastian
did not present clear and convincing evidence to support his averments in his motion to exclude them as
heirs of Joaquin, aside from his negative allegations. The RTC also noted the fact of Joseph and Teresa
being the children of Jose was never questioned by Sebastian and Eduardo, and the latter two even
admitted this in their petitions, as well as in the stipulation of facts in the August 21, 1995
hearing.29 Furthermore, the CA affirmed this finding of fact in its November 21, 2006 Decision. 30
Also, Sebastians insistence that Abelardo Dagoro and Walter de Santos are not heirs to the estate of
Joaquin cannot be sustained. Per its October 23, 2000 Order of Partition, the RTC found that Gloria
Agtarap de Santos died on May 4, 1995, and was later substituted in the proceedings below by her
husband Walter de Santos. Gloria begot a daughter with Walter de Santos, Georgina Samantha de
Santos. The RTC likewise noted that, on September 16, 1995, Abelardo Dagoro filed a motion for leave of
court to intervene, alleging that he is the surviving spouse of Mercedes Agtarap and the father of Cecilia
Agtarap Dagoro, and his answer in intervention. The RTC later granted the motion, thereby admitting his
answer on October 18, 1995.31 The CA also noted that, during the hearing of the motion to intervene on
October 18, 1995, Sebastian and Eduardo did not interpose any objection when the intervention was
submitted to the RTC for resolution.32
Indeed, this Court is not a trier of facts, and there appears no compelling reason to hold that both courts
erred in ruling that Joseph, Teresa, Walter de Santos, and Abelardo Dagoro rightfully participated in the
estate of Joaquin. It was incumbent upon Sebastian to present competent evidence to refute his and
Eduardos admissions that Joseph and Teresa were heirs of Jose, and thus rightful heirs of Joaquin, and
to timely object to the participation of Walter de Santos and Abelardo Dagoro. Unfortunately, Sebastian
failed to do so. Nevertheless, Walter de Santos and Abelardo Dagoro had the right to participate in the
estate in representation of the Joaquins compulsory heirs, Gloria and Mercedes, respectively.33
This Court also differs from Eduardos asseveration that the CA erred in settling, together with Joaquins
estate, the respective estates of Lucia, Jesus, Jose, Mercedes, and Gloria. A perusal of the November 21,
2006 CA Decision would readily show that the disposition of the properties related only to the settlement
of the estate of Joaquin. Pursuant to Section 1, Rule 90 of the Rules of Court, as cited above, the RTC
was specifically granted jurisdiction to determine who are the lawful heirs of Joaquin, as well as their
respective shares after the payment of the obligations of the estate, as enumerated in the said provision.
The inclusion of Lucia, Jesus, Jose, Mercedes, and Gloria in the distribution of the shares was merely a
necessary consequence of the settlement of Joaquins estate, they being his legal heirs.
However, we agree with Eduardos position that the CA erred in distributing Joaquins estate pertinent to
the share allotted in favor of Milagros. Eduardo was able to show that a separate proceeding was
instituted for the probate of the will allegedly executed by Milagros before the RTC, Branch 108, Pasay
City.34 While there has been no showing that the alleged will of Milagros, bequeathing all of her share
from Joaquins estate in favor of Eduardo, has already been probated and approved, prudence dictates
that this Court refrain from distributing Milagros share in Joaquins estate.
It is also worthy to mention that Sebastian died on January 15, 2010, per his Certificate of Death. 35 He is
survived by his wife Teresita B. Agtarap (Teresita) and his children Joaquin Julian B. Agtarap (Joaquin
Julian) and Ana Ma. Agtarap Panlilio (Ana Ma.).
Henceforth, in light of the foregoing, the assailed November 21, 2006 Decision and the March 27, 2007
Resolution of the CA should be affirmed with modifications such that the share of Milagros shall not yet be

distributed until after the final determination of the probate of her purported will, and that Sebastian shall
be represented by his compulsory heirs.
WHEREFORE, the petition in G.R. No. 177192 is DENIED for lack of merit, while the petition in G.R. No.
177099 is PARTIALLY GRANTED, such that the Decision dated November 21, 2006 and the Resolution
dated March 27, 2007 of the Court of Appeals are AFFIRMED with the following MODIFICATIONS: that
the share awarded in favor of Milagros Agtarap shall not be distributed until the final determination of the
probate of her will, and that petitioner Sebastian G. Agtarap, in view of his demise on January 15, 2010,
shall be represented by his wife Teresita B. Agtarap and his children Joaquin Julian B. Agtarap and Ana
Ma. Agtarap Panlilio.
These cases are hereby remanded to the Regional Trial Court, Branch 114, Pasay City, for further
proceedings in the settlement of the estate of Joaquin Agtarap. No pronouncement as to costs.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR
CASE DIGEST
EDUARDO G. AGTARAP vs. SEBASTIAN AGTARAPG.R. No. 177099

June 8, 2011

FACTS: Joaquin Agtarap died intestate on November 21, 1964 in Pasay City without any knowndebts or
obligations. During his lifetime, Joaquin contracted two marriages, first with Lucia Garcia (Lucia), and
second with Caridad Garcia (Caridad). Lucia died on April 24, 1924. Joaquinand Lucia had three children
Jesus (died without issue), Milagros, and Jose (survived by threechildren, namely, Gloria, Joseph, and
Teresa). Joaquin married Caridad on February 9, 1926. They also had three childrenEduardo,
Sebastian, and Mercedes (survived by her daughter Cecile). At the time of his death, Joaquin left two
parcels of land with improvements in Pasay City, covered by Transfer Certificates of Title (TCT) Nos. 873(38254) and 874-(38255). Joseph,a grandson of Joaquin, had been leasing and improving the said
realties and had been appropriating for himself P26,000.00 per month since April 1994.Eduardo asked to
be appointed administrator. He was latter appointed by the probate court and was issued with letters of
administrator. Joseph, Gloria, and Teresa filed their answer/opposition. They alleged that the two subject
lots belong to the conjugal partnership of Joaquin with Lucia, and that, upon Lucias death in April 1924,
they became the pro indiviso owners of the subject properties. They said that their residence was built
with the exclusive money of their late father Jose, and the expenses of the extensions to the house were
shouldered by Gloria and Teresa, while the restaurant (Manongs Restaurant) was built with the exclusive
money of Joseph and his business partner. Thereafter, the RTC issued an Order of Partition, holding that
considering that the bulk of the estate property were acquired during the existence of the second
marriage as shown by TCT No. (38254) and TCT No. (38255) which showed on its face that decedent
was married to Caridad Garcia, which fact oppositors failed to contradict by evidence other than their
negative allegations, the greater part of the estate is perforce accounted by the second marriage and the
compulsory heirs thereunder. It also declared that the real estate properties belonged to the conjugal
partnership of Joaquin and Lucia. It also directed the modification of the October 23, 2000 Order of
Partition to reflect the correct sharing of the heirs. However, before the RTC could issue a new order of
partition, Eduardo and Sebastian both appealed to the CA. The CA settled, together with the settlement of
the estate of Joaquin, the estates of Lucia, Jesus, Jose, Mercedes, Gloria, and Milagros. Moreover, the
CA the estate of Milagros in the intestate proceedings despite the fact that a proceeding was conducted in

another court for the probate of the will of Milagros, bequeathing all to Eduardo whatever share that she
would receive from Joaquins estate. CA also affirmed that the bulk of the realties subject of this case
belong to the first marriage of Joaquin to Lucia, notwithstanding that the certificates of title were
registered in the name of Joaquin Agtarap casado con ("married to") Caridad Garcia.
ISSUE: Whether or not the RTC, acting as an intestate court with limited jurisdiction, is vested with the
power and authority to determine questions of ownership.
HELD: Yes. The general rule is that the jurisdiction of the trial court, either as a probate or an intestate
court, relates only to matters having to do with the probate of the will and/or settlement of the estate of
deceased persons, but does not extend to the determination of questions of ownership that arise during
the proceedings. The patent rationale for this rule is that such court merely exercises special and limited
jurisdiction. As held in several cases, a probate court or one in charge of estate proceedings, whether
testate or intestate, cannot adjudicate or determine title to properties claimed to be a part of the estate
and which are claimed to belong to outside parties, not by virtue of any right of inheritance from the
deceased but by title adverseto that of the deceased and his estate. All that the said court could do as
regards said propertiesis to determine whether or not they should be included in the inventory of
properties to be administered by the administrator. If there is no dispute, there poses no problem, but if
there is, then the parties, the administrator, and the opposing parties have to resort to an ordinary action
before a court exercising general jurisdiction for a final determination of the conflicting claims of
title.However, this general rule is subject to exceptions as justified by expediency and convenience.First,
the probate court may provisionally pass upon in an intestate or a testate proceeding the question of
inclusion in, or exclusion from, the inventory of a piece of property without prejudice to the final
determination of ownership in a separate action. Second, if the interested parties are all heirs to the
estate, or the question is one of collation or advancement, or the parties consent to the assumption of
jurisdiction by the probate court and the rights of third parties are not impaired, then the probate court is
competent to resolve issues on ownership. Verily, its jurisdiction extends to matters incidental or collateral
to the settlement and distribution of the estate, such as the determination of the status of each heir and
whether the property in the inventory is conjugal or exclusive property of the deceased spouse. We hold
that the general rule does not apply to the instant case considering that the parties are all heirs of Joaquin
and that no rights of third parties will be impaired by the resolution of the ownership issue. More
importantly, the determination of whether the subject properties are conjugal is but collateral to the
probate courts jurisdiction to settle the estate of Joaquin

G.R. No. 183053

June 16, 2010

IN THE MATTER OF THE INTESTATE ESTATE OF CRISTINA AGUINALDO-SUNTAY; EMILIO A.M.

SUNTAY III,Petitioner,
vs.
ISABEL COJUANGCO-SUNTAY, Respondent.
DECISION
NACHURA, J.:
Unlike Pope Alexander VI1 who, faced with the impasse between Spain and Portugal, deftly and literally
divided the exploration, or more appropriately, the riches of the New World by issuing the Inter
Caetera,2 we are confronted with the difficult, albeit, all too familiar tale of another family imbroglio over
the estate of a decedent.3
This is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision of the
Court of Appeals (CA) in CA-G.R. CV No. 74949,4 reversing the decision of the Regional Trial Court
(RTC), Branch 78, Malolos, Bulacan, in Special Proceeding Case No. 117-M-95. 5

Before anything else, we disentangle the facts.

On June 4, 1990, the decedent, Cristina Aguinaldo-Suntay (Cristina), married to Dr. Federico Suntay
(Federico), died intestate. In 1979, their only son, Emilio Aguinaldo Suntay (Emilio I), predeceased both
Cristina and Federico. At the time of her death, Cristina was survived by her husband, Federico, and
several grandchildren, including herein petitioner Emilio A.M. Suntay III (Emilio III) and respondent Isabel
Cojuangco-Suntay.
During his lifetime, Emilio I was married to Isabel Cojuangco, and they begot three children, namely:
herein respondent, Isabel; Margarita; and Emilio II, all surnamed Cojuangco-Suntay. Emilio Is marriage to
Isabel Cojuangco was subsequently annulled. Thereafter, Emilio I had two children out of wedlock, Emilio
III and Nenita Suntay Taedo (Nenita), by two different women, Concepcion Mendoza and Isabel Santos,
respectively.
Despite the illegitimate status of Emilio III, he was reared ever since he was a mere baby, nine months
old, by the spouses Federico and Cristina and was an acknowledged natural child of Emilio I. Nenita is an
acknowledged natural child of Emilio I and was likewise brought up by the spouses Federico and Cristina.
As previously adverted to, the marriage between Emilio I and Isabel was annulled. 6 Consequently,
respondent and her siblings Margarita and Emilio II, lived with their mother on Balete Drive, Quezon City,
separately from their father and paternal grandparents.
Parenthetically, after the death of Emilio I, Federico filed a petition for visitation rights over his
grandchildren: respondent Isabel, Margarita, and Emilio II. Although the Juvenile and Domestic Relations
Court in Quezon City granted the petition and allowed Federico one hour of visitation monthly, initially
reduced to thirty minutes, it was altogether stopped because of a manifestation filed by respondent Isabel,
articulating her sentiments on the unwanted visits of her grandparents.
Significantly, Federico, after the death of his spouse, Cristina, or on September 27, 1993, adopted their
illegitimate grandchildren, Emilio III and Nenita.71avvphi1
On October 26, 1995, respondent filed a petition for the issuance of letters of administration in her favor,
containing the following allegations:
[A]t the time of [the decedents] death, [she] was a resident of the Municipality of Hagonoy, Province of
Bulacan; that the [decedent] left an estate of real and personal properties, with a probable gross value
of P29,000,000.00; that the names, ages and residences of the surviving heirs of the [decedent] are: (1)
Federico C. Suntay, 89 years old, surviving spouse and a resident of x x x; (2) Isabel Cojuangco-Suntay,
36 years old, legitimate granddaughter and a resident of x x x; (3) Margarita Cojuangco-Suntay, 39 years
old, legitimate granddaughter and a resident of x x x; and (4) Emilio Cojuangco-Suntay, 35 years old,
legitimate grandson and a resident of x x x; and that as far as [respondent] knew, the decedent left no
debts or obligation at the time of her death.8
Disavowing the allegations in the petition of his grandchild, respondent Isabel, Federico filed his
opposition on December 21, 1995, alleging, among others, that:
[B]eing the surviving spouse of Cristina, he is capable of administering her estate and he should be the
one appointed as its administrator; that as part owner of the mass of conjugal properties left by Cristina,

he must be accorded legal preference in the administration thereof; that Isabel and her family had been
alienated from their grandparents for more than thirty (30) years; that the enumeration of heirs in the
petition was incomplete as it did not mention the other children of his son[,] namely: Emilio III and Nenita
S. Taedo; that he is better situated to protect the integrity of the estate of Cristina as even before the
death of his wife[,] he was already the one who managed their conjugal properties; that the probable
value of the estate as stated in the petition was grossly overstated (sic); and that Isabels allegation that
some of the properties are in the hands of usurpers is untrue. 9
Meanwhile, after a failed attempt by the parties to settle the proceedings amicably, Federico filed a
Manifestation dated March 13, 1999, nominating his adopted son, Emilio III, as administrator of the
decedents estate on his behalf, in the event he would be adjudged as the one with a better right to the
letters of administration.
Subsequently, the trial court granted Emilio IIIs Motion for Leave to Intervene considering his interest in
the outcome of the case. Emilio III filed his Opposition-In-Intervention, which essentially echoed the
allegations in his grandfathers opposition, alleging that Federico, or in his stead, Emilio III, was better
equipped than respondent to administer and manage the estate of the decedent, Cristina. Additionally,
Emilio III averred his own qualifications that: "[he] is presently engaged in aquaculture and banking; he
was trained by the decedent to work in his early age by involving him in the activities of the Emilio
Aguinaldo Foundation which was established in 1979 in memory of her grandmothers father; the
significant work experiences outside the family group are included in his curriculum vitae; he was
employed by the oppositor [Federico] after his graduation in college with management degree at F.C.E.
Corporations and Hagonoy Rural Bank; x x x."10
In the course of the proceedings, on November 13, 2000, Federico died.
After the testimonies of both parties witnesses were heard and evidence on their respective allegations
were adduced, the trial court rendered a decision on November 9, 2001, appointing herein petitioner,
Emilio III, as administrator of decedent Cristinas intestate estate, to wit:
WHEREFORE, the petition of Isabel Cojuangco[-]Suntay is DENIED and the Opposition[-]in[-]Intervention
is GRANTED.
Accordingly, the Intervenor, Emilio A.M. Suntay, III is hereby appointed administrator of the estate of the
decedent Cristina Aguinaldo Suntay, who shall enter upon the execution of his trust upon the filing of a
bond in the amount of P200,000.00, conditioned as follows:
(1) To make and return within three (3) months, a true and complete inventory;
(2) To administer the estate and to pay and discharge all debts, legatees, and charge on the
same, or dividends thereon;
(3) To render a true and just account within one (1) year, and at any other time when required by
the court, and
(4) To perform all orders of the Court.
Once the said bond is approved by the court, let Letters of Administration be issued in his favor.

SO ORDERED.11
Aggrieved, respondent filed an appeal before the CA, which reversed and set aside the decision of the
RTC, revoked the Letters of Administration issued to Emilio III, and appointed respondent as
administratrix of the intestate estate of the decedent, Cristina, to wit:
WHEREFORE, in view of all the foregoing, the assailed decision dated November 9, 2001 of Branch 78,
Regional Trial Court of Malolos, Bulacan in SPC No. 117-M-95 is REVERSED and SET ASIDE and the
letters of administration issued by the said court to Emilio A.M. Suntay III, if any, are consequently
revoked. Petitioner Isabel Cojuangco[-]Suntay is hereby appointed administratrix of the intestate estate of
Cristina Aguinaldo Suntay. Let letters of administration be issued in her favor upon her filing of a bond in
the amount of Two Hundred Thousand (P200,000.00) Pesos.
No pronouncement as to costs.
SO ORDERED.12
The motion for reconsideration of Emilio III having been denied, he appeals by certiorari to this Court,
raising the following issues:
A. IN THE APPOINTMENT OF AN ADMINISTRATOR OF THE ESTATE UNDER SECTION 6 OF RULE
78 OF THE RULES OF COURT, WHETHER ARTICLE 992 OF THE CIVIL CODE APPLIES; and
B. UNDER THE UNDISPUTED FACTS WHERE HEREIN PETITIONER WAS REARED BY THE
DECEDENT AND HER SPOUSE SINCE INFANCY, WHETHER ARTICLE 992 OF THE NEW CIVIL
CODE APPLIES SO AS TO BAR HIM FROM BEING APPOINTED ADMINISTRATOR OF THE
DECEDENTS ESTATE.13
In ruling against the petition of herein respondent, the RTC ratiocinated, thus:
Evidence objectively assessed and carefully evaluated, both testimonial and documentary, the court
opines that it is to the best interest of the estate of the decedent and all claimants thereto, that the
Intervenor, Emilio A.M. Suntay III, be appointed administrator of the estate in the above-entitled special
proceedings.
Based on the evidence and demeanor of the parties in court, [respondents immediate] family and that of
the decedent are apparently estranged. The root cause of which, is not for this court to ascertain nor is
this the right time and the proper forum to dwell upon. What matters most at this time is the welfare of the
estate of the decedent in the light of such unfortunate and bitter estrangement.
The Court honestly believes that to appoint the petitioner would go against the wishes of the decedent
who raised [Emilio III] from infancy in her home in Baguio City as her own child. Certainly, it would go
against the wishes of the surviving spouse x x x who nominated [Emilio III] for appointment as
administrator.
As between [respondent] and the oppositor [Federico], the latter is accorded preference as the surviving
spouse under Sec 6(a), Rule 78, Rules of Court. On the basis of such preference, he vigorously opposed
the appointment of the petitioner and instead nominated [Emilio III], his grandchild and adopted child.

Such nomination, absent any valid and justifiable reason, should not be imperiously set aside and
insouciantly ignored, even after the oppositor [Federico] has passed away, in order to give effect to the
order of preference mandated by law. Moreover, from the viewpoint of the estate, the nomination of
[Emilio III] appear[s] intrinsically meritorious. For the benefit of the estate and its claimants, creditors, as
well as heirs, the administrator should be one who is prepared, academically and by experience, for the
demands and responsibilities of the position. While [respondent], a practicing physician, is not unqualified,
it is clear to the court that when it comes to management of real estate and the processing and payment
of debts, [Emilio III], a businessman with an established track record as a manager has a decided edge
and therefore, is in a position to better handle the preservation of the estate. 14
In marked contrast, the CA zeroed in on Emilio IIIs status as an illegitimate child of Emilio I and, thus,
barred from representing his deceased father in the estate of the latters legitimate mother, the decedent.
On the whole, the CA pronounced that Emilio III, who was merely nominated by Federico, and which
nomination hinged upon the latters appointment as administrator of the decedents estate, cannot be
appointed as the administrator of the decedents estate for the following reasons: 15
1. The appointment of Emilio III was subject to a suspensive condition, i.e., Federicos
appointment as administrator of the estate, he being the surviving spouse of Cristina, the
decedent. The death of Federico before his appointment as administrator of Cristinas estate
rendered his nomination of Emilio III inoperative;
2. As between the legitimate offspring (respondent) and illegitimate offspring (Emilio III) of
decedents son, Emilio I, respondent is preferred, being the "next of kin" referred to by Section 6,
Rule 78 of the Rules of Court, and entitled to share in the distribution of Cristinas estate as an
heir;
3. Jurisprudence has consistently held that Article 992 16 of the Civil Code bars the illegitimate
child from inheriting ab intestato from the legitimate children and relatives of his father or mother.
Thus, Emilio III, who is barred from inheriting from his grandmother, cannot be preferred over
respondent in the administration of the estate of their grandmother, the decedent; and
4. Contrary to the RTCs finding, respondent is as much competent as Emilio III to administer and
manage the subject estate for she possesses none of the disqualifications specified in Section
1,17 Rule 78 of the Rules of Court.
The pivotal issue in this case turns on who, as between Emilio III and respondent, is better qualified to act
as administrator of the decedents estate.
We cannot subscribe to the appellate courts ruling excluding Emilio III in the administration of the
decedents undivided estate. Mistakenly, the CA glosses over several undisputed facts and
circumstances:
1. The underlying philosophy of our law on intestate succession is to give preference to the
wishes and presumed will of the decedent, absent a valid and effective will;
2. The basis for Article 992 of the Civil Code, referred to as the iron curtain bar rule, 18 is quite the
opposite scenario in the facts obtaining herein for the actual relationship between Federico and

Cristina, on one hand, and Emilio III, on the other, was akin to the normal relationship of
legitimate relatives;
3. Emilio III was reared from infancy by the decedent, Cristina, and her husband, Federico, who
both acknowledged him as their grandchild;
4. Federico claimed half of the properties included in the estate of the decedent, Cristina, as
forming part of their conjugal partnership of gains during the subsistence of their marriage;
5. Cristinas properties forming part of her estate are still commingled with that of her husband,
Federico, because her share in the conjugal partnership, albeit terminated upon her death,
remains undetermined and unliquidated; and
6. Emilio III is a legally adopted child of Federico, entitled to share in the distribution of the latters
estate as a direct heir, one degree from Federico, not simply representing his deceased
illegitimate father, Emilio I.
From the foregoing, it is patently clear that the CA erred in excluding Emilio III from the administration of
the decedents estate. As Federicos adopted son, Emilio IIIs interest in the estate of Cristina is as much
apparent to this Court as the interest therein of respondent, considering that the CA even declared that
"under the law, [Federico], being the surviving spouse, would have the right of succession over a portion
of the exclusive property of the decedent, aside from his share in the conjugal partnership." Thus, we are
puzzled why the CA resorted to a strained legal reasoning Emilio IIIs nomination was subject to a
suspensive condition and rendered inoperative by reason of Federicos death wholly inapplicable to the
case at bar.
Section 6, Rule 78 of the Rules of Court lists the order of preference in the appointment of an
administrator of an estate:
SEC. 6. When and to whom letters of administration granted. If no executor is named in the will, or the
executor or executors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate,
administration shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion
of the court, or to such person as such surviving husband or wife, or next of kin, requests to have
appointed, if competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected
by them, be incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty
(30) days after the death of the person to apply for administration or to request that administration
be granted to some other person, it may be granted to one or more of the principal creditors, if
competent and willing to serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to such other
person as the court may select.
However, the order of preference is not absolute for it depends on the attendant facts and circumstances
of each case.19 Jurisprudence has long held that the selection of an administrator lies in the sound

discretion of the trial court.20 In the main, the attendant facts and circumstances of this case necessitate,
at the least, a joint administration by both respondent and Emilio III of their grandmothers, Cristinas,
estate.
In the case of Uy v. Court of Appeals,21 we upheld the appointment by the trial court of a co-administration
between the decedents son and the decedents brother, who was likewise a creditor of the decedents
estate. In the same vein, we declared in Delgado Vda. de De la Rosa v. Heirs of Marciana Rustia Vda. de
Damian22 that:
[i]n 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, specially
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.
Similarly, the subject estate in this case calls to the succession other putative heirs, including another
illegitimate grandchild of Cristina and Federico, Nenita Taedo, but who was likewise adopted by
Federico, and the two (2) siblings of respondent Isabel, Margarita and Emilio II. In all, considering the
conflicting claims of the putative heirs, and the unliquidated conjugal partnership of Cristina and Federico
which forms part of their respective estates, we are impelled to move in only one direction, i.e., joint
administration of the subject estate.
One final note. Counsel for petitioner meticulously argues that Article 992 of the Civil Code, the
successional bar between the legitimate and illegitimate relatives of a decedent, does not apply in this
instance where facts indubitably demonstrate the contrary Emilio III, an illegitimate grandchild of the
decedent, was actually treated by the decedent and her husband as their own son, reared from infancy,
educated and trained in their businesses, and eventually legally adopted by decedents husband, the
original oppositor to respondents petition for letters of administration.
We are not unmindful of the critiques of civilists of a conflict and a lacuna in the law concerning the bone
of contention that is Article 992 of the Civil Code, beginning with the eminent Justice J.B.L. Reyes:
In the Spanish Civil Code of 1889 the right of representation was admitted only within the legitimate
family; so much so that Article 943 of that Code prescribed that an illegitimate child can not inherit ab
intestato from the legitimate children and relatives of his father and mother. The Civil Code of the
Philippines apparently adhered to this principle since it reproduced Article 943 of the Spanish Code in its
own Art. 992, but with fine inconsistency, in subsequent articles (990, 995 and 998) our Code allows the
hereditary portion of the illegitimate child to pass to his own descendants, whether legitimate or
illegitimate. So that while Art. 992 prevents the illegitimate issue of a legitimate child from representing
him in the intestate succession of the grandparent, the illegitimates of an illegitimate child can now do so.
This difference being indefensible and unwarranted, in the future revision of the Civil Code we shall have
to make a choice and decide either that the illegitimate issue enjoys in all cases the right of
representation, in which case Art. 992 must be suppressed; or contrariwise maintain said article and
modify Articles 995 and 998. The first solution would be more in accord with an enlightened attitude vis-vis illegitimate children.23
Manresa explains the basis for the rules on intestate succession:

The law [of intestacy] is founded on the presumed will of the deceased Love, it is said, first descends,
then ascends, and, finally, spreads sideways. Thus, the law first calls the descendants, then the
ascendants, and finally the collaterals, always preferring those closer in degree to those of remoter
degrees, on the assumption that the deceased would have done so had he manifested his last will
Lastly, in default of anyone called to succession or bound to the decedent by ties of blood or affection, it is
in accordance with his presumed will that his property be given to charitable or educational institutions,
and thus contribute to the welfare of humanity.24
Indeed, the factual antecedents of this case accurately reflect the basis of intestate succession, i.e., love
first descends, for the decedent, Cristina, did not distinguish between her legitimate and illegitimate
grandchildren. Neither did her husband, Federico, who, in fact, legally raised the status of Emilio III from
an illegitimate grandchild to that of a legitimate child. The peculiar circumstances of this case,
painstakingly pointed out by counsel for petitioner, overthrow the legal presumption in Article 992 of the
Civil Code that there exist animosity and antagonism between legitimate and illegitimate descendants of a
deceased.
Nonetheless, it must be pointed out that judicial restraint impels us to refrain from making a final
declaration of heirship and distributing the presumptive shares of the parties in the estates of Cristina and
Federico, considering that the question on who will administer the properties of the long deceased couple
has yet to be settled.
Our holding in Capistrano v. Nadurata25 on the same issue remains good law:
[T]he declaration of heirs made by the lower court is premature, although the evidence sufficiently shows
who are entitled to succeed the deceased. The estate had hardly been judicially opened, and the
proceeding has not as yet reached the stage of distribution of the estate which must come after the
inheritance is liquidated.
Section 1, Rule 90 of the Rules of Court does not depart from the foregoing admonition:
Sec. 1. When order for distribution of residue is made. x x x. If there is a controversy before the court as
to who are the lawful heirs of the deceased person or as to the distributive shares to which each person is
entitled under the law, the controversy shall be heard and decided as in ordinary cases.
No distribution shall be allowed until the payment of the obligations above mentioned has been made or
provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court,
conditioned for the payment of said obligations within such time as the court directs.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 74949
is REVERSED and SET ASIDE. Letters of Administration over the estate of decedent Cristina AguinaldoSuntay shall issue to both petitioner Emilio A.M. Suntay III and respondent Isabel Cojuangco-Suntay upon
payment by each of a bond to be set by the Regional Trial Court, Branch 78, Malolos, Bulacan, in Special
Proceeding Case No. 117-M-95. The Regional Trial Court, Branch 78, Malolos, Bulacan is likewise
directed to make a determination and to declare the heirs of decedent Cristina Aguinaldo-Suntay
according to the actual factual milieu as proven by the parties, and all other persons with legal interest in
the subject estate. It is further directed to settle the estate of decedent Cristina Aguinaldo-Suntay with
dispatch. No costs.

