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SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.L33172October18,1979

ERNESTOCEASE,CECILIACEASE,MARIONCEASE,TERESACEASELACEBALandtheF.L.CEASE
PLANTATIONCO.,INC.asTrusteeofpropertiesofthedefunctTIAONGMILLING&PLANTATIONCO.,
petitioners,
vs.
HONORABLECOURTOFAPPEALS,(SpecialSeventhDivision),HON.MANOLOL.MADDELA,Presiding
Judge,CourtofFirstInstanceofQuezon,BENJAMINCEASEandFLORENCECEASE,respondents.

GUERRERO,J:

AppealbycertiorarifromthedecisionoftheCourtofAppealsinCAG.R.No.45474,entitled"ErnestoCease,et
al.vs.Hon.ManoloL.Maddela,JudgeoftheCourtofFirstInstanceofQuezon,etal."1whichdismissedthe
petitionforcertiorari,mandamus,andprohibitioninstitutedbythepetitionersagainsttherespondentjudgeandtheprivate
respondents.

Theantecedentsofthecase,asfoundbytheappellatecourt,areasfollows:

ITRESULTING:ThattheantecedentsarenotdifficulttounderstandsometimeinJune1908,one
ForrestL.Ceasecommonpredecessorininterestofthepartiestogetherwithfive(5)otherAmerican
citizensorganizedtheTiaongMillingandPlantationCompanyandinthecourseofitscorporate
existencethecompanyacquiredvariouspropertiesbutatthesametimealltheotheroriginal
incorporatorswereboughtoutbyForrestL.CeasetogetherwithhischildrennamelyErnest,Cecilia,
Teresita,Benjamin,FlorenceandoneBonifaciaTirantealsoconsideredamemberofthefamilythe
charterofthecompanylapsedinJune1958butwhethertherewerestepstoliquidateit,therecord
issilenton13August1959,ForrestL.Ceasediedandbyextrajudicialpartitionofhisshares,among
thechildren,thiswasdisposedofon19October1959itwasherewherethetroubleamongthem
cametoarisebecauseitwouldappearthatBenjaminandFlorencewantedanactualdivisionwhile
theotherchildrenwantedreincorporationandproceedingonthat,theseotherchildrenErnesto,
TeresitaandCeciliaandaforementionedotherstockholderBonifaciaTiranteproceededto
incorporatethemselvesintotheF.L.CeasePlantationCompanyandregistereditwiththeSecurities
andExchangeCommissionon9December,1959apparentlyinviewofthat,BenjaminandFlorence
fortheirpartinitiatedaSpecialProceedingNo.3893oftheCourtofFirstInstanceofTayabasforthe
settlementoftheestateofForestL.Ceaseon21April,1960andonemonthafterwardson19May
1960theyfiledCivilCaseNo.6326againstErnesto,TeresitaandCeciliaCeasetogetherwith
BonifaciaTiranteaskingthattheTiaongMillingandPlantationCorporationbedeclaredIdenticalto
F.L.CeaseandthatitspropertiesbedividedamonghischildrenashisintestateheirsthisCivilCase
wasresistedbyaforestateddefendantsandnotwithstandingeffortsoftheplaintiffstohavethe
propertiesplacedunderreceivership,theywerenotabletosucceedbecausedefendantsfileda
bondtoremainastheyhaveremainedinpossessionafterthatandalready,duringthependencyof
CivilCaseNo.6326specificallyon21May,1961apparentlyontheeveoftheexpiryofthethree(3)
yearperiodprovidedbythelawfortheliquidationofcorporations,theboardofliquidatorsofTiaong
MillingexecutedanassignmentandconveyanceofpropertiesandtrustagreementinfavorofF.L.
CeasePlantationCo.Inc.astrusteeoftheTiaongMillingandPlantationCo.soChatuponmotionof
theplaintiffstrialJudgeorderedthatthisallegedtrusteebealsoincludedaspartydefendantnow
thisbeingthesituation,itwillberememberedthattherewerethustwo(2)proceedingspendingin
theCourtofFirstInstanceofQuezonnamelyCivilCaseNo.6326andSpecialProceedingNo.3893
butbothofthesewereassignedtotheHonorableRespondentJudgeManoloL.Maddelap.43and
thecasewasfinallyheardandsubmitteduponstipulationoffactspp,34110,rolloandtrialJudgeby
decisiondated27December1969heldfortheplaintiffsBenjaminandFlorence,thedecision
containingthefollowingdispositivepart:
 VIEWEDINTHELIGHTOFALLTHEFOREGOING,judgmentisherebyrenderedin
favorofplaintiffsandagainstthedefendantsdeclaringthat:

1)TheassetsorpropertiesofthedefunctTiaongMillingandPlantationCompanynow
appearingunderthenameofF.L.CeasePlantationCompanyasTrustee,istheestate
alsoofthedeceasedForrestL.Ceaseandordereddivided,shareandsharealike,
amonghissixchildrentheplaintiffsandthedefendantsinaccordancewithRule69,
RulesofCourt

2)TheResolutiontoSelldatedOctober12,1959andtheTransferandConveyance
withTrustAgreementisherebysetasideasimproperandillegalforthepurposesand
effectthatitwasintendedand,therefore,nullandvoid

3)ThatF.L.CeasePlantationCompanyisremovedas'Trusteeforinterestagainstthe
estateandessentialtotheprotectionofplaintiffs'rightsandisherebyorderedtodeliver
andconveyallthepropertiesandassetsofthedefunctTiaongMillingnowunderits
name,custodyandcontroltowhomsoeverbeappointedasReceiverdisqualifyingand
ofthepartieshereinthelattertoactaccordinglyuponproperassumptionofofficeand

4)SpecialProceedingsNo.3893foradministrationisterminatedanddismissedthe
instantcasetoproceedbutonissuesofdamagesonlyandforsuchactioninherently
essentialforpartition.