SO ORDERED.
CASE DIGEST
EMILIO A.M. SUNTAY III vs. ISABEL COJUANGCO-SUNTAYG.R. No. 183053

October 10, 2012

FACTS: Cristina Aguinaldo-Suntay (Cristina) died intestate on 4 June 1990. Cristina

wassurvived by her spouse, Dr. Federico Suntay (Federico) and five grandchildren: three
legitimategrandchildren, including herein respondent, Isabel; and two illegitimate grandchildren,
includingpetitioner Emilio III, all by Federicos and Cristinas only child, Emilio A. Suntay (Emilio I),
whopredeceased his parents. After Cristinas death, respondent Isabel, filed before the RegionalTrial
Court (RTC), Malolos, Bulacan, a petition for the issuance of letters of administration overCristinas
estate. Federico, opposed the petition, and filed a Motion to Dismiss Isabels petitionfor letters of
administration on the ground that Isabel had no right of representation to the estateof Cristina, she being
an illegitimate grandchild of the latter as a result of Isabels parentsmarriage being declared null and
void. Undaunted by the set back, Federico nominated Emilio III to administer the decedents estateon his
behalf in the event letters of administration issues to Federico. Consequently, Emilio IIIfiled an
Opposition-In-Intervention, echoing the allegations in his grandfathers opposition,alleging that
Federico, or in his stead, Emilio III, was better equipped than respondent toadminister and
manage the estate of the decedent, Cristina. Federico died. Almost a yearthereafter or on 9
November 2001, the trial court rendered a decision appointing Emilio III asadministrator of decedent
Cristinas intestate estate. On appeal by certiorari, the Supreme Courtin an earlier case reversed and set
aside the ruling of the appellate court. The Court decided toinclude Emilio III as co-administrator of
Cristinas estate, giving weight to his interest inFedericos estate.
ISSUE: Who between Emilio III and Isabel, is better qualified to act as administrator of thedecedents
estate.
HELD: Isabel. The general rule in the appointment of administrator of the estate of a decedentis laid down
in Section 6, Rule 78 of the Rules of Court:SEC. 6. When and to whom letters of administration granted.
If no executor is named in thewill, or the executor or executors are incompetent, refuse the trust, or fail to
give bond, or aperson 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 thediscretion of the court, or to such person
as such surviving husband or wife, or next of kin,requests to have appointed, if competent and willing to
serve;(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selectedby
them, be incompetent or unwilling, or if the husband or widow, or next of kin, neglects forthirty (30) days
after the death of the person to apply for administration or to request thatadministration be
granted to some other person, it may be granted to one or more of theprincipal creditors, if
competent and willing to serve;(c) If there is not such creditor competent and willing to serve, it may be
granted to such otherperson as the court may select.
Textually, the rule lists a sequence to be observed, an order of preference, in the appointmentof an
administrator. This order of preference, which categorically seeks out the survivingspouse,
the next of kin and the creditors in the appointment of an administrator, has beenreinforced in
jurisprudence. The paramount consideration in the appointment of anadministrator over the
estate of a decedent is the prospective administrators interest in theestate. This is the same
consideration which Section 6, Rule 78 takes into account inestablishing the order of
preference in the appointment of administrator for the estate. Therationale behind the rule is
that those who will reap the benefit of a wise, speedy andeconomical administration of the
estate, or, in the alternative, suffer the consequences of waste,improvidence or mismanagement,

have the highest interest and most influential motive toadminister the estate correctly. In all,
given that the rule speaks of an order of preference, theperson to be appointed administrator of a
decedents estate must demonstrate not only aninterest in the estate, but an interest therein greater
than any other candidate.The collected teaching is that mere demonstration of interest in the estate to be
settled does notipso facto entitle an interested person to co-administration thereof. Neither does
squabblingamong the heirs nor adverse interests necessitate the discounting of the order of preference
setforth in Section 6, Rule 78. Indeed, in the appointment of administrator of the estate of
adeceased person, the principal consideration reckoned with is the interest in said estate of theone to be
appointed as administrator. Given Isabels unassailable interest in the estate as oneof the decedents
legitimate grandchildren and undoubted nearest "next of kin," the appointmentof Emilio III as coadministrator of the same estate, cannot be a demandable right. It is a matterleft entirely to the sound
discretion of the Court and depends on the facts and the attendantcircumstances of the case. Thus, we
proceed to scrutinize the attendant facts and circumstances of this case even as wereiterate Isabels and
her siblings apparent greater interest in the estate of Cristina.These considerations do not warrant the
setting aside of the order of preference mapped out inSection 6, Rule 78 of the Rules of Court. They
compel that a choice be made of one over theother.1. The bitter estrangement and long-standing
animosity between Isabel, on the onehand, and Emilio III, on the other, traced back from the time their
paternal grandparentswere alive, which can be characterized as adverse interest of some kind by, or
hostilityof, Emilio III to Isabel who is immediately interested in the estate;2. Corollary thereto, the
seeming impossibility of Isabel and Emilio III workingharmoniously as co-administrators may
result in prejudice to the decedents estate,ultimately delaying settlement thereof; and3. Emilio III,
for all his claims of knowledge in the management of Cristinas estate, hasnot looked after the estates
welfare and has acted to the damage and prejudice thereof.The evidence reveals that Emilio III has
turned out to be an unsuitable administrator of theestate. Respondent Isabel points out that after Emilio
IIIs appointment as administrator of thesubject estate in 2001, he has not looked after the welfare of the
subject estate and has actuallyacted to the damage and prejudice thereof.

JOSE C. LEE AND ALMA AGGABAO, in their capacities as President and Corporate Secretary,
respectively, of Philippines Internationl Life Insurance Company, and FILIPINO LOAN ASSISTANCE
GROUP, petitioners, vs. REGIONAL TRIAL COURT OF QUEZON CITY BRANCH 85 presided by JUDGE
PEDRO M. AREOLA, BRANCH CLERK OF COURT JANICE Y. ANTERO, DEPUTY SHERIFFS
ADENAUER G. RIVERA and PEDRO L. BORJA, all of the Regional Trial Court of Quezon City Branch 85,
MA. DIVINA ENDERES claiming to be Special Administratrix, and other persons/ public officers acting for
and in their behalf, respondents.
DECISION
CORONA, J.:

This is a petition for review under Rule 45 of the Rules of Court seeking to reverse and set aside the
decision[1] of the Court of Appeals, First Division, dated July 26, 2000, in CA G.R. 59736, which
dismissed the petition for certiorari filed by petitioners Jose C. Lee and Alma Aggabao (in their capacities
as president and secretary, respectively, of Philippine International Life Insurance Company) and Filipino
Loan Assistance Group.

The antecedent facts follow.

Dr. Juvencio P. Ortaez incorporated the Philippine International Life Insurance Company, Inc. on July 6,
1956. At the time of the companys incorporation, Dr. Ortaez owned ninety percent (90%) of the
subscribed capital stock.

On July 21, 1980, Dr. Ortaez died. He left behind a wife (Juliana Salgado Ortaez), three legitimate
children (Rafael, Jose and Antonio Ortaez) and five illegitimate children by Ligaya Novicio (herein private
respondent Ma. Divina Ortaez-Enderes and her siblings Jose, Romeo, Enrico Manuel and Cesar, all
surnamed Ortaez).[2]

On September 24, 1980, Rafael Ortaez filed before the Court of First Instance of Rizal, Quezon City
Branch (now Regional Trial Court of Quezon City) a petition for letters of administration of the intestate
estate of Dr. Ortaez, docketed as SP Proc. Q-30884 (which petition to date remains pending at Branch 85
thereof).

Private respondent Ma. Divina Ortaez-Enderes and her siblings filed an opposition to the petition for
letters of administration and, in a subsequent urgent motion, prayed that the intestate court appoint a
special administrator.

On March 10, 1982, Judge Ernani Cruz Pao, then presiding judge of Branch 85, appointed Rafael and
Jose Ortaez joint special administrators of their fathers estate. Hearings continued for the appointment of
a regular administrator (up to now no regular administrator has been appointed).

As ordered by the intestate court, special administrators Rafael and Jose Ortaez submitted an inventory
of the estate of their father which included, among other properties, 2,029[3] shares of stock in Philippine
International Life Insurance Company (hereafter Philinterlife), representing 50.725% of the companys
outstanding capital stock.

On April 15, 1989, the decedents wife, Juliana S. Ortaez, claiming that she owned 1,014[4] Philinterlife
shares of stock as her conjugal share in the estate, sold said shares with right to repurchase in favor of
herein petitioner Filipino Loan Assistance Group (FLAG), represented by its president, herein petitioner
Jose C. Lee. Juliana Ortaez failed to repurchase the shares of stock within the stipulated period, thus
ownership thereof was consolidated by petitioner FLAG in its name.

On October 30, 1991, Special Administrator Jose Ortaez, acting in his personal capacity and claiming that
he owned the remaining 1,011[5] Philinterlife shares of stocks as his inheritance share in the estate, sold
said shares with right to repurchase also in favor of herein petitioner FLAG, represented by its president,
herein petitioner Jose C. Lee. After one year, petitioner FLAG consolidated in its name the ownership of
the Philinterlife shares of stock when Jose Ortaez failed to repurchase the same.

It appears that several years before (but already during the pendency of the intestate proceedings at the
Regional Trial Court of Quezon City, Branch 85), Juliana Ortaez and her two children, Special
Administrators Rafael and Jose Ortaez, entered into a memorandum of agreement dated March 4, 1982
for the extrajudicial settlement of the estate of Dr. Juvencio Ortaez, partitioning the estate (including the
Philinterlife shares of stock) among themselves. This was the basis of the number of shares separately
sold by Juliana Ortaez on April 15, 1989 (1,014 shares) and by Jose Ortaez on October 30, 1991 (1,011
shares) in favor of herein petitioner FLAG.

On July 12, 1995, herein private respondent Ma. Divina OrtaezEnderes and her siblings (hereafter
referred to as private respondents Enderes et al.) filed a motion for appointment of special administrator
of Philinterlife shares of stock. This move was opposed by Special Administrator Jose Ortaez.

On November 8, 1995, the intestate court granted the motion of private respondents Enderes et al. and
appointed private respondent Enderes special administratrix of the Philinterlife shares of stock.

On December 20, 1995, Special Administratrix Enderes filed an urgent motion to declare void ab initio the
memorandum of agreement dated March 4, 1982. On January 9, 1996, she filed a motion to declare the
partial nullity of the extrajudicial settlement of the decedents estate. These motions were opposed by
Special Administrator Jose Ortaez.

On March 22, 1996, Special Administratrix Enderes filed an urgent motion to declare void ab initio the
deeds of sale of Philinterlife shares of stock, which move was again opposed by Special Administrator
Jose Ortaez.

On February 4, 1997, Jose Ortaez filed an omnibus motion for (1) the approval of the deeds of sale of the
Philinterlife shares of stock and (2) the release of Ma. Divina Ortaez-Enderes as special administratrix of
the Philinterlife shares of stock on the ground that there were no longer any shares of stock for her to
administer.

On August 11, 1997, the intestate court denied the omnibus motion of Special Administrator Jose Ortaez
for the approval of the deeds of sale for the reason that:

Under the Godoy case, supra, it was held in substance that a sale of a property of the estate without an
Order of the probate court is void and passes no title to the purchaser. Since the sales in question were
entered into by Juliana S. Ortaez and Jose S. Ortaez in their personal capacity without prior approval of
the Court, the same is not binding upon the Estate.

WHEREFORE, the OMNIBUS MOTION for the approval of the sale of Philinterlife shares of stock and
release of Ma. Divina Ortaez-Enderes as Special Administratrix is hereby denied.[6]

On August 29, 1997, the intestate court issued another order granting the motion of Special Administratrix
Enderes for the annulment of the March 4, 1982 memorandum of agreement or extrajudicial partition of
estate. The court reasoned that:

In consonance with the Order of this Court dated August 11, 1997 DENYING the approval of the sale of
Philinterlife shares of stocks and release of Ma. Divina Ortaez-Enderes as Special Administratrix, the
Urgent Motion to Declare Void Ab Initio Memorandum of Agreement dated December 19, 1995. . . is
hereby impliedly partially resolved insofar as the transfer/waiver/renunciation of the Philinterlife shares of
stock are concerned, in particular, No. 5, 9(c), 10(b) and 11(d)(ii) of the Memorandum of Agreement.

WHEREFORE, this Court hereby declares the Memorandum of Agreement dated March 4, 1982
executed by Juliana S. Ortaez, Rafael S. Ortaez and Jose S. Ortaez as partially void ab initio insofar as
the transfer/waiver/renunciation of the Philinterlife shares of stocks are concerned.[7]

Aggrieved by the above-stated orders of the intestate court, Jose Ortaez filed, on December 22, 1997, a
petition for certiorari in the Court of Appeals. The appellate court denied his petition, however, ruling that
there was no legal justification whatsoever for the extrajudicial partition of the estate by Jose Ortaez, his
brother Rafael Ortaez and mother Juliana Ortaez during the pendency of the settlement of the estate of
Dr. Ortaez, without the requisite approval of the intestate court, when it was clear that there were other
heirs to the estate who stood to be prejudiced thereby. Consequently, the sale made by Jose Ortaez and
his mother Juliana Ortaez to FLAG of the shares of stock they invalidly appropriated for themselves,
without approval of the intestate court, was void.[8]

Special Administrator Jose Ortaez filed a motion for reconsideration of the Court of Appeals decision but it
was denied. He elevated the case to the Supreme Court via petition for review under Rule 45 which the
Supreme Court dismissed on October 5, 1998, on a technicality. His motion for reconsideration was
denied with finality on January 13, 1999. On February 23, 1999, the resolution of the Supreme Court
dismissing the petition of Special Administrator Jose Ortaez became final and was subsequently recorded
in the book of entries of judgments.

Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with the rest of the FLAG-controlled board of
directors, increased the authorized capital stock of Philinterlife, diluting in the process the 50.725%
controlling interest of the decedent, Dr. Juvencio Ortaez, in the insurance company.[9] This became the
subject of a separate action at the Securities and Exchange Commission filed by private respondentSpecial Administratrix Enderes against petitioner Jose Lee and other members of the FLAG-controlled
board of Philinterlife on November 7, 1994. Thereafter, various cases were filed by Jose Lee as president
of Philinterlife and Juliana Ortaez and her sons against private respondent-Special Administratrix Enderes
in the SEC and civil courts.[10] Somehow, all these cases were connected to the core dispute on the
legality of the sale of decedent Dr. Ortaezs Philinterlife shares of stock to petitioner FLAG, represented by
its president, herein petitioner Jose Lee who later became the president of Philinterlife after the
controversial sale.

On May 2, 2000, private respondent-Special Administratrix Enderes and her siblings filed a motion for
execution of the Orders of the intestate court dated August 11 and August 29, 1997 because the orders of
the intestate court nullifying the sale (upheld by the Court of Appeals and the Supreme Court) had long
became final. Respondent-Special Administratrix Enderes served a copy of the motion to petitioners Jose
Lee and Alma Aggabao as president and secretary, respectively, of Philinterlife,[11] but petitioners ignored
the same.

On July 6, 2000, the intestate court granted the motion for execution, the dispositive portion of which
read:

WHEREFORE, premises considered, let a writ of execution issue as follows:

1. Confirming the nullity of the sale of the 2,029 Philinterlife shares in the name of the Estate of Dr.
Juvencio Ortaez to Filipino Loan Assistance Group (FLAG);

2. Commanding the President and the Corporate Secretary of Philinterlife to reinstate in the stock and
transfer book of Philinterlife the 2,029 Philinterlife shares of stock in the name of the Estate of Dr.
Juvencio P. Ortaez as the owner thereof without prejudice to other claims for violation of pre-emptive
rights pertaining to the said 2,029 Philinterlife shares;

3. Directing the President and the Corporate Secretary of Philinterlife to issue stock certificates of
Philinterlife for 2,029 shares in the name of the Estate of Dr. Juvencio P. Ortaez as the owner thereof
without prejudice to other claims for violations of pre-emptive rights pertaining to the said 2,029
Philinterlife shares and,

4. Confirming that only the Special Administratrix, Ma. Divina Ortaez-Enderes, has the power to exercise
all the rights appurtenant to the said shares, including the right to vote and to receive dividends.

5. Directing Philinterlife and/or any other person or persons claiming to represent it or otherwise, to
acknowledge and allow the said Special Administratrix to exercise all the aforesaid rights on the said
shares and to refrain from resorting to any action which may tend directly or indirectly to impede, obstruct
or bar the free exercise thereof under pain of contempt.

6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or any other person or
persons claiming to represent it or otherwise, are hereby directed to comply with this order within three (3)
days from receipt hereof under pain of contempt.

7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to implement the writ of
execution with dispatch to forestall any and/or further damage to the Estate.

SO ORDERED.[12]

In the several occasions that the sheriff went to the office of petitioners to execute the writ of execution,
he was barred by the security guard upon petitioners instructions. Thus, private respondent-Special
Administratrix Enderes filed a motion to cite herein petitioners Jose Lee and Alma Aggabao (president
and secretary, respectively, of Philinterlife) in contempt.[13]

Petitioners Lee and Aggabao subsequently filed before the Court of Appeals a petition for certiorari,
docketed as CA G.R. SP No. 59736. Petitioners alleged that the intestate court gravely abused its
discretion in (1) declaring that the ownership of FLAG over the Philinterlife shares of stock was null and
void; (2) ordering the execution of its order declaring such nullity and (3) depriving the petitioners of their
right to due process.

On July 26, 2000, the Court of Appeals dismissed the petition outright:

We are constrained to DISMISS OUTRIGHT the present petition for certiorari and prohibition with prayer
for a temporary restraining order and/or writ of preliminary injunction in the light of the following
considerations:

1. The assailed Order dated August 11, 1997 of the respondent judge had long become final and
executory;

2. The certification on non-forum shopping is signed by only one (1) of the three (3) petitioners in violation
of the Rules; and

3. Except for the assailed orders and writ of execution, deed of sale with right to repurchase, deed of sale
of shares of stocks and omnibus motion, the petition is not accompanied by such pleadings, documents
and other material portions of the record as would support the allegations therein in violation of the
second paragraph, Rule 65 of the 1997 Rules of Civil Procedure, as amended.

Petition is DISMISSED.

SO ORDERED.[14]

The motion for reconsideration filed by petitioners Lee and Aggabao of the above decision was denied by
the Court of Appeals on October 30, 2000:

This resolves the urgent motion for reconsideration filed by the petitioners of our resolution of July 26,
2000 dismissing outrightly the above-entitled petition for the reason, among others, that the assailed
Order dated August 11, 1997 of the respondent Judge had long become final and executory.

Dura lex, sed lex.

WHEREFORE, the urgent motion for reconsideration is hereby DENIED, for lack of merit.

SO ORDERED.[15]

On December 4, 2000, petitioners elevated the case to the Supreme Court through a petition for review
under Rule 45 but on December 13, 2000, we denied the petition because there was no showing that the
Court of Appeals in CA G.R. SP No. 59736 committed any reversible error to warrant the exercise by the
Supreme Court of its discretionary appellate jurisdiction.[16]

However, upon motion for reconsideration filed by petitioners Lee and Aggabao, the Supreme Court
granted the motion and reinstated their petition on September 5, 2001. The parties were then required to
submit their respective memoranda.

Meanwhile, private respondent-Special Administratrix Enderes, on July 19, 2000, filed a motion to direct
the branch clerk of court in lieu of herein petitioners Lee and Aggabao to reinstate the name of Dr. Ortaez
in the stock and transfer book of Philinterlife and issue the corresponding stock certificate pursuant to
Section 10, Rule 39 of the Rules of Court which provides that the court may direct the act to be done at
the cost of the disobedient party by some other person appointed by the court and the act when so done
shall have the effect as if done by the party. Petitioners Lee and Aggabao opposed the motion on the
ground that the intestate court should refrain from acting on the motion because the issues raised therein
were directly related to the issues raised by them in their petition for certiorari at the Court of Appeals
docketed as CA-G.R. SP No. 59736. On October 30, 2000, the intestate court granted the motion, ruling

that there was no prohibition for the intestate court to execute its orders inasmuch as the appellate court
did not issue any TRO or writ of preliminary injunction.

On December 3, 2000, petitioners Lee and Aggabao filed a petition for certiorari in the Court of Appeals,
docketed as CA-G.R. SP No. 62461, questioning this time the October 30, 2000 order of the intestate
court directing the branch clerk of court to issue the stock certificates. They also questioned in the Court
of Appeals the order of the intestate court nullifying the sale made in their favor by Juliana Ortaez and
Jose Ortaez. On November 20, 2002, the Court of Appeals denied their petition and upheld the power of
the intestate court to execute its order. Petitioners Lee and Aggabao then filed motion for reconsideration
which at present is still pending resolution by the Court of Appeals.

Petitioners Jose Lee and Alma Aggabao (president and secretary, respectively, of Philinterlife) and FLAG
now raise the following errors for our consideration:

THE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR:

A. IN FAILING TO RECONSIDER ITS PREVIOUS RESOLUTION DENYING THE PETITION DESPITE

THE FACT THAT THE APPELLATE COURTS MISTAKE IN APPREHENDING THE FACTS HAD
BECOME PATENT AND EVIDENT FROM THE MOTION FOR RECONSIDERATION AND THE
COMMENT OF RESPONDENT ENDERES WHICH HAD ADMITTED THE FACTUAL ALLEGATIONS OF
PETITIONERS IN THE PETITION AS WELL AS IN THE MOTION FOR RECONSIDERATION.
MOREOVER, THE RESOLUTION OF THE APPELLATE COURT DENYING THE MOTION FOR
RECONSIDERATION WAS CONTAINED IN ONLY ONE PAGE WITHOUT EVEN TOUCHING ON THE
SUBSTANTIVE MERITS OF THE EXHAUSTIVE DISCUSSION OF FACTS AND SUPPORTING LAW IN
THE MOTION FOR RECONSIDERATION IN VIOLATION OF THE RULE ON ADMINISTRATIVE DUE
PROCESS;

B. IN FAILING TO SET ASIDE THE VOID ORDERS OF THE INTESTATE COURT ON THE
ERRONEOUS GROUND THAT THE ORDERS WERE FINAL AND EXECUTORY WITH REGARD TO
PETITIONERS EVEN AS THE LATTER WERE NEVER NOTIFIED OF THE PROCEEDINGS OR ORDER
CANCELING ITS OWNERSHIP;

C. IN NOT FINDING THAT THE INTESTATE COURT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO EXCESS OF JURISDICTION (1) WHEN IT ISSUED THE OMNIBUS ORDER
NULLIFYING THE OWNERSHIP OF PETITIONER FLAG OVER SHARES OF STOCK WHICH WERE
ALLEGED TO BE PART OF THE ESTATE AND (2) WHEN IT ISSUED A VOID WRIT OF EXECUTION
AGAINST PETITIONER FLAG AS PRESENT OWNER TO IMPLEMENT MERELY PROVISIONAL
ORDERS, THEREBY VIOLATING FLAGS CONSTITUTIONAL RIGHT AGAINST DEPRIVATION OF
PROPERTY WITHOUT DUE PROCESS;

D. IN FAILING TO DECLARE NULL AND VOID THE ORDERS OF THE INTESTATE COURT WHICH
NULLIFIED THE SALE OF SHARES OF STOCK BETWEEN THE LEGITIMATE HEIR JOSE S. ORTAEZ
AND PETITIONER FLAG BECAUSE OF SETTLED LAW AND JURISPRUDENCE, I.E., THAT AN HEIR
HAS THE RIGHT TO DISPOSE OF THE DECEDENTS PROPERTY EVEN IF THE SAME IS UNDER
ADMINISTRATION PURSUANT TO CIVIL CODE PROVISION THAT POSSESSION OF HEREDITARY
PROPERTY IS TRANSMITTED TO THE HEIR THE MOMENT OF DEATH OF THE DECEDENT
(ACEDEBO VS. ABESAMIS, 217 SCRA 194);

E. IN DISREGARDING THE FINAL DECISION OF THE SUPREME COURT IN G.R. NO. 128525 DATED
DECEMBER 17, 1999 INVOLVING SUBSTANTIALLY THE SAME PARTIES, TO WIT, PETITIONERS
JOSE C. LEE AND ALMA AGGABAO WERE RESPONDENTS IN THAT CASE WHILE RESPONDENT
MA. DIVINA ENDERES WAS THE PETITIONER THEREIN. THAT DECISION, WHICH CAN BE
CONSIDERED LAW OF THE CASE, RULED THAT PETITIONERS CANNOT BE ENJOINED BY
RESPONDENT ENDERES FROM EXERCISING THEIR POWER AS DIRECTORS AND OFFICERS OF
PHILINTERLIFE AND THAT THE INTESTATE COURT IN CHARGE OF THE INTESTATE
PROCEEDINGS CANNOT ADJUDICATE TITLE TO PROPERTIES CLAIMED TO BE PART OF THE
ESTATE AND WHICH ARE EQUALLY CLAIMED BY PETITIONER FLAG.[17]

The petition has no merit.

Petitioners Jose Lee and Alma Aggabao, representing Philinterlife and FLAG, assail before us not only
the validity of the writ of execution issued by the intestate court dated July 7, 2000 but also the validity of
the August 11, 1997 order of the intestate court nullifying the sale of the 2,029 Philinterlife shares of stock
made by Juliana Ortaez and Jose Ortaez, in their personal capacities and without court approval, in favor
of petitioner FLAG.

We cannot allow petitioners to reopen the issue of nullity of the sale of the Philinterlife shares of stock in
their favor because this was already settled a long time ago by the Court of Appeals in its decision dated
June 23, 1998 in CA-G.R. SP No. 46342. This decision was effectively upheld by us in our resolution
dated October 9, 1998 in G.R. No. 135177 dismissing the petition for review on a technicality and
thereafter denying the motion for reconsideration on January 13, 1999 on the ground that there was no
compelling reason to reconsider said denial.[18] Our decision became final on February 23, 1999 and
was accordingly entered in the book of entry of judgments. For all intents and purposes therefore, the
nullity of the sale of the Philinterlife shares of stock made by Juliana Ortaez and Jose Ortaez in favor of
petitioner FLAG is already a closed case. To reopen said issue would set a bad precedent, opening the
door wide open for dissatisfied parties to relitigate unfavorable decisions no end. This is completely
inimical to the orderly and efficient administration of justice.

The said decision of the Court of Appeals in CA-G.R. SP No. 46342 affirming the nullity of the sale made
by Jose Ortaez and his mother Juliana Ortaez of the Philinterlife shares of stock read:

Petitioners asseverations relative to said [memorandum] agreement were scuttled during the hearing
before this Court thus:

JUSTICE AQUINO:

Counsel for petitioner, when the Memorandum of Agreement was executed, did the children of Juliana
Salgado know already that there was a claim for share in the inheritance of the children of Novicio?

ATTY. CALIMAG:

Your Honor please, at that time, Your Honor, it is already known to them.

JUSTICE AQUINO:

What can be your legal justification for extrajudicial settlement of a property subject of intestate
proceedings when there is an adverse claim of another set of heirs, alleged heirs? What would be the
legal justification for extra-judicially settling a property under administration without the approval of the
intestate court?

ATTY. CALIMAG:

Well, Your Honor please, in that extra-judicial settlement there is an approval of the honorable court as to
the propertys partition x x x. There were as mentioned by the respondents counsel, Your Honor.

ATTY. BUYCO:

No

JUSTICE AQUINO:

The point is, there can be no adjudication of a property under intestate proceedings without the approval
of the court. That is basic unless you can present justification on that. In fact, there are two steps: first,
you ask leave and then execute the document and then ask for approval of the document executed. Now,
is there any legal justification to exclude this particular transaction from those steps?

ATTY. CALIMAG:

None, Your Honor.

ATTY BUYCO:

With that admission that there is no legal justification, Your Honor, we rest the case for the private
respondent. How can the lower court be accused of abusing its discretion? (pages 33-35, TSN of January
29, 1998).

Thus, We find merit in the following postulation by private respondent:

What we have here is a situation where some of the heirs of the decedent without securing court approval
have appropriated as their own personal property the properties of [the] Estate, to the exclusion and the
extreme prejudice of the other claimant/heirs. In other words, these heirs, without court approval, have
distributed the asset of the estate among themselves and proceeded to dispose the same to third parties
even in the absence of an order of distribution by the Estate Court. As admitted by petitioners counsel,
there was absolutely no legal justification for this action by the heirs. There being no legal justification,
petitioner has no basis for demanding that public respondent [the intestate court] approve the sale of the
Philinterlife shares of the Estate by Juliana and Jose Ortaez in favor of the Filipino Loan Assistance
Group.

It is an undisputed fact that the parties to the Memorandum of Agreement dated March 4, 1982 (see
Annex 7 of the Comment). . . are not the only heirs claiming an interest in the estate left by Dr. Juvencio
P. Ortaez. The records of this case. . . clearly show that as early as March 3, 1981 an Opposition to the
Application for Issuance of Letters of Administration was filed by the acknowledged natural children of Dr.
Juvencio P. Ortaez with Ligaya Novicio. . . This claim by the acknowledged natural children of Dr.
Juvencio P. Ortaez is admittedly known to the parties to the Memorandum of Agreement before they
executed the same. This much was admitted by petitioners counsel during the oral argument. xxx

Given the foregoing facts, and the applicable jurisprudence, public respondent can never be faulted for
not approving. . . the subsequent sale by the petitioner [Jose Ortaez] and his mother [Juliana Ortaez] of
the Philinterlife shares belonging to the Estate of Dr. Juvencio P. Ortaez. (pages 3-4 of Private
Respondents Memorandum; pages 243-244 of the Rollo)

Amidst the foregoing, We found no grave abuse of discretion amounting to excess or want of jurisdiction
committed by respondent judge.[19]

From the above decision, it is clear that Juliana Ortaez, and her three sons, Jose, Rafael and Antonio, all
surnamed Ortaez, invalidly entered into a memorandum of agreement extrajudicially partitioning the
intestate estate among themselves, despite their knowledge that there were other heirs or claimants to
the estate and before final settlement of the estate by the intestate court. Since the appropriation of the
estate properties by Juliana Ortaez and her children (Jose, Rafael and Antonio Ortaez) was invalid, the
subsequent sale thereof by Juliana and Jose to a third party (FLAG), without court approval, was likewise
void.

An heir can sell his right, interest, or participation in the property under administration under Art. 533 of
the Civil Code which provides that possession of hereditary property is deemed transmitted to the heir
without interruption from the moment of death of the decedent.[20] However, an heir can only alienate
such portion of the estate that may be allotted to him in the division of the estate by the probate or
intestate court after final adjudication, that is, after all debtors shall have been paid or the devisees or
legatees shall have been given their shares.[21] This means that an heir may only sell his ideal or
undivided share in the estate, not any specific property therein. In the present case, Juliana Ortaez and
Jose Ortaez sold specific properties of the estate (1,014 and 1,011 shares of stock in Philinterlife) in favor
of petitioner FLAG. This they could not lawfully do pending the final adjudication of the estate by the
intestate court because of the undue prejudice it would cause the other claimants to the estate, as what
happened in the present case.