SOORDERED.

LucenaCity,December27,1969.,pp.122a123,rollo.

uponreceiptofthat,defendantstherefilledanoticeofappealp.129,rollotogetherwithanappeal
bondandarecordonappealbuttheplaintiffsmovedtodismisstheappealonthegroundthatthe
judgmentwasinfactinterlocutoryandnotappealablep.168rolloandthispositionofdefendantswas
sustainedbytrialJudge,HisHonorrulingthat

INVIEWOFTHEFOREGOING,theappealinterposedbyplaintiffsisherebydismissed
asprematureandtheRecordonAppealisnecessarilydisapprovedasimproperatthis
stageoftheproceedings.

SOORDERED.

LucenaCity,April27,1970.

andsoitwassaiddefendantsbroughtthematterfirsttotheSupremeCourt,onmandamuson20
May,1970tocompeltheappealandcertiorariandprohibitiontoannultheorderof27April,1970on
thegroundthatthedecisionwas"patentlyerroneous"p.16,rollobuttheSupremeCourtremanded
thecasetothisCourtofAppealsbyresolutionof27May1970,p.173,andthisCourtofAppealson
1July1970p.175dismissedthepetitionsofarasthemandamuswasconcernedtakingtheview
thatthedecisionsoughttobeappealeddated27December,1969wasinterlocutoryandnot
appealablebutonmotionforreconsiderationofpetitionersandsincetherewaspossiblemeritsofar
asitsprayerforcertiorariandprohibitionwasconcerned,byresolutionoftheCourton19August,
1970,p.232,thepetitionwaspermittedtogoaheadinthatcapacityanditisthepositionof
petitionersthatthedecisionof27December,1969aswellastheorderof27April,1970sufferedof
certainfataldefects,whichrespondentsdenyandontheirpartraisethepreliminarypointthatthis
CourtofAppealshasnoauthoritytogiverelieftopetitionersbecausenot

inaidofitsappellatejurisdiction,

andthatthequestionspresentedcannotberaisedforthefirsttimebeforethisCourtofAppeals

RespondentCourtofAppealsinitsdecisionpromulgatedDecember9,1970dismissedthepetitionwithcosts
againstpetitioners,hencethepresentpetitiontothisCourtonthefollowingassignmentoferrors:

THECOURTOFAPPEALSERRED

I.INSANCTIONINGTHEWRONGFULEXERCISEOFJURISDICTIONBEYONDTHELIMITSOFAUTHORITY
CONFERREDBYLAWUPONTHELOWERCOURT,WHENITPROCEEDEDTOHEAR,ADJUDGEAND
ADJUDICATE

(a)SpecialProceedingsNo.3893forthesettlementoftheEstateofForrestL.Cease,
simultaneouslyandconcurrentlywith
 (b)CivilCaseNo.6326,whereinthelowerCourtorderedPartitionunderRule69,RulesofCourt

THEISSUEOFLEGALOWNERSHIPOFTHEPROPERTIESCOMMONLYINVOLVEDINBOTHACTIONS
HAVINGBEENRAISEDATTHEOUTSETBYTHETIAONGMILLINGANDPLANTATIONCOMPANY,ASTHE
REGISTEREDOWNEROFSUCHPROPERTIESUNDERACT496.

II.INAFFIRMINGUNSUPPORTEDBYANYEVIDENCEWHATSOEVERNORCITATIONOFANYLAWTO
JUSTIFYTHEUNWARRANTEDCONCLUSIONTHATSUBJECTPROPERTIES,FOUNDBYTHELOWER
COURTANDTHECOURTOFAPPEALSASACTUALLYREGISTEREDINTHENAMEOFPETITIONER
CORPORATIONAND/ORITSPREDECESSORININTEREST,THETIAONGMILLINGANDPLANTATION
COMPANY,DURINGALLTHE50YEARSOFITSCORPORATEEXISTENCE"AREALSOPROPERTIESOFTHE
ESTATEOFFORESTL.CEASE."

III.INAFFIRMINGTHEARBITRARYCONCLUSIONOFTHELOWERCOURTTHATITSDECISIONOF
DECEMBER27,1969ISAN"INTERLUCUTORYDECISION."INDISMISSEDNGTHEPETITIONFORWRITOF
MANDAMUS,ANDINAFFIRMINGTHEMANIFESTLYUNJUSTJUDGMENTRENDEREDWHICHCONTRADICTS
THEFINDINGSOFULTIMATEFACTSTHEREINCONTAINED.

DuringtheperiodthatensuedafterthefilinginthisCourtoftherespectivebriefsandthesubsequentsubmission
ofthecasefordecision,someincidentshadtranspired,thesummaryofwhichmaybestatedasfollows:

1.Separatefromthispresentappeal,petitionersfiledapetitionforcertiorariandprohibitioninthisCourt,
docketedasG.R.No.L35629(ErnestoCease,etal.vs.Hon.ManoloL.Maddela,etal.)whichchallengedthe
orderofrespondentjudgedatedSeptember27,1972appointinghisBranchClerkofCourt,Mr.ElenoM.Joyas,
asreceiverofthepropertiessubjectoftheappealedcivilcase,whichorder,petitionerssawasavirtualexecution
ofthelowercourt'sjudgment(p.92,rollo).InOurresolutionofNovember13,1972,issuedinG.R.No.L35629,
thepetitionwasdeniedsincerespondentjudgemerelyappointedanauxilliaryreceiverforthepreservationofthe
propertiesaswellasfortheprotectionoftheinterestsofallpartiesinCivilCaseNo.6326butatthesametime,
WeexpressedOurdispleasureintheappointmentofthebranchclerkofcourtoranyothercourtpersonnelfor
thatmatterasreceiver.(p.102,rollo).