Juliana Ortaez and Jose Ortaez sold specific properties of the estate, without court approval. It is wellsettled that court approval is necessary for the validity of any disposition of the decedents estate. In the
early case of Godoy vs. Orellano,[22] we laid down the rule that the sale of the property of the estate by
an administrator without the order of the probate court is void and passes no title to the purchaser. And in
the case of Dillena vs. Court of Appeals,[23] we ruled that:

[I]t must be emphasized that the questioned properties (fishpond) were included in the inventory of
properties of the estate submitted by then Administratrix Fausta Carreon Herrera on November 14, 1974.
Private respondent was appointed as administratrix of the estate on March 3, 1976 in lieu of Fausta
Carreon Herrera. On November 1, 1978, the questioned deed of sale of the fishponds was executed
between petitioner and private respondent without notice and approval of the probate court. Even after

the sale, administratrix Aurora Carreon still included the three fishponds as among the real properties of
the estate in her inventory submitted on August 13, 1981. In fact, as stated by the Court of Appeals,
petitioner, at the time of the sale of the fishponds in question, knew that the same were part of the estate
under administration.

xxxxxxxxx

The subject properties therefore are under the jurisdiction of the probate court which according to our
settled jurisprudence has the authority to approve any disposition regarding properties under
administration. . . More emphatic is the declaration We made in Estate of Olave vs. Reyes (123 SCRA
767) where We stated that when the estate of the deceased person is already the subject of a testate or
intestate proceeding, the administrator cannot enter into any transaction involving it without prior approval
of the probate court.

Only recently, in Manotok Realty, Inc. vs. Court of Appeals (149 SCRA 174), We held that the sale of an
immovable property belonging to the estate of a decedent, in a special proceedings, needs court
approval. . . This pronouncement finds support in the previous case of Dolores Vda. De Gil vs. Agustin
Cancio (14 SCRA 797) wherein We emphasized that it is within the jurisdiction of a probate court to
approve the sale of properties of a deceased person by his prospective heirs before final adjudication. x x
x

It being settled that property under administration needs the approval of the probate court before it can be
disposed of, any unauthorized disposition does not bind the estate and is null and void. As early as 1921
in the case of Godoy vs. Orellano (42 Phil 347), We laid down the rule that a sale by an administrator of
property of the deceased, which is not authorized by the probate court is null and void and title does not
pass to the purchaser.

There is hardly any doubt that the probate court can declare null and void the disposition of the property
under administration, made by private respondent, the same having been effected without authority from
said court. It is the probate court that has the power to authorize and/or approve the sale (Section 4 and
7, Rule 89), hence, a fortiori, it is said court that can declare it null and void for as long as the proceedings
had not been closed or terminated. To uphold petitioners contention that the probate court cannot annul
the unauthorized sale, would render meaningless the power pertaining to the said court. (Bonga vs. Soler,
2 SCRA 755). (emphasis ours)

Our jurisprudence is therefore clear that (1) any disposition of estate property by an administrator or
prospective heir pending final adjudication requires court approval and (2) any unauthorized disposition of
estate property can be annulled by the probate court, there being no need for a separate action to annul
the unauthorized disposition.

The question now is: can the intestate or probate court execute its order nullifying the invalid sale?

We see no reason why it cannot. The intestate court has the power to execute its order with regard to the
nullity of an unauthorized sale of estate property, otherwise its power to annul the unauthorized or
fraudulent disposition of estate property would be meaningless. In other words, enforcement is a
necessary adjunct of the intestate or probate courts power to annul unauthorized or fraudulent
transactions to prevent the dissipation of estate property before final adjudication.

Moreover, in this case, the order of the intestate court nullifying the sale was affirmed by the appellate
courts (the Court of Appeals in CA-G.R. SP No. 46342 dated June 23, 1998 and subsequently by the
Supreme Court in G.R. No. 135177 dated October 9, 1998). The finality of the decision of the Supreme
Court was entered in the book of entry of judgments on February 23, 1999. Considering the finality of the
order of the intestate court nullifying the sale, as affirmed by the appellate courts, it was correct for private
respondent-Special Administratrix Enderes to thereafter move for a writ of execution and for the intestate
court to grant it.

Petitioners Jose Lee, Alma Aggabao and FLAG, however, contend that the probate court could not issue
a writ of execution with regard to its order nullifying the sale because said order was merely provisional:

The only authority given by law is for respondent judge to determine provisionally whether said shares are
included or excluded in the inventory In ordering the execution of the orders, respondent judge acted in
excess of his jurisdiction and grossly violated settled law and jurisprudence, i.e., that the determination by
a probate or intestate court of whether a property is included or excluded in the inventory of the estate
being provisional in nature, cannot be the subject of execution.[24] (emphasis ours)

Petitioners argument is misplaced. There is no question, based on the facts of this case, that the
Philinterlife shares of stock were part of the estate of Dr. Juvencio Ortaez from the very start as in fact
these shares were included in the inventory of the properties of the estate submitted by Rafael Ortaez
after he and his brother, Jose Ortaez, were appointed special administrators by the intestate court.[25]

The controversy here actually started when, during the pendency of the settlement of the estate of Dr.
Ortaez, his wife Juliana Ortaez sold the 1,014 Philinterlife shares of stock in favor petitioner FLAG without
the approval of the intestate court. Her son Jose Ortaez later sold the remaining 1,011 Philinterlife shares
also in favor of FLAG without the approval of the intestate court.

We are not dealing here with the issue of inclusion or exclusion of properties in the inventory of the estate
because there is no question that, from the very start, the Philinterlife shares of stock were owned by the
decedent, Dr. Juvencio Ortaez. Rather, we are concerned here with the effect of the sale made by the
decedents heirs, Juliana Ortaez and Jose Ortaez, without the required approval of the intestate court.
This being so, the contention of petitioners that the determination of the intestate court was merely
provisional and should have been threshed out in a separate proceeding is incorrect.

The petitioners Jose Lee and Alma Aggabao next contend that the writ of execution should not be
executed against them because they were not notified, nor they were aware, of the proceedings nullifying
the sale of the shares of stock.

We are not persuaded. The title of the purchaser like herein petitioner FLAG can be struck down by the
intestate court after a clear showing of the nullity of the alienation. This is the logical consequence of our
ruling in Godoy and in several subsequent cases.[26] The sale of any property of the estate by an
administrator or prospective heir without order of the probate or intestate court is void and passes no title
to the purchaser. Thus, in Juan Lao et al. vs. Hon. Melencio Geneto, G.R. No. 56451, June 19, 1985, we
ordered the probate court to cancel the transfer certificate of title issued to the vendees at the instance of
the administrator after finding that the sale of real property under probate proceedings was made without
the prior approval of the court. The dispositive portion of our decision read:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the assailed Order dated February 18, 1981 of the
respondent Judge approving the questioned Amicable Settlement is declared NULL and VOID and hereby
SET ASIDE. Consequently, the sale in favor of Sotero Dioniosio III and by the latter to William Go is
likewise declared NULL and VOID. The Transfer Certificate of Title issued to the latter is hereby ordered
cancelled.

It goes without saying that the increase in Philinterlifes authorized capital stock, approved on the vote of
petitioners non-existent shareholdings and obviously calculated to make it difficult for Dr. Ortaezs estate
to reassume its controlling interest in Philinterlife, was likewise void ab initio.

Petitioners next argue that they were denied due process.

We do not think so.

The facts show that petitioners, for reasons known only to them, did not appeal the decision of the
intestate court nullifying the sale of shares of stock in their favor. Only the vendor, Jose Ortaez, appealed
the case. A careful review of the records shows that petitioners had actual knowledge of the estate

settlement proceedings and that they knew private respondent Enderes was questioning therein the sale
to them of the Philinterlife shares of stock.

It must be noted that private respondent-Special Administratrix Enderes filed before the intestate court
(RTC of Quezon City, Branch 85) a Motion to Declare Void Ab Initio Deeds of Sale of Philinterlife Shares
of Stock on March 22, 1996. But as early as 1994, petitioners already knew of the pending settlement
proceedings and that the shares they bought were under the administration by the intestate court
because private respondent Ma. Divina Ortaez-Enderes and her mother Ligaya Novicio had filed a case
against them at the Securities and Exchange Commission on November 7, 1994, docketed as SEC No.
11-94-4909, for annulment of transfer of shares of stock, annulment of sale of corporate properties,
annulment of subscriptions on increased capital stocks, accounting, inspection of corporate books and
records and damages with prayer for a writ of preliminary injunction and/or temporary restraining order.
[27] In said case, Enderes and her mother questioned the sale of the aforesaid shares of stock to
petitioners. The SEC hearing officer in fact, in his resolution dated March 24, 1995, deferred to the
jurisdiction of the intestate court to rule on the validity of the sale of shares of stock sold to petitioners by
Jose Ortaez and Juliana Ortaez:

Petitioners also averred that. . . the Philinterlife shares of Dr. Juvencio Ortaez who died, in 1980, are part
of his estate which is presently the subject matter of an intestate proceeding of the RTC of Quezon City,
Branch 85. Although, private respondents [Jose Lee et al.] presented the documents of partition whereby
the foregoing share of stocks were allegedly partitioned and conveyed to Jose S. Ortaez who allegedly
assigned the same to the other private respondents, approval of the Court was not presented. Thus, the
assignments to the private respondents [Jose Lee et al.] of the subject shares of stocks are void.

xxxxxxxxx

With respect to the alleged extrajudicial partition of the shares of stock owned by the late Dr. Juvencio
Ortaez, we rule that the matter properly belongs to the jurisdiction of the regular court where the intestate
proceedings are currently pending.[28]

With this resolution of the SEC hearing officer dated as early as March 24, 1995 recognizing the
jurisdiction of the intestate court to determine the validity of the extrajudicial partition of the estate of Dr.
Ortaez and the subsequent sale by the heirs of the decedent of the Philinterlife shares of stock to
petitioners, how can petitioners claim that they were not aware of the intestate proceedings?

Futhermore, when the resolution of the SEC hearing officer reached the Supreme Court in 1996
(docketed as G.R. 128525), herein petitioners who were respondents therein filed their answer which
contained statements showing that they knew of the pending intestate proceedings:

[T]he subject matter of the complaint is not within the jurisdiction of the SEC but with the Regional Trial
Court; Ligaya Novicio and children represented themselves to be the common law wife and illegitimate
children of the late Ortaez; that on March 4, 1982, the surviving spouse Juliana Ortaez, on her behalf and
for her minor son Antonio, executed a Memorandum of Agreement with her other sons Rafael and Jose,
both surnamed Ortaez, dividing the estate of the deceased composed of his one-half (1/2) share in the
conjugal properties; that in the said Memorandum of Agreement, Jose S. Ortaez acquired as his share of
the estate the 1,329 shares of stock in Philinterlife; that on March 4, 1982, Juliana and Rafael assigned
their respective shares of stock in Philinterlife to Jose; that contrary to the contentions of petitioners,
private respondents Jose Lee, Carlos Lee, Benjamin Lee and Alma Aggabao became stockholders of
Philinterlife on March 23, 1983 when Jose S. Ortaez, the principal stockholder at that time, executed a
deed of sale of his shares of stock to private respondents; and that the right of petitioners to question the
Memorandum of Agreement and the acquisition of shares of stock of private respondent is barred by
prescription.[29]

Also, private respondent-Special Administratrix Enderes offered additional proof of actual knowledge of
the settlement proceedings by petitioners which petitioners never denied: (1) that petitioners were
represented by Atty. Ricardo Calimag previously hired by the mother of private respondent Enderes to
initiate cases against petitioners Jose Lee and Alma Aggaboa for the nullification of the sale of the shares
of stock but said counsel made a conflicting turn-around and appeared instead as counsel of petitioners,
and (2) that the deeds of sale executed between petitioners and the heirs of the decedent (vendors
Juliana Ortaez and Jose Ortaez) were acknowledged before Atty. Ramon Carpio who, during the
pendency of the settlement proceedings, filed a motion for the approval of the sale of Philinterlife shares
of stock to the Knights of Columbus Fraternal Association, Inc. (which motion was, however, later
abandoned).[30] All this sufficiently proves that petitioners, through their counsels, knew of the pending
settlement proceedings.

Finally, petitioners filed several criminal cases such as libel (Criminal Case No. 97-7179-81), grave
coercion (Criminal Case No. 84624) and robbery (Criminal Case No. Q-96-67919) against private
respondents mother Ligaya Novicio who was a director of Philinterlife,[31] all of which criminal cases were
related to the questionable sale to petitioners of the Philinterlife shares of stock.

Considering these circumstances, we cannot accept petitioners claim of denial of due process. The
essence of due process is the reasonable opportunity to be heard. Where the opportunity to be heard has
been accorded, there is no denial of due process.[32] In this case, petitioners knew of the pending
instestate proceedings for the settlement of Dr. Juvencio Ortaezs estate but for reasons they alone knew,
they never intervened. When the court declared the nullity of the sale, they did not bother to appeal. And
when they were notified of the motion for execution of the Orders of the intestate court, they ignored the
same. Clearly, petitioners alone should bear the blame.

Petitioners next contend that we are bound by our ruling in G.R. No. 128525 entitled Ma. Divina OrtaezEnderes vs. Court of Appeals, dated December 17, 1999, where we allegedly ruled that the intestate court
may not pass upon the title to a certain property for the purpose of determining whether the same should

or should not be included in the inventory but such determination is not conclusive and is subject to final
decision in a separate action regarding ownership which may be constituted by the parties.

We are not unaware of our decision in G.R. No. 128525. The issue therein was whether the Court of
Appeals erred in affirming the resolution of the SEC that Enderes et al. were not entitled to the issuance
of the writ of preliminary injunction. We ruled that the Court of Appeals was correct in affirming the
resolution of the SEC denying the issuance of the writ of preliminary injunction because injunction is not
designed to protect contingent rights. Said case did not rule on the issue of the validity of the sale of
shares of stock belonging to the decedents estate without court approval nor of the validity of the writ of
execution issued by the intestate court. G.R. No. 128525 clearly involved a different issue and it does not
therefore apply to the present case.

Petitioners and all parties claiming rights under them are hereby warned not to further delay the execution
of the Orders of the intestate court dated August 11 and August 29, 1997.

WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals in CA-G.R. S.P. No.
59736 dated July 26, 2000, dismissing petitioners petition for certiorari and affirming the July 6, 2000
order of the trial court which ordered the execution of its (trial courts) August 11 and 29, 1997 orders, is
hereby AFFIRMED.

SO ORDERED.

LEE DIGEST

Facts:
Dr. Juvencio P. Ortaez incorporated the Philippine International Life Insurance Company, Inc. on 1956.
At the time of the companys incorporation, Dr. Ortaez owned ninety percent (90%) of the subscribed
capital stock.
On July 21, 1980, Dr. Ortaez died. He left behind a wife (Juliana Salgado Ortaez), three legitimate
children (Rafael, Jose and Antonio Ortaez) and five illegitimate children by Ligaya Novicio (herein private
respondent Ma. Divina Ortaez-Enderes and her siblings Jose, Romeo, Enrico Manuel and Cesar, all
surnamed Ortaez). <3 Peaches <3
Special administrators Rafael and Jose Ortaez submitted an inventory of the estate of their father
which included 2,029 shares of stock in Philippine International Life Insurance Company, representing
50.725% of the companys outstanding capital stock.
Juliana (wife) and Jose (legit child) sold 1,014 and 1,011 shares respectively to FLAG.
The legal family entered into an extrajudicial settlement of the estate of Dr. Juvencio Ortaez,
partitioning the estate among themselves. This was the basis of the number of shares separately sold by
them.
The lower court declared the shares of stock as null and void. CA affirmed.
Meanwhile, the FLAG-controlled board of directors, increased the authorized capital stock of
Philinterlife, diluting in the process the 50.725% controlling interest Dr. Juvencio Ortaez, in the insurance

o
o

company. Enderes filed an action at the SEC. The SEC hearing officer dismissed the case acknowledging
the jurisdiction of the civil courts.
Jose Lee and Alma Aggabao as president and secretary of Philinterlife ignored the orders nullifying the
sales of the shares of stock. <3 Peaches <3
Issue:
WON the sale of the shares of stock of Philinterlife is void. (YES)
Ruling:
YES. Our jurisprudence is clear that
(1) any disposition of estate property by an administrator or prospective heir pending final adjudication
requires court approval and
(2) any unauthorized disposition of estate property can be annulled by the probate court, there being no
need for a separate action to annul the unauthorized disposition.
An heir can sell his right, interest, or participation in the property under administration under NCC 533
which provides that possession of hereditary property is deemed transmitted to the heir without
interruption from the moment of death of the decedent. However, an heir can only alienate such portion of
the estate that may be allotted to him in the division of the estate by the probate or intestate court after
final adjudication, that is, after all debtors shall have been paid or the devisees or legatees shall have
been given their shares. This means that an heir may only sell his ideal or undivided share in the estate,
not any specific property therein. <3 Peaches <3
It goes without saying that the increase in Philinterlifes authorized capital stock, approved on the vote
of petitioners non-existent shareholdings and obviously calculated to make it difficult for Dr. Ortaezs
estate to reassume its controlling interest in Philinterlife, was likewise void ab initio.

[G.R. No. 118671. January 29, 1996]

THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ, Executor, petitioner, vs. THE COURT OF
APPEALS (Former Special Sixth Division), MARIA PILAR RUIZ-MONTES, MARIA CATHRYN
RUIZ, CANDICE ALBERTINE RUIZ, MARIA ANGELINE RUIZ and THE PRESIDING JUDGE OF
THE REGIONAL TRIAL COURT OF PASIG, BRANCH 156, respondents.
DECISION
PUNO, J.:
This petition for review on certiorari seeks to annul and set aside the decision dated November 10,
1994 and the resolution dated January 5, 1995 of the Court of Appeals in CA-G.R. SP No. 33045.
The facts show that on June 27, 1987, Hilario M. Ruiz1 executed a holographic will naming as his
heirs his only son, Edmond Ruiz, his adopted daughter, private respondent Maria Pilar Ruiz Montes, and
his three granddaughters, private respondents Maria Cathryn, Candice Albertine and Maria Angeline, all
children of Edmond Ruiz. The testator bequeathed to his heirs substantial cash, personal and real
properties and named Edmond Ruiz executor of his estate. 2
On April 12, 1988, Hilario Ruiz died. Immediately thereafter, the cash component of his estate was
distributed among Edmond Ruiz and private respondents in accordance with the decedents will. For
unbeknown reasons, Edmond, the named executor, did not take any action for the probate of his fathers
holographic will.

On June 29, 1992, four years after the testators death, it was private respondent Maria Pilar Ruiz
Montes who filed before the Regional Trial Court, Branch 156, Pasig, a petition for the probate and
approval of Hilario Ruizs will and for the issuance of letters testamentary to Edmond
Ruiz.3 Surprisingly, Edmond opposed the petition on the ground that the will was executed under undue
influence.
On November 2, 1992, one of the properties of the estate - the house and lot at No. 2 Oliva Street,
Valle Verde IV, Pasig which the testator bequeathed to Maria Cathryn, Candice Albertine and Maria
Angeline4 - was leased out by Edmond Ruiz to third persons.
On January 19, 1993, the probate court ordered Edmond to deposit with the Branch Clerk of Court
the rental deposit and payments totalling P540,000.00 representing the one-year lease of the Valle Verde
property.
In
compliance,
on January25, 1993, Edmond turned
over
the
amount
of P348,583.56, representing the balance of the rent after deducting P191,416.14 for repair and
maintenance expenses on the estate.5
In March 1993, Edmond moved for the release of P50,000.00 to pay the real estate taxes on the real
properties of the estate. The probate court approved the release of P7,722.00 6
On May 14, 1993, Edmond withdrew his opposition to the probate of the will. Consequently, the
probate court, on May 18, 1993, admitted the will to probate and ordered the issuance of letters
testamentary to Edmond conditioned upon the filing of a bond in the amount of P50,000.00. The letters
testamentary were issued on June 23, 1993.
On July 28, 1993, petitioner Testate Estate of Hilario Ruiz as executor, filed an Ex-Parte Motion for
Release of Funds. It prayed for the release of the rent payments deposited with the Branch Clerk of
Court. Respondent Montes opposed the motion and concurrently filed a Motion for Release of Funds to
Certain Heirs and Motion for Issuance of Certificate of Allowance of Probate Will. Montes prayed for the
release of the said rent payments to Maria Cathryn, Candice Albertine and Maria Angeline and for the
distribution of the testators properties, specifically the Valle Verde property and the Blue
Ridge apartments, in accordance with the provisions of the holographic will.
On August 26, 1993, the probate court denied petitioners motion for release of funds but granted
respondent Montes motion in view of petitioners lack of opposition. It thus ordered the release of the rent
payments to the decedents three granddaughters. It further ordered the delivery of the titleds to and
possession of the properties bequeathed to the three granddaughters and respondent Montes upon the
filing of a bond of P50,000.00.
Petitioner moved for reconsideration alleging that he actually filed his opposition to respondent
Montes motion for release of rent payments which opposition the court failed to consider. Petitioner
likewise reiterated his previous motion for release of funds.
On November 23, 1993, petitioner, through counsel, manifested that he was withdrawing his motion
for release of funds in view of the fact that the lease contract over Valle Verde property had been renewed
for another year.7
Despite petitioners manifestation, the probate court, on December 22, 1993, ordered the release of
the funds to Edmond but only such amount as may be necessary to cover the espenses of administration

and allowanceas for support of the testators three granddaughters subject to collation and deductible from
their share in the inheritance. The court, however, held in abeyance the release of the titles to respondent
Montes and the three granddaughters until the lapse of six months from the date of firast publication of
the notice to creditors.8 The Court stated thus:
xxx xxx xxx
After consideration of the arguments set forth thereon by the parties, the court resolves to allow
Administrator Edmond M. Ruiz to take possession of the rental payments deposited with the Clerk of
Court, Pasig Regional Trial Court, but only such amount as may benecessary to cover the expenses of
administration and allowances for support of Maria Cathryn Veronique, Candice Albertine and Maria
Angeli, which are subject to collation and deductible from the share in the inheritance of said heirs and
insofar as they exceed the fruits or rents pertaining to them.
As to the release of the titles bequeathed to petitioner Maria Pilar Ruiz-Montes and the above-named
heirs, the same is hereby reconsidered and held in abeyance until the lapse of six (6) months from the
date of first publication of Notice to Creditors.
WHEREFORE, Administrator Edmond M. Ruiz is hereby ordered to submit an accounting of the expenses
necessary for administration including provisions for the support Of Maria Cathryn Veronique Ruiz,
Candice Albertine Ruiz and Maria Angeli Ruiz before the amount required can be withdrawn and cause
the publication of the notice to creditors with reasonable dispatch.9
Petitioner assailed this order before the Court of Appeals. Finding no grave abuse of discretion on the part
of respondent judge, the appellate court dismissed the petition and sustained the probate courts order in
a decision dated November 10, 199410 and a resolution datedJanuary 5, 1995.11
Hence, this petition.
Petitioner claims that:
THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN AFFIRMING AND CONFIRMING THE
ORDER OF RESPONDENT REGIONAL TRIAL COURT OF PASIG, BRANCH 156, DATED DECEMBER
22, 1993, WHICH WHEN GIVEN DUE COURSE AND IS EFFECTED WOULD: (1) DISALLOW THE
EXECUTOR/ADMINISTRATOR OF THE ESTATE OF THE LATE HILARIO M. RUIZ TO TAKE
POSSESSION OF ALL THE REAL AND PERSONAL PROPERTIES OF THE ESTATE; (2) GRANT
SUPPORT, DURING THE PENDENCY OF THE SETTLEMENT OF AN ESTATE, TO CERTAIN
PERSONS NOT ENTITLED THERETO; AND (3) PREMATURELY PARTITION AND DISTRIBUTE THE
ESTATE PURSUANT TO THE PROVISIONS OF THE HOLOGRAPHIC WILL EVEN BEFORE ITS
INTRINSIC VALIDITY HAS BEEN DETERMINED, AND DESPITE THE EXISTENCE OF UNPAID DEBTS
AND OBLIGATIONS OF THE ESTATE.12
The issue for resolution is whether the probate court, after admitting the will to probate but before
payment of the estates debts and obligations, has the authority: (1) to grant an allowance from the funds
of the estate for the support of the testators grandchildren; (2) to order the release of the titles to certain
heirs; and (3) to grant possession of all properties of the estate to the executor of the will.

On the matter of allowance, Section 3 of Rule 83 of the Revised Rules of Court provides:
Sec. 3. Allowance to widow and family. - The widow and minor or incapacitated children of a deceased
person, during the settlement of the estate, shall receive therefrom under the direction of the court, such
allowance as are provided by law.
Petitioner alleges that this provision only gives the widow and the minor or incapacitated children of
the deceased the right to receive allowances for support during the settlement of estate proceedings. He
contends that the testators three granddaughters do not qualify for an allowance because they are not
incapacitated and are no longer minors but of legal age, married and gainfully employed. In addition, the
provision expressly states children of the deceased which excludes the latters grandchildren.
It is settled that allowances for support under Section 3 of Rule 83 should not be limited to the minor
or incapacitated children of the deceased. Article 188 13 of the Civil Code of the Philippines, the
substantive law in force at the time of the testators death, provides that during the liquidation of the
conjugal partnership, the deceaseds legitimate spouse and children, regardless of their age, civil status or
gainful employment, are entitled to provisional support from the funds of the estate. 14 The law is rooted on
the fact that the right and duty to support, especially the right to education, subsist even beyond the age
of majority.15
Be that as it may, grandchildren are not entitled to provisional support from the funds of the
decedents estate. The law clearly limits the allowance to widow and children and does not extend it to the
deceaseds grandchildren, regardless of their minority or incapacity.16 It was error, therefore, for the
appellate court to sustain the probate courts order granting an allowance to the grandchildren of the
testator pending settlement of his estate.
Respondent courts also erred when they ordered the release of the titles of the bequeathed
properties to private respondents six months after the date of first publication of notice to creditors. An
order releasing titles to properties of the estate amounts to an advance distribution of the estate which is
allowed only under the following conditions:
Sec. 2. Advance distribution in special proceedings. - Nothwithstanding a pending controversy or appeal
in proceedings to settle the estate of a decedent, the court may, in its discretion and upon such terms as it
may deem proper and just, permit that such part of the estate as may not be affected by the controversy
or appeal be distributed among the heirs or legatees, upon compliance with the conditions set forth in
Rule 90 of these Rules.17
And Rule 90 provides that:
Sec. 1. When order for distribution of residue made. - When the debts, funeral charges, and expenses of
administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in
accordance with law, have been paid, the court, on the application of the executor or administrator, or of a
person interested in the estate, and after hearing upon notice, shall assign the residue of the estate to the
persons entitled to the same, naming them and the proportions, or parts, to which each is entitled, and
such persons may demand and recover their respective shares from the executor or administrator, or any
other person having the same in his possession. If there is a controversy before the court as to who are
the lawful heirs of the deceased person or as to the distributive shares to which each person is entitled
under the law, the controversy shall be heard and decided as in ordinary cases.

No distribution shall be allowed until the payment of the obligations above-mentioned has been made or
provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court,
conditioned for the payment of said obligations within such time as the court directs. 18
In settlement of estate proceedings, the distribution of the estate properties can only be made: (1) after all
the debts, funeral charges, expenses of administration, allowance to the widow, and estate tax have been
paid; or (2) before payment of said obligations only if the distributees or any of them gives a bond in a
sum fixed by the court conditioned upon the payment of said obligations within such time as the court
directs, or when provision is made to meet those obligations. 19
In the case at bar, the probate court ordered the release of the titles to the Valle Verde property and
the Blue Ridge apartments to the private respondents after the lapse of six months from the date of first
publication of the notice to creditors. The questioned order speaks of notice to creditors, not payment of
debts and obligations. Hilario Ruiz allegedly left no debts when he died but the taxes on his estate had
not hitherto been paid, much less ascertained. The estate tax is one of those obligations that must be
paid before distribution of the estate. If not yet paid, the rule requires that the distributees post a bond or
make such provisions as to meet the said tax obligation in proportion to their respective shares in the
inheritance.20Notably, at the time the order was issued the properties of the estate had not yet been
inventoried and appraised.
It was also too early in the day for the probate court to order the release of the titles six months after
admitting the will to probate. The probate of a will is conclusive as to its due execution and extrinsic
validity21 and settles only the question of whether the testator, being of sound mind, freely executed it in
accordance with the formalities prescribed by law.22 Questions as to the intrinsic validity and efficacy of
the provisions of the will, the legality of any devise or legacy may be raised even after the will has been
authenticated.23
The intrinsic validity of Hilarios holographic will was controverted by petitioner before the probate
court in his Reply to Montes Opposition to his motion for release of funds 24 and his motion for
reconsideration of the August 26, 1993 order of the said court.25 Therein, petitioner assailed the
distributive shares of the devisees and legatees inasmuch as his fathers will included the estate of his
mother and allegedly impaired his legitime as an intestate heir of his mother. The Rules provide that if
there is a controversy as to who are the lawful heirs of the decedent and their distributive shares in his
estate, the probate court shall proceed to hear and decide the same as in ordinary cases. 26
Still and all, petitioner cannot correctly claim that the assailed order deprived him of his right to take
possession of all the real and personal properties of the estate. The right of an executor or administrator
to the possession and management of the real and personal properties of the deceased is not absolute
and can only be exercised so long as it is necessary for the payment of the debts and expenses of
administration,27 Section 3 of Rule 84 of the Revised Rules of Court explicitly provides:
Sec. 3. Executor or administrator to retain whole estate to pay debts, and to administer estate not willed. An executor or administrator shall have the right to the possession and management of the real as well as
the personal estate of the deceased so long as it is necessary for the payment of the debts and expenses
for administration.28
When petitioner moved for further release of the funds deposited with the clerk of court, he had been
previously granted by the probate court certain amounts for repair and maintenance expenses on the

properties of the estate, and payment of the real estate taxes thereon. But petitioner moved again for the
release of additional funds for the same reasons he previously cited. It was correct for the probate court to
require him to submit an accounting of the necessary expenses for administration before releasing any
further money in his favor.
It was relevantly noted by the probate court that petitioner had deposited with it only a portion of the
one-year rental income from the Valle Verde property. Petitioner did not deposit its succeeding rents after
renewal of the lease.29 Neither did he render an accounting of such funds.
Petitioner must be reminded that his right of ownership over the properties of his father is merely
inchoate as long as the estate has not been fully settled and partitioned. 30 As executor, he is a mere
trustee of his fathers estate. The funds of the estate in his hands are trust funds and he is held to the
duties and responsibilities of a trustee of the highest order.31 He cannot unilaterally assign to himself and
possess all his parents properties and the fruits thereof without first submitting an inventory and appraisal
of all real and personal properties of the deceased, rendering a true account of his administration, the
expenses of administration, the amount of the obligations and estate tax, all of which are subject to a
determination by the court as to their veracity, propriety and justness. 32
IN VIEW WHEREOF, the decision and resolution of the Court of Appeals in CA-G.R. SP No. 33045
affirming the order dated December 22, 1993 of the Regional Trial Court, Branch 156, Pasig in SP Proc.
No. 10259 are affirmed with the modification that those portions of the order granting an allowance to the
testators grandchildren and ordering the release of the titles to the private respondents upon notice to
creditors are annulled and set aside.
Respondent judge is ordered to proceed with dispatch in the proceedings below.
SO ORDERED.
CASE DIGEST
THEESTATEOFHILARIOM.RUIZetal.,(Executor),petitioner,vs.CAJanuary29,1996G.R.No.118671(SpecPro 2016)
Posted onJUNE 24, 2016
Issue: Whether the probate court, after admitting the will to probate but before payment of the estates
debts and obligations, has the authority:
(1) to grant an allowance from the funds of the estate for the support of the testators grandchildren?
(2) to order the release of the titles to certain heirs?
(3) Petitioner claims that the assailed order deprived him of his right to take possession of all the real and
personal properties of the estate?
Held: 1. Grandchildren are not entitled to provisional support from the funds of the decedents estate.
The law clearly limits the allowance to widow and children and does not extend it to
the deceaseds grandchildren, regardless of their minority or incapacity. It was error, therefore, for the

appellate court to sustain the probate courts order granting an allowance to the grandchildren of the
testator pending settlement of his estate.
2.

Respondent courts also erred when they ordered the release of the titles of the bequeathed
properties to private respondents. In settlement of estate proceedings, the distribution of the estate
properties can only be made: (1) after all the debts and obligatiobns have been paid; or (2) only if the
distributees or any of them gives a bond in a sum fixed by the court conditioned upon the payment of said
obligations.
3.
SC: As executor, he cannot unilaterally assign to himself and possess all his parents properties
and the fruits thereof. The right of an executor or administrator to the possession and management of the
real and personal properties of the deceased is not absolute and can only be exercised so long as it is
necessary for the payment of the debts and expenses of administration.
G.R. No. 118671
January 29, 1996THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ,
Executor, petitioner, vs.THE COURT OF APPEALSFacts: On June 27, 1987, Hilario M. Ruiz1 executed a
holographic will naming as his heirs his only son, Edmond Ruiz, his adopted daughter, private respondent
Maria Pilar Ruiz Montes, and his three granddaughters, private respondents Maria Cathryn, Candice
Albertine and Maria Angeline, all children of Edmond Ruiz. On April 12, 1988, Hilario Ruiz died. For
unbeknown reasons, Edmond, the named executor, did not take any action for the probate of his father's
holographic will.On June 29, 1992, four years after the testator's death, it was private respondent Maria
Pilar Ruiz Montes who filed a petition for the probate and approval of Hilario Ruiz's will and for the
issuance of letters testamentary to Edmond Ruiz,3 Surprisingly, Edmond opposed the petition onthe
ground that the will was executed under undue influence.On November 2, 1992, one of the properties of
the estate the house and lot at No. 2 Oliva Street, Valle Verde IV, Pasig which the testator bequeathed
to Maria Cathryn, Candice Albertine and Maria Angeline4 was leased out by Edmond Ruiz to third
persons.On May 14, 1993, Edmond withdrew his opposition to the probate of the will. Consequently, the
probate court, on May 18, 1993, admitted the will to probate and ordered the issuance of letters
testamentary to Edmond conditioned upon the filing of a bond in the amount of P50,000.00. The letters
testamentary were issued on June 23, 1993.On August 26, 1993, the probate court denied petitioner's
motion for release of funds but granted respondent Montes' motion in view of petitioner's lack of
opposition. It thus ordered the release of the rent payments to the decedent's three granddaughters. It
further ordered the delivery of the titles to and possession of the properties bequeathed to the three
granddaughters and respondent Montes upon the filing of a bond of P50,000.00.the probate court, on
December 22, 1993, ordered the release of the funds to Edmond butonly "such amount as may be
necessary to cover the expenses of administration and allowances for support" of the testator's three
granddaughters subject to collation and deductible from their share in the inheritance. The court, however,
held in abeyance the release of the titles to respondent Montes and the three granddaughters until the
lapse ofsix months from the date of first publication of the notice to creditors.8Petitioner assailed this
order before the Court of Appeals. Finding no grave abuse of discretion on the part of respondent judge,
the appellate court dismissed the petition and sustained the probate court's order in. Hence, this
petition.ISSUE: The issue for resolution is whether the probate court, after admitting the will to probate but
before payment of the estate's debts and obligations, has the authority: (1) to grant an allowance from the
funds of the estate for the support of the testator's grandchildren; (2) to order the release of the titles to
certain heirs; and (3) to grant possession of all properties of the estate to the executor of the will.On the
matter of allowance, Section 3 of Rule 83 of the Revised Rules of Court provides:Sec. 3. Allowance to
widow and family. The widow and minor or incapacitated children of a deceased person, during the
settlement of the estate, shall receive therefrom under the direction of the court, such allowance as are
provided by law.Be that as it may, grandchildren are not entitled to provisional support from the funds of
the decedent's estate. The law clearly limits the allowance to "widow and children" and does not extend it

to the deceased's grandchildren, regardless of their minority or incapacity.16 It was error, therefore, for
the appellate court to sustain the probate court's order granting an allowance to the grandchildren of the
testator pending settlement of his estate.Respondent courts also erred when they ordered the release of
the titles of the bequeathed properties to private respondents six months after the date of first publication
of notice to creditors. An order releasing titles to properties of the estate amounts to an advance
distribution of the estate which is allowed only under the following conditions:Sec. 2. Advance distribution
in special proceedings. xxx the court may, in its discretion and upon such terms as it may deem proper
and just, permit that such part of the estate as may not be affected by the controversy or appeal be
distributed among the heirs or legatees, upon compliance with the conditions set forth in Rule 90 of these
Rules.17In settlement of estate proceedings, the distribution of the estate properties can only be made:
(1) after all the debts, funeral charges, expenses of administration, allowance to the widow, and estate tax
have been paid; or (2) before payment of said obligations only if the distributees or any of them gives a
bond in a sum fixed by the court conditioned upon the payment of said obligations within such time as the
court directs, or when provision is made to meet those obligations.19In the case at bar. Hilario Ruiz
allegedly left no debts when he died but the taxes on his estate had not hitherto been paid, much less
ascertained. The estate tax is one of those obligations that must be paid before distribution of the estate.
If not yet paid, the rule requires that the distributees post a bond or make such provisions as to meet the
said tax obligation in proportion to their respective shares in the inheritance.Still and all, petitioner cannot
correctly claim that the assailed order deprived him of his right to take possession of all the real and
personal properties of the estate. The right of an executor or administrator to the possession and
management of the real and personalproperties of the deceased is not absolute and can only be
exercised "so long as it is necessary for the payment of the debts and expenses of administration,"27
Section 3 of Rule 84 of the Revised Rules of Court.Petitioner must be reminded that his right of ownership
over the properties of his father is merely inchoate as long as the estate has not been fully settled and
partitioned.30 As executor, he is a mere trustee of his father's estate. The funds of the estate in his hands
are trust funds and he is held to the duties and responsibilities of a trustee of the highest order.31 He
cannot unilaterally assign to himself and possess all his parents' properties and the fruits thereof without
first submitting an inventory and appraisal of all real and personal properties of the deceased, rendering a
true account of his administration, the expenses of administration, the amount of the obligations and
estate tax, all of which are subjectto a determination by the court as to their veracity, propriety and
justness.

[G.R. No. 149926. February 23, 2005]

UNION BANK OF THE PHILIPPINES, petitioner, vs. EDMUND SANTIBAEZ and FLORENCE
SANTIBAEZ ARIOLA, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court which
seeks the reversal of the Decision[1] of the Court of Appeals dated May 30, 2001 in CA-G.R. CV No.
48831 affirming the dismissal[2] of the petitioners complaint in Civil Case No. 18909 by the Regional Trial
Court (RTC) of Makati City, Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M. Santibaez entered
into a loan agreement[3] in the amount of P128,000.00. The amount was intended for the payment of the
purchase price of one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim
and his son, Edmund, executed a promissory note in favor of the FCCC, the principal sum payable in five
equal annual amortizations of P43,745.96 due on May 31, 1981 and every May 31 st thereafter up to May
31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan agreement, [4] this time in the
amount of P123,156.00. It was intended to pay the balance of the purchase price of another unit of Ford
6600 Agricultural All-Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor Model
AR 60K. Again, Efraim and his son, Edmund, executed a promissory note for the said amount in favor of
the FCCC. Aside from such promissory note, they also signed a Continuing Guaranty Agreement [5] for the
loan dated December 13, 1980.

Sometime in February 1981, Efraim died, leaving a holographic will. [6] Subsequently in March 1981,
testate proceedings commenced before the RTC of Iloilo City, Branch 7, docketed as Special
Proceedings No. 2706. On April 9, 1981, Edmund, as one of the heirs, was appointed as the special
administrator of the estate of the decedent. [7] During the pendency of the testate proceedings, the
surviving heirs, Edmund and his sister Florence Santibaez Ariola, executed a Joint Agreement [8] dated
July 22, 1981, wherein they agreed to divide between themselves and take possession of the three (3)
tractors; that is, two (2) tractors for Edmund and one (1) tractor for Florence. Each of them was to assume
the indebtedness of their late father to FCCC, corresponding to the tractor respectively taken by them.
On August 20, 1981, a Deed of Assignment with Assumption of Liabilities [9] was executed by and
between FCCC and Union Savings and Mortgage Bank, wherein the FCCC as the assignor, among
others, assigned all its assets and liabilities to Union Savings and Mortgage Bank.
Demand letters[10] for the settlement of his account were sent by petitioner Union Bank of the
Philippines (UBP) to Edmund, but the latter failed to heed the same and refused to pay. Thus, on
February 5, 1988, the petitioner filed a Complaint [11] for sum of money against the heirs of Efraim
Santibaez, Edmund and Florence, before the RTC of Makati City, Branch 150, docketed as Civil Case No.
18909. Summonses were issued against both, but the one intended for Edmund was not served since he
was in the United States and there was no information on his address or the date of his return to the
Philippines.[12] Accordingly, the complaint was narrowed down to respondent Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola filed her Answer [13] and alleged that the loan
documents did not bind her since she was not a party thereto. Considering that the joint agreement
signed by her and her brother Edmund was not approved by the probate court, it was null and void;
hence, she was not liable to the petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati City, Branch 63.
Consequently, trial on the merits ensued and a decision was subsequently rendered by the court
dismissing the complaint for lack of merit. The decretal portion of the RTC decision reads:
[14]

WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack of merit. [15]
The trial court found that the claim of the petitioner should have been filed with the probate court
before which the testate estate of the late Efraim Santibaez was pending, as the sum of money being
claimed was an obligation incurred by the said decedent. The trial court also found that the Joint
Agreement apparently executed by his heirs, Edmund and Florence, on July 22, 1981, was, in effect, a
partition of the estate of the decedent. However, the said agreement was void, considering that it had not
been approved by the probate court, and that there can be no valid partition until after the will has been
probated. The trial court further declared that petitioner failed to prove that it was the now defunct Union
Savings and Mortgage Bank to which the FCCC had assigned its assets and liabilities. The court also
agreed to the contention of respondent Florence S. Ariola that the list of assets and liabilities of the FCCC
assigned to Union Savings and Mortgage Bank did not clearly refer to the decedents account. Ruling that
the joint agreement executed by the heirs was null and void, the trial court held that the petitioners cause
of action against respondent Florence S. Ariola must necessarily fail.
The petitioner appealed from the RTC decision and elevated its case to the Court of Appeals (CA),
assigning the following as errors of the trial court:

1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT AGREEMENT (EXHIBIT A)
SHOULD BE APPROVED BY THE PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION
AMONG THE HEIRS UNTIL AFTER THE WILL HAS BEEN PROBATED.
3. THE COURT A QUO ERRED IN NOT FINDING THAT THE DEFENDANT HAD WAIVED
HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING. [16]
The petitioner asserted before the CA that the obligation of the deceased had passed to his
legitimate children and heirs, in this case, Edmund and Florence; the unconditional signing of the joint
agreement marked as Exhibit A estopped respondent Florence S. Ariola, and that she cannot deny her
liability under the said document; as the agreement had been signed by both heirs in their personal
capacity, it was no longer necessary to present the same before the probate court for approval; the
property partitioned in the agreement was not one of those enumerated in the holographic will made by
the deceased; and the active participation of the heirs, particularly respondent Florence S. Ariola, in the
present ordinary civil action was tantamount to a waiver to re-litigate the claim in the estate proceedings.
On the other hand, respondent Florence S. Ariola maintained that the money claim of the petitioner
should have been presented before the probate court. [17]
The appellate court found that the appeal was not meritorious and held that the petitioner should
have filed its claim with the probate court as provided under Sections 1 and 5, Rule 86 of the Rules of
Court. It further held that the partition made in the agreement was null and void, since no valid partition
may be had until after the will has been probated. According to the CA, page 2, paragraph (e) of the
holographic will covered the subject properties (tractors) in generic terms when the deceased referred to
them as all other properties. Moreover, the active participation of respondent Florence S. Ariola in the
case did not amount to a waiver. Thus, the CA affirmed the RTC decision, viz.:
WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of Makati City,
Branch 63, is hereby AFFIRMED in toto.
SO ORDERED.[18]
In the present recourse, the petitioner ascribes the following errors to the CA:
I.
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT AGREEMENT
SHOULD BE APPROVED BY THE PROBATE COURT.
II.
THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION AMONG
THE HEIRS OF THE LATE EFRAIM SANTIBAEZ UNTIL AFTER THE WILL HAS BEEN PROBATED.
III.

THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT HAD WAIVED HER
RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.
IV.
RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE WITH THE PRINCIPAL
DEBTOR THE LATE EFRAIM SANTIBAEZ ON THE STRENGTH OF THE CONTINUING GUARANTY
AGREEMENT EXECUTED IN FAVOR OF PETITIONER-APPELLANT UNION BANK.
V.
THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF P128,000.00 AND DECEMBER 13,
1980 IN THE AMOUNT OF P123,000.00 CATEGORICALLY ESTABLISHED THE FACT THAT THE
RESPONDENTS BOUND THEMSELVES JOINTLY AND SEVERALLY LIABLE WITH THE LATE
DEBTOR EFRAIM SANTIBAEZ IN FAVOR OF PETITIONER UNION BANK. [19]
The petitioner claims that the obligations of the deceased were transmitted to the heirs as provided
in Article 774 of the Civil Code; there was thus no need for the probate court to approve the joint
agreement where the heirs partitioned the tractors owned by the deceased and assumed the obligations
related thereto. Since respondent Florence S. Ariola signed the joint agreement without any condition, she
is now estopped from asserting any position contrary thereto. The petitioner also points out that the
holographic will of the deceased did not include nor mention any of the tractors subject of the complaint,
and, as such was beyond the ambit of the said will. The active participation and resistance of respondent
Florence S. Ariola in the ordinary civil action against the petitioners claim amounts to a waiver of the right
to have the claim presented in the probate proceedings, and to allow any one of the heirs who executed
the joint agreement to escape liability to pay the value of the tractors under consideration would be
equivalent to allowing the said heirs to enrich themselves to the damage and prejudice of the petitioner.
The petitioner, likewise, avers that the decisions of both the trial and appellate courts failed to
consider the fact that respondent Florence S. Ariola and her brother Edmund executed loan documents,
all establishing the vinculum juris or the legal bond between the late Efraim Santibaez and his heirs to be
in the nature of a solidary obligation. Furthermore, the Promissory Notes dated May 31, 1980 and
December 13, 1980 executed by the late Efraim Santibaez, together with his heirs, Edmund and
respondent Florence, made the obligation solidary as far as the said heirs are concerned. The petitioner
also proffers that, considering the express provisions of the continuing guaranty agreement and the
promissory notes executed by the named respondents, the latter must be held liable jointly and severally
liable thereon. Thus, there was no need for the petitioner to file its money claim before the probate court.
Finally, the petitioner stresses that both surviving heirs are being sued in their respective personal
capacities, not as heirs of the deceased.
In her comment to the petition, respondent Florence S. Ariola maintains that the petitioner is trying to
recover a sum of money from the deceased Efraim Santibaez; thus the claim should have been filed with
the probate court. She points out that at the time of the execution of the joint agreement there was
already an existing probate proceedings of which the petitioner knew about. However, to avoid a claim in
the probate court which might delay payment of the obligation, the petitioner opted to require them to
execute the said agreement.

According to the respondent, the trial court and the CA did not err in declaring that the agreement
was null and void. She asserts that even if the agreement was voluntarily executed by her and her brother
Edmund, it should still have been subjected to the approval of the court as it may prejudice the estate, the
heirs or third parties. Furthermore, she had not waived any rights, as she even stated in her answer in the
court a quo that the claim should be filed with the probate court. Thus, the petitioner could not invoke or
claim that she is in estoppel.
Respondent Florence S. Ariola further asserts that she had not signed any continuing guaranty
agreement, nor was there any document presented as evidence to show that she had caused herself to
be bound by the obligation of her late father.
The petition is bereft of merit.
The Court is posed to resolve the following issues: a) whether or not the partition in the Agreement
executed by the heirs is valid; b) whether or not the heirs assumption of the indebtedness of the
deceased is valid; and c) whether the petitioner can hold the heirs liable on the obligation of the
deceased.
At the outset, well-settled is the rule that a probate court has the jurisdiction to determine all the
properties of the deceased, to determine whether they should or should not be included in the inventory
or list of properties to be administered. [20]The said court is primarily concerned with the administration,
liquidation and distribution of the estate.[21]
In our jurisdiction, the rule is that there can be no valid partition among the heirs until after the will
has been probated:
In testate succession, there can be no valid partition among the heirs until after the will has been
probated. The law enjoins the probate of a will and the public requires it, because unless a will is probated
and notice thereof given to the whole world, the right of a person to dispose of his property by will may be
rendered nugatory. The authentication of a will decides no other question than such as touch upon the
capacity of the testator and the compliance with those requirements or solemnities which the law
prescribes for the validity of a will.[22]
This, of course, presupposes that the properties to be partitioned are the same properties embraced
in the will.[23] In the present case, the deceased, Efraim Santibaez, left a holographic will [24] which
contained, inter alia, the provision which reads as follows:
(e) All other properties, real or personal, which I own and may be discovered later after my demise, shall
be distributed in the proportion indicated in the immediately preceding paragraph in favor of Edmund and
Florence, my children.
We agree with the appellate court that the above-quoted is an all-encompassing provision embracing
all the properties left by the decedent which might have escaped his mind at that time he was making his
will, and other properties he may acquire thereafter. Included therein are the three (3) subject tractors.
This being so, any partition involving the said tractors among the heirs is not valid. The joint
agreement[25] executed by Edmund and Florence, partitioning the tractors among themselves, is invalid,
specially so since at the time of its execution, there was already a pending proceeding for the probate of
their late fathers holographic will covering the said tractors.

It must be stressed that the probate proceeding had already acquired jurisdiction over all the
properties of the deceased, including the three (3) tractors. To dispose of them in any way without the
probate courts approval is tantamount to divesting it with jurisdiction which the Court cannot allow.
[26]
Every act intended to put an end to indivision among co-heirs and legatees or devisees is deemed to
be a partition, although it should purport to be a sale, an exchange, a compromise, or any other
transaction.[27] Thus, in executing any joint agreement which appears to be in the nature of an extrajudicial partition, as in the case at bar, court approval is imperative, and the heirs cannot just divest the
court of its jurisdiction over that part of the estate. Moreover, it is within the jurisdiction of the probate court
to determine the identity of the heirs of the decedent. [28] In the instant case, there is no showing that the
signatories in the joint agreement were the only heirs of the decedent. When it was executed, the probate
of the will was still pending before the court and the latter had yet to determine who the heirs of the
decedent were. Thus, for Edmund and respondent Florence S. Ariola to adjudicate unto themselves the
three (3) tractors was a premature act, and prejudicial to the other possible heirs and creditors who may
have a valid claim against the estate of the deceased.
The question that now comes to fore is whether the heirs assumption of the indebtedness of the
decedent is binding. We rule in the negative. Perusing the joint agreement, it provides that the heirs as
parties thereto have agreed to divide between themselves and take possession and use the abovedescribed chattel and each of them to assume the indebtedness corresponding to the chattel taken as
herein after stated which is in favor of First Countryside Credit Corp. [29] The assumption of liability was
conditioned upon the happening of an event, that is, that each heir shall take possession and use of their
respective share under the agreement. It was made dependent on the validity of the partition, and that
they were to assume the indebtedness corresponding to the chattel that they were each to receive. The
partition being invalid as earlier discussed, the heirs in effect did not receive any such tractor. It follows
then that the assumption of liability cannot be given any force and effect.
The Court notes that the loan was contracted by the decedent. The petitioner, purportedly a creditor
of the late Efraim Santibaez, should have thus filed its money claim with the probate court in accordance
with Section 5, Rule 86 of the Revised Rules of Court, which provides:
Section 5. Claims which must be filed under the notice. If not filed barred; exceptions. All claims for
money against the decedent, arising from contract, express or implied, whether the same be due, not
due, or contingent, all claims for funeral expenses for the last sickness of the decedent, and judgment for
money against the decedent, must be filed within the time limited in the notice; otherwise they are barred
forever, except that they may be set forth as counterclaims in any action that the executor or administrator
may bring against the claimants. Where an executor or administrator commences an action, or
prosecutes an action already commenced by the deceased in his lifetime, the debtor may set forth by
answer the claims he has against the decedent, instead of presenting them independently to the court as
herein provided, and mutual claims may be set off against each other in such action; and if final judgment
is rendered in favor of the defendant, the amount so determined shall be considered the true balance
against the estate, as though the claim had been presented directly before the court in the administration
proceedings. Claims not yet due, or contingent, may be approved at their present value.
The filing of a money claim against the decedents estate in the probate court is mandatory. [30] As we
held in the vintage case of Py Eng Chong v. Herrera:[31]
This requirement is for the purpose of protecting the estate of the deceased by informing the executor or
administrator of the claims against it, thus enabling him to examine each claim and to determine whether

it is a proper one which should be allowed. The plain and obvious design of the rule is the speedy
settlement of the affairs of the deceased and the early delivery of the property to the distributees,
legatees, or heirs. `The law strictly requires the prompt presentation and disposition of the claims against
the decedent's estate in order to settle the affairs of the estate as soon as possible, pay off its debts and
distribute the residue.[32]
Perusing the records of the case, nothing therein could hold private respondent Florence S. Ariola
accountable for any liability incurred by her late father. The documentary evidence presented, particularly
the promissory notes and the continuing guaranty agreement, were executed and signed only by the late
Efraim Santibaez and his son Edmund. As the petitioner failed to file its money claim with the probate
court, at most, it may only go after Edmund as co-maker of the decedent under the said promissory notes
and continuing guaranty, of course, subject to any defenses Edmund may have as against the petitioner.
As the court had not acquired jurisdiction over the person of Edmund, we find it unnecessary to delve into
the matter further.
We agree with the finding of the trial court that the petitioner had not sufficiently shown that it is the
successor-in-interest of the Union Savings and Mortgage Bank to which the FCCC assigned its assets
and liabilities.[33] The petitioner in its complaint alleged that by virtue of the Deed of Assignment dated
August 20, 1981 executed by and between First Countryside Credit Corporation and Union Bank of the
Philippines[34] However, the documentary evidence[35] clearly reflects that the parties in the deed of
assignment with assumption of liabilities were the FCCC, and the Union Savings and Mortgage Bank,
with the conformity of Bancom Philippine Holdings, Inc. Nowhere can the petitioners participation therein
as a party be found. Furthermore, no documentary or testimonial evidence was presented during trial to
show that Union Savings and Mortgage Bank is now, in fact, petitioner Union Bank of the Philippines. As
the trial court declared in its decision:
[T]he court also finds merit to the contention of defendant that plaintiff failed to prove or did not present
evidence to prove that Union Savings and Mortgage Bank is now the Union Bank of the Philippines.
Judicial notice does not apply here. The power to take judicial notice is to [be] exercised by the courts
with caution; care must be taken that the requisite notoriety exists; and every reasonable doubt upon the
subject should be promptly resolved in the negative. (Republic vs. Court of Appeals, 107 SCRA 504). [36]
This being the case, the petitioners personality to file the complaint is wanting. Consequently, it failed
to establish its cause of action. Thus, the trial court did not err in dismissing the complaint, and the CA in
affirming the same.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The assailed Court of Appeals
Decision is AFFIRMED. No costs.
SO ORDERED.

CASE DIGEST
[G.R. No. 149926. February 23, 2005]UNION BANK OF THE PHILIPPINES, petitioner, vs.
EDMUND SANTIBAEZ andFLORENCE SANTIBAEZ ARIOLA, respondents.FACTS: On May 31,
1980, the First Countryside Credit Corporation (FCCC) and Efraim M.Santibaez entered into a
loan agreement[3] in the amount of P128,000.00. The amount wasintended for the payment of the
purchase price of one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof,
Efraim and his son, Edmund, executed apromissory note in favor of the FCCC, the
principal sum payable in five equal annualamortizations of P43,745.96 due on May 31, 1981 and
every May 31st thereafter up to May31, 1985.On December 13, 1980, the FCCC and Efraim entered into
another loan agreement,[4] thistime in the amount of P123,156.00. It was intended to pay the balance of
the purchase priceof another unit of Ford 6600 Agricultural All-Purpose Diesel Tractor, with accessories,
andone (1) unit Howard Rotamotor Model AR 60K. Again, Efraim and his son,
Edmund,executed a promissory note for the said amount in favor of the FCCC. Aside from
suchpromissory note, they also signed a Continuing Guaranty Agreement[5] for the loan
datedDecember 13, 1980.Sometime in February 1981, Efraim died, leaving a holographic will.[6]
Subsequently inMarch 1981, testate proceedings commenced before the RTC of Iloilo City. On April 9,
1981,Edmund, as one of the heirs, was appointed as the special administrator of the estate of
thedecedent.[7] During the pendency of the testate proceedings, the surviving heirs, Edmundand his
sister Florence Santibaez Ariola, executed a Joint Agreement [8] dated July22, 1981, wherein they
agreed to divide between themselves and take possession ofthe three (3) tractors; that is, two (2) tractors
for Edmund and one (1) tractor for Florence.Each of them was to assume the indebtedness of
their late father to FCCC,corresponding to the tractor respectively taken by them.On August 20,
1981, a Deed of Assignment with Assumption of Liabilities[9] was executedby and between FCCC and
Union Savings and Mortgage Bank, wherein the FCCC as theassignor, among others, assigned all its
assets and liabilities to Union Savings and MortgageBank.Demand letters[10] for the settlement of his
account were sent by petitioner Union Bank ofthe Philippines (UBP) to Edmund, but the latter failed to
heed the same and refused to pay.Thus, on February 5, 1988, the petitioner filed a Complaint[11] for sum
of money against theheirs of Efraim Santibaez, Edmund and Florence. Summonses were issued against
both, butthe one intended for Edmund was not served since he was in the United States and there wasno
information on his address or the date of his return to the Philippines.[12] Accordingly, thecomplaint was
narrowed down to respondent Florence S. Ariola.On December 7, 1988, respondent Florence S. Ariola
filed her Answer[13] and alleged thatthe loan documents did not bind her since she was not a party
thereto. Considering that thejoint agreement signed by her and her brother Edmund was not approved by
the probatecourt, it was null and void; hence, she was not liable to the petitioner under
the jointagreement. Consequently, trial on the merits ensued and a decision was subsequently rendered
bythe court dismissing the complaint for lack of merit. The decretal portion of the RTC decisionreads:The
appellate court found that the appeal was not meritorious and held thatthe petitioner should have filed its
claim with the probate court. It further heldthat the partition made in the agreement was null
and void, since no validpartition may be had until after the will has been probated. ISSUE: Whether
or not the joint agreement was valid.HELD: No, the joint agreement is invalid.The Court is posed to
resolve the following issues: a) whether or not the partition in theAgreement executed by the heirs is valid;
b) whether or not the heirs assumption of theindebtedness of the deceased is valid; and c) whether the
petitioner can hold the heirs liableon the obligation of the deceased.In testate succession, there can be no
valid partition among the heirs until after the will has been probated. The law enjoins the probate of a will
and the public requires it, because unless a will is probated and notice thereof given to the wholeworld,
the right of a person to dispose of his property by will may be rendered nugatory. The authentication of a

will decides no other question than such as touch upon the capacity of the testator and the compliance
with those requirements or solemnities whichthe law prescribes for the validity of a will.[22]This, of course,
presupposes that the properties to be partitioned are the same propertiesembraced in the will.[23] In
the present case, the deceased, Efraim Santibaez, left aholographic will[24] which contained,
inter alia, the provision which reads as follows
e) All other properties, real or personal, which I own and may be discovered later after my demise, shall
be distributed in the proportion indicated in the immediately preceding paragraph in favor of Edmund and
Florence, my children.The question that now comes to fore is whether the heirs assumption
of theindebtedness of the decedent is binding. We rule in the negative. The partition being invalidas
earlier discussed, the heirs in effect did not receive any such tractor. It follows then thatthe assumption of
liability cannot be given any force and effect.