2.Meanwhile,sensingthattheappointedreceiverwasmakingsomeattemptstotakepossessionofthe
properties,petitionersfiledinthispresentappealanurgentpetitiontorestrainproceedingsinthelowercourt.We
resolvedthepetitiononJanuary29,1975byissuingacorrespondingtemporaryrestrainingorderenjoiningthe
courtaquofromimplementingitsdecisionofDecember27,1969,moreparticularly,thetakingoverbyareceiver
ofthepropertiessubjectofthelitigation,andprivaterespondentsBenjaminandFlorenceCeasefromproceeding
ortakinganyactiononthematteruntilfurtherordersfromthisCourt(pp.99100,rollo).Privaterespondentsfiled
amotionforreconsiderationofOurresolutionofJanuary29,1975.Afterweighingtheargumentsoftheparties
andtakingnoteofOurresolutioninG.R.No.L35629whichupheldtheappointmentofareceiver,Weissued
anotherresolutiondatedApril11,1975liftingeffectiveimmediatelyOurprevioustemporaryrestrainingorder
whichenforcedtheearlierresolutionofJanuary29,1975(pp.140141,rollo).

3.OnFebruary6,1976,privaterespondentsfiledanurgentpetitiontorestrainproceedingsbelowinviewofthe
precipitatereplacementofthecourtappointedreceiverMayorFranciscoEscueta(viceMr.ElenoM.Joyas)and
theappointmentofMr.GuillermoLagrosaontheeveofrespondentJudgeMaddela'sretirement(p.166,rollo).
TheurgentpetitionwasdeniedinOurresolutionofFebruary18,1976(p.176,rollo).

4.Severalattemptsatacompromiseagreementfailedtomaterialize.ATentativeCompromiseAgreementdated
July30,1975waspresentedtotheCourtonAugust6,1976forthesignatureoftheparties,butrespondents
"unceremoniously"repudiatedthesamebyleavingthecourtroomwithoutthepermissionofthecourt(Courtof
FirstInstanceofQuezon,Branch11)asaresultofwhichrespondentsandtheircounselwerecitedforcontempt
(p.195,197,rollo)thatrespondents'reasonfortherepudiationappearstobepetitioners'failuretorenderan
auditedaccountoftheiradministrationcoveringtheperiodfromMay31,1961uptoJanuary29,1974,plusthe
inclusionofaprovisiononwaiverandrelinquishmentbyrespondentsofwhateverrightsthatmayhaveaccruedto
theirfavorbyvirtueofthelowercourt'sdecisionandtheaffirmativedecisionoftheappellatecourt.

WegonowtotheallegederrorscommittedbytherespondentCourtofAppeals.

Ascanbegleanedfrompetitioners'briefandthepetitionitself,twocontentionsunderliethefirstassignederror.
First,petitionersarguethattherewasanirregularandarbitrarteterminationanddismissalofthespecial
proceedingsforjudicialadministrationsimultaneouslyorderedinthelowercourt.sdecisioninCivilCaseNo.
6326adjudicatingthepartitionoftheestate,withoutcategorically,reasoningtheoppositiontothepetitionfor
administrationSecond,thattheissueofownershiphadbeenraisedinthelowercourtwhenTiaongMilling
assertedtitleoverthepropertiesregisteredinitscorporatenameadversetoForrestL.Ceaseorhisestate,and
thatthesaidissuewaserroneouslydisposedofbythetrialcourtinthepartitionproceedingswhenitconcluded
thattheassetsorpropertiesofthedefunctcompanyisalsotheestateofthedeceasedproprietor.
Theproprietyofthedismissalandterminationofthespecialproceedingsforjudicialadministrationmustbe
affirmedinspiteofitsrenditioninanotherrelatedcaseinviewoftheestablishedjurisprudencewhichfavors
partitionwhenjudicialadministrationbecome,unnecessary.AsobservedbytheCourtofAppeals,thedismissalat
firstglanceiswrong,forthereasonthatwhatwasactuallyheardwasCivilCaseNo.6326.Thetechnical
consistency,however,itisfarlessimportancethanthereasonbehindthedoctrinalruleagainstplacinganestate
underadministration.Judicialrulingsconsistentlyholdtheviewthatwherepartitionispossible,eitherjudicialor
extrajudicial,theestateshouldnotbeburdenedwithanadministrationproceedingwithoutgoodandcompelling
reason.Whentheestatehasnocreditorsorpendingobligationstobepaid,thebeneficiariesininterestarenot
boundtosubmitthepropertytojudicialadministrationwhichisalwayslongandcostly,ortoapplyforthe
appointmentofanadministratorbythecourt,especiallywhenjudicialadministrationisunnecessaryand
superfluous.Thus

Whenapersondieswithoutleavingpendingobligationstobepaid,hisheirs,whetherofageornot,
areboundtosubmitthepropertytoajudicialadministration,whichisalwayslongandcostly,orto
applyfortheappointmentofanadministratorbythecourt.Ithasbeenuniformlyheldthatinsuch
casethejudicialadministrationandtheappointmentofanadministratoraresuperfluousand
unnecessaryproceedings(Ilustrevs.AlarasFrondosa,17Phil.,321Malahacanvs.Ignacio,19Phil,
434Bondadvs.Bondad,34Phil.,232Baldemorvs.Malangyaon,34Phil.,367Fulevs.Fule,46
Phil.,317).Syllabus,IntestateestateofthedeceasedLuzGarcia.PabloG.Utulovs.LeonaPasion
ViudadeGarcia,66Phil.302.

Wheretheestatehasnodebts,recoursemaybehadtoanadministrationproceedingonlyifthe
heirshavegoodreasonsfornotresortingtoanactionforpartition.Wherepartitionispossible,either
inoroutofcourt,theestateshouldnotbeburdenedwithanadministrationproceedingwithoutgood
andcompellingreasons.(IntestateEstateofMercadovs.Magtibay,96Phil.383)

Intherecordsofthiscase,Wefindnoindicationofanyindebtednessoftheestate.Nocreditorhascomeupto
chargetheestatewithinthetwoyearperiodafterthedeathofForrestL.Cease,hence,thepresumptionunder
Section1,Rule74thattheestateisfreefromcreditorsmustapply.Neitherhasthestatusofthepartiesaslegal
heirs,muchlessthatofrespondents,beenraisedasanissue.Besides,extantintherecordsisthestipulationof
thepartiestosubmitthepleadingsandcontentsoftheadministrationproceedingsforthecognizanceofthetrial
judgeinadjudicatingthecivilcaseforpartition(Respondents'Brief,p,20,rollo).Asrespondentsobserve,the
partiesinbothcasesarethesame,soarethepropertiesinvolvedthatactualdivisionistheprimaryobjectivein
bothactionsthetheoryanddefenseoftherespectivepartiesarelikewisecommonandthatbothcaseshave
beenassignedtothesamerespondentjudge.Wefeelthattheunifyingeffectoftheforegoingcircumstances
invitesthewholesomeexceptiontothestructuresofproceduralrule,thusallowing,instead,roomforjudicial
flexibility.Respondentjudge'sdismissaloftheadministrationproceedingsthen,isajudiciousmove,appreciablein
today'sneedforeffectiveandspeedyadministrationofjustice.Therebeingamplereasontosupportthedismissal
ofthespecialproceedingsinthisappealedcase,Wecannotseeintherecordsanycompellingreasonwhyitmay
notbedismissedjustthesameevenifconsideredinaseparateaction.Thisisinevitablycertainspeciallywhen
thesubjectpropertyhasalreadybeenfoundappropriateforpartition,thusreducingthepetitionforadministration
toamereunnecessarysolicitation.

Thesecondpointraisedbypetitionersintheirfirstassignederrorisequallyuntenable.Ineffect,petitionersargue
thattheactionforpartitionshouldnothaveprosperedinviewoftherepudiationofthecoownershipbyTiaong
MillingandPlantationCompanywhen,asearlyinthetrialcourt,italreadyassertedownershipandcorporatetitle
overthepropertiesadversetotherightofownershipofForrestL.Ceaseorhisestate.Wearenotunmindfulof
thedoctrinerelieduponbypetitionersinRodriguezvs.Ravilan,17Phil.63whereinthisCourtheldthatinan
actionforpartition,itisassumedthatthepartiesbywhomitisprosecutedareallcoownersorcoproprietorsof
thepropertytobedivided,andthatthequestionofcommonownershipisnottobeargued,notthefactasto
whethertheintendedpartiesareorarenottheownersofthepropertyinquestion,butonlyastohowandinwhat
mannerandproportionthesaidpropertyofcommonownershipshallbedistributedamongtheinterestedparties
byorderoftheCourt.Consistentwiththisdictum,ithasbeenfieldthatifanypartytoasuitforpartitiondeniesthe
proindivisocharacteroftheestatewhosepartitionissought,andclaimsinstead,exclusivetitletheretotheaction
becomesoneforrecoveryofpropertycognizableinthecourtsofordinaryjurisdiction.2

Petitioners'argumenthasonlytheoreticalpersuasion,tosaytheleast,ratherapparentthanreal.Itmustbe
rememberedthatwhenTiaongMillingadduceditsdefenseandraisedtheissueofownership,itscorporate
existencealreadyterminatedthroughtheexpirationofitscharter.ItisclearinSection77ofActNo.1459
(CorporationLaw)thatupontheexpirationofthecharterperiod,thecorporationceasestoexistandisdissolved
ipsofactoexceptforpurposesconnectedwiththewindingupandliquidation.Theprovisionallowsathreeyear,
periodfromexpirationofthecharterwithinwhichtheentitygraduallysettlesandclosesitsaffairs,disposesand
conveyitspropertyandtodivideitscapitalstock,butnotforthepurposeofcontinuingthebusinessforwhichit
wasestablished.Atthisterminalstageofitsexistence,TiaongMillingmaynolongerpersisttomaintainadverse
titleandownershipofthecorporateassetsasagainsttheprospectivedistributeeswhenatthistimeitmerely
holdsthepropertyintrust,itsassertionofownershipisnotonlyalegalcontradiction,butmoreso,toallowitto
maintainadverseinterestwouldcertainlythwarttheverypurposeofliquidationandthefinaldistributelollofthe
assetstotheproper,parties.