G.R. No. 171206

September 23, 2013

HEIRS OF THE LATE SPOUSES FLA VIANO MAGLASANG and SALUD ADAZA-MAGLASANG, namely,
OSCAR A. MAGLASANG, EDGAR A. MAGLASANG, CONCEPCION CHONA A. MAGLASANG,
GLENDA A. MAGLASANG-ARNAIZ, LERMA A. MAGLASANG, FELMA A. MAGLASANG, FE DORIS A.
MAGLASANG, LEOLINO A. MAGLASANG, MARGIE LEILA A. MAGLASANG,MA. MILALIE A.
MAGLASANG, SALUD A. MAGLASANG, and MA. FLASALIE A. MAGLASANG, REPRESENTING THE
ESTATES OF THEIR AFORE-NAMEDDECEASED PARENTS, Petitioners,
vs.
MANILA BANKING CORPORATION, now substituted by FIRST SOVEREIGN ASSET MANAGEMENT
SPV-AMC, INC. FSAMI, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari 1 are the Decision2 dated July 20, 2005 and
Resolution3 dated January 4, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 50410 which
dismissed petitioners appeal and affirmed the Decision4 dated April 6, 1987 of the Regional Trial Court of
Ormoc City, Branch 12 (RTC) directing petitioners to jointly and severally pay respondent Manila Banking
Corporation the amount of P434,742.36, with applicable interests, representing the deficiency of the
formers total loan obligation to the latter after the extra-judicial foreclosure of the real estate mortgage
subject of this case, including attorneys fees and costs of suit.
The Facts
On June 16, 1975, spouses Flaviano and Salud Maglasang (Sps.Maglasang) obtained a credit line from
respondent5 in the amount of P350,000.00 which was secured by a real estate mortgage 6 executed over
seven of their properties7 located in Ormoc City and the Municipality of Kananga, Province of Leyte. 8 They
availed of their credit line by securing loans in the amounts of P209,790.50 and P139,805.83 on October
24, 1975and March 15, 1976, respectively,9 both of which becoming due and demandable within a period
of one year. Further, the parties agreed that the said loans would earn interest at 12% per annum (p.a.)
and an additional 4% penalty would be charged upon default. 10
After Flaviano Maglasang (Flaviano) died intestate on February 14,1977, his widow Salud Maglasang
(Salud) and their surviving children, herein petitioners Oscar (Oscar), Concepcion Chona, Lerma, Felma,
FeDoris, Leolino, Margie Leila, Ma. Milalie, Salud and Ma. Flasalie, all surnamed Maglasang, and Glenda
Maglasang-Arnaiz, appointed11 their brother petitioner Edgar Maglasang (Edgar) as their attorney-infact.12 Thus, on March 30, 1977, Edgar filed a verified petition for letters of administration of the intestate
estate of Flaviano before the then Court of First Instance of Leyte, Ormoc City, Branch 5 (probate court),
docketed as Sp. Proc. No. 1604-0.13 On August 9, 1977, the probate court issued an Order14 granting the
petition, thereby appointing Edgar as the administrator15 of Flavianos estate.
In view of the issuance of letters of administration, the probate court, on August 30, 1977, issued a Notice
to Creditors16 for the filing of money claims against Flavianos estate. Accordingly, as one of the creditors
of Flaviano, respondent notified17 the probate court of its claim in the amount of P382,753.19 as of
October 11, 1978, exclusive of interests and charges.

During the pendency of the intestate proceedings, Edgar and Oscar were able to obtain several loans
from respondent, secured by promissory notes18 which they signed.
In an Order19 dated December 14, 1978 (December 14, 1978 Order),the probate court terminated the
proceedings with the surviving heirs executing an extra-judicial partition of the properties of Flavianos
estate. The loan obligations owed by the estate to respondent, however, remained unsatisfied due to
respondents certification that Flavianos account was undergoing a restructuring. Nonetheless, the
probate court expressly recognized the rights of respondent under the mortgage and promissory notes
executed by the Sps. Maglasang, specifically, its "right to foreclose the same within the statutory period." 20
In this light, respondent proceeded to extra-judicially foreclose the mortgage covering the Sps.
Maglasangs properties and emerged as the highest bidder at the public auction for the amount
of P350,000.00.21 There, however, remained a deficiency on Sps. Maglasangs 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.
1998-0.22
The RTC Ruling and Subsequent Proceedings
After trial on the merits, the RTC (formerly, the probate court) 23 rendered a Decision24 on April 6, 1987
directing the petitioners to pay respondent, jointly and severally, the amount of P434,742.36 with interest
at the rate of 12% p.a., plus a 4% penalty charge, reckoned from September 5,1984 until fully paid. 25 The
RTC found that it was shown, by a preponderance of evidence, that petitioners, after the extra-judicial
foreclosure of all the properties mortgaged, still have an outstanding obligation in the amount and as of
the date as above-stated. The RTC also found in order the payment of interests and penalty charges as
above-mentioned as well as attorneys fees equivalent to 10% of the outstanding obligation. 26
Dissatisfied, petitioners elevated the case to the CA on appeal, contending, 27 inter alia, that the remedies
available to respondent under Section 7, Rule 86 of the Rules of Court (Rules) are alternative and
exclusive, such that the election of one operates as a waiver or abandonment of the others. Thus, when
respondent filed its claim against the estate of Flaviano in the proceedings before the probate court, it
effectively abandoned its right to foreclose on the mortgage. Moreover, even on the assumption that it has
not so waived its right to foreclose, it is nonetheless barred from filing any claim for any deficiency
amount.
During the pendency of the appeal, Flavianos widow, Salud, passed away on July 25, 1997. 28
The CA Ruling
In a Decision29 dated July 20, 2005, the CA denied the petitioners appeal and affirmed the RTCs
Decision. At the outset, it pointed out that the probate court erred when it, through the December 14, 1978
Order, closed and terminated the proceedings in Sp. Proc. No. 1604-0 without first satisfying the claims of
the creditors of the estate in particular, respondent in violation of Section 1, Rule 90 of the Rules. 30 As
a consequence, respondent was not able to collect from the petitioners and thereby was left with the
option of foreclosing the real estate mortgage.31 Further, the CA held that Section 7, Rule 86 of the Rules
does not apply to the present case since the same does not involve a mortgage made by the
administrator over any property belonging to the estate of the decedent. 32 According to the CA, what

should apply is Act No. 313533 which entitles respondent to claim the deficiency amount after the extrajudicial foreclosure of the real estate mortgage of Sps. Maglasangs properties. 34
Petitioners motion for reconsideration was subsequently denied in a Resolution 35 dated January 4, 2006.
Hence, the present recourse.
The Issue Before the Court
The essential issue in this case is whether or not the CA erred in affirming the RTCs award of the
deficiency amount in favor of respondent.
Petitioners assert36 that it is not Act No. 3135 but Section 7, Rule 86of the Rules which applies in this
case. The latter provision provides alternative and exclusive remedies for the satisfaction of respondents
claim against the estate of Flaviano.37 Corollarily, having filed its claim against the estate during the
intestate proceedings, petitioners argue that respondent had effectively waived the remedy of foreclosure
and, even assuming that it still had the right to do so, it was precluded from filing a suit for the recovery of
the deficiency obligation.38
Likewise, petitioners maintain that the extra-judicial foreclosure of the subject properties was null and
void, not having been conducted in the capital of the Province of Leyte in violation of the stipulations in
the real estate mortgage contract.39 They likewise deny any personal liability for the loans taken by their
deceased parents.40
The Courts Ruling
The petition is partly meritorious.
Claims against deceased persons should be filed during the settlement proceedings of their
estate.41 Such proceedings are primarily governed by special rules found under Rules 73 to 90 of the
Rules, although rules governing ordinary actions may, as far as practicable, apply suppletorily.42 Among
these special rules, Section 7, Rule 86 of the Rules (Section 7, Rule86) provides the rule in dealing with
secured claims against the estate:
SEC. 7. Mortgage debt due from estate. A creditor holding a claim against the deceased secured by a
mortgage or other collateral security, may abandon the security and prosecute his claim in the manner
provided in this rule, and share in the general distribution of the assets of the estate; or he may foreclose
his mortgage or realize upon his security, by action in court, making the executor or administrator a party
defendant, and if there is a judgment for a deficiency, after the sale of the mortgaged premises, or the
property pledged, in the foreclosure or other proceeding to realize upon the security, he may claim his
deficiency judgment in the manner provided in the preceding section; or he may rely upon his mortgage or
other security alone, and foreclose the same at any time within the period of the statute of limitations, and
in that event he shall not be admitted as a creditor, and shall receive no share in the distribution of the
other assets of the estate; but nothing herein contained shall prohibit the executor or administrator from
redeeming the property mortgaged or pledged, by paying the debt for which it is held as security, under
the direction of the court, if the court shall adjudged it to be for the best interest of the estate that such
redemption shall be made. (Emphasis and underscoring supplied)

As the foregoing generally speaks of "a creditor holding a claim against the deceased secured by a
mortgage or other collateral security" as above-highlighted, it may be reasonably concluded that the
aforementioned section covers all secured claims, whether by mortgage or any other form of collateral,
which a creditor may enforce against the estate of the deceased debtor. On the contrary, nowhere from its
language can it be fairly deducible that the said section would as the CA interpreted narrowly apply
only to mortgages made by the administrator over any property belonging to the estate of the decedent.
To note, mortgages of estate property executed by the administrator, are also governed by Rule 89 of the
Rules, captioned as "Sales, Mortgages, and Other Encumbrances of Property of Decedent."
In this accord, it bears to stress that the CAs reliance on Philippine National Bank v. CA 43 (PNB) was
misplaced as the said case did not, in any manner, limit the scope of Section 7, Rule 86. It only stated that
the aforesaid section equally applies to cases where the administrator mortgages the property of the
estate to secure the loan he obtained.44 Clearly, the pronouncement was a ruling of inclusion and not one
which created a distinction. It cannot, therefore, be doubted that it is Section 7, Rule 86which remains
applicable in dealing with a creditors claim against the mortgaged property of the deceased debtor, as in
this case, as well as mortgages made by the administrator, as that in the PNB case.
Jurisprudence breaks down the rule under Section 7, Rule 86 and explains that the secured creditor has
three remedies/options that he may alternatively adopt for the satisfaction of his indebtedness. In
particular, he may choose to: (a) waive the mortgage and claim the entire debt from the estate of the
mortgagor as an ordinary claim; (b) foreclose the mortgage judicially and prove the deficiency as an
ordinary claim; and (c) rely on the mortgage exclusively, or other security and foreclose the same before it
is barred by prescription, without the right to file a claim for any deficiency.45 It must, however, be
emphasized that these remedies are distinct, independent and mutually exclusive from each other; thus,
the election of one effectively bars the exercise of the others. With respect to real properties, the Court in
Bank of America v. American Realty Corporation46 pronounced:
In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not
cumulative. Notably, an election of one remedy operates as a waiver of the other. For this purpose, a
remedy is deemed chosen upon the filing of the suit for collection or upon the filing of the complaint in an
action for foreclosure of mortgage, pursuant to the provision of Rule 68 of the 1997 Rules of Civil
Procedure. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor upon
filing of the petition not with any court of justice but with the Office of the Sheriff of the province where the
sale is to be made, in accordance with the provisions of Act No. 3135, as amended by Act
No.4118.47 (Emphasis supplied)
Anent the third remedy, it must be mentioned that the same includes the option of 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.48 These precepts were discussed in the PNB case, citing Perez v. Philippine
National Bank49 which overturned the earlier Pasno v. Ravina ruling:50
Case law now holds that this rule grants to the mortgagee three distinct, independent and mutually
exclusive remedies that can be alternatively pursued by the mortgage creditor for the satisfaction of his
credit in case the mortgagor dies, among them:
(1) to waive the mortgage and claim the entire debt from the estate of the mortgagor as an
ordinary claim;

(2) to foreclose the mortgage judicially and prove any deficiency as an ordinary claim; and
(3) to rely on the mortgage exclusively, foreclosing the same at anytime before it is barred by
prescription without right to file a claim for any deficiency
In Perez v. Philippine National Bank, reversing Pasno vs. Ravina, we held:
The ruling in Pasno v. Ravina not having been reiterated in any other case, we have carefully reexamined
the same, and after mature deliberation have reached the conclusion that the dissenting opinion is more
in conformity with reason and law. Of the three alternative courses that section 7, Rule 87 (now Rule 86),
offers the mortgage creditor, to wit, (1) to waive the mortgage and claim the entire debt from the estate of
the mortgagor as an ordinary claim; (2) foreclose the mortgage judicially and prove any deficiency as an
ordinary claim; and (3) to rely on the mortgage exclusively, foreclosing the same at any time before it is
barred by prescription, without right to file a claim for any deficiency, the majority opinion in Pasno v.
Ravina, in requiring a judicial foreclosure, virtually wipes out the third alternative conceded by the Rules to
the mortgage creditor, and which would precisely include extra-judicial foreclosures by contrast with the
second alternative.
The plain result of adopting the last mode of foreclosure is that the creditor waives his right to recover any
deficiency from the estate. Following the Perez ruling that the third mode includes
extrajudicial foreclosure sales, the result of extrajudicial foreclosure is that the creditor waives any further
deficiency claim. x x x.51 (Emphases and underscoring supplied; italics in the original)
To obviate any confusion, the Court observes that the operation of Act No. 3135 does not entirely discount
the application of Section 7, Rule 86, or vice-versa. Rather, the two complement each other within their
respective spheres of operation. On the one hand, Section 7, Rule 86 lays down the options for the
secured creditor to claim against the estate and, according to jurisprudence, the availment of the third
option bars him from claiming any deficiency amount. On the other hand, after the third option is chosen,
the procedure governing the manner in which the extra-judicial foreclosure should proceed would still be
governed by the provisions of Act No. 3135.Simply put, Section 7, Rule 86 governs the parameters and
the extent to which a claim may be advanced against the estate, whereas Act No. 3135sets out the
specific procedure to be followed when the creditor subsequently chooses the third option specifically,
that of extra-judicially foreclosing real property belonging to the estate. The application of the procedure
under Act No. 3135 must be concordant with Section 7, Rule 86 as the latter is a special rule applicable to
claims against the estate, and at the same time, since Section 7, Rule 86 does not detail the procedure
for extra-judicial foreclosures, the formalities governing the manner of availing of the third option such
as the place where the application for extra-judicial foreclosure is filed, the requirements of publication
and posting and the place of sale must be governed by Act No. 3135.
In this case, respondent sought to extra-judicially foreclose the mortgage of the properties previously
belonging to Sps. Maglasang (and now, their estates) and, therefore, availed of the third option. Lest it be
misunderstood, it did not exercise the first option of directly filing a claim against the estate, as petitioners
assert, since it merely notified52 the probate court of the outstanding amount of its claim against the estate
of Flaviano and that it was currently restructuring the account. 53 Thus, having unequivocally opted to
exercise the third option of extra-judicial foreclosure under Section 7, Rule 86, respondent is now
precluded from filing a suit to recover any deficiency amount as earlier discussed.

As a final point, petitioners maintain that the extra-judicial foreclosure of the subject properties was null
and void since the same was conducted in violation of the stipulation in the real estate mortgage contract
stating that the auction sale should be held in the capital of the province where the properties are located,
i.e., the Province of Leyte.
The Court disagrees.
As may be gleaned from the records, the stipulation under the real estate mortgage 54 executed by Sps.
Maglasang which fixed the place of the foreclosure sale at Tacloban City lacks words of exclusivity which
would bar any other acceptable for a wherein the said sale may be conducted, to wit:
It is hereby agreed that in case of foreclosure of this mortgage under Act 3135, the auction sale shall be
held at the capital of the province if the property is within the territorial jurisdiction of the province
concerned, or shall be held in the city if the property is within the territorial jurisdiction of the city
concerned; x x x.55
Case law states that absent such qualifying or restrictive words to indicate the exclusivity of the agreed
forum, the stipulated place should only be as an additional, not a limiting venue. 56 As a consequence, the
stipulated venue and that provided under Act No. 3135 can be applied alternatively.
In particular, Section 2 of Act No. 3135 allows the foreclosure sale to be done within the province where
the property to be sold is situated, viz.:
SEC. 2. Said sale cannot be made legally outside of the province which the property sold is situated; and
in case the place within said province in which the sale is to be made is subject to stipulation, such sale
shall be made in said place or in the municipal building of the municipality in which the property or part
thereof is situated. (Italics supplied) ..
In this regard, since the auction sale was conducted in Ormoc City, which is within the territorial
jurisdiction of the Province of Leyte, then the Court finds sufficient compliance with the above-cited
requirement.
All told, finding that the extra-judicial foreclosure subject of this case was properly conducted in
accordance with the formalities of Act No. 3135,the Court upholds the same as a valid exercise of
respondent's third option under Section 7, Rule 86. To reiterate, respondent cannot, however, file any suit
to recover any deficiency amount since it effectively waived its right thereto when it chose to avail of
extra-judicial foreclosure as jurisprudence instructs.
WHEREFORE, the petition is PARTLY GRANTED. The complaint for the recovery of the deficiency
amount after extra-judicial foreclosure filed by respondent Manila Banking Corporation is hereby
DISMISSED. The extra-judicial foreclosure of the mortgaged properties, however, stands.
SO ORDERED.

CHICO-NAZARIO, J.:
PILAPIL VS HEIRS OF BRIONES
On 10 March 2006, this Court promulgated its Decision [1] in the above-entitled case, ruling in
favor of the petitioners. The dispositive portion[2] reads as follows:
IN VIEW OF THE FOREGOING, the assailed Decision of the Court of Appeals in
CA-GR CV No. 55194, dated 31 August 2001, affirming the Decision of the Cebu City
RTC in Civil Case No. CEB-5794, dated 28 September 1986, is hereby REVERSED and
SET ASIDE; and the Complaint for partition, annulment, and recovery of possession filed
by the heirs of Maximino in Civil Case No. CEB-5794 is hereby DISMISSED.

On 10 May 2006,

a Motion for Reconsideration[3] of the

Atty. Celso C. Reales of

the Reales Law

of Maximino R. Briones. On 19

May

Office

2006,

on

foregoing Decision was filed by

behalf

of

the

petitionersErlinda Pilapil and

respondents,
the

other

heirs
co-heirs

of Donata Ortiz Vda. de Briones, through counsel, filed an Opposition to Respondents Motion for
Reconsideration,[4] to which the respondents filed a Rejoinder [5] on 23 May 2006. Thereafter, Atty. Amador
F. Brioso, Jr. of the Canto Brioso Arnedo Law Office entered his appearance as collaborating counsel for
the respondents.[6] Atty. Brioso then filed on 11 June 2006 and 16 June 2006, respectively, a Reply[7] and
Supplemental Reply[8] to the petitioners Opposition to respondents Motion for Reconsideration. Finally,
petitioners filed a Rejoinder[9] to the respondents Reply and Supplemental Reply on 5 July 2006.
The facts of the case, as recounted in the Decision, [10] are as follows
Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting of
her
surviving
sister, Rizalina OrtizAguila (Rizalina); Rizalinas daughter, Erlinda Pilapil (Erlinda); and the other nephews and
nieces of Donata, in representation of her two other sisters who had also passed
away. Respondents,
on
the
other
hand,
are
the
heirs
of
the
late Maximino Briones (Maximino), composed of his nephews and nieces, and
grandnephews and grandnieces, in representation of the deceased siblings of Maximino.
xxxx
Maximino was married to Donata but their union did not produce any
children. When Maximino died on 1 May 1952, Donata instituted intestate proceedings to
settle her husbands estate with the Cebu City Court of First Instance (CFI), 14th Judicial
District, designated as Special Proceedings No. 928-R. On 8 July 1952, the CFI issued
Letters
of
Administration
appointing Donata as
the administratrix of Maximinos estate. She
submitted
an
Inventory
of Maximinosproperties, which included, among other things, the following parcels of land
x x x.
xxxx
The CFI would subsequently issue an Order, dated 2 October 1952, awarding
ownership of the aforementioned real properties to Donata. On 27 June
1960, Donata had the said CFI Order recorded in the Primary Entry Book of the Register
of Deeds, and by virtue thereof, received new TCTs, covering the said properties, now in
her name.
Donata died on 1 November 1977. Erlinda, one of Donatas nieces, instituted with
the RTC a petition for the administration of the intestate estate of Donata. Erlinda and her
husband, Gregorio, were appointed by the RTC as administrators of Donatas intestate
estate. Controversy arose among Donatas heirs when Erlinda claimed exclusive
ownership of three parcels of land, covered by TCTs No. 21542, 21545, and 58684,
based on two Deeds of Donation, both dated 15 September 1977, allegedly executed in
her favor by her aunt Donata. The other heirs of Donata opposed Erlindas claim. This
Court, however, was no longer informed of the subsequent development in the intestate
proceedings of the estate of Donata; and as far as this Petition is concerned, all the heirs
of Donata, including Erlinda, appear to be on the same side.

On 21 January 1985, Silverio Briones (Silverio), a nephew of Maximino, filed a

Petition with the RTC for Letters of Administration for the intestate estate of Maximino,
which was initially granted by the RTC. The RTC also issued an Order, dated 5
December 1985, allowing Silverio to collect rentals from Maximinos properties. But then,
Gregorio filed with the RTC a Motion to Set Aside the Order, dated 5 December 1985,
claiming that the said properties were already under his and his wifes administration as
part of the intestate estate of Donata. Silverios Letters of Administration for the intestate
estate of Maximino was subsequently set aside by the RTC.
On 3 March 1987, the heirs of Maximino filed a Complaint with the RTC against
the heirs of Donata for the partition, annulment, and recovery of possession of real
property, docketed as Civil Case No. CEB-5794. They later filed an Amended Complaint,
on 11 December 1992. They alleged that Donata, as administratrix of the estate
of Maximino, through fraud and misrepresentation, in breach of trust, and without the
knowledge of the other heirs, succeeded in registering in her name the real properties
belonging to the intestate estate of Maximino.
xxxx
After trial in due course, the RTC rendered its Decision, dated 8 April 1986, in
favor of the heirs of Maximino x x x.
xxxx
x x x[T]he RTC declared that the heirs of Maximino were entitled to of the real properties
covered by TCTs No. 21542, 21543, 21544, 21545, 21546, and 58684. It also
ordered Erlinda to reconvey to the heirs of Maximino the said properties and to render an
accounting of the fruits thereof.
The heirs of Donata appealed the RTC Decision, dated 8 April 1986, to the
Court of Appeals. The Court of Appeals, in its Decision, promulgated on 31 August 2001,
affirmed the RTC Decision, x x x.
xxxx
Unsatisfied with the afore-quoted Decision of the Court of Appeals, the heirs
of Donata filed the present Petition, x x x.

In its Decision, dated 10 March 2006, this Court found the Petition meritorious and, reversing the
Decisions of the Court of Appeals and the Regional Trial Court (RTC), dismissed the Complaint for
partition, annulment, and recovery of possession of real property filed by the heirs of Maximino in Civil
Case No. CEB-5794. This Court summed up its findings,[11] thus
In summary, the heirs of Maximino failed to prove by clear and convincing
evidence that Donata managed, through fraud, to have the real properties, belonging to
the intestate estate of Maximino, registered in her name. In the absence of fraud, no
implied trust was established between Donata and the heirs of Maximino under Article
1456 of the New Civil Code. Donata was able to register the real properties in her name,
not through fraud or mistake, but pursuant to an Order, dated 2 October 1952, issued by
the CFI in Special Proceedings No. 928-R. The CFI Order, presumed to be fairly and

regularly issued, declared Donata as the sole, absolute, and exclusive heir of Maximino;
hence, making Donata the singular owner of the entire estate of Maximino, including the
real properties, and not merely a co-owner with the other heirs of her deceased
husband. There being no basis for the Complaint of the heirs of Maximinoin Civil Case
No. CEB-5794, the same should have been dismissed.

Respondents move for the reconsideration of the Decision of this Court raising still the arguments
that Donata committed fraud in securing the Court of First Instance Order, dated 2 October 1952, which
declared her as the sole heir of her deceased husband Maximino and authorized her to
have Maximinos properties registered exclusively in her name; that respondents right to succession to the
disputed properties was transmitted or vested from the moment of Maximinos death and which they could
no longer be deprived of; that Donata merely possessed and held the properties in trust for her coheirs/owners; and that, by virtue of this Courts ruling in Quion v. Claridad[12] and Sevilla, et al. v. De Los
Angeles,[13] respondents action to recover title to and possession of their shares in Maximinos estate, held
in trust for their benefit by Donata, and eventually, by petitioners as the latters successors-in-interest,
isimprescriptible. Respondents also advance a fresh contention that the CFI Order, dated 2 October 1952,
being based on the fraudulent misrepresentation of Donata that she was Maximinos sole heir, was a void
order, which produced no legal effect. Lastly, respondents asseverate that, by relying on certain
procedural presumptions in its Decision, dated 10 March 2006, this Court has sacrificed their substantive
right to succession, thus, making justice subservient to the dictates of mere procedural fiats. [14]

While this Court is persuaded to reexamine and clarify some points in its previous Decision in this
case, it does not find any new evidence or argument that would adequately justify a change in its previous
position.
On the finding of fraud

As this Court declared in its Decision, the existence of any trust relations between petitioners and
respondents shall be examined in the light of Article 1456 of the New Civil Code, which provides that, [i]f
property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the person from whom the property comes. Hence, the
foremost question to be answered is still whether an implied trust under Article 1456 of the New Civil
Code had been sufficiently established in the present case.

In the Decision, this Court ruled in the negative, since there was insufficient evidence to establish
that Donata committed fraud. It should be remembered that Donata was able to secure certificates of title
to the disputed properties by virtue of the CFI Order in Special Proceedings No. 928-R (the proceedings
she instituted to settle Maximinos intestate estate), which declared her as Maximinos sole heir. In the
absence of proof to the contrary, the Court accorded to Special Proceedings No. 928-R the presumptions
of regularity and validity. Reproduced below are the relevant portions[15] of the Decision
At the onset, it should be emphasized that Donata was able to secure the TCTs covering
the real properties belonging to the estate of Maximino by virtue of a CFI Order, dated 2
October 1952. It is undisputed that the said CFI Order was issued by the CFI in Special
Proceedings No. 928-R, instituted by Donata herself, to settle the intestate estate
of Maximino. The petitioners, heirs of Donata, were unable to present a copy of the CFI
Order, but this is not surprising considering that it was issued 35 years prior to the filing
by the heirs of Maximino of their Complaint in Civil Case No. CEB-5794 on 3 March
1987. The existence of such CFI Order, nonetheless, cannot be denied. It was recorded
in the Primary Entry Book of the Register of Deeds on 27 June 1960, at 1:10 p.m., as
Entry No. 1714. It was annotated on the TCTs covering the real properties as having
declared Donata the sole, absolute, and exclusive heir of Maximino.The non-presentation
of the actual CFI Order was not fatal to the cause of the heirs of Donata considering that
its authenticity and contents were never questioned. The allegation of fraud by the heirs
of Maximino did not pertain to the CFI Order, but to the manner or procedure by which it
was issued in favor of Donata. Moreover, the non-presentation of the CFI Order, contrary
to the declaration by the RTC, does not amount to a willful suppression of evidence that
would give rise to the presumption that it would be adverse to the heirs of Donata if
produced. x x x.
xxxx
The CFI Order, dated 2 October 1952, issued in Special Proceedings No. 928-R,
effectively settled the intestate estate of Maximino by declaring Donata as the sole,
absolute, and exclusive heir of her deceased husband. The issuance by the CFI of the
said Order, as well as its conduct of the entire Special Proceedings No. 928-R, enjoy the
presumption of validity pursuant to the Section 3(m) and (n) of Rule 131 of the Revised
Rules of Court, reproduced below
SEC. 3. Disputable presumptions. The following presumptions
are satisfactory if uncontradicted, but may be contradicted and overcome
by other evidence:
xxxx
(m) That official duty has been regularly performed;
(n) That a court, or judge acting as such, whether in
the Philippines or elsewhere, was acting in the lawful exercise of
jurisdiction.
By reason of the foregoing provisions, this Court must presume, in the absence
of any clear and convincing proof to the contrary, that the CFI in Special Proceedings No.
928-R had jurisdiction of the subject matter and the parties, and to have rendered a
judgment valid in every respect; and it could not give credence to the following
statements made by the Court of Appeals in its Decision.

xxxx
There was totally no evidentiary basis for the foregoing pronouncements. First of all, the
Petition filed by Donata for Letters of Administration in Special Proceedings No. 928-R
before the CFI was not even referred to nor presented during the course of the trial of
Civil Case No. CEB-5794 before the RTC. How then could the Court of Appeals make a
finding that Donata willfully excluded from the said Petition the names, ages, and
residences of the other heirs ofMaximino? Second, there was also no evidence showing
that the CFI actually failed to send notices of Special Proceedings No. 928-R to the heirs
of Maximino or that it did not require presentation of proof of service of such notices. It
should be remembered that there stands a presumption that the CFI Judge had regularly
performed his duties in Special Proceedings No. 928-R, which included sending out of
notices and requiring the presentation of proof of service of such notices; and, the heirs
of Maximino did not propound sufficient evidence to debunk such presumption. They only
made a general denial of knowledge of Special Proceedings No. 928-R, at least until
1985. There was no testimony or document presented in which the heirs
of Maximino categorically denied receipt of notice from the CFI of the pendency of
Special Proceedings No. 928-R. The only evidence on record in reference to the absence
of notice of such proceedings was the testimony of Aurelia Briones (Aurelia), one of the
heirs of Maximino, x x x.
xxxx
Aurelias testimony deserves scant credit considering that she was not testifying on
matters within her personal knowledge. The phrase I dont think is a clear indication that
she is merely voicing out her opinion on how she believed her uncles and aunts would
have acted had they received notice of Special Proceedings No. 928-R.
It is worth noting that, in its foregoing ratiocination, the Court was proceeding from an evaluation
of the evidence on record, which did not include an actual copy of the CFI Order in Special Proceedings
No. 928-R.Respondents only submitted a certified true copy thereof on 15 June 2006, annexed to their
Supplemental Reply to petitioners opposition to their motion for reconsideration of this Courts
Decision. Respondents did not offer any explanation as to why they belatedly produced a copy of the said
Order, but merely claimed to have been fortunate enough to obtain a copy thereof from the Register of
Deeds of Cebu.[16]

Respondents should be taken to task for springing new evidence so late into the proceedings of
this case. Parties should present all their available evidence at the courts below so as to give the
opposing party the opportunity to scrutinize and challenge such evidence during the course of the
trial. However, given that the existence of the CFI Order in Special Proceedings No. 928-R was never in
issue and was, in fact, admitted by the petitioners; that the copy submitted is a certified true copy of the
said Order; and that the said Order may provide new information vital to a just resolution of the present
case, this Court is compelled to consider the same as part of the evidence on record.