WeagreewiththeCourtofAppealsinitsreasoningthatsubstanceismoreimportantthanformwhenitsustained
thedismissalofSpecialProceedingsNo.3893,thus

a)AstothedismissalofSpecialProceedingsNo.3893,ofcourse,atfirstglance,thiswaswrong,for
thereasonthatthecasetrialhadbeenheardwasCivilCaseNo.6326butwhatshouldnotbe
overlookedeitherisChatrespondentJudgewasthesameJudgethathadbeforehiminhisown
sala,saidSpecialProceedingsNo.3893,p.43rollo,andthepartiestothepresentCivilCaseNo.
6326hadthemselvesaskedrespondentJudgetotakejudicialnoticeofthesameanditscontents
page34,rolloitisnotdifficulttoseethatwhenrespondentJudgeinpar.4ofthedispositivepartof
hisdecisioncomplainedof,orderedthat,

4)SpecialProceedingsNo.3893foradministrationisterminatedanddismissedthe
instantcasetoproceedbutonissuesofdamagesonlyandforsuchactioninherently
essentialorpartition.p.123,rollo,

intruthandinfact,HisHonorwasissuingthatorderalsowithinCivilCaseNo.632butinconnection
withSpecialProceedingsNo.389:3:forsubstanceismoreimportantChanform,thecontendingpar
tiesinbothproceedingsbeingexactlythesame,butnotonlythis,letitnotbeforgottenthatwhenHis
HonordismissedSpecialProceedingsNo.3893,thatdismissalpreciselywasadismissalthat
petitionershereinhadthemselvessoughtandsolicitedfromrespondentJudgeaspetitioners
themselvesareintheirpresentpetitionpp.56,rollothisCourtmustfinddifficultyinreconciling
petitioners'attackwiththefactthatitwastheythemselvesthathadinsistedonthatdismissalonthe
principlethatnothewhoisfavoredbuthewhoishurtbyajudicialorderisheonlywhoshouldbe
heardtocomplainandespeciallysinceextraordinarylegalremediesareremediesinextermies
grantedtoparties'whohavebeenthevictimsnotmerelyoferrorsbutofgravewrongs,anditcannot
beseenhowonewhogotwhathehadaskedcouldbeheardtoclaimthathehadbeenthevictimof
awrong,petitionersshouldnotnowcomplainofanordertheyhadthemselvesaskedinorderto
attacksuchanorderafterwardsifatall,perhaps,thirdparties,creditors,theBureauofInternal
Revenue,mighthavebeenprejudiced,andcouldhavehadthepersonalitytoattackthatdismissalof
SpecialProceedingsNo.3893,butnotpetitionersherein,anditisnotnowforthisCourtofAppeals
toprotectsaidthirdpersonswhohavenotcometotheCourtbeloworsoughttointerveneherein

Onthesecondassignederror,petitionersarguethatnoevidencehasbeenfoundtosupporttheconclusionthat
theregisteredpropertiesofTiaongMillingarealsopropertiesoftheestateofForrestL.Ceasethatonthe
contrary,saidpropertiesareregisteredunderActNo.496inthenameofTiaongMillingaslawfulownerand
possessorforthelast50yearsofitscorporateexistence.

Wedonotagree.InreposingownershiptotheestateofForrestL.Cease,thetrialcourtindeedfoundstrong
support,onethatisbasedonawellentrenchedprincipleoflaw.Insustainingrespondents'theoryof"mergerof
ForrestL.CeaseandTheTiaongMillingasonepersonality",orthat"thecompanyisonlythebusinessconduit
andalteregoofthedeceasedForrestL.CeaseandtheregisteredpropertiesofTiaongMillingareactually
propertiesofForrestL.Ceaseandshouldbedividedequally,shareandsharealikeamonghissixchildren,...",
thetrialcourtdidaptlyapplythefamiliarexceptiontothegeneralrulebydisregardingthelegalfictionofdistinct
andseparatecorporatepersonalityandregardingthecorporationandtheindividualmemberoneandthesame.
Inshreddingthefictitiouscorporateveil,thetrialjudgenarratedtheundisputedfactualpremise,thus:

Whiletherecordsshowedthatoriginallyitsincorporatorswerealiens,friendsorthirdpartiesin
relationofonetoanother,inthecourseofitsexistence,itdevelopedintoaclosefamilycorporation.
TheBoardofDirectorsandstockholdersbelongtoonefamilytheheadofwhichForrestL.Cease
alwaysretainedthemajoritystocksandhencethecontrolandmanagementofitsaffairs.Infact,
duringthereconstructionofitsrecordsin1947beforetheSecurityandExchangeCommissiononly9
nominalsharesoutof300appearsinthenameofhis3eldestchildrenthenandanotherperson
closetothem.Itislikewisenoteworthytoobservethatashischildrenincreaseorperhapsbecomeof
age,hecontinueddistributinghissharesamongthemaddingFlorence,TeresaandMarionuntilat
thetimeofhisdeathonly190werelefttohisname.Definitely,onlythemembersofhisfamily
benefitedfromtheCorporation.

Theaccountsofthecorporationandthereforeitsoperation,aswellasthatofthefamilyappearsto
beindistinguishableandapparentlyjoinedtogether.Asadmittedbythedefendants(Manifestationof
CompliancewithOrderofMarch7,1963[Exhibit"21"]thecorporation'never'hadanyaccountwith
anybankinginstitutionorifanyaccountwascarriedinabankonitsbehalf,itwasinthenameofMr.
ForrestL.Cease.Inbrief,theoperationoftheCorporationismergedwiththoseofthemajority
stockholders,thelatterusingtheformerashisinstrumentalityandfortheexclusivebenefitsofallhis
family.Fromtheforegoingindication,therefore,thereistruthinplaintiff'sallegationthatthe
 corporationisonlyabusinessconduitofhisfatherandanextensionofhispersonality,theyareone
andthesamething.Thus,theassetsofthecorporationarealsotheestateofForrestL.Cease,the
fatherofthepartieshereinwhoarealllegitimatechildrenoffullblood.