The CFI Order[17] in question reads in full as

ORDER
This is with reference to the Motion of the Administratrix, dated January 5, 1960,
that she be declared the sole heir of her deceased husband, Maximino Suico Briones, the
latter having died without any legitimate ascendant nor descendant, nor any legitimate
brother or sister, nephews or nieces.
At the hearing of this incident today, nobody appeared to resist the motion, and
based on the uncontradicted testimony of Donata G. Ortiz that she was the nearest
surviving relative of the deceased Maximino Suico Briones at the time of the latters
death, and pursuant to the pertinent provisions of the new Civil Code of the Philippines,
the Court hereby declares the aforesaid Donata G. Ortiz the sole, absolute and exclusive
heir of the estate of the deceased Maximino Suico Briones, and she is hereby entitled to
inherit all the residue of this estate after paying all the obligations thereof, which
properties are those contained in the Inventory, dated October 2, 1952.
Cebu City, January 15, 1960.
From the contents of the afore-quoted Order, this Court is able to deduce that the CFI Order was
in fact issued on 15 January 1960 and not 2 October 1952, as earlier stated in the Decision. It was the
inventory of properties, submitted by Donata as administratrix of Maximinos intestate estate, which was
dated 2 October 1952.[18] Other than such observation, this Court finds nothing in the CFI Order which
could change its original position in the Decision under consideration.
While it is true that since the CFI was not informed that Maximino still had surviving siblings and
so the court was not able to order that these siblings be given personal notices of the intestate
proceedings, it should be borne in mind that the settlement of estate, whether testate or intestate, is a
proceeding in rem,[19] and that the publication in the newspapers of the filing of the application and of the
date set for the hearing of the same, in the manner prescribed by law, is a notice to the whole world of the
existence of the proceedings and of the hearing on the date and time indicated in the publication. The
publication requirement of the notice in newspapers is precisely for the purpose of informing all interested
parties in the estate of the deceased of the existence of the settlement proceedings, most especially
those who were not named as heirs or creditors in the petition, regardless of whether such omission was
voluntarily or involuntarily made.
This Court cannot stress enough that the CFI Order was the result of the intestate proceedings
instituted by Donata before the trial court. As this Court pointed out in its earlier Decision, the manner by
which the CFI judge conducted the proceedings enjoys the presumption of regularity, and encompassed
in such presumption is the order of publication of the notice of the intestate proceedings. A review of the

records fails to show any allegation or concrete proof that the CFI also failed to order the publication in
newspapers of the notice of the intestate proceedings and to require proof from Donata of compliance
therewith. Neither can this Court find any reason or explanation as to why Maximinos siblings could have
missed the published notice of the intestate proceedings of their brother.
In relying on the presumptions of the regular performance of official duty and lawful exercise of
jurisdiction by the CFI in rendering the questioned Order, dated 15 January 1960, this Court is not, as
counsel for respondents allege, sacrificing the substantive right of respondents to their share in the
inheritance in favor of mere procedural fiats. There is a rationale for the establishment of rules of
procedure, as amply explained by this Court in De Dios v. Court of Appeals[20]
Procedural rules are designed to insure the orderly and expeditious
administration of justice by providing for a practical system by which the parties to a
litigation may be accorded a full and fair opportunity to present their respective positions
and refute each other's submissions under the prescribed requirements, conditions and
limitations. Adjective law is not the counterfoil of substantive law. In fact, there is a
symbiotic relationship between them. By complying faithfully with the Rules of Court, the
bench and the bar are better able to discuss, analyze and understand substantive rights
and duties and consequently to more effectively protect and enforce them. The other
alternative is judicial anarchy.
Thus, compliance with the procedural rules is the general rule, and abandonment thereof should only be
done in the most exceptional circumstances. The presumptions relied upon by this Court in the instant
case are disputable presumptions, which are satisfactory, unless contradicted or overcome by
evidence. This Court finds that the evidence presented by respondents failed to overcome the given
presumptions.
Although Donata may have alleged before the CFI that she was her husbands sole heir, it was
not established that she did so knowingly, maliciously and in bad faith, so as for this Court to conclude
that she indeed committed fraud. This Court again brings to the fore the delay by which respondents filed
the present case, when the principal actors involved, particularly, Donata and Maximinos siblings, have
already passed away and their lips forever sealed as to what truly transpired between them. On the other
hand, Special Proceedings No. 928-R took place when all these principal actors were still alive and each
would have been capable to act to protect his or her own right toMaximinos estate. Letters of
Administration of Maximinos estate were issued in favor of Donata as early as 8 July 1952, and the CFI
Order in question was issued only on 15 January 1960. The intestate proceedings for the settlement
of Maximinos estate were thus pending for almost eight years, and it is the burden of the respondents to
establish that their parents or grandparents, Maximinos surviving siblings, had absolutely no knowledge of

the said proceedings all these years. As established in Ram o s v. Ra mo s ,[21] the degree of proof to
establish fraud in a case where the principal actors to the transaction have already passed away is proof
beyond reasonable doubt, to wit
"x x x But length of time necessarily obscures all human evidence; and as it thus
removes from the parties all the immediate means to verify the nature of the original
transactions, it operates by way of presumption, in favor of innocence, and against
imputation of fraud. It would be unreasonable, after a great length of time, to require
exact proof of all the minute circumstances of any transaction, or to expect a satisfactory
explanation of every difficulty, real or apparent, with which it may be encumbered. The
most that can fairly be expected, in such cases, if the parties are living, from the frailty of
memory, and human infirmity, is, that the material facts can be given with certainty to a
common intent; and, if the parties are dead, and the cases rest in confidence, and
in parol agreements, the most that we can hope is to arrive at probable conjectures, and
to substitute general presumptions of law, for exact knowledge.Fraud, or breach of trust,
ought not lightly to be imputed to the living; for, the legal presumption is the other way; as
to the dead, who are not here to answer for themselves, it would be the height of injustice
and cruelty, to disturb their ashes, and violate the sanctity of the grave, unless the
evidence of fraud be clear, beyond a reasonable doubt (Prevost vs. Gratz, 6 Wheat.
[U.S.], 481, 498).
Moreover, even if Donatas allegation that she was Maximinos sole heir does constitute fraud, it is
insufficient to justify abandonment of the CFI Order, dated 15 January 1960, [ 2 2 ] considering the nature of
intestate proceedings as being in rem and the disputable presumptions of the regular performance of
official duty and lawful exercise of jurisdiction by the CFI in rendering the questioned Order, dated 15
January 1960, in Special Proceedings No. 928-R.

On prescription of the right to recover based on implied trust

Assuming, for the sake of argument, that Donatas misrepresentation constitutes fraud that would
impose upon her the implied trust provided in Article 1456 of the Civil Code, this Court still cannot sustain
respondents contention that their right to recover their shares in Maximinos estate is imprescriptible. It is
already settled in jurisprudence that an implied trust, as opposed to an express trust, is subject to
prescription and laches.
The case of Ramos v. Ramos[23] already provides an elucidating discourse on the matter, to wit
"Trusts are either express or implied. Express trusts are created by the intention
of the trustor or of the parties. Implied trusts come into being by operation of law" (Art.
1441, Civil Code). "No express trusts concerning an immovable or any interest therein
may be proven by oral evidence. An implied trust may be proven by oral evidence" ( Ibid;
Arts. 1443 and 1457).

"No particular words are required for the creation of an express trust, it being
sufficient that a trust is clearly intended" (Ibid; Art. 1444; Tuason de Perez vs. Caluag, 96
Phil. 981; Julio vs. Dalandan, L-19012, October 30, 1967, 21 SCRA 543, 546). "Express
trusts are those which are created by the direct and positive acts of the parties, by some
writing or deed, or will, or by words either expressly or impliedly evincing an intention to
create a trust" (89 C.J. S. 122).
"Implied trusts are those which, without being expressed, are deducible from the
nature of the transaction as matters of intent, or which are superinduced on the
transaction by operation of law as matters of equity, independently of the particular
intention of the parties" (89 C.J.S. 724). They are ordinarily subdivided into resulting and
constructive trusts (89 C.J.S. 722).
"A resulting trust is broadly defined as a trust which is raised or created by the act
or construction of law, but in its more restricted sense it is a trust raised by implication of
law and presumed always to have been contemplated by the parties, the intention as to
which is to be found in the nature of their transaction, but not expressed in the deed or
instrument of conveyance" (89 C.J.S. 725). Examples of resulting trusts are found in
Article 1448 to 1455 of the Civil Code. See Padilla vs. Court of Appeals, L31569, September 28, 1973, 53 SCRA 168, 179).
On the other hand, a constructive trust is a trust "raised by construction of law, or
arising by operation of law." In a more restricted sense and as contradistinguished from a
resulting trust, a constructive trust is "a trust not created by any words, either expressly or
impliedly evincing a direct intention to create a trust, but by the construction of equity in
order to satisfy the demands of justice. It does not arise by agreement or intention but by
operation of law." (89 C.J.S. 726-727). "If a person obtains legal title to property by fraud
or concealment, courts of equity will impress upon the title a so-called constructive trust
in favor of the defrauded party." A constructive trust is not a trust in the technical sense
(Gayondato vs. Treasurer of the P.I., 49 Phil. 244; See Art. 1456, Civil Code).
There is a rule that a trustee cannot acquire by prescription the ownership of
property entrusted to him (Palma vs. Cristobal, 77 Phil. 712), or that an action to compel
a trustee to convey property registered in his name in trust for the benefit of the cestui qui
trust does not prescribe (Manalang vs. Canlas, 94 Phil. 776; Cristobal vs. Gomez, 50
Phil. 810), or that the defense of prescription cannot be set up in an action to recover
property held by a person in trust for the benefit of another (Sevilla vs. De los Angeles, 97
Phil. 875), or that property held in trust can be recovered by the beneficiary regardless of
the lapse of time (Marabilles vs. Quito, 100 Phil. 64; Bancairen vs. Diones, 98 Phil. 122,
126;Juan vs. Zuiga, 62 O.G. 1351; 4 SCRA 1221; Jacinto vs. Jacinto, L-17957, May 31,
1962. See Tamayo vs. Callejo, 147 Phil. 31, 37).
That rule applies squarely to express trusts. The basis of the rule is that the
possession of a trustee is not adverse. Not being adverse, he does not acquire by
prescription the property held in trust. Thus, Section 38 of Act 190 provides that the law of
prescription does not apply "in the case of a continuing and subsisting trust" (Diaz
vs. Gorricho and Aguado, 103 Phil. 261, 266; Laguna vs. Levantino, 71 Phil.
566; Sumira vs. Vistan, 74 Phil. 138; Golfeo vs. Court of Appeals, 63 O.G. 4895, 12
SCRA 199; Caladiao vs. Santos, 63 O.G. 1956, 10 SCRA 691).
The rule of imprescriptibility of the action to recover property held in trust may
possibly apply to resulting trusts as long as the trustee has not repudiated the trust ( Heirs
of Candelaria vs. Romero, 109 Phil. 500, 502-3; Martinez vs. Grao, 42 Phil.
35; Buencamino vs. Matias, 63 O. G. 11033, 16 SCRA 849).

The rule of imprescriptibility was misapplied to constructive trusts (Geronimo

and Isidoro vs. Nava and Aquino, 105 Phil. 145, 153. Compare with Cuison vs.
Fernandez and Bengzon, 105 Phil. 135, 139; De Pasion vs. DePasion, 112 Phil. 403,
407).
Acquisitive prescription may bar the action of the beneficiary against the trustee
in an express trust for the recovery of the property held in trust where (a) the trustee has
performed unequivocal acts of repudiation amounting to an ouster of the cestui qui trust;
(b) such positive acts of repudiation have been made known to the cestui qui trust and (c)
the evidence thereon is clear and conclusive (Laguna vs. Levantino, supra; Salinas
vs. Tuason, 55 Phil. 729. Compare with the rule regarding co-owners found in the last
paragraph of Article 494, Civil Code; Casaas vs. Rosello, 50 Phil. 97; Gerona vs. De
Guzman, L-19060, May 29, 1964, 11 SCRA 153, 157).
With respect to constructive trusts, the rule is different. The prescriptibility of an
action for reconveyance based on constructive trust is now settled (Alzona vs. Capunitan,
L-10228, February 28, 1962, 4 SCRA 450; Gerona vs. De Guzman,
supra; Claridad vs. Henares, 97 Phil. 973; Gonzales vs. Jimenez, L-19073, January 30,
1965, 13 SCRA 80; Boaga vs. Soler, 112 Phil. 651; J. M. Tuason & Co., vs. Magdangal,
L-15539, January 30, 1962, 4 SCRA 84).Prescription may supervene in an implied
trust (Bueno vs. Reyes, L-22587, April 28, 1969, 27 SCRA 1179; Fabian vs. Fabian, L20449, January 29, 1968; Jacinto vs. Jacinto, L-17957, May 31, 1962, 5 SCRA 371).
And whether the trust is resulting or constructive, its enforcement may be barred
by laches (90 C.J.S. 887-889; 54 Am Jur. 449-450; Diaz vs. Gorricho and Aguado, supra;
Compare with Mejia vs. Gampona, 100 Phil. 277). [Emphases supplied.]
A present reading of the Quion[24] and Sevilla[25] cases, invoked by respondents, must be made in
conjunction with and guided accordingly by the principles established in the afore-quoted case. Thus,
while respondents right to inheritance was transferred or vested upon them at the time
of Maximinos death, their enforcement of said right by appropriate legal action may be barred by the
prescription of the action.
Prescription of the action for reconveyance of the disputed properties based on implied trust is
governed by Article 1144 of the New Civil Code, which reads
ART. 1144. The following actions must be brought within ten years from the time
the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
Since an implied trust is an obligation created by law (specifically, in this case, by Article 1456 of the New
Civil Code), then respondents had 10 years within which to bring an action for reconveyance of their
shares in Maximinosproperties. The next question now is when should the ten-year prescriptive period be

reckoned from. The general rule is that an action for reconveyance of real property based on implied trust
prescribes ten years from registration and/or issuance of the title to the property, [26] not only because
registration under the Torrens system is a constructive notice of title, [27] but also because by registering
the disputed properties exclusively in her name, Donata had already unequivocally repudiated any other
claim to the same.
By virtue of the CFI Order, dated 15 January 1960, in Special Proceedings No. 928R, Donata was able to register and secure certificates of title over the disputed properties in her name
on 27 June 1960. The respondents filed with the RTC their Complaint for partition, annulment, and
recovery of possession of the disputed real properties, docketed as Civil Case No. CEB-5794, only on 3
March 1987, almost 27 years after the registration of the said properties in the name
of Donata. Therefore, respondents action for recovery of possession of the disputed properties had
clearly prescribed.
Moreover, even though respondents Complaint before the RTC in Civil Case No. CEB-5794 also
prays for partition of the disputed properties, it does not make their action to enforce their right to the said
propertiesimprescriptible. While as a general rule, the action for partition among co-owners does not
prescribe so long as the co-ownership is expressly or impliedly recognized, as provided for in Article 494,
of the New Civil Code, it bears to emphasize that Donata had never recognized respondents as coowners or co-heirs, either expressly or impliedly.[28] Her assertion before the CFI in Special Proceedings
No. 928-R that she was Maximinos sole heir necessarily excludes recognition of some other co-owner or
co-heir to the inherited properties; Consequently, the rule on non-prescription of action for partition of
property owned in common does not apply to the case at bar.
On laches as bar to recovery
Other than prescription of action, respondents right to recover possession of the disputed
properties, based on implied trust, is also barred by laches. The defense of laches, which is a question of
inequity in permitting a claim to be enforced, applies independently of prescription, which is a question of
time. Prescription is statutory; laches is equitable.[29]
Laches is defined as the failure to assert a right for an unreasonable and unexplained length of
time, warranting a presumption that the party entitled to assert it has either abandoned or declined to
assert it.

This equitable defense is based upon grounds of public policy, which requires the

discouragement of stale claims for the peace of society.[30]

This Court has already thoroughly discussed in its Decision the basis for barring respondents
action for recovery of the disputed properties because of laches. This Court pointed out therein[31] that
In further support of their contention of fraud by Donata, the heirs
of Maximino even emphasized that Donata lived along the same street as some of the
siblings of Maximino and, yet, she failed to inform them of the CFI Order, dated [15
January 1960], in Special Proceedings No. 928-R, and the issuance in her name of
new TCTs covering the real properties which belonged to the estate of Maximino. This
Court, however, appreciates such information differently. It actually works against the
heirs of Maximino. Since they only lived nearby, Maximinos siblings had ample
opportunity to inquire or discuss with Donata the status of the estate of their deceased
brother. Some of the real properties, which belonged to the estate of Maximino, were also
located within the same area as their residences in Cebu City, and Maximinos siblings
could have regularly observed the actions and behavior of Donata with regard to the said
real properties. It is uncontested that from the time of Maximinos death on 1 May
1952, Donata had possession of the real properties. She managed the real properties
and even collected rental fees on some of them until her own death on 1 November
1977. After Donatas death, Erlinda took possession of the real properties, and continued
to manage the same and collect the rental fees thereon. Donata and,
subsequently, Erlinda, were so obviously exercising rights of ownership over the real
properties, in exclusion of all others, which must have already put the heirs
of Maximino on guard if they truly believed that they still had rights thereto.
The heirs of Maximino knew he died on 1 May 1952. They even attended his
wake. They did not offer any explanation as to why they had waited 33 years
from Maximinos death before one of them, Silverio, filed a Petition for Letters of
Administration for the intestate estate of Maximino on 21 January 1985. After learning
that the intestate estate of Maximino was already settled in Special Proceedings No. 928R, they waited another two years, before instituting, on 3 March 1987, Civil Case No.
CEB-5794, the Complaint for partition, annulment and recovery of the real property
belonging to the estate of Maximino. x x x

Considering the circumstances in the afore-quoted paragraphs, as well as respondents conduct

before this Court, particularly the belated submission of evidence and argument of new issues,
respondents are consistently displaying a penchant for delayed action, without any proffered reason or
justification for such delay.

It is well established that the law serves those who are vigilant and diligent and not those who
sleep when the law requires them to act. The law does not encourage laches, indifference, negligence or
ignorance. On the contrary, for a party to deserve the considerations of the courts, he must show that he
is not guilty of any of the aforesaid failings.[32]
On void judgment or order

Respondents presented only in their Reply and Supplemental Reply to the petitioners Opposition
to their Motion for Reconsideration the argument that the CFI Order, dated 15 January 1960, in Special
Proceedings No. 928-R is void and, thus, it cannot have any legal effect. Consequently, the registration of
the disputed properties in the name of Donata pursuant to such Order was likewise void.
This Court is unconvinced.
In the jurisprudence referred to by the respondents, [33] an order or judgment is considered void
when rendered by the court without or in excess of its jurisdiction or in violation of a mandatory duty,
circumstances which are not present in the case at bar.

Distinction must be made between a void judgment and a voidable one, thus
"* * * A voidable judgment is one which, though not a mere nullity, is liable to be
made void when a person who has a right to proceed in the matter takes the proper steps
to have its invalidity declared. It always contains some defect which may become fatal. It
carries within it the means of its own overthrow. But unless and until it is duly annulled, it
is attended with all the ordinary consequences of a legal judgment. The party against
whom it is given may escape its effect as a bar or an obligation, but only by a proper
application to have it vacated or reversed. Until that is done, it will be efficacious as a
claim, an estoppel, or a source of title. If no proceedings are ever taken against it, it will
continue throughout its life to all intents a valid sentence. If emanating from a court of
general jurisdiction, it will be sustained by the ordinary presumptions of regularity, and it is
not open to impeachment in any collateral action. * * *"
But it is otherwise when the judgment is void. "A void judgment is in legal effect
no judgment. By it no rights are divested. From it no rights can be obtained. Being
worthless in itself, all proceedings founded upon it are equally worthless. It neither binds
nor bars any one. All acts performed under it and all claims flowing out of it are void. The
parties attempting to enforce it may be responsible as trespassers. The purchaser at a
sale by virtue of its authority finds himself without title and without redress." (Freeman on
Judgments, sec. 117, citing Campbell vs. McCahan, 41 Ill., 45; Roberts vs. Stowers, 7
Bush, 295, Huls vs. Buntin, 47 Ill., 396; Sherrell vs. Goodrum, 3 Humph., 418;
Andrews vs. State, 2 Sneed, 549; Hollingsworth vs. Bagley, 35 Tex., 345; Morton vs.
Root, 2 Dill., 312; Commercial Bank of Manchester vs. Martin, 9 Smedes & M., 613;
Hargis vs. Morse, 7 Kan., 259. See also Cornell vs. Barnes, 7 Hill, 35; Dawson and
Another vs. Wells, 3 Ind., 399; Meyer vs. Mintonye, 106 Ill., 414; Olson vs. Nunnally, 47
Kan., 391; White vs. Foote L. & M. Co., 29 W. Va., 385.)
It is not always easy to draw the line of demarcation between a void judgment
and a voidable one, but all authorities agree that jurisdiction over the subject-matter is
essential to the validity of a judgment and that want of such jurisdiction renders it void
and a mere nullity. In the eye of the law it is non-existent. (Fisher vs. Harnden, 1 Paine,
55; Towns vs. Springer, 9 Ga., 130; Mobley vs. Mobley, 9 Ga., 247; Beverly and
McBride vs. Burke, 9 Ga., 440; Central Bank of Georgia vs. Gibson, 11 Ga., 453;
Johnson vs. Johnson, 30 Ill., 215; St. Louis and Sandoval Coal and Mining Co. vs.
Sandoval Coal and Mining Co., 111 Ill., 32; Swiggart vs. Harber, 4 Scam., 364; Miller vs.
Snyder, 6 Ind., 1;Seely vs. Reid, 3 Greene [Iowa], 374.)[34]

The fraud and misrepresentation fostered by Donata on the CFI in Special Proceedings No. 928R did not deprive the trial court of jurisdiction over the subject-matter of the case, namely, the intestate
estate of Maximino.Donatas fraud and misrepresentation may have rendered the CFI Order, dated 15
January 1960, voidable, but not void on its face. Hence, the said Order, which already became final
and executory, can only be set aside by direct action to annul and enjoin its enforcement. [35] It cannot be
the subject of a collateral attack as is being done in this case. Note that respondents Complaint before the
RTC in Civil Case No. CEB-5794 was one for partition, annulment, and recovery of possession of the
disputed properties. The annulment sought in the Complaint was not that of the CFI Order, dated 15
January 1960, but of the certificates of title over the properties issued in Donatas name. So until and
unless respondents bring a direct action to nullify the CFI Order, dated 15 January 1960, in Special
Proceedings No. 928-R, and attain a favorable judgment therein, the assailed Order remains valid and
binding.
Nonetheless, this Court also points out that an action to annul an order or judgment based on
fraud must be brought within four years from the discovery of the fraud. [36] If it is conceded that the
respondents came to know ofDonatas fraudulent acts only in 1985, during the course of the RTC
proceedings which they instituted for the settlement of Maximinos estate, then their right to file an action
to annul the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R (earlier instituted
by Donata for the settlement of Maximinos estate), has likewise prescribed by present time.
In view of the foregoing, the Motion for Reconsideration is DENIED.
SO ORDERED.
CASE DIGEST
PILAPIL vs. HEIRS OF MAXIMINO R. BRIONES, February 5, 2007 G.R. No. 150175Facts:
Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting of her survivingsister,
Rizalina Ortiz-Aguila (Rizalina); Rizalinas daughter, ErlindaPilapil (Erlinda); and the othernephews and
nieces of Donata,. Respondents, on the other hand, are the heirs of the lateMaximinoBriones
(Maximino), composed of his nephews and nieces, and grandnephews andgrandnieces, in representation
of the deceased siblings of Maximino.Maximino was married to Donata but their union did not produce
any children. When Maximinodied, Donata instituted intestate proceedings to settle her husbands estate,
which then issuedappointedDonata as the administratrix of Maximinos estate.Donata died. Erlinda
instituted apetition for the administration of the intestate estate of Donata. Erlinda and her
husband,Gregorio, were appointed as administrators of Donatas intestate estate. SilverioBriones, a
nephew of Maximino, filed for Letters of Administration for the intestate estateof Maximino, which was
initially granted. The trial court also issued an order, allowing Silverio tocollect rentals from Maximinos
properties. But then, Gregorio filed with the RTC a Motion to SetAside the Order, claiming that the

said properties were already under his and his wifesadministration as part of the intestate
estate of Donata. Silverios Letters of Administration forthe intestate estate of Maximino was subsequently
set aside by the RTC.The heirs of Maximino filed a complaint against the heirs of Donata for the partition,
annulment,and recovery of possession of real property. They alleged that Donata, as administratrix of
theestate of Maximino, through fraud and misrepresentation, in breach of trust, and without theknowledge
of the other heirs, succeeded in registering in her name the real properties belongingto the intestate
estate of Maximino. Furthermore, the facts show that after Donatas death,Erlinda took possession of
the real properties, and continued to manage the same and collectthe rental fees thereon. Donata and,
subsequently, Erlinda, were so obviously exercising rightsof ownership over the real properties, in
exclusion of all others, which must have already put theheirs of Maximino on guard if they truly believed
that they still had rights thereto.The heirs of Maximino knew he died on 1 May 1952. They even attended
his wake. They did notoffer any explanation as to why they had waited 33 years from Maximinos death
before one ofthem, Silverio, filed a Petition for Letters of Administration for the intestate estate of
Maximinoon 21 January 1985. After learning that the intestate estate of Maximino was already settled
inaspecial proceeding, they waited another two years, before instituting, on 3 March 1987,
acomplaint for partition, annulment and recovery of the real property belonging to the estate
ofMaximino.Issue: Whether or not respondents right to recover possession of the disputed properties,
based onimplied trust, is also barred by laches.Held:Yes. Respondents right to recover possession of the
disputed properties, based on impliedtrust, is also barred by laches. Considering the circumstances in the
afore-quoted paragraphs, as well as respondents conductbefore this Court, particularly the belated
submission of evidence and argument of new issues,respondents are consistently displaying a penchant
for delayed action, without any profferedreason or justification for such delay. It is well established that the
law serves those who are vigilant and diligent and not those whosleep when the law requires them to act.
The law does not encourage laches, indifference,negligence or ignorance. On the contrary, for a
party to deserve the considerations of thecourts, he must show that he is not guilty of any of the
aforesaid failings.In view of the foregoing, the Motion for Reconsideration is DENIED