Arichstoreofjurisprudencehasestablishedtheruleknownasthedoctrineofdisregardingorpiercingtheveilof
corporatefiction.Generally,acorporationisinvestedbylawwithapersonalityseparateanddistinctfromthatof
thepersonscomposingitaswellasfromthatofanyotherlegalentitytowhichitmayberelated.Byvirtueofthis
attribute,acorporationmaynot,generally,bemadetoanswerforactsorliabilitiesofitsstockholdersorthoseof
thelegalentitiestowhichitmaybeconnected,andviceversa.Thisseparateanddistinctpersonalityis,however,
merelyafictioncreatedbylawforconvenienceandtopromotetheendsofjustice(LagunaTransportation
Companyvs.SocialSecuritySystem,L14606,April28,1960LaCampanaCoffeeFactory,Inc.vs.Kaisahanng
mgaManggagawasaLaCampana,L5677,May25,1953).Forthisreason,itmaynotbeusedorinvokedfor
endssubversiveofthepolicyandpurposebehinditscreation(EmilianoCanoEnterprises,Inc.vs.CIR,L20502,
Feb.26,1965)orwhichcouldnothavebeenintendedbylawtowhichitowesitsbeingMcConnelvs.Courtof
Appeals,L10510,March17,1961,1SCRA722).Thisisparticularlytruewherethefictionisusedtodefeat
publicconvenience,justifywrong,protectfraud,defendcrime(YutivoSonsHardwareCompanyvs.CourtofTax
Appeals,L13203,Jan.28,1961,1SCRA160),confuselegitimatelegalorjudicialissues(R.F.Sugay&Co.vs.
Reyes,L20451,Dec.28,1964),perpetratedeceptionorotherwisecircumventthelaw(GregorioAraneta,Inc.vs.
reasondePaterno,L2886,Aug.22,1952,49O.G.721).Thisislikewisetruewherethecorporateentityisbeing
usedasanalterego,adjunct,orbusinessconduitforthesolebenefitofthestockholdersorofanothercorporate
entity(McConnelvs.CourtofAppeals,supraCommissionerofInternalRevenuevs.NortonHarrisonCo.,L
7618,Aug.31,1964).

Inanyofthesecases,thenotionofcorporateentitywillbepiercedordisregarded,andthecorporationwillbe
treatedmerelyasanassociationofpersonsor,wheretherearetwocorporations,theywillbemergedasone,the
onebeingmerelyregardedaspartortheinstrumentalityoftheotter(Koppel[Phil.]Inc.vs.Yatco,77Phil.496,
YutivoSonsHardwareCompanyvs.CourtofTaxAppeals,supra).

Somustthecaseatbaraddtothisjurisprudence.Anindubitabledeductionfromthefindingsofthetrialcourt
cannotbutleadtotheconclusionthatthebusinessofthecorporationislargely,ifnotwholly,thepersonalventure
ofForrestL.Cease.Thereisnotevenashadowofashowingthathischildrenweresubscribersorpurchasersof
thestockstheyown.TheirparticipationasnominalshareholdersemanatedsolelyfromForrestL.Cease's
gratuitousdoleoutofhisownsharestothebenefitofhischildrenandultimatelyhisfamily.

Werewesustainthetheoryofpetitionersthatthetrialcourtactedinexcessofjurisdictionorabuseofdiscretion
amountingtolackofjurisdictionindecidingCivilCaseNo.6326asacaseforpartitionwhenthedefendant
therein,TiaongMillingandPlantationCompany,Inc.asregisteredownerassertedownershipoftheassetsand
propertiesinvolvedinthelitigation,whichtheorymustnecessarilybebasedontheassumptionthatsaidassets
andpropertiesofTiaongMillingandPlantationCompany,Inc.nowappearingunderthenameofF.L.Cease
PlantationCompanyasTrusteearedistinctandseparatefromtheestateofForrestL.Ceasetowhichpetitioners
andrespondentsaslegalheirsofsaidForrestL.Ceaseareequallyentitledshareandsharealike,thenthatlegal
fictionofseparatecorporatepersonalityshallhavebeenusedtodelayandultimatelydepriveanddefraudthe
respondentsoftheirsuccessionalrightstotheestateoftheirdeceasedfather.ForTiaongMillingandPlantation
Companyshallhavebeenabletoextenditscorporateexistencebeyondtheperiodofitscharterwhichlapsedin
June,1958undertheguiseandcoverofF.L,CeasePlantationCompany,Inc.asTrusteewhichwouldbeagainst
thelaw,andasTrusteeshallhavebeenabletousetheassetsandpropertiesforthebenefitofthepetitioners,to
thegreatprejudiceanddefraudation.ofprivaterespondents.Hence,itbecomesnecessaryandimperativeto
piercethatcorporateveil.

Underthethirdassignederror,petitionersclaimthatthedecisionofthelowercourtinthepartitioncaseisnot
interlocutorybutratherfinalforitconsistsoffinalanddeterminativedispositionsofthecontentionsoftheparties.
Wefindnomeritinpetitioners'stand.

Underthe1961pronouncementandrulingoftheSupremeCourtinVda.deZaldarriagavs.Enriquez,1SCRA
1188(andthesequelcaseofVda.deZaldarriagavs.Zaldarriaga,2SCRA356),thelowercourt'sdismissalof
petitioners'proposedappealfromitsDecember27,1969judgmentasaffirmedbytheCourtofAppealsonthe
groundofprematurityinthatthejudgmentwasnotfinalbutinterlocutorywasinorder.Aswassaidinsaidcase:

ItistruethatinAfricavs.Africa,42Phil.934andothercasesitwasheldcontrarytotherulelaid
downinRonvs.Mojica,8Phil.328Rodriguezvs.Ravilan,17Phil.63thatinapartitioncasewhere
defendantreliesonthedefenseofexclusiveownership,theactionbecomesonefortitleandthe
decisionororderdirectingpartitionisfinal,buttherulingtothiseffecthasbeenexpresslyreversedin
theFuentebellacasewhich,inouropinion,expressesthecorrectview,consideringthatadecisionor
orderdirectingpartitionisnotfinalbecauseitleavessomethingmoretobedoneinthetrialcourtfor
thecompletedispositionofthecase,namely,theappointmentofcommissioners,theproceedingsto
behadbeforethem,thesubmissionoftheirreportwhich,accordingtolaw,mustbesetforhearing.
 Infact,itisonlyaftersaidhearingthatthecourtmayrenderafinaljudgmentfinallydisposingofthe
action(Rule71,section7,RulesofCourt).(1SCRAatpage1193).

Itshouldbenoted,however,thatthesaidrulinginZaldarriagaasbasedonFuentebellavs.Carrascoso,XIV
LawyersJournal305(May27,1942),hasbeenexpresslyabandonedbytheCourtinMirandavs.Courtof
Appeals,71SCRA295331333(June18,1976)whereinMr.JusticeTeehankee,speakingfortheCourt,laid
downthefollowingdoctrine:

TheCourt,however,deemsitproperfortheguidanceofthebenchandbartonowdeclareasis
clearlyindicatedfromthecompellingreasonsandconsiderationshereinabovestated:

thattheCourtconsidersthebetterruletobethatstatedinH.E.HeacockCo.vs.AmericanTrading
Co.,towit,thatwheretheprimarypurposeofacaseistoascertainanddeterminewhobetween
plaintiffanddefendantisthetrueownerandentitledtotheexclusiveuseofthedisputedproperty,
"thejudgment...renderedbythelowercourt[is]ajudgmentonthemeritsastothosequestions,
and[that]theorderofthecourtforanaccountingwasbasedupon,andisincidentaltothejudgment
onthemerits.Thatistosay,thatthejudgment...[is]afinaljudgment...thatinthiskindofacase
anaccountingisamereincidenttothejudgmentthatanappealliesfromtherenditionofthe
judgmentasrendered..."(asiswidelyheldbyagreatnumberofjudgesandmembersofthebar,as
shownbythecasessodecidedandfiledandstillpendingwiththeCourt)forthefundamental
reasonsthereinstatedthat"thisismoreinharmonywiththeadministrationofjusticeandthespirit
andintentofthe[Rules].Ifonappealthejudgmentofthelowercourtisaffirmed,itwouldnotinthe
leastworkaninjusticetoanyofthelegalrightsof[appellee].Ontheotherhand,ifforanyreasonthis
courtshouldreversethejudgmentofthelowercourt,theaccountingwouldbeawasteoftimeand
money,andmightworkamaterialinjurytothe[appellant]and

thataccordingly,thecontraryrulinginFuentebellavs.Carrascosowhichexpresslyreversedthe
Heacockcaseandalineofsimilardecisionsandruledthatsuchadecisionforrecoveryofproperty
withaccounting"isnotfinalbutmerelyinterlocutoryandthereforenotappealable"andsubsequent
casesadheringtothesamemustbenowinturnabandonedandsetaside.

Fuentebellaadoptedinsteadtheoppositelineofconflictingdecisionsmostlyinpartitionproceedings
andexemplifiedbyRonvs.Mojica8Phil.928(undertheoldCodeofCivilProcedure)thatanorder
forpartitionofrealpropertyisnotfinalandappealableuntilaftertheactualpartitionoftheproperty
asreportedbythecourtappointedcommissionersandapprovedbythecourtinitsjudgment
acceptingthereport.ltmustbeespeciallynotedthatsuchrulegoverningpartitionsisnowso
expresslyprovidedandspelledoutinRule69oftheRulesofCourt,withspecialreferenceto
Sections1,2,3,6,7and11,towit,thattheremustfirstbeapreliminar,orderforpartitionofthereal
estate(section2)andwherethepartiescoownerscannotagree,thecourtappointed
commissionersmakeaplanofactualpartitionwhichmustfirstbepasseduponandacceptedbythe
trialcourtandembodiedinajudgmenttoberenderedbyit(sections6and11).Inpartitioncases,it
mustbefurtherborneinmindthatRule69,section1refersto"apersonhavingtherighttocompel
thepartitionofrealestate,"sothatthegeneralruleofpartitionthatanappealwillnotlieuntilthe
partitionordistributionproceedingsareterminatedwillnotapplywhereappellantclaimsexclusive
ownershipofthewholepropertyanddeniestheadverseparty'srighttoanypartition,aswasthe
rulinginVillanuevavs.CapistranoandAfricavs.Africa,supra,Fuentebellasexpressrehearsalof
thesecasesmustlikewisebedeemednowalsoabandonedinviewoftheCourt'sexpressed
preferencefortherationaleoftheHeacockcase.