A.M. No. P-01-1448

June 25, 2013
(Formerly OCA IPI No. 99-664-P)
RODOLFO C. SABIDONG, Complainant,
vs.
NICOLASITO S. SOLAS (Clerk of Court IV), Respondent.
DECISION
VILLARAMA, JR., J.:
The present administrative case stemmed from a sworn letter-complaint 1 dated May 29, 1999 filed before
this Court by Rodolfo C. Sabidong (complainant) charging respondent Nicolasito S. Solas, Clerk of Court
IV, Municipal Trial Court in Cities (MTCC), Iloilo City with grave and serious misconduct, dishonesty,
oppression and abuse of authority.
The Facts
Trinidad Sabidong, complainants mother, is one of the longtime occupants of a parcel of land, designated
as Lot 11 (Lot 1280-D-4-11 of consolidation-subdivision plan [LRC] Pcs-483) originally registered in the

name of C. N. Hodges and situated at Barangay San Vicente, Jaro, Iloilo City.2 The Sabidongs are in
possession of one-half portion of Lot 11 of the said Estate (Hodges Estate), as the other half-portion was
occupied by Priscila Saplagio. Lot 11 was the subject of an ejectment suit filed by the Hodges Estate,
docketed as Civil Case No. 14706 of the MTCC Iloilo City, Branch 4 ("Rosita R. Natividad in her capacity
as Administratrix of C.N. Hodges Estate, plaintiff vs. Priscila Saplagio, defendant"). On May 31, 1983, a
decision was rendered in said case ordering the defendant to immediately vacate the portion of Lot 11
leased to her and to pay the plaintiff rentals due, attorneys fees, expenses and costs. 3 At the time,
respondent was the Clerk of Court III of MTCC, Branch 3, Iloilo City.
Sometime in October 1984, respondent submitted an Offer to Purchase on installment Lots 11 and 12. In
a letter dated January 7, 1986, the Administratrix of the Hodges Estate rejected respondents offer in view
of an application to purchase already filed by the actual occupant of Lot 12, "in line with the policy of the
Probate Court to give priority to the actual occupants in awarding approval of Offers". While the check for
initial down payment tendered by respondent was returned to him, he was nevertheless informed that he
may file an offer to purchase Lot 11 and that if he could put up a sufficient down payment, the Estate
could immediately endorse it for approval of the Probate Court so that the property can be awarded to him
"should the occupant fail to avail of the priority given to them." 4
The following day, January 8, 1986, respondent again submitted an Offer to Purchase Lot 11 with an area
of 234 square meters for the amount of P35,100. Under the Order dated November 18, 1986 issued by
the probate court (Regional Trial Court of Iloilo, Branch 27) in Special Proceedings No. 1672 ("Testate
Estate of the Late Charles Newton Hodges, Rosita R. Natividad, Administratrix"), respondents Offer to
Purchase Lot 11 was approved upon the courts observation that the occupants of the subject lots "have
not manifested their desire to purchase the lots they are occupying up to this date and considering time
restraint and considering further, that the sales in favor of the x x x offerors are most beneficial to the
estate x x x". On January 21, 1987, the probate court issued another Order granting respondents motion
for issuance of a writ of possession in his favor. The writ of possession over Lot 11 was eventually issued
on June 27, 1989.5
On November 21, 1994, a Deed of Sale With Mortgage covering Lot 11 was executed between
respondent and the Hodges Estate represented by its Administratrix, Mrs. Ruth R. Diocares. Lot 11 was
thereby conveyed to respondent on installment for the total purchase price of P50,000.
Consequently, Transfer Certificate of Title (TCT) No. T-11836 in the name of C. N. Hodges was cancelled
and a new certificate of title, TCT No. T-107519 in the name of respondent was issued on December 5,
1994. Lot 11 was later subdivided into two lots, Lots 11-A and 11-B for which the corresponding titles (TCT
Nos. T-116467 and T-116468), also in the name of respondent, were issued on February 28, 1997. 6
On motion of Ernesto Pe Benito, Administrator of the Hodges Estate, a writ of demolition was issued on
March 3, 1998 by the probate court in favor of respondent and against all adverse occupants of Lot 11. 7
On June 14, 1999, this Court received the sworn letter-complaint asserting that as court employee
respondent cannot buy property in litigation (consequently he is not a buyer in good faith), commit
deception, dishonesty, oppression and grave abuse of authority. Complainant specifically alleged the
following:
3. Complainant and his siblings, are possessors and occupants of a parcel of land situated at
Brgy. San Vicente, Jaro, Iloilo City, then identified as Lot No. 1280-D-4-11, later consolidated and

subdivided and became known as Lot 11, then registered and titled in the name of Charles
Newton Hodges. The Sabidong family started occupying this lot in 1948 and paid their monthly
rentals until sometime in 1979 when the Estate of Hodges stopped accepting rentals. x x x
4. Upon knowing sometime in 1987 that the property over which their house is standing, was
being offered for sale by the Estate, the mother of complainant, TRINIDAD CLAVERIO
SABIDONG (now deceased), took interest in buying said property, Lot 11;
5. TRINIDAD CLAVERIO SABIDONG, was then an ordinary housekeeper and a laundrywoman,
who never received any formal education, and did not even know how to read and write. When
Trinidad Claverio Sabidong, together with her children and the complainant in this case, tried to
negotiate with the Estate for the sale of the subject property, they were informed that all papers
for transaction must pass through the respondent in this case, Nicolasito Solas. This is unusual,
so they made inquiries and they learned that, Nicolasito Solas was then the Clerk of Court 111,
Branch 3, Municipal Trial Court in Cities, Iloilo City and presently, the City Sheriff of Iloilo City;
6. The respondent Nicolasito Solas, then Clerk of Court III, MTCC, Iloilo City, has knowledge, by
reason of his position that in 1983 Hodges Estate was ejecting occupants of its land. x x x Taking
advantage of this inside information that the land subject of an ejectment case in the Municipal
Trial Court in Cities, Iloilo City, whom respondent is a Clerk of Court III, the respondent
surreptitiously offered to buy the said lot in litigation. x x x
7. Complainant nor any member of his family did not know that as early as 1984, the respondent
had offered to purchase the subject lot from the estate x x x. After receiving the notice of denial of
his offer to purchase, dated January 7, 1986, respondent made a second offer to purchase the
subject property the following day, January 8, 1986, knowing fully well that the subject property
was being occupied. x x x
8. Because of this denial, respondent met with the family of the complainant and negotiated for
the sale of the property and transfer of the title in favor of the latter. Respondent made the
complainant and his family believed that he is the representative of the estate and that he needed
a downpayment right away. All the while, the Sabidong family (who were carpenters,
laundrywomen, a janitor, persons who belong to the underprivileged) relied on the
representations of the respondent that he was authorized to facilitate the sale, with more reason
that respondent represented himself as the City Sheriff;
9. That between 1992-1993, a sister of the complainant who was fortunate to have worked
abroad, sent the amount of Ten Thousand (P10,000.00) Pesos to complainants mother, to be
given to respondent Nicolasito Solas. x x x After receiving the money, respondent assured the
Sabidong family that they will not be ejected from the lot, he being the City Sheriff will take care of
everything, and taking advantage of the illiteracy of Trinidad Claverio Sabidong, he did not issue
any receipt;
10. True enough, they were not ejected instead it took the respondent some time to see them
again and demanded additional payment. In the meanwhile, the complainant waited for the
papers of the supposed sale and transfer of title, which respondent had promised after receiving
the downpayment of P10,000.00;

11. That sometime again in 1995, respondent again received from the mother of complainant the
amount of Two Thousand (P2,000.00) Pesos, allegedly for the expenses of the documentation of
sale and transfer of title, and again respondent promised that the Sabidong family will not be
ejected;
12. To the prejudice and surprise of the complainant and his family, respondent was able to
secure an order for the approval of his offer to purchase x x x in Special Proceedings No. 1672 x
x x;
13. Worse, respondent moved for the issuance of a Writ of Possession in his favor, which the
probate court acted favorably x x x. A writ of possession was issued on June 27, 1989 x x x;
14. x x x respondent took advantage of the trust and confidence which the Sabidong family has
shown, considering that respondent was an officer of the court and a City Sheriff at that. The
complainant and his family thought that respondent, being a City Sheriff, could help them in the
transfer of the title in their favor. Never had they ever imagined that while respondent had been
receiving from them hard-earned monies purportedly for the sale of the subject property,
respondent was also exercising acts of ownership adverse to the interest of the complainant and
his family;
15. Being an officer of the court and supposed to be an embodiment of fairness and justice,
respondent acted with malice, with grave abuse of confidence and deceit when he represented
that he can facilitate the sale and titling of the subject property in favor of the complainant and his
family;
16. That when several thousands of pesos were given to the respondent as payment for the
same and incidental expenses relative thereto, he was able to cause the transfer of the title in his
favor. x x x;
17. After the death of Trinidad Claverio Sabidong x x x the respondent received from the
complainant the amount of Five Thousand (P5,000.00) Pesos x x x When a receipt was
demanded, respondent refused to issue one, and instead promised and assured the complainant
that they will not be ejected;
xxxx
19. The complainant again, through his sister-in-law, Socorro Sabidong, delivered and gave to the
respondent the amount of Three Thousand (P3,000.00) Pesos as expenses for the subdivision of
the subject lot. The respondent facilitated the subdivision and after the same was approved, the
complainant did not know that two (2) titles were issued in the name of the respondent. x x x;
20. Meanwhile, respondent prepared a Contract to Sell, for the complainant and his neighbor
Norberto Saplagio to affix their signatures, pursuant to their previous agreement for the buyers to
avail of a housing loan with the Home Development Mutual Fund (PAG-IBIG). Complainant
attended the seminar of the HDMF for seven (7) times, in his desire to consummate the sale.
However, when the complainant affixed his signature in the contract, he was surprised that the
owner of the subject property was the respondent. When complainant raised a question about
this, respondent assured complainant that everything was alright and that sooner complainant will

be the owner of the property. Complainant and his family, all these years, had believed and
continued to believe that the owner was the estate of Hodges and that respondent was only the
representative of the estate;
21. The Contract to Sell, appeared to have been notarized on June 3, 1996, however, no copy
thereof was given to the complainant by the respondent. Respondent then, took the papers and
documents required by the HDMF to be completed, from the complainant allegedly for the
purpose of personally filing the same with the HDMF. Complainant freely and voluntarily delivered
all pertinent documents to the respondent, thinking that respondent was helping in the fast and
easy release of the loan. While the said documents were in the possession of the respondent, he
never made any transaction with the HDMF, worse, when complainant tried to secure a copy of
the Contract to Sell, the copy given was not signed by the Notary Public, x x x;
22. The complainant [was] shocked to learn that respondent had canceled the sale and that
respondent refused to return the documents required by the HDMF. Respondent claimed that as
Sheriff, he can cause the demolition of the house of the complainant and of his family.
Respondent threatened the complainant and he is capable of pursuing a demolition order and
serve the same with the assistance of the military. x x x;
23. After learning of the demolition order, complainant attempted to settle the matter with the
respondent, however, the same proved futile as respondent boasted that the property would now
cost at Four Thousand Five Hundred (P4,500.00) Pesos;
24. The threats of demolition is imminent. Clearly, complainant and his family were duped by the
respondent and are helpless victims of an officer of the court who took advantage of their good
faith and trust. Complainant later was informed that the subject property was awarded to the
respondent as his Sheriffs Fees, considering that respondent executed the decisions in
ejectment cases filed by the Hodges estate against the adverse occupants of its vast properties;
25. A civil case for the Annulment of Title of the respondent over the subject property is pending
before the Regional Trial Court of Iloilo, Branch 37 and a criminal complaint for Estafa is also
pending preliminary investigation before the Office of the City Prosecutor of Iloilo City, known as
I.S. No. 1559-99, both filed [by] the complainant against the respondent. 8
Acting on the complaint, Court Administrator Alfredo L. Benipayo issued a 1st Indorsement 9 dated July 8,
1999, requiring respondent to file his comment on the Complaint dated May 29, 1999. On October 21,
1999, respondent submitted his Comment.10
In a Resolution11 dated July 19, 1999, Public Prosecutor Constantino C. Tubilleja dismissed the Estafa
charge against respondent for insufficiency of evidence.
On November 29, 2000, Court Administrator Benipayo issued an Evaluation and
Recommendation12 finding respondent guilty of violating Article 149113 of the Civil Code. Said rule
prohibits the purchase by certain court officers of property and rights in litigation within their jurisdiction.
Court Administrator Benipayo recommended that:
1. this administrative complaint be treated as an administrative matter;

2. respondent Nicolasito S. Solas, Clerk of Court IV, OCC, MTCC, Iloilo City be SUSPENDED for
six (6) months, with warning that a repetition of the same offense in the future will be dealt with
more severely;
3. inasmuch as there are factual issues regarding the delivery of substantial amounts which
complainant alleged and which defendant denied, this issue should be investigated and the
Executive Judge of the Regional Trial Court of Iloilo City should be designated to hear the
evidence and to make a report and recommendation within sixty (60) days from receipt. 14
In a Resolution15 dated January 22, 2001, this Court adopted the recommendation of the Court
Administrator to treat the present administrative action as a regular administrative matter and to designate
the Executive Judge of the RTC of Iloilo City to hear the evidence of the parties.
The Court, however, noted without action the Court Administrators recommendation to suspend
respondent for six months.
On March 13, 2001, Acting Court Administrator Zenaida N. Elepao forwarded the records of this case to
Executive Judge Tito G. Gustilo of the Iloilo City RTC.16 In a Resolution17 dated July 18, 2001, the Court
referred this case to the Executive Judge of the RTC of Iloilo City for investigation, report and
recommendation within 60 days from notice. By Order18 dated August 30, 2001, Executive Judge Gustilo
set the case for reception of evidence.
On March 19, 2004, the RTC of Iloilo, Branch 37, dismissed the case for annulment of title, damages and
injunction against respondent for lack of merit.19
In a Resolution20 dated June 15, 2005, the Court resolved to reassign the instant administrative case to
Executive Judge Rene S. Hortillo for investigation, report and recommendation within 60 days from
notice. In a Letter21dated September 15, 2005, Executive Judge Hortillo informed the Court that per the
records, the parties have presented their testimonial and documentary evidence before retired Executive
Judge Tito G. Gustilo.
On September 12, 2005, Executive Judge Hortillo required the parties to file their respective memoranda
within 60 days from notice, upon submission of which the case shall be deemed submitted for
resolution.22
In his Memorandum,23 respondent maintained that his purchase of the subject land is not covered by the
prohibition in paragraph 5, Article 1491 of the Civil Code. He pointed out that he bought Lot 11-A a decade
after the MTCC of Iloilo, Branch 3, had ordered the ejectment of Priscila Saplagio and Trinidad Sabidong
from the subject lot. He insisted that public trust was observed when complainant was accorded his right
of first refusal in the purchase of Lot 11-A, albeit the latter failed to avail said right. Asserting that he is a
buyer in good faith and for value, respondent cited the dismissal of the cases for Estafa and annulment of
title and damages which complainant filed against him.
On September 10, 2007, respondent compulsorily retired from service. Prior to this, he wrote then Senior
Deputy Court Administrator Zenaida N. Elepao, requesting for the release of his retirement benefits
pending resolution of the administrative cases against him. 24 In a Memorandum25 dated September 24,
2007, Senior Deputy Court Administrator Elepao made the following recommendations:

a) The request of Nicolasito S. Solas, former Clerk of Court, MTCC, Iloilo City for partial release
of his retirement benefits be GRANTED; and
b) Atty. Lilian Barribal Co, Chief, Financial Management Office, Office of the Court Administrator
be DIRECTED to (1) WITHHOLD the amount of Two Hundred Thousand Pesos (P200,000.00)
from the retirement benefits of Nicolasito S. Solas to answer for any administrative liability that
the Court may find against him in A.M. No. P-01-1448 (Formerly Administrative Matter OCA IPI
No. 99-664-P); OCA IPI No. 99-659-P; OCA IPI No. 99-670-P; and OCA IPI No. 99-753-P; and (2)
RELEASE the balance of his retirement benefits.26
Eventually, the case was assigned to Judge Roger B. Patricio, the new Executive Judge of the Iloilo City
RTC for investigation, report and recommendation.
On June 2, 2008, Judge Patricio submitted his final Report and Recommendation 27 finding respondent
liable for grave misconduct and dishonesty under A.M. No. 03-06-13-SC or the Code of Conduct for Court
Personnel. Based on the evidence presented, Judge Patricio concluded that respondent misappropriated
the money which he received for the filing of complainants loan application. Such money could not have
been used for the partition of Lot No. 1280-D-4-11 since the same was already subdivided into Lots 11-A
and 11-B when respondent presented the Contract to Sell to complainant. And despite respondents
promise to keep complainant and his family in peaceful possession of the subject property, respondent
caused the issuance of a writ of demolition against them. Thus, Judge Patricio recommended the
forfeiture of respondents salary for six months to be deducted from his retirement benefits.
In a Resolution28 dated September 29, 2008, the Court noted Judge Patricios Investigation Report and
referred the same to the Office of the Court Administrator (OCA) for evaluation, report and
recommendation.
Findings and Recommendation of the OCA
In a Memorandum29 dated January 16, 2009, then Court Administrator Jose P. Perez found respondent
liable for serious and grave misconduct and dishonesty and recommended the forfeiture of respondents
salary for six months, which shall be deducted from his retirement benefits.
The Court Administrator held that by his unilateral acts of extinguishing the contract to sell and forfeiting
the amounts he received from complainant and Saplagio without due notice, respondent failed to act with
justice and equity. He found respondents denial to be anchored merely on the fact that he had not issued
receipts which was belied by his admission that he had asked money for the expenses of partitioning Lot
11 from complainant and Saplagio. Since their PAG-IBIG loan applications did not materialize,
complainant should have returned the amounts given to him by complainant and Saplagio.
On February 11, 2009, the Court issued a Resolution 30 requiring the parties to manifest whether they are
willing to submit the case for decision on the basis of the pleadings and records already filed with the
Court. However, the copy of the Resolution dated February 11, 2009 which was sent to complainant was
returned unserved with the postal carriers notation "RTS-Deceased." Meanwhile, in a Compliance 31 dated
August 24, 2009, respondent expressed his willingness to submit the case for decision and prayed for an
early resolution of the case.
Our Ruling

Article 1491, paragraph 5 of the Civil Code prohibits court officers such as clerks of court from acquiring
property involved in litigation within the jurisdiction or territory of their courts. Said provision reads:
Article 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either
in person or through the mediation of another:
xxxx
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and
employees connected with the administration of justice, the property and rights in litigation or levied upon
an execution before the court within whose jurisdiction or territory they exercise their respective functions;
this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in which they may take part by virtue of their
profession.
x x x x (Emphasis supplied.)
The rationale advanced for the prohibition is that public policy disallows the transactions in view of the
fiduciary relationship involved, i.e., the relation of trust and confidence and the peculiar control exercised
by these persons.32 "In so providing, the Code tends to prevent fraud, or more precisely, tends not to give
occasion for fraud, which is what can and must be done." 33
For the prohibition to apply, the sale or assignment of the property must take place during the pendency
of the litigation involving the property.34 Where the property is acquired after the termination of the case,
no violation of paragraph 5, Article 1491 of the Civil Code attaches. 35
In the case at bar, when respondent purchased Lot 11-A on November 21, 1994, the Decision in Civil
Case No. 14706 which was promulgated on May 31, 1983 had long become final. Be that as it may, it can
not be said that the property is no longer "in litigation" at that time considering that it was part of the
Hodges Estate then under settlement proceedings (Sp. Proc. No. 1672).
A thing is said to be in litigation not only if there is some contest or litigation over it in court, but also from
the moment that it becomes subject to the judicial action of the judge. 36 A property forming part of the
estate under judicial settlement continues to be subject of litigation until the probate court issues an order
declaring the estate proceedings closed and terminated. The rule is that as long as the order for the
distribution of the estate has not been complied with, the probate proceedings cannot be deemed closed
and terminated.37 The probate court loses jurisdiction of an estate under administration only after the
payment of all the debts and the remaining estate delivered to the heirs entitled to receive the
same.38 Since there is no evidence to show that Sp. Proc. No. 1672 in the RTC of Iloilo, Branch 27, had
already been closed and terminated at the time of the execution of the Deed of Sale With Mortgage dated
November 21, 1994, Lot 11 is still deemed to be "in litigation" subject to the operation of Article 1491 (5) of
the Civil Code.
This notwithstanding, we hold that the sale of Lot 11 in favor of respondent did not violate the rule on
disqualification to purchase property because Sp. Proc. No. 1672 was then pending before another court
(RTC) and not MTCC where he was Clerk of Court.
On the charges against the respondent, we find him liable for dishonesty and grave misconduct.

Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful
behavior as well as gross negligence by a public officer. To warrant dismissal from service, the
misconduct must be grave, serious, important, weighty, momentous and not trifling. The misconduct must
imply wrongful intention and not a mere error of judgment. The misconduct must also have a direct
relation to and be connected with the performance of the public officers official duties amounting either to
maladministration or willful, intentional neglect, or failure to discharge the duties of the office. 39
Dishonesty is the "disposition to lie, cheat, deceive, defraud or betray; untrustworthiness; lack of integrity;
lack of honesty, probity, or integrity in principle; and lack of fairness and straightforwardness." 40
In this case, respondent deceived complainants family who were led to believe that he is the legal
representative of the Hodges Estate, or at least possessed of such power to intercede for overstaying
occupants of the estates properties like complainant. Boasting of his position as a court officer, a City
Sheriff at that, complainants family completely relied on his repeated assurance that they will not be
ejected from the premises. Upon learning that the lot they were occupying was for sale and that they had
to negotiate for it through respondent, complainants family readily gave the amounts he demanded and,
along with Saplagio, complied with the requirements for a loan application with PAG-IBIG. All the while
and unknown to complainants family, respondent was actually working to acquire Lot 11 for himself.
Thus, while respondent was negotiating with the Hodges Estate for the sale of the property to him, he
collected as down payment P5,000 from complainants family in July 1986. Four months later, on
November 18, 1986, the probate court approved respondents offer to purchase Lot 11. The latter
received further down payment from complainant in the amount of P10,000 between 1992 and 1993, or
before the Deed of Sale with Mortgage 41dated November 21, 1994 could be executed in respondents
favor.
Thereafter, respondent demanded P3,000 from complainant supposedly for the subdivision of Lot 11
between the latter and the Saplagios. Yet, it was not until respondent obtained title over said lot that the
same was subdivided into Lots 11-A and 11-B. The records42 of the case show that the Subdivision Plan
dated April 25, 1996, duly approved by the Land Management Services (DENR) subdividing Lot 11 into
sublots 11-A and 11-B, was inscribed on February 28, 1997 two years after TCT No. T-107519 covering
Lot 11 was issued in respondents name on December 5, 1994.
Finally, in 1995, respondent received the amount of P2,000 to defray the expenses for documentation and
transfer of title in complainants name. In the latter instance, while it may be argued that respondent
already had the capacity to sell the subject property, the sum of all the circumstances belie an honest
intention on his part to convey Lot 11-A to complainant. We note the inscription in TCT No. T-11836 43 in
the name of C.N. Hodges that respondent executed a Request dated February 19, 1997 "for the issuance
of separate titles in the name of the registered owner." 44 Soon after, TCT No. T-11646745 covering Lot 11-A
and TCT No. T-11646846 covering Lot 11-B were issued in the name of respondent on February 28, 1997
only eight months after he executed the Contract to Sell 47 in favor of complainant on June 3, 1996.
Respondents bare denials were correctly disregarded by the Court Administrator in the light of his own
admission that he indeed asked money from both complainant and Saplagio. The evidence on record
clearly established that by misrepresenting himself as the estates representative and as a court officer
having the power to protect complainants family from eviction, respondent was able to collect sums
totaling P20,000 from complainants family. Even after the latter realized they were duped since
respondent was already the owner of Lot 11, they still offered to buy the property from him. Respondent,

however, changed his mind and no longer wanted to sell the property after nothing happened to the loan
applications of complainant and Saplagio. This subsequent unilateral cancellation by respondent of the
contract to sell with complainant may have been an afterthought, and plainly unjustified, based merely on
his own assumption that complainant could not make full payment. But it did not negate the deception and
fraudulent acts perpetrated against complainants family who were forced into submission by the constant
threat of eviction. Such acts constitute grave misconduct for which respondent should be held
answerable.
In Re: Complaint Filed by Paz De Vera Lazaro Against Edna Magallanes, Court Stenographer III, RTC Br.
28 and Bonifacio G. Magallanes, Process Server, RTC Br. 30, Bayombong, Nueva Vizcaya, 48 the Court
stressed that to preserve decency within the judiciary, court personnel must comply with just contractual
obligations, act fairly and adhere to high ethical standards. In that case, we said that court employees are
expected to be paragons of uprightness, fairness and honesty not only in their official conduct but also in
their personal dealings, including business and commercial transactions to avoid becoming the courts
albatross of infamy.49
More importantly, Section 4(c) of Republic Act No. 671350 or the Code of Conduct and Ethical Standards
for Public Officials and Employees mandates that public officials and employees shall remain true to the
people at all times. They must act with justness and sincerity and shall not discriminate against anyone,
especially the poor and the underprivileged.1wphi1 They shall at all times respect the rights of others,
and shall refrain from doing acts contrary to law, good morals, good customs, public policy, public order,
public safety and public interest.
Under Section 52,51 Rule IV of the Uniform Rules on Administrative Cases in the Civil Service, dishonesty
and grave misconduct are classified as grave offenses with the corresponding penalty of dismissal for the
first offense. Section 58(a) states that the penalty of dismissal shall carry with it the cancellation of
eligibility, forfeiture of retirement benefits, and the perpetual disqualification for reemployment in the
government service.
Section 53 further provides that mitigating circumstances attendant to the commission of the offense
should be considered in the determination of the penalty to be imposed on the erring government
employee. However, no such mitigating circumstance had been shown. On the contrary, respondent had
been previously held administratively liable for irregularities in the performance of his duties as Clerk of
Court. In A.M. No. P-01-1484,52 this Court imposed on respondent a fine of P5,000 for acting imprudently
in notarizing documents and administering oath on matters alien to his official duties. And in A.M. Nos. P08-2567 (formerly OCA IPI No. 99-670-P) and P-08-2568 (formerly OCA IPI No. 99-753-P), 53 respondent
was found liable for simple misconduct and ordered to pay a fine equivalent to his three (3) months salary
to be deducted from his retirement benefits.
Since respondent had compulsorily retired from service on September 10, 2007, for this additional
administrative case he should be fined in an amount equivalent to his salary for six months which shall
likewise be deducted from his retirement benefits.
WHEREFORE, the Court finds respondent Nicolasito S. Solas, retired Clerk of Court IV, Municipal Trial
Court in Cities, Iloilo City, LIABLE FOR GRAVE MISCONDUCT AND DISHONESTY. Respondent is
FINED in an amount equivalent to his salary for six (6) months to be deducted from his retirement
benefits.

SO ORDERED.
CASE DIGEST
Sabidong vs. SolasA.M. No. P-01-1448, June 25, 2013Facts:Trinidad Sabidong, complainants mother, is
one of the longtime occupants of a parcel ofland, designated as Lot 11 originally registered in the name of
C. N. Hodges and situated atJaro, Iloilo City. The Sabidongs are in possession of one-half portion of Lot
11 of the saidHodges Estate, as the other half-portion was occupied by Priscila Saplagio. In
1983ejectment suit however Saplagio was ordered to vacate the portion of Lot 11 leased to her.In 1984,
respondent who was the Clerk of Court III of MTCC, Branch 3, Iloilo City Offeredto Purchase on
installment Lots 11 and 12. The Administratrix of the Hodges Estate rejectedrespondents because the
actual occupant of Lot 12 manifested their intention to buy it. Hewas nevertheless informed that he may
file an offer to purchase Lot 11 "should the occupantfail to avail of the priority given to them which the
respondent immediately made. The probate court (Regional Trial Court of Iloilo, Branch 27) in Special
Proceedings No.1672 ("Testate Estate of the Late Charles Newton Hodges, Rosita R.
Natividad,Administratrix"), approved the offer upon the courts observation that the occupants of
thesubject lots "have not manifested their desire to purchase the lots they are occupying up tothis date
and considering time restraint and considering further, that the sales in favor of the xx x offerors are most
beneficial to the estate x x x". Consequently the title of the lot was transferred to the respondent. Later on
a writ ofdemolition was issued by the probate court in favor of respondent and against all
adverseoccupants of Lot 11.
In the case at bar, when respondent purchased Lot 11-A on November 21, 1994, the Decisionin Civil
Case No. 14706 which was promulgated on May 31, 1983 had long become final. Bethat as it may, it can
not be said that the property is no longer "in litigation" at that timeconsidering that it was part of the
Hodges Estate then under settlement proceedings (Sp. Proc.No. 1672).A thing is said to be in litigation
not only if there is some contest or litigation over it in court,but also from the moment that it becomes
subject to the judicial action of the judge.36 Aproperty forming part of the estate under judicial settlement
continues to be subject oflitigation until the probate court issues an order declaring the estate proceedings
closed andterminated. The rule is that as long as the order for the distribution of the estate has not
beencomplied with, the probate proceedings cannot be deemed closed and terminated.37 Theprobate
court loses jurisdiction of an estate under administration only after the payment of allthe debts and the
remaining estate delivered to the heirs entitled to receive the same.38 Sincethere is no evidence to show
that Sp. Proc. No. 1672 in the RTC of Iloilo, Branch 27, hadalready been closed and terminated at the
time of the execution of the Deed of Sale WithMortgage dated November 21, 1994, Lot 11 is still deemed
to be "in litigation" subject to theoperation of Article 1491 (5) of the Civil Code.This notwithstanding, we
hold that the sale of Lot 11 in favor of respondent did not violatethe rule on disqualification to purchase
property because Sp. Proc. No. 1672 was thenpending before another court (RTC) and not MTCC where
he was Clerk of Court.

G.R. No. 156407, January 15, 2014

THELMA M. ARANAS, Petitioner, v. TERESITA V. MERCADO, FELIMON V. MERCADO, CARMENCITA
M. SUTHERLAND, RICHARD V. MERCADO, MA. TERESITA M. ANDERSON, AND FRANKLIN L.
MERCADO, Respondents.
DECISION
BERSAMIN, J.:
The probate court is authorized to determine the issue of ownership of properties for purposes of their
inclusion or exclusion from the inventory to be submitted by the administrator, but its determination shall
only be provisional unless the interested parties are all heirs of the decedent, or the question is one of
collation or advancement, or the parties consent to the assumption of jurisdiction by the probate court and
the rights of third parties are not impaired. Its jurisdiction extends to matters incidental or collateral to the
settlement and distribution of the estate, such as the determination of the status of each heir and whether
property included in the inventory is the conjugal or exclusive property of the deceased spouse.
Antecedents
Emigdio S. Mercado (Emigdio) died intestate on January 12, 1991, survived by his second wife, Teresita
V. Mercado (Teresita), and their five children, namely: Allan V. Mercado, Felimon V. Mercado, Carmencita
M. Sutherland, Richard V. Mercado, and Maria Teresita M. Anderson; and his two children by his first
marriage, namely: respondent Franklin L. Mercado and petitioner Thelma M. Aranas (Thelma).
Emigdio inherited and acquired real properties during his lifetime. He owned corporate shares in Mervir
Realty Corporation (Mervir Realty) and Cebu Emerson Transportation Corporation (Cebu Emerson). He
assigned his real properties in exchange for corporate stocks of Mervir Realty, and sold his real property

in Badian, Cebu (Lot 3353 covered by Transfer Certificate of Title No. 3252) to Mervir Realty.
On June 3, 1991, Thelma filed in the Regional Trial Court (RTC) in Cebu City a petition for the
appointment of Teresita as the administrator of Emigdios estate (Special Proceedings No. 3094
CEB).1 The RTC granted the petition considering that there was no opposition. The letters of
administration in favor of Teresita were issued on September 7, 1992.
As the administrator, Teresita submitted an inventory of the estate of Emigdio on December 14, 1992 for
the consideration and approval by the RTC. She indicated in the inventory that at the time of his death,
Emigdio had left no real properties but only personal properties worth P6,675,435.25 in all, consisting of
cash of P32,141.20; furniture and fixtures worth P20,000.00; pieces of jewelry valued at P15,000.00;
44,806 shares of stock of Mervir Realty worth P6,585,585.80; and 30 shares of stock of Cebu Emerson
worth P22,708.25.2
Claiming that Emigdio had owned other properties that were excluded from the inventory, Thelma moved
that the RTC direct Teresita to amend the inventory, and to be examined regarding it. The RTC granted
Thelmas motion through the order of January 8, 1993.
On January 21, 1993, Teresita filed a compliance with the order of January 8, 1993, 3 supporting her
inventory with copies of three certificates of stocks covering the 44,806 Mervir Realty shares of stock; 4 the
deed of assignment executed by Emigdio on January 10, 1991 involving real properties with the market
value of P4,440,651.10 in exchange for 44,407 Mervir Realty shares of stock with total par value of
P4,440,700.00;5 and the certificate of stock issued on January 30, 1979 for 300 shares of stock of Cebu
Emerson worth P30,000.00.6
On January 26, 1993, Thelma again moved to require Teresita to be examined under oath on the
inventory, and that she (Thelma) be allowed 30 days within which to file a formal opposition to or
comment on the inventory and the supporting documents Teresita had submitted.
On February 4, 1993, the RTC issued an order expressing the need for the parties to present evidence
and for Teresita to be examined to enable the court to resolve the motion for approval of the
inventory.7cralawred
On April 19, 1993, Thelma opposed the approval of the inventory, and asked leave of court to examine
Teresita on the inventory.
With the parties agreeing to submit themselves to the jurisdiction of the court on the issue of what
properties should be included in or excluded from the inventory, the RTC set dates for the hearing on that
issue.8cralawlawlibrary
Ruling of the RTC
After a series of hearings that ran for almost eight years, the RTC issued on March 14, 2001 an order
finding and holding that the inventory submitted by Teresita had excluded properties that should be
included, and accordingly ruled:
WHEREFORE, in view of all the foregoing premises and considerations, the Court hereby denies the
administratrixs motion for approval of inventory. The Court hereby orders the said administratrix to redo
the inventory of properties which are supposed to constitute as the estate of the late Emigdio S. Mercado
by including therein the properties mentioned in the last five immediately preceding paragraphs hereof
and then submit the revised inventory within sixty (60) days from notice of this order.
The Court also directs the said administratrix to render an account of her administration of the estate of
the late Emigdio S. Mercado which had come to her possession. She must render such accounting within
sixty (60) days from notice hereof.

SO ORDERED.9ChanRoblesVirtualawlibrary
On March 29, 2001, Teresita, joined by other heirs of Emigdio, timely sought the reconsideration of the
order of March 14, 2001 on the ground that one of the real properties affected, Lot No. 3353 located in
Badian, Cebu, had already been sold to Mervir Realty, and that the parcels of land covered by the deed of
assignment had already come into the possession of and registered in the name of Mervir
Realty.10 Thelma opposed the motion.
On May 18, 2001, the RTC denied the motion for reconsideration, 11 stating that there was no cogent
reason for the reconsideration, and that the movants agreement as heirs to submit to the RTC the issue
of what properties should be included or excluded from the inventory already estopped them from
questioning its jurisdiction to pass upon the issue.
Decision of the CA
Alleging that the RTC thereby acted with grave abuse of discretion in refusing to approve the inventory,
and in ordering her as administrator to include real properties that had been transferred to Mervir Realty,
Teresita, joined by her four children and her stepson Franklin, assailed the adverse orders of the RTC
promulgated on March 14, 2001 and May 18, 2001 by petition for certiorari, stating:
I
THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF JURISDICTION (sic)
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT THE REAL PROPERTY
WHICH WAS SOLD BY THE LATE EMIGDIO S. MERCADO DURING HIS LIFETIME TO A PRIVATE
CORPORATION (MERVIR REALTY CORPORATION) BE INCLUDED IN THE INVENTORY OF THE
ESTATE OF THE LATE EMIGDIO S. MERCADO.
II
THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF JURISDICTION (sic)
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT REAL PROPERTIES
WHICH ARE IN THE POSSESSION OF AND ALREADY REGISTERED IN THE NAME (OF) PRIVATE
CORPORATION (MERVIR REALTY CORPORATION) BE INCLUDED IN THE INVENTORY OF THE
ESTATE OF THE LATE EMIGDIO S. MERCADO.
III
THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT PETITIONERS ARE NOW
ESTOPPED FROM QUESTIONING ITS JURISDICTION IN PASSING UPON THE ISSUE OF WHAT
PROPERTIES SHOULD BE INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE EMIGDIO
MERCADO.12
On May 15, 2002, the CA partly granted the petition for certiorari, disposing as follows: 13
WHEREFORE, FOREGOING PREMISES CONSIDERED, this petition is GRANTED partially. The
assailed Orders dated March 14, 2001 and May 18, 2001 are hereby reversed and set aside insofar as
the inclusion of parcels of land known as Lot No. 3353 located at Badian, Cebu with an area of 53,301
square meters subject matter of the Deed of Absolute Sale dated November 9, 1989 and the various
parcels of land subject matter of the Deeds of Assignment dated February 17, 1989 and January 10, 1991
in the revised inventory to be submitted by the administratrix is concerned and affirmed in all other
respects.
SO ORDERED.

The CA opined that Teresita, et al. had properly filed the petition for certiorari because the order of the
RTC directing a new inventory of properties was interlocutory; that pursuant to Article 1477 of theCivil
Code, to the effect that the ownership of the thing sold shall be transferred to the vendee upon its
actual and constructive delivery, and to Article 1498 of the Civil Code, to the effect that the sale made
through a public instrument was equivalent to the delivery of the object of the sale, the sale by Emigdio
and Teresita had transferred the ownership of Lot No. 3353 to Mervir Realty because the deed of absolute
sale executed on November 9, 1989 had been notarized; that Emigdio had thereby ceased to have any
more interest in Lot 3353; that Emigdio had assigned the parcels of land to Mervir Realty as early as
February 17, 1989 for the purpose of saving, as in avoiding taxes with the difference that in the Deed of
Assignment dated January 10, 1991, additional seven (7) parcels of land were included; that as to the
January 10, 1991 deed of assignment, Mervir Realty had been even at the losing end considering that
such parcels of land, subject matter(s) of the Deed of Assignment dated February 12, 1989, were again
given monetary consideration through shares of stock; that even if the assignment had been based on
the deed of assignment dated January 10, 1991, the parcels of land could not be included in the inventory
considering that there is nothing wrong or objectionable about the estate planning scheme; that the
RTC, as an intestate court, also had no power to take cognizance of and determine the issue of title to
property registered in the name of third persons or corporation; that a property covered by the Torrens
system should be afforded the presumptive conclusiveness of title; that the RTC, by disregarding the
presumption, had transgressed the clear provisions of law and infringed settled jurisprudence on the
matter; and that the RTC also gravely abused its discretion in holding that Teresita, et al. were estopped
from questioning its jurisdiction because of their agreement to submit to the RTC the issue of which
properties should be included in the inventory.
The CA further opined as follows:
In the instant case, public respondent court erred when it ruled that petitioners are estopped from
questioning its jurisdiction considering that they have already agreed to submit themselves to its
jurisdiction of determining what properties are to be included in or excluded from the inventory to be
submitted by the administratrix, because actually, a reading of petitioners Motion for Reconsideration
dated March 26, 2001 filed before public respondent court clearly shows that petitioners are not
questioning its jurisdiction but the manner in which it was exercised for which they are not estopped, since
that is their right, considering that there is grave abuse of discretion amounting to lack or in excess of
limited jurisdiction when it issued the assailed Order dated March 14, 2001 denying the administratrixs
motion for approval of the inventory of properties which were already titled and in possession of a third
person that is, Mervir Realty Corporation, a private corporation, which under the law possessed a
personality distinct and separate from its stockholders, and in the absence of any cogency to shred the
veil of corporate fiction, the presumption of conclusiveness of said titles in favor of Mervir Realty
Corporation should stand undisturbed.
Besides, public respondent court acting as a probate court had no authority to determine the applicability
of the doctrine of piercing the veil of corporate fiction and even if public respondent court was not merely
acting in a limited capacity as a probate court, private respondent nonetheless failed to adjudge
competent evidence that would have justified the court to impale the veil of corporate fiction because to
disregard the separate jurisdictional personality of a corporation, the wrongdoing must be clearly and
convincingly established since it cannot be presumed.14
On November 15, 2002, the CA denied the motion for reconsideration of Teresita, et al. 15
Issue
Did the CA properly determine that the RTC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in directing the inclusion of certain properties in the inventory notwithstanding that
such properties had been either transferred by sale or exchanged for corporate shares in Mervir Realty by
the decedent during his lifetime?

Ruling of the Court

The appeal is meritorious.
I
Was certiorari the proper recourse
to assail the questioned orders of the RTC?
The first issue to be resolved is procedural. Thelma contends that the resort to the special civil action
for certiorari to assail the orders of the RTC by Teresita and her corespondents was not proper.
Thelmas contention cannot be sustained.
The propriety of the special civil action for certiorari as a remedy depended on whether the assailed
orders of the RTC were final or interlocutory in nature. In PahilaGarrido v. Tortogo,16 the Court
distinguished between final and interlocutory orders as follows:
The distinction between a final order and an interlocutory order is well known. The first disposes of the
subject matter in its entirety or terminates a particular proceeding or action, leaving nothing more to be
done except to enforce by execution what the court has determined, but the latter does not completely
dispose of the case but leaves something else to be decided upon. An interlocutory order deals with
preliminary matters and the trial on the merits is yet to be held and the judgment rendered. The test to
ascertain whether or not an order or a judgment is interlocutory or final is: does the order or judgment
leave something to be done in the trial court with respect to the merits of the case? If it does, the order or
judgment is interlocutory; otherwise, it is final.
The order dated November 12, 2002, which granted the application for the writ of preliminary injunction,
was an interlocutory, not a final, order, and should not be the subject of an appeal. The reason for
disallowing an appeal from an interlocutory order is to avoid multiplicity of appeals in a single action,
which necessarily suspends the hearing and decision on the merits of the action during the pendency of
the appeals. Permitting multiple appeals will necessarily delay the trial on the merits of the case for a
considerable length of time, and will compel the adverse party to incur unnecessary expenses, for one of
the parties may interpose as many appeals as there are incidental questions raised by him and as there
are interlocutory orders rendered or issued by the lower court. An interlocutory order may be the subject
of an appeal, but only after a judgment has been rendered, with the ground for appealing the order being
included in the appeal of the judgment itself.
The remedy against an interlocutory order not subject of an appeal is an appropriate special civil action
under Rule 65, provided that the interlocutory order is rendered without or in excess of jurisdiction or with
grave abuse of discretion. Then is certiorariunder Rule 65 allowed to be resorted to.
The assailed order of March 14, 2001 denying Teresitas motion for the approval of the inventory and the
order dated May 18, 2001 denying her motion for reconsideration were interlocutory. This is because the
inclusion of the properties in the inventory was not yet a final determination of their ownership. Hence,
the approval of the inventory and the concomitant determination of the ownership as basis for inclusion or
exclusion from the inventory were provisional and subject to revision at anytime during the course of the
administration proceedings.
In Valero Vda. De Rodriguez v. Court of Appeals,17 the Court, in affirming the decision of the CA to the
effect that the order of the intestate court excluding certain real properties from the inventory was
interlocutory and could be changed or modified at anytime during the course of the administration
proceedings, held that the order of exclusion was not a final but an interlocutory order in the sense that it
did not settle once and for all the title to the San Lorenzo Village lots. The Court observed there that:

The prevailing rule is that for the purpose of determining whether a certain property should or should not
be included in the inventory, the probate court may pass upon the title thereto but such determination is
not conclusive and is subject to the final decision in a separate action regarding ownership which may be
instituted by the parties (3 Morans Comments on the Rules of Court, 1970 Edition, pages 4489 and
473; Lachenal vs. Salas, L42257, June 14, 1976, 71 SCRA 262, 266).18 (Bold emphasis supplied)
To the same effect was De Leon v. Court of Appeals,19 where the Court declared that a probate court,
whether in a testate or intestate proceeding, can only pass upon questions of title provisionally, and
reminded, citing Jimenez v. Court of Appeals, that the patent reason is the probate courts limited
jurisdiction and the principle that questions of title or ownership, which result in inclusion or exclusion from
the inventory of the property, can only be settled in a separate action. Indeed, in the cited case
of Jimenez v. Court of Appeals,20 the Court pointed out:
All that the said court could do as regards the said properties is determine whether they should or should
not be included in the inventory or list of properties to be administered by the administrator. If there is a
dispute as to the ownership, then the opposing parties and the administrator have to resort to an ordinary
action for a final determination of the conflicting claims of title because the probate court cannot do
so. (Bold emphasis supplied)
On the other hand, an appeal would not be the correct recourse for Teresita, et al. to take against the
assailed orders. The final judgment rule embodied in the first paragraph of Section 1, Rule 41, Rules of
Court,21 which also governs appeals in special proceedings, stipulates that only the judgments, final
orders (and resolutions) of a court of law that completely disposes of the case, or of a particular matter
therein when declared by these Rules to be appealable may be the subject of an appeal in due course.
The same rule states that an interlocutory order or resolution (interlocutory because it deals with
preliminary matters, or that the trial on the merits is yet to be held and the judgment rendered) is
expressly made nonappealable.
Multiple appeals are permitted in special proceedings as a practical recognition of the possibility that
material issues may be finally determined at various stages of the special proceedings. Section 1, Rule
109 of the Rules of Court enumerates the specific instances in which multiple appeals may be resorted to
in special proceedings, viz:
Section 1. Orders or judgments from which appeals may be taken. An interested person may appeal in
special proceedings from an order or judgment rendered by a Court of First Instance or a Juvenile and
Domestic Relations Court, where such order or judgment:
(a) Allows or disallows a will;
(b) Determines who are the lawful heirs of a deceased person, or the distributive share of the estate to
which such person is entitled;
(c) Allows or disallows, in whole or in part, any claim against the estate of a deceased person, or any
claim presented on behalf of the estate in offset to a claim against it;
(d) Settles the account of an executor, administrator, trustee or guardian;
(e) Constitutes, in proceedings relating to the settlement of the estate of a deceased person, or the
administration of a trustee or guardian, a final determination in the lower court of the rights of the party
appealing, except that no appeal shall be allowed from the appointment of a special administrator; and
(f) Is the final order or judgment rendered in the case, and affects the substantial rights of the person
appealing, unless it be an order granting or denying a motion for a new trial or for reconsideration.
Clearly, the assailed orders of the RTC, being interlocutory, did not come under any of the instances in
which multiple appeals are permitted.

II
Did the RTC commit grave abuse of discretion
in directing the inclusion of the properties
in the estate of the decedent?
In its assailed decision, the CA concluded that the RTC committed grave abuse of discretion for including
properties in the inventory notwithstanding their having been transferred to Mervir Realty by Emigdio
during his lifetime, and for disregarding the registration of the properties in the name of Mervir Realty, a
third party, by applying the doctrine of piercing the veil of corporate fiction.
Was the CA correct in its conclusion?
The answer is in the negative. It is unavoidable to find that the CA, in reaching its conclusion, ignored the
law and the facts that had fully warranted the assailed orders of the RTC.
Under Section 6(a), Rule 78 of the Rules of Court, the letters of administration may be granted at the
discretion of the court to the surviving spouse, who is competent and willing to serve when the person
dies intestate. Upon issuing the letters of administration to the surviving spouse, the RTC becomes duty
bound to direct the preparation and submission of the inventory of the properties of the estate, and the
surviving spouse, as the administrator, has the duty and responsibility to submit the inventory within three
months from the issuance of letters of administration pursuant to Rule 83 of the Rules of Court, viz:
Section 1. Inventory and appraisal to be returned within three months. Within three (3) months after his
appointment every executor or administrator shall return to the court atrue inventory and appraisal of all
the real and personal estate of the deceased which has come into his possession or knowledge. In the
appraisement of such estate, the court may order one or more of the inheritance tax appraisers to give his
or their assistance.
The usage of the word all in Section 1, supra, demands the inclusion of all the real and personal
properties of the decedent in the inventory.22 However, the word all is qualified by the phrase which has
come into his possession or knowledge, which signifies that the properties must be known to the
administrator to belong to the decedent or are in her possession as the administrator. Section 1 allows no
exception, for the phrase true inventory implies that no properties appearing to belong to the decedent
can be excluded from the inventory, regardless of their being in the possession of another person or
entity.
The objective of the Rules of Court in requiring the inventory and appraisal of the estate of the decedent
is to aid the court in revising the accounts and determining the liabilities of the executor or the
administrator, and in making a final and equitable distribution (partition) of the estate and otherwise to
facilitate the administration of the estate. 23 Hence, the RTC that presides over the administration of an
estate is vested with wide discretion on the question of what properties should be included in the
inventory. According to Peralta v. Peralta,24 the CA cannot impose its judgment in order to supplant that of
the RTC on the issue of which properties are to be included or excluded from the inventory in the absence
of positive abuse of discretion, for in the administration of the estates of deceased persons, the judges
enjoy ample discretionary powers and the appellate courts should not interfere with or attempt to replace
the action taken by them, unless it be shown that there has been a positive abuse of discretion. 25 As long
as the RTC commits no patently grave abuse of discretion, its orders must be respected as part of the
regular performance of its judicial duty.
There is no dispute that the jurisdiction of the trial court as an intestate court is special and limited. The
trial court cannot adjudicate title to properties claimed to be a part of the estate but are claimed to belong
to third parties by title adverse to that of the decedent and the estate, not by virtue of any right of
inheritance from the decedent. All that the trial court can do regarding said properties is to determine
whether or not they should be included in the inventory of properties to be administered by the

administrator. Such determination is provisional and may be still revised. As the Court said inAgtarap v.
Agtarap:26
The general rule is that the jurisdiction of the trial court, either as a probate court or an intestate court,
relates only to matters having to do with the probate of the will and/or settlement of the estate of
deceased persons, but does not extend to the determination of questions of ownership that arise during
the proceedings. The patent rationale for this rule is that such court merely exercises special and limited
jurisdiction. As held in several cases, a probate court or one in charge of estate proceedings, whether
testate or intestate, cannot adjudicate or determine title to properties claimed to be a part of the estate
and which are claimed to belong to outside parties, not by virtue of any right of inheritance from the
deceased but by title adverse to that of the deceased and his estate. All that the said court could do as
regards said properties is to determine whether or not they should be included in the inventory of
properties to be administered by the administrator. If there is no dispute, there poses no problem, but if
there is, then the parties, the administrator, and the opposing parties have to resort to an ordinary action
before a court exercising general jurisdiction for a final determination of the conflicting claims of title.
However, this general rule is subject to exceptions as justified by expediency and convenience.
First, the probate court may provisionally pass upon in an intestate or a testate proceeding the question of
inclusion in, or exclusion from, the inventory of a piece of property without prejudice to final determination
of ownership in a separate action. Second, if the interested parties are all heirs to the estate, or the
question is one of collation or advancement, or the parties consent to the assumption of jurisdiction by the
probate court and the rights of third parties are not impaired, then the probate court is competent to
resolve issues on ownership. Verily, its jurisdiction extends to matters incidental or collateral to the
settlement and distribution of the estate, such as the determination of the status of each heir and whether
the property in the inventory is conjugal or exclusive property of the deceased spouse.27 (Italics in the
original; bold emphasis supplied)
It is clear to us that the RTC took pains to explain the factual bases for its directive for the inclusion of the
properties in question in its assailed order of March 14, 2001, viz:
In the first place, the administratrix of the estate admitted that Emigdio Mercado was one of the heirs of
Severina Mercado who, upon her death, left several properties as listed in the inventory of properties
submitted in Court in Special Proceedings No. 306R which are supposed to be divided among her heirs.
The administratrix admitted, while being examined in Court by the counsel for the petitioner, that she did
not include in the inventory submitted by her in this case the shares of Emigdio Mercado in the said estate
of Severina Mercado. Certainly, said properties constituting Emigdio Mercados share in the estate of
Severina Mercado should be included in the inventory of properties required to be submitted to the Court
in this particular case.
In the second place, the administratrix of the estate of Emigdio Mercado also admitted in Court that she
did not include in the inventory shares of stock of Mervir Realty Corporation which are in her name and
which were paid by her from money derived from the taxicab business which she and her husband had
since 1955 as a conjugal undertaking. As these shares of stock partake of being conjugal in character,
onehalf thereof or of the value thereof should be included in the inventory of the estate of her husband.
In the third place, the administratrix of the estate of Emigdio Mercado admitted, too, in Court that she had
a bank account in her name at Union Bank which she opened when her husband was still alive. Again,
the money in said bank account partakes of being conjugal in character, and so, onehalf thereof should
be included in the inventory of the properties constituting as estate of her husband.
In the fourth place, it has been established during the hearing in this case that Lot No. 3353 of Pls657D
located in Badian, Cebu containing an area of 53,301 square meters as described in and covered by
Transfer Certificate of Title No. 3252 of the Registry of Deeds for the Province of Cebu is still registered in
the name of Emigdio S. Mercado until now. When it was the subject of Civil Case No. CEB12690 which
was decided on October 19, 1995, it was the estate of the late Emigdio Mercado which claimed to be the

owner thereof. Mervir Realty Corporation never intervened in the said case in order to be the owner
thereof. This fact was admitted by Richard Mercado himself when he testified in Court. x x x So the said
property located in Badian, Cebu should be included in the inventory in this case.
Fifthly and lastly, it appears that the assignment of several parcels of land by the late Emigdio S. Mercado
to Mervir Realty Corporation on January 10, 1991 by virtue of the Deed of Assignment signed by him on
the said day (Exhibit N for the petitioner and Exhibit 5 for the administratrix) was a transfer in
contemplation of death. It was made two days before he died on January 12, 1991. A transfer made in
contemplation of death is one prompted by the thought that the transferor has not long to live and made in
place of a testamentary disposition (1959 Prentice Hall, p. 3909). Section 78 of the National Internal
Revenue Code of 1977 provides that the gross estate of the decedent shall be determined by including
the value at the time of his death of all property to the extent of any interest therein of which the decedent
has at any time made a transfer in contemplation of death. So, the inventory to be approved in this case
should still include the said properties of Emigdio Mercado which were transferred by him in
contemplation of death. Besides, the said properties actually appeared to be still registered in the name of
Emigdio S. Mercado at least ten (10) months after his death, as shown by the certification issued by the
Cebu City Assessors Office on October 31, 1991 (Exhibit O). 28
Thereby, the RTC strictly followed the directives of the Rules of Court and the jurisprudence relevant to
the procedure for preparing the inventory by the administrator. The aforequoted explanations indicated
that the directive to include the properties in question in the inventory rested on good and valid reasons,
and thus was far from whimsical, or arbitrary, or capricious.
Firstly, the shares in the properties inherited by Emigdio from Severina Mercado should be included in the
inventory because Teresita, et al. did not dispute the fact about the shares being inherited by Emigdio.
Secondly, with Emigdio and Teresita having been married prior to the effectivity of the Family Code in
August 3, 1988, their property regime was the conjugal partnership of gains. 29 For purposes of the
settlement of Emigdios estate, it was unavoidable for Teresita to include his shares in the conjugal
partnership of gains. The party asserting that specific property acquired during that property regime did
not pertain to the conjugal partnership of gains carried the burden of proof, and that party must prove the
exclusive ownership by one of them by clear, categorical, and convincing evidence. 30 In the absence of or
pending the presentation of such proof, the conjugal partnership of Emigdio and Teresita must be
provisionally liquidated to establish who the real owners of the affected properties were, 31 and which of
the properties should form part of the estate of Emigdio. The portions that pertained to the estate of
Emigdio must be included in the inventory.
Moreover, although the title over Lot 3353 was already registered in the name of Mervir Realty, the RTC
made findings that put that title in dispute. Civil Case No. CEB12692, a dispute that had involved the
ownership of Lot 3353, was resolved in favor of the estate of Emigdio, and Transfer Certificate of Title No.
3252 covering Lot 3353 was still in Emigdios name. Indeed, the RTC noted in the order of March 14,
2001, or ten years after his death, that Lot 3353 had remained registered in the name of Emigdio.
Interestingly, Mervir Realty did not intervene at all in Civil Case No. CEB12692. Such lack of interest in
Civil Case No. CEB12692 was susceptible of various interpretations, including one to the effect that the
heirs of Emigdio could have already threshed out their differences with the assistance of the trial court.
This interpretation was probable considering that Mervir Realty, whose business was managed by
respondent Richard, was headed by Teresita herself as its President. In other words, Mervir Realty
appeared to be a family corporation.
Also, the fact that the deed of absolute sale executed by Emigdio in favor of Mervir Realty was a
notarized instrument did not sufficiently justify the exclusion from the inventory of the properties involved.
A notarized deed of sale only enjoyed the presumption of regularity in favor of its execution, but its
notarization did not per se guarantee the legal efficacy of the transaction under the deed, and what the
contents purported to be. The presumption of regularity could be rebutted by clear and convincing
evidence to the contrary.32 As the Court has observed in Suntay v. Court of Appeals:33

x x x. Though the notarization of the deed of sale in question vests in its favor the presumption of
regularity, it is not the intention nor the function of the notary public to validate and make binding an
instrument never, in the first place, intended to have any binding legal effect upon the parties thereto. The
intention of the parties still and always is the primary consideration in determining the true nature of a
contract.(Bold emphasis supplied)
It should likewise be pointed out that the exchange of shares of stock of Mervir Realty with the real
properties owned by Emigdio would still have to be inquired into. That Emigdio executed the deed of
assignment two days prior to his death was a circumstance that should put any interested party on his
guard regarding the exchange, considering that there was a finding about Emigdio having been sick of
cancer of the pancreas at the time.34 In this regard, whether the CA correctly characterized the exchange
as a form of an estate planning scheme remained to be validated by the facts to be established in court.
The fact that the properties were already covered by Torrens titles in the name of Mervir Realty could not
be a valid basis for immediately excluding them from the inventory in view of the circumstances
admittedly surrounding the execution of the deed of assignment. This is because:
The Torrens system is not a mode of acquiring titles to lands; it is merely a system of registration of titles
to lands. However, justice and equity demand that the titleholder should not be made to bear the
unfavorable effect of the mistake or negligence of the States agents, in the absence of proof of his
complicity in a fraud or of manifest damage to third persons. The real purpose of the Torrens system is to
quiet title to land and put a stop forever to any question as to the legality of the title, except claims that
were noted in the certificate at the time of registration or that may arise subsequent thereto. Otherwise,
the integrity of the Torrens system shall forever be sullied by the ineptitude and inefficiency of land
registration officials, who are ordinarily presumed to have regularly performed their duties. 35
Assuming that only seven titled lots were the subject of the deed of assignment of January 10, 1991, such
lots should still be included in the inventory to enable the parties, by themselves, and with the assistance
of the RTC itself, to test and resolve the issue on the validity of the assignment. The limited jurisdiction of
the RTC as an intestate court might have constricted the determination of the rights to the properties
arising from that deed,36 but it does not prevent the RTC as intestate court from ordering the inclusion in
the inventory of the properties subject of that deed. This is because the RTC as intestate court, albeit
vested only with special and limited jurisdiction, was still deemed to have all the necessary powers to
exercise such jurisdiction to make it effective.37
Lastly, the inventory of the estate of Emigdio must be prepared and submitted for the important purpose
of resolving the difficult issues of collation and advancement to the heirs. Article 1061 of theCivil
Code required every compulsory heir and the surviving spouse, herein Teresita herself, to bring into the
mass of the estate any property or right which he (or she) may have received from the decedent, during
the lifetime of the latter, by way of donation, or any other gratuitous title, in order that it may be computed
in the determination of the legitime of each heir, and in the account of the partition. Section 2, Rule 90 of
the Rules of Court also provided that any advancement by the decedent on the legitime of an heir may
be heard and determined by the court having jurisdiction of the estate proceedings, and the final order of
the court thereon shall be binding on the person raising the questions and on the heir. Rule 90 thereby
expanded the special and limited jurisdiction of the RTC as an intestate court about the matters relating to
the inventory of the estate of the decedent by authorizing it to direct the inclusion of properties donated or
bestowed by gratuitous title to any compulsory heir by the decedent. 38
The determination of which properties should be excluded from or included in the inventory of estate
properties was well within the authority and discretion of the RTC as an intestate court. In making its
determination, the RTC acted with circumspection, and proceeded under the guiding policy that it was
best to include all properties in the possession of the administrator or were known to the administrator to
belong to Emigdio rather than to exclude properties that could turn out in the end to be actually part of the
estate. As long as the RTC commits no patent grave abuse of discretion, its orders must be respected as
part of the regular performance of its judicial duty. Grave abuse of discretion means either that the judicial
or quasijudicial power was exercised in an arbitrary or despotic manner by reason of passion or personal

hostility, or that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to
perform the duty enjoined or to act in contemplation of law, such as when such judge, tribunal or board
exercising judicial or quasijudicial powers acted in a capricious or whimsical manner as to be equivalent
to lack of jurisdiction.39
In light of the foregoing, the CAs conclusion of grave abuse of discretion on the part of the RTC was
unwarranted and erroneous.
WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDEthe
decision promulgated on May 15, 2002; REINSTATES the orders issued on March 14, 2001 and May 18,
2001 by the Regional Trial Court in Cebu; DIRECTS the Regional Trial Court in Cebu to proceed with
dispatch in Special Proceedings No. 3094CEB entitled Intestate Estate of the late Emigdio Mercado,
Thelma Aranas, petitioner, and to resolve the case; and ORDERS the respondents to pay the costs of
suit.ChanRoblesVirtualawlibrary
SO ORDERED.