TheCourt'sconsideredopinionisthatimperativeconsiderationsofpublicpolicyandofsound
practiceinthecourtsandadherencetotheconstitutionalmandateofsimplified,just,speedyand
inexpensivedeterminationofeveryactioncallforconsideringsuchjudgmentsforrecoveryof
propertywithaccountingasfinaljudgmentswhicharedulyappealable(andwouldthereforebecome
finalandexecutoryifnotappealedwithinthereglementaryperiod)withtheaccountingasamere
incidentofthejudgmenttoberenderedduringthecourseoftheappealasprovidedinRule39,
section4ortobeimplementedattheexecutionstageuponfinalaffirmanceonappealofthe
judgment(asinCourtofIndustrialRelationsunfairlaborpracticecasesorderingthereinstatementof
theworkerwithaccounting,computationandpaymentofhisbackwageslessearningselsewhere
duringhislayoff)andthattheonlyreasongiveninFuentebeliaforthecontraryruling,viz,"the
generalharmthatwouldfollowfromthrowingthedooropentomultiplicityofappealsinasinglecase"
oflesserimportandconsequence.(Emphasiscopied).

ThemirandarulinghassincethenbeenappliedasthenewrulebyaunanimousCourtinValdezvs.Bagasao,82
SCRA22(March8,1978).

IftherewereavalidgenuineclaimofExclusiveownershipoftheinheritedpropertiesonthepartofpetitionersto
respondents'actionforpartition,thenundertheMirandaruling,petitionerswouldbesustained,forasexpressly
heldtherein"thegeneralruleofpartitionthatanappealwillnotlieuntilthepartitionordistributionproceedings
areterminatedwillnotapplywhereappellantclaimsexclusiveownershipofthewholepropertyanddeniesthe
adverseparty'srighttoanypartition."

Butthisquestionhasnowbeenrenderedmootandacademicfortheveryissueofexclusiveownershipclaimed
bypetitionerstodenyanddefeatrespondents'righttopartitionwhichistheverycoreoftheirrejectedappeal
hasbeensquarelyresolvedhereinagainstthem,asiftheappealhadbeengivenduecourse.TheCourthas
hereinexpresslysustainedthetrialcourt'sfindings,asaffirmedbytheCourtofAppeals,thattheassetsor
propertiesofthedefunctcompanyconstitutetheestateofthedeceasedproprietor(supraatpage7)andthe
defunctcompany'sassertionofownershipofthepropertiesisalegalcontradictionandwouldbutthwartthe
liquidationandfinaldistributionandpartitionofthepropertiesamongthepartieshereofaschildrenoftheir
deceasedfatherForrestL.Cease.Thereisthereforenofurtherhindrancetoeffectthepartitionoftheproperties
amongthepartiesinimplementationoftheappealedjudgment.

Onelastconsideration.Partiesarebrothersandsisters,legalheirsoftheirdeceasedfather,ForrestL.Cease.By
allrightsinlawandjurisprudence,eachisentitledtoshareandsharealikeintheestate,whichthetrialcourt
correctlyordainedandsustainedbytheappellatecourt.Almost20yearshavelapsedsincethefilingofSpecial
ProceedingsNo.3893fortheadministrationoftheEstateofForrestL.CeaseandCivilCaseNo.6326for
liquidationandpartitionoftheassetsofthedefunctTiaongMillingandPlantationCo.,Inc.Asuccessionof
receiverswereappointedbythecourttotake,keepinpossession,preserveandmanagepropertiesofthe
corporationwhichatonetimeshowedanincomeofP386,152.90andexpensesofP308,405.01fortheperiod
coveringJanuary1,1960toAugust31,1967asperSummaryofOperationsofCommissionerforFinance
appointedbytheCourt(BriefforRespondents,p.38).Inthemeantime,ejectmentcaseswerefiledbyand
againsttheheirsinconnectionwiththepropertiesinvolved,aggravatingthealreadystrainedrelationsofthe
parties.Aprudentandpracticalrealizationofthesecircumstancesoughtandmustconstrainthepartiestogive
eachonehisdueinlawandwithfairnessanddispatchthattheirbasicrightsbeenjoyed.Andbyremandingthis
casetothecourtaquofortheactualpartitionoftheproperties,thesubstantialrightsofeveryoneoftheheirs
havenotbeenimpaired,forinfact,theyhavebeenpreservedandmaintained.

WHEREFORE,INVIEWOFTHEFOREGOING,thejudgmentappealedfromisherebyAFFIRMEDwithcosts
againstthepetitioners.

SOORDERED.

Teehankee,Actg.C.J.,(Chairman),Makasiar,Fernandez,DeCastroandMelencioHerrera,JJ.,concur.

#Footnotes

1SpecialSeventhDivisionGatmaitan,J.,ponentePerez,J.,concurringintheresultReyes,A.,J.,
concurring.

2SeeMartin,RulesofCourt,Vol.111,308(1973)citingthecasesofAfricav.Africa,42Phil.902
Bargayov.Camumot,40Phil.856Rodriguezv.Ravilan,17Phil.63DeCastrovs.Echarri,20Phil.
23Ferrervs.Inchausti,38Phil.905,Reyesvs.Cordero,46Phil.658Villanuevavs.Capistrano,49
Phil.460Hilariovs.Dilla,etal.,CAG.R.No.5266R,Feb.28,1951.

